Rethink Foreign Exchange

The new highs the Greenback reached yesterday in the majors are at long-term resistance levels now. We expect these levels to hold in the days to come, giving the USD time to digest its new surge. The major pairs showed some of the correction moves in early European trading already, reflecting the overbought condition of the U.S. currency. We expect the sideways market to continue today, with trading ranges offering enough room for further downward corrections for the USD, as described in

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USDCHF is testing 1.1416 previous high resistance. Further rise could be seen to 1.1800 zone after consolidation, and a break of 1.1416 will confirm such case. Initial support is at 1.1055 and followed by the up trend line from 1.0010 to 1.0693, as long as 1.1055 support holds, we’d expect up trend to continue. For long term analysis, USDCHF is in long term bullish movement. Further rise is still possible to 1.2000 zone after consolidation.

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EURUSD: EUR pushed through and closed below its strong YTD support at 1.3882 Thursday testing a low of 1.3747 before ending the session at 1.3804.While maintaining its current momentum and trading below its invalidated support, weakness is expected towards another key support located at its April’07 high at 1.3682 with a cut through there opening the door for further lower prices towards its Dec’04 high/August’07 low at 1.3366/61.We expect the pair to take a breather after the latter level is

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. Bias:        While 1.1340 caps I feel a pullback below 1.1290 will extend losses to 1.1227 and 1.1185 at least

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Markets have not been so nervous since a very long time. Volatility on many currencies increased to over 20% during one week! On Tuesday, the American Congress rejected Paulson’s plan, which was designed to lift American banks from the crisis. The Congress did not like the idea to use public money ($700 billion) in order to cure the current situation. On Thursday though, the re-designed plan was accepted by the Senate. Everybody is holding their breath to see if it is going to work and if the

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Despite improved growth the Canadian dollar fell over 500 points against the dollar as global growth declines. The anticipated decline in demand for raw materials has led to commodity prices dropping, which is expected to weigh on the Canadian economy.

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Action Insight Weekly Review and Outlook Bailout Plan Approved but Investors Unconvinced, Risk Aversion Dominates After a week of drama, the $700b bailout plan was finally approved by House on Friday. With Senate already approve the modified plan on Wednesday, US President Bush signed off the plan to ease the credit crunch that’s now “threatening” the US economy. However, the markets are rather not convinced that this is the solution. Dow ended up 7.3%% lower to close the week. The news was

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The focus in Australian Dollar trading falls squarely on the Reserve Bank next week, with expectations calling for Glenn Stevens and company to reduce borrowing costs by 50 basis points.

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The NFP came out much worse than expected on Friday, (Oct 3rd : Actual -159 K vs Forecast -85 K) while U.S. unemployment rate reminded at 6.1 % the worst last 5 years. Ahead of the vote for the Bailout plan, the market reactions seemed limited. Well, the U.S. Job data might have been “not so bad” as some analysts expected. we have been seeing these turbulent times that we have never experienced before. Fannie Mae,Lehman Brothers, AIG, Merrill Lynch, Washington Mutual. These big names have

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The downturn in the global financial market paired with fading risk sentiments has triggered bearish price action for the New Zealand dollar, but mounting hopes for the U.S. bailout package has certainly helped to calm fears, and led the high-yielding currency to bounce back at the end of the trading week.

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September non-farm payrolls are due for release on Friday and now more than ever the level of job losses could determine whether the Federal Reserve will cut interest rates this month and by how much. The US dollar hit a one year high against the Euro this morning, but has remained weak against the Japanese Yen. This divergent price behavior has been primarily due to the market’s adjustment of ECB interest rate expectations. However should non-farm payrolls be particularly bad, it would

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Financial Markets Summary For The Week of October 06 – October 10 The week of October 6-10 will see a light week of economic data that will be dominated by the Tuesday FOMC minutes from the September 16 meeting and Fed Chair Ben Bernanke speech that same day. Other data to be released during the week will be the Wednesday pending home sales report for August and the weekly initial claims data on Thursday. The week will close with the publication of the August trade balance and the September

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EURUSD The Euro recovered some lost ground today after reaching fresh lows at 1.3745 on yesterday. Nearby resistance is on focus at 1.3885/00 followed by 1.3950 and 1.4 . Support starts at 1.3800 backed by 1.3745 and 1.3690. Intraday studies are bullish at the time of this writing and large moves are possible today due to the NFP data release in the US. Current quote is 1.3865 @06:35 GMT Support levels: 1.3840, 1.3800, 1.3745/50 and 1.3690.  Resistance levels: 1.3885/00, 1.3950 and 1.4

