Month: April 2009

By John S. Houston

As technical indicators go, the ADX often gets lost in the weeds compared to the more popular MACD, RSI and Stochastics. However, if used properly the ADX can be a big help in trading the Forex profitably. The Average Directional Index was developed by Welles Wilder, a prolific researcher and writer on the financial markets. Investopedia describes the ADX as an indicator that is “used to determine when price is trending strongly”. There are three components to the ADX: the DI+ line tells us when there is a positive, upward trend prevalent in a given market; conversely the DI- line tells us when there is a negative, downward trend. The last component is the ADX line itself which tells us the strength of the trend. I like to make the DI+ green and the DI- red…since on my charts green bars show upward moves and red bars show downward moves.

The ADX is used like this: when the green (DI+) line crosses above the red (DI-) line, then a positive, upward trend is gaining dominance in the market and you can expect prices to rise. When red crosses above green, just the opposite happens, a negative/downward trend is coming into play. Now, if the ADX line is rising as well, that tells you the strength of that move is increasing. If the ADX registers a reading of 20 or below, we say there is no trend in place. A reading between 20 and 25 suggests a weak trend. When the ADX is above 25 a strong trend -up or down- is present. Remember, the ADX doesn’t tell which way the market is moving, only the strength of the trend. Look to see whether the green or red line is on top to get the direction. That’s it in a nutshell. There are other considerations such as which time frame is best to use…which currency works best with this, what are the optimal settings, what are the best times to trade…and more. Do you need to keep your eye on the chart all day? There are good answers to all this which I will address in subsequent articles.

About the Author

John Houston has been trading the Forex for over five years. He’s studied under some of the best brains in the business focusing on Elliott Wave, fundamental and technical indicators and various trading systems. John has used several Expert Advisors and is proficient with MT4. He is in the course of developing an ebook on using the ADX to trade the Forex profitably. Watch his blog for updates.

By Frank Kollar

Fibonacci ratios and Elliott Waves help us look ahead and be prepared for what the financial markets will do over the coming weeks and months.

What are Fibonacci Ratios?

Leonardo Fibonacci was a 13th century accountant who worked for the royal families of Italy. In 1242 he published a paper entitled “liber abaci.” The basis of the work came from a two-year study of the pyramids at Gizeh.

Fibonacci found that the dimensions of the pyramid were almost exactly the same as the golden mean or (.618).

Fibonacci is most famous for his Fibonacci Summation Series which enabled the Old World in the 13th century to switch from Arabic numbering (XXIV=24), to the arithmetic numbering (24), that we use today. For his work in mathematics, Fibonacci was awarded the equivalent of today’s Nobel Prize.

Fibonacci Summation Series

The Fibonacci Summation Series takes 0 and adds 1. Succeeding numbers in the series adds the previous two numbers and thus we have 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89 to infinity. At the eighth series, by dividing 55 by 89, you have the golden mean: .618. If you divide 89 by 55 you have 1.618.

Do you see the pattern? 1+1=2, 1+2=3, 2+3=5, 3+5=8, 5+8=13…..

These ratios, and several others derived from them, appear in nature everywhere, and in the financial markets they often indicate levels at which strong resistance and support will be found. They are easily seen in nature (seashell spirals, flower petals, structure of tree branches, etc.), art, geometry, architecture and music.

Why are they important to the financial markets? Because the markets tend to reverse right at levels that coincide with the Fibonacci ratios. Whether you see this as cosmic or coincidence makes little difference. It happens and tens of thousands of traders make decisions based on Fibonacci ratios, thus amplifying the results.

For example, if the Nasdaq rallies 100 points and then corrects, it will often correct 61.8%. Right at, or close to the 61.8% retracement (you have heard us use this term many, many times) the Nasdaq is likely to reverse and start advancing again. Of course it is not this simple. Fibonacci support and resistance levels can fail. There are other Fibonacci levels which may turn the markets (78.6%, 127.2%, 161.8%, etc.). But the fact that it does happen is what is called a trader’s “edge.”

A trader has an edge when he knows the probabilities of a particular action are greater than normal. Trading strategies are built around this information, or multiple similar probabilities.

Elliot Wave Patterns

Elliot Wave Patterns, in short, are usually a three or five wave series of advances, or declines, that define a trend. They are the result of crowd psychology, and thus are usually more reliable when found in broader based indices, such as the S&P 500 Index, Nasdaq Composite Index, etc.

