InvestMacro FX

By Fast Brokers – The EUR/USD popped slightly yesterday as Tuesday’s positive economic sentiment data carried over into Wednesday’s session.  However, Wednesday’s rise failed to touch 1.40 and the EUR/USD is consolidating around our 3rd tier uptrend line right now.  When viewing the 1-hour, we notice the currency pair continues to register larger volume to the downside than the upside.  Therefore, we believe considerable momentum to the downside remains.  The near-term test will be the ability of the EUR/USD to stay above our 2nd tier downtrend and uptrend lines.  These two trend lines are reaching an inflection point within the next 24-48 hours, highlighting the importance of the moment.

Meanwhile, the S&P futures are drifting lower with a retest of 900 in the making.  Even though the psychological 900 level should prove to be a reliable near-term cushion, a sizeable pullback could be approaching.  Due to the positive correlation between the EUR/USD and U.S. equities, the fact that the S&P’s fundamentals are deteriorating certainly doesn’t bode well for the EUR/USD’s upside, particularly at a T-Junction like now.  If the EUR/USD’s 2nd trend lines don’t hold, we could witness another hefty pullback towards 1.35.  While we have a negative mentality in regards to our near-term outlook for the EUR/USD trend-wise, the uptrend beginning in October 2008 still has quite a few lines of defense to rely upon.  As for the upside, if the EUR/USD can climb above 1.40 we could see a near-term pop towards our 3rd tier downtrend line.

The EU won’t release any more economic data until Friday’s German PPI.  Data from the EU continues to be mixed, yet has come in positively lately, giving the EUR/GBP a bit of a pop.  Investors will be paying more attention to the behavior of U.S. equities over the remainder of the week as they watch the S&P’s reaction to 900 should it be reached.

Present Price: 1.3856

Resistances: 1.3954, 1.4019, 1.4052, 1.4111, 1.4148

Supports: 1.3894, 1.3847, 1.3807, 1.3759, 1.3724

Psychological: 1.40, 1.35

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

The market is set to go increasingly volatile today on the publication of U.S. Unemployment Claims at 12:30 GMT and the Philly Fed Manufacturing Index at 14:00 GMT, and Treasury Secretary Timothy Geithner’s speech at 13:30 GMT . In turn this economic news will help determine the strength of the Dollar versus its major currency pairs going into end of week trading. In order to take advantage of the forex market now, traders are advised to start opening their USD positions now, prior to the release of this crucial data.

Economic News

USD – USD Weakens on Weak U.S. Inflation Data

The Dollar fell for a second day against most major currencies on Wednesday after lower than expected U.S. inflation data reduced speculation the Federal Reserve would raise Interest Rates in the near future. The Dollar was at ¥95.78 Wednesday, down from ¥96.62, and at $1.3955 per EUR. The Dollar was at 1.0793 Swiss Francs, down from 1.0865 Swiss Francs.

Rising equity markets and positive economic data in recent months had led to speculations the U.S recession will end soon, and the Federal Reserve will need to raise Interest Rates by the end of the year. Concerns of rising inflation have also helped fuel these speculations. However, the U.S. Consumer Price Index (CPI) increased only 0.1% in May, falling 1.3% in the past 12 months, the biggest decline in almost 60 years.

Federal Reserve Board officials may be using next week’s policy statement to suppress any speculation of an upcoming Interest Rate increase. This may signal that the underling U.S economy is still weak, resulting in long term downward pressure on the Dollar. Adding to the downward pressure on the currency are concerns over the Dollar’s role as a global reserve currency as the leaders of Brazil, Russia, India and China, known as the BRIC group, called for a “more diversified international monetary system” Wednesday.

With several important economic indicators to be released Thursday, including U.S Unemployment Claims at 12:30 GMT, GBP Retail Sales at 8:30 GMT, and the SNB Monetary Policy Assessment at 7:30 GMT, traders can expect a volatile trading day, and a possible continuation of the Dollar’s downward trend.

