Month: March 2009

By GCI Fx Research

€

The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3155 level and was supported around the US$ 1.2985 level.  Traders are awaiting the outcome of today’s Federal Open Market Committee meeting with most traders expecting no dramatic announcements.  Fed officials may use the opportunity to expound upon their recently-launched Term Asset-Backed Securities Loan Facility (TALF) program to stimulate consumer and business lending in the asset-backed securities market.  Fed officials may also give some colour about the current state of the economy and could indicate that recent economic data suggest there are nascent signs of an economic recovery, notwithstanding the labour market.  Data released in the U.S. today saw the Q4 2008 current account deficit narrow to –US$ 132.8 billion between October and December from an upwardly revised deficit of –US$ 181.3 billion in Q3 2008.  Also, the February consumer price index rose 0.4% m/m and +0.2% y/y.  In eurozone news, the European Union may appropriate an additional €10 billion in emergency loans available to non-eurozone members. This would be in addition to the €25 billion facility already in place.  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 ¥97.70 level and was capped around the ¥98.85 level.  As expected, Bank of Japan’s Policy Board voted to keep interest unchanged and at ultra-accommodative levels overnight.  More importantly, the central bank decided to purchase additional government bonds outright to ease credit strains heading into the fiscal year-end at the end of the month.  BoJ will now purchase ¥1.8 trillion every month, or ¥21.6 trillion annually, up from the ¥1.4 trillion monthly and ¥16.8 trillion annual level established in January.  The Nikkei 225 stock index climbed 0.29% to close at ¥7,972.17.  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 ¥129.20 level and was supported around the ¥128.00 figure.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥136.55 figure while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥84.30 level.  The Chinese yuan appreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 6.8347.

₤

The British pound moved lower vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.3840 level and was capped around the $1.4070 level.  Data released in the U.K. today saw unemployment move above the two million level for the first time in nearly twelve years with the claimant count jumping 138,400 in February and the unemployment rate higher at 6.5%.  Bank of England Governor King yesterday reported the central bank will decide when and how to reverse its asset purchases and normalize interest rates when inflation conditions allow same.  King also said the upcoming Group of Twenty meeting needs to drive home the message that macroeconomic stimulus is needed.  Cable bids are cited around the US$ 1.3720 level.  The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.9415 level and was supported around the ₤0.9255 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 technical correction continues to dominate the leading currencies, as both the EUR and the GBP have strengthened significantly against the Dollar lately. This could change today as the U.S Funds Rate will be announced at 18:15 GMT, and is forecasted to stay at 0.25%. However, any change that might take place is prone to sow disorder in the market, and forex traders should be ready for it.

Economic News

USD – Dollar Moves on U.S. Housing Market Data

The Dollar recorded a volatile trading session on Tuesday after U.S. data showed that the construction of new houses increased by an unexpected 22%. In some cases in Dollar trading, this positive news went against the greenback, as many investors feel that the news indicates a bottoming out of the housing slump in America. The reason why this is so critical is because the roots of the current U.S. and global financial crisis lie in the U.S. housing bubble, which burst after over 10 years of bullishness. These positive figures also led to a rally on Wall Street.

The Dow Jones climbed by nearly 180 points or 2.5%. The main gainers on Wall Street were housing and banking stocks. For example, J P Morgan, Citigroup, and Bank of America shares increased due to recent figures showing that all 3 companies were profitable in the first 2 months of this year. This led to the Dollar’s failure to gain a strong bullish momentum against the EUR yesterday. This was due to the possibility that the beginning of the end of the current financial crisis in the U.S. has arrived. Therefore, demand for the greenback has started to sway, as demand for safe-haven currencies diminishes when economic times are good.

The Dollar fell against the EUR to eventually close down 42 pips at the 1.3046 rate. The Dollar closed up 14 pips against the JPY at 98.44, as the JPY also lost some of its safe-haven status, as the Japanese economy continues to deteriorate. The Dollar made more inroads against the GBP to close up 81 pips at 1.4041. This comes about as investors preferred to keep their money in the Dollar over the fragile Pound, which is dependent on the unstable British banking industry and energy sector.

Looking ahead to today, there is likely to be high volatility in the Dollar’s currency crosses. This is so, as traders weigh-up on what’s next for the U.S. economy. Traders are advised to follow the U.S. Current Account figures at 12:30 GMT, the Federal Open Market Committee (FOMC) Statement and the Federal Funds Rate at 18:15 GMT. Positive economic figures and an increase, or unchanged U.S. Interest Rate may lead to a rally on Wall Street, leading to a bearish Dollar in trading later on today as investors eye risk taking.

