USDCAD breaks above the upper line of the price channel on 4-hour chart, suggesting that lengthier consolidation of the downtrend from 1.0055 is underway. Range trading between 0.9824 and 0.9920 would likely be seen in a couple of days. Resistance is at 0.9920, as long as this level holds, the downtrend could be expected to resume, and another fall towards 0.9700 is still possible, and a breakdown below 0.9850 could signal resumption of the downtrend.
We all know what “fragile” means. But what is the opposite of fragile?
If you are like me, your instinctive response would be “robust” or perhaps “durable.” But you would be wrong.
Something that is fragile is damaged by an unexpected shock, whereas something that is robust or durable is able to withstand it. To be robust is to be neutral to shocks.
But what do you call the true opposite of fragile—something that actually benefits from shocks?
As Nassim Taleb points out, there is no word in English (or in any other language, ancient or modern) that conveys this idea. So he invented one—antifragile—and wrote an entertaining and enlightening book around the concept.
Taleb is at times playful and even self-effacing in his writing and at other times insufferably arrogant and abrasive (“non-meek” in his words). But he is always—and I mean always—thought provoking.
Years ago, before Taleb become something of a celebrity, I picked up his original Fooled by Randomness and had something of a “eureka” moment. Taleb put into words (and numbers) many of the abstract ideas about risk and randomness that I instinctively felt yet couldn’t articulate (he had that effect on a lot of people, it would turn out). In particular, I had always mistrusted the Value-at-Risk metric and its offshoots that had been crammed down my throat as an undergraduate finance student. It registered on my “bulls_t detector”, to borrow one of Taleb’s earthy phrases, and history would vindicate this gut reflex with implosion of the financial system in 2008.
I still consider Fooled to be his best book, and if you have never read Taleb’s work that is where I would recommend you start. But Antifragile: Things That Gain From Disorder expands on the concepts in Fooled and its follow-up The Black Swan and goes far beyond financial markets into a more general theory of randomness and volatility and their importance in life and nature. “Living things are long volatility,” he emphasizes often.
Perhaps Taleb’s greatest gift as a writer is his ability to speak in metaphors, the best of which is his analogy of the Procrustean Bed (see my review of Taleb’s The Bed of Procrustes).
Procrustes was a nasty little fellow from Greek mythology who would invite guests into his home and then either stretch or amputate parts of their legs to make them fit just right in his guest bed. In Taleb’s analogy, much of the modern world is a Procrustean bed of sorts. People, markets, and economic systems are contorted to fit tidy theories.
But in Antifragile, Taleb goes beyond this “square peg in a round hole” argument to a larger critique of “soccer moms” (both figurative and literal) who naively attempt to make the world safer by “sucking randomness out to the last drop.” Doing this provides the illusion of safety while actually making us less resilient and more fragile. In other words, not only are scraped knees and bruises ok, they are an essential part of growth.
Many readers misunderstand Taleb’s core message. They assume that because Taleb writes about unseen and improperly calculated risks, his objective must be to reduce or eliminate risk. Nothing could be further from the truth.
If anything, Antifragile is a celebration of risk and randomness and a call to arms to recognize and embrace antifragility. Rather than reduce risk, organize your life, your business or your society in such a way that it benefits from randomness and the occasional Black Swan event.
Taleb’s own life is a case in point. He had the free time to write Fooled, The Black Swan and Antifragile because—in his own words—he made “F___ you money” during the greatest Black Swan event of our lifetimes, the 1987 stock market crash. And to demonstrate that Taleb’s trading style is antifragile, had the 1987 crash never happened, Taleb would not have been materially hurt. His trading style puts little at risk but allows for outsized returns.
In what may seem somewhat disturbing to some readers (and Taleb himself is disturbed by it as well), what makes a system antifragile is that its individual pieces are perishable. Natural selection—the survival of the fittest—requires that the unfit are allowed to fail.
Using the example of restaurants, the restaurant sector is robust because the failure of any one restaurant does not affect the others. And the restaurant sector is antifragile because the remaining players actually learn and grow from witnessing the mistakes made by the failed restaurant.
Now, compare this to the banking system. The world banking system is inherently fragile because the failure of one bank leads to contagion that can cause the failure of other banks and of the system itself.
The importance of failure to an antifragile system is a recurring theme to the book. As individuals and as a collective, we learn more from mistakes than from successes. In a capitalist system, you need a replenishable supply of entrepreneurs willing to take risks. For every failed business idea, our knowledge base expands.
Taleb goes so far as to advocate we treat ruined entrepreneurs in the same way we honor dead soldiers, “perhaps not with as much honor, but using the same logic.”
As Taleb explains, just as “there is no such thing as a failed soldier, dead or alive (unless he acted in a cowardly manner), likewise there is no such thing as a failed entrepreneur or failed scientific researcher.” Their sacrifice makes the system stronger.
I commend Taleb on another book well written, and I recommend Antifragile along with Fooled by Randomness and The Black Swan.
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Source: ForexYard
After yesterdays relatively calm trading session, today the economic calendar is filled with high impact data that threatens to sow large volatility into the market. Traders should pay special attention to the U.S Manufacturing PMI and Canadian Overnight Rate.
13:00 GMT: Canadian Overnight Rate
• Forecasts show that the Canadian Overnight Rate is expected to rise to 0.50%
• Market events like this one tend to create either big changes to current trends or push current trends even further.
• However, overall impact of the Interest Rate decision may in fact strengthen the Canadian currency in the longer run.
• Traders should focus their attention on this release, as it is expected to be the highlight of the week for Canadian markets.
14:00 GMT: U.S. Manufacturing PMI
• This indicator reflects the level of a diffusion index based on surveyed purchasing managers in the manufacturing industry.
• The indicator typically creates a volatile trading environment, affecting not only the USD crosses but also the value of Crude Oil and Gold.
• Disappointing results could send the EUR/USD pair above the 1.2400 resistance level.
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 www.CentralBankNews.info The Czech central bank, which earlier today left its rock-bottom interest rates unchanged, said the overall risks to inflation were slightly on the downside and monetary-policy relevant inflation will be in the lower half of the bank’s tolerance band over the whole forecast horizon.
The published presentation to a press conference by the Czech National Bank (CNB) showed that the decision to keep the two week repo rate steady at 0.50 percent was unanimous and headline inflation was expected to remain slightly above the CNB’s inflation target next year due to tax changes.
The central bank targets inflation of 2 percent and strives to ensure it doesn’t vary by more than one percentage point in either direction. The presentation showed that inflation was forecast to decline further from November’s 2.7 percent and then remain above 2 percent most of 2013 before falling below 2.0 percent in the first quarter of 2014.
The Czech economy shrank further in the third quarter, with net exports the only positive contributor, the bank’s presentation showed, and “developments in industrial production, construction output and retail sales in October continue to indicate subdued economic activity.”
The Czech Gross Domestic Product shrank by 0.3 percent in the third quarter from the second for an annual shrinkage of 1.3 percent. The CNB had forecast annual contraction of 0.8 percent.
“The labour market exhibits sign of slump,” the bank said, adding annual growth in average nominal wage gain again decelerated markedly in the third quarter. Average wages rose by an annual 1.4 percent in the third quarter, below the bank’s forecast of 2.4 percent.
The downside risks to the CNB’s inflation forecast comprise weaker domestic activity and slower wage growth; domestic price developments and developments abroad. The upside risk is higher commodity prices.
“The koruna exchange rate partially offsets anti-inflationary domestic developments,” the bank’s presentation said.
By www.CentralBankNews.info Georgia’s central bank cut its benchmark refinancing rate by 25 basis points to 5.25 percent, continuing its policy of cutting rates as inflation remains below the bank’s target.
The National Bank of Georgia, which has cut rates six times this year by a total of 150 basis points this year, said it was further reducing its forecasts for inflation over the next two years. It did not give specific figures, but the central bank targets inflation of 6 percent.
Georgia’s annual headline inflation rate contracted by 0.5 percent in November, down from a 0.1 percent rise in October, due to lower food prices and exchange rate fluctuations. In 2011 the inflation rate was 2.0 percent, down from 2010’s 11.2 percent.
“Due to the global crises and its impact on our main trading partner countries, economic growth and inflation is reduced. These factors are further reducing the pressure on prices in Georgia,” the bank said.
Georgia’s Gross Domestic Product expanded by an annual 7.3 percent in the third quarter, slightly down from 8.2 percent in the second quarter, but the bank said demand was weakening and the growth of remittances from abroad, especially from Europe, was slow.
But the increase in demand for tourism was contributing to a substantial growth in revenue.
Despite high liquidity in the banking sector, the bank said credit demand was modest.
www.CentralBankNews.info
Tradervox.com (Dublin) – The Japanese currency has fallen to the lowest level since August 2011 against the 17-nation currency as bets the Bank of Japan will make additional stimulus increased prior to the start of a policy meeting today. This will be the first BOJ meeting since the election held on December 16. The currency had dropped to its lowest level since April last year against the US Dollar after the data showed that the country’s trade deficit grew in November. The 17-nation currency gained against the greenback for the eighth day, touching a seven-month high as optimism of US lawmakers reaching agreement on the fiscal cliff issue rose. The euro is supported by market speculations that the German business confidence improved last month.
According to Koji Iwata, a Forex Vice President at Mizuho Corporate Bank Ltd in New York, yen is likely to remain lower into the coming year. However, he added that the Bank of Japan will disappoint the market if it doesn’t add stimulus which is expected factoring in the new leadership. The two day meeting may decide to have a 2 percent inflation target, which the new Prime Minister Shinzo Abe requested the BOJ Governor Masaaki Shirikawa to agree on. Abe has also urged the BOJ to make unlimited easing to boost economic growth and curb deflation.
Japanese exports have dropped by 4.1 percent, leaving a trade deficit of 953.4 billion yen, according to a Finance Ministry report released today. The Japanese currency weakened to 11.71 yen per euro, the weakest level since August 30, 2011, before strengthening marginally to 111.65 yen at mid-day trading in Tokyo, which is 0.2 percent below its close yesterday. The Japanese yen was 0.1 percent weaker against the dollar, trading at 84.27, after touching the lowest level since April 12 2011 on December 17 of 84.48.
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
Source: ForexYard
Hey Everyone,
Below are some market trends for today.
Good luck!
-Dan
Gold- May see downward movement today
Support- 1660.89
Resistance- 1692.99
Silver- May see downward movement today
Support- 31.32
Resistance- 32.25
Crude Oil- May see downward movement today
Support- 87.81
Resistance-89.56
Dax 30- May see downward movement today
Support- 7582.96
Resistance- 7700.00
EUR/USD May see upward movement today
Support- 1.33373
Resistance- 1.3177
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.
Source: ForexYard
The Japanese yen fell to a 16-month low against the euro and a fresh 20-month low against the US dollar during the overnight session, amid continued speculations that the Bank of Japan will soon initiate an aggressive monetary easing policy.
After falling close to $30 an ounce during afternoon trading yesterday amid signs of progress in US budget talks, gold was able to stage a modest upward recovery last night. The precious metal is currently trading at $1673.
Positive developments in the US budget talks also helped the euro stay within reach of a recent 7 ½ month high during overnight trading. The EUR/USD is currently trading at 1.3235.
Main News for Today
German Ifo Business Climate- 09:00 GMT
• The business climate figure is forecasted to come in slightly higher than last month’s
• A better than expected figure could help the euro extend its current bullish trend
US Building Permits- 13:30 GMT
• Expected to come in at 0.88M, slightly higher than last month’s 0.87M
• Better than expected news could help the dollar recoup some of its recent losses during 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.
London Gold Market Report
from Adrian Ash
BullionVault
Weds 19 Dec, 07:55 EST
PRICES to buy gold with Dollars rallied from their lowest levels since late August on Wednesday morning in London, recovering 0.7% from yesterday’s drop to $1662 per ounce.
The drop came as Greece was upgraded Tuesday by the S&P ratings agency from “selective default” to “junk” status, following payment of the latest €34.3 billion in new loans from Greece’s Eurozone partners.
Versus the Dollar the Euro leapt to its highest level since May. The gold price for Eurozone investors sank to €1255 per ounce – a 6-month low almost 10% beneath October’s new record high.
“Gold on any kind of historic market basis is overdue for a nice correction,” CNBC was told by investment author and commodities-fund manager Jim Rogers overnight.
“It’s been correcting for 15-16 months now, which is normal in my view. It’s possible that gold’s correction is going to continue for a while longer.”
Tuesday saw a switch from January to February contracts in a large number of short (ie, bearish) bets on the gold price held by leveraged speculators in the US derivatives market.
Holdings at physically-backed gold trust funds traded on the stock market rose to new all-time records, according to Bloomberg.
Users of BullionVault also moved to buy the drop in prices, with previously quiet trade growing strong as gold fell Tuesday.
“Good support is seen at $1672.50 [and then] $1661.64,” says Commerzbank’s Axel Rudolph in Frankfurt in his weekly chart analysis.
“Failure at [those levels] would push the June high at $1641.01 back to the fore and neutralise our bullish outlook.
Silver prices meantime bounced off a 6-week low at $31.40 per ounce Wednesday morning, as world stock markets reached 17-month highs on Reuters’ data.
Long-dated US bonds also ticked higher, nudging 30-year Treasury yields back below 3.00% per year.
US Republican speaker Boehner meantime referred to a “Plan B” for $1-million earners in the ongoing argument over 2013’s looming fiscal cliff.
A blog on The Economist website says Democrat president Obama has agreed to switch the Consumer Price Inflation index tracked by Social Security payments to a lower measure, resulting in slower benefit rises.
Over in Japan, a small but growing number of pension funds are buying gold as a hedge against zero-bond yields and the long-term decline in equities, says a report in today’s Wall Street Journal.
“By diversifying currencies, we aim to reduce risks associated with them,” the WSJ quotes Yoshi Kiguchi, chief investment officer at Okayama Metal & Machinery Pension Fund.
It began investing in gold this March on behalf of the 260 small and mid-sized company pension schemes it runs.
Gold price chart, no delay | Buy gold online at live prices
Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold and silver vaulted in Zurich for just 0.5% in dealing fees.
(c) BullionVault 2012
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.
By www.CentralBankNews.info Norway’s central bank kept its policy rate steady at 1.5 percent, as expected, saying that country’s inflation was low while economic growth among its trading partners was weak and their interest rates very low.
But Norges Bank maintained an upward bias in its policy guidance, quoting Deputy Governor Jan Qvigstad as saying that “developments in the Norwegian economy give reason to believe that inflation will gradually pick up. This suggests that the key policy rate can be raised further out.”
At its last meeting in October, the central bank delayed an increase in its policy rate until 2013 due to low inflation and low interest rates worldwide. In its previous policy report from June, the central bank had forecast an increase in its policy rate by the end of 2012.
The central bank, which has cut rates twice this year, said there was still considerable uncertainty surrounding global economic developments though credit risk premiums have declined and euro area countries have agreed on actions that may improve the situation.
Since the bank’s October policy report, economic developments have been in line with projections and the Norwegian economy was “growing at a solid pace,” the bank said.
Norway’s total Gross Domestic Product contracted by 0.8 percent in the third quarter from the second’s 1.0 percent growth while GDP for mainland Norway expanded by 0.7 percent in the third quarter from the second.
Norway’s inflation rate was steady at 1.1 percent in November from October. Norges Bank targets 2.5 percent annual inflation.
