Forexyard Analysis

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Forexyard Analysis - EUR Interest Rate Decision Due Today

Market participants are eagerly awaiting key data pieces due be released today. The European Central Bank is expected to cut Interest Rates by 50 basis points and weekly U.S. unemployment numbers are predicted to be high. These two events will be the main drivers of currencies in the forex market today.

Economic News

USD - U.S. Unemployment Claims on Tap

The U.S. Dollar weakened during yesterday's trading session, correcting the sharp gains against the EUR and GBP seen last week as steep job losses in the private sector rekindled fears of a prolonged U.S. recession. After yesterday, the USD fell slightly against the EUR, pushing the oft-traded currency pair to 1.3270. The Dollar experienced similar behavior against the Pound and closed at 1.4490.


The ADP Non-Farm Employment Change released yesterday showed an additional 742K individuals lost their jobs in the U.S during the month of March. The number was far higher than economists had previously forecasted. This is indeed another sign that any economic recovery in the U.S. will be slow to commence.


Another leading indicator released yesterday was U.S. Pending Home Sales. This number handedly beat market expectations but 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.


As for today, the leading U.S. data will be the Unemployment Claims. The survey is expected to show 649K individuals have filed for unemployment insurance for the first time during the past week. Such a result will be a direct continuation of the recent troublesome figures delivered lately from the U.S. economy and is threatening to hurt the USD. Traders should follow it closely, as any crucial information might ignite a new trend in the market.

EUR - EUR Fluctuates as ECB Interest Rate Decision due Today

The EUR finished yesterday's trading session with mixed results versus the major currencies. The 15-nation currency saw moderate gains versus the USD. Versus the JPY, the Euro-Zone currency range-traded throughout most of the day, as much of the market data from yesterday was focused on the greenback.


Retail Sales in Germany unexpectedly fell in February and the rate of unemployment rose, fueling fears about job security. As a result, European companies have stepped up efforts to reduce production and cut jobs as the worst global slump since World War II. German business confidence fell to the lowest level in more than 26 years in March and unemployment increased for a fifth straight month.


As a result, the ECB is expected to cut its Interest Rates today while other governments embark on state-sponsored investment programs. The market may view the ECB action of a rate cut as a step to restore investor confidence, and to mitigate the economic fallout from the financial crisis.


In the last year, the ECB has been less aggressive than the Federal Reserve in monetary policy and as the financial crisis has worsened in Europe, the EUR has steadily fallen against the USD. However, the ECB plans for cutting Interest Rates might have an effect on the Euro-Zone economy and could reassure the European banking sector that they could rely on the ECB to keep liquidity circulating and also bring more confidence to the markets.

JPY - Yen Experiences Mixed Results against Major Currencies

Japan's business confidence hit a record low after slumping global demand has halved the nation's exports, pushing the country into one of its worst recessions. Rising unemployment and falling spending data a day earlier already showed the worrisome trend that the drop in external demand was affecting Japan's domestic economy. Analysts expect the Japanese economy to continue to contract in the first half of this year, lending a record five straight quarters of negative economic growth.

Today, the JPY will be absent from the economic calendar, however, traders should follow overseas events in order to determine the JPY's direction for today. Special attention should be given to the ECB Press Conference and U.S. Unemployment Claims figure that will be published at 11:45 and 12:30 GMT respectively, and will be today's leading publications that could affect the Yen's crosses.

OIL - Crude Oil Sinks below $49 a Barrel

Oil prices fell slightly during yesterday's trading session and closed below $49 a barrel as more signs of a sick economy fueled worries about energy consumption. The International Energy Agency (IEA) said that Crude Oil inventories rose to 359.4 million barrels, which is 15.5% above levels from one year ago, the highest level since 1993. Some analysts have said Crude Oil is waiting to break out from it's price slump but the negative inventories data may have held that rally in check..

Oil prices rose sharply last month from $35 to above $54 taking their cue from a rally in equity markets. But a new sign of a prolonged recession which has crushed energy demand around the world is again pushing prices lower below the psychological price level of $50.

Technical News

EUR/USD

After testing and breaking the resistance line of 1.3300, the hourly chart is showing a bearish cross on the Slow Stochastic with the pair's RSI floating in the oversold region. This may indicate an imminent downward correction for the pair. Going short could be the right play today.

GBP/USD

The bullish momentum seen this morning may have left the pair in an oversold position after failing to breach the 1.4600 price level. The 4-hour chart's RSI is currently floating in the oversold region while a bearish cross has formed on the Slow Stochastic, indicating a downward move. This could be a good opportunity to go short.

USD/JPY

The daily chart is showing bearish trends as the pair trades near the 98.75 level. The daily chart displays the Relative Strength Indicator trading in the upper range and an imminent bearish cross is forming on the Slow Stochastic Oscillator. This may indicate the potential for the pair to head lower today. Going short may be the right move.

USD/CHF

There appears to be a leveling-off in the price of this pair as the Bollinger Bands on the 4-hour chart appears to be tightening, signaling an impending volatile price movement. Most oscillators show a lack of distinct direction. On the other hand, range-trading allows traders to cut profits from buying on dips and selling on highs.

The Wild Card

EUR/GBP

The pair's downward thrust early this morning continues the bearish trend. However, the 4-hour chart is providing extensive bullish signals. A bullish cross has formed on the Slow Stochastic and the pair is floating in the oversold range on the RSI. The Bollinger Bands on the daily chart continues to tighten, indicating a volatile correction may soon occur. Forex traders can take advantage of this imminent volatile movement by setting long positions with tight stops.

