InvestMacro FX

By Fast Brokers – The USD/JPY’s deterioration has continued well past its psychological 95 level and our important 1st tier uptrend line.  Investors have been favoring the Yen over the Dollar amid warnings from investor heavyweights Buffet and El-Erian that the Dollar could be under severe selling pressure over the long-term if the government doesn’t tighten liquidity appropriately.  Such news coupled with disappointing U.S. employment data and large pullbacks in the Shanghai Composite Index (SCI) have led investors to buy up the Yen.  The USD/JPY’s recent downturn seems to be more exaggerated than what we’ve witnessed in both the Cable and the EUR/USD.

The collapse of the USD/JPY’s 1st tier uptrend line is a bit disconcerting, and we have little reason to be positive trend-wise right now.   However, the currency pair has fought to stay above March lows and our 2nd tier downtrend line.  Furthermore, if the USD/JPY’s immediate-term technical do turn sour, July lows are hanging around as a last resort.  The USD/JPY’s near-term challenge will be to recover to its psychological 95 level so the currency pair can take another short at our 1st tier uptrend line.  Our 1st tier uptrend line is gradually approaching its inflection point with our 3rd tier downtrend line, meaning volatility could pick up in the beginning of next week.

Present Price: 94.70

Resistances: 94.95, 95.15, 95.44, 95.65, 96.08

Supports:  94.52, 94.36, 94.08, 93.88, 93.52

Psychological: 95

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither 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 retreating from yesterday’s pop after Public Net Sector Borrowing came in much higher than analyst expectations.  Today’s unsettling debt-related data comes after BOE Minutes revealed King voted to increase QE by 75 billion rather than the 50 billion passed by the central bank.  We were a bit shocked by King’s proposal considering most British data has been outperforming expectations.  In fact, we were surprised the BOE decided to inject more liquidity in the first place.  The development is unsettling Pound traders as uncertainty rises regarding the BOE’s future monetary policy.  We believe King may fear the Pound is overheating from previous investor optimism.  The faster the Pound appreciates, the less attractive British services become to foreign countries.  Hence, King may be trying to give Britain’s economy a little more breathing room as it attempts to recover from a historic downturn.

Speaking of recent improvements in Britain’s data, Retail Sales came in a basis point ahead of analyst expectations today.  Furthermore, Britain’s CPI and RPI outperformed earlier this week.  As a result, the fundamentals are telling a more positive story than what investors are interpreting from King’s vote at the BOE meeting.  With Britain’s data finished for the week, the GBP/USD’s immediate-term movement should be highly dependent on the performance of U.S. equities coupled with the EU’s slew of PMI data on Friday.  Though we’ve seen the Cable’s correlation with U.S. equities flip-flop this month, we expect the positive correlation should play out until further notice.

Technically speaking, both the Cable and the EUR/USD failed to tackle their respective August 13th highs yesterday as the currency pair’s didn’t receive enough buy-side interest to power through.  Hence, our 3rd tier downtrend line and August 13th highs continue to play an important role to the upside.  Meanwhile, the GBP/USD’s gravitation towards the 1.65 area continues.  This psychological zone is turning out to be as strong as we anticipated, and the currency pair will likely need an upward movement with conviction to leave 1.65 in the rearview.  As for the downside, the Cable has Wednesday lows, our 1st tier uptrend line, and August 17th lows to fall back on.  Investors should also note our 1st tier uptrend line is reaching an inflection point with our 2nd tier downtrend line, signaling the possibility of heightened near-term volatility.

Present Price: 1.6471

Resistances: 1.6482, 1.6512, 1.6544, 1.6569, 1.6608

Supports: 1.6455, 1.6428, 1.6398, 1.6376, 1.6346

Psychological: 1.65

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither 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 jumped over our 3rd tier uptrend and 2nd tier downtrend lines despite very disappointing German PPI and EU Current Account numbers yesterday.  Germany’s collapse in PPI adds onto last week’s decline in EU CPI.  Hence, EU prices are freefalling while producer prices decline at a faster rate than consumer prices.  Therefore, the ECB may be inclined to inject more liquidity since they have held a relatively neutral monetary policy stance while the BOE takes measures to re-inflate the Pound.  In regards to the surprise decline in the EU’s Current Account, this implies an outflow and consequently increase in supply of Euros since the EU’s imports outnumber its exports.  Regardless of yesterday’s negative data points, investors snapped up the Euro amid a flight from the Dollar.

