Month: November 2011

Fundamental Forex Market Outlook for the Upcoming Week

The key fundamental economic events that can strongly influence the forex market this week feature the U.S. inflation and Retail Sales data, the BOJ Rate Decision and the UK Employment Report. Those key economic releases and others due out during this week are detailed further below, with the current market consensus expectations or the last result included in parenthesis whenever available.

The coming week’s highlights start on Monday with U.S. Existing Home Sales (4.82M). Tuesday then offers N.Z. Inflation Expectations (last 2.9%), UK Public Sector Net Borrowing (4.3B) and Canadian Core Retail Sales (0.4%), as well as the release of the highlighted U.S. Preliminary GDP (2.5%) and FOMC Meeting Minutes.

Wednesday is a Japanese Bank Holiday, and the market will closely monitor the Chinese HSBC Flash Manufacturing PMI (last 51.0), UK MPC Meeting Minutes (0-0-9), U.S. Core Durable Goods Orders (0.1%) and Weekly Initial Jobless Claims (387K).

Thursday is the U.S. Thanksgiving Day Bank holiday and its key data releases include the German Ifo Business Climate survey (105.5) and UK Revised GDP (0.5%). That will conclude the week’s highlights since Friday has no notable economic data releases or events scheduled.

Technical Forex Market Outlook for the Upcoming Week

EUR/USD:

Weekly Forecast: Higher

Resistance: 1.3557, 1.3614, 1.3795/98, 1.3813/27, 1.3854/58, 1.3868, 1.3973, 1.4246, 1.4258, 1.4279, 1.4327 and 1.4499/1.4503.
Support: 1.3495, 1.3483, 1.3450, 1.3437, 1.3422, 1.3360, 1.3333, 1.3241/44, 1.3145, 1.3055, 1.3000 and 1.2968.

200-day MA: 1.4100 and flat.

14-day RSI: 43.2 and falling.

USD/JPY:

Weekly Forecast: Somewhat lower

Resistance: 77.00, 77.25/89, 78.66, 79.05, 79.40, 79.52, 79.96, 80.00, 80.22, 80.82, 81.34, 81.76, 82.01/22, 82.77, 83.09 and 83.77.

Support: 76.57, 76.41, 76.10, 75.94, 75.70, 75.65, 75.56, 75.00 and 70.00 likely.

200-day MA: 79.57 and falling.

14-day RSI: 44.9 and falling.

GBP/USD:

Weekly Forecast: Higher

Resistance: 1.5868/90, 1.5912/19, 1.5932, 1.5945, 1.5977, 1.6000, 1.6093, 1.6130/65, 1.6206, 1.6259, 1.6332/47, 1.6434/73, 1.6500/98 and 1.6616.

Support: 1.5745, 1.5691, 1.5630/85, 1.5525/31, 1.5483, 1.5422, 1.5373, 1.5339/55, 1.5326, 1.5293, 1.5270, 1.5123 and 1.5000.

200-day MA: 1.6130 and falling slightly.

14-day RSI: 45.8 and falling.

USD/CHF:

Weekly Forecast: Lower

Resistance: 0.9156, 0.9180, 0.9198, 0.9236, 0.9277/0.9339, 0.9368 and 0.9774/83.

Support: 0.9149, 0.9139, 0.9080/85, 0.8979, 0.8951/58, 0.8916/26, 0.8873/83, 0.8804, 0.8797, 0.8788, 0.8760/68, 0.8727, 0.8649, 0.8622, 0.8566 and 0.8536.

200-day MA: 0.8695 and falling.

14-day RSI: 59.3 and rising.

AUD/USD:

Weekly Forecast: Higher

Resistance: 1.0052, 1.0100/16, 1.0184, 1.0201/29, 1.0303/70, 1.0444/98, 1.0608, 1.0654 and 1.0718/84.

Support: 1.0000, 0.9983, 0.9964, 0.9925, 0.9863, 0.9732, 0.9689, 0.9667, 0.9651, 0.9620/27, 0.9536/41 and 0.9500.

