Month: May 2010

Source: ForexYard

U.S. stocks and EUR pared deep losses to end mostly flat on Tuesday as investors had second thoughts that a festering Euro-Zone banking crisis will spread worldwide and strangle a reviving economy.

Economic News

USD – Dollar’s Upward Momentum Gathers Strength

The U.S. Dollar rose Tuesday as higher-yielding currencies came under broad selling pressure on growing risk aversion, in turn boosting the greenback. World stocks fell to their lowest level since September 2009 on Europe contagion fear and amid growing tension between North and South Korea. Worries about a fresh financial crisis prompted investors to reduce holdings of riskier assets such as shares while seeking the safety of the U.S currency.

U.S. stocks fell early, joining in the broad global sell-off and the concern that economic recovery will be hampered, but pared losses late and ended mixed.
Equities are broadly viewed as an indicator of future energy demand growth.

Traders said with liquidity in the forex market showing signs of drying up; investors are likely to scramble for safe-haven Dollars. That is likely to keep downward pressure on growth-linked currencies such as the Australian Dollar.

EUR – EUR Falls for 3rd Day on Debt Fears

The EUR declined against the Dollar and Yen for a third day as concern about the Euro-Zone’s banking system fanned strains in money markets, boosting demand for Dollars across the board. Weighing on the EUR was the Spanish central bank’s takeover of savings bank CajaSur on Saturday after a failed merger with another regional lender.

The single currency, however, recouped some losses in afternoon trading after the Conference Board said its index of confidence among U.S. consumers rose this month to the most in more than two years, adding to optimism growth in the world’s largest economy may be strong enough to withstand a European slowdown.

The EUR downtrend has so far stalled at $1.2280, stopping well shy of the currency’s January 1999 launch rate at $1.1747, but analysts say currencies’ tendency to overshoot estimates of where they should be means further weakness is likely.

JPY – Yen Rises More than 1% vs. Aussie as Investors Cut Risks

The Japanese Yen weakened to as much as 111.98 per EUR today from 110.37 after rising to 108.84 yesterday. Against the U.S Dollar, the Japanese currency depreciated to as much as 90.49 from 89.78. A weaker Yen increases the value of overseas sales at Japanese companies when repatriated.

Meanwhile against the Australian Dollar the JPY was up 0.6% at 73.87 as hedge funds and investors took profits on the higher-yielding currency’s rally this year. Analysts said the slide in the Aussie against the Yen is expected to slow in the near term as there are a number of bids waiting below 73 Yen.

Crude Oil – Crude Falls More than 2% a barrel

Oil prices fell $1.46, or 2.1%, to $68.75 a barrel joining global stocks, the EUR and most metals with the exception of gold in a broad retreat due to ongoing fears about a potential European debt crisis and renewed tensions on the Korean peninsula.

Market players noted Crude pared losses after the U.S. consumer confidence index hit a two-year high in May. Dropping back from a 2010 peak of $87.15 on May 3, the highest since October 2008, U.S. Crude prices could be set to have the biggest monthly loss since the height of the financial crisis.

Technical News

EUR/USD

Most technical indicators show the pair trading in neutral territory at the moment. That being said, a day of low volatility is expected, which may lead to erratic price movements. Traders may want to take a wait and see approach for this pair today.

GBP/USD

Most technical indicators show the pair trading in neutral territory at the moment. That being said, a day of low volatility is expected, which may lead to erratic price movements. Traders may want to take a wait and see approach for this pair today.

USD/JPY

The pair seems to be exhibiting some mixed signals today. While the 4 hour chart’s Slow Stochastic exhibits a fresh bearish cross, the daily RSI is floating in the oversold territory. Waiting on a clearer direction for the pair today may be advised.

USD/CHF

The hourly and daily charts’ Slow Stochastic is showing a bearish cross with the daily RSI floating in the overbought territory. Going short for the day may be advised.

The Wild Card

AUD/NZD

The RSI for the pair is floating in the overbought territory on the hourly and 2 hour charts with a bearish cross evident on the 2 hour and 4 hour charts’ Slow Stochastic. Forex Forex traders may be advised to go short for the day.

