Yesterday the greenback was bearish against its rival currencies, continuing its decline from the beginning of the week. Throughout the… … trading day, the EURUSD was being traded just under 1.5800, the GBPUSD reached 1.9730 and the USDJPY declined to under 103.00.

Following the previous day highlighted by the lower than forecasted PPI, yesterday
the greenback was greatly affected by the announcement of -5.4M Crude Oil
Inventories and hawkish comments from the FOMC meeting. Crude Oil has reached an all
time high this week and its bullish surge continues to negatively affect the
American economy.

As hawkish comments and notes from the FOMC meeting were released, traders became
ever more wary of the USD. The main news coming from the FOMC meeting has been the
intention of the Federal Reserve to resist any possible Interest Rate cuts in the
near future, downgrading estimates for economic growth in 2008. As a result of the
weaker USD and the negative American Inventories, Crude Oil reached a new all time
record, trading above $134 per barrel.

Looking into the very important FOMC meeting held yesterday, traders should focus on
the data that was released by Fed policymakers. In their projections, Fed officials
predict the US economy to grow somewhere between 0.3% and 1.2% this year, much
slower than the 1.3% to 2.8 % forecast made in January. Last October, the Fed
expected US economic growth as high as 2.5% this year. The Fed now expects the US
jobless rate to rise to 5.5% – 5.7% this year, higher than the 5.2% rate seen in
January.

Looking ahead to today, the very important US Unemployment Claims will be released
with forecasts predicting 373K claims, 2K higher than the previous month's claims.
Half an hour later, Fed Governor Kroszner will deliver a speech titled “Prospects
for Recovery and Repair of Mortgage Markets”. Traders should look for further hints
regarding the Fed's future intentions. The main news event that will affect the
USD's momentum will be Unemployment Claims. As forecasts expect more claims than
previously, traders should expect further bearish momentum from the greenback.

* EUR
Yesterday, the EUR saw bullish trends against rival currencies, especially vs. the
weak USD. The EUR's rise in value resulted mostly because of very good German
economic news. The German Ifo Business Climate index, measuring the mood of firms in
manufacturing, construction, wholesale and retail was releases, beating out
forecasts at a value of 103.5. The German Ifo Business Expectations index also beat
forecasts, measuring at 97.3. Both indices fueled the continuation of the EUR
bullish momentum.

Experts conclude that as inflationary pressures rise, traders appear to prefer
currencies where inflation targeting has been upheld better – namely the EUR. In an
interview with French regional daily Ouest France, ECB governing council member
Christian Noyer, said that he believes the financial crisis is not over. Noyer also
mentioned that the Euro zone Gross Domestic Product (GDP) grew over 1% in the last 6
months and that the growth rate is becoming very close to normal. In fact, the
economic data that was released yesterday from Germany, further supported Noyer's
comments.

On tap today from the Euro-zone, traders should keep a close look at Italian Retail
Sales and even more importantly EUR Industrial New Orders. Both data released are
expected to be lower than their previous values, which might hurt the EUR's latest
rise. Traders should pay close attention to Retail Sales because it is usually the
first significant indicator of the month that relates to consumer behavior and is
susceptible to surprises.

* JPY
Yesterday, the JPY saw mixed movement against its major currency rivals, highlighted
by major gains against the weak USD. The Yen gained positive momentum from Japan's
All-industries Index, which beat out forecasts, but was affected negatively by a
lower than forecasted Trade Balance. Overall, the Yen has seen volatile trends and
was mostly affected by the movement of its rivals.

Yesterday's mixed news from Japan was made up of the All Industries Activity Index,
which covers a broad range of economic activity including spending in the services
sector. This indicator printed at 0.5%, beating the low expectation for -0.2%.

On the other hand, the Trade Balance data surprised, printing at a lower then
expected 0.61T. Other interesting news yesterday was released by the Japanese
Ministry of Finance, which stated that although foreigners have sold a lot of
Japanese bonds, they were the net buyers of Japanese stocks.

Today, traders should expect another mixed trading session in Japan, as most of the
Yen's movements will be based on its rivals' momentum. At 23:50 GMT, The Bank of
Japan will release its Monetary Policy Meeting Minutes, which will help traders
understand the Japanese market's current state. The wild card that might be the
deciding factor in the JPY's trading direction might be the Crude Oil, as its rise
in price causes future economic slowdown in Japan.

Technical News
* EUR/USD
There is a wide opening channel forming on the 4 hour chart as the pair floats near
its upper barrier. After breaching the key 1.5720 resistance level yesterday,
oscillators now show that the momentum is bullish and a breach through 1.5820 will
validate a bigger bullish move into the 1.5900 levels again.

* GBP/USD
Daily chart shows that the pair is still trading within its wide range with no
specific direction. However, a fresh bullish signal can be seen on the 4 hour chart,
and together with a positive slope on the daily Slow Stochastic, the bullish
momentum is still quite strong. Going long appears to be the preferable strategy for
today.

* USD/JPY
The 4 hour chart shows that the pair continues an aggressive bearish move within the
wide flat channel of the daily chart. The Slow Stochastic on the daily chart
indicates that the momentum is relatively strong, and the RSI supports the bearish
notion. Next target price might be around 102.50, and if breached we should see a
stronger bearish move being validated.

* USD/CHF
According to the hourlies the pair is still in a bearish configuration. However, a
positive slope on the Slow Stochastic of the 4 hour chart implies that the reversal
of the current bearish trend is possible. The 4 hour chart's Relative Strength Index
(RSI) swings low further supporting the possibility of the reversal. Traders should
wait for a stronger signal before jumping into the bullish trend.

The Wild Card
* Crude Oil
The violent bullish surge continues with all oscillators showing the continuation of
the trend. Fresh all time highs are being breached on a daily basis and Oil is now
floating at 134.20. The RSI is showing that the bullish momentum is still quite
bullish.
Forex traders have a great chance of enjoying the additional momentum still left
for the commodity.

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