Month: May 2009

By GCI Fx Research

€

The euro strengthened sharply vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4165 level and was supported around the US$ 1.3925 level.  The common currency reached its highest level since 30 December as traders dumped U.S. dollars ahead of the U.S.-Sino summit in China.   There is growing concern the U.S. may lose its “AAA” credit rating even though Moody’s Investors Service maintained its credit rating this week.  The U.S. government now owes a record US$ 63.8 trillion.  Many data were released in the U.S. today.  The University of Michigan final May consumer sentiment indicator improved to 68.7, up from 65.1 at the end of April.  Also, first quarter gross domestic product contracted 5.7% while the real personal consumption expenditures index was up 1.5%.  The 5.7% contraction was better than the 6.3% decline in the fourth quarter.   Additionally, the May Chicago PMI fell to 34.9 from 40.1 in April.  In eurozone news, French unemployment worsened in April while the May flash eurozone inflation rate was 0.0% y/y, off 0.6% m/m.  EMU-16 April private sector loan growth eased to 2.4% from 3.2% in March while the annual M3 money supply growth rate was off to 4.9% in April from 5.0% in March.  European Central Bank member Draghi said the chances of eurozone deflation “now appear slight.”  Other data saw German April retail sales climb +0.5% m/m and fall 0.8% y/y.  Euro bids are cited around the US$ 1.3435 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥95.20 level and was capped around the ¥97.00 figure.  Many data were released in Japan overnight.  April construction orders were off 25.9% y/y to ¥562.8 billion while the trade deficit printed at ¥24.62 billion between 1 – 10 May.  Also, April industrial output was up 5.2% m/m and off 31.2% y/y.  Other data saw April core consumer price inflation off 0.1% y/y, consistent with expectations.  Bank of Japan’s Policy Board is expected to keep its monetary policy unchanged for the foreseeable future, especially after upgrading its assessment of the economy earlier this week.  The Nikkei 225 yesterday stock index climbed 0.75% to close at ¥9,522.50.  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 ¥134.25 level and was capped around the ¥135.70 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥153.25 level while the Swiss franc moved lower vis-à-vis the yen and tested offers around the ¥88.90 level. In Chinese news, the U.S. dollar closed at CNY 6.8273 in the over-the-counter market.  Treasury Secretary Geithner travels to China this weekend and meets with leading Chinese officials on Monday.  Treasury officials said the Obama administration is “attuned to the interests of our investors and plan to listen closely to what they have to say.” The Chinese government has recently been critical of the effects of U.S. policy and how they impact the value of China’s massive foreign reserves, about 70% of which are said to be denominated in U.S. dollars.  The Treasury also said the “U.S. dollar will continue to play a very important role for a very long time.”

₤

The British pound appreciated sharply vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.6195 level and was supported around the $1.5915 level.  Data released in the U.K. today saw May Nationwide housing prices rise 1.2% and fall 11.3% y/y.  Also, May GfK NOP consumer confidence was steady at -27, unchanged from April.  Cable bids are cited around the US$ 1.5535 level.  The euro appreciated vis-à-vis the British pound as the single currency tested offers around the ₤0.8800 figure and was supported around the ₤0.8705 level.

CHF

The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.0655 level and was capped around the CHF 1.0860 level.  Data released in Switzerland today saw the May KOF leading indicator remained unchanged at -1.86.  U.S. dollar offers are cited around the CHF 1.0975 level.  The euro and British pound weakened vis-à-vis the Swiss franc as the crosses tested bids around the CHF 1.5075 and CHF 1.7150 levels, respectively.

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 CountingPips.com

The U.S. economy contracted in the first quarter of 2009 by 5.7 percent according to the latest release by the U.S. Commerce Department. The preliminary estimate report released today showed that the U.S. Gross Domestic Product was better than the advance estimate released in April that registered a 6.1 percent fall in the January to March quarter. Real GDP fell by 6.3 percent in the fourth quarter of 2008. Today’s GDP numbers surpassed the 5.5 percent contraction that the economic forecasts were expecting for the first quarter and marked the first time since the 1974-1975 period that GDP has shrunk for three quarters in a row.

