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By Fast Brokers – The USD/JPY is rising back towards our 3rd tier downtrend line after the weaker than expected showing from Japan’s Core Machinery Orders.  Though the CMO is normally volatile, today’s report was not the solid improvement in capital expenditure investors were hoping for.  As a result, the Dollar is experiencing a little strength against the Yen.  However, today’s rise of the USD/JPY is not eye-popping since our 3rd tier downtrend line and May highs are still intact with volume subsiding.  Therefore, even though the USD/JPY has made a few hints towards an uptrend, we still haven’t witnessed a clarifying move to the upside.  Meanwhile, investors are waiting upon the release of Japan’s Final GDP later today.  If the GDP data is weaker than expected, we may see some more strength in the Dollar due to the outperformance of America’s economy as compared to Japan’s.  We maintain our negative outlook on the USD/JPY trend-wise until we see a game-changing move to the upside.

Fundamentally, we maintain our resistances of 97.98, 98.66, 99.49, 100.06, and 100.74.  To the downside, we hold our supports of 97.45, 96.90, 96.33, 95.82, and 95.20.  The 100 level serves as a key psychological barrier with 95 acting as a psychological cushion.  The USD/JPY is currently exchanging at 97.90.

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

Many analysts yesterday had anticipated a slight decline in the price of Crude Oil considering the recent strength in the USD brought on by last week’s employment data. However, oil prices surprised many traders today as the price continued to climb above $70 a barrel to hit a 7-month high! As Geithner’s speech demonstrated a renewed push for economic recovery, and potential plans to raise interest rates in the US, there isn’t very stable ground around the common safe-haven investments. Traders should expect more volatility today.

Economic News

USD – USD Strength Not Likely to Return this Week

The U.S. Dollar weakened during yesterday’s trading session, correcting the sharp gains against the EUR and GBP seen earlier this week. This occurred as investors questioned whether the economy had improved enough to justify talk of higher U.S. interest rates by year end. By yesterday’s close, the USD fell sharply against the EUR, pushing the oft-traded currency pair to 1.4060. The dollar experienced similar behavior against the GBP and closed at 1.6310.

The dollar, which fell sharply in May, rallied late last week after data showed U.S. employers cut fewer than expected jobs last month, but that move fizzled yesterday as analysts warned the U.S. economy still faced a rising jobless rate.

There was a quiet day of news from the U.S. as there were no major economic data releases on the calendar yesterday. However, U.S Treasury Secretary Geithner spoke about the state of the U.S. economy. He pointed out specifically that Barack Obama will unveil a new model for regulation of financial institutions next week which might affect the dollar. Overall, investors remained wary of making big bets in favor of the dollar these days, especially as they re-thought the chances of a Fed rate increase later this year.

Looking ahead to today, there are several important news releases coming out of the U.S. These include the Trade Balance and Crude Oil inventories at 12.30 GMT and 14:30 GMT, respectively. Better-than-expected results may help the Dollar recover some of yesterday’s losses against some of its crosses such as the EUR and GBP. On the other hand, if the results turn out to be lower than forecast, then the Dollar may record a fairly bearish session in today’s trading. 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 these releases.

EUR – EUR Rises on Weaker Greenback

The EUR finished yesterday’s trading session with mixed results versus the major currencies. The 16-nation currency extended gains versus the U.S. Dollar on Tuesday, to trade above $1.41 amid a broad sell-off in the greenback. The EUR experienced similar behavior against the JPY as the pair rose from 135.96 to 137.12 by days end. The EUR did see bearishness as well as it lost over 60 pips against the GPB and closed at 0.8620.

A leading indicator released yesterday was the German Industrial Production report. Germany holds the largest and strongest economy in the Euro-Zone, and thus the relevant publications from this economy usually have a hefty impact over the EUR. As a result, Germany’s economy may be slow to recover from a record contraction in the first quarter as companies trim jobs and the global slump curbs foreign sales.

German exports fell more than economists expected in April and European Central Bank (ECB) Governing Council member Erkki Liikannen said yesterday that there is no quick recovery in sight for the world economy. Germany, a leading global exporter, has been mauled by bearish global demand in the past year, and notoriously thrifty German consumers have done little to compensate by hitting the stores.

