InvestMacro Forex News

AUDUSD has formed a cycle top at 1.0585 on 4-hour chart. Sideways movement in a range between 1.0500 and 1.0585 would likely be seen. Key support is located at the lower line of the price channel, as long as the channel support holds, the price action from 1.0585 is treated as consolidation of the uptrend from 1.0287, and another rise towards 1.0624 (Sep 14 high) could be expected after consolidation. However, a clear break below the channel support will suggest that the uptrend from 1.0287 had completed at 1.0585 already, then the following downward movement could bring price back to 1.0000 zone.

Daily Forex Forecast

Source: ForexYard

10:00 GMT – EUR – Unemployment Rate

– Percentage of total work force that is unemployed and actively seeking employment during the previous month.

– The all-European unemployment rate is based on figures from other countries that have already released their unemployment results. Still, this number is important to Europe’s policy makers.

– The unemployment rate is rising steadily in Europe, edging up 0.1% each month. Also this time, it’s predicted to rise by 0.1%, from 9.6% to 9.7%.

12:30 GMT – CAD – Gross Domestic Product (GDP)

– Change in the inflation-adjusted value of all goods and services produced by the economy. It’s the broadest measure of economic activity and the primary gauge of the economy’s health

– The long months of contraction stopped two months ago with a rise of 0.1% in the GDP. The economy is expected to rise this time by 0.1%.

– This is the most important event for the Canadian economy this week. Any outcome will move the Canadian Dollar.

13:45 GMT – USD – Chicago PMI

– Survey of purchasing managers in Chicago which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories

– It’s a leading indicator of economic health – businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company’s view of the economy.

– Above 50.0 indicates expansion, below this figure indicates contraction.

Forex Market Analysis provided by ForexYard.

© 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.

Source: ForexYard

The yen dropped to a 6 ½ month low against the US dollar in early morning trading today, after Japan’s opposition party leader, who is now favored to win in elections next month, said that he favored a policy of additional monetary easing. The USD/JPY, which currently stands at 80.83, has gained more than 100 pips in the last 24 hours.

The euro saw very modest gains against the dollar during Asian trading, as investors remained cautiously optimistic that Greece will receive a new round of bailout funds. The pair is currently at 1.2736, up close to 20 pips since last night.

Main News for Today

US Core CPI- 13:30 GMT
• Forecasted to come in at 0.1%
• Any worse than expected news could result in the dollar taking further losses against the euro

US Unemployment Claims- 13:30 GMT
• Forecasted to come in at 372K, slightly higher than last week
• Any higher than expected data may result in dollar losses

US Philly Fed Manufacturing Index- 15:00 GMT
• Forecasted to come in at 1.1, well below last month’s figure of 5.7
• If the figure comes in above expectations, the dollar could extend its gains against the yen

US Crude Oil Inventories- 16:00 GMT
• Forecasted to come in at 2.5M
• A higher than expected figure could result in the price of crude oil falling during evening trading

US Fed Chairman Bernanke Speaks- 18:20 GMT
• Due to speak about the US housing market
• If the Fed chairman speaks optimistically about the US housing recovery, the dollar could see gains

Read more forex news on our forex blog

Forex Market Analysis provided by ForexYard.

© 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.

Source: ForexYard

EUR/USD

The weekly chart shows a bullish engulfing pattern was followed by a false breakout above the trend line falling off of the May and July highs. A pullback from this resistance line formed a doji reversal candlestick which hints at declines in the EUR/USD. The 200-week moving average looks to be the first support at 1.4025 followed by the 200-day moving average at 1.3930. The rising trend line from the May low could also be supportive at 1.3830. To the upside 1.4580 will need to hold to maintain the bearish technical picture. A close above this level could go on to test 1.4700 and this year’s high of 1.4940.

