Month: March 2010

Source: ForexYard

The U.S dollar rose on Thursday amid signs of increasing tensions within Europe over an aid plan for the debt-strapped Greek government. The Dollar also received support from some discussion in the market about the possibility that the Federal Reserve will raise the discount rate sooner than previously slated.

Economic News

USD – Dollar Rises to a 1 Week High vs. the EUR

The U.S currency was near a one-week high against the EUR as a report showed that manufacturing in the Philadelphia region expanded in March at the fastest pace this year. The improved U.S. economic outlook and very modest policy tightening outlook continue to highlight the U.S.’s relative economic growth, providing support for the U.S currency.

The currency was also bolstered as economists said the Federal Reserve may raise the discount rate, charged on direct loans to banks, before the start of the next two-day meeting on April 27.

The greenback also got a boost versus the EUR Thursday after a spokeswoman for the International Monetary Fund said Greece hadn’t approached the IMF for financing, prompting some USD buying.

EUR – EUR Down to 17-mth low vs. Swiss franc on SNB comments

The EUR stabilized but remained under pressure on Friday on renewed concern about Greece after Athens said it may not be able to achieve its promised deficit cuts if its borrowing costs remain so high. The European currency was set for its biggest weekly loss since the start of February on concern Greece will fail to secure financial assistance from the European Union. The EUR declined to $1.3620 from $1.3735 and slipped 0.9% versus the Japanese currency to 122.95 yen.

The European single currency also hovered around a 17-month low against the Swiss franc after Swiss National Bank officials said on Thursday that Swiss firms and consumers should prepare for rising borrowing costs as interest rates cannot stay low forever. The EUR edged down 0.1% against the Swiss franc to 1.4390 after falling as far as 1.4355 francs Thursday,, its weakest level since October 2008.

The EUR remains on a downward trend as the market has been redirected to worries over Greece. Uncertainties over the prospects for a Greek debt bailout have not been wiped away, analysts said. As for today, without major economic events the market will likely be driven mostly by supply and demand. Near term support for the EUR is seen around $1.3500 as the currency stayed above that level last week.

JPY – Yen Gains as Uncertainty over Greece Persists

The Japanese yen gained broadly after investors found no new reason to sell the currency further after a flurry of media reports that the Bank of Japan is leaning towards monetary policy easing this week, prompting traders to trim short yen positions. The Yen inched up as investors locked in profits against the EUR due to a lack of progress on a financial aid package for debt-laden Greece. The currency rose to 123.80 per euro from 124.06 yesterday and 0.3% against the USD.

The JPY may fall to as low as 100 per U.S. dollar as the Federal Reserve raises interest rates faster than the Bank of Japan, according to analysts. The Fed may increase its benchmark as early as the fourth quarter while higher rates in Japan are still some time away, they said. The BOJ will not begin to increase rates until the latter half of the fiscal year, thus weakening the Yen as higher yields in the U.S. lure away investors.

OIL – Crude Declines on Firmer Dollar

Crude oil traded lower on Thursday, down 73 cents, or 0.9% as hesitations over European plans to help Greece pressured the EUR, lifted the U.S dollar and weighed on commodities.

Crude oil dropped for a 2nd day amid low fuel demand in the U.S., the world’s biggest energy consumer. The commodity’s price was slipping and as a firmer dollar damped the investment appeal of commodities. Oil traded around $82 a barrel after the dollar gained against the euro on speculation Greece may fail to secure financial assistance from the European Union. Adding pressure to Crude was a report showing seaborne oil exports by OPEC, excluding Angola and Ecuador, will rise by 70,000 barrels per day in the four weeks to April 3.

Technical News

EUR/USD

The daily chart shows the price has made a significant downward move back inline with its long term downward trend. The breakout that began at the upper border of the Bollinger Band has crossed below the 20-day moving average line, indicating a price move to the lower Bollinger Band is possible. The MACD histogram is also sloping downwards, indicating strong momentum for the pair. Traders may want to go short with a price target of the lower Bollinger Band.

