Source: ForexYard
Fears regarding the pace of the global economic recovery sent riskier assets lower during yesterday’s session. The EUR/USD fell some 90 pips during the European session, while the EUR/JPY tumbled close to 150 pips. Today, the US dollar may be able to maintain its bullish trend if the FOMC Meeting Minutes helps boost investor confidence in the US economy. Later in the week, traders will want to remember that the US will be releasing the monthly Non-Farm Employment Change figure. With analysts predicting growth in the US employment sector, the dollar may see significant upward momentum in the coming days.
Economic News
USD – Positive US Data Helps USD
The US dollar saw gains vs. most of its riskier currency rivals as the combination of poor international fundamental news and positive US indicators caused investors to revert to the greenback. The EUR/USD, which last week saw significant upward momentum, tumbled below the 1.3300 level yesterday. At the same time, risk aversion among investors sent the dollar lower vs. the safe haven Japanese yen. The USD/JPY fell as low as 82.25 during the European session.
Turning to today, traders will want to pay attention to the US FOMC Meeting Minutes. Investors will be closely monitoring the meeting minutes for clues as to the current state of the US economic recovery. Positive signs of economic growth could help the dollar maintain its gains vs. the euro and recover its recent losses against the yen.
Later in the week, traders will want to keep an eye on a batch of significant US data, including tomorrow’s ADP Non-Farm Employment Change figure. The ADP figure is considered a valid predictor of Friday’s all important Non-Farm Employment Change figure on Friday. Analysts are predicting tomorrow’s figure to come in at 209K, which if true could help the dollar going into the rest of the week.
EUR
EUR Tumbles vs. Main Currency Rivals
The euro tumbled throughout yesterday’s trading session, as negative global data led to risk aversion in the marketplace. The EUR/JPY fell as low as 109.10, while the EUR/USD dropped below the 1.3300 level. Investors attributed the euro’s bearishness to fears that the euro-zone could face a prolonged recession in the coming months. In addition, a generally positive outlook with regards to the US economic recovery has caused investors to revert their funds to the safe haven USD.
Turning to today, traders will want to monitor any announcements out of the euro-zone, especially with regards to the current state of the Portuguese economy. Portugal is widely seen as the country most in need of debt restructuring in the euro-zone. Any negative news is likely to weigh down on the euro. In addition, the US FOMC Meeting Minutes may generate market volatility for the common currency. Should the meeting minutes indicate continued economic growth in the US, the EUR/USD may continue to fall during today’s session.
EUR – EUR Tumbles vs. Main Currency Rivals
The euro tumbled throughout yesterday’s trading session, as negative global data led to risk aversion in the marketplace. The EUR/JPY fell as low as 109.10, while the EUR/USD dropped below the 1.3300 level. Investors attributed the euro’s bearishness to fears that the euro-zone could face a prolonged recession in the coming months. In addition, a generally positive outlook with regards to the US economic recovery has caused investors to revert their funds to the safe haven USD.
Turning to today, traders will want to monitor any announcements out of the euro-zone, especially with regards to the current state of the Portuguese economy. Portugal is widely seen as the country most in need of debt restructuring in the euro-zone. Any negative news is likely to weigh down on the euro. In addition, the US FOMC Meeting Minutes may generate market volatility for the common currency. Should the meeting minutes indicate continued economic growth in the US, the EUR/USD may continue to fall during today’s session.
JPY – Safe-Haven Yen See Gains amid Risk Aversion
A slow-down in the Chinese economy continues to generate risk aversion in the marketplace and led to significant gains for the Japanese yen during yesterday’s trading session. Both the USD/JPY and EUR/JPY tumbled throughout European trading, despite a positive US ISM Manufacturing PMI. Whether the yen will be able to maintain these gains in the coming days will largely be dependent on a batch of US data set to be released this week.
Positive signs of US economic growth may come out today when the FOMC Meeting Minutes are released. If true, the USD/JPY may reverse its current downward trend. Later in the week, traders will also want to note Wednesday’s ADP Non-Farm Employment Change and ISM Non-Manufacturing PMI. Both are forecasted to come in with positive figures, which could weigh down on the yen.
Crude Oil – US News Leads to Gains for Crude Oil
The price of crude oil reversed its recent bearish trend yesterday following the release of the US ISM Manufacturing PMI. The news convinced investors that demand for crude oil could go up in the world’s largest energy consuming country in the coming days. As a result, the price of crude went up close to $1 a barrel during the European session.
Crude may continue to move up in the coming days, as analysts are forecasting US news to continue coming in positive. At the same time, any negative data out of the euro-zone this week could cause oil to reverse its bullish trend. Traders will want to monitor any announcements regarding the current state of Portuguese economy. Negative data could cause the price of oil to slip if investors determine that demand in the euro-zone will go down.
Technical News
EUR/USD
The weekly chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, there is a fresh bearish cross forming on the daily chart’s Slow Stochastic indicating a bearish correction might take place in the nearest future. In that case traders are advised to swing in after the breach takes place.
GBP/USD
The pair has recorded much bullish behavior in the past several days. However, the technical data indicates that this trend may reverse anytime soon. For example, the daily chart’s Stochastic Slow signals that a bearish reversal is imminent. . Going short with tight stops might be a wise choice.
USD/JPY
The price of this pair appears to be floating in the over-bought territory on the weekly chart’s RSI indicating a downward correction may be imminent. The downward direction on the Slow Stochastic also supports this notion. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.
USD/CHF
The pair has recorded much bearish behavior in the past several days. However, the technical data indicates that this trend may reverse anytime soon. For example, the daily chart’s Stochastic Slow signals that a bullish reversal is imminent. An upward trend today is also supported by the RSI. Going long with tight stops may turn out to pay off today.
The Wild Card
EUR/NOK
The Williams Percent Range on the daily chart has dropped below -80, in a sign that this pair could see upward movement in the near future. This theory is supported by the Slow Stochastic on the 8-hour chart, which has formed a bullish cross. Forex traders may want to go long in their trades today ahead of a possible bullish correction.
Forex Market Analysis provided by ForexYard.
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