InvestMacro FX

ource: ForexYard

The U.S. Dollar is expected to go extremely volatile today on the release of the ever so important U.S. Non-Farm Employment Change at 12:30 GMT. The other releases that are expected to drive trading between the USD and its main crosses today are the British PPI Input at 08:30 GMT, the U.S. Unemployment Rate at 12:30 GMT, and the Canadian Unemployment Rate at 11:00 GMT. Forex traders are advised to open their USD positions now, prior to the release of the vital economic data from the leading economies.

Economic News

USD – Dollar Climbs on Increased Risk Aversion

The U.S Dollar rose broadly yesterday against the GBP and EUR, due to uncertainty about the global economic outlook, and a renewed bout of risk aversion ahead of a key government report on the U.S. labor market due today. By yesterday’s close, the USD rose against the GBP, pushing the oft-traded currency pair to 1.6769. The Dollar experienced similar behavior against the EUR, and closed at 1.4360.

A leading indicator released yesterday from the U.S was the Unemployment Claims report. Data showed a drop in U.S. weekly jobless claims failed to support expectations that the labor market and the economy were stabilizing. The report showed claims fell by 38000 to 550000 last week, the fifth straight time claims were under 600000, after being above that level since January.

The other factor that led to the bullish Dollar yesterday was that U.S stocks fell, which boosted demand for the USD as a safe-haven currency. Moreover, renewed demand for the Dollar comes after a sharp drop earlier in the week, when the greenback hit multi-month lows versus the EUR, as investors favored foreign currencies and other riskier assets such as equities.

Looking ahead today, the news event that may have a very large impact on the Dollar and its main currency pairs in today’s trading is the Non-Farm Employment Change at around 12:30 GMT. This report is very important as it is likely to impact Dollar volatility. Traders should pay close attention to the market as there is an opportunity for traders to capitalize on the fluctuations which are likely to follow this release.

EUR – EUR Falls against the USD on Interest Rate Decision

The EUR finished yesterday’s trading session with mixed results versus the major currencies. The 16-nation currency extended gains versus the Pound Sterling during yesterday’s trading session, to trade above 0.8560 amid a broad sell-off in the GBP. This was largely owed to the Bank of England (BoE) increasing quantitative easing to ₤175 billion from ₤125 billion. The EUR did see bearishness as well, as it lost over 50 pips against the USD, and closed at the 143.60 level.

A leading indicator released yesterday was the EUR Minimum Bid Rate. The European Central Bank (ECB) left Interest Rates at a record low of 1%, as it tries to get credit flowing again to strengthen an economy that may return to growth this quarter. Some reports show the outlook is brightening for the Euro-Zone. Economic confidence rose to an eight-month high in July, and the contraction in the region’s manufacturing and service industries has slowed. In Germany, Europe’s largest economy, Factory Orders posted their biggest gain in two years in June.

As for today, the most important economic indicator scheduled to be released from the Euro-Zone is the German Industrial Production at 10:00 GMT. Traders will be paying close attention to today’s announcement as a stronger than expected result may boost the EUR in the short-term. Traders are also advised to follow the Non-Farm Employment Change figures coming out of the U.S at 12:30 GMT, as this result may set the EUR’s main currency pairs for the day.

JPY – JPY Set to Move on Key Economic Data

The Yen completed yesterday’s trading session with mixed results versus the other major currencies. The JPY was broadly unchanged versus the EUR yesterday and closed its trading session at around the 137 level. The JPY experienced bullishness against the GBP as it jumped around 250 points to close at the 159.86. This behavior comes about as exports improve and manufacturers boost production. However, deflation may escalate as households, whose spending accounts for more than half of the nation’s GDP, delay purchases on the expectation that goods will get cheaper, restraining a recovery in the world’s second-largest economy.

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. Non-Farm Employment Change 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 – Oil Prices Stabilize Near $72

Crude Oil ended yesterday’s trading below $72 as equities declined and the Dollar strengthened, undermining the need to use commodities as an alternative investment. Crude dropped to an intra-day low of $70.24 a barrel before rebounding to the settlement level of 71.55, which was little changed compared with the previous session.

