Very difficult to tell where we go from here with the major caught in the middle of a multi-day range. Ultimately however, the overall structure remains grossly bearish with any medium-term rallies back towards the 1.4000 area to be used as compelling opportunities to build on existing short positions. The market has been chopping around over the past few weeks and we expect the chop to continue with key shorter-term levels to watch above and below coming in by 1.3740 and 1.2885 respectively.
Relative US Federal Reserve and European Central Bank interest rate expectations have had little impact on Euro/US dollar price action. Instead, markets remain focused on whether the ECB will follow in the Fed’s footsteps and enact Quantitative Easing measures in their respective economy. Soft growth numbers and almost-negligible inflation readings arguably give European officials leeway in taking aggressive measures to boost money supply. Yet recent ECB Governing Council rhetoric has been far from uniform. Some members suggest that interest rates may well go below 1.00 percent and special measures are imminent, but others see far less urgency in taking drastic action.The end result is that European monetary policy outlook remains especially uncertain, and such uncertainty has helped keep the Euro in a wide trading range against the US Dollar. Overnight Index Swaps suggest that the Euro will most likely maintain its interest rate advantage over the US dollar, but headline yields hardly paint the entire picture. It is easy to claim that the US Federal Reserve will be extremely slow in decreasing its aggressive monetary policy stimuli; the key question is whether the ECB can or will follow. Euro/US Dollar outlook could easily shift on clarification in ECB monetary policy outlook.
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Tuesday, May 12, 2009
Dollar Might Tumble on Upside Surprise in Non-Farm Payroll
Moderating pace of recession has been the talk in the financial markets recently and all investors are looking forward to Friday's Non-Farm Payroll report for affirming this view. Economists expect the US job market to contract by another -620k in the month of Apr with unemployment rate jumping from 8.5% to 8.9%. However, recent economic data mostly point to a better reading. We'll discuss these 'leading' indicators and the possible impact of NFP to dollar below.
One of the most highly correlated indicators to NFP is indeed the employment components of the ISM indices. The employment component of ISM manufacturing index bottomed in Feb and had a very strong rise to 34.4 in Apr. On the other hand, the employment component of ISM non-manufacturing index bottomed at 31.1 last Nov. While there was some set back in March, the component did improve from 32.3 to 37 in Apr. While both were still in contraction region, the rise in Apr suggested that pace of contraction is slowing. Also, we may have seen the worst in job market contraction already and there should be some significant improvement, as implied by the indices in the near future, if not in Apr.
Conference Board Consumer Confidence is another indicator that's closely correlated with NFP as seen in the following chart. Consumer confidence bottomed at 25.3 in Feb and rose remarkably from 26.9 to 39.2 in Apr. The data also suggests that some strong improvement should be seen in NFP in Apr.
In addition, ADP report showed much less than expected contraction in the private sector by -491k only, best number since last October. Challenger layoffs rose by only 47%, least since last September. 4 Week average of initial jobless claims also fell by more than 14k.
Having said that, it's very likely that NFP will surprise on the upside this time with some chance to have the contraction improved to -400k to -500k level.
The dollar continues to be inversely correlated to stocks recently. Since April, Dow Jones Industrial Average has risen around 8.35%. On the other hand, dollar has depreciated over 9% against Australian dollar, over 7% against Canadian dollar and over 5% against Sterling. The greenback only managed to stay in tight range against Euro and Yen, which were both pressured by return of risk appetite.
Strong upside surprises in NFP will likely trigger extension in recent rally in stocks which in turn will trigger some sell off in the greenback. Among the major currencies, AUD and CAD will likely remain the ones to bet against dollar. Euro and Yen will be the ones to avoid in case of dollar weakness.
One of the most highly correlated indicators to NFP is indeed the employment components of the ISM indices. The employment component of ISM manufacturing index bottomed in Feb and had a very strong rise to 34.4 in Apr. On the other hand, the employment component of ISM non-manufacturing index bottomed at 31.1 last Nov. While there was some set back in March, the component did improve from 32.3 to 37 in Apr. While both were still in contraction region, the rise in Apr suggested that pace of contraction is slowing. Also, we may have seen the worst in job market contraction already and there should be some significant improvement, as implied by the indices in the near future, if not in Apr.
