i- Forex Exchange

Why Is The Macedonian Stock Exchange ineffective?

2011-10-30T23:59:00.001-07:00

The Macedonian Stock Exchange (MSE) is not in service productively. True, some of the parameter which we use to calculate the success of a stock exchange have lately better in the MSE. For example, the monthly money volume has increased jointly with the number of dealings. But this is a far cry from achievement.

Who is to responsibility? Is the current organization of the MSE useless?

I do not think so. in fact, I think the MSE has an excellent management team, doing their best to slot in new trading technique and to list new firms.

A stock exchange is a very significant financial market. It is a highly well-organized and visible tool of financing. In the West, it is used to finance most of the needs of corporation, way above financing obtainable from banks. persons and firms save some of their income and invest it. The stock exchange is meeting basis for savers wishing to invest their investments - and firms looking for investments.

Another function of stock exchanges is to assist government in finance their internal borrowing supplies. Governments sell obligation (called bonds) to investors through the stock exchanges in their country. A stock exchange is, therefore, an crucial tool for re-financing nationwide debt.

But a few circumstances must prevail before a stock exchange functions correctly.

The most significant condition is the existence of a fit, growing economy in the stock connections country. Investors flock to healthy economies and shy away from unhealthy ones.

On the face of it, the Macedonian economy belongs to the latter category. High being without a job, low savings, retarded growth, a gaping trade and payments deficit. But this is an visual illusion. The economy is in much better conditions that most Macedonians would care to admit. The unemployment figures are skewed. They reflect efforts to evade paying social taxes - not real unemployment. The economy is growing, even by official estimates. The black economy is rising even faster. The deficits are covered by enormous capital infusions from donor countries. Macedonia is receiving more international credits per capita than Russia. It is always suitable to blame the deterioration economic climate - but the cold, objective figures do not bear this out.

When an economy is growing - the profits of company (counting those listed in the MSE) will grow with it. This makes the shares of these company an interesting pay money for.

Since no one is trade - we must look for the problem somewhere else.

A prospering stock exchange is linked to the survival of the right micro and macro economic management. Macedonia has more than its share of troubles in this respect.

The process of alteration of businesses with social assets had four basic flaws:

first, it introduce no new organization, ideas or capital to the stressed firms which were "distorted". The market simply does not believe that they were transformed. The same people run the same shows under a different hat.

Second, such alteration violates the concept of Hierarchy, a chain of command.

It blurs the difference between labour (workers) and capital (owners). What is mistaken with that is that a ship must have a captain - and only one. somebody must have the authority and the responsibility. Collective management is no management at all.

Moreover, innovation change and renewal are all prevented. What change could come from the same set of worn out managers? How can thousands of owners decide to worsen the conditions of the workforce - if owners and laborers are one and the same? So, organization is polluted by irrelevant, non-economic considerations: power struggles amongst groups of workers, social consideration and following ones.

Spend productively into the Foreign Exchange Market

2011-10-29T09:24:00.001-07:00

A characteristic investment strategy includes three key details. The first one is the necessity of diversify your trading accounts. Secondly you need to employ so call non-correlated indicator if you want to support your market timing. influence is the third shade. It goes without saying that you need to use it in the proper way. In fact Forex is theoretical to be a perfect option to diversify investment accounts. I'd like to stress that this financial market is the main one and as follows from this it makes no sense to compare it with the stock market in terms of size and trade volume. The foreign exchange market is composed of many banks involved in trading currencies. I should say that needs and quantity of each currency in trade for another one is that thing that determines the exact value of every nation's money. A nation's debt and nation interest rates have a great impact on the value of any currency. Of course a nation's employment should be mention too.
I'd like to stress that leverage is an very well-organized tool. But at the same time it's a very unsafe tool and you should use it with a great care. influence gives you an excellent opportunity to have a loan of money to invest profitably. borrow a lot may result in behind much so you should forever keep it in mind.
The foreign market exchange is used to touching gradually. Currencies are usually calculated in pips. You need a sufficient amount of funds on your trading deposit if you intend to use high leverage. as well this you need to place stop loss orders. This way you can preserve your trade capital.
Of course it's highly optional to learn the basics of Forex investing. You need to study how to make use of various technological indicator. Only with this information you can do well in invest your assets.
be supposed to you consider dealing with Forex manage account, it is wise to find out some details on this marketplace. If you are correctly armed with the information in your sphere you can keep away from many risks related to this business. So studying Forex manage accounts and only then apply it in Forex trading would be an intelligent step.
Forex Money Manager traders use the expert tools of fundamental and technological analysis to adequately respond to changes on the Forex market and show reliable trading results.
People are looking for a option to diversify savings, and Forex market is very attractive for place for investors from all over the world.

