Posted: 09 Jun 2010 01:35 AM PDT

British trade balance disappointed for a second month in a row, with a deficit of 7.3 billion pounds, higher than predicted. This joins other bad news that the Pound receives this week, indicating that last week’s rally was only a one-time event.

GBP/USD is trading slightly lower than before the release, at 1.4440, and the trend is now downwards. This isn’t the only deficit that the UK is suffering from right now:

The deficit surprisingly fell two months ago, reaching only 6.2 billion, significantly better than 7.3 billion that was predicted. Last month already saw a return above 7 billion, with a disappointing outcome of 7.5 billion, worse than 7 billion that was predicted.

Earlier this week, the British budget deficit was in the headlines. The new British Prime Minister David Cameron began preparing the people for bad days. He said that the situation in Britain is worse than he thought and that severe austerity measures were necessary.

The result of these steps, or of the deficit, would be many years of economic pain, making a scary comparison:

Greece stands as a warning of what happens to countries that lose their credibility, or whose governments pretend that difficult decisions can somehow be avoided

While many in Britain disagree with Cameron’s dark stance, saying that it’s a classic trick by a new government, the budget cuts are backed by Fitch, that warned about Britain’s formidable fiscal challenge.

These talks hurt the Pound this week, as it dipped below 1.44 yesterday, hitting 1.4345, before recovering back to 1.4450 before the release of trade balance.

The Pound enjoyed a temporary rally last week, as it enjoyed news from the failure of the Prudential- AIG Asia deal. After reaching the key resistance line of 1.4780, it fell sharply down.

The Pound is capped by a minor resistance line of 1.4610 from above, and 1.44 below. Both are weak lines. A stronger support line appears at 1.4230, which was the year-to-date low. This line is followed by 1.4130.

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free.

Forex Daily Outlook – June 9 2010

Posted: 08 Jun 2010 02:00 PM PDT

Federal Reserve Chairman Ben Bernanke Testifies & delivers a speech, positive news on the Trade Balance positive in GBP, and more new in Japan regarding the final GDP. Let’s see what awaits us today.

In the US, Federal Reserve Chairman Ben Bernanke leads to heavy market volatility when delivering 2 parts testimony about the federal budget & Economic and Financial conditions at the House Budget Committee, in Washington DC. And supply interest rate clues when he delivers a speech titled “From Recession to Recovery” at the Forum on Employment Trends and Workforce Development Strategies at the Federal Reserve Bank, in Richmond.

More in the US, Crude Oil Inventories is about to rise by 0.8 Million, it measures the change in the number of barrels of crude oil held in inventory by commercial firms during the past week and affects inflation.

Finally in the US, an 8 times per year analysis meeting (2 weeks before each FOMC), that help make the next decision on interest rates.

For more on USD/CAD, read the Canadian dollar forecast.

Moving to Great Britain, Trade Balance that Measures the difference in value between imported and exported goods during the reported month shows a positive impact on exported goods with a rise of 0.5 Billion.

Read more about the Pound in the GBP/USD forecast.

In Australia, Dwelling Finance Commitments during the reported month, measures the change in the number of new loans granted for owner-occupied homes, showing a rise of 1.5%.

More in Australia, Wholesale Inventories that is Released monthly and Measures the Change in the total value of goods held in inventory by wholesalers is about to rise by 2% and impact on the future business spending.

For more on the Aussie, read the AUD/USD forecast.

In New Zealand, the Official Cash Rate (OCR) of the Reserve Bank of New Zealand (RBNZ), scheduled 8 times per year and measures the interest rate at which banks lend balances held at the RBNZ to other banks; shows a rise of 0.25%.

The RBNZ heals a 2 parts Press Conference of about 30 minutes long and create heavy market volatility. And include details on how they will achieve their inflation targets, formulate and implement monetary policy during the next five years, by releasing the RBNZ Rate & Monetary Policy Statements.

In Japan, the Final GDP, released quarterly, a primary gauge of the economy’s health that measures the change in the inflation-adjusted value of all goods and services produced by the economy is about to rise by 0.1%.

That’s it for today. Happy forex trading!

Want to see what other traders are doing in real accounts? Check out Currensee. It's free.

New Page – The People Behind the Site

Posted: 08 Jun 2010 02:24 AM PDT

Following some questions about who’s behind Forex Crunch, I’ve added a page for The Team. It consists of some information about the people behind the site (currently 3). Also the About page has been updated.

This follows the addition of the forex vendors page, and is part of a steady restructuring of the site, that I hope you’ll like.