ForexYard's Commentaries - page 4
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
16/07/'07 - US Empire State Business Conditions.
Economic News
USD
The greenback continues to float at record highs against the EUR and GBP, as Friday was characterized in moderate ranged price movement at the release of several news event. The US Retail Sales was release much weaker then expected at -0.9% after a wide expectation of flat 0.0%, and the Core figure also disappointed and entered negative territory of -0.4%, with a consensus of 0.2%. The Consumer Sentiment on the other hand came in much stronger than expected at 92.4, with expectations around 86.0 and a previous release of 85.3. The mixed news releases did not cause any sharp changes in the USD behavior and it continued its movement with a light negative sentiment that culminated today as it is now traded again at all time highs of 1.3790. Today's most important release is the Empire State Business Conditions Index which measures the general business conditions of manufacturers in New York State. The index is derived from a survey that asks respondents to rate the level of general business activity as 'decrease', 'increase', or 'no change'. The forecast for the index is 18.0, which is a sharp decrease from last month's 25.8, and might cause a further weakening for the Greenback.
The rest of the week will contain several more news events that might determine the USD's fate for the near future such as the US PPI, Core CPI, and the FOMC Minutes. It looks as if the negative trend will continue and we might see new records this week.
EUR
With almost no major news releases at the end of last week, the EUR showed once again how strong it really is and climbed to a new all time high. It looks as if it is not susceptible to any major economical concept as it is just rallying up without actually paying too much interest to fundamental releases. Beyond the obvious problems in the US housing market and the sub-prime rate, it looks as if the peaks in EUR/USD are now deriving from pure trading momentum, and massive USD selling.
The Euro-Zone calendar is clean of major news events today, and will be relatively light in the following few days, apart for the UK economy which will provide us with the UK CPI, and Minutes Meeting. It looks as if the trend will continue, taking the EUR/USD to all time highs again.
JPY
The Asian markets were closed overnight for Marine Day, and low liquidity was seen as expected on JPY pegged currency pairs. The only major news release expected from the Japanese market today is the Tertiary Industry Activity Index which Measures the change in spending for services. The release is relatively important for the nation's currency and currency trading because about half of the nation's workers are employed in the service industry. Strong spending in the services sector not only signals higher employment rates, but can also be a sign of strong consumer spending in the future. The index is expected to come in lower than last month's 1.7% at 0.2%, which might cause the JPY to weaken a bit and initiate carry trades again, after a small correction which is probably derived from profit taking.
Technical News
EUR/USD
With the pair trading at all time highs, and the daily charts stronger than ever, it looks as if the next move up is imminent. The hourlies are extremely overbought and a preferable strategy might be to wait for an unwinding before entering the long position.
GBP/USD
The 2.0350 proves once again to be a strong resistance as the pair could not break through for the forth time. But it looks as if it is only a matter of time before the strong trend will overcome the resistance level, and than the next target price for the move would be around 2.0420
USD/JPY
The pair is in the midst of a very strong downtrend that shows no signals of a slowdown. The 4 Hour chart is very bearish with a supportive slow stochastic. The daily chart shows that the next target price is 121.00.
USD/CHF
The pair shows consolidation around the key level of 1.2000 which proves to be very important. A small breach beyond that level occurred on Friday, but the pair could not continue. It looks as if the negative trend will continue if an additional breach will occur, so a preferable strategy might be to wait for the oversold hourlies levels to unwind before taking a short position.
The Wild Card
NZD/USD
A very distinct upwards channel is forming in the 4 Hour chart, providing Forex traders with opportunity to join in a very strong uptrend with a target price of 0.7950, at the first move, and 0.8020 at the second wave. The hourlies support the bullish notion and provide the immediate timing for the long position.
17/07/'07 - Forex Market keeps the U.S. currency under selling pressure.
Economic News
USD
The USD Trading was battered across the board as investors pre-empted poor data out of the U.S. this week, showing declines in inflation. Some analysts say weakness in the housing sector combined with a slowdown in inflation may even lead the Federal Reserve to reduce interest rates early next year. Markets are currently pricing in about a one-in-six chance that the Fed will cut interest rates by a 0.25 point in 2007. We at Foreyard LTD. examine the economic pressures which the USD are handling with and we found that its more likely that a new record would be determine before the USD will significantly strengthen. Yesterday, the Empire State Factory data saw a robust leap to 26.5 which was way above consensus forecasts of 18.0. To provide a little clarity the 6-month average lies at 15.04 so it is well above the trend. Indeed, even the individual components looked pretty strong too. The weakness of the US dollar and persistent rise in oil prices will keep the Federal Reserve's hawkish policy as they bank their hopes for a second half recovery on the movements of the US currency. We have already seen the benefits that a weak dollar can instill on the economy, when last week, the US reported that exports rose to a record high in the month of May and it could not have done so without a weaker dollar which makes the commodities more economically attractive for buyers around the globe . Since the beginning of last year, the trade weighted dollar has fallen 7.7 percent and is now testing lows last seen in the end of 2004. The jump in the Empire state manufacturing survey confirms that the weak dollar continues to benefit the manufacturing sector. After hitting a 1 year high last month, analysts were looking for a sharp retrenchment, but activity continues to accelerate with the manufacturing index edging up to its highest level since June 2006. Today, the action begins with producer prices, followed by the Treasury International Capital flow report, Industrial Production and the NAHB housing market index. Net foreign securities purchases and industrial production are expected to remain strong, but the expectations for producer prices are low despite the jump in import prices. With the rally in the EUR/USD becoming exhausted, any upside surprise could drive a much needed recovery in the US dollar. The FX markets are cyclical, so the path to a stronger dollar will be through a weaker one. The upcoming days may deliver new tidings for the forex market when tomorrow the Federal Reserve Chairman Ben Bernanke will deliver his semi-annual testimony on the economy and monetary policy which may be used as a catalyst of the USD recovery. The Bottom line The Path to a Stronger Dollar is through a Weaker One.
