By Warren Seah – Whenever i attended any forex seminar, I can vouch that almost everyone that I’ve met asked the trainer the same questions. “When is the good time to enter a trade?, what are the indicators to show a good entry signal?, What is your strategy you are using to enter that awesome trade?”

This happens all the time, and before the trainer could even share more on other trade essentials, people just move away and start discussing all those great entry ideas. In the end the trainer just thought that maybe these people aren’t interested in other stuff other than entries, so he should not share them further.

I was increasingly frustrated that how come trading revolves only around the hottest entry techniques or that pin point entry signal that promises juicy profits? Isn’t there much more to trading than just entries?

I went to read up on all sorts of trading books, many of which focusing on entries and strategies. Until I start noticing some books mentioning about trade management, risk management, trading psychology and exits.

Exits?! I didn’t think of that at all and somehow it made sense to me. Of course for every entry into the market you need to get out and how do I get out I do not know. I know nothing about proper exits nor do I know when to get out. All I know was that i will get out of the market if something feels wrong or that the chart seems to be acting strangely. I exited without any reason at all.

Sometimes I do not even attempt to exit, feeling that I’m on a winning momentum when things goes my way or when conditions goes back and I hope to recover back all that I have lost. I had this fear with me all the time whenever I want to exit.

To put it simply:

1. I exited at the wrong time mostly

2. I had fear of exiting the market

But these 2 problems can be solve if I had 2 things in combination:

1. Trade management planning

2. Automation trading

If I developed my own sets of trade exits rules before I enter the market, I will know that I have a set guideline to follow when I am in trouble. If I am able to automate my trade management system, I do not need to fear of not being to execute my exit commands.

That way, I can build up my confidence in trading while I attempt to find a suitable forex exit strategy for my own trading strategy. So for retail traders like you and me in order to have profits from our trades, we need to develop our own exit strategies and automate it to work for us.

Feel free to use this article on your website or ezine as long as the following information about author/website is included.

About the Author

Warren Seah

“Introducing 11 Exit Strategies, What Every Disciplined Traders Need … Go Without It You Could End Up Being A PIP VICTIM Just Like Thousands Of Traders Out There.”

Download Your Forex Exit EA Now

By Warren Seah – Beginners hardly think of the cost of currency trading, yet transaction costs are a leading cause of trader mortality. Adjusting and limiting the cost of trading will gives you an advantage over majority of traders in the market.

If you buy at $1.00 and sell at $1.10, and you do these type of transaction 10 times in 1 hour. Each transaction will give you $0.10 profit and it will be $1.00 per hour. In reality, you won’t make a $1.00 profit every hour. Professional traders focus on these costs and do everything to reduce them. Lets reduce what are the ‘forces’ that are eating your profits away even without you knowing about it.

1. Commissions

Commission is usually not charged in forex trading. Unless you are using an ECN broker, due to the small spreads they offered, they will charge you commission based on how many standard lot you traded per month.

2. Slippage

Slippage is the difference betwen the price at the time you placed your order and the price at which that order got filled. You may place a market order at $1.00 and your broker told you that the price you want is not available and it has moved to $1.10, and if you agree to buy at the new price, the slippage will be $0.10.

Some orders other than market order can be slippage-proof. They are limit and stop orders. A market order letyou buy or sell immediately, at whatever the price you get at the moment. However at certain time of the day, price movement can be very fast, and market order still will not provide you with the price that you want. Only execution is guaranteed but not the filled price.

3. Spreads

Spread is the difference between the bid and the ask price. Most of the brokers will adjust their spreads according to the liquidity at that point of time. Day time spread is usually smaller than night time spread (GMT Hr). It is because most of the biggest banks are opened during the day time. They are the major liquidity providers for the forex market. This contributes to a small spread. If you buy and sell at the same time, whatever the amount you paid to the brokers is the spread.

Spread can be a very high cost if you are trading many times a day with very small take profit levels(10 pips). This will mean that for every $10 profit you made, 5 dollars is going to the broker. That means over the long run, your broker will generally make more money than you.

