Why You Should Start Buying Into The Australian Share Market Now

By MoneyMorning.com.au

Here’s something that won’t surprise you.

Or rather, it shouldn’t surprise you.

If it does surprise you then you really haven’t been paying attention.

What’s the big non-surprise?

Stock markets are risky. And yet it seems as though some of the smartest people around are only just starting to figure that out…

It’s funny how different people react to the Australian share market.

We’ve warned for well over three years now that the stock market is risky.

But we also warned that despite the risks of investing, it was a bigger risk not to invest.

With interest rates at record lows it’s quite frankly almost impossible to get a decent return without using leverage on any investment except stocks.

And this risk in the Australian Stock Market isn’t about to end anytime soon, even though the central banks would have you believe that interest rates will rise within two years. That’s hogwash.

Interest rates aren’t likely to go up within the next five years. And they may not even go up in your lifetime. That’s why we’ve made a bold call for the S&P/ASX 200 index to hit 15,000 points – more than triple where it is today .

Did they miss the past six years?

And yet a bunch of commentators still can’t seem to grasp the idea that this is and has been a risky market.

It’s as though they’ve lived in a bubble for the past six years, totally unaware of everything that has happened.

Take this op-ed in the Financial Times from Mohamed El-Erian, the chair of President Barack Obama’s Global Development Council, and a former big shot at PIMCO, the world’s biggest bond fund:

Markets have been sanguine about geopolitical risk for several years now, a phenomenon illustrated by the relaxed approach they have taken to Ukraine’s crisis. There are understandable reasons for this, but contrary to a popular saying, this could well be a case where the trend is not necessarily the markets’ friend.

After just one day of extreme nervousness, global markets had little problem digesting a major change in the map of eastern Europe. And Crimea’s annexation is not the only notable development in a crisis that has repeatedly surprised quite a few experts.

We have to say it. Is Mr El-Erian kidding?

He says share markets have been ‘sanguine‘ about geopolitical risk. In other words, he’s saying that markets have been happy or satisfied about the risk in the world.

He’s got to be kidding. Didn’t he notice the hullaballoo and ruckus about Libya, Syria, Ukraine, North Korea, China, and any other number of crises that have reared up since 2008?

We listed 19 such problems just a few weeks back. Granted, they weren’t all geopolitical events, but let’s be honest, there’s a superfine line between geopolitical and economic risks. One has a nasty habit of turning into the other.

And yet, so far nothing has happened. 19 crises and counting since 2008, and the result? Most stock markets worldwide have gone up. One exception…one big exception is China.

From the Port Phillip Publishing Library

Special Report: ASX: 15,000

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By MoneyMorning.com.au

Buying Into China’s Economy While Investors Panic Over ‘The Crash’

By MoneyMorning.com.au

It’s an obvious point that the mainstream financial media missed: China’s Economy has already crashed, the bounceback is still to come.

Sorry, but we agree with pascoe

It’s a pretty rotten day when your editor finds agreement with Michael Pascoe. Yet that’s the position we’re in this morning.

In an article for the Age, Pascoe pours cold water on the latest data coming out of China. The mainstream is getting into a bit of a fluster that China’s economy could be slowing down.

This will apparently lead to an almighty crash. But Pascoe makes a good point, which in all honesty we can’t argue against:

As the Chinese economy is almost twice as big now as it was in 2007, growth of 7 per cent is a similar increase in real economic activity as 13 per cent growth was seven years ago. China will still overtake the US as the world’s biggest economy before the end of the decade.

Actually, we can make one small point to counter it. Whether it begins a big point is anyone’s guess. The issue isn’t so much the rate of growth but the growth that businesses expect.

In other words, if businesses have invested by buying new machinery and materials on the expectation of 7.5% growth and the growth is ‘only’ 7%, then it would have an impact.

A comparison is if an individual starts spending money based on the expectation of a 5% pay rise but only gets a 4% pay rise. It may not be a huge difference but it would likely impact that person’s spending for the following year.

