InvestMacro FX

By Fast Brokers

The USD/JPY is recovering from yesterday’s losses after sinking below our 1st tier uptrend line and 2nd tier downtrend line while the currency pair exercised its past positive correlation with U.S. equities.  The move came in reaction to surprisingly negative data from the U.S., giving currency traders a reason to lose faith in America’s economic stabilization.  However, the downturn in the USD/JPY was by no means significant, exemplified by today’s recovery.  The ability for the uptrend to materialize into something substantial remains a question mark as before.  Our first tier uptrend was tight in the first place, so we set a new first tier uptrend line today.  That being said, the USD/JPY sure hasn’t shown confidence in a 100+ future.  The uptrend is very young, giving precedence to the longer-term downtrend still solidly intact.  However, don’t be fooled.  The fundamentals are still in place for a breakout in the USD/JPY.  All the currency pair needs is a true confirmation from the U.S. that we have seen the worst of the economic crisis.  Therefore, we expect to see the continuation of consolidation in the USD/JPY as investors await more earnings from financials and results from the highly anticipated stress tests.  Critical levels on each side are our 101.44 resistance and 97.11 support.  Fundamentally, our 99.79 support turns resistance while we maintain our resistances of 100.28, 100.71, 101.44, and 101.98.  To the downside, we hold our supports of 99.06, 98.16, 97.59, and 97.11 with fresh bottom-end of 96.33.  The USD/JPY is currently exchanging at 99.10.

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

After a spectacular rally from the lows seen last month, the S&P appears to be running into overhead resistance.

Is this the pause that refreshes, or is this the pause that reverses the market back towards the lows?

I have said for some time that I was not that confident that this rally would continue as our long-term “Trade Triangle” remained in a negative mode. In my new video I outline the key areas that I believe will shape this market in the coming weeks and months.

The video features our “Trade Triangle” technology as well as our Fibonacci tools. I will also remind you of a concept that has been around for a while, but one that you might not be aware of.

No matter what happens, you are going to see some extraordinary markets and some wonderful opportunities to make money in the next 6-9 months.

Some investors may be hoping for the best, but be prepared as we might see another dive.
I highly recommend students of the market to take a few minutes and watch my latest video. Even if you’re a seasoned pro you may find what you see interesting and therefore profitable.

As always, my video come is complimentary with no strings attached.

See the New Video Here.

All the best,

Adam Hewison

President, INO.com
Co-creator, MarketClub

Source: ForexYard

Many traders are looking towards Wall Street’s reported earnings before placing their forex trades. The Street has been influencing currency moves and with the announcement of some of the world’s largest financial firm’s first quarter results this week, currencies may find direction based on their profits and losses.

Economic News

USD – Nerves on Wall Street Continue to Move Currencies

The U.S. currency continues to strengthen given the recent demand for riskier currencies. Falls in equity markets have driven traders to reduce their positions in riskier, higher yielding currencies. Many of the uncertainties in the currency markets are due to earnings season on Wall Street.

This week brings quarterly results from a number of financial companies, including U.S banks Citigroup and JP Morgan Chase. And the markets are waiting for the U.S. corporate earnings season to get into full swing. Some market players think this week’s reports could show signs that the worst of the financial crisis is over, which means that the USD may still surpass its major counterparts before the end of this trading week.

Last week, the USD rose against the Yen, buoyed by a rally in U.S. shares after positive earnings guidance from U.S. bank Wells Fargo. Analysts’ expecting that if U.S. earnings results show signs that the U.S. is pulling away from the worst of the economic downturn, risk appetite is expected to grow, putting more pressure on the Yen and also providing a lift to the Dollar.

EUR – The European Currency Rebounds against the Dollar

In yesterday’s trading the European currency extended its gains vs. the greenback, rising 1.4% to $1.3363. The British pound also took more ground, rising 1.3% to $1.4842. Against the Japanese yen however, the EUR declined the most in a week before Germany’s Federal Statistics Office releases its report on wholesale prices Wednesday, supporting the case for the region’s central bank to cut Interest Rates. The price figure is expected to slump 7.1% in March from a year earlier.