The reason is because as a trader, you may not win all the time. Regardless of win or loss, the broker will earn the spread from you. If your spreads is 50% of your profit, the brokers benefits more than you. It is recommended that you adjust your system or trade a different type of system. For people who trade less frequently and have a large take profit level (50-100pips), the cost of spread will be less of an issue.

4. Expenses

It is advisable that you invest money in good investment and trading books. Some of the books i feel is very important and any traders who wants to be trading for the long term will need to invest in. They are

1. * Trading for a living by Alexander Elder
   * Come Into My Trading Room by Alexander Elder
   * Entries and Exits by Alexander Elder
   * High Probabilities Trading Setups by Kathy Lien and Boris Schlossberg
   * Day Trading and Swing trading of Currency Markets by Kathy Lien and Boris Schlossberg
   * Technical Analysis of Currency Markets by Boris Schlossberg
   * Millionaire Traders by Kathy Lien and Boris Schlossberg

These expenses are unavoidable especially in the beginning. Professional traders and investors will learn consistently throughout their trading careers.

About the Author

Warren Seah

Warren examines commercial trading systems and has since started researching and analyzing systems to uncover good systems which bring in consistent profits.

To read more about these research papers and analysis, go to

http://www.FxEAReview.com

By David Adams – There is a natural desire, especially by beginning traders, to want to trade excessively. This is not difficult to understand. A trader cannot make money unless he or she is in a trade; this is the general outlook of most novice day traders. But this line of thinking has some serious faults, and it is important to learn to select your trades in a systematic and emotion free state of mind.

Of course, selecting high-quality trades is easier said than done. At various times, very unproductive trades form set up patterns that can be very enticing. Low probability trades are like the lure of Medusa, they look great at first glance, but can cause serious losses if systematic analysis of the trade is not undertaken.

How do you know the difference between a high probability trade and a low probability trade?

First and foremost, you must make an assessment of whether the trader is with the trend or against the trend. While many popular courses on trading tout the wisdom of trading retracements and identifying peaks and troughs in trading patterns, these are all unsound trading methodologies and I know of few successful traders who employ them. Great traders are masters at taking what the market offers, and not trying to create trading opportunities themselves. A novice trader’s ability to effectively identify trending patterns is an essential skill because the very best traders trade primarily with the trend. In my view, less than 10% of your trades should be countertrend trades.

Secondly, many novice traders and a plethora of trading systems rely heavily upon oscillators and indicators to choose potential trades. On the other hand, most seasoned traders pay close attention to actual price action when trading. Important principles like support and resistance are prime movers in determining whether a trade has real potential. For example, taking a short trade into a known support is the recipe for a losing trade. Obviously, a trader must have the ability and experience to identify known areas of support and resistance to avoid taking trades into these hazardous trading zones. Most experienced traders can spot support and resistance by glancing at a chart; this skill is learned through observing thousands of charts throughout trader’s career. Of course, there are add-on programs to most charting platforms that can spot support and resistance for a trader who has not acquired the ability to identify support and resistance on his or her own. For some, these add-on programs can be very effective and helpful. In any event, any trade that will lead a trader prematurely into known support or resistance is often a trade that is doomed to failure and it’s important to realize these trades are very low probability in nature. In short, price action is where the real trade selection takes place, and indicators and oscillators supply filtering information to reinforce the strength or weakness of the trade under consideration.

This is among the most difficult concepts to learn in trading, as many traders are looking for a magic oscillator or indicator that will revolutionize their trading results. I am sorry to report that, to date, no such magical oscillator or indicator exists. Look to identify solid trades in the price action of any chart, and then calculate the potential to profit by identifying where support and resistance will affect the performance of your trade. Many traders use pivots and other predictive indicators to calculate support and resistance. For many years, I was in this camp. As I have grown older, I prefer to identify support and resistance as it develops on the chart, not through some artificial predictive means. This attitude is subjective in nature, and his a choice each individual trader has to make.

In summary, we have looked at trading against the trend and concluded that countertrend trading results in low probability trades, on the other hand trading with the trend results in higher probability trades. We have also noted that known support and resistance are prime movers in determining the feasibility and potential profitability of any trade. Price action is the name of the game, and learning to read and interpret what price action is telling a trader is the real secret to trading success. If you can master reading price action, it is highly likely you can become a successful trader.

