InvestMacro FX

Source: ForexYard

The Dollar is likely to go volatile during and following the speech by the U.S. Federal Reserve Chairman Ben Bernanke today at 12:30 GMT. Meanwhile, forex traders are advised to take positions on trades, as a string of data releases coming out of Japan, Britain, and the Euro-Zone are likely to affect the greenback’s main currency crosses.

Economic News

USD – Dollar Advances on Deepening Global Recession

The Dollar rose against most of its major currency pairs on Monday. This comes about as falling global equity markets and economic deterioration in Japan and Europe, which are more serious than the slowdown in the U.S., have boosted safe-haven demand for the U.S currency. Nevertheless, the U.S. has also released gloomy economic data. Last Friday’s report showed that the U.S. unemployment rate rose to a high of 8.1% in February, as employers cut 651,000 jobs. This reveals that the U.S. has the highest unemployment rate since 1983. Analysts expected weak figures from the U.S. to lead market participants to take positions against the USD in Monday’s trading. However, in many respects, much the opposite has happened.

In late afternoon trading, the USD was up 0.4% against the Yen at 98.78, and ended yesterday’s session up over 90 pips at the 98.94 level. Against the EUR the Dollar fluctuated between gains and losses, finally by settling virtually unchanged at 1.2674. The Dollar’s biggest gains came against Sterling, which fell to 1.3740, the lowest level since Jan. 26th. The currency cross ended yesterday’s session with the GBP down nearly 300 pips against the greenback at the 1.3843 level.

Analysts predict that the Pound is likely to continue to remain vulnerable to the woes of the Britain’s financial sector as investors fear more gloom, despite massive government capital injections and guarantees. Meanwhile, the USD is likely to strengthen further against the JPY, as the deepening downturn in Japan has taken the lure off the Japanese currency as a safe-haven in recent weeks. A number of analysts hold the opinion that intensified worries over grim Japanese data might take the Dollar back within sight of the key 100 Yen mark.

Looking ahead to today, there are 2 data releases that may help determine the Dollar’s strength in late trading today. These are the IBD/TIPP Economic Optimism and Whole Inventories figures both at 14:00 GMT. The thing that is likely to impact the Dollar the most is U.S. Federal Reserve Chairman Ben Bernanke’s speech about the state of the U.S. economy at 12:30 GMT. Forex traders are also advised to follow economic news events coming out of the Euro-Zone, Japan, and Britain, as these are likely to help determine the Dollar’s main currency crosses by the end of today’s trading.

EUR – Pound Crashes to a 6 Week Low vs. the U.S Currency

The Pound dropped to a record low against the Dollar yesterday, and also weakened against the EUR on growing concerns about the outlook of the British banking sector.
The GBP was also hit as the Bank of England (BoE) this week will begin to implement its buying of 75 billion sterling worth of assets to boost the money supply, analysts said. The (BoE) said on March 5 that it plans to buy 75 billion pounds of gilts and corporate debt funded by new money in the next three months as it tries to bring down Interest Rates and pull the economy out of its first recession in 17 years.

The British currency fell 2% yesterday against the USD to $1.3843 from $1.4123. Against the EUR, it declined 1.8% to 0.9151 from 0.8970. It also fell 1.3% vs. the Yen to 137.03 from 1.3847. Worries amongst investors were intensified yesterday after Lloyds Banking Group; the biggest mortgage lender said over the weekend that the British government would get a stake of up to 77% in the bank after agreeing to underwrite 260 billion pounds of risky assets.

Market players expect the Sterling to weaken further, in line with medium-term monetary and fiscal realities. Therefore investors should buy the EUR against the Pound following the Bank of England’s decision. As the British Pound continues to persistently sell off on each and every negative news flow from British banks, it might drop vs. the USD to as low as the 1.3650 level in the coming days.

The EUR may also make losses against the Dollar, and trade at the $1.2500 by week’s end as European finance ministers resist doing more to boost their economies. This is even as the World Bank forecasts the biggest global recession since World War II. The European Central Bank (ECB) has already reduced its main refinancing Rate last week to 1.5%, and ECB President Jean-Claude Trichet stated at a press conference in Basel, Switzerland yesterday the world may be approaching a turning point, and that further measures taken by central banks and governments are likely to stimulate economic growth.

