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.
The dollar block currencies are advancing versus the USD on an improving risk environment with the passage of the Greek austerity measures. Sterling is down sharply across the board while the euro looks to have stalled at a technical level. Month end portfolio rebalancing could make things interesting as traders look towards tomorrow’s ISM PMI release.
Both the AUD and NZD were up this morning while the NZD/USD climbed to a new high of 0.8316 before pulling back near 0.8270. Spurring the gains was a carryover from yesterday’s Greek austerity vote that should secure the fiscally strapped nation the 5th tranche of funding from the last bailout from the EU/IMF.
ECB President Trichet used comments today to emphasis the ECB will take “strong vigilance” towards inflation and warned today on any potential debt settlement that was not purely “voluntary”. Meanwhile German holders of Greek debt appear to have formed a consensus on how to approach a potential rollover of their holdings. More details will follow and it will be interesting how it compares to the French rollover plan which calls for a rollover into new bonds of 5-year and 30-year maturities. While German banks hold a greater share of Greek sovereign debt, French banks recently took large equity stakes in Greek banks that hold large amounts of Greek debt and are therefore committed to working out an agreement. The euro was up against the dollar but the rally stalled at the top of the triangular consolidation pattern that has support near 1.4540. This should cap the gains today barring any new dramatic improvement in risk sentiment though a breach higher and the EUR/USD would likely test the June high at 1.4700. Support is seen at 1.4440.
Sterling fell sharply as month end demand for euros by a few major UK banks may have caused the quick spike lower. Nevertheless the flows were able to push the EUR/GBP to a 40-day high which underscores sterling’s weakness even versus the flawed euro. Cable is also weaker and a negative release for tomorrow’s UK manufacturing PMI numbers and the GBP/USD may have scope to push beyond the 61.8% Fib level at 1.5910 from the January to April move.
US unemployment claims and the Chicago PMI are due up in the afternoon but the Canadian Q1 GDP release highlights the list of news events during New York trading. Yesterday’s surprise uptick in Canadian inflation caught traders on the wrong side of the market as positioning had moved in favor of the dollar as of last week’s COT report. The CAD is again performing well and a strong GDP reading may allow the USD/CAD to test support at 0.9510.
Read more forex trading news on our forex blog.
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.
With the parliament in Greece voting in favor of the austerity budget yesterday, most traders began to shift their portfolios to higher yielding assets in expectation of smoother sailing for the region, at least for a while.
The Canadian dollar (CAD) was seen trading significantly higher yesterday following bullish reports about its level of inflationary growth. The agency Statistics Canada released its latest findings on CPI and Core CPI yesterday afternoon, both of which outpaced forecasts.
The nominal reading was seen moving higher than the core data, implicating a jump among the 8 volatile goods and services which the core reading excludes. Inflation in Canada was a concern last month, as several reports highlighted shrinkage in the northern giant’s manufacturing and industrial sectors. A dip in oil prices is also beginning to gouge the Loonie’s value in technical trading.
The implications which yesterday’s CPI figures bring to today’s economic calendar is a possibility of unexpected growth in Canada’s gross domestic product (GDP) report. The Canadian economy will be publishing its monthly update on the nation’s GDP with expectations for a contraction of 0.1%. If the bullish CPI growth factors into recent market forces, the GDP reading may also come in above expectations which would likely lead to another bullish leap by the CAD in this week’s trading.
Trading moderately higher yesterday, the EUR found support following news of heightened risk aversion across the region. With the parliament in Greece voting in favor of the austerity budget yesterday, most traders began to shift their portfolios to higher yielding assets in expectation of smoother sailing for the region, at least for a while. Prior to the vote, the EUR/USD was seen trading somewhat hesitantly, edging above $1.43 for the first time in a week. After the vote, the pair jumped above $1.44 before flattening out.
Long-term structural debt concerns across the euro zone still linger and many investors have taken reports from the manufacturing and industrial sectors these past two months as an indication that the economy is slowing over the second quarter. A somber economic news day yesterday held volatility to a minimum as investors awaited the results of the Greek budget vote, which passed amid violent protests around the country’s capitol. The market jubilation at the news of a passed budget helped riskier assets climb throughout the latter half of the day.
With today’s heavy news day ahead, traders will want to pay attention to the shifts in risk sentiment following yesterday’s euphoric highs. Given the large string of economic indicators being published in the euro zone today, the possibility exists for current sentiment to get turned around. So far, however, optimism appears to be prevailing and traders are seeking riskier assets, driving the EUR higher as the Asian session wore on.