Contributing to the decreased GDP for the fourth quarter were declines in business inventories, exports and housing. Exports declined sharply in the quarter as exports of goods and services decreased by 28.7 percent after falling by 23.6 percent in the fourth quarter.

On the positive side, consumer spending, which makes up approximately two-thirds of U.S. economic activity, increased in the first quarter by 1.5 percent after decreasing sharply in the previous two quarters.

Forex – U.S. dollar declines in Forex Trading.

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

The euro has advanced versus the USD for the second day as the EUR/USD trades at 1.4136 in the afternoon of the US trading session at 3:21pm EST after opening the day at 1.3983 according to currency data from Oanda.

The British pound has climbed today as the GBP/USD trades at 1.6142 after opening the day at 1.5962.

The dollar has lost ground against the Japanese yen today as the USD/JPY has decreased from its 95.19 opening to trading at 97.67.

The dollar has fallen against the Canadian dollar after opening at 1.1116 earlier today to trading at 1.0939 later. Meanwhile, the USD has also declined against the Swiss franc as the USD/CHF has gone from 1.0809 to trading at 1.0678.

The Australian dollar has gained for the second day in a row versus the USD as the AUD/USD trades at 0.7994 after opening today at 0.7873 while the New Zealand dollar has also increased versus the USD as the NZD/USD trades at 0.6385 after opening the day’s trading at 0.6259.

USD/CAD Chart – The US Dollar falling sharply today versus the Canadian Dollar in Forex Trading and the USD/CAD is trading at its lowest level since September 2008.

By Robert Prechter

The following article is excerpted from a brand-new eBook on gold and silver published by Robert Prechter, founder and CEO of the technical analysis and research firm Elliott Wave International. For the rest of this fascinating 40-page eBook, download it for free here.

Have you ever traveled abroad and taken a look at the local currency and wondered how the citizens of that country could take seriously what looks like “Monopoly money?” I’ve got news for you: You’re using the same stuff. Monopoly money is the money over which some government has a monopoly. It is the currency of the realm only because the state makes it illegal to use any other type.

Promissory notes issued by a state and declared the only legal tender are always doomed to depreciate to worthlessness because of the natural incentives and forces associated with governments. A state cannot resist a method of confiscating assets, particularly one that is hidden from the view of most voters and subjects. By extension, it is unreasonable to advocate a standard for such notes, which is simply a state’s promise that its currency will always be redeemable in a specific amount of something valuable, such as gold. A gold standard of this type is only as good as the political promises behind it, reducing its value to no more than that of paper. It could be argued, in fact, that a state-sponsored gold standard is far more dangerous than none at all, as it imbues citizens with a false sense of security. Their long range plans are thus built upon an unreliable promise that the monetary measuring unit will remain stable. Later, when the government’s “IOU-something specific” becomes, as Colonel E.C. Harwood put it, “IOU nothing in particular,” reliability disappears and the arbitrary reigns. Although the populace tends to retain its confidence in the currency for awhile thereafter, the ultimate result is chaos.

The only sound monetary system is a voluntary one. The free market always chooses the best possible form, or forms, of money. To date, the market’s choice throughout the centuries, wherever a free market for money has existed, has been and remains precious metal and currency redeemable in precious metal. This preference will undoubtedly remain until a better form of money is discovered and chosen. Until then, prices for goods and services should be denominated not in state fictions such as dollars or yen or francs, but in specific weights of today’s preferred monetary metal, i.e., in grams of gold. Anyone might issue promissory notes as currency, but the acceptance of such paper certificates would then be an individual decision, and risks of loss through imprudence or dishonesty would be borne by only a few individuals by their own conscious choice after considering the risks. Critical to the understanding of the wisdom of such a system is the knowledge that private issuers of paper against gold have every long run incentive to provide a sound product, just as do producers of any product. As a result, risks would be minimal, as the market would provide its own policing. Thievery and imprudence will not disappear among men, but at least such tendencies in a free market for money would not have the potential to be institutionalized, as they are when a state controls the currency. From a macroeconomic viewpoint, occasional losses resulting from dishonesty or imprudence would be extremely limited in scope, as opposed to the nationwide disasters that state controlled paper money has facilitated throughout history, which have in turn had global repercussions. As Elliott Wave Principle put it, “That paper is no substitute for gold as a store of value is probably another of nature’s laws.”

