Month: March 2010

By Russell Glaser – A triangle pattern has formed on the daily chart for spot gold. Traders may be able to take advantage of this pattern by trading in a predictable price range in anticipation for the breakout in spot gold prices.

The lower line of the triangle begins at the start of the previous bullish trend on March 6th. The downward sloping line of the triangle begins at the swing high of daily chart at a price of $1224.70, extending lower to form the vertex of the triangle. Forex and commodity traders may want to go long with a price target at the descending trend line above the price action.

It is also possible to find other patterns here on the chart. One can see a channel pattern that has formed, a descending triangle, along with a reverse head and shoulders pattern. The reverse head and shoulders could signal break of the downward trend and a significant future price appreciation. This price pattern will be presented next week in a future forex technical analysis.

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: Forex Yard

The EU economic summit will likely be the focus today, as the final Greek rescue plan is expected to be delivered today. A satisfactory plan may provide the much needed push to the EUR which was plagued by the debt issues in the region.

Economic News

USD – USD at a 10 Month High versus the EUR

The Dollar reached a 10-month high versus the EUR yesterday after European Central Bank President Jean-Claude Trichet said any involvement of the International Monetary Fund in a rescue plan for the region is, “very, very bad.” The Dollar was further boosted by positive economic data from the U.S, stoking investors’ expectations of a sooner than expected interest rate hike by the Federal Reserve.

First time unemployment claims declined by 14,000 to 442,000 last week, beating investors’ expectations of a drop to 452,000. The mood was also elevated ahead of today’s release of the UoM final index of Consumer Sentiment which is expected to rise to 73 from a preliminary reading of 72.5.

The USD, however, was down versus commodity backed currencies such as the Australian, New Zealand and Canadian Dollars.

EUR – EUR Declines on ECB President Trichet’s Comments

The common currency declined to a 10 month low versus the USD yesterday following a discouraging speech by European Central Bank President Jean-Claude Trichet regarding the possible solutions to the issues of Greek sovereign debt. The EUR fell below the key $1.33 level after Mr. Trichet cautioned against International Monetary Fund involvement in the Greek bailout, reaching $1.3272 late Thursday.

In today’s early Asian trading , however, the EUR was able to recover slightly, advancing to $1.3319 from $1.3273 in New York yesterday, after earlier falling to $1.3268, the weakest since May 7. The EUR is currently at 123.10 Yen from 123.08 Yen. The Pound is at $1.4866.

JPY – Yen Advances versus USD

The JPY rose against the Dollar on speculation Japanese exporters bought the currency to bring home overseas earnings, taking advantage of the large weekly loss to purchase the currency before the end of the Japanese fiscal year next week. The Yen is currently at 92.48 per USD from 92.73 yesterday, when it fell to 92.96, the lowest level since Jan. 8. With no news from the region today, the Yen’s movement will likely be determined by news from Europe and the U.S, particularly any developments regarding the Greece sovereign debt recovery plans.

OIL – Crude Continues its Decline for 3rd Day

Crude oil for May delivery fell as much as 48 cents, or 0.6%, to $80.05 a barrel on the New York Mercantile Exchange yesterday. Oil prices fell for a 3rd day on week global equities and a strong U.S. Dollar. A stronger Dollar tends to weigh on commodities as it makes them more expensive for holders of other currencies. Continued discord among European leaders over the Greek rescue plan further pressured oil prices.

Supply of Oil remains high as Crude stockpiles increased 7.25 million barrels last week, according to an Energy Department report. Demand remains lagging which also pressures Oil prices.

In today’s early trading, Oil levels have recovered slightly, to currently trade around the $80.70 level, consistent with the recovery in the EUR/USD pair. The developments in the Euro-Zone will likely determine Oil’s movements for today.

Technical News

EUR/USD

The price action of the latest bearish move on the 4-hour chart has been taking place below the 20-day moving average line of the pair’s Bollinger Bands. This line runs just underneath the downward sloping trend line on the 4-hour chart. Traders may want to wait for the price to appreciate to the 20-day moving average line as the 7-day RSI is sloping upward, then go short at the 20-day line or as the RSI line turns lower.

