Month: July 2009

By Fast Brokers – The EUR/USD is logging sizable losses today after BP and U.S. Steel issued disappointing earnings releases.  The EUR/USD has dropped beneath our 2nd and 3rd tier downtrend lines on moderate volume.  Both commodity-related earnings releases worry investors that production and consumption may not be picking up as much as analysts hoped.  The most disconcerting is U.S. Steel’s cautious outlook for Q3, denting projected near-term aggregate demand and consumption.  Also weighing on the EUR/USD is a weaker than expected CB consumer confidence number from the U.S.  Since the EU has no data on the table today, the EUR/USD is taking its cue from U.S. equities.  Therefore, the EUR/USD has little positive immediate-term catalysts to rely on.

Despite today’s weakness, the EUR/USD remains comfortably above 7/23 lows and our 1st and 2nd tier uptrend lines.  Additionally, the EUR/USD hasn’t experienced any abnormally high volume on the sell-side so far today.  Therefore, the currency pair’s present uptrend is intact.  The EUR/USD is finding strength in yesterday’s GfK Consumer Confidence number coming in well above analyst expectations, continuing its upward trend while highlighting a more optimistic European consumer.  The consumer confidence number adds onto Friday’s better than expected PMI data points, helping counterbalance the negative pricing and production numbers from earlier last week.  The EU also released its M3 money supply on Monday.  Though the headline number came in line with analyst expectations, the money supply continues its downward trajectory.  This means that the ECB will be less inclined to begin tightening its monetary policy any time in the near future.  However, the decline in the M3 money supply could be slowing down, creating the possibility of a new base.

On another encouraging note, the bond spreads between EU countries are narrowing, indicating that uncertainty is abating concerning the near-term stability of the troublesome economies of Ireland and Greece.  If the weaker economies of the EU region can continue to stabilize, this could have a positive near to medium-term impact on the Euro.  Improvement within the smaller economies of the EU could also indicate that Eastern European economies may begin to notice signs of improvement as well.  This would be a key development for the Euro since shortcomings in Eastern Europe have inflicted damage on EU banks exposed via high risk loans.  Therefore, the medium-term picture is gradually improving for the EUR/USD.

Regardless of the medium-term picture, the EUR/USD should continue to take its immediate-term cue from U.S. equities.  Hence, investors should keep a close eye on the S&P future to monitor their ability to hold together above our 2nd tier uptrend line.  Meanwhile, the EUR/USD still has July 23rd lows and our uptrend lines to rely on.  As for the upside, the EUR/USD must face our 2nd and 3rd tier downtrend lines along with the lid constructed from 7/21-7/28 highs.

Present Price: 1.4178

Resistances: 1.4183, 1.4197, 1.4215, 1.4234, 1.4250

Supports: 1.4157, 1.4142, 1.4117, 1.4094, 1.4078

Psychological: 1.40

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Fast Brokers – The Cable is gaining back some earlier losses, bouncing off of our 2nd tier uptrend line after being rejected by our 3rd tier downtrend line once more.  However, the Pound is experiencing some relative strength despite the weaker than expected realized sales data from the CBI.  Today’s CBI number caught us a bit off guard since retail sales came in better than expected last week.  At least the CBI reading logged a slight improvement from last week’s release.  The Cable is under immediate-term downward pressure along with the EUR/USD as investors react negatively to the mixed 2nd quarter earnings and economic data from today.  The S&P futures are halting their precipitous rise as the mixed news gives investors an excuse to take some profits from last week’s run.  The Cable is following U.S. equities lower due to their positive correlation.  However, the GBP/USD’s uptrend is intact as is the EUR/USD’s.  The Cable remains above our 2nd tier uptrend line with 7/27 lows and our 1st tier uptrend line ready to defend should they be called upon.  Furthermore, the GBP/USD hasn’t experienced any heighted activity on the sell-side thus far today, so investors should keep an eye on volume.

