Yesterday's trading session was characterized by low liquidity as US markets were closed due to the Easter holiday. The greenback… … was consolidating yesterday against most currencies and showed no distinct trending.

The calm status changes later on
the overnight trading session as the greenback started to gain all across the board
in a quite aggressive manner probably due to speculation that the Fed will continue
to ease interest rates in order to try and salvage the ruins of the US economy.

“There are a variety of reasons for the dollar's general weakness. The major ones
are the bearish outlook on the economy and expectations of more rate cuts. The Fed
may cut rates by half a percentage point next month and another quarter point in
June” said the head of economic strategy of Bank of America.

Despite the unexpected rise in existing home sales of 2.9% which was the biggest
jump in a year, the greenback continued to linger in bear territory.

As for today, there are two major events expected to come from the US. The first is
the Yearly National HPI Composite index which measures the annual change in the
average price of a single-family home in 20 metropolitan areas. And is expected at
13:00 GMT The index is expected to be released at -10.5% and has a previous figure
of -9.1%. A bit later at 14:00 GMT, the Consumer Confidence is expected to be
released with a forecast of 73.5 which is slightly lower than last month's release
of 75.00.

The expectations for weak US data will most probably help to push the greenback
further down, and it appears that the short breath of fresh air which caused the
greenback to gain against most currencies is probably over.

* EUR
After last Tuesday's Federal Reserve's cut of the US key interest by 0.75%, the EUR
began the trading week yesterday in a relatively bearish notion. The 15-nation
currency saw no major movement after the day's first half, mainly due the lack of
important figures release from both coasts of the Atlantic. However, later, the EUR
sharply appreciated against the greenback adding 1.4% to its value in a couple
hours.

The EUR pushed back from its bearish stance, which characterized it at the end of
last week, mainly as a result of oncoming worries of another Interest Rate cut by
the Fed attached with near term US recession speculations. Moreover, the positive
economic signals released from the US yesterday, such as the Existing Home Sales
report, did not helped the USD weakening move and the EUR/USD ended the trading
session with an appreciation of more than 200 pips.

As seen on last week's German reports, the strong EUR keeps damaging the Euro-zone
exports. This fact, combined with the high inflation rate seen recently in the
Euro-zone, does raise speculations of ECB interruption to try relaxing the
volatility of the market.

Today, there is no expected important news release from the Euro-zone. However, for
the CHF investors, the Swiss Consumption Indicator for the previous quarter is
expected to be released.
The EUR will most probably keep its bullish trend for the short term, especially due
to the fact that the US's Consumer Confidence release today is not expected to bring
the USD to recovery.

* JPY
Eight of the 10 most-traded Asian currencies outside Japan climbed as demand for
higher-yielding assets increased after sales of existing homes in the U.S.
unexpectedly rose last month and after JP Morgan raised its bid for Bear Stearns
Cos. It appears that
The consistent cuts in the US interest rate have diminished the carry trade cycles
to a non existing status.

The JPY reacted relatively softly in relation to other currencies as the USD/JPY
dropped less than 80 pips, whereas most of the other currencies appreciated much
more against the USD.

There are two events expected to come from Japan, as both are considered to have
moderate importance and effect on price movements. The first one is the Corporate
Services Price Index (CSPI) which measures the rate of inflation experienced by
corporations when purchasing services, and has a forecast of 0.7%. The second event
and the slightly more important one is the Japanese Trade Balance which has a
forecast of 0.77T and a previous release of 0.86T.

It appears that the JPY will continue to gain today, especially on the back of the
struggling US economy, and the stable Japanese monetary policy.

Technical News
* EUR/USD
The pair corrected to the 1.5300 levels which is a key Fibonacci level yet failed to
make a bearish breach. There is a bullish cross forming on the daily chart, and
together with a sharp bullish spike it appears that there is now more room to run
upwards. Next target price might be 1.5660.

* GBP/USD
The cable is in the middle of a bullish trend which according to the daily chart has
positive momentum. The RSI is floating at 50 and the slow stochastic is showing no
reversal crosses. It appears that the bullish trend might continue with a target
price of 2.0070.

* USD/JPY
There is a very distinct narrowing bullish channel forming on the 4 hour chart as
the pair now floats on the bottom barrier of it. The slow stochastic is showing a
triple top formation with a positive slope, which indicates that the continuation of
the bullish trend is quite imminent. Going long might be the right way to go today.

* USD/CHF
The bullish channel which was initiated at 0.9800 continues with full momentum. The
Slow Stochastic of the 1 hour chart implies on an additional bullish move, and the
RSI is showing that there might be a breach through the upper level of the channel
in the next 48 hours. Going long with tight stops might be preferable today.

The Wild Card
* Gold
Gold has been showing a very strong and violent bearish trend which started at the
peak price of 1026.00 and bottomed at 909.00. The 4 hour chart is starting to show
fresh bullish momentum, and the cross on the daily slow stochastic directly
indicates a bullish corrective move. This could be a great opportunity for
forex traders to be on the buy side again, at a very low entry price.

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