$$ US Dollar to Correct Broadly Lower Before Larger Advance Resumes

fundamental forecasts for the US Dollar: Rally
The Dollar finished trade week on a negative note after a new high of 18 months against high counterparts as a dismally disappointing we sent report employment tumbling prices. The logic of the bond of conduct seemed to Centre the growing possibility of a third round of reserve Federal quantitative easing (there) to the collapse, us recovery. This would probably dilute the greenback, producing losses similar to those observed in the wake of the previous efforts of QE the Central Bank. However, this logic seems misguided.
Us borrowing costs find us their way less well without intervention of the Fed. The benchmark 10-year Treasury obligations performance dropped to a record low 1.45% last week that the euro area sovereign risk fears led capital seeking refuge in us debt. After adjustment for inflation, the performance actually is-0. 60 percent, investors sense will actually pay Government bps 60 per year to care for their money. With the situation in Europe hardly on the road to healing, yields are likely to remain under pressure for some time, means that the marginal benefit of a program there would be very low at best and in arguing against expansion, the Fed balance sheet.
In this spirit, performance of the Dollar risk towards little more than profit-taking. The catalyst mainly brutal rally of the Dollar in recent weeks has rooted in fears of a Greek exit from the eurozone growing risk aversion. The slump in the sense has been aggravated by the testimony of mounting of wind for world economic growth of a recession in Europe and deep slowdown in Asia. While none of these concerns have been truly resolved, the fresh stock of negativity to drive continued sales in space of risky assets is executed may be dry, opening the door to a reflection.
Summit of the leaders of the EU concluded this month said unequivocally that policy makers intended to remain on the sidelines until the Greece installed a coherent Government and would then only with that which takes the reins to establish a way forward. Indeed, this is the fundamental concern vis à vis of Europe to hold until the second attempt at a general election is made in two weeks. During this time, the landscape of economic growth is desperate but thematic step unfamiliar to investors, given the large lines of performance trends in engines key outputs of the globe have been well established for some time.
On the front of national data, a relatively calm folder waiting for you in the coming week. The printing and survey service-sector ISM book the amount of economic conditions Fed Beige regional high level only on the calendar elements, nor likely to provide much result that traders do not have the price already. Fed Chairman Ben Bernanke is also due to testify before a joint session of Congress, traders will pay certainly strong attention to clues there. Property that the head of the Central Bank is likely to remain committed - relay one stimulus additional message familiar, always "on the table" but "reckless" if it means sacrificing price stability - it seems sure to recognize that turn the recent decline in the data. Markets can accept once more that as a fairly moderate to sell the greenback, amplifying the withdrawal until the Greece concerns recessional restart uptrend toward the beginning of the following week. -EAST

$- US Dollar Extends Advance Despite S&P 500 Resistance Break

25 May 2012 01: 48 GMT THE TAKEAWAY: US Dollar continued to press higher despite an upside break from the S & P 500 but highly technical studies warn that a pullback may be nearing overbought.
S & P 500 - Prices broke through resistance at 1322.10, the 23.6% Fibonacci tracing, after completing a Bullish Engulfing candlestick pattern above support at 1292.90. The bulls now aim to challenge the 38.2% Fib at 1341.70. The 1322.10 level has been recast as near-term support.
Daily Chart - Created Using FXCM Marketscope 2.0
CRUDE OIL - Prices put in a Harami candlestick pattern above resistance-turned-support at 90.49, hinting a corrective bounce may be ahead. Positive RSI divergence reinforces the case for an upside scenario. Initial resistance lines up at 92.51, form support marked by the December 16 low, with a push above that targeting the February 2 low at 95.41.

Daily Chart - Created Using FXCM Marketscope 2.0
GOLD - Prices narrowly slipped below support at 1560.98, the 23.6% Fibonacci tracing, exposing the next key downside barrier in the 50 1522-1532 45 region. The lack of meaningful belief on the break lower puts follow-through into question however, suggesting the 38.2% Fib at 1582.10 may still be the most significant near-term resistance threshold.

Daily Chart - Created Using FXCM Marketscope 2.0
US DOLLAR - Prices continued to edge higher after taking out resistance in the 10134-41 area marked by the 76.4% Fibonacci expansion and the October 2011 swing high. The bulls the 100% target level at 10241 as the major next upside objective from here. RSI studies are at their most overbought since prices set the last major top however, warning that the threat of a pullback is significant. The 10134-41 region has been recast as near-term support.
Daily Chart - Created Using FXCM Marketscope 2.0

.. Loonie Mixed as Canadian Retail Sales Rebound, Leading Indicators Advance

23 May 2012 13:48 GMT THE TAKEAWAY: Canada Retail Sales Bounced 0.4 Percent, Leading Indicators Rose 0.3 Percent> Positive Signal for Economic Growth Coming to the Middle of the Year > CAD Mixed
Retail Sales
Canadian retail sales rebounded more than forecast in March after February pullback, fueled by higher sales in motor vehicles, clothing, sporting goods, building material and garden equipment.
Sales in retail stores rose 0.4 percent to a seasonally adjusted C$39.05 billion in March, Ottawa-based Statistics Canada reported today. The print was higher than economist’s projection of 0.3 percent gain, according to Bloomberg News survey. The less volatile figure, excluding auto sector, modestly edged up 0.1 percent in Marchcompared to 0.5 percent increase widely predicted.Meanwhile, December’s reading was revised downwardly to a gain of 0.4 percent from a surge of 0.5 percent initially reported.
Gains were recorded in seven of eleven major categories that account for fifty-six percent of total retail sales in March. Sales at motor vehicle and parts dealers surged 1.2 percent as a result of 0.7 percent increase in receipts at new car dealers and 7.7% advance at other motor vehicle dealers. Similarly, building material and garden equipment posted 1.8 percent rise, a second consecutive monthly gain. Clothing and clothing accessories store sales also edged up 1.3 percent, largely attributable to 7.2 percent increase at shoe stores.
Regarding to region, retail sales climbed in four of thirteen major provinces in March. Most of gains were concentrated in Ontario (+1.2%) due to warmer than usual weather. On the contrary, News Brunswick registered the biggest decline of 1.5 percent.
Leading indicators
Another report issued by Statistics Canada at the same time showed that the Canada’s composite leading indicators rose for the tenth straight month in April on substantial improvement in housing sectors. The index surged 0.3 percent last month, matching with consensus forecast from Bloomberg Survey. Meanwhile, March reading was downwardy revised to a gain of 0.3 percent from an advance of 0.4 percent initially estimated.
The composite leading indicator comprised of ten components which significantly affect cyclical activity in the economy and together represent major categories of Gross Domestic Product. Seven of ten components registered gains in April compared to eight in the previous month.
Housing index advanced 3.5 percent, mainly contributed to the gain in April leading indicators. The financial components remained positive, as did employment in services. In contrast, manufacturing components deteriorated. New orders fell for the second month in the row (-1.2%) while the ratio of shipments and inventories have flatted.
USDCAD 1-minute Chart: May 23, 2012

Chart created using Strategy Trader – Prepared by Trang Nguyen
The Canadian dollar was traded mixed ahead North American session today as the loonie strengthens versus high-yielding currencies (Australian dollar, New Zealand dollar) but weakens versus safe-haven currencies (U.S. dollar, Japanese yen and Swiss franc). As can be seen from the 1-minute USDCAD chart above, the loonie immediately weakens 20 pips versus the greenback in the minutes following the retail sales and leading indicator reports. Nonetheless, the loonie quickly saw correction after ten minutes and edged 35 pips higher to $C1.021 per U.S. dollar.