Month: May 2010

By Fast Brokers – The Cable is shrugging back towards weekly lows as Wednesday’s pop fades.  UK retail sales data wasn’t able to excite investors as it printed in line with analyst estimates at .3%.  Focus now shifts to weekly U.S. unemployment claims followed by the Philly index.  However, attention will likely remain on the EU as governmental leaders try to show a more unified front in countering fiscal uncertainties.  If EU governments are unable to act in concert and present clear details for its $1 trillion rescue package soon then any new investor confidence could deteriorate quickly.  Since the BoE mentioned their concern of a spillover from the EU to the UK, more emphasis is being placed on events in the EU now.  Though the potential impact has been clear to most investors, a vocal BoE usually drives the point home.  That being said, despite yesterday’s pop markets are far from stable and investors should keep a keen eye on the news wire for any new developments.  Tomorrow’s data wire will get more interesting with the UK releasing public sector net borrowing.  If public sector borrowing balloons again this could place new downward pressure on the Cable with investors speculating that parliament’s emergency budget cuts may prove futile.

Technically speaking, the Cable faces mounting downtrend lines along with 5/19 and 5/18 highs.  Additionally, the psychological 1.45 area could serve as a solid barrier should it be tested.  As for the downside, the Cable has support in the form of intraday lows and the psychological 1.42 level.

Present Price: 1.4310
Resistances: 1.4340, 1.4366, 1.4398, 1.4416, 1.4431, 1.4451, 1.4474
Supports: 1.4305, 1.4274, 1.4248, 1.4236
Psychological: 1.42, 1.45, May 2010 and April 2009 lows

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 rally from yesterday is softening and the EUR/USD has been not been able to break through to its psychological 1.25 level.  On a positive note, the currency pair is continuing its stabilization pattern, though it remains whether it will hold or just give way like on the 18th.  There has been little news out of the EU besides the development that other nations are not joining Germany’s plan to band short selling of government bonds and financials.  Hence, the EU seems even more fractured with countries going their own route isn’t of moving forwards in a more unified stance.  Attention will likely remain focused on Germany as government officials vote on the $1 trillion rescue package.  If by chance the German government doesn’t approve the rescue package then we could see another swift selloff in the Euro, though disapproval is unlikely.  The EU was relatively quiet on the data wire today besides German PPI, which printed a tad hotter than analyst expectations.  However, the EU will light up the wire tomorrow by releasing its key PMI data set along with Germany’s Ifo business climate figure.  Hence, the trading week could end on a volatile note.  If the PMI numbers print stronger than expected, this could help buoy the EUR/USD granted there is no new negative psychological development regarding fiscal issues or the rescue package.

Technically speaking, the EUR/USD faces accumulating downtrend lines along with intraday and 5/18 highs.  Additionally, the 1.25 area should serve as a solid barrier should it be tested.  As for the downside, the EUR/USD has supports in the form of intraday and 5/17 lows along with the psychological 1.21 and 1.20 areas.

Present Price: 1.2330
Resistances: 1.2347, 1.2363, 1.2383, 1.2413, 1.2432, 1.2456
Supports:   1.2326, 1.2307, 1.2286, 1.2268, 1.2245, 1.2233, 1.2213
Psychological: May 2010 lows, April 2006 lows, 1.24, 1.25, 1.23, 1.21, 1.20

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 Anton Eljwizat – In the last week trading, the EUR/AUD experienced much bullishness, as it stands now at 1.4930. However as I demonstrate below, it seems that the pair’s bullish run may have run of steam, and a bearish correction could be underway soon. Forex traders have the opportunity to wait for the downward breach on the hourlies and go short in order to ride out the impending wave.

• Below is the 8-hour chart for the EUR/AUD.

• The technical indicators that are used are the Relative Strength Index (RSI), Slow Stochastic and Williams Percent Range.

• Point 1: The Slow Stochastic indicates an impending bearish cross, which may signal a downward movement is going to occur in the near future.

• Point 2: The Relative Strength Index (RSI) indicates that the price of this cross currently floats in the overbought territory, signaling downward pressure.

• Point 3: The Williams Percent Range has peaked at the 0 marker; which means that there may actually be a strong level of downward pressure.

EUR/AUD 8 Hour 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.