GBP/USD

The daily chart shows the pair may have more room to run as a bearish cross has formed on the MACD Oscillator, indicating the downward price moving could continue. This may be confirmed by the 7-day Relative Strength Indicator. The RSI line has turned up and is snug against its downward sloping trend line. If the RSI line fails to break this trend line and turns lower, traders will want to enter into the market short, with a price target of the support line at 1.4782.

USD/JPY

The pair has made a significant breach of the downward sloping trend line on the daily chart, rising as high as 92.95. The bullish streak could continue as it appears to have a bit of momentum behind the breakout. The MACD histogram is sloping up, indicating a strong uptrend. A first target for the pair may be the swing high of 93.75.

USD/CHF

Yesterday’s rally in the currency stalled at the resistance level of 1.0750, but the rally could continue today. The daily chart shows the MACD histogram is sloping higher, indicating the pair could be in for another move higher. The price has also crossed above the 20-day moving average line of the Bollinger Bands. This signals the pair could climb to the upper line of the Bollinger Bands. Traders may want to use the upper Bollinger Band line as a price target.

The Wild Card

Gold

After a previous head and shoulders pattern failed to capitalize, a descending triangle pattern has formed on the daily chart for spot gold. The lower line of the triangle begins at the reaction low of the previous bullish trend on February 24th. The downward sloping hypotenuse of the triangle begins at the swing high of daily chart at a price of $1224.70, extending lower to form the vertex of the triangle. Forex and commodity traders may want to go long with a price target at the descending hypotenuse line above the price action.

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 eToro – Japanese CPI figures published this morning continued to point on subdued customer demand. Core CPI continued to fall for the 12 month in a row, falling by -1.2% YoY in February and raising speculations that the BoJ will be forced to extend its liquidity facilities .Investors’ speculations over a BoJ stimulus which looms the Yen for several month have intensified recently as investors bet the Government will place pressure on the BoJ to act amid the upcoming upper house elections. Such circling speculations were largely confirmed by the Japanese finance minister who was quoted saying “more has to be done”. Not so long ago investors assumptions were that the US will suffer the same low growth low inflation environment as Japan causing the Yen to dip the 85 level and gain strongly against the Dollar. However with the US GDP rising by 5.9% YoY and the Fed action to end mortgage paper purchases and squeeze excess liquidity out of the system, fundamentals for the USD/JPY trade are changing. It seems that with the Fed ending stimulus and BoJ the about to give stimulus Yen traders are more than willing to price the 85 zone as a firm bottom for the USD/JPY. Yesterday’s daily close above the 91.5 key resistance only confirmed the pair’s journey to the 100 is well in place.

USD.JPY, Daily Chart

Daily Forex Market Analysis provided by eToro

Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.

© 2009 eToro Blog.

USDJPY continues its upward movement from 89.76. One more rise towards 93.75 January high is still possible later today, however, minor consolidation would more likely be seen before breaking above this level. Support is now at 91.75, below this level will suggest that a cycle top has been formed on 4-hour chart, then sideways movement could be expected to follow.

Written by ForexCycle.com

By GCI Forex Research

Fundamental Outlook at 1500 GMT (EDT + 0500)

