Forexyard Analysis

Risk Taking Still Predominant Trend for Second Day Straight

Risk taking took over the marketplace yesterday, as the euro hit a two-month high against the U.S. dollar. A solid day for the global stock market as well as a successful bill auction in Greece, were the main factors causing investors to dump their safe-haven assets in favor of more volatile currencies and commodities.

Economic News

USD - USD Continues to Fall Against Its European Counterparts

Following the most recent return to risk taking among investors, the dollar fell against most of its main currency rivals, including the U.K. pound and euro. While an increase in the stock market is being cited as the main reason for the dollar's decline, it is also worth noting that the U.S. Trade Balance figure came in below expectations yesterday. Furthermore, strong U.K. CPI and German Economic Sentiment figures helped bring the greenback lower.

GBP/USD has shot up around 200 pips in the last 24-hours. Although a moderate correction has taken place, the pair appears to be holding around the 1.5200 level going into today's trading. EUR/USD hit a 2-month high in trading yesterday. The pair has risen around 175 pips over the last day, and is currently at the 1.2720 level.

Today, USD traders will want to watch out for several U.S. economic indicators that are likely to create market volatility. The Core Retail Sales, as well as the Retail Sales reports are set to be released at 12:30 GMT. Both are forecasted to show negative figures and could negatively impact the dollar. At the same time, should either figure unexpectedly come in above 0%, the greenback may receive a boost in afternoon trading. At 18:00 GMT, the Federal Open Market Committee is scheduled to release its latest meeting minutes. This usually provides investors with a solid indication about where the U.S. economy currently stands. USD could experience some volatility depending on the statement.

EUR - Euro Continues to Gain on Safe-Haven Dollar and Yen

Following a significant jump in the global stock market yesterday, the euro made substantial gains on most of its main currency rivals. EUR/USD hit a 2-month high before making a slight downward correction. Currently the pair is trading around the 1.2720 level. Against the yen, the euro moved up well over 200 pips during the last 24 hours. Currently EUR/JPY is trading steadily around the 113.10 level.

Today, traders will want to pay attention a number of U.S. news events, as well as several European ones. Euro-zone CPI and Industrial Production figures, set to be released at 09:00 GMT, are forecasted to come in above last month's levels. If this is indeed the case, investor confidence in the global economic recovery is likely to increase further. This would likely elevate the euro against the dollar, yen and British pound. Furthermore, several U.S. economic indicators are predicted to come in below last month's figures. Should the American economy show further signs of deterioration, the dollar will likely continue to suffer against the euro as a result.

JPY - Yen Tumbles Following Gains in the Stock Market

JPY fell against virtually all of its major rivals throughout the day yesterday, and in overnight trading. The USD/JPY has gone up some 80 pips over the last day, while GBP/JPY rose an astonishing 270 pips during the past 24-hours. The reason behind the Japanese currency's drop is largely the gains made on the global stock market. As investor confidence in the global economic recovery increases, safe-haven currencies like the dollar and yen typically drop as a result. As long as the stock market continues to see gains, traders can expect the yen to drop against more volatile currencies.

Today, the JPY value will largely be determined by U.K. and euro-zone economic indicators. Traders will want to pay attention the U.K. Claimant Count Change as well as European industrial production figures. Both are forecasted to show improvement over the previous month's results. If analysts' predictions are true, investor confidence will likely continue to rise. In this case, traders can expect the yen to drop further.

OIL - Oil Prices Shoot Up as Investor Confidence Rises

As investor confidence has risen over the last few days, oil prices continue to go up. The price of crude has shot up some 265 pips over the last 24-hours, ahead of today's U.S. inventory report. The weekly report is forecasted to show that U.S. inventories have increased over the last week. Typically this means that demand is low and prices fall as a result.

That being said, oil has seen substantial gains due to the rise in stocks over the last several days. Should indices continue to move up today, traders can expect oil prices to rise as well. Attention should be given to both European and U.S. economic indicators to see where investor sentiment stands throughout the day. Positive data out of Europe will likely lead to higher oil prices.

Technical News

EUR/USD

Yesterday's appreciation in the pair has allowed for a breach of the daily chart's long term downward sloping trend line that began in December of 2009. Supporting the shift in the trend is the positive sloping 20-day and 50-day simple moving average. This signals a shift to the upside for the trend. As such, traders should be trading with the trend and going long.
GBP/USD

A false breakout has been displayed on the daily chart as the pair previously breached below the rising channel lines beginning on June 8th. Yesterday the pair broke higher to the resistance level of 1.5240 which brings the pair back into the channel to confirm the false breakout. The pair could target the next resistance levels of 1.5380 and 1.5520 respectively.

USD/JPY

The pair is testing the 89.15 resistance level and is showing strong momentum to the upside as the Relative Strength Index (14) is sloping sharply higher. A breach above the resistance level could take the pair higher to 89.75 where a reversal to the downside may be possible.

USD/CHF

The sharp downward trend that began in early June is seeing some consolidation near the 61.8% Fibonacci retracement level from the downtrend's peak. The pullback to this level makes for a good entry back into the downtrend as today's daily high ran into resistance at the 10-day simple moving average line. The next price target is the lows from this week at 1.0480.

The Wild Card

Oil

Spot crude oil prices continue to rise following the buy signal displayed on the daily chart. A cross of the 5-day simple moving average above the 20-day simple moving average could signal the beginning of a new bullish trend. CFD traders may want to enter long with a target of $80 in the near term.
 
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Weak U.S. Retail Sales and Slowing Growth Shake Markets

Despite enthusiasm over the start of earnings season markets paired gains yesterday. Retails Sales in the U.S. came in lower than expected for the second consecutive month. Investors responded by sending equities lower. In the currency markets the Euro continued to head higher against the USD, explained by reasonably better macro data released by Europe.

Markets recovered during the mid NY trading session, just to pair gains again after the FOMC meeting minutes were published, eventually ending the NY session flat. Fed minutes released later revealed more concern over the economic recovery. The Fed stated that, for the time being, there is no need for new steps to boost the economy. However, in case the economy continues to slow, it might take the necessary measures to accelerate growth.

Economic News

USD - Retail Sales and Fed Minutes Sent USD Lower

U.S. Retail Sales and Fed Minutes released yesterday sent the greenback lower against its major counterparts. The EUR/USD pair continued the recent rally for another day. The rally gathered momentum as European macro data was better than the disappointing figures released in the U.S. The U.S. economy is signaling that the economic recovery may be slower than previously thought. The fed sees rising risks and growth at a slowing pace.

The U.S. Dollar is currently trading at 1.2750 against the EUR during early trading today.

Looking ahead to today, more macro releases will influence the greenback. Data is expected to be lower than previous months but in case economic growth is indeed slowing, data might turn even worse than expected. In this case the U.S. Dollar might continue to decline against its major counterparts.

EUR - Weak U.S. Figures Send Euro Higher

The Euro continued its rally against the U.S. Dollar for the second day, although the pair traded higher most of the day it ended almost flat. The EUR reached $1.2776, thereafter it paired some of it gains, while concerns over the European economy remains.

The EUR remained almost unchanged versus the British pound. The EUR/GBP is currently trading at 0.8342, however the EUR traded lower against the Japanese yen currently at 112.58, as investors return to buy safer assets.

Looking ahead to today, there are no major news events to be released in Europe. Therefore U.S. macro data may influence investors' appetite for riskier assets. In case figures turn worse than expected, investors would continue to prefer the EUR and GBP over the greenback. The Japanese yen, unlike the USD, could turn stronger against the Euro and British pound, as it still considered a safer asset.

JPY - Remains a Safe Heaven Currency

The JPY strengthened against the U.S. dollar as investors expressed their concerns about the U.S. economy by selling the U.S. dollar and buying the Japanese yen. The yen traded higher against most its counterparts, aided by lower likelihood of currency intervention from Japan's policymakers. It strengthened against the British pound, the euro the Canadian dollar and the Australian dollar.

Looking ahead to today traders should pay attention to the support line at 88.00. A below this level might take the USD/JPY pair even lower. Some analysts estimate that that the yen could even reach as low as 85 in the following months.

OIL - Worries about Double Dip Hit Crude Oil price

Crude Oil price ended flat yesterday after Fed Meeting Minutes signaled slower growth than previously expected. Crude Oil traded higher above $78 before NY trading session only later to pare its gains after disappointing U.S. Retail Sales, declining further after the Fed published its monthly minutes.

Crude Oil prices have risen sharply since last Tuesday from $71.46, currently trading at $77.25. Having little effect on price, Crude Oil stockpiles decreased by 5.1 Million barrels according to the weekly EIA report published yesterday. Distillate stocks rose by 2.9 million barrels, analysts expected, on average a rise of 800K barrels.

Crude Oil prices may decline further in the short term if economic figures continue to deteriorate. Investors are worried about a possible double dip, or a renewed recession. The Fed at this stage will not take steps to accelerate the economy.

Technical News​


EUR/USD

Yesterday the EUR/USD rose as high as 1.2776 but found resistance at the upper line of the pair's rising price channel. The close was also above the resistance line at 1.2750 and the long term downward trend line that began in December of 2009. Traders may want to target the next resistance line at 1.3100. This level also coincides with a 76.4% Fibonacci retracement level from the pair's bullish trend in 2009.

GBP/USD

The pair ran into technical resistance yesterday, rising to a high just shy of 1.5300. This price level is reinforced by the long term downward sloping trend line that began in July of 2008. The price level also coincides with a 23.6% Fibonacci retracement level of the same long term bearish trend. A breach of this price could send the pair to the resistance levels of 1.5380 and 1.5520 in the short term, with a long term target at 1.6425.

USD/JPY

The brief bullish correction has ceased in the pair as yesterday the price fell to the support level of 88, the significant resistance level reached on the same day of the "flash crash". Falling momentum may push the pair lower as the 10-day Momentum Indicator is falling below the 100 level. The price has also failed to make a significant breach of the 20-day simple moving average. The next target for the pair could be the support of line at 87.

USD/CHF

Yesterday the pair pulled back to the 61.8% Fibonacci level at 1.0610 before heading lower to the daily low set on Tuesday. A breach of the 1.0480 support level could send the pair lower towards the 76.4% Fibonacci retracement level from the previous bullish trend at a price of 1.3050.

The Wild Card

Oil

Rising prices have been accompanied by increasing momentum as the 14-day Momentum indicator is sloping sharply higher. Yesterday the price of the commodity rose to a high of 78.12 before falling back for a slight gain. CFD traders may want to continue to be long on spot crude oil with a near term price target of $80.
 