The Japanese yen (JPY) was seen trading sideways yesterday, holding only slightly above intervention levels versus the US dollar (USD). Yesterday’s bullish industrial output data, along with Tuesday’s retail sales data, has so far helped turn the tide from a dismal few months for Japan. Traders seeking risk also appear to be hedging with JPY carry trades from the appealing nature of the yen these past few days.
News for today is focused on the ramifications of Greece passing its austerity budget yesterday. Sentiment appears favorable for a jump into higher yielding assets among global investors. The JPY may dip against its rivals somewhat as a result, but this week’s strongly bullish data may help it retain some value. Traders should be on the lookout for any shift in sentiment which will push investors en masse back to safety, of which the JPY will likely benefit the most.
Crude Oil prices dropped may find themselves in decline this week after yesterday’s oil inventories report from the United States revealed a sharp decrease in US stockpiles. The news was not unexpected considering President Barack Obama announced recently that strategic reserves would be released in order to ease rising gas costs for US consumers. The pressure this release may put on oil prices, however, could drive the price lower in the short-term.
Sporadically moving dollar values may have also helped many investors pause on their long-taking positions on physical assets. The passage of Greece’s austerity budget yesterday could fuel a return to growth behavior that may counter this move, though, leading to a tug-of-war between bears and bulls on the commodity markets. Should sentiment hold steady this week, oil prices may fail to find support and begin to move back towards $90 a barrel.
Momentum has now turned lower as falling stochastics appear on the monthly, weekly, and daily charts. Initial support comes in at the June low of 1.4075 and the May low of 1.3970. A break here and technical traders will target the 200-day moving average at 1.3860. While the 8 cent decline from the May high is a sharp drop, traders should keep in mind that the correction the pair is currently undergoing is just that, a correction. Buyers may be lurking at the rising trend line from the June 2010 low. Resistance comes in at the recent high of 1.4440 where the 50-day and 20-day moving averages are floating.
The pair has broken a significant technical barrier at the neckline from a head and shoulders pattern which measures a target at 1.5370. Monthly and weekly stochastics are turning lower so traders may expect further declines. Support is located at the March low at 1.5935 followed by the late January low at 1.5750. To the upside the neckline from the head and shoulders pattern at 1.6120 could offer traders a level to enter short as many times in a head and shoulders chart pattern the pair will revert back to the neckline only to head lower from there.
Yen bears are making a stand at the 80 level. A previously broken trend line from the April high comes in at this level and will also support the bears. However, once this last bastion of support is broken the fallout could be similar the price action in March. Should the move higher continue, resistance is found at 81 and 81.75.
The previous resistance at 0.8550 held and the all-time low at 0.8325 is continually being pressured so a break here may be in the works. An absence of supports or trend lines below this level makes it difficult to predict how low the pair could go.
After failing to move above its 200-day moving average the USD/CAD has pulled back for three consecutive days and is now testing the base of its broadening chart pattern at 0.9680. Forex traders should note a break of this level would likely signal a continuation of the long term downtrend after a period of consolidation.
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.
Follow through was seen into today’s European trading session with the euro and other higher yielding currencies receiving a bid. An additional Greek vote on austerity measures will come today though this should be more of pomp and circumstance when compared to yesterday’s drama. Technicals hint at a period of consolidation versus the dollar but with euro strength brings opportunities for traders to enter into the EUR/CHF at better levels.
Today’s Economic Data Releases
EUR – CPI Flash Estimate y/y – 09:00 GMT
Expectations: 2.8%. Previous: 2.7%.
Yesterday and today Trichet spoke of the need for “strong vigilance”, another sign of the ECB’s intention to lift interest rates at its next meeting. Euro zone inflation is expected to remain at higher levels for now which could be supportive of further gains. This may offer traders an opportunity to enter into the EUR/CHF at better levels as the pair comes off of its all-time low. Resistance is found at 1.2150.
USD – Unemployment Claims – 12:30 GMT
Expectations: 419K. Previous: 429K.
Weak US unemployment numbers would likely support dollar bids which would come just in time as the EUR/USD is reaching the top of the current triangular consolidation pattern on the daily chart at 1.4540. A pause here would likely keep the pair range bound with a negative technical bias while the market awaits further developments in the Greek story.
Read more forex trading news on our forex blog.
By Cedric Welsch
The foreign currency exchange is a organization whose consumers trade one type of money for yet another. A trader bureau is usually based at a financial institution, at a travel broker, airport terminal, major train station or big stores that is anyplace there is apt to be a place for individuals having a need to exchange monies.