 

[forexyard]

Forexyard Analysis - ECB Surprises the Market and Traders Anticipate Non-Farm Payroll

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

Economic News

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

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


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


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


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

EUR - EUR Gains Strength as Risk Appetite Increases

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


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


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

JPY - Japanese Yen Continues to Deteriorate

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


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

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

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


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

Technical News

EUR/USD

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

GBP/USD

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

USD/JPY

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

USD/CHF

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

The Wild Card

Crude Oil

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

 

[forexyard]

Forexyard Analysis - USD-Confidence Weakens after Poor Economic Data Released

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

Economic News

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

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

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

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

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

EUR - The EUR Continues to Strengthen against the Majors

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

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

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

JPY - The Yen is Losing Ground on All Fronts

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

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

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

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

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

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

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

Technical News

EUR/USD

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

GBP/USD

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

USD/JPY

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

USD/CHF

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

The Wild Card

Gold

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

 

[forexyard]

Forexyard Analysis - Equity Losses Benefit the Dollar

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

Economic News

USD - Dollar Rises as Risk Taking Disappears

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


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


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

EUR - Pound Continues its Bullish Trend

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


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


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

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

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

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

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

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


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

Technical News

EUR/USD

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

GBP/USD

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

USD/JPY

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

USD/CHF

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

The Wild Card

Crude Oil

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

 

[forexyard]

Forexyard Analysis - Greenback Gains as Market's Optimism Fades

The European single currency came crashing on Tuesday after data showed the Euro-Zone economy recorded its deepest ever quarterly fall in the 4-quarter of 2008. As a result, the currency market moved back to the U.S currency after optimism regarding the European economy faded. The USD which is seen as a safer bet than others currencies in times of market stress will likely keep drawing demand as investors stay away from riskier assets.

Economic News

USD - USD Regains Lost Momentum from Under-Performing Stock Market

The USD has begun a moderate rally these past two days, starting from as high as 1.3575 against the EUR, the greenback is now trading near the 1.3175 price level. An even sharper price rally began this morning during the early trading hours when the release of poor stock data emerged from Wall Street. The negative economic outlook for first quarter stock performance has many traders returning to their safe-haven investments - namely, the U.S. Dollar.


After witnessing a sharp 70 point drop, the EUR/USD began to stabilize while maintaining its downward posture. Against the GBP, the greenback made similar gains, rising from 1.4950 yesterday to as high as 1.4682 in today's early hours. Surprisingly, the USD saw no significant change in value versus the Japanese Yen, which may lend strength to the notion that the JPY is also being picked up as a potential safe-haven. So long as stocks and other equities continue to under-perform, due to the weakening global economy and rising metal prices, the USD may regain its recently diminished safe-haven status and return to levels not seen in over two weeks, perhaps to the 1.3000 price by the day's end.


Looking over the economic calendar may lend some insight into how the USD will perform through the second half of this week. The ever-increasingly important report on Crude Oil Inventories is due to be released later today. If inventories continue growing it could signal a further lack of real growth in the economy and continue to push the USD higher throughout its pairs and crosses. On Thursday, of course, we will also see two highly important data releases: the US Trade Balance report and unemployment figures. Both are due to be released tomorrow at 12:30 GMT and will likely carry a heavy impact on the value of the Dollar.
EUR

EUR - EUR's Recent Depreciation May Not End This Week

The EUR has apparently taken a hit from the recent rally in the U.S. Dollar, and not just against the USD. Dropping against all of its major currency rivals, the EUR is poised to suffer a significant loss through the rest of the trading week. Trading as high as 1.3575 against the USD this week, the EUR is currently losing momentum and may continue to drop from its current location to as low as 1.3000. The 16-nation currency is witnessing similar losses to the GBP and JPY as well.


Many analysts claim that the Euro-Zone's primary currency is losing strength not because of an inherent weakness, but because the recent price rally was dependent on a resurgent stock market. As stocks and various other equities have experienced a sharp depreciation this week, the EUR's rally has begun to implode in on itself. Unless stocks begin to rebound once more, the EUR will likely continue its depreciation as other currencies, such as the USD and JPY, regain their safe-haven trading status.


As negative data continues to emanate from the Euro-Zone's regional economy, this consequential weakness for the EUR is apparently going to continue growing as well. The rest of this week's economic news doesn't appear to be offering any significant level of support either. With very few economic indicators being released during the second half of this week, there doesn't appear to be much in the way of stopping this downward momentum in the various EUR trading pairs.

JPY - JPY Pares Losses and Stabilizes as it Regains Trader Confidence

Somewhat surprising for the market this week is a sudden resurgence of support for the JPY. While continuously losing ground to all of its currency rivals in recent days, the Yen now appears to be regaining a portion of its previous safe-haven strength. As world stock markets released poor 1st quarter data, the USD witnessed a sharp appreciation against all of its currency rivals, except for the JPY. Two of the possible explanations are either that the JPY was unaffected by a rallying USD, which seems unlikely, or the Yen also received a small boost from the search for safe-haven investments.


The island currency experienced a roughly 50 point increase against all of its major pairs and crosses, save the USD, which is currently trading at 99.70. With very little information being released regarding the Japanese economy this week, the news events surrounding world stock markets as well as the U.S. Dollar are likely going to lead the market through Friday and into next week. Because of the deterioration of world stock markets, there is a distinct possibility that low-yielding, safe-haven currencies, such as the USD and JPY, are going to begin regaining some of their recent losses through next week.