GBP/USD

Three weeks of consistent gains for cable are beginning to shift the technical picture from bearish to bullish. Sterling has moved above resistance levels that otherwise would have contained the pair. The first break occurred above the neckline of the head and shoulders pattern at 1.6185 and the second major break occurred at 1.6370 above the previous trend line rising from the May 2010 low. Initial resistance will be the May 31st high at 1.6550 followed by the April high at 1.6745. A move lower for the GBP/USD will likely test the base at 1.6260 followed by the previously broken trend line off of the April high at 1.6140. A breach of 1.6000 could have scope towards 1.5780.

USD/JPY

Yen strength has returned with a vengeance. Last week’s candlestick closed with a shaved bottom indicating momentum is to the downside. This week’s opening gapped higher but the price managed to hold below the current short term trend line from the July 20th high which comes in at 78.05. Additional resistance may be 79.60 and the 55-day moving average at 80.15 but the downside is calling. Support is found at 76.70 from last week’s low followed by the all-time low from March at 76.11. A break here and we move into uncharted territory where the psychological support at 75.00 and 70.00 come into play.

USD/CHF

The Swiss franc is in a similar position as the yen as the USD/CHF moves into uncharted territory. Bias remains to be short but Monday’s opening gap higher could create a Harami reversal pattern which may lead slight gains for the pair. A daily close will be needed for confirmation. Resistance is found at 0.8080 and 0.8275. A move higher to these levels would provide for potential short entries back into the long term downtrend with targets at the big round number at 0.7800.

Read more forex trading news on our forex blog.

Forex Market Analysis provided by ForexYard.

© 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.

Source: ForexYard

EUR/USD

Momentum has now turned lower as falling stochastics appear on the monthly, weekly, and daily charts. Initial support comes in at the June low of 1.4075 and the May low of 1.3970. A break here and technical traders will target the 200-day moving average at 1.3860. While the 8 cent decline from the May high is a sharp drop, traders should keep in mind that the correction the pair is currently undergoing is just that, a correction. Buyers may be lurking at the rising trend line from the June 2010 low. Resistance comes in at the recent high of 1.4440 where the 50-day and 20-day moving averages are floating.

GBP/USD

The GBP/USD has broken a significant technical barrier at the neckline from a head and shoulders pattern which measures a target at 1.5370. Monthly and weekly stochastics are turning lower so traders may expect further declines. Support is located at the March low at 1.5935 followed by the late January low at 1.5750. To the upside the neckline from the head and shoulders pattern at 1.6120 could offer traders a level to enter short as many times in a head and shoulders chart pattern the pair will revert back to the neckline only to head lower from there.

USD/JPY

Yen bears are making a stand at the 80 level. A previously broken trend line from the April high comes in at this level and will also support the bears. However, once this last bastion of support is broken the fallout could be similar the price action in March. Should the move higher continue, resistance is found at 81 and 81.75.

USD/CHF

The previous resistance at 0.8550 held and the all-time low at 0.8325 is continually being pressured so a break here may be in the works. An absence of supports or trend lines below this level makes it difficult to predict how low the pair could go.

Read more forex trading news on our forex blog.

Forex Market Analysis provided by ForexYard.

© 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.

Source: ForexYard

The dollar traded lower during the New York trading session but still within defined price ranges as markets look for a new catalyst to continue the bullish run in the dollar. Later this evening the Bank of Japan will release their interest rate decision that could include additional monetary policy easing measures.

Forex rates for the dollar were mixed but overall weakness was seen after US economic data releases. Weekly unemployment claims were better than forecasted and initially the dollar benefited from the surprising jobs data. However, dollar sentiment was thwarted after the release of weaker than expected existing home sales and a significantly lower Philly Fed Manufacturing Index.

The EUR/USD traded as high as 1.4322 after rising from a low of 1.4194 during the European session. Cable held its gains after strong retail sales numbers and looks to end the day near its high at 1.6229 from 1.6179. The USD/JPY fell back from a high of 82.22 to trade at its opening day price of 81.55 following the disappointing US manufacturing data. US equities were flat with the S&P 500 up only 0.07% and crude oil traded back below the $100 mark.