We notice a sizeable pullback in the USD/JPY taking place while the GBP/USD and gold drag with the EUR/USD.  Keep in mind these movements are occurring with the S&P futures hovering around par in the wake of an increase in weekly U.S. Unemployment Claims.  Hence, the EUR/USD is basking in Dollar negativity stemming from words of caution from it seems investors are making a slight return to safety in the Dollar with global economic uncertainty creeping in.  However, heavyweights Warren Buffett and El-Erian continue their warnings that the U.S. Dollar could be stuck between a rock and a hard place if the Federal Reserve doesn’t tighten liquidity at the appropriate time.  As a result, it’s possible the EUR/USD could receive some psychological support as investors contemplate an unknown future.

Technically speaking, activity favored the buy-side yesterday on the 1-hour.  However, the EUR/USD failed to eclipse August 13-14 highs, putting near-term momentum in favor of the downside considering the size of the 8/13-8/17 pullback.  The EUR/USD certainly isn’t clear of its downtrend considering the currency pair’s back in the thick of its 7/20-7/28 trading zone.  The lid of this trading range should prove to be worthy near-term resistance along with our 3rd tier downtrend line.  Investors will likely refrain from breaking these technical obstacles with a wave of EU PMI data coming on Friday.  As for the downside, the EUR/USD has several strong trading range supports and all three of our uptrend lines waiting well below present price.  It will be interesting to see how investors treat the Dollar should another pullback in U.S. equities ensue.

Present Price: 1.4214

Resistances: 1.4236, 1.4248, 1.4259, 1.4268, 1.4278

Supports: 1.4200, 1.4188, 1.4180, 1.4163, 1.4154

Psychological: 1.40

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither 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

Yesterday’s bearish behavior by the GBP was felt by many traders as the Bank of England’s (BOE) Monetary Policy Committee (MPC) released the minutes from a recent meeting regarding interest rates and quantitative easing. There was a hint of dissension among the policymakers with some calling for a greater extension of the quantitative easing program which ended up pumping an additional 50 billion Pounds into the UK market recently. Fears over weak inflationary growth and market downturns have some MPC members lobbying for more aggressive measures, which puts pressure on the Pound.

Economic News

USD – The Dollar Turns Down as US Stocks Rebound

The greenback fell against 11 of its 16 major currency counterparts Wednesday before a report, expected to show an index of U.S. economic indicators, rose for a 4th consecutive month. The U.S Dollar traded near a 1-week low against the EUR on speculation economic data will add to signs the global recession is easing, prompting investors to seek higher-yielding assets. The Dollar changed hands at $1.4230 vs. the EUR down from $1.4127 yesterday.

The U.S. Dollar was supported in earlier trading by declining U.S. stocks, following Chinese markets, prompting investors to move toward assets perceived as less risky.
However, the Dollar weakened against the Japanese yen, although it came off the day’s worst levels, as a sharp slide by China’s stock market overnight raised concerns about the global economic outlook and boosted the Japanese currency’s allure.

In recent months, the USD has tended to fall as stock prices and risk appetite rises, giving investors less impetus to buy dollars as a safe haven. In the absence of fresh economic data, currencies were mostly following stock prices for direction. Traders may see more volatility and choppy trades given that not much is happening in terms of events. So any correction to stock markets could be a key driver for the USD currency.

EUR – The EUR Hits Session High above $1.42

Europe’s single currency gained versus 11 of its 16 major rivals on Wednesday as economists said the Markit Economics’ composite index of both industries may be the highest in a year. The index is based on a survey of purchasing managers and due for release on Aug. 21st. The EUR added to gains against the U.S. Dollar, rising 0.6%, as stocks pared losses and oil prices rose sharply. The EUR also pared losses against the Yen and was last down 0.1% at 133.60 yen, off a one-month low of 132.16.

The European currency rose from near a 1-week low against the GBP on speculation a European report this week will show manufacturing and service industries contracted at a slower pace, adding to signs the recession in the 16-nation region is abating. The British Pound weakened 0.9% to 86.07 pence per EUR and dropped 0.2% vs. the Dollar to $1.6534.