That being said, it is also true, and crucial to wise investing, that markets come in both “bull” and “bear” types. Being a “gold bug” at the wrong time can be very costly in currency terms. For nearly three decades, gold and silver’s dollar price trends have confounded the precious metals enthusiasts, who for the entire period have argued that soaring gold and silver prices were “just around the corner” because the Fed’s policies “guarantee runaway inflation.” Yet today, 29 years after the January 1980 peaks in these metals and despite consistent inflation throughout this time, their combined dollar value (weighting each metal equally) is still 40 percent less than it was then.

It is all well and good to despise fiat money, but it is hardly useful to sit in gold and silver as if no other opportunities exist. In contrast to the one-note approach, which has had an immense opportunity cost since 1980, competent market analysis can help you make many timely and profitable financial decisions in all markets, including gold and silver.

For more in-depth, historical analysis and long-term forecasts for precious metals, download Prechter’s FREE 40-page eBook on Gold and Silver.

About the Author

Robert Prechter, Certified Market Technician, is the founder and CEO of Elliott Wave International author of Wall Street best-sellers Conquer the Crash and Elliott Wave Principle and editor of The Elliott Wave Theorist monthly market letter since 1979.

By Fast Brokers

The EUR/USD has climbed steadily through all of our trend lines, 1.40, and is currently trading just above May 22 highs.  This is a very bullish move, and it appears the currency pair is on the verge of a near-term breakout to the upside.  The key will be sizable volume backing today’s movement.  Today’s gains come despite a lower than expected CPI reading from the EU, meaning traders are feeding off of a strengthening S&P.  Investors also saw stronger than expected German retail sales and M3 money supply.  The rising M3 combined with a stabilizing economy means the ECB can feel more comfortable about maintaining their benchmark rate at its present level, with the possibility of rate hikes down the road.  We also need to keep in mind that the ECB has played their cards conservatively as compared to the central banks of Britain and the U.S.  Therefore, the Euro is in a relatively advantageous position to appreciate in the near-term should global economic conditions continue to improve.  What has transpired over the last 24 hours seems to confirm our consistent bullish outlook.  Though we may see a little weakness today due to intermittent profit-taking, the EUR/USD is making a clear statement.  Meanwhile, our 1st tier downtrend and 1st and 2nd tier uptrend lines are all reaching an inflection point late Friday/early Monday.  Therefore, we anticipate volume to pick up over the next few trading sessions.

With the EU finished for the week, investors will be paying close attention to U.S. equities and the release of Prelim GDP, Chicago PMI, and Revised Univ. of Mich. Consumer Sentiment.  Should these data points beat analyst expectations and U.S. equities react positively this would only provide more fuel to the EUR/USD’s uptrend due to the strong positive correlation.  In fact, the fundamental movements of the EUR/USD and the GBP/USD could be sending a message that U.S. equities are positioned for a breakout of their own.  With economic data trending upwards around the globe, we are seeing a return to risk, which bodes well for the EUR/USD.  We maintain our bullish outlook on the EUR/USD trend-wise due to the aforementioned reasons.

Fundamentally, we find resistances of 1.4078, 1.4117, 1.4187, 1.4222, and 1.4290.  To the downside, we see supports of 1.4024, 1.3991, 1.3955, 1.3922, and 1.3889.  The 1.35 area serves as a psychological cushion with 1.40 acting as a psychological barrier.  The EUR/USD is currently exchanging at 1.4070.

