Month: April 2009

Source: ForexYard

The greenback continues its correction as better unemployment numbers and rising import prices helped to strengthen the Dollar yesterday. Liquidity may be thin during today’s trading due many European firms closed for holiday. However, this may only increase price volatility, creating the potential for traders to take advantage of other’s missed opportunities.

Economic News

USD – The Greenback Heads for Its Weekly Gains

The U.S Dollar advanced against the EUR and the Yen on Thursday as better than expected U.S. weekly jobless claims helped spark a rally in the market, rekindling appetite for riskier assets. A batch of economic data including a dip in jobless claims and a rise in import prices, have improved sentiment for the greenback. In afternoon trading, the USD was 0.8% higher versus the yen at 100.46, while against the EUR the U.S currency rose to 2-week high to $1.3110.

The Dollar also surged after Wells Fargo & Co., the second-biggest U.S. home lender, reported a first quarter profit that beat the most optimistic Wall Street estimates, which point to an easing in the financial crisis. The greenback has risen 2.8% against the European currency this week, the most since the period ended Jan. 9. The improved trade deficit dynamic was Dollar positive, as the U.S. trade deficit in February unexpectedly narrowed to the lowest level in 9 years analysts have said. The narrowing U.S. trade deficit may further support the Dollar as the U.S. spends fewer greenbacks in international markets to buy foreign products.

Currency movements may be volatile in Asian and European trading today as the Easter holiday in the region reduces liquidity amid thin trading volume, exaggerating market moves. This can give volatility traders good reason to enter the market today as the Dollar could extend its positive momentum into the holiday weekend. The EUR/USD could trade as low as the 1.0350 support level today.

EUR – EUR Falls on Speculation the ECB Will Lower Its Benchmark

The European currency lost 0.4% versus the USD, down to $1.3112 and eased 0.1% to 131.94 Yen yesterday, on concerns the Euro-Zone economy would skid more deeply into recession in the coming months. The market has been watching for signs the European Central Bank (ECB) will take unconventional steps to improve credit availability after similar moves by the Federal Reserve and other major central banks.

European Central Bank President Jean-Claude Trichet said the central bank still had some leeway to cut its main Interest Rate from its record low of 1.25% and that benchmark rate below 1% is still open for debate. The central bank would lay out plans for possible unconventional monetary policy measures at its next meeting on May 7. However, Trichet would not give any further details.

Meanwhile, the British pound had also sunk to $1.4663, compared to $1.4704 late Wednesday. Earlier Thursday, the GBP was little changed against the Dollar after the Bank of England left its key lending Rate unchanged at an all time low Thursday and said it would continue buying government bonds and other assets. Policy makers were widely expected to stay on the sidelines after an aggressive series of Rate cuts slashed the bank’s benchmark from 5% to 0.5% since October.

JPY – Yen Drifts on Market’s Slow Activity

The Yen drifted against the Dollar on Thursday, holding on to gains made the previous day as currency market remained quiet, unwilling to build positions ahead of earnings reports by major U.S. banks next week. The Yen was flat against the USD at 99.85 yen after rising about 0.8% on Wednesday. The Japanese currency fell as low as 101.45 on Monday to strike a 6-month peak. The Yen was also unchanged against the EUR, settling at 132.50.

Data on Thursday showed Japan’s machinery orders, a leading indicator of corporate spending, unexpectedly rose in February, a rare positive sign as the country suffers its worst recession since World War Two. Traders said expectations of the stimulus package helped the Yen’s rebound against the Dollar and the EUR but investors may refrain from pushing it higher past the 101 level.

OIL – Oil Breaks $52 a Barrel

Crude Oil prices rose nearly 5.8% on Thursday, fueled by a rally on Wall Street and data showing that the number of workers filing new claims for unemployment benefits fell last week. Adding support to Crude, the UK consultancy Oil Movements said on Thursday that Organization of Petroleum Exporting Countries (OPEC) production will fall 280,000 barrels per day (BPD) in the four weeks ending April 25th. OPEC has agreed to slash 4.2 million BPD of crude output since September to counter falling prices and match slumping world demand.

