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Forex Daily Analysis

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Forex Trading − Dollar Anticipates Release of U.S. Unemployment Claims

Thu, Nov 12 2009, 08:24 GMT
by Greg Holden

ForexYard

The U.S. Unemployment Claims is the primary publication today that is set to determine the level of the USD when it is released at 13:30 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 Industrial Production from the Euro-Zone at 10:00 GMT and Crude Oil Inventories at 16:00 GMT. Traders may find good opportunities to enter the market following these vital announcements.

Economic News

USD - Unemployment Claims Report on Tap - Will USD Weakness Continue?
The Dollar hit a 15-month low against major currencies on Wednesday on the view that U.S. Interest Rates will remain low well into next year, though it regained some ground after failing to push through key levels. By yesterday's close, the USD fell slightly against the EUR, pushing the oft-traded currency pair to 1.5015. The Dollar went bullish against the AUD and closed at 0.9355. The USD also experienced similar behavior against the GBP as it jumped around 120 points and closed at 1.6595.

Many worry that the U.S. economy, however, will recovery slowly, and a bevy of Federal Reserve officials have bolstered that view this week, warning the recovery would be erratic and hinting that Interest Rates would remain low for some time. Low Interest Rates make the Dollar less attractive to investors than higher-yielding currencies, stocks and commodities.

As for today, much data is expected from the U.S. economy. Special attention should be given to the Crude Oil Inventories, which is expected to increase from the previous reading. Traders should pay close attention to this figure as it has a strong correlation with the value of the U.S. Dollar. Also today, the Unemployment Claims is scheduled and should also have an impact on the market, because if it delivers unfavorable figures that will validate a problematic U.S. economy, and the USD is likely to weaken as a result.

EUR - EUR Strengthens as GBP Sinks
The EUR strengthened against most of its major counterparts yesterday, continuing to prove that for the time being that this is the solid currency that traders can rely on to provide them with steady profits. The 16 nation currency extended gains versus the Yen on Wednesday, to trade at about 134.70 amid a broad sell-off in the JPY. The EUR experienced similar behavior against the USD and closed at 1.5015.

The Pound also fell broadly against the Dollar and EUR, after Bank of England (BoE) Governor Mervyn King said weakness in the currency would help UK exporters and aid Britain's recovery from recession. Earlier in the global session, BoE Governor King emphasized the need for the UK economy to rebalance away from imports to exports, and said that a weaker Pound would help achieve this.

Looking ahead to today, the most important economic indicator scheduled to be released from the Euro-Zone is the Industrial Production at 10:00 GMT. Analysts are forecasting this figure to be decrease from its previous reading. Traders will be paying close attention to today's announcement as a stronger than expected result may boost the EUR in the short-term. Traders are also advised to follow the European Central Bank (ECB) President Trichet's speech at 19:00 GMT. This speech is very important as it is very likely to Impact the EUR volatility.

JPY - Yen Declines as Stock Market Rallies
The Japanese Yen saw a bearish trading session yesterday, losing ground against most of its currency crosses, as a rise in most Asian and European stock prices reduced demand for currencies perceived as safe havens. The JPY fell against the EUR and closed at 1.3470, while the USD/JPY cross rose to around 89.80.

In addition, Japan's Core Machinery Orders, a key indicator that shows capital investment in the industrial sector, increased at a faster pace in September. Data released by the Cabinet Office showed that Core Machinery Orders rose a seasonally adjusted 10.5% in September, much faster than the 0.5% increase in the previous month, but it failed to provide strength to the Yen, as investors may be waiting for key data due to be released today to implement their trading strategies.

Crude Oil - Traders Await Crude Oil Inventories Report
Oil prices rose slightly on Wednesday as Organization of Petroleum Exporting Countries (OPEC) said that the world would consume more Crude Oil in 2010 than previously expected. OPEC revised its previous estimates for global Oil demand growth to 750,000 barrels per day, up 50,000 barrels a day from last month's estimate.

For the past several months, the weak Dollar has helped keep Oil prices high despite a slump in American consumption. Crude Oil prices tend to rise when the Dollar weakens and makes Oil cheaper for investors holding stronger currencies like the EUR. With regards top today's trading, traders should pay attention to the Crude Oil Inventories report, as it tends to have a large impact on Crude Oil's prices, especially in the short-term.

Technical News

EUR/USD
The cross now stands at the 1.4995 level, and there is expected to be much volatility for the pair today. The RSI of the weekly chart shows that the pair floats in the overbought territory, and that a bearish correction seems imminent. The MACD of the weekly chart also indicates that a bearish move may be looming. Going short with tight stops may turn out to pay off today.

GBP/USD
The pair experienced much bullish behavior yesterday, as it now stands at the 1.6561 mark. The pair is currently sinking lower down the weekly chart's Bollinger Bands, signaling that further bearishness for the pair is expected today. Similar behavior is occurring on the Bollinger Bands of the 4-hour chart. Going short on the pair seems to be the popular choice for today.

USD/JPY
The pair is currently sitting in the oversold territory on the RSI of the weekly chart, indicating that a bullish move for today is imminent. We see that the cross is rapidly rising on the Bollinger Bands of the 1-hour chart, which also supports the bullish move for today. Going long with tight stops may turn out to pay off in today's trading.

USD/CHF
The Slow Stochastic of the daily chart shows that a bullish cross has recently formed, indicating that an upward move for the pair for today is imminent. Also, the pair is currently rising higher through the Bollinger Bands of the weekly chart. It seems that going long on the pair as the trading get underway may turn out to bring big profits in the coming hours.

The Wild Card

Gold
Gold has experienced much volatility today, as it now stands at the $1120 mark. The RSI of the daily chart shows that the commodity is floating in the overbought territory, signaling that a bearish move may be underway for Gold today. Additionally, there seems to be a recent bearish cross that occurred on the Slow Stochastic of the daily chart. Going short with tight stops may turn out to pay off for forex traders today.

Published on  Thu, Nov 12 2009, 08:24 GMT

Forex Trading − The Dollar Up Slightly but Still Vulnerable

Wed, Nov 11 2009, 09:27 GMT
by Greg Holden

ForexYard

The U.S Dollar bounced off a 15-month low yesterday and the EUR dipped below $1.50 as investors paused to assess whether the global outlook justifies a recent rally in higher-yielding currencies and assets. The British Pound in particular struggled on Tuesday after Fitch ratings agency told Reuters that Britain was the major economy most at risk of losing its top AAA credit rating.

Economic News

USD - Dollar Recovers modestly off 15-mth Lows
The U.S Dollar edged up on Tuesday, reversing some of its recent losses but staying close to a 15-month low against a currency basket, as concerns over the UK's sovereign rating prompted some demand for the safe haven of the U.S. unit.

The Dollar may extend its advance from a 15-month low against the currencies of major U.S. trading partners on speculation waning demand for riskier assets will force investors to exit bets against the greenback. The USD gained 0.1% to $1.4980 per EUR yesterday. It touched $1.4626 on Nov. 3, the strongest level in almost a month.

Analysts said investors lacked any catalyst to take the U.S Dollar much lower after its recent sharp falls, but added that the trend towards Dollar weakness remained in place.
Expectations that U.S. interest rates will stay near zero well into next year have encouraged investors to use the U.S Dollar to fund carry trades in higher-yielding assets, particularly when equity markets rally.

EUR - The Euro Rises vs. Pound on Stocks
The EUR advanced against the British Pound as European stocks rebounded and Fitch Ratings said the U.K.'s credit rating is most at risk among top-rated nations. The EUR traded at 89.86 U.K. pence, from 89.49 pence yesterday. The single European currency, which fell against the Yen and the U.S Dollar after a report showed German investor confidence declined in November by more than economists estimated, erased losses as stocks rise.

The GBP dropped against all but one of the 16 major currencies, after a warning on the UK from ratings agency Fitch. The currency sold off sharply during the European session after David Riley, Fitch Ratings' co-head of global sovereign ratings, said in an interview Tuesday that the U.K. has the highest risk of major economies of losing its AAA status.

The Sterling slipped as far as $1.67 well below a 3 month high of $1.6844 reached on Monday. Despite the Pound's recent strength, and also the relatively positive rate decision, the British economy is still in trouble, and the bearish sentiment may hold on.

JPY - Yen Extends Gains vs. U.S Dollar
The Japanese Yen gained broadly after the orders for Japanese machinery report rose more than twice the pace economists estimated, signaling that a recovery in the world's second-largest economy may be sustained. The Yen climbed to 89.61 per Dollar from 89.76 before the report was published, building on the currency's 7% advance in the past three months.

Reports today showed the recovery in China, Japan's largest market, is gathering steam providing more support for the Yen. Also figuring in the foreign-exchange action, Japan's current-account surplus unexpectedly rose 0.2% in September compared to the same month last year, government data showed.

Crude Oil - Oil Trades near $79 After Falling on Stockpiles
Crude Oil prices briefly traded above $80 a barrel Tuesday, but turned lower as U.S. stocks fell and the Dollar strengthened, pressuring Dollar denominated Oil prices. Oil sank further in late trading, slipping below $79 a barrel, after the American Petroleum Institute said U.S. Crude Oil stocks rose more than anticipated.

Oil declined 0.5% yesterday after the American Petroleum Institute said Crude inventories increased 1.22 million barrels last week to 337.5 million. The U.S. government will report supply figures tomorrow. The weekly EIA inventory report will be released a day late on Thursday due to the U.S. Veteran's Day holiday.

Technical News

EUR/USD
A bearish cross is evident on the daily Slow Stochastic, as well as the 4 hour MACD with the pair's RSI floating in neutral territory. Going short on the day with tight stops may be advised.

GBP/USD
The pair is currently range trading with most indicators floating in neutral territory. The daily chart, however, shows a fresh bearish cross on the Slow Stochastic with the RSI floating in the over bought territory. Going short with tight stops may be advised for the day.

USD/JPY
A fresh bullish cross is evident on the hourly and 2 hour Slow Stochastic. A breach of the lower Bollinger Band is evident on the 2 hour chart. Furthermore, the RSI is floating in the oversold territory on the hourly and 4 hour charts. Going long on the day may be a good choice.

USD/CHF
A fresh bullish cross is forming on the hourly and 4 hour MACD. A bullish cross is also evident on the daily Slow Stochastic. Going long for today might be a good strategy.

The Wild Card

USD/MXN
After it recent bearish streak a correction may be imminent. A fresh bullish cross is evident on the hourly and 2 hour Slow Stochastic with the RSI floating in the oversold territory on the hourly and 4 hour charts. Forex traders have an opportunity to take advantage of the impending correction.

Published on  Wed, Nov 11 2009, 09:27 GMT

Forex Trading − Dollar to be the Driver of the Forex market Today

Tue, Nov 10 2009, 09:21 GMT
by Greg Holden

ForexYard

The Dollar is expected to be the driver of the forex market today. This is following yesterday's bearish session for the U.S. currency. Traders will be very mush focused on Federal Reserve Bank of Atlanta President and key Federal Reserve FOMC (Federal Open Market Committee) member Dennis Lockart's speech at 14:15 GMT, and the IBD/TIPP Economic Optimism release at 15:00 GMT. It is encouraged that you traders open big positions in the USD now.

Economic News

USD - Dollar Falls on Higher Risk Appetite
The Dollar fell dramatically on Monday against a basket of currencies on higher risk appetite. This included slipping to a 3-month low vs. the GBP. The greenback's weakness was due to forecasts that U.S. Interest Rates will be low for the foreseeable future. The other factor playing on optimism yesterday was the recent G20 Meeting in St. Andrews on the weekend in which it was discussed that the global stimulus will only be withdrawn when a solid economic recovery is maintained. This led to an equity market rally in the U.S, which therefore pushed traders to sell-off the USD as the trading day dragged on.

The Dollar finished trading against the GBP lower at the 1.6750 level. This was despite hitting a 3-month low of 1.6842. The USD also lost considerable ground against the European currency in yesterday's trading. The EUR/USD cross closed higher by 40 pips at the 1.4978 level. However, the pair did hit as high as 1.5018 on Monday. The USD/CAD lost considerable ground, as it sunk by 100 pips to the 1.0580 level. The greenback also went bearish against both the Yen and the Swiss Franc.

Looking ahead to today's trading, we have many exciting events. The most significant publication from the U.S. will be the IBD/TIPP Economic Optimism at 15:00 GMT. Also significant will be Federal Reserve Bank of Atlanta President and key Federal Reserve FOMC (Federal Open Market Committee) member Dennis Lockart's speech at 14:15 GMT. Traders will be very much focused on these 2 events, as they are set to be the primary determinants in the USD's strength on Tuesday. It is encouraged that you open big positions in the EUR/USD, AUD/USD, GBP/USD and USD/JPY crosses now.

EUR - Pound Climbs to 3-Month High vs. Dollar
The British Pound climbed to a 3-month high vs. the Dollar in Monday's trading. This came about as the British stock market rose for a 4th consecutive day. Both of these factors were driven by the weakness of the USD and the initial equity market rally on Wall Street. With regards to the EUR, it soared against the Dollar, due to Optimistic German industrial Production data on Monday. The strong EUR is a concern for the Euro-Zone, as it hurts the region's exports to trading partners, such as the U.S. and China.

The EUR/USD cross went bullish in yesterday's trading, as the pair rose by 40 pips to the 1.4978 level. The Pound rose to as high as the 1.6842 mark vs. the USD, as traders were very bullish on the Pound yesterday. However, the pair closed at around the 1.6750 level. Looking at the EUR/GBP cross, it rose only 7 pips, as both the British and Euro-Zone currencies were strong yesterday. It will be difficult for the Euro-Zone policy makers to weaken the EUR, due to choosing a tight monetary policy from the beginning of the financial crisis.

Tuesday's trading offers promising opportunities with regards to both the EUR and GBP's. The main releases that are set to be published from Britain are the Trade Balance at 09:30 GMT and the CB Leading Index at 10:00 GMT. From the Euro-Zone, the French Industrial Production will be published at 07:45 GMT and the German ZEW Economic Sentiment will be released at 10:00 GMT. These publications are set to be crucial in determining the strength of the GBP and EUR crosses, as mid-week trading approaches.

JPY - Yen Goes Volatile against the Majors
The Japanese Yen went extremely volatile against its major currency pairs yesterday. The Yen closed 15 pips higher vs. the USD at the 89.95 level. This was despite the pair trading significantly lower throughout much of Monday's trading. The GBP/JPY and EUR/JPY moved a lot in yesterday's trading. However, both of these pairs finished trading virtually unchanged from yesterday's opening.

Last night, the Japanese economy released some important data. This included both the Current Account and the M2 Money Stock. The former was worse than forecast, and the latter was better than forecast. Results such as these explain the mixed feelings of traders towards the JPY. The most important release that investors need to follow from Japan later today is the Core Machinery Orders at 23:50 GMT.

Crude Oil - Oil Jumps on Weak Dollar
Crude Oil climbed for a second consecutive day, as the Dollar continued to tumble. This behavior was initiated by the weekend's G20 meeting in which it was agreed that the financial stimulus will only be withdrawn once we see a solid recovery. Also, the U.S. signaled that Interest Rates will be kept low for the foreseeable future. All this led to a U.S. equity rally, and traders dropped the USD and bought-up Crude Oil.

Crude finally closed higher at $79.08, as investors attempted to use the black gold as a hedge against inflation. This comes as the Dollar continues to show much weakness. As today's trading commences, Oil will continue to be the most traded commodity. In addition, Crude prices will continue to be highly correlated with the USD. Therefore, open your positions in Crude whilst trading volume is still low.

Technical News

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

GBP/USD
The bullish trend is loosing its steam and the pair seems to consolidate around the 1.6620 level. The daily chart's Slow Stochastic is showing a bearish cross suggesting that downwards correction might take place in the nearest time frame. Going short with tight stops might be a wise choice.

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 4-hour chart is showing mixed signals with its Slow Stochastic fluctuating at the neutral territory. However, a bullish cross forming on the daily chart's Slow Stochastic implies that upwards correction might take place in the nearest time frame. Going long with tight stops appears to be preferable strategy.

The Wild Card

Gold
Gold sustained upward movement has finally pushed its price into the over-bought territory on the daily chart's RSI. Not only that, but there actually appears to be a bearish cross on the Slow Stochastic pointing to an imminent downward correction. Forex traders have the opportunity to wait for the downward breach on the hourlies and go short in order to ride out the impending wave.

Published on  Tue, Nov 10 2009, 09:21 GMT

Forex Trading − Gold Reaches $1,100 an Ounce!

Mon, Nov 9 2009, 10:48 GMT
by Greg Holden

ForexYard

While the Dollar drops against the major currencies due to the disappointing U.S employment data from Friday, the strongest trend in the market appears to be the bullish gold. Gold continues to break new record highs on a daily basis, and has now reached over $1,100 on ounce. Can it reach higher?

Economic News

USD - Dollar Slides on Negative Employment Data
The Dollar saw an extremely bearish session during last week's trading. The Dollar dropped around 200 pips against the Euro, and the EUR/USD pair rose to the 1.4900 level. The Dollar also dropped close to 300 pips against the Pound.

Last week's trading has started with a rather bullish sign for the American currency. The Dollar strengthened on all fronts following a few positive publications on Monday. The most affective publication appears to be the Pending Home Sales, which showed that the change in number of homes under contract to be sold but still awaiting the closing transactions, rose by 6.1% during September, beating expatiations for a 0.2% rise. Due to the fact that the housing sector was the catalyst for the crisis, positive housing data tend to support the Dollar.
However, close to the weekend the Dollar saw a sharp downtrend, which came as a result of the disappointing employment data. The Non-Farm Employment Change report showed that the U.S economy lost 190,000 jobs in October, failing to reach expectations for a 173,000 loss. This has led the Unemployment Rate to reach 10.2%, a 26-year low. The total number of unemployed people in the U.S rose to 15.7 million.

As for the week ahead, many interesting data is expected from the U.S economy. On Thursday, the weekly Unemployment Claims will be published. Considering the poor employment data from last week, this report will become even more important. Traders are also advised to follow the U.S Trade Balance on Friday. This report measures the difference in value between imported and exported goods and services during September. It seems that unless positive figures will be published for both these reports, the Dollar might continue to weaken.

EUR - Euro Rises against the Majors
The Euro rose against most of the major currencies during last week's trading session. The Euro's most notable appreciation was against the Dollar as the pair rose to the 1.4900 level. The Euro also saw a bullish trend against the Yen, and currently the EUR/JPY pair is traded at the 134.0 level.

Two main reasons have led to the Euro's bullish trend last week. The first reason was a batch of positive economic data, which came from the Euro-Zone's leading nations. The German Factory Orders, which measures the change in the total value of new purchase orders placed with manufacturers, rose by 0.9% during September. This was the fifth consecutive positive figure for this report. In addition, the French Budget Balance and the Trade Balance also delivered better-than-expected results. This has created a sentiment that the European economies are truly recovering, and as a result strengthened the Euro.
The second reason for the Euro's uptrend was the disappointed data from the U.S economy. The poor employment condition in the U.S turns many investors to look for other investments than the Dollar, and this naturally strengthens the Euro.

Looking ahead for this week, a batch of data is expected from the Euro-Zone. Traders are advised to follow the major publications from the German economy, as this is the strongest economy in the Euro-Zone, and tend to have a significant impact on the Euro. The German Economic Sentiment is scheduled for Tuesday. Another result above 56.0 for this survey is likely to support the Euro. In addition, the German Preliminary Gross Domestic Product is expected on Friday. This is the broadest measure of economic activity and the primary gauge of the economy's health, and thus tends to have an immense impact on the market.

JPY - Yen Sees Mixed Results against the Majors
The Yen saw a volatile session against the major currencies during last week's trading. The trading was characterized with many ups and downs and was concluded in a downtrend for the Japanese currency. This was mostly noted against the Pound, as the GBP/JPY pair rose to the 151.30 level.

The main publications from the Japanese economy didn't seem to have a large impact on the Yen. The Average Cash Earnings dropped by 1.6%, beating expectations for a 2.0% drop. This continues to show that the Japanese economy is yet to recover. The Leading Indicators report, which is a composite of 12 economic indicators and is designed to predict the direction of the Japanese economy, reached expectations for a 86.4% result. However, this deports had little affect on the Yen, as it is once again proven that what impacts the Yen mostly are the publications from the U.S economy. Because the Japanese economy relies on American consumption, it is quite clear that negative U.S data will have a negative affect on the Japanese economy. As a result, the Yen weakened due to the poor employment data from the U.S.

As for this week, the most impacting data from the Japanese economy appears to be the Core Machinery Orders report, schedueled for Tuesday. This is a leading indicator of production, and thus tends to have a large impact on the Yen. In addition, traders should follow the leading publications from the U.S economy, as they have proven to have a sustain affect on the Yen.

Oil - Oil Rises Due to Hurricane Ida Concerns
Crude Oil underwent a very volatile session last week. Crude oil began last week's session with a rising trend, and a barrel of oil was traded for $81.0. However, a change in trend took place then, and crude oil dropped to $77.0 a barrel.

Currently, as storms are shutting export terminals and production in Mexico and Hurricane Ida is entering the southern Gulf, oil prices are rising once again, and a barrel of crude oil is now traded for $78.50. Hurricane Ida is currently expected to weaken as it crosses production regions of the Gulf of Mexico. Nevertheless, traders should keep an eye on the developments of this issue, as it is likely to impact the prices of oil throughout this week.

In addition, on Thursday, the U.S Crude Oil Inventories data will be released. This indicator tends to have an immediate impact on crude oil, and traders should follow its result. Traders should also follow the leading publications from the U.S as they have proven to have a large impact on crude oil's value.

Technical News

EUR/USD
There is an impending bearish cross forming on the daily chart's Slow Stochastic indicating a bearish correction might take place in the nearest future. The downward direction on the hourly chart's RSI also supports this notion. When the downward breach occurs, going short with tight stops appears to be preferable strategy.

GBP/USD
The GBP/USD cross has experienced a bullish trend for the past week. However, it seems that this trend may be coming to an end. The RSI of the daily chart shows the pair floating in the overbought territory, indicating that a downward correction will happen anytime soon. Going short with tight stops might be a wise choice.

USD/JPY
The daily chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, there is a fresh bearish cross forming on the 4-hour chart's Slow Stochastic indicating a bearish correction might take place in the nearest future. Going short might be a wise choice.

USD/CHF
The pair has recorded much bearish 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 bullish reversal is imminent. An upward trend today is also supported by the hourly chart's Slow Stochastic. Going long with tight stops may turn out to pay off today.

The Wild Card

Gold
Gold prices rose significantly in the last week and peaked at $1103.25 for an ounce. However, the 4-hour chart's RSI is floating in an overbought territory 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.

Published on  Mon, Nov 9 2009, 10:48 GMT

Forex Trading − Forex Market Awaits Non−Farm Employment Change Figures

Fri, Nov 6 2009, 09:16 GMT
by Greg Holden

ForexYard

Today, traders should pay close attention to the release of the U.S. Non-Farm Employment Change report. This indicator always produces extreme market volatility in the major currency pairs. Traders may find good opportunities to enter the market following this vital announcement at 13:30 GMT.

Economic News

USD - Non-Farm Employment Change on Tap
The Dollar was little changed against most of its major counterparts during yesterday's trading session, a day ahead of a key government jobs report that will shed light on the health of the U.S. economy. By yesterday's close, the USD fell slightly against the EUR, pushing the oft-traded currency pair to 1.4873. The Dollar experienced similar behavior against the GBP and closed at 1.6604. The USD did see some bullishness as well as it gained over 50 points against the JPY and closed at 90.67.

The greenback fell in the prior session after the Federal Reserve kept Interest Rates at record lows and signaled they were likely to stay there for some time to come. It also lost more ground on Thursday after European Central Bank President Jean-Claude Trichet sounded an optimistic note about a 2010 recovery and hinted at a slow-motion exit strategy for some emergency stimulus measures.

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 await key data to be released today, in order to implement their trading strategies.

Today's Non- Farm Employment Change release is expected to have a strong impact on the U.S currency. Any result could be a surprise, and the Dollar could go either way as a result. In any case, traders are unsure how the market will react to today's data. A weak report could feed risk aversion, boost Treasuries and actually aid the U.S Dollar. Then again, a better than expected result might be seen as a sign of relative U.S. economic strength, and lift the Dollar. Or it could also encourage risk-taking and aid commodities and higher-yielding currencies at the Dollar's expense.

EUR - EUR Rises on ECB President Trichet's Comments
The EUR experienced a bullish trading session yesterday, as it appreciated against most of its major currency pairs. The 16-nation currency extended gains versus the Japanese Yen during yesterday trading session, to trade above 1.3495 amid a broad sell-off in the JPY. The European currency finished around 100 pips higher against the CHF to finish yesterday's trading session at the 151.15 level.

The EUR got a boost after European Central Bank President Jean-Claude Trichet presented an optimistic tone on Euro-Zone growth, saying the economy will recover next year.

Both the ECB and the Bank of England left Interest Rates unchanged on Thursday. The decisions came after the U.S. Federal Reserve on Wednesday held borrowing costs near zero percent, and kept its commitment to low rates for an extended period.

Looking ahead to today, the most important financial indicator scheduled to be released from Europe is the German Factory Orders. Analysts are forecasting this figure to slightly decrease from its previous reading. Traders will be paying close attention to today's announcement as a stronger than expected result may continue to bolster the EUR in the short-term.

JPY - JPY Free Fall Continues
The Japanese Yen saw a bearish trading session yesterday, losing ground against most of its currency crosses. The JPY fell against the EUR and closed at 1.3495, while the GBP/JPY cross rose to around 155.50.

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 Non- Farm Employment Change at 13:30 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.

Crude Oil - Crude Oil Stabilizes Near $80 a Barrel
Oil fell to below $80 a barrel on Thursday, as doubts about a recovery in Oil demand outweighed positive economic signals. Oil dropped to an intra-day low of $79.30 a barrel before rebounding to the settlement level of 79.90, which was little changed compared with the previous session.

As for today, traders should pay close attention to the U.S Non- Farm Employment Change report, as it has tended to have a large impact on Crude Oil's prices recently, especially for the short-term.

Technical News

EUR/USD
The pair is currently going through a 2-day winning streak, and it currently stands at the 1.4875 level. The RSI of the 4-hour chart shows the cross floating in the overbought territory, signaling that a downward correction is imminent. Going short with tight stops may turn out to pay off today.

GBP/USD
The GBP/USD cross has gone up by about 250 pips since Tuesday and this trend may continue, as the pair continues to rise higher on the chart 1-hour Bollinger bands. However, the MACD of the 4-hpour chart indicates that the cross has run out of steam, and that a bearish correction is imminent. Going short at an early stage seems to be the right choice for Friday's trading.

USD/JPY
The technical indicators for this pair seem to be showing misleading signals. On the one hand, the RSI of the weekly chart shows the pair sitting in the oversold territory. On the other hand, the recent cross above the 80 mark on the Slow Stochastic of the 4-hour chart indicates that a bearish correction may be imminent. Entering the pair when the signals are clearer seems to be the right choice today.

USD/CHF
The USD/CHF cross has been range trading between the 1.0125 and 1.0265 levels over the past week. The MACD of the weekly mark supports a downward move for today. Going short with tight stops could bring you big returns today, as this week's trading comes to and end.

The Wild Card

Crude Oil
Crude Oil has gone dramatically higher in the past week, and currently stands at the $80.12 mark. The recent bearish cross on the Slow Stochastic of the weekly chart indicates that a bearish correction is imminent today. Entering the pair when the downward breach occurs may turn out to pay off for forex traders today.

Published on  Fri, Nov 6 2009, 09:16 GMT

Forex Trading − Market Awaits BOE and ECB Statements

Wed, Nov 4 2009, 09:53 GMT
by Greg Holden

ForexYard

The Bank of England's (BOE) rate statement is due at 12:00 GMT while the European Central Bank (ECB) press conference is expected at 13:30 GMT. While both banks are expected to keep their interest rates at their current level, the statements should provide an insight to the current economic conditions as well as economic outlook for the near future. The BOE is expected to increase its quantitative easing program.

Economic News

USD - USD Down Following Fed Statement
The Dollar traded near its lowest level in a week against the EUR after the Federal Reserve kept borrowing costs near zero. The Federal Reserve reiterated its intention to keep interest rates “exceptionally low” for “an extended period” as long as inflation expectations are stable and unemployment continues to rise. Until the Fed starts signaling interest rate increases, investors will continue to be encouraged to sell the Dollar and buy higher-yielding assets

The Dollar traded at $1.4874 against the EUR in today's early trading from $1.4861 in New York yesterday, when it touched $1.4909, the weakest level since Oct. 27. The Dollar traded at 90.82 yen from 90.72 Yen Wednesday.

The USD is expected to extend declines against its major counterparts ahead of Friday's Non Farm Employment report forecasted to show U.S. employers cut fewer jobs in October than in September, damping demand for the U.S. currency as a refuge as economic sentiment continues to improve. The unemployment rate may rise to 9.9%, from 9.8%.

Looking ahead to today, the Dollar's movements will likely be affected by the Central Bank statements from the U.K and Euro-Zone, however, the release of the Unemployment Claims at 13:30 GMT will likely have an affect on Dollar sentiment as well.

EUR - Pound Gains on Optimistic Services PMI
The EUR gained against 14 of its 16 major counterparts as the Economy Ministry in Berlin is expected to report Friday that German factory orders rose 1% in September after gaining 1.4% in August.

The British Pound gained 0.9% on the day. The Pound gained on both the Dollar and the EUR, after a survey of purchasing managers indicated the U.K.'s services PMI saw activity rise at its fastest pace in more than two years. The Bank of England is expected to increase the amount of debt it will buy from the market in today's meeting.

The EUR rose to $1.4871 from $1.4712. The EUR jumped to 134.68 Yen from 132.91 Yen. The U.K. Pound strengthened to $1.6565 from $1.6412.

A heavy news day is expected from Europe today. The bank of England statement is due at 12:00 GMT and The European Central Bank is slated to gives its latest policy update at 13:30 GMT. The ECB is expected to keep rates at 1%. Furthermore, the GBP Manufacturing Production is expected to be released at 9:00 GMT.

JPY - Yen Gains ahead of U.S Unemployment Rate Report
The Yen rose against the EUR and Dollar in today's early trading as Japan's stocks declined amid concerns the global economic recovery will be slow, boosting demand for the Japanese currency as a refuge. The Yen advanced against all 16 major counterparts ahead a report Friday forecasted to show the U.S. jobless rate climbed last month. The Yen rose to 134.52 per EUR at 9:54 a.m. in Tokyo from 134.85 in New York yesterday. It climbed to 90.59 per Dollar from 90.72.

OIL - Oil Rises Above $80 a barrel
Crude futures settled above $80 a barrel Wednesday after a surprise decline in oil inventories and the Dollar dropped toward its low for the year against the EUR. Light, sweet crude for December delivery settled up 80 cents, or 1%, higher at $80.40 a barrel on the New York Mercantile Exchange.

The U.S. Energy Information Administration reported Oil inventories dropped by 3.9 million barrels last week, while analysts unanimously expected a rise. Oil and fuel inventories have declined for four consecutive weeks supporting the rally in Oil prices. Oil got another boost after the Federal Reserve said it would maintain its ultra-low interest rate policy, which is seen as likely to keep pressure on the Dollar. Dollar denominated Oil tends to rise when the dollar weakens, since it becomes cheaper.

Technical News

EUR/USD
This pair could be in for further bullish strength in the near term. A correction during the Asian trading hours has weakened the pair. As such, a bullish cross has formed on the hourly chart's Slow Stochastic Oscillator. Traders may want to be long to catch the up tick.

GBP/USD
Yesterday the pair once again tested but failed to break the significant 1.6600 resistance line. Today the pair has continued the appreciation for the third day. Traders who see the importance of this price level may want to set an entry limit sell order at this mark to profit if the pair reaches this price level and then reverses.

USD/JPY
The 4-hour chart shows the pair began to drop from its upper Bollinger Band, only to stall and turn up at average line. We may expect this pair to rise back up towards its upper Bollinger Band. Traders may want to go long with a stop set near the 90.90 level.

USD/CHF
Significant depreciation from the last day and a half left the pair oversold. This is shown by the bullish cross that has appeared on the 4-hour chart. The pair may be due for some appreciation. Going long could be the right choice.

The Wild Card

Gold
The price of the commodity has soared to a new record, touching on a high at $1097.05 yesterday. This has left the commodity potentially overbought. A bearish cross has formed on the daily chart's Slow Stochastic Oscillator, signaling a potential drop in the price. Forex and commodity traders may have an opportunity to sell gold at the peak of its appreciation today.

Published on  Wed, Nov 4 2009, 09:53 GMT

Forex Trading − Dollar Trades Higher as Fed Rate Announcement Awaited

Wed, Nov 4 2009, 09:53 GMT
by Greg Holden

ForexYard

The Federal Reserve is expected to keep its benchmark Interest Rate unchanged near zero today, as traders get ready for a busy news cycle. Investors will focus on the interest rate outlook, but many analysts say the Fed is unlikely to change the wording of its pledge to keep rates low for an extended period. This may have the result of stabilizing USD trading, or potentially driving the world's primary currency to new extremes. Will the USD experience a reversal from yesterday's bullishness?

Economic News

USD - Dollar Advances vs. EUR ahead of Fed Statement
The U.S. Dollar clung to small gains versus the EUR Tuesday, but pared earlier gains as traders waded through mixed signals on the health of the economy and the Federal Reserve started its 2 day policy meeting.

The Dollar climbed to a 1-month high against the EUR as concerns about the global banking sector reignited safe-haven demand for the greenback. The Dollar climbed against its major rivals as investors retreated from risk assets on jitters over banks and braced for central bank meetings in the United States, the Euro-Zone and the UK.

Traders remained wary ahead of this week's heavy news cycle; the U.S. Federal Reserve started its 2 day policy meeting on Tuesday and the European Central Bank (ECB) and the Bank of England (BOE) will also hold policy meetings later in the week.

The overwhelming consensus is that the Fed will hold the federal funds rate steady at near-zero, where the Fed's target has been since last December. Investors will be paying close attention, however, to the wording of the Fed's statement for any clue as to when the central bank would begin pushing Interest Rates higher. Once American markets open for the day, traders should expect a lot of volatility.

EUR - Sterling Falls Sharply on UK Banking Sector Concerns
The EUR reversed its gains against the U.S. Dollar and the Yen Tuesday, when concerns over the banking sector boosted the greenback, which tends to gain when investors shed risk assets.

The 16-nation currency traded at $1.4760, from $1.4775 yesterday in New York, after rising to $1.4811 earlier. It was also at 132.95 yen, from 133.32 yesterday after strengthening to 133.98 earlier. Sentiment on the financial sector in Europe was weak and that pressured the EUR and the Pound earlier and contributed to the recent strength of the U.S dollar, analysts have said.

The Sterling tumbled to a 1-week low against the U.S. Dollar after the UK Treasury announced a shake-up of British banks, which raised concerns about the financial sector. The British Pound declined for a 2nd day against the EUR and slid 0.1% versus the Dollar at $1.6398 on speculation the BOE will extend its asset-buying program this week.

JPY - Yen Hits Session Low vs. USD
The Japanese yen hit a session low in trading on Tuesday as U.S. stocks cut losses, reducing safe-haven demand for the Japanese currency. The Yen weakened to 90.46 per Dollar from 90.21.

The Yen climbed earlier on reduced demand for higher-yielding assets after the 101-year-old commercial lender CIT Group Inc. listed $71 billion in assets and $65 billion in debt in its Chapter 11 filing in U.S. Bankruptcy Court in Manhattan recently. Low interest rates in the U.S. and the bankruptcy filing of CIT Group are among the reasons Japan's currency is rising against the USD, analysts have stated.

The JPY fell against the EUR on speculation the global economic recovery will boost demand for higher-yielding assets. Japan's currency dropped to 133.89 versus the EUR from 133.32 yesterday.

Crude Oil - Crude Oil rises 2% Ahead of U.S. Factory Data
Oil prices rose above $79 a barrel on Tuesday after data showed U.S. factory orders in September expanded at a quicker pace than expected, signaling potential for more fuel demand in the world's biggest energy consumer.

Crude prices had fallen sharply earlier in the day as the U.S. Dollar firmed to a 1-month high against other currencies and equity markets declined. A firming dollar and falling stock prices are typically signs of investors shunning riskier assets, including commodities.

Oil traders were awaiting weekly U.S. oil inventory data. Analysts expect that U.S. crude inventories rose by 1.4 million barrels last week, but stocks of distillates, like heating oil and diesel, were expected to fall by 1 million barrels, according to experts.

Technical News

EUR/USD
This pair appears to be continuing to trade within a minor bearish channel. Currently at a peak within this channel, it now appears that there are some indications of an impending downward correction. The pair is currently over-bought on the hourly RSI and the daily MACD shows a bearish cross. Going short may be a wise tactic today.

GBP/USD
This pair has neared the end of a consolidation trend on the daily chart and a tightening of the Bollinger Bands is beginning to show. As this trend continues, traders will likely see very few indications of a clear direction, but a sharp movement may be on the way in the next week and traders should be on the lookout. Waiting for clearer signals may be a wise move today.

USD/JPY
With many indicators floating in neutral territory, this pair appears to be floating within a very tight range. With a fresh bullish cross on the 4-hour MACD, there is a possibility for an impending upward movement. Forex traders should try to capture profits on this pair today by buying on lows and selling on highs within its current range.

USD/CHF
This paid continues to show modest bullishness, and few indications that this will stop any time soon. The hourly RSI shows this pair floating near the over-sold border, which could suggest a level of upward pressure. The weekly Momentum oscillator also shows an upward turn, hinting at the quickening pace of the upward movement. Going long appears to be today's preferable strategy.

