Month: March 2010

USDJPY traded in a narrow range between 89.63 and 91.08 for several days. Now the price action in the trading range is more likely consolidation of uptrend from 84.82. As long as 89.63 support holds, another rise to test 92.14 resistance could be expected after consolation. However, below 89.63 level will suggest that the bounce from 88.14 has completed at 91.08 already, then another fall towards 87.00 could be seen to follow.

For long term analysis, USDJPY formed a cycle top at 93.75 level on weekly chart. Fall towards 84.82 previous low is expected.

Weekly Forex Analysis

By GCI Fx Research

€

The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3500 figure and was capped around the $1.3625 level.  Bank of Spain yesterday reported that bad loans at Spanish banks have reached their highest level since 1996, reaching 5.6% of total credit.  There are new details in the ongoing saga concerning Greece’s fiscal woes. Germany all of a sudden is said to favour a new policy framework that would have the International Monetary Fund providing fiscal relief to Greece, a shift in policy.  France, on the other hand, is said to resist involvement of the International Monetary Fund and if these reports are true, they would pit Germany’s Merkel against France’s Sarkozy.  One school of thought suggests Sarkozy may be resisting IMF involvement because his would-be political competiton, Strauss-Kahn, heads the IMF.  Data released in Germany today saw February producer price inflation flat m/m and off 2.9% y/y.  Data to be released in Germany next week include Ifo business sentiment and PMI data.  EMU-16 March consumer confidence data will be released on Monday.  In U.S. news, data to be released in the U.S. on Monday include the February Chicago Fed’s national activity index followed by home sales data on Tuesday.  The Federal Reserve today withdrew exemptions for banks it had granted in August 2007 as part of a move to boost the provision of liquidity.  This exemption removal is the Fed’s latest maneuver to withdraw policy accommodation.  The Fed did not lift its discount rate again yesterday, contrary to widespread speculation that policymakers would imminently continue to shift policy without raising the federal funds target rate.  Euro bids are cited around the US$ 1.3335 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥90.30 level and was capped around the ¥90.70 level. National Strategy Minister Sengoku reported Japan has “extremely little” room for additional fiscal stimulus.  In contrast, Financial Services Minister Kamei this week reported the government should compile a stimulus package.  Prime Minister Hatoyama has indicated he has not considered an additional fiscal stimulus package at this time.  Japan’s debt-to-GDP ratio is nearing 200%, among the highest of all industrialized nations.  Data released in Japan overnight saw the January all-industry activity index climb to 3.8% m/m from -0.3%.  Sengoku also noted an easier monetary policy may have only a “limited impact” on overcoming deflation.  Bank of Japan this week expanded monetary policy further, doubling a three-month lending facility to ¥20 trillion. BoJ Policy Board member Momma said overnight that fiscal policy must “earn the trust” of the markets.  Other data released overnight saw the retail investor sentiment index up +6 points.  Bank of Japan this week kept its economic assessment unchanged for a fourth consecutive month, reporting the economy is “picking up.” The central bank also upped its assessment of business investment, adding it is “leveling out on the whole.”  The Nikkei 225 stock index climbed 0.75% to close at ¥10,824.72. U.S. dollar offers are cited around the ¥94.75 level.  The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥122.25 level and was capped around the ¥123.35 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥135.60 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥85.10 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8266 in the over-the-counter market, up from CNY 6.8264.  China reported its purchases of U.S. Treasuries have helped stabilize the U.S. financial markets and urged the U.S. to avoid politicizing China’s yuan policy.  U.S. Ambassador to China Huntsman verbally intervened this week, saying the U.S. “hopes to see more flexibility on the exchange rate. I would be misleading you if I left you with the impression that this wasn’t a very, very important issue in the United States, and will continue to be. We’ll see how the next few weeks play out.”  The central bank is expected to tighten monetary policy further imminently.