It’s not a perfect comparison, but you get the point.

First the China bubble burst, then the ‘bounceback’

But either way it’s also important to remember something we’ve tried to bang home for the past few months.

Those holding out for a Chinese economy crash may not realise that in stock market terms it has already happened. The following chart of China’s CSI 300 index makes that clear:


Source: Google Finance
Click to enlarge

Since late 2007 when China’s market hit the top, it has fallen 62%. It’s a big fall…a very big fall. So it’s somewhat laughable for some folks to say China is still a bubble.

So is now the time to buy back into the China Economy story? That’s where we’re putting our money.

It’s always dangerous to try and catch a falling market. Jason made that point in his latest issue of Diggers and Drillers when he recommended a classic ‘bounceback’ story in the mining services sector. If Jason is right, a quick 50%+ gain could be on the cards.

But as for catching a falling market, as a speculator we don’t mind the risk of getting on a story early. The fact is you can never be sure when the market will turn.

We’d rather get in early with a small exposure and then add to it over time rather than waiting for the market to make a decisive turn upwards – by then you will likely have missed some of the big early gains.

Cheers,
Kris+

PS: If you can’t make it to Melbourne for our World War D conference on March 31-April 1, don’t worry. We’ll be live tweeting the event throughout the two days. To get all the action live, follow us on Twitter @MoneyMorningAU

From the Port Phillip Publishing Library

Special Report: ASX: 15,000

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By MoneyMorning.com.au

Don’t Believe The Lies About Interest Rates And Inflation

By MoneyMorning.com.au

Last week, Martin Weale of the Bank of England said:

Interest rates could rise within a year, and risk going up sharply if inflationary pressures begin to build.

And that sentiment had the markets jumping (or should I say falling?) to attention. Well, of course it would. When interest rates rise, that’s when the house of cards finally topples.

The West is over-borrowed, and rising interest rates would cripple governments, businesses, and individuals alike. But just as importantly, low rates are exactly what have gee’d up most investment assets classes over the last five years. Shakers…is it all about to go pear-shaped?

The truth is, nobody knows exactly when the big interest rate reset will come. Here at The Right Side, I’ve been a proponent of the ‘Interest Rates will stay lower, and longer, than anyone believes’. And investing in stocks and fixed interest off the back of this belief has seen great returns over the last five years or so.

Sure, we don’t ignore market signals. But it always pays to put them in context.

What’s causing inflation?

Monetary Policy Committee member Martin Weale was wheeled out last week to warn about an imminent rate rise. His rather spurious argument goes along these lines…

The economy is doing rather well. That means people are buying more stuff. And there’s not enough ‘capacity’ (the ability to create goods and services) to allow this growth in demand to continue without pushing up prices. We should get ready to see inflation rise…and in order to tame it, rates will be going up. Quite possibly sooner than the markets believe.

Now, of course, there are some elements of truth in this idea – if there’s scarcity of supply, prices tend to go up. But are we really living in such a world? I mean, when inflation has gone up in the recent past, was it down to large queues developing at the hairdressers, or butchers? Was it a lack of baked beans on the shelf?

No. Where inflation has cropped up, it’s been down to rising global energy and commodity prices. It’s been because the pound has been weak. Yes, possibly because some clever pricing strategies and collusion in specific sectors like aviation, insurance and banking. But price rises have rarely been driven by limited capacity.

The truth is, these guys are regularly wheeled out to send out the same message. To give the sense that rates are about to go up. They need to do this to placate angry savers, and in a vain effort to quell the housing market.

There’s always an excuse to keep interest rates down

Bonds, stocks, house prices…all these things are ‘priced-off’ low interest rates. And last week’s market weakness was directly proportional to the fact that ‘players’ now believe rates may rise sooner than expected.

Well…it’s the market’s prerogative to jump on every utterance from a central bank, or after the publication of some bit of data. But over the medium- to long-term, this is all just market noise.