EUR – EUR Climbs Against Dollar

The EUR climbed against the Dollar on positive Euro-Zone figures, and a rally on Wall Street. German ZEW Economic Sentiment was better than expected at -3.5. The Euro-Zone recorded better-than-expected ZEW Economic Sentiment figures of -6.5 too. Both of these data releases helped push the EUR up against its other major currency pairs. Later on, this was helped when the U.S. released better-than-expected figures showing that construction of new houses was up 22% in February from January. This led to a rally on Wall Street, and a bullish demand in predominantly housing and banking stocks.

The rally on Wall Street helped in the drop in demand for the safe-haven U.S. Dollar vs. the EUR. Therefore, the EUR finally closed up 42 pips against the Dollar at 1.3046. The EUR also closed up against the Yen by 58 pips at 128.44. This comes about as the JPY loses some of it safe-haven status, and the EUR returns to the forefront. The EUR finished yesterday’s session up by 82 pips against the Pound at 0.9288. This came about ahead of today’s British Claimant Count Change at 09:30 GMT that is expected to show poor figures, as Britain’s economy continues to deteriorate.

Today, there is plenty of news that is expected from Britain and the Euro-Zone, which is likely to affect the main currency crosses pairs of these respective currencies. However, 2 of the most important data releases will be coming out of Britain later today. At 09:30 GMT, there is the release of the Monetary Policy Committee (MPC) meeting from the Bank of England (BoE) in regard to future rate cuts. Additionally, at the same time there is the release of the British Unemployment Rate figures. These 2 data release may help determine the GBP’s currency crosses going into end-of-week trading.

JPY – JPY Tumbles on Japanese Banking Plan

The JPY tumbled on Tuesday against most of its main currency counterparts on renewed plans for a Japanese banking stimulus and U.S. housing data. Firstly, U.S. housing data showed better-than-expected results. This led to a drop in demand for safe-haven currencies, such as the JPY and USD. Additionally, forex traders are dissuaded on putting big sums of money in the Japanese currency as Japan’s economy is scheduled to shrink by 13.1% this quarter. The Bank of Japan (BoJ) concludes their 2 day meeting later today, and it is expected that they are going to unveil an aggressive plan to tackle the Japanese recession. This is in coordination with Japan’s government, which is scheduled to push through the 3rd stimulus through Japan’s parliament of over $2 billion for Japan’s banks.

The leaks from the BoJ yesterday that it will continue lending large amounts of money to banks led to a rally in Japan’s stock market. This was also spurred by the stock market rally on Wall Street. These events led to a higher risk appetite in Japan, and therefore a bearish Yen. The Yen closed down 14 pips against the USD at 98.44. This is significant, considering both currencies are safe-haven and usually show little volatility when trading against each other. The JPY rose against the Pound, as traders preferred the Japanese currency over the unstable British economy. However, against the EUR, the JPY closed down about 60 pips at 128.44. Today, Traders are advised to make their trading decisions in regards to the Yen on the conclusion of the BOJ Press Conference.

Crude Oil – Crude Oil Hits $50 Mark

Crude Oil prices jumped a staggering $2 yesterday, hitting $50.55 a barrel, before closing at the $49.45 price level. This was owed to the good news coming out of the U.S. that the construction of new houses was up a better-than-expected 22% in February from a month earlier. This signaled to investors that the worst of the U.S. housing crash and recession was over, and that a recovery is in sight. Automatically, investors took advantage of this, leading to the bullish Crude prices.

The dramatic increase in Oil prices comes on the back of an OPEC meeting last Sunday, which was pessimistic about a global economic recovery. Ministers concluded at this meeting that they will delay any further supply cuts in Oil. In the coming days, Oil may climb further if the U.S. releases more positive economic data releases. Additionally, if the Crude Oil Inventories figures at 14:30 match forecasts or are better-than-expected, then Crude prices may hit $54 by the end of today’s trading.

Technical News

EUR/USD

There is a very accurate bullish channel formed on the 4 hour chart, as the pair is now floating in the middle of it. Currently, a bearish cross on the daily chart’s Slow Stochastic implies that a bearish reversal is imminent. Going short appears to be the right choice today.

