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USD

Yesterday was an extremely bullish day for the greenback. The EUR\USD depreciated from 1.5824, down to 1.5584. The USD\JPY rose from 104.65, up to 106.31.

The main reason for the USD's rising trends was the hawkish speech delivered by New York Federal Reserve President Geithner last Tuesday. Geithner said that he would never take intervention or any other policy tool off the table, raising the chances that officials might step into the foreign exchange market to support the USD.

Furthermore, Pending Home Sales, an index of future home sales, rose unexpectedly in April by 6.3%, to the highest level since October 2007. This index is considered to be a leading indicator because it is based on contract signings that usually lead to actual sale closings one or two months after. To conclude the day, Federal Reserve Chairman Bernanke gave a speech, saying that not only does the 5.5% unemployment rate for May not signal the start of a recession, but the risk of one has actually dwindled. The questions surrounding whether the economy has entered a substantial downturn appears to have diminished over the past month or so.

On tap today, the U.S Trade Balance is scheduled at 12:30 GMT. The Trade Balance measures the difference in value between imported and exported goods and services, and is expected to show a deficit of $59.5 Billion, an increase from March's deficit of $58.2 Billion. Such an outcome should generate a bearish inclination for the USD.

Also today, both Dallas Fed President Fisher and Fed Governor Mishkin will deliver speeches, and clues regarding future monetary policy are expected.

Traders should take advantage of today and open new positions on USD pairs, as the market is expected to fluctuate greatly.

Yesterday was an extremely bullish day for the greenback. The EUR\USD depreciated from 1.5824, down to 1.5584. The USD\JPY rose from 104.65, up to 106.31.

The main reason for the USD's rising trends was the hawkish speech delivered by New York Federal Reserve President Geithner last Tuesday. Geithner said that he would never take intervention or any other policy tool off the table, raising the chances that officials might step into the foreign exchange market to support the USD.

Furthermore, Pending Home Sales, an index of future home sales, rose unexpectedly in April by 6.3%, to the highest level since October 2007. This index is considered to be a leading indicator because it is based on contract signings that usually lead to actual sale closings one or two months after. To conclude the day, Federal Reserve Chairman Bernanke gave a speech, saying that not only does the 5.5% unemployment rate for May not signal the start of a recession, but the risk of one has actually dwindled. The questions surrounding whether the economy has entered a substantial downturn appears to have diminished over the past month or so.

On tap today, the U.S Trade Balance is scheduled at 12:30 GMT. The Trade Balance measures the difference in value between imported and exported goods and services, and is expected to show a deficit of $59.5 Billion, an increase from March's deficit of $58.2 Billion. Such an outcome should generate a bearish inclination for the USD.

Also today, both Dallas Fed President Fisher and Fed Governor Mishkin will deliver speeches, and clues regarding future monetary policy are expected.

Traders should take advantage of today and open new positions on USD pairs, as the market is expected to fluctuate greatly.

EUR

The EUR saw mixed results yesterday. The EUR\USD and the EUR\GBP underwent coherent bearish trends; however, the EUR\JPY showed great bullishness.

Yesterday, the German Trade Balance report demonstrated an 18.7B surplus for April, higher than March's 16.6B mark. The Sentix Investor confidence report, which measures investor confidence towards the Euro-zone, rose by 5.2 points from the previous mark last month. Also yesterday, European Central Bank President Jean-Claude Trichet delivered a speech, saying that a rate rise in July is not certain but is still very possible.

Today, a bundle of data is scheduled for the Euro-zone. The German Wholesale Price Index, which measures the rate of inflation experienced at the wholesale level, was expected to remain at 0.6%, but saw a substantial bump in the early morning of the European session to 1.4%. French Industrial Production is forecasted by analysts to rise by 0.3%, which should generate bullish behavior for the EUR, considering last month's 0.8% decrease. Also today, Italian Industrial Production is predicted to show a 0.2% decrease from last month, yet it should not have a large impact on the EUR.

Traders are also advised to follow the USD's developments carefully, as they could be crucial for mapping the EUR's direction today.

JPY

Yesterday, the JPY underwent bearish trends against most of its major currency counterparts. The JPY saw falling trends against the USD, the EUR, the GBP and the CHF.

Yesterday, Japan's Leading Index showed a rise to 92.8% in the month of April; however it missed market expectations to rise to 93.6%. The Japanese Economy Watchers Current Index, which measures the current mood of business that directly service consumers, fell to 32.1, after last month's 35.5 reading. Also, Japan's Core Machinery Orders rose by 5.5% in April from March, to 1.0 Trillion Yen. Machinery Orders rose 0.5% in April from the same period last year after falling 6.2% in March.

