Month: April 2011

By James McKee

Due to recent developments on the world stage many countries are edging ahead of others, creating a massive rift in-between those countries which just beginning to develop and those that are established. The measures being purposed will in all likelihood cover developing nations with regard to the interest rates of loans they are receiving from developed countries. This is a plan that may or may not meet with the approval of developed nations however since there are already a lot of problems occurring within the economies of “wealthy” nations. The government s of these nations are unlikely to cooperate with aiding these nations very easily.

Instead there is likely to be a great deal of tumult of as countries attempt to help themselves rather than their neighbors. Convincing the EU or the United States to give any more money to developing nations is going to be a very difficult proposition since they are already too poor to run their own countries. The value of the USD has been slumping on the online forex exchange for some time now because the United States economy has been in trouble for over a decade. With the constant threat of a depression looming over a United States that is already in a recession many do not see the possibility for the country helping other countries in need.

This has been a reality for some time now, and many nations that were dependent on US aid are finding themselves unable to pay for many of the things they used US money for in the past. As a result of this “drying up” of aid the world’s economy itself is being hurt, and many are blaming the United States for no longer contributing to the aid of other nations. This lack of support coming from the US has lead many to realize that the world’s economy is in serious trouble.

About the Author

Author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to check out the online forex trading regularly.

By Greg  Holden

As is typical around holiday trading sessions, investors appear overly cautious as thin trading and an absence of market-guiding data releases leave the forex market exposed to wide swings. Most analysts appear to be advising caution on their clientele as tight ranges on the major currencies are to be expected.

This environment, however, has the possibility of creating false impressions for inexperienced traders. The market is calm today. The problem is that it shouldn’t be. Given the news, data releases and comments flying about this past week, the major currencies should be on edge, vying with one another in a volatile market. Instead we have calm.

All we can do at this point is try to get a feel where most investments will be coming in at the start of next week. Given the cautious environment on Friday, it may not make much sense to be actively trading with quick ins and outs. But longer-term investors may find this market a stable environment to assess their portfolios and adjust their positions ahead of Monday’s return to full-bore trading.

Given what we’ve seen over the past several days it seems safe to say the EUR/USD, GBP/USD and USD/JPY are set to continue their dominant trends at the start of next week. The EUR is a top performer lately and fundamentals, technical data, and market tone appear to be favoring its continued rise, as pointed out in an earlier article.

The deceptive rise of the US dollar in today’s trading is likely due to the last gasps of traders pushing down on the euro after ECB President Trichet’s comments the other day. As the market returns full volume next Monday, traders who cautiously left themselves in the safety of the USD appear poised to shift directions and flood back into higher yielding assets.

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.

Source: ForexYard

Traders watching the price of oil climbing with despair were disheartened yesterday as shifts in risk sentiment and thin holiday trading conditions helped push the price of oil over $112 a barrel. Both US President Barack Obama and ministers from the Organization of Petroleum Exporting Countries (OPEC) have affirmed that current oil supply levels are adequate for global demand, arguing that speculation is a prominent factor driving the price to its recent highs.

Economic News

USD – USD in Decline for Third Straight Day

The US dollar continues to lose ground as positive data helps generate risk appetite in the global market. Many have speculated that this downturn is also being fueled by record low interest rates that are beginning to reveal dissonance with public attitudes towards inflation.

The USD found itself in a downward spiral after Standard & Poor’s ratings agency attached a negative outlook atop US debt. The agency warned that a downgrade to the US’s AAA standing may be in order if measures are not taken in the next two years to tackle their over burgeoning debt level. The fact that the greenback has been in a steady decline ever since the downgrade reveals the pessimism among global traders about the possibility of such action being taken.

A number of analyst have written on the disparate monetary policies between the US and Europe, but yesterday’s remarks from Jean-Claude Trichet about softening the European Central Bank’s (ECB) stance on interest rate hikes may prove the US vindicated over the short-run.