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 depreciated sharply vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.2175 level and was capped around the $1.2370 level.  The situation in Europe worsened dramatically overnight.  First, yieds on German government 10-year bunds reached a record low, reflecting the safe haven play that many nervous investors and traders are seeking.  Yields on French 10-year debt also reached a record low overnight.  Second, the German government has now proposed a ban on the naked short-selling of all German equities, a broad expansion of the plan announced two weeks ago.  In addition, Germany’s plan calls for a ban on the short-selling of certain types of eurozone bonds and certain types of credit default swaps.  Other eurozone countries have not yet followed suit with similar banks and the common currency is suffering as a result of the perception of a lack of cohesion with regard to policymaking.  Third, there is a sense that more European banks will fail.  Yesterday, four regional Spanish savings banks announced a plan to combine forces to stave off concerns  following the nationalization of one savings bank.  The yield spread between Spanish 10-year bonds and German 10-year bunds widened fourteen basis points to 154 bps, the highest levels since 7 May.  Fourth, there is talk the European Union will introduce a new up-front tax on banks to help stabilize the financial system.  European Central Bank member Nowotny reiterated the ECB is “fiercely independent” and said it is not engaging in quantitative easing.  Data released in the eurozone today saw EMU-16 March industrial new orders up 5.2% m/m and 19.8% y/y.  In U.S. news, the March Case-Sehiller home price index was off a marginal 0.05% m/m and up 2.35% y/y.  Other data to be released today include the May Richmond Fed manufacturing index and March house price index.  St. Louis Fed President Bullard reported the trajectory of U.S. interest rates depends on the economic recovery into 2011.  Euro offers are cited around the US$ 1.2620 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥89.25 level and was capped around the ¥90.30 level.  Dealers added to long yen positions on escalating concerns about the European debt crisis and a worsening regional situation involving the two Koreas.  North Korean leader Kim Jong-Il is said to have ordered his military on “combat footing” while South Korea is said to have restarted “psychological warfare” against the north.  These measures are in response to the sinking of a South Korean submarine, allegedly by North Korea.  Japan strategy minister Sengoku warned the European economy will not recover soon.  Three-month Libor rates for yen loans grew to 0.2456% and three-month U.S. dollar Libor is now 0.50969%, the highest level since 16 July.  Traders await the release of April Bank of Japan Policy Board meeting minutes overnight along with the April corporate service price index.  The Nikkei 225 stock index lost 3.06% to close at ¥9,459.89.  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 ¥108.80 level and was capped around the ¥111.65 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥127.65 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥76.40 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8315 in the over-the-counter market, up from CNY 6.8287.  Data released in China overnight saw the April leading index decline to 104.36.  The State Administration of Foreign Exchange indicates China has not had large-scale “hot money” inflows ahead of the possible revaluation and appreciation of the yuan.  People’s Bank of China sold one-year bills at an unchanged yield of 1.9264% in open-market operations today, the seventeenth consecutive time it has not changed yields.  Some dealers believe PBoC will increase the yield on its bills to absorb excess liquidity in the money markets. Chinese yuan forwards came off their most in fifteen months on the European debt crisis today, bringing into question whether or not China will revalue the yuan with the global economy on a relatively weak footing.  U.S. Treasury Secretary Geithner characterized U.S.-Chinese talks on the yuan as “encouraging.”  Yesterday, People’s Bank of China adviser Li Daokui today said “Politically it is worthwhile, it makes sense, for the two sides – China and the U.S. – to see some progress in renminbi reform in the near future.”

£

The British pound depreciated vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.4255 level and was capped around the $1.4420 level.  Data released in the U.K. today saw Q1 gross domestic product up 0.3% q/q and off 0.2% y/y.  Bank of England Monetary Policy Committee member Posen said he cannot rule out deflationary pressures in the U.S. and U.K. economies.  Chancellor of the Exchequer Osborne yesterday reported the new Cameron government hopes to decrease fiscal spending by at least £6 billion in what would be an abrupt shift from the policies of former Prime Minister Brown.  Outgoing Bank of England Monetary Policy Committee member Barker reported more difficult times are ahead for the U.K. economy.  Cable bids are cited around the US$ 1.4110 level.  The euro depreciated vis-à-vis the British pound as the single currency tested bids around the £0.8510 level and was capped around the £0.8585 level.