JPY – Yen Slides on Weakening Economy

The Yen fell broadly on Monday on speculation economic conditions in Japan are deteriorating due to the global recession, thus reducing the appeal of the Japanese currency. The JPY declined against most of its major currency pairs after a Cabinet Office report prediction showed that the leading index of business conditions fell to 77.4 in January from 80 in December. Japan fell into its first current account deficit in 13 years in January as the global recession crushed export demand and income from overseas investment. Making the situation worse, Japanese policy makers have been slow to respond to deteriorating economic conditions, denting investors’ confidence in the country’s ability to tackle the economic crisis.

The JPY dropped to 125.45 per EUR from 124.23 yesterday, and fell to 98.94 versus the Dollar from 98.02. Analysts say that the incoming data is likely to illustrate the vulnerability of the Japanese economy, and therefore the JPY is likely to remain weak, particularly as we head into end of the fiscal year. Also, the Yen is likely to weaken further since the Japanese authorities that a weak Yen is their intention. The Yen has slipped 11% since a 13 year peak against the Dollar in January as Japan’s economy grapples with diving exports and its worst recession of the postwar era. Due to Japan’s poor economic data, and the fact that the political situation remain uncertain, some investors predict a possibility of the JPY testing 100 level per Dollar very shortly.

OIL – Oil Prices Eye $50 a Barrel

Crude Oil prices jumped more than 3% to $47 a barrel yesterday on the news of Chinese vessels harassing a U.S. Navy ship in the South China Sea. The naval incident on Sunday, between the United States and China, the world’s top Oil consumers, has boosted geopolitical tensions, adding to the pressure of a possible deeper production cuts by the Organization of Petroleum Exporting Countries (OPEC). The OPEC cartel agreed on a series of deep output cuts last year in an effort to stem the fall in prices, and next meets on February 15 to set output policy again. The Organization has implemented a reduction in output of 4.2 million barrels a day since September, equivalent to about 5% of global Oil demand.

OPEC Secretary General Abdalla el-Badri said on Monday that Oil prices at about $40 a barrel are not suitable, because this price level would not guarantee investment in future capacity beyond 2013. He also stated that the producers’ group would study all options when ministers meet Sunday, though he declined to say whether a further production cut was being considered. Analysts forecast that in case OPEC decides to cut its production by 1 million barrels a day at its meeting, Crude Oil is likely to rise above $50 a barrel in the 2nd quarter of 2009.

Technical News

EUR/USD

A bearish cross has formed on the hourly chart, indicating a potential downward correction from the appreciation the pair has experienced today. The price of this pair also appears to be moving along the upper border of the daily chart’s Bollinger Bands, signaling downward pressure may be applied later on today. Going short with tight stops may be the right trade.

GBP/USD

The 4-hour chart shows a bullish cross has formed, indicating a potential upward correction. This is supported by the chart’s RSI which appears to be floating in the over-bought territory. Selling the pair may be the right play for short term traders. However the daily chart shows a violent breach of the lower Bollinger Band, signaling a possible upward movement. The daily chart also shows the pair trading in the oversold territory on the RSI. Traders who are bullish on the Pound may like this longer term strategy.

USD/JPY

After trading near the 99.00 resistance level, the pair is experiencing some downward pressure. A bearish cross has formed on the 4-hour chart’s Slow Stochastic oscillator. The chart also shows the pair trading in the overbought region on the RSI. This indicates the potential for a downward price correction. The trading strategy is also supported as the daily chart’s RSI showing the pair trading in the over bought region. Going short may be the right strategy for today.

USD/CHF

The pair is exhibiting strong short term bullish signals. The hourly chart shows both a bullish cross has formed on the Slow Stochastic and the pair is trading in the oversold region of the RSI. However, almost all other oscillators are stuck in neutral territory, signaling that this pair may be less volatile than expected. Going long with tight stops might be the right strategy today.

The Wild Card – EUR/GBP

We can see from the 4-hour chart that the pair may be oversold. The price of this pair appears to be floating in the over-bought territory on the chart’s RSI and there appears to be a bearish cross on the Slow Stochastic, indicating a downward correction may occur soon. The pair has also made a violent breach its upper Bollinger Band. This may be a good opportunity for forex traders to go short today.