Traders may begin to anticipate a corrective downturn in the EUR/USD pair next week as markets digest Trichet’s remarks. With today’s bank holidays around the world, traders should be on guard against intense volatility as thin market conditions tend to produce wide swings.

EUR – EUR Mixed after ECB Softens Position on Rates

The euro experienced mixed results after the European Central Bank (ECB) President Jean-Claude Trichet made remarks that appeared to soften the bank’s official stance on monetary policy. As a result, the EUR/USD bounced off its 1.4600 resistance line and currently trades near the 1.4590 level as of this morning. This week’s thin market conditions from the Easter holiday provide little support to move the price of the euro in either direction, and yesterday’s comments only confused market direction even further.

The British pound has also experienced a few volatile price swings from thin market conditions and the move into and out of carry trades has made trading the Japanese yen and Swiss franc more unpredictable. But yesterday’s shift into riskier assets is providing some normalcy for short-term traders though Trichet’s comments did not help.

The economic calendar today is utterly empty short of retail sales figures out of Italy. Overall, most traders will be absent today’s market as banks shut down in observance of Good Friday prior to this weekend’s Easter celebrations. Italy’s retail sales data may give a bump to the EUR if it comes out positive, but any significant shifts will be offset by the return of normal volume on Monday. Traders simply need to guard their positions against intense market volatility today in expectation of violent swings due to thin trading.

JPY – Japanese Yen Bullish vs. Dollar as US Manufacturing Plummets

The sudden sharp drop in the US Philly Fed Manufacturing Index sparked a sudden shift into the Japanese yen against the dollar yesterday. Traders appear to be revealing a bias away from the greenback in favor of the yen as global risk appetite levels bounce rapidly between economic regions. The unexpected softening of the ECB’s stance on monetary policy yesterday also convinced a number of investors to shy away from the euro zone in favor of some level of safety during this uncertain period, exasperated by thin holiday trading.

Lower oil stockpiles in the US may also have signaled positive industrial growth in the US, and Australian import prices and inflationary data grew more than expected, leading many to speculate a tightening of monetary policy by the Aussie giant. Yesterday’s claim had the impact pulling down on the JPY, but the ECB’s remarks mixed with the Philly Fed data has actually helped the yen in short-term trading. As most other markets close today, traders may want to eye the Japanese market a little closer since it will remain active during the holiday session.

Crude Oil – Thin Market Helps Extend Oil Price Gains

Traders watching the price of oil climbing with despair were disheartened yesterday as shifts in risk sentiment and thin holiday trading conditions helped push the price of oil over $112 a barrel. Both US President Barack Obama and ministers from the Organization of Petroleum Exporting Countries (OPEC) have affirmed that current oil supply levels are adequate for global demand, arguing that speculation is a prominent factor driving the price to its recent highs.

Looking through a variety of recent analyses may support this notion given that most expect either continued unrest in the Middle East-North Africa (MENA) region, or a flare-up of new conflicts as tensions continue to spread. This expectation convinces many large investors to bet on a rising price, thus driving the price higher than it otherwise would be, exactly the sentiment President Obama made in a town hall meeting in Virginia just days ago. If true, oil traders may continue to expect rising prices through the days ahead since such speculation is not likely to come to an end anytime soon.

Technical News

EUR/USD

There is a very distinct bullish channel formed on the 1-day chart, as the pair is now floating in its upper section. In addition, as both the MACD and the Slow Stochastic in the daily chart provide bullish signals, it appears that the pair might see another rising trend today, with potential to reach the 1.4700 level.

GBP/USD

Ever since peaking near the 1.6600 level, the cable began correcting downwards, and is currently trading around the 1.6500 level. In addition, as the RSI in the 4-hour chart is pointing down and is about to cross the 70-line, it seems that the bearish correction might extend. Going short with tight stops appears to be the right strategy today.

USD/JPY

There is a very accurate bearish channel formed on the 4-hour chart, and the pair is now floating in its middle. Currently, all the technical oscillators on the daily chart are pointing down, suggesting that another bearish session could be expected. Going short seems to be the right choice today.

