InvestMacro FX

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.  Core Machinery Orders came in far above analyst expectations today, showing capital expenditure is improving in Japan due to dwindling inventories.  Core Machinery Orders are forward looking, so the positive release gives investors hope that the Japanese economy could be finding a bottom.  Aso is expected to announce a $150+ Billion stimulus package by the end of the week aimed at reviving the downtrodden economy.  These two developments are giving some strength to the Yen, delaying a possible breakout in the USD/JPY.  However, better than expected Trade Balance and Unemployment Claims releases from the U.S. today could help the cause for the bulls.  We expect the consolidation around 100 to continue until investors commit to a direction.  The currency pair is holding our tight uptrend line as our downtrend lines approach.  If the USD/JPY can brave through our next 3 downtrend lines, we could see some large near-term gains.    Fundamentally, our 100.28 support turns resistance while we maintain our resistances of 100.71, 101.44, 101.98, and 102.50.  To the downside, we hold our supports of 99.79, 99.06, 98.16, and 97.59 with fresh bottom-end resting at 97.11.  The USD/JPY is currently exchanging at 100.08.

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

We haven’t looked at the British Pound (GBP) lately, as it has been in its major swing to the downside. The question is, is the British pound ready for a comeback?

In our new video, I delve into the depths of the British Pound, and take you step-by-step into my thought process and why we’re looking at this market right now.

Whether you’re a newbie or experienced trader, I believe you will benefit from this video. In the video we give you specific levels that I’m watching, and target levels that we expect the British Pound could achieve if it breaks over one key psychological level.

As always this video is with our compliments and there is no need to register to watch.

Go to the Video here.

Enjoy and feel free to comment on our blog.

Enjoy the video.

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

Source: ForexYard

The U.S. and Japanese currencies are likely to keep drawing demand as investors stay away from higher-yielding currencies such as the AUD, analysts said. The Yen rallied against Sterling and the Australian and New Zealand dollars, which each fell roughly 1.5% against the Japanese currency.

Economic News

USD – Trader’s Flight to Safety Benefits the Dollar

The Dollar continues to show considerable strength over its currency rivals as financial worries have returned to the market. The 1st quarter earnings season has arrived and drops in equity markets are fueling renewed risk concerns which weigh on the currency market, strengthening risk-averse currencies such as the US Dollar. It is apparent that the desire for riskier, higher yielding currencies has waned given the decreased risk appetite in the forex market. As risk sentiment falls, the Dollar may be the primary beneficiary.

One event seen as triggering the flight to safety was the announcement that the International Monetary Fund (IMF) is increasing its forecast for bad debt held by global financial firms to an astonishing $4 trillion. This announcement has been driving the trading of the USD the past few days as there has been a lack of economic data during the first part of the week.

However, big fundamental indicators will be released today that could swing the markets against the Dollar. At 12:30pm GMT both the U.S. Trade Balance and weekly unemployment claims are due out. A deficit of $36.7 billion is forecasted for the month of month of February. Traders may look for this reading to be worse than the forecasted value as the month of Feb may have been one of the most trying months in U.S. economic history. Also, the US Unemployment Claims figures could be worse as well. U.S. unemployment is currently at a 25-year high and job losses have yet to show a sign of slowing. Traders may be able to profit by the market’s pessimism. Being short on the Dollar may be the right move with the release of these two economic indicators today.

EUR – EUR Weakens As Risk Aversion Continues

The EUR has been declining this week against its major pairs with no sign of the selling to cease. The depreciation of the EUR appears to be largely due to perceived higher risk in the market this week after consecutive losses in equity markets. Profit taking has also been seen from the previous week’s trading sessions. The EUR appreciated 5.5% against the JPY last week as traders ramped up their aggressive positions in light of reduced risk aversion. However, those gains have largely dissipated as greater risk is once again the topic in financial markets.

Risk aversion may continue to be present in the market, so long as equities continue to slide. The approaching earnings season has traders weary of placing too much of their capital in riskier currencies, such as the EUR. Rightfully so, there is quite a bit of uncertainty out there. One catalyst for the EUR may be a potential bankruptcy of the American car manufacturer, General Motors.

