InvestMacro FX

Source: ForexYard

The dollar was slightly more volatile over the past week than usual, and the explanations for this have been getting trickier by the day. As for this week, forex traders are advised to take positions on trades, as a string of data releases coming out of Europe and Japan are likely to affect the greenback’s main currency crosses.

Economic News

USD – USD Rallies – Benefits from Safe-Haven Appeal

The USD has experienced a positive day of trading during the today’s early morning hours. Closing last Friday slightly up versus the majority of its currency pairs and crosses, the USD continued this bullishness and appears poised to maintain its recent momentum. Gaining against the EUR, the greenback is currently trading near the 1.3435 price level, and even climbing as high as 1.1240 against the Swiss Franc, a high not seen since 10 days ago.

As U.S. data illuminates the economy in a positive glow, large exporting countries like China have begun to purchase more and more U.S. Treasury Notes despite the various cautions for doing so. A number of negative results from the European economies, and even Canada last Friday, have pushed many investors into the safe-haven of the USD and JPY. Again, despite some warnings that the USD’s safe-haven is not as stable as many believe, traders continue to purchase the greenback for portfolio protection. Without a strong shock to forex trader confidence, this behavior will likely continue throughout the next few trading days.

With a severely lacking mix of indicators being released from the U.S. economy this week, the likely mover behind the forex market in the coming days appears to be the EUR. However, there does appear to be 2 indicators worth marking in your calendars. On Tuesday we are expecting the Building Permits report which may actually, for the first time in months, show that the housing sector is on the rebound. This could help the Dollar’s rally continue through to the second indicator due to be released on Thursday. The Unemployment Claims report on Thursday may be more important than most expect considering last month’s Non-Farm Payroll report indicated a sharper contraction in employment than most expected. This could prove to be USD-negative.

EUR – Euro-Zone Fundamentals Weak as GDP Shrinks

Across-the-board weakness may be the best way to describe the EUR’s activity in today’s early trading sessions. Losing strength to every major currency pair, the EUR is a little worse for wear. Dropping to 1.3435 against the USD, 127.30 against the JPY, and even as low as 0.8870 against the Pound Sterling, the 16-nation currency has been on the receiving end of negative news since last Friday’s GDP figures illustrated a larger regional contraction than most analysts had foreseen.

As was illustrated by the various reports from countries within the European Monetary Union (EMU), the national and regional economies throughout the Euro-Zone suffered a deeper economic contraction than was forecast, and the EUR is suffering the consequences. This growing weakness doesn’t seem to be abating either.

With a heavy news week ahead, the EUR will no doubt be steering this week’s forex market. However, most expectations are for a continuation of the recently poor showing of Euro-Zone fundamentals. The weakness in regional GDP means that the 16-nations of the EMU are struggling to produce the jobs, manufacturing, and industrial output to remain as competitive as is necessary. With French and German manufacturing and services data expected on Thursday, this week’s data has the potential to show that the Euro-Zone is indeed still within a deep recession and not yet on its way out. The other possibility is for a sudden surprise batch of news which shows the regional economy rebounding strongly, in which case the EUR may go bullish.

JPY – Yen Out-Performs Other Currencies

The Yen has out-performed all of its competitors in recent days. Regaining most of the strength lost in the previous few weeks, the JPY has now fought back to some of the highs not seen in months. Climbing to 94.80 versus the USD, a level not seen since mid-March, the Yen actually appears to have regained its safe-haven status. It also climbed to the 127.30 level against the EUR, a range not seen since late-April.

This week also appears to be an exciting news week for the JPY, a statement not often made by economic analysts in the forex market. With 2 large indicators due to be published, the Yen may actually be a driving force in this week’s market. On Tuesday, the Japanese Cabinet Office will release its preliminary GDP figures which are expected to show that the Japanese economy may have shrunk by 4.2% in the first quarter of 2009. Also due this week is a decision by the Bank of Japan (BoJ) on its short-term interest rates. As rates are still near 0%, a reduction seems unlikely. The information released by the BoJ, however, may give traders and indication of the future monetary policy decision to come.

