Japanese Yen Rallies After Bevy of Disappointing US Data

Japanese Yen Rallies After Bevy of Disappointing US Data
THE food: USD existing home sales (JUN) > 4,37 M (5.4%) compared to 4.62 M (+ 1.5%) expected from 4.62 M (0.0%) > USD leading indicators (JUN) > 0.3% vs. 0.1% expected by + 0.4% > USD Philadelphia Fed index (JUL) > 12.9 to 8.0 expected from 16.6 > EURUSD BEARISH
The news always worse for the U.S. economy, since a few months ago was world economy the favourite and is now only a further decay in the photo, the global growth. Three 'medium' importance (after the DailyFX economic calendar) data releases for the US economy have been released, disappointed by 10: 00 am EDT / 14: 00 GMT, and all three. Namely:
Existing home sales for June fell to an annual rate of 4,37 m from 4.62M, well-below 4.62 M pace expected. Sales fell by 5.4% over month while a gain of 1.5% was planned. Leading indicators for June shrank by 0.3%, faster than the 0.1% forecast fall in. The July Philadelphia Fed index improved, but remained the stretched compared to 8.0 expected negative to 12.9. The data come measures to improve the growth prospects at a crucial time, as the Federal weighs reserve more stimuli, but remain questions about what exactly is going to happen. Each Chairman Ben Bernanke was as made clear over the last two days half-yearly report on monetary policy to Congress, while the Federal can do more reserve, if necessary, the necessary structural improvements in the economy will come only through a prudent fiscal policy. To the United States ' said that fiscal policy is corrected, the US economy will continue to fight, no matter what does the Federal Reserve. USD/JPY 1 minute chart: 19 July 2012
Charts created using MarketScope prepared by Christopher Vecchio
Following the bevy of disappointing versions of the US dollar initially strengthened, the AUDUSD send lower from 1.0422 to as low as 1.0401, before recovering to 1.0417, which was written at the time of this report. The EURUSD behaved as well as diving from 1.2244 to 1.2230.
The big winner was the Japanese yen, as investors shed the US dollar as the play favorite safe haven: the AUDJPY fell from 81.97 to as low as 81.73; the EURJPY dropped from 96,27 to as low as 96.13; and the USDJPY fell to 78.52 of 78,64, before recovering to 78.57, at the time of this report was written.

New Zealand stalled after rising credit card spending in dollars...

THE TAKE: the credit card spending by 0.4% in May, 3.9% per year> New Zealand Dollar little changed after he met in the last 24 hours.
The New Zealand dollar was little changed after the credit card spending rose by 0.4 percent in May and 3.9 life years gained per cent over the previous year. Positive spending fell in line with the better-than-expected growth of GDP over the same period.
Risk-sensitive assets, including high-NZD were sold off in the last 24-hour operation, in part probably a German version of Purchasing Managers' Index smooth and discounts from Moody fifteen banks internationally. The room was a small correction to the great movement on another occasion before the release and seems to have continued in the same direction.

Oil, gold could rise after profit-taking sell-Sharp ...

Crude rises White Superior Copper correct profit taking gold, the risk-weighted assets and have a range of silver to be jumping entries Ebbing New Haven to raw materials in U.S. dollars on the rise in European trading and profit-taking gently lifted risky assets after aggressive sell-out yesterday, the shadow of the headwinds of a disappointing German IFO reading. Prices fell in the last 24 hours as global fears of further economic growth, according to the directions of deepening weakness in China, the euro zone and the United States against the backdrop of the muted hopes for stimulus Fed. Ben Bernanke, and the company decided to expand the QE at a meeting of the FOMC rate decision to suspend committee earlier this week. Moody's decision to downgrade the credit ratings of 15 of the world's largest banks reinforces the dour mood.
For the future, the S & P 500 stock index futures are up, which means more of the same is ahead. Crude oil and copper prices are ready to follow the stock higher, while gold and silver is de facto support a restoration of confidence Haven reduced demand for the dollar. Dallas Fed Manufacturing Survey headlines from the calendar on the hours of the U.S., with expectations calling for a flat reading in June, after the indicator has the biggest drop since September 2011 released last month. New report from May for the House and the Chicago Fed National Activity Index must also cross the wires.
In the meantime, a two-day meeting of finance ministers in Brussels to follow. Coming on the heels of the G20 summit earlier this week, where officials are included in the region face severe pressure from world leaders to step up efforts to the debt crisis, which may be seen sit-down, the occurrence of some preliminary policy ideas. Specific initiatives are likely to wait until the summit of EU leaders next week, but traders continue to pay particular attention to comments to be paid from the sidelines during the first clues.
WTI Crude (NY Close): $ 78.20 / / -3.25 / / -3.99%
Prices broke below the 23.6% Fibonacci b expansionat 81.07, revealing the level of 38.2% to 77.34. Sale is further directed by this edge of the expansion of 50% to 74.40. The 23.6% Fibonacci resistance has been recast as a short term ...

 Daily Chart - Created Using FXCM Marketscope 2.0
Spot Gold (NY Close): $1566.28 // -41.20 // -2.56%
Prices 1600/oz took the figure and 38.2% Fibonacci retracement from 1582.10 to challenge the interim support at 1554.73. A break below this limit makes from 1522.50 to 32.45 range. The limit of 1582.10 has been revised to be as short-term resistance....

Daily Chart - Created Using FXCM Marketscope 2.0
Spot Silver (NY Close): $26.89 // -1.27 // -4.51%
Prices are testing the support at 26.75, on May 16 under, with a break in the low exposure of the Triple higher in 26.05. Short term lines of resistance up to 27.84, the bottom of the formation prior to rotating table flag, which previously acted as a support.

Daily Chart - Created Using FXCM Marketscope 2.0
COMEX E-Mini Copper (NY Close): $3.298 // -0.090 // -2.66%
The prices will test support at 3296, 23.6% Fibonacci expansion. A downside breakout shows in the tri-support 3.250. Short term resistance is at 3.384, the Fibonacci retracement of 23.6%.