Oil prices were pressured by the weaker equity markets and the strong Dollar yesterday, as the USD strengthened against the EUR and GBP, limiting the demand for Crude Oil as an alternative investment. Today, the U.S monthly Non-Farm Employment report will likely determine Crude’s next moves, with any mildly positive elements within the data is likely to keep the Crude price in an upwards direction.

Technical News

EUR/USD

The EUR/USD cross experienced much bearishness in yesterday’s trading. The pair is now trading at the 1.4355, and the technical indicators signal that there is much bearishness that may take place in this pair today. The daily and weekly chart’s Slow Stochastic shows that the pair is in the overbought territory, and a downward move may be expected for today. This is also supported by the chart’s 4-hour MACD. Going short with tight stops may turn out to pay off today.

GBP/USD

The pair went through much bearishness in yesterday’s trading, despite much bullishness in the week prior to this. It seems that the pair may be oversold, according to the chart’s main oscillators. The 4-hour Stochastic Slow signals a bullish correction for today. This is also backed up by the chart’s 1-hour MACD and Slow Stochastic. Entering this trend at an early stage may turn out to pay off in today’s trading.

USD/JPY

The USD/JPY pair has been range trading for the past several days between the 94.30 and 95.60 levels. The chart’s oscillators seem to be showing mixed signals. On one hand, the daily chart’s MACD indicates an upward trend for today. On the other hand, the hourly chart’s MACD indicate that there may be a bearish trend in today trading. Entering the pair when the signals are clearer may turn out to be a wise choice today.

USD/CHF

The pair currently stands at the 1.0646 level after experiencing much bullishness in the past 2 days. It seems that this trend may be under threat, as the chart’s 4-hour RSI signals that the cross has run out of steam, and that a bearish correction is imminent. Today’s possible bearish correction is also supported by the hourly chart’s MACD. Going short with tight stops may turn out to pay off as the trading week comes to a close.

The Wild Card – Crude Oil

Crude Oil has experienced much bullishness in the past week-and-a-half of trading, as it now stands at the $71.78 level. The daily chart’s MACD and Bollinger Bands signal that there may be some bullishness left in the pair for the coming day. The chart’s weekly Bollinger Bands and MACD also support this view. Going long with tight stops may turn out to pay off today for forex traders.

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

Today’s economic news centered around the interest rate decisions coming from the Bank of England and the European Central Bank.

The Bank of England announced the decision to hold its interest rate at its lowest standing in the bank’s history at 0.50 percent as widely expected. The BOE had last reduced its interest rate by 50 basis points on March 5th and also cut its rate by the same amount in each of January and February. The notable news from the bank statement today was that its members “voted to continue with its programme of asset purchases financed by the issuance of central bank reserves and to increase its size by £50 billion to £175 billion” that was first announced on March 5th.

The European Central Bank, meanwhile, also held its interest rate today at its lowest standing in the banks history as widely expected.  The ECB last reduced its interest rate by 25 basis points on May 7th to its current level of 1.00 percent. The ECB also had reduced the rate in April by 25 basis points and by 50 basis points in March.

Jean-Claude Trichet, the President of the ECB, commented on the economy in his press conference today saying that, “The data and survey information that have become available since our meeting on 2 July 2009 have broadly confirmed our previous expectations. While uncertainty is still high, there are increasingly signs that the global recession is bottoming out. As regards the euro area, recent surveys suggest that the pace of contraction is clearly slowing down. However, economic activity over the remainder of this year is expected to remain weak. Looking ahead into next year, after a phase of stabilisation, a gradual recovery with positive quarterly growth rates is expected.”

US Dollar gains in forex trading.

The U.S. dollar has been stronger in forex trading today against the other major currencies after the interest rate announcements.  The euro, British pound, Swiss franc, Australian dollar, Canadian dollar and Japanese yen have all declined versus the American currency.

