Gold is firm

Gold is firm as we start the new trading week. The spot price stands at $1280.21 per ounce in Monday’s European session. The precious metal had a strong week, gaining about 2.9% against the US dollar, as fighting continues between insurgents and government forces in Iraq. On the release front, today’s highlight is Empire State Manufacturing Index. The markets are expecting another strong reading. On Friday, US key numbers were weak, as PPI and UoM Consumer Sentiment both softened in May.
In Iraq, militants linked to al-Qaeda continue to progress towards the capital of Baghdad after capturing key cities on the weekend. The insurgents have seized control of the northern oil city of Kirkuk, which could hamper oil production and exports from Iraq.  Gold prices have reached three-week highs, as concerned investors continue to snap up gold, which is considered a hedge during periods of geopolitical instability.

Japanese Prime Minister Shinzo

Japanese Prime Minister Shinzo Abe unveiled a plan on Friday to cut the corporate tax rate below 30 percent in stages to help pull the economy out of two decades of sluggish growth and deflation.
Investors have been scrutinising whether Japan can substantially lower the corporate tax rate – among the highest in the world to spur growth in the world’s third-largest economy. Abe also needs to strike a delicate balance between stimulating growth and reining in snowballing public debt, twice the size of its $5 trillion economy.The corporate tax cut is a major issue to be included in the government’s key fiscal and economic policy outline, which will be finalised around June 27 along with a detailed “growth strategy” of structural reforms.“Japan’s corporate tax rate will change into one that promotes growth,” Abe told reporters, adding that he hoped the lower burden on companies would lead to job creation and an improvement also for private citizens.

USD/CHF Daily

 USD/CHF  Daily
Decent recovery last few hours after mkt. held between the0.8950 and 60 sups. Res. is still at 0.9011 and, if the mkt. does  break to a new high, next focus is 0.9035. If the rally is to continue, 0.8975/80 should contain the current setback.

Trading Forex Pairs

The second component of what makes a good pair to trade is the spread. Having a 100 pip ATR doesn’t do you a lot of good if the spread is 50. Does not usually happen but you get the idea. However traders would like to see a ratio of the spread to the daily ATR of about 1:50 or more. What this means is that if a particular currency pair has a spread of two pips, You would like to see at least a 100 pip ATR. Often this is very easy to achieve, but in our current market it doesn't happen too often.

Best Forex Pairs

U.S. dollar

The U.S. dollar remained little changed against most of its major rivals Thursday after the release of slightly disappointing numbers for May retail sales and weekly jobless claims.
The data pointed to a slowly improving U.S. economy and was unlikely to prompt the Federal Reserve to raise interest rates sooner than expected.
The dollar held steady against the yen at 102.04, while the euro traded flat at $1.3534.
The Commerce Department reported Thursday that retail and food sales rose 0.3% in May from the previous month to $437.65 billion, and were flat when gasoline and autos were excluded. That compares with expectations of sales rising 0.7% in total and 0.4% excluding autos.
In addition, the Labor Department said that initial claims for unemployment benefits rose by 4,000 to 317,000 in the week ended June 7, while economists had forecast 310,000 claims.
While the numbers were below expectations, they were expected to do little to convince investors that the Fed will move forward its timing for raising interest rates, said Michael Woolfolk, senior currency strategist at BNY Mellon. Higher rates would boost the dollar against rivals, as it would increase investors' returns in dollar-denominated assets.

USD/CAD

USD/CAD is steady in Wednesday trade, as the pair trades below the 1.09 early in the North American session. This is the first time that USD/CAD has been in 1.08 territory in over a week. In the US, it’s a quiet day, highlighted by Crude Oil Inventories. There are no releases out of Canada on Wednesday.
There was more good news on the US employment front, as JOLTS Job Openings jumped to 4.46 million, up sharply from 4.01 million a month earlier. This easily beat the estimate of 4.04 million, and comes on the heels of a positive Nonfarm Payrolls last week. We’ll get a look at Unemployment Claims on Thursday, with the markets expecting a slight improvement compared to the previous release. There has been only one Canadian release so far this week. Canadian Housing Sales hit 198 thousand in May, easily beating the estimate of 185 thousand. This points to strong activity in the Canadian housing sector, a critical component of economic growth. We’ll get look at Manufacturing Sales, the highlight event of the week, on Friday.

AUD/USD

AUD/USD has posted modest gains on Wednesday, as the pair flirts with the 0.94 line early in the North American session. The Aussie is on a roll, having gained about 150 points in the past week. On the release front, Australian Consumer Sentiment bounced back with a gain in May. In the US, today’s highlight is Crude Oil Inventories.
On Wednesday, Australian Consumer Sentiment posted a modest gain of 0.2%, bouncing back after a sharp decline of 5.6% a month earlier. This was welcome news, as the consumer confidence indicator posted only its second gain of the year. Earlier in the week, CPI jumped 2.5% in May, a four-month high. The strong reading edged above the estimate of 2.4%. NAB Business Confidence came in at 7 points, as the indicator continues to move upwards. Meanwhile, ANZ Job Advertisements took a tumble, posting a sharp decline of 5.6%, its worst showing in three years. We could see some stronger movement on Thursday, with the release of Employment Change and the Unemployment Rate.
There was more good news on the US employment front, as JOLTS Job Openings jumped to 4.46 million, up sharply from 4.01 million a month earlier. This easily beat the estimate of 4.04 million, and comes on the heels of a positive Nonfarm Payrolls last week. We’ll get a look at Unemployment Claims on Thursday, with the markets expecting a slight improvement compared to the previous release.