₤

The British pound depreciated sharply vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.4985 level and was capped around the $1.5255 level. Bank of England reported net business lending fell 9.3% m/m, the sharpest decline since record-keeping began in 1999.  Bank of England Monetary Policy Committee member Sentance reported he’s “been relatively encouraged by the turnaround we’ve seen in the last year, both in the UK and in the global economy.  You have to recognize there is some risk of a double dip, but that’s not the central forecast. You’d have to see some factors bring that about: we’ve seen big shocks in the international economy over the last couple of years, so you couldn’t rule out some new shocks emerging on the financial front which could set back the economy. But that’s not my central expectation.”  BoE yesterday noted that mortgage lending has “recovered somewhat.”  Cable bids are cited around the US$ 1.4455 level.  The euro moved higher vis-à-vis the British pound as the single currency tested offers around the US$ 0.9015 level and was capped around the £0.8920 level.

CHF

The Swiss franc weakened vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.0635 level and was supported around the CHF 1.0540 level. Traders continue to speculate the Swiss National Bank’s franc policy has shifted and that policymakers will tolerate more appreciation of the franc.  Swiss National Bank member Danthine noted it will continue to counter excessive foreign exchange gains.  Data released in Switzerland yesterday saw Q4 industrial production rise 6.4% q/q and decline 1.1% y/y while the February trade surplus declined to CHF 1.29 billion from CHF 2.42 billion.  The euro/ Swiss franc cross came off to a fresh sixteen-month low amid declining expectations of additional Swiss National Bank intervention.  Also, the March ZEW expectations index climbed to 53.8 from 52.5 in February.  The euro came off vis-à-vis the Swiss franc as the single currency tested bids around the CHF 1.4315 level while the British pound moved lower vis-à-vis the Swiss franc and tested bids around the CHF 1.5920 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.

By Fast Brokers – Gold is undergoing a large leg dad as it participates in risk-averse flows.  The Dollar is appreciating across the board in reaction to political uncertainty in the EU in regards to how to deal with Greece.  However, gold was holding up relatively well until news hit that the Reserve Bank of India decided to raise its interest rates by 25 basis points.  This announcement sent a shockwave throughout the FX markets and sent investors scurrying towards the Dollar.  Gold experienced a windfall of selling activity as well, dropping all the way down to our key first tier uptrend line and has nearly retested its highly psychological $1100/oz level.  That being said, investors should keep an eye on gold’s ability to hold these two key technical levels along with the ability of the EUR/USD and Cable to stabilize from intraday losses.  The U.S. data wire will be quiet today, meaning attention will remain on today’s psychological and news developments.  Data will pick up next week, meaning key risk-trade supports will likely be tested soon.

Technically speaking, gold has our first tier uptrend line serving as a technical cushion along with its highly psychological $1100/oz level.  Our 1st tier runs through previous March lows, highlighting the prevalence of present levels.  As for the topside, gold faces multiple downtrend lines along with 3/15 and 3/12 highs.

Present Price: $1105.80/oz
Resistances: $1106.48, $1107.27, $1108.06/oz, $1109.37/oz, $1110.43/oz, $1111.57/ oz
Supports: $1105.25/oz, $1104.46/oz, $1103.85/oz, $1103.06/oz, $1102.27/oz, $1101.40/oz
Psychological: $1100/oz, March highs and lows

(click chart to enlarge)

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regarded neither 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 AUD/USD is experiencing a sizable leg down after the Reserve Bank of India surprised markets by hiking interest rates by 25 basis points.  The move sent shockwaves throughout the FX markets, exacerbating risk-averse flows after the Dollar was already strengthening in the midst of EU uncertainty.  Sarkozy has reiterated Frances support for Greece, pitting the EU’s two largest economies against one another.  Australia was holding up relatively well even with huge selloffs taking place in the Cable and EUR/USD.  However, the RBI’s rate hike has had a considerable impact on the Aussie due to Australia’s economic exposure to India.  Meanwhile, the data wire is very quiet today, placing added emphasis on today’s news events.  It will be interesting to see how the Aussie holds up as the trading session progresses.  Due to the extent of the respective pullbacks in the EUR/USD and Cable it wouldn’t be surprising to see some buyers enter the market on oversold conditions.   Such a wave could benefit the Aussie and keep the currency pair above our 2nd tier downtrend line, which runs through 3/15 lows.  Therefore, investors should continue to monitor broad-based activity in the dollar for the remainder of the day.

