Month: May 2009

By Fast Brokers

The USD/JPY continues to struggle, heading beneath our 1st tier downtrend line. The currency pair briefly traded below the psychological 95.00 level today, but bulls quickly came to the rescue. However, the fact that the USD/JPY dipped below our 1st tier uptrend line is a negative sign for the near-term. At least we haven’t seen a high volume selloff and volume seems to be on the decline. Therefore, we could see a temporary bottom soon, likely above March 19 lows. On the other hand, we could see an accelerated movement to the downside if March 19 lows don’t hold. Fortunately for optimists, these lows are still fairly out of reach, leaving the possibility of a near-term turnaround in the mix. Hence, the next few trading sessions could prove to be critical to the USD/JPY’s uptrend.
The USD/JPY has been trending lower the last week as analysts caution of overbought conditions in U.S. equity markets. The currency pair seems to be under more downward pressure than the S&P futures, possibly indicating an oncoming selloff in U.S. equities. On the other hand, with the Carry Trade mute, investors could be hinting at a recovery in the U.S. economy with the Japanese economy lagging behind. Either way, the momentum remains to the downside in the USD/JPY for the near-term, and we’ll have to see a reversal to the upside on sizable volume for the currency pair to change course. That being said, the medium-term outlook is still bullish unless the aforementioned supports collapse.
The resilience of the USD/JPY’s uptrend will likely be determined by U.S. equities. Are we witnessing profit taking in equities, or are U.S. markets in for a second round of pain? The currency pair is getting close to testing its limits and it will be interesting to see how the USD/JPY holds up over the next few trading sessions.
Fundamentally, we find supports of 95.04, 94.83, 94.50, 94.14, and 93.89. To the topside we see resistances of 95.40, 95.69, 96.05, 96.37, and 96.66. The USD/JPY is currently exchanging at 95.30.

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

Oil prices reached over $59.50 a barrel yesterday, an increase of a whopping 4%. It seems that the OPEC production cuts have worked. Traders should also take into account that the Crude prices were also fueled yesterday by bullish stock markets and a weak Dollar. The price of Crude Oil is only likely to increase further today if the U.S. and Euro-Zone continue to show optimism, and the Dollar continues its bearish run.

Economic News

USD – Dollar Plummets on Jobless Claims Data

The U.S. Dollar plummeted considerably versus its major rivals on Thursday. This was amid uncertainty about the economic outlook, buoyed by modest safe-haven flows. The Dollar dived against the EU after a report showing U.S. jobless claims rose last week more than analysts originally forecasted. However, the U.S. and global stock markets made gains yesterday.

The USD fell by over 80 pips to 1.3634 against the EUR yesterday, after appreciating earlier to $1.3531, the strongest level since May 8. The Dollar also declined against the GBP by 110 pips to close at 1.5229. The U.S. currency, however, increased against the JPY to 95.99 Yen from a 95.47 opening. The Dollar has weakened in the past 3 weeks, falling to $1.3634 per EUR from $1.2886 on April 22, while the Standard & Poor’s 500 Index reached its high for the year and Treasury yields rose amid an increase in risk appetite among investors.

The U.S. Dollar may appreciate further against the EUR after the 16-nation currency was unable to break above $1.3700 amid an increase in U.S. stocks. Stock markets remain a key driver of currencies, and their rise in yesterday’s trading was clearly reflected in the bearishness of the Dollar, analysts said. Market players will be watching a heavy round of U.S. economic data on Friday, including April consumer price inflation, the University of Michigan consumer confidence survey.

EUR – The Euro-Zone Goes Defensive on ECB Policy Concerns

The EUR held on to gains made on Thursday against the greenback keeping within sight of recent highs made as optimism has grown that the worst of the global economic crisis may be over. The European currency, which hit a 7 week high at $1.3722 this week, was a shade softer at $1.3624 in early trading on Friday.

Against the Yen, the EUR headed for its first gain in 3 days on speculation the European Central Bank (ECB) will take additional steps to keep down borrowing costs, possibly increasing demand for the currency. The EUR/JPY currency pair finished trading at 130.92 Yen from 129.42 Yen yesterday. Traders now wonder if the EUR can extend this 1 day gain against the JPY.

The market offered limited initial reaction to comments by members of the European Central Bank Governing Council, who on Thursday stated the ECB’s key rate may eventually approach zero. Some analysts said recent comments from the ECB underlined disagreement between policymakers regarding how much lower Interest Rates can fall, and if this disagreement continues the result may be a bearish EUR in the medium-term.

