The U.S economic news indicated that jobless benefits reduced by 18,000 to 335,000 last week, which is the lowest since 2008. The report on unemployment rate was released by the U.S. labor department earlier on Friday just before the U.S Forex market opened for business. And, economic pundits are still expecting about 144,000 new jobs, which might shoot up the value of the U.S dollar against the Japanese Yen.   Currently the unemployment rate in the U.S stands at 7.6% and is expected to reduce with the recent developments.

Also, the pound shed its gains against the U.S dollar on Friday due to the recent economic reports in the U.S on unemployment. During the morning U.S FX session, the GBP/USD slipped 0.16% as it fell down from 1.5591 and rallied around 1.5531.

In the same vein, the dollar performed better than the euro on Thursday after Mario Draghi (European Central Bank President) told commercial lenders that the bank might start implementing negative interest rates. During the morning trading session, the EUR/USD dropped 1.01% to 1.3045, and from all indications, this trend might continue as we enter the new week.

EUR/USD

The EUR/USD continues to go in circles without making any breakaway. At the moment, the focal point of the pair has been at the 1.30 level. Economists have furcated that the pair would not change much in the coming weeks as a result of the headline risk that has threatened both currencies. The debt crisis in Europe is a thing of concern and the issue has not been straightened out yet. The Italian government is having some issues at the moment and we’re not forgetting the unemployment rate in Spain which is currently at a record high.

AUD/USD

There have been some distant highs and lows in this pair for more than 15 months now. During this period, the lowest point was at the 1.02 level while the 1.06 level has been the highest level. And at the moment, there’s an indication that the pair might form a “rounded bottom”. This means that the trading pair might witness an overall bid in the coming weeks.

USD/JPY

There have been a prolong expectation that this pair is supposed to have broken above 100 by now. But this has not happened yet maybe because of some option barriers. However, sooner or later when these barriers disappear, brokers and traders will be in for a long ride with this pair.

On Friday, the EUR/USD pair was at 1.3111, which represents an increase of 0.35% from the previous day. The forecast for U.S employment of 145,000 was far below the actual figure, compared to February’s figure which reduced to 268,000 from the forecast of 332,000.

Many pundits believed that the unemployment rate that fell down to 7.5% from 7.6% in March fuelled this speculation.

In another development, the manufacturing index witnessed the slowest rate of expansion as it dropped to 53.1 in April from 54.4 in March. But, the reading is still above the 50.0 mark that indicates expansion.

However, the U.S dollar still performed better than the British pound as the GBP/USD closed at 1.5564, an increase of 0.20%. The dollar was up against the Swiss franc as UDSD/CHF traded at 0.9356, an increase of 0.08%. The dollar equally rallied up against the Chinese Yen, with USD/JPY up 1.12% at 99.06.

But the cousins of New Zealand performed better than the dollar in the FX market as NZD trading up to 0.57% at 0.8544, AUD/USD up to 0.68% at 1.0321, while USD/CAD was 0.26% down at 1.0077.

The dollar index, which shows the performance of the British pound against the other six major currencies, was put at 82.17, a decrease of 0.14%. As we enter the next week, we expect the dollar to rally up against the currencies it performed poorly against in the Forex market.

The pound reacted by advancing 1.24% against the greenback in Europe’s afternoon, rising to $1.5455 per pound. The pound also breached three-week levels against the EUR with the exchange strengthening 0.67% to 0.8467.

In the ONS figures, it was also revealed that the prior forecast of a 0.3% year-over-year increase for the first quarter also fell short of the actual growth number of 0.6%. This was a hugely positive advance considering the previous quarter growth was a pale 0.2%.

Between the various sectors that contribute to the overall GDP, it was the service sector’s 0.6% increase that was the largest as opposed to the construction industry which contracted 2.5%.

The ONS also revealed that the production sector rose 0.2% in the same period. It was encouraging to see such recovery at a moment that was not expected, commented Chancellor George Osborne.

Depending on how the US initial jobless claims fares later in the day, we may see further advances in the American trading day. In contrast to the British positive numbers, Europe was bearing the brunt of poor news in terms of the Purchasing Manager’s Index that came in flat from the previous month’s 46.5 in dictating a continued contraction.

Traditionally the Euro is not so predictable but the behavior that it keeps exhibiting at the 1]1.3 level is a strong indication that a bounce from here is possible. The downward momentum has been muted as there doesn’t seem to be any credible selling momentum. This is probably because all the sellers who have been selling at the drop of every bad news during the spring have nothing left to sell, and the market needs to cover its shorts.

From a purely technical standpoint, it is evident that the range between 1.3 and 1.32 is an area of consolidation that may see the hammer extend or, more likely it will convert the resistance to a support, taking into account the earlier mention of the oversold condition.

One aspect to consider is that the market is getting ready to thin out with the impending summer. Most forex traders are about to leave for the next few months. The slowdown is usually perceptible by May. The typical EUR/USD behavior around this time of year is to pivot around the levels it reaches at the onset of summer. Meaning general range bound trading is to be expected. Considering this historical truism, it is worth waiting for a significant breakthrough in one direction or the other before considering a trade.

This is only 9,000 claims above the lowest level since before the recession meaning that traders could have cause for celebration at the next round of jobless numbers. The labor market is always a good indicator of the economy in general as it means two things and it is definitely something FX Brokers look at. The first, more people working, means more people spending, which means in turn that the economy is self-sustaining without the need for government stimulus. It also means that the recession is coming to an end and that growth is back in sight, options and Forex risk premiums are beginning to price this in.

