Month: May 2009

Source: ForexYard

The U.S Consumer Confidence report which was released yesterday, gave a surprisingly positive result, suggesting that the public is retaining its faith in the North-American economy. In today’s trading, traders should pay special attention to the Existing Home Sales indicator scheduled for 14:00 GMT, as another positive figure could further strengthen the USD.

Economic News

USD – Dollar Pairs Gains On Positive Consumer Confidence

The greenback advanced versus all of its major counterparts as signs of improving consumer confidence in the United States combined with worries about Germany’s banks hurt the European currency after a rally last week. The Conference Board’s U.S. consumer confidence index rose in May to 54.9 from an upwardly revised 40.8 in April. The U.S currency strengthened after a media report questioning the health of the German banking system prompted traders to trim back bets against the Dollar.

In trading just before midday in New York, the Dollar was up 0.2% versus the EUR to $1.3893, after touching a session low of $1.3859. The Dollar also rose against the Japanese Yen, trading at 95.10 Yen compared with 94.77 Yen late Friday. But after the release of the U.S. confidence numbers, the EUR also regained some ground against the Dollar, and was at $1.3984 in late New York trade.

The Dollar traded at 5 month lows last week, pushed lower in part by concerns that soaring deficits may threaten the United States’ ‘AAA’ sovereign debt rating. However, the Dollar would likely hold its value even if the U.S. lost its AAA credit rating, because demand for government securities among foreign central banks is unlikely to wane, according to analysts.

Another round of important economic data from U.S is ahead, the Existing Home Sales. The indicator will be published on Wednesday at 14:00 GMT, and is expected to rise from 4.57 million to 4.65 million. A good figure could help the Dollar with retracting its last month’s falls against the EUR.

EUR – EUR Hit by Concerns over German banking sector

The European currency depreciated for the first time in 7 days, eroding advances that pushed it last week to the highest level in 4 months. The 16-nation currency fell against the Dollar on speculation last week’s gain was too large to sustain, reducing the currency’s appeal. The EUR dropped 0.2% to $1.3982 from $1.4017 yesterday. It touched $1.4051 on May 22, the highest level since Jan. 2. Against the Yen, the EUR traded at 132.87, compared with 132.92 yesterday.

The Euro-Zone currency was hurt by plummeting share prices and weak economic data. A media report questioning the health of the German banking system also prompted traders to cash in on the EUR’s recent rally. EUR’s depreciation versus the Dollar came after the report over Germany’s debt situation. Although not new, the report warned that German banks have bad assets of around 200 billion euros ($280 billion).

However, according to technical analysis the EUR may advance further versus the Dollar after the 50-day moving average rose above the 200- day average for the first time since September. The EUR 50-day moving average, currently at $1.3409, surpassed the 200-day moving average at $1.3385 today. Both are good bullish signals analysts say.

JPY – Yen Down Versus the U.S Dollar

The Japanese yen weakened as U.S. economic reports added to evidence the start of a recovery is near, reducing demand for safety. The JPY fell against 15 of the 16 most-active currencies after data showed U.S. consumer confidence climbed this month to the highest since September.

The JPY held declines against the Dollar after a government report showed the world’s second-largest economy unexpectedly posted a trade surplus in April. The Yen bought 95.36 versus the dollar from 95.03. The Yen declined to 133.34 per EUR from 132.90 yesterday.

Oil – Crude Rallies on U.S Consumer Confidence

Crude Oil prices rose as much as 0.8%, to $62.35 a barrel, its highest settlement in more than 6 months in New York yesterday as U.S. benchmark stock indexes climbed for the first time in 5 sessions. Crude extended its gains after rising yesterday as a report showing a jump in U.S. consumer confidence triggered an advance in equities. The biggest gain in consumer confidence since 2003 spurred optimism the worst of the recession is over in the world’s largest oil-consuming nation.

Oil was falling earlier in the session on expectations that the Organization of Petroleum Exporting Countries (OPEC) won’t cut production quotas at a Thursday meeting. OPEC raised its oil production in April for the first month since September, as some member countries took advantage of a recent rally in oil prices, data from the International Energy Agency showed.

OPEC, responsible for 40% of global crude supply, is likely to keep output quotas unchanged for a second time this year as recovering oil prices forestall the need for new cuts, according to analysts.

Technical News

EUR/USD

After peaking at the 1.4050 level, the pair has slightly dropped and is currently traded at the 1.3960 level. It appears that a technical correction might take place, as a bearish cross has been formed on the 4-hour chart’s Slow Stochastic. Going short could be the right choice today.

GBP/USD

After a few failed attempts to breach through the 1.6000 resistance level, it appears that the bullish momentum has reached its limit. Currently, as all oscillators on the daily chart are pointing down, it appears that a modest bearish movement might take place.

USD/JPY

There is a very distinct bullish channel forming on the 1-hour chart, as the pair is now floating near its upper boarder. The daily chart continues to provide bullish signals as the RSI has left the over-sold area, and is pointing back up. It seems going long could be the preferable choice today.