Crude Oil – Has the Price of Oil Reached its Peak for 2009?

The price of Crude Oil in recent weeks has been on a steady bullish trend. However, last Friday this trend may have been breached with a downward correction resulting from a decline in stock markets. With regional stock markets declining since last Friday, market demand for oil has come under scrutiny. While the United States may have published a series of positive growth data, the Euro-Zone illuminated its continued weakness with low GDP figures. Mixed with poor performing markets, economic growth and energy demand seem higher than they should be.

Most analysts are now backtracking by stating that the uptrend in oil seen over the previous weeks was due to a surge in market optimism that saw stock markets soaring and the USD dropping. However, as markets inevitably correct themselves after optimism has run its course, true values return. The sad truth is that demand for Crude Oil is still at an all-time low, and some analysts are reducing their 2010 forecasts. If this keeps up, the current price of $57.00 a barrel may be a high point in the coming weeks.

Technical News

EUR/USD

There is a fresh bullish cross forming on the 4- hour chart’s Slow Stochastic indicating a bullish correction might take place in the nearest future. The upward direction on the hourly chart’s Momentum oscillator also supports this notion. When the upward breach occurs, going long with tight stops appears to be preferable strategy.

GBP/USD

The pair has been range-trading for a while now, with no specific direction. The Daily chart’s Slow Stochastic providing us with mixed signals. The 4 hour charts do not provide a clear direction as well. Waiting for a clearer sign on the hourlies chart might be a good strategy today.

USD/JPY

The hourly chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, the daily Chart’s RSI is already floating in the oversold territory indicating that a bullish correction might take place in the nearest future. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.

USD/CHF

The price of this pair appears to be floating in the over-bought territory on the hourly chart’s RSI indicating a downward correction may be imminent. The downward direction on the 4-hour chart’s Momentum oscillator also supports this notion. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

The Wild Card – Gold

Gold prices rose significantly in the last week and peaked at $933 for an ounce. However, the daily chart’s RSI is floating in an overbought territory suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. This might be a good 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

€

The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3460 level and was capped around the US$ 1.3650 level.  Data released in the U.S. today saw April headline consumer price inflation unchanged m/m and off 0.7% y/y while the ex-food and energy component was up 0.3% m/m and 1.9% y/y.  The slide in year-over-year CPI was the largest decline in 54 years.  Also, April headline retail sales were off 0.4% m/m and off 10.1% y/y while the ex-autos component was off 0.5% m/m and 7.7% y/y.  Other data saw March business inventories off 1.0% m/m and 4.8% y/y while March business sales were off 1.6% m/m and 15.6% y/y.  Additionally, mid-May University of Michigan consumer sentiment improved to 67.9 from 65.1 in April. Moreover, it was reported that April industrial production was off 0.5% m/m while capacity utilization shrank to 69.1%.  In eurozone news, European Central Bank member Provopoulos pessimistically reported “…the exit from this most unfavorable international economic situation will be neither easy nor quick…Still substantial effort will be necessary given that the interest rate cuts have not been fully translated into lower borrowing rates for households and businesses.”  The ECB reported it is not currently prepared to accept government bonds from central and eastern European governments as collateral for refinancing operations.  Data released in the eurozone saw EMU-16 April consumer price inflation rise 0.4% m/m and 0.6% y/y while German Q1 GDP was off 3.8% q/q.  Moreover, EMU-16 GDP was off 2.5% q/q and 4.6% y/y.  Euro bids are cited around the US$ 1.2765 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥94.75 level and was capped around the ¥96.20 level.  The pair reached its lowest level since 20 March as risk aversion again ruled the market.  Data released in Japan overnight saw March core machinery orders off 1.3% m/m while the April domestic corporate goods price index was off 0.4% m/m and off 3.8% y/y.  Democratic Party of Japan finance spokesman Nakagawa reported the U.S. government should issue yen-denominated bonds, a policy that would see Japan continue to purchase U.S. assets but also weaken the greenback.  The Japanese media yesterday reported the government is likely to upgrade its assessment of the economy.  The Nikkei 225 yesterday stock index lost 2.64% today to close at ¥9,093.73.  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 offers around the ¥127.95 level and was capped around the ¥131.15 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥143.55 level while the Swiss franc moved higher vis-à-vis the yen and tested bids around the ¥84.50 level. In Chinese news, the U.S. dollar depreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8215 in the over-the-counter market, down from CNY 6.8250.