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 busted through our 2nd tier downtrend line and the psychological 1.60 level as investors return to risk.  We view the defeat of our 2nd tier downtrend line as a significant move, giving a green light to the Cable’s bull trend.  Our 2nd tier downtrend line stretches back to July 2008 highs, meaning the GBP/USD has a ton of room to the upside with all near-term downtrend pressures out of the way.  Investors are reacting to a much stronger than expected Nationwide HPI release, showing home values are improving in Britain.  Today’s release counters this week’s evidence that Mortgage Approvals are slowing down.  After fighting off a dismal CBI release yesterday, bulls were waiting for a bit of good news to run with.  Even though Britain’s economic releases have been mixed this week, investors should keep in mind Britain released a wave of optimistic data over the past month.  Today’s key gains in the Cable reflect the fundamental movements made by the EUR/USD and crude.  Therefore, investors are returning to risk in a hurry as the global economic climate improves.

Investors will be waiting for the key economic data surfacing from the U.S. today.  If the numbers exceed analyst expectations, we could witness a strong near-term rally with U.S. equities depreciating the Dollar and sending the European currencies higher.  Regardless, the Cable has made a statement showing that the bull trend is alive and well.  Keep an eye on volume to see if it confirms the key upward movement occurring.  We maintain our bullish outlook in the Cable due to the aforementioned reasons.

Fundamentally, we find resistances of 1.6129, 1.6233, 1.6307, 1.6388, and 1.6462.  To the downside, we see supports of 1.6062, 1.6011, 1.5949, 1.5886, and 1.5822.  The GBP/USD is currently exchanging at 1.6128.

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’s run is fading quickly, backing away from our 2nd tier downtrend line while giving into the heavy downward pressures exerted on price.  Present weakness in the USD/JPY comes after a head-turning 5.2% growth in industrial production, giving investors incentive to appreciate the Yen.  Investors seem to be ignoring the decline in consumer prices and spending.  We have seen improvement in machinery orders, exports, and now industrial production.  Therefore, it seems the drivers of growth are recovering, meaning consumer behavior should improve soon as well.

Interestingly, investors are showing preference for the Yen vs. the Dollar, meaning the Japanese economy and balance sheet may be in better shape than America’s.  We notice the broad-based depreciation of the Dollar.  Now that the global economy is stabilizing, the U.S. will have to deal with the ramifications of its extraordinary injection of liquidity.  Unfortunately for Japan, the longer the Yen trades at an elevated valuation against the Dollar, the longer exports to the U.S. will be hampered.

We can tell you that not much has changed fundamentally for the USD/JPY.  Though Thursday’s gains came on rising volume, total volume was nothing to brag about.  The currency pair is declining back towards our 1st tier downtrend line with 4 more downtrend lines bearing overhead, not to mention the highly psychological 100 level resting well out of reach.  Therefore, we maintain our bearish outlook trend-wise on the USD/JPY.  Bulls have their work cut out for them.  The first key to the uptrend will be holding our 2nd tier uptrend line.  If this line of defense doesn’t hold, we could see the present pullback pick up speed.

Fundamentally, we find resistances of 96.33, 96.90, 97.45, 97.98, and 98.69.  To the downside, we see supports of 95.82, 95.12, 94.43, 93.77, and 92.65.  The 100 level serves as a key psychological barrier with 95 acting as a psychological cushion.  The USD/JPY is currently exchanging at 95.80.

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

Gold finally made the bull move investors were waiting for, catapulting from our trend line inflection points while leaving the psychological $950/oz level behind.  Though the rise of gold has been incredible over the last 24 hours, movement has come on declining volume, meaning the precious metal could top out soon.  Regardless, previous May highs have been broken and a retest of the key $1000/oz seems imminent.  Gold’s breakout comes with high flying crude futures, signaling inflation could be on the way.  Since gold has exhibited a positive correlation with equities as of late.  Therefore, gold’s impressive gains could be signaling a breakout in the S&P futures.  Though we’re bullish on gold fundamentally, there are obviously a few more downtrend lines to deal with and $1000/oz, so there could be a rough road ahead.

