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Thursday, 3 Jun 2010

Euro Reached Year Low against the British Pound

The EUR traded relatively flat yesterday against the U.S. Dollar, but it continued to trade low against the British Pound, the EUR/GBP pair is currently trading at 0.8365, after crossing below 0.8400, and reaching as low as 0.8279. Although the pair slightly recovered during NY trading hours it is still signaling that the bearish momentum is not over yet.

EUR/USDGBP/USDUSD/JPYUSD/CHFAUD/USDEUR/GBP
Daily Trendupupupdownupup
Weekly Trenddowndowndownupnodown
Resistance1.23901.488093.301.17000.87000.8475
1.23501.477093.001.16250.86500.8440
1.23101.472092.501.15750.85500.8395
Support1.22101.460591.751.14700.84000.8325
1.21801.455091.501.14200.83300.8280
1.21451.450091.201.13800.82750.8250

Economic News

USD - Dollar Strongly Advanced Against the YEN

The Dollar gained strongly against the Japanese Yen, the USD/JPY pair is currently trading at 92.20. Investors' faith in the yen declined after the Japanese prime minster resigned last night.

Versus other major counterparts, the U.S. Dollar remained fairly flat against the Eur as no major European news events were published yesterday. However a U.S. report about Pending Home Sales which came better than expected sent investors back to riskier assets such as the EUR which traded slightly higher during NY trading hours.
The USD traded lower against the Canadian Dollar in respond to interest rate rise a day earlier and a rally in commodities. USD/CAD traded 200 pips lower, currently trading at 1.0385.

Looking ahead, today traders are advised to follow reports published one hour before NY trading hours. Positive results could send investors to buying back riskier currencies. ADP Non-Farm Unemployment is expected at 12:15 GMT and ISM Non-Manufacturing PMI is expected at 14:00 GMT.

EUR - Investors' Buy Euro Following U.S. Pending Home Sales

The Euro is slightly higher during early trading hours against the U.S. Dollar. The EUR regained back some of its recent losses after a report published yesterday by the U.S. showed better than expected Pending Homes Sales. The data improved investors' confidence on economic recovery.

The Euro managed to strengthen against the Yen, in respond to the Japanese prime minister resignation, and following the Yen weakness against the USD. The Euro also regained back some of its losses after declining rapidly recent days against the British pound. The EUR/GBP crossed below 0.8400, and is currently trading at 0.8360. The pair is expected to decline further toward 0.8200.

Looking ahead, today traders are advised to follow European Retail sales report published at 09:00 GMT. Forecasts are for a 0.1% rise in retail sales, better results should support the EUR. An earlier report about Service PMI, publish by the UK, at 08:30 GMT could further support the British pound rally vases the EUR.

JPY - Investors Sold the YEN after Japanese Prime Minister Resigned

The Japanese YEN traded lower against most of its major counterparts yesterday following Prime Minister Yukio Hatoyama resignation. The political uncertainty reduced the Yen's safe heaven appeal. The Yen slid to 92.20 per Dollar from 91.44, yesterday's open rate. The Yen fell to 113.36 per EUR in early trading hours, the uptrend is expected to continue during today's trading session.

Looking ahead, today U.S. Unemployment and Manufacturing reports should dictate the currency market direction. Recently if such reports came lower than expected traders returned to safe heaven currencies such as the USD and the Japanese Yen. Recent events in Japan question the Yen role as a safe heaven currency. Therefore the Yen is expected to trade further lower against its major counterparts today.

OIL - Positive U.S. Economic reports lift Crude Oil price

Crude Oil price recovered substantially during NY trading hours. Better than expected Pending Home Sales report and strong Vehicles sales proved strong consumer demand. Following these reports and the rally in the equity markets improved Investors' confidence about economic recovery.

Looking ahead to today, inventories report should be published at 15:00 GMT, data is expected to show a decline in inventories, this could support yesterday uptrend momentum. Traders are also advised to follow other macro reports published earlier, if data turns positive and investors are optimistic about recovery, crude prices will continue to rise. If data disappoint investors should expect a sharp decline in Oil price toward $70 per barrel.

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 1.4766 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 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 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

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

Current Time: 04/24 16:26 GMT
# Time $€£¥ Event Per. Prev. Fore. Act. Imp.
04/24
00:30JPY+ Tokyo Core CPI y/y1.0%2.8%-3
00:30JPY+ National Core CPI y/y1.3%1.4%-1
04/25
05:30JPY+ All Industries Activity m/m1.0%-0.5%-1
09:30GBP+ Retail Sales m/m1.7%-0.4%-5
09:30GBP+ BBA Mortgage Approvals 47.6K48.9K-3
14:00EUR+ Belgian NBB Business Climate-4.4-2.3-1
14:45USD+ Flash Services PMI55.556.2-1
14:55USD+ Revised UoM Consumer Sentiment82.683.2-3
14:55USD+ Revised UoM Inflation Expectations3.1%*-1
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