However, Europe’s single currency may weaken during the next few days on concern European Central Bank (ECB) officials this week will signal they may keep lowering rates to support growth. ECB President Jean-Claude Trichet already said last week the central bank is studying unorthodox ways of boosting the European economy. Some in the market continue to hold the view that the EUR remains laden by expectations of another Rate cut and the prospect of unconventional monetary easing, and the EUR is likely to halt its gains versus the Dollar, in the nearest future.

JPY – Carry Trade has is Again a Trader’s Favorite

The Yen has begun to strengthen from a 5-month low versus the Dollar last week as fears of a prolonged recession are driving traders to the Yen. The currency is often seen as safe haven plays in the forex market. Traders may have been a bit premature in driving up higher yielding currencies as global equity markets went on a tear the past month and a half. There has been very little concrete evidence of a sustained economic turnaround. This in turn has once again provided a boost to the Yen as a safe haven currency.

The return of the carry trade is again becoming widely popular. Japanese Interest rates once again are in the basement and there are other nations providing significantly higher rates of returns. Due to the weak Yen, many traders have jumped back into this type of strategy and it has provided healthy returns the past two months. This could be a signal of the global economy returning to the previous economic cycle.

Oil – Crude Oil Inventories to be Released Today

The commodity is still recovering from its 5% plunge in price after the International Energy Agency slashed its forecast for Crude demand in 2009. The Agency predicts a drop of 2.8% in global demand for Oil. Crude Oil has not been able to steadily trade above the $51 price level, though Oil has risen over 10% this year. It appears traders are waiting for signs of a significant economic recovery. Many analysts have claimed a bottom has been reached in Crude Oil trading, though that remains to be seen. A fair value for Crude Oil may be $45.

Today the market is anticipating the release of the weekly U.S. Crude Oil inventories report from the Energy Information Agency. Traders are expecting Crude stocks to rise by 2 million barrels this past week. A reading above this mark may help to send the price of Crude lower, perhaps below the $50 mark once again.

Technical News

EUR/USD

The typical range trading on the 4-hour chart continues. Both the daily RSI and Slow Stochastic are floating in neutral territory. However, the pair currently sits near the bottom border of the hourly 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.

GBP/USD

The price of this pair appears to be floating in the over-bought territory on the daily 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.

USD/JPY

The daily chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, the 4-hour 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 pair has been range-trading for a while now, with no specific direction. The Daily chart’s Slow Stochastic providing us with mixed signals. All oscillators on the 4 hour chart do not provide a clear direction as well. Waiting for a clearer sign on the hourlies might be a good strategy today.

The Wild Card – Crude Oil

Oil prices are once again dropping, and a barrel of oil is currently traded around $49.26. And now, all oscillators on the 4-hour chart are giving bullish signals, indicating that oil prices might go up. This might give forex traders a great opportunity to enter 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.

By GCI Fx Research

€

The euro weakened vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3225 level and was capped around the US$ 1.3380 level.  Technically, today’s intraday low was just above the 23.6% retracement of the move from $1.6040 to $1.2330.  The common currency retraced some of its intraday losses after the release of U.S. March producer price inflation data that saw the headline index decline 1.2% m/m after climbed 0.1% in February.  The core PPI index fell to 0.0% m/m from +0.2% in February. These data indicate pricing power at the factory gates remains quite weak, particularly with the headline index off 3.5% y/y.  Other data released today saw March retail sales decline 1.1% m/m, defying expectations of a 0.3% increase, while February’s tally was upwardly revised to +0.3%.  Traders await remarks from President Obama and Federal Reserve Chairman Bernanke during the North American session.  Goldman Sachs’s confirmation that it earned about US$ 1.6 billion in profit in Q1 was received in a lukewarm fashion by dealers.  Attention now focuses on Citigroup’s, JPMorgan Chase’s, and Morgan Stanley’s earnings. In eurozone news, the German government will decide on 21 April whether or not it will establish a “bad bank” to absorb banks’ illiquid assets to restart lending activity and help remove toxic assets from banks’ balance sheets.  Data released in France saw the February current account deficit narrow to €2.2 billion.  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 ¥98.95 level and was capped around the ¥100.40 level.  The yen was stronger across the board as traders reduced their risk appetites overnight despite a decent earnings report from Goldman Sachs.  Traders are still slow to add riskier asset plays to their portfolio following yesterday’s strong indication the Obama administration is likely pushing General Motors to file for bankruptcy.  Rumours that Delphi may be forced to liquidate led to more yen demand.  The Nikkei 225 stock index lost 0.92% to close at ¥8,842.68.  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 ¥131.25 level and was capped around the ¥134.30 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥147.25 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥86.70 level.  The Chinese yuan depreciated vis-à-vis the U.S. dollar today as the greenback closed at CNY 6.8320 in the over-the-counter market, up from CNY 6.8318.