The Wild Card

USD/TRY
This pair is giving off some decent indications of downward movement. The pair has been trading within a tightening consolidation trend since yesterday morning and now appears to have reached the tipping point. Many indicators show neutrality, but the longer-term momentum appears to be down. Forex traders can see a fresh bearish cross on both the 4-hour MACD and daily Slow Stochastic, and use this information to anticipate the strong bearish movement which will likely occur today in order to capture great profits!

Published on  Wed, Nov 4 2009, 09:52 GMT

Forex Trading − U.S. Factory Orders to Dominate USD Trading

Tue, Nov 3 2009, 09:23 GMT
by Greg Holden

ForexYard

The USD is likely to move on the U.S. Factory Orders publication today at 15:00 GMT. The reason why this release is so important is due to Monday's releases that showed the U.S. economy is on a rapid road to recovery. Therefore, a similar result today could lead to very high volatility in the forex market, and a possible mass sell-off of the Dollar. In order to make some decent profits today, you should open large positions in the EUR/USD, GBP/USD and USD/JPY pairs now.

Economic News

USD - Dollar Slides on Global Economic Recovery
The U.S. Dollar slid against the EUR and CHF on Monday, as positive manufacturing data and surprising earnings from Ford pushed confidence back into the forex market. The ISM Manufacturing PMI rose to 55.7 vs. the 53.1 forecast. Moreover, both U.S.
Pending Homes Sales and Construction Spending rose far higher than many analysts expected. On top of this, Ford announced a surprising, but optimistic $997 million 3rd quarter profit. All of these factors helped U.S. equities rise, which in turn resulted in the rise in value of the EUR/USD pair.

The EUR/USD cross rose by 40 pips to the 1.4800 level. This was despite being as high as the 1.4840 mark in Monday's trading. The USD/CHF fell to as low as the 1.0165 mark yesterday, as traders continued to ditch the USD for the Swiss currency. This is despite the USD making inroads into the CHF last week. However, with regards to the GBP/USD pair, the greenback made significant gains. This was largely owed to the stock market rally in Britain on Monday, which was initiated by both the U.S. economic news and the optimistic British manufacturing data.

Looking ahead to the day ahead is the U.S. Factory Orders at 15:00 GMT, which is set to be the most important indicator of American economic health. Therefore, it is highly advised that you follow top economic news releases from the leading industrialized nations. In addition, it is a wise choice to follow any surprise speeches from President Obama, as he is set to continue to have important speeches relating to the economy. Therefore, any such speech is likely to lead to very high volatility in the forex market. Consequently, it is recommended that you open your positions in the USD crosses as soon as possible.

EUR - Pound Plummets on Optimistic Manufacturing Data
The Pound plummeted against its major currency pairs yesterday, as the British economy published the best manufacturing data in 2 years. The British Manufacturing PMI rose to 53.7 in October from 49.9 in September. This is far better than the forecast of 53.1. This was great news compared to the 0.4% GDP decline in the
3rd quarter. Top economists say that this result of this indicates that the British economy may rise out of recession in the 4th quarter of 2009. The GBP's losses were exasperated, as British equities rallied due to both data from both Britain and the U.S.

The GBP/USD pair fell by about 60 pips to the 1.6390 level. The EUR/GBP pair rose by over 50 pips to the 0.9024 level. This came about as the Euro-Zone data wasn't as good as Britain's. Additionally, equities markets across the Euro-Zone failed to rally like their British and American counterparts. Thus the result was traders dropping both the USD and GBP, and buying up of higher-yielding assets, such as the
EUR, Crude Oil and Gold. With regards to the EUR/USD pair, it finished trading at about the 1.4800 level, the second consecutive day gain for the pair.

Today, there is some very important news that is set to come out of Britain and the Euro-Zone. From Britain, there will be the Construction PMI publication at 09:30 GMT. A better than forecast result for this release could help the British Pound in today's trading, as investors look to make some big profits. From the Euro-Zone, there will be the speech by Bundesbank President Axel Weber at 17:00 GMT. This speech is crucial, as Weber is also a member of the ECB (European Central Bank) Governing
Council. Therefore, traders will be looking for some clues about future Interest Rates. For that reason, volatility will be very high surrounding this event.

JPY - JPY Loses Ground on All Fronts
The Japanese currency lost ground on all front on Monday, as Japan's bank holiday left the JPY on the backburner. The result of this was an extremely bearish trading session. The JPY lost much strength against virtually all of its currency pairs. The USD/JPY cross rose by 25 pips to the 90.31 level. The EUR/JPY cross soared by 70 pips to the 133.65 level. The Yen also lost much ground against the NZD.

Tuesday's trading offers many important opportunities with regards to the JPY's key crosses. There is much crucial data later today form the U.S., Britain and the Euro-Zone. Therefore, the Yen will be on the backburner again for much of today. However, at 23:50 GMT the Japanese Monetary Base data will be published, which is vital as it is a key measure of Japanese economic health. As a result, positive results could help the JPY in late trading today.

Crude Oil - Oil climbs on Optimistic U.S. Data
Crude Oil made significant gains on Monday, as much positive data was released from the U.S. economy. The most important of these was both manufacturing and housing data. This resulted in a U.S. stock market rally and a selling-off of the greenback. The effect of this was a rally in Crude Oil, which lasted throughout much of yesterday's trading. Crude closed higher by around $0.80 at the $78.28 level.

Today offers much important opportunities for Crude Oil traders. There is the opportunity to make big profits, as traders seek o take advantage of the optimism on the back of a global economic recovery, led by the U.S. A fall in the USD today could further help Crude Oil prices yet again today. For now, it is advised that you open your positions in Oil, whilst volatility is still low.

Technical News

EUR/USD
Narrow range trading continues as the pair did not make a significant move in either direction, and is currently traded around the 1.4790 level. The weekly chart's Slow Stochastic is showing a bearish cross suggesting that downwards correction might take place in the nearest time frame. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

GBP/USD
The typical range trading on the hourly chart continues. The daily chart RSI is floating in neutral territory. 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 might be the right strategy today.

USD/JPY
The daily chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, the weekly Chart's RSI is already floating in the oversold territory indicating that 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.

USD/CHF
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.

The Wild Card

Gold
Gold prices rose significantly yesterday and peaked at $1063.45 for an ounce. However, the daily chart's RSI is floating in an overbought territory 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.

Published on  Tue, Nov 3 2009, 09:23 GMT

Forex Trading − Interests Rates Announcements Expected from the U.S, U.K and Euro−Zone this Week

Mon, Nov 2 2009, 13:41 GMT
by Greg Holden

ForexYard

After a week of greenback recovering this week promises to provide high volatility. Interest Rate announcements are expected from the U.S, the Euro-Zone and the U.K. In addition, the Non-Farm Employment Change for October will be released on Friday. In short, sharp fluctuations are expected, with plenty of opportunities to make large profits.

Economic News

USD - A Week Packed With Economical Data Expected
During last week's session the Dollar managed to recover against most of the major currencies. The Dollar saw a 300 pips rise against the Euro, and the EUR/USD pair is trade near the 1.47 level. However, the Dollar continued to weaken against the Japanese yen.

The Dollar's recovery appears to be mainly psychologically. Last week did not provide sustain data showing that should have supported the Dollar. It seems to be that the fact that the EUR/USD reached the 1.50 level, a very poor level for the Dollar, the market promptly corrected this situation with a bullish trend for the Dollar.
Last week's data mainly showed that the U.S economy is yet to be seen as a recovered economy. The housing sector, the main reason for the recession, is far from returning to levels seen before the crisis began. The employment condition continues to deteriorate, and the weekly Unemployment Claims rises every week.

Nevertheless, the upcoming week has the potential to create mayhem in the market, as various extremely-impacting news publications are expected from the U.S economy. The main data that traders should focus on is likely to be the Federal Funds Rate and the Non-Farm Employment Change. The Federal Funds Rate is in fact the U.S interest rates announcement for November. Currently, analysts expect the FED to leave the rates at their low level, lower than 0.25%. If the FED will surprise and hike rates, it is likely to boost the Dollar. The Non-Farm Employment Change measures the change in the number of employed people during October, excluding the farming industry. Analysts forecast the 173,000 have lost their jobs during October, and that could be the best figure in 14-months. This also has the potential to boost the Dollar.

EUR - European Interest Rates Announcement Expected This Week
The Euro dropped against all the major currencies during last week's trading session. The Euro lost 300 pips against the Dollar, 300 pips against the Pound and over 600 pips against the Yen.

Two main reasons have led to the Euro's downfall last week. One, the economic data from the Euro-Zone has failed to reach analysts' expectations. The German Consumer Climate, a leading indicator of consumer spending, saw a 4.0 end result, failing to reach expectations for a 4.5 result, falling for the first time in 14 months. The German Retail Sales dropped by 0.5% in September, also showing that the German economy still experiencing difficulties to fully recover. Considering that Germany contains the strongest and biggest economy in the Euro-Zone, the negative data has weakened the Euro. The second reason for the Euro's downtrend seems to be the recovering Dollar. Furthermore, it appears that if the Dollar's correction will proceed, the Euro might continue to weaken.

Looking ahead to the following week, the main data expected from the Euro-Zone will be the Minimum Bid Rate scheduled for Thursday. The Minimum Bid Rate is the Euro-Zone's interest rates announcement for November. The Minimum Bid Rate currently stands on 1.00% and analysts expect it to stay this way. However, if the European Central Bank will surprise and hike rates, it will have the potential to reverse the Euro's bearish trend, and to lift the Euro back up. Traders should also follow the British interest rates announcement whish is due at the same day.

JPY - Yen Strengthens Against the Majors
The Yen saw an extremely bullish session during last week's trading. The Yen rose over 600 pips against the Euro and over 500 pips against the Pound. The Yen even saw a rising trend against the recovering Dollar, and the USD\JPY pair dropped to the 89.20 level.

The Yen's bullish correction appears to be a direct result to the positive data published from the Japanese economy. The Japanese Unemployment Rate dropped to 5.3%, its lowest rate in 4 months. The Japanese Preliminary Industrial Production rose by 1.4% in September, beating expectations for a 1.1% rise. This means that the inflation-adjusted value of output produced by manufacturers rose by 1.4% in September as opposed to August. The Yen strengthened despite the fact that the Bank of Japan (BOJ) left the Japanese Interest Rates at 0.10%, the lowest level in the industrial world.

As for the week ahead, many interesting news publications are expected from the Japanese economy. Traders should focus on two main events: the BOJ Governor Shirawaka speech on Wednesday and the Monetary Policy Meeting Minutes. On these events the BOJ will most likely reveal its future plans for the Japanese economy, and this is likely to impact the Yen.

Oil - Crude Oil Drops on Global Recovery Concerns
Crude Oil saw an extremely volatile session last week. Crude oil was traded between 77$ to $82 a barrel during the week, showing sharp ups and downs. In conclusion, crude oil lost a little portion of its value, as it is now traded for $77 a barrel.

Crude oil dropped on concerns that global recovery may take longer than expected, and thus demand for energy might be damaged as a result. The Negative data which was published during the previous week, especially from the American and the German economies, has dented confidence for a swift global recovery. In addition, the strengthening Dollar also contributed to the oil's downtrend. Crude oil, just like other commodities such as gold, is traded in Dollars. When the Dollar appreciates, oil tend to drop and vice versa

As for this week, the leading data from the U.S. and the Euro-Zone are likely to influence on oil the most. The main publications that traders should follow are the interest rates announcements from the U.S, the Euro-Zone and Britain and of course the U.S. Non-Farm Employment Change. A surprising release from any of these publications is likely to have an immediate impact on crude oil's value.

Technical News

EUR/USD
There appears to be a bullish cross forming on the 4H chart's Slow Stochastic, indicating that an upward correction is expected in the near future. However, almost all other oscillators are stuck in neutral territory, signaling that this pair may be less volatile than expected. Going long with tight stops might be the right strategy today

GBP/USD
It seems that the Cable has limited its bullish correction after peaking at the 1.66 price level. And now, a bearish cross on the hourly chart's Slow Stochastic indicates that the general downtrend might extend. Going short seems to be the preferable choice today

USD/JPY
The typical range trading on the 4 hour chart continues. Both the hourly RSI and Slow Stochastic are floating in neutral territory. On the contrary, the daily chart is showing a moderate bearish momentum with diminishing strength. Forex traders are advised to wait for a clearer signal before entering the market with this pair

USD/CHF
There is a very distinct bearish formation continues on the hourly level, as the pair is now floating in its lower section. In addition, all oscillators on the daily chart are pointing down, suggesting that the downward move might extend. Going short might be the right strategy today.

The Wild Card

GBP/AUD
There is still a bearish configuration on the 4H chart, indicating that the momentum is still down. The RSI is floating around 50, which supports the notion that there is still room to run. In the shorter time frame there is a bullish cross forming on the hourleis Slow Stochastic indicates that there might be a small bullish correction before the bearish move resumes. Forex traders can maximize profits by selling on highs and taking advantage of a currently bearish trend

Published on  Mon, Nov 2 2009, 13:41 GMT

Forex Trading − Dollar to be at the Forefront of Forex Trading Today

Fri, Oct 30 2009, 08:03 GMT
by Greg Holden

ForexYard

The Dollar is set to be at the forefront of forex trading today. This is after The USD fell against its major counterparts on Thursday, after a string of gains in recent trading sessions. Yesterday's behavior was the results of the confirmation that the U.S. economy returned to growth in the 3rd quarter, boosting investor optimism, leading to the equity market to rally, and curbing the need for the greenback's relative safety.

Economic News

USD - Dollar Slides on Better than Expected U.S. GDP
The USD headed for a 4th monthly drop against the EUR, its longest stretch since 2004, as America's return to growth renewed optimism that a global recovery will quicken, aiding demand for higher-yielding assets. The Dollar weakened as much as 1% to $1.4859 per EUR in the biggest intraday drop since September 8.

The U.S Dollar rose against the EUR in the previous three sessions as evidence of a stalled U.S. economic recovery, including an unexpected decrease in New Home Sales in September reduced demand for riskier assets. The greenback dropped against the EUR for the first time in 5 days, as investors saw data showing the U.S. economy returned to growth in the third quarter. U.S. Gross Domestic Product (GDP) grew at a 3.5% annual rate in the 3rd quarter, after shrinking in the previous four quarters, the U.S. Commerce Department reported.

The solid Gross Domestic Product reading renewed optimism about a global economic recovery, prompting traders to buy higher-yielding currencies, eroding the greenback's safe-haven allure. The U.S Dollar will be under heavy pressure on Friday, as investors may continue selling-off the USD on Thursday's optimistic news. Traders are advised to follow key U.S. releases later today, such as the Chicago PMI and Revised UoM Consumer Sentiment report. These publications will be crucial in determining the USD's key crosses today.

EUR - European Currency Remains in the Uptrend
The EUR traded higher against the U.S Dollar and the JPY after a report showed German unemployment unexpectedly fell in October to 8.1%. The nation's economy, the Euro-Zone's largest, returned to growth in the 2nd quarter. The currency rose for the first time in 4 days to $1.4859 vs. USD compared to $1.4713 late Wednesday.

The EUR was also supported by other economic data. The European Commission's economic sentiment indicator posted a bigger-than-expected October rise. The index for the 16-nation Euro-Zone rose to 86.2 from 82.8 in September, compared to expectations for an increase to 84.5.

The 16-nation currency may rise for the first time in 4 days against the British Pound today on speculation that a German report will show retail sales rebounded in September, adding to signs the recession in the 16- nation region is over. Retail sales in Germany, Europe's largest economy, rose 1% in September after a revised 2.4% decline in August, signaling a recovery in the Euro-Zone economy.

JPY - Yen Records Mixed Results against the Majors
The Japanese Yen is set for the biggest monthly slide against the EUR since May, after a government report showed Japan's jobless rate unexpectedly dropped for a 2nd month, reducing demand for the relative safety of the Japanese currency. The Japanese Yen has been the most sensitive to risk aversion trading, falling when investors are more interested in riskier assets such as equities. Against the Dollar, the JPY slid to 91.27 Yen, from 90.33 Yen on Wednesday.

The Yen extended gains vs. the Australian and New Zealand Dollars, as investors took profits on a number of growth-linked trades that had been in vogue in recent months. Both currencies have been favored plays against the low-yielding Japanese Yen this year as investors have anticipated higher Interest Rates in economies seen as recovering faster from the global downturn. The JPY hit a 3-week high of 80.85 per Australian Dollar, before trimming gains to 81.05 Yen. Against the NZD, the Japanese Yen rose 0.8% to 64.80 Yen.

Crude Oil - Oil Gains Due to Optimistic U.S. GDP
Crude prices rallied more than 4% Thursday, briefly lifting the price of a barrel above $80, as confirmation the U.S. economy returned to growth boosted optimism over energy demand. Crude Oil rose by $2.91, or 4%, to $79.97 a barrel, after rising as high as $80.43. It last traded above $80 a barrel on October 23.

Oil rose sharply due to optimistic U.S. GDP data, which in turn raised hopes that economic conditions will improve and raise demand for petroleum products. The U.S. economy data was higher than expected, leading to a rebound in the commodities market. The focus now is on potential economic growth, which may support the Crude prices further.

Technical News

EUR/USD
The daily chart is showing mixed signals with its RSI fluctuating in the neutral territory. However, the 4-hour chart's Slow Stochastic is indicating a fresh bearish cross suggesting that a downwards correction might take place in the nearest time frame. When the downwards breach occurs, going short with tight stops appears to be the preferable strategy.

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

USD/JPY
The typical range trading on the hourly chart continues. The daily chart's Slow Stochastic is floating in neutral territory. However, the 4-hour chart's Slow Stochastic is indicating a fresh bullish cross, suggesting that an upwards correction might take place in the nearest time frame. When the upwards breach occurs, going long with tight stops appears to be the preferable strategy.

USD/CHF
There is a fresh bullish cross forming on the 4-hour chart's Slow Stochastic, indicating bullish correction might take place in the nearest future. The upward direction on the weekly chart's Momentum oscillator also supports this notion. Going long with tight stops might be the right strategy today.

The Wild Card

Gold
Gold prices rose significantly yesterday and peaked at $1049 an ounce. And now, all oscillators on the hourly chart are giving bearish signals, indicating that Gold prices might go down. This might give forex traders a great opportunity to enter a very popular trend.

Published on  Fri, Oct 30 2009, 08:03 GMT

Forex Trading − U.S. Advanced GDP Report at Forefront of Forex Trading Today

Thu, Oct 29 2009, 08:44 GMT
by Greg Holden

ForexYard

The surprise drop in New Home Sales in the United States yesterday has resulted in a sudden buy-up in USD as investors flock to safe-havens. With a market that appears to be lacking a clear direction recently, major reports such as the New Home Sales report yesterday and today's Advanced GDP data become that much more important to watch as more investors await their release before trading.

Economic News

USD - Dollar Rises despite Negative Data
The US Dollar extended gains against the EUR after a report showed an unexpected fall in U.S. new home sales for September. The data offset solid durables goods numbers and stoked fear the rally in risky assets in recent months has run ahead of fundamentals. As a result, the USD finished yesterday's trading session 100 pips higher against the EUR at the1.4716 level. The greenback also saw bullishness against the CHF and closed at 1.0260.

Yesterday, government reports showed that U.S. new home sales unexpectedly tumbled in September, their first drop in six months, underscoring the hazards to an economic recovery even as businesses appeared to be stepping up investment. New single-family home sales fell 3.6% to a 402,000 unit annual pace from a downwardly revised 417,000 units in August. That has helped the U.S Dollar revive its safe haven appeal.

The other factor which led to the bullish Dollar yesterday was that U.S stocks fell, which boosted demand for the USD as a safe-haven currency. Moreover, renewed demand for the Dollar comes after a sharp drop earlier in the month, when the greenback hit 14- month lows versus the EUR, as investors favored foreign currencies and other riskier assets such as equities.

Looking ahead today, the two main news events that may have a very large impact on the Dollar and its main currency pairs in today's trading are the Advance GDP and Unemployment Claims around 12:30 GMT. These reports are very important as they are likely to impact the USD's volatility. Traders should pay close attention to the market as there is an opportunity for traders to capitalize on the fluctuations which are likely to follow these releases.

EUR - EUR Sliding against Rising Safe-Havens
The EUR slid to a more than two-week low against the dollar yesterday, as concern over the strength of the U.S. economic recovery added momentum to a broad correction sweeping across all asset classes. After yesterday, the 16-nation currency fell sharply against the USD, pushing the oft-traded currency pair to 1.4710.The EUR experienced similar behavior against the JPY and closed at 130.95.

The EUR surrendered gains against the U.S. Dollar on Wednesday, falling to session lows, as riskier assets such as U.S. stocks pared gains while commodities fell. Analysts also said investors felt uncomfortable pushing the EUR higher given the huge amount of bearish trades on the dollar, which suggests a near-term recovery in the U.S. currency is on the horizon.

Looking ahead to today, the most important financial indicator scheduled to be released from Europe is the German Unemployment Change at 8:55 GMT. Traders will be paying close attention to today's German Unemployment Change announcement, as a stronger than expected result may bolster the EUR.

JPY - Yen Benefits from Stock Market Losses
The yen rose across the board on Wednesday as investors trimmed riskier positions in higher-yielding currencies. This came as a result of stocks falling after weaker than expected U.S. data pushed many back into safe-havens. By yesterday's close, the JPY rose against the EUR, pushing the oft-traded currency pair to 132.95. The yen also saw bullishness against the USD and closed at 90.30.

A slide in European shares, led by declines in the banking and energy sectors, accelerated the high-yielding Australian dollar's sharp fall triggered by lower-than-expected domestic inflation data, while boosting the low-yielding yen.
Further strengthening could be seen in the Yen if other nations begin to raise interest rates in order to ward off inflation. This could potentially wreak havoc on the Japanese economy by making Japanese exports relatively more expensive when compared to their foreign counterparts.

Crude Oil - Crude Oil Slips Below $78 a Barrel
Crude Oil fell more than $2 to below $77.20 a barrel on Wednesday, after data showed a surprise build in U.S. gasoline inventories, stirring fuel demand concerns in the giant consumer.

Oil prices also came under pressure after data showed sales of new U.S. homes tumbled unexpectedly in September, the first drop in six months, and feeding doubt about an economic recovery, thus helping the safe-haven USD rise; pushing oil prices lower.

Looking ahead, traders are advised to watch carefully the global stock markets and the major economic indicators which will be published from the U.S. and Euro-Zone in order to predict the next movements in oil prices.

Technical News

EUR/USD
This pair seems to be giving off mixed signals today. There is an impending bearish cross on the hourly Slow Stochastic, while the 4-hour Slow Stochastic indicates a fresh bullish cross. It seems as if short-term movement is down, while the longer-term pressure remains upward. Waiting for the upward swing and then going long appears to be preferable today.

GBP/USD
This pair continues to trade in a tight range between 1.6300 and 1.6400. Most technical indicators show that this trend will likely continue. Forex traders can benefit by buying on highs and selling on lows within this trend.

USD/JPY
The sustained down-trend of this pair has pushed many indicators into showing an impending correction. There are fresh bullish crosses on the hourly and 4-hour Slow Stochastic and MACD, and the price is currently floating in the over-sold territory on the 4-hour RSI. Going long appears to be a wise choice today.

USD/CHF
This pair shows a level of short-term upward pressure with a bullish cross on the hourly Slow Stochastic. However, the longer-term pressure seems to be in a downward direction. Going short after the swing may be a good tactic today.

The Wild Card

Crude Oil
Yesterday's bearish movement in Crude Oil has pushed a number of technical indicators into the over-sold territory. There appear to be fresh bullish crosses on the hourly MACD and 4-hour Slow Stochastic, indicating an impending bullish move. And the price has just left the over-sold territory on the hourly RSI and is now cascading upward. Forex traders involved with commodities like this can take advantage of this knowledge by going long on Crude Oil now, and at a great entry price!

Published on  Thu, Oct 29 2009, 08:44 GMT

Forex Trading − USD Continues to Gain on Return to Risk Aversion

Wed, Oct 28 2009, 08:37 GMT
by Greg Holden

ForexYard

The USD continued to advance Tuesday against major currencies as a measure of U.S. consumer confidence registered an unexpected decline for October. Gold futures extended losses from the previous session as the USD rose. December Gold fell $7.40, to settle at $1,035.40 an ounce on the Comex division of the New York Mercantile Exchange and is currently trading around $1041.

Economic News

USD - USD Gains on Weak Consumer Confidence
The USD gained against the EUR for the second session in a row on Tuesday, after the release of unexpectedly weak U.S. confidence data intensified risk aversion with investors. Further concerns arose about the possibility the Federal Reserve will signal an eventual end to its stimulus policy stance at its FOMC meeting next week. The dollar index rose to 76.233, up from 76.100 late Monday, recovering from losses seen during Tuesday's earlier session.

The Conference Board's index of consumer confidence declined to 47.7 from a revised reading of 53.4 last month. This weakness mirrors the continuous rise in unemployment levels and undermines stabilization in other areas of the economy such as stabilization in financial markets and home prices.

Looking ahead for today, the release of the Core Durable Goods Orders at 12:30 GMT and New Home Sales at 14:00 GMT will likely cause volatility for the USD pairs. Further disappointing data may push the EUR/USD pair even lower.

EUR - EUR Down ahead of the Release of Key German Data
The EUR hit a session low at $1.4769 Tuesday afternoon, its lowest level since Oct. 13. Late Tuesday, the EUR was at $1.4802, down from $1.4865 late Monday and off a 14-month high of $1.5064 seen at the start of Monday's session. The EUR was at ¥135.88, down from ¥137.08. The U.K. pound was at $1.6389, up from $1.6324.

Along with the disappointing U.S consumer confidence report, the EUR was down on an expectation the German jobless rate probably rose to 8.3% in October from 8.2% in the previous month before tomorrow's report. Furthermore, according to analysts, the six month rally in stocks and commodities is probably at its peak as U.S. growth continues to lag, further hurting the appeal of riskier assets such as the EUR.

Looking ahead to today, investors should follow the release of the German CPI report which is forecasted to show consumer prices worsened, putting further pressure on the EUR

JPY - Yen Gains on Return to Risk Aversion
The JPY gained against major counterparts on speculation the global economic recovery will slow, reducing demand for high yielding assets. The Yen rose to 135.55 per EUR in today's early trading, from 135.89 yesterday, after earlier reaching 135.43, the highest level since Oct. 21. The JPY traded at 91.50 per USD, up from 91.80 Tuesday.

The Yen traded near a one week high against the EUR ahead of reports due today and tomorrow that are forecasted to show German consumer prices and unemployment worsened, reiterating the notion that the European Central Bank (ECB) will keep interest rates low.

Japan's retail sales fell for a 13th month in September. Sales slid 1.4% from a year earlier. The continuous poor data reinforces the idea that recovery will be slow.

Oil - Crude Prices Up ahead of Inventory Data
Crude Oil futures rose Tuesday, breaking a three day losing streak. Light, sweet crude for December delivery settled 87 cents, or 1.1%, higher at $79.55 a barrel on the New York Mercantile Exchange. A buying surge late in Tuesday's session overturned Crude's earlier losses caused by a stronger Dollar.

A report due today at 14:30 GMT is expected to show U.S Oil Inventories increased slightly. However, despite high Oil inventories, as long as equity markets stay stable the price of Oil should go up. Strong equities support Oil Prices as was evident Tuesday; despite weak consumer confidence, there was still appetite for riskier assets such as stocks and Oil.

Technical News

EUR/USD
The price of this pair appears to be floating in the over-sold territory on the RSI of the 4-hour chart, signaling an impending upward move. The fresh bullish crosses on the hourly chart's Slow Stochastic and MACD support this notion. Going long appears to be a good strategy today

GBP/USD
The price of this pair has been sending mixed signals over the past few days as it continues to trade in a wide range. There appears to be a bearish cross on the hourly chart's Slow Stochastic; however, a fresh bullish cross has just occurred on the hourly chart's MACD. With bullish and bearish crosses on the MACDs of the 4-hour and daily charts, respectively, traders may find it difficult to choose a direction. Waiting for a clearer signal might be a wise choice today.

USD/JPY
The sustained downward movement these past few trading days has apparently generated a bullish cross on the hourly chart's Slow Stochastic, indicating a short-term upward correction may occur shortly. As the weekly Momentum oscillator begins to turn a corner, we may very well be seeing a reversal in the making. Going long to enter this new trend may be a wise move today.

USD/CHF
Last days' sharp upward movement appears to have pushed the price of this pair into the over-bought territory on the RSI of the 4-hour and daily charts, indicating a downward correction may be due. The volatile breach of the upper border on the 4-hour chart's Bollinger Bands also signals strong downward pressure. Going short might be a wise choice today.

The Wild Card

AUD/USD
There appears to be a fresh bullish cross on the 1 hour chart's Slow Stochastic for this pair, signaling an upward movement may be in the making. With its sustained downward movement over the past days, this pair is overdue for a rebound. With fresh bullish crosses on the MACD for the hourly, 4-hour charts, this rebound may indeed be developing. Forex traders can definitely take advantage of this swing by buying this pair now, and at a great entry price

Published on  Wed, Oct 28 2009, 08:37 GMT

Forex Trading − CB Consumer Confidence Figures Set to Dominate USD Trading

Tue, Oct 27 2009, 08:45 GMT
by Greg Holden

ForexYard

Dollar trading today is set to be dominated by key releases from the U.S., such as the CB Consumer Confidence figures at 14:00 GMT. The speech by Treasury Secretary Timothy Geithner at 20:00 GMT is also set to be a market mover when it takes place at 20:00 GMT. It is also recommended that you follow the results from top U.S. companies, as this may help the U.S. Dollar continue to gain on its recent bullish trend.

Economic News

USD - Dollar Soars on Safe-Haven Status
The USD made impressive gains throughout Monday's trading. This process was sustained, as concerns of investors rose on fears that U.S. lawmakers will make big cutbacks on tax credits for new homebuyers. If this does actually occur, then Bank of America will need to pay back its government debt by selling a large amount of its shares. As the day went by, the USD eventually recovered from the recent 14-month low vs. the EUR, as the leading U.S. equity indices, such as the S&P declined. This led to further demand for the USD on Monday, especially as Gold tumbled significantly yesterday.

The EUR/USD cross declined by a massive 190 pips to the 1.48.50 level. It is important to take into account that this behavior is set to shock the market for the rest of the current month of October. The GBP/USD pair was virtually unchanged, as it closed at the 1.6290 level. This was due in part to the GBP's great strength throughout yesterday's trading. The USD also made some very impressive gains vs. the JPY, CHF and Canadian Dollar. All of this remarkable behavior may tilt the top U.S. and global banks into labeling the U.S. Dollar as a safe-haven currency once again.

Looking ahead to today's trading, there is set to be some very important economic news that is scheduled to be released from the U.S. The most important of these are the S&P/CS Composite-20 HPI at 13:00 GMT, the CB Consumer Confidence figures at 14:00 GMT and the very important speech by U.S. Treasury Secretary Timothy Geithner at 20:00 GMT. The latter of these 2 events is set to be the main driving force behind the USD's strength today. You should also follow other releases form the leading industrialized economies, as the trading day unfolds.

EUR - GBP Rises on All Fronts
The British Pound rose on all fronts yesterday, as British business confidence rose to an 18 month high. Moreover, consumer prices are forecast to rise faster than any industrialized economy. This is as the inflation rate is expected to be 2.1% this year, far higher than that of the Euro-Zone and the U.S. The GBP continued to rise yesterday, as traders lost faith in the EUR, and realized that the Pound was undervalued. Additionally, investors, continue to realize that the GBP is over 20% undervalued, and some type of bullish correction is looming. This is especially so, as the Bank of England (BoE) may raise Interest Rates sooner than many expect.

The British currency made some massive gains vs. the EUR by nearly 130 pips to reach the 0.9119 level. The GBP/USD cross was unchanged at the 1.6290 level, as both the GBP and USD were the leading bullish currencies in Monday's trading. The British currency also made significant gains vs. the JPY, as the pair ascended to the 150.55 level. With regards to the EUR, it declined against its major currency pairs. This was exasperated yesterday, as U.S. and European equities slid on Monday. The main benefactors of this seemed to be the GBP and USD.

Today, both the Euro-Zone and Britain are set to be publishing some very important economic indicators. These releases will be key in setting the undertone for both the GBP and EUR throughout today's trading. From Britain, there will be the ever so important CBI Realized Sales release at 11:00 GMT. From the Euro-Zone, there will be the M3 Money Supply and Private Loans results at 09:00 GMT. Forex traders are recommended to open their positions in the majors, now, as today's trading is set to offer some very big profits.

JPY - Yen Makes Gains vs. the Pacific Currencies
On one hand, the Japanese currency made losses vs. the USD and GBP. However, these gains weren't worrisome, as these 2 counter currencies were the big bulls yesterday. With regards to the Pacific currencies, the JPY did make some significant gains vs. the AUD and JPY. This was due to a number of reasons. The most important of these being Japan's Prime Minister Yukio Hatoyama's comments on how he'll revolutionize the Japanese economy in the coming months.

The JPY lost ground against both the Dollar and the Pound. However, it made some gains vs. the EUR. The JPY rose 65 pips vs. the New Zealand Dollar to reach the 66.80 level. At one point yesterday, the JPY was trading higher by nearly 70 pips vs. the AUD, to eventually close at the 84.50 level. The most important release to follow from the Japanese economy today is the Retail Sales figures at 23:50 GMT. In the meantime, open your positions in the JPY's main crosses now.

OIL - Crude Oil Slides on Rising Dollar
Oil fell significantly on Monday, as the U.S. Dollar made significant gains. Crude dropped nearly a Dollar to close at $78.81. This was originally sparked by fears in the U.S. over the government cutting tax credits for homebuyers. This sent fears through the equities market. Thus the obvious loser of all of this was Crude Oil, as the USD gained as global investors seeked a safe-haven currency in Monday's trading.

Crude's losses are notable, as the black gold had been trading as high as $81.58 on Monday. The other factor that also played on the mind of traders yesterday was that demand of U.S. consumers may slide in the coming weeks as the pace of the U.S. economic recovery slows, and U.S. unemployment continues to rise. If the USD continues to rise today, then we may see Crude Oil continue to decline.

Technical News

EUR/USD
A bullish cross may be forming on the hourly chart, indicating a potential price movement towards the upper resistance level of 1.4985. The daily chart's Bollinger Bands are tightening, indicating that a violent breach may take place in the next few hours, supporting the potential bullish movement

GBP/USD
On the 30 min chart the pair continues to range trade in the upper half of its Bollinger Bands. Both the 1 hour and the 4 hour charts are providing mixed signals with no significant breach. Such a range trading floating nature may provide a good opportunity for traders to safely buy on the lows and sell on the highs while profiting from the relatively predictable range trading.

USD/JPY
The bullish trend is loosing its steam and the pair seems to be consolidating around the 92 level. The 4-hour chart shows a fresh bearish cross that has just formed, indicating a future downward price movement. Supporting this is the RSI on the daily chart which is floating in the overbought territory. Traders may look for the pair to reach a lower support line of 91.55.

USD/CHF
There is a very accurate bearish channel forming on the hourly chart, as the pair has consecutively dropped for the past 2 days. Currently, as the RSI on the daily chart is floating below the 50 line and the Slow Stochastic is pointing down, the pair might extend its bearish trend. Going short might be the right choice today

The Wild Card

Oil
Oil prices are once again dropping, and a barrel of Oil is currently traded at around the 78.80 price level. And now the RSI on the 30 min chart broke above a bearish trend line indicating that oil prices might go up. This might give forex traders a great opportunity to enter a very popular trend.

Published on  Tue, Oct 27 2009, 08:45 GMT

Forex Trading − The EUR/USD Trades Past $1.50 First Time in 14 Months

Mon, Oct 26 2009, 09:48 GMT
by Greg Holden

ForexYard

The U.S dollar fell against the EUR and the Yen in Asian trading this morning after an official newspaper of the Chinese central bank said China should cut its USD holdings, adding to concerns over the unit's global reserve currency status.
The greenback could weaken further later in the day, particularly against the risk-sensitive EUR, which is also benefiting from stronger stock markets, analysts said.

Economic News

USD - Dollar Sees Mixed Results against the Majors
The Dollar saw an extremely volatile session during last week's trading. The Dollar dropped to a 14-months low against the Euro, as the pair crossed the 1.50 level. However the Dollar appreciated against the Yen, and saw mix results against the Pound.

It appears that the mixed results of the major economic publications from the U.S economy could explain the irregular trading of the Dollar. On the positive side, the housing sector continues to recover. The Existing Home Sales, which are the number of residential buildings that were sold during September, rose to 5.57M from 5.37M on August. In addition, the Building Permits, which measures the number of new residential permits issued during September, remained at a high level as well.

Nevertheless, the Producer Price Index (PPI), a leading indicator of consumer inflation, failed to rise, and dropped by 0.6% in September. If the relatively low inflation rate fails to rise, it is a warning sign that the U.S economy may not recover as quickly as some may expect. In addition, the employment condition in the U.S continues to be fragile. The weekly Unemployment Claims showed that 531,000 individuals filed for employment insurance for the first time during the past week - the largest number in 3 weeks.

As for the week ahead, the most impacting data expected from the U.S economy looks to be the Consumer Confidence on Tuesday, the Durable Goods Order indices and the New Home Sales on Wednesday, the Unemployment Claims scheduled on Thursday. The results of these indicators are likely to determine the Dollar's direction for this week, and traders are advised to follow their results.

