Forex Tips & Daily Analysis

Crude Oil Prices Surprise with Bullishness as USD Weakens.

Many analysts yesterday had anticipated a slight decline in the price of Crude Oil considering the recent strength in the USD brought on by last week's employment data. However, oil prices surprised many traders today as the price continued to climb above $70 a barrel to hit a 7-month high! As Geithner's speech demonstrated a renewed push for economic recovery, and potential plans to raise interest rates in the US, there isn't very stable ground around the common safe-haven investments. Traders should expect more volatility today.

Economical News

USD

The U.S. Dollar weakened during yesterday's trading session, correcting the sharp gains against the EUR and GBP seen earlier this week. This occurred as investors questioned whether the economy had improved enough to justify talk of higher U.S. interest rates by year end. By yesterday's close, the USD fell sharply against the EUR, pushing the oft-traded currency pair to 1.4060. The dollar experienced similar behavior against the GBP and closed at 1.6310.

The dollar, which fell sharply in May, rallied late last week after data showed U.S. employers cut fewer than expected jobs last month, but that move fizzled yesterday as analysts warned the U.S. economy still faced a rising jobless rate.

There was a quiet day of news from the U.S. as there were no major economic data releases on the calendar yesterday. However, U.S Treasury Secretary Geithner spoke about the state of the U.S. economy. He pointed out specifically that Barack Obama will unveil a new model for regulation of financial institutions next week which might affect the dollar. Overall, investors remained wary of making big bets in favor of the dollar these days, especially as they re-thought the chances of a Fed rate increase later this year.

Looking ahead to today, there are several important news releases coming out of the U.S. These include the Trade Balance and Crude Oil inventories at 12.30 GMT and 14:30 GMT, respectively. Better-than-expected results may help the Dollar recover some of yesterday's losses against some of its crosses such as the EUR and GBP. On the other hand, if the results turn out to be lower than forecast, then the Dollar may record a fairly bearish session in today's trading. Traders should pay close attention to the market as there is an opportunity for traders to capitalize on the fluctuations which are likely to follow these releases.

EUR

The EUR finished yesterday's trading session with mixed results versus the major currencies. The 16-nation currency extended gains versus the U.S. Dollar on Tuesday, to trade above $1.41 amid a broad sell-off in the greenback. The EUR experienced similar behavior against the JPY as the pair rose from 135.96 to 137.12 by days end. The EUR did see bearishness as well as it lost over 60 pips against the GPB and closed at 0.8620.

A leading indicator released yesterday was the German Industrial Production report. Germany holds the largest and strongest economy in the Euro-Zone, and thus the relevant publications from this economy usually have a hefty impact over the EUR. As a result, Germany's economy may be slow to recover from a record contraction in the first quarter as companies trim jobs and the global slump curbs foreign sales.

German exports fell more than economists expected in April and European Central Bank (ECB) Governing Council member Erkki Liikannen said yesterday that there is no quick recovery in sight for the world economy. Germany, a leading global exporter, has been mauled by bearish global demand in the past year, and notoriously thrifty German consumers have done little to compensate by hitting the stores.

Looking ahead to today, the most important economic indicator scheduled to be released from the Euro-Zone is the French Industrial Production at 6:45 GMT. Analysts are forecasting this figure to slightly increase from its previous reading. Traders will be paying close attention to today's announcement as a stronger than expected result may boost the EUR in the short-term. Traders are also advised to follow the Manufacturing Production figures coming out of Britain at 8:30 GMT, and the Trade Balance figures coming out of the U.S. at 12:30 GMT as these results may set the EUR's main currency crosses for the day.

JPY

The Japanese Yen completed yesterday's trading session with mixed results versus the major currencies. The JPY fell against the EUR yesterday, pushing the oft-traded currency pair to 137.12. The JPY experienced similar behavior against the GBP as the pair closed at 158.70 by day's end. The Japanese Yen did see some bullishness as well as it gained over 100 pips against the USD to close at 97.20.

Japan's deepest recession is easing now, as Japan's exports have received a boost from public spending in China and other countries, while Prime Minister Taro Aso's record stimulus spending on tax incentives and cash handouts helped consumer sentiment advance to a 10-month high in April. Even as overseas demand shows signs of stabilizing, exports and factory output have fallen by more than a third since the global financial crisis deepened in September, putting pressure on companies to cut jobs and investments.