The drop in the four week moving average of claims is a further indicator that these 16,000 claims reduction is not an isolated event but rather part of a trend. To further confirm the veracity of this, a look at the year-on-year reduction in unemployment rates proves that it has receded by just over 12%.

The overall message from this is that the drop in rates is not blip on the screen. It is part of a trend that is suggesting that economic growth is around the corner.

The Yen is down against the pound as well as euro, with GBP/JPY pair up 1.09% and trading at 151.60 while the EUR/JPY pair is trading up 1.47% at 130.00.

Euro gained against the U.S dollar after Jens Weidmann, who is one of the prime European Central Bank policy makers said that there can be possible rate cuts if economic and inflation data indicates warranty t policy loosening.

The EUR/USD pair too was up 0.07% on Friday, which was more than the session low of 1.3047 but lesser than the 1.3129 level it had achieved earlier during the day.

Germany’s producer price index too fell 0.2% in March, belying expectations of a 0.1% increase. From 2.0 in March, the Federal Reserve’s Philly MI fell to 1.3 in April, defying expectations for a 3.0 reading and bringing dollar under pressure.

The EUR/GBP pair traded up 0.42% at 0.8576 yesterday, with the EUR/JPY trading up 1.12% at 129.54.

Things aren’t bright on the Canadian front too. Another report showed that in Canada the wholesale sales were flat. The last month had witnessed a 0.5% rise, even though the expectations were for a 1% increase.

According to analysts, going forward, the US greenback still looks robust and strong. If we tend to get a move higher than the $89.00 level however, we might begin purchasing for a small trade up to the $92.00 level. $90.00 will also supply a bit of resistance, however actually that is a bit more minor than the aforesaid $92.00 area.

There is a lot of support just below, at the $85.00 level. There exists a massive regular triangle that is making an attempt to form on the weekly chart, and it will actually cross through the $85.00 area, which means that the market should attempt to hold in this general vicinity. If it does not however, that will be a very pessimistic sign.

There also comes a time when the market breaks the $90 level and then OPEC ministers will get involved as they remain typically quiet only around the $80 level or so. OPEC may inherit the market in cause quite little bit of headline risk. This being the case, shorting this market may well be a fast plunge instead of some kind of investment.

Gold too witnessed a downfall, falling t a record level and luring Asian buyers to buy more. It seems now that Gold might just be able to stabilize along the 1333 support range. How Gold behaves in the forex market in the short term will depend a lot on what the U.S Federal Reserve would do now.

Initially, after the earthquake and tsunami of March 2011, Japan took all of its natural power generation capacity offline for safety checks. Later though, they remained offline because of strong political objections. The shortfall of electrical power is being made up by burning fossil fuels which are imported and paid for in US dollars, straining the trade balance for Japan. It is also a factor for the decline of the Yen by 20% against the Dollar in the forex market.

According to analysts, a falling currency means that exports are becoming increasingly competitive in importing markets but they believe that to observe its benefits more time will be required.

Japan has initiated a series of daring stimulant measures that are designed to stimulate domestic demand and bring modest inflation to the economy. Forex market seems upbeat about the prospects of Yen though and Japan’s measures have boosted up the stock market there.

With the Japan economy going through deflation for the last several years, market demand in Japan is low. Traders and analysts expect the Bank of Japan to take measures to increase the inflation rate. The forex market too is expecting the same. With the U.S economy adding a good number of jobs – at 800 k since November, analysts feel that dollar might actually act like a growth currency now. Japan and U.S are among the two stronger players in the FX market.

U.S officials feel that the reason for the increase in the value of Pound relates to availability of fewer jobs in the month of March as compared to the expectations in the economy. Trade brokers seem to equally agree to the reason given by the U.S officials. The expected figures of nonfarm payroll last month in the US economy was around 200,000, only around 88,000 jobs were added.

The addition in numbers is too less than anticipated. In fact, the total growth rate of jobs in terms of numbers fell behind the month of February, where it was around 268,000. The private job sector also missed the expected rise and could add only 95,000 jobs in the month of March. The figures brought in gloom to a market which is expecting to see a rise soon.

Now, the unemployment rate in the world’s largest economy stands close to 7.6%.  On a tad brighter side, the rate of unemployment dropped to 7.6% from February’s rate of 7.7%. The drop though led to fall in the price of US dollar in FX and affected the monetary stimulus program of the Federal Reserve.

According to brokers, gold trading still seem weak as the demand for physical gold in the world trade market has lessened in recent times. Due to the fluctuation in price, funding in gold is considered to be more volatile and demands for other metals as such seem to have risen.  Investors in FX are seeking other sources of trading in funds including Royalties.

Considering the economic forecast by John Williams, the Fed President from San Francisco, there is a chance of improvement in the labor market outlook by summer this year. If the economic prediction holds true, then investors can start tapering their purchases in summer.  This would also mean a good time for the forex market after quite some time.

Further, technical analysts feel that the XAU/USD pair will continue this bearish free fall unless it reaches a trading point above the level of its previous support, around 1564. Other major currencies, including the USD/CAD pair, saw a pretty stable week, closing in on the 1.01 range.  