200-day MA: 1.0415 and flat.

14-day RSI: 40.2 and falling.

USD/CAD:

Weekly Forecast: Lower

Resistance: 1.0302, 1.0337, 1.0417, 1.0481/90, 1.0500, 1.0506, 1.0646/56, 1.0669, 1.0742, 1.0756, 1.0785, 1.0853, 1.0868, 1.1000 and 1.1101/23.

Support: 1.0262/87, 1.0210/33, 1.0172/99, 1.0132/42, 1.0105, 1.0075, 1.0053, 1.0026/30, 0.9969, 0.9934, 0.9891, 0.9828/77, 0.9763/96, 0.9734/39, 0.9724, 0.9686 and 0.9645.

200-day MA: 0.9827 and rising slightly.

14-day RSI: 56.3.0 and rising slightly.

NZD/USD:

Weekly Forecast: Higher

Resistance: 0.7605/72, 0.7723/41, 0.7795, 0.7804, 0.7855/59, 0.7881/88, 0.7955/96, 0.8066/93, 0.8109/90 and 0.8240.

Support: 0.7549/52, 0.7523, 0.7504, 0.7500, 0.7453/67, 0.7426, 0.7404, 0.7342, 0.7321, 0.7189, 0.7115, 0.7000 and 0.6945/62.

200-day MA: 0.7989 and flat.

14-day RSI: 33.7 and falling.

Are you searching for an uncomplicated technique to make some investment? Then, you must utilize digital options at the earliest. They are actually a new, and according to some people, an exceptional form of investment tool. You must not get apprehensive regarding digital or binary options since they are really one of the easiest means of currency options trading. As binary usually stands for 0 and 1 in the mathematical world, binary options solely offer two different outcomes and allow a novice to settle down quickly in the currency option market.

It is quite clear that not all individuals have the desire and time to count on the long-term gains of a special stock or have the patience to go through the vast particulars in a mutual fund. For them, simple execution and quick results are the prerequisites always. That’s why digital options must be the foremost preference!

When you prefer to make investment in binary options, you need to decide on a number of things. Firstly, choose a type of asset that may be in the form of currency, commodity, stock, or index. The subsequent decision you have to make is if you feel that the underlying asset will go up or come down in the due course of time of the binary option. This time period may range from as short as one hour to as long as one month in general. Once you have selected an asset, for example currency options , you must determine how much you would like to invest. Normally, any amount between $30 and $3000 is satisfactory.

Moving on, you must put your investment at one of the prominent online brokerage firms. The sum you might obtain upon expiration can be calculated even before putting the investment. And, this is the real advantage of binary options.

Let’s take an example in the currency option market into consideration. Just assume that the current exchange rate of EUR/USD is 1.40. A trader who purchases this binary currency pair at a strike exchange rate of 1.45 is speculating that the rate of exchange would be 1.45 or more on the date of expiration. If this takes place, the trader will get a fixed return, regardless of where the exchange rate ends up above 1.45. In case the rate of exchange doesn’t touch 1.45 on the expiration date, the trader gets nothing at all. This is also known as binary call option.

In currency options, there is also binary put option. This simply signifies that the trader receives a fixed amount if the exchange rate lies below the strike at expiration. If the exchange rate surpasses the strike, the trader earns nothing. It is that simple! Hence, digital options are very simple to trade with complete knowledge of what you will gain or lose well in advance. However, you still need to focus on extensive research on the underlying asset.

http://www.binaryoptions.org/binary-options-strategy

When we discuss on FDI, it is very essential that one is able to make a clear demarcation between the FDI flow as well as the FDI stock. The former refers to the amount of the foreign direct investment which has been undertaken across the period (which normally is taken as one year) whereas the stock of FDI implies the total built up value of the foreign assets which are owned for a given period of time.