Conference Board Consumer Confidence is another indicator that's closely correlated with NFP as seen in the following chart. Consumer confidence bottomed at 25.3 in Feb and rose remarkably from 26.9 to 39.2 in Apr. The data also suggests that some strong improvement should be seen in NFP in Apr.
In addition, ADP report showed much less than expected contraction in the private sector by -491k only, best number since last October. Challenger layoffs rose by only 47%, least since last September. 4 Week average of initial jobless claims also fell by more than 14k.
Having said that, it's very likely that NFP will surprise on the upside this time with some chance to have the contraction improved to -400k to -500k level.
The dollar continues to be inversely correlated to stocks recently. Since April, Dow Jones Industrial Average has risen around 8.35%. On the other hand, dollar has depreciated over 9% against Australian dollar, over 7% against Canadian dollar and over 5% against Sterling. The greenback only managed to stay in tight range against Euro and Yen, which were both pressured by return of risk appetite.
Strong upside surprises in NFP will likely trigger extension in recent rally in stocks which in turn will trigger some sell off in the greenback. Among the major currencies, AUD and CAD will likely remain the ones to bet against dollar. Euro and Yen will be the ones to avoid in case of dollar weakness.
Forex Report to Build Your Wealth
Whether you are new to the stock market and looking for a market education, or you're a more experienced stock market trader looking for additional stock market trading tips, the CFD FX Report can suit your unique trading needs. The CFD Report and FX Report have been designed to suit people trading in the stock market, CFD market and Forex market with one goal in mind: to make money regardless of market conditions.
The CFD Report and FX REPORT are produced daily by our team of experienced stock market and Forex traders. They provide market summaries of what has happened on the Singapore Stock Exchange (SGX) and world stock markets, including the Dow Jones, NASDAQ, Hang Seng and FTSE 100, among others. The CFD Report and FX Report cover the major movers and shakers on the Singapore Stock Exchange (SGX), analyzing their recent price movements and discussing what is likely to happen during the following market day and how you can profit.
It doesn't matter whether the stock markets are rising or falling, or a particular currency pair is up or down - we use trading strategies and find trading setups to suit all market conditions, including swing trading, momentum trading and pattern breakouts. Our experienced stock market and currency traders use in-depth technical analysis combined with fundamental analysis to generate trading tips for the following day. We suggest what market to buy or short and at what price, where to set your stop-loss level and where to exit the trade. This level of detail assists our clients in reaching their goal of becoming more profitable traders.
We also provide a real-time SMS and email alert system, notifying you of our trade setups with an entry price and an exit price so you can act quickly to seize market profits. So if one of our particular trading tips hits the stock price we suggested in the report we will send a message to you immediately via email and SMS directly to your mobile phone.
At CFD FX REPORT we believe in stock market education. Knowledge is paramount. The well-informed trader is more likely to be a successful trader. Everyday the CFD Report and FX Report we provide education lessons covering the basics of the stock market, technical analysis, fundamentals, money management, trading strategies, technical indicators, contracts for difference and much more.
Finding the right online equities broker, CFD provider, or Forex broker can be as important as selecting a winning trade. So at CFD FX REPORT we have recently researched online brokers for the Singapore Stock Exchange (SGX) and currency markets, investigating the quality of their customer service, online broker facilities and ease of use, what they offer for listed stocks on the Singapore Stock Exchange and how user-friendly and transparent these providers are. To find out more about what we discovered go to our section Finding a Broker.
Upcoming events affecting the Singapore Stock Exchange and world markets are found in our daily events calendar. We keep you ahead of the game, letting you know when stocks from the Singapore Stock Exchange are announcing dividends or earnings, and when the major world markets are anticipating important meetings, such as central bank policy meetings, that affect our economies and markets.
With all of this combined knowledge and experience you can see why the CFD FX REPORT is the stock market and forex market trading tool that traders need.
