Month: July 2010

By CountingPips.com

The US dollar has been trading lower against the major currencies today following the release of worse than expected economic data out of the United States. The dollar has touched its lowest level against the euro in over a month following the ECB loan results while the American currency has fallen to a seven-month low against the Japanese yen in forex trading action this afternoon. A decrease in manufacturing activity and pending home sales as well as a rise in weekly jobless claims has weighed on the dollar and the US stock markets.

The American currency has declined versus the euro, British pound sterling, Japanese yen, Canadian dollar, Swiss franc and the New Zealand dollar while trading almost unchanged against the Australian dollar today.

Meanwhile, the US stock markets have had a negative session today with the Dow Jones industrial average falling by approximately 50 points at time of writing while the NASDAQ has tumbled almost 10 points and the S&P 500 has traded lower by over 4 points. Oil has fallen by approximately 3 dollars to trade at the $72.65 per barrel level and gold has declined sharply by approximately $35.00 to stand at the $1,210.60 per ounce level.

Manufacturing activity decreases

Manufacturing data released by the Institute for Supply Management showed that manufacturing activity dipped in June to a 56.2 score following a score of 59.7 in May. Although this marked the 11th consecutive month for expansion in the manufacturing sector, the score failed to reach market forecasts that were expecting a 59.0 score. A score in the ISM report above 50 percent is considered to be growth and less than 50 percent is considered to be a contraction.

Norbert J. Ore, chair of the ISM Business Survey Committee, commented in the report on the latest activity. “The manufacturing sector continued to grow during June; however, the rate of growth as indicated by the PMI slowed when compared to May. The lower reading for the PMI came from a slowing in the New Orders and Production Indexes. We are now 11 months into the manufacturing recovery, and given the robust nature of recent growth, it is not surprising that we would see a slower rate of growth at this time. The sector appears to be solidly entrenched in the recovery. Comments from the respondents remain generally positive, but expectations have been that the second half of the year will not be as strong in terms of the rate of growth, and June appears to validate that forecast.”

Pending home sales drop sharply

U.S. Pending Homes sales fell more than expected for the month of May as the government tax credit deadline expired in April, according to the monthly report produced by the National Association of Realtors. The NAR report showed that pending home sales contracts signed by buyers decreased by 30.0 percent in May following a 6.0 percent increase in April.

Market forecasters had expected the sales data would decline by 14.2 percent for the month. On an annual basis, the pending home sales level fell to 15.6 percent below the May 2009 level.

NAR chief economist Lawrence Yun commented in the report about the sales figures this month,”Consumers are rational and they rushed to meet the tax credit eligibility deadline in April. The sharp decline in contract signings in May is a natural result with similar low levels of sales activity anticipated in June.”

US jobless claims rise

U.S. weekly jobless claims increased by more than expected in the week that ended on June 26th, according to a release by the U.S. Labor Department today. New jobless claims rose by 13,000 workers to a total of 472,000 unemployed workers. The 4-week moving average of unemployed workers increased by 3,250 workers from the previous week to a total of 466,500.

Market forecasts were expecting jobless claims to total 460,000 workers following the prior week’s 457,000 claims.

Workers seeking continuing claims for unemployment benefits for the week ending June 19th also increased for the week. Continuing claims advanced by 43,000 workers to a total of 4,616,000 unemployed workers. The four week moving average of continuing claims dropped by 25,250 workers to a total of 4,567,500.

Nonfarm payrolls report

Tomorrow the market-moving government nonfarm payrolls report will be released at 12:30 GMT with market forecasters expecting a decline of 110,000 jobs for June. May’s payroll report showed an increase of 431,000 jobs although the great majority of those were temporary census government jobs and private payrolls added relatively few workers.

By CountingPips.com

The European common currency has surged higher in forex trading today against the US dollar and the other major currencies following the better than expected European Central Bank (ECB) lending program. The ECB announced today that it will lend 78 commercial banks a total of €111.2 billion for six days at a rate of 1 percent. Today was also the day that banks needed to repay the ECB €442 billion in 12-month loans from last year and the six-day loan results showed that many banks were in good position to repay their outstanding loans.