The Pound Sterling remained under pressure after the Bank of England (BoE) said on Wednesday that it expected British inflation and the economy to recover more slowly than previously forecast. The Pound made impressive gains against the Dollar on Thursday to finish higher by over 100 pips at 1.5229. Today, investors have their eye on German Prelim GDP figures at 6.00 GMT, as this is likely to lead to volatility in the EUR/GBP cross.

JPY – The Yen Declines vs. the USD as Stocks Rebound

The Yen fell against the EUR for the first time in 4 days as a gain in stocks encouraged investors to buy higher-yielding assets funded with Japan’s currency.
The JPY declined by over 1% against the EUR to 130.92 from 129.42 yesterday .The Yen also weakened earlier 1% against the Dollar to 95.99, because of selling to protect options that would become worthless should Japan’s currency rise further, according to analysts.

The Yen may reverse this year’s decline against the Dollar as Japan’s currency succeeds the greenback as the best refuge from the financial crisis. The Japanese currency may appreciate to 92 yen by the end of the year as the link between the greenback and risk aversion deteriorates. As for today, forex traders are advised to follow the U.S. Core CPI data release at 12.30 GMT, as the results of this are highly likely to determine USD/JPY trading going into next week.

Crude Oil – Crude Rises Above $59 a Barrel

Crude Oil prices rose on Thursday, tracking a rebound on Wall Street, though a gloomy demand forecast from the International Energy Agency (IEA) limited gains.
Crude prices rose $2, or 4%, to settle at $59.53 a barrel. Oil prices continue to track equities markets as traders look to stocks for signs of an economic recovery that could lift ailing world fuel demand. The other factor that helped Oil prices yesterday was the weak Dollar, directly leading to a bullish price of Oil.

The 11 members of the Organization of Petroleum Exporting Countries (OPEC) bound by production targets implemented 77% of planned cuts of 4.2 million barrels a day in April, down from a revised 82% for March. The cartel next meets on May 28, and is unlikely to alter production limits if prices remain strong, Iraq’s oil minister said Thursday. The price of Crude may hit $65 by the end of the month if additional solid signs of an earlier-than-forecasted economic recovery become more apparent.

Technical News

EUR/USD

The bullish trend is loosing its steam and the pair seems to consolidate around the 1.3630 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

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.

USD/JPY

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

USD/CHF

The typical range trading on the hourly chart continues. The 4-hour chart RSI is floating in neutral territory. However, the pair currently sits near the bottom border of the daily chart’s RSI, suggesting an upward correction may be imminent. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.

The Wild Card – Crude Oil

Oil prices rose significantly in the last week and peaked at $59.50 per barrel. However, the daily charts’ 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 appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3665 level and was supported around the US$ 1.3525 level.  U.S. equity markets retraced some of yesterday’s losses, boosting economic sentiment and caused traders to chase higher-yielding currencies.  Data released in the U.S. today saw weekly initial jobless claims climb 32,000 last week to 637,000 while.  Also, April producer prices were up 0.3%, defying expectations of a 0.1% climb.  Some dealers believe all of the fiscal and monetary stimuli in the economy could engender a nasty bout of inflation and erode the value of the dollar.  The core producer price index was up +0.1%.  Continuing jobless claims were up 202,000 to 6.56 million, the highest level since at least 1967.  In eurozone news, many economic data will be released tomorrow including first quarter German and French gross domestic product data and eurozone consumer price inflation data.  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 ¥95.85 level and was supported around the ¥95.10 level.  Risk appetite returned to the market as traders moved into higher-yielding currencies.  The Japanese media reported the Cabinet Office is planning to upwardly revise its assessment of the economy later this month, possibly noting the pace of deteriorating is moderating.  The government may report the economy has bottomed out and would represent the government’s first upward revision since February 2006.   Last month’s report indicated “The economy is worsening rapidly and is in a severe situation.  The pace of worsening is expected to moderate as inventory adjustment progresses.”  Earlier this month, it was reported industrial production evidenced its first monthly increase in six months.  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 higher vis-à-vis the yen as the single currency tested offers around the ¥130.90 level and was supported around the ¥128.85 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥146.15 level while the Swiss franc moved higher vis-à-vis the yen and tested bids around the ¥86.90 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8250 in the over-the-counter market, up from CNY 6.8225.

