Month: April 2009

By Fast Brokers

The Cable is returning some of yesterday’s gains after deflecting off the inflection point of our 1st tier downtrend and 2nd tier uptrend lines.  Today’s weakness comes in reaction to a weaker than expected number from the CBI regarding its expectation for industrial orders.  Investors didn’t like too much of what the CBI’s chancellor had to say yesterday concerning Britain’s new budget and the health of the nation’s economy.  Though the GBP/USD managed to fight back above the psychological 1.45 level, the downtrend is still playing a lead role in today’s action.  On an encouraging now, the Cable did find comfort in our 1st tier uptrend line, meaning we could witness some consolidation as the currency pair waits for the inflection point of our 1st tier uptrend and downtrend lines before making a more concrete directional decision.  If the Cable manages to climb above our 2nd tier uptrend line, we could witness large near-term gains.  On the contrary, should the currency pair retrace beneath our 1st tier uptrend lines, the downtrend could pick up speed.  As with the EUR/USD, the Cable’s performance ultimately relies upon U.S. equities and results from the highly-anticipated stress tests coming May 4th.  As we anticipate consolidation around 1.30 in the EUR/USD, we wouldn’t be surprised to see the same around 1.45 for the GBP/USD.  Fundamentally, we find resistances of 1.4579, 1.4612, 1.4677, 1.4730, and 1.4773.  To the downside, we see supports of 1.4532, 1.4480, 1.4438, 1.4391, and 1.4362.   The GBP/USD is currently exchanging at 1.4544.

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 EUR/USD is rallying slightly, awakening from its consolidative slumber earlier in the week.  The currency pair hopped above our 2nd tier downtrend line, but is having difficulties with our 3rd tier uptrend line.  Therefore, we’re cautiously optimistic.  However, the EUR/USD has climbed over the highly psychological 1.30 level.  The relative strength in the Euro comes after all of the manufacturing and services PMI data beat estimates. Though the number all indicate contraction, at least an upward swing in momentum is forming.  If the currency pair can sustain gains from present levels, then it may have something worthwhile to build from.  The EUR/USD will ultimately follow U.S. equities due to their tight economic interconnectivity.  As a result, any positive developments in the EUR/USD could be squashed if U.S. equities tumble.  On the other hand, the Euro should keep some relative strength due to the performance of recent economic data unless tomorrow’s business climate release comes in below analyst expectations.  If the EUR/USD can close above our 3rd tier uptrend line on the 4-hour we could see a nice pop towards 4/10 lows.  On the flipside, any decline could be deflected by our 2nd tier downtrend line.  However, we wouldn’t be surprised to see the EUR/USD consolidate around 1.30 should U.S. equities move lower today.  Fundamentally, we find supports of 1.3017, 1.2982, 1.2953, 1.2919, and 1.2833.  To the topside, we see resistances of 1.3050, 1.3091, 1.3126, 1.3167, and 1.3211.  The EUR/USD is currently exchanging at 1.3017.

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 experiencing some solid support as bulls put up a fight around our 97.59 level.  Economic recovery hopefuls aren’t so eager to give up on their vision, and are doing what they can to prevent a retraction below our key 1st tier downtrend line.  Therefore, even though the USD/JPY is trading below our 1st tier uptrend line, the possibility of the currency pair continuing its battle with 100 isn’t lost.  That being said, despite the strong defense by the bulls, the USD/JPY should ultimately follow its positive correlation with U.S. equities like the rest of the major dollar pairs.  Hence, should the S&P futures collapse, the USD/JPY may be inclined to follow suit, and vice versa.  However, the Japanese economy is faring worse than America’s right now, meaning any movements to the downside could be limited compared to those logged in U.S. equities.  On the flip side, were the S&P futures to break out above 900 we could see investors making a larger commitment to risk-taking and consequently a 100-plus reality in the USD/JPY.  Investors will be keeping a close eye on earnings and forecasts coming from the major Japanese automakers over the next couple weeks.  Weaker than expected performances from the automakers could help strengthen the USD/JPY.  Meanwhile, our 1st tier downtrend line still serves as a key cushion to the downside.  Losses could accelerate should the currency pair dip beneath our 1st tier.  Fundamentally, we hold our resistances of 98.56, 99.20, 99.79, 100.28, and 100.71.  To the downside, we maintain our supports of 97.59, 97.11, 96.33, and 95.55 with fresh bottom-end of 95.04.  The 100 level serves as a key psychological barrier with 95 acting as a psychological cushion.  The USD/JPY is currently exchanging at 98.12.