Over the last five years or so, the market has consistently priced in an imminent rate rise. And it’s always been wrong. During the financial crisis, the ‘emergency rates’ were seen as just that, an emergency level. And then, the curve has always kind of factored in rising rates a year or two out.

But it’s funny how when that year or two is up, the rise never occurs. Something always seems to crop up which justifies low rates. Yet, they maintain the illusion that rising rates are just round the corner.

And I’ve got no doubt something will crop up again. I don’t know what. Geopolitical tensions, bad employment data, a swooning stock market. Who cares? The central banker will find an excuse to keep rates bolted to the floor. Of course they do. And in the UK, the biggest borrower of them all still needs to find some £80bn a year to balance the books…so of course the planners need rates to stay low!

When the inflation levee breaks

The only thing that can possibly change the situation is if inflation really does take off. And I’m not talking about the type of gentle inflation in Martin Weale’s computer models. You know, the type of inflation the central banks forecast, ie the forecasts and formulas that never work!

I’m talking about proper inflation. The type that is completely unpredictable. The type of inflation that’s borne of public psychology.

So, the trap is set. Raise rates and risk financial apocalypse. Keep rates low and risk an unpredictable explosion of inflation.

Obviously, the planners go for the latter option. After all, what sane person would induce a controlled collapse? Better to go for the uncontrolled type…you can always blame that on events outside your control.

Let’s look on the bright side. This means more asset price inflation for the moment. And anyway, over the medium- to long-term we can still look to other markets for sanity. Markets like Africa, the Far East…or even…yes, Russia!

Bengt Saelensminde,
Contributing Editor, Money Morning

Ed note: The above article was originally published in MoneyWeek.

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By MoneyMorning.com.au

Brien Lundin: East Meets West in Junior Market Rebound

Source: Brian Sylvester of The Gold Report (3/24/14)

http://www.theaureport.com/pub/na/brien-lundin-east-meets-west-in-junior-market-rebound

Can you hear it? Brien Lundin does. It’s the sound of the junior resource market mounting a comeback. Lundin, editor of Gold Newsletter, president and CEO of Jefferson Financial and the man behind the New Orleans Investment Conference, traces the rebound to Western speculators coming to the market at the same time that Asian buyers are maintaining a strong level of demand. In this interview with The Gold Report, Lundin pinpoints the fastest horses in his stable of top picks.

The Gold Report: I’m hearing something and I think it’s the sound of a junior market rebound. What are you hearing?

Brien Lundin: Yes, I hear it. I’ve been very cautious despite a few rallies and bounces since last fall, but momentum is building. We saw a lot of tax-loss selling in the metals at the end of the year, and thus the beginning of the year saw a natural rebound in the resources markets. That momentum has been backed by metal buying in Asia, which, in turn, attracted more speculative buying from the West. In short, speculators and speculative enthusiasm are returning to the junior market.

TGR: In the March edition of Gold Newsletter you suggest that Asian precious metals demand is underpinning the rising gold price. That’s not a new narrative, but tell us what’s changing with that story.

BL: Asian demand wasn’t surprising. In mid-April speculators, in what appeared to be a very coordinated attack on gold, drove the price down by hundreds of dollars an ounce in a couple of trading sessions. That spawned a burst of Asian gold-buying demand. Historically Asians are very price-sensitive buyers. What’s surprising is that the higher level of demand has yet to abate. It’s encouraging for gold bugs and somewhat surprising.

TGR: Alasdair Macleod, head of research at GoldMoney, puts China’s gold imports at 2,668 tons in 2013. If he’s correct, that would be one-quarter of all the gold reserves in the U.S. Do you believe his number is accurate?

BL: I do. He’s done the best work I’ve seen. The World Gold Council places it at less than half his number, but that doesn’t account for a lot of the buying that we’ve seen through the Shanghai Gold Exchange (SGE).

The SGE is essentially a physical delivery mechanism, unlike the Comex in the U.S., where gold investors and gold savers in China actually take delivery of gold. Macleod uses those figures as a starting point and conservatively nets out the various flows in and out of Hong Kong so that there’s no double counting.

