Month: April 2009

Source: ForexYard

The euphoria of last month’s equity rally has finally worn off and the Dollar is the primary beneficiary in these market conditions. The Dollar tends to rise as equity markets weaken with reducing risk taking in the currency markets.

Economic News

USD – Dollar Rises as Risk Taking Disappears

Yesterday a drop in equities signaled an end to the higher risk taking environment and helped to strengthen the Dollar against the EUR and the GBP. The Dollar also rose to a 5-month high against the Japanese Yen to close above the significant 100 Yen mark. The Dollar tends to rise as equity markets weaken, reducing risk taking in the financial markets. On Monday the Dow Jones Industrial Average finished lower by 0.5% and at the end of the day the EUR/USD was at $1.3373 from 1.3572. The GBP/USD was at1.4681 from 1.4927, while the USD/JPY slid 0.4% to 100.53 Yen.

The announcement by the Federal Reserve that it has initiated new currency swap agreements with the European Central Bank, Bank of England, Swiss National Bank, and the Bank of Japan did not significantly impact the currency valuations yesterday. The move was seen as a step by the Fed to ease liquidity concerns for foreign national investors who purchase U.S. government bonds. The main driver yesterday in the forex market was the drop in U.S. equities.

Trading of the Dollar this week could continue to track equity markets as last month’s rally may have been a bit premature. Global market sentiment was riding high but yesterday’s trading atmosphere may have brought the reality of the economic situation back to earth. There have been very few economic indicators painting a different economic picture. Until there are, the EUR/USD may continue to fall towards its next support level of 1.3250.

EUR – Pound Continues its Bullish Trend

The Euro-Zone economy continues to show signs of weakness and yesterday was no exception. European retail sales fell more than twice the forecasted value as the economic situation continues to worsen. This was the largest yearly drop since the record has been tracked. Further erosion was seen in an investor confidence survey; though this result was slightly better than expected. The data highlights a European economy that has not shown signs of improvement.

This scenario has been apparent in the trading of the EUR/GBP. The Pound has jumped 4% on the EUR in the past 18 days. The trend has extended its gains as better than expected economic data has been seen from Britain the past week. Perhaps the Bank of England was successful in lowering their benchmark rate to 0%, well ahead of the European Central Bank’s strategy which has entailed a measured pace to reduce European Interest Rates.

Today’s trading of the EUR crosses may be influenced by the release of monthly manufacturing production data from Britain. Manufacturing makes up almost 80% of the industrial production in Britain. Therefore this release is treated as a leading indicator. If the reading comes in better than the 1.4% contraction forecasted for the previous month, look for the EUR/GBP to continue its decline to the 0.9050 mark.

JPY – Yen Hits a 5-Month Low against the Dollar

The Yen continued its decline against the Dollar, touching on a 5-month low during yesterday’s trading. After the USD/JPY struck the 101.42 level the pair immediately reversed course. During early morning hours of the Japanese trading session the pair was still declining near the 100.50 mark. The recent decline of the Yen was due to a significantly distressed Japanese economy and a rally of global equity markets this past month.

The appreciation of the Yen seen early this morning may depend on the outcome of the Bank of Japan’s (BoJ) press conference later today and the performance of global equity markets. A bullish statement from the BoJ could lead some traders to believe the BoJ is forecasting a rosier financial climate in Japan. Also a continuation of losses in global equity markets could increase the appetite for the Japanese Yen. If this happens, look for the Yen to trade near the 100.25 level.

OIL – Crude Drops Sharply on Equity Losses and a Strong Dollar

The price of Crude Oil fell sharply yesterday as a strong Dollar and weaker equity markets dampened investor’s sentiment. Crude largely tracked U.S. equity markets which were sent lower on worries in the banking sector and overall market attitudes. This was the case with the previous month when Oil prices rose, tracking the rise of global stock markets.

These rallies and drops in the price of Crude present a terrific opportunity for traders to take advantage of market volatility. As the commodity follows the tone set in other financial markets, gains can be made by taking positions in the same direction of the U.S. equity markets. If the trend continues today with further losses in the Dow Jones, Crude could finish the trading day at $50.

Technical News

EUR/USD

Yesterday the pair has fully resumed its downtrend as it breached through the 1.34 level. Currently, all oscillators on the 4 hour chart are pointing down and it seems that another bearish session is quite imminent. Going short might be a preferable strategy for today.

