Forexyard Analysis

[forexyard]

Negative NFP Release Weakens The Dollar Vs. The Majors

Following a relatively calm trading week, the U.S. Non-Farm Payrolls data managed to boost volatility in the market, bringing down the U.S. dollar in the process. The dollar fell to an 8-month low against the yen and to its lowest level against the euro since May. The main question now is whether the dollar will continue to slide, or will a correction take place?

Economic News

USD - Dollar Tumbles Following Disappointing Employment Data

The U.S. dollar fell against most of its major rivals during last week's trading session. The dollar lost about 300 pips vs. the euro and about 400 pips against the British pound. The dollar saw bearish movements against the yen as well.

The dollar's downtrend against most of the major currencies came as a result of disappointing data from the U.S. economy. The U.S. housing sector saw further negative data after the Pending Home Sales report was published. The report showed that the number of home sales set to be finalized declined by 2.6% in June, failing to reach expectations for a 0.5% rise.

The dollar's bearishness was further reinforced on Friday, after the release of the U.S. employment data. The U.S. Non-Farm Employment Change report showed that the number of employed people during July, excluding the farming industry, dropped by 125,000, failing to reach expectations for a 106,000 decline. The news emphasized the uncertainty regarding the current U.S. employment situation, and has led to questions regarding the U.S. economic recovery.

Looking ahead to this week, many interesting publications are expected from the U.S. economy. The release which is likely to have the largest impact on the market looks to be the Federal Funds Rate, which is scheduled for Tuesday. The Federal Funds Rate is in fact the U.S. interest rates for August. Traders are also advised to follow the U.S. Trade Balance, the weekly Unemployment Claims and the Consumer Price Index.

EUR - Euro Raises against the Dollar; Sees Mixed Results Vs. The Pound and the Yen

The euro saw mixed results vs. the major currencies during last week's trading. The euro gained about 300 pips against the U.S. dollar. As such, the EUR/USD pair reached its highest level since May. However against the British pound and the yen the euro failed to strengthen, and mainly saw ups and downs.

The main reason for the euro's gains vs. the dollar seems to be the general weakness of the American economic recovery. Due to several negative economic releases from the U.S. economy, especially the Non-Farm Employment Change, the dollar fell against all the major currencies, including the euro.
Nevertheless, the euro continues to trudge vs. the rest of the major currencies as the economic condition of the euro-zone remains vague. While many reports claim that the European Central Bank will manage to recover from the sovereign debt crisis, the economic data being released from the euro-zone's leading economies fail to support that theory. In addition, the ECB continues to keep the euro-zone's interest rates at a record low of 1.00%. ECB President Trichet claims that the euro-zone economies are growing. At the same time, his decision to leave rates at a record low sends mixed signals to investors, which leads to the many fluctuations in prices.

As for the week ahead, traders are advised to follow the publications from the leading economies of the euro-zone, such as Germany and France. In particular, traders should follow the German Preliminary Gross Domestic Product (GDP) report, scheduled for Friday. The GDP measures the change in value of all goods and services produced by the economy, and its publication is likely to have a large impact on the euro.

JPY - Yen Rises To an 8-Month High against the Dollar

The Yen rose to an 8-month high vs. the U.S. dollar during Friday's trading session. The Yen gained about 200 pips against the dollar last week, and the USD/JPY pair dropped as low as the 85.00 level. The Yen saw mixed results vs. the euro and the British pound.

The yen strengthened vs. the dollar following disappointing data from the U.S. economy. The Non-Farm Payrolls report, which was released on Friday, showed that the amount of employed people in the U.S. has dropped for the second month in a row in July. In addition, this has added to concerns that global economic recovery might take longer than expected and as a result boosted demand for safer assets, such as the yen.

As for this week, a batch of data is expected from the Japanese economy, yet the most interesting economic publications look to be the Overnight Call Rate. The Overnight Call Rate is the Bank of Japan's (BoJ) interest rates decision for August. Current expectations are that the BoJ will leave rates at 0.10%, the lowest in the industrial world. However, should the BoJ decide to hike rates, heavy volatility could hit yen pairs.

Crude Oil - Crude Oil Drops To $80 a Barrel

Crude oil saw a volatile session during last week's trading. Crude oil began the week at around $79 a barrel, and by midweek rose to $83 a barrel. However by the weekend, oil erased most of its gains, and was trading around the 80.00 mark.

Crude oil fell to $80 a barrel on Friday following the lower-than-expected U.S. Non-Farm Employment Change data. The disappointing data boosted concerns that demand for energy in the U.S, the world's largest consumer of energy products, will decline. It currently seems that as long as the U.S. and the euro-zone do not show stronger signs of recovery, crude oil might weaken further.

Looking ahead to this week, traders are advised to follow the major economic publications from the U.S. and the euro-zone. Traders should also focus on the U.S. Crude Oil Inventories report, which is scheduled for Wednesday, as this report tends to have an instant impact on the market.

Technical News

EUR/USD

The Stochastic Slow on the daily chart shows a bullish cross has formed, indicating that a downward correction may take place in the near future. The Relative Strength Index on the 4-hour chart supports this theory. Traders are advised to go short on their positions today, as bearish movement is expected.

GBP/USD

Technical indicators are decidedly mixed for the pair at the moment. While the Relative Strength Index on the daily chart is currently well into overbought territory, the Stochastic Slow on the 8-hour chart is showing a bearish cross has formed. Traders are advised to take a wait and see approach today, as a clearer picture is likely to present itself later on.

USD/JPY

Most technical indicators show the pair currently trading in neutral territory, which typically means that no major movement will occur today. At the same time, a bearish cross has formed on the 4-hour chart's Stochastic Slow. Traders will want to watch out for a possible upward correction for the pair this afternoon.

USD/CHF

Technical data is showing the pair trading in neutral territory at the moment, meaning a major price shift is unlikely to occur today. That being said, during these low volatility periods, unexpected movement may occur. Traders are advised to take a wait and see approach for the pair today.

The Wild Card

Gold

The RSI on the 8-hour chart shows the commodity trading well into overbought territory, meaning a downward correction is likely to take place. The Stochastic Slow on the daily chart supports this theory. Forex traders are advised to go short with tight stops in their positions today.

Read more forex analysis at our forex news center.