GBP/USD

The pair has made a move lower as the daily chart’s upward sloping trend line on the 7-day Relative Strength Indicator has been broken. However, the pair has stalled repeatedly at the support level of 1.5010. Traders should watch for a break below this support line and enter short with a price target of 1.4850.

USD/JPY

Traders can see from the daily chart’s Bollinger Bands that the pair has been consistently trading above the 20-day moving average for the past 2 weeks. This indicates a strong up trend. But the pair faces a staunch resistance line at the price of 90.80. Traders may want to wait for the price to rise to this resistance level and go short with a take profit level at the 20-day moving average line of the Bollinger Bands.

USD/CHF

While the pair is currently range trading between 1.0560 and 1.0590 and with most indicators floating in neutral territory, an upward correction may take place later today as the RSI on the daily chart is floating near the oversold territory, indicating an imminent upward movement. Going long for today may be advised.

The Wild Card

NZD/JPY

The pair may experience some downward correction today as the 8 hour and daily chart’s RSI is floating in the overbought territory, signaling an imminent downward movement. Forex traders may be advised to go short on the pair.

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.

Comments from SNB board member that rates will not be able to stay low indefinitely caught investors by  surprise. Lately some positive signs have emerged from Switzerland showing private consumption rose  2.05% and unemployment topped out at 4.5%. In the SNB meeting last week the SNB reiterated it is  committed to keep the CHF stable against the Euro to tackle the weak exports and support the Swiss  industry. In addition the Central Bank also pointed some signs of economic recovery  are emerging signaling  Swiss benchmark rates could rise from their record low of 0.25%.Neverthless with the Swiss economic  recovery still threatened by the strengthening CHF and inflation figures still within rage investors were  betting rate hikes in Switzerland are not imminent.  However the comments made yesterday from the SNB member that the market should get used to higher rates in the future spurred bets that higher rates in Switzerland might be closer then previously assessed. Investors reacted rather swiftly to the comments and curbed long Dollar bets against the CHF and crowded heavy bids on EUR/CHF pushing it below 1.44. Click for CHF technical analysis

Rate hikes in Switzerland still look limited

Although the Swiss central bank is keen to show the SNB will not allow any bubbles to take place, folding back emergency measures and now suggesting higher rates, the SNB cannot yet afford a long term tightening move. The Swiss economy is highly dependent on the EU as the EU posses the largest trading partner of Switzerland. Swiss EU trading partners such as Germany are experiencing flat growth and weak job market a continuous tightening move could dent Swiss recovery very rapidly, weighing on Swiss exporters and pushing down consumer spending.

Daily Forex Market Analysis provided by eToro

Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.

© 2009 eToro Blog.

USDCHF broke above 1.0639 resistance, suggesting that a cycle bottom has been formed at 1.0506 level on 4-hour chart. Sideways movement above 1.0506 is expected in a couple of days. Key resistance is now at the falling price channel on 4-hour chart. As long as the channel resistance holds, one more fall towards 1.0450 is possible. However, a clear break above the channel resistance will indicate that the fall from 1.0898 has completed, then the following uptrend could take price back to re-test 1.0898 resistance.

