Pound Strong on Euro As Inflation Increases

By TraderVox.com

Tradervox (Dublin) – The National Statistics released its Consumer Price Index report today showing that inflation increased as expected. The CPI measures price movements through comparison of retail prices of representative shopping basket of goods and services. CPI is an indication of inflation and changes in purchasing trend where a high is seen as positive for the sterling pound and a low reading is negative.

The report released today showed an increase to 3.5 percent from 3.4 percent registered last month. This is in line with economists’ prediction and it led to a stronger pound against the euro. The GBP/USD cross climbed higher in anticipation of the report and remained high after the report was released. The Retail Price Index (RPI) declined to 3.6 percent as expected from 3.7 percent registered last month. In addition, the DCLG HPI rose as expected by 0.3 percent.

Before the report, the pound increased against the dollar to trade at 1.59 after it had fallen to 1.5820 yesterday. The pound rallied from 1.5860 to appreciate by 0.3 percent to $1.5949. It was also strong on the on the yen climbing 0.7 percent to trade at 128.69 yen. Against the euro, the Great Britain Pound rose by 0.4 percent to exchange at 82.34 pence per euro.

The sterling has been performing very well for the last one month increasing by 0.9 percent. It has been the second best performer among the ten top currencies in the world. According to David Bloom, inflation has been sticky across the board and he advises that the current increase in the UK inflation presents a good opportunity to sell into it.

The concerns in about the European debt crisis has caused investors to look for relative safe haven assets in the UK government debt hence causing gilts to decline for the first time in three days. The German bonds after Spain raised more than its target in a bill sale. Positive reports from UK have eased speculation of another round of asset purchases by the Bank of England.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

Fed Struggling With a Monetary Policy Exit Strategy

By TraderVox.com

Tradervox (Dublin) – Last week saw a number of fed officials give speeches around the country talking about the current economic status and hinting on the threshold they expect to before they can abandon the near zero interest rate monetary policy. According to some analysts, the Fed is giving signals at the benchmark it is using to measure economic growth and when it expects to leave the monetary policy.

Ethan Harris, of Bank of America Merrill Lynch indicated that the policy makers are relying on communications about their expectations as a way of adding stimulus to the economy. Their sentiments so far have raised investor confidence and the dollar has advanced against major currencies.

Harris has indicated that the recent round of speeches by Fed officials is seen as a strategy to avert the actual hiking of interest rates and improve investor confidence. He explained that the present scenarios of showing the public how the Fed will react in case of any eventuality are aimed at guiding the market in advance by explaining the reaction function.  This allows the market to react hence averting a possible scenario where the Fed would actually have to change the scenario.

According to the recent sentiments from Fed officials, there is little indication that the Federal Reserve market Committee will change the monetary policy before 2014. The jobless rate still remains well above the Fed’s target of 5 percent at 8.2 percent. Two Fed officials, the New York Fed President William Dudley and the Fed Vice Chairman Janet Yellen, have both supported the monetary policy in their separate speeches last week.

However, the biggest investors in the world still hold the view that the Fed will carry out another round of quantitative easing citing weakening growth and the return of the Europe debt crisis. Speculation about the intention of the Fed to buy home-loan bonds has increased 2012 returns on government backed mortgage debt.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

Play Low Natural Gas Prices With Bonds

Article by Investment U

How to Play Low Natural Gas Prices With Bonds

Bonds like ATP Oil and Gas provide a safe way to play record low natural gas prices and the coming boom in this fuel of the future.

I love it when things are bad! A 300- point drop in the market makes me feel like a kid at Christmas. In fact, I’m to the point where I won’t buy anything unless we have some sort of major correction or setback.

But the “wait for a market dump” philosophy presents a few problems for a bond guy like me.

The one thing about the bond market is that it doesn’t have as many wild swings as the stock market. And since there just aren’t as many sell-offs in the bond market, it requires a lot more patience to take advantage of good buying opportunities.

But there’s a very good buying opportunity in bonds, right now… It’s in an industry that is absolutely essential to our economic well being, and you definitely need to be a part of it.

Natural Gas Prices At Historic Lows

In case you don’t follow the energy markets, a glut of shale gas has driven NG prices to multi-year lows.