Technically speaking, the Aussie multiple downtrend lines serving as technical barriers along 3/16 and 3/12 highs.  As for the downside, the Aussie has multiple uptrend lines serving as technical cushions along with 3/16 and 3/15 lows.

Price: .9142

Resistances: .9153, .9162, .9169, .9177, .9185, .9192

Supports: .9139, .9132, .9122, .9116, .9110, .9100

Psychological: .91, .90, 2010 highs

(click chart to enlarge)

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regarded neither 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 creeping higher today despite rampant volatility today in the FX markets.  Both the EUR/USD and Cable are undergoing hefty selloffs as uncertainty in the EU unravels the risk trade and sends investors toward the Dollar for safety.  Additionally, the Reserve Bank of India surprised markets by hiking its interest rates by 25 basis points, exacerbating risk-averse flows.  These two developments have had a significant impact on the markets today due to the lack of data releases from around the globe.  However, the USD/JPY has only benefitted slightly from the Dollar flows so far today.  Comparative inactivity in the USD/JPY is a bit puzzling since the Fed’s monetary stance has become increasingly tighter as compared to the BoJ’s.  Therefore, it will be interesting to see whether the USD/JPY opts to participate as the trading session wears on.  A possible reason for the USD/JPY’s calm behavior could be the reluctance of investors to send the currency pair beyond the realms of its highly psychological 90 area.  Although the data wire has been quiet today, data streams will pick up next week with key UK and U.S. data on top Monday, followed by Japan’s Trade Balance figure on Tuesday.

Technically speaking, the USD/JPY faces multiple downtrend lines along with intraday, 3/18, and 3/12 highs.  Meanwhile, the highly psychological 90 area could continue to have an influence over the USD/JPY’s movements for the near-term.  As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with intraday and 3/18 lows.

Present Price: 90.59
Resistances: 90.63, 90.69, 90.75, 90.79, 90.83, 90.93
Supports: 90.55, 90.49, 90.42, 90.34, 90.27, 90.21
Psychological: 90, March highs and lows

(click chart to enlarge)

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regarded neither 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 been clobbered today despite a lack of pertinent news and/or data from the UK.  EU anxiety remains at a heightened state after Sarkozy reiterated Frances support for Greece and objection to IMF involvement.  Hence, Sarkozy is pitting France against Germany, which is becoming a heated showdown between the EU’s two economic powerhouses.  Meanwhile, Greece has set a one week timeline for and EU plan before opting to head to the IMF for help.  All of the EU uncertainty has finally bled over into the Pound, and the Cable has taken a drubbing despite this week’s surprisingly positive UK employment data.  Additionally, the Reserve Bank of India raised rates by 25 basis points, surprising FX markets and accelerating risk-averse cash flows.  With the data-wire quiet today, psychological forces will likely remain at the steering wheel.  Meanwhile, it will be interesting to see whether the Cable and the risk trade in general can manage to stabilize from present levels amidst this wave of uncertainty.  The UK will kick off next week with CPI and CBI Realized Sales data points, meaning Monday could be an active session as well.  If UK CPI should come in hot again, this could keep the BoE at bay and discourage the central bank from injecting liquidity.

Technically speaking, the Cable still has multiple uptrend lines serving as technical cushions along with 3/15 and 3/16 lows.  Additionally, the psychological 1.50 could serve as a solid technical cushion should it be tested.  As for the topside, the Cable faces multiple downtrend lines along with intraday and 3/16 highs.