OIL - Demand for Crude Oil Continues to Fall; As Does its Price

It appears that the recent steps taken by the Organization of Petroleum Exporting Countries (OPEC) to increase the price of Crude Oil have begun to lose their momentum. After 4 consecutive days of losing value, the price of Crude Oil currently sits just below $48 a barrel and could retain this downward momentum. As economic growth continues to provide data which indicates a further slump in demand, and as the USD rallies from poor stock market data, Crude Oil may devalue even further through to next week.


As U.S. Crude Oil inventories have illustrated these past weeks, demand for this commodity has witnessed a solid deterioration. This inventories report, which is due to be released at 14:30 GMT today, may indeed indicate that demand has continued to fall and traders could be seeing a decreasing price of Crude Oil through Friday and into next week. A price of $46 may be seen by the week's end.

Technical News

EUR/USD

There is a very distinct bearish channel forming on the hourly chart, as the pair is now floating in its lower section. In addition, all oscillators on the 4-hour chart are pointing down, suggesting that the downtrend might extend. Going short might be the right strategy today

GBP/USD

It seems that the Cable has limited its bullish correction after peaking at the 1.4941 level. And now, a bearish cross on the daily chart's Slow Stochastic indicates that the general downtrend might extend. Going short seems to be the preferable choice today

USD/JPY

The daily chart shows that the pair is currently range-trading within a restricted price range. However, as the RSI on the daily chart has dropped beneath the 70 line, it appears that bearish momentum might be arising. Going short with tight stops could be the right choice today.

USD/CHF

Ever since bottoming at the 1.1253 level, the pair has entered a very strong bullish trend and is currently traded around the 1.1490 level. And now, a flag formation on the 4-hour chart suggests that the bullish move has more room to go.

The Wild Card

GOLD

Gold prices are in the midst of a very strong downtrend, and an ounce of gold is currently traded for about $887. The daily chart shows that the current price has dropped beneath the Bollinger Bands' lower border, indicating that the bearish move is still quite strong. This might be a good opportunity for forex traders to join a very popular trend

 

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Forexyard analysis - Dollar Rises Despite Increased Risk Taking

The greenback continues its correction as better unemployment numbers and rising import prices helped to strengthen the Dollar yesterday. Liquidity may be thin during today's trading due many European firms closed for holiday. However, this may only increase price volatility, creating the potential for traders to take advantage of other's missed opportunities.

Economic News

USD - The Greenback Heads for Its Weekly Gains

The U.S Dollar advanced against the EUR and the Yen on Thursday as better than expected U.S. weekly jobless claims helped spark a rally in the market, rekindling appetite for riskier assets. A batch of economic data including a dip in jobless claims and a rise in import prices, have improved sentiment for the greenback. In afternoon trading, the USD was 0.8% higher versus the yen at 100.46, while against the EUR the U.S currency rose to 2-week high to $1.3110.

The Dollar also surged after Wells Fargo & Co., the second-biggest U.S. home lender, reported a first quarter profit that beat the most optimistic Wall Street estimates, which point to an easing in the financial crisis. The greenback has risen 2.8% against the European currency this week, the most since the period ended Jan. 9. The improved trade deficit dynamic was Dollar positive, as the U.S. trade deficit in February unexpectedly narrowed to the lowest level in 9 years analysts have said. The narrowing U.S. trade deficit may further support the Dollar as the U.S. spends fewer greenbacks in international markets to buy foreign products.

Currency movements may be volatile in Asian and European trading today as the Easter holiday in the region reduces liquidity amid thin trading volume, exaggerating market moves. This can give volatility traders good reason to enter the market today as the Dollar could extend its positive momentum into the holiday weekend. The EUR/USD could trade as low as the 1.0350 support level today.

EUR - EUR Falls on Speculation the ECB Will Lower Its Benchmark

The European currency lost 0.4% versus the USD, down to $1.3112 and eased 0.1% to 131.94 Yen yesterday, on concerns the Euro-Zone economy would skid more deeply into recession in the coming months. The market has been watching for signs the European Central Bank (ECB) will take unconventional steps to improve credit availability after similar moves by the Federal Reserve and other major central banks.

European Central Bank President Jean-Claude Trichet said the central bank still had some leeway to cut its main Interest Rate from its record low of 1.25% and that benchmark rate below 1% is still open for debate. The central bank would lay out plans for possible unconventional monetary policy measures at its next meeting on May 7. However, Trichet would not give any further details.

Meanwhile, the British pound had also sunk to $1.4663, compared to $1.4704 late Wednesday. Earlier Thursday, the GBP was little changed against the Dollar after the Bank of England left its key lending Rate unchanged at an all time low Thursday and said it would continue buying government bonds and other assets. Policy makers were widely expected to stay on the sidelines after an aggressive series of Rate cuts slashed the bank's benchmark from 5% to 0.5% since October.
JPY - Yen Drifts on Market's Slow Activity

The Yen drifted against the Dollar on Thursday, holding on to gains made the previous day as currency market remained quiet, unwilling to build positions ahead of earnings reports by major U.S. banks next week. The Yen was flat against the USD at 99.85 yen after rising about 0.8% on Wednesday. The Japanese currency fell as low as 101.45 on Monday to strike a 6-month peak. The Yen was also unchanged against the EUR, settling at 132.50.