EUR - Euro Continues to Strengthen against Majors
The most significant trend in the currencies world appears to be the European currency. During last week the Euro saw a 14-months record high against the Dollar, as the EUR/USD pair reached the 1.5055 level. The Euro also extended its bullish trend against the Yen, and the EUR/JPY pair is now traded above the 138.0 level.

One of the reasons that the Euro continues to strengthen against most of the major currencies seems to be the positive data from the German economy, which shows clear signs of recovery. The German Business Climate, which is a survey of about 7,000 businesses who are asked to rate the level pf current business conditions and expectations for the next 6 months, kept an above 90 rate for the third month in a row. This indicator rose to a 13-month high, which means that German businesses are under the impression that the recession is over. In addition, several other German economic indicators have provided positive results lately. Considering that the German economy is the largest and strongest economy in the Euro-Zone, any recovery signals are likely to support the Euro.

In addition, it seems that another significant reason for the Euro's bullish trend, is the weak, or unsettled Dollar. Due to an unclear condition of the U.S economy, the Dollar continues to drop against most of the major currencies. As long as this tend continues, the Euro could remain as the safest trend in the market.

Looking ahead to this week, a batch of data is expected from the Euro-Zone. Traders should follow the leading publications, especially from the German and French economies, as they have proven to have a large impact on the Euro. The most influencing news event looks to be the German Preliminary Gross Domestic Product on Wednesday. A positive figure, above expectations could elevate the Euro even further.

JPY - Can the Yen Drop Further?
During the last few weeks, one of the safest investments in the market was to go against the Yen. Even so the Yen saw some bullish corrections close to the weekend, last week was no exception. The Yen continues to sharply drop, especially against the Dollar and the Euro.

The number one reason for the Yen's weakness appears to be the Bank of Japan's (BoJ) policy. The BoJ feels that it is the Japanese interest to keep a very weak Yen. The logic behind this stance is that the Japanese economy relies greatly on its export, and thus the weaker the Yen, the more exporters will allegedly profit. The main tool the BoJ uses in attempt to reach this target is the low interest rate. Japan currently holds the lowest interest rate in the in the industrial world, merely 0.10%.

However, the BoJ's policy may have missed its target. Last week, the Japanese Trade Balance was published. The report showed that the difference in value between imported and exported goods during September have accumulated to 0.06T, failing to reach expectations for 0.38T, and much lower than the 0.17T result from August. Currently it seems that until the Japanese export will recover and a show similar figure to the ones prior recession, the Yen is likely to continue to drop, especially against the Dollar and the Yen.

As for this week, many interesting news events are expected from the Japanese economy. Yet the most fascinating publication seems to be the Overnight Call Rate, which is scheduled for Friday. The Overnight Call Rate is in fact the Japanese Interest Rate announcement. Analysts expect that the BoJ will retain the 0.10% rate. However, if the BoJ will surprise and decide to hike rates, turmoil is expected in the market.

OIL - Will Crude Oil Continue to Slide?
Crude oil continued to rise during most of last week's trading, and a barrel of oil almost reached $82. However, close to the weekend, prices of oil dropped, and a barrel of crude oil is currently traded for less than $80 a barrel.

The rising trend of crude oil, which took place on the first half of last week, came mainly as a result of the weak Dollar. Oil is valued in Dollars and thus tends to strengthen when the Dollar drops. However, later on the week, the prices of oil saw a sudden drop. The main reason for the decline in oil prices seems to be the increasing concerns about global recovery, especially regarding the U.S economy. Current expectations are that the economic recovery in the U.S will elevate demand for oil.

However, the unsatisfying data received from the U.S economy has questioned the reliability of economic recovery, and increased worries that demand for oil may not rise during the first half of 2010. As long as these concerns will remain, crude may fail to see higher prices than $80 a barrel.

As for the week ahead, traders are advised to continue follow the major economic publications from the U.S and the Euro-Zone, as they seems to have the strongest effect on oil's value. In addition, traders should follow the U.S Crude Oil Inventories on Wednesday, as this indicator tends to have an immediate impact on crude oil's trading.

Technical News

EUR/USD
The Bollinger Bands on the hourly chart for this pair appear to be tightening in expectation of a volatile price movement. With a recent bearish cross on the hourly chart's Slow Stochastic, this pair may be due for a strong downward correction. As the RSI of the 4-hour chart is floating in the over-bought territory, going short may be a wise choice today.

GBP/USD
The price of this pair is apparently floating in the over-sold territory on the 4-hour chart's RSI, signaling upward pressure. With a fresh bullish cross on the 4H chart supporting this notion, going long may indeed be a good choice today.

USD/JPY
The bullish trend is loosing its steam and the pair seems to consolidate around the 91.90 level. The daily chart's RSI is already floating in an overbought territory suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

USD/CHF
Narrow range trading continues as the pair did not make a significant move in either direction, and is currently traded around the 1.0070 level. The 4-hour chart's Slow Stochastic is showing a fresh bearish cross suggesting that downwards correction might take place in the nearest time frame. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

The Wild Card

Gold
Gold prices are once again dropping, and it is currently traded around $1054 per ounce. And now, the hourly chart's Slow Stochastic is giving bullish signals, indicating that gold prices might go up. This might give forex traders a great opportunity to enter a very popular trend.

Published on  Mon, Oct 26 2009, 09:48 GMT

Forex Trading − The Dollar Resumes Broad Slide towards 2008 Lows

Fri, Oct 23 2009, 08:57 GMT
by Greg Holden

ForexYard

The USD surrendered slim gains on Friday, resuming its bearish momentum against a basket of currencies on expectations Interest Rates will remain low in the U.S. Low rates make the U.S. Dollar less attractive than higher-yield currencies more closely correlated with economic recovery.

Economic News

USD - The Dollar Trades near 14-Month Low
The U.S Dollar held onto modest gains on Thursday, but pared most of its earlier advance as U.S. equities rallied, signaling more willingness among investors to buy riskier assets. The Dollar's earlier gains were triggered overnight by concerns about future Chinese growth. The move came just a day after the U.S. currency sank to a fresh 14-month low against the EUR, which breached the key $1.50 level for the first time since August 2008.

Analysts expect greenback's downtrend to continue, with the Dollar vulnerable on expectations of low rates, a view reinforced after Chicago Federal Reserve President Charles Evans said on Thursday the Fed's focus remained on an accommodative rate policy. The USD is poised for another weekly decline against the currencies of Australia and New Zealand as regional equities extended an earnings-sparked rally in U.S. shares.

The U.S dollar may be set for a 3rd weekly drop against the 16-nation currency before reports today forecast to show improvements in German business confidence and U.S. home sales. Also scheduled are UK 3rd quarter Gross Domestic Product numbers while in the U.S. Federal Reserve chief Ben Bernanke speaks at 12:30 GMT.

EUR - EUR Trades at $1.50 as Risk Demand Improves
The EUR traded near a 14-month high against the U.S dollar as a recovery in corporate earnings and improved prospects for the global economy revived demand for riskier assets. The European currency is also headed for a 3rd weekly gain against the Japanese yen on optimism that the 16-nation economy is on the mend.

The EUR rose before reports forecast to show improvements in an index of U.S. leading indicators and German business confidence. It appears that the Euro-Zone's economy is recovering more quickly than what is seen in the U.S. and Japan, and the 16-nation currency will likely gain further. Adding to signs that the economic recovery is gaining traction, the Ifo institute's business climate index, based on a survey of 7,000 executives, climbed to 92 in October from 91.3 the previous month, according to a separate survey.

The British pound is set for a 2nd weekly gain versus the USD as the Office for National Statistics may say today that the U.K. economy expanded 0.2% in the 3rd quarter from the previous period, according to economists.

JPY - The Yen Declines vs. Majors
The Japanese Yen slipped to 91.40 per Dollar, having fallen 0.3% in the previous session. The JPY could come under a bit of pressure on expectations Japanese investors will step up overseas bond purchases. Traders are eyeing support at 91.75 and then at around 92.30 per Dollar.

The Yen may slide for an 11th day against the EUR, its longest losing run since December 2004, after a Finance Ministry report showed Japan's shipments abroad fell 30.7% in September from a year ago, compared with a 36% drop in August.

In Asia, it seems that the pace of deceleration in exports is slowing, which is encouraging, analysts said. Therefore the Yen may tend to under perform other major currencies except for the U.S Dollar when risk appetite is pretty strong.

Crude Oil - Oil Falls Slightly on Stronger Dollar
Crude Oil prices were slightly lower Thursday, pulling back from their 1 year high of $82 a barrel, as weekly data showed a worse-than-expected picture in employment and as the U.S. Dollar rebounded against other major currencies.

Crude prices jumped on Wednesday after weekly U.S. government data showed a large drop in gasoline inventories over the past week and fuel demand rising about 4% year-on-year. The Energy Information Administration reported Wednesday that petroleum demand remained weak in the U.S., with demand for gasoline falling to the lowest level in more than 5 months.

Energy markets have looked to economic data for signs of a rebound in the economy that could bolster flagging oil demand. A stronger Dollar tends to push down Dollar-denominated commodities prices.

Technical News

EUR/USD
The EUR/USD cross has been experiencing much bullish behavior in the past 2 days. However, there is much technical data that supports a bearish move for today. The RSI of the daily and weekly charts indicates that the pair floats in the overbought territory, leading to the conclusion that a downward correction is imminent. The MACD of the weekly chart also supports this view. Going short with tight stops may turn out to pay off today.

GBP/USD
The pair has been going higher for the past 2 weeks, and it now stands at the 1.6625 level. A bearish cross has recently formed on the Slow Stochastic of the 4-hour chart, signaling that a downward move will happen anytime soon. The RSI of the weekly chart signals that the pair has run out of steam, and that a downward correction is impending. Going short with tight stops seems to be the wise choice today.

USD/JPY
The chart's oscillators seem to be showing overwhelming evidence that a bearish move for the USD/JPY cross today is imminent. The pair is approaching the upper border of the Bollinger Bands of the 4-hour chart, indicating that a bearish move is imminent. The RSI of the 4-hour chart shows that the pair is floating in the overbought territory. Going short with tight stops may turn out to bring big profits for traders today.

USD/CHF
There is a bullish cross forming on the 4-hour chart's Slow Stochastic indicating a bullish correction might take place in the nearest future. The upward direction on the weekly chart's RSI also supports this notion. When the upward breach occurs, going long with tight stops appears to be preferable strategy.

The Wild Card

Crude Oil
Crude oil prices rose significantly in the last two weeks and peaked at $81.60 per barrel. However, the daily chart's RSI is floating in an overbought territory suggesting that the recent upwards trend is loosing steam and a bearish correction is impending. This might be a good opportunity for forex raders to enter the trend at a very early stage.

Published on  Fri, Oct 23 2009, 08:57 GMT

Forex Trading − Dollar Tumbles as Investors Turn to Riskier Assets

Thu, Oct 22 2009, 10:08 GMT
by Greg Holden

ForexYard

Witnessing a steady decline during this week's trading sessions, the USD became weakened as traders unwound their Dollar-buy positions in exchange for riskier assets, such as stocks. The global stock rally seen yesterday may have been one of the leading causes in the Dollar's depreciation. With recent market optimism, traders may continue to see a small downward trend in the U.S. Dollar as its positions are unwound in exchange for higher yielding assets.

Economic News

USD - U.S. Unemployment Claims on Tap
The dollar hit a one-month low against the sterling pound on Wednesday and the EUR broke above $1.50 for the first time in 14 months as expectations that U.S. interest rates will be kept low continued to weigh on the greenback.

Though the U.S. economy is expected to have exited the recession in the third quarter, investors fear rising unemployment will keep the Fed from lifting interest rates quickly. That would diminish the dollar's appeal and encourage investors to buy higher-yielding, higher-risk currencies and assets instead.

Analysts have suggested that central banks outside of the United States are considering winding down programs that have flooded their economies with money. If the U.S. Federal Reserve doesn't follow suit and holds interest rates at record lows, that would diminish investor desire to hold dollars.

Today's Unemployment Claims release is expected to have a strong impact on the U.S currency. Any result could be a surprise, and the Dollar could go either way as a result. In any case, traders are unsure how the market will react to today's data. A weak report could feed risk aversion, boost Treasuries and actually aid the U.S Dollar. Then again, a better than expected result might be seen as a sign of relative U.S. economic strength, and lift the Dollar. Or it could also encourage risk-taking and aid commodities and higher-yielding currencies at the Dollar's expense.

EUR - EUR Reaches 2009 High against USD
The EUR topped $1.5030 for the first time since August 2008 on optimism that the global economic recovery is gathering momentum, increasing demand for riskier assets at the expense of the greenback.

The EUR was affected by the global stock market rally and the bearish Dollar. The U.S. stock market rally led investors to buy-back into the EUR, as they looked for returns on buying commodity-linked and higher-yielding currencies in Wednesday's trading.

The British pound also jumped, hitting a high of 1.6631 against the US dollar as investors grew more confident that the Bank of England's (BOE) rate-setting committee may halt, at least temporarily, a controversial program of buying bonds to boost the economy. The rise followed the release of Minutes from the BOE's October meeting that showed policymakers were in agreement on limiting the central bank's bond-buying program.

As the global economy stabilizes, currency 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 EUR in the coming months.

JPY - Yen's Bearish Sentiment Continues
The Japanese Yen saw a bearish trading session yesterday, losing ground against most of its currency crosses. The JPY fell broadly against the EUR and closed at 1.3650, while the GBP/JPY cross also rose to around 151.43. The only economic events out of Japan yesterday were the trade balance figures; the result was lower than forecast as volatility kept to a minimum.

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 Unemployment Claims 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.

Crude Oil - Crude Oil Boosted by Dollar's Weakness
Oil prices hit new highs for the year Wednesday just as the dollar fell to new lows against the EUR, showing how much the weak U.S. currency has come to dominate energy markets. The run-up in prices came within minutes of a government report showing that crude supplies in the United States are growing and that refiners are producing very little gasoline because consumers aren't using as much.

Even though the amount of crude oil in storage is well above normal for this time of year, it seems any movement in the dollar pushes more value into oil, raising prices further. Crude is priced in dollars, so it gets more expensive as the USD falls.

Technical News

EUR/USD
It appears as if a few significant bearish crosses have occurred on the hourly and 4-hour MACD for this pair. The price also hovers near the over-bought territory on the daily RSI, suggesting a downward correction may be imminent. Going short may not be a bad idea today.

GBP/USD
There seem to be fresh bearish crosses on the 4-hour and daily Slow Stochastic, suggesting a bearish correction may be due. The price also floats in the over-bought territory on the 4-hour and daily RSI, suggesting strong downward pressure. Going short may be a wise tactic today.

USD/JPY
The price of this pair has recently entered the over-bought territory on the 4-hour RSI, but remains in an upward direction, suggesting the notion that there may be some upward momentum remaining. An imminent bearish cross also appears to be forming on the hourly Slow Stochastic, which supports the notion of a future downward movement. Waiting for the downward correction and then going short appears to be today's preferable strategy.

USD/CHF
There appear to be very large bullish crosses on the hourly and 4-hour MACD, indicating a future upward movement. As the price has just entered the over-sold territory on the daily RSI, there seems to be a strong chance of an upward correction today. Going long may not be a bad choice.

The Wild Card

USD/ZAR
After sustaining a very sharp upward movement, the technical indicators for this pair are unanimously showing signs of an impending downward correction. There are bearish crosses on the hourly and daily Slow Stochastic, and the price is floating in the over-bought territory on the hourly and 4-hour RSI. Forex traders have a great opportunity to catch this very predictable movement by entering short positions on this pair as early as possible and riding out the fall.

Published on  Thu, Oct 22 2009, 10:08 GMT

Forex Trading − EUR Unable to Push above $1.50

Wed, Oct 21 2009, 09:25 GMT
by Greg Holden

ForexYard

The Dollar strengthened versus the EUR following a decline in stock markets, poor U.S economic data and an unexpectedly dour outlook from the Bank of Canada. Concerns about the strength of U.S. corporate earnings and the strength of the global economic recovery dampened demand for risky assets, halting hit the EUR's attempt to breach the $1.50 mark Tuesday.

Economic News

USD - USD Gains on Poor Economic Data
The USD recovered from recent pressure that pushed it to a fresh 14-month low versus the euro, advancing on Tuesday as stocks dropped and economic data showed more weakness in the U.S. housing sector. The dollar traded at $1.4921 per euro at 9:53 a.m. in Tokyo from $1.4945 yesterday in New York, when it touched $1.4994, the weakest level since August 2008. The greenback was at 90.91 yen from 90.78 yen.

The Dollar advanced against the EUR following the release of two economic reports that showed an unexpectedly large drop in U.S wholesale prices and a continued sluggishness in the housing sector. Comments from Euro-Zone finance ministers supporting a strong Dollar further contributed to the Dollar's rise. A drop in equities also helped push the Dollar higher. The stock market continues to be an important driving force in the currency market and affect its direction.

Looking ahead to today, a relatively light news day is expected from the U.S, however the release of the Crude Oil Inventories at 14:00 GMT as well as the Beige Book at 18:00 GMT will likely provide further direction to the Dollar.

EUR - EUR falls on Concerns the Currency's Strength is Hurting Recovery
The EUR declined versus the Dollar after several Euro-Zone official expressed concerns over the volatility in the market and the growing strength of the common currency. The EUR retreated from a 14-month high against the USD on speculation European policy makers will today reiterate their concerns that the currency's gains are hurting the region's economic recovery. As the exchange rate nears $1.50, it presents problems for the European economy and manufacturing sector.

The EUR has strengthened 15% versus the Dollar in the past 6 months, making the region's exports more expensive to overseas buyers. The EUR traded as high as $1.4994 versus the Dollar in earlier trade but failed to break above the psychologically important $1.50 level. It is currently trading at $1.4931, down from $1.4941 in the previous session. The EUR traded at 135.68 Yen from 135.66 Monday.

Looking ahead for the rest of the weak, the release of the Ifo institute's business climate index Friday is expected to provide some support for the EUR as it is expected to show business confidence in Germany improved, adding to signs that the recovery is gaining momentum. Today, trader should follow closely the MPC Meeting Minutes due at 8:30 GMT as they will provide insight and direction for the GBP for the near future.

JPY - Yen Mixed against Major Currencies
The Bank of Japan (BoJ) minutes revealed the central bank is encouraged by recent performance of the Japanese economy, and not likely to add more liquidity to the monetary system, meaning increase the quantitative easing program. The BoJ exhibited a more hawkish stance towards the Yen, supportive of a more conservative fiscal policy and a stronger currency. The Yen is currently trading at 135.35 against the EUR, down 0.18% from yesterday. The Japanese currency is currently at 90.65 against the Dollar, after briefly breaching the 91.00 level yesterday.

OIL - Crude Drops below $79 a Barrel
Crude Oil dropped below $79 a barrel as the Dollar strengthened and an industry report showed an increase in U.S crude stockpiles. The U.S is the world's biggest energy consumer. Crude oil for December delivery dropped as much as 58 cents, or 0.7%, to $78.54 a barrel on the New York Mercantile Exchange.

Oil fell for a second day as U.S. equities declined and the Dollar rose from a 14-month low against the EUR. Furthermore, the American Petroleum Institute reported that crude supplies rose 3.85 million barrels.

An Energy Department report due today at 14:30 GMT is expected to show that U.S. inventories of Crude Oil rose 1.5 million barrels last week, likely putting further pressure on Oil Prices.

Technical News

EUR/USD
The daily chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, the hourly chart's RSI is already floating in the overbought territory indicating that a bearish correction might take place in the nearest future. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

GBP/USD
The daily chart's RSI signals that this pair is still being over-bought, which may help support the pair in a downward direction in the coming days. A bearish cross that is forming on the hourly chart's Slow Stochastic also supports this notion. Going short with tight stops might be the right choice today.

USD/JPY
A bearish cross on the 4-hour chart is forming, signaling a potential price drop, while the Bollinger Bands are also tightening, pointing to an imminent volatile price movement. However, the 30min chart's Slow Stochastic indicates a recent bullish cross, signaling a possible upward movement. In the short-term traders may expect a upward correction, but longer-term traders may want to maintain their short positions today.

USD/CHF
The bearish flag formation on the 4-hour chart is still valid as no major breaches occurred. The momentum is still very bearish as pointed by the daily RSI. Forex traders should wait for an additional breach through the 1.0080 level to validate the next sharp bearish move

The Wild Card

Silver
This commodity has been trying to massively correct the intensive bearish move, and is now trading around the 17.50 level. The sharp bullish channel is in a high spot at the moment and together with a bullish cross of the hourly chart's Slow Stochastic it provides forex investors quite a good potential for long positions.

Published on  Wed, Oct 21 2009, 09:25 GMT

Forex Trading − The Forex Market Awaits Crucial U.S. Data Today

Tue, Oct 20 2009, 10:24 GMT
by Greg Holden

ForexYard

The forex market awaits crucial U.S. data today in the PPI and Building Permits figures at 12:30 GMT. These publications are set to drive the pace of the forex market throughout the trading day. It is also recommended that you pay close attention to unexpected news announcements by President Obama as this is likely to increase market volatility. As for now, open your positions in the majors, whilst the trading day gets under way.

Economic News

USD - Dollar Tumbles on Ben Bernanke Speech
The U.S. Dollar tumbled in yesterday's trading following comments made by U.S. Federal Reserve Chairman Ben Bernanke in a speech in which he hinted at keeping a loose U.S. monetary policy for at least the short-medium term future. The USD also fell as a flurry of higher corporate earnings and optimism about a continued global economic recovery led to an equity rally, which led to a slump in demand for the USD. Thus traders bought-up higher-yielding assets, such as the Australian Dollar, Crude Oil and Gold. The Dollar Index, which is used to track the USD against its 6 main trading partners, slipped 0.3% to 75.363.

The Dollar extended the recent downward trend against the GBP, as the GBP/USD cross ascended by 65 pips to the 1.6403 level. This comes as the British Pound recovers from its downtrend against the USD from over a week ago. The EUR/USD cross also went significantly higher on Monday by 85 pips to the 1.4964 level. The greenback also made some significant declines vs. the Canadian Dollar and Swiss Franc. This behavior was apparent throughout Monday's trading due to the varied factors weighing down on the Dollar.

Today is the publication of the PPI and the Building Permits data at 12:30 GMT. Optimistic results will likely help push the Dollar lower. Looking at the bigger picture, the greenback may extend its losses as the global economic recovery will lead investors to go short on U.S. assets. This may come about due to the large budget deficit and an extended period of near zero Interest Rates employed by the Federal Reserve. A divestment away from the USD may be a natural process, as the global monetary system seeks to rebalance itself.

EUR - EUR Rallies against Dollar and Yen
The EUR rallied against the Dollar and Yen in Monday's trading. This comes about as the EUR/USD cross seeks to approach the 1.5000 level. Both the Euro-Zone and Britain recorded an impressive equity market rally, which was sparked by that of the U.S. However, the global equity market rally was initiated by better corporate earnings from the U.S. The EUR and GBP also benefited, as both the Euro-Zone and Britain were on the backburner of economic news yesterday. However, it should be noted that the EUR was the main benefactor on Monday.

The EUR/USD pair went 85 pips higher to the 1.4964 level. The GBP/USD cross climbed by 65 pips to 1.6403. Meanwhile, the EUR/GBP cross went marginally higher, and the EUR made some inroads into the JPY. On the other hand, the British currency fell vs. the CHF, despite rising over the previous several sessions. When we aren't speaking about the Dollar, it does get a bit harder to predict future trends for the EUR and GBP's main crosses. However, stronger economies will likely benefit these 2 currencies.

Looking ahead to today, there is set to be much vital data coming out of both Britain and the Euro-Zone. From Britain, there is the Public Sector Net Borrowing at 20:30 GMT, and the crucial speech by Bank of England (BoE) Governor Mervyn King. From the Euro-Zone, there is the expected German PPI at 06:00 GMT. The results of today's economic news are likely to set the expectations for both the GBP and EUR for mid-week trading. Additionally, these 2 respective currencies will be strong affected by developments from the U.S.

JPY - Yen Goes Mixed against the Majors
The Yen recorded some mixed results vs. its major currency pairs. The Japanese Yen rose by nearly 20 pips to the 90.69 level against the USD. Versus the GBP, the Yen lost 15 pips, as the pair failed to find a clear direction in Monday's trading. With regards to the EUR/JPY cross, the Yen lost nearly 60 pips, as the pair approaches the 135.80 level. The JPY seems to be losing out, due to being on the backburner of global economic news. Moreover, Japan's new government has been unclear on which direction it wants to take the Yen.

The Yen will be one of the key currencies to watch today. This is as mid-week trading approaches, and global investors seek to find more clues about the future direction of Japanese monetary policy. The Japanese Central Bank has yet to announce a full cut back in assisting industry. This decision is likely to be prolonged, as long as the economic situation continues to be unstable. This is likely to continue to destabilize the Japanese currency for the weeks to come.

OIL - Crude Oil Hits $80 a Barrel!
The price of Crude Oil hit $80.04 a barrel in Monday's trading, a 1-year high. This occurred as a rally in global equities drove investor confidence higher. This was due to expectations that a continued economic recovery will push fuel consumption higher. Crude has now gone higher for its 8th consecutive day, the longest time in 2 years. This comes as additional cash is added to the global economic system, and the USD has continued to decline. As a result, this has boosted demand for commodities such as Crude Oil.

As long as the USD is bearish and global equities are bullish, then Crude is likely to be a wise investment according to many economists. At the moment at least, this does seem to be correct, as Crude has been a profitable investment recently. If data from the U.S. today proves to be positive, then Crude's upward trend may continue for a 9th consecutive day. In the meantime, Oil traders should open their positions in the black gold as the trading day unfolds.

Technical News

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

GBP/USD
There appears to be a bearish cross forming on the 4H chart's Slow Stochastic, signaling an impending downward correction. As other oscillators are showing the price floating in neutral territory, and the Bollinger Bands tightening on this chart, there is a possibility of a volatile bearish movement in the making. Going short with tight stops might be a good strategy today

USD/JPY
After yesterday's moderate downward movement, this pair now appears to be leveling off as all oscillators and indicators are displaying neutrality. It's possible a trend-reversal is in the making, but traders may want to wait for a clearer signal before going short on this pair today.

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

The Wild Card

Gold
The price of this commodity appears to be floating in the over-bought territory on the RSI of the daily and 4 hour charts, indicating a bearish correction to the recent upward movement may occur later today. The imminent bearish cross on the hourly chart supports this notion. As the price of this commodity has discovered a new range to trade in, forex traders can benefit greatly from selling on highs and buying on lows within this price zone.

Published on  Tue, Oct 20 2009, 10:24 GMT

Forex Trading − Bernanke's Speech to Dominate the Market Today

Mon, Oct 19 2009, 08:44 GMT
by Greg Holden

ForexYard

Following a week that predominately delivered remarkable record highs for gold, in addition to new lows for the Dollar; the main question is whether this trend will extend. Perhaps not and we'll witness a change in trends this week. Federal Reserve Board Chairmen Ben Bernanke is due to deliver a speech today which might set the tone for the major currencies, and may just help to clarify the picture of today's market.

Economic News

USD - Dollar Drops to a Year Low against the Euro
Last week the Dollar saw mainly downtrends against the major currencies. The USD dropped to a 14-month low against the EUR, as the EUR/USD pair reached the 1.4965 level. The Dollar weakened against the Pound as well, hitting as low as 1.6395.

It appears that the Dollar dropped due to some positive data from the U.S economy. The Core Retail Sales rose by 0.5% in September, beating expectations for a 0.3% rise. The core report measures the change in the total value of sales at the retail level, excluding automobiles and airplanes, due to their large volatility. The Core Consumer Price Index rose by 0.2%. This was the 9th consecutive time that this crucial indicator rose, and is one of the strongest signs that the American economy is recovering.

Last week's trading session proved once again that positive data from the U.S economy is continuing to only drives investors into riskier investments, and not yet into the Dollar. Furthermore, it seems that positive publications from the U.S help support the Euro, as the European nations rely greatly on U.S consumption.

As for the week ahead, many influencing news events are expected from the U.S economy. The housing data seems to be the most intriguing data this week as the Building Permits are expected on Tuesday and the Existing Home Sales on Friday. Many analysts share the assumption that the real-estate bubble has caused this recession, and thus only the housing sector can pull the economy out of recession. This means that the results of these reports should have a large impact on the market, and traders should use it as best they can in their trading tactics.

EUR - Euro Rises despite Negative Data
The Euro rose against most of its major counterparts during last week's trading session. The EUR rose to a 14-month high against the Dollar as the EUR/USD pair reached the 1.4965 level. The Euro also saw a bullish trend against the Yen.

The Euro rose last week despite some relatively negative data published from the Euro-Zone. The most crucial publication was the German ZEW Economic Sentiment, which is a survey of about 350 institutional investors and analysts who are asked to rate the next 6-month outlook for Germany. The survey dropped to 56.0 from 57.7 on September, failing to reach expectations of a 58.6 reading. The European Core Consumer Price Index for September dropped by 0.3%. This marked the 4th drop in a row. Consumer prices account for a majority of overall inflation, and thus a repeatedly negative results show that maybe the European economies aren't recovering as quickly as expected.

Nevertheless, despite some unfortunate figures from the Euro-Zone, the Euro appreciated against most of the major currencies. It seems that the main reason for this turn of events is the weak Dollar, which boosted the Euro. As long as the Dollar continues to fall against the majors, the Euro is likely to continue appreciating.

Looking ahead to this week, many interesting data releases are expected from the Euro-Zone. The most impacting publication is likely to be the German Ifo Business Climate report. This report is a survey of about 7,000 business who are asked to rate the current business conditions and expectations for the next 6 months. If this report will also fail to reach expectations it has the potential to reverse the Euro's currently bullish trend.

JPY - Yen Drops against the Majors
The Yen saw an extremely bearish session during last week's trading. The Yen dropped against the Dollar, the Euro and the Pound. This was the most remarkable drop the Yen has experienced against the Pound, as the GBP/JPY pair rose by about 600 pips and is currently traded at the 148.40 level.

The Bank of Japan (BoJ) chose to leave the Japanese Interest Rates at the 0.10% level, the lowest in the industrial world. The BoJ's policy is quite clear. Its purpose is to keep the Yen as low as possible in order to help the Japanese exporters. The objective behind it is that the BoJ believes that raising exports will be the greatest aid to the troubled Japanese economy, and thus chooses to have the lowest rates in the world as a tool to reach this target. For the time being it seems that the BoJ's plan is working, and the Yen is indeed weakening.

As for this week, a batch of data is expected from the Japanese economy. However the most impacting economic publication looks to be the Trade Balance, expected on Wednesday. The Trade Balance measures the difference in value between imported and exported goods and services during September. Due to the high dependence of the Japanese economy on its export, this report tends to have a large impact on the Yen. If the end result will reach expectations for a 0.38T rise, the Yen is likely to be supported as a result.

Crude Oil - Crude Oil Almost Reaches $80 a Barrel!
Crude Oil continued to rise during last week. Crude Oil saw a very strong and coherent bullish trend during almost all of last week's trading sessions. By the end of the week a barrel of oil had risen in price by $6 and is currently trading near $79.

The most significant reason for the rally of crude oil is the sliding Dollar. Because Crude Oil is traded in Dollars, the usual affect of the weakening Dollar is the strengthening of oil.

Furthermore, in a week that the USD saw a 1-year low against the Euro, and the EUR/USD pair almost reaches the 1.50 level, crude oil prices are likely to appreciate. In addition, the batch of positive data from the U.S economy last week has reinforced the sensation that the global economy is indeed recovering. Investors assume that this means that oil demand will increase as a result, and thus the price of crude oil rose.

Looking ahead to this week, traders are advised to follow the major publications from the U.S and the Euro-Zone as they will have an immense effect on the value of oil. In addition, traders should also follow the Crude Oil Inventories weekly report, which is expected on Wednesday. This report tends to have an immediate impact on crude oil, and traders should take advantage of it.

Technical News

EUR/USD
The indicators on this pair's daily chart appear to be showing strong downward signals today. A fresh bearish cross on the daily Slow Stochastic, followed by a downward cascading movement suggests that today may see downward mobility. The price also appears to have turned downwards and begun exiting the over-bought territory on the daily RSI, which suggests very strong downward pressure. Going short may be a wise choice today.

GBP/USD
The price appears to be floating in the over-bought territory on the 4-hour RSI, and has turned downwards, which suggests moderate downward pressure. The fresh bearish cross on the daily Slow Stochastic supports the downward notion. Going short appears to be today's preferable tactic.

USD/JPY
There appears to be a fresh bearish cross on the 4-hour MACD, indicating a downward correction is imminent. The price is also floating in the over-bought territory on the 4-hour RSI, which supports this notion. Going short on this pair may not be a bad idea.

USD/CHF
The fresh bullish crosses on the daily Slow Stochastic and 4-hour MACD both suggest that this pair is due for an upward correction in the immediate future. As the price has just left the over-sold territory on the daily RSI, it appears as if the move may be muted somewhat. Going long with tight stops may be preferable today.

The Wild Card

CHF/JPY
This pair is beginning to show very strong signs of an impending downward movement today. The daily chart's Slow Stochastic shows 3 consecutive bearish crosses, and the 4-hour MACD shows 2 bearish crosses. This suggests very strong downward pressure and forex traders can take advantage of this knowledge by entering short positions on this pair, and at a great entry price!

Published on  Mon, Oct 19 2009, 08:44 GMT

Forex Trading − Forex Market to be Dominated by Crucial U.S. Data Today

Fri, Oct 16 2009, 09:21 GMT
by Greg Holden

ForexYard

The movement in the forex market today is set to be driven by the release of crucial U.S. data. Amongst the most important of these publications are the TIC Long-Term Purchases, Industrial Production and Prelim UoM Consumer Sentiment. Better than forecast data may push-down the USD, and push-up demand for higher-yielding assets, such as the crude Oil Gold and the GBP. In the meantime, you should enter the forex market now to take advantage of the current trends.

Economic News

USD - Dollar Plummets to a Near 4-Week Low vs. the Pound
The Dollar dropped to a near 4-week low vs. the British Pound, but went higher against the Japanese Yen at the end of a volatile trading day Thursday. All of this was after the release of mixed U.S. economic data. The Dollar index traded at 75.470 yesterday, compared to 75.513 Wednesday. This was despite rising to as high as 75.765 at one point on Thursday.

The number of people filing for state unemployment benefits fell by 10,000 to a seasonally adjusted 514,000 the previous week, better than the expected 524,000. The U.S. Consumer Price Index (CPI) rose a seasonally adjusted 0.2% in September, which was also a better than expected result. On the other hand, manufacturing activity in the Philadelphia Federal Manufacturing Index expanded at a weaker than expected pace in October. The index declined to 11.5 this month from 14.1 in September. Overall the data had a slightly negative affect on the Dollar, and the bleak Dollar sentiment remains with the EUR/USD pair currently trading around $1.4925.

Looking ahead to today, the release of the TIC Long Term Purchases at 13:00 GMT, the Industrial Production report at 13:15 GMT and the Prelim UoM Consumer Sentiment at 13:55 GMT will likely provide great volatility to the USD, possibly pushing the EUR/USD beyond the $1.5000 level.

EUR - Pound Soars versus the USD and EUR
The British Pound climbed 1.8% versus the Dollar on Thursday, as the cross jumped to $1.6398 from $1.5975 late Wednesday. The Pound also jumped versus the EUR, sending the shared currency down 1.8% by yesterday's close.

The Pound experienced its first weekly gain in a month versus the USD on optimism that the Bank of England (BOE) will suspend the asset purchases program, after Paul Fisher, an official with the Bank of England, signaled satisfaction with the impact of the central bank's money creating quantitative easing program. Since this program is essentially flooding the market with Pound Sterling by printing currency, the program has weighed on the GBP. The anticipated ceasing of the program in the coming months is likely to boost demand for the Pound.

The EUR dipped against the Dollar on Thursday, despite speculations that the European Central Bank (ECB) officials will signal today that the bank may begin withdrawing unconventional policy measures, which will boost demand for higher-yielding assets. With Trade Balance data being the only release expected from the Euro-Zone today at 09:00 GMT, the EUR's movements will likely be affected by the data releases coming from the U.S.

JPY - Yen Continues its Decline against the Majors
The Yen continued its decline against the EUR and GBP, on speculation Asian stocks will extend a global rally and before a U.S. report forecast to show industrial production expanded for a third month, boosting demand for higher-yielding assets. The Japanese currency also depreciated against the USD. The Yen touched 136.03 per EUR, its lowest level since August 24, and is currently trading at 135.54 per EUR, from 135.35 in New York yesterday.

The currency slid to as low as 90.99 per USD, the weakest since September 25, and is currently at 90.90 from 89.46 yesterday. With no economic data expected from Japan today, the Yen's strength will likely be determined by movements in global equities. Therefore, it is highly recommended that you open JPY positions as soon as possible.

OIL - Crude Jumps above $78 a barrel
Crude Oil rose for a fourth day to $78 a barrel after jumping more than 3% yesterday on an unexpected drop in U.S. gasoline and distillate stocks. This helped Oil reach its third weekly gain, along with increasing optimism from the leading economies. It is right to day that the recent global equity rally and the weak USD have helped Crude Oil benefit greatly.

The second consecutive week of drops in stockpiles yesterday may help push prices to the $80 level, and the rise in Oil prices will likely continue throughout next week as well. Watch out for fluctuations in the USD and the strength of the global economy today, as these factors will directly impact the price of Crude Oil.