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

The Eurozone Gross Domestic Product fell more than expected in the first quarter of 2009 according to a flash estimate released by Eurostat today. The 16-nation eurozone GDP declined by 2.5 percent in the January to March quarter following GDP contraction of 1.6 percent in the fourth quarter of 2008. The eurozone has been in recession since the third quarter of 2008 when GDP contracted by 0.2 percent for the second quarter in a row. On an annual basis, the first quarter GDP is 4.6 percent lower than the first quarter of 2008 following the fourth quarter’s 1.4 percent annual decline.

Today’s data surpassed economic forecasts that were expecting the GDP to decline by 2.0 percent and marked the largest GDP contraction on record for the eurozone.

Germany, the eurozone’s largest economy, saw a GDP decline of 3.8 percent in the first quarter following a revised GDP decline of 2.2 percent in the fourth quarter. France, the eurozone’s second largest economy, saw their economy decline in the first quarter as GDP decreased by 1.2 percent after posting a revised decline of 1.5 percent in the fourth quarter. Italy’s GDP declined by 2.4 percent in the first quarter after declining by 2.1 percent in the fourth quarter.

Other EU16 nation GDP declines were the Neatherlands (-2.8%), Spain (-1.8%), Austria (-2.8%) and Portugal (-1.5%). Cyprus, meanwhile, managed to show a flat GDP change for the quarter after growth of 0.5 percent in the fourth quarter of 2008.

Today’s flash estimate is followed up by two more revised GDP releases that are scheduled for release on June 3, 2009 and July 8, 2009.

Euro mixed in currency trading.

The currency markets today have seen the euro mixed in trading against most of the other major currencies after the GDP release. The euro has fallen versus the U.S. dollar, British pound, Japanese yen and Canadian dollar while gaining against the Australian dollar, New Zealand dollar and Swiss franc.

The euro has declined against the US dollar as the EUR/USD trades at 1.3554 in the afternoon in the US session at 12:28pm EST after opening the day at 1.3636.

The euro has fallen against the British pound as the EUR/GBP trades at 0.8898 after opening at 0.8952. The euro has slid today versus the Japanese yen as the EUR/JPY trades at 128.77 after the 130.91 opening. The euro has also declined versus the Canadian dollar as the EUR/CAD trades at 1.5922 after opening at 1.5971.

The euro has advanced versus the Australian and New Zealand dollars as the EUR/AUD trades at 1.7988 from 1.7965 and the EUR/NZD trades at 2.3056 from the 2.3027 opening. Against the Swiss franc, the euro has gained ground today as the EUR/CHF has advanced from 1.5066 to trading at 1.5113.

EUR/USD Chart – The Euro falling against the US Dollar today in Currency Trading and trading below the 100-period simple moving average in blue on the hourly chart.

By Forex Brokers

Gold continues to climb north while locking in a positive correlation with U.S. equities. The precious metal is enjoying gains and only partially participating in pullbacks. Volume is falling off, implying the present rally could experience a peak and consequential pullback in the near-term. However, the uptrend seems to be in the driver’s seat and this could continue to be the case until our downtrend line and/or the psychological $950/oz barrier. Meanwhile, gold is building up a solid base above the critical $900/oz psychological level. As a result, any near-term weakness has several lines of defense ready to act. Therefore, we have a bullish outlook for the near-term.
Meanwhile, the precious metal continues to exhibit odd behavior, including a positive correlation with equities. Perhaps gold is thriving off of rising oil and signs of inflation. We’re seeing a positive reaction to a higher than expected Core CPI from the U.S. coupled with a higher than expected headline CPI from the EU. Additionally, we may be witnessing further diversification of China’s reserves from the Dollar into gold, reducing supply and raising price.
Fundamentally, we maintain resistances of $933.40/oz, $940.04/oz, $943.18/oz, $947.81/oz, and $951.34/oz. To the downside we hold supports of $923.07/oz, $918.43/oz, $911.55/oz, $908.39/oz, and $902.12/oz. Gold is currently trading at $929.85/oz.

