Forex Tips & Daily Analysis

Dollar Lower on Mixed Data.

The Dollar remained lower against higher yielding currencies today, after mixed economic data published yesterday. Crude Oil prices remained mainly unchanged on concerns of Chinese monetary policy tightening which might dampen the country's demand for commodities.

Economical News

USD

The Dollar weakened slightly against the EUR yesterday after the release of mixed U.S. data and better than expected Chinese data. First time unemployment claims fell to a seasonally adjusted 462K, down from a revised 468K in the prior week; however, the result was higher than the expected 456K. Also released Thursday, the U.S. trade deficit shrank to $37.29 billion from $39.90 billion in December. Analysts had anticipated a slight increase.

The Dollar index which measures the U.S. unit against a trade-weighted basket of six major currencies rose to 80.542 after the data, up from 80.484 late Wednesday.

Looking ahead to today, traders are advised to follow the release of the Retail Sales at 13:30 GMT and the Prelim UoM Consumer Sentiment at 14:55 GMT. If the results are better than expected we might see a stronger Dollar going into next week.

EUR

The EUR gained versus the Dollar on signs Greece's deficit crisis has been contained. The EUR received a slight boost today from a better than expected Trade Deficit data. However, the EUR declined as investors learned the decline was due to a drop in both imports and exports. By late afternoon in New York, the EUR had strengthened to $1.3685 from $1.3651 late Wednesday and was at 123.88 Yen from 123.59 Yen.

The U.K. Pound strengthened versus the Dollar Thursday after the Bank of England's quarterly inflation expectations survey showed the public expects annual inflation of 2.5%, up from 2.4% in the previous survey. The report helped boost the Pound slightly as it boosted investors' expectations the BoE will start tightening monetary policy sooner that expected. The Pound pushed back above the $1.50 level to $1.5063 recently, up from $1.4964 late Wednesday.

While the major news today is expected from the U.S, investors should pay attention to the release of Euro-Zone Industrial Production data, due to be released at 10:00 GMT. Better than expected result may help strengthen the EUR further.

JPY

The Yen declined against 15 of its 16 major counterparts as U.S. stock gained and concerns over Greek debt eased, dampening demand for the safe heaven currency. The Yen is down ahead of the Bank of Japan's Policy meeting next week on speculation the Bank of Japan will monetary easing steps as the world's second-largest economy struggles with deflation. The Yen dropped to 124.09 per EUR from 123.82 in New York yesterday. Japan's currency traded at 90.69 per dollar from 90.51.

Technical Analysis

EUR/USD

The pair has experienced a period of consolidation over the past three weeks, As such; the daily chart shows a triangle pattern has formed. The price has moved back up to the 1.3700 price level, approaching a significant downward sloping trend line that began on December 3rd. Traders may want to go short when the price arrives at the trend line. Selling near a downward sloping trend line is can be an excellent entry point into the market.

GBP/USD

The 4-hour chart presents a good selling opportunity. The price has failed to break the significant downward sloping trend line that began at the swing high on January 19th. The chart's Slow Stochastic Oscillator shows a bearish cross has formed, indicating at a potential downward price movement. Aggressive traders may want to enter short now, while those that are more conservative may want to wait for 7-day RSI to breach below the 70 mark to provide further support of a downward price move.

USD/JPY

The recent upward correction the pair has made over the past 7 days may be coming to an end. The daily chart shows some technical resistance to the price move, so traders may want to begin to scale back any long positions they may have. The 7-day Relative Strength Indicator has breached below the 70 mark, indicating a sell signal. The price of the pair could rise until 91.25 and then reverse back down in the direction of the long term trend.

USD/CHF

The downward price trend for the pair is showing little technical resistance on the daily chart. The currency is trading well below the 10-day simple moving average and the 10-day Momentum indicator shows a steady downtrend. Traders may want to stay short on the pair until the support line of 1.0610.

Wild Card

EUR/JPY

Yesterday the pair made a modest correction to the upward sloping price trend that began on February 25th. The price failed to breach this trend line, indicating the uptrend is still intact. The 7-day RSI has also maintained its rising trend line and continues to move higher. The pair could rise to its short term resistance level of 0.9150. Forex traders may want to be long on this pair as a breach of this price could propel the pair to its next resistance level of 0.9410.

