InvestMacro FX

By CountingPips.com

U.S. producer prices increased for a second straight month in May according to a report released today by the U.S. Labor Department. Producer prices or wholesale inflation increased by 0.2 percent in May following a 0.3 percent increase in April and a 1.2 percent decline in March. On an annual basis, producer prices have decreased by 5.0 percent from May 2008 following April’s annual 3.7 percent decline. Contributing to the price increase was a rise in energy prices by 2.9 percent in May after energy had decreased in both April and March.

Economic forecasts for the monthly producer price numbers were expecting a 0.6 percent increase and a 4.4 percent decrease on an annual basis. Core prices, excluding volatile energy and food costs, increased by 0.1 percent in May and registered a year-over-year increase of 3.0 percent.

Housing Starts, Building Permits rise.

U.S. Housing Starts and Building Permits increased in the month of May according to data released by the Commerce Department on new residential construction. Housing Starts grew by 17.2 percent in May to a seasonally adjusted annual rate of 532,000, an increase from April’s 454,000 estimated housing starts. May’s total on an annual basis, despite the monthly increase, is down 45.2 percent compared with May of 2008.

Building permits statistics, used as a predictor of future construction, showed a seasonally adjusted annual rate of 518,000 permits in May which is an increase of 4.0 percent compared to April. On an annual basis, May’s total is 47.0 percent below the level of May 2008.

Housing Completions for May decreased when compared to April with an annual rate of 811,000 privately-owned housing completions. This is a decrease of 3.3 percent from April and May’s annual rate is 28.8 percent below the May 2008 level.

Forex Market – US Dollar falling in Forex today.

The U.S. dollar has been falling lower in forex trading today after gaining yesterday. The dollar has fallen versus the euro, pound, franc, aussie, kiwi, loonie and the yen.

The euro has advanced versus the dollar today as the EUR/USD has risen from today’s 1.3799 opening(00:00 GMT) to trading at approximately 1.3843 in the afternoon of the US trading session at 1:42pm EST according to currency data by Oanda.

The British pound has increased today versus the American currency as the GBP/USD has gone from the 1.6246 opening to trading at 1.6421 dollars per pound.

The dollar has declined against the Japanese yen as the USD/JPY trades at 96.37 after its 96.64 opening exchange rate. The dollar has fallen against the Canadian loonie dollar after opening at 1.1350 earlier today to trading later at 1.1332.

The USD has declined against the Swiss franc after the USD/CHF’s opening at 1.0914 to trading at the 1.0874 exchange rate.

The Australian dollar has advanced as the AUD/USD has gone from 0.7900 to trading at 0.7971 while the New Zealand dollar (NZD/USD) has climbed from 0.6272 usd per nzd to trading at 0.6332.

By Adam Hewison

In my new short video I will show you some of the key elements and levels that I think should come in and support the gold market. The video is quite short, but it will lead you step by step into the detailed analysis of this not so precious metal.

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

By Fast Brokers – The EUR/USD broke below our neckline yesterday, logging the selloff we anticipated.  Yesterday’s move came on large volume, continuing the theme of considerable activity to the downside.  So far this month we’ve seen rising volume to the downside on 6/4, 6/5, 6/10, and now 6/15.  The heightened interest on the sell-side could indicate there is more room to go to the south.  In addition to snapping the neckline, the EUR/USD closed beneath 5/28 lows, another negative technical indicator.  While we could see an immediate-term recovery towards our 2nd tier downtrend line and uptrend lines, we likely won’t witness any sizeable, game-changing gains.  The S&P futures also made a key technical pullback yesterday.  Due to their positive correlation, the movement of the S&P further supports our negative outlook on the EUR/USD.   It appears as if the next stop for the EUR/USD could be our 1st tier uptrend line and/or the 1.36 area.  This would likely serve as the next point of consolidation should the currency pair decided to stabilize and turn around.  As for the upside, the EUR/USD would need to fight back above our 2nd tier uptrend line and the psychological 1.40 level on large volume for us to alter our near-term outlook.

