Month: May 2009

By Fast Brokers

The EUR/USD rallied nicely yesterday, tagging along with impressive gains in U.S. equities.  The movement was a refreshing recovery for the EUR/USD since the currency pair had previously dropped below our 2nd tier downtrend line while hitting our previous bottom-end of 1.3422.  The upswing is cooling off today as yesterday’s movement lacked convincing volume and the S&P futures are struggling with previous May highs.  The EUR/USD is battling with May highs of its own, meaning it wouldn’t be surprising to see some near-term consolidation with slight downward pressure.  Furthermore, the fact that the EUR/USD didn’t rally strongly after much better than expected economic sentiment data shows the currency pair could be overbought.  On the other hand, if the EUR/USD and put some upward momentum together and get above previous may highs, we could witness a sizeable near-term pop towards the highly psychological 1.40 level.

Regardless of near-term obstacles, the EUR/USD is showing resilience above our 2nd tier downtrend line and the psychological 1.35 level.  Therefore, the EUR/USD is sending a clear bullish message trend-wise with key medium-term downtrend pressures out of the way.  As usual, the ultimate direction of the EUR/USD relies heavily upon U.S. equities.  The S&P futures staged quite a rally yesterday and are back above the psychological 900 level, making a convincing argument for the continuation of its uptrend.  Therefore, equities are performing in favor of the EUR/USD’s uptrend.  As a result, we maintain our bullish outlook on the EUR/USD as long as the currency pair can stay above our downtrend lines and the 1.35 psychological level.  However, the EUR/GBP is showing considerable downward pressure, indicating the Euro could continue to experience relative weakness over the medium-term.  The EU will be quiet on the news front until Wednesday’s German PPI where investors are looking for an improvement in producer prices.

Fundamentally, we find resistances of 1.3626, 1.3646, 1.3674, 1.3702, and 1.3735.  To the downside, we see supports of 1.3589, 1.3555, 1.3528, 1.3490, and 1.3467.  The 1.35 area serves as a psychological cushion with 1.40 acting as a psychological barrier.  The EUR/USD is currently exchanging at 1.3616.

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 continues its impressive climb on rising volume despite slightly worse than expected RPI and CPI data points.  The pricing numbers were only one basis point below analyst expectations, so the decline wasn’t too much of a surprise.  This was the first negative data release we’ve seen from Britain over the past month, and the momentum remains clearly to the upside.  The Cable is trading well above our downtrend line.  In fact, it’s becoming a non-factor, as is the key psychological 1.50 level.  The psychological 1.55 area becomes more of a relevant discussion at this point.  Speaking of 1.55, the GBP/USD is also trading near November 26 highs, indicating we could witness some near-term consolidation.  Near-term technical obstacles are in play for the EUR/USD as well with the S&P futures battling 900.  Hence, all three investment vehicles are sending the same message of near-term struggle with slight downward pressure.

The Cable has climbed above January ’09 highs.  The next two obstacles for the GBP/USD are the aforementioned November 26 highs followed by December 17 highs.  From here we could witness a nice pop towards our last resort downtrend line, which is off screen but sitting around 1.60 right now.  If the Cable can get on top of this downtrend line we could witness exciting near to medium-term gains.  However, we still have a ways to go.

We maintain our bullish outlook on the GBP/USD due to the overwhelmingly positive economic data surfacing from Britain over the past month.  We’ve seen improvements across the board, from employment to manufacturing to housing prices.  We’re witnessing the massive depreciation of the Dollar analysts have warned us about after America’s incredible liquidity measures.  However, as with the EUR/USD, the Cable’s ultimate performance is highly reliant upon U.S. equities.  Therefore, any collapse in the S&P could be accompanied by a depreciation of the Pound.  Fortunately for bulls, the S&P futures still have their upward momentum trend-wise.     Investors will be paying particularly close attention to British retail sales on Thursday followed by Revised GDP on Friday to make certain the data supports the positive numbers we’ve seen as of late.

Fundamentally, we find resistances of 1.5551, 1.5600, 1.5663, 1.5717, and 1.5794.  To the downside, we see supports of 1.5449, 1.5372, 1.5279, 1.5207, and 1.5134.  1.50 serves as a key psychological cushion with 1.55 acting as a psychological barrier. The GBP/USD is currently exchanging at 1.5492.