Despite today’s resilience in the Cable, Friday’s much weaker than expected GDP from Britain spooked Cable investors a bit, negating progress made by higher retail sales and mortgage approvals data.  However, sentiment concerning the GBP/USD could improve as the week progresses since Britain should continue to show positive progress in unemployment and pricing.  Therefore, the discouraging GDP figure could be brushed aside for the time being.   Upside movements in the Cable could be limited with the S&P futures approaching their highly psychological 1000 level.  It’s interesting that neither the GBP/USD nor the EUR/USD participated in Thursday’s key breakout to the upside in U.S. equities.  The Cable’s lack of correlation could indicate an immediate-term downward tendency, and it may take a 1000+ S&P for the GBP/USD to crack June highs.  Hence, with 1000 looming overhead and the S&P surging 11% last week, U.S. equities may have overheated.  If this is the case, the Cable would likely follow a pullback in the S&P.

Britain will release net lending data tomorrow, and investors will look to see if banks are letting more liquidity flow to small businesses and individuals.  Altogether, the GBP/USD’s uptrend is healthy despite today’s setback.  Unfortunately for the bulls, the Cable’s battle with the psychological 1.65 area lives to see another day.  The GBP/USD should continue to log limited gains until 1.65 and our 3rd tier downtrend line are overcome.

Present Price: 1.6439

Resistances: 1.6441, 1.6467, 1.6500, 1.6542, 1.6555

Supports: 1.6405, 1.6372, 1.6347, 1.6324, 1.6301

Psychological: 1.65

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Fast Brokers – The USD/JPY is deflecting from our 2nd tier downtrend line as it gradually reaches an inflection point with our 1st tier uptrend line.  The currency pair is following U.S. equities lower with investors locking in profits after today’s mixed earnings and economic data releases.  The USD/JPY is logging moderate losses after the currency pair gave bulls hope by bouncing off of our 1st tier uptrend line.  Meanwhile, we still haven’t seen a real commitment to the upside with volume on a steady decline since July lows.  It seems the USD/JPY has little independent strength, and its stabilization/recovery depends largely upon the uptrend in U.S. equities.  Japanese economic data provides little evidence supporting a sustainable recovery in the country’s manufacturing/export sectors.  Hence, the S&P’s ability to gather itself after profit taking and make a move for 1000 could be key for the USD/JPY in piecing together a noteworthy rally of its own.  Meanwhile, the USD/JPY has a few cushions to the downside, including 7/23 lows and our 1st tier downtrend line.  As for the upside, the USD/JPY needs to overcome our 2nd tier downtrend line and leave the psychological 95 area behind before even considering a move towards our 3rd tier downtrend line.

Present Price: 94.76

Resistances: 94.99, 95.73, 96.33, 96.77, 97.20

Supports:  94.49, 93.82, 93.28, 92.90, 92.39

Psychological: 95

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By CountingPips.com

U.S. home prices increased in May for the first time in almost three years according to the Standard & Poors/Case-Shiller index released today.  The house price report for the month of May showed that the index increased by 0.5 percent from April to May after a 0.6 percent decrease the month prior.  This marks the first monthly increase in the index since July 2006.  The Standard & Poor’s/Case-Shiller Home Price Index measures sale prices of existing single-family homes nationally and tracks 10-city and 20-city composite home price measurements.

On an annual basis, the 20-city composite index fell an annual rate of 17.1 percent while the 10-city composite index declined by 16.8 percent when compared to May of last year. May marked the fourth straight month that the index had improved after sixteen straight months of record declines.

The areas that had the best results on a monthly basis were Cleveland with a 4.1 percent gain, Dallas with a 1.9 percent rise and Boston with a 1.6 percent increase.  Las Vegas had the worst month of the measured areas with a 2.6 percent decrease.

David M. Blitzer, Chairman of the Index Committee at S & P, commented in the report saying, “Looking at the monthly data, 13 of the 20 metro areas reported positive returns; and the 10-City and 20-City Composites reported positive returns for the first time since the summer of 2006. To put it in perspective, these are the first time we have seen broad increases in home prices in 34 months. This could be an indication that home price declines are finally stabilizing.”

U.S. Consumer Confidence dips in July.

U.S. Consumer Confidence fell for the second month in a row according to the Conference Board Consumer Confidence Index released today. The consumer index, representing responses from 5,000 U.S. households, showed that consumer confidence decreased to a 46.6 score this month following a revised 49.3 score in June. The 2.7 point decrease was worse than market forecasts that were expecting consumer confidence to register a 49.0 score for the month.