Some economists are predicting a further slide in the EUR. A fundamental analysis shows that the European Central Bank may be running out of options to fight the economic recession in the Euro-Zone economy. An absence of further capabilities by the ECB could set the European economy behind its peers for a sustained recovery.

JPY – Japanese Yen Ends Up as Beneficiary in Foreign Exchange Trading

The Japanese yen rose for another day against its counterparts as the currency has been more sensitive than the Dollar to shifts in investors’ willingness to take on risk. The Japanese currency’s gains are outpacing other currencies during financial turmoil and its losses usually marked when sentiment improves.

As expected, the Bank of Japan’s (BOJ) policy board on Tuesday took additional measures to help the flagging economy, expanding collateral that can be used for loans. In addition to the low interest rate loans it now offers, the bank could also start purchasing corporate bonds and providing loan guarantees, the report said.
The latest measures will put more emphasis on midsize firms, which have fallen outside the scope of the assistance. The BOJ warned, however, that economic conditions will continue to deteriorate. On Friday, Japan is expected to unveil a fresh economic stimulus package, valued at more than 2% of the country’s Gross Domestic Product (GDP).

Crude Oil – Oil Prices Decline Amid Economic Contraction

Crude Oil prices are likely to decline even further, as the world’s top energy forecasters are likely in the coming days to reduce again their projections for world Oil consumption this year. The 3 top forecasters; the International Energy Agency (IEA), the Organization of the Petroleum Exporting Countries and the U.S. Energy Information Administration (EIA) will publish new oil supply and demand estimates between April 10 and 15.

Their forecasts are followed closely by investors in Oil markets, which have seen prices tumble to around $50 per barrel this week from highs of almost $150 in July last year. World Oil demand is falling for the first time in a generation as the deep global downturn closes factories and brings unemployment to the world’s largest economies. Yet, many analysts believe that Crude prices may recover later this year since U.S economic data suggest gasoline demand is rising as pump prices have halved over the last 9 months.

Technical News

EUR/USD

The typical range trading on the 4-hour chart continues. Both the hourly RSI and Slow Stochastic are 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.

GBP/USD

Narrow range trading continues as the pair did not make a significant move in either direction, and is currently traded around the 1.4757 level. However, there is a fresh bearish cross forming on the hourly chart’s Slow Stochastic indicating a bearish correction might take place in the nearest future. In that case traders are advised to swing in after the breach takes place.

USD/JPY

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 hourly chart’s Momentum oscillator also supports this notion. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

USD/CHF

The bullish trend is loosing its steam and the pair seems to consolidate around the 1.1475 level. The 4 hour chart’s RSI is already floating in an overbought territory suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

The Wild Card – Silver

Silver prices have dropped significantly in the last two weeks and peaked at $12.30 an ounce. However, on the daily chart RSI is floating in an oversold territory suggests that a bullish correction is impending. This might be a great opportunity for forex traders to enter the trend at a very early stage.

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.

Housing Starts statistics released out of Canada today increased more than expected in March according to a report by the Canada Mortgage and Housing Corporation (CMHC).  Canadian housing starts rose by 13.7 percent in March to an annual rate of 154,700 units. March’s data follows an annual rate of 136,100 units in February and surpassed market forecasts expecting housing starts to fall to an annual rate of 130,000.

Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre commented in the report on the real estate market saying, “Higher multiple starts in Ontario and Quebec were the main contributors to the rise in new construction activity in March,” and that, “While the multiples segment experienced the largest increase, the overall boost in starts was broad based, encompassing the singles segment as well.”

Contributing to the increased housing starts data for March was a 17 percent gain of housing starts in urban areas.  Single housing starts in urban areas rose a modest 1.3 percent while multiple start properties jumped by 28.3 percent for the month. The bulk of the rise in urban starts were seen in Ontario and Quebec with increases of 35 percent and 23.3 percent, respectively.  Declines in urban starts were registered in British Columbia(-17.3%), Atlantic Canada(-7.9%) and Prairies(-7.5%).

Canadian Loonie mixed in currency trading today.

