Author: FX_Trdr

By Fast Brokers – Gold experienced a solid rally yesterday as the precious metal’s negative correlation with the Dollar kicked back into 1st gear.  The Cable, Aussie, and EUR/USD all experienced topside breakouts yesterday in the wake of the Fed’s decision to maintain its loose monetary policy stance for the foreseeable future.  Yesterday’s return to the risk trade certain benefitted gold as the precious jumped from $1100/oz and peaked just above $1130/oz and our new 3rd tier downtrend line.  Our 3rd tier runs through previous March highs, or the $1145/oz area.  Hence, if gold can manage to break past our 3rd tier this could indicate more substantial near-term gains.  Meanwhile, investors should keep an eye on the Greenback and monitor the ability of the risk trade to expand on yesterday’s gains.  The Cable did break through some key downtrend lines and the Aussie is continuing its steady ascent, creating a favorable correlative environment for gold.  Bernanke will testify before congress this afternoon, a potential market mover.  Additionally, the U.S. will print a wave of data tomorrow.  Hence, activity could pick back up this afternoon and during tomorrow’s U.S. session.  Additionally, investors should keep an eye out for any more psychological developments hitting the wire regarding EU and UK fiscal problems since these headlines can jolt currencies as well.

Technically speaking, gold faces multiple downtrend lines along with intraday, 3/5and 3/3 highs.  As for the downside, gold still has multiple uptrend lines serving as technical cushions along with intraday, 3/9, and 3/11 lows.

Present Price: $1123.20/oz

Resistances: $1124.29, $1125.52, $1127.77/oz, $1129.41/oz, $1131.05/oz, $1132.48/ oz

Supports: $1121.83/oz, $1120.39/oz, $1118.34/oz, $1116.70/oz, $1114.50/oz, $1112.81/oz

Psychological: $1100/oz, $1150/oz, March highs and lows

(click chart to enlarge)

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regarded neither 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 Aussie has taken another step higher and is continuing its consistent ascent after the Cable and EUR/USD decided join in on the action yesterday.  Both Euro currency pairs experienced sizable breakouts, particularly the Cable, after the Fed decided to keep its loose monetary policy intact.  The broad-based risk rally and weakness in the Dollar naturally benefitted the Aussie since the RBA has been one of the biggest hawks around.  This week’s breakout in the AUD/USD has gotten the topside momentum going again after relative consolidation into weak employment and housing reports from Australia.  That being said, it will be interesting to see if the Aussie can sustain its upward trajectory should Australia’s fundamentals continue to cool.  China and the U.S. are in another verbal battle concerning Yuan policy.  China is sticking to its guns in regards to keeping the Yuan stable despite calls from the U.S. to appreciate.  China’s attitude could prove to be favorable for the Aussie since it helps keep China’s demand for Australia’s commodities stable in the process.  Meanwhile, investors will be keying in on Bernanke’s congressional testimony.  Additionally, the U.S. will release CPI, Unemployment Claims, and the Philly Index tomorrow.  With Australia quiet on the data wire the Aussie could opt to follow its correlation with the risk trade for the remainder of the week.

Technically speaking, the Aussie has our 4th tier downtrend line serving as a technical barrier.  Our 4th tier runs through previous 2010 highs and is our last foreseeable downtrend line.  Hence, a breakout beyond our 4th tier could signal more substantial topside movements over the near-term.  As for the downside, the Aussie has multiple uptrend lines serving as technical cushions along with intraday and 3/16 lows.

Price: .9219

Resistances: .9230, .9239, .9250, .9264, .9276, .9286

Supports: .9213, .9203, .9195, .9186, .9178, .9171

Psychological: .92, .93, 2010 highs

(click chart to enlarge)

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 USD/JPY has stayed range-bound the past 24 hours despite a broad-based breakout in the risk trade.  The Fed maintained its dovish monetary policy, resulting in a pullback in the Dollar across the board.  Though the USD/JPY did pull back a bit, it held firm after a couple retests of the highly psychological 90 level ahead of the BoJ’s own monetary policy meeting.  The BoJ opted to double liquidity designated for bank lending in a sign of good faith for the DPJ’s call to fight deflationary pressures.  The BoJ’s liquidity injection coupled with the Fed’s consistent dovish stance has resulted in a sideways moving USD/JPY.  Additionally, two members of the BoJ dissented to the central’s bank’s injection, showing all members are not on board for looser liquidity measures in the future.  However, should upcoming U.S. economic data outperform the USD/JPY could head higher again since investors would likely speculate that the Fed will tighten before the BoJ.  The U.S. will release CPI, Unemployment Claims, and the Philly Fed Index tomorrow.  Therefore, investors should keep a sharp eye on the USD/JPY’s reaction to tomorrow’s data points.  Bernanke will also testify before congress today, which could have the potential to move the Greenback.

