Month: April 2010

By Finexo.com

Past Events:
• USD S&P/CS Composite-20 HPI y/y out at 0.6%, versus 1.4%, prior -0.7%
• USD CB Consumer confidence 57.9 versus expected 53.6, prior 52.3 (revised)
• GBP BBA Mortgage Approvals out at 34.9, versus expected 39.3K, prior 33.5(revised)
• GBP CBI Realized Sales out at 13, versus expected 16, prior 13
• JPY Retails Sales y/y out at 4.7%, versus expected 3.7%, prior 4.2%
• AUD CPI q/q out at 0.9%, versus expected 0.9%, prior 0.5%
• AUD Trimmed Mean CPI q/q out at 0.8%, versus expected 0.7%, prior 0.6%
• NZD NBZD Business Confidence out at 49.5, versus expected 42.5

Upcoming Events:
• EUR German Prelim CPI m/m (all day)
• USD Crude Oil Inventories (1530GMT)
• USD FOMC Statement (1915GMT)
• USD Federal Fund Rate (1915GMT)
• NZD Official Cash Rate (2200GMT)
• NZD RBNZ Rate Statement (2200GMT)

Market Commentary:
Euro hits a one-year low against U.S Dollar as contagion fears
Greece’s debt crisis spread to Portugal after a pair of ratings downgrades on the two countries spooked investors, fueling a sell-off in markets across the globe while shattering Europe’s hopes on containing the crisis.

Greece became the first Euro Zone nation to have its credit rating reduced to “junk” by Standard & Poor’s, a  move that will make now nearly impossible for Greece to borrow, dashing any remaining hopes of the debt-stricken nation’s recovery. Portugal, who like Greece is struggling to rein in its budget deficit, suffered a two notch downgrade. While this downgrade left its investment-grade intact, it severally raised concerns about the country’s possible tragic fate.
Following the news the Euro plunged a one year low against the U.S Dollar. The single currency fell 1.94% from its opening price of $1.34028, to hit $1.31429.

News of the downgrades comes as investors were already concerned that the €45billion joint EU-IMF aid package would be delayed by an internal political struggle in Germany. Earlier this week, the German Chancellor Angela Merkel told reports that there will be no decision on aid for Greece until the International Monetary Fund works out a plan of cuts with the government in Athens. Merkel went on to say that Germany will assist Greece only after it agrees to take “tough” measures.

The Euro experienced losses across the board as fears that the Greece’s crisis had begun to spread to Portugal swept across the globe. The European currency approached a five week low against the Japanese Yen, falling 2.78% from its opening price of 125.847¥/€ to hit a low of 122.350¥/€.

The euro rebounded from a one-year low against the dollar on speculation the International Monetary Fund will provide more aid to Greece, easing concern the nation’s debt woes will spread through the region.  The 16-nation common currency rose to $1.32164 in Asian sessions this morning, up 0.35% from yesterday’s close of $1.31709, after the Financial Times reported the International Monetary Fund may increase its financial assistance to Greece by €10 billion from the current €15 billion, citing unidentified bankers and officials in Washington.

European Central Bank President Jean-Claude Trichet and IMF Managing Director Dominique Strauss-Kahn will brief German parliamentary leaders in Berlin around noon today about aid for Greece, which has met with opposition in Europe’s biggest economy. The joint EU-IMF package would require Germany to provide the biggest individual loan to Greece.

A flare up of financial turmoil in Europe, caused by concerns that Greece and Portugal might default on debt, should reinforce the Fed’s reluctance to close out a two-day meeting with any sign that might suggest U.S. monetary policy could soon be tightened. Later today, the U.S Federal Reserve will announce its policy decision concerning the interest rates (1915GMT).

The Fed cut benchmark overnight rates to near zero in December 2008 and in March last year promised “exceptionally low” rates for “an extended period,” a vow it has renewed at every meeting since that one. While the world’s biggest economy is crawling out of its deepest recession in decades, Fed officials have said the recovery remains wobbly and they have warned that the jobless rate is likely to remain uncomfortably high for a long time. Analysts predict that the Fed will opt to hold interests rates near zero.

Home prices in the U.S dipped for the fifth-straight month in February as many markets remained under pressure from foreclosures and high inventories. Meanwhile consumer confidence rose in April to its highest level since the financial struck in September 2008.

