Month: April 2010

By Fast Brokers – The Aussie is consolidating above 4/8 lows as the risk trade weakens a bit across the board.  A decline in the Aussie could be considered healthy since the currency pair just set new 2010 highs.  Meanwhile, even though Australia has been quiet on the data wire thus far this week, chatter has been emanating from RBA members that recent rate hikes may be having their desired effect, meaning the central bank could keep its policy in check next meeting should economic fundamentals wane.  That being said, the Aussie could follow its correlation with the overall risk trade more closely over the near-term until investors receive Australia fundamentals or psychological news concerning monetary policy.  Hence, the Aussie could lose a bit of its relative strength with investors locking in some profits.  Meanwhile, although Australia will be relatively quiet, the U.S. earnings season is kicking off and investors will also digest U.S. Retail Sales and CPI data tomorrow, meaning activity could pick up across the FX markets over the next 24-48 hours.  Of more importance to the Aussie will be Thursday’s key data set from China.  Should China’s economic recovery cool due to tighter liquidity measures, this could place some downward pressure on the Aussie due to lowered expectations for commodity demand, and vice versa.  Regardless, the Aussie does have a solid support system in place due to the extent of this year’s upswing, meaning the currency pair will need to be dealt a heft blow to be knocked out of its current uptrend.

Technically speaking, the Aussie faces technical barriers in the form of intraday, 4/12, and 11/17/09 highs.  As for the downside, the Aussie has multiple uptrend lines serving as technical cushions along with intraday, 4/6, and 3/31 lows.  Additionally, the psychological .92 level could serve as technical cushion over the near-term.

Price: .9256
Resistances: .9266, .9280, .9291, .9306, .9316, .9330, .9342
Supports: .9247, .9234, .9215, .9202, .9190, .9104
Psychological: .93, .92, November 2009 highs, April 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 USD/JPY is creeping lower today as the Yen appreciates across the board.  We’re witnessing a bit of risk-averse activity going on around the marketplace as the risk trades pullback and gold weakens below $1150/oz.  Alcoa’s earning’s missed analyst estimates, worrying investors that this earnings season may not be as strong as anticipated.  Additionally, some analysts and investors have vocalized their concern that the EU’s relief package is not sufficient to keep Greece from tail-spinning into more troubling fiscal conditions.  Pimco’s El-Erian highlighted this group by saying Pimco is not interesting in purchasing Greek bonds at the moment, denting investor confidence gained by the EU accord.  This combination of events has benefitted the Yen as a safe haven, placing downward pressure on the USD/JPY in the process.  Meanwhile, the U.S. Trade Balance revealed a stronger than expected pickup in import demand, a positive sign for tomorrow’s Retail Sales data.  Such a development is a positive for Japan’s export-reliant economy, and it will be interesting to see how the USD/JPY responds to tomorrow’s data flows.  The U.S. will also release CPI data, meaning tomorrow’s trading session could bring higher volatility.  Japan will be quiet on the data wire tomorrow, leaving the U.S. in the spotlight unless Shirakawa provides investors with any unknown news regarding the BoJ’s monetary policy.

Technically speaking, the USD/JPY faces technical barriers in the form of intraday, 4/9, and 4/7 highs.  As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with intraday, 3/30, and 3/25 lows.  Additionally, the psychological 93 level could continue to serve as a psychological cushion for the near-term.

