Forex Tips & Daily Analysis

U.S. Non-Farm Employment Change Data to Drive USD Volatility Today.

The forex market is expected to be extremely volatile today, as the U.S. releases the results of the Non-Farm Employment Change at 12:30 GMT. The EUR Minimum Bid Rate at 11:45 GMT and U.S. Unemployment Claims at 12:30 GMT are also expected to dominate trading for the USD, EUR, and GBP crosses. Traders are advised to enter the main currency pairs now in order to profit from risk appetite.

Economical News

USD

The Dollar index continued its decline yesterday, trading at 79.619, down from 80.179 late Wednesday. The drop followed the release of the ADP Non-Farm Employment Change which showed worse than expected results. The drop was exacerbated by China's request to discuss the issue of a new global currency at next week's G8 Summit in Italy.

Increased risk appetite has been dominating trading lately, despite much pessimistic

economic data. Recent bullishness in the stock markets helped fuel risk appetite among investors, putting further downward pressure on the Dollar. Worse than expected results no longer automatically push investors back to the safety of the Dollar, as risk tolerance remains high on positive equity prices. Furthermore, negative data from the U.S., along with an over-expanding budget deficit and inflation fears have caused concern over the greenback's long term prospects. As a result, this has

further dampened Dollar sentiment.

With several major news releases ahead of the July 4th weekend, including the U.S Non Farm Employment Change and Unemployment Rate due at 12:30 GMT, and the ECB Press Conference at the same time, Thursday is expected to be a volatile trading day which may intensify the current trends.

EUR

The EUR continued its advance against the USD yesterday, reaching its highest level in nearly a month. The European currency received an additional boost after the release of better than expected results from German Retail Sales. Since Germany is the largest economy in the Euro-Zone, it tends to have significant effects on EUR movements.

The EUR/USD pair hit as high as $1.4201 after the release of the U.S. ADP Non-Farm Employment Change report, which showed worse than expected results. However, the EUR/USD finished trading at 1.4115, whilst the USD/JPY pair finished trading at Y136.33 from Y135.82. The Pound Sterling was at $1.6464 from $1.6449.

Traders should pay close attention to the ECB Press Conference at 12:30 GMT as monetary policy and economic outlook will be discussed. Although the Interest Rate is expected to remain unchanged at 1%, the statement will provide insight to the Bank's new covered-bond purchase program, as well as the progress of the quantitative easing program. This will provide direction for the EUR by possibly extending its recent gains.

JPY

The Yen gained against the Dollar ahead of the release of the U.S Non Farm Employment Change and Unemployment Rate which may show that unemployment in the U.S rose to the highest level in 25 years. To a certain extent, this spurred demand for the safety of the JPY. Traders should be aware that the USD/JPY pair will be the main pair to watch today as data is released from the U.S.

The Japanese currency has been suffering recently due to increased optimism and risk appetite among investors, who traded the relatively safe JPY for higher yielding riskier currencies. Although risk tolerance remains high in the market, worse then expected results from the U.S and Euro-Zone may help extend the JPY's gains throughout the day.

Technical Analysis

EUR/USD

The EUR/USD pair experienced much bullishness in yesterday's trading, as it hit the 1.4200 mark. However, the pair has dropped since then, and the pair currently stands at 1.4120. The daily chart shows the pair trading in neutral territory. However, the chart's 4-hour Stochastic Slow and hourly MACD signal that this downward momentum may continue. Going short with tight stops could lead to big profits today.

GBP/USD

The cross finished yesterday's trading in neutral territory, and relatively unchanged at 1.6464. If you look at the daily chart's RSI, we can see that the pair is in the overbought territory, and a sharp downward move could occur anytime soon. Entering this trend at an early trade may turn out to pay off as Thursday's trading gets under way.

USD/JPY

The pair currently stands at the 96.60 level. It seems that USD/JPY's recent bearishness may be short lived, as the chart's 4-hour RSI indicates that there is still steam left in the pair. Additionally, the chart's daily Stochastic Slow signals that we may be facing an upward trend today. Going long with tight stops may be a wise choice today.

USD/CHF

The pair has experienced much volatility in recent days, range trading between the 1.0700 and the 1.0920 levels. The weekly chart's Slow Stochastic signal the pair will go bearish today. Whereas the hourly chart's MACD signals an upward trend to take place for the coming day. Entering the pair when the signals are clearer may turn out to be a wise choice today.

Wild Card

Crude Oil

Crude Oil has been hit badly in recent days, and currently stands at $69.20 a barrel. The daily chart's Stochastic Slow supports a further bearish move for the commodity in today's trading. This is also supported by the daily chart's MACD. Going short with tight stops may turn out to be the safe bet for forex traders today.

