Month: July 2012

Article by Investment U

In focus this week: how 3D printing will change manufacturing, a quiet tech company with a huge new market and the SITFA

3D printing will change how almost all manufacturing is done and alter the supply chain for many industries. Industries that make things as big as airplanes will be able to make parts as big as wings without cutting or bending any metal.

According to the Journal, the car parts business will make parts from their digital library and have no inventory. It will store all of its parts in digital form and make them as they are needed on site. Star Trek in our lifetime.

The CEO of 3D Systems Corp., a manufacturer of 3D printers, said in the article that printers cost as little as $500 and up to $1.5 million, can be placed anywhere and will eliminate the need for shipping and warehousing in most industries. That will reshape business as we know it and will create too many cost savings for this to not be a massive industry.

Military applications will allow replacement parts to be made in the field and will drive this market in its early years.

It will be a huge advantage for entrepreneurs who can manufacture ideas without the cost of a facility or distant manufacturing firms.

According to the Journal, EU companies, Arcam (STO: ARCM) and SK, are leading the business in printers for small metal objects, and Asian companies are in on the game, as well.

GE is using 3D printers for ultra sound applications, Pratt and Whitney for compressor blades and Honeywell for heat exchangers.

Boeing is using it to make 300 parts for its aircraft.

This industry is in its infancy, there are still issues about affordable raw materials, but it will drive almost all manufacturing in the future and it must be a part of every portfolio.

 A Quiet Tech Giant

NCR is the world’s leading supplier of ATMs. I don’t know about you, but I don’t know how we lived before them.

This isn’t a leading edge technology play, but it’s in virtually every bank, mall, hotel and street corner, and according to the Barron’s they pay for themselves quickly.

According to Barron’s, NCR is the play because of their ability to deliver real cost savings in a number of markets and they’re the technological leader in the business. NCR currently derives half of its profits in North America and the rest in Asia, the EU and Latin America.

They’re looking at compounded annual growth going forward of 15% to 20% and recently upped their EPS forecast.

According to the Barron’s article, NCR has 50,000 ATMs in banks in just the U.S. and has a new market of another 175,000 more in smaller regional and local banks, and ATM growth in Asia and South America is expected to be explosive

RBC has a $28 target on the stock and projections put the price at $59 per share from its current $23.

The company also has big growth opportunities in self-check out applications in food markets and in the emerging market of travel for self-check out at airports and rental cars kiosks.

Most of the areas NCR has dominance in are in their infancy and NCR will, as it always has, work its way into all of them and stay on top.

This is hardly a state-of-the-art play, but it’s one with a huge market that’s constantly growing.

Finally, the SITFA

This week it goes to all those engineers out there who have been killing themselves trying to beat car thieves with new gadgets that are supposed to make it harder to steal cars.

The problem, thieves adapt.

Despite advances with coding access, touch starts, break away gear shifts and steering columns to prevent forcing a car into gear, thieves are doing a good job of keeping up with any technological advances.

Manufacturers have made headway with some of the newer designs; on-board GPS to track thieves, electronic keys that know their owners, electromechanical steering columns. But thieves still got $4.5 billion worth of cars last year.

Car thieves’ answer to all these devices designed to stop them. Forget about it, now they just use a tow truck and take your car where they can dismantle all the prevention devices.

Stranger yet, the most-stolen car, 1994 Honda Accord. Nobody ever said car thieves were discerning. Slick, but not discerning.

Article by Investment U

Article by Investment U

Many experts, analysts and pundits are trying to take on the massive task of summarizing the entire Supreme Court’s decision on the Affordable Care Act in about 500 words or less.

This approach doesn’t work. In our evolving 24/7 news cycle, it’s a necessity to churn something out even if it isn’t fully vetted. Most knee-jerk reactions were a response to which side of the fence you practiced and preached your politics. Either Obamacare will bring healthcare to the downtrodden in this country or it’s the beginning of the European socialist revolution.

It’s neither. It’s just the law of the land at the moment. Our country’s history is fraught with laws passed that were thought to be the spark of the Apocalypse. Laws have come and gone and we are still here. Now those who take the practical approach to a changing political backdrop are those who in the end profit from those changes. Healthcare reform is here. What we need to do is look at it as it all comes to light and a better understanding, and then act accordingly.

A few days ago, I wrote a piece on the new investment tax that’s derived from this legislation. Depending on your income and investment structures, you may need to protect your assets. Now, I see another aspect of the law that will have a profound effect on the healthcare industry and may provide investment opportunities going forward.

How the ACA Affects the Medicaid/Medicare Businesses

As we know, the individual mandate was ruled constitutional. However, the Court did limit Medicaid expansion by limiting the federal government’s power to put an end to states’ funding.

The court also ruled that the federal government can’t punish states that don’t comply with the Affordable Care Act’s purpose of expanding Medicaid coverage. So there will be no withholding of funds to those Red States who oppose the law down to the core of their Governor’s souls (insert Rick Scott and Rick Perry). States have the ability to expand coverage, but they can’t be forced to.

Why does this matter? It shakes up the landscape of the industry, which the markets have shown since day one of the ruling. It’s a negative for major health insurance companies, but a positive for Medicaid companies.

Private Sector Growth in Healthcare Will Get Worse

Here’s the situation with the major managed care health providers – such as UnitedHealth (NYSE: UNH), WellPoint (NYSE: WLP), Aetna (NYSE: AET), Cigna (NYSE: CI) and Humana (NYSE: HUM). When you look at their quarterly earnings reports, you see all the growth is coming from public programs like Medicare and Medicaid. The private sector business is lagging and not seen as very profitable any more.

Many people thought healthcare reform would be a boom to the entire industry. However, when you actually look at the law, that assumption proves not to be true. Even though an individual mandate brings in millions of new users, insurers will have a hard time expanding their bottom lines.

Look at what they will no longer be able to do:

• No longer will an insurer be able to deny coverage to citizens because they have pre-existing conditions.
• Insurers will be required to spend at least 80% of patients’ premiums on medical care. If they do not, the law requires them to send rebate checks to those people.
• The majority of insurers spend a lot more than 20% on administrative expenses, which will cause some serious belt-tightening in regards to expensing.
• The law will make it very difficult for insurers to frivolously raise prices.

Upholding “Obamacare” means that there is now an earnings cap on this sector. This, however, doesn’t mean that the industry is done.

Where’s the Growth?

Before the ruling, the managed care heavyweights saw all their growth coming from the public sector. Let’s take a look at the numbers of the two biggest players in the market.

UnitedHealth and WellPoint each claim around 34 million members and have now become major players in Medicare by means of their Medicare Advantage and Medicare supplement plans, and Medicaid. Last year, UnitedHealth’s public sector membership went up nearly 7% in contrast to their private sector membership, which increased a little over 4%.

WellPoint’s growth in the public sector one-upped them. Their Medicare enrollment was up around 17% in 2011while Medicaid enrollment grew 6.3%.

Insurers specializing in Medicaid plans for low-income persons and families, such as Amerigroup (NYSE: AGP) and Molina Healthcare Inc. (NYSE: MOH), have gained the most. This is due mainly to the expansion of Medicaid eligibility in the states.

And as soon as the ruling was announced, Medicaid companies saw a relief rally because Chief Justice Roberts stated that the federal government’s ability to cut funding for Medicaid programs was limited by the law.

Where Does the Industry Go From Here?

One word sums up what’s likely on the way for the healthcare insurance industry: “consolidation.” On July 9, WellPoint said it would buy Amerigroup for $4.9 billion. That deal has been the catalyst for a whole lot of speculation concerning the other managed care heavyweights like Humana, Cigna, Aetna and UnitedHealth, that they’re now in the market for other Medicaid/Medicare providers due to the ACA ruling.

WellPoint’s deal came at a 43% premium. However, it’ll give the provider 4.5 million new state-sponsored healthcare accounts, and also contribute some dual eligible managed care customers. The move will add to WellPoint’s 65 million-plus healthcare customers.

Who’s next? Look for the likes of other Medicaid/Medicare providers like Molina Healthcare, Centene (NYSE: CNC) and WellCare (NYSE: WCG) to be considered as possible purchasing targets. As of last week, these equities were up over 15% on rumors that they’re next on the list to be bought.

The big boys now see where the market is headed and are looking to buy them a piece of the pie.

Good Investing,

Jason

Article by Investment U

Article by Investment U

It’s delicious. It’s healthful. It’s profitable, too. Isn’t it time you found a way to play the new bull market in chocolate?

On Tuesday, Swiss confectioner Barry Callebaut AG won the backing of the European Food Safety Authority for its claim that cocoa flavanols, the compounds found in dark chocolate, are good for blood circulation. The company has carried out more than 20 clinical studies since 2005, looking at effects of products made with a special process it developed that preserves up to 80% of flavanols.

While the request to use the health claim still awaits approval from the European Commission, the food agency’s blessing indicates that chocolate makers are likely to see an uptick in business as they offer new health claims on product labels.

Not that the industry was hurting before…

Chocolate is a $60 billion global industry today. The average American consumes 12 pounds of chocolate per year (58 million pounds are sold around Valentine’s Day alone). And the Swiss, Austrians, Germans, Irish, British, Norwegians, Danes, Belgians, Swedes and Australians all eat more than we do.

The confection has a long and storied history. Mesoamericans first cultivated cacao beans more than three thousand years ago. The Mayans made it into a sacred drink, offered it in tribute to kings, and placed it in the tombs of the nobility so they could savor it in the afterlife.

Common folk enjoyed it, too. Five hundred years ago, Spanish historian Oviedo y Valdes wrote, “It is the habit among Central American Indians to rub each other all over with pulpy cocoa mass and then nibble at each other.” (No word about the resulting population explosion.)

By the time Columbus arrived, cacao beans were the coin of the realm.  And it wasn’t long before Europeans back home were clamoring for it

The Healthy Side of Chocolate

But it isn’t just tasty. A 2006 Johns Hopkins study showed that eating a little bit every day is good for your health. Cacao helps the body process nitric oxide, a compound for healthy blood flow and blood pressure. It contains antibacterial agents that fight tooth decay. The cocoa butter in chocolate contains oleic acid, a mono-unsaturated fat that raises good cholesterol. Chocolate also contains phenyl ethylamine (a mild mood elevator) and flavonoids keep blood vessels elastic. Studies show that eating a little bit of chocolate once a week can reduce your risk of stroke by 25% to 45%.

Cacao is a storehouse of natural minerals. It’s a source of copper in our diet and an antioxidant on the order of green tea, protecting against heart disease and helping alleviate stress. Dark chocolate is rich in polyphenols, as is red wine. Chocolate can provide an energy boost, too. It’s an easy way to fuel up before, and during, intense activity.

Now that the chocolate industry can translate these health claims into greater profits, how do you play it?

Good, Better, Best…

You could buy Swiss giant Nestle (OTC: NSRGY.PK), but this is actually the world’s largest food company. So the effect of higher chocolate sales could easily be diluted by soft sales in other sectors.

A better way is the Hershey Company (NYSE: HSY). The Pennsylvania-based candy company is already bumping up against its 52-week high. And no wonder. In the recent quarter, earnings jumped 24% on an 11% increase in sales. I estimate Hershey will earn $3.25 this year and about 20% more next year. You’ll earn a 2.1% dividend yield here, too.

But perhaps the purest play is Barry Callebaut AG (OTC: BYCBF.PK). The Swiss confectioner is the world’s largest chocolate manufacturer, with a $4.5-billion market cap and operations that span the globe. In last year’s second half, the company reported a 20% increase in net income on a 7.2% increase in sales volume.

Today the stock is trading near the low end of its range. But thanks to new health and marketing claims, business should pick up in the months ahead. That makes chocolate – and companies like this that sell it – a pretty sweet opportunity.

Good Investing,

Alex

Article by Investment U

Forex Daily review brought to you by REAL FOREX | www.Real-forex.com

 

 

 

AUD/USD

 

Date: 25.07.2012   Time: 17:02 Rate: 1.0276

4 Hour chart

Last Review

The price has corrected the last downtrend (red broken line) and from this point it is possible that we will see a breaking of the 1.0251 price level which will probably lead the price at first stage to the 1.0232 price level which is a 61.8% Fibonacci correction level of the uptrend marked in blue broken line, breaking this level will probably lead the price to the closest support on the 1.0202 price level. On the other hand, only breaching of the 1.0326 resistance level in a proven way might lead the price to check the last peak on the 1.0444 price level.

 

Current review for today

The price has continued its way downwards to the 1.0202 price level as it was written on yesterday’s review, while its stoppage at this area led the price to an ascending move and 50% technical correction of the last descending move (red broken line). Another breaking of the 1.0202 price level will indicate that it is possible to see the price reaching the last low on the 1.0100 price level again. On the other hand, breaching of the 1.0326 resistance level in a proven way will indicate that the price will probably check the last peak on the 1.0444 price level again.

 

You can see the chart below:

Source: ForexYard

The euro saw gains in overnight trading following positive comments from an official at the European Central Bank. That being said, most analysts said that any bullish movement by the common-currency is likely to be temporary, as rising Spanish bond yields continue to weigh down on the euro-zone economic recovery. Gold was able to extend yesterday’s bullish trend, and is still trading well above the psychologically significant $1600 an ounce level.

Main News for Today

US Core Durable Goods Orders- 12:30 GMT
• Forecasted to come in at 0.1%, well below last month’s 0.7%
• If true, the dollar could extend its recent losses against the JPY

US Unemployment Claims- 12:30 GMT
• Last week’s unemployment claims came in significantly higher than expected, resulting in dollar losses
• If today’s news comes in above the expected 381K, the dollar could see losses against its main rivals

US Pending Home Sales- 14:00 GMT
• Forecasted to come in at 0.6% , well below last month’s 5.9%
• If true, investors may take the news as a sign that the US economic recovery is slowing down, and could result in additional dollar losses in afternoon trading

Read more forex news on our forex blog

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 MoneyMorning.com.au

‘[John Williams, President, Federal Reserve Bank of San Francisco] added that there would be benefits in having an open-ended programme of QE…The main benefit from my point of view is it will get the markets to stop focusing on the terminal date [when a programme of purchases ends] and also focusing on, “Oh, are they going to do QE?” he said. Instead, markets would adjust their expectation of Fed purchases as economic conditions changed.’

‘European Central Bank council member Ewald Nowotny said there are arguments in favour of giving Europe’s rescue fund a banking license…Granting a banking license to Europe’s permanent bailout fund, the European Stability Mechanism, would give it access to ECB lending, easing concerns that its 500 billion-euro ($602.5 billion) cash pot won’t be enough if Spain or Italy require aid.’

‘Reserve Bank governor Glenn Stevens says Australian governments are enjoying their lowest borrowing rates in more than a century, sparking debate about whether the Commonwealth should exploit the cheap cash and go into deficit to fund infrastructure projects.’

Something isn’t right in the world. And it’s playing havoc with your investments.

We’ll call out these acts of interest rate manipulation for what they are: crimes against humanity.

We’ll explain why below…

It’s the institutionalised plundering of the savings of private investors…taken indirectly by the State in order to preserve the excesses and corruption of the Welfare State.

The aim is for the government to get its money for nothing, while crippling your savings and those of other investors.

But in typical mainstream style, those cheering on the government just don’t understand the harm caused by fiddling with interest rates.

The following quote appeared in today’s Age from Deloitte Access Economics’ Chris Richardson:

‘On the Commonwealth side, you have real yields currently for 2020 at 20 basis points. So, in a sense, if you take inflation out, the government’s almost getting interest-free money, which is a great result for the Australian government, and that’s obviously also a good result for the taxpayer.’

Not so. It’s a terrible result for the taxpayer…

Why Low Interest Rates —
are Bad for Savers and Taxpayers

Low interest rates (free money) encourage the government to put the taxpayer on the hook for more than it otherwise would if interest rates were higher.

Not only that, but it’s only free money in that the government pays next to no interest for borrowing it.

But it’s not free to the taxpayer, because whoever the government borrows from will expect to get their money back. And because the government doesn’t generate its own revenue and profits, it can only repay the lender by borrowing more money (kicking the can down the road), or taking more money from taxpayer pockets.

So we’re not quite sure how that is ‘a good result for the taxpayer.’

And as Henry Hazlitt writes in Man vs The State, whenever the government expropriates money from the private sector, it will always use it for grandiose and wasteful projects.

By contrast, if left to the private investor, things would be different. Private investors would be worried about how their money is spent. As Hazlitt notes:

‘Private investors, for example, might lend more freely for toll roads and bridges, and similar projects that promised to be self-liquidating, than for those that yielded no monetary return.’

That’s not to say that all private investors and entrepreneurs get everything right. The point is, if a project is a dud (such as a toll road no-one uses), then the entrepreneur and his or her investors lose out. But those who didn’t want the project haven’t suffered or lost anything.

Those who crave government spending on wasteful infrastructure follies often forget the reality that infrastructure isn’t only expensive to build, but it’s expensive to maintain, too.

It’s one thing to put the taxpayer on the hook for a fancy road while interest rates are low, but what about the ongoing expenditure to finance this unnecessary folly?

Interest Rates and the Art of Land Speculation

That’s why governments worldwide come up with ever more elaborate schemes to pay for these things. In yesterday’s Money Morning we mentioned the call to use tax increment financing (TIF) for a new Melbourne rail line.

We revealed TIF for what it was — a fancy way of spending tomorrow’s money today, backed by the ancient art of land speculation.

And once a government starts spending not just today’s tax dollars, but also borrowing in advance of tomorrow’s tax dollars, it’s a slippery slope of no return. As Hazlitt observed of Uruguay in the 1960s:

‘Uruguay’s warning to the United States, and to the world, is that governmental welfarism, with its ever-increasing army of pensioners and other beneficiaries, is fatally easy to launch and fatally easy to extend, but almost impossible to bring to a halt — and quite impossible politically to reverse, no matter how obvious and catastrophic its consequences become. It leads to runaway inflation, to state bankruptcy, to political disorder and disintegration, and finally to repressive dictatorship. Yet no country ever seems to learn from the example of another.’

There’s a simple reason countries don’t learn — nationalistic bias and cheerleading.

The old, ‘we’re different’…’it couldn’t happen here’ mentality.

You’ll remember that from the Australian housing debate. It didn’t take long for those arguments to shatter.

But even when there’s proof a country isn’t different and that it did happen here, the mainstream still cheers for those in power. The belief that despite the evidence, our central bankers, bureaucrats and politicians are smarter than everyone else’s.

See the way the mainstream press and certain commentators hang on every word uttered by the RBA governor and his minions. Feel the anticipation in the media as Budget night approaches…awaiting the next one-year central plan.

It’s clear that a certain type of people want to be led. They can’t and won’t think for themselves. And they urge the government to take their money to spend as the government sees fit.

And because they’re unable to think, they demand that others shouldn’t think either. And that the government should take the money of the thinkers along with that of the non-thinkers. Because, well, it’s only fair that everyone contributes.

But after all the fiddling and the theft of personal wealth, one day they’ll realise the damage they’ve caused…

Prepare for an Extreme Shock to Interest Rates —
and Your Investments

Eventually, low interest rates lead to trouble in the future…when they begin to rise (look at Europe). You can see in the following chart from The Economist that artificially low interest rates can cause an extreme economic shock when they eventually revert to their natural level:

Click to enlarge

US interest rates are at their lowest in over a century. And Spanish and Italian interest rates have soared after being held artificially low for too long.

So high interest rates in Australia and even in the US are inevitable.

That’s why it’s important to do all you can now to protect and grow your wealth. It’s certainly not too late to get started.

We’ll have more on what you can do about it tomorrow.

Cheers,
Kris.

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Don’t Believe ‘the Bull’ on Australian House Prices

No Mr. President, Entrepreneurs Did Build That…

The Upcoming Interest Rates Shock You Should Prepare For

By MoneyMorning.com.au

It was a race to reach the border.

On one side were the Austrian police and army. Their job was to seal every road and rail track in and out of the country.

Against them were ordinary citizens. They needed to get their cash – their life savings and their life’s work – out of Austria-Hungary before the security forces executed their blockade.

When the Austro-Hungarian currency went down after World War I, it took savers with it. All the contingency plans and bail-outs and money printing came apart on one fateful day – the day Yugoslavia decided to quit the currency union.

Then all hell broke loose. Savers raced across fields in the dead of night with wheelbarrows full of cash. One by one the other nations fell out of the currency union. Savers rushed from one country to the next across the old empire, in the hope of recovering some of their paper’s value.

The collapse of the krone tells me something very important about currency crises – they develop slowly at first, then very suddenly. So how can you protect your wealth if the euro goes the same way?

European Stocks Look Cheap –
But They Could Get Cheaper

My colleague Seán Keyes wrote in more detail about the currency crisis in the Austro-Hungarian empire.

There are some interesting parallels between what happened then and what’s happening now. My concern is that if Greece is finally forced out of the euro, the eurozone crisis will burn quicker and brighter than ever before.

Like Austrian and Yugoslavian savers in 1918, there’ll be a race to evacuate wealth from the periphery before it’s too late. Indeed, money is already fleeing the area. Spain is the latest economy in the market’s crosshairs.

However, it isn’t all bad news. We are now at a stage where European stock markets seem to be sensibly valued. A lot of the bad news is already priced in. SocGen analysts Albert Edwards and Dylan Grice recently compared US stocks to European ones.

The cyclically adjusted price/earnings ratio (CAPE) smooths out profits over the economic cycle, Europe is much cheaper than the US. On this measure, European p/e ratios are now at a level they last saw in 1982, at the dawn of the last great bull market.

That doesn’t make them outstandingly cheap. I still expect a correction in stock markets courtesy of the European debt crisis. But they are starting to look attractive. As Edwards and Grice suggest: ‘Investors are reluctant to invest amid all the ongoing chaos in the eurozone. But the macro backdrop always looks awful when the market is this cheap.’

So although I don’t think the timing is yet right to be plunging into European stocks, it may well soon be time to start investigating some of the more compelling opportunities available in the eurozone.

Hang On to Gold

Equities, of course, are only part of the bigger picture. Gold remains attractive. Although it has had a less than stellar year so far, I’m willing to be patient. Consider what asset manager Simon Mikhailovich said during a recent interview with US financial newspaper Barron’s.

When asked if he could imagine another Lehman Brothers-style event, he responded: ‘It’s just a matter of time. This financial system is completely unsustainable… The ability of governments to sustain the unsustainable ultimately rests on their ability to maintain faith in their creditworthiness…

‘If this devaluation of financial assets proceeds apace and the moment of clarity comes for many investors in the West who realise they need to diversify into assets that can protect against devaluation, demand for physical gold has the potential to rise dramatically.’

The beauty of gold is that it offers a chance to protect against both deflation and inflation. It’s difficult to point to gold’s credentials as a deflationary hedge because prior historic periods of deflation occurred when its price was fixed. The most recent deflationary period was limited to Japan, at a time when the rest of the world economy was booming.

But as deflation (in financial asset terms) is associated with acute financial stress, it seems reasonable to expect gold to provide some diversifying relief from that stress. Particularly because (unlike sovereign debt, for example) it is nobody else’s liability.

And as an inflationary hedge, it is worth noting that gold has remained a store of value for literally thousands of years.

Gold is also now getting attention from the unlikeliest of sources. Bond fund manager Bill Gross of Pimco recently wrote: ‘As [investors] question the value of much of the $200 trillion which comprises our current [monetary] system, they move marginally elsewhere – to real assets such as land, gold and tangible things, or to cash and a figurative mattress where at least their money is readily accessible.’

In short, investors are faced with a choice between vast abundance (in paper assets and all things debt-like), and genuine scarcity (tangible and real assets, especially gold). In a deleveraging world and in light of the ongoing financial crisis, it makes sense to vote for scarcity.

Tim Price
Contributing Editor, Money Morning

Publisher’s Note: This is an edited version of an article that first appeared in MoneyWeek (UK)

From the Archives…

No Mr. President, Entrepreneurs Did Build That…
20-07-2012 – Kris Sayce

How an Interest Rate Rise Could Trigger a ‘Punch Bowl’ Rally
19-07-2012 – Kris Sayce

When the Going Gets Tough, Entrepreneurs Innovate
18-07-2012 – Kris Sayce

Is This Man the Ultimate Contrarian Indicator for Mining Shares?
17-07-2012 – Dr. Alex Cowie

How Gold Stocks Could Become Your Gilded Lifeboat
16-07-2012 – Dr. Alex Cowie

Why You Should Stick With Gold Through the Eurozone Crisis

EURUSD may be forming a cycle bottom at 1.2042 on 4-hour chart, further rise to test the resistance of the upper line of the downward price channel on 4-hour chart would likely be seen. As long as the channel resistance holds, the bounce from 1.2042 is treated as consolidation of the downtrend from 1.2747 (Jun 18 high), and another fall towards 1.1876 (2010 low) is still possible after consolidation. On the upside, a clear break above the channel resistance will indicate that the fall from 1.2747 has completed at 1.2042 already, then the following upward movement could bring price back to 1.2400-1.2500 area.

Forex Signals

By Central Bank News