The Dollar’s downtrend continued yesterday as the USD dropped against all the major currencies. The Dollar’s most distinct bearish trend was marked against the GBP, as the pair was traded as high as the 1.6620 level.

In accordance to what appears to be developing into a pattern, the USD dropped in
spite of some positive figures published from the US economy yesterday. The weekly
Unemployment Claims report, which measures the number of individuals who filed for
unemployment insurance for the first time during the past week, dropped for the
fourth time in a row, this time to 601K. The figure is still quite large, and is far
from depicting a strong, recuperating economy. However, the trend surely seems to
favor the U.S. economy.

The U.S. Retail Sales figures were also published on Thursday, showing a 0.5%
increase in the total value of sales at the retail level. This figure reflect a
state of mind in which US consumers feel more comfortable to spend, which means they
have more confidence that their financial status will improve with time. This kind
of behavior is imperative in order to pull the economy out of recession, as only a
better cycling of funds has the ability to create a real change in the current
gloomy economic conditions.

As for today, there is the G20 Summit in Berlin Germany. Additionally, a batch of
data is expected from the US economy, and traders are advised to focus on two main
reports. First, the Import Prices which is scheduled for 12:30 GMT. This is one of
the earliest publications that try to predict the level of inflation. Traders should
also follow the Consumer Sentiment report, as analysts forecast another positive
figure for this indicator, which can further support the notion that the U.S.
economy returns to the fast lane.

* EUR
EUR Looks to Finish the Week Strong
EUR trading on Thursday was highlighted by the EUR/USD climbing back above the
1.4100 level. In a week that was showing bearish movement on the oft-traded pair,
the Euro rallied to make up ground on last weeks closing, as it trumped both the
greenback and the Yen. Yesterday’s push came shortly after the release of US
economic data. Positive change in US Retails Sales and Unemployment Claims did not
impress enough to drop the EUR for the USD, as the pair went bullish, as traders
bought back into higher-yielding assets.
Early Thursday morning, saw the release of the European Central Bank’s (ECB) Monthly
Bulletin, which reveals data gathered by the ECB Governing Board on the state of the
Euro-Zone economy. The report helped get the ball rolling on a bullish EUR trading
day.
Traders can look toward Industrial Production at 9:00 GMT and a speech by ECB
President Jean-Claude Trichet at 11:30 & 15:30 GMT for some indication to how the
rest of the day will go for the EUR. Traders should also follow news from the
opening of the G20 Meeting in Berlin, Germany throughout the day for any clues on
policy that could add volatility to the forex market.

* JPY
JPY Moves on Market Volatility
The Yen’s high volatility continued yesterday, as it saw contradicting trends
against the major currencies. On one hand, the JPY rose 15 pips against the USD
yesterday, as the pair closed at the 97.75 level. On the other hand, the Yen dropped
over 50 pips against the EUR, closing at 137.86 level.

It appears that lately the Yen is mostly affected by its counterpart currencies. The
USD is currently very weak, and thus the Yen consistently appreciates against it.
However, the EUR seems quite strong, and its recent appreciation has pushed down the
JPY.

Looking ahead to today, traders are expected to follow the main news events from the
US and Western Europe, and the commencement of the G20 Meeting in Germany later
today. Traders are advised to follow these events very closely as they may set the
pace for JPY trading later today.

* Crude Oil
Oil Eyes $75 a Barrel
Crude Oil’s bullish trend continues as the price of Crude continues to rise. Oil
rose 42 cents to finish trading at $72.39 yesterday. The main reason for Crude’s
bullishness was the positive economic data released from the US economy. The weak
Dollar also helped push up Oil prices yesterday. In addition, the International
Energy Agency corrected its demand projection and increased it to 120,000 more
barrels a day.

The bullish trend of Crude Oil looks to continue, with the potential of reaching $75
a barrel. Traders should follow the data published from the US, and news coming out
of the G20 Meeting later today, as these factors are set to play into Crude Oil’s
bullishness later today.

Technical News
* EUR/USD
The hourly chart is showing mixed signals with its Slow Stochastic fluctuating at
the neutral territory. However, a bearish cross forming on the 4-hour chart’s Slow
Stochastic implies that downwards correction might take place in the nearest time
frame. When the downwards breach occurs, going short with tight stops appears to be
the preferable strategy.

* GBP/USD
The price of this pair appears to be floating in the over-bought territory on the
4-hour chart’s RSI indicating a downward correction may be imminent. The downward
direction on the daily chart’s Momentum oscillator also supports this notion. When
the downwards breach occurs, going short with tight stops appears to be the
preferable strategy.

* USD/JPY
The pair has been range-trading for a while now, with no specific direction. The
daily chart’s Slow Stochastic is providing us with mixed signals. The 4-hour chart
does not provide a clear direction as well. Waiting for a clearer sign on the hourly
chart might be a good strategy today.

* USD/CHF
The typical range trading on the daily chart continues. Both the hourly RSI and Slow
Stochastic are floating in neutral territory. However, the pair currently sits near
the bottom border of the 4-hour chart’s RSI, suggesting an upward correction may be
imminent. When the upwards breach occurs, going long with tight stops appears to be
preferable strategy.

The Wild Card
* Crude Oil
Crude Oil prices rose significantly in the last month and peaked at $72.40 per
barrel. However, the daily chart’s RSI is floating in an overbought territory,
suggesting that the recent upwards trend is loosing steam and a bearish correction
is impending. This might be a good opportunity for
forex traders to enter the trend at a very early stage.

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