Typically, if the S&P 500 Index moves higher in a 5 wave pattern, and then falls below the top of wave 3, it signals the start of a retracement that normally consists of 3 waves.

In a bear market it works the other way. A five wave pattern defining a declining trend, which is then reversed by a 3 wave rally, which eventually reverses and another five wave pattern begins to the downside.

Finding a wave pattern that completes at a strong Fibonacci support or resistance level can be a very reliable indicator of a change in trend.

By having an Elliott Wave pattern complete right “at” a Fibonacci support or resistance level, you in essence have increased the probabilities of being correct.

Trading Patterns

Because the markets often move in 5 wave and 3 wave patterns, and the turning points that create these patterns are often at Fibonacci support and resistance levels (61.8, 161.8, etc), you can expect that eventually, a way would be found to use them to forecast the future direction of the financial markets.

There are several trading patterns used by advanced traders, including day traders, which take advantage of the combined strength of Elliott Waves and Fibonacci retracements.

These patterns commonly repeat in stock and index charts and traders who use them are called “pattern traders.”

Although pattern recognition is a potent tool in trading, we suggest that no one try using them without thorough training in pattern trading. There is more to it than just knowing the patterns, including risk management and money management, without which the patterns are more likely to cause headaches than profits.

An excellent book on such patterns is, “Profitable Patterns for Stock Trading” by Larry Pesavento. Larry is an authority on trading patterns, and I studied with him at his home in Arizona some years ago.

How We Use Them

At FibTimer, we use Elliott Wave Theory and Fibonacci support and resistance levels to map out where we think the financial markets are headed.

Recognizing that these tools are NOT always right, we use them to prepare for what is to come, but not for actual trading decisions. It is always good to have a feel for what the markets will do so that we are ready emotionally for the trading decisions ahead.

Although both Fibonacci support and resistance levels and Elliott Wave theory are good tools, they fail too many times to be used for market timing. Many would disagree with this statement, but our research shows that over the years they will give accurate forecasts only about 50% of the time.

They are great when looking at previous chart data, but because there are so many variables, they are not as accurate looking forward. Good… Useful… But not good enough for us.

All trading signals at FibTimer are generated by non-emotional and non-discretionary trend indicators. Our trend indicators catch “every” trend and when a trend fails, they quickly tell us to reverse so any losses are very small. Much better for “profitable” market timing as our market timing trade history pages show.

There is no way to separate emotions from market analysis. If a strategy offers variables that need to be interpreted, emotions will sway those interpretations. It is human nature and cannot be avoided.

This is why FibTimer follows non-discretionary trend following indicators… so that emotions cannot sway any buy or sell decision.

About the Author

editor:  www.fibtimer.com

By Fast Brokers

The EUR/USD is flying, bolting through all three of our downtrend lines after bouncing off our previous 1.2987 support.  Investors came in defense of 1.30 with serious volume.  The currency pair is presently testing April 24 highs and it appears to have more room to run should today’s data from the U.S. come in positively.  The EUR/USD’s considerable strength is rooted in better than expected earnings from Spain’s Santander, the EU’s largest bank.  Since we are in a financial crisis, positive earnings from banks can be a real driving force.  However, all bets are off until the currency pair can plow through April 24 highs towards April 13 highs.

The sustainability of the EUR/USD’s momentum will rely upon today’s Prelim GDP number from the U.S.  Therefore, keep an eye on the S&P futures since the two investment vehicles are positively correlated.  If the S&P can break out of April highs, we expect the EUR/USD to follow suit.  On the other hand, if the GDP data disappoints, we could see the EUR/USD buckle into its downtrend.

Altogether, the fact that the EUR/USD has rallied from 1.30 is a very positive sign for the uptrend.  April 28 lows were comfortably above April 21 lows, and the EUR/USD has popped through our 3rd tier downtrend line.  Therefore, the ingredients are on the table for a sustainable rally.

Fundamentally, we find resistances of 1.3261, 1.3329, 1.3389, 1.3420, and 1.3470.  To the downside, we see supports of 1.3236, 1.3208, 1.3170, 1.3127, and 1.3089.  The 1.30 area serves as a psychological cushion with 1.35 acting as a psychological barrier.  The EUR/USD is currently exchanging at 1.3268.