Market Commentary provided by Fast Brokers.

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

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

By Fast Brokers

The EUR/USD sold off earlier today after German Prelim GDP and EU Flash GDP came in well below analyst expectations with downward revisions to their previous releases. The negative GDP data dampens optimism a bit and creates an air of caution while placing further downward pressure on the EUR/USD. On an encouraging note, today’s pullback comes on declining volume. Investors entered to support price once it approached 1.35 for the 2nd time in as many days. The stabilization comes after the U.S. reported better than expected economic data all around. The defense of 1.35 shows investors aren’t willing to give into the downtrend so easily while the EUR/USD pops off of our 2nd tier downtrend line. Meanwhile, our 3rd tier uptrend line and 2nd tier downtrend lines are approaching an inflection point, meaning the consolidation could end shortly. Unfortunately, the near-term momentum is still in favor of the downside due the disappointing EU economic data coupled with what some analysts deem overvalued U.S. equities. The EUR/GBP is under some downward pressure, further emphasizing the relative weakness of the Euro.
One week after the ECB acted in rare unison to lower rates and purchase covered bonds, several governors have gone public with their discontent and seem defiant to avoid diving head first into quantitative easing. The return of instability in the ECB could cap any gains in correlation with U.S. equities since investors dislike uncertainty concerning future monetary policy. However, we’ve seen Britain’s quantitative easing policy have a positive impact on the Pound since the program’s inception. Therefore, investors may not be concerned of negative near-term downward pressure on the EUR/USD if the ECB does decide to expand its present alternative liquidity operation.
We suggest investors continue to keep a close eye on 1.35. For if this psychological cushion is pushed aside, we could see a sharp, near-term selloff towards 3/25 lows. On the flipside, if U.S. equities rally off of the positive economic data and the EUR/USD manages to participate hand in hand, watch for March highs. If March highs are conquered, we could see a nice, near-term pop. We maintain our bullish outlook trend wise unless 1.35 is taken out.
Fundamentally, we find resistances of 1.3579, 1.3604, 1.3639, 1.3659, and 1.3701. To the downside, we see supports of 1.3554, 1.3552, 1.3497, 1.3459, and 1.3416. The psychological cushion sits at 1.35 with a psychological barrier waiting above at 1.40. The EUR/USD is currently exchanging at 1.3582.

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 continues to struggle, heading beneath our 1st tier downtrend line. The currency pair briefly traded below the psychological 95.00 level today, but bulls quickly came to the rescue. However, the fact that the USD/JPY dipped below our 1st tier uptrend line is a negative sign for the near-term. At least we haven’t seen a high volume selloff and volume seems to be on the decline. Therefore, we could see a temporary bottom soon, likely above March 19 lows. On the other hand, we could see an accelerated movement to the downside if March 19 lows don’t hold. Fortunately for optimists, these lows are still fairly out of reach, leaving the possibility of a near-term turnaround in the mix. Hence, the next few trading sessions could prove to be critical to the USD/JPY’s uptrend.
The USD/JPY has been trending lower the last week as analysts caution of overbought conditions in U.S. equity markets. The currency pair seems to be under more downward pressure than the S&P futures, possibly indicating an oncoming selloff in U.S. equities. On the other hand, with the Carry Trade mute, investors could be hinting at a recovery in the U.S. economy with the Japanese economy lagging behind. Either way, the momentum remains to the downside in the USD/JPY for the near-term, and we’ll have to see a reversal to the upside on sizable volume for the currency pair to change course. That being said, the medium-term outlook is still bullish unless the aforementioned supports collapse.
The resilience of the USD/JPY’s uptrend will likely be determined by U.S. equities. Are we witnessing profit taking in equities, or are U.S. markets in for a second round of pain? The currency pair is getting close to testing its limits and it will be interesting to see how the USD/JPY holds up over the next few trading sessions.
Fundamentally, we find supports of 95.04, 94.83, 94.50, 94.14, and 93.89. To the topside we see resistances of 95.40, 95.69, 96.05, 96.37, and 96.66. The USD/JPY is currently exchanging at 95.30.

