Month: May 2009

Source: ForexYard

Today, traders should pay close attention to the release of the U.S. Non-Farm Employment Change report. This indicator always provides for extreme market volatility in the major currency pairs. Traders may find good opportunities to enter the market following this vital announcement at 12:30 GMT.

Economic News

USD – Dollar Slides Against the EUR

The Dollar recorded some mixed results in yesterday’s trading. However, the most notable result was the slide vs. the EUR. The Dollar’s trading was dominated by a number of factors throughout the trading day. Earlier on, Thursday was dictated by poor, but slightly better-than-expected Unemployment Claims data that put downward pressure on the USD. This helped the Dollar tumble against the European currency for much of the day. This currency pair was also affected by the 25 basis points drop in EUR Interest Rates to 1%, which helped increase confidence in the EUR.

The factor that strongly affected the Dollar in late trading was the Stress Test, overseen by U.S. Federal Reserve Chairman Ben Bernanke. The conclusion of the Stress Test was that 10 of the 19 U.S. banks would need to raise $75 billion Dollars in capital. This was in order to help convince investors about the sound financial system. The figure was less than many had expected, and helped the Dollar increase slightly in late trading. The currency market is likely to continue reacting to the finding in end of week trading.

The Dollar ended Thursday’s trading lower by 75 pips vs. the EUR to close at 1.3362. The USD did make some impressive gains against the JPY as it extended its 2 day winning streak against the Japanese currency to finish up 1% or 80 pips at 99.20. The USD also climbed against the British Pound by 120 pips to close at 1.4996, as the British stock market closed slightly higher. This comes as Britain keeps her Interest Rates unchanged at 0.5%. The question is can the Dollar extend its gains vs. the GBP as the weekend kicks in.

Looking ahead to today, there are several important news releases coming out of the U.S. These include the Non-Farm Employment Change and Unemployment Rate at 12.30 GMT. Better-than-expected results may help the Dollar recover some of yesterday’s losses against some of its crosses such as the EUR. On the other hand, if the results turn out to be in line with forecasts, then the Dollar may record a fairly bearish session in Friday’s trading.

EUR – EUR Surges Versus GBP

The EUR made a massive surge against the British Pound, as the Euro-Zone cut its Interest Rates by 25 basis points to 1%. This is the lowest in the Euro-Zone’s history. This is very important as this action put a notable boost into the EUR, as investors feel that the European Central Bank (ECB) under Jean-Claude Trichet is continuing to show flexibility. The European Currency was also boosted by impressive German Factory Orders figures that were released early on Thursday. These 2 factors provided such a boost that the EUR was able to strengthen throughout yesterday’s trading session.

The EUR eventually finished Thursday’s trading up 120 pips against the GBP to close at 0.8908. This was obviously driven by the EUR’s rate cut. Additionally, forex traders continue to fear Britain’s mounting negative finances. The EUR also made gains vs. the Dollar to close up 65 pips or 1.3362. This comes about as the U.S. releases poor economic data and the Bank Stress results. The EUR gained a massive 170 pips against the JPY, as investors confidence continued to pour back into the European currency throughout Thursday’s trading session.

As for today, there are a number of important economic data releases coming out of Britain and the Euro-Zone. These include the German Trade Balance throughout the day and the German Industrial Production figures at 10.00 GMT for the EUR. Britain is expected to release PPI Input and PPI Output figures at 8:30 GMT. The figures from Britain and the Euro-Zone are likely to set the pace for the strength of the Pound and the EUR throughout today’s trading. Expect high volatility as each data release is published.

JPY – JPY Tumbles Against Currency Rivals

The JPY tumbled against its major currency rivals in Thursday’s trading. The most dominant reasons for this were other factors apart from the Japanese economy. These external factors seem to be increasingly affecting JPY trading as of late. Despite major economic data releases on Wednesday, yesterday investors reacted to events coming out of the Atlantic. The reasons for this may also be that JPY investors continue to look for signs of global economic recovery. This is despite the bottoming out of the current economic slump in Japan.