These four measures relate to cut in salaries of educational staff which includes teachers, scholarship holders and research staff; deduction in pensions, suspension of holiday pay for civil servants, and the Government’s decisions regarding health benefits and unemployment tax. In a ruling that can have far-fetched implications, the Court ruled that the government has to provide compensation to the pensioners and the workers of state. The decision of Court can affect the efforts of the government to get back to the trading in capital markets. The Portuguese government, in response to the court decision, is thinking of implementing measures which can save 1.1 billion Euros. Traders and analysts are looking forward to it.

On the other hand, the Government in Italy has decided to repay the debts that it owes to businesses in Italy. Many of those businesses are either small-scale or medium scale and in lack of sufficient credit. The arrears from Government has now increased the problem of credit. The current decision by the Government to pay around half of around 90 Billion Euros can reverse the situation and portray its effect on FX trading. Half of the 90 billion Euros is expected to be repaid within the next 12 months. The Government of Italy will arrange the funds by a mix of debt offerings and Treasury reserves.

On Thursday, it was noticed that the trading sessions on the Asian markets showed AUD/USD higher by 0.11% in 1.0456. Both of them were likely to result in 1.0433 which was a residence with a Tuesday’s high of 1.0497. The trading is expected to be slow since both the markets are closed on Fridays, so expecting any action would be too much to ask.

According the to the Reserve bank of Australia, there was a 0.2% last month in the private sector credit which was similar to the readings in January. The expert analysts had expected the credit sector to rise by 0.3% in the last month. The Reserve bank of Australia also noted in its financial sustainability report that the Australian banks were strong but the central bank forecasted risk for both foreign and domestic units.

Only a few are betting on the central bank to lower its interest rates, everyone’s eyes are fixed towards the RBA meeting scheduled for the next week. On the brink of positive economic scenario, the RBA would not need to pull back or alter any of its ongoing rates. The Australian overnight rate currently resides at 3%.  Compared to other currencies, the EUR/AUD fell around 0.07% to 1.2229 while the AUD/JPY pair declined 0.18% to 98.48 while.

After breaking into the $90.00’s mark, it was expected that the markets would soon touch the $100.00 figure. Even if it does, the markets would not be able to sustain the growth and would result in a short term boost for the crude oil industry simply because of the poor global economic conditions. Considering the rest of the world, the US economy is still sound and is capable of single handedly pushing the $100.00 mark. But it would mean that the traders would witness various robust sessions of buying and selling. The catch is to sustain the achieved mark. With the global markets tumbling and uncertainty prevailing, it is hard to imagine a market that would sustain itself for a log period.

Since consumer sentiment is the basic ingredient of the democracy, the consumers have not responded well to the Sequester. With dislikes escalating phenomenally from 8.3 points to 59.7 points in March according to a survey, the consumers are the most dissatisfied sector of the economy. The effects of these agitations are visible in the fixed asset markets. The sale of houses has gone down by 4.6% whereas the sale of durable goods fell by 5.7% by January, according to traders and analysts. The consumers of US are now hesitant in investing in fixed assets which is not a good sign for any economy.

Most of the major currencies fell during the week and before the announcement by the Cyprus parliament, most traders were wary.

The Euro lost out against the Yen, making a loss of 1.2% and ending the week at 122.9. Last week, the Euro had lost out against Sterling too by another 1.3% which saw the £ buying €1.1725

The Japanese trade deficit continued and the Bank of Japan is expected to take a decision on the matter soon so that the currency remain stable with respect to Dollar and Pound.

In the commodities market, the Brent Crude price became cheaper and closed at $107.7 per barrel which was a fall of over 2% during the week’s trading. Gold’s value was higher at $1607.8 per ounce at last week’s closing, after gaining around 0.77%. Gold is expected to end up higher next week by analysts and traders. The GBP/USD pair on the other hand, went in for a strong show last week after quite a long time. The pair stabilised around the 1.53 range and there is a good chance that the 1.55 level will be challenged.

The next week though will be far choppier according to traders with the outcome of the Cypriot Parliament’s decision. On the AUD/USD front, the AUD/USD pair broke the 1.04 level, a middle line for the larger consolidation level.

It seems that the AUD/USD is reaching for the 1.06 level – the gold too is reaching support at the $1600 level. The AUS/USD pair could move forward than the 1.06 level to a 1.10 level. The USD/JPY pair fell much below the 95 handle in the forex market. The situation is expected by traders to stabilize as the Bank of Japan will continue to work against value of the Yen.  The support area of the 95 can actually go to low as 94 and the pair is expected to stabilize around that range.

All though depends on how analysts and traders react to the decision of the Cyprus Government. There are a lot of reasons to expect that the Pound will remain strong in the near future in the forex market.  

While the FTSE was down by 1.5% in Europe closing down at 6392.8, the DAW closed down at 7911.4. The Dax slipped down by over 1.6% and the CAC too was down by 1.9% at the week end. The CAC closed down at 3770.3 on Friday.

The Dow though had a relatively stable display and ended the week relatively unchanged at 14512, falling by just a meagre 0.01%. The Nasdaq witnessed a slight fall toom ending the week 0.13% lower, at 3245. The Nikkei stopped its bull run of five weeks and dropped 1.8% to close down the session at 12338.5.

Sterling witnessed the best trading and the Dollar was weaker against Sterling, and managed to close down at 1.5240 to the Pound in the forex market. The Japanese currency too displayed a stronger showing against the Dollar, and the Dollar closed at 94.52 to the Yen, after recording a loss of 0.68% during the week. On the other hand, the Greenback too strengthened itself against the Dollar and closed down at 1.2998, an increase of 0.57%.

Traders expect the next week to be volatile in the forex market after the decision of the Cyprus parliament.

