Forex Tips & Daily Analysis

Economical News

USD

Yesterday, the greenback saw bullish trends against most of its major counterparts following positive economic news from the U.S. The EUR\USD was traded as low as 1.5620. The USD was also bullish against the rest of the major currencies. The greenback's daily momentum was driven by the better than forecasted Core Durable Goods Orders and general Durable Goods Orders, as both beat forecasts by at least 1%.

The USD's bullish trend yesterday quickly developed after the news announcements regarding the Durable Goods Orders. Experts predicted the results to be worse than last month, but in both cases the actual results beat forecasts and in the Durable Goods Orders, the result was actually better than last month's result. The other main factor that led to the incline in the greenback's value was the fall of the Crude Oil's price, which breached under the $127 range. As the American economy is greatly affected by the Crude Oil's price, the latest decline in the price of Crude Oil has finally taken some pressure off the USD.

Today will be a very active trading day for the USD, as there are a lot of news announcements expected from the U.S. The first major economic news event will be the Preliminary Quarterly GDP for the 1st quarter, which is expected to rise by 0.3% from last quarter's result. Traders should be aware of the increase in Unemployment Claims expected to be announced as well. Crude Oil Inventories and the Natural Gas Storage announcements are not expected to cause a major impact on the USD as there are both inflationary and growth implications to the results. In the evening the greenback's volatility should increase even more as both Fed Chairman Bernanke and Fed Vice Chairman Kohn will hold speeches in different events and times.

As there are many news announcements expected today, the USD's trading will be very active and volatile. Results are expected to be mixed, as it seems that the main positive announcements will be the Preliminary Quarterly GDP which should give the USD momentum. The wild card will be Bernanke and Kohn's speeches which will determine the USD's trend.

EUR

The Euro finished yesterday's trading session with mixed results. The EUR lost to the USD and GBP, but it seems like this occurred mostly because of those currencies' bullishness and not the EUR's bearishness. On the other hand, the EUR gained versus the JPY and the CHF. The EUR's success versus some of its rivals resulted from the better than expected German CPI and German Import Price. Not only were both German results forecasted to be better than before, they actually beat the positive expectations by 0.3%. However, it seems like lately the EUR has been the Crude Oil's biggest ally and as the Crude Oil's price dropped yesterday, the EUR was negatively affected as well.

The main news announcements expected today from the Euro-Zone are the German Unemployment Change and the M3 Money Supply. As Germany's economy affects the EUR greatly, the Unemployment Change forecasted seems positive and should cause the EUR to see some bullish momentum; The M3 Money Supply is not expected to change from the previous result and shouldn't cause much change in the EUR value. There will be many news releases from the Japanese, American and British economies and the EUR's trends against those currency rivals should be affected mostly by those respective currencies.

It might seem like a good trading day for the EUR based on forecasts for news results from the Euro-Zone; however, positive news releases are also expected from other currencies and some of those rival news releases might have a major impact on the final trends of the EUR.

JPY

The Japanese Yen fell yesterday versus the major currencies. The JPY saw bearish momentum because of its rivals' positive news releases and its own worse than expected news releases. The Retail Sales and Large Retailers' Sales actual results were lower than the previous results and were even lower than the negative forecasts

Today, the JPY's value versus other currency pairs will be affected by their respective trends until 11:15 GMT. During this hour, there will be many news announcements that should affect the Yen. The major releases will be the Core CPI, Industrial Production and Unemployment Rate. Forecasts of these releases are expecting mixed results and it is unclear how the Yen will react.

Trader should keep close attention to the JPY during the news filled late night hours. Positive results should help the JPY get out of its recent drought; however negative results will lead to a continuation in its bearish momentum.

Technical Analysis

EUR/USD

The 1 hour chart is showing a stable and consistent downtrend corrective movement that shows no signs of stopping any time soon. The RSI is floating near the 50 level pointing to the continuation of the bearish movement. There is also a very distinct pattern forming on the 4 hour Slow Stochastic chart in the shape of a triple top with negative slope, indicating some bearish movement today. Going short with tight stops might be the right way to go today.

GBP/USD

The bearish price movement continues at full steam within the bearish channel which still has yet to be breached on the hourlies. The Slow Stochastic is showing a negative slope on the daily chart, and it appears that the bearish trend will continue. Going short might be a very wise choice today.

USD/JPY

The 4 hour chart is showing moderate bullish momentum as the Slow Stochastic shows no crosses and is floating around the 50 level. The range trading on the hourlies is forming into a narrowing bullish channel. The pair is approaching the upper level of it, and with the very tight Bollinger Bands, the possible test of the 105.50 appears to be quite imminent. Traders must pay attention for a possible breach which could create a great sell signal.

USD/CHF

The corrective bullish momentum created by the breach through the channel on the 4 hour chart appears to be continuing. The Slow Stochastic of the 4 hour chart is showing a positive slope, and the RSI is floating near the 60 level, which indicates that the pair still has more room to run. The first target price might be 1.0474.