 

[forexyard]

Federal Funds Rate Leading Event in Today's Market

The Federal Reserve is expected to keep its benchmark interest rate unchanged near 0% today, as traders get ready for a busy news cycle. The Fed's corresponding rate statement is expected to provide an assessment of the current economic condition in the world's largest economy and more importantly provide a speculative economic outlook, likely setting short-term direction for the USD.

Economic News

USD - U.S. Dollar Advances vs. Majors ahead of Fed Statement

The U.S. dollar rose against major currencies on Monday as investors squared up positions a day ahead of this week's Federal Reserve monetary policy announcement. As a result, the dollar rose 0.4% to 1.3190 while the British pound fell around 0.5% to 1.5830. The greenback experience similar behavior against the Japanese yen and closed at 85.95.

Traders have started to focus more on fundamentals such as economic growth and short-term interest rates. That shift, just getting underway, could take the shine off the soaring USD in the coming months. A stronger currency is important to the U.S. because it entices foreign investors to Treasury debt that finances the nation's record budget deficit. The downside is that it may restrain profit growth at companies with international sales by making U.S. exports more expensive.

Looking ahead today, all eyes are focused on the U.S. Federal Funds Rate statement scheduled for 18:15 GMT. The overwhelming consensus is that the Fed will hold the federal funds rate steady at near-zero, where the Fed's target has remained since December 2008. The Fed Statement is expected to provide an assessment of the current economic condition in the world's largest economy and more importantly provide a speculative economic outlook.

EUR - Euro Sees Mixed Results vs. Majors

The 16-nation single currency completed yesterday's trading session with mixed results versus the other major currencies. The euro was broadly unchanged versus the GBP yesterday and closed its trading session at around the 0.8320 price level. The EUR did see bearishness as well, however, as it lost over 50 pips against the AUD and closed at 1.4450

A leading indicator released yesterday from Europe was the German Trade Balance report. Germany holds the largest and strongest economy in the euro zone, and thus the relevant publications from this economy usually have a hefty impact over the euro. Data showed that German exports rose more than economists had forecast in June as the global recovery helped bolster an export-led expansion in Europe's largest economy.

Looking ahead to today, the most important economic indicator scheduled to be released from the euro zone is the French Industrial Production. Analysts are forecasting this figure to decrease from its previous reading. Traders will be paying close attention to today's announcement as a stronger than expected result may boost the euro in the short-term.

JPY - Japanese Yen Sinks against Basket of Currencies

The Japanese yen slid against most of the major currencies during yesterday's trading. The JPY pared some of its gains vs. the U.S. dollar as the USD/JPY pair gained 60 pips. The yen fell against the euro and the British pound as well.

The Japanese markets were expected to have a relatively heavier effect on the JPY versus its major currency counterparts today as the Overnight Call Rate was released during the Asian trading session.

The rate was left unchanged, but traders will be paying close attention to the Bank of Japan (BOJ) Press Conference that will follow to look for expectations of Japan's economic future, especially considering the speculation that measures will be taken to devalue the yen. A bullish statement from the BOJ could lead some traders to believe that it is forecasting a rosier financial climate in Japan. Others fear that the climate is declining and monetary measures may be taken to directly influence currency prices.

Crude Oil - Crude Oil Rises Above $81 a Barrel

Crude Oil climbed above $81 a barrel on Monday, extending last week's 2% rise, as long-term weakness in the U.S. dollar continued to provide support, despite doubts about the strength of the U.S. economy.

Oil, and other commodities denominated in dollars for global trading, tends to rise when the USD falls since they become cheaper for holders of other currencies. A move away from dollar-based pricing of the world's leading commodity could further weaken the greenback.

As for today, the FOMC Rate Statement will likely determine Crude Oil's next moves, with any mildly positive elements within them likely to keep crude prices in an upward direction.

Technical News

EUR/USD

The recent bearish movement on this pair has pushed short-term indicators into showing signs of a correction. The hourly and 4-hour Stochastic (slow) are both showing fresh bullish crosses, suggesting the next move will be in an upward direction. The hourly RSI also appears to be floating deep within the over-sold territory. Going long with tight stops may be the preferential tactic today.

GBP/USD

As with the above pair, short-term indicators appear to also be showing signs of an impending upward correction. However, this pair's long-term indicators seem to be highlighting the remaining strength of the downward movement. The daily and weekly RSI remains in the over-sold territory and is pointing downward. The weekly Stochastic (slow) also appears to have a fresh bearish cross. Downward momentum on this pair may still remain so traders may want to wait to see if the bullish channel is breached before going short on this pair.

USD/JPY

This pair's indicators appear to be predominantly floating in neutral territory. The hourly RSI and Stochastic are both moving in a downward direction, but have not yet entered areas of significance. The 4-hour Stochastic (slow) does, however, appear to have a fresh bearish cross, signifying that we may see further downward movement in this pair today.

USD/CHF

The recent bullish movement on this pair has pushed short-term indicators into showing signs of a correction. The hourly and 4-hour Stochastic (slow) are both showing fresh bearish crosses, suggesting the next move will be in a downward direction. The hourly RSI also appears to be floating deep within the over-bought territory. Going short with tight stops may be the preferential tactic today.

The Wild Card

USD/ZAR

This pair has been trading in a flat range between 7.2500 and 8.0000 since the middle of 2009. The pair has just recently touched the lower border of this range at 7.2500 and long- and short-term indicators seem to be pointing towards an impending upward correction. The daily RSI floats in the over-sold territory, and the weekly Stochastic (slow) is preparing to form a bullish cross. Forex traders have a unique opportunity today to enter this impending upward movement at the lowest possible entry price and ride out the wave for immense profits.

Read more forex analysis at our forex news center.

 

[bangkoker]

Re: Federal Funds Rate Leading Event in Today's Market

Interesting read

 

[forexyard]

USD/JPY Looks to Breach Below 85

The U.S. currency hovered within sight of a 15-year low versus the Japanese yen on Wednesday after the Federal Reserve announced plans to boost a flagging economy by reinvesting money from maturing mortgage bonds and government debt. The U.S. central bank acknowledged economic growth had slowed in recent months and reiterated its intention to hold benchmark interest rates at record lows for an extended period of time.