Today’s results were not as bad as many analysts had feared and quickly boosted the euro to higher levels against the dollar, Japanese yen, British pound, Swiss franc, New Zealand dollar, Australian dollar and the Canadian dollar.

The EUR/USD currency pair has touched a high point of 1.2474 so far in today’s forex market trading. This is the highest level the pair has reached since May 24th. The EUR/USD opened the day at 1.2228 and spiked sharply higher through many recent resistance levels on its way to almost 1.2500 and into overbought territory (RSI indicator) on the hourly time frame.

EUR/USD Hourly Chart

The forex market gives many advantages to investors. But we need to know where and how to start.

In the past, forex trading was extremely limited to few but large players such as the central banks, mega companies. In 1980’s the rule had changed, by allowing smaller investors to participate the foreign exchange using margin accounts. These accounts are the reasons why forex trading has become so popular. Using a 100:1 margin account, you can control $100,000 with a $1000 cash.

The Learning Curve

Learning Forex is not easy. Although it is easy to start trading, but to trade profitable, is another issue. Having some knowledge reduce the risk you involved. In this way, your trading decisions will become wise.

So as a beginner, we should learn and find out as much as we can about the market before we invest any amount.

Getting a Broker

Forex traders need a broker to handle their transactions. Most of the brokers are reputable and associated with banks or other large financial institutions. A forex broker will have to registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC). This serve as a protection against scams, fraud and other abusive trading practices.

Open an Account

Just fill up the form and give the necessary identification. The form includes a margin agreement which states that the forex broker may intervene with any trade that seems to be too risky. This is meant to protect the interests of the broker as most of the trades are carry out using the forex broker’s money.

Once your account has been created, you can start putting in money and trade.

Many brokers give different kinds of accounts to suit the needs of individual investors. Accounts like mini accounts allow you to trade forex for as little as $300. Standard accounts may have a minimum deposit of $1000 to $2500, depending on the broker. The amount of leverage also varies with the account type. Investors use leverage to profit from the fluctuations in exchange rates between two different countries’ currencies. The higher the leverage accounts are, the more money you will earn when you trade for a given investment. However likewise, these accounts can wipe your capital easily and fast if you do not trade properly.

All your trades are commission-free. There is no high brokerage fees you have to worry about when you make many trades. Brokers make their money on the pip spread, which is the difference between the bid and the ask prices.

Demo Trading

Everyone will advise to you that to get use to forex, you have to do a long period of time of demo trading. Brokers allow you to trade without any capital and practice your forex strategies through their demo accounts.

Beginners should use this chance to get used to their trading platform. Know how to use their software tools and navigate as much as possible. Every new forex traders should use these demo accounts until they are consistently making profits and go to an live account.

Read up

News, blogs, forums, books and many many more. Learn as much as you can from these free resources. Some brokers offer real-time quotes, news feeds, technical analyzes and tips to do well in your forex trading. Learning is one of the most important factor in forex trading. So never give up learning even though you are constantly making profits.

There are many different ways to make money. Forex trading is simply one of the best way to make good income. Just as long as you are prepare to learn, practice and never give up.

About the Author

Article courtesy of whizforex.com.

By Dan Eduard – With the release of the iPhone 4 dominating headlines, it may be a good time to take a look at how the popular device may be impacting the U.S. stock markets. Most of the press surrounding the iPhone 4 more or less reads the same. Talk of 1.7 million units being sold in only three days and of how Apple is now expanding the number of companies it will distribute the iPhone with, might lead spectators to certain assumptions.

If the iPhone is such a hot product, shouldn’t Apple’s stock be rising in value? Furthermore, shouldn’t the Nasdaq 100, where Apple trades, also be moving up? Investors may be surprised at the answers to both questions.

Apple’s shares on the Nasdaq 100 are down over 2% for the month of June. This is despite the seemingly endless demand for the iPhone. In addition, Apple recently announced that starting in January, Verizon will be able to sell the iPhone along with AT&T.