The S&P/Case-Shiller Index tracking home prices rose across 20 metropolitan areas fell 0.9% during the month of January as all but one city, San Diego, posted declines. Compared to a year earlier however, home prices rose nationwide for the first time since December 2006. Home prices in February were 30% below the peak reached in July 2006, indicating the industry that helped trigger the worst recession since the 1930s will take years to recover lost ground. A pickup in employment is needed to help stem the damage from mounting foreclosures that are restraining further gains in property values.

Confidence among U.S. consumers increased in April to the highest level since September 2008 as Americans became more upbeat about jobs, another report yesterday showed. The Conference Board’s index rose more than forecast, to 57.9 from 52.3 in March, according to the New York-based private research group. Consumer’s current assessment of the economy improved, while their expectations for the months ahead rose remarkably.

In Britain, retailers saw continued improvement in underlying sales through April, according to the Confederation of British Industry’s latest distributive trade’s survey.  While yesterday’s CBI realized sales report came in worse than expected, at 13, it was in line with previous readings (a reading of 0 indicates higher sales volume, below indicates lower). Moreover, according to BBA mortgage approval report, released yesterday, the number of UK mortgage approvals rose 4.6% on the month in March, climbing to a seasonally adjusted 34,905 from 33,360. Remortgaging approvals also rose, to 24,116 from 22,314 in February, while other secured lending approvals increased to 18,331 from 17,829. According to the BBA statistics director, David Dooks, said “Low interest rates continue to influence customer behaviour. Homeowners are reducing mortgage debt by making, or maintaining, higher repayments using the extra cash generated by lower mortgage rates.” The BBA said there was a 4.5% annual increase in banks’ net mortgage lending in March, well above annual growth of just 1% across the whole market in February, with banks continuing to provide the majority of all mortgage finance.

The Pound suffered extensive losses yesterday as concerns over Greece and fears of a “hung parliament” weighed heavily on the currency. The Sterling retreated from Monday’s highs and to a low a one week low of $1.52241, down1.58% from the day’s opening price. The GBP/USD which closed at $1.52444, continue to fall in trading sessions this morning, touching on $1.52054.

Down under in Australia, the inflation rate almost doubled in the first quarter to 0.9%, making it more likely that the central bank will keep raising borrowing costs. The increase in the consumer price index from the previous three months followed a 0.5% gain in the fourth quarter and was more than the median 0.8% expected by economists. Prices rose 2.9% from a year earlier, the most since late 2008, the Bureau of Statistics said in Sydney early this morning. After falling 1.24% yesterday to close at 0.91631USD, the Australian Dollar rebounded in trading session this morning to hit a high of 0.92299USD.

In New Zealand, Alan Bollard, the governor of the Reserve Bank of New Zealand is expected to hold the official cash rate steady at tonight’s rate decision (2200GMT). Disappointing retail sales along with a meager rise of 0.4% in the quarterly inflation have lead analysts to believe that the RBNZ will hold its overnight rate at 2.5%. Following the cash rate announcement, the RBNZ will make a statement discussing the economic conditions that influenced their decision. Most importantly, it discusses the economic outlook and offers clues on the outcome of future decisions. The kiwi will move by the wording of the RBNZ Rate Statement which will provide an economic overview and perhaps hints for future policy.

The rate announcement will be followed by publication on New Zealand’s trade balance. Over the course of the past two months, the country has enjoyed a rather large surplus. This time around, the surplus is expected to widen to 372M, from 321M last month, indicating an increase in exports.

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. All information and opinions contained on this website are to be used for general informational purposes only and do not consitute investment advice.

By Russell Glaser – Spot crude oil sold off sharply yesterday and continues to fall into this morning’s trading following further European sovereign debt worries. This may present a buying opportunity as the price has dropped to an attractive technical level.

The price of spot crude oil fell to $81.25 this morning, from an opening price of $82.25. Spot crude oil prices have fallen almost 5% the past 3 days. Equity markets were hit particularly hard. The S&P 500 fell 2.34% yesterday as risk taking was absent in the markets.

However, not all commodities felt the squeeze of contagion as the price of spot gold rose on safe haven buying. Gold climbed higher to $1165 after traders looked for less risky assets.

The fallout began after Standard and Poor’s Rating Service slashed Greece’s sovereign debt rating to BB+ (junk status) from BBB+ and lowered Portugal’s debt rating two levels to A- from A+.

