InvestMacro FX

USD/CAD

Daily graph: http://www.real-forex.com/charts-daily/151010/CAD_DAILY_151010.JPG

One-Hour graph: http://www.real-forex.com/charts-daily/151010/CAD_1H_151010.JPG

The decrease of the currency until the support level 0.9974 anticipated in the last session truly happened.

On the daily graph, we can clearly see that the pair almost reached the level mentioned above. Once reached, because of the importance of the level, a reversing trend may occur, suggesting an opportunity to trade “Long”.

Potential trade

We suggest looking for an ascending configuration on one-hour graph. Such a configuration should appear after the pair will break the resistance level of 1.0075 upward. Order suggested:

• “Limit” order on “Long” position 10 pips above the resistance of 1.0075, meaning 1.0085.
• First level for a “Stop Loss” order on the last low appeared: 1.0026

EUR/JPY

Daily graph: http://www.real-forex.com/charts-daily/151010/EUR_JPY_DAILY_1510.JPG

After quite a long period of increase in the pair, a reversal happened last week. Please pay attention how important were the candles in the beginning of the decreasing process.

After four days downtrend oriented, a new uptrend occurred, however with small candles, compared to those appeared in the beginning of the decreasing process.

An interesting resistance stopped the trend at 114.83, suggesting a reversing trend. The reversal may create an opportunity for a “Short” trade.

Suggestion: A daily reversing candle or a descending configuration may confirm the reversal to start the transaction.

Have a profitable day!

Real Forex team

By Warren Seah – When a trade goes bad, it is always difficult to decide what to do. At that point of time during trading, there is always emotional investment in the trade that plays an important role. It is always bad to have capital loss at stake but it is our reaction to such situation that brings about disaster.

There are a few choices you can take when meeting a bad trade:

1. Exit your trade and take the loss like a man

2. Hedge the trade

3. Allow the situation to remain the same and hope for a recovery

4. Move your stop loss closer to price action

I certainly hope that you do also opt for option 3 as I do not believe in miracles in FX and that out of 10 times, I could say that those 10 times it ends up a disaster. Exiting your trade at the right time when things goes awry stops the pip bleeding and also relieves you of your emotional agony.

You can then go on to look for other opportunities where you could profit but beware of ‘revenge trading’ which I hope you don’t get into for the sake of recovering back the loss you’ve experienced.

Hedging is quite a tricky method to apply as you have to be experienced to do so. Cause it may backfire on you where you might end up losing on both sides of the trade should the market range.

The worse of the lot is to allow your trade to continue the same way and hope for a comeback. You have no control of the market and exposing yourself to too much agony will affect your logical thoughts. But if you have a stop loss in place earlier, it should be within your risk level threshold.

Moving stop loss closer to price action is a great idea but you should not be tempted to do just because the price is closing in on your stop loss. Moving of stop loss should be based on a planned exit strategy that matches your trading strategy and market condition beforehand. The moving of stop loss is preferably decided by the market forces through price action or indicator based movement.

That way, you remove any emotional attachment in deciding how you want to move your stop loss and that you allow the market to ride out the storm by itself within your control due to your planned exit strategy.

About the Author

Warren Seah

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By CountingPips.com

The U.S. dollar has been mostly trading on the defensive in the forex markets today while the American stock markets closed slightly lower. The dollar has fallen versus the euro, British pound sterling, Swiss franc and the Japanese yen on the day while advancing against the New Zealand dollar, Australian dollar and the Canadian dollar, according to currency data near the end of the US trading session.

The Australian dollar briefly flirted with parity to the US dollar today as the AUD/USD currency pair touched a high point of 0.9994 and marked a new all-time high for the Aussie, according to currency data from Oanda.

The Japanese yen continued to strengthen versus the American currency as the USD/JPY pair touched the 80.89 exchange rate level in earlier trading. This marked the Japanese yen’s strongest exchange rate against the dollar in 15 years.

The U.S. stock markets, meanwhile, finished the day almost unchanged with the Dow falling by 1.51 points, the Nasdaq decreasing by 5.85 points and the S&P 500 down by 4.29 points.

Oil edged lower by $0.39 to $82.62 per barrel while gold continued its record run with an increase by $9.00 to trade at the $1,378.50 per ounce level. Gold reached a new all-time high in today’s trading above the $1,388.00 level before pulling back.

US trade deficit increases in August

The United States trade deficit widened by more than expected in August, according to a release by the Commerce Department today. The U.S. trade deficit increased by $3.7 billion as the deficit leveled at $46.3 billion in August following a revised deficit of $42.6 billion in July.

The data surpassed market forecasts that were expecting a deficit of approximately $44.0 billion for the month.

The U.S. had a total of $153.9 billion worth of exports in August which was an increase of $0.3 billion from July’s total. August also saw an increase in imports with a total of $200.2 billion worth of imports compared with $196.1 billion in July for a increase of $4.1 billion.

The politically sensitive U.S. trade deficit with China rose in August to a $28.0 billion shortfall after a deficit of $25.9 billion in July. Other notable U.S. trade deficits were the deficits with the European Union at $8.1 billion, Mexico at $6.0 billion, Japan at $5.8 billion and OPEC at $9.0 billion.

The U.S. trade surpluses with other countries for August included Hong Kong at $1.9 billion, Singapore at $1.1 billion, Australia at $1.0 billion and Egypt at $0.4 billion.

Producer Prices increase for third month in a row.

U.S. producer prices increased for a third straight month in September, according to a report released by the U.S. Labor Department. Producer prices or wholesale inflation increased by 0.4 percent in September following a 0.4 percent increase in August and a 0.2 percent gain in July.

On an annual basis, producer prices rose by 4.0 percent from September 2009 following August’s annual increase of 3.1 percent. Contributing to the price increase was a rise in food prices by 1.2 percent while energy prices increased by 0.5 percent in September and rose for a second straight month.

Economic forecasts for the monthly producer price numbers were expecting a 0.1 percent increase and a 3.7 percent gain on an annual basis. Core prices, excluding volatile energy and food costs, rose by 0.4 percent in September and registered a year-over-year increase of 1.6 percent with both figures surpassing the forecasts.

Weekly Jobless Claims rise by 13,000.

A separate government release by the U.S. Labor Department showed that weekly U.S. jobless claims increased in the week that ended on October 9th. New jobless claims climbed to a total of 462,000 unemployed workers, an increase over the prior week by 13,000 workers. This gain of jobless claims was more than expected as market forecasts predicted a fall to 445,000 jobless claims. The 4-week moving average of unemployed workers rose by 2,250 from the prior week to a total of 459,000.

Meanwhile, workers seeking continuing claims for unemployment benefits for the week ending October 2nd decreased for the week. Continuing claims declined by 112,000 workers to a total of 4,399,000 unemployed workers. The four week moving average of continuing claims fell by 34,500 to 4,488,500.

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Good day to you my Forex friends! Guess what?!?! The Australian dollar has recently marked a new historical high over the US dollar. And from the looks of it, it seems that the AUDUSD pair has still a lot of legs left to move higher. As you can see from its 8-hour chart, the pair has been trading on a well defined uptrend for quite some time now. Earlier this week, the pair opened with a bullish gap though this move was invalidated when it fell below the bottom of the gap. Nonetheless, the tide has even turned for the better now as it formed and then broke out from an ascending triangle formation after moving past its previous all-time high at 0.9849. Gauging from the height of the pattern, the pair could run upwards by at least 150 pips more from 0.9900, bringing the 1.0000 marker in sight. As long as the uptrend holds, the Australian dollar would most likely reach parity with the greenback in the near term.

Recent talks of more money printing scheme (quantitative easing) by the US Federal Reserve has reflected negatively on the USD. Fed Chairman Ben Bernanke earlier stated the possibility of another round of quantitative easing or the printing of more money in layman’s term to support the economy by encouraging the public to borrow and to spend. Aiming to reduce the daily market lending rate by increasing the money supply would of course lessen the dollar’s valuation.

Based on the latest survey, retail sales and inflation figures in the US are expected to remain subdued. If these numbers remain flat over the next with the country’s labor market staying weak as well in the succeeding months then it is quite possible for the Fed to indeed do as it is suggesting now.