Daily Chart - Created Using FXCM Marketscope 2.0

Objectives of crude oil higher as Gold retreats after Greek election

Discussion points
Crude oil, copper higher as Greek target Vote Stokes risk appetite or pensions as Greek eurozone exit threat disappears on the growth of the election of crude oil and copper prices are accelerating in a general improvement in risk appetite after a general election in Greece the weekend produced enough votes for the main pro-bailout Pasok and new democracy parties form a coalition Government. The result downgraded fears of imminent Greek exit from the euro area, stimulate appetite and risk weighing on refuge go - to currencies. Investors fear that a disorderly ejection from the country of the currency bloc may if Syriza – a party pushing back on the terms of bailout from the EU and the IMF – emerge victorious.Gold is low that the application of dents of result for the metal as a safe haven store. Money is little changed.
S & P 500 futures index point, suggesting mood on the risk will likely see at least in the immediate future. If the week Spanish bank bailout last be repeated however, which may be mere hours. The election effectively returns on the markets for the status quo in place six weeks before the end of the first attempt to installation of a new Government without result. Now as at the time, the evolution of the euro-zone debt crisis seems likely to act as a slow simmer, not a sudden rupture triggered by an event. The negative consequences of a collapse of the eurozone for global economic growth have not become less important, the recent recovery of casting in risky assets as corrective in the context of a larger downward yet dynamic in game.
An empty folder of European economic data suggests a sale auction of French binding as the solitary piece of risk of the event scheduled on the calendar. Paris sell 8.70 billion € in good 12 months to mature. Traders will look to submission to cover reading and performance mean to evaluate the euro area sovereign risk fears. While the tenor short debt on offer would generally be a poor response from price action, the proximity of the Greek election could amplify the impact of the results, traders can be regarded as a referendum on the ability of the vote in a significant relief. Comment sideline of the g-20 meeting if in the Mexico is also sought guidance.
Crude oil WTI (near NY): $84.03 / / + 0.12 / / + 0.14%
The prices are more border after putting in a model of candlestick line upward Piercing above 81.07, 23.6% Fibonacci expansion support. The bulls are now designed to challenge on June 7 in figure 87.00. 14.6% Fib to 83.30 has been redesigned as a short-term support.

Daily chart - created with FXCM Marketscope 2.0
Spot Gold (near NY): $1627.10 / / + 3.38 / / + 0.21%
Prices are stalling after having taken a set of trend fall line of early March. Resistance in the short term remains 1637.35, the tracing of 76.4%Fibonacci, with a break that exposing may 1 to 1671.49. 61.8% Fib to 1616.23 has been redesigned as a short-term support.
Daily chart - created with FXCM Marketscope 2.0
Cash (near NY): $28.69 / / + 0.05 / / + 0.17%
Prices continue to go back to graphic training of flag, a bearish continuation facility. Confirmation is required on a daily close below the model - now unit - which would expose 27.06 as the next objective of disadvantage. The first major resistance layer aligned to 29.71.
Daily chart - created with FXCM Marketscope 2.0
COMEX E-Mini Copper (near NY): $3.384 / / + 0.030 / / + 0.89%
Prices have resistance 3.384, the tracing of Fibonacci 23.6%, with the bulls now to challenge the 38.2% Fib to 3.474. The 23.6%retracement has been redesigned as a short-term support.

Daily chart - created with FXCM Marketscope 2.0

Pound expected Greek after election for the Direction signals

Fundamental forecasts for the pound sterling: neutral

Financial markets have turned their attention to the outcome of the Greek elections of the weekend, and the pound sterling is no exception. A swelling of the correlation between GBPUSD and the MSCI World Stock Index--a proxy for trends in sense of risk of the whole of the market - is the UK currency squarely at the heart of the volatility as Greek voters to choose between a Government which would respect the commitments of Athens, according to the terms of bailout of the EU and the IMF and the other who abandon them. The last course of action would likely pave the way for the Greece to get out of the euro zone.

Opinion polls place the pro-bailout of the new democracy (ND) party and its main antagonist Syriza in dead heat before the election, suggesting that he is unlikely to win a majority of Director of each side. This means that the most likely result is the emergence of a kind of coalition. In this spirit, a positive feeling and thus GBP-support result would see ND and the public left Pasok party enough votes to form a United front of pro-bailout, fears of a Greek departure of the currency bloc disorder. Any post-election result that fails on this front rises to both Sterling and risk appetite.

While the result of the election of Greek will set the tone for the coming week, it is unlikely to establish a firm trend as such. Finance Ministers of the euro area are rumoured plans a teleconference immediately following the result of the election to suppress any major upheaval in the financial markets, if a jurisdiction. A more formal meeting of the Eurogroup is scheduled for the end of the week in the Luxembourg. Separately, the leaders of the g-20 are due to a peak of two days just after the results of the vote, with the debt crisis the euro almost certainly high on the agenda. All this activity makes the overwhelming probability of high volatility of sentiment trends and Sterling by extension, with a directional bias should emerge that after all the dust firmly falls concrete.

The economic calendar is apparently packaged with the title of press. Minutes of the meeting of the Bank of England from June political developing that may s ICC, of employment and retail sales reports are all due to crossing of the son. Implications for the action of the prices seem a little limited, however given their limited monetary policy after impact than the Central Bank Governor Mervyn King them preempted by the announcement of a new credit-loan program intended to ready UK last weekend. The said extent guaranteed term Repo (ECTR) will provide banks at least 5 billion pounds sterling per month for a period of at least six months and spread a minimum of 25 bps. Although fully operational details are a little murky, Setup is likely to prove GBP-negative over time, if it is acquired with the new creation of liquidity similar to the trigger.

-EAST

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$$USDJPY Tumbles after Poor US Retail Sales, PPI Data

13 June 2012 13:10 GMT THE TAKEAWAY: US Advance Retail Sales (MAY) > -0.2% m/m from -0.2% m/m > JPY, GOLD BULLISH
THE TAKEAWAY: US Produce Price Index (MAY) > 0.7% y/y from 1.9%m/m > JPY, GOLD BULLISH
The rally by high beta and risk-correlated assets stalled in their pre-market rally following the disappointing Advance Retail Sales report and Produce Price Index for May released on Wednesday. The reports, released at 12:30 GMT, painted two distinct pictures with the same conclusion: the US economy is weakening. The first report showed that sales contracted by 0.2 percent last month, after contracting by a revised 0.2 percent in April. A large part of this decline can be attributed to falling gasoline prices, with a 2.2 percent decline coming in gasoline station sales. When discounting autos, then autos and gasoline, sales still contracted by 0.4 percent and 0.1 percent, respectively.
The weakness in oil prices wasn’t only evident in the Advance Retail Sales report for May, however. The Producer Price Index for May showed that prices contracted by 1.0 percent on a monthly-basis after contracting by 0.2 percent in April. According to a Bloomberg News survey, m/m PPI was expected to decline by 0.6 percent. On a yearly-basis, prices inflated by 0.7 percent from 1.9 percent in April, below the 1.2 percent forecast. Excluding food and energy prices (for the so-called “core” reading), prices were sticky; however, coming it at 2.7 percent y/y in line with the prior month’s reading.
USDJPY 1-minute Chart: June 13, 2012

