Greek Bailout Prospects Boost Riskier Currencies, Dampen Demand for USD, JPY

Source: Forex Yard

The USD and JPY declined Thursday on hopes the EU and International Monetary Fund will soon formulate an aid package for Greece. Crude Oil rose above $85 a barrel, boosted by rising global equities.

Economic News

USD – USD Down Slightly as Market Sentiment Improves

The USD declined slightly against the EUR and GBP yesterday after concerns eased over the Euro-Zone debt issues. Market sentiment rose after EU officials signaled the imminent conclusion of the Greek bailout talks.

The Dollar was little changed versus the Yen at Y94.07 from Y94.11. The EUR/USD pair is currently trading at $1.3226 after previously reaching a high of $1.3256 during today’s early Asian trading. The British Pound broke through the 1.53 level against the USD after recovering from the daily low of 1.5141 and is currently trading at $1.5322.

Along with news regarding the Greek bailout plan, markets are awaiting the release of the Advance U.S. Gross Domestic Product figures, which are due to be published today at 12:30 GMT.

EUR – EUR Gains on Greek Bailout Package Prospects

The EUR was up modestly against the Dollar Thursday as Euro-Zone officials signaled the impending completion of the Greek bailout package. Further supporting the EUR was the release of encouraging data from Germany and the European Union, as well as strong earnings reports from European and U.S. companies which boosted overall economic sentiment, supporting higher yielding currencies.

The EUR is currently at $1.3238 and at Y124.53 from Y124.27. The U.K. Pound is at $1.5323 from a low of $1.5192.

Overall investor sentiment is still EUR negative as other EUR-Zone countries, such as Portugal and Spain, are close to a debt crisis of their own. Therefore, any rally which may follow the conclusion of the Greek crisis will likely be short lived.

JPY – AUD, NZD Gain on Improved Market Sentiment, Interest Rates Outlook

The AUD reached its highest level in a week, boosted by market optimism over an imminent solution to Greece’s debt crisis which boosted demand for riskier assets such as the south pacific currency. The NZD also gained after central bank governor Alan Bollard stated his intent to start raising interest rates sooner than expected.

New Zealand’s Dollar rose to 72.47 U.S. cents from 72.37 cents in New York yesterday. Australia’s currency advanced to 93.06 U.S. cents from 92.77 cents, after earlier touching a high of 93.13 cents.

Looking ahead to today, traders should follow the release of the Japanese Overnight Call Rat and the BOJ Press Conference. Although the interest rate is expected to remain unchanged, the BOJ statement is expected to provide direction for the Yen as it should provide clues as to the future monetary policy and current economic conditions.

Crude Oil – Crude Stable above $85 a barrel

Crude Oil continued its advance Thursday, boosted by the release of positive economic data from the EU and U.S., raising the level of confidence in the global economic recovery. Crude oil for June delivery rose 35 cents, or 0.4%, to $85.52 a barrel, in electronic trading on the New York Mercantile Exchange.

Better than expected employment data from Germany as well as strong equity performances from Europe and the U.S. helped boost Oil levels Thursday, however, investors worry that the price of Oil is now above the level which is justified by fundamentals, particularly as the U.S. inventories remain high.

Looking ahead to today, investors should continue following any developments regarding the Greek bailout plan as these seem to have the strongest affect on markets. The U.S. GDP data should also provide some direction as it will shed light on the strength of the U.S economy.

Technical News


After dropping to an annual low, the pair saw a mild bullish correction yesterday. There is now a series of 4 consecutive doji candles on the 4-hour chart, indicating that a sharp movement is impending. As a bearish cross takes place on the Slow Stochastic, the move looks to be downwards.


The cable has recently peaked at the 1.5360 level, after completing a 230 pips rise. However, the 1-hour chart is currently providing several bearish signals. The RSI has dropped below the 70 line, and in addition, the MACD has completed a bearish cross. The key-target level seems be the 1.5250 price.


Following a very peaceful trading over the past couple of days, the pair looks to break out of the range today. The 1-hour chart shows that the Bollinger Bands have significantly tightened, indicating that a sharp movement is forthcoming. As all oscillators on the 4-hour chart point down, the movement might be bearish.


The pair saw very little volatility over the past few days, as it bounced up and down between the 1.0800 and the 1.0900 levels. Today however, the flat trading is likely to end. As a bullish cross takes place on the 4-hour chart, the price may rise in the near term.