Present Price: 92.91
Resistances: 93.04, 93.14, 93.35, 93.45, 93.54, 93.71, 93.86
Supports: 92.84, 92.70, 92.59, 92.40, 92.26, 92.15, 91.93
Psychological: .94, .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 Cable is fluctuating around its 1.54 level as investors dissect today’s Trade Balance data.  The UK Trade Balance revealed a lighter than expected deficit, confirming the improvements we’ve seen in Manufacturing PMI data as of late.  The declining deficit is a Pound positive, highlighted by weakness in the EUR/GBP.  However, the FX markets are relatively tame today following yesterday’s high volatility.  With investor uncertainty concerning Greece abating, focus now turns to U.S. data and earnings.  Alcoa kicked off the season with a disappointing release, though we are just getting started.  It will be very interesting to see how the Dollar reacts to earnings, specifically whether strong earnings would lead investors to favor the Dollar due to comparative economic performance or towards the risk trade instead.  The U.S. will also release key Retail Sales and CPI data tomorrow, meaning volatility could return in a hurry.  The UK will be quiet on the data wire tomorrow, meaning attention will likely be focused in on the U.S barring any market moving psychological developments.  With the UK parliamentary election around the corner there remains the potential for surprise psychological events.  Meanwhile, investors will be looking to see if the Cable and EUR/USD can sustain their new upward momentums and establish a more consistent uptrend pattern.
Technically speaking, the Cable faces technical barriers in the form of intraday, 4/12, 2/23, and 2/17 highs.  Additionally, the psychological 1.55 level could serve as a solid obstacle should it be tested.  As for the downside, the Cable has fresh uptrend lines serving as technical cushions along with intraday and 4/8 lows.  Additionally, the psychological 1.54 area could continue to serve as a solid support over the near-term.

Present Price: 1.5421
Resistances: 1.5436, 1.5453, 1.5470, 1.5494, 1.5522, 1.5539
Supports: 1.5414, 1.5388, 1.5358, 1.5337, 1.5311, 1.5292
Psychological: 1.55, 1.54, 1.53, February highs and April 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 is hanging around its psychological 1.36 area as FX markets yield limited activity due to a relatively quiet data wire.  The Euro did receive a bit of good news today in the fact that Greece’s debt auction received more buyers than anticipated, implying renewed investors confidence in the region following the EU’s $40 billion aid offer.  However, Pimco’s El-Erian said that the investing giant is not interested in Greek bonds under the assumption that the EU’s offer will prove insufficient in abating Greece’s fiscal crisis.  Therefore, investors are receiving mixed signals on the news wire today, keeping the EUR/USD range bound.  Additionally, a cool down from yesterday’s topside breakout is reasonable as investors lock in profits.  That being said, it will be important to see the EUR/USD sustain its upward momentum so that this week’s upswing can develop into a more reliable uptrend.  The EU will be quiet on the data wire tomorrow, leaving the EUR/USD under the near-term influence of U.S. data and comments from Bernanke.  The U.S. will release Retail Sales and CPI data, which each tend to have a considerable impact on the greenback across the board.  Hence, investors should gauge the Dollar’s reaction to tomorrow’s data flow, particularly if it prints better than expected.  Strong U.S. data could lead investors to the Dollar via comparative economic strength.  Investors will also be digesting earnings data as the reports kick off.

Technically speaking, despite today’s upswing the EUR/USD faces fresh downtrend lines along with intraday, 3/3, and March highs.  As for the downside, the EUR/USD has new uptrend lines serving as technical cushions along with intraday and 3/5 lows.  Additionally, the psychological 1.36 and 1.35 levels could serve as technical cushions for the near-term.

Present Price: 1.3591
Resistances: 1.3597, 1.3613, 1.3624, 1.3632, 1.3642, 1.3655
Supports:  1.3586, 1.3577, 1.3563, 1.3551, 1.3540, 1.3531
Psychological: April and March highs, 1.35, 1.36, 1.37

(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 United States trade deficit widened by more than expected in February, according to a release by the Commerce Department today. The U.S. trade deficit increased by 7.4 percent or $2.7 billion as the deficit leveled at $39.7 billion in February following a revised deficit of $37.0 billion in January.

The data surpassed market forecasts that were expecting a deficit of approximately $39.0 billion for the month.

The U.S. had a total of $143.2 billion worth of exports in February which was an increase of $0.3 billion from January’s total. February also saw an increase in imports with a total of $182.9 billion worth of imports compared with $179.8 billion in January for a increase of $3.0 billion for the month.

The U.S. trade deficit with China decreased in February with a $16.5 billion shortfall after a deficit of $18.3 billion in January. Other notable U.S. trade deficits in February were the deficits with the European Union at $5.3 billion, Mexico at $4.8 billion, Japan at $4.3 billion and OPEC at $6.4 billion.

The U.S. trade surpluses with other countries for February included Hong Kong at $1.6 billion, Australia at $1.0 billion and Belgium at $0.7 billion.

