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Tips for Forex Trading,


USD May Turn Bullish Today.

Following yesterday's losses, the US dollar has the potential to stage a bullish correction today providing that this week's Unemployment Claims figure comes in as predicted. Analysts are currently forecasting a number of around 411K, which if true, would signal a further decline in unemployment in the US.

USD

Comments yesterday from Fed Chairman Bernanke sent the dollar plummeting against most of its main currency rivals, including the euro and yen. Bernanke voiced concerns regarding the high level of unemployment in the US, which investors interpreted as a sign that the Fed will continue with its stimulus package. The EUR/USD spiked well over 100 pips yesterday, peaking at just above the 1.3740 level. Meanwhile, the USD/JPY fell close to 40 pips, dropping as low as 82.18 during the evening session.
The dollar was able to stage a minor recovery in the overnight session, largely because riskier currencies like the euro lack strong fundamental news to boost them to new highs against the greenback. The EUR/USD fell over 20 pips, and is currently on its way to dropping below the psychologically significant 1.3700 level. The USD/JPY shot up some 25 pips last night, and is currently trading at 82.55.
Today, dollar traders will want to keep a close watch on the latest US Unemployment Claims figure, set to be released at 13:30 GMT. Given Bernanke's comments yesterday, today's figure is likely to carry more weight than usual in the marketplace.
Analysts are currently forecasting the number to come in around 411K, which if true, would represent a drop over last week. Barring any surprises, the positive employment data will likely lead to some gains for the dollar in the afternoon session.

EUR

The euro saw a bullish day yesterday following pessimistic comments from the US Fed Chairman regarding the current state of the US economic recovery. Against the dollar, the euro surged over 100 pips and was able to breach the psychologically significant 1.3700 barrier. The EUR/GBP moved up some 50 pips before staging a slight downward correction during the overnight session. In addition, the EUR/JPY has gone up close to 100 pips in the last 24 hours, and is not showing signs of a possible reversal.
Today, euro traders will want to pay attention to the fundamental news out of the UK and US. At 12:00 GMT, the UK will release its Official Bank Rate. Analysts are debating whether the MPC will raise national interest rates above their current level of 0.50%. If so, riskier currencies like the British pound and euro are likely to see strong upward movement. That being said, new unemployment claims in the US are expected to drop when the latest figure is released at 13:30 GMT. This could give the US dollar a boost against the euro in the afternoon session.

JPY

The JPY took losses against virtually all of its main currency rivals yesterday, as speculation that the demand for Japanese exports may be weakening weighed down on the currency. The GBP/JPY moved up close to 70 pips yesterday, and peaked at just below the 133.00 level. Currently the pair is trading 132.80. The EUR/JPY continues to move up after gaining more than 100 pips in trading yesterday. The pair currently stands at 113.15.
Today, yen traders will want to pay attention to the major news out of the UK and US. Should the UK Monetary Policy Committee decide to leave national interest rates at their current levels, investors may revert back to safe haven currencies like the yen in mid-day trading. Furthermore, if the US reports a drop in the number of people seeking first timeunemployment insurance, the yen is likely to see additional gains against the European currencies.

Technical Analysis

EUR/USD

Technical data is providing mixed signals for this pair. The 8-hour chart's Williams Percent Range is currently in the overbought region. At the same time, all indicators on the daily chart are in neutral territory and are not showing a specific direction for the pair. Traders may want to take wait and see approach today, as a clearer picture is likely to present itself later on.

GBP/USD

The Relative Strength Index on the daily chart is currently approaching overbought territory in a sign that a downward correction is likely to occur. Furthermore, the MACD on the same chart has formed a bearish cross. Going short with tight stops may be the preferred strategy today.

USD/JPY

The Stochastic Slow on the 8-hour chart has formed a bearish cross, meaning that downward movement is likely to occur today. Furthermore, the 4-hour chart's Williams Percent Range is currently in overbought territory. Traders are advised to go short in their positions today.

USD/CHF

The Williams Percent Range on the daily chart is in overbought territory and angling downward, in a clear sign that downward movement is likely to occur. The Relative Strength Index on the same chart is approaching the overbought zone. Going short is likely to be the wise choice today.

Wild Card

GBP/JPY

The Relative Strength Index on the daily chart is approaching overbought territory in a clear sign that downward pressure exists for this pair. Furthermore, the both the MACD and Williams Percent Range on the 8-hour chart indicate that bearish movement is likely to occur today. Now may be a great time for forex traders to open up sell position for this pair before the downward breach occurs.

Market Trend

 EUR/USDGBP/USDUSD/JPYUSD/CHFAUD/USDEUR/GBP
Daily Trenddownnonoupupdown
Weekly Trenddownupnoupnodown
Resistance1.38001.621083.550.97051.01800.8610
1.37651.617583.200.96701.01450.8575
1.37301.614082.850.96351.01100.8540
Support1.36551.606582.200.95601.00400.8470
1.36151.603081.900.96251.00050.8435
1.35801.600081.550.95900.99700.8400


Indicators

DateTime GMT$€£¥EventPeriodPrev.ForecastImp
2011-02-1000:00GBP
MPC Rate Statementhelp
**4
2011-02-1000:00GBP
NIESR GDP Estimatehelp
0.5%-3
2011-02-1000:30AUD
Employment Changehelp
2.3K20.3K5
2011-02-1000:30AUD
Unemployment Ratehelp
5.0%5.0%5
2011-02-1006:45CHF
SECO Consumer Climatehelp
7113
2011-02-1007:45EUR
French Industrial Productionhelp
m/m2.3%-0.3%3
2011-02-1008:15CHF
CPIhelp
m/m0.0%-0.1%3
2011-02-1009:00EUR
ECB Monthly Bulletinhelp
**3
2011-02-1009:00EUR
Italian Industrial Productionhelp
m/m1.1%0.4%1
2011-02-1009:30GBP
Manufacturing Productionhelp
m/m0.6%0.5%5
2011-02-1009:30GBP
Industrial Productionhelp
m/m0.4%0.5%1
2011-02-1012:00EUR
Buba President Weber Speakshelp
**3
2011-02-1012:00GBP
Asset Purchase Facilityhelp
200B200B5
2011-02-1012:00GBP
Official Bank Ratehelp
0.50%0.50%5
2011-02-1013:30CAD
NHPIhelp
m/m0.3%0.6%3
2011-02-1013:30USD
Unemployment Claimshelp
415K411K5
2011-02-1015:00USD
Wholesale Inventorieshelp
m/m-0.2%0.7%1
2011-02-1015:30USD
Natural Gas Storagehelp
-189B-191B1
2011-02-1018:30CAD
Gov Council Member Murray Speakshelp
**3
2011-02-1019:00USD
Federal Budget Balancehelp
-80.0B-69.5B3
2011-02-1021:45NZD
FPIhelp
m/m-0.8%-1
2011-02-1022:30AUD
RBA Gov Stevens Speakshelp
**5

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