Source: ForexYard

The EUR rose more than 1% against the U.S dollar and Japanese yen on Wednesday, recouping a steep drop that had extended into the early hours. A fresh round of speculation about other policy actions, including the possibility European officials were preparing to intervene in currency markets to prop up the EUR, kept volatility high.

Economic News

USD – U.S. Dollar Declines after Fed minutes

The U.S dollar extended losses against the EUR on Wednesday after the Federal Reserve upgraded its outlook on the U.S. economy, boosting risk appetite in the market. Given the euro zone’s debt problems, the euro has become a proxy for risk appetite, rising when there’s positive economic news.

The Federal Reserve gave an upbeat outlook of the U.S. economy in the minutes of the most recent meeting of its policy-setting committee.
Data showed the U.S. Consumer Price Index fell for the first time in a year last month and the closely watched core inflation rate eked out its smallest annual gain since 1966, further supporting the Fed’s vow to keep interest rates low for some time.

EUR – EUR Rebounds after 4 Year Low

The European currency rallied from a 4-year low against the U.S dollar on Wednesday, as traders bought the EUR on speculation the European Central Bank will announce further steps to halt the region’s debt crisis.

In early trading, the EUR was up 1.6% against the Dollar at $1.2378 after strengthening as high as $1.2399. The single currency hit session highs after the release of the Federal Reserve’s minutes of its latest meeting, which showed the Fed upgraded its outlook on the U.S. economy, boosting risk appetite in the market.

The EUR has fallen about 15 percent against the U.S dollar so far this year, hammered by concerns that Europe’s debt problems and austerity measures could hamper the Euro Zone’s economic recovery. Traders said that the EUR next support is seen at $1.2133 and if that level is broken, the next support level would be at the psychologically important $1.2000.

JPY – The Yen Rises across the Board

The Yen climbed against 15 of its 16 most-traded counterparts as results of an investigation into the sinking of a South Korean naval ship prompted demand for Japan’s currency as a refuge. The Japanese yen stayed higher versus the greenback, reclaiming its stake as the currency of choice when investors want to be as far away as possible from risky currencies and positions.

The JPY also jumped as much as 3.5% against the Australian dollar; a pair often looked at as an indication of risk aversion.

Oil – Oil Ends Lower in Choppy Trading

Crude-oil failed to post any sizeable gains Wednesday, as investors remained cautious about the global economic recovery and, by extension, about the demand for oil. Crude prices declined 22 cents, or 0.3%, to settle at $72.48 a barrel as investors continued to be worried about the euro and about the economic recovery.

A relatively positive report on inventories and better prospects for economic growth of the U.S. spurred several forays into positive territory, but oil couldn’t sustain them.
Crude oil has been rocked this week over jitters that Europe’s fragile financial situation has the potential to could the outlook for oil demand.

Technical News

EUR/USD

There is a bullish cross forming on the daily chart’s Slow Stochastic indicating a bullish correction might take place in the nearest future. The upward direction on the weekly chart’s Momentum oscillator also supports this notion. When the upward breach occurs, going long with tight stops appears to be preferable strategy.

GBP/USD

The 4-hour chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, there is a bullish cross forming on the daily chart’s Slow Stochastic indicating a bullish correction might take place in the nearest future. Going long might be a wise choice.

USD/JPY

The pair has been range-trading for a while now, with no specific direction. The Daily chart’s Slow Stochastic providing us with mixed signals. All oscillators on the 4 hour chart do not provide a clear direction as well. Waiting for a clearer sign on the hourlies might be a good strategy today.

USD/CHF

The bullish trend is loosing its steam and the pair seems to consolidate around the 1.1525 level. The daily chart’s Slow Stochastic is showing a fresh bearish cross suggesting that downwards correction might take place in the nearest time frame. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

The Wild Card

Platinum

Platinum prices have dropped significantly yesterday and peaked at $1618.50 an ounce. However, on the 8-hour chart RSI is floating in an oversold territory suggests that a bullish correction is impending. This might be a great opportunity for forex traders to enter the trend at a very early stage.