USD/CHF

The pair has experienced a lot of volatility lately, as a triple doji formation was formed on the daily chart. However, as a bullish cross is taking place at the daily chart’s Slow Stochastic, it appears that a bullish correction might be imminent.

The Wild Card – Gold

After over a month of very strong bullish movements, on which an ounce of gold was traded for over $960, it appears that a bearish correction is now taking place. Currently, as the daily chart’s RSI has dropped below the 70 line, it seems that the bearish move could extend. This might be a great opportunity for forex traders to join a very popular trend.

Forex 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 weakened vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3860 level and was capped around the US$ 1.4020 level.   The common currency failed to keep pace with a strong showing from U.S. equity markets as the Dow registered a 200+ point gain through mid-day North American trading.  Data released in the U.S. today saw the March S&P/Case-Shiller home price index decline 18.7% while the May consumer confidence survey improved to 54.9 from a revised 40.8 in April.  The present sub-index and expected sub-index rallied nicely with the latter jumping to 72.3 from a revised 51.0 in March.  Traders are closely watching developments regarding the fate of General Motors, the U.S. automotive giant that is facing a series of deadlines this week.  In eurozone news, the EMU-16 current account balance improved for the fourth consecutive month in March, printing at -€6.5 billion from a revised February tally of -€7.8 billion.  Also, EMU-16 March industrial new orders were off 0.8% m/m and 26.9% y/y.  Additionally, German GDP was off 3.8% q/q in the first quarter and down 6.9% y/y.  Moreover, French April consumer spending was up +0.7% m/m and +0.6% y/y.  GfK reported the June German consumer confidence number stable at 2.5.  Euro bids are cited around the US$ 1.3435 level.

¥/ CNY

The yen appreciated marginally vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥94.50 level and was capped around the ¥95.15 level.  The yen was mixed across the board as traders reacted to a mixed bag of eurozone and U.S. economic data.  Data released in Japan overnight saw the April corporate service price index print at 92.7, off 0.2% m/m and 2.4% y/y.  Bank of Japan and the Cabinet Office both upgraded their assessments of the Japanese economy yesterday and the government expects positive economic growth in the April – June quarter.  The Nikkei 225 yesterday stock index lost 0.39% to close at ¥9,310.81.  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 ¥131.45 level and was capped around the ¥133.30 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥151.50 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥87.80 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8355 in the over-the-counter market, up from CNY 6.8255.

₤

The British pound moved higher vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.5965 level and was supported around the $1.5775 level.  Bank of England Monetary Policy Committee member Sentance indicated he sees indications the worst of the economic downturn has passed and added he is “hopeful” the economy will improve later this year or in 2010.  Cable bids are cited around the US$ 1.5315 level.  The euro lost ground vis-à-vis the British pound as the single currency tested bids around the ₤0.8755 level and was capped around the ₤0.8805 level.

CHF

The Swiss franc depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.0925 level and was supported around the CHF 1.0810 level.  Data released in Switzerland today saw the Q1 employment level remain unchanged at 3.96 million.  U.S. dollar offers are cited around the CHF 1.1165 level.  The euro lost ground vis-à-vis the Swiss franc as the single currency tested bids around the CHF 1.5125 level while the British pound moved higher vis-à-vis the Swiss franc and tested offers around the CHF 1.7295 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. home prices continued to decline and fell a record amount in the first quarter of 2009 according to the Standard & Poors/Case-Shiller index released today.  The Standard & Poor’s/Case-Shiller Home Price Index measures sale prices of existing single-family homes nationally and tracks 10-city and 20-city composite home price measurements.

The first quarter of 2009 home prices report showed that the National Home Price Index fell by a new record of 19.1 percent when compared to the first quarter of 2008. The house price report for the month of March showed that the 20-city composite index fell an annual rate of 18.7 percent while the 10-city composite index declined by 18.6 percent when compared to last year.

The areas hardest hit in March were Phoenix, Las Vegas and San Francisco with annual declines of 36.0 percent, 31.2 percent and 30.1 percent, respectively. On an annual basis, none of the 20 metropolitan areas measured showed house price increases with Dallas and Denver being the areas with the lowest declines at 5.6 percent and 5.5 percent, respectively. On a monthly basis, Charlotte registered the highest house price gain with a rise of 0.3 percent while Denver saw a 0.1 percent gain and Dallas showed no change in March. Minneapolis registered the largest house price decline with a fall of 6.1 percent while Detroit saw a decline of 4.9 percent for the month.

David M. Blitzer, Chairman of the Index Committee at S & P, commented in the report saying, “All 20 metro areas are still showing negative annual rates of change in average home prices with nine of the metro areas having record annual declines. Seventeen metro areas recorded a monthly decline in March, with Minneapolis, Detroit and New York posting record monthly declines. On a positive note, nine of MSAs are reporting a relative improvement in year-over-year returns and nine of the 20 metro areas saw an improvement in their monthly returns compared to February. Furthermore, this is the second month since October 2007 where the 10- and 20-City Composites did not post a record annual decline.”

