Macro flows into and out of the US dollar continued to control capital movement during the week.  Riskier assets such as commodities and equities gyrated as investors were pushed and pulled as the currency markets fluctuated.

Market participants continued to focus on the need for a potential re-structuring of Greek debt, which has widen peripheral yields and put pressure on the Euro currency.

On Friday, the release of Euro-zone GDP showed stronger than expected economic growth, adding pressure on the ECB to continue rate normalization.   Overall euro zone GDP accelerated more than expected, to 0.8%  quarter over quarter  from 0.3% q/q in Q4. The acceleration was driven by 1.5% growth in Germany and 1.0% growth in France, while Spain and Greece both also released positive GDP figures, with Greece reporting the first positive GDP since 2009.

Germany and France data suggests that the recovery was increasingly boosted by domestic demand, which is encouraging, but also means there is a growing risk that the still very accommodative monetary policy will facilitate a renewed build up of imbalances and allow inflation to take hold.  In addition, strength in domestic demand would also ignite fears of pass-through inflation from higher commodity prices to higher wages, as slack in the labor market declines.

At the same time, despite the weakness in the periphery, with Greek yields near 15% and Portuguese near 10% the strength in the core continues to support the argument for more ECB hikes, with the OIS pricing in another 25 basis point hike in July.

This data highlights that the key driver for the EUR/USD, the divergent policy outlook between the Fed and the ECB, will remain in place.  Although CPI in the US were in line with expectations, (consumer prices rose a seasonally adjusted 0.4% from March), the FOMC believe these relatively high numbers are transitory and are not looking to raise rates for the foreseeable future.

The Euro made an effort at pushing above 1.43 but was rejected near the 5-day moving average.  A break above 1.43 will likely target a test of the 10-day moving average near 1.44. Support on the Euro is seen near 1.4150.

US Sentiment Climbs in a Volatile Week

Economic data in the US was mostly positive.  Initial Jobless Claims declined after jumping hire in the previous week.  Retail sales was solid and consumer prices were relatively tame.  Retail sales increased 0.5 percent, in April, after a 0.9 percent increase in March, according to Commerce Department.  The retail sales number did not reflect the strong earnings and comps reported by a number of retailers during the week.  The median forecast of economists surveyed called for a 0.5 percent rise in retail sales, with estimates ranging from gains of 0.2 percent to 1.2 percent.

Initial jobless claims decreased 44,000 in the week ended May 7 to 434,000, according to the Labor Department. Economists forecast 430,000 claims.

Consumer prices rose a seasonally adjusted 0.4% from March, according to the Labor Department. That followed increases of 0.5% in March and February that were also driven by higher energy and grocery prices. Core inflation, which excludes energy and food costs, rose by a monthly 0.2% in April, after a 0.1% increase in March.  The results were exactly in line with what economists had forecast.  On an annual basis, consumer prices rose by 3.2% last month. So-called core inflation stood at an annual 1.3% in April, within the Federal Reserve’s comfort zone.

Equity markets were driving by the large moves in petroleum and commodity prices as de-leveraging occurred after another round of increases in margin requirements.  Oil prices plunged at the end of the price week and continued to gyrate as the Chicago Mercantile Exchange increased margin on all petroleum products including crude oil, gasoline and heating oil.  Margin requirements are a function of volatility and price and are calculated automatically using the CME spam risk array.  It now cost more than 16,000 to own one contract of crude oil.

The rise in margin costs have taken a lot of the froth out of the energy markets and now have market participants focusing on energy fundamentals.  The 10% decline in gasoline prices should be a net benefit to the US economy.

The S&P 500 Index consolidated as “risk off” traded days with “risk on”.  The index held support levels at 1335.

China Still Tightening

Markets are also fighting headwinds of additional tightening of rates by the Chinese government.  Thursday’s increase in reserve requirements by 50 basis points to 21% was primarily a tool to mop up excess liquidity in the interbank market resulting from incomplete sterilization. Their main tools for restricting economic activity are lending quotas and credit restrictions for banks, which are also being tightened.

Next week the markets will be watching:

• Monday – Japan Confidence (500 GMT), EMU CPI (900 GMT), US Tic Data (1300 GMT)
• Tuesday – RBA Meeting Minutes (130 GMT),German Zew Survey (900 GMT) US Housing Starts (1230 GMT), US Industrial Production (1315 GMT)
• Wednesday – Australian Wage Price Index (130 GMT), Japan GDP (2350 GMT)
• Thursday – UK Retail Sales (830 GMT), US Jobless Claims (1230 GMT)
• Friday – German PPI (600 GMT), Canada CPI (1100 GMT)

	Profitability:
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Automated Forex Cash looks like a fairly impressive system at first glance and we enjoyed the simplicity of the website, although we felt as if we were reliving part of our life while we were viewing it.

This is one of those systems that makes a lot of claims but leaves you wondering if it is actually able to pull through on everything which it claims to do.

As is the case with almost every system such as this, it sounds good on the outside but you kind of wonder what is going to be on the inside, once you take the wrapper off.

Let us take the wrapper off for you…

Go to the official Automated Forex Cash site >>

What it Claims to Do…

Automated Forex Cash makes some very familiar claims that we have seen over and over again by other similar products. What exactly are those claims?

First of all, it tells you that you can use their system in order to do all of your trading automatically with only about 15 minutes worth of work from you every day. In other words, grab a cup of coffee in the morning and look over the system before heading off to work for the day. While you’re working, it will be making you money.

Simplicity is one of the main selling points for this particular product and according to their claims, you can get it up and running within five minutes.

It’s reliable, consistent and works with any Forex broker, regardless of the platform that they’re using.

What it Actually Does…

We found this product to be middle-of-the-road as far as what individuals had to say about it. Just as we felt like we were reliving moments of our life whenever we were reading the sales page, we felt the same way whenever we were reading the reviews.

Is it possible that this program can help you to make money with Forex trading? Yes, it can, but it does not seem to be a system that is for everyone.

According to some of the reviews that we read, it uses some fairly common indicators in order to let you know whenever it’s time to get into a trade and when you get out. Although these can work quite well for you, it is far from being a hands-off system. As a matter of fact, many people say that it is a better idea if you watch a system such as this constantly rather than allowing it to do the work for you in 15 minutes.

Conclusion…

Automated Forex Cash is going to receive a fairly low rating. It can work for you and it is certainly worth checking out for the price if you’re just getting started in Forex trading. We would recommend, however, that you try it on a platform that gives you a free trial, such as EasyForex before trying it with any real money.

One of the most disappointing part about this system is the fact that it just appears to be a clone of many of the other systems that are out there, such as Forex Virtuoso or the Forex Annihilation System. If you own either of these products, you would be better off spending your money on a truly automated system, such as Forex Autopilot.

Our Suggestion:

We do not recommend using Automated Forex Cash over our #1 rated system:

Forex Autopilot System (“FAPS”) – You can go here to read our review of it.

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