The EUR/USD pair has declined from today’s opening rate of 1.4400 dollars at 00:00GMT to trading to 1.4350 at 3:47 pm EST in the afternoon of the U.S. trading session according to currency data by Oanda.

The GBP/USD has declined from today’s opening level at 1.6980 as this currency pair trades at 1.6774. The US dollar has increased against the yen as the USD/JPY opened today at 95.06 and has advanced to trading at 95.42.

The dollar is increasing today versus the Swiss franc as the USD/CHF has gone from the 1.0622 opening rate to trading at 1.0648 while the dollar has also advanced today against the Canadian loonie as the USD/CAD has risen to trading around the 1.0772 level today after opening at 1.0712.

The Australian Aussie has fallen versus the US dollar today as the AUD/USD has declined to the 0.8388 level after opening at 0.8418. The New Zealand kiwi has been almost unchanged against the dollar as the NZD/USD has reached the 0.6703 level today after opening the day at 0.6697.

GBP/USD Chart – The British Pound falling against the US Dollar today in forex trading after the BOE increased its asset purchase program.

By Fast Brokers – Gold is bouncing between our 2nd and 3rd tier downtrend lines as the Dollar appreciates across the board.  Investors are reacting to the BOE’s decision to administer a monetary shock by injecting another $84 billion into its QE package.  The GBP/USD is under considerable pressure, hampering any excitement over lower than expected weekly Unemployment Claims.  Meanwhile, the S&P futures continue to battle with their highly psychological 1000 level.  It appears bulls may be running low on energy, implying consolidation in gold is the result of overbought conditions.  We wouldn’t be surprised to see the precious metal continue its consolidation as the S&P deals with 1000.  The bulls have been on a huge run lately, so it’s only healthy that the markets experience some profit taking and consolidation.  Regardless, momentum is clearly in favor of the uptrend since economic data continues to outperform while 2nd quarter earnings season has exceeded expectations.

Meanwhile, gold is trading back above August 3rd highs with the psychological $950/oz level far out of reach.  However, if the precious metal can’t hold our 2nd tier downtrend line, it may defect towards our 1st tier downtrend line and our bottom-end support.  As for the topside, gold’s immediate barriers are our 3rd tier downtrend line and Tuesday’s highs.  If the precious metal can get above these two obstacles, gold could accelerate towards $980/oz.

Present Price: $966.90/oz

Resistances: $966.91/oz, $968.60/oz, $970.04/oz, $971.44/oz, $972.83/oz

Supports: $965.26/oz, $963.81/oz, $962.24/oz, $961.00/oz, $959.34/oz

Psychological: $950/oz

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 is continuing its pullback as anticipated, stumbling towards our 3rd tier uptrend line as it appears the bulls have exhausted themselves.  The ECB kept its monetary policy unchanged, also as anticipated.  However, the BOE increased its QE package by $84 billion in order to try and counter deflationary forces.  The BOE’s move is spooking FX markets a bit, appreciating the Greenback across the board.  Furthermore, gold is consolidating while the S&P hovers around 1000 despite lower than expected weekly unemployment claims.  The S&P’s lack of reaction to the Unemployment Claims number shows the present run is just about out of gas.  Therefore, continued consolidation with a downward sloping pattern is likely as investors take a deep breath and recoup.  However, the break may not last so long since both Britain and the U.S. will release more important economic data tomorrow along with Germany’s m/m Industrial Production number.

Speaking of data, a much better than expected Factory Orders number from Germany flew under the radar with the central banks grabbing the spotlight.  The return to growth in German Factory Orders is holding steady, an encouraging sign for the EU economy as a whole.  The EU is getting a positive piece of data at just the right time considering the underperformance of EU economic Data as of late.  A positive German Industrial Production number tomorrow could help the EUR/USD build some relative strength.  After all, the ECB is the central bank sticking to its guns while Britain digs deeper into its pockets to increase liquidity.  However, the Euro’s comparative strength may not last long since the BOE’s injection should wear off rather quickly.  Furthermore, regardless of any pullbacks, the momentum is still in favor of the uptrend since news and data out of the U.S. and Britain has been resoundingly positive over the past month.