The JPY fell against the USD by 80 pips to 99.20, recording its second day of losses against the U.S. currency. Against the EUR, the JPY slid 170 pips to 132.47 as investors poured into the EUR, as the Euro-Zone made a 25 basis point rate cut to 1%. However, the GBP/JPY rate was down slightly, as Britain’s economy continues to deteriorate. Today, expect some high volatility for the JPY, as Japan is absent from the forex calendar. Therefore, yet again, much of the movement of Japan’s currency will be largely influenced by external economic dynamics.

Crude Oil – Crude Oil Eyes $60

The price of Crude Oil hit as high as $58.55 before ending Thursday’s trading at $57.10. Oil closed up about 1% or 51 cents to close at the $57.12 level. Crude made the early gains due to inflation fears and the thought that the worst of the economic downturn is over. This was also helped by Wednesday’s lower-than-forecasted Crude Oil Inventories and impressive Construction Spending data from earlier in the week.

The price of Oil did however start to drop as the day went by as commodity traders started to fear tomorrow’s employment data figures that are due tomorrow from the U.S. If economic figures continue to show decent results from the developed nations, and investors feel that the global economy is continuing to recover, then expect Crude Oil to reach $65 a barrel by the end of next week’s trading session.

Technical News

EUR/USD

The bullish trend is loosing its steam and the pair seems to consolidate around the 1.3410 level. The pair currently sits near the upper border of the daily chart’s RSI, suggesting a downward correction may be imminent. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

GBP/USD

The 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 over-bought territory, suggesting a downward correction may be imminent. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

USD/JPY

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/CHF

The typical range trading on the hourly chart continues. The 4-hour chart Slow Stochastic 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 $57.50 per barrel. However, 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 moved higher vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3470 level and was supported around the US$ 1.3250 level.   The common currency darted higher for a couple of reasons.  First, traders have been already discounting the anticipated results of today’s U.S. banks’ stress tests results.  The common perception among market participants is that between seven and ten U.S. banks will be commanded to submit new capital raising plans to the U.S. Treasury by 8 June.  Citigroup, Bank of America, and Wells Fargo are the names most dealers associate with being undercapitalized ahead of the stress test results.  It is expected that banks will be asked to raise at least an additional US$ 65 billion in capital.  Second, the euro moved higher after the European Central Bank reported plans to purchase covered bonds in the market, its first foray into quantiative easing.  The ECB also reduced its main refinancing rate target by 25bps to 1.00%.  Traders reacted optimistically to the ECB’s plans on expectations that the global economic outlook is improving.  Data released in the U.S. today saw Q1 non-farm productivity climb 1.1% q/q and 1/1% y/y while unit labour costs were up 2.9% q/q and 2.9% y/y.  Also, weekly initial jobless claims were off 34,000 to 601,000, their lowest level since January, while continuing jobless claims rose 56,000 to 6.351 million, the highest level since at least 1967.  In eurozone news, German March manufacturing orders were up 3.3% m/m but they were off 26.7% y/y.  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 ¥99.75 level and was supported around the ¥98.25 level.  Japanese financial markets reopened overnight and risk appetite returned to the market ahead of the release of the U.S. banks’ stress tests results.  Japanese bank Mitsubishi UFJ Financial’s share price soared 15.8% while Sumitomo Mitsui Financial’s share prices escalated 12.3% following its announcement that it is purchasing Citigroup’s Japanese securities business. The Nikkei 225 yesterday stock index gained 4.55% to close at ¥9,385.70.  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 ¥133.55 level and was supported around the ¥130.70 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥148.30 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥88.10 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8220 in the over-the-counter market, up from CNY 6.8180.

₤

The British pound depreciated sharply vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.4940 level and was capped around the $1.5195 level.  Bank of England kept its official bank rate target unchanged at 0.50% today and will continue its program of asset purchases, increasing its size by ₤50 billion to ₤125 billion.  The timing of this announcement took many traders by surprise.  Most BoE-watchers believe the BoE does not want to reduce its main refinancing rate below 0.50%.  Cable bids are cited around the US$ 1.4735 level.  The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.8935 level and was supported around the ₤0.8765 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 European Central Bank cut its interest rate today to its lowest standing in the banks history and stated that the bank will begin buying bonds to help promote more credit flowing in the eurozone.  The ECB reduced its interest rate today by 25 basis points from 1.25 percent to 1.00 percent as expected by market forecasts. The ECB action today follows the rate reduction by 25 basis points at its last meeting on April 2nd and a 50 basis point cut on March 5th. The ECB has now slashed a total of 325 basis points off the interest rate since October 2008.

