Huge swings in the market today led by reversals in many popular FX pairs. AUD/USD went from rallying to a high of 107.50 to a low of 105.93.

EUR/USD looked like it was on its way to 1.45 only to finish the day at 1.4320. The CHF was a big winner today with USD/CHF setting a record low at 0.8390 and EUR/CHF doing the same at 1.2060. The JPY was strong, recapturing yesterdays lost pips and breaking under 81.

ADP report added only 38,000 jobs in May. This was so far below expectations that both Goldman and Citi cut forecasts for Friday’s NFP.

ECB president Jean Claude Trichet announced today that inflation in the Euro zone has slowed to 2.7 % from 2.8 % during May 2011. Europe’s central bank signaled that it may keep a interest rate hike on hold in June 2011, however Van Vliet an economist at ING Group in Amsterdam said that Euro zone inflation is more likely to remain above 2% for the remainder of 2011.

The consumer confidence report from the U.S. was also released today, showing a decline to 60.8 compared to last month’s figure of 66.0. The Euro zone economy is showing signs of a slowdown. Governments are toughening austerity measures to lower the budget gaps. Investors are still weary from the Greek situation and worried it could default in paying its obligations. European manufacturing growth slowed this month. Oil prices are continuing to climb higher.

That’s a lot of tough news as the global economy struggles to hold on to any growth momentum that pulled us out of the global recession and the EUR/USD closed the day around 1.4390.

The week began with a continuation of fears related to the European Sovereign Debt Crises. Regional and municipal elections in Spain ousted the ruling socialists, creating fears of a potential clash over deficit issues within local as well as the central government.

To further compound EU fears, Standard & Poor’s cut Italy’s outlook from “Stable” to “Negative”. The USD rallied as investors once again sought the safety of the Greenback amid European instability pushed the dollar higher and Crude Oil lower.

Tuesday saw the EUR/USD regain much of its previously lost ground as better than expected news out of Germany trumped strong US housing data and apparently helped investors shrug off some of their anxiety from some of the EU’s more illiquid members. However volatility remains the name of the game in FX as the EUR/USD continued its dance of volatility throughout the remainder of the week as fears began to mount over Greece and Portugal despite Finland approving the Portuguese bailout. However in true tradition, the euro saw a comeback late Thursday as China expressed interest in buying EU bailout bonds from Portugal.

Weak GDP and unemployment claim numbers out of the US helped buoy the resurgent euro. Friday saw much of the same as disappointing Pending Home Sales out of the US certainly did not help the good ole` Greenbacks cause. Enjoy the long weekend!

There was a bearish atmosphere surrounding the euro at the beginning of the day today, but as the session continued a report was released that China is interested in buying EU bailout bonds from Portugal, which of course had a bullish impact on the currency. The euro rallied and hit 1.4207, however, as the day came to a close bearish sentiment on the EUR/USD overwhelmed the market and the pair closed the day at 1.4142.

Some important economic data was released out of the US today. The GDP q/q showed a decline for the quarter and unemployment claims numbers were released showing an increase in the number of weekly claims, both of which factored into the EUR/USD decline.

Volatility reigns in the FX market as the EUR/USD’s attempted recovery runs out of petro on fears of Greek debt getting out of control.

If it’s not one thing it’s the other for the euro. Even though Finland approves the Portuguese bailout alleviating some concerns there, worries about Greece outweighs the importance of that approval for traders and influences the direction of the currency. Once the EUR/USD failed to extend gains above 1.4117 it fell to 1.4060.

The euro hit a new low versus the Swissy today. In commodities – Oil was up almost $2 on the day at $101.50. Both Silver and Gold rallied today. Gold rose close to $9 and hit a fresh 3-week high at $1528.89, silver touched $37.40, a level not hit since May 11th.

Some better than expected news out of Germany helped the EUR come back to over $1.41 in a very choppy market in the overnight and US sessions today. Yet concerns regarding Greek finances and a debt crisis remain in the minds of traders. Strong commodities rallies across the board today hurt the dollar.

US data showed US home sales for April were stronger than the expected forecast of 300k to 323k to see a rise of 7.4% showing a recovery in a sector where it has been sluggish in the past couple of months. Goldman Sachs rose its forecast for commodities such as oil and in turn we saw crude touch the $100 a barrel mark but settled at $99.56 for the trading day. Gold as well rallied to hit $1,525.60. Equity markets where also choppy and finished lower. Dow Jones Industrial closed -25.05 and the S&P 500 closed at -1.09.

What to look out for tomorrow’s trade is to see if the U.S. durable goods are inline or surpass estimated and spark some bullish sentiment. Number to look out for is -3.0% where the consensus range is of -5.7 to +0.5%.

Over the weekend more European issues came out to light starting with Spain. What they call a “Wipe-out” of Spain’s ruling socialists in regional and municipal elections increased fear of a potential clash over deficit issues with central and local governments.

New concerns arose as well out of Italy where Standard & Poor’s cut its outlook on them from “Stable” to “Negative”. What they saw were several imbalances in certain public debt that may evolve into something bigger in the long term.

All this news effected the EUR throughout out the trading day as the dollar was firmer as risk aversion was the story today. The range for the EUR/USD was 1.4155 to 1.3964. Commodities such as Crude Oil closed lower, down $2.55 to close at $97.55 due to a stronger dollar. Equity markets in the US as well closed lower, with the Dow Jones and S&P 500 ending negatively at -130.78 and -15.90 respectively.

This week look out for US news, starting with tomorrow’s New Home Sales number, where we will hopefully see a rebound in newly constructed homes. On Wednesday we have the Durable Goods Orders report, and on Thursday, the Gross Domestic Product and Jobless Claims numbers and on Friday the Consumer Sentiment report. Should be a good week.

The week started off with a bit of shock and awe. IMF chief Dominique Strauss-Khan was arrested on charges of sexually assaulting a maid in a New York hotel. The scandal was preceded with a flurry of news coming out of Europe. EU finance ministers met to discuss the sovereign debt issues and when actions on countries such as Greece and Portugal may take place. Extreme volatility ensued as EUR/USD swapped momentum several times as various pieces of economic data trickled out throughout the week.

Wednesday saw the cracking of various support levels as GDP/USD broke the 1.6146 mark and GBP/JPY was testing 131. An uninspiring meeting of the FOMC where members spoke of “normalizing monetary policy” but hinted such moves may not take place anytime soon helped fuel the see-saw swings that appear to be the trend of the week.

Thursday saw a dip in the euro as Greece attracted scrutiny on whether it will be able to restructure payment and what impact additional bailout funds may have. Friday appeared to be a relatively modest trading day. Perhaps trader’s appetite for risk may have been stymied a bit as this Saturday’s biblical apocalypse approaches. Hopefully we have all been hedging ourselves accordingly…

Volatility has been the name of the game today and apparently the theme for this week in FX trading. Today started with a bang as the Sterling took a nose dive after BoE meeting and job data left traders disappointed. GBP/USD broke through 1.6146 support and GBP/JPY was testing 131. This was followed up by a rather unspectacular FOMC meeting in which members spoke of “normalizing monetary policy” but made clear that ” the move toward such normalization would not necessarily begin soon.”

The ever so popular and heavily traded EUR/USD was trading around the 1.4260 zone when the news hit the wire. The pair as I write this is at 1.4233, down about 30 pips since the announcement. Interesting side note on that pair is that banking giant Deutsche Bank had ones of its analyst say that EUR/USD has already set its high and low point for the year. (1.30-1.50)

In other news the USD/JPY has quietly continued its upswing and is now at 81.73 and will soon test resistance to see if it can climb above 82.

Today’s market action was influenced by economic data released from Europe earlier in the trading day followed by data from the US later on. In both cases extreme volatility was seen and experienced. If we look at the EUR/USD as an example, we see that the pair hit the highs for the day 3 times and the low of the day 3 times, this is a trading range of over 100 points.

Regardless of the economic data details released today, profitable trading would likely have required extremely good timing on your entries and exits, or sticking to your plan, and not getting shaken out of the market by volatility. Clearly, long term traders are not influenced by intraday volatility as much as short term traders, and today was probably a better day for the former rather than the latter.

More economic data is scheduled for release this week, including from the FOMC’s most recent meeting minutes, existing home sales and unemployment claims from the US, and claimant count change from the UK and a Bank of Japan press conference on Friday. All the economic data releases are expected to have an immediate temporary impact on market prices. Unless there is a significant change in the released data, the news effect will fade as the day goes on, leaving the prices in the hands of global supply and demand.