Economic News

USD - Dollar Pares Gains on Fed's Economic Outlook

The U.S. dollar fell against the Japanese yen and erased most of its gains versus the euro after the Federal Reserve said it will reinvest principal payments on its mortgage holdings into long-term Treasuries to bolster the economy.

The dollar dipped 0.1% to 85.37 yen, edging back toward an 8 month low of 85.02 yen hit last week. A drop under November's low of 84.82 yen would take the dollar to a 15-year low.

The dollar was more buoyant against the euro. The U.S. currency rose 0.2% to 1.3156 having pulled back from last week's 3 month low of 1.3334.

Policy makers took a small step to ease monetary policy again to help promote the economic recovery by reinvesting proceeds from maturing mortgage debt back into the government bonds as many analysts had expected. Analysts said that the more dovish Fed statement might keep the dollar on the defensive in the short term, as the markets push back their estimates for the eventual Fed tightening.

EUR - Euro Falls vs. Dollar to Session Low

The European currency extended losses against the U.S. dollar to trade more than 1% lower on Tuesday as the greenback was boosted by a growing view the Federal Reserve is unlikely to announce any aggressive easing measures at the end of its policy meeting later in the day.

Sterling declined against the U.S. dollar to its lowest level in more than a week after data signaled Britain's economic recovery may be slowing. The Cable has been overbought in recent weeks and now we should have a correction, analysts said.

The pound also dropped versus the Japanese yen after a U.K. housing- market gauge showed the first decline in prices in a year in July. The U.K. currency was little changed at 83.14 pence per euro.

The pound may extend its 1.4% decline against the dollar over the past two days, should the Bank of England's Inflation Report today at 9:30 GMT add to evidence the economic recovery is slowing.

JPY - Yen Rises Broadly vs. Counterparts

The Japanese yen strengthened versus all 16 major counterparts after the Federal Reserve said the U.S. recovery will be slower than expected and reports today showed U.K. consumer confidence dropped and Japan's machine orders rose less than analysts forecast.

The yen climbed to 112.14 per euro from 112.58 yesterday, after rising to 111.70, the highest since July 23. The yen traded at 85.45 per dollar from 85.44.

A dollar drop below 84.82 yen could trigger more market speculation about the possibility of Japanese intervention. Traders think the yen will eventually test those levels as Japan is unlikely to intervene to curb the yen unless the dollar/yen falls closer to 80 yen, or its moves become more volatile.

OIL - Crude Trades near a 7 Day Low

Crude Oil prices dropped 1.5% yesterday as the department said the U.S. economy lost momentum heading into the second year of the recovery from the recession. Crude pared losses after Federal Reserve policy makers announced their first attempt to bolster growth since March 2009.

Oil hovered around $80 a barrel on Wednesday after data showed a rise in U.S. crude imports was offset by steps taken by the Federal Reserve to shore up the economic recovery.

Even though U.S. oil demand is expected to end a 4 year-old decline this year by rising 0.7%, analysts remain skeptical. Economic growth in the world's second-largest energy consumer is slowing slightly, although still remains robust as the government steers credit growth back to normal.

Technical News

EUR/USD

The pair saw high volatility with light volume yesterday as the pair fell to a low of 1.3075. However, the drop in the value of the pair was limited by the minor rising trend line that began on June 29th. Going long close to a trend line can be a a opportunity to enter into a trending market.

GBP/USD

Sentiment in the Cable appears to be shifting. Monday's trading had the pair forming a bearish engulfing pattern and yesterday the pair closed near its opening price forming a rickshaw man. The long upper and lower shadows of yesterday's candle show indecision on the part of traders. As this candlestick appears at the top of an uptrend, it could signal a top in the recent bullish move. Support and resistance lines are found at 1.5700 and 1.5960.

USD/JPY

This pair appears to have entered an over-sold region on a number of indicators. The hourly and daily RSI both show over-sold, indicting potential upward pressure on this pair today. The 4-hour Stochastic (slow) also appears to be forming a bullish cross, which supports this notion. Going long may be today's preferred strategy.

USD/CHF

The long-term indicators on this pair appear to be suggesting an impending upward movement; which could be a breach of its current flat range. The hourly and weekly RSI are floating just inside the over-sold territory, and the weekly Stochastic (slow) is showing a fresh bullish cross. Taking a long position on this pair for the mid- to long-term could be a wise move.

The Wild Card

EUR/CHF

The short-term indicators for this pair seem unified in their representation of an impending upward movement. The pair has been trading within a bullish channel for a few weeks now and signals seem to support the notion that this trend will continue. The hourly RSI is in the over-sold region; the hourly and 4-hour Stochastic (slow) have both formed what appears to be a bullish cross as well. Forex traders should take advantage of this running trend and join in while there is still momentum.

Read more forex analysis at our forex news center.

 

[forexyard]

The Safe Heaven Dollar, Yen Rally as Investors seek Safety

Fears about global growth prospects fueled strong gains by the USD and JPY against most of their counterparts as investors turned to safe haven currencies following a stream of negative economic data from the U.S, China and the U.K.

Economic News

USD - USD Rallies on Negative Global Growth Prospects

The U.S Dollar rallied versus all counterparts except the Japanese yen on Wednesday as equities declined and investors turned to the safe heaven currencies on concerns about the stability of global growth. The USD surged against the EUR after the Federal Reserve said Tuesday that U.S. economic growth slowed, exacerbating concerns the global economic recovery will stall.

The Dollar appreciated despite the release of worse than expected U.S trade deficit data. The U.S. trade deficit expanded $7.9 billion to $49.9 billion, from a revised $42 billion in May. Markets were also shaken by a round of weak data from China; showing a decline in Chinese industrial output and weak retail sales. The Chinese economy is seen as crucial to global economic recovery, along with the world's largest economy, the U.S.

For today, traders are advised to follow the release of the weekly unemployment claims data, released at 12:30 GMT. A worse then expected result will likely intensify the current negative market sentiment, supporting the dollar and JPY further.

EUR - EUR at Two Week Low versus USD

The EUR dropped 2.3% versus the dollar, falling below $1.29, the biggest single-day fall versus the USD since December 2008. The U.K. pound tumbled against the USD after the Bank of England cut its forecasts for U.K. economic growth and long-term inflation. The pound fell below $1.57 for the first time in August. Poor performing employment numbers from the U.K. reinforced concerns about the strength of the British economic recovery, putting further pressure on the pound.