As for the immediate-term, the EUR/USD may experience a little more selling pressure with investors cashing in on mixed global data.  Therefore, we wouldn’t be surprised to see the currency pair duck down towards our 3rd tier uptrend line.  Speaking of which, the EUR/USD is trading above all three of our uptrend lines with only a makeshift 3rd tier downtrend line clamping down the currency pair.  The EUR/USD remains comfortably above June 3rd and July 28th highs.  Hence, the uptrend is clearly in control in the moment, and it would take a large technical downward movement to dislodge the EUR/USD’s upward momentum.

Our 3rd tier downtrend line and the psychological 1.45 level appear to be the only near-term barriers separating the EUR/USD from a retest of December 18th highs.  The other factor capping the EUR/USD’s upward mobility is the S&P’s interaction with 1000.  The 1000 area should prove to be a challenging obstacle.  The S&P’s ability to leapfrog 1000 should play an important role in the EUR/USD’s ability to overcome its own barriers to the topside.  Therefore, investors should keep a close eye on U.S. equities and Friday’s key employment data.  If either the U.S. Unemployment Rate or Non-Farm Employment Change are higher than anticipated the EUR/USD may experience heightened volatility to the downside.  On the other hand, positive employment data would likely provide a strong counterbalancing force.
Present Price: 1.4363

Resistances: 1.4391, 1.4441, 1.4476, 1.4506, 1.4546

Supports: 1.4348, 1.4305, 1.4266, 1.4242, 1.4225

Psychological: 1.45

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 BOE delivered a monetary shock today, increasing its QE package by $84 billion despite our belief the central bank would refrain from injecting more liquidity.  After all, we’ve seen very encouraging data from Britain covering services, manufacturing, housing and unemployment.  However, it appears the BOE wants to be on the safe side, taking rampant optimism as an opportunity to deliver a blow to the Pound.  The GBP/USD has been on a tear lately, placing the exportation of British manufacturing and services industries at a competitive disadvantage.  Hence, the BOE is doing what it can to even the table.  One worrying side-effect of today’s injection of liquidity is that Britain’s credit rating has been questioned over the past couple months due to a deteriorating governmental balance sheet.  Therefore, even though Britain’s economy is on the path to recovery, additional debt runs the risk of compromising the nation’s credit rating if the global economy should experience a sizable setback.

The BOE’s injection of liquidity is having its desired effect, knocking the GBP/USD below our previous 3rd tier uptrend line on climbing sell-side volume.  We believe the Cable could have quite a bit of room to the downside if it doesn’t recovery above our now 2nd tier uptrend line in a hurry. The next worthy supports to the downside appear to be August lows and October 30th highs.  Therefore, a retracement towards 1.67 may be in the works.  In the meantime, the GBP/USD may not get much immediate-term assistance from the S&P futures since they’re having a difficult time with 1000.  The S&P futures aren’t reacting to the lower than expected weekly unemployment claims, showing bulls may be worn out and ready for more profit taking.  However, more positive employment data from the U.S. and a better than expected PPI release from Britain tomorrow could help counteract the present pullback and get the GBP/USD back on track.

Meanwhile, investors should avoid having short-term memory loss right now.  Economic data from Britain has been overwhelmingly positive lately, and the 2nd quarter earnings season has fared better than analyst expectations.  Therefore, there’s little reason to be fundamentally negative on the GBP/USD.  While the Cable has quite a bit of mobility to the downside due to its recent strong run, today’s monetary shock from the BOE should only prove temporary.  Today’s injection of liquidity shouldn’t have the power to derail the GBP/USD’s medium-term uptrend on its own.  Hence, investors should return to their senses after today’s shock wears off.  As for the upside, the Cable will have to deal with our new 1st tier uptrend line along with August highs, our 2nd tier downtrend line and the psychological 1.70 level.  It seems the GBP/USD will have to consolidate and build a new base before it can think about reattempting these barriers.