Market Trend

	EUR/USD	GBP/USD	USD/JPY	USD/CHF	AUD/USD	EUR/GBP
Daily Trend
Weekly Trend
Resistance	1.4230	1.6560	97.90	1.0900	0.8100	0.8640
	1.4190	1.6520	97.50	1.0860	0.8080	0.8620
	1.4150	1.6480	97.10	1.0820	0.8060	0.8600
Support	1.4070	1.6400	96.30	1.0740	0.8020	0.8560
	1.4030	1.6360	95.90	1.0700	0.8000	0.8540
	1.3990	1.6320	95.50	1.0660	0.7980	0.8520

Indicators

Date	Time GMT	$€£¥	Event	Period	Prev.	Forecast	Imp
2009-07-02	01:30	AUD	Trade Balance		-0.09B	-0.10B
		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.
2009-07-02	03:00	NZD	ANZ Commodity Prices	m/m	2.7%	-
		ANZ Commodity Prices The Australia and New Zealand Banking Group Limited (ANZ)Commodity Prices Indicator, also called the Commoditiy Price Index, measures the change in the price of exported commodities. Since Australia and New Zealand depend heavily upon commodity exports, this figure acts as a primary gauge of the two nations' GDP and economic strength.
2009-07-02	06:30	CHF	Gov Board Member Jordan Speaks		*	*
		Gov Board Member Jordan Speaks Swiss National Bank (SNB) Governing Council member Thomas Jordan is due to speak today. These speeches can impact the market as investors speculate about future monetary policy decisions.
2009-07-02	08:25	GBP	MPC Member Besley Speaks		*	*
		MPC Member Besley Speaks Bank of England (BoE) Monetary Policy Committee (MPC) Member Tim Besley is due to speak. These speeches typically carry an impact on markets as traders try to speculate about future monetary policy decisions.
2009-07-02	08:30	GBP	BOE Credit Conditions Survey		*	*
		BOE Credit Conditions Survey This is a report on lending to households, small businesses, non-financial corporations, and non-bank financial firms. It is a measure of general economic health in the small business sector of the economy.
2009-07-02	08:30	GBP	Construction PMI		45.9	-
		Construction PMI The Construction Purchasing Manager's Index (PMI) measures the level of activity among purchasing managers in the construction sector of the economy. Above 50 signals industry expansion; below 50 indicates a contraction. Construction figures are an important indicator of housing demand.
2009-07-02	08:30	GBP	MPC Member Miles Speaks		*	*
		MPC Member Miles Speaks The external BOE MPC (Bank of England Monetary Policy Member) Member David Miles oabouthis appointment as MPC member before the Treasury Select Committee in London, England
2009-07-02	09:00	CHF	SNB Quarterly Bulletin		*	*
		SNB Quarterly Bulletin The Swiss National Bank Quarterly Bulletin contains the monetary policy report and the economic situation from the board of governors. This report has tends to have a mild impact as much of the information has already been released to the market.
2009-07-02	09:00	EUR	PPI	m/m	-1.0%	0.1%
		PPI The Producer Price Index (PPI) is a measure of the inflation rate incurred by manufacturers when purchasing goods and services.
2009-07-02	09:00	EUR	Unemployment Rate		9.2%	9.3%
		Unemployment Rate This figure represents the percentage of potential workers that are currently unemployed and actively seeking a job. This report is typically overlooked as its information is derived from previously released indicators.
2009-07-02	11:45	EUR	Minimum Bid Rate		1.00%	1.00%
		Minimum Bid Rate The Minimum Bid Rate represents the recent interest rate decision made by the 6 member European Central Bank (ECB) board as well as the 16 central bank governors from each member of the Euro-Zone regional economy. Interest rates are a primary determinant in the value of a currency.
2009-07-02	12:30	EUR	ECB Press Conference		*	*
		ECB Press Conference The European Central Bank will be holding a conference on various economic and financial issues. These conferences typically generate higher trading volumes as traders speculate about future monetary policy decisions.
2009-07-02	12:30	USD	Non-Farm Employment Change		-345K	-375K
		Non-Farm Employment Change This report measures the change in the number of employed vs. unemployed persons in all sectors of the economy except the farming industry. It is a leading indicator of economic health.
2009-07-02	12:30	USD	Unemployment Rate		9.4%	9.6%
		Unemployment Rate This figure represents the percentage of potential workers that are currently unemployed and actively seeking a job. This report is typically overlooked as its information is derived from previously released indicators.
2009-07-02	12:30	USD	Average Hourly Earnings	m/m	0.1%	0.2%
		Average Hourly Earnings This indicator evaluates the level of inflation incurred by all sectors of the economy (excluding the farming industry) when paying wages to employees. It is a leading indicator of consumer spending because an increase to an employee's real salary signifies an increase to private consumption.
2009-07-02	12:30	USD	Unemployment Claims		627K	612K
		Unemployment Claims An indicator which measures the number of individuals who filed for unemployment insurance with the government for the first time during the past week. This is one of the earlier releases of economic data.
2009-07-02	14:00	USD	Factory Orders	m/m	0.7%	0.2%
		Factory Orders This indicator presents a measure of the value of new orders placed with domestic manufacturers for durable and non-durable goods. It typically has a small impact as the Durable Goods Orders indicator report already signified the primary results on this sector of the economy.
2009-07-02	14:30	USD	Natural Gas Storage		94B	74B
		Natural Gas Storage This figure measures the change in the number of cubic feet of natural gas held in storage by this country from week to week. It has a moderate impact on the price of fuels, but provides mixed results for investors.
2009-07-02	23:30	AUD	AIG Services Index		39.9	-
		AIG Services Index This indicator measures business conditions in a number of service sector companies. A number above 50.0 indicates industry expansion; below 50.0 signals a contraction. Survey is conducted by Australian Industry Group (AIG).