Meanwhile in US trading, the dollar lay flat against the pound, with the GBP/USD pair trading at 1.5078 down by 0.02 percent. Recent FX rates showed that the dollar also went down against the Japanese yen, with the USD/JPY pair trading down 0.78% at 95.36, a bit low from the session high of 96.28 and up from the session low of 95.08.  It also fell against the Swiss franc with the pair of USD/CHF trading at 0.9406 down by 0.70% over the week. The Australian dollar was broadly against its US counterpart as the pair AUD/USD traded at 1.0407 up by 0.21% over the week. The USD’s other cousins were also up against the dollar as the pair USD/CAD traded at 1.0194 down 0.26% and the pair NZD/USD trading at 0.8268 up by 0.58% over the last trading week.

Meanwhile, the E.U along with IMF officials designed a financial assistance package for the nation of Cyprus which further pushed the Euro up against the greenback. The dollar was also flat against the pound trading down by 0.02% on Friday. Elsewhere, the dollar also fell against the yen which was trading down by 0.78% on Friday. Elsewhere, the AUD rose broadly against the dollar along with other currencies after the release of the strong labor data on 14^th of this month. The data which was better than the expectations of analysts stated the addition of around 71,500 new jobs, the largest monthly increase in ten years. The dollar was also low against its other cousins the Canadian and NZ dollars.

Meanwhile, natural gas futures closed Friday’s session at 15 weeks high. The natural gas prices as observed by analysts are closely related to weather forecasts. It settled at USD 3.860 per million British thermal units by the closing of the trading week. Gold prices dropped as the pair XAU/USD traded as low as 1576.79 after the report of modest inflation. The pair is expected to have support only if it successfully breaks through the resistance at 1597.77.

This recent news has sent investors and brokers chasing the greenback as signs show the improvement of the world’s largest economy. However, the USD 85 billion quantitative easing program which weakens the dollar is still running but most investors are hoping that the Fed may wrap the program sooner. Elsewhere, many investors were disappointed as Mario Draghi did not take a more firm stance on Euro economic crisis and downplayed their worries of a potential threat by the Italian political stalemate.

The Euro however managed to hold on its earlier gains despite ECB’s decision not to consider more stimulus measures. Meanwhile, FX indices showed that GBP was down against the greenback with GBP/USD pair trading down 0.06% over the course of the week. The dollar however was mixed against its cousin currencies in Australia, Canada and New Zealand with FX indices indicating AUD/USD down by 0.31%, USD/CAD trading down at 0.01% and NZD/USD down 0.91%. Recent Forex reports show that the Japanese Yen went down against most major currencies at the close of the week’s trading after weak economic growth data from Japan. The Yen hit a 3-1/2 year low against the dollar on Friday for first time since August 2009.

 The dollar also gained against the Yen, with the USD/JPY pair trading up by 1.27% at 96.03 after hitting a three and a half year high for the first time since August 2009. The USD/CHF pair traded at 0.9516 with the dollar trading up 0.95% against the Swiss franc on Friday.  Meanwhile, the Dollar closed mixed against its cousins. The AUD/USD pair traded down at 1.0236 losing around 0.31% over the week while the USD/CAD traded down by 0.01% closing the week’s trading at 1.0236.

 Meanwhile, the NZD/USD pair traded down at 0.8209 losing 0.91% at Friday’s trading. However, the British pound edged a bit higher against the US dollar on Friday following the release of inflation expectations data from U.K. The pair hit the session high of 1.5034 during European morning trade but consolidated at 1.5027. But Strong Job data from US saw the pair trading down by 0.69% at 1.4912. Meanwhile the euro fell against the dollar, with the EUR/USD trading down 0.82% at 1.3001 on Friday in U.S trading. The Euro meanwhile also traded down slightly against the pound.

The USD/JPY pair hit an all-time session high on Friday since August 2009 while breaking the resistance at 94.50, which is encouraging.  However, this pair is expected to fluctuate before stabilizing, according to experts. On the other hand the ECB failed to provide any additional monetary stimulus measures and it resulted in EUR/USD being traded down on Friday.

The Euro is further expected to fall as brokers and investors alike chase the greenback because of strong jobs data and before the rising of rates of Federal Reserve. The GBP/USD pair showed a lot of fluctuations last week with the pair edging higher before the release of US jobs data but falling just after the release. The gains that were rallied on Thursday went quickly in the reverse direction and formed a shooting star at bottom of a significant fall in the GBP/USD market. It more on all looks like a breakdown of the market is going to happen. The Canadian dollar however is acting bullish with the market frequently fluctuating. Crude oil had positive market as it traded up 0.30% over the week while Gold though continuously dipped lower in market suggesting it to be a strong buy.

 Meanwhile, the GBP/USD hit the session low of 1.4986 before closing at 1.5035 on Friday. The pair went down by 0.86% over the week as the UK’s manufacturing PMI fell from 50.5 to the 47.9 level. Now, Forex traders and investors alike are expecting the BoE to resume its easing program. Elsewhere, the USD/CAD seemed to hit the session high of 1.0342 the highest in eight months before settling at the 1.0268, with just gaining 0.09% for the week.

The Yen seems to be slowing recovering as the USD/JPY pair hit the session high of 93.69 before falling to settle at the 93.54 level, gaining up to 1.26% over the course of the week. The AUD/USD hit a session low of 1.0181 on Friday after consolidating at 1.0201 by the close of the last trading week at a loss of 0.97%. The weak data from Euro zone made investors fall back on the dollar as it stood strong.

