Month: May 2009

By Fast Brokers

The Cable did top out yesterday at our 1.5158 resistance as volume tapered out.  However, we view the decline as profit taking since the Cable has had such an impressive run as of late.  The GBP/USD is encouragingly finding stability at the highly psychological 1.50 mark, showing the investors are getting comfortable with a 1.50+ future.  The Cable is experiencing relative strength after yesterday’s impressive showing in Britain’s Construction PMI.  Britain has stringed together a couple weeks of encouraging data, keeping the ball in the bull’s court.  While yesterday’s retracement to 1.50 was expected, the Cable remains above all of our uptrend and downtrend lines.  Therefore, if the next 24-48 hours go well data and news wise, the Cable could receive the high volume boost we’ve been waiting for, and the currency pair would be off to the races.  As a result, we maintain our bullish outlook trend wise.  The GBP/USD continues to surpass key technical barriers and is leaving our downtrend lines behind, meaning the uptrend should have considerable room to grow.

Britain’s Nationwide Consumer Confidence number came in better than expected earlier today, keeping the data winning streak alive.  However, the resilience of Britain’s economic recovery could be tested today with the release of its Halifax HPI and Services PMI data points.  Last week’s Nationwide HPI came in well above analyst expectations, so it will be interesting to see if tomorrow’s Halifax number relays the same message of stabilization in home prices.  America’s Pending Home Sales blew by expectations Monday, so a resounding message of recovery in housing builds a solid foundation for the uptrend to spring from.  We will also see America’s ADP Non-Farm Employment Change later today, meaning activity in the GBP/USD should pick up from yesterday’s session.

Fundamentally, we find resistances of 1.5059, 1.5114, 1.5158, 1.5213, and 1.5257.  To the downside, we see supports of 1.5017, 1.4988, 1.4946, 1.4902, and 1.4869.  1.50 serves as a key psychological cushion with 1.55 acting as a psychological barrier. The GBP/USD is currently exchanging at 1.5028.

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 filling out the right shoulder of the head and shoulders pattern we pointed out on Monday.  The light volume has disabled the currency pair from climbing past our 3rd tier downtrend line.  However, our 2nd tier uptrend line is still in place, and should remain so until we see a pickup in activity in U.S. equities with important economic data and stress test Thursday on the way.  Therefore, the USD/JPY is waiting for the S&P to make its first move.  If U.S. markets react positively to the next 48 hours of news and the S&P can distance itself from 900, we could see the USD/JPY exercise its positive correlation and re-approach 100 on heavy volume.  To the downside, our 97.11 support and April lows serve as key supports.  If these cushions don’t hold, then we could witness the pullback accelerate.  In all, investors should keep a close eye on U.S. equities to see if they can follow through on their rally.  We maintain our bullish stance trend wise on the USD/JPY unless the aforementioned cushions give way.

Fundamentally, we find resistances of 98.76, 99.20, 99.79, 100.56, and 101.43.  To the downside, we see supports of 97.98, 97.32, 96.33, 95.58, and 94.97.  The 100 level serves as a key psychological barrier with 95 acting as a psychological cushion.  The USD/JPY is currently exchanging at 98.26.

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

Buying of the Dollar resumed yesterday as equities finished lower and the U.S. economy showed better than expected manufacturing data. Traders are allocating their positions accordingly as the markets prepare to absorb a glut of economic news in the coming days which may create a level of heightened price volatility.

Economic News

USD – The Greenback Rebounds for the First Time in 3 Days

The U.S currency climbed versus the EUR on Tuesday and recovered against other major currencies after a drop in equities and the Institute of Supply Management’s survey of service businesses showed that sector of the economy contracted at a slower pace last month. The ISM’s non-manufacturing index rose more than analysts expected to 43.7 in April, from 40.8 the previous month. That’s the highest reading since October. Investors began selling the EUR after it hit a monthly high near $1.3440 amid uncertainty about Thursday’s European Central Bank meeting and results of stress tests on U.S. banks. The USD advanced 0.8% to $1.3280 per EUR from $1.3406 yesterday. The Dollar also gained 0.2% to 98.97 yen, from 98.80.