Dollar Anticipates Release of U.S. Core CPI

The U.S. Core CPI is the primary publication today that is set to determine the level of the dollar when the report is released at 12:30 GMT. The other main releases that are set to dominate forex trading, especially for currencies such as the dollar and euro is the publication of the U.S. TIC Long Term Purchases and Prelim Consumer Sentiment at 13:00 GMT and 13:55 GMT respectively. Traders may find good opportunities to enter the market following these vital announcements.

Economic News

USD - USD Falls on Negative Economic Data

The dollar fell broadly against most of its major currency pairs on Thursday, as soft inflation and manufacturing data added to concerns about the strength of the U.S. economy. By yesterday's close, the dollar fell around 1.5% against the EUR to 1.2940, a 2-month low. The dollar experienced similar behavior against the GBP and closed at 1.5455.

U.S. producer prices declined for a third straight month. The data came just a day after minutes of the Federal Reserve's latest meeting revealed that policy makers think they may need to do more to boost the economy if a sputtering recovery slows any further. The news helped push the EUR to its highest against the dollar since May.

Another leading indicator released yesterday was U.S. Unemployment Claims. This number handedly beat last week's result 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, data releases are expected from the U.S. economy. These figures are expected to set the tone for the USD's pairs and crosses. Special attention should be given to the Core CPI which is expected to be unchanged from its previous reading. Traders pay close attention to this figure as it has a strong correlation with the value of the U.S. dollar. Also today, the Prelim UoM Consumer Sentiment is scheduled and should also have an impact on the market because if it delivers unfavorable figures it will validate a problematic U.S. economy, and the USD is likely to weaken as a result.

EUR - EUR/USD Hits 2-Month High

The EUR strengthened against most of its major counterparts yesterday, continuing to prove for the time being that this is a solid currency that traders can rely on to provide them with steady profits. The 16 nation currency extended gains versus the USD on Thursday, nearing 1.2940 for the first time in 2 months after the Philadelphia Federal Reserve's business conditions index fell sharply in July. The EUR experienced similar behavior against the JPY and closed up at 113.10.

Weakness in the Philadelphia's Fed's mid-Atlatnic district added to concern about the U.S. economy, which has been heightened in recent days by a clutch of disappointing inflation, manufacturing and retail sales data.

The single currency, which slid below $1.19 in June on euro-zone debt trouble, has since risen by more than 8% after smooth government debt auctions in Greece, Portugal and Spain eased concerns.

JPY - Yen Experiences Mixed Results against Major Currencies

The yen completed yesterday's trading session with mixed results versus the other major currencies. The JPY was broadly unchanged versus the CHF yesterday and closed its trading session around the 83.85 level. The JPY also saw bullishness against the USD and closed at 87.50.

The JPY's trends will be affected by the rallies of its primary currency pairs today. It seems that the USD and EUR are expected to continue a volatile trading session today, especially against the Japanese currency. Traders should keep a close look on the news coming from the U.S. and Europe as these economies will be the deciding factors in the JPY's movement today, especially the U.S Core CPI at 12:30 GMT. It is also advisable for traders to follow any unexpected comments coming from key Japanese governmental figures, as this is also likely to lead to further JPY volatility.

OIL - Oil Prices Fall Based on Weak U.S. Data

Oil fell below $77 a barrel on Thursday after disappointing U.S. economic data curbed expectations for future demand growth. Oil prices fell as low as $75.80 before it rebounded again and closed at $77.35

Oil has traded between $70 and $80 this month as investors ponder how much a pullback of government stimulus spending could undermine global economic growth and crude demand in the second half.

However, Crude oil prices were supported by the weekly inventories report from the Energy Department's Energy Information Administration on Wednesday, which showed crude supplies shrank more than analysts had forecasted, a sign demand may be improving.

Technical News

EUR/USD

Bullishness in the pair continues as the price breached and closed above the upper channel line that the pair has been trading in since early June. The close was also above the 100-day simple moving average line. The 10-day RSI is sloping sharply higher, indicating that the momentum is to the upside. Near term resistance for the pair rests just below 1.3100.

GBP/USD

The pound was a strong mover in yesterday's trading as the cable closed above the 23.6% Fibonacci retracement level for the long term downward trend, as well as a close above the long term downward sloping trend line that began in July of 2008. Traders should be long on the pair with a minimum target at the resistance level of 1.5520.

USD/JPY

A significant drop in the value of the pair was registered yesterday as the pair fell as low as the support level at 87, the year to date low. The downward momentum looks to continue as an absence of technical resistance on the charts could move the pair as low as 84.80, the November 2009 low.

USD/CHF

Yesterday the pair breached below the near term resistance levels of 1.0480 and 1.0430, ending the short term consolidation that the pair had experienced. The next target for the pair will be the 74.6% Fibonacci retracement level from the previous bullish trend at a price of 1.0350.

The Wild Card

Oil

The daily chart shows two candlestick patterns that hint to a slowdown of the recent bullishness of spot crude oil. Wednesday's trading ended slightly higher but formed a doji candlestick, signaling potential short term weakness. Yesterday's trading was more volatile with the pair falling as low as the support level of 75.80 and rising as high as 78.06, forming a long legged doji candlestick. This shows indecisiveness on the part of traders and signals wavering support for the bullish move. CFD traders may want to tighten their stops on any long positions they may have in spot crude oil.
 
Dollar Declines to 2010 Low Against Yen

The U.S currency dropped to its weakest level in 2010 against the Japanese Yen as signs the U.S. economic recovery is losing momentum supported speculation that the Federal Reserve will keep borrowing costs low for the rest of the year. The USD also declined versus the EUR for the first time since May as a gauge of U.S. consumer confidence dropped more than economists expected and corporate revenue missed analyst forecasts.

Economic News

USD - Dollar Weakens on Signs of Economic Slowdown

The U.S Dollar fell the most against the EUR in 14 months and dropped to the lowest level this year versus the Yen as economic reports added to evidence that the U.S. recovery is losing momentum.

The greenback touched a level weaker than $1.30 versus the European currency as minutes of the Federal Reserve meeting last month indicated policy makers trimmed their forecasts for growth.

On Friday, a private survey showed U.S. consumer sentiment weakened in early July to an 11-month low and capped a week which saw U.S. data on the softer side, raising questions about the sustainability of the U.S. recovery.

Investors are closely watching the USD/JPY for the possibility of the greenback dropping to a 15-year low by breaching the November 2009 trough of 84.00 yen. Analysts said with U.S. yields heading lower, the Dollar could break past support around its 7 month low of 86.25 yen in the next few days.

EUR - EUR May Erase Gains on Bank Stress Tests

The European currency rose for a 3rd straight week against the U.S Dollar ahead of partial results of stress tests on the region's banking system, which are due on July 23. The 16 nation currency has surpassed $1.30 on Friday for the first time since May and traded around $1.2950.

The EUR has rallied 8.9% versus the Dollar since reaching a 4 year low of $1.1877 on June 7 as concern eased that Europe's sovereign-debt crisis would undermine the region's economic recovery.

However, the EUR may reverse its recent advances against the U.S Dollar given the slim likelihood of a very positive surprise from European bank stress tests this Friday, analysts said. European regulators will be examining the strength of 91 banks to determine if they can survive potential losses on sovereign bond holdings. The European currency is unlikely to fall past $1.20 unless there is a major negative surprise given that U.S. economic growth shows signs of slowing down.

JPY - Yen Rises Towards Year's High

The Japanese Yen rose toward its strongest level this year against the U.S Dollar as signs the U.S. economy is losing momentum added to speculation that the Federal Reserve will keep interest rates at almost zero this year. The Yen also rose against the Dollar as falling U.S. yields continued to weigh on the U.S. currency, with traders targeting stop-loss orders placed under 87.00 Yen.

Japan's currency gained versus all 16 of its major counterparts and rose toward the strongest level this year. The Japanese currency traded at 87.20 per USD from 87.40 yesterday, after climbing to 87.17, approaching this year's high of 86.97 set on July 1.

Crude Oil - Crude Falls below $76 On Poor U.S. data

Crude Oil prices fell below $76 a barrel in early Asian trading Monday, extending the previous session's decline on concern about the U.S. economic outlook after data showed consumer sentiment fell to a near one-year low.

However, analysts said marginal slide in Oil prices shows that Crude was receiving ample support at above $74 a barrel, thanks to bullish inventory reports that showed large draw downs in U.S. Crude stockpiles over the past three weeks.

Technical News
EUR/USD

Following the prolonged upward movement the pair has experienced recently, it appears a bearish correction may be imminent. The Relative Strength Index on the 8-hour chart is currently in overbought territory, as is the Stochastic Slow on the daily chart. Traders are advised to go short with tight stops today.

GBP/USD

Mixed technical signals indicate that no clear direction for this pair is presenting itself at this time. While the Stochastic Slow on the 4-hour chart indicates the pair may experience upward movement later today, the Relative Strength Index on the 8-hour chart shows the opposite. Traders may want to take a wait and see approach for this pair today.

USD/JPY

Most technical indicators are showing this pair trading in oversold territory, indicating that an upward correction will likely occur today. The Stochastic Slow on the daily chart shows a bearish cross forming, and the Relative Strength Index on the 8-hour chart supports the theory that upward movement is forthcoming. Going long may be the preferred strategy today.

USD/CHF

Practically all technical indicators show the pair currently trading in neutral territory, with no clear direction at this time. These include the Stochastic Slow and Relative Strength Index on the 8-hour and daily charts. Traders are advised to take a wait and see approach for this pair today.

The Wild Card

Hang Seng Index

The Slow Stochastic on the 8-hour chart shows a bearish cross forming, indicating that upward movement could occur in the near future. The Relative Strength Index on the 4-hour chart supports this theory. CFD traders are advised to go long with tight stops today.

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EUR Higher from Risk Appetite ahead of Stress Test Results

For the moment, anyways, the EUR continues to enjoy the spotlight while the market awaits the results of the recent stress tests. Risk appetite in the market has surged from a wave of optimism. A number of analysts have been concerned about the EUR's sudden surge, however, since there is little to support such movement. European debt concerns remain, growth continues to lag behind expectations, and the bank stress test results are due this Friday which may reveal just how bad off the region is financially.

Economic News

USD - US Dollar under Pressure from Slow Growth

The US Dollar continues its decline against the other major world currencies. Concerns have been raised these past few weeks that the US economy is not recovering as quickly as previously anticipated. The decrease in expectations has put a damper on US investments and brought the USD down somewhat.

Against its primary rival, the EUR, the greenback has experienced gradual declines to a current price level of 1.2900. Against the Japanese Yen, the greenback has actually fallen to a 7-month low near the 87.00 price mark. The buck doesn't appear to be fairing too well against the British Pound or Swiss Franc either.