The other two parts of the survey also saw decreases in July.  The present situation section of the index fell to 23.4 from 25.0 in April while the expectations index declined from 65.5 in June to 62.0 this month.

Lynn Franco, the Director of The Conference Board Consumer Research Center commented in the report on the decreased readings, “Consumer confidence, which had rebounded strongly in late spring, has faded in the last two months. The decline in the Present Situation Index was caused primarily by a worsening job market, as the percent of consumers claiming jobs are hard to get rose sharply. The decline in the Expectations Index was more the result of an increase in the proportion of consumers expecting no change in business and labor market conditions, as opposed to an increase in the percent of consumers expecting conditions to deteriorate further. However, more consumers are pessimistic about their income expectations, which does not bode well for spending in the months ahead.”

Forex – U.S. dollar gains in Forex Trading today.

The U.S. dollar has been trading higher in forex trading today against the major currencies.  The dollar has gained versus the euro, British pound, Canadian dollar and Swiss franc while showing a loss versus the Japanese yen and New Zealand dollar.

The euro has fallen versus the USD as the EUR/USD trades at 1.4158 in the afternoon of the US trading session at 12:13pm EST after opening the day at 1.4242 according to currency data from Oanda. The British pound has also fallen as the GBP/USD has gone from its 1.6488 opening rate to trading later at 1.6419.

The dollar has declined against the Japanese yen today as the USD/JPY has decreased from its 95.04 opening to trading at 94.20.

The dollar has gained against the Canadian dollar after opening at 1.0810 earlier today to trading at 1.0876 later. Meanwhile, the USD has also advanced against the Swiss franc as the USD/CHF has gone from 1.0702 to trading at 1.0760.

The Australian dollar is trading almost unchanged versus the USD as the AUD/USD trades at 0.8251 after opening today at 0.8248 while the New Zealand dollar has  increased just slightly versus the USD as the NZD/USD trades at 0.6576 after opening the day’s trading at 0.6564.

USD/CAD Chart – The US Dollar gains today versus the Canadian Dollar in Forex Trading and the USD/CAD trades right at the 100-hour moving average (red).

By GCI Fx Research

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The euro appreciated modestly vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4305 level and was supported around the $1.4220 level.  Traders are awaiting the release of Q2 U.S. gross domestic product data on Friday and next week’s July non-farm payrolls report.  Recent U.S. economic data – including housing data – have been on the upswing and dealers are curious to determine if the improving U.S. data are coincident with a U.S. labour market that has already bottomed out.  Data released in the U.S. today saw the May S&P/ Case-Shiller home price index was off 17.06% y/y, an improvement from the revised April print of -18.10%.  Also, July consumer confidence fell to 46.6 from 49.3 in June while the the July Richmond Fed manufacturing index printed at 14, up from 6 in June.  Another indication that the global credit crunch continues to thaw is a narrowing of the LIBOR-OIS spread, a measure of banks’ reluctance to lend.  The spread fell below 30 bps for the first time in eighteen months and is now at its lowest level since January 2003, far below the 364 bps level from 10 October 2008 when Lehman Brothers was failing as a viable financial institution.  Effectively, the spread measures the premium banks charge over what traders are predicting the Federal Reserve’s effective federal funds rate will average over the following three months.  Prior to the beginning of the credit crunch in August 2007, the spread average about 11 bps in the five years leading up to the credit market dislocations.  In eurozone news, the Centre for Economic Policy Research and Bank of Italy released their EuroCoin indicator today and it improved for the fifth consecutive month, lifting to -0.42 in July – the highest level since August.  These data evidence an improvement in industrial production.  CEPR also reported the economic recession bottomed out in the first quarter of the year when GD was off 2.5% q/q and 4.8% y/y.  Notably, EMU-16 industrial production was up 0.5% m/m in May, the first improvement since August 2008, while the annual measure fell 17.0%, the smallest pullback since January 2009.  Euro bids are cited around the US$ 1.3900 figure.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥94.40 level and was capped around the ¥95.25 level.  The U.S. dollar onslaught continued as the greenback fell to its lowest level this year relative to six major currencies.  The yen has also been on the defensive recently as improving equity markets have directed investment capital out of Japan and into higher-yielding international assets.  The yen, however, shook off equities-supportive news that Deutsche Bank’s net income rose to €1.09 billion from €649 million one year ago.  Japanese exporters have been repatriating overseas assets recently as the yen has declined and the end of the month is near.  The Nikkei 225 stock index lost 0.01% to close at ¥10,087.26.  U.S. dollar offers are cited around the ¥104.15 level.  The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥134.30 level and was capped around the ¥135.95 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥155.60 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥88.20 level. In Chinese news, the U.S. dollar gained ground vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8315 in the over-the-counter market, up from CNY 6.8283.  The Chinese government yesterday called on the U.S. government to maintain a stable value of the U.S. dollar to protect China’s massive holdings of U.S. government bonds.  Chinese finance minister Zhu reported “The Chinese government is responsible, and our responsibility is to the Chinese people. Of course, we are concerned about the safety of dollar assets.” People’s Bank of China today reported consumer prices are starting to stabilize and added inflation could reach bottom by the end of this quarter, also noting that economic growth was stronger in the second quarter than expected at an annualized 14.9% rate.

