FOREXYARD: Forex News Blog

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• US Investors Await Tomorrow’s Retail Sales Data
• Chinese Data Suggests Uptick in CNY Values
• Japanese Core Machinery Orders Plummets
• Italian Industrial Production Outshines Expectations
• Silver and Gold Prices Slump with Strengthening US Dollar
• Weekly Technical FX Preview – Dollar Strength Could Continue Versus Euro and Sterling

US Investors Await Tomorrow’s Retail Sales Data Posted: 13 Jun 2011 06:47 AM PDT Many investors are trying to gauge whether the US can gain ground this week after hints at an interest rate increase in Europe failed to spurn investors to go long on the EUR/USD. Analysts appear to be scanning the horizon for news which could support the view of a dollar uptick in the next week. Tomorrow's retail sales data may be the info needed to fill a gap in the economic picture. The retail sales and core retail sales figures are scheduled to be released side-by-side at 13:30 GMT tomorrow alongside this month's PPI figure. The grim forecast for both retail sales report grants a cushion of low expectations. Even a mildly bullish figure above these weak forecasts could be enough to push the USD higher in this week's trading. Read more forex trading news on our forex blog.

Chinese Data Suggests Uptick in CNY Values Posted: 13 Jun 2011 06:44 AM PDT Monetary data out of China this morning suggest an impending uptick for the yuan (renminbi). The M2 money supply grew this past month less than forecast, which could suggest that China is honoring its commitment to lower its currency's value. Forecasts had anticipated an increase of 15.5% growth for the month of May, but this morning's release revealed a 15.1% increase, indicative of a slow down in domestic money printing. The concurrent decline in new domestic loans may also explain part of this sluggishness. The data so far appears to be granting a mild uptick for the CNY, but analysts are expecting heightened volatility tomorrow considering the heavy slew of news getting published out of China. Read more forex trading news on our forex blog.

Japanese Core Machinery Orders Plummets Posted: 13 Jun 2011 06:40 AM PDT In a surprise turn of events, the Japanese report on core machinery orders plummeted this morning, with a disturbing monthly contraction of 3.3%, well below the expected 2.0% growth in orders. The news has so far carried only a mild impact on the JPY, with some investors showing interest in retaining the currency despite the bearish news. As the week moves ahead, most investors are turning their attention to the key issue of the week, which appears to be whether interest rate differentials between the US and Europe, or debt concerns in Greece, dominate market sentiment. A turn to risk aversion could help spur the yen to further growth. Read more forex trading news on our forex blog.

Italian Industrial Production Outshines Expectations Posted: 13 Jun 2011 06:37 AM PDT The mild-mannered report on Italian industrial production this morning came to outshine many expectations in today's trading. Forecasts had called for a monthly increase of 0.2%. The real figure released at 9:00 GMT this morning revealed a solid 1.0% growth mark, however. Implications for the bullish figure have not yet been fully weighed as most investors are out today on holiday. France, Germany, Switzerland and several others are taking the day off in observance of Whit Day, which has generated thin market conditions in today's trading. Read more forex trading news on our forex blog.

Silver and Gold Prices Slump with Strengthening US Dollar Posted: 13 Jun 2011 05:26 AM PDT Commodities in general are beginning to feel the pinch as weak Chinese economic data combined with declines in equity markets and a strengthening dollar have begun to weigh on both spot gold silver prices. Gold and silver prices continue their slump from last week as weaker than expected Chinese lending and a drop in the Chinese money supply weigh on commodity prices. On Friday spot gold prices dropped by $12 after a report showed increased selling of the yellow metal by the International Monetary Fund. In turn silver prices were also dragged lower by almost $1.50. The latest CFTC Commitments of Traders Reports indicated that investors increased their long gold positions and may be encroaching on an overextended market positioning, thereby contributing to the sharp declines on Friday. Equity markets continue to sell-off with the S&P 500 down for the sixth consecutive weak. The SPX has made a firm break of the 1290 and technicals indicate further downside potential. The decline in equity prices has not been supportive of gold prices despite the metal's use as a safe-haven. One explanation for this may be the strengthening dollar versus the euro. A strong greenback may have also contributed to the declines as this makes gold more expensive for investors who do not hold US dollars. The greenback could continue to come off its recent lows versus the euro should the EU/IMF/ECB fail to come to an agreement for a medium term financing program for Greece. One potential catalyst for spot metal prices would be any additional steps taken by the Federal Reserve to support the struggling US economy. The enactment of QEIII would likely offer support to spot gold prices as this would require a readjustment of US inflation expectations. Thus spot gold prices may have scope to test the $1,552 resistance level with spot silver respectively at $37.80. In the near term support is found at $1,518 and $35.00. Read more forex trading news on our forex blog.

Weekly Technical FX Preview – Dollar Strength Could Continue Versus Euro and Sterling Posted: 13 Jun 2011 12:25 AM PDT EUR/USD A three week rally was met with a failure of the pair to breach 1.4700, a level not far from the previous trend line which opened the door for a significant pullback that retraced 50% of the late May to early June gains. The week's declines ended at the 20-day moving average at 1.4330 and will serve as initial support. Falling daily stochastics suggest the move lower may have scope to continue where the pair may find resistance at 1.4250, a level that coincides with the 61% retracement and the rising trend line from the May low. A breach here and the pair will test the 100-day moving average followed by the May low at 1.3970. To the upside, resistance will likely come in 1.4570 followed by 1.4700. GBP/USD The weekly candlestick suggests further declines may be in store as last week's candlestick ended on a shaven bottom, indicating momentum is moving to the downside. A confirmation will be needed from this week's trade to confirm the bearish pattern. In the meanwhile the move lower finished at the 38% retracement level of the December to April move and is quickly approaching the trend line off the May 2010 low at 1.6180. The pair could receive a bounce from this level, as was the case in late May. Resistance is located at 1.6400 and 1.6460, and 1.6550. Should the pair not receive a bounce at the trend line declines could mount to 1.6060 and the April low at 1.5935. USD/JPY The yen was relatively unchanged from the previous week after an attempt to breach below the 80 yen level was only briefly successful before the pair was bid higher. While most oscillators remain in neutral territory, the pair continues to trade lower with resistance at the falling trend line from April high which comes in near the 20-day moving average at 81.00. This level may offer traders a better price to enter short. Further resistance is located at 81.75 from the May 31st high followed by 82.25 of the May 19th high. Support comes in at the May low of 79.50 followed by the all-time low at 76.11. USD/CHF The pair is testing a short term resistance level at 0.8450 and a breach here would expose the resistance at 0.8855 which lies just below the 20-day moving average. A rise to this price may offer traders better levels at which to enter short. Above these levels rests the falling trend line from the mid-February high which comes in at 0.8720. Support is found at the all-time low at 0.8325. Read more forex trading news on our forex blog.

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