InvestMacro FX

By GCI Fx Research

€

The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.2885 level and was capped around the US$ 1.3060 level.  The common currency moved lower after European Central Bank President Trichet firmly telegraphed next month’s rate probable 25bps rate cut to 1.00% from 1.25%.  He added the ECB “has decided already to embark on non-standard measures to cope with the situation since mid-September 2008.”  Many dealers believe the ECB may enact new quantitative easing policies from next month.  Traders are also talking about the Obama administration’s bank stress tests.  Rumours suggest the results will be released on 4 May and that there will be no major surprises regarding the nineteen largest U.S. banks.  Data released in the U.S. today saw the March index of leading economic indicators decline 0.3%, the ninth consecutive decline.  In eurozone news, German ZEW investor confidence data will be released tomorrow followed by eurozone purchasing management data on Thursday and Friday’s Ifo business sentiment data.  Euro bids are cited around the US$ 1.3100 figure.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥97.80 level and was capped around the ¥99.40 level.  Risk aversion returned to the markets overnight as traders shook off better-than-expected earnings data from U.S. financial giants amid new expectations the Obama administration may convert some of its bank shareholdings to equity rights.  Data released in Japan overnight saw the March leading index decline 0.3%, up from a revised -0.2% print in February.  These data suggest the Japanese economy may weaken in the near term.  The Nikkei 225 stock index climbed 0.19% to close at ¥8,924.75.  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 ¥126.15 level and was capped around the ¥129.55 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥141.95 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥83.50 level.  The Chinese yuan depreciated vis-à-vis the U.S. dollar today as the greenback closed at CNY 6.8301 in the over-the-counter market, up from CNY 6.8291.

₤

The British pound fell sharply vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.4500 figure and was capped around the $1.4810 level.  Cable came off on expectations that the forthcoming release of the U.K. government’s budget will significantly increase public borrowing. Chancellor of the Exchequer Darling may announce on Wednesday that public sector borrowing is increasing to as much as ₤175 billion in fiscal year 2009-2010.   CBI reported the U.K. economy will contract 3.9% this year and realize growth of just 0.1% in 2010.  Other data saw April Rightmove house prices up 1.8% m/m and decline 7.3% y/y.   Cable bids are cited around the US$ 1.4350 level.  The euro strengthened vis-à-vis the British pound as the single currency tested offers around the ₤0.8915 level and was supported around the ₤0.8795 level.

Daily Market Commentary provided by GCI Financial Ltd.

GCI Financial Ltd (”GCI”) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (”Forex”) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (”CFDs”) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.

DISCLAIMER: GCI’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.

By Fast Brokers

The 30 Year T-Bond futures are recovering from Friday’s large selloff that saw new April lows.  The strength in the 30 Year futures comes in reaction to the large selloff taking place on Wall Street today.  However, despite the present pop in the 30 Year futures, they have been exhibiting clear behavior of a downtrend.  Both near-term and medium-term downtrends are in play, as displayed by our 2nd and 3rd tier downtrend lines.  Despite the inherent negativity, the 30 Year futures still have February and March lows to fall back on.  Therefore, a major selloff should be avoided as long as these lows remain intact.  We’re keeping the massive rally of March 18 in the back of our minds.  We were expecting a follow through to the upside, but it hasn’t materialized yet.  The downtrend taking control despite the use of quantitative easing raises a red flag concerning the demand at Treasury auctions.  The use of quantitative easing is unprecedented in the U.S., so we expect odd behavior from the 30 Year and 10 Year futures over the medium-term.  Therefore, the overall correlation with equities isn’t very reliable.  However, the recent performance of the 30 Year futures could be displaying a forewarning message as far as the health of the U.S. economy is concerned.  Fundamentally, we find resistances of 127.28, 127.64, 127.89, 128.31, and 128.73.  To the downside, we hold our supports of 127.04 126.69, 126.27, and 125.90 with fresh bottom-end of 125.5.  The 30 Year T-Bond futures are presently trading at 127 02.5.