Where to Exchange Money

2011-10-29T07:28:00.000-07:00

How to exchange money is a (valid) anxiety for traveler arriving in a foreign country. Do you need to do it in move on? How much be supposed to you take out? What choice offer the best rates? Here are some ordinary places to deal with your dough:
Your Local Bank/Online: Very large banks in very large cities will from time to time carry currency of other countries (usually limited to pound, yen, dollars and euro). You can exchange in advance – contact large banks to see their policy and cost. Your local area office will mostly likely not carry any other currency. You can also order currencies online by doing a search. This often carries a high fee and it geared toward businessmen.
Airport exchange: Airport exchanges offer famously horrible conversion rates. People wanting to get rid of any extra change ‘sell’ it for a loss and anyone wanting local currency the minute they step off the plane ‘buys’ it at a higher rate. Most airports have ATMs – wherever possible, skip the exchange and withdrawal right when you arrive.
ATM: ATMs give the best conversion rates. The exchange rates changes daily, based on the markets. The drawback is that banks often charge high amounts for withdrawals from non-participatory ATMs, and the issuing bank may charge a fee as well. In order to combat these, it’s best to look for a banking scheme that offers low rates, and take out larger amounts of money wherever possible (around $200). You don’t want to be transportation so much cash that it would be heartbreaking to loose it, but you don’t want to be nailed with a $5 fee every time you punch in your pin number. Note that ATMs can be hard to find outside of major cities in rising countries.
Hotels/Hostels: A large hostel in London or hostel in Sydney are both likely to offer conversion services for their customers. However, these rates are normally only slightly better than an airport exchange, and limited to the major currencies (pound, yen, U.S. dollar and euro).
Street: A unsafe way to exchange money. You must be carrying strong ‘major’ currencies in cash in order to deal on the black market. This type of exchange is illegal but commonly practiced in a number of developing countries, particularly those ruled by scheming governments. Ask around to find out if it’s common in the country you’re traveling and keep your wits about you. Count and double count your money, and make sure they are clean bills without tears or marks, as this will from time to time mean it is no longer valid.
Destination Banks and Conversion Centers: bank in large cities will convert your bills or travelers cheques – at a cost. Conversion centers are usually found in areas where there are a lot of traveler, or a busy downtown.

A rapid Look at Currency Exchange fundamentals

2011-10-29T00:50:00.001-07:00

Invest in an exchange currency market is a hot new trend that has become very popular in the last two years. Many people are puzzled about what is actually being traded in the currency exchange markets.

The truth is not anything is bodily being exchanged. Currency exchange market are a place for speculators to approach and have fun. It can be very popular but just as risky. All trades made in a currency exchange market happen from side to side a computer scheme. No actual currency is ever exchanged which means you do not have to change Yen with Australian dollars.

How it Works. Currency exchange traders change one form of money to another for a profit. The faster you can trade flanked by currencies the more profit you will be able to make. Trading occurs daily and profits can be made rapidly. Most of the current currency exchange market is under enemy control by large financial corporation, hedge fund manager, and tentative persons who feel they understand the nature of the global financial system.

Currencies are traded in pairs where the original currency is careful short and the exchanged currency is careful long. For example, a trader might trade Euros for Dollars. Euros are consider small and dollars are consider long. For instance, if you went into a shoe store and purchase a duo of shoes for a $100 dollars.

The store would be long $100 dollars but short one pair of shoes. This hypothesis is the same theory which applied in currency exchange markets. Remember in this type of marketplace only numbers of being exchanged instead of bodily items. Money is made by taking advantage of the difference in value flanked by the two forms of currency.

Currency exchange is a fun but complicated trading market. If you are paying attention in trading currency contact a monetary advisor who can help inform you on the basics of currency exchange.

Commonly Exchanged Currencies. There are a number of currencies which are exchanged and they include the Euro, American Dollar, Japanese Yen, British Pound, Swiss Franc, Australian Dollar, Canadian Dollar, and the New Zealand Dollar.

One of the most popular currency exchange market is Forex. Forex offers online currency trading as well as a huge reserve of research and background in order. They also allow new investor to set up practice financial records which allow them to buy and sell currency in demo mode. This allow new investor to be able to obtain their feet wet in the currency markets with no behind any extra.

A gainful Online E-Currency Exchange Business For The Internet dealer

2011-10-29T00:45:00.000-07:00

A gainful Online E-Currency Exchange Business For The Internet dealer

Many people are unaware of what is e-currency exchange or e-currency trading. To the bulk, they are bewildered, thinking that e-currency exchange is the same as forex trading or trading in foreign exchange.

In actual fact, and to the blow of many, e-currency exchange and forex trading are two unlike creatures, though they go to the same financial genre.

In e-currency exchange, you buy and sell e-currencies, effectively exchanging the rights of e-currencies on the net.

What are some of the e-currencies exchange or trading you can do?

Here are some of the e-currencies you can buy or put up for sale:

- purchase e-Gold, 1mdc, Pecunix, e-Bullion, autonomy keep or WebMoney with a bank wire or western union.

- Sell e-Gold, 1mdc, Pecunix, e-Bullion, Liberty Reserve or WebMoney for a bank wire or western union.

- Exchange e-Gold, 1mdc, Pecunix, e-Bullion, Liberty Reserve or WebMoney amongst each new.

What are the real currencies you can use to buy these e-currencies or to exchange them for?

Some of the major currencies you can use to buy and sell e-currencies for are:

EUR (Euro)

JPY (Japan Yen)

USD (US Dollars)

AUD (Australia Dollars)

AED (U.A.E. Dirhams)

GBP (UK Pounds)

INR (India Rupees)

HKD (Hongkong Dollar)

CHF (Switzerland Francs)

CAD (Canada Dollars)

SGD (Singapore Dollar)

SEK (Swedish Krona)

SAR (Saudi Arabia Riyals)

IRR (Iran Rials)

This well allow almost the entire world to get implicated in e-currency exchange. Where your country's currency is not listed, it is easy to take a 2-step come near to fund your e-currency account. You need to exchange your country's currency into the suitable currency as listed above and then use that currency to fund your account.