USD/CHF

The USD/CHF pair continues with its free-fall and is currently trading near the 0.8860 level. Currently, as a bearish cross takes place on both the daily chart’s Slow Stochastic and MACD, it looks that the pair might see another bearish session today, with potential to reach the 0.8750 level.

The Wild Card

AUD/CAD

The AUD/CAD pair climbed about 200 pips over the past few days and is currently trading near the 1.0220 level. In addition, as the MACD on the 4-hour chart and the RSI and Slow Stochastic on the daily chart are providing bullish signals, it seems that the pair may rise further before the weekend. This might be a good 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.

Investing in the stock market carries substantial risks. That is why perhaps a lot of Filipinos, who are generally conservative in nature, are turned off by it. But with Digitel (DGTL), one can make easy money without taking much risk. Let me tell you how.
 

Last March 28, Gokongwei-led Digital Telecommunications, Inc. or Digitel zoomed to a high of PHP 2.00 from PHP 1.60 on take over rumors by Manny Pangilinan-led Philippine Long Distance Telephone Company (PLDT) or TEL in the Philippine Stock Exchange. The next day, however, DGTL’s shares fell back to earth to a low of PHP 1.54 when the details of PLDT’s buy-out were reported.

In the report, JG Summit Holdings, the mother company of Digitel, the operator of Sun Cellular, would give up 51.55% of the latter to PLDT in a share-swap deal with a value of PHP 74.1 billion that would give JGS a 12.8% ownership in TEL. Under this transaction, PLDT is expected to conduct a tender offer purchase for DGTL’s shares at PHP 1.60 from minority holders by June 30, 2011. In other words, PLDT will buy it from the market at that indicative price.

An arbitrage opportunity is presented here since DGTL’s shares are only trading at PHP 1.54. This will give you a potential 3.89% gross earnings in a little more than 2 months. This, of course, is way better than the 3% or so that you can get by placing your money in a time deposit or in a Special Deposit Account (SDA) in a year in any commercial bank!

More on LaidTrades.com …

USDJPY’s downward movement from 85.51 extended further to as low as 81.62. Resistance is at the upper border of the price channel on 4-hour chart, as long as the channel resistance holds, downtrend could be expected to continue and next target would be at 81.00 area. Only a clear break above the channel resistance could indicate that the downtrend from 85.51 is complete, then the following upward move could bring price back to 83.50 zone.

Daily Forex Analysis

The holiday shortened sixteenth trading week of the year comes to a close as investors fret about about lackluster economic data, though drive stocks higher on optimism and good earnings.

Chip makers Intel (INTC) and Micron (MU) announced late yesterday that they have officially opened a joint venture, IM Flash, in Singapore. The $3 billion facility will produce the companies 25 nanometer NAND Flash memory.

By Greg Holden

The Reserve Bank of Australia (RBA) is receiving additional pressure with each passing week to tighten its monetary policy in the near future. Data has shown inflation rising in Australia at levels beyond expectations and analysts are now expecting the RBA to take steps to control such growth.

As an example of recent pressures mounting the RBA’s next rate decision is Wednesday’s report on surging import prices which rose an unexpected 1.4% on the quarter, above the expected 0.8%. This morning’s higher-than-forecast Producer Price Index (PPI) out of Australia also supports this notion with a reading of 1.2% growth.

The Aussie dollar has been rising for some time, only recently experiencing uncertainty on Chinese rate statements following last week’s G20/IMF meetings. Business sentiment in Australia is also rising with today’s confidence survey by the National Australia Bank (NAB) signaling sufficient optimism emerging in the Aussie economy.

The combination of positive inflationary growth with speculation that the RBA will undertake monetary tightening in its next round will likely affect AUD values to the upside. Traders may want to take advantage and begin pricing in such expectations. Look to continue going long on the Aussie dollar in the near future.

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.

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