It has been seen that there has been a significant increase in the investment opportunities in the FDI domain during the years 1990 to 2000s. This increased growth rate is due to the political stability as well as the other economic factors present within the developing countries. Further it has also been seen that with the advent of globalization, the economy of the world has made organizations invest across the globe to have the presence felt in almost all the regions of the world. The increase in the inflows which the county of US has been seeing is another shocking but a significant trend where the inflows have increased but on the other hand its counterpart, the US -FDI -abroad has not gone that high. Once can conclude the growth if the US inflows to be high due to the lucrative US markets and also due to the falling dollar value which has been seen in the recent past.

FDI also have several benefits like rapid approvals for the investments, concessions in taxes, better liberalized environment for operating, subsidies on loans, grants, etc are few of them.

The country (i.e. the host) also gains benefits due to the FDI’s in the increased job opportunities, better living standards, enhanced economic growth, etc. Hence FDI’s are always beneficial for both the host country as well as for the foreign investor.

Governments have also devised many policies for attracting the FDI‘s as these funds can be used for national development projects and strategies. Governments also provide various types of tax benefits to the investors so that higher amounts of investments are made by the foreigners. The basic strategy of the government is to make the FDI investment all the more lucrative for the investors to increase investment opportunities.

The common ones which are implemented by the government is to provide tax benefits as well as reduced interest rates on loans which have till date run successfully.

The developing countries have now become hot attractive spots for the FDI’s due to the better political stability and economic factors. Countries like India have accumulated a lot in the form of FDI from the other foreign countries as the economic and political stability of the country of India gives an ease to the investor to invest without much contemplation. We have seen how the FDI amount varies and increases in the Indian market when the stock market face jolts and jerks.

About the Author

Harjeet is an Indian – born mass-market novelist, who covers the world internet related topics . He writes columns and articles for various websites and internet journals in the domain of Investing in India and Investment options.

By FxProfessional.net

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Calls cost £1.53 per minute plus network extras; minimum charge £1.53

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The key to successful Forex trading profession is a excellent basic education and a sound strategy. So it is good to download the Forex Trading Mini Course which covers all the basics and will give you a great insight into becoming a professional Forex trader.

Article provided by fxprofessional.net

Thursday’s stock market sell-off can be traced directly to a statement released by Fitch Ratings. In this statement, Fitch declared that the U.S. bank exposure to precarious European debt posed a “serious risk”. According to information gleaned from the Bank for International Settlement (BIS), as of the end of 2010, U.S. banks had a combined $41 billion in total expenditure to Greek debt alone. It is thought that much of this is in the form of credit default swaps.

A credit default swap (CDS) is a form of insurance contract that can be bought and sold to offset the risk of a default. The seller of a CDS is obligated to reimburse the buyer if the loan or security named in the CDS contract agreement goes into default. In the event of non-payment of the original loan, it is customary for the seller of the CDS to receive the defaulted loan after reimbursing the buyer of the CDS.

Assuming that Greece is forced into a “partial” default as outlined in the agreement reached late last month, European banks holding Greek debt will be forced to accept a 50 percent haircut. It is likely this will constitute a default and will force U.S. banks that sold CDS contracts to cover the losses.

French Banks on Credit Review

On Wednesday, Moody’s Investors Service turned the market’s attention to France after announcing that it was putting several French banks on review. Credit Agricole SA, Societe General SA, and BNP Paribas were all identified for potential credit rating downgrades due to their high level of exposure to Greek debt.

The Fitch Ratings statement, together with the Moody’s bank review notice, had nervous investors abandoning equities for the safety of the U.S. dollar. By mid-day trading in New York on Friday, the euro had fallen to $1.3520 from $1.3751 at the close of business on Monday.

Scott Boyd is a currency analyst and a regular contributor to the OANDA MarketPulse FX blog.

Economic skies forecast: slowly clearing, heavy rain returning, or cyclone?