The Canadian loonie dollar has been mixed today in the currency trading markets against most of the major currencies.  The loonie has gained versus the US dollar, Japanese yen and British pound while falling to the euro and New Zealand dollar and trading almost unchanged versus the Australian dollar.

The US dollar has fallen today to trading under 1.2400 loonie per usd today after opening today’s trading at the exchange rate of 1.2420. The USD/CAD pair has declined today to trading at 1.2363 at 4:54pm EST according to currency data from Oanda.

The euro has gained ground against the loonie as the EUR/CAD trades at 1.6412 after opening the day at 1.6393.  The Canadian dollar has gained ground on the Japanese yen as the CAD/JPY has increased from its 80.51 opening to trading at 80.71 later today.

The British pound has fallen today versus the loonie as the GBP/CAD currency pair trades at 1.8191 after opening the day at 1.8250.  The New Zealand dollar has climbed against the loonie as the NZD/CAD trades at 0.7167 from 0.7112 and the Australian dollar trades right around today’s opening exchange rate of 0.8779.

USD/CAD Chart – The US Dollar declining versus the Canadian Dollar today below the 1.2400 level.

By GCI Fx Research

€

The euro came off vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3145 level and was capped around the US$ 1.3305 level.  Minutes from the Federal Open Market Committee’s meeting that concluded on 18 March wer released in which the FOMC agreed on “substantial purchases of longer-term assets” and pessimisitcally said “further employment cutbacks” were expected.  Some Fed officials saw inflation “below desirable levels” and Fed staff now see gross domestic product “expanding slowly” in 2010 with GDP growth “flattening out” in H2 2009.  Fed officials said the economy is worse than thet expected and said there is a downside risk to the “already weak” economic outlook including more pressure on U.S. financial institutions.  Data released in the U.S. today saw February wholesale inventories decline more than expected, off 1.5% m/m and 1.7% y/y.  In eurozone news, German February manufacturing orders fell 3.5% m/m and 38.2% y/y.  The European Commission today said it plans to raise the ceiling on its loan facility to non-eurozone countries to €50 billion from the existing €25 billion level.  European Central Bank member Noyer said the French economy will improve at the beginning of 2010.  Also, German factory exports slumped 23.1% y/y.  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 ¥99.30 level and was capped around the ¥100.85 level.  Data released in Japan overnight saw the February current account surplus decline to 55.6% y/y to ¥1.12 trillion.  These data underscore the tremendous decline in Japan’s foreign trade position over the past several months on account of the yen’s relative strength and the decline in global final private demand.  Other data released today saw March corporate bankruptcy cases up 7.9% y/y.  The Nikkei 225 stock index lost 2.69% to close at ¥8,595.01.  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 ¥130.95 level and was capped around the ¥133.75 level.  The British pound moved lower vis-à-vis the yen as sterling tested offers around the ¥145.70 level while the Swiss franc moved lower vis-à-vis the yen and tested offers around the ¥86.45 level.  The Chinese yuan appreciated vis-à-vis the U.S. dollar today as the greenback closed at CNY 6.8320 in the over-the-counter market, down from CNY 6.8361.

₤

The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.4635 level and was capped around the $1.4745 level.  Data released in the U.K. today saw the March BRC shop price index climb 2.0% y/y from 1.9% y/y in February.  Also, Nationwide March consumer confidence slid to 41 from 43 in February.  Cable bids are cited around the US$ 1.4515 level.  The euro came off vis-à-vis the British pound as the single currency tested offers around the ₤0.9050 level and was supported around the ₤0.8955 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 EUR/USD is strengthening after yesterday’s large losses in the wake of a better than expected trade balance number out of Germany coupled with encouraging German factory orders data.  Germany’s trade balance seems to be bottoming out, indicating stabilization in its export industry.  Though Germany’s factory orders data came in below analyst expectations, the number shows a vast improvement from 2009’s previous releases.  Germany and France are the heavy-weights in the EU economically, so signs of improvement in German production is welcoming news for a beleaguered EUR/USD.  The EUR/USD has caught the brunt of the pullback in U.S. equities since Trichet and the ECB offered little certainty concerning future monetary policy shocks.  The positive data is allowing the EUR/USD to rally from oversold conditions as the S&P futures find strength in their key psychological 800 level.  Consequently, the currency pair has managed to stay above March 30 lows and is propelling from our 1st tier uptrend line.  As a result, the uptrend has been saved, for now.  We could see a nice pop in the EUR/USD as our trend lines collide, signifying the uncertainty prevalent in the marketplace.  However, the currency pair may wait for U.S. equities to commit to an uptrend or crash back into their downtrend before it makes another real directional move.  The heightened volatility we are witnessing stems from the Federal Reserve’s quantitative easing announcement, and we don’t expect the wild ride to slow any time soon.  Fundamentally, we maintain our supports of 1.3223, 1.3192, 1.3162, 1.3126 and 1.3088.  To the topside, we hold our resistances of 1.3271, 1.3323, 1.3351, 1.3375 and 1.3413.  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 1.3245.