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 Cable is climbing as investors find an appetite for risk ahead of America’s Prelim GDP number.  A better than expected Prelim GDP would likely send the major Dollar pairs higher since it would give support to the argument that the global economy is stabilizing.  Yesterday’s better than expected CBI Realized Sales data gives the Cable some added strength ahead of America’s GDP release.  With Britain’s Nationwide Home Price Index coming tomorrow, the Cable should have some real directional ammo to play off of.  A global sign of economic healing could add fire to the uptrend’s belly with the Cable creeping towards April highs.  On the other hand, if the U.S. Prelim GDP number disappoints, we wouldn’t be surprised to witness a fire sale.

April highs and the highly psychological 1.50 level serve as the key obstacles towards a noteworthy uptrend in the Cable.  Meanwhile, the GBP/USD still needs to fight through our 2nd tier downtrend line and 3rd tier uptrend line.  The Cable has certainly built up a nice base since 4/20, which should act as solid near-term protection to the downside.

Fundamentally, we find resistances of 1.4773, 1.4826, 1.4870, 1.4905, and 1.4951.  To the downside, we see supports of 1.4730, 1.4667, 1.4626, 1.45667, and 1.4532.  1.45 serves as a psychological cushion with 1.50 acting as a key psychological barrier. The GBP/USD is currently exchanging at 1.4742.

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 at a standstill after yesterday’s banking holiday.  The volume in the currency pair has been subdued as investors await the Prelim GDP data from the U.S. today, followed by Japan’s Prelim Industrial Production number in the evening PST.  The USD/JPY is sitting at a key juncture, the inflection point of our 1st tier downtrend and 2nd tier uptrend lines.  Therefore, we expect the USD/JPY to awaken with all of the incoming news.

Japan’s economy continues to struggle with an overall appreciated Yen squeezing the nation’s export industry.  Therefore, investors have been reluctant to appreciate the USD/JPY considerably even during flights to safety.  Both the Japanese and American economies remain mired in the economic crisis with long interest rate swaps close to nil.  Hence, we continue to see the behavior of the USD/JPY reflect comparative economic performance.

The USD/JPY is still trading at dangerous levels and could be very close to giving way to its powerful downtrend.  If this should happen, we could see a retest of March lows with the currency pair headed towards our 1st tier uptrend line.  On the other hand, if economic data from Japan and the U.S. manages to outperform, the currency pair may choose to hop back above its 2nd tier uptrend line in a sign of stability.

Fundamentally, we maintain our resistances of 97.11, 97.98, 98.56, 99.20, and 99.79.  To the downside, we hold our supports of 96.33, 95.55, 95.04, 94.48, and 93.57.  The 100 level serves as a key psychological barrier with 95 acting as a psychological cushion.  The USD/JPY is currently exchanging at 96.78.

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 Brad Stafford

We’re often asked at MarketClub just how to play short-term pops. Regardless if you are look at stocks, futures, or the forex market, it’s always the same… MarketClub Alerts.

With these Alerts you are getting a warning of a major move. It’s not that you are reacting to fundamentals, it’s just that when the technicals align, you are the first to know.

You see, no matter what happens, what methods you use, or what markets you trade, the following is always true: If you’re the first to know, you’re the first to profit!

This applies to our trading strategy, MarketClub Alerts, and the steps we need to take to capture profits and stay on the winning side of those short-term moves.

Please enjoy the video, as always its with our compliments.

See the Video Here.

Brad Stafford
Director of Marketing
MarketClub

Source: ForexYard

Investors are looking to U.S. GDP data and the Federal Reserve to be released on Wednesday for further signs of recovery in the world’s biggest economy. The Federal Reserve ends its 2 day meeting on Wednesday and while rates are already near zero, analysts will be looking for any extension of quantitative easing and for any comments supporting a theory of green shoots of recovery appearing in the U.S economy. The Fed is due to issue a statement around 1815 GMT.

Economic News

USD – USD Consolidating towards Heavy Volatility

After Monday’s sharp gains against the EUR, the U.S. Dollar experienced a steady depreciation against the 16-nation currency throughout Tuesday, declining back towards 1.3200 after seeing a weekly low of 1.2966. The USD also saw depreciation against almost all currency pairs, except the JPY.

