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Monday, 3 May 2010

$146 Bailout Package for Greece to Shake the Market

After a bullish week for the Dollar and a bearish week for the Euro, the speculations regarding an aid package for Greece have corrected looses for the Euro. Eventually, the European leaders have confirmed the rescue plan yesterday, and as a result promptly boosted the Euro. Currently the first reaction seems to be limited as the Euro erasing profits, and it seems that only certain thing is that unique opportunities to make high profits will take place this week. Make sure you'll take advantage of what promises to be an extremely volatile trading week

EUR/USDGBP/USDUSD/JPYUSD/CHFAUD/USDEUR/GBP
Daily Trendupnoupdownnoup
Weekly Trendnononoupnono
Resistance1.33151.535094.901.09300.93300.8760
1.32851.532094.601.09000.93000.8730
1.32551.529094.301.08650.92700.8700
Support1.31901.522093.601.08000.92000.8635
1.31601.519093.301.07700.91700.8600
1.31301.516093.001.07400.91400.8570

Economic News

USD - Non-Farm Payrolls Expected On Friday

Last week's trading session began with a sharp appreciation of the Dollar. The Dollar gained about 280 pips against the Euro and about 450 pips against the Pound. However as the week progressed, the Dollar erased a big portion of the gains vs. the major currencies.

The Dollar's bullish trend from the beginning of the past week came mostly as a result of the positive data that was published from the U.S. economy. The Consumer Confidence survey showed that the confidence among U.S. consumers rose in April to the highest level since September 2008. This seems to be due to the rapidly improving employment data which were published over the past 2 months. The growing confidence in the U.S. economy has boosted the Dollar, which strengthened against all its major counterparts. However, near the weekend some less reassuring data was published, which erased some of the Dollar's gains. The Advance Gross Domestic Product (GSP) showed that the U.S. economy has expended by 3.2% in the first quarter, failing to reach analysts' expectations for a 3.4% expansion. Whilst this is still considered to be a positive result, especially considering the recent recession, the failure to achieve forecasts have created a technical correction that slightly weakened the Dollar.

As for the week ahead, the most interesting news publications will surely be the Non-Farm Payrolls which is expected on Friday. The Non-Farm Payrolls is the best measurement for the U.S. labor market, and is considered to be one of the most impacting news releases in the market. Analysts have forecasted that payrolls grew by 183,000 during the past month. If the actual result will be similar, the Dollar might be boosted further.

EUR - Greece Rescue Package to Boost the Euro

The Euro saw an extremely volatile session during last week's trading. The Euro began last week with sharp drops against all the major currencies, including a 350 pips slide against the Yen, yet managed to erase most of its losses just before the weekend.

What impacted the Euro mostly during last week's trading was the uncertainty regarding the Greek economy and its potential affect on the Euro-Zone. As the European leaders failed to produce a rescue plan, the risk-appetite in the market kept reducing, leaving investors to look for safer assets such as the Dollar and the Yen. As the week progressed, more and more rumors insisted that the bailout package is merely a matter of time, and indeed yesterday the $146 billion aid package was approved. The primary reaction to the aid package has boosted the Euro on all fronts, especially against the Dollar. Nevertheless, it currently seems that investors will look for further indications that the Euro-Zone will not be severely damaged by the Greek economy, or the rest of the immersing European economies.

Looking ahead to this week, traders must remain updated regarding two different issues. The first one is of course the Greek rescue plan and its outcomes. The second one is the European Minimum Bid Rate, which is expected on Thursday. The Minimum Bid Rate is the European interest rates announcement for May. Current expectations are that the European Central Bank will leave rates at 1.00%, yet every other decision could have an enormous impact on the Euro.

JPY - Yen Slightly Strengthens Against the Majors

The Yen saw a very jumpy trading session during last week's trading. The Yen began last week's trading with a bullish trend against all the major currencies. The trend then reversed, yet the Yen kept modest profits against the majors.