EUR – EUR Jumps On Increased Optimism

The EUR strengthened against the Dollar Wednesday after the release of disappointing U.S. data. The EUR closed at $1.3947 from $1.3863, and at ¥133.68 from ¥133.98. The Pound Sterling weakened as much as 1.2% to 85.36 pence per EUR yesterday, the biggest decline since June 4, but was little changed against the USD at $1.6391 from $1.6410 Wednesday.

The Pound’s drop came after a retreat in the stock market and Bank of England (BoE)) Governor Mervyn King’s speech stating that Britain’s banking system may need to raise more capital to finance the economic recovery amidst a unanimous vote by BoE officials to continue their asset purchasing program.

A rise in a number of U.S stocks helped drive the EUR higher versus the Dollar, improving risk appetite in general, and reducing the Dollar’s demand as a safe-haven. A report showing the U.S. current account deficit narrowed in the first quarter added to optimism in the currency market.

Traders should pay attention to the release of the U.S Unemployment Claims at 12:30 GMT, GBP Retail Sales at 8:30 GMT, and the SNB Monetary Policy Assessment at 7:30 GMT, as the results will determine the direction of the EUR, GBP and CHF for the newt few days.

Yen – Yen Rises Against the USD

The Japanese currency rose against the USD Wednesday, benefiting from its safe- haven status as Standard & Poor’s (S&P) downgraded or lowered its outlook on almost two dozen U.S banks. The Dollar was at 95.78 Yen yesterday, down from 96.62 Yen. This came one day after S&P said European banks face higher credit losses, a statement that also resulted in gains for the JPY.

As the economic outlook is still positive overall, the Yen fell against most other major currencies since the Yen is often used as a funding currency for higher yielding assets. A report showed that Japanese investors have purchased more oversees assets than they sold also added to the downward pressure on the Yen.

Crude Oil – Crude Oil Rises on Improved Demand

Crude Oil for July delivery rose 48 cents to end trading at $71.51 a barrel on Wednesday. In a volatile trading day, Crude closed higher after a mixed Energy Department report showed a bigger than expected drop in Crude supplies, and an increase in gasoline demand along with higher than expected rise in inventories. Signs of improving Oil demand offset the negative side of the report. Options expiration also played a role in the rally as July options expired Wednesday.

Crude’s rally over the past several months was supported by a weakening Dollar, and fears of inflation that pushed investors to buy commodities as a hedge. However, concerns of inflation in the near future subsided as the U.S. CPI (Consumer Price Index) increased by only 0.1%. As Crude inventories remain at very high levels, and the USD is showing signs of stability, another rally for Oil may be unlikely in the short-term.

Technical News

EUR/USD

The pair has been experiencing increased bullishness in the past 2 days. The 4-hour chart’s MACD and the daily chart’s RSI supporting a signal that the pair may be in for another bullish trading day. It may be a wise move for traders to enter the trend now.

GBP/USD

The pair has maintained its bullish momentum in the past several weeks and has been range trading between the 1.6200 and the 1.6620 levels in the past several days. The daily chart’s RSI supports another bullish move for the pair today. However, the hourly chart’s RSI and weekly chart’s Stochastic Slow support a Bearish move. Entering the pair when the signals are clearer may be a wise choice today.

USD/JPY

The USD/JPY pair has experienced much bearishness in the past few days. However, it seems that this bearish behavior may be running out of steam, as the pair stands at the 95.75 level. The 4-hour chart’s RSI and Slow Stochastic support a bullish reversal anytime soon. Entering the possible bullish reversal early on could turn out to pay off in today’s trading.

USD/CHF

The USD/CHF pair has been pushed up recently, reversing the bearish trend that the pair experienced previously. The MACD, RSI, and Stochastic Slow of the hourly and daily charts support a further bullish move for the USD/CHF pair. Going long with tight stops may turn out to be a wise choice today.

The Wild Card – Gold

Prior to this week, Gold went through a bearish run for the previous 2 weeks. However, Gold is now on for a 3 day winning streak, as the commodity benefits from the volatile forex market. The daily chart’s RSI and Slow Stochastic signal that there is plenty of steam ahead for Gold’s bullish run to continue, as we reach end of week trading. Entering the popular trend now may not be a bad choice at all.