The usual way to earn from e-currency exchange is to earn some 0.5% to 5% of your money as proceeds in the day, and to let the magic of compounding to mix these profits every 24 hours!
The compounding effect would really multiply your income, so it is probable to earn a 5 figure income on e-currency exchange itself!

The e-currency exchange system was efficient so now it takes 24-48 hours to take out profits. This allow you as a private e-currency exchange trader to withdraw part of your gains as an income to live on and leaving the balance to continue to earn as your cash cow generate you a steady stream of proceeds.

Current Inflation

2011-10-29T00:07:00.000-07:00

USA Inflation data is calculated to two decimal places while the government only calculates to one decimal place. Therefore, while being based on the USA government's index our data provides a "finer" view. January and February 2005 is a perfect example, according to the government statistics both months had an inflation rate of 3%. In January however, our USA data shows it as 2.97% and February shows as 3.01%. Therefore instead of the inflation rate being "flat" it is actually rising slightly. In another example we see August 2003 and September with the Government saying the rates were 2.2% and 2.3% respectively. This would lead us to believe that inflation rose .1% during that period. In actuality however, it rose from 2.16% to 2.32% or a .16% increase, substantially more than .1%!
The Inflation table below is updated monthly and provides the current US Inflation Rate plus Monthly Inflation Rate data back to January 2000. The Inflation rate is calculated using the USA Current Consumer Price Index (CPI-U) published monthly by the Bureau of Labor Statistics.

Current Annual Inflation Rate in US

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Ave
2011	1.63%	2.11%	2.68%	3.16%	3.57%	3.56%	3.63%	3.77%	3.87%	NA	NA	NA	NA
2010	2.63%	2.14%	2.31%	2.24%	2.02%	1.05%	1.24%	1.15%	1.14%	1.17%	1.14%	1.50%	1.64%
2009	0.03%	0.24%	-0.38%	-0.74%	-1.28%	-1.43%	-2.10%	-1.48%	-1.29%	-0.18%	1.84%	2.72%	-0.34%
2008	4.28%	4.03%	3.98%	3.94%	4.18%	5.02%	5.60%	5.37%	4.94%	3.66%	1.07%	0.09%	3.85%
2007	2.08%	2.42%	2.78%	2.57%	2.69%	2.69%	2.36%	1.97%	2.76%	3.54%	4.31%	4.08%	2.85%
2006	3.99%	3.60%	3.36%	3.55%	4.17%	4.32%	4.15%	3.82%	2.06%	1.31%	1.97%	2.54%	3.24%
2005	2.97%	3.01%	3.15%	3.51%	2.80%	2.53%	3.17%	3.64%	4.69%	4.35%	3.46%	3.42%	3.39%
2004	1.93%	1.69%	1.74%	2.29%	3.05%	3.27%	2.99%	2.65%	2.54%	3.19%	3.52%	3.26%	2.68%
2003	2.60%	2.98%	3.02%	2.22%	2.06%	2.11%	2.11%	2.16%	2.32%	2.04%	1.77%	1.88%	2.27%
2002	1.14%	1.14%	1.48%	1.64%	1.18%	1.07%	1.46%	1.80%	1.51%	2.03%	2.20%	2.38%	1.59%
2001	3.73%	3.53%	2.92%	3.27%	3.62%	3.25%	2.72%	2.72%	2.65%	2.13%	1.90%	1.55%	2.83%
2000	2.74%	3.22%	3.76%	3.07%	3.19%	3.73%	3.66%	3.41%	3.45%	3.45%	3.45%	3.39%	3.38%

To work out inflation from a month and year to a later month and year,

Sterling romps up

2011-02-23T07:24:00.001-08:00

Having dropped as low as €1.1530 at the end of January, the pound has enjoyed a strong resurgence this week following some upbeat UK figures. The triple whammy of the three leading industries – manufacturing, construction and services – all came in significantly above forecast, raising the prospects for a strong opening quarter - further discrediting the catastrophic fourth quarter GDP estimates, which showed the UK economy in contraction.

Sterling has been given an additional leg-up from some long overdue euro weakness. In a press conference earlier today, European Central Bank President, Jean-Claude Trichet played down the risk of eurozone inflation stating that inflation risks are “broadly balanced” – a rather beige phrase which more or less summed up the press conference. The market had been pricing in a “ratcheting up” of hawkishness – this damp squib of a comment then more than dampened recent speculation about an interest rate rise which I alluded to in my blog post only yesterday.

More often than not, higher interest rates boost the appeal of a currency so with Trichet stemming that prospect the euro has lost ground.

The exchange rate has now moved up above €1.18, its highest point in a fortnight. The next key event in the calendar to watch out for will be the Bank of England’s policy announcement on Thursday 10^th.

Has the market gone too long of EUR-USD? And is this the start of a turn-around for the plucky euro?

Edward Knox

Analyst

Caxton FX

UK inflation figures send sterling higher

2011-02-23T07:23:00.006-08:00

Sterling extended its gains against the dollar after a much higher than expected inflation reading fuelled expectations of an interest rate hike from the Bank of England.

