Last week, the USD went through a bullish trend against most of its currency counterparts. The greenback gained around 400… … pips versus the EUR, trading at under 1.43 on Friday. The USD also saw big gains against the GBP and CHF.

The USD did experience some bearishness against the JPY towards the end of the week, due worse
than-forecasted economic data from the US against the JPY's positive momentum. The
USD took advantage of its currency rivals' bearishness last week, as the EUR
couldn't catch a break with a batch of bad economic releases. The USD also gained
momentum from Hurricane Gustav's-less-than expected effect on the US and the oil
companies, which drove down the crude oil prices. There were also a few American
economic releases that supported the USD, as the Factory Orders, ISM
Non-Manufacturing PMI and Total Vehicle Sales all beat forecasts. Traders should
notice that towards the end of the trading week, the USD started to slightly lose
value as worse than forecasted results from the Non-Farm Employment Change and
Unemployment Rate caught up with the greenback.

This week could end the USD's bullishness as the American stock markets' values have
been dropping and the financial crisis seems to continue. Over the weekend, it was
announced that the US Government seized control of mortgage giants Fannie Mae and
Freddie Mac. This will take a toll on the USD as the Treasury Department said it was
prepared to put up as much as $100 billion over time in each of the companies if
needed to keep them from going broke.
In terms of economic data releases this week, the very important Pending Home Sales
will be announced on Tuesday and are expected to fall to a negative rate, the Trade
Balance, PPI and Core Retails Sales are expected to decrease as well. Traders should
pay attention to Fed Chairman, Bernake's speech which is due on Tuesday at the White
House Initiative on Historic Black Colleges and Universities, in Washington DC.
Overall it seems like the greenback could lose its recent gains against its major
counterparts this week.

Traders should expect a fairly volatile opening of the market today as traders are
still grasping the effects of the US Government's control of Fannie Mae and Freddie
Mac, as well as the data that was released towards the end of last week that had
shockwaves slowly hit the USD. Later today should be more stable for the greenback
as there will only be one release of economic data, the Consumer Credit, which is
expected to be lower than last month. Some volatility might be seen after Federal
Reserve Bank of Dallas President Richard Fisher's speech in Austin with questions
expected from the audience.

* EUR
Small Rise in EUR Value Predicted To Be Short-Lived.
As the world turns its gaze upon the recent Fannie Mae/Freddie Mac bailout in the
United States, little attention is being paid to the small upward turn seen in the
value of the EUR. Last week the EUR continued its steady decline and ended up around
$1.42 on Friday. Contrary to this, however, the EUR now sits at $1.4408, albeit
somewhat unsteadily, which is a roughly 150 pip rise since the end of last week.
Largely credited to the drop in dollar confidence and not an appreciation of euro
value, the EUR nonetheless made one of its first significant upward moves in six
weeks. This is not necessarily viewed as a reversal in the market, however, as the
Euro-Zone is still predicting a recession given Germany's recently released
industrial figures.

Some analysts are holding out hope that this decline will come to a halt and
eventual reversal by mid-2009. However, given a lower European industrial output,
the global economic downturn, and a strengthening dollar, speculation on the EUR
will most likely continue to push it further downward, at least in the short term.

Looking ahead, ECB president Jean-Claude Trichet is set to speak twice this week.
The first will be his testimony to Parliament's Committee on Economic and Monetary
Affairs in Brussels on Wednesday followed Thursday by a speech he will be presenting
to a EUROFI conference in Nice. Traders should expect high volatility in the market
at these times as investors try to ascertain the future movement of interest rates.
Wednesday will be an important day for the EUR as France will also be releasing
their industrial production figures and trade balance.