₤

The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.4930 level and was supported around the $1.4820 level.  Bank of England reported it wants to enhance payment and settlement systems so that it can further reduce systemic risk.  Traders are also examining possible fallout from the political row involving Prime Minister Brown and Labour.  Cable bids are cited around the US$ 1.4515 level.  The euro moved lower vis-à-vis the British pound as the single currency tested bids around the ₤0.8890 level and was capped around the ₤0.9005 level.

CHF

The Swiss franc depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1445 level and was supported around the CHF 1.1320 level.  Swiss National Bank allocated €13.2 billion in a euro/ Swiss franc swap today as part of its quantitative easing framework to weaken the franc.  U.S. dollar bids are cited around the CHF 1.1275 level.  The euro moved lower vis-à-vis the Swiss franc as the single currency tested bids around the CHF 1.5105 level while the British pound gained ground vis-à-vis the Swiss franc and tested offers around the CHF 1.7060 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.

U.S. Retail Sales decreased unexpectedly in March according to a report by the U.S. Commerce Department released today. Advance estimates of March retail sales showed that sales decreased by 1.1 percent to $344.4 billion from February. On an annual basis, retail sales have decreased by 9.4 percent from the March 2008 level. Market forecasts were expecting an increase of 0.3 percent for March following February’s revised increase of 0.3 percent.

March’s retail sales numbers were weighted down by a 5.9 percent decline in electronics & appliance store sales, a 2.2 percent decline in miscellaneous stores retailers and a 2.3 percent fall in motor vehicle & parts dealers. Other notable declines for the month were building material & supplies dealers, furniture & home furnishings stores, clothing & clothing accessories stores and nonstore retailers. Positive contributors to the retail sales data were food & beverage stores with a 0.5 percent increase and health & personal care stores with a 0.4 percent increase.

Retail sales excluding automobiles decreased by 0.9 percent in March following February’s revised 1.0 percent gain. The sales minus autos monthly decline also surpassed market forecasts that were expecting sales minus automobiles to register no change for the month.

Producer Prices fall after two months of increases.

The Producer Price Index, released in a separate report by the Department of Labor, fell more than expected in March as energy costs dropped and eased inflation on finished goods. Producer prices fell by 1.2 percent in the month of March following an increase of 0.1 percent in February and an increase of 0.8 percent in January. The annual rate of change for March showed that producer prices were 3.5 percent lower than the March of 2008 level following February’s annual rate registered a 1.3 percent decrease. Market forecasts were expecting monthly producer prices to show no change in March and the annual rate to register a 2.2 percent decline.

Helping to contribute to the lower ppi in March was the energy index which decreased by 5.5 percent for the month after increasing by 1.3 percent in February. Gasoline prices dropped by 13.1 percent in March after gaining by 8.7 percent in February while food prices declined by 0.7 percent for the month.

Core producer prices, excluding food and energy prices, showed no change in March following a rise of 0.2 percent in February. On an annual basis, core producer prices advanced by 3.8 percent for March compared with an increase of 4.0 percent in February. Market forecasts were expecting a 0.1 percent gain in monthly core prices and a 4.0 percent annual increase.

Forex Market – US Dollar shows mixed results today.

The U.S. dollar has been mixed in forex trading today against the major currencies. The dollar has gained against the euro, Australian dollar, Swiss franc and New Zealand dollar while declining versus the Canadian dollar, British pound and the Japanese yen.

The euro has been falling versus the dollar after gaining mightily yesterday. The EUR/USD has declined from today’s 1.3328 opening at 00:00GMT to trading at approximately 1.3273 in the afternoon of the US trading session at 1:08pm ET according to currency data from Oanda.