GBP/USD

The cable has dropped over 200 pips in the last two days, and after peaking at 1.4205, it is now traded at 1.3960. The 1-hour chart shows that the RSI has reached the over-bought zone and has dropped straight down, suggesting that a downtrend might take place. A drop beneath the 1.3880 level might validate the bearish move.

USD/JPY

Lately, the pair has been trading within a restricted range, without making any significant breach. And now, a doji formation on the daily chart suggests that a sharp move is impending. With all oscillators pointing up, it appears that going long might be the preferable choice today.

USD/CHF

It appears that little by little that pair has lost strength over the past few days, as it is now testing the 1.1800 level. A bearish cross on the daily chart’s Slow Stochastic implies that the down trend could even deepen today. Going short with tight stops could be a good strategy today.

The Wild Card – Gold

Gold prices have dropped quite significantly over the past 4 days, and an ounce of gold is currently valued at $911.50. And now, the 4-hour chart shows that the current price has dropped beneath the Bollinger Bands’ lower boarder, suggesting that a sharp bearish move is impending. This might be a great 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 Ryan Ferrer

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By Sean Hyman

Be sure to check out the video….

Happy St. Patrick’s Day!

You know, when an economy does start to recover, it’s not widely known at the time. In fact, the news will still be as full of “gloom and doom” as ever even when it starts.

So you won’t know when the economy is turning by listening to the nightly news. So what can you look to?

Well, here is one widely watched economic barometer that institutional investors have used throughout the years. What is it? Copper

Now you may think, “What in the world does the price of copper tell us about the economy?”

Here’s why. Institutions say that “Copper has a PhD in Economics. Why? Because this commodity is so broadly used (in the building of homes and offices for plumbing and wiring to the building of computers and automobiles).  You can literally see the broad demand put upon this commodity as the demand starts to “tick up” for these goods.

With other leading indicators “ticking up” today such as Housing Starts and Building Permits (See today’s Bloomberg.com article here), I took a new look at copper as well to see what I saw. Here’s what it looks like.

Copper breaks its downtrend and heads higher for the first time in almost a year!

As you can see from the chart above, copper has not only broken its downtrend but also its sideways range and is preparing to head higher. Now how can that happen if there’s not more “copper buying” going on around the world.

On top of this, it seems that crude oil prices have finally stabilized too, and once oil prices finally hold above $50 a barrel again, it should be another “confirming sign” that the global economy has BEGUN the process of turning around.

I say “begun” because it takes time for the U.S. and global economy to be in “full bloom” once again. Therefore, the news will continue to be dire for a while longer.

But what does this mean for you? It means that if you are a long term stock investor, these could be better times to be a buyer (with cash, no margin buying) of ETFs and mutual funds if you have at least a 5-10 year time horizon for the investment.

For the currency investor, it means that you need to be on guard for the “dollar party” to come to an end once the world finally does realize that the global economy is turning. This could help the AUD/USD, NZD/USD and EUR/USD for instance as dollars are sold and commodities and inflation bloom once again. The former two pairs do best when commodities stabilize and boom once again…and the latter does good simply when the U.S. dollar does not do good since it acts as the best “anti-dollar” out there.

How do you think the stock market will perform in this coming week? Tell me what you think it will do and why. We will then be giving out three Investing Courses for free for the best answers.

