Month: August 2012

By Central Bank News

    Turkey: There is continued speculation that the Central Bank of the Republic of Turkey will narrow its interest rate corridor, which is adjusted daily. The 11.50 percent lending rate forms the upper limit of the corridor and the 5.0 percent overnight rate forms the lower limit. The benchmark one-week repurchase rate has been unchanged since a 50 basis point cut in August, 2011, to 5.75 percent.
     Chile: Banco Central de Chile is expected to keep its benchmark overnight lending rate unchanged at 5.0 percent. The bank last changed its rate in January, when it was cut by 25 basis points.

When you look at the Forex charts, one of the important things that you need to look for is patterns.  There are some standard patterns like head and shoulders, breakout and retest etc. but you can also look for your own patterns that repeat themselves with the same results over and over again. The  patterns seem to be the cause while the resulting price action after the pattern has been formed in the effect of the cause. With this mindset, you need to look for such patterns in the historical Forex charts so that when you come across such patterns in future (the cause), you can expect similar price action in the future as well (the effect). One such pattern is the breakout and
retest. The breakout will be generally through a resistance and it is usually preceded by a quiet period in the Forex market when nothing much seems to be happening.

In technical terms, this is called consolidation and breakout while in volume terms, it is called accumulation and the result of the accumulation is the up move or the breakout through the region of resistance. The size of the breakout is always directly proportional to the time of consolidation and inversely proportional to the price range during consolidation. In other words, the smaller the price range and the more time the price spends within the price range, the bigger the breakout. So how are such
breakouts traded? When the price is ranging, it can be noticed that the bottom of the range forms the support and the top of the range forms the resistance. When the Forex price is ranging, you will have no idea which way it is going to break. You don’t control the market and so the trader should not be trying to outguess the market. It would be wiser to just follow its lead. So, the best way would be to just draw lines between the high and low of the range and wait for the breakout. Once the breakout happens, you need to wait for the retest. The breakout would be very fast that you may not be able to get the right entry or the breakout may be false as well. 80-90% of all good, valid breakouts will retest the broken support or resistance. In order to make sure that the breakout is valid and also to ensure that you have a low risk entry, you need
to wait for the retest and it is at this point that you need to take the trade. Never trade the actual breakout, always trade only the retest.

Why does this breakout happen when there is seemingly no special news out there? During consolidation, the big traders, funds and banks keep buying the pair. They keep pushing the price up, using large buy orders, and down, by using much smaller sell orders to scare the smaller traders into selling so that the big traders can buy more. Once they have accumulated enough and there are no more sellers, they start pushing the price up and start buying everything in sight, seeing this breakout, others join in
as well. The price starts to accelerate in the direction of breakout and away we go.

This Forex trading strategy is very popular among Singapore Forex traders as well as traders from other parts of the world. All Singapore Forex brokers provide quality
and professional Forex charts that can be used for defining the price breakouts and apply this simple and effective trading strategy.

Article by tradinginsingapore.com

By TraderVox.com

Tradervox.com (Dublin) – Mark Carney, the Bank of Canada Governor, indicated that the country is in a very different situation compared to other economies such as the UK. He said this when talking about increasing the borrowing cost in Canada during an interview with the BBC in London. He noted that the country’s economy has been growing above trend and the monetary stimulus policy it has adopted to spur growth may be removed.  Noting that the global economy is in a very dangerous state, Carney indicated that the country’s financial system is working well from all corners and there might be need to adjust the monetary policy.

Carney’s talk about increasing the interest rate sets the nation apart from the rest of the developed nations which are lowering interest rates or keeping them at record low to spur growth. Such central banks as the European Central Bank, US Federal Reserve, and People’s Bank of China are encouraging low interest rates to spur growth in their respective economies. In his interview with the BBC, Carney noted that the global economic slowdown have had a knock-on effect on the Canadian economy as it has driven commodity prices lower. Commodity prices remain at 20 percent above historical averages. He noted that Canadian economy is one of the net beneficiaries of these high commodity prices.

When asked about whether the household debt levels pose a risk to the banking system, Carney said that there is no risk of banking crisis in Canada as mortgages are insured by the government. The Canadian currency increased by 0.25 percent against the dollar to exchange at 99.18 Canadian Cents at the start of trading in Toronto.

Carney exuded confidence in Canadian housing market saying in an interview with CTV that the household debt is slowing down as a result of measures taken by the federal government and the financial institution regulator. He also pointed out that policy makers are ready to act is stop further increases in debt if need be.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

By TraderVox.com

Tradervox.com (Dublin) – Japanese economy is expected to have grown in the second quarter at half the pace in the first quarter according to market survey. The slowdown is predicted to have been caused by the escalating Euro zone debt crisis and the strong yen which have limited the nation’s exports. The market expects the gross domestic product to have expanded by 2.3 percent, down from the 4.7 percent in the first quarter of the year. The actual value will be known on August 13 when the Cabinet Office releases the report.

The growth in the second quarter is expected to slow as exporter such as Sony Corp and Canon Inc revised their profit projections downward due to waning global economic growth. It is also expected that policy makers are under pressure to consider supplementary budget and monetary stimulus measures to push the demand up as the Prime Minister Yoshihiko Noda prepares to table a sales-tax increase through the Diet when they meet today. Economists have further indicated that the country’s growth will slow to one percent in the third quarter as global economy continues to slowdown.

According to Koheu Okazaki who is an Economist in Tokyo at Nomura Securities Co, there is need for analysts and investors to be alert on the downside risks in the third quarter since the global economic slowdown will affect Japan’s economy. He said that there is a possibility of fiscal and monetary stimulus at the end of the year. These comments have come just over a week after the Bank of Japan refrained from making additional monetary stimulus in its board meeting in August 1. The BOJ was seen taking a wait and see approach, as the European Central Bank had indicated that it will take decisive measures to end crisis in the region.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

The market’s trend is set to accelerate

By Elliott Wave International

Is it wise to forecast financial markets based on what central bankers say?

Look no further than a chart of long-term stock market prices for the answer: No major trend change ever followed any of those announcements.

Even so, the financial media spends obscene amounts of time analyzing every utterance of central bankers, especially during the past few years of global economic distress.

Elliott Wave International takes a different approach:

The positive seasonals at the end of July, beginning of August are now dissipating…Equally important, a whole host of inter-market divergences are occurring.

The Fed made their announcement today, the ECB’s governing council meets tomorrow and the U.S. unemployment statistics are posted on Friday. These seem to be the main focus of the financial media. On the other hand, our focus is on the markets and in particular, the wave structure.

The Financial Forecast Short Term Update, August 1

That issue of the Short Term Update shows charts of the Dow’s and S&P 500’s wave structure, and it provides insightful commentary about a high-confidence near-term forecast.

The quote above mentions “a whole host of inter-market divergences.” The chart below from the Aug. 1 Short Term Update reveals one of them:

The publication adds:

Each successive up leg within the push from early June has occurred with slightly lesser upside momentum…This chart, which we published Monday (July 30), shows the percentage of S&P stocks above their 10-day moving average. By this measure, the most recent rise from July 24 has been the weakest so far.

Please note that this analysis makes no mention of comments from Federal Reserve Chairman Ben Bernanke or European Central Bank President Mario Draghi.

The U.S. stock market rally that began in March 2009 is now more than three years old. Yet many experts forecast that the trend will continue higher.

You deserve an independent alternative to the conventional wisdom. See what we see in the Elliott wave pattern to learn where prices are headed from here.

Learn to Think Independently You’ll get some of the most groundbreaking and eye-opening reports ever published in Elliott Wave International’s 30-year history; you’ll also get new analysis, forecasts and commentary to help you think independently in today’s tumultuous market. Download Your Free 50-Page Independent Investor eBook Now >>

London Gold Market Report
from Ben Traynor
BullionVault
Friday 10 August 2012, 07:30 EDT

U.S. DOLLAR gold prices traded slightly lower Friday morning in London, hovering around $1610 an ounce for most of the session, as stock markets also edged lower and US Treasuries gained, after trade data from China provided further signs of economic slowdown.

China’s trade surplus fell by 20% month-on-month in July, with both import and export growth slowing, according to official data published Friday.

“Monetary policy easing has to be more aggressive in the remainder of the year…[to avoid a] hard landing,” reckons Liu Li-Gang, Hong Kong-based head of Greater China economics at ANZ Bank.

“Gold is trading broadly in line with other asset classes this morning as you see disappointment in the Chinese data, and that flows into the US Dollar,” says Tom Kendall, analyst at Credit Suisse.

Silver prices meantime traded just below $28 per ounce this morning – slightly above where they started the week – while other industrial commodities also ticked lower.

Heading into the weekend, gold prices looked set to end the week little changed by Friday lunchtime in London, with silver prices similarly flat.

“Gold prices seem reluctant to move out from their $20 comfort zone centered on $1610 and the risk is of a retest of the lower end,” says ANZ senior commodities strategist Nick Trevethan.

“Otherwise, bullion looks set to mark time until the Federal Reserve symposium [at Jackson Hole] at the end of the month, and to see how the [European Central Bank] intends to address the crisis in Europe.”

“The Euro itself does not need to be saved,” says former ECB chief economist Otmar Issing in an interview with CNBC.

“What has to be saved is the stability of the Euro and the Euro area. The question [of] how many countries can participate is the challenge with which Europe is confronted.”

Issing added that those calling for debt mutualization in the form of so-called Eurobonds should “shut up”.

