Month: April 2011

Bar chart patterns often introduces sizable moves in price
April 14, 2011

By Elliott Wave International

To many novice investors, chart patterns might as well be tea leaves. Can they really tell you anything reliable? And even if they can, how in the world do you know what to look for?

Experienced traders know that the answer to the first question is a resounding “yes.” As for the second one, we at EWI are all about recognizing chart patterns. To help you get started on this path, we’ve put together a free Club EWI resource called How to Use Bar Patterns to Spot Trade Setups.

It’s a collection of lessons in trading and pattern recognition by one of EWI’s top trading seminar instructors, Jeffrey Kennedy (who is also the firm’s senior commodities analyst).

Enjoy this quick excerpt — and for details on how to read this report in full, free, look below.

Chapter 1: How To Use Bar Patterns To Spot Trade Setups
Double Inside Bars

While many of my co-workers jog, bicycle or play in bands for a hobby, I amuse myself by looking through old price charts of stocks and commodities. Let’s look at a bar pattern that I call a “double inside day.”

Many of you who subscribe to my Daily Futures Junctures have seen me mention this bar pattern. I think everyone should be familiar with it. Why? Because it often introduces sizable moves in price — always a good reason for a trader to pay attention.

So let’s begin with a basic definition: A double inside day, or bar, occurs when two inside bars appear in a row. An inside bar is simply a price bar with a high below the previous high and a low above the previous low.

Notice that the range of price bar number two encompasses price bar number one, and price bar number three encompasses price bar number two.

Figures 11-2 (Wheat) shows an example of double inside days and the price moves that followed. (Continued.)

During times of economic uncertainty, buying and holding U.S. dollar-denominated assets has long been the standard “flight to safety” many investors have relied upon for shelter from the storm. In recent years however, this trend is waning and investors are turning more and more to the yen and Swiss franc to minimize losses as both currencies have proven more resilient to exchange rate fluctuations.

But it is not just as a “safe harbor” that the dollar is losing popularity. When market conditions are more favorable, risk appetite naturally increases and investors are willing to accept greater risk in the search for higher returns, and on this front, the dollar is also overshadowed. While most other major economies have either already implemented interest rate increases or appear close to doing so, the Federal Reserve continues to favor a continuation of the current record-low rate.

U.S. Losing the Interest Rate Race

Simply put, the dollar is losing the interest rate race and is seriously at risk of being left behind. Australia will continue to hold the top-spot on the list with a benchmark interest rate of 4.75 percent with New Zealand next at 2.5 percent. The European Central Bank hiked rates by a quarter-point last week to 1.25 percent and Governor Trichet strongly hinted that further increases are likely. The Bank of Canada, while opting not to implement an increase earlier this month, stated quite plainly that it expects to put forward a series of hikes later in the year if the economy continues to expand at the current rate.

Contrast these actions and comments with those emanating from the Federal Reserve. Growth is returning to the U.S. and employment is improving but it remains to be seen how the economy reacts with the wrap-up of the “QEII” stimulus spending program scheduled to conclude in June. We will soon learn if the economy has recovered sufficiently to stand on its own without the need for another multi-billion dollar round of spending.

With respect to interest rates, Fed Chair Ben Bernanke has essentially ruled-out an increase in interest rate hikes until late in the year at the earliest. This could be moved ahead if the economy exceeds expectations, but with the stimulus spending due to end in the early part of the summer, and with unemployment still around 8.7 percent or so, the Chairman’s prediction seems reasonable and a cap of 0.25 percent may be with us for some time yet.

USD to Fund Carry Trades?

So what does this mean for the dollar? From an interest rate standpoint alone, the dollar is without question at a disadvantage. In fact, we are seeing a greater use of the dollar to fund carry trades whereby investors sell the dollar in order to buy higher yielding currencies such as the Australian dollar or even the euro. If this continues, there will be even greater selling pressure on the dollar over the coming months.