The December Inflation Report came in at 3.7%, far higher than the expected 3.4%. Rising commodity (specifically food and fuel) prices are thought to be the main drivers behind the surge. These results show the largest rise between November and December in history. Further upward pressure is expected next month as the January figure will show the preliminary effects of the 2.5% rise in VAT. If the Core Price Index (CPI) continues to rise at a similar rate, the BoE will be forced to raise interest rates, perhaps as early as May.

Focus will now shift to next week’s BoE Monetary Policy Committee meeting minutes to see if other policy members have joined the hawkish sentiments of Andrew Sentence in calling for a rate rise.

The euro has also pushed over 1% higher against the greenback after economic confidence figures came in considerably higher than expected. Also, reports of investors from the Middle East and Russia buying eurozone debt have helped to send the single currency higher. However, speculation that the EU’s policy makers plans to stop the crisis from deepening are working are premature, if not pre-glint-in-the-milkman’s-eye. The true depths of the debt crisis have not been realised and national plans to cut deficits are lightweight at best. There could still be a long way to go in this saga. Don’t forget that it was not until May 2010 that the Greek tragedy unfolded. Expect to see a couple of unanticipated events this year.

When should Merv and the boys increase interest rates and by how much? Any thoughts or questions, please feel free to post below.

UK inflation surges to 5.2%
Mervyn King warns that UK recovery is “off track”
Guardian reports that agreement made on EFSF, Greek debt and bank recapitalisation – no confirmation however
Bank of England minutes due at 09.30

Indicative Rates	Sell	Buy
GBPEUR	1.1406	1.1433
GBPUSD	1.5747	1.5762
EURUSD	1.3791	1.3815
GBPJPY	120.78	120.94
GBPAUD	1.5289	1.5316
GBPNZD	1.9714	1.9745
GBPCAD	1.5914	1.5957
NZDUSD	0.7976	0.7995
GBPZAR	12.54	12.59
USDZAR	7.9582	7.9977
GBPPLN	4.9573	4.9897
EURJPY	105.81	106.09

Tom Hampton
Analyst – Caxton FX

The euro advances against the dollar

2011-02-23T07:23:00.004-08:00

The euro continued to make significant gains against the US dollar today. Further rumours about Middle East and Russian buyers of European debt helped send the single currency higher, while weak housing data from the states dragged the greenback lower.

EUR/USD briefly went above $1.35 to hit an eight week high of $1.3537. A report in a German newspaper outlined a prospective new restructuring plan for Greece. The report said that the German government was drawing up a plan to allow the Greeks to buy back their own debt using a eurozone bailout fund. The report has been denied by the German parliament.

The seventeen-nation currency has had a few positive blips recently, through the ZEW figures yesterday, speculation of sovereign wealth funds purchasing EU debt and JC Trichet alluding to an increase in the EU’s interest rate. However, the macro issues affecting the region are still prevalent and should set the overall tone for the year. Any boost the euro has received since the start of the year is surely just band-aids re-attaching a dismembered limb.

Is everything going to be okay in Europe or is this simply another calm before another storm? Please add any thoughts and comments below.

Tom Hampton

Analyst – Caxton FX

Euro continues to gain but turnaround seen

2011-02-23T07:23:00.002-08:00

The pound has started the week in much the same way as it ended the last: on the back foot. Steadily the UK currency is finding its early year gains being eroded as the market reassesses the situation in the eurozone.

To be honest this is a trend that we’ve become accustomed to. The euro started the year a long way from favour amid growing concerns about Portugal. However, following a couple of successful bond auctions and supportive comments from both Japan and China, the euro has staged a recovery. Indeed demand for the single currency from Far Eastern buyers has been particularly pronounced recently. The question now is how far can the euro go before it begins to trend lower once again?

Against the dollar, the euro has climbed to a two-month high this afternoon at $1.3665. However, there is growing speculation that $1.37 will prove too appealing a level for investors to ignore and they’ll start to sell the currency once again. In the longer term the underlying problems embroiling the eurozone are bound to re-emerge and it’d be a brave man who argued that the euro has much shelf-life at its current level.

Turning focus to this week, the economic calendar is filled with high profile announcements. Fourth quarter economic growth figures from both the UK and the US are due; the minutes to the Bank of England’s latest meeting are scheduled; and the Fed will give its first policy update of the year.

This barrage of announcements should keep the markets lively. But for those hoping the pound is on the verge of mounting a full scale attack on €1.20, they’ll have to wait a while longer. Ireland's latest political turmoil, although cause for concern, is far from the catalyst needed to dampen euro spirit. Even higher UK interest expectations are struggling to lend much support at present. When the argument is fully explored, it’s still pretty unlikely that the Bank will nudge; how is a 0.25% hike going to curb rising oil prices exactly....?

Duncan Higgins
Senior Analyst – Caxton FX

Sterling plummets as economy contracts

2011-02-23T07:23:00.000-08:00

There was a shock to the system today, as the pound endured the currency equivalent of falling into an ice cold lake. GDP figures released this morning showed that the British economy contracted by 0.5% in the three months through December.