Forex macro news will be out later tonight with the release of the Japanese overnight call rate. No change is due to the interest rate but calls have been made for the BoJ to introduce new easing measures to assist both the recovery from the earthquake and tsunami as well as the decline in growth rates. Yesterday’s Japanese GDP numbers showed the economy is currently in a recessionary mode. While the disaster did little to help the economy, the data shows the decline in growth rates had its beginnings prior to the earthquake and tsunami. New easing measures by the Bank of Japan could send the USD/JPY higher to the retracement levels from the April to May move at 82.50 followed by 83.25.

Read more forex trading news on our forex blog.

Forex Market Analysis provided by ForexYard.

© 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.

Source: ForexYard

The failure of the EUR/USD to advance above the 1.4900 level is beginning to slow momentum traders and profit taking in the pair has ensued. Versus the pound the euro is higher after weaker than expected UK manufacturing data. The USD/JPY is closing in on the 80 yen price, a level that could bring further intervention from the Japanese Ministry of Finance.

The euro is showing a sign of weakness as the EUR/USD treads water for the 4th day in a row. The pair has failed to move above yesterday’s high of 1.4900 and has encountered a bit of profit taking, trading as low as 1.4754 early in the morning before moving higher to 1.4780. European PPI m/m for March was in line with market expectations for an increase of 0.7%, but the reading is still the fastest increase in the past 2 ½ years. This should continue to pressure the ECB to raise interest rates again, perhaps in June or July. Currently the EUR/USD is caught in a consolidation pattern with support at 1.4750. A breach below this level could trigger stops and further selling to the 1.4650 – 1.4625 support level. The long term target remains at the 2009 high at 1.5140.

Following a disappointing Manufacturing PMI release, the pound tumbled versus both the dollar and the euro. March PMI fell to 54.6 from 57.0 on expectations for no change in the survey. The report’s negative tone was further emphasized with the previous month’s reading adjusted lower to 56.7. The GBP/USD fell to 1.6467 from 1.6616. Traders may look to reenter long on the cable at 1.6430, a support level from late April that coincides with a 38.2% retracement from the April move higher.

After the weak manufacturing number the EUR/GBP surged to a 13-month high at 0.8979, triggering stops above the 0.8940 resistance level. The next resistance on the weekly chart is found at 0.9150 off of the February 2010 high.

The USD/JPY has slipped below the 50% retracement level from the pre-intervention low to the April high, falling to 80.70 on the day from 81.03. The pair continues to inch closer to the 80 yen line in the sand. At this price level the Japanese Ministry of Finance may feel the need to step in and intervene in the forex market to help weaken the yen.

Forex Market Analysis provided by ForexYard.

© 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.

Source: ForexYard

An ominous trend has developed among the top global economies in regards to industrial production. Great Britain initially published a report which showed industrial order expectations sinking rapidly for the month of April. Then the euro zone released its industrial new orders report on Wednesday, revealing slower growth than was expected, and coming alongside a sluggish core durable goods report from the United States.

This morning’s sharp downturn in Japanese industrial production, linked with those similar downturns in Great Britain, Europe and the United States, has now emerged and together paints a grim picture. On the currency side, the yen still suffers from its own economic concerns, but dollar bears outpaced the yen’s in this morning’s trading hours, helping to sink the USD/JPY temporarily despite Japan’s dire economic outlook. The pair also looks to be continuing this movement for the foreseeable future given the shift in sentiment away from the US dollar.

But the JPY did lose ground against almost all of its rivals yesterday partially as a result of the industrial downturn, but also as an S&P downgrade of Japan’s debt outlook from ‘stable’ to ‘negative’ caused a shift away from the island economy in the short- to mid-term.