Data on Thursday showed Japan's machinery orders, a leading indicator of corporate spending, unexpectedly rose in February, a rare positive sign as the country suffers its worst recession since World War Two. Traders said expectations of the stimulus package helped the Yen's rebound against the Dollar and the EUR but investors may refrain from pushing it higher past the 101 level.

OIL - Oil Breaks $52 a Barrel

Crude Oil prices rose nearly 5.8% on Thursday, fueled by a rally on Wall Street and data showing that the number of workers filing new claims for unemployment benefits fell last week. Adding support to Crude, the UK consultancy Oil Movements said on Thursday that Organization of Petroleum Exporting Countries (OPEC) production will fall 280,000 barrels per day (BPD) in the four weeks ending April 25th. OPEC has agreed to slash 4.2 million BPD of crude output since September to counter falling prices and match slumping world demand.

Oil prices had also climbed Wednesday on weekly Energy Information Administration data showing a smaller-than-expected suppl in U.S. crude inventories and a big slump in distillate stocks. The market reacted violently as optimism in equity markets about the U.S. economy carried over into Crude. The U.S. Economic data that showed crude-oil supplies increased 1.65 million barrels to 361.1 million last week, the highest since July 1993.

Technical News

EUR/USD

After touching on its daily low at 1.3091, the pair has rebounded and is steadily appreciating. There is currently a bullish cross on the 4-hour chart. Perhaps the bullish momentum may continue throughout the day. Also the Bollinger Bands appear to be tightening on the 4-hour as well as the daily chart, indicating a violent breach of the borders may be imminent. Traders may look to be long on this pair today.

GBP/USD

The pair has been range-trading for a while now, with no specific direction. The Daily chart's Slow Stochastic is providing us with mixed signals. All oscillators on the 4-hour chart do not provide a clear direction as well. Waiting for a clearer sign on the hourlies might be a good strategy today.

USD/JPY

The price of this pair appears to be floating in the over-bought territory on the daily chart's RSI, indicating a downward correction may be imminent. The downward direction on the 4-hour chart's slow Stochastic also supports this notion. When the downward breach occurs, going short with tight stops appears to be the preferable strategy.

USD/CHF

The bullish trend is loosing its steam and the pair seems to be consolidating near the 1.1580 level. The daily chart is already floating in over-bought territory, indicating a bearish correction might take place in the nearest future. When the downward breach occurs, going short with tight stops appears to be the preferable strategy.

The Wild Card

Crude Oil

Crude Oil prices rose significantly yesterday and peaked at $52.17 per barrel. However, there is a bearish cross on the hourly chart's Slow Stochastic, suggesting that the recent upward trend is loosing steam and a bearish correction is impending. This might be a good opportunity for forex traders to enter the trend at a very early stage.

 

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Forexyard Analysis - Dollar Strengthens Amid Holiday Trading

The movements we saw during Friday's trading session may be have been exaggerated on Friday and may be reversed. Today many trading desks will be vacant during the European trading hours. Traders should be aware of the volatile price swings that are prone to happen when there is a lack of liquidity in the forex market.

Economic News

USD - Volatile Week Expected Due To Batch of U.S Economy Publications

Last week the USD saw rising trends against most of the major currencies. The Dollar rose significantly against the EUR and the GBP; however it dropped against the JPY.

The greenback rose on relatively positive data from the U.S economy, which came over the past week. The most surprising indicator was the U.S Trade Balance. The Trade Balance measures the difference in value between imported and exported goods and services during the month of February. Expectations for this report suggested that the deficit should slightly expend from 36.0B to 36.6B. However, the real result was shocking and stated that the U.S deficit has dropped to a merely 26.0B, which makes a nine-year low for this indicator. The immediate reaction for this publication was of course a massive uptrend for the Dollar, in light of the stunning figure. However, in a wider perspective, traders should suspect a reversal of the trend.

The reason is simple; usually when the deficit shrinks it is due to expanding export activity, which signals a strong and healthy economy. The problem is, when looking more in-depth at the numbers, it's very easy to see that the real reason for this figure is not growth in exports, but rather a weakening of imports, which is the U.S leaders worst fear. A significant drop in demand for imported goods and services means that U.S consumers are tightening the belt more and more, in order to cut back on expenses, which is the recipe for the elongation of the recession. By the time investors will get a better look at the full picture of this report, the USD might reverse trends.

As for the week ahead, a batch of data is expected from the U.S. economy. Traders are advised to stay alert for the Producer Price Index, which is an excellent gauge for U.S inflation. It is also recommended to look for the Building Permits publication expected on Thursday 12:30 GMT. This is one of the first inflationary and economic reports released as opposed to the different housing sector reports. It is highly regarded in the market traders should take advantage of its impacts. We may see the Dollar trading in a tight range of 1.3100 to 1.3400 this week.

EUR - EUR Dropping In Light Of Poor Data

Last week, traders who went short on the EUR may have been required to boost their equity. The EUR saw downtrends against all the major currencies, as the EUR/USD dropped below the 1.3100 level, and the EUR/JPY dropped below the 131.00 level.

The EUR depreciated on some negative publications which took place last week from the leading economies in the Euro-Zone. European Monthly Retail Sales decreased by 0.6% in February as opposed to January, for the first time in 4 months. In addition, the German Factory Orders, a report which measures the change in the total value of new purchase orders placed with manufacturers, continued the negative trend line, and dropped by another 3.5% in February, completing six consecutive months of negative figures for this survey. Another poor publication from Germany was the German Industrial Production, which fell by 2.9%, in accordance to expectations. This publication was the sixth negative figure in a row as well, further emphasizing the poor production conditions in Germany. Being the largest economy in the Euro-Zone, investors are responding with fears to the worrying figures, and the drop in EUR value was just a matter of time.