Wild Card

Gold

Gold broke the 900.00 support level. Gold is in a downtrend supported by the 1 Hour Exponential Moving Average. Bollinger Bands are widened indicating increased volatility. We should expect to see a bearish configuration today. The target is expected to hit 890. This provides forex traders with an opportunity to go short on a relatively healthy downtrend

Market Trend

	EUR/USD	GBP/USD	USD/JPY	USD/CHF	AUD/USD	EUR/GBP
Daily Trend
Weekly Trend
Resistance	1.5680	1.9800	105.90	1.0520	0.9690	0.7990
	1.5660	1.9780	105.70	1.0500	0.9670	0.7970
	1.5630	1.9750	105.40	1.0470	0.9640	0.7940
Support	1.5550	1.9670	104.60	1.0390	0.9560	0.7870
	1.5520	1.9640	104.30	1.0360	0.9630	0.7840
	1.5500	1.9620	104.10	1.0340	0.9610	0.7820

Indicators

Date	Time GMT	$€£¥	Event	Period	Prev.	Forecast	Imp
2008-05-29	01:00	USD	Dallas Fed President Fisher Speaks		-	-
		Dallas Fed President Fisher Speaks Dallas Federal Reserve President and FOMC voting member Richard Fisher will speak about the Federal Reserve and the US economy, in Midland. FOMC voting members are responsible for setting the nation's short term interest rate, so traders scrutinize their speeches closely for clues regarding future monetary policy.
2008-05-29	01:30	AUD	Private New Capital Expenditure	q/q	7.3%	3.1%
		Private New Capital Expenditure Measures the total amount of new capital expenditures by private businesses. A rising trend has a positive effect on the nation's currency because high levels of business investment are a sign of a strong economy.
2008-05-29	06:00	GBP	Nationwide House Prices	m/m	-0.9%	-0.5%
		Nationwide House Prices Measures the monthly change in the average price for a house in the UK. It serves as a leading inflation indicator for the housing market.
2008-05-29	07:15	CHF	Employment Level		3.88M	3.89M
		Employment Level Measures the change in the number of employed people during the previous quarter. Job creation is an important leading indicator of overall economic health because consumer spending is highly correlated with labor conditions.
2008-05-29	07:55	EUR	German Unemployment Change	m/m	-7.0K	-25.0K
		German Unemployment Change Measures the change in the number of unemployed people actively seeking employment during the previous month. Although it's generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor conditions.
2008-05-29	08:00	EUR	M3 Money Supply	y/y	10.3%	10.3%
		M3 Money Supply Measures the annual change in currency outstanding. Higher levels of currency can have a devaluing effect on the currency.
2008-05-29	09:00	EUR	Consumer Confidence		-12	-12
		Consumer Confidence Measures the mood of consumers in regard to economic conditions. The reading is derived from a monthly survey that asks respondents to evaluate the prospects for the economy in the future. GfK, a leading German market research company, publishes this indicator monthly. Higher readings point to higher consumer optimism. When consumers are optimistic they tend to purchase more goods and services, which stimulates the economy.
2008-05-29	10:00	GBP	CBI Distributive Trades Realized		-26	-25
		CBI Distributive Trades Realized The Confederation of British Industry (CBI) Distributive Trades Realized Survey measures the health of the retail sector by asking executives if their firm experienced an increase or decrease in sales compared to a year ago. A positive number indicates that more retailers reported an increase. A rising trend has a positive effect on the nation's currency because Retail Sales make up a large portion of consumer spending, which is a major driver of the economy.
2008-05-29	12:30	USD	Prelim GDP	q/q	0.6%	0.9%
		Prelim GDP Measures the annualized change in the value of all goods and services produced by the economy. It's the broadest measure of economic activity and the primary gauge of the economy's health
2008-05-29	12:30	USD	Prelim GDP Price Index	q/q	2.6%	2.6%
		Prelim GDP Price Index Measures the annualized change in the price of all goods and services implied by GDP. It's the broadest measure of inflation, encompassing all activities included in GDP, and is one of the primary instruments the central bank uses to assess inflation.
2008-05-29	12:30	USD	Unemployment Claims		365K	370K
		Unemployment Claims Measures the number of individuals who filed for unemployment insurance for the first time during the past week. A falling trend has a positive effect on the nation's currency because working people tend to spend more money, and consumer spending makes up a large portion of GDP. This weekly indicator produces very timely data, but traders generally view unemployment as a lagging indicator that gives little indication of the economy’s future performance.
2008-05-29	12:30	CAD	Current Account		-0.5B	2.8B
		Current Account Measures the quarterly difference in value between imported and exported goods, services, income flows, and unilateral transfers. A rising trend has a positive effect on the nation's currency. The Current Account is a comprehensive accounting of the nation's trade with other countries. It includes the previously reported Trade Balance (which covers trade of goods and services), so traders focus on the income flows and unilateral transfer portions of the report.
2008-05-29	14:30	USD	Crude Oil Inventories		-5.4M	-0.3M
		Crude Oil Inventories The Energy Information Administration's (EIA) Crude Oil Inventories measures the weekly increase in barrels of commercial crude oil held in inventory by US firms. The level of inventories influences the price of petroleum products, which can have an impact on inflation and other economic forces.