Technical News

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

GBP/USD
The GBP/USD cross has experienced a bullish trend for the past 3 days. However, it seems that this trend may be coming to an end. The RSI of the 4-hour chart shows the pair floating in the overbought territory, indicating that a downward correction will happen anytime soon. Going short with tight stops might be a wise choice.

USD/JPY
According to the 4-hour chart, the pair has shown considerable bullish strength in its attempt to breach the 91.00 resistance level. However, the chart's Relative Strength Index shows the pair is trading in the overbought zone, indicating the potential for a downward correction. Traders may look for the correction to begin and go short.

USD/CHF
The daily chart is showing strong bullish signals. The Slow Stochastic Oscillator displays a bullish cross has formed, indicating the potential for an upward price move. This is supported by the pair's RSI floating in the oversold region, representing the opportunity for the pair to appreciate. These two indicators may give traders the incentive to be long on this pair today.

The Wild Card

Crude Oil
Oil prices rose significantly in the last two weeks and peaked at 78.36 per barrel. However, the daily chart's RSI is floating in an overbought territory 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.

Published on  Fri, Oct 16 2009, 09:21 GMT

Forex Trading − U.S. Unemployment Claims to Be at the Forefront of Today's Trading

Thu, Oct 15 2009, 09:33 GMT
by Greg Holden

ForexYard

The U.S. Unemployment Claims and U.S. Core CPI data are set to drive forex trading today when they are released at 12:30 GMT. If strong economic data continues to be published from the U.S, U.K and Europe today, combined with strong equity performances this may continue to lead to a sell-off of safe haven currencies today, and push investors to higher yielding, riskier currencies as many see the global recession coming to an end. This could also push Crude Oil to the $77 price level.

Economic News

USD - Dollar Falls to a 14-Month Low
The Dollar fell to a fresh 14-month low against most of it major currency pairs yesterday, as solid earnings by JP Morgan Chase, and rising stock and commodity prices stoked optimism for an improving global economy. By yesterday's close, the USD fell against the EUR, pushing the oft-traded currency pair to 1.4959. The Dollar experienced similar behavior against the GBP and closed at 1.6054.

The Dollar, which has been a safe-haven investment previously, was hit by the sharp rise in profit reported by JP Morgan Chase, as well as forecast-beating earnings from Intel Corp late on Tuesday. These factors all helped brighten the economic outlook, and encouraged investors to move into perceived riskier and higher-yielding currencies.

The greenback also remained under broad selling pressure on expectations that U.S. Interest Rates will stay at very low levels for some time, following comments by Federal Reserve Vice Chairman Donald Kohn on Tuesday. Low rates reduce the attractiveness of U.S. assets and ease demand for the Dollars to buy them.

Looking ahead to today, the two main news events that may have a very large impact on the Dollar and its main currency pairs in today's trading are the Core CPI and Unemployment Claims at 12:30 GMT. These reports are very important, as they are likely to greatly impact the value of the USD. Traders should pay close attention to the market as there is an opportunity for traders to capitalize on the fluctuations which are likely to follow today's key data publications.

EUR - EUR Rises on Increased Optimism
The EUR rallied against the Dollar yesterday after minutes from the last meeting of the Federal Reserve's policy-setting panel showed officials expect inflation to remain subdued for some time. The EUR touched a fresh 14-month high versus the Dollar above 1.4950, a fresh session high and it's highest since August 2008. The European currency finished around 100 pips higher against the JPY to finish yesterday's trading session at the 133.75 level.

Another leading indicator released yesterday was EUR Industrial Production. European industrial output rose for a fourth month in August, adding to signs the Euro-Zone economy is emerging from the recession. Production in Europe increased 0.9% from July, when it gained 0.2%.

Confidence in the European economic outlook improved to a one-year high last month, and a gauge of Euro-Zone manufacturing and services industries showed a stronger expansion than initially estimated. The survey showed a significant improvement, thereby boosting hopes that the rate of decline in the Euro-Zone economy is now moderating.

Sentiment in the Euro Zone economy has brightened in the past week following better-than-expected news. The EUR is showing signs of resilience even though there was volatility throughout non-EUR crosses. It will be crucial for traders to identify how the preceding economic indicators from the U.S., European and Japanese economies will affect their positions.

JPY - Yen Loses Ground on All Fronts
The Japanese Yen fell sharply against most of its major currency crosses on Wednesday after the Bank of Japan deferred a decision on when to end support for corporate finance after the government pressed the central bank to consider the economic cost of its retreat from credit markets. By yesterday's close, the JPY fell against the EUR, pushing the oft-traded currency pair to 133.75. The Japanese Yen experience similar behavior against the GBP and closed at 143.65.

The central bank had been tipped to decide whether to stop corporate bond purchases and other measures used to cushion the shock of the financial crisis. BOJ Governor Masaaki Shirakawa suggested that an exit from the corporate finance market was a foregone conclusion and that the debate was primarily about timing. The decision on support for corporate finance could be taken at the next meeting at the end of October.

Crude Oil - Crude Oil Rises Above $75 a Barrel
Oil prices rose yesterday above $75 a barrel for the first time in a year because of a weak Dollar and the belief that the upcoming holiday shopping season will bring more traffic to the roads. Also helping to lift oil prices was the Dow Jones Industrials Average, which hit a new annual high, and pushed past the 10,000 mark for the first time in more than a year.

A plunge in the Dollar lately has convinced many investors to pump money into Crude as a hedge against inflation. Today, traders are advised to the major economic indicators which will be published from the U.S., such as the Crude Oil Inventories at 15:00 GMT. If the USD continues to weaken today, $80 a barrel seems like a very realistic target for the end of the week.

Technical News

EUR/USD
The EUR/USD cross has been experiencing much volatility lately, and currently stands at the 1.4960 level. The chart's RSI shows that the pair is currently floating in the overbought territory, and a downward correction is imminent. This view is also supported by the MACD of the 4-hour and weekly charts. Entering the pair now before the downward breach occurs may turn out to pay off today.

GBP/USD
The cross is currently recording very bullish behavior in the past 2 days, and there may be room for even further bullishness in this pair today. The Slow Stochastic of the daily chart shows a fresh bearish cross, and that a further upward move for today is imminent. Going long with tight stops may turn out to be a wise choice today, as end-of-week trading nears.

USD/JPY
The USD/JPY cross has become very volatile lately, and currently stands at the 89.37 level. On the one hand, the RSI of the weekly chart shows the pair floating in the overbought territory. On the other hand, the MACD of the daily chart supports a further bullish move for today. Entering the pair when the signals are clearer seems to be the right choice for today's trading.

USD/CHF
The cross has recently recorded a 3-day losing streak, and there are signs for further volatility for the pair today. The RSI of the daily chart shows the pair sitting in the oversold territory. On the other hand, the RSI of the weekly chart shows that the pair is overbought. It may be a good to enter the pair when the signals are clearer.

The Wild Card

Crude Oil
Crude Oil has been an extremely bullish and attractive commodity for forex traders in the past 2 weeks. The daily chart's Slow Stochastic shows a fresh bearish cross, signaling that a downward move for today is imminent. The bearish move for today's trading is also supported by the MACD of the 4-hour chart. Going short with tight stops may turn out to bring big returns for today.

Published on  Thu, Oct 15 2009, 09:33 GMT

Forex Trading − The Dollar Retreats as Commodities Hit New Highs

Wed, Oct 14 2009, 08:33 GMT
by Greg Holden

ForexYard

The U.S. Dollar fell against a basket of currencies to within sight of recent lows on Tuesday as Gold hit a new high and Oil prices strengthened. The USD and commodities are often inversely correlated, with Gold and Oil priced in dollars and seen as an alternative currency and hard asset themselves. Ahead of U.S. corporate earnings figures and speeches from Federal Reserve officials later in the day, currency investors continued to speculate about when the U.S. central bank will tighten its monetary policy, thus putting more pressure on the U.S currency.

Economic News

USD - Dollar Trades near 14-Month Low as Investors Favor Gold
The U.S dollar traded near a 14-month low against the EUR as signs that the global economy is recovering spurred demand for higher-yielding assets. The greenback declined to the highest since August 2008 to $1.4828, down from $1.4786 in late trading.

The USD slumped versus major counterparts on Tuesday as investors favored gold, often viewed as the most stable commodity. With the greenback's losses softened by a drop in U.S. stocks amid concerns about the strength of the economy's recovery, analysts have said that traders look to gold as a hedge against inflation and market volatility. Following the enormous bailout packages of 2008-09, inflation has become a real concern. As a result, gold has become largely important as a hedge in today's market.

Analysts also noted reports about what central banks are doing with their reserves that indicate a shift away from the U.S. currency, confirming a long-standing fear in the market. The U.S dollar may decline further today before a government report forecast to show U.S. consumer prices gained last month, curbing demand for safe-haven assets.

EUR - EUR Hits Record Highs
The EUR rose to nearly $1.49 against the USD, its highest level since August 2008, just before the demise of investment bank Lehman Brothers' pushed the global banking system to the edge of collapse and sparked a frenzy of Dollar buying by investors eager to dump riskier currencies.

The European currency strengthened on investors' fear that a weak U.S. labor market and a protracted recovery will keep Interest Rates near zero well into 2010.That makes holding low-yielding U.S. dollars unattractive, and any appeal the greenback has would be dulled further if other major central banks start lifting interest rates as growth picks up.

The British pound was within 1 penny of its lowest level in more than 6 months against the EUR after a business group said the Bank of England should expand asset purchases, and as inflation slowed more than forecast. The currency slid to 94 pence per EUR today, for the first time since March 27, before recouping its losses.

Meanwhile, against the U.S. Dollar, the GBP rebounded from the weakest level since May gaining 0.6% to $1.59. The U.K currency declines may be limited, however, as some indicators show signs that the economy is recovering after the central bank cut its benchmark interest rate to a record low of 0.5% and started buying assets to further depress borrowing costs.

JPY - Yen Gains as Equity Markets Move Lower
The Japanese yen climbed against the EUR and U.S. Dollar as falling producer prices and stocks in Japan boosted demand for the nation's currency as a refuge. The Yen climbed to 132.85 per EUR from 133.26 yesterday. Japan's currency strengthened to 89.36 to the Dollar from 89.71.

Japan's producer prices fell for a 9th consecutive month as oil traded lower than last year's levels and demand for materials waned. The costs companies pay for energy and unfinished goods declined 7.9% in September from a year earlier after sliding a record 8.5%, the Bank of Japan said today. The Yen's 11% gain against the U.S. Dollar in the past 6 months has also contributed to price declines by making imports cheaper.

The government will cut prices of the grain sold to domestic flour millers by the most in at least 39 years as import costs dropped on a stronger currency and a slump in international prices, the Japanese Ministry of Agriculture, Forestry and Fisheries said this month.

Crude Oil - Oil Reaches towards $75 on OPEC Demand Forecast
Crude Oil prices rose for a 5th consecutive day, trading near $75 a barrel, after the Organization of Petroleum Exporting Countries (OPEC) increased its world energy demand forecast, and the weaker Dollar boosted the appeal of commodities. Oil gained 1.2% yesterday as OPEC raised its 2010 global oil-consumption estimate on expansion in emerging economies.

Also helping Crude move higher, the U.S. Dollar fell to the lowest level in 14 months, lifting dollar-denominated commodity prices. Analysts said that in case the equity markets continue to rise and the U.S. Dollar softens further, it cannot be ruled out that Oil prices will attempt to break the annual high of $75 a barrel in the next few days.

Technical News

EUR/USD
The price of this pair appears to have just entered the over-bought territory on the daily and 4-hour charts' RSI, suggesting downward pressure. The fresh bearish cross on the hourly chart may indicate that the move is more immediate. If this downward correction can breach the bullish channel of this pair, then going short will be a very wise strategy.

GBP/USD
It looks as if there are fresh bearish crosses on the hourly and 4-hour Slow Stochastic indicators, suggesting an imminent downward correction for this pair. As the price is currently cascading downward out of the over-bought territory on the hourly RSI, the downward notion appears to be justified. Going short with tight stops could be a smart move today.

USD/JPY
The price has turned upward and begun to exit the over-sold territory on both the hourly and 4-hour RSI, suggesting an upward trend reversal is taking place. The fresh bullish cross on the hourly Slow Stochastic supports this notion. Going long appears to be today's preferable strategy.

USD/CHF
It seems like there are brand new bullish crosses on the hourly Slow Stochastic and MACD, suggesting that an upward correction is overdue. With the price just entering the over-sold territory on the 4-hour RSI, the upward pressure appears to be mounting. Going long on this pair could be today's best choice.

The Wild Card

Crude Oil
With upward corrections due for the USD, a correlating downward correction is also building up for the price of Crude Oil. There are bearish crosses on the hourly and daily Slow Stochastic, the price is floating in the over-bought territory on the hourly, 4-hour, and daily RSI, and the hourly MACD has started tilting downwards. Once the downward correction begins, which should happen any minute now, forex traders will have an excellent opportunity to enter the price swing at this year's peak price level.

Published on  Wed, Oct 14 2009, 08:33 GMT

Forex Trading − U.S. Federal Budget Balance Set to Determine Forex Trading Today

Tue, Oct 13 2009, 08:43 GMT
by Greg Holden

ForexYard

The result of the U.S. Federal Budget Balance is set to be the main driver of volatility for the US Dollar and forex trading in general today. The other releases that are expected to be key to the forex market's volatility are the German ZEW Economic Sentiment, the British CPI and BOE Inflation Letter.

Economic News

USD - Dollar Plummets on Global Economic Recovery
The U.S. Dollar plummeted in Monday's trading on continued signs of a global economic recovery. The Dollar Index, which tracks the USD's performance vs. the EUR, Pound, Yen, Swedish Krona and Swiss Franc, dropped 0.4% to the 76.162 level. The USD's decline was accelerated, as the U.S. equity market rallied, led by the Dow Jones and S&P indices. The USD's decline yesterday came at a time when there was irregular volatility and low liquidity in the forex market, due to the Columbus Day bank holiday in the U.S. The USD's losses were exuberated as traders dropped the USD in favor of the EUR and AUD.

The EUR/USD cross rose by a solid 180 pips in yesterday's trading to the 1.4780 level. The USD also declined significantly against the Canadian and Australian Dollar, as both of these economies continue to grow quicker than the U.S. Moreover, the currencies of these energy dependent economies have continued to benefit from the surge from the bullish energy prices lately. The upside of the USD on Monday was the bearish behavior of the GBP/USD cross, as the pair closed at the 1.5800 level, marking a 3-day losing streak for the Pound.

Looking ahead to Tuesday's trading, there are plenty of opportunities that are out there for USD traders. The leading indicators from the U.S. economy are expected to be the Federal Budget Balance and IBD/TIPP Economic Optimism figures. If the end results show vast improvements, then the USD's bearish trend may continue. In addition, such results could lead investors to go bullish on the leading commodities, such as Gold, Silver and Crude Oil, which would further push-down the USD. It is also recommended that you follow data from the Euro-Zone and Britain, as this will directly affect the USD throughout the trading day.

EUR - Pound Falls to 5-Month Low vs. EUR
The British Pound fell to a 5-month low against the EUR in yesterday's trading. The key reasons for this was the British FTSE 100 rising to a 1-year high, expectations that Britain's Interest Rates will stay low for the next several months and increasing optimism stemming from present economic outlook. Furthermore, traders ditched the Pound as key economists stated that they expected the GBP money printing program to expand in the coming months, which may push the EUR/GBP cross to parity by the end of the year. However, we will have to wait and see if this actually occurs, as some are still skeptical.

The EUR/GBP cross rose to as high as the 0.9382 level to finally close at the 0.9353 level. The GBP's downtrend against the USD continued and the pair closed at 1.5800. This was despite a weak USD in Monday's trading. The EUR on the other hand made a 180 pip gain vs. the USD to close at the 1.4780 level. The European currency also made inroads into the Japanese Yen. The current trends for the GBP and EUR may continue, as long as the global economy continues to recover.

There is plenty of economic news that is expected from both the Euro-Zone and Britain on Tuesday. From Britain, the British CPI and RPI that are expected to be published at 8:30 GMT. Additionally, forex traders are advised to follow the British BOE Inflation Letter. Optimistic results are likely to offer much support for the GBP, which would reverse the recent bearish trend for the Pound. With regards to the Euro-Zone, there will be the publication of the German ZEW Economic Sentiment at 9:00 GMT. A positive result may extend the current bullish trend of the EUR in today's trading.

JPY - Yen Records Mixed Results against the Majors
The Japanese Yen recorded mixed results vs. the main currencies yesterday. This comes about as the Bank of Japan (BoJ) makes its decision on whether or not to begin concluding its credit-easing program, as many businesses have regained access to private funding. Despite this, it is expected that Japan will keep its Interest Rates at about 0.1% through 2010. Therefore, this will continue to keep the volatility high in the forex market, even if the Japanese economy continues to recover.

The Yen declined vs. the Australian Dollar and the EUR. However, the Yen rose vs. the USD. Also, it went bullish vs. the GBP, as the GBP/JPY cross slumped by 75 pips to the 141.90 level. Traders should pay close attention to the CGPI figures at 23:50 GMT from the Japanese economy. It is also recommended that you follow the key releases from the main industrialized economies, as the key releases are expected to drive the sentiment of the Yen and other key currencies today.

Crude Oil - Oil Rises to a 7-week High
Oil rose to a 7-week high of $73.80, and finished trading at about $73 a barrel. This was largely due to the increased global optimism stemming from the current global economic recovery. Investors inferred from this that demand for Crude Oil will rise significantly in the coming months. One of the main factors helping boost the price of Crude yesterday was the weak Dollar, which encouraged traders to buy-up the black gold as a hedge against inflation.

It seems that as long as the Dollar continues to weaken and the forecast for an acceleration of the global economic recovery continues to increase, then the price of Crude will continue to stay strong. Additionally, if this in fact does occur, then investors will be further encouraged to buy-up high yielding commodities such as Crude Oil.

Technical News

EUR/USD
It appears as if the Bollinger Bands on the hourly chart have begun to tighten in expectation of a volatile movement. Most indications show the pair floating in neutral territory, which is common before a large jump. However, the hourly, 4-hour and daily MACD all show bearish crosses, suggesting a level of downward pressure does exist. Going short may be today's preferable strategy.

GBP/USD
The price of this pair appears to be floating in the over-sold territory on the 4-hour RSI, suggesting upward pressure. The bullish crosses on the hourly MACD support this notion. With an impending bullish cross on the daily Slow Stochastic, the upward movement may be confirmed. Going long could prove to be a wise choice today.

USD/JPY
There seems to be bearish crosses forming on the 4-hour MACD and daily Slow Stochastic, suggesting a relatively strong expectation for a downward correction today. Going short with tight stops may be a good idea.

USD/CHF
Exhibiting similar behavior as the EUR/USD, this pair shows a tightening of the Bollinger Bands on the hourly chart, but with a level of upward pressure. Going long on this pair could prove beneficial in the hours ahead.

The Wild Card

Gold
This commodity continues to show that it is expecting a downward correction. The price currently floats in the over-bought territory of the daily and 4-hour RSI, and there are bearish crosses on the hourly, 4-hour and daily MACD, as well as the daily Slow Stochastic. Signals are strongly in favor of a downward movement in the coming days and forex traders can benefit by riding out this momentum by placing early sell positions.

Published on  Tue, Oct 13 2009, 08:43 GMT

Forex Trading − Could the EUR Strengthen Further?

Mon, Oct 12 2009, 08:29 GMT
by Greg Holden

ForexYard

Following a week in which most of the major currencies remained at relatively steady rates, the Euro stood out in its appreciation against the Dollar, the Yen and the Pound. Will this continue to be the trend this week as well? In addition, during last week, Crude Oil continued to strengthen, and reached over $72 a barrel. Go ahead and make profits from this week's major trends as well.

Economic News

USD - Positive U.S Data Weakens the Dollar vs. the EUR
The Dollar saw an extremely volatile session during last week's trading. The Dollar dropped against the Euro, a drop which sent the EUR/USD pair above the 1.48 level. On the other hand the Dollar also saw a rising trend against the Pound, and the GBP/USD pair dropped below the 1.5815 level.

It seems that the Dollar was largely affected by the positive data which arrived from the U.S economy last week. The Non-Manufacturing Index rose to 50.9 in September, marking the best figure in 16 months. In addition, this was the first time in 12 months that this report delivered a result higher than 50. This means that after 11 months of contracting industry, there are finally signs of expansions. The weekly Unemployment Claims also delivered a relatively positive figure. The report showed that 521,000 individuals filed for unemployment insurance for the first time during the past week, beating expectations for a 543K result. Considering the poor Non-Farm Payrolls figures, an indicator for a stabilizing employment condition in the U.S was much required. However, it appears that the positive data had a negative impact on the Dollar. There are two reasons for that. One, many investors still see the positive signs from the U.S economy as confirmation that the European economies will recover, as they largely depend on U.S consumption. Two, the improving condition of the U.S economy leads some investors to look for higher-yielding assets than the Dollar.

As for the week ahead, as usual, many interesting publications are expected from the U.S economy. Traders are advised to pay attention to the Retails Sales reports on Wednesday, the Consumer Price Indices (CPI) and the Unemployment Claims on Thursday, and the Long-Term Purchases report on Friday. Special attention should be given to the Core CPI report, as a higher-than-expected figure is likely to have a notable impact on the market, with the USD included.

EUR - Euro Rises Against the Majors
The Euro rose against most of the major currencies during last week's trading session. The Euro saw rising trends against the Dollar, the Yen and the Pound. The most remarkable rise was against the Pound, as the pair rose to a six month high, reaching the 0.9290 level.

The Euro rose due to some positive data from the Euro-Zone. The European Retails Sales beat expectations for 0.4% drop, and dropped merely by 0.2% during August. The German Factory Orders rose by 1.4% on August. Rising purchase orders signal that manufacturers will increase activity as they work to fill orders, and thus this report shows that the German economy is indeed recovering. This has a significant affect over the Euro, as Germany holds the largest economy in the Euro-Zone. Also last week, the French Industrial Production rose by 1.8%, showing that the French economy is recovering as well. The improvement in the condition of the main economies in the Euro-Zone is very likely to have a positive impact on the Euro. As long as the good news will continue coming from the German and the French economies, the Euro will probably continue to rise.

Looking ahead to this week, the most impacting data seems to be the German ZEW Economic Sentiment, which is expected on Tuesday. It is a survey of about 500 German institutional investors and analysts who are asked to rate the next 6-minth economic outlook for Germany. As such, this report has an immense impact on the Euro, and traders should follow it, as a result above 60.0 is likely to push the Euro further upward against the major currencies.

JPY - Japan's Interest Rates Announcement Expected on Wednesday
The Yen saw a relatively peaceful trading session during the past week. The JPY usually kept steady rates against the Dollar and the Yen, without too many ups and downs. However the Yen did mark a downtrend against the Euro, as the EUR/JPY pair rose above the 132.30 level.

The Yen's stabile session might be the result of the mixed data from the Japanese economy. On one hand, the Japanese Current Account, which measures the difference in value between imported and exported goods and services for August, rose to 1.23T. This is wonderful news for the Japanese economic leaders who see the export of Japan as the premier parameter in the economic recovery. However, the Core Machinery Orders, which is a leading indicator of economic health failed to reach expectations for a 2.2% rise, and rose merely by 0.5% in August. Following September's 9.3% drop, this still shows that the Japanese economy is yet to pull out of recession.

As for this week, numerous data is expected from the Japanese economy, yet the most intriguing publication seems to be the Over Night Call Rate. This is in fact the Japanese interest rates announcement. Analysts forecast that the Bank of Japan (BoJ) will leave rates on 0.10%, the lowest in the industrial world. However, if the BoJ will surprise and hike rates, this will have a stunning effect on the Yen. Traders are advised to take this news event under consideration for this week's trading.

Crude Oil - Crude Oil Strengthens on Weak Dollar
Crude Oil prices continued to rise during the past week. After seeing an extremely volatile session, which included many ups and downs, a barrel of crude oil finally stabilized on $72.

Crude Oil's rising trend came as a result of two main reasons, the drop of the Dollar against the Euro, and unexpected negative U.S supplies data. The drop of the Dollar had its usual affect on commodities. Because commodities are valued in Dollars, when the Dollar weakens, it tends to support commodities such as Crude Oil. Another good example for this activity last week was gold. Gold rose to an all time record due to the weak Dollar. In addition, the unexpected drop of the U.S Crude Oil Inventories also contributed to the strengthening Oil. The inventories dropped by 1.0M barrels during the past week, and lower supplies created speculations for a higher demand for oil, which eventually elevated crude oil to reach over $72 a barrel.

As for the following week, traders are advised to follow the main economic publications from the U.S and the Euro-Zone, as they tend to have a large effect on Oil's value. In addition, traders should focus on the U.S Crude Oil Inventories expected on Wednesday, as this report has proven to have a large impact on Crude Oil's trading.

Technical News

EUR/USD
The typical range trading on the hourly charts continues, with the RSI floating in neutral territory. However, a fresh bullish cross might be forming on the hourly MACD indicating a bullish correction might take place in the nearest future. Going long might be a wise choice.

GBP/USD
A bullish correction appears to be taking place for the pair, which experienced a very long bearish trend this past week. a fresh bullish cross is evident on the hourly and daily MACD as well as the 4 hour Slow Stochastic. Furthermore, the 2 and 4 hour RSI is floating in the oversold territory.

USD/JPY
A bearish day might be expected for the pair as a fresh bearish cross is apparent on the hourly, 2 hour and 4 hour Slow Stochastic as well as the daily MACD and with the hourly, 2 hour and 4 hour RSI floating in the overbought territory. Going short for today might be advised.

USD/CHF
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.

The Wild Card

CHF/JPY
After the pairs recent bullish run a bearish correction might be expected today. A fresh bearish cross is evident on the hourly Slow Stochastic and with a bearish cross forming on the 2 hour and 4 hour charts. Furthermore, the 2 and 4 hour RSI is floating in the overbought territory. Forex traders are advised to go short for the day

Published on  Mon, Oct 12 2009, 08:29 GMT

Forex Trading − Dollar Boosted Slightly by Ben Bernanke's Speech

Fri, Oct 9 2009, 10:18 GMT
by Greg Holden

ForexYard

Federal Reserve Chairman Ben Bernanke's speech yesterday gave a much needed boost to the Dollar against its major currency counterparts, particularly the JPY. Bernanke shifted to a more hawkish tone in terms of the timing of exit strategy following moves by other central banks, stating the bank is ready to tighten monetary policy once the economy improves. ECB President Trishet also supported a strong Dollar in his statement yesterday.

Economic News

USD - Dollar Recovers Losses after Trichet-Bernanke Exchange
While starting the day with bearish tendencies, the US Dollar seemingly rebounded in later trading. Spiking to as low as 1.4820 against the EUR, the USD recovered and is currently trading just above 1.4700. Similar price swings were experienced against the JPY, CHF and GBP yesterday as well.

Positive economic data, a boost in market confidence and a consequent rise in equities all took their toll on the greenback in today's early trading hours. However, the buck saw a rebound following statements from European Central Bank President Jean-Claude Trichet which was less hawkish than anticipated. Better than expected figures in the US Unemployment Claims report also added a small boost in USD appetite.

Later in the day, Federal Reserve Board Chairman Ben Bernanke spoke, responding to Trichet's comments with a verification of tightening monetary policy to help keep the Dollar strong. Trichet's remarks were not as forceful as most expected and Bernanke's comments were strong enough to counter some of the EUR's recent gains, leading the greenback to a late-session rally Thursday evening.

Looking ahead to the end of this week's trading, there are 3 important pieces of data to consider today. First is a speech being made by Trichet at a university in Venice, Italy. After yesterday's comments about forex markets, the EUR and the USD, Trichet may use this speech to reiterate some sentiments regarding the EUR's recent bullish movement. Later in the day, the US will report its trade balance figures, but more importantly, Canada will be releasing its Unemployment Rate as well as some important housing numbers. The CAD may be one of the day's leading market movers and traders need to keep an eye on it in order to make some reasonable profits.

EUR - EUR/CHF at Trend Peak, Due for Downward Correction
The EUR experienced mixed results today against its primary currency rivals. Following the European Central Bank's (ECB) monetary policy statement, the EUR saw reversal to its previous upward movements, and Federal Reserve Board Chairman Bernanke's comments later in the day only reinforced the USD's ascent versus the 16-nation currency. The EUR finished the day against the USD at 1.4723, and down around 0.9190 against the Pound Sterling.

While holding interest rates steady, both the Bank of England (BOE) and the ECB expected to see moderate gains directly afterward. However, ECB President Trichet's comments were seen as less forceful than was expected and resulted in a corrective move against its primary rival, the US Dollar.

The EUR has also reached a peak point versus the Swiss Franc (CHF) in today's trading and many investors are now expecting a reversal to its latest uptrend. This behavior is following suit within a distinct, long-term bearish channel in the EUR/CHF pair.

Today's economic data from the Euro-Zone will be very limited with only a few minor reports being released regarding French and Italian industrial production. But Jean-Claude Trichet is due to speak at a university in Venice and could reiterate some of his stronger sentiments about the EUR's recent bullishness during his talk. Traders should watch for any news regarding this speech as it may be the leading factor in the EUR's movements today.

JPY - JPY Falls before Holiday Weekend
The Japanese Yen appeared to take a hit across the boards in today's trading. The JPY closed the day down against most of its primary currency rivals. The GBP/JPY pair ended Thursday's trading at 142.89, while the USD/JPY finished at 89.15. It doesn't appear as if the JPY has broken out of its bullish channel versus these major currencies, but yesterday's movements have some investors covering their short positions before the weekend begins.

Adding to this short-position covering is the anticipation of a long weekend in Japan as the island economy gears up to celebrate Health Sports Day on Sunday. Traders are ditching their JPY positions in exchange for other assets which will carry normal volume levels going into the start of a fresh week. This lends credence to the idea that the JPY will begin to recover these losses by Tuesday or Wednesday of next week. As for economic news, Japan has no news being anticipated, which means investors will be focusing on the economies of the West in Friday's trading.


Crude Oil - Crude Oil Price near Short-Term Peak; Correction on the Way?
Crude Oil's price has held steady between $66 and $74 a barrel over the past 3 months and recent price behavior doesn't suggest any changes in this pattern. After climbing back above $70 a barrel this week, the price of Crude Oil has seemingly reached a short-term peak and may head downward as this week comes to an end.

Contrary to this prediction, however, is this week's US Crude Oil Inventory report which showed inventories falling by 1.0 million barrels last week. This news highlights a potential trend of growth in oil consumption, and thus slightly higher demand. If demand is indeed on the rise, traders could see oil prices climb beyond their current level of $71 a barrel and go as high as $73 by early next week.

Technical News

EUR/USD
The typical range trading on the 4-hour chart continues. The daily chart RSI is floating in neutral territory. However, there is a fresh bullish cross forming on the hourly chart's Slow Stochastic indicating a bullish correction might take place in the nearest future. Going long might be a wise choice.

GBP/USD
There is a fresh bullish cross forming on daily chart's MACD indicating a bullish correction might take place in the nearest future. The upward direction on the hourly chart's Momentum oscillator also supports this notion. When the upward breach occurs, going long with tight stops appears to be preferable strategy.

USD/JPY
The daily chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, the hourly Chart's RSI is already floating in the overbought territory indicating that a bearish correction might take place in the nearest future. Going short might be a wise choice.

USD/CHF
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.

The Wild Card

AUD/JPY
The pair may experience a correction to its recent bullish run. A bearish cross is evident on the hourly, 2 hour and 4 hour Slow Stochastic charts and with the RSI floating in the overbought territory on the hourly, 2 hour and 4 hour charts. Furthermore a breach of the upper level of the Bollinger Bands is evident on the 4 hour and daily charts. Forex traders are advised to go short for the day.

Published on  Fri, Oct 9 2009, 10:18 GMT

Forex Trading − Dollar Down Ahead of Key Central Banks Statements

Thu, Oct 8 2009, 08:41 GMT
by Greg Holden

ForexYard

The Dollar is down today as investors await policy announcements from the European Central Bank (ECB) and the bank of England (BOE). Although no interest rate changes are expected, investors will be closely watching any accompanying remarks for clues as to the future of their monetary policy as well as exit strategies. U.S Unemployment Claims are also expected to be released today at 12:30 GMT as well as a testimony by Ben Bernanke at 11:00 GMT.

Economic News

USD - Dollar Falls toward 2-Week Low on Signs of Global Recovery
The U.S. currency weakened against 15 of its 16 most-traded counterparts as Asian stocks advanced and on expectations the European Central Bank (ECB) today will refrain from lowering interest rates amid signs the global economy is recovering.
The USD dropped toward a 2 week low against the EUR as signs the global economy is rebounding spurred demand for higher-yielding assets.

The greenback traded at $1.4753 against the EUR from $1.4691 yesterday. The U.S. currency depreciated earlier this week on concern the Federal Reserve will be slower to raise Interest Rates than policy makers in other nations. The Federal Reserve may start raising its benchmark rate in the 3rd quarter of 2010, according to analysts' forecasts. Expectations that U.S. Interest rates will stay low as the economy tries to pull out of recession mean the Dollar could be the funding currency of choice for carry trades.

The decline in the U.S. Dollar is closely linked to the Federal Reserve's unprecedented efforts to lift the U.S. economy out of the worst recession since the Great Depression. With its target Interest Rate near zero percent and the combination of fiscal stimulus and special Fed lending programs pumping trillions of Dollars into the U.S. economy, the U.S. government is effectively printing more U.S. Dollars. And as a result investors are wary of keeping too large a portion of their assets in U.S Dollars.

EUR - EUR Gains Broadly Ahead of Rates Decision
The EUR gained against the U.S dollar Thursday before a report forecast to show German industrial output rose for a second month, boosting demand for higher-yielding assets. The British pound dropped for a 5th day against the U.S Dollar, falling to $1.5891, from $1.5922, and leaving it 2.8% weaker against the U.S. currency in the past month.

Traders' attention Thursday will be turned to the ECB and the Bank of England's meeting. The ECB is fully expected to leave rates unchanged at a record low 1.0% on Thursday; having given few hints yet it is preparing to end some of its ultra-loose policy measures. The Bank of England meets the same day and is also set to hold rates at a record low 0.5%, while a majority of economists believe it has allocated all it intends to under its quantitative easing program.

JPY - Yen Touches 8-month High vs. Dollar
The Japanese Yen rose versus all 16 major currencies on speculation foreign investors will buy Japanese equities. The Yen rose to the highest level in more than a week against the U.S Dollar on speculation foreign investors will buy into a share sale by Nomura Holdings Inc., Japan's biggest brokerage.

Traders said the JPY gained as market players tried to trigger stop-loss levels in major Yen pairs and as some Japanese retail investors were forced to sell currencies against the Yen. But further buying faltered as traders were wary of pushing the Dollar/Yen pair below 88 Yen, where large stop-loss sales lurked.

A strong Yen has raised worries for Japanese exporters and the economy because it makes their products more expensive for foreign buyers while cutting into profits generated overseas. Earlier, Japanese investors and exporters were heavy sellers of the Dollar/Yen cross following the report.

Crude Oil - Oil Rebounds above $70 on Weak U.S Dollar
Crude Oil rose as the U.S Dollar weakened against the EUR and a government report showed an unexpected drop in U.S. crude supplies, boosting optimism about a demand recovery in the biggest energy-consuming nation. The Energy Information Administration reported gasoline stocks leapt 2.9 million barrels last week, nearly three times the build that analysts had expected.

Crude prices rebounded above $70 a barrel on Thursday, clawing back some of the previous session's losses, amid the market's exuberance over a global economic recovery getting underway, while a weak U.S. Dollar also lent support.

Technical News

EUR/USD
After the pairs bullish run some bearish correction may be expected today as a bearish cross is evident on the 2 hour MACD as well as the Slow Stochastic chart and with the hourly RSI floating in the overbought territory on the hourly chart.

GBP/USD
A fresh bearish cross is evident on the 2 hour Slow Stochastic chart as well as the MACD; an impending bearish cross is also seen on the 4 hour Slow stochastic. The daily chart, however, shows a fresh bullish cross on the MACD. Going long with tight stops might be a good option today.

USD/JPY
A bullish correction may be expected for the pair after its recent bearish trend with the 2 hour and daily MACD sowing a fresh bearish cross and with the hourly and 4 hour and daily RSI floating in the oversold territory.

USD/CHF
The 2 hour, 4 hour and daily MACD are showing a fresh bullish cross as well as the 2 hour and daily Slow Stochastic. Furthermore the hourly RSI is floating in the oversold territory. Going long for today may be advised.

The Wild Card

Gold
Gold's recent record breaking bullish run may experience some downward correcting today. A breach of the upper level of the Bollinger Bands is evident on the hourly, 2 hour and daily charts. Furthermore, a fresh bearish cross is evident on the hourly, 2 hour and daily Slow Stochastic chart, with the RSI floating in the overbought territory on the hourly and 4 hour charts. Forex traders involved in the commodities market will not want to miss out on the downward movement that this commodity is expecting.

Published on  Thu, Oct 8 2009, 08:41 GMT

Forex Trading −Attention Turns to Crude Oil Before Inventory Data

Wed, Oct 7 2009, 08:33 GMT
by Greg Holden

ForexYard

With the US Dollar's future feeling uncertain, attention seems to have turned towards Crude Oil following speculation that the Gulf States recently discussed dropping the USD for oil trading in exchange for a basket of currencies. While the rumor was denied later by Gulf State leaders and foreign ministers, the impact created a moment for pause in the market. As a result, many are now focusing their attention on today's Crude Oil Inventories report to find out where the relative level of demand for the commodity currently stands to gauge if these rumors have any substance behind them.