EUR
Even though the EUR closed the day near its all-time highs, the currency trading pair's inability to extend its rise offers that it could be setting up for the upcoming correction. Consumer price growth slowed last month from 0.2 percent to 0.1 percent in the Euro zone. This is the tenth straight month that CPI has remained below the central bank's 2% target, which in the current circumstances might be significant and even point at a recovery from their winter sleep. The Euro-Zone inflation rate and the core rate stayed at 1.9% for the fifth month running. Given that the European Central Bank's definition of price stability is close to but below 2%, this string of 1.9% outcomes must be quite satisfying for ECB officials. In case we do see stronger producer prices from the US today and hawkish comments from the Fed later this week, it could help to triggered a nice correction in the EUR/USD. Also today, Germany will be releasing the ZEW survey we are looking for a firmer number however, given recent interest rate hikes, analyst sentiment could easily deteriorate. The GBP is in play this week and Today's report on consumer price growth will be the first piece of key economic data to come out from the UK. The combination of a drop in producer prices and a strong currency suggests that consumer price growth will slow as well. However even though the recent strength of the GBP is expected to push inflation lower, UK economic data has a habit of catching everyone by surprise. Traders will be using the CPI number to forecast whether Wednesday's release of the BoE minutes from the meeting held earlier this month will be pound positive or negative. The minutes have become extremely market moving as we recall, the turn that we saw in the middle of June was triggered by surprisingly hawkish MPC minutes. A near unanimous decision to raise rates would accelerate further gains, while more than 2 dissenting votes would probably be construed as dovish, which would mark a top in the currency pair.
JPY
With no major US data released yesterday and the Japanese markets closed for a holiday, carry trades have succumbed to profit taking. Most of the JPY crosses are either flat or slightly lower (except the NZD/JPY). The fact that they did not continue to rise after a fairly large earthquake hit North West and Central Japan is a testament to the currency market's continual appetite for risk. Japan's tertiary index, which measures spending in the services sector, dropped 0.1 percent in May from April, the second decline in five months, the Ministry of Economy, Trade and Industry said Tuesday, citing preliminary data.
The index stood at 110.2 in May, slightly below February's 110.7, which was the highest level since January 1988. That followed a revised 1.6 percent rise in April from the previous month. Year-on-year, the index increased 1.3 percent in May after a revised 1.2 percent gain in April.
The services sector employs more than half of Japan's workforce, and spending on services such as retailing, dining and travel is closely tied to changes in income and consumer confidence. Based upon last week's monetary policy meeting, the Bank of Japan is in no rush to raise interest rates as usual when the BOJ is finally raise rate the influence is even less then mildly on the currencies. As long as this stance is confirmed by the release of their minutes from the meeting held between June 14 and 15, the market will not be worried that an interest rate hike by the Japanese will be what puts an end to the carry trade. Instead, another major headline about the problems in the sub-prime sector exacerbating could be the catalyst for a sharp increase in risk aversion.
Technical News
EUR/USD
On the 4 Hour chart we notice that the bullish trend is running a head. The volatility decreases and the EUR/USD is in a consolidation after it has broken the 1.3780 resistance level. The price should continue to move upwards in a range of 1.3735 to 1.3820. As it seems, the bullish pressure will continue to gather momentum as well today.
GBP/USD
On the 4 Hour chart, a bullish rising wedge is forming which may imply a continuation of an additional bullish move. It's recommended to time the entrance to the market with short term charts. 2.0350 seem like a strong entry point. At the moment GPB/USD is traded around the 2.0310 /2.0410 range. The volatility is low and we should expect the bullish pressure to continue. 2.0400 is now a strong resistance.
USD/JPY
The USD/JPY broke the 121.80 support and the downtrend is supported by 1 Hour exponential moving averages. The volatility is low and the Bollinger bands are tightened. We should expect to see the bearish configuration continue. The 4 Hour Elliott pattern implies that the USD/JPY will continue to gather momentum. The target price might be 121.00
USD/CHF
The USD CHF is in a bearish configuration, as the volatility decreases. The pair moves without a trend and swings around exponential moving averages (EMA 50 and 100). Bollinger bands are tightened and the 4 Hour Elliott pattern implies a continuation of the bearish pressure.
The Wild Card
EUR/JPY
On the 4 Hour chart, the 5 Elliott pattern can be observed and the A, B, C structure is t forming. In this case the C wave is expected to make the pair consolidate at 167.50. This provides Forex traders with a great opportunity to enter the market at a long position.
18/07/'07 - Will the Fed rescue the USD?
Economic News
USD
The greenback experienced mixed reactions yesterday as it gained further ground versus the JPY but extended its losses against the EUR and the sterling. The USD slipped to a new 26-year low against the sterling reaching the 2.0475 level on the back of the release of better than expected UK inflation figures which was another strong indication that we may see another rate hike by the BoE in the near future. The interest rate differential between the United States and England seems destined to continue to widen and this is putting sustained pressure on the greenback dropping it to unprecedented levels. There was a string of significant data releases from the US yesterday beginning with the PPI figures. The headline figure released in negative territory at -0.2 % while the core figure came in slightly better than expected at 0.3 %. The positive Core PPI release was followed by further positive news as Industrial Production and Capacity Utilization released better than expected at 0.5 % and 81.7 %, respectively. This string of positive data did not stop the dollar from continuing its slide versus the EUR and the sterling because it seems that the Fed is content on keeping a weaker USD as US exporters will be more competitive in the global market. However the greenback managed a rally against the JPY and it was further backed up by the TIC report which surprised on the upside releasing at 126.1B. The TIC report showed that foreign investors bought a record amount of US securities last month thus indicating that carry trades are unlikely to unwind in the near future and this caused the JPY to lose ground against the greenback. The fact that the headline PPI figure released negatively while the core figure only improved slightly indicated to the market that today's CPI figures may also be weak because the costs incurred by the producer are usually passed on to the consumer. However the Core CPI, which bears greater significance than the headline figure as it excludes the volatile food and energy items, may surprise the market and beat the expected figure of 0.2 %.
Looking ahead to today, besides the CPI figures, the market will be eagerly awaiting the release of Housing Starts and Building Permits figures which will shed more light on the status of the troubled US housing sector. It will be important for traders to note whether there was a correlation between yesterday's soft homebuilder's sentiment and today's housing figures. However most of today's volatility is expected to occur during Fed Chairman Brernanke's semi annual monetary policy testimony as traders will shift all their attention to identify a hint of a future rate hike, so they will listen closely to his views on inflation. If Bernanke is interpreted as being hawkish then we may see the dollar find some reprieve, however there is a strong possibility that the CPI and housing figures will be soft so the USD will crawl deeper into the bears' cave.