The Wild Card


There is a very distinct bullish channel on the 4-hour chart, as gold is now trading in the middle of it. As the next significant resistant level is located at the $1,192 price, it seems that the bullish trend has more room to go. This might be a good opportunity for forex traders to join a popular trend.

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.

AUDUSD breaks above the price channel

AUDUSD breaks above the upper border of the falling price channel, suggesting that a cycle bottom has been formed at 0.9134 level on 4-hour chart, and the fall form 0.9381 has completed. Now the bounce from 0.9134 could possibly be resumption of uptrend from 0.8577 (Feb 5 low), however, a break above 0.9381 previous high is needed to confirm the resumption of uptrend. Support levels are 0.9255 and 0.9220, below these levels could bring price back to downtrend 0.9381, then another fall to 0.9100 area could be seen.


Daily Forex Analysis

Forex Daily Market Commentary

By GCI Forex Research

Fundamental Outlook at 1400 GMT (EDT + 0400)

The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3280 level and was supported around the $1.3185 level. Traders continue to lift the common currency higher on the premise that much-needed financial aid will be released to Greece sooner rather than later.  European Central Bank President Trichet today urged German legislators to approve Greece’s request for funds under a joint financial rescue package being offered by the European Union and International Monetary Fund.  Trichet noted a “strong sense of direction” is required so that contagion can be avoided.  A timetable for disbursement of funds to Greece could be released as early as next week.  A European Union official said a final plan on the initial €45 billion bailout plan could be reached “in days” while German finance minister Schaeuble said it is not yet certain that an agreement would be reached and called on Greece to implement a budget consolidation.  Traders are also monitoring the situation in Spain and Portugal, two eurozone countries that had their credit ratings downgraded and may require their own financial assistance packages.  Data released in the eurozone today saw the EMU-16 March money supply off 0.1% y/y while the April business climate indicator improved to +0.23 from the revised prior print of -0.20.  Additionally, EMU-16 industrial confidence, economic confidence, and services confidence all improved this month.  The EMU-16 March unemployment rate and April consumer price inflation data will be released tomorrow.  Additionally, Germany’s unemployment roll fell by 68,000 in April with the unemployment rate reaching 7.8% from the prior reading of 8.0%.  In U.S. news, the Chicago Fed’s National Activity Index improved to -0.07 from the revised prior reading of -0.44.  Also, weekly initial jobless claims fell to +448,000 from the revised prior reading of +459,000 and continuing jobless claims fell to 4.645 million.  Q1 GDP data will be released tomorrow along with University of Michigan consumer sentiment data.  President Obama nominated Janet Yellen to become the new Fed Vice Chairman and also nomated Peter Diamond and Sarah Bloom Raskin to become Fed Governors.  The Fed yesterday voted to keep monetary policy unchanged.  Euro bids are cited around the US$ 1.3175 level.

¥/ CNY

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥94.15 level and was supported around the ¥93.85 level.  Nikkei reported Bank of Japan will forecast consumer price inflation of +0.2% in fiscal year 2011, following three years of declines.  BoJ’s Policy Board will release its interest rate decision overnight and is not expected to change monetary policy at this time, though it may upgrade its forecasts for economic and inflation growth.  It was also announced that the balance of commercial paper held by the central bank is expected to reach zero for the first time in nearly nineteen months after having once reached ¥4 trillion.  Japanese financial markets were closed overnight for the Golden Week holidays.  Many data will be released overnight including April PMI manufacturing, March household spending, March jobless data, consumer price inflation, and March industrial production.  The Nikkei 225 stock index lost 2.57% yesterday to close at ¥10,924.79.  U.S. dollar offers are cited around the ¥96.85 level.  The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥124.85 level and was supported around the ¥123.75 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥143.80 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥87.00 figure. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8260 in the over-the-counter market, up from CNY 6.8254.  China reduced its quota for short-term overseas borrowing this year to US$ 32.4 billion, 1.5% less than last year’s pace on account of yuan appreciation.  People’s Bank of China is expected to revalue its yuan currency at any time.