By Elliott Wave International

Many people still talk about a “recovery,” or at worst only see a possible double-dip recession. But what if the mistake was to think the economy was only in a recession in the first place? It can’t “double-dip” when it never truly recovered:

“The respite following the 2009 stock market low is not a new expansion. It has failed to improve housing sales, barely caused employment to budge, and hasn’t managed — despite the unprecedented manufacture of new Fed money — to get the total supply of credit back above its 2008 high.”

Elliott Wave Theorist, Sept. 2011

Indeed, the Federal Reserve’s quantitative easing measures have failed.

The Fed’s latest policy plan to stimulate the economy has been dubbed “Operation Twist.”

“On September 30, the Fed started operation twist, by which it will sell its holdings of short-term Treasuries and use the proceeds to buy longer-dated T-bonds. The goal is to foster more credit by lowering long-term borrowing costs. But last month [we] noted that low rates compound the money-making problem for banks by reducing margins. ‘Historical verification of this development is obvious from Japan,’ says a recent report from Hoisington Investment Management. ‘Normal bank lending functions are essentially shut down. This risk now confronts the U.S.’ The problem is not the cost of credit; it’s demand, which is waning. Lower rates will have little effect in helping foster enough expansion to allow the mountain of total credit-market debt built up over the last 70 years to be repaid, or even serviced.”

Elliott Wave Financial Forecast, November 2011

Imagine if the newspapers reported that Bernanke appeared before Congress and said this:

“‘This is the most serious financial crisis we’ve seen, at least since the 1930s, if not ever.'”

Bernanke did not say that, but his counterpart in Britain did. As reported by The Telegraph (Oct. 6), the comment came from Sir Mervyn King, the Governor of the Bank of England.

The Fed is unable to stimulate the economy, the unemployment rate is not improving, and housing is in a “triple-dip” in some areas of the country. What does this mean for the markets and your investments in 2012? Elliott Wave International just released a free report to help you navigate the markets and prepare for what’s ahead. You’ll get hard facts, 25 eye-opening charts and 14 pages of straightforward commentary that will put the volatile market action of the past months into perspective within the “big picture” to help you position for the years to come. Download your free report now.

By MoneyMorning.com.au

A 349-Year-Old French Gambling System That Can Help You Live Debt Free…?

If you’ve followed Money Morning over the last few weeks, you’ll know Kris has warned you about the government helping itself to your retirement savings. Taking your money directly to invest in pet projects…

Or coercing funds to invest a certain percentage of your retirement savings in these projects by law…

Maybe you thought he was nuts. Maybe you thought he was bang on the money. Maybe you thought he was joking.

But no matter what you think, what if he’s right?

What if the government really is going to rip your retirement savings away from you? What will you do?

Blaise Pascal – the 17th century French mathematician, philosopher and physicist – once said, ‘Only a fool would bet against God’. And we’d argue, only a fool would bet against the government interfering with your life – and your money – too.

Here’s the system Pascal came up with to make sure he’d ‘win’… and it’s one you can follow to a debt-free retirement too.

Pascal reasoned: Maybe God exists. Maybe He doesn’t. If I don’t spend an hour a week at church, I might get stuck in Hell for eternity. But if I just sacrifice one hour to go to church a week, I could get into Heaven. And I also get to sing songs. And socialise. And hear the weekly gossip. I have everything to gain and nothing to lose!

Now there are plenty of arguments against this philosophy. We won’t go into them here…

What we want you to focus on is the win-win logic behind the argument. And how you can use it live debt free in retirement…

Wouldn’t it make sense for you to make your own ‘Pascal’s Wager’ for retirement now… That is, put yourself in a spot where you have everything to gain in retirement and nothing to lose?

Take a look at our own betting matrix…

Click here to enlarge

As you can see, if you believe Kris when he says your retirement savings are under threat… and prepare… it’s heads you win, tails you win even more!

All you have to do is prepare for your retirement as if you believe your retirement savings are under threat. That way, whether they are or not, you’ll come out a winner.