The recent wave of industrial reports, revealing a global faltering among the industrial sector, may also be connected with recent GDP figures out of Britain and the United States. British Prelim GDP showed little movement, but remains at a dismal 0.5%. US Advance GDP, however, came out below expectations at 1.8%; pathetic when compared with Q4 2010 GDP, which published growth of 3.1%.

Being the first of three GDP reports from the US means the American economy still has time to lift this figure to an acceptable level. The downshift away from the greenback should help in the next few months by lifting exports. And this means traders should be able to profit from short dollar trades over the next few weeks, according to our analysts.

Forex Market Analysis provided by ForexYard.

© 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.

Source: ForexYard

The pound is the best performer on the day after the Q1 GDP data while the yen is down. All this leads up to the US interest rate announcement and the inaugural Fed press conference with Chairman Ben Bernanke to follow.

Following the release of UK Q1 GDP numbers the pound traded higher with sterling the best performing currency so far today. The release was in line with market expectations of 0.5% and stands in stark contrast to the Q4 2010 numbers that showed the UK economy contracted by -0.5%. The GBP/USD jumped higher to 1.6580 before trading back to 1.6550. A rebound in UK growth should support sterling in the short term and a GBP/USD target still remains at the 2009 high of 1.7040. Support comes in today at 1.6420 near the upper channel line from the consolidation pattern of late last week.

The yen is on its back foot across the board as recent gains in the Japanese currency are being unrolled. The cause of today’s JPY declines is the S&P cut to the sovereign rating outlook due to increased costs from the earthquake and tsunami. The rising cleanup and recovery costs do not come as a surprise, but nevertheless the announcement by S&P helped to trigger a yen reversal. Recent yen strength has been apparent since mid-April after traders who were long on the JPY have recovered from the hit they took following the unilateral intervention to weaken the JPY. The USD/JPY is trading higher at 82.30 and the momentum of today’s move could carry the pair higher to the 83.00 level.

All eyes now turn to the Federal Reserve as today will mark the first quarterly news conference by the Fed Chairman. Prior to the press conference the Fed Funds Rate will be released and no changes are expected. This mantra goes as well for the QEII program as most Fed watchers forecast the US central bank to carry out the full $600B of bond purchases. The accompanying FOMC statement may indicate a slight improvement in the US economy as growth looks to have picked up and inflationary pressures have increased but are still below a level that would prompt any withdrawal of the loose monetary policy that helps to support the economic recovery.

Volatility in the dollar may increase given the new Q&A session Bernanke will endeavor upon. He should face questions not only pertaining to monetary policy and unemployment rates but also the weakness in the dollar will likely be addressed. The new format may not increase transparency into the Fed’s future actions but market volatility should be increased.

Forex Market Analysis provided by ForexYard.

© 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.

Source: ForexYard

The USD/JPY fell to a record low during the start of the overnight session, as the aftermath of last week’s devastating earthquake and tsunami in Japan continue to generate extreme volatility in the marketplace. The pair dropped over 300 pips in a matter of minutes, reaching as low as 76.40 before bouncing back up to its current rate of 79.45. While several potentially significant US news events are scheduled to be released today, traders are warned that any developments out of Japan are likely to have the highest impact on the market.

Here is a roundup of the day’s main economic indicators:

12:30 GMT-US Core CPI

The Core CPI figure measures the change in price in goods and services, excluding food and energy, over the last month. This is considered a vital gauge of inflation in the US, and tends to have a direct impact on the value of the dollar.

Today’s CPI is forecasted to come in at 0.1%, which if true, would signal a slight drop over last month’s. The USD has been extremely bearish as of late. If today’s figure comes in at 0.1%, the currency is likely to take further losses.

12:30 GMT-US Unemployment Claims

The weekly US Unemployment Claims figure is considered one of the more significant news events on the forex calendar. Analysts are predicting a slight drop in the number of people filing for first time unemployment insurance this week. If the predicted figure of the 388K turns out to be true, the dollar may be able to pull in some short term gains during the afternoon session.

Forex Market Analysis provided by ForexYard.

© 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.