EUR
Yesterday the EUR continued on its bullish rampage trading at record levels against the greenback. The EUR also rose against the JPY reaching the 168.57 level on the back of comments made by an ECB council member that inflation is still a concern and that European inflation risks are rising. This indicated to the market that a rate hike in the near future is a realistic possibility. The most significant data to be released out of the Eurozone yesterday was the German ZEW Economic Sentiment which measures institutional investor sentiment. The figure came in at 10.4 which was much lower than the expected figure of 19.5. This negative data had no impact whatsoever on the EUR indicating to the market the depth of the bullish EUR. The only data to be released today relevant to currency trading is the Italian Trade Balance and the Eurozone Trade Balance which are expected to come in at -0.88 B and 4.0 B, respectively. This data is expected to make no significant impression on the EUR.
So with no real market moving data expected to be released from the Eurozone today the EUR volatility will be dollar centric. The market sentiment is to sell the dollar and it has been strongly poised against the greenback since investors increased their concerns over the troubled housing market. Therefore the European currency should be able to sustain its bullish momentum today and in the near future but much depends on today's US data releases and Bernanke's speech. Investor sentiment will also be key in determining the future EUR direction and where they feel the EUR has hit a peak against the dollar as many investors are beginning to feel that the EUR is nearing the tip of the iceberg.
JPY
Yesterday the JPY lost ground against the greenback on the back of the TIC report which showed record high foreign investment into US securities. With the JPY still reeling from the rise in carry trades which has been unrelenting in recent times, the positive TIC report only added to its woes dropping the Japanese currency to the 122.86 level. However the JPY managed to stage a fight back earlier today during the Asian trading session following the release of the Japanese monetary policy meeting minutes. According to the minutes of the board's June 14-15 meeting the nine members of the Bank of Japan agreed that they would adjust Japan's benchmark rate gradually and in accordance with the inflation and the economic situation of the country. Although the Japanese inflation is likely to remain flat the BoJ strongly believes that in the long term the CPI trend is upward and this will provide a basis for the BoJ to raise rates in the near future. Without any further significant news to be released for the rest of the weak we should see the JPY continue its rally against the struggling greenback.
Technical News
EUR/USD
Daily chart signal on an upcoming reversal as Slow Stochastic is crossing at 86 , however there is a mild divergence which indicates that the reversal will be slight. On the 4 H chart it can be observed that there is still more room left for the EUR to strengthen. We are in the middle of a bullish trend which might strengthen since the momentum 100.323 has a positive slope .
Going long might be the preferred strategy .
GBP/USD
The bullish trend seems to be running out of steam when Slow Stochastic crossed at 90 which indicates an upcoming reversal . The 4 H chart suggests a significant reversal when the upcoming bearish trend might relocate this pair value at 2.0440- 2. 0472 Fibonacci retracement levels.
USD/JPY
Daily chart implyies on range trading when Slow Stochastic and RSI are sailing in neutral territory . The 4 H chart indicates that the bearish trend will continue which might take this pair to 121.56 Fibonacci retracement level 23.6%. Then we expect a reversal to take place.
USD/CHF
On the 4 H chart the bearish trend still has steam in it and may test the 1.1960 before the reversal will take place ,as a result of the mildly bearish channel which is observed.
The Wild Card
Gold
Daily chart indicates a continuing bullish trend and Slow Stochastic is crossing with a positive slope . We expect the gold to test the 670.84 resistance level ,and then the reversal will start to gather energy and take place. Forex traders may find gold attractive today since there will be a clear opportunity for profit taking.
19/07/'07 - USD - Will a new all time record low be set today?
Economic News
USD
Yesterday The dollar fell to new lows against the Euro and broke its previous record of $1.3813, at the same time the British pound has arrived at a new trading level against the American dollar, over 2.05, this is a all time high more than a quarter of a century. The pair moved up from 2.0490 to 2.0549 in a little more than an hour. The strength in the GBP/USD is driven almost exclusively by dollar weakness and not pound strength. If anything, the Bank of England signaled that even if we do have another rate hike this year, it will not be until the latter part of the fourth quarter, at the earliest
With the US dollar hitting a record low against the Euro and the British pound many Americans wonder whether more weakness is expected for the US dollar. The main fear is that the situation will eventually lead to weaker spending and lower growth across the nation, but on the other hand, many people have also forgotten the benefits that the weaker dollar can bring to the economy. With the outlook so dire, a weak currency could actually be what ends up saving the economy.
Also yesterday, Federal Reserve Chairman Ben Bernanke Delivered the Fed's semiannual report to Congress. Bernanke told to the Congress that the housing market could dampen an expected pickup in U.S. economic growth, but at the same time, he restated that the central bank's main worry is inflation. However, Bernanke also listed a number of factors that could spark inflation, including a tight job market and the possibility energy prices could move higher. As a result of weaker-than-expected home building, the Fed cut its forecast for growth this year by a quarter-percentage point to a range of 2.25% to 2.5%, and downgraded its 2008 projection as well. Bernanke warned that a recent moderation in core inflation may simply reflect temporary influences. He also said there was a risk lofty energy and food prices could cause expectations of future inflation to rise, possibly unleashing an upward spiral of wages and prices. Bernanke didn't give any hint that the Fed was considering relaxing its inflation-fighting bias, warning instead that recent "favorable" core inflation readings, which strip out food and energy prices, are subject to "considerable noise" and "could also be the result of transitory influences."
The Fed cut its economic growth projections by a quarter percentage point to a range of 2.25% to 2.5% this year and 2.5% to 2.75% in 2008, mainly due to a steeper-than-expected downturn in housing construction. The Commerce Department said housing starts set an annual rate of 1.467 million units in June compared with a revised 1.434 million unit pace in May. Economists had forecast June housing starts to drop to a 1.45 million unit pace from the 1.474 million unit rate originally reported for May last month. Building permits fell 7.5% in June to a pace of 1.406 million units. That's just above the 1.402 million unit rate seen in June 1997 and below the 1.48 million unit rate that economists had expected.
EUR
The currency pair climbed to a new record high of 1.3835 following the comments from the US central bank. At the moment the European Central Bank is less stressed about the need to raise rates, the growing chance of a rate cut before a rate hike in the US is driving the dollar lower.
One would expect that the ECB begin backing off, given the recent appreciation in their EUR, but instead of showing any signs of concern; yesterday, Trichet warned that any attempts to influence the ECB would be in violation of the EU treaty. This situation suggests that they are not willing to talk down the Euro and will only do so under their own terms. The Euro was choppy against the majors in trading on Wednesday afternoon in New York. The currency moved as the Euro zone reported its trade surplus for May. Yesterday afternoon, the European currency bounced between a high of 1.3829 and a low of 1.3761. On the whole, the Euro continues to move at a multi-year high against the American dollar. Today, The Swiss will report at 07:15GMT on the trade balance for June, while at 09:30GMT the UK is set to announce its Retail Sales. Other news from the area will include German producer prices.