€

The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3370 level and was supported around the $1.3285 level.  The common currency clawed back some of yesterday’s sizable losses with late Australasian activity lifting the pair from intraday lows.  People’s Bank of China Vice Governor Zhu warned “I don’t think Greece will go bankrupt because it’s still relatively small, but we don’t see decisive action that tells the market, ‘We can solve it, we can close it.”  Zhu added Spain and Italy are the “main concern today.”  European Union officials are convening today at a summit to try and shore up support for financial assistance for Greece.  Data released in the eurozone today saw the German GfK consumer confidence survey remain flat at 3.2 for April while the EMU-16 M3 money supply was off 0.4%, more-than-expected.  German Chancellor Merkel reported she will recommend a combination of International Monetary Fund assistance and bilateral aid “as a last resort” for Greece.  European Central Bank member Wellink said Portugal needs to do “additional things” to be credible while Ecofin Chairman Juncker said the markets will come to see Greece’s budget plans as “credible.” Bank of England Monetary Policy Committee member Posen said the inflation rate in the eurozone will “keep going down.”  ECB President Trichet reported the central bank will maintain its emergency collateral rules “beyond the end of 2010.”  Trichet reported Greece’s efforts to restore fiscal soundness are “convincing” and “courageous.”  The ECB’s move to maintain an easy and flexible collateral eligibility into 2011 give the central bank room to accept the debt of fiscally-troubled eurozone states as collateral.  ECB’s Nowotny reported the euro will remain an important international currency.  In U.S. news, data released today saw weekly initial jobless claims decline to 442,000 from a revised 456,000 while continuing jobless claims fell to 4.648 million from a revised 4.702 million.  Data to be released in the U.S. tomorrow include Q4 GDP and final March University of Michigan consumer sentiment.  Fed Chairman Bernanke testified today and said the “economy continues to require the support of accommodative monetary policies…However, we have been working to ensure that we have the tools to reverse, at the appropriate time, the currently very high degree of monetary stimulus…As the expansion matures, the Federal Reserve will need to begin to tighten monetary conditions to prevent the development of inflationary pressures. We have full confidence that, when the time comes, we will be ready to do so.”  The Fed will end one of its emergency mortgaged-backed securities purchase programs at the end of this month and Bernanke said the Fed does not anticipate the Fed to sell the US$ 1.43 trillion in housing debt it picked up “in the near term,” noting the Fed will likely wait “at least until after policy tightening has gotten under way and the economy is clearly in a sustainable recovery.”  The initial jobless claims data may be pointing to an improving labour sector and many economists expect the March non-farm payrolls report will evidence decent jobs growth for the first time in several months.  Euro bids are cited around the US$ 1.3335 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥91.75 level and was capped around the ¥92.35 level.  Bank of Japan Policy Board member Kamezaki dovishly reported “The central bank will implement policy proactively if necessary, and last week’s monetary easing was based on such a stance,” adding the BoJ will maintain an “extremely accommodative” policy.  Many dealers believe the government will continue to pressure the central bank into easing policy further to counter significant deflationary pressures.  Such moves are basically intended to boost consumer and investor sentiment and do not have an appreciable impact on the provision of liquidity.  Data released in Japan overnight saw the February corporate service price index decline 1.3% y/y.  The Nikkei 225 stock index climbed 0.13% to close at ¥10,828.85.  U.S. dollar offers are cited around the ¥94.75 level.  The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥123.20 level and was supported around the ¥122.25 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥138.00 figure while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥86.25 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8271 in the over-the-counter market, up from CNY 6.8267.  People’s Bank of China Deputy Governor Zhu Min reported interest rates are a “heavy-duty weapon,” adding there are other tools the central bank can use to “manage liquidity.”  Zhu also added China will wait to confirm economic growth is steady before raising rates.  Additionally, Zhu reported the yuan’s real exchange rate “has actually appreciated.”

₤

The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.5005 level and was supported around the $1.4855 level.  Cable briefly popped above the psychologically-important US$ 1.50 figure during European dealing but traders pushed the pair back below the $1.49 figure during the North American session.  Data released in the U.K. today saw February retail sales record their largest jump since May 2008, up 2.1% m/m and 3.5% y/y.  Chancellor of the Exchequer Darling reported his latest economic growth forecast is “in line with the Bank of England forecast.”  Darling yesterday reported he plans to “reduce borrowing further.”  Darling yesterday reduced his budget deficit forecast for the next five fiscal years by £44 billion.  On the whole, Darling’s fiscal report was more proactive than expected about addressing the U.K.’s fiscal problems.  The U.K.’s 2009-2010 budget deficit is expected to total around £167 billion and be slightly less in the 2010-2011 fiscal year.  Cable bids are cited around the US$ 1.4455 level.  The euro moved lower vis-à-vis the British pound as the single currency tested bids around the £0.8895 level and was capped around the £0.8955 level.