CHF

The Swiss franc depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1695 level and was supported around the CHF 1.1580 level.  Data released in Switzerland today saw the April UBS consumption indicator improve to 1.763 from the revised print of 1.682 in March.  There is a growing sense among traders that Swiss National Bank may be unable to keep up with market speculation and may be forced at some point to abandon its franc-selling intervention operations on account of the major global bearish sentiment that overhangs the common currency.  U.S. dollar bids are cited around the US$ 1.1110 level.  The euro lost ground vis-à-vis the Swiss franc as the single currency tested bids around the CHF 1.4205 level while the British pound lost ground vis-à-vis the Swiss franc and tested bids around the CHF 1.6585 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 Yan Petters – We at ForexYard, encourage our customers to get involved in the most intense market events. As such, we think you should know that U.S. CB Consumer Confidence figures are expected tomorrow, May 25th, at 14:00 GMT, and you need to be prepared.

What is CB Consumer Confidence?

The CB Consumer Confidence survey usually acts as a direct reflection of prior leading financial indicators that are assembling the U.S economic outlook. The biggest impact of the survey derives from instantly effecting consumer data, such as home prices, food costs, energy and gasoline. The Conference Board Inc.’s (CB) Consumer Confidence report measures the level of a composite index based on surveyed consumers. The figure is derived from a survey of about 500 households which asks respondents to rate the relative level of current and future economic conditions. Financial confidence is a leading indicator of consumer spending, which accounts for a majority of overall economic activity in the U.S.

If the Survey Comes In-Line With Market Forecasts

As recent U.S economic data has shown signs of growth, analysts forecast that this month’s survey will continue the current trend of rising consumer optimism. This will mark the 3rd consecutive month in which U.S. consumer confidence has advanced. If the result will reach expectations, it is likely to elongate the current bullish trend of the Dollar, especially against the Euro and the Pound.

If the Survey Will Disappoint

In case the survey will unexpectedly deliver lower figures than expected, it may reflect a worse than anticipated mood of U.S consumers. Such a result might have a very significant impact on USD trading, as it could halt the current bullish trend of the Dollar. In such a scenario, the EUR/USD pair might correct towards the 1.2500 level over the remainder of the week.

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 Fast Brokers – The Aussie has undergone a hefty sell-off over the last 24 hours as the risk trade deteriorates across the board.  News that Spain has taken control of a regional bank accompanied by a warning from the IMF gave investors fuel to punish the major dollar pairs again, and the Aussie was no exception.  The Aussie sank back towards previous May lows and its psychological .80 level and is presently trying to bounce back after U.S. CB consumer confidence data topped estimates.  However, momentum is still clearly to the downside and investors should keep a close eye on the EU news wire.  Meanwhile, Asia equities joined the sell-off with the SCI dropping by another -2% and the Nikkei by over -3%.  In addition to negative news from the EU, investors are becoming increasingly concerned about conditions in Korea after news emanated that North Korea mobilized its military last week should South Korea attack in retaliation to the realization that the North sunk their sub.  Though North Korea is prone to talk a good talk with little action, investors should still keep a close eye on the situation for a military conflict could wreck havoc on the risk trade.  Australia will release construction data tomorrow, though attention will likely remain focused on developments in the EU and UK.

Technically speaking, the Aussie faces technical barriers in the form of multiple downtrend lines along with intraday and 5/21 highs.  As for the downside, the Aussie has technical cushions in the form of May 2010 and September 2009 lows.  Additionally, the psychological .80 area could serve as a solid technical cushion should it be tested.

Price: .8161
Resistances:  .8178, .8205, .8224, .8246, .8268, .8303
Supports:  .8150, .8123, .8101, .8086, .8066, .8053
Psychological:  .80, .83, May 2010 and September 2009 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 – Gold is creeping higher as investors divest from the risk trade.  While investors may expect gold to climb higher during moments of heightened uncertainty, it seems the precious metal is hesitating at its highly psychological $1200/oz level.  However, should May lows in the EUR/USD and Cable give way this could push gold back above $1200/oz due to its status as a safe haven.  Meanwhile, investors are waiting on U.S. CB consumer confidence as they monitor EU headlines.  The Euro came under heavy selling pressure yesterday after the IMF issued a warning on Spain and the government took control of a regional bank.  Additionally, news leaked that North Korea readied its military should South Korea attack after it became clear that the North sank the South’s submarine.  Though a military conflict is highly unlikely, should things go south this could help gold regain its upward momentum.  We’ll get some more key data from the U.S. tomorrow along with public statements from Shirakawa and Bernanke.  Hence, it wouldn’t be surprising to see markets stay active over the next 24 hours.