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.

Source: ForexYard

With an abnormal number of news events coming from Britain, the Euro-Zone and the United States today, forex traders have been in a frenzy to place their bets before the trading day gets underway. Trading during these news events, which typically carry a lot of market volatility, is a fast way to double your forex trading balance; the wise trader knows this. Special attention should be paid to the slew of manufacturing data coming from France and Germany between 7:00 and 9:00 GMT, as well as the U.S. Unemployment Claims report at 14:00 GMT. Will you take advantage of the impending volatility, or sit on the sidelines and miss out?

Economic News

USD – Dollar Goes Volatile on U.S. Banking Worries

The Dollar experienced a very volatile day of trading on Wednesday as a number of different factors helped determine the closing rate of the Dollar versus its main currency crosses. The main factor that helped determine the greenback’s strength in yesterday’s trading was the banking worries led by Morgan Stanley and Wells Fargo. This came about despite the Dow Jones rallying earlier in the day. This came to people’s dismay as Morgan Stanley produced positive figures in the previous quarter and the U.S. housing market posted some impressive figures on Wednesday.

The Dollar rose by a massive 160 points versus the British Pound, as investors dropped the GBP and put their money into equities rather than gamble on the Pound Sterling. The pair ended down at the 144.60 level. Against the JPY the USD slid by 50 points to 97.62, as traders responded positively to the recommendation by major banks of the positive Japanese financial sector, and that the worst of the economic decline in Japan may be over. The Dollar fell by 40 points to 1.2992 versus the EUR, as Europe’s financial sector edged higher yesterday. This marks an end to the EUR’s losing streak against the USD.

Looking ahead to today, we may see a strong Dollar as Britain and Europe react negatively to the late negative financial news that came out of the U.S. yesterday, as toxic debt and banking liabilities from the banking sector reach the forefront again. Britain and the Euro-Zone have been very susceptible to negative financial news coming out of the U.S. since the start of the financial crisis. There are a number of economic data releases that may help determine the Dollar’s value later today. The 2 most important of these are U.S. Unemployment Claims at 12:30 GMT and Existing Home Sales at 14:00 GMT. If the economy continues showing bearish figures, the USD may respond in kind.

EUR – Pound Slumps as Financials Climb

The Pound dropped as Britain and European Banks climbed in yesterday’s trading session. The FTSE, DAX and CAC 40’s gains were led by the top financial institutions. The most notable increases were held by the major British and European banks, including HSBC, Barclays, Lloyds, and Deutsche Bank. This was partially owed to helpful words from U.S. Treasury Secretary Timothy Geithner. However, on the negative side for the Pound was the gloomy budget released by Britain’s Chancellor of the Exchequer Alistair Darling. This comes about as he revealed that income taxes will increase, government spending will swell, and Britain’s debt will climb.

As a result of the slump in the British economy, and traders opting to drop the Pound for the equities market, the Pound made terrible losses in Wednesday’s trading. The British currency fell by a massive 230 points versus the Japanese currency to close at 141.26. Against the EUR, the Pound plummeted by 150 points as the EUR/GBP started to move higher again resulting from the Euro-Zone economy showing some positive economic advances. The GBP/USD pair finished lower by over 230 points at 141.21, as traders fear the mounting debt of the British economy and prefer the safe-haven U.S. Dollar.

