InvestMacro FX

By GCI Forex Research

Fundamental Outlook at 0800 GMT (EDT + 0400)

USD

The price action during the Asia session was subdued relative to the frenetic activity seen after Friday’s payrolls report, with USDJPY locked in a particularly tight range. However, the dollar did surrender some of Friday’s gains overnight. EURUSD traded 1.3547-1.3624, USDJPY 82.16-82.29. On Friday, the headline payrolls number only gained +36k in January, falling well short of consensus expectations for a +146k increase. But the market seemed content to attribute the weaker print to inclement weather, and focused instead on the lower unemployment rate which unexpectedly fell sharply to 9.0% (cons. 9.5%). In response, the US 10-year Treasury yield climbed significantly higher, and peaked just above 3.66%, reaching levels not seen since May 2010. The S&P 500 finished 0.29% ahead. Given the scale of the surprise, our US economists have lowered their end-2011 unemployment rate forecast, and now expect it to fall to 8.8%, instead of 9.0% previously. They also now see upside risks to their 4.2% forecast for Q1 GDP growth. These latest developments bode well for our view that the dollar is poised to become a growth currency. The long-awaited semi-annual Treasury report on International Economic and Exchange Rate Policies was finally published, having been delayed since October. No major trading partners of the US were deemed to have manipulated their currencies to gain “unfair competitive advantage in international trade”.
EUR

As expected at Friday’s EU Summit, no concrete decisions were taken regarding the future of Europe’s financial rescue mechanisms. EU Council President Von Rompuy pledged that a comprehensive package of anti-crisis measures would instead be adopted in March.
Germany’s Chancellor Merkel said a special summit of Eurozone-only states would be held at an unspecified date after March 9.
ECB Executive Board member Gonzalez-Paramo said that the ECB would have to hike rates if CPI inflation did not begin to drop again by year-end.
France’s Finance Minister Lagarde said Eurozone leaders are “politically determined to defend the zone and the currency”.
JPY

BoJ Governor Shirakawa said further asset buying could be conceivable if the performance of the domestic economy fails to match the BoJ’s forecasts. He also sounded cautious on Japan’s deteriorating fiscal position, noting that the lesson of history is that no country can continue to run a deficit forever. However he noted that JGB yields have been relatively stable, partly on the belief that Japan is determined to carry out the necessary fiscal consolidation.
AUD

December retail sales grew by only +0.2% m/m, falling well short of the consensus expectations of +0.5% m/m growth. The AUD was briefly hit on the numbers but soon steadied and spent the rest of the Asia session creeping higher. Our Australian economics team expects a soft print in January too, as sales are likely to be significantly hurt by the Queensland floods. Our economists continue to see the next lift in the cash rate in H2, probably in either August or September.
CAD

USDCAD fell sharply to a low of 0.9832 on Friday, reaching levels not seen since May 2008. A particularly strong employment report was the trigger for the move. In January, 69.2k new jobs were created, well above expectations of only a 15.0k gain. The unemployment rate unexpectedly rose to 7.8%, but a corresponding increase in the participation rate was largely to blame.

TECHNICAL OUTLOOK
USDJPY clears 81.31
EURUSD BULLISH Move above 1.3741 is required to refocus towards 1.3862 recent high while support lies at 1.3482.
USDJPY BEARISH Violation of 81.31 has exposed 80.93 ahead of 80.54. Resistance at 82.93.
GBPUSD BULLISH Push above 1.6279/99 resistance zone would expose 1.6379. Initial support is defined at 1.6037.
USDCHF NEUTRAL Rise above 0.9526 has exposed 0.9623, support is at 0.9451/0.9396 zone.
AUDUSD BULLISH Focus is towards 1.0256 key resistance. Support lies at 1.0083.
USDCAD BEARISH The pair targets 0.9832/20. Near term resistance at 0.9932.
EURCHF BULLISH Rise above 1.3069 would open up the way towards 1.3118. Support at 1.2781.
EURGBP NEUTRAL 0.8533 and 0.8377 mark the near term directional triggers.
EURJPY NEUTRAL Remains neutral; 112.92 and 110.32 mark the near term resistance and support level respectively.

Forex Daily Market Commentary provided by GCI Financial Ltd.

GCI Financial Ltd (”GCI”) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (”Forex”) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (”CFDs”) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.

DISCLAIMER: GCI’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.

By Anton Eljwizat

The EUR has dropped significantly versus the CAD in the last week, and it is currently traded around 1.3440. And now as evident in the data, the 8-hour chart is giving bullish signals, indicating that EUR/CAD pair might go up, as a bullish cross has taken place on the Slow Stochastic and the cross may raise another 50-100 pips in the coming 2 days. Traders are strongly advised to take advantage of the trend at an early stage. Therefore, why not open long positions at an excellent price?

• The next resistance levels are found at the 1.3470, 1.3500 and 1.3530 levels.

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 Greg Holden

Expectations this week for the world’s primary currency pair, the EUR/USD, may be summed up by viewing the daily chart’s technical formation. Beginning with last year’s record low price of 1.1875, this pair has been developing a long-term, upward angled, “head-and-shoulders” candlestick formation.

As this formation appears to have finalized over the last few trading days, can we now expect a long-term retracement back towards the 38.2% Fibonacci support line at 1.3034?

If you look at the chart below, it is possible to see supporting indicators of such a move. The MACD/OsMA reveals a clear bearish cross near the 0.0100 level, typically a solid indication of an impending downward turn.

The Relative Strength Index (RSI) and Stochastic (slow) also show a sharp cascading price movement, suggesting added momentum to last week’s bearishness.

What is worth noting, however, is the speed of the descent being experienced in these latter two indicators. This movement will likely see both indicators reaching the over-sold territory rapidly, adding upward pressure to this downward correction and potentially halting the long-term retracement expected from the head-and-shoulders formation.

If we are to understand this expected technical move, we may be better off breaking it into two phases. The first phase may see the price of the EUR/USD descending to the 50% Fibonacci level at 1.3391, at which point it is going to meet strong support. This phase should see some range-trading behavior between 1.3390 and 1.3500 over the course of several days as major investors test the resolve of the head-and-shoulders pattern.

If the bears can outbid the bulls during this first phase, then we should see the head-and-shoulders formation continue for the next few weeks as the price retraces towards the neckline (highlighted on the chart below). The 38.2% Fibonacci support level represents the long-term target of this pair. But short-term traders should keep their trades focused on the first phase, which will no doubt be shakier than the second.

EUR/USD Daily 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.

Source: ForexYard

The dollar was up versus the major currencies following disappointing non-farm payrolls numbers, highlighting the difficulties the Federal Reserve faces in reducing US unemployment.

Economic News

USD – Non-Farm Payrolls Sends Dollar Higher

Disappointing employment data released on Friday sent the dollar higher versus the major currencies as the report from the Labor Department showed a significantly less than expected number of jobs were added to the US economy in the month of January.

Traders were buying dollars as the less than forecasted job numbers did not support expectations of an improving US economy and employment picture. The Bureau of Labor Statistics reported US added 36K new jobs in the month of January. However, economists forecasted payrolls to come in at 138K.

Following Friday’s report, the Federal Reserve is expected to complete its $600 billion quantitative easing program. Despite a strong rally in equities this week with the S&P 500 rising 0.29%, traders were rumored to be hesitant of holding risky positions over the weekend with protests continuing in Egypt which may have contributed to the dollar buying as traders took profits on short dollar positions.

While it may be premature to call a top in the euro’s recent rally, the failure of the pair to move above the 1.3860 combined with falling momentum point to further declines in the pair. Support will be found at the 1.3540 mark, not far from the 100-day moving average. A natural target for the decline may be 1.3480 which is the 38.2% Fib retracement from this year’s bullish move. This level looks to be bolstered as it coincides with the mid-December high. Should the pair continue to fall, the next target would be the 61.8% Fib at 1.3250.

EUR – Debate Rages at EU Summit

European Union leaders disagreed over this weekend’s EU summit after a proposed plan by Germany to increase the competiveness of EU nations on the periphery ran into a roadblock.

In exchange for increasing the European Financial Stability Facility (EFSF), Germany proposed increasing the retirement age in the euro zone, ending the indexing of wages to inflation, and synthesizing taxes at both the individual and corporate level across EU member nations.

As expected, many of the periphery nations disagreed with the proposals that were supported by both Germany and France as the proposed legislative additions to the EFSF goes against many of the social welfare principals that the EU nation’s governments are built upon. Harsh criticism was received from Spain, Portugal, and Austria.

The disagreement among EU members headlines the risk in the euro as the European debt crisis remains largely unresolved. However, traders have been willing to look beyond Europe’s fiscal difficulties and a lack of a political solution while focusing on rising interest rate differentials between Europe and the rest of the developed nations that are still carrying out dovish monetary policies.

JPY – Yen Sells-Off On US Jobs Report

Following the US Non-Farm Payrolls report, the yen was immediately bought versus the dollar with the USD/JPY falling to its lowest level in one month. However, shortly after the data release the pair came off of its lows to trade as high as 82.45, squeezing many traders who were short on the pair.

As the pair sold off earlier in the session, the USD/JPY reached the bottom channel line of the downtrend and reversed its direction a full 180 degrees. A move below the channel line will target the 2011 low of 80.90. Resistance is found in a range between the early December low of 82.30 and Friday’s high of 82.50. Further resistance is located at the falling trend line off of this year’s highs. The levels of 83.70 and 84.50 also stand out.

Oil – Crude Declines Sharply After Payrolls Data

Spot crude oil prices continued their decline following a failure of the commodity to breach above the $93 resistance level after unrest in Egypt sparked fears of supply disruptions in the Middle East.

On Friday the price of spot crude oil fell to its lowest level since January. The declines came after the release of disappointing US Non-Farm Payrolls report presented a bleaker picture than expected. After the release of the employment data traders sold spot crude oil with the price falling to a low of $88.40.

Crude prices may continue to ease should tensions in the Middle East subside. However, a natural gas pipeline that carries gas from Egypt to Jordan was sabotaged and the pipeline remains closed until repairs can be completed.

Support for spot crude oil comes in at the 86.50-87.00 range. Resistance is located at this year’s high of $93.00.

Technical News

EUR/USD

While it may be premature to call a top in the euro’s recent rally, the failure of the pair to move above the 1.3860 combined with falling momentum point to further declines in the pair. Support will be found at the 1.3540 mark, not far from the 100-day moving average. A natural target for the decline may be 1.3480 which is the 38.2% Fib retracement from this year’s bullish move. This level looks to be bolstered as it coincides with the mid-December high. Should the pair continue to fall, the next target would be the 61.8% Fib at 1.3250.

GBP/USD

The failure of the GBP/USD to close above the downward sloping trend line on the weekly chart does not bode well for the pair. However, the daily chart shows the pair found support at the 1.6040 level. The rising short term trend line from the late January lows should also prove supportive. A breach below this could take the pair to the late January pivot at 1.5750. Resistance will be the 2011 high at 1.6280.

USD/JPY

The pair reached the bottom channel line of the downtrend and reversed its direction a full 180 degrees. A move below the channel line will target the 2011 low of 80.90. Resistance will be found in a range between the early December low of 82.30 and Friday’s high of 82.50. Further resistance is located at the falling trend line off of this year’s highs. The levels of 83.70 and 84.50 also stand out.

USD/CHF

The Swissie has come off its 2011 high and the USD/CHF and is currently pressing the 0.9590 level that coincides with a long term trend line which falls from the May 2010 high. A breach of the trend line next week will first target 0.9690, followed by 0.9780. Should the pair fall in-line with the long term trend line this week’s low of 0.9320 will be in play.

The Wild Card

Silver

Spot silver prices have recovered from a 15% decline since reaching an all-time high at $31.20. Forex traders should be looking at an initial resistance near the $29.50 level. A breach of this resistance and the commodity may head higher to the all-time high once again. Support comes in at $28 and $26.40.

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 James McKee

From bakers to lawyers to everything in-between, everyone needs oil. The rise and fall in the price of oil not only affects the price of gasoline but the price of transporting goods, to that end it increases the cost of everything. No good can be moved without factoring in the cost of gasoline and thus the cost of crude oil. With the price of oil topping $103.00 a barrel there are looming changes due throughout all western countries. Prices in the United States are sure to rise causing a decrease in purchases and an increase in scarcity as companies begin to match production to purchases.

The USD will suffer due to an increase in prices occurring at the same as rampant inflation in the US brought on by moves at the Federal Reserve Bank. The recent round of quantitative easing has served to prop up the stock market and thus the USD but in time inflation will take hold. Much of the price increases have been a direct result of the conflict in Egypt that does not show any sign of slowing down. The fact that President Obama is showing support to both revolutionaries and those currently in power does serve US foreign relations well.

Those involved with the Forex currency exchange should stay up to date on both the price of oil and the conflict currently going on in Egypt. Chances are that in the near future Egypt will see even more violence since the current regime’s supporters are taking to the streets violently. Reports of Molotov cocktails being hurled at protestors are commonplace and it is only a matter of time before both sides become increasingly violent. While the stock market just begins to recover from the initial shock of the Egypt conflict it is far from over and Syria is degenerating into a similar state.

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 forex exchange rates regularly.

