Month: June 2009

Source: ForexYard

With the recent volatility in the forex market, one currency pair seems to stand out: the EUR/USD. This pair has been range-trading for the previous week as the two currencies struggle for dominance of the currency market. With this weekend’s G8 summit on the global financial system, traders will no doubt anticipate a higher level of volatility among this primary currency pair after the world’s economic leaders meet.

Economic News

USD – USD Advances after Treasury Auction

The Dollar advanced Wednesday against the EUR and JPY after an auction of 10-year U.S. Treasury notes achieved higher than expected yields. Selling off of stocks after the auction intensified the losses among risk-sensitive currencies. The USD fell earlier after Russia’s central bank said it will diversify its currency reserves by cutting U.S. Treasury purchases and buying IMF-backed bonds.

The Dollar also fell 6.6% versus the EUR in May on speculation the ever expanding U.S. budget deficit and the Federal Reserve’s increase of the money supply will undermine the greenback. The U.S. budget deficit climbed to $189.7 billion in May, a record for the month which prompted some concerns of the Dollar’s collapse. In light of this, it appears that U.S. fiscal and monetary policy will provide indications on the outlook for the Dollar as markets currently associate an improving economic outlook with a possible tightening of monetary policy.

A Federal Reserve survey know as the “Beige Book” which was released Wednesday showed that economic conditions remain weak and even deteriorated in several regions of the country, with commercial real estate and labor markets continuing to struggle. Traders should pay close attention to Core Retail Sales and Unemployment Claims to be released today at 12:30 GMT for further insight in to the state of the U.S economy. The likelihood that the greenback will continue to rise against some of its main currency rivals appears stronger than usual today.

EUR – EUR Trims Losses against USD

After a downward turn against the USD, the EUR rebounded from its session low of $1.3914 and trimmed its losses following a rise in the equity markets. Wednesday the EUR ended at $1.3987, down from $1.4075 late Tuesday and at 137.47 Yen, up from 137.10. The Pound Sterling was at $1.6355, up from $1.6333. The Pound advanced against the EUR to the highest level since December after a government report showed manufacturing in the U.K. expanded for a second consecutive month and stocks gained.

The EUR/USD pair seems to have settled into a trading range with the EUR fluctuating between $1.38 and $1.42. This trend is likely to continue until the end of the week. However, with high oil prices and diminishing risk aversion it is likely that the EUR will resume its bullish trend as the underlying sentiment is still negative for the Dollar.

With a slow news days for the Euro-Zone today and Friday, investors are waiting for the weekend G8 meeting to start this Friday for a better assessment of the direction the participating economies will take. The EUR’s recent strength makes it a excellent forerunner in today’s market, but regional uncertainties have captivated traders lately and made the forex market less predictable.

JPY – JPY Trading Down against Currency Rivals

The JPY declined yesterday against most major currencies as speculation regarding a global recovery encouraged investors to buy higher yielding assets outside of Japan, selling the Japanese currency. The Yen was at 137.21 per EUR Wednesday and at 98.21 per USD, following a 0.8% drop. As the anxiety about financial turmoil retreats, people are willing to buy riskier currencies which offer higher yields while funding that with safer currencies such as the Yen and the Dollar.

The Japanese Yen is likely to continue to weaken as improving risk appetite brought on by advances in the Asian stock market is likely to encourage investors to turn to overseas assets offering higher returns, promoting Japanese capital outflows. As a result, the JPY’s target rates today should be lower against its currency counterparts.

Crude Oil – Oil Soars above $72 a Barrel

Crude Oil rose to a 7-month high after a government report showed that U.S. crude supplies unexpectedly fell. Stockpiles of oil dropped 4.38 million barrels to 361.6 million in the week ended June 5, the Energy Department said Wednesday. Crude Oil for July delivery rose to another record price this morning by reaching $72.04 a barrel.

Oil demand is still pretty weak across the globe despite a slight increase in demand in the U.S. Commodity futures which have increased this year as the Dollar weakened and equity markets rebounded. Still, the fundamentals don’t support prices at these levels and Oil’s current strength might be a result of momentum-trading as investors turn to higher yielding assets amid rising confidence of global recovery. Fears over rising inflation may also assist in Crude Oil’s rise as investors look for assets that can offer protection against rising inflation.