 Meanwhile the Euro hit an all-time low against the dollar amid speculations of a possible rate cut by the ECB in its upcoming meeting on policies. Also, the inconclusive election results of Italy worried many investors and FX traders of the continuity of the implementation of economic and structural reforms. The pound ended the week by falling below the 1.50 mark against the USD for the first time since 2010. Investors are expecting the Bank of England to resume its easing program to save the economy. Elsewhere, the Yen seems to be steadily recovering from its recent downward spiral.

 The Yen gained 1.06 percent on Friday which is the highest percent of gain since 25^th February. The Bank of Japan is speculated to step up easing measures, as the new governor nominated by the Japanese PM is a strong advocate of aggressive easing measures. On the other side the Canadian dollar seems to have pulled back from its recent low against the USD. The recent FX reports showed that the Canadian economy expanded by 0.6% in the fourth quarter, matching market forecasts

The EUR/USD pair hit the session low at 1.2967 before closing the week 1.3018 .The pair is expected to find support at 1.2928 and a resistance at 1.3100. The Euro has investors and brokers alike fleeing to the greenback as weak data in the Euro zone supported the demand for safe haven. The EUR/USD pair is a strong sell for brokers as the pair is likely to fall in the coming weeks. The GBP/USD pair also fell to 1.5035, losing 0.85% over the course of the week. The UK data showed that PMI fell to 47.9 as the shock contraction further fuelled expectations for monetary easing by the BoE.

However, the USD/JPY pair gained 1.26% for the week as the expectations for more aggressive monetary easing by the BoJ pinned the currency down. However, experts expect a resistance at 94.55 for the pair. The Canadian dollar gained slightly against the dollar as the USD/CAD did something bullish on the Thursday trading session. Crude oil prices fell during last week’s trading session and it seems the pair will find support at around $90.00 level with a trading range between $98 -$90. Meanwhile, gold prices fell as the XAU/USD lose to sit at the bottom of the trading channel at 1575 mark.

Meanwhile the Canadian dollar fell against the USD as the world’s 11^th largest economy saw a rise in inflation and a huge drop in its retail sales. The FX indices showed that except for NASDAQ all the major stock exchanges of the world ended the week higher.

 However, the investors remained wary and with the upcoming Italian elections, the Euro ended the week’s trading with a six week low against the U.S dollar. This came in with the declaration of the Euro zone banks that they would pay less than half of the EUR 61 Billion in emergency loans from ECB. The announcement made many Forex traders worry about the options of the European banking sector.

The Yen saw good trading last week as the Dollar fell with respect to Yen and saw the week closing at 93.97 to the Japanese currency. Yen’s strong showing came as the Bank of Japan is predicted to implement more aggressive easing measures. On the other hand, the Australian Dollar displayed impressive gain against the US Dollar and ended the week on a good note.

The Italian elections are also making many Forex traders and Investors worry about the probable bias in the marketplace. The dollar also gained against the Pound as the GBP/USD pair fell significantly. The market is expected to dip as low as the 1.50 level. While this is good news for people trading the USD against GBP, the brokers of GBP are quite dismayed about the turn of events. The Yen however had the best of trading last week as it gained against both the USD and EUR.

The Australian Dollar has surprisingly showed impressive gain against the USD last week; however the pair’s monthly pivot continues to resist at the 1.0340 mark. It is a risky pair until it reaches 1.0500 as a break below the 1.025 level will see it pivoting down to 0.95. The Canadian dollar just is not behaving right as the USD /CAD pair shot through the significant resistance at 1.01. The market has however potential for short-term trading over the next few months. The Brent crude oil however ended lower at the commodities market with the closing price being $114.1 per barrel. Gold at last week’s trading closed at $1576.5 per ounce at a loss of over 2.2% last week.

Also the NASDAQ composite index closed the week at 3161.8 declining 0.95 percent over the week and closing week’s trading at 0.45 % low. The GBP/USD pair dismayed many investors and Forex brokers as the pair plummeted to an all-time low since July, 2010. The Dollar gained against the Sterling as it closed at 1.5257 gaining around 1.7% over the course of the last trading week. The Dollar also gained over 3.1% in the last month against the Sterling.

The EUR/USD pair also fell as the Dollar gained against the Euro gaining 1.5% over the week closing at 1.3165 and closing the month at 3.8% gain. The USD/CAD pair gained over the last trading week to close at 1.0222 as the Retail sales fell in Canada. The Japanese Yen saw the best of the trading of last week. The USD/JPY pair hit a low of 92.93 on Friday but at the end of the trading settled at 93.36 closing at a loss of 0.26% for the week. The EUR/JPY pair closed at 123.11on Friday as the Yen gained against the Euro at a loss of 1.5% over the week.

The GPB/CHF pair should be in notice next week with the 1.42 level giving some support. However, trading the pair should be done before it declines below the 1.42 level. The AUS/USD dropped to 1.0294 points with a negative decline of around 0.16 percent. The market is under pressure due to the Euro economy. The USD/CHF pair climbed to the 0.92 level as the concerns over the economy outlook growth in the Euro zone rise. The USD scored a three week high against the Swiss franc at a rise of 0.0017 points. The EUR/GBP pair stopped at 0.8632 points at a rise of 0.24 percent. The market faces many problems with the recession in the Euro zone economy.