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

By GCI Forex Research

Fundamental Outlook at 1400 GMT (EDT + 0400)

€

The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.2365 level and was supported around the $1.2140 level.  One catalyst for the move higher was a rumour – later denied by the Greek government – that Greece was considering leaving the European Union and the eurozone.  Even though Greece only accounts for 2% to 3% of economic output in the European Union, its bailout package represents a considerably higher and disproportionate share of the total financial assistance package that has been announced by the European Union and the International Monetary Fund.  Most traders believe the expulsion or removal of a eurozone country would precipitate a run on the euro as confidence and sentiment would be badly damaged.  Many dealers are struggling to reconcile why the euro moved higher in the face of the Greek rumour but technicians note that the common currency is significantly oversold and with sentiment so poor, the slightest positive news or data can engender a move higher by the common currency.  Another reason being cited for the euro’s rise is a market rumour that the European Central Bank may intervene and purchase euro whereas some traders are indicating Swiss National Bank sold francs for euro today.   Also, the common currency gained ground on a plea from ECB member and Bundesbank President Weber that Germany’s parliament approve Germany’s contribution to the European Union rescue fund.  ECB member Bini-Smaghi said EMU-16 inflation expectations remain well-anchored and added the ECB will “not bail out states.” IMF official Lipsky reported the euro is “near equilibrium” and its level is not a problem.  Data released in the eurozone today saw EMU-16 March construction output up 7.6% m/m and off 5.2% y/y.  In U.S. news, U.S. Treasury Secretary Geithner was on the tape yesterday and reported the U.S.’s economic recovery is “much stronger than expected” and said the European Union has the capacity to manage its challenges.  Data released in the U.S. today saw MBA mortgage applications off 1.5% with the April headline consumer price index off 0.1% m/m and up 2.2% y/y. The ex-food and energy core CPI rate was up 0.0% m/m and 0.9% y/y.  U.S. equities reacted negatively to news that MBA mortgage foreclosures reached their highest level in years at +10.06% in Q1.  Dealers await the release of Federal Open Market Committee meeting minutes later in the North American session.  Former Fed Governor Mishkin called Europe’s fiscal situation “very dangerous” and said the European Union should have “let Greece go and say we are going to ringfence the rest of the system. Ringfence the banks, protect the other countries that have problems such as Portugal, Italy, and Spain, which have not been fiscally irresponsible the way the Greeks have been.” Euro bids are cited around the US$ 1.2140 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥91.05 level and was capped around the ¥92.20 level.  Former Bank of Japan Policy Board member Mizuno was critical of the central bank’s plans to stimulate lending in certain economic areas saying “The bank is treading a delicate line. The division between fiscal policy and monetary policy, as well as industry-financing policy and monetary policy, should be maintained, even if it’s a small one.”  The International Monetary Fund reported it is “critical” for Japan to adopt a credible debt plan.  First quarter gross domestic product data will be released in Japan tomorrow and most estimates suggest the economy expanded during that time.  Japan has approximately ¥882.9 trillion in debt and a strong print would allow the government some breadth to address this large fiscal imbalance.  Prime Minister Hatoyama is likely to unveil a strategy in June that addresses Japan’s mammoth debt position.  Mizuno also warned that the yen could appreciate further.  Data released in Japan overnight saw March industrial production up 1.2% m/m and 31.8% y/y while March capacity utilization was up 0.6% m/m.  The Nikkei 225 stock index lost 0.54% to close at ¥10,186.84.  U.S. dollar offers are cited around the ¥96.85 level.  The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥110.85 level and was capped around the ¥112.90 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥129.70 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥79.15 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8275 in the over-the-counter market, up from CNY 6.8274.  People’s Bank of China is said to be limiting orders for tomorrow’s three-year bill sale to prevent money-market rates from moving too high.  PBoC also issued a report that indicates they plan to tighten credit.  The report dropped the indication that China will “guide money and credit supply to grow rationally” and changed it to “maintain moderate growth of money and credit supply.”  PBoC adviser Li Daokui reported now is the optimal time to adjust the value of the yuan.  Some traders, however, now believe China will delay its revaluation of the yuan on account of growth concerns in Europe.