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 has really deteriorated since Friday after falling below previous April lows.  The EUR/USD fell into a rapid decline from here, and is presently trading back below the highly psychological 1.30 level.  Though 1.30 has been broken, we wouldn’t be surprised to see some support around this area as investors take advantage of oversold conditions and hesitate leaving 1.30 behind.  Serious damage has been inflicted upon the Euro in reaction to dissent among the ECB.  The ECB continues to send mixed messages regarding its future monetary policy and the uncertainty is killing the EUR/USD.  Investors need a unified central back in the face of the global economic crisis.  Discontent among the ECB raises debate concerning whether a benchmark rate below 1% is in the not so distant future.  Though the EU has shown signs of improvement in economic data, economists agree the global economy remains in a fragile state.  If a second wave of crisis should hit, the EU could find itself exposed again to faltering Eastern European economies.  Adding to the downward pressure in the EUR/USD is another positive earnings report from a major U.S. financial, Bank of America.  The weakness in the EU economy relative to the present strength in America’s is appreciating the Dollar across the board.  On a more speculative front, we should consider what the EUR/USD’s freefall implies about U.S. equities.  Since the two have been positive correlating through the economic crisis, does the EUR/USD’s plunge indicate an approaching selloff in the S&P futures?  On an encouraging note for the EUR/USD, the currency pair has a ton of solid support to rely upon after building up a solid base from February through March.  Therefore, although the near-term fundamentals are negative, the EUR/USD has some considerable assistance to the downside to keep the overall uptrend intact.  We adjusted our 1st tier uptrend line to give investors a picture of where the force of the uptrend comes into play next.  Fundamentally, we find supports of 1.2953, 1.2919, 1.2876, 1.2833, and 1.2800.  To the topside, we see resistances of 1.3017, 1.3050, 1.3091, 1.3126, and 1.3162.  The 1.30 area still serves as a psychological cushion but could turn into a barrier shortly.  The EUR/USD is currently exchanging at 1.2967.

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 is getting clobbered after the CBI stated Britain’s economic growth could be worse than forecasted.  Furthermore, the CBI is urging its Chancellor not to commit more funds to economic stimulus and quantitative easing in the upcoming budget.  While one would like to believe the ease of quantitative easing would have a positive impact on the Pound, the opposite is occurring.  The Cable’s contraction in response to the news shows investors believe the CBI’s reluctance to encourage further use of liquidity to fight the economic downturn could do more harm than good to Britain’s economy.  With the BOE’s benchmark rate hovering near zero, the CBI is proposing taking away the only tool left to ease credit markets.  On the other hand, the CBI’s decision could be a sign of confidence that the worst of the economic crisis has been realized.  Like the EUR/USD, the GBP/USD’s uptrend has several foreseeable uptrend lines to prevent a real correction back into its long-term downtrend.  Furthermore, despite a pop in the EUR/GBP, the currency pair still has considerable forces in place towards the downside.  Therefore, the Cable has quite a few fundamental and correlative pieces helping out the bulls.  However, the GBP/USD sent a strong message by falling below our 3rd tier uptrend line and more near-term losses could be realized.  The big question will be whether the recent improvement in Britain’s economic data can continue.  Britain will return to the forefront on Tuesday with the release of CPI and RPI.  Fundamentally, we find resistances of 1.4579, 1.4612, 1.4677, 1.4730, and 1.4770.  The 1.50 level remains a key psychological barrier while 1.45 serves as a psychological cushion.  To the downside, we see supports of 1.4532, 1.4478, 1.4438, 1.4391, and 1.4362.   The GBP/USD is currently exchanging at 1.4573.