The Bakken, Eagle Ford, Utica and Marcellus shale gas fields are producing so much gas, developers have had to slow down and in some cases stop production. In many cases, drillers have shifted from gas drilling to shale oil drilling in the Bakken and the Utica areas.

There just isn’t the cash flow at the current market prices to justify further development of natural gas. And that’s the good news.

The slowdown in production and drop in revenue in natural gas have started showing up in the numbers of all gas developers, pipelines and sellers, and the bond and stock markets are reacting to them.

In the past few months, bond prices for most gas drillers have taken a big hit. Some of the price drops are understandable; you can’t have the bottom drop out of the market and not see a price correction in the underlying stocks and bonds.

But the bulk of the price fluctuations are the result of one of the saddest truths there is about the bond market.

The bond market is run by a bunch of hair-trigger cowards and “Chicken Littles.”

For two decades I watched bond traders, at the slightest hint of any bad news, run around like chickens without heads. I can’t count the number of times I was advised to avoid this bond or that bond, or to sell a bond just to watch it run right back up in price when the cackling finally quiets down.

In my experience, in every situation in the bond market where there has been any negative news, the traders have oversold and overreacted.

This Chicken Little attitude in the bond market is unnerving, but it creates excellent short-term buying opportunities.

Right now there are numerous gas company bonds at good discounts that are paying huge returns on very short maturities. If you’ve read any of my other articles, that description should sound very familiar.

Good companies, short maturities and discounts! Sign me up!

Here’s one I really like.

Unlike Dividends, Bond Yields Can’t Be Cut

The opening line in every research report about today’s Investment U Plus pick, and every other gas related company, is the same; they’ve been hurt by the glut of natural gas and the warmer-than-expected winter in North America.

This company missed its numbers, but management made some good decisions that improved seasonal spreads, and it upped its outlook for 2013.

But one of the reasons I really like this one is that it’s a partnership, and it can cut its payout to stockholders as necessary. So, as it claws out of this gas price pit, it can ease its fiscal burden by cutting the current $1.40 payout.

Oh, and it’s a BB- bond, which is just a hair below investment grade.

It’s an 8.875% bond that’s selling for about 94. It matures on 3/15/18, and its MEAR, minimum expected annual return, is listed below.

Twelve interest payments of $44.37, plus $60 capital gains, divided by our cost of $940, for a holding time 71 months, gives us a MEAR of 10.65%.

Keep in mind, the interest due on this bond cannot be reduced by the board. This is a legal contract between the company and the bondholders. Unlike the dividend payment on the stock, it’s written in stone and cannot be cut.

Since I know some of you won’t be satisfied with 10.6%, even though that’s 10 times what you made in the stock market over the past 12 years, and that’s assuming you did everything right. So here’s an idea for the folks out there who are looking for bigger returns.

This is a CCC- bond with an 11.875% coupon selling for about 75, or $750.

Higher Risk, Higher Reward

As with the last bond, ATP Oil and Gas has had a rough ride lately, but has lots of assets to offset even a worse case scenario in the gas business.

Here’s how the MEAR breaks down.

Seven interest payments of $59.37, plus $250 in capital gains, divided by our cost of $750, and our holding time of 36.5 months, for a MEAR of 29.17%.

Twenty-nine percent is huge, but this is a CCC-, which means it carries more risk than the BB- Investment U Plus pick.

In either case, these bonds are exactly what I live for; good companies in a beaten-up industry, high coupons, good long-term prospects, in this case, good gas assets and short maturities at a discount.

Natural gas is the fuel of the future. It will be one of our biggest exports, in the form of LNG and eventually it’ll be our primary transportation fuel. It isn’t a perfect play, there will be bumps along the way, but it beats the heck out of 2% from a 10-year treasury.

Good Investing,

Steve McDonald

P.S. Since bonds have a limited inventory, I wanted to make sure our Investment U Plus readers were able to take advantage of the BB- rated bond that I recommend in today’s article.

To access this bond and our other experts’ picks with each and every Investment U issue, click here.

