Forex Blog

EUR/USD fell sharply today paring the weekly gain as the employment statistics in U.S. was released. Not only employment figures disappointed market participants, but also ISM services index declined faster than expected in June. But for some strange reason that supported the U.S. dollar and it showed the fastest daily gain since April 24. EUR/USD declined from 1.5890 to 1.5695.

Nonfarm payrolls lost 62k in June, that loss followed the same decline in May (revised up from 49k loss) and was worse than 60k of the forecast. Unemployment rate remained at 5.5%, while it was expected to fall to 5.4%.

ISM services index lost 3.5% in June and is now at 48.2%. It was expected to go down to 51.0% only. The current decline in this index followed decline in May, which indicates a real stagnation in the non-manufacturing sector.

EUR/USD grew today to its monthly maximum and remained well above the yesterday’s close level after the bad data on employment was released in U.S. today. Other economic releases failed to support the dollar today.

ADP employment report surprised markets with 79k drop in jobs in June, whereas the forecast was a 40k decline. This was the first drop in employment since February according to ADP.

Factory orders rose in May by 0.6%, better than the 0.5% growth in the consensus forecast, but below the April’s 1.3% growth (revised up from 1.1%). Manufacturing remains the only sector of the economy unaffected by the ongoing crisis.

Crude oil inventories decreased by 2 million barrels last week and they are still near the lower boundary of the average range for this time of year.

MetaQuotes Software is organizing its third yearly automated trading championship (basically a contest of the expert advisors). There are three sponsoring Forex brokers this time — FXCM, Interbank FX and FXDD. The total prize funds are $80,000 with $40,000 going for the first place, $25,000 — for the second one and $15,000 — for the third. The registration for the championship opened today, July 1, and will last until September 19th. The automated contest itself will start on October 1st and will run for almost 3 months until December 26th.

As always, this is a pure virtual money contest (but with the eal money prizes of course), which is free for anyone to participate. The expert advisors should be written for MetaTrader 4 platform and can be both in form of the source files (*.mq4) and in compiled form (*.ex4). The last year contest showed some very brilliant Forex expert advisor ideas with more than 1,300% gain on the winning one. This time the quality of the participants’ submission may get even better.

My expert advisor for the 2007 championship was quite lossy and I hope to get a rematch this time. I’ve already registered for this competition and I am looking forward to optimize some interesting EA before the contest starts.

Register for Automated Trading Championship 2008.

The dollar traded with an elevated volatility against the euro today, going both high above the opening level and diving down below it. The overall fundamental background is positive for the greenback today. Yesterday’s report on Chicago PMI index also supported the U.S. currency. Currently EUR/USD is trading near its open level at 1.5754.

Total construction spending in May was down 0.4% after 0.1% decline in April (revised down from 0.4% decline) — that’s not very good itself, but the markets awaited at least 0.6% drop in the spending, so this result may even benefit dollar bulls on Forex.

ISM report on manufacturing sector — PMI index — was very positive for June. It rose up from 49.6% to 50.2%, while a decline to 48.6% was expected. Growing PMI is another signal of the recovering economy despite the declining housing market.

Chicago PMI report for June was released yesterday and it showed a growth from 49.1% to 49.6% in the purchasing managers’ sentiment. The consesus forecast for the report was a decline to 48.0%.

Another broker supporting the MetaTrader 4 Forex trading platform took its rightful place in my list of brokers. This broker is called FastBrokers. It’s not a very new on-line broker — according to the Wayback Machine FastBrokers is on-line since 2006. Its head company is Fast Trading Services LLC, which is registered with NFA and CFTC. As a payment method they support PayPal, credit cards and, of course, bank wire. These factors combined make FastBrokers one of the most reputable MetaTrader Forex brokers available. The registration process is quite easy, which is also nice. Spreads are standard for these days — from 2 spreads on EUR/USD. If you don’t prefer depositing or withdrawing with e-currencies, this broker should be an interesting choice for you.

EUR/USD trend: sell.
GBP/USD trend: sell.
USD/JPY trend: buy.
EUR/JPY trend: buy.

EUR/USD corrected slightly today after fundamental data both from U.S. and Eurozone showed more support for the dollar rather than for the euro. Important consumer spending and income data arrived from U.S. today, while Eurozone released its business and consumer survey. EUR/USD fell from 1.5750 to 1.5742 today.

Personal income and outlays report showed 1.9% and 0.8% growth in May, respectively. That’s above 0.3% and 0.4% growth in April and 0.4% and 0.7% forecasts for May. Such good values for this important economic indicator may signal that the U.S. economy is recovering from the recent financial crisis.

Eurozone consumer confidence indicator went down in June from -15 to -17, while business climate indicator decreased from 0.58 to 0.14 the same month.

EUR/USD didn’t change from its upward trend today after the final Q1 GDP data was released. The currency pair continued to grow for a third day in a row and advanced today from 1.5664 to 1.5737 after the most important fundamental reports for today were released in U.S.

GDP in the first quarter of 2008 advanced at an annual rate of 1.0 percent — higher than 0.9 percent growth reported in the preliminary report and it has met the analysts’ expectations.

Initial jobless claims didn’t change last week — they remained at the revised value of 384k (revised up from 381k). They were expected to fall to 375k last week.

Existing home sales rose unexpectedly in May — to 4.99 million (annual rate) from April’s 4.89 million. They were expected to rise to 4.95 million.

EUR/USD grew today from 1.5571 to 1.5573 making it a second gaining day this week, but it’s still trading below the Monday open rate (which is 1.5627). All fundamental releases were quite neutral today, so they couldn’t help much neither dollar nor euro. Forex market participants await FOMC rate decision today.

Durable goods orders remained unchanged in May after a 1% decrease in April — and according to the market analysts’ forecast it shouldn’t been changing.

New home sales dropped from 525k annual rate (revised down from 526k) in April to 512k in May. It wasn’t a surprise to the markets; the average forecast was 510k.

Crude oil inventories gained 0.8 million barrels last week, but are still near the lower boundary of the average range for this time of year.

EUR/USD posted its first daily decline this week today — it went down from 1.5528 to 1.5489. Even bad employment data didn’t help the euro to get higher against the U.S. dollar.

Initial jobless claims fell from 386k to 381k last week, but nevertheless were higher than 375k forecast.

May leading indicators rose 0.1% in May a similar growth in April and forecasted stagnation for this month.

Philadelphia Fed index decreased slightly in June — from -15.6 to -17.1. It was expected to rise to -10.