There is literally hundreds of financial news released around the clock from all over the world. The key is to concentrate on news releases that have an immediate impact on the market. There are about 5 to 10 important news from U.S., and about 3~5 each from UK, EURO Zone, Australia, Canada, and New Zealand. These news releases are usually scheduled monthly or quarterly; they will repeat every month around the same day of the week or day of the month.

We only trade news releases that are currently considered as “hot”, meaning that the market is particularly interested in it. For example, a few years ago during the real estate boom, U.S. Housing Start, Existing Home Sales, and New Home Sales were constantly ignored and no one was paying attention to it. Why? Because at the time economy was doing good, home sales were always better than expected, and market just assumed the best and basically ignored the numbers. Look at the same news releases today in mid 2008, Housing news releases were particularly important because the economy is suffering, any signs of rebound from the housing sector signals improvement in the economy, as many market analysts pointed out; therefore, housing data is currently “hot”. Similarly, the weekly Jobless Claims just became “hot” recently because of former Fed. Chairman
Greenspan talked about it.
Other news releases such as consumer confidence, current account, and even the TIC Net Long‐Term Securities are currently being ignored. But they will eventually become hot again, as many of these news releases and market focus work in cycles, just as the fashion industry. The key to trading economic news successfully is to be selective with news releases to trade. As stated before, with hundreds of news released monthly, why risk with less important news releases and gamble your hard earned money when you can trade with news that have a higher probability of success?
Therefore, I have compiled a list of news releases that have a high probability of success (at least 70%) backed by solid track record.
Another important “hot” factor in today’s market is RISK. There are basically two different reactions to Risk, one being “Risk Aversion” and the other “Risk Appetite”.
Risk Aversion basically means to avoid risk. Market will react go with the safest route, selling high yielding currencies and buying low yielding currencies, such as BUYING CHF and JPY while SELLING GBP and AUD. Few instances recently of extreme market risk aversion, GBP/JPY pair have been documented losing up to 1000 pips in a 24 hour period.
This is an extreme example but not an isolated case, we have seen risk aversion taking over market sentiment and dropping USD/CHF, GBP/JPY, AUD/JPY 200 to 500 pips a day. What kind of news sparks Risk Aversion? The answer: Any news that creates risk
(or rumor of risk) in the market, for example:
1. Geopolitical uncertainty – Rumors of war or actual terrorist attack.
2. Subprime Mortgage Write‐down – Bear Stearns, Fannie Mae, Freddie Mac,etc…
3. Major industry sector negative earning/forecast report. Such as AIG (insurance), Bank of America (finance), GM (Auto), etc…
4. Or any huge surprise in fundamental news that reminds the market of the condition our economy is currently in. Such as a worse than expected Housing Data, a worse than expected employment data or unemployment rate, etc…
What to do in a Risk Aversion situation? The best answer is to stay out of the
market!

Risk Appetite means market willing to take on risk. What is considered risk? When the market is buying high‐yielding currencies such as GBP, and selling low‐ yielding currencies, such as JPY, it is considered as Risk Appetite. Therefore, when carry trades (JPY based trades) are winding, or going up, it is a sign of Risk Appetite.
What kind of news sparks Risk Appetite? Basically any news that promotes:
1. Geo‐Political Stability – Peace Treaty, peace talks, etc…
2. Good Earnings Report from major sectors.
3. Good Surprises in fundamental news, such as better than expected housing, employment, or economy data.
Risk Appetite is different from Risk Aversion whereas Risk Aversion will be followed with strength in both JPY and CHF currencies, while Risk Appetite will not only promote carry trades, but all high‐yielding currencies in general. Risk Appetite will likely to promote stable market condition and normal daily volatility.
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The U.S dollar slid 0.8% against the Yen for a second day on speculation the G-8 leaders may question the greenback's status as the world's reserve currency. Leaders from the G-8 most-industrialized nations are meeting in Italy today to tackle shrinking economies and rising unemployment even after the U.S. pledged $12.8 trillion to end the recession.