Charts Created using Marketscope – Prepared by Christopher Vecchio
Following the release, the USDJPY took a dive lower from 79.64 to 79.40, at the time this report was written. Considering the pair’s range for the past few hours – trading between 79.60 and 79.73 – the move lower was clearly a sign that market participants have put a greater weighting in the QE trade. To confirm this, one needs to look no further than Gold, which rallied from $1611.88/oz to as high as $1623.60/oz. The commodity currencies were lower as well, with the AUDJPY dropping from 79.39 to 79.13, at the time this report was written.

##Crude oil, but can increase as markets Settle after Spain rescue volatility

12 June 2012 06:52 GMT Talking Points
Crude Oil, Copper May Rise as Sentiment Trends Settle After Spain Bailout Volatility Gold and Silver Could Drift Higher on Moderating Safe-Haven Flows into US Dollar Commodity prices are in negative territory overnight, mirroring a selloff across Asian stock exchanges. The MSCI Asia Pacific regional benchmark equity index fell 1 percent amid skepticism about the ability of Spain’s bank bailout deal struck with Eurozone finance ministers over the weekend to calm debt crisis fears gripping the region. Yields on benchmark 10-year Spanish bonds jumped to 648.7bps yesterday, marking the highest level in over a week and showing investors were not sold on the country’s sovereign stability profile despite the aid package. The proximity of Greece’s second attempt at electing a coherent government due June 17 – where the ailing country’s Eurozone membership seems to hang in the balance – likely reinforced the dour mood.
Looking ahead, S&P 500 stock index futures are pointing higher to suggest risk aversion may moderate as markets return toward a neutral setting after Monday’s seesaw volatility and await the next driving catalyst for price action. This opens the door for sentiment-geared crude oil and copper prices to correct higher while gold and silver find support amid easing safe-haven demand for the US Dollar. The bi-annual ECB Financial Stability Review looks to be the most significant bit of event risk on the economic calendar. While traders are unlikely to be particularly surprised by the risks that the central bank will probably identify, the intense focus on Eurozone-linked instability can nonetheless make for a sharp reaction from price action in the absence of other major drivers.
WTI Crude Oil (NY Close): $84.10 // -0.72 // -0.85%
Prices took out support at 83.30 the 14.6% Fibonacci expansion, to challenge the 23.6% barrier at 81.07. A break beneath this boundary targets the 80.00 figure and the 38.2% Fib at 77.33. The 14.6% expansion has been recast as near-term resistance.

Daily Chart - Created Using FXCM Marketscope 2.0
Spot Gold (NY Close): $1596.77 // +3.32 // +0.21%
Prices remain wedged between 1599.17 and 1582.10, the 50% and 38.2% Fibonacci retracement levels, respectively. A break higher exposes the 61.8% Fib at 1616.23, a barrier reinforced by a falling trend line in place since early March. Alternatively, a push downward through support targets 1554.73, followed by the 1522.50-1532.45 area.

Daily Chart - Created Using FXCM Marketscope 2.0
Spot Silver (NY Close): $28.57 // +0.07 // +0.25%
Prices are treading water below resistance at 28.70. A break higher exposes 29.71. The overall structure appears to be showing a Flag chart formation, a setup indicative of bearish continuation. Confirmation is required on a daily close below the pattern’s bottom – now at 28.12 – which would expose 27.06 as the next downside objective.

Daily Chart - Created Using FXCM Marketscope 2.0
COMEX E-Mini Copper (NY Close): $3.344 // +0.058 // +1.77%
Prices continue to hover below resistance at the top of a falling channel set from the May 1 swing high, now at 3.334. A break higher initially exposes the 76.4% Fibonacci retracement at 3.426. Double bottom support lines up at 3.250, with a break below that targeting the 123.6% Fib extension at 3.080.

 123.6% Fib extension at 3.080.

Daily Chart - Created Using FXCM Marketscope 2.0

Euro Weakens Intraday after Data Shows Drop in German Industrial Production

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By David Schutz, 06 June 2012 10:26 GMT THE TAKEAWAY: German industrial production weakened in May -> Euro well bid on the day but weakens after data

German industrial production fell more than expected in April, the German stats bureau said today. The data added to fears that growth in Europe’s largest economy is slowing as the far-reaching credit crisis curbs demand and consumer confidence. Production fell 2.2% on the month versus the expected 1% drop. The number was -0.7 weaker than April 2011.

Germany has remained the region’s strongest economy since the onset of the crisis, recently posting Q1 economic growth of 0.5% which helped the Euro-area avoid recession. Today’s numbers increased fears that that economic woes will catch up with Germany, which has thus far benefitted from low unemployment and increased exports to emerging markets.

The Euro remained well bid on the day, but suffered from the weak German numbers intraday. Fears of political instability have driven the single currency down since the beginning of May.