The British pound has gained today versus the American currency as the GBP/USD has gone from 1.4851 to trading at 1.4888 dollars per pound. The dollar has also declined against the Japanese yen today as the USD/JPY has fallen from its 99.84 opening to trading at 98.83.

The dollar has fallen against the Canadian dollar after the USD/CAD’s opening at 1.2217 earlier today to trading later at 1.2130. Meanwhile, the USD has advanced against the Swiss franc from 1.1355 to trading at 1.1386. The Australian dollar has lost ground versus the USD as the AUD/USD trades at 0.7250 after opening today at 0.7282 while the New Zealand dollar has declined versus the USD and trades at 0.5838 after opening at 0.5899.

USD/JPY Chart – The US Dollar declining versus the Japanese Yen in forex trading action and falling sharply under the 100 yen to the dollar level today(Hourly Chart).

By Fast Brokers

Crude futures have experienced some eye-popping volatility over the last couple sessions, fluttering between our trend lines.  The indecisive movements reflect investor uncertainty concerning the economy as a whole.  While investors are not willing to give up on the uptrend, the downtrend is still sitting in the driver’s seat with investors unwilling to commit above our 2nd tier downtrend line.  The highly psychological $50/bbl area continues to play a lead role as prices are gravitating here.  Naturally, the key driving force behind the demand structure of crude is the overall health of the U.S. economy.  Energy investors are waiting to see if the recovery in U.S. equities is legitimate before extending the rally in crude beyond the present fundamental hindrances.  Investors are now being bombarded by news from the supply side after OPEC stayed quiet for quite some time.  Crude imports are rising considerably from Russia and Brazil, likely an aftereffect from Obama improving upon diplomatic relations with the two nations.  OPEC is vocalizing its discontent over the development since a rise in imports from Russia and Brazil dilute their massive production cuts implemented over the last 6 months.  The new sources of crude are placing a new downward pressure on the price and could have a noticeable impact for the time being.  We wouldn’t be surprised to see a more aggressive reaction from OPEC if the trend continues with the possibility of more production cuts on the table.  Despite the developments supply-wise, crude futures should still maintain a positive correlation with the S&P futures, though they may be less inclined to fully participate in any large movements to the upside.  We may not have to worry about that today since the economic data disappointed analysts this morning, showing a surprising decline in PPI and Retail Sales.  These numbers raise a red flag, cautioning that the recent improvement in consumer sentiment could be short-lived, placing more downward pressure on crude futures.  Fundamentally, we find resistances of $50.39/bbl, $51.03/bbl, $51.59/bbl, $52.02/bbl, and $52.49/bbl.  To the downside, we see supports of $49.81/bbl, $49.28/bbl, $48.87/bbl, $48.37/bbl, and $47.79/bbl.  Crude futures are presently trading at $49.98/bbl.

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

Though yesterday’s rally in the EUR/USD made some interesting strides by edging above 4/9 highs and our 1st tier downtrend line, investors are taking profits Tuesday.  The volume was still light yesterday due to the Easter holiday and a lack of economic data.  However, we could see currencies come back to life today with the U.S. releasing retail sales and PPI.  Even though the EUR/GBP could experience more near-term losses, it appears the currency pair should find some support soon.  Therefore, the EUR/USD may experience considerable strength around our 1st tier uptrend line and 1.3192 support, if the currency pair should reach this level.  We expect the EUR/USD to remain in this volatile consolidation phase for the near-term as investors try to figure out exactly where the global economy stands.  The Euro is still at a disadvantage with the ECB taking a vague monetary stance, and uncertainty hardly ever yields a positive performance in price. Will the ECB cut its benchmark further or initiate unorthodox liquidity processes?  Nobody knows at this point.  Since the economic data surfacing from the EU over the past month has been mixed, the ECB will likely wait to see if the signs of improvement are only a bounce or a real turn in events.  We’ll witness a couple inflection points shortly, including our 1st tier uptrend and downtrend lines and our 2nd tier uptrend and downtrend lines.  Therefore, the EUR/USD is signaling that it could reach a directional pivot point soon.  Fundamentally, we maintain our supports of 1.3271, 1.3223, 1.3192, 1.3162, and 1.3126.  To the topside, we hold our resistances of 1.3323, 1.3351, 1.3375, 1.3413, and1.3462.  The 1.35 area acts a psychological barrier again with 1.30 serving as a key psychological cushion.  The EUR/USD is currently exchanging at 1.3277.