About the Author

Learn to trade from a full time trader. All active members may attend FREE daily trading room and receive nightly market recap video (a $495 value). Click here and get your free videos and FREE live trading room.

By CountingPips.com

The latest Commitments of Traders (COT) report, released on Friday by the Chicago Mercantile Exchange, showed that futures speculators increased their bets for the euro against the dollar for a third consecutive week. Non-commercial futures positions, those taken by hedge funds and large speculators, were net long the euro against the U.S. dollar by 5,097 contracts as of September 21st following net positioning of -9,644 contracts on September 14th. This is the first time contracts have been in positive territory for the euro since early December 2009 when net euro contracts were positive by 22,151.

The COT report is published every Friday by the Chicago Mercantile Exchange (CME) and shows futures positions as of the previous Tuesday. It can be a useful tool for traders to gauge investor sentiment and to look for potential changes in the direction of a currency or commodity. Each currency contract is a quote for that currency directly against the U.S. dollar, where as a net short amount of contracts means that more speculators are betting that currency to fall against the dollar and net long position expect that currency to rise versus the dollar. Open interest is the number of open contracts that have not been closed by a transaction or by delivery.

The British pound sterling was the only major currency on the short side against the dollar last week in the CME futures market while the euro, Australian dollar, New Zealand dollar, Japanese yen, Canadian dollar, Swiss franc and Mexican peso had a net positive amount of contracts.

The British pound sterling short positions edged to -8,989 as of September 21st after being short on September 14th by -9,127 positions. This is the second straight week of improvement for the British pound future positions.

The Japanese yen net long contracts dropped lower last week to 23,100 as of September 21st from 47,642 net long contracts reported on September 14th. Yen positions had stayed above the 47,000 level for six weeks before Friday’s decline as many speculators may have decreased their yen long positions due to the Bank of Japan’s currency intervention.

The Canadian dollar positions rose for a third consecutive week and jumped to a net total of 29,815 contracts after totaling 17,695 net longs on September 14th.

Swiss franc long positions edged slightly higher to 14,462 long contracts as of September 21st after totaling a net of 14,236 long contracts on September 14th.

The Australian dollar positions shot up to their highest level since April against the dollar to a net amount of 64,324 long contracts as of September 21st from 56,669 long contracts on September 14th.

New Zealand dollar futures positions continued to increase higher to a total of 18,408 long contracts after a total of 16,839 long contracts and rose for a third consecutive week.

Mexican peso long contracts advanced higher as of September 21st to 26,376 net long positions from for 14,957 longs the week prior. Peso positions had declined for four straight weeks before the September 14th data.

COT Data Summary as of September 21st, 2010

Large Speculators Net Positions vs. the US Dollar

Euro: +5,097  contracts from -9644 contracts on September 14th
British pound sterling: -8,989 contracts from -9127 contracts
Australian dollar: +64,324 contracts from +56,669 contracts
Canadian dollar: +29,815 contracts from +17,695 contracts
Japanese yen: +23,100 contracts from +47,642 contracts
Mexican peso: +14,957 contracts from +14,064 contracts
New Zealand dollar: +18,408 contracts from +16,839 contracts
Swiss franc: +14,462 contracts from +14,236 contracts

Go to the Commitment of Traders CME raw futures data

COT Resources from around the web:

Forecast The FX Market With The COT Report

The Only Indicator You Will Ever Need

By GCI Forex Research

Fundamental Outlook at 1400 GMT (EDT + 0400)