Meanwhile, the Euro continues to experience relative weakness across the board, emphasized by the deterioration of both the EUR/GBP and EUR/JPY.  The weakness results from the comparatively spotty data from the EU during the recovery process.  Additionally, investors could be showing the ECB has acted insufficiently in regards to their monetary policy in reaction to the economic crisis.  Flight to the Dollar could continue as investors try to diversify and decrease their overall risk exposure.  However, we do maintain our positive outlook for the medium-term.

The medium-term downtrend line formed through 12/18 lows, or our 1st tier downtrend line, is still far out of reach.  As long as 1.35 in the EUR/USD and the 900 area in the S&P are intact, the currency pair is in pretty good shape technically for the longer-term.  On the other hand, we have yet to see if the pullback we’re witnessing is healthy, or a reversal into the medium-term downtrend.  Ultimately, the fate of the Dollar relies upon the outcome of the current economic stabilization taking place.  If we are not witnessing a true recovery, then the Dollar would likely appreciate heavily once again.  However, we would need to witness a large, broad-based contraction in economic data globally.  Therefore, we maintain our negative near-term outlook and positive medium-term outlook on the EUR/USD trend-wise.

The EU will release key economic sentiment data along with its CPI number.  The U.S. and Britain will release important economic data points of their own, so we expect another session of high volatility.

Present Price: 1.3856

Resistances: 1.3895, 1.3954, 1.4019, 1.4052, 1.4111

Supports: 1.3847, 1.3807, 1.3759, 1.3724, 1.3682.

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.

By Fast Brokers – The Cable pulled back on large volume yesterday as the Dollar appreciated across the board.  However, the GBP/USD’s losses were not technically significant as with the EUR/USD due to Britain’s relative strength economically.  The Cable now appears to be following our 2nd tier downtrend line while trading comfortably above the psychological 1.60 level.  Additionally, the GBP/USD is well above June lows whereas the EUR/USD closed beneath their respective June lows yesterday.  The relative strength of the Pound is further exemplified by the overall outperformance of the GBP/JPY and underperformance of the EUR/GBP.  Investors are rewarding the Pound for Britain’s strong showing in economic data while it seems that the BOE has taken the more appropriate measures to fight the crisis as compared to the Fed and ECB.  Investors will get a better sense of how the British economy is faring in less than an hour upon the release of the nation’s year-over-year CPI and RPI data.  Additionally, investors will digest important pricing data from both the EU and U.S.  If the numbers signify deflation, we could witness further near-term strength in the Dollar.

Despite the relative outperformance of the Pound, the Cable is still facing some considerable downward pressure due to the currency pair’s positive correlation with U.S. equities.  The S&P futures are indicating there may be further room to go to the downside.  Investors are concerned that international governments will not continue to support America’s expanding burden of debt.  Furthermore, U.S. equities may be overvalued due to their impressive run in the first half of 2009.  The challenge for the Cable to the upside is presented in the form of our 2nd and 3rd tier downtrend lines.  While we could see a bounce today in the face of oversold conditions, the Cable may be forced to participate in the near-term downtrend we’ve forecasted in the EUR/USD, USD/JPY, and S&P futures.  Ultimately, as with other major Dollar pairs, the medium-term fate of the GBP/USD relies upon the ability of the global economy to follow through on its path to recovery.  Any broad-scale pull back in the global economy, or a retraction into the problems we saw in 2008 would likely kick the Cable back into its medium-term downtrend.  However, we have no reason to suspect this and the medium-term uptrend line remains intact.

Meanwhile, our 3rd tier uptrend line is playing an important role as far as support is concerned.  If our 3rd tier doesn’t hold, we could witness a sharp near-term contraction towards our 2nd tier uptrend line and the psychological 1.60 level.  The rising volume yesterday to the downside is certainly a cause for concern and could be foreboding of an oncoming pullback.  As for the upside, the Cable will need to get above our 2nd and 3rd tier uptrend lines to have a chance at overcoming previous June highs.  We maintain our negative outlook for the short-term in the GBP/USD trend-wise due to the negative pressures in the global market place.

