Yesterday, the greenback lost its newly acquired bullish momentum and returned to the 1.54 range against the EUR. Unemployment claims… … in the U.S. this month beat out the forecast of 370K and were measured at 365K, 18K less than March.

The USD was on a bearish momentum against most of its currency rivals throughout the trading day,
and while it would seem like the positive Unemployment Claims would raise the USD's
value, the USD dropped even further after the figure was announced. Monthly
Wholesale Inventories also beat our forecasts and a -0.1% change was announced. The
negative change actually is a good sign for the American economy because it shows
that wholesalers order more goods from manufacturers when they have depleted
inventories. Despite the economic news that seemed encouraging for the greenback,
the USD lost ground to most of its rivals, specifically the EUR following European
Central Bank President, Jean-Claude Trichet's hawkish speech at the ECB Governing
Council meeting. As the European Central Bank disappointed markets by providing no
hints that it might ease interest rates any time soon in the single currency zone,
the USD lost all the value it gained on Wednesday against the EUR.

Looking at the big picture, it seems that the surprising fall in Wholesale
Inventories and the dropping amount of unemployed Americans are good signs for the
USD's future. As the US moves further away from the credit crisis, it seems like the
American economy is rebounding quite well. While there has been a lot of helpful
economic data recently the U.S. economy isn't catching a break with oil prices
placing a huge tax on the US economy. The American economy will have to face the
rising Crude Oil price as the “Black Gold” is trading at its all-time high.

Today, all eyes will be on the Trade Balance which will be announced at 12:30 GMT.
Economists predict the value to be -61.4B which is a 0.9B improvement and it seems
like the USD will see its trend's direction based on the Trade Balance's value.

* EUR
Following two straight days of losses, the EUR saw a bullish momentum, most notably
against the USD as the ECB kept the Minimum Bid Rate at 4.00% and seemed to reject
the idea of easing interest rates any time soon in the single currency zone. ECB
President, Jean-Claude Trichet stated that the decision to leave rates unchanged was
unanimous and that euro zone inflation is expected to 'remain high over a rather
protracted period of time' before gradually declining again. In his hawkish speech,
Trichet also said that economic data continue to point to moderate but ongoing GDP
growth in the first half of 2008 and the euro zone's economic fundamentals remain
sound. Following his words, the EUR rose above 1.54 and was traded at that range
throughout the trading day. The Bank of England kept its Official Bank Rate
unchanged as well.

The ECB has actively assisted the EUR in the forex market with a bundle of
successive hawkish statements and decisions. The German Trade Balance value was
16.7B, lower than forecasts, as it reiterated that the E.U. economy still has to
prove tat its consumer behavior can pick up. Although Trichet assured traders that
there shouldn't be any inflationary concerns, trades should be aware of an obvious
slowdown in the Euro-Zone economy.

Today, the only EU announcement that is on tap is the French Industrial Production
rate which is forecasted to be negative at a rate of -0.4%. It seems like the
decline in output produced by France is part of the overall European Zone trend
which hasn't been too bright recently.

* JPY
Yesterday, JPY crosses saw neutral results as the daily trend was very calm. With a
halt in any Japanese news this week due to the Golden Holidays week, the Asian
powerhouse has been subject to external news and movement in the markets. The
Japanese Yen has been reacting to investment houses' orders since no Japanese
economic news have been released this week. With inflationary pressures at nearly a
decade high, many investors believe that the Bank of Japan and its new leadership
will be forced to raise the lending rate. Market makers have begun to notice
indicators that hint for such future change coming within the next year.

Today, the first Japanese economic figure of the week will be announced as overall
economic health will be predicted by the Leading Index. Following last month's
54.5%, a significantly lower value of 20.0% is expected to be released today. The
value forecasted by experts combined with the very high price of Crude Oil could
cause the Yen to see a bearish trend.

Technical News
* EUR/USD
After bottoming out at the 1.5300 level, the pair is showing signs of a corrective
move. The Slow Stochastic indication on the 4 hour chart is showing no crosses and
the RSI suggests the constitution of the correction. It appears that a test of the
key Fibonacci level 1.5500 might be quite imminent.

* GBP/USD
The strong channel formation on the daily chart is still intact, as the cable now
floats in the middle of it. The momentum is quite bearish as clearly seen by the 4
hour Slow Stochastic chart. The daily oscillators are showing that a test of the
bottom barrier of the channel might occur before the weekend. Going short might be
preferable today.

* USD/JPY
There has been a breach through the bottom barrier of the very accurate bullish
channel on the daily chart. The breach has not been validated yet, but if the pair
will close today's trading beneath the barrier of the channel, we might see a very
strong bearish move corrective move. Going short with tight stops might be the way
to go today.

* USD/CHF
The daily chart is showing that there is still some strength in the bullish channel.
The hourly's are indicating that the local bearish corrective move is losing power,
and the cross on the Slow Stochastic should point toward the continuation of the
daily bullish trend. It appears that going long might be a good choice today.

The Wild Card
* GBP/JPY
There is a very interesting flat channel forming on the 4 hour chart as the pair now
made its first validated breach. The break should resolve in a very sharp bearish
corrective move with high momentum.
Forex traders have a great opportunity to join the bearish trend at a very early
stage.

www.forexyard.com