₤

The British pound climbed marginally vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.6555 level and was supported around the $1.6455 level.  Positive data were released by CBI today that noted the July monthly distributive trades retail sales balance improved to -15 from -17 in June.  These data could suggest the worst of the retail slump has passed in the U.K. although economists note final private demand remains weak.  Cable bids are cited around the US$ 1.6260 level.  The euro moved lower vis-à-vis the British pound as the single currency tested bids around the ₤0.8620 level and was capped around the ₤0.8645 level.

CHF

The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.0655 level and was capped around the CHF 1.0715 level.  Data released in Switzerland today saw the June UBS consumption indicator improve to 0.96 in June from a revised 0.75 in May.  These data suggest final private demand is improving despite rising unemployment. Recent data have revealed manufacturing weakened at its slowest pace in eight months in June and leading economic indicators recently improved for the second consecutive month.  Germany is also benefiting from an improvement in German business confidence that reached a nine-month high this month.  U.S. dollar offers are cited around the CHF 1.0910 level.  The euro came off vis-à-vis the Swiss franc as the common currency tested bids around the CHF 1.5220 level while the British pound fell vis-à-vis the Swiss franc as sterling tested bids around the CHF 1.7600 figure.

Daily Market Commentary provided by GCI Financial Ltd.

GCI Financial Ltd (”GCI”) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (”Forex”) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (”CFDs”) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.

DISCLAIMER: GCI’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.

By Adam Hewison – Today I’m going to be looking into why weekly charts are so important in the Forex market.

I will use the EUR/USD as the example and deeply investigate the buy signal we received on this cross on Monday, July 27th. Although it’s too early to tell if this signal will be profitable, it is certainly a signal you must take if you are a disciplined follower of MarketClub’s “Trade Triangle” technology.

You can watch this video with my compliments and there is no registration requirements.

See the New Video Here…

All the best,

Adam Hewison
President, INO.com
Co-Creator, MarketClub

Source: ForexYard

The U.S dollar remained weak against its major currencies in range-bound trade on Monday as U.S. equity markets remained in negative territory, indicating waning desire among investors for riskier assets. Also Monday, U.S. and Chinese officials began meeting for two days of economic talks, though many analysts questioned whether anything substantial would emerge. Nevertheless, traders will be on alert for any commentary regarding the U.S. dollar’s status as a reserve currency. China is the biggest foreign investor in U.S. government debt, and any decline in demand could push up borrowing costs.

Economic News

USD – Dollar Goes Volatile on Optimistic Homes Sales Data

The U.S. Dollar experienced an extremely volatile trading day on Monday, as the New Home Sales data was released from the U.S. economy. The result was a better-than-forecast 384,000 homes versus the previous release of 346,000 homes. This is a whopping 11% increase, the biggest monthly increase since December 2000. This led to many analysts stating that this is the end of the U.S. housing slump. The result led to volatile USD trading. Moreover, the Dollar closed lower against some of its main currency pairs, due to optimistic data from regions such as the Euro-Zone.