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06 June 2012 10:26 GMT

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++++Aussie rallies after RBA cuts key rate by 25 Points as expected

Cut the takeaway: Reserve Bank of Australia June decision > 25 - bps rate, as expected > AUDUSD distributed on the rise
After cutting 50 basis points last month, the deterioration of Asian and European growth images prompted other rate by the Bank of Australia reserve. The RBA only reduced the rate of 25 - bps from 3.75% to 3.50%, according to the median forecast provided by Bloomberg News. However, with credit Switzerland Overnight Index swap price to 50-50 chance for a cut of 50 - bps, a surprise was in the cards and price action has certainly not disappointed.
Chart 1-minute AUDUSD: 5 June 2012

Graphing with Marketscope - prepared by Christopher Vecchio
Early release price action suggested that only a 25 - bps cut was due, the Dollar Australian rallying in all areas but particularly against the Yen and the U.S. Dollar. However, a few minutes before the release, it appeared that a cut of 50 - bps has filtered, with trade AUDUSD 0.9755 for only 0.9718 a minute before the decision was announced. However, with only 25 - bps down the chimney, the AUDUSD quickly regained ground and traded to 0.9791 shortly after. During the that drafting this report, the AUDUSD had plunged to its preliminary level before rising back to 0.9784.
Governor Glenn Stevens noted concerns in release covers of the RBA, with lots of time spent discussing the financial situation and global growth before touching on the evolution of the Australian economy. Presented below, without comment, are the key points of the policy statement:
Growth of the world economy, picked up in the first months of 2012, according to slow in the second half of 2011. Other moderation of growth in China. Conditions in other parts of Asia have largely recovered from the effects of natural disasters of the last year, but the trend is not clear and can be mitigated by the slowdown of Chinese growth. The United States continue to grow at a moderate pace. Raw material prices decreased lately, even if they are still mainly high. Terms of Australia of trade, reached about six months ago but they remain high. Financial markets:
The Council previously noted that Europe remains a potential source of adverse shocks. Economic and financial Europe's prospects have again been overshadowed by a weakening of growth, political uncertainty increased and concerns about the financial viability and strength of some banks. Capital markets remain open to spoil banks and corporations, but increased spreads. Long-term interest rates facing highly rated sovereign, including the Australia, have fallen to exceptionally low levels. The markets declined. In Australia:
In Australia, the available indicators suggest a modest growth continued in the first part of 2012, with significant variation between sectors. In all conditions of the labour market strengthened slightly, despite the excretion in certain industries, and the unemployment rate is low. Households and businesses continue to show a degree of behaviour of precaution, which may continue in the short term. Given this surprise (at least according to base swaps), in combination with the poor, we labour market reading Friday which has inevitably fueled speculation there, the AUDUSD might be initiated for a race towards the support of the former trendline from 0.9845/60. Gatherings should be covered by the 0.9880/0.9900, and a near daily over this area exposes 0.9930 and parity, 1.0000. Beyond these levels, we see little room for the AUDUSD to acquire new, because we believe that the ongoing stress in Asia and Europe will generate more-risk aversion, and gatherings should be seen as opportunities to sell.

US Dollar Roars and Reverses After Jobs Data

In the last months, these pages have warned the slowdown of global growth and gross as the leading indicator. Crude fell 18% in may, compared with only a little more than a 6% decrease in the 500 S & P. Reitterating the position that raw is the head ("say" If you want to) in the next wave of develeveraging, shares are probably much more in the coming months. This means of course more to the USD but probably not before a withdrawal (more that below). We will not consider. the NZD was the big loser in May against the USD (other than the MXN and SEK). My goal is to stay on the higher yielding AUD and NZD in June. It is easy to get lost in the press and the volatility if allowed to happen…so does. Keep it simple; identify the main levels and know what you are going to do when these levels is achieved.
Action of today may mark the beginning of a movement of the opposite trend. I hope that this is so that we can buy USD at the best price. As always, the beginning is important because extreme prices are more likely to occur in the first days of the month (especially the first day). In this spirit, I would consider a brutal price correction which may lasts a week.
***
Dow Jones FXCM Dollar Index (Ticker: USDOLLAR)
Daily

Prepared by Jamie Saettele, CMT
Jamie - the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) arises today to tag 103000 before reversing sharply. The withdrawal was difficult, but a new month offers a new perspective and the pivot (in time) that trade. 10220 is initial support. 10129-10147 would finally be the ideal level to go long with a stop under 10076. In the event where a withdrawal does not materialize then I will adjust levels accordingly.
Euro / US Dollar
Daily

Prepared by Jamie Saettele, CMT
Jamie - the EURUSD crashed through 12300 after the NFP exit before recovering quickly. Next support is not up to 12150 but ideally reversal of today reports a depletion in the short term and the beginning of a higher corrective approach. Preliminary resistance now 12500 12640-12715 would be ideal for the short in if reached.
Pound sterling / US Dollar
Weekly

Prepared by Jamie Saettele, CMT
Jamie - Cable absolutely stagnated this week and actually recorded its largest monthly decline since October 2008 to 5.11%. The decline of this week is the largest since the week that ended on 25/11/11. I have had recent action completely wrong because I was expecting a short rebound before 15600 to make more closely 15850. No there was no rebound courses (the GBPUSD has not yet reach the average of 10 days) and the GBPUSD has taken almost all of the gains from 2012 and reached the trendline that extends off the coast of the hollow of 2009 and 2010. The January low is 15233. May fall below there is necessary before we receive a greater recovery. Resistance would become 15460-15530 then 15630-15720.
Australian dollar / US Dollar
Daily

Prepared by Jamie Saettele, CMT
Jamie - the AUDUSD is traded under the bottom of November today and its lowest level since October, 2011. The objective of June should be to align with the larger bear trend, which is difficult to psychologically given the magnitude of the decline. 9800 and 9900/50 are the resistance. We will treat targets when we get there, but a descending slope channel is some 9115 this month.
New Zealand Dollar / US Dollar
Weekly

Prepared by Jamie Saettele, CMT
Jamie - the NZDUSD tested once more on December low and listed on the stock exchange in the gap that was left open from 28/11/11, before recovering. The objective of June should be to align with the larger bear trend, which is difficult to psychologically given the magnitude of the decline. resistance is 7675-7720. We are going to deal with targets when we get there, but it is noted that the NZDUSD is drag below long term of head neck and shoulders.
US Dollar / Japanese Yen
Every day bars

Prepared by Jamie Saettele, CMT
Jamie - USDJPY traded in mid-February congestion today before rebounding strongly (on what could have intervention). Once again, the time of the month (at the beginning) combined with the intraday (reversal) action offers an opportunity. I have noted daily RSI, which is almost 30. In General, this level (30) will be held if a larger bubble is underway (from the record low in this case).

? Euro Stays Down after Softer German Inflation

THE TAKEAWAY: German CPI eased in May -> Pullback caused by reduction of energy prices -> Euro weak on the day
German May inflation numbers came in softer than expected, fueled by a decline in energy prices. The yearly consumer price index in Europe’s largest economy eased to 2.1% from 2.2% in April, which was also the expected number for May. Inflation fell 0.3% on the month.
The relief in inflation pressures was attributed to a drop in oil prices as political tensions in the Persian Gulf show signs of easing. Speculation that Greece will exit the Euro region continues to curb consumer spending from companies and households, although record low unemployment rates in Germany have contributed to rising demand.