Technical News

EUR/USD

The price of this pair has been sending mixed signals over the past few days as it continues to trade in a wide range. There appears to be a bearish cross on the hourly chart’s Slow Stochastic; however, a fresh bullish cross has just occurred on the hourly chart’s MACD. With bullish and bearish crosses on the MACDs of the 4-hour and daily charts, respectively, traders may find it difficult to choose a direction. Waiting for a clearer signal might be a wise choice today.

GBP/USD

The price of this pair appears to be floating in the over-bought territory on the RSI of the 4-hour chart, signaling an impending bearish move. The fresh bearish crosses on the hourly chart’s Slow Stochastic and MACD support this notion. Going short appears to be a good strategy today.

USD/JPY

The oscillators on this pair have recently completed a number of bearish crosses, and have exited the over-bought territory on the RSIs. As of now, the price is on a slippery downward slope. However, indications on the hourly chart are beginning to show signs of opposing pressure as the downward movement may be coming to an end. If it breaches the next support line, a strong downward move may occur; however, if it fails to breach, traders may expect an upward correction throughout the day.

USD/CHF

The price of this pair appears to be floating in the over-sold territory on the 4-hour chart’s RSI, indicating an imminent upward correction. The fresh bullish cross on the hourly chart’s Slow Stochastic supports this notion. Going long might be a wise move today.

The Wild Card – EUR/NOK

The price of this pair has just entered the over-sold territory on the hourly chart’s RSI, signaling upward pressure. The fresh bullish crosses on the MACD of the hourly and 4-hour charts support the notion of an impending bullish correction. By entering early long positions, forex traders can enter the market on this pair, and at a great starting 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.

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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$ 1.4140 level and was supported around the $1.4050 level.  The common currency moved higher after the Central Bank of the Russian Federation Deputy Chairman Ulyukayev said the central bank is reducing its holdings of gold and U.S. Treasury bonds in favour of bonds issued by the International Monetary Fund.  There is a Sino-Russian movement afoot to develop a new international reserve currency to reduce dependence on the U.S. dollar and this will have a negative impact on the greenback.  In eurozone news, German April industrial production was off 1.9% m/m while French industrial production was off 1.4% m/m.  Group of Seven finance ministers will convene in Italy later this week to discuss their exit strategies from the ongoing economic and financial crisis.  Other data released today saw German May consumer price inflation off 0.1% m/m and flat y/y.  European Central Bank member Quaden said eurozone interest rates are at “appropriate” levels now, adding the ECB does not need an “accommodating” monetary policy in the long term.  Euro bids are cited around the US$ 1.3435 level.

¥/ CNY

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥98.10 level and was supported around the ¥97.10 level.  The yen was given across the board as the global equities rally continued and investors moved into higher-yielding currencies.  Data released in Japan overnight saw the May domestic corporate goods price index decline 0.4% m/m and 5.4% y/y.  Also, April core machinery orders were off 5.4% m/m, the second consecutive monthly decline, and were off 32.8% y/y.  The Nikkei 225 stock index climbed 2.09% to close at ¥9,991.49.  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 ¥138.35 level and was supported around the ¥136.65 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥159.15 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥90.45 level. In Chinese news, the U.S. dollar weakened vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8323 in the over-the-counter market, down from CNY 6.8344.  Data released in China overnight saw May consumer prices off 0.3% m/m and 1.4% y/y while May producer prices were off 7.2%.

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 United States trade deficit edged up in April for the second consecutive month after decreasing for seven straight months according to a release by the Commerce Department today. The U.S. trade deficit increased by 2.2 percent as the deficit registered $29.2 billion in April following a revised deficit of $28.5 billion in March. The trade balance had reached a nine year low in February with a deficit of $26.1 billion. Today’s data surpassed market forecasts that were expecting a deficit of approximately $28.7 billion for the month.