Although this was a first estimate, the realisation at just how poor these figures were (market forecast was a full percent higher) caused the pound to sink across the board. It fell over 2 cents against the US dollar and a cent over its euro neighbour in just a matter of minutes.

With Johnson out, the incumbent Shadow Chancellor Ed Balls will be smacking his lips at the prospect of getting stuck into Tory manifesto, hounding Cameron and Osborne for “complacently congratulating themselves” for securing the economic recovery back in the Autumn and urging the government to pause and "rethink" its deficit-reduction strategy.

Indeed it appears the back slaps may have been a little hasty. With the economic recovery grinding to a halt, arguments for an interest rate rise will surely have gone into full retreat. Adam Posen is another man who probably wore a wry smile on his face today. His dovish stance is likely to have attracted some followers among the MPC members, although an accompanying vote for QE is less likely with inflation as high as it is.

The question is, just how much will this new data affect policymaker’s decisions? It’s worth noting, however excitable/nervous the market gets over this figure, it’s only estimated data - I’m not expecting the Bank of England to fully reassess the strength of Britain’s economic recovery at this stage. We did also see a staggeringly bleak December weather-wise, and history tells us that the UK isn’t overly competent in the snow. How much did this adverse weather affect our growth? Osborne, understandably, thinks a lot.

What this data has done is to mark a substantial step back for Britain, and it could force downward revisions to both 2011 and 2012 growth forecasts. Sterling’s forecasted turnaround in trend against the euro also looks to have taken a step back. So the question now is just how long will this hangover last?

Duncan Higgins

Senior Analyst – Caxton FX

What next for Sterling?

2011-02-23T07:22:00.003-08:00

The MPC meetings minutes were released this morning much, I’m sure, to the embarrassment of policy member Martin Weale who decided to dance to the tune of raising interest rates. He now joins Andrew Sentance – who has been voting for this policy shift for the past 4 months – and will probably be rethinking his decision after the release of Britain’s shock GDP figure.

Mervyn King meanwhile, smug in the knowledge that he refused to bow to inflationary pressures, used a speech yesterday to defend the Central Banks ultra lose monetary policy in the face of high inflation. He reiterated that the economic recovery would be ‘choppy’ (understatement if ever I saw one), and that real wages would be heading lower. I’d imagine that King’s Speech will not have been received quite as well by the public as its multi Oscar nominated names sake.

The question now is; what will become of the pound if these figures are to be relied on? How much of a toll did the weather take on these preliminary results? After all, the economic impact of the snow is extremely hard to quantify. My feeling is that the figure of -0.5% shouldn’t be taken at face value. Certainly the recovery has been blown off course, but we should wait for the second and final estimates before completely reassessing the situation. The figure is at odds with the PMI (Purchasing Managers’ Index) surveys and the National Statistics Office has been wrong before, notably coming in 0.4% wide of the mark in the final quarter of 2009. A similar revision this time around could well be on the cards.

Nonetheless, the pound must still deal with the dual hangover of weak economic growth and high inflation: ie stagflation. This is not a concept that will rest too comfortably for the pound. Whereas the expectation of higher interest rates gave sterling a boost in the early part of the year, that eventuality has lost all credibility. Indeed, the prospect of such a move from the Bank of England looks about as likely as Andy Gray presenting Woman’s Hour.

With key US announcements due today and Friday, the market should avert its attention from the UK economy at least in the short term. However, any lasting relief for sterling will depend on a fresh wave of eurozone concerns or these lowly €1.15 levels could endure for now.

Edward Knox

Analyst

Is this a blip, or the beginnings of a double-dip?

2011-02-23T07:22:00.001-08:00

It seems from yesterday's MPC minutes – the meeting to which was crucially held prior to the release of our shock GDP figure - that the balance of power between the hawks and the doves has shifted. The idea of raising interest rates to combat rising inflation - estimates of which reach to 5% by end of the year thanks to the triple whammy of high energy prices, import costs and the VAT rise - is increasingly on the agenda.

The anticipation of raising interest rates was enough to boost sterling at the beginning of the month. However, with negative economic growth, stagflation is fast becoming the new buzzword and any further rally for sterling has been well and truly checked.

Imagine if you will, if on the 13^th January, the 9 member committee had voted for a quarter point increase in the base rate. Borrowing costs on the rise, just as the word double-dip is reintroduced to every editor trying to flog their paper. Panic? Probably, yes.

To this end King was probably correct in keeping monetary policy loose, at least for now. After all, how is a UK based rate rise going to curb rising fuel and food costs exactly?

King is walking a very fine line at the moment; keeping interest rates low for too long could inevitably lead to longer term problems for the economy; raising them too early and what little confidence there is in an already weak economy would be eroded.

To be fair, the paper floggers may be jumping on the bandwagon to a certain extent; are we facing a double dip? Not yet, at least not technically – we would need to see 2 quarters of consecutive contraction first. The GDP figure that is causing all this mischief for the pound (as I detailed in my previous blog post) could still be revised up. The weather, the volatile nature of data when emerging from recession, and the fact that the 0.5% figure only accounted for 40% of surveys issued heightens the possibility that the figure will be revised. The second estimate (not due until Feb 25^th) could offer a more uplifting figure for the policy members to get their teeth stuck into. The pound meanwhile hangs in the balance.