Technical Analysis

EUR/USD

It appears that the pair has resumed its bullish activity, as it's testing the 1.4100 level. Currently, a bullish cross on the daily chart's Slow Stochastic is suggesting that the uptrend could go farther. Going long might be the preferable choice today.

GBP/USD

After completing a 500 pips bullish move, it seems that the cable has reached a very strong resistant level placed around 1.6350. However, the MACD on the 4-hour chart continues to deliver bullish signals, and if the resistant level will be breached, a sharp upward movement could take place.

USD/JPY

After failing to breach the 99.00 level, the pair has lost its bullish momentum and is currently traded around the 97.50 level. The daily chart's RSI has dropped below the 70 line, signing that the bearish move might be extended. Going short could be the right choice today.

USD/CHF

There is a very accurate bearish channel formed on the daily chart, as the pair is now floating in its upper section. In addition, a bearish cross on the 4-hour chart's MACD suggests that the bearish momentum has more steam in it, with the potential of reaching the 1.0600 level.

Wild Card

Gold

After 3 days of relatively peaceful trading, it appears that today could signal new volatility in gold trading. As a bullish cross is taking place on both the 4-hour chart's MACD and the daily chart's Slow Stochastic, it seems that a bullish move is imminent. This might be a great opportunity for forex traders to enter the trend at a very early stage.

Market Trend

	EUR/USD	GBP/USD	USD/JPY	USD/CHF	AUD/USD	EUR/GBP
Daily Trend
Weekly Trend
Resistance	1.4185	1.3435	98.70	1.0861	0.8160	0.7835
	1.4164	1.6403	98.39	1.0834	0.8132	0.8702
	1.4130	1.6370	98.04	1.0807	0.8099	0.8670
Support	1.4054	1.6285	97.21	1.0722	0.8023	0.8597
	1.4021	1.6250	96.88	1.0689	0.7986	0.8563
	1.3995	1.6224	96.57	1.0655	0.7951	0.8536

Indicators

Date	Time GMT	$€£¥	Event	Period	Prev.	Forecast	Imp
2009-06-10		EUR	Buba President Weber Speaks		*	*
		Buba President Weber Speaks Due to deliver a speech titled "Reflections on the Financial Crisis" at the Cass Business School, in London;
2009-06-10	00:30	AUD	Westpac Consumer Sentiment		-4.3%	*
		Westpac Consumer Sentiment An index based on a survey of consumers. The index indicates optimism when above 100, below this mark indicates consumer pessimism.
2009-06-10	01:30	AUD	Home Loans	m/m	4.8%	1.6%
		Home Loans This report measures the number of commitments for owner occupied home financing. A bettern than expected result has a positive impact on the local currency because large purchases are usually made by consumers that are confident in their financial position.
2009-06-10	06:00	EUR	German Final CPI	m/m	-0.1%	-0.1%
		German Final CPI The German Final Consumer Price Indicator measures the change in price of goods and services purchased by consumers. Frequency Released monthly, about 15 days after the month ends; FF Notes The 'Previous' listed is the 'Actual' from the Preliminary release and therefore the 'History' data will appear unconnected. There are two versions of CPI released about 15 days apart - Preliminary and Final. The Preliminary release is the earliest and thus tends to have the most impact; Acronyms Consumer Price Index (CPI);
2009-06-10	06:45	EUR	French Industrial Production	m/m	-1.7%	-0.3%
		French Industrial Production This is a report which measures the total value of output produced by factories, mines, and utilities in France. A rising trend has a positive effect on the EUR because high levels of production are a sign of a healthy economy.
2009-06-10	08:00	EUR	Italian Industrial Production	m/m	-4.5%	0.3%
		Italian Industrial Production This indicator provides a general measure for the value of all output produced by factories, mines, and utilities in Italy.
2009-06-10	08:30	GBP	Manufacturing Production m/m	m/m	0.2%	-0.1%
		Manufacturing Production m/m Measures the total value of output produced by manufacturers. Manufacturing Production differs from Industrial Production in that it only measures the 13 sub-sectors of production that relate directly to manufacturing. Manufacturing industries make up about 80% of total Industrial Production.
2009-06-10	08:30	GBP	Trade Balance		-6.6B	-6.4B
		Trade Balance This report measures the difference between imported and exported goods and services. A positive number indicates the country is exporting more goods than it is importing. A country with a growing positive trade balance may see their currency strengthen as a result.
2009-06-10	08:30	GBP	Industrial Production	m/m	-0.6%	-0.1%
		Industrial Production This report measures the change in the total inflation adjusted value of output produced by manufacturers, mines, and utilities. When the actual result is higher than forecasted, it tends to have a positive impact on the local currency.
2009-06-10	12:30	CAD	Trade Balance		1.1B	0.9B
		Trade Balance This report measures the difference between imported and exported goods and services. A positive number indicates the country is exporting more goods than it is importing. A country with a growing positive trade balance may see their currency strengthen as a result.
2009-06-10	12:30	CAD	NHPI		-0.5%	-0.3%
		NHPI This is a report which measure the change in the selling price of new homes. It's a leading indicator of the housing industry's health because rising house prices attract investors and spur industry activity;
2009-06-10	12:30	USD	Trade Balance		-27.6B	-28.8B
		Trade Balance This report measures the difference between imported and exported goods and services. A positive number indicates the country is exporting more goods than it is importing. A country with a growing positive trade balance may see their currency strengthen as a result.
2009-06-10	14:00	USD	FOMC Member Lacker Speaks		*	*
		FOMC Member Lacker Speaks Due to speak about financial conditions and economic outlook at the Maryland Bankers Association, in Linthicum. Audience questions expected;
2009-06-10	14:30	USD	Crude Oil Inventories		2.9M	0.1M
		Crude Oil Inventories This report measures the change in the number of barrels of Crude Oil held in inventory on a week-by-week basis. It is also called Crude Oil Stocks.
2009-06-10	16:15	USD	FOMC Member Duke Speaks		*	*
		FOMC Member Duke Speaks Federal Open Market Committee member Elizabeth Duke is due to speak today. As a leader of the central bank she can instantly influence the currency markets with her speeches and off hand remarks on the future of U.S. monetary policy.
2009-06-10	18:00	USD	Beige Book		*	*
		Beige Book The Beige Book is one of 3 books used by the Federal Reserve Board when making interest rate decisions. It is the only book viewable by the public and includes anecdotal information provided by regional banks which gives a general guideline for monetary policy decisions.
2009-06-10	18:00	USD	Federal Budget Balance		-20.9B	-178.0B
		Federal Budget Balance This is a report which measures the difference in value between the federal government's income and spending during the previous month.
2009-06-10	20:20	GBP	MPC Member Sentance Speaks		*	*
		MPC Member Sentance Speaks Bank of England Monetary Policy Committee member Andrew Sentance will deliver a speech today. A member of the MPC can instantly influence the currency markets with his speeches and off hand remarks on the future of British monetary policy.
2009-06-10	21:00	NZD	Official Cash Rate		2.50%	2.50%
		Official Cash Rate Measured value of interest rate at which banks lend balances to other banks. Interest Rates are a key component in currency valuation.
2009-06-10	21:00	NZD	RBNZ Press Conference		*	*
		RBNZ Press Conference The press conference is held by the Reserve Bank of New Zealand (RBNZ) and is about 30 minutes long. The conference is open to press questions. Unexpected questions sometimes lead to unscripted answers that seldom create heavy market volatility.
2009-06-10	21:00	NZD	RBNZ Rate Statement		*	*
		RBNZ Rate Statement The Reserve Bank of New Zealand (RBNZ) releases this statement in connection to its recent decision on short-term interest rates. Interest rates are a primary determinant of a currency's value and these statements are used by traders to determine future monetary policy decisions.
2009-06-10	21:00	NZD	RBNZ Monetary Policy Statement		*	*
		RBNZ Monetary Policy Statement The RBNZ is issued regarding the recent decision on interest rates and is required to include all details on how the bank will achieve its inflation targets and how it intends on achieving its recent monetary policy decisions.
2009-06-10	23:01	GBP	NIESR GDP Estimate		-1.5%	*
		NIESR GDP Estimate The National Institute of Economic and Social Research (NIESR) Gross Domestic Product (GDP) Estimate is a prediction for the past month's official GDP using statistical projection techniques.
2009-06-10	23:50	JPY	Final GDP	q/q	-4.0%	-4.0%
		Final GDP This report is the primary measure for the change in the value of all goods and services produced by an economy. It is a leading indicator of economic health.
2009-06-10	23:50	JPY	Final GDP Price Index	y/y	1.1%	1.1%
		Final GDP Price Index This index is the final measure for the change in the value of all goods and services included in the country's GDP.