* JPY
JPY Looks to Be Losing Momentum As It Starts the Week.
The Yen experienced bullish trends versus all of the major currencies during last
week's trading session. The Yen gained about 150 pips against the USD, trading at
slightly over the 107 level on Friday. Even bigger gains were seen against the EUR
as the JPY gained more than 600 pips in a week with the pair's slide closing off the
week under 107.20. Besides the notable bad economic data releases from most of the
world, the JPY had a few indicators that sparked its own momentum. The low yielding
currency has remained strong against its foreign counterparts after investors came
to the conclusion that the European Central Bank will not increase interest rates
anymore. As a result, foreigners buying Japanese goods are looking to buy Yen, which
is helping to strengthen the Japanese currency. Although the Capital Spending
release was worse than expected and the Japanese Prime Minister shockingly resigned
last week, the JPY wasn't affected by this very much it had a few other supporting
indicators. BoJ Governor Shirakawa held a speech around the same time, where he
indicated that Japan's economy will return to a moderate growth path. The drop in
crude oil price also led traders to expect a drop in transportation costs of
Japanese goods exported across the world.

This week started with a continuation of bullishness for the JPY as the release of
the M2 Money Stock on Sunday showed a better-than-expected figure; beating its
forecast and last year's result. Look for more volatility this week as a fair amount
of economic data will be released daily from Japan, with the most notable releases
being: Quarterly Final GDP, Monthly Core Machinery Orders and Revised Industrial
Production. Besides the Revised Industrial Production which is expected to stay at
the same rate, the other two main figures are expected to be lower than their
previous results. The question this week for the Yen will be whether traders will
believe that the weak data that is expected to come out from Japan is part of the
global effects from the American financial crisis and will soon be in Japan, or
whether the JPY is having an economic slowdown not unlike what Shirakawa said last
week, and is going to face a sharp fall. Traders should also keep tabs on the USD
and EUR trends this week as they could continue to be very dominant factors in the
Yen trends this week.

* OIL
Hurricane Threat Delays Oil Reproduction from the Gulf of Mexico.
The price on crude oil starts to escalate after nearly a five month's decline. The
oil reserves of the Gulf of Mexico are been threatened once again by an upcoming
hurricane. Crude oil is traded at $108.95 a barrel, an increase of 2.6%. The Gulf of
Mexico, the biggest offshore producing region in the U.S, hasn't recuperated yet
from Hurricane Gustav. Oil production hasn't been fully resumed and now a new
hurricane, Hurricane Ike, will shut down the refineries again for at least another
week. The National Hurricane Center projects the hurricane to move into the Gulf in
the next two days at Category 3. So far it is still unclear what will be the size of
damage to the oil refineries from the hurricane. Oil companies are concerned that
they will have to stop the oil production again as a result of a new hurricane
coming near the Gulf.
Hurricanes are not the only events that investors are preoccupied with. The recent
news that the U.S government has taken over Fannie Mae and Freddie Mac, the
nation's biggest home loan companies weakened the dollar. Since the dollar and
crude oil prices are closely interwoven, the decrease of the U.S currency affects
the trade of oil directly. Though for the long run the federal takeover is designed
to stabilize the U.S financial market, for now the market appears to be uncertain
regarding its long term outlook As a result of the dollar's instability, oil prices
continues to swing. For the next few days the traders will continue to closely
watch the Hurricane Ike's development in the Gulf which will have an impact on the
price of crude.

Technical News
* EUR/USD
The pair is in the midst of a bullish correction, and is currently traded around the
1.4400 level. As all oscillators on the 4 hour chart are pointing up, another
bullish session might take place. Going long seems to be preferable.

* GBP/USD
It seems that the cable has limited its bullish reversal after peaking at 1.7975. A
bearish cross on the one hour chart's Slow Stochastic indicates that the pair could
resume its bearish trend. Going short with tight stops might be the right strategy
today.

* USD/JPY
The 4 hour chart shows that the pair is in the middle of a bullish move, as it is
now traded around the 108.70 level. The RSI on the 4 hour chart is floating around
the 50 level, suggesting that the bullish trend might be elongated, with potential
price target of 109.50.

* USD/CHF
After a mild bearish correction that dropped the pair down to the 1.1050 level, the
pair seems ready to recommence its general bullish trend. A bullish cross on the one
hour chart's Slow stochastic implies that the bullish move is quite imminent. Going
long might be the right choice today.

The Wild Card
* Gold
After a period of volatile sessions, all oscillators on the daily chart are
providing bullish signals, suggesting that Gold is building a strong bullish
momentum. Currently traded at $813, Gold might aim at the $820 mark in the near
future, giving
forex traders an opportunity to enter the trend at a convenient price.

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