The Dollar increased versus the EUR after Federal Reserve Chairman Ben S. Bernanke said the U.S. economic contraction may be easing and a report showed services industries shrank at a slower pace. Optimistic comments from Federal Reserve Chairman Ben Bernanke and a slower pace of contraction in the service sector have helped to drive the U.S. Dollar higher.

Bernanke’s remarks before the congressional Joint Economic Committee echoed last week’s central bank statement that the economic outlook has improved since March. The Dollar had been under some pressure in the past 4 weeks and was traded in a range of $1.2886 to $1.35 per EUR. However, the greenback is likely to rebound further and advance to $1.30 by the end of the second quarter, according to analysts.

EUR – The ECB May Rates Near Zero Percent

The European single currency retreated slightly off of a monthly high versus the Dollar ahead of a meeting on Thursday of European Central Bank (ECB) policy makers. Some in the market said they were wary of taking on too much risk ahead of Thursday’s policy announcements by the ECB and the Bank of England (BOE).

The Euro-Zone currency fell on speculation the Central bank will cut Interest Rates tomorrow and announce plans to buy debt as part of an initiative to end the region’s recession. The ECB is expected to cut its benchmark rate to a record low 1%, while the BOE is seen holding rates steady at 0.5%, which is also a record low for Britain.

More importantly, market players want to see whether the ECB suggests it will keep cutting Interest Rates along with adopting non-conventional policy measures such as buying long term government securities to stimulate growth. Therefore, the EUR could resume its rally if the ECB opts not to follow the Fed and adopt non-standard monetary policy.

JPY – The Yen Pares Its Losses Versus the USD

Japan’s currency rose against the greenback by the most in more than a week after Reuters reported the government review will show Bank of America Corp. needs $34 billion in new capital, citing a person familiar with the results. The Yen rose as much as 0.8% to 98.17 against the Dollar, the most since April 24. The currency also rose 1.2% against the EUR, to 130.09 from 131.73 in New York yesterday.

The Japanese currency gained as the Fed plans to deliver results of stress tests on U.S. banks that may show about 10 companies in need of additional capital. Economists said that the bank stress tests might rattle market confidence and the recent outbreak of optimism might be due for its own stress test.

OIL – Crude Retreats After Touching 2009 High

Crude Oil prices declined on Tuesday as bulging Oil inventories and falling energy demand outweighed fragile hopes for an economic recovery. Analysts said that even though Oil markets are trading near their highs of the year so far, the market still feels nervous about sustaining these levels. The price settled yesterday 63 cents lower at $53.60 a barrel, after hitting a high for the year of $54.83 a barrel.

Oil prices have recovered from $32.40, the lowest since early 2008. Yet prices remain down sharply from the record high above $147 reached in July, 2008. The slumping economy has battered Crude demand, driving up stockpiles and sending prices down from their record highs. However, improvements in the leading economic indicators increase traders’ confidence that a return to sequential economic growth in second half of 2009 will likely support a rise in Crude Oil prices to as high as $65 a barrel.

Technical News

EUR/USD

The pair has recently completed a very strong bearish move, sending the pair to the 1.3250 level. However, after 3 failed attempts to breach through this price level, it appears that the 1.3250 might be a signal for a reversal. Currently, after the 1-hour chart’s RSI has bottomed under the 30 line, it’s pointing up again, also supports this notion. Going long with tight stops might be a good strategy today.

GBP/USD

It seems that the Cable’s bullish trend might have reached its end. The daily chart shows that the bullish move which was initiated at the Bollinger Bands’ lower boarder, has reached its upper boarder. Also, a bearish cross on the daily chart’s Slow Stochastic also suggests that a bearish move is expected. Going short might be the preferable choice today.

USD/JPY

The pair is currently in the midst of a relatively sharp downtrend as the pair is traded at the 98.10 level. However, it seems that the 97.90 level has turned into a very strong support level. If the pair will manage to breach through it, another sharp bearish move might take place.

USD/CHF

The pair continues its volatile behavior from the past couple of weeks, and is currently traded at the 1.1340 level. As a bearish cross appears to be taking place at the 4-hour chart’s Slow Stochastic, a bearish move could be imminent. Going short might be the right choice today.