Late Wednesday, the EUR was at $1.2882 from $1.3187 late Tuesday and at Y109.45 from Y112.58. The U.K. Pound was at $1.5650 from $1.5886.

Today traders are advised to follow the release of the European Industrial Production report, due at 9:00 GMT; worse than expected result can put further pressure on the EUR/USD pair.

JPY - Yen Rallies on Flee to Safety

The Japanese yen traded near a 15-year high versus the USD and rallied against the EUR as concern over the sustainability of the global economic recovery spurred demand for safe heaven assets.

The JPY appreciated against all of its 16 major counterparts after U.S. data Wednesday showed a widening trade deficit and a European report today is expected to show industrial production grew at a slower pace in July. The Australian and New Zealand Dollars fell for a fourth day as commodity prices continue to decline.

The Yen climbed to 109.32 per EUR in today's early trading from 109.74 in New York yesterday, after earlier reaching 109.24, the highest level since July 6. It is trading at 85.05 per USD from 85.32 yesterday, when it touched 84.73, the strongest since July 5, 1995.

OIL - Crude Drops Below $78 a Barrel

Crude futures fell 2.8%, following the release of a U.S. government inventories report which showed gasoline stockpiles rose for the seventh-straight week, spurring concerns the faltering global recovery cannot support demand.

Light, sweet crude for September delivery settled down $2.23 at $78.02 a barrel on the New York Mercantile Exchange, after falling as low as $77.90. Currently Spot Oil is trading near the $77 a barrel level.

The drop in Oil was triggered by poor economic data from China and Japan along with growing concerns about the flailing U.S economic recovery. A continuous rise in Oil inventories as the U.S. nears the end of the summer driving season adds to concerns about faltering demand.

Technical News

EUR/USD

The pair is in the midst of a bearish correction and yesterday reached a 3-week low as the pair fell to the 1.2830 level. Currently, a bearish cross of the MACD on the daily chart suggests that the bearish move might continue today. Going short might be the preferable choice.

GBP/USD

There is a very distinct bearish chart formed on the 1-hour chart, and the cable is currently floating in the middle of it. The 4-hour chart shows bullish signals from the RSI and the Slow Stochastic, which indicates that a mild bullish movement might take place. Going long with tight stop could be a good strategy.

USD/JPY

The pair continues with the bearish momentum that was initiated 4 months ago, and yesterday has dropped to the 84.92 level. Today, the bearish trend is likely to proceed with a target price of 84.20.

USD/CHF

The pair gained about 150 pips in yesterday's trading session and has peaked at the 1.0624 level. At the moment, the RSI on the 4-hour chart has dropped below the 70 line, indicating that a bearish correction might take place, with potential to reach the 1.0500 level.

The Wild Card

Platinum

Platinum saw further bearishness during yesterday's trading, and the commodity is currently trading near the 1508.00 level. As the MACD and the RSI continue to point down, the bearish move seems to have more steam in it. This might be a great opportunity for forex traders to join a very popular trend.

Read more forex analysis at our forex news center.

 

[forexyard]

US Dollar Gaining Ground; Analysts Uncertain about Why

With retail sales and consumer confidence figures expected from the United States later today, there is a high possibility that the greenback will experience a modest level of volatility before the market closes out for the weekend. If the figures come in line with the expected wave of positive news, the USD could go either way depending on which forces are actually in control of the market. If optimism is in charge, then positive figures will drive the USD higher. However, if risk aversion is the dominant theme, the USD could actually decline from a positive release as traders bail out of their USD safe-haven positions and move into riskier assets.

Economic News

USD - Which Market Force is Behind the USD's Rise?

Tuesday's Federal Open Market Committee (FOMC) statement on future monetary policy seems to have taken its toll on US dollar trading. The greenback has risen steadily against most of its primary currency rivals since the announcement was made that steps would be taken to correct the recent wave of bearishness.

The greenback has pared much of its recent losses to the euro, British pound, Canadian dollar, and Australian dollar. Against the euro, the USD changed direction, breaking its bullish channel, and went from 1.3333 to 1.2833. Similar gains were seen on the GBP/USD cross as well; currently trading at 1.5600, down from 1.6000.

While it appears that the statement released by the Fed's FOMC is the cause of the dollar's recent strength, there is a second explanation which many analysts are putting forth. Mainly, that global growth concerns have played an instrumental role in shifting investments away from the riskier assets and back into safe-havens. This is not a new story, considering it has been taking place frequently since the start of the financial crisis and recession back in 2007.

With retail sales and consumer confidence figures expected from the United States later today, there is a high possibility that the greenback will experience a modest level of volatility before the market closes out for the weekend. If the figures come in line with the expected wave of positive news, the USD could go either way depending on which forces are actually in control of the market. If optimism is in charge, then positive figures will drive the USD higher. However, if risk aversion is the dominant theme, the USD could actually decline from a positive release.

EUR - Euro's Decline Continuing as Risk Aversion Takes Hold

The euro has been in steady decline this week versus most of its currency counterparts. The sudden trading shift away from the 16-nation single European currency has many analysts debating the potential causes behind this movement.

The euro has fallen against the US dollar from 1.3333 towards 1.2860 since Tuesday. Against the British pound, we have seen a decline from 0.8355 to as low as 0.8200. Also, versus the Japanese yen the euro zone currency has gone from just below 114.00 to as low as 109.00, and currently trades at 110.40 after Japan's yen took a dive from statements made by the Japanese finance minister.

The question on the minds of many analysts now is whether this transition away from the euro represents a return of weakness to the euro zone - a type of resurgence of the Greek crisis from earlier this year - or just a rise in risk aversion as traders seek to put their assets into safer investments. Statements from the American Federal Reserve about monetary policy shifts has made many traders feel uneasy about future growth prospects and could explain the move back into safer investments.

With the euro zone primarily absent today's economic news, the euro shouldn't be much affected by today's events except indirectly. The US market appears to be the front-runner in today's market with a number of indicators carrying a traditionally heavy impact. Traders would be well advised to follow the opening of the US market since it will be releasing its retail sales and core retail sales figures at that time.