Daily Forex Forecast

By GCI Fx Research

€

The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3585 level and was capped around the $1.3740 level.  The common currency came off significantly amid rumours the Federal Reserve planned an intermeeting increase in the discount rate later today.  While a move in the discount rate would probably not have a major impact on market liquidity – such a move would be largely symbolic – it would be the latest indication that policymakers are looking to normalize policy as much as possible without lifting the federal funds target rate.  The Fed’s balance sheet increase US$ 25.5 billion last week to US$ 2.31 trillion.  Also weighing heavily on the common currency was a report that Greek Prime Minister Papandreou called on the European Union to indicate how much and what type of financial assistance would be available if Greek requires help in addressing its mammoth fiscal imbalances.  Germany apparently backtracked on the issue and instead of suggesting aid some could from a European Union partner or bilateral credit facility, Berlin is said to now support assistance from the International Monetary Fund.  Some believe the IMF may not be able to provide enough financial assistance to Greece.  European Union officials are planning to convene at a summit next week and this topic will be prominent.  Earlier in the week, the European Union signaled it was ready to provide financial assistance to Greece if required.  Data released in the eurozone today saw the EMU-16 January current account balance print at -€8.1 billion compared with the revised prior reading of +€ 2.3 billion.  Also, the eurozone trade balance worsened to -€8.9 billion from the revised reading of +€ 4.4 billion.  In U.S. news, the February consumer price index was up 0.0% m/m and 2.1% y/y while the ex-food and energy core rate was up 0.1% y/y and 1.3% y/y.  Additionally, weekly initial jobless claims fell 5,000 to 457,000 while continuing jobless claims grew to 4.579 million.  The Q4 current account deficit worsened to –US$ 115.6 billion, the Philadelphia Fed March index rallied, and February leading indicators fell back to +0.1%.  Overall, U.S. economic data continue to be mixed-to-better but there does not appear to be any traction evident in the U.S. labour market yet.  Federal Reserve Chairman Bernanke criticized the so-called Dodd plan for regulatory oversight that seeks to limit the Fed’s regulatory and supervisory powers.  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 ¥89.75 level and was capped around the ¥90.80 level.  Bank of Japan 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.”  Reuters released its quarterly corporate sentiment survey ahead of the release of next month’s quarterly Tankan survey and it evidenced a significant increase in business confidence.  Yesterday, Bank of Japan expanded its quantitative easing program. The central bank doubled its three-month lending facility to ¥20 trillion.  The move is not likely to have a significant impact on the real economy and may marginally increase liquidity.  The Policy Board vote in favour of the expansion was split and this suggests it may be difficult for BoJ policymakers to ease policy further, no matter how much pressure the government applies on the central bank.  Data released in Japan overnight saw the January leading index decline to 96.7 from 97.1 while the January coincident index improved to 100.1.  Data to be released overnight include February Tokyo-area department store sales, February nationwide department store sales, and the January all-industry activity index.  “Mr Yen” Sakakibara reported the U.S. dollar is still the global dominant reserve currency and said the U.S. appears to be moving away from its long-standing U.S. “strong dollar policy.”  The Nikkei 225 stock index lost 0.95% to close at ¥10,744.03. 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 ¥122.65 level and was capped around the ¥124.25 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥137.00 figure while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥84.75 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8264 in the over-the-counter market, up from CNY 6.8259.  People’s Bank of China reported the first quarter business climate index rose 2.2% q/q, the fourth quarterly expansion.  U.S. Ambassador to China Huntsman verbally intervened today, 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 and there is talk that final private demand in China is increasing.

₤

The British pound depreciated vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.5215 level and was capped around the $1.5325 level.  Data released in the U.K. today saw the March CBI quarterly industrial trends survey improve to -37 from the prior reading of -39.  February public sector net borrowing rocketed higher to £12.0 billion with the public sector net cash requirement at £7.7 billion.  Also, February mortgage approvals came in at 48,000.  Bank of England yesterday reported it is considering an extension of the eligible collateral at its discount window.  Cable bids are cited around the US$ 1.4455 level.  The euro moved lower vis-à-vis the British pound as the single currency tested bids around the US$ 0.8915 level and was capped around the £0.8970 level.

CHF

The Swiss franc weakened vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.0645 level and was supported around the CHF 1.0530 level. Data released in Switzerland overnight 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 1.4355 level while the British pound moved lower vis-à-vis the Swiss franc.

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.