The Wild Card – Crude Oil

A distinct bullish channel has formed on the daily chart, as Crude Oil is currently traded in its lower section. However, as all oscillators are currently pointing down, it appears that a technical correction could arise. This might be a great opportunity for forex traders to enter the trend at its starting-point.

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.

We at ForexYard always encourage our customers to get involved in the most intense market events. For this week, we believe it necessary that our traders know that interest rate decisions for the GBP and EUR are due Thursday at 11:00 and 11:45 GMT, respectively. Also, the U.S. Non-Farm Employment Change report is expected on Friday, May 8th, at 12:30 GMT, and you need to be prepared!

What are the European Interest Rate Figures?

Expected to be released on Thursday are the target interest rates of the Bank of England (BoE) and European Central Bank (ECB). These are called the Official Bank Rate and Minimum Bid Rate, respectively.

These figures are each released monthly, usually during the first week of the month. They are important because short-term interest rates are the leading factor in determining the value of a currency. In fact, most other economic indicators are used by traders to speculate about the future movement of these interest rates.

The British Official Bank Rate is decided on by the Monetary Policy Committee (MPC) of the BoE. The Euro-Zone Minimum Bid Rate is decided on by the 6 members of the ECB as well as the central bank governors from each of the 16 nations in the European Monetary Union (EMU). According to the needs of each respective economy, the banks will elect to increase, decrease, or leave the rates unchanged. Traders pay close attention to these figures as they have a strong correlation with the value of the GBP and EUR.

If Interest Rates are Changed In-Line with Market Expectations

Economic analysts are forecasting that Britain will keep its Official Bank Rate unchanged at 0.50%. The Euro-Zone, however, is expected to cut its Minimum Bid Rate by 25 basis points from 1.25% to 1.00%.

If interest rates are indeed held steady by the GBP, the Pound may experience some moderate strengthening in comparison to its primary currency rivals, that is, unless Britain introduces quantitative easing measures alongside this decision. In the other parts of Europe, if the ECB does reduce its interest rates, traders may expect a moderate depreciation in the value of the EUR. A cut to interest rates devalues a currency as it increases the amount of that currency available in the market. Analysts are also expecting the ECB to announce a quantitative easing program similar to that undertaken in the United States recently, which will likely drive the value of the EUR much lower, and also push more strength into the GBP.

In this situation, traders may see the GBP gaining strength to test the 1.5000 price level against the USD, while the EUR/USD may lose some ground and trade near the 1.2900 price level.

If Central Banks will Surprise the Market

As of now, analysts are predicting a rate cut throughout the Euro-Zone, not including Britain. If, however, these rate cuts are not as deep, or if they are not taken at all, the likely result will be a continuation of the current trends for the EUR. This may indicate that the central bank is more confident in the future growth of its economy and believes that a rate cut will undermine this recently gained strength. Likewise, if the BoE refuses to keep rates steady and instead decides to increase rates, as some have suggested, the result will be a much stronger appreciation in the GBP and renewed confidence in the British economy.

With these results, the GBP will continue on its strong upward path and likely test the 1.5200, or even 1.5300, price level versus the USD. Likewise, the EUR will continue appreciating against the Dollar with the price level of 1.3500 potentially being reached by beginning of the following week.

What is the Non-Farm Employment Change Report?

The U.S. Non-Farm Employment Change report, also known as “Non-Farm Payrolls” (NFP) and the “Employment Report,” is a monthly economic indicator used to measure the change in the number of employed people, excluding the farming industry.

Each month, the Current Employment Statistics Program surveys about 150,000 businesses, representing approximately 390,000 worksites, in order to provide detailed industry data on employment, work-hours, and earnings of workers on non-farm payrolls for all 50 U.S. states. The survey is then published on the first Friday of each month.

Traders value the indicator with the highest importance as its early monthly release can set the tone for the rest of the month’s market movement. Investors should also note Wednesday’s 12:15 (GMT) release of Automatic Data Processing Inc.’s (ADP’s) estimate of Non-Farm Employment Change. In the past, ADP has provided an accurate assessment of what was to come from the actual NFP release two days later. With the volatility of world economies in recent months, however, ADP has not been able to correctly estimate the Non-Farm Payroll outcome, only strengthening the real power behind Friday’s news release.