Looking ahead to this week, traders are advised to follow the European Consumer Price Indices scheduled on Thursday at 09:00 GMT. Analysts expect both indices to show that the inflation level in the Euro-Zone continues to moderately rise. However, in case the release will reveal European nations are suffering from deflation, traders are likely to see another drop in the value of the EUR vs. its major currency counterparts. Traders are also advised to look for the two speeches from Jean-Claude Trichet, the European Central Bank President, later this week, as lately his performances turned a great deal of volatility in the market due to his announcements.

JPY - JPY Appreciates Against All the Majors

After a long while, the Yen may have signaled its recuperation week after strengthening on all fronts. The USD/JPY pair was traded above the 100.00 level throughout most of the week, and the GBP/JPY dropped beneath the 146.00 level.

Last week as predicted, the Bank of Japan (BoJ) decided to keep its Interest Rate at 0.10%, the lowest in the industrial world. The main objective of the low Interest Rate is to keep the JPY weak, as the Japanese leadership puts it faith in the hope that a weak Yen will support Japanese exports, which in turn may be the primary tool to pull the economy out of recession. However, it seems that the low Interest Rate's effect has diminished, and now the JPY might be strengthening again. In this case, the BoJ is likely to use every trick in the book in order to keep its local currency's value as low as possible, and traders who'll catch their plans on time, could gain significant profits from this.

As for this week, the most significant publication from the Japanese economy will come on Thursday, as the Tertiary Industry Activity is expected at 23:50 GMT. This survey, which measures the change in the total value of the services purchased by businesses, is expected to drop by 0.7%. Such a result is likely to generate bearish trends for the JPY's pairs and crosses, as a decrease in business activity usually signals a turn for the worst in the local economy. A breach of the 101 resistance level is possible for the second week in a row.

OIL - Crude Oil is reaching for $53 a Barrel

Crude Oil underwent an extremely volatile session over the past week. The week began with falling prices, as a barrel of Crude Oil was traded for less than $48 a barrel. However, it went straight up from there, and a barrel of Crude Oil is currently traded for more than $51.00 a barrel.

Crude Oil has initially dropped after the International Energy Agency said that during 2009, demand for Oil is likely to fall to its lowest level in five years, as factories shut down and car sales tumble in light of the global recession. Later on Crude Oil's price had increased mainly due to the fact that the USD has limited its bearish trend. Considering that Crude Oil is valued in Dollars. A change in trends for the USD on many occasions has had the same effect on Crude Oil.

Looking ahead to this week, traders are advised to follow the news from the leading economies, especially from the U.S, and to keep in mind that the value of Crude Oil is highly influenced by the value of the USD. Crude Oil may be slightly overvalued now. A target price for the commodity may be $50.

Technical News

EUR/USD

The charts have been displaying contradictory signals between them, giving traders a multitude of trading choices for the day. The 4-hour chart shows a bearish cross has formed on the Slow Stochastic Oscillator, indicating a potential depreciation of the price. However, the daily chart's Slow Stochastic shows a bullish cross. Day traders may look to go short, while swing traders may want to go long today.

GBP/USD

The Bollinger Bands on the 4-hour chart appear to be tightening, indicating a violent breach may occur in the future. The direction may be distinguished by the signals on the hourly chart which displays a bearish cross on the Slow Stochastic, indicating that a downward correction might take place. The hourly chart also shows the pair trading at the upper border of its Bollinger Bands, which indicates that the pair may fall to its lower border. Going short may be the right move.

USD/JPY

The pair has been holding steady today during the Japanese trading session, primarily range trading around the 100.40 price level. However, the daily chart has the pair trading in the upper zone on the Relative Strength Index, indicating the pair may be oversold. The hourly chart shows the pair has reached the upper border of the Bollinger Bands and may fall to the lower border. Going short could be the right play.

USD/CHF

After dropping below the 1.1530 level this morning, the charts are displaying signals that may lend to two trading strategies today. The 4-hour chart shows a bullish cross has formed on the Slow Stochastic Oscillator, indicating the potential for an appreciation of the pair. On the daily chart, a bearish cross is displayed, indicating a potential downward move in the price. Going long early and then waiting for the reversal could be a profitable move.

The Wild Card

Crude Oil

Crude Oil is holding at $51.30 and may be ready to make a move lower. The daily chart shows a bearish cross on the Slow Stochastic and the 4-hour chart has the pair trading in the overbought zone, signaling the pair could head lower. This may present forex traders with a good opportunity to go short on Crude Oil today.

 

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Forexyard analysis - EUR Correction Continues

Liquidity was tight during yesterday's trading as holidays in Western Europe and the States reduced the number of market participants. This helped to exaggerate movements in the currency market. This type of trading yesterday helped the EUR continue to rise versus the Dollar.

Economic News

USD - Gloomy Stock Market Puts Downward Pressure on the USD

In regards to the light news days traders have been experiencing recently, most active investors have tuned into the status of the stock market, which has seen a light downward slide lately. As a result, the USD also slid partially against its major currency counterparts. Ending the day down at 1.3316 against the EUR and 1.4831 against the British Pound, the Dollar sustained some moderate losses. However, throughout today's early trading hours the USD appeared to be recovering some of these losses. We could potentially see a rebound throughout the day.