Switzerland will report on its Trade Balance for June on Thursday. The prior period showed a level of 1.04 billion, and is expected to advance slightly in tomorrow's data. Other news from the area will include the results of a ZEW Survey for Expectations for July.
Great Britain will announce Retail Sales data on a monthly and annual basis for June on Thursday. The previous month saw a rate of 0.4%, and is expected to decline in tomorrow's data. Meanwhile, the prior year's results were 3.9%, and are also anticipated to drop slightly. Other news from the area will include Public Finances and Sector Net Borrowing for June, the M4 Money Supply and Sterling Lending and BSA Mortgage Approvals for the same period.
JPY
Yesterday, Japan's All-Industries Activity Index, which covers a broad range of economic activity including the tertiary index, dropped 0.3 % in May from the previous month, the first decline in two months, the ministry said the downturn was due to the weakness in the tertiary index as well as industrial output . The electric machinery makers' confidence rose to a four-month high and non manufacturers' sentiment improved, a sign that corporate-sector strength continues to underpin Japan's solid economic recovery. The Tankan Index, a monthly survey of leading Japanese companies, produced a diffusion index (DI) of plus 23 for manufacturing firms in July. That was down from a five-month high of plus 31 in June this figure usually notes on slowing the economic growth in Japan which eventually supposed cause to a JPY reduction. Carry traders aren't quite ready to give up yet. The only currencies that the JPY managed to rally against were the Euro, Swiss franc, US and Canadian dollars and for the most part, the damage was small. Looking ahead, we expect a flat trading after night session when no significant data due to be out in near days however the JPY will be effected from the other majors.
Technical News
EUR/USD
The daily chart is bearish as the Slow Stochastic crossed at 86 and also RSI 80 implying on the continuation of the current trend and will test the 1.3775 Fibonacci 76.4% level. On the 4 H chart a bullish flag is establishing however an upcoming reversal is not yet expected and the bears will stay in the picture for a while.
GBP/USD
The pair range traded yesterday after quite a steady uptrend which seems to be calmer. The daily charts are heading up as the hourlies are unwinding from overbought levels ,and support relatively flat trading. The next target price might be around 2.0540.
USD/JPY
On the daily chart a mild bearish channel is observed which might indicates the near future behavior of this pair as also RSI 39 and Slow Stochastic at 38 as them both having a negative slope implying that the next target is 121.00 and will be tested in the upcoming weeks. On the 4 H chart indicators seem to be sailing in neutral territory as usually indicates an upcoming breakout of the neutral channel barriers which is located at 121.57 - 122.35. Hedging seems to be the right strategy until the breakout direction will be determine.
USD/CHF
The pair shows consolidation around the key level of 1.2010 which proves to be very significant level. A preferable strategy might be to wait for the oversold hourlies levels as traders should pay close attention to the 1.1990 level to unwind before taking a long position.
The Wild Card
Silver
Silver is expected to be more attractive then ever since the daily chart is bullish. However, there is an upcoming reversal which forex traders might use for profit taking in the coming days. On short term there is more room to go as silver expected to test the 13.41 Fibonacci 76.4% retracement level before the reversal will take place.
23/07/'07 - The Sub-Prime Issue is Pulling the Greenback Down Further.
Economic News
USD
Last week, we saw the Greenbacks' deterioration continue, as it ignored every piece of positive information that came from the US market, and it looks as if the sub-prime crisis is stronger than everything else in regards to USD strength. Bernanke's speech last week about the economy in general and the inflation in specific, also didn't shed positive light on the near future of the US economy, implying that there will be no rate hike any time soon. The following week will not be very full of important information, but with the sub-prime situation, the release of the Existing Home sales and New Home Sales will be much more important than usual, as this of information has much more importance now. The US Durable Goods is expected on Thursday, and the US GDP will be released on Friday. If the Existing Home sales will show a positive figure than we might see a certain improvement in traders' attitudes towards the greenback, as we know that the housing market is currently the key element in the US economy, and that the USD strength is not reflected correctly, as the Dow Johns is floating at record levels, and the US Stock market is quite strong. If we will see an average and moderate figure, than the GDP and Durable goods will have much less significance in regards to the USD downtrend, and will probably not be able to stop the negative sentiment.
EUR
The European market is consistently showing its strength, with the EUR and GBP trading at record levels against the USD and is not showing sign of a stop for now. The big question now remains when and if the 1.40 barrier will be breached for the EUR/USD? The answer is actually dependant on the US market much more than it is on the European one, as the situation derives from the US market. We must not ignore the ever improving UK market, and the high UK interest rate that contributes to a very strong GBP that is now trading at 26 years highs. This week will be relatively light on news, as the most important releases will be the German IFO, and the Euro-Zone PMI. Today, no releases are expected both from Europe and from the US, which will probably produce a relatively quiet trading day on the sector.
JPY
The JPY advanced to its highest level in more than six weeks against the USD as a slide in Asian stocks and the problematic US housing market encouraged traders to scale back investments in emerging markets funded by borrowing in Japan. The currency also rebounded from a record low against the Euro after Asian shares followed a decline in U.S. equities on concern of mortgage defaults which may cause investors to continue to flee riskier assets. With the sub-prime loan problem in the U.S. getting worst, the JPY's weakening trend has reached its end.
Technical News
EUR/USD
This currency trading pair is heading to 1.3850 which is a major resistance level and if breached will initiate a further move which will set fresh all time highs. The daily charts are very bullish, as the hourlies are overbought. Looking for dips to go long might be preferable.
GBP/USD
With the pair trading at record highs, and the positive momentum leaning mostly on the positive side, it appears that the pair is steadily heading to 2.0800 levels maybe even this week. The daily charts are bullish and the hourlies are neutral which means that traders must look for a better entry point, as a correction might be imminent before the next move up becomes valid.
USD/JPY
After a choppy week, the pair approaches 120.75 which is a very strong support level that the pair has not seen since May. If the support will be breached we will see the beginning of a massive move down. The bias is definitely down as the dailies are bearish, and the hourlies are a bit oversold. Waiting for the hourlies to unwind before going short might be a smart move.