How this Report can Hurt the USD

Expectations for this month reveal that the Non-Farm Employment Change figures are forecasted to be slightly better than last month’s, with a release of -615K, up from -663K. A release such as this highlights the renewed strength in the U.S. economy and could potentially drive investors into riskier investments, and likewise out of the currency market, away from the USD.

The recent economic struggle, which is being fought vehemently by the U.S. government, has created uncertainty in the market for the USD, which is driving its value to unpredictable highs and lows. This Non-Farm Employment Change report has delivered negative figures for several consecutive months now; yet still the USD is gaining strength. If this report comes inline with market forecasts, or better, this would mean the USD could be facing renewed weakness as investors flee the safe-havens in exchange for riskier assets, causing the EUR/USD pair to climb back toward levels around 1.3600 in the short run, or higher.

How this Report can Help the USD

On the other hand, the U.S. Non-Farm Employment Change report may indeed print a much lower-than-expected figure, signaling a battered and bruised U.S. economy that is still a long ways off from exiting this recession.

If the actual figure will surprise the market and be lower than forecasted, traders are likely to see a bullish run in the USD. In the situation where the survey delivers worse figures than expected, such as -700K instead of the forecasted -615K, investors might be compelled to reevaluate their strategies and go long on the USD as they flee riskier assets in exchange for safe-havens. In this turn of events, the USD will likely halt any recent bearish movement, and the EUR/USD could drop toward levels of 1.2900 immediately following this release, or possibly lower if the European interest rate decision on Thursday already lowered this pair to that price level.

By GCI Fx Research

€

The euro moved weakened vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3280 level and was capped around the US$ 1.3440 level.  Federal Reserve Chairman Bernanke testified today and said the U.S. economy should start growing later this year, the most optimistic assessment he has made in several quarters.  Nonetheless, he said the economic recovery will coincide with “further sizable job losses” over the coming months.  Bernanke estimates the economy may climb “somewhere” in the 9% range, contrary to many private sector forecasts that see unemployment climbing to 10%.  Current private sector forecasts also see the economy contracting up to 3% in the current second quarter.  Bernanke said “the pace of contraction may be slowing” and said the housing market has evidenced some signs of bottoming while consumer spending improved in the first quarter.  Data released in the U.S. today saw April ISM services sector activity contract with the headline index printing at 43.7, up from 40.8 in March. Sub-indices saw the new orders index improve to 47.0 while the employment index improved to 32.3. Bernanke also indicated there have been some indications of improvements in easing credit strains in the economy.  The big news this week will be the results on banks’ stress tests on Thursday.  There is now chatter that up to ten banks will be requested to firm up their balance sheets with additional capital.  Bernanke said problems banks will have six months to implement “comprehensive capital plans for establishing the required buffers” to protect against future losses” or they will need to obtain assistance from the government.  In eurozone news, French President Sarkozy is seeking a stronger European Union role on bank regulation.  German Chancellor Merkel reported she is opposed to take hikes until the financial and economic crisis are over.  Data released in the eurozone today saw March industrial producer prices register their sharpest decline in 22 years, off 0.7% m/m and 3.1% y/y.  The European Central Bank is expected to reduce its main refinancing rate target to 1.0% from 1.25% on Thursday.  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 ¥99.20 level and was supported around the ¥98.60 level.  Prime Minister Aso reported “Japan and Germany are the biggest economic nations in Europe on the one side and Asia on the other side. And that’s why we both must carry a big responsibility in the international community.”  He added “a lot of financial means will be used in the recovery of the economy.”  Japan’s Golden Week holidays conclude today and liquidity should return to normal overnight.  The Nikkei 225 yesterday stock index will next reopen at ¥8,977.37.  U.S. dollar offers are cited around the ¥104.15 level.  The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥131.50 level and was capped around the ¥132.80 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥149.85 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥87.00 figure. In Chinese news, the U.S. dollar closed at CNY 6.8190 in the over-the-counter market, down from CNY 6.8225.

₤

The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.5160 level and was supported around the $1.4980 level.  Sterling was the main moved in the markets today, outperforming most other currencies.  Data released in the U.K. saw April construction PMI improved to 38.1  CBI’s quarterly survey of small and medium-sized enterprises’ trends reported those firms experienced a decline in output and orders at the fast rate in two decades in the three months to April.   Cable bids are cited around the US$ 1.4735 level.  The euro moved lower vis-à-vis the British pound as the single currency tested bids around the ₤0.8825 level and was capped around the ₤0.8930 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.