The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.5285 level and was supported around the $1.5140 level.  Cable shook off market chatter that the ratings agencies may downgrade the U.K. on account of its worsening financial position.  Data released in the U.K. overnight saw April Nationwide housing prices up 1% m/m and 10.5% y/y.  The April GfK consumer confidence survey will be released tonight.  Prime Minister Brown, the Tories’ Cameron, and the Liberal Democrat’s Clegg held their last debate today and it appears increasingly likely Labour will lose its grip on power.  Cable bids are cited around the US$ 1.5030 level.  The euro depreciated vis-à-vis the British pound as the single currency tested bids around the £0.8670 level and was capped around the £0.8730 level.


The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.0805 level and was capped around the CHF 1.0870 level.  The April KOF Swiss leading indicator for April will be released tomorrow. U.S. dollar offers are cited around the CHF 1.0930 level.  The euro moved higher vis-à-vis the Swiss franc as the single currency tested offers around the CHF 1.4350 level while the British pound appreciated vis-à-vis the Swiss franc and tested offers around the CHF 1.6540 level.

Forex 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.

Bob Prechter Points Out The Many Signs Of Deflation

Yes, You Heard Us Right
April 29, 2010

By Elliott Wave International

Everywhere you look, the mainstream financial experts are pinning on their “WIN 2” buttons in a show of solidarity against what they see as the number one threat to the U.S. economy: Whip Inflation Now.

There’s just one problem: They’re primed to fight the wrong enemy. Fact is, despite ten rate cuts by the Federal Reserve Board to record low levels plus $13 trillion (and counting) in government bailout money over the past three years — the Demand For and Availability Of credit is plunging. Without a borrower or lender, the massive supply of debt LOSES value, bringing down every exposed investment like one long, toppling row of dominoes.

This is the condition known as Deflation.

Bob Prechter uncovered more than a dozen “value depreciating” developments underway in the U.S. economy as the two main engines of credit expansion sputter: Banks and Consumers. Here’s a preview of his findings contained the free report, The Most Important Investment Report You’ll Read in 2010:

  • A riveting chart of Treasury Holdings as a Percentage of US Chartered Bank Assets since 1952 shows how “safe” bank deposits really are. In short: today’s banks are about 95% invested in mortgages via the purchase of federal agency securities. Unlike Treasuries, IOU’s with homes as collateral have “tremendous potential” to fall in dollar value.
  • Loan Availability to Small Businesses has fallen to the lowest level since the interest rate crises of 1980. In Bob Prechter’s own words: “The means of debt repayment [via business growth] are evaporating, which implies further deflationary pressure within the banking system.”
  • An all-inclusive close-up of the Number Of Banks Tightening Their Lending Standards since 1997 has this message to impart: Since peaking in October 2008, lending restrictions have soared, thereby significantly reducing the overall credit supply.
  • Both residential and commercial mortgages are plummeting as home/business owners walk away from their leases at an increasing rate.
  • The major sources of bank revenue — consumer credit and state taxes — are plunging as more people opt to pay DOWN their debt. Also, a compelling chart of leveraged buyouts since 1995 shows a third catalyst for the credit binge — private equity — on the decline.

All that is just the beginning. For more information on the deflationary shift underway in the financial landscape, download Bob Prechter’s free report, The Most Important Investment Report You’ll Read in 2010. It contains 13 pages of commentary, riveting charts, and unparalleled insight into these urgent market matters.

Elliott Wave International (EWI) is the world’s largest market forecasting firm. EWI’s 20-plus analysts provide around-the-clock forecasts of every major market in the world via the internet and proprietary web systems like Reuters and Bloomberg. EWI’s educational services include conferences, workshops, webinars, video tapes, special reports, books and one of the internet’s richest free content programs, Club EWI.

AUD/USD Continues Downward Biased Consolidation

By Fast Brokers – The AUD/USD is continuing its wild, volatile consolidation patter exhibiting a downward bias.  The AUD/USD has now set consecutive lower highs (4/9, 4/21, 4/26, 4/29).  Hence, the AUD/USD doesn’t seem to have the strength to break out into a new uptrend due to fiscal problems in the EU.  However, the AUD/USD continues to rally strong and stay within striking distance of previous April highs since the RBA still has the most aggressive monetary policy stance around the globe.  On the other hand, should fiscal problems in the EU continue and destabilize further then the RBA may be inclined to keep its monetary policy unchanged come May’s meeting.  After all, Stevens recently hinted that the benchmark rate has almost reached a fair value, signaling that the rate hike campaign could have an end in sight.  Australia will reenter the data wire tomorrow by releasing new home sales and private sector credit figures.  Should new home sales cool and private sector credit tighten, this could show that the RBA’s hawkish monetary policy is having its desired impact, an Aussie negative.  On the other hand, of the data points print strong then the Aussie should remain locked into its uptrend.  Attention will then shift to the U.S. with a key data set on the way, highlighted by advance GDP.  That being said, the trading week could end on an active note.