Interesting to take note of is a few general trends in pairs, such as the GBP/USD and USD/CHF, which seem to be trading in a tightening range, indicating that there is an anxious anticipation for tomorrow’s interest rate decision from the US Federal Reserve Board. With a decision on the US Federal Funds Rate expected tomorrow at 18:15 GMT, traders may witness some sharp volatility in these pairs directly after the announcement. With the exceedingly positive figure seen in the CB Consumer Confidence report yesterday, mixed with some other general indicators which also point up, is there a possibility that the Fed would consider increasing interest rates?

Today will indeed be an interesting day to keep tabs on the movement of the greenback. Considering the Advanced GDP report is due, along with Crude Oil Inventories, which has had a moderate impact lately, the USD is due for heavy volatility. Traders will definitely need to program reminders into their schedule telling them to login to their platforms today and capture some of the sharp movements that many are expecting.

EUR – EUR and GBP Riding Favorable Winds

So much positive economic data has been emerging in recent weeks that risk appetite seems to have made a moderate recovery. As a result, the EUR has posted steady gains over the past 24 hours. Building back up towards 1.3200 against the USD and 1.2700 against the JPY, the 16-nation currency appears to be on the receiving end of portfolio diversification and Euro-Zone confidence.

With a number of indicators showing a drastic increase in consumer confidence throughout the Euro-Zone’s largest economies, it comes as no surprise that the EUR is trending upwards against all of its currency rivals. However, as there appears to be hardly any news coming from Europe today, the EUR may be put on the back-burner as the US economy leads the pack in economic indicators. The U.S. Federal Funds Rate decision will be released tomorrow and no doubt will be one of the primary driving forces in today’s market.

While news regarding the EUR may be light this week, the British Pound will not go unnoticed. Much of the European news being released this week may show that the British economy is on track for recovery. It seems about time as Britain appeared to be one of the worst hit economies in this recent recession. If Britain is indeed recovering, the rest of Europe shouldn’t be much further off. Watching the indicators emanating from the UK may help traders gauge the direction of the prevailing winds over Europe. So far, European trends appear to be pointing up.

JPY – JPY Set Back from Increased Risk Appetite

As world tourism faces a further set-back due to the outbreak of swine flu in 7 countries, the value of the JPY as a safe-haven from economic risks appears to have continued to drop. The rise in risk appetite, and a continuation of the negative outlook in Japan, has pushed the JPY lower against most of its currency rivals, save the USD. Dropping towards the 127.00 level against the EUR and the 141.00 level versus the Pound, the JPY appears like it may level off in the near future.

With a decision from a number of Pacific countries arriving this week on interest rates, traders have the potential to see a level of volatility in the JPY and NZD which is typically uncommon. Traders should look to the Reserve Bank of New Zealand (RBNZ) today, as it is set to announce a decision on its national interest rate. Most expectations are for a 50 basis point rate-cut. The Bank of Japan (BoJ) is also set to announce its latest monetary policy regarding interest rates on Thursday, although this decision will not likely carry much volatility as Japan has held its rates steady for some time now.

Crude Oil – Crude Oil Declines on Demand Concerns

Crude Oil prices fell for a second straight day on concerns that the outbreak of swine flu would delay an economic recovery and further dampen energy demand. Fears of pandemics have slowed the global economy in the past and officials with the World Health Organization, while raising alert levels yesterday, and warned against overreacting. The fear is that the outbreak could discourage people from traveling, lead to closed factories and further hurt the economy and oil consumption.

Oil prices rose sharply last month from $40 to above $54 taking their cue from a rally in equity markets. But a new sign of a prolonged recession which has crushed energy demand around the world is again pushing prices lower below the psychological price level of $50.

Technical News

EUR/USD

The pair is continuing to provide mixed results, and is now trading around the 1.3190 level. The daily chart demonstrates a flat line ever since yesterday. The4 hour chart’s Slow Stochastic is showing no crosses, which indicate that the bullish trend may continue. Going long appears to be preferable today

GBP/USD

The typical range trading on the daily chart continues. Both the hourly RSI and Slow Stochastic are floating in neutral territory. However, the hourly chart’s RSI is already floating in the oversold territory. It appears that the possible next move might be a bullish one. In that case traders are advised to swing in after the breach.