Jean-Claude Trichet, the President of the ECB, commented in his press statement today that, “Reflecting the impact of the financial market turmoil, economic activity continued to weaken in the euro area in the course of the first quarter of 2009, in parallel with the ongoing downturn in the world economy. This weakening in the first quarter appears to have been significantly more pronounced than projected in March. More recently, there have been some tentative signs in survey data of a stabilisation, albeit at very low levels. Overall, economic activity is likely to be very weak for the remainder of this year, before gradually recovering in the course of 2010.”

Trichet also announced that the ECB had decided to buy euro-denominated covered bonds of approximately €60 billion in an effort to provide more liquidity to the economy. The details of the plan are to be announced at the Governing Council meeting on June 4th.

Meanwhile, the Bank of England announced the decision to hold its interest rate at its lowest standing in history at 0.50 percent as widely expected. The BOE had last reduced its interest rate by 50 basis points on March 5th and also cut its rate by the same amount in each of January and February. The bank also announced today the decision to expand its quantitative easing program by an additional 50 billion pounds to a total of 125 billion pounds.

The BOE statement on the rate cut commented on the current economic environment, “The world economy remains in deep recession. Output has continued to contract and international trade has fallen precipitously. The global banking and financial system remains fragile despite further significant intervention by the authorities. In the United Kingdom, GDP fell sharply in the first quarter of 2009. But surveys at home and abroad show promising signs that the pace of decline has begun to moderate.”

The next BOE meeting is scheduled for June 6th.

Australian employment rises unexpectedly in April.

The Australian Labour force increased unexpectedly in April according to a report by the Australian Bureau of Statistics today.  Australian employment increased by a seasonally adjusted 27,300 workers in April after decreasing by a revised 37,200 in March.

April’s increase brings the total of employed workers to 10,771,600 while the number of unemployed workers decreased by 35,300 to a total of 614,600. Today’s jobs data surpassed market forecasts that were expecting employment to fall by approximately 25,000 workers for the month. The Australian unemployment rate fell by 0.3 percent to 5.4 percent in April. The rate decline also surpassed market forecasts that were expecting the unemployment rate to increase to 5.9 percent.

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By Fast Brokers

The EUR/USD is rallying strongly in reaction to today’s decision by the ECB.  Trichet announced the ECB is lowering its benchmark rate to 1%, in-line with analyst expectations.  In addition to the interest rate cut, the ECB has decided to move forward with quantitative easing-like measures.  The ECB will use roughly $80 billion to purchase Euro denominated bonds while extending maturities to 12 months.  The EUR/USD is reacting positively to quantitative easing, as we witnessed previously with the GBP/USD after the BOE launched its own quantitative easing operation.  Investors believe ‘alternative’ liquidity measures will help the EU economy recover more quickly while counterbalancing deflationary pressures.  Furthermore, it’s encouraging to see the ECB being a little more proactive after providing mixed opinions which heightened uncertainty.

We notice a pickup in volume on the EUR/USD’s up-bars as the currency pair retests May highs.  If the EUR/USD receives some strong volume to the upside over the next 4 hours, the momentum could be enough to send the currency pair beyond its present right shoulder.  Technically speaking, this could be a sign of a near-term breakout to the upside.  However, the EUR/USD may not be able to enjoy its upward momentum for too long since our two key barriers are approaching, 1.35 and our 3rd tier downtrend line.  Also, keep in mind the EUR/USD ultimately falls in line with its positive correlation with U.S. equities.  Therefore, if investors take profits in equities and sell on the news, the EUR/USD’s rally could cool as well.  On the other hand, if the currency pair can manage to climb over these barriers, particularly the downtrend line, near-term gains could really accelerate.  With the S&P futures breaking free of their own restraints, the correlations are playing in favor of a broad based depreciation of the Dollar.  We maintain our bullish outlook for the aforementioned reasons.

Fundamentally, we find resistances of 1.3442, 1.3474, 1.3497, 1.3536, and 1.3573.  To the downside, we see supports of 1.3420, 1.3389, 1.3359, 1.3322, and 1.3292.  The 1.30 area serves as a psychological cushion with 1.35 acting as a psychological barrier.  The EUR/USD is currently exchanging at 1.3413.