Technically speaking, the Aussie faces technical barriers in the form of intraday, 4/26, 4/21, 4/15 and 4/12 highs.  Additionally, the psychological .93 and .94 levels could serve technical obstacles over the near-term.  As for the downside, the Aussie has multiple uptrend lines serving as technical cushions along with intraday and 3/22 lows.

Price: .9266
Resistances: .9268, .9283, .9294, .9304, .9311, .9319
Supports: .9259, .9251, .9240, .9230, .9220, .9208
Psychological: .93, .94, .92, April highs and lows

(click chart to enlarge)

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regarded neither 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.

Forex Market Review 29/04/2010


Past Events:
• EUR German Prelim CPI m/m out at out at -0.1% versus expected 0.1%, prior 0.5%
• USD Cure Oil Inventories 1.9M, versus expected  0.9M, prior 1.9M
• USD Federal Funds Rate out at <0.25%, versus expected <0.25%, prior <0.25%
• GBP Nationwide HPI m/m out at 0.1%, versus expected 0.4%, prior 1.0% (revised up)
• AUD CB Leading Index m/m  out at -0.3%, versus -0.2%
• NZD Official Cash Rate out at 2.50%, versus expected 0.25%, prior 0.25%
• NZD Trade balance out at 567M, versus expected 375M, prior 335M (revised up)

Upcoming Events:
• EUR German Unemployment Change (0855GMT)
• EUR M3 Money Supply y/y (0900GMT)
• EUR ECB President Trichet Speaks (1230GMT)
• USD Unemployment Claims  (1330GMT)
• CAD BOC Gov Carney Speaks (1530GMT)

Market Commentary:

The Euro hit a new 12 month intraday low yesterday after Standard & Poor’s downgraded its debt rating on Spain, compounding sovereign debt fears just as a resolution to Greece’s aid package seemed imminent.

The Euro traded at as low as $1.51240 as concern that Europe’s deficit crisis may widen damped the appeal of assets in the 16-nation region. A cut to Spain’s credit rating yesterday, coming after downgrades this week to Portugal and Greece exasperated fears that the Euro Zones debt crisis is spreading. Standard & Poor’s cut Spain’s credit rating to AA from AA+ and said the outlook on the country’s debt is negative. This move comes just two days after the rating agency sliced Greece’s borrowings to junk and reduced Portugal’s to the third-lowest investment grade. The extra yield investors demand to hold Spain’s 10-year debt rather than German equivalents widened to 112.5 basis points this week, the most in more than a year.

Europe’s single currency fell for the third time in four days against the greenback after the IMF said in its Regional Economic Outlook report that the “main risk scenario” from Greece’s debt crisis is “one of worsening global risk aversion, should the jitters spill over to some of the larger European economies.” Moreover, as concerns about a domino effect spread officials said a joint IMF EU rescue package could now total up to €120billion ($150 billion) over three years – nearly three times the amount recently pledged – as the IMF urged reluctant German lawmakers to move quickly in approving support for immediate financial aid.

Investors are abandoning the euro at a rate not seen since the collapse of Lehman Brothers Holdings Inc. as Europe’s worsening fiscal crisis threatens to splinter the 16-nation currency union.  After reaching a new 12-month low against the USD, the Euro managed to recover slightly in the North American trading session to close at $1.52003, down 0.29% from its opening price.

This morning, Germany will release its latest figures for the unemployment change. A significant drop in the number of unemployed people was reported last month – 31,000. Economists are optimistic this time, and predict another drop of 11,000. A better than expected number could provide some stabilizing relief for the falling Euro.

Britain’s currency, also affected as by news of the Spanish downgrade, tumbled to a low of $1.51240 yesterday. The GBP/USD recovered slightly to close at $1.52443, down 0.29% from its opening price. This morning, a report by the Nationwide Building Society showed that housing prices in U.K rose by 1.0% in April from March. According to Nationwide data, this marks the second consecutive monthly rise of 1.0% rise, leaves house prices up by 10.5% on an annual basis.