The Euro remained weak on the day after the German CPI release. The single currency has fallen sharply against the Greenback and Yen over recent weeks as instability in Greece threatens its security. Markets remained poised to absorb upcoming US consumer confidence numbers later on Tuesday.

$ US Dollar May Pull Back After Breaking Out of Seven-Month Congestion

23 May 2012 04:27 GMT  THE TAKEAWAY: The US Dollar is staging an impressive recovery to once again challenge key resistance at the 2011 swing high. S&P 500 positioning warns of a deeper upswing.
S&P 500 – Prices stalled ahead of resistance at 1322.10, the 23.6% Fibonacci retracement, with a Doji candlestick pointing to indecision. Initial support lines up at 1310.00, the 14.6% Fib, with a break below that exposing the May 21 low at 1290.30. Importantly, the Bullish Engulfing candle pattern identified yesterday remains valid, leaving the possibility of upward resumption still on the table. A break above resistance clears the way for a test of the 38.2% retracement at 1341.70.

stance clears the way for a test of the 38.2% retracement at 1341.70.

Daily Chart - Created Using FXCM Marketscope 2.0
CRUDE OIL – Follow-through failed to materialize after prices completed a Bullish Engulfing candlestick pattern yesterday and took out resistance at 92.51, a former support marked by the December 16 low. Crude has now slipped back below that level, exposing horizontal pivot support at 90.49 once again. Still, the Bullish Engulfing remains valid absent a daily close beneath its low at 90.90, leaving the door open for a rebound. A break back through 92.51 targets the February 2 low at 95.41.
Daily Chart - Created Using FXCM Marketscope 2.0
GOLD – Prices recoiled from resistance marked by the 1600/oz figure as well as the 50% Fibonacci retracement level at 1599.17, taking out support at 1582.10 marked by the 38.2% level and exposing the next downside objective at 1560.98. A break below this boundary exposes the 1522.50-1532.45 area. The 1582.10 level is once again acting as resistance.
Daily Chart - Created Using FXCM Marketscope 2.0
US DOLLAR – Prices soared through resistance in the 10134-41 area marked by the 76.4% Fibonacci expansion and the October 2011 swing high, exposing the 100% level at 10241 as the next upside objective. The move marks a major tone shift from the congestion defining prices for nearly six months. However, early signs of negative RSI divergence warn that a pullback may materialize before the rally continues. The 10134-41 region is now recast as near-term support.
Daily Chart - Created Using FXCM Marketscope 2.0

$ U.S. Dollar Extends Gain after April New Home Sales Exceed Forecast

23 May 2012 15:12 GMT THE TAKEAWAY: U.S New Home Sales Rose 3.3 Percent in April> Recovery in Housing Market Helps Boost Economic Growth > U.S. Dollar Extends Gain
Purchases of new single-family houses in the U.S. bounced back more than forecast in April after hitting four-month low in March. Coupled with rebound in April existing home sales, a surge in new home sales fuels investors’ optimism over recovery in the world’s biggest economy since animprovement in the housing market helps boost consumer expenditure and spur demand in durable goods in coming months.
New home sales climbed 3.3 percent at a seasonally adjusted annual rate of 343,000 units,U.S. Census Bureau and the Department of Housing and Urban Department jointly reported today. The print is well above median projections of 335,000 units from the Bloomberg News Survey. Meanwhile, sales in March were upwardly revised to 332,000 units from 328,000 units. Still, sales of new homes were far from the average 700,000 annual rate that recorded in healthy market.
Recent improvements in labor market and exceptionally low mortgage rate made home more affordable for new buyers in some parts of the country. April new house sales advanced in three of four U.S. regions. The Midwest registered the biggest monthly gain, up 28.2 percent to 50,000. Similarly, sales in the West mounted to 88,000. On the contrary, new house purchases in the South unexpectedly tumbled 10.6 percent to 177,000 units.
The median sales price of new house sold in April was $235,700 while the average sales price was $282,600. Besides, house price index gained 1.8 percent last month compared to 0.3 percent increase in March, Federal Housing Finance Agency said today. House price purchase index rose 0.6 percent in the first quarter in contrast to 0.1 percent decline in the previous quarter.
USDCAD 1-minute Chart: May 23, 2012

Chart created using Strategy Trader – Prepared by Trang Nguyen
The U.S. dollar strengthens versus most of its major peers except its Japanese trading partner about Greece’s debt problems and more rumors on Greek Euro exit. The greenback extends gains against the single currency after the home sales report. TheRelative Strength Indicator crossing below 30- territory during thirty minutes signaled that forex trading crowd was aggressively selling off euro in favor of greenback. At the time this report was written, the euro trades at $1.2582, below 20- and 50- minute exponential moving average lines.

Loonie Remains Strong after Canada's April Inflation Rose More than Forecast

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By Trang Nguyen, 18 May 2012 13: 34 GMT THE TAKEAWAY: Canada Consumer Price Index Rise 0.4 Percent in April > the Inflation within Target Encourages Bank of Canada to Preserve its Low Interest Rate Policy throughout 2012 > CAD Remains Higher

Canada's inflation remained stable at 0.4 percent in April for the fourth straight month as rising price pressures on cars and clothing offset easing pressures on energy and gasoline.

Canada Consumer Price Index is at a current level of 122(2), up 0.4 percent from121.7 in the previous month, the Ottawa - based Statistics Canada reported today. As such, the consumer prices remained stable at 0.4 percent for the fourth straight month. The reading exceeds 0.3 percent gain projected, according to the Bloomberg News survey. Over a year prior, the all items index regained to 2.0 percent from 1.9 percent in March.

The rise in year-to-year cost of energy substantially softened to 1.1 percent in April, following 5.1 percent increase in March and 7.2 percent upsurge in February. Similarly, gasoline prices climbed only 3.3 percent last month compared to 6.6 percent and 8.9 percent in the previous two months. Meanwhile, transportation costs surged 3.2 percent in the twelve months to April while the food prices advanced 2.5 percent.

The Bank of Canada's core index rose 0.4 percent on monthly basis and gained 2.1 percent on yearly basis. Those numbers are consistent with the Bank of Canada's forecast last month that consumer prices would advance average 2 percent this quarter and 2.2 percent in the second half of the year.