Still, his numbers appear to be conservative because there are other entry points into China that are not accounted for. His numbers are still much more accurate than some of the other more mainstream sources of information.

That number—2,668 tons of gold—is not much less than the entire level of gold production last year. In other words, almost every ounce of newly mined gold is going into China. That’s important. That’s dramatic evidence for a new secular trend of Asian buying.

TGR: Any theories on what China is going to do with that much gold?

BL: This level of demand implies that something is up—that there’s some type of official encouragement or plan afoot. There was recently some speculation that China was about to reveal its level of gold reserves, but it hasn’t. Whether the gold it is buying now goes into official reserves or into the hands of its citizens, it’s gold in-country, which is effectively national reserves. It’s part of a long-term plan to establish China as a preeminent global economic power.

TGR: And maybe world economic reserve currency?

BL: More likely as a global economic reserve currency of equal standing to the dollar, and perhaps to the euro.

TGR: Newsletter writer Jim Dines has been called a “connoisseur of bottoms.” Gold recently put in a double-bottom. How have those been positive for the gold price?

BL: A double-bottom on a chart is a very powerful pattern that implies a robust rebound. That’s exactly what gold has put in place since the first bottom in June 2013 and the second bottom in December. There’s been a very steady and consistent rise recently, in contrast to the pattern of “two steps back, one step forward” that took hold in 2013. In 2014, it’s been closer to five steps forward, one step back.

TGR: The junior market rebound is not just about higher commodity prices. What other factors are involved?

BL: Sellers got exhausted. Once there are no more sellers, there is a natural rebound. That upward trend is gaining momentum and in turn attracting more speculators as the technical picture improves.

TGR: As things heat up, how can investors identify the promising juniors?

BL: Go to conferences. Subscribe to newsletters. Find companies with proven resources. Investors can buy companies with established resources for the same price that ground-floor exploration companies were selling at a few years ago. Why take on the additional risk of exploration when you can buy ounces in the ground?

TGR: Many of the companies you follow in your newsletter are developing projects with resources in Mexico. What are three or four juniors that are poised to ride the rebound?

BL: Mexico is one of the most prospective exploration frontiers. Regulatory and tax events have thrown a damper on the area, but explorers and developers still have to go where the gold and silver is, and Mexico has proven to be one of the best places to find new deposits.

A number of companies in our portfolio are exploring there. I particularly like Santacruz Silver Mining Ltd. (SCZ:TSX.V; 1SZ:FSE). It has three projects at different stages—one in production, one nearing production and one that is defining a resource. Its future is laid out clearly for investors to see. It has great management with a proven ability to bring a project into production on a shoestring budget—and still ahead of budget and ahead of schedule. It’s a silver growth story.

TGR: Santacruz is similar to other more established companies, like First Majestic Silver Corp. (FR:TSX; AG:NYSE; FMV:FSE) and Endeavour Silver Corp. (EDR:TSX; EXK:NYSE; EJD:FSE), in that it took a past-producing asset and made it work. Could Santacruz reach the level of those companies?

BL: Yes, it has a plan that’s realistic and it has management and financial backing to bring it to fruition. The only question is the timing. If you’re looking for a silver company that will grow significantly in resource and production over the next three or four years while you ride a rising wave of silver prices, then Santacruz is one of the best bets out there.

Another company I like is Almaden Minerals Ltd. (AMM:TSX; AAU:NYSE). It’s a company run by Duane and Morgan Poliquin, who I’ve known for more years than I care to mention. Almaden is an interesting company that’s been able to keep its share structure tight and deliver value for investors. It’s been a consistent winner in our portfolio during the past dozen years or so.

It was one of the companies that adhered very closely to the prospect-generator model before it became popular to do so. It farmed out every one of its projects. Almaden decided a few years back to finally drill a few of its projects. Sure enough, the second project it decided to drill itself, the Tuligtic project in Mexico, yielded a tremendous discovery on the Ixtaca gold-silver zone. Almaden has consistently expanded that discovery.