U.S. Consumer Confidence gains again in May.

U.S. Consumer Confidence rose by the most in six years according to the Conference Board Consumer Confidence Index released today. The consumer index, representing responses from 5,000 U.S. households, showed that consumer confidence increased to a 54.9 score this month following a revised 40.8 score in April. Today’s report brought consumer confidence to its highest level since September 2008 and marked the second consecutive month of better than expected gains. The 14.1 point increase easily surpassed market forecasts that were expecting consumer confidence to edge up by approximately 1.2 points to a 42.0 score for the month.

The other two parts of the survey also saw increases in May.  The present situation section of the index increased to 28.9 from 25.5 in April while the expectations index surged from 51.0 in April to 72.3 this month.

Lynn Franco, the Director of The Conference Board Consumer Research Center commented in the report on the increased readings, “After two months of significant improvements, the Consumer Confidence Index is now at its highest level in eight months (Sept. 2008, 61.4). Continued gains in the Present Situation Index indicate that current conditions have moderately improved, and growth in the second quarter is likely to be less negative than in the first. Looking ahead, consumers are considerably less pessimistic than they were earlier this year, and expectations are that business conditions, the labor market and incomes will improve in the coming months.”

Forex – U.S. dollar lower in Forex Trading today.

The U.S. dollar has been trading lower in forex trading today against the major currencies.  The dollar has declined versus the euro, British pound, Canadian dollar, Australian dollar, New Zealand dollar and Swiss franc while showing a gain versus the Japanese yen.

The euro has advanced versus the USD as the EUR/USD trades at 1.3988 in the afternoon of the US trading session at 2:46pm EST after opening the day at 1.3971 according to currency data from Oanda. The British pound has gained as the GBP/USD has gone from its 1.5878 opening rate to trading later at 1.5930.

The dollar has edged up against the Japanese yen today as the USD/JPY has increased from its 94.62 opening to trading at 95.01.

The dollar has fallen against the Canadian dollar after opening at 1.1265 earlier today to trading at 1.1178 later. Meanwhile, the USD has also declined against the Swiss franc as the USD/CHF has gone from 1.0863 to trading at 1.0839.

The Australian dollar has gained versus the USD as the AUD/USD trades at 0.7847 after opening today at 0.7778 while the New Zealand dollar has also increased versus the USD as the NZD/USD trades at 0.6244 after opening the day’s trading at 0.6178.

USD/CAD Chart – The US Dollar continuing to fall today versus the Canadian Dollar in Forex Trading. The USD has fallen six out of the last seven days against the CAD and today traded at its lowest point since October.

By Adam Hewison

This video is a little bit different from our previous videos in that we show you some of the new improvements we’ve just added to MarketClub.

I just got the word from my business partner Dave Maher, who is the technical part of the team that he had just upgraded the MarketClub charts. I was so excited at the improvements that I decided to rush over to our digital studios and create a new video. All credit goes to Dave and his team who did an outstanding job on this new MarketClub release.

One major improvement and one I believe you’re going to really enjoy and profit from is a study called “Donchian Channels”. This study is named after its inventor Richard Donchian who created this amazing technical juggernaut in the late 40s.

There are also a ton of other improvements like, cross hairs and a new 200 day moving average study which I think you’ll enjoy. You might be surprised at how I use the 200 day moving average.

You can view this new video with our compliments. There are no registration requirements. Please enjoy and give your feedback on our blog. Thank you.

See the New Video Here…

All the best,

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

By Adam Hewison

Here’s a key video to look at this week.

I was just looking at the S&P 500 and I noticed a very pronounced cycle in this market that I want to share with you.

In my new video I explain exactly what I’ve seen and what I expect will happen to this market if this cycle continues on track.

You can view this new video with my compliments. There are no registration requirements. Please enjoy and give your feedback on our blog. Thank you.

See the New Video here…

All the best,

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

Source: ForexYard

Traders witnessed one of the first vital pieces of information from the Euro-Zone which actually put a dent in the plans of the EUR. The German Ifo Business Climate report failed to meet expectations and slightly lowered investor confidence in the 16-nation currency. As a result, traders may indeed see a reversal in the making for the EUR/USD unless today’s news puts a halt to the correction. Sticking close to the calendar today and betting on news releases would be a wise move for the weary trader today as the movements of the forex market are not yet stabilized.

Economic News

USD – Is a USD Rally in the Making?

The Dollar rose marginally against the European currency as the economic calendar in the U.S. was blank due to a bank holiday. The knock-on effect of this was a forex market with less volatility than usual. In reality this translated into little fluctuations in the USD and its main crosses.

Many analysts have been worried about the greenback’s rapid deterioration in value in the past several weeks. They are beginning to ask themselves, “Is a reversal in the making?” In Monday’s trading, the EUR/USD rate reached as high as 1.4028. However, the pair ended up lower by 15 pips for the day at 1.3974. Against the Pound, the USD was unchanged at 1.5877. The Dollar gained versus the JPY by 10 pips to close at 94.73.