Economic News

USD - Dollar Falls on Increased Risk Appetite
The US Dollar fell against most of its major currency pairs yesterday on a media report, later denied, that Gulf Arab states were in talks to abandon the Dollar in oil trading. By yesterday's close, the Dollar had fallen 0.5% against the JPY to 88.70, nearing an 8-month low hit last week. The greenback experienced similar behavior against the EUR and closed at 1.4723.

A rise in equity and commodity prices on the back of strong U.S. data also drove investors from the U.S. Dollar and into perceived riskier assets.

The buck had already been under pressure on expectations the U.S. Federal Reserve would not rush to raise its interest rates and on the growing view that the greenback has become a funding currency for carry trades. In addition, analysts attributed the fall in the Dollar, which has been treated as a lower risk, safe-haven investment, to growing optimism that the worst of the financial crisis has passed. This has caused investors to buy commodity-linked and higher-yielding currencies, which rallied earlier this week.

Looking ahead to today, the most important economic indicator scheduled to be released from the U.S. is the Crude Oil Inventories report at 14:30 GMT. Traders will be paying close attention to today's announcement as it has the potential to impact the price of oil, and thus the USD, in today's trading.

EUR - EUR Rises on Weaker Dollar
The EUR finished yesterday's trading session with mixed results versus the major currencies. The 16-nation currency extended gains versus the U.S. Dollar on Tuesday, to trade above $1.4720 amid a broad sell-off in the greenback. The EUR did see bearishness as well as it lost 50 points against the JPY and closed at 130.54.

The EUR was affected by the global stock market rally and the bearish Dollar. The U.S. stock market rally led investors to buy-back into the EUR, as they looked for returns on buying commodity-linked and higher-yielding currencies in Tuesday's trading.

The Pound Sterling hit a one-week low against the EUR yesterday after an unexpected fall in UK manufacturing output raised doubts about the economy's recovery prospects. British manufacturing output fell 1.9% on the month in August -- the steepest fall since January -- and compared with July's downwardly revised rise of 0.7%.

Looking ahead to today, the most important economic indicator scheduled to be released from Euro-Zone is German Factory Orders at 10:00 GMT. Analysts are forecasting this figure to decrease from its previous reading. Traders will be paying close attention to today's announcement as a better than expected result may continue to boost the EUR in today's trading.

JPY - Yen Continues its Bullishness against Major Currencies
The Japanese Yen strengthened against most of its major counterparts yesterday, continuing to prove that for the time being this is the solid currency that traders can rely on to provide them with steady profits. The Yen extended gains versus the Dollar on Tuesday, to trade at about 89.40 amid a broad sell-off in the USD. The JPY also saw bullishness against the EUR and closed at 130.60.

The yen gained against the Dollar after Japanese Finance Minister Hirohisa Fujii said that he told officials from the Group of Seven (G7) nations in Istanbul last weekend that governments shouldn't pursue policies that seek to devalue their currencies.

Further strengthening could be seen in the Yen if other nations begin to raise interest rates in order to ward off inflation. This could potentially wreak havoc on the Japanese economy by making Japanese exports relatively more expensive compared to their foreign counterparts. The yen has gained 14% against the Dollar in the past year, hurting earnings for export-dependent Japanese companies.

Crude Oil - Crude Oil Inventories Data to Drive Oil Trading Today
Crude Oil prices experienced another day of appreciation as the oft-traded commodity rose above $71 a barrel during yesterday's trading session. Crude Oil prices rose yesterday as traders took their cue from the weak US Dollar, hit by a report that Gulf States considered dropping the greenback for oil transactions.

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, especially in the short-term.

Technical News

EUR/USD
The price has been floating in the over-bought territory on the 4-hour RSI for some time now, but appears to be cascading downward back into neutral territory. This suggests that the momentum has turned for the time being and traders may see some bearishness later today. The impending bearish cross on the daily Slow Stochastic supports this notion. Going short appears to be today's preferable strategy.

GBP/USD
There seems to be what looks like a bullish cross on the 4-hour Slow Stochastic, suggesting an impending bullish correction. As the price sits just above the over-sold territory on the daily RSI, there may indeed be a hint of upward pressure. Going long might not be a bad tactic today.

USD/JPY
The price of this pair has recently entered the over-sold territory on the 4-hour RSI, suggesting upward pressure. The series of bullish crosses on the daily MACD strong support the notion of an imminent upward move. Going long on this pair could turn out to be a wise decision today.

USD/CHF
This pair seems to be giving off mixed signals. The price is floating in the over-bought territory on the hourly RSI; however, the bullish crosses on the daily Slow Stochastic, as well as the hourly and 4-hour MACD suggest upward momentum. This indicates range-trading price behavior. The pair may see a small downward move in the nearest time-frame, but the overall trend right now is bullish. Going long with wider stops, to allow for the fluctuation of the trend, may be a good choice today.

The Wild Card

Gold
The recent upward movement of this commodity's price has pushed its technical indicators into a corrective posture. The 4-hour and daily Slow Stochastic are showing bearish crosses and the 4-hour RSI has the price floating near the highest level of the over-bought territory, suggesting very strong downward pressure. Forex traders involved in the commodities market will not want to miss out on the apparently obvious downward movement that this commodity is expecting!

Published on  Wed, Oct 7 2009, 08:33 GMT

Forex Trading − ollar Weakens on Speculation Gulf States May Stop Using Greenback

Tue, Oct 6 2009, 08:45 GMT
by Greg Holden

ForexYard

Growing speculation over the potential end to Dollar-based trading in the oil market has pushed the USD down against 14 of its 16 major counterparts yesterday. A report on Tuesday in the Independent newspaper revived the idea of ending a huge volume of trade of the world's most liquid commodity - Oil in the U.S. Dollar, a potentially major sign of the greenback's fading status. The Dollar weakened after the U.K.-based Independent reported oil-producing Gulf nations are seeking to move to a basket of currencies to settle transactions. Analysts said ending the use of the Dollar as the currency used to settle oil trades between countries would be an easy task, but a move to replace the currency in which oil is priced would require a massive effort.

Economic News

USD - USD Declines against Major Rivals as Equities Rise
The Dollar declined against most major counterparts Monday after some optimistic economic data pushed investors to move back into stocks and other risky assets. The USD declined against the EUR as stocks rose and a report showed U.S. service industries grew. The Dollar fell to $1.4691 per EUR from $1.4648 in New York yesterday. The Dollar declined to 89.02 Yen from 89.53 Monday.

The Institute for Supply Management's index of non-manufacturing businesses, which make up almost 90% of the US economy, rose to 50.9 from 48.4 in August. 50 is the dividing line between expansion and contraction, meaning the index is showing expansion for the first month since 2007. The positive report helped lessen the bitterness from Friday's Employment reports and, along with several recommendations by Goldman Sachs, has helped boost equity markets which weighed on the Dollar.

Investors will keep a close watch on the U.S. weekly retail sales data, the EIA energy outlook for October and the U.S. API weekly crude stocks report to uncover more clues about the USD movement.

EUR - EUR boosted by Growth in Manufacturing and Services
The EUR received a boost Monday by a report that stated that Europe's manufacturing and services industries grew more than initially estimated. The EUR bought $1.4657, up from $1.4576 on Friday. The common currency traded at 130.79 Yen from 131.15 Yen. The British Pound traded at $1.5942, down about 0.1% from late Friday while the EUR rose 0.7% to 91.96 pence.

Europe's manufacturing and service industries expanded in September for a second month, rising to 51.1, from 50.4 in the previous month. The EUR was also boosted by Ireland's overwhelming approval of an agreement to overhaul the European Union's decision-making process in Friday's referendum.

Today traders will be focusing on the GBP with the release of the Halifax HPI at 8:00 GMT and the Manufacturing Production at 8:30 GMT. Better than expected results might provide a much needed boost for the Pound.

JPY - Yen Drops on Comments by Finance Minister Fujii
The Japanese yen retreated earlier against most of its major counterparts after Japan's Finance Minister Hirohisa Fujii issued a warning that his nation is open to intervening in the currency market. The Yen traded at 131.14 per EUR, following a 0.2% decline. Japan's currency was 89.53 per USD, after appreciating 0.3%.

Fujii's position changed since his initial remarks when he took office in September. He previously opposed intervention in the foreign exchange markets in order to artificially weaken the Yen. However, the currency's appreciation last week to an eight-month high of 88.24 against the Dollar began threatening exporters' profits and thus Japan's economic recovery. Since Japan is highly dependent on exports, a strong currency makes its exports too expensive and erodes any profit from an increase in trade.

With a light news day today with no news releases from Japan, U.S or Euro-Zone, Yen's levels will likely be determined by equity movements as well as investors' risk appetite.

Oil - Oil above $70 a Barrel
Crude Oil futures ended above $70 a barrel Monday, after an optimistic survey of the U.S. services sector reignited hopes for economic recovery. Crude Oil prices were also boosted by a rally in equities. Oil for November delivery climbed 46 cents to settle at $70.41 a barrel Monday. Futures have traded between $65.05 and $75 since Aug. 1.

Also helping Crude was the U.S. Dollar's decline against most major currency counterparts after finance ministers from the Group 7 nations made no specific mention of the currency in a communiqué at their weekend meeting, disregarding its weakening status.

Along with Dollar levels, traders should also pay attention to third-quarter company earnings reports which will begin to be published this week since Oil levels are highly correlated with equity movements.

Technical News

EUR/USD
The bullish trend continues with plenty of steam as the pair now trades around 1.4700. The Slow Stochastic of the hourlies indicates that there is still more room to run. The next target price might be 1.4765. Going long with tight stops seems like the right choice today.

GBP/USD
This pair is in the midst of a narrowing upward channel and is now floating in the middle of it. The hourlies are showing mixed signals with its RSI floating in neutral territory. However, the Slow Stochastic of the daily chart is showing quite a strong bullish momentum, and the RSI confirms that the direction is indeed up. All indications are that there is more room for further upward movement and the preferable strategy today will be to go long on dips.

USD/JPY
There is a very accurate bearish channel forming on the daily chart, as the pair is now floating in the middle of it. A bearish cross on the 4-hour chart's Slow Stochastic is also suggesting that the bearish move has more steam in it. This might be a good opportunity for forex traders to join a very promising trend.

USD/CHF
The pair is in the middle of a very intensive downtrend that still shows great momentum and on a bigger scale appears to have more room to run. The hourly chart is showing a strong bearish cross, and the 4-hour chart is also joining to that notion with the Slow Stochastic pointing to the continuation of the bearish movement. Being on the sell side appears to be the right choice today.

The Wild Card

Oil
This commodity has been on a sharp upward movement over the last day and this bullish correction is likely to stick around in the near future. All charts are still providing a mild bullish signal; however, there may be short-term corrections during this uptrend. Therefore, forex traders can maximize profits by buying on lows and taking advantage of this bullish trend.

Published on  Tue, Oct 6 2009, 08:45 GMT

Forex Trading − EUR/USD Volatility Ripples across FX Market

Mon, Oct 5 2009, 14:09 GMT
by Greg Holden

ForexYard

As the first week of October kicked off last week, traders witnessed a number of volatile jumps in the worlds 2 primary currencies: the EUR and USD. Optimism appeared to be on the rise in America while Europe was giving off signals of a lagging economy. The USD had pared a moderate percentage of its previous losses until employment data in the US hampered those gains and sent the EUR flying high. As a result, every other currency in the forex market was impacted in a similar way since these currencies have the ability to influence world prices. The question remains: Will this week's data calm the market, or simply add fuel to the flames?

Economic News

USD - Poor Employment Data Diminishes Bullish Week
Last week the Dollar saw a volatile trading session against all of the major currencies. The greenback started last week with rising trends against the Euro and Pound, yet eventually returned to similar rates from the beginning of the week.

Last week's early rally of the Dollar was mainly due to the positive Consumer Confidence survey on Tuesday. The survey showed that consumers in the U.S currently have a positive view regarding economic conditions such as labor availability, business conditions, and the overall economic situation.

Even though the survey failed to reach expectations for a 57.0 result, the mark above 50.0 boosted the Dollar. In addition, the Pending Home Sales rose for the 7th consecutive month, indicating that the housing sector in the U.S is showing recovery signals. On the long-term, a sequence of positive housing data is likely to support the Dollar, as many see it as the number one parameter in the economy's condition.

However, the poor employment figures have halted and reversed the Dollar's rising trend. The Non-Farm Employment Change report showed that the U.S economy lost 263,000 jobs in September, which was more than had been expected. This had investors questioning the economy's recovery and pushed them away from the Dollar.

Looking ahead to this week, many impacting publication are expected from the U.S economy. The Non-Manufacturing Purchasing Managers' Index (PMI), the weekly Unemployment Claims and the U.S Trade Balance are all likely to influence the market the most. Traders are advised to pay special attention to the employment figures since last week's data has apparently made this one of the most urgent matters at the moment.

EUR - EUR Recovers before the Weekend
The Euro underwent a volatile trading week. As the week began, the Euro saw bearish trends against most of the major currencies, including the Dollar and the Yen. However, close to the weekend, the Euro saw a reverse of trends and managed to recover.

The Euro's bullish trend came mainly as a result of the poor data published from the Euro-Zone last week. The German Preliminary Consumer Price Index (CPI) fell at a faster pace than expected. The report showed German CPI dropping by 0.4%, more than the 0.2% drop expected by analysts.

In addition, the German Retail Sales for August dropped by 1.5% as opposed to July. The Retails Sales measure the total value of inflation-adjusted sales at the retail level. The negative figures for both these German economic indicators have created speculations that the German economy's recovery might take longer than expected. This has driven investors to look to safe-havens such as the USD.

However, just before the weekend, the Euro managed to recover most of its losses. The Euro's appreciation came as a result of the poor employment data from the U.S. As for the week ahead, many interesting pieces of data are expected from the Euro-Zone. The most intriguing news is likely to be the Interest Rates announcement on Thursday. If the European Central Bank (ECB) will surprise and hike rates, a sharp rising trend might take place. Traders are advised to follow this publication very closely.

JPY - Yen Sees Mixed Results against the Majors
Just like the rest of the major currencies, the JPY saw mixed results during last week's trading sessions. The Yen saw a changing trend throughout the week, and by Friday it returned to its former price levels.

It appears that the Yen's volatility was due to the mixed results from the Japanese economy. Batches of both positive and negative data lead to a jumpy trading week. On one hand, better than expected Japanese Retail Sales figures and a better than expected Non-Manufacturing Index have shown that the Japanese economy might be doing better than many analysts claim.

On the other hand, the poor Manufacturing Index figures and the negative Core CPI result have questioned the stability of the economy. It seems that investors were left confused by the sharp differences of each publication, and a volatile session was inevitable.

As for this week, the most impacting data from the Japanese economy seems to be the Core Machinery Orders report, which is scheduled for Thursday. This report measures the total value of new private sector purchase orders placed with manufacturers. If the end result will reach expectations for a 2.2% growth, the Yen is likely to appreciate as a result.

Crude Oil - Crude Oil Remains Under $70 a Barrel
Crude Oil saw a sharp uptrend during last week's session, and a barrel of crude oil was traded for over $71 a barrel. However, the bullish trend was halted and for the past few days a barrel of oil has been trading for under $70.

The main reason for the halt in the uptrend seems to be concerns that the U.S economy will take longer to recover. That is of course due to the poor employment data from last week. The logic behind it is that the U.S is the biggest energy-consuming nation in the world, and thus any deterioration in its condition might signal a decrease in fuel demand. In addition, another reason for lowering oil prices was the rising supplies from Russia.

Russia increased output by 1.7% in September, and the combination of dropping demand and rising supply has prevented Crude Oil from reaching above $70 a barrel again.

Looking ahead to this week, the high volatility in Crude Oil's trading is likely to continue. Traders are advised to follow the leading publications from the U.S. and the Euro-Zone as they tend to have a great impact on oil prices. In addition, traders should also pay attention to the Crude Oil Inventories report on Wednesday. This weekly report usually leads to sharp change of prices for the black gold.

Technical News

EUR/USD
There appears to be a fresh bearish cross on the hourly Slow Stochastic, and an impending bearish cross on the hourly MACD, which suggests the next movement is most likely going to be in a downward direction. The relatively older bearish cross on the daily MACD, and subsequent downward sliding indicator, supports this notion. Going short appears to be today's preferable strategy.

GBP/USD
The price of this pair has recently entered the over-bought territory on the hourly RSI, suggesting a level of downward pressure on its price. A bearish cross also appears imminent on the 4-hour Slow Stochastic, suggesting today's primary movements could be in a downward direction. Going short may be a wise choice today.

USD/JPY
While the bearish cross on the hourly Slow Stochastic has finished, and the indicator is cascading downward, there appears to be another bearish cross forming on the 4-hour Slow Stochastic, suggesting another downward move is impending. Traders can benefit from this upcoming movement by entering short positions early and riding out the wave.

USD/CHF
The only clear indication on this pair seems to be the fresh bullish cross on the hourly Slow Stochastic, which suggests an upward correction is due to take place in the nearest future. However, the Bollinger Bands on the daily chart appear to be tightening which suggests that a volatile jump could happen later this week and traders should be on the lookout for indications regarding its direction. For today, going long might be a good short-term tactic.

The Wild Card

Gold
A bearish cross has recently taken place on the hourly Slow Stochastic for this commodity, suggesting an impending downward correction is imminent. The bearish cross on the 4-hour MACD supports this notion. Forex traders involved with the commodities market might want to consider going short on Gold in the next few hours as an overwhelming amount of evidence suggests bearishness for the day.

Published on  Mon, Oct 5 2009, 14:09 GMT

Forex Trading − Major U.S. Data Publications to Set the Tone for Forex Trading Today

Fri, Oct 2 2009, 08:54 GMT
by Greg Holden

ForexYard

As this week's trading comes to an end, the market awaits vital data from the U.S. economy. Both the U.S. Non-Farm Employment Change and the U.S. Unemployment Rate is set to drive the volatility of the forex market when they are released at 12.30 GMT. Also important for forex traders to follow is the Halifax HPI figures from Britain at 06:00 GMT. It is recommended that forex traders open big positions in USD and GBP crosses now, as today's trading unfolds.

Economic News

USD - Dollar Soars Ahead of Non-Farm Payrolls
The Dollar saw much bullishness against most of the major currency pairs during yesterday's trading session. The Dollar gained over 100 pips against the EUR, as the EUR/USD pair dropped to the 1.4501 level. However, the Dollar weakened against the Yen during yesterday's trading.

The rising Dollar came as both disappointing jobs and manufacturing data increased worries that the global economy recovery may be farther than expected, boosting the Dollar's safe-haven status. The weekly U.S. Unemployment Claims report showed that the number of Americans filing for unemployment insurance for the first time during the past week rose to 551,000 from a revised 534,000 last week.

Also yesterday, the Manufacturing Purchasing Managers' Index failed to reach expectations of the forecasted 53.9 result, as the end result was actually 52.6. The unsatisfying figures from yesterday's U.S. data seems to have contributed to investors' worries that a halt in the economic recovery will continue strengthening the greenback going into next week's trading..

Looking ahead to today, the most significant data of the month is expected, as the Non-Farm Employment Change is scheduled for 12:30 GMT. It measures the change in the number of employed people during September, excluding the farming industry. Due to its early publication, this report tends to have an immense impact on the market. If the end result will continue to show that the American jobs sector is recovering, it may extend the Dollar's bullish trend.

EUR - EUR Tumbles as Unemployment Rate Hits 10-Year High
The EUR dropped against all the major currencies on Thursday. The EUR slid to close lower by 150 pips against the EUR/USD, as the pair dropped to the 1.4501 level. The EUR also saw falling trends against the Yen and the Pound.

The EUR's weakness yesterday came as a result of some negative data that was published from the Euro-Zone. The German Retail Sales fell by 1.5% in August as opposed to July. It seems that the fear of rising unemployment in Germany kept consumer spending in check, even as the economy showed signs of recovery. Adding to yesterday's dismal data, the Euro-Zone Unemployment Rate rose to 9.6% in August, hitting a 10-Year high. The poor data has contributed to speculations that the Euro-Zone is still far from reaching economic recovery. As a result, the Dollar gained and the EUR weakened.

As for today, the most significant news event expected from the Euro-Zone is the European Producer Price Index (PPI). The PPI measures the change in the price of finished goods and services sold by producers. Despite being expected to have a large impact on the market, traders are also advised to focus their attention on the U.S employment figures, as they are expected to set the tone for today's trading.

JPY - Yen Rises against the Majors
The JPY underwent a bullish trend against the major currencies during yesterday's trading. The Yen rose over 150 pips against the EUR, as the pair dropped below the 130.00 level. The Yen also saw rising trends against the Dollar and the Pound. The Yen's bullishness was largely due to a batch of positive data published from the Japanese economy. The Retail Sales figures for August dropped by 1.8%, better than the 2.4% drop expected. The Non-Manufacturing Index which measures the general business condition also delivered a better-than-expected figure.

We can see that the continuing publication of the combination of the positive economic data will continue increasing speculations that the Japanese economy is recovering, boosting the Yen. As for Friday's trading, no significant data is expected from the Japanese economy. Traders should follow the leading publications from the U.S and the Euro-Zone, as they are likely to set the tome for the market today. Special attention should be put on the U.S Payrolls data.

Crude Oil - Crude Oil Stays at $70 a Barrel
Crude Oil saw a very volatile session during yesterday's trading session. However, by the end of it, Crude returned to trade around $70 a barrel. Crude Oil began yesterday's trading with a rising trend, reaching the 71.33 level at the peak. Yet due to the poor data from the U.S, Crude Oil dropped to almost $69 a barrel just a few hours later. The combination of lower-than-expected Manufacturing figures and the surge of the weekly American Unemployment Claims has increased concerns that the global recovery is not certain, which has put downward pressure on Crude.

As for today, traders are advised to follow the leading publications from the U.S economy, in order to set their positions on Crude Oil. Traders should focus on the Non-Farm Employment Change, as its result is likely to have a large impact on today's trading, and bear in mind that a positive figure might have the potential to boost Oil prices once again today. It is therefore recommended that you open large positions in Crude Oil as soon as possible.

Technical News

EUR/USD
The pair experienced much bullishness yesterday, as it now stands at the 1.4545 level. The chart's oscillators seem to be showing much mixed data, but the 1-week chart actually shows the most accurate picture. The 1-week chart's MACD and RSI show the cross floating in the overbought territory, signaling that the next move will be lower. Taking advantage of the upcoming trend now seems to be the best choice for Friday's trading.

GBP/USD
The GBP/USD cross has experienced much volatility in the past week. The MACD of the hourly chart, the RSI of the daily chart and the Stochastic Slow of the 4-hour chart shows the pair in the oversold territory. On the other hand, the MACD of the weekly chart shows the cross floating in the overbought territory. The best choice for today may be to enter the pair when the signals are clearer.

USD/JPY
In yesterday's trading, the USD/JPY cross experienced much bullishness. However, the chart's oscillators support a bullish reversal for today. The Slow Stochastic of the weekly chart shows that a bullish cross has recently formed, indicating that an upward correction is imminent. Opening big positions in this pair at an early stage may turn out to pay off today.

USD/CHF
The pair has recorded a 3-day winning streak, and currently stands at the 1.0400 level. The Slow Stochastic of the hourly chart shows that a bullish cross has recently formed, indicating that today's trend will be bullish. Additionally, the daily chart's MACD also supports this view. Going long with tight stops may turn out to bring you big profits today.

The Wild Card

Crude Oil
The black gold has gone increasingly bullish this week, and now stands at about $70.15. The MACD of the 4-hour chart and the MACD of the weekly chart show that the recent bullish trend may be running out of steam, and that a bearish correction may happen anytime soon. The RSI of the 4-hour chart also supports this view. Going short with tight stops may turn out to bring big returns for forex traders today.

Published on  Fri, Oct 2 2009, 08:54 GMT

Forex Trading − USD Falls Slightly then Rebounds Ahead of Tomorrow's NFP Report

Thu, Oct 1 2009, 08:32 GMT
by Greg Holden

ForexYard

This week has been a bumpy ride for the US Dollar. After entering a bullish trend against a number of its currency rivals, the USD appeared set to step onto the world stage and announce the return of the safe-haven. However, a few positive reports in Europe and a level of optimism before the US Non-Farm Payrolls data tomorrow have helped many currencies pare some of the losses against the USD going into this morning's early trading hours. The USD, now appears, however, to be retaking the lead, as if optimism has taken a hit. Today's heavy news cycle and tomorrow's NFP report may be more important than many traders assume. If you're not in the market today and tomorrow, you should be.

Economic News

USD - Mixed Economic Data Weighs on the Dollar
The Dollar declined versus most of its major currency counterparts on Wednesday after mixed economic data showed that while the U.S economy is stabilizing, it is still very shaky. The Dollar index fell to 76.744, down from 77.085 in North America late Tuesday.

The greenback pared losses after a weaker than expected Chicago PMI report was released; however, data overseas served to reinforce growing optimism over the global economic outlook, reducing investor desire for the relative safety of the U.S. currency. The greenback extended a two-quarter slide against the EUR after a report showed China's manufacturing sector grew for a fourth consecutive month.

A heavy news day is expected today from the U.S with the Unemployment Claims due to be released at 12:30 GMT and the ISM Manufacturing PMI and Pending Home Sales due to be released at 14:00 GMT. Furthermore, Fed Chairman Ben Bernanke is due to testify at 13:00 GMT. This will likely result in a very volatile trading day for the Dollar, particularly ahead of the highly anticipated Non-Farm Employment Change report due tomorrow.

EUR - EUR Gains on ECB Comments
The EUR gained versus the Dollar Wednesday, shaking off disappointing U.S. economic data and sagging equities, after the ECB said it will lend banks 75.2 billion euros ($110 billion) for 12 months at the current benchmark interest rate of 1%. This was a lower number than was anticipated by economists, indicating banks' need for cash has eased for now.

The EUR traded at $1.4634, up from $1.4581 Tuesday, and at 131.44 Yen from 131.33 Yen. Comments from Federal Reserve officials pointed to a continuation of the loose monetary policy which encouraged risk appetite, despite concern over the sustainability of a U.S. economic turnaround. Loose economic policy reassures markets there is still an extended period of liquidity, which is positive for risky assets.

The Pound has continued to under-perform versus its major currency counterparts, unable to shake off the comments by Bank of England (BOE) governor Mervyn King that a weak Sterling will be beneficial for the U.K.'s recovery. In today's early trading the Pound is at $1.5942 versus the Dollar.

While most of the news today is expected to come from the U.S., traders are advised to follow the release of the British Manufacturing PMI at 8:30 GMT. A better than expected result might help reverse some of the Pound's recent losses.

JPY - Yen Declines on Risk Appetite Return
The Yen dropped against 14 of its 16 major counterparts yesterday as Japan's former top currency official said there are few reasons for the yen to rise further. Further pressure on the Yen versus the EUR came after the International Monetary Fund (IMF) cut its forecast for write downs on loans and investments, signaling that economic recovery is indeed on its way and reducing the appeal of the safe heaven currency.

The Bank of Japan's Tankan survey today showed an index of confidence among large manufacturers improved to minus 33 from minus 48 in June. While an improvement, a negative number means that pessimists still outnumber optimists. With no major news from Japan today, the Yen's direction will likely be set by the array of news coming from the U.S and Europe throughout the day.

Crude Oil - Oil Rallies 5.8% to Above $70 a Barrel
Despite a rise in inventories and sagging equities, Crude Oil futures rallied 5.8% Wednesday to above $70 a barrel. November crude futures rose $3.90 to $70.61 a barrel on the New York Mercantile Exchange, ending above the $70 level for the first time since Sept. 22.

Oil gained yesterday after the US Energy Department report showed an unexpected decline in supplies of gasoline. However, Crude imports also fell, down 2.7% to 9.5 million barrels a day which may suggest that the drop in gasoline supplies doesn't necessarily comes from increase in U.S demand.

While some improvement in demand is evident, in light of the poor economic data from the U.S and the continuous increase in Oil stockpiles there is no room for another strong rally as the U.S economic recovery proves to be sluggish. With a busy news day from the U.S., Oil levels are expected to experience quite a volatile trading day today; worse than expected results might erase Oil's gains from yesterday, however.

Technical News

EUR/USD
After this morning's sudden drop, the price of this pair now floats in the over-sold territory on the hourly RSI, while a bullish cross is developing on the hourly Slow Stochastic. Immediate short-term movement appears to be for an upward correction. Going long with tight stops might be a wise choice.

GBP/USD
The price on this pair recently exited the over-sold territory on the daily chart's RSI, suggesting some bullish movement may be expected. The fresh bullish cross on the hourly Slow Stochastic supports this notion. Going long may be today's preferable strategy.

USD/JPY
There appears to be a bearish cross forming on the both the hourly and 4-hour Slow Stochastic indicators for this pair, suggesting impending bearish movements. Going short might not be a bad idea in the short-term.

USD/CHF
This pair continues to trade within a bullish channel. Following its recent upward movement this morning, the pair is now set for a downward correction in order to stay within its channel. The fresh bearish cross on the hourly chart and the price floating in the over-bought territory on the RSI both support this notion. Going short in the near future may be a smart tactic, but this pair remains bullish. Longer-term positions may want to keep their long positions open and let this momentum ride.

The Wild Card

USD/MXN
The price of this pair appears to be floating in the over-bought territory on the hourly and daily RSI, suggesting strong downward pressure. With fresh bearish crosses in the hourly and daily Slow Stochastic, this notion only gains more strength. Going short on this pair may offer forex traders a great opportunity to capture an impending downward wave and ride it out for hefty profits.

Published on  Thu, Oct 1 2009, 08:32 GMT

Forex Trading − The USD Remains Pressured on U.S Interest Rate Prospects

Wed, Sep 30 2009, 09:36 GMT
by Greg Holden

ForexYard

The U.S. currency may be headed for a quarterly decline against 14 of 16 major counterparts before report this week forecast to show American employers cut fewer jobs, boosting demand for higher-yielding assets. Although the greenback posted small gains against major rivals Tuesday, edging higher on the Japanese currency, the currency may reverse its earlier gains on speculation a Federal Reserve official will reiterate today that record-low Interest Rates will be unchanged for an extended period.

Economic News

USD - Lower U.S. Consumer Confidence Figures Boost the Dollar
The Dollar soared yesterday on lower U.S. Consumer Confidence figures of 53.1, rather than the forecasted 57.0. The Dollar rose to a near 2-and-a-half-week high vs. the EUR to 1.4526 at its highest point yesterday. It should be pointed out that the data from the U.S. seemed to lead to a decrease in demand for riskier assets that are funded by borrowing the U.S. Dollar.

The EUR/USD cross fell by nearly 70 pips on Tuesday to finish trading at the 1.4592 level. The EUR fell, despite positive economic news from the Euro-Zone. The Dollar fell for the second day against the GBP, as the pair finished trading at 1.5969. The USD went volatile vs. the Pound, due to the British currency rising as the Bank of England (BoE) announced that it had no plans for lowering bank reserve rates. With regards to the JPY, the USD to make some inroads as the cross closed at 90.15. This may be partially owed to Japan's government wanting to abandon a strong Yen.

Looking ahead to today's trading, there is plenty of economic news that is expected to be published from the U.S. economy. The most important of these is expected to be the ADP Non-Farm Employment Change at 12:15 GMT. Also, amongst the other important data releases from the U.S. are the Final GDP figures at 12:30 GMT and the Chicago PMI at 13:45 GMT. As you forex traders can see, there is no break expected from trading today. In addition, due to the high volatility expected, it is encouraged that you buy-up large USD positions now, as today's trading takes off.

EUR - EUR Tumbles to 2-Week Low against the Dollar
On Tuesday, the EUR tumbled to a near 2-and-half-week low against the Dollar. This came about even though the EUR experienced a day of positive data publications. The bearish EUR occurred as demand for riskier assets dropped. This was initiated by U.S. Consumer Confidence falling significantly yesterday. On the other hand, the British Pound actually rose vs. its key currency pairs, as the Bank of England (BoE) revealed to economists that it doesn't intend to lower the rates on the reserves of banks.

The EUR fell by about 70 pips vs. the USD on Tuesday to the 1.4592 level. The GBP/USD cross finished trading notably higher at 1.5969. The news in Britain helped the EUR/GBP fall for a second day in a row to the 0.9132 level. The news in Britain also led support to the GBP in regards to the GBP/JPY cross, as the pair rose by over 100 pips to the 144.40 level. It seems that on all fronts that the cable was unaffected by the pessimistic news in the U.S. With regards to the European currency, many traders were surprised by the pace of its decline in yesterday's trading.

Today's trading offers promising opportunities for forex traders. There is much data that is expected to be released from Britain, the Euro-Zone and Switzerland. The German Unemployment Change figures are expected to be published at 07:55 GMT and the CPI Flash Estimate at 09:00 GMT. From Britain, the Index of Services results are set to be released at 08:30 GMT. The KOF Economic Barometer is scheduled to be released from Switzerland at 09:30 GMT.

JPY - Strong Yen under Downward Pressure
The strong Yen has recently come under a lot of pressure lately, as the Japanese economy gets hit by deflation. For example, the Core Inflation tumbled by nearly 2.5% in September. This is the largest drop in the past decade. This comes as we have seen the JPY rise significantly vs. the GBP, USD and EUR since the start of the financial crisis. Due to the deflation problem, the new Democrats party has u-turned on Japan's policy of upholding a strong Yen.

The news seemed to put some downward pressure on the Japanese currency. The USD/JPY cross rose by about 20 pips to the 90.15 level. The GBP/JPY cross rose over 100 pips to the 144.40 level. The JPY's downward trend may continue if investors continue to lose confidence on an extremely battered economy. Market players should be paying a close attention to the upcoming releases: Tankan Manufacturing Index, Japanese Retail Sales and the Tankan Non-Manufacturing Index at 23:50 GMT.

OIL - Crude Oil Hits the $67 Mark
Crude Oil prices rose to over $67 to the $67.26 level, before falling to $66.75. This behavior was owed to a weak Dollar in early trading. However, the U.S. currency gained significantly on Tuesday ever since the negative U.S. Consumer Confidence figures were released. In turn, this put downward pressure on Crude prices. Thus as the USD strengthened, Crude Oil prices went lower.

Oil prices are set to encounter another exciting day of trading. The most important release today is the publication of Crude Oil Inventories at 14:30 GMT. The other important release that is set to impact the value of Crude today is the U.S. ADP Non-Farm Employment Change, as Crude is priced in U.S. Dollars. If you want to make profits from Oil today, then you should open your trades as soon as possible.

Technical News

EUR/USD
The sustained upward movement of this pair has begun to push the long-term oscillators, such as the daily chart's RSI, into the over-bought territory. This appears to be putting downward pressure on the price of this pair as it has begun to level off. As momentum shifts into a downward posture, going short with tight stops might be a good strategy.

GBP/USD
This pair's recent drop in value continues to hold the price in the over-sold territory on the RSI of the daily chart, signaling upward pressure. While the momentum appears to remain downward, we may likely see a number of upward corrections throughout the day. Buying on the lows and selling on the highs of these fluctuations will be a good strategy today

USD/JPY
There is a very accurate bearish channel forming on the 30 min. chart as the pair is now floating in the bottom of it. Currently, as all oscillators on the daily chart are pointing down, it seems that the downtrend will extend. Going short might be a good strategy today

USD/CHF
An imminent bullish cross on the hourly Slow Stochastic suggests that an upward movement is on the way. As the price recently exited the over-sold territory on the hourly RSI, there may be only a small amount of momentum for this impending bullish movement. Going long with tight stops may be the safest bet for today

The Wild Card

AUD/USD
The price of this pair currently floats in the over-bought territory of the 30 min. chart's RSI, indicating a downward pressure. The impending bearish crosses on the hourly MACD and Slow Stochastic both support the notion of a downward move. Those participating in the forex market today would be wise to pay attention to this pair as the downward pressure appears to be getting stronger and a bearish move may be impending.

Published on  Wed, Sep 30 2009, 09:36 GMT

Forex Trading − Bearish Sentiment Persists in Trading

Tue, Sep 29 2009, 08:45 GMT
by Greg Holden

ForexYard

The USD and JPY maintain their rallies over their riskier counterparts as traders try to decipher officials' comments regarding exit strategies and interest rate hikes for the near future. Today sees the first day of important economic news form the U.S since the G20 summit, which will likely cause volatility for the Dollar and set its course for the week.

Economic News

USD - USD Advance Continues; JPY Still Outpacing Dollar
The USD has continued its advance from last Friday and currently trades near the 1.4620 level against the EUR, and near the 1.5900 mark versus the British Pound. The only currency to gain against the greenback so far has been the Japanese Yen, which saw an 8-month low of 88.22 at the start of this week's trading. The USD/JPY is currently trading just below the 90.0 price level.

Rising optimism in the American economy was fueled by the recent rise in futures on the stock market, which highlights the growing tendency to buy American in times of crisis. The only currency, as mentioned earlier, which has outpaced the Dollar has been the JPY. Statements made by Japanese Finance Minister Fujii have many traders wondering if Japan will follow through on its promise not to intervene in its currency's recent appreciation. If it chooses not to, the target for the USD/JPY may be close to 82.00 in the coming weeks, according to a number of analysts.

The most important event to watch today, however, will be the Conference Board's (CB) release of their Consumer Confidence report at 14:00 GMT. As the trend is currently pointing towards rising optimism in the US, there is the potential for a bearish USD session following such positive news. Risk appetite has been on the flutter, and a boost of this kind, coupled with the confidence in Europe associated with Angela Merkel's recent victory in Germany, could return investors to the riskier currencies such as the EUR, and even the Pacific and Scandinavian currencies.

