Western Forex Insight By James Hyerczyk

Dollar Gains Against Euro for Second Straight Month Strong U.S. economic reports, lower crude oil prices, and hawkish comments from the Federal Reserve helped the U.S. Dollar gain versus the Euro for the second straight month. Given this favorable shift in the fundamentals toward the Dollar, traders are now waiting for negative news from the ECB or the Euro Zone to trigger more upside action. Technically, the market is slightly oversold. Holding support at 1.5453 could set up a short-covering rally back to 1.5640 – 1.5682. Firm Tone in GBP/USD Puts Pair in Position to Rally Next Week The British Pound stalled in its attempt to break out over this week’s high at 1.5818, but fresh buying on small breaks has kept the market in a position to break out to the upside. Much of the recent strength in the Pound can be attributed to the financial markets signaling an end to rate cuts by the Bank of England. The BoE has to decide by June 5 whether to cut rates to stimulate the economy or raise rates later in the year to combat inflation. Despite low consumer confidence and a tumbling housing market, traders are anticipating an economic recovery in the U.K. much like the recovery in the United States. This is why the market is leaning toward leaving rates at 5%. The charts indicate a break out through 1.9882 could trigger a rally to 2.0027.On the downside, aggressive counter-trend buyers could go long at 1.9622 to 1.9608. Profit-takers Hit USD/CHF The main trend is still down in the USD/CHF market. A pair of tops at 1.0601 and 1.0625 is keeping a lid on any rallies. This pair was highly correlated with the U.S. Stock market this week as better than expected economic reports lifted some of the uncertainty still lingering in the U.S. financial markets. Given the current bearish chart pattern, the stock market would have to rally substantially to turn this trend up. The minor reversal down indicates a break to 1.0371 to 1.0334 is likely. Counter-trend buying would have to come in at this zone to help provide support. USD/CAD Rallies on Worse than Expected Canadian Growth Figure The USD/CAD rallied as the Canadian government released a report showing that the Canadian economy grew less than expected. The economy surprisingly fell from up 0.8 percent to up 0.3 percent on the break. Talk is already circulating that the Bank of Canada will have to cut rates by 50 basis points at its next meeting on June 10. This contraction in the economy combined with a potential top and subsequent hard break in crude oil, may bring heavy selling into the market next week. The charts indicate a minimum rally to 1.006 is likely on this news. Please do not hesitate to contact us at 1-800-971-2154, with any questions. James Hyerczyk [url]www.brewerfx.com/jnorrisedu/[/url] DISCLAIMER: Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. The value of currencies may fluctuate and investors may lose all or more than their original investments. Risks also include, but are not limited to, the potential for changing political and/or economic conditions that may substantially affect the price and/or liquidity of a currency. The impact of seasonal and geopolitical events is already factored into market prices. Prices in the underlying cash or physical markets do not necessarily move in tandem with futures and options prices. The leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds and such may work against you as well as for you. In no event should the content of this correspondence be construed as an express or implied promise or guarantee B.I.G. Forex, LLC and Brewer Investment Group, LLC or its subsidiaries and/or affiliates that you will profit or that losses can or will be limited in any manner whatsoever. Loss-limiting strategies such as stop loss orders may not be effective because market conditions or technology issues may make it impossible to execute such orders. Likewise, strategies using combinations of positions such as “spread” or “straddle” trades may be just as risky as simple long and short positions. Past results are no indication of future performance. Information contained in this correspondence is intended for informational purposes only and was obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.