The GBP extended losses after Bank of England (BOE) meeting minutes showed that some policymakers had wanted to extend quantitative easing by more than the amount decided. The central bank is spending 175 billion pounds to buy assets in a move aimed at pushing down borrowing costs to revive the U.K.’s shrinking economy. Asset purchases require the BOE to print money, which some investors fear may lead to an oversupply of the Sterling and eventual inflation.

JPY – JPY Rises as Chinese shares fall more than 2%

The Japanese yen rose versus other major currencies on Wednesday as a fall in Chinese shares made investors cautious about returning to risky investments. The Yen climbed to its strongest level in 3 weeks against the U.S. Dollar after China’s benchmark stock index fell into a so-called bear market, reigniting concern that the global economic recovery is stalling.

China’s main stock index, which tracks the bigger of China’s stock exchanges, slumped 4.3%, leading other Asian bourses lower and boosting demand for the Yen as a refuge. The Yen typically rises during times of financial turmoil because Japan’s trade surplus reduces the nation reliance on foreign capital. The JPY also gained against all 16 major counterparts after the Daily Telegraph cited Hartmut Schauerte, the economic state secretary, saying Germany is preparing measures with the Bundesbank in anticipation of a new credit crunch wave early next year.

Crude Oil – Oil Rallies on Sharp U.S. Inventory Data

Crude prices soared above $73 a barrel on Wednesday, as rising U.S. equities and an unexpected drop in inventories propelled oil prices to finish at their highest level since early June. Oil surged as much as 5.2% yesterday after crude stockpiles dropped 8.4 million barrels last week, the most since the week ended May 23, 2008, an Energy Department report showed. Crude Oil also gained as the U.S Dollar declined against other currencies, increasing the appeal of commodities to investors looking for an inflation hedge.

Oil prices fell earlier on Wednesday, hitting a low of $68.05 after a near 5% slump in Chinese shares sent doubts rippling through global markets about the strength of the world economic recovery. Traders also watched for storms in the Atlantic Basin but no immediate threat was seen to U.S. oil installations in the Gulf of Mexico. Expectations for a potential rebound in the economy could increase fuel consumption and have already helped lift prices.

Technical News

EUR/USD

Fresh bearish crosses on the hourly MACD and 4-hour Slow Stochastic suggest that a downturn is impending. With weekly momentum shifting into a downward posture, forex traders may see this pair go bearish in the coming hours. Going short may be a wise choice.

GBP/USD

This pair is currently giving off mixed signals as bullish and bearish crosses have recently formed on various indicators, which are contradicting one another. Long-term momentum still appears bearish and the doji candlestick formation on the daily chart suggests a downward correction may be imminent. Going short appears to be the preferable strategy.

USD/JPY

Recent upward movement has pushed the price of this pair into the over-bought territory on the hourly chart’s RSI, suggesting downward pressure. The bearish crosses on the hourly Slow Stochastic support this notion. Going short with tight stops appears to be a good decision for today’s trading.

USD/CHF

There appears to be a bullish cross on the 4-hour Slow Stochastic, with an impending bullish cross on the 4-hour MACD as well, indicating an impending upward movement. The bullish cross on the hourly MACD supports this notion and gives it some added urgency. Going long as soon as possible might be a wise decision.

The Wild Card – CHF/JPY

The latest upward movement on this pair has given forex traders two distinct signals for a downward correction later today. The first is a bearish cross on the 4-hour Slow Stochastic, suggesting a downward movement is imminent. The second is a fresh doji candlestick formation on the 4-hour chart, which typically signals a reversal is in the making. Entering short positions as soon as possible may help traders capture decent profits.

