Month: March 2011

By Anton Eljwizat

Crude oil prices rose significantly yesterday and peaked at $103.63 per barrel. However, the 4-hour chart is suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. Forex traders involved with commodities like this can take advantage of this knowledge by going short on crude oil now, and at a great entry price!

• Below is the 4-hour chart for crude oil by ForexYard.

• The technical indicators used are the Slow Stochastic, RSI and Williams Percent Range.

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

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

• Point 3: The RSI signals that the price of this pair currently floats in the over-bought territory, suggesting downward pressure.

• Point 4: Williams Percent Range also supports the downward direction.

Crude Oil 4-Hour Chart

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

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

Source: ForexYard

The Group of seven industrial nations has agreed on Thursday evening to stage a coordinated currency intervention in order to weaken the Japanese currency. As a result, the yen fell about 150 pips vs. the U.S. dollar and about 350 pips vs. the euro and the British pound.

Economic News

USD – Dollar Falls versus Majors As Positive U.S. Data Spurs Demand for Higher-Yielding Assets

The U.S. dollar fell against most of its major currency counterparts during Thursday’s trading session. The dollar saw a 170 pip slide against the euro, and the EUR/USD pair reached as high as the 1.4050 level. The dollar also saw a 150 pips fall vs. the British pound.

The dollar depreciated yesterday after positive U.S. economic releases have boosted demand for higher-yielding assets, such as the euro and the pound. The Consumer Price Index (CPI) in the U.S. rose by 0.5 percent in February, and the core CPI went up by 0.2 percent. The cost of living in the U.S. climbed more than forecast due to the highest food prices since 2008 and rising fuel costs.

In addition, initial Unemployment Claims in the U.S. fell by 16,000 in the week ended in March 12th. Applications for jobless benefits have decreased for a third week in the last four, signaling progress in the labor market.

Nevertheless, during night-trading, the dollar saw a sharp appreciation against the Japanese yen after the G7 agreed to conduct a coordinated intervention to weaken the Japanese currency.

As for today, traders should focus on two main events that are likely to dominate the market – the Japanese struggle to fight nuclear catastrophe, and developments from Libya which might include U.N. intervention. Any update regarding these two nations is likely to have a rapid impact on the market.

EUR – Euro rallies Against Dollar and Yen

The euro rallied against the U.S. dollar and the Japanese yen on Thursday’s trading session. The euro gained about 170 pips vs. the dollar, and the EUR/USD pair reached as high as the 1.4050 level. The euro also soared against the yen as well, and the EUR/JPY pair is trading near the 114.00 level.

The euro’s strengthening yesterday was mostly affected by overseas developments. The euro gained against the U.S. dollar after reports have shown that the U.S. economy continues to recover. The U.S. Consumer Price Index rose by 0.5% in February, as food costs reached their highest level since 2008. In addition, initial unemployment claims in the U.S. fell by 16,000 last week, signaling that the labor market recovers as well. This has supported risk-appetite in the market, and as a result strengthened the euro vs. the dollar.

The euro climbed against the yen after the G7 said they had agreed to stage a coordinated currency intervention in order to weaken the surging Japanese currency.

Looking ahead to today, Traders are advised to follow the German Producer Price Index release, which is scheduled at 07:00 GMT. A positive data might to strengthen the euro further. Traders should also follow all the updates from Japan and Libya, as these are likely to have a large impact on the market for the near future.

JPY – G7 Agrees To Intervene In Order Weaken Yen

After soaring to a record high against the U.S. Dollar, the Japanese yen saw a sharp bearish correction during night-trading after G7 agrees to devaluate the Japanese currency.

The yen slid after the Group of seven nations said they had agreed to stage a coordinated currency intervention in the attempt to support the Japanese economy following the devastating earthquake and tsunami affects.

The yen saw a 150 pips fall against the yen and the USD/JPY pair climbed towards the 81.50 level. This move had an even bigger impact on the euro, as the EUR/JPY pair bounced by 350 pips towards the 114.50 level.