£

The British pound depreciated vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.4235 level and was capped around the $1.4400 figure.  Bank of England released the minutes from its Monetary Policy Committee meeting in May in which policymakers unanimously agreed to keep its main Bank Rate unchanged at 0.5% and kept its asset purchase facility unchanged at £200 billion.  Data released this week indicated that consumer price inflation has rocketed higher to 3.7% but the central bank sees this spike as temporary.  The minutes, however, revealed a division between some members who are concerned with higher inflation and some members who are more concerned with European credit constraints.  Data to be released in the U.K. tomorrow include April retail sales.  Cable bids are cited around the US$ 1.4110 level.  The euro appreciated vis-à-vis the British pound as the single currency tested offers around the £0.8585 level and was supported around the £0.8495 level.

CHF

The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.1415 level and was capped around the CHF 1.1530 level.   Swiss National Bank is said to have sold francs for euro today according to some European banks.  Swiss National Bank President Hildebrand this week reported the central bank is “ready to act” against the current strengthening of the franc, noting it is jeopardizing the economic recovery and Swiss price stability.  Hildebrand warned that Europe’s “dramatic” situation is “very difficult” and might worsen, pledging action in a “decisive manner.”  U.S. dollar bids are cited around the US$ 1.1110 level.  The euro gained ground vis-à-vis the Swiss franc as the single currency tested offers around the CHF 1.4050 level while the British pound lost ground vis-à-vis the Swiss franc and tested bids around the CHF 1.6340 level.

Forex 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 has dipped below its highly psychological $1200/oz level as investors continue to lock in profits.  Though one would anticipate a strong performance from gold due to yesterday’s downturn in the risk trade, we wouldn’t take gold’s pullback too seriously at this point since the precious metal has been on such an impressive run.  Hence, we’re taking the movement as healthy profit taking and we wouldn’t be surprised to see $1200/oz turn into a key near-term battle ground.  Meanwhile, investors should keep a close eye on the EUR/USD and Cable, which have both been incredibly volatile over the past 24-hours.  Immense psychological forces are at work and gold is subject to wild market movements should the tide in the risk trade move in either direction.  We’ll receive some key data points from Japan, the UK and U.S. tomorrow, though attention will likely remain focused on the EU as leaders volley over the details pertaining to its $1 trillion rescue package.

Technically speaking, gold faces technical barriers in the form of intraday and 5/18 highs.  As for the downside, gold still has multiple uptrend lines serving as technical cushions along with 5/10 lows and the highly psychological $1200/oz area.

Present Price: $1197.12/ oz
Resistances: $1199.30/oz, $1202.59/oz, $1205.26/oz, $1208.07/oz, $1211.57/oz
Supports: $1195.20/oz, $1191.33/oz, $1187.10/oz, $1183.52/oz, $1178.97/oz
Psychological: $1250/oz, $1200/oz

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 Aussie is underperforming again as the currency pair suffers from the RBA’s tightening monetary stance.  Hence, with the window of future rate increases closing, the Aussie is losing a bit of its allure as a safe bet.  Furthermore, it is likely that the concept of a slowdown in China is weighing on the Aussie with the Shanghai Composite entering a bear market.  A cool down in China implies a reduction in demand for Australian resources, clearly an Aussie negative since China has been fueling Australia’s economic growth.  Meanwhile, uncertainty in the EU surely doesn’t help the Aussie’s cause since the RBA noted it is concerned about a spillover from fiscal issues in European countries.  Therefore, with the entire risk trade under pressure the Aussie has opted to assert a relative weakness due to a combination of both global and domestic problems.  Although Australia will release inflation expectations data tomorrow, attention will likely remain focused on the EU with leaders jockeying to agree upon details for the $1 trillion fiscal rescue package.  Unfortunately, as long as EU leaders argue the longer the Aussie and risk trade will remain under pressure.

Technically speaking, the Aussie faces technical barriers in the form of intraday and 5/18 highs. As for the downside, the Aussie has technical cushions in the form of intraday and September 2009 lows

Price: .8411
Resistances:  .8412, .8427, .8442, .8461, .8479, .8494, .8514
Supports:  .8395, .8377, .8358, .8342, .83
Psychological:  .85, .84, .83, September and August 2009 lows