USD - Greenback Retakes Ground Against the Japanese Yen

The U.S. dollar climbed broadly on Wednesday as risk aversion rose on uncertainty about the global economy and U.S. corporate earnings. The greenback was up 0.6% against the EUR at $1.3840, and advanced vs. the British pound to $1.6046 from $1.6072 yesterday when it fell to $1.5985, the lowest level since June 8.

The U.S dollar rallied after the Federal Reserve Chairman Ben Bernanke's speech yesterday, in which he stated that the central bank may extend its emergency-loan program for securities firms into next year, thus spurring confidence among investors. Another support for the USD was the unexpected drop in Oil prices. Crude Oil was traded in yesterday's session for less than $136 a barrel, $6 lower than the previous day. The Dollar also found some support on Thursday as Japanese importers and investors, including retail investors, hunted bargains in foreign currencies.

However, the U.S. dollar fell more than 3% against the Japanese Yen yesterday to its lowest level since February, as investors continued to shun risk and unwind carry trades. The USD was last down 3.1% against the Yen at 91.99 yen after going as low as 91.82 yen. In Asian trading Thursday however, the U.S dollar has managed to reclaim some of the ground it lost against the Yen in the previous session.

EUR - The EUR Hits its Lowest in 6 Weeks Against the Yen.

On Wednesday, the EUR saw mixed results versus most of its currency pair counterparts. The EUR underwent a bearish trend against the USD, declining close to a 100 pips. Against the Japanese yen on the EUR fell more than 3% yesterday to 127.95, its lowest since mid-May, as investors shunned risk and unwound carry trades.

The Sterling hit a 1 month low against the Dollar, extending its losses after weak industrial output data the previous day reinforced doubts about a UK recovery.
The British pound declined for a 5th day versus the U.S dollar, trading as low as $1.6048, on speculation the Bank of England will increase its asset-purchase program at a monetary-policy committee meeting tomorrow, boosting the supply of the U.K. currency.

The Bank of England will stick tomorrow with its current plan to spend as much as 125 billion pounds in newly printed money to boost the economy, according to economists' predictions. The GBP may fall to a 2 month low against the Yen in coming weeks after it dropped below a support level at 154.08 yen, according to analysts.

JPY - Yen Rallies the Most in 7 Months on Safety Demand

The Japanese yen hit its highest levels in more than 4 weeks against the Dollar on Wednesday as an uncertain outlook for the global economy curbed investors' risk appetite. The JPY advanced versus the EUR as concern U.S. corporate earnings will drop led traders to cancel bets Japan's currency would weaken as the global economy recovered.

The Yen typically rises during times of financial turmoil because Japan's trade surplus means the nation doesn't have to rely on overseas lenders. Japan's currency has climbed as much as 5.5% to 70.96 versus the Australian dollar, the biggest intraday advance since Feb. 10, and appreciated as much as 5.3% to 11.16 versus the rand on speculation the weak U.S. earnings outlook and a drop in stocks will reduce demand for higher-yielding assets.

OIL - Crude Down for 6 Day as U.S Data Raises Demand Concerns

Crude Oil prices declined more than 4% Wednesday to a 7 week low, falling for the 6th straight session, as U.S. oil inventories dropped 2.9 million barrels to 347.3 million last week, the lowest since January, an Energy Department report showed yesterday. The losing streak is the longest since the 6 sessions ended on Dec. 5. Crude has now slumped 14% this month, as investors question whether supply-and-demand fundamentals are sufficient to justify Oil's recent rally above $70 a barrel.

The Organization of the Petroleum Exporting Countries's (OPEC) 2009 World Oil Outlook added to the gloom as it said world demand for Oil may take years to recover from the slump in 2009 because of economic weakness and demand destruction.
The cartel said consumption of its crude would not return to 31 million barrels per day (bpd), the level it averaged in 2008, until 2013.