CHF

The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.0675 level and was capped around the CHF 1.0740 level.  The KOF Institute’s March economic forecast will be released tomorrow.  Swiss President Leuthard said the franc is “at a quite crucial level” and said it is up to the Swiss National Bank to decide whether to intervene.  Swiss National Bank Vice Chairman Jordan reiterated yesterday the central bank will work to prevent excessive franc appreciation.  Swiss National Bank President Hildebrand yesterday reported the central bank will “decisively” act against “excessive” franc strength, noting the central bank can intervene to a “very large extent.”  Swiss National Bank on Monday published its quarterly economic report today and noted it will continue to “act decisively” to prevent an “excessive” appreciation of the franc.  U.S. dollar offers are cited around the CHF 1.1180 level. The euro came off vis-à-vis the Swiss franc as the single currency tested bids around the CHF 1.4250 level while the British pound moved higher vis-à-vis the Swiss franc and tested offers around the CHF 1.6040 level.

Forex Daily Market Commentary provided by GCI Financial Ltd.

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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.

By Fast Brokers – The Aussie has hopped back above .91 and is staging a modest recovery after participating in yesterday’s heavy pullback in the risk trade.  The Aussie dove beneath 3/22 lows before bouncing off our 1st tier uptrend line and climbing back towards a respectable level.  Australia has been quiet on the data wire this weekend, leaving its movements up to broad-based developments in the risk trade.  That being said, the Aussie is still flexing a relative strength since the RBA has exhibited a tighter monetary stance than other developed nations.  However, should uncertainty in the EU persist and Australia’s data cool, then the RBA could choose to keep its rates in check.  Investors to keep in mind that recent employment and housing data from Australia was a bit disappointing, hinting that the RBA’s rate hikes could be having their intended impact.  Steven’s will speak tomorrow and should he make an inference to the RBA’s rate plans this could have an impact on the Aussie.  Speaking of which, Bernanke will testify today regarding the Fed’s exit plans.  However, with the data wire quiet investors will likely be focusing on the EU summit taking place over the next two days.  Hence, investors should keep an eye on broad-based Dollar reaction to incoming headlines from the summit.

Technically speaking, the Aussie has 3/22, intraday, and 3/9 lows serving as technical cushions along with the .91 and .90 levels should they be retested.  As for the topside, the Aussie now faces multiple downtrend lines along with 3/23 and 3/17 highs.

Price: .9124
Resistances: .9137, .9145, .9156, .9162, .9168, .9177
Supports: .9121, .9116, .9110, .9101, .9087, .9073, .9061
Psychological: .91, .90, 2010 highs

(click chart to enlarge)

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regarded neither 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.

By Fast Brokers – Gold has managed to gain back some ground from its 3/24 lows, yet is declining again after failing to reach $1100/oz.  Gold understandably logged heavy losses yesterday as the Dollar soared across the board.  Uncertainty in Greece and now Portugal sent risk traders towards the exit, a negative development for gold since it tends to be negatively correlated with the Greenback.  However, it will be interesting to see if the precious metal can managed to climb back above its key $1100/oz level as the risk trade battles for stabilization.  The EU summit is kicking off and will conclude tomorrow, meaning volatility could pick up as the week comes to a close.  Although there has been a muted response from the Euro, the summit certainly carries the firepower to ignite volatility should investors approve/disapprove of the outcome.  Hence, investors should keep an eye on the Dollar’s reaction to incoming headlines on the news wire concerning the EU.  Gold dropped below a key uptrend line yesterday which runs through 2/5 levels, or the $1050/oz area.  Hence, if gold can’t lock back into its uptrend soon more losses could be in store over the medium-term.

Technically speaking, gold has intraday and 3/24 lows serving as technical cushions along with the psychological $1075/oz area should it be tested.  As for the topside, gold faces multiple downtrend lines along with intraday highs and the highly psychological $1100/oz level.  Hence, it seems gold has an uphill battle ahead of it.

Present Price: $1091.90/oz
Resistances: $1092.23/oz, $1093.37/oz, $1094.92/oz, $1096.18/oz, $1097.26/oz, $1098.10/oz
Supports: $1089.78/oz, $1088.72/oz, $1088.01/oz, $1087.21/oz, $1085.21/oz, $1084.93/oz
Psychological: $1100/oz, March lows

(click chart to enlarge)

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regarded neither 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.

