We saw the UK employment data and the NIESR GDP estimate leaked today at 13:00 GMT ahead of tomorrow's scheduled release times. The employment figures showed that the number of jobless claims rose by 57.1K versus expectations of 85.0K. However, the unemployment rate rising to 7.1% from 6.7% weighed on the pound. Also, the GDP estimate saw last month's contraction revised to -1.7% from 1.5%, which was the reading for April. Although, we saw an improvement, it was from a worse than previously though level which also caused concern. Nevertheless, the pound has held onto most of its gains that were generated by the better than expected industrial production figures that showed that the contraction in manufacturing slowed to 0.1% , which was the lowest in over a year. If tomorrow's queterly inflation report shows that the BoE is becoming less concerned over the possibility of deflation, then we could see sterling continue its bullish trend wuth a possible test of 1.5500. However, giving that he central bank expanded it bond repurchase program, there is some skepticism.

__________________
John Rivera is the author of Market Brief, Top FX Headlines, and Forex Trading Weekly Forecast on DailyFX.com.

The BoE quarterly inflation report and U.S. retail sales combined to add to the bearish sentiment threat was fostered by a report that the U.S. could lose its AAA credit rating. Although, we saw the improvements that I was expecting in electronics and apparel sales they still remain in negative territory following their steep declines the month before. Add in a drop in food and gasoline purchases and you start to see the impact of a deteriorating labor market. Tomorrow;s PPI figures may present some event risk as the BoE's forecast for inflation to remain below their 2% target until 2012 has raised deflation concerns and could bring added focus to the U.S. inflation data.

__________________
John Rivera is the author of Market Brief, Top FX Headlines, and Forex Trading Weekly Forecast on DailyFX.com.

Tomorrow report on European GDP will be published at 09:00 p.m. Do you think this news will have a big impact on euro? If yes, how much percent will Euro fall or rise? According to the forecast the Quartely GPD is -4.1 %, trre times bigger than actual GDP. Taking into the fact that economy of Europe is slumping and shrinking at the fast rate since World War II the actual figure may be higher than expected one. Also we are witnessing the weakening position of euro. It is not stable and is not deemed as a reliaable currency. Any time investors might get rid of their euro deposits and convert their savings into dollar as it is a signle safe-heaven currency at the monent.
So according to my foreast euro will lose its position significantly agains other cables.
What is your forecast?

Well, we did see a worse than expected 4.5% decline in growth which sent the euro lower especially against the cable. It found brief support on the better than expected U.S> data but has come under pressure again. It appears that policy makers there don't want to stick their necks out and rather wait for a U.S. recovery to help pull their economy out of its downturn. We could see investors look to shed euro positions as the central bank remains divided on future policy and the uncertainty may scare bulls away.

__________________
John Rivera is the author of Market Brief, Top FX Headlines, and Forex Trading Weekly Forecast on DailyFX.com.

How far will Pound rally up or down? According to the forecast the Quartely GPD is -4.1 %, trre times bigger than actual GDP. Taking into the fact that economy of Great Britain is contracting at the fast rate the actual figure may be higher than expected one. But compared to Europe economy of UK does not depend stongly on manufacture as that of Eure. On the other hand GDP is not indicator of economic situation of UK as mostly depends on financial services. So do you think this indicator is the mirror of UK economy?
So according to my foreast euro will lose its position significantly agains other cables.
What is your forecast?

I can definitely see the Euro losing ground to the pound as the U.K. economy starts to generate domestic growth. We saw home prices rise today and that may set the stage for a considerable rise in consumer sentiment. However,be aware that the German ZEW reading is expected to jump to 20 from 13 which could send the euro higher in the near-term. Regardless the country is dependent on exports and its recovery could be tied to European emerging markets regaining their footing.

__________________
John Rivera is the author of Market Brief, Top FX Headlines, and Forex Trading Weekly Forecast on DailyFX.com.

A sharp fall in U.S. housing starts was able temper rising optimism and temporarily provide some dollar support. We may see markets remain cautious ahead of the Japanese GDP release in which economists are forecasting that growth contracted by 4.3% in the first quarter and by 16.1% on an annualized basis. If we see a sharper than expected contraction as we did last quarter then we could see a similar pick up in risk aversion. However, the flows were decidedly in the dollar's favor, as we saw the Yen lose its favor as a safe-haven.