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

Oil prices reached over $59.50 a barrel yesterday, an increase of a whopping 4%. It seems that the OPEC production cuts have worked. Traders should also take into account that the Crude prices were also fueled yesterday by bullish stock markets and a weak Dollar. The price of Crude Oil is only likely to increase further today if the U.S. and Euro-Zone continue to show optimism, and the Dollar continues its bearish run.

Economic News

USD – Dollar Plummets on Jobless Claims Data

The U.S. Dollar plummeted considerably versus its major rivals on Thursday. This was amid uncertainty about the economic outlook, buoyed by modest safe-haven flows. The Dollar dived against the EU after a report showing U.S. jobless claims rose last week more than analysts originally forecasted. However, the U.S. and global stock markets made gains yesterday.

The USD fell by over 80 pips to 1.3634 against the EUR yesterday, after appreciating earlier to $1.3531, the strongest level since May 8. The Dollar also declined against the GBP by 110 pips to close at 1.5229. The U.S. currency, however, increased against the JPY to 95.99 Yen from a 95.47 opening. The Dollar has weakened in the past 3 weeks, falling to $1.3634 per EUR from $1.2886 on April 22, while the Standard & Poor’s 500 Index reached its high for the year and Treasury yields rose amid an increase in risk appetite among investors.

The U.S. Dollar may appreciate further against the EUR after the 16-nation currency was unable to break above $1.3700 amid an increase in U.S. stocks. Stock markets remain a key driver of currencies, and their rise in yesterday’s trading was clearly reflected in the bearishness of the Dollar, analysts said. Market players will be watching a heavy round of U.S. economic data on Friday, including April consumer price inflation, the University of Michigan consumer confidence survey.

EUR – The Euro-Zone Goes Defensive on ECB Policy Concerns

The EUR held on to gains made on Thursday against the greenback keeping within sight of recent highs made as optimism has grown that the worst of the global economic crisis may be over. The European currency, which hit a 7 week high at $1.3722 this week, was a shade softer at $1.3624 in early trading on Friday.

Against the Yen, the EUR headed for its first gain in 3 days on speculation the European Central Bank (ECB) will take additional steps to keep down borrowing costs, possibly increasing demand for the currency. The EUR/JPY currency pair finished trading at 130.92 Yen from 129.42 Yen yesterday. Traders now wonder if the EUR can extend this 1 day gain against the JPY.

The market offered limited initial reaction to comments by members of the European Central Bank Governing Council, who on Thursday stated the ECB’s key rate may eventually approach zero. Some analysts said recent comments from the ECB underlined disagreement between policymakers regarding how much lower Interest Rates can fall, and if this disagreement continues the result may be a bearish EUR in the medium-term.

The Pound Sterling remained under pressure after the Bank of England (BoE) said on Wednesday that it expected British inflation and the economy to recover more slowly than previously forecast. The Pound made impressive gains against the Dollar on Thursday to finish higher by over 100 pips at 1.5229. Today, investors have their eye on German Prelim GDP figures at 6.00 GMT, as this is likely to lead to volatility in the EUR/GBP cross.

JPY – The Yen Declines vs. the USD as Stocks Rebound

The Yen fell against the EUR for the first time in 4 days as a gain in stocks encouraged investors to buy higher-yielding assets funded with Japan’s currency.
The JPY declined by over 1% against the EUR to 130.92 from 129.42 yesterday .The Yen also weakened earlier 1% against the Dollar to 95.99, because of selling to protect options that would become worthless should Japan’s currency rise further, according to analysts.