Present Price: 1.6335

Resistances: 1.6371, 1.6412, 1.6498, 1.6574, 1.6620

Supports: 1.6315, 1.6263, 1.6210, 1.6141, 1.6080

Psychological: 1.65, 1.60

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 selling off from our 3rd tier downtrend line after the currency pair failed to climb past previous June highs.  Encouragingly, the pullback comes on declining volume while lacking the conviction to the downside like that of the EUR/USD.  We are not surprised by the USD/JPY’s current weakness, and the tango between the near-term uptrend and medium-term downtrend lives to see another day.  While the USD/JPY has made three consecutive declining highs with multiple downtrend lines bearing down on price, the currency still has two strong uptrend lines to fall back on.  Hence, even though the power of the downtrend outweighs that of the uptrend, there is little evidence showing another collapse in the USD/JPY is imminent.  We could continue to see the currency pair trade within the range of our 1st tier uptrend line and 5th tier downtrend line as they slowly approach their respective inflection points.

Meanwhile, any further systemic weakness in the global economy should have a corresponding impact on the appreciation of the Dollar.  The USD/JPY is reacting to yesterday’s data showing that central banks are slowing their purchases of U.S. paper.  Therefore, we suspect the USD/JPY will exhibit a positive correlation with U.S. equities for the foreseeable futures since the fate of the Dollar relies upon the ability of the global economy to stabilize and recover from here.  Further deterioration of the global economy could increase the likelihood of the world powers opting to replace the U.S. Dollar as the global standard for monetary pegs and transactions.

Altogether, we maintain our negative outlook trend-wise on the USD/JPY due to the precedence and strength of the downtrend.  The currency pair has fallen below our 3rd tier uptrend line again.  Keep an eye on our 2nd tier uptrend line.  If this support doesn’t, hold we could see the pullback pick up speed.  The USD/JPY is currently fighting to stay above April lows, and it is certainly plausible for the currency pair to hop back above our 3rd tier uptrend line should U.S. equities recover.

Present Price: 96.46

Resistances: 96.90, 97.45, 97.58, 98.66, 99.49.

Supports: 96.33, 95.82, 95.20, 94.45, 93.76

Psychological: 95, 100

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 USD and JPY regained their status as safe-haven currencies after the release of worse than forecasted economic data from the Empire State Manufacturing Index and TIC Long-Term Purchases reports and a subsequent return to risk aversion. The two currencies gained against most of their major currency pairs amidst a volatile trading day. Today’s trading is expected to be volatile as well with major news releases from the U.S and Euro-Zone including the U.S Building Permits and the PPI releases at 12:30 GMT, the German ZEW Economic Sentiment at 9:00 GMT and Britain’s CPI at 8:30 GMT.

Economic News

USD – Empire State Manufacturing Index Release Boosts Dollar

The Dollar was boosted yesterday by the publication of the Empire State Manufacturing Index and TIC Long-Term Purchases. The results were worse-than-forecasted, helping the Dollar climb against virtually all of its major currency pairs in yesterday’s trading, as the USD’s safe-haven status returned to the forefront. The Dollar was also boosted by a number of other factors, such as Russian Finance Minister Alexei Kudrin stating that the USD will be the world’s reserve currency for some time. The poor economic figures from the U.S. also led to a tumbling U.S. and global stock market, further favoring the USD.

The USD rose by over 150 pips vs. the EUR to close at the 1.3793 level. This came about as the European Central Bank (ECB) warned that banks in the Euro-Zone may face up to $300 billion of further losses by the end of 2010. The USD rose about 80 pips against the GBP yesterday to close at 1.6275. This was considerably moderate as Britain is on her way to quicker-than-expected economic recovery. Against the JPY, the Dollar actually fell 130 pips to 96.99. This dramatic movement is owed to the Yen returning as the number 1 safe-haven currency amidst Monday’s market volatility.