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 Fx Research

€

The euro moved higher vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4180 level and was supported around the $1.4085 level.  Weakness in global equity markets capped the common currency’s upside potential today but North American dealers chipped away at the $1.42 handle.  Data released in the U.S. today saw MBA mortgage applications improve +5.6% in their latest week, consistent with the recent uptick in the U.S. housing market.  Data to be released in the U.S. tomorrow include weekly initial jobless claims and continuing jobless claims.  In eurozone news, European Central Bank member Weber reported the central bank will exit its quantitative easing measures “once the economic recovery becomes sustainable and the situation on financial markets gets sufficiently stable.”  Weber also expressed concern regarding the strength of banks and there is a growing concern of credit bottlenecks in the banking sector over the next few months.  Furthermore, he noted the improvement in German Q2 GDP was on account of fiscal stimulus and a looser monetary policy.  Data released in the eurozone today saw June construction output off 1.1% m/m and 8.8% y/y while German July annual producer price inflation registered its steepest decline since 1949, evidence that factory gate prices may not be contributing to consumer price inflation in Europe’s largest economy.  Euro bids are cited around the US$ 1.3900 figure.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥93.75 level and was capped around the ¥94.95 level.  The pair moved lower in concert with widespread yen strength after Chinese equity markets tumbled again, precipitating another global sell-off in Asian and European markets.  The yen also strengthened ahead of the Japanese general election on 30 August. The  Democratic Party of Japan looks poised to defeat the Aso government and long-incumbent Liberal Democratic Party.  Market chatter suggests a DPJ government may be more tolerant of a stronger yen, and yesterday’s news suggested a DPJ government may call on Bank of Japan to purchase more Japanese government bonds.  BoJ Governor Shirakawa will attend the Kansas City Fed’s Jackson Hole Symposium from 20-24 August.    The Nikkei 225 stock index lost 0.79% to close at ¥10,204.00.  U.S. dollar offers are cited around the ¥104.15 level.  The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥132.15 level and was supported around the ¥134.50 level.  The British pound moved lower vis-à-vis the yen as sterling tested offers around the ¥153.60 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥87.15 level. In Chinese news, the U.S. dollar lost ground vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8320 in the over-the-counter market, up from CNY 6.8309.

₤

The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.6375 level and was capped around the US$ 1.6590 level.  Sterling was sharply lower earlier in the European session after minutes from Bank of England Monetary Policy Committee’s August deliberations were released.  The minutes revealed that Governor King and two other members of the MPC voted in the minority for a ₤75 billion increase in the BoE’s quantitative easing program, an amount that would have expanded the entire facility to ₤225 billion.  The MPC voted 6-to-3 to enact a ₤50 billion expansion, itself larger than many traders expected.   Today’s minutes suggest the BoE may be further away from unwinding its monetary stimuli than previously believed.  Data released in the U.K. today saw the August CBI industrial trends survey improve to -54 from -59, rendering industrial output at its best level since June 2008.  Cable bids are cited around the US$ 1.6215 level.  The euro gained ground vis-à-vis the British pound as the single currency tested offers around the ₤0.8625 level and was supported around the ₤0.8530 level.

Daily Market Commentary provided by GCI Financial Ltd.

GCI Financial Ltd (”GCI”) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (”Forex”) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (”CFDs”) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.

DISCLAIMER: GCI’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.

By CountingPips.com

A report from Statistics Canada today showed that the Leading Indicators index increased in July. The Leading Indicator Index, which measures future economic activity, rose by 0.4 percent in July following revised flat returns in May and June.  July’s data was better than expected as market forecasts were calling for a 0.2 percent increase.

Contributing heavily to the overall index increase was a gain in the stock market index by 5.7 percent and a gain in the housing index by 4.5 percent.  Also showing  positive results were the money supply which increased by 0.7 percent, US Conference Board by 0.4 percent, average workweek hours by 0.3 percent and other durable goods by 2.1 percent. Contributing negatively to the index were shipments with a 0.02 percent fall, new orders for durables with a 5.9 percent decrease, furniture and appliance sales with a 0.4 percent fall and business and personal services employment with a 0.2 percent decline.

Canadian consumer prices fall by 0.3 percent.

Canada’s consumer prices decreased in July according another report released today by Statistics Canada. The consumer price index fell by 0.3 percent from June to July following a gain of 0.3 percent in June.  Consumer prices registered an annual decrease of 0.9 percent from the July 2008 level. June’s annual rate had registered a decline by 0.3 percent.  Market forecasts were expecting the consumer price index to decline by approximately 0.2 percent for the month to an annual rate fall of 0.8 percent.