Forex: US Dollar mixed in trading today. Stocks lower.

The U.S. dollar has been mixed in the forex markets while the American stock markets have traded lower today. The dollar has advanced versus the euro, Canadian dollar, New Zealand dollar and Australian dollar while declining against the Japanese yen and falling slightly to the Swiss franc in forex trading before noon in the US trading session.

The dollar is trading almost unchanged against the British pound sterling as the GBP/USD hovers around the day’s opening rate of 1.5368.

The U.S. stock markets are having a negative session so far today with the Dow falling around 30 points, the Nasdaq decreasing by over 5 points while the S&P 500 is down by over 4 points at time of writing. Oil has traded lower to $82.80 per barrel while gold has fallen by $14.10 to trade at the $1,147.50 per ounce level.

USD/JPY Daily Chart – The US Dollar falling against the Japanese Yen in Forex Trading today. The USD/JPY pair has trended lower the past week after touching its highest point in trading since late August 2009 at the 94.70 exchange rate. The pair is currently trading near the 23.6 fibonacci retracement level on the move from 88.13 on March 4th to the recent high at 94.70 on April 2nd.

By Russell Glaser – The stock index just barely touched above its record high of 11,000 following the release of the Greek bailout package. The upward move for the index has not come from large one time gains, but from small increments of roughly 40 points on average. Traders may have the urge to pick a top at this point and go short, but better alternatives are available.

According to the daily chart, the bullish streak appears to be strong. The index has been consistently following a rising trend line since February, making contact numerous times along the way. The price is also trading above the 20 day moving average and the 50 day moving averages. We can also see the ADX 14 is floating at 43, level, indicating that the trend is strong. Typically we would like to see the ADX slanting upwards, but any reading above 40 is meaningful.

Now that the Dow has reached a new high, some traders may feel the need to go short as they believe the market has reached a new top. Before going short, traders may want to rethink. Trading against the trend can be dangerous. Traders looking to enter into this type of market may want to wait for a pullback to a Fibonacci retracement level before entering. The levels for the daily chart are listed below, but traders could also find a retracement using the hourly chart or the 4-hour chart to go long.

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 Greg Holden – The announcement of a bailout for Greece has put the EUR into a strong uptrend against all of its primary currency rivals. As a result, we’ve seen the Scandinavian currencies also dropping against this rising strength, but in a slightly muted fashion. The EUR/SEK pair is currently offering a good opportunity to learn how to properly use the ADX indicator, but also to show that now may be a good time to go long on this pair, as I’ll demonstrate.

– Point 1: What we’re seeing now is an almost-week-long uptrend on the EUR/SEK currency pair, shown by the line drawn at Point 1. I’ve also provided the price targets indicated by the Fibonacci retracement drawn over this chart which represent the next significant resistance levels (9.7920 and 9.8300, respectively).

– Point 2: The Williams Percent Range is offering the only note of caution for this pair. While other indicators are saying “Buy, buy, buy,” this indicator is highlighting the fact that today’s movement has pushed the pair slightly into the over-bought territory and could experience some delaying pressure at the first resistance level of 9.7920.

– Next up is the ADX (Average Directional Movement). The ADX indicator allows us to see a number of mathematical principles being calculated around this price movement and tells us the strength of the trend, and when used in conjunction with the Direction Momentum Indicators (DI) can also tell us the most likely direction of the trend by showing 2 different signals.

– Point 3: The first signal provided by the ADX is the green line below. This is the core aspect of this indicator and tells us the strength of the trend. The indicator is measured on a scale of 0 to 100. When the line is below 20 it is indicated as a weak trend that will likely change directions soon. Here we see the line is around 25, which tells us that the pair is trending and that it is a moderate trend.

– Point 4: The second signal is provided by the two DI’s. When the blue DI crosses above the red DI, this is a signal to Buy the pair, and vice versa when the blue crosses below the red. At Point 4 you can see that the blue has recently crossed above the red and is sustaining itself at this level. This gives us a solid indication that the trend is currently up, and the strength of the trend (shown at Point 3) is moderate.

EUR/SEK Daily Chart

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.