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 breaking lower from its consolidation, touching its psychological 91 level as investors head for the Yen in search of a safe haven amid rampant uncertainty in the EU.  Germany’s decision to ban short selling on government bonds proved to be the breaking point for a recently resilient USD/JPY, stirring up volatility in the normally calm currency pair.  However, the USD/JPY does remain above its highly psychological 90 level and 5/7 lows.  Fortunately for bulls, the EUR/USD and Cable are popping today in what appears to be a short squeeze from oversold conditions.  The short squeeze is helping buoy the USD/JPY ahead of tomorrow’s Prelim GDP release.  Investors are expecting an improvement in growth to 1.4%, and it wouldn’t’ be surprising to receive a strong GDP figure from Japan since China’s economy has been humming along the last month.  Additionally, improvements in U.S. consumption likely benefitted beleaguered manufacturers and exporters.  However, attention will likely remain focused on the EU as leaders try to iron out details for its huge $1 trillion rescue package.

Technically speaking, the USD/JPY faces technical barriers in the form of multiple downtrend lines along with intraday, 5/17, and 5/18 highs.  Additionally, the psychological .92level could serve as a solid barrier should it be tested.  As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with intraday and 5/7 lows.  Furthermore, the psychological .90 level should serve as a solid technical cushion if it’s reached.

Present Price: 91.31
Resistances: 91.37, 91.55., 91.66, 91.85, 92.01, 92.17, 92.39
Supports:   91.05, 90.88, 90.77, 90.55, 90.42, 90.27
Psychological:  .92, .91, .90

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 in sync with the EUR/USD popping from intraday lows following yesterday’s nasty selloff resulting from Germany’s surprise decision to suspend short selling of government bonds until March 2011.  The decision shocked the risk trade, sending the Cable back towards its psychological 1.42 level.  The Cable is now dealing with March 2009 levels in what can be seen as a large step back for the currency pair.  The BoE meeting minutes showed that they believe price growth we’ve seen is temporary, they are more concerned that issues in the EU could spill over into the UK.  This is not the news investors wanted to hear as the parliament tries to move ahead with a coalition government.  The Tories are still on track to introduce an emergency budget on June 22nd, though the 6 billion pound deficit reduction is a flash in the pan compared to debt outstanding.  Meanwhile, as with the rest of the risk trade the Cable is just trying to form some kind of lasting bottom as the downturn carries on.  That being said, investors should continue to monitor conditions in the EU as government officials whether aggressive demands from Merkel & Co.  For further disintegration in the EU could drag the Cable lower with the EUR/USD.  The UK will splash the data wire tomorrow with its retail sales release and a positive figure could help buoy the Cable.  However, attention will likely remain focused on the EU as they scramble for solutions.

Technically speaking, the Cable faces mounting downtrend lines along with intraday and 5/18 highs.  Additionally, the psychological 1.45 area could serve as a solid barrier should it be tested.  As for the downside, the Cable has support in the form of intraday lows and the psychological 1.42 level.

Present Price: 1.4352
Resistances: 1.4366, 1.4398, 1.4416, 1.4431, 1.4451, 1.4474
Supports: 1.4340, 1.4305, 1.4274, 1.4248, 1.4236
Psychological: 1.42, 1.45, May 2010 and April 2009 lows

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.

Source: ForexYard

Traders moving assets to safer, lower yielding currencies appear to be playing a factor in the correction of the major crosses. The USD and JPY, which are seen as a safer bet than others currencies in times of market stress, will likely keep drawing demand as investors stay away from riskier assets.

Economic News

USD – U.S Dollar Soars against the EUR and GBP

The dollar rose against the EUR on Tuesday, reversing the single currency’s earlier gains, as investors grew more risk averse and sought safety in the dollar. By yesterday’s close, the USD rose against the EUR, pushing the oft-traded currency pair to 1.2185. The dollar experienced similar behavior against the GBP and closed at 1.4295.

As the U.S economy stabilizes, currency traders have started to focus more on fundamentals such as economic growth and short-term interest rates. That shift, just getting underway, could take the shine off the soaring USD in the coming months. A stronger currency is important to the U.S. because it entices foreign investors to Treasury debt that finances the nation’s record budget deficit. The downside is that it may restrain profit growth at companies with international sales by making U.S. exports more expensive.