Looking ahead to today, the market is likely to be volatile, as it still continues to move on yesterday’s economic news. As the U.S. market opens, several important publications will be released simultaneously at 12:30 GMT. The most important of these being the publication of Building Permits and the PPI (Producer Price Index) releases. Forex traders are advised to follow information surrounding President Obama’s economic recovery plan, as this tends to help increase market volatility. Therefore, directly impacting the Dollar and its major currency crosses.

EUR – European Central Bank Warning Hits the EUR

Shock waves hit the global markets yesterday as the European Central Bank (ECB) revealed that it expects losses of Euro-Zone banks to reach $283 billion by the end of next year. This was one of the main factors that led to a bearish EUR throughout yesterday’s trading. Additionally, weak U.S. data led traders to ditch the EUR for the safe-haven USD. Additionally, German Chancellor Angela Merkel received criticism yesterday due to Germany’s tight fiscal policy. Opponents in Germany point out that she should be more flexible, and follow her British and American counterparts.

The EUR plummeted by over 150 pips vs. the USD to close at 1.3793. The news from the U.S. also helped global stock markets plummet, further helping push down the EUR/USD exchange rate. The EUR/GBP rate finished lower on Monday by 30 pips at the 0.8487 level. This marks further bearishness in the pair as the British economy has faired far better than the troublesome Euro-Zone economy in recent months. Against the JPY, the EUR tumbled a massive 350 pips to close at 133.85. This comes about as the economic uncertainty led the JPY’s safe-haven status to become dominant again.

Today, there are plenty of economic data releases that are likely to greatly affect EUR trading. Amongst these are the German ZEW Economic Sentiment at 9:00 GMT, and the publication of Britain’s CPI (Consumer Price Index) at 8:30 GMT. It is also advisable to follow statements coming out of the European Central Bank throughout the day. In addition, it is advisable to pay attention to the economic news from the US., as the EUR/USD rate will be greatly affected upon the release of this data.

JPY – JPY Safe-Haven Status Returns to the Forefront

The JPY climbed against its major currency pairs yesterday, as its safe-haven status returned to the forefront. This was in response to the release of worse-than-forecast U.S. Empire State Manufacturing Index results, and Japanese and global stock markets falling yesterday. Thus risks for the financial system led to a cut in risk appetite, resulting in traders selling-off stocks, commodities, and bonds, and buying-up safe-haven currencies, such as the JPY and USD.

The JPY climbed against the Dollar by about 130 pips to close at 96.99. The JPY rose to a 2-week high against the EUR, to finish higher by a massive 350 pips at the 133.85 level. The GBP/JPY rate fell by nearly 400 pips, marking a correction to the pairs several week bullish run. The Yen’s behavior yesterday reminds investors that you can never underestimate the Yen. The JPY is set to move today on the release of data from the U.S. and Europe.

Crude Oil – Crude Oil Slumps on Release of Poor U.S. Data

The price of Crude Oil slumped by over 50 cents a barrel yesterday, to finish trading at $70.78 a barrel. This was due to several important factors, initiated by the release of poor U.S. economic data upon the opening of the U.S. market. As a result, the U.S. and global stock markets tumbled dramatically, leading to the sell-off of commodities such as Crude. The black gold was unable to recover thereafter.

In today’s trading, all eyes will be looking to economic events coming out of the US. and Europe. However, the release of U.S. data is likely to have a higher impact on Crude Oil. It’s a wise choice for traders to start opening-up their positions in Crude Oil prior to market volatility kicking-in as the trading day kicks in.

Technical News

EUR/USD

After yesterday’s downward movement, the price of this pair appears to be floating in the over-sold territory on the RSI of the 4-hour chart, signaling that there is still room for an upward correction. The recent bullish cross on the 4-hour chart’s Slow Stochastic supports this notion. Going long to ride out the remainder of the bullish correction may be a wise choice today.