USDCAD 1-minute Chart: May 18, 2012

Chart created using Strategy Trader - Prepared by Trang Nguyen

The Canadian dollar gains ground versus most of its major counterparts ahead of an opening bell in North America trade today. The loonie immediately extended advance in the minutes following the Consumer Price Index report. Canada's April inflation meets its central bank target of 2.0 percent, thus indicating low chance of rate hike in near term. As seen from the 1-minute USDCAD chart above, the currency pair fell about 30 pips from 1.0160 to 1.0140. Nonetheless, the greenback quickly saw a correction after thirty minutes, trades at $1.0166 at the time this report was written, higher than its level before the data release.

-Written by Trang Nguyen, DailyFX Research Team for DailyFX.com

To contact Trang, email tnguyen@dailyfx.com

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18 May 2012 13: 34 GMT

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TradeTheNews.com Asian Market Update: Risk-aversion at a boil after Moody's cut

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(CL) CHILE CENTRAL BANK LEAVES OVERNIGHT RATE TARGET AT 5.00%, AS EXPECTED
- (CN) CHINA APR NEW HOME PRICES M/M: FELL IN 43 OF 70 CITIES V 46 PRIOR; Y/Y: FELL IN 46 OF 70 CITIES V 37 PRIOR >- (JP) JAPAN CABINET MAY MONTHLY ECONOMIC REPORT: UPGRADES ECONOMIC ASSESSMENT (First upgrade in 9 months)
- (KR) South Korea Mar Conference Board Leading Economic Index: -1.5% v +2.9% prior

***Markets Snapshot (as of 04:45GMT)***
- Nikkei225 -2.5%
- S&P/ASX -2.4%
- Kospi -2.6%
- Singapore Straits Times Index -1.6%
- Shanghai Composite -1.1%
- Hang Seng -2.6%
- Jun S&P Futures -0.2% at 1,298
- June gold -0.1% at $1,573/oz
- June Crude -0.6% at $92.01

***Overview/Top Headlines***
- Asian equity markets are sliding ever lower in the final trading session of the week, giving little reverence to the G8 summit taking place this weekend in Camp David. Regional indices are off by over 2% just about across the board, S&P500 futures have reversed initial gains to fall over 7 handles, while EUR, AUD, and NZD are all at fresh multi-month lows against the greenback. Govt bonds of US and Japan meanwhile are firmly bid, broadly benefiting USD and JPY currencies. In commodities space, front-month crude has also pared initial gains to fall over $1.00 below $92/brl, while copper retraced its run-up from $3.49 all the way down to $3.45.

- Continued selling has been attributed to more bad news from Europe, where Moody's cut the ratings of 16 Spanish banks by 1-3 notches. Top two banks - Santander and BBVA - bore the brunt of the action with a 3-notch downgrade to A-3, as the credit rating agency noted deteriorating asset quality and little expectation of improvement for the sovereign economy. In China, April home prices saw accelerated declines with 1.2% y/y slide in prices vs -0.7% drop in the prior month. Prices also fell m/m and y/y in 43 and 46 cities respectively out of 70 cities.

- Japan cabinet economic monthly report saw the defiant govt upgrade its economic assessment for the first time in 9 months on expectation of continued reconstruction-related demand. Exports and consumer spending were also upgraded, even as Japan remained mindful of Europe-related risks. Finance Min Azumi noted economic data suggests Japan is in good shape and Econ Min Furukawa saw prospects for sustained recovery. Tokyo officials also argued the recent strength in JGBs reflects market perception of the safety of the asset, just as 10-yr yields hit multi-year lows of 0.82%.

***Speakers/Geopolitical/In the press***
- (CN) According to gov't economist Zhu Baoliang, lending rates could be cut as soon as the current quarter (Q2), but rates could be left unchanged amid concerns about inflation - financial press >- (CN) China Q2 GDP estimated around 7.5% y/y; Inflation around 3.3% - Chinese press citing State Information Center
- (EU) Former ECB Pres Trichet: EMU needs more integration measures such as emergency federal powers to guard against significant risks in Europe - financial press
- (JP) Japan lawmakers continue to oppose entry into TPP free trade talks - Nikkei News
- JPM: Purchased European MBS and other debt securities over the past 3 years, building a position of as much as $100B - FT

***Equities***
- (AU) S&P/ASX extends decline below 4,070; Down over 2.2% and at lowest level in 2012
- TM: To expand capacity at 2 of 3 engine plants in N America; Total investment seen at about $110M - Nikkei News
- BIDU: To cooperate with Foxconn in a launch of cloud computing smartphones - Chinese press
- ACH: Received regulatory approval for a $1B IPO in Hong Kong - financial press

**US Equities**
- CRM: Reports Q1 $0.37 v $0.34e, R$695M v $678Me; +6.4% afterhours >- GPS: Reports Q1 $0.47 v $0.46e, R$3.49B v $3.5Be; +4.7% afterhours
- INTU: Reports Q3 $2.51 v $2.48e, R$1.95B v $2.0Be; -0.1% afterhours
- MRVL: Reports Q1 $0.23 v $0.20e, R$796M v $769Me; +3.0% afterhours
- AMAT: Reports Q2 $0.27 v $0.24e, R$2.54B v $2.4Be; -0.7% afterhours

***Fixed Income/Commodities/Forex***
- AUD/USD: Extending decline below $0.9870; 6-month lows
- NZD/USD: Extending decline to $0.76; 6-month lows
- EUR/USD: Extending decline below $1.2666; fresh 4-month low
- Japan 10-yr JGB yield falls to 9-year lows below 0.82%
- iShares Silver Trust ETF daily holdings rise to 9,619 tons from 9,516 tons (highest level since Apr 11th)
- SPDR Gold Trust ETF daily holdings rise by 2.1 tons to 1,278.7 tons (highest since Apr 27th)
- (MX) Mexico central bank gov Carstens: Mexico inflation is low and stable; Volatility in MXN does not change impact inflation or call for adjustment in monetary policy - financial press
- (US) Weekly Fed Balance Sheet Assets Week ending May 16th: $2.83T v $2.85T prior; M1: -$34B v -$4.0B prior; M2: -$1.7B v +$57.1B prior