__________________
John Rivera is the author of Market Brief, Top FX Headlines, and Forex Trading Weekly Forecast on DailyFX.com.

Thanks for answer! What about JPY? Is it weak against GBP this week? What currency, to your mind, is the weakst agains GBP this week?

Thanks in advance for answers!

Well , we saw the pound get slammed by the S&P downgrading its outlook for the U.K. economy to negative from stable. However, we have started to see the sterling regain its footing. The GBP/JPY touched the 20-Day SMA and bounced from the support level. If we see the pair break back above 150.00 then a test of the 200-Day SMA at 152.29 is strong possibility. Having said that 150.00 has held since November, 2008 and another failure could be the catalyst for a retrace.

__________________
John Rivera is the author of Market Brief, Top FX Headlines, and Forex Trading Weekly Forecast on DailyFX.com.

A inline UK GDP print added to the bullish pound sentiment but as the GBP/USD approaches 1.60 and GBP/JPY is still stuck below 150.00 we may be seeing it set up for a major retrace. Indeed, the growth figures showed a -1.9% decline in the first quarter and a 4.1% drop annualized. The report showed that private consumption fell 1.2% and exports dropped by 6.1% leaving the economy without any major sources of growth outside of government spending.

__________________
John Rivera is the author of Market Brief, Top FX Headlines, and Forex Trading Weekly Forecast on DailyFX.com.

The German unemployment report and U.S. durable goods will provide the major event risk for tomorrow. German consumer prices falling 0.1% in May helped send the Euro lower today. The single currency has since regained its footing but if we see a sizable drop in German unemployment it could reignite bearish sentiment. Economists are calling for a job loss of 64K following -58K in March which could lower the outlook for growth in the region. Meanwhile, U.S. Durable Goods orders are expected to rise by 0.5% which could spark risk appetite and lead to dollar weakness. So we could see some significant volatility in the pair on the day.

__________________
John Rivera is the author of Market Brief, Top FX Headlines, and Forex Trading Weekly Forecast on DailyFX.com.

The second reading of U.S. GDP was revised higher to -5.9% from -6.1% as more exports were added to the count. Yet, a decline in personal consumption from 2.2% to 1.5% made it a non-event. The upward revision in the University of Michigan consumer confidence reading to 68.7 from 67.9 is what has markets talking as it confirms the improvement in the Conference board's reading to start the week which ignited this week's equity rally. We have seen the dollar take it on the chin as money flows out of Treasuries in search of higher yields. Next week is full of major event risk as several central banks will announce their rate decisions including the Fed,ECB and Bo. Additionally, we will see Non-farm payrolls crossed the wires and expectations are for another 530K in job losses for the economy in May. Although, this would be an improvement from April, another half million Americans out of work will limit the outlook for a robust recovery. If we see central bank leaders also paint a dim picture for future growth we could see risk appetite wane and the dollar look to recover.

__________________
John Rivera is the author of Market Brief, Top FX Headlines, and Forex Trading Weekly Forecast on DailyFX.com.

Hi John Rivera, I am Jason. I am a new trader. May I know what mean of -5.9%? Is it mean that the currency decrease for 5.5% or the economic down for 5.5%. From the economic calendar, may I know why sometime the data for ‘actual’, ‘forecast’ and ‘previous’ shown in values instead of percentage? What is the different if they show in percentage and values? Besides, is there a video clip to show me how to trade the economic News after the news is released? Like how long to hold? How many pips to gain? And what time frame to use?

Jason, A good place to start if you want to learn about economic data and how to analyze it is start here - Economic calendar | financial calendar | Forex economic calendar Click on the link of the economic release and it gives you some great information. See below:



As for how to trade the news the best way is to watch price action once a economic number is released and see how the market reacts.

The form of the number is the way that it is reported, some things like retails sales are show by the percentage difference from the month or year prior, some are the actual numbers like change in jobs, and others are surveys and the reading is the number of positive outlooks versus negative outlooks. Our calendar is a good way to see what the indicator is telling us. We are developing a course to trade news releases, so I would expect to see in the near-term on the site. In the meantime our current power course has some insights into the process or you can also read our daily prices on trading the news EUR/USD: Trading the U.S. ISM Manufacturing .

__________________
John Rivera is the author of Market Brief, Top FX Headlines, and Forex Trading Weekly Forecast on DailyFX.com.