JPY - Japan's Finance Minister Hints at Possible Currency Manipulation

While the Japanese yen has been predominantly gaining on most of its currency rivals lately, it seems a sharp weakness struck the island currency today following statements from Japan's finance minister. It seems that a comment made to a reporter by Japanese Finance Minister Yoshihiko Noda put a level of unease in yen-trading as many are now speculating a further possibility of government intervention.

Noda's statement seemed to suggest that unnatural strengthening of the yen was looked upon as unfavorable and harmful to the Japanese economy. The message appears to have been interpreted as a comment that future market meddling may be in the works by the Bank of Japan (BOJ). As a result, traders have seen the JPY losing ground against most of its rivals in yesterday's and today's trading.

OIL - Crude Oil Price in Decline on Rising USD

The price of spot crude oil has been declining moderately for over a week as growth concerns continue to take their toll. The various market forecasts made by the United States, Europe and Australia have apparently put a damper on demand and pushed a number of traders out of riskier assets and back into safe-havens for the time being. The result has been a strengthening US dollar, and weakening commodity prices.

While the USD climbs in value, the commodities which are linked to the greenback will react in an opposite fashion; losing value as it becomes more expensive to purchase them. If the dollar continues its rise, either from risk aversion or market growth in the US, the price of commodities such as oil will undoubtedly continue their fall.

Technical News

EUR/USD

The pair continues to fall following a breach under the bullish channel that the pair had traded in. Yesterday the pair fell as low as 1.2775, just above the next support level at 1.2740. A bullish cross is forming on the daily chart's Slow Stochastic oscillator, indicating a move higher could be in store for the pair. The first resistance level for the pair rests at yesterday's high of 1.2930.

GBP/USD

Yesterday the pair fell as low as 1.5560, dropping below the 20-day moving average, but managed to close near the 50% Fibonacci retracement level from the high seen last August. Further drops in the price today may test the bullish trend line that has held since early June. Support for the pair comes in at 1.5450 followed by 1.5250.

USD/JPY

The pair has seen strong resistance near the price of 86.20 as the price has failed to close above this level all week. The Momentum (7) has pushed above the 100 level, indicating the next move may be to the upside with resistance at 87. Traders may want to cover shorts prior to the bullish move.

USD/CHF

Strong resistance for the pair is seen at 1.6050, the 61.8% Fibonacci retracement from the previous bullish trend that ended at a high in June. Support is found at the 78.4% Fibonacci retracement at a price of 1.0350. Traders may want to use this support level as a take profit target with the range trading that is taking place between these two levels.

The Wild Card

Oil

Spot crude oil prices have fallen dramatically from a recent high of $82.95 to test the support level at $75.50. A breach below this support line would then test the bullish trend line that began in late May. CFD traders will want to target the price of $74.50 today as close below this level would signal a shift in the long term trend.

Read more forex analysis at our forex news center.

 

[forexyard]

Signs of Slowdown in Global Economic Recovery Supports the Dollar

The U.S. dollar corrected looses against most of the major currencies during last week's session, as data showed that global recovery might take longer than expected. This decreased risk-appetite in the market, and turned investors to look for safer assets, such as the dollar and the Japanese yen. Crude Oil prices also fell as a result. With a heavy news week ahead, this trend might extend if the economic publications will continue to provide signals for a slowdown in the global recovery.

Economic News

USD - Negative Economic Data Boosts the Dollar

The U.S. dollar rallied vs. most of the major currencies during last week's trading session. The dollar gained about 500 pips against the euro and about 400 pips against the British Pound.

The dollar fell last week as a result of several disappointing publications from the U.S. economy. The U.S. Trade Balance, a report which measures the difference between imported and exported goods and services, showed that the U.S. trade deficit widened sharply to $49.9B in June, failing to reach expectations for a $42.0B deficit. In addition, the U.S. employment condition continues to deteriorate. The U.S. weekly Unemployment Claims showed that 484,000 peoples have filed for unemployment insurance for the first time during the past week, well above expectations for 465,000 individuals. This continued the negative employment data from the Non-Farm Payrolls publications which released a week ago. The negative data keeps investors cautious regarding their portfolios, and as a result increases risk-aversion in the market. This boosts the dollar, which is considered to be a safe investment. As long as the U.S. economy continues to provide negative signals the dollar may rise further.

As for the week ahead, many interesting publications are expected from the U.S. economy. Traders are advised to follow the Long-Term Purchases, the Building Permits, the Producer Price Index (PPI), the Unemployment Claims and the Philly Manufacturing Index. These indicators tend to have a large impact on the market, and each publication is likely to influence the dollar's trading.

EUR - Euro Erases Profits as Data Shows Global Recovery May Take Longer Than Expected

The euro fell against most of the major currencies during last week's trading session. The euro dropped about 500 pips against the U.S. dollar, and the EUR/USD pair is now trading around the 1.2790 level. The euro also fell about 450 pips vs. the yen and about 150 pips vs. the British pound.

Two main reasons led to the euro's downfall last week. The first reason was the negative data from the U.S. economy. Data showed that the unemployment condition in the U.S. continued to deteriorate during the past week. In addition, the U.S. Trade Balance fell more than expected, and as a result created concerns that the recovery of the U.S. economy will take longer than expected, which will probably halt global recovery as well. This increased risk-aversion, and turned investors to close their long positions on relatively risky currencies, such as the euro and the pound.
The second reason for the euro's drop is the dissipating data from the euro-zone. The European Industrial Production failed to reach expectations for a 0.7% rise in June, and has fallen by 0.1%. In addition, French Preliminary Non-Farm Payrolls saw merely a 0.2% rise during the 2nd quarter, failing to reach expectations for a 0.4% rise. The disappointing data has added to the uncertainty in the market, and as a result weakened the euro.

As for this week, the economic indicator which might have the largest impact on the euro looks to be the German ZEW Economic Sentiment. This is a survey of about 350 German institutional investors, who are asked to rate the economic outlook of Germany. A positive end result might initiate a correction for the euro against the major currencies.

JPY - Yen Strengthens Against the Euro and the Pound on Increased Risk Aversion

The yen appreciated against most of the major currencies during last week's trading session. The yen gained about 450 pips against the euro, and about 350 pips against the British pound. Against the U.S. dollar the yen saw a volatile session without a clear trend.