GBP/USD

The Cable is continuing to deliver coherent bearish signals, and is now traded around the 1.4700 level. On the hourly chart, the current price has dropped beneath the Bollinger Bands lower boarder, suggesting that the pair may drop once more. Opening short positions might be the right choice today

USD/JPY

An upward movement on the 4 hour chart is running full steam ahead. A distinct bullish channel hasn’t been breached yet, while 101.50 might be the next target price. The daily chart also confirms that notion; therefore going long may be a preferable strategy today.

USD/CHF

After peaking at 1.1406 yesterday, the pair has been going through a moderate bearish correction. A bearish cross on the daily chart’s Slow Stochastic indicates that the downwards momentum is still intact. Going short might be the right choice today.

The Wild Card – Crude Oil

Oil prices are once again dropping, and a barrel of Light Sweet Crude is currently traded around $51. And now, all oscillators on the daily chart are giving bearish signals, indicating that the Oil prices might continue sliding. This might give forex traders a great opportunity to enter quite a 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 Fast Brokers

The EUR/USD popped from the inflection point of our 1st tier downtrend line and 2nd tier uptrend line on Friday as U.S. equities continued their upward momentum.  Indicators all around are pointing towards an economic recovery, the EUR/USD included.  The currency pair is following its positive correlation with the S&P futures, representing an investor return to risk.

However, the EUR/USD still has several fundamental obstacles to the upside as compared to the GBP/USD.  The relative strength of the Pound is also reflected in the downward pressure present in the EUR/GBP.  First, the EUR/USD must brave through the thick of the March trading zone and 2009 highs, not to mention several foreseeable downtrend lines.  Investors are still confused as to the future monetary policy plans of the ECB since Claude Trichet ambiguously left the door open for future cuts after the meeting last week.  Additionally, if the Eastern European economies weaken further, exposing EU banks to more losses, the ECB may have no choice to implement quantitative easing.

The less than expected 25 basis point cut last week didn’t exactly have its desired impact, and investors are reading into the move as an effort to create a sense of confidence.   That being said, the EUR/USD still broke through all of our resistances and the psychological 1.35 barrier.  We are simply giving an explanation for the currency pair’s subpar performance as compared to the GBP/USD.  The EUR/USD has made some impressive strides, and if it can brave above 2009 highs then we can see a large near-term movement to the upside.

The momentum remains to the upside, yet we could see a little consolidation in the near-term.  We placed two new downtrend lines on our chart to give you a better idea of upcoming battle areas.  Fundamentally, we find supports of 1.3523, 1.35, 1.3476, 1.3442 and 1.3413.  To the topside, we see resistances of 1.3568, 1.3591, 1.3633, 1.3665 and 1.37.  The 1.35 area becomes a psychological cushion with 1.40 serving as a key psychological barrier.  The EUR/USD is currently exchanging at 1.3526.

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

Eurozone Retail Sales decreased in February according to a news release by EuroStat earlier today. February retail sales declined by 0.6 percent in the 16 country Eurozone after increasing by a revised 0.1 percent in January.

The retail sales decline was more than expected as market forecasts had expected sales to decline by 0.4 percent for the month. On an annual basis, February’s retail sales numbers dropped 4.0 percent below the February 2008 level.

Contributing to the decline in retail sales was a sales decrease of 1.1 percent in the non-food sector while sales in the food, drinks & tobacco sector was flat for the month.

Producer Prices decline in August.

Producer Prices in the eurozone fell in February from January according to a separate report released from EuroStat today. Producer prices decreased by 0.5 percent in the month of February following a decrease of a revised 1.1 percent in January.

On an annual basis, producer prices have fallen 1.8 percent from February 2008 following a revised 0.7 percent annual decrease in January. Market forecasts were expecting monthly producer prices to decline by 0.5 percent and the annual rate to register a decrease of 1.5 percent.

Producer prices, excluding energy prices, fell by 0.4 percent for the month of February. Contributing to the decreased producer prices was a decline of 0.7 percent in energy sector prices while non-durable goods fell by 0.3 percent and intermediate goods decreased by 0.9 percent.

European currency mixed in Trading Today.

The 16-nation Euro has been mixed today in trading against other major currencies.