Today, a batch of data is expected for the Japanese economy. First, the Machine Tool Orders, which measures the total value of new orders placed with machine tool manufacturers, was released to a 1% rise to 1.4% for April. Later on in the day, at 23:50 GMT, 4 indicators will be published. The most vital one is Japan's Final quarterly GDP mark, which measures the change in the value of all goods and services produced by the economy. Analysts forecast it to rise by 0.9%. The other indicators are the Corporate Goods Price Index, the Current Account, and the Final GDP Price Index, yet they should have lesser influence over the JPY.

Traders should follow today's news with extra caution as they should generate higher volatility than usual for the JPY.

Technical Analysis

EUR/USD

The pair is in the middle of a bearish corrective move which seems to have some more steam in it. It looks as if there isn't any bullish sentiment to indicate even the slightest corrective move, and the bearish steam appears to be blowing at full strength. It appears that going short still looks like the right choice today.

GBP/USD

The Hourlies and the daily chart are showing that the pair does not have a distinct direction. The 4 hour chart indicates that the moderate bearish correction continues within the wide bearish channel which still has yet to be breached. The daily chart RSI is floating near the 50 level and the Slow Stochastic also does not deliver any specific signs. Forex traders are advised to wait for a clearer signs on the hourlies before entering the market.

USD/JPY

There is a very accurate narrowing bullish channel on the daily chart, as the pair now floats near the bottom barrier of it. The Slow Stochastic on the hourlies and the dailies is indicating that the chances of a bearish breach are quite slim and that the bullish momentum still has steam in it. A failed bearish breach through the 107.00 level will probably unleash a fresh bullish move.

USD/CHF

The hourlies and the daily charts show that the pair continues to float without a distinct trend. The flat channel continues on the daily chart while no significant breach has been seen yet. However, the 4 hour chart is showing fresh bullish momentum, and a possible corrective move towards 1.0400. Waiting for a clearer sign before entering the market might be the smart move today.

Wild Card

GOLD

There has been a strong breach through the bottom barrier of the channel which is forming on the daily chart. The 4 hour chart is showing that the bearish move has completed a full bar beyond the barrier, and the downtrend is now accumulating steam. The momentum is bearish again as indicated by all oscillators. Forex traders have a great chance of swing into what appears to be a very strong technical pattern. The next target price might be 888.00.

Market Trend

	EUR/USD	GBP/USD	USD/JPY	USD/CHF	AUD/USD	EUR/GBP
Daily Trend
Weekly Trend
Resistance	1.5700	1.9748	107.98	1.0412	0.9554	0.8018
	1.5665	1.9715	107.47	1.0366	0.9531	0.7989
	1.5620	1.9675	107.10	1.0336	0.9505	0.7965
Support	1.5530	1.9605	106.16	1.0287	0.9451	0.7905
	1.5500	1.9588	105.74	1.0254	0.9420	0.7877
	1.5473	1.9553	105.46	1.0215	0.9392	0.7841