Core consumer prices, excluding energy prices, showed no change in July and registered an annual increase of 1.8 percent. Market forecasts expected core consumer prices to rise by 0.1 percent in July and register an annual increase of 1.9 percent.

CAD rises vs. USD in Forex Trading.

The Canadian dollar has gained ground against the US dollar today in forex trading after initially falling verses the American currency earlier in the day. The USD/CAD currency pair opened trading today at 1.1030 cad per usd and has increased to an exchange rate of 1.0972 at 2:35pm in the US trading session. The USD/CAD had risen to an intraday high of 1.1113 in the European trading session earlier today before retreating lower.

Source: ForexYard

Yesterday’s sudden boost in equity markets world-wide has helped drive many of the riskier currencies, such as the EUR and GBP, higher versus their primary currency rivals. Safe-havens such as the Dollar and Yen took a small beating yesterday as well from this news. With investor confidence on the rise in Europe, a rally for the European currencies may be overdue. This in turn could also push commodity prices higher in the short-term.

Economic News

USD – Dollar Plummets on U.S. Equity Market Rally

The Dollar fell during much of Tuesday’s trading against a number of its major currency pairs, as U.S., European and Japanese equities rallied. This was partially sparked by a sharp increase in German investor confidence, and better than forecast earnings from top U.S. companies such as Target and Home Depot. Demand for the greenback slumped versus a number of major currencies in early trading, as the rally in equities led to a fall in demand for safe-haven assets.

The USD declined against the British Pound by a massive 200 pips to 1.6550. This performance was owed to mounting British inflation. Against the EUR, the USD also saw much bearishness, as the EUR/USD pair slided significantly in early trading. However, this was in some senses short-lived, as U.S. Building Permits and other
weak housing data poured some demand back into the USD. Thus the
USD did make a short recovery, as the EUR/USD cross finished trading at the 1.4128 level. The USD/JPY pair finished even for the day at 94.75, as demand for these low-yielding currencies was lower yesterday.

Looking ahead to today, there is much data that is likely to determine the volatility of the forex market, and the strength of the U.S. Dollar; the most important of these being the publication of U.S. Crude Oil Inventories at 14:30 GMT. A lower figure could help push-up Oil prices, whilst putting downward pressure on the USD. The opposite result could in-turn strengthen the USD. Data from across the Atlantic, such as British CBI Industrial Orders Expectations and the Current Account publication from the Euro-Zone is also likely to have important implications for the USD in Wednesday’s trading.

EUR – Pound Climbs on Higher Inflation Figures

The Pound climbed yesterday on higher inflationary figures, as the Office for National Statistics reported that the Consumer Price Index was at 1.8% in July, significantly higher than the forecasted 1.5%. This proves that the Pound has been far more resilient in this economic crisis than many analysts had forecast. This led currency analysts to the conclusion that the Bank of England (BoE) may come up with a much more disciplined monetary policy in the near future.

The British currency jumped against the Dollar by 200 pips to the 1.6550 level, and the GBP/JPY pair rose by 200 pips to the 157.00 level, as demand for the lower-yielding/safe-haven JPY fell in Tuesday’s trading. The GBP gained about 90 pips vs. the EUR, as the pair reached the 0.8535 level. Much of this was owed to data from Britain. Also, it proves that even the strong European economic data on Tuesday was unable to help the EUR make inroads into the GBP. The EUR/USD finished trading slightly higher near the 1.4130 level, despite making inroads into the Dollar in earlier trading.

Today, there are several economic publications that are expected to drive-up the GBP and EUR crosses. From Britain, there is the MPC Meeting Minutes and CBI Industrial Order Expectations at 08:30 GMT and 10:00 GMT respectively. From the Euro-Zone, there is the release of the German PPI figures at 06:00 GMT, and the publication of the Current Account at 08:00 GMT. These key releases are expected to set the trend for both the British and Euro-Zone currencies in today’s trading. In order to make big profits today, it’s advised that you open your EUR and GBP positions now.

JPY – Yen Collapses against the Pound

The Yen collapsed against the Pound on Tuesday, as the pair finished 200 pips higher at the 157.00 level. This rise in the GBP and fall in the JPY was largely due to higher than expected GDP figures from Britain. However, the JPY bearishness yesterday was also owed to global stock market rallies owed to higher than forecast earnings for a number of top U.S. companies. This reduced the demand for lower-yielding assets, such as the JPY.