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 Yen is strengthening slightly against the Dollar again, but the USD/JPY is presently finding strength in our 1st tier uptrend line.  Weakness in the USD/JPY reflects the selloff taking place on Wall Street premarket Monday morning.  With the bad news from Japan out of the way, the focus turns towards U.S. equities and corporate earnings, so the USD/JPY should exhibit a positive correlation with the S&P futures for the time being.  As we stated previously, the USD/JPY’s uptrend is young and fragile.  Therefore, the uptrend lines for the currency pair to fall back on are few in number.  Hence, despite the Dollar’s recent strength and attack at 100, the uptrend could easily crack should U.S. equities falter.  We’ve got multiple downtrend lines bearing down on price.  Therefore, if the USD/JPY should drop below our 1st tier uptrend and downtrend lines, we could witness a sharp, near-term correction.  On the opposite side of the coin, life remains in the uptrend and a continuation of a path to the upside is certainly possible.  Keep a close eye on this currency as volatility could pick up, particularly to the downside.  Fundamentally, we see resistances of 99.06, 99.79, 100.28, 100.71, and 101.44.  To the downside, we find supports of 98.16, 97.59, 97.11, 96.33, and 95.55.  The USD/JPY is currently exchanging at 98.46.

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

Last week, traders saw a flurry of economic news affecting the American economy and practically zero news emanating from Europe. This week appears to be the exact opposite. A blizzard of economic events is expected from the Euro-Zone and very little is scheduled to be released from the United States. Forex traders should definitely pay closer attention to the EUR and GBP markets this week as they will be in the driver’s seat of the market for the days ahead.

Economic News

USD – USD Moves Up against Rivals

After ending last week slightly higher versus most of its currency counterparts, the USD began this week’s trading with a continuation of its recent uptrend, appreciating against every currency rival except the JPY. Dropping below the 1.3000 level against the EUR this morning, and near 1.4700 against the Pound, the Dollar’s strength appears to be on schedule for further upward movement against these majors.

The only pair to beat out the USD this morning has been the Japanese Yen, considering many traders are beginning to hedge their bets on the value of the Dollar as the number one safe-haven investment. This may come as a result of the perception that the Dollar may see weakness in the future as investors pull out of the forex market and back into the stock market due to increased risk appetite and uncertainty in various equity markets. As the future decisions of the European Central Bank (ECB) appear to be foggy, traders are not expecting much correction to take place in the EUR/USD’s recent downward movement and are instead going short on the EUR where possible.

Last week, traders saw a flurry of economic news affecting the American economy and practically zero news emanating from Europe. This week appears to be the exact opposite. A blizzard of economic events is expected from the Euro-Zone and very little is scheduled to be released from the United States. Forex traders should definitely pay closer attention to the EUR and GBP markets this week as they will be in the driver’s seat of the market for the days ahead.

EUR – EUR’s Movement Negative, but Busy News Week May Prove Fruitful

The EUR apparently can’t catch a break these days. With a steady depreciation against the majors, the EUR looks like last week’s loser, and may continue to hold that title throughout this week as well. Dropping below important price barriers against the USD and JPY, but holding steady against the GBP, the EUR’s value may be due to recent analysis of the European Central Bank (ECB) than anything else.

Delivering a speech in which uncertainty seemed to be the major headline, ECB President Jean-Claude Trichet apparently only made matters worse for the 16-nation currency. This indecisiveness no doubt comes from the fundamental differences in solutions perceived to be necessary for the economic conditions of the diverse countries which make up the European Monetary Union (EMU). With a multitude of ethnic, linguistic, and cultural backgrounds, each member country brings with it a unique perspective on this recent crisis as well as a different interpretation on what is required to fix this downturn for the interests of each individual country. Disunity reigns supreme in Europe, and the U.S. and Japanese currencies are the beneficiaries.

On the upside for the EUR this week is the slew of data emanating from the Euro-Zone regional economy. With an abnormally busy news week, the Euro-Zone may, for the first time in months, outshine the Dollar and take control of the forex market this week. Traders will absolutely want to tune in to the economic indicators emanating from Europe and the U.K. throughout the week. Most importantly are the two confidence reports, the ZEW Sentiment and German Ifo Business Climate reports, due out Wednesday and Friday respectively.