Article by Scott Boyd, forexblog.oanda.com

By CountingPips.com

U.S. jobless claims increased by more than expected in the week that ended on April 9th, according to a release by the U.S. Labor Department today. Weekly initial jobless claims rose by 27,000 workers to a total of 412,000 unemployed workers and marked the highest claims level in two months. The 4-week moving average of unemployed workers increased by 5,500 workers from the previous week to a total of 395,750.

Market forecasts were expecting jobless claims to decline to 380,000 workers following the previous week’s 385,000 revised number of claims.

Meanwhile, workers seeking continuing claims for unemployment benefits for the week ending April 2nd decreased for the week. Continuing claims declined by 58,000 workers to a total of 3,680,000 unemployed workers. The 4-week moving average of continuing claims decreased by 20,750 workers to a total of 3,728,750.

Produer Inflation increases

The Producer Price Index, released in a separate report by the Department of Labor, rose for a ninth straight month in March as energy costs increased and pushed prices higher on finished goods.

Producer prices increased by 0.7 percent in the month of March following an increase of 1.6 percent in February and a 0.8 percent rise in January. The annual rate of increase for March showed that producer prices were 5.8 percent higher than March of 2009 after February’s annual rate registered a 5.6 percent increase.

Market forecasts were expecting monthly producer prices to increase by 1.0 percent for March. Contributing to the higher producer prices for the month was an increase in the energy index by 2.6 percent and a rise in gasoline prices by 5.7 percent.

Core producer prices, excluding food and energy prices, rose by 0.3 percent in March following a rise of 0.2 percent in February. The data was just higher than market expectations of a 0.2 percent gain.

BOSTON – April 14, 2011 – Currensee, (www.currensee.com), the alternative investment service that gives investors unique access to the world currency markets, today announced that it has secured an additional $4 million as Series C financing from North Bridge Venture Partners, Egan-Managed Capital and Vernon & Park Capital. The C round money brings the Currensee total financing to date to $16.8 million.

“Currensee continues to fundamentally change foreign exchange investing, and its approach has been validated by the market with an incredible year of growth,” said Jim Moran, partner at North Bridge Venture Partners. “Currensee has not only brought transparency to Forex trading, but has also opened up the world’s currency markets to the rapidly growing population of retail investors.”

The past year was marked with the October 2010 launch of the Currensee Trade Leaders™ Investment Program, a service that lets retail investors automatically replicate the trades of some of the most successful traders in the world, called Currensee Trade Leaders. Since the launch, more than $3 billion in volume has been traded through the program. The company has also received more than 1,000 applications from professional and independent expert traders, vying for a coveted place on the Currensee Trade Leader Leaderboard, which showcases each Trade Leader’s performance, risk, return data and investor count. Currensee has also expanded operations into the United Kingdom and created partnerships with European investment banks and brokers.

The latest round of funding will be used to develop new decision-making, collaboration and portfolio management tools for investors to make currency investing even simpler and more transparent. It will also be used to fortify the Currensee technology infrastructure including data center expansion and enhancements to the Currensee Intelligent Trade Replication Technology™, a sophisticated trade automation engine that precisely manages the timing and round-turn execution of trades. The funds will also drive further international development, including the expansion of the Currensee sales teams in the United Kingdom and Europe, as well as new global partnership deals in Asia and Europe.

“Our customers come to us and invest in Trade Leaders mainly because of the lackluster returns and lack of transparency that come with traditional investments,” said Dave Lemont, CEO of Currensee. “We are bringing the world currency markets to every investor looking to move beyond the stock market, while creating a viable alternative asset class for the market as a whole. This new funding will help us expand our distribution globally so that investors and professional money managers can benefit from the fast growing foreign exchange market.”