The yen rose significantly last week, as disappointing data from the U.S. economy increased concerns that global recovery may take longer than expected. In addition, negative reports from the Japanese economy also contributed to the uncertainty in the market. The Japanese Current Account, which measures the difference between imported and exported goods and services rose to 1.36T, yet failed to reach expectations for 1.44T. In addition, the Core Machinery Orders rose by 1.6% in June, well below expectations for a 5.6% rise.
It currently seems that for as long that data from Japan, the U.S. and the euro-zone will indicate that global economic recovery might be halted, the yen, as safe-haven, is likely to strengthen as a result.

Looking ahead to this week, traders are advised to follow the major economic publications from Japan, the U.S. and the euro-zone, and to take under consideration that positive data might increase risk appetite, and as a result erase the yen's gains from the past week.

Crude Oil - Crude Oil Falls To $75.05 a Barrel

Crude Oil is trading near a one month low, as a barrel of crude oil is currently trading around $75.70. A barrel of crude oil was traded for about $80 when last week's trading took off, yet crude saw a sharp decline, and reached a weekly low of $75.05 on Friday.

Crude oil fell during last week's session as negative data from the U.S. economy has created concerns that the world's largest consumer of energy products will reduce its demand for fuel. Crude oil reached its monthly low following the disappointing U.S. Retail Sales. At the moment, crude oil continues to weaken as an early publication has shown that the Japanese economy has grown less than expected during the 2nd quarter, adding to concerned regarding a reduced demand for oil.

As for the week ahead, traders are advised to follow the main publications from the U.S and the euro-zone, as they usually have a large affect on crude oil's trading. Traders are also advised to follow the U.S. Crude Oil Inventories report on Wednesday, as this report tends to have an instant impact on oil prices.

Technical News

EUR/USD

While the pair took a significant drop to close out last week's trading, it has been fairly steady since markets opened. The Stochastic Slow on the daily chart indicates a bullish cross may form soon, typically a sign that upward movement could occur. This theory is supported by the Relative Strength Index on the 8-hour chart. Traders are advised to go long today.

GBP/USD

Despite some small price fluctuations in overnight trading, the pair is trading at the around the same rate as when markets opened for the week. That being said, the Slow Stochastic on the daily chart shows signs of impending upward movement. Traders may want to open long positions today, as bullish movement could take place.

USD/JPY

Following a steep drop in overnight trading, the pair now appears to be trading in neutral territory. With most technical indicators not showing a clear indication of where the pair could be moving, traders may want to take a wait and see approach with their positions today. A clearer picture could present itself in afternoon trading.

USD/CHF

With no strong price shifts recorded in overnight trading, most technical indicators are not showing a clear direction for the pair at the moment. That being said, market volatility is expected later today, so traders will want to pay close attention to both the Bollinger Bands and Relative Strength Index on the 4 and 8-hour charts for any signs of movement.

The Wild Card

S&P500

The CFD has seen a steep drop in value over the course of the last week. That being said, the Slow Stochastic on the daily chart and the Relative Strength Index on the 8-hour chart both show the S&P trading in oversold territory, meaning an upward correction is likely today. CFD traders may want to go long today in order to capitalize on a potentially lucrative price shift.

 

[forexyard]

Yen Strengthens Despite Weak Japanese GDP Report

Volumes were light during Monday's trading as the yen climbed versus the major currencies. Japanese Q2 gross domestic product failed to meet market expectations, raising concerns over the pace of the global economic recovery.

Economic News

USD - Dollar Weakens on Light Trading

The U.S. dollar was weaker across the board today as trading today began on a down note. Risk sentiment was sapped following disappointing Japanese GDP numbers.

The EUR/USD pair rose for the first trading day since the pair began a sharp correction last week. However, gains in the pair were reduced following the release of strong TIC long term purchases data. The report came in positive at 44.4B on expectations of 36.3B. But the added support was not enough to turn the tide of negative risk sentiment. The Dow Jones Industrials Average finished the day even.

Yesterday the EUR/USD closed up at 1.2820, from an opening day price of 1.2775. The GBP/USD was higher at 1.5650, after opening at 1.5573. The USD/CHF was significantly lower at 1.3090, from an opening day price of 1.0510 highlighting the lack of risk taking in yesterday's trading.

Traders will be looking today for signs the global economic outlook is improving following the dismal GDP numbers from Japan. A slew of data is on the calendar for today's trading. The major data releases from the U.S. will be monthly building permits and monthly PPI. Housing data has been bleak during the recent downturn in U.S. economic data. Tomorrow's release of building permits may carry the same trend. The inflationary data will also be significant as talk of deflationary conditions in the U.S. economy take shape. Support and resistance for the EUR/USD come in at last night's low of 1.2730 followed by the mid July high of 1.3030.

EUR - EUR Recoups Losses

Yesterday's trading saw the euro mixed versus the major currencies as a lack of fundamental data releases for the euro zone held the currency within its daily trading ranges. The lone data release for Europe was yearly CPI data which came in as expected at 1.7%. However, this data piece was not influential as most of the data was known to the market via previous data releases.

Both the EUR/USD and GBP/USD traded higher, receiving support on technicals as the pairs approached the trend line from the bullish moves that began in early June.

The Swiss franc was stronger in yesterday's trading, moving as low as 1.0350. The pair has been range trading between the 61.8% (1.0600) and the 76.4% Fibonacci retracement levels from the last bullish trend that began in January and ended in June of this year.

Significant data releases are on the economic calendar from Europe today. Traders will be following yearly British CPI data to confirm or rebuke claims of stagflation in the British economy. Also on the calendar is German ZEW Economic Sentiment. Better than expected results could continue to boost the euro and the pound versus the dollar in today's trading.

JPY - Japanese Q2 GDP Disappoints

Japanese economic data started this week's trading on a down note. Yesterday Japan released disappointing Q2 GDP to the tune of 0.1%. Economists had expected the Japanese economy to expand by 0.6%. The stagnant growth increases concerns over the pace of the global economic recovery.

Following the release of poor data, the yen strengthened on safe-haven buying. The USD/JPY fell as low as 85.20 before ending the day at 85.30. The pair was held above the support level of 85 on speculation that the Bank of Japan will intervene and begin selling yen in order to weaken the nation's currency. The Japanese economy is dependent on its exports to fuel economic growth. A strong yen makes Japanese exports less competitive overseas.