Concerns about slowing economic growth may have increased with Tuesday's housing reports, but today is expected to be a light news day. So long as market events continue to be ineffective at changing trends, the USD will continue its slide against the other major currencies.

EUR - Is EUR Rising Too Quickly before Stress Test Results?

The EUR has experienced irregular optimistic movements these past several weeks. Despite a string of negative news releases, the 16-nation single currency continues to make gains on rising risk appetite. Some of the largest gains have been made against the US Dollar and Japanese Yen. The EUR/USD has risen steadily in value and currently trades at 1.2900, while the EUR/GBP sits at a present value of 0.8445.

A number of analysts have been concerned about the EUR's sudden surge since there is little to support such movement. European debt concerns remain, growth continues to lag behind expectations, and the bank stress test results are due this Friday which may reveal just how bad off the region is financially.

For the moment, anyways, the EUR continues to enjoy the spotlight while the market awaits the results of the recent stress tests. Risk appetite in the market has surged from a wave of optimism. Since the EUR-Zone isn't expected to publish any news today there is very little chance of a reversal and traders are still taking the opportunity to join the uptrend before it comes crashing down.

JPY - Yen Trading at 7-Month High vs. US Dollar

The Japanese Yen has gradually gained against the US Dollar in this week's trading. Asian stocks took a small hit last week, but they appear to be on the rebound as of yesterday. On the other hand, the JPY has been surging against the USD, with a current value near a seven-month low of 87.00.

Against other currencies, such as the EUR and British Pound, the Yen has experienced similar gains. The EUR/JPY currently trades near record lows of 112.50, while the GBP/JPY also sits just above its all-time low with a current price of 133.23. So long as news reports come out neutral and with few surprises, there may be a strong chance for the JPY's current trends to continue throughout the week.
- Declining US Inventories Could Help Raise Oil Prices

The price of oil has been gradually rising this week as the US Dollar continues its decline. The volatility in the oil market appears to have subsided somewhat, following the successful capping of the gushing BP oil spill in the Gulf of Mexico. As long as the cap holds, speculators can take a more accurate gauge of market sentiment towards oil demand.

The American Crude Oil inventories report is expected later today at 14:30 GMT. Inventories have been in decline these past 2 months and if they continue to fall we could see a continued rise in price. A target near $80 this month may not be far off the mark.

Technical News

EUR/USD

Yesterday's steep decline may have brought the pair back in range as most indicators seem to be floating in neutral territory at the moment. Looking at the daily chart, it is evident that there might still be room for a continuation of the downward trend as the RSI is still floating in the overbought territory. Waiting on a clearer direction for the pair may be advised for today.

GBP/USD

The pair seems to be range trading at the moment, with most indicators floating in neutral territory. However, there is bearish cross evident on the Weekly chart's Slow Stochastic indicating a bearish correction might take place in the nearest future. Going short with tight stops appears to be preferable strategy.

USD/JPY

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

USD/CHF

The typical range trading on the hourly chart continues. The daily chart RSI is floating in neutral territory. However, there is an impending bullish cross forming on the Weekly chart's Slow Stochastic indicating a bullish correction might take place in the nearest future. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.

The Wild Card

Silver

Silver prices are once again dropping, and it is currently traded around $17.60 an ounce. And now, the 8-hour chart's RSI is giving bullish signals, indicating that silver prices might go up. This might give forex traders a great opportunity to enter a very popular trend.
 
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EUR and GBP Tumble Following Bernanke Speech

Both the euro and British pound fell against the safe haven currencies yesterday, following a speech from FED Chairman Bernanke which caste doubt over the pace of the global economic recovery. While the euro has traded steadily against the U.S. dollar in overnight trading, it continues to fall against the yen.

Economic News

USD - USD Sees Moderate Gains Following Return to Risk Aversion

The U.S. dollar broke the bearish trend it had been experiencing since early last month yesterday, following a speech by the Fed Chairman which led to gains for safe haven assets. The speech from Chairman Bernanke was unlike his more recent statements, in that it did not paint a solid picture of the global economic recovery. Following the speech, investors dumped riskier currencies in favor of the greenback.

Both the euro and British pound tumbled versus the dollar. EUR/USD has dropped over 100 pips over the last 24 hours, and currently stands at the 1.2768 mark. GBP/USD dropped close to 200 pips over the course of yesterday's trading session, before staging a slight comeback. At the moment, the pair is trading around the 1.5180 level.

While risk aversion appears to be the predominant market sentiment at the moment, investors will be cautiously awaiting several U.S. economic indicators set to be released today. At 12:30 GMT, the weekly U.S. unemployment figures are set to be released. With analysts predicting a slight increase in unemployment over last week, investors may continue to buy up safe haven assets in the afternoon, thereby boosting the dollar.

In addition, traders will also want to pay attention to the existing home sales report set to be released at 14:00 GMT. A decrease in home sales from last month is predicted, which if true will likely lead to further risk aversion. That being said, any unexpected increase in the home sales figure may lead to gains for the euro against the greenback.

EUR - Euro Breaks its Bullish Streak. Falls Against Yen

After a more than two month bullish streak, the euro saw serious losses against the safe haven currencies throughout the day yesterday. In addition to the 100 pip loss against the U.S. dollar, the euro also fell versus the yen. EUR/JPY has fallen over 200 pips in the last 24 hours. Analysts attribute the drop to a speech yesterday from the Fed Chairman, in which he made statements that created doubt in the pace of the global economic recovery.

Today, the euro may be able to recover some of its losses depending on the results of the French and German manufacturing data, set to be released at 07:00 GMT and 07:30 GMT, respectively. Analysts are forecasting both figures to show expansion in the manufacturing sectors of France and Germany. If the predictions turn out to be true, investors may be enticed to buy up some of the riskier currencies like the euro in morning trading. At the same time, U.S. data set to be released later in the day, are expected to show further declines in the American economy. If true, the euro may see some more losses against the dollar and yen.

JPY - Yen Soars Against Majors as Risk Aversion Returns

Following yesterday's gains, the yen continued its bullish trend against the majors in overnight trading. Since 20:00 GMT last night, GBP/JPY has tumbled around 85 pips to its current level of 131.33. Meanwhile, it appears that the JPY has fully confirmed its status as the premier safe-haven currency by making substantial gains against the U.S. dollar. The dollar dropped some 60 pips during overnight trading against the yen. Currently USD/JPY is trading around the 86.50 level.

Today, a lack of Japanese news events means that yen values will likely be determined by U.S. economic indicators. Traders will want to pay attention to the U.S. Fed Chairman's testimony at 13:30 GMT and the Existing Home Sales Report at 14:00 GMT. Should either of these events lead to further uncertainty in the pace of the global economic recovery, the yen will likely continue its bullish trend as a result.

OIL - Oil Prices Tumble Following Surprise Increase in Reserves

Investors were surprised to learn of an increase in U.S. crude oil supplies yesterday. The news indicated that oil demand in the world's largest energy consuming country was less than originally thought, causing oil prices to tumble. Since yesterday afternoon, the price of crude oil went from 78.60, to its current level of 76.40.

Analysts are predicting a further drop in prices today, assuming the U.S. unemployment data and existing home sales figure come in as forecasted. Both news events are expected to illustrate the slow pace of the U.S. economic recovery. Typically, during times of economic uncertainty, oil prices tend to fall. At the same time, should any of the American data come in better than expected, the price of crude may rise as a result.

Technical News

EUR/USD

The pair slipped yesterday to the minor support level near 1.2770 following the bearish engulfing candlestick pattern on the daily chart. Despite the change of the trend to the upside, current momentum is lessening, shown by the falling Momentum (14) indictor and a Slow Stochastic that is also heading lower. The next support for the pair rests at the 1.2670 level.

GBP/USD

Yesterday's price action presents two key points on the daily chart. The price of the cable rose as high as the lower channel line which was previously broken and is now being used as a resistance barrier. Despite the sharp drop in value of the pair, the price managed to close above the 20-day simple moving average (SMA). Traders can use the SMA as a support level and as a basis for an entry long on the pair with a target at the 1.5300 level.

USD/JPY

The Relative Strength Index on the 4-hour chart shows an acceleration of the downtrend for the pair and could lead to a further drop in the price. The pair is currently testing the support level at 86.25. A breach below this level could take the pair to the 84.80 level as the daily chart shows a lack of technical support between the two levels.

USD/CHF

Tuesday's trading ended slightly lower for the day but formed a hanging man candlestick pattern, signaling an end to the upward movement in the pair. Yesterday's bearish move in the pair confirms the correction has run its course and the pair looks to head lower to its next support at 1.0400.

The Wild Card

Oil

Yesterday's sharp drop in price may have made for a good entry opportunity to go long on spot crude oil. The price closed at $76.35, near the 38.2% Fibonacci retracement level from the previous bearish trend. A breach back above this price could give CFD traders an opportunity to enter long with a target at the resistance level of $78.10.

Read more forex analysis at our forex news center.
 
Euro-Zone Bank Stress Test Results Expected Today

The Euro managed to erase most of its weekly losses against the Dollar yesterday, as investors expect bank test results to show that the Euro-Zone's condition is stabile. The market waits to hear that the Euro-Zone's debt crisis is not a threat to the region's stability. Will the Euro strengthen following the test results?

Economic News

USD - Bernanke's Testimony to Weaken the Dollar

The Dollar slid against most of the major currencies during yesterday's trading. The Dollar lost about 180 pips against the Euro today as the EUR/USD reached above the 1.2900 level once again. The Dollar also saw a 150 pips drop against the Pound.

The Dollar's bearish trend came as a result of Fed's Chairman Bernanke's testimony before the House Financial Services Committee. Bernanke stated that there is an unusually uncertain outlook for growth, yet he added that the Fed's near zero interest rates are already very simulative. He also added that if the recovery seems to be faltering, the Fed will consider different alternatives, such as lowering borrowing costs. It seems that investors expected the Fed Chairman to have a more proactive approach, as several economic data that were published during the last month have shown that the U.S. economic recovery isn't progressing as well as expected.

In addition, while Bernanke has delivered his speech, the Department of Labor has released the weekly Unemployment Claims data. The report showed that jobless claims in the U.S. have increased by 37,000 to 464,000, beating expectations for merely 449,000 claims. The combination of Bernanke's speech along with the poor employment data has weakened the Dollar against most of its major counterparts.

As for today, traders are advised to follow U.S. equity markets as they have a large correlation with Dollar's trading. Traders should also follow the European Bank Stress Test Results, which will be released tomorrow. The results might have a significant impact on thee major currencies, and traders should be prepared.

EUR - The Euro Soars Following Positive Economic Data from the Euro-Zone

The Euro strengthened against all the major currencies during yesterday's trading session. The Euro gained about 180 pips against the Dollar, about 100 pips vs. the Pound, and about 250 pips against the Yen.