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 Andrew Daigle

The Forex market, which is the largest exchange in the world, capitalizes upon certain trends to yield its traders profit. A popular Forex trading strategy used in profitable Forex trading is commonly referred to as a channel breakout.

Channels in Forex Trading – Channels are lines that are created on a chart to show the range in which a currency has been trading over a certain amount of time. They are extremely easy to produce. By looking at the chart over a time period, you simply draw a line connecting the relative high point trading prices, and another line below it connecting the relative low point trading prices. What you’ve done is produced a visualization of the trading range that has been occurring over the time period in question, for example six months.

Channel Breakout – When the price of a currency rises above the top channel line, this is an upwards channel break. Conversely, if the price of currency falls below the bottom channel line, this is a down side channel break. Channel breakouts can and do occur on the upside and downside. Through proper Forex training in technical analysis, anyone can use this method to develop a successful currency trading strategy.

It is important to construct the channels properly, as not every crossing of the lines becomes a true breakout. If the channel lines are made improperly, you often see trading outside of this range only to come back inside. That’s why it is very important before anyone starts Forex trading to complete a thorough Forex education

Managing Forex Channels Profitably – Once you get the knack of channels, you can start making significant profits. The important thing is to structure your trades with proper stops so that if you do get a false breakout signal, you have an acceptable loss or even perhaps a minimal gain. You’ll find that if you’re on the right side of a true channel breakout, any of the small losses that you’ve accumulated will be rapidly wiped out, and you will be sitting on a nice large profit.

Every serious Forex trading investor uses channel breakouts. If you are considering taking part in investing in currency markets, you should take the time to get some Forex training in this strategy and other technical analysis techniques, which will develop the currency strategies that produce successful results. Without putting time and effort on your part to fully understand the risks and rewards that any Forex trading strategy entails, you will not be able to achieve the results that you desire. Indeed, your profit is in your hands.

About the Author:

Andrew Daigle is the owner and author of many successful websites including ForexBoost, a free Forex educational site to learn Forex trading strategies and a website for learning profitable online home business opportunities.

By Leroy Rushing

Pivot points used to be a favorite on Wall Street, but like other technical indicators, pivot points are time consuming to calculate. Thanks to computers and plenty of web resources, it is now possible to calculate pivot points in seconds. Professional traders have long used pivot points as a way to define support and resistance lines before the market even opens. Pivot points are very successful because they predict the market rather than lag it.

How they work

Pivot points work best in sideways trends because that is practically what they predict. The lines that make up a pivot point calculation define a very tight trading range that isn’t very conducive to uptrends and downtrends. Many profitable traders use pivot points on a daily basis to get an idea of the next day’s trading range before the market even opens.

Open below the pivot

An open below the pivot point is considered to be very bearish and might induce a downtrend, but not for very long. The way pivot points are designed suggests that the price can only fall so long before it hits a support line that makes up the pivot calculation. Creative techniques for playing the bounce usually include shorting the price until it hits the next support line.

Open above the pivot

If the market opens above the pivot, it is said to be very bullish to the next resistance line built into the pivot calculation. Used with other creative techniques and technical analysis indicators, the open up can bring a strong uptrend. However, be careful, as the resistance lines in a pivot point tend to be very strong.

Playing the bounce off the middle pivot

In the center of each calculation is a very strong line known as the pivot. A bounce off the central pivot is always very strong, and breakthroughs come with the same strength. Some professional traders like to play the bounces off this line, while others instead choose to avoid it. Depending on your risk tolerance and ability to make quick decisions, the pivot point might not be the place for you.

Mixing pivot points with candlesticks

This is by far the best strategy, as is any strategy with more than one indicator. If the price has rallied through a few pivot resistance lines before making a bearish candlestick figure, such as the shooting star, the chances of a sell off and upcoming downtrend are very likely. Just as the support and resistance lines often indicate a reversal, the confirmation of a candlestick pattern is very rewarding. Also, oscillators and momentum indicators work very well to make a trading decision.

About the Author

Learn how to master day trading by downloading two of Trading EveryDay’s FREE products: Tools of the Trade eBook and a Trading Plan Planner. Dedicated to helping people become profitable traders, Leroy Rushing, a professional day trader, trading coach, and author, is the CEO of Trading Ever.