Therefore they are specifically notable at travel hubs, although money can be changed in lots of different ways both legitimately and illegally in some other settings. An exchange can make earnings and compete by manipulating a couple of factors, the trade amount they utilize to determine dealings, and the specific commission rate for services.
The trade prices charged at exchanges are usually associated with the spot rates available for substantial interbank dealings, and therefore are modified to ensure earnings. The amount from which a institution will purchase money varies from that of which it’s going to sell it for each currency it trades the two will be on exhibit, usually in the store window.
This specific business design might be troubled with a money run any time there are a lot more purchasers than sellers or vice versa since they sense a specific currency is overvalued or perhaps undervalued. The company could also demand a fee on the exchange.
Commission is mostly priced as a percent of the amount to be traded, or a set charge, or both. As a further complication some dealers offer you special bargains for consumers returning unspent foreign monies following a holiday vacation.
Exchanges hardly ever purchase or market coins, however often will at an increased earnings perimeter, justifying this specifically because of the expense of storage and shipment in contrast to banknotes. Switching funds at a agency is usually more costly than withdrawing it at a automated teller machine at a person’s desired destination or perhaps paying directly by debit or perhaps charge card, however this differs with respect to the card provider and the type of account.
Some might also choose to keep foreign currency instead of changing it back again if they expect to come back to where it’s utilized. Businesses that regularly post staff members overseas may basically act as their very own exchange simply by reimbursing their own workers in that countries money and keeping the currency. If swap costs are fairly steady, the costs billed by a bureau might surpass any probable fluctuation and it also keeps the business’s accountancy simpler.
It is about time that beginning traders do forex research in a way that would much professionals.
The debilitating impact of scams is just unacceptable, that is why traders need a forex scam review.
GBPUSD is facing the resistance of the downtrend line from 1.6441 to 1.6261, a clear break above the trend line resistance will indicate that a cycle bottom had been formed at 1.5912, then lengthier consolidation of downtrend from 1.6546 could be seen. On the other side, downtrend could be expected to resume after touching the trend line resistance, and another fall towards 1.5500 could be seen after breaking below 1.6000 level.
By Cedric Welsch
The foreign exchange market may be called a phenomenon because it is something that has occurred without human planning or deliberation. It is a very interesting example of something that has happened as a result of the colliding of things in the technological sphere. Events have transpired so rapidly tat the word ‘forex’ is not yet in many dictionaries.
In the 1970 the economic boom in China was as yet unheard of and the American dollar ruled the financial world. The Bretton Woods system allowed countries outside the USA to set the value of currencies relative to the dollar. This had the unwelcome effect of keeping the dollar strong so America unilaterally allowed it dollar to float with recourse to the decisions of other countries. This gave birth to the forex phenomenon as it is known in the twenty-first century.
Globalization has the foreign exchange at its centre. The mission of foreign exchange trade is to facilitate global transactions by allowing a country to buy and sell goods in the currency of another country and repatriate the proceeds.
Communication and transportation technology has also facilitated the new volumes of trade which rely on the world wide web for communication that is absolutely essential for the volumes that are recorded. The market does not reside anywhere in particular. It has no one building or stall, but is located in banks and financial houses across the globe. It may be partially true to say that its location is in World Wide Web.
The market could not function as it does without the Internet. This facilitates rapid communication and allows for the massive volumes that are transacted. The fact that the Internet only materialized in the final decades of the twentieth century illustrates how recent the phenomenon is and how massive institutional organizations and ordinary individuals have access at different levels to the same market.
In the real estate situation a buyer or seller may wait for six months for a suitable transaction to be completed. This is not the case in foreign exchange where buyers and sellers can find willing trading partners instantly. Such liquidity has probably never before been equalled.
Like a growing orgasm the already huge foreign exchange market continues to expand. It is estimated that the daily turnover is in excess of three trillion dollars and still growing as new participants flood in through the Internet. It may not be an exaggeration to say that it has already become a permanent feature of the financial world that exceeds anything that has occurred before in human history.
The uprising of forex techniques will always make things a little extra competitive to all.
Whereas, you as a wise trader, must always look at the fundamental fx trading strategies.
By CountingPips.com
The Euro has been stronger in forex trading against the US dollar as the much anticipated Greek vote on austerity measures passed earlier today. The Greece Parliament approved the $40 billion measure, which includes a combination of tax raises and spending decreases, by a vote of 155 to 138 with 5 abstaining. The European common currency has advanced on the day against the US dollar, Swiss franc, British pound sterling and the Japanese yen while losing ground against the commodity currencies in the Australian dollar, New Zealand dollar and the Canadian dollar.