Technically speaking, gold faces technical barriers in the form of intraday and 5/7 highs.  Additionally, the psychological $1200/oz level should serve as a solid technical barrier should it be reached.  As for the downside, gold still has multiple uptrend lines serving as technical cushions along with intraday and 5/21 lows.  Furthermore, the $1150/oz level should serve as a strong technical cushion should it be tested.

Present Price: $1193.95/ oz
Resistances: $1195.20/oz, $1197.08/oz, $1199.91/oz, $1202.59/oz, $1205.26/oz
Supports:  $1190.92/oz, $1187.93/oz, $1184.46/oz, $1181.62/oz, $1178.97/oz.
Psychological:  $1200/oz, $1150/oz

(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 trying to hold previous May lows after the currency pair followed the risk trade lower after news broke that regional banks in Spain have debt issues.  The government has taken control of a regional bank and the IMF issued a warning implying that conditions could deteriorate should Spain’s financial industry not undergo reform.  Should conditions worsen in Spain and bond yields climb, then this could easily become a bigger problem than Greece considering the size of Spain’s economy.    Fears surrounding Spain knocked the entire risk trade and the Cable was no exception.  However, the Pound is outperforming, highlighted by a sharp downturn in the EUR/GBP.  It seems the Cable is deriving a bit of its relative strength from Parliament’s intention to implement its 6 Billion Pound worth of budget cuts.  Even though 6 billion is a flash in the pan, the concept that Parliament is serious about tackling its debt has given some confidence to the Pound.  Regardless, the Cable should follow the risk trade and previous May lows could give way if today’s broad-based downturn accelerates.  On a positive note, UK revised GDP printed in line with analyst estimates and no news is good news in this case.  Investors are presently waiting on U.S. CB consumer confidence, though attention will likely remain focused on the EU and developments in Korea.

Technically speaking, the Cable faces multiple downtrend lines along with 5/24 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 and 5/20 lows.  Furthermore, the psychological 1.42 level could serve as a technical cushion if it’s reached.

Present Price: 1.4329
Resistances: 1.4362, 1.4387, 1.4409, 1.4443, 1.4468, 1.4498
Supports: 1.4326, 1.4301, 1.4265, 1.4232, 1.4173, 1.4126, 1.4100
Psychological: 1.42, 1.45, May 2010 and February 2009 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 has taken a turn for the worse to start off the week.  Despite the relative lack data, the news wire lit up as we warned about in our previous commentary.  Concern about Spain’s financial condition intensified after the government announced it is taking control of a regional bank, sparking fears that more financials could begin folding.  The IMF issued a warning to Spain that the financial industry needs to get its act together, escalating investor uncertainty in the process.  Investors naturally sent the Euro reeling in reaction to the news and the EUR/USD is back around previous May lows and testing March 2006 levels.  All reasonable uptrend lines are well overhead and negative momentum is still clearly in the driver’s seat.  On a positive note, EU industrial new orders surged, eclipsing analyst estimates by 30bp.  Strong EU industrial and manufacturing data could become a new trend as a weak currency makes exports more attractive.  However, austerity concerns are still dominating the headlines.  Meanwhile, global equities are getting hammered with the DAX down -3% and the CAC in the red by roughly -3.7%.  In addition to news regarding Spain, investors are concerned about a conflict in Korea after news spread that North Korea readied its military to defend against South Korea should it attack.  Hence, it’s difficult to find much good news around the globe, making present risk aversion understandable.

Technically speaking, the EUR/USD faces multiple downtrend lines along with intraday and 5/24 highs.  Additionally, the psychological 1.23 and 1.24 areas are now serving as technical barriers.  As for the downside, the EUR/USD has supports in the form of intraday and 5/19 lows.  Furthermore, the psychological 1.20 could serve as a solid cushion should it be tested.

Present Price: 1.2224
Resistances: 1.2239, 1.2268, 1.2280, 1.2304, 1.2318, 1.2341
Supports:   1.2208, 1.2191, 1.2167, 1.2146, 1.2120, 1.2100
Psychological: May 2010 lows, March 2006 lows, 1.24, 1.23, 1.20

(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.