2008-05-29	14:30	USD	Natural Gas Storage		85B	84B
		Natural Gas Storage Measures Change in the number of cubic feet of natural gas held in underground storage during the past week; Usual Effect No clear effect, there are both inflationary and growth implications; Frequency Released weekly, 5 days after the week ends; FF Notes While this is a US indicator, it most affects the loonie due to Canada's massive oil sands; Acronyms Energy Information Administration (EIA); Also Called Nat Gas Stocks, Nat Gas Inventories; Why Traders Care It influences the price of petroleum products which affects inflation, but also impacts growth as many industries rely on oil to produce goods;
2008-05-29	18:30	USD	Fed Chairman Bernanke Speaks		-	-
		Fed Chairman Bernanke Speaks Federal Reserve Chairman Ben Bernanke will speaks at the Charlotte Chamber of Commerce annualy meeting where he will recieve an award and talk about the regional economy. As head of the Federal Open Market Committee (FOMC), which is responsible for setting the nation's short term interest rate, Ben Bernanke is arguably the most influential figure in the currency markets. Bernanke is known to drop clues during his speeches, as it is the FOMC's tenet to keep the public aware of their monetary policy long before interest rates are changes. Heavy market volatility is often experienced during Bernanke's speeches as traders attempt to decipher his clues.
2008-05-29	22:45	NZD	Building Consents	m/m	-9.1%	-2.3%
		Building Consents Measures the change in the number of new construction intentions. This data is a leading indicator for the construction industry since the issuance of a building permit is one of the first steps in the construction process.
2008-05-29	23:00	USD	Fed Vice Chairman Kohn Speaks		-	-
		Fed Vice Chairman Kohn Speaks Federal Reserve Vice Chairman and FOMC voting member Donald Kohn will speak about the economic outlook at the National Conference on Public Employee Retirement Systems Annual Conference, in New Orleans. FOMC voting members are responsible for setting the nation's short term interest rate, so traders scrutinize their speeches closely for clues regarding future monetary policy.
2008-05-29	23:01	GBP	Consumer Confidence		-24	-25
		Consumer Confidence Measures the mood of consumers in regard to economic conditions. The reading is derived from a monthly survey that asks respondents to evaluate the prospects for the economy in the future. GfK, a leading German market research company, publishes this indicator monthly. Higher readings point to higher consumer optimism. When consumers are optimistic they tend to purchase more goods and services, which stimulates the economy.
2008-05-29	23:15	JPY	Manufacturing PMI		48.6	-
		Manufacturing PMI The Manufacturing Purchasing Manager's Index (PMI) measures the activity level of purchasing managers in the manufacturing sector, with a reading above 50 indicating expansion. A rising trend has a positive effect on the nation's currency. To produce the index, purchasing managers are surveyed on a number of subjects including employment, production, new orders, supplier deliveries, and inventories. Traders watch these surveys closely because purchasing managers, by virtue of their jobs, have early access to data about their company’s performance, which can be a leading indicator of overall economic performance.
2008-05-29	23:30	JPY	Core CPI	y/y	1.2%	1.0%
		Core CPI Derivative of the Consumer Price Index (CPI) that excludes the volatile Food, Energy, Alcohol and Tobacco items. CPI with the exclusion of these volatile components is thought to be a better indicator of the underlying inflation trend and the central bank uses it as their primary inflation gauge, aiming to keep it at an annualized rate of 2%.
2008-05-29	23:30	JPY	Core Tokyo CPI	y/y	0.7%	0.9%
		Core Tokyo CPI Derivative of the Tokyo Consumer Price Index (CPI) that excludes the Fresh Food items. Fresh Food purchases can be volatile from month to month and can distort the overall picture, so CPI with the exclusion of this volatile component is thought to be a better indicator of the underlying inflation trend.
2008-05-29	23:30	JPY	Overall Household Spending	y/y	-1.6%	-0.7%
		Overall Household Spending Measures the total amount spent by households on goods and services. A rising trend has a positive effect on the nation's currency because consumer spending is a major driver of the economy, accounting for about half of GDP.
2008-05-29	23:30	JPY	Unemployment Rate		3.8%	3.9%
		Unemployment Rate Measures the percentage of the total work force that is unemployed and actively seeking employment. A falling trend has a positive effect on the nation's currency. Working people tend to spend more, and consumer spending is a major driver of the economy. However, unemployment usually draws little attention because traders view it as a lagging indicator.
2008-05-29	23:50	JPY	Industrial Production	m/m	-3.4%	-0.5%
		Industrial Production Measures the total value of output produced by factories, mines, and utilities. A rising trend has a positive effect on the nation's currency because high levels of production are a sign of a strong economy. Industrial Production reacts quickly to the ups and downs of the business cycle and can be a leading indicator of manufacturing employment, average earnings, and personal income. Traders pay special attention to Industrial Production because it's one of the few growth indicators that is produced directly by the Federal Reserve.