Edward Knox

Analyst

US economy accelerates – dollar turn around seen

2011-02-23T07:21:00.001-08:00

In contrast to Britain’s laughably poor economic growth figure earlier in the week, data this afternoon has shown that the US economy expanded by an annualised 3.2% in the final three months of 2010. Although the figure is marginally below the median forecast (3.3%), it does reaffirm the improving economic conditions seen in the US at present.

Earlier in the week the Fed stood by its stance to keep interest rates on hold “for an extended period” and I doubt that today’s figure will alter that view in any way. The real thorn in the side for the Fed is the stubbornly high rate of unemployment. Until economic growth starts to bring jobless numbers down we can expect the Fed to stand pat on policy, despite the recent addition of a couple of hawks onto the voting council.

We have seen a slight pickup for the dollar this afternoon. The GDP figure, although solid, is hardly setting the headlines alight and I think traders will probably be content to close up shop early for the weekend without the need to rush into new positions. However, looking to next week I expect that the dollar could begin a steady comeback as the disparity between the strength of the US and UK’s respective recoveries is made evident.

The pound’s been floating around up near $1.60 for the past two weeks, helped in part by a firmer euro and higher interest rate expectations. With those expectations now dashed and the euro looking vulnerable at $1.37, I can see a brighter outlook for the greenback.

Clearly conditions in the US are improving and the markets expect another positive employment change number at the end of next week. Certainly when compared to the snow bitten UK economy and the debt ridden eurozone, the US is looking like an increasingly good bet. And for those investors still looking for a safe-haven, Japan’s credit downgrade has down the yen no favours giving another reason to look out West.

The factors are building in favour of a stronger dollar. One convincing order on the sell side of EUR/USD and the trend will turn.

Duncan Higgins

Senior Analyst – Caxton FX

Spotlight on Egypt

2011-02-23T07:19:00.000-08:00

With the front pages dominated by news of the crisis in Egypt, it’s hard to escape the chaos that has brought the country to a virtual standstill.

Protestors demonstrating against corruption, elevated inflation, chronic unemployment and a lack of democracy are currently exorcising their democratic right, which has been thwarted for too long by Murbaraks 30-year dictatorship.

Their frustrations have come to the fore, with the disruption spilling over to a seventh day – the impact understandably having an effect on the global markets (something I’m sure the demonstrators, quite rightly, aren’t that concerned about).

A by-product of this political turmoil has been for Moody’s to downgrade Egypt’s government bond ratings to Ba2 from Ba1, and changing their outlook from stable to negative. In the currency markets, the Egyptian pound has also taken a hammering sinking to a four and a half year low against the safe-haven dollar, with the Turkish Lira and Israeli Shekel among the other currencies under selling pressure due to their relative proximity to the disorder.

The classic safe havens of gold, oil and the US dollar were the immediate beneficiaries of this crisis, with traders pulling out of riskier stocks whilst keeping a watchful eye on these uncertain times - hoping the seeds of discontent aren’t sewn too close to the oil exporter counties of the Middle East, and the Suez canal – an artery responsible for the shipment of around a million barrels of crude and refined oil a day. Indeed oil has already climbed back to within a whisker of $100 per barrel and could quickly climb through that level if risks to production manifest themselves.

Uncertain times indeed then. However, perhaps rather surprisingly, the market’s today do seem to be regaining lost ground. The yen, US dollar, and Swiss franc have all given back Friday’s gains suggesting that Egypt’s civil unrest is not yet undermining broader risk appetite. Have we seen an end to this story? I expect not.

Edward Knox
Analyst

Dollar weakness, but for how long? Dollar weakness, but for how long?

2011-02-23T07:18:00.001-08:00

The start of 2011 has seen the US dollar loosen its stranglehold over both the pound and the euro. Both currencies are continuing to rally strongly in spite of the fragile economic conditions still seen within both camps.

We have seen gains for the Euro and the pound of around 3% and 4% respectively since the beginning of this year, but how long can this dollar weakness last?

The main driving force behind the movement has been the diverging policy stance seen between the Fed and its counterparts across the Pond.

The Fed has reiterated its desire to keep interest rates low for an “extended period”, alluding to the fact that, despite some decent economic growth (2.9% in 2010), it will continue to keep monetary policy loose in order to stimulate growth and absorb the chronic levels of unemployment.

By contrast there is speculation that both the ECB and BoE could move to tighten policy (ie raise interest rates) in order to curb inflationary pressures. Such a move is still seen to be some months away, but would doubtless come considerably earlier than in the US, which is bolstering the currencies.

Earlier today, one of the two MPC hawks, Andrew Sentance, suggested that the Bank should act sooner rather than later to retain the Banks' “hard won” credibility by keeping inflation in check, and avoid a sudden and heavier rise of interest rates down the line that would “jolt” the recovery. This policy is beginning to gain further credence, with Sentance sticking to his guns despite recent worries of stagflation.

Similarly, Trichet has recently been hawkish about the prospects of raising interest rates – the market expecting this to come in to effect around September, probably as part of his swansong (his term as ECB President is due to end in October).

With this in mind, coupled with the headlines being oddly devoid of any developments with regards to the eurozone debt crisis, it’s hard to see the dollar reversing its current trend in the short term.