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 Fast Brokers

EUR/USD

The EUR/USD is stabilizing after dipping below 5/11 lows yesterday. Wednesday’s pullback came on sizeable volume, yet we wouldn’t consider it a significant movement. The EUR/USD has managed to steer clear of the psychological 1.35 level with its upward momentum intact. On a cautionary note, the currency pair has dropped beneath our 1st tier downtrend and failed to eclipse March highs on 5/13. Therefore, we wouldn’t be surprised to see a near-term struggle as the S&P battles 900.
Investors are eagerly anticipating data releases from the EU tomorrow since the region has been relatively quiet on the economic news front lately. The EU will release German and French Prelim GDP, EU Flash GDP, and CPI. The U.S. will also release CPI data of its own along with manufacturing data. Therefore, we expect volatility to pick up tomorrow.
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 gains in the EUR/USD 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.
If tomorrow’s data releases disappoint analysts and investors, keep an 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 the news is better than expected and investors react positively, 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 1.3639, 1.3659, 1.3701, 1.3737, and 1.3776. To the downside, we see supports of 1.3604, 1.3579, 1.3554, 1.3522, and 1.3497. The psychological cushion sits at 1.35 with a psychological barrier waiting above at 1.40. The EUR/USD is currently exchanging at 1.3624.

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

GBP/USD

The Cable is settling after yesterday’s selloff in reaction to disappointing retail sales data from the U.S.  The pullback came on pretty large volume, so we could see a continued near-tem downturn with a retest of 1.50.  However, the bull trend in the Cable is still in control since any foreseeable downtrend line remains far beneath present price.  Additionally, the economic data from Britain continues to come in positively, including Tuesday’s key Manufacturing Production and CCC releases.  The CCC number was very encouraging since it beat analyst expectations by a long shot for the second straight month.  Therefore, Britain’s employment market seems to be improving with the CCC on a downward slope.  However, the CCC number is still at historically elevated levels, and analysts shouldn’t get too comfortable until it reaches the 15k area.  Regardless, we’ve witnessed improvements in British economic data across the spectrum over the past month, giving the Pound relative strength with little reason to change our bullish outlook trend wise.

Attention will turn on the U.S. and EU for the remainder of the week as both countries release CPI data while the EU provides GDP numbers.  The S&P has dipped back below 900, signifying a near-term struggle to the upside.  We expect the GBP/USD to fall in line with its positive correlation with the EUR/USD and S&P futures over the next 48 hours while exhibiting its relative strength.  Keep an eye out for 1.50 to the downside, for if this psychological level doesn’t hold we could see the pullback pick up speed.  To the topside May and January highs serve as the key fundamental battlegrounds restricting excited gains.

Fundamentally, we find resistances of 1.5241, 1.5277, 1.5310, 1.5389, and 1.5465.  To the downside we see supports of 1.5190, 1.5109, 1.5065, 1.5000, and 1.4940.  The GBP/USD is currently exchanging at 1.5208.

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

USD/JPY

We saw the sizeable selloff in the USD/JPY after the currency pair dropped beneath April lows, dipping down to the psychological 95 level on rising volume. The USD/JPY has been trending lower the last week as analysts caution of overbought conditions in U.S. equity markets. We see the positive correlation taking hold of the currency pair as the S&P futures got knocked beneath their psychological 900 level. The key now for the USD/JPY will be staying above the bottom of its left shoulder, or 3/19 lows. These levels are still a comfortable distance away, so investors shouldn’t panic yet.
The resilience of the USD/JPY’s uptrend will likely be determined by U.S. equities. Are we witnessing profit taking in equities, or are U.S. markets in for a second round of pain? Since we have no reason to alter our bullish outlook on the S&P for now, the upward trend in the USD/JPY is still safe. However, the currency pair is getting close to testing its limits and it will be interesting to see how the USD/JPY holds up over the next few trading sessions.
The near-term fundamentals are a bit disconcerting, and investors should keep a close eye on any future downward movements accompanied by large volume. 95.00 should serve as a key psychological cushion for the time being, and if it fails to hold we could see a quick drop towards 94.50. Our 1st tier uptrend line is waiting to defend just below and we could always form additional uptrend lines if need be. Therefore, there are uptrend defense waiting in the wings should the pullback worsen.
Fundamentally, we find supports of 95.33, 95.04, 94.50, 94.14, and 93.89. To the topside we see resistances of 95.69, 96.05, 96.37, 96.66., and 96.95. The USD/JPY is currently exchanging at 95.54.

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 Elliott Wave International

This video features Elliott Wave International Senior Currency Analyst, Jim Martens, using Elliott wave analysis to forecast the U.S. dollar’s near-term moves.

Now through May 20, you can access all of Elliott Wave International’s intraday and end-of-day Forex forecasts completely free. Access EWI’s FreeWeek.

Source: ForexYard

Today the U.S. economy is going to be in the driver’s seat of today’s market, whilst the Euro-Zone currency will take more of a backseat. Traders should pay close attention to the U.S. unemployment data and President Obama’s economic reforms, as these 2 factors are expected to have the biggest impact on the optimism in the market in today’s trading.

