Economic News
 
USD

As has been the case for the last several weeks, the US news cycle should have a great effect on how the greenback responds versus the most actively traded currencies. The greenback had seen some gains from late trading last week into early this week, only to see it weaken again yesterday. Investors continued their cautious behavior avoiding risk-laden trades while awaiting today's economic schedule.

Today, the dominant US news consists of Retail Sales and Core Retail Sales figures, as well as the PPI and Core PPI reports. Retail numbers are forecast to come in less than in previous months, however even if there is a rise in such numbers, it doesn't look like it will effect the already tenuous trader sentiment versus the dollar. As short term price action helps to slow down greenback losses, traders are gearing up for how the Fed will react to the deteriorating state of the dollar.

The release of the aforementioned events is to be followed by a speech at the 25th annual Monetary Conference in Washington D.C. by Fed Chairman Ben Bernanke. Bernanke is slated to discuss FOMC communications; however it is safe to assume that he will address questions regarding the day's consumer reports as well. As has become the norm, we should expect some volatility in and around the Fed Chairman's speech, as he is known for leaving hints of future US policies. As more important information is still to be seen before weeks end, we should see the greenback continue once again to fall in today's trading.  

EUR

Yesterday saw the release of the German ZEW survey fall to its lowest point in fifteen years. Still, the EUR returned to its latest form against the greenback as it gained throughout the day. Euro-zone businesses continue to strengthen amidst much more negative views from analysts. The likelihood of the ECB hiking interest rates continues to grow as even the troubled German economy has staved off effects from the strengthened 13 nation currency and continues to bring promise to traders. The ECB will keep a close eye on Crude Oil prices as a significant rise toward $100 per barrel will only solidify the inevitability of an ECB interest rate hike. On the contrary, there are several treasury officials pressuring the ECB to wait with the rate hike since they think the EUR is overvalued, which severely hurts Euro zone exporters and has a negative impact on all of the Euro zone economy .

Today's economic calendar in Europe is highlighted by German GDP numbers, which are expected to be high, as well as words by ECB President Trichet. The president will speak in Paris at a conference held by Banque de France and Fédération Bancaire Française at 8:00 GMT. With the lion's share of news coming from the US and the UK, the euro-zone should look to see steady growth to continue with yesterday's trends.  

JPY

The positive trends in carry trades continues after yesterday's interest rate decision which left the interest rate unchanged and once again pushed the JPY down today. Still being affected by remarks made by Bank of Japan Governor Fukui, the JPY slid against the 16 most-actively traded currencies, most versus the Aussie and New Zealand dollars. With equity growth being shown across the board, investors are more inclined to invest in risky positions thus driving down low yielding currencies such as the JPY.

The Japanese calendar is relatively barren for the rest of the week, with only two minor news events scheduled. Today's Tertiary Industry Activity Index along with Thursday's release of Monetary Policy meeting minutes, should do little to change the JPY. It has become more evident that the movement in the JPY is in the hands of the sub-prime mortgage crisis in the US coupled with growth in EUR dependability. Uncertainty, of which there is a lot these days, is what can hurt the Japanese currency the most. In Fukui's words, "As the global capital markets undergo a re-pricing of risks, financial markets continue to be unstable". It is imperative to keep an eye out on the coming day's news events from Europe an the US to properly gage the direction of the JPY, all signs now continue to point down.

Technical News
 
EUR/USD

The Pair was range trading yesterday between a support level of 1.4590 and a resistance level of 1.4620. Should the pair trade today above the pivot level of 1.4675 we could see a break through the resistance level and then the bullish trend for the EUR/USD could continue up to the 50% Fibonacci Level. An outbreak through the resistance level instead could indicate a drop down to 1.4550, the 0% Fibonacci level.  

GBP/USD

The 4 hour chart indicates on an upcoming bullish trend when the long term Moving Average (Weighted 21) crossed by a bullish bar. Additionally the ADX (Average Directional Movement) also strengthens our opinion while the DI+ is on its way to crossing the DI- from below which is considered a bullish signal. Going long seems to be preferable.  

USD/JPY

The pair moved yesterday with a slightly bearish trend between the upper level of 110.50 and the lower level of 109.20 slow stochastic on the hourlies indicates that it won't become a reversal soon and that the pair might instead continue range trading today. Also MACD and RSI reside in neutral territory and thus point to an uneventful day for the USD/JPY.  

USD/CHF

The 4 hour chart implies on an upcoming bearish trend as the Slow Stochastic crossed at 78 and has a negative slope, however we need to pay attention to the current 4 hour bar, when a positive bar may indicate an upcoming bullish trend and negative bar will imply range trading. Traders need to be aware during the next 4 hours where the market is headed and to take action.  

 
The Wild Card
 
Silver

There is still a bearish configuration on the 4 Hour chart, indicating that the momentum is still down. The RSI is floating around 50, which supports the notion that there is still plenty of room to run. This provides forex traders with a great opportunity to go short on a very solid downtrend.