This behavior shows that in late trading hours, the Dollar reversed some of its losses, and started gaining against the major currencies. This may be due to 2 main factors. Firstly, the Dollar has been over-sold lately, and is under-valued. Secondly, the bank holiday in the U.S. made the forex market more flat than it would have been under normal market conditions. The slightly negative German Ifo Business Climate news release from Germany may have also helped weaken the EUR in late trading. This is compounded with the fact that other major economies are in even more dire straits than the U.S.

Looking ahead to today’s news, the most important economic news release coming out of the U.S. is the CB consumer confidence figures at 14:00 GMT. The release is a top measure of U.S. consumer spending. Therefore, the results are likely to be pivotal in driving the direction of the market both before and after the data release. Traders are advised to take-up positions in the majors, while volatility is still low, in order to make some profits in the USD and its dominant crosses.

EUR – EUR Declines against Greenback

The EUR slipped slightly against the Dollar as the markets failed to take a clear direction yesterday. It can be said that speculation alone cannot drive the EUR higher due to some of the recent data releases. This was shown when the German Ifo Business Climate report put some downward pressure on the EUR as investors realized that the Euro-Zone currency may be slightly overvalued against the USD, and other major currencies.

The Dollar gained 15 pips against the EUR, reversing a near-2-week trend to close at 1.3974. The EUR/GBP cross finished yesterday’s trading to close marginally lower at 0.8799. The EUR/JPY pair was virtually unchanged at 132.36. The question now is can the EUR return to its bullish run against the greenback? It is valid to say that there is more to back the EUR in theory than the USD or the GBP. Both the U.S. and Britain have lower Interest Rates than the Euro-Zone. Additionally, Europe has been more conservative than her 2 economic rivals in printing money. Furthermore, Britain and the U.S. have mounting deficits, whereas the Euro-Zone doesn’t. It seems reasonable to say that the long term bullishness may belong to the EUR, rather than to her main currency rivals.

Today, there are plenty of economic indicators from the Euro-Zone that are likely to help determine the EUR’s main crosses going into mid-week trading. The Current Account and Industrial New Orders are set to be published at 8:00 and 9:00 GMT respectively. The impact of these releases will show forex traders the health of the Euro-Zone economy. This could signal if the European currency is overvalued, and if it can uphold its bullish run against the Dollar. The impact of this will be increasingly felt, especially as the markets moved little in yesterday’s trading due to British and American bank holidays. Traders are advised to open positions now, in order to make profits when volatility kicks in.

JPY – JPY Strength Uncertain, Heavy News Week may Help

The Yen failed to topple the Dollar yesterday, despite a bearish Dollar in the last few weeks. The pair actually closed up 10 pips at 94.73. The release of the worse-than-forecasted CSPI figures in late trading helped prevent the JPY from gaining bullish momentum against its major currency pairs.

There was very little movement in the EUR/JPY pair as it closed at 132.36. However, the Yen lost a bit of ground against the British currency to finish trading at 150.45. These small forex market currency fluctuations were largely owed to the British and American bank holidays yesterday. Nevertheless, markets are set to be much more volatile today, as forex market volatility returns to more normal conditions in the coming hours.

The short-term future of the JPY depends on the speed of the global economic recovery. If things do improve quicker than many analysts anticipate then the Yen may start to go bearish. This is increasingly the case if the U.S. raises Interest Rates before all of the other industrialized countries. Today, in late trading the Monetary Policy Meeting Minutes and Trade Balance figures at 23:50 GMT are likely to help determine the JPY’s strength going into mid-week trading. A 95.50 USD/JPY rate may be a possible by tomorrow’s close. However, it is wise to open positions in the JPY now as news from the Euro-Zone and U.S. is published.

Crude Oil – Crude Oil Prices Decline 1%

The price of Crude Oil tumbled 1% in yesterday’s trading to $60.90. This comes despite increased optimism from the Organization of Petroleum Exporting Countries (OPEC) recently. However, many analysts expect the price of Oil to climb through the long-term as market conditions return to normal. Many analysts believe that the long-term prospects for Crude Oil are between $75-80.

In the meantime, the price of Crude Oil may only start going bullish again when the Dollar continues its decline, and if OPEC makes no output increases in their next meeting in Vienna, Austria on the 28th of May. In today’s trading, the economic figures coming out of the U.S. and Euro-Zone are likely to impact the volatility of oil prices and traders would be wise to enter the market before this volatility kicks off.

Technical News

EUR/USD

The sustained upward movement these past few trading days has apparently generated a bearish cross on the daily chart’s Slow Stochastic, indicating a longer-term downward correction may occur shortly. As the weekly Momentum oscillator begins to turn a corner, we may very well be seeing a reversal in the making. Going short to enter this new trend may be a wise move today.

GBP/USD

The price of this pair appears to be floating in the over-bought territory on the RSI of the daily chart, signaling long-term downward pressure. A fresh bearish cross on the daily chart’s Slow Stochastic supports this notion. A downward correction may be in the works for this pair in the medium-term. Entering with short positions directly after the downward breach may be a smart decision today.