Sean Hyman

Head Course Instructor

www.mywealth.com

By GCI Fx Research

€

The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3030 level and was supported around the US$ 1.2930 level.  The European Union will this week likely suggest that a credit line be made available for EU members that are not part of the eurozone to provide “balance of payments assistance.”  A credit line of €25 billion was made available in December and EU leaders are concerned that some EU members may not be able to meet their payment obligations unless additional aid is appropriated.  German Chancellor Merkel and French President Sarkozy are rallying EU members to get behind the G20 initiative to strengthen the international financial regulatory systems.  Group of Twenty officials are convening in London on 2 April and there is a lack of unanimty among attendees as to exactly what needs to be accomplished at the meeting. For starters, U.S. officials are said to be pressing their European counterparts to offer more of a fiscal stimulus to eurozone member countries.  European Central Bank member Draghi today reported “It’s possible that unconventional monetary policy measures may be needed.”  ECB member Mersch added there is “no evidence of a credit crunch” in Europe but would not rule out additional monetary easing.  Other European data saw Germany’s March ZEW index improve to -3.5.  Germany’s IWH Institute think tank downwardly revised its economic outlook for 2009 to -4.8% for German GDP growth from the previous forecast of -1.9%.  In U.S. news, February producer price inflation was up 0.1% m/m and off 1.3% y/y. Core PPI was up 0.2% m/m and 4.0% y/y.  Also, February housing permits were up 3.0% to 547,000 annualized units while February housing starts were up 22.2% TO 583,000 in February, the largest increase since 1990.  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 ¥98.95 level and was supported around the ¥98.05 level.  Bank of Japan is considering the provision of ¥1 trillion in subordinated loans to financial institutions to bolster their capital ratios and stimulate bank lending.  This policy is being deliberated to try and ease credit strains ahead of the fiscal year-end at the end of this month.  Data released in Japan overnight saw February revised machine tool orders up 7.2% m/m and off 84.4% y/y.  Additionally, the January tertiary industry activity index was up +0.4% m/m.  The Nikkei 225 stock index climbed 3.18% to close at ¥7,949.13.  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 ¥128.55 level and was supported around the ¥127.15 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥139.35 figure while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥83.65 level.  The Chinese yuan appreciated vis-à-vis the U.S. dollar today as the greenback closed at CNY 6.8369 in the over-the-counter market.

₤

The British pound moved lower vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.3965 level and was capped around the $1.4135 level.  Data released in the U.K. today saw the January DCLG house price index off 11.5%.  Separately, the government reported recent retail sales growth has been caused by rising food costs.  Cable bids are cited around the US$ 1.3720 level.  The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.9280 level and was supported around the ₤0.9205 level.

Daily Market Commentary provided by GCI Financial Ltd.

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

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

U.S. housing starts, building permits and housing completions increased in the month of February according to data released by the Commerce Department on new residential construction. Housing Starts unexpectedly increased by 22.2 percent in February to a seasonally adjusted annual rate of 583,000 starts following a revised annual rate of 477,000 housing starts in January.  February’s data was better than economic forecasts predicting a decline for the month to a 450,000 starts pace.

Building permits statistics, used as a predictor of future construction, showed a seasonally adjusted annual rate of 547,000 permits in February which is a gain of 3.0 percent compared to January. February’s permits also surpassed forecasts expecting permits to number approximately 500,000 annually.

Housing Completions for February increased when compared to January as completions rose to an annual rate of 785,000 privately-owned housing completions. This is an increase of 2.3 percent when from January’s completion totals.

Producer Prices edge up in February.

US Producer Prices increased less than expected in February according to a release by Department of Labor today. February’s producer prices edged up by 0.1 percent following an increase of 0.8 percent in January.  On an annual basis, producer prices have fallen by 1.3 percent compared to the February 2008 level and follow January’s 1.0 percent annual decline. Economic forecasts were expecting producer prices to increase by 0.4 percent for the month and to decline by 1.4 percent on an annual basis.

Core producer prices, excluding food and energy prices, grew by 0.2 percent in February following a 0.4 percent increase in January. On an annual basis, core prices have gained by 4.0 percent over the February 2008 level. Forecasts were expecting the core prices to increase by 0.1 percent in February and by 3.8 percent on an annual basis.

US Dollar showing gains today in forex trading.

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

The euro has declined versus the dollar today as the EUR/USD has gone from today’s 1.3004 opening exchange rate at 00:00 GMT to trading at approximately 1.2972 in the US trading session at 12:03pm EST according to currency data by Oanda.

The British pound has fallen today versus the American currency from 1.4123 to trading at 1.4026 dollars per pound. The dollar has advanced against the Japanese yen today as the USD/JPY has gained from its 98.32 opening to trading at 98.77.

The dollar has also gained against the Canadian dollar after opening at 1.2697 earlier today to trading at 1.2722. Meanwhile, the USD has fallen slightly against the Swiss franc from 1.1838 to trading at 1.1824.

The Australian dollar has declined versus the USD as the AUD/USD trades at 0.6586 after opening today at 0.6608 while the New Zealand dollar has fallen versus the USD and trades at 0.5287 after opening at the 0.5312 exchange rate.

Stay tuned tomorrow as the Federal Reserve interest rate decision is scheduled for 18:15pm GMT with market forecasts expecting the Fed to hold the interest rate at 0.25 percent.

USD/JPY Chart – The US dollar advancing against the Japanese yen today in Forex Trading and looking poised to make a run at 100 yen per usd. The dollar has not been above 100 yen per usd since early November.