More gains for the yen may be in store today should U.S. building permits be released to weaker than expected data. This could cause a similar run to safe haven assets and add further doubts as to the recovery of the global economy. Support and resistance for the USD/JPY rest at 86.30 and 85.00.

Oil - Oil Declines for 5th Consecutive Trading Session

Spot crude oil prices continued their decline yesterday. Causing the drop in the price was weaker than expected Japanese GDP data and a slumping U.S. dollar. This was the 5th consecutive drop in spot crude oil prices. The recent declines have amounted to more than $5 in the value of the commodity.

The price of spot crude oil ended the day at $75.50, after opening the day at $75.62. The price reached a low of $74.86.

The low for the day coincides with the short t term trend line that begins on May 25th. This is the 3rd point of contact the price has made with the trend line, making this a significant trend line.

Resistance for spot crude oil is found between the current price of $75.50 and $76.00. A breach above $76 may be an opportunity to go long on the commodity with a price target at the next resistance level just below $80.

Technical News

EUR/USD

The EUR/USD saw a mild bullish correction yesterday and gained about 100 pips. At the moment, as a bullish cross takes place on the MACD's 4-hour chart, the pair looks to rise further, with potential to reach the 1.2920 level.

GBP/USD

After dropping consistently during last week's trading, the cable saw a modest bullish move yesterday, and has peaked at the 1.5700 level. Currently, a bullish cross of the Slow Stochastic on the daily chart is suggesting that the bullish move might be elongated.

USD/JPY

There is a very distinct bearish channel formed on the daily chart, and the pair is now floating at the middle of it. In addition, as all the oscillators on the daily chart are pointing down, it seems that another bearish movement could be expected, with a key target price of 84.50.

USD/CHF

For the past month the pair has been trading within a restricted range, between the 1.0350 and the 1.0620 levels. The MACD and the RSI on the 4-hour chart currently provide bearish signals, suggesting that going short with tight stops might be a good strategy today.

The Wild Card

EUR/GBP

For the past month the pair has resumed the bearish trend, and after dropping over 400 pips, the pair is now trading around the 0.8200 level. Currently, the 4-hour chart's MACD continues to point down, suggesting that further bearishness might be expected. This might be a good opportunity for forex traders to join a very popular trend.

Read more forex analysis at our forex news center.

 

[forexyard]

Euro Gains on Successful Spanish and Irish Debt Auctions

The EUR rose against the US Dollar and came off 7-week lows against the Japanese Yen on Tuesday, helped by solid results of Irish and Spanish bond auctions which alleviated concerns about the heavily indebted Euro-Zone countries. The EUR rose 0.2% against the yen to 109.95 after an early fall as low as 109.10.

Economic News

USD - Dollar Trades Lower Against the EUR

The dollar fell against the EUR on Tuesday, as prospects of more weak economic data from the United States added to worries about a global slowdown and capped gains in stock markets. European shares followed most Asian stock markets slightly higher, although analysts said gains could prove to be fleeting given weak sentiment.

The major economic event that came out of the U.S yesterday was the Building Permits data release. Building permits, a leading indicator of housing construction, fell 3.1% to a seasonally adjusted annual rate of 565,000. This is the lowest level of permits since May 2009, underscoring the hazards to an economic recovery even as businesses appeared to be stepping up investment.

Another leading indicator released yesterday was U.S. Producer Price Index. This number handedly beat last month result but failed to provide strength to the Dollar as investors may be waiting for key data due to be released later this week to implement their trading strategies.
As for today, the calendar is lacking any major economic data releases for today's trading. As such, traders will want to follow the movements of the major equity indices as the dollar has recently been trading in an inverse relationship to equities. Strength in stocks could propel the EUR/USD to its next resistance line which rests at 1.3000.

EUR - EUR Gains on Spanish and Irish Debt Auctions

The EUR rose against most of its major currency counterparts on Tuesday as solid results of Irish and Spanish bond auctions alleviated concerns about the heavily indebted Euro-Zone countries. By yesterday's close, the EUR rose against the USD, pushing the oft-traded currency pair to 1.2890, and rebounded from a seven-week low against the yen and closed at around 109.95.

But the EUR struggled to hold above $1.29 on uneasiness about the economic outlook, with a key German survey sparking concerns about whether Europe's largest economy can sustain a solid recovery. The German ZEW institute's measure of investor and analyst sentiment dropped well below forecasts, though this was partly offset by an unexpectedly sharp jump in the current conditions index.

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, Spain and Ireland eased concerns.

JPY - Yen Sees Mixed Results vs. Majors

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 at around the 81.95. The yen did see bullishness as well as it gained over 50 pips against the GBP and closed at 133.30.
Some of the pressure 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. The yen rose to a 15-year high this month against the U.S. currency, threatening to damage exports and derail Japan's fragile economic recovery, with GDP growth slowing to a crawl at 0.1% in the April-June period.

Crude Oil - Crude Oil Rises Above $76 a Barrel

Oil snapped a five-day losing streak to rebound above $76 a barrel on Tuesday as firmer equity markets and a weaker dollar outweighed concerns about the pace of global economic recovery.
Oil and other commodities denominated in dollars for global trading tend to rise when the U.S. currency falls as they become cheaper for holders of other currencies. A move away from dollar-based pricing of the world's leading commodity could further weaken the greenback.
As for today, traders should pay attention to the U.S Crude Oil Inventories report scheduled, as it tends to have a large impact on Crude Oil's prices recently, especially for the short-term.

Technical News

EUR/USD

After yesterday's rally the pair seems to have settled in to a range and is comfortably trading around the $1.2850 level. It seems, however, that there is some room for an upward trend today as a breach of the lower Bollinger Band is apparent on the hourly chart and with the RSI for the pair floating near the oversold territory on the daily chart. Going long with tight stops may be advised for today.

USD/JPY

The pair seems to be range trading between 85.20 and 85.60 with most indicators floating in neutral territory. Traders may be advised to wait on a clearer signal for the pair for today.

USD/CHF

The pair is currently range trading with most indicators floating in neutral territory while others show some mixed signals. A bearish cross is evident on the 4 hour chart's Slow Stochastic while the RSI for the pair is floating near the oversold territory on the 4 hour and 8 hour charts. Waiting on a clearer direction for the pair may be advised for today.