The Reserve Bank of Australia decided to hold its interest rate at its lowest standing since 1960 at 3.00 percent today. Today’s rate decision was widely expected and follows a reduction of 25 basis points in April.  The RBA has slashed the interest rate by a total of 425 basis points since September 2008 in response to the global economic downturn.

Glenn Stevens, RBA Governor of Monetary Policy, commented on the Australian economy in the bank statement saying, “The Australian economy contracted in the latter part of 2008, and this has continued in 2009 to date, with both domestic and international demand weaker. Capacity utilisation has fallen back to about average levels, and will decline further over the rest of the year. With demand for labour weakening, growth in labour costs will probably also fall. These conditions are likely to see inflation continue to abate, though this is occurring only gradually so far, as the effects of the decline in the exchange rate are pushing up some prices.”

Stevens said that the global economy has continued to contract in 2009 but that there “are further signs of stabilisation in several countries.”

“The Chinese economy in particular has picked up speed in recent months and many commodity prices have firmed a little. The considerable economic policy stimulus in train in most countries should help contain the downturn and support an eventual recovery.”

The Australian dollar has traded higher in currency trading against most of the major currencies today after the rate announcement. The Australian dollar has advanced versus the U.S. dollar to trading at 0.7424 AUD per USD at 11:09am EST after opening at the exchange rate this morning of 0.7382(00:00 GMT).

The Aussie dollar has increased versus the Japanese yen with the AUD/JPY trading at 73.31 from today’s opening exchange rate of approximately 72.82. The euro has fallen versus the aussie today as the EUR/AUD trades at 1.7993 aussie per euro after opening the day at approximately 1.8111.

The aussie dollar has advanced against the Canadian dollar as the AUD/CAD trades at 0.8734 after opening the day at at 0.8570. Meanwhile, against the New Zealand dollar, the aussie has fallen as the AUD/NZD has gone from the 1.2825 opening rate to trading at 1.2777 later in the American trading session.

AUD/USD Chart – The Australian Dollar advancing versus the US Dollar in Forex Trading today and reaching its highest exchange rate since October 2008.

By Fast Brokers

The EUR/USD bounced well from the inflection point of our 2nd tier uptrend and 3rd tier downtrend lines.  Though the volume wasn’t significant, the action was enough to get the EUR/USD beyond 4/30, and subsequently 4/13 highs.  Since the volume to the upside wasn’t anything out of the ordinary, we could witness the present rally top out soon.  Hence, although we are still bullish on the EUR/USD trend-wise, we are neutral/negative for the near-term.  Short term evaluation aside, the EUR/USD continues to make noteworthy strides fundamentally.

Given U.S. equities continue their path to recovery, the EUR/USD should follow suit considering their strong positive correlation.  The EUR/USD is comfortably above our uptrend lines, and the main downtrend barriers left is our 3rd tier downtrend line and the psychological 1.35 level.  If the currency pair can manage to climb through these two barriers, there could be little holding back the EUR/USD from logging exciting gains.  Meanwhile, we expect to EUR/USD to remain positive correlated with the S&P futures for the next few sessions as investors eagerly await the ECB’s meeting on Thursday.  That being said, we wouldn’t be surprised to see U.S. equities hesitate with the S&P sitting at its critical 900 level while investors also await the release stress tests on Thursday.

The ECB’s meeting on Thursday will be critical since the ECB governors have offered various opinions as to the direction of the central bank’s monetary policy.  The ECB has maintained its benchmark rate at a respectable level while avoiding liquidity measures such as quantitative easing.  The uncertainty among investors could keep any uptrend in check as investors eagerly await results from the meeting.  The ECB’s announcement will come on the same day as America’s stress test results, meaning we expect to see a large spike in volatility on Thursday.

Fundamentally, we maintain resistances of 1.3389, 1.3420, 1.3442, 1.3479, and 1.351.  To the downside, we hold supports of 1.3358, 1.3323, 1.3283, 1.3241, and 1.3211.  The 1.30 area serves as a psychological cushion with 1.35 acting as a psychological barrier.  The EUR/USD is currently exchanging at 1.3390.