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$ EURUSD Falls 1.2770 Greek Government after does not form

may 15, 2012 13: 36 GMT  who said that the Greece was not relevant? After becoming a little later of actors of the market for first months of the year, the May 6 elections catapulted the Greece to the stage of the world for what appears to be the last act of the saga of the Greek sovereign debt. With the Centre, pro-bailout parties, conservative party new democracy and PASOK left party, lost power in fringe, anti-bailout parties, mainly, the extreme-left Syriza, have raised concerns that the Greece could end up leaving the euro. Last week, each major party, first new democracy, then Syriza and PASOK, were given mandates to form a coalition Government. Each failed, leading to the final meeting one today.
However, all built hope that Greek leaders may find common ground was displaced. The rhetoric left and right was standoffish, at least, with the left (Syriza) calling for a moratorium on the debt and the Centre (ND and PASOK) are demanding further austerity measures to receive additional subsidies in the Euro area. Today, the worst fears were realized, when the Greek leadership, announced that no coalition Government was formed in a last-ditch effort, and that new elections could come. It is a low development of the experience of the Euro, as this probably means that the anti-bailout, primarily the Syriza parties, will gather sufficient support to form a coalition on their own. This could result in Greece by default on its debt and leaving the euro entirely - a frightening prospect but objectively possible nevertheless.
EURUSD chart of 1 minute: May 15, 2012
Graphing with Marketscope - prepared by Christopher Vecchio
Immediately after the news, the Euro has been violently in all, collapsing currency refuge, the Yen and the U.S. Dollar. In fact, against the later, we see that the EURUSD has fallen of 1.2841 for only 1.2770 in twenty minutes after the announcement. Although there was a small rebound, given the seriousness of the problems of the Euro area, it is likely that the continuous sale EURUSD should concerns hit the bond market (which they seem to be in Italian and Spanish yields note 2 years of climbing).

€ Euro Rallies After Draghi Presser Despite No New Policy Actions

Fundamental Headlines
- Canadians Dominate World’s 10 Strongest Banks – Bloomberg
- Jobless Claims in U.S. Decline More than Forecast – Bloomberg
- Mario Draghi’s Introductory Statement – ECB
- ECB Holds Rates, Resisting Calls for Crisis Actions – Reuters
- Solid Demand for Spain Bonds – WSJ
European Session Summary
Higher yielding currencies and risk-correlated assets traded mostly lower in the overnight, but volatility and price ranges were contained overall as market participants eagerly awaited the outcome of the European Central Bank’s policy meeting midway through the European trading session on Thursday. As Euro-zone stresses have risen in the past few weeks, not in the form of liquidity issues for banks but rather a crisis of confidence, there have been calls for the ECB to introduce more measures to bide time for governments struggling to implement austerity measures. After today’s meeting, it is clear that the Mario Draghi ECB is going to hold out for as long as possible when considering new policy measures, as President Draghi noted that the ECB “didn’t discuss” a rate cut at this month’s meeting.
In terms of President Draghi’s statement, the outlook provided by the ECB was certainly downbeat. According to President Draghi, the ECB sees “downside risks” to the Euro-zone economic outlook, saying that the outlook has become more “uncertain.” On the topic of inflation, the ECB sees price pressures in line with prices broadly balanced over the medium-term horizon. Similarly, the ECB notes that liquidity is abundant in the Euro-zone and that short-term real rates are negative in all Euro-zone nations, further supporting President Draghi’s outlook that inflation will be tethered to the medium-term target at 2 percent.
The big development, or lack thereof, was the ECB’s commentary on what their intentions are with their securities market program (SMP), the facility the central bank uses to intervene in the secondary bond markets to purchase sovereign debt (mainly PIIGS). President Draghi said that the SMP is neither “eternal nor infinite,” and while the program is “still there,” the ECB never “pre-commits.”
Overall, while the Euro rallied across the board following the statement, this could be in part due to the expectations that the ECB might cut rates at this meeting – I find that the “weak” hands were shaken out of the market during the press conference. Instead, with the ECB offering little more substantive support, the increasing tensions between politicians and policymakers is expected to continue, with more governments coming out to offer lip service to the notion that the Euro-zone just needs to grow – as if it were that simple given current market conditions. There’s little contained within the ECB’s statement and the President Draghi presser that would suggest the Euro’s intraday rally is sustainable.
EURUSD 5-min Chart: May 3, 2012

Charts Created using Marketscope – Prepared by Christopher Vecchio
Following the press conference, the Euro took back much of its losses, and even rallied up 0.09 percent against the US Dollar overall. The Canadian Dollar remains the strongest currency, with the USDCAD depreciating by 0.13 percent. The Australian and New Zealand Dollars were among the weakest majors, shedding 0.45 percent and 0.97 percent, respectively.
24-Hour Price Action
Key Levels: 13:05 GMT

Thus far, on Thursday, the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) is trading higher, at 9902.44 at the time this report was written, after opening at 9890.80. The index has traded mostly higher, with the high at 9923.23 and the low at 9887.13.

_-_ Cable retreats after report of the slowdown in manufacturing growth signals United Kingdom

May 1, 2012 09: 11 GMT  the takeaway: UK PMI manufacturing comes to 50.5, below expected 51.5-> slows the growth of production can be contributed to the sharp decline in new export-> cable return from six months of high dropsIndex of the United Kingdom purchase managers for the manufacture of April reached 50.5, below expectations of analysts of 51.5, export of new orders were at their steepest rate since May 2009. Although the PMI is always greater than 50 and therefore considered positive, the index is low the month 51.9 last revised level.
New export orders fell because of weaker demand from continental Europe, the United States and Asia. Higher prices contributed to the decline of manufacturing in the second half of 2011, which means that the industrial recovery could be slow for some time.
PMI is a gauge that weighs the activity of production and prospects for the future. The Institute approved for purchasing and supply and Markit Economics communicates the monthly index, which is based on a survey of executives in the private sector.
It is the fifth straight month the PMI manufacturing came in above 50, signalling expansion. However, the slowdown in manufacturing growth comes a few days after a technical recession was launched in the United Kingdom when GDP was lowest reported for 2 quarters in a row.

Cable fell sharply after weak manufacturing data, falling back below the 1.6200. Yesterday, the couple made a new six-month high just below 1.6300, but retracted earlier today. EUR/GBP has continued its rise higher after the PMI publication, also stimulated by the Euro already climbing.