JPY – Gains on Wall Street and an Indecisive ECB Leads JPY Higher

The Japanese Yen appears to be on the receiving end of large buying session as traders pounce into the Asian currency to hedge against less certain investments like the EUR, GBP and even the U.S. Dollar. Dropping below key support levels against the EUR and GBP, the JPY appears to be on a fresh bullish run which could have much more room to grow if markets continue like they have the past few days.

Slicing through the 145.80 price level against the Pound, and below 129.00 against the EUR, the Yen’s recent strength may have much to do with the recent uncertainty in monetary policy decisions within the European Central Bank (ECB) and the rising uptrend in the U.S. stock markets. As usual, this week will not be seeing much economic news coming from the island economy, but with so much attention focused on Wall Street and a stale-mated ECB lately, Japan may not need to take the reins to steer its own market to new heights. Traders should be keeping an eye on the European markets this week as its news will no doubt be the guiding force behind this week’s market.

OIL – Global Demand for Oil May Continue Falling; Will its Price Follow?

After last Friday’s jump in oil prices, the cost of buying a barrel of Light Sweet Crude has apparently begun to fall after reports showed that the U.S. economy is still forecasting a contraction. With the world’s top oil consumer declaring that it’s demand for Crude Oil is going to continue falling, and with current production levels being estimated as too high to support prices, traders may be seeing the start of a new downward trend in the price of Crude Oil this week.

Starting last Friday between $51 and $52 per barrel, the price of Crude Oil subsequently jumped to as high as $53 by mid-day. However, during today’s early trading hours, the price of Crude Oil has apparently begun to decline and is currently trading at $51.50. With a few analysts claiming that oil remains slightly over-valued, we could see a sell-off in black gold through late-afternoon today.

Technical News

EUR/USD

There is a very accurate bearish channel forming on the hourly chart, as the pair is now traded around 1.3005. A breach through that level will validate a very strong bearish move with a potential target price of 1.2945. Going short might be a wise choice today.

GBP/USD

The cable is continuing to deliver coherent bearish signals, and is now traded around the 1.4700 level. On the hourly chart, the current price has dropped beneath the Bollinger Bands lower boarder, suggesting that the pair should drop once more. Going short might be the right choice today.

USD/JPY

After a few days of falling prices, it seems that the pair has reached its bearish peak at 98.90. As all oscillators on the 1 hour chart are pointing up, a bullish correction might be impending. Going long with tight stops could be a good strategy

USD/CHF

The pair has breached through the Fibonacci key level of 1.1607, and all oscillators on the 4 hours chart are indicating further bullish movement. The hourlies Bollinger Bands are showing that the price has crossed its upper border, signaling that the current trend should continue, as the pair’s new target price might be 1.1719.

The Wild Card – EUR/GBP

After recently peaking at the 0.9004 level, the pair is consistently dropping. Currently, as all indicators are giving bearish signals, it appears that the pair will extend its downtrend. This might 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.

EUR
The EUR fell against the Dollar as this past week’s trading of the Euro-Zone currency was driven by a looming rate cut from European Central Bank (ECB). Traders have all but priced in another 0.25% rate cut as economic numbers have yet to show a strong sign of improvement.

Market forces are also playing out scenarios for the possibility of quantitative easing moves being undertaken by the ECB as comments from ECB President Jean-Claude Trichet hinted that the possibility remains open. These comments helped drive the EUR/USD to a 1-month low during Friday’s trading session of 1.3104. This level has not been seen since the U.S. unveiled its own quantitative easing program.

This coming week will have the release of surveys gauging the business climate in the Euro-Zone economy. On Tuesday, the German ZEW Economic Sentiment report will be released, and is expected to show a very positive result. However, some analysts may have been caught up in the recent rally in equity markets and could be a bit too bullish. This may be a good time to go short on the EUR/USD. We could see the pair trading near the 1.2850 level by Friday.

GBP
The Pound continues its correction against the Dollar as a brighter economic outlook helped the Pound rise further this week. The Pound ended the week up against the Dollar at 1.4795 from 1.4674 and down.