The U.S. had a total of $121.1 billion worth of exports in April which was a decrease of $2.8 billion from March’s total. April’s exports total marked the lowest level since July of 2006.  April also saw a reduction in imports as it totaled $150.3 billion worth of imports compared with $152.5 billion in March for a decrease of $2.2 billion for the month.

The U.S. trade deficit with China increased in April with a $16.8 billion shortfall after a deficit of $15.6 billion in March. Other notable deficits that also rose in April were the deficits with the European Union at $5.3 billion, Mexico at $4.1 billion, Japan at $3.2 billion and OPEC at $3.6 billion. The U.S. trade surpluses with other countries for April included Hong Kong at $1.4 billion, Australia at $0.6 billion, Singapore at $0.3 billion and Egypt at $0.2 billion.

Forex Market – US Dollar gaining in Forex Trading today.

The U.S. dollar has been stronger in forex trading so far today as the dollar has gained versus the euro, Canadian dollar, Swiss franc, Australian dollar, New Zealand dollar and Japanese yen while falling against the British pound.

The euro has declined versus the dollar today as the EUR/USD has fallen from today’s 1.4074 opening(00:00 GMT) to trading at approximately 1.4011 in the morning of the US trading session at 10:41am 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 1.6321 opening to trading at 1.6369 dollars per pound.

The dollar has gained against the Japanese yen as the USD/JPY has risen from its 97.67 opening to trading at 98.04 yen per usd. The dollar has increased against the Canadian loonie dollar after opening at 1.1037 earlier today to trading at 1.1102 while the USD has also increased against the Swiss franc after the USD/CHF’s opening at 1.0783 to trading at the 1.0803 exchange rate.

The New Zealand dollar has decreased slightly against the USD as the NZD/USD has declined from 0.6295 usd per nzd to trading at 0.6279 while the Australian dollar has also declined very slightly against the greenback. The AUD/USD trades at 0.8038 after opening the day at 0.8047.

USD/CAD Chart – The US Dollar advancing against the Canadian Dollar in Forex Trading today and breaking a recent hourly downtrend to break back above the 1.1100 exchange rate.

By Fast Brokers – The EUR/USD is rebounding past 1.40 despite weaker than expected industrial production numbers from both Germany and France over the past two sessions.  Therefore, the EUR/USD is taking its cue from rising crude and S&P futures along with an appreciating Pound following Britain’s positive manufacturing production release.  In fact, the EUR/GBP is falling beneath key lows meaning there could be accelerated losses in the near-term, exemplifying the relative weakness of the Euro.  Even though volume to the upside has been weaker than to the downside over the past week, the EUR/USD is back above the psychological 1.40 level.  This is an important step in the uptrend regaining its footing.  However, the large volume we saw to the downside is still a bit disconcerting.  We are not fazed by the volatility and will need a fundamental confirmation to the upside to feel comfortable with an optimistic outlook on the EUR/USD.  The key test will be our 2nd tier downtrend line.  If the EUR/USD can climb over the 2nd tier, we may see near-term gains accelerate past previous June highs.  However, there is quite a ways to go.

While EU economic data continues to come in mixed, the S&P futures are knocking at 2009 highs.  Therefore, despite the current negative tendency of the Euro, the EUR/USD is inclined to follow U.S. equities higher due to their positive correlation.  Improvement in U.S. equities implies a recovery in the global economy, and consequently stabilization in the Euro zone’s economy.  We may just not see as large of movements from the Euro to the upside for the time being.

Fundamentally, we find resistances of 1.4139, 1.4185, 1.4220, 1.4242, 1.4286, and 1.4325.  To the downside, we see supports of 1.4105, 1.4056, 1.4020, 1.3964, and 1.3921.  The 1.40 area serves as a psychological support with 1.45 acting as a psychological cushion.  The EUR/USD is currently exchanging at 1.4110.

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 has jumped over our 2nd tier downtrend line as investors celebrate a better than expected manufacturing production number, accompanied by an upward revision of the previous release.  Meanwhile, investors seem to be ignoring the declining trade balance, signifying a rise in imports and/or decrease in exports.  Since recent data shows consumption is improving in Britain, we assume the declining trade balance indicates a rise in imports.  Overall, we continue to see positive progression in Britain’s economy.