€

The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3425 level and was capped around the $1.3500 figure.  The common currency tested important technical resistance just below the US$ 1.3505 level during the Australasian session before coming off, representing the 50% retracement of the $1.5145-1.1875 range.  The pair last traded at these levels in April of this year.  There was pressure on the common currency as dealers reported rumours that the European Commission “lacks confidence in the viability of German regional lenders.”  Some key themes will continue to play out in the markets this week. First, there is ongoing speculation the Federal Reserve will ease monetary policy further in the coming months, possibly by expanding its balance sheet by purchasing additional U.S. government debt.  The yield on the 10-year U.S. benchmark Treasury note is around 2.60% now and there is speculation the rate could fall as low as 1.75% in Q1 2011.  Second, global sovereign credit jitters have been reignited in recent weeks and are most pronounced in the eurozone now.  Another flare-up in yields in peripheral eurozone sovereign credit default swaps for members like Greece, Portugal, and Ireland could be problematic for the euro.  Third, U.S. economic data remain on the weak side.  Data that will be scrutinized this week include July CaseShiller home prices, September consumer confidence, and Q2 gross domestic product growth followed by August personal consumption expenditures, September ISM data, and final September University of Michigan consumer sentiment.  Federal Reserve Chairman Bernanke was quite dovish and bearish in statements made late last week and some dealers believe these comments portend a second round of quantitative easing.  Fourth, gold has continued its surge higher to all-time highs as central bankers continue to address “global imbalances.”  Gold tested the psychologically-important US$ 1,300 level today.  Data released in the U.S. today saw the August Chicago Fed national activity index decline to -0.53 from the revised prior reading of -0.11.  In eurozone news, data released today saw the EMU-16 August M3 money supply up 1.1% y/y.  Euro bids are cited around the US$ 1.3170 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥84.10 level and was capped around the ¥84.40 level.  In recent weeks, the pair has been unable to move above the ¥86.05 level, representing the 50% retracement of the ¥89.20 – ¥82.85 range.  There was a Japanese media report last week that Japanese monetary authorities conducted another round of yen-selling intervention last week following the government’s first official foray back into the market in more than six years some two weeks ago.  Japan’s unrealized losses on its foreign exchange intervention account is approaching US$ 400 billion.  Other traders, however, believe Japan will not conduct additional yen-selling intervention unless the yen’s appreciation becomes unruly.  U.S. and European officials have sharply criticized Japan for conducting the intervention and there is little chance international officials will join the yen-selling intervention.  Bank of Japan’s Tankan survey of quarterly business sentiment will be released on Wednesday and is expected to evidence marginal gains in business confidence.  The yen’s ongoing advances will likely have had a negative impact on business sentiment.  The Japanese media is already reporting that BoJ officials are considering additional monetary easing at the central bank Policy Board’s October meetings.  BoJ Governor Shirakawa reiterated this weekend that policymakers must monitor “downside risks” more carefully, adding “appropriate action will be taken if needed.”  Shirakawa also warned against “monetizing debt,” suggesting it would risk raising bond yields.  Additionally, Shirakawa also defended the central bank’s lack of a formal inflation target, noting the BoJ “has published favourable price levels over the long-term.”  Economy minister Kaieda reported “there is a relationship” between quantitative easing and the yen’s exchange rate.  Data released in Japan today saw the August corporate service price index off 1.1% y/y while the August merchandise trade balance narrowed slightly to ¥589.7 billion.  The Nikkei 225 stock index gained 1.39% to close at ¥9,603.14. U.S. dollar bids are cited around the ¥84.60 level.   The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥113.75 level and was supported around the ¥113.05 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥133.60 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥85.80 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.6909 in the over-the-counter market, up from CNY 6.6900.  People’s Bank of China weakened the yuan’s reference rate to CNY 6.7098 today, the first time it has weakened the rate since 8 September.  PBoC Governor Zhou said China needs to provide banks with tools to improve their balance sheets.  Data released in China today saw August industrial profits up 55.0% y/y on a year-to-date basis.  This week could be a major week in the markets.  Chinese officials will likely want to minimize scrutiny they might face when global policymakers convene in Washington, D.C. later this week. Chinese Premier Wen and officials from the Obama administration – including Obama himself – have verbally sparred recently over the elevated levels of the yuan.

