Month: February 2010

By Fast Brokers – The RBA in fact opted to keep its benchmark rate in check during today’s Asia trading session as the central bank monitors slight price declines and gauges the impact from China’s more hawkish monetary policy stance.  The RBA’s decision surprised markets and resulted in an immediate selloff since a majority of analysts were pricing in a 25 basis point hike.  Losses in the AUD/USD were sizable, yet the currency pair managed to bottom out just around Monday lows.  Therefore, the currency pair appears to have salvaged a more extensive collapse for the time being and is presently strengthening in light of better than expected U.S. Pending Home Sales data.  Strong U.S. housing data has led investors back to the risk trade so far while gold strengthens above its psychological $1100/oz level.  In fact, the precious metal has broken out of our 3rd tier downtrend line, a positive sign for the Aussie since the trend line runs through the $1140/oz level.  Attention will shift back to Australia during tomorrow’s Asia trading session with the release of Australia’s Trade Balance.  The Trade Balance data could have a considerable impact on the Aussie since analysts will likely dissect the numbers to get a better idea of how demand for the country’s exports is faring.  Should export data print strong this could provide some upward momentum for the AUD/USD since investors will assume that the RBA is taking a wait and see approach in regards to its monetary policy.  However, weak export demand could sound an alarm and yield a retreat in the currency pair.  Additionally, the U.S. will release Services PMI and ADP Employment Change data.  Hence, the AUD/USD could remain active for the next 24-48 hours as investors digest the wealth of data and news.

Technically speaking, the AUD/USD has our 1st and 2nd tier uptrend line serving as technical cushions along with intraday lows and the psychological .8800 area.  As for the topside, the AUD/USD faces multiple downtrend lines along with 2/1 and intraday highs.

Price: .8824

Resistances:   .8835, .8850, .8863, .8879, .8891

Supports: .8808, .8798, .8780, .8767, .8750, .8740

Psychological: .90, January highs and December lows

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Fast Brokers – The Cable is attempting to build up a base above January lows as the psychological 1.60 hangs just overhead.  The UK released a better than expected Construction PMI data point, tagging along with yesterday’s impressive Manufacturing PMI release.  Hence, UK data continues to outperform and this is likely helping stabilize the Cable.  Meanwhile, chatter has quieted down concerning Greece’s debt issues and the Standard and Poor’s bleak assessment of the UK’s financial sector is passing by as well.  The relative calm psychologically is easing downward pressure on the risk trade, a positive development for the Cable.  However, the EU still hasn’t decided how to deal with Greece and psychological forces could very well spark up again in the near future.  Therefore, investors should keep a wary eye on the news wires for the time being.  Meanwhile, investors are awaiting U.S. Pending Home Sales due shortly.  U.S. housing data usually has the ability to jolt the FX markets, particularly if the number deviates from analyst estimates.  The UK will release more economic data tomorrow, including Halifax HPI and Services PMI.  These releases precede ADP Non-Farm Employment Change and Services PMI data from the U.S. as well.  Therefore, volatility could pick up in the Cable tomorrow.  More optimistic UK data and an absence of negative psychological forces could help the Cable regain a bit of lost ground.  On the other hand, the FX markets are still in a fragile condition and should be monitored warily.

Technically speaking, the Cable has our 1st and 2nd tier uptrend lines serving as technical cushions along with intraday and 2/1 lows.  As for the topside, the Cable still faces multiple downtrend lines along with 2/1 and 1/29 highs.  Furthermore, the psychological 1.60 area could serve as a technical barrier should it be tested.

Present Price: 1.5947

Resistances: 1.5961, 1.5975, 1.5992, 1.6005, 1.6015, 1.6024

Supports: 1.5937, 1.5921, 1.5900, 1.5876, 1.5863

Psychological: 1.60,  December and October lows

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Fast Brokers – The EUR/USD is attempting to stabilize and we notice a similar pattern in the GBP/USD.  Australia’s RBA decision did yield volatility, though only in the AUD/USD while the EUR/USD emerged unscathed.  Chatter concerning Greece has subsided as the EU decides how to deal with the situation.  In this case no news is good news, and the EUR/USD is benefitting from the silence thus far.  German Retail Sales printed about in line with analyst expectations, yielding little response as we anticipated.  However, the U.S. will release Pending Home Sales soon and this data point could move the Dollar should it deviate from analyst estimates.  It’s uncertain at this point in time how another positive U.S. data point would impact the Dollar since the Greenback weakened yesterday and it soared on Friday with positive data releases during both sessions.  Therefore, investors should keep a wary eye on the EUR/USD as today’s data hits the wires.  The EU will release its headline Retail Sales figure tomorrow and considering today’s result it would be surprising for the number to print about in line with expectations.  Meanwhile, attention will remain on the U.S. with ADP Non-Farm Employment Change and Services PMI data on deck for tomorrow.  Additionally, the UK will release its Halifax HPI and Services PMI as well.  Hence, activity in the Dollar could heat up and the EUR/USD could opt to follow broad-based movements in the FX markets barring any EU announcements concerning Greece.

Technically speaking, the EUR/USD faces topside technical barriers in the form of multiple downtrend lines along with 1/29 and 1/28 highs.  Furthermore, the psychological 1.40 level could serve as a technical barrier should it be tested.  As for the downside, the EUR/USD has our 1st tier uptrend line serving as technical cushions along with previous January lows.  The EUR/USD has more uptrend lines waiting in the distance, although they are sitting off screen at the moment.  Our 1st and 2nd tier uptrend lines could carry some weight since they run through April 2009 lows.  That being said, a failure of our 1st tier could send a fairly negative signal considering April 2009 lows are around the 1.30.

Present Price: 1.3947

Resistances: 1.3962, 1.3993, 1.40026, 1.4056, 1.4105, 1.4135

Supports:  1.3930, 1.3903, 1.3878, 1.3857, 1.3833, 1.3806, 1.3782

Psychological: 1.40, January lows

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By CountingPips.com

The Reserve Bank of Australia (RBA) unexpectedly decided to hold its interest rate steady at the 3.75 percent level today according to the government announcement. The RBA had increased the interest rate level by 25 basis points for three consecutive meetings before today’s announcement. The decision to maintain the current rate caught the markets off-guard as it was widely expected the RBA would raise the cash rate to 4.00 percent. The Australian dollar felt the effects and declined immediately in forex trading following the announcement.

Australia became the first G20 economy to increase its interest rate since the financial crisis when the RBA hiked the rate in October 2009. October’s rate increase was the first Australian rate change since April 2009 when the RBA decreased the rate by 25 basis points to a 49-year low at the 3.00 percent level.

Australia’s economy handled the economic crisis better than most others as a technical recession was avoided with the help of government stimulus as well as strong demand for Australian goods from China.

Australia’s Glenn Stevens, Governor of Monetary Policy, said in his policy statement today that, “The global economy is growing, and world GDP is expected to rise at close to trend pace in 2010 and 2011.  The expansion is still likely to be modest in the major countries, due to the continuing legacy of the financial crisis, resulting in ongoing excess capacity.  In Asia, where financial sectors are not impaired, recovery has been much quicker to date, though the Chinese authorities are now seeking to reduce the degree of stimulus to their economy.  Global financial markets are functioning much better than they were a year ago.”

On the Australian economy, Stevens commented, “In Australia, economic conditions have been stronger than expected, after a mild downturn a year ago.  The effects of the fiscal stimulus on consumer demand have now faded, but household finances are being supported by strong labour market outcomes and a recovery in net worth.”

Stevens also said that inflation has continued to be moderate and that unemployment has most likely peaked at a level that is lower than previously expected.