Today, the Pound is likely to continue to deteriorate as Britain reacts to the banking worries from the U.S. The most significant data release from Britain later today will be the CBI Industrial Order Expectations at 10:00 GMT. The British currency is also likely to react to the other spattering of news events coming out of the Euro-Zone and the U.S. These include various manufacturing data from France and Germany, and U.S. Existing Home Sales later in the afternoon. The Pound’s currency crosses are also likely to be determined by unexpected speeches by U.S. Treasury Secretary Timothy Geithner and British Prime Minister Gordon Brown later today.

JPY – Yen Climbs against Majors

The Yen rose against most of its major currency pairs in yesterday’s trading, as the JPY’s safe-haven status returns to the forefront. The Yen’s gain against the Dollar in late trading is largely owed to fears that the stress tests for U.S. banks from the Obama administration are likely to reveal great losses in the U.S. banking sector. The USD/JPY currency pair finished lower by 50 points at 97.62. The JPY also made some impressive gains against the Pound to close up by over 230 points at 141.21. This comes about before a report showing that the British economy shrank for the 3rd successive quarter. However, the Yen fell by 10 points against the EUR to close at 126.91.

The Yen seems to be trading on unsteady ground as uncertainty in the financial world reappears on center stage. Just as things seemed to be improving, the Obama administration has set new hurdles for U.S. banks, which is likely to reveal further losses. However, this is likely to show pessimism in the second largest economy. When it comes to the forex market, however, the Yen is likely to benefit from its safe-haven status. This will in-turn go against the Japanese government and Bank of Japan (BoJ) as they desire a weak Yen in order to increase exports and recover from the current financial crisis relatively faster.

Crude Oil – Crude Oil Prices Stable near $48.50

The price of Crude Oil slipped slightly as U.S. Crude Oil Inventories rose higher than expected. The price of the black gold slid by 30 points to $48.43 a barrel. Crude Oil didn’t slide as much as people thought it would following the release of this important data, as stock markets across the globe made some gains, thus spurring equities and commodities upwards. Crude Oil seems to have reached its equilibrium as prices have not slipped below the $48 mark in more than 3 weeks.

In order to see a vast improvement in Crude prices in the coming weeks, we will need to see a string of positive economic data releases from the world’s leading economies. Truth be said though, a full-fledged global economic recovery is unlikely to occur before the middle of 2010. However, in the short-medium there is some leeway for the price of oil to hit $60 a barrel, provided demand can support this price.

Technical News

EUR/USD

After breaking out of its latest range-trading pattern, this pair may now be on track to discovering a new range. After yesterday’s volatile upward movement, the pair has now leveled off and all oscillators are indicating neutrality. However, there does appear to be a recent bullish cross on the daily chart, signaling further upward mobility. Going long with tight stops might be a wise choice today.

GBP/USD

There appears to be a bearish cross forming on the Slow Stochastic on the hourly chart, signaling an impending downward movement. However, the daily chart’s Slow Stochastic shows a recent bullish cross, indicating that the longer-term trend may be bullish. Waiting for the downward correction to finish and then going long might be a wise strategy today.

USD/JPY

This pair appears to be range-trading with no clear indication of direction. The RSI on the daily chart shows that this pair was recently over-sold, signaling that there may be more of an upward correction later in the day. Trading within the range may be a wise choice today; buying on lows, selling on highs.

USD/CHF

The Bollinger Bands on the hourly chart appear to be tightening, signaling that a volatile movement may be imminent. However, all oscillators show the price floating in neutral territory, and the daily chart indicates a clear range-trading pattern in a bullish channel. Buying on lows and selling on highs within this channel might be a wise choice today.