Source: ForexYard

The European currency may gain further after Germany rebuffed a U.S. plan to increase fiscal stimulus to help pull the global economy out of recession. The fact the Euro-Zone nations avoided making any fresh commitments to extend spending, should encourage more investments in Europe and, as a result, to boost the EUR currency.

Economic News

USD – USD Hits 5 Weeks Low against the EUR

The Dollar pared losses against the EUR on Monday after the New York Federal Reserve Bank’s manufacturing index fell to a record low in March, adding to worries about the U.S. economy. The USD experienced some gains, rising to $1.3000 from around $1.3055 yesterday, however it still remained down 0.9% during the trading session.

Moreover, economic data published yesterday imply that the U.S. recession is likely to deepen further. To give an example of the type of negative data emanating from the American economy, the Empire State Manufacturing Index had its worst showing since 2001! This is also a signal that economic difficulties are starting to spread from the financial sector into the mainstream economy. Investors will have to adapt themselves to the upcoming economic hardships as these changes will not rectify themselves within a short period of time.

Later today, there are several important economic data releases coming out of the U.S. The most important of these publications is the Building Permits indicator at 12:30 GMT. The release is expected to be lower than the previous figure, meaning the USD could continue a level of bearishness today. Traders should stay close to the market as there is a strong chance to capitalize on the fluctuations which will likely follow this release.

EUR – EUR Gains against Major Currencies

The EUR experienced a bullish trading session yesterday, as it appreciated against most of its major currency pairs. The 16 nation’s currency hit a five-week high against the USD yesterday as gains in European stocks signaled investors’ willingness to take on more risk.

A rise in Euro-Zone inflation last month helped push the EUR above $1.30 for the first time since Feb. 10 in early trading. A pledge by the G20 finance ministers during a weekend summit to double the resources available to aid emerging market economies also lifted spirits.

In addition, European Central Bank (ECB) President Trichet said last week that deflationary risks were negligible, even as he left the door open to another Interest Rate cut. The central bank, which expects inflation to average just 0.4% this year, has already reduced its key Rate by more than half since early October to a record low of 1.5%.

Looking ahead to today, the most important financial indicator scheduled to be released from Europe is the German ZEW Economic Sentiment. Analysts are forecasting this figure to slightly decrease from its previous reading. Traders will be paying close attention to today’s announcement as a stronger than expected result may continue to boost the EUR in the short-term.

JPY – Yen Slides on Weakening Economy

The Japanese Yen completed yesterday’s trading session with mixed results versus the major currencies. The JPY fell against the EUR yesterday, pushing the oft traded currency pair to 1.2171. The JPY experienced similar behavior against the GBP as the pair rose from 137.50 to 138.50 by days end.

The Yen’s safe-haven appeal has, however, lost some of its luster due to a rapid deterioration in Japan’s economy, with the trade balance falling into deficit, and political uncertainty with an unpopular government facing an election that must be held by October. The Bank of Japan is seen likely to keep Interest Rates unchanged at 0.10% at a two-day policy meeting that ends on Wednesday. The BOJ is also expected to discuss whether to raise its purchases of government debt but market players are unsure if the central bank will make such a move at this week’s board meeting. The Bank may be forced to increase purchases of government bonds if the country’s economic slump deepens suddenly or banks start to fail, moving closer to a quantitative easing policy it has been trying to avoid.

OIL – Crude Oil Prices Soar $3 Higher

The Crude Oil’s gains on Monday were helped in part by an early rally in U.S. and European stock markets on growing confidence in the banking sector, which outweighed Organization of the Petroleum Exporting Countries (OPEC) decision not to cut production target further.
The cartel which met on Sunday, decided not to cut output further, but rather concentrate on existing cuts that total 4.2 million barrels per day since September. Some analysts said OPEC’s adherence to the existing cuts might be enough to offset falling demand and reverse the recent increases in oil inventories in many countries, including the world’s largest oil consumer, the United States. However, in light of U.S grim economic data which confirms that long recession in the world’s largest economy is far from over, the Crude might fall below $47 giving up its previous session’s gains.

Technical News

EUR/USD

It appears that the bullish trend may have run out of strength as the current price level pushed the pair into the overbought territory on the daily chart’s RSI, indicating that a downward reversal may occur later today. The hourly chart’s Slow Stochastic also appears to be showing an imminent bearish cross, which supports this notion. Going short with tight stops might be the right choice today.