Despite the GBP/USD’s encouraging recovery on climbing volume, we haven’t seen volume to the upside match the volume during last week’s pullback.  Therefore, we are still cautious and waiting to see how the GBP/USD behaves should it approach our 3rd tier downtrend line.  If the Cable can get past our 3rd tier on rising volume, then we will be comfortable re-activating our positive outlook on the currency pair.  Meanwhile, the S&P futures are rallying, trading just beneath 2009 highs.  If U.S. equities breakout to the upside, the Cable might find the strength to get past our 3rd tier downtrend line and previous June highs.  The EUR/USD is facing a similar obstacle to the upside, showing we haven’t eclipsed the impact from last week’s downturn yet.  Hence, we are sticking to the evaluation that we may be heading into a new near-term downtrend unless the Cable overcomes the aforementioned barriers to the upside.  Britain will be pretty quiet for the remainder of the week news-wise, seemingly leaving its immediate-term performance in the hands of U.S. equities.

Fundamentally, we find resistances of 1.6371, 1.6412, 1.6458, 1.6497, and 1.6574.  To the downside, we see supports of 1.6315, 1.6270, 1.6219, 1.6111, and 1.6054.  The 1.60 level acts as a psychological cushion with 1.65 serving as a psychological barrier.  The GBP/USD is currently exchanging at 1.6386.

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 rising back towards our 3rd tier downtrend line after the weaker than expected showing from Japan’s Core Machinery Orders.  Though the CMO is normally volatile, today’s report was not the solid improvement in capital expenditure investors were hoping for.  As a result, the Dollar is experiencing a little strength against the Yen.  However, today’s rise of the USD/JPY is not eye-popping since our 3rd tier downtrend line and May highs are still intact with volume subsiding.  Therefore, even though the USD/JPY has made a few hints towards an uptrend, we still haven’t witnessed a clarifying move to the upside.  Meanwhile, investors are waiting upon the release of Japan’s Final GDP later today.  If the GDP data is weaker than expected, we may see some more strength in the Dollar due to the outperformance of America’s economy as compared to Japan’s.  We maintain our negative outlook on the USD/JPY trend-wise until we see a game-changing move to the upside.

Fundamentally, we maintain our resistances of 97.98, 98.66, 99.49, 100.06, and 100.74.  To the downside, we hold our supports of 97.45, 96.90, 96.33, 95.82, and 95.20.  The 100 level serves as a key psychological barrier with 95 acting as a psychological cushion.  The USD/JPY is currently exchanging at 97.90.

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

Many analysts yesterday had anticipated a slight decline in the price of Crude Oil considering the recent strength in the USD brought on by last week’s employment data. However, oil prices surprised many traders today as the price continued to climb above $70 a barrel to hit a 7-month high! As Geithner’s speech demonstrated a renewed push for economic recovery, and potential plans to raise interest rates in the US, there isn’t very stable ground around the common safe-haven investments. Traders should expect more volatility today.

Economic News

USD – USD Strength Not Likely to Return this Week

The U.S. Dollar weakened during yesterday’s trading session, correcting the sharp gains against the EUR and GBP seen earlier this week. This occurred as investors questioned whether the economy had improved enough to justify talk of higher U.S. interest rates by year end. By yesterday’s close, the USD fell sharply against the EUR, pushing the oft-traded currency pair to 1.4060. The dollar experienced similar behavior against the GBP and closed at 1.6310.

The dollar, which fell sharply in May, rallied late last week after data showed U.S. employers cut fewer than expected jobs last month, but that move fizzled yesterday as analysts warned the U.S. economy still faced a rising jobless rate.

There was a quiet day of news from the U.S. as there were no major economic data releases on the calendar yesterday. However, U.S Treasury Secretary Geithner spoke about the state of the U.S. economy. He pointed out specifically that Barack Obama will unveil a new model for regulation of financial institutions next week which might affect the dollar. Overall, investors remained wary of making big bets in favor of the dollar these days, especially as they re-thought the chances of a Fed rate increase later this year.