The Yen may reverse this year’s decline against the Dollar as Japan’s currency succeeds the greenback as the best refuge from the financial crisis. The Japanese currency may appreciate to 92 yen by the end of the year as the link between the greenback and risk aversion deteriorates. As for today, forex traders are advised to follow the U.S. Core CPI data release at 12.30 GMT, as the results of this are highly likely to determine USD/JPY trading going into next week.

Crude Oil – Crude Rises Above $59 a Barrel

Crude Oil prices rose on Thursday, tracking a rebound on Wall Street, though a gloomy demand forecast from the International Energy Agency (IEA) limited gains.
Crude prices rose $2, or 4%, to settle at $59.53 a barrel. Oil prices continue to track equities markets as traders look to stocks for signs of an economic recovery that could lift ailing world fuel demand. The other factor that helped Oil prices yesterday was the weak Dollar, directly leading to a bullish price of Oil.

The 11 members of the Organization of Petroleum Exporting Countries (OPEC) bound by production targets implemented 77% of planned cuts of 4.2 million barrels a day in April, down from a revised 82% for March. The cartel next meets on May 28, and is unlikely to alter production limits if prices remain strong, Iraq’s oil minister said Thursday. The price of Crude may hit $65 by the end of the month if additional solid signs of an earlier-than-forecasted economic recovery become more apparent.

Technical News

EUR/USD

The bullish trend is loosing its steam and the pair seems to consolidate around the 1.3630 level. The pair currently sits near the upper border of the daily chart’s RSI, suggesting a downward correction may be imminent. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

GBP/USD

There is a fresh bearish cross forming on the 4-hour chart’s Slow Stochastic indicating a bearish correction might take place in the nearest future. The downward direction on the hourly chart’s Momentum oscillator also supports this notion. When the downward breach occurs, going short with tight stops appears to be preferable strategy.

USD/JPY

The hourly chart is showing mixed signals with its Slow Stochastic fluctuating at the neutral territory. However, a bullish cross forming on the daily chart’s Slow Stochastic implies that upwards correction might take place in the nearest time frame. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.

USD/CHF

The typical range trading on the hourly chart continues. The 4-hour chart RSI is floating in neutral territory. However, the pair currently sits near the bottom border of the daily chart’s RSI, suggesting an upward correction may be imminent. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.

The Wild Card – Crude Oil

Oil prices rose significantly in the last week and peaked at $59.50 per barrel. However, the daily charts’ RSI is floating in an overbought territory suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. This might be a good 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

€

The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3665 level and was supported around the US$ 1.3525 level.  U.S. equity markets retraced some of yesterday’s losses, boosting economic sentiment and caused traders to chase higher-yielding currencies.  Data released in the U.S. today saw weekly initial jobless claims climb 32,000 last week to 637,000 while.  Also, April producer prices were up 0.3%, defying expectations of a 0.1% climb.  Some dealers believe all of the fiscal and monetary stimuli in the economy could engender a nasty bout of inflation and erode the value of the dollar.  The core producer price index was up +0.1%.  Continuing jobless claims were up 202,000 to 6.56 million, the highest level since at least 1967.  In eurozone news, many economic data will be released tomorrow including first quarter German and French gross domestic product data and eurozone consumer price inflation data.  Euro bids are cited around the US$ 1.2765 level.

¥/ CNY

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥95.85 level and was supported around the ¥95.10 level.  Risk appetite returned to the market as traders moved into higher-yielding currencies.  The Japanese media reported the Cabinet Office is planning to upwardly revise its assessment of the economy later this month, possibly noting the pace of deteriorating is moderating.  The government may report the economy has bottomed out and would represent the government’s first upward revision since February 2006.   Last month’s report indicated “The economy is worsening rapidly and is in a severe situation.  The pace of worsening is expected to moderate as inventory adjustment progresses.”  Earlier this month, it was reported industrial production evidenced its first monthly increase in six months.  The Nikkei 225 yesterday stock index lost 2.64% today to close at ¥9,093.73.  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 ¥130.90 level and was supported around the ¥128.85 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥146.15 level while the Swiss franc moved higher vis-à-vis the yen and tested bids around the ¥86.90 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8250 in the over-the-counter market, up from CNY 6.8225.

