Yesterday the Unemployment Claims data was published in the US. The Labor Department reported that new claims for unemployment benefits dropped to 322,000. Fewer people signed up for jobless benefits last week. This data signals a positive sign in the US market, taking in consideration the last major difficulties in the US market; housing, tighter credit, and turmoil on Wall Street in recent weeks, which caused a big wave of layoffs. National employment remained fairly study despite job losses related to the deep housing slump, which has persisted for more than a year. The unemployment rate did edge up to 4.6 percent in July, a six-month high. Yet, the rate is still low by historical standards. Still, the level of claims suggested that the employment climate remains in fairly good shape. Regarding the housing and the tighter credit difficulties, the Bank of America announced that it will invest money into the nation's largest mortgage lender to help it better weather problems with defaulting subprime loans. The investment was seen as a way to not only prop up countrywide, but also prevent any future losses at the mortgage lender from hurting the underlying economy.

Until Wall Street gets a clearer picture about the Fed's intentions when it meets on Sept 18, the markets are expected to be little bit tense. Besides cutting its discount rate, the interest the Fed charges banks; it has pumped more liquidity into the financial system. Yesterday, the market showed little response when policymakers injected another $17.3 billion into the banking system to help increase liquidity, adding to more than $62 billion since last week. The effect of a crisis in debt markets is still unfolding and increasing the possibility of a slowdown, although the economy overall does not look weak.

Also yesterday, the dollar continued to fall against the Euro and the pound. Traders' sentiment remained mixed, on the basis of the idea that credit scarcity may still trigger an interest rate rise in Europe. The dollar edged higher against the Japanese currency, rising to 115.90 yen from 115.06 yen after Japan's central bank decided Thursday to keep interest rates unchanged because of the recent worries about a U.S. credit crunch that set off roller-coaster fluctuations on global markets. Today, three important indicators will be published in the US: Durable Goods Orders m/m, Core Durable Goods Orders m/m and New Home Sales. Many traders and investors are looking ahead to Friday's Commerce Department report on new home sales and prices in expectations for a significant movement in the market.

Yesterday the Euro continued to rise higher against the U.S. dollar although the sentiment remained mixed that a worldwide credit difficulty will still trigger an interest rate rise in the 13 nation zone.

Central banks worldwide have injected billions of dollars into money markets this month in efforts to calm nervous investors. On Wednesday, the ECB said it would auction supplementary three-month funds valued at 40 billion EUR ($54 billion) to provide more liquidity to cash-hungry markets. But despite this hug money supply the ECB failed to bring a cure to the lending market which was still hit by many credit worries.

Yesterday the Euro traded at 1.3587 against the US dollar, which is the highest level since the beginning of the current trading week. As it seems at the moment on the basis of different speculations regarding the global credit-market crisis, it will not hurt significantly the economic growth of the Eurozone which will provide rational for the European Central Bank to make a meaningful delay in raising its key interest rate, which is expected to be rise during the next month. Credit fears have caused longer-term financing to shortage for some banks, pushing official three-month interbank rates to their highest levels since May 2001.The three-month tender follows ECB intervention in the Eurozone's interbank lending markets earlier in the month, which was successful in reducing shorter-term borrowing costs. The ECB's next regular tender of three-month financing is due on August 29, when 50 billion euros will be available.

As we have been noticed since the beginning of this week and especially regarding the last trading day, the US dollar began its correction process against the Japanese yen. The JPY fell against most of the major currencies and especially against the Euro and the USD. The Japanese currency weakened as much as 1.8 percent against the Euro, 158.62 from 156.20 late yesterday, and at the same time it also fell as much as 1.6 percent against the USD, from 115.62 to 117.12. The Japanese currency fell 3.3 percent to 83.50 yen per NZD and 2.7 percent to 95.54 yen from 93.03 per AUD. As it stands at the moment, many investors are preferring to stick to their carry trades positions in order to benefit from the wide interest rate differential. Due to the fact that losses in the yen may continue during the midterm we expect it to break the 116.75 resistance level against the greenback. Although currency market volatility has fallen dramatically since last week, it is still not expected to return to the ultra-low levels of the recent years.

In addition, yesterday the Bank of Japan left its key policy rate unchanged at 0.5%, easily the lowest in the industrialized world, this key policy rate has been unchanged for the last six months and according to this fact, different central banks believe that Japan's monetary policy may change sooner than expected and that the BOJ will increase rates at the next meeting on Sept. 18-19. BOJ Governor Toshihiko Fukui has underlined during the last two-day policy board meeting the need to boost rates as the bank of Japan fears large swings in the economy or misallocation of funds if people come to expect Japanese interest rates to stay low for a long time despite the nation's steady economic growth. However the BOJ has repeatedly said it will only lift rates gradually. The Bank of Japan's decision had been widely expected because of recent turmoil in financial markets, worries about a slowdown in the U.S. economy and a recent move by its U.S. counterpart to lower rates; many doubts and hesitations regarding the U.S. credit problem are now weighing on Japanese share market. A faltering U.S. economy and a stronger yen are also dangers for Japan, whose major companies heavily depend on exports to the U.S.

EUR/USD

On the 4 H chart we notice that the bullish trend is running ahead. It appears that the pair is going to the 1.3600 level. The volatility has decreased and the EUR USD is in consolidation after it has broken the 1.3570 resistance level. The price should continue to move upwards in the range of 1.3510 to 1.3630. As it seems, the bullish pressure will continue to gather momentum on the EUR USD also today.

GBP/USD

On the 4 H chart, a rising wedge (bullish) is forming which may imply a continuation of the bullish carry trade, the pair is now forming an upwards channel with strong resistance at the 2.0065 level. Its recommended to time the entrance to the market with short term charts, 2.0030 seems like a strong entry point. At the moment GPB USD is being traded around 1.9900 to 2.0080 range. The volatility is low; so we should expect to also see today bullish pressure on the GBP.

USD/JPY

The USD JPY broke 117.00 resistance level. USD JPY is in an uptrend supported by 1H exponential moving averages. The volatility is low. Bollinger bands are tightened. We should expect to also see today a bullish configuration. 1H, 4H Elliott pattern imply that the USD JPY will continue to gather momentum. The target is expected at the 117.25 level.

USD/CHF

The USD CHF is in a bearish configuration. The volatility is down and the USD CHF is moving without a trend and swinging around the exponential moving averages (EMA 50 and 100). Bollinger bands are tightened. 1H, 4H Elliott pattern imply a continuation of the bearish pressure. The target is expected at 1.2022