With a relatively heavier news day expected, the USD could experience much more volatility throughout today's trading. With significant data on U.S. retail sales and inflationary figures for producers, the U.S. economy will likely be the primary driving force in trading later on. Towards the end of the day, Federal Reserve Board Chairman Ben Bernanke is also due to speak at Morehouse College in Atlanta regarding the recent financial crisis. His appearances tend to move the market as traders speculate about future monetary policy decisions based on the subtle clues in his speeches.

The stock market has been having a relatively stronger impact on the value of currencies lately. This is mainly because many eyes are watching economic indicators very closely in anticipation of signs that the economy is turning a corner and beginning to recover. This hopeful optimism may help the economy recover faster as speculation becomes a strong player in the growth of markets. If that is indeed the case, the USD may begin to strengthen in the short-run, but weaken overall as its safe-haven status is diminished.

EUR - EUR Not Driving its Own Market; Traders Look to the USD

The EUR appeared to be yesterday's losing currency pair, as it lost ground to every major counterpart except the USD. Trading up against the Dollar at 1.3316 at the end of yesterday's trading session, the EUR has now actually lost most of what it gained and is currently riding a downward slope against the greenback. Dropping back to 0.8970 against the Pound after making short-term gains, and sinking against the Yen to 132.70, the EUR's recent losses highlight the rising weakness in the Euro-Zone's regional economy.

With no news expected out of the Euro-Zone, the 16-nation currency is not expected to out-perform any of its currency rivals in the hours ahead. In fact, with almost zero news being released from the European Monetary Union this week, the driving force behind the EUR's pairs will most likely be the GBP and USD. With a relatively heavy news week for the USD, it has been forecast by many that the USD will be this week's market mover.

With an already low confidence level in the European economic system, traders have begun to look for weakness in other currency pairs when deciding when to enter a position on the EUR. Without a shock to the system in the form of quantitative easing, a reduced interest rate, or economic stimulus, the EUR will likely be a follower instead of a leader as other world currencies dictate its direction and momentum. Traders should look to the Dollar this week for the direction of the market.

JPY - JPY Posts Losses Throughout the Day; Recovers in Early Trading

The JPY has made a strong rebound over the past few hours. After steadily losing ground to most of its currency rivals, the Japanese Yen is now beginning to regain its losses from a correction in the market. Ending the day at 100.33 against the USD, the Yen is now trading at 99.67. Also, dropping as low as 134.21 against the EUR, the JPY is currently trading at 132.80 against this 16-nation currency in today's early trading hours, and there doesn't appear to be any signs of stopping this recent movement..

As many equities and various stocks feel the pinch from recent banking and economic data, traditional safe havens have gotten slightly more relevant. However, yesterday's lack of data highlighted the growing weakness in world stock markets and traditional safe havens apparently responded with downward trends as well. As a correction to this recent downward movement, the Yen has started its latest rebound and may continue to do so throughout the trading day

OIL - The Price of Crude Oil Flirts with the $50 Price Level

The price of Crude Oil has appeared to be flirting with the $50-a-barrel mark over the previous week. With the future strength of the USD coming under scrutiny by investors lately, the price of Crude could potentially rise back towards $55 in the days ahead. However, with the latest batch of banking data, the USD could be regaining safe-haven status as investors flee the stock market. This would then push the price of oil back towards $48 a barrel.

Without any signs of a clear direction, the flirtation with the $50 price level is likely to continue. In the absence of any significant news from the Organization of Petroleum Exporting Countries (OPEC), low confidence in the stock market, and a sinking feeling about the value of the Dollar, Crude Oil could be experiencing some unpredictable volatility over the coming week, but within a relatively clear price range. Traders have a great opportunity to jump into this market today and capture these impending price movements for a healthy profit.

Technical News

EUR/USD

The 4-hour chart is showing considerable bearish signals as the bullish trend is beginning to reverse. The Relative Strength Index currently has the price trading in the overbought zone and the Slow Stochastic Oscillator shows a bearish cross has formed. The pair has also begun to reverse from the Bollinger Band's upper border with the potential to reach the lower border. This could be a good opportunity for traders to go short today on this pair.

GBP/USD

Early this morning the pair climbed to a daily high of 1.4913 and could be ready for a reversal. The daily and 4-hour chart show the pair trading in the over bought zone on the RSI. The 4-hour chart also displays a bearish cross on the Slow Stochastic Oscillator. This information could signal an imminent price decline. Going short with a tight stop may be the right move.

USD/JPY

A correction on the hourly chart could be fore coming as a price move has originated at the bottom border of the Bollinger Bands. This may signal a move from the lower border all the way to the other border. Going long with a tight stop may be a wise choice today.

USD/CHF

The recent downward correction may have pushed this pair into the over-sold territory on the RSI of the 4-hour chart, signaling an imminent upward correction. A bullish cross has also formed on the chart's Slow Stochastic, signaling a correction to the sharp downward movement from this morning. Traders may want to be long on this pair today.

The Wild Card

GBP/JPY

The pair's sustained upward movement has finally pushed its price into the over-bought territory on the 4-hour and daily chart's RSI. Not only that, but there is a bearish cross which has formed on the 4-hour Slow Stochastic Oscillator. This information points to an imminent downward correction. Forex traders have the opportunity to wait for the downward breach and go short.