Article by Investment U

“Bearish Trend Remains” for Gold, “Low Demand” for Silver sees Comex Warehouse Stocks Surge to 10-Year Highs

London Gold Market Report
from Ben Traynor
BullionVault
Tuesday 17 April 2012, 08:30 EDT

SPOT MARKET gold prices were hovering just above $1650 an ounce ahead of Tuesday’s US trading – in line with where they have spent most of the last month – while stock markets in Europe ticked higher following Spain’s successful auction of short-term Treasury bills.

“Gold remains in a bearish trend so long as it stays below $1697, which was the most recent top on March 27,” say technical analysts at bullion bank Scotia Mocatta.

Silver prices rose to their highest level this week – hitting $31.81 per ounce – while other industrial commodities were broadly flat and government bond prices fell.

Stockpiles of silver bullion held in Comex warehouses meantime have hit their highest levels in at least decade, according to newswire Reuters, which first began compiling the data 10 years ago.

“When you are seeing people delivering into Comex, it is typically because they have nothing better to do with the metal,” explains David Jollie, strategic analyst at Mitsui Precious Metals in London.

“Generally if you are seeing Comex stocks building, you would say that means that premiums are not particularly high anywhere, and that means that demand is low.”

The Spanish government saw its short-term borrowing costs rise Tuesday when it auctioned 12-month and 18-month bills. The average yield on 12-month bills was 2.623% – up from 1.418% last month. The yield on 18-month bills jumped from 1.711% last month to 3.110%.

Spain did however manage to sell €3.2 billion of debt – above the maximum target of €3 billion announced before the auction.

“The key was again domestic bank bidding,” says Michael Leister, rate strategist at DZ Bank.
“But it doesn’t change the bigger picture too much. The key will be the bond auction on Thursday.”

Spain, whose banks were believed to be among the biggest borrowers at the European Central Bank’s longer term refinancing operations (LTRO) in December and February, plans to auction between €1.5 billion and €2.5 billion in 2-Year and 10-Year bonds two days from now.

Spanish 10-Year bond yields rose above 6% yesterday, before easing back slightly this morning, while spreads over 10-Year German bunds hit their highest levels since November.

“The positive effect of LTRO operations is now well on the wane,” reckons Lyn Graham-Taylor, London-based fixed income strategist at Rabobank.

“We are well and truly back in crisis mode.”

The government in Madrid has said it will seize control of the budgets of Spanish regions if they fail to stick to deficit limits, as prime minister Mariano Rajoy’s government seeks to bring Spain’s deficit down to the target of 3% of GDP next year, as agreed with the European Union.

Spanish debt is now the tenth riskiest sovereign debt in the world, according to a new report published by data analysis firm CMA Vision.

Inflation in the Eurozone as a whole meantime, as measured by the consumer price index, held steady at an annual rate of 2.7% last month, official data published Tuesday show. Core CPI – which excludes items such as food and energy – ticked higher, from 1.5% to 1.6%.

Here in the UK, CPI inflation rose to 3.5% last month – up from 3.4% in February.

The London Metals Exchange, which specializes in trading non-ferrous base metals, is reportedly considering offering settlement in Chinese Renminbi. Contracts are currently denominated in Dollars, Euros, Yen and Sterling – with the LME said to be considering dropping Sterling.

Over in India, traditionally the world’s largest source of gold bullion demand, jewelers are reporting a 50% drop in sales ahead of next week’s Akshaya Tritiya festival – seen as an auspicious day in the Hindu calendar to buy gold.

“Around this time, we [usually] sell 500-600 kilograms of gold daily,” former Bombay Bullion Association president Suresh Hundia, told the Wall Street Journal on Tuesday.

“But this time, purchases are down to 200-300 kilos.”

Indian jewelers staged a three-week strike recently following the Union Budget of March 16, which extended the reach of sales tax on gold as well as doubled gold import duties.

India’s central bank meantime cut its main policy interest rate today from 8.5% to 8%, the first cut in three years, citing a slowdown in economic growth.

“Upside risks to inflation [however] persist,” the Reserve Bank of India warned.

“These considerations inherently limit the space for further reduction in policy rates.”

The RBI also announced it has tightened its stance on gold lending companies, and set up a working group to look more closely at the industry.