The CFD Report and FX REPORT are produced daily by our team of experienced stock market and Forex traders. They provide market summaries of what has happened on the Singapore Stock Exchange (SGX) and world stock markets, including the Dow Jones, NASDAQ, Hang Seng and FTSE 100, among others. The CFD Report and FX Report cover the major movers and shakers on the Singapore Stock Exchange (SGX), analyzing their recent price movements and discussing what is likely to happen during the following market day and how you can profit.
It doesn't matter whether the stock markets are rising or falling, or a particular currency pair is up or down - we use trading strategies and find trading setups to suit all market conditions, including swing trading, momentum trading and pattern breakouts. Our experienced stock market and currency traders use in-depth technical analysis combined with fundamental analysis to generate trading tips for the following day. We suggest what market to buy or short and at what price, where to set your stop-loss level and where to exit the trade. This level of detail assists our clients in reaching their goal of becoming more profitable traders.
We also provide a real-time SMS and email alert system, notifying you of our trade setups with an entry price and an exit price so you can act quickly to seize market profits. So if one of our particular trading tips hits the stock price we suggested in the report we will send a message to you immediately via email and SMS directly to your mobile phone.
At CFD FX REPORT we believe in stock market education. Knowledge is paramount. The well-informed trader is more likely to be a successful trader. Everyday the CFD Report and FX Report we provide education lessons covering the basics of the stock market, technical analysis, fundamentals, money management, trading strategies, technical indicators, contracts for difference and much more.
Finding the right online equities broker, CFD provider, or Forex broker can be as important as selecting a winning trade. So at CFD FX REPORT we have recently researched online brokers for the Singapore Stock Exchange (SGX) and currency markets, investigating the quality of their customer service, online broker facilities and ease of use, what they offer for listed stocks on the Singapore Stock Exchange and how user-friendly and transparent these providers are. To find out more about what we discovered go to our section Finding a Broker.
Upcoming events affecting the Singapore Stock Exchange and world markets are found in our daily events calendar. We keep you ahead of the game, letting you know when stocks from the Singapore Stock Exchange are announcing dividends or earnings, and when the major world markets are anticipating important meetings, such as central bank policy meetings, that affect our economies and markets.
With all of this combined knowledge and experience you can see why the CFD FX REPORT is the stock market and forex market trading tool that traders need.
USD/JPY Mid-Day Outlook
Daily Pivots: (S1) 96.88; (P) 97.85; (R1) 98.45; More.
USD/JPY's fall continues after brief recovery and dives to as low as 96.71 so far in early US session. At this point, intraday bias remains on the downside for 95.61 support next. As mentioned before, USD/JPY could be forming a head and shoulder top pattern (ls: 99.67, h: 101.43, rs: 99.71?). Break of 95.61 will now be an important signal that whole rise from 87.12 has completed and will turn short term outlook bearish. On the upside, above 97.82 minor resistance will turn intraday outlook neutral first.
In the bigger picture, the down trend from 124.13 (07 high) is still intact. This is supported by the fact that USD/JPY is still struggling to take out 55 weeks EMA (now at 99.93) decisively. Bearish divergence condition in daily MACD and RSI are also indicating loss of upside momentum and suggest possibility of reversal. Hence, while further rise to above 101.43 cannot be ruled out, we'd expect strong resistance as USD/JPY approaches medium term trend line resistance at 101.98 and bring reversal. Break of 95.61 support will be an important indication that whole rebound from 87.12 has completed and should bring resumption of the down trend from 124.13 eventually.
USD/JPY's fall continues after brief recovery and dives to as low as 96.71 so far in early US session. At this point, intraday bias remains on the downside for 95.61 support next. As mentioned before, USD/JPY could be forming a head and shoulder top pattern (ls: 99.67, h: 101.43, rs: 99.71?). Break of 95.61 will now be an important signal that whole rise from 87.12 has completed and will turn short term outlook bearish. On the upside, above 97.82 minor resistance will turn intraday outlook neutral first.
In the bigger picture, the down trend from 124.13 (07 high) is still intact. This is supported by the fact that USD/JPY is still struggling to take out 55 weeks EMA (now at 99.93) decisively. Bearish divergence condition in daily MACD and RSI are also indicating loss of upside momentum and suggest possibility of reversal. Hence, while further rise to above 101.43 cannot be ruled out, we'd expect strong resistance as USD/JPY approaches medium term trend line resistance at 101.98 and bring reversal. Break of 95.61 support will be an important indication that whole rebound from 87.12 has completed and should bring resumption of the down trend from 124.13 eventually.