£

The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.5865 level and was supported around the US$ 1.5785 level.  Data released in the U.K. overnight saw the September Hometrack housing survey off 0.4% m/m and up 1.0% y/y, down from August’s levels.  Q2 gross domestic product data will be released tomorrow.  Last week, Bank of England Monetary Policy Committee member Sentance said the central bank should being raising interest rates gradually soon, noting they will not hurt confidence.  Minutes from Bank of England’s September Monetary Policy Committee meeting were released last week and they revealed policymakers voted 8-to-1 to keep rates unchanged.  MPC member Sentance dissented in the minority and reported the central bank needs to “gradually move interest rates up in a slow way which will not destabilize business confidence.  One of the issues I would highlight is we haven’t seen the same dampening effect on inflation that we’ve seen in previous recessions.”  Cable bids are cited around the US$ 1.5320 level.  The euro depreciated vis-à-vis the British pound as the single currency tested bids around the £0.8490 level and was capped around the £0.8520 level.

CHF

The Swiss franc depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 0.9870 level and was supported around the CHF 0.9815 level.  The pair has been trading below parity since 21 September and chartists are eyeing the CHF 0.9715/ 0.9505 levels as downside targets.  Swiss National Bank’s quarterly monetary policy report was released last week and was more dovish-than-expected.  SNB reported monetary policy is “appropriate” and noted it expects a “marked slowdown” in the second half of 2010 and in 2011.  SNB member Jordan has continued to call for banks to maintain larger amounts of capital.  U.S. dollar offers are cited around the CHF 1.0290 level.  The euro depreciated vis-à-vis the Swiss franc as the single currency tested bids around the CHF 1.3235 level while the British pound moved higher vis-à-vis the Swiss franc and tested offers around the CHF 1.5630 level.

Technical Outlook at 1230 GMT (EDT + 0400)

(Bid Price) (Today’s Intraday Range)

EUR/ USD      1.3484                1.3499, 1.3424
USD/ JPY         84.24                  84.38,   84.12
GBP/ USD      1.5843                1.5864, 1.5787
USD/ CHF      0.9828                0.9870, 0.9814
AUD/USD       0.9602                0.9622, 0.9572
USD/CAD       1.0226                1.0265, 1.0222
NZD/USD       0.7351                0.7372, 0.7325
EUR/ JPY       113.58                113.76, 113.05
EUR/ GBP      0.8510                0.8522, 0.8492
GBP/ JPY       133.47                133.61, 132.92
CHF/ JPY         85.69                  85.82,   85.23

Support                       Resistance                  Support                    Resistance

EUR/ USD                                                           USD/ JPY

L1.       1.2925                         1.3505                            83.80                          86.70

L2.       1.2780                         1.3890                            81.80                          87.90
L3.       1.2575                         1.4170                            77.20                          89.45

GBP/ USD                                                        USD/ CHF

L1.       1.5465                         1.5865                         0.9715                         1.0065

L2.       1.5230                         1.6040                         0.9500                         1.0345

L3.       1.5010                         1.6210                         0.9155                         1.0600

AUD/ USD                                                        USD/ CAD

L1.       0.9280                         0.9460                         1.0155                         1.0585

L2.       0.9135                         0.9555                         1.0005                         1.0810

L3.       0.8970                         0.9675                         0.9735                         1.1060

NZD/ USD                                                        EUR/ JPY

L1.       0.7095                         0.7480                         109.65                         115.50

L2.       0.6910                         0.7585                         107.60                         118.05

L3.       0.6590                         0.7650                         105.80                         121.95

EUR/ GBP                                                       EUR/ CHF

L1.       0.8355                         0.8605                         1.3005                         1.3330

L2.       0.8140                         0.8745                         1.2845                         1.3615

L3.       0.7870                         0.8890                         1.2650                         1.3985

GBP/ JPY                                                         CHF/ JPY

L1.       130.50                         136.70                           82.20                          88.00

L2.       128.40                         138.40                           81.65                          90.05

L3.       126.70                         141.30                           80.35                          93.60

Forex Daily Market Commentary provided by GCI Financial Ltd.

GCI Financial Ltd (”GCI”) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (”Forex”) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (”CFDs”) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.

DISCLAIMER: GCI’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.

By Danielle Franklin – All beginners in forex trading search for an ultimate secret or special technique that will make the whole trading process much more simplified and turn $1 investment into millions with a simple click of a finger. Instead of waiting time and money desperately plowing the internet for useless promises and “holy grail”, let’s focus on the real thing – in order to make any profits, you have to follow the routine, plan and analyze every single trade you make.