Looking ahead to today, there are several important news releases coming out of the U.S. These include the Trade Balance and Crude Oil inventories at 12.30 GMT and 14:30 GMT, respectively. Better-than-expected results may help the Dollar recover some of yesterday’s losses against some of its crosses such as the EUR and GBP. On the other hand, if the results turn out to be lower than forecast, then the Dollar may record a fairly bearish session in today’s trading. Traders should pay close attention to the market as there is an opportunity for traders to capitalize on the fluctuations which are likely to follow these releases.

EUR – EUR Rises on Weaker Greenback

The EUR finished yesterday’s trading session with mixed results versus the major currencies. The 16-nation currency extended gains versus the U.S. Dollar on Tuesday, to trade above $1.41 amid a broad sell-off in the greenback. The EUR experienced similar behavior against the JPY as the pair rose from 135.96 to 137.12 by days end. The EUR did see bearishness as well as it lost over 60 pips against the GPB and closed at 0.8620.

A leading indicator released yesterday was the German Industrial Production report. Germany holds the largest and strongest economy in the Euro-Zone, and thus the relevant publications from this economy usually have a hefty impact over the EUR. As a result, Germany’s economy may be slow to recover from a record contraction in the first quarter as companies trim jobs and the global slump curbs foreign sales.

German exports fell more than economists expected in April and European Central Bank (ECB) Governing Council member Erkki Liikannen said yesterday that there is no quick recovery in sight for the world economy. Germany, a leading global exporter, has been mauled by bearish global demand in the past year, and notoriously thrifty German consumers have done little to compensate by hitting the stores.

Looking ahead to today, the most important economic indicator scheduled to be released from the Euro-Zone is the French Industrial Production at 6:45 GMT. Analysts are forecasting this figure to slightly increase from its previous reading. Traders will be paying close attention to today’s announcement as a stronger than expected result may boost the EUR in the short-term. Traders are also advised to follow the Manufacturing Production figures coming out of Britain at 8:30 GMT, and the Trade Balance figures coming out of the U.S. at 12:30 GMT as these results may set the EUR’s main currency crosses for the day.

JPY – Yen Looks to Global Economic Recovery

The Japanese Yen completed yesterday’s trading session with mixed results versus the major currencies. The JPY fell against the EUR yesterday, pushing the oft-traded currency pair to 137.12. The JPY experienced similar behavior against the GBP as the pair closed at 158.70 by day’s end. The Japanese Yen did see some bullishness as well as it gained over 100 pips against the USD to close at 97.20.

Japan’s deepest recession is easing now, as Japan’s exports have received a boost from public spending in China and other countries, while Prime Minister Taro Aso’s record stimulus spending on tax incentives and cash handouts helped consumer sentiment advance to a 10-month high in April. Even as overseas demand shows signs of stabilizing, exports and factory output have fallen by more than a third since the global financial crisis deepened in September, putting pressure on companies to cut jobs and investments.

Crude Oil – Oil Prices Hit 7-Month High!

Crude Oil prices rose for a second day on increasing optimism that the world economy is emerging from recession and fuel consumption begins to recover. Crude Oil ended above $70 a barrel for the first time in seven months yesterday as the dollar weakened and traders positioned themselves ahead of the crude oil inventory data which will start to be rolled out later in the day.

Oil prices have more than doubled since February, rising with equities on signs of a rebound in the economy and expectations of fuel demand will follow higher. As a result, a release of a string of positive economic figures could help continue its bullishness. Therefore, traders are advised now to make some profits as the price of Crude Oil is set to remain volatile in the short-medium term.
Technical News

EUR/USD

It appears that the pair has resumed its bullish activity, as it’s testing the 1.4100 level. Currently, a bullish cross on the daily chart’s Slow Stochastic is suggesting that the uptrend could go farther. Going long might be the preferable choice today.

GBP/USD

After completing a 500 pips bullish move, it seems that the cable has reached a very strong resistant level placed around 1.6350. However, the MACD on the 4-hour chart continues to deliver bullish signals, and if the resistant level will be breached, a sharp upward movement could take place.

USD/JPY

After failing to breach the 99.00 level, the pair has lost its bullish momentum and is currently traded around the 97.50 level. The daily chart’s RSI has dropped below the 70 line, signing that the bearish move might be extended. Going short could be the right choice today.