Market Trend

	EUR/USD	GBP/USD	USD/JPY	USD/CHF	AUD/USD	EUR/GBP
Daily Trend
Weekly Trend
Resistance	1.3784	1.5158	91.52	1.0769	0.9225	0.9158
	1.3750	1.5126	91.21	1.0736	0.9202	0.9133
	1.3722	1.5095	90.90	1.0705	0.9181	0.9111
Support	1.3660	1.5035	90.29	1.0643	0.9139	0.9070
	1.3631	1.5004	89.98	1.0612	0.9118	0.9049
	1.3597	1.4962	89.63	1.0581	0.9097	0.9028

Indicators

Date	Time GMT	$€£¥	Event	Period	Prev.	Forecast	Imp
2010-03-12	04:30	JPY	Revised Industrial Production	y/y	2.5%	2.5%
		Revised Industrial Production This report measures the change in the value of manufacturing output from mines and utilities, after being adjusted for inflation. It acts as a leading indicator of economic health.
2010-03-12	07:00	EUR	German WPI	m/m	1.3%	0.6%
		German WPI The Wholesale Price Index (WPI) measures the inflation rate incurred by wholesalers. It is published monthly and acts as a decent indicator of wholesale price inflation.
2010-03-12	10:00	EUR	Industrial Production	m/m	-1.6%	0.8%
		Industrial Production This report measures the change in the total inflation adjusted value of output produced by manufacturers, mines, and utilities. When the actual result is higher than forecasted, it tends to have a positive impact on the local currency.
2010-03-12	10:00	GBP	MPC Member Dale Speaks		*	*
		MPC Member Dale Speaks The BOE MPC Member and Chief Economist Spencer Dale is due to testify on the MPC appointment. BOE MPC members vote on where to set the nation's key interest rates and their public engagements are often used to drop subtle clues regarding future monetary policy.
2010-03-12	10:15	EUR	Buba President Weber Speaks		*	*
		Buba President Weber Speaks Due to deliver a speech titled "Reflections on the Financial Crisis" at the Cass Business School, in London;
2010-03-12	12:00	CAD	Employment Change		43.0K	17.5K
		Employment Change This report measures the number of jobs created during the previous month. It is one of the most important indicators of the economy's health since individual consumption makes up a significant portion of a country's GDP and has a direct correlation with employment.
2010-03-12	12:00	CAD	Unemployment Rate		8.3%	8.3%
		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.
2010-03-12	13:30	USD	NZD Core Retail Sales	m/m	0.6%	0.1%
		NZD Core Retail Sales Measures the change in the total value of sales at the retail level, excluding automobiles.
2010-03-12	13:30	USD	Retail Sales	m/m	0.5%	-0.1%
		Retail Sales This report is a measure of the change in the total value of retail sales. Positive figures indicate economic growth.
2010-03-12	14:55	USD	Prelim UoM Consumer Sentiment		73.6	74.0
		Prelim UoM Consumer Sentiment The University of Michigan (UoM) releases this report which acts as a primary gauge of consumer sentiment regarding the economic and financial conditions of busines. Financial data such as this acts as a leading indicator of consumer spending, which plays a paramount role in GDP.
2010-03-12	14:55	USD	Prelim UoM Inflation Expectations		2.7%	-
		Prelim UoM Inflation Expectations This indicator is a preliminary measure which tracks the percentage that consumers are expecting to pay for goods and services during the next 12 months. It is an early inflationary measure. Inflation expectations can often transform into real inflation due to the fact that consumers and producers price in these expectations.
2010-03-12	15:00	USD	Business Inventories	m/m	-0.2%	0.2%
		Business Inventories This figure measures the amount of inventory in stock at various businesses. As inventories become depleted, businesses are more likely to increase spending in the next business cycle.
2010-03-12	17:00	USD	Treasury Sec Geithner Speaks		*	*
		Treasury Sec Geithner Speaks Treasury Secretary Timothy Geithner is due to speak today. His speeches can carry an impact on the market for dollars so traders must prepared.
2010-03-12	20:45	EUR	ECB President Trichet Speaks		*	*
		ECB President Trichet Speaks Due to testify before the Committee on Economic and Monetary Affairs of the European Parliament, in Brussels;