So how do we explain the drop in the stock market? It appears that Wall Street is waiting to see how well Verizon is able to market the iPhone ahead of its January release date. Furthermore, a perceived over saturation in the market may be causing investors to hesitate regarding the long-term success of the latest Apple product.

While we have explained the drop in Apple’s stock, how should we interpret the drop in the Nasdaq? After all, Apple is only one of 100 companies trading on this specific exchange. As seen in the chart below, the Nasdaq has entered a downward trend that began around June 21st. In order to understand this phenomenon, it is helpful to take a look at recent developments surrounding the iPhone 4.

Demand for the iPhone has been so high, that customers appear to be abandoning its competitor, the Blackberry. Blackberry is owned by Research in Motion, a company which recently saw its stock drop a shocking 4% in a single afternoon. It just so happens, that Research in Motion also trades on the Nasdaq 100. This could go a long way in explaining the Nasdaq’s recent bearish trend.

So to answer our original question: Is the release of the iPhone 4 causing the Nasdaq to fall? Most likely it is a contributing factor, although in no way the only one. Indices like the S&P 500 and Dow Jones Industrials have also bearish trends in recent days. That being said, when a product such as the iPhone is introduced into the market place, its impact can be felt in many different ways.

What do you think? Can a single product impact the stock market?

Nasdaq 100

Forex Market Analysis provided by Forex Yard.

© 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 CountingPips.com

Australian retail sales data released earlier today showed that sales edged higher in May but came in lower than expected. Retail sales increased by 0.2% on a seasonally adjusted basis to A$20.155 billion in the month of May following a seasonally adjusted increase of 0.6% in April, according to data by the Australian Bureau of Statistics. The sales results have increased for three straight months but May’s sales level represented the slowest increase of those three months.

The data failed to match market forecasts that were expecting the sales level to reach 0.3% for the month.

Contributing to the increase in retail sales for May was a gain by 1.7% in the clothing, footwear and other personal accessory retail sector while department store sales registered a 1.0% increase for the month. Also showing gains for the month were cafés, restaurants and take away food services (+0.8%), other retailing (+0.3%), and food retailing (0.2%). The largest negative contributor to the sales level in May was sales in household goods retailing which decreased by 1.4%.

New South Wales led the way for states and territories in retail sales increases with a 0.9% gain while Victoria also showed an increase by 0.2%. South Australia, Queensland, Tasmania, Western Australia, the Northern Territory and the Australian Capital Territory all registered negative retail sales levels in May.

In a separately released by the Australian Bureau of statistics, the total number of building units approved in May fell by a seasonally adjusted 6.6% compared to April. On an annual basis and despite the monthly decline, Australian building approvals are 26.6% above the May 2009 level. May private sector houses approved increased by 1.7% on a seasonally adjusted basis and are 9.2% higher on an annual basis.

Red alert on the Dow! Watch out! The Dow Jones Industrial Average (^DJI) is at risk of breaking down! From my last post about the index a couple of days ago (kindly check my past entry here), it has finally approached the neckline of a head and shoulders pattern. The NASDAQ, which I presented earlier today (see here), already shows a breakdown from the same formation. Now, will the Dow follow suit? Let’s hope not but there’s a big possibility that it might. The MACD in i ts daily time frame has already turned negative, suggesting a likely down move soon. Moreover, the RSI is also indicating that its downside momentum is gaining speed. So if and when the DJIA falls below the neckline support, it could slide all the way to 8,250.00. Now, that’s a huge drop! But if the neckline holds (I’m crossing my fingers that it does), the index could once again bounce and at least aim for the previous high around 10,500.00.

The recent decline in the index was due to the less-than-stellar rise in China’s leading economic indicator which only rose by 0.3% after posting a gain of 1.7% in the previous month. This was followed up by a weak US ADP employment change number that showed that US firms only hired about 13,000 new employees in June as opposed to the 60,000 expected.

