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 |  20-Mar-2008 | |
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| Headlines |  |
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 | The Greenback Gains after Rate Cut |
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| Market Trend |  |
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| | EUR/USD | GBP/USD | USD/JPY | USD/CHF | AUD/USD | EUR/GBP |
| Daily Trend | 
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| Weekly Trend |
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| Resistance | 1.5558 | 1.9890 | 101.15 | 1.0220 | 0.9172 | 0.7872 |
| 1.5535 | 1.9858 | 100.78 | 1.0190 | 0.9135 | 0.7845 |
| 1.5510 | 1.9830 | 100.45 | 1.0172 | 0.9100 | 0.7832 |
| Support | 1.5435 | 1.9757 | 99.80 | 1.0151 | 0.9040 | 0.7772 |
| 1.5408 | 1.9730 | 99.52 | 1.0127 | 0.9009 | 0.7748 |
| 1.5385 | 1.9700 | 99.26 | 1.0100 | 0.8985 | 0.7720 |
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| Economic News |
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| USD |
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The greenback appreciated all across the board yesterday and appears to be in a very strong corrective formation at the moment. This is probably due to the fact that in the eyes of many analysts, the rate cut this week was not aggressive enough, and that Bernanke's move was probably motivated by the fear of high inflation consequences.
Oil prices depreciated yesterday despite The Crude Oil Inventories report release. The reading came at 0.2M barrels, well bellow the 6.2M reading of last week. Despite the fact that there is much less Crude Oil in the US inventors than last week, Crude Oil prices fell all across the board. Crude Oil closed yesterday's session at the rate of 102.35 USD per barrel, a 4.5% loss in one day. Commodities prices also fell yesterday, gold traded at the end of the session under the rate of 940 USD per ounce, loosing 6.5% in 20 hours.
Today, the only figure expected to come from the US will be the Unemployment Claims report which is forecasted to show a 17k raise on the new unemployment adult people in the US. We expect the report to have some negative impact on the greenback, starting from 14:30 GMT.
It appears that the corrective move in the greenback's situation might continue for a while, yet analysts are not ruling out the option of a possible recession that might hit the US, despite all the Fed's attempts to prevent it.
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| EUR |
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Yesterday the EUR lost ground against the USD on the back of the Feds interest rate statement which was interpreted as being dovish. The only news which was released from the European market yesterday was the European trade balance which was released in negative territory at -2.0B%, well below the expected figure of -0.5B, this data had a negative impact on the EUR as traders began shifting their attention to the Feds statement; therefore most of the EUR movement was dollar centric.
The Bank of England will release its Retail Sales report today which should provide the market with further indication as to its future monetary policy. Traders should pay close attention to this report as there is some confusion in the market regarding the current interest key rate and especially the inflation level. There will probably be high volatility on the back of this report and the GBP could lose additional ground in choppy trading as market forecasts are heading towards.
The EUR/USD climbed to 1.5582, rebounding from a record high of 1.5903 in March 17th and as it appears now the bearish trend for the dollar is far from over, with the Federal Reserve expected to ease monetary policy further to help avert a recession in the US. Many traders believe that Feds might be a bit late in their reaction, and that a recession might be an inevitable event.
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| JPY |
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The JPY continued to gain ground yesterday particularly against the USD and EUR as carry trades continued to unwind with a fresh bout of risk aversion emerging from worldwide concerns with hedge fund losses. The JPY rose against 14 of the 16 most-active currencies after gold plunged the most since 2006 and oil fell more than $4 a barrel.
The yen advanced the most against the South African rand, a popular carry-trade currency. It rose 0.6 percent to 12.1716 versus the rand. It traded at 90.51 per Australia's currency from 90.53 yesterday in New York.
The JPY grew steadily over yesterday's trading, due in large part to the sale by most of high-yielding assets subsidized by the low rates on carry trades. If yesterday was any indication, we should see a repeat performance today. With most of the day's more pressing news not involving the Asian market, it should be assumed that the JPY will continue to strengthen against its crosses. Financial institutions are still quite skeptical of the current equity markets and rising oil prices, which should show a trend of less volatile trading. This should allow the JPY to continue its strength. However, it should be stated that more likely than not majors will eventually catch up.
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| Technical News |
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| EUR/USD |
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The pair has initiated a corrective move and is now floating around 1.5550. The bullish channel on the 4 hour chart has been breached and together with a negative slope on the slow stochastic it appears that the next target price might be 1.5490. Going short with tight stops might be a good choice today.
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| GBP/USD |
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The cable has breached the key Fibonacci level of 1.9800, and validated the bearish move with a full bar. The slow stochastic is in a very bearish formation, and the momentum is growing stronger. The next key test would be at 1.9700 which appears to be a valid target price.
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| USD/JPY |
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After bottoming at 96.00 the pair shows consistent bullish correction and is now aiming back at the 100.00 level. The slow stochastic of the 4 hour chart is very bullish and has a positive slope. If the 100.00 level will be breached, the next move to 100.79 will be validated. Going long might be a preferable strategy.
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| USD/CHF |
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There is a bullish channel forming on the 4 hour chart as the pair now floats on the bottom barrier of it. The RSI is showing that the momentum is very bullish and that the pair still has much more room to run. The next target price might be 1.0155 on the next bullish break.
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| The Wild Card |
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| Gold |
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There has been a sharp breach through the bullish channel and the corrective move has now completed the width of the channel. The slow stochastic of the 4 hour chart is now indicating a very strong corrective signal.
Forex
traders are advised to wait for the bullish correction and than swing into what might be a very strong move up.
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| Indicators | |
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| Date | Time | Country | Event | Period | Previous | Forecast | Importance |
| 2008-03-20 | 00:00:00 | JPY | Holiday: Veterans Day | | - | - | * |
| 2008-03-20 | 00:30:00 | AUD | New Motor Vehicle Sales m/m | m/m | 0.6% | - | * |
| 2008-03-20 | 07:15:00 | CHF | Trade Balance | | 1.06B | 1.00B | * |
| 2008-03-20 | 08:15:00 | CHF | PPI | m/m | 0.5% | 0.3% | **** |
| 2008-03-20 | 09:00:00 | EUR | Manufacturing PMI | | 52.3 | 52.0 | **** |
| 2008-03-20 | 09:00:00 | EUR | Services PMI | | 52.3 | 52.0 | * |
| 2008-03-20 | 09:30:00 | GBP | Retail Sales | m/m | 0.8% | -0.1% | ***** |
| 2008-03-20 | 09:30:00 | GBP | M4 Money Supply | m/m | 1.4% | 1.0% | * |
| 2008-03-20 | 09:30:00 | GBP | Public Sector Net Borrowing | | -14.1B | 2.3B | * |
| 2008-03-20 | 12:30:00 | CAD | Foreign Securities Purchases | | 1.2B | 1.9B | **** |
| 2008-03-20 | 12:30:00 | CAD | Leading Indicators | m/m | 0.2% | 0.1% | * |
| 2008-03-20 | 12:30:00 | USD | Unemployment Claims | | 353K | 360K | **** |
| 2008-03-20 | 14:00:00 | USD | Leading Index | m/m | -0.1% | -0.3% | * |
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