USD/CHF
After a nose dive move from 1.2460, the pair seems to be struggling to break the 1.1960 level. These levels have not been seen since November 2006. The daily chart provides a moderate bearish signal, and the hourlies provide mixed signals. There is no definite bias at this point.
The Wild Card
NZD/USD
After breaking the unbelievable level of 0.8000, and showing nothing but consistent bullish sentiment, there is a great opportunity for Forex traders to jump in one of the healthiest up-trends around. It looks as if there is plenty more room to run, and even with a tight stop trading style, it is possible to take nice profits from a long position.
24/07/'07 - Are Forex Traders Frustrated with the Dollar?
Economic News
USD
Although the USD remained pressured during Monday's trading day, the failure of the EUR to push through 1.3850 prompted a bout of profit taking following the currency's recent gains. However, the beleaguered dollar found no reprieve in the overnight session, dropping to fresh 18-year lows versus the Aussie at 0.8847 and falling to a new 26-year low against the sterling at 2.0640. Traders will closely assess this week's US economic reports to determine the trend direction for the greenback over the coming months - with overwhelming sentiment biased toward further declines as a result of expectations for global interest rate differentials. The economic calendar for the USD today is light, consisting of only the July Richmond Fed manufacturing survey - seen improving to 5, up from 4 in the previous month. Traders will also continue to analyze earnings releases and monitor US equity performance. There are also Fed officials scheduled to speak, including Mishkin and Poole.
Equities, bond yields, and the US dollar all recovered yesterday amidst the lack of any US economic data. However, none of these assets managed to regain all of Friday's losses, which suggests that the selling may not be over. This week's major event risks do not come until Wednesday at which time we will learn more about how much the situation in the housing market has worsened (major affect on the US economy). If existing and new home sales continue to fall, then Fed Chairman Bernanke might claim that things will worsen before they will get better. However if they rebound the market will continue to downplay the risks of a collapse in the housing market. We don't expect the US government to stand in the way of further dollar weakness, however it seems that they are still feeling comfortable with the low greenback especially when it's supporting the wide export sector which will try to leverage the recovery to other territories. In actuality, the manufacturing sector is recovering strongly thanks to booming exports. This is one of the primary reasons why the housing market has not collapsed yet and why the stock market remains not far from its record highs; all due to the widespread benefits of a weak dollar. The question that will be continuously asked is when the USD recovery will take place? Well, optimism is increasing which has translated into stronger capital spending and productivity shall offer that the recovery is in sight .
We think that EUR/USD is more likely to reach 1.3900 in the upcoming weeks as opposed to a significant reversal.
EUR
This morning, the EUR trades just beneath its all-time high against the dollar, hovering near 1.3820. Today, economic data from the Eurozone includes the May current account balance, July service and manufacturing PMI, and May industrial orders. The May current account deficit is forecasted to weaken to 1.2 billion euros in May compared to the 4.0 billion euros a month earlier. The July services PMI is estimated to slip to 58 from 58.3, while manufacturing PMI is seen falling to 55.5 versus 55.6. Lastly, industrial orders for May are forecasted to reverse the previous month's 0.4% decline, rising by 1.1%, but slip to 7.8% versus 12.2% from a year prior. Yesterday, the Euro climbed to a new record high in the early Asian trading session, but failed to hold onto its gains. This type of price action should be worrisome for EUR bulls, however we would need to see a close below 1.3780 to turn bearish which is unlikely.
This is the last chance that we will hear from ECB officials before they go on their summer holidays and the lack of concern over the past few weeks implies that they fully intend to raise interest rates to 4.25% over the next few months.
Yesterday, the ECB member Papademos pointed out that some EZ countries have raised their growth rates while Stark talked about how the current level of the EUR reflects the strength of the Euro zone economy. Next month's monetary policy meeting will be a teleconference with no scheduled press conference. Although Trichet has announced that establishing an impromptu press conference may not be out of the question, we expect him to wait until the September meeting to bring back the words 'strong vigilance.' At that time, he would be preparing the markets for an October rate hike and its will be interesting how the market will react when usually this expression boost up the EUR . Given Trichet's warning to EU government officials about interfering in ECB monetary policy, unless we see the EUR/USD at 1.45 in August, we do not expect to hear much from Trichet next month. Instead, what could lead to some further EUR selling is this week's busy data calendar. Today we are expecting EZ service and manufacturing PMI along with industrial orders and current account. All of these reports might affect the rates, which mean that they have decent chance of surprising to the downside. Yesterday, he Sterling briefly popped to a new 26 year high above 2.0600, supported by the currency's yield advantage, before fading back to 2.0570. However, this morning, the GBP is on a rampage gaining 70 pips since the evening session and is trading at over 2.0635
JPY
The JPY was steady throughout Monday as the dust began settling from China's rate hike on Friday. Friday's sell-off in the Yen crosses was driven by the fear that the problems in US sub-prime sector have become global. So far we have learned that they have not and because of that, some of the Yen crosses have recovered. According to an article in the Nikkei paper, the value of Japanese investment into foreign trusts has increased 56%. The market's appetite for carry trades has also been fueled by their expectation of nonexistent inflation. Consumer prices are due for release this Thursday night when another negative month is forecasted. Meanwhile the LDP elections are scheduled for Sunday and when latest opinion indicate that Prime Minister Abe and the LDP are losing support is effecting directly on both the Japanese Yen and Japanese equities. The USDJPY pair did trade at a six week low of 120.37 during the night session when as overall the USDJPY traded with a range of a low 120.80 and a high of 121.65 before closing the day at 120.47
Technical News
EUR/USD
On the 4 H chart we notice that the bullish trend is running a head. The volatility has decreased and the EUR/USD is in a consolidation pattern after it broke the 1.3830 resistance level. The price action should continue to be upwards in a range between 1.3810 to 1.3860. As it seems, the bullish pressure will continue to gather momentum also today. The long term target is 1.4000.
GBP/USD
On the 4 H chart, a rising wedge (bullish) is forming which may imply a continuation of the bullish carry trade; its recommended to time the entrance to the market with short term charts, 2.0620 seems like a strong entry point. At the moment GPB/USD is being traded around the 2.0590 to 2.0680 range. Volatility is low; we should expect to see also today bullish pressure on the GBP. The uptrend should continue on 2.0700 resistance.