Present Price: 1.5074
Resistances: 1.5086, 1.5101, 1.5112, 1.5124, 1.5143, 1.5161
Supports: 1.5042, 1.5026, 1.5016, 1.5002, 1.4989
Psychological: 1.50, March lows

(click chart to enlarge)

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regarded neither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Fast Brokers – The EUR/USD’s slide has continued and the currency pair has been driven below our key medium-term downtrend again, throwing March’s uptrend into question.  The EUR/USD is currently trading above some important supports and the currency needs a topside boost soon to avoid a more protracted selloff.  The EUR/USD came under further selling pressure yesterday after Merkel implied that the IMF may be the best route for Greece.  Additionally, rumors spread that the Fed may raise the rate again at its emergency window.  The concept of monetary ordering in the U.S. combined with division in the EU has resulted in a swift and hefty pullback in the EUR/USD.  Sarkozy made the waters even murkier today by reiterating France’s opposition to IMF intervention and confirmed the EU’s support for Greece.  Hence, the two largest economies are squaring off, making next week very interesting since Greece provided a one week timeline for a solution.  Psychological pressures have come to the forefront due to the lack of economic data today, though the EU will re-enter the fray on Tuesday with the release of its Flash PMI set along with Germany’s Business Ifo Business Climate figure.  Meanwhiel, it will be interesting to see whether the EUR/USD can hold its psychological 1.35 level land March lows.

Technically speaking, the EUR/USD faces multiple downtrend lines along with intraday 2/26, and 3/3 highs.  As for the downside, the EUR/USD has several uptrend lines serving as technical cushions along with 3/5 and 2/23 lows.  Meanwhile, the psychological 1.35 area could serve as a solid technical cushion should it be tested.

Present Price: 1.3543
Resistances: 1.3552, 1.3571, 1.3591, 1.3610, 1.3626, 1.3643
Supports:  1.3527, 1.3513, 1.3498, 1.3483, 1.3471, 1.3457
Psychological: March and February Lows, 1.35

(click chart to enlarge)

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regarded neither 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 CountingPips.com

Economic news out of Canada today showed that retail sales and consumer prices both increased by more than expected, according to separate data releases by Statistics Canada. Canadian retail sales increased by 0.7 percent to a C$35.7 billion total in January after a revised increase of 0.5 percent in December. The rise in retail sales was more than expected as economic forecasts were predicting a 0.6 percent increase for the month. On an annual basis, January’s retail sales level was 6.0 percent higher than the January 2009 level.

Core retail sales, excluding automobile sales, climbed by 1.8 percent in January following a revised gain of 0.7 percent in December. The rise in core sales also sharply surpassed forecasts that were expecting a 0.5 percent increase for the month.

Contributing to the gain in the retail sales numbers was an increase in building & outdoor home supplies stores by 7.4 percent in January. This sector was boosted by the government’s Home Renovation Tax Credit which was set to expire in January. Also contributing positively to the report were notable gains in food & beverage stores (+1.9%), furniture, home furnishings & electronics stores (+2.5%) and miscellaneous retailers (+1.1%).

Canadian Consumer Prices rise in February

Consumer prices in the Canada increased in February, according to a separate report released today by Statistics Canada. The Consumer Price Index, a measure of inflation, rose by 0.4 percent in February after gaining by 0.3 percent in January.

On an annual basis, consumer prices registered a 1.6 percent increase over the February 2009 level following a 1.9 percent annual increase in January. February’s data surpassed economic forecasts that were expecting a 0.3 percent monthly increase and a 1.4 percent annual advancement.

Rising energy prices contributed significantly to the higher cpi levels in February. Gasoline prices increased by 15.3 percent on an annual basis in February following a 23.9 percent increase in January on an annual basis.

Consumer prices, excluding energy prices, increased by 1.3 percent on an annual basis in February following a 1.3 percent gain in January.

The Bank of Canada’s core index, released in the report, showed that core consumer prices rose by 2.1 percent on an annual basis in February compared with an annual rise of 2.0 percent in January. This data beat market estimates that were predicing a 1.7 percent core index increase for February. On a monthly basis, the BOC core index saw prices rise by 0.7 percent from January to February.

