Month: May 2011

By Russell Glaser

A media frenzy followed the report of the death of Osama bin Laden and traders supported the dollar in overnight trading. Silver prices slid 10% before the commodity recovered after futures margins were increased. UK and many European markets are closed today for banking holidays which will leave the FX markets with low levels of liquidity and exaggerate some of the price moves that accompany illiquid trading conditions.

Spot silver sold off sharply following new margin requirements for futures contracts by the CME Group. The price declined to $42.50 and comes close to the short term trend line off of the January low which comes in this week at $41.20. Silver traders may be able to buy the commodity on a rebound as the fundamentals supporting silver prices (rising demand for the commodity and global inflationary pressures) have not changed. Further support is found at the $38 level.

Today’s Market Events:

EUR – Final Manufacturing PMI – 08:00 GMT
Expectations: 57.7. Previous: 57.7.
An uptick in manufacturing data will support the euro as any increase in euro zone economic activity will add more influence for EU inflation hawks. EUR/USD support come in today at 1.4755 followed by 1.4650. Resistance is found at 1.4880 and the 2009 high of 1.5140.

GBP – BOE Gov King Speaks – 13:00 GMT
Governor Mervyn King is set to speak in Brussels today. Should he provide any hint of future British monetary policy the pound should react accordingly. The EUR/GBP is encroaching on the current rising trend line off of the February 18th low which comes in today at 0.8830. A breach of this level and the pair could fall to the support at 0.8715.

USD – ISM Manufacturing PMI – 14:00 GMT
Expectations: 59.9. Previous: 61.2.
Recent positive US data releases have fed into USD selling. However, with the announcement of the death of Osama bin Laden, US traders may be compelled to buy dollars given the patriotic sentiment that often follows such news events.

Forex Market Analysis provided by ForexYard.

© 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

With Europe and Great Britain on holiday Monday, currency traders have witnessed a relatively thin trading environment. Though debt concerns loom in the euro zone, and industrial production falters globally, the higher yielding assets like the GBP and EUR appear positioned to gain despite poor fundamentals. This trend appears to have little opposition as dollar traders shift substantial value into other assets.

Economic News

USD – USD Traders Weighing Momentum at Start of NFP Week

The US dollar has continued to plummet since Friday as dollar bears continued to move out of the greenback in exchange for higher yielding currencies. The Fed’s record low interest rates will persist for the foreseeable future, according to the FOMC report and subsequent statement last week, and the dollar is expected to see little support this week as a result.

The EUR/USD rose to a three-year high, reaching towards 1.4900 in Friday’s session. The AUD/USD witnessed a similar bull run, climbing to a 29-year high of 1.0920. The USD/JPY joined the chorus, despite weak fundamentals in Japan, and fell to 81.52 from 82.17 yesterday.

Today, with most of Europe on holiday for Labor Day, the US economy will be one of the few major global economies releasing data sets on Monday. The most impactful figure being published will be the Institute for Supply Management’s (ISM) Manufacturing PMI, a leading indicator of manufacturing production.

As industry appears to be faltering these past few weeks, this number may get released somewhat below expectations, driving more investors away from the USD. With Non-Farm Payrolls (NFP) this Friday, the week should be exciting for forex traders.

EUR – Euro Begins Week Mildly Bullish Despite Thin Labor Day Trading

The euro has been a top performer against the US dollar following last week’s announcement by the US Federal Open Market Committee (FOMC) that US interest rates would remain at their record lows. The EUR began the middle of last week strongly bullish and has since tapered off mildly, but still maintains its momentum; albeit weakly.

With Europe and Great Britain on holiday Monday, currency traders have witnessed a relatively thin trading environment. Though debt concerns loom in the euro zone, and industrial production falters globally, the higher yielding assets like the GBP and EUR appear positioned to gain despite poor fundamentals. This trend appears to have little opposition as dollar traders shift substantial value into other assets.

As for Monday, the euro looks to be gaining against the greenback as traders are largely absent from the region to shift investments, but global traders are still bullish on Europe as the USD remains in freefall. Switzerland will publish its retail sales data today, along with the euro zone’s final manufacturing PMI. These factors, however, will likely be outweighed by the shift in sentiment towards the buck after last week’s FOMC statement. Look for long positions on the EUR to continue through this week.

JPY – Japan Celebrates Golden Week, Thin Trading Expected

The USD/JPY has been trading lower recently as investors flee the greenback on the coattails of the Fed’s monetary policy statements. After reaching upwards of 82.75 on Tuesday, the pair quickly dropped to a daily low of 81.61 Wednesday, and dipped farther in Thursday’s sessions after the Bank of Japan (BOJ) decided to hold rates steady and maintain present levels in its Asset Purchasing Program.

While the yen suffers from its own economic concerns, shifts in consumer sentiment have helped lift yen values against a number of its rivals. The pair also looks to be continuing this movement for the foreseeable future given the massive shift away from the US dollar. With Japan celebrating Golden Week since last Friday, liquidity throughout the region will be somewhat depressed. The JPY could gain from this absence as the rest of global traders shift towards Europe.

Oil – Oil Prices Supported by Declining USD

Oil prices ended Friday slightly higher on the day as traders largely moved away from the US dollar, lifting commodity values. As investors bailed out of their long positions with the USD, oil prices found support, pushing the commodity back towards $113 a barrel with an opening price of $112.86 today.

As for today, crude oil traders may want to consider that commodities, which are linked to the value of the US dollar, are likely going to continue receiving a boost in the immediate future due to recent monetary policy statements out of the US. Hawkish statements about economic growth may suffice to hold prices stable between $112 and $115, but many speculators are beginning to anticipate another bull run in commodity prices.

Technical News

EUR/USD

The pair has come off from last week’s high at 1.4880 to form a bullish flag pattern. A breach above the consolidation pattern would target 1.5070, just below the 2009 high of 1.5140. Support comes in today at 1.4755 followed by 1.4650 and a retracement target on the hourly chart at 1.4430.

GBP/USD

After completing a textbook retracement lower to the previous trend line off of the 2007 high, the pair reached a 17-month high and looks to continue to rise. Both monthly and weekly stochastics are rising, indicating further potential gains in the pair. Initial resistance comes in at last week’s high of 1.6745, followed by 1.6880, with a target at the 2009 high at 1.7040. Support comes in at 1.6625, followed by 1.6600 and 1.6430.

USD/JPY

The sharp downtrend continues for the USD/JPY as the pair touched a low this morning at 81.00. This is encroaching on the 80 yen line in the sand, potentially drawing the ire of the Ministry of Finance and a possible new round of intervention in the FX markets. Support is located at the post-intervention low at 80.70, followed by the pre-intervention low at 76.40. Resistance is found at 82.80.

USD/CHF

The pair closed the month near a new all-time low and the Swiss franc has been one of the strongest performing currencies this past month. A 14-year trend line comes in at 0.8510 and may prove to be supportive. A breach below this level would take out a significant number of stops. A bounce higher at this level could take the pair higher near 0.8900.

The Wild Card

Silver

Silver prices collapsed this morning as traders took profits after the commodity reached a new high near $50. The price decline to $42.50 comes close to the short term trend line off of the January low which comes in this week at $41.20. Forex traders may be able to buy the commodity on a rebound. Support is found at the $38 level.

Forex Market Analysis provided by ForexYard.

© 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.

By Cedric Welsch

People who are just getting started in trading Forex should make use of the many websites that offer Forex trading advice. As the currency trade is a very risky investment it would be unwise to get involved in this market without some prior knowledge. Thankfully there are a few ways that beginner traders can minimize the risks they encounter when they start to trade currency.

Like everything else in life, trading requires practice and hard work. Many people believe that they can get rich from Forex in a short amount of time. This is not the case. Beginner traders will need to practice in order to learn the systems and rules of Forex. There are a number of websites that allow traders to practice for free. All a beginner needs to do is search the term “Forex demo account” and they will be supplied with a list of websites that provide this service. These demo accounts will allow beginners to practice using fake money. These accounts let the trader to practice using real market conditions without losing any money. Once a trader feels that they are doing well enough on the demo account to start trading for real, they can sign up with a broker.

As traders learn the demo system they will start to understand the processes behind Forex trading. Many traders will begin to develop their own trading systems while others will look for popular trading systems online. People who trade Forex need to be completely comfortable with their system before they start trading real money. As every system will lose money from time to time, traders need to be comfortable with losing money every now and then.

Lastly it is important that potential traders take their time. Amateur traders have been known to complete a few trades on a demo system and then go on to using real money. This is a method that will lose the trader money in the long run. The experienced trader will have completed hundreds of trades in the demo system before their start to put their own hard earned dollars on the line. It is important that a trader takes the time to test their system thoroughly before giving up the demo software. Every system will have its flaws and it is important that the trader knows what to do when he or she is losing money on the Forex market.

About the Author

Never ever resist claiming the value currency trading news can offer you as a trader. Do even grab the knowledge you could accumulate out of forex reviews.

By James McKee

The US has been moving its production to countries such as China and Mexico for over 50 years now, and this gradual shift of factories and other facilities to foreign countries have taken away US jobs. Much like the city of Detroit when American car makers began to cut back production the entire country of the Us is finding itself without enough jobs to go around. This lack of employment has resulted in massive troubles for the US economy, the US needs to end its dependence on cheap labor and begin to pay more for domestic products. The United States has become accustomed to cheap and “affordable” products; but, cheap domestic goods are impossible to have without outsourcing the labor to other countries.

China’s economy has grown a great deal through the production and sale of goods for the US. China’s relationship with the US by way of this symbiotic financial agreement means that China is anything but supportive of domestic US production. This has become a losing agreement for the United States who has continued to suffer a loss of jobs in exchange for cheaper goods. China and the United States need to find a more mutually beneficial agreement that involves keeping some of the production in the United States; however, producing goods in the United States would mean that the goods being sold would be more expensive. The US must cut its addiction to cheap goods and be willing to spend more money on their products.

The USD will not be in good shape until the United States picks up its export rates, and this means that jobs and production will need to return to the US in droves. Luckily a battered US economy could result in American workers being willing to do production level jobs again. The USD would surely see a rise on the online forex exchange if the United States economy increases its export rates. The dollar and the Euro are both hopelessly

intertwined with goods that are too cheap, and this is a problem because there seems to be no end in sight for this agreement. The average US citizen is addicted to cheap goods and does not want to pay for products manufactured in the US. Without legislation or tax incentives that will encourage US businesses to keep their production in the US things will stay the same. This is a troubling time for the entire world, and we all need to pull together.

About the Author

Author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to check out the online forex trading regularly.

A media frenzy followed the report of the death of Osama bin Laden and traders supported the dollar in overnight trading. Silver prices slid 10% before the commodity recovered after futures margins were increased. UK and many European markets are closed today for banking holidays which will leave the FX markets with low levels of liquidity and exaggerate some of the price moves that accompany illiquid trading conditions.

Spot silver sold off sharply following new margin requirements for futures contracts by the CME Group. The price declined to $42.50 and comes close to the short term trend line off of the January low which comes in this week at $41.20. Silver traders may be able to buy the commodity on a rebound as the fundamentals supporting silver prices (rising demand for the commodity and global inflationary pressures) have not changed. Further support is found at the $38 level.

Today’s Market Events:

EUR – Final Manufacturing PMI – 08:00 GMT
Expectations: 57.7. Previous: 57.7.
An uptick in manufacturing data will support the euro as any increase in euro zone economic activity will add more influence for EU inflation hawks. EUR/USD support come in today at 1.4755 followed by 1.4650. Resistance is found at 1.4880 and the 2009 high of 1.5140.

GBP – BOE Gov King Speaks – 13:00 GMT
Governor Mervyn King is set to speak in Brussels today. Should he provide any hint of future British monetary policy the pound should react accordingly. The EUR/GBP is encroaching on the current rising trend line off of the February 18th low which comes in today at 0.8830. A breach of this level and the pair could fall to the support at 0.8715.

USD – ISM Manufacturing PMI – 14:00 GMT
Expectations: 59.9. Previous: 61.2.
Recent positive US data releases have fed into USD selling. However, with the announcement of the death of Osama bin Laden, US traders may be compelled to buy dollars given the patriotic sentiment that often follows such news events.

By Cedric Welsch

The world’s currency system is a large and rather complex machine. Simply stated it is the system that stipulates the amount of money each currency is worth against another. For example how many US Dollars you can receive for 100 British Pounds. The rates for the various currencies are changing constantly every single day of the year. Although, the fluctuations are relatively small on a daily basis over the course of a month or a year the movements can be quite large. Millions of people and large banking organizations around the world speculate on this system, they will attempt to predict which direction a particular countries tender is going to go at a given time and this is what causes the fluctuations in the rates. To put things into perspective the amount of money that exchanges hands on a daily basis on the money markets is around 3 Trillion Dollars.

As a private individual the only way that the currency exchange will affect you is when you take a vacation to a foreign country and you will need to change some of your own money into the legal tender of the country that you are visiting. Obviously, you will want to attain the very best rate that you can, especially if you are heading away for a long period of time and you are therefore changing a relatively large sum. There are a few different ways that you can approach your currency exchange.

You should never change your money at the airport before you travel; this is a mistake that many people make. Although, it does seem like the easiest and quickest way to attain your foreign currency the rates are always the worst at the airport.

Your local banks will generally offer an extremely competitive rate of exchange for most currencies. However, if you are looking for a large sum of money you need to make sure that you pre-order the sum as they may not have sufficient funds to make the exchange. The only problem with this approach is that you will have to carry all the money with you while you travel which can be dangerous.

The safest and best way to handle currency exchange is to use your debit or credit card while you are abroad. You will either be able to use the ATM or a currency exchange when using your passport as identification. This means that you can always get the most up to date rate of exchange and never have to carry around too much money at any one time.

About the Author

If forex trading is your kind of game, you gotta make the most out of it.
Cause in the real fx trading world, only the vigilant, persistent and diligent survives.

By Taro Hideyoshi

The stocks’ price simply moves in three directions; up, down and sideways. For the stocks that move in sideways, the movement of price is not trending and can be divided into three basic categories: trading in a range, congestion and consolidation.

Trading in a range

A stock that is “trading in a range” means a stock that its price is bouncing up and down between a support level and a resistance level.

When a stock is traded in a range, buyers support it at the bottom of the range (support). When it rallies to the top of its range (resistance), buyers refuse to pay higher price, and some take their profits. So, the price falls again.

Congestion

In technical analysis, a stock which is in congestion area is a stock that its price fluctuates within a narrow price range. The price gets stuck moving laterally.

The congestion patterns form resistance if it falls under a ragged congestion pattern. It is because traders who bought at the high price will take their money out when price bounce near enough to what they paid. Conversely, the congestion forms support if the prices rise above the congestion area.

Because a congestion area indicates an equality of supply and demand, traders are usually told to avoid trading stocks moving in congestion area. It is better to wait until the stock breaks through the upper or lower bound before enters a trade.

Consolidation

The consolidation pattern, unlike the congestion pattern, is a traders’ best friend. It offers opportunities to traders who trade properly.

A stock in a consolidation pattern moves sideways in a very tight price range. The consolidation patterns are usually formed while stocks are building their base or resting during uptrend or downtrend. You will find that consolidations often follow uptrends or downtrends.

The resistance and support levels within the consolidation area are created through the upper and lower bounds of the stock’s price.

Finally at some points, once the price of the stock breaks through the identified areas of support or resistance, volatility quickly increases, a jolt of rising volume and so does the explosion of the stock’s price offer opportunities to generate a profit. If traders are playing in the right side, they can profit mightily when the price explodes.

The longer a stock traded in consolidation area, the more explosive the stock moves upside or downside when it breaks resistance or support level.

About the Author

Taro is an experience trader who trades in stocks, futures, forex. He strongly focuses on technical analysis, trading systems and money management.

If you would like to find more articles on MetaStock Tutorials, MetaStock Formulas, Trading Systems and Money Management. Please go to MetaStock Trading System.

By David Adams

Every day trader goes through several phases early in his or her trading career. Some of the phases are quite pleasant, and others are downright painful. It is import to be cognizant of your emotional mindset during each phase of your trading career. Of course, brand-new traders have usually learned a new trading system or taken a trading course and are anxious to implement what they have learned. Often times the reality of losing trades is a shock to new traders. A string of losing trades creates trepidation and fear in the new trader. Sometimes this process takes a few weeks, sometimes it takes a few months; but at some point most traders go through a phase where they are fearful of placing a trade. They have lost their self-confidence.

There are several telltale signs that I often notice in traders who are fearful, some of those traits include:

• A trader will identify a nice set up and failed to take the trade, finding arcane excuses for failing to initiate the trade.
• A trader who is trading out of fear will be positive three or four ticks and exit the trade prematurely, failing to let the trade run its course.
• A trader who is trading out of fear will often set ridiculously tight stops in an effort to stem the losses he or she is experiencing, excessively tight stops (especially if the stops are less than the Average True Range) will generally compound losses.
• A trader who is trading out of fear will often blame the market for his losses, not understanding the maximum “the market is always right, and you are always wrong.”

On a positive note, I have found that most traders who fall into fear-based trading usually move through this phase after a period of time. Gradually they regain their confidence in both the system they trade in their ability to execute the system. On the other hand, fear-based trading can be the stopping point in some trader’s career. Generally speaking, I notice some fear-based traders will return to in their simulated trading and continue on the simulator until they gradually lose interest in trading. For this group of people, fear is the end of the road in their trading careers.

It is a challenging task to emerge from the fear-based phase of trading, as traders have to learn to trust their instincts and the system they trade. When a trader falls into this malaise, it is often helpful for he or she to seek out a mentor or experienced trader to help them understand their fears and provide support for trading correctly. Of course, there are those traders who have the ability to regain their confidence on their own, but my experience tells me that a third-party mentor is an effective remedy for fear-based trading.

As an aside, the next phase after fear-based training is the eternal search for the magic system that will allow the fearful trader to become profitable. These individuals search for years for a system that can reverse their unprofitable trading. Of course, such individuals might as well be searching for the Holy Grail. The search for the Holy Grail is a terminal condition. Finding a good trading system, learning that system thoroughly, and executing that system with precision is the answer to becoming a profitable professional trader.

In summary, we have outlined a few variables that exist in traders who have evolved into fear-based trading. We have suggested several remedies, including finding a reputable and knowledgeable mentor to help a trader overcome his or her fears as it relates to trading. Finally, we have mentioned a third phase of trading, which is searching for the Holy Grail and described this quest as a termination point in a trader’s career.

About the Author

Real Live Trading Doesn’t Lie. Spend several days in my trading room and see if you can benefit from a fresh and unique view on trading e-mini contracts. Sign up for your free trading experience by clicking here

By Cedric Welsch

Opening a forex trading account is an easy task thanks to the Internet. If you like to trade currencies to make a profit out of it, you do not need to go to an actual trading center. People can open accounts right in front of the computer. However, before doing so, you have to make sure that the FX trading website where you are planning to open an account is legit and has lots of positive feedback from users.

Choose Forex Trading Sites Wisely

Opening accounts is simple, but doing so on a scam website has drastic consequences. If you want to trade currencies, always make sure that you do so at a website that is proven to be legit. Do some research on Google and find out if there are any complaints about the site. Second, check if the site provides free and quality resources like training videos, comprehensive forex educational materials, and other pertinent information necessary helpful for the forex trader.

Two Types of Accounts

There are basically two types of accounts, the demo or trial version, and the live version. The trial account is free and does not pose any risk. However, it is wise to check if it has a trial period or not. Some offer demo accounts that can be used without any limits. Others offer a definite 30-day trial period or the like. Using this version lets you trade in real time without having to risk any cash. This is best used by beginners who are still getting to know about forex and how it works. Get to know the different parts of the forex platform interface, know what the words or symbols in the platform mean, and understand what the numbers, charts and figures stand for.

Open a live account if you already have sufficient practice with the demo account. As soon as you get the hang of using the trading platform, you can now invest and start trading. This is where the real trading begins. You can buy or sell currencies that you deem profitable and reap rewards if you win. Understand that trades do not always result in a win. Make sure to practice hard and learn good strategies as you move along. In case your strategies do not work, find out what others are using by checking out the forums. If you feel you need more practice, you can always shift to using a demo forex trading account.

About the Author

Never ever resist claiming the value currency trading news can offer you as a trader. Do even grab the knowledge you could accumulate out of forex reviews.

By CountingPips.com

The latest Commitments of Traders (COT) report, released on Friday by the Commodity Futures Trading Commission (CFTC), showed that large futures speculators increased their short positions of the US dollar against the other major currencies while continuing to raise bets against the Japanese yen. Non-commercial futures positions, those taken by hedge funds and large speculators, were overall net short the US dollar by $27.75 billion against other major currencies as of April 26th. The data is a rise from the total short position of $24.36 billion on April 19th, according to the CFTC data and calculations by Reuters which calculates the dollar positions against the euro, British pound, Japanese yen, Australian dollar, Canadian dollar and the Swiss franc.

This week’s notable changes were euro positions increasing to the highest level since December 2007 while yen positions rebounded slightly after two straight weeks of being short by over 50,000 contracts.

EuroFx: Currency speculators increased their net long positions for the euro against the U.S. dollar after a slight dip last week to their highest level since December 2007. Futures positions in the euro rose to a net total of 68,279 long positions as of April 26th following a total of 62,195 long positions on April 19th.

The COT report is published every Friday by the Commodity Futures Trading Commission (CFTC) and shows futures positions as of the previous Tuesday. It can be a useful tool for traders to gauge investor sentiment and to look for potential changes in the direction of a currency or commodity. Each currency contract is a quote for that currency directly against the U.S. dollar, where as a net short amount of contracts means that more speculators are betting that currency to fall against the dollar and net long position expect that currency to rise versus the dollar. The graphs overlay the forex spot closing price of each Tuesday when COT trader positions are reported for each corresponding spot currency pair.

GBP: British pound sterling positoins increased for a second straight week as of April 26th to a total of 33,583 net long positions after rising the week before to a total of 30,175 long contracts on April 19th.

JPY: The Japanese yen net contracts improved to a total of 36,997 net short contracts reported on April 26th. This is from 52,983 short contracts on April 19th which marked the lowest level in yen positions in almost a year.

CHF: Swiss franc long positions moved higher for third straight week to a total of 17,841 net long contracts following a net of 17,374 long contracts on April 19th.

CAD: The Canadian dollar positions moved lower to a total of 59,063 contracts as of April 26th after CAD net contracts had risen to a total of 65,035 net long contracts on April 19th.

AUD: The Australian dollar long positions declined for the third straight week to a total net amount of 80,867 long contracts as of April 26th. AUD positions had totaled 84,961 net long contracts on April 19th.

NZD: New Zealand dollar futures positions increased higher for a sixth consecutive week. NZD contracts increased to a total of 11,457 long positions as of April 26th from a total of 9,339 long contracts on April 19th.

MXN: Mexican peso long contracts dipped from a recent high to a total of 131,806 net long contracts on April 26th. MXN positions had increased the week before to the highest level in at least a year with a total of 134,129 long contracts as of April 19th.

COT Data Summary as of April 26, 2011
Large Speculators Net Positions vs. the US Dollar

EUR: +68,279
GBP: +33,583
JPY: -36,997
CHF: +17,841
CAD: +59,063
AUD: +80,867
NZD: +11,457
MXN: +131,806

Further COT Resources from around the web:

• Forecast The FX Market With The COT Report

• The Only Indicator You Will Ever Need