InvestMacro FX

By GCI Fx Research

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The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4110 level and was capped around the US$ 1.4335 level.  Profit-taking ensued following several days of U.S. dollar selling pressure that stemmed from growing concern the U.S.’s fiscal deficits are expanding too rapidly.  Federal Reserve Chairman Bernanke testified and said “Maintaining the confidence of the financial markets requires that we, as a nation, begin planning now for the restoration of fiscal balance…Unless we demonstrate a strong commitment to fiscal sustainability in the longer run, we will have neither financial stability nor healthy economic growth… Certainly, our economy and financial markets face extraordinary near-term challenges, and strong and timely actions to respond to those challenges are necessary and appropriate.”  Kansas City Fed President Hoenig was on the tape late in the day saying “If we fail to bring policy into balance, we will have significant inflationary pressure.”  U.S. Treasury yields have backed up significantly in recent weeks, possibly signifying the market’s pessimism over the perilous state of U.S. finances.  Data released in the U.S. today saw May ADP private-sector employment off 532,000, worse than April’s 491,000 decline.  Also, the May U.S. ISM non-manufacturing index was up nominally to 44.0 from 43.7 in April.  Additionally, April new factory orders were up 0.7% m/m and off 22.8% y/y with the ex-transportation component up 0.1% m/m and off 22.1% y/y.  In eurozone news, the European Commission is working on a proposal to allocate €19 billion to create new jobs.  EMU-16 producer prices declined for their ninth consecutive month in April, off 1.0% m/m and 4.6% y/y.  Moreover, EMU-16 GDP was unrevised at -2.5% q/q in Q1.  Euro bids are cited around the US$ 1.3435 level.

¥/ CNY

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥96.40 level and was supported around the ¥95.35 level.  Bank of Japan Policy Board member Kamezaki indicated there’s a greater chance the Japanese economy will perform worse-than-expected instead of better-than-expected.  Still, Kamekazi reported the loose monetary conditions could result in the economy overheating.  BoJ officials will likely keep monetary policy unchanged for the foreseeable future.  Finance minister Yosano yesterday reported the economy likely hit bottom in Q1 and Kamekazi today warned Japan’s consumer price index could decline even more sharply in the summer, possibly as much as 2%.  The Nikkei 225 stock index climbed 0.38% to close at ¥9,741.66.  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 ¥135.30 level and was capped around the ¥138.00 figure.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥155.70 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥89.15 level. In Chinese news, the U.S. dollar strengthened vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8299 in the over-the-counter market, up from CNY 6.8298.

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

Oanda, a popular forex broker, has added trailing stop losses to its trading platform this week.  Oanda is a popular forex broker for its no minimum deposit feature and continuous interest rate calculation method. Trailing stop losses have been a much requested feature by users of the Oanda FxTrade platform and has finally been implemented as a trading feature.

Some Trailing Stop Loss Resources:

A short tutorial on using Oanda’s trailing stops can be found here at About.com.

More on using trailing stop losses can be seen here at World Currency Watch.

The Australian economy grew in the first quarter of 2009 after decreasing for the first time in eight years in the fourth quarter of 2008 according to a release today by the Australian Bureau of Statistics. The GDP report showed that the Gross Domestic Product increased by 0.4 percent in the January to March quarter after declining by a revised 0.6 percent in the October to December 2008 quarter and averted a technical recession of two straight quarterly declines in GDP. The fourth quarter GDP was the lowest quarterly reading since the December of 2000 quarter when the GDP contracted by 0.8 percent. On an annual basis, the GDP also grew by 0.4 percent over the first quarter of 2008 following a revised annual growth rate of 0.8 percent in the fourth quarter.

Economic forecasts had expected that the GDP growth would fall by 0.2 percent for the first quarter and decline by 0.4 percent on an annual basis.

Contributing positively to the GDP increase for the quarter was an increase in exports by 0.6 percent while household consumption expenditure increased by 0.3 percent. Excluding the farming sector, the GDP increased by 0.5 percent for the first quarter.

Today’s GDP release comes a day after the Reserve Bank of Australia decided to hold its interest rate steady at 3.00 percent for the second consecutive month. The RBA had shaved off 4.25 percentage points from the official cash rate since September 2008 to help fight a slowing Australian economy amid the global economic slowdown.

By Fast Brokers

The EUR/USD hit solid resistance in the 1.43 area yesterday as we anticipated, and has pulled back below 1.4222 resistance.  Today’s retreat is accompanied by declining volume, indicating the move may be one of consolidation carrying little weight.  Yesterday’s trend line inflection point was followed by a pop, but no fundamental movement.  However, we wouldn’t be surprised to see the inflection move lag a day or two, so investors should be on their toes.  If the EUR/USD can climb above 12/29 highs and our 1.4374 resistance we could witness another near-term breakout.  As for the downside, if our 1.4117 support doesn’t hold we could witness a retracement towards 1.40.  Investors shouldn’t be too discouraged by consolidation since the medium-term downtrend lines were laid to rest a while ago.

Naturally, investors are highly anticipating Thursday’ ECB news conference.  While the central bank is expected to hold its benchmark rate at 1%, the ECB has been prone to surprise investors in an effort to impact the Euro.  The investment world will be paying close attention to how Trichet addresses the ECB’s purchase of covered bonds, and whether the EU plans to venture into more extensive alternative liquidity measures, such as quantitative easing.  The EU continues to have lingering economic problems, likely due to the scattered composition of the union.  The relatively mixed performance of the EU economy has led to a comparatively weak appreciation of the Euro against the Dollar.  The EUR/GBP continues its freefall, and it seems there’s more room to go on the downside.  Regardless, the EUR/USD is reaping the rewards of a return to a pre-crisis economy, or a very weak Dollar and pricey crude.

Some heavily-weighted U.S. economic data will be hitting the wires today, including the ADP Non-Farm Employment Change, ISM Non-Manufacturing PMI, Factory Orders and weekly Crude Oil Inventories.  Therefore, volatility could kick in pretty quickly.  The S&P and crude futures are drifting lower this morning, indicating a synchronized pullback.  However, we wouldn’t be surprised to see the weakness turn around quickly, especially if today’s economic data should beat analyst expectations.  We maintain our bullish outlook trend-wise on the EUR/USD until further notice.

Fundamentally, we maintain our resistances of 1.4222, 1.4290, 1.4325, 1.4374, and 1.4432.  To the downside, we hold our supports of 1.4187, 1.4117, 1.4078, 1.4024, and 1.3987.  The 1.40 area serves as a psychological cushion with 1.45 acting as a psychological barrier.  The EUR/USD is currently exchanging at 1.4201.

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’s intraday rally topped out at our 1.6679 resistance, or October 30 highs, as we anticipated.  Bulls are stalling and taking profits after an incredible run with investors awaiting today’s data from the U.S. and tomorrow’s BOE and ECB meetings.  Speaking of data, Britain’s Services PMI came in above analyst expectations today, indicating expansion with a reading of 51.7.  Today’s Services PMI combines with climbing Construction and Manufacturing PMIs to make a home run for Britain as far as Purchasing Manager Indexes are concerned.  Hence, we continue to see the Pound exert relative strength and we view today’s movement as healthy weakness.  Meanwhile, if the Cable can defeat our 1.6679 resistance we may witness the beginning of another near-term bull run towards the psychological 1.70 level.  Our trend lines are gradually reaching their respective inflection points, though these collisions won’t occur until next week.  We placed a new tight near-term uptrend line on our chart to give an idea of where strong uptrend support sits.

All eyes will be on the U.S. today with a wave of key economic releases at bat and the Halifax HPI and BOE meeting on deck.  Therefore, we anticipate the volatility in major Dollar pairs to pick up and the present consolidation period may end quickly.  Today’s performance of the GBP/USD will rely heavily on the S&P futures and their ability to hold above May highs and our 2nd tier uptrend line.  If U.S. equities can build upon their upward momentum, then the Cable may follow suit due to their positive correlation.  We’ve seen considerable volume on up bars and we have yet to view a fundamental pullback.  Therefore, we maintain our bullish outlook on the GBP/USD trend-wise.

Fundamentally, we find resistances of 1.6522, 1.6587, 1.6679, 1.6734, and 1.6854.  To the downside, we see supports of 1.6462, 1.6379, 1.6343 1.6307, and 1.6233.  The 1.65 level acts as a psychological cushion with 1.70 serving as a psychological barrier.  The GBP/USD is currently exchanging at 1.6501.

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 exhibiting some interesting consolidative volatility while bouncing between our 2nd tier uptrend and downtrend lines.  It seems this pattern could continue until these two trend lines reach an inflection point, which may not be until Friday’s trading session.  Meanwhile, the GBP/USD, and EUR/USD are encountering some technical obstacles, indicating slightly consolidative patterns until Thursday’s double-header ECB and BOE meetings.  Investors will also get Capital Spending data from Japan late Wednesday.  The USD/JPY remains encouragingly above March 19 lows and is slowly floating north.  Therefore, the USD/JPY’s uptrend has a faint glimmer of hope.  The uptrend may ultimately rely upon a continued rise in the S&P coupled with investors regaining confidence in the viability of the U.S. Dollar.  However, despite the USD/JPY finding near-term support, we maintain our bearish outlook on the USD/JPY trend wise.  We haven’t seen any game-changing, fundamental moves to the upside to swing the momentum.  There are still 5 downtrend lines bearing down on price with the highly psychological 100 level hanging in the distance.  However, the USD/JPY may begin to wake from its sideways action as our trend lines collide.

Fundamentally, we maintain resistances of 96.33, 96.90, 97.45, 97.98, and 98.66.  To the downside, we find supports of 95.82, 95.12, 94.43, 93.77, and 93.11.  The 100 level serves as a key psychological barrier with 95 acting as a psychological cushion.  The USD/JPY is currently exchanging at 96.01.

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 retested our 2nd tier downtrend line yesterday, yet failed to close above on our 4-hour chart.  The precious metal has since pulled back, finding comfort in our 2nd tier downtrend line once more.  Gold seems to be settling into a consolidation pattern with the critical $1000/oz level just out of reach.  Volume is declining gradually, and it appears investors seek a follow through from either U.S. equities or another strong leg of depreciation in the U.S. Dollar before the precious metal overcomes its own obstacles.  The fact that gold is finding strength in our 1st tier downtrend line is encouraging for bulls.  However, the inability of the precious metal to climb above 2nd tier is a little disconcerting.  Furthermore, until our 3rd tier downtrend line is breached, the possibility remains that gold could duck back into its medium-term downtrend line.  We will just have to wait and see how the present pullback plays out and whether fundamentals are compromised to the downside.

Encouragingly, this attempt to beat $1000/oz seems more promising than gold’s last try in February.  Both the GBP/USD and EUR/USD made fundamental bull statements a while back, and the global economic recovery is gaining steam.  Furthermore, crude has been on a tear as investors worry about future inflation.  Gold has traditionally served as a reliable inflationary hedge.  Therefore, we maintain our bullish outlook trend-wise unless the precious metal should make a fundamentally significant move to the downside.

Fundamentally we find resistances of $978.11/oz, $980.56/oz, $983.25/oz, $985.33/oz and $987.29/oz.  To the downside, we see supports of $975.81/oz, $972.34/oz, $970.35/oz, $967.81/oz, and $964.89/oz. Gold is currently trading at $977.30/oz.

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Adam Hewison

In this week’s video we are revisiting Apple, Inc (NASDAQ_AAPL). I last looked at Apple on April 9th, when it was trading at considerably lower levels than where we are right now. At that time I made some projections using MarketClub’s Fibonacci tool, as to where I thought Apple was headed.

Obviously Apple has moved quite a bit and I want to revisit some of these key levels that I think may be a real challenge to this market in the very near term.

It’s a short video, but I’ll go into details about levels I think could affect this market.

See the New Video Here…

MarketClub’s “Trade Triangle” technology has been right on the money with Apple and continues to maintain a long position from $103.60.

The videos are always 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

EUR/USD has created one of our favored chart patterns.

In the below 30 minute timeframe chart, EUR/USD has created a false break out (See previous post regarding EUR/CAD) on the lower Bollinger Band. It has since revisited that level and held. We feel that the 1.4195 – 1.4200 level is a short-term support level.

We buy at market (current ask 1.4206) with a Stop Loss level at 1.4172, and a Target Level of 1.4265

Stay Nimble!

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

Thanks to FX Sol and Accucharts for the below image.

Source: ForexYard

The Dollar continued its freefall against all the major currencies despite positive housing data figures from yesterday. Today, at 12:15 GMT, Forex traders will have the ability to enjoy hefty volatility in the market as the ADP Non-Farm Employment Change will be released.

ForexYard also advises its traders to follow the Crude Oil Inventories report, which is scheduled at 14:30 GMT. The rising prices of Crude Oil have become a top issue in financial sectors as of late, and the U.S inventories report should have a large effect on its pricing.

Economic News

USD – ADP Non Farm Employment Report on Tap – Will USD Weakness Continue?

The dollar dropped against most of its major currency rivals yesterday, as strong U.S. housing sales data reinforced optimism about the health of the global economy, sapping safe-haven demand for the greenback. All good news aside, by yesterday’s close, the USD fell sharply against the EUR, pushing the oft-traded currency pair to 1.4310. The dollar experienced similar behavior against the GBP and closed at 1.6588.