Housing Starts statistics released out of Canada today fell for the sixth consecutive month in February according to a report by the Canada Mortgage and Housing Corporation (CMHC).  Canadian housing starts dropped by 12.3 percent in February to an annual rate of 134,600 units. February’s data follows an annual rate of 153,500 units in January.

Today’s report brings Canada’s housing starts to their lowest level since 2000 and surpassed economic forecasts that were expecting housing starts to fall to the 148,500 annual level.

Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre commented in the report on the real estate market saying, “Increased listings and reduced sales in the existing home market continue to impact the new home market.”

On the housing starts decline, Dugan said that, “The decrease in February housing starts is partly attributable to the volatile multiple starts segment. In any given month and given its relative importance, the volatility of the multiple starts segment can exaggerate monthly movements up or down in the rate of housing starts.”

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 New Zealand dollar, Australian dollar and British pound while falling to the euro, US dollar and Japanese yen.

The US dollar advanced today to trading over 1.3000 loonie per usd today for the first time since December after opening today’s trading at the exchange rate of 1.2865. The USD/CAD pair has retreated from its highs today to trading at 1.2996 at 4:23pm EST according to currency data from Oanda.

The euro has gained ground against the loonie as the EUR/CAD trades at 1.6381 after opening the day at 1.6309.  The Canadian dollar has also lost ground to the Japanese yen as the CAD/JPY has fallen from its 76.19 opening to trading at 76.02 later today.

On the positive side for the loonie, the British pound has fallen considerably today versus the loonie as the GBP/CAD currency pair trades at 1.7912 after opening the day at 1.8180.  The Australian and New Zealand dollars have also declined against the loonie as the AUD/CAD trades at 0.8204 from 0.8229 and the NZD/CAD trades at 0.6401 from its 0.6463 opening.

USD/CAD Chart – The US Dollar gaining versus the Canadian Dollar today and reached above the 1.3000 level for the first time since December.

By GCI Fx Research

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The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.2555 level and was capped around the $1.2725 level.  European Central Bank President Trichet spoke at the Bank for International Settlements meeting today and said the global economy is “approaching” a point where it will be improving because some positive aspects have not been priced in by the markets including corporate bond issuance activity and the “…very, very strong commitment of authorities…not to let any systemic institutions go under.” Trichet also cited lower commodities prices and fiscal stimuli as positives.  Notably, he added central bankers will not depart from current growth forecasts that see economic growth at or below 0% this year.  Data released in the U.S. today the February employment trends index decline 3.2% to 91.0, the latest indication that the U.S. employment trend is substantially weakening.  These data follow Friday’s significant February non-farm payrolls decline of 651,000 and increase in the unemployment rate to 8.1%.  The big debate in the markets remains the possibility that some U.S. financial institutions may become nationalized.  In eurozone news, Bank of France reported its sees Q1 2009 GDP growth of -0.6% q/q.  Euro bids are cited around the US$ 1.2385 level.

¥/ CNY

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥99.20 level and was supported around the ¥97.90 level.  Data released in Japan overnight saw the first monthly current account deficit in thirteen years last month, the latest indication that Japanese business activity is suffering on account of the yen’s relative strength.  The January current account balance printed at -¥172.8 billion, considerably worse than expected.  Other data released overnight saw total bank lending climb 3.8% m/m in February while February corporate bankruptcy cases were up 21.0% y/y.  The Nikkei 225 stock index lost 1.21% to close at ¥7,086.03.  U.S. dollar offers are cited around the ¥104.15 level.  The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥125.45 level and was supported around the ¥123.95 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥136.00 figure while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥85.40 level.  The Chinese yuan depreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 6.8398 in the over-the-counter market, up from CNY 6.8395.

₤

The British pound depreciated sharply vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.3740 level and was capped around the $1.4180 level.  Traders sold sterling after it was announced the government may assume control of up to 65% of Lloyds Bank in its second rescue attempt. Chancellor Darling said this is a “vital step” to restoring bank lending.  Barclays submitted a ₤50 billion portfolio that is being assessed this week for the government’s asset protection scheme.  Cable bids are cited around the US$ 1.3530 level.  The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.9185 level and was supported around the ₤0.8950 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.