EUR/USD

The daily chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, the hourly chart's RSI is already floating in the over-bought territory, suggesting a downward correction may be imminent. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

GBP/USD

The bullish trend is loosing its steam and the Cable seems to consolidate around the 1.61 level. The pair currently sits near the upper border of the hourly chart's RSI, suggesting a downward correction may be imminent. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

USD/JPY

The bearish momentum the pair has shown since the breach of the channel on the daily chart continues. The daily chart's Slow Stochastic is showing the continuation of the trend, and the hourly studies also confirm the bearish notion. Going short might be the right choice today.

USD/CHF

The pair is currently in the midst of a relatively sharp downtrend as the pair is traded at the 1.087 level. However, it seems that the 1.085 level has turned into a very strong support level. If the pair will manage to breach through it, another sharp bearish move might take place.

Crude Oil

A distinct bearish channel has formed on the daily chart, as Crude Oil is currently traded in its lower section. However, as all oscillators are currently pointing up, it appears that a technical correction could arise. This might be a great opportunity for
forex traders to enter the trend at its starting-point.

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GBP/USD
Trading range: 1.5911 - 1.6217
Trend: Downward
Sell at 1.6064 SL 1.6094 TP 1.6005


EUR/USD
Trading range: 1.3778 - 1.3990
Trend: Downward
Sell at 1.3884 SL 1.3904 TP 1.3843



USD/JPY
Trading range: 90.11 - 96.57
Trend: Upward
Buy at 94.36 SL 95.28 TP 95.09

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EUR/USD
SHORT at @1.4360 SL @1.4400 TP1 @1.3700 TP2 @1.3250
Pivot: 1.4400
Trend: ST Ltd Downside; MT Range
Our preference: SHORT below 1.44 towards 1.37 & 1.3250.
Alternative scenario: An upside breakout of 1.44 would open the way towards 1.4750.
Comment: The RSI is breaking below its MT rising trend line, the pair is challenging its support and should face a further weakness.





USD/JPY
SHORT at @101.20 SL @101.50 TP1 @94.00 TP2 @91.00
Pivot: 101.50
Trend: ST Ltd Downside; MT Range
Our preference: SHORT @ 101.20 with 94 & even 91 in sight.
Alternative scenario: Above 101.50, look for a bounce to 105.
Comment: The pair remains under pressure and is challenging its support, the RSI
advocates for a further decline.




GBP/USD
SHORT at @1.6780 SL @1.6800 TP1 @1.5800 TP2 @1.5300
Pivot: 1.6800
Trend: ST Ltd Downside; MT Range
Our preference: Short position below 1.68 with targets at 1.58 and 1.53.
Alternative scenario: A break above 1.68 would call for a further bounce to 1.7450.
Comment: the pair has struck against its strong resistance and should face a further
weakness, the RSI is bearish.



USD/CHF
LONG at @1.0620 SL @1.0600 TP1 @1.1000 TP2 @1.1400
Pivot: 1.0600
Trend: ST Ltd Upside; MT Range
Our preference: Up move expected towards 1.10 & 1.14.
Alternative scenario: A downside breakout of 1.06 would call for a weakness to 1.0340
Comment: The pair is rebounding on its support and is approaching its next resistance, the RSI is well directed.



USD/CAD
LONG at @1.1200 SL @1.1100 TP1 @1.1800 TP2 @1.2125
Pivot: 1.1100
Trend: ST Consolidation; MT Bullish
Our preference: LONG above 1.1100 with target @ 1.1800 or even 1.2125.
Alternative scenario: Below 1.1100 look for 1.0780.
Comment: both the pair & the daily RSI have broken above declining trend lines.




AUD/USD
SHORT at @0.8100 SL @0.8265 TP1 @0.7790 TP2 @0.7450
Pivot: 0.8265
Trend: ST Consolidation; MT Bearish
Our preference: SHORT below 0.8265 with targets at 0.779 & 0.745 in extension.
Alternative scenario: Above 0.8265 look for a rise towards 0.85 & 0.8875.
Comment: the daily RSI is pushing below a key support area thus calling for further
consolidation.