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

Over the last 24 hours the Cable has made some of the most notable strides amongst the major Dollar pairs.  The GBP/USD has bolted past the highly psychological 1.50 level and April highs in a single swing.  Strength in the Cable comes after Britain hit another home run with its Construction PMI release.  Hence, we have seen encouraging improvements in most all of Britain’s economy, giving investors little reason to hesitate in sending the GBP/USD higher since U.S. equities are on a roll.  However, we haven’t seen a confirmation in volume on the Cable’s up-bars, meaning the currency pair could soon top out in the near-term as investors may hesitate with the S&P 900 while awaiting stress test Thursday.  Despite our near-term hesitation, we maintain our bullish outlook trend wise.  The GBP/USD continues to surpass key technical barriers and is leaving our downtrend lines behind, meaning the uptrend should have considerable room to grow.

Britain will release Nationwide Consumer Confidence later in today’s session followed by the Halifax HPI and Services PMI early Wednesday.  Last week’s Nationwide HPI came in well above analyst expectations, so it will be interesting to see if tomorrow’s Halifax number relays the same message of stabilization in home prices.  America’s Pending Home Sales blew by expectations yesterday, so a resounding message of recovery in housing builds a solid foundation for the uptrend to spring from.

Fundamentally, we find resistances of 1.5160, 1.5213, 1.5257, 1.5306, and 1.5349.  To the downside, we see supports of 1.5059, 1.5017, 1.4988, 1.4946, and 1.4902.  1.50 becomes a key psychological cushion with 1.55 acting as a psychological barrier. The GBP/USD is currently exchanging at 1.5152.

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 trying to build on Friday’s bounce, flirting with the idea of retesting 100 while the S&P futures battle their own demons at 900.  Unfortunately, yesterday’s run was backed by light volume, meaning the currency pair’s current upswing could be short-lived.  The USD/JPY encounters its first test in our 3rd tier downtrend line, followed by March highs.  We notice a head and shoulders formation with the USD/JPY on its right shoulder as we type.  Therefore, bulls will be looking for any near-term upward movement to be supported by heavy volume if the currency pair is ready to surpass 100 and April highs.

While the upside has its apparent hurdles, the downside is backed by our 2nd tier uptrend line and the resilience the uptrend has shown thus far in 2009.  The USD/JPY’s re-approach of 100 comes with the S&P futures attempting to climb above their critical 900 level.  Therefore, the significance of the moment is relayed by each as investors await Thursday’s ECB meeting and the release of America’s stress test results.

Fundamentally, we find resistances of 99.20, 99.79, 100.56, 101.43, and 102.14.  To the downside, we see supports of 98.56, 97.98, 97.11, 96.33, and 95.58.  The 100 level serves as a key psychological barrier with 95 acting as a psychological cushion.  The USD/JPY is currently exchanging at 98.68.

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

For the year thus far, the S&P 500 index is in positive territory. With this news the price of Crude Oil has also risen to its yearly high. However, the added buoyancy is hurting the Dollar as traders are taking on greater risk with higher yielding currencies and swapping out their safe-haven investments.

Economic News

USD – Rising Stocks and Housing Data Hurt the Dollar

The Dollar continued its upward correction as a rise in stock markets and better than anticipated economic data fueled further risk-taking in the forex market. The EUR/USD was under pressure during trading hours in Japan and Europe, falling throughout the day. However, the pair failed to break a key support line at 1.3200 and reversed course. Driving this appreciation of the pair were gains in equity markets. The Dow Jones Industrial Average finished the day up 2.61%. Adding further to risk appetite in the market was the release of better U.S. Pending Home Sales data. The release came in surprisingly high, contributing to the sell-off of the Dollar.

Prices could have been exaggerated earlier in the day as liquidity was light due to Japanese markets being closed for “Golden Week”. We may expect further weakness in the Dollar’s crosses as expectations abound to the easing of the global economic recession. This may be seen extensively against currencies linked to commodity prices such as the Aussie Dollar (AUD) and New Zealand Dollar (NZD).