Looking ahead to today, the most important economic indicator scheduled to be released from the U.S. is the CPI at 12:30 GMT. Traders will be paying close attention to today’s announcement as a stronger than expected result may continue to boost the USD in the short-term. Traders are also advised to follow the FOMC Meeting Minutes at around 18:00 GMT. This meeting is very likely to Impact the Dollar volatility. Traders are advised to watch closely, as this is likely to set the pace of the Dollar going into the rest of the day’s trading.

EUR – EUR Hits a Record Low against Dollar

The EUR tumbled against most of its currency crosses Tuesday on concern nations with the highest deficits will struggle to meet the European Union’s austerity requirements.

The EUR’s drop accelerated as speculation increased that European financial institutions are worse than anticipated after Germany said it will ban naked short-selling and naked credit- default swaps of euro-area government bonds and the Bank of Italy allowed lenders to exclude losses on government bonds.

Germany’s BaFin financial-services regulator said that it will introduce a temporary ban on naked short-selling and naked credit-default swaps of euro-area government bonds starting at midnight. The ban will also apply to naked short-selling in shares of 10 banks and insurers.

The EUR hit a low of $1.2185 yesterday, the lowest level since 2006. Worries about the long-term economic impact of austerity measures adopted across Europe have weighed on the single currency in recent weeks. Since the beginning of the year, the EUR has lost more than 14% versus the greenback. The EUR also fell more than 1.5% to 112.10 against the JPY.

JPY – Yen Rises on All Fronts

The Japanese Yen strengthened against most of its major counterparts yesterday, continuing to prove that for the time being that this is the solid currency that traders can rely on to provide them with steady profits. The Yen extended gains versus the EUR on Tuesday, to trade at about 112.10 amid a broad sell-off in the EUR. The JPY also saw bullishness against the USD and closed at 92.20.

The JPY’s trends will be affected by the rallies of its primary currency pairs today. It seems that the USD and EUR are expected to continue a volatile trading session today, especially against the Japanese currency. Traders should keep a close look on the news coming from the U.S. and Europe as these economies will be the deciding factors in the JPY’s movement today, especially the U.S CPI at 12:30. It is also advisable for traders to follow any unexpected comments coming from key Japanese governmental figures, as this is also likely to lead to further JPY volatility.

Crude oil – Crude Oil Inventories Data to Drive Oil Trading Today

Crude Oil fell on Tuesday, ending at a seven-month low as Europe’s debt problems revived risk aversion among investors and pulled the EUR and oil back from early gains.

A drop in the EUR against the dollar also has made oil a less appealing investment overseas. Crude is priced in dollars, so oil becomes more expensive for holders of other currencies when the dollar goes up. Analysts are concerned that the debt crisis could slow European economies and drag down demand for oil.

As for today, traders should pay attention to the U.S Crude Oil Inventories report scheduled, as it tends to have a large impact on Crude Oil’s prices recently, especially for the short-term.

Technical News

EUR/USD

The pair has recorded much bearish behavior in the last few weeks. However, the technical data indicates that this trend may reverse anytime soon. For example, the daily chart’s Stochastic Slow signals that a bullish reversal is imminent. An upward trend today is also supported by the RSI. Going long with tight stops may turn out to pay off today.

GBP/USD

The cross has been dropping for the past month now, as it now stands at the 1.4290 level. However, the daily chart’s RSI is already floating in the oversold territory indicating that a bullish correction might take place in the nearest future. Going long with tight stops may turn out to be the right choice today.

USD/JPY

The USD/JPY has gone increasingly bearish yesterday, and currently stands at the 91.95 level. The daily chart’s Slow Stochastic supports this currency cross to fall further today. However, the hourly chart’s Stochastic Slow signals that a bullish reversal will take place today. Entering the pair when the signs are clearer seems to be the wise choice today.

USD/CHF

This pair’s sustained upward movement has finally pushed its price into the over-bought territory on the daily chart’s RSI. Not only that, but there actually appears to be a bearish cross on the Slow Stochastic pointing to an imminent downward correction. Forex traders have the opportunity to wait for the downward breach on the hourlies and go short in order to ride out the impending wave.

The Wild Card

Crude oil

Oil prices are once again dropping, and it is currently traded around $72.05 a barrel. And now, the daily chart’s RSI is giving bullish signals, indicating that oil prices might go up. This might give forex traders a great opportunity to enter a very popular trend.

Forex Market Analysis provided by Forex Yard.

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