EUR/JPY
Pivot: 138.50
SHORT 138.00 138.50 126.35 122.50
Trend: ST Ltd Downside; MT Range
Our Preference: SHORT position below 138.50 with 126.35 & 122.50 in sight.
Alternative Scenario: Above 138.50, up move to 142.50 & 147.50.
Comment: The pair has broken below its bullish channel lower boundary and should
reach its next support.





EUR/CHF
LONG at @1.5090 1.5000 1.5450 1.5700
Pivot: 1.5000
Trend: ST Ltd Upside; MT Bullish
Comment: The pair is pulling back on its support ahead of a rebound, the RSI is
supported by a MT rising trend line.
Our Preference:LONG at 1.509 with 1.5450 & 1.57 in sight.
Alternative Scenario: Below 1.50, look for further decline to 1.48.





EUR/GBP
SHORT at @0.8790 SL @0.8800 TP1 @0.8280 TP2 @0.8100
Pivot: 0.8800
Trend: ST Ltd Downside; MT Range
Our Preference: SHORT below 0.88 with targets @ 0.828 & 0.81.
Alternative Scenario: Above 0.88 aim @ 0.91.
Comment: The pair is challenging its MT bearish channel upper boundary.




Dollar Index
LONG at @79.50 SL @78.35 TP1 @82.30 TP2 @84.00
pivot : 78.35
Trend: ST Ltd upside; MT Range
Our preference: LONG position above 78.35 with targets at 82.30 and 84
Alternative scenario: Below 78.35, look for a drop towards 75.85.
Comment: the pair remains within a bearish channel but a rebound towards the upper
boundary is expected.
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Another valid question, but often ignored. The quick answer is Currency Market moves when the people of that country or countries are up and starting their day, that’s when you will see movement, liquidity, and pure price action. Try to trade GBP/USD around Asian Session or Late US Session. Not only you won’t see much action, but because of the lack of liquidity, market may move in ranges, not enough to give you a decent profit, nor enough to stop you out.

One of the most important factors that I have discovered and enhanced my trading is to realize the importance of time. As a matter of fact, I have a theory that seemed to work very well for me, and I named it the “Lunchtime Reversal”.
Simply put, every lunch time hour for each of the major markets, namely the London, Tokyo, and New York, you will see signs of market reversal, because these professional traders who have the ability to influence market, need to square their positions so that they can go out for lunch. Therefore, there are two immediate applications for it:
1. Close your trades around lunch time knowing that the market is about to reverse its gains.
2. Stay in the trade (longer term) and know that lunchtime reversal is only temporary. Long term trend will resume in a few hours.
This simple knowledge has helped me time and time again. When I am on a longer term trade and all the sudden market reverses without a valid reason, but if it coincides with one of the lunchtimes, I would still keep my original position and ride it out knowing what was going on. On the other hand, when I see market hitting a strong resistance/support area around lunchtime, usually by looking at other confirmations such as the daily ranges, fundamental news, and market sentiment, I would enter a reversal trade. But without the time factor in the first place, I would NEVER have entered the trade, as we don’t usually know how far the market is going to go; it’s hard to predict a top or bottom, but it’s not that difficult to predict WHEN.
Other important time filters to be aware of, aside from the obvious news releases, are the EQUITY MARKET OPEN/CLOSE, or “Stock Market Jitters” as I called it, which may move the market drastically one way or the other for 5~10 minutes before and after the opening bell. Knowing what to expect during this time can help you hold on to a profitable trade or adjust your stop to not get stopped out due to a fluke in the market.
Another important concept is to become familiar with what kind of movement to expect during each major trading session. For instance, most European currencies will move in a range during Asian Session, by identifying the range, you can enter trades at top/bottom of the range going with the longer term trend. The principle behind why these currency pairs move in a range is based on liquidity. When there isn’t enough liquidity to move a currency pair, such as during the Asian session, movements of the European pairs are confined in a range with most of their gains reversed just around London open during most regular trading days, with some exceptions.