 

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Forexyard Analysis - US Housing Data May Spur Further Equity Gains, USD Losses

As the market tests various support and resistance levels, traders are discovering a negative correlation between equities and the value of the USD. Each time there is a rally in the equities market, the USD takes moderate losses. This is likely due to investors pulling their money out of forex trading and into the stock market. With the release of U.S. Building Permits today at 12:30 GMT, the equity market may be affected. Look for the impact this has on the USD throughout today's trading.

Economic News

USD - EUR/USD Fails to Break Significant Resistance Level

Trading of the EUR/USD was extremely volatile today as the pair failed to break a significant resistance level. The Dollar was heavily sold during the Japanese trading session, but two hours into the European session the pair fell short of the significant 1.3300 level and proceeded to fall 1.1%. The pair made a slight recovery and range trading was experienced for the remainder of the day. The EUR/USD closed down at 1.3227 from 1.3245. Against the other major pairs, the Dollar closed up against the Yen at 99.24 from 98.38, while the Dollar lost ground against the Pound to end the day at 1.4997 from 1.4872.

Much of the currency market has been driven by the recent rally in global equity markets. Yesterday was no different. Gains in U.S. equities helped to drive investors into more risky, higher yielding currencies. This has hurt the U.S. Dollar against such currencies as the Australian and New Zealand Dollars.

Due out today are economic indicators that could help to create more volatility in the Dollar's crosses. U.S. Building Permits, which is considered to be an excellent gauge of future economic activity, is due to be released today at 12:30 GMT, along with the U.S. weekly unemployment claims report. Don't expect these numbers to shock the market with positive news. After these releases, the Dollar could end the day down against the EUR, testing the 1.3300 level once again.

EUR - ECB Member Discusses Interest Rate Cut

The EUR is experiencing a decline against most currencies as many market participants are predicating future quantitative easing measures by the European Central Bank (ECB). Comments made yesterday by ECB governor Axel Weber have led traders to believe a future interest rate cut will be made during the ECB's next policy meeting in May. However, the market is also expecting non-traditional policy moves to ease credit conditions in Europe. This could have a negative effect on the European currency, or it could bolster confidence in the EUR's future.

Yesterday the EUR finished lower against the Pound at 0.8816 from 0.8902, while the EUR finished the day against the Yen at 131.27 from 131.34.

Weber stressed that a floor should be set for European interest rates at 1.00%. Rates currently stand at 1.25%. If progress is not made to turn around Europe's economy, then we are likely to see similar purchases of government securities by the ECB as those of its American counterpart, the Federal Reserve.

Today's trading may see the EUR moved by two key data releases; year-on-year CPI and monthly industrial production figures. While many feel inflation has been all but drowned out by media reports of deflationary pressures, some believe that a higher than expected rate of inflation may signal a bit of improvement in the European economy. Monthly industrial production numbers are expected to show a bit of a turnaround. We could see the EUR recover against the Pound to the 0.8850 level.

JPY - Yen Falls from 2-Week Highs

The Yen declined against the Dollar yesterday as reduced risk sentiment had traders aggressively pursuing higher yielding currencies throughout the day. The Japanese currency came off a two-week high against both the Dollar and the EUR. Earlier in the day, traders sold off the Yen in anticipation of better than expected U.S. economic data. Those gains held throughout the day as the numbers beat market estimates. In early morning trading, the USD/JPY was trading at 98.95 while the EUR/JPY was at 130.67.

With little data to come from the Japanese economy this week, we may expect the Yen to continue to trade based on risk sentiment in the market and leading indicators from other economies. Traders are advised to follow the trends of U.S. equity markets as there appears to be a negative correlation with the valuation of the Yen and these markets.

Crude Oil - Crude Oil Inventories Continue to Rise

Despite the large jump in the supply of U.S. Crude Oil Inventories, the price of Crude still remains relatively high. Oil Inventories rose by 5.6 million barrels this week, more than twice the forecasted amount. This is the third consecutive week that Crude Oil stocks have risen. The price of Crude Oil ended the day's trading at $52.20.

Some analysts feel the price of Crude Oil may be fundamentally overvalued. Rising stock markets and an appreciating Dollar may be artificially supporting the commodity. With an absence of positive economic data, the possibility for a drop in Crude Oil prices exists. A possible price target could be below the $49 level.

Technical News

EUR/USD

This pair appears to be range trading with highs near 1.3300 and lows near 1.3150. With the price sitting near the lower figure, and apparently floating in the over-sold territory on the 4-hour chart, an upward correction back towards 1.3300 may be imminent. Buying on lows and selling on highs within this range might be a good strategy today.

GBP/USD

The latest upward movement has pushed this pair into the over-bought territory on the 4-hour and daily charts, signaling an impending downward correction. As the price hovers near the upper border of the daily chart's Bollinger Bands, the downward pressure may be gaining strength. Going short might be a wise choice today.

USD/JPY

As this pair levels off after its recent volatility, there appears to be a lack of direction as all oscillators remain in neutral territory. With a potential bullish cross forming on the hourly chart's Slow Stochastic, there is a chance that the next move will be in an upward direction. Traders may consider going long with tight stops today or waiting for a clearer signal.

USD/CHF

This pair appears to be lacking any clear indication of its impending movement as all oscillators indicate neutrality. This pair does show that it is trading in an bullish channel, however, with distinct highs and lows. Buying on the lows and selling on the highs within this channel might be a wise choice.