USD/JPY

The 4 hour chart shows the pair does not have a distinct direction, since the chart appears to be quite horizontal. However, the beginning of a bearish move can be detected on the hourly chart, and the Slow Stochastic shows that the bearish momentum still has more room. Going short with tight stops appears to be preferable

USD/CHF

The typical range trading on the daily chart continues. Both the Daily RSI and the Slow Stochastic are floating in neutral territory. As well on the hourly charts the indicators are providing mixed signals with now specific direction. Good strategy might be to wait for a clearer sign before entering the market on this pair.

The Wild Card – Gold

There is still a bearish configuration on the daily chart, indicating that the momentum is still down. However, hourly chart’s Slow Stochastic is about to enter an oversold territory, indicating that there might be a minor bullish correction before a broader bearish move resumes. forex traders can maximize profits by selling on highs and taking advantage of a general bearish trend.

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.

By CountingPips.com

The Swiss franc has reached its highest exchange rate against the euro today since March 12th when the Swiss National Bank (SNB) intervened in the forex market for the first time in 15 years. Can we expect the SNB to jump in again anytime soon?

On March 12th, the SNB reduced its interest rate to a new record low at 0.25 percent and announced that the bank will be intervening in the forex market “to prevent any further appreciation of the Swiss franc against the euro.” The euro (EUR/CHF) skyrocketed versus the franc that day from approximately the 1.4800 exchange level to just above the 1.5300 level(see chart).

The SNB has resorted to currency intervention in order to fight the risk of deflation in Switzerland and because most conventional monetary policy tools like interest rate reductions have been exhausted.

On April 17th, SNB President Jean-Pierre Roth reiterated the bank’s policy to sell Swiss francs in the forex market and stated the bank was going to continue intervention if needed, saying, “In view of the risk of deflation, decisive action was called for, and we will continue to pursue this strategy for as long as the risk remains.”

Today, the euro has fallen versus the franc to its lowest exchange rate post-intervention at approximately 1.5023. Since the SNB seems strongly committed on keeping the franc weak, we can probably expect some intervention sooner or later but at what level?  The big 1.5000 francs per euro level looms closely and may be a worthwhile guess but could it be closer to the March 12th opening level around 1.4800?

We can only wait and see….

U.S. home prices continued to decline in February but did not register a new record fall for the first time in 16 months according to the Standard & Poors/Case-Shiller index released today.  The Standard & Poor’s/Case-Shiller Home Price Index measures sale prices of existing single-family homes nationally and tracks 10-city and 20-city composite home price measurements.

The February home prices report showed that the 20-city composite index fell an annual 18.6 percent while the 10-city composite index declined by 18.8 percent when compared to last year. The home price declines just beat market forecasts and were barely above January’s record annual declines. January’s home prices registered a 19.4 percent fall in the 10-city index and a 19.0 percent drop in the 20-city index.

The areas hardest hit in February were Phoenix, Las Vegas and San Francisco with annual declines of 35.2 percent, 31.7 percent and 31.0 percent, respectively. On an annual basis, none of the 20 metropolitan areas measured showed house price increases with Dallas and Denver being the areas with the lowest declines at 4.5 percent and 5.7 percent, respectively. On a monthly basis, Cleveland registered the largest house price decline with a fall of 5.0 percent while Dallas registered the smallest decline for the month with a dip of 0.3 percent.

David M. Blitzer, Chairman of the Index Committee at S & P, commented in the report saying, “All 20 metro areas recorded a monthly decline in February, but 16 of the 20 metro areas saw an improvement in their monthly returns compared to January. Nine of the 20 metro areas showed improvement in their annual returns compared to their returns in January. Furthermore, this is the first month since October 2007 where the 10- and 20-City Composites did not post a record annual decline.”

U.S. Consumer Confidence gains in April.

U.S. Consumer Confidence rose to its highest point since November according to the Conference Board Consumer Confidence Index released today. The consumer index, representing responses from 5,000 U.S. households, showed that consumer confidence increased to a 39.2 score this month following a revised 26.9 score in March. The 12.3 point increase easily surpassed market forecasts that were expecting consumer confidence to edge up by 3 points to a 29.9 score for the month and the April score marked the highest level since the 44.7 score produced in November.