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I wish there is an easy answer that we can come up with. Like a special report titled “the 20 attributes of EUR/USD” or something alike. But the matter of the fact is there isn’t a simple answer for this question. But then the key to understanding the market lies within the principles, not the actual answer itself. Let me explain…


Every currency pair moves differently. Every single pair has its own personality, or in this case, their own daily ranges, support/resistance levels, and/or market shares. The key to become a successful trader is to understand and trade only a few currency pairs that you feel comfortable with. When we look at the chart of a currency pair, we can see the history of HOW does the particular currency pair moves, and when we start to look at the same chart in a longer time compressions, such as the 4H to the Weekly charts, we can see HOW it moves in a longer term. However, this still does not answer HOW it moves, but only shows you how it moved in the past.
The best exercise to understand how a particular currency pair moves is to do a scalping exercise. Get out a sheet of paper and start looking at only one currency pair, EUR/USD for example, and use only a simple candlestick chart or just by looking at the prices, then try to enter 100 trades going for 30 pips of profit with 30 pips of stop loss. In about a week’s time, you should have developed some kind of understanding to EUR/USD. You’ll learn to see that:
• Usually a bullish day will be followed by a bearish day. (If you have an extreme bullish day, then the next day you might see extreme retracement or continuation of bullish momentum, vice versa)
• Movements are usually retraced around 7:30am and 11:30am NY Time.
• EUR/USD usually moves within a range of about 1% its current value.
• Certain price points, such as 50 and 00, tend to support or resist market continuation.

Every currency pair differs from the other; for example, GBP/USD tends to make major moves then retraces up to 70% of its move, whereas EUR/USD might only retrace a small portion in comparison. The key to become a successful Forex trader is to learn your currency, learn to spot its characteristics and use them to your advantage. This “feeling” that you develop will give you an edge in trading.
Some of the best traders that I know only trade one currency pair. As a matter of fact, professional bank traders generally only concentrate on one currency pair, with different traders focusing on different pairs. There must be a reason why they do what they do; it is only wise that we learn to do the same. Learn to identify the daily movement ranges, key support and resistance areas, and correlation to other currencies…

For example, let’s say that EUR/USD has a negative correlation of ‐93.0 with USD/CHF. Basically it means that if EUR/USD moves up about 100 pips, USD/CHF will move down 93 pips. Below is a side‐by‐side 1‐hour chart of EUR/USD and USD/CHF showing that both pairs are highly correlated... Although these 2 currency pairs do not move alongside of each other pip by pip, the final results in a given time period are very similar. And most of the times you will see USD/CHF (in real‐time) making a major move first, then EUR/USD will follow. You won’t see it in the chart below, or on a 1‐minute chart, but you may see it if you compare a TICK by TICK chart.

Again, understanding how the Forex market moves is also to understand the correlation of each other. There is an excellent website, http://www.mataf.net/ that displays real‐time Correlations between currencies in its Trading Tools area, and I strongly suggest that you visit.
Correlation Relationships can be used to confirm movements of currencies. In the previous example of USD/CHF making the first movement before EUR/USD follows suit, is not based just on a feeling or past history, but rooted in a strong fundamental principle. EURO makes up about 58% of the US Dollar Index and EUR/USD is responsible for about 50% of all activities in the Forex Market. USD/CHF, on the other hand, only covers 4% of all activities of the market. Since USD is the dominant currency, about 90% of the exchanges involve USD, when USD loses value (USD Index Drops), EUR/USD goes up. Since it takes much more to move EUR/USD (50%), we see USD/CHF (4%) making the move first on a general USD weakness.


Another important correlation relationship is EUR/USD, GBP/USD, and EUR/GBP. It is vital to watch the movements between these 3 currency pairs if you plan to trade any one of them. It is important to identify what is moving the market at the time, is it USD, EUR, or GBP? By keeping an eye on the EUR/GBP pair, you can validate or eliminate either currencies, and concentrate on the one that is making the most movement.
It would take a complete new book to fully cover the subject of correlation. But for the purpose of fundamental trading, just understand this fact that one currency cannot move far without affecting the other. Look at this simple calculation and see if you can notice the big picture.