 However, the Yen again continuously seems to fall lower against the dollar. Japan saw a lot of criticism from the G20 nations for policies that weakened the Yen. Investors also seem wary at the announcement of the retirement of the governor of the Bank of Japan three weeks prior to the scheduled date.  Also the Australian dollar stood lower against the U.S dollar as the market came under pressure from the falling Euro economy, though the AUS dollar was only fractionally higher against the Euro. As the markets around the globe remain under pressure it has seen many investors reluctant to take market risks. Many brokers as well as trades showed concern over the recession in Euro zone that is harming the market.

The Euro market is going to face a lot of problems in the future with the debt crisis crippling the entire Euro zone, which does not provide many options for traders. Gold ended at 1609.70 with a slight increase 0.01% while the price of crude oil closed at $117.7 per barrel with a loss of 1% at the last week’s trading.  Silver and Natural gas both showed a slight increase closing at $29.950 and $3.175 respectively at last week’s Forex.

As soon Mario Draghi announced that economic weaknesses will persist in the Euro zone in the first half on this year, there has been a hike in the demand for safe and liquid greenback. As a result, the Euro has moved to a weaker position compared to previous weeks. Going by the report of the US trade market, US trade deficit had narrowed down further.

The trade imbalance is anticipated to further contract thus enhancing the brokers’ and investors’ confidence. In a similar note, the Chinese trade deficit increased owing to an enormous surge in imports. In the last week the Forex trading in the Japanese Yen market, against US dollar, also experienced some variations. Following the Japanese Finance Minister’s confession about the increased pace of yen’s weakening trend, the FX rate, USD/JPY, experienced a fall. Observing the frequent ups and downs in this market, the Japanese Prime Minister has asked to keep up a tolerance level of inflation and undertaken policies to prioritize growth.

However, the yen has landed in better place against Euro and Pound. According to recent reports, the US dollar has won against its Canadian counterpart. On the other side, the pound versus dollar has hit an all-time high since the beginning of this February.

However, analysts expect it to gain a better place in the second half of 2013. The EUR/USD currency pair has experienced a fall to 1.35 during the session conducted by the European Central Bank.

The Euro remained at a low-level as compared to US dollar. Europe’s easing policies are a matter of concern though. The Kiwi initially fell for the week, but later during Friday, the NZD/USD pair has reached 0.84 again. It is definitely a matter of speculation about what will be the fate of this currency pair in the upcoming weeks.

Analysts say that it is likely to go up to 0.85 levels at least.  The EUR/GBP pair has not recorded an interesting target yet. GBP/USD has hit the highest level of 1.5829 since February, 1st. However, the FX pair has consolidated in 1.5827. Confidence among the brokers and traders increased with the news of US trade deficit declining further more. With a drop of 0.80%, the sterling was at a high against the Euro and the trading of this exchange rate, EUR/GBP, ended at 0.8459 for the week. The pair EUR/JPY has great support from neighboring nations, but selling this currency pair should not be among your options.

The European continent it seems needs to think about the various options of improving its economic scenario to gain brokers’ and investors’ confidence.

On the other hand, the US dollar market tried to keep up its place against other currencies. The stock market of the US, Dow Jones, averaged the highest record in the last five years, reaching the 14,000 point level since 2007. Following this, the trend of optimism still continues for the upcoming week. However, America could not resolve its pending issues about expenditure slashes as well as automatic tax cuts, which was due in January, 1^st 2013. Most of the experts had anticipated that the largest US economy would record a growth rate of 1.1% in the recent past.

 The US exchange rate, in the last week, had overshot the Canadian exchange rate. There was news that the present Governor of the Canada’s Central Bank, Mark Carney, will take over the chair of the Governor of Bank of England, replacing Mervyn King. China has experienced a broadened trade gap, but it has other options in its hand to act upon several policies to lessen its wealth gap.

Another indication in Forex has been that the Dollar/Pound pair is hitting the down low for quite some time now. It did try to rise above the 1.85 level without any success. The U.S. dollar and Japanese yen pair  on the other hand, was termed by trading experts as ‘bullish’ and did open up probable investment related opportunities on the three positions of ‘touch’, ‘no touch’ and ‘high’.

Finally, the pair comprising of the American Dollar and the Euro continued on its past course and according to brokers is not likely to yield anything potentially good or substantial in the near future. Finally, the pair more commonly known as ‘The Swissy’ which is the U.S Dollar and Swiss Franc pair has not hit the 9000 area. The pair is expected to turn bullish in the coming weeks and it will also try to hit the 0.9000 level which it has been trying to do in the past few weeks in the FX market.

In other important business news, the U.S. Senate has finally approved a debt ceiling bill which is being as the lifesaver for the U.S. economy which has been seeing red in the recent past. This bill will increase the borrowing limit in the U.S. by 450 billion dollars. It is being touted that this reprieve should in all likelihood; ward off most financial troubles for the nation, at least till May, 2013. However, in alarming news, the United States economy contracted by 0.1% in the last quarter of 2012. This goes against the general view that the economy would actually grow 1.1%. Trade analysts have blamed the much debated fiscal cliff for this crisis and are urging for immediate action

The general mood of the U.S. economy, at this point of time, seems to be optimistic. The Dow Jones Industrial Average which indicates the trading mood of the country’s public companies has witnessed a positive increase. It has breached the much-awaited 14000 mark which has happened for the first time since 2007.