The euro has declined against the US dollar as the EUR/USD trades at 1.3403 in the afternoon of the U.S. session at 3:43pm EST after opening the day at 1.3571(00:00GMT).

The euro is virtually unchanged against the British pound as the EUR/GBP trades at 0.9096 from its 0.9092 open. Against the Japanese yen, the euro has fallen from 136.86 to 135.35 in today’s trading action while against the Swiss franc, the euro has also declined as the EUR/CHF has fallen from 1.5273 to 1.5237 francs per euro.

The euro is also trading virtually unchanged against the Canadian dollar compared to today’s opening rate as the EUR/CAD trades at 1.6609 from 1.6606 while the euro has declined against the Australian and New Zealand dollars.  The EUR/AUD has declined to 1.8799 from 1.8853 and the EUR/NZD trades at 2.2798 after opening at the 2.2823 exchange rate.

EUR/USD Chart – The Euro falling against the US Dollar today in currency trading(4-Hour Chart). The EUR/USD pair is trading right at the intersection of the 21-period simple moving average(green) and 55-period simple moving average(blue).

By Adam Hewison

I have to admit, I love trading Forex. It’s one of the most exciting and most profitable markets in the world.

In today’s short educational trading video on the dollar/yen (usd/jpy), I explain step-by-step how to analyze the dollar and its relationship to the Yen. I will also show you exactly what I think is happening right now in this relationship. Watch the video and see specific target zones where I think this cross is headed in the future.

Watch it with our compliments. You do not have to register to watch the video.

See the Video here.

If you have time, let us know what you think on our blog.

All the best,

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

By GCI Fx Research

€

The euro came off vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3380 level and was capped around the US$ 1.3580 level.  U.S. equity markets weakened on news that IBM was pulling out of a deal to acquire Sun Microsystems.  Many traders are also hestiant to enter new long positions ahead of the upcoming release of corporate first quarter earnings.  The common currency was also pressured lower on news that the International Monetary Fund has proposed that Central and Eastern European European Union members should be permitted to join the eurozone as quasi-members.  The European Central Bank is strongly objected and countered by saying “The position of the European Central Bank is very well known: we consider the implementation of the treaty criteria to be indispensable. All the treaty, nothing but the treaty.”  ECB member Bini Smaghi called for “verbal discipline” from policymakers when discussing exchange rates.  Data released in the eurozone today saw the EMU-16 producer price index decline 0.5% m/m and 1.8% y/y – its largest annual decline in ten years.  Many traders believe these weak data will encourage the ECB to reduce interest rates further.  Other data saw February retails ales off 0.6% and the Sentix investor confidence index improved to -35.3 from -42.7.   In U.S. news, the March employment trends index fell 2.3% to 90.1.  Dealers are talking about the Obama administration’s statement that it may replace senior managers at U.S. financial institutions if they do not do an adequate job in turning their companies around.  Euro bids are cited around the US$ 1.3245 level.

¥/ CNY

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥101.45 level and was supported around the ¥100.15 level.  Bank of Japan reported it will provide the Federal Reserve with up to ¥10 trillion in a liquidity swap agreement to assist U.S. banks access foreign currency.  Data released in Japan overnight saw February leading indicators improved to 20.0 from 9.1 in January.  The Nikkei 225 stock index climbed 1.24% to close at ¥8,857.93.  U.S. dollar offers are cited around the ¥104.15 level.  The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥134.70 level and was capped around the ¥137.40 level.  The British pound moved lower vis-à-vis the yen as sterling tested offers around the ¥148.45 level while the Swiss franc moved lower vis-à-vis the yen and tested offers around the ¥88.40 level.  The Chinese yuan was unchanged vis-à-vis the U.S. dollar today as the greenback closed at CNY 6.8343 in the over-the-counter market.

₤

The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.4725 level and was capped around the $1.4955 level.  Chancellor of the Exchequer Darling reported the U.K.’s recession is “worse than we thought” and said any economic growth “may be in the back end of the year.”  Bank of England reported it will establish a temporary currency swap agreement with the Federal Reserve if required to ensure an adequate supply of sterling liquidity to the U.S. if required.  CBI reported U.K. businesses had better access to credit in the three months to March than the previous three month period.  Cable bids are cited around the US$ 1.4515 level.  The euro came off vis-à-vis the British pound as the single currency tested bids around the ₤0.9035 level and was capped around the ₤0.9110 level.