Now do these numbers seem familiar?

GBP/JPY = 211.73 (BID)
Divided by GBP/USD at its current price of 1.9945 (BID)
You get the current price of USD/JPY at 106.15 (BID)

In essence, you can take any price you have on the GBP/JPY and divided in with USD/JPY, and you’ll get GBP/USD price at the time or multiply USD/JPY with GBP/USD and get GBP/JPY current quote.

Market is not perfect. Sometimes we will see slight discrepancies in pricing quotes, but one will not move far from the other. Therefore, when we see related pairs making strong moves one way or the other, it just gives us more confirmation of the direction.
Another interesting point, since GBP/JPY is about twice the value of USD/JPY, a single pip change of value in USD/JPY usually becomes 2 pips of change in GBP/JPY. If both USD/JPY and GBP/JPY are hitting support/resistance areas, then these support/resistance areas might just be stronger.

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This is not a trick question. For instance, has it ever occurred to you after watching the price action on EUR/USD for days, seeing it go from 1.5300 to 1.5550, and ask yourself that question?Well, I have and the simple answer is that there are more orders BUYING EUR/USD than SELLING, so the price went up from 1.5300 to 1.5550 based on more demand and less supply.

Then, it dawned on me that for every price action, a tick, or a pip, there are orders being filled. The market is traveling to the direction where it gets more orders. Now think of this like taxi cabs instead of subway or a train. The orders are dictating where the market goes, not the market making stops at every pip and see if there are orders. If there aren’t any orders, market will not even travel there in the first place.
The real question is why the orders are piling up one way? The answer, of this supply & demand symptom that we are seeing of more demands on the EUR/USD is the key to understanding Forex Market.

Take a moment and think about it. The reason why EUR/USD is moving up is because the market thinks (perceives) that EUR is more valuable than USD. That is why it is getting bid up. The real underlying question is: Why does the market think EUR is more valuable than USD?
Here is the real answer: Forex Market moves because of fundamental news. If there are no news releases, there would be practically no movements in the Forex market because the value of every currency pair would be fixed, with no expectation of better or worse, the market will stay at a standstill.
So, we’ve come to a full circle now illustrating WHY the market moves. To put it in a different perspective, Forex Market moves because it is constantly trying to reach equilibrium with news events, pricing in surprises in fundamental news and sentiments. In other words “The Price EUR/USD (or any currency pair) is trading at is NOT its real value, but a perceived future value, an estimated value that the market has placed on it, as results of past, present, and future (estimated) events.
That’s why it’s so important to understand Fundamental news. Every high impact news release changes the perceived value of the currency, understanding these fundamentals will give you a bird’s eye view of the market and allow you to place trades and stay on the right side of the market…

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When I first started trading Forex, it had never occurred to me to ask these questions. I mean, why would I? The whole Forex educational world (as I understood at the time) was focused primarily on Technical Analysis; some were based on Fibonacci, some on MACD and/or Slow Stochastic, or a combination of technical indicators with different proprietary settings. Seems like the answer to the holy grail of trading lies in the right combination of indicators (at least that was what I thought.)

I still remember the few beginning months of trading; I must have spent over 16 hours a day, 5 days a week, doing an average of 24 trades per day. It was more exciting than profitable, as I quickly went through my live accounts one by one, margining them out and re‐funding them, falling in this vicious cycle that many beginner traders seem to find themselves eventually in, unable to get away… Then, it must’ve been the fourth or fifth time that I re‐funded my account, I began to lose faith in my trading methods; I started to question whether or not these strategies were even supposed to work? I went to my mentor, and despite of spending even more time and energy in learning and re‐learning the same methods, I realized that everything I have learned up to this point is completely, for lack of a better word, ambiguous. What I have learned was practically based on discretion, (which was designed like that on purpose,) so that anyone who teaches it could interpret either or both ways. In other words, there is no wrong Then almost by luck, I stumbled onto someone who trades fundamentals, which at the time seemed sort of “taboo” for technical analysts. You might have heard this: “You show me an economic news release, and I will show you a chart pattern”, which was the mentality of many technical traders at the time, and it was generally believed whether or not one pays attention to the news releases, the results were going to be the same. That was the same half‐truth I was fed with learning Forex…
When I say half‐truth, I don’t mean it as a lie. Forex trading is such a difficult art (not science) to master, one can never say definitively without a doubt that this is it or that is that. Forex Market is actually made up of many parts and the sums of all of its parts are greater than the whole, as illustrated in the diagram below:

You see in this diagram, Technical trading has its place in Forex Trading. But it is just preposterous to assume that was all there is to trading. In order to trade Forex successfully, you need to learn Technical, Fundamentals, Order Flow and Supply & Demand, and of course, Market Sentiment.
Before you get intimidated, let me just say that you don’t need a degree in economics or spend hours per day perusing through news releases. All you need to know are some basic principles and what news releases to watch out for, then prepare for a couple hours a week looking at the market, preferably on Sunday afternoon before the market opens, and then you are pretty much set for the entire week.
Now, let’s go back to the beginning and try to answer these questions, although they may seem basic, they are keys to successful Forex trading…
1. Why does the Forex Market move?
2. How does the Forex Market move?
3. When does the Forex Market move?
Let’s try to answer each question individually in the next chapters. Although they might not be related directly with Fundamental trading, but without having proper understanding of the big picture, fundamental trading would just be another piece of the puzzle that we can’t put together.


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Risk appetite among investors continues to fade ahead of the second quarter earning season. With growing fears over disappointing earnings numbers due too weak consumer consumption, investors continue to turn to the safe haven USD and JPY and away from riskier currencies. The strong Dollar and falling equities continue to hurt Oil, with Prices reaching $62 a barrel.\

USD - Dollar's Recovery Continues
The U.S Dollar rose broadly yesterday against the EUR and GBP, as uncertainty about the global economic outlook and forthcoming U.S. corporate earnings increased the safe-haven appeal of the USD. By yesterday's close, the USD rose against the EUR, pushing the often traded currency pair to 1.3890. The Dollar experienced similar behavior against the GBP and closed at 1.6085.

Yesterday was a quiet news day from the U.S. as there were no major economic data releases on the calendar. However, Traders are bracing for second-quarter U.S. corporate earnings, which will be released in the coming weeks. Analysts said poor results, especially from financial institutions, would likely crank up Dollar demand. Analysts are also keeping an eye on this week's G8 summit that starts in Italy today. Moreover, China, Russia and Brazil have said they will push their view that the world needs to start seeking a new global reserve currency as an alternative to the Dollar, though they admitted such a shift would take time.

Looking ahead to today, the most important economic indicator scheduled to be released from the U.S. is the Crude Oil Inventories at 14:30 GMT. Traders will be paying close attention to today's announcement as a stronger than expected result may continue to boost the USD in the short-term. Traders are also advised to follow the FOMC Member Evan Speech at around 16:55 GMT. This speech is very likely to Impact the Dollar volatility. Traders are advised to watch closely, as this is likely to set the pace of the Dollar going into the rest of the day's trading.

EUR - The EUR Loses Momentum
The EUR finished yesterday's trading session with mixed results versus the major currencies. The 16-nation currency extended gains versus the Sterling Pound on Tuesday, to trade above 0.8633 amid a broad sell-off in the GBP. The EUR did see bearishness as well, as it lost over 150 pips against the JPY and closed at 131.85.

A leading indicator released yesterday from Europe was the German Factory Orders report. Germany holds the largest and strongest economy in the Euro-Zone, and thus the relevant publications from this economy usually have a hefty impact over the EUR. Data showed orders in Germany rose at the strongest monthly pace in nearly two years in May, but economists said the yearly comparison would remain weak for some time yet. Moreover, a European Commission study warned that Europe's economy might shrink further due to the economic crisis if the right policies were not implemented and if Europe failed to resolve problems in the financial industry.

Looking ahead to today, the most important economic indicator scheduled to be released from the Euro-Zone is the German Industrial Production at 10:00 GMT. Analysts are forecasting this figure to increase from its previous reading. Traders will be paying close attention to today's announcement as a stronger than expected result may boost the EUR in the short-term. Traders are also advised to follow the Halifax HPI figures coming out of Britain at 8:00 GMT, as these results may set the EUR's main currency crosses going into next week.

JPY - Yen Climbs against Majors
The Yen advanced to near the strongest level versus the Dollar in more than a month on speculation U.S. corporate earnings will drop, prompting Japanese investors to sell overseas assets and take money home. The Yen has also gained sharply against the EUR and GBP during yesterday trading session, hitting its highest level in five weeks against the Sterling at 152.30 and two week high against the EUR at 131.50.

The Yen crosses have fallen since early June, after rallying from January to multi-month highs, as the sentiment about global recovery prospects that had driven them up deteriorated.

Traders today have very little fundamental news emanating from Japan as the only indicator being released is the Economy Watchers Sentiment report. Analysts forecast the figure to increase from its previous reading. This indicator typically generates small amounts of volatility. However, the EUR and the USD appear to be clutching the reins of today's market. Traders would be wise to note their future direction as it usually carries a heavy impact on the other currencies.

Crude Oil - Another Day of Falling Crude Oil Prices
Oil prices fell for the seventh straight day yesterday, with a barrel costing $10 less than it did just one week ago when crude hit a new high for the year. Oil prices had already begun to slide after peaking last Tuesday, and dismal jobs numbers last week from both the U.S. and Europe have hastened the decline.


Optimism about a quick economic recovery and a rebound in energy demand, were dampened after the Labor Department reported last Thursday that U.S. economy lost a larger than expected 467,000 jobs in June. On the same day, a report from Europe indicated that unemployment in the 16 countries that use the EUR spiked to a 10-year high in May. However, the release of Crude Oil inventory today is likely to help determine the market's next direction for Black Gold. Therefore, traders are advised now to make some profits as the price of Crude Oil is set to remain volatile in the short-medium term.

EUR/USD
The Bollinger Bands on the daily chart appear to be tightening, signaling that a volatile movement may be imminent. However, all oscillators show the price floating in neutral territory, and the 4 hour chart indicates a clear range-trading pattern in a bearish channel. Buying on lows and selling on highs within this channel might be a wise choice today.

GBP/USD
This pair's recent drop in value continues to hold the price in the over-sold territory on the RSI of the 4-hour and daily charts, signaling upward pressure. While the momentum appears to remain downward, we may likely see a number of upward corrections throughout the day. Buying on the lows and selling on the highs of these fluctuations will be a good strategy today

USD/JPY
The bearish momentum the pair has shown since the breach of the channel on the daily chart continues. The 4-hour chart's Slow Stochastic is showing the continuation of the trend, and the hourly studies also confirm the bearish notion. Going short might be the right choice today.

USD/CHF
After peaking at the 1.0960 level, the pair has halted its bullish momentum and is now trading around 1.0933. The RSI on the hourly chart is located around the 60 level, suggesting that the bullish move has more room to go. Going long might be the right strategy today.

Gold
There appears to have been a violent breach of the upper border of the Bollinger Bands on both the hourly and 4-hour charts, signaling moderate downward pressure on the price of this commodity. However, the price currently floats in the over-sold territory on the 4-hour chart's RSI which supports the notion of a possible upward correction in the near future. forex traders can benefit from this potential trend reversal by setting early buy positions and riding out the upward movement.

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GBP/USD
Trading range: 1.5990 - 1.6361
Trend: Downward
Sell at 1.6073 SL 1.6100 TP 1.6005


EUR/USD
Trading range: 1.3812 - 1.4104
Trend: Downward
Sell at 1.3903 SL 1.3923 TP 1.3868



USD/JPY
Trading range: 95.74 - 93.80
Trend: Upward
Buy at 94.28 SL 94.00 TP 95.56

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