GBP/USD

A bullish formation on the daily chart is still intact; however the momentum is already quite low. The 4 hour chart is maintaining a slightly bearish indication yet with no distinct conclusion. Also, there is a bearish cross forming on the hourly chart, indicating that the bearish signal is in place. Traders are advised to hold for the breach and then swing into it.

USD/JPY

The pair is continuing to provide mixed results, and is now trading around the 98.70 level. The hourly chart demonstrates a flat line ever since yesterday. However, the weekly chart’s Momentum oscillator still shows steep downward pressure. Traders are advised to wait for clearer indications on the hourly level before joining the trade.

USD/CHF

There appears to be a leveling-off in the price of this pair as the Bollinger Bands on the hourly chart appears to be tightening, signaling an impending volatile price movement. Most oscillators show a lack of distinct direction. On the other hand, range-trading behavior, allows traders to cut profits from buying on dips and selling on highs.

The Wild Card – USD/SEK

After the recent drop in value, the price of this pair appears to now be floating in the over-sold territory on the RSI of both the hourly and daily charts, signaling an upward correction may occur in the nearest future. The recent bullish cross on the 4-hour chart’s Slow Stochastic heavily supports this notion. As the Bollinger Bands on the hourly chart begin to tighten, a volatile upward correction may be occurring in today’s early trading hours. forex traders can take advantage of this imminent volatile movement by setting an early long position with tight stops.

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 appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3070 level and was supported around the US$ 1.2830 level.  The common currency has been bid higher from the $1.2660 level earlier in the month and this evidences a nascent sense of optimism in the markets and the return of some demand for risk to the market.  European Central Bank President Trichet talked the euro higher today saying “”We shall continue to offer the euro as a unique and irreplaceable anchor of stability and trust.  In the present very difficult circumstances it is more important than ever. Europe can rely on us to preserve that anchor.”  Data released in the eurozone today saw EMU-16 February consumer price inflation up 0.4% m/m and 1.2% y/y – the first monthly increase since September 2008.  The increase in inflation is unlikely to deter the European Central Bank from cutting interest rates at its April Governing Council meeting.  Other data saw EMU-15 employment decline for the second consecutive quarter in the October – December period, off 0.3% q/q.  G20 central bank and finance ministry officials convened in London this weekend to prepare for the G20 meeting on 2 April.  German officials reported more stimuli will not be of any use if trust is not restored. In U.S. news, the March NAHB housing market index was unchanged at +9 and the New York State Empire manufacturing index fell to -38.23, more-than-expected.  Additionally, February industrial production fell 1.4% m/m and 11.2% y/y and capacity utilization fell to 70.9%.  Moreover, it was reported that January total net TICS capital flows fell US$ 148.9 billion, a sizable decline that evidences how significantly demand for U.S. assets evaporated at the beginning of the year.  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 ¥98.65 level and was supported around the ¥97.55 level.  The Cabinet Office released its March monthly economic report and reconfirmed that economic and financial conditions in Japan remain grim with most sectors deteriorating.  Vice finance minister Sugimoto spoke today and Tokyo-area February department store sales will be released overnight.  Bank of Japan’s monthly economic report will be released on Wednesday along with the coincident and leading indices.  The Nikkei 225 stock index gained 0.96% to close at ¥7,704.15.  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 ¥128.70 level and was supported around the ¥125.50 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥140.00 figure while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥83.40 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

After depreciating consistently over the past few weeks, the USD is now traded over 1.29 against the EUR, and over 1.40 against the GBP. This week on Wednesday, at 18:15 GMT, the Federal Reserve will deliver an Interest Rates statement, and is widely expected to leave it on 0.25%. However, Bernanke’s speech from yesterday might hint that a rates hike is no longer taboo. Such decision could create mayhem for the leading currencies, and forex traders must be prepared.

Economic News

USD – USD Propped-Up by this Week’s Bullish Expectations

With a rally in stocks and other equity markets last week, traders witnessed a significant downtrend in USD pairs and crosses. Losing strength to almost all currency rivals, save the JPY, the greenback indeed suffered from this increase in risk appetite. Trading down against the EUR at 1.2926 last Friday, and also returning to the 1.4000 level against the GBP, the short-covering action on the USD inflicted some deep wounds to the American currency.