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 Pound is experienced relative weakness across the board after the BOE announced it will add $50 billion to its present quantitative easing operation to make a grand total of $125 billion.  While analysts expected the BOE to keep its benchmark rate unchanged at .50%, the additional funds for quantitative easing caught investors a bit off-guard.  Boosting quantitative easing could indicate that deflationary pressures are stronger than expected, meaning the British economy is still facing some unforeseen difficulties.  The Cable pulled back from its rally on strong volume in response to the news.

Despite today’s downturn, the Cable has found reliable support once again at 1.50, showing the bulls aren’t ready to call it quits.  The resilience of the GBP/USD stems from the consistent, positive economic data coming from Britain over the past two weeks.  Additionally, the S&P futures have seemingly broken free of their 900 psychological level, so the Cable is receiving help from its positive correlation with U.S. equities.  However, the large volume down-bar is disconcerting.  Therefore, if U.S. equities experience profit-taking today, the GBP/USD could be under substantial selling pressure.  The 1.50 level and our 3rd tier uptrend line with be key for the near-term.  Regardless of the present pullback, we maintain our bullish outlook on the GBP/USD given positive global economic data and the current strength of U.S. equities.

Fundamentally, we maintain resistances of 1.5059, 1.5114, 1.5158, 1.5213, and 1.5257.  To the downside, we hold 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 1.5051.

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 wrestle free of its right shoulder with the S&P running past 900.  While the USD/JPY has managed to stay above our 2nd tier uptrend line, the currency pair continues to have issues with our 3rd tier downtrend line.  The USD/JPY is exhibiting a textbook, upward sloping head and shoulders pattern, meaning it will need significant volume to climb past May highs towards the highly psychological 100 level.  100 remains a heavy burden on the bull trend, showing investors will need to be certain of an economic recovery if they are to send the USD/JPY beyond this level and 2009 highs.  That being said, our critical 5th tier downtrend line is slowly creeping towards present price.  If the USD/JPY can hold on and climb above the 5th tier, near-term gains could accelerate.  However, a lot can happen between now and then.  We maintain our positive outlook on the USD/JPY since the momentum remains to the upside while the currency pair only has a couple barriers standing between it and large gains.  Japan will release its monetary policy meeting minutes late in Thursday’s session, giving investors a peak at the BOJ’s view of the state of Japan’s economy.

Fundamentally, we maintain resistances of 99.20, 99.79, 100.56, and 101.43 with fresh top-end hanging at 102.14.  To the downside, we see supports of 98.67, 97.98, 97.32, 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 99.13.

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

The hottest news available in today’s market will no doubt be the interest rate decisions by the Bank of England (BoE) and the European Central Bank (ECB) today at 11:00 and 11:45 GMT, respectively. As interest rates are one of the primary tools used to value a nation’s currency, the impact of these announcements will likely push the GBP and EUR to new extremes in the minutes after they are announced. Today will be an important news-trading day for forex traders!

Economic News

USD – Dollar Tumbles against EUR and GBP

The U.S. Dollar fell against major currencies yesterday as gains in world stocks and a better-than-expected U.S. labor market report dampened the greenback’s safe-haven appeal. After yesterday, the USD fell against the EUR, pushing the oft-traded currency pair to 1.3320. The Dollar experienced similar behavior against the Pound and closed at 1.5123.

Companies in the U.S. cut fewer jobs in April, indicating the worst of the recession’s employment losses may have passed. Payrolls fell by an estimated 491,000 workers last month, less than analysts had forecast and the fewest since October. Stabilization in consumer spending following the worst slump in three decades is stoking expectations that the recession in the U.S. will end in the second half of the year.

In today’s trading, forex traders should focus on a number of important fundamental data coming from both the U.S and the Euro-Zone. We expect that these pairs may become highly volatile as the market awaits the U.S. labor market figures and Interest Rate decisions from the European Central Bank (ECB) and the Bank of England (BoE).

EUR – European Interest Rates on Tap

The EUR rose against the U.S. Dollar yesterday, but gains were capped ahead of the European Central Bank’s (ECB) policy meeting today when the central bank is expected to cut interest rates by a quarter percent to 1.00%. The central bank may also announce other monetary policy measures to stimulate lending and growth. The EUR gained against the USD as the pair closed at 1.3320.