Canadian Loonie stronger in Forex Trading

The Canadian loonie dollar has been stronger today in the currency markets versus most of the major currencies after the retail sales and inflation data. The Canadian currency has increased sharply versus the euro, British pound and Australian dollar while trading slightly lower versus the Japanese yen and U.S. dollar after paring early gains, according to currency data from Oanda.

USD/CAD 1-Hour Chart – The U.S. dollar has fought back today against the Canadian loonie as the USD/CAD pair trades around the 1.0150 level at about noon of the US session. The USD/CAD opened the day trading around 1.0136 at 00:00GMT and fell all the way to the 1.0061 exchange rate on the Canadian news releases before a turnaround amid US dollar strength.

Forex Market Review by Finexo.com

Past Events
• USD Core CPI, out at 0.1% as expected, prior -0.1%
• USD Unemployment Claims, out at 457K versus expected 456K, prior 462K
• USD Philadelphia Fed Manufacturing Index, out at 18.9 versus expected17.6, prior 17.6
• CAD Foreign Securities Purchases, out at 11.83bn versus expected 7.75bn, prior 11.11bn
• GBP Public Sector Net Borrowing, out at 12.4bn versus expected 14.6bn, prior 43 million (revised)
• EUR Current Account Balance, out at -8.1bn versus expected 2.9bn, prior 2.3bn (revised)

Upcoming Events
• EUR President of ECB Trichet addressing Internal Market and Services Directorate of the European Commission, in Brussels (0745 GMT)
• EUR German PPI m/m (0700 GMT)
• CAD Core CPI  m/m (1100GMT)
• CAD CPI m/m (1100 GMT)
• CAD Core Retail Sales m/m (1230 GMT)
• CAD Retail Sales m/m (1230 GMT)

Saturday
• USD Fed Chairman Bernanke Speaks (1300 GMT)

Market Commentary

The cost of living in the US was unchanged in February, underlining the Federal Reserve’s prediction that inflation will remain low as the economy continues to recover. It is the first time the consumer price index did not rise since it decreased in March 2009 and followed a 0.2% gain in January according to figures released by the Labor Department in Washington yesterday. Excluding food and energy costs the core index rose by 0.1% in line with forecasts, capping the smallest year on year gain since 2004. Markets have remained very competitive with big retailers such as Wal-Mart keeping prices low as unemployment nears 10% and foreclosures mount. The lack of inflation is one of the reasons why the Federal Reserve maintained the benchmark interest close to zero earlier this week.

Another Labor Department report yesterday showed fewer Americans filed first time claims for jobless benefits last week, for the third consecutive time, a sign that the labor market is improving. The number of first time jobless applications dropped by 5,000 to 457,000 in line with expectations.

Growth in the manufacturing sector is continuing, manufacturing in the Philadelphia region expanded in March at the fastest pace so far this year. The Federal Reserve Bank of Philadelphia’s general economic index rose to 18.9%, in line with expectations. Earlier this week figures from the New York Fed showed business activity in that region expanded for an eight straight month in March. Another central bank report showed industrial production increased in February for an eighth month and capacity utilization rose to the highest level in more than a year. Fed policy makers this week said the economic recovery is still constrained by unemployment and persistent weakness in real estate and pledged to keep the benchmark interest rate near zero for an “extended period.”

The USD gained 0.9% on the Euro yesterday fuelled by renewed uncertainty surrounding the proposed bailout for Greece. It closed trading at EUR 1.3607. Tomorrow US Fed Chair Ben Bernanke is due to deliver a speech to the Independent Community Bankers of America National Convention. It is expected that he will continue to defend the position of the Federal Reserve in relation to the bank’s supervisory role.