USD/JPY
The USD JPY broke the 120.50 support. USD/JPY is in a downtrend supported by 1H exponential moving averages. The volatility is low. Bollinger bands have tightened. We should expect to see also today a bearish configuration. 1H, 4H Elliott pattern implies that the pair will continue to gather momentum. The target is expected at 120.00
USD/CHF
The USD CHF is in a bearish configuration. The volatility has decreased. The pair has moved without a trend and has swung around the exponential moving average (EMA 50 and 100). Bollinger bands have tightened as well. 1H, 4H Elliott pattern implies a continuation of the bearish pressure. The target is expected at 1.2000
The Wild Card
EUR/JPY
On the 4 H chart we notice that the bearish trend is running ahead. The volatility decreases and the pair is in a consolidation after it has broken the 166.70 support level. The price should continue to move downwards in a range of 167.10 to 166.20. As it seems, the bearish pressure will continue to gather momentum in the Forex trading market also today. The long term target is 164.00.
26/07/'07 - US Durable Goods Orders.
Economic News
USD
Yesterday we noticed the beginning of a dollar recovery against most of the major currencies after the publication of the Federal Reserve report. The dollar has extended its rebound from a record low against the Euro and a 26-year low versus the British pound. The Dollar has lost 1.3% versus the Euro and 2.2% against the pound this month. The dollar climbed broadly yesterday as investors shrugged off signs of housing sector weakness while U.S. Treasury debt prices were little changed. Yesterday the dollar rallied despite a report by the National Association of Realtors that sales of existing homes dropped 3.8% in June to the slowest rate in more than 4 years. It followed data from the Mortgage Bankers Association showing mortgage applications fell for the first time in four weeks to a five-month low The U.S. economy continued to expand at a moderate pace through June and early July with a weaker housing market offset by improvements in the commercial real estate and manufacturing sectors. Existing-homes sales hit a lower-than-expected 5.75 million unit annual rate while prices and inventories remained flat. Applications for new mortgages hit their lowest since mid-February as the demand for homes continues to slide. The inventory of homes for sale fell 4.2% to 4.196 million units at the end of June, which represents an 8.8 months' supply and matched the May supply. As a main note, yesterday data signaled to many analysts that the housing market still has a ways to fall. Higher interest rates, a weapon against inflation, can support a currency by offering investors higher returns on investments denominated in that currency. The Fed survey will be discussed at the central bank's next meeting on Aug. 7, when it is expected to hold the key interest rate at 5.25 percent, since June 2006. Today the data of the Durable Goods orders is going to be published. The forecast stands on 1.9%; this figure reflects a stage a strong recovery in June after plunging the month prior -2.4%. Forex markets may see substantial volatility on the announcement.
EUR
Yesterday the Euro fell against the Dollar by the largest amount in 2 months, putting an end to the currency pair's month long uptrend. Though the Euro has eased back from its July 24th record high of 1.3851, the currency is still up nearly 17% since the beginning of last year. The combination of hawkish rhetoric and seven 25 basis points interest rate hikes by the European Central Bank has driven the EUR/USD from 1.20 to 1.3850 in a little more than a year. The deterioration in Euro zone manufacturing PMI and the drop in the Belgian manufacturing survey suggests that German business sentiment could deteriorate. If that becomes true, the sell-off in the Euro could deepen. A break below 1.3697, may open the door for a move down to 1.3575. The central bank's commitment to continue to raise interest rates has helped to keep the Euro steady near its record highs.
The expectations ahead of the German business climate index are quite low. It a figure will be lower than the previous one, Euro may weaken today. Traders have accumulated excessive EUR long positions that will likely be reduced. Therefore we believe that the report may cause the EUR to strengthen.
JPY
Yesterday the yen retreated from a four-week high and snapped a four- day gain against the Euro, this year's longest rally, as a rebound in U.S. stocks encouraged investors to borrow in Japan's currency to buy higher-yielding assets elsewhere. The Japanese yen may extend losses as investors add to so- called carry trades, taking advantage of the lowest interest rate among industrialized nations. Japanese fund managers are expected to sell nearly 1 trillion yen ($8.3 billion) of foreign-currency trusts this month. The Bank of Japan is likely to hike interest rates only once more in the current fiscal year. Given widely held prospects for continued mild inflation. The BOJ has made it clear that it will skip raising rates in August after conducting its first rate hike in six years this month. The BOJ wants to confirm a downward revision to the CPI data in late August. If the downward bias is up to 0.3 percentage point, as expected, the current 0.6% year-on-year rise in the core CPI will be reduced to 0.3%. Estimated real interest rates would still be negative and thus support the economy as the 0.3% inflation rate would exceed the 0.25% target set by the BOJ. Japanese consumers are continuing to show a willingness to spend again after a downturn that lasted more than a decade. it appears to reflect a steady recovery trend and improved consumer sentiment. Subsequent implications for consumer spending and sentiment are relatively clear; a stable consumption tax may prove bullish for consumption through the medium term. Currently anemic consumer spending rates have definitely shown their impact on economic growth, keeping pressure on the Bank of Japan to limit monetary policy tightening in the absence of a pickup in expenditures.
Technical News
EUR/USD
On the 4 H chart we notice that the bearish trend is running a head. The volatility is very high and the EUR USD is not in a consolidation stage, especially after the pair has broken the 1.3800 support level. The price should continue to move downwards in a range of 1.3750to 1.3650. As it seems, the bearish pressure will continue to gather momentum on the EUR USD also today till the weekend.
GBP/USD
On the 4 H chart we notice that the bearish trend is running a head. The volatility is very high and the GBP USD is not in a consolidation faze, especially after the pair has broken the 2.0550 support level. 2.0520 seem like a strong entry point. The price should continue to move downwards in a range of 2.0520to 2.0420.The volatility is very high, and as it seems, the bearish pressure will continue to gather momentum on the GBP USD also today till the weekend.
USD/JPY
The USD/JPY broke 120.50 resistance. USD/JPY is in an uptrend supported by 1H exponential moving averages. The volatility is high. Bollinger bands are expanded. We should expect to see today a bullish configuration on the USD/JPY. 1H, 4H Elliott pattern implies that the USD/JPY will continue to gather momentum. The target is expected at 121.85
USD/CHF
The USD/CHF is in a bullish configuration. The volatility increases. USD/CHF swings around exponential moving averages (EMA 50 and 100). Bollinger bands are flat. 1H, 4H Elliott pattern implies a continuation of the bullish pressure. The target is expected at 1.2200
The Wild Card
Gold
After a 4 day downtrend, GOLD prices have been moving up. Forex traders may find themselves looking for a direction but without momentum, this will be difficult. Those trading currency should be aware that going short now may be a good move, but need to watch the market closely since the reversal is waiting to gather enough energy before taking place.