TGR: Almaden has 4.5 million ounces (4.5 Moz) Measured, Indicated and Inferred, which is a solid resource. Who is in the market for an asset like that?

BL: The majors are not in the market to any great degree right now, but eventually will be. If you buy value, everything else will take care of itself. Smart money was behind this stock at $3/share. At about $1.50/share, it’s proven value.

TGR: Take us on a tour of other hot names in Mexico.

BL: Cayden Resources Inc. (CYD:TSX.V; CDKNF:OTCQX) was created essentially by the same team as Keegan Resources, which is now Asanko Gold Inc. (AKG:TSX; AKG:NYSE.MKT) in Ghana. Like Asanko, Cayden’s stock has rarely been cheap, but there’s always been value there. There’s a lot of smart money in Cayden because it does not have to finance for another couple of years.

Cayden has two premier exploration properties, one of which, the Morelos Sur property, is adjacent to Goldcorp Inc.’s (G:TSX; GG:NYSE) Los Filos mine, and is a valuable property position. Cayden received about $16 million ($16M) in a transaction from Goldcorp for part of its property, which allows it to explore its other prime area, the El Barqueño gold project, for the next couple of years without issuing another share or doing another financing.

That’s the project that has the greatest potential to deliver big news in the near term, and I fully expect it to do so. It has some of the best surface-exploration results I’ve seen on any Mexican exploration project and Cayden has only done the first phase of drilling.

TGR: Cayden CEO Ivan Bebek believes that some of the Los Filos mineralization runs over onto Cayden’s property.

BL: Cayden has already gotten some results at depth on the Las Calles target. Cayden is confident that at some point Goldcorp will want to buy that portion of its property because the mineralogy extends onto Cayden’s ground. That property seems destined to be sold to Goldcorp and could provide substantial new funding for Cayden.

TGR: What are some of the other names getting regular ink in Gold Newsletter?

BL: I like companies with resources on sale at a fraction of what they’ve sold for before. Columbus Gold Corp. (CGT:TSX.V), which has the Paul Isnard deposit in French Guiana, has no more development risk until prefeasibility. That allows it to focus on an exciting portfolio of exploration projects it has in Nevada. Columbus Gold is one of those companies that has a number of ways to advance, and is a bargain at its current levels.

TGR: Can an asset in French Guiana be developed?

BL: Absolutely, especially when a major company like Nordgold N.V. (NORD:LSE) is funding the project. Most of the gold production in French Guiana is unofficial, below the radar and smuggled out. There aren’t a lot of reliable statistics for gold production in French Guiana because so much is not reported. A project of this size that’s so well-backed is not a problem.

Closer to home I like Midas Gold Corp. (MAX:TSX). Midas’ Golden Meadows deposit in Idaho is getting great results and has attracted a lot of investors. It’s another smart-money play.

TGR: Midas recently announced a $12.8M private placement. What do you think the company will use that cash for?

BL: Developing a resource. I don’t think that Midas is going to be the company to bring this project into production. It will get bought out at some point.

Another company that I’ve been very high on recently is Brazil Resources Inc. (BRI:TSX.V; BRIZF:OTCQX). It’s run by Amir Adnani, who is well known as the entrepreneur who brought Uranium Energy Corp. (UEC:NYSE.MKT) from an idea into one of the first new uranium producers in North America.

Brazil Resources is buying resources for pennies on the dollar in Brazil. It’s taking companies that have failed during the market malaise and buying their resources. It has accumulated about 4 Moz in a flash.

TGR: Does Brazil Resources have the cash?

BL: It has plenty of cash and smart financial backers: The Casey Group and Sprott Asset Management. Brazil recently did a financing of $6.4M in late December. It’s building a war chest for new acquisitions. It’s a company to watch for news flow and acquisitions.

TGR: What are a couple of themes you expect to dominate in the junior space in 2014?

BL: Buying established resources while they’re still on sale is a theme that will endure for much of this year, but the opportunity is beginning to wane. High-quality companies have already doubled or more in value from where they were in late December. They’re still at good prices and values, but the opportunity is diminishing.