In the United States, the Federal Reserve said yesterday that the U.S economy continues to strengthen, but that the “slack” left over from the recession was still so large that it expected interest rates to stay near zero for an “extended period”.

The labor market is beginning to improve,” the Federal Open Market Committee said in a statement yesterday in Washington, after last month saying it was “stabilizing.” Officials also said growth in household spending has “picked up recently.”  Federal Reserve Chairman Ben S. Bernanke is contending with an unemployment rate that has been stuck at 9.7% for three straight months even as payrolls started to grow. Fed officials repeated that inflation is likely to be “subdued” and that consumer spending is held back by tight credit and weak income growth.

The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners, was at 82.254 from 82.381 yesterday, when it rose to 82.714, the strongest since May 2009. The Dollar Index neared an 11-month high before a U.S. Labor Department report today (1330GMT) that economists said will show initial jobless applications dropped by 11,000 to 442,000.

Yesterday, the USD/CAD sunk as low as 1.00725 as investors sought the refuge in currencies of nations with relatively strong balance sheets. The Canadian dollar strengthened for the first time in three days against its American counterpart, to close at C$1.01033, appreciating a total of 0.54% against the USD. The Loonie added to its gains after the Fed restated its intention to keep the benchmark U.S. interest rate near zero for an “extended period.”  Analysts expect that the BOC will raise interest rates in Canada as early as June 1st. Later today, the BOC governor Mark Carney will speak before parliament, in his second of two speeches this week. Carney is expected to give an overview of the economic situation as well provide hints about the pending rate decision.

New Zealand’s central bank kept its benchmark interest rate unchanged at a record low amid “elevated” risks to the global economy and indicated borrowing costs may not need to be increased as much as in previous cycles. “The New Zealand economy is recovering broadly as expected,” Reserve Bank Governor Alan Bollard said in a statement in Wellington yesterday, after maintaining the official cash rate at 2.5%. The governor went on to say that “At the same time, risks to the global outlook remain elevated.”

Bollard has held borrowing costs steady at 2.5% since April 2009 in order to help push the economy out of its worst recession in over 30 years. The New Zealand fell to $0.7170, from around $0.7200 late in New York, moving away from three-month highs of $0.7257 hit last week. It had rallied on speculation that the Reserve Bank of New Zealand (RBNZ) would prepare the ground for rate hikes as early as June. The Kiwi closed at $0.71788, up 0.80% from its opening price.

On the other hand, the Australian dollar held gains at around $0.9240, having jumped over 1% in the previous session, on speculation the Reserve Bank of Australia (RBA) will raise interest rates at its May policy meeting next week. The AUD/USD, which closed yesterday’s trading session at 0.92432, has reached a high of 0.92549 in early this morning.

Forex Market Review & Analysis by

Disclaimer: Trading the foreign exchange (Forex) carries a high level of risk, and may not be suitable for all investors. All information and opinions contained on this website are to be used for general informational purposes only and do not consitute investment advice.

U.S Unemployment Claims on Tap

By Anton, ForexYard – Following yesterday’s steep drop in value for the Euro, the single currency may have an opportunity to recoup some of its losses in trading today. The following are the today’s main news events.

11:30 GMT: EUR ECB President Trichet Speaks

Normally, market volatility occurs whenever the European Central Bank President speaks. Investors typically try to determine what his speeches mean with regards to the all-important interest rate levels in the EU.

Today’s speech may take on added importance. Following yesterday’s downgrade of Spain’s long term debt rating, combined with the continuing negative news coming out of Greece, investors will want to pay careful attention to Trichet’s speech, as it is likely to heavily influence Euro pairs.

12:30 GMT: USD Unemployment Claims

Investors typically pay close attention the number of new applicants filing for unemployment insurance in the U.S., as it is seen as key indication of the current state of the American economy.

Last week, the unemployment number was slightly higher then forecasted, but the figure did not bring the Dollar down to much. This week, analysts are forecasting a slightly better figure then last week, which if true, could help USD make further gains on the Euro. Traders should be aware that this figure is notoriously hard to predict, and a worse then expected number could cause the Dollar to slide against its major currency rivals.