Forex Market Ideas by Finexo.com

Past events:
• CAD Housing Starts out at 197K, versus expected 201K, prior 200K
• USD Federal Budget Balance out at -65.4B, versus expected -64.0B, prior -220.9B
• GBP BRC Retail Sales Monitor y/y out at 4.4% versus expected 2.2%
• GBP RICS Housing Price Balance out at -1.3%, versus expected -1.1%, prior -1.6%
• AUD NAB Business Confidence out at 16, versus prior 19

Upcoming Events:
• GBP Trade Balance (0930GMT)
• USD Trade Balance (1330GMT)
• USD Import Price m/m (1330GMT)
• CAD Trade Balance (1330GMT)
• CAD NHPI m/m (1330GMT)
• USD Fed Chairman Bernanke Speaks ( tomorrow 0000GMT)

Market Commentary:
The Euro strengthened yesterday to its highest level in more than three weeks versus the U.S Dollar after news broke that Greece would be receiving an international rescue package worth as much as €45 billion ($61 billion) to help it avoid a default. Following the announcement of the of the “rescue plan” the single currency rose to $1.36906, appreciating as much as 1.4%, its biggest gain since last September. The Euro’s gain, which was its third increase in the past three days, sent the Dollar Index tumbling 1.3% to its lowest level since March 18th.

The 16-nation Euro-Zone finance ministers reported that they would offer Greece €30 billion in three-year loans in 2010 at about 5% interest. An additional €15 billion would come from the International Monetary Fund, resulting in what could possibly be the largest multilateral financial rescue ever attempted. The Greek official said the government would decide within a few days whether to ask for the aid, depending on whether market interest rates subside. For the time being, Athens will try and refinance its public debt on the bond market. This week, the Greek government will hold another bond auction that will surely be a test if the Euro Zone’s recent bailout plan has restored faith in the Greek bonds.

By yesterday’ close the single European currency has retreated from its near three week high against the USD as Greece prepares to sell €1.2Billion in 26 and 52 week bills. The Euro closed at $1.35924, down 0.71% from the day’s high.
The Japanese Yen rose, ending three days of losses versus the EUR, on speculation demand for Greece’s short-term debt will be weak at an auction today. Japan’s currency appreciated versus all 16 major counterparts after Asian stocks dropped, weakening demand for riskier investments. After closing yesterday at 126.119, the EUR/JPY continued to fall throughout this morning’s trading session, touching on a low of 125.690. Similarly, the USD/JPY fell during this morning’s Asian session- tumbling as much as 0.64% from yesterday’s closing price of 93.161, to hit a session low of 92.563.

Yesterday, the U.S posted a budget deficit for a record 18th straight month in March, reflecting gains in government spending to bolster the economy. The excess of spending over revenue declined to $65.4 billion last month, compared with the $220.9 billion reported last month, according to Treasury Department figures released yesterday in Washington. A deficit that’s forecast to reach a record $1.6 trillion this fiscal year illustrates the challenges facing President Barack Obama and Congress as they struggle to stimulate the recovery while keeping the budget gap manageable. Deterioration in the government’s balance sheet in coming years raises the risk of higher interest rates. Tonight, U.S Fed Chairman Ben Bernanke will speak. He will continue to speak tomorrow at the Joint Economic Committee where he will lay out his economic outlook.

Later today, there will be a lot of action on both sides of the US Canadian border, as both countries are set to simultaneously announce their trade balances (1330GMT). Last month, Canada reported a 0.8B surplus; however, the Canadian positive economic data was outshone by an unexpected decrease in the US trade deficit – which narrowed to 37.3billion. This time around, the US expects its trade deficit to widen to 38.4billion, while north of the border, Canada predicts that their trade surplus will remain consistent at 0.8billion. This double event usually causes a lot of volatility in the USD/CAD pair.

Also out at 1330GMT, Stats Canada will announce the New Housing Price Index (NHPI) for February. Prices of new homes in Canada have steadily been rising for the past seven months. January’s rise of 0.4% is expected to be repeated with a 0.5% increase in February. This report follows yesterday’s lower than expected Number of Housing Starts. Canadian housing starts dipped 1.5% in March to a seasonally adjusted annualized rate of 197,300 units from an upwardly revised 200,400 units in February, Canada Mortgage and Housing Corp. reported yesterday. The number of starts in March was below average expectations of analysts who had called for 200,000 starts. Following the release of this worse than expected news, the CAD neared a 2-day low against the USD. The USD/CAD rose 0.53% to reach 1.0083 during European afternoon trade, close to the 2-day high of 1.0088 it hit earlier.