USD/JPY

There appears to be a head-and-shoulders formation on the hourly and 4-hour charts for this pair, signaling an imminent, rapid downward movement. However, the Slow Stochastic on the hourly chart shows a fresh bullish cross, signaling the next movement may be upwards. With the price floating near the over-sold territory on the daily chart’s RSI, the longer-term trend may be up. Waiting for a clearer signal might not be a bad choice today.

USD/CHF

The price appears to have just exited the over-sold territory on the 4-hour chart’s RSI indicating the upward correction may be running out of steam. However, the daily chart’s Slow Stochastic appears to have a fresh bullish cross, which signals further corrective movement may be in the works. Going long with tight stops might be a solid decision throughout the day.

The Wild Card – USD/TRY

There appears to be a fresh bullish cross on the 4-hour chart’s Slow Stochastic for this pair, signaling an upward movement may be in the making. With its sustained downward movement over the past weeks, this pair is overdue for a rebound. With fresh bullish crosses on the MACD for the hourly, 4-hour and daily charts, this rebound may indeed be developing. Forex traders can definitely take advantage of this swing by buying this pair now, and at a great entry price.

Forex 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.

Source: ForexYard

Many forex traders witnessing the strong bearish trends across the USD pairs and crosses have been wondering when it will come to an end. As last week’s U.S. housing market data and unemployment figures proved worse than forecast, mixed with a boom in confidence for Euro-Zone economies such as Germany, the USD went negative. However, this week’s data forecasts could create the rumblings of a reversal for the greenback. This exciting volatility is where money is made in the forex world; don’t miss out!

Economic News

USD – Dollar Drops on Poor Data

The American Dollar saw an extremely bearish session during last week’s trading as it dropped in value against all the major currencies. The EUR/USD actually rose to the 1.4000 level for the first time in 5 months!

It appears that two main economic indicators have initiated the USD’s downfall on all fronts throughout last week. For starters, the U.S Building Permits report revealed that hopes for an improvement in the U.S housing sector are currently unrealistic, as only 490,000 new residential building permits were issued during April. Many analysts have assumed that the first significant step in pulling out of the recession will be shown from the housing sector. The reason is very simple, it was the mortgages crisis that caused this gloomy economic condition, and a real improvement in the housing sector would have shown that both investors and the major banks have regained confidence in American real-estate, which should be a sign for all others that the economy is recuperating.

In addition, on Thursday, the weekly Unemployment Claims showed that 631,000 individuals have filed for unemployment insurance for the first time, making it the 16th week in a row on which over 600K people have done so. The combination of these two publications had a very clear effect on the Dollar, and its drop in value was only a matter of time.

As for the week ahead, a bundle of data is expected from the U.S economy, and traders should take notice of all of the major indicators. The Consumer Confidence report is expected on Tuesday, and analysts predict that the best result in six months may be published. This has the potential effect of reversing trends in the forex market, as it will show that people are regaining their confidence in the US economy, and in their government to improve the situation in the near future. The New Home Sales on Thursday will probably steal all of the attention on a busy news day, as the housing sector seems to have the biggest impact on the USD for the moment.

EUR – The EUR Soars amid Positive German Data

Last week the EUR saw bullish trends against most of its major currency counterparts, as its most significant appreciation was against the USD. The EUR/USD rose to over 1.4000, marking a 5-month record.

Last week’s trading was highly impacted by the positive signals from the German economy. Germany is the biggest and strongest economy in the Euro-Zone, and thus has the most influence on the region’s currency. On Tuesday, the German ZEW Economic Sentiment report was published with an amazing 31.1 mark. The Economic Sentiment is a diffusion index based on surveyed institutional investors and analysts. The 31.1 figure was the most positive figure seen since June 2007. What was so incredible about this result was that it followed a series of negative publications and was really “out of the blue.” This had an immediate reaction on the EUR and a strong bullish trend, especially against the USD, took place. Later on last week, the German Manufacturing Purchasing Managers’ Indices were release, both with better than expected figures, further strengthening the EUR.

Looking ahead to this week, the most important data expected from the Euro-Zone will be published later on today, at 08:00 GMT. The German Ifo Business Climate, which is derived from about 7,000 businessman who are asked to rate the level of current business conditions, has proven before to have a significant impact over the EUR, especially when analysts forecast that the positive signs from Germany will continue with a 85.1 figure. If the real result will be similar, another bullish trend might take place for the EUR, and the EUR/USD may hit as high as 1.4200 this week.

JPY – JPY Provides Mixed Results against the Majors

The Yen saw mixed results during last week’s trading. While rising sharply against the USD, the JPY dropped against the EUR and underwent a volatile session against the GBP.