At one point in trading the USD actually reached a 7-week low vs. the EUR at 1.4299. This was following the extremely optimistic German consumer confidence figures. However, the pair finally closed 33 pips higher at the 1.4246 level. The USD recorded its second daily loss in a row of 30 pips against the British Pound, as the GBP/USD finished trading at the 1.6484 level. This comes about as optimistic data from Britain continues to drive up the British currency. The USD/JPY pair finished higher, to close at the 95.17 rate. This comes about as the Yen falls from higher risk appetite.

Looking ahead to today, forex traders can expect plenty of news coming out of the U.S. The most important of this being the CB Consumer Confidence figures at 14:00 GMT, the speech by Federal Reserve Chairman Ben Bernanke at 22:00 GMT, and the speech by Treasury Secretary Timothy Geithner from 23:00 GMT. These 3 events are set to determine the level of the Dollar as Tuesday’s trading takes off. The big 3 pairs to watch today are the EUR/USD, GBP/USD, and USD/JPY, as traders anticipate a weaker U.S. currency as the U.S. economy continues to recover.

EUR – EUR Boosted by German Consumer Confidence Figures

The EUR hit a 7-week high versus the USD in Monday’s trading, following the Gfk German Consumer Climate figures. The result showed a 14 month high 3.5, significantly higher than the forecasted 2.9. This helped the EUR strengthen throughout Monday’s trading. The reason why this data is so significant is due to Germany being the largest economy in the Euro-Zone. The EUR also was helped as U.S. New Home Sales jumped 11%. The EUR is likely to continue benefiting from the optimistic economic news.

The EUR/USD cross hit 1.4299, before closing 33 pips higher at the 1.4246 level. However, the European currency fell by 15 pips vs. the British Pound to 0.8635. This may be due to investors buying-up Pounds as risk appetite increases with more and more signs of global economic recovery. The EUR/JPY pair climbed by over 35 pips to the 1.3532 level, as traders continued to ditch the JPY due to preferring riskier assets, such as the EUR and GBP. Therefore, overall, the EUR did make some reasonable gains in Monday’s trading.

Today, we won’t be expecting much economic news coming out of the Euro-Zone. However, Britain and Switzerland are likely to be the key drivers of the European currencies later today. Britain is set to release the CBI Realized Sales figures at 10:00 GMT. Switzerland is scheduled to publish the UBS Consumption Indicator at 06:00 GMT. The results of both of these are set to drive both the GBP and CHF in today’s trading. Additionally, the EUR will go volatile on both of these publications, and on key data coming out of the U.S. throughout today’s trading.

JPY – Yen Falls to 3-Week Low vs. Dollar

The Yen fell to a 3-week low against the Dollar yesterday, in response to the rise in new U.S. home sales. The Yen also weakened on speculation that declines in currency volatility will spur carry trades. In carry trades, investors borrow at a low rate in one country and invest in another country with higher returns. This behavior is likely to continue as the main economies improve, and traders sell-off the safe-haven JPY. Thus the Japanese currency fell over 30 pips against the USD, EUR and GBP.

It is likely that the Yen will continue to decline today, as forex traders continue to take into account the optimistic economic data that was published from the U.S. and the Euro-Zone. The JPY will go very volatile in late trading, as Japanese Retail Sales are published at 23:50 GMT. It would be a wise choice for forex traders to open their JPY positions now in order to have the opportunity to profit from volatile market behavior as Tuesday’s trading commences.

Crude Oil – Crude Oil Hits 3-Week High

Crude Oil hit a 3-week high of $68.94 a barrel on Monday, as the USD declined in response to positive housing data from the U.S. However, weaker earnings figures in some instances pushed Oil down from its peak, as the commodity finished trading at about $68.06 a barrel. Crude was also helped by a weaker Dollar in earlier trading due to positive economic news from Germany. However, it seems that in this instance, risk appetite wasn’t strong enough to hold-up the value of Crude Oil on Monday.

As for today, Crude prices may rise if the USD weakens considerably, and there is increasingly optimistic economic news led by the U.S. Additionally, traders need to feel that there is enough demand to support Crude Oil at its current price level. In order to take advantage of the current trends, it is advisable for forex traders to begin opening their positions in Crude Oil and other commodities prior to volatile market conditions.

Technical News

EUR/USD

The latest upward movement has pushed this pair into the over-bought territory on the hourly and daily charts, signaling an impending downward correction. As the price hovers near the upper border of the daily chart’s Bollinger Bands, the downward pressure may be gaining strength. Going short might be a wise choice today.