Oil prices had also climbed Wednesday on weekly Energy Information Administration data showing a smaller-than-expected suppl in U.S. crude inventories and a big slump in distillate stocks. The market reacted violently as optimism in equity markets about the U.S. economy carried over into Crude. The U.S. Economic data that showed crude-oil supplies increased 1.65 million barrels to 361.1 million last week, the highest since July 1993.

Technical News

EUR/USD

After touching on its daily low at 1.3091, the pair has rebounded and is steadily appreciating. There is currently a bullish cross on the 4-hour chart. Perhaps the bullish momentum may continue throughout the day. Also the Bollinger Bands appear to be tightening on the 4-hour as well as the daily chart, indicating a violent breach of the borders may be imminent. Traders may look to be long on this pair today.

GBP/USD

The pair has been range-trading for a while now, with no specific direction. The Daily chart’s Slow Stochastic is providing us with mixed signals. All oscillators on the 4-hour chart do not provide a clear direction as well. Waiting for a clearer sign on the hourlies might be a good strategy today.

USD/JPY

The price of this pair appears to be floating in the over-bought territory on the daily chart’s RSI, indicating a downward correction may be imminent. The downward direction on the 4-hour chart’s slow Stochastic also supports this notion. When the downward breach occurs, going short with tight stops appears to be the preferable strategy.

USD/CHF

The bullish trend is loosing its steam and the pair seems to be consolidating near the 1.1580 level. The daily chart is already floating in over-bought territory, indicating a bearish correction might take place in the nearest future. When the downward breach occurs, going short with tight stops appears to be the preferable strategy.

The Wild Card – Crude Oil

Crude Oil prices rose significantly yesterday and peaked at $52.17 per barrel. However, there is a bearish cross on the hourly chart’s Slow Stochastic, suggesting that the recent upward trend is loosing steam and a bearish correction is impending. This might be a good opportunity for forex traders to enter the trend at a very early stage.

Forex Market Analysis provided by Forex Yard.

© 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.

The Bank of England announced the decision to keep its interest rate at 0.50 percent today as widely expected. The BOE had last reduced its interest rate on March 5th by 50 basis points to bring the rate to its lowest level on record. The bank also renewed its pledge to spend the remaining balance on the 75 billion pound quantitative easing program of buying government and corporate bonds. The bank stated that they have already spent over 26 billion pounds from the program.

Australian unemployment rate edges up 0.1% in March.

The Australian Labour force decreased more than expected in March according to a data release by the Australian Bureau of Statistics. March employment fell by a seasonally adjusted 34,700 workers from February to a total of 10,771,800 unemployed workers.  The unemployment rate increased 0.5 percent to a 5.7 percent and marked the highest jobless rate in over five years. The jobs data surpassed the economic forecasts that were expecting employment to decrease by 25,000 for the month following a revised increase of 1,100 in February. Full-time employment fared the worst in March with a loss of 38,900 jobs while part-time employment increased by 4,200 workers for the month.

Canadian Employment falls more than expected in March.

Canadian employment decreased in March by 61,000 workers according to a report released by Statistics Canada today. The unemployment rate increased to 8.0 percent in March from 7.7 percent and Canadian employment has now fallen by 357,000 jobs since October 2008.  Economic forecasts had expected Canadian employment to decrease by 50,000 workers for the month.

All the jobs losses in March were full-time jobs and full-time employment has now shed 387,000 jobs since October while part-time employment has created 30,000 jobs in the same time frame. The largest declines in employment were seen in the provinces of British Columbia, Alberta and Ontario. The Manufacturing sector shed 34,000 jobs in March while construction lost 18,000 jobs and finance, insurance, real estate & leasing slashed 20,000 jobs. Positively contributing to the jobs data was an increase in “other services” jobs by 23,000 and business, building & other support services which created 13,000 jobs.

Forex Trading – USD mixed today.