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 gained significant ground-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3985 level and was supported around the $1.3805 level.  Several factors contributed to the dollar’s demise today. First, May headline consumer price inflation was up 0.1% m/m and off 1.3% y/y with the ex-food and energy component up +0.1% m/m and +0.8% y/y.  The headline year-over-year decline was the sharpest in some 60 years.  Second, it was reported the Federal Reserve may try to manage interest rate expectations with a more direct message when Federal Open Market Committee policymakers convene next week.  Fed officials are undoubtedly uncomfortable with the recent rise in interest rates across the Treasury curve and may try to craft the message that expectations of a rate hike to withdraw some monetary stimuli are premature.  Some economists believe the Fed may even adopt a similar tactic that Bank of Canada recently employed in suggested rates are unlikely to move higher before late 2010.  Third, other data released in the U.S. today saw the current account deficit decline to –US$ 101.5 billion in the January – March quarter, down from –US$ 154.9 billion in Q4 2008, but still above economists’ expectations.  In eurozone news, European Union finance officials will convene tomorrow and Friday to discuss stronger supervision of European financial markets.  Data released in the eurozone today saw the April EMU-16 global trade balance print at €2.7 billion, up from March’s surplus of €1.8 billion.   Euro bids are cited around the US$ 1.3435 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥95.50 level and was capped around the ¥96.75 level.  The Japanese government upgraded its overall economic assessment of the economy for the second consecutive month in June, reporting that exports and industrial production are improving.  Notably, the government did not report the economy is “worsening” for the first time since December.  Bank of Japan also raised its assessment of the economy, reporting the economy has “begun to stop worsening.”  Finance minister Yosano said the BoJ and government “share the exact same view on economic conditions” and added the “January – March period was clearly the bottom” for the current economic cycle.  The government, however, noted capital expenditures and housing starts are “decreasing at a fast pace” and said the employment situation is “severe and worsening rapidly.” Data released in Japan overnight saw revised May machine tool orders off 79.2%.  The Nikkei 225 stock index climbed 0.90% to close at ¥9,840.85.  U.S. dollar offers are cited around the ¥104.15 level.  The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥134.60 level and was supported around the ¥132.35 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥155.60 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥89.25 level. In Chinese news, the U.S. dollar strengthened vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8360 in the over-the-counter market, up from CNY 6.8330.

₤

The British pound lost ground vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.6220 level and was capped around the $1.6480 level.  North American dealers lifted cable from intraday lows.  Data released in the U.K. today saw May jobless claims rise 39,300 while the claimant count rate of unemployment printed at 7.2%.  Sterling was dented during European dealing after a report from Bank of England suggested further sterling strength would “reduce the boost to net trade arising from (sterling’s) depreciation since summer 2007.”  On the other hand, BoE added sterling’s recent appreciation “may reflect the unwinding of some excess pessimism” about the U.K.  Traders await comments from Chancellor of the Exchequer Darling at his annual Mansion House speech later in the session.  BoE Governor King was quoted today as saying the U.K. banking system is too large, as are some U.K. banks.  He also reported “There are certainly grounds for believing that the rapid falls in activity are coming to an end. But there are some equally solid reasons for believing that the path to full recovery could be protracted.”  Cable bids are cited around the US$ 1.6110 level.  The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.8535 level and was supported around the ₤0.8425 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 declined for the ninth straight month in May. The Leading Indicator Index, which measures future economic activity, fell by 0.1 percent in May following a revised decline of 0.9 percent in February. The May decline was the smallest of the last nine months and the 0.8 percent change from April marked the biggest turnaround for a month since December 1965.  May’s data, despite the decrease, was better than expected as market forecasts were calling for a 0.6 percent decline.

Contributing heavily to the overall index decline was a decrease in new orders for durable goods which fell by 11.6 percent. Shipments fell by 0.03 percent for the month while furniture & appliance sales declined by 1.0 percent and other durable goods sales slumped by 0.6 percent.  On the positive side, the stock market index rose by 3.2 percent, the housing index increased by 1.0 percent and the money supply increased by 0.8 percent.