Present Price: 1.6809

Resistances: 1.6837, 1.6851, 1.6874, 1.6895, 1.6910

Supports: 1.6791, 1.6775, 1.6735, 1.6708, 1.6693

Psychological: 1.70

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 is popping off our 1st tier uptrend line and is trading back above the psychological 95 level as we type.  Today’s move higher is clearly an act of correlation.  There’s no game-changing news on the wire from Japan, and the Dollar is appreciating rapidly against the Pound after the BOE’s injection of liquidity.  We notice a broad-based appreciation of the Dollar as well as negative consolidation in both gold and the S&P futures.  Hence, it seems investors are making a little run to safety in light of the BOE’s cautious stance at today’s monetary policy meeting.  We believe the USD/JPY’s solid move higher clarifies this assumption as the currency pair benefits from a return to the Dollar.

Meanwhile, the USD/JPY is experiencing considerable strength along our 1st tier uptrend line.  The USD/JPY has been resilient as of late, meaning the currency pair may have what it takes to test our 3rd tier downtrend line.  Our 3rd tier downtrend line is the next blockade to the upside.  Therefore, a test is likely as long as the USD/JPY creates some space between price and our 1st tier uptrend line.  On the other hand, we’ve seen the USD/JPY make promising moves time and again, only to revert to its old consolidative habits and retrace back beneath our 1st tier uptrend line.  Hence, bulls shouldn’t get their hopes up yet.

Present Price: 95.55

Resistances: 95.83, 96.16, 96.33, 96.77, 96.96

Supports:  95.41, 95.22, 94.99, 94.71, 94.46

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 Adam Hewison – Is this the Gold move we’ve all been waiting for?

Is the big move finally here? With so many stops and starts in the gold market, it’s hard to know which way is up.

We’re only going to leave this online for a short time. Given the state of the current economy, things move quickly. If the video isn’t watched soon, it won’t be of any use to you. So I urge you to take a few minutes to watch the possible outlooks for gold on the upside.

There is no need to register for this video and of course you can watch it with my compliments. I highly recommend watching this video today otherwise you risk missing out on what could be the move of the year.

Enjoy the video:

Watch the New Video Here…

All the best,

Adam Hewison
President, INO.com
Co-creator, MarketClub

Source: ForexYard

The Bank of England (BOE) and the European Central Bank (ECB) are set to release their policy statements regarding short-term interest rates at 11:00 and 11:45 GMT respectively today. These announcements always generate heavy market volatility and forex traders should be on guard today, ready to capture these fantastic money-making opportunities!

Economic News

USD – Greenback Dives on Bullish Equities

The U.S. Dollar fell on Wednesday toward its lowest point this year versus the EUR, giving up gains stemming from a decline in U.S. equities and a disappointing report from the U.S. services sector. The Dollar drifted sideways against the EUR, which was steady from late New York on Tuesday at $1.4411. The USD also fell 0.2% against the Japanese yen to 95.02 from 95.25 yen on Tuesday.

The greenback has slid broadly since March as riskier assets, such as equities and commodities, rallied on improving economic data, eroding demand for the safe-haven USD. The Dollar’s inverse relationship with investor appetite for risky assets has reasserted itself in recent weeks, analysts have said. The USD has also lost ground as equities posted a strong global rally and investors rushed into assets perceived as more risky.

Recent manufacturing data from the United States and China has spurred investors to sell U.S Dollars and invest in riskier currencies and assets, as did a smaller-than-expected contraction in the U.S. economy in the 2nd quarter. But the trend to sell the Dollar on the view that the worst of the world recession is over has become quite deeply rooted, making it tough for the Dollar to rally much.