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May 1, 2012 09: 11 GMT

€ Euro Pressured after Survey Says Consumer Confidence to Weaken German

The Takeaway: German GfK provides weakening-> energy costs consumer confidence, inflation weakens the weight given the power to purchase-> Euro against US Dollar

The German consumer confidence will decrease in May that rising energy costs weakening purchasing power of households, the Institute German GfK, said today. The GfK consumer confidence index can set revised drop 5.6% to 5.8% in April. Markets expected a reading of may of 5.9%, based on the median forecasts by a team of economists.

Rising prices of energy have been seen weighing on household spending as inflation creeps power by threatening to torpedo the economic recovery of Europe. Fears of inflation have seeped to the surface in Germany property increase prices and monetary policy remains loose. Rising inflation in Germany could have repercussions generalized to the rest of the Germany of the given euro size and influence of the 17-nation bloc.

>> Risk Rally Loses Momentum After Euro Fails to Join Party

Risk correlated asset well bid after IMF raises global growth forecasts Pound emerges as strongest currency following impressive data and Minutes EUR/CHF finds bids on talk of SNB rate checking Canadian Dollar remains well bid post upbeat Bank of Canada Risks still associated with Spain; Thursday auction results in focus China still showing signs of slowdown; expected to weigh on markets Looking for US Dollar to find renewed bids over coming sessions BOE Minutes more hawkish, UK employment number better The rally in risk correlated assets on Tuesday was impressive and market participants took the opportunity to aggressively buy back into global equities, with the US stock market leading the charge. As was to be expected, commodity currencies performed well on the renewed optimism, with the Canadian Dollar standing out after receiving an added boost from a more upbeat Bank of Canada outlook on the local economy. Meanwhile, the Australian Dollar managed to shrug off an early dovish Minutes, with AUD/USD rallying back above 1.0400. Lack of any meaningful first tier economic data releases did not stop investors from being active, and a good deal of the risk-on price action was attributed to the news that the IMF raised its 2012 global growth forecasts to 3.5% from 3.3%, while upping its assessment for the G7 economies.

Relative performance versus the USD Wednesday (as of 9:40GMT)

GBP +0.33%

CAD +0.07%

NZD -0.16%

AUD -0.15%

EUR -0.38%

CHF -0.45%

JPY -0.79%

Still, we were uncomfortable buying into the risk rally and contend that markets are locked within a choppier consolidation that will ultimately lead to yet another bout of risk-off trade and intensified concern with the outlook for the global economy. While we did see some supportive comments on Spain on Tuesday, and even though auction results were better than expected, there is still a lot of risk associated with the Eurozone, and these risks pose potential threats to the broader macro environment.

The Euro has reacted accordingly, and has been far more reluctant to join in the market rally over the past few sessions, which we believe is quite telling. The more significant 2014 and 2022 Spanish auction results are due tomorrow, the outcome of which will help to clearly define the underlying sentiment in the region. However, should the Euro accelerate to the downside and break back under 1.3000 ahead of tomorrow’s auction results, then even a positive showing will do little to offset the expected deluge of offers on the technical establishment below the psychological barrier which will once again expose the 2012, 1.2660 lows.

Data out of China has also not been impressive, and the latest news that average home prices in 70 major cities have posted their first Y/Y decline since government property curbs were imposed 2 years ago, offers additional evidence of an economy which is showing cooling signs. As we have stated a number of times over the past several months, we believe that an accelerated China slowdown is still on the horizon which will manifest as the third phase of the global macro recession which began in 2008. This should put more pressure on global equities and correlated currencies like the commodity bloc and emerging market FX, while at the same time benefitting the US Dollar on flight to safety bids and the attractiveness to a US economy which was first into the crisis and likely to be the first to exit.

Moving on, the big mover in today’s trade has been the Pound, with the currency outperforming across the board on the back of a one-two punch, in the form of a much better than expected UK employment report and more hawkish BOE Minutes. The big surprise in the Minutes came from the vote on asset purchases, where notoriously dovish Posen reconsidered his stance and reigned in his need for additional easing. Posen had previously dissented in favor of additional purchases to the tune of GBP350B, but fell into line with the majority and voted to leave as is at GBP325B. The unexpected result helped to bolster Cable back into the 1.6000 area, while additional Sterling bids were fueled by heavy cross related selling to fresh yearly and multi-month lows in EUR/GBP. However, there is some very solid support in EUR/GBP at 0.8140, and bids should emerge ahead of the level. Elsewhere, EUR/CHF continued with its choppy trade just over the well publicized 1.2000 barrier and rallies back above 1.2020 on talk that the SNB was in the market checking rates.

ECONOMIC CALENDAR

 TECHNICAL OUTLOOK

  EUR/USD: The latest round of setbacks have stalled ahead of some key multi-week support by 1.3000 and from here we still can not rule out risks for additional consolidation above 1.3000, before considering bearish resumption. Ultimately, any rallies towards 1.3300 should be well capped, while a break and daily close back under 1.3000 would accelerate declines to the early 2012 lows at 1.2660.

 USD/JPY: The latest pullback from the 2012, 84.20 highs was viewed as corrective and it looks as though the market has finally found some solid support ahead of 80.00. The setbacks have stalled by the top of the daily and weekly Ichimoku clouds and we look for the formation of a fresh medium-term higher low somewhere around 80.00 ahead of the next major upside extension back towards and eventually through 84.20. Overall, this is a market that has undergone a major structural shift in recent months and we now see the pair in the early stages of a longer-term up-trend. Ultimately, only a weekly close back under 78.00 would negate.

 GBP/USD: Failure to establish any fresh momentum on the recent break above 1.6000, followed by an aggressive bearish reversal, now suggests that the market could finally be looking to carve a top in favor of a more significant decline over the coming sessions. Look for a break and close below next support at 1.5800 to reaffirm outlook, while back above 1.6065 would be required to negate.

 USD/CHF: Our core constructive outlook remains well intact, with the latest setbacks very well supported by psychological barriers at 0.9000. It now seems as though the market could be looking to carve a fresh higher low, and we will be watching for additional upside back towards the recent range highs at 0.9335 over the coming sessions. Above 0.9335 should accelerate gains towards the 2012 highs by 0.9600 further up. Ultimately, only back under 0.9000 delays and gives reason for pause