Two major events are on tap for today’s trading. The Institute for Supply Management (ISM) will release its Non-Manufacturing PMI report. This indicator is a key gauge of economic activity and expansion. The reading is expected to show moderate improvement from the previous month’s release. A second event will be testimony from Federal Reserve Chairman Ben Bernanke on the economic outlook before the Joint Economic Committee of Congress. His comments may hint at an improving economic environment, which may in turn hurt the Dollar. We could see the EUR/USD test the 1.3600 resistance line today.

EUR – EUR Continues Bullish Correction

The EUR has risen the past 3 trading sessions against the Dollar. Yesterday was no different as European investors had reason to cheer as positive momentum was given by the Purchasing Manager’s Index reading. This release, along with gains in stock markets helped to boost the EUR against the major currency pairs. The EUR finished at $1.3376 from $1.3315. The EUR/JPY was higher at 132.10 from 131.35. Also the EUR/GBP finished stronger at 0.8945 from 0.8890.

The 16-nation currency has reason to be satisfied in recent days considering the sudden surge in foreign investment, largely due to uncertainty across the safe-haven spectrum. As traders look elsewhere for riskier investments, the Euro-Zone apparently ranks high on the list, and the EUR and GBP appear to be reaping the rewards.

We may see higher-than-average volatility for EUR pairs as traders position themselves over the next few days for the European Central Bank’s (ECB) Interest Rate decision. The market will be looking for not only a 25 point basis rate cut, but also for a quantitative easing program. This would be enacted similar to the program undertaken by the U.S. Federal Reserve to purchase long-term government securities. A failure by the ECB to enact such a program could send the EUR sharply lower against the Dollar.

JPY – Yen Hits 3-Week Low vs. EUR

The Yen has reached a 3-week low against the EUR amid speculation the global recession is easing. The upcoming release of U.S. stress tests is also a negative for the Yen. This has traders dumping the Japanese Yen in favor of riskier, higher yielding currencies. Against the Dollar, the Yen has reversed a bit from its bullish run of the past week. Yesterday the USD/JPY finished the day at 98.80 from 99.45.

Trading during the Japanese session could have higher volatility due to the holiday which concludes Thursday. This time period could have prices pushed further than expected, and the Yen driven by events occurring outside the Japanese economy. Two key events that traders will need to be mindful of for the Yen will be release of U.S. bank stress test results on Thursday and U.S. Non-Payrolls on Friday.

Crude Oil – Crude Hits Yearly High

The price of Crude Oil hit its yearly high during yesterday’s trading as gains in equity markets and heightened optimism helped rally the commodity’s price. An improvement in the global economy will help to boost the demand for energy consumption, adding to the price of Crude Oil. The S&P 500 finished the day in positive territory for the current year, and the weakness of the Dollar has helped to support Crude prices. The price of Crude Oil closed yesterday at $54.00 from $53.20.

Further consensus that the economy is set for a rebound may continue to support the price of Crude Oil. During today’s trading we could see a slight pullback below the $54 mark as traders may be inclined to book profits. However, tomorrow’s Crude Oil Inventories report could send the price back above this level, perhaps breaking the $55 resistance line.

Technical News

EUR/USD

The bullish trend is losing its steam and the pair seems to be consolidating around the 1.3390 level. The 4-hour chart’s Slow Stochastic is showing a fresh bearish cross suggesting that a downwards correction might take place in the nearest time frame. When the downwards breach occurs, going short with tight stops appears to be a preferable strategy.

GBP/USD

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

USD/JPY

There is a fresh bullish cross forming on the 4-hour chart’s Slow Stochastic indicating a bullish correction might take place in the nearest future. The upward direction on the hourly chart’s Momentum oscillator also supports this notion. When the upward breach occurs, going long with tight stops could be a good choice today.

USD/CHF

The hourly chart is showing mixed signals with its RSI fluctuating in the neutral territory. However, there is a fresh bullish cross forming on the 4- hour chart’s Slow Stochastic, indicating a bullish correction might take place in the nearest future. When the upwards breach occurs, going long with tight stops may be a wise choice.

The Wild Card – Gold

Gold prices rose significantly in the last week and peaked at $903.75 an ounce. However, the 4-hour chart’s RSI is floating in the over-bought territory suggesting that the recent upwards trend is losing 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

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