Also out of Canada today, Statistics Canada reported that wholesale prices fell by 0.6 percent in April following a revised decline of 0.4 percent in March.  The data slightly beat forecasts expecting a 0.5 percent decline.

Canadian dollar mostly lower in currency trading.

The Canadian dollar has been mostly lower today in the currency markets against the major currencies.  The U.S. dollar is trading virtually unchanged at time of writing against the Canadian loonie as the USD/CAD opened trading today at 1.1313 at 00:00GMT and trades at 1.1307 at 3:04pm EST in the US session according to currency data from Oanda. The USD/CAD reached an intraday high of 1.1449 before retreating lower.

The euro has gained against the loonie as the EUR/CAD trades at the 1.5781 level after opening the day at 1.5683 and reached an intraday high of 1.5861.  The loonie has fallen versus the Japanese yen today as the CAD/JPY has edged down to the 84.66 yen per loonie level after opening at 85.41.

The British pound is trading virtually unchanged versus the loonie today as the GBP/CAD trades at 1.8565 level after opening the day at 1.8567.

The Australian dollar is higher against the loonie as the AUD/CAD pair trades at 0.8995 from today’s opening rate of 0.8963 while the New Zealand dollar has also gained against the CAD as the NZD/CAD trades at 0.7179 from 0.7130 earlier today.

EUR/CAD Chart – The EUR/CAD advancing higher today in currency trading and touched its highest exchange rate in roughly a month(4H Chart).

By Adam Hewison – With the S&P 500 falling to a fresh two-week low, the big question is this a correction, or the start of a major trend on the downside?

I have just finished a short video that details many of the key concerns that we have for this market. If you have not seen our videos before you may enjoy this one. This video does not require a plug-in.

The video is free to watch and there is no need to register. I would love to get your feedback about this video on our blog.

See the New Video here….

All the best,

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

Source: ForexYard

As the USD shows unclear signals about where it is heading, and the EUR appears to be following the lead of the greenback, the market’s primary currencies seem to be confusing the bulk of forex traders. On the other hand, the British Pound has shown strong signs of life and Britain is scheduled to release significant economic data today which may cause the GBP to be the main subject of today’s trading.

Economic News

USD – USD Erratic from Mixed Signals

The USD dropped against most of its major currency rivals yesterday, pressured by Russian angling for a new global reserve currency. By yesterday’s close, the USD fell against the EUR, pushing the oft-traded currency pair to 1.3835. The Dollar experienced similar behavior against the GBP and closed at 1.6402.

Concerns that the pace of economic recovery may be more tepid than initially thought forced a retreat in a broad equity advance in the United States. While U.S. housing starts in May rebounded and producer prices rose less than expected, suggesting inflation pressures were muted. But not all investors were convinced that the economy is on a path to recovery, and global stocks turned lower as the strong rise in U.S. housing starts was outweighed by a slide in industrial production.

Looking ahead to today, the most important economic indicator scheduled to be released from the U.S. is the Core CPI at 12:30 GMT. Analysts are forecasting this figure to increase from its previous reading. Traders will be paying close attention to today’s announcement as a stronger than expected result may boost the USD in the short-term. Traders are also advised to follow Federal Reserve Chairman Ben Bernanke’s speech at 13:00 GMT. This speech is very important as it is very likely to impact the Dollar’s volatility. This may set the pace for the Dollar going into the rest of the week.

EUR – EUR Rises on Positive Economic Data

The EUR experienced a bullish day of trading yesterday against the USD, mainly due to the German ZEW economic expectation figure. The ZEW indicator jumped to 44.8 in June from 31.1 in May. This suggests that analysts and investors were not as grim about the economy as before. In other words, the improvement in this consumer sentiment signals that the worries about a further aggravation of the economic recession may be limited by the end of the year. The reading is now firmly in positive territory, which indicates that optimists far outnumber pessimists.