Another exciting news for those trading in Forex is that the country’s Senate has finally introduced a debt ceiling bill that will help in somewhat reviving the ailing U.S. economy. The primary feature of this bill is that the lending cap will be allowed to increase by a substantial amount: in this case it’s 450 billion dollars. This move will ensure that the confidence of businesses within the country is increasing and will attract investment, feel analysts. Although the President of the United States has been yet to sign the bill, it in all probability remains just a formality.

Along with the debt ceiling bill, the U.S. economy has generally been riding the wave of positivity. The Dow 30 has hit a new high in several years. It successfully crossed the 14000 mark, a landmark that was achieved way back in 2007. In fact, the Dow, at the end of the week, was stronger. It closed at the 14009.8 mark which is up by 0.82% and the next week is expected to be better by brokers.

Staying neutral is suitable unless a direction affirmation indication is seen. During Wednesday session, The GBP and US Dollar pair went to and fro for three days consecutively in a row, essentially active on the 1.58 hold. Brokers think the GBP and US Dollar to stabilize around that range.  While throughout most of the Wednesday session the USD/JPY pair fell, while the Yen sustained to gain on the whole.

Unsurprisingly, there was a drop in the price to the 88.00 support, although this set off a comeback to growth in the Forex market, consequently currently the trading of the pair is at the 89.50/60 levels. The revival of the indicators is prominent, which could designate local maxima at 90.60/80 a local maxima of future test new in near future. Moreover the Gold prices dropped with the revelation that U.S. economy is healing. The XAU and US Dollar pair is expected to remain bearish until the bulls by some means cope to draw the prices beyond the level of 1705.   The Kijun-sen line, 26 day average moving green line, is at 1661.34 on daily chart although the XAU/USD pair is back below the Ichimoku cloud.

It seems that 11 of the UK’s Eurozone partners specifically Germany, France, Austria, Spain, Belgium, Italy, Portugal, Slovakia, Estonia, Slovenia and Greece have pushed the implementation of the new Tobin Tax, for levying at a 0.1% rate of the worth of share trading or bonds and 0.01% rate for derivatives trades. Moreover, the investor confidence has been put at its highest level for 32 months as per the latest reading of the Economic Sentiment for Germany. The Investor confidence has heaved by 24.6 points in January. Some Bearish Investors and brokers were disappointed by BOJ Policy which resulted in the firming of the currency rather than falling.

 They said that 2% of the inflation target will be taken up by them which the new Japanese government had proposed and shift to open-ended purchases of assets, however, the disappointing part was that it would instigate in 2014 instead of instantly, which had been hoped for by the markets.  As reported on 23rd Jan in Tokyo, the Dollar and JPY were both trading at 88.65 Yen in the FX market around 12:25, at a 0.1% loss and the U.S Dollar slipped 1.1% followed by the announcement of BOJ, which is the biggest fall in a single day for the pair in almost eight months.

The global economy is about to expand by 3.3 percent this year followed by an expected 3.1 percent growth in 2012 due to growth revival in Asia as reported by a Reuter’s survey. The 0.3% contraction in GDP last quarter of UK was worse than the expected 0.1% contraction and implies that the UK’s “recovery” plan is off course and speedily losing pace to big economies like the US and Germany. In the final quarter of 2012, the German economy contracted and it is feared that it might enter a recession in first quarter of 2013. However, there has been a 4.1% increase in German exports and imports have increased by 2.3% giving the German economy a healthy trade balance.

EUR/USD has managed to maintain gains above 1.34 in the FX market – a weekly close around 1.3460. Over the conjecture on LTRO repayments prior to maturity by the European banks, EURUSD geared up in the Asian session. A survey for broker sentiment across the Eurozone shows a significant improvement with the index rallied at 23.6 and stands at 31.2 whereas the current German investor sentiment increased 1.4 points and stands at just 7.1.

The investors are now being seen for hoping a lot more of easing by Bank of Japan. The BOJ which is under a lot of political pressure from Japan’s Prime Minister Shinzo Abe will meet on 22^nd January, Tuesday to discuss its upcoming policy to put in place more hard-line easing measures to help tide the fall. The Euro also dipped lower against the Dollar after data showed that economies of the Euro zone would struggle in 2013 and brokers seem to be worried.

 Also, the Pound dipped significantly against the Dollar as the fears of a probable triple-dip recession broke among people. Also the rumours of the Prime Minister of Britain thinking of drawing the Pound from the Euro club let to the horrific fall of the Sterling against Euro which has for the 1^st time dipped lower than €1.20 since April. China’s economy however expanded a bit more than the forecast at the fourth quarter in the FX market. The Australian dollar however dipped low against the USD unlike its previous week causing a lot of trouble for Forex traders. The dollar as a whole faced slight increase in the Forex, however the Yen dipped low everywhere.

The USD/JPY market also increased by 0.954 point to 90.201 after the significant fall of the Yen and is expected to climb up until the bank implements its easing measures. The crude oil market has been showing a steady increase since December with the Light Sweet Crude breaking the level of $95 price. The EUR/USD pair significantly dipped due to fears of tripe-dip recession and ended at 1.3315 points and is expected to fall because of Euro zone economy struggle. However experts of FX market are of the opinion that it can be expected to stay above the level of 1.3250 points thereby giving a breath of relief to investors and Forex traders.

The AUD/USD market has slightly dropped contrary to the popular belief and has caused a lot of troubles for brokers. The market dipped to 1.05561 points last week; however experts believe that with the Global easing being done by banks they should send the market looking for 1.10 over a longer period as compensation between 1.02 and 1.06. The USD/CAD market climbed up to 0.9856 points however experts suggest it to be a short term rise.

