InvestMacro FX

By Adam Hewison – In this short video, we share with you the downside targets that we have independently arrived at for this index.

This video is short and to the point, but you will see exactly what we’re looking at. The chart pattern and downside
counts are similar for all of the equity markets and I believe that this Friday we will see exactly what’s going to happen.

As always our videos are free to watch and there is no need to register. All we ask is that you make a comment and let
us know your views on this market.

Watch the New Video Now…

All the best,
Adam Hewison
President of INO.com
Co-founder of MarketClub

By Adam Hewison – After dipping just below the 1.20 level, the euro had a brief rally that pushed this currency back up to the 1.24/1.25 area. This corrective rally did not change the longer-term outlook for this market.

In this new short video (less than two minutes in length), you’ll see our updated thinking on this currency.

Watch the New EURO Forex Video Now…

Like all of our videos, there is no need to register and we encourage you to leave your thoughts below.

All the best,
Adam Hewison
President of INO.com
Co-founder of MarketClub

Good day euro fans! Now, if you’re one of the lucky ones who are still long on the euro then yesterday was your lucky day as the EURUSD pair surged by more than 200 pips! The EURUSD opened at 1.4957 and closed at 1.5163. Contrary its previous inclination which I mentioned in my last post about the pair back in June 21 (kindly check it here), the euro has also beaten the odds with one swift move yesterday. Now, it appears that the euro bears went back inside their caves as the bulls came rushing. Looking at its daily chart, it seems that the pair has broken out of a inverted head and shoulders formation. If this gets validated then the pair could continue its rise though it would likely meet some heavy selling pressure at the downtrend resistance. A break of this downtrend line would give the euro bulls some additional room to run. But if the downtrend holds and the euro falls again then its immediate supports would be at the head and shoulders neckline, 1.2200, and its 2010 low at 1.1876.

Like what I mentioned in my other blog earlier today (see it here), yesterday’s price action is a bit off since any downbeat economic updates from the US usually leads to a sell-off in the anti-dollar currencies like the EUR. Instead of crashing after a barrage of weak reports (initial jobless claims, ISM manufacturing PMI, and pending home sales), the euro soared by its most single day gain in a year of more than 200 pips. We all know that the euro zone is still hampered with debt concerns as Spain has been recently placed into the watch list by the international ratings agency, Moody’s. Yesterday’s price action, though, indicated that investors have ‘priced-in’ the US’s lackluster fundamentals into its currency. The money flow  among currencies, though, remains to be influenced by risk sentiment, where the USD and JPY are favored over the others during times of risk aversion, assuming that this trend holds. However, given yesterday’s trading, its quite hard where the currencies will head following today’s NFP report.

Speaking of the NFP report, currencies as well as the equities markets would surely experience some volatility upon the release of its June result today at 12:30 pm GMT. US firms have likely slashed about 110k workers in June which would cause the US’s unemployment rate to rise to 9.8% from 9.7%. Another drop in equities would happen if this is indeed the case or worse.

More on LaidTrades.com …

Source: ForexYard

The U.S. dollar made some fairly significant gains against its Japanese counterpart in trading today, after the pair fell to a 7-month low last night. Investors began selling off the yen after some early morning gains in the Tokyo stock market induced some modest risk taking. Coinciding with the dollar’s gains, gold prices also began to go up following yesterday’s steep drop. Gold fell well over 3000 pips yesterday following a series of particularly disappointing U.S. news events.

Traders should be weary of any gains being made by the dollar at the moment. Any risk taking among investors will likely be tempered ahead of the all-important U.S. Non-Farm Employment Change report at 12:30 GMT. This report always creates volatility and presents traders with an excellent opportunity to make quick profits. Analysts are forecasting negative job growth this month in the U.S. If true, downward pressure on the dollar will likely occur. Gains for the yen and possibly the euro would also likely occur.

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.

Good day forex peeps! Here’s an update on the cable or the GBPUSD pair which I last posted on June 17 (kindly see my previous entry here). Contrary to what I thought would happen, the sterling pound had risen against the odds and had broken several significant resistances during the past two weeks to place itself above high ground. Zooming closer to its 4-hour time frame, the cable is seen to have been trekking a rising channel. At present, the pair seems to be approaching the channel’s resistance after it bounced from the formation’s support. But with the stochastics in the overbought area, it could move sideways or even retrace for awhile before continuing its journey north. If it weakens, a possible downside target would be the previous high just above 1.5100 or at the channel’s support. In any case, as long as the channel remains intact, the pound would most likely move higher.

Yesterday’s price action surprised a lot of traders and investors like me as the its dollar relationship moved away from its present theme. Usually, any downbeat economic updates from any of the major economies would spark some risk aversion which then would lead the traders back to the safety of the greenback and the yen. This was not the case yesterday. The higher-than-expected weekly initial jobless claims in the US (472k vs. 454k), the worse-than-projected drop in the ISM manufacturing PMI (56.2 vs. 58.9), and the sharp slide (30.0%) in pending home sales rocked the equities markets once again, causing the major indices to lose more than 1.0%. The non-dollar currencies like the GBP, however, rallied. It seems like investors had priced the US’s weak economic fundamentals back in the USD at least yesterday. Is this a start of a new trend? May be not but we will see in the coming days and months.

Today’s non-farm employment change  (NFP) report in the US would surely cause some pre-fourth of July fireworks. US firms are seen to have slashed about 110,000 workers in June, marking the country’s first job loss in four months. Such drop or worse would likely place a lot selling pressure on equities again. If the ADP’s gauge is correct then the government’s actual count could come in worse than the market’s estimate. Its impact on currencies, though, is quite blurry due to yesterday’s correlation break. Nonetheless, expect some volatility among the major currency pairs during the time of the report’s release. Stay on your toes!

More on LaidTrades.com …

Source: ForexYard

Today’s release of the Non Farm Employment Data, which is due to be announced at 12:30 GMT, follows a week of negative economic data which raised concerns that the U.S economic recovery is stagnating. It is expected that payrolls fell by 100K in May, which if true, would likely put further pressure on the USD.

Economic News

USD – USD Tumbles on Negative Economic Data

The USD fell against its major counterparts today after the release of negative economic data fueled concerns that the U.S economic recovery is slowing. The Institute for Supply Management’s manufacturing index fell to 56.2 in June from 59.7 in May, while U.S. pending home sales fell 30%in May. Putting further pressure on the USD was the release of the Unemployment Claims data which showed an increase of 13,000 new people filing for unemployment insurance from last week. This result is especially important ahead of the release of the Non Farm employment data today at 12:30 GMT.

The USD seems to be loosing its safe heaven appeal in light of the poor economic data and stagnate labor market. Concerns about weakness in the U.S economy are proving very negative for the greenback, particularly versus the yen. The dollar dropped 0.9% against the yen to 87.60 yesterday. At one point, the pair touched 86.97, its weakest level since Dec. 2.

EUR – EUR Recovers to above $1.25 Level

The EUR rallied against the USD following a successful Spanish government bond auction. The common currency broke above the $1.25 level, gaining more than 2.25% to reach its highest level in five weeks against the greenback.

The EUR/JPY is currently trading around the 110.15 level, an increase of over 200 pips from last night. The U.K. pound is trading at $1.5183 from $1.4939. The GBP rose after the release of the manufacturing PMI which showed that Britain’s manufacturing sector continued to grow at a fast pace in June. The Swedish Krona also rallied yesterday following the decision by Sweden’s central bank to hike its key lending rate to 0.5%, up from 0.25%.

Today, the direction the euro takes will likely be based on the U.S. Non Farm Employment data, set to be released at 12:30 GMT. Investors are also advised to follow the release of the euro-zone unemployment rate at 9:00 GMT.

JPY – JPY Soars Versus the USD

The yen gave some ground to the U.S. dollar in early Asian trading today, with the USD gaining 0.5% against the Japanese currency and pushing back above 88.00. USD/JPY had earlier dropped sharply to a 7-month low below 87.00 Thursday. The yen also fell against the EUR as Asian Equity markets rose, boosting demand for riskier assets.

The yen weakened against 11 of its 16 major counterparts. The yen fell to 110.10 per EUR from 109.74 in New York yesterday. It slid to 88.05 per USD from 87.60 yesterday, when it climbed to 86.97, the highest level since Dec. 2.

Markets today are awaiting the release of the U.S Non Farm Data. A worse than expected result will likely benefit the yen as it is perceived as a safe heaven currency and tends to benefit in times of financial uncertainty.

Crude Oil – Crude Falls below $73 a Barrel

Crude oil futures fell 3.5%, sliding to three-week low yesterday. Light, sweet crude for August delivery on the New York Mercantile Exchange settled down $2.68 at $72.95 a barrel, the lowest price since June 8; it was the biggest single day decline since June 4.

Crude Oil fell on concerns of a stalling economic recovery after the release of disappointing U.S. reports on manufacturing, unemployment, home sales and construction spending. It reached a low of $72.05, down 9.2% from Monday’s high of $79.38 a barrel.