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 continues to show relative strength on the back of surprisingly positive data surfacing from Britain over the past couple weeks.  The GBP/USD kept its cool yesterday despite the broad selloff in U.S. equities and the Cable is running with the EUR/USD and U.S. equities Wednesday morning.  We expect to see the Cable’s strength continue as long as Britain’s data outperforms and its major financial institutions stay out of the headlines.  If U.S. equities and the EUR/USD head north today, the GBP/USD should follow.  On the other hand, if U.S. equities selloff again, we may see the Cable hold up once more.  However, we can’t forget the importance of the financial industry to Britain’s economy.  Therefore, if U.S. banks hit another roadblock, the GBP/USD may have no choice but to head lower.  Speculation set aside, the Cable is in great shape for the time being.  It sits comfortably above our 1st tie uptrend line with no downtrend line in sight.  On the other hand, the failure of the GBP/USD to eclipse February highs and 1.50 is a cause for concern, and we’ll keep this in mind.  If the Cable can climb back above March highs today we could see a nice short-term pop.  Even though Britain is quite on the news front today, the Pound could come alive tomorrow with a PPI release coupled with a BOE rate decision.  Analysts are expecting the BOE to hold the benchmark rate at .50%.  Fundamentally, we maintain resistance of 1.4730 with additional resistances hanging at 1.4770, 1.4834, 1.4883 and 1.4946.  The 1.50 level serves as a key psychological barrier while the 1.45 area acts as a psychological cushion. To the downside, we hold our supports of 1.4676, 1.4612, 1.4571, 1.4538 and 1.4484.   The GBP/USD is currently exchanging at 1.4702.

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 wrestling with the almighty 100 level again today after briefly dropping below.  The USD/JPY strengthened slightly after Japan released a better than excepted trade balance.  However, the optimism is faint since a record decline in imports is responsible for the improvement.  Therefore, consumers are tightening their budgets as the economic downturn picks up steam.  Japan continues to be the hardest hit in the global economic crisis.  Export demand has been cut in half with consumers world-wide losing their taste for durable goods.  Though the recent rally in the USD/JPY does provide some relief for the Japanese economy, the currency pair is still trading 20% below June 2007 levels.  However, a stabilizing American economy could help push the USD/JPY higher since the currency pair is being valued by the comparative performance of both economies.  That being said, the USD/JPY has three more downtrend lines to push through before it can yield substantial gains.  100 will continue to be a battle zone as U.S. equities struggle with their own demons.  If U.S. equities make another leg down, we would not be surprised to see the USD/JPY follow suit.  Japan will release Core Machinery Orders tonight.  The data is forward looking since corporate capital expenditure normally signifies expansion.  Analysts are expecting a decline of -6.8%.  Fundamentally, our 100.28 support turns resistance while we maintain our resistances of 100.71, 101.44, 101.98, and 102.50.  To the downside, we hold our supports of 99.79, 99.06, 98.16, and 97.59 with fresh bottom-end resting at 97.11.  The USD/JPY is currently exchanging at 99.99.

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

The European single currency came crashing on Tuesday after data showed the Euro-Zone economy recorded its deepest ever quarterly fall in the 4-quarter of 2008. As a result, the currency market moved back to the U.S currency after optimism regarding the European economy faded. The USD which is seen as a safer bet than others currencies in times of market stress will likely keep drawing demand as investors stay away from riskier assets.