The Euro's strengthened against its major rivals as several positive economic reports were published. The German Flash Manufacturing Purchasing Managers' Index rose to 61.2 in July, from 58.4 on June. It is a survey of about 600 purchasing managers, who are asked to rate their level of business conditions. In addition, the European Industrial New Orders rose by 3.8% during May, beating expectations for a 0.1% drop. The report also showed that compared to the same month last year, industrial sales rose by 22.7%. The Euro-Zone's economic condition is considered to be somewhat fragile due to the high debts of several European nations. As a result, the batch of positive data has a significant affect on the Euro. Investors are looking for reasons to believe that the Euro-Zone is recovering and such positive reports are all they can ask for.

Looking ahead to today, many interesting publications are expected from the Euro-Zone. First of all will be the German Business Climate report. This is a survey of about 7,000 businesses, who are asked to rate their current business conditions and expectations for the next 6 months. The survey is expected to remain at its high level above 101. In addition, the Euro-Zone's Bank Stress Test Results are due today. The results are expected to reveal the European banks' stability, and whether the capital reserves are sufficient. Positive report will further support the Euro, however if the results won't be as satisfying as expected, the Euro might erase yesterday's profits.

JPY - Yen Drops On All Fronts

The Yen fell against mot of its major rivals during yesterday's trading session. The Yen dropped about 100 pips against the Dollar, and about 250 pips against the Euro. The Yen also slid 200 pips against the British Pound.

The Yen tumbled yesterday on speculations that the Japanese leadership is looking to weaken the national currency in order to stimulus economic growth. The Japanese press is reporting that the government will pressure the Bank of Japan to take more steps to support the economy. The Japanese economy relies greatly on its exporting, and a weaker Yen will support Japanese exporters. In addition, the current instability in Japanese politics is damaging the Yen's safe-haven image, and as a result the currency seems less appealing in times of uncertainty.

As for today, traders are advised to follow the major publications from the U.S. and the Euro-Zone, as they tend to have a large impact on the Yen. Special attention should be given to the Euro-Zone's Bank Stress Test Results, which appears to be the news even which will have the largest affect ion the market today.

Crude Oil - Crude Oil Reached Above $79 a Barrel

Crude oil rose over $79 a barrel for the first time in nearly 11 weeks. Crude oil began yesterday's trading session around $76.40 a barrel, and gained about 300 pips in a single day, to peak at the $79.40 price.

Crude oil rallied yesterday following notifications that EBay Inc. and Caterpillar Inc. saw higher earnings than expected during the last quarter. In addition, several positive economic reports were published from the Euro-Zone yesterday, suggesting that energy demand in Europe will recover soon. Another support for crude oil prices was the Dollar's bearish trend against most of the major currencies. Crude oil is traded in Dollars, and thus when the greenback weakens, oil prices tend to rise as a result.

As for today, traders are advised to follow equity markets in the U.S. as they tend to be highly correlated with crude oil trading. In addition, traders should take notice of the Euro-Zone's Bank Stress Test Results. The results are expected to reveal the region's banks stability in light of the high debts of several European nations. This report might impact global trading, and traders should be prepared.

Technical News

EUR/USD

The pair has recorded much bullish behavior yesterday. However, the technical data indicates that this trend may reverse anytime soon. For example, the 4-hour chart's Stochastic Slow signals that a bearish reversal is imminent. . Going short with tight stops might be a wise choice.

GBP/USD

The daily chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, there is a bearish cross forming on the 4-hour chart's Slow Stochastic indicating a bearish correction might take place in the nearest future. When the downward breach occurs, going short with tight stops appears to be preferable strategy.

USD/JPY

The pair has been range-trading for a while now, with no specific direction. The Daily chart's Slow Stochastic 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/CHF

The cross has been dropping for the past several days now, as it now stands at the 1.0430 level. However, the 4-hour Chart's RSI is already floating in the oversold territory indicating that a bullish correction might take place in the nearest future. Going long with tight stops may turn out to be the right choice today.

The Wild Card

Crude Oil

Crude Oil prices rose significantly yesterday and peaked at $79.20 per barrel. However, there is a bearish cross on the 4-hour chart's Slow Stochastic suggesting that a recent upwards 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.
 
Re: Euro-Zone Bank Stress Test Results Expected Today

:):):):D:D:D

Are you not supposed to post the copyright info and authors name also when stealing and posting material from another site. :p
 
Euro-Zone Bank Stress Test Results Expected Today

The Euro managed to erase most of its weekly losses against the Dollar yesterday, as investors expect bank test results to show that the Euro-Zone's condition is stabile. The market waits to hear that the Euro-Zone's debt crisis is not a threat to the region's stability. Will the Euro strengthen following the test results?

Economic News

USD - Bernanke's Testimony to Weaken the Dollar

The Dollar slid against most of the major currencies during yesterday's trading. The Dollar lost about 180 pips against the Euro today as the EUR/USD reached above the 1.2900 level once again. The Dollar also saw a 150 pips drop against the Pound.

The Dollar's bearish trend came as a result of Fed's Chairman Bernanke's testimony before the House Financial Services Committee. Bernanke stated that there is an unusually uncertain outlook for growth, yet he added that the Fed's near zero interest rates are already very simulative. He also added that if the recovery seems to be faltering, the Fed will consider different alternatives, such as lowering borrowing costs. It seems that investors expected the Fed Chairman to have a more proactive approach, as several economic data that were published during the last month have shown that the U.S. economic recovery isn't progressing as well as expected.

In addition, while Bernanke has delivered his speech, the Department of Labor has released the weekly Unemployment Claims data. The report showed that jobless claims in the U.S. have increased by 37,000 to 464,000, beating expectations for merely 449,000 claims. The combination of Bernanke's speech along with the poor employment data has weakened the Dollar against most of its major counterparts.

As for today, traders are advised to follow U.S. equity markets as they have a large correlation with Dollar's trading. Traders should also follow the European Bank Stress Test Results, which will be released tomorrow. The results might have a significant impact on thee major currencies, and traders should be prepared.

EUR - The Euro Soars Following Positive Economic Data from the Euro-Zone

The Euro strengthened against all the major currencies during yesterday's trading session. The Euro gained about 180 pips against the Dollar, about 100 pips vs. the Pound, and about 250 pips against the Yen.

The Euro's strengthened against its major rivals as several positive economic reports were published. The German Flash Manufacturing Purchasing Managers' Index rose to 61.2 in July, from 58.4 on June. It is a survey of about 600 purchasing managers, who are asked to rate their level of business conditions. In addition, the European Industrial New Orders rose by 3.8% during May, beating expectations for a 0.1% drop. The report also showed that compared to the same month last year, industrial sales rose by 22.7%. The Euro-Zone's economic condition is considered to be somewhat fragile due to the high debts of several European nations. As a result, the batch of positive data has a significant affect on the Euro. Investors are looking for reasons to believe that the Euro-Zone is recovering and such positive reports are all they can ask for.

Looking ahead to today, many interesting publications are expected from the Euro-Zone. First of all will be the German Business Climate report. This is a survey of about 7,000 businesses, who are asked to rate their current business conditions and expectations for the next 6 months. The survey is expected to remain at its high level above 101. In addition, the Euro-Zone's Bank Stress Test Results are due today. The results are expected to reveal the European banks' stability, and whether the capital reserves are sufficient. Positive report will further support the Euro, however if the results won't be as satisfying as expected, the Euro might erase yesterday's profits.

JPY - Yen Drops On All Fronts

The Yen fell against mot of its major rivals during yesterday's trading session. The Yen dropped about 100 pips against the Dollar, and about 250 pips against the Euro. The Yen also slid 200 pips against the British Pound.

The Yen tumbled yesterday on speculations that the Japanese leadership is looking to weaken the national currency in order to stimulus economic growth. The Japanese press is reporting that the government will pressure the Bank of Japan to take more steps to support the economy. The Japanese economy relies greatly on its exporting, and a weaker Yen will support Japanese exporters. In addition, the current instability in Japanese politics is damaging the Yen's safe-haven image, and as a result the currency seems less appealing in times of uncertainty.

As for today, traders are advised to follow the major publications from the U.S. and the Euro-Zone, as they tend to have a large impact on the Yen. Special attention should be given to the Euro-Zone's Bank Stress Test Results, which appears to be the news even which will have the largest affect ion the market today.

Crude Oil - Crude Oil Reached Above $79 a Barrel

Crude oil rose over $79 a barrel for the first time in nearly 11 weeks. Crude oil began yesterday's trading session around $76.40 a barrel, and gained about 300 pips in a single day, to peak at the $79.40 price.

Crude oil rallied yesterday following notifications that EBay Inc. and Caterpillar Inc. saw higher earnings than expected during the last quarter. In addition, several positive economic reports were published from the Euro-Zone yesterday, suggesting that energy demand in Europe will recover soon. Another support for crude oil prices was the Dollar's bearish trend against most of the major currencies. Crude oil is traded in Dollars, and thus when the greenback weakens, oil prices tend to rise as a result.

As for today, traders are advised to follow equity markets in the U.S. as they tend to be highly correlated with crude oil trading. In addition, traders should take notice of the Euro-Zone's Bank Stress Test Results. The results are expected to reveal the region's banks stability in light of the high debts of several European nations. This report might impact global trading, and traders should be prepared.

Technical News

EUR/USD

The pair has recorded much bullish behavior yesterday. However, the technical data indicates that this trend may reverse anytime soon. For example, the 4-hour chart's Stochastic Slow signals that a bearish reversal is imminent. . Going short with tight stops might be a wise choice.

GBP/USD

The daily chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, there is a bearish cross forming on the 4-hour chart's Slow Stochastic indicating a bearish correction might take place in the nearest future. When the downward breach occurs, going short with tight stops appears to be preferable strategy.

USD/JPY

The pair has been range-trading for a while now, with no specific direction. The Daily chart's Slow Stochastic 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/CHF

The cross has been dropping for the past several days now, as it now stands at the 1.0430 level. However, the 4-hour Chart's RSI is already floating in the oversold territory indicating that a bullish correction might take place in the nearest future. Going long with tight stops may turn out to be the right choice today.

The Wild Card

Crude Oil

Crude Oil prices rose significantly yesterday and peaked at $79.20 per barrel. However, there is a bearish cross on the 4-hour chart's Slow Stochastic suggesting that a recent upwards 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.

Read more forex analysis at our forex news center.
 
Re: Euro-Zone Bank Stress Test Results Expected Today

Xenophobia said:
:):):):D:D:D

Are you not supposed to post the copyright info and authors name also when stealing and posting material from another site. :p
Click to expand...