The Wild Card – USD/SEK

The price of this pair appears to be floating in the over-sold territory on the RSI of the 4-hour chart, signaling upward pressure. The recent bullish cross on the 4-hour chart’s Slow Stochastic supports this notion. Forex traders can take advantage of the impending upward movement by placing early long positions and riding out the wave.

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.

A report from Statistics Canada today showed that the Leading Indicators index declined for the seventh straight month in March. The Leading Indicator Index, which measures future economic activity, fell by 1.3 percent in March following a revised decline of 1.4 percent in February. The March decline was more than expected as market forecasts were calling for a 0.8 percent decline.

Nine out of the ten measured sectors that make up the leading indicator index showed declines with the money supply indicator showing the only increase with a 0.9 percent gain.

Contributing heavily to the overall index decline was a record decrease in durable goods which fell by 10.3 percent. The stock market index fell by 2.3 percent, the housing index declined by 4.3 percent and furniture & appliance sales decreased by 0.9 percent for the month. Smaller declines were seen in the indexes for the US Conference Board, other durable goods, shipments, average workweek and business & personal services employment.

Canadian dollar mixed in currency trading.

The Canadian dollar has been mixed today in the currency markets against the major currencies.  The U.S. dollar has advanced slightly against the Canadian loonie as the USD/CAD has gained from its 1.2389 opening at 00:00GMT to trading at 1.2399 at 4:04pm EST in the US session according to currency data from Oanda. The USD/CAD reached an intraday high of 1.476 before retreating lower.

The euro has also gained against the loonie as the EUR/CAD trades at the 1.6116 level after opening the day at 1.6017 and reached an intraday high of 1.6148.  The loonie has fallen versus the Japanese yen today as the CAD/JPY has edged down to the 78.89 yen per loonie level after opening at 79.20.

The British pound has fallen sharply versus the loonie today as the GBP/CAD has dropped to the 1.7957 level after opening the day at 1.8124.

The Australian dollar is higher against the loonie as the AUD/CAD pair trades at 0.8741 from today’s opening rate of 0.8730 while the New Zealand dollar has declined against the CAD as the NZD/CAD trades at 0.6880 from 0.6889 earlier today.

USD/CAD Chart – The USD/CAD advancing higher this week in currency trading after falling for the previous three weeks in a row and five out of the last six weeks(4H Chart).

By Fast Brokers

The EUR/USD continues its consolidation between our 2nd tier uptrend and downtrend lines, a sign that we could see a little near-term pop as investors bite on what may be oversold conditions. The EUR/USD is experiencing stability due to a better than expected Claimant Count Change number in Britain.  However, any near-term gains could be mitigated due to the highly psychological 1.30 lying just above present levels.  Hence, the EUR/USD should experience more relative consolidation over the next 24 hours as investors await the flood of manufacturing and services data tomorrow.  Analysts are expecting the data points to improve slightly from last month’s release.  If the numbers come in better anticipated, we could see a nice rally in the EUR/USD, and if the numbers disappoint vice/versa.  Therefore, Euro investors should enjoy the calm of today as no news is good news.  However, the fact the EUR/USD hasn’t been able to rally back past this area is a sign that the downtrend has its grip around the currency pair’s neck.  Despite any near-term any gains that may be realized, we maintain our negative outlook on the EUR/USD trend wise.  With increasing downward pressure on U.S. equities and the sustainability of the economic stabilization in doubt, the EUR/USD should remain in its damaged state unless news comes showing the serious problems stemming from the global financial crisis are behind us.  Fundamentally, we maintain our supports of 1.2919, 1.2876, 1.2833, and 1.2800 with fresh bottom-end of 1.2756.  To the topside, we hold our resistances of 1.2953, 1.3017, 1.3050, 1.3091, and 1.3126.  The 1.30 area still serves as a psychological barrier with 1.25 becoming a key psychological cushion.  The EUR/USD is currently exchanging at 1.2958.