Economic News

USD – USD Regains Lost Momentum from Under-Performing Stock Market

The USD has begun a moderate rally these past two days, starting from as high as 1.3575 against the EUR, the greenback is now trading near the 1.3175 price level. An even sharper price rally began this morning during the early trading hours when the release of poor stock data emerged from Wall Street. The negative economic outlook for first quarter stock performance has many traders returning to their safe-haven investments – namely, the U.S. Dollar.

After witnessing a sharp 70 point drop, the EUR/USD began to stabilize while maintaining its downward posture. Against the GBP, the greenback made similar gains, rising from 1.4950 yesterday to as high as 1.4682 in today’s early hours. Surprisingly, the USD saw no significant change in value versus the Japanese Yen, which may lend strength to the notion that the JPY is also being picked up as a potential safe-haven. So long as stocks and other equities continue to under-perform, due to the weakening global economy and rising metal prices, the USD may regain its recently diminished safe-haven status and return to levels not seen in over two weeks, perhaps to the 1.3000 price by the day’s end.

Looking over the economic calendar may lend some insight into how the USD will perform through the second half of this week. The ever-increasingly important report on Crude Oil Inventories is due to be released later today. If inventories continue growing it could signal a further lack of real growth in the economy and continue to push the USD higher throughout its pairs and crosses. On Thursday, of course, we will also see two highly important data releases: the US Trade Balance report and unemployment figures. Both are due to be released tomorrow at 12:30 GMT and will likely carry a heavy impact on the value of the Dollar.

EUR – EUR’s Recent Depreciation May Not End This Week

The EUR has apparently taken a hit from the recent rally in the U.S. Dollar, and not just against the USD. Dropping against all of its major currency rivals, the EUR is poised to suffer a significant loss through the rest of the trading week. Trading as high as 1.3575 against the USD this week, the EUR is currently losing momentum and may continue to drop from its current location to as low as 1.3000. The 16-nation currency is witnessing similar losses to the GBP and JPY as well.

Many analysts claim that the Euro-Zone’s primary currency is losing strength not because of an inherent weakness, but because the recent price rally was dependent on a resurgent stock market. As stocks and various other equities have experienced a sharp depreciation this week, the EUR’s rally has begun to implode in on itself. Unless stocks begin to rebound once more, the EUR will likely continue its depreciation as other currencies, such as the USD and JPY, regain their safe-haven trading status.

As negative data continues to emanate from the Euro-Zone’s regional economy, this consequential weakness for the EUR is apparently going to continue growing as well. The rest of this week’s economic news doesn’t appear to be offering any significant level of support either. With very few economic indicators being released during the second half of this week, there doesn’t appear to be much in the way of stopping this downward momentum in the various EUR trading pairs.

JPY – JPY Pares Losses and Stabilizes as it Regains Trader Confidence

Somewhat surprising for the market this week is a sudden resurgence of support for the JPY. While continuously losing ground to all of its currency rivals in recent days, the Yen now appears to be regaining a portion of its previous safe-haven strength. As world stock markets released poor 1st quarter data, the USD witnessed a sharp appreciation against all of its currency rivals, except for the JPY. Two of the possible explanations are either that the JPY was unaffected by a rallying USD, which seems unlikely, or the Yen also received a small boost from the search for safe-haven investments.

The island currency experienced a roughly 50 point increase against all of its major pairs and crosses, save the USD, which is currently trading at 99.70. With very little information being released regarding the Japanese economy this week, the news events surrounding world stock markets as well as the U.S. Dollar are likely going to lead the market through Friday and into next week. Because of the deterioration of world stock markets, there is a distinct possibility that low-yielding, safe-haven currencies, such as the USD and JPY, are going to begin regaining some of their recent losses through next week.

OIL – Demand for Crude Oil Continues to Fall; As Does its Price

It appears that the recent steps taken by the Organization of Petroleum Exporting Countries (OPEC) to increase the price of Crude Oil have begun to lose their momentum. After 4 consecutive days of losing value, the price of Crude Oil currently sits just below $48 a barrel and could retain this downward momentum. As economic growth continues to provide data which indicates a further slump in demand, and as the USD rallies from poor stock market data, Crude Oil may devalue even further through to next week.

