Our last post about the major currency trends was on May 24th and this time we are looking at the GBP/USD which is trending up now for 4 weeks in a row (green bars) and reamin 100% long for heding.

Only a close next week of below 1.5775 can change direction of the trend to a new down trend (red bars).

For other currencies see: http://www.2hedge.com/mmfxhedge.html

Famous  economist Marc Faber said the US economy will enter hyperinflation approaching the levels in Zimbabwe because the FED will be reluctant to raise interest rates.

BTW, Zimbabwe inflation is 231 million percent !!

See and read the interview with Bloomberg

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=akkToXD.vYds#

US unemployment has risen to European averages and seems likely to pass them when next month international data is calculated.

March US unemployment rate stood at 8.5 percent, the same as the average for the first 15 members of the European Union, the countries that were part of the group before it began to expand into Eastern Europe.

The EUR/USD is holding it’s uptrend since Monday May 5th. at 1.3435 (green bars).

The strong uptrend forced the percentage to hedge quickly to +100%

Other major currency trends can be found on:

http://www.2hedge.com/mmfxhedge.html

A quick look before the weekend on ranking the strength and weakness of the major currency pairs and major cross rates.

You can compare them with my earlier post on May 16th.

You are doing fine by just holding the 2-3 strongest and 2-3 weakest with support market speed.

It was a great week.

I know this has maybe not much to do with currencies, or maybe a weaker Dollar later, but it’s an important reading about the state of California, which normally represents 13% of the US economy !

Sales tax down >50% and income tax down > 43% !

Governor Schwarzenegger suggested he would require to close schools, release prisoners and limit basic service in order to keep the state running.

You can download the PDF here:

http://sco.ca.gov/Press-Releases/2009/05-09summary.pdf

Ranking the major currency pairs and cross-rates gives a general view about strength and weaknes.

AUD and NZD against the USA Dollar are the strongest at the end of last week while their momentum is high as well.

CAD and CHF against the US Dollar are the weakest with momentum holding down as well.

You can trade this strategy by holding the strongest long and the weakest short.

You can compare the table below with earlier posts abou this subject.

The EUR/USD is still trending up as bars remain green and the RSI stay’s above the 50 level.

RSI > 50 means more upward pressure than downward pressure v.v.

It’s clear that we have to pass the last top  of late March before getting higher.

Only a close (New York 4 PM) next week below 1.3460 will change the trend to red bars.

A short message but with a lot of clear answers and interesting checklist of how to read the US economic indicators and the reaction on the outcome on other markets, incl. the US Dollar.

You can download the PDF file here:

http://www.thegoldandoilguy.com/Economic-Indicators.pdf

Two very interesting articles about T-Bond auction and the Gold market.

The USA 30 year T-Bond auction met a dismal reception and will force the Government to pay higher interest rates in the future ?

The article: http://news.kontentkonsult.com/2009/05/us-awash-in-sea-of-read-ink-going-fwd.html

Meanwhile the Gold holdings are climbing steady with possible higher interest rates for the future and so higher inflation !

The article: http://www.nuwireinvestor.com/blogs/investorcentric/2009/04/more-gold-news.html