Spot crude oil is being pressured by the European sovereign debt crisis. Hence, the euro has weakened versus the dollar. The EUR/USD fell its lowest point this year. Spot crude oil prices typically have a reverse correlation with the dollar’s strength. As the dollar rises, spot crude oil prices fall.

Today the spot crude oil market will be anticipating the weekly U.S. crude oil inventories report. Market expectations are for a rise of 900K barrels. However, the report may be overshadowed by the events surrounding the Greek fiscal crisis.

Despite the slump in the price of spot crude oil, traders may find this an opportunity to enter into the market at an attractive price. The price of spot crude oil has fallen to the lower channel line on the daily chart at a price of $81.25. We could see a bounce in the price from this chart pattern towards the $84.50 price level. Should the price channel be broken, the next support line on the daily chart rests at $80.75.

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 Anton Eljwizat – The USD/MXN cross has been experiencing much bullish behavior in yesterday trading session. However, there is much technical data that supports a bearish move for today. As I demonstrate below, that the USD/MXN may very well be heading for a reversal, and it might have the potential of reaching towards 12.12 in the coming days. Forex traders can take advantage of this imminent downward movement by entering short positions at an excellent entry price.

• The technical indicators used are the Slow Stochastic, Relative Strength Index (RSI) and Williams Percent Range.

• Point 1: The Slow Stochastic indicates a bearish cross, which may signal a downward movement is going to occur in the near future.

• Point 2: The RSI signals that the price of this pair currently floats in the over-bought territory, indicating downward pressure.

• Point 3: The Williams Percent Range signals further bearishness for the pair, which in turn indicates further downward pressure to occur anytime soon.

USD/MXN 4-Hour Chart

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

An extremely volatile trading day ended yesterday with the U.S. Dollar gaining against most major currencies. The EUR/USD pair hit a one-year low not seen since April 2009, trading below 1.3200. Volatility is expected to continue today, while European Union (EU) representatives would probably try to reassure investors regarding the stability of the EUR and aid to support Greece. This should support the EUR, which was already trading higher at Wednesday’s trade opening.

Economic News

USD – U.S. Consumer Confidence Comes High, Markets End Low

Yesterday’s trading session proved once again that markets are still fragile. Better than expected Consumer Confidence data did not improve investors’ mood regarding recovery in the global economy. The Case Shiller index added to the negative sentiment, published Tuesday, it showed an increase in home prices, but was worse than forecasted.

The greenback rose sharply against all its major counterparts. The EUR/USD is currently trading at 1.3200, almost 200 pips down compared to Tuesday’s opening. The GBP/USD is trading at 1.5268, also around 200 pips bearish compared with early trading on Tuesday.

Today’s trading will continue to be influenced by the ranking downgrades, some currencies, hit yesterday, might rebound slightly while short positions are closed to take on profits. Yet European debt sentiment would continue to halt any major EUR up-trend, it seems that only a serious aid package would help lift the EUR. Today’s FOMC statement and Federal Funds Rate decision, expected to remain at

EUR – Greece & Portugal Downgrade Sent EUR to Yearly Low

The EUR tumbled yesterday when the S&P group published their ranking downgrade to Greece and Portugal. Greece payment is due on 19 May, and Germany has reassured that the EUR will not collapse because of Greece. On the other hand, they continue to raise difficulties over a complete aid package to Greece.

UK elections coming in less than two weeks may add some volatility to the pair. Investor fear of a weak government with limited power may shake things up if there is belief that important economic decisions cannot be made by central authorities which would direct the UK economy out of recession.

The EUR/USD was trading lower following the closing of the New York session when the pair opened slightly higher at around 1.3200. The EUR/USD is expected to test the 1.3200 level later today, any failure to cross it would signal further decline for the pair. The GBP/USD also improved since yesterday closing and is currently little changed at 1.5268.

JPY – Yen Rises as Investors Divert from Risk

The Japanese Yen (JPY) traded higher during Tuesday’s trading sessions as investors returned to safe-heaven currencies such as the USD and the JPY. As long as unresolved issues, such as European debts, continue to occupy investors, the trend may continue to support the JPY against the EUR and GBP. The JPY might be less bullish against the USD, however. The pair is currently trading at 93.33.