GBP/USD

Since Friday’s trading session the Cable recouped losses, appreciating to 1.65. The Slow Stochastic of the 4 hour chart is showing no crosses in the horizon, and the bullish momentum there appears to be intact as well. Daily chart’s oscillators also support this notion. Placing long positions might be a right choice for today.

USD/JPY

The hourly and the daily charts indicating that the bullish trend has not yet said its last word as this currency pair is in the midst of a strong upward trend. However the 4 hour chart’s RSI and Slow Stochastic indicators are pointing down. A preferable strategy might be waiting for a clearer signal before entering the market on this pair.

USD/CHF

The pair is continuing its downtrend with full steam, and is now traded around the 1.0690 level. As the current price on the daily chart has dropped beneath the Bollinger Bands’ lower boarder, another bearish session could take place. Going short might be a good strategy today

The Wild Card – NZD/USD

It seems that the bullish momentum is back again as the carry trade pair is heading up with plenty of room to run. All of the technical oscillators on the hourly and the daily charts are giving a bullish signals and this pair’s target today might be the 0.6670 level. This gives forex traders a great opportunity to rejoin the market at an excellent entry price.

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

By GCI Fx Research

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The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4295 level and was supported around the $1.4170 level.  The common currency came within 40 pips of establishing a multi-month high before profit-taking ensued.  Traders moved back into U.S. dollars during the North American session after it was reported the U.S. housing market improved further with the sales of new single-family homes climbing 11% in June to an annualized rate of 384,000 while June bulding permits were upwardly revised to +10% from +8.7%.  Tere is a growing sense that the U.S. residential real estate market have bottomed out but in contrast, there is a significant amount of U.S. commercial real estate debt coming due over the next year and this may dramatically impact the economy.  U.S. equity markets finished modestly on the plus side today with many dealers indicating stronger investor sentiment.  Other data released in the U.S. today saw the Chicago Fed’s Midwest manufacturing index decline 0.3% to 78.1, the lowest reading since 1993.  In eurozone news, the European Central Bank reported its annual growth rate of private-sector loans in the eurozone receded to a record low of 1.5% in June from 1.8% in May.  German research institute Ifo reported large banks have tightened their lending policies in Germany with big business suffering as a result.  Other data saw the German August GfK consumer sentiment index improve to 3.5 from 3.0 in July while EMU-16 M3 money supply growth improved 3.5% y/y in June.  Additionally, it was reported German import prices were up 0.4% in June and off 11.4% y/y.  Euro bids are cited around the US$ 1.3435 level.

¥/ CNY

The yen depreciated further vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥95.35 level and was supported around the ¥94.65 level.  The yen extended recent losses as the U.S. dollar traded near 2009 lows relative to major counterparts, reducing safety demand for U.S. dollars and encouraging Japanese investors to allocate capital to higher-yielding currencies.  Another factor contributing to the yen’s losses is the decline in currency volatility with implied volatility on options for the majors at around 13%, their lowest level since 26 September 2008.  The lower volatility is creating demand for so-called carry trades in which yen are borrowed and then invested in higher-yielding opportunities overseas.  The political drama in Japan remains quite active ahead of the General Election planned on or around 30 August. The opposition Democratic Party of Japan is expected to have a very strong showing at the polls, possibly defeating the Liberal Democratic Party of Japan.  It remains unclear exactly how a DPJ victory could influence the yen but one possibility is further yen weakness on the premise the left-leaning DPJ may increase borrowing through Japanese government bonds. DPJ officials state they have no plans to shift Japan’s foreign reserves at this time.  Data released in Japan overnight saw the June corporate service price index decline 3.2% y/y.  The Nikkei 225 stock index climbed 0.59% to close at ¥10,088.66.  U.S. dollar offers are cited around the ¥104.15 level.  The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥136.10 level and was supported around the ¥134.25 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥157.45 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥89.30 level. In Chinese news, the U.S. dollar lost ground vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8283 in the over-the-counter market, down from CNY 6.8284.  The U.S. and China convened another meeting of the U.S.-China Strategic and Economic Dialogue today.  Vice Premier Wang Qishan did not directly address the U.S. dollar and massive U.S. stimuli in public comments today but most China-watchers believe China will push the Obama administration to make sure its massive holdings of U.S. Treasury securities do not erode in value.  Wang also reported China’s gross domestic product expanded at a 7.1% rate in the first half of 2009, partially in response to the “effective” US$ 585 billion stimulus China implemented.