Fundamentally we find resistances of $975.81/oz, $978.11/oz, $980.56/oz, $983.25/oz and $987.29/oz.  To the downside, we see supports of $971.86/oz, $969.29/oz, $965.98/oz, $963.28/oz, and $961.45/oz. Gold is currently trading at $974.90/oz.

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

Today, traders are advised to follow constant daily development coming out of the U.S. economy, such as the release of Prelim GDP figure. This indicator might provide for extreme market volatility in the major currency pairs. Traders may find good opportunities to enter the market following this vital announcement at 12:30 GMT.

Economic News

USD – GDP Report on Tap – Will USD Weakness Continue?

The U.S. Dollar traded weakly in yesterday’s session as it witnessed depreciation against all of its currency rivals. Plunging toward the critical levels of 1.4000 against the EUR and 1.6000 against the GBP, the greenback’s recent weakness doesn’t appear to have an end in sight for today.

With an expectant worry that today’s data releases will put investor focus on America’s increase in debt issuance, thus resulting in a higher Treasury yield; the market may continue to go bearish on the USD. As expected, higher yielding assets and currencies like the EUR and GBP may then gain significantly from these speculations. Positive economic data in Europe throughout the week has also resulted in dramatic investment shifts towards a diversified portfolio for many traders who wish to increase their risk and pull away from safe-haven investments.

Looking forward to today, forex traders will no doubt be marking the multitude of European data releases as Britain’s HPI housing report may show a sudden return to market weakness, and the Euro-Zone’s M3 money supply report has the potential of showing a drop in the level of currency available throughout the European forex market. In the United States, the Preliminary GDP report is scheduled to be released at 12:30 GMT and may show the U.S. economy shrinking less than last quarter, a sign that the economy could be entering a solid recovery. With a focus on America’s debt issuance, USD weakness is anticipated to continue throughout the end of the week.

EUR – EUR’s Recent Gains on Unsteady Ground

The EUR has been the beneficiary of the market’s recent increase in risk appetite considering it has appreciated against almost all of its currency rivals over the past week. The 16-nation currency climbed towards the psychological barrier of 1.4000 against the USD, temporarily breaching the resistance line before falling back under the mark. With the recent dash to sell off the JPY, the EUR apparently received the bulk of investor flight, climbing as high as 135.40 against the island currency.

With the surge of consumer confidence in some of Europe’s largest economies, there exists a moderate level of hope in a speedy recovery for the Euro-Zone’s regional economy. German market data has displayed a wide array of positive results which have helped convince many weary traders that the worst may indeed be over. In a rush to diversify trading portfolios for riskier assets, the EUR appears to have been one of the primary choices for this move. The question remains, however, as to whether this move towards Europe will continue. Some analysts say it marks the beginning of a recovery, but will not sustain itself at this pace in the short-term.

As for today, there are two important data releases which forex traders need to keep an eye on. The first is the Nationwide HPI report in Britain which may show the housing market declining once more. This report is scheduled to be released at 6:00 GMT. The second is the report on the M3 money supply in circulation throughout the Euro-Zone. With a direct correlation to interest rates, the money supply is an important gauge of currency valuation. With negative results, we could see a temporary reversal to the EUR’s recent trends through the end of today’s trading.

JPY – JPY-Funded Carry Trades Returning?

The Japanese Yen saw one of its most bearish sessions in months. Dropping back towards the 97.00 level against the USD, and the 155.00 level against the GBP, the island currency witnessed a rash sell-off in Thursday’s mid-day trading sessions. There was a growing concern that Japanese equities were more resilient than previously forecast which led to an increase in risk appetite for many safe-haven investors. This generated an investment flight towards Europe in search of higher yielding assets. Some analysts believe the JPY-funded carry trade may be on the return, which will eventually push the value of the Yen towards the lows of 2007-2008.