The JPY actually finished trading almost unchanged against the USD, but lower vs. the EUR. There have been fears recently that the Yen may be in for a steep decline if Japan doesn’t continue increasing its exports. These fears have been exasperated despite the Japanese economy officially rising out of recession in the previous quarter. The JPY is set to move today on important economic releases from Britain, the U.S. and the Euro-Zone.

Crude Oil – Crude Oil Soars to Over $72 a Barrel

The price of Crude Oil soared by about $3.25, or over 4%, to just over $72 a barrel, reversing 3 consecutive days of losses. Crude was boosted as the Dollar was bearish in much of Tuesday’s trading, which increased demand for commodities. The weakened USD was caused by global stock market rallies led by the U.S. This was also caused by optimistic economic data from Germany, the largest economy of the Euro-Zone. Furthermore, the weak USD led to higher demand for riskier assets.

Oil prices may continue rising for a number of reason’s in today’s trading. We have seen the commodity over-sold in recent trading days. Additionally, many optimistic signs from leading and fast-growing global economies have led many investors to realize that there may be a big jump in Crude Oil demand in the near future. Additionally, as long as market optimism stays high, so will the demand for Crude Oil.

Technical News

EUR/USD

This pair has been trading inside a bullish channel for the past two days and appears poised to continue doing so today. Short-term indicators show neutrality while the 4-hour MACD signals a bullish cross. However, long-term indications point slightly downward. Staying within the current channel might be wise. Traders should buy on lows and sell on highs within this trend.

GBP/USD

There appears to be a fresh bearish cross on the hourly MACD and 4-hour Slow Stochastic, giving off strong indications for an impending bearish movement. Weekly momentum remains flat signaling that there may be a lack of real pressure in either direction, which adds weight to the other technical indicators. Going short might be preferable today.

USD/JPY

This pair’s indicators are showing signs of an imminent bullish movement. The daily Slow Stochastic recently formed a bullish cross and the 4-hour MACD has done so as well. With other indicators turning into an upward posture, it is clear that going long might be the best strategy today.

USD/CHF

This pair’s mild bearish channel continues unabated today. All indicators are showing neutrality with the MACD on the hourly and 4-hour charts floating near 0.0. Weekly momentum has also turned downward from the recent uptrend seen last Friday. Trading within this range may not be a bad choice today.

The Wild Card – Crude Oil

There seems to be a fresh bearish cross on the hourly MACD, 4-hour Slow Stochastic, and daily MACD, each signaling that a downward correction is imminent. With the price floating near the over-bought territory on the 4-hour RSI, this downward movement may indeed be on its way. Forex traders should try to not miss out on the opportunity to call the reversal and ride out the crashing wave for profits.

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 CountingPips.com

U.S. housing starts, building permits and housing completions increased in the month of July according to data released by the Commerce Department on new residential construction. Housing Starts fell by 1.0 percent in July to a seasonally adjusted annual rate of 581,000  following June’s total of a revised 587,000 starts.  July’s total is down 37.7 percent on an annual basis when compared with July of 2008. The decline in housing starts was below the 598,000 annual rate the market forecasts were expecting for the month.

Building permits statistics, used as a predictor of future construction, showed a seasonally adjusted annual rate of 560,000 permits in July. This was a decrease of 1.8 percent compared to June and a 39.4 percent drop from July 2008 level. The July data in building permits was also below the market forecasts that were expecting permits to number approximately 576,000 for the month.

Housing Completions for July decreased when compared to June as completions fell to an annual rate of 802,000 privately-owned housing completions. This is an decrease of 0.9 percent when compared to June’s completion totals and is 26.4 percent below the July 2008 level.

Producer Prices fall after three months of increases.

The Producer Price Index, released in a separate report by the Department of Labor, fell more than expected in July. Producer prices fell by 0.9 percent in the month of July following an increase of 1.8 percent in June and an increase of 0.2 percent in each of May and April. The annual rate of change for July showed that producer prices were 6.8 percent lower than the July of 2008 level following June’s annual rate that registered a 4.6 percent decrease. Market forecasts were expecting monthly producer prices to fall by 0.2 percent in July and the annual rate to register a 5.8 percent decline.