Technically speaking, the USD/JPY faces multiple downtrend lines along with intraday, 3/15, and 3/12 highs.  Meanwhile, the highly psychological 90 area could continue to have an influence over the USD/JPY’s movements for the near-term.  As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with 3/16 and 3/9 lows.

Present Price: 90.40

Resistances: 90.45, 90.52, 90.58, 90.63, 90.69, 90.75

Supports: 90.36, 90.29, 90.21, 90.14, 90.08, 90.01

Psychological: 90, March highs

(click chart to enlarge)

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regarded neither 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 has extended yesterday’s rally resulting from the Fed’s decision to maintain its loose monetary policy for the foreseeable future.  Investors were speculating about the possibility of an alteration in the Fed’s timeframe for tightening liquidity.  Hence, the central bank’s dovish language instigated a rally in the risk trade across the board.  After cooling down during today’s Asia trading session, the Cable came to life again after the UK’s Claimant Count Change registered a -32.3k decline, considerably lower than estimates of an 8.2k increase.  The shocking improvement in the UK’s unemployment picture countered bearish sentiment concerning weakness in manufacturing and fiscal fears, sending the Cable well beyond its 1.53 level in response.  Additionally, MPC meeting minutes revealed some concern about inflation coupled with a unanimous vote to keep QE measures unchanged.  The show of concern for inflation implies that the BoE could be reluctant to increase liquidity again, a Cable positive considering there has been considerable speculation that the BoE would loosen.  The tide has certainly shifted for the Cable, which has surged well beyond our previous 3rd tier downtrend line.  Our 3rd tier runs through February 17 highs, or the 1.58 level.  Hence, technical indicators imply that the Cable could have more topside room to explore over the medium term.  In the meantime, investors will key in on Bernanke’s testimony before congress during the afternoon.  The UK will release Public Sector Net Borrowing tomorrow followed by U.S. CPI, weekly Unemployment Claims, and the Philly Index.  Therefore, tomorrow could prove to be another active trading session.  Meanwhile, investors should also keep in mind the potential for more negative psychological developments regarding the UK’s troubling fiscal situation.

Technically speaking, the Cable has multiple uptrend lines serving as technical cushions along with intraday lows.  As for the topside, the Cable faces multiple downtrend lines along with intraday and 2/25 highs.  Our new 3rd tier downtrend line could prove to be a key barometer since it runs through 1/28 highs, or the 1.6275 area.

Present Price: 1.5306

Resistances: 1.5318, 1.5334, 1.5354, 1.5377, 1.5397, 1.5416

Supports: 1.5288, 1.5272, 1.5252, 1.5236, 1.5281, 1.5205

Psychological: 1.53, 1.54, March highs

(click chart to enlarge)

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 has eased after breaking through previous March highs during the Asia trading session.  The EUR/USD participated in the risk rally stemming from the Fed’s decision to maintain its loose monetary policy for the foreseeable future.  The central bank’s continued dovish language prompted a pullback across the board.  The EUR/USD also derived some of its upward momentum from Standard & Poor’s removing Greece from its watch list and reaffirmed the country’s BBB+ credit rating in the process.  All that being said, the EUR/USD hasn’t logged the type of gains over the past 24 hours as we’ve seen in the Cable and Aussie.  The Euro’s relative weakness is highlighted by today’s hefty pullback in the EUR/GBP.  The EUR/USD’s upward momentum is likely being restrained by the lack of details provided by the EU’s finance ministers in regards to their plan for extending a lifeline to Greece should the nation’s fiscal situation deteriorate further.  Regardless, the EUR/USD did climb through what are now our 1st and 2nd tier downtrend lines, which run through the 1.3950 area.  Hence, technicals are beginning to work in favor of the EUR/USD’s medium-term outlook.  The EU will be relatively quiet on the data front tomorrow despite the Current Account figure.  Therefore, investors will likely remain focused on the U.S. with Chairman Bernanke’s testimony due later today.  The U.S. will also release CPI and weekly Unemployment Claims data tomorrow.  Should CPI come in light like today’s PPI while Unemployment Claims hover around 450k, this could benefit the risk trade in anticipation that the Fed will continue to pump liquidity into the U.S. economy, thereby weakening the Dollar.

Technically speaking, the EUR/USD faces multiple downtrend lines along with intraday and 3/12 highs.  The EUR/USD has separated from our 1st tier downtrend line again, which runs through previous 2010 highs, or the 1.4575 area.  Hence, techincals could be pointing in favor of a longer-term uptrend in the making.  As for the downside, the EUR/USD has several uptrend lines serving as technical cushions along with 3/15 and 3/10 lows.  Meanwhile, the psychological 1.35 area is still serving a technical cushion while 1.40 serves as a key psychological barrier.

Present Price: 1.3762

Resistances: 1.3775, 1.3796, 1.3814, 1.3835, 1.3853, 1.3882

Supports:  1.3756, 1.3736, 1.3725, 1.3713, 1.3695, 1.3670

Psychological: March and February Lows, 1.35, 1.40, February highs

(click chart to enlarge)

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.

Along with your other forex trading tools, consider evaluating your strategy mathematically. A number of mathematical tools can give you an objective analysis of your strategy or even provide a predictive advantage that will make a difference in your profits.

A forex guide calculates your profitable mathematical expectation (PME)—the mathematical probability that your strategy will yield profits rather than losses.  This method is essentially a form of financial self-discipline, because it forces you to assess the risks and potential costs. If you calculated your values accurately and your formula renders a positive number, you have a positive expectation. Naturally, you should abandon a strategy with a negative expectation, but the higher the number, the better you can expect your strategy to perform. The value of this method, therefore, is in the discipline of evaluating your risks and critically testing your strategy.

The put-call ratio is a simple mathematical tool for gauging the mood of the market towards a specific currency. To use this tool, simply divide the number of traded put options by the number of traded call options. (More simply, you can use this as a fraction with the puts as the numerator and calls as denominator.) As the ratio goes up, it signals a pessimistic sentiment—traders expect the currency you are evaluating to go down. The value of this tool is that it lets you read the market’s mood objectively and respond as quickly as possible.

Z-score is a mathematical tool that helps you evaluate whether there are any trends in the pattern of your wins and losses. For instance, you might discover that your trading strategy generates wins and losses in streaks rather than randomly. This conclusion can guide your trading, making you more wiling to strengthen your position at the beginning of a winning streak or pull back at the beginning of a loss. The value of this method is in evaluating whether you should trust the hunch that your winnings come in streaks or if your winnings are actually random.

Implied volatility is  a complex tool for calculating the expectation that a currency’s price will be volatile in the future. By definition, this tool has to assume a pricing model, which is the Black-Scholes model in the case of foreign exchange. Implied volatility is priced into the premiums for options, meaning that quiet markets offer lower premiums than markets with high implied volatility. Recent studies have demonstrated that implied volatility can helpfully predict price uncertainty within a short time-span—about a month. Beyond this, there are too many biases and uncertainties for the tool to be helpful. The value of implied volatility is in evaluating the amount of risk you accept by making a call. It is usually best to use financial software for this calculation. Consult a forex broker list to see which firms include this and other statistical calculations in their software.

Of course, these mathematical tools are only one part of the total package necessary for successful forex trading. There are other helpful models, such as Fibonacci retracement and pivot points, which are more of techniques than mathematical evaluations. But along with knowledge, experience, and discipline, mathematical analysis can make a successful trader even more successful.

Article courtesy of Forex Traders

Enjoy your 8 free chapters from Prechter’s Conquer the Crash — the book that foresaw what others have missed.

By EWI Editorial Staff

There is no question that Robert Prechter’s Conquer the Crash foresaw and explained nearly every chapter of today’s financial crisis, years before it happened. Enjoy your 8 free chapters from the book with this free Club EWI report; here’s a quick excerpt from chapter 23, “What To Do With Your Pension Plan.” Note especially the last two paragraphs.

Make sure you fully understand all aspects of your government’s individual retirement plans. In the U.S., this includes such structures as IRAs, 401Ks and Keoghs. If you anticipate severe system-wide financial and political stresses, you may decide to liquidate any such plans and pay whatever penalty is required. Why?

Because there are strings attached to the perk of having your money sheltered from taxes. You may do only what the government allows you to do with the money. It restricts certain investments and can change the list at any time. It charges a penalty for early withdrawal and can change the amount of the penalty at any time.

What is the worst that could happen? In Argentina, the government continued to spend more than it took in until it went broke trying to pay the interest on its debt. In December 2001, it seized $2.3 billion dollars worth of deposits in private pension funds to pay its bills.

In the 1930s, the world heard a lot of populist rhetoric about why “rich” people should be plundered for the public good. It is easy to imagine such talk in the next crisis, directed at requiring wealthy people to forfeit their retirement savings for the good of the nation.

With the retirement setup in the U.S., the government need not be as direct as Argentina’s. It need merely assert, after a stock market fall decimates many people’s savings, that stocks are too risky to hold for retirement purposes. Under the guise of protecting you, it could ban stocks and perhaps other investments in tax-exempt pension plans and restrict assets to one category: “safe” long-term U.S. Treasury bonds.

Then it could raise the penalty of early withdrawal to 100 percent. Bingo. The government will have seized the entire $2 trillion — or what’s left of it given a crash — that today is held in government-sponsored, tax-deferred 401K private pension plans. I’m not saying it will happen, but it could, and wouldn’t you rather have your money safely under your own discretion?

By Greg Holden – The Scandinavian currencies all seem to be gaining ground on their European and American counterparts. The Swedish Krona may be the exception, however. Although the SEK has made substantial gains versus the US Dollar, it has continued to struggle against the EUR as regional concerns continue to mount.

Amid the turbulence coming out of the Euro-Zone and Britain, few seem to have taken note of the strong bullish channels which the Scandinavian currencies have experienced over the past two weeks. Oil prices have been relatively stable, despite last Friday’s sharp drop and today’s rebound. This stability has helped maintain the strength of the Norwegian Krone, one of the world’s primary commodity-linked currencies.

Denmark’s recent struggle with matching discount rates with a closer Euro-Zone integration has put a strain on the DKK, but its trends have mirrored those of the NOK rather closely regardless of these concerns.

The Scandinavian regional economy has gained from recent surges in risk appetite, and held steady despite the appearance of risk aversion in Monday’s trading. There seems to be a general sentiment that the Kroner will continue to post advances so long as the Euro-Zone’s stability remains uncertain.

Technical Analysis

– Below is the USD/NOK 4-Hour chart by ForexYard.

– The indicator used is the Stochastic (slow). A Fibonacci Retracement grid was also superimposed on the chart.

– Point 1: The pair has been trading in a range between 5.8180 and 6.0400, but there is a possibility that it has just breached the 50% retracement level and could now experienced a sharp downward movement.

– Point 2: On the other hand, the Stochastic (slow) shows a fresh bullish cross and the current price is visibly at a very strong support level. The amount of upward pressure could push this pair back up into a correction.

– Traders should watch this pair closely. Any indication of a major breach below the 50% line could mean a sustained downward movement is impending. But if the pair continues to waver at its current support line then we can expect to see an upward correction.

USD/NOK 4-Hour Chart

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.

Forex Market Review by Finexo.com

Source: ForexYard

Yesterday ended with traders returning to the EUR and GBP while selling safe-haven currencies such as the USD and the JPY. An agreement regarding a future safety net for Greece’s debt problems helped lift the EUR. Later, Standard & Poor’s affirmed its rating for Greece which gave the euro another boost. The GBP experienced its biggest daily gain in several months after better than expected data was published.

Economic News

USD – Economy Slowly Improving, Rates Held Steady

The EUR/USD was up for most of the day and is currently trading at 1.3778 from yesterday’s opening price of 1.3690. The weakness of the greenback is expected to continue today unless news about Greece and UK debt concerns makes it to headlines, causing investors to jump back into the safety of the Dollar.

Traders were not taken by surprise yesterday by the Federal Reserve Board’s decision to keep rates below 0.25%. Fed Chairman Ben Bernanke also calmed investors in his statement by saying that he would leave its target interest rates steady at 0-0.25%.

At 12:30 GMT today the US will publish its PPI (Producer Price Index), forecasts are for 0.2% decline, whereas the previous reading came in at a 1.4% growth. A higher than expected result may increase market volatility for the greenback. Later, the US will publish its Crude Oil inventories report. Low inventory data may support an economic revival. Good results will send investors away from the USD, as they will be diverting investments to riskier assets.

EUR – EUR Closes Higher vs. USD as Greece Concerns Ease

The EUR traded higher against the greenback for most of the day. The EUR/USD climbed 80 pips and is currently trading at 1.3778. The EUR/JPY was also up by 100 pips, marking the rise of riskier assets in lieu of safe-havens from the growth in European consumer sentiment. Both pairs ended yesterday close to the daily high, signaling the rally is expected to continue into today.

The EUR gained after a statement by the European Union (EU) about an aid package to Greece. Standard & Poor’s final decision to keep its ratings for Greece steady added to investor confidence in the EUR. Germany’s ZEW Economic Sentiment figures, published yesterday, also came slightly above forecasts, supporting a rise in risk appetite and a boost to the Euro-Zone.

The Euro-Zone will be largely absent from the economic calendar today. With a number of significant reports expected from Britain today, the GBP’s recent spike may be in the crosshairs for many investors. The big question is whether the Pound is expecting a correction, or if this recent upward move can sustain itself.

JPY – Yen Slides as Risk Appetite Grows

No significant news came out of Japan yesterday. The Yen, as a result, was mainly influenced by traders’ appetite for risk. The JPY was primarily down against the GBP and is currently trading at 137.60, from yesterday’s 135.70. The Japanese currency saw similar losses to the EUR and is currently trading at the 124.45 price level. Against the USD, it is currently trading at 90.35.

The weakness of the Yen is a consequence of the Bank of Japan’s (BOJ) previous announcements to keep the JPY weak. Following these statements, traders were waiting to hear about new monetary easing measures, which were published this morning around 4:00 GMT. In a split vote, the BOJ indeed decide to ease its monetary policy further by releasing additional low-interest loans in order to help jump-start the economy and combat deflation.

Crude Oil – Crude Oil Prices Rise supported by a Strong EUR

Crude Oil is currently trading at $82.13 a barrel. The price was significantly higher yesterday supported by the strength of the EUR vs. the USD. Crude Oil prices rose when the dollar weakened against other major currencies yesterday. If the EUR will keep to yesterday’s rally against the USD, oil prices might see new recent highs above the $83 mark. If the price close above this level today this might signal a buy opportunity. Any downturn in EUR sentiment will influence oil prices in a similar fashion.

In recent trading, volatility was common in regards to Crude Oil prices. Traders are awaiting an OPEC meeting which will take place later today. OPEC is still expected to keep production at current levels, which shouldn’t affect prices too heavily. Additionally, the US Crude Oil inventories report will be published at 14:30 GMT and may add to today’s price fluctuations. Low inventories may in fact push oil prices higher.

Technical News

EUR/USD

A bullish formation on the daily chart is still intact; however the momentum is already quite low. The 4 hour chart is also maintaining a slightly bullish configuration yet with no distinct conclusion. Traders are advised to hold for the break and then swing into it.

GBP/USD

The price of this pair appears to be floating in the over-bought territory on the RSI of the hourly chart, signaling an impending bearish move. The fresh bearish cross on the 4H chart’s Slow Stochastic also supports this notion. Going short appears to be a good strategy today.

USD/JPY

The pair continued with the bullish trend, as it’s now being traded around the 90.50 level. The 4-hour chart’s RSI lacks downward momentum, suggesting that the bullish trend has more steam in it. Going long seems to be the preferable choice today.

USD/CHF

The typical range trading on the hourly chart continues. The 4-hour chart Slow Stochastic is floating in neutral territory. However, the pair currently sits near the bottom border of the daily chart’s RSI, suggesting an upward correction may be imminent. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.

The Wild Card

Gold

Bullish trends were initiated around the $1118 level, and have continued with full steam as currently an ounce of gold is valued at $1126. Currently, gold is reaching towards a very strong resistant level placed at the $1130 level. If the resistant level will be breached, another sharp bullish move might take place. This could be a great opportunity for forex traders to join a very popular trend.

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.