Looking ahead to today, the most important economic indicator scheduled to be released from the Euro-Zone is the French Industrial Production at 6:45 GMT. Analysts are forecasting this figure to slightly increase from its previous reading. 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 Manufacturing Production figures coming out of Britain at 8:30 GMT, and the Trade Balance figures coming out of the U.S. at 12:30 GMT as these results may set the EUR’s main currency crosses for the day.

JPY – Yen Looks to Global Economic Recovery

The Japanese Yen completed yesterday’s trading session with mixed results versus the major currencies. The JPY fell against the EUR yesterday, pushing the oft-traded currency pair to 137.12. The JPY experienced similar behavior against the GBP as the pair closed at 158.70 by day’s end. The Japanese Yen did see some bullishness as well as it gained over 100 pips against the USD to close at 97.20.

Japan’s deepest recession is easing now, as Japan’s exports have received a boost from public spending in China and other countries, while Prime Minister Taro Aso’s record stimulus spending on tax incentives and cash handouts helped consumer sentiment advance to a 10-month high in April. Even as overseas demand shows signs of stabilizing, exports and factory output have fallen by more than a third since the global financial crisis deepened in September, putting pressure on companies to cut jobs and investments.

Crude Oil – Oil Prices Hit 7-Month High!

Crude Oil prices rose for a second day on increasing optimism that the world economy is emerging from recession and fuel consumption begins to recover. Crude Oil ended above $70 a barrel for the first time in seven months yesterday as the dollar weakened and traders positioned themselves ahead of the crude oil inventory data which will start to be rolled out later in the day.

Oil prices have more than doubled since February, rising with equities on signs of a rebound in the economy and expectations of fuel demand will follow higher. As a result, a release of a string of positive economic figures could help continue its bullishness. Therefore, traders are advised now to make some profits as the price of Crude Oil is set to remain volatile in the short-medium term.
Technical News

EUR/USD

It appears that the pair has resumed its bullish activity, as it’s testing the 1.4100 level. Currently, a bullish cross on the daily chart’s Slow Stochastic is suggesting that the uptrend could go farther. Going long might be the preferable choice today.

GBP/USD

After completing a 500 pips bullish move, it seems that the cable has reached a very strong resistant level placed around 1.6350. However, the MACD on the 4-hour chart continues to deliver bullish signals, and if the resistant level will be breached, a sharp upward movement could take place.

USD/JPY

After failing to breach the 99.00 level, the pair has lost its bullish momentum and is currently traded around the 97.50 level. The daily chart’s RSI has dropped below the 70 line, signing that the bearish move might be extended. Going short could be the right choice today.

USD/CHF

There is a very accurate bearish channel formed on the daily chart, as the pair is now floating in its upper section. In addition, a bearish cross on the 4-hour chart’s MACD suggests that the bearish momentum has more steam in it, with the potential of reaching the 1.0600 level.

The Wild Card – Gold

After 3 days of relatively peaceful trading, it appears that today could signal new volatility in gold trading. As a bullish cross is taking place on both the 4-hour chart’s MACD and the daily chart’s Slow Stochastic, it seems that a bullish move is imminent. This might be a great opportunity for forex traders to enter the trend at a very early stage.

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

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The euro moved sharply higher vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4100 figure and was supported around the $1.3850 level.  The big story in the markets today was a decision by the U.S. Treasury that allows several U.S. banks to repay funds they borrowed under the Troubled Asset Relief Program that was inaugurated last year.  Ten banks will be permitted to repay tens of billions of borrowed funds and try to return to some semblance of normalcy.  The Federal Reserve has reportedly for now shelved a plan that would have potentially allowed it to issue its own debt to help absorb some inflationary pressures and drain liquidity.  New York Federal Reserve Bank President Dudley recently said the power to issue debt would be “nice to have, but not critical.” Data released in the U.S. today saw April wholesale inventories off 1.4%.  In eurozone news, European Central Bank member Noyer said it is premature to determine if the ECB’s unconventional monetary policy measures enacted to stabilize the financial markets have been an overall success, but noted they “have contributed to a significant reduction in various credit risk premia.” Data released in Germany today saw April industrial production fall 1.9% m/m, worse-than-expected.  These data suggest the eurozone’s largest economy is a laggard as far as the gradual, nascent economic recovery on the Continent is concerned. Euro bids are cited around the US$ 1.3435 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥97.25 level and was capped around the ¥98.55 level.  Bank of Japan reported that paying 0.1% interest on excessive reserves held by financial institutions may distort the proper functioning of the market.  The central bank’s overnight call rate currently stands at 0.10% and the central bank wants to make sure banks are incentivized to not horde liquidity.  Data released in Japan overnight saw the April leading index improve dramatically to 55.0 from 25.0 in March while the composite index improved to 76.5 from 75.5 in March.  The Nikkei 225 stock index lost 0.80% to close at ¥9,786.82.  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 ¥137.35 level and was supported around the ¥135.70 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥159.15 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥90.45 level. In Chinese news, the U.S. dollar weakened vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8344 in the over-the-counter market, down from CNY 6.8363.

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 Fast Brokers – The USD/JPY is turning south from our 3rd tier downtrend line as we notice a Dollar appreciation across the board today.  We haven’t seen any abnormal volume to the upside on the 1-day chart, leading us to believe that the USD/JPY may remain in its steady downtrend.  It would take an aggressive movement to the upside past May highs and our downtrend lines on substantial volume for us to alter our negative outlook on the currency pair.  On the other hand, we do notice some near-term downward pressure on both the GBP/USD and EUR/USD.  If the USD/JPY keeps its new negative correlation with these currency pairs and they weaken from further levels, the USD/JPY could make a push for 100.  However, the correlations between the USD/JPY and these currency pairs are fragile because they exhibited a positive correlation since last September.  It will be very interesting to see how the USD/JPY behaves over the next few trading sessions, and whether the currency pair can piece together some upward momentum.

Meanwhile, investors will keep a close watch on the Core Machinery Orders release from Japan later today.  Core Machinery Orders are forward looking since the purchase of heavy machinery normally indicates an expected increase in production, telling us a lot about Japanese exports and consequently global demand and consumption.  Core Machinery Orders have climbed back to respectable levels since January’s shocking negative number.  Analysts expect an increase of 0.1%, and the release is likely to be a market mover.

Fundamentally, we find resistances of 97.98, 98.66, 99.49, 100.06, and 100.74.  To the downside, we see supports of 97.45, 96.90, 96.33, 95.82, and 95.20.  The 100 level serves as a key psychological barrier with 95 acting as a psychological cushion.  The USD/JPY is currently exchanging at 97.60.

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 Cable has propelled from our 3rd tier uptrend line to make a solid run past the psychological 1.60 level.  While the performance of the GBP/USD over the last 24 hours has been encouraging, the upward movement came with relatively weak volume as compared to last week’s pullback.  Regardless, bulls are coming to the defense of the Cable, and the currency pair could make a pop toward our 2nd tier downtrend line.  As with the EUR/USD, the significant volume to the downside was disconcerting and makes us contemplate whether we have entered a new, near-term downtrend.  U.S. equities and crude futures are on an impressive run, and there is belief that these investment vehicles may have overextended themselves.

Since economic data will be relatively quiet around the globe this week, the Cable may ultimately choose to abide by its positive correlation with the S&P futures.  However, Britain will release Manufacturing Production and its Trade Balance tomorrow, which may prove to be market movers.  If the economic data comes in weaker than anticipated and U.S. equities experience profit taking, we would not be surprised to see the Cable exhibit further downward pressure.  That being said, we maintain our near-term negative outlook on the GBP/USD unless we see a strong move to the upside accompanied by convincing volume.  On the other hand, the climb back above 1.60 is certainly encouraging, and we wouldn’t be surprised to witness more upward momentum today.

Meanwhile, the Pound continues to show relative strength, exemplified by the negative performance of the EUR/GBP.  This is likely due to the fact that EU and U.S. economic data has been coming in mixed over the past six weeks, while numbers from Britain have been overwhelmingly positive.  Therefore, we believe pure economic fundamentals are giving the Pound its edge.  Furthermore, as a result of the improvement in economic data, we believe the medium-term still has a lot of strength despite any near-term downward pressure.

Fundamentally, we find resistances of 1.6233, 1.6315, 1.6371, 1.6412, and 1.6458.  To the downside, we see supports of 1.5863, 1.5777, 1.5703, 1.5629, and 1.5552.  The 1.60 level acts as a psychological cushion with 1.65 serving as a psychological barrier.  The GBP/USD is currently exchanging at 1.6222.

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 continues its balancing act from our 2nd tier uptrend line, and is making a push for the psychological 1.40 level.  Despite the recovery from 5/28 lows, volume is declining with the upward movement, signaling a lack of support to the upside.  The largest volume we’ve seen in the last month was on the sell side.  Therefore, we aren’t convinced that Monday’s bottom will be lasting.  The key barriers to the upside for the near-term are 1.40, our 3rd tier uptrend line and 1.4035 resistance.  If the EUR/USD can climb past these obstacles, we could see a near-term pop towards 1.41.  However, the downward pressure on the EUR/USD seems to be greater than the near-term upward momentum, meaning we could see further losses from present levels.  To the downside, our 2nd tier uptrend line and 5/28 lows are the important lines of defense.  If these floors are broken we could see near-term losses accelerate.  Though we maintain our negative outlook on the EUR/USD for the near-term, the medium-term uptrend has an incredible foundation built up over the year.  With all of the economic data coming in signaling a global recovery, it will take a hefty blow to destroy the uptrend in place.

The EUR/GBP is buckling under the pressure of its downtrend, indicating a relative weakness in the Euro.  The weakness results from a disappointing German Industrial Production number this morning.  While the lackluster data point is negative, the development is nothing to be overly concerned about at this time.  The question becomes whether the slowdown in industrial production is just a bump in the road to recovery, or if the data slumps back into its downtrend.  We won’t get a better idea until next month’s release, yet investors should take note nonetheless.  With the EU relatively quiet data-wise this week, the EUR/USD may take its lead from U.S. equities.  Therefore, if we see a breakout in the S&P futures to the upside, the EUR/USD could follow suit due to their positive correlation.  Meanwhile, investors should keep a close eye on volume patters in the EUR/USD to see whether there is more interest to the downside.

Fundamentally, we find resistances of 1.4003, 1.4035, 1.4090, 1.4103, 1.4139, and 1.4185.  To the downside, we see supports of 1.3945, 1.3891, 1.33855, 1.3815, and 1.3766.  The 1.40 area serves as a psychological resistance with 1.35 acting as a psychological cushion.  The EUR/USD is currently exchanging at 1.3986.

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 – Gold continues its recovery from our 2nd tier uptrend line and the psychological $950/oz level as it rises with the depreciation of the greenback.  Volume is perking up slightly, a positive sign technically.  However, volume is still weak as compared to last week’s pullback, meaning we could be in store for more downward pressure once the present bounce tops out.  The precious metal is encountering our 3rd tier uptrend line and $963.45/oz resistance.  If gold can climb past these barriers, we could witness a near-term pop towards our 2nd tier downtrend line.

Meanwhile, investors should keep an eye on the behavior of the GBP/USD, EUR/USD, and S&P futures.  Gold’s positive correlation with both the GBP/USD and EUR/USD seems intact, while these currency pairs may follow U.S. equities this week due to the relatively light presence of economic data.  Even though today’s pop is encouraging, we maintain our negative near-term outlook on gold due to the recent, overwhelming volume to the downside.  If the precious metal does experience more downward pressure, our 2nd tier uptrend line and 5/26 lows should prove to be key defenses against accelerated movements to the downside.

Fundamentally we find resistances of $960.47/oz, $963.45/oz, $965.98/oz, $968.77/oz, and $972.32/oz.  To the downside, we see supports of $957.11/oz, $954.32/oz, $951.79/oz, $946.47/oz, and $943.68/oz. Gold is currently trading at $959.90/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.

From www.bloomberg.com today, June 9

“The Wall Street firms that trade directly with the Federal Reserve say speculators betting that interest rates may head higher this year are wrong.

Policy makers will keep the target for overnight loans between banks in a range of zero to 0.25 percent this year, according a survey of 15 of the 16 primary dealers of U.S. government securities that trade with the central bank. A majority predict no increase until at least the second half of 2010. Cantor Fitzgerald & Co. officials weren�t able to immediately provide a forecast.

Yields on two-year Treasury notes surged 44.4 basis points June 5 and 8, the biggest two-day increase since Sept. 18 and 19, and Fed funds futures contracts show a 58 percent probability of a rate increase by November on signs that the economy is bottoming. Implied yields on eurodollar futures, also used to speculate on changes in central bank policy, increased even as the U.S. government said on June 5 that the unemployment rate rose to 9.4 percent, the highest since 1984.”

____________________________________________

We find this news article quite interesting. Essentially it seems that the biggest dealing desks are at odds with the market participants. So will the “smart money” dealing desks, with their connections to the US Fed, and their quantitative pricing models be correct, or will the markets view win out? Remember that markets are affected by George Soros’ theory of reflexivity, which poses that markets are effected by participants’ actions, thereby effecting the market’s fundamentals.

In this case the “house” (bond dealers) and the “players” market participants are at odds. We will be watching the yield on the 10 year US Treasury Note as it closes in on 4% to see where the line in the sand is drawn by the dealers.

The interest to currency traders is that as longer term interest rates have moved higher, the short term rates controlled by the US Fed stay low. This creates a steepening of the yield curve that implies inflation in the future. That change in the steepness of the yield curve is what has hurt the USD over the last two months. Inflation will erode the value of the USD.

So keep an eye on the yield curve to see if as the yield on 10 year Treasuries closes in on 4%, the market and the US Fed start to raise the short term rates which would lessen the steepness of the yiueld curve. This would be bullish for the USD.

Stay Nimble!

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

Source: ForexYard

After gathering some positive momentum at the end of last week from US employment data, the US Dollar now faces a new ordeal. As the US Supreme Court attempts to block the sale of Chrysler to Fiat, recently gained confidence in the US economy has begun to show signs of wear. Forex traders may see added volatility to a market that was forecast yesterday to be flat. News events such as this tend to push markets in a way which traders can greatly benefit. Today is a great day to trade the USD!

Economic News

USD – Chrysler Sale Delay Weighs in on Dollar

The Dollar moved on a number of factors in yesterday’s trading. One of the most important of these was the sale of Chrysler being blocked by U.S. Supreme Court. President Obama fears that this could kill the deal if the issue is not resolved in the nearest time. If this did happen, the effects on the U.S. economy may be disastrous. In turn, the Dollar may plummet as people could lose confidence in the American economy. In the meantime, forex traders are also trading on other issues, such as Obama’s plan for economic recovery.

The Dollar rose against most of its major currency pairs yesterday, as Obama unveiled his plan to create new jobs, and tackle rising unemployment. The EUR/USD finished Monday’s trading lower by nearly 100 pips at the 1.3886 level. The USD also rose about 80 pips against the CHF to close at the 1.0934 level. However, the USD lost ground against the British Pound, as optimism returned to Britain, after the opposition Conservative party faired well in the European elections. The GBP/USD cross finished higher at 1.6024.

Today, U.S. Treasury Secretary Timothy Geithner is set to be asked about the TARP (Troubled Asset Relief Program) repayments and forecasts for U.S. economic recovery in a Senate hearing at around 14:30 GMT. It would be a wise move for forex traders to open up their USD positions both prior to and after this major news event, as the market is set to be very volatile throughout today’s trading.

EUR – German Industrial Orders Data Pushes Down EUR

Optimism spread through the Euro-Zone following the release of the German Industrial Orders Data. Even though the results were in line with forecasts, this showed the first major sign of stabilization in the Euro-Zone economy. Additionally, March’s figures were revised from 3.3% to a significantly improved 3.7%. However, this led to investors to go short on the EUR in some cases, as traders decided to take risks. Furthermore, many of these traders returned to other currencies, such as the USD and GBP.

Other factors also helped push down the EUR against the major currencies yesterday. These include optimism returning to the British Pound, as the British Conservative Party fared well in the European parliamentary elections and recent reports showed British housing market stabilization. This sparked hope that PM Gordon Brown’s unpopular government will soon collapse.

The EUR/GBP rate tumbled by 85 pips to close at the 0.8660 rate. This alone was owed to great optimism from Germany’s economy. The EUR/USD pair finished Monday’s trading lower by nearly 100 pips at the 1.3886 level. The EUR/JPY finished lower by 120 pips at 136.51, reversing recent gains for this pair.

There are several factors that are likely to dominate EUR trading later today. Firstly, the Euro-Zone’s reaction to recent statements by the IMF (International Monetary Fund) to fix the banking system in the 16-nation region. Secondly, the release of the publication of the results of the German Industrial Production indicator at 10:00 GMT. Thirdly, U.S. Treasury Secretary Timothy Geithner’s speech at 14:30 GMT.

JPY – Yen Extends Gains against US Dollar

The Yen extended its gains against the Dollar yesterday, as optimistic results from Japan’s M2 Money Stock and Economy Watchers Sentiment indicators led to a relatively strong JPY against most of its major currency crosses in yesterday’s trading. The USD/JPY finished lower by 20 pips at 98.27. The EUR/JPY cross finished lower by 120 pips at 136.51. However, the JPY lost over 50 pips against the GBP to close at 157.44.

Looking ahead to today, the forex market is set to be very volatile, as the whole developed economies look to U.S. Treasury Secretary Timothy Geithner’s speech at 14:30 GMT. In late trading today, the Yen is also likely to be affected by the release of the Japanese Core Machinery Orders data at 11:50 PM GMT. Forex traders are advised to open their JPY positions now, as the markets are set for a volatile trading day.

Crude Oil – Crude Gains 1% on Krugman Remarks

Yesterday, Crude Oil gained 1% or 56 cents to close at $68.46. This was following remarks made by the Nobel Prize Winning economist Paul Krugman. He stated that the U.S. recession could end later this year. As a result, this signaled higher energy demand. This could be a ripe possibility as developed countries are continuously showing improved economist results each week.

The price of Crude may hit $70 a barrel in trading later today, if signs from the U.S. and global economy are positive. At the forefront of this will be U.S. Treasury Secretary Timothy Geithner’s speech at 14:30 GMT. Additionally, traders are advised to follow statements by U.S. and European leaders, as they could add to volatility in the market.

Technical News

EUR/USD

It appears that the bearish trend may have run out of strength as the current price level has dropped the pair into the over-sold territory according to the 4-hour chart’s RSI. The pair also currently floats near the lower border of the hourly chart’s Slow Stochastic suggesting a bullish correction may be imminent. In that case, going long with tight stops may be the correct strategy

GBP/USD

After the recent bearish trend, the Cable has consolidated around the 1.6070 level. However, bullish momentum on the hourly chart’s Slow Stochastic suggests that the resumption of general upward mobility is imminent. A bullish cross on the hourly chart’s Slow Stochastic also indicates that the upwards move is impending. Going long might be the right choice today.

USD/JPY

The sharp bearish move that took place during the past couple of days seems to have more room to run. The RSI on the daily chart is crossed above the 50 line, suggesting that the pair may fall further. The bearish move on the daily’s Slow Stochastic also supports this notion. Next target could be 97.75.

USD/CHF

The daily chart shows that the pair has been range-trading this week. However, a bearish cross on the 1-hour chart’s Slow Stochastic suggests that a bearish move is imminent. Going short with tight stops appears to be preferable.

The Wild Card – Oil

The bullish move which was initiated this week seems to be galloping at full speed. As of this morning, all oscillators are indicating the continuation of the bullish momentum. This might be a great opportunity for forex traders to join a very promising corrective trend.

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 Adam Hewison

A conundrum wrapped in an enigma… that’s the S&P 500 index.

I was just looking at the S&P 500 index as we come to a close for the week of June 6th. While the market appears to be higher for week, it also appears that we’re losing momentum on the upside.

This can be seen in the second attempt to close over the 950 level. Also some of our momentum indicators are showing negative divergences. This means that while the S&P 500 is making new highs for the move, the momentum indicators are not showing the same configuration and making new highs. This can often be the first clue of a potential market correction.

In this short video on the S&P 500, you’ll will see exactly what I’m looking at and why.

See the New Video here…

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

All the best,

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