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 has been incredibly volatile today as investors digest important employment data and the CBI’s release of Britain’s budget for the new fiscal year.  The GBP/USD shot up earlier after the Claimant Count Change number came in much better than anticipated.  However, the currency pair has reversed course after Darling outlined the new budget and reduced his forecast for GDP growth.  Today’s data also comes with a negative asterisk attached since the average earnings data was much worse than expected, signaling consumption could take another big hit.  However, the downturn of the Cable today has much to do with the CBI’s new budget.  Darling described a preference to avoid new economic stimulus measures, meaning if a second wave from the economic crisis does reach shore, Britain may be left without a life raft.  To add to today’s negativity is a very discouraging earnings release from Morgan Stanley.  The bleak earnings report from MS reignites the concern that the troubles for the financials are far from over.  Furthermore, we do now know whether the accounting changes to mark-to-market were responsible for the surprisingly the positive earnings from other major U.S. financials.  Since the financial industry comprises such a large proportion of Britain’s GDP, any setback in financials threatens the stability of the Cable.  The GBP/USD has collapsed beneath 4/20 lows and the psychological 1.45 mark, meaning the losses could pile on towards our 1st tier uptrend line.  Any retracement beyond this trend line could yield incredibly a negative performance from the GBP/USD in the near-term.  We maintain our negative stance on the GBP/USD due to the aforementioned reasons.  Fundamentally, we find resistances of 1.4478, 1.4532, 1.4579, 1.4612, and 1.4677.  The 1.45 area is turning into a psychological barrier with 1.40 acting as a key psychological cushion.  To the downside, we see supports of 1.4438, 1.4391, 1.4362, 1.4319, and 1.4283.   The GBP/USD is currently exchanging at 1.4462.

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 heading south as our 1st tier uptrend line and 2nd tier downtrend lines reach an inflection point despite a better than expected Trade Balance from Japan earlier today.  Japan’s Trade Balance showed slight improvements in exports, although nothing to pour champagne over.  We feel the Trade Balance data could be a lagging indicator as it may not reflect the present export environment.  What we do see is a currency pair succumbing to its negative tendencies, following U.S. equities lower.  The strong positive correlation between the two is returning to the fray as the highly psychological 100 level fades into the distance.  The obstacles to the upside are mounting, and the inability for the USD/JPY to capitalize on its advantageous position in March shows the currency pair is not ready to commit to an end in the global financial crisis.  While investor focus may be on the EUR/USD and GBP/USD right now due to the USD/JPY’s lack of volatility lately, we encourage traders to keep a close eye on this currency pair.  If the USD/JPY were to decline below our 97.11 support and 1st tier downtrend line, we could see losses accelerate rapidly in the near-term.  The performance of the USD/JPY will likely depend on U.S. equities.  If the S&P futures experience further weakness the USD/JPY may be inclined to follow suit.  Fundamentally, we find resistances of 98.56, 99.20, 99.79, 100.28, and 100.71.  To the downside, we see supports of 97.59, 97.11, 96.33, and 95.55 with fresh bottom-end of 95.04.  The 100 level serves as a key psychological barrier with 95 acting as a psychological cushion.  The USD/JPY is currently exchanging at 97.66.

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.

Source: ForexYard

Traders moving assets to safer, lower yielding currencies appear to be playing a factor in the correction of the major crosses. The USD and the JPY have been the primary beneficiaries of this trading strategy. Comments by Treasury Secretary Geithner also have been swaying the Dollar. Further testimony by Geithner today could push the Dollar higher once again.

Economic News

USD – Greenback Advanced vs. the EUR on Crisis Concerns

The Dollar rose to a 5-week high against the EUR as concern the global financial crisis will worsen. This fear boosted demand for the U.S. currency. Renewed worries over the financial turmoil are making investors risk-averse again. In the market’s current direction, the Dollar and the Yen are likely to be favored by the investors, analysts said. The USD traded at $1.2899 per EUR as of 9:13 a.m. in Tokyo from $1.2921 in New York yesterday.

