Yesterday the Dollar depreciated against all its main currencies crosses. The greenback’s biggest drop was against the EUR, as the EUR/USD pair rose above the 1.4150 level. The Dollar also dropped against the Pound and the Yen as well.

The Treasury International Capital (TIC) published the Long-Term Purchases report
yesterday. This report measures the difference in value between foreign long-term
securities purchased by US citizens and U.S long-term securities purchased by
foreigners during May. The figures showed a negative balance of $19.8 billion. The
data also showed that China’s holding of U.S treasury securities topped $800
billion. The gigantic debt has raised concerns that it might have the potential to
erode the value of the Dollar in the long term.

Also yesterday, the Philadelphia Manufacturing Index, which is used to measure the
business conditions in the Federal Reserve district, was published. The report
showed a -7.5 mark, which means that the factory activity in the district has
contracted for the 10th consecutive month in July. This contributed to the Dollar’s
downfall as well.

As for today, very important housing data are scheduled from the U.S. At 12:30 GMT,
both the Building Permits and Housing Starts indicators will be published. The two
are leading gauge of the housing sector in the U.S, and has the potential to
severely impact the market. According to current forecasts, the housing sector has
shown relatively positive figures in June. If the actual result will be similar or
even higher than forecasts, the USD might be able to correct yesterday’s slide.
Traders are advised to follow the publications, and take advantage of their impact
on the market.

* EUR
EUR Hits 2 Week High against the Dollar
The EUR continued its bullish trend against the Dollar yesterday, and the EUR/USD is
currently trading near the 1.4130 level. The EUR rose against the Pound as well and
declined slightly against the JPY.

The EUR climbed against the Dollar as poor data was released from the U.S economy
and Crude Oil’s prices rose, which further weakened the Dollar. This drove the
European currency to a 2 week high against the USD.

The positive data from the Euro-Zone leading nations also supported the EUR
yesterday. The French Consumer Price Index rose 0.1% in June, showing that fears
from deflation are very unlikely, resulting in a temporary relief for the crisis-hit
economy. The Italian Trade Balance, which measures the difference in value between
imported and exported goods and services during May, rose by 1.19 billion EUR. This
has a crucial impact on the Italian economy, which relies greatly on its exporting
activity.

Looking ahead to today, the only significant data from the Euro-Zone will be the
European Trade Balance. Analysts forecast a 1.2B result, which means that the
exporting activity in the Euro-Zone was larger by 1.2 billion EUR from importing
during May. If the actual result will be similar to forecasts, it will be the first
positive result in 13 months. In turn, this may have a positive effect on the EUR.

* JPY
JPY Records Mixed Results against the Majors
The Yen underwent an extremely volatile session against the major currencies
yesterday. Although the Yen did not see a sharp depreciation yesterday, it is about
to mark the biggest weekly loss against the EUR in two months, following an
extremely bearish week. The most significant publication from the Japanese economy
was the Tertiary Industry Activity report. The report failed to reach expectations
for a 0.3% rise, as the actual result showed that the value of services purchased
has dropped by 0.1% in May.

As for now, current expectations are assuming that the Yen may fall against the EUR
on speculations an advance in stocks will increase demand for higher yielding
assets. The JPY is known as a currency which rises in times of global financial
crisis, and it seems that the rising stocks could be a leading sign for the
financial improvement which has the potential to significantly weaken the Yen.

* Crude Oil
Crude Oil Completes Bullish Week
Crude Oil continued to hold its yesterday, and a barrel of Oil is currently traded
for $62.70. Crude Oil is currently heading for its first bullish week in more than a
month.
Crude rose as a result of two leading factors. One, the bearishness of the USD
supported the price of Oil. Crude Oil’s prices are valued in Dollars, and thus any
depreciation in the USD’s value has the potential to further push-up Oil prices.
Higher global equity markets also restored optimism that an economic recovery is
impending.

An improvement in economic conditions is set to increase demand for Crude Oil, which
will of course hike Crude Oil prices. This week might be acknowledged as the first
strong sign that investors have regained their faith in Crude Oil as a long-term
investment. Traders are now advised to follow the news from the strongest economies
and especially from the U.S in order to predict Oil’s direction for the coming
weeks. It seems that as long as the news will show that the world is pulling out of
recession, Crude Oil prices are likely to rise.

Technical News

* EUR/USD
The pair as experienced much bullishness in the past week, reaching as high as the
1.4165 level on Thursday. The chart’s oscillators signal that there is still more
support for the pair to go higher today. The hourly chart’s Slow Stochastic supports
a further bullish move for the pair today. This is also backed up by the daily
chart’s RSI. Going long with tight stops may turn at to be a wise choice today, as
this week’s trading comes to a close.

* GBP/USD
The GBP/USD cross has risen significantly this week, dipping slightly lower
yesterday. The cross is currently trading around the 1.6390 level. On one hand the
Stochastic Slow of the 4-hour charts signals the pair to go bearish today. However,
on the other hand, the daily chart’s RSI and the weekly chart’s MACD support a
bullish move for the pair today. Entering the pair now may turn out to pay off
today.

* USD/JPY
The USD/JPY pair went higher for most of the current trading week. However,
yesterday saw the pair decline to as low as 93.26. The chart’s oscillators seem to
be showing mixed signals. The weekly chart’s RSI indicates that the pair may go
bullish for the coming day. However, this is contradicted by the daily chart’s
Stochastic Slow that shows that the pair may end up lower today. Entering the pair
when the signals are clearer may be a wise choice for today.

* USD/CHF
The last 2 days has seen this cross tumble significantly, as it currently stands at
the 1.0760 level. It seems that there is still much bearishness left in this cross.
Further bearishness is supported by the hourly chart’s Stochastic Slow and the daily
chart’s RSI. A further downward move for the pair today is also supported by the
daily chart’s Stochastic Slow. Entering the popular trend now could turn out to pay
off today.

The Wild Card
* Gold
Gold has returned as one of the main money maker for
forex traders this week. It seems to have gone increasingly bullish as the U.S.
Dollar plummeted this week. The daily chart’s Stochastic Slow signals that the
price of Gold may go bearish today, as the trading week comes to an end. The 4-hour
chart’s RSI indicates that the commodity is overbought, signaling that a bearish
move is imminent. Entering the trend an early stage may turn out to be a wise
choice today.

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