Economic News

USD – Lowered Risk Appetite Drives USD Higher

After Monday’s surprising plummet, the USD appears to be regaining a level of its previous strength. Dropping as low as 1.3720 against the EUR and 1.5350 against the GBP, the greenback has gone on a modestly bullish run as of yesterday. The only currency which appears to be outpacing the Dollar lately is the Japanese Yen, rising to as high as 95.15 against the American currency.

The question most traders are now asking is whether or not this bullishness will continue. Yesterday’s trading behavior for the U.S. Dollar may have been heavily influenced by the negative retail sales figures which were released at 12:30 GMT and showed that sales from retail stores across the U.S. dropped by 0.4%, slightly lower than many were expecting. The negative data likely pushed investors away from riskier investments and back into USD-long positions to secure their portfolios from decreased risk appetite. Whether this trend will continue, on the other hand, is entirely dependent on today’s news releases.

Expected for today are a number of reports which do not typically carry a high impact on the USD except for two. The first is the Producer Price Index (PPI) due to be released at 12:30 GMT today. This is a consumer inflationary gauge which measures the prices which producers are paying to finish their goods. Higher prices paid by producers are typically passed on to consumers through price mark-ups; as such, this indicator has an inverse relationship with consumer spending. The second important indicator is the weekly Unemployment Claims report which is forecast to show that unemployment has continued to rise since last month. If these reports show negative results we could see a continuation of the USD’s recent bullishness. A target of 1.3300 against the EUR may not be too unfounded.

EUR – EUR Plummets from Sudden Risk Aversion

The EUR apparently faced a rough day of trading yesterday as it depreciated against all of its currency rivals. The USD and JPY both made significant gains against the 16-nation currency as they moved up towards the 1.3550 and 129.40 price level, respectively. If risk aversion continues to gain momentum, the EUR could see a continuation to its recent downtrend.

It’s no mystery these days that the EUR typically does not perform well while economic figures come out worse than forecasted. Generally a rise in risk appetite, which stems from positive economic news, pushes traders away from the safe-havens of the USD and JPY and into riskier investments, such as those in Europe. However, yesterday’s negative news cycle proved once more that the world economy is not yet out of the dark.

Despite inspiring signals that we may be witnessing the bottoming out of this recession, occasionally the market wakes us back up to the reality of the situation. Yesterday was just such a day. US retail sales and business inventories showed a slight dip, and European data failed to add any positive news on top of that. As such, investors pulled away from riskier investments and jumped back into the USD and JPY en masse; hence the sudden turnaround from Monday.

Traders shouldn’t anticipate many positive signals to emerge from the Euro-Zone today considering most economic indicators about European GDP were pushed back to Friday. Today will be a relatively light news day for the Euro-Zone and the U.S. economy is going to be in the driver’s seat of today’s market. Traders should pay close attention to the U.S. unemployment data as it will likely have the biggest impact on the optimism in the market.

JPY – Yen Gains on Poor Economic Outlook

As an apparent safe-haven these recent months, the JPY has begun to strengthen once again due to risk aversion. Climbing to as high as 95.15 against the USD and 129.40 against the EUR, the Yen has performed surprisingly well these past 24 hours. As economic reports from the United States prove that the recession and economic downturn has not yet finished, traders yesterday began to exit their high-yielding investments in exchange for safe-haven assets, such as the JPY. The question is whether this bullish trend will continue.

As Japan maintains a quiet approach to economic indicators, the Japanese economy typically does not lead the market or make much of an impact on trading behavior. However, the JPY does act as a type of safe-haven during economic downturns, as has already been mentioned, and since negative reports were seen across the board yesterday, the JPY appreciated. If today’s indicators, such as U.S. Unemployment Claims and Japanese Core Machinery Orders turn out to be worse than forecasted, the JPY’s recent uptrend may continue throughout the day. Traders should keep an eye on the economic calendar today to gauge the impending direction for the island currency.

Crude Oil – Oil Plummets after Demand Expectations Flounder

After failing to breach the $60 mark twice this week, the price of Crude Oil unexpectedly dropped during yesterday’s trading. Due to a sudden drop in Oil imports, the price of Light Sweet Crude plummeted to just under $58 a barrel after peaking at $60.04 on Monday, the highest it’s been since November.