As for today, the Japanese nuclear crisis will continue to dominate global news. Traders are advised to follow any update from Japan, as it is likely to have an instant impact on the yen. Traders should also follow any further indications regarding an intervention by the G7 or the Bank of Japan.

Crude oil – Crude Oil Climbs to $103.50 a Barrel After U.N. Authorizes Military Action in Libya

Crude oil surged to $103.50 a barrel during Thursday night trading, after the United Nations have authorized a military strike to curb Libyan leader Muammar Gaddafy. The U.N. Security Council vote came several hours after Gaddafi threatened to storm Benghazi overnight.

As a result, crude prices, which were already surging, saw a sharp 200 pips gain, and crude climbed from $101.70 to $102.85 a barrel almost instantly. During the night crude oil prices continued to climb, and reached as high as $103.50 a barrel.

Looking ahead to today, traders should first and for most remain updated regarding any development in Libya. Traders should take under consideration that any update regarding a clash involving U.N. troops has potential to boost crude prices event further.

Technical News

EUR/USD

The EUR/USD pair continues to rise, and reached as high as the 1.4085 level yesterday. Currently as the 4-hour chart’s MACD continues to point upwards, the pair might see further bullishness, with potential to reach the 1.4120 level.

GBP/USD

The Cable has been seeing range-trading over the past few days, trading between the 1.5980 and the 1.6200 levels. The pair now seems on its way towards the higher boarder of the range. If manages to breach it, the pair has potential to reach as high as the 1.6350 level before the weekend.

USD/JPY

The USD/JPY saw a sharp bullish correction yesterday, following the G7 decision to devaluate the Japanese currency. A bullish cross on the 4-hour chart’s Slow Stochastic signals that the bullish move has more steam in it. Going long might be the right choice today.

USD/CHF

The USD/CHF is in the midst of a very strong bearish trend. In addition, as both the MACD and the RSI on the daily chart provide bearish signals, the pair looks to proceed with the bearish movement today. Going long might be the right strategy today.

The Wild Card

Crude Oil

Crude oil prices continue to surge in a daily basis, and by now have reached as high as the $103.50 level. Currently as all oscillators on the daily chart are providing bullish indications; it seems that another bullish movement might take place today. This might 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.

Crude oil prices rose significantly yesterday and peaked at $103.63 per barrel. However, the 4-hour chart is suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. Forex traders involved with commodities like this can take advantage of this knowledge by going short on crude oil now, and at a great entry price!

• Below is the 4-hour chart for crude oil by ForexYard.

• The technical indicators used are the Slow Stochastic, RSI and Williams Percent Range.

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

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

• Point 3: The RSI signals that the price of this pair currently floats in the over-bought territory, suggesting downward pressure.

• Point 4: Williams Percent Range also supports the downward direction.

Crude Oil 4-Hour Chart

By Zac, CountingPips.com

The G7 major central banks have agreed to intervene in the forex markets to weaken the Japanese yen to offset the surging strength of the Japanese currency following the tragic earthquake and tsunami.

The announcement was made by a joint statement of the G7 finance ministers that said, “We express our solidarity with the Japanese people in these difficult times, our readiness to provided needed cooperation and our confidence in the resilience of the Japanese economy and financial sector.”

This is the first coordinated currency intervention since 2000 although we have seen single central banks intervene in the markets in the past few years.

To read more about this and get some forex analyst views on the intervention check out this Reuters article: Instantview: G7 to intervene jointly in FX; dollar/yen jumps

Update: Adam Kritzer has also posted a thorough analysis of the Japanese Yen’s Wild Ride over at ForexBlog.org.