CHF

The Swiss franc depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1405 level and was supported around the CHF 1.1240 level.  Swiss National Bank reported it has expanded its Swiss franc swap facility with the Federal Reserve.  U.S. dollar bids are cited around the CHF 1.1165 level.  The euro moved lower vis-à-vis the Swiss franc as the single currency tested bids around the CHF 1.5220 level while the British pound gained ground vis-à-vis the Swiss franc and tested offers around the CHF 1.6885 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

Last week’s release of negative employment data from the United States has many forex traders running from the USD. With a rally taking place among Euro-Zone currencies, as well as the price of Crude Oil, there appears to be plenty of investment opportunities more profitable than the U.S. Dollar lately. Forex traders would be wise to change gears and pick up other investments than the typical safe-haven of the USD.

Economic News

USD – U.S. Sees Worst Unemployment Figures Since 1983

Last week was mainly a bearish week for the Dollar. The USD dropped significantly against the EUR and the GBP. The EUR/USD crossed the 1.35 level, and the GBP/USD was traded at an almost two-month high, after reaching to 1.4890.

Last week was filled with important data regarding the U.S economy. First, the Manufacturing Purchasing Managers’ Index was seen at a 5-month high after reaching the 36.3 mark. In addition, the housing sector in the U.S continued to show recuperating signals as the monthly Pending Home Sales rose by 2.1% in February. However, all this had little effect on the U.S Dollar as the Non-Farm Employment Change report climbed to a 25-year high with over 663,000 people losing their jobs in March, making it the fourth consecutive month in which the U.S economy lost more than 650,000 jobs.

With all respect to the improving housing sector, such horrifying figures are an immense warning sign for all those who feel that the crisis is now behind us and not ahead of us. The weakening of the greenback on almost all fronts was fairly expected in light of the problematic job sector.

As for the week ahead, a lot of extremely influential data will be published, and most attention will be focused towards two of them. First, the U.S. Trade Balance which measures the difference in value between imported and exported goods and services. Analysts expect that the deficit has continued to narrow throughout February. Second, the U.S Unemployment Claims, which measures the number of individuals who filed for unemployment insurance for the first rime during the past week. This week the report will have an even stronger impact than it usually does, as investors are anxious to see whether the poor job sector in the U.S. is likely to continue. Traders are advised to pay attention to these publications and set their positions on the USD accordingly.

EUR – The EUR Continues to Strengthen against the Majors

Last week the EUR underwent bullish trends against most of its major currency counterparts. The EUR/USD rose to about 1.3580, and the EUR/JPY reached the 136.80 level. However, the EUR saw a falling trend against the GBP throughout most of the trading week.

The most significant notification which came from the Euro-Zone over the past week was definitely the European Central Bank’s (ECB) decision to cut interest rates to 1.25% from 1.50%. Normally, when a region announces its cutting interest rates, the automatic reaction to it is the weakness of the local currency. However, this time, on a fascinating turn of events, the exact opposite effect took place. A reason for this is as follows: for about a month now, analysts have anticipated that the ECB will have no choice but to cut interest rates, as the European interest rate was much higher than those in the U.S, Japan and Great Britain; however, for the past week or so, everyone was under the impression that the ECB will cut interest rates at least by half a percent. When it was announced that the ECB will cut interest rates by only 0.25%, most investors were caught by surprise, which caused them to reevaluate their positions, concluding in a very strong bullish trend for the EUR.

As for this week, traders are advised to focus on the German economic data. On Wednesday at 10:00 GMT, the monthly German Factory Orders will be published. This report, which measures the change in the total value of new purchase orders placed with manufacturers, is expected by analysts to drop for the sixth consecutive month. On Thursday at 10:00 GMT, the monthly German Industrial Production report, which measures the change in the total inflation-adjusted value of output produced by manufacturers, is expected by analysts to drop for the sixth consecutive month as well. If the real results will be similar to the forecasts, the current trend may reverse, and the EUR/USD could significantly drop. Traders should follow the announcements and try to make profits from the effects of these results.