Daily Market Commentary provided by GCI Financial Ltd.

GCI Financial Ltd (”GCI”) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (”Forex”) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (”CFDs”) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.

DISCLAIMER: GCI’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.

By CountingPips.com

New Home Sales in the United States gained by more than expected in the month of June according to data released by the Department of Commerce today. Purchases of new single family homes rose to an annual rate of 384,000 in June, an 11.0 percent advance following May’s 2.4 percent revised increase in sales. June’s annual rate of new homes sold, despite the increase, was still 21.3 percent lower than the June 2008 sales level. The rise in new homes sold was the third straight monthly gain and the 11.0 percent rise marked the largest monthly gain in almost a decade.

June’s results more than tripled the market forecasts which were expecting a 3.0 percent increase in sales for the month to an annual rate of 355,000 new homes sold.

Contributing heavily to the sales rise for June was a 43 percent monthly gain in the Midwest while sales of new homes in the West advanced by 23 percent. The median sales price of new homes in June decreased to $206,200 from $219,000 in May while the average sales price was about unchanged from May to $276,900.

US Dollar mixed in Forex Trading today.

The U.S. dollar has been mixed today in forex trading against the other major currencies since the start of the day at 00:00GMT. The American currency has been trading higher versus the euro, Japanese yen, Swiss franc and New Zealand dollar while trading lower against the British pound, Australian dollar and Canadian dollar.

The euro has declined slightly versus the dollar so far today as the EUR/USD has fallen from its 1.4232 opening at 00:00 GMT to trading at 1.4221 in the U.S. trading session at 1:49pm EST according to currency data from Oanda.

The British pound has advanced against the USD as the GBP/USD has gone from its 1.6454 opening exchange rate to trading at 1.6491 usd per gbp. The dollar has advanced versus the Japanese yen and trades at 95.18 after opening at the day at the 94.85 exchange rate.

The dollar has dipped slightly versus the Canadian loonie as the USD/CAD trades at the exchange rate of 1.0829 after opening the day at 1.0843.

The dollar has increased against the Swiss franc as the USD/CHF trades at 1.0716 after opening at 1.00703 today while the dollar has been slightly weaker against the Australian dollar and slightly stronger versus the New Zealand dollar. The AUD/USD trades at 0.8216 after a 0.8208 opening while the NZD/USD trades at 0.6553 today after opening at the exchange rate of 0.6577.

USD/JPY Chart – The US Dollar advancing today versus the Japanese Yen in forex trading as the USD/JPY increased to its highest exchange rate since July 7th today.

Source: ForexYard

The rally in global stock markets has led to a sell-off of the safe haven currencies and pushed investors to higher riskier assets as many see the global recession coming to an end. The encouraging global economic data has also been helping push Crude Oil to the $69 price level.

Economic News

USD – USD Depreciates, Consumer Confidence Growing

The steady improvement to risk appetite over the previous week has helped push the EUR/USD above 1.4200 at the start of this week’s trading. While the greenback has been trading relatively flat versus the other major currencies, it is nonetheless accelerating towards intense volatility at the start of this week. The rally in global stock markets has helped convince investors to pull away from the safety of the dollar in exchange for riskier assets. In the forex market, this means a diversification towards the EUR, CAD and even AUD.

A sudden surge in the Asian stock markets at the end of last week has helped reduce demand for safe-havens like the USD and JPY, but their attraction has remained steady enough to prevent vast drops in value. Confidence may be climbing the world over, but investors may not yet be brave enough to jump whole heartedly back into riskier investments. A demand for safe-havens remains despite the boost in optimism.

Looking ahead this week, we’ll complete another part of the picture for the US housing market with the New Home Sales report expected later today at 14:00 GMT. A more intricate look into American optimism will be delivered on Tuesday with the CB Consumer Confidence report, and week’s end will provide traders with a look into the first portion of this year’s second quarter GDP, which tends to have the most impact of the 3 reports released on this figure. These reports will no doubt put the USD at center-stage for the duration of the trading week and investors would be unwise to skip over this week’s news events surrounding the US economy.