Helping to contribute to the lower ppi in July was the energy index which decreased by 2.4 percent for the month after increasing by 6.6 percent in June. Consumer food prices also dropped by 1.5 percent in July after gaining by 1.1 percent in June.

Core producer prices, excluding food and energy prices, fell by 0.1 percent in July following a rise of 0.5 percent in June. On an annual basis, core producer prices advanced by 2.6 percent for July compared with an increase of 3.3 percent in June. Market forecasts were expecting a 0.1 percent gain in monthly core prices and a 2.8 percent annual increase.

Dollar is lower in Forex Trade Today.

The U.S. dollar has been lower against the other major currencies in forex trading today.  The dollar has been weaker versus the euro, British pound, Australian dollar, Japanese yen, Swiss franc, New Zealand dollar and the Canadian dollar at 3:19 pm ET in the US trading session.

USD/CAD Chart – The US Dollar falling today versus the Canadian Dollar in forex trading and trading around 1.1012 after reaching a high of 1.1124 yesterday.

By Fast Brokers – The Cable has popped nicely from Monday lows and is trading back above the psychological 1.65 level.  Both Britain’s CPI and RPI indexes came in 3 basis points ahead of analyst expectations, contradicting fear over deflation caused by the BOE’s recent injection of liquidity to its QE package.  The Pound is experiencing considerable relative strength today in reaction to the data since investors punished Britain’s currency in reaction to the BOE’s actions.  The improvement in pricing gives investors hope that the BOE may cap its QE package from here on out.  Furthermore, the liquidity will only improve inflation, putting the BOE in a position to tighten liquidity sooner rather than later should the global economy continue to recover.

Despite today’s recovery in the GBP/USD, the currency pair still faces challenging near-term obstacles to the upside.  The Cable must deal with the lid of its 7/20-7/28 trading range, our 3rd tier downtrend line as well as 8/13 highs.  Additionally, the S&P futures are experiencing sizable downward pressure due to today’s weak pricing and housing numbers along with last week’s disappointing consumption data.  Hence, the GBP/USD’s barriers may prove challenging should the S&P futures not turn around due to their positive correlation.  On the plus side, the Cable is back above our 1.65 and our 2nd tier uptrend line, meaning the Pound should prove resilient if U.S. equities continue their slide.  Tomorrow Britain will release CBI Industrial Order Expectations along with the MPC’s Meeting Minutes.  Should these data points impress investors, the GBP/USD could continue to experience some immediate-term upward mobility.

Present Price: 1.6533

Resistances: 1.6537, 1.6562, 1.6593, 1.6611, 1.6633

Supports: 1.6505, 1.6482, 1.6455, 1.6428, 1.6398

Psychological: 1.65

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither 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 bottomed out yesterday despite the pullback in U.S. equities since investors were reacting to weaker than expected GDP data from Japan.  The setback in Japan’s GDP gave investors a good reason to halt the Yen’s appreciation and favor the Dollar.  However, today’s pop has failed to breach the USD/JPY’s important 1st tier uptrend line.  U.S. data has also come in below analyst expectations today, putting the economic comparison between the two nations in a deadlock.  Therefore, it seems the USD/JPY could follow the S&P futures closely for the immediate-term, particularly to the downside.  Further deterioration in U.S. equities could motivate traders to head for safety and favor the Yen.  The USD/JPY should ultimately correlate to the performance of economic data.  Disappointing U.S. data would likely knock equities lower and appreciate the Yen.

Meanwhile, bulls will attempt to build a new base above the psychological 95 level and get the USD/JPY back above our 1st tier uptrend line.  However, it seems the downside has more momentum for the time being.  The USD/JPY will look to our 1st tier uptrend line, May lows and March lows for support.  The next data release having an impact on this currency pair will be U.S. weekly Unemployment Claims on Thursday.

Present Price: 94.70

Resistances: 94.95, 95.15, 95.44, 95.65, 96.08

Supports:  94.52, 94.36, 94.08, 93.88, 93.52

Psychological: 95

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither 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.