The U.S. dollar has been mixed in forex trading today against the major currencies. The dollar has gained against the euro, British pound, Swiss franc and Japanese yen while falling versus the Australian dollar, New Zealand dollar and Canadian dollar.

The euro declined versus the dollar from today’s 1.3263 opening to trading at approximately 1.3164 at the end of the US trading session at 5:53pm EST according to currency data from Oanda. The British pound has declined today versus the dollar from 1.4716 to trading at 1.4669 dollars per pound. The dollar has advanced against the Japanese yen today as the USD/JPY has gained from its 99.87 opening rate to trading at 100.44.

The dollar has fallen against the Canadian dollar after opening at 1.2367 earlier today to trading later at 1.2248. Against the Swiss franc, the USD gained ground from the 1.1487 opening to trading at 1.1563.

The New Zealand and Australian dollars both advanced today against the US dollar from their opening exchange rates. The NZD/USD currently trades at 0.5832 after opening at 0.5797 while the AUD/USD trades at 0.7192 after opening today at 0.7096.

USD/JPY Chart – The USD gaining today against the Japanese Yen in Forex Trading and surpassing the 100 yen to dollar mark.

By GCI Fx Research

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The euro came off vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3125 level and was capped around the US$ 1.3335 level. Traders continued to sell the common currency ahead of the long Easter holiday weekend. European Central Bank member Provopoulos reported “It will take time for these unprecedented fiscal and monetary interventions to have a positive effect.” Regarding the possibility the ECB will undertake “unconventional” policy options, he added “The ECB’s interventions with respect to the non-conventional measures are decided each time after careful evaluation under prevailing circumstances. The assessment of the type and scale of such interventions is based on the basic criterion of whether the benefits will reach the end-user, in other words households and businesses.” ECB President Trichet reported “one can imagine further interest rate cuts.” Data released today saw German industrial production off 2.9% in February and off 20.6% y/y. Also, German final March consumer price inflation was off 0.1% m/m and up 0.5% y/y. The ECB’s monthly bulletin reported “There may be stronger than anticipated positive effects due to the decrease in commodity prices and to policy measures taken. There are concerns that the turmoil in financial markets could have a stronger impact on the real economy, as well as that protectionist pressures could intensify and that there could be adverse developments in the world economy stemming from a disorderly correction of global imbalances.” In U.S. news, weekly initial jobless claims were off 20,000 to 654,000 while continuing jobless claims weer up 95,000 to 5.84 million. It was also reported that February import prices were up 0.5% m/m and off 14.9% y/y, the largest annualized decline since 1982. Additionally, the February trade gap fell more than expected, printing at –US$ 25.97 billion from January’s print of –US$ 36.20 billion. Traders are expressing some optimism with the current round of corporate Q1 earnings including Wells Fargo’s US$ 3 billion profit in Q1. Euro bids are cited around the US$ 1.3100 figure.

¥/ CNY

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥100.55 level and was supported around the ¥99.65 level. Data released in Japan overnight saw February core machinery orders unexpectedly climb +1.4% m/m, the first improvement in five months. Also, March machine tool orders were up +7.7% m/m and off a staggering 84.5% y/y. The Nikkei 225 stock index climbed 3.74% to close at ¥8,916.06. U.S. dollar offers are cited around the ¥104.15 level. The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥131.85 level and was capped around the ¥133.50 level. The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥148.00 figure while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥86.55 level. The Chinese yuan depreciated vis-à-vis the U.S. dollar today as the greenback closed at CNY 6.8340 in the over-the-counter market, up from CNY 6.8320.

₤

The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.4585 level and was capped around the $1.4780 level. Bank of England’s Monetary Policy Committee kept its main Bank rate unchanged at 0.5% today and agreed to keep injecting ₤75 billion in new liquidity into the economy. This represented the first time in seven months the MPC did not change policy. The Bank is expected to continue purchasing assets for the next two months. Data released in the U.K. today saw March output producer prices climb 0.1% m/m and 2.0% y/y, the weakest rise since July 2007. Core output prices were up 0.2% m/m and 3.3% y/y and input prices were up 1.0% m/m. It was also reported that the February trade balance printed at -₤7.3 billion. Cable bids are cited around the US$ 1.4515 level. The euro came off vis-à-vis the British pound as the single currency tested offers around the ₤0.8960 level and was capped around the ₤0.9085 level.