Why you cannot adopt someone else’s trading strategy?

There is a simple explanation – every trader typically designs his/her trading strategy based on their trading style. Therefore their system will most likely not work for other traders.

It doesn’t mean, of course, that you cannot take a look at already successful strategy and remake it to fit your own trading style. With the right plan and daily discipline, you can soon build a profitable career among other forex professionals.

Analyze the Calendar and Focus on Priorities

Every day, before you start trading, you should take a look at the economic calendar. There you can find a list of economic events and announcements that effect currency market on daily basis. Make sure to find the announcements and events that will be taking place within the next 24 hours – this way you will be on top of things and have time to prepare and plan your actions.

While You Trade – There is Nothing Else!

In order to avoid unnecessary distraction, turn off your phone, tv, email, facebook and other social sites while you trade. The last thing you need is an interference, sound alerts and chat requests while you are trying to concentrate and make major decisions.

Take a Break (or Two!)

You cannot chain yourself in front of the computer for the whole week. You should take time out on a regular basis (that should be also included in your trading plan. Apart from that, you should take a break from trading every time you disobey your own discipline – give yourself a punishment time out for misbehaving.

Why breaks are so important? Do you remember high school and math problems? I personally could sat for hours next to the text book and a piece of paper, trying desperately to solve a stubborn problem. Sometimes, however, I would be smart enough to stand up and give myself a break – get some fresh air, take a shower or get a snack. Somehow, after taking a break, I would come back to that math problem full of new ideas and much clearer understanding.

Same with trading – it is important to stay awake, responsible and sharp in mind in order not to lose all the money in your account in one click.

Don’t Be Crazy!

It is important not to lose yourself in trading. Your family, friends and your dog deserve to see you from time to time, dressed in something rather than pajamas. Trading all day long will only make you obsessed, prone to overtrading and eventually a loser.

Interact with Other Traders

Forums are great source of different experiences and unique perspectives. You will soon notice that the same event can create absolutely unlike trades and interpretations. Forums can be great place to get some interaction with traders like you – share the joy of profits or complain about stupid mistakes.

About the Author

Forex Brokers – Forex brokers reviews and rating, comprehensive forex tutorials and articles, latest forex news and forex blog.

Forex Bonus – Top forex brokers reviews, latest bonuses and promotions, free forex tutorial and more.

Forex Forum

By Dan Eduard – Over the last two weeks, the US dollar has been dropping at a steady rate against the Danish krone. Since the 12th of September, the USD/DKK pair has fallen almost 3500 pips, to its current level of 5.5375. As we will see through a variety of technical indicators, the pair may have hit a low point and has the potential for a significant upward correction.

We will be looking at the 8-hour chart provided by Forexyard. The technical indicators being examined are the Stochastic Slow, Relative Strength Index (RSI) and Williams Percent Range.

1. The Stochastic Slow has recently formed a bullish cross, meaning that an upward correction is likely to occur in the near future.

2. This theory is supported by the Relative Strength Index, which is currently right around the 20 level. Typically anything below the support line at 30 is a sign of the pair being oversold. Traders can take this as a sign that a bullish move may occur.

3. Finally, the Williams Percent Range, currently at the -90 level, is well into oversold territory. This lends further support to our original theory that upward movement is likely to occur.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

By Rita Ruvinski – Platinum advanced to a new record high, as prospects for a further decline in the dollar ‎boosted investor demand for precious metals as alternative holdings. Platinum prices jumped ‎‎$10.10 to $1,632 an ounce on Monday reaching its highest level since May 18th. Technical ‎indicators show there are good chances platinum prices will increase further with a potential ‎price of $1675.00 in sight. ‎
The chart below is the Platinum 4-hour chart:

‎- The technical indicators used are the Bollinger Bands, the MACD , the Relative Strength Index ‎‎(RSI) and Fibonacci retracement lines.‎
As we can see in the chart, the price is currently testing the 100% Fibonacci retracement level ‎and may possess the momentum to break past.‎
‎- The RSI is above 60. It could either mean that the price is in a lasting uptrend or just ‎overbought, in which case a correction could occur (look for bearish divergence in this case). ‎
‎- The MACD is positive and above its signal line. The configuration is positive. ‎
– A tightening of the chart’s Bollinger Bands confirms the bullish volatility in the pair.‎
‎- The next resistance levels are placed at the 1675.5 and the 1692.5 levels.
‎- The next support levels are placed at the 1620.50 and the 1609 levels.‎