Market Analysis by Finexo.com

Upcoming Sessions (all times GMT)
• GBP Revised GDP (0830)
• USD Consumer Confidence (1400)

A late selloff of US equities has caused risk aversion to return to the markets as Asian and Pacific stock indexes have tanked. As such, riskier currencies across the board have sunk against the USD, with the AUD especially being hit hard. The Aussie slipped 1.0% in early trading session, to hit 0.8200.

EURUSD
The Euro fell for a second day in a row against the greenback as concerns rose that the European debt crisis is far from over. Yesterday the International Monetary Fund publically urged Spain to take stronger action towards helping its failing banks, reinforcing the notion the traders should short every EURUSD rally until concrete evidence emerges that the EU’s credit problems have finally stabilized.
Support/Resistance 1.2280/1.2430

GBPUSD
The British Pound continued to slip against the U.S Dollars as investors grew more skeptical about the UK’s proposed budget cuts.  However, with so many one sided positions in the market, the GBPUSD could very well reverse its latest downwards trend if today’s GDP is better than expected.
Beyond the intraday resistance of 1.4465, lies a strong resistance at the 1.4530 level.
Support/Resistance 1.4340/1.4465

GOLD
Renewed global concerns about the European Debt Crisis and its single currency have once again pushed investors towards more “risk adverse” assets – namely Gold. This “safe haven” metal can also attribute some of its sudden gains to this morning’s New Zealand Inflation Expectation that was higher than expected. The 1200 is back in play, and any move above this key price could lead to follow through buying towards the 1225 level.
Support/Resistance 1185/1200

Forex Market Review & 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 – Yesterday we saw riskier currencies tumble following the latest news to come out of the Euro-Zone. Should European news continue to be negative, traders can expect safe havens like the US Dollar and Yen to continue to make gains in the marketplace. Here is a roundup of the main economic indicators set to impact the market today.

08:30 GMT: GBP – Revised GDP Report

There are three versions of the UK GDP report. The first, also called the Preliminary, tends to have the most market impact. That being said, the Revised – the second release – also tends to create market volatility among GBP pairs. Analysts are forecasting a slight increase in the UK GDP reading which, if true, could lead to significant gains for the Sterling against its major counterparts.

14:00 GMT: USD – CB Consumer Confidence Report

The Consumer Confidence report is seen as a leading economic indicator, and as such, consistently creates heavy market volatility. The report is the result of a monthly survey of 5,000 American households. Respondents are asked to rate the economic climate in the US today.

Consumer confidence has steadily increased over the last several months, which has tended to create favorable conditions for the greenback. This month, analysts are forecasting another increase. Should the report be released in-line with, or above, the forecasted level of 59.1, traders can expect the Dollar to continue making gains throughout the rest of the day.

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 Euro fell broadly throughout the night following news that the Spanish government is planning to takeover a smaller savings bank due to a failed merger attempt. The EUR/USD, currently trading below the 1.2300 level, has fallen more than 100 pips since yesterday evening as one of the results.

Economic News

USD – Dollar Receives Boost Following Existing Home Sales Report

While last week saw the U.S Dollar drop against many of the other major currencies, the greenback appeared to be coming back strong after a solid housing report helped boost investor confidence. Monday’s Existing Home Sales report led to major gains for the Dollar against its primary counterparts.

The report, which came in well above expectations, revealed that home sales increased for the second straight month. As a result, the greenback shot up versus the British Pound and Australian Dollar, to name a few. The GBP/USD dropped over 100 pips since yesterday afternoon and is currently trading around the 1.4360 level. The AUD/USD fell even more broadly, dropping from 0.8320 to its current level of 0.8200.

Today, traders will want to look out for the CB Consumer Confidence report set to be released at 14:00 GMT. U.S consumer confidence has steadily increased over the last several months. This month should be no different as analysts are forecasting a figure of around 59.1 compared to April’s 57.9.

The Dollar may be able to prolong its rally in the marketplace should the report come in as predicted. At the same time, consumer confidence has been notoriously hard to predict in the past. Any result below 59.1 could lead to gains for European currencies like the Sterling and Franc.

EUR – EUR/USD Dives Due to Renewed Deficit Worries

Fears that the deficit worries that have plagued Greece over the last few months may be spreading, caused the Euro to slide throughout the night. News that the Spanish government is taking over one of its smaller savings banks following a failed merger attempt underscores just how fragile the Euro-Zone economies really are.