The Yen was boosted by the positive Japanese economic data which was published last week. The Japanese Retails Sales rose by 4.7% on March, beating expectations for a 3.7% rise. The Retail Sales are a primary gauge of consumer spending, and the positive figure has added to Yen's demand. In addition, the Household Spending, another consumer spending indicator, rose by 4.4% in March, beating the 0.7% expectations as well. The combination of the two indicators proved that the Japanese citizens have greater confidence regarding their economic outlook and thus feel safer to consume. However, the Yen's bullish tend has reached its end once speculations regarding the Greek Rescue Package became more and more realistic. The rescue package has increased risk-appetite in the market, and turned investors to look for riskier assets such as the Euro.

As for this week, traders are to keep track of the Greek bailout plan, as this seems to be the most influential news event at the moment. Traders should take under consideration that positive data regarding the Greek economy is likely to boost risk-appetite and as a result to weaken the Yen.

Crude Oil - Crude Oil Reaching Over $86 A Barrel

Crude Oil has reached a 3-week high lately after peaking at $86.75 a barrel. Crude Oil rose from $81.20 a barrel on Wednesday, to complete 3 consecutive days of rising trend.

Crude Oil's bullish trend seems to be the result of speculations that global demand for energy will increase, mostly due the U.S. recovery signals. The U.S. economy is the biggest oil consumer in the world and thus the series of positive publications is leading investors to believe that demand for oil will increase. In addition, the aid package which was offered to Greece is also supporting oil prices. The Greek economy was the source of high uncertainty in the market lately, and the resolution of its problems is likely to hike risk-appetite, and as a result to boost crude oil.

As for the week ahead, traders are advised to continue follow every update regarding the Greek economy. The Greek rescue package seems to be the main catalyst to impact the market at the moment, and this is likely to remain that way for the near future. In addition, traders should follow the major U.S. economic publications; especially the Non-Farm Payrolls on Friday, as this tend to have an immense impact on Crude Oil trading.

Technical News

EUR/USD

While most indicators for the pair seems to be floating in neutral territory at the moment, a bullish cross is evident on the hourly chart's Slow Stochastic with the RSI floating near the oversold territory. Going long for the day may be advised.

GBP/USD

Most indicators for the pair are floating in neutral territory at the moment with the pair range trading between 1.5235 and 1.5270. Waiting on a clearer direction may be advised for today

USD/JPY

While most indicators for the pair seems to be floating in neutral territory at the moment, a bullish cross is evident on the hourly and 4 hour charts slow stochastic. Going long for the day may be advised

USD/CHF

A bearish cross is evident on the hourly chart's Slow Stochastic with the hourly and daily RSI floating near the overbought territory. Going short for the day may be advised.

The Wild Card

Russell 2000

After the recent sharp drop a correction may be taking place today as the RSI seems to be floating in the oversold territory on the hourly and 2 hour charts and a bullish cross is evident on the 4 hour chart's Slow Stochastic CFD traders may be advised to go long for the day.

Current Time: 09/03 01:34 GMT
# Time $€£¥ Event Per. Prev. Fore. Act. Imp.
09/03
02:30AUD+ GDPq/q1.1%0.4%-5
04:20AUD+ RBA Gov Stevens Speaks***5
08:15EUR+ Spanish Services PMI56.255.5-3
08:45EUR+ Italian Services PMI52.851.7-3
09:00EUR+ Final Services PMI53.553.5-1
09:30GBP+ Services PMI59.158.6-5
10:00EUR+ Retail Sales m/m0.4%-0.3%-3
10:00EUR+ Revised GDP0.0%--1
15:00CAD+ BoC Rate Statement***5
15:00CAD+ Overnight Rate1.00%1.00%-5
15:00USD+ Factory Ordersm/m1.1%10.9%-3
19:00USD+ Beige Book***3
09/04
01:00JPY+ Monetary Policy Statement***5
01:00CAD+ BoJ Press Conference***5
01:00EUR+ Spanish 10-y Bond Auction2.69|2.1*-1
01:00EUR+ French 10-y Bond Auction1.77|2.7*-1
01:00GBP+ MPC Rate Statement***5
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