The Wild Card

AUD/NZD

The recent volatile upward movement pushed the price of this pair above the upper limit on the 4-hour and daily charts' Bollinger Bands and subsequently drove the price into the over-bought territory on the 4-hour chart's RSI as well. With a bearish cross beginning to form on the daily chart's Slow Stochastic, these indicators all point in one direction: down. Traders involved in the forex market have a great opportunity to join this downward movement at a very early stage if they enter the market today.

 

[forexyard]

Forexyard Analysis - Dollar Gains Momentum as the EUR Flatlines; JPY Rallies

After some surprising data regarding U.S. jobless claims yesterday, the USD saw moderate gains against its primary currency rivals. The European Central Bank (ECB) appears to be slow to recognize the required solutions to their economic woes, and Japan has regained a level of safe-haven investment as China's growth diminished through the first quarter of 2009. Safe-haven currencies appear to be gaining strength as the rest of the world's currencies continue to suffer from the recession.

Read the complete in depth forex analysis of today at our forex news center

 

[forexyard]

Forexyard Analysis - Europe Takes the Wheel of the Forex Market this Week

Last week, traders saw a flurry of economic news affecting the American economy and practically zero news emanating from Europe. This week appears to be the exact opposite. A blizzard of economic events is expected from the Euro-Zone and very little is scheduled to be released from the United States. Forex traders should definitely pay closer attention to the EUR and GBP markets this week as they will be in the driver's seat of the market for the days ahead.

Read the complete in depth forex analysis of today at our forex news center

 

[forexyard]

Forexyard Analysis - Recession Fears Reignite Safe Haven Buying

Drops in U.S. equity markets rattled investors as both the Dollar and the Yen benefited from traders unwilling to take on further risks. The price of Crude Oil also plunged due to further signs the U.S. economy has yet to turn the corner.

Read the complete in depth forex analysis of today at our forex news center

 

[forexyard]

Forexyard Analysis - Dollar and Yen Continue to Rise on High Risk Aversion

Traders moving assets to safer, lower yielding currencies appear to be playing a factor in the correction of the major crosses. The USD and the JPY have been the primary beneficiaries of this trading strategy. Comments by Treasury Secretary Geithner also have been swaying the Dollar. Further testimony by Geithner today could push the Dollar higher once again.

Read the complete in depth forex analysis of today at our forex news center

 

[forexyard]

Forexyard analysis - Traders Anticipate Heavy News Day in Forex

With an abnormal number of news events coming from Britain, the Euro-Zone and the United States today, forex traders have been in a frenzy to place their bets before the trading day gets underway. Trading during these news events, which typically carry a lot of market volatility, is a fast way to double your forex trading balance; the wise trader knows this. Special attention should be paid to the slew of manufacturing data coming from France and Germany between 7:00 and 9:00 GMT, as well as the U.S. Unemployment Claims report at 14:00 GMT. Will you take advantage of the impending volatility, or sit on the sidelines and miss out?

Read the complete in depth forex analysis of today at our forex news center

 

[forexyard]

Forexyard analysis - Dollar's Strength Set to Determine Oil Prices Today

Whilst the Dollar declined in yesterday's trading against most of its major currency pairs, Oil prices recorded considerable gains. Thus lately, there has been an inverse relationship between the greenback and the black gold. Therefore it is important to follow economic news releases from the U.S. closely today, as a weak U.S. economy is likely to lead to bearish Oil prices. On the other hand, strong U.S. economic data and a strong Dollar are likely to lead to higher Oil prices later today.

Read the complete in depth forex analysis of today at our forex news center

 

[forexyard]

Forexyard analysis - Greenback is Knocked Down by the Swine Flu in Mexico

The U.S. dollar fell on Monday to its lowest in a month against the Yen as worries about the spread of the swine flu from Mexico prompted investors into perceived safe-haven currencies such as the Yen and the CHF. Crude oil was also pushed down toward $50 a barrel on fears that the global flu pandemic that could give the world economy another knock.

Read the complete in depth forex analysis of today at our forex news center

 

[forexyard]

Forexyard analysis - Swine Flu Prompts a Return to Safe Haven Buying

Traders continue to be influenced by the pandemic of Swine Flu in Mexico. Fears of reduced short term economic activity have traders moving out of riskier, higher yielding currencies into the safe haven Dollar and Yen. Crude Oil prices also fell yesterday as investors fear a weakening demand for international travel.

Read the complete in depth forex analysis of today at our forex news center

 

[jeffsmith]

The USD and the JPY rose and the Mexican Peso fell on concern about the increase of swine flu, which has killed 103 people in Mexico and infected people in the Canada and US. The WHO declared the flu a “public health emergency of international concern” that can become a deadly disease or global occurrence of serious disease.

 

[forexyard]

Forexyard analysis - Dollar Tumbles as Investors Turn to Riskier Assets

Rising equity markets continue to push investors towards riskier assets and away from safe haven currencies such as the USD and JPY. Traders today will be following the Unemployment Claims release for further signs the U.S economic recession is easing.

Read the complete in depth forex analysis of today at our forex news center

 

[forexyard]

Forexyard analysis - U.S Manufacturing PMI Figure will Determine Today's Trend

The Dollar is likely to go volatile during and following the ISM Manufacturing PMI release today at 14:00 GMT. Meanwhile, forex traders are advised to take positions on trades, as a string of data releases coming out of Japan and Britain are likely to affect the greenback's main currency crosses.

Read the complete in depth forex analysis of today at our forex news center