About Currensee
Currensee is the alternative investment service that puts the power of world currency markets in the hands of every investor. With the Currensee Trade Leaders™ Investment Program, investors build their own automated trading portfolios of Trade Leaders, top foreign currency traders hand picked from the thousands of members of the Currensee social network. The program offers investors an alternative to traditional asset classes and Trade Leader performance is completely uncorrelated to the stock market. Currensee delivers complete account control to investors, who can see every trade in real time, manage and modify investment allocations with one click and benefit from the safety and security of proprietary online investing technology. Currensee is funded by North Bridge Venture Partners, Egan-Managed Capital and Vernon & Park Capital and is a member of the National Futures Association (NFA) and registered by the Financial Services Authority (FSA). For more information, visit us at www.currensee.com. Find us on Facebook, follow us on Twitter, and watch us on YouTube.

Please note that over the counter retail foreign currency (Forex) trading may involve significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading, and seek independent advice if necessary. Performance, strategies and charts shown are not necessarily predictive of any particular result. Past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

About North Bridge Venture Partners

North Bridge Venture Partners is an active, bi-coastal, early-stage venture capital firm based in Boston, Massachusetts and San Mateo, California. Established in 1994, North Bridge provides seed-to-growth financing and company-building expertise. Together with North Bridge Growth Equity, our mid-market focused growth capital fund, North Bridge manages over $3 billion. For North Bridge Venture Partners, success is derived through a partnership with entrepreneurs that produce industry-leading companies in large emerging markets. Historically, the firm’s partners have played a significant role in organizing, starting and building successful companies. Working in concert with entrepreneurs, North Bridge adds value by providing strategic guidance, sharing operating experience, industry specific knowledge, team-building skills and an in-depth understanding of both private and public financings.  North Bridge’s sector focus includes Software, Communications, Healthcare Technology, Digital Media, and Materials. For more information about North Bridge go to www.northbridge.com.

About Egan-Managed Capital

Egan-Managed Capital is a New England focused venture capital firm that provides funding for early-stage high-technology start-ups. Egan-Managed Capital delivers field-tested strategies, first-hand technology expertise and hands-on management involvement. Some of the region’s most promising start-ups have been funded by the firm, including Pyxis Mobile, OnePIN, OwnerIQ and uTest. Founded in 1997, the firm currently manages funds with $233 million in committed capital. For more information on Egan-Managed Capital and its team please visit www.egancapital.com.

About Vernon & Park Capital

Vernon & Park Capital is a private equity firm that focuses on investments in the Financial Markets Sector. Since 2001, Vernon & Park and affiliated parties have combined industry expertise and experience with rigorous financial analysis to successfully deploy its investment capital in the Sector. Through its investment activities, Vernon & Park provides capital to its portfolio companies and utilizes its extensive network of industry contacts as a strategic resource to help those companies realize their full economic potential. Vernon & Park will consider investments in companies at any stage of development ranging from earlier-stage emerging growth companies to more mature businesses in the Financial Markets Sector. For more information, visit the website www.vernonpark.com.

Adam Hewison’s 1pm Afternoon Update on the Forex, Stocks, Commodities, ETF Markets

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By Russell Glaser

The NZD/USD is encroaching on a significant resistance level that if broken should spur further bids.

Earlier today the New Zealand dollar reached as high as 0.7955 and is currently testing the October high of 0.7975. A weekly close above this resistance level will target the Q1 2008 high at 0.8210.

To the downside, the previous resistance levels at 0.7830 and 0.7630 should turn into supports. The rising uptrend off of the 2009 and 2011 lows comes in this week at 0.7200, followed by 0.7117.

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.

Video courtesy of ForexCT – A leading Australian forex broker, liscensed by the Australian Securities & Investments Commission, offers the MetaTrader4 and PROfit Platform to retail traders. Other services include Segregated Accounts, Trading workshops, Tutorials, and Commodities trading.

Video courtesy of ForexCT – A leading Australian forex broker, liscensed by the Australian Securities & Investments Commission, offers the MetaTrader4 and PROfit Platform to retail traders. Other services include Segregated Accounts, Trading workshops, Tutorials, and Commodities trading.