Ben Traynor
BullionVault

Gold value calculator   |   Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.

(c) BullionVault 2011

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

 

 

Euro Advances on German Confidence Report

By TraderVox.com

Tradervox (Dublin) – The report showed that economic sentiments grew to 13.1 against a projection of a decline to 10.7 by most economists from the previous reading of 11.0. This report indicates the difference between the share of investors who are optimistic and the share of analysts who are pessimistic. The increase in this number indicates that investors are bullish about the euro.

The yen has fallen against most of its major peers as Asian stock rose. Further, a report from the US showing that the US economy is improving might push the yen further down. However, the 17-nation currency pared some of the losses after Spain exceeded its maximum target in a bill sale earlier today. Spain sold 3.18 billion Euros of securities against a maximum target of 3 billion Euros which it had set. The sterling pound gained despite a report showing that inflation accelerated in March.

According to some analysts, the positive data from Europe and fully-participated auctions in the region are providing support for the euro and this might hold the EUR/USD cross at $1.32; however, there are those analysts who are predicting that the euro will finish the year at around $1.23.The current advance against the yen have been caused by the ZEW Economic Sentiment survey which unexpectedly rose and the demand of the Spanish 12-month bills witnessed in the last Spanish bill sale.

Reports from of Japans reluctance to embark on an easing operation have not helped the yen to with stand the pressure from the euro. However, the US dollar remained unchanged against the euro at the start of trading session in New York. The 17-nation currency advanced against the yen by 0.3 percent to trade at 105.98, it had declined by 0.4 percent yesterday. The euro remained unchanged against the greenback trading at $1.3148 after it recovered from a drop to 1.3091.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

Crude Oil Trades Up on Retail Sales and Spanish Debt Crisis

Source: ForexYard

printprofile

Crude oil prices reached a three-day high after better then expected U.S Retail Sales figures and played off the renewed concerns over the financial stability of Spain in the Euro-zone.

U.S retail numbers were on the rise for the month of March, coming as some what of a surprise as the outcome was greater then expected.

Crude for May delivery rose 0.8 percent to$103.77 per barrel on the New York Mercantile Exchange.The commodity was trading just below this rate at $103.68 at  approximately 12:00pm London time. Despite the ongoing tensions with Iran and the West, Crude Oil  has shown a 4.9% rise in prices for 2012 so far.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

South Pacific Dollars Decline over Concerns in Europe

By TraderVox.com

Tradervox (Dublin) – The Aussie and kiwi continued with their decline for the third day today as concerns in Europe escalated. Traders have been seen to move to safe haven assets as the crisis in Europe worsens. Traders are pointing that Spain has shown signs of a debt crisis that may warrant bailout just like Portugal, Ireland, and Greece.

The Australian dollar fell after minutes from the Reserve Bank of Australia showed that officials are willing to make interest rate cuts if the data from the country and around the world continue to deteriorate. The Chinese economy, which is Australia’s biggest trading partner, increased at a slower pace that it had been expected over the first quarter of the year.

Aussie’s South Pacific counterpart, the Kiwi, dropped to lowest in almost six weeks against the yen, as concerns about asset purchases eased last week after the Bank of Japan decided to keep it asset purchases program on hold as well as the monetary policy. The New Zealand dollar may also have been affected by the falling of global shares yesterday after Spain’s borrowing cost surged to the highest this year. Economists have given a dim outlook for the euro-zone causing the currency to decline further against major currencies.

According to Derek Mumford, market concerns are now likely to shift to Spain for the next few months which might not be good for the south pacific currencies. He expects the Aussie to test the 1.02 level against the dollar over the next couple of weeks.

The Australian dollar fell against the US dollar by 0.4 percent to $1.0317 in the Asia session making it the third day the currency have fallen. Against the yen, the Aussie fell by 0.4 percent to trade at 82.96 yen after it had weakened by 0.8 percent yesterday. The other South Pacific dollar, kiwi, dropped by 0.6 percent against the dollar to trade at 81.58 US cents; it touched 65.57 against the yen during the intraday trading, which is the weakest it has been since March 7, before closing the day 0.5 percent lower than yesterday’s close.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

A 26% Yield From One of the Largest Oil Companies on Earth

By Amy Calistri, globaldividends.com

People often ask me about my most profitable investment.

