The Japanese yen

Capital markets continue to look for interest rate clues and the central bank in the pole position  the Bank of England (BoE)  could indicate a possible change to these seemingly uniform monetary policies. The pound is floundering just below 1.6800 level in quiet trade. Though there are no central bank rate announcements due, the market will get to hear from BoE Governor Mark Carney midweek. On Wednesday, the BoE will publish its forecasts for growth and inflation and investors will be focused on the timing for the U.K.’s first post-crisis rate hike. If the BoE happens to lower its expectation of slack in the U.K. economy it could be supportive of sterling.
The Japanese yen is listless on Monday, as the pair trades slightly above the 104 line in the European session. On the release front, Tertiary Industry Activity disappointed, coming in at -0.1% in July. Consumer Confidence showed little change, missing expectations. In the US, there are no economic releases to start off the week. The sole US event on Monday is a speech by Federal Reserve Governor Stanley Fischer, who will speak at a conference in Tokyo.
Japanese releases started off the week with disappointing numbers. Tertiary Industry Activity, an important manufacturing indicator, posted a decline of 0.1%, short of the estimate of a 0.2% gain. This weak reading was a sharp drop from the strong gain of 0.9% a month earlier. Elsewhere, Consumer Confidence came in at 41.5 points, short of the forecast of 42.3 points. The good news is that the indicator has moved upwards for three consecutive months. We’ll get a look at the BOJ minutes on Tuesday.

Trading Mistakes and Traps

As traders are taking any buy or sell areas  in markets, they make sure to know where price is with regard to the larger time frame supply  demand curve. Whether you trade Stocks, Futures, Forex, or Options, understand that behind all the candles on your screen in all these markets are people and their emotions. Most will fall for the emotional breakout trading traps while others will get paid from them. In short, instead of entering the market on the initial move higher or lower from a level, enter on the first pullback into the fresh supply or demand level. This is one of the most common mistakes many stock traders make and a very easy one to correct. The reason traders are concerned about this index is that it is comprised of small cap companies that generally do not have international risks for their business.  Without the world wide income, they are more responsive to changes in the United States economy and can be a better barometer for the make up of our US economy and markets.  When this index is not doing good, it is a bad sign for the stock market as a whole.

GBP/USD Daily

 GBP/USD   Daily
13::45 GMT - New reaction low at 1.6814 so far today before bounce.  Daily indicators are at their most oversold level in the last 18  months or so so we should see a recovery attempt soon. Next lower sup. is at 1.6785. Initial res. is at 1.6865/70 then at today's high at 1.6893.N.I.
R5: 1.7060~ * 23-Jul sell break
R4: 1.7   25, 28-Jul highs
R3: 1.696   25-Jul low
R2: 1.6926 * Thurs high
R1: 1.6893   today high
S1: 1.6814   today low
S2: 1.6785 * 12-Jun low
S3: 1.6740~   10, 11-Jun lows

Canadian dollar,USD/CAD

The Canadian dollar continues to travel south, as USD/CADÂ trades in the low-1.09 range on Friday. In the US, the markets will have plenty of data to sort through, with three key events later in the day – Nonfarm Employment Change, Unemployment Rate and ISM Manufacturing PMI. We’ll also get a look at consumer confidence levels, with the release of UoM Consumer Sentiment. There are no Canadian releases on Friday.
Although the US jobs report disappointed, it's not enough to stall the greenback's rally and the market is eyeing C$1.1000 as a key level on , says Blake Jespersen, managing director of foreign exchange at BMO Capital Markets. "I think we'll see a lot of hedging activity at 1.10. That seems to be where a lot of the Canadian exporters are targeting." First though, the pair will have to breach the C$1.0950 barrier. Jespersen says the "overwhelming theme" at the moment is to buy USD/CAD on dips. He pegs support for the pair at 1.0880. USD/CAD last at 1.0906, little changed from yesterday's close.

USD/JPY/The S&P

USD/JPY has posted gains on Tuesday, as the pair has pushed above the 102 line and hit three-week highs. The dollar took advantage of disappointing Japanese consumer spending in June. On Tuesday, Japan will release Preliminary Industrial Production. Over in the US, today’s highlight is CB Consumer Confidence. The markets are expecting another strong showing from the June release.
Japanese data was dismal on Tuesday, as consumers continue to keep a tight grip on the purse strings. Household Spending declined by 3.0%, the third straight drop. The figure did beat the estimate of -3.7%. Retail Sales, the primary gauge of consumer spending, posted a decline of -0.6%, worse than the estimate of -0.4%. This was also a third straight decline. As well, Unemployment Rate rose to 3.7%, above the estimate of 3.5% and the highest level recorded since January. These figures point to trouble, as less consumer spending will likely translate into decreased economic growth and put more pressure on the Japanese currency.


The S&P/Case-Shiller price report shows a sharp slowdown in US home prices in May, which Mizuho Securities USA chief economist Steven Ricchiuto says reflects the US housing market losing momentum. "This downshift in prices reflects the fact that the housing market has lost its upside momentum despite the low level of yields," he says. "This is something none of the growth bulls were expecting to develop this year." The choppy recovery in the housing market is a part of the economy the Fed is still keeping a close eye on, and could build a case for the doves to hold rates low for longer.

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Gasoline inventories and Gold

Futures declined as much has 0.5 percent in New York, and were poised for a weekly loss of 1.4 percent. Gasoline inventories climbed to the highest level since March, while crude supplies dropped for a fourth week, Energy Information Administration data showed on July 23. President Barack Obama said he expects the downing of the Malaysian Air jet in Ukraine to push European nations toward tougher sanctions against Russia.
U.S. refineries are clearly turning more crude oil into refined petroleum products at present than is actually needed,Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said by e-mail. The build in gasoline inventories significantly exceeded expectations. Besides the increase in production, this was also due to weaker demand.
WTI for September delivery fell as much as 51 cents to $101.56 a barrel in electronic trading on the New York Mercantile Exchange, and traded for $101.66 at 1:11 p.m. London time. The contract slid $1.05 to $102.07 yesterday, the lowest close since July 16. The volume of all futures traded was 10 percent above the 100-day average for the time of day.

Bullion fell as much as 1.3 percent to $1,289.40 an ounce yesterday, the lowest since June 19, as U.S. equities reached a record after data showed jobless claims fell and global manufacturing increased. The metal, which yesterday fell near its 200-day moving average, slid 28 percent last year on expectations the Federal Reserve would tighten monetary policy.
U.S. interest rates may rise sooner than forecast if the labor market continues to improve more quickly than anticipated,” Fed Chair Janet Yellen said last week, adding the central bank must press on with stimulus because  significant  remains. Gold is heading for a monthly loss even amid unrest in Ukraine and the Middle East.
Gold decline to near the 200-day moving average  so far been enough to halt the slide, as short-sellers have used that support to book some profit,Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, said today by e-mail. Considering the improvement in recent data and speculation about the Feds intentions with regard to tightening, the market will be nervous over the coming week, leaving little room to the upside.