In the UK, government borrowing could be less than forecast this financial year after better than expected figures for February. The UK government borrowed £12.4bn in February, less than economists had expected, according to figures released by the National Statistics Office yesterday. The figure for January was also revised sharply downwards, to £43m from £4.3bn. Borrowing in the current financial year has now reached £131.9bn, but analysts say the full-year total may be less than the government’s £178bn forecast. Until recently, most analysts thought the government’s borrowing forecast was too optimistic.

The borrowing figure for February was not as bad as some had feared, partly because of the rise in VAT at the beginning of this year and new taxes on bankers’ bonuses. The government is also paying out slightly less in benefits because unemployment is falling. The figures will give a boost to Gordon Browns Labor government ahead of next Wednesday’s budget.
Sterling gained 1.1% on the US Dollar yesterday ending the session at USD 1.5245. It rose 0.31% against the Euro closing trading at EUR 0.8931.

In Canada foreign investment rose more than expected in January to CAD 11.83bn (USD 11.71bn) from CAD 11.4bn in December. But the Canadian Dollar depreciated against its American counterpart for the first time in thirteen days as crude oil prices, the nation’s biggest export fell. On Wednesday and early yesterday the Loonie traded within one cent parity with the US Dollar before dropping 0.23% from its opening to close the day at USD 1.0131.
However yesterday’s setback looks set to be temporary as the Canadian Dollar has gained 6% against the US Dollar over the past three months, in part because of the oil-rich nation’s plans to erase its budget deficit by 2015 and the prospects of a quick recovery that may prompt the Bank of Canada to raise interest rates. Later today Canadian monthly retail sales figures as well as the consumer price index numbers are due to be released.

Finally in Europe Greek Prime Minister George Papendreou has given EU leaders a one week deadline to come up with a concrete rescue plan for Greece and he has challenged Germany to abandon its doubts about any such rescue package. Papandreou said he may turn to the International Monetary Fund to overcome Greece’s debt crisis unless leaders agree to set up a lending facility at a summit due to be held on March 25th and 26th. The IMF option has already been dismissed by European Central Bank President Jean-Claude Trichet and French President Nicolas Sarkozy, who say it would only demonstrate that the EU can’t solve its own crises. Signs that the uncertainty in the Euro Zone is far from over caused the Euro to tumble 0.85% against the US Dollar yesterday; it closed trading at $1.3617. It slid against 15 of its 16 major peers this week and looks set to have made its biggest weekly loss since the start of February by close of trade today.

Later this morning the German Purchase Price index is due to be released. After an unexpectedly strong rise of 0.8% last month, double the expectations, it is expected to gain 0.1% this month. Also this morning, President of the European Central Bank, Jean-Claude Trichet is addressing the European Commission in Brussels. His comments will be closely watched for any indications that European leaders are getting closer to a unified resolution on an assistance package for Greece.

By Yan Petters – For the past 6 months, the GBP/JPY cross has dropped constantly, eventually reaching a year low at the rate of 132.02. However, promptly after falling so far, the pair began to correct upwards, and has reached the 139.35 level two days ago. Could the bullish correction proceed? Not according to several technical indicators which claim otherwise.

• The chart below is the GBP/JPY 4-hour chart by ForexYard.
• The technical indicators used are the Bollinger Bands, the Slow Stochastic, the MACD/OsMA and the Relative Strength Index (RSI).
• For those of you who’re not sure how to use technical analysis – this is a unique example that displays how technical analysis should be used correctly.
• Take a look at the different lens – they all reflect the motion of 3 different technical indicators. See how they all move towards the same directions over and over again. This has provided you an excellent opportunity to rely on 3 different leading technical signals at the same time. This increases dramatically the chances that the cross will follow the same path, and indeed as can be seen on the chart – the cross has moved in the exact same direction.
• Currently, the Slow Stochastic, the MACD and the RSI all point down, suggesting that the bullish correction has reached its limit and a downward movement should take place.
• The next potential support levels are: 135.00, 133.80 and 132.00.
• If the cross will fail to breach the next support level, the resistant levels are: 138.60 and 139.40.

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.