It seems that the negative results coming from the Japanese economy are the main reason for the Yen’s volatile behavior. Last week it was released that the Japanese Preliminary Gross Domestic Product (GDP) had dropped by 4.0% in March, making it 4 consecutive months on which the value of all goods and services produced by the Japanese economy dropped. The Tertiary Industry Activity, which measures the change in the total value of services purchased by businessman, has also decreased by 4.0% in March. In addition, the Bank of Japan (BoJ) has decided to leave Interest Rates at 0.10% as it cannot drop it farther and is unwilling to raise it at the moment. On normal conditions, all this should have led to a significant drop for the JPY against every major currency; however, the bearishness of the Dollar was the leading force in the forex market last week, and thus even the weak Yen rose against the USD.

As for the week ahead, a batch of data is expected from the Japanese economy. The Trade Balance scheduled for Tuesday will be one of the most impacting publications as the Japanese economy relies greatly on its exports, and this report is one of the best ways to estimate this nation’s economic condition. Traders should also consider the Retails Sales and the Household Spending indicators which could possibly dictate the Yen’s movements later this week.

Crude Oil – $60 a Barrel Might Be a Solid Price for Crude Oil

Last week was a relatively calm week for Crude Oil. A barrel of oil was traded within the $59 to $62 price range, and wasn’t too affected from the large fluctuations of the leading currencies.

Recent Notifications suggest that the Organization of Petroleum Exporting Countries (OPEC) desires to see Crude Oil reaching $70 a barrel; however, it is currently reluctant to cut supplies as demand for oil still hasn’t shown real signs of recovery from the current world-wide economic crisis. In spite of OPEC’s will, it appears that investors are pretty cautious on putting their faith in Crude Oil. Even in a week like the last one, on which the Dollar dropped on all fronts, Crude Oil barely rose by $2 a barrel. This could be interpreted as a clear sign of investors that for now the price around $60 a barrel correctly reflects the market value.

Technical News

EUR/USD

The Bollinger Bands on the hourly chart for this pair appear to be tightening in expectation of a volatile price movement. With a recent bearish cross on the 4-hour chart’s Slow Stochastic, and a brand new bearish cross on the daily chart’s, this pair may be due for a strong downward correction. With the RSI of the 4-hour chart floating in the over-bought territory, going short may indeed be a wise choice today.

GBP/USD

There appears to be a fresh bearish cross on the daily chart’s Slow Stochastic, signaling a bearish correction may take place this week. As the price floats in the over-bought territory on the daily chart’s RSI, and the 4-hour chart’s Slow Stochastic shows fresh bearish crosses, going short with tight stops throughout the day may be a solid move.

USD/JPY

The technical oscillators on this pair primarily indicate neutrality as a clear direction is refusing to reveal itself. However, the price does appear to be floating near the over-sold territory on the daily chart’s RSI. Longer-term pressure may be upward and going long with tight stops may therefore be a good decision.

USD/CHF

The price of this pair is apparently floating in the over-sold territory on the 4-hour chart’s RSI, signaling upward pressure. With a fresh bullish cross on the daily chart supporting this notion, going long may indeed be a wise choice today.

The Wild Card – Gold

There appears to be a “head-and-shoulders” formation taking shape on the hourly chart. With the price in the over-bought territory on the 4-hour and daily charts’ RSI, and a fresh bearish cross on the daily chart’s Slow Stochastic, the subsequent movement once the “head-and-shoulders” is completes will likely be a volatile downward correction to the recent upward movement. Forex traders should try not to miss out on this impending move and join the new trend at an early stage!

Forex 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.

The United Kingdom’s Gross Domestic Product fell by the most in twenty years in the first quarter of 2009 according to a report by the Office of National Statistics today. The U.K. GDP data showed that quarterly GDP fell by 1.9 percent in the January through March quarter following a decline of 1.6 percent in the fourth quarter of 2008. The 1.9 percent GDP decline marked the largest decrease in quarterly GDP since the third quarter of 1979 and matched the government’s previous 1st quarter estimate released last month.

On an annual basis, the first quarter GDP fell by 4.1 percent from the level of the first quarter of 2008 and marked the largest annual decline since 1980. The 2008 fourth quarter registered a decline of 2.0 percent.

Contributing to the contraction in GDP was a record decline in business inventories and a slowdown in consumer spending. Business inventories fell by the most on record since 1948 and amounted to a 0.6 percent decrease in the GDP for the quarter. Consumer spending, which was the lowest since 1980, fell by 1.2 percent in the first quarter and by an annual rate of 2.8 percent from the 1st quarter of 2008.

Total production output in the first quarter decreased by 5.3 percent after falling by 4.5 percent in the fourth quarter. Construction activity fell by 2.4 percent while manufacturing output declined by 5.5 percent. Total services output saw a decline by 1.2 percent in the first quarter after a 0.8 percent decline in the fourth quarter while exports fell by 6.1 percent and imports decreased by 5.9 percent.

Contributing positively to the GDP data was government spending which increased by 0.3 percent in the quarter and climbed by 3.5 percent on an annual basis from 2008.

GBP Pound Sterling mixed in FOREX Trading.