As U.S. Crude Oil inventories have illustrated these past weeks, demand for this commodity has witnessed a solid deterioration. This inventories report, which is due to be released at 14:30 GMT today, may indeed indicate that demand has continued to fall and traders could be seeing a decreasing price of Crude Oil through Friday and into next week. A price of $46 may be seen by the week’s end.

Technical News

EUR/USD

There is a very distinct bearish channel forming on the hourly chart, as the pair is now floating in its lower section. In addition, all oscillators on the 4-hour chart are pointing down, suggesting that the downtrend might extend. Going short might be the right strategy today

GBP/USD

It seems that the Cable has limited its bullish correction after peaking at the 1.4941 level. And now, a bearish cross on the daily chart’s Slow Stochastic indicates that the general downtrend might extend. Going short seems to be the preferable choice today

USD/JPY

The daily chart shows that the pair is currently range-trading within a restricted price range. However, as the RSI on the daily chart has dropped beneath the 70 line, it appears that bearish momentum might be arising. Going short with tight stops could be the right choice today.

USD/CHF

Ever since bottoming at the 1.1253 level, the pair has entered a very strong bullish trend and is currently traded around the 1.1490 level. And now, a flag formation on the 4-hour chart suggests that the bullish move has more room to go.

The Wild Card – GOLD

Gold prices are in the midst of a very strong downtrend, and an ounce of gold is currently traded for about $887. The daily chart shows that the current price has dropped beneath the Bollinger Bands’ lower border, indicating that the bearish move is still quite strong. This might be a good opportunity for forex traders to join a very popular trend.

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 came off 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$ 1.3420 level.  U.K. newspaper The Times reported the International Monetary Fund may forecast that banks’ toxic debts could reach US$ 4 trillion globally.  European Central Bank member Stark critically said the Group of Twenty’s decision to increase the usage of Special Drawing Rights is like “creating helicopter money for the globe.” The ECB reiterate it is not changing its requirements for countries to start using the euro, contrary to an International Monetary Fund report that calls for changes that would allow Central and Eastern European countries to qualify for euro usage under different terms.  A compromise being discussed may allow Central and Eastern European countries’ bonds to be accepted as collateral by the ECB in exchange for euro liquidity.  Data released in the eurozone today saw Q4 2008 gross domestic product downwardly revised to -1.6% from the previous reading of -1.5%.  A joint survey from Germany’s Ifo and France’s INSEE said the eurozone economy could contract 1.9% q/q in Q1 2009.  In U.S. news, Federal Open Market Committee meeting minutes will be released tomorrow. 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 ¥99.85 level and was capped around the ¥101.10 level.  Bank of Japan’s Policy Board voted unanimously to keep interest rates unchanged at 0.1% so that the efficacy of previous monetary easing measures can be evaluated.  The central bank also kept its economic assessment unchanged for the month of April, repeating its statement that the economy “has deteriorated significantly” due to a “worsening in corporate profits and weakening domestic demand.”  Dealers are also awaiting details of the government’s proposed US$ 100 billion stimulus package that will be announced on Friday.  The Nikkei 225 stock index lost 0.28% to close at ¥8,832.85.  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 ¥132.20 level and was capped around the ¥135.55 level.  The British pound moved lower vis-à-vis the yen as sterling tested offers around the ¥145.80 level while the Swiss franc moved lower vis-à-vis the yen and tested offers around the ¥87.05 level.  The Chinese yuan depreciated vis-à-vis the U.S. dollar today as the greenback closed at CNY 6.8361 in the over-the-counter market, up from CNY 6.8343.

₤

The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.4580 level and was capped around the $1.4775 level.  Data released in the U.K. saw February manufacturing output decline for the twelfth consecutive month, off 0.9% m/m and 13.8% y/y.  Also, February industrial production was off 1% m/m and 12.5% y/y.  Cable bids are cited around the US$ 1.4515 level.  The euro came off vis-à-vis the British pound as the single currency tested bids around the ₤0.8990 level and was capped around the ₤0.9115 level.

Daily Market Commentary provided by GCI Financial Ltd.

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