Daily Market Commentary provided by GCI Financial Ltd.

GCI Financial Ltd (”GCI”) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (”Forex”) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (”CFDs”) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.

DISCLAIMER: GCI’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.

By Fast Brokers

The EUR/USD is edging up on light volume as investors continue to bite on oversold conditions.  The Trade Balance and Factory Orders data from Germany cheered up the bulls yesterday.  However, we haven’t seen any game-changing movements to the upside with our 1st tier downtrend line bearing down on price.  The near-term obstacle will be hopping over 3/31 highs, or our 1.3351 resistance.  European paired currencies could be relatively quiet over the remainder of the week as traders shut off their computers early to celebrate Easter with their families.  However, don’t forget the BOE announces its monetary policy decision today while the U.S. releases its Trade Balance and weekly Unemployment Claims.  The battle of the trends proceeds with the downtrend holding the upper-hand for now.  There are multiple tiers bearing down on price and vicious war zones lie ahead, including the psychological 1.35 level, 4/6 highs, and the 3/20-3/26 trading range.  On the other hand, the fact that 4/8 lows were above 3/30 lows keeps the uptrend alive.  Additionally, our 1st tier uptrend line held relatively well.  Therefore, we wouldn’t be surprised to see more near-term gains from the EUR/USD.  The question will be whether the momentum from the current upswing can sling the EUR/USD past April highs, or if the rally falls short.  It seems investors are waiting for U.S. equities to make up their minds directionally, which may not happen until we see earnings from financials and the results from the ’stress tests’.  We expect the positive correlation between the S&P futures and the EUR/USD to hold true, so keep an eye on both.  Fundamentally, our 1.3271 resistance turns support while we maintain our supports of 1.3223, 1.3192, 1.3162, and 1.3126.  To the topside, we hold our resistances of 1.3323, 1.3351, 1.3375 and 1.3413 with fresh top-end hanging at 1.3455.  The 1.35 area acts a psychological barrier again with 1.30 serving as a key psychological cushion.  The EUR/USD is currently exchanging at 1.3281.

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Fast Brokers

The consolidation in the GBP/USD carries on as investors await the monetary policy decision from the BOE today.  Though the BOE has little wiggle room as far as its benchmark rate is concerned, investors will be more focused on any hints as to the success rate of quantitative easing thus far.  Britain’s economic data has been showing signs of life on all fronts the past couple weeks, preventing any sharp movements to the downside despite the recent selloff in U.S. equities.  Therefore, the Cable remains in an advantageous position unless the BOE presents any unexpectedly negative news monetarily.  Nevertheless, we expect the positive correlation between the Cable and U.S. equities to hold true.  Hence, if the S&P futures happen to tank today, the GBP/USD may be so inclined to follow suit albeit in a less-dramatic fashion.  On the other hand, if U.S. equities rally we could see the Cable explode to the upside towards our 2nd tier uptrend line and April highs.  We should see volume tail off later today and tomorrow as many traders take a long weekend for the Easter holiday.  Fundamentally, we maintain resistance of 1.4730 with additional resistances hanging at 1.4770, 1.4834, 1.4883 and 1.4946.  The 1.50 level serves as a key psychological barrier while the 1.45 area acts as a psychological cushion. To the downside, we hold our supports of 1.4676, 1.4612, 1.4571, 1.4538 and 1.4484.   The GBP/USD is currently exchanging at 1.4678.