By CountingPips.com

The U.S. Dollar has been mixed in the forex markets on a day with little U.S. economic data released while the American stock markets have traded higher today. The dollar has advanced versus the British pound and the Japanese yen while declining against the Canadian dollar and New Zealand dollar in forex trading as of 1:14 pm EST in the afternoon of the US trading session. The euro, Swiss franc, and Australian dollar are all trading virtually unchanged against the American currency from their opening day exchange rates.

The U.S. stock markets are having a positive session today with the Dow gaining around 100 points, the Nasdaq increasing by over 25 points while the S&P 500 is up by over 10 points at time of writing. Oil has edged higher to $81.43 per barrel while gold has been unchanged at the $1,088.60 per ounce level.

Weekly Jobless Claims at six week low

U.S. weekly jobless claims decreased by more than expected in the week that ended on March 20th, according to a release by the U.S. Labor Department today. New jobless claims fell by 14,000 workers to a total of 442,000 unemployed workers, marking the lowest jobless claims total in six weeks. The 4-week moving average of unemployed workers decreased by 11,000 workers from the previous week to a total of 453,750.

Market forecasts were expecting jobless claims to edge down to 450,000 workers following the prior week’s 456,000 claims.

Meanwhile, workers seeking continuing claims for unemployment benefits for the week ending March 13th also decreased for the week. Continuing claims fell by 54,000 workers to a total of 4,648,000 unemployed workers. The four week moving average of continuing claims dropped by 36,500 workers to a total of 4,689,000.

FOREX: USD/JPY Hourly Chart – The US Dollar continues to fly high against the Japanese Yen today in forex trading after breaking out of its recent trading range yesterday. The USD/JPY is gaining for a third straight day and now trading at its highest level since January 8, 2010 when the pair traded as high as 93.47.

Forex Market Review by Finexo.com

Past Events
• GBP Annual Budget Release
• USD Core Durable Goods Orders, out at 0.9% versus expected 0.6%, prior -0.6% (revised)
• USD New Home Sales, out at 308K versus expected 318K, prior 315K (revised)
• EUR German Ifo Business Climate, out at 98.1 versus expected 95.8, prior 95.2

Upcoming Events
• USD Unemployment Claims (1230 GMT)
• USD Fed Chairman Bernanke Testifies (1400 GMT)
• GBP Retail Sales m/m (0930 GMT)
• EUR Economic Summit, Day One

Market Commentary

In a highly political UK budget Chancellor of the Exchequer Alistair Darling has cut his growth forecast for next year to between 3% and 3.5%. He had earlier predicted growth would reach 3.75%. He stuck to his prediction the economy will expand by 1.5% this year.

The Chancellor also revealed that Britain’s budget deficit will be smaller than the £178bn expected in the pre-Budget report. The UK will borrow £167bn this financial year and £163bn next year. The central issue in the Budget has been the deficit, which standing at 12% of GDP is one of the largest in Europe. It has made the handling of the nation’s finances by Prime Minister Gordon Brown and Chancellor Darling a key election issue.

Uncertainty about the possible outcome of the General Election, due to be held on May 6th has weakened the Pound the international currency market. Polls have indicated that the Conservatives lead is narrowing, raising the risk of a hung parliament. This would make any proposed spending cuts more difficult to implement. Yesterday’s budget postponed measures to curb the deficit until after the election is held.

Investors reckon that only after the election the next Government – whether Labor, Conservative or a coalition – will spell out in detail the scale of the cuts in public spending and rises in tax required to return the public finances to health. Credit rating agencies have indicated they will wait until this time to judge whether Britain deserves to keep its much-prized ‘AAA’ rating, a measure of a borrower’s creditworthiness.

Out later today are UK retail sales figures. Last month figures were disappointing with a fall of 1.8% in sales volume. A rise of 0.6% is predicted this time.

The Pound dropped 0.81% against the US Dollar in trading yesterday to close at GBP 1.4896. It also dropped against the Euro by 0.22% to close at GBP 0.8945.

Across the Atlantic, US orders for durable goods rose in February for a third month, while inventories and backlogs climbed by the most in more than a year, indicating the manufacturing rebound will keep propelling the U.S. recovery.

The 0.5% increase in bookings for durable goods was in line with expectations and followed a 3.9% gain the prior month, the Commerce Department said today in Washington. Excluding transportation equipment orders rose 0.9%, more than anticipated.