30/07/'07 - The Greenback is strengthening despite crashing US stock market.
Economic News
USD
There were several important releases last week relevant to currency trading, especially from the struggling housing sector, that demonstrated once again the housing crisis is nowhere near over. Existing Home Sales came out weak at 5.75M, and New Home Sales disappointed at 834K. To add some fuel to the negative news fire, Core Durable Goods entered negative territory of -0.5%. The flow of weak news from the US continued on Friday as the Annualized GDP came in lower than expected 2.7% despite consensus expectations for 3.4%.
It is quite interesting to see that on top of everything else, the US stock market is weakening, as the Dow Jones dropped another 400 points, yet on the other hand, we clearly see a USD recuperation, that is slowly shaping into a rally. The Greenback is gaining strength against most majors, as the EUR/USD is now trading at 1.3640, and the GBP/USD is trading at 2.0240 after peaking at an unbelievable level of 2.0600. The main reason for that is that traders are putting their trust in the Greenback once again, as external investment is increasing, and traders are hedging risky funds with the US Currency.
This week will be quite full of important news releases, as apart of the Nonfarm Payrolls release on Friday, we also expect Core PCE, the Chicago PMI, and the ISM Manufacturing, and Non Manufacturing Indices. It looks as if price movement will be quite high, and there is a high probability of an additional positive move for the Greenback.
EUR
Last week showed the first signals of the beginning of the end of the positive rally for European currencies. The EUR lost 200 pips against the USD, and the GBP lost more than 400 pips. With the lack of significant news it looked as if the European market was ignoring the US stock market crash, and the flow of negative news that came from the US. Traders are now heading south, especially with the EUR, as it is clear to all that an abnormally strong EUR and high levels of inflation, are not good in the long run, and the ECB is aware of this, as inflation is probably the most important issue in the monetary policy. This week will be quite low on news events, besides the release of the UK rate Decision, and the Euro-Zone Rate Decision on Thursday. Both rates are expected to remain unchanged, as it is highly probable that no surprises will be seen from that. Most of the focus this week will not come from Europe, as the US calendar is very full with highly important news.
JPY
The most intense reaction to the fall of the US stock market would be the massive unwinding of the carry trades. The JPY is growing strong against all crosses, and indeed the only pair that did not see the USD situation improving was the USD/JPY. The news releases from last Thursday showed negative fundamental sentiment as the Core Tokyo CPI and the Retail Sales were both released weaker than expected. Today the Manufacturing PMI will be released, but will probably not generate too much volatility, and is the only bit of mildly important information that will come from the Japanese market this week. It looks as if the unwinding of the carry trades will continue, at least until Friday, where a clearer direction will be determined with the release of the Nonfarm Payrolls, in the US.
Technical News
EUR/USD
The pair is now floating around 1.3640, as the overall sentiment is quite bearish. The daily chart is showing that there is still more room to run and the hourlies are sending mixed signals. 1.3600 is now a major support that if breached will create a further move down, and confirm 1.3550 as the next target price.
GBP/USD
After a breach through the very important 2.0300 level, the signals are more bearish than ever. There is a delicate bullish cross on the 4 Hour chart that might take the pair to a moderate correction, but the pair looks as if it is safely heading south. Next target price appears to be 2.0150.
USD/JPY
There is a local consolidation around 118.50, after a massive rally down. The daily chart is showing a slowdown in bearishness, and the 4 Hour chart is confirming that although the direction is down, the momentum is not as strong as before. A preferable strategy might be to wait for a clearer signal from the daily charts before establishing a position.
USD/CHF
The pair started a moderate uptrend last week that ended with range movement of 150 pips. Both daily and hourly charts show bullish sentiments, and a distinct positive momentum. If the 1.2100 level will be breached, the move up will be confirmed, and we might see the pair return to the 1.2250 levels.
The Wild Card
Crude Oil
There is a very distinct upwards channel forming on the 4 Hour chart, and it is now floating on the upper barrier of the channel. Oil seems to be having difficulties breaking through the 76.90, which provides Forex traders with a great opportunity to go short at a great entry price, and enjoy the strong resistance level.
31/07/'07 - Busy US schedule today - Chicago PMI on tap.
Economic News
USD
The Greenback retreated a bit yesterday, after a strengthening bias appeared amongst traders at the end of last week. The US calendar is full of interesting and important news releases today, after yesterday's almost empty calendar which produced no major price movements.
The US Core PCE Price Index is expected to be released today at 0.2%, which is a slight increase from last month's 0.1%. Personal spending is also expected to be released today, and past data shows that personal spending rose by 0.1% during the month of June, compared to a rise of 0.5% during May. As we can expect, the USD may lose some of its strength again due to the fact that the average American consumer's spending power has decreased. A sharp drop in confidence as well as a widening gap between spending and income will resurrect talk of an end of the year interest rate cut. The most important news release of the day would no doubt be the Chicago PMI, which is expected to go down from 60.2 to 59.0. Although the expected figure indicates growth in the manufacturing sector, it still means the growth level is decreasing. If it comes inline with expectations, it will probably shift the USD down a bit. It appears that the USD will continue to weaken today against the 13-nation currency, on the basis of the diverse data which is going to be published today in the market. The forecast indicates a slowdown in personal spending growth while an inflation gauge closely watched by the Federal Reserve may stay at the same level. The US economy is expected to show additional negative signals especially after the Rising mortgage rates and defaults which have hurt badly the mortgage lenders this year. More than 50 lenders have filed for bankruptcy or have sold out. Traders will be watching the price movement closely today, as it is a direct preparation to Friday's main event - the release of the Nonfarm Payrolls.
EUR
The EUR has grown stronger all across the board yesterday, even with the lack of any major news from Europe and the US. Today will be quite different as besides the busy US calendar there are several major events expected to come from Europe, especially from the UK. The first event to open the news session would be the Euro-Zone unemployment rate release (9:00 GMT) which is expected to be released a bit lower than last month at 6.9%. Also expected at the same time is the release of the Euro-Zone Consumer Confidence which is expected to remain unchanged at -2, and is directly indicating that the consumer's mood in regards to economic conditions is not quite good, yet stable. The most important release that is expected to come from Europe is the Confederation of British Industry (CBI) Distributive Trades Realized which measures the health of the retail sector by asking executives if their firm experienced an increase or decrease in sales compared to a year ago. That is a very important figure because Retail Sales make up a large portion of consumer spending, which is a major driver of the UK economy.
