Forex Tips & Daily Analysis

Unemployment Claims in Focus Today.

The Forex market awaits crucial U.S. data today in the PPI and Unemployment Claims figures at 13:30 GMT. These publications are set to drive the pace of the forex market throughout the trading day. Forex traders are advised to open their USD positions now, prior to the release of the vital economic data from the leading economies.

Economical News

USD

The dollar rose against most of its major currency pairs yesterday, lifted by stronger-than-expected U.S. housing and industrial data, and as worries about Greece's fiscal health weighed on the EUR. By yesterday's close, the USD rose to a two-week high against the yen, pushing the oft-traded currency pair to 91.20. The dollar experienced similar behavior against the EUR and closed at 1.3600.

The dollar extended gains against the EUR and JPY after minutes from the Federal Reserve's January meeting showed policy makers saw a need to begin a program of assets sales in the near future and expect the economic recovery to continue. The optimistic tone bolstered investors' expectation that the Fed could increase interest rates sooner than previously thought.

USD trading will be interesting today as another batch of important economic data is expected to be released. Similar to yesterday, the news will start at 13:30 GMT with a series of economic indicators being released starting with PPI figures, unemployment claims and the Philly Fed Manufacturing Index. Surprisingly, almost all of these releases are expected to be higher than their previous figures meaning the USD could continue to show further bullishness today. Traders should stay close to the market today, as there is a strong chance to capitalize on the fluctuations which will likely follow these releases.

EUR

The EUR extended losses against most of its major currency on Wednesday and hit session lows, as bearish investor sentiment over Greece's public finances weighed on the single currency. After yesterday, the 16 nation currency fell sharply against the USD, pushing the oft-traded currency pair to 1.3600. The EUR also saw bearishness against the GBP and closed at 0.8675.

The EUR fell even after European finance ministers on Tuesday gave Greece a one-month reprieve, until March 16, to show its deficit reduction plan was being rolled out effectively. They set the same deadline for them to decide what should happen next.

The EUR has fallen almost 5% against the dollar since the start of the year on concerns about Greece's fiscal health and that of other euro zone peripheral countries. Currency speculators raised net EUR short positions to a record high last week.

JPY

The Japanese Yen completed yesterday's trading session with mixed results versus the major currencies. The JPY fell against the USD yesterday, pushing the oft-traded currency pair to 91.20. The Yen experienced similar behavior against the GBP as the pair rose from 1.4195 to 1.4285 by day's end. The JPY did see some bullishness as well as it gained 100 points against the EUR and closed at 123.60.

The Japanese market should have a heavy effect on the JPY versus its major currency counterparts, as the Overnight Call Rate will be announced today. The rate is expected to remain unchanged but traders should pay close attention to the BoJ Press Conference that will follow to look for expectations of Japan's economic future. A bullish statement from the BoJ could lead some traders to believe the BoJ is forecasting a rosier financial climate in Japan.

Technical Analysis

EUR/USD

There is a very distinct bearish channel forming on the 4H chart, as the pair is now floating in its lower section. In addition, all oscillators on the daily chart are pointing down, suggesting that the downtrend might extend. Going short might be the right strategy today

GBP/USD

It seems that the Cable has limited its bullish correction after peaking at the 1.5790 level. And now, a bearish cross on the 4H chart's Slow Stochastic indicates that the general downtrend might extend. Going short seems to be the preferable choice today

USD/JPY

The hourly chart shows that the pair is currently range-trading within a restricted price range. However, as the RSI on the 4H chart has dropped beneath the 70 line, it appears that bearish momentum might be arising. Going short with tight stops could be the right choice today.

USD/CHF

Ever since bottoming at the 1.0650 level, the pair has entered a very strong bullish trend and is currently traded around the 1.0800 level. And now, a flag formation on the 4-hour chart suggests that the bullish move has more room to go

Wild Card

Gold

Gold prices are in the midst of a very strong downtrend, and an ounce of gold is currently traded for about $1100. The hourly chart shows that the current price has dropped beneath the Bollinger Bands' lower border, indicating that the bearish move is still quite strong. This might be a good opportunity for forex traders to join a very popular trend.

Market Trend

	EUR/USD	GBP/USD	USD/JPY	USD/CHF	AUD/USD	EUR/GBP
Daily Trend
Weekly Trend
Resistance	1.3790	1.5820	91.90	1.0930	0.9050	0.8744
	1.3740	1.5795	91.60	1.0865	0.9035	0.8730
	1.3695	1.5740	91.25	1.0830	0.9000	0.8700
Support	1.3580	1.5630	90.50	1.0750	0.8925	0.8655
	1.3530	1.5575	90.25	1.0715	0.8875	0.8630
	1.3425	1.5535	90.00	1.0675	0.8800	0.8592