USD/CHF

There is a very accurate bearish channel formed on the daily chart, as the pair is now floating in its upper section. In addition, a bearish cross on the 4-hour chart’s MACD suggests that the bearish momentum has more steam in it, with the potential of reaching the 1.0600 level.

The Wild Card – Gold

After 3 days of relatively peaceful trading, it appears that today could signal new volatility in gold trading. As a bullish cross is taking place on both the 4-hour chart’s MACD and the daily chart’s Slow Stochastic, it seems that a bullish move is imminent. This might be a great 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 sharply higher vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4100 figure and was supported around the $1.3850 level.  The big story in the markets today was a decision by the U.S. Treasury that allows several U.S. banks to repay funds they borrowed under the Troubled Asset Relief Program that was inaugurated last year.  Ten banks will be permitted to repay tens of billions of borrowed funds and try to return to some semblance of normalcy.  The Federal Reserve has reportedly for now shelved a plan that would have potentially allowed it to issue its own debt to help absorb some inflationary pressures and drain liquidity.  New York Federal Reserve Bank President Dudley recently said the power to issue debt would be “nice to have, but not critical.” Data released in the U.S. today saw April wholesale inventories off 1.4%.  In eurozone news, European Central Bank member Noyer said it is premature to determine if the ECB’s unconventional monetary policy measures enacted to stabilize the financial markets have been an overall success, but noted they “have contributed to a significant reduction in various credit risk premia.” Data released in Germany today saw April industrial production fall 1.9% m/m, worse-than-expected.  These data suggest the eurozone’s largest economy is a laggard as far as the gradual, nascent economic recovery on the Continent is concerned. Euro bids are cited around the US$ 1.3435 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥97.25 level and was capped around the ¥98.55 level.  Bank of Japan reported that paying 0.1% interest on excessive reserves held by financial institutions may distort the proper functioning of the market.  The central bank’s overnight call rate currently stands at 0.10% and the central bank wants to make sure banks are incentivized to not horde liquidity.  Data released in Japan overnight saw the April leading index improve dramatically to 55.0 from 25.0 in March while the composite index improved to 76.5 from 75.5 in March.  The Nikkei 225 stock index lost 0.80% to close at ¥9,786.82.  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 ¥137.35 level and was supported around the ¥135.70 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥159.15 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥90.45 level. In Chinese news, the U.S. dollar weakened vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8344 in the over-the-counter market, down from CNY 6.8363.

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 – The USD/JPY is turning south from our 3rd tier downtrend line as we notice a Dollar appreciation across the board today.  We haven’t seen any abnormal volume to the upside on the 1-day chart, leading us to believe that the USD/JPY may remain in its steady downtrend.  It would take an aggressive movement to the upside past May highs and our downtrend lines on substantial volume for us to alter our negative outlook on the currency pair.  On the other hand, we do notice some near-term downward pressure on both the GBP/USD and EUR/USD.  If the USD/JPY keeps its new negative correlation with these currency pairs and they weaken from further levels, the USD/JPY could make a push for 100.  However, the correlations between the USD/JPY and these currency pairs are fragile because they exhibited a positive correlation since last September.  It will be very interesting to see how the USD/JPY behaves over the next few trading sessions, and whether the currency pair can piece together some upward momentum.

Meanwhile, investors will keep a close watch on the Core Machinery Orders release from Japan later today.  Core Machinery Orders are forward looking since the purchase of heavy machinery normally indicates an expected increase in production, telling us a lot about Japanese exports and consequently global demand and consumption.  Core Machinery Orders have climbed back to respectable levels since January’s shocking negative number.  Analysts expect an increase of 0.1%, and the release is likely to be a market mover.

Fundamentally, we find resistances of 97.98, 98.66, 99.49, 100.06, and 100.74.  To the downside, we see supports of 97.45, 96.90, 96.33, 95.82, and 95.20.  The 100 level serves as a key psychological barrier with 95 acting as a psychological cushion.  The USD/JPY is currently exchanging at 97.60.

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.

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