However, the Canadian Dollar recovered, and resumed to trade near parity with its U.S counterpart after the Bank of Canada’s quarterly business outlook, provide further evidence that the country’s recovery from the recession is firmly taking hold. The Loonie traded at C$1.00095 per U.S Dollar after the survey showed that businesses are planning their fastest price hike in more than a decade. A price hike will lead to increased inflation expectations, which is among the key details that the Bank of Canada looks at when setting the benchmark interest rate. Last week, the Canadian dollar achieved parity versus its U.S counterpart for the first time in almost two years on speculation that the nation’s central bank will opt for a rate hike before the U.S Fed. The USD/CAD closed at 1.00266.

Over the in the U.K, a report by the British Retail Consortium (BRC) reported that that total retail sales hit its highest level in almost four years in March. Total year-on-year sales growth spiked to 6.6% in March, up from 4.5% in February and the highest level since April 2006. Like-for-like sales rose 4.4% in March, up from 2.2% the previous month. BRC said base effects had boosted year-on-year growth rates. Like-for-like sales fell 1.2% on the year last March. The timing of Easter was one factor boosting growth, as Good Friday and Easter Saturday fell in the March trading period in 2010 but in April 2009. Also out last night, a U.K house-price gauge for March reported the fewest increases in values for eight months as more supply eroded momentum in the property recovery market. The RICS House Price Balance reported a 9%, versus a predicted 18% increase. The report also showed that more respondents reported that prices are now falling in certain areas rather than rising.

The GBP which closed yesterday at $1.53710, hit a daily low of $1.53349 this morning. Later today (930GMT), the UK will report its Trade Balance for February- the bureau of National Statistics is expecting a deficit of 7.3B, versus January’s 8.0B.

Forex Market Ideas & Analysis by Finexo.com

Disclaimer: Trading the foreign exchange (Forex) carries a high level of risk, and may not be suitable for all investors. All information and opinions contained on this website are to be used for general informational purposes only and do not consitute investment advice.

By Dan Eduard – U.S. imports most likely increased in February, which if true, would signal further growth in the American economy. This is the prevailing sentiment among analysts ahead of the monthly Trade Balance report scheduled to be released at 12:30 GMT today. While imports appear to be on the rise, there is still cause for concern regarding the U.S. export market, which is not forecasted to see the same level of growth. The trade balance figure, which measures the difference in value for imported and exported goods and services, is predicted to come in at -38.5B. If correct, the figure would be slightly worse then last month’s figure of -37.3B.

Last month, the U.S. trade balance unexpectedly improved, which gave the Dollar a boost against its major counterparts, especially the Canadian Dollar. This month, traders can expect the greenback to fall slightly, providing the figure comes in as predicted. That being said, a better then expected result could help USD recoup some of its recent losses to the Euro.

Tomorrow, traders will want to pay close attention to the testimony from Fed Chairman Bernanke. A speech by the Fed Chairman typically leads to market volatility, and tomorrow should be no different. Traders will want to pay attention to any talk regarding interest rates or long term predictions for the U.S. economy. Any positive sentiment will likely bode well for the Dollar.

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.

Source: Forex Yard

The European Union finally agreed upon an aid package for Greece. The aid package of $61 Billion sent investors to buy the EUR, pushing it significantly higher against all its major counterparts. Greek fiscal problems seem close to be over, however, investors are still suspicious of other European nations, and the EUR pulled back against the dollar later during the trading day, currently the EUR/USD pair is trading at 1.3584 after trading at 1.3691, yesterday’s highest price.

Economic News

USD – U.S. Budget Deficit Narrowed

In the absence of major news from the U.S. yesterday, trade was mainly influenced by the aid package provided to Greece. Later, during yesterday’s trading, the U.S. published the budget balance, which showed improvement over previous months. However, the figure was negative, indicating the government was still spending more than making revenue during March.