Today, the major markets could once again experience some selling pressure if the US’s pending home sales have indeed dropped by 7.4% or worse in May. The US’s ISM manufacturing PMI is likewise seen to cool down to 58.9 from 59.7. This could pull the index down as well.

Tomorrow’s big time event that will surely cause some volatility on the markets will be the release of the US NFP employment change. according to the estimate of the government’s actual figure, US firms have cut about 103,000 jobs. Now, if the ADP number is correct, the NFP could also come in worse. Such would likely spark some broad based risk aversion, causing the equities and the non-dollar currencies to lose ground.

More on LaidTrades.com …

By Anton Eljwizat – The NZD has dropped significantly versus the USD in the past several days, and it is currently traded around 0.6805. And now as evident in the data below, the 8-hour chart is giving bullish signals, indicating that NZD/USD pair might go up. Forex traders can take advantage of this impending movement by having their Entry Orders in place to capture this reversal.

• Below is the 8-hour chart of the NZD/USD currency pair.

• The technical indicators that are used are the William Percent Range, Relative Strength Index (RSI), and Slow Stochastic.

• Point 1: There is a “doji” candlestick that has formed on the chart, indicating that a reversal should take place.

• Point 2: The Slow Stochastic indicates a bullish cross, signaling that the next move may be in an upward direction.

• Point 3: Point 1: The Relative Strength Index (RSI) indicates that the price of this cross currently floats in the oversold territory, signaling upward pressure.

• Point 4: The Williams Percent Ranges is showing that this pair is heavily over-sold and may be experiencing strong upward pressure.

NZD/USD 8-Hour Chart

Forex Market Analysis provided by Forex Yard.

© 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.

Market Analysis by Finexo.com

The Yen and the Dollar appreciated against their major currency counterparts as investors fled to more risk adverse assets amid rising concerns that the global economic recovery may be faltering. The Euro tumbled to a historical low level against the Swiss Franc after this morning’s weaker than expected Chinese Purchasing Manager’s Index re-ignited fears about the stability of the global recovery.

Up ahead, key Manufacturing data from both the US and UK will be released today. Manufacturing has been one of the few bright spots amongst a sea of disappointing figures throughout global economic recovery. Traders will be watching to see whether these positive trends continue. If they do, it will surely sooth investors fears over the possibility of a double dip recession.

EUR/USD
Selling pressure returned to the EUR/USD, as the forex market saw the Euro slip 0.1% to $1.2211. Risk sentiments are expected to dictate the direction of today’s sessions and if current negative sentiments continue the EUR/USD could very well return to the low of $1.2150 seen earlier this week.

The Euro rose yesterday as news broke that the European Banks had borrowed a substantially smaller amount from the ECB, than previously thought.  A report that the banks had borrowed 131.9 billion Euros instead of 210 billion Euros over a three month period pushed investors to buy the Euro as they realized that the European banks might be in a better financial state than they previously suspected. However, the amount still remains the highest ever borrowed in a three-month period and pales in comparison to the 442 billion Euros of one-year money which banks must repay to the ECB today.

Yesterday’s rally was short lived following a smaller than expected increase in U.S private sectors jobs, and a sound warning issued by Moody’s rating agency that it will cut Spain’s debt rating again.

Support/Resistance 1.2150/1.2245

GBP/USD
Positive trading momentum from last week’s Budget Release seems to have faded. The British currency slipped to a fresh 3-day low against the Dollar yesterday, after June’s ADP Non-Farm Payrolls showed a disappointing increase in the number of U.S private jobs.  The Pound hit $1.4965 during European afternoon trade, its lowest level since June 25th. Despite retreating from a high of $1.5100, seen earlier this week, the GBP/USD has found buying support around 1.4900/1.4950 and could easily rally higher if today’s Manufacturing figure is higher than predicted.

Support/Resistance 1.4900/1.4980

Forex Market Review & Analysis by Finexo.com

Disclaimer: Trading the foreign exchange (Forex) carries a high level of risk, and may not be suitable for all investors. All information and opinions contained on this website are to be used for general informational purposes only and do not consitute investment advice.