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Source: ForexYard

As speculations that last week’s spike in yen value was the result of another intervention from the Bank of Japan remain unconfirmed, Governor Shirakawa says that the BoJ is prepared to take appropriate action if needed. Despite Japanese efforts, the yen continues to strengthen. Is another intervention simply a matter of time?

Economic News

USD – Positive U.S. Data Boosts Risk Appetite and Weakens the Dollar

The U.S. dollar fell against most of the major currencies during last week’s trading session. The dollar lost about 450 pips against the euro. The EUR/USD pair is currently heading towards the 1.3500 level. The dollar dropped about 200 pips against the British pound and about 150 pips vs. the Japanese yen.

The dollar’s downfall came after several positive U.S. economic indicators were released last week. The U.S. sales of previously owned homes rose in August to a 4.13 million, up from 3.84 million in July. The result was above the predicted result of 4.11 million. In addition, the total value of new purchase orders placed with manufacturers for durable goods, excluding transportation items, climbed in August by 2.0%, beating expectations for a 0.9% rise. The positive data provided another signal that the U.S. economy will manage to evade another slowdown. This has increased optimism in the global economic recovery, and as a result boosted risk appetite in the market. The dollar, which is considered to be a relatively safe asset, weaned as a result.

As for the week ahead, many interesting economic releases are expected from the U.S. The publications which are likely to have the largest impact on the dollar are the Consumer Confidence report, the weekly Unemployment Claims and the Manufacturing Purchasing Managers’ Index. Traders are advised to closely follow these releases, as any one of them has the potential to impact the dollar’s trading.

EUR – Euro Is Trading At A 5-Month High against the Dollar

The euro saw a bullish trend against most its major counterparts during last week’s trading session. The euro gained about 450 pips vs. the U.S. dollar. Currently the EUR/USD pair is closing in at a 5-month high, after reaching the 1.3494 level earlier today. The euro rose about 200 pips against the British pound and about 150 pips vs. the Japanese yen.

The euro’s bullishness followed positive European economic releases, which indicated that the euro-zone is likely to overcome the economic slowdown. The most significant publication was the German Business Climate survey. The survey showed that German business unexpectedly rose to its highest level in more than three years in September, suggesting that companies can sustain a weaker demand from abroad as the global economic recovery slows. The survey rose to 106.8, beating expectations for an increase of around 106.3. That’s the highest since June 2007. The report, along with other positive indications from the euro-zone’s leading economies, have decreased risk-aversion, and convinced investors to open long positions with the euro and pound.

Looking ahead to this week, a significant batch of data is expected from the euro-zone. Traders are advised to follow the leading publications, especially from Germany, which holds the largest and strongest economy within the euro-zone. Further positive indicators are likely to boost the euro further, mainly against the dollar and the yen.

JPY – Yen Strengthens Despite Speculations of Bank Intervention

The Japanese yen strengthened against most of the major currencies during last week’s trading session. The yen gained about 150 pips against the U.S. dollar and the USD/JPY pair is trading near the 84.00 level. The yen gained about 100 pips vs. the British pound as well.

After strengthening throughout the first half of the week, the yen fell sharply against the major currencies, on what was believed to be another intervention by the Bank of Japan (BoJ). However as doubts crept in about whether the Japanese leadership was indeed responsible for the yen’s losses, the currency managed to correct itself.

In addition, earlier today the BoJ’s Governor Masaaki Shirakawa said that the central bank is closely watching the effect the yen’s appreciation is having on the Japanese economy, and is prepared to take appropriate action if needed. This has fueled speculation that another BoJ intervention is only a matter of time.

As for this week, traders are advised to be extra cautious while trading the yen. The Japanese currency continues to be one of the strongest currencies within the majors. At the same time, another intervention looks to be a real possibility at the moment.