The Wild Card

GBP/CAD

The RSI for the pair is floating in the oversold territory on the 2 hour and 8 hour charts while a bullish cross is evident on the 4 hour chart's Slow Stochastic. Furthermore, a breach of the lower Bollinger Band is evident on the 8 hour chart. Forex traders may be advised to go long for the day.

 

[forexyard]

Dollar and Yen Strengthen As a New Trading Week Begins

After four days in which the euro and British pound had dominated the market, the trend markedly reversed by last Thursday. Several negative economic reports from the U.S. have added to concerns regarding the global economic recovery, boosting risk aversion. Both the U.S. dollar and yen saw gains as a result. Will the dollar and the yen continue to strengthen this week as well?

Economic News

USD - Dollar Finishes Volatile Week with Green Signals

The U.S. dollar finished a rather volatile trading week with modest gains against most of the major currencies. The dollar began last week's trading down about 150 pips against the euro, but eventually closed the session with a 70 pip gain. A similar trend took place against the British pound.

The dollar weakened against most of the major currencies until last Thursday, as reports showed that the U.S. economy is recovering faster than expected. The global demand for long-term U.S. financial assets rose in June from a month earlier as investors abroad bought treasuries and agency debt and sold stocks. Net buying of long-term equities, notes and bonds totaled $44.4 billion for the month, beating expectations for $36.3 billion, and well above $35.3 billion in May. In addition, the U.S. Producer Price Index (PPI) rose for the first time in 4 months in July. This has eased concerns for deflation in the U.S. and was interpreted as another signal that the U.S. economic recovery is advancing, and that a global recovery might quicken it's pace as well. As a result, investors looked for higher-yielding assets, such as the euro and the pound.

However, disappointing data from the U.S. economy released on Thursday had turned the trend around. The weekly Unemployment Claims showed that 500,000 individuals filed for unemployment insurance for the first time during the past week, failing to reach expectations for 478,000 requests. In addition, the Philly Manufacturing Index showed that manufacturing in the Philadelphia region unexpectedly shrank in August for the first time in a year. These reports have crated uncertainty regarding the recovery of the U.S. economy, and as a result turned investors to open long positions on the safe-haven dollar.

As for the week ahead, many interesting economic releases are expected from the U.S. Traders are advised to focus on the Existing Home Sales, Core Durable Goods Orders, New Home Sales, weekly Unemployment Claims and the Preliminary Gross Domestic Product publications, as there are likely to have the largest impact on the dollar.

EUR - Euro Tumbles Due To Disappointing Data

The euro dropped against most of its major counterparts during last week's trading session. The euro began last week with a rising trend, yet finished it with a 70 pip loss against the U.S. dollar and a 120 pips loss against the Japanese yen.

The euro fell last week as negative data from the euro-zone's leading economies have increased concerns regarding the pace of recovery for the region. The German ZEW Economic Sentiment, a survey of German institutional investors and analysts who are asked to rate the 6-month outlook for Germany, dropped more than expected, and reached a 16-month low. This has been the 4th consecutive decline for this survey, suggesting that German economic growth may be slowing down. In addition, the euro-zone's Current Account, an indicator which measures the difference between imported and exported goods and services was released with a negative figure, the 3rd in a row. The negative report has decreased risk-appetite in the market, and turned investors to look for safe-haven currencies such as the yen.

Looking ahead to this week, traders are advised to follow the major economic releases from Germany, as it is the biggest economy in the euro-zone. Special attention should be given to the German Business Climate report, which will also try to detect the German economic outlook for the next 6 months. This week's euro trading will be largely affected by the result of this publication.

JPY - Yen Rises to 7-Week High Vs. The Euro

The Japanese yen rallied against most of the major currencies during last week's trading session. EUR/JPY tumbled about 100 pips, causing the pair to hit a 7-week low. The yen gained about 100 pips against the British pound as well.

The yen strengthened last week as economic reports from the U.S. and the euro-zone have signaled that the global economic recovery is slowing. Reports showed that the unemployment situation in the U.S. continues to deteriorate, as 500,000 people have filed for unemployment insurance for the first time during the past week. The euro-zone has provided negative data as well, as the German ZEW Economic Sentiment report, which attempts to predict the economic outlook of Germany for the next 6 months, has declined for the 4th consecutive time.

The disappointing economic data from both the U.S. and the euro-zone are the main reason that concerns regarding the global economic recovery are taking place. These concerns are driving investors to open long position on the yen, which is considered to be a relatively safe investment. As long as the leading economies will continue to provide negative signals, the yen is likely to strengthen further.

As for this week, a batch of data is expected from the Japanese economy. Traders are advised to follow the Japanese Trade Balance and the Tokyo Core Consumer Price Index, as these reports tend to have a large impact on the yen.

OIL - Crude Oil Drops To $73.45 a Barrel

Crude oil continued to tumble during last week's trading session. A barrel of crude oil was trading at around $75.70 at the beginning of the week, and eventually dropped to around $73.85 a barrel by Friday.

The main reason for crude oil's decline seems to be the negative data from the U.S, the biggest oil consuming nation. The weekly Unemployment Claims rose by 12,000 to 500,000 in the past week, the highest figure since November 2009. In addition, the Federal Reserve Bank of Philadelphia said that its general economic index slipped to -7.7 on August, also signaling a possible contraction of the U.S. economy. It seems that as long as the U.S. economy continues to provide negative data, demand for gasoline in the U.S. is likely to decrease, and as a result crude oil prices will continue to decline.

Looking ahead to this week, traders are advised to continue following the major economic updates from the U.S. and the euro-zone, as these seem to have the largest impact on oil prices. Most significantly, traders should follow the U.S. Crude Oil Inventories report, scheduled for Wednesday, as this publication tends to have an instant affect on crude oil prices.

Technical News

EUR/USD

The pair has been experiencing some very bearish behavior in the past week, as it currently stands between the 1.2700-1.2730 levels. The main oscillators of the daily chart indicate this trend may continue into the near future. However, the 4-hour Slow Stochastic reveals that a bullish cross is about to occur anytime soon, indicating that a bullish correction may be imminent. Now may be a ripe time to take advantage of the situation at an early stage.

GBP/USD

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

USD/JPY

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

USD/CHF

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

The Wild Card

Gold

Gold prices have been increasing rapidly lately, as they stand at over $1229per 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.

Read more at our forex news center.