GBP/USD

The price of this pair has been range-trading within a bearish channel since last week and has yet to create a significant breach. Yesterday’s upward movement has put the price near the upper border of its current channel, however. If the price succeeds in breaching through, forex traders may see a strong bullish movement. If it fails to breach, the movement will correct downwards within its current channel. Traders may want to wait to see if the breach occurs before setting positions today.

USD/JPY

This pair has seen a drastic downward movement over the last 24 hours which has pushed the price into the over-sold territory on the RSI of the hourly and 4-hour charts and generated bullish crosses on the Slow Stochastic on these charts as well. However, the price has just broken through a significant support level and the next target level is near 95.45. Going short with tight stops might be preferable today.

USD/CHF

After forming a clear double-top, or M formation on the hourly chart, this pair is responding typically by dropping in price directly afterwards. The downward movement appears to have room to run considering there is a fresh bearish cross on the 4-hour chart’s Slow Stochastic and the price currently floats in the over-bought territory on the RSI as well. Going short may be a wise choice today.

The Wild Card – USD/DKK

There appears to be a volatile breach of the upper border on the 4-hour chart’s Bollinger Bands, signaling downward pressure. The price also sits in the over-bought territory on the 4-hour chart’s RSI. With a fresh bearish cross on the 4-hour chart’s Slow Stochastic, the downward movement appears to be confirmed. Forex traders can profit from this predictable downward movement by entering short positions early, and at a great entry price.

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 Danielle Franklin

Rejection of something that doesn’t fit the social routine is a common behavior among us. People don’t like what they don’t understand. Even worse, we generally tend to be afraid of the unknown. How do people react to forex trading profession? Do you tell others that you trade for a living or you prefer to hide behind more “accepted” professional labels? Does your partner understand your trading career or they classify you as crazy and in need of a “proper” job?

Forex trading is often misunderstood, threaded as a joke career or quickly dismissed as gambling; therefore many traders don’t even bother telling others that they trade. Besides ignorance, there is of course the jealously towards achievement, therefore in most cases it is better not to admit your forex trading success to others, unless you want to be proclaimed as a lazy idiot that cannot hold a normal job.

Some traders explain forex with combination of unobjectionable careers such as computers and accountancy. Forex trading is a proper profession – it is demands time, instincts, business mind, management, planning and strategy building. However, since online forex trading is relatively new concept of making a living, the major portion of society is still quite unaware of forex as a career.

Pretending to have another profession in this case has little to do with being ashamed of it. Some people compare trading to brain surgery in terms of skill and focus – definitely not a career to be ashamed of! When you make a living with forex trading and the market brings you constant profits, the true self-confidence should be enough to dodge disapproving glances of the judgmental by passers.

The part played by a partner is extremely important, and their cooperation is crucial. I guess, I am very lucky to have a very understanding partner who supports and appreciates the difficulty of forex trading. After all, there are sacrifices made from both sides of the relationship. It is important for trader’s success to be around people who don’t poison the air with envious and sarcastic remark regarding what you consider an essential part of who you are.

Unless they are forex traders, nobody truly understands what you are going through. Even people who are dealing with stock market one way or another believe that the market is random. In my experience, it is better off not discussing forex with the outside world! Instead, mention something about taxes and accounting – boring professions are respected but rarely talked about!

If you choose, however, to uncover your true identity as a forex trader, at least make a rule to others that you will not give any market predictions or tips. Also, once you are successful, it is important not to show off. It makes people extremely envious. Keep it as simple as possible – others don’t need to know about the millions in your bank account!

Sometimes when people hear that you are a forex trader they might accuse you of being lazy, unsociable and arrogant. Responses such as “you should be doing something more positive”, or “don’t you feel the need to contribute to the society”, “How much did you earn a month”, “That sounds so boring, I could never do that” or “aren’t you lonely? Don’t you need people around you?” are not uncommon. I personally put all the rude responses down to jealousy, ignorance and intimidation by the technical definition of forex trading. Sorry, but I don’t do “normal”! I am different and proud of it (my earnings speak for themselves).