An ever-present theme is drill-hole plays, or companies that are making discoveries. When that happens, it gives a jolt to the market both for that company and for companies in the surrounding area.

Even in the worst correction the junior resource industry has seen for many years, there were plays like Fission Uranium Corp. (FCU:TSX.V), which is spectacular with its Patterson Lake South discovery. That’s going to go down as one of the greatest mineral discoveries in modern times, regardless of the metal or mineral involved. It’s still growing. It has a 100% drill success ratio record. Plays like that continue to pop up.

Those kinds of reratings in market value are the most explosive when a company can make a discovery like that.

TGR: What are you doing in Gold Newsletter this year to attract subscribers?

BL: I’m offering some opportunities for lower-cost subscriptions. We recently went to an all-electronic format. It allows us to send out interim recommendations and alerts as new opportunities emerge. There’s no more delay between when I see an opportunity and when our readers get a hold of it.

I actively cover about 35 companies. I’m starting to cull the number down to focus on the faster horses. I see a number of exciting new opportunities emerging that I want to get into the portfolio, too.

TGR: It’s always about editing your portfolio as an investor.

BL: The buying part is easy. The selling part is more difficult.

TGR: Thanks, Brien.

With a career spanning three decades in the investment markets, Brien Lundin serves as president and CEO of Jefferson Financial, a highly regarded publisher of market analyses and producer of investment-oriented events. Under the Jefferson Financial umbrella, Lundin publishes and edits Gold Newsletter, a cornerstone of precious metals advisories since 1971. He also hosts the New Orleans Investment Conference, the oldest and most respected investment event of its kind.

Want to read more Gold Report interviews like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Streetwise Interviews page.

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 Streetwise Reports: Santacruz Silver Mining Ltd., Almaden Minerals Ltd., Cayden Resources Inc., Columbus Gold Corp., Brazil Resources Inc. and Fission Uranium Corp. Goldcorp Inc. is not associated with Streetwise Reports. Streetwise Reports does not accept stock in exchange for its services or as sponsorship payment.

3) Brien Lundin: I or my family own shares of the following companies mentioned in this interview: Cayden Resources Inc. and Fission Uranium Corp. I personally am or my family is paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. 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.

4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts’ statements without their consent.

5) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer.

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The Different Types of Forex Accounts

Forex Accounts

There are so many choices out there when it comes to the different types of Forex accounts. Most are quite familiar with the Forex demo account. The Forex demo account is where you get to test drive Forex trading software. Most Forex brokers will allow you to select your demo account deposit amount. You can then try out all the bells and whistles of the software and all the features that the particular Forex broker may offer. If the broker is a MetaTrader 4 broker, then you can try out your trading system or your automated trading expert advisor. The Forex demo account can be a great way to get comfortable with the Forex brokers software and with getting used to placing a Forex trade.

The other type of Forex account is a real account or a live Forex account. This is where the Trader deposits money with the broker and that money is credited to his account within the trading software. The Forex traders’ trades are calculated in real time and his profit and loss is shown on the trading software. With most Forex brokers, there are more than one type of real or live Forex account. Most Forex brokers now offer what are referred to as mini accounts. The Forex mini account is usually an account with a smaller deposit amount and allows the Forex trader to trade in small increments. The Forex mini account can be very useful for those that use automated trading system and also those that are looking to limit their risk exposure.

A standard Forex account is the normal account that’s provided by most Forex brokers. The deposit level for these accounts is usually higher than that of the mini account and are for those who look to trade higher amounts. The trading increments is that of a standard lot or what is standard for accounts with a deposit of US$100,000. Many Forex brokers also offer what are referred to as an ECA and Forex trading account. Once again these are higher deposit accounts than the standard account and may have limited leverage.