JPY – The Yen is Losing Ground on All Fronts

The JPY saw an extremely bearish session last week, and it will be certain to say that if you went short on the JPY, you now have more funds in your equity than you had before. The USD/JPY for example, has crossed the 100.00 barrier for the first time in six months.

Two reasons have led to the JPY’s downfall over the past week. One, two very important Japanese economic indicators delivered unfortunate figures. The Preliminary Industrial Production, which measures the change in the total inflation adjusted value of the output produced by manufacturers, dropped by 9.4%, making it the fifth drop in a row. In addition, the Tankan Manufacturing Index, which measures general business conditions, dropped to a -58 mark, reflecting a 34-year low. The second reason for the weakness of the Yen is the Japanese economic policy that tries to do its best to encourage the local exporting and believes that the best way to do this is via a weak currency. These are the main reasons for the Japanese low interest rates, which are made to keep the Yen as weak as possible.

As for the week ahead, the most significant data expected from Japan will be the Overnight Call Rate, on which the Japanese interest rates for April will be revealed. As for now, the Bank of Japan (BoJ) is widely expected to leave it at 0.10%, as it can’t really drop it further. In conclusion, unless sudden changes will take place, the JPY will probably continue to face downtrends against the major currencies in the upcoming week.

Crude Oil – Could Crude Oil Reach $55 a Barrel?

Crude Oil’s prices continued to rise during last week’s trading session. A barrel of oil has breached through the $50 price for the first time in two weeks, and it is currently valued for over $53.00 a barrel.

It appears that Crude Oil is rising on speculations that the global economic stimulus decided on at the G20 meeting will indeed put an end to the recession, and with the beginning of 2010 we might even see the first signs of global growth. All of these speculations have led investors to think that the demand for oil will increase dramatically throughout 2009. In addition, the deteriorating USD has also contributed to the spike in oil prices as Crude Oil is valued in Dollars.

Looking ahead to this week, traders are advised to watch carefully after the leading stock markets and the major economic indicators which will be published from the U.S. and Euro-Zone in order to predict the next movements in oil prices. Nevertheless, in case the USD continues to weaken as it has lately, $55 a barrel seems like a very realistic target for this week.

Technical News

EUR/USD

The latest uptrend in this pair has pushed the price into the over-bought territory on the RSI of the hourly and 4-hour charts, indicating that a downward correction may be imminent. With fresh bearish crosses occurring on the hourly and 4-hour charts’ Slow Stochastic, this notion may indeed be correct. Going short might be a wise choice today.

GBP/USD

The steadily rising value of this pair has recently generated a bearish cross on the Slow Stochastic of the hourly, 4-hour, and daily charts, signaling that a downward move is likely to occur in the nearest time-frame. With the price floating in the over-bought territory on the hourly and 4-hour charts’ RSI, this notion indeed carries weight. Going short might be a good strategy today.

USD/JPY

There appears to be a bearish cross on the Slow Stochastic of the 4-hour chart, signaling a downward correction may occur shortly. The price of this pair also seems to be floating in the over-bought territory on the hourly chart’s RSI. Going short and riding out the impending downward correction may be wise today.

USD/CHF

This pair’s recent drop has pushed the price into the over-sold territory on the RSI of both the hourly and 4-hour charts, signaling an upward correction could be in the making. With a bullish cross recently occurring on the 4-hour chart’s Slow Stochastic, this move may indeed be imminent. Going long might be a good choice.

The Wild Card – Gold

Gold’s recent plummet has most oscillators signaling an imminent upward correction. With the price floating in the over-sold territory on the RSI of the hourly, 4-hour, and daily charts, this upward movement may occur in the nearest future. The bullish crosses on the Slow Stochastic on each of these charts also support this notion. Forex traders have a great opportunity to capture the impending correction and make strong gains by placing early long positions after the upward turn has been made.

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.

U.S. Nonfarm Payrolls employment data released today showed that jobs continued to fall at a very high rate in the U.S. as employment declined by over 600,000 for the fourth month in a row. The Department of Labor nonfarm payrolls report showed that U.S. payrolls shed 663,000 jobs in March following a drop of 651,000 jobs in February.

This was the fifteenth straight month that companies have shed workers and the unemployment rate jumped from 8.1 percent to 8.5 percent bringing the rate to its highest standing since 1983.

