04-Jan-2008
	Headlines Data On Tap - US NFP Report  Start Trading  Demo Account  SuperMini Account  Standard Account  Archive  03-Jan-2008  02-Jan-2008  31-Dec-2007  28-Dec-2007  Market Trend   EUR/USD GBP/USD USD/JPY USD/CHF AUD/USD EUR/GBP Daily Trend Weekly Trend Resistance 1.4824 1.9754 110.00 1.1188 0.8900 0.7549 1.4790 1.9735 109.68 1.1160 0.8870 0.7527 1.4760 1.9700 109.40 1.1130 0.8845 0.7500 Support 1.4700 1.9648 109.00 1.1073 0.8800 0.7448 1.4673 1.9620 108.76 1.1048 0.8773 0.7415 1.4640 1.9600 108.59 1.1015 0.8753 0.7370
	Economic News
	USD
	Yesterday a government report showed that the number of U.S. workers filing new claims for jobless aid dropped by 21,000 last week, while the number of Americans who stay on the benefit rolls increased to the highest level in more than two years. The U.S. Labor Department reported that the number of Americans filing for first-time claims for unemployment benefits suggested that the labor market continued to weaken since the end of 2007. Initial jobless claims decreased to 336,000 last week from a two-year high of 357,000 the week before. Job growth slowed in December remarkably during the last four months and U.S Companies only added 40,000 jobs. The ADP report, which was published yesterday, indicated a reduction of 31,000 jobs in goods- producing industries including manufacturing and construction companies. Service providers added 71,000 workers and construction employment dropped by 17,000. This fact suggests that nonfarm payrolls grew by about 65,000, close to the 58,000 now expected. Borrowing costs have fallen since the central banks declared a shared effort to relieve a logjam in interbank lending power on the basis of concerns due to losses at financial institutions which could possibly slow economic growth. Applications for loans to buy homes fell to the lowest level in more than four years, while demand for refinancing loans dropped to the lowest since December 2006. On the basis of this data, many Forex traders believe that today's Labor Department report will also show employment slow down, and as we witness, the employment figures are vital, they represent mainly the housing sector in combination with the credit markets, from which the U.S. economy still suffers. The sentiment surrounding the greenback remains negative so it should continue on its bearish path today, however it could consolidate after its recent sharp declines. All eyes will be on the NFP report today and we could see some sharp movement on the back of any surprise.
	EUR
	The EUR continued its bullish rampage yesterday and the recent sharp strengthening of the EUR will once again raise concerns over the state of European exports. The German economy is one of the key players in the EU and it is heavily reliant on exports. However the sharp appreciation of the EUR has begun to dampen the German economy as was seen late last year. Germany's unemployment rate decreased to the lowest in almost 15 years in December. Declining unemployment in Germany revealed warning signs coming from Europe's major economy as it struggles to cope with the EUR's 12% gain against the U.S. dollar over the past year. German business confidence chopped down to the lowest in almost two years in December. Retail sales fell for a third month. Nevertheless this negative news did not really shake up the resilient EUR and we are seeing the 15 nation currency rally sharply in the New Year. Germany's unemployment rate was left unchanged at 8.1% in December, as the number of German citizens without work has reached to just over 3.4 million. Wednesday's report pushed the EUR down to $1.4373 in European trading, from $1.4409 in late trading Tuesday night in New York. Businesses in Germany are concerned with the escalating rate of borrowing. Banks are suspicious of lending to each other, due to uncertainties of loans backed by U.S. subprime mortgages, and this fact has resulted in a dramatic slowdown in lending to corporations and individuals.
	JPY
	The JPY continued its bullish surge yesterday, driven mainly by the sharp global carry trade unwind. It reached a five-week high against the EUR and US dollar and it has been one of the biggest gainers among major currencies in the last few days. Based on Weak U.S. data, as well as reports on Wednesday of reduction in the manufacturing sector during the month of December, many investors around the world began shifting chancy assets due to uncertainties concerning the impact of the sluggish U.S. economy over the global development. This caused a sharp carry trade unwind which has not relented since then. Carry trades involve selling low-yielding currencies like the yen to invest in higher-yielding currencies. Therefore declines in overseas equities markets since last week have driven a massive carry trade unwind and hence given a boost up to the JPY, which hit a 17-month high against the sterling at 213.54 yen on Thursday. In addition, yesterday the JPY strengthened to as high as 108.25 per US dollar, a point which has not been seen since November 27. The Nikkei was down 3.5 percent at 14,771.85, it's lowest since Nov. 22, and the broader TOPIX index was down 3.2 percent. The strong correlation between falling equities and a strengthening JPY indicates that the short term direction of the JPY will heavily depend on the performance of global stocks combined with the level of risk investors are willing to take.
	Technical News
	EUR/USD
	The positive momentum is growing stronger, and the 4 Hour chart is showing some room to run on the bullish side. However the daily chart indicates that we are in overbought territory with RSI and slow stochastic floating around the 80 level. This pair should correct slightly before making another surge upwards. Its next bullish target price will be 1.4800.
	GBP/USD
	The cable is continuing to trade in a wide range with a strong signal on the bearish side. The 4 Hour chart is showing a bearish cross and the dailies are indicating a solid downtrend in the making. If the cable breaches the strong 1.9700 support level, we should see it make another sharp freefall.
	USD/JPY
	There is strong negative momentum surrounding this pair and it is now floating around the 122.50 level. The daily chart is bearish and is supported by a bearish 4 Hour study as well. It looks as if the next target price for this pair will be to breach the all important 109.00 support level.
	USD/CHF
	After several attempts to break through the very important support level of 1.1100, the pair just managed to peak through. However at the moment the pair seems to be consolidating around the 1.1120. The ongoing momentum is down, as traders should pay close attention to the 1.1100 level, as if it is breached than a much deeper move would be imminent.
	The Wild Card
	Gold
	The bullish momentum is accumulating power, and there is a steady tight upward channel appearing on the 4 H chart. This commodity may correct slightly before continuing its steady progression. So forex traders could maximize their profits by waiting for a dip and then placing a buy position for a solid longer term trade.
	Indicators  Date  Time  Country  Event  Period  Previous  Forecast  Importance 2008-01-04 06:45:00 CHF CPI m/m 0.5% 0.1% *** 2008-01-04 09:30:00 GBP Services PMI 51.9 51.6 *** 2008-01-04 09:30:00 GBP Mortgage Approvals 88K 84K ** 2008-01-04 10:00:00 EUR CPI y/y 3.1% 3.1% *** 2008-01-04 13:30:00 USD Nonfarm Employment Change 94K 70K ***** 2008-01-04 13:30:00 USD Unemployment Rate 4.7% 4.8% ***** 2008-01-04 13:30:00 USD Average Hourly Earnings m/m 0.5% 0.3% *** 2008-01-04 15:00:00 USD ISM Non-Manufacturing Index 54.1 53.5 *** 2008-01-04 15:00:00 CAD Ivey PMI 58.7 51.5 ****
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