The reason for the interest rate hold after three straight rate increases was because “information about the early impact of those changes is still limited”. The statement said that the policy will likely be adjusted if the economic conditions continue to improve.

The Australian dollar fell sharply after the interest rate announcement as the Aussie has declined against the U.S. dollar, euro, British pound, Japanese yen, New Zealand dollar and the Canadian dollar. The Aussie fell by over 100 pips against the U.S. dollar and Japanese yen early this morning before paring some of those losses and edging back higher.  The euro is still trading higher against the Aussie by over 150 pips as the EUR/AUD reached its highest trading level in about a month at 1.5864 earlier today.

AUD/USD Hourly Chart – The Australian dollar falling sharply versus the US dollar in forex trading today after the RBA held its interest rate at 3.75%. The AUD/USD traded below the 0.8800 exchange rate today before turning around. The AUD/USD has been down trending since reaching a 0.9330 highpoint on January 14th.

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By Rita Ruvinski – The EUR jumped to session highs against the Swiss franc on Friday, and since then the pair continue to experience much bullishness, trading now around 1.4730. The bullish momentum continues with full steam, with 1.475 & 1.4765 as next price targets. Forex traders have the opportunity to join a very popular trend.

• Below is the 30min. chart of the EUR/CHF currency pair

• The technical indicators that are used are the Bollinger Bands and Relative Strength Index (RSI).

• Point 1: The pair has been trading in the upper half of the chart’s Bollinger Bands, indicating that the current trend will continue.

• Point 2: The Relative Strength Index (RSI) is supported by a rising trend line and calls for further advance.

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Source: ForexYard

The U.S. Pending Home Sales is the primary publication today that is set to determine the level of the USD when it is released at 15:00 GMT. The other main releases that are set to dominate forex trading, especially for currencies such as the Dollar and EUR is the publication of the German Retail Sales and PPI from the Euro-Zone at 7:00GMT and 10:00 GMT respectively. Traders may find good opportunities to enter the market following these vital announcements.

Economic News

USD – Dollar trades Higher vs. Yen on Positive Economic Data

The dollar extended gains against the Yen and pared losses against the EUR on Monday after data showed business activity in the U.S. manufacturing sector came in stronger than expected in January. The Dollar has been sold off recently partially due to growing optimism about the outlook for the U.S. economy. By yesterday’s close, the USD fell slightly against the EUR, pushing the oft-traded currency pair to 1.3930. The USD did see bullishness as well, as it gained over 50 points against the JPY and closed at 90.70.

The U.S. manufacturing sector showed the best growth in more than five years in January. The Institute for Supply Management said its manufacturing index, climbed to 58.4% in January, up from December 54.9% level. It was the sixth consecutive monthly rise in PMI and the highest reading since August 2004, eclipsing analyst expectations. The strength in U.S. manufacturing is being accompanied by factory expansion from China to Europe.

Another report today showed personal spending rose 0.2% in December, the third straight gain, showing job growth is needed to help drive consumer spending in coming months.

Looking ahead to today, the most important economic indicator scheduled to be released from the U.S. is the Pending Home Sales at 15:00 GMT. Traders will be paying close attention to today’s announcement, stronger than expected result may boost the USD in the short-term. Traders should pay close attention to the market as there is an opportunity for traders to capitalize on the fluctuations which are likely to follow this release.

EUR – EUR Rises on All Fronts

The EUR firmed, snapping four straight days of declines and rising in line with stocks as risk appetite increased amid the upbeat sentiment on growth. Over the past year, the EUR has become a proxy for risk appetite among developed-nation currencies.

In Europe, the euro zone manufacturing sector grew at its fastest pace in two years last month. However, the outlook on the EUR remains negative. Greece’s fiscal woes remain in the forefront of investors’ concerns, and the big question in the near term is whether euro zone monetary authorities will bail out the troubled country.

The EUR appreciated around 120 pips versus the JPY to close at 126.40 in yesterday’s trading. The 16 nation currency experienced similar behavior against the USD as the pair rose from 1.3870 to 1.3925 by days end. Against the CHF, the pair closed at virtually an unchanged level of 1.4715. Overall, the EUR, which for the last few months have been sold by most traders, is seeing these sell-positions unwind and is now making a small recovery. The question now is can EUR bullishness continues versus the Dollar?

JPY – Yen Trading Down against Currency Rivals

The yen weakened against all of its major counterparts as optimism about the global economic recovery is gaining momentum spurred demand for stocks and other higher- yielding assets. The JPY fell against the USD and closed at 90.80. Moreover, the Japanese Yen lost almost 120 points versus the EUR, closing at 126.40.

The Japanese currency fell for a second day versus the EUR before forecast reports about retail sales in Germany, Europe’s largest economy, rose. The U.S. home sales forecast report also showed improvement. The yen usually does well during times of economic downturn, but when investor confidence is restored, the market may see a sell attitude develop as traders return to their carry trades; selling JPY in exchange for higher yielding currencies.

Crude Oil – Crude Prices Up on Improved Economic Outlook

Crude oil climbed more than 2% to above $75 per barrel Monday on upbeat economic data from the U.S. and positive corporate earnings, which lifted equity markets and boosted investor confidence.

Expectations that consumers might increase demand for goods have partly fueled the rally. There is a reasonable possibility that Oil prices will continue to be bullish going into next week, providing that the economic situation of the leading economies
continues to rapidly improve.

Technical News

EUR/USD

The daily chart is showing considerable bullish signals as the Relative Strength Index currently has the price trading in the oversold zone and the Slow Stochastic Oscillator shows a bullish cross has formed. The pair has also begun to reverse from the Bollinger Band’s lower border with the potential to reach the upper border. This could be a good opportunity for traders to go long today on this pair.

GBP/USD

Early this morning the pair dropped to a low of 1.5921 and could be ready for a reversal. The daily and 4-hour chart show the pair trading in the over sold zone on the RSI. The 30min chart also displays a bullish cross on the Slow Stochastic Oscillator. Going long with a tight stop may be the right move.

USD/JPY

A correction on the 4H chart could be fore coming as a price move has reached the upper border of the Bollinger Bands. This may signal a move from the upper border all the way to the lower border. Going short with a tight stop may be a wise choice today.

USD/CHF

The pair’s sustained upward movement has finally pushed its price into the over-bought territory on the 4-hour and daily chart’s RSI. Not only that, but there is a bearish cross which has formed on the daily Slow Stochastic Oscillator. This information points to a possible downward correction today.

The Wild Card

EUR/CHF

It appears a bullish cross has recently formed on the hourly chart’s Slow Stochastic, indicating that this pair’s recent upward correction may still have some steam. Now would be a great time for forex traders to join this recent run and capture the remaining profits before the downward trend continues.

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

The Reserve Bank of Australia surprisingly left its cash rate benchmark unchanged at 3.75% at its monthly monetary policy meeting. The decision took markets by surprise as a broad consensus among investors’ expectations pointed to a 0.25% rate hike for the fourth time in a row to 4.00%. The RBA was the first central bank in the G20 to raise rates since the recession, tightening three consecutive times since October last year. According to its recent statement, the information about the impact of those rate hikes is still limited and therefore it is “appropriate to hold a steady setting of monetary policy for the time being”.

Market participants largely expected cash rate to rise based on positive jobs-market data, stronger-than-expected inflation for the last quarter and strong demand for Australia’s commodities from China and India. Unemployment appears to have reached its peak at 5.8% in October, a much lower level than previous estimations of 8.5%. The Consumer Price Index rose 0.5% in the fourth quarter of 2009 and the underlying inflation rose from 1.3% to 2.1% annualized, entering the target band of the RBA of 2 to 3 percent. According to the central bank, inflation is expected to be consistent with the target in 2010.

Investors still believe that Australia’s economic conditions support further rate hikes and will follow the domestic data this month to try to assess the outcome of the next monthly meeting.

The Aussie dollar plummeted across the board as the news hit the markets. AUD/USD took a nose dive from above 0.89, falling below the 0.88 level.

Daily Forex Market Analysis provided by eToro

Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.

© 2009 eToro Blog.

By David Adams – There is a common misconception that some people are born to trade. In my experience, after knowing hundreds of traders, I have never met a trader who could naturally trade without any training. I will readily admit that some traders are quicker than others to learn the basic principles of trading, and I would also go so far as to say that some traders have a difficult time learning even the rudimentary principles of traders. After all, we are all gifted with different skill sets, and we are not all set up to be futures traders.

This contrasts sharply with some other fields of endeavor. For example, I have a friend who is a natural born golfer. For as long as I have known him he could hit a golf ball out of sight. He can shoot even par no matter what the weather conditions. He can even shoot par when he is intoxicated, which in itself is a miracle. For whatever reason, this relationship does not hold true in the trading venue. Perhaps it is because of the natural illogic of trading systems, or perhaps trading does not necessarily lend itself to natural ability. I don’t have the answer to this question.

I am an eternal optimist, and have found that most individuals who are willing to put a certain amount of book work, a lot of practice, and dogged determination can learn to trade very effectively. I must add one caveat, however: I have met several people, a very small percentage, who simply were unsuited to trade, and it became apparent very early in their training that trading just didn’t suit them. Again, this is a very small percentage.

It is my opinion that great traders are training, seasoned and combine years of experience before they become truly great traders. Unfortunately, trading on Wall Street is a very stressful field of endeavor and most traders exit the trading game before they realize their potential. Most major investment bank trading rooms are filled with young traders, with a a seasoned veteran overseeing operations of the trading operation. I am 52 years old, and my limit for trading is about four hours. My mind tires and my concentration wanes, but the trades I make are generally well thought out and years of experience keep me out of the bad trades and help me to recognize the good trades.

And that is the rub. As a new trader you are going to make some bad trades, it’s inevitable and it is okay, if you learn from your mistakes. On a given day, there are many set-ups that look enticing, but there be one factor that precludes that trade from being successful. Your ability to discern that single negative factor is what will make you a good trader.

I want to make one very important point, though. You don’t have to be a great trader to make money in the market. If you have learned a good system, have the proper self-discipline, and can execute your system with a high degree of accuracy…you can be very profitable in your trading endeavor. You don’t have to be great, just good. On the other hand, if you stick with trading for a long while you have the potential to be great. The downside to this situation is humorous, though. You will be the only one who knows you are great. Unless you are trading for a large investment bank, you will have to be content with knowing you are a great trader and leave it at that. But who really cares? As long as your futures trading account reflects the excellent results you are enjoying, isn’t that enough?

In summary, learn your system inside and out. In my trading, I also learn a number of alternative systems inside out. Work on the self-discipline required to make your trading effective. Avoid entering trades based on emotion. Further, always work to improve your trading, keep a journal of your trades, and review the trades that did not work out so you don’t repeat them. And most importantly, be persistent and dogged in your approach to trading, strive for perfection, even though perfection is nearly impossible. We all have the potential to be great traders, but most don’t reach deep enough to realize their potential. Be one of the few that reaches his potential.

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USDCAD’s bounce from 1.0556 extended to as high as 1.0720 only. The subsequent pullback suggests lengthier consolidation of uptrend from 1.0224 is underway. More sideways movements are expected in a couple of days. As long as 1.0556 support holds, we’d expected uptrend to resume and one more rise towards 1.0800 is still possible. However, a breakdown below 1.0556 key support will indicate that the rise from 1.0224 has completed at 1.0720 level already, then the following downtrend could take price to 1.0450 area.

Daily Forex Signals