Source: ForexYard

The euro zone’s fundamental data have lately been showing growing weakness in the region as global industrial production begins to slow on Japan’s nuclear crisis and soaring oil prices. Monetary policy adjustments have many currencies trading more volatile than they have been recently. The British pound has experienced a few price swings and the move into and out of carry trades has made trading the Swiss franc, Japanese yen and even US dollar more unpredictable.

Economic News

USD – Retail Sales Data Boosts USD

The US dollar gained some ground yesterday as positive figures from the retail sales data and poor fundamentals out of Europe helped drive investors into the greenback. The more volatile reading from general retail sales, including automobiles, showed only a 0.4% growth whereas the core data published 0.8% growth. Supporting the retail sales figure was a better than expected reading from this afternoon’s business inventory report which had inventories growing only 0.5%.

The impact from these data was felt almost immediately on USD pairs as the greenback inched higher against a number of its currency rivals from the injection of positive news. Retail sales measures consumer spending and provides investors an early look into the month’s estimates on consumer sentiment. It therefore tends to have a visible impact on dollar pairs; today was no exception.

Coupling the sales data with this morning’s industrial production figures out of Europe, which revealed slower growth than was expected, helped the EUR/USD pull down from Tuesday’s gains. Traders may begin to anticipate a draw-down in the pair as fundamentals tilt more and more towards the greenback. With today’s PPI figures out of the United States, there is a chance that stable inflationary growth will help continue the recent trends in the market.

EUR – EUR Trades Lower as Industrial Production Figure Disappoints

The euro experienced a downturn yesterday as the region’s industrial production figures failed to meet expectations. The EUR/USD bounced off its 1.45 resistance line and currently trades near the 1.4440 level as of this morning. Very little technical information supports the price to move in either direction, but fundamentals appear to be shifting in favor of the greenback.

The euro zone’s fundamental data have lately been showing growing weakness in the region as global industrial production begins to slow on Japan’s nuclear crisis and soaring oil prices. Monetary policy adjustments have many currencies trading more volatile than they have been recently. The British pound has experienced a few price swings and the move into and out of carry trades has made trading the Swiss franc, Japanese yen and even US dollar more unpredictable.

The euro zone is largely absent from the economic calendar today, with most news circling American inflationary and unemployment data as well as Canada’s manufacturing sector. On a different note, the G7 begins its meetings today ahead of the weekend’s G20 and IMF meetings. The topic will be on recent global economic activities, with special emphasis on the Japanese nuclear crisis. Major currencies will likely be experiencing heavy volatility as a result of these meetings.

JPY – Japanese Yen Meeting Resistance as Risk Appetite Returns

This week’s talk of rising risk aversion may have come to a halt yesterday as American retail sales data helped highlight growing consumer optimism, higher oil inventories signaled resistance for over-bought crude oil, and British unemployment fell an unexpected 0.2%. The impact has been for safe havens, like the Japanese yen, to find its feet swept out from underneath it.

The yen has fallen against most of its currency rivals since yesterday. The USD/JPY has risen from 83.47 yesterday afternoon to 83.93 by this morning. Against the British pound, traders have witnessed a leveling-off effect as the pair consolidates around 136.40. With the economic calendar today focused on American economic news, the yen will likely not experience much change unless the US economy continues to release positive data. If that is the case today, traders may want to anticipate a second rise in risk appetite as traders move to higher yielding currencies.

OIL – Unexpected Rise in Inventories Lifts Oil Prices

After dropping almost 3.3% in trading since Tuesday, the price of Crude Oil appears to be receiving some support, though traders appear weary of a rising price of oil. US crude inventories grew last week by 1.6M barrels, beating expectations for a 0.9M barrel rise.