More on LaidTrades.com …

During today’s trading, USD/CAD briefly broke parity for the first time since April and the AUD/USD pair is nearing parity. The USD also declined to a record low versus the CHF today, as well as to a new 15 year low versus the Japanese yen. The recent negative sentiment regarding the greenback is due to bets the Federal Reserve will increase purchases of government debt, i.e. quantitative easing as soon as their next meeting in November. The release of today’s weaker than expected data only strengthened the case for further monetary easing. 

The number of Americans filing first-time applications for unemployment benefits unexpectedly increased last week. Jobless claims rose by 13,000 to 462,000 in the week ended Oct. 9. This indicates that though the economy is not likely to go to a double dip recession, the recovery is much slower than hoped and will take longer to recover than anticipated. The prospect of a prolonged unemployment rate around 10% is one of the main reasons the Federal Reserve is considering extending monetary easing policies.

Further bad news came from the trade deficit numbers, which showed the deficit widened more than forecast in August. The deficit with China reached a record level for the month as imports climbed. Irritation in the U.S and Europe grows as China is restraining the Yuan to aid exports; friction over exchange-rate and trade policy dominated discussions at the IMF’s annual meeting in Washington this month.

Tomorrow Federal Reserve Chairman Ben Bernanke is expected to speak about the future of the monetary policy. The FOMC committee is currently divided on how to proceed with its monetary policy. While some expanding its asset purchases program, others feel that it may not have much effect on the unemployment levels in the long run. While it is very likely the Fed will indeed resume asset purchases in the near future, the biggest question is how much. The current expectation, in light of the dismal economic data being published recently, is for a substantial amount. However, considering the level of disagreement among the FOMC members, the numbers may prove to be much smaller than expected, which will ultimately give the USD a much needed boost.

By Chris Vermeulen
www.TheGoldAndOilGuy.com

Oct 14th
Its been an interesting week with stocks, commodities and currencies having a knee jerk reaction to the FOMC minutes released Tuesday afternoon. In short the Fed clearly said there must be more quantitative easing before things will get better. It was this news which triggered a rally in both stocks and commodities.

Quantitative easing is a fast way to devalue the dollar and the Fed is doing a great job at that. As long as the dollar continues to decline the stock market will keep rising.

This week kicked off earning season with INTC and JPM beating analyst estimates. We usually see the market trade up the first week of earnings and then start to sell off by the end of earnings season. Both INTC and JPM sold off on strong volume today despite the good earnings and today’s broad market rally. This just goes to show the market has not forgot about buy on rumor sell on news… The big/smart money sold into the morning gaps exiting at a premium price. Is this foreshadowing for what is to come?

Take a look at the chart below which shows the falling dollar and how its helping to boost stocks and commodities.

While earnings season is trying to steal the spot light in the market, the fact is everything for the past 2 months has been about the US Dollar. If you put a chart of the dollar and the SP500 together they trade almost tick for tick in reverse directions. The amount of money getting pumped into the market cannot last and it will lead to a huge volume reversal day in due time. Until this happens the market will trade higher.

Taking a look at the SPY daily chart the 5, 10, and 14 simple moving averages tend to act as buy zones. The market was choppy from April until about 2 months ago. Now we are seeing the market smooth out and traders are switching to more of a trend trading strategy and not so much looking for extreme sentiment levels which typically signal short term tops and bottoms. Focusing on buying at these moving averages has been providing good support thus far. Stops should be set on a closing basis, meaning if the market is to close below the moving average then exiting the position is a safe play. It’s always best to layer your stops (scale out) in trending market. So stops below the 5, 10, 14 and even the 20ma will provide you with enough wiggle room to riding a trend.

Mid-Week Trading Conclusion:

In short, we are in a strong uptrend and until we get a major reversal day, buying the market is the way to go. The market as we all know is way over bought so if you decide to take a position on your own, be sure to keep it small. I would also like to note that financial stocks were the worst performing on the day so that could be telling us there could be some profit taking in the next day or two.

Chris Vermeulen
www.TheGoldAndOilGuy.com

By Zachary Scheidt, Editor, Taipan’s New Growth Investor and Velocity Trader, TaipanPublishingGroup.com

To put it bluntly, the case for buying gold right about now is as obvious as the nose on Barbra Streisand’s face.

This past Friday, gold futures closed at $1,345 an ounce – the second highest gold price on record. Goldman Sachs just announced that they are raising their 12-month target price on the shiny metal to $1,650 an ounce, citing that the “return of quantitative easing is likely to continue to be [a] strong catalyst for gold.”

I’m sure you’ve heard all of the commentary about how excessive printing has the potential to eventually destroy the U.S. dollar (and other paper currencies as well). That’s exactly why we have been seeing the price of gold skyrocket over recent months. The fears are all being realized and investors are in a full-fledged flight to safety.

Rising prices in precious metals are not lost on anyone. Not on institutional investors, not on sovereign wealth funds (SWFs), not on the Federal Reserve, and certainly not on individual investors.

Heck, you can’t even turn on the TV anymore without some guy yelling at you to buy gold coins. And quite honestly, he’s RIGHT! Gold is one of the best ways to protect the purchasing power of your hard-earned savings.

But there’s another very important reason why you should be buying gold now, today, while you still can…

Government Gold Hoarding Disguised As Healthcare?

Remember all that fuss about the healthcare reform bill? And all that talk about transparency and honesty?

Well, here’s the cold, hard truth: The bill is chock-full of side agreements and hidden clauses – most of which are extremely damaging to business and commerce.

As my regular New Growth Investor readers know, I’ve had a special focus on the healthcare sector for quite some time.

So I kept close tabs on all the reform hoopla… and I took personal interest in carefully reading the new bill. I wasn’t surprised to find hidden loopholes.

But I was surprised at what I found buried deep in section 9006.

One of the clauses that some (well meaning, I’m sure) congressman managed to fit into the bill is a statement that allows for the taxation of anyone wishing to sell more than a certain amount of physical gold.

This measure makes it easier for the Fed to track what gold assets you own – ultimately leading to what some believe could be restrictions on what precious metals you are and are not allowed to hold.

(By the way, I’m guest editing Smart Investing Daily today… but regular editors Sara Nunnally and Jared Levy always make investing simple with their easy-to-understand investment articles.)

History Repeats Itself

Did you know that only a few generations ago it was actually illegal to own physical gold?

Under President Franklin D. Roosevelt, a law was passed that actually allowed the government to confiscate physical gold. If U.S. citizens did not turn in their precious metal, they faced a fine and up to five years in prison.

The clause in the new healthcare reform bill could conceivably pave the way for the government to track, tax and eventually restrict an individual’s right to buy, sell or even OWN physical gold.

Why would the government enact this kind of regulation?

Because if consumers lose faith in the value of the U.S. dollar – and begin using precious metals as currency once again, it would completely obliterate the current power that the Federal Reserve has in regulating currency.

Gone would be the power to inject liquidity into the market, gone would be much of the ability to tax the population (after all, taxing in worthless dollars wouldn’t be very beneficial), gone would be the financial control that the government has over the broad economy.

Buy Gold Without Government Intervention While You Still Can!

The gold clause buried in section 9006 of the healthcare reform bill looks like a lot of tax mumbo jumbo to the untrained eye. I think that’s why you aren’t hearing about the ramifications of it from the talking heads on CNBC yet.

But the result in plain English is that now all sales and purchases between citizens of over $600 must be filed with the IRS.

With gold over $1,200 an ounce, that means every gold bar, every gold coin. The most popularly traded gold coin, the American Eagle, costs over twice the $600 ceiling.

And in 2012, when the new rules take effect, the IRS will be able to catalog the private gold holdings of American citizens. Every gold transaction will pass under the watchful eyes of the government.

Scary, huh?

That’s why I’m telling everyone who will listen that they need to stock up on gold now, while the government is still out of the picture. Because come 2012, that will all change.

Publisher’s Note: If you hear the price of gold is likely to more than double, your instinct is likely to buy gold, right? But what if I showed you an investment that rallied nearly 12 TIMES the amount that gold rallied during the last bull market in gold?

In fact, today Zach has three investment recommendations for you that should make many times the coming increase in the price of gold. Get your copy of his free report here.

Don’t forget to follow us on Facebook and Twitter for the latest in financial market news, investment commentary and exclusive special promotions.

About the Author

Zach Scheidt is the Editor of Taipan’s New Growth Investor and Velocity Trader, two of Taipan Publishing Group’s financial research investment newsletters. Zach’s experience as a hedge fund manager has given him the skills to manage sizeable investments of a number of private investment partners and develop advanced investment strategies to make the highest returns possible.

For Taipan’s New Growth Investor, Zach researches and profiles innovative new companies capable of creating long-term wealth regardless of the state of the stock market. He focuses on high-yield dividend stocks and provides simple long-term investment strategies. For Velocity Trader, Zach carefully scans thousands of stocks, looking for companies that have the potential to make huge stock price moves. He then uses option trading strategies to identify short-term investment opportunities for significant gains.

By Thomas Bainbridge – Markets across the globe are on the up, which is somewhat surprising considering that the talks surrounding Basle III have managed to potentially deliver a memorandum for disaster.

Generals have a tendency to fight the last war and both the central banks and finance ministers seem to be as blinkered as the WWI commanders in their conviction that ‘one big push’ will win the war. In their desperate attempts to avoid a repeat of 2008/2009, law makers risk creating an even poorer situation.

Unfortunately for the indebted nations of the West, we need the banks to be as imaginative as possible in order to get lending going again, however this appears to be the last thing on their agenda.

Senior management of financial institutions are committing a massive amount of their time on regulatory issues and capital is now being stretched even further. Can you imagine any other sector utilising such a scarce resource so unproductively without complaint?

As Simon Denham of Capital Spreads recently remarket, “Apologies, but increasing cash requirements for almost all risks, then forcing an increase in required capital levels by relation to a different criteria (share capital) is not going to lead to increased lending.

“However banks will probably be relieved that our Lords and Masters did not come out with something worse than Basle III”.

The damaging effect of what is going on may have started to show through in the UK’s trade figures. They had a gloomy look about them: 1) they were terrible, 2) the visible deficit was £1 billion larger than was expected and 3) the invisible surplus was £500 million worse than anticipated.

Is this an indication that, with tax rates so hugely out of line with those elsewhere in the world and overheads now far higher in the UK than in comparably more stable parts of the globe, that financial business is starting to leave these isles?

If London loses its European superiority, the consequences for the UK could be grim. However Basle III is just the start. When will the regulators learn that letting politicians anywhere near financial regulation is just a disaster waiting to happen?

The concept that bans on short selling (in spread betting, CFDs etc) or central reporting of positions are in any way stabilising decisions is simply whimsical. The majority of UK companies already report every single equity trade to the regulators. The fact is that the regulators are swamped by data. Multiply this by every state in the European Union and you have a considerable problem.

Banks spend tens of millions on computer systems to process the data that they, alone, create. Can you imagine the processing programme that would be necessary to take every single derivative trade from every financial institution in the European Union? And then it has to be processed.

For all the forecasts of fiscal catastrophe it might be sensible to bear in mind that Britain and America will actually make money from their investments in the financial sector.

The permitted demise of the Lehman Brothers, whether incautiously engineered or not, was the real failure as it exposed every financial institution to the possibility of contagion.

In the UK, the failure of Northern Rock also appears odd in hindsight. It could be argued that it was not the financial institutions that should be placed with the blame for the events of 2008/2009, but the ‘lenders of last resort’ ie it was the central banks that reacted too late to events.

About the Author

A leading financial author based in the heart of London’s Canary Wharf. Thomas Bainbridge is a respected commentator on the financial markets including the Financial Spreads markets.

By Greg Holden – The US dollar has continued to plummet against most of its currency rivals this past week, with some now saying that a round of quantitative easing has already been priced in by speculators. The Canadian dollar has also been falling versus many of its currency counterparts, but interestingly it is reaching towards a 6-month high mark against the greenback.

In the chart below we can see that the USD/CAD pair has been falling for the past few months, but trading somewhat flat for the past half-year between 0.9960 and 1.0600. As the price approaches the 23.6% support level on the Fibonacci, traders should be able to determine the direction of the pair by its trading behavior over the next few days.

Other technical indicators seem to suggest an impending upward correction to the pair. The RSI on the chart below has the price just entering the over-sold region, suggesting a build-up in upward pressure. The Stochastic (slow) also appears moments away from a bullish cross, which supports the notion of an upward move.

So long as no major fundamental news causes a shift in value for either currency, the pair may likely see an upward correction after bouncing off the 0.9960 price level. Long-term buy positions appear to be beneficial for USD/CAD traders.

USD/CAD – Weekly Chart

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.