EUR – EUR Little Changed Ahead of ECB Rate Decision

The EUR extended last week’s advance against the Japanese yen as retail sales in the 16-nation Euro-Zone rose 0.3% in June following a 0.4% decline in May. The EUR and Sterling were up slightly vs. the Dollar for the day, as investors awaited policy decisions by the European Central Bank (ECB) and the Bank of England (BOE) on Thursday. Late Wednesday, the EUR was little changed at $1.4414 but earlier rose to $1.4446, its highest level sine December.

The British pound climbed to a 9-month high against the Dollar after services and manufacturing reports added to evidence that the recession is easing and Lloyds Banking Group Plc. said provisions for bad loans peaked. The U.K. currency climbed 0.4% to $1.7008, the strongest level since Oct. 21. The Pound also advanced 0.4% vs. the EUR to 84.75 pence.

Next up for currency investors are today’s policy decisions from the BOE and ECB. The European Central Bank (ECB) appears certain to keep its Interest Rate at a record low of 1% as it waits to see the impact of efforts so far to revive the economy and credit flows.

JPY – Yen Falls for First Time in 3 Days

The Japanese yen fell for the first time in 3 days versus the EUR and the Dollar as Asian stocks advanced on speculation Japanese companies will report stronger earnings, reviving demand for higher-yielding assets. The yen weakened to 136.96 per EUR from 136.79 yesterday. Japan’s currency also fell to 95.05 per Dollar from 94.97.

Japan’s currency weakened against 14 of its 16 major counterparts after a Japanese report showed domestic investors bought more foreign equities than they sold for a 7th week, suggesting a return of the carry trade.

However, losses in the Yen may be tempered after U.S. reports yesterday added to doubts the recession in the world’s largest economy is easing, boosting demand for Japan’s currency as a refuge.

Crude Oil – Crude Oil Boosted by Dollar’s Weakness

Crude Oil ended higher Wednesday, reversing earlier losses late in the session, as investors focused on Dollar weakness and shrugged off a government report showing a rise in inventories. Energy markets have been looking to broader economic data for signs of an end to the recession and a potential rebound in Oil demand.

Optimism has helped lift Crude from below $33 a barrel in December, well off record highs near $150 reached in July 2008. Further support has come from a series of output reductions agreed to by the Organization of the Petroleum Exporting Countries (OPEC) last year.

Crude prices were also bolstered by a drop in U.S. distillate inventories and optimism that a slowdown in U.S. private job losses in July could signal a gradual turnaround in the economy. The Dollar weakness has been supportive for Oil prices; and as a result of the USD’s new lows, a further increase in Oil prices above $74 a barrel seems almost inevitable.

Technical News

EUR/USD

This pair’s flat range-trading continues despite technical indicators. With bearish crosses on the hourly and 4-hour MACD, as well as on the daily Slow Stochastic, the impending movement appears to be bearish. Waiting for the downward breach and then jumping in as early as possible may be the best strategy today.

GBP/USD

The price of this pair appears to be floating in the over-bought territory on the daily RSI, indicating downward pressure. The bearish crosses on the hourly and 4-hour MACD, and the daily chart’s Slow Stochastic supports the notion that a downward movement may be imminent. Going short with tight stops may be today’s preferable strategy.

USD/JPY

This pair appears poised for a volatile movement as all indicators point to neutral and the Bollinger Bands on the 4-hour and daily charts are beginning to tighten. The mid-term volatility of this pair will likely hold it inside its current range-trading pattern. As such, buying on lows and selling on highs would be a wise choice today.

USD/CHF

There appears to be fresh bullish crosses on the hourly and 4-hour MACD, and the daily chart’s Slow Stochastic, highlighting an impending bullish movement. Going long could be a sound strategy.

The Wild Card – AUD/USD

The Bollinger Bands on the 4-hour chart appear to be tightening, signaling an impending volatile movement. With the price cascading down from the over-bought territory on the daily chart’s RSI, and a fresh bearish cross on the daily Slow Stochastic, this pair seems poised for a sharp drop in value today. The doji candlestick formation on the daily chart supports this notion. Forex traders should try to not miss out on this great opportunity and begin placing their short positions on this pair as soon as possible.