Mid-Day Report: Dollar Down Trend Resumes on Rising Commodity Prices
Dollar resumes recent broad based decline today as US stocks are set for modestly higher open. Further pressure is seen on the greenback as commodities extend recent rally, with Crude Oil breaching $60 level. Among the majors, Sterling is so far the bigger winner today on better than expected manufacturing production data. Meanwhile, Canadian dollar is catching up after release of wider than expected trade surplus. The Japanese yen, on the other hand, is rather steady in range except versus dollar.
Technically, dollar index takes out yesterday's low after brief recovery and is now getting rid of mentioned 82.19/62 cluster support zone. Intraday bias remains on the downside as long as 82.87 minor resistance holds. As mentioned before, based on anticipate of further rise in stocks and commodities, we are expecting further broad based weakness in the dollar with dollar index extending recent fall to 100% projection of 89.62 to 82.63 from 86.87 at 79.88. However, we ain't too bearish on the greenback in the longer term, based on the view that recent rallies in stocks and commodities are merely correction in the longer term down trend. Strong support is expected as the dollar index dips below 80 psychological level and should keeps it above 77.69 long term support.
Data released in US session saw US trade deficit widened less than expected to -27.6B in March. Canadian trade surplus widened more than expected to 1.1B CAD in March.
Better-than-expected output data were released in the UK. Manufacturing production dropped -0.1% mom, the smallest declines in 13 months, in March following a -0.3% (revised upward) fall a month ago. On annual basis, the reading contracted -12.9%, also better than consensus of -14% and -13.4% drop in February. The data showed that BOE's reduction in interest rates and asset purchase program may have provided positive impacts to the economy. Industrial production declined -0.6% mom in March, less than market expectation of -0.8% and an upwardly revised -0.7% a month ago. On yearly basis, the reading was down -12.4%, compared with consensus of -12.8% as well as an upgraded -12.3% in the previous month.
UK Trade deficit narrowed to 6.59B pound in March, compared with consensus of -7.25B pounds and 6.83B pound a month ago. The BRC retail sales posted the biggest rise since April 2006. Total retail sales soared +6.3% yoy in April after a +0.6% gain a month ago as driven by increase in sales in non-food items. DCLG house plummeted -13.6% in March after declining -12.3% a month ago. RICS house price balance plunged -59.9% in April (consensus: -70%), the highest since January 2008, after plunging -72.1% in March.
Germany finalized CPI for Apr is confirmed to be 0.0% mom and 0.7% yoy.
Australia's budget deficit will rise to AUD 57.6B, 4.9% of GDP in the 12 months through June 2010 as the government increases spending. Concerning economic outlook, the Government forecasts economy will contract -0.5% during fiscal year 2010 and grow 2.25% in fiscal 2011.
Technically, dollar index takes out yesterday's low after brief recovery and is now getting rid of mentioned 82.19/62 cluster support zone. Intraday bias remains on the downside as long as 82.87 minor resistance holds. As mentioned before, based on anticipate of further rise in stocks and commodities, we are expecting further broad based weakness in the dollar with dollar index extending recent fall to 100% projection of 89.62 to 82.63 from 86.87 at 79.88. However, we ain't too bearish on the greenback in the longer term, based on the view that recent rallies in stocks and commodities are merely correction in the longer term down trend. Strong support is expected as the dollar index dips below 80 psychological level and should keeps it above 77.69 long term support.
Data released in US session saw US trade deficit widened less than expected to -27.6B in March. Canadian trade surplus widened more than expected to 1.1B CAD in March.
Better-than-expected output data were released in the UK. Manufacturing production dropped -0.1% mom, the smallest declines in 13 months, in March following a -0.3% (revised upward) fall a month ago. On annual basis, the reading contracted -12.9%, also better than consensus of -14% and -13.4% drop in February. The data showed that BOE's reduction in interest rates and asset purchase program may have provided positive impacts to the economy. Industrial production declined -0.6% mom in March, less than market expectation of -0.8% and an upwardly revised -0.7% a month ago. On yearly basis, the reading was down -12.4%, compared with consensus of -12.8% as well as an upgraded -12.3% in the previous month.