The U.S. currency declined however more than 1% versus the Australian and New Zealand dollar and CHF on reduced concerns about bank balance sheets. This may prompt investors to shift funds to higher-yielding assets. The Dollar has lost more than 10% in the past 2-months against the AUD and NZD on signs the global economic slump may be weakening.

The USD also weakened after Treasury Secretary Geithner said that the vast majority of U.S. banks still have sufficient capital, thus reducing the greenback’s risk haven appeal. The market is awaiting the outcome of the U.S. authorities’ stress tests on banks. The U.S. Treasury Secretary said most U.S. banks had enough capital to keep lending but a pile of bad debts are fostering doubts about their health and slowing a recovery. The Federal Reserve plans to release its test results on May 4. The tests are being used to determine whether the companies have enough capital to cover losses over the next 2 years should the recession worsen.

EUR – EUR Rebounds on Positive German Sentiment

The EUR advanced for the first time in 4 days against the Yen after a report showed German investor confidence in April increased to its highest level in almost 2 years. The European currency has also climbed slightly against the U.S Dollar after the ZEW index rose to 13, from minus 3.5 in March. The currency rose 0.3% to 126.84 Yen, and to $1.2957, from $1.2921 yesterday, and after reaching $1.2990 earlier.

The currency market is highly volatile at the moment, reversing steep moves from one day to the next, and the EUR gained on Tuesday as an improvement in German investor confidence lifted stock markets and helped pull commodity currencies higher. However the EUR gains might be limited and needs to be treated with caution. The Euro currency continues to suffer from risk aversion and expectations of a major change in European Central Bank (ECB) monetary policy, largely imposed on the central bank by deteriorating internal and external conditions.

Any gains in the EUR will likely be limited and the currency may trade as low as $1.24 by the end of the month. This is due to the uncertainty over what unconventional policy steps the European Central Bank may adopt next month. The central bank is expected to cut Interest Rates below their current 1.25%. Analysts also expect the ECB to have to resort to flooding the banking system with money to promote lending and growth, though what method the ECB might use remains in doubt.

JPY – Yen Bullish Day on Strong Export Numbers

The Japanese currency rose against 15 out of 16 most-traded currencies after Japan’s Ministry of Finance said custom-cleared exports declined 45.6% in March from a year earlier, following a record drop of 49.4% in February. The trade balance data seem to suggest that Japan’s economic slump may also ease somewhat in the last quarter.
The Yen climbed against the Dollar and the EUR after a government report showed exports fell at a slower pace; spurring speculation the worst of the nation’s recession may be over. The JPY climbed to 98.29 per USD from 98.73 yesterday. Against the EUR, Japan’s currency advanced to 127.09 from 127.81.

OIL – Oil Continues to Trade on Under Stress

Crude Oil prices finished largely unchanged after an industry report showed U.S. stockpiles fell, raising optimism that fuel demand has increased as the economic crisis abated. The gains came as U.S. stock markets rose roughly 1% after industrial bellwether United Technologies posted results that beat Wall Street expectations and bank shares rebounded. The price of Crude plunged as low as $46.70, only to rebound as the gains in U.S. stock markets occurred. Oil prices have been tracking moves in equities closely in recent months as traders look for signs of a recovery from the economic slowdown that has curbed global demand for Oil for the first time in a quarter century.

Crude prices have been trading in a range between $46 and $55 for the past month, after rallying steadily since February from $33 a barrel, helped by hopes of economic recovery and OPEC’s compliance with agreed supply cuts. The producer group has already cut member output quotas by 4.2 million barrels per day since September.

Technical News

EUR/USD

The pair has been trading within a restricted range lately, and is currently traded at the 1.2940 level. a double dojy formation on the daily chart indicates that a strong movement is expected, and as a bullish cross takes place on the Slow Stochastic, it appears that an upward move could be imminent. Going long with tight stops might be the right strategy today.