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The US House has approved Bush’s $ 700 Billion Bailout Plan to save the US financial market in the second attempt after some modifications, including tax cuts, were introduced to it, in a improvised reaction to revive it after it was rejected on Monday. The plan has been approved by 263 votes to 171, with Democrat representatives voting massively for it while iin the republican side the “Nay” won over the “Yea” by a narrow margin. The Plan, mainly consisting in a $700 billion bailout to buy

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Key test for market sentiment today with TARP vote up in the House and after US equities touched recent lows yesterday. MAJOR HEADLINES US Aug. Factory Orders fell -4.0% vs. -3.0% expected Australia Sep. AiG Performance of Service Industries rose to 44.9 from 39.3 in Aug. Switzerland Sep. CPI out at +0.1% vs. -0.1% expected THEMES TO WATCH – UPCOMING SESSION Key Risk Events (All times in GMT) Norway Sep. PMI (0700) Germany Final Sep. Services PMI (0755) EuroZone Final Sep. Services PMI (0800)

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Non-farm payrolls dropped by 159k last month, 50 percent more than the market expected. Even though there was a minor upward revision to the August data, the Fed will have no choice but to cut interest rates at the end of the month. Fed fund futures are pricing in a 50bp rate cut by the Oct 29 meeting but we believe that the number is not bad enough to cut by 50bp because the central bank will want save some ammo for the remainder of the year in case the bailout plan fails to stimulate the

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The value of total construction put in place remained unchanged in August. For the first time since March 2007, residential construction actually increased – up 0.3 percent. The slower economy coupled with tighter lending requirements, however, will continue to put downward pressure on construction spending in the coming months.

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EURUSD The Euro continues is under renewed pressure since the psychological bottom at 1.4 has been broken and the recent low at 1.3880 is on focus. A sustained break of the said support may open 1.3690. Both daily and hourly studies are bearish. On the upside, resistance starts at 1.4 followed by 1.4080 and 1.4160. Below 1.3880 support is formed at 1.3840, 1.3750 and 1.3690. Current quote is 1.3944 @06:35 GMT Support levels: 1.3880/85, 1.3840, 1.3750 and 1.3690.  Resistance levels: 1.4,

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Overview: The ISM manufacturing index was unchanged in April at 48.6. Although contracting moderately, the recent months of data suggest that the manufacturing sector continues to hold up quite well compared to other parts of the economy. Again the survey sent a message of continued significant price pressures in the production pipeline.

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The dollar rose against the euro in New York trading late Friday night. The 15-nation currency dropped to $1.5423 from $1.5460 it traded late Thursday.

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• Spending on goods fell, but services continued solid • Non-residential investment deteriorated significantly, signaling a future broad based deterioration • We maintain our forecast of 1% GDP growth in 2008 GDP growth remained at a sluggish 0.6% in 1Q08. This was 0.4 pp less than our estimate. On a year-over-year basis, real GDP growth was 2.5%, similar to that of 4Q07. Private consumer expenditures (PCE), government spending, net exports and private inventories added to growth. This was

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Trading in the currency markets today is extremely quiet as everyone awaits the U.S. employment numbers due out at 14:30 CET. Forecasts are calling for a drop in the Non-Farm Payroll numbers of between -50,000 to -90,000 jobs, with an average forecast of -75,000. Currently, the general market sentiment is for a stronger dollar in reaction to the dollar’s recent losses over the last few weeks. This sentiment has the potential to set up a “buy on rumor, sell on fact” scenario when the U.S.

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Through there is growing concern as to how long high yielding currencies like the New Zealand and Australian dollars can keep their rates at record highs, interest in the carry trade has still improved over the past week.

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Overview: The April labour market report proved stronger than generally anticipated. The data revealed a job loss of 20,000 persons in April (consensus: -75,000, DB: -40,000) and a drop in the unemployment rate to 4.95% from 5.08% (consensus and DB: 5.2%). Prior months saw a mild net revision of -8,000 persons. Today?s report is consistent with an economy which has come close to a standstill, but has not slid into a recession.

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Warren Buffett said on Saturday he expects the euro and the sterling to hold their own against the U.S. dollar, in part because of U.S. fiscal and trade policies that weigh on the value of the greenback.

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This is the big mover of the day: Today’s US non-farm payrolls were unexpectedly much better than expected. US payrolls data for April showed a decline of 20,000 jobs after a revised 81,000 decline in March. Although this marks the fourth consecutive of job losses in the US, it was much better than the 80,000 job decline expected by the majority of the market. In another encouraging sign, the unemployment rate also surprised, falling to 5% in April from 5.1% in March, versus an expected 5.2%.