UK Trade deficit narrowed to 6.59B pound in March, compared with consensus of -7.25B pounds and 6.83B pound a month ago. The BRC retail sales posted the biggest rise since April 2006. Total retail sales soared +6.3% yoy in April after a +0.6% gain a month ago as driven by increase in sales in non-food items. DCLG house plummeted -13.6% in March after declining -12.3% a month ago. RICS house price balance plunged -59.9% in April (consensus: -70%), the highest since January 2008, after plunging -72.1% in March.
Germany finalized CPI for Apr is confirmed to be 0.0% mom and 0.7% yoy.
Australia's budget deficit will rise to AUD 57.6B, 4.9% of GDP in the 12 months through June 2010 as the government increases spending. Concerning economic outlook, the Government forecasts economy will contract -0.5% during fiscal year 2010 and grow 2.25% in fiscal 2011.
Monday, May 4, 2009
News and Reports Move The Market.
Bernard, a professional News Trader, aims to take advantage of the negative correlation between the different currency pairs in the short term on several reporting days days during the month when specific financial reports come out.
Professional traders aren't looking for action.
Bernard. uses highly probable events that happen consistently on several different occasions each month and make money no matter what direction the price moves. As close to a guarantee as you can get in the financial markets and it completely eliminates the greed and human emotion of trading
FAQ
1) What kind of services FXOpen provides?
FXOpen is a brokerage company in FOREX field. We propose different kind of courses starting from beginners up to advanced courses for people with FOREX experience and traders. Also we prepare FOREX teachers.
FXOpen is a brokerage company in FOREX field. We propose different kind of courses starting from beginners up to advanced courses for people with FOREX experience and traders. Also we prepare FOREX teachers.
Participants
Commercial Banks
Central Banks
Currency Exchanges
Investment Funds
Brokerage HousesParticipants of this market are, first of all, large commercial banks through which the basic operations under the instruction of exporters and importers, investment institutes are carried out, insurance and pension funds, hedge and individual investors. Also these banks operations and in the interests due to own means, thus at large banks volumes of daily operations reach billions dollars, and at some banks even the basic part of the profit is formed only due to speculative operations with currency.
Central Banks
Currency Exchanges
Investment Funds
Brokerage HousesParticipants of this market are, first of all, large commercial banks through which the basic operations under the instruction of exporters and importers, investment institutes are carried out, insurance and pension funds, hedge and individual investors. Also these banks operations and in the interests due to own means, thus at large banks volumes of daily operations reach billions dollars, and at some banks even the basic part of the profit is formed only due to speculative operations with currency.
What Moves Forex
Foreign Exchange is affected by various economic and political factors. The largest fluctuations in currency prices usually occur during Central Bank intervention, when governments trade in huge amounts forex in an attempt to either raise or lower the value of their own currency. This, aswell as many other factors such as interest rate changes, economic figures, political instability and large lot transactions by hedge funds can move the market.
Liquidity:
the market operates the enormous money supply and gives absolute freedom in opening or closing a position in the current market quotation. High liquidity is a powerful magnet for any investor, because it gives him or her the freedom to open or to close a position of any size whatever.
FOREX is a highly profitable business which does not depend on time, place or political situation in your country. Advantage of this business is that you make deals using computer from any part of the world 24 hours per day 5 days per week.
FOREX is a highly profitable business which does not depend on time, place or political situation in your country. Advantage of this business is that you make deals using computer from any part of the world 24 hours per day 5 days per week.
What Is Forex
Forex is an inter-bank market that took shape in 1971 when global trade shifted from fixed exchange rates to floating ones. This is a set of transactions among forex market agents involving exchange of specified sums of money in a currency unit of any given nation for currency of another nation at an agreed rate as of any specified date. During exchange, the exchange rate of one currency to another currency is determined simply: by supply and demand – exchange to which both parties agree.
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