Indicators

Date	Time GMT	$€£¥	Event	Period	Prev.	Forecast	Imp
2008-06-10	01:30	AUD	Home Loans	m/m	-5.7%	-2.0%
		Home Loans Measures the number of commitments for owner occupied home financing. A rising trend has a positive effect on the nation's currency because large purchases tend to be made by consumers that are optimistic and confident in their financial position. Additionally, consumer borrowing has a high degree of historical correlation with consumer spending, which is a major driver of the overall economy.
2008-06-10	01:30	AUD	NAB Business Confidence		-8	*
		NAB Business Confidence National Australia Bank (NAB) Business Confidence measures the mood of domestic firms in non-farm sectors. The indicator is derived from a survey of around 350 small to large sized companies.
2008-06-10	06:00	JPY	Machine Tool Orders	y/y	0.4%	*
		Machine Tool Orders Measures the total value of new orders placed with machine tool manufacturers. A rising trend has a positive effect on the nation's currency. When manufacturers increase their purchasing of machine tools it signals that the manufacturing industry is in an expansion phase.
2008-06-10	06:00	EUR	German WPI	m/m	0.6%	0.6%
		German WPI The Wholesale Price Index (WPI) measures the rate of inflation experienced at the wholesale level. The reading represents the monthly change in the average price of a fixed basket of goods and services purchased at the wholesale level.
2008-06-10	06:45	EUR	French Industrial Production	m/m	-0.8%	0.3%
		French 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.
2008-06-10	08:00	EUR	Italian Industrial Production	m/m	-0.2%	-0.2%
		Italian 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.
2008-06-10	08:30	GBP	Industrial Production	m/m	-0.5%	0.0%
		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.
2008-06-10	08:30	GBP	DCLG House Price Index	y/y	5.2%	3.4%
		DCLG House Price Index Measures annual inflation in the housing market. The Department for Communities and Local Government (DCLG) bases this monthly index on about 25,000 completions supplied by a cross-section of mortgage lenders.
2008-06-10	08:30	GBP	Manufacturing Production m/m	m/m	-0.5%	0.0%
2008-06-10	10:00	CHF	SNB Board Member Jordan Speaks		*	*
		SNB Board Member Jordan Speaks Swiss National Bank (SNB) Governing Board Member Thomas Jordan will deliver a speech titled "Monetary Policy in a Climate of Increased Uncertainty," in Geneva
2008-06-10	11:00	GBP	BOE Governor King Speaks		*	*
		BOE Governor King Speaks Bank of England (BOE) Governor Mervyn King will testify before the Treasury Select Committee regarding his reappointment as Governor. As head of the central bank's governing body, which is responsible for setting the nation's short term interest rate, his speeches can sometimes cause market volatility as traders react to clues regarding future monetary policy.
2008-06-10	12:00	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.
2008-06-10	12:15	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.
2008-06-10	12:30	CAD	Trade Balance		5.5B	5.7B
		Trade Balance Measures the difference in value between imported and exported goods and services. A positive Trade Balance indicates that more goods and services were exported than imported over a given period. A rising trend has a positive effect on the nation's currency. When higher levels of exports are sold to the world, demand for the nation's currency is elevated as foreigners convert their native currency to purchase the exports. The Trade Balance also has a sizable impact on GDP because high demand for exports creates increased employment and production, as domestic factories work to fill this demand.
2008-06-10	12:30	USD	Trade Balance		-58.2B	-59.5
		Trade Balance Measures the difference in value between imported and exported goods and services. A positive Trade Balance indicates that more goods and services were exported than imported over a given period. A rising trend has a positive effect on the nation's currency. When higher levels of exports are sold to the world, demand for the nation's currency is elevated as foreigners convert their native currency to purchase the exports. The Trade Balance also has a sizable impact on GDP because high demand for exports creates increased employment and production, as domestic factories work to fill this demand.
2008-06-10	13:00	CAD	BOC Rate Statement		*	*
		BOC Rate Statement It's the primary tool the Bank of Canada uses to communicate with investors about monetary policy. It contains the outcome of their decision on interest rates and commentary about the economic conditions that influenced their decision. Most importantly, it projects the economic outlook and offers clues on the outcome of future rate decisions.
2008-06-10	13:00	CAD	Overnight Rate		3.00%	2.75%
		Overnight Rate Measures the interest rate at which major financial institutions borrow and lend overnight funds among themselves. Short term interest rates are the paramount factor in currency valuation - traders look at most other indicators merely to predict how rates will change in the future.
2008-06-10	13:00	CAD	BOC Rate Statement		*	*
		BOC Rate Statement It's the primary tool the Bank of Canada uses to communicate with investors about monetary policy. It contains the outcome of their decision on interest rates and commentary about the economic conditions that influenced their decision. Most importantly, it projects the economic outlook and offers clues on the outcome of future rate decisions.
2008-06-10	14:00	USD	IBD/TIPP Economic Optimism		40.3	40.0
		IBD/TIPP Economic Optimism The Investor's Business Daily (IBD) TechnoMetrica Institute of Policy and Politics (TIPP) Economic Optimism Index measures the mood of consumers in regard to economic conditions. The reading is derived from a monthly survey where 900 nationwide adults evaluate their "six-month economic outlook," "personal financial outlook," and their "confidence in federal economic policies." Index readings above 50 indicate optimism; below 50 indicates pessimism. When consumers are optimistic they tend to purchase more goods and services, which stimulates the economy.
2008-06-10	16:15	USD	Fed Governor Kroszner Speaks		*	*
		Fed Governor Kroszner Speaks Federal Reserve Governor and FOMC voting member Randall Kroszner will deliver a speech titled "Addressing Challenges to Innovative Community Development Investment Activities" at the Community Reinvestment Fund Community Development Forum, in Minneapolis. Audience questions expected. 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.
2008-06-10	22:45	NZD	Merchandise Terms of Trade q/q		2.9%	1.0%
2008-06-10	23:01	GBP	NIESR GDP Estimate		0.4%	*
		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. NIESR is one of the UK's oldest independent economic research institutes and their estimates are widely reported in the press.
2008-06-10	23:50	JPY	Current Account		2.1T	1.8T
		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.
2008-06-10	23:50	JPY	Final GDP	q/q	0.8%	0.9%
		Final GDP Measures the 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.
2008-06-10	23:50	JPY	Final GDP Price Index	y/y	-1.4%	-1.4%
		Final GDP Price Index Measures the change in the price of all goods and services implied by GDP.