Now there are a number of strategies you could use. Unless you’re prepared to put dollars on the line… to take some risks… you’ve got virtually no chance of maintaining or improving your standard of living.

Remember, Pascal had to put in the time at church if he wanted to get to Heaven.

Here’s one method Kris believes you could for your own Pascal’s Wager…

Use the magic of compounding… Buy no more than a handful of reliable blue-chip stocks that pay a regular dividend.

These should be stocks you’re prepared to hold through thick and thin… and they should be good enough that you could think about taking part in the dividend reinvestment plans (DRPs) to compound your returns.

A DRP gives you the choice to get extra shares instead of a cash dividend.

But it’s better than it sounds!

Because when the next dividend is due, you’ll earn a dividend from your original shares AND you’ll get a dividend from your new shares too.

Every dividend payment date, you get more shares in the company… without having to pay commission to a broker.

It means that five years from now, your shareholding could increase by 50%… and 10 years from now, your shareholding could have more than doubled.

Here’s how it works:

Imagine that in 2011 you buy 1,000 shares in XYZ SHARES at $1.74 each = $1,740

By 2016, thanks to reinvested dividends, you now own 1,507 shares. If we assume the share price has risen to $2.04, your shares are worth $3,074. If you hadn’t reinvested the dividends your shares would only be worth $2,040.

Roll forward another five years, and by 2021 you could own 2,329 shares. And assuming the share price has climbed to $2.34, your investment would be worth $5,448 (2,329 x $2.34).

In other words, your initial one thousand shares have compounded to be worth more than three times your initial stake.

That’s the power and magic of compounding returns.

And that’s just with 1,000 shares.

If you can afford 5,000 shares today, for a total investment of $8,700, you’re looking at turning it into $27,244 in 10 years. By which time, if you’re ready to retire, you can start collecting cheques of over $2,500.

Getting access to the DRP is easy. You simply buy shares in a company that offers this plan and then fill in the form.

Aaron Tyrrell
Editor, Money Morning

P.S. This is just ONE of the investment ideas Kris Sayce has shared with readers of Australian Small-Cap Investigator this year. Feel free to use it to help you make money for the future from this market.
To find out more about Kris’s latest money-making ideas – and how they can help you place your own Pascal’s Wager for retirement – please click here…

Aaron Tyrrell
Editor, Money Morning

Saving Yourself for a Debt Free Retirement

The past week in monetary policy saw just 6 central banks announcing interest rate decisions. Of those to change interest rates, Rwanda increased 50bps to 7.00%, while Belarus added 500bps to 40.00% as the country deals with hyperinflation.  Those that held rates unchanged were: Japan 0-0.10%, Chile 5.25%, Sri Lanka 7.00%, and Latvia 3.50%.  Elsewhere Argentina dropped dollar reserve requirements, and the World Gold Council announced record buying of gold by central banks.

Following are some of the key quotes from the central banks which made monetary policy announcements:

• Belarus (increased 500bps to 40.00%) “Another increase in the refinancing rate and interest rates on liquidity management operation is a sequential step to curb inflation and stabilize the economy and financial sector in general. Dunn’s measure will also support renewed growth in recent months Urgent rubles deposits in banks and stabilize inflation expectations in the economy, and will become more factor to enhance the balance of payments surplus. National Bank and continues to conduct a balanced monetary policy, with the individual attention necessary to ensure price stability in the economy.”
• National Bank of Rwanda (increased 50bps to 7.00%): “Rwanda’s macroeconomic stability. The financial sector is sound and resilient to external shocks, the inflation remains moderate, the currency is stable and this has contributed to high economic growth expected to reach 8.8% by the end of the year. However, there still exist risks in the global economy that may affect Rwanda. This includes: the persistent debt crisis in the euro zone, the global high food and fuel prices and increasing regional inflationary pressures. This calls for preventive action to mitigate any negative impact on the Rwandan economy.”
• Bank of Japan (held rate at 0-0.10%): “Japan’s economic activity has continued picking up, but at a more moderate pace mainly due to effects of a slowdown in overseas economies.  As for domestic demand, business fixed investment has been increasing moderately and private consumption has remained firm.  On the other hand, exports and production have continued to increase, due in part to the restocking of inventories abroad that had declined after the earthquake, but at a more moderate pace mainly reflecting the effects of the slowdown in overseas economies.”
• Sri Lanka (held rate at 7.00%): “The outlook for Sri Lanka’s economy remains positive with the economy continuing along the high growth trajectory”, and “even though inflation and the inflation outlook remain benign, the Monetary Board is of the view that a change to the existing monetary policy stance is not warranted.
• Banco Central de Chile (held rate 5.25%): “Domestically, output figures are evolving close to projections in the last Monetary Policy Report’s baseline scenario, while domestic demand is somewhat stronger. Labor market conditions remain tight. Headline inflation has been somewhat higher than expected because of the incidence of fuels and foodstuffs. Core inflation figures remain contained. Inflation expectations are close to the target.
• Latvijas Banka (held rate at 3.50%): “As the global prices of energy resources and food are stabilizing and assuming that the Government will refrain from raising any taxes, a substantial drop in inflation can be predicted for next year. Domestic demand is growing slowly and represents no risk of rising prices; moreover it is becoming likely that economic growth in Latvia will be slower next year as the demand in external markets drops because of the global debt crisis.”

Looking at the central bank calendar, there’s just Turkey scheduled to meet next week to review monetary policy settings.  However there are meeting minutes due from the Federal Open Market Committee (FOMC) on Tuesday (1-2 Nov meeting), Bank of Japan on Monday (Oct 27th meeting), and the Bank of England on Wednesday (10th Nov meeting); so it will be a good chance to see some of the key issues the central bankers are thinking and debating about.

The National Bank of Rwanda increased its key repo rate 50bps to 7.00% from 6.50% previously, with the interbank interest rate corridor changing to 4.50-8.50% and the discount rate now 10.50%.  Bank Governor, Claver Gatete, said: “Rwanda’s macroeconomic stability. The financial sector is sound and resilient to external shocks, the inflation remains moderate, the currency is stable and this has contributed to high economic growth expected to reach 8.8% by the end of the year. However, there still exist risks in the global economy that may affect Rwanda. This includes: the persistent debt crisis in the euro zone, the global high food and fuel prices and increasing regional inflationary pressures. This calls for preventive action to mitigate any negative impact on the Rwandan economy.”

At its October meeting, the Bank also increased the repo rate by 50 basis points to 6.50% from 6.00%, meanwhile the bank last reduced the interest rate 100bps to 6.00% in November last year.  Rwanda has seen inflation pick up to 7.5% in August, compared to 5.82% in June, and just 1.09% in January this year.  According to IMF data Rwanda saw annual GDP growth of 5.39% during 2010, meanwhile the IMF recently scaled down its growth estimate for Rwanda to 7% for 2011, from a previous forecast of 7.5%.  

Latvijas Banka held its main monetary policy interest rate, the refinancing rate, unchanged at 3.50%, and held its other interest rates unchanged.  The Bank said: “As the global prices of energy resources and food are stabilizing and assuming that the Government will refrain from raising any taxes, a substantial drop in inflation can be predicted for next year. Domestic demand is growing slowly and represents no risk of rising prices; moreover it is becoming likely that economic growth in Latvia will be slower next year as the demand in external markets drops because of the global debt crisis.”


Previously the Bank also kept monetary policy settings unchanged, leaving the refinancing rate at 3.50% at its September meeting.  The Bank of Latvia last reduced the refinancing rate by 50bps to 3.50% in March 2010.  Latvia reported annual inflation of 4.4% in October, down from 4.6% in September, and 4.7% in August.  The Latvian economy expanded 5.6% on an annual basis in Q2, while GDP growth was reported as 3.5% in the previous quarter.  The Latvian currency, the lat (LVL), last traded around 0.519 against the US dollar.