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

EUR/USD

The EUR/USD is stabilizing after dipping below 5/11 lows yesterday. Wednesday’s pullback came on sizeable volume, yet we wouldn’t consider it a significant movement. The EUR/USD has managed to steer clear of the psychological 1.35 level with its upward momentum intact. On a cautionary note, the currency pair has dropped beneath our 1st tier downtrend and failed to eclipse March highs on 5/13. Therefore, we wouldn’t be surprised to see a near-term struggle as the S&P battles 900.
Investors are eagerly anticipating data releases from the EU tomorrow since the region has been relatively quiet on the economic news front lately. The EU will release German and French Prelim GDP, EU Flash GDP, and CPI. The U.S. will also release CPI data of its own along with manufacturing data. Therefore, we expect volatility to pick up tomorrow.
One week after the ECB acted in rare unison to lower rates and purchase covered bonds, several governors have gone public with their discontent and seem defiant to avoid diving head first into quantitative easing. The return of instability in the ECB could cap gains in the EUR/USD since investors dislike uncertainty concerning future monetary policy. However, we’ve seen Britain’s quantitative easing policy have a positive impact on the Pound since the program’s inception. Therefore, investors may not be concerned of negative near-term downward pressure on the EUR/USD if the ECB does decide to expand its present alternative liquidity operation.
If tomorrow’s data releases disappoint analysts and investors, keep an eye on 1.35. For if this psychological cushion is pushed aside, we could see a sharp, near-term selloff towards 3/25 lows. On the flipside, if the news is better than expected and investors react positively, watch for March highs. If March highs are conquered, we could see a nice, near-term pop. We maintain our bullish outlook trend wise unless 1.35 is taken out.
Fundamentally, we find resistances of 1.3639, 1.3659, 1.3701, 1.3737, and 1.3776. To the downside, we see supports of 1.3604, 1.3579, 1.3554, 1.3522, and 1.3497. The psychological cushion sits at 1.35 with a psychological barrier waiting above at 1.40. The EUR/USD is currently exchanging at 1.3624.

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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.

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GBP/USD

The Cable is settling after yesterday’s selloff in reaction to disappointing retail sales data from the U.S.  The pullback came on pretty large volume, so we could see a continued near-tem downturn with a retest of 1.50.  However, the bull trend in the Cable is still in control since any foreseeable downtrend line remains far beneath present price.  Additionally, the economic data from Britain continues to come in positively, including Tuesday’s key Manufacturing Production and CCC releases.  The CCC number was very encouraging since it beat analyst expectations by a long shot for the second straight month.  Therefore, Britain’s employment market seems to be improving with the CCC on a downward slope.  However, the CCC number is still at historically elevated levels, and analysts shouldn’t get too comfortable until it reaches the 15k area.  Regardless, we’ve witnessed improvements in British economic data across the spectrum over the past month, giving the Pound relative strength with little reason to change our bullish outlook trend wise.

Attention will turn on the U.S. and EU for the remainder of the week as both countries release CPI data while the EU provides GDP numbers.  The S&P has dipped back below 900, signifying a near-term struggle to the upside.  We expect the GBP/USD to fall in line with its positive correlation with the EUR/USD and S&P futures over the next 48 hours while exhibiting its relative strength.  Keep an eye out for 1.50 to the downside, for if this psychological level doesn’t hold we could see the pullback pick up speed.  To the topside May and January highs serve as the key fundamental battlegrounds restricting excited gains.

Fundamentally, we find resistances of 1.5241, 1.5277, 1.5310, 1.5389, and 1.5465.  To the downside we see supports of 1.5190, 1.5109, 1.5065, 1.5000, and 1.4940.  The GBP/USD is currently exchanging at 1.5208.

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.