January’s job decline was revised higher to show a loss of 741,000 jobs which registered the largest fall in employment since 1949. The amount of jobs lost since December 2007 has now totaled 5.1 million according to the Labor Department and 3.3 million of those jobs have been shed in the last five months.

The March Labor Department report just surpassed market forecasts that were expecting a loss of 660,000 jobs and matched forecasts expecting the unemployment rate to reach 8.5 percent.

The decline in jobs was spread throughout most economic sectors with the exception of the education & health services sector which saw 8,000 jobs created in March. The service-providing sector was the hardest hit by job losses for the month as this sector lost 358,000 total jobs with professional & business services shedding 133,000 workers, retail trade cutting 48,000 workers and leisure & hospitality losing 40,000 workers for the month.  Government employment also declined by 5,000. The goods-producing sector lost 305,000 jobs for the month as the manufacturing sector cut 161,000 jobs and the construction sector lost 126,000 jobs.

U.S. Dollar mostly lower today in Forex Trading.

The U.S. dollar has been losing ground in forex trading against most of the major currencies after today’s employment report. The dollar has fallen against the euro, Australian dollar, Swiss franc, New Zealand dollar and the British pound while gaining ground versus the Japanese yen.

The euro has advanced in trading versus the dollar from today’s 1.3441 opening at 00:00GMT to trading at approximately 1.3484 in the late afternoon of the US trading session at 4:06pm EST according to currency data by Oanda. The British pound has increased versus the dollar as the GBP/USD has gone from its 1.4722 opening rate to trading at 1.4832 in the U.S. session.

The Australian dollar has gained slightly versus the USD with the AUD/USD trading at 0.7155 after opening today at 0.7151. The New Zealand dollar has also made a small gain versus the US dollar as the NZD/USD trades at 0.5866 after opening the day at the 0.5856 exchange rate.

Against the Swiss franc, the USD has been falling today for the second straight day as the USD/CHF has declined from its 1.1352 opening to trading at 1.1316. The dollar has also declined against the Canadian dollar after the USD/CAD opened at 1.2407 earlier today to trading later at 1.2308.

The dollar has managed to make gains against the Japanese yen as the USD/JPY has climbed from its 99.67 opening to trading at 100.23 later today.

USD/JPY Chart – The US Dollar advancing against the Japanese Yen in Forex Trading today. The Dollar surpassed the 100 yen to the dollar mark and reached its highest trading level against the Yen since early November 2008.

By GCI Fx Research

€

The euro came off vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3515 level and was supported around the US$ 1.3220 level.  U.S. March non-farm payrolls printed at -663,000 and the unemployment rate reached 8.5%, a new 25-year high,.  Average hourly earnings were up +0.2% and January’s non-farm payrolls tally was revised for the worse by 86,000 jobs.  The U.S. economy has now shed more than five million jobs since the U.S. recession started in December 2007.  Other U.S. data today saw the March ISM non-manufacturing index contract to 40.8 from 41.6 ub February.  These negative service sector data suggest the economy may be contracting more than expected and conflicts with recent U.S. economic data that suggested the economy may have bottomed out in late Q1.  Some traders view the final outcome of the Group of Twenty meeting as a success while others believe it was short on details including a lack of a commitment on the part of all nations to increase their fiscal stimuli.  In eurozone news, the EMU-16 composite PMI rallied to 38.3 from 36.2 in February, the largest monthly gain since October 2003.  Many dealers believe the European Central Bank will enact quantitative easing measures in May.  Euro bids are cited around the US$ 1.3245 level.

¥/ CNY

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥100.25 level and was supported around the ¥99.35 level.  Today’s represents the first time the greenback has traded above the psychologically-important ¥100 figure since 4 November.  The yen lost some ground across the board as some investors expressed satisfaction with the outcome of the Group of Twenty meeting.  Bank of Japan is expected to broaden its quantitative easing framework this year.  The Nikkei 225 stock index climbed 0.34% to close at ¥8,749.84.  U.S. dollar offers are cited around the ¥104.15 level.  The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥133.15 level and was capped around the ¥135.00 figure.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥148.70 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥88.45 level.  The Chinese yuan depreciated vis-à-vis the U.S. dollar today as the greenback closed at CNY 6.8343 in the over-the-counter market, up from CNY 6.8340.