Welcome to the Financial News Network Options Report. On the call side, Northrop Grumman is seeing 25 times the normal amount of calls today after news that the firm signed a $25 million dollar contract with the US Navy. Red Hat shares are also seeing a large amount of calls today, close to 24 times the average after several bearish bets were made on the company. SunPower calls are at over 5 times the average amount as investors have been bearish on alternative energy stocks of late. Big Lots closes out the list today with 5 times the average amount of calls after rumors that private equity firms are interested in the discount retail sector. Taking a look at the put side of the ledger, Savient Pharmaceutical puts are at over 14 times the average amount today as investors continue to be bullish on the company. CurrencyShares Japanese Yen Trust puts are continuing on their bear run today, with 7 times their normal volume. BJ’s Wholesale puts are coming in at 5.8 times the average amount today ahead of the March 18th expiration date. Finally, China Integrated Energy puts are 5.5 times the average today after the company was downgraded by analysts today. This has been you daily options update from the Financial News Network. Stay tuned for more insight into where the big money is placing their bets each day.

Commodities ended trading mostly higher as crude oil and gold futures finished in positive territory on news that work to control the damaged nuclear power plant in Japan made progress. Light, sweet crude oil for April delivery finished up 3.5%, or $3.44 to $101.42 a barrel. In other energy futures, heating oil was up 1.31% to $3.05 a gallon while natural gas was down 0.15% to $3.93 per million British thermal units. Meanwhile, gold futures rose, helped by a weaker dollar Gold for April delivery finished up $8.10 to $1,404.20 an ounce. In other metal futures, silver was down $0.21 to $34.26 a troy ounce, while copper traded up $0.21 to $4.34. The U.S. dollar index (DXY) is down 0.83% to $76.04.

By CountingPips.com

US consumer prices increased by a bit more than expected in February as energy and food price rises pushed the consumer price index higher, according to a report released today by the U.S. Department of Labor. The consumer price index, a key gauge of inflation, increased by 0.5 percent in February following an increase of 0.4 percent in each of January and December.

Today’s data advanced higher than the economic consensus that was predicting a 0.4 percent rise for the month. Consumer prices have now shown higher levels every month since July 2010 and the annual rate of consumer prices rose by 2.1 percent when compared to February 2010.

Rising energy prices continued to be a significant contributor in the increased inflation as the report showed that the energy index rose by 4.8 percent, gasoline prices increased by 4.7 percent and fuel oil rose by 5.8 percent for the month.

Food prices also advanced by 0.6 percent in February after a 0.5 percent increase in January.

The core inflation reading, that excludes volatile food and energy prices, increased by 0.2 percent for a second straight month and surpassed the market forecasts expecting a 0.1 percent gain. The annual rate of core inflation increased by 1.1 percent for February.

Elsewhere in US economic releases, the Philadelphia Federal Reserve manufacturing survey rose by much more than expected with a 43.4 score in March. This follows a 35.9 reading in February and surpassed the 30.0 score economic forecasts were looking for.

The US leading indicators index increased by 0.8 percent in February following a 0.1 percent score in January. The data was just below forecasts looking for a 0.9 percent rise.

US initial jobless claims fell back below 400,000 last week with a total of 385,000 new weekly jobless claims as of March 12th. This was a decrease of 16,000 claims from the week prior which totaled 401,000. Continuing claims for jobless benefits declined by 80,000 from the previous week to a total of 3,706,000 as of data from March 5th.

US Dollar mostly on defensive in Forex Trading

The U.S. dollar has been mixed in forex trading today against the other major currencies in the US trading session. The dollar has been losing ground versus the euro, Canadian dollar, British pound sterling,  Australian dollar and the Swiss franc while gaining some ground against the New Zealand dollar, according to currency data by Oanda. The dollar has been trading virtually unchanged versus the Japanese yen.

The US stock markets, meanwhile, have rebounded today with the Dow Jones rising by over 100 points, the Nasdaq increasing by over 20 points and the S&P 500 showing a 14 point gain.

Oil has traded higher by $3.40 at $101.38 per barrel while gold futures have been virtually unchanged at $1.396.00 per ounce.