Crude Oil – Crude Oil Remains Volatile

Crude oil saw another week of range-trading, in which the commodity remained between $73 and $77 a barrel. Crude oil began last week’s session with a sharp rise towards $76.50 a barrel. However by Tuesday, the commodity dropped to $73 a barrel, only to jump back to $76.75 before the weekend.

The recent appreciation of crude oil comes as a result of the weak U.S. dollar. The decline of the dollar supports demand for commodities as an alternative investment. Furthermore, the fact that crude oil is valued in dollars means it is now more attractive to foreign buyers. It seems that as long as the dollar continues to weaken against the major currencies, crude oil prices have the potential to rise further.

Looking ahead to this week, traders are advised to follow the leading publications from the U.S. and the euro-zone, as these tend to have the largest effect on crude oil’s trading. In particular, traders should follow the U.S. Crude Oil Inventories report, which is scheduled for Wednesday, as this release usually has a significant impact on the market.

Technical News

EUR/USD

The pair peaked at the 1.3494 level on Friday, and has been correcting its gains since then. Currently, a bearish cross on the 4-hour chart’s Slow Stochastic suggests that the pair might fall further, with potential to reach towards the 1.3380 level.

GBP/USD

After rising 200 pips on Friday, the cable saw two failed attempts to cross the 1.5842 level. A bearish cross has formed on the daily chart’s MACD, meaning the pair may correct Friday’s gains today. Going short with tight stops might be a good strategy today.

USD/JPY

After Friday’s spike, the pair resumed its bearish trend with full steam, and is currently trading near the 84.20 level. As all indicators on the daily chart are pointing down, the pair looks to drop further, with a key-target at the 83.50 level.

USD/CHF

There is a very distinct bearish channel forming on the 4-hour chart, and the pair is now floating in the middle of it. Currently, the RSI on the 1-hour chart has dropped below the 70 line, suggesting that further bearishness may take place today. Going short with tight stops may be the preferred strategy.

The Wild Card

Gold

After failing to reach $1,300 an ounce on Friday, gold appears to be on its way to cross that level today. Currently, a bullish cross on the daily chart’s MACD indicates that gold still has plenty of upward momentum. If the metal will cross the $1,300 level it will mark a new all-time record. Analysts are not forecasting a downward correction in the near future. This may be a great opportunity for forex traders to join a very popular trend.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

EUR/USD

Maintains positive structure after completing an hourly bull flag and breaking above 1.3438, 22 Sep previous high. Market has so far reached 1.3493, just under 1.3510 target, 50% of 1.5144/1.1875. Clearance of the latter to expose 1.3523/85 zone next. Downside, 1.3402/1.3368 supports, while loss of 1.3285 would delay.

Res: 1.3494, 1.3510, 1.3523, 1.3586
Sup: 1.3435, 1.3402, 1.3368, 1.3304

GBP/USD

Broke higher on Friday to test 76.4% retracement of 1.5997/1.5285 downleg. Sustained break here will open 1.5860 first, with possible retest of 1.5997, 06/09 Aug highs, not ruled out. Initial support lies at 1.5740/28, while break below 1.57 zone delays.

Res: 1.5842, 1.5860, 1.5910, 1.5997
Sup: 1.5805, 1.5771, 1.5740, 1.5728

USD/JPY

Maintains negative near-term tone off 85.92, with renewed attempt higher failure leaving a lower high at 85.38. Break below 84.10/03, 24 Sep low/61.8% retracement of 82.86/85.92 upleg, is needed to trigger fresh weakness and open way for possible retest of 82.86. Upside, 85.38 caps for now and only break here to firm the near-term tone.

Res: 84.75, 84.90, 85.21, 85.38
Sup: 84.10, 84.03, 83.75, 83.60

USD/CHF

Continues to trend lower, following reversal off 1.0181. Break below 0.9916, 2009 low, and 0.9803, 23 Sep previous low, has so far reached 0.9777, looking for test of all-time low of 0.9630, near-term. Upside, 0.9880/98 caps for now.

Res: 0.9880, 0.9898, 0.9931, 0.9980
Sup: 0.9809, 0.9777, 0.9700, 0.9630