With few data releases helping or harming the EUR, the USD was likely losing strength from the unwinding of long positions on the Dollar in exchange for higher-yielding assets. In today’s early trading sessions, the USD regained some of its lost momentum and is currently trading at 1.2886 against the EUR.

As European markets come online later on, the increased liquidity may in fact push the USD lower against the EUR as European indicators are forecasting a lack of any significant change, whereas the U.S. government will be releasing figures which are predicted to present relatively bullish results. Under normal circumstances the USD would receive a positive boost, but during these times of recession and financial crisis, positive figures may result in an increase to risk appetite; causing a turn of events similar to those of last week. The USD could turn around from this morning’s gains and test the 1.3100 level by day’s end.

Traders should be watching for today’s release of Treasury International Capital’s (TIC’s) Long Term Purchases report, which is expected to indicate that demand for U.S. long-term securities has increased, most likely leading to a concurrent increase in demand for the USD. As interest in American securities increases, the value of the Dollar rises with it since investors must purchase these securities in USD. Whatever the outcome, today will likely see a sharp volatile movement in the value of the USD’s pairs and crosses.

EUR – EUR Lacks Clear Direction; Will Euro-Zone Confidence Continue Weakening?

After a week of solid gains against many of its currency rivals, the EUR now appears to be leveling off, and in some instances weakening against other currencies. Last week’s strength may actually have been attributed to an increase in risk appetite and therefore an unwinding of safe-haven USD positions, of which the EUR was the beneficiary. With neutral economic data emanating from Europe last week, this may indeed be the case. Ending the week up against the USD at 1.2926, and at 0.9228 against the GBP, the EUR made gains in its tug of war against its primary currency counterparts.

As economic suffering begins to build across Europe, the European Central Bank (ECB) is finding itself under greater pressure to reduce interest rates in an effort to stem the economic slide, as well as prevent a deflationary cycle from forming. With a multitude of countries comprising the European Monetary Union (EMU), it is less likely that further monetary easing can or will take place in the Euro-Zone, but a further reduction of interest rates is possible in the near future. With such a turn of events, the EUR is not likely to regain any mantle of strength in the coming days. As the USD leads the other currencies in making the market, EUR strength will most likely be attributed to an unwinding of Dollar positions, not from any inherent strength in the EUR itself.

Looking ahead this week, traders will see a series of data releases which would be foolish to ignore. Today’s consumer pricing and inflationary information for the region may set the tone for the EUR this week, but the market-maker for this regional currency is likely going to be tomorrow’s release of the ZEW economic sentiment reports from Germany and the broader Euro-Zone regional economy. If consumer confidence continues to decline, traders will likely see a reduction in interest rates happening much quicker, and potentially deeper than expected, and the EUR will continue to be sold off to fund safer investments. Without a strong vote of confidence this week, the EUR may be on the receiving end of a downward slump lasting through Friday.

JPY – Bank of Japan Desires Weaker Yen; Expect Monetary Easing?

After seeing a short rally from sudden USD-weakness, the JPY has now resumed its previous downtrend against many currency rivals. Ending last Friday at 98.01 against the USD and 126.43 against the EUR, the JPY has continued to weaken from the unpleasant economic situation which has been brewing in Japan these last few months. The Bank of Japan (BoJ) is scheduled to discuss another potential interest rate cut later this week, but with the lowest rate worldwide, a further reduction seems counter-productive.

The BoJ has made it clear that a weakened Yen is what they desire as it will help stimulate exports for this heavily trade-dependent nation. With further negative economic data set to be released this week, traders will likely see a continuation in the downtrend of the JPY through Friday.

Crude Oil – Output Cuts Claimed to Produce Results

The Organization of Petroleum Exporting Countries (OPEC) has recently claimed that their previous production cuts have begun to take effect and the price of Crude Oil has continued to hold strength. Finding support in the $40-50 price range, the price for a barrel of Crude Oil has finally stabilized, according to the cartel, and further production cuts will not be necessary since expectations are for demand to begin increasing by 2010.

Various accounts have been given for what a reasonable price for Crude Oil might be, and a few oil ministers from within the cartel are aiming for a price range near $70 a barrel. The expectation is for the price for Crude to hold within the current range until the recession begins to ease and demand picks back up. Once achieved, the price of Oil should climb back towards the $60-70 price range by early 2010. However, without accomplishing an economic turn-around, prices may drop once more and OPEC could consider a further production cut towards the end of this year.