GBP/USD

The daily chart shows that the bearish channel was breached as the cable is currently traded for 1.4640. Furthermore, on the 1-hour chart, the RSI has bottomed beneath the over-sold boarder, and is currently pointing up, suggesting that the bullish trend might continue farther. Going long appears to be the preferable choice today.

USD/JPY

The pair is continuing its bearish momentum as it is traded now around the
98.30 level. A bearish cross on the 4-hour chart’s Slow Stochastic suggests that the bearish move may have more room to go, with the potential of reaching as low as the 97.60 level.

USD/CHF

The trend-line has been relatively flat for the last few days, as the pair is currently traded around the 1.1680 level. A triple doji formation on the 4-hour chart indicates that a sharp movement is expected, and as the MACD is pointing down, it appears that going short could be the right choice today.

The Wild Card – EUR/JPY

The bearish trend is showing signs the end may be nearing as the daily chart shows a bullish cross has formed on the slow stochastic, signaling the pair could reverse shortly. This is reinforced as the price is trading in the undervalued zone on the chart’s Relative Strength Index. This could be a good opportunity for forex traders to get out in front of the pair’s correction.

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 GCI Fx Research

€

The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.2995 level and was supported around the US$ 1.2895 level.  Treasury Secretary Geithner defended the Obama adminsitration’s plans to recapitalize the banking system saying “If we simply hoped that banks would work off these assets over time, we would be prolonging the economic crisis, which in turn would cost more to the taxpayer over time.”  Geithner added the “vast majority of banks” has more capital than they require to be considered “well-capitalized” but conceded “For every dollar that banks are short of the capital they need, they will be forced to shrink their lending by $8 to $12.”  Geithner conceded that even the banks that remain well-capitalized are not lending enough to stimulate the economy.  In eurozone news, European Central Bank member Ordonez reported “In general, available forecasts for developed economies point to intense difficulty in 2009” and added an economic recovery may begin “some time in 2010.”  Data released in the eurozone today caused the euro to dart higher as the German April ZEW economic expectations index rallied to 13.0 from -3.5 in March.  Euro bids are cited around the US$ 1.2765 level.

¥/ CNY

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥98.85 level and was supported around the ¥97.70 level.  The yen gave back recent gains as traders’ risk aversion diminished and U.S. equities clawed back some of yesterday’s appreciable losses.  A government source indicated Japan may reduce its growth forecast for the current fiscal year to -3% from 0%.  The government’s Economic Planning Agency reports private forecasts on average estimate the inflation-adjusted gross domestic product rate may have contracted an annualized 12.76% in Q1, a rate that would be worse the 12.1% decline in the October – December period.  The Aso government is likely to submit supplementary budget bills to Parliament on 27 April that will finance a stimulus plan with a record ¥15.4 trillion in new spending and tax cuts.  The Nikkei 225 stock index shed 2.39% to close at ¥8,711.33.  U.S. dollar offers are cited around the ¥104.15 level.  The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥128.05 level and was supported around the ¥126.10 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥145.15 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥84.70 level.  The Chinese yuan appreciated vis-à-vis the U.S. dollar today as the greenback closed at CNY 6.8224 in the over-the-counter market, down from CNY 6.8301.

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The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.4705 level and was supported around the $1.4465 level.    The U.K. Budget statement will be delivered by Chancellor Darling tomorrow and annual net borrowing may soar to ₤175 billion in the 2009-2010 financial year on account of the recession.  Data released in the U.K. today saw March retail price inflation decline 0.4% y/y, the first annual drop since 1960.  March consumer price inflation rose 0.2% m/m and 2.9% y/y.  Cable bids are cited around the US$ 1.4350 level.  The euro weakened vis-à-vis the British pound as the single currency tested bids around the ₤0.8815 level and was capped around the ₤0.8915 level.

Daily Market Commentary provided by GCI Financial Ltd.

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