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.

Enjoy 8 Free Chapters from Robert Prechter’s Conquer the Crash

Prechter’s New York Times and Wall Street Journal business best-seller remains a useful read.

By Editorial Staff

In 2002, Elliott Wave International’s president Robert Prechter published his New York Times and Wall Street Journal business best-seller Conquer the Crash, a prescient book that explained why a financial crisis was inevitable and predicted almost exactly how it would unfold.

Now in the 2nd edition, Conquer the Crash remains a very useful read. To give you an idea of just how useful, we are releasing 8 chapters of the book to all 150,000+ free Club EWI members. Here’s an excerpt. (Details on how to read full report are below.)

Robert Prechter
Conquer the Crash
Chapter 23, “What To Do With Your Pension Plan,” excerpt

Make sure you fully understand all aspects of your government’s individual retirement plans. In the U.S., this includes such structures as IRAs, 401Ks and Keoghs. If you anticipate severe system-wide financial and political stresses, you may decide to liquidate any such plans and pay whatever penalty is required. Why? Because there are strings attached to the perk of having your money sheltered from taxes. You may do only what the government allows you to do with the money. It restricts certain investments and can change the list at any time. It charges a penalty for early withdrawal and can change the amount of the penalty at any time.

What is the worst that could happen? In Argentina, the government continued to spend more than it took in until it went broke trying to pay the interest on its debt. In December 2001, it seized $2.3 billion dollars worth of deposits in private pension funds to pay its bills. …

With the retirement setup in the U.S., the government need not be as direct as Argentina’s. It need merely assert, after a stock market fall decimates many people’s savings, that stocks are too risky to hold for retirement purposes. Under the guise of protecting you, it could ban stocks and perhaps other investments in tax-exempt pension plans and restrict assets to one category: “safe” long-term U.S. Treasury bonds. Then it could raise the penalty of early withdrawal to 100 percent. Bingo. The government will have seized the entire $2 trillion — or what’s left of it given a crash — that today is held in government-sponsored, tax-deferred 401K private pension plans. I’m not saying it will happen, but it could, and wouldn’t you rather have your money safely under your own discretion? …

Perhaps you have no such opportunity for a tax saving and do not want to pay the penalty attached to premature withdrawal. If your balance is high enough, you may wish to consider converting your retirement plan investments into an annuity at a safe insurance company (see Chapter 24). It is highly likely (though not assured) that such investments would be left alone even in a national financial emergency. …

If you or your family owns its own small company and is the sole beneficiary of its pension or profit sharing plan, you should lodge its assets in a safe bank or money market fund. As an alternative, depending upon your age and requirements, you may consider converting it into an annuity, issued by a safe insurance company. Such insurance companies are few and far between, but the next chapter shows you where to find them.

Read the rest of the 8 free chapters from Robert Prechter’s Conquer the Crash now, free! All you need is to create a free Club EWI profile. Here’s what you’ll learn:

  • Chapter 10: Money, Credit and the Federal Reserve Banking System
  • Chapter 13: Can the Fed Stop Deflation?
  • Chapter 23: What To Do With Your Pension Plan
  • Chapter 28: How to Identify a Safe Haven
  • Chapter 29: Calling in Loans and Paying off Debt
  • Chapter 30: What You Should Do If You Run a Business
  • Chapter 32: Should You Rely on Government to Protect You?
  • Chapter 33: A Short List of Imperative “Do’s” and Crucial “Don’ts”

Keep reading this free report now — all you need to do is create a free Club EWI profile.

Elliott Wave International (EWI) is the world’s largest market forecasting firm. EWI’s 20-plus analysts provide around-the-clock forecasts of every major market in the world via the internet and proprietary web systems like Reuters and Bloomberg. EWI’s educational services include conferences, workshops, webinars, video tapes, special reports, books and one of the internet’s richest free content programs, Club EWI.

Euro Stages Slight Rebound in Overnight Trading

Source: Forex Yard

After falling to one year lows against several of its main currency rivals, the Euro was able to bounce back slightly last night. Following news that U.S. interest rates will likely remain at their current levels for the foreseeable future, the single currency was able to make very slight advances against the greenback and is currently trading around the 1.3200 level.

Economic News

USD – Dollar Gains Big on Euro-Zone Woes

The U.S. Dollar was able to stage an impressive rally against several of its main currency rivals yesterday, including the Euro and British Pound. Negative news coming out of the Euro-zone largely fueled the greenback’s gains, which were largely maintained despite the announcement that U.S. short-term interest rates will remain at their current levels for some time.

Currently, EUR/USD is trading around the 1.3200 level, over 150 pips down from 24-hours ago. The drop in GBP/USD was even more drastic. At the moment, the pair is trading around the 1.5170 level, almost 300 pips down from this time yesterday. In both cases, the Dollar should be able to maintain its respective gains in trading today, providing news set to be released today shows a continuous improvement in the American economy.

Traders will want to pay attention to the U.S. Unemployment Claims Report, the results of which will be announced at 12:30 GMT today. With most analysts predicting a slight drop in the number of new unemployment claims compared to last week, the Dollar may see gains, not only against the Euro, but also against riskier currencies like the Canadian Dollar and Aussie.

EUR – Euro Tumbles Following Spanish Downgrade

Adding to the long list of economic problems currently confronting the Euro-zone, Spain’s long term credit rating was downgraded yesterday, causing the single currency to tumble against its major counterparts. In addition to the USD, the Euro has also fallen against the more volatile currencies like the Canadian Dollar and Aussie. In the last 24-hours, the single currency has fallen over 60-70 pips against both the CAD and AUD.

Today, traders will want to pay attention to several European news events likely to impact the marketplace. At 7:55 GMT, the German Unemployment Change is set to be released. As the leading Euro-zone economy, Germany plays a somewhat inflated role in how the Euro moves in the forex marketplace. Additionally, a speech from ECB President Trichet is set to take place at 11:30 GMT. Typically, a speech from the ECB President creates mild market volatility, but considering the events of yesterday, todays might take on added significance. Whether either of these news events will help the Euro recoup yesterday’s losses is yet to be seen.

JPY – Yen Able to Maintain Gains Despite Return To Risk Taking

Capitalizing on the continued bad economic news coming out of the Euro-zone, the Yen was able to record significant gains against the single currency in trading yesterday. At one point, EUR/JPY fell over 100 pips before correcting itself slightly. Currently the pair is trading around the 123.95, still down 80 pips or so from its high yesterday.

Against the U.S. Dollar, the Yen has not been as fortunate. Good U.S. economic news has fueled an uptrend in the USD/JPY pair over the last several days. The pair went as high as 94.28 yesterday, and is currently trading only slightly lower at 93.90.

Today, JPY traders will want to focus on both the U.S. and Japanese economic news. If American unemployment figures come in higher then expected, the Yen may be able to make some gains on the greenback. Furthermore, the Japanese Prelim Industrial Production report, set to be released at 23:50 GMT, will likely boost the Yen providing the results are at or above the forecasted figure of 0.9%.

Crude Oil – Crude Struggling to Maintain Prices Above $83 a Barrel

After dropping as low as $81.40 a barrel yesterday, crude oil managed to stage a mild comeback in evening trading. Prices were largely boosted due to the latest news regarding the formation of a Greek rescue plan. That being said, crude is currently stuck around the $83 level, a far cry from earlier in the week when prices were well above $84 a barrel.

Today, crude prices will likely be determined by U.S. economic news. If the American unemployment figure gives the greenback a boost, oil prices will likely fall as a result. That being said, if a disappointing unemployment figure is released, risk taking may return to the forex marketplace leading to a boost for the commodity.

Technical News


The price of this pair appears to be floating in the over-sold territory on the daily chart’s RSI indicating an upward correction may be imminent. The upward direction on the 8-hour chart’s RSI also supports this notion. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.


The daily chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, the 4-hour chart’s RSI is already floating in the oversold territory indicating that a bullish correction might take place in the nearest future. Going long with tight stops may turn out to be the right choice today.


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 USD/CHF cross has experienced a bullish trend for the past week. However, it seems that this trend may be coming to an end. The RSI of the daily chart shows the pair floating in the overbought territory, indicating that a downward correction will happen anytime soon. Going short with tight stops might be a wise choice.

The Wild Card


Gold prices rose significantly in the last week and peaked at $1065.10 for an ounce. And now, the daily chart’s Slow Stochastic is giving bullish signals, indicating that gold prices might go up. This might give forex traders a great opportunity to enter a very popular trend.

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.