Edward Knox
Analyst
Caxton FX

Sterling romps up

2011-02-23T07:17:00.003-08:00

More often than not, higher interest rates boost the appeal of a currency so with Trichet stemming that prospect the euro has lost ground.

Has the market gone too long of EUR-USD? And is this the start of a turn-around for the plucky euro?

Edward Knox

Analyst

Caxton FX

US payrolls down and unemployment down...huh?

2011-02-23T07:17:00.001-08:00

As is too often the case, the US non-farm payrolls offered up less information than it did stir up confusion. The actually employment change was far weaker than the market had hoped for, coming in at an additional 36,000, against forecasts of 139,000. However the unemployment rate dropped from 9.4% to 9.0%.

This dramatic fall in the jobless level could come as a result of a drop in the number of people actually seeking employment. As they cease to look for work, they cease to be classified as unemployed. The disappointing employment change data is likely to take the prominent position among investors as we head in to next week, but nonetheless the dollar has enjoyed a strong close to the week.

The euro dropped to a ten-day low of $1.3547 as investors used the mixed data as an excuse to cash in on profits. The pound has also lost ground this afternoon, dropping back below $1.61.

However heading into next week, we continue to fly the flag of sterling optimism! When the market looks closely at today’s US employment figures it’s likely to conclude that the Fed are going to be in no further hurry to tighten policy. Indeed, Fed Chairman Bernanke could well reiterate that stance during a speech in front of the House Budget Committee on Wednesday, which would pile the pressure back on the dollar.

Against the euro too we see some upside next week ahead of the Bank of England’s policy announcement on Thursday. The market is pricing in a very small chance that the Bank could actually decide to raise interest rates. We’re unconvinced (as I think most are) that they’ll go ahead with such a move but that won’t stop little rumours being thrown around, which shouldn’t do sterling any harm.

In the meantime, the currency markets can take a back seat as Twickenham lights up the opening of this year’s Six Nations! Who guessed it would be Mike Tindall at the helm for England.…!?

Duncan Higgins

Senior Analyst - Caxton FX

Interest rates - an interesting dilemma

2011-02-23T07:16:00.005-08:00

To raise, or not to raise, that is the question: (for this week at least). The Monetary Policy Committee (MPC) meet this Thursday with the market keeping a closer than usual eye on their decision.

Speculation is certainly rife – the pound being the happy beneficiary of this, hitting a 3 week high against the single currency, but how will they vote, and what are the likely outcomes?

The likelihood is that they will leave the rates on hold for now. However, it could well be a much closer call than many expect. One reason for a possible February rate hike could be if the committee decides to disregard the Q4 GDP estimate; by this stage the MPC will have had access to December’s data for industrial production and construction, and that other bit of crucial information – the January Consumer Price Index data (CPI). If this is overly high, King and his cronies could move to prevent inflation expectations being destabilised.

Andrew Sentance, a relatively long standing hawk on the interest rate dilemma, and Charles Bean – the deputy governor of the Bank of England - further added fuel to the fire in interviews given last week. The latter stated in response to the problem of global commodity price inflation that the committee “may well have to respond to that by keeping domestically generated inflation lower”.

It is not inconceivable then that the bank will raise interest rates as early as February – a modest increase would be favoured over a sharp one. What is certain however, is that there will be a highly nervous market in the coming few days...

Edward Knox

Analyst - Caxton FX

George grinds the gears

2011-02-23T07:16:00.003-08:00

Despite the strong anticipation of a rate hike in the UK (as reported in my blog yesterday), the pound has more or less limped to a halt on the back of Chancellor George Osborne’s announcement of his increased tax on banks – imposing the full 0.05% straight away, as opposed to the starter 0.075% levy that was originally planned.

The pound pretty much fell across the board, falling a half cent against the USD and almost a cent against the euro (after 5 consecutive days on the up).

The extra levy will hope to raise £800m as Britain’s government aims to plug its record budget deficit, however the announcement will have come as a shock to banking leaders who are in the middle of negotiations with ministers about project Merlin – a deal looking to make available £190bn of credit for businesses and showing restraint in bonus payments.

George Osborne’s decision to act now, and impose the full levy straight away has been vindicated, he believes, by the increasing financial health that the banks are finding themselves in; the fact that it’s been imposed just before bankers’ bonuses are due will no doubt be seen as a decision based on political pressure.

Public pressure sways politics, and there is nothing more popular than banker bashing! But is this really necessary considering the amount the financial sector adds to the British economy? Banking leaders will meet this afternoon to discuss whether it remains sensible to sign up to Project Merlin – a decision that won’t be taken lightly if the government doesn’t resist the temptation to bash them when the political heat is on.

This sell-off of the pound is likely to be a knee-jerk reaction to the news, in an otherwise quiet day, a blip on the radar in an important week of decisions, but it will be interesting to see how the Chancellor balances the need to keep Britain as the top dog in global financial services against the understandably angry public going forward.

Edward Knox

Analyst - Caxton FX

UK interest rates on hold

2011-02-23T07:16:00.001-08:00

So, despite a build up of speculation to the contrary, the Bank of England’s Monetary Policy Committee decided to keep policy unchanged today, leaving UK interest rates on hold at 0.5%.

Sterling briefly touched a session low against the USD following the decision as hawkish traders rather optimistically priced in a 20% chance of a rate hike. The pound has since recouped its losses with the expectation gaining momentum that the BoE will indeed tighten monetary policy to counteract the rising inflation.