Others might have an impression that you are a gambler – not too uncommon, but it does invoke unpleasant reactions from those who think you should share the secret of easy-money making! The truth is that 95% of traders (and I am talking about the unsuccessful forex luck-seekers, who do not deserve the title “trader” in the first place) are gambling! Therefore it is not unreasonable to expect from others to think that you belong to the unfortunate group! I have to admit that quite a number of people have dismissed me as a gambler, but I don’t really care. I pity the slaves of the employment system. Better to be a gambler than a slave, don’t you agree?!

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By GCI Fx Research

€

The euro moved sharply lowervis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3755 level and was capped around the $1.4000 figure.  A difficult day for U.S. equities didn’t help the common currency’s cause and traders also reacted to the Group of Eight finance ministers meeting in Italy over the weekend.  Data released in the U.S. today saw the New York Fed’s Empire manufacturing index decline to -9.41 in June from -4.55 in May, evidencing weak new orders and shipments sub-indices.  Other data released in the U.S. today saw April net long-term TICS flows decline to US$ 11.2 billion, suggesting the U.S. did not import enough capital that month to finance its massive trade deficit.  The US$ 11.2 billion print was down from the revised March figure of US$ 55.4 billion and significantly below the estimate of US$ 60.0 billion.  Total net TIC flows in April came in at –US$ 53.2 billion, a dramatic swing from the US$ 25.0 billion revised print from March.  Other data released today saw the June NAHB housing market index print a weaker-than-expected 15.   In eurozone news, data released today confirmed that the number of people working in the eurozone declined by 1.2% in the first quarter of 2009, the largest decline since at least 1995 and the third consecutive quarterly decline in which employment fell.  G8 finance ministers convened this weekend in Italy to discuss how they’ll unwind their massive emergency spending stimuli and bank rescue fundings from the global economy.  Treasury Secretary Geithner indicated the danger has not yet subsided from the global economy and is not advocating that spending be curtailed. German finance minister Steinbrueck said he “does not share the excitement” about the recent appreciation in the price of crude oil and the euro’s exchange rate.   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 ¥97.80 level and was capped around the ¥98.55 level.  Bank of Japan’s Policy Board convened overnight to deliberate policy and is expected to keep its main overnight call rate target unchanged at 0.10%.  The yen was up significantly across the board as risk aversion returned to the markets, directing U.S. equities prices lower out of the box.  BoJ’s interest rate decision is expected overnight and BoJ’s monthly report will be released on Wednesday.  The Nikkei 225 stock index lost 0.95% 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 ¥134.90 level and was capped around the ¥137.80 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥159.35 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥89.45 level. In Chinese news, the U.S. dollar rallied vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8353 in the over-the-counter market, up from CNY 6.8323.

₤

The British pound moved lower vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.6240 level and was capped around the $1.6440 level.  Traders continue to monitor the tense political situation involving Prime Minister Brown and the expenses scandal.  Cable bids are cited around the US$ 1.6215 level.  The euro vis-à-vis the British pound as the single currency tested bids around the ₤0.8445 level and was capped around the ₤0.8530 level.

CHF

The Swiss franc came off vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.0950 level and was supported around the CHF 1.0780 level.  Data released in Switzerland today saw May producer price inflation decline 0.3% m/m.  U.S. dollar offers are cited around the CHF 1.1165 level.  The euro moved lower vis-à-vis the Swiss franc as the single currency tested bids around the CHF 1.5055 level while the British pound gained ground vis-à-vis the Swiss franc and tested offers around the CHF 1.0950 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

Eurozone employment declined by the most on record in the first quarter of 2009 according to a report by Eurostat today. The 16-nation eurozone saw employment fall by 0.8 percent or 1.22 million workers in the first quarter after a revised 0.4 percent decline in the fourth quarter of 2008.  The quarterly decline was the largest decline since records began for the eurozone in 1995.  On an annual basis, eurozone employment decreased by 1.2 percent from the first quarter of 2008 following a revised annual decrease of 0.1 percent in the fourth quarter.