Retails Sales in Japan, published earlier, signaled strong growth. This was good news for Japan’s economy as it continues to try to escape deflation. The JPY today will continue to be influenced by traders’ lack of risk appetite as no major news will be published today as it is a bank holiday in Japan.

The Yen is expected to trade neutral during the day. If investors see more ranking warnings they may continue to support the Yen against other major currencies as a part of the risk averse trading environment currently present. The EUR/JPY is currently trading at 123.29, and USD/JPY improved since the day started to 93.30.

OIL – Crude Oil Prices Rise as Recovery Concerns Take Over

The S&P group rating downgrade took over Tuesday’s trading session, sending riskier assets lower. This was including Crude Oil prices, which fell below $83 a barrel, a strong support level. The price of a barrel of light sweet crude oil opened at $82.30, higher compared to yesterday’s price during New York closing.

Oil prices declined mainly on concerns about the strength of the economic recovery. Investors are extremely worried about European countries’ mounting debts. Moreover, a U.S. barometer of oil inventories showed a larger than expected increase, which sent oil prices further down.

Better statistics on oil inventories are due to be published later today. However, in recent weeks oil prices were little changed following this figure. Oil is expected to continue its decline today, although on a more moderate level, $83 a barrel may turn out to be a healthy resistance level.

Technical News

EUR/USD

There is a fresh bearish cross forming on the hourly chart’s Slow Stochastic, indicating a bearish correction might take place in the nearest future. The downward direction on the 4-hour chart’s Momentum oscillator also supports this notion. When the downward breach occurs, going short with tight stops appears to be a preferable strategy.

GBP/USD

The price appears to have entered the over-sold territory on the 4-hour RSI, but it still points downward, indicating that the downward movement may not have finished yet. The bearish cross on the 4-hour MACD supports this notion. Staying short on this pair for the time being may not be a bad tactic today.

USD/JPY

The 4-hour chart is showing that the pair is still in the bearish configuration. However, the RSI is already floating in the over-sold territory indicating that a bullish correction might take place in the nearest future. When the upward breach occurs, going long with tight stops appears to be a preferable strategy.

USD/CHF

The bullish trend is losing its steam and the pair seems to be consolidating towards the 1.0850 level. The pair currently sits near the upper border of the daily chart’s RSI, suggesting a downward correction may be imminent. When the downwards breach occurs, going short with tight stops appears to be a preferable strategy.

The Wild Card

NZD/CHF

This pair has been in a steady bullish channel for a number of days now with hardly any signs of stopping. However, the daily and hourly charts show the price floating in the over-bought territory of their respective RSIs. A bearish cross on the daily Slow Stochastic has also just formed, indicating that this pair is due for a strong downward movement giving forex traders a great opportunity to call the reversal and ride out the downward wave for some hefty profits.

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.

USDCAD bounces sharply to the upper boundary of the falling price channel on 4-hour chart. Further rally to test 1.0215 key resistance is still possible later today, a break above this level will indicate that the longer term downtrend from 1.0779 (Feb 5 high) has completed at 0.9930 already, then the following uptrend could take price back to1.0500 area.

Daily Forex Reports

By GCI Forex Research

Fundamental Outlook at 1400 GMT (EDT + 0400)