The EUR/USD pair was quite volatile yesterday, as the euro increased the most in seven months against the greenback. The trend turned around as the trading day advanced, and the euro lost a part of its gains against the U.S. Dollar, as investors are still cautious about the global economy and in particular Europe. The change in investor mood influenced commodities and dependent commodities currencies such as the AUD which ended lower against the USD, the pair is currently trading at 0.9257.

The USD is expected to continue to strengthen today against its major counterparts. Investors are advised to follow the Trade Balance today at 12:30GMT, and thereafter follow the outcome of Treasury Secretary Geithner’s speech at 16:45GMT.

EUR – Euro Gains on Greek Bailout

Greek fiscal problems seem close to an end. The aid package offered to Greece, sent investors to accumulate the recently over sold currency. The support of the European Union helped eliminate some of the uncertainty around Greece. Investors are advised to continue to monitor news regarding the aid package. New developments about Greece’s debts or aid plan would have an impact over the euro against its major counterparts.

The British pound also gained by the rush to riskier assets. However, it is viewed as a short term correction rather than a new long term trend. With UK election coming up beginning of May, investors are expected volatility to increase for the GBP/USD pair. The pair is currently trading at 1.5349.

Later today, the UK will publish trade balance figures, and although it is not forecasted to turn positive, a better than expected figure may support the GBP against its major counterparts.

JPY – USD/JPY Crosses Below 93

The Japanese Yen saw some volatility yesterday versus the USD and is currently trading at 92.63, below a key support level at 93. Investors forecast the pair would reach 100, after BOJ Governor signaled he prefers a weak Yen in order to support the Japanese economy, which is facing deflation. Producer Prices published yesterday declined less than expected, but the figure was still negative. On Wednesday, BOJ Governor Shirakawa will probably relate to interest rates and easing measures in his speech.

The EUR/JPY also saw high volatility yesterday, while investors sold EUR and bought the JPY. The pair was down by almost 150 pips from yesterday’s trade high price.

OIL – Crude Oil Prices Continue to Rise

Oil is currently trading at $84.00, down for the fourth day after it traded last week at almost $87 a barrel. The price started to decline after last week’s inventories report which was less than expected. The day actually started positive for crude oil as the euro’s rally weakened the greenback and helped to push price of spot crude oil higher at the start of the day. However, as the day progressed and the USD strengthened, spot crude oil prices were sent lower to $84 during yesterday’s trade.

Technical News

EUR/USD

Yesterday the pair was unable to breach below the 1.3567 support line on the 4-hour chart. This level may provide further support for the pair today as the chart shows a potential bearish cross forming on the Slow Stochastic. Should the cross take place, the price could rise in the short term. A price target may be the 50% Fibonacci retracement level at 1.3800.

GBP/USD

The pair dropped below the support line of 1.5380, but found support at the 1.5350 level. The support line happens to be a 50% Fibonacci retracement level on the daily chart. This may be an opportunity for traders to enter into a strong trending environment. The ADX 14 on the daily chart shows a reading of 39 and rising. This indicates a strong bullish trend. Traders may want to go long on the pair as it appears the price could rebound from this retracement level.

USD/JPY

The Stochastic Slow lines on the 1-hour chart appear to be close to forming a cross at the lower resistance level, indicating a bullish correction is possible. This sentiment is supported by the Bollinger Bands on the daily chart. The widening of the bands indicates a price change may occur soon, but the direction is unknown. Traders may want to take a wait and see approach for this pair today.

USD/CHF

Most technical indicators show that this pair is currently trading in neutral territory, and will likely continue to do so today. The exception is the Relative Strength Index, (RSI) on both the 4-hour and 8-hour charts, which shows the pair currently in oversold territory. This usually indicates a bearish correction could take place in the near future. Traders may want to go long with tight stops today.

The Wild Card

Dow Jones Industrials

Following the Dow Jones recent climb to above 11000, most technical indicators are now showing the CFD trading in neutral territory. Still, the Relative Strength Index, (RSI) on both the 1-hour and 2-hour charts show signs that a bullish move may be possible in the next few hours. Forex traders may want to go long with tight stops today, as it is possible the CFD will continue moving upward.

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.