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 making vast strides to the upside, positioning itself for a breakout opportunity as it continues to bask in the glory of this month’s all-around positive economic data from Britain.  The GBP/USD is battling with our 2nd tier uptrend line as we speak.  If the currency pair can climb above April and February highs we could witness some large near-term gains as it looks to tackle the highly psychological 1.50 level.  The relative strength of the Pound is reflected in the freefall of the EUR/GBP.  However, we wouldn’t be surprised to see the EUR/GBP find some solid near-term support, meaning that if the GBP/USD does break out, the rally could experience some profit-taking relatively quickly.  That being said, Britain only has two medium-weight economic releases on slate for this week, meaning that Cable should have little news to deflect its rise.  The only development fundamentally reversing the Cable’s rally in the near-term would be a sharp downturn in U.S. equities, so keep a close eye on the S&P futures.  Fundamentally, we maintain resistance of 1.4946 with additional resistances hanging at 1.4988, 1.5028, 1.5080 and 1.5121.  The 1.50 level serves as a key psychological barrier while the 1.45 area acts as a psychological cushion. To the downside, we find supports of 1.4883, 1.4834, 1.4770, 1.4730 and 1.4676.   The GBP/USD is currently exchanging at 1.4902.

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 still stuck around 100 as the highly-psychological level is proving to be as difficult to overcome as investors could have anticipated.  The surprisingly positive Core Machinery Orders coupled with Aso’s aggressive stimulus package is countering the recent strength in America’s economy.  Therefore, the USD/JPY finds itself at an important crossroads as our uptrend line reaches an inflection point with our 3rd tier downtrend line.  The importance of the moment is difficult to express since all of this year’s progress made by the USD/JPY to tackle 100 is reaching a climactic point.  Will the uptrend prevail or fall under the sword of the monstrous downtrend?  The continuation of the uptrend largely depends on a recovery in the U.S. economy since the carry trade is unwound.  Investors will be taking a close look at corporate earnings from the U.S. while anxiously awaiting to see if the recent improvement in economic data continues.  Fundamentally, we maintain our resistances of 100.28, 100.71, 101.44, 101.98, and 102.50.  To the downside, we hold our supports of 99.79, 99.06, 98.16, 97.59, and 97.11.  The USD/JPY is currently exchanging at 99.79.

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

Liquidity was tight during yesterday’s trading as holidays in Western Europe and the States reduced the number of market participants. This helped to exaggerate movements in the currency market. This type of trading yesterday helped the EUR continue to rise versus the Dollar.

Economic News

USD – Gloomy Stock Market Puts Downward Pressure on the USD

In regards to the light news days traders have been experiencing recently, most active investors have tuned into the status of the stock market, which has seen a light downward slide lately. As a result, the USD also slid partially against its major currency counterparts. Ending the day down at 1.3316 against the EUR and 1.4831 against the British Pound, the Dollar sustained some moderate losses. However, throughout today’s early trading hours the USD appeared to be recovering some of these losses. We could potentially see a rebound throughout the day.

With a relatively heavier news day expected, the USD could experience much more volatility throughout today’s trading. With significant data on U.S. retail sales and inflationary figures for producers, the U.S. economy will likely be the primary driving force in trading later on. Towards the end of the day, Federal Reserve Board Chairman Ben Bernanke is also due to speak at Morehouse College in Atlanta regarding the recent financial crisis. His appearances tend to move the market as traders speculate about future monetary policy decisions based on the subtle clues in his speeches.

The stock market has been having a relatively stronger impact on the value of currencies lately. This is mainly because many eyes are watching economic indicators very closely in anticipation of signs that the economy is turning a corner and beginning to recover. This hopeful optimism may help the economy recover faster as speculation becomes a strong player in the growth of markets. If that is indeed the case, the USD may begin to strengthen in the short-run, but weaken overall as its safe-haven status is diminished.

EUR – EUR Not Driving its Own Market; Traders Look to the USD

The EUR appeared to be yesterday’s losing currency pair, as it lost ground to every major counterpart except the USD. Trading up against the Dollar at 1.3316 at the end of yesterday’s trading session, the EUR has now actually lost most of what it gained and is currently riding a downward slope against the greenback. Dropping back to 0.8970 against the Pound after making short-term gains, and sinking against the Yen to 132.70, the EUR’s recent losses highlight the rising weakness in the Euro-Zone’s regional economy.