Source: ForexYard

The Dollar is set to be the dominant currency in the forex market this week, as the banking crisis returns to the forefront. The banking share slump and the bullish Oil prices may hurt the Dollar this week, as traders bet against the greenback.

Economic News

USD – Dollar Goes Bearish on Weak Economic Data

The Dollar experienced a volatile session last week, which was concluded with much bearish behavior in USD crosses. Since Friday, the USD has undergone a bearish trend against the EUR, depreciating over 80 pips to close at 1.2673 at the end of Sunday’s trading session. Much of this is owed to data that came from the U.S on Friday; the Non-Farm Employment Change, showing that 651,000 people lost their jobs during February. It’s important to note that these figures were worse than forecasted. What’s more, U.S. unemployment now stands at 8.1%, a rate not seen in decades. The weak figures from the U.S. are likely to lower the consumption quantity from consumers during the following months, which is highly likely to have an immense impact on the Dollar’s strength.

The Dollar lost 20 pips against the Yen to close at 98.02. This may show that the Dollar may not be making the comeback that analysts previously forecast. For example, on Tuesday, the Dollar hit as high as 99.66 on Tuesday, before sliding dramatically. We will have to see how the day unfolds to accurately determine the USD/JPY cross this week. The USD gained about 30 pips in yesterday’s trading against the GBP to close at 1.4123. The main factor that is likely to determine the level of this currency pair this week is how investors portray President Obama and his administration in tackling the U.S. economic situation.

As for the week ahead, the vital data expected from the U.S economy is due on Thursday and Friday, and is forecasted to continue with the negative line. The Retail Sales data release is expected to be poor, and the Unemployment Claims are expected to reach 640,000. The Consumer Sentiment survey on Friday is predicted to continue with a downtrend, and to drop beneath the 50 mark. Such a result will reflect a severe lack of trust by the American citizens that their economic situation is about to improve soon. Traders are advised to keep track of the real results of the main publications, as any surprising data might change the course of trends.

EUR – EUR Set for Another Volatile Trading Week

The EUR underwent a volatile trading week, seeing mixed results against the major currencies. On one hand, the EUR rose 200 pips against the Dollar to close Friday’s trading session. However, on the other hand it did not manage to appreciate against the JPY. Last week’s most significant announcement was made by the European Central Bank (ECB), which cut Interest Rates by 0.5% to a record low of 1.5%. Now, the entire Euro-Zone is expecting to see whether the low rates will manage to help lift the region out of the worst recession since World War Two.

The immediate reaction to the rate cut decision was a drop in the value of the EUR against the Dollar. However, the poor employment data from the U.S. helped reverse the trend slightly, as the Dollar dropped on all fronts. As of Sunday’s closing price, the EUR closed lower by about 10 pips against the GBP, and currently stands at 0.8970. Against the USD, the EUR closed down about 20 pips at 1.2673. In the long-term, the EUR is expected to strengthen even further against its main currency pairs, as it seems unlikely that the ECB will slash Interest Rates again in March.

As for this week, most of the news that might influence the EUR will come from the strongest economy in the Euro-Zone, the German economy. Almost all indicators such as the German Factory Orders, the Consumer Prices Index, and the Trade Balance are forecasted by analysts to deliver weak figures. This may generate a modest downtrend for the European currency. Despite expectations, traders are advised to follow economic news coming from the U.S and British economies as well, as they are likely to be an important catalyst in dictating this week’s trends.

JPY – JPY Upholds its Safe-Haven Status

Last week, the JPY saw predominantly bullish trends against the major currencies. The JPY rose around 300 pips against the GBP until midweek. However, these massive gains were short-lived, as the British currency made up for some of its losses. The GBP/JPY barely moved in Sunday’s trading and closed at 138.47. The JPY took 20 pips out of the USD in yesterday’s trading as the pair closed at 98.02. Some of these results show that the Yen rose as a result of the problematic data published from the U.S and the Euro-Zone

As of late, it is clear that Japan is in deep recession. However, its current condition still seems to be better than most of the leading Western countries and that is the main factor pushing the JPY higher as of late. This week traders should look forward to the Japanese Final Gross Domestic Product figures on Wednesday night, as this should be the most intriguing data from the Japanese economy this week. In addition, as proven in the past few weeks, it is the news from the West that is influencing the Yen the most. Traders must keep that under consideration and set their positions on the JPY in accordance.