Since the release of this important figure earlier yesterday the EUR has climbed against the USD, and continued during today’s trading session and closed at 1.3835, as trader confidence returned back to the EUR. A strong EUR may continue in the coming days if the European economy continues to release better-than-expected economic figures. If this does occur, the confidence of investors may continue to return back to the EUR in the short-term.

Looking ahead to today, the Euro-Zone and Britain are set to publish a number of important data releases. These include the British Claimant Count Change at 8:30 GMT and the Euro-Zone Trade Balance at 9:00 GMT. These figures are likely to determine the GBP and EUR’s strength going into end-of-week trading. Forex traders are also advised to closely follow the speech coming from U.S. Fed Chairman Ben Bernanke, as the forex market is likely to be very volatile while he speaks.

JPY – Yen Experiences Mixed Results against Major Currencies

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 133.50 level. The JPY also saw bullishness against the USD and closed at 96.50.

The Yen rose and stocks slumped the most in more than two months on concern a global recovery may be delayed. While the Bank of Japan (BOJ) said earlier that the nation’s worst post-war recession is easing, BOJ Governor Shirakawa said that the economy is improving because of three temporary factors: replacement of stockpiles at home and abroad, global fiscal stimulus measures, and improving confidence. It’s unclear whether a recovery in demand will take hold.

Crude Oil – Crude Oil Prices Stable near $70

Oil fell during yesterday’s trading session and closed around $70.60; giving back early gains as worries about the ailing world economy persist.

Oil prices have risen steadily during the past two months, going above $70 a barrel and causing concern that high energy costs could slow the economic recovery from recession. Slowing production has contributed to the price increase, but weakness in the U.S. dollar may be the main cause.

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

Technical News

EUR/USD

This pair has been range-trading between 1.4150 and 1.3750 for the past few days and doesn’t seem to have much clear direction. After a short upward movement, the Slow Stochastic on the hourly chart is signaling an impending bearish cross which means the range-trading is set to continue. Buying on lows and selling on highs might be a good choice today.

GBP/USD

This pair shows no clear indication of direction for the moment. Nevertheless, there is one signal which does appear clearly. The Bollinger Bands on the hourly chart are beginning to tighten and the MACD on all charts is near 0, indicating a volatile movement is impending. When the price jump occurs, entering positions to ride the wave will be a wise choice.

USD/JPY

The volatility this pair has seen recently has created a number of contradictory signals. The hourly chart shows a bearish cross on the Slow Stochastic, indicating a downward movement may be coming. Contrary to this is the bullish cross on the 4-hour chart, signaling an impending upward movement. Waiting for a clear signal might be wise today.

USD/CHF

The consolidation trend in this pair, which began with the low price near 1.0600, has started to reach its threshold. The latest downward movement will likely be followed by a quick correction before making a significant price jump. The short term oscillators point upward, signaling the impending correction. Forex traders can benefit greatly by calling the direction of the breach and riding the wave which is sure to follow.

The Wild Card – CAD/CHF

This pair has been trading very flat these past few weeks, but has now begun to show signs of life. The MACD on the hourly and 4-hour chart shows clear bullish crosses, signaling an impending bullish move. The daily chart also has a bullish cross on the Slow Stochastic, which supports this notion. Forex traders can join this upcoming trend by entering early buy positions and riding the upcoming spike for profits this 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.

• The chart below is the weekly Crude Oil chart by ForexYard.

• The technical indicators used are the Bollinger Bands, Stochastic and RSI.

• There is a “doji” candlestick formed in the chart, indicating that a reversal should take place.

• The trend has reached the Bollinger Bands’ upper border, which may hint that the uptrend has reached its conclusion.

• A bearish cross on the Stochastic suggests that bearish activity might be imminent.

• The RSI has switched directions and is now facing down, however a much stronger signal will be given once it drops bellows the 70 line.

• It currently seems that a bearish move might be on its way, yet a red candlestick is required in order to assure the notion. Forex traders are welcomed to follow Crude Oil’s daily chart and look for the potential drop.