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By Fast Brokers – The AUD/USD has dipped back below its psychological .92 level, giving back some of its weekly gains in the process.  The Euro is undergoing a heavy selloff in reaction to another psychological flare taking off in the EU.  Greece has set the stage for a showdown with Germany by giving the EU one week to come up with sufficient measures for financial assistance before Greece heads to the IMF for help.  Uncertainty in the EU and resulted in a broad based Dollar rally, dragging the Aussie and the Cable lower with it.  However, losses in the Aussie have been relatively minimal thus far compared to the EUR/USD.  The Aussie has been performing comparatively well in general due to the RBA’s tight monetary policy stance amid continual strength in Australia’s economy.  However, it remains to be seen whether the Euro’s downturn will spill over further into other major Dollar pairs.  Therefore, investors should keep a sharp eye on the Aussie and its interaction with present technical levels.  Australia has been quiet on the data front this week, leaving its movements up to broad-based activity in the risk trade.  Hence, it will be interesting to see if the Euro can manage to stabilize after today’s hefty selloff and allow the Aussie to remain locked into its uptrend.

Technically speaking, the Aussie multiple downtrend lines serving as technical barriers along with previous March highs.  Our 4th tier runs through previous 2010 highs and is our last foreseeable downtrend line.  Hence, a breakout beyond our 4th tier could signal more substantial topside movements over the near-term.  As for the downside, the Aussie has multiple uptrend lines serving as technical cushions along with intraday, 3/17, and 3/16 lows.

Price: .9192

Resistances: .9196, .9207, .9215, .9229, .9239, .9250

Supports: .9184, .9177, .9171, .9161, .9153, .9139

Psychological: .92, .93, 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 recovering from a hefty intraday pullback which sent the currency pair tumbling below its highly psychological 90 level.  There isn’t much news to infer why the USD/JPY experienced such a sizable intraday decline, which leads us to believe the movement could be purely technical.  Regardless, the currency pair is back above 90and is strengthening in reaction to the U.S. data set.  Today’s U.S. data had a positive bias with the Current Account and Philly Index both topping expectations while Unemployment Claims and CPI remained relatively unchanged.  As we mentioned in our previous post, positive U.S. data has the potential to impact the USD/JPY considerably since it gives reason for investors to speculate that the Fed will tighten before the BoJ.  The BoJ is still under pressure from the DPJ in regards to fighting deflationary pressures.  Hence, positive U.S. data leads investors to favor the Dollar over the Yen due to the Fed’s inclination to have a tighter monetary policy stance down the road.  The data wire will be relatively quiet tomorrow, meaning the USD/JPY could opt to stick around its present trading range barring any key psychological developments.

Technically speaking, the USD/JPY faces multiple downtrend lines along with intraday, 3/17, 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 3/17 lows.  .

Present Price: 90.40

Resistances: 90.45, 90.52, 90.58, 90.63, 90.69, 90.75

Supports: 90.36, 90.29, 90.21, 90.14, 90.08, 90.01

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 is drifting lower today as the currency pair continues to cool from this week’s impressive topside run.  More uncertainty in the EU has had a negative psychological impact on the risk trade as the whole with the Aussie and gold also being dragged lower.  However, the Pound is continuing to exert a relative strength, highlighted by further weakness in the EUR/GBP.  Yesterday’s surprisingly strong employment data along with slight inflation concerns from the BoE has given investors a reason to be positive about the Pound again despite a dead heat in the parliamentary elections.  That being said, the UK does have the potential for negative psychological events of its own, particularly concerning elections and the upcoming budget announcement.  Today’s net borrowing data revealed a slight decline, a positive development for a UK government which has accumulated considerable debt.  Meanwhile, CBI Industrial Orders declined, reflected the setback we saw in Manufacturing Production last week.  Today’s U.S. data was positive mixed with the Philly Index and Current Account data topping expectations while Unemployment Claims and CPI remained relatively flat.  The Dollar has shown a mixed reaction thus far, and it will be interesting to see whether the Cable can continue to consolidate regardless of weakness in the Euro.  Meanwhile, the Cable is still trading well above our previous downtrend lines, a positive development for the currency pair’s medium-term outlook.  However, the Cable must now deal with what is our 3rd tier downtrend line, which runs through 1/28 highs, or the 1.625 area.  Tomorrow’s data wire is relatively quiet, meaning currency pairs could follow their respective weekly momentums unless there is another psychological development.