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Fast Brokers

The USD/JPY is still stuck around 100 as the highly-psychological level is proving to be as difficult to overcome as investors could have anticipated.  Core Machinery Orders came in far above analyst expectations today, showing capital expenditure is improving in Japan due to dwindling inventories.  Core Machinery Orders are forward looking, so the positive release gives investors hope that the Japanese economy could be finding a bottom.  Aso is expected to announce a $150+ Billion stimulus package by the end of the week aimed at reviving the downtrodden economy.  These two developments are giving some strength to the Yen, delaying a possible breakout in the USD/JPY.  However, better than expected Trade Balance and Unemployment Claims releases from the U.S. today could help the cause for the bulls.  We expect the consolidation around 100 to continue until investors commit to a direction.  The currency pair is holding our tight uptrend line as our downtrend lines approach.  If the USD/JPY can brave through our next 3 downtrend lines, we could see some large near-term gains.    Fundamentally, our 100.28 support turns resistance while we maintain our resistances of 100.71, 101.44, 101.98, and 102.50.  To the downside, we hold our supports of 99.79, 99.06, 98.16, and 97.59 with fresh bottom-end resting at 97.11.  The USD/JPY is currently exchanging at 100.08.

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Adam Hewison

We haven’t looked at the British Pound (GBP) lately, as it has been in its major swing to the downside. The question is, is the British pound ready for a comeback?

In our new video, I delve into the depths of the British Pound, and take you step-by-step into my thought process and why we’re looking at this market right now.

Whether you’re a newbie or experienced trader, I believe you will benefit from this video. In the video we give you specific levels that I’m watching, and target levels that we expect the British Pound could achieve if it breaks over one key psychological level.

As always this video is with our compliments and there is no need to register to watch.

Go to the Video here.

Enjoy and feel free to comment on our blog.

Enjoy the video.

Adam Hewison
President, INO.com
Co-creator, MarketClub

Source: ForexYard

The U.S. and Japanese currencies are likely to keep drawing demand as investors stay away from higher-yielding currencies such as the AUD, analysts said. The Yen rallied against Sterling and the Australian and New Zealand dollars, which each fell roughly 1.5% against the Japanese currency.

Economic News

USD – Trader’s Flight to Safety Benefits the Dollar

The Dollar continues to show considerable strength over its currency rivals as financial worries have returned to the market. The 1st quarter earnings season has arrived and drops in equity markets are fueling renewed risk concerns which weigh on the currency market, strengthening risk-averse currencies such as the US Dollar. It is apparent that the desire for riskier, higher yielding currencies has waned given the decreased risk appetite in the forex market. As risk sentiment falls, the Dollar may be the primary beneficiary.

One event seen as triggering the flight to safety was the announcement that the International Monetary Fund (IMF) is increasing its forecast for bad debt held by global financial firms to an astonishing $4 trillion. This announcement has been driving the trading of the USD the past few days as there has been a lack of economic data during the first part of the week.

However, big fundamental indicators will be released today that could swing the markets against the Dollar. At 12:30pm GMT both the U.S. Trade Balance and weekly unemployment claims are due out. A deficit of $36.7 billion is forecasted for the month of month of February. Traders may look for this reading to be worse than the forecasted value as the month of Feb may have been one of the most trying months in U.S. economic history. Also, the US Unemployment Claims figures could be worse as well. U.S. unemployment is currently at a 25-year high and job losses have yet to show a sign of slowing. Traders may be able to profit by the market’s pessimism. Being short on the Dollar may be the right move with the release of these two economic indicators today.

EUR – EUR Weakens As Risk Aversion Continues

The EUR has been declining this week against its major pairs with no sign of the selling to cease. The depreciation of the EUR appears to be largely due to perceived higher risk in the market this week after consecutive losses in equity markets. Profit taking has also been seen from the previous week’s trading sessions. The EUR appreciated 5.5% against the JPY last week as traders ramped up their aggressive positions in light of reduced risk aversion. However, those gains have largely dissipated as greater risk is once again the topic in financial markets.

Risk aversion may continue to be present in the market, so long as equities continue to slide. The approaching earnings season has traders weary of placing too much of their capital in riskier currencies, such as the EUR. Rightfully so, there is quite a bit of uncertainty out there. One catalyst for the EUR may be a potential bankruptcy of the American car manufacturer, General Motors.