Xenophobia, which site other than the forexyar site does this appear? i quickly googled and found it all over the net, but was posted/blogged by forexyar. :confused: @ your opinion and curious.
 
Re: Euro-Zone Bank Stress Test Results Expected Today

Lightning McQueen said:
Xenophobia, which site other than the forexyar site does this appear? i quickly googled and found it all over the net, but was posted/blogged by forexyar. :confused: @ your opinion and curious.
Click to expand...


My mistake I read it somewhere and was linked to another blog but after visiting there I do see it is theirs indeed there info as it links to them.

Apologies :p

25 spanks!
 
Last edited by a moderator:
Bank Stress Tests Fail Support the Euro Due To Questionable Reliability

After a long time waiting, the Euro-Zone's famous Bank Stress Tests results were finally published on Friday evening. The results failed to reassure investors regarding the stability of the European banking system as analysts claimed that the test weren't strict enough. As this week begins, the reliability of the tests will remain the main topic. Will it eventually boost the Euro?

Economic News

USD - The Dollar Ends A Volatile Trading Week Following Mixed Data from the U.S.

The Dollar saw mixed results against the major currencies during last week's trading session. The Dollar had ups and downs vs. the Euro, and eventually the EUR/USD level closed at the 1.29 level. The Dollar also slightly strengthened against the Yen, while falling against the Pound.

The Dollar's volatile session came as a result of the mixed data from the U.S. economy. On one hand, the housing sector provided positive data last week. The U.S. Building Permits report showed that 0.59M new residential buildings permits were issued during June. The meaning of the data is that the quantity of future construction will rise; obtaining a permit is among the first steps in constructing a new building.

However on the other hand, the unemployment reports delivered negative signals. The weekly Unemployment Claims report showed that jobless claims in the U.S. increased more than forecasted to 464,000. The number of individuals who filed for unemployment insurance for the first time during the past week rose from 427,000, and failed to reach expectations for 449,000.

As for the week ahead, many interesting economic reports are expected from the U.S. The most significant publications look to be the New Home Sales, the Consumer Confidence, Durable Goods Orders indices, the Unemployment Claims, and the Gross Domestic Product (GDP). All these reports have potential to impact global trading and the Dollar in particular, and traders are suggested to follow the end results.

EUR - Stress Tests Fail to Ease Investors' Concerns from a Possible Debt Crisis

The Euro saw a volatile session during last week's trading. The Euro began last week's trading with a bullish trend vs. the Dollar and the Yen. However the Euro then saw sharp drops and by the end of the week, resumed to its previous levels.

The Euro had a rising trend with the beginning of the week as positive data from the Euro-Zone supported the 16-nations currency. The German Producer Price Index (PPI) rose by 0.6% in June, beating expectations for a 0.2% rise. The report suggested that inflation in Germany rose for the 4th consecutive time, reassuring investors that the German economy is recovering. The European Industrial New Orders report also provided an unexpected positive data. The report showed that industrial orders in the Euro-Zone rose by 2.8% in May, well above expectations for a 0.1% drop.

However, by the end of the trading week, the Euro erased its profits, as the European Bank Stress Tests failed to reassure investors concerns from a possible sovereign crisis. The tests showed that merely 7 banks have flunked the stress test, out of 91 major banks that were tested. The supposedly positive data failed to create an impact in the market as investors felt that the tests may not have been strict enough. However, traders should take under consideration that European governments are putting a lot of efforts in the attempt to convince investors regarding the reliability of the tests results.

As for the week ahead, a batch of data is expected from the Euro-Zone. Traders are advised to focus on the German Preliminary Consumer Price Index (CPI), which will prove if the German inflation is indeed rising as last week's PPI data showed. Traders should also keep in mind the affects of the bank stress tests, as these results will continue to impact the market this week.

JPY - Yen Weakens Against the Majors

The Yen fell against most of the major currencies during last week's trading session. The Yen dropped about 100 pips vs. the Dollar and about 300 pips against the Pound, and the GBP/JPY pair is now trading near the 135.50 level.

The Yen dropped last week due to speculations that Asia's economic recovery is advancing. These speculations have increased risk-appetite in the market, and have turned investors to look for riskier assets. The Yen is considered to be a safe-haven currency, and tends to fall as risk aversion weakens. The speculations came following several reports which showed that South Korea's economy grew faster than analysts forecasted, and Japanese exports rose more than expected.

As for this week, many interesting publications are expected from the Japanese economy. The main news events that traders are advised to follow are the Retail Sales on Monday and the Tokyo Core Consumer Price Index (CPI) on Thursday. If the reports will continue to provide positive signals, the Yen might weaken further as investors will continue to look for higher-yielding assets.

OIL - Crude Oil Prices Consolidates Around $79 a Barrel

Crude oil prices continued to climb during last week's trading session. A barrel of crude oil was traded around $76 a barrel at the beginning of last week and as the week progressed, crude oil prices soared, and a barrel of crude oil is now trading around $79 a barrel.

Crude oil strengthened last week due to several positive economic reports from the U.S. and the Euro-Zone. The positive reports have created speculations that global energy demand will increase, and as a result, crude oil prices consistently rose. The bullish trend halted close to the weekend as concerns regarding tropical storm Bonnie have eased due to reports claiming that the storm has weakened.

As for this week, traders are advised to follow the main publications from the U.S. and the Euro-Zone, as they have significant affect on oil prices. Trades should also follow the U.S. Crude Oil Inventories report on Wednesday as this tends to have an instant impact on spot crude oil prices.

Technical News

EUR/USD

Last week's trading has led to a doji candlestick formation on the weekly chart indicating a potential reversal lower for the pair. Traders will want to combine this signal with other technical indicators for confirmation before entering short. The next significant resistance level rests at the 38.2% Fibonacci retracement level at 1.3110. The next support level is found at last Wednesday's low of 1.2730.

GBP/USD

The 2-month bullish correction has pushed the price above significant technical resistance levels, signaling a shift in the long term trend of the pair. The weekly chart shows the price broke the long term downward sloping trend line that began in July of 2008. The price has also moved above the 200-day simple moving average line. Traders will want to be long on the pair with the next resistance level coming in at 1.5520, April's high.

USD/JPY

Last week the pair failed to break below the support level of 86.25. Momentum for the pair has reversed as the Momentum (10) is trending higher. The price is looking to break above the resistance at the 20-day simple moving average line. A breach above this line could take the pair to the resistance level at 89.15, close to the long term downward sloping trend line. The potential correction could lead to a good setup to enter short in the direction of the trend.

USD/CHF

The Relative Strength Index on the 4-hour chart shows the pair in overbought territory, indicating a downward correction could take place. That being said, according to most other technical indicators, the pair is trading in neutral territory with no clear direction. Traders may want to take a take a wait and see approach today, as a clearer picture may present itself later.

The Wild Card

AUD/USD

The Stochastic Slow on the 8-hour chart indicates that a bullish cross has formed, meaning a downward correction may occur today. This theory is supported by the Relative Strength Index on the 4-hour chart. Forex traders may want to go short in their positions for this pair today, as bearish movement will likely occur.

Read more forex analysis at our forex news center.
 
Risk Appetite Rises Boosting Riskier Currencies

The EUR once again reached above $1.30 on Monday after better than expected economic data from the US, and an advance in global equities, boosted demand for riskier assets. Gold continues to decline as market concerns ease and people turn away from safe-haven assets.

Economic News

USD - Dollar Declines on Renewed Risk Appetite

The US dollar declined against all of its major counterparts Monday following the release of better than expected US New Home Sales data. Combined with a boost in FedEx Corp.'s earnings, these two reports together have helped to raise demand for riskier assets. New US home purchases increased 24% from May to an annual pace of 330,000.

The Dollar depreciated 0.7% to $1.008 per EUR during today's early Asian trading, from $1.2909 at the end of last week. The dollar fell to 86.86 Yen, from 87.46.

Looking ahead to today, traders are advised to follow the release of the CB Consumer Confidence at 14:00 GMT. Better than expected results on this report may intensify the greenback's recent downtrend, especially since risk appetite will rise with a positive reading.

EUR - EUR and GBP Advance after Banks Pass Stress Tests

The EUR remained within its trading range as results from the stress tests continued to reassure investors. The common currency traded within a cent of the 10-week high of $1.3029 reached July 20; however, it has since returned to trade around $1.3015.

The EUR rose to ¥112.97, up from ¥112.11, after reaching ¥113.48, the highest level since June 3rd. The British pound also rose to $1.5490 from $1.5425 after briefly reaching above $1.55, the highest levels since late April.

The Pound advanced after a July 23rd announcement that HSBC Holdings Plc, Barclays Plc, Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc passed the European bank stress tests.

JPY - Yen Drops as Demand for Safe-Haven Currencies Diminishes

The Japanese yen fell versus all 16 major counterparts after the release of better than expected US New Home Sales data. The yen's safe-haven appeal also diminished as global equities gained and boosted demand for riskier currencies.

The JPY is currently trading at 113.07 per EUR as of today's early Asian trading, from 112.89 in New York yesterday, when it touched 113.48, the lowest since June 3. The yen is at 86.95 per USD, up slightly from 86.88.

Traders should follow the release of today's economic data from the US and Europe as positive news will likely dampen demand for the yen further.

Crude Oil - Crude Remains around $79 a Barrel

Better than expected economic data from the US and advancing global equities helped support oil prices around $79 a barrel. Crude oil for September delivery traded at $78.85 a barrel, down 13 cents in electronic trading on the New York Mercantile Exchange

Oil seems to remain between $70 and $80 as future demand remains unknown and above average stockpiles are keeping Crude from breaching higher. For the time being, oil futures continue to trade on economic data as well as movements in equities.
Traders should follow the release of today's US CB Consumer Confidence report at 14:00 GMT as better than expected results might help push oil prices closer to the $80 resistance level.

Technical News

EUR/USD

The price has broken out from the rising channel pattern on the daily chart for the second time; making a solid close above the upper line of the channel. A pullback into the channel pattern would signal a false breakout, as was the case last in last week's trading. A rise to the 38.2% Fibonacci retracement level at 1.3110 would signal a confirmation of the breakout pattern.

GBP/USD

The pair rose as high as the resistance line of 1.5520, found the May high before falling back to close up at 1.5494. Momentum appears to be behind the price move as the 14-day Momentum indicator is sloping higher at 103, indicating further appreciation may be in store for the pair. The next significant resistance level comes in at 1.5820.

USD/JPY

The bullish correction the pair experienced in the later half of last week came to an end yesterday. The price rose as high as the 20-day simple moving average before heading sharply lower. The inability for the pair to breach this resistance level indicates a sharp downtrend in the pair. Traders should be short with a first target at the support level of 86.25.

USD/CHF

Shorter-time frame charts on this pair don't seem to be hinting too strongly at an impending direction. The hourly and 4-hour Stochastic (slow) and RSIs show upward mobility, but have not yet entered signal territory. We can see, however, that the weekly chart's Stochastic (slow) is giving off what appears to be a recent bullish cross. It seems upward pressure is mounting on this pair and we may see traders taking long positions as a result.

The Wild Card

USD/SEK

After a few days of trading sideways, this pair now seems to be giving off some clear buy signals. The 4-hour Stochastic (slow) appears to be approaching the beginning of a bullish cross, indicating future upward movement. The daily and weekly Stochastic (slow) also seem to indicate an impending bullish cross. The daily RSI also appears to be floating in the over-sold territory, indicating further upward pressure. Forex traders may want to take advantage of this information and enter a short-term long position on this pair for quick daily profits.
Read more forex analysis at our forex news center.
 
Dollar Recovers after Consumer Confidence Report

The U.S. Dollar advanced on Wednesday, gaining 1% against the Japanese Yen and pushing the EUR back under $1.30, after a report showed U.S. consumer confidence fell more than expected, pressuring equities lower and reducing investors' appetite for risky assets.

Economic News

USD - Dollar Rises on Demand for Greenback's Safety

The U.S Dollar advanced against most of its major counterparts as a decline in U.S. consumer sentiment to a 5 month low revived demand for the relative safety of the world's main reserve currency.
The U.S. consumer confidence for July fell to its lowest level since February with all eyes on consumer durable goods numbers for June later in the session for more evidence about the world's largest economy.
The greenback advanced as much as 1.3% to 87.97 Yen in the biggest intraday gain since June 2. Treasury two-year note yields increased as much as 0.06 percentage point to 0.64% in the biggest intraday climb since June 10. The USD/JPY recent weakness has been related to the very low level of U.S. yields, analysts said. And the fact that the yields are rebounding at this stage is likely to lend some support to the pair.

EUR - EUR Erases Gains; Slips Below $1.30 level

The European currency hovered below a key level on Wednesday, running into profit taking after it hit a 11-week high against the U.S. Dollar, with attention turning toward the Australian Dollar ahead of crucial inflation data. The EUR slipped below the psychological, and technically crucial, level of $1.30, having hit a high of $1.3045 on Tuesday.

The 16-nation currency held some impressive gains against the Japanese yen, trading above 114 yen after having jumped over 1% on Tuesday to a 2-month high.
Traders said the EUR/JPY looked increasingly bullish on charts, especially after it rose above 113.50 yen where it had met lots of offers from Japanese exporters.

Moreover, despite the EUR/USD easing from highs, sentiment toward the single currency remains bullish in the short term with a number of commentators surprised by the resilience of the Euro-Zone economy. On the other hand, doubts remain over the ability of the U.S. economy to avoid a slowdown. Market players say that a sustained break above the $1.30 level could place the single currency against the greenback in a new $1.30-$1.35 trading range in the coming weeks.

JPY - Yen Rises on Safety Demand

Japan's currency gained versus all 16 major counterparts ahead of U.S. reports in two days which are forecasted to show economic and business activity grew at a slower pace. The Yen rose from near a two-month low against the EUR on speculation signs of a slowing U.S. recovery will spur demand for safer assets.

The Yen typically strengthens in times of financial turmoil as Japan's trade surplus makes the currency attractive as it means the nation does not have to rely on overseas lenders. The Yen traded at 87.77 per Dollar from 87.90. The currency gained to 113.95 per EUR from 114.24 yesterday, when it reached 114.42, the weakest level since May 18.

Crude Oil - Oil Falls a 2nd Day after Consumer Confidence Drops

Crude Oil declined for another day after an industry report showed U.S. crude inventories rose and the Conference Board said confidence among the nation's consumers fell, signaling growth and energy demand may falter. Rising oil production capacity in the Gulf of Mexico after Tropical Storm Bonnie fizzled over the weekend without damaging infrastructure also weighed on Oil prices, analysts said.
Oil prices dropped the most in more than 3 weeks Tuesday as the U.S confidence index declined to the lowest level in 5 months. Traders mentioned that there was a sell-off in the crude market because of a fall in U.S. consumer confidence and the sentiment is still weak.

Technical News

EUR/USD

Yesterday the pair pushed to its highest level in the past 3 months before falling backwards to finish almost unchanged, forming a spinning top candlestick formation. This may signal indecision on the part of traders and a lack of buyers in the current uptrend.

GBP/USD

The pound was a big gainer in yesterday's trading as the cable breached and closed above the resistance level of 1.5520. The pair has been a strong performer as of recent, recording gains over the past 5 trading sessions. However, technical resistance is forming on the daily chart. The RSI (14) is dropping below the overbought zone while the Slow Stochastic oscillator is forming a bearish cross, indicating the next move may be to the downside. Traders may want to tighten their stops on any long positions.

USD/JPY

The yen suffered during yesterday's trading, rising as high as 87.96 while closing above the 20-day simple moving average and the downward sloping trend line that began on June 14th. However, traders may be able to fade the trend as a bearish cross has formed on the 4-hour Slow Stochastic oscillator, indicating that the pair's next move may be lower. Traders can target the resistance level of 87.40 with an extended target at the year to date low of 86.25.

USD/CHF

The pair may see a continuation of its recent downtrend in today's trading as the RSI for the pair floats in the overbought territory on the 2 hour and 8 hour charts with most other indicators floating in neutral territory. Traders may be advised to go short for the day.

The Wild Card

GBP/NZD

The pair may see some downward correction today as the RSI for the pair is floating in the overbought territory on the hourly and 2 hour charts while a bearish cross is evident on the 2 hour and 4 hour charts Slow Stochastic, indicating an imminent downward movement. Furthermore, a breach of the upper Bollinger Band is evident on the 2 hour chart. Forex traders may be advised to go short for the day.

Read more forex analysis at our forex news center.
 
Disappointing U.S. Macro Data Hit Markets Yesterday

Plenty of important macro data from the U.S. was published yesterday. Investors were disappointed by the figures and responded mainly by moving away from riskier assets. At first U.S. Durable Goods came negative at -1%, at 12:30GMT later at 18:00GMT Beige book revealed a gloomy outlook for U.S. economy. Although company earnings are still high, yesterday fears about recovery came back to dominate the markets.

Economic News

USD - Traders Shift from EU Debts Concern to U.S. Economic Outlook

U.S. macro data came far less than expected. Investors responded by moving away from riskier assets back to buying the Yen and U.S. Dollar. The EUR/USD was slightly down after U.S Durable Goods was published, The USD/JPY traded lower, currently trading at $87.22 as investors feel safer holding the Yen over the USD. The British Pound continued to rally against the U.S. Dollar, despite the move to safer assets.

U.S. demand for Durable Goods, which is usually a sign for economic strength, came negative at -1.0%. Forecasts which already expected a form of decline from last month were more moderate than the actual figure. Traders were surprised by the final figure and reacted by sending markets lower. Later the Beige Book was released by the Fed during mid U.S. day trading. It provided a mixed economic picture but eventually supported the markets from declining further. The report said that the U.S. economy was growing but there were also signs of a slowdown in some regions over the past two months.

Looking ahead to today, traders should follow the release of the Unemployment Claims at 12:30 GMT. A worse than expected result might intensify the current trend and strengthen the greenback further.

EUR - EUR's Recent Rally Losing Steam

EUR's rally against its major counterparts stumbled yesterday as new economic data raised fears about the strength of global economic recovery, with the common currency ending lower against its major counterparts.

EUR/USD ended slightly lower yesterday, reaching a low of 1.2968; however, it managed to recover some of its loses to currently trade at 1.3010. The pair seemed to trade without a clear trend and moved mostly sideways. The EUR/JPY, however sent more clear signs of a correction building up. The pair's five days rally ended yesterday after it breached an 11 week high. Signals show that pair should further decline in coming days.

Looking ahead to today, traders are advised to follow the British HPI data at 6:00 GMT as well as the German Employment change at 7:55 GMT. Positive data might bring back some market optimism, pushing the Pound and EUR higher against their counterparts.

JPY - Strengthens on Safe Heaven appeal

The JPY strengthened against the U.S. Dollar yesterday as investors expressed their concerns about the U.S. economy by selling the U.S. Dollar and buying the Japanese Yen. The Yen traded higher against most of its major counterparts; however, a strong currency may ultimately weigh on the Japanese economy as it is heavily dependent on exports.

A strong Yen would have bad influence on profits of Japanese companies. Consequently the Japanese government might be forced to weaken their local currency. So far no comments were published regarding Government intervention. As long as the Japanese Bank avoids market intervention the Yen is expected to keep its strengthening momentum.

Looking ahead to today traders should pay attention to the $86.88 support line, crossing down might take the USD/JPY pair even lower. Some analysts estimate that that the Yen could even reach as high as $85 in the coming months.

Crude Oil - High U.S. Inventories Send Crude Oil Price Lower

Crude Oil prices ended lower yesterday after U.S Oil Inventories rose by 7.3M barrels. Lately this figure made little impact over Crude Oil prices but yesterday it came quite high compared with expectations of a 1.4M drop.

Demand for durables goods which also came surprisingly lower added to worries that demand for Oil would decrease in the near future as manufacturing declines. Crude Oil price might decline further in the short term if economic figures continue to deteriorate. Investors are worried about a possible double dip, meaning a renewed recession.

Gold price rebounded slightly during yesterday trading session. During the day it reached as low as $1156.25, but thereafter recovered and is currently trading at $1165 Gold price dropped after inflation worries began to fade and analysts begin to worry about another recession or economic slow down.

Technical News

EUR/USD

The pair was relatively unchanged yesterday and as such has formed a 2nd consecutive doji candlestick which reflects the bulls and bears inability to move the price significantly. The RSI (14) has crossed below the overbought line, triggering a sell signal. But traders may want to be patient and wait for the RSI line to break its trend line before going short. A rising trend line can be drawn from the low of the RSI line that begins on June 4th.

GBP/USD

The pound was stronger yesterday and has risen versus the dollar for the past 6 consecutive bars. This has pushed most oscillators into oversold territory as the Slow Stochastic is showing a bearish cross and the RSI (14) is floating in the oversold territory. However, before going short, traders may want to wait for a breach of a short term trend line that can begins at the bar on June 22nd.

USD/JPY

A bearish flag pattern has formed on the 4-hour chart. The base of the flag pole begins at the high on June 14th and runs to the low for the pair at 86.25. The flag pattern is sloping upward with a previous downward trend. Therefore, a breakout may be expected to the downside in the direction of the long term trend. Traders may want to wait for a confirmation of the breakout at a price of 86.80 and enter short.