The price of oil has only gained modestly on the day, reaching from $105.20 towards $107.00 over the past 24 hours. Technical traders appeared to be weighing in at a buy mark located near the $105.30 mark, eventually tilting the commodity back into a bullish posture, albeit weakly. With much news expected out of the American economy today, oil prices could undergo significant volatility as traders begin to gauge the impact of price swings in the US dollar.

Technical News

EUR/USD

The pair continues to test the 1.4520 short term resistance level. Daily stochastics are beginning to decline and a pullback may be in store. The support of 1.4245 may provide a good entry level as this coincides with the rising trend line off of the January low and 20-day moving average. A bullish strategy remains in effect with a target at 1.4850.

GBP/USD

A bit of consolidation has occurred following a failed breach of the 1.6425 level. However, rising stochastics on the weekly chart point to an eventual break of this price level. As sometimes happens, the pair retraced back to the trend line from the 2007 high has moved higher. This level could be the weekly low. The next resistance lies at 1.6460, followed by 1.6880 for an initial target. On an extension, the target moves higher to the 2009 high at 1.7040, a level that coincides nicely with the 200-week moving average.

USD/JPY

The pair has sold off following a failed breach of the 85.50 level, a price that coincides with the trend line off of the 2007 high. Last night the pair found resistance at the March high of 83.30. A close below this level on the weekly chart could set the stage for a move lower to 81.00 and a further decline to the bottom channel line which comes in this week at 76.60. To the upside, a breach of 85.50 would set the stage to test the 88 level.

USD/CHF

Following a failure of the pair to close above the 50-day moving average the downtrend has resumed. 14-day Momentum is falling sharply and the pair should eventually test the all-time low from March at 0.8904.

The Wild Card

Silver

After a pullback at the $42 mark on Monday where the daily candlestick made an outside day pattern, a candlestick reversal pattern that engulfs both the high and the low of the previous day’s candlestick, the commodity looks move higher. Yesterday’s candlestick closed on a shaved head indicating that momentum has swung to the upside. Forex traders should look for a retest of the $42 level.

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

Time:19.30  Rate:1.4477

Strategy: short

Daily time frame

The price was not able to break out another day the level of 1.4520, and the upper side of the parallel upward channel. Most likely the price will decrease to the level of 1.4330 in the first stage. (a third retracement of CD).

As can be seen by the graph bellow:

4 hour time frame

 The price created an evening star (brown background) under the resistance level 1.4520 and the breakdown of the level 1.4430, will most likely bring it to the level of 1.4330, retracement of the third Fibonacci of the continuous upward movement (broken blue line).

Potential Trade

Short

Enter: 1.4430

Stop: 1.4525

Target: 1.4330

As can be seen by the graph bellow:

GBP-USD

Time: 19.30  Rate: 1.6277

Strategy: short

Daily time frame

The price was supported on the level of 1.6240 (third retracement of the continuous upward movement- broken blue line). The breakdown of the price of this support level will bring it to the level of 1.6110 (two thirds retracement of the continuous upward movement).  

As can be seen by the graph bellow:

4 hour time frame

The price broke the resistance level 1.63, and we believe that in the first stage will get to 1.62, support level. If and when the price will break the price level 1.6200, most likely will get to the level 1.60.

As can be seen by the graph bellow:

Important news for the 14.04.2011

Time: 15.30 USD PPI m/m

Time: 15.30 USD unemployment Claims

Time: 15.30 USD Core PPI m/m

All day: G7 meetings

RISK DISCLAIMER

Forex trading involves high risk. Before any trade, you should consider carefully the investment objectives and the level of risk. The data sent by mail is not necessarily real-time data or precise. Real-Forex is not liable for the losses resulting from the utilization of the data. Real-Forex (Finnocorp Trading Solution Ltd

.) is not liable for losses or damages as a result of reliance on the information provided by e-mail or on the overall data, quotes, charts, signals buy / sell. It is hereby clarified that the investor must be aware of risks involved in trading in financial markets, which is a form of investment that may contain potential risks.

Real-Forex team

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