EUR – EUR Strengthens as GBP Sinks; Risk Appetite Climbing

The spectacular results from last week’s PMI and German Ifo Business Climate report helped push the EUR higher against most of its currency pairs. However, the British Pound suffered heavy losses at the end of last week’s trading due to worse-than-forecasted GDP results. Climbing back above the 1.42 level against the USD, and even spiking upwards of 0.8650 against the Pound Sterling, the EUR’s gains were unmatched last week.

Precisely opposed to the value of the EUR, as pertaining to risk appetite, the Euro-Zone currency indeed strengthened due to the perception that its regional economy is stabilizing. This belief has helped stoke the notion that recovery is on the way by the end of this year. The subsequent return to riskier assets helps devalue safe-havens such as the Dollar, while pushing more diverse currencies, such as the EUR, higher against the other currencies.

No doubt the devaluation of the Pound also led to a boost in the value of the EUR by the sheer weight of regional competition. As the wave of risk appetite took hold last week, the GBP may not have offered investors the necessary level of security, which also helped boost the gains made by the EUR.

While economic releases from the Euro-Zone led the market last week, and also helped revive demand for the EUR, this week’s trading will see no such thing. The EUR is surprisingly absent from this week’s calendar as the US economy takes the wheel. If US data can encourage the recent return to risk appetite, then the EUR’s rally may continue this week.

JPY – JPY Anticipating European Market Opening

The recent rise in risk appetite has helped the mild return of the Yen-denominated carry trade. With the JPY climbing modestly against most pairs, the gains seem to be muted as investors weigh the JPY as a safe-haven or carry-trade, and the balancing act has led to a series of consolidation trends in the JPY crosses.

It appears the Japanese Yen has leveled-off versus almost all of the major currencies in anticipation of a rather large impending movement. If the rally in Asian stocks continues from last week, investors may see the JPY lose value as the carry-trade returns with full force. For the time being, it appears as if traders the opening of the European markets to weigh in on positions placed at the end of last week. If expectations are correct, forex market participants could see a sharp drop in the value of the Yen in today’s early trading hours.

Crude Oil – Oil Reaching $70 as Market Optimism Surges

As the US Dollar has declined over the last few trading days, the value of a barrel of Crude Oil has been appreciating. The steady climb back towards $70 a barrel has helped boost the GDP of many oil-producing Arab countries. The downside is the ever-present and growing connection between Middle Eastern economic growth and fluctuations in the price of oil, which has wrought havoc on these countries over the past few months despite efforts to diversify investment and industry.

Market optimism has helped return many investors away from the USD and into riskier assets. This helps boost the demand for commodities as a method of portfolio diversification. While the current price range of Crude Oil may not be justified by recent supply and demand levels, it nevertheless reflects the value derived by speculation of future growth. The surge in market optimism helps bring about the purchase of Crude Oil as investors anticipate industry growth world-wide. If this week’s news events continue to boost this optimism, Crude Oil may easily climb above $70 in the days ahead.

Technical News

EUR/USD

The price of this pair appears to be floating in the over-bought territory on the daily chart’s RSI indicating a downward correction may be imminent. The downward direction on the hourly chart Slow Stochastic also supports this notion. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

GBP/USD

The 4-hour chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, there is a fresh bearish cross forming on the hourly chart’s Slow Stochastic indicating a bearish correction might take place in the nearest future. Going short might be a wise choice.

USD/JPY

The typical range trading on the hourly chart continues. The 4-hour chart Slow Stochastic is floating in neutral territory. However, the daily chart’s RSI is already floating in the overbought territory, suggesting a downward correction may be imminent. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

USD/CHF

The pair has been range-trading for a while now, with no specific direction. The Daily chart’s Slow Stochastic providing us with mixed signals. The 4 hour charts do not provide a clear direction as well. Waiting for a clearer sign on the hourlies chart might be a good strategy today.

The Wild Card – Crude Oil

Oil prices rose significantly in the last week and peaked at $68.80 per barrel. However, daily charts’ RSI is floating in an overbought territory suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. This might be a good opportunity for forex traders to enter the trend at a very early stage.

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.