According to economic analysts, two factors played an important role in the price of Oil these past days. The decreasing strength of the U.S. Dollar no doubt generated a moderate bullish run in the price of Crude Oil as market optimism reigned supreme. This optimism generated a perception of economic growth and the belief that demand for Oil would increase in the near future. However, when the demand side didn’t materialize, the positive euphoria vanished and prices dropped to reflect their true value. As such, we may see a continuation in the bearish movement of the price of Crude Oil in the coming hours, but if optimism returns, the upward movement may continue.

Technical News

EUR/USD

There appears to be a fresh bearish cross on the daily chart’s Slow Stochastic, signaling that the long-term trend of this pair may continue downwards. However, a bullish cross appears to be forming on the 4-hour chart’s Slow Stochastic which indicates that today’s movement may be bullish. Riding the upward movement and then selling at the pivot point of the swing may be a wise choice today.

GBP/USD

After yesterday’s sharp downward movement, the price of this pair may be searching for a new range. Most oscillators are indicating neutrality. However, the Slow Stochastic on the 4-hour chart shows an impending bullish cross forming. Once the recent movement bottoms-out, going long with tight stops might be a good strategy.

USD/JPY

The sustained downward movement of this pair has pushed the price into the over-sold territory on the RSI of the hourly and 4-hour charts, indicating upward pressure. The fresh bullish cross on the 4-hour chart’s Slow Stochastic supports this notion. Going long might be wise today.

USD/CHF

The Bollinger Bands on the 4-hour chart appear to be tightening in expectation of a sharp movement later today. As the price is riding along the upper border of these Bollinger Bands, and with an impending bearish cross on the 4-hour chart’s Slow Stochastic, the impending volatile movement may be downwards. Going short might be a wise choice today.

The Wild Card – EUR/JPY

The continuous downward movement of this pair has resulted in the price floating in the over-sold territory of the hourly and 4-hour charts’ RSI. The 4-hour chart’s Slow Stochastic also illustrates a recent bullish cross. All of these indications point in the direction of an impending bullish correction. Once the upward swing occurs, forex traders will have a great opportunity to enter the new trend at a fantastic entry price.

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.

€

The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3565 level and was capped around the US$ 1.3720 level.  Risk aversion returned to the markets as traders discounted recent economic improvements and challenged the view that the global banking sector is on the mend.  Data released in the U.S. today saw March business inventories decline 1.0% to US$ 1.401 trillion.  Additionally, April retail sales were off more than expected at -0.4%, underscoring the tenuous condition of final private demand.  The ex-autos component was off 0.5% and the decrease in spending represented the eighth decline in ten months.  Other data saw April import prices climb 1.6% m/m and decline 16.3% y/y.  In eurozone news, German finance minister Steinbrueck said Germany is “surprised” by the European Commission’s plan to possibly conduct stress tests on banks.  Data released in the eurozone today saw EMU-16 industrial production decline to a new record low in March, off 2.0% m/m and 20.2% y/y.  Additionally, France reported its annual inflation rate rose 0.1% y/y in April, its lowest level in more than 50 years.  European Central Bank member Weber cautioned that German and eurozone price inflation data may produce negative readings this month and remain there throughout the summer.  Regarding the financial markets, he added “What we’ve seen in financial markets over the recent months is some return of confidence. I think that is something that is very important.  Now people are back to evaluating risk, there’s a lot more reasonable risk appetite. We’re not yet back to a period where risk is again viewed in such a way that I would fear an underpricing of risk any time soon, but some reemergence of risk appetite is there.”  Euro bids are cited around the US$ 1.2765 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥95.15 level and was capped around the ¥96.70 level.  Risk aversion returned to the markets today as traders lack confidence that a sustainable rally is afoot in the financial markets.  Data released in Japan overnight saw April corporate bankruptcy cases up 15.4% y/y while the March current account surplus was off 48.8% y/y at ¥1.486 trillion.  Moreover, the March trade balance was off 89.3% y/y and April bank lending was up 3.0%.   Additionally, it was reported that Japan’s historically-strong trade deficit withered in April, printing at -¥201.52 billion the first twenty days of the month.  The Nikkei 225 yesterday stock index climbed 0.45% today to close at ¥9,340.49.  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 ¥129.35 level and was capped around the ¥132.40 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥144.15 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥85.95 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8225 in the over-the-counter market, up from CNY 6.8215.

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

We would like to alert forex traders that Elliott Wave International is offering free access to their popular forex service starting today (May 13th). The service features intraday and end-of-day Forex forecasts with charts of the currency pairs and will be open to non-subscribers until Wednesday, May 20th.

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Founded in 1979 by Robert R. Prechter Jr., Elliott Wave International (EWI) is the world’s largest market forecasting firm. Its staff of full-time analysts provides 24-hour-a-day market analysis to institutional and private investors around the world.