Against the EUR, the Pound extended its bullish trend to a 4th week in a row. This pair may be a bit undervalued at the 0.8830 level.

Preliminary GDP is due out on Friday as analysts’ consensus estimate is for a contraction in the first quarter of 1.5%. This could be an overly aggressive estimate. Worse results could send the EUR/GBP above the 0.8900 mark.

By GCI Fx Research

€

The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3025 level and was capped around the US$ 1.3195 level.  The common currency extended recent losses after verbal intervention from European Central Bank President Trichet who said the euro is “not weak” at current levels.  Regarding the possibility the ECB will initiate quantitative easing policy soon, Trichet added “In our economy, banks play such a dominant role that non-standard measures need to be implemented – first and foremost – through the intervention and with the active participation of banks. This is why I have sometimes referred to our non-standard measures as those of enhanced credit support.”  Concerning the U.S. dollar, Trichet  reported “I am very, I would say, appreciative, of what is said by our U.S. friends Ben Bernanke, Tim Geithner and Barack Obama that indeed a strong dollar is in the interest of the United States of America.”  Many dealers believe the ECB will extend the maturity of its longer-term refinancings to twelve months.  Data released in the eurozone today saw the February trade deficit improved to -€4.0 billion from -€5.4 billion.  In U.S. news, traders await remarks from Federal Reserve Chairman Bernanke.  Many Fed officials including Vice Chairman Kohn will speak tomorrow.  Data released in the U.S. today saw the mid-April University of Michigan consumer sentiment indicator print at 61.9, up from 57.3 at the end of March.  Euro bids are cited around the US$ 1.3100 figure.

¥/ CNY

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥99.75 level and was supported around the ¥98.70 level.  Finance minister Yosano verbally intervened and reported “currency market now, with (the U.S. dollar – yen) around ¥100, seems to be stable. Share prices (in the Nikkei 225 cash index) have also gone to around 9,000.  We don’t know about the future, but at least at the present time I think that conditions (in the stock and foreign exchange markets) have stabilized in a way that gives us some measure of relief.” His comments render it less likely the government and Bank of Japan will enact yen-selling intervention.  Data released in Japan overnight saw the February tertiary index decline 0.8% m/m.  Also, the March consumer sentiment index printed at 28.9, up from 26.7.  The Nikkei 225 stock index climbed 1.74% to close at ¥8,907.58.  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 ¥128.80 level and was capped around the ¥131.45 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥146.15 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥84.70 level.  The Chinese yuan depreciated vis-à-vis the U.S. dollar today as the greenback closed at CNY 6.8291 in the over-the-counter market, up from CNY 6.8286.

₤

The British pound fell sharply vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.4755 level and was capped around the $1.4940 level.  Sterling tracked the common currency lower after ECB President Trichet’s dovish comments.  Cable bids are cited around the US$ 1.4525 level.  The euro weakened vis-à-vis the British pound as the single currency tested bids around the ₤0.8795 level and was capped around the ₤0.8860 level.

CHF

The Swiss franc came off vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1685 level and was supported around the CHF 1.1455 level.  Swiss National Bank President Roth reiterated his support for the quantitative easing policy announced last month saying “In view of the risk of deflation, decisive action was called for, and we will continue to pursue this strategy for as long as the risk remains.” Data released in Switzerland today saw February retail sales off 3.8%.  Cable bids are cited around the US$ 1.4525 level.  The euro moved lower vis-à-vis the British pound as the single currency tested bids around the ₤0.8795 level and was capped around the ₤0.8860 level.

Daily Market Commentary provided by GCI Financial Ltd.

GCI Financial Ltd (”GCI”) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (”Forex”) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (”CFDs”) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.

DISCLAIMER: GCI’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Retail Sales data was released out of Switzerland today and showed that retail sales declined much more than expected in February. The Swiss real retail sales data, released by the Federal Statistical Office, decreased by 3.8 percent in February from the February 2008 level.  This follows January’s annual retail sales data that had gained by 1.2 percent from the previous January. February’s data surpassed market forecasts which had expected Swiss sales to decline by just 0.2 percent on an annual basis.