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 exercised its positive correlation with U.S. equities yesterday, popping nicely back above the psychological 95.00 level while avoiding our 1st tier uptrend line.  However, the currency pair is backing away from our 1st tier downtrend line as yesterday’s volume failed to impress.  Meanwhile, the USD/JPY remains lodged in its downtrend line while not participating in the recent surge of U.S. equities like the EUR/USD and GBP/USD.  Therefore, the USD/JPY is sending a message of continual relative weakness in the Japanese economy despite improvement in Core Machinery Orders, a forward looking economic indicator.  Investors will get a clearer picture later in Wednesday’s session with Japan announcing Prelim GDP.  Analysts are anticipating further deterioration in Japan’s GDP, and a surprise in either direction could certainly be a market mover as far as the USD/JPY is concerned.

We maintain our bearish outlook trend-wise on the USD/JPY due to the downward inclination of the currency pair technically and fundamentally.  The USD/JPY has failed to destroy the psychological 100 level on several attempts while dropping below all of our downtrend lines.  The USD/JPY is at the bottom of its right shoulder, meaning a critical juncture for the currency pair could be approaching with key economic data on the way.  March 18 lows and our 1st tier uptrend line are keys fundamentally.  If these don’t hold then we could witness accelerated losses.  On a positive note, our 1st tier uptrend line is intact with another possible uptrend line should this one be broken.  Therefore, if today’s Prelim GDP should come in better than expected and the S&P rally strongly above 900, we could see a fundamental turnaround in the USD/JPY.  However, the same difficult fundamental obstacles remain to the upside should any encouraging upswing occur, limiting near-term gains.

Fundamentally, we find resistances of 96.33, 97.32, 97.98, 98.67, and 99.20.  To the downside, we see supports of 95.58, 95.12, 94.50, 93.66, and 92.71.  The 100 level serves as a key psychological barrier with 95 acting as a psychological cushion.  The USD/JPY is currently exchanging at 96.10.

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.

U.S. housing starts and building permits decreased in April by more than expected while housing completions increased according to data released by the Commerce Department on new residential construction. Housing Starts decreased by 12.8 percent in April to a seasonally adjusted annual rate of 494,000 starts following a revised annual rate of 525,000 housing starts in March.  April’s data was below economic forecasts that were predicting a 523,000 annual housing starts pace. On an annual basis, housing starts are 54.2 percent lower than the April 2008 level.

Building permits statistics, used as a predictor of future construction, showed a seasonally adjusted annual rate of 494,000 permits in April which is a decline of 3.3 percent compared to March. April’s permits were also below forecasts expecting permits to number approximately 530,000 annually. On an annual basis, building permits are 50.2 percent lower than the April 2008 permit level.

Housing Completions for April increased when compared to March as completions rose to an annual rate of 874,000 privately-owned housing completions. This is an increase of 4.9 percent from the March completion totals. On an annual basis, housing completions are 15.0 percent below April 2008’s level.

US Dollar falls today in forex trading for second day.

The U.S. dollar has been weaker in forex trading today against most of the major currencies for the second day in a row as risk appetite has ticked up so far this week.  The dollar has declined today versus the euro, British pound, Australian dollar, Canadian dollar, Japanese yen, New Zealand dollar and the Swiss franc.

The euro has advanced versus the dollar today as the EUR/USD has gone from today’s 1.3570 opening exchange rate at 00:00 GMT to trading at approximately 1.3602 in the US trading session at 11:27pm EST according to currency data by Oanda.

The British pound has climbed today versus the American currency from 1.5335 to trading at 1.5503 dollars per pound. The dollar has fallen against the Japanese yen today as the USD/JPY has declined from its 96.43 opening to trading at 96.19.

The dollar has also fallen against the Canadian dollar after opening at 1.1634 earlier today to trading at 1.1570. Meanwhile, the USD has fallen  against the Swiss franc from 1.1142 to trading at 1.1116.

The Australian dollar has advanced versus the USD as the AUD/USD trades at 0.7751 after opening today at 0.7665 while the New Zealand dollar has also increased versus the USD and trades at 0.6030 after opening at the 0.5971 exchange rate.

AUD/USD Chart – The Australian dollar advancing sharply yesterday and today against the US Dollar in Forex Trading and is trading at its highest point versus the USD since October 2008.

Source: ForexYard

An increase in optimism led by a bullish stock market as well as positive comments made by U.S. Treasury Secretary Timothy Geithner yesterday led to an increased demand for riskier currencies. Expect a busy news day today, with important news coming from the U.S, Euro-Zone and Japan.

Economic News

USD – Dollar Declines as Stock Market Rallies

The Dollar declined against most of its currency pairs as the U.S. stock market rallied in yesterday’s trading. The rally was sparked by positive comments by U.S. Treasury Secretary Timothy Geithner in which he changed his views as he voiced his opposition against pay caps. He went further and stated that in the coming weeks there will be more big reforms in the U.S. financial system. Another factor that led to volatile Dollar trading and the bullish stock market was the intent of JP Morgan, Goldman Sachs and Morgan Stanley to repay the $45 billion that was lent to them through TARP (Treasury’s Troubled Assets Relief Program). The optimism also led to massive increases in shares including those of Citigroup and Bank of America.

The Dollar declined by a hundred pips versus the EUR to close at 1.3540. This comes as investors dropped the safe-haven USD, and returned some confidence to the EUR. The British Pound recorded an impressive 160 pip gain against the Dollar to close at 1.5305. This comes as the Dollar lost ground over the last several weeks against the British currency. The reason for this may be as the global bullish stock market rallies continue so does a weak USD. However, against the Japanese Yen, the USD gained 170 pips to close at 96.49. This rebound may be the result of a correction in the pair, and traders dropping the safe-haven Yen, as investors turn to riskier assets.

Looking ahead to today, much news is expected from the U.S. The 2 main events are the Building Permits and Housing Starts data that will both be released simultaneously at 12:30 GMT. The 2 results are interrelated, and are a strong indicator of a recovery of the U.S. property market. If results are positive, then we can expect much of the same behavior in the forex market as on Monday. On the other, hand gloomy data may lead to a stronger Dollar as investors return to the safe-haven currency and drop more risky assets.

EUR – EUR Soars Against Dollar

The EUR soared against the Dollar in Monday’s trading. This was largely due to a global stock market rally that was led by the U.S. The pattern of late is when stock markets are bullish the EUR climbs against the U.S. Dollar. Analysts continue to misread the market as they expect the Dollar to recover against the EUR to 1.2500 levels. However, this is unlikely to happen anytime soon. If the equity markets continue to rally in the coming weeks, then the EUR may continue to strengthen versus the USD. The EUR/USD behavior was also a surprise, as German Prelim GDP figures on Friday morning showed that the German economy declined by a massive 3.8%. Though, the EUR remains in some respects to be resilient.

The EUR/USD pair closed higher yesterday by 100 pips at 1.3540. The EUR/GBP pair finished Monday’s trading lower by 25 pips at 0.8841. This may be due to the Bank of England (BoE) revealing that it made profits of a billion Pounds, as it took advantage of the financial crisis over the past year. Against the JPY, the EUR ascended by a massive 300 pips as demand for the safe-haven Japanese Yen plummeted, as traders put their money into riskier, more volatile assets. It seems that over the coming week this pair may continue its correction higher.

Today, there are several important economic news events that are set to be released from Britain and the Euro-Zone. Britain is set to release the PPI and RPI figures at 8:30 GMT. The Euro-Zone is expected to release German ZEW Economic Sentiment and ZEW Economic Sentiment figures at 9:00 GMT. Negative figures may lead to bearish trading for both the EUR and GBP. However, positive results, may lead to a bullish GBP and EUR in Tuesday trading. This is likely to be compounded if it seems that British Prime Minister Gordon Brown produces optimism in Britain as he attempts to rescue her economy.

JPY – JPY Tumbles Against Dollar

The JPY tumbled against the Dollar in Monday’s trading, as traders dropped the ultra safe-haven Yen, and returned to the lesser safe-haven Dollar. This also marks a correction in the USD/JPY, as the pair tumbled in the past 2 weeks. The behavior was sparked by a stock market rally from the U.S. that was initiated by economic optimism in the U.S. economy. This soon led to bullish equity markets in other industrialized countries. This in turn led to traders to take more risks in yesterday’s trading. Japan’s government hopes for more of this as the country struggles to climb out of the economic recession, as the bullish JPY has helped prevent this.

The Yen slid 170 pips or nearly 2% against the Dollar to close at 96.49. The JPY declined by 420 pips versus the British Pound as traders ditched the safe-haven Yen for the cable. This helped reverse much of the losses that the Pound made against the JPY in last week’s trading. The JPY also declined by a breathtaking 340 pips against the EUR, as investors ditched the safe-haven currency, in order to diversify their portfolios. There are 2 important sets of data that will be released from Japan later today. These are the Prelim GDP and the Prelim GDP Price Index at 11:50 GMT respectively.

Crude Oil – Crude Oil Climbs 5%

The price of Crude Oil rose by an impressive $2.42 to $59.45 a barrel, or 5%. This is remarkable in a commodity that has recorded so much volatility as of late. Much of the price increase was spurred by a weak Dollar, and strong commodity and equity markets. The main way for Crude to continue this bullishness, is for investors to feel that there are increasing signs of a global economic recovery.

In recent weeks, it seems that the price of Crude has been stabilizing. This is partly owed to the production cuts that OPEC has made. The question now is will OPEC continue enacting production cuts over the next several months? If they do, then Oil prices may reach $65-$70 by the end of June. It’s also important to note that Crude prices can be used as a measure of economic health in the economy.

Technical News

EUR/USD

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

GBP/USD

The hourly chart is showing mixed signals with its Slow Stochastic fluctuating at the neutral territory. However, a bearish cross forming on the 4-hour chart’s Slow Stochastic implies that downwards correction might take place in the nearest time frame. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

USD/JPY

The typical range trading on the hourly chart continues. The daily chart Slow Stochastic is floating in neutral territory. However, the pair currently sits near the upper border of the 4-hour chart’s RSI, suggesting downward correction may be imminent. When the downwards 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

After a few days of sustained upward movement, the price of this commodity now appears to be floating in the over-bought territory on the RSI of the daily chart. There also appears to be fresh bearish crosses on the 4-hour chart’s Slow Stochastic, which signifies that forex traders may be capable of entering the impending downward correction at a great entry price by going short on this commodity today.

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.

Source: ForexYard

The dollar was slightly more volatile over the past week than usual, and the explanations for this have been getting trickier by the day. As for this week, forex traders are advised to take positions on trades, as a string of data releases coming out of Europe and Japan are likely to affect the greenback’s main currency crosses.

Economic News

USD – USD Rallies – Benefits from Safe-Haven Appeal

The USD has experienced a positive day of trading during the today’s early morning hours. Closing last Friday slightly up versus the majority of its currency pairs and crosses, the USD continued this bullishness and appears poised to maintain its recent momentum. Gaining against the EUR, the greenback is currently trading near the 1.3435 price level, and even climbing as high as 1.1240 against the Swiss Franc, a high not seen since 10 days ago.

As U.S. data illuminates the economy in a positive glow, large exporting countries like China have begun to purchase more and more U.S. Treasury Notes despite the various cautions for doing so. A number of negative results from the European economies, and even Canada last Friday, have pushed many investors into the safe-haven of the USD and JPY. Again, despite some warnings that the USD’s safe-haven is not as stable as many believe, traders continue to purchase the greenback for portfolio protection. Without a strong shock to forex trader confidence, this behavior will likely continue throughout the next few trading days.

With a severely lacking mix of indicators being released from the U.S. economy this week, the likely mover behind the forex market in the coming days appears to be the EUR. However, there does appear to be 2 indicators worth marking in your calendars. On Tuesday we are expecting the Building Permits report which may actually, for the first time in months, show that the housing sector is on the rebound. This could help the Dollar’s rally continue through to the second indicator due to be released on Thursday. The Unemployment Claims report on Thursday may be more important than most expect considering last month’s Non-Farm Payroll report indicated a sharper contraction in employment than most expected. This could prove to be USD-negative.

EUR – Euro-Zone Fundamentals Weak as GDP Shrinks

Across-the-board weakness may be the best way to describe the EUR’s activity in today’s early trading sessions. Losing strength to every major currency pair, the EUR is a little worse for wear. Dropping to 1.3435 against the USD, 127.30 against the JPY, and even as low as 0.8870 against the Pound Sterling, the 16-nation currency has been on the receiving end of negative news since last Friday’s GDP figures illustrated a larger regional contraction than most analysts had foreseen.

As was illustrated by the various reports from countries within the European Monetary Union (EMU), the national and regional economies throughout the Euro-Zone suffered a deeper economic contraction than was forecast, and the EUR is suffering the consequences. This growing weakness doesn’t seem to be abating either.

With a heavy news week ahead, the EUR will no doubt be steering this week’s forex market. However, most expectations are for a continuation of the recently poor showing of Euro-Zone fundamentals. The weakness in regional GDP means that the 16-nations of the EMU are struggling to produce the jobs, manufacturing, and industrial output to remain as competitive as is necessary. With French and German manufacturing and services data expected on Thursday, this week’s data has the potential to show that the Euro-Zone is indeed still within a deep recession and not yet on its way out. The other possibility is for a sudden surprise batch of news which shows the regional economy rebounding strongly, in which case the EUR may go bullish.

JPY – Yen Out-Performs Other Currencies

The Yen has out-performed all of its competitors in recent days. Regaining most of the strength lost in the previous few weeks, the JPY has now fought back to some of the highs not seen in months. Climbing to 94.80 versus the USD, a level not seen since mid-March, the Yen actually appears to have regained its safe-haven status. It also climbed to the 127.30 level against the EUR, a range not seen since late-April.

This week also appears to be an exciting news week for the JPY, a statement not often made by economic analysts in the forex market. With 2 large indicators due to be published, the Yen may actually be a driving force in this week’s market. On Tuesday, the Japanese Cabinet Office will release its preliminary GDP figures which are expected to show that the Japanese economy may have shrunk by 4.2% in the first quarter of 2009. Also due this week is a decision by the Bank of Japan (BoJ) on its short-term interest rates. As rates are still near 0%, a reduction seems unlikely. The information released by the BoJ, however, may give traders and indication of the future monetary policy decision to come.

Crude Oil – Has the Price of Oil Reached its Peak for 2009?

The price of Crude Oil in recent weeks has been on a steady bullish trend. However, last Friday this trend may have been breached with a downward correction resulting from a decline in stock markets. With regional stock markets declining since last Friday, market demand for oil has come under scrutiny. While the United States may have published a series of positive growth data, the Euro-Zone illuminated its continued weakness with low GDP figures. Mixed with poor performing markets, economic growth and energy demand seem higher than they should be.

Most analysts are now backtracking by stating that the uptrend in oil seen over the previous weeks was due to a surge in market optimism that saw stock markets soaring and the USD dropping. However, as markets inevitably correct themselves after optimism has run its course, true values return. The sad truth is that demand for Crude Oil is still at an all-time low, and some analysts are reducing their 2010 forecasts. If this keeps up, the current price of $57.00 a barrel may be a high point in the coming weeks.

Technical News

EUR/USD

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 appears to be preferable strategy.

GBP/USD

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.

USD/JPY

The hourly chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, the daily Chart’s RSI is already floating in the oversold territory indicating that a bullish correction might take place in the nearest future. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.

USD/CHF

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

The Wild Card – Gold

Gold prices rose significantly in the last week and peaked at $933 for an ounce. 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 depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3460 level and was capped around the US$ 1.3650 level.  Data released in the U.S. today saw April headline consumer price inflation unchanged m/m and off 0.7% y/y while the ex-food and energy component was up 0.3% m/m and 1.9% y/y.  The slide in year-over-year CPI was the largest decline in 54 years.  Also, April headline retail sales were off 0.4% m/m and off 10.1% y/y while the ex-autos component was off 0.5% m/m and 7.7% y/y.  Other data saw March business inventories off 1.0% m/m and 4.8% y/y while March business sales were off 1.6% m/m and 15.6% y/y.  Additionally, mid-May University of Michigan consumer sentiment improved to 67.9 from 65.1 in April. Moreover, it was reported that April industrial production was off 0.5% m/m while capacity utilization shrank to 69.1%.  In eurozone news, European Central Bank member Provopoulos pessimistically reported “…the exit from this most unfavorable international economic situation will be neither easy nor quick…Still substantial effort will be necessary given that the interest rate cuts have not been fully translated into lower borrowing rates for households and businesses.”  The ECB reported it is not currently prepared to accept government bonds from central and eastern European governments as collateral for refinancing operations.  Data released in the eurozone saw EMU-16 April consumer price inflation rise 0.4% m/m and 0.6% y/y while German Q1 GDP was off 3.8% q/q.  Moreover, EMU-16 GDP was off 2.5% q/q and 4.6% y/y.  Euro bids are cited around the US$ 1.2765 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥94.75 level and was capped around the ¥96.20 level.  The pair reached its lowest level since 20 March as risk aversion again ruled the market.  Data released in Japan overnight saw March core machinery orders off 1.3% m/m while the April domestic corporate goods price index was off 0.4% m/m and off 3.8% y/y.  Democratic Party of Japan finance spokesman Nakagawa reported the U.S. government should issue yen-denominated bonds, a policy that would see Japan continue to purchase U.S. assets but also weaken the greenback.  The Japanese media yesterday reported the government is likely to upgrade its assessment of the economy.  The Nikkei 225 yesterday stock index lost 2.64% today to close at ¥9,093.73.  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 offers around the ¥127.95 level and was capped around the ¥131.15 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥143.55 level while the Swiss franc moved higher vis-à-vis the yen and tested bids around the ¥84.50 level. In Chinese news, the U.S. dollar depreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8215 in the over-the-counter market, down from CNY 6.8250.

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 Eurozone Gross Domestic Product fell more than expected in the first quarter of 2009 according to a flash estimate released by Eurostat today. The 16-nation eurozone GDP declined by 2.5 percent in the January to March quarter following GDP contraction of 1.6 percent in the fourth quarter of 2008. The eurozone has been in recession since the third quarter of 2008 when GDP contracted by 0.2 percent for the second quarter in a row. On an annual basis, the first quarter GDP is 4.6 percent lower than the first quarter of 2008 following the fourth quarter’s 1.4 percent annual decline.

Today’s data surpassed economic forecasts that were expecting the GDP to decline by 2.0 percent and marked the largest GDP contraction on record for the eurozone.

Germany, the eurozone’s largest economy, saw a GDP decline of 3.8 percent in the first quarter following a revised GDP decline of 2.2 percent in the fourth quarter. France, the eurozone’s second largest economy, saw their economy decline in the first quarter as GDP decreased by 1.2 percent after posting a revised decline of 1.5 percent in the fourth quarter. Italy’s GDP declined by 2.4 percent in the first quarter after declining by 2.1 percent in the fourth quarter.

Other EU16 nation GDP declines were the Neatherlands (-2.8%), Spain (-1.8%), Austria (-2.8%) and Portugal (-1.5%). Cyprus, meanwhile, managed to show a flat GDP change for the quarter after growth of 0.5 percent in the fourth quarter of 2008.

Today’s flash estimate is followed up by two more revised GDP releases that are scheduled for release on June 3, 2009 and July 8, 2009.

Euro mixed in currency trading.

The currency markets today have seen the euro mixed in trading against most of the other major currencies after the GDP release. The euro has fallen versus the U.S. dollar, British pound, Japanese yen and Canadian dollar while gaining against the Australian dollar, New Zealand dollar and Swiss franc.

The euro has declined against the US dollar as the EUR/USD trades at 1.3554 in the afternoon in the US session at 12:28pm EST after opening the day at 1.3636.