It was an investment I made back in October 1999. Today, it pays me a yield equivalent to 26%, and it has forever changed how I look for income opportunities.

In 1999, I was speaking at an economic conference in New York. During one of the breaks, I struck up a conversation with two gentlemen who both happened to work in the oil and gas business. At the time, I was doing some consulting work for a lawsuit involving a number of large oil companies and had been knee-deep in oil price and production data.

Oil and natural gas prices had been on a steady 20-year decline following the “oil shock” of 1979. By the time 1999 rolled around, analysts had universally soured on the sector. Prices were going lower, they said. In March 1999, The Economist devoted a whole issue to the glut of world oil.

Discussing the future price for oil, The Economist said, “$10 [per barrel] might actually be too optimistic. We may be heading for $5.”

In October 1999, I didn’t agree with the analysts or the common view that oil prices were going to sink lower. As it turns out, neither did my newfound friends at the conference. Over the course of the meeting we exchanged information and data to back up our thesis.

Immediately following that conference, I made an investment in Burlington Resources, and oil and gas company that was later bought by ConocoPhillips (NYSE: COP).

You can see what has happened to oil prices since then…

So why did my investment forever change how I looked for income opportunities?

I still hold a small position in COP. My cost basis is roughly $10 per share. With the shares trading at $73 today, I’ve seen a gain of more than 700%.

And while ConocoPhillips pays an annual dividend of $2.64 per share, for a yield of 3.6% today, my yield on cost is north of 26%.

That’s because ConocoPhillips is one of the most relentless dividend payers on earth. In 1999, when I first bought my stake in Burlington Northern (which then turned into my stake in Conoco), the stock paid a quarterly dividend of $0.17 per share. Today that dividend is $0.66 per share — a 288% increase.

That’s what has changed about my search for income.

Many income investors won’t look twice at a stock yielding 3%. They want to own stocks that pay the highest yields right now. I don’t blame them. I want the same thing.

But ConocoPhillips is proof that when it comes to income, making big and lasting returns is not only about locking-in outsized yields. Sometimes you have to dig a little deeper to see how much potential a “low-yielding” stock like COP actually holds.

 Always searching for your next paycheck,

Amy Calistri
Chief Investment Strategist — The Daily Paycheck

P.S. — If you haven’t done so, you can learn more about my income investing advisory, The Daily Paycheck. In the past year, I’ve collected more than $16,000 in dividends. Learn more about how you can do the same thing by visiting this link.

Disclosure:  Amy Calistri owns shares of COP. StreetAuthority owns COP as part of Scarcity and Real Wealth and Energy and Income’s $100,000 “real money” portfolios. In accordance with company policies, StreetAuthority always provides readers with at least 48 hours advance notice before buying or selling any securities in any “real money” model portfolio. Members of our staff are restricted from buying or selling any securities for two weeks after being featured in our advisories or on our website, as monitored by our compliance officer.

EUR Tumbles vs. Main Currency Rivals

Source: ForexYard

The euro extended its bearish trend against virtually all of its main currency rivals during yesterday’s trading session, as investor fears regarding Spanish debt led to risk aversion in the marketplace. Turning to today, traders will want to pay attention to a batch of news out of both the US and euro-zone. Specifically, the German ZEW Economic Sentiment and US Building Permits figures, scheduled for 9:00 and 12:30 GMT respectively, are expected to generate volatility. Positive German news may help the euro recoup some of its recent losses.

Economic News

USD – Dollar Continues to Fall against Safe-Haven Currencies

The US dollar fell vs. its safe-haven currency rivals yesterday, including the Japanese yen, as investors continued to flee riskier assets amid poor international news. Better than expected US Retail Sales and Core Retail Sales reports did little to help the USD/JPY, which hit a seven-week low at 80.28 during afternoon trading. The greenback had better luck against higher yielding currencies, like the AUD and EUR, during the morning session. That being said, those gains were eventually erased toward the end of European trading.

