More Serene than Stress

Risk appetite generally improved again last week and there was little sign of nervousness ahead of the EU bank stress test announced late on Friday.
There was little late reaction participants appearing to await the digestion of the results over the weekend. The majority of subsequent comment seems to indicate that the test was too soft. Just 7 out of 91 banks failed the test but left many questions unanswered. Importantly Sovereign debt default was not included and the measure of reduced growth levels was far less dramatic than many would have liked to have seen.
It remains to be seen next week if the markets take the view that this was indeed to soft a test or that as the test is over and done with it is no longer an event risk for the market.I would favor the former but equity markets shrugged off any bad news last week preferring to focus on strong company data . This rather than comments from Fed Chairman Bernanke which indicates the Federal reserves ongoing concern about the strength of recovery in many areas. In Europe economic news tended to better than expected. German IFO numbers and in the UK more buoyant retail sales and 2nd Quarter GDP which was much better than the market anticipated.The technical picture improved for US equities and commodity currencies faired well.
All this leaves the forex market without too much to get its teeth into and few commentators with any real solid views as to any major trend moves. For the time being it seems more likely that the USD/ EUR will gravitate around these levels until either a real move higher in equities or another big sell off. The US currency has lost its appeal recently and as I have mentioned before while it may be temporary the Euro area problems are at least for the time being on a back burner.
Another week of similar trading would probably see a general sell off in volatility and narrowly mixed Forex markets for more of the summer.

Summer ……and the shorts are taken out.

On the one hand there was the usual forex market reaction to Risk aversion sales, on the other there was the stellar performance of the Euro. Yes one would assume that many Euro Shorts self included felt the pain last week. Despite weaker equity markets the Euro /USD powered over 1.30 at one point and closed around 1.2930. As commodities and gold took a hit not surprisingly the Canadian dollar faired worst losing almost 5 % against the Yen and a little less against the Euro.
Equity markets and the dollar focused on slightly weak data rather than Corporate earnings and the Euro further benefitted from better than expected bond auctions in Greece and Spain.Data from Germany remains solid  and this has helped keep a more positive Euro mood.
However, I do believe that it will only be a matter of time before lagging growth and other strains on the weaker Euro members reemerges to the detriment of the Euro. Next weeks banking stress tests could also prove a stumbling block.
All in all the picture for growth remains cloudy with signs also of a slowing in China. Thus we continue to see equity markets having good and bad weeks with the US dollar and Yen reacting accordingly in the main.
Technically the US dollar still has further to fall before perhaps events turn things positive again which might be a few weeks off yet.
 

Easy-Forex Upgrades its Forex App to be Compatible with iPhone 4 with iOS4

Easy Forex- who in our humble opinion have the best iphone forex app for trading currencies on your iPhone (or iPod Touch) have upgraded their application so that it is compatible with the new iPhone 4 hand sets that use iOS4. This app is FREE from the iTunes App Store. Even if you don´t trade with Easy Forex, we´d recommend the app- you don´t need to trade for real to use the real time charting.

We have included screenshots of the app below

Currency Rates
Get real time rates for multiple currencies and commodities including Oil, Gold and Silver.

Charts
Analyze real-time charts on your touch screen. Rotate your iPhone and go from vertical to horizontal chart views.

Inside Viewer™
Exclusive to easy-forex® this is a great trading tool that gives you a unique market insight on the traders on Easy Forex. See which trading pairs are most popularly traded, in which direction, and see the aggregate deal structure of all open deals.

Financial Calendar
Stay posted with breaking Economic Indicators. Especially good for staying on top of  the fundamentals, find out what is affecting the market as soom as it happens.

Outlooks
Read Daily and Weekly Outlooks from wherever you are.

My positions
If you trade with Easy Forex, login securely and get a real time report of ‘My Position’ with all your deal details. Check your Account Statement’s free balance, total margin and profit/loss. Close deals and cancel limit orders.

Equity market recovery points the way and in World Cup will the Dutch effort go to pot.

The forex markets continued to follow the improvement in risk sentiment in the recent time honored fashion.
The US dollar and Japanese Yen were weaker and the commodity currencies especially the Ausie Dollar enjoyed a good week.
The US dollar Euro touched levels just over 1.27 as equity markets surged with the US markets enjoying their best week for the whole year. Notable absentee at the party was Sterling which failed to make headway against a weaker dollar and lost over 5% against the rampant Ausie.
So where to next and can stock markets continue to lead the process.Well the pessimists will point to a low volume rally in oversold stocks and still talk of the double dip. In truth for equities the answer may lie in 2nd quarter Corporate numbers which will begin to be announced.. This will undoubtedly hold the key to forex moves for the dollar and Yen.
Technically the Euro/USD has good resistance over 1.27 and one feels that risk sentiment would need another good leg up to provoke such a rally and perhaps a test of 1.30 and higher. On balance I favor a scenario of another leg down for both.
Statistics next week do not offer too much scope for any major surprises but we will see.As we move into the holiday season European problems are not in focus but undoubtedly will return at some stage.
Finally we have the World Cup final tonight where at least Europe has once gain dominated.Odds favor a Spanish victory prompted from Barcelona but without a flag in sight or a firecracker heard in Cataluña.

Gloom and Doom as equity markets fall and Germany makes the Semis

Stock markets around the world once again called the shots for the forex market.
New 2010 lows for many equity markets caused the largely usual knee jerks in currency markets. The Yen and Swiss Franc were the biggest winners particularly at the expense of the commodity currencies(AUS and CAN Dollars) some 5% plus gains.
Where things did turn out a little different was the EURO and GBP which made up ground against the US Dollar the Euro closing the week at close to 1.2550. Already commentators are talking the decoupling of the Euro US dollar relationship visa vi general risk aversion. On balance though that seems a little to early to call on one weeks price action. Gold also faired unexpectedly badly closing down at just over 1200 .
All the statistics were pretty much market negative and it is difficult to see any real change next week.
It seems as if something will need to rescue the stock markets for things to stop getting worse.Technically the picture seems to be getting slowly more adverse for equity markets and while Forex markets can decouple from this it looks unlikely. The end result could see a reemergence of US Dollar strength against the Euro.
As for the World Cup , Holland Spain would be nice but would you really bet against the Germans