The euro has fallen against the British pound as the EUR/GBP trades at 0.8898 after opening at 0.8952. The euro has slid today versus the Japanese yen as the EUR/JPY trades at 128.77 after the 130.91 opening. The euro has also declined versus the Canadian dollar as the EUR/CAD trades at 1.5922 after opening at 1.5971.

The euro has advanced versus the Australian and New Zealand dollars as the EUR/AUD trades at 1.7988 from 1.7965 and the EUR/NZD trades at 2.3056 from the 2.3027 opening. Against the Swiss franc, the euro has gained ground today as the EUR/CHF has advanced from 1.5066 to trading at 1.5113.

EUR/USD Chart – The Euro falling against the US Dollar today in Currency Trading and trading below the 100-period simple moving average in blue on the hourly chart.

By Forex Brokers

Gold continues to climb north while locking in a positive correlation with U.S. equities. The precious metal is enjoying gains and only partially participating in pullbacks. Volume is falling off, implying the present rally could experience a peak and consequential pullback in the near-term. However, the uptrend seems to be in the driver’s seat and this could continue to be the case until our downtrend line and/or the psychological $950/oz barrier. Meanwhile, gold is building up a solid base above the critical $900/oz psychological level. As a result, any near-term weakness has several lines of defense ready to act. Therefore, we have a bullish outlook for the near-term.
Meanwhile, the precious metal continues to exhibit odd behavior, including a positive correlation with equities. Perhaps gold is thriving off of rising oil and signs of inflation. We’re seeing a positive reaction to a higher than expected Core CPI from the U.S. coupled with a higher than expected headline CPI from the EU. Additionally, we may be witnessing further diversification of China’s reserves from the Dollar into gold, reducing supply and raising price.
Fundamentally, we maintain resistances of $933.40/oz, $940.04/oz, $943.18/oz, $947.81/oz, and $951.34/oz. To the downside we hold supports of $923.07/oz, $918.43/oz, $911.55/oz, $908.39/oz, and $902.12/oz. Gold is currently trading at $929.85/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.

By Fast Brokers

The EUR/USD sold off earlier today after German Prelim GDP and EU Flash GDP came in well below analyst expectations with downward revisions to their previous releases. The negative GDP data dampens optimism a bit and creates an air of caution while placing further downward pressure on the EUR/USD. On an encouraging note, today’s pullback comes on declining volume. Investors entered to support price once it approached 1.35 for the 2nd time in as many days. The stabilization comes after the U.S. reported better than expected economic data all around. The defense of 1.35 shows investors aren’t willing to give into the downtrend so easily while the EUR/USD pops off of our 2nd tier downtrend line. Meanwhile, our 3rd tier uptrend line and 2nd tier downtrend lines are approaching an inflection point, meaning the consolidation could end shortly. Unfortunately, the near-term momentum is still in favor of the downside due the disappointing EU economic data coupled with what some analysts deem overvalued U.S. equities. The EUR/GBP is under some downward pressure, further emphasizing the relative weakness of the Euro.
One week after the ECB acted in rare unison to lower rates and purchase covered bonds, several governors have gone public with their discontent and seem defiant to avoid diving head first into quantitative easing. The return of instability in the ECB could cap any gains in correlation with U.S. equities since investors dislike uncertainty concerning future monetary policy. However, we’ve seen Britain’s quantitative easing policy have a positive impact on the Pound since the program’s inception. Therefore, investors may not be concerned of negative near-term downward pressure on the EUR/USD if the ECB does decide to expand its present alternative liquidity operation.
We suggest investors continue to keep a close eye on 1.35. For if this psychological cushion is pushed aside, we could see a sharp, near-term selloff towards 3/25 lows. On the flipside, if U.S. equities rally off of the positive economic data and the EUR/USD manages to participate hand in hand, watch for March highs. If March highs are conquered, we could see a nice, near-term pop. We maintain our bullish outlook trend wise unless 1.35 is taken out.
Fundamentally, we find resistances of 1.3579, 1.3604, 1.3639, 1.3659, and 1.3701. To the downside, we see supports of 1.3554, 1.3552, 1.3497, 1.3459, and 1.3416. The psychological cushion sits at 1.35 with a psychological barrier waiting above at 1.40. The EUR/USD is currently exchanging at 1.3582.

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.