The pound sterling has been mixed in forex trading today against the other major currencies. The British currency is trading higher today versus the US dollar and Japanese yen while trading lower against the Swiss franc, euro and Canadian dollar.

The GBP/USD has advanced from the day’s opening exchange rate of 1.5854 at 00:00 GMT to trading at 1.5909 in the US session at 12:33pm according to currency data from Oanda. The pound is on its way to increasing versus the dollar today for the fifth straight day after paring early losses yesterday to finish higher.

The euro has increased versus the pound as the EUR/GBP trades at the 0.8809 exchange rate after opening the day at 0.8785. The euro is on its way to its second straight daily gains against the GBP.

The pound has increased versus the yen today as the GBP/JPY has advanced from the 149.32 opening rate to trading later at 150.33 exchange rate.

The pound is trading lower against the Swiss franc for the second day in a row as the GBP/CHF trades at 1.7252 after opening at 1.7291.  The pound has also decreased today against the Canadian dollar as the GBP/CAD trades at 1.7876 after opening the day at the 1.7973 level.

GBP/USD Chart – The British Pound is trading higher today against the US Dollar in forex trading and is on its way to increasing versus the dollar today for the fifth straight day after paring early losses yesterday to finish higher.

Source: ForexYard

The USD’s volatility is set to continue today as forex trader’s eye Federal Reserve Chairman Ben Bernanke’s speech as 6 GMT. In the meantime, however, it would be a wise move for investors to open some important positions as they can take advantage of the forex market prior to and after this main news event. Key economic data releases from the leading economies should also be a vital inspiration for traders today.

Economic News

USD – Dollar Tumbles to a 5 Month Low

The U.S currency continued to slip against the EUR yesterday, dropping 1% to as low as 1.3950. It also dropped to its lowest this year against many of its other major currency pairs as worries about swelling U.S. deficits soured investor’s appetites on U.S. assets.

The Dollar has fallen every day this week against the EUR and Pound Sterling, and it marked its third straight daily decline against the Japanese Yen yesterday. Analysts attributed the fall in the Dollar, which has been treated as a lower risk, safe-haven investment, to growing optimism that the worst of the financial crisis has passed. This has caused investors to unwind positions in favor of the U.S. currency built up when fear was widespread, credit was frozen and stock markets were in free fall.

A leading indicator released yesterday was U.S. Unemployment Claims. This number handedly beat last week’s result. However, it failed to provide strength to the Dollar as investors may be waiting for key data due to be released today to implement their trading strategies.

Looking ahead today, the news event that may have a very large impact on the Dollar and its main currency pairs in today’s trading is Federal Reserve Chairman Ben Bernanke’s speech at around 18:00 GMT. This speech is very important as it is very likely to Impact the Dollar volatility. Traders are advised to watch closely, as this is likely to set the pace of the Dollar going into next week’s trading.

EUR – The EUR Continues to Strengthen against the USD

The EUR rallied yesterday against the Dollar as encouraging news about the European economy emerged. This sparked hope that the 16-country Euro-Zone may be emerging from the depths of recession. The EUR touched a 5- five month high versus the Dollar to above the 1.3950 level. The European currency finished around 80 pips higher against the JPY to finish yesterday’s trading session at the 131.19 level.

The Euro-Zone’s manufacturing and services sector recorded their best performance in 7 months, suggesting the Euro-Zone economy will shrink only slightly in the 2nd quarter after a record slump in the 1st quarter. The survey showed a significant improvement, thereby boosting hopes that the rate of decline in the Euro-Zone economy is now moderating after a particularly torrid 4th quarter of 2008 and 1st quarter of 2009. The reduced contraction in manufacturing activity in May suggests that the sector is starting to benefit from the massive de-stocking that has taken place.

Sentiment in the Euro-Zone economy has brightened in the past week following better-than-expected news. The EUR is showing signs of resilience even though there was volatility throughout non-Euro crosses. It will be crucial for traders to identify how the preceding economic indicators from the U.S., Japanese, and other key economies will affect their positions.

JPY – JPY Slides against EUR and Spikes versus the Dollar

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 131.19. The JPY slipped only marginally yesterday against the GBP to the 149.31 level. The JPY did see some bullishness as well as it gained 35 pips against the USD and closed at 94.17.

The Japanese market should have a heavy effect on the JPY versus its major currency counterparts, as the Overnight Call Rate will be announced today. The rate is expected to remain unchanged, but traders should pay close attention to the BoJ Press Conference that will follow to look for expectations of Japan’s economic future. A bullish statement from the BoJ could lead some traders to believe the BoJ is forecasting a rosier financial climate in Japan.

Crude Oil – Crude Oil Rises Despite Economic Concerns

Crude Oil rose slightly by 21 pips to $61.63 a barrel yesterday, continuing its comeback. This was despite the U.S. Federal Reserve cutting its forecast for the economy of the U.S., the world’s biggest energy-consuming country. Crude is trading for less than half year-ago levels, as demand has softened with the economic crisis. Expectations that consumers may once again want more Oil when the recession bottoms have partly fueled the rally, with traders watching the stock market for economic telltales.