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Please find attached ForexSurvivor Weekly Weekend Newsletter Notification: ForexSurvivor is shifting is web link to ( www.forexsurvivor.net ) instead of (.com) and we are no longer responsible for any materials regarding ( www.forexsurvivor.com ) MAKE SURE NOT JUNKED: support@forexsurvivor.net Trading Engineer Anthony Samaha

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The NFP came out much better than expected on Friday, ( May 2nd : Actual -20 vs Forecast -78 ). We have seen the appreciation of the USD. The EUR/USD has moved down to the 1.5400 region, while the USD/JPY has moved up to the 105.00 region. Will we keep seeing theUSD recover with confidence or are we half- believed in what we have seen? This week has several explosive events. On schedule , we have Gearman factory orders, the central banks’ interest rate decisions and trade balances. It is worth

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This session trend: other majors are expected to make volatile moves for week end .

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Action Insight Weekly Review and Outlook Euro Weakens Further, Focus Turns to ECB With the support of FOMC’s signal to pause it policy easing cycle and a much better than expected Non-farm payroll report, dollar was generally lifted higher last week. On the other hand, there was another round of liquidation of long position in Euro which saw the common currency being sent lower. While markets are talking about the strength in dollar and weakness in euro, the biggest mover last week was again

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USDCAD breaks initial resistance yesterday on collapsing oil prices – time for a range break? MAJOR HEADLINES – PREVIOUS SESSION US Apr. ISM Manufacturing out at 48.6 vs. 48.0 expected and 48.6 in Mar. US Mar. Construction Spending out at -1.1% vs. -0.7% expected Australia Mar. Retail Sales out at 0.5% vs. 0.3% expected Germany Mar. Retail Sales out at -0.1% vs. 0.6% expected THEMES TO WATCH – UPCOMING SESSION Key Risk Events (All times in GMT) UK Apr. HBOS House Prices (0700) Switzerland Apr.

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Dollar consolidation The revised University of Michigan consumer confidence index edged lower to 62.5 for April from a provisional 63.2 which will maintain fears over the outlook for consumer spending. An important element in the survey was an increase in the inflation expectations component to 4.8% from 4.3% the previous month. This is particularly significant as the Federal Reserve will need to monitor inflation trends closely. The rise in inflation expectations will certainly intensify

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Last week’s currency trading review The Dollar was again volatile last week, beginning the week softly before gathering steam as speculation grows around the notion the Fed is nearing the end of cutting rates. Fed officials avoided the topic of monetary policy through the week and focused more on the need for transparency in the financial system to allow the crisis to be fixed. New Home Sales decreased to 526k, down from the forecasted 580k. Durable Goods Orders came in slightly above the

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The signs that the dollar may have reached the bottom add up. However, we are waiting suspensefully for the U.S. GDP figures for the second quarter and the FOMC interest rate decision, which are to be announced this coming Wednesday, to get a clearer picture and confirmation. Until then, like today, some light upwards movements of the USD seem to be the likeliest scenario. Intraday Market Outlook for Day Traders EUR / USD Currently trading at 1.5658, the EUR / USD is struggling to recover some

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The US dollar fell to a 5-day low of 64.23 against the Pakistan rupee in early trading on Monday, before reversing direction by about 12:35 am ET. The pair climbed to 64.57 by about 3:45 am ET, compared to Friday’s closing value of 64.50. As of now, the pair is worth 64.43.

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Before we give the resurgence of the dollar too much credit let’s perform a reality check. As of Friday’s close at 1.5605 the euro had fallen slightly more than four big figures, or 2.5% against the dollar in just four days. The record high for the euro of 1.6020 came this past Tuesday. But since February the euro has risen 9.0% against the US currency. For the past five weeks the euro has been trading between 1.5500 and 1.5900 with one dip below and two attempts at the top; 1.5605 is just 100

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———————————————————— INTRA-DAY USD/JPY OUTLOOK :                 104.60 Updating time :28 Apr 2008 05:58 GMT Dlr’s retreat fm Asian morning high of 104.83 suggests recent ‘erratic’ upmove has formed a temp. top there n sideways trading is envisaged, reckon 104.25/30 wud contain weakness n bring rebound but abv said res is needed to extend gain twd 105.00. Buy on dips with stop as

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In this issue: The Velocity Of Money Is the Money Supply Growing or Not? P=MV A Slowdown in Velocity If You Are in a Hole, Stop Digging And More Write-offs to Come South Africa, La Jolla, Toronto and Maine The late and great Milton Friedman told us that inflation is always and everywhere a monetary phenomenon. But there is an asterisk to his equation that we need to examine, namely, the velocity of money. Sometimes a fast-growing money supply is not as inflationary as you might think. Then we

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Although CPI excl. fresh food in March was in line with expectations, increasing core inflation and the preliminary April CPI figures for Tokyo both indicate that inflation in Japan is increasing faster than expected. Hence we have increased our inflation forecast.