Investors reacted to the Spanish news by getting rid of their Euro positions, causing the currency to take major losses against the U.S Dollar, among others. The EUR/USD has dropped over 100 pips since yesterday as a result. Similarly, the EUR/JPY fell from 112.34 last night, to its current level of 110.90.

Today, several economic indicators, such as the monthly Italian Retail Sales report and the European Industrial New Orders report, may slightly impact the single currency. At the same time, traders will want to keep in mind how weak the Euro-Zone is at the moment. Expect the Euro to continue to fall against its main rivals, especially if today’s U.S Consumer Confidence report is released in-line with or above expectations.

JPY – Risk Aversion Leads to Gains for the Yen

The Japanese Yen, capitalizing on the high level of risk aversion in the marketplace, has been able to record gains on most of its major currency rivals. With continuous coverage of deficit worries in the Euro-Zone economies dominating the news cycle, investors are flocking to the safe haven currencies like the Dollar and Yen. The GBP/JPY, which yesterday was trading as high as 130.71, has fallen to its current level of 129.45. The AUD/JPY has also seen a drastic drop since yesterday, from 75.37 to its current level of 74.04.

Traders may want to consider the Yen as a safe bet today, especially if negative European news continues to dominate the headlines. At the same time, should the U.S. Consumer Confidence report come in as expected, the Dollar may be able to make some gains on the Yen. The USD/JPY has been trading in a somewhat level area over the last day or so. That may all change following the release of the Consumer Confidence reading.

Crude Oil – Euro-Zone News Drops Crude below $70 a Barrel

Investor fears regarding the latest European financial news translated into a sharp drop in value for crude oil. Crude, which just yesterday was trading around the $70.75 price level, has since dropped to around $69.50. As the U.S Dollar has increased over the last 24 hours, oil prices have fallen. In addition, most analysts are forecasting an increase in U.S crude supplies this week.

While the actual figure will not be released until tomorrow, speculation of a decrease in demand for the world’s largest energy consumer has further weighed down the commodity.

For today, should the Euro continue to drop, traders may want to operate under the assumption that crude prices may continue to fall as well. At the same time, any unexpected bad news to come out of the U.S could lead to a cheaper price for oil and thus higher demand.

Technical News

EUR/USD

It appears as if the EUR/USD is preparing for an upward correction today. The RSI on both the hourly and 4-hour charts show the price floating in the over-sold territory, suggesting upward pressure. Meanwhile, the 4-hour Stochastic (slow) has just completed a bullish cross, indicating we should see an upward movement throughout the afternoon’s trading session.

GBP/USD

The technical indicators on this pair don’t seem to be showing much in the way of direction, but we can see a clear trend across many of them. Even without clear signals, it is nevertheless obvious that all indicators are pointing in an upward direction on the longer-term charts. Momentum for this pair appears to be turning bullish. The price has been consolidating since yesterday; once this trend is completed we may see some upward movement.

USD/JPY

After trading flat for a few days, this pair is beginning to show signs of directionality. The 4-hour Stochastic (slow) has turned sharply downward suggesting that we may see a bullish cross later today. The RSI on the daily chart has also just entered the over-sold territory, highlighting a growing level of upward pressure. Waiting for the upward swing and then going long on this pair may not be a bad move today.

USD/CHF

This pair’s sustained bullishness has resulted in the expected technical indications for a correction. The RSI on the hourly, 4-hour and daily charts are all floating in the over-bought territory, pointing to strong downward pressure. The Stochastic (slow) on the 4-hour and daily charts also show bearish crosses. The 1.1600 price level represents a significant historical barrier on this pair. A level of downward corrective behavior should be impending and traders will want to keep an eye out for this and try to call the reversal when it happens.

The Wild Card

This pair’s drastic downturn over the last two weeks has surprised many. However, we do see many technical signals indicating some positive news for the Aussie. The RSI on the daily chart is showing the price deep within the over-sold territory, while the Stochastic (slow) on the same chart recently finished a bullish cross and is now pointing upward. The weekly RSI has also just entered the over-sold zone, suggesting that this week may be the turning point for this pair. Forex traders won’t want to miss out on a great opportunity to call the reversal and make maximum gains with the Aussie Dollar.

Forex Market Analysis provided by Forex Yard.

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