Forex Tips & Daily Analysis

Economical News

USD

The greenback started to show it's first signals of bullishness yesterday after the release of the US Unemployment Claims which came out better then expected at 309K after analysts were waiting for a figure around 315K. The US Wholesale Inventories was released a bit later with a better then expected figure of 0.3%. The two news releases caused the USD to gain some strength against all majors and pushed the EUR/USD down to 1.3420 and the USD/CHF to 1.2265. The JPY's local strengthening yesterday prevented the positive US news from taking the USD/JPY up, and the pair went down and broke the 121.00 barrier. It was not only good news for the US market yesterday as the Consumer Credit came out weaker then expected at 2.6B dropping from a previous figure of 6.0B.

As for today, traders will be standing by for the release of the US Trade Balance, which is expected to be released at -63.5 which is a slightly improved figure from last month's -63.9. If the Trade Balance will come out better then expected, we should probably see a further positive move for the USD and it might end the week at level it has not seen for a few months now.

EUR

The Bank of England kept the interest rate unchanged at 5.5% yesterday and together with relatively strong US news the GBP/USD made a nose dive into the 1.9750 levels.

The negative notion might continue today as there are several news events expected to come from Europe today. The UK Industrial Production is expected to be released (9:30 GMT) at a slightly lower 0.2% from last months' 0.3%. This might take the GBP further down if indeed the release will be inline with expectations. The UK Manufacturing Production is also due at 9:30 GMT and is widely expected to drop from 0.6% to a very low 0.3%. A bit later at 11:00 GMT the German Industrial Production is expected to be released and rise from negative territory of -0.1% to 0.4. The massive move might spur some local positive momentum into the EUR price movement.

JPY

The JPY strengthened all across the board yesterday driven by the strong sell-off in US stocks. However earlier today the Japanese currency fell sharply posting strong losses against high-yielding currencies as rising global interest rates encouraged Japanese investors to buy more foreign assets while dumping the low yielding yen. Tired of low interest rates at home, Japanese individual investors have been snapping up assets abroad, helping push down the yen against the high-yielding Australian dollar, New Zealand dollar and sterling. The currencies surged against the yen after New Zealand's Reserve Bank boosted interest rates to a record 8 percent and a government report showed Australia's employment increased four times as much as expected in May.

The yen received another blow from a weaker-than-expected reading in Japanese machinery orders data raised concern that corporate capital spending may lose steam in the months ahead. Japan's core machinery orders, a highly volatile figure regarded as a leading gauge of capital spending, rose 2.2 percent in April from the previous month, government data showed on Friday. That was below forecasts for a 4.5 percent increase. Today we should see the JPY stay on the bear wagon after the negative news release.

Technical Analysis

EUR/USD

After the last trading day the volatility regarding the EUR USD decreased and we expect that the EUR USD will continue to be traded in the range of 1.3423 to 1.3530.

In general it seems that the EUR USD is in a downtrend directed by the 1H exponential moving averages. 1H, 4H Elliott pattern imply that this currency pair will continue to gather momentum and the price action will be bearish.

GBP/USD

On the 4 H chart, a rising wedge (bearish) is forming which may imply a continuation of the bearish trend and it's recommended to time the entrance to the market with short term charts, 1.9755 seems like a strong entry point. At the moment GPB USD is being traded around 1.9800 to 1.9700 range.Volatility is low and we should expect to see the bearish pressure on the GBP continue today.

USD/JPY

This currency pair is in an uptrend supported by 1H exponential moving averages. The volatility is low. Bollinger bands are tightened. We should expect to also see today a bullish configuration. 1H, 4H Elliott pattern imply that the USD JPY will continue to gather momentum. The target is expected at 121.60

USD/CHF

The USDCHF is in a bearish configuration. The volatility has decreased. The USD CHF moves without trend and swings around exponential moving averages (EMA 50 and 100). Bollinger bands are tightened. 1H, 4H Elliott pattern imply bullish pressure. The expected target is 1.2210.

Wild Card

EUR/GBP

After the last trading day forex traders should be aware since volatility regarding the EURGBP has decreased and we expect that the EUR GBP will continue to be traded in the range of 0.6750 to 0.6820.

Market Trend

	EUR/USD	GBP/USD	USD/JPY	USD/CHF	AUD/USD	EUR/GBP
Daily Trend
Weekly Trend
Resistance	1.3490	1.9855	121.90	1.2317	0.8500	0.6880
	1.3469	1.9838	121.65	1.2300	0.8487	0.6833
	1.3448	1.9810	121.47	1.2282	0.8460	0.6804
Support	1.3410	1.9752	120.70	1.2230	0.8372	0.6760
	1.3390	1.9730	120.52	1.2204	0.8358	0.6735
	1.3370	1.9705	120.30	1.2189	0.8332	0.6712

Indicators

Date	Time GMT	$€£¥	Event	Period	Prev.	Forecast	Imp
06/08/07	9:30	GBP	Industrial Production	m/m	0.3%	0.2%
06/08/07	9:30	GBP	Manufacturing Production	m/m	0.6%	0.2%
06/08/07	11:00	EUR	Composite Leading Indicators	m/m	109.7
06/08/07	12:00	CAD	Employment Change		-5.2K	16.0K
06/08/07	12:00	CAD	Unemployment Rate		6.1%	6.1%
06/08/07	13:15	CAD	Housing Starts		212K	215K
06/08/07	13:30	USD	Trade Balance		-63.9B	-63.5B
06/08/07	13:30	CAD	Trade Balance		4.6B	4.9B