€

The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3275 level and was capped around the $1.3415 level.  The common currency reached its lowest level since May 2009 as the Greece’s debt was downgraded to junk status by Standard & Poor’s – the first time a member of the eurozone lost its investment-grade status since the euro started trading in 1999.  Greece was reduced to BB+ from BBB+ and S&P warned Greek bondholders may lose as much as 70% of their investments as Greece restructures its debt.  S&P also reduced Portugal’s ratings by two notches to A- from A+.  European Union leaders will likely convene in the coming days to deliberate Greece’s decision to activate a €45 billion emergency aid package.  German Chancellor Merkel’s government delayed a decision this week on whether to release bailout funds for Greece.  Merkel faces an election in the German state of North-Rhine Westphalia on 9 May and many Germany voters are said to oppose assistance for Greece without further fiscal cuts by Greece.  The Greek downgrade renders it possible that the European Central Bank may be unable to utilize Greek bonds as eligible collateral in repo and other financing activities.  There is chatter that the ECB may be forced to resort to the so-called nuclear option that could see monetary authorities purchase European government bonds.  Data released in Germany today saw the May GfK consumer confidence survey improve to 3.8 from a revised reading of 3.4.  Also, the March import price index moved higher 1.7% m/m and 5.0% y/y.  Data released in France today saw April consumer confidence print at -37, down from the revised prior reading of -34, and March total jobseekers fell by 6,600.  In U.S. news, the February S&P/CaseShiller house price index was up 0.64% y/y, up from a downwardly revised -0.73%, and was off 0.10% m/m.  Additionally, April consumer confidence improved to +57.9 from the prior reading of +52.3 and the April Richmond Fed manufacturing rallied to +30 from the prior reading of +6.  Euro bids are cited around the US$ 1.3175 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥93.35 level and was capped around the ¥94.05 level.  Traders moved into yen during a flight to quality as global financial markets came off significantly on account of exacerbated credit problems in the eurozone.  There are indications that Japan’s economy continues to improve and there is a sense that some Bank of Japan Policy Board officials may be unwilling to expand the central bank’s emergency loan program any further.  Many dealers believe the central bank may upgrade its twice-yearly outlook for gross domestic product and prices when policymakers convene on Friday.  Data released in Japan overnight saw the April small business confidence index print at 46.8, up from the prior reading of 45.8.  Data to be released tonight include March retail trade.  The Nikkei 225 stock index climbed 0.42% to close at ¥11,212.66.  U.S. dollar offers are cited around the ¥96.85 level.  The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥124.05 level and was capped around the ¥125.95 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥143.10 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥86.50 level. In Chinese news, the U.S. dollar depreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8257 in the over-the-counter market, down from CNY 6.8266.  Data to be released in China this week include April PMI manufacturing.  People’s Bank of China Governor Zhou this weekend reiterated China will pursue a “proactive fiscal policy and a relatively easy monetary policy.”  There were not many official comments about China’s foreign exchange rate policy this weekend at the G-7 and G-20 meetings.    China is expected to widen its yuan trading band at any time.

Forex 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.

Goldman Sachs: Let the Beatings Begin

If you want a realistic version of reality television, you will want to tune in today to the whipping session that is to take place on Capitol Hill. The folks from Goldman Sachs will be appearing before a Senate subcommittee to 1) answer questions about their trading actions and 2) sign their names on a chalkboard 1,000 times.

There’s also another fella who is keeping close tabs to the circus about to take place on the Hill: President Obama. But he will be conveniently traveling today to three separate states to campaign and talk about financial reform. Oh yeah, he’s also expected to talk about jobs. Blah, blah, blah.

Having Lloyd Blankfein is important for the senators, but it’s critically important for all of Wall Street. If Blankfein comes across as elitist and shows those beady eyes and wrinkled forehead, all the major news channels tonight will show him as being the poster boy for, what those that are ignorant and uninformed like to say, the wrongdoings of Wall Street.

What a horrible position for Blankfein to be in. Forget about the 31-year old mastermind allegedly behind all of this: Fabrice Tourre. He probably made tens of millions and was about to retire anyway. The only thing he has to worry about is how many books he plans to write over the next five years. But Blankfein is all but done.

There really is no upside for the man and, as a result, the Goldman board will probably use this as the reason to let him go. But don’t feel bad for the guy. He’s certain to walk out with a very large severance, not to mention a guaranteed table at Harry’s during lunch hours.

I predict today is going to get heated. One thing about Blankfein’s background is the guy doesn’t quit. And, when he’s cornered, he doesn’t just roll over. Look for big Lloyd to get heated with some of these guys. After all, he didn’t break any laws; it’s just his job that is at stake!

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About the Author:

Todd M. Schoenberger is the Managing Editor of Taipan’s Tipping Point Alert e-letter. Todd holds degrees in economics and mathematics from the University of Maryland-College Park, and a degree in venture capital financing from Harvard Business School.

As the Managing Editor of Taipan’s Tipping Point Alert e-letter, Todd keeps himself up-to-date on the latest happenings from the news on Wall Street to the global market. He sifts through market announcements, economic news and financial reports from around the world, and offers spirited, sometimes humorous and always thought-provoking commentary to his readers.