By Greg Holden – One of my favorite currency pairs for technical analysis is the GBP/USD. I’ve always enjoyed the trading behavior of the Majors for the simple fact that everyone cares more about them and the liquidity allows for relatively smoother movements. The more exotic pairs can be interesting, indeed, but the Majors never let you down. But this past week has put me in a bind regarding this favorite.

So I’ve decided to hit the “streets” and offer my take, hoping that the analysts among us can pitch in and help make sense of this.

The GBP/USD has two distinct signals completely at odds with one another. On one hand, the daily chart shows the pair trading within a very clear bullish channel, with the current price sitting at a trough within this trend. On the other, we have the weekly chart showing the pair within a clear bearish channel, sitting at a peak within this larger trend.

GBP/USD – Daily Chart

GBP/USD – Weekly Chart

To make matters worse, the MACD/OsMA on both is showing the opposite of what we’d normally expect. On the daily chart, where we’d expect to see bullish signals, we actually have a bearish signal; and vice versa on the weekly chart (see below).

Now, there is plenty of news to support a strengthening of safe-havens like the USD – such as the decline in CB Consumer Confidence figures yesterday and the forecast for a drop in NFP employment figures tomorrow – and there is also some data which supports a weakening GBP, such as declines in the UK housing market and the recent austerity budget.

So the hypothesis I would propose is to get away from these bearish and bullish channel analyses and change our perspective to a different chart formation taking place. On the daily chart we can also see, besides the bullish channel, a rising wedge formation with strong resistance lines roughly at 1.5160 and 1.5510. The signals would make more sense in this regard in that our daily MACD would show that a test of the lower border of the wedge is anticipated, but the weekly chart’s bullish signals point us in the direction of thinking that it will fail to breach and continue towards the apex of our wedge.

GBP/USD – Rising Wedge?

What’s your take? Should we follow the channel analyses and take a guess at which one is the more relevant, the daily or weekly chart? Or do we change focus and attempt a different interpretation of the data available to us?

Forex Market Analysis provided by Forex Yard.

© 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.

Good day to you people! It is sad to say that I got some bad news to deliver to you. The Nasdaq composite is an stock market index in the US that has over 3,000 listed technology and growth companies. This composite, though, is not exclusively a US index since non-US companies are listed here as well. In any case, this composite is one of the three major indices, alongside the DJIA and the S&P 500, that are highly followed by investors. Yesterday, however, the index plunged with a 1.21% loss, breaking the neckline of a head and shoulders formation in the process. The weak actually started off on a sour note as it opened with a bearish gap and was followed by two consecutive days of heavy losses. If the index is not able to creep back above the neckline, it would more likely drop further until it reaches its downside target at around 1,750.00. This scenario would actually place the index back on a bear market again. A couple of indicators suggest that this could happen. the first one is the MACD which already turned negative. The other one is the RSI which is now showing that the index is gaining some downside momentum. On the bright side, if risk aversion disappears and the buying resumes, the index could bounce back until it meets some resistance somewhere at 2,300.00.

Monday’s gap down was due to the poor results of China’s leading economic indicators. One of China’s leading barometers failed to get some fans when it only showed a gain of 0.3% after rising by 1.7% the other month. Yesterday’s drop, on the other hand, was due to the weak US ADP report which only showed that US firms had added 13,000 new workers as against the 61,000 expected. This weaker-than-expected result, now, could also reflect on the US government’s actual figure which will be reported this Friday. A less-than-stellar count in the NFP employment change would more likely hit the markets hard. Equities alongside  the non-dollar currencies like the AUD, NZD, CAD, EUR, GBP would further lose their appeal versus the safer ones like bonds, USD and JPY.

Meanwhile, the expected 7.4% slide in the US’s pending home sales, which is due for release today at 2:00 pm GMT could likewise place some selling pressure on equities and the major non-dollar currencies as well.

More on LaidTrades.com …