As for today, there aren’t many data releases expected from Japan. However, last night’s consumer pricing reports indicated a decrease in price for Japanese goods and services, highlighting a weakened demand for these sectors of Japan’s economy. This may also have generated a strengthened push to flee from JPY safe-haven investments. Unless news from the Euro-Zone or U.S. comes out highly negative throughout the day, the JPY will likely continue getting weaker.

Crude Oil – Crude Oil Price Meets Little Resistance

After climbing to a record high not seen since November, the price of Crude Oil has stabilized for the moment. With a sudden flight from safe-haven investments such as the JPY and USD, commodity prices appeared to gain a strong boost from the weakness of the Dollar. Crude Oil spiked to the price of $65 a barrel in mid-day trading yesterday. Only in today’s early trading hours did the price begin to settle just under this price barrier.

The Organization of Petroleum Exporting Countries (OPEC) agreed not to change production levels for the time being, with the assumption that doing so may destabilize weakened economies. A report showing a sharp decline in oil inventories also supported this move as a boost to demand and consumption is expected in the coming weeks. With this information in mind, forex traders may understand that long-term pressure continues to show upward momentum, meaning the price of oil may continue on up towards $75 a barrel in the coming months.

Technical News

EUR/USD

The bullish trend is loosing its steam and the pair seems to consolidate around the 1.3980 level. The pair currently sits near the upper border of the daily chart’s RSI, suggesting a downward correction may be imminent. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

GBP/USD

The 4-hour chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, the daily Chart’s RSI is already floating in the overbought territory indicating that a bearish correction might take place in the nearest future. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

USD/JPY

There is a fresh bearish cross forming on the daily chart’s Slow Stochastic indicating a bearish correction might take place in the nearest future. The downward direction on the 4-hour chart’s Momentum oscillator also supports this notion. When the downward breach occurs, going short with tight stops appears to be preferable strategy.

USD/CHF

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

The Wild Card – Crude Oil

Crude Oil prices rose significantly in the last two weeks and peaked at $65.30 per barrel. However, the daily chart’s RSI is floating in an overbought territory suggesting that a recent upwards 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.

By GCI Fx Research

€

The euro strengthened vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3980 level and was supported around the US$ 1.3790 level.  The common currency recovered from intraday losses that were prompted by a decent U.S. durable goods report that saw April headlne durable goods orders up 1.9%.  Other data saw the Chicago Midwest manufacturing index decline 1.1% in April while April new home sales increased marginally, up 0.3% in April to an annualized 352,000 level.  On a yearly basis, new home sales were down 34.0% y/y.  The uptick in nonthly housing sales activity represented the second time in three months the housing market improved and could signal a reversal in the fate of the beleaguered housing industry.  Additionally, weekly initial jobless claims fell to 623,000 while continuing jobless claims continued to move higher.  In eurozone news, European Central Bank member Constancio said policymakers have not made any decision about additional interest rate cuts.  Data released in the eurozone today EMU-16 May economic confidence improve to 69.3 while German April plant, machinery orders were off a real 58% y/y.  Moreover, German May unemployment ticked lower to 8.2% from 8.3% and the April ILO unemployment rate increased to 7.7%.  Finally, the EMU-16 April leading indicator was up +1.8%.  Euro bids are cited around the US$ 1.3435 level.

¥/ CNY

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥97.25 level and was supported around the ¥95.20 level.  Today’s intraday high represented the pair’s strongest showing since 12 May.  Traders are citing real-world money flows as one reason why the yen has been declining as Japanese investors are said to be getting long foreign bonds.  Data released in Japan overnight saw April retail sales decline for the eighth consecutive month, off 2.9% y/y, while overall retail sales were off a revised 3.9% in March following February’s 5.7% pullback.  The Nikkei 225 yesterday stock index gained 0.13% to close at ¥9,451.39.  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 ¥135.25 level and was supported around the ¥131.70 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥154.90 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥89.45 level. In Chinese news, U.S. Treasury Secretary Geithner will visit China this weekend and will meet with top Chinese officials early next week.  Treasury officials said the Obama administration is “attuned to the interests of our investors and plan to listen closely to what they have to say.” The Chinese government has recently been critical of the effects of U.S. policy and how they impact the value of China’s massive foreign reserves, about 70% of which are said to be denominated in U.S. dollars.  The Treasury also said the “U.S. dollar will continue to play a very important role for a very long time.”