Technically speaking, the Cable has multiple uptrend lines serving as technical cushions along with intraday and 3/17 lows.  As for the topside, the Cable faces multiple downtrend lines along with intraday and 3/17 highs.  Our new 3rd tier downtrend line could prove to be a key barometer since it runs through 1/28 highs, or the 1.6275 area.

Present Price: 1.5279

Resistances: 1.5288, 1.5318, 1.5334, 1.5354, 1.5377, 1.5397

Supports:15272, 1.5252, 1.5236, 1.5218, 1.5205, 1.5184

Psychological: 1.53, 1.54, March 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 EUR/USD has undergone a hefty selloff today amid a rise in uncertainty in the EU region.  Word has spread that Germany is reconsidering the option of Greece going to the IMF for financial assistance.  Hence, it seems Germany is trying to call Greece’s bluff since the government recently stated that it will head to the IMF if the EU cannot produce an attractive rescue package.  Therefore, despite adamant support from France, Germany is still not on board with helping out Greece.  The reappearance of uncertainty has delivered a negative psychological blow to the EUR/USD and is resulting in further relative weakness in the Euro, as highlighted by a pullback in the EUR/GBP.  That being said, the EUR/USD has managed to stay above 3/15 lows for the time being and the currency pair is still quite a distance away from our key 1st tier downtrend line.  However, we will have to monitor how the remainder of the trading session plays out to determine whether the recent uptrend has been snapped.  Investors should keep an eye out for our 1st tier downtrend line since it runs through 2010 highs, or the 1.4575 area.  The Dollar is showing a mixed reaction to today’s U.S. economic data thus far.  Unemployment Claims and CPI printed about in line with analyst expectations while the Current Account and Philly Fed index each came in solid.  Hence, today’s data set does have a positive U.S. bias.  The EU released Current Account data of its own, which printed far below analyst expectations, signaling that export demand may have stalled.  Germany will release its PPI tomorrow along with a public address from Trichet.  However, investors will likely be focusing on any new developments regarding Greece’s fiscal situation.

Technically speaking, the EUR/USD faces multiple downtrend lines along with intraday, 3/3, and 3/12 highs.  As for the downside, the EUR/USD has several uptrend lines serving as technical cushions along with 3/15 and 3/10 lows.  Meanwhile, the psychological 1.35 area is still serving a technical cushion while 1.40 serves as a key psychological barrier.
Present Price: 1.3665

Resistances: 1.3684, 1.3693, 1.3704, 1.3713, 1.3725, 1.3740

Supports:  1.3667, 1.3653, 1.3637, 1.3620, 1.3603, 1.3586

Psychological: March and February Lows, 1.35, 1.40, February 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 CountingPips.com

The U.S. Dollar has been on the rise in the forex markets on a day filled with U.S. economic data while the American stock markets have traded close to unchanged today. The dollar has advanced versus the euro, British pound, Canadian dollar, Swiss franc, Australian dollar and the Japanese yen while trading virtually unchanged against the New Zealand dollar, according to currency data from Oanda at 11:34 am EST.

The U.S. stock markets are having a mixed session today with the Dow gaining over 5 points, the Nasdaq decreasing by over 1 point while the S&P 500 is down by a couple of points. Oil has edged lower to $81.96 while gold has been unchanged at the $1,124.00 per ounce level.

Leading Indicators continue to rise

U.S. economic news releases out of the U.S. today showed that the U.S. Leading Indicators Index published by the Conference Board today increased for the eleventh straight month in February. The Leading Indicator Index, which measures future economic activity, rose by 0.1 percent in February following a 0.3 percent gain in January and a 1.2 percent rise in December. February’s advance matched the market forecasts which were predicting the gain of 0.1 percent for the month.