Then there is also the AUS/USD pair which has taken people by surprise by dipping 0.00263 points to rest at 1.05561 but did not show much change. Another market that has shown change is the STR/EUR market, with Sterling for the first time trading below €1.20 at €1.1933. Also, the crude oil market has been gaining steadily slowing to trade at $95.82 after the decrease of 0.12 point.  Gold has shown a decrease in its market coming to trade at $1683.85.

Lately, the gold market has been showing a lot of fluctuations in its levels due the controversies surrounding the U.S market, which in turn is making its investors more confused as to where to invest their money and whether they can invest it in gold or not. Its analysis of previous weeks by brokers showed the rise of the market while this week shows a slight decline. Natural Gas traded to an increase of 3.572 to a significant increase of 2.23 percent. Silver traded at 31.862 with a slight increase of 0.16 percent in this week. Silver crossed the benchmark of 30.00 to climb up in trade earlier this week in the FX market.

Though David Cameron has re-affirmed that Britain would continue to be a part of the EU, there has been a recent update on economic data which reflects a possible recessionary period in the fourth quarter and this has been more devastating for the pound.

The EUR/GBP managed to stay afloat at 0.8317 increasing by 0.54 %. Everyone’s eagerly waiting for Ben Bernanke, the Federal Reserve Chairman to address on the important issue of monetary policy. Surprises on the central bank’s quantitative easing program are awaited.            

The Yen and the US dollar have been also suffering compared to the Australian and New Zealand dollars according to brokers. AUD/USD hit 1.0557 and NZD/USD was at 0.8399.The most surprising news has been the increasing trend in selling pressure observed in the Swiss Franc. Post the European Central Bank policy meeting on Thursday, the Euro and the Swiss Franc has grabbed a lot of attention in the Forex market. Japanese PM Shinzo Abe has already asked for a 2% targeted inflation rate by the central bank and these aggressive measures have started showing the side effects on the Yen as far as the FX market is concerned.

Not much change has happened with the USD/CAD pair in the Forex market for a long time and it is raising concerns of dead money. If it passes the 1.0050 level, there is a chance for this pair to observe a fast growing trend but it hits lower than 0.98, there is a chance of possible downfall. Unless one of these two things happens they will be stuck at where they are now.

AUD/USD must have done really well considering the economic data from China that reflected more than expected prosperity but there hasn’t been much to talk about. There were chances of a breakout but to no avail and gave way to a candlestick pattern. If in the upcoming week this pair can touch the 1.04 level, this would be highly supportive and anything above 1.06 will indicate a significant rise in the Forex currency.

The EUR/AUD sees some light in the future as it is expected to make a steady climb.

But it is not going to be without its harmful side-effects in the form of financial risks – this is a belief held by ten leading UK business men. Even USA has tried to put in a word to look before they take the major leap in the Forex market.

Japan is trying its best to cut down on its high unemployment rate and the government has announced a package as huge as $116 billion in the FX market. These funds will be utilized in different infrastructure projects and will help reconstruct the wear and tear that the tsunami caused in 2011. This could bring a prospective 2% growth in economy.  A strong Yen has been hurting the country’s exports and hence the government has made it clear to take steps to cause the depreciation of the Yen further. This is now going to definitely spread the message the government is trying to pass: Japan is not a safe haven for currency and trading will be more cautious now.

USD/CHF took a dip to 0.9223 in the morning trade to finally end up at 0.9229 recording an all-time low since Jan 8.

Official data from China revealed that its trade surplus increased surprisingly in December hinting at a possible quick recovery for the same. This has created quite a positive impact in investor’s confidence.

Chinese exports are up by 14.1% in December compared to the previous year in Forex. Imports are also up by 6% which is a good sign for the Chinese markets.

No significant developments are expected out of the European Central Bank’s monthly policy meeting. It is highly likely that the benchmark interest rate of 0.75% will remain the same according to brokers. EUR/CHF marked an increase of 0.01%, and consolidated at 1.2090.

The New Zealand dollar hit an all-time high against the Japanese Yen. Despite of reports of Japan showing its interest in buying bonds from the European Stability Mechanism, the EUR/USD has not shown any change.

Official data reflects that French industrial production observed an unexpected but tremendous increase in November, hitting 0.5% post the 0.6 % decline during the last month if FX news are to be taken into account.

This has clearly surpassed the expectations of the analysts and brokers who had placed their safe bets on 0.3%.

Barroso while addressing an audience in Portugal asserted on the necessity of the political union. At the same time he also raised concerns for the difficult economic situation the EU has been facing. He reflected on the same by pointing out to the problem of unemployment in the Eurozone which is now 11.8%, an all-time high. Spain and Greece are going through one of the worst phases of unemployment with respect to FX.

This socio-economic situation reveals the potholes in the revenue stream that it is facing when it comes to income taxes and additional expenditure to make social security payments.

The focal point of Forex news for many this week has been the European Central Bank monthly policy meeting scheduled for today. The general propaganda of the meeting is to decide whether the current policy is a sustainable solution. According to analysts and brokers no surprises are up for grabs except for the fact that Mario Draghi who has been responsible for few surprises in the previous meetings can cut down on the interest rates.

A 25 basis points cut in interest rates would lead to plunging the deposit rates into a negative scale. This according to critics will be a disincentive for regular savers. If there are no surprises on any interest rate cut, then maybe the Euro will have to take another dip.