Daily Forex Market by FXCC 05Jun2012

G7 calls for an emergency conference call to discuss the EU crisis

The Queens Jubilee finds UK markets closed for a four day holiday, rumors of a master plan for Europe and significant central bank risk with ECB, BoE, BoC and testimony by Chair Bernanke later this week are the themes that are driving markets. Friday’s rally in gold speaks volumes about how the weak US employment report has triggered expectations for the Fed to announce QE3. On Monday the USD weakened as the euro climbed. It was a day thin on eco data and the news flow was light also. The main events were Spain, Italy and Greece. S&P made book on a Greek exit them a 1-3 chance of leaving the euro.

The G7 Finance Ministers have agreed to hold an emergency conference call to discuss the eurozone crisis, in particular Spain. The EU leadership seems to be drawing lines in the sand, as Merkel refuses to accept eurobonds or joint debt without fiscal control. There will be a battle brewing here. In a surprise move a director from the PBOC said that China would assist in buying euro debt to help ease the crisis.
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2012-06-05 07:58 GMT : EMU - Purchasing Manager Index Services
2012-06-05 09:00 GMT : EMU - Retail Sales
2012-06-05 10:00 GMT : Germany - Factory Orders
2012-06-05 14:00 GMT : US - ISM Non-Manufacturing

2012-06-05 04:37 GMT : RBA slashes rates by 25 basis points to 3.50%
2012-06-05 02:30 GMT : China HSBC China Services PMI 54.7 in May
2012-06-05 01:31 GMT : Australia Current Account Balance -14.9B in 1Q
2012-06-05 01:25 GMT : USD/JPY dips towards 78.00 well supported

EURUSD : 1.25226 / 1.25228

1.2719 | 1.2630 | 1.2576
1.2433 | 1.2344 | 1.2290

TREND : Up trend
MA10 : Bullish
MA20 : Bearish

MARKET ANALYSIS - Intraday Analysis

Signals are mixed, struggling to make a bullish turn, significant resistance lies at 1.2500. EUR/USD It has an intraday support at 1.2410 and resistance at 1.2530. Daily indicators are all showing red/sell. MA short terms read buy but longer term give sell signals. RSI and Stochastic as well as MACD are sell with StochRSI showing overbought. Technicals are all giving mixed signals.

GBPUSD : 1.53946 / 1.53955

1.5478 | 1.5447 | 1.5419
1.5360 | 1.5329 | 1.5301

TREND : Down trend
MA10 : Bearish
MA20 : Bearish

MARKET ANALYSIS - Intraday Analysis

Technicals remain bearish ‐ RSI off sub‐20 low suggests potential for pause; Jan 2012 low is at 1.5235. GBP/USD can give a rise up to 1.5405 thus traders can buy on dips but overall selling on rise is recommended for the day. It has a good support at 1.5250 and resistance at 1.5465. Expected intraday range is 1.5260 - 1.5405.

USDJPY : 78.423 / 78.427

78.950 | 78.682 | 78.505
78.065 | 77.803 | 77.625

SUMMARY : Neutral
TREND : Sideway
MA10 : Bearish
MA20 : Bearish

MARKET ANALYSIS - Intraday Analysis

Watch for the USDJPY to grind even lower toward its last support areas just above 78.00, but important support is already slightly above these levels at the 200-day moving average around 78.60 and the chart is also showing so-called “triple divergence”, in which a third new low has been set while a momentum indicator like the MACD continues to creep higher at each new low. This suggests a consolidation could be in order in the nearest term.

Source: FX Central Clearing Ltd, (http://www.fxcc.com)