EUR - EUR Sliding Against Rising Safe-Havens; Near Parity with GBP
While the electoral victory for Angela Merkel's Christian Democratic Union party in Germany had the EUR on a short bullish run, the momentum has apparently shifted back in favor of the safer currencies such as the Dollar and Yen. The EUR/USD dropped as low as 1.4563 in yesterday's early morning hours, before correcting slightly back towards 1.4620. The EUR continues to outpace the Pound, which is getting closer to parity with each passing day.

The currency markets appear to be awaiting the string of important US employment data due this week before jumping into a clear direction. In such times of uncertainty, the traditional safe-havens begin gaining ground, as many traders have witnessed these past few days with the USD and JPY. Risk appetite has started waning as last week's housing data from the US kicked off a retreat from higher yielding currencies. The slump in commodity prices also put downward pressure on the riskier European currencies.

Today's data releases are aimed more at the British Pound and US Dollar than anything else, so the EUR will likely take a passenger-side role in today's market. Traders should not be deceived, however, as no news in such uncertain times can often appear as good news. Current trends for the day do not appear to be threatened by today's releases, and traders should feel safe to jump into current trends but stay safe by getting out by day's end. Tomorrow kicks off the hectic forex schedule regarding the first week of a new month's employment reports from the US.

JPY - Finance Minister Fujii's Statements Implicate Future Yen Movements
Many traders are anxious to see if Japanese Finance Minister Hirohisa Fujii can follow through on his commitment to keep the Bank of Japan (BOJ) out of any interventionist policies on the recently rising Yen. In official statements, he declared that the recent surge in the island currency is a natural fluctuation of the market, yet made a remark about the one-sided nature of the rise to a smaller, more select audience.

Few can doubt the Yen's recent rise, hitting such marks as 88.22 against the USD, an 8-month high, and 129.82 versus the EUR, a price not seen since mid-July. But Japan's economy is heavily dependent on exports, which depend on a weak currency. With Japan being one of the worst-hit economies in the recent recession, a non-interventionist stance on this issue appears contrary to Japan's needs. However, if Fujii can follow through on his promise, then the Yen may hit as high as 82.00 against the USD, according to some analysts.

Crude Oil - Oil Prices See Minor Upward Correction, but Still Bearish
Many traders were not expecting much pressure to be on Crude Oil prices following the flare-up of 2 oil refineries in California, and the test firing of mid-range missiles in Iran, over the weekend, but the recent upward movement has left few inspired. Many analysts now claim that Crude Oil prices may indeed be in for more slumps as there appears to be little demand in the market to justify prices over $68 a barrel.

With prices hovering just under $67, this week's prominent employment data from the US - the Non-Farm Payroll report - may carry the biggest impact on oil prices. Last week's rise in inventories helped lower oil prices in the short-term, but longer-term implications may be carried by the growth, or contraction, of the world's largest energy consumer. It appears as if USD trends are going to affect Crude prices more this week than the few weeks prior and any indication of a continuation for USD strength may help lower the price of oil towards $60 a barrel in the near future.

Technical News

EUR/USD
The pair appears to be trading within its recent range on the hourly charts; however, a bullish cross is forming on the daily Slow Stochastic as well as the MACD chart. Going long for the day may be a good option.

GBP/USD
The pair is showing several mixed signals. A bearish cross is forming on the hourly, 2 and 4 hour Slow Stochastic as well as a breach of the upper Bollinger Band on the hourly chart. Furthermore, both the hourly and 2 hour RSI are floating in the overbought territory. The 4 hour MACD, however, is showing a fresh bullish cross forming, as well as the daily Slow Stochastic with the daily RSI floating in the oversold area. Going long with tight stops may be a good choice for today.

USD/JPY
The 2 and 4 hour Slow Stochastic shows a fresh bearish cross forming. A bearish cross is also apparent on the 4 hour MACD while the hourly RSI is floating near the overbought territory. Going short for today may be advised.

USD/CHF
The pair is floating in neutral territory on the hourly charts. The daily chart, however, the daily chart is showing a bearish correction on the MACD chart as well as an impending bearish cross on the Slow Stochastic. Going long for today may be advised.

The Wild Card

NZD/JPY
A bearish cross is evident on the hourly, 2 and 4 hour Slow Stochastic charts, with a bearish cross also evident on the 4 hour MACD. Furthermore, the hourly and 2 hour RSI is floating in the overbought territory. Forex traders are advised to go short for today.

Published on  Tue, Sep 29 2009, 08:45 GMT

Forex Trading − Dollar, Yen up Ahead of the G20 Meeting

Fri, Sep 25 2009, 08:57 GMT
by Greg Holden

ForexYard

The Dollar snaps a two week decline versus the EUR after disappointing U.S Home Sales data and ahead of the G20 meeting. The USD and JPY are benefiting from the recent surge in risk aversion ahead of the G20 meeting and a concern that the group's leaders will pose stricter regulations on financial markets. The drop in Oil prices, which began Wednesday, only exacerbated yesterday as equity markets tumbled and the Dollar strengthened, putting pressure on the commodities market.

Economic News

USD - Dollar Rebounds on Return to Risk Aversion
The Dollar came roaring back yesterday against its rivals as poor housing data and falling equity markets sapped traders appetite for risk. Existing home sales numbers were released to an unspectacular reception with the numbers failing to reach their expected targets. Only 5.10M existing homes were sold as compared with economists forecasts of 5.36M. This sent traders running from higher-yielding currencies and into long Dollar positions.

Yesterday's trading was notably volatile, with the EUR/USD climbing in early European trading hours to a daily high of 1.4789, only to end the day at 1.4650 from 1.4721. Driving the early appreciation for the EUR was a lower number of U.S. Unemployment Claims. These gains were later eroded after less than spectacular housing data was released. Against the Yen the Dollar was down as traders looked for the less risky currency. The pair closed at 90.82 from 91.30.

Looking ahead to today's trading, we can expect further volatility of the Dollar. The Group of Twenty (G20) meets for a second day today. Comments made by the global heads of finance can move the market fast so traders should be aware of their impact. U.S. New Home Sales data is due at 2:00pm GMT time. If the New Home Sales is anything like the Existing Homes Sales data from yesterday, the EUR/USD could continue its decline for the second day in a row to finish the week near the 1.4550 mark.

EUR - Pound Crumbles on Currency Comments
The Pound took a thrashing during yesterday's trading as comments by the Bank of England sank the British currency. A report surfaced that Bank of England (BOE) Governor Mervyn King stated a weaker Pound could be beneficial to the U.K. economic recovery. It is assumed the BOE prefers a weak Pound. The weaker currency could help boost British exports, making them relatively cheaper than their foreign counterparts.

Traders immediately began bidding the Pound lower, sinking the GBP/USD to 1.5947 from 1.6353, for a single day decline of 2.5%. The EUR also rose 2% on the Pound as the EUR/GBP ended at 0.9816 from 0.9004, and the GBP/AUD fell to 1.8467 from 1.8803.

If the BOE does prefer the Pound to depreciate, this could create an opportunity for those traders who feel the British currency is not properly valued. Perhaps the BOE sees the possibility for further weakening of the Pound. Will the bank take future action to help artificially deflate the nation's currency?

JPY - Yen Rises on Negative U.S. News
As the rally of riskier currencies puts on the breaks, demand for the Yen is increasing. Yesterday's news of lower U.S. housing data helped slow the rally for riskier assets, thereby boosting the Yen. This trend continues to go unabated, with the USD/JPY rising alongside riskier assets, and falling when risk sentiment diminishes. This was the case yesterday as the USD/JPY fell to 90.82 from 91.30

Traders should be watching today's data releases from the U.S. for today's direction of the Yen. If the negative news will continue further into the day, we could have another pullback of some of the higher yielding currencies. If so the USD/JPY could be looking to drop below the 90.00 support line.

Crude Oil - Economic Data Lowers Demand for Crude
The price of Crude Oil was significantly lower yesterday as poor U.S. housing data and a strong Dollar weighed on the commodities market. Traders took the information as a pullback to economic growth and a sustained economic recovery, thereby reducing demand for the commodity. Oil fell below a significant support line of $66 and finished the day down at $65.85 from $68.36.

Yesterday's 3.6% drop in price was the second day in a row for a pullback in Crude prices. The valuation seems to be taking hints from reported economic data. If this is the case, traders will be wise to follow today's U.S. Core Durable Goods Orders and New Home Sales numbers. We could see Crude Oil trading at $65 by the end of today.

Technical News

EUR/USD
The daily chart is showing mixed signals with its RSI fluctuating at the neutral territory. 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. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.

GBP/USD
It appears that after yesterday's sharp downward movement, several signals point to a correction today. The 4-hour Slow Stochastic shows a fresh bullish cross, as does the daily MACD; with the price hovering in the over-sold territory on the 2-hour, 4-hour, and daily RSI.

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
It appears as if a fresh bearish cross has formed on the hourly MACD. A bearish cross is also impending on the 4-hour Slow Stochastic, with the RSI hovering near the overbought territory.

The Wild Card

USD/SEK
It appears as if a fresh bearish cross has formed on the hourly MACD, suggesting to forex traders that an opportunity is approaching. The RSI on the 2-hour and 4-hour charts are sitting in an overbought territory. Combined with a fresh bearish cross on the 4-hour Slow Stochastic, it is evident that a downward movement is impending. Going short on this pair today may not be advised.

Published on  Fri, Sep 25 2009, 08:57 GMT

Forex Trading − USD Up on Fed Statements; Oil Sinks on Demand Concerns

Thu, Sep 24 2009, 09:26 GMT
by Greg Holden

ForexYard

The US Federal Reserve yesterday upgraded its assessment of the U.S. economy, saying growth had returned after a deep recession. As expected, the Fed kept its target for its federal funds rate set at a range of zero to 0.25%. The previously weakened Dollar had been propping up commodity prices. Following the US Crude Oil Inventory report yesterday, oil prices dropped nearly 4% to below $68.50 a barrel. The Fed statement, which pushed the US Dollar up, only helped extend these decreases in oil prices.

Economic News

USD - Dollar Optimism High Following Fed Statements
The Dollar rallied yesterday against most of its major counterparts amid concern that the Federal Reserve is nearing the end of its efforts to lift the economy out of recession. The Dollar has been sold-off recently partially due to growing optimism about the outlook for the U.S. economy. The USD finished yesterday's trading session 100 pips higher against the EUR at the1.4700 level.

The Federal Reserve yesterday upgraded its assessment of the U.S. economy, saying growth had returned after a deep recession. As expected, the Fed kept its target for its federal funds rate set at a range of zero to 0.25%. The Fed repeated that it continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period.

The Fed also said it would slow its purchases of mortgage debt to extend that program's life until the end of March, in a move toward withdrawing the central bank's extraordinary support for the economy and markets during the contraction. Analysts had expected the move, which smoothes out the purchases.

Looking ahead to today, the most important economic indicators scheduled to be released from the U.S. are the Unemployment Claims and Existing Home Sales at 12:30 GMT and 14:00 GMT respectively. 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 FOMC member Evan's speech at around 14:30 GMT. This speech is very important as it is likely to impact the Dollar's volatility. Traders are advised to watch closely, as this is likely to set the pace of the Dollar's movements going into the rest of the week's trading.

EUR - EUR Declines as Stock Market Falls
The EUR fell to session lows against the U.S. Dollar yesterday, weighed down by declines in stocks following early gains. This came after the Federal Reserve signaled that interest rates will remain low for some time. By yesterday's close, the EUR had fallen against the USD, pushing the oft-traded currency pair to 1.4700. The EUR experienced similar behavior against the GBP and closed at 0.9000.

Europe's manufacturing and service industries expanded for a second month in September, suggesting that the Euro-Zone regional economy is gathering strength and showing signs of emerging from its worst recession in more than six decades after governments stepped up stimulus measures and the European Central Bank (ECB) injected billions of euros into markets.

In addition, European economic confidence rose to a 10-month high in August but rising unemployment is a reason to remain prudent about the economic outlook.

Investors may look for the 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 Trading Down against Currency Rivals
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 149.40. The only economic events out of Japan yesterday were the trade balance figures; only slightly changed from forecasts as volatility was kept to a minimum.

Japan's exports fell in August for an 11th consecutive month as recovery struggled to gain traction in the island economy. Bank of Japan Governor Shirakawa said last week that he is concerned the recovery may not outlast the worldwide stimulus packages that boosted demand for the country's cars and electronics. The central bank cited exports as the main reason for raising its assessment of the economy last week, as record unemployment and slumping wages weaken consumer spending.

Another headwind for Japanese exporters is an appreciating currency. The yen has gained more than 7% against the Dollar in the past six months, threatening to erode companies' profits earned abroad.

Crude Oil - Oil Drops as Inventory Rises; Demand Concern?
Oil prices dropped nearly 4% to below $68.50 a barrel during yesterday's trading session. This drop came after a U.S. government report showed Crude Oil inventories rose more than expected, rekindling worries that energy demand in the world's biggest consumer will be slow to recover in the wake of the recession.

The International Energy Agency (IEA) said that the inventories rose to 2.8 million barrels in the week September 18, against analysts' expectations of a 1.5 million barrel decline.

A weak Dollar had been propping up prices recently. The greenback was narrowly mixed against the JPY, EUR and GBP on Wednesday. Oil, like other commodities, is priced in dollars so when the U.S. currency weakens, commodities become cheaper for investors holding other currencies.

As for today, traders should pay attention to the U.S Unemployment Claims report as it has tended to have an impact on Crude Oil's prices recently, especially in the short-term.

Technical News

EUR/USD
While this pair experienced a substantial correction yesterday, it failed to break out of its current bullish channel. With a bullish cross on the 4-hour Slow Stochastic, there is the possibility that the upward movement may continue later today. Going long might not be a bad idea today.

GBP/USD
With many signals pointing to neutral, this pair appears to be leveling off. The hourly and 4-hour MACD float near the 0.0 mark, while the Slow Stochastic indicator floats evenly between the 20 and 80 levels on both charts as well. Waiting for a clearer signal on the hourlies might be a wise strategy today.

USD/JPY
It appears as if yesterday's downward movement has created a few signals which are anticipating a correction today. The hourly Slow Stochastic shows a fresh bullish cross, as does the daily MACD. With the price hovering near the over-sold territory on the hourly, 4-hour, and daily RSI, there is a concern, however, that there may be a little room to continue its bearishness before correcting back up. Traders should wait for the upward swing, and then jump in as early as possible.

USD/CHF
This pair appears to be giving off mixed signals. The hourly chart shows neutrality, the 4-hour chart has both bullish and bearish indicators, and the daily chart suggests upward pressure. While some signals contradict this message, it seems as if the overall trend is for an impending bullish movement. Going long with tight stops might not be a bad choice today.

The Wild Card

USD/MXN
It appears as if a fresh bearish cross has formed on the hourly Slow Stochastic, suggesting to forex traders that an opportunity is impending. The RSI on the hourly, 4-hour, and daily chart are all sitting in a bearish posture. Combined with the bearish cross mentioned above, it is evident that a downward movement is impending. Going short on this pair today may not be a bad idea.

Published on  Thu, Sep 24 2009, 09:26 GMT

Forex Trading − U.S. Interest Rates on Tap

Wed, Sep 23 2009, 06:47 GMT
by Greg Holden

ForexYard

Following two relatively peaceful trading days, today is filled with news publications from the major economies. Starting at 06:45 and until 09:00 (GMT) traders are advised to follow the news events from the Euro-Zone. Later on, the Crude Oil Inventories will be published at 14:30 (GMT). This indicator tends to have an instant impact on Crude Oil prices, and traders should use it with their trading. Finally, at 18:15 (GMT), the Federal Reserve will announce the U.S Interest Rates for September. This promises to create hefty volatility in the market, which should provide various opportunities for traders to enlarge profits.

Economic News

USD - The Dollar Falls before Federal Reserve Meeting
The U.S Dollar's weakness resumed, as global investors again embraced risks, reducing safe-haven demand for the U.S. currency, as traders took positions on the first day of the Federal Reserve monetary policy meeting. The U.S. Dollar also weakened on speculation that the Group of 20 leaders, meeting in Pittsburgh starting tomorrow, will call for a reduction in global trade imbalances that may cause further gains in the greenback's counterparts. The greenback traded at $1.4794 per EUR from $1.4790 yesterday, after declining to $1.4842 earlier on, the lowest level since September 22, 2008.

The hard-pressed Dollar had gained some ground Monday as equity markets weakened, with traders tying a decline in risk appetite to caution ahead of the Fed meeting, as well as the summit of Group of 20 leaders at the end of the week. But Tuesday's resumption of risk appetite may reflect views in the market that neither event is likely to produce meaningful changes analysts said.

Market sentiment toward the USD remains bearish. Analysts expect the Fed to signal its ultra-loose monetary policy will remain in place well into next year. Additionally, as the G20 to discusses rebalancing the global economy this will almost certainly further weaken the Dollar. The Federal Reserve is widely expected to leave Interest Rates unchanged. But markets will seek out clues on the Fed's asset purchases. Any sign that the Fed intends to continue its quantitative easing measures beyond this year could send the U.S Dollar to record lows.

EUR - Euro Hits $1.48 for the First Time in a Year!
The EUR traded at a 1 year high against a sliding Dollar on Wednesday, as traders took advantage of the U.S. currency's rise the previous day to resume selling ahead of a Federal Reserve monetary policy meeting. The European currency advanced as hopes for a global recovery prompted investors to shift money to higher-yielding currencies from the safe-haven greenback.

In late trading, the EUR was up 0.8% at $1.4796 after options-related demand and strong Asian buying pushed it above $1.48 for the first time since September 2008. European Central Bank (ECB) Governing Council member Axel Weber said on Tuesday recent moves in currency markets were surprising given the Euro-Zone's economic performance relative to other major economies. Traders expect the $1.4870 level may be the next target in EUR/USD cross, with many predicting an eventual move back to $1.50.

The British Pound also gained against the U.S Dollar for the first time in 4 days, as stocks rallied around the world on evidence that the global economic recovery is accelerating. The British currency advanced 1% to $1.6376. The GBP rose 0.2% against the EUR to 90.33 pence, ending a 6 day losing streak. Against the EUR, the British currency rebounded from near the lowest level in more than 5 months after Goldman Sachs Group Inc. recommended selling the common European currency against Sterling.

JPY - Yen Gains as USD Remains Under Pressure
The Japanese Yen extended its gains on Wednesday vs. the greenback as investors unloaded the U.S. currency ahead of meetings by the Federal Reserve and the G20 leaders this week. The currency gained for a 2nd day against the U.S Dollar on speculation world leaders will discuss policies to rebalance global economic growth at the G20 meeting this week. The JPY climbed to 90.82 Yen per Dollar from 91.10, and rose to 134.40 Yen per EUR from 134.76.

The Japanese currency is likely to strengthen further before new Finance Minister Hirohisa Fujii takes office this month; he said a strong Yen was generally good as it boosted the purchasing power of Japan's economy. Fujii subsequently backed away from that comment, but speculation will remain that after sweeping to power last month, the Democratic Party of Japan may try to shift the country away from its reliance on exports and its opposition to Yen strength.

Crude Oil - Crude Rebounds as Inventories are Expected to Decline
Crude Oil prices rose Tuesday to above $72 a barrel, as pressure on the Dollar and expectations for a further drop in U.S. Crude inventories boosted market sentiment. Weekly petroleum data is likely to show that stockpiles of Crude fell again last week, as imports remained low analysts said. Last week, the EIA said Crude Oil Inventories decreased by 4.7 million barrels in the week ending Sept. 11, as imports dropped 2.1% from a week ago.

The move in Crude Oil today is likely to be supported by a fresh wave of selling of the U.S. Dollar. Traders will be waiting for U.S. Crude inventory data from the American Petroleum Institute and the U.S. Energy Information Administration. Also of interest to commodities traders is leaders of the world's most powerful economies will convene in Pittsburgh later this week for the G20 Summit.

Technical News

EUR/USD
The pair continues with the bullish momentum and is now trading around the 1.4815 level. As both the MACD and the RSI on the 4-hour chart are pointing up, it looks that the bullish trend is likely to continue today. Going long might be the right choice today.

GBP/USD
Ever since bottoming at the 1.6130 level, the cable saw a sharp uptrend, and has recently breached through the 1.6400 level. As a bullish cross is taking place on the 4-hour chart's Slow Stochastic, it seems that another bullish session might be impending.

USD/JPY
There is a very distinct bearish channel formed on the daily chart, as the pair is now floating on the bottom of it. The next strong support level seems to be located at the 90.00 level. If the pair will drop below it, it might signal a long-lasting downtrend.

USD/CHF
The pair continues with the bearish momentum, and is now approaching the 1.0200 level. As all oscillators on the daily chart are pointing down it seems that the bearish trend might continue today.

The Wild Card

Crude Oil
The high volatility of Crude Oil continues, as yesterday a barrel of Oil was traded for over $71.50. However, a bearish cross on the 4-hour chart's Slow Stochastic suggests that a bearish correction might take place today. This might be a good opportunity for forex traders to catch the trend at its beginning.

Published on  Wed, Sep 23 2009, 06:47 GMT

Forex Trading − Market Expects Low Volatility Today

Tue, Sep 22 2009, 07:16 GMT
by Greg Holden

ForexYard

There is likely to be less volatility in the market today with almost no market moving data on tap from Japan Europe and Unites States. Yet, few fundamental events that are due out later today may indeed create a remarkable wave in the market, especially towards the late afternoon hours.

Economic News

USD - USD Ups and Downs Result of Market Uncertainty
The US Dollar experienced an exciting trading day on Monday as a rise in risk averse trading helped add an early morning boost, followed by a retracing of Friday's levels. Against the EUR, the greenback climbed to as high as 1.4610 before coming back down and closing the day at 1.4717. Versus the British Pound, the USD gained as much as 90 pips, with a high mark of 1.6134, before coming back up and closing out the trading day at the 1.6250 level.

With a decision regarding the Federal Funds Rate looming, traders are becoming more aware of the potential delay in any increase to short-term interest rates due to the instability of global economies recently. Britain has made similar overtures, as did the Euro-Zone in its recent discussions. However, the question still remains over whether the global economy is indeed recovering as many were expecting. This uncertainty drives many investors back into safe-havens for the short-run until things become clearer.

As far as the North-Western Hemisphere is concerned today, the United States is not due to release much data of concern. Canada, on the other hand, is going to release vital data regarding its retail sales levels, which last week caused a stir among the USD and EUR. Growth in Canadian sales may help return the Loonie back to a bullish posture, but forecasts appear modest at best. This Wednesday's US interest rate decision appears to be this week's primary event for Dollar traders.

EUR - EUR Benefits from USD and GBP Aversion
The EUR continued its rally against most currencies, save the USD, in yesterday's trading; making considerable inroads against the GBP especially. Climbing as high as 0.9076 versus the Pound and upwards of 135.48 against the Japanese Yen, the EUR may indeed be one of the primary beneficiaries of market growth, and the continuing uncertainty.

Investors appear ready to make the shift into riskier assets to return to the heady days of pre-2008 growth, but market concerns make their transition move somewhat sheepishly. Regional retail sales in Europe and the US helped give a boost to consumer optimism, but only offset losses in other sectors such as housing and consumer sentiment. With the Pound under heavy selling pressure following statements from Bank of England governor Mervyn King, the EUR, as stated above, has become one of the primary beneficiaries of recent returns to strength and risk appetite.

Going into today's trading, with little on the economic agenda, the EUR may be poised to benefit from the uncertainty surrounding the US interest rate decisions due on Wednesday. With an announcement similar to those of Britain and Europe recently regarding a delay of an interest rate hike, the EUR could be on the receiving end of further risk appetite and USD-aversion.

JPY - Japanese Bank Holiday Puts Additional Sell Pressure on Yen
The Japanese Yen appears to be returning to a bearish posture against its major currency rivals considering it ended yesterday's trading down somewhat versus all of its major rivals. Hitting the 149.60 level against the GBP, and even dropping to the 135.50 level against the EUR, the island currency is a little worse for wear considering its latest movements.

Many economists point out, however, that the banks in Japan being closed in celebration of the autumnal equinox carries a significant role in this latest downtrend. The thinly traded JPY only appears weak momentarily until the Japanese markets come back online early Wednesday. In other Asian news, the currencies of the south Pacific (Australia and New Zealand) appear to be gaining heavily against all of their currency rivals. Their avoidance of the harshest aspects of the global downturn has made them juicy targets for risk-hungry investors. Traders would be wise to note the upward movement of these pairs and trade accordingly.


Crude Oil - Crude Falls to $70; Prices Rose too Quickly According to Investors
Investors hoping for a growth in oil prices were dismayed by news yesterday that the price for a barrel of Crude Oil may have risen too quickly from last week's market optimism. As yesterday helped traders realize, Crude Oil may indeed be over-valued and its recent strength has come to a temporary halt. After last week's steady yet volatile gains, the beginning of this week has started with a drop of almost $3 a barrel, closing out yesterday's trading just above $70.

Adding to the sell pressure on Crude Oil is the surprising surge in the value of the USD in yesterday's early trading hours, albeit offset somewhat by its retraction later in the day. But market optimism seems to have returned, but energy demand concerns persist. Crude Oil has been on the verge of reemerging as a lead investment and inflationary hedge, yet it has failed to receive the same level of support as Gold and Silver, which suggests that demand for oil is low, and precious metals are being used in its stead as a safety valve. Chances are, so long as market uncertainty remains, Crude Oil will continue to float near its current mark.

Technical News

EUR/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 hourly chart's Momentum oscillator also supports this notion. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

GBP/USD
The cross has been dropping for the past week now, as it now stands at the 1.6240 level. The Slow Stochastic of the daily chart shows a bullish cross has recently formed, indicating that an upward correction is imminent. This view is also supported by the RSI of the 4-hour chart. Going long with tight stops may turn out to be the right choice today.

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 daily chart is showing mixed signals with its RSI fluctuating at the neutral territory. 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. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.

The Wild Card

EUR/GBP
This pair's sustained upward movement has finally pushed its price into the over-bought territory on the daily chart's RSI. Not only that, but there actually appears to be a bearish cross on the Slow Stochastic pointing to an imminent downward correction. Forex traders have the opportunity to wait for the downward breach on the hourlies and go short in order to ride out the impending wave.

Published on  Tue, Sep 22 2009, 07:16 GMT

Forex Trading − Dollar Tentatively Higher Ahead of Federal Reserve Meeting

Mon, Sep 21 2009, 08:11 GMT
by Greg Holden

ForexYard

This month investors have increasingly moved to riskier assets like stocks, commodities and higher-yielding currencies, as concerns about a ballooning U.S. fiscal deficit and low Interest Rates have fueled Dollar selling. The Federal Open Market Committee (FOMC) is expected to hold Rates steady but markets will be interested for any guidance on whether the Fed will continue its expansionary monetary policy for a prolonged period of time

Economic News

USD - Dollar Advances on Economic Optimism
The Dollar saw quite a volatile session during last week's trading. The Dollar dropped against the EUR, although saw a rising trend against the Yen and especially against the Pound, as the Dollar soared over 400 pips against the GBP. On Monday the U.S dollar gained in thin conditions, extending a bounce seen late last week as traders covered short positions ahead of a Federal Reserve monetary policy meet and a Group of 20 summit.

It seems that the main reason for the Dollar's volatility is the mixes results coming from the U.S economy last week. The U.S Retails Sales continued to deliver positive figures. This means that the total value of sales at the retails level is growing, showing that consumers in the U.S might feel safer to spend these days. Also last week, the Consumer Price Index (CPI) rose by 0.4%, proving that inflation continues to rise in the U.S. This could have a significant impact on the Dollar, as the rising inflation usually leads to an interest rate hike, which may very well support the Dollar.

But on the other hand, the Long-Term Purchases publication failed to reach expectations for a 65.3B result which would have reflected a recovering economy, and the final result was 15.3B. This appears to be one of the main factors for the Dollar depreciation against the Euro.

As for the week ahead, a number of important data are expected from the U.S economy. The most significant will be the Federal Funds Rate Statement which is scheduled for Wednesday 18:15 (GMT). Analysts expected no change to the central bank's target, but speculate whether the fed will make changes to its debt-buying programs. Traders are advised to pay close attention to the Fed's announcement on Wednesday.

EUR - The EUR off 1 Year Highs; GBP Dips
The EUR eased against the U.S. dollar to $1.4688, having lost about 0.2% on Friday, though strong support is seen around $1.4640. On the Yen, the European currency held steady around 134.35 yen. The EUR dropped from near a 1 year high versus the U.S dollar after the European Union (EU), said yesterday that a restructuring of the banking sector must take place. According to EU policy makers Europe needs continued low Interest Rates and government stimulus measures to keep the recovery on track.

The Sterling extended losses, hitting a 4 month low against the EUR of 90 pence on news the UK had set tougher-than-expected conditions to the potential exit of Lloyd's Bank from a state-run scheme to protect its assets. The GBP dropped to 90.53 pence per EUR from 90.40 pence on Sept. 18, after earlier touching 90.67 pence, the lowest level since Apr. 24. The British pound may weaken further against the Dollar and the EUR on speculation the Bank of England will keep borrowing costs low.

Looking ahead to this week, a batch of data is expected from the Euro-Zone's leading economies, especially on Wednesday. Many French and German indicators are scheduled for Wednesday, as this day seems to be the day that will determine the Euro's direction for this week. Traders are advised to follow all the main publications on this day and look for any unexpected result that may soar or tumble the Euro.

JPY - Yen Losses Strength against the Majors
The Yen continues to depreciate against the major currencies during last week's session. The Yen dropped over 100 pips against the Dollar and the USD/JPY pair is currently traded around the 91.50 level. The Yen also saw a bearish trend against the EUR.

While the Japanese yen gained against all but one of the 16 most- actively traded currencies since early August as the Democratic Party of Japan became the likely winner in national elections, forecasters say it will decline 5.7% against the U.S dollar and 1.2% versus the EUR by year-end. The economy is too weak to support a stronger rate, according to analysts.

The main data of this week appears to be the Trade Balance report, which is expected on Wednesday 23:50 GMT. This report measures the difference in value between imported and exported goods during August, and is one of the best indications for Japan's exports. A better-than-expected result might have the potential to support the Yen.

OIL - Crude Oil Slips On Firmer Dollar
Crude prices fell for a 3rd day on speculation further evidence of a global recovery is needed to extend the commodity's 61% gain this year. Oil prices were also pressured by bearish comments from Sinopec, Asia's top refiner and China's 2nd largest oil and gas producer, that diesel demand in China continues to lag economic recovery.

Oil rose 3.9% last week, thanks to U.S. government data showing a larger-than-expected draw in crude stocks, heavy losses in the U.S. dollar and rallying stock markets. Though Crude prices have only gained about 3% so far this quarter, after shooting up 40% in the June quarter, some analysts said Oil prices were set to move higher in coming weeks amid an economic recovery and seasonal winter demand.

Looking ahead to this week, traders are advised to follow the leading publications from the U.S and the Euro-Zone, and to follow the equity markets in the major economies in order to predict crude oil's movements. Traders should also focus on the Crude Oil Inventories report which is expected in Wednesday, as it has proven to have an instant impact on oil's value.

Technical News

EUR/USD
The price of this pair appears to be floating in the over-bought territory on the RSI of the daily chart, signaling a downward correction may still be relevant. The imminent bearish cross on the daily chart's Slow Stochastic also supports this notion. Going short might be a wise choice today

GBP/USD
The Bollinger Bands on the hourly chart appear to be tightening in expectation of a volatile movement. As the 4 hour chart's RSI shows the price of this pair floating in the over-sold territory, and as the recent bullish cross on that chart's Slow Stochastic demonstrates, we may be in for a sharp upward movement. Going long with tight stops might be a good strategy

USD/JPY
An upward movement on the hourly chart is running full steam ahead. A distinct bullish channel hasn't been breached yet, while 92.25 might be the next target price. The daily chart also confirms that notion; therefore going long may be a preferable strategy today

USD/CHF
It appears a breach of the upper border of the hourly chart's Bollinger Bands occurred early this morning, indicating the pair may correct downwards in the nearest future. However, the bullish channel which this pair is currently trading in has not been penetrated by a clear breach of its upper or lower levels. Trading within this range by buying on lows and selling on highs might be a wise choice today.

The Wild Card

Gold
The price of this commodity currently floats in the over-sold territory on the 4-hour chart's RSI, indicating an upward correction may occur in the nearest future. With the recent bullish cross on both the 4-hour and hourly chart's Slow Stochastic oscillators, this correction may indeed be imminent. Forex traders can earn high profits today by opening large buy positions and riding out this impending movement

Published on  Mon, Sep 21 2009, 08:11 GMT

Forex Trading − Dollar Edges Up Against EUR, Crude Falls with Stocks

Fri, Sep 18 2009, 06:43 GMT
by Greg Holden

ForexYard

The Dollar took a break from its bullish run versus the EUR yesterday, but the long term trend could continue today. Driving yesterday's reversal were losses in U.S. equities and stronger manufacturing data from the U.S. Today's trading will be highlighted by key data releases from Europe and Britain, perhaps returning the EUR/USD to its bullish streak.

Economic News

USD - USD Profits as Stocks Sell Off
The U.S. Dollar held small gains late Thursday as pessimism about the strength of the economic outlook put selling pressure on stocks and higher-yielding currencies. The currency had been lower earlier with stocks rising after the Federal Reserve Bank of Philadelphia's index on manufacturing jumped far more than forecast this month.

The U.S Dollar also traded higher against the Yen at 91.21, up from 90.84 yen Wednesday. The Dollar sank to a seven-month low against the Japanese currency on Wednesday. The Dollar's slide against the yen picked up pace after Japan's Finance Minister Hirohisa Fujii said a strong yen had advantages for the nation's economy.

The Dollar has been on the ropes in recent weeks, with the Dollar index losing 2.41% this month. Pressure has been tied in part to rising risk appetite, which has seen investors shun the greenback's safe-haven status in favor of equities and other assets.

Still analysts expect the U.S Dollar to resume its more traditional relationship with economic data, rising with positive economic news and falling when the outlook for the U.S. turns gloomier.

EUR - Euro Hit 1-year Peak vs. the U.S Dollar
The European currency held onto gains to hover near a 1-year highs against the U.S. Dollar on Friday, as equities and commodities advanced on expectations of economic recovery, putting pressure on the greenback. It advanced a 3rd day to $1.4716 and yesterday reached $1.4737, the strongest level since last September. The EUR has gained more than 2.5% this month, riding improved investor confidence and expectations that U.S. rates are likely to stay at rock bottom for some time.

The EUR also traded near a 4 month high versus the Pound before a German report today that may show the pace of decline in producer prices slowed, providing more evidence the 16-nation region's economy is emerging from the recession. The pound traded near its lowest since May as a report yesterday showed the jobless rate in the U.K. rose to the highest since 1995.

The 16-nation currency rose above 98 pence for the first time on Dec. 30. It advanced a third day to $1.4716 and yesterday reached $1.4737, the strongest level since Sept. 25, 2008. The Sterling is likely to weaken in the coming months as the government needs to rein in spending and its central bank is likely to retain an expansionary monetary policy, analysts said.

JPY - Yen Gains after BOJ's Shirakawa Comments
The Japanese yen had gained after Japan's new finance minister said currencies were not moving rapidly and that he opposed currency intervention as long as market moves were moderate. The Yen rose to the day's high against the Dollar pushing the U.S. currency down more than 0.2% on the day to around 90.60 yen. The pair traded around 90.90 yen before the comments.

The yen also got a boost after Bank of Japan (BOJ) Governor Masaaki Shirakawa said a stronger yen would push down prices in the near term but might support the economy in the longer run. The Japanese currency jumped versus the EUR, which trimmed earlier gains and slid to the day's trough of 133.54 yen, down slightly on the day.

OIL - Crude Oil Trades Lower as USD Firms
Crude Oil finished slightly lower after a volatile session Thursday, as the U.S Dollar firmed and traders digested upbeat economic news and a bigger-than-expected drop in U.S. stockpiles in the previous session. Crude earlier rose to a high of $73.16 a barrel and fell to a low of $70.40 a barrel.

On Wednesday, Oil rose more than 2% after the Energy Department reported a bigger-than-expected drop of 4.7 million barrels in U.S. stockpiles of the commodity in the week ended Sept. 11. Oil remains unable to top the upper end of its trading range at $73 a barrel without a new trigger, analysts said.

Oil has tracked equities markets closely in recent months as dealers look to stocks as a leading indicator of an economic recovery that could boost ailing energy demand. What happens to the Dollar, stock market and Gold are now driving the Oil market on a daily basis. A weaker Dollar can fuel purchases of Oil and other Dollar-denominated commodities, as they become relatively less expensive to non-Dollar holding investors.

Technical News

EUR/USD
Yesterday's respite in the pair's bullish streak looks to have some legs in it. The daily chart displays a bearish cross has formed on the Slow Stochastic Oscillator, indicating the potential for a downward correction. The daily chart also shows the pair trading in the overbought zone on the Relative Strength Index, indicating the pair may be overpriced from the previous weeks rally. Traders may look to be short on this pair today.

GBP/USD
The Cable may be due for some short term strengthening against the Dollar today as the hourly chart shows the pair trading in the oversold range on the RSI. This suggests upward pressure for the currency pair. On the 4-hour chart the current bar has begun at the lower border of the Bollinger Bands, indicating the potential of the pair to rise from the lower border all the way to its upper border. A long position looks to be the right play.