Last month the ECB reduced its target rate to 1.25% in order to stabilize the economy. These days, Europe faces the most danger from debt reduction, depression, and deflation, and from their excessive debt and deleveraging. As a result, the ECB will likely cut its interest rates today while other governments embark on state-sponsored investment programs. The market will view the ECB action of a rate cut as a step to restore investor confidence, and to mitigate the economic fallout from the financial crisis.

Investors may look for the unusual price volatility to continue in the EUR/USD as the pair attempts to stabilize and find new support and resistance lines. Large price jumps such as these are not common place and present terrific opportunities to take advantage of the price swings for large profitable gains. If the rates are indeed cut, a target near 1.3000 wouldn’t be unreasonable for next week.

JPY – JPY Falls against Major Currencies

Yesterday the JPY saw bearish results against most of its major currency rivals. The JPY was predominantly influenced by the other major currencies’ behavior, however, as only one indicator was published from the Japanese economy. It appears lately as if the JPY is being motivated by outside factors more than by the Japanese economy.

Japan’s monetary base rose 8.2% in April from a year earlier. Current account deposits at the central bank soared 81.2% after jumping 69% in March. The Bank of Japan’s (BoJ) injection of large amounts of dollar-funds into money market operations amid the global credit crisis are a primary cause of this increase. It will be interesting to see how the local Japanese data will interact with equity market movement for the rest of the week in relation to the JPY’s recent behavior.

Crude Oil – Oil Prices Hit 6-Month High

Crude Oil was little changed after rising above $56 a barrel for the first time since November yesterday as a surprise drop in U.S. Crude Oil inventories, and a slowdown in private sector job losses in April, boosted hopes for a turnaround in the economy. Oil prices have risen to $56 from lows around $34 in January, driven higher by stronger equity markets and hopes that the economy may begin to pull out of recession soon.

Oil prices are higher primarily because they are supported by a weaker U.S. Dollar and more positive signs from economic data releases. Last week, U.S. consumer confidence rose; U.S. construction spending and pending home sales data also surprised on the upside, further supporting sentiment towards energy. If current trends continue, a price range above $60 won’t be far off for Crude Oil.

Technical News

EUR/USD

After an unusual period of price volatility, this pair now appears to be moderately calm with all oscillators showing neutrality. However, there may be a consolidation trend forming on the hourly and 4-hour charts. If the Bollinger Bands also begin to tighten over the next few hours we could see an intense volatile movement later today. Traders should wait for the breach and jump into the trend as early as possible.

GBP/USD

The sustained upward movement in this pair doesn’t seem to be receiving much resistance lately. Short-term oscillators still show the price in neutral territory. However, the daily chart’s RSI indicates that the pair is floating in the over-bought territory, and this chart’s Slow Stochastic displays a clear bearish cross. We may see a downward correction towards the end of this week. Waiting for the downward breach and then joining this movement might be a wise choice.

USD/JPY

This pair doesn’t seem to have a clear indication of where it’s heading lately. It has been trading in a consolidating range pattern building towards the price level of 98.50. As the Bollinger Bands on the hourly chart are beginning to tighten, the climax of this consolidation may be imminent. Traders should wait for the violent movement and join at the earliest possible price.

USD/CHF

This pair appears to be range-trading between 1.1400 and 1.1250 with no clear indication of direction. As the daily chart’s RSI shows this pair floating near the over-sold territory, there may be some upward pressure. Traders can make profit by buying on lows and selling on highs within the current range.

The Wild Card – GBP/CHF

The volatile upward movement this pair has witnessed lately has pushed the price into the over-bought territory on the hourly and 4-hour charts’ RSI, signaling a downward correction is overdue. The bearish cross on the daily chart’s Slow Stochastic, and the impending bearish cross on the 4-hour’s Slow Stochastic supports this notion. Forex traders can take advantage of this imminent downward movement by entering short positions at an excellent 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.

By Adam Hewison

Today we’re going to take a look at the gold market. While many traders have been frustrated with this market for the past several month, it has in fact performed quite well given the generally negative feeling for most markets.

While the printing press is going at full-tilt in the US and the fact that most people are not involved in the gold market at the present time, it occurs to us that this market could indeed be setting itself up for a nice rally.