USD/CHF

For the past 15 days the pair has traded in a defined range between the prices of 1.0650 and 1.0400. In this trading range a double bottom reversal pattern may be forming. A confirmation of the reversal pattern will be a close above the 1.0650 resistance line.

The Wild Card

Gold

The drop in the price of gold shows a potential reversal in the trend. The price has closed below the long term upward sloping trend line for the past two days, confirming a significant breach of the trend line and a breach below the support level of $1169. However, yesterday's trading closed and formed a hanging man candlestick. This may signal an upturn in the price. CFD traders may find a good opportunity to go long on a breach above the $1169 resistance level.

Read more forex analysis at our forex news center.
 
Riskier Currencies on Top Following Market Opening

Riskier currencies like the EUR and U.K. pound made significant gains against both the Yen and U.S. Dollar in overnight trading, as the markets prepare for a heavy trading week. Traders will want to pay attention to a number of news events today, and should keep in mind that the all-important U.S. Non-Farm Employment Change is set to be released on Friday.

Economic News

USD - Dollar Remains Low vs. European Currencies

While the USD has halted its most recent slide against the Yen, it is still tumbling against both the British Pound and EUR. Since the market opened for the week, EUR/USD has gone up some 30 pips, and is currently trading around the 1.3080 level. Analysts attribute the Dollar's losses to a continuous stream of negative U.S. news events. That trend seems likely to persist, as we take a look at some of the economic indicators likely to impact Dollar pairs today.

The U.S. ISM Manufacturing PMI, set to be released at 14:00 GMT today, is forecasted to show a drop in the expansion of the manufacturing industry from last month. While the PMI is still expected to show industry growth, a drop from last month will likely negatively impact investor confidence in the U.S. economic recovery. Should the report come in at its predicted figure of 54.2, the Dollar may see further losses.

Shortly after the PMI figure is set to be released, Fed Chairman Bernanke is scheduled to give a speech regarding the challenges facing the U.S. economy. While no major announcements are forecasted, even the slightest indication about where the economy is heading could create heavy volatility for Dollar pairs. Traders will want to pay close attention to the speech. Should the Fed Chairman give a positive economic assessment, the Dollar may be able to recoup some its most recent losses.

EUR - Euro Looks to Prolong Gains against the Dollar

As markets opened for the week, the EUR shot up against the safe haven Dollar and Yen, while taking steep losses against the Aussie. EUR/USD and EUR/JPY are up 30 and 40 pips respectively since markets opened. EUR/AUD on the other hand, is down about 50 pips in the same amount of time.

Analysts are quick to point out that the EUR gains have more to do with the troubles in the U.S. economy, and less to do with any positive European economic indicators. What this means for traders, is that any gains the EUR has made on the Dollar or Yen are tentative at best. With a busy trading week just getting started, any economic indicator that could come in above or below expectations could cause volatility for the EUR.

Today, EUR traders will want to pay attention to the manufacturing PMI's from both the U.K. and U.S. Both PMI's are forecasted to show expansion in their respective manufacturing industries. If the reports come in as predicted, the EUR may be able to extend its recent gains as investor confidence is likely to be boosted. At the same time, an unexpected drop in either PMI figure could lead to a wave of risk aversion, and may boost the Dollar.

JPY - Yen Erases Most of Last Week's Gains

Starting off the week, the Yen gave up most of its recent gains as riskier currencies have begun to assert themselves in the marketplace. The U.K. Pound has moved up close to 50 pips against the Yen since markets opened, while AUD/JPY had gone up over 60 pips before staging a slight correction. USD/JPY has been trading at a relatively steady rate since late last week, and will likely continue to do so as long as risk taking dominates the market place.

Today, Yen traders will want to pay attention to both the U.S. ISM Manufacturing PMI, as well as Fed Chairman Bernanke's speech. While neither of these indicators directly affects the Japanese economy, their results will heavily influence the status of safe haven currencies like the Yen.

Crude Oil - Oil Prices Continue to Move Up

The weak Dollar has prompted more investment in Crude Oil, leading to steadily increasing prices for the commodity over the last few days. Currently, crude is trading around the 79.20 level, up from around 77.10 on Friday. As the Dollar continues to fall against many of its main currency rivals, traders can expect oil prices to rise.

Today, Crude prices will largely be determined by the Fed Chairman's speech, scheduled to be given at 14:15 GMT. Should the speech paint an optimistic picture of the U.S. economy, oil prices may drop if investors decide turn back towards the Dollar. On the other hand, if the Fed chairman decides to highlight the continued challenges facing the U.S. economic recovery, oil will likely increase its gains in the marketplace.

Technical News

EUR/USD

Friday's trading left the pair in a doji candlestick pattern highlighting traders' inability to push the pair higher. However, the bears were also contained by a short term trend line that began on July 1st. A rising wedge pattern has formed on the hourly chart. Traders may want to target the upper line of the wedge near the price of 1.3120.

GBP/USD

The currency continues to move higher and is showing signs of a pair that is trending higher. The ADX (14) reads 45, indicating a pair that is in a trending phase. Also the 20-day moving average line is sloping up, indicating that the trend is higher. Traders should be long on the pair with a first target the 1.5820 resistance level on the daily chart.

USD/JPY

The pair is also trading in a strong trending environment, supported by a perfect order. The currency is trading below the 200-day simple moving average (SMA), followed by the 100 SMA, 50 SMA, 20 SMA, and 10 SMA in that order. As such, traders should be shorting the pair. Since a breakout of the bearish flag pattern, the pair breached below the support level of 86.25 and fell to a low of 85.93, but traders were unable to make a close below the support level. The next support for the pair comes in at the November 2009 low at 84.90. This should serve as the next target for traders

USD/CHF

While the pair has been range trading for quite some time now, some upward movement may be expected today. A bullish cross is evident on the hourly chart's Slow Stochastic while the RSI for the pair is floating in the oversold territory on the 4 hour and 8 hour charts. Furthermore the MACD for the pair is the lower range on the 2 and 4 hour charts. Going long with tight stops may be advised for the day.

The Wild Card

AUD/NZD

After a steep rise over the past few days, the pair may be seeing some downward correction during today's trading. The RSI for the pair is floating in the overbought territory on the 4 hour, 8 hour and daily charts while a bearish cross is evident on the daily chart's Slow Stochastic. Furthermore, a breach of the upper Bollinger Band is evident on the daily chart, indicating an imminent downward movement. Forex traders may be advised to go short for the day.

Read more forex analysis at our forex news center.
 
Will the US Dollar Continue its Decline?

Yesterday's trading was characterized with high optimism regarding global recovery. This optimism has boosted the European currencies, such as the euro and the pound, and weakened the relatively safer currencies - the US dollar and Japanese yen. As long as the leading economies continue to provide positive data, this trend has potential to remain. Today's publications, especially from the US, are likely to determine whether the trend can continue today as well.

Economic News

USD - US Dollar Tumbles as Risk Appetite Rises

The US dollar fell against most of the major currencies during yesterday's trading session. The greenback dropped about 120 pips against the euro and about 150 pips vs. the British pound. The EUR/USD pair is now trading near the 1.3180 level.

The dollar fell yesterday after a better-than-expected result was published about the US Manufacturing Purchasing Managers' Index (PMI) report. The survey showed that manufacturing in the US expended to 55.5 in July, beating expectations for a reading of 54.2 points.

This has provided another signal that the US economy continues to recover and that global recovery may follow. As a result, investors turned to riskier assets such as the euro and the pound. For now it seems that positive data from the US is likely to depreciate the dollar, as it is interpreted as an indication for global recovery, and thus boosts risk appetite in the market.

As for today, a batch of data is expected from the US economy. The publication that looks to have the largest impact on the market is the Pending Home Sales figure. This report measures the change in the number of homes under contract to be sold that are awaiting the closing transaction. Analysts have forecast a 0.5% rise in July. If the end result will provide a positive figure, the greenback may weaken further. Traders are also advised to follow the Personal Spending and the Factory Orders publications.

EUR - Euro Traded Near 3-Month High against Dollar

The euro soared against most of the major currencies on Monday, gaining about 120 pips vs. the US dollar. The EUR/USD pair is trading near a 3-month high as a result. The euro gained about 100 pips against the Japanese yen as well.

The euro strengthened yesterday as positive signs regarding global recovery has boosted demand for riskier assets. The euro rose as global equity markets continued to advance.

In general, the recent positive data from the major economies such as the US, Japan and the European nations, is boosting optimism for global recovery. As a result, investors are looking for relatively riskier assets, such as the euro and the British pound. Both of these currencies rose significantly yesterday, and are likely to rise further as long as risk appetite remains strong in the market.

Looking ahead to today, many interesting economic publications are expected from the euro zone. Traders are advised to follow the European Producer Price Index (PPI) report. This PPI figure measures the change in the price of finished goods and services sold by producers. Analysts have forecasted that the indicator has risen by 0.4% in July. Such a result is likely to have a positive impact on the euro by further boosting risk appetite.

JPY - Yen Drops against Majors as Risk Aversion Decreases

The Japanese yen fell against most of the major currencies during yesterday's trading session. The JPY fell to nearly an 11-month low vs. the euro and also dropped about 150 pips against the British pound.

The yen dropped against most of the major currencies following a report that measures the cost of insuring against losses in the Standard & Poor's 500 Index fell to its lowest level since May. In addition, the recent positive data from the US and euro zone have boosted risk appetite in the market, and turned investors to look for riskier assets, such as the euro and the pound.

While the Yen is considered to be a relatively safe investment, in times of market optimism, the Japanese currency tends to weaken against the major currencies.

As for today, traders are advised to follow the Japanese equity markets. Traders should notice that the yen tends to drop while Japanese equities rises, as such rises usually indicate that the economy is recovering, and boosts demand for riskier assets as a result.

Crude Oil - Crude Oil Reaches $81.70 a Barrel

A barrel of crude oil was traded at $81.70 during yesterday's trading. Crude oil breached the $80.00 level for the first time in 3 months, following a 300 pips gain on Monday.

Crude oil soared yesterday as expectations for an economic recovery have boosted global equities. Oil rose for the third day following a better-than-expected release of the US Manufacturing Purchasing Managers' Index (PMI) survey. The survey reached 55.5 points, beating expectations for a reading of 54.2. In addition, companies such as HSBC Holdings Plc have reported higher than expected earnings.

The world-wide positive data creates speculations that global demand for energy will increase, and as a result boosts crude oil prices. It seems that for as long that the US and euro zone will continue to deliver positive data, crude oil might rise further as the dollar weakens.