Being the largest financial market in the world its little wonder millions of people come to the forex market everyday with the sole aim of making money. Forex traders around the world participate in a highly leveraged and volatile environment. It’s a well known fact that 95% of traders never make any money from trading. You may ask yourself how can only 5% of people who trade the forex market be successful and the other 95% leaves with nothing? The answer to that question is simple; the 95% of people, who leave with nothing, cannot control their emotions and treat the markets like a casino. The 5% of traders who are successful may not all be more intelligent than the 95% however they have one huge advantage in that they show no emotion while trading.

There are 3 main emotions every trader at one point in their careers experiences; Greed, Fear & Hope. The successful ones learn to control these emotions and go on to make lots of money!

Greed – Greedy traders always want more. They’re not content with what they should be and are always waiting for the market to go that little extra and make them a few more $$$’s. Greedy traders just see money signs while trading, they pay no or little attention to what the charts are telling them and often fall in to the trap of over risking and over trading. Greedy traders risk large chunks of their accounts thinking ‘’the more I risk, the more I make’’, this is often not how the markets work. Finally, greedy traders over trade! They think that by taking more trades they will make more money.

Fear – Fearful traders are scared to lose. They’re not comfortable with the risks associated with forex trading and out of fear of losing money, place very few trades. Fearful traders often close a trade too early, once they’re showing a small profit. They’re always worried the market will ‘reverse’ and go in the opposite direction to what they’re expecting. Fearful traders struggle to make any headway in the markets and often leave with a little more or little less than they came with. They place few trades and don’t have the patience or confidence to let the market do what it’s doing.

Hope – Hopeful traders are closely related to gamblers. They come into the market ‘hoping’ they’ll make money. They place trades and ‘hope’ it will go in their direction. They often let bad trades run into even worse trade hoping the market will turn and bring them back to profit. They often let good trades turn bad as they hope the market will go that little bit extra and make them a few more pips. Hopeful traders have no real plan and use little market analysis in their trading. They are similar to a novice snooker player who simply ‘hits and hopes’.

It’s not uncommon for traders to experience all 3 of the above emotions at the same time; however it is possible for traders to overcome these emotional obstacles and join the 5% of ‘emotion free traders’.

How to Control your emotions –

DON’T over trade – Overtrading does not mean you will make more money. All you do when overtrading is expose yourself to needless risk. Knowing when to stay out of the market is as important as knowing when to enter the market.

DON’T risk high – Risking large parts of your account again expose you to needless risk. Forex trading is not a ‘get rich quick’ game. Using good money management and risking a fixed % of your account greatly increases your chances of slow and consistent growth.

The trend is your friend. – This common saying is very applicable when it comes to forex trading. Counter trend trading can be a profitable way of trading, however trading in the overall direction of the market is generally seen as a much safer way to trade.

Make a Plan – A forex trade plan is something every trader should have. A trading plan does not take a long time to make and is comprised of a set of rules you follow before taking any trade.

Stick to the Plan – It’s easy to get thrown of course. There are literally thousands of different systems and methods people use to make money. Not giving something enough time is counter productive in forex as you will be going from one thing to another with no real plan or direction.

Keep a journal – Recording every trade you take and the reasons behind it greatly improves your trading and also lets you analyze what works for you and what doesn’t. Trading aimlessly with no record of what you’re doing or why, will encourage you to make emotional decisions which can be detrimental to your trading.

It’s a difficult art to master but if you can learn to control your emotions and become an emotion free trader you’ll be well on your way to the 5% club of successful traders. A winning trade should be dealt with in the same way as a losing trade. Greed, Fear and Hope should never come into play while trading.