The dollar had begun the day staging a modest recovery after Monday’s steep drop, but the trend changed quickly as U.S. stocks turned higher, helping to renew the recent rally in higher risk currencies. Analysts said the dollar’s failure to recover shows that investors are convinced the we have seen the worst of the global crisis, and only have room to improve, which is encouraging them to buy higher risk currencies and assets.

A leading indicator released yesterday was the Pending Home Sales report. The figure saw its biggest monthly gain in 7.5 years which indicated that the U.S recession was easing. However, it failed to provide strength to the Dollar as investors may be waiting for key data due to be released today to implement their trading strategies.

Looking ahead to today, the most important economic indicator scheduled to be released from the U.S. is the ADP None-Farm Employment Change at 12:15 GMT. Analysts are forecasting this figure to decrease 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 testimony at around 14:00 GMT. This testifies is very important as it is very likely to Impact the Dollar volatility. Traders are advised to watch closely, as this is likely to set the pace of the Dollar going into the rest of the week’s trading.

EUR – Will the EUR Hold its Recent Gains?

The EUR was affected by two main things in yesterday’s trading; the global stock market rally and mixed feelings ahead of Thursday’s Interest Rate decision by the European Central Bank (ECB). The U.S. stock market rally led investors to buy-back into the EUR, and dropped the Dollar, as investors looked for returns on risky investments in Tuesday’s trading.

The EUR appreciated by around 120 pips versus the USD to close at 1.4300 in yesterday’s trading. The EUR/GBP pair closed almost unchanged at 0.8631 ahead of Thursday’s Interest Rate decisions for both the Euro-Zone and Britain. Overall, the EUR, which for the last few months has been sold by most traders, is seeing these sell-positions unwind and is now making a small recovery. The question now is can EUR bullishness continue versus the Dollar?

Sentiment in the Euro-Zone economy has brightened in the past week following better-than-expected news. The EUR is showing signs of resilience even though there was volatility throughout non-Euro crosses. It will be crucial for traders to identify how the preceding economic indicators from the U.S., Japanese, and other key economies will affect their positions.

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 136.60 level. The JPY also saw bullishness against the USD as it jumped around 70 points and closed at 95.70.
The Bank of Japan needs to keep an eye on the global economy as the Japan’s finance minister, Kaoru Yosano, said the country’s worst post-war recession has already hit bottom. But a full recovery might not come until early 2010 as manufacturers gradually lift output from very low levels.

Traders today have very little fundamental news emanating from Japan as the only indicator being released is the capital spending report. Analysts forecast the figure to decrease from its previous reading. This indicator typically generates small amounts of volatility. However, the GBP and the USD appear to be clutching the reins of today’s market. Traders would be wise to note its future direction as it usually carries a heavy impact on the other currencies.

Crude Oil – Traders Await Crude Oil Inventory Report

Crude oil rebounded from the day’s lows, finishing little changed at $68.20, as the dollar weakened against the EUR, bolstering the appeal of commodities as an alternative investment. Oil prices have risen every day since May 21 on snips of moderately good news from manufacturers, home builders and the U.S. government.

Today, the release of crude oil inventory is likely to help determine the market’s next direction for Black Gold. Oil inventories have fallen in each of the previous three reports from the Energy Information Administration but remain close to an 18-year high. The result of this was a dramatic increase of commodity prices. 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

The pair continued with the bullish trend, as it’s now being traded around the 1.4300 level. The 4-hour chart’s MACD is reaching the 0.010 level, suggesting that the bullish momentum has more steam in it. Going long seems to be the preferable choice today.

GBP/USD

There is a very accurate bullish channel formed on the daily chart as the Cable is now floating in its upper section. Currently, as all oscillators on the 4-hour chart are pointing up, it seems that another bullish session could take place today.

USD/JPY

After three failed attempts to breach through the 95.30 level, it appears that the pair has resumed its bullish activity. A bullish breach at the 4-hour chart’s Slow Stochastic also supports that notion. Going long with tight stops appears to be the right choice today.

USD/CHF

The pair continued its freefall as yesterday it dropped below the 1.0650 level. However, as a bullish cross is taking place on both the 4-hour and the daily charts, it seems that a bullish reversal might take place today.

The Wild Card – Gold

Bullish trends were initiated around the $880 level, and have continued with full steam as currently an ounce of gold is valued at $985. Currently, gold is reaching towards a very strong resistant level placed at the $989 level. If the resistant level will be breached, another sharp bullish move might take place. This could be a great opportunity for forex traders to join a very popular 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.