The other two parts of the survey also saw increases in April.  The present situation section of the index increased to 23.7 from 21.9 in February while the expectations index jumped from 30.2 in March to 49.5 this month.

Lynn Franco, the Director of The Conference Board Consumer Research Center commented in the report on the increased readings, “Consumer Confidence rose in April to its highest reading in 2009, driven primarily by a significant improvement in the short-term outlook. The Present Situation Index posted a moderate gain, a sign that conditions have not deteriorated further, and may even moderately improve, in the second quarter. The sharp increase in the Expectations Index suggests that consumers believe the economy is nearing a bottom, however, this Index still remains well below levels associated with strong economic growth.”

Forex – U.S. dollar mostly lower in Forex Trading today.

The U.S. dollar has been under pressure in forex trading today against the major currencies.  The dollar has declined versus the euro, Australian dollar, New Zealand dollar and Swiss franc while showing a slight gain versus the Japanese yen and the Canadian dollar. At time of writing the dollar was virtually unchanged against the British pound sterling.

The euro has advanced versus the USD as the EUR/USD trades at 1.3121 in the afternoon of the US trading session at 1:56pm EST after opening the day at 1.3023 according to currency data from Oanda.

The dollar has edged up against the Japanese yen today as the USD/JPY has increased from its 96.32 opening to trading at 96.51.

The dollar has also gained slightly against the Canadian dollar after opening at 1.2188 earlier today to trading at 1.2207 later. Meanwhile, the USD has also declined against the Swiss franc as the USD/CHF has gone from 1.1562 to trading at 1.1448.

The Australian dollar has rebounded after a fall yesterday versus the USD as the AUD/USD trades at 0.7065 after opening today at 0.7047 while the New Zealand dollar has also increased versus the USD as the NZD/USD trades at 0.5586 after opening the day’s trading at 0.5568.

USD/CHF Chart – The US Dollar falling sharply today versus the Swiss Franc in Forex Trading after increasing from the beginning of the week.

By GCI Fx Research

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The euro depreciated marginally vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.2965 level and was capped around the US$ 1.3040 level.  The common currency moved higher early in the North American session as traders continue to evaluate the growing global swine flu crisis.  Dealers are also paying very close attention to the U.S. financial sector following a Wall Street Journal story the U.S. government will ask Citigroup and Bank of America to raise billions more in capital after the results of the banks’ stress tests are released next Monday.  Most of the nineteen largest banks in the U.S. are said to be well-capitalized but there will definitely be cases where the government strongly encourages the banks to raise additional capital and this expectation could hang heavily over the market for the next several days.  The World Health Organization lifted its level of influenza pandemic alert to “phase four” from “phase three,” evidencing an increasing likelihood the risk of a pandemic has increased.  Data released in the U.S. today saw the February S&P Case-Shiller home price index off 18.6% while Redbook retail sales were up +1.6% m/m in the first three weeks of April. Other data to be released today include April consumer confidence and the April Richmond Fed manufacturing index.  In eurozone news, traders are speculating Germany’s consumer price index may have increased in April after data from four of the country’s regions showed higher price pressures.  Also, French consumer confidence ticked up in April.  Euro bids are cited around the US$ 1.2765 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥95.60 level and was capped around the ¥96.75 level.  Data released in Japan overnight saw March overall retail sales off 3.9% y/y, the seventh consecutive month of declines.  Despite ongoing poor economic data, the yen continues to power higher on account of a worsening of the global swine flu contagion, an economic and health risk that risks becoming a global pandemic.  The Nikkei 225 stock index lost 2.67% to close at ¥8,493.77.  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 ¥124.35 level and was capped around the ¥126.05 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥139.00 figure while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥82.65 level.  The Chinese yuan appreciated vis-à-vis the U.S. dollar today as the greenback closed at CNY 6.8270 in the over-the-counter market, down from CNY 6.8275.

₤

The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.4685 level and was supported around the $1.4515 level.  Data released in the U.K. saw the April CBI distributive trades survey improve markedly to +3 in April from -44 in March, a fifteen-month high.  The U.K. Treasury reported there is a low risk of deflation in the U.K.  Cable bids are cited around the US$ 1.4350 level.  The euro came off vis-à-vis the British pound as the single currency tested bids around the ₤0.8970 level and was supported around the ₤0.8880 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.