Ariticle courtesy of www.vantage-fx.com

Events Aimed at Small and Mid-Sized Funds and Managers

First Seminar on March 29^th Focuses on “The FX Markets and Trading Strategy”

LONDON–(BUSINESS WIRE)–CitiFX Pro will host a series of seminars for small and mid-sized institutions trading margin FX. The seminars, to be held in London from March 29 to May 4, will provide an opportunity for FX fund managers to hear from industry experts and participate in discussions on topics ranging from the FX markets and trading strategies to fund structures and capital introduction.

At the first seminar on Tuesday, March 29, two speakers will review the FX markets and trading strategies. The first speaker, Greg Anderson, Foreign Exchange Strategist at Citi, will discuss why the “small” G10 currencies will continue to outperform EUR, USD and JPY, how global imbalances are shrinking and share a few of Citi’s strategy team’s favorite trades at the moment. He will also discuss the performance of various quantitative and discretionary styles of FX trading over the past few years.

The second presenter, Max Knudsen, founder of PIA-First, a performance based market sentiment research and trading service, will focus on building a technical FX trading strategy. Knudsen will discuss indicators to judge both direction and entry points for trades and will review how PIA-First allocates a risk level to each trade and how to use this technique for effective money management. Knudsen will consider a “European sentiment wave” that offers opportunities for investors. He will also outline the systematic and structured approach to these sentiment-based strategies and the discipline required to construct the trades to exploit them.

Agenda – Tuesday, March 29^th 2011

18.00 – Tea and coffee will be served
18.25 – Guests to take their seats
18.30 – 20.00 Speakers
20.00 – 21.45 Drinks and canapés will be served

Location

City Gate House (view map)
39-45 Finsbury Square,
City of London
EC2A 1PQ

Institutional investors and fund managers interested in attending the March 29 seminar should register at www.citifxpro.com/europe/forex-seminar-series or contact CitiFX Pro at +44 800 279 3243.

About the Seminar Presenters

Greg Anderson is a senior G10 FX strategist with Citi in New York. He holds a PhD in economics from Brandeis University and is also a CFA charter holder. He has over 12 years experience in FX markets, having worked at Societe Generale, ABN AMRO and BankBoston prior to Citi. He has extensive experience as an analyst of both G10 and EM currencies, but is presently part of Citi’s G10 team. His analysis covers FX implied volatility in addition to spot and forward FX. He is an expert in a variety of different styles of quantitative FX models. He is oft-quoted by Bloomberg, Reuters and the Wall Street Journal and has made many appearances on TV outlets such as CNBC, Bloomberg, BBC and CNN.

Max Knudsen In a career spanning 24 years in the City Max spent 10 years in option sales followed by 14 years in analysis as head of Technical strategy at Swiss Bank Corp, UBS, and Dresdner Kleinwort. In 2007 Max and the technical team left Dresdner and founded PIA-First, a performance based market sentiment research and trading service. Now supported by a team of 17 in the business, PIA-First provide sentiment research to more than 50 financial firms worldwide and back their research trades with their own funds, and capital from their clients (pia-firstcapital.com). Max is also one of the most regular guest analysts on CNBC and has held a regular bi weekly interview since 2002. He specialises in strategies to exploit sentiment for both an intraday and quarterly horizon following a robust systematic discipline. In 2009 Max and the team were voted the best FX Technical Strategy service in the industry and were runners up in 2010. They are currently shortlisted for the same award in 2011.

About CitiFX Pro

CitiFX Pro is Citi’s online forex trading platform for active individual and small institutional clients including commodity trading advisors, broker-dealers, money managers and hedge funds. CitiFX Pro is currently live in US, UK and a number of Asian markets and will be launched in additional countries in 2011. Additional information may be found atwww.citifxpro.com.

About Citi

Citi, the leading global financial services company, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Through Citicorp and Citi Holdings, Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management. Additional information may be found at www.citigroup.com orwww.citi.com.

Regulators in the US, U. ., and Japan are reportedly investigating manipulation of the London interbank offered rate, or Libor, which is the rate major financial institutions charge each other to borrow money.