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. employment data was released today in the form of the ADP National Employment Report and showed that U.S. private employment declined by more than expected in July. The nonfarm private employment fell by 371,000 workers in July following the revised June decline of 463,000 jobs. June’s data was revised downwards from the original release of 473,000 jobs lost.

July’s data was worse than the decline of 350,000 jobs the market forecasts were expecting.  A silver lining in the data was that July had the smallest monthly job decline since October 2008.

The service-providing sector showed the largest decline for the month with a loss of 208,000 jobs while the goods-producing sector fell by 169,000 jobs. The manufacturing sector had a loss of 99,000 jobs while construction jobs fell for the 30th straight month with a decline of 64,000 workers. All size of businesses continued to cut jobs in July as large businesses lost 74,000 jobs, medium sized businesses shed 159,000 jobs and small businesses dropped 138,000 jobs.

The market-moving US Nonfarm Payrolls report for July is to be released Friday at 12:30 pm GMT with market forecasts predicting an approximate decline of 328,000 jobs after June’s 467,000 decrease.

US Dollar gains in forex trading.

The U.S. dollar has been stronger in forex trading today against the other major currencies this morning in the US trading session.  The euro, Swiss franc, Australian dollar, Canadian dollar and New Zealand dollar have all declined versus the American currency while the Japanese yen has increased.

The EUR/USD pair has declined slightly from today’s opening rate of 1.4411 dollars at 00:00GMT to trading to 1.4370 at 10:51 am EST in the morning of the U.S. trading session according to currency data by Oanda.

The GBP/USD is currently almost unchanged from today’s opening level at 1.6946 as this currency pair trades at 1.6944.

The US dollar is falling slightly so far today against the yen as the USD/JPY opened today at 95.09 and has declined to trading at 94.94.

The dollar is increasing today versus the Swiss franc as the USD/CHF has gone from the 1.0594 opening rate to trading at 1.0637.

The dollar has increased today against the Canadian loonie and looking to increase two days in a row. The USD/CAD has advanced to trading around the 1.0746 level today after opening at 1.0725.

The Australian Aussie has fallen versus the US dollar today as the AUD/USD has declined to the 0.8379 level after opening at 0.8441. The New Zealand kiwi has also declined against the dollar as the NZD/USD has reached the 0.6722 level today after opening the day at 0.6734.

AUD/USD Chart – The Australian Dollar falling against the US Dollar this morning in forex trading. The Aussie had been in a distinct uptrend on the hourly chart in the first half of this week.

Source: ForexYard

With a chain of bearish trading sessions, the US Dollar has been bouncing the forex market up and down lately. With increased risk appetite and growing market optimism, market conditions are allowing traders to pull away from the safety of the USD. On the other hand, however, today’s housing, manufacturing and employment data from Britain and the United States will provide enough market news to halt current trends and create short-term reversals, or push current trends even further. If we see negative data across the boards, the USD may very well return to a bullish posture as risk aversion returns.

Economic News

USD – USD Bearish Sentiment Continues Prior to Employment Data

While the aggressive Dollar sell-off which started Monday stalled slightly Tuesday, the USD continues trading near the weakest level against the EUR this year ahead of the release of the Non-Farm Employment Change report, which is predicted to show U.S. companies eliminated fewer jobs in July, reiterating that the recession is coming to an end. The Dollar is trading at 1.4410 per EUR as of this morning, and is at 95.00 Yen, down from the 95.37 Yen seen on Monday.

Investors’ risk appetite persists as the flow of better than expected economic data continues. Tuesday’s release of the Pending Home Sales report showed an increase of 3.6% in June, which was much better than the 0.7% expected by economists. This shows that the housing market, which was at the center of the turmoil, is stabilizing, signaling an impending economic recovery in the U.S.

Looking ahead to today, the release of the ADP Non-Farm Employment Change report at 12:15 GMT, and the ISM Non-Manufacturing PMI at 14:00 GMT, is expected to have great affect on Dollar sentiment; with better than expected results likely intensifying the current bearish trend for the USD.

