Source: ForexYard
Yesterday, traders looked to invest in riskier assets, strengthening the euro and devaluing the dollar. A lack of significant overall news had investors looking to today’s news for clues as to the level of risk appetite in the marketplace. Investors will want to note that the U.S. Trade Balance and Unemployment Claims will likely have an impact on overall trading when the numbers are released at 12:30 GMT. Better than expected Trade Balance and Unemployment Claims figures may mean the dollar can gain back some of the ground it lost yesterday.
Economic News
USD – U.S. Unemployment Claims set to Generate Volatility
The U.S. dollar devalued in yesterday morning’s trading against other currencies as investors looked to trade riskier assets. The AUD/USD had a morning low of 1.0182 before reaching a high of 1.0254. The USD/CHF fell during this morning’s trading from a high of 0.9430 to a low of 0.9387.
Today the release of the U.S. Trade Balance and Unemployment Claims figures at 12:30 GMT may have a significant impact on trading. If the numbers are positive, the dollar may regain some of the ground it lost from yesterday morning’s trading.
EUR – Risk Taking Gives Euro Moderate Boost
Yesterday, as investor shifted their funds to riskier assets, the value of the euro improved. The EUR/USD and EUR/JPY made quick rallies during morning trading and both pairs gained around 60 pips to reach as high as 1.2900 and 101.07, respectively.
Euro traders will want to watch major new releases out of the U.S. today. If the U.S. Trade Balance and Unemployment Claims figures come in below expectations, the euro may be able to extend yesterday’s bullish momentum.
CAD – Canadian Trade Balance Figure may Boost CAD
After risk aversion brought the USD/CAD down to 0.9767 during morning trading, the pair was able to recoup most of its losses later in the day to trade as high as 0.9794. Also, due to traders investing in riskier assets, the EUR/CAD rose significant during mid-day trading by more than 50 pips to reach the 1.2620 level.
Today, investors in the Canadian dollar will want to note that the Canadian Trade Balance will be released at 12:30 GMT, the same time as the U.S. Trade Balance figure. If the Canadian data comes in above expectations and the U.S. Trade Balance numbers are negative, the CAD could see significant gains today.
Crude Oil – U.S. Crude Oil Inventories to Be Released in Afternoon Trading
Supply side fears in the Middle East caused the price of crude oil to spike in afternoon trading yesterday. By the afternoon session, the commodity shot up close to $2 a barrel to come within reach of the $94 level.
Today, commodities traders will want to note the release of U.S. economic news, including the Crude Oil Inventories figure, set to be announced at 15:00 GMT. If the U.S. inventories data comes in higher than expected, the price of oil might trend downward during the afternoon session.
Technical News
EUR/USD
While the weekly chart’s Williams Percent Range has crossed over into overbought territory, most other long-term technical indicators place this pair in the neutral zone. Traders may want to take a wait and see approach for this pair, as a clearer picture is likely to present itself in the coming days.
GBP/USD
A bullish cross on the daily chart’s Slow Stochastic indicates that this pair could see an upward correction in the near future. Furthermore, the same chart’s Williams Percent Range has dropped into the oversold zone. Traders may want to open long positions ahead of possible bullish movement.
USD/JPY
The Bollinger Bands on the weekly chart appear to be narrowing, signaling that this pair could see a price shift in the coming days. Furthermore, the MACD/OsMA on the same chart has formed a bullish cross, indicating that the price shift could be upward. Going long may be the preferred strategy for this pair.
USD/CHF
The Williams Percent Range on the weekly chart is currently in oversold territory, indicating that an upward correction could occur in the near future. Additionally, the Slow Stochastic on the same chart has formed a bullish cross. Traders may want to open long positions for this pair.
The Wild Card
Soybeans
The Relative Strength Index on the daily chart is approaching the oversold zone, indicating that an upward correction could occur in the near future. Furthermore, a bullish cross has formed on the same chart’s MACD/OsMA. This may be a good time for forex traders to open long positions ahead of possible bullish movement.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
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