US Housing Key Today

We have the EuroZone Trade Balance at 09h00 GMT but the most significant fundamental today is the new residential construction data and consumer sentiments from the US. Housing starts to be released today are expected to show further deterioration in the housing markets and the University of Michigan’s consumer sentiment is expected to fall beyond 26-year low to 62 in May. So the Greenback’s trend is to be defined by the data especially in the US session.

The recent strength in the Greenback might be short lived as Bernanke also made it clear that banks have still not recovered fully from the credit crisis and are not pulling their weight by becoming more relaxed about lending. Unemployment is still rising as suggested by continuing claims and industrial production hasn’t been able to gain critical momentum to post even close to consensus forecasts. Therefore, to conclude the week, we are too optimistic about the notion of the Bucky being on the verge of an overall Major Trend change in the Greenback. The fact that Crude is pulling back is a good sign, but let’s see if this is sustained. Crude futures fell last night from $125.50 to $121.50 in a matter of minutes

Herewith the Probability Studies for Today:

EUR/USD – Bullish Probability. Price could not succeed to violate the bullish 60minute trend support line yesterday and started to trend higher since the low of 1.5419. Just wait for the hourly indicators to confirm their bullish crosses and then we will have a suitable trading condition on our hands. Again, we have to mention that if the 60minute trend support line is violated to the downside, the bullish probability will be no more

USD/JPY – Bearish Probability. The bullish 60minute trend support line has been violated to the downside and therefore the new bearish 60minute trend. Just wait for the indicators – especially the Stochastic – to cross bearish and you have a suitable bearish trading condition

GBP/USD – No Trade Zone within a Bullish Probability. The bearish 60minute trend resistance line has been violated to the upside but the violation has not been confirmed yet. As soon as price takes out a few highs from a market rhythm perspective, it will force the 1 hour indicators to cross bullish and then only we might have a trading condition today

USD/CHF – Bearish Probability. The 60minute trend is bearish but the main concern here is the fact that the Stochastic is somewhat mixed at this stage. As soon as we see some sort of a pull back and a new fresh bearish cross of the Stochastic, the CHF will be tradeable once again

To view a more in-depth analysis on the other pairs such as the AUD and CAD crosses, please visit our Live Trading Room at http://www.fxinstructor.com/eng/support/webinar.php to see and hear our FXInstructors analyse the markets and identify trades

Enjoy the Weekend!