₤

The British pound moved higher vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.4845 level and was supported around the $1.4645 level.  The March PMI services index improved to 45.5 from 43.2 in February.  Data released on Wednesday saw manufacturing PMI strengthen and there is increasing speculation the U.K. economy may have bottomed out.  Other data saw Halifax March house prices off 1.9% m/m and off 17.5% y/y.  Cable bids are cited around the US$ 1.4515 level.  The euro came off vis-à-vis the British pound as the single currency tested bids around the ₤0.9040 level and was capped around the ₤0.9160 level.

CHF

The Swiss franc depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1390 level and was supported around the CHF 1.1315 level.  Data released in Switzerland today saw March consumer price index off 0.3% m/m and off 0.4% y/y.  Swiss National Bank is likely to maintain its quantitative easing framework.  U.S. dollar bids are cited around the CHF 1.1165 level.  The euro moved lower vis-à-vis the Swiss franc as the single currency tested bids around the CHF 1.5205 level while the British pound gained ground vis-à-vis the Swiss franc and tested offers around the CHF 1.6835 level.

Daily Market Commentary provided by GCI Financial Ltd.

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By Adam Hewison

The dramatic run up that we have seen in the S&P 500 may be coming to an end. The retracement back over the 840 level should provide sufficient resistance to reverse this market to the downside.

Now here is the caveat, our long-term indicator, the monthly “Trade Triangle” remains negative on this market. While the direction of our weekly timing “Trade Triangle” is on the sidelines and neutral. This has created a conflict, meaning that conservative traders should remain on the sidelines to protect capital.

I am looking for an area to once again get short this market and trade with the major trend in our favor.

My downside target zone is for an eventual move down to the 500 level. Only if we take out highs as I mention in the video, then this analysis will change.

I hope you enjoy this short video. I will cover two important elements in trading: the Elliott wave theory, and the other is the Fibonacci retracement levels that I like to watch and trade with.

See the Video

As always, the video is available with our compliments and there is no requirement to register to watch this video.

All the best,
Adam Hewison

President, INO.com
Co-creator, MarketClub

Source: ForexYard

A surprise 25 point basis point Interest Rate cut by the ECB is being digested by the currency markets. But traders won’t have much time to pause as the high impact Non-Farm Employment numbers are released later today.

Economic News

USD – USD Weakens from Negative U.S. Data and Positive EUR News

The USD experienced a rather rough day of trading yesterday, with a substantial loss to the EUR and GBP. After the European Central Bank (ECB) failed to reduce Interest Rates as deep as forecasted, there was a modest rebound in the value of the EUR against its primary currency pair, the U.S. Dollar. Ending Thursday at 1.3456 against the EUR, and 1.4731 against the GBP, the greenback has seen better days.

Two rather important currency valuating events have taken place over the previous few weeks. The first was the announcement of quantitative easing by the U.S. government, an event which dropped the value of the USD to the 1.3700 price level against the EUR. This loss was held in check, however, as most investors anticipated a similar move by the ECB. As this was not forthcoming this week, the second event was a renewed sell-off of USD in exchange for higher yielding assets on Wall Street as well as a buy-up of more unique currencies as a hedge against the perceived future weakness of the current safe-haven currencies.

As this week comes to an end, there is still room for a market shock during Friday’s trading hours. With a calendar chalk full of important events, traders are highly advised to participate in the heavy news-trading day ahead of them. The U.S. government will be releasing its monthly Non-Farm Employment Change report at 12:30 GMT alongside the announcement of the U.S. unemployment rate. A disappointing payrolls report could send the EUR/USD above the 1.3500 resistance level tested in the early hours of the Japanese trading session.

Later in the day, Federal Reserve Board Chairman Ben Bernanke will be delivering a speech titled “The Fed’s Balance Sheet” at the Richmond Federal Reserve Bank’s Third Annual Credit Market symposium. Traders often use Bernanke’s testimonies and speeches to speculate about future monetary policy decisions by the Fed, generating high market volatility during these events.

EUR – EUR Gains Strength as Risk Appetite Increases

The EUR gained momentum throughout today’s trading hours as the European Central Bank (ECB) left room for future monetary policy adjustments by only reducing Interest Rates by a 25 basis points, from 1.50% to 1.25%, yesterday. Forecasts were for a reduction of half a percentage point in expectation of the ECB taking quantitative easing measures similar to those in the United States. As this was not yet forthcoming, the EUR has rebounded slightly to the 1.34 price level against the USD.