USD/JPY
The hourly chart's Bollinger Bands continue to tighten, indicating the potential for a violent breach of the pair's borders. The weekly chart also shows a fresh bullish cross has formed on the pair's Slow Stochastic, indicating the potential for long term upward movement. Traders could profit today by being long on this pair.

USD/CHF
While the pair remains in a bearish streak, the daily chart shows us that this downward movement may be coming to an end. The daily chart displays a bullish cross has formed on the pair's Slow Stochastic Oscillator, indicating the potential for a change in direction. The pair is trading well below the lower level of the Relative Strength Index, indicating the pair is oversold. It may be the right time to go long.

The Wild Card

GBP/AUD
The hourly chart is showing buy signals today as a bullish cross has appeared on the chart's Slow Stochastic, hinting towards an upward correction. The chart's RSI is also showing upward momentum as the pair is trading in the oversold zone. Going long could be the profitable way for forex traders to go today.

Published on  Fri, Sep 18 2009, 06:43 GMT

Forex Trading − USD Continues Decline; Slow Economic Recovery Expected

Thu, Sep 17 2009, 07:11 GMT
by Greg Holden

ForexYard

With recent fears over inflation and fiscal deficits, the market surprisingly appears calmer than it should be. The USD has continued its decline, suggesting that either faith in the American economy is fleeting, or investors are increasing their risk appetite and dumping US Treasuries. Either way, the decline in the value of the USD has helped boost energy prices and fueled export growth worldwide. Economic recovery seems to be underway, but many caution that it will still be a long and bumpy ride.

Economic News

USD - Dollars Falls on Market Optimism
The Dollar dropped to near 1-year lows against most of its major currency pairs yesterday as optimism about the global economy eroded the greenback's safe-haven appeal. By yesterday's close, the USD fell against the EUR, pushing the oft-traded currency pair to 1.4730. The Dollar experienced similar behavior against the GBP and closed at 1.6492.

Traders have sold the Dollar heavily this month as recovery hopes have diminished safe-haven demand. The prospect of low U.S. yields and concerns about the U.S. fiscal deficit also fueled Dollar selling. In addition, market participants increased bets on stocks and commodities, encouraged by better-than-expected U.S. consumer price index (CPI) and Industrial production data yesterday, while Federal Reserve chairman Ben Bernanke said the U.S. recession was most likely over, though he also warned the recovery would be slow.

Today's Unemployment Claims and Building Permits releases are expected to have a strong impact on the U.S currency. Any result could be a surprise, and the Dollar could go either way as a result. In any case, traders are unsure how the market will react to today's data. A weak report could feed risk aversion, boost Treasuries and actually aid the U.S Dollar. Then again, a better than expected result might be seen as a sign of relative U.S. economic strength, and lift the Dollar. Or it could also encourage risk-taking and aid commodities and higher-yielding currencies at the Dollar's expense.

EUR - EUR Rises on Weaker Dollar
The EUR strengthened against most of its major currencies yesterday as gains in stocks and commodities prompted investors to wade into riskier currency trades. The 16 nation currency extended gains to hit a near one-year high against the dollar and closed at around 1.4714. The EUR experienced similar behavior against the CHF as the pair rose from 1.5150 to 1.5195 by day's end.

The EUR was affected by the global stock market rally and the bearish Dollar. The U.S. stock market rally led investors to buy-back into the EUR, as they looked for returns on buying commodity-linked and higher-yielding currencies in Wednesday's trading.

The Sterling extended losses against the EUR and JPY yesterday, after U.K. unemployment jumped to the highest level since 1995 as the recession destroyed work in industries from banking to construction, stoking concerns about the pace of recovery in the British economy. The GBP was also down 0.8% against the EUR at 0.8920.

Looking ahead to today, the most important economic indicator scheduled to be released from Britain is the Retail Sales report at 8:30 GMT. Analysts are forecasting this figure to decrease from its previous reading. Traders will be paying close attention to today's announcement as a better than expected result may boost the GBP in the short-term. Traders are also advised to follow the Trade Balance figures coming out of Euro-Zone at 9:00 GMT, as this result may set the EUR's main currency crosses going into today's trading.

JPY - USD/JPY Hits 7-Month High
The Yen completed yesterday's trading session with mixed results versus the other major currencies. The JPY was broadly unchanged versus the EUR yesterday and closed its trading session around the 133.70 level. The Japanese yen also saw bullishness against the Dollar, closing in on a 7-month high against the U.S. currency after Japan's incoming finance minister said a strong yen had advantages for the nation's economy.

The Japanese market should have a heavy effect on the JPY versus its major currency counterparts, as the Overnight Call Rate will be announced today. The rate is expected to remain unchanged, but traders should pay close attention to the BoJ Press Conference that will follow to look for expectations of Japan's economic future. A bullish statement from the BoJ could lead some traders to believe that it is forecasting a rosier financial climate in Japan.

Crude Oil - Crude Oil spikes on Better Inventory Data
Crude Oil prices experienced another day of appreciation as the oft-traded commodity rose above $72.80 during yesterday's trading session. Oil prices traded up for the second straight day. This has been compounded by a weaker Dollar that has also caused investors to flee to commodities such as Crude Oil.

Moreover, with crude oil inventories in the US shrinking more than anticipated, there is a chance that prices will continue to rise as demand climbs from market optimism and economic growth. These factors point to the notion that Crude Oil's price may stumble across more support in the near future and continue to rise.

Technical News

EUR/USD
The price of this pair appears to be floating in the over-bought territory on the hourly and daily RSI, suggesting downward pressure. There also appears to be a fresh bearish cross on the 4-hour and daily Slow Stochastic, indicating that the next movement will likely be down. Going short might be a wise choice today.

GBP/USD
This pair seems to be consolidating around 1.6500 lately. With a doji candlestick formation on the daily chart, and bullish crosses on the hourly and 4-hour MACD, the next movement may indeed be an upward reversal for this pair. Going long with tight stops could turn out to be a smart move today.

USD/JPY
All oscillators on this pair have completed a bullish indication and are now cascading upward. The momentum of this pair seems to have shifted from a downward direction to an upward direction. Going long may be today's preferable tactic.

USD/CHF
There seems to be a distinct bullish cross on the daily Slow Stochastic of this pair, suggesting the next movement may be in an upward direction. The price also floats in the over-sold territory of the daily RSI, which supports this notion. Going long might not be a bad idea today.

The Wild Card

Gold
This precious metal's sustained upward movement has resulted in its price floating in the over-bought territory on the 4-hour and daily RSI, suggesting significant downward pressure. With 2 consecutive bearish crosses on the 4-hour Slow Stochastic and hourly MACD, forex traders may have an opportunity to jump on the downward correction of this commodity, and at a great entry price.

Published on  Thu, Sep 17 2009, 07:11 GMT

Forex Trading − USD Hits 1−Year Low on U.S Economic Pessimism

Wed, Sep 16 2009, 11:49 GMT
by Greg Holden

ForexYard

The U.S Dollar struck a one-year low against a basket of currencies on Wednesday, as investors reduced dollar holdings on views that the U.S. currency may weaken for now due to pessimism over the U.S. economy. Investors have been selling the greenback across the board as they speculate the Federal Reserve will be forced to keep its Interest Rates low for the time being to support the country's fragile economy. Looking ahead, currency players will watch for the U.S. consumer price index (CPI) for August to be released later in the day. The CPI data has the biggest potential to move forex markets, since a weak figure could lead to lower long-term U.S. interest rates, and that might prompt more Dollar selling.

Economic News

USD - Dollar Reaches Lowest from Improving Risk Appetite
The U.S Dollar declined Tuesday, pushing the currency to the lowest level in a year and reversing earlier gains versus major counterparts after a pair of economic reports said U.S Retail Sales and Producer Prices rose more than economists expected, encouraging speculation that the economy is reviving.

As the global recovery continues, and risk diversification takes place, traders could see the U.S. Dollar remain under pressure for the upcoming months. Against the Japanese yen the Dollar also gave up earlier gains to trade at 91.07 yen, little changed from 91.02 yen late Monday.

The greenback was also undermined by gains in global stock markets, which reduced the USD appeal as a safe haven. For months, the greenback has tended to move in the opposite direction as equities as investors' willingness to buy riskier assets fluctuates. That trend has shown signs of diminishing in the past month or so, and resuming its more traditional correlation to economic data.

Traders have sold the U.S. currency heavily so far this month as optimism about a global economic recovery diminished safe-haven demand. The prospect of low U.S. yields and concerns about the widening U.S. fiscal deficit fueled Dollar selling.

Today in focus will be a slew of U.S. data to be released later in the day. The U.S. consumer price index (CPI) for August, 2nd quarter current account data, August industrial production numbers and September NAHB housing data are all due.

EUR - Pound Drops versus USD and EUR
The EUR dropped early Tuesday versus the Dollar after the ZEW German Economic Sentiment index showed weaker than expected results; however, the common currency later trimmed its losses, trading at $1.4671, from $1.4614 versus the Dollar on Monday.

The British Pound was the big mover on currency markets, dropping versus the greenback and falling to a 3-month low versus the European single currency after Bank of England (BOE)Governor Mervyn King said the Monetary Policy Committee was considering a cut in the deposit rate paid on some reserves held by commercial banks at the BOE. The GBP fell 0.5% versus the USD to $1.6498. The EUR advanced to its highest level against the GBP since June, trading at 88.94 pence

While a slow news day is expected from the Euro-Zone today, the release of the British Unemployment data at 8:30 GMT might help the Pound to regain some of its losses. The release of the Euro-Zone CPI report might weigh down on the common currency if the number is worse than expected, sparking fears of deflation.

JPY - JPY Down after Release of Encouraging US Data
Japan's currency traded at 133.45 per EUR early morning, from 133.47 yesterday in New York. It traded at 91.02 per USD from 91.05. The Yen is being sold as investors move away from risk averse trading and into higher yielding assets following encouraging economic data from the US which signaled the recession is coming to an end.

The release of the Industrial Production report today at 13:15 GMT is predicted to show an increase of 0.6%, the most since October. This will likely contribute to further sell off of the Yen versus its riskier counterparts.

Crude Oil - Crude Prices Near $71 a Barrel
Crude Oil fell nearly 1% toward $71 on Wednesday, giving up some of the previous day's gains of 3%, as a higher-than-expected rise in oil product stocks outweighed news signaling a U.S. economic recovery.

Though Crude Oil has more than doubled from this year's low of $32.70 hit on January 20, it is trading 72$ below the record high of more than $147 struck in July 2008. Economists expect Crude prices to hover between $60 and $70, as demand has still not recovered to the extent that would help to sustain prices above $70.

The American Petroleum Institute said in its weekly inventory report after Tuesday's close that crude stocks rose by 631,000 barrels last week, against the forecast for a 2.4-million-barrel drawdown. The oil market is currently focusing more on EIA data than equities or the Dollar, analysts have said.

While today's release of US inventory data due at 14:30 GMT is expected to show a drop in stockpiles, a modest drop might not be enough to push Oil on another rally as inventories are still at their highest level.

Technical News

EUR/USD
The hourly chart is showing mixed signals with its RSI fluctuating in the neutral territory. However, the daily chart's RSI is already floating in the over-bought territory indicating that a bearish correction might take place in the nearest future. When the downwards breach occurs, going short with tight stops appears to be a preferable strategy.

GBP/USD
As a result of a significant downward movement yesterday, the pair has been pushed into the over-sold territory on the 4 hour chart's RSI, indicating that an upward correction may occur later today. The hourly chart's Slow Stochastic also appears to be showing an imminent bullish cross, which supports this notion. Going long with tight stops might be the right choice today.

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

USD/CHF
This pair is in the middle of a very intensive downtrend that was initiated 3 days ago and it still shows great momentum that on a bigger scale appears to have more room to run. In the shorter time frame, there might be a minor bullish correction before the bearish move resumes. Selling on highs appears to be preferable today.

The Wild Card

Silver
The violent bullish trend continues as all technical indicators on the daily and the 4 hour charts are showing that the direction is up and the momentum is high. This provides forex traders with a great chance of enjoying the additional upwards momentum which still seems to be remaining for this commodity.

Published on  Wed, Sep 16 2009, 11:49 GMT

Forex Trading − Dollar Down to Weakest Level of 2009

Tue, Sep 15 2009, 08:10 GMT
by Greg Holden

ForexYard

The U.S. Dollar fell versus the EUR but clung to small gains against other major rivals on Monday. This came as traders turned their focus to data coming this week and as the EUR and Yen hit technical levels that triggered some buying. The market focus now shifts to a slew of U.S. indicators to be released between Tuesday and Thursday that could determine whether the Dollar will continue to trade lower, or experience a pause.

Economic News

USD - Dollar Tumbles to 1-Year Low vs. EUR
The Dollar tumbled to a 1-year low vs. the EUR in Monday's trading. However, the USD did make some gains against other currencies, despite the USD falling in early trading, as Monday was a very volatile trading day. The main factor that pushed the U.S. lower against the EUR yesterday was that U.S. stocks made significant gains, led by industrial and financial shares that helped the market prevail over an earlier slump. This led investors to drop the USD in some cases for higher yielding currencies and equities.

The EUR/USD pair closed higher by 70 pips at the 1.4614 level, which was slightly lower than the high reached yesterday of 1.4652. Obama's speech about the U.S. financial rules overhaul on Monday helped the USD strengthen against several major currencies. The USD/JPY cross finished trading at 91.10, the first daily rise in a week-and-half. This all shows that the USD was unable to gain considerable strength yesterday, as no economic data was released from the U.S., which put the greenback on the backburner.

Looking ahead to today, there is expected to be much economic data released from the U.S. economy. Core Retail Sales, PPI and Retail Sales figures will be released simultaneously at 12:30 GMT. If the figures are better than expected, then this may lend a lot of support to the greenback. However, worse figures could send the USD lower again the EUR for a second day in a row. Later on, Treasury Secretary Timothy Geithner is expected to speak about the U.S. economy at 14:00 GMT. Any clues about future U.S. Interest Rates are likely to create to great volatility in the U.S. Dollar going into mid-week trading.

EUR - EUR Soars despite Poor Fundamentals
The Euro-Zone Industrial Production fell for a 2nd straight month in July, stressing the frailty of the Euro-Zone economic recovery. The data was -0.3% lower from the previous reading, sparking possible fears that European Central Bank (ECB) President Jean-Claude Trichet will raise Euro-Zone interest rates later than originally forecast. Yesterday, all of this actually led to a buy-up of the EUR, as the European currency's safe-haven status returned to the forefront.

The EUR made significant inroads into the U.S. Dollar, as the pair rose to 1.4614 level, it's highest in nearly a year. The EUR also gained against the GBP by nearly 50 pips, as investors favored the EUR over the British currency in yesterday's trading. It seems that despite yesterday's lack of confidence in Europe, the European currency seemed to act the opposite way to the equity market. The EUR marked its first bullish trading day vs. the JPY since Wednesday, as the cross closed significantly higher at the 133.20 level.

Today, the most significant release from the Euro-Zone will be the German ZEW Economic Statement at 9:00 GMT. This is expected to be the main source of volatility for the EUR in early trading, as it is a leading measure of economic health for both the German and Euro-Zone economies. From Britain, the main releases today are the CPI figures at 8:30 GMT and the Inflation Report Hearings at 8:45 GMT. Optimistic results may push the GBP significantly higher today. This would be a much needed boost for the Pound, as it seeks to reverse yesterday's losses against its major currency crosses.

JPY - Yen Slips against the Majors
The Yen slipped against the majors on Monday, as Japan's currency failed to extend its recent gains. It is important to note that the Yen has gone very bullish against its major currency pairs in recent days. Therefore, yesterday's behavior may be a correction due to the JPY being overvalued lately. Also, investors dropped the JPY on Monday, as they seeked to make profits in higher yielding currencies and commodities such as Crude Oil.

In yesterday's trading, the Yen fell by 70 pips against the USD to the 91.10 level. The Yen closed 110 pips lower against the GBP at the 151.33 level, Also, the EUR/JPY cross finished trading 175 pips higher at 133.20. Today, the JPY is set to move on news coming out of the major economies. If there are good figures from these countries, the Yen's downward correction may continue.

OIL - Crude Oil Steady Bellow $69 a Barrel
Crude Oil closed higher by 55 cents, or nearly 1%, to make a mini comeback by closing at $69.05. This was despite being down for much of yesterday's trading session. Crude was helped by the USD's weakness on Monday, as investor's seeked an alternative investment for higher returns. The black gold also gained due to higher confidence owed to President Obama's speech on Monday over financial regulation.

Crude is set for another mouthwatering and volatile day of trading today. If the USD continues to collapse today, Crude may go higher. Also, Oil may also continue rising if there is an equity market rally led by the U.S. Oil seems undervalued lately, so you traders are advised to buy into this popular commodity now as today's trading gets under way.

Technical News

EUR/USD
After the sharp rise in price yesterday, the pair has been down-correcting to find its true value. With most oscillators beginning to go neutral, the daily chart's RSI still shows this pair in the over-bought territory, meaning there is still room for a downward correction. The Bollinger Bands are tightening on the 4 hour chart. As such, we might be seeing some downward movement today. Going short might be a wise choice.

GBP/USD
The recent uptrend has pushed the price of this pair into the over-bought territory on the RSI of the hourly chart, signaling an imminent downward correction. A bearish cross may also be forming on the hourly charts' Slow Stochastic, which would support the notion of a downward move. Going short with tight stops might be a wise choice today.

USD/JPY
The bearish trend is loosing its steam and the pair seems to consolidate around the 91.00 level. The daily chart's RSI is already floating in an oversold territory suggesting that a recent downtrend is loosing steam and a bullish correction is impending. Going long with tight stops appears to be preferable strategy.

USD/CHF
The 4 hour chart shows that the bearish channel still remains intact, and the pair is now floating around 1.0340 level. Both the RSI and the Slow Stochastic on the 4 hour chart are pointing towards bearish grounds, and no correction appears to be in sight. Going short seems to be a good strategy today.

The Wild Card

NZD/JPY
This pair's sustained upward movement has finally pushed its price into the over-bought territory on the hourly chart's RSI. Not only that, but there actually appears to be a bearish cross forming on the 4 hour charts' Slow Stochastic pointing to an imminent downward correction. Forex traders have the opportunity to wait for the downward breach on the hourlies and go short in order to ride out the impending wave.

Published on  Tue, Sep 15 2009, 08:10 GMT

Forex Trading − Obama Speech to Impact Dollar

Mon, Sep 14 2009, 08:58 GMT
by Greg Holden

ForexYard

The Dollar is likely to go volatile during and following the speech by President Obama today at 16:00 GMT. Meanwhile, forex traders are advised to take positions on trades, as a few of data releases coming out of Euro-Zone and Britain are likely to affect the greenback's main currency crosses.

Economic News

USD - Dollar Finishes a Week of Falling Trends
During last week's trading session, traders that went short on the dollar made profits. The dollar dropped over 300 pips against the Euro, around 400 pips against the Pound, and slid about 350 pips against the Yen.

The Dollar weakened in light of some negative data published from the U.S economy. The U.S Trade Balance report for July showed that the difference between imports and exports increased by 16 percent, the most since 1999. The gap rose to $32 billion from a revised $27.5 billion in June. Also last week, The U.S Consumer Credit, which measures the change in the total value of outstanding consumer credit that requires installment payments, dropped by 21.6$ billion in July.

The end result of this indicator was five times lower than forecasted by analysis, and thus has a negative impact on the Dollar. The Unemployment data from the U.S continues to be bleak. It's been the 35th week in a raw on which over 500,000 individuals have filed for unemployment insurance for the first time. It appears that until the employment condition will take a turn for the better, the Dollar might continue to weaken.

Looking ahead to this week, a batch of data is expected from the U.S economy, including the Retails Sales Indices, the Producer Price Induces, the Consumer Price Indices, the Long-Term Purchases, the Building Permits and the weekly Unemployment Claims. Traders are advised to follow all these publications very closely as positive result from these indicators might have the potential to reverse the current bearish trend of the greenback.

EUR - Mixed Results from the Euro-Zone Creates Volatility for the EUR
The Euro underwent a very volatile session during last week's trading. The EUR rose significantly against the Dollar, lifting the EUR/USD pair above the 1.4600 level. However the Euro dropped against the Yen, and saw mixed results against the Pound.

The Euro began last week's session with rising trends against the major currencies thanks to a positive Factory Orders figures from the German economy. This indicator measures the change in the total value of new purchase orders placed with manufacturers. Analysts predicted a rise of 2.0% during July, yet the end result showed that factory orders rose by 3.5%, increasing for the fifth consecutive month.

However the bullish trend reached its end following poor Industrial Production data from both Germany and France. This indicator is a leasing indicator of economic health as production reacts quickly to ups and downs in the business cycle. Thus, the negative figures showed that it is still soon to declare that the Euro-Zone has pulled out of recession, and that the leading economies of the Euro-Zone are still tumbling.

As for this week, many interesting publication are expected from the Euro-Zone. The data which seems to have the potential to impact the Euro the most is the German ZEW Economic Sentiment report, expected on Tuesday 09:00 GMT. It is a survey of about 350 German institutional investors and analysts who are asked to rate the next 6-months economic outlook for Germany. This report usually has an immense effect on the market, and a positive figure might have the potential to boost the EUR.

JPY - JPY Rises Against the Majors
The Yen rose last week against all the major currencies. The Yen appreciated about 350 pips against the Dollar, sending the USD/JPY pair as low as the 90.16 level. The Yen also soared around 200 pips against the Euro and about 350 pips against the Pound, marking an all around bullish session.

The Yen's sharp bullish movements last week appears to be a correction to the over-weak Yen. It is a widely known that the Bank of Japan (BoJ) sees the weak Yen as the main tool to support the Japanese exporters in the attempt to recover the economy. Japan continues to hold the lowest Interest Rates in the industrial world, and the BoJ is making other steps as well, all in the effort to weaken the Yen. The key target that exporters are holding for the USD/JPY pair is around 94.50, and a lower rate might have severe consequences on the Japanese economy. However for now it seems that investors are still seeing the Yen as a safer haven then most of the major currencies and thus the JPY continues to strengthen.

As for the week ahead, The Japanese Interest Rates for September will be declared on Thursday. The BoJ is likely to leave interest rates, also knows as Overnight Call Rate at 0.10%. However, in case that the BoJ will surprise and will choose to alter rates, this is likely to have a large impact on the Yen. Either way, traders are advised to follow the press conference which is expected short after, as some interesting slues regarding future monetary system might be scattered.

Crude Oil - Crude Oil Drops towards $68 a Barrel
Last week's trading session started with a massive bullish trend for crude oil, which lasted until Friday. A barrel of crude oil was traded for 72.50 at its peak. However, a sudden change happened then, dropping crude oil towards $68 a barrel.

It seems that oil prices dropped as a result of an appreciation of the Dollar since Friday, and some concerns that Crude Oil became over-valued following a week of straight rising trends. It also looks that a few unsatisfying results for financial indicators have increased fear that global economies may not recover as soon as expected, which will likely weaken demand for oil.

Looking ahead to this week, traders are advised to follow the Dollar's value, and the U.S equity markets, as they tend to set the tone in crude oil trading. In addition, traders should also pay attention to the Crude Oil Inventories report scheduled for Wednesday, as its result has proven to have a large impact on crude oil's value.

Technical News

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

GBP/USD
The GBP/USD cross has experienced a bullish trend for the past 2 weeks. However, it seems that this trend may be coming to an end. The RSI of the daily chart shows the pair floating in the overbought territory, indicating that a downward correction will happen anytime soon. Going short with tight stops might be a wise choice.

USD/JPY
The pair has recorded much bearish 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 bullish reversal is imminent. An upward trend today is also supported by the 4-hour chart's Slow Stochastic. Going long with tight stops may turn out to pay off today.

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

The Wild Card

Gold
Gold prices rose significantly in the last week and peaked at $1003.45 for an ounce. However, the daily chart's RSI is floating in an overbought territory 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.

Published on  Mon, Sep 14 2009, 08:58 GMT

Forex Trading − A Global Stock Market Rally Leads Trading

Fri, Sep 11 2009, 09:10 GMT
by Greg Holden

ForexYard

The publication of the U.S. Prelim UoM Consumer Sentiment report at 13:55 GMT is set to lead USD trading today. This release measures the level of a composite index based on surveyed consumers. The figure is expected to be 67.2, up from last month's 65.7. The other important events that are set to drive the forex market today are GBP PPI Input at 8:30 GMT, the U.S. Import Prices at 12:30 GMT and U.S. treasury Secretary Timothy Geithner's speech at 20:45 GMT. Therefore, if you traders want to make big money now, you should open big positions in the majors now.

Economic News

USD - Dollar Declines as Equity Market Rallies
The U.S Dollar fell against most of its major currency pairs yesterday, hitting its lowest level in nearly a year against the EUR, as gains in stocks and commodities prompted investors to wade into riskier currency trades. By yesterday's close, the USD fell against the EUR, pushing the oft-traded currency pair to 1.4603. The Dollar experienced similar behavior against the GBP and closed at 1.66.99.

The Dollar has fallen every day this week against the EUR and Japanese Yen, and it marked its third straight daily decline against the Pound Sterling yesterday. Analysts attributed the fall in the Dollar, which has been treated as a lower risk, safe-haven investment, to growing optimism that the worst of the financial crisis has passed. This has caused investors to buy commodity-linked and higher-yielding currencies, which rallied earlier this week.

A leading indicator released yesterday was U.S. Unemployment Claims. This number handedly beat last week's result. However, it 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.

Looking ahead to today, the most important economic indicator scheduled to be released from the U.S. is the Import Prices at 12:30 GMT. Traders will be paying close attention to today's announcement as a stronger than expected result may boost the USD in the short-term. Traders are also advised to follow Treasury Secretary Timothy Geithner's speech at around 20:45 GMT. This speech is very likely to impact USD volatility. Traders are advised to watch closely, as this is likely to set the pace of the Dollar going into next week's trading.

EUR - EUR/USD Hits One Year High
The EUR rose to session highs against the Dollar yesterday as U.S. stocks extended gains and commodity prices firmed. The 16 nation currency hit 1.4612 against the Dollar, a fresh 2009 high. The EUR was broadly unchanged versus the CHF yesterday, and closed its trading session at around the 1.5140 level.

The EUR was affected by the global stock market rally and the bearish Dollar. The U.S. stock market rally led investors to buy-back into the EUR, as they looked for returns on buying commodity-linked and higher-yielding currencies in Thursday's trading.

The Pound Sterling was actually the biggest mover amongst the majors, propelled higher by optimism about the UK economy and financial sector, and helped by a general move into riskier assets. Britain left Interest Rates at a record low of 0.50%, as it tries to get credit flowing again to strengthen an economy that may return to growth this quarter. Some reports show the outlook is brightening for Britain as Manufacturing Production rose 0.9pc in July in comparison to June. This was the biggest increase since January 2008.

Looking ahead to today, the most important economic indicator scheduled to be released from Britain is the PPI Input at 8:30 GMT. Analysts are forecasting this figure to increase from its previous reading. Traders will be paying close attention to today's announcement as a better than expected result may continue to boost the GBP in the short-term.

JPY - Yen Makes Big Gains on the Dollar
The Japanese Yen strengthened against most of its major counterparts on Thursday, continuing to prove that for the time being that this is the solid currency that traders can rely on to provide them with steady profits. The Yen extended gains versus the Dollar on Thursday, to trade at about 91.40 amid a broad sell-off in the USD. The JPY also saw bullishness against the EUR and closed at 133.60.

Investors worry over a recent rise in the JPY as it makes Japanese products less competitive abroad and hurts the value of overseas sales when translated back into the Japanese currency. With steady gains primarily against the Dollar, much of the Yen's bullish movement could be contributed to the repatriation of overseas earnings by Japanese companies into the local economy. This has had a positive effect on major JPY currency pairings, as the rising turmoil in the market is leading to more investment in the Japanese currency.

Crude Oil - Oil Prices Rise as Inventories Fall
Oil prices extended a four-day rally to near $72.30 a barrel on Thursday after a U.S. report showed a surprise decline in Crude Oil inventories, and OPEC said it would maintain official output curbs. Crude Oil rose 31 cents to settle at $72.24 a barrel, topping off a 6% climb since last Thursday.

Expectations that consumers may once again want more Oil when the recession bottoms have partly fueled the rally, with traders watching the stock market for economic telltales. There is a reasonable possibility that Oil prices will continue to be bullish going into next week, providing that the economic situation of the leading economies continues to rapidly improve.

Technical News

EUR/USD
The pair has experienced a bullish run for the past week-and-half now, and currently stands at the 1.4615 level. The RSI of the 4-hour chart shows the pair floating in the overbought territory, signaling that a bearish correction is imminent. This view is also supported by the MACD of the weekly chart. Entering the trend at an early stage may turn out to bring high returns, as end-of-week trading kicks in.

GBP/USD
The GBP/USD pair has risen significantly higher in the past week, and has surpassed the 1.6700 mark. The pair sits above the upper border of the Bollinger Bands of the daily chart, indicating that the next move may be in a downward direction. The 4-hour chart's Slow Stochastic shows a fresh bearish cross, meaning that the next move will be bearish. Going short with tight stops seems to be the right choice today.

USD/JPY
The cross has been dropping for the past week now, as it now stands at the 91.30 level. The Slow Stochastic of the hourly charts shows a bullish cross has recently formed, indicating that an upward correction is imminent. The RSI of the hourly charts shows the pair sitting in the oversold territory, indicating that the next move may be in an upward direction. Going long with tight stops may turn out to be the right choice today.

USD/CHF
The chart's oscillators seem to be showing misleading signals for the USD/CHF cross. On the one hand, the MACD of the 4-hour chart and the RSI of the daily chart support an upward trend for today. On the other hand, the MACD and RSI of the weekly chart support a possible downward trend for today. Entering the pair when the signals are clearer seems to be the correct choice for today.

The Wild Card

Crude Oil
Crude Oil has been very bullish this week, and has given big returns for many forex traders. The weekly chart's oscillators seem to be showing mixed signals. However, the MACD of the 4-hour chart offers a more accurate picture that the trend for today may be a downward correction. Going short with tight stops seems to be the preferred choice for today.

Published on  Fri, Sep 11 2009, 09:10 GMT

Forex Trading − GBP Anticipates Volatility before Rate Decision

Thu, Sep 10 2009, 12:21 GMT
by Greg Holden

ForexYard

With mixed results versus its primary currency counterparts, the British Pound appears to be consolidating many of its trends towards a volatile movement; positioned to take place today, it appears. The Bank of England's rate decision and policy statement at 11:00 GMT may be today's leading news event and forex traders won't want to miss out on the volatility which is sure to follow this release.

Economic News

USD - USD Down 3.7% against the EUR this Year
The Dollar Index traded near the weakest level in almost a year against the currencies of six major U.S. trading partners as record low borrowing costs encouraged investors to sell the greenback and buy higher-yielding assets. The index was at 77.002, after dropping yesterday as much as 0.7% to 76.803, the lowest level since Sept. 26, 2008.

The USD continues to suffer downward pressure as investors continue to anticipate that the global economy is emerging from recession, which makes them more willing to sell Dollars and invest in riskier currencies and commodities. At the same time, while the Fed's program helped pull the U.S out of the recession, it also pumped a lot of Dollars into the economy and with the continuous rise in the unemployment rate it is unlikely the Fed will raise interest rates any time soon.

Abundance of supply of USD, and a very low return on Dollar denominated assets due to the low interest rate, makes the greenback highly unappealing to investors; possibly replacing the JPY as the carry trade currency of choice.

The release of the Trade Balance and the Unemployment Claims figures is due to be released today at 12:30 GMT. With the unemployment numbers expected to show some improvement, a worse than expected result might help reverse some of the Dollar's recent losses.

EUR - EUR Maintains Momentum, Stays above $1.4500
The EUR has maintained its momentum Wednesday after breaking through its tight summer ranges on Tuesday, particularly the $1.4450 price level. The EUR continued to trade above $1.45 pushing briefly above $1.46; its highest level in more than nine months.

Late Wednesday, the EUR was at $1.4553 from $1.4499 late Tuesday. The EUR was at 134.02 Yen from 133.73 Yen. The U.K. Pound was at $1.6532 from $1.6499.

The EUR is benefiting from a belief that the Euro-Zone economy is improving at a higher pace than the U.S economy which lends support to the common currency. Furthermore, the EUR appears to be a popular choice as an alternative, higher yielding currency than the USD.

The U.K's MPC rate statement and Official Bank Rate is expected at 11:00 GMT. While the rate is not expected to change, the statement is highly important and is likely to have great affect on the GBP. Last month's surprise decision to increase the quantitative easing program set the GBP plummeting against its major currency counterparts. A similar announcement today could do the same.

JPY - Yen at Strongest Level in 7 Months against the USD
Japan's currency gained 0.8% against the Dollar, trading at 91.61; the highest level since Feb.17. The Yen declined 0.2% against the EUR, to 133.98 per EUR. The Yen's support arises from the fact that it is slowly being replaced by the Dollar as the preferred currency for carry trades.

However, as the Bank of Japan (BOJ) is hesitant about allowing the currency to appreciate without further substantial improvement in the economy, the Yen may have trouble's remaining at such a high level since there isn't much economic foundation behind this rise.

With no major news release from Japan today, the JPY's movements will likely be determined by news from the U.S and Europe.

Crude Oil - OPEC to Maintain Production Quotas
Crude Oil's price continues its advance for a fourth day with the contract for October delivery trading up 31 cents, or 0.4%, at $71.67 a barrel on the New York Mercantile Exchange (NYMEX) early morning trading today.

The advance was supported by OPEC's statement to keep oil production quotas unchanged on an expectation that the world economic recovery will keep prices near $71 a barrel. It seems that both consumers and producers are quite comfortable with the $65 to $75 price range. The drop in Dollar value also helped boost oil prices since Crude Oil, which is Dollar denominated, is now cheaper for holders of other currencies. Oil also serves as a protective investment against inflation caused by a weaker Dollar.

Today's release of Crude Oil Inventories is expected to show another drop of 1.5 million barrels, the third drop in four weeks. If results are better than expected we might see another boost for oil prices.

Technical News

EUR/USD
Short-term indicators on this pair do no seem to offer much direction. The price does, however, float in the over-bought territory on the 4-hour RSI, suggesting downward pressure. And there appears to be an impending bearish cross on the daily Slow Stochastic and 4-hour MACD, which suggests a downward correction may be imminent. Waiting for the downward swing and then going short may be a wise choice today.

GBP/USD
The price appears to be floating in the over-bought territory on the 4-hour RSI, and just entering the over-bought territory on the daily RSI, which suggests strong downward pressure. With a bearish cross forming on the 4-hour MACD, a downward move may indeed be imminent. Going short could be a good strategy today.

USD/JPY
There appears to be a fresh bullish cross on the 4-hour MACD, suggesting an upward correction may be due. The price also sits inside the over-sold territory on the 4-hour and daily RSI, which supports this notion. Going long with tight stops might not be a bad idea.

USD/CHF
There seems to be bullish crosses on the hourly and 4-hour MACD, and an impending bullish cross on the daily Slow Stochastic, all of which suggests the next movement may be in an upward direction. Going long appears to be today's preferable strategy for this pair.

The Wild Card

GBP/CHF
After a sustained downward movement, this pair is now testing the significant resistance level of 1.7200. With the price floating in the over-sold territory on the 4-hour RSI, and a fresh bullish cross on the 4-hour Slow Stochastic, this pair is facing an impending upward correction which may turn out to be a reversal. Forex traders can benefit from this movement by going long on this pair and at a great entry price!

Published on  Thu, Sep 10 2009, 12:21 GMT

Forex Trading − Commodity prices Surprise with Bullishness as USD Weakens

Wed, Sep 9 2009, 09:15 GMT
by Greg Holden

ForexYard

With recent market volatility, the price level for a few currencies and commodities have begun to see prices not seen since last year. For instance, the USD fell to its lowest in almost a year during yesterday trading session after gains in global stocks. Gold has also shocked the market lately with continues uptrend, rising above $1000 for the first time since March 2008. With rallies this large, the forex market becomes more predictable, and traders can reap the benefits!

Economic News

USD - The Dollar Tumbles to 2009 Low!
The U.S. dollar fell to a new yearly low against the EUR and dropped against other major rivals Tuesday as investors continued to show a rising appetite for risk. Better economic data from Germany and Britain also supported investors' risk appetite at the margin. The U.S. dollar, seen as a safe-haven in uncertain times, usually tends to fall when hopes of a global recovery rise.

The greenback's weakness came against a backdrop marked by a push higher in equities and improving economic data abroad, as well as renewed questions about the role of the Dollar as the world's premier reserve currency. The greenback was universally sold on reignited concerns about the capacity of the U.S. dollar to retain its global reserve status. The USD even lost ground to another safe-haven, the Japanese yen, suggesting the selling was more than just a shift to risk. The Dollar was down at 92.30 yen, having shed nearly 0.8% on Tuesday.

Renewed concerns about the status of the U.S dollar as the world's reserve currency sparked by a United Nations agency report on Monday and news out of China expressing concern about printing money to fund Treasury purchases have also weighed on the Dollar. The USD was pushed lower by several news headlines with the UN report and the China news, analysts said. All these things are dollar negative. This is a reminder that the U.S. dollar is poised for some weakness in the months ahead.

EUR - EUR Rises Above $1.45 as Risk Appetite Returns
The European currency rose toward a 9 month high against the U.S dollar before a government report forecast to show French industrial production increased, boosting demand for higher-yielding assets. The EUR extended gains versus the Dollar on Tuesday amid a rise in global stocks and commodities. The currency advanced against the Yen for a 5th day as investors forecast consumer confidence in Japan climbed to 40.2 in August from 39.7 in July, boosting demand for higher-yielding assets.