Some economists are predicting a further slide in the EUR. A fundamental analysis shows that the European Central Bank may be running out of options to fight the economic recession in the Euro-Zone economy. An absence of further capabilities by the ECB could set the European economy behind its peers for a sustained recovery.

JPY – Japanese Yen Ends Up as Beneficiary in Foreign Exchange Trading

The Japanese yen rose for another day against its counterparts as the currency has been more sensitive than the Dollar to shifts in investors’ willingness to take on risk. The Japanese currency’s gains are outpacing other currencies during financial turmoil and its losses usually marked when sentiment improves.

As expected, the Bank of Japan’s (BOJ) policy board on Tuesday took additional measures to help the flagging economy, expanding collateral that can be used for loans. In addition to the low interest rate loans it now offers, the bank could also start purchasing corporate bonds and providing loan guarantees, the report said.
The latest measures will put more emphasis on midsize firms, which have fallen outside the scope of the assistance. The BOJ warned, however, that economic conditions will continue to deteriorate. On Friday, Japan is expected to unveil a fresh economic stimulus package, valued at more than 2% of the country’s Gross Domestic Product (GDP).

Crude Oil – Oil Prices Decline Amid Economic Contraction

Crude Oil prices are likely to decline even further, as the world’s top energy forecasters are likely in the coming days to reduce again their projections for world Oil consumption this year. The 3 top forecasters; the International Energy Agency (IEA), the Organization of the Petroleum Exporting Countries and the U.S. Energy Information Administration (EIA) will publish new oil supply and demand estimates between April 10 and 15.

Their forecasts are followed closely by investors in Oil markets, which have seen prices tumble to around $50 per barrel this week from highs of almost $150 in July last year. World Oil demand is falling for the first time in a generation as the deep global downturn closes factories and brings unemployment to the world’s largest economies. Yet, many analysts believe that Crude prices may recover later this year since U.S economic data suggest gasoline demand is rising as pump prices have halved over the last 9 months.

Technical News

EUR/USD

The typical range trading on the 4-hour chart continues. Both the hourly RSI and Slow Stochastic are floating in neutral territory. However, the pair currently sits near the bottom border of the daily chart’s RSI, suggesting an upward correction may be imminent. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.

GBP/USD

Narrow range trading continues as the pair did not make a significant move in either direction, and is currently traded around the 1.4757 level. However, there is a fresh bearish cross forming on the hourly 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.

USD/JPY

The price of this pair appears to be floating in the over-bought territory on the daily chart’s RSI indicating a downward correction may be imminent. The downward direction on the hourly chart’s Momentum oscillator also supports this notion. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

USD/CHF

The bullish trend is loosing its steam and the pair seems to consolidate around the 1.1475 level. The 4 hour chart’s RSI is already floating in an overbought territory suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

The Wild Card – Silver

Silver prices have dropped significantly in the last two weeks and peaked at $12.30 an ounce. However, on the daily chart RSI is floating in an oversold territory suggests that a bullish correction is impending. This might be a great opportunity for forex traders to enter the trend at a very early stage.

Market Analysis provided by Forex Yard.

© 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.

Housing Starts statistics released out of Canada today increased more than expected in March according to a report by the Canada Mortgage and Housing Corporation (CMHC).  Canadian housing starts rose by 13.7 percent in March to an annual rate of 154,700 units. March’s data follows an annual rate of 136,100 units in February and surpassed market forecasts expecting housing starts to fall to an annual rate of 130,000.

Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre commented in the report on the real estate market saying, “Higher multiple starts in Ontario and Quebec were the main contributors to the rise in new construction activity in March,” and that, “While the multiples segment experienced the largest increase, the overall boost in starts was broad based, encompassing the singles segment as well.”