Looking ahead to today, traders are advised to follow the leading publications from the US and the euro zone as these tend to have the largest impact on crude oil prices. Special attention should be given to the US Pending Home Sales report, which seems to be today's leading publication. A positive figure is likely to support crude oil prices further.

Technical News

EUR/USD

The pair has recorded much bullish behavior in the past several days. However, the technical data indicates that this trend may reverse anytime soon. For example, the daily chart's Stochastic (slow) signals that a bearish reversal is imminent. A downward trend today is also supported by the 4-hour chart's Stochastic (slow) indicator. Going short with tight stops may pay off today.

GBP/USD

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 Momentum oscillator also supports this notion. When the downward breach occurs, going short with tight stops appears to be the preferable strategy.

USD/JPY

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

USD/CHF

The 4-hour chart is showing mixed signals with its RSI fluctuating in neutral territory. However, there is a fresh bullish cross forming on the daily chart's Stochastic (slow) indicating a bullish correction might take place in the nearest future. Going long might be a wise choice today.

The Wild Card

Crude Oil

Crude Oil prices rose significantly yesterday and peaked at $81.70 a barrel. However, the 8-hour chart's RSI is floating in the over-bought territory suggesting that the recent upward trend is losing steam and a bearish correction may be impending. This might be a good opportunity for forex traders to enter the correction at a very early stage.

Read more forex analysis at our forex news center.
 
Dollar Falls on Federal Reserve Speculations

Negative economic data, as well as speculation regarding further monetary easing by the Federal Reserve, pushed the USD to its lowest level since April. Markets await the release of the Non-Farm Payrolls (NFP) data due Friday for signs of the economic conditions in the US.

Economic News

USD - USD Falls on Negative Economic Data

The US dollar fell against its major counterparts after disappointing US economic data prompted speculation that the Federal Reserve could take additional monetary measures to boost the sluggish economy. The USD dropped to an 8-month low versus the Japanese yen over concerns about the economic recovery in the US, as well as to a 3-month low versus the euro.

US factory orders fell by more than expected in June from May, while pending home sales dropped an unexpected 2.6% in June, after declining 30% in May. Furthermore, a report was published by the Wall Street Journal suggesting that the Federal Reserve may prevent monetary tightening and start a bond purchasing program once again. The continuous flow of negative US economic data exacerbates concerns that the Fed will have to take monetary action soon.

Investors are keenly awaiting the Non-Farm Payrolls (NFP) data due this Friday to better gauge the pace of US economic recovery. Today traders should follow the release of the ADP Non-Farm Employment Change Estimate due at 12:15 GMT as a prelude to Friday's release, as well as the ISM Non-Manufacturing PMI at 14:00 GMT. Better than expected results may provide the greenback with a much needed boost.

EUR - British Pound Rises on Bank of England Comments

The euro rose to a 3-month high against the USD Tuesday after a slew of negative economic data dampened demand for the greenback. The EUR rose to $1.3234, up from $1.3183 late Monday; rising as far as $1.3261, the highest level since May.

The euro has been gaining strength as signs continue to mount that the economic recovery in the US is stagnating. Also, speculation has arisen that the Fed might announce further bond purchases in order to stimulate the US economy, a monetary measure which would pump more greenbacks into the market, intentionally reducing its value.

The British pound rose to $1.5946 Tuesday after former Bank of England (BOE) Deputy Governor John Gieve reassured investors about the of British economic recovery, stating that further monetary loosening may not be required.

Today, investors are advised to follow the release of the Helifax HPI at 6:00 GMT as well as any data coming from the US.

JPY - Yen at 8-Month High vs. USD

The Japanese yen rose to an 8-month high against the greenback as concern the Federal Reserve may take up additional stimulus measures to boost the sluggish US economy.

Japan's currency rose against all of its 16 major counterparts after the release of disappointing US economic figures. Data has shown US factory orders and existing-home sales fell in June while consumer spending stagnated. Japan's currency gained 0.8% to 85.50 per USD. The yen also rose 0.5% to 113.12 per EUR.

Crude Oil - Spot Crude Oil Breaks above $82 a Barrel

Crude Oil futures rose above $82 a barrel for the first time since May despite disappointing US economic data. Crude's rally was boosted by a weak US dollar, as oil is denominated in dollars and is therefore cheaper for investors. An expectation of a decrease in oil supply further boosted Crude Oil prices.

Light Sweet Crude for September delivery settled up 1.5%, or $1.21, at $82.55 a barrel on the New York Mercantile Exchange yesterday, the highest settlement since May 4. Today investors should follow any news release from the US as well as the Crude Oil Inventories report to be released at 14:30 GMT.

Technical News

EUR/USD

The pair has been experiencing some very bullish behavior in the past week, as it currently stands around the $1.32 level. The main oscillators of the daily chart indicate this trend may continue into the near future. However, the hourly Slow Stochastic reveals that a bearish cross is about to occur, indicating that a bearish correction may be imminent. Now may be a ripe time to take advantage of the situation at an early stage.

GBP/USD

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

USD/JPY

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

USD/CHF

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

The Wild Card

Gold

Gold prices have been increasing rapidly lately, as they stand at over $1,191 per ounce. The 1-day and 1-week chart shows that this bullish trend is set to continue. This is also supported by the 1-hour and 4-hour MACD oscillator. It may be a wise move for forex traders to enter this very popular trend as it shows no sign of stopping anytime soon.
 
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Market Volatility Expected to Continue Today before Unemployment Claims

The US Weekly Unemployment Claims is the primary publication today and will likely determine the level of the USD when it is released at 12:30 GMT. The other main releases that are set to dominate forex trading, especially for currencies such as the dollar and EUR, is the publication of the European Minimum Bid Rate at 11:45 GMT. Traders may find good opportunities to enter the market following these significant announcements.

Economic News

USD - Dollar Rises on Positive Economic Data

The US dollar rebounded from an eight-month low against the yen on Wednesday and rose against the EUR as encouraging US employment and service sector data prompted traders to unwind bets against the US currency. As a result, the dollar rose 0.6% to 86.25 after falling to around 85.30, it's lowest since November. The dollar experience similar behavior against the EUR and closed at 1.3150.

A report showing the economy added 42,000 jobs was welcome, but traders said it would take far more good news to reverse the prevailing bias against the greenback, which has shed some 6% against major currencies since July. Job and income growth are needed to encourage Americans to spend and help revive an economy that's shown signs of slowing. While planned job-cut announcements have posted their third straight month-to-month gain, they're hovering close to the seven-year low reached in April.

Looking ahead to today, the most important economic indicator scheduled to be released from the US is the Unemployment Claims at 12:30 GMT. Traders will be paying close attention to today's announcement as a stronger than expected result may continue to boost the USD in the short-term. Traders are also advised to follow Treasury Sec. Geithner's speech at around 16:00 GMT. This speech is likely to impact the dollar volatility. Traders are advised to watch closely, as this is likely to set the pace of the dollar going into the rest of the week's trading.

EUR - EUR Drops against the USD and GBP

The EUR fell back against the dollar Wednesday as the latest euro-zone data disappointed growth prospects and lowered inflation expectations for the region. By yesterday's close, the EUR fell against the USD, pushing the oft-traded currency pair to 1.3150. The 16 nation currency also saw bearishness against the AUD and closed at 1.4352

The pound also fell against the dollar as a report showed the UK Services Purchasing Managers Index fell to a 13-month low and came in well below analyst expectations, with the set of July PMIs suggesting the rate of growth in the UK economy slowed at the start of the third quarter. The services PMI index came in at 53.1, down from June's 54.4, with new business growth slowing. The July services PMI was the third PMI survey released this week, all of them showing a distinct weakening trend.

Investors may want to look out for unusual price volatility to continue in the EUR/USD as the pair attempts to stabilize and find new support and resistance lines. Large price jumps such as these are not common place and present terrific opportunities to take advantage of the price swings for large profitable gains.

JPY - Yen Weakens vs. Majors

The Japanese yen saw a bearish trading session yesterday, losing ground against most of its currency crosses. The JPY fell against the USD after several days of recovery, while the GBP/JPY cross also rose to around 137.20.
Some of the respite came against the yen, as talk intensified that the Japanese government might put pressure on the Bank of Japan to loosen monetary stance even further in an effort to stop the yen from rising any more. Japanese Finance Minister Yoshihiko Noda has encouraged such talk by his repeated warnings about the damage that a strong yen can inflict on the Japanese economy while failing to suggest that the authorities will intervene.

As for today, Japan will be absent from the economic calendar. The JPY's trends will be affected by the rallies of its primary currency pairs. It seems the USD and EUR are expected to continue a volatile trading session today and their crosses with the JPY will likely be as well. Traders should keep a close look on the news coming from the U.S. and Europe as these economies will be the deciding factors in the JPY's movement today, especially the US Unemployment Claims and Europe's Minimum Bid Rate.

Crude Oil - Oil Prices Stable Above $82 a Barrel

Crude Oil prices were little changed on Wednesday, near its highest level in three months, at more than $82 per barrel after a US oil inventories unexpectedly declined and economic reports showed service industries and payrolls rose more than forecast in July.

Inventories of crude oil fell 2.78 million barrels to 358 million, the department said. Supplies were forecast to drop by 1.65 million barrels.

As for today, the US Weekly Unemployment Claims report will likely determine crude's next move, with any mildly positive elements within them likely to keep the price on its upwards direction.

Technical News

EUR/USD

The pair has been range-trading for a while now, with no specific direction. The Daily chart's Slow Stochastic 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.

GBP/USD

For the last two days the Cable has consolidated around the 1.5880 level without making any significant movements. However, a flag formation on the daily chart implies that an uptrend is about to be initiated. Going long with tight stops might be a good strategy today

USD/JPY

The recent volatility in the pair sees the USD/JPY trading between the 85.00-86.00 levels. The 4-hour and weekly chart's oscillators indicate that this volatility is likely to continue. Additionally, the daily chart signals that yesterday's bullish trend may continue. Going long with tight stops may be a preferable strategy today.

USD/CHF

This pair is still in the midst of a steady uptrend which is not yet showing any sign of leveling out. The RSI and Momentum on the daily chart are still positively sloped indicating that there is still plenty of steam left in this bullish move. Once this pair breaches the 1.0595 level it's likely to make another sharp break upwards.

The Wild Card

AUD/USD

On the daily chart the moderate bullish price movement continues within the upwards channel which still has yet to be breached. The hourly chart is also joining that notion with the Slow Stochastic pointing to the continuation of upwards momentum. Next testing point should be around 0.9245. Forex traders have a good opportunity to enter what appears to be the beginning of a steady rising trend

Read more forex analysis at our forex news center.
 
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