The coincident index, which is viewed as a measure of the current economic activity, increased by 0.1 percent in February while the lagging index rose by 0.3 percent after declining by 0.2 percent in January.

An economist at the Conference Board, Ken Goldstein commented on the report saying, “The indicators point to a slow recovery this summer. Going forward, the big question remains the strength of demand. Without increased consumer demand, job growth will likely be minimal over the next few months.”

Weekly Jobless Claims edge down by 5,000

A separate government release by the U.S. Labor Department showed that weekly U.S. jobless claims decreased in the week that ended on March 13th. New jobless claims fell to a total of 457,000 unemployed workers, a decrease over the prior week by 5,000 workers. The 4-week moving average of unemployed workers fell by 4,250 from the prior week to a total of 471,250.

Meanwhile, workers seeking continuing claims for unemployment benefits for the week ending March 6th increased for the week. Continuing claims rose by 12,000 workers to a total of 4,579,000 unemployed workers. The four week moving average of continuing claims dropped by 8,000 to 4,575,250.

US Consumer Prices unchanged

U.S. Consumer Prices were unchanged in February as the energy index decreased for the first time in over six months, according to a report released today by the U.S. Department of Labor. The Consumer Price Index, a key measurement of inflation, had increased by 0.2 percent in each of the last five straight months dating back to September 2009 before February’s flat data. Market forecasts were predicting that consumer prices would edge up by 0.1 percent for the month.

The annual rate of increase in consumer prices in February was 2.1 percent higher than the February 2009 level following January’s annual increase of 2.6 percent. The energy index declined by 0.5 percent in February after increasing by 2.8 percent in January. Food prices rose by 0.1 percent in February after a 0.2 percent increase in January and have gained for fours straight months.

The core inflation reading, excluding food and energy prices, increased by 0.1 percent for the month, matching market forecasts expecting a 0.1 percent gain. The annual rate of core inflation increased by 1.3 percent for February following up an increase of 1.6 percent in January.

Philly Fed Manufacturing Business Survey improves in March

The Philadelphia Manufacturing Business Index released today by the Philadelphia Federal Reserve Bank showed that its survey increased in March and has remained in positive territory for the seventh straight month. The Philly general business diffusion index increased to 18.9 in March after February’s score of 17.6. A positive score is considered growth in that business sector while a negative score is considered a contraction.

Continuing to show positive manufacturing levels this month in the business survey were the indexes for general activity, employment, unfilled orders, delivery times and inventories while new orders, future shipments and planned capital spending all fell in March.

EUR/USD Chart – The euro dropping today versus the US dollar in forex trading and breaking through the rising support trendline on the hourly chart. The EUR/USD has touched below the 1.3600 level for the first time in over a week. This pair had advanced to over a one-month high at 1.3818 in yesterday’s early trading, a level not touched since February 9th.

By Russell Glaser – After consolidating just above the 50% retracement level of the previous uptrend, the EUR/USD has begun to fall back inline with its long term downward trend line. A Forex technical analysis indicates further downward movement in the pair could be possible with a short term target the S3 support level.

The dollar strengthened this morning during the early hours of the European trading session and has left the EUR/USD in a position to make a larger move lower. The price has dropped below the S2 level of 1.3667.

The daily chart shows the long term trend line that began in early December at the height of the previous bullish run. The pair has maintained this trend line after consolidating for the past 3 weeks, arriving at the 50% retracement level. Since then the pair has made a breakout lower.

The 7-day Relative Strength Indicator shows the pair has broken below the 70 level, indicating a sell signal. We can also see the RSI line has breached an upward sloping trend line, providing further evidence of a significant downward move in the price.

Also supporting a price move lower is the downward sloping MACD histogram. This shows the downward move may be gaining momentum for a further run lower.

A target for Forex technical analysis traders may be the S3 support level of 1.3575.

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.