The EUR is also benefiting from uncertainty about the U.S. economy. The Euro-Zone is likely to see a hike in Interest Rates before the U.S. does. The Euro-Zone currency also advanced as economists said the Paris-based statistics office Insee may report factory output in France gained 0.4% in July after rising 0.3% in June. The data is due Thursday.

The GBP saw a big jump, meanwhile, rising 0.9% against the U.S dollar to trade at $1.6530, as U.K. manufacturing output for July came in much stronger than forecast. The British pound dropped against the Yen for a second day amid speculation the Bank of England (BOE) this week will expand its asset-purchase program, adding to signs the economic recovery will be sluggish. The Bank of England is scheduled to announce its monetary policy decision on Thursday with the central bank widely expected to keep Interest Rates unchanged.

JPY - Yen Extends its Bullish Run against the Dollar
The Japanese yen rose against the EUR and U.S dollar before a government report that economists say will show U.K. industrial production grew in July at a slower pace, boosting demand for Japan's currency as a refuge. The Yen also strengthened after the Ministry of Finance said Japan's current-account surplus fell to 1.27 trillion yen ($13.7 billion) in July from a year earlier.

The Yen has already risen above levels expected by major manufacturers for the current fiscal year, and is showing signs of strengthening again. If the U.S dollar falls below 92 yen the impact may be big and such concerns are weighing on stocks, analysts said.

Crude Oil - Oil Jumps above $71 on Eve of OPEC Meet
Crude prices rallied more than 4% Tuesday, as sharp weakness in the U.S. dollar boosted commodities, and as energy traders looked ahead to the upcoming meeting of the OPEC oil cartel. The gains came as the U.S dollar slumped to its lowest level in almost a year against a basket of currencies and gold rallied above $1,000 an ounce, its highest since March 2008.

The Organization of Petroleum Exporting Countries, which accounts for about one-third of the world's oil production, is scheduled to meet Wednesday in Vienna. Analysts expect the cartel to keep its production quota unchanged while pressuring member countries to comply with their current production limits.

Oil prices, which fell 6.5% last week, have been trading in a range between $65 and $75 a barrel since the start of August, with prices swinging on economic data as investors seek clues about the speed of a recovery from the recession. Investors will be on watch for inventory data, delayed by a day this week due to Monday's holiday. The U.S. Energy Information Administration report will be issued Thursday at 15:00 GMT.

Technical News

EUR/USD
The price of this pair appears to be floating in the over-bought territory on the 4-hour chart's RSI indicating a downward correction may be imminent. The downward direction on the daily chart's Slow Stochastic also supports this notion. Going short might be a wise choice.

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

USD/JPY
The cross has experienced much bearishness in the last two days, and currently stands at the 92.25 level. There is much evidence in the chart's oscillators that supports a possible bullish correction today. This is supported by the 4-hour chart's RSI. Going long might be a wise choice.

USD/CHF
The pair has recorded much bearish behavior in the last week. However, the technical data indicates that this trend may reverse anytime soon. For example, the 4-hour chart's RSI signals that a bullish reversal is imminent. Going long with tight stops may turn out to pay off today.

The Wild Card

Crude Oil
Crude Oil prices rose significantly yesterday and peaked at $71.40 per barrel. However, the 4-hour chart's RSI is floating in an overbought territory 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.

Published on  Wed, Sep 9 2009, 09:15 GMT

Forex Trading − Forex Market to Move on News Coming from Europe and Canada

Tue, Sep 8 2009, 11:57 GMT
by Greg Holden

ForexYard

In forex trading, the USD is set to have relatively quiet news today. This lack of major news indicates that the other major currencies, such as the GBP, EUR and CAD, may be the market movers today and traders should pay close attention to each of their respective economic news releases.

Economic News

USD - Dollar Falls as Labor Day Holiday Takes Its Toll
The U.S. Dollar fell against a number of its major crosses due to U.S. markets being closed. Looking at Monday's trading as a whole, the Labor Day holiday in the U.S. took its toll on the American currency. In early trading yesterday, the USD fell to a near 2 week low vs. the British Pound. This was after Kraft Foods stated that it made an offer to buy British chocolate maker Cadbury. Despite the low trading volume on Monday, it seems that risk appetite was high, and high-yielding currencies became more attractive. The Dollar Index dropping by 0.2% to 78.00 yesterday is evidence of this.

The USD/JPY cross fell by 25 pips yesterday to the 92.85 level, as many traders ditched the U.S. currency for the Yen due to the improving global economy and the thin trading of Labor Day. The Australian Dollar hit a 1 year high vs. the U.S. Dollar on Monday. The AUD was helped due to rising Gold and Crude Oil prices as of late, which Australia's currency is highly dependent. In addition, Australia's currency is in much greater shape than that of America. The Canadian Dollar made some inroads into the greenback. By the end of yesterday's trading, the EUR/USD pair closed unchanged at 1.4332.

Looking ahead to today's trading, there is the U.S. Consumer Credit figures at 19:00 GMT. The other releases that are expected to affect the main USD crosses are the British Manufacturing Production at 08:30 GMT, the German Industrial Production result at 10:00 GMT and Canadian Building Permits figures from at 12:30 GMT. The volume today is likely to be high following yesterday's bank holidays in both the U.S. and Canada. We might see the EUR/USD and GBP/USD close over 100 pips away from the opening. If you want to make big profits today, buy into the USD's crosses now.

EUR - EUR Trading Dominated By Optimistic Data
On Monday, EUR trading was driven by German Factory Orders rising for the 5th consecutive month in July by a higher than forecast 3.5%. This was much needed confidence for Europe's largest economy. Major benchmark indexes rose in all the western European markets. The German DAX climbed by 1.5%, and the British FTSE 100 added 1.7%. Despite the positive figures from Germany, Europe's biggest economy is still a long way away from returning to desirable levels. It can be said that the recent G20 Meetings helped return confidence to the European currency.

The EUR snatched a 3rd consecutive day of gains against the British currency, as the pair rose by 30 pips to close at the 0.8777 level. This was largely due to German industrial data helping the EUR, which was much needed boost for the European currency. The EUR/USD cross finished trading unchanged at the 1.4232 level. This was owed to the U.S. Labor Day bank holiday. The GBP/USD pair rose in earlier trading yesterday, but ended up 60 pips lower at the 1.6343 level. The GBP declined yesterday, due to an equity market rally, which led to traders dropping the cable.

Today, there is much economic news that is expected to determine the value of the both the EUR and GBP. There is the British Manufacturing Production at 08:30 GMT, the German Industrial Production at 10:00 GMT, and the British Nationwide Consumer Confidence at 23:01 GMT. There is likely to be a continuation of much of Monday's trends. However, the volatility may increase a lot, as regular trading returns to the forefront. It is advisable to buy into the main EUR, GBP, and CHF crosses, as today's trading kicks in.

JPY - JPY Expected to Slide
The Yen fell to its lowest level in a week vs. the EUR. However, the EUR/JPY eventually finished yesterday's trading 30 pips lower at the 133.18 level. In the coming days, it seems that the Japanese currency may slide as global equities are expected to rise. Analysts expect this to reduce demand for the JPY as a safe-haven. This behavior was already seen on Monday, as the JPY dropped vs. the AUD and the NZD.

The recent election victory of the Democrat Party has led to much speculation amongst investors that the JPY may slide in the coming weeks and months. Many people believe that this inexperienced party will increase taxes too high, and will be unable to handle Japan's finances well. Therefore, these analysts conclude that there may be a downward spiral of the Japanese currency in the near future.

Crude Oil - Crude Oil Eyes OPEC Meeting
Crude Oil finished trading virtually unchanged at $68.12. This behavior was largely owed to the U.S. markets being closed on Monday. Therefore, there was lower than usual volatility in both the forex market and the commodity market. Furthermore, in mid-trading many investors ditched Crude Oil for equities, which was initiated by the announcement of the attempted takeover bid by Kraft Foods of Cadbury.

OPEC is set to meet on Wednesday 9th September, and is expected to maintain the production target of 24.845 million barrels a day in Vienna, according to Kuwaiti Oil Minister Sheikh Ahmed Al-Sabah. As trading volume returns back to normal today, there is likely to be very high fluctuations in the price of Crude Oil. Traders will be keeping one eye on tomorrow's OPEC meeting, and another eye on USD strength.

Technical News

EUR/USD
The pair has been range trading between the 1.4200 and the 1.4360 levels in the past several days. The daily chart seems to be showing misleading data. However, the 4-hour chart offers a more accurate picture. The RSI of the 4-hour chart shows the pair sitting in the overbought territory, signaling that a downward correction in the coming hours is imminent. Entering the pair at an early stage seems to be a wise choice today.

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

USD/JPY
There is a fresh bullish cross forming on the 4- hour chart's Slow Stochastic indicating a bullish correction might take place in the nearest future. The upward direction on the hourly chart's Slow Stochastic also supports this notion. When the upward breach occurs, going long with tight stops appears to be preferable strategy.

USD/CHF
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.

The Wild Card

Silver
Silver prices rose significantly in the last month and peaked at $16.41 per ounce. However, there is a bearish cross on the daily 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.

Published on  Tue, Sep 8 2009, 11:57 GMT

Forex Trading − Dollar Expects Low Volatility Today

Mon, Sep 7 2009, 10:44 GMT
by Greg Holden

ForexYard

Today is a quiet news day for the U.S. and Canada, as there are no economic data releases on the calendar today. However, Britain and Euro-zone appear to be releasing the bulk of today's news, which means we may see a day of trading with low liquidity and therefore increased volatility. Day-traders can take advantage of these intense trading days by swinging within the larger-than-normal price fluctuations.

Economic News

USD - USD Downtrend to Continue; Labor Day Causes Thin Trading
The US Dollar experienced some intense trading sessions last week. Following Friday's Non-Farm Payroll data the USD quickly rose from the better-than-expected results, but ended the day significantly lower against its primary rivals as many investors dumped the greenback in exchange for riskier assets. In fact, the USD dropped against the EUR to above the 1.4300 price level, and the 1.6400 level against the Pound Sterling.

This weekend's G20 Summit also added to the Dollar's bearishness at the start of this week's trading, many analysts have said, as hawkish statements from world leaders has spurred a rally in market optimism and risk appetite. Supporting this notion is the downtrend of the Japanese Yen against all of its rivals, signaling a sell-off in safe-haven currencies - a category which the USD still falls in as well.

With US and Canadian banks celebrating Labor Day, the forex market will be experiencing thin trading today. Without these economic giants pumping liquidity into the market, most current trends will remain as they are for the next day or two, and traders can benefit by jumping into these trends before they finally come to an end.


EUR - EUR Appreciates on Growing Investor Confidence
The EUR gained support last Friday following the US's Non-Farm Payroll data which showed the US jobs sector contracting less than anticipated and enticing traders into riskier assets. The EUR, towards the close of trading last Friday, rose above the 1.4300 price level against the USD, and climbed against the GBP back towards 0.8730, while also clawing its way back to a week high against the JPY, upwards of the 133.40 price level.

Investor confidence in the Euro-Zone has been on the rise for the past few months and September appears to be set for being one of the better months for the 16-nation currency. Some reports have shown this confidence level to have reached a 13-month high, marking this month as the potential turning point in the global recession. The recent strength of the EUR supports this notion as it has begun to appreciate against all of its primary currency rivals.

As for today, the Euro-Zone and Britain will be the leading economies today considering that the US and Canada are on holiday to celebrate Labor Day. With low levels of liquidity, current trends will likely continue, but news about Germany's manufacturing sector could put a damper on recent EUR strength if it comes out much worse than expected.


JPY - JPY Takes a Dive from Positive US Employment Reports
While gaining in value steadily over the past two weeks against all of its primary currency counterparts, the JPY faced a severe downturn at the end of last week's trading. Dropping as low as 93.15 against the USD, 133.45 against the EUR, and even as low as 153.00 versus the GBP, the JPY has taken a hit as a result of the growing market optimism following Friday's employment reports from the US and Canada.

With these two massive economies missing from the market today due to the Labor Day holidays in both, the EUR and JPY may in fact be today's leading currencies. However, with the expected low level of liquidity, and lack of significant economic events, the current downtrend for the JPY will likely continue throughout the trading day. Traders still have an opportunity to enter this trend at a relatively early stage and make healthy profits.


Crude Oil - Crude Oil Price Consolidating Towards Volatile Movement
Despite the drop in the value of the US Dollar last Friday, the price of Crude Oil has actually depreciated to $68 a barrel. This commodity currently trades inside a consolidation trend with a target level of $67.50 as the breaking point. With USD traders pricing in a downward move for the greenback, it is only natural to expect a corresponding upward movement from Crude Oil in the days ahead.

As for today, however, the forex market will likely remain inside of its current trends due to the low levels of liquidity being anticipated as a result of the bank holidays in the US and Canada. As a result, the current consolidation trend being experienced in the price of Crude Oil will likely continue, with a small downtrend in the works for today's early trading hours.

Technical News

EUR/USD
The daily chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, there is a fresh bearish cross forming on the 4-hour chart's Slow Stochastic indicating a bearish correction might take place in the nearest future. Going short might be a wise choice.


GBP/USD
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. The downward direction on the daily chart's Slow Stochastic also supports this notion. When the downward breach occurs, going short with tight stops appears to be preferable strategy.


USD/JPY
The typical range trading on the hourly chart continues. The daily chart Slow Stochastic is floating in neutral territory. However, the 4-hour chart's RSI is already floating in the overbought territory, suggesting a downward correction may be imminent. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.


USD/CHF
The pair has recorded much bearish behavior in the past two days. However, the technical data indicates that this trend may reverse anytime soon. For example, the 4-hour chart's Stochastic Slow signals that a bullish reversal is imminent. An upward trend today is also supported by the hourly chart's RSI. Going long with tight stops may turn out to pay off today.

The Wild Card

Gold
Gold prices rose significantly in the last week and peaked at $992.65 for an ounce. However, the daily chart's RSI is floating in an overbought territory 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.

Published on  Mon, Sep 7 2009, 10:44 GMT

Forex Trading − U.S. Non−Farm Employment Change to Determine Today's Trends

Fri, Sep 4 2009, 07:31 GMT
by Greg Holden

ForexYard

The U.S. Non-Farm Employment Change Data is set to be published at 12:30 GMT, and is expected to be the most important news event when it comes to market volatility. Traders are also advised to follow the G20 Meeting that will commence today, and the U.S. Unemployment Claims data at 12.30 GMT. In the meantime, open your positions in the majors now, as today's trading gets under way.

Economic News

USD - Dollar Trades Lower Before U.S. Jobs Report
The U.S. Dollar was slightly stronger vs. the EUR on Thursday, as investors squared positions ahead of the U.S. Non-Farm Payrolls report later today. The USD also traded near a week low against the British Pound before a U.S. government report forecast to showed employers eliminated fewer jobs last month, sapping demand for the greenback as a refuge from the global recession. The USD traded at $1.6323 per pound from $1.6275 yesterday, after falling to $1.6413, the lowest level since Aug. 25.

The greenback briefly extended gains against the Japanese Yen on Thursday, after the Institute for Supply Management said its services index rose to 48.4 in August from 46.4 in July. The U.S. currency finished trading at 92.58 Yen from 92.28 Yen, and is poised for a 4th weekly loss, the longest stretch since December.

Today's Non-Farm payrolls data is expected to have a strong impact on the U.S currency. Any result could be a surprise, and the Dollar could go either way as a result. In any case, traders are unsure how the market will react to today's data. A weak report could feed risk aversion, boost Treasuries and actually aid the U.S Dollar. Then again, a better than expected result might be seen as a sign of relative U.S. economic strength, and lift the Dollar. Or it could also encourage risk-taking and aid commodities and higher-yielding currencies at the Dollar's expense.

EUR - EUR Drops versus the Dollar on ECB President Trichet's Comments
The EUR gave back early gains against most major counterparts after the European Central Bank kept Interest Rates at a record low of 1%, and stated that the period of contraction has come to an end in the Euro-Zone. The EUR/USD cross slipped to $1.4250, after having slipped from a peak of $1.4346 on Thursday. This was after the European Central Bank President, Jean Claude Trichet made less hawkish statements than many expected.

Meanwhile, the European currency also headed for its first weekly decline versus the Pound since Aug. 7 after ECB's Trichet warned yesterday of a rather uneven recovery, even as the ECB raised its growth forecasts. The British Pound advanced as economic data showed the U.K. services sector growing more rapidly than had been anticipated last month. The news sent the GBP/USD cross as high as $1.643 during Thursday's trading session.

Trichet's remarks that the economic recovery is not strong enough to start withdrawing monetary stimulus measures hurt the single currency too. Still, market players reported good support under $1.4200, which should hold into the today's job reports data from the U.S.

JPY - The Yen Pulls Back From 7 Week High
The Japanese Yen weakened against 14 of its 16 major counterparts on Thursday on speculation Asian stocks will extend a global equity rally, spurring demand for higher-yielding assets. The JPY retreated from a 7 week high against the U.S Dollar as higher share prices prompted investors to trim holdings of the low-risk Japanese currency.

The Yen's retreat also occurred due to a rally in Chinese shares prompting investors to trim holdings of the low-risk JPY. Japan's currency may decline for a second day versus the EUR as futures on the Nikkei 225 Stock Average expiring in September closed at 10,235 in New York yesterday, higher than 10,230 in Osaka.

Crude Oil - Oil Under Pressure on OPEC Output Expectations
Crude Oil ended Thursday's volatile trading without any gains as investors reacted to a weekly jobless report. Prices settled at $68.12 a barrel, as disappointing news from the labor market outweighed economic optimism from data showing that the U.S. service sector and retail sales improved. Traders are also eyeing news that big Oil producers are increasing output. OPEC is expected to leave output targets unchanged when it next meets on September 9th in Vienna.

U.S. Crude prices have been range bound between $65 to $75 a barrel since the start of August, fluctuating on the latest clues about the speed of an impending economic recovery. However, there's not a whole lot of momentum in the market in either direction. The trend for Crude Oil, which has been down, is still in force this week. Oil prices are not likely to break out of the confines of the current range in the short term, analysts say.

Technical News

EUR/USD
The pair has been range trading between the 1.4190 and the 1.4380 levels in the past several days. The daily chart seems to be showing misleading data. However, the 4-hour chart offers a more accurate picture. The Stochastic slow of the 4-hour chart shows the pair sitting in the oversold territory, signaling that an upward correction in the coming hours is imminent. Entering the pair at an early stage seems to be a wise choice today.

GBP/USD
The GBP/USD cross has experienced a bullish trend for the past 2 days. However, it seems that this trend may be coming to an end today. The RSI of the 4-hour chart shows the pair floating in the overbought territory, indicating that a downward correction will happen anytime soon. This view is also supported by the daily chart's MACD. Going short with tight stops may turn out to pay off today.

USD/JPY
The cross rose yesterday, despite declining significantly lower this trading week. It seems that the chart's oscillators are showing misleading data. On one hand, the daily chart's Stochastic Slow and the 4-hour chart's MACD supports a bullish trend for today. On the other hand, the Stochastic Slow of the daily chart supports a bearish move for today. Entering the pair when the signals are clearer seems to be the right choice for now.

USD/CHF
The USD/CHF cross made a slight bearish correction yesterday, despite falling significantly on Wednesday. The MACD of the hourly chart indicates that the pair will go higher today. However, the MACD of the weekly chart and Stochastic Slow of the 4-hour chart seems to be more accurate, supporting a downward trend for today. Going short with tight stops could bring big profits today.

The Wild Card

Gold
This popular commodity has recorded a 3 day winning streak, as it stands at the $990 level. Analysts expect Gold to go higher for yet another day. They may be right, as gold approaches a $1000. The Stochastic Slow of the hourly charts supports the upward trend for today. Going long with tight stops may bring high returns for forex traders today.

Published on  Fri, Sep 4 2009, 07:31 GMT

Forex Trading − U.S. Unemployment Claims to Set the Level for the USD Today

Thu, Sep 3 2009, 13:28 GMT
by Greg Holden

ForexYard

The U.S. Unemployment Claims is the primary publication today that is set to 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 Services PMI for Britain at 08:30 GMT, the EUR Minimum Bid Rate at 11:45 from the Euro-Zone, and the ISM Non-Manufacturing PMI from the U.S. at 14:00 GMT. What are you waiting for traders! Open your positions in the USD, EUR, GBP, and AUD now.

Economic News

USD - USD Setback Caused by Market Uncertainty
The US Dollar dropped slightly yesterday as equity markets began to slow the pace of their recovery. Erasing part of Tuesday's gains, the EUR/USD retraced itself back towards 1.4300 at the opening of US markets as stocks slowly recovered, and the EUR followed suit against the greenback. Similar behavior was experienced against the British Pound as well, with a price reaching towards 1.6300 as of yesterday's late trading hours.

Economic recovery does not appear to be improving at the speed many investors were hoping for, and currencies appear to be tracing the movement of stocks as a result. While recovery floats between positive and negative economic data, risk appetite may be suffering as a result; hence the surge in the value of the JPY. One thing is certain, the economic news expected for today and tomorrow will no doubt generate an intense level of trading volume and volatility as investors try to price in the new growth forecasts for Europe and unemployment levels for the United States.

For today, traders need to be watching 3 currencies: the AUD, EUR, and USD. Australia released its trade balance figures this morning, which showed a deeper contraction than was expected, putting downward pressure on the Aussie. The European Central Bank will release its decision on short-term interest rates, which always creates volatility. Also, the US is going to give a glimpse into tomorrow's NFP report with today's Unemployment Claims figures. These will be the more exciting news days for trading that an investor can get. Make sure you're in the market today!

EUR - Euro-Zone Interest Rate Decision Today at 11:45 GMT
While rallying against the USD yesterday, the EUR faced a moderate setback versus the British Pound and Yen. Climbing towards 1.4300 against the USD, the EUR dropped to as low as 0.8750 versus the Pound Sterling and 131.30 compared to the Yen.

The price behavior of the EUR these past few days has been to mimic the movement of stocks, since most economic data has failed to provide a clear signal about market direction. Since global stocks are inching their way towards positive growth, the EUR also inched its way up against its primary rival. However, the lack of optimism meant that the safe-haven JPY continued to gain momentum against all of its rivals.

For today, EUR traders have an important economic event to be on the lookout for. The European Central Bank (ECB) is going to announce its decision regarding its Minimum Bid Rate (short-term interest rates for the region), and could also potentially give hints about its economic growth forecasts for the next 6 months. Any indication of a rate increase in the next half-year could spell heavy optimism for the EUR and traders would be foolish to miss out on this event.

JPY - Yen Continues to Gain from Risk Aversion
Sitting on top of a mountain of bullish growth, the Japanese Yen has been on the receiving end of much optimism lately, or should we say, a lack of optimism. The uncertainty in the market lately has pushed many investors away from even the modestly risky currencies and into the safety of the Yen, which helps explain its recent strength.

Whether or not this momentum can carry itself into the near future, however, may be decided by the news events today and tomorrow from Europe and the United States. The ECB will announce its rate decisions today, as well as any updates about economic outlook. This decision always carries a strong impact and may see the EUR/JPY head into an upward correction directly after its release if the ECB brings good news. American employment data today and tomorrow may also help reverse the recent trend of the USD/JPY. Traders beware, today is going to be a bumpy ride!

Crude Oil - Commodities Spike, but Crude Oil Remains Flat
Unlike yesterday's Gold prices, Crude Oil failed to see any bullish growth following the opening of the US markets at 12:30 GMT. Once the New York markets opened, the USD faced a modest downturn against the EUR while stocks gained slightly. As a result, the price of precious metals, such as Gold and Silver, spiked drastically while the price for a barrel of Crude Oil remained relatively flat at $68.

With so much news affecting the stock market and forex, many traders tend to overlook the benefits of commodity trading. Crude Oil tends to be an investment with a lot of potential as it moves in large wave trends with fewer volatile spikes, making it one of the safer investments for a portfolio looking for a hedge against inflation, or away from the volatility of many currencies. Today's and tomorrow's news releases about European interest rates and American employment data are expected to create a heavy level of volume and volatility, meaning most commodities will experience something similar. Don't miss out on these opportunities if you're an active forex trader.

Technical News

EUR/USD
The cross has been very volatile lately, and recorded much bullishness yesterday. Much of today's oscillators seem to be misleading. However, both the 4-hour and weekly charts offer a more accurate picture. The 4-hour chart's Stochastic Slow shows that the pair is floating in the overbought territory, and a downward correction is imminent. The MACD also supports the view that the pair is overbought. Going short with tight stops may turn out to pay off today.

GBP/USD
The popularly traded pair experienced much bullishness yesterday, despite recording a very bearish trading day on Tuesday. The Stochastic Slow of the weekly chart shows the pair in the overbought territory, and that a bearish correction could happen anytime soon. The RSI of the hourly chart indicates that there is likelihood for much bearishness in the pair today. Going short on the pair seems like a popular strategy for traders today.

USD/JPY
As a whole, the USD/JPY cross went through much bearishness in the past 2 weeks. This trend looks set to reverse according to the daily and 4-hour hour charts. The Stochastic Slow of the daily chart shows the pair sitting in the oversold territory, signaling that the next move will be in an upward direction. This view is also supported by the MACD of the 4-hour chart. Going long with tight stops could pay off today.

USD/CHF
The USD/CHF cross has been range trading between the 1.0540 and the 1.0705 levels. On the one hand, the MACD of the weekly chart signals that the pair is set for a downward trend for today. On the other hand, both the Stochastic Slow of the 4-hour chart and the MACD of the hourly chart supports an upward trend for today. Entering the pair when the signals are clearer seems to be a wise choice for today.

The Wild Card

Crude Oil
Despite much bearishness for the black gold this week, the popular commodity went through some flat trading yesterday. Crude currently stands at the $68.10 level. Both the RSI and the Stochastic Slow of the daily chart indicates that there will be much bullish behavior for Crude today. Going long with tight stops may bring big profits for forex traders today.

Published on  Thu, Sep 3 2009, 13:28 GMT

Forex Trading − The USD Benefits as Wall Street Slides

Wed, Sep 2 2009, 10:43 GMT
by Greg Holden

ForexYard

The greenback firmed on Tuesday as share prices fell, prompting investors to shed perceived riskier currencies. Despite better than expected numbers from the Institute for Supply Management, shares on Wall Street showed only muted enthusiasm to the data and quickly lost ground, lifting the U.S dollar, which has tended to be used as a safe haven against losses in equities. Ahead of the U.S. jobs data later today, traders said players were anxious about any negative surprises. As the market has become less sensitive to positive surprises from the U.S economic data, the effect of any weak figures would be bigger than the effect of any positive numbers.

Economic News

USD - Dollar Rises on Optimistic Manufacturing Data

The U.S dollar rose against most of its major currency pairs yesterday as sharp losses in global stock markets offset stronger-than-expected U.S. manufacturing data and boosted the greenback's safe-haven appeal. As a result, the USD finished yesterday trading session 150 pips higher against the EUR at the1.4216 level. The greenback also saw bullishness against the GBP and closed at 1.6155.

The main factors effecting Dollar volatility yesterday were the releases of optimistic U.S manufacturing data and Pending Home Sales figures. The U.S. manufacturing sector expanded in August for the first time in 19 months, while home sales contract hit a two-year high in July, helping lead the economy out of the worst recession and thus boosted the demand for the Dollar. Factories and builders, which have accounted for half of all the jobs lost since the recession began in December 2007, may keep growing in coming months as sales rise.

Traders will be keeping a close eye on U.S. Non-Farm Employment Change data due at 12:15 GMT, which is expected to decrease to -250K from -371k. Special attention should also be given to the Crude Oil inventory which is expected to decrease from previous reading. Investors pay close attention to this figure as it has a strong correlation with the value of the U.S. Dollar.

EUR - EUR Erases Gains After High Jobless Figures

The EUR was little changed, erasing earlier gains, after figures showing Europe's manufacturing industry continued to contract in August stoked investor concern that the global recession has further to run. The EUR fell against the USD, pushing the oft-traded currency pair to 1.4220. Despite positive data on Tuesday that showed Euro-Zone purchasing managers' index (PMI) rise and German unemployment unexpectedly fell in August, the EUR failed to make headway on the data as falls in equities weighed.

The Sterling erased its early gains against the U.S dollar and the EUR after an unexpected dip in UK manufacturing activity in August, stoking concerns about the pace of recovery in the British economy. The GBP was down 0.8% at $1.6152 and was little changed against the EUR at 88.04 pence.

Looking ahead to today, the most important economic indicator scheduled to be released from the Euro-Zone is the Revised GDP at 9:00 GMT. Analysts are forecasting this figure to be unchanged from its previous reading. Traders will be paying close attention to today's announcement as a stronger than expected result may boost the EUR in the short-term. Traders are also advised to follow the Construction PMI figures coming out of Britain at 8:30 GMT, and the ADP Non-Farm Employment Change figures coming out of the U.S. at 12:15 GMT as these results may set the EUR's main currency crosses going into today's trading.

JPY - The Yen Spikes to a 7 Week High

The JPY experienced a bullish trading session yesterday, as it appreciated against most of its major currency pairs. The Japanese yen traded near a 7 week high against the Dollar amid speculation asset prices are overblown, boosting demand for the relative safety of the Japanese currency.

The Yen was close to its strongest level versus the U.S dollar in more than a month after Asian shares slumped and CIT Group Inc. deferred interest payments on subordinated bonds. The Yen tends to gain in times of financial turmoil as Japan's trade surplus reduces reliance on foreign capital, while the Dollar benefits from its status as the world's main reserve currency.

Traders expect the Yen to continue benefiting for the rest of the week amid growing concern that any more pullback in equities could be a further drag on a global economic recovery.

Crude Oil - Crude Declines 3% As Stocks Drop and USD Strengthens

Crude Oil experienced another day of depreciation as prices fell nearly 3% to $68.04 in this morning's early trading session. Oil prices traded down for the second straight day yesterday as economic concerns sent investors into safer havens, outweighing positive U.S. manufacturing and home sales data. The declines came after U.S. stocks dropped as renewed worries about the health of the U.S. financial sector shook investor confidence.

As for today, the Crude Oil inventories figures will be released. Expectations show a drop to -0.8M from last week's of 0.2MM. Traders can, and should, expect wide market volatility around the 14:00 GMT release of these inventories figures because of Crude Oil's recent importance to today's market.

Technical News

EUR/USD

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

GBP/USD

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

USD/JPY

The bullish trend is loosing its steam and the pair seems to consolidate around the 92.80 level. The 4 hour chart's RSI is already floating in an overbought territory suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

USD/CHF

The pair has experienced much volatility recently, as it currently trades around the 1.0668 level. The weekly chart's Stochastic Slow signals that the pair will drop in the short-term. However, this is contradicted by the daily chart's RSI and MACD. Entering this pair when the signals are clearer may turn out to be a wise choice in today's trading.

The Wild Card

Oil

Crude Oil prices are once again dropping, and it is currently traded around $68.60 a barrel. And now, the 4 hour chart's Slow Stochastic is giving bullish signals, indicating that Oil prices might go up. This might give forex traders a great opportunity to enter a very popular trend.

Published on  Wed, Sep 2 2009, 10:43 GMT

Forex Trading − USD Trades Lower on Market Optimism

Tue, Sep 1 2009, 07:49 GMT
by Greg Holden

ForexYard

There were more signs that the U.S. economy was improving, as a string of positive data was released yesterday from the U.S. the most significant was the Chicago PMI, which printed higher-than- expected figures in the month of August. This indicator is a primary gauge of manufacturing sector, acting as the main driver of the U.S. economy. On top of this good news, a rise in demand for U.S. goods from abroad is also likely to help boost the U.S. economy in the coming months.

Economic News

USD - Chicago PMI Data Pushes the USD Lower
Evidence is increasing that the worst of the global recession is passed. Business activity in the U.S., the world's biggest economy, rose more than economists forecast in August, the Institute for Supply Management-Chicago Inc. said Monday. The Chicago PMI report is further indication that the U.S. economy is starting to improve; the data eased risk aversion among investors analysts said, with positive data negative for the Dollar and Yen.

The USD fell against a basket of currencies due to the decline in U.S. equities, as fears that the recent rally has overheated. This decline was led by the 7% fall in China's stock market index. As a result, the Dollar was hurt as traders fled to currencies such as the GBP and EUR. The greenback fell by about 50 pips to the 1.4336 level vs. the European currency. Against the British Pound, the Dollar slid by over 50 pips to 1.6283. The USD did make some gains, as the USD/JPY cross rose by 30 pips to the 92.95 level. Note, this is the first time in 3 days that the USD closed higher against the JPY.

Looking ahead to today, there is some pivotal news that is set to be released from the U.S. economy. The ISM Manufacturing PMI and Pending Homes Sales figures are set to be published simultaneously at 14:00 GMT. These results are even more important than usual due to the recent turmoil in equity markets and commodity markets, therefore all eyes are on the Dollar as the U.S. economic situation is set to improve further. It is advised that traders open their USD positions now, as this trading day is set to become very volatile in the coming hours. Furthermore, today's results are set to drive the forex market for the rest of this week.

EUR - EUR Rises as Inflation Eyes Positive Territory
The EUR's experience with negative inflation may be coming to an end very soon, as yesterday's figures showed a smaller-than-forecast yearly fall in prices in the Euro-Zone in August. The CPI Flash Estimate showed that prices were only -0.2% lower than August 2008. However, in July the figure was -0.7%. The deflation in the Euro-Zone has been owed to a drop in consumer goods prices, especially the price of Oil.
Monday's figures indicate that inflation may be positive again by the end of this month.

The European currency rose against most of its major currency crosses in yesterday's trading. Starting with the GBP, it rose only 5 pips to the 0.8802 level. This comes as the pair has started to see more bearishness recently. Yesterday's behavior within the pair may be largely owed to the lack of volume in some GBP pair, due to the bank holiday in Britain. With regards to the EUR/USD pair, the European currency rose 50 pips to the 1.4336 level. The GBP/JPY cross jumped by 100 pips to the 151.50 level.

Today, the news coming from the Euro-Zone is also set to be a driving force in helping determine the EUR's main crosses, as mid-week trading approaches. There is the German Retail Sales at 06:00 GMT and the Unemployment Rate at 09:00 GMT. Data form Britain is also set to help determine the strength of both the EUR and GBP today, such as the Mortgage Approvals and Manufacturing PMI figures. So if you want to make some high returns today, open large positions in EUR and GBP as soon as possible.

JPY - Yen Falls on All Fronts
The Yen slipped on Monday, as a slump in global equities led by the U.S. and China reignited fears about Japan's fragile economy. It seems the recent lift from the landslide election victory of the Democratic Party in Japan's election (DPJ) failed to help the Japanese currency yesterday. The Japanese currency fell against the USD by 30 pips. It also fell vs. the GBP and EUR.

It seems in the longer term, however, the important election of the DPJ may help the JPY if it sticks with its election promise to increase consumer spending, which in turn will push Japan back to positive inflation. Additionally, the Yen could also gain if the DPJ sticks to its other pre-election promises, such as reversing the current purchasing of U.S. Dollar based debt.

OIL - Oil Plummets Amid Global Equity Slump
Crude Oil prices plummeted by nearly $3 to $69.86, which is the biggest drop in 2 weeks. This comes about as a 7% dive in china's main stock index led to a bearish global equity market yesterday. This was initially sparked by concerns about a slowdown in lending that is likely to negatively impact the global economic recovery in China, which is the second largest energy consumer.

Crude's dive was also owed to fears that Japan's economy is destabilizing, as housing and other important data showed that Japan's economy is still very volatile. Therefore, this is important as Japan is the world's second largest Crude Oil consumer. Traders are advised to follow the next OPEC meeting on September 9th, which will be crucial in determining future Crude prices.

Technical News

EUR/USD
The price appears to be floating in the over-bought territory on the daily chart's RSI, indicating a downward correction may occur later today. However, the hourly chart's Slow Stochastic indicates a recent bullish cross, signaling a possible continuation of the upward movement. In the short-term traders however may expect a downward correction, but longer-term traders may want to maintain their long positions today.

GBP/USD
Most oscillators display this pair floating in neutral territory at the moment, indicating a lack of direction. The hourly chart's Slow Stochastic indicates that the price may hit a bullish cross in the near future, but the weekly chart's Momentum oscillator is still showing steep downward pressure. Waiting for a clearer signal might be the right strategy today.

USD/JPY
It appears that little by little that pair has lost strength over the past few days, as it is now testing the 92.80 level. A bearish cross on the hourly chart's Slow Stochastic implies that the down trend could even deepen today. Going short with tight stops could be a good strategy today.

USD/CHF
The sharp bearish move that took place during the past couple of days seems to have more steam in it. The RSI on the hourly charts is crossed above the 40 line, suggesting that the pair may fall further. The bearish move on the daily's Slow Stochastic also supports this notion. Next target could be 1.0490.

The Wild Card

AUD/USD
It appears a bearish cross has recently formed on the 4-hour chart's Slow Stochastic, indicating that this pair's recent downward correction may still have some steam. Now would be a great time for forex traders to join this recent run and capture the remaining profits before the rising trend continues.

Published on  Tue, Sep 1 2009, 07:49 GMT

Forex Trading − Forex Traders Anticipate Heavy News Week

Mon, Aug 31 2009, 07:37 GMT
by Greg Holden

ForexYard

The dollar was slightly more volatile over the past week than usual, and the explanations for this have been getting trickier by the day. As for this week, forex traders are advised to take positions on trades, as a string of data releases coming out of U.S., Europe and Japan are likely to affect the greenback's main currency crosses.