In our new video, I explain in detail some key levels to watch for in the gold market. If these levels are broken then you definitely want to take a position in the direction of the major trend.

As always, this video is available with our compliments and there is no registration required.

See the new Gold Video here…

All the best,

Adam Hewison

President, INO.com
Co-creator, MarketClub

The ADP National Employment Report showed that U.S. private employment declined by less than was expected in April, potentially signaling a slowdown in deep job losses. April’s nonfarm private employment fell by 491,000 jobs according to the ADP report and marked the smallest employment decline in the past six months. Today’s employment figure follows the March revised decline of 708,000 jobs and surpassed market forecasts which were expecting a decline of 645,000 jobs for the month.

The goods-producing sector registered the largest decline for the month with a loss of 262,000 jobs while the service-providing sector shed 229,000 jobs. The manufacturing sector registered its 38th month in a row of employment decline with a loss of 159,000 jobs while construction jobs fell for the 27th straight month with a decline of 95,000 workers. All size of businesses continued to cut jobs in April as large businesses lost 77,000 jobs, medium sized businesses shed 231,000 jobs and small businesses dropped 183,000 jobs.

The market-moving US Nonfarm Payrolls report for April is to be released this Friday at 12:30 pm GMT with market forecasts predicting a decline of 610,000 jobs after March’s 663,000 decrease.

Forex Market – US Dollar falling in Forex today.

The U.S. dollar has been falling lower in forex trading today from the beginning of the day at 00:00 GMT. The dollar has fallen versus the euro, pound, franc, aussie, kiwi and loonie while gaining versus the yen.

The euro has advanced versus the dollar today as the EUR/USD has risen from today’s 1.3273 opening(00:00 GMT) to trading at approximately 1.3326 in the afternoon of the US trading session at 2:35pm EST according to currency data by Oanda.

The British pound has increased today versus the American currency as the GBP/USD has gone from the 1.5012 opening to trading at 1.5125 dollars per pound.

The dollar has gained against the Japanese yen as the USD/JPY has gained  from its 98.14 opening to trading at 98.36 yen per usd. The dollar has fallen against the Canadian loonie dollar after opening at 1.1791 earlier today to trading later at 1.1675.

The USD is falling against the Swiss franc after the USD/CHF’s opening at 1.1364 to trading at the 1.1313 exchange rate.

The Australian dollar has advanced as the AUD/USD has gone from 0.7363 to trading at 0.7499 while the New Zealand dollar has climbed from 0.5772 usd per nzd to trading at 0.5849.

AUD/USD Chart – The Australian Dollar advancing against the US Dollar in Forex Trading today and taking aim at surpassing the 0.7500 threshold for the first time since October 6th, 2008(Hourly Chart).

By Fast Brokers

The EUR/USD’s rally topped out yesterday as we expected, with the S&P futures hesitating at 900 while investors await Thursday’s flood of stress test news and economic data.  Yesterday’s decline came on minimal volume, showing there is presently insufficient conviction behind the pullback to send the currency pair tumbling.  The EUR/USD is stabilizing above Monday’s lows, and could bounce back a bit and trade sideway’s between now and the ECB’s meeting on Thursday.  We maintain our bullish outlook on the EUR/USD since no key fundamentals were broken and the momentum remains to the upside with the currency pair trading comfortably above our uptrend lines.

The two key barriers to a large ascent in the EUR/USD are the psychological 1.35 level and our 3rd tier downtrend line.  If the currency pair can brave above our 3rd tier downtrend line in particular, there will be little downtrend pressure left to hold back large gains.  The EU will release Retail Sales data today, which should receive limited reaction in the FX markets.  However, America’s ADP Non-Farm Employment change number could be a market move if it comes in far above/below analyst expectations.  Therefore, we expect the EUR/USD to move in lock-step with the S&P futures over the next 24 hours, exercising its positive correlation.

Thursday’s ECB meeting 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 find resistances of 1.3329, 1.3359, 1.3389, 1.3420, and 1.3442.  To the downside, we see supports of 1.3283, 1.3241, 1.3211, 1.3179, and 1.3143.  The 1.30 area serves as a psychological cushion with 1.35 acting as a psychological barrier.  The EUR/USD is currently exchanging at 1.3280.

Market Commentary provided by Fast Brokers.

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