Swiss franc falls in currency market trading today.

The Swiss franc declined in currency trading today against other major currencies as the Swiss National Bank reiterated the intention to intervene in the foreign exchange market to limit Swiss franc gains in an effort to prevent deflation. The franc has fallen against the euro, British pound, US dollar and the Japanese yen in trading today.

SNB President Jean-Pierre Roth, speaking in a Shareholders meeting, stated that the SNB would continue to sell Swiss francs after implementing the Central Bank’s first currency market intervention in fifteen years this March.

The SNB announced March 12th, during an interest rate reduction, that the SNB would intervene in the currency markets and specifically, “to prevent any further appreciation of the Swiss franc against the euro”.

President Roth said that the move was not a competitive devaluation but “a key operational tool which, under the given circumstances, helps us perform our mandate with regard to price stability, in other words to preserve our economy from both inflation and deflation.”

Roth also stated, that “In view of the risk of deflation, decisive action was called for, and we will continue to pursue this strategy for as long as the risk remains.”

The euro gained against the franc today as the EUR/CHF advanced from its 1.5116 opening rate at 00:00GMT to trading near 1.5197 at 4:36pm EST according to currency data from Oanda. The euro jumped over 100 pips to an intraday high of 1.5241 after the speech.

The pound also advanced today as the GBP/CHF opened at 1.7152 and has ascended to trading at 1.7247 later today.  The USD/CHF pair has climbed from its 1.1522 opening exchange rate to trading at 1.1658 and made an intraday high of 1.1689 before retreating.  The franc has declined against the Japanese yen today as the CHF/JPY fell from its 86.23 opening to trading later at 85.14 yen per franc.

EUR/CHF Chart – The euro gaining against the Swiss franc today on the 30-minute chart to trading above the 1.5200 level.

Source: ForexYard
After some surprising data regarding U.S. jobless claims yesterday, the USD saw moderate gains against its primary currency rivals. The European Central Bank (ECB) appears to be slow to recognize the required solutions to their economic woes, and Japan has regained a level of safe-haven investment as China’s growth diminished through the first quarter of 2009. Safe-haven currencies appear to be gaining strength as the rest of the world’s currencies continue to suffer from the recession.

Economic News

USD – U.S. Dollar Rises on Positive Economic Data

The greenback rose against most other major currencies on Thursday due to speculation that the U.S. economy is starting to show some tentative signs of stability, thus boosting demand for the USD. Early U.S. economic data showed a decline in initial jobless claims, a plunge in U.S. housing starts and a slower rate of decline in manufacturing in the Philadelphia region.

In late afternoon trading, the Dollar was up 0.4% versus the EUR to $1.3170 after rising to a session high of $1.3128. The USD was also high against the Pound gaining 0.4% to $1.4917. The greenback, however, gave up nearly all of its earlier losses against the Japanese Yen. It was last down less than 0.1% at 99.28 Yen.

The Dollar has tended to gain ground during periods of economic uncertainty and financial turmoil, benefiting from falling equities as investors flee into other Dollar-denominated assets. The Dollar tends to rise on bad news because it is often seen as a safer place to park money during periods of market uncertainty and heightened risk aversion. In a sign that the world economy is still struggling, figures on Thursday showed China’s annual economic growth slowed to its weakest rate on record in the first quarter, while Euro-Zone industrial output plummeted in February.

This weak economic data from around the world has reduced confidence that the global economy would recover anytime soon, therefore boosting safe-haven flows into the U.S. currency.

EUR – The EUR Loses Momentum

The European currency pared most of its losses against the Dollar. It was last down 0.3% at 1.3177 versus the USD. Against the Yen, the EUR traded at 130.95, after depreciating yesterday as much as 1.6% to 129.37. The currency may extend its decline against the Yen even further, after falling to the lowest level this month on speculation that policy disagreement among the region’s central bankers will undermine efforts to end the recession.