By GCI Fx Research

€

The euro gained moderate ground-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3930 level and was supported around the $1.3750 level.  European Central Bank policymaker Mersch reported the eurozone economy is likely to return to positive economic growth “sometime in the middle of” 2010.  ECB member Weber said “more (monetary) measures are not needed” at this time and added liquidity measures are continuing to improve.  ECB member Draghi said it is too soon for policymakers to unwind their massive stimuli but added policymakers should be crafting their “exit strategies” now. Similarly, ECB member Ordonez reported a failure to absorb liquidity could “put the global economy at the end of a depressive spiral of grave consequences.”  Data released in the eurozone today saw the annual EMU-16 inflation rate decline to a record low of 0% in May while the monthly increase slowed to +0.1% from +0.4% in April.  It was also reported that EMU-16 Q1 labour costs were up 3.7% y/y, down from a record 4.0% pace in Q4 2009 while the German June ZEW economic expectations index improved to 44.8 from 31.1 in May.  Other big news in the eurozone today saw the ECB confirm the eurozone’s largest banks are facing additional write-downs of US$ 283 billion by the end of 2010.  In U.S. news, data released in the saw May housing starts climb 17.2% m/m to an annualized 532,000 rate while May building permits were up 7.5% m/m, their third consecutive increase.  These data suggest the U.S. housing market remains on the mend but with massive inventories of unsold homes still on the market and rising mortgage interest rates, the upside in the sector is limited.  In contrast to the rosy housing data, May industrial production was off 1.1% m/m with capacity utilization lower at 68.3%.  The American Bankers Association today reported the economic recession should abate in the third quarter.  Additional data saw May producer price inflation climb 0.2% m/m, less than the 0.6% print that economists expected, and down 5% y/y.  Core PPI was off 0.1% m/m, the first decline since October 2005.     Euro bids are cited around the US$ 1.3435 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥96.05 level and was capped around the ¥97.90 level.  Finance minister Yosano verbally intervened to support the U.S. dollar today, indicating “My thinking about the US economy or the world standard currency – the dollar – or my firm confidence in them, isn’t shaken at all.”  Yosano intimated Tokyo has no plans to sell the U.S. dollar.  Bank of Japan’s Policy Board meeting ended with little fanfare.  The central bank kept its overnight call rate target unchanged at 0.10%.  The Nikkei 225 stock index lost 1.74% to close at ¥10,039.67.  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 ¥132.70 level and was capped around the ¥135.35 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥156.45 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥88.10 level. In Chinese news, the U.S. dollar weakened vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8330 in the over-the-counter market, down from CNY 6.8353.

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.

– Below is the hourly chart for the USD/JPY.

– The indicators used are the Slow Stochastic and RSI.

– Point 1: The Slow Stochastic indicates an impending bullish cross, which may signal an upward movement is going to occur in the near future.

– Point 2: RSI signals that the price of this pair currently floats in the over-sold territory, indicating upward pressure.

– The volatile downward movement which occurred prior to this upward correction has generated these indicators, and there appears to be room for this correction to continue.

Since the opening of the U.S. market the Dollar has declined against most of its currency pairs. This was initiated by the publication of mixed results for U.S. economic indicators. For example positive housing starts and negative PPI data from the U.S. led to uncertainty in the forex market, as these figures showed mixed signs of recovery for the American economy. This also led U.S. stocks to fall for a second day in a row, as banks from Morgan Stanley to Goldman Sachs revealed today that they believe that the U.S. stock market rally has come to an end.

Retail and commodity shares were amongst the main losers today, as uncertainty took its foothold into the stock market. These combined factors led the USD to go bearish throughout Tuesday’s trading. The Dollar is currently trading lower against the GBP by nearly 200 pips at 1.6438. It is also trading lower against EUR and JPY, as traders feel that the U.S. currency is an unstable bet for today.

As the U.S. market comes to a close, the USD may continue to weaken further, as forex traders feel that the USD is a risky bet for today. As a result, fears about the Dollar’s instability has led Oil to rise over 60 cents. If today’s trend continues, then the USD may be in for a bumpy week as a sell-off of the Dollar may hit full-force. If this does occur, then we may see the EUR/USD hit the 1.3950 level by the end of the week.