₤

The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.5850 level and was capped around the $1.6015 level.  Data released in the U.K. today saw April CBI retail sales fall with the retail sales balance lower at -17 in May from +3 in April.  Bank of England Deputy Governor Bean said the central bank is trying to improve access to financing for small to medium-sized businesses.  Cable bids are cited around the US$ 1.5535 level.  The euro appreciated vis-à-vis the British pound as the single currency tested offers around the ₤0.8765 level and was supported around the ₤0.8655 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.

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By CountingPips.com

U.S. durable goods orders increased more than expected in April after falling in March according to a report released by the U.S. Commerce Department today. Durable goods orders in the United States advanced by 1.9 percent in April to a total of $161.5 billion after declining by a revised 2.1 percent in March. Durable goods sales had rebounded in February after falling for six straight months. Today’s data beat market forecasts that had been expecting that durable goods orders would increase by approximately 0.5 percent for the month.

New orders for durable goods excluding transportation gained by 0.8 percent in April following a revised decrease of 2.7 percent in March. Market forecasts were predicting a decrease of 0.3 percent in durable goods minus transportation.

Shipments of durable goods decreased in April by 0.3 percent and fell for the ninth straight month. Unfilled orders decreased 1.2 percent in the month while durable good inventories decreased by 0.8 percent and have now declined for four straight months. March nondefense orders for new goods fell by 2.0 percent while defense orders for capital goods rose by 23.2 percent.

U.S. New Home Sales edge up in April.

New Home Sales in the United States gained slightly in the month of April according to data released by the Department of Commerce today. Purchases of new single family homes rose to an annual rate of 352,000 in April, a 0.3 percent advancement following March’s 3.0 percent revised decrease in sales. April’s annual rate of new homes sold, despite the increase, is still 34.0 percent lower than the April 2008 level.

April’s results were worse than market forecasts which were expecting a 1.1 percent increase in sales for the month for an annual rate of 360,000 new homes sold. The median sales price of new homes in April fell by 15 percent on an annual basis to $209,700 while the average sales price came in at $254,000.

Also released out of the U.S. today was the weekly jobless claims report by the Department of Labor and the report showed that jobless claims fell by 13,000 workers in the week that ended May 23rd. This was the second week in a row jobless claims fell and the data beat market forecasts that were expecting to see 628,000 claims.  Continuing jobless claims continued to rise and marked a new record high with 6,788,000 claims for the week ending May 16th. This was 110,000 above the previous week and was worse than forecasts were expecting.

US Dollar mixed in Forex Trading today.

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

The euro has climbed higher versus the dollar today as the EUR/USD has gone from its 1.3819 opening(00:00 GMT) to trading at 1.3915 in the afternoon of the U.S. trading session at 12:55pm EST according to currency data from Oanda.

The British pound has fallen today as the GBP/USD has declined from its 1.5906 opening exchange rate to trading at 1.5979 usd per gbp. The dollar has gained versus the Japanese yen and trading at 96.96 after opening at the day at the 96.24 exchange rate.

The dollar has lost ground today versus the Canadian loonie as the USD/CAD trades at the exchange rate of 1.1180 after opening the day at 1.1228.

The dollar has declined against the Swiss franc as the USD/CHF trades at 1.0864 after opening at 1.0937 today while the dollar has also been weaker against the Australian dollar and New Zealand dollar. The AUD/USD trades at 0.7802 after a 0.7768 opening while the NZD/USD trades at 0.6210 today after opening at the exchange rate of 0.6130.

GBP/USD Chart – The British Pound falling today versus the US dollar in forex trading after gaining for the last seven out of eight days.