Oil – Crude Oil Hits $46.50 a Barrel

The biggest development last week was that Crude Oil rose to over $46.50 a barrel for the first time in nearly 2 months. There are two main factors that supported Oil prices last week. Firstly, OPEC recently announced that the current low prices of Oil may lead to a supply crunch by 2013, and thus rejecting some arguments made lately by analysts that the cheap Oil might help the global economies recover. Second, the slide in the Dollar’s value last week largely contributed to the ascending Oil prices, as Crude Oil is valued in Dollars.

Traders should differentiate between the two reasons listed above. Whilst the first one is no more than an attempt made by OPEC to stop the decreasing Oil prices, and therefore could only affect the price of Crude Oil in the short-term, the second reason is much more crucial. For as long as the USD will continue to depreciate, it is very likely that Oil prices will rise in accordance. However, if the USD will not drop severely, Oil will probably continue to be valued at about $40 a barrel, which seems to be a reasonable price in helping the global economic recovery.

Technical News

EUR/USD

On the 4-hour chart the pair continues to range trade in the upper half of its Bollinger Bands. Both the hourlies and the daily charts are providing mixed signals with no significant breach. Such a range trading floating nature may provide a good opportunity for traders to safely buy on the lows and sell on the highs while profiting from the relatively predictable range trading.

GBP/USD

A bullish cross may be forming on the hourly chart, indicating a potential price movement towards the upper resistance level of 1.4300. The daily chart’s Bollinger Bands are tightening, indicating that a violent breach may take place in the next few hours, supporting the potential bullish movement.

USD/JPY

The bullish trend is loosing its steam and the pair seems to be consolidating around the 98.25 level. The 4-hour chart shows a fresh bearish cross that has just formed, indicating a future downward price movement. Supporting this is the RSI on the hourly chart which is floating in the overbought territory. Traders may look for the pair to reach a lower support line of 97.50.

USD/CHF

After bottoming at the1.1486 level on Friday, the pair has now consolidated a bit higher around the 1.1600 mark. A fresh bearish cross has just formed on the hourly chart and the upper Bollinger Band was also breached, indicating a potential downward movement in the near future. Going short today looks to be the right move for traders.

The Wild Card – Gold

Gold prices rose again significantly in the last week and peaked at $957.88. This may present an overbought situation as the 4-hour chart’s RSI is presently in the overbought territory, while the weekly chart shows a bearish cross has formed on the Slow Stochastic with its RSI floating in the over sold region. This week forex traders can take advantage of the overbought situation in Gold for a healthy profit.

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 Adam Hewison

Imagine you’re in your favorite restaurant enjoying a nice dinner. All of a sudden a beautiful young lady jumps up on the table and starts dancing even though there is no music.

Would that get your attention?

I know it would get my attention, not because it was a beautiful lady, but because it is out of the realm of normalcy for this restaurant to have anyone dancing on their tables.

The point I am making is this… sometimes markets act a little out of the ordinary despite what everyone is saying and thinking about them. When this happens you need to pay close attention to that market.

Why? Because that market maybe getting ready to do something totally contrary to prevailing sentiment.

For the first time in a long time we have received a signal that many would consider out of the ordinary and going against popular sentiment.

I have prepared a short video that I would like to share with you today.

Let me know how you enjoy the video and if you found it helpful please feel free to leave a comment.

See the New Video here

Thanks for reading this post and every success in the markets and in life,

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

U.S. Nonfarm Payrolls employment data fell by more than 500,000 for the fourth straight month in February according to the Department of Labor. The nonfarm payrolls report showed that U.S. payrolls shed 651,000 jobs in February following a revised drop of 655,000 jobs in January. The January payrolls data had originally shown a decline of 598,000 jobs while the number of job losses in the last four months now totals 2.6 million.

On an annual basis, around 5 million jobs have been lost since February 2008 and the four months straight of over 500,000 jobs lost has marked a first in the history of the government employment report. February’s jobs data just surpassed economic forecasts that were expecting a job loss of approximately 650,000 workers for the month.