Even amid stronger economic figures, notably from the National Institute of Economic and Social Research (NIESR) which suggested that UK economy grew by 0.6% on the month in January, evidence of a sustainable recovery is still thin on the ground, with the economy facing headwinds from some heavy public spending cuts.

The full outcome of the meeting won’t be known until the minutes are produced in a fortnight; it will be interesting to see whether any of the 6 members currently sitting on the fence decided to take sides, with the pressure to act amid growing inflationary fears certain to have induced some fairly heated debates.

Although the government will undoubtedly be content that the bank decided to hold fire on rates – cushioning the blow on their fiscal tightening - the same may not be said for sceptics of the BoE, whose line on inflation being temporary is beginning to wear thin a year down the line.

The pressure cooker is well and truly on then; a rate hike is more or less inevitable by May according to the latest consensus.

Edward Knox

Analyst - Caxton FX

Sterling bulls return for a busy week ahead

2011-02-23T07:15:00.003-08:00

Strong PPI data from the UK was largely ignored by the market today, with the pound waning as investors look for clarity after the Bank of England decided to keep interest rates on hold.

Clarity will surely come next week, when the BoE releases its quarterly inflation report which will include their projection for inflation and economic growth over the next 2 years.

Mervyn King, the Bank of England Governor, maintains that inflation is being driven by one off domestic factors such as the rise in VAT, and external factors over which the bank has no control such as spiralling commodity prices, but the market has already priced in an interest rate rise as the fear begins to set in that inflation is becoming entrenched.

Next week could then be a tale of sterling strength amid an extremely busy calendar. The UK’s latest inflation figures are also due on Tuesday and with a forecast of 4.1%, the hawkish policymakers are sure to have the upper hand.

In the eurozone, preliminary GDP figures are released for Europe’s powerhouses, France and Germany. If Britain’s weather afflicted GDP figure was anything to go by, we could be looking at some euro weakness as the readings undershoot expectations.

Other highlights for the week will include the publication of the minutes to the Feds latest meeting. The report is likely to strike a dovish tone with the statement following the meeting a couple of weeks ago reiterating the need to keep monetary policy ultra loose in order to accommodate a recovery in the labour market. The problems surrounding high levels of unemployment appear to be hindering the hawkish mentality of the two most recent additions to the committee.

Despite the pound’s momentum petering out slightly towards the end of this week, I wouldn’t be surprised to see the sterling bulls return as speculation for a rate rise turns to March.

Edward Knox

Analyst - Caxton FX

Eurozone cracks begins to show

2011-02-23T07:15:00.001-08:00

After England’s demolition (yes I think we can go that far) of Italy at the weekend, the theme continues in the currency markets, with the pound rallying against its euro counterpart, climbing up .70% on the day and briefly touching €1.19.

After a lengthy absence from front page news, the eurozone cracks are finally beginning to re-appear, with a plethora of potential problems hitting the headlines once more.

The lack of news coming recently, coupled with euro strength had more or less duped investors into thinking that they had put the eurozone troubles behind them. This is not the case however, as Ireland and Greece reared their ugly heads with signs that all is not well in their respective camps.

Ireland’s main opposition party, Fine Gael, announced today that they would seek a renegotiation of the international bailout that Ireland received should they be elected on February 25^th. Meanwhile Greece, in a sign that they may be struggling to match debt repayments, criticised the IMF and European Union for the stringent terms that were imposed on them.

This comes on the same day that Portugal, (another member of the G.I.P.S.I. family) saw benchmark government debt yields climb to an all time high, above the psychological 7.00% barrier, to 7.37% - a bad sign for the countries borrowing costs. This raises the prospect that the country may yet be forced to appeal for a bailout.

In other news, reports suggested that rescue plans for ailing lender WestLB were under threat, assuring that euro sentiment remained sluggish at best at the beginning of this week.

The main driving force behind the currency markets, EUR/USD, broke below key technical support on this news, and continues to fall with little light at the end of the tunnel in the near term.

A frenetic start then to a busy week – focus has returned to the eurozone with Spanish and Italian bond auctions, and German GDP all still awaited. Meanwhile Britain’s inflation report on Wednesday is looking to overshadow the whole lot as Mervyn King takes the stand.

Edward Knox

Analyst - Caxton FX

Sterling dives on dovish sentiment

2011-02-23T07:14:00.004-08:00

Britain’s Consumer Price Index came out yesterday morning with the news that inflation is indeed at 4% - confirmation that inflation is now double the Bank of England’s target rate of 2%.

Having received the news that inflation had hit a 2 year high, and with traders anticipating a near-term interest rate hike, the pound duly rallied across the board.

Today was however a different matter. In a press conference this morning to discuss the recent inflation data, King was typically downbeat on the prospect of raising rates, cooling market expectation with his dovish tone. He alluded to the idea that the Bank may well keep interest rates at a record low to aid the recovery which is “unlikely to be smooth”. He followed this up with clarification that policy makers haven’t actually preannounced an interest-rate increase, suggesting that the market may have “run ahead of themselves”.

The bank today forecast that inflation will quicken from a 2 year high and peak at 4.4% before easing to its 2% target in mid 2012. