Month: August 2013

Article by Investazor.com

The most important event of the day was by far the publishing of the FOMC meeting minutes. Investors were waiting for details regarding Quantitative Easing. Fed’s Evans, Fisher or Pianalto are expecting a tapering of the QE on September, especially if the economic data would signal an economic recovery of the US.

On these meeting minutes the officials agreed on the fact that the QE should be tapered this year, but it was nothing said about September. So  even though investors did not get a clear point in time when the QE will be reduced, they understood that the good economic data may lead to a modification of the program this year.

The indexes, Dow Jones Industrial, S&P500 and others continued their down move. This reaction was also seen in the EURUSD quotation. After hitting 1.3450 the price of this currency pair dropped back around 1.3350 signaling that EURUSD is not yet prepared for a rally above 1.34.

Chart: EURUSD, Daily

From the technical point of view a Dark Cloud Cover can be seen on the candlestick chart at 1.34. This is a bearish signal which could result in a drop back to 1.33 or even 1.32 till the end of this week. The only positive signal would be a daily close above 1.34.

The post FOMC Disappoints again, QE Tapering is a Dilemma appeared first on investazor.com.

Source: Brian Sylvester of The Gold Report (8/21/13)

http://www.theaureport.com/pub/na/why-is-anti-goldbug-dennis-gartman-getting-into-gold

Dennis Gartman, the editor and publisher of The Gartman Letter, has made no secret of his disdain for gold. But he believes a good trader is agnostic of everything. So, when technical charts indicated it was time to buy, he did. In this interview with The Gold Report, Gartman talks about how he has been playing gold off of other currencies to turn a profit and discusses if he is ready to get into gold equities yet.

The Gold Report: Dennis, in late July, you told CNBC that you’re a “buyer of gold” after being what amounted to the grand marshal for the gold bear parade. Why did you change sides?

Dennis Gartman: Simply because the gold bear parade had gotten a bit overcrowded. It was actually quite astonishing to me. Everybody was overtly and manifestly bearish of gold. If I’ve learned anything in 40 years, it’s that when things get terribly one-sided, it’s probably time to go to the other side. Gold had reached some technical levels that I found interesting, but more important, it had reached a level of psychological bearishness that pushed me off the sidelines, off from being bearish of gold, to being bullish.

TGR: Have you taken some ribbing from your colleagues as a result of that position?

DG: I found it amusing that I was taken to the woodshed because gold went down another $15/ounce from where I bought it.

TGR: While you are buying gold, you told CNBC that you’re not a true believer. What’s holding you back?

DG: The true believers in gold—the goldbugs, the folks who think that the world is coming to an end, that gold is the be all and end all, that money should be backed by gold—I’m not of their religion. Good traders are agnostic of everything. They look at numbers simply as something dancing across the page, as cleanly and as unaffectedly as they can, buying the things that look cheap and are starting to go higher, selling the things that are high and are starting to move lower and not caring a wit about what it is that they are trading. Most people who trade gold are true believers. They believe that gold is the be all and end all. I could care less.

TGR: In another interview, you said that you’re bullish on gold in yen terms versus gold in U.S.-dollar terms. Could you please flesh out the difference?

DG: First of all, let’s understand that gold is nothing but another currency. Yen is a currency. The dollar is a currency. The euro is a currency. That’s all it is.

Having grown up as a currency trader, I was always taught to trade one currency against another. One is long of Canadian dollars, short of yen. One is long of euro, short of British pound sterling. One is long of gold, short of yen.

I’m long of gold, short of yen for the very simple reason that the Bank of Japan, under the new regime of Prime Minister Shinzo Abe and Bank of Japan Governor Haruhiko Kuroda, has made it abundantly clear that it will do everything within its power to expand the bank’s balance sheet over the next year and to weaken the currency over time.

It’s been a far better trade over the last two years than being long of gold in U.S.-dollar terms. Gold in yen is down 1% over the last two years. Gold in U.S.-dollar terms is down 28%. I think down 1% is better than down 28% almost any time.

TGR: Has gold in U.S.-dollar terms bottomed?

DG: Gold in dollar terms likely has not bottomed. Gold in dollar terms has been a bear market since the autumn of 2011. Each low has been lower. Each high has been lower. Until that trend changes, it’s a bear market.

Prices have been moving from the upper left to the lower right. I haven’t learned many things in 40 years of doing this, but if something has been moving for two and a half years from the upper left to the lower right, the odds are next month it will have moved even lower to the right. No, gold has not seen its low in dollar terms.

TGR: What has caused that two-year decline?

DG: Too many goldbugs. Too many people hoping that there will be a continuation. Although they take Federal Reserve Chairman Ben Bernanke to task for what he does, they hope he will continue because they hope that the expansion of monetary aggregates gives rise to higher inflation. They have been abundantly wrong about that—it has not. It may eventually, but it hasn’t thus far. Because it hasn’t created the inflation that the goldbugs wanted, they continue to buy gold. They find themselves in an uncomfortable and losing position, day by day and hour by hour.

TGR: Is stagflation or rapid inflation more likely?

DG: Stagflation—no question. It’s been happening for the past several years and will continue. Why? Wages are under pressure and will continue to be under pressure. People won’t like this answer, but in a world where 1.3 billion Chinese, 1.2 billion Indians, 240 million Indonesians and 28 million Malaysians are being brought into the modern world; where Africans are being brought into the modern world; and where transportation and communications are better than we’ve ever seen, if you think that a high school education in North America or Europe is going to give you the same living standard and the same wage rates that your parents got, you’re naïve. Wage rates in Asia are going to continue to put downward pressure upon wage rates in Europe and the U.S.

When wage rates are under pressure, and they are under pressure, where can inflation be derived from? The true believers have always thought that an overexpansion of the monetary aggregates has to give rise to inflation. Thus far, they’ve been proven wrong.

TGR: You have bought the S&P 500 and the Nikkei in recent weeks. Why did you make those moves?

DG: For the same reason I made the move to buy gold. Everybody had been so overtly bearish. Let’s be honest, I got very lucky. I sold half of it last Friday, going into the nonfarm payrolls number, and I sold the other half of it two days ago. Now I am once again agnostic of stocks.

I’m still bullish in the long run. This bull market still has years to run, but sometimes it’s better to just stand on the sidelines. As I like to say, in a bull market, there are only three positions that you should ever consider having: wildly bullish, pleasantly bullish or neutral. I was wildly bullish. I’m neutral for a while.

TGR: If you’re bullish on gold, what about gold equities?

DG: If you’d asked me that question a year ago, I would have said that they’re a losing proposition. If you wished to bet on gold, why would you buy gold equities that expose you to management ignorance and the vagaries of natural disasters? For the past two years, gold equities have lost day after day after day. It has been a horrifyingly bad trade. It has made no sense.

But today, gold equities have been beaten up so badly relative to gold that they’ve discounted natural disasters. They’ve discounted management ignorance. They’ve discounted all of the ill that could befall an industry.

If you’re going to be a buyer of gold miners, buy the real gold miners. Buy Barrick Gold Corp. (ABX:TSX; ABX:NYSE). Buy Newmont Mining Corp. (NEM:NYSE). Buy AngloGold Ashanti Ltd. (AU:NYSE; ANG:JSE; AGG:ASX; AGD:LSE). Buy the companies that have been around for a while.

It’s the first time in some two and a half years that gold equities may actually begin to rally when gold rallies—and may even begin to rally when gold goes sideways.

TGR: But wouldn’t some of those smaller companies rally along with the gold price?

DG: The answer is maybe. But that’s roulette. Nine times out of ten, even when gold rallies, you’re going to lose money. You may get lucky, but mostly you’re going to lose money.

TGR: Do you see another round of consolidation coming to the gold equities?

DG: There is always consolidation in gold equities. There has been for hundreds of years. There will be hundreds of years into the future. That will never change.

TGR: Are you bullish on any other precious metals like silver, platinum, palladium or even rhodium?

DG: I know nothing about them. Those are for people smarter, more naïve or more courageous than me. I don’t trade silver because I don’t trade things that can move 3% in a day. I don’t understand that kind of irrationality. I leave that to others.

TGR: That’s happened to gold in the last few months, too. It certainly moved a few percent a couple of times in April.

DG: That was also very disconcerting. I don’t like that. It also moved a couple percent after the nonfarm payrolls number; it moved 1.5% lower and 1.5% higher. That’s illogical. It makes me tend to go to the sidelines.

TGR: You started out in commodities in the cotton business. How does your experience with cotton inform your view of gold?

DG: My experience in agriculture, not just cotton, taught me a good deal about psychology. Learning how psychology dashes about is extremely important in agriculture and absolutely attributable to any other commodity, equity and even the bond market.

The cotton market taught me to watch how the term structure of the futures functions. I learned not to sell any market that’s gone to backwardation where the front months are above the backs. That tells you a lot about what informed money is doing.

It also taught me a lot about technical analysis. It taught me that I need to understand the fundamentals of what I am trading, and then I need to understand what the chart is telling me. Investors need to understand whether they are going to be bullish or bearish fundamentally, and then they better see what the chart is telling them.

Everything I learned in cotton is absolutely applicable to what goes on in almost any other market.

TGR: What is the gold chart telling you right now?

DG: That it’s a bear market in dollar terms and that it’s a neutral market in yen terms. If you’re going to be long of gold, you’re better off owning it in yen. That’s what the charts are telling me.

TGR: At the New Orleans Investment Conference in November, you’re going to be on the speakers docket with the likes of Dr. Ron Paul, Marc Faber and Charles Krauthammer. What role will you play in that group?

DG: I will be the court jester. My duty is to laugh with Marc Faber, who is one of the truly funniest people in the world despite his Swiss accent and his Swiss background. He’s hysterical, but we usually end up arguing. We’re on the opposite side of ideas. I probably will not be a proponent of what Ron Paul argues because I know that he’ll be arguing against the Federal Reserve, and I’ll argue that the Fed, under Bernanke, saved the world from crumbling in 2008 and no one gives it credit for that. My role with Dr. Krauthammer will be to bow in awe of the guy’s majestic wisdom because he is truly a brilliant gentleman.

TGR: What’s the key message that you’re telling subscribers of The Gartman Letter right now? What sort of wisdom are you imparting to them?

DG: My message is the same one that I’ve imparted for the last 35 years. Buy things that are going up. Sell things short that are going down. Run from losses as quickly as you can. Admit when you’re wrong. Try to understand why something is fundamentally going higher. Make sure that the chart agrees with what you’re saying.

TGR: What’s the trade right now?

DG: The world is a far better place than the goldbugs would ever admit. The world is moving forward and advancing on a shocking basis economically. There will be people who will tell you that things are getting bad. I will tell you they’ve never been better. They might not be perfect here in the U.S., but the rest of the world is scrambling to jump into the 21st century. Those who forget that, those who miss that, are going to miss great opportunities. It’s a bull market in equities in global terms. You better understand that.

TGR: Thanks for talking with me today.

DG: My pleasure.

Dennis Gartman has been publishing his daily commentary, The Gartman Letter, since 1987. Over the years, he has also conducted numerous presentations and courses on issues relating to the capital markets and derivatives for various brokerage firms, central banks, and U.S. government entities. In recent years, Gartman has been a frequent guest on leading financial television and radio networks.

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DISCLOSURE:

1) Brian Sylvester conducted this interview for The Gold Report and provides services to The Gold Report as an independent contractor. He or his family own shares of the following companies mentioned in this interview: None.

2) The following companies mentioned in the interview are sponsors of The Gold Report: None. Streetwise Reports does not accept stock in exchange for its services or as sponsorship payment. Sponsors pay a flat monthly fee of between $500 and $3,000 per month for a range of services. There are no specific performance expectations in exchange for these fees. Fees fund both sponsor specific activities, as well as general report activities. Sponsor specific activities include aggregating content and publishing on the Streetwise website, creating and maintaining specialized company pages, and issuing press releases. The fees also cover the costs for Streetwise Reports to publish sector specific information in our electronic newsletter focused on interview experts in the sector.

3) Dennis Gartman: Neither I, nor anyone in my family, owns or has an interest in any of the companies mentioned in this interview. Second, Barrick and Newmont Mining are fully paid up and long standing subscribers to The Gartman Letter, otherwise I have no other financial relationships with any of the companies noted or discussed in this interview. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.

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Myth 1 of 3: Bond Yields Are Rising Due to the Fed’s Insinuation at Tapering

By Elliott Wave International

Editor’s note: The following article is the first in a series of three, reprinted with permission from market-leading financial forecasting firm Elliott Wave International. To read the full three-part report now, follow this link and download it for free.

*****

The consensus is that yields began to rise on or around May 22, also known as Bernanke Day. That was the day when U.S. Federal Reserve Chairman Ben Bernanke seemed to hint at tapering the Fed’s $85-billion-per-month bond-buying program.

In reality, the rise in U.S. Treasury note rates actually began a year ago, back in mid-2012 – when yields on the 10-year note and 30-year bond stood at all-time record lows.

At the time, the raft of negative news coming out of the U.S. and Europe all but assured a rush into the perceived safety of U.S. Treasuries, as these news items from the time make plain:

“The US government is a big winner… [We] don’t see any catalysts in the near-term to push yields higher as there is just so much ambiguity in the euro zone that keeps investors nervous.” (WSJ, June 24, 2012)

“There’s virtually no floor to how low yields go… I don’t think we’re going back to a level reflecting higher inflation or growth prospects for a long time.” (CNN Money, June 1, 2012)

“Money is fleeing every place in the world and then coming here. The path of least resistance is to lower yields.” (Bloomberg, July 23, 2012)

Yet, as this chart of 10-year Treasury notes shows – the floor for yields was actually laid in July 2012.

Before Bernanke Day, there was no fundamental reason for yields to start rising; inflation was low and economic activity was sluggish. By the time the majority of investors woke up to the silent uptrend that had long since started, the value of bonds had fallen.

In June 2012, Elliott Wave Theorist Editor and EWI President Robert Prechter teamed up with the editors of The Elliott Wave Financial Forecast for a first-ever special 10-page bonds report. Yields had been in a 31-year downtrend, and record amounts of money were flowing into bond funds. The analysis presented was quite contrary, and the title of the report did not mince words:

Major Top in the Bond Market:
Bond Yields are Poised to Begin Rising

On page six:

“The question is – When will rates begin rising? We think the answer is ‘now.’ Evidence is rapidly mounting that the trend in interest rates on high-grade debt is poised to reverse.”

Among the key pieces of evidence cited in the report, here are two:

“As shown, the latest drop in yield has traced out five waves into Friday’s new low as bond futures hit a new all-time high. This plunge in rates should mark at least a bottom and probably the bottom.”

“The Commitment of Traders report shows that Large Speculators have been heavily invested in T-bond futures. Large Specs are not always wrong, but they are usually wrong when they follow the trend. The asterisks show times when their buying or selling was in concert with the trend, and in those cases the market was approaching a reversal.”

In the end, the message from The Elliott Wave Theorist/The Elliott Wave Financial Forecast June 2012 special report was clear:

“The bull market in the bond market is aged and ripe for a reversal. Generally speaking, if you are invested in long-term debt, sell it.”

The word “taper” was never mentioned in the entire piece.

*****

This article is the first in a series of three, reprinted with permission from market-leading financial forecasting firm Elliott Wave International. To read the full three-part report, 3 Dangerous Myths About Rising Bond Yields, follow this link and download it for free.

By WallStreetDaily.com

Best Buy (BBY) is crushing it this year. Shares are up almost 160% year to date. The company has its new CEO, Hubert Joly, to thank for the growth.

He has cut costs dramatically, which helped usher in the company’s first quarterly profit in a year.

But the question is: Will the momentum continue? Not all analysts are convinced.

One thing to keep in mind is that cost cutting – while great for a short-term earnings boost – can’t go on forever.

According to Morningstar’s R.J. Hottovy, “There were a lot of costs to be cut in Best Buy’s cost structure, and I think that the market is rewarding – has rewarded – the company for those efforts. But [the market] now has overshot that, and may be getting a little bit too optimistic.”

Of course, there are other things to consider here, too. Like the fact that consumers are increasingly making electronics purchases at discount stores like Wal-Mart (WMT) or online retailers like Amazon (AMZN).

As Hottovy adds, Best Buy “still doesn’t have any inherent cost advantages over the likes of Amazon, Wal-Mart.”

Granted, Best Buy has been doing a better job with matching those rivals’ online prices. And the company is revamping its stores and website.

It’s also letting vendors like Samsung and Microsoft (MSFT) run their own boutiques within its stores. But even that could backfire, says Hottovy…

“I think the store-within-stores from Samsung and Microsoft are a nice touch for the time being and should provide a short-term lift in terms of sales, as well as profitability. But at the same time, you are also giving the companies like Samsung and Microsoft a blueprint of how they could build their own retail presence. So it comes as a bit of a double-edged sword and could potentially come back to hurt them in the long run.”

The post The Most Overpriced Stock of 2013? appeared first on  | Wall Street Daily.

Article By WallStreetDaily.com

Original Article: The Most Overpriced Stock of 2013?

By www.CentralBankNews.info     Namibia’s central bank held its repo rate steady at 5.50 percent, but said “persistent global challenges are increasingly presenting downside risks to domestic growth, through falling commodity prices, and growth is expected to remain below the targeted level.”
    The Bank of Namibia, which has held rates steady this year after cutting by 50 basis points last year,  also said inflation is expected to remain within tolerable levels for the rest of the year and international reserves have risen since June and “remain adequate to protect the fixed currency arrangement.”
    The central bank said it decided to maintain its rates to “support the domestic economy, and mitigate the impact of falling commodity prices and suppressed demand for Namibian export products,” including copper and uranium.
    Namibia’s economy is forecast to expand by 4.7 percent in 2013, down from 5.0 percent in 2012 though growth in the first half is expected to be in line with first half of 2012.
    In April the central bank had forecast growth this year of 4.4 percent.

    Output from the primary industries are estimated to slow to 2.5 percent growth this year due to drought affecting agriculture while uncertainties surrounding diamond and uranium production is exerting a drag.
    Namibia’s inflation rate eased to 5.8 percent in July from 6.2 percent in June due to slower rise in food prices, electricity, gas and other fuels.
    “Inflation is expected to remain stable, around current levels, for the remainder of the year,” the central bank said, adding the “lagged effect of Namibia dollar depreciation against major currencies continues to constitute a risk to the inflation outlook.”
    Namibia’s dollar declined slowly in the first few months of this year but the depreciation picked up speed in May, along with the currencies of other emerging and less developed countries as investors started to shift their portfolios toward advanced economies that appeared to be improving.
    Against the U.S. dollar, the Namibian dollar has depreciated 17.3 percent this year, quoted at 10.23 today compared with 8.46 at the start of the year.
    Namibia’s foreign exchange reserves rose to N$18.1 billion at the end of July, the bank said.

    www.CentralBankNews.info

London Gold Market Report
from Adrian Ash
BullionVault
Wednesday, 21 August 08:15 EST

BULLION prices recovered most of an earlier dip lunchtime Wednesday in London, with gold trading 1.2% lower for the week so far ahead of policy-meeting minutes from the US Federal Reserve.

Asian and European stock markets fell once again, as did commodities and major government bond prices.

 Analysts and wholesale gold dealers said they would look for discussion of reducing quantitative easing – held at $80 billion per month – in the US central bank’s notes.

 “Wednesday could turn out to be a rather strong day in most markets,” reckons Edward Meir writing for brokers INTL FCStone.

 “Should central bank deliberations reveal that officials remain uncertain as to whether or not to remove stimulus, we could see a rather sharp move higher…including [in] gold and silver.”

 But “market participants will be looking for some clarity,” says a note from French bank BNP Paribas, “[plus] a possible timeline on the QE tapering plans.”

 Silver prices rallied alongside gold ahead of today’s US Fed minutes, recovering 20 cents to rise back above $23 per ounce but holding 1.2% down for the week.

 “Any hawkish comments could see small-scale profit taking in gold,” says VTB Capital strategist Andrey Kryuchenkov, speaking to Bloomberg.

 What’s more, he adds, “It will be harder to sustain physical demand at higher prices with bargain hunting clearly running out of steam.”

 World #1 gold consumer India “remains largely absent [from the market] amid tighter regulations and a weak currency,” says Swiss investment bank and major world bullion dealer UBS in a note.

 “Conversations with local participants suggest that there is good interest to re-start import activities soon, especially with authorities currently working to clarify the new rules.”

 Looking ahead to Diwali however, “The retail trade has built sufficient stock to cover much of the wedding and holiday season,” says the latest Precious Metals Weeklyfrom Metals Focus.

 Reporting from this week’s India International Gold Convention in Jaipur, as well as other major gold centers, “Unofficial flows [ie, smuggling] appear to have increased too,” says the new London-based consultancy.

 “We are keeping an eye out for any increase in shipments of 100g bars (at times prefered for this activity) at the expense of kilobars.”

 Indian interest rates meantime edged back today from Tuesday’s 12-year highs, with the 10-year bond yield slipping from 9.48% after the Reserve Bank vowed to buy eight thousand crore Rupees ($1.3bn) worth of government debt this coming Friday, injecting cash into the banking system.

 Gold futures in Mumbai rose to 8-month highs however as the Rupee fell further, hitting fresh record lows against the US Dollar.

 Mumbai shares dropped the same amount, down 1.8% for the day and extending their fall since a month ago to more than 11%.

 Ahead of today’s US Federal Reserve minutes, “I think it is the lack of Dollar supply than anything else to blame,” reckons fixed-income analyst Suyash Choudhary at IDFC, quoted by the Economic Times of India.

 “Unless QE is to be wound up completely,” says a trading note from Marex Financial’s London-based head of precious metals David Govett – and “it won’t be – I would look to buy dips in the case of a reaction sell off” in gold.

Adrian Ash

BullionVault

Gold price chart, no delay | Buy gold online

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 in Zurich or Singapore for just 0.5% commission.

(c) BullionVault 2013

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 Here’s today’s Central Bank News’ link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don’t miss any important news.

By www.CentralBankNews.info     Iceland’s central bank maintained its benchmark seven-day collateralised lending rate at 6.0 percent and repeated that its accommodative monetary policy stance should disappear as spare capacity disappears from the economy with the degree of normalization depending on inflation, which in turn depends on wage developments and exchange rate movements.
    The Central Bank of Iceland, which has held rates steady this year after raising them by 125 basis points last year, said its latest monetary bulletin forecast economic growth of 1.9 percent this year, slightly higher than 1.8 percent forecast in May, while growth in 2014 is forecast at 2.8 percent, down from a previous forecast of 3.0 percent, and 2015 growth of 2.9 percent, down from 3.5 percent.
    The lower-than-expected output growth in the next two years was mainly due to less investment in the energy-intensive sector, the central bank said, though the recovery of the labour market has been more robust than forecast in May.
    Inflation in Iceland is expected to rise slightly in the second half of the year and then start easing towards the central bank’s 2.5 percent target early in 2014.
    “If wage increases are consistent with the inflation target, inflation will fall more quickly and interest rates will be lower than would otherwise be necessary, other things being equal,” the bank said.
    Iceland’s inflation rate rose to 3.8 percent in July from 3.3 percent in each of the previous three months. The bulletin forecast average inflation of 3.9 percent this year, up from May’s forecast of 3.8 percent, 3.1 percent next year and 2.9 percent in 2015.
    Year-on-year the headline inflation rate is forecast at 4.0 percent in the third quarter of this year, up from 3.3 percent in the second quarter, and 4.1 percent in the fourth quarter before easing to 3.4 percent in the first quarter of 2014 and then 3.1 percent in the second quarter and then slowly declining.
    The Icelandic unemployment rate is forecast at 4.8 percent this year, 4.4 percent in 2014 and 4.3 percent in 2015.
     Iceland’s Gross Domestic Product rose by 4.6 percent in the first quarter for annual growth of 0.8 percent, down from 1.4 percent in the fourth quarter.
    According to forward interest rates, financial markets expect the central bank to keep rates steady this year and then raise them gradually in the first half of 2014.
    Since the May bulletin, the Icelandic krona has appreciated by 0.9 percent in trade-weighted terms, the bak said, and by 2.9 percent against the U.S. dollar but depreciated by 0.7 percent against the euro. Today the krona was quoted at 119.8 to the U.S. dollar compared with 128 on January 1, 2013.
    During the summer months, the central bank has also bought foreign currency, in line with the foreign exchange intervention strategy announced in May.
    “As yet, however, this development has not led to lower inflation expectations,” the bank said.
    The central bank said there was some uncertainty about the path of public finances in coming years but it expects this to diminish with the presentation of the budget in early October.
    “It is critical that Treasury finances be brought into balance as soon as possible so that the monetary and fiscal policy mix contributes to external balance of the economy, fosters overall economic stability, and delivers inflation close to target, at the lowest possible cost,” the central bank said.
   
    www.CentralBankNews.info
 

USDJPY has made three waves of a pull-back from latest high that could be near completion as price tested and already reversed from very important 61.8% Fibonacci support level. We expect to see a move higher from here, ideally in impulsive fashion back to 98.64.
USDJPY 1h Chart-Elliott Wave Analysis

The reason for a bullish outlook is previous five wave rally in wave A) which is called an impulsive move.  Impulses show direction of a trend or temporary change in trend, that’s why we think that current trend is bullish, and that three wave retracement from 98.65 is temporary. Invalidation level remains at 95.75.
On the basic chart below you can see where USDJPY is at the moment.

Written by www.ew-forecast.com | Try ew-forecast.com’s services free for 7 days

Article by Investazor.com

If you are interested in forex scalping and you are a beginner, read our Forex Scalping – Complete Beginner to Advanced Strategy Guide to understand the concept. If you past the first steps it’s time to Choose The Right Broker For Scalping and also the best Currency Pair for your simple forex scalping system.

The strategy presented in this post it is one of the simplest and it can be used on currency pairs with medium volatility and low spreads like: EURUSD, GBPUSD and USDJPY. The recommended time frame is 5 minutes. The systems is a combination of candlestick patterns, which offers reversal signals, and the Relative Strength Index (RSI), which announces market exhaustion in overbought and oversold signals.

The candlestick pattern preferred for this scalping strategy is the Shooting Star. It announces a reversal of the power from the bulls to the bears. This pattern should be searched only on the highs of a trend, it is a bearish signal and it doesn’t matter the color of the candle.

The RSI used it is recommended to have 14 periods. If the number of periods is too small it will give many but of low quality signals, while if the number of periods will be higher the quality of the signal could improve, but the number will drastically drop.

Let’s get to the practical part of the trading. There are 2 scenarios that you could look for:

Look for a Shooting Star, drawn after a strong move, and for the RSI to get into the overbought area. If you get both signal from the RSI and confirmation from the candle stick pattern, open a sell order on the opening of the next candle after the formation, set a stop loss order above the Shooting Star’s upper shadow and a Take profit at 50% of the previous rally.

You can see an example in the image down below.

Again look for the same pattern, drawn after an ascending move, and for the RSI to draw a divergence. These signals do not appear that often on the 5 minutes chart, but the time frame can be reduced to 1 minute. The signals given by the divergences are usually stronger than the ones given by the overbought. Place the Sell Order at the opening of the next candle, set a Stop Loss above the Shooting Star’s upper shadow and the take profit at 50% of the previous move.

You can find an example down below.

Let’s make a short recap of this simple forex scalping strategy :

This system is pretty basic – It is a bearish system but the signals can be adjusted to work as a bullish one too. It works best on currency pairs like EURUSD, GBPUSD and USDJPY and the time frame recommended is a 5 minutes one.

A trader should look for the formation after a strong up move confirmed by an overbought RSI or a divergence on the oscillator. Set a sell order on the opening of the next candlestick; place a Stop Loss above the Shooting Star’s upper shadow and a Take Profit at the 50% of the previous move.

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