February was the fourteenth straight month that companies have shed workers and brought the unemployment rate to 8.1 percent from 7.6 percent.  The unemployment rate has increased by 3.3 percent in the last twelve months and February’s 8.1 percent jobless rate marked the highest jobless rate level since 1983. The unemployment rate increase surpassed market forecasts expecting the rate to increase to 7.9 percent.

All areas of employment were hard hit in February with only Education & Health Services and Government employment showing job gains for the month with increases of 26,000 and 9,000 jobs, respectively. The goods producing sector(-276,000) continued to be hard hit by job losses in February with the manufacturing sector cutting 168,000 jobs and the construction sector losing 104,000 jobs. The service-providing sector lost a total of 375,000 jobs with professional & business services shedding 180,000 workers and retail trade cutting 40,000 workers. Leisure and hospitality also lost 33,000 jobs in the month.

USD mixed in Forex Trading.

The dollar has been mixed in forex trading today following the dismal job report today as the U.S. currency has gained against the British pound,  Canadian loonie, Australian dollar, New Zealand dollar and Japanese yen while declining versus the euro and Swiss franc.

The euro has been stronger versus the dollar today as the EUR/USD has advanced from its 1.2579 opening(00:00 GMT) to trading at 1.2617 in the afternoon of the U.S. trading session at 3:25pm EST. The British pound is falling today as the GBP/USD has declined from its 1.4179 opening exchange rate to trading at 1.4049 usd per gbp.

The dollar has fallen versus the Japanese yen and trading at 98.10 after opening at 98.25. The dollar has advanced today versus the Canadian loonie as the USD/CAD trades at the exchange rate of 1.2894 from its 1.2853 opening.

The dollar has fallen against the Swiss franc as the USD/CHF trades at 1.1597 after opening at 1.1634 today. The dollar has been stronger against the Australian dollar and slightly higher versus the New Zealand dollar. The AUD/USD trades at 0.6375 after a 0.6428 opening while the NZD/USD trades at 0.5009 today after opening at the exchange rate of 0.5021.

GBP/USD Chart – The British Pound declining today against the US Dollar in the Forex Market today.

By GCI Fx Research

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The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.2750 level and was supported around the $1.2530 level.   As expected, the U.S. February non-farm payrolls number was a disaster as 651,000 Americans lost their jobs last month and the unemployment rate spiked to 8.1% from 7.6%.  Average hourly earnings were up 0.2% and the average workweek was unchanged at 33.3 hours.  Today’s non-farm payroll print came in right around forecasts and was consistent with the ADP print.  The big news, however, was a sharp downward revision to December’s and January’s non-farm payrolls results of a cumulative 161,000 jobs.  The U.S. economy has now shed 4.4 million jobs since the recession officially began.  The Federal Deposit Insurance Corporation yesterday indicated it may become insolvent this year on account of anticipated bank failures.  The U.S. Senate is today deliberating an emergency US$ 500 billion loan to the FDIC that would serve as a backstop.  In eurozone news, European Central Bank member Bini Smaghi said if the current rate cuts end “at a higher level… it is more likely that the interest rate will remain at that above-zero floor level for some time.”  He added this would incentivize lenders to invest in long-term assets.  The ECB yesterday trimmed its key interest rate target to 1.5%, the lowest rate ever.   It is likely the ECB will resort to some sort of quantitative easing to expand the money supply.  Data released in Germany today saw 2008 corporate insolvencies off 4.5% y/y.   Euro bids are cited around the US$ 1.2385 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥96.55 level and was capped around the ¥98.50 level.  The U.S. dollar sputtered lower after yesterday’s massive sell-off in U.S. equity markets and an ensuing sell-off in Asian markets.  Traders drove the greenback lower ahead of the terrible U.S. February non-farm payrolls report.  Data released in Japan overnight saw the trade balance print at -¥131 billion between 1-20 February, down from a ¥413 billion surplus one year ago.  The Nikkei 225 stock index lost 3.50% to close at ¥7,173.10.  U.S. dollar offers are cited around the ¥104.15 level.  The euro moved lower vis-à-vis the yen as the single currency tested offers around the ¥123.90 level and was supported around the ¥122.35 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥137.25 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥84.90 level.  The Chinese yuan appreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 6.8395 in the over-the-counter market, down from CNY 6.8409.  People’s Bank of China reported it will continue to reform the yuan’s exchange rate this year and “keep it at a reasonable and balanced level.”

₤

The British pound depreciated vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.4075 level and was capped around the $1.4305 level.  Data released in the U.K. today saw February producer price inflation rise +0.1% m/m and 3.1% y/y, the lowest annual increase since September 2007.  Also, PPI input prices were up 0.6% m/m, defying expectations of a pullback.   U.K. government minister Malloch-Brown reported the depreciation in sterling has not been an “engineered policy” and said the G20 meeting in London on 2 April will see the U.K. call for measures to monitor protectionist policies.  Construction sector output was off 7% q/q in Q4 and this helped cause GDP to contract 1.5%, the largest quarterly contraction since 1980.  Cable bids are cited around the US$ 1.3740 level.  The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.8995 level and was supported 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.

Well, today we got the horrid news that the unemployment rate spiked up to 8.1% from 7.6% previously. In fact, over 650,000 jobs were lost last month.

Here’s the thing about fundamental trends…they don’t change quickly. When the “fundamental ball” is rolling in the right direction, it goes for a long time. However, unfortunately the inverse is true also: When the “fundamental ball” is rolling in the wrong direction, it’s not quickly turned around either.

So what does a higher unemployment rate and skyrocketing job losses mean? It means that you probably won’t see a bottom in the stock market until this bleeding stops.

As my readers know, I have a saying: Economies turn around like ships and not like speedboats. Therefore, knowing this, instead of trying to “pick the bottom” in the stock market, why not turn to what’s working now and not what “may” work years from now (because that’s how long it may take for many people stock positions to come back above water).

Even though stocks started off “up” this morning , do you really think that will continue as more corporations layoff workers and these “workers” which are also “consumers” who will spend less and less, and even default on their bills? I don’t think so. In fact, the market is correcting that “temporary upturn” even now.

There’s a lot of “fundamental trouble” staring the stock market in the face: 1 in 8 homes are in foreclosure and more than 103,000 individuals and businesses filed for bankruptcy last month.

Until this fundamental trend is stopped in its tracks, I don’t see a turn around in stocks. When will this turnaround come? I look to the “weekly” Initial Jobless Claims numbers. Once we see a parabolic spike upward AND a notable reversal, then we will probably be at the BEGINNING stages of the reversal of the economic downturn and bear market in stocks.

See the chart below and you can get a visual of what I’m talking about. Just before 2001, the last spike and reversal came about.

Initial Jobless Claims Spiked and Reversed Last in Late 2000

When you see the chart, you can see why I say this will be the “beginning” of a recovery once that spike and reversal happens. You’ll note that it still drags on for the next year.

This is why I cannot emphasize enough to capitalize on something that is PROSPERING NOW as opposed to waiting until all of the employment and economic situations finally works itself out.

This is what you should do in order to protect your portfolio now!

What’s bottomed now and likely to recover first? There are many Japanese yen pairs in the forex market that appear to have bottomed in October and have based sideways since then. They appear to be poised for a breakout higher in the coming weeks to months ahead. However, they are NOT breaking to fresh lows like most other financial instruments all over the world.

In fact, USD/JPY has recently broken out into new highs. It’s one of the few financial instruments in the world to do this in this present economic environment. So it’s always noteworthy to see something breaking out to the upside when most of the financial assets in the world are still breaking lower to the downside and will probably continue to do so for quite some time.

Therefore, you should check out these yen crosses: USD/JPY, EUR/JPY, AUD/JPY, CAD/JPY, etc. in the forex market.

Get a demo here so you can see what I’m talking about. There you will have access to FREE, REAL TIME quotes and charts so you can get a feel for what I’m speaking about for yourself.

THEN…get an education in this market so you will feel comfortable investing in these currency pairs that have stabilized and even broken higher recently. After all, you need positions in your portfolio that are going up NOW in order to combat a slumping 401k, IRA or stock brokerage account. Time is of the essence. Don’t be paralyzed by fear and do nothing. Take charge of your future. Don’t wait on the government!

Get your $20 online education started today by clicking here.

Sean Hyman

Head Course Instructor

http://www.mywealth.com