 

To learn more please visit www.clmforex.com

Disclaimer: Trading of foreign exchange contracts, contracts for difference, derivatives and other investment products which are leveraged, can carry a high level of risk. These products may not be suitable for all investors. It is possible to lose more than your initial investment. All funds committed should be risk capital. Past performance is not necessarily indicative of future results. A Product Disclosure Statement (PDS) is available from the company website. Please read and consider the PDS before making any decision to trade Core Liquidity Markets’ products. The risks must be understood prior to trading. Core Liquidity Markets refers to Core Liquidity Markets Pty Ltd. Core Liquidity Markets is an Australian company which is registered with ASIC, ACN 164 994 049. Core Liquidity Markets is an authorized representative of Direct FX Trading Pty Ltd (AFSL) Number 305539, which is the authorizing Licensee and Principal.

 

 

 

 

EUR/USD Forecast March 24 – 28

Article by Investazor.com

After six consecutive weeks, the US dollar managed to win the weekly battle in front of the EUR and pushed the quotation below 1.3800. The US dollar received some help from the weak European macroeconomic data and the speech Janet Yellen gave at the FOMC meeting. CPI y/y fell short of the expectations with a reading of 0.7%. The German ZEW Economic Sentiment disappointed with a value of 46.6 while the forecast was 52.8.

The newly crowned FED Chairman, Janet Yellen, managed to surprise the audience and the markets with an unexpected answer to the question, how much “considerable time” means in terms of the length of time when the Federal Reserve will raise the interest rates after the tapering comes to an end. Her answer, “around six months”, induced some panic in the markets, which was beneficial for the US dollar and sent EURUSD to a low of 1.3748.

Economic Calendar

Monday

German Flash Manufacturing PMI (8:30 GTM). Last month this indicator came below the estimated value for the first time in the last five months, so it will be interesting to see if the German manufacturing sector can surprise on the upside. This indicator it is a leading one for economic health and a reading above 50.0 indicates industry expansion.

Flash Manufacturing PMI (1:45 GTM). This indicator that measures the level of diffusion index based on surveyed purchasing managers in the manufacturing industry it is considered a medium impact indicator on the US markets. In February, the value was better than the expectations and for this month it is expected to come at 56.6.

Tuesday

Latest EURUSD posts:

EUR/USD Price Action For March 24;

EUR/USD Price Action For March 21;

EUR/USD Price Action For March 20;

EUR/USD Price Action For March 19;

EUR/USD Price Action For March 18;

EUR/USD Price Action For March 17;

The post EUR/USD Forecast March 24 – 28 appeared first on investazor.com.

Dovish Tone Looks Inevitable Ahead Of Lowe Speech

Capital Trust Markets – A little after midnight on Monday, Reserve Bank of Australia (RBA) Deputy Governor Philip Lowe is set to speak at the Australian Securities Investment Commission Annual Forum 2014 in Sydney. The speech comes at a highly poignant time, as traders and investors seek out clues as to the performance of the Australian economy, and in turn, the future of its economic policy, in the wake of a potential Chinese economic slowdown.

How might the speech affect the value of the Australian Dollar, and what are the levels to keep an eye on?

In a number of his most recent speaking engagements, Lowe has highlighted the importance of access to startup capital for new businesses, which could be interpreted as dovish. The RBA has already cut its rate to a record-low 2.5%, and statements made by its roster suggest that this will remain so for the foreseeable future, but traders and investors will be well aware that any signs of trouble could spark further cuts.

At present, the main worry for Australia is China. China compounded its spate of data misses on Sunday reporting HSBC manufacturing PMI data at 48.1%, a decline on both the previous 48.5 and the expected 48.7. The data sparked an early sell-off in the AUDUSD, but was not enough to maintain bearish momentum in the pair as current Monday lows at 0.9048 served up strong support. A US manufacturing miss strengthened the upside momentum and the pair looks set to close out the day just shy of resistance at 0.9152 and the 200-day SMA.

If, as many predict he will, Lowe addresses the potential for Australian collateral damage in the wake of a Chinese slowdown, it would be difficult to avoid a dovish tone. While not a certainty, an interest rate cut would be high on the agenda if China cuts its Australian imports; a situation that looks more and more realistic with every Chinese release. Add this to the dip in mining sector investment, which employs more than 750,000 Australians, and there is plenty of potential for downside in the AUDUSD.

A dovish tone would strengthen the resistance below which price currently resides, and offer up an initial downside target at the psychologically significant 0.9000. Looking longer term, a close below this level would validate a target of 0.8893 support, and beyond that, long term lows at 0.8660.

 

Written by Samuel Rae – Currency Strategist at Capital Trust Markets

Capital Trust Markets is a fully regulated and compliant online Forex Brokerage, offering a flawless trading environment to traders of all types. The world class trading infrastructure – backed up by advanced trading tools and cutting edge trading software and technology – is combined with award winning customer support to provide a highly successful blend of customized trading solutions.

 

 

 

 

Technical Focus on AUDUSD

AUDUSD Threatens The 0.9132/5 Levels

AUDUSD: With AUDUSD following through higher on the back of its Friday gains, the challenge is for it to break and hold above the 0.9132/5 levels. That zone has held on many occasions and it will be difficult for the pair to break but if that occurs, further strength should build up towards the 0.9166 level. Further out, resistance comes in at the 0.9200 level, its psycho level. A cut through here if seen will aim at the 0.9236 level its 200 ema and subsequently the 0.9300 level. Its daily RSI is bullish and pointing higher supporting this view. On pullbacks, support lies at the 0.9048 level followed by the 0.8994 level, its Mar 20 2014 low. A breach will expose the 0.8950 level and then the 0.8906 level. Further down, support comes in at the 0.8850 level. All in all, the pair remains biased to the upside on bull risks but vulnerable on correction.

Article by http://www.fxtechstrategy.com/technical-focus-on-usdchf-new-11

 

 

 

 

EUR/JPY Technical Analysis – Sentiment Remains Neutral

Sentiment for EUR/JPY remains neutral after the pair put a stop to the uptrend and quickly entered a week long range. Between 140.44 and 141.96 the pair has been increasingly choppy, yet the upper and lower limits have been respected all too well each and every time they were tested.

EURJPY 4H

The uptrend for February – March is still technically intact, with the two lows at 140.44 marking the most recent swing low. This recent range, however, points to bullish weakness as EUR/JPY failed to continue towards a higher swing high.

The 200 simple moving average on 4H has finally caught up with the support, adding further strength to this area. A bearish breakout would invalidate the uptrend opening the way down to  139.10, where the next support confluence is located.

If EUR/JPY bounces off of 140.44 it can be seen as a bullish signal, yet only a break above 141.90 will technically confirm the return of the bullish trend towards 143.75 and possibly even 145.66.

 

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Prepared by Alexandru Z., Chief Technical Strategist at Capital Trust Markets

 

 

 

 

 

 

 

Israel holds rate, changes depend on CPI, growth, shekel

By CentralBankNews.info
   Israel’s central bank held its benchmark interest rate steady at 0.75 percent, as expected, saying future rate changes depend on “developments in the inflation environment, growth in Israel and in the global economy, the monetary policies of major central banks, and developments in the exchange rate of the shekel.”
   The Bank of Israel (BOI), which last month made a surprise 25 basis point cut in its policy rate, said inflation was within the bottom range of the central bank’s target range and it is likely that over the next several months it could fall below the range temporarily though it is expected to return to within the target range toward the beginning of 2015.
    Israel’s inflation rate fell to 1.2 percent in February from 1.4 percent in January. The BOI targets inflation of 1.0 percent to 3.0 percent. In April and May last year, inflation fell below 1.0 percent. In 2013 the BOI cut its rate by 75 basis points.
    The BOI’s rate cut last month was in reaction to the surprise fall in January inflation, pessimism among consumers and continued strength in the shekel.
    Despite the further decline in inflation in February, the BOI said private forecasters’ inflation projections were unchanged at an average of 1.6 percent over the next 12 months. Private forecasters do not expect the BOI to change rates in the next three months.