“[Politicians] always give the impression that they have the right medicine, which is more money,” he said.

“Markets will always ask for more. So this will be an endless game and politicians will always be seen as prisoners of this process.”

Spanish prime minister Mariano Rajoy did not rule out the prospect of Spain requesting a bailout when he spoke to reporters last week, while yesterday a member of Italian prime minister Mario Monti’s cabinet said Italian leads held “lengthy” discussions on whether Italy should ask for a bailout.

“We still have some time to discuss it. We will see what the conditions will be,” Italy’s education minister Francesco Profumo said Thursday.

The case against British bank Standard Chartered, which the New York Department of Financial Services has accused of being a “rogue institution” over dealings with Iran, is primarily based on a failure to maintain proper records rather than the bank’s role in the deals themselves, newswire Reuters reports.

“There are fewer gray areas in a records case than there would be in a case involving more complicated, and harder to prove, federal laws that have restricted or prohibited Dollar transactions with sanctioned countries such as Iran,” Reuters reports.

Iran meantime has been overtaken by Iraq as the second-largest Opec oil producer for the first time since the 1980s, the Financial Times reports, citing figures from the International energy Agency in Paris.

Ben Traynor
BullionVault

Gold value calculator   |   Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.

(c) BullionVault 2011

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

Source: ForexYard

Continued inaction on the part of the European Central Bank to lower borrowing costs in Spain and Italy weighed down on the euro throughout the day yesterday. The news, combined with positive US data also helped the dollar reverse its bearish trend during afternoon trading. As we close out the week, a lack of significant news out of the US means that risk sentiment will likely be determined by any announcements out of the euro-zone. If the ECB remains reluctant to announce any new initiatives to combat the euro-zone debt crisis, risk aversion may continue and the euro could slide further.

Economic News

USD – Positive US News Benefits USD

Better than forecasted US news sent the dollar higher against several of its main currency rivals yesterday. Both the weekly Unemployment Claims and Trade Balance figures signaled growth and boosted investor confidence in the US economic recovery. The USD/CHF advanced close to 80 pips over the course of the day to reach as high as 0.9775, before staging a slight correction and dropping to the 0.9760 level. Against the Japanese yen, the dollar rose by more than 40 pips during the second half of the day to trade as high as 78.73.

Turning to today, the safe-haven dollar may be able to extend yesterday’s gains if investor confidence in the euro-zone economic recovery continues to decrease. If the European Central Bank fails to make any announcements regarding new initiatives to lower borrowing costs in the region, the greenback may remain bullish against its higher-yielding currency rivals. That being said, any increase in risk aversion in the marketplace could result in the dollar reversing its losses against the Japanese yen.

EUR – Euro Reverses Earlier Gains

The euro took losses against several of its main currency rivals yesterday, as investor faith in the ECB’s ability to combat the euro-zone debt crisis began to fall. The EUR/USD fell by close to 100 pips during European trading, eventually reaching as low as 1.2284 before staging a mild recovery and stabilizing at the 1.2300 level. Against the Japanese yen, the common currency fell by more than 90 pips to trade as low as 96.31. That being said, the euro was able to bounce back, and by the evening session was trading close to the 96.90 level.

Turning to today, in addition to any announcements made by euro-zone officials regarding the region’s debt crisis, euro traders will also want to pay attention to the British PPI Input figure, set to be released at 8:30 GMT. The indicator is forecasted to come in at 1.3%, significantly higher than last month’s -2.2%. If true, risk taking may return to the marketplace, and the euro could receive a mild boost during mid-day trading against its safe-haven currency rivals.

Gold – Gold Takes Mild Losses

The price of gold fell during the first part of the day yesterday, as a lack of confidence in the euro-zone economic recovery weighed down on higher-yielding assets. The precious metal fell by close to $8 an ounce to reach as low as $1609.39. That being said, better than expected US news later in the day helped gold bounce back to the $1615 level.

Today, gold traders will want to pay attention to any announcements out of the euro-zone and how they continue to impact risk taking in the marketplace. If investor confidence in the ECB’s ability to lower Spanish and Italian borrowing costs continues to drop, the price of gold may turn bearish before markets close for the weekend.

Crude Oil – Crude Oil Benefits from US News

The price of crude oil traded steadily for most of the day, as supply side fears due to tensions in the Middle East helped the commodity hold onto its recent gains. Furthermore, crude saw mild gains during afternoon trading, after better than expected US news signaled to investors that demand in the world’s leading oil consuming country may go up. Oil reached as high as $94.02, up close to $1 a barrel for the day.

Today, oil traders will want to continue monitoring developments in the Middle East, particularly with regards to tensions between Iran and the West. Any escalation in the ongoing conflict over Iran’s disputed nuclear program could result in oil prices going higher before markets close for the week.

Technical News

EUR/USD

A bearish cross on the daily chart’s Slow Stochastic indicates that this pair could see downward movement in the near future. Furthermore, the Williams Percent Range on the same chart is in overbought territory. Traders may want to open short positions.

GBP/USD

Most long-term technical indicators show this pair range-trading, meaning that no defined trend can be determined at this time. Traders may want to take a wait and see approach, as a clearer picture is likely to present itself in the near future.

USD/JPY

The Bollinger Bands on the daily chart are narrowing, indicating that this pair could see a price shift in the near future. Furthermore, the Williams Percent Range on the weekly chart has dropped into oversold territory, signaling that the price shift could be upward. Going long may be the smart choice for this pair.

USD/CHF

The daily chart’s Slow Stochastic has formed a bullish cross, meaning that an upward correction could form in the near future. In addition, the Williams Percent Range on the same chart is currently close to being in oversold territory. Going long may be the wise choice for this pair.

The Wild Card

Nasdaq 100

The daily chart’s Slow Stochastic has formed a bearish cross, signaling that a downward correction could occur in the near future. Additionally, the Relative Strength Index on the same chart has crossed into overbought territory. This may be a good time for forex traders to open short positions ahead of possible bearish movement.

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 Central Bank News
    The central bank of Russia kept its key refinancing rate unchanged at 8.0 percent, saying that inflation remains within its target range despite a recent uptick.
    The Bank of Russia said the rise in inflation to an estimated 5.7 percent annual rate by August 6 was due to a planned increase in regulated prices and higher food prices.
    “The worsening of the food market conditions in Russia and globally as well as the downward revision of this year’s crop harvest are the important sources of inflation rise, particularly taking into account their influence on inflation expectations,” the bank said in a statement.

    Economic growth remains close to its potential level, the bank said, adding that this implied an absence of demand-pull price pressures and it did not see a higher risk of economic slowdown despite a deceleration in June’s industrial production.
    Bank of Russia has held its refinancing rate unchanged since cutting it by 25 basis points in December 2011. The bank’s medium-term target is for an annual rise in consumer prices of 4-5 percent by 2014, down from its current 5-6 percent target.
    www.CentralBankNews.info

By Central Bank News
    The Central Reserve Bank of Peru (BCRB) held its policy reference rate steady at 4.25 percent, as expected, saying the recent rise in inflation was merely temporary and the economy was growing close to its potential rate.
    “Moreover, uncertainty remains in international financial markets, which is being reflected in the decline of terms of trade and in prospects of lower growth in both developed and emerging countries,” the central bank said in a statement following a meeting of its board.
    Inflation eased to an annual rate of 3.28 percent in July from 4 precent in June, showing that supply factors that had pushed up inflation were continuing to reverse, the bank said.

    “Despite this price rise, inflation is expected to gradually converge to the target range the rest of the year,” the bank said.
     The BCRB targets inflation of 2 percent, plus or minus one percentage points and the recent rise was mainly due to higher international grain prices from drought, including the United States.
     The bank has kept rates unchanged since April 2011 
     The president of BCRB said earlier this month that he expected Peru’s economy to expand over 6 percent in June following an annual rate of 6.5 percent in May. The economy grew by 6.9 percent in 2011 and is forecast to be the fastest growing economy is South America this year.
    www.CentralBankNews.info

By TraderVox.com

Tradervox.com (Dublin) – The Reserve Bank of Australia has revised its previous growth outlook for the year, increasing its gross domestic product growth to 3.75 percent, up from the 3 percent it had predicted in May. In a statement today, the RBA pointed to better than expected consumer prices which will rise to 2.25 percent by the end of the year. The RBA had predicted a rise to 2.5 in its previous report. It also indicated that the Underlying inflation is set to reach 2.5 percent from the previous prediction of 2.25 percent. The central bank also highlighted that the strong currency will probably drag the economy, which is contrary to its effect in the past.

According to the quarterly monetary policy statement released by the RBA, the most significant risks revolve around the development of the exchange rate. It warned that the persistently high level of exchange rate will result to slower economic growth, which is in contrast to historical relationships considered by the bank. The statement suggested the exchange rate, which has been high for some time, is a central part of structural adjustment taken in the economy. The RBA used an exchange rate of $1.06 in its forecast, which is higher than the $1.03 used in May. In its forecast, the bank also assumed that the interest rate would remain at 3.5 percent in that duration.

According to Ben Jarman, an Economist in Sydney at JPMorgan &Chase Co. said that the RBA statement is more upbeat on the growth side. He added that the bank has left the door open as there is the unforeseen risk of the global economic slowdown. After the release of the statement, the Australian dollar traded at $1.0550 at noon in Sydney from the $1.0580 it closed in New York yesterday. It had reached its strongest of $1.0613 since March 20. The Aussie is the second best performer this year after New Zealand, registering a 3.3 percent increase this year.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox