Daily Forex Bullteins and Market News Analysis: Forex Market Daily Report

FOREX Newsletter

Pulse of the Market

· Greenback posted a tentative bounce but there aren’t many indicators that can shift the currency’s bearing

· Single Currency rally flagging as Greece’s round two bailout showing larger requirements

· Cable may continue to threaten the rebound as BoE is widely expected to maintain its current policy in June

· Swiss Franc looking increasingly overbought and searching for a catalyst for reversal

The U.S Dollar ended yesterday’s trading session higher as risk aversion continued to drive equities and currencies lower, with no major U.S economic releases on the calendar yesterday. The Greenback extended its losses against the Japanese Yen but safe haven flows helped the under pressure Dollar to rebound against the other major currencies. The lack of significant job growth last month poses a bit problem for the Federal Reserve and the Greenback. The Reserve Bank of Australia, European Central Bank, Bank of England and Reserve Bank of New Zealand are not expected to raise interest rates but they are getting closer to do so. If the words “strong vigilance” used by the ECB this week, it would signal the strong possibility of a July rate hike which would really illustrate how far behind the Federal Reserve is from everybody else. Fed Chairman Ben Bernanke will be delivering a speech in Atlanta today and everyone will be tuning in for any reaction to Friday’s jobs number. The Euro ended the day lower against the U.S Dollar. More back and forth on Greece and lack of agreement in the Euro Zone has driven the Euro lower. In the starting hours of the session Euro was holding steady on the relief that Greece would finally receive its next tranche of aid and progress would be made that would help the country avoid a default. However the Euro came under selling pressure after the German Finance Ministry said they are not certain whether there will be a second bailout for Greece and under what terms that would occur. Although the European Central Bank is expected to grow more hawkish, until a deal is reached on Greece, there will be significant volatility in the currency. Yesterday’s Euro Zone producer price report showed inflationary pressures growing in the month of April with PPI rising by 0.9 percent. Euro Zone retail sales numbers are scheduled for release today. The British Pound fell against the U.S Dollar and Euro while U.K government bond yields dropped to its lowest this year, on concern the government’s austerity measures are hampering growth. Over the past month, manufacturing and services indexes have deteriorated sharply, mortgage approvals dipped to a four month low and consumer confidence has taken a nosedive. The economic recovery has failed to take hold and will keep the central bank away from raising interest rates this week. The Japanese Yen traded higher against all the major currencies yesterday in the midst of a hampered global economic recovery.

Time(GMT)	Economic Release	IMP	Actual	Forecast	Prior
04:30	Reserve Bank of Australia Rate Decision (JUN 7)	High		4.75%	4.75%
07:15	Switzerland Consumer Price Index (MoM) (MAY)	Medium		-0.1%	0.10%
09:00	Euro Zone Retail Sales (MoM) (APR)	Medium		0.3%	-0.9%
10:00	German Factory Orders s.a. (MoM) (APR)	Low		2.0%	-4.00%
19:00	U.S Consumer Credit (APR)	Medium		$5.000B	$6.016B
23:50	Japan Trade Balance - BOP Basis (Yen) (APR)	Medium		-¥379.0B	¥240.3B

Euro

The Single Currency came under pressure in yesterday’s trading session with uncertainty regarding the final bailout package for Greece inspiring profit taking from Friday's session rally. June Sentix Investor Confidence slumped to 3.5 vs. 0.9 previously. Overall, the EUR/USD traded with a low of 1.4556 and a high of 1.4657 before closing the day around 1.4575 in the New York session.

Yen

The Japanese Yen tested 80.00 Yen a few times in European session but the level held firm before a small bounce towards opening levels. EUR/JPY selling added pressure but could also save the major with the uptrend providing support for USD/JPY. Overall, the USD/JPY traded with a low of 79.96 and a high of 80.38 before closing the day around 80.09 in the New York session.

British Pound

The British Pound was very calm but pressured to the downside with the general risk off mood in the market. EUR/GBP tried to extend gains but failed to push much further into the 0.8900 region. The outlook is mixed to negative given the tough austerity measures announced by the government. Overall, the GBP/USD traded with a low of 1.6339 and a high of 1.6459 before closing the day at 1.6357 in the New York session.

Canadian Dollar

The Canadian Dollar ended lower against the U.S Dollar. On a seasonally adjusted basis, the IVEY PMI index rose from 57.8 to 65.5. Employment numbers are due for release from Canada at the end of the week and based upon the IVEY PMI report, employment is expected to rise for the second month in a row. Overall, the USD/CAD traded with a low of 0.9766 and a high of 0.9815 before closing the day at 0.9804 in the New York session.

Australian Dollar

The Australian Dollar fell back with the Euro and pressure from weak commodities yesterday. Support was found under 1.0700 and the market ended at opening levels. The RBA is ahead and could provide direction from the statement accompanying. Overall, the AUD/USD traded with a low of 1.0691 and a high of 1.0766 before closing the day at 1.0712 in the New York session.

Euro-Yen

EUR/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also issuing a bullish stance. The RSI is above 51 and lies above the neutral zone. Overall, the cross has lost 0.57%.

Sterling-Yen

Currently GBP/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing bearish and MACD is also indicating a bearish stance. The RSI is above 38 reading and lies below the neutral zone. The pair has lost 0.61%.

Aussie-Yen

Currently, the cross is trading below 14, 50 and above 100 days moving average. Fast stochastic gives bearish and MACD is also indicating a bearish stance. The RSI is above 46 reading and lies below the neutral region. The pair has lost 0.26%.

Euro-Sterling

This cross is trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bullish and MACD is also issuing a bullish signal. The RSI is above 63 reading and lies above the neutral region. The pair has gained 0.04%.

Sterling-Swiss

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is also indicating a bearish tone. The RSI is above 22 and lies below the neutral region. The pair has lost 0.52%.

Appendix

Daily Pivot Points
			Trading Range
Contract	S3	S2	S1	Pivot	R1	R2	R3
EUR/USD	1.4434	1.4495	1.4535	1.4596	1.4636	1.4697	1.4737
USD/JPY	79.49	79.72	79.91	80.14	80.33	80.56	80.75
GBP/USD	1.6191	1.6265	1.6311	1.6385	1.6431	1.6505	1.6551
USD/CHF	0.8259	0.8292	0.8318	0.8351	0.8377	0.8410	0.8436
USD/CAD	0.9726	0.9746	0.9775	0.9795	0.9824	0.9844	0.9873
EUR/JPY	115.19	115.87	116.31	116.99	117.43	118.11	118.55
GBP/JPY	128.96	129.88	130.44	131.36	131.92	132.84	133.40
CHF/JPY	94.71	95.12	95.54	95.95	96.37	96.78	97.20
AUD/JPY	84.57	85.06	85.43	85.92	86.29	86.78	87.15
EUR/GBP	0.8843	0.8868	0.8888	0.8913	0.8933	0.8958	0.8978
EUR/CHF	1.2032	1.2096	1.2129	1.2193	1.2226	1.2290	1.2323
GBP/CHF	1.3504	1.3574	1.3611	1.3681	1.3718	1.3788	1.3825