By Finexo.com

Past Events:
• EUR GfK German Consumer Climate out at 3.8 versus expected 3.4, prior 3.4 (revised)
• AUD PPI q/q out at 1.0% versus expected 0.7%, prior -0.4%
• AUD NAB Quarterly Business Confidence out at 17 versus prior 18
• CHF UBS Consumption Indicator out at 1.71 versus prior 1.20

Upcoming Sessions:
• GBP BBA Mortgage Approvals (930GMT)
• GBP CBI Realized Sales (1100GMT)
• USD S&P/CS Composite-20 HPI y/y (1400GMT)
• USD CB Consumer Confidence (1500GMT)
• USD Fed Chairman Bernanke Testifies (1500GMT)
• EUR ECB President Trichet Speaks (1515GMT and 2315GMT)
• CAD BOC Carney Speaks (2030GMT)
• RBA Assist Gov Debelle Speaks (2330GMT)

Market Review:
The Euro slipped against all its major currency counterparts yesterday as uncertainty intensified over how and when Greece would get the financial aid sought last week to avert a potential sovereign debt default. The spread between Greek and German 10-year government bond yields hit a new 12-year high of 679 basis points on Monday, indicating market concern over the implementation of the aid package and the conditions attached to it. Comments from Germany, potentially the biggest contributor to any aid package, helped keep markets nervous after Greece on Friday requested an aid package drawn up by the European Union and International Monetary Fund be implemented. German Finance Minister Wolfgang Schaeuble said Germany was aiming to free up financial support for Greece before a May 19 deadline, but the opposition Social Democrats said they would not back an accelerated parliamentary process to approve the aid.

The single European currency retreated from the highest level in more than a week against the Japanese Yen on concern that the joint EU-IMF €45billion rescue package won’t be enough to stop the deficit crisis from spreading. After hitting 126.298 Yen, its highest price since April 16th, the Euro slipped to 125.042 Yen. The EUR/JPY closed at 125.842, down 0.13% from the day’s open.

The Euro’s losses extended across the board as it neared a three month low against the British Pound after German Chancellor Angela Merkel stated that she won’t release any emergency funds for Greece until the nation has a “sustainable” plan to reduce its shortfall. After plunging to a low of 0.86016, the EUR/GBP recovered to close at 0.86620, down 0.27% from the day’s opening price.

After hitting a daily low of $1.32901, the Euro recovered against the greenback to close yesterday at $1.34026, up 0.35% from its opening of $1.33561. However, in the Asian trading session this morning, the single European currency slid to hit a low of $1.33557.

The European Central Bank President Jean-Claude Trichet will speak on multiple occasions this week, mostly while on his trip to the United States. Any comments about the Greek debt crisis or the state of the economies will shake the Euro.  He will speak later today at a conference in Chicago (13:15 GMT) and later this evening (2315GMT) at the Kellog School of Management in Evanston. Trichet returns to Europe and will deliver a speech in Munich this Thursday.

In early trading yesterday, the British Pound extended its rally from late Friday after slipping to a four-day low versus the US Dollar of $1.52938. Last week’s volatile trading session ended with a disappointing figure in Britain’s growth. The U.K. economy grew half as much as economists forecast in the first quarter as winter weather hampered expansion, underscoring the recovery’s fragility two weeks before the election. The Prelim GDP report showed a 0.2% increase from the last quarter of 2009, when a 0.4% expansion pushed Britain out of the recession.

Yesterday, the pound strengthened against the dollar for the first time in three days after a report showed U.K. house prices increased for a ninth consecutive month, underpinning signs the economic recovery is gaining traction. Sterling advanced versus 14 of its 16 most-traded counterparts after Hometrack Ltd. said the average cost of a home increased 0.2% from March. The pound gained 0.5% to $1.5450 and appreciated 0.9% to 86.24 pence per euro, after earlier reaching 86.07 pence, the strongest since Jan. 28. The Pound closed at $1.54691, up 0.62% from its opening price.
This week, few economic events are scheduled that will severly affect the value of the Pound.  Early this morning (930GMT), the British Banker’s Association will release the number of new mortgages that they approved for home purchases. The BBA represents major banks that make up around 60% of total UK mortgage lending. This figure is generally considered a leading indicator of housing market demand as most home purchases are financed with a mortgage, so it provides an excellent gauge of how many qualified buyers are entering the market.  Last month monthly approvals reached a peak of 35.3K; a rise of 39.3K is expected now.