Contributing to the increased housing starts data for March was a 17 percent gain of housing starts in urban areas.  Single housing starts in urban areas rose a modest 1.3 percent while multiple start properties jumped by 28.3 percent for the month. The bulk of the rise in urban starts were seen in Ontario and Quebec with increases of 35 percent and 23.3 percent, respectively.  Declines in urban starts were registered in British Columbia(-17.3%), Atlantic Canada(-7.9%) and Prairies(-7.5%).

Canadian Loonie mixed in currency trading today.

The Canadian loonie dollar has been mixed today in the currency trading markets against most of the major currencies.  The loonie has gained versus the US dollar, Japanese yen and British pound while falling to the euro and New Zealand dollar and trading almost unchanged versus the Australian dollar.

The US dollar has fallen today to trading under 1.2400 loonie per usd today after opening today’s trading at the exchange rate of 1.2420. The USD/CAD pair has declined today to trading at 1.2363 at 4:54pm EST according to currency data from Oanda.

The euro has gained ground against the loonie as the EUR/CAD trades at 1.6412 after opening the day at 1.6393.  The Canadian dollar has gained ground on the Japanese yen as the CAD/JPY has increased from its 80.51 opening to trading at 80.71 later today.

The British pound has fallen today versus the loonie as the GBP/CAD currency pair trades at 1.8191 after opening the day at 1.8250.  The New Zealand dollar has climbed against the loonie as the NZD/CAD trades at 0.7167 from 0.7112 and the Australian dollar trades right around today’s opening exchange rate of 0.8779.

USD/CAD Chart – The US Dollar declining versus the Canadian Dollar today below the 1.2400 level.

By GCI Fx Research

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The euro came off vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3145 level and was capped around the US$ 1.3305 level.  Minutes from the Federal Open Market Committee’s meeting that concluded on 18 March wer released in which the FOMC agreed on “substantial purchases of longer-term assets” and pessimisitcally said “further employment cutbacks” were expected.  Some Fed officials saw inflation “below desirable levels” and Fed staff now see gross domestic product “expanding slowly” in 2010 with GDP growth “flattening out” in H2 2009.  Fed officials said the economy is worse than thet expected and said there is a downside risk to the “already weak” economic outlook including more pressure on U.S. financial institutions.  Data released in the U.S. today saw February wholesale inventories decline more than expected, off 1.5% m/m and 1.7% y/y.  In eurozone news, German February manufacturing orders fell 3.5% m/m and 38.2% y/y.  The European Commission today said it plans to raise the ceiling on its loan facility to non-eurozone countries to €50 billion from the existing €25 billion level.  European Central Bank member Noyer said the French economy will improve at the beginning of 2010.  Also, German factory exports slumped 23.1% y/y.  Euro bids are cited around the US$ 1.3100 figure.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥99.30 level and was capped around the ¥100.85 level.  Data released in Japan overnight saw the February current account surplus decline to 55.6% y/y to ¥1.12 trillion.  These data underscore the tremendous decline in Japan’s foreign trade position over the past several months on account of the yen’s relative strength and the decline in global final private demand.  Other data released today saw March corporate bankruptcy cases up 7.9% y/y.  The Nikkei 225 stock index lost 2.69% to close at ¥8,595.01.  U.S. dollar offers are cited around the ¥104.15 level.  The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥130.95 level and was capped around the ¥133.75 level.  The British pound moved lower vis-à-vis the yen as sterling tested offers around the ¥145.70 level while the Swiss franc moved lower vis-à-vis the yen and tested offers around the ¥86.45 level.  The Chinese yuan appreciated vis-à-vis the U.S. dollar today as the greenback closed at CNY 6.8320 in the over-the-counter market, down from CNY 6.8361.

₤

The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.4635 level and was capped around the $1.4745 level.  Data released in the U.K. today saw the March BRC shop price index climb 2.0% y/y from 1.9% y/y in February.  Also, Nationwide March consumer confidence slid to 41 from 43 in February.  Cable bids are cited around the US$ 1.4515 level.  The euro came off vis-à-vis the British pound as the single currency tested offers around the ₤0.9050 level and was supported around the ₤0.8955 level.

Daily Market Commentary provided by GCI Financial Ltd.

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