JPY
Yesterday the JPY jumped to recent local highs and touched 118.05 against the USD and 160.67 against the EUR. The JPY is headed for a second day of losses against the EUR as a rebound in U.S. stocks gave investors confidence to buy higher-yielding assets funded by loans in Japan. Last night, overall Household Spending y/y, and the Unemployment Rate data were published in Japan. Japan's households increased spending for a sixth month in June, Spending rose by 0.1% from last year, and the jobless rate fell The to 3.7% percent in June from 3.8% in May, which indicates an improvement. At the moment according to these specific results, an August interest rate increase will be difficult to be obtained by the BOJ, and as it seems it will keep the interest rate at 0.5%, the lowest among major economies. This question will be answered on August 22nd by the Bank of Japan policy makers.
Technical News
EUR/USD
The pair is now forming a downwards channel with strong resistance at the 1.3720 level. The daily chart is bearish, and the hourlies support the notion with a bearish cross above the 80 level on the slow stochastic. It appears that the pair is going to the 1.3600 level.
GBP/USD
After a short correction, the pair regains the bearish path, and seems to be quite confident to reach the target point of 2.0100. The hourlies are quite bearish, as the dailies produce mixed signals. A preferable strategy would be to keep out until a clear daily sign will emerge.
USD/JPY
The pair seems to be having difficulties breaking through the 118.00 level, after several attempts that failed. This sets the support level as a very strong one, that if breached will produce a very strong bearish move. The ongoing sentiment is down so a preferable strategy would be to wait for a break signal before entering with a short position. 177.75 will confirm the move.
USD/CHF
The pair is floating at a relatively tight range for several days now, and the daily studies start sending bullish signals. The hourlies are still producing mixed signals, and most of the time is floating at neutral territories. A break through 1.2135 will confirm that the move up is valid, and will probably take the pair back to the 1.2300 levels quite soon.
The Wild Card
Crude Oil
The upwards channel continues, as we see several attempts to break through the 77.20, with no success. This confirms the fact that Oil is accumulating the bearish energy, and that the correction is imminent. Forex traders might benefit from that, as it might be a great entry point for a short position.
02/08/'07 - EUR & GBP Interest Rate Announcement
Economic News
USD
Yesterday the greenback was on a slippery slope in the currency trading market as a succession of negative data from the US threatened to reverse the dollars recent gains. The first and most significant news of the day was the ADP Nonfarm Employment Change, which measures the number of new jobs created outside of the farming sector, this figure came in at 48K which was well below the expected figure of 103K. This weak ADP release gives a strong indication that the Nonfarm Payrolls Report will release on Friday significantly below its expected figure of 135K. Although the ADP figure has been questioned in the past with regards to its predictive value it still managed to shake up the rallying greenback. To make matters worse for the USD there was more negative news to follow as both the ISM Manufacturing Index and Prices figures came in below expectations at 53.8 and 65.0 respectively. However the greenback has performed solidly amongst the global equity market fall and it recouped after yesterday's string of negative data and now seems to be preparing itself for another rally.
Today the only significant news to be released from the US will be Unemployment Claims and Factory Orders which are both expected to release stronger than their previous figures. The persistent problems in the US sub-prime mortgages coupled with further reports of hedge fund worries is fuelling the risk aversion sentiment. The USD has performed well amid this safe-haven sentiment and it will continue to show strength today particularly against the high yielding market currencies as this sentiment is showing no imminent signs of letting up. However with yesterdays negative data taming the dollars bullish run traders will exercise caution ahead of Fridays NFP report which has a strong probability of springing a negative surprise.
EUR
The EUR is still showing signs of resilience as it traded in a relatively close range yesterday even though there was volatility all across the board. The German Manufacturing PMI figure was released slightly below the expected figure of 57.0 at 56.8. However this soft data did not manage to slowdown the overall European Manufacturing PMI figure which was released stronger than expected at 54.8. The most significant news to be released from the Euro-zone today will be the ECB's key interest rate announcement which is expected to remain unchanged at 4.00 %. . The EUR should to continue to range trade today but we could see some strong volatility if the ECB hints towards future rate policy. No news conference is expected to follow the interest rate announcement so a surprise conference by the ECB will cause the market to start flapping.
In other news yesterday the GBP had a short-lived bullish burst on the back of the release of the better than expected UK Manufacturing PMI. Today the BoE will announce its benchmark rate which also expected to remain unchanged at 5.75 %. However the current market sentiment seems to be that the ECB and BoE will both hike rates in the near future so it will be crucial for traders to identify how the preceding economic indicators from Europe and the UK will affect the two central banks monetary policy.
JPY
The JPY has enjoyed a sustained bullish run as a result of the carry trades unwind which is being driven by increased risk aversion. There has been a strong negative correlation between the JPY and US equity markets as a fall in the equity markets has usually sparked a rise in the JPY. This was reiterated yesterday as the JPY had a dip against some of the majors on the back of a short lived Dow rebound. However without any further news releases expected from Japan for the rest of the week the direction of the JPY will heavily depend on the volatility of the equity markets but with the carry trade unwind likely to continue in the near future we should see the JPY extend its gains particularly against the greenback.
Technical News
EUR/USD
There is a bearish configuration forming on the 4 Hour chart. The volatility is high and the EUR/USD is not in a consolidation stage, especially after the pair has broken the 1.3700 support level. The price should continue to move downwards in the 1.3700 /1.36050 range. As it seems, the bearish pressure will continue to gather momentum at least until the week ends.
GBP/USD
The pair is going through a choppy session in the past few days, and gives mixed signal on the hourly level. The daily chart is showing massive bearish formation, and it looks as if the pair is heading 2.0200 again. a preferable strategy might be to wait for the hourlies to unwind before going short.
USD/JPY
The pair is in the middle of a very strong downtrend that started from 124.00. It looks as if the pair is having difficulties breaking the 117.60 level which is now a very strong support. If the support level will be breached it will validate the next move down, to 116.00.
USD/CHF
The pair is floating a low range similar to the one in December. The 1.1950 level is established as an almost impossible level to break. The dailies are showing bullish signals, and the dailies support the bullish notion. It might be preferable to buy on dips, as the bullish sentiment is quite strong.
The Wild Card
Crude Oil
Oil is going through a massive downtrend momentum, and broke the 77.50 level. This provides Forex traders with the opportunity to jump in a good trend and to take some profit on the short rang. Next target price is 75.50.