Concerns about the reliability of supply also have begun to creep into the market, highlighted by an escalating conflict between rebels and security forces in Nigeria’s Oil-rich southern region this week. There is a reasonable possibility that Oil prices will continue to be bullish going into next week, providing that the economic situation of the leading economies continues to rapidly improve.

Technical News

EUR/USD

The pair has been experiencing some very bullish behavior in the past week, as it currently stands between the 1.3900-1.3950 levels. The main oscillators of the daily chart indicate this trend may continue into the near future. However, the 4-hour Slow Stochastic reveals that a bearish cross is about to occur anytime soon, indicating that a bearish correction may be imminent. Now may be a ripe time to take advantage of the situation at an early stage.

GBP/USD

The cross has received increasing support as of late, as this pair approaches new highs. The continuation of the bullish trend is supported by the 1-day and 1-week charts’ MACD. On the other hand, the 4-hour and 1-day charts’ Slow Stochastic seems to contradict this. It may be wise to open a long position with tight stops before the bullish trend comes to an end.

USD/JPY

The pair has been going through much bearish behavior in the past several days. The MACD of the 1-hour chart fails to show a clear signal as to the future direction of this pair. However, the 1-day Stochastic Slow and RSI show that this pair is still likely to go lower before making a bullish correction. Traders should take advantage of this bullish trend now while it still carries steam.

USD/CHF

The 1-day Stochastic Slow shows that the pair may continue its downward trend into the near future. This is also supported by the 4-hour charts’ MACD. However, the 4-hour Stochastic slow seems to indicate that a bullish cross is imminent. It may be a wise move for traders to open a long position with tight stops when this bullish cross is breached.

The Wild Card – Gold

Gold prices have been increasing rapidly lately, as they stand at over $951 per ounce. The 1-day and 1-week chart shows that this bullish trend is set to continue. This is also supported by the 1-hour and 4-hour MACD oscillator. It may be a wise move for forex traders to enter this very popular trend.

Forex 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 sharply vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3925 level and was supported around the US$ 1.3730 level.   The common currency reached its highest level since 5 January and some dealers believe traders may use the reduced liquidity over the long U.S., U.K., and European holidays to make a run at the psychologically-important US$ 1.4000 figure, a level it’s not traded above since the end of last year.  Data released in the U.S. today saw April leading indicators rise 1.0% from a revised 0.2% decline in March, the first improvement in seven months.  These data suggest the U.S. economy is inching closer to an economic recovery.  Weekly initial jobless claims were off 12,000 to 631,000 in the week ended 16 May while continuing jobless claims were up 75,000 to 6.662 million.  Other data saw the May Philadelphia Fed manufacturing survey improve to -22.6.  In eurozone news, the EMU-16 May composite Purchasing Managers Index improved to an eight-month high of 43.9 from 41.1 in April with improvements in both the manufacturing and services PMI indices.  Similarly, German flash May PMI data suggest that country’s economy may be past the worst.  It was also reported that France’s economic contraction moderated in May as its flash PMI rose to 46.1 from 43.8 in April.  Euro bids are cited around the US$ 1.3435 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥94.00 figure and was capped around the ¥95.25 level.  The pair extended its recent sell-off and reached its lowest level since 19 March as risk aversion returned to the market ahead of the long holiday weekend in Europe and the U.S.  Data released in Japan overnight saw the March tertiary index print at 100.8, off 4.0% m/m and worse than February’s 1.3% decline.  The tertiary index was also off 3.2% q/q in the January – March quarter, worse than the 1.7% pullback in the October – December period.  The March leading index and coincident index will be released in Japan overnight.  The Nikkei 225 yesterday stock index lost 0.86% to close at ¥9,264.15.  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 ¥131.50 level and was supported around the ¥129.85 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥146.85 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥85.50 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8250 in the over-the-counter market, up from CNY 6.8215.

₤

The British pound moved higher vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.5890 level and was supported around the $1.5515 level.  Cable weakened earlier in the day after Standard & Poors changed its outlook on the U.K. government’s debt to negative from stable, the first time it’s been negative since 1978.  S&P is projecting that public sector debt will near 100% of gross domestic product over the medium-term.  Even though the government’s sovereign AAA credit rating remains intact, today’s news is a blow for beleaguered U.K. Prime Minister Brown who has about one year before he must call an election.  Sterling absorbed this news and rocketed to its highest level since 6 November.  April retail sales were up 0.9% m/m after an upwardly revised 1.1% increase in March.  Also, CML April gross mortgage lending printed around ₤10.4 billion and April public sector net borrowing reached ₤8.5 billion.  Additionally, the M4 money supply was up 0.1% m/m and 17.4% y/y and Q1 business investment was off 5.5% q/q.  Cable bids are cited around the US$ 1.5315 level.  The euro gained ground vis-à-vis the British pound as the single currency tested offers around the ₤0.8870 level and was supported around the ₤0.8720 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.