Economic News

USD

The greenback missing some substantial ground from the majors a week and it reached an all time low against the EUR. The dollar opinion was driven by the weak jobs and housing figures which gave additional indiion that the US economy might be heading towards a recession. The Fed's hesitancy to reduce the interest rate has set the greenback on a slope and also the subprime and credit crisis have cast a shadow across the US economy. The news that's expected from the US Now is the Empire State Business Conditions Index and it measures the overall business conditions of producers from the New York State. It is forecasted to release 18.0, which can be well below the preceding figure of 25.0. It is going to reaffirm the fact that the US economy is slowing down, if the figure is going to be released inline or below expectations. With investors believing that the US economy is heading towards a recession it's likely that we might see this figure surprise. If this happens then the greenback could undergo some sharp bearish movement but it's more probable that it will range trade now as a result of investor warning.

Looking ahead to the rest of the week all of the market's attention will largely focus on Tuesday's interest rate decision and announcement by the Fed which is expected to reduce the interest rate by 25 basis points combined with a dovish announcement that will follow the interest rate statement. The Fed Statement will play a key role in specifying the markets opinion with respect to future interest rate expectations, while the rate cut should have an immediate effect on the market and provide the dollar with some respite particularly if the Fed springs a very rare surprise and drops the interest rate by 0.50%. The significant US information that investors will watch is the consumer inflation, US housing starts and the Philadelphia Fed Index.

EUR

The EUR performed solidly last week all across the board and it jumped to a new all time high against the greenback. No matter how the bullish EUR will start to undergo a downturn in momentum, as due to inflationary pressures and the credit crisis in the Eurozone, the ECB is unlikely to raise the interest rates before the year's end. Though Trichet and the ECB still appear to have a hawkish stance with respect to its imminent monetary policy, the market sentiment has changed and it will put the EUR under pressure in the future particularly if more cracks at the usually springy European economy start to appear.

Now the only news to be released, relevant to http://www..com, out of the Eurozone will be the Trade Balance which is expected to come in at 4.0 B, also well under the prior figure 5.2 B. The drop from the European Trade Balance may be partially attributed to the strong EUR and fledgling greenback, as it is making it tougher to European exporters to compete in the global markets. However this news won't lead to any volatility at the EUR and it must range trade now as investors will exercise caution ahead of Tuesday's US Interest Rate Announcement. Additionally the German ZEW report is supposed to be released on Tuesday and it's also likely to cause volatility at the EUR.

JPY

Early last week the JPY went to a bullish rampage on the back of the sharp rally of US equity markets however since then it has been on a gradual decline. There were strong indiions at the beginning of the week that we could see a sustained carry trade unwind but with the volatility of US stocks it's still too early to predict whether we'll see continuing risk aversion particularly with the Fed's interest rate decision on the horizon. There was not any news looking in the week and released from Japan from the Asian trading session, the Bank of Japan will announce its interest rate decision. The current market sentiment is that the Japanese interest rate will remain unchanged at 0.50%, therefore traders will pay close attention to BoJ Governor Fukui's remarks for hints to Japan's future monetary policy. The JPY could rise to new heights if the US Federal Reserve fails to cool the market on Tuesday and risk aversion will stay as a priority among shareholders.


Technical News

EUR/USD

The pair is trading at an All-time high and is currently in a tight range. It seems to have a little more momentum upward as supported by the 4 Hour chart. The slow and RSI stochastic are floating at the 40 degree, and are showing more space to run on the degree. The daily chart is currently showing a bearish cross on the stochastic which indies that a correction down is shut.

GBP/USD

The cable lost ground last week and is currently trading at 2.0060. The hourlies are showing that the bearish momentum is slowing and the bearish cross on the daily slow stochastic is encouraging the bullish notion. The following target price may be approximately 2.0120.

USD/JPY

The pair is currently trading at 115.40 which is the 23.6% Fibonacci level of the 124.00/112.60 move. A breach upward through that amount will affirm up the move at least up to the 38.3% degree which is 117.00. All oscillators encourage the bullish notion.

USD/CHF

After several unsuccessful efforts to break through the essential support of 1.1800 final week, the pair is showing positive momentum on the daily studies. The slow stochastic and RSI are showing strong positive momentum which indies that the following target price might be 1.1930.


The Wild Card

Crude Oil

The lowest barrier of the 4 Hour station was breached which indies that a bearish correction move is imminent. The slow stochastic is showing a strong bearish cross which may pull the Oil back to the 77.00 levels again. This is a superb prospect for Forex traders to profit from a correction move.