With no news expected out of the Euro-Zone, the 16-nation currency is not expected to out-perform any of its currency rivals in the hours ahead. In fact, with almost zero news being released from the European Monetary Union this week, the driving force behind the EUR’s pairs will most likely be the GBP and USD. With a relatively heavy news week for the USD, it has been forecast by many that the USD will be this week’s market mover.

With an already low confidence level in the European economic system, traders have begun to look for weakness in other currency pairs when deciding when to enter a position on the EUR. Without a shock to the system in the form of quantitative easing, a reduced interest rate, or economic stimulus, the EUR will likely be a follower instead of a leader as other world currencies dictate its direction and momentum. Traders should look to the Dollar this week for the direction of the market.

JPY – JPY Posts Losses Throughout the Day; Recovers in Early Trading

The JPY has made a strong rebound over the past few hours. After steadily losing ground to most of its currency rivals, the Japanese Yen is now beginning to regain its losses from a correction in the market. Ending the day at 100.33 against the USD, the Yen is now trading at 99.67. Also, dropping as low as 134.21 against the EUR, the JPY is currently trading at 132.80 against this 16-nation currency in today’s early trading hours, and there doesn’t appear to be any signs of stopping this recent movement..

As many equities and various stocks feel the pinch from recent banking and economic data, traditional safe havens have gotten slightly more relevant. However, yesterday’s lack of data highlighted the growing weakness in world stock markets and traditional safe havens apparently responded with downward trends as well. As a correction to this recent downward movement, the Yen has started its latest rebound and may continue to do so throughout the trading day

OIL – The Price of Crude Oil Flirts with the $50 Price Level

The price of Crude Oil has appeared to be flirting with the $50-a-barrel mark over the previous week. With the future strength of the USD coming under scrutiny by investors lately, the price of Crude could potentially rise back towards $55 in the days ahead. However, with the latest batch of banking data, the USD could be regaining safe-haven status as investors flee the stock market. This would then push the price of oil back towards $48 a barrel.

Without any signs of a clear direction, the flirtation with the $50 price level is likely to continue. In the absence of any significant news from the Organization of Petroleum Exporting Countries (OPEC), low confidence in the stock market, and a sinking feeling about the value of the Dollar, Crude Oil could be experiencing some unpredictable volatility over the coming week, but within a relatively clear price range. Traders have a great opportunity to jump into this market today and capture these impending price movements for a healthy profit.

Technical News

EUR/USD

The 4-hour chart is showing considerable bearish signals as the bullish trend is beginning to reverse. The Relative Strength Index currently has the price trading in the overbought zone and the Slow Stochastic Oscillator shows a bearish cross has formed. The pair has also begun to reverse from the Bollinger Band’s upper border with the potential to reach the lower border. This could be a good opportunity for traders to go short today on this pair.

GBP/USD

Early this morning the pair climbed to a daily high of 1.4913 and could be ready for a reversal. The daily and 4-hour chart show the pair trading in the over bought zone on the RSI. The 4-hour chart also displays a bearish cross on the Slow Stochastic Oscillator. This information could signal an imminent price decline. Going short with a tight stop may be the right move.

USD/JPY

A correction on the hourly chart could be fore coming as a price move has originated at the bottom border of the Bollinger Bands. This may signal a move from the lower border all the way to the other border. Going long with a tight stop may be a wise choice today.

USD/CHF

The recent downward correction may have pushed this pair into the over-sold territory on the RSI of the 4-hour chart, signaling an imminent upward correction. A bullish cross has also formed on the chart’s Slow Stochastic, signaling a correction to the sharp downward movement from this morning. Traders may want to be long on this pair today.

The Wild Card – GBP/JPY

The pair’s sustained upward movement has finally pushed its price into the over-bought territory on the 4-hour and daily chart’s RSI. Not only that, but there is a bearish cross which has formed on the 4-hour Slow Stochastic Oscillator. This information points to an imminent downward correction. Forex traders have the opportunity to wait for the downward breach and go short.

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.