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All eyes this week on Fed guidance at Wednesday’s FOMC rate announcement. Japan on holiday for much of the week. MAJOR HEADLINES – PREVIOUS SESSION US Final Apr. University of Michigan Confidence out at 62.6 vs. 63.2 expected Japan Mar. Retail Trade rose 0.5% vs. 0.7% expected THEMES TO WATCH – UPCOMING SESSION Key Risk Events (All times in GMT) Germany May GfK Consumer Confidence (0610) EuroZone ECB’s Trichet and others to speak (0700) Germany Apr. CPI (no time given) New Zealand Mar. Trade

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EURUSD- Following a brief break and hold above the 1.5896/1.5913 area, its Mar 31’08/April 10’08 highs on Tuesday and its subsequent failure at that area, EUR sold off hard for a thirdday in a row on Friday closing at 1.5626.This move now leaves the pair below its triangle pattern(daily chart) and with price action still pointing lower, risk remains for a push towards the 1.5510 level, marking its Mar 24’08 and then its .382 Fib Ret/April 03’08 at 1.5390/42.The daily and weekly RSI are

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What?s new? There was mixed data today with Euroland PMI weaker for manufacturing, but the German PMI was still quite strong with a robust improvement in the Service sector. Belgium business confidence data was also released today, and surprised strongly to the downside strengthening the case for a slowdown in Euroland manufacturing. The Belgium business confidence index fell from 1.2 to -7.9 (consensus 0.5). As can be seen in the chart below, the correlation between Belgium confidence and ifo

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The dollar was slightly weaker versus other major currencies Monday morning in New York, easing a bit to the euro and sterling while levelling off against the yen. With no major economic readings due out Monday, investors were looking ahead to Wednesday’s interest rate decision from the Federal Reserve.

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Overview: The German IFO index disappointed in April and fell stronger than expected. The decline was broadly based across sectors and reflected lower expectations as well as assessment of current condi-tions. We have been puzzled about its strength in the past few months, but we may now start to see the slowdown in growth feeding through to IFO. The decline was not a total surprise as markets got a warning from the steep decline in Belgium business confidence yesterday.

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European Union finance ministers hold two-day talks in Slovenia starting Friday to address the growing economic troubles amid record-high inflation, a soaring currency and a souring U.S. economy.

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Canada employment report and Ivey PMI also on tap today. Risk appetite still appears strong – but for how long… MAJOR HEADLINES ? PREVIOUS SESSION Overnight developments: US Mar. ISM Non-manufacturing out at 49.6 vs. 48.5 expected and 49.3 in Feb. Australia Feb. Retail Sales out at -0.1% vs. +0.3% expected Switzerland Mar. CPI YoY out at 2.6% vs. 2.5% expected THEMES TO WATCH ? UPCOMING SESSION Key event risks today (all times GMT): Germany Feb. Factory Orders (1000) Canada Mar. Unemployment

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Tactical signals Points below are for April, EUR/USD 1.5660 -3 pts Buy on stop 1.5709, if done stop loss 1.5641 Buy on stop 1.5739, if done stop loss 1.5671 Buy on stop 1.5789, if done stop loss 1.5711 Sell on stop1.5571, if done stop loss 1.5619 GBP/USD 1.9940 -174 pts Long at 1.9829, stopped 1.9811 Long at 1.9879, stopped 1.9831 Buy on stop 1.9969, if done stop loss 1.9901 Buy on stop 1.9999, if done stop loss 1.9921 Buy on stop 2.0079, if done stop loss 2.0001 Sell on stop 1.9711, if done

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The Euro declined on yesterday reaching lows at 1.5510 but then recovered during the US session and erased all its losses, closing into the 1.5670 area. Strong intra-day barrier is formed by 1.5700 so far and a break higher into the second half of the 1.57 area is needed to confirm a resume of the uptrend on a short-term basis. Such break higher would point our attention at 1.58 and above as there may occur some new tests. Support is currently seen at 1.5635 backed by 1.5595 then 1.5550 and

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EURUSD: EUR recovered from an intra day low of 1.5552 Wednesday to close the session at 1.5683.This is coming on the heels of a failure at 1.5895(Mar 31?08) level and a subsequent follow-through lower on Tuesday. While both the medium and longer term trends remain to the upside, a clean penetration and hold above the 1.5895/1.5904 levels, representing its 2008 peaks is required to resume that trend and prevent the present downside threat. In such a case, its psycho resistance at 1.6000 and the

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