By James Woolley

There are many people out there who invest their own money into the stock market. However a lot of these people will ultimately lose money and end up handing over control to a fund manager. The main reason why people fail is simply because they do not have the patience to wait for the very best entry and exit points.

There are plenty of examples of this. First of all there are often occasions when you do some research and you suddenly find a stock that looks hugely undervalued. Now some people will then rush out and buy the stock regardless of it’s current price. They may get lucky and the price may continue rising, but in most instances they would have been better off waiting for the stock to be temporarily oversold, for example when the RSI technical indicator is below 30.

Another example of a poor investing technique is when an investor will find a decent stock that goes up in value, but sells far too early. For example you may have set a target of 20%, which you think is perfectly realistic in the next few years, but you are so happy to see a profit you sell your holding after it has risen just 5%.

Lots of investors sell too early, and one of the common reasons why they do so is if they are fully invested and want to free up some cash so they can invest in another stock. This is a good tactic if you have money tied up in stocks that are simply going nowhere, or falling slightly, but it is quite a risky strategy if you sell stocks that are already performing strongly themselves.

Another area in which investors can come unstuck is when they use technical analysis to time their entry and exit points. For instance if you are a long-term investor, you have to try and ignore technical indicators because they will often tell you a stock is overbought, and therefore encourage you to sell. This is fine if you are trading in and out of stocks all the time, but if you want to hold on for the really big gains, you have to ignore them and think about where the share price will be in a couple of years time.

If you are a short or medium-term investor you can also come unstuck if you ignore your technical indicators. For example if you are trading breakouts, it is imperative that you wait for confirmation of an actual breakout, rather than anticipating a breakout in the hope of getting in at a better price. If you don’t, you will have invested in stocks right at the top of the market.

So the message I want to get across is that you have to have a great deal of patience if you want to be a successful stock market investor. You only have to look at Warren Buffett for evidence of this. He holds on to stocks for years and years and he is one of the greatest investors of all time.

About the Author

Click here to read a review of Stock Trading Nitty Gritty, the new training course that teaches you how to successfully trade individual stocks.

By Cedric Welsch

Just like in anything you do in life, you always need something that will help guide you in your walk, something that will remind you which is right or wrong, and something that will assist you to walk constantly in the right direction. Well, forex trading signals serve as some sort of guiding patterns that will help direct any trader when performing his or her trading transactions. These signals are designed to constantly alert the trader while performing some specific tasks.

A trader can create his own forex trading signals based on the parameters and limits that he wants to abide with. These signals will tell you if you are still operating safely under the terms of your own set limits. Trading without the use of these signals can easily result in chaos for a trader. With nothing to alert you, it is easily possible for your investment transactions to crisscross with one another. In other words, an entire mess of trading activity could occur since there is nothing to alert you when things are out of order.

The entire forex market is a busy place where traders are busy either buying or selling currencies. Since the currency trading market is well known for its extreme volatility of nature, you need to be very careful during those moments when you’re either buying or selling currencies. And forex trading signals are simply excellent in helping you protect your investments during your currency buying and selling moments.

The ultimate benefit of a forex trading signal for a trader is to have the luxury of time and freedom to do some other important stuff while the trading market is actively doing its own thing. Without a trading signal, you would have to sit and be glued at just watching the market trending as it goes up and down continuously. Who would want to do such a thing? Aside from the time you are losing, the frustration that you may get while watching currency rate values fluctuate in a rigorous manner just isn’t at all worth while. This explains how superbly valuable forex trading signals can be for traders like you.

With the help of a forex trading signal, you can preset your buying or selling transaction to activate, dependent upon when certain currencies match the specific value you set for them. You can just imagine how convenient this entire process can be for you. Instead of waiting for those currencies to match the exact values you want of them, you can just let the trading signal do its job for you.

About the Author

Live forex news can be easily availed of today as well as the important forex broker reviews to keep you safe from wrong decisions.

By Ben McArthur

New Forex traders are overwhelmed with information about how to make money trading. Every day a new system or software comes out that is supposedly better than anything else available. With millions of webpages about Forex trading all promising obscene profits, how can a new trader decide what is best for them?

If you visit some of the many Forex forums online you are more than likely hearing claims about the newest and best trading system or software that just came out. How this or that trading system is a guaranteed way to get rich in the markets. How this new software or trading system that has never had a losing trade, etc.

Many traders spend countless hours,and dollars,trying and buying every new product that makes these kinds of ridiculous claims. They believe that one day one of these magic black box systems or software will really make trading completely automatic and literally hands off. This kind of thinking has caused many traders to blow their entire trading account time after time. It is a vicious cycle that never seems to end.

There is no magic black box that you can plug in and watch your account grow to insane proportions. No trading system or software exists that will work in any market under any condition. The markets are just far too complex and sophisticated for that.

New traders, and even more experienced traders for that matter, can make consistent profits if they will learn how to interpret price action. Price action is what experienced traders use to forecast what the market is going to do before it actually does it.

If that doesn’t make sense to you now, try studying the price bars of your favorite pairs on your charts. You will soon learn
that repeated price action “set-ups” are a frequent occurrence. These set-ups are confirmed when the proper real-time indicators are used in conjunction with this method.

Using the correct indicators are critical to success in Forex trading. Some indicators are just too slow to be used as a reliable trading signal. MACD, RSI, and stochastics simply lag too far behind to be of any help.

Using price movement in conjunction with reliable indicators is one of the most reliable and accurate ways to trade Forex profitably. Many traders simply make trading far more complicated than it should be. A simple but effective trading strategy is your best way to make consistent profits.

Visit the author’s website for more forex secrets

About the Author

Learn more about Forex and forex trading secrets at the author’s website.

By James McKee

Egypt’s turmoil continues as hundreds of thousands of protestors line the streets demanding an end to the current ruling party and its members. There have been a large number of homicides and property damage is incalculable at the moment. The hardest hit of all currencies was the US Dollar that dropped over one percent. Conditions do not seem to be improving at all in Egypt and on the contrary seem to be worsening as time goes on. The Egyptian people after having been starved more often than not for the past couple decades have stated loud and clear that they have had enough.

Conflict and social strife have never been good for business and since the world has taken on a global economy any ripples in western or developing countries has an adverse effect on everyone. This is a necessary evil that is coming up more and more as the world’s economy continues to degenerate into a mess of epic proportions. The first and last word on the subject of the US Dollar currently would be “rollercoaster”, many emerging US companies such as Facebook are poised to make a heavy entrance into the stock market. This spells out some long-needed prosperity for the US market as other companies find themselves faltering.

Such events do little however to stem the tide of ill-fated countries falling by the wayside. Tunisia, Egypt and possibly Syria are all teetering on the edge and they are not alone. Staying up to date on any world events in developing nations is very important in the Forex currency exchange. Reading the newspaper is more than an academic effort to stay informed, it is a business tool to be used in an effort to gauge the changing markets. It is indeed possible that the conflict in Egypt will have many more ups and downs in the coming weeks and they are something all traders should stay aware of.

About the Author

The author’s love of life is ultimately rooted in his drive to learn forex

By James Woolley

The reason why a lot of people sign up to the various different forex affiliate programs is because they know that they can potentially make a lot of money. However signing up is the easy part. The difficult part is getting your offers in front of enough people to start generating some affiliate commissions.

The fact is that most people go about it the wrong way. For example if they have some cash behind them, they may head straight to Google, or one of the other search engines, and start paying for pay-per-click advertising.

It is an automatic assumption to make that because a lot of products can cost several thousand dollars, it should be easy to cover your expenses. However this is rarely the case because people need a great deal of convincing before they part with such a large sum of money. Furthermore even if you do generate some sales and it looks as if you will be able to cover your costs, you may find that the product is then refunded at a later date, and you are back in the red again.

This is all too common in the forex niche. Whilst there are a few really good products and services being sold online, the vast majority of them are not that great if I’m being totally honest.

There is a much better way to make profits as an affiliate and that’s to build your own website or blog, and start building an email list at the earliest opportunity. That way you have two opportunities to make sales.

First of all you can write product reviews for all of the major products that are released, asking for review copies from the product creator if necessary. If you do some basic SEO work, you can then get plenty of free traffic from the search engines and start generating sales that way.

You can also sign up to an autoresponder service and start building an email list on this same website or blog. That way you can gradually add new people to your list every day, and start sending email messages to each subscriber whenever a major new product is released.

This is particularly beneficial because that way you can build up a degree of trust and respect. So when you do actually recommend a product (which you have truly found to be very good), you will generate a lot more sales because they will trust your judgement.

So the point is that if you are struggling to make sales in the forex niche, you should concentrate on creating a good quality website or blog and building an email list through that site. If you take a look at all of the super affiliates in this niche, you will notice that they all have their own email list of subscribers. So this is absolutely imperative if you want to become a highly successful affiliate yourself.

About the Author

James Woolley is both a forex trader and an affiliate marketer. Click here to discover which forex trading affiliate programs he most recommends.