EUR – Signs of Global Recovery Continue to Boost the EUR

While the EUR lost tiny amounts of its gains since Monday, it still maintains most of its bullish momentum. Tuesday afternoon, the EUR was at $1.4400 from a 2009 high of $1.4445 seen Monday afternoon. The Pound was at $1.6936 from $1.6928.

The rally continued despite stock markets remaining flat throughout most of the day as investors continued seeing strong enough signs of a global recovery and maintained demand for riskier currencies.

Looking ahead to today Britain will dominate the news releases from Europe with the Halifax HPI due to be released at 6:00 GMT and the Manufacturing Production and Services PMI at 8:30 GMT. Better than expected results might be able to push the Pound above $1.7000.

For the EUR, $1.4500 should be the goal, as breaking this level might spur another rally; with no major news releases from the Euro-Zone, the EUR movements will largely depend on news releases from the U.S., Britain, as well as equity markets.

JPY – Yen’s Bearish Sentiment Continues

The Yen received a slight boost Tuesday as a drop in global equities ahead of the New York session spurred demand for the safety of the Japanese currency. However, following a release of better than expected U.S Pending Home Sales data the optimistic mood returned, as did demand for riskier assets.

A late rally in the stock markets further enhanced risk appetite and the sell-off of the JPY. The Yen traded at 137.08 against the EUR and was little changed at 95.22 versus the Dollar.

With the release of several economic indicators today which are expected to show continuous improvement in global economic conditions, the bearish sentiment on the JPY is likely to continue.

Crude Oil – Crude Prices Rise as Stocks Rally for 4th Consecutive Day

Crude Oil for September delivery rose as much as 45 cents, or 0.6%, to $71.87 a barrel following a late rally in U.S stocks after pending sales of existing homes increased more than forecast in June. Oil also benefited from the weak USD as Oil prices tend to have an inverse relationship with Dollar strength.

A drop in the U.S. currency boosts the appeal of commodities as a hedge against inflation. Furthermore, the release of U.S Crude Oil Inventories today at 14:30 GMT is expected to show a decline in Crude stockpiles. Along with this inventories data, oil price movements will continue to depend largely on equity levels since this rally largely depends on equities maintaining their current momentum.

Technical News

EUR/USD

This pair’s continued bullish movement has resulted in a number of mid- and long-term indicators pointing in the direction of a downward correction. With a bearish cross on the daily Slow Stochastic, the 4-hour RSI in the over-bought territory, and the impending bearish cross on the 4-hour MACD, the notion of a downward move indeed seems to be in the making. A good strategy today may be waiting for the downward breach then joining the trend as early as possible.

GBP/USD

There is a fresh bearish cross on the daily Slow Stochastic, signaling a bearish correction may be in the making. The price currently floats in the over-bought territory on the 4-hour RSI, and the 4-hour MACD has a fresh bearish cross as well. Going short might not be a bad choice today.

USD/JPY

This pair appears to be providing mixed signals today. The hourly chart has an impending bullish cross on the Slow Stochastic and the price has just entered the over-sold territory on the hourly RSI. On the other hand, the 4-hour Slow Stochastic shows a bearish cross, signaling an impending downward move. Waiting for a clearer signal may not be a bad move today.

USD/CHF

With bullish crosses on the hourly and 4-hour MACD, and daily Slow Stochastic, this pair shows very clear signs of an impending bullish movement. The 4-hour RSI also shows the price floating in the over-sold territory, supporting the upward notion. Going long appears to be today’s preferable strategy for this pair.

The Wild Card – Gold

A bearish cross has recently occurred on the daily Slow Stochastic for this commodity, highlighting an impending downward movement. The bearish cross on the hourly MACD, and impending bearish cross on the 4-hour MACD both support this notion. Gold and forex traders would be unwise to miss out on an opportunity to capture profits from this volatile commodity. The signs are clear that Gold is anticipating a bearish movement; going short may be a good idea today.

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