Turning to today, USD traders will want to focus on today’s US building permits figure, scheduled to be released at 12:30 GMT. Analysts are forecasting the figure to come in at 0.71M, which if true, would signal additional growth in the US economy. The dollar could receive a boost against the yen following the news, assuming that it comes in at or above expectations. At the same time, analysts are warning that should the news come in below expectations, the USD/JPY could continue to fall.

EUR – Spanish Debt Worries Send EUR to New Lows

The euro fell to a two-month low vs. the US dollar and a one and a half year low against the British pound during trading yesterday, as investors continue to flee riskier assets due to debt concerns out of Spain. The EUR/USD briefly dropped below the psychologically significant 1.3000 level during mid-day trading before staging a slight recovery during the afternoon session. By the end of the day, the pair was stable at around the 1.3050 level. The EUR/GBP dropped as low as 0.8208 yesterday before staging a reversal. At the end of the European session, the pair was trading at the 0.8240 level.

Today, traders will want to note the results of the German ZEW Economic Sentiment, scheduled to be released at 9:00 GMT. As the biggest euro-zone economy, German indicators tend to have a significant impact on the euro. At the moment, analysts are predicting today’s news to come in at 19.7, which if true, would signal optimism in the German economy and may help the euro bounce back from its current trend.

Later in the week, traders will want to pay attention to Thursday’s Spanish bond auction. With concerns regarding the Spanish debt situation dominating market sentiment, significant volatility is expected following Thursday’s news.

JPY – Yen Sees Major Gains vs. EUR, USD

The yen saw significant gains against its main currency rivals yesterday, as investors continued to shun riskier assets amid Spanish debt worries. The EUR/JPY dropped well over 100 pips, reaching as low as 104.61 before staging a slight upward correction during afternoon trading. The pair eventually found stability around the 105.00 level. The USD/JPY fell to a seven-week low at 80.28 before staging a minor correction to stabilize at 80.40.

Turning to today, traders will want to pay attention to news out of both the euro-zone and US. While analysts are predicting market sentiment to remain bullish toward the yen for foreseeable future, positive news today may help the euro and USD recoup some of their recent losses.

Crude Oil – Oil Continues to Fall amid Risk Aversion in the Markets

Crude oil saw another bearish day in the marketplace, as an increase in risk aversion due to the Spanish debt crisis drove investors away from the commodity. Furthermore, a gradual reduction in tensions between Iran and the West has lessened supply side fears among traders. Crude reached as high as $103.82 a barrel during afternoon trading, before tumbling to $102.25 toward the end of European trading.

Today, oil traders will want to pay attention to the German ZEW Economic Sentiment. Should the figure come in at or above analyst forecasts, investors may decide to return to higher yielding assets, which could boost the price of oil. That being said, with market sentiment still bearish toward the euro, any gains oil makes could be short lived.

Technical News

EUR/USD

The daily chart’s Williams Percent Range has entered the oversold zone, indicating that an upward correction may occur in the near future. That being said, most other technical indicators show this pair range trading. Taking a wait and see approach may be the wise choice until a clearer picture presents itself.

GBP/USD

Technical indicators on the weekly chart show this pair range-trading, meaning that no defined long term trend can be determined at this time. The Williams Percent Range on the daily chart points to possible bullish movement in the near future. Traders may want to go long in their positions for time being, but beware of any sudden downward corrections.

USD/JPY

A bearish cross appears to be forming on the weekly chart’s MACD/OsMA, meaning that downward movement could occur in the coming days. Opening short positions may be a wise long term strategy, but traders will want to watch out for any minor upward corrections.

USD/CHF

A narrowing of the Bollinger Bands on the weekly chart indicates that this pair could see a price shift in the coming days. Traders will also want to note that a bearish cross appears to be forming on the same chart’s MACD/OsMA. Should the cross form, it may be a sign of an impending downward correction.

The Wild Card

Hang Seng Index

A bearish cross on the daily chart appears to be forming at this time, indicating that a downward correction may occur in the near future. Furthermore, the Williams Percent Range on the same chart is moving into the overbought zone. Forex traders will want to watch both of these technical indicators, as they may be a sign of an impending bearish correction.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.