Demand prospects are diminishing over an apparent slowdown in the Chinese and U.S economic recovery, the 2nd and 1st largest oil consumers respectively. It is likely market sentiment will remain negative without any positive economic news. Investors will be paying close attention to today’s U.S. Non Farm unemployment data as it is expected payrolls will drop by 100,000.

Technical News

EUR/USD

The Relative Strength Index (RSI) on the 4-hour chart shows this pair trading well into overbought territory, an indication that a downward correction should take place sometime today. This sentiment is supported by the Bollinger Bands on the 2-hour chart. Going short with tight stops may turn out to be the best strategy today.

GBP/USD

The Stochastic Slow on the 4-hour chart shows a bearish cross has formed for this pair, indicating a downward correction is likely to take place during the course of the day. This theory is supported by the RSI on the 2-hour chart, which shows the pair in overbought territory. Traders are advised to go short with tight stops today.

USD/JPY

The Relative Strength Index on the daily chart indicates that this pair is currently in oversold territory, indicating that upward movement is likely to take place over the course of the day. This conflicts with the Stochastic Slow on the 2-hour chart, which shows a bearish cross forming. Traders may want to take a wait and see approach for this pair today.

USD/CHF

The Relative Strength Index (RSI) on the 4-hour chart shows that the pair is in oversold territory, and has been there for some time. The Stochastic Slow on the daily chart is showing a bearish cross has formed, lending support to the theory that an upward correction may take place. Traders are advised to go long with tight stops today.

The Wild Card

Gold

After falling more than 3000 pips yesterday, technical indicators are showing that gold may see an upward correction today. The Stochastic Slow on the 4-hour chart shows that a bearish cross has formed, an indication that upward movement could occur. The Relative Strength Index on the 8-hour chart also shows the commodity in oversold territory. Forex traders are advised to go long today.

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.

By eToro – The Euro rallied as investor steered away from the dollar, which created a relief rally for the EUR/USD.  A break of the 50-day moving average, could lead to further short covering to 1.2672.

Click here to read the full daily Review

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.

By CountingPips.com

The US dollar has been trading lower against the major currencies today following the release of worse than expected economic data out of the United States. The dollar has touched its lowest level against the euro in over a month following the ECB loan results while the American currency has fallen to a seven-month low against the Japanese yen in forex trading action this afternoon. A decrease in manufacturing activity and pending home sales as well as a rise in weekly jobless claims has weighed on the dollar and the US stock markets.

The American currency has declined versus the euro, British pound sterling, Japanese yen, Canadian dollar, Swiss franc and the New Zealand dollar while trading almost unchanged against the Australian dollar today.

Meanwhile, the US stock markets have had a negative session today with the Dow Jones industrial average falling by approximately 50 points at time of writing while the NASDAQ has tumbled almost 10 points and the S&P 500 has traded lower by over 4 points. Oil has fallen by approximately 3 dollars to trade at the $72.65 per barrel level and gold has declined sharply by approximately $35.00 to stand at the $1,210.60 per ounce level.

Manufacturing activity decreases

Manufacturing data released by the Institute for Supply Management showed that manufacturing activity dipped in June to a 56.2 score following a score of 59.7 in May. Although this marked the 11th consecutive month for expansion in the manufacturing sector, the score failed to reach market forecasts that were expecting a 59.0 score. A score in the ISM report above 50 percent is considered to be growth and less than 50 percent is considered to be a contraction.

Norbert J. Ore, chair of the ISM Business Survey Committee, commented in the report on the latest activity. “The manufacturing sector continued to grow during June; however, the rate of growth as indicated by the PMI slowed when compared to May. The lower reading for the PMI came from a slowing in the New Orders and Production Indexes. We are now 11 months into the manufacturing recovery, and given the robust nature of recent growth, it is not surprising that we would see a slower rate of growth at this time. The sector appears to be solidly entrenched in the recovery. Comments from the respondents remain generally positive, but expectations have been that the second half of the year will not be as strong in terms of the rate of growth, and June appears to validate that forecast.”

Pending home sales drop sharply

U.S. Pending Homes sales fell more than expected for the month of May as the government tax credit deadline expired in April, according to the monthly report produced by the National Association of Realtors. The NAR report showed that pending home sales contracts signed by buyers decreased by 30.0 percent in May following a 6.0 percent increase in April.

Market forecasters had expected the sales data would decline by 14.2 percent for the month. On an annual basis, the pending home sales level fell to 15.6 percent below the May 2009 level.

NAR chief economist Lawrence Yun commented in the report about the sales figures this month,”Consumers are rational and they rushed to meet the tax credit eligibility deadline in April. The sharp decline in contract signings in May is a natural result with similar low levels of sales activity anticipated in June.”

US jobless claims rise

U.S. weekly jobless claims increased by more than expected in the week that ended on June 26th, according to a release by the U.S. Labor Department today. New jobless claims rose by 13,000 workers to a total of 472,000 unemployed workers. The 4-week moving average of unemployed workers increased by 3,250 workers from the previous week to a total of 466,500.

Market forecasts were expecting jobless claims to total 460,000 workers following the prior week’s 457,000 claims.

Workers seeking continuing claims for unemployment benefits for the week ending June 19th also increased for the week. Continuing claims advanced by 43,000 workers to a total of 4,616,000 unemployed workers. The four week moving average of continuing claims dropped by 25,250 workers to a total of 4,567,500.

Nonfarm payrolls report

Tomorrow the market-moving government nonfarm payrolls report will be released at 12:30 GMT with market forecasters expecting a decline of 110,000 jobs for June. May’s payroll report showed an increase of 431,000 jobs although the great majority of those were temporary census government jobs and private payrolls added relatively few workers.

By CountingPips.com

The European common currency has surged higher in forex trading today against the US dollar and the other major currencies following the better than expected European Central Bank (ECB) lending program. The ECB announced today that it will lend 78 commercial banks a total of €111.2 billion for six days at a rate of 1 percent. Today was also the day that banks needed to repay the ECB €442 billion in 12-month loans from last year and the six-day loan results showed that many banks were in good position to repay their outstanding loans.

Today’s results were not as bad as many analysts had feared and quickly boosted the euro to higher levels against the dollar, Japanese yen, British pound, Swiss franc, New Zealand dollar, Australian dollar and the Canadian dollar.

The EUR/USD currency pair has touched a high point of 1.2474 so far in today’s forex market trading. This is the highest level the pair has reached since May 24th. The EUR/USD opened the day at 1.2228 and spiked sharply higher through many recent resistance levels on its way to almost 1.2500 and into overbought territory (RSI indicator) on the hourly time frame.

EUR/USD Hourly Chart

The forex market gives many advantages to investors. But we need to know where and how to start.

In the past, forex trading was extremely limited to few but large players such as the central banks, mega companies. In 1980’s the rule had changed, by allowing smaller investors to participate the foreign exchange using margin accounts. These accounts are the reasons why forex trading has become so popular. Using a 100:1 margin account, you can control $100,000 with a $1000 cash.

The Learning Curve

Learning Forex is not easy. Although it is easy to start trading, but to trade profitable, is another issue. Having some knowledge reduce the risk you involved. In this way, your trading decisions will become wise.

So as a beginner, we should learn and find out as much as we can about the market before we invest any amount.

Getting a Broker

Forex traders need a broker to handle their transactions. Most of the brokers are reputable and associated with banks or other large financial institutions. A forex broker will have to registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC). This serve as a protection against scams, fraud and other abusive trading practices.

Open an Account

Just fill up the form and give the necessary identification. The form includes a margin agreement which states that the forex broker may intervene with any trade that seems to be too risky. This is meant to protect the interests of the broker as most of the trades are carry out using the forex broker’s money.

Once your account has been created, you can start putting in money and trade.

Many brokers give different kinds of accounts to suit the needs of individual investors. Accounts like mini accounts allow you to trade forex for as little as $300. Standard accounts may have a minimum deposit of $1000 to $2500, depending on the broker. The amount of leverage also varies with the account type. Investors use leverage to profit from the fluctuations in exchange rates between two different countries’ currencies. The higher the leverage accounts are, the more money you will earn when you trade for a given investment. However likewise, these accounts can wipe your capital easily and fast if you do not trade properly.

All your trades are commission-free. There is no high brokerage fees you have to worry about when you make many trades. Brokers make their money on the pip spread, which is the difference between the bid and the ask prices.

Demo Trading

Everyone will advise to you that to get use to forex, you have to do a long period of time of demo trading. Brokers allow you to trade without any capital and practice your forex strategies through their demo accounts.

Beginners should use this chance to get used to their trading platform. Know how to use their software tools and navigate as much as possible. Every new forex traders should use these demo accounts until they are consistently making profits and go to an live account.

Read up

News, blogs, forums, books and many many more. Learn as much as you can from these free resources. Some brokers offer real-time quotes, news feeds, technical analyzes and tips to do well in your forex trading. Learning is one of the most important factor in forex trading. So never give up learning even though you are constantly making profits.

There are many different ways to make money. Forex trading is simply one of the best way to make good income. Just as long as you are prepare to learn, practice and never give up.

About the Author

Article courtesy of whizforex.com.