Later this morning (1100GMT), the CBI Realized will be released. The Confederation of British Industry has shown that retailers and wholesalers expect a higher volume of sale in the past two months. Last month’s positive score of 13 is expected to be followed by a better one this time – 16 (above 0 indicates higher sales volume, below indicates lower). A significantly better or worse than expected result will shake the Pound.

Across the Atlantic, the US will release the CB Consumer Confidence, a survey of 5,000 households which asks respondents to rate the relative level of current and future economic conditions including labor availability, business conditions, and overall economic situation. After slipping in February, the index recovered in March to reach 52.5 points. It’s now expected to take one step higher and rise to 54.2 points. Later today, Federal Chairman Ben S. Bernanke will testify before the National Commission on Fiscal Responsibility and Reform. His speech will be closely watched as it comes one day before the Fed’s rate decision announcement.

In Canada Mark Carney, governor of the BOC, will testify to parliament this week in two sessions. The first of which is this afternoon (2030GMT). Over the course of the past week, the Canadian dollar has dipped several times below the parity line with its US counterpart, and speculations continue to increase that the BOC will opt for a rate hike as early as June 1st. Carney will make an overview of the economic situation, and may give some more hints about the imminent rate decision. The big question is if it will come as soon as June 1st, or on the next meeting scheduled for July 20th. The Canadian Dollar continues to flutter around the parity line with the US Dollar.  The USD/CAD hit 1.00215 during afternoon European trade, the daily high, but by then end of the day the Loonie managed to erase these losses and closed at 1.00033.

Down under in Australia, The Producer Price Index grew 1% on the first quarter 2010 compared to the Q4 2009 against forecast that expected an increase of 0.6. Australian business confidence and conditions weakened slightly in the first quarter of 2010 as stronger employment growth was more than offset by an easing in retail sales, according to the National Australia Bank’s quarterly business survey issued early this morning. Business confidence fell to an index reading of plus 17 points in the first quarter, down 1 point from the fourth quarter. Despite the small drop, confidence stayed positive among all sectors of the economy, with the mining sector the strongest of all, NAB said. Meanwhile, business conditions fell to an index reading of plus 8 points, down 1 point from the prior quarter. Despite the overall strength of activity across the economy, there is little evidence of an inflationary build-up, according to the survey.

After closing at 0.92771USD yesterday, the Aussie fell this morning, hitting a low of 0.92344USD. Analysts expect the Australian Dollar to reach parity with the U.S Dollar by mid 2010.

Forex Market Review & Analysis by Finexo.com

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By Dan, ForexYard – EUR/NOK has been stuck in a prolonged downward trend for sometime now. As will be shown through a variety of technical indicators, the pair is due for an upward correction in the near future.

The following is the Forexyard daily chart for EUR/NOK. The technical indicators used are the Bollinger Bands, Relative Strength Index (RSI) and the Stochastic Slow.

1. As seen in the chart, price ticks from the last several days have begun to dip below the lower Bollinger Band. This typically indicates that an upward correction will take place soon.

2. This theory is supported by the RSI, which is clearly below the lower support line, indicating the pair is currently trading in oversold territory. Traders can take this as a clear sign that the pair is due for a bullish trend.

3. The Stochastic Slow lines are currently crossed below the lower support line. This is also a sign that upward movement for the pair could occur in the foreseeable future, further corroborating our stated theory.

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 Russell Glaser – Most currencies were trend-less yesterday following a lack of economic data releases. The EUR/USD was higher after the New York trading session but the pair failed to hold those gains. Spot crude oil prices fell significantly as traders worry of a potential rate hike by the Fed.

Today the news should play a more important role in today’s trading. The major events on the calendar are:

USD: CB Consumer Confidence m/m: Estimate 53.6. Previous 52.5. (14:00 GMT)
USD: Fed Chairman Ben Bernanke Testifies (14:00 GMT)

GBP: CBI Realized Sales: Estimate 16. Previous 13. (10:00 GMT)

EUR: ECB President Trichet Speaks (14:15 GMT)

CAD: BOC Governor Carney Speaks (19:30 GMT)

Data Points:
EUR/USD: The next major support level for the pair rests at 1.3180.
USD/JPY: Major resistance level at the price of 94.80. A break of this price could propel the pair to the 97.80 price level.
Spot Crude Oil: A bullish flag pattern has formed on the daily chart with the top of the pattern beginning at the price high of $87. A break of this price could propel the price of spot crude oil towards the $94 range.

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.