When the United States announced its plans for quantitative easing, there was a heavy sell-off of the USD, but the losses the greenback experienced to the EUR were held in check by the assumption that the ECB would follow the States with an announcement of a similar initiative. Now that the ECB has rejected the notion of deep rate cuts followed by quantitative easing, at least for the time being, the sell-off of USD, the purchase of EUR, and the increase in risk appetite have wrought havoc in the forex market in the form of heavy volatility. Those who benefited by going long on the Dollar throughout these past few months may want to consider changing tactics for the time being.

The British Pound also made moderate gains, at least against the USD, as some housing data released yesterday generated a stronger movement towards less liquid assets and a short-term rebound in confidence. Following tomorrow’s release of inflationary data from Europe and Britain, traders will get a glimpse into what may be occurring at the start of next week. The Pound could continue its recent bullish run against the EUR below the 0.9100 mark.

JPY – Japanese Yen Continues to Deteriorate

The Japanese Yen has seen better days. Over the past week this island economy’s currency has consistently depreciated against the majors, losing considerably against the USD and EUR. The level of this depreciation does not appear to have any stops in the making. Japan has maintained a posture of weakening its currency to boost exports, but the added weight of an unwinding of JPY safe-haven trades may have pushed its value lower than anticipated.

The resultant free-fall in the value of the JPY has begun to shake the confidence which many investors had in the island economy and expectations are now sliding further into the red for the economy’s recovery. With little economic news being released by Japan, the end of this week’s trading will likely see a continuation of this falling trend in JPY crosses. Against the USD, the JPY could finally settle above the 100.00 Yen level today.

OIL – Crude Oil Prices Stabilizing as Dollar Relationship becomes More Solid

The price of Crude Oil has become much more predictable this past week. With a sharp appreciation following some negative U.S. data, the value of Crude then continued to sink back below $50 a barrel. However, as the USD weakens once more, the price of Crude has once again made a jump in the direction of the mid-$50 price range. Crude Oil’s value has begun to react much more realistically to the value of the Dollar; this in turn brings a level of stability to Oil trading in the commodities market, which traders can benefit from greatly.

With Crude Oil Inventories falling slightly this past month, there is a perception that demand has slightly increased in the short-term, while long-term demand remains negative. As the Dollar continues to weaken, traders will most likely see the value of Crude Oil climb back towards $55 a barrel through next week, unless the Dollar gains back its recent losses.

Technical News

EUR/USD

The pair failed to break the resistance level of 1.3500 earlier today and now trades near the 1.3410 mark. The 4-hour chart is showing a bearish cross on the Slow Stochastic Oscillator and the pair’s RSI is currently floating in the overbought region. This signals downward movement may take place later today. Traders today may look to short this pair.

GBP/USD

The 4-hour chart has the Cable floating in overbought territory on the Relative Strength Index and a bearish cross on the Slow Stochastic, signaling potential depreciation of the pair. The hourly chart currently shows the pair’s Bollinger Bands tightening, signaling a violent breach is possible. Placing short positions might be a good strategy for the day.

USD/JPY

This pair has experienced a bullish trend the past 12 days and may be due for a correction. The daily chart shows a bearish cross forming on the Slow Stochastic with the pair trading in overbought territory on the RSI. There may be potential for a downward price movement. The 4-hour chart also has the RSI trading in overbought territory, and the Bollinger Bands on the hourly chart appear to be tightening, an indicator that a breach of the lower border is possible. Going short may be the preferable strategy today.

USD/CHF

The range trading on the 4-hour chart continues as the pair has not make a significant move in either direction. The RSI is currently floating in neutral territory and the Slow Stochastic is in the middle zone. However, the hourly chart’s Bollinger bands are currently tightening, signaling a violent breach may be imminent. Traders may want to wait for the breach then swing.

The Wild Card – Crude Oil

Yesterday’s price spike may have left the commodity in overbought territory. The 4-hour chart currently shows the RSI floating in the overbought zone and a bearish cross is visible on the pair’s Slow Stochastic Oscillator. This may give forex traders a good opportunity to go short on Crude Oil 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.