Technical News

EUR/USD

On the 4 hour chart the moderate bullish price movement continues within the upwards channel which still has yet to be breached. The hourly chart is also joining that notion with the Slow Stochastic pointing to the continuation of upwards momentum. Next testing point should be around 1.2960. Going long appears to be preferable today.

GBP/USD

Since Friday’s trading session the Cable recouped losses, appreciating from 1.3730, up to 1.4063. The Slow Stochastic of the 4 hour chart is showing no crosses in the horizon, and the bullish momentum there appears to be intact as well. Daily chart’s oscillators also support this notion. Placing long positions might be a right choice for today.

USD/JPY

The pair is showing local bullish momentum on the 4 hour chart after a very violent drop to the 95.77 level. On the hourly chart however, the pair continues to trade within quite a wide range, while the Bollinger Bands are getting tighter indicating that possible breach out of range might be imminent. By now, it would probably be recommended to stay out of this pair until a strong and distinctive signal will appear

USD/CHF

The 4 hour and the daily charts indicating that the bullish trend has not yet said its last word as this currency pair is in the midst of a strong upward trend. However the hourly chart’s RSI and Slow Stochastic indicators are pointing down. A preferable strategy might be waiting for a clearer signal on the hourlies.

The Wild Card – NZD/USD

It seems that the bullish momentum is back again as the carry trade pair is heading up with plenty of room to run. All of the technical oscillators on the hourly and the daily charts are giving a bullish signals and this pair’s target today might be the 0.5300 level. This gives forex traders a great opportunity to rejoin the market at an excellent entry price.

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 Donald Ogilve

They say there is a shortcut to everything, provided you are ready to pay for it. This is true about Forex trading also; well sort of. If you are a novice trader, you may find Forex trading just a little bit too complex, with so many things happening at the same time. So much so that it is really difficult to follow everything closely. It is not that the Forex trading is inherently hard to understand, but it takes time and patience to comprehend its multiple aspects.

What if you have a very short supply of both? Does that automatically mean your Forex Trading career should end before it beings? Isn’t there any shortcut available to Forex trading so that you don’t need to go through the painful research and try to figure out trends every time you would like to trade, at least when you first start? You may find yourself asking all these questions. Also, it would be handy if you could tap into the market at every available opportunity. However there are times when moves may happen when you are not online. You would therefore be completely unaware of them.

Automatic Forex trading signals provide a solution of sorts to the problems mentioned above. You can receive automatic Forex trading signals either via software which you have to install on your computer, or via membership of a website that provides automatic trading signal services. The con side is that these are usually paid services. In case of software, it could a one-time payment. In this case, the system is yours to use as you please. However, in the case of enrolling to an automatic Forex trading signal service, you need to pay monthly membership fees, which usually vary between $50 and $500, generally.

The way these signals work is very simple. Your software or your signal-providing agency will do all the necessary research and signal you when to buy or sell particular currency pairs. The idea here is that it eliminates all research, speculation and strategizing that you need to do. Simply open a Forex account, get an automated Forex trading signal service and buy or sell according to the trading signals sent by the automatic service.

The mathematicians, software developers and experienced Forex traders usually work in collaboration in order to build such systems. Therefore one would expect that they would work well. However, like any product in the world, there are some services or software that are of good quality and some are really bad. Reputable sources would be a good place to start.

You will rightfully wonder how come, if these services are as successful as their owners claim, all Forex traders don’t use them. Experienced Forex traders usually already have a time-tested method, which they follow and have complete faith into. Therefore, they would not like to change it for anything as these strategies have worked out for them for years. Also, being very experienced, they do not find Forex marketing very complicated any more and feel no need to hand the control over to someone else, or even a machine for that matter. Newer traders are likely to be confused about whether it is right to trust an automatic service. The answer is that you don’t necessarily have to trust them completely.

People can have various reasons not to try out these methods. Using a Signal Service can be very useful to learn about the markets. A good way to use them is to ensure that, for every signal you get, you understand the reasons why. You can try a service for a short time, and use them to learn about Trading while you are actually trading yourself. If you think that you want to start trading but are feeling low on confidence, you can try out an automatic Forex trading signal service. If nothing, it will enhance your knowledge about how to conduct your trades.

About the Author

Donald Ogilve is a Part-Time Forex Trader. To learn more about making money Forex Trading an hour a day visit Donald Ogilve’s Blog at ForexInitiate.com.