Business spending on new equipment, inventory restocking and a pickup in global demand mean companies like Boeing can look forward to sustained sales gains. A pickup in employment is still needed to broaden the expansion as the economy heals from the worst recession since the 1930s.

“Manufacturing has and will continue to drive this recovery,” David Semmens, an economist at Standard Chartered Bank in New York, said before the report. “Export demand will continue to grow, domestic orders continue to rise and the inventory liquidation cycle has stopped dragging on growth.”

Elsewhere in the US, new home sales fell unexpectedly in February to a record low as blizzards, unemployment and foreclosures depressed the market. Purchases decreased 2.2 % to an annual pace of 308,000, according to figures from the Commerce Department. The average sales price climbed by the most in more than two years.

The new-home market is vying with foreclosure-induced declines in prices for existing homes in an economy where unemployment is forecast to average 9.6% this year, close to a 26-year high. Treasury Secretary Timothy F. Geithner said on Tuesday that it would take a “long time” to repair the housing market as the administration takes steps to overhaul real-estate financing and regulation.

The US Dollar gained 1.03% against the Euro yesterday, closing at EUR 1.3328.
Later today the unemployment claims for the past week are due to be published. A steady drop in unemployment figures has been seen since they touched 496K about a month ago. Another small drop is predicted this time, from 457K to 453K.

Also in the US today Federal Reserve chairman Ben Bernanke is due before the House Financial Services Committee for the second part of his testimony that will focus on the exit strategy for the economic stimulus package put in place after the global economic downturn. The testimony will take the form of a questions and answers session. The questions and the reactions are unknown, so this may easily lead to remarks that can move the markets, even if Bernanke doesn’t bring any real news.

In Europe German business confidence rose more than economists forecast in March as a weaker Euro boosted export prospects and warmer weather paved the way for a resumption of consumer spending and construction.

The Ifo institute in Munich said its business climate index, based on a survey of 7,000 executives, jumped to 98.1 from 95.2 in February, the highest reading since June 2008. Economists had expected a gain to 95.8. The index reached a 26-year low of 82.2 in March last year.

Greece’s fiscal crisis has contributed to the Euro’s 11% drop against the US Dollar in the past four months, making German exports more competitive outside the 16-nation bloc.
Today is the first day of a two day EU economic summit in Brussels. EU leaders are meeting to discuss ways the 16 nation bloc can recovery from slow economic growth and high unemployment and also how it should address the worsening fiscal crisis in Greece.

European Commission President Jose Manuel Barroso circulated a briefing paper ahead of the summit stressing the urgency of the tasks ahead.

“By taking bold action we can … avoid the trap of a decade of ‘sluggish’ growth and high unemployment, which would reduce our standard of living, put enormous strain on our social systems and diminish Europe’s role in the world,” he wrote.

A Greek rescue plan is not on the official summit agenda, but leaders will discuss the issue over lunch with European Central Bank President Jean-Claude Trichet. The meeting is expected to reach a political agreement on how to help Greece, while EU finance ministers will work out the financial details at a meeting Monday.

Forex Market Review & Analysis by Finexo.com

Disclaimer: Trading the foreign exchange (Forex) carries a high level of risk, and may not be suitable for all investors.

By Yan Petters – During yesterday’s trading session the USD/JPY pair gained over 200 pips, reaching a 3-month high. This came after 3 weeks of relatively peaceful trading that did not include any sharp movements. However, at the moment it seems that a mild bearish correction is likely to take place in response to yesterday’s rising trend.

• The chart below is the USD/JPY 4-hour chart by ForexYard.
• The technical indicators used are the Bollinger Bands, the Slow Stochastic, the MACD and the Relative Strength Index (RSI).
• The pair reached a 3-month high at the rate of 92.50 yesterday, yet it has dropped ever since.
• A bearish cross of the Slow Stochastic suggests that the bearish correction is likely to proceed.
• The MACD has reached the 0.425 level recently, also suggesting that the bullish move has been limited.
• The bearish correction has potential to reach the 91.50 level. If the pair will manage to breach through this level, its next target will be the 90.50 level.

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.