Easy Forex Daily Forex Report 05-07-2012

FOREX Daily Outlook by Easy-Forex.com

ECB and BOE and Interest Rate Meetings Ahead

U.S. Dollar Trading (USD) July 4^th
celebrations kept the US session quiet with commodities and stock markets
closed. The EUR/USD is continued to be weighed by the expectations of a rate
cut today at the ECB meeting. The reaction to a rate cut will depend on the
stock market reaction with a positive move to the policy action potentially resulting
in gains for the EUR/USD. The more traditional response is a drop in the
currency if you cut the interest rate investors receive. Looking ahead, Weekly
Jobless Claims forecast at 385k vs. 386k previously. Also June ISM Services
forecast at 53 vs. 53.7 previously. Also June ADP National Employment forecast
at 105k vs. 133k previously.

The Euro (EUR) the EUR/USD eased
back towards 1.2500 as yields began to creep higher in Spanish and Italian
debt. Germany’s Merkel once again stated here opposition to the Eurobond idea
whilst the Italian PM voiced his support for the idea. The Sterling (GBP) the
GBP/USD fell below 1.5600 as its own risk event weighed with the BOE rate announcement
today and expected to result in some form of easing for the UK economy. The
EUR/GBP has been very stable in a 0.8000-0.8050 range. Also ahead, ECB
Rate Announcement forecast to cut to 0.75% vs. 1% previously. BOE Rate announcement
forecast to hold at 0.5%. The BOE Asset Purchase program is forecast to expand
to 375bn vs. 325bn previously.

The Japanese Yen (JPY) the USD/JPY is holding
under Y80 finding support on dips and pressuring the key topside level. BOJ
officials have continued to comment to the market that they will keep monetary
policy aggressively loose. EUR/JPY is pressuring Y100 as the EUR/USD falls into
the ECB meeting. Australian Dollar (AUD) the
AUD/USD is holding to a tight range just under 1.0300 as the market
consolidates. The AUD/USD did push above 1.0300 briefly in Asia yesterday on
the stronger than expected May Retail Sales but traders are hesitant to be too
long into the ECB and Nonfarm Payrolls. Looking ahead, AUD May Trade
Balance forecast at -500mn vs. -203mn previously.

Oil & Gold (XAU) Gold remained
strong supported on dips to $1612 finishing roughly unchanged near $1620. OIL/USD eased a little bit
as profit taking emerged after the $10 a barrel rally in previous few days.
Support was found at $86.50.

Pairs to watch

EUR/USD Sell the Rumor buy the fact? 1.2500 big
Level.

GBP/USD the BOE to Expand QE like traders expect?

TECHNICAL COMMENTARY

Forex trading involves substantial risk of loss, and may not be suitable for everyone.

Click here to visit Easy-Forex.com