Separate figures showed Euro-Zone industrial output plummeted by a record 18.4% year-on-year in February and inflation halved to an all-time low, reinforcing expectations that the 16-nation economy is deteriorating and that interest rates may fall more. The European Central Bank (ECB) is due to announce on May 7th whether it will follow counterparts in the U.S. and the U.K. in pumping money into the economy by purchasing assets. ECB policy-makers have already indicated they may support cutting the 1.25% target rate below 1% and purchasing debt securities to pump money into the ailing economy.

Analysts have said that the EUR is likely to remain bearish due to market distrust of the European economic outlook. The European currency will probably fall below the strong support level of 1.2900 later in the month.

JPY – Yen Gains On China’s Disappointing GDP

The Yen jumped against the Dollar and other major currencies on Thursday after data showed China’s economic growth slowed to its weakest on record, disappointing market players who had bought higher-yielding currencies in anticipation of more upbeat numbers.

China’s annual GDP growth slowed to 6.1% in the first quarter from 6.8% in the final three months of last year, prompting market players to reverse positions and buy the Yen back. The Japanese currency jumped 0.3% against the USD to 99.15 Yen, and 2% against the GBP to 148.63 Yen.

The Japanese currency’s biggest gains yesterday were versus the Australian and New Zealand dollars on speculation that the slowdown in China’s economic expansion will deepen the world’s recession. The JPY rose as much as 2.4% against the Aussie to 70.69 yen, and versus the New Zealand dollar, it appreciated 2.9% to 56.05 yen. These gains may continue through the rest of April.

Crude Oil – Crude Oil Gains on U.S. Jobs Data

Crude Oil prices rose above $50 a barrel on Thursday, after the United States, the world’s largest energy consumer, witnessed the number of workers filing for unemployment benefits unexpectedly fall last week, but continuing claims rose to a record as the recession struck hard. However, its gains remained limited as mixed data from the United States and China reminded investors that any signs of economic recovery were tentative.

Crude Oil trading remained volatile during the session, as investors also digested separate sets of gloomy economic data from the U.S. and other countries. Cautious trading in U.S. stock markets also weighed on Crude Oil prices. News that the Organization of Petroleum Exporting Countries’ (OPEC) seaborne oil exports, excluding Angola and Ecuador, will fall 560,000 barrels per day in the 4 weeks to May 2, was also supportive for prices recently.

Technical News

EUR/USD

There appears to be a violent breach of the lower border on the hourly chart’s Bollinger Bands, signaling a short-term upward correction may be imminent. However, the tightening of the Bollinger Bands on the 4-hour and daily charts signifies that another volatile movement may be in the works. Recent pressures have signaled that there remains downward pressure on this pair. Going short might be a wise choice today.

GBP/USD

There appears to be a bullish cross forming on the hourly chart’s Slow Stochastic, signaling an impending upward correction. As other oscillators are showing the price floating in neutral territory, and the Bollinger Bands tightening on all charts, there is a possibility of a volatile upward movement in the making. Going long with tight stops might be a good strategy today.

USD/JPY

After yesterday’s moderate upward movement, this pair now appears to be leveling off as all oscillators and indicators are displaying neutrality. It’s possible a trend-reversal is in the making, but traders may want to wait for a clearer signal before going short on this pair today.

USD/CHF

The recent volatile upward movement has pushed the price of this pair into the over-bought territory on the RSI of both the hourly and 4-hour charts, indicating a downward correction may be in the works. The recent bearish cross on the hourly chart’s Slow Stochastic supports this notion. Going short might be wise today.

The Wild Card – GBP/CHF

The upward movement, which has sustained itself on this pair for over a week now, has finally pushed its price into the over-bought territory on the RSI of the hourly, 4-hour and daily charts. The weekly Momentum oscillator is showing a sharp downward direction and there appears to be a bearish cross forming on the daily chart’s Slow Stochastic. All of these indications point to a future depreciation in this pair. Forex traders have a great opportunity to enter this impending trend at an early stage today.

Forex Market Analysis provided by Forex Yard.

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