Contributing to the first quarter decline were job losses in Spain by 3.1 percent, Greece by 1.8 percent, Slovakia by 1.9 percent and Portugal by 1.2 percent.  Slovenia saw jobs decline by 1.2 percent while the eurozone’s largest economy, Germany, had an employment decline of 0.3 percent.  France, the eurozone’s second largest economy, also saw jobs decline by 0.4 percent in the first quarter. On an annual basis, Spain registered the largest employment fall in the EU16 with a 6.4 percent decrease while Malta registered a 1.8 percent employment increase on an annual basis.

Forex Trading – US Dollar, Japanese Yen gain on risk aversion.

The U.S. dollar and Japanese Yen have been higher in forex trading today against the major currencies on risk aversion. The yen has gained versus the euro, pound, franc, aussie, kiwi, loonie and the US dollar while the US dollar has gained versus all the preceding except for the yen.

The euro has fallen versus the dollar today as the EUR/USD has declined from today’s 1.3956 opening at 00:00 GMT to trading at approximately 1.3786 in the afternoon of the US trading session at 2:36pm EST according to currency data by Oanda. The euro (EUR/JPY) has declined against the yen to trading at 134.61 after opening at 137.20.

The British pound has decreased today versus the American currency as the GBP/USD has fallen from the 1.6386 opening to trading at 1.6291 dollars per pound. The GBP/JPY has dropped from 161.10 to trading at 159.14.

The dollar has fallen against the Japanese yen as the USD/JPY has declined from its 98.31 opening to trading at 97.62 yen per usd.

The dollar has advanced higher against the Canadian loonie dollar after the USD/CAD opening at 1.1227 earlier today to trading later at 1.1323. The CAD/JPY has declined from 87.56 to trading at 86.21.

The USD is gaining against the Swiss franc after opening at 1.0820 to trading at the 1.0921 exchange rate while the franc (CHF/JPY) has fallen against the yen from 90.86 to 89.37.

The Australian dollar has declined versus the USD as the AUD/USD has gone from 0.8080 to trading at 0.7930 while the New Zealand dollar has also fallen against the dollar from 0.6376 usd per nzd to trading at 0.6301.

Against the yen, the aussie (AUD/JPY) has decreased from 79.43 to trading at 77.41 and the kiwi (NZD/JPY) has declined from 62.69 to 61.51.

AUD/JPY Chart – The Australian Dollar falling sharply today against the Japanese Yen into oversold territory on the Relative Strength Indicator in Forex Trading (1H Chart).

Last week we posted three comments on specific moves in the currency markets, and one commentary regarding US Treasury Yields.

Our posting from June 8 that the next large move in GBP/JPY would be lower has yet to work out. We thought then that the technicals of the pair were leaning towards a gentle roll-over and cause the pair to give up a few big figures. But GBP/JPY has held on and even rallied up to the 162.00 level. So far today the pair has fallen hard. We still think that the fundamentals will bring this pair significantly lower in coming weeks; and we continue to search for technical indicators to confirm our beliefs.

US 10 year Treasury yields have in fact dropped as we mentioned. This has been closely tied to the USD strength and the tunr lower by the major commodities. Please visit our blog posting from June 9 to review our analysis (http://www.backbayfx.com/blog.php)

Canadian Dollar. Our call to watch for a falling Canadian Dollar (best expressed through a long EUR/CAD position) worked out well last week. We noted that the fundamentals and technicals were lining up for a drop in CAD and when the Bank of Canada gave his speech on June 11, EUR/CAD powered higher as we expected. The move went as much as 250 pips in the money, and is presently still 200 pips higher than our trade entry levels.

Our Friday posting that EUR/USD was breaking through support levels was spot on and we are presently trading at the next levels of support as we expected (www.backbayfx.com/blog.php). We continue to watch for the next leg lower in EUR/USD but would not chase this move with a market order at these levels. We will look for a pullback to slightly higher levels before initiating another short positon.

Stay Nimble!

Stephen Leahy
Back Bay FX Services, LLC
www.backbayfx.com