US stock markets have been higher today with the Dow Jones industrial average increasing by approximately 50 points, the NASDAQ up by almost 3 points and the S&P 500 is higher by over 7 points at time of writing.
In commodities, crude oil has pushed higher by proximately $1.74 to trade at the $94.63 per barrel level while gold futures are higher by over $8.00 and stand at the $1508.00 level.
EUR/USD Forex Daily Chart – The euro has been back on the uptrend the last three days versus the dollar in forex trading as the EUR/USD pair has fought back above the 1.4400 level today on the Greek vote. The pair encountered resistance at the monthly pivot level near 1.4440 today (orange line). A close above the 1.4400 level would be the highest close since June 14th and more bullish action could provide a test of the 1.4500 resistance and further possibly up to the 1.4640 resistance level. Downside targets include 1.4300, 1.4250 and 1.4120 as possible support levels.
Over the past few weeks, we’ve seen just how volatile the financial market can be… Huge swings, like when the Dow dropped more than 672 points in 2 1/2 weeks, can throw a wrench in even the best-laid investment plans.
You’ve heard us time and time again tell you to prepare an exit strategy before you even jump into an investment.
But I’d like to share with you an investment strategy that helps you stay in a trade, while protecting your gains at the same time.
This strategy comes from Michael Robinson, editor of American Wealth Underground and 180 Trader.
Recently, Michael helped his American Wealth Underground readers lock in 250% gains with this specific strategy.
I asked him about his methods. He said:
I’m a long-term bull who is reluctant to sell shares of really great companies. The winners are hard to find in this field and thus difficult to dump. But we must protect ourselves against the market’s intense volatility. So, using stop-losses on half the stock means you get to book some gains and still take part when the rally occurs. All four rare earth giants listed here rallied back to about the trailing stop-loss level.
Now, this is what that looks like in a real example. I can’t give you the name of the company for obvious reasons, but this will explain how Michael can take such great gains and remain invested in a volatile market.
Michael recommended Company X a year ago, and boy, did it take off, climbing some 300%. That is a substantial gain that you don’t want to lose to a volatile market.
But it’s also got huge momentum, and the potential for even more gains, so any protection that takes you out of the trade also takes you out of that momentum.
So Michael told his AWU readers to set a stop-loss.
Ordinarily when we talk about setting a stop-loss, we talk about a price at which you sell your whole position when share prices start to slide against you.
But what Michael did was tell his readers to only sell 50% of their position if Company X hits the stop-loss.
That allows readers to take huge gains in a crazy market and still be positioned once Company X rebounds. That’s how readers locked in a gain of 250%, with the hope of more to come as Company X is already starting to move higher again.
This stop-loss strategy might be different from the one you use, but it sure is powerful.
Now let me enhance this investment strategy for you. Michael set a specific stop-loss exit price for Company X. That certainly locked in gains for his readers. But what if Company X climbed another 5% or 10% before dropping back to that stop-loss price?
His readers could have lost out on those gains.
Now, don’t get me wrong — that 250% readers saw from Company X is nothing to quibble over, particularly in this market.
But making one small change to this investment strategy can help you eke out a few more percentage points and give you the same protection.
I’m talking about using a trailing stop. Trailing stop-losses are slightly different from specific stop-losses. Specific stop-losses set an exit price. So let’s say Company X is trading for $10 a share, and you set a stop-loss at $8 a share. No matter what Company X does, your exit price is $8 — a loss of 20%. If Company X trades as high as $15 a share, you’re not protecting any of your gain by keeping a stop-loss at $8.
Of course, you can move that stop-loss up as you make gains. This is, in essence, what a trailing stop-loss is.
A trailing stop follows the price of the stock higher. So let’s take that same figure and use a 20% trailing stop. At your initial buy price of $10 for Company X, a 20% trailing stop will still give you an exit price of $8.
But if Company X climbs to $15 a share, your 20% trailing stop gives you an exit price of $12… That protects a 20% gain from your initial buy price.
Trailing stops have a lot of power when it comes to protecting your gains — more so than the traditional trailing stop. If you combine that with Michael’s super-smart investment strategy to take gains on only 50% of your position and you’ve got a highly adaptive tool for volatile markets.
Editor’s Note: Last Thursday, Michael wrote his readers and told them to buy shares of a tiny company poised for a big rebound. He said his Triple Cross system flashed a buy signal. By the next day, shares of the stock surged by double-digit proportions. He nailed it.
There is a reason our newest service is quickly becoming one of our most popular. Michael’s advice works. Follow the link to read his latest work.
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