Indicators

Date	Time GMT	$€£¥	Event	Period	Prev.	Forecast	Imp
2010-02-18		JPY	Monetary Policy Statement		*	*
		Monetary Policy Statement This is a statement released by the central bank to communicate decisions regarding interest rates and other monetary policies to investors and private consumers. It is usually accompanied with an interest rate decision by the central bank.
2010-02-18		JPY	Overnight Call Rate		0.10%	0.10%
		Overnight Call Rate The Overnight Call Rate is the short-term interest rate set by the Bank of Japan (BoJ) regarding the rate at which banks lend money from the central bank overnight.
2010-02-18	00:30	AUD	NAB Quarterly Business Confidence		16	*
		NAB Quarterly Business Confidence The National Australia Bank's (NAB) Business Confidence report measures the mood of domestic business in all sectors of the economy except the farming industry.
2010-02-18	07:15	CHF	Trade Balance		1.36B	1.79B
		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.
2010-02-18	07:22	JPY	BoJ Press Conference		*	*
		BoJ Press Conference This conference is one of the primary tools used by the Bank of Japan (BoJ) to communicate with investors about monetary policy decisions. It typically creates high volatility to JPY pairs and crosses during the conference itself as it provides clues into the state of the economy from the perspective of the central bank.
2010-02-18	09:30	GBP	Public Sector Net Borrowing		15.7B	-2.4B
		Public Sector Net Borrowing This indicator is a measure of the difference between spending and income for government and other public corporations. It has a strong correlation with GDP and government spending.
2010-02-18	09:30	GBP	Prelim M4 Money Supply	m/m	-0.9%	0.6%
		Prelim M4 Money Supply This indicator is a general measure for the change of the quantity of domestic currency in circulation, deposited in banks. It has a strong correlation with economic growth.
2010-02-18	10:00	CHF	ZEW Economic Expectations		56.2	*
		ZEW Economic Expectations This report measures the level of diffusion index based on surveyed institutional investors and analysts. Above 0.0 tends to strenghen the local currency, and below 0.0 tends to weaken it.
2010-02-18	11:00	GBP	CBI Industrial Order Expectations		-39	-35
		CBI Industrial Order Expectations Level of a diffusion index based on surveyed manufacturers;
2010-02-18	12:00	CAD	Core CPI	m/m	-0.3%	0.1%
		Core CPI Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate. Also Named: Bank of Canada Core CPI, CPI Ex Volatile Items
2010-02-18	12:00	CAD	CPI	m/m	-0.3%	0.3%
		CPI The Consumer Price Index (CPI) is a measure of the change in the price of goods and services purchased by consumers. It is a gauge for inflation.
2010-02-18	13:30	CAD	Foreign Securities Purchases		10.54B	7.21B
		Foreign Securities Purchases This report is a measure of the month-by-month value of debt, domestic securities,and assets purchased by foreigners. It is a leading indicator of foreign investment in domestic securities.
2010-02-18	13:30	USD	PPI	m/m	0.4%	0.8%
		PPI The Producer Price Index (PPI) is a measure of the inflation rate incurred by manufacturers when purchasing goods and services.
2010-02-18	13:30	USD	Unemployment Claims		440K	440K
		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.
2010-02-18	13:30	USD	Core PPI	m/m	0.0%	0.2%
		Core PPI Derivative of the Producer Price Index (PPI) that excludes the Food and Energy items. Although Food and Energy can be very volatile from month to month, they play an important role in pass-through inflation. Therefore Core PPI usually has less impact than the overall PPI.
2010-02-18	15:00	USD	Philly Fed Manufacturing Index		15.2	17.2
		Philly Fed Manufacturing Index Level of a diffusion index based on surveyed manufacturers in Philadelphia.
2010-02-18	15:00	USD	CB Leading Index	m/m	1.1%	0.6%
		CB Leading Index This index measures consumer confidence based on a number of leading economic indicators. Its impact is usually very low as these indicators are released individually at another time.
2010-02-18	15:30	USD	Natural Gas Storage		-191B	-185B
		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.
2010-02-18	15:30	CAD	BoC Review		*	*
		BoC Review This report includes articles related to the economy and central banking, written by analysts from the Department of Monetary and Financial Analysis about general economic health and the conditions of the Canadian financial sector.
2010-02-18	16:00	USD	Crude Oil Inventories		2.4M	1.5M
		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.
2010-02-18	19:00	GBP	MPC Member Fisher Speaks		*	*
		MPC Member Fisher Speaks BOE Executive Director Paul Fisher is due to testify on his appointment hearing at the Treasury Committee Meeting, in London.
2010-02-18	22:30	AUD	RBA Governor Stevens Speaks		*	*
		RBA Governor Stevens Speaks Reserve Bank of Australia (RBA) Governor Glenn Stevens will deliver a speech titled "Asia, Australia and Financial Markets" at the Asia Society AustralAsia Centre CEO Asia Update luncheon, in Sydney. 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.
2010-02-18	23:00	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.