Forex Blog

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

EUR/USD fell today significantly, recovering from its two-day fall that was observed this week. It went down by more than 0.8% today — from 1.5532 to 1.5380. Good fundamental indicators from U.S. helped dollar to strengthen on Forex.

Productivity in business sector grew up in first quarter of 2008 according to a preliminary report that was released today. Annual rate of the seasonally adjusted productivity growth was 1.9% in Q1 — above 1.5% forecasted by market analysts.

Crude oil inventories last week increased by 5.7 million barrels (quite a lot compared to recent increases) and are now in the middle of the average range for this time of the year.

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

EUR/USD broke down through 1.5400 mark today and reached the minimum level since the 24th of March as the employment fundamentals showed some improvement compared to the March results. Dollar managed to strengthen also against pound and yen even with objectively bad macroeconomic results.

Nonfarm payrolls — one of the main indicators of the U.S. economy’s health decreased 20k in April. That’s a lot better than the 80k drop in March and 75k drop that was forecasted for April. Still, the negative reading in payrolls is a clear sign of the recession danger. Unemployment rate was reported at 5% — below 5.1% in March and 5.2% expected for this month, but that indicator usually isn’t very accurate.

Factory orders jumped up significantly in March — they rose 1.4%, after a 1.3% decrease in February.

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

EUR/USD slid to its minimum value since April 14 today on Forex — 1.5675, as the investors started to consider the U.S. currency to be oversold and the further interest rate cuts by the Federal Reserve — unlikely. Fundamental data that was released today in U.S. was mostly disappointing, but that didn’t help the euro to grow against the dollar.

Initial jobless claims dropped 33k last week — from 375k (revised up from 372k) to 342k, which is below the expected 375k.

Durable goods orders decreased 0.3% in March, while February’s change was revised from -1.5% to -0.9%. The market analysts expected the orders amount not to change in March.

New home sales in United States dropped to 526k in March (annual rate) from 575k in February (revised down from 590k) — below 580k forecast.

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

The current situation on the EUR/USD daily chart seems like a good preparation for the long position. If you look at the picture below you’ll see three highs almost at the same level — 1.5902 on March 17, 1.5896 on March 31 and 1.5913 on April 10. The corresponding lows of these highs conclude an uptrend. Altogether they form an ascending triangle, which is the known continuation pattern:

Somewhere next week I expect the upper horizontal line to be broken and EUR/USD will be ready to head for the new absolute maximum near 1.6300-1.6500. I will probably set up a stop buy order at 1.5914 with a stop-loss near 1.5700 and target at 1.6350 to check this idea. But it will probably take a week or two to break the support level.

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

EUR/USD reached a new record high level at 1.5913 today, but after some positive fundamental data was released in U.S. the currency pair went down, as the dollar started to regain strength on the Forex market. ECB’s decision to hold the interest rates at 4% also improved dollar’s positions on the market.

Initial jobless claims unexpectedly fell by 53k the last week — from the revised 410k value to 357k. A fall to 383k has been expected by the market analysts.

February U.S. trade balance deficit came out to be far worse than the majority of the investors expected — $62.3 billion, up from January’s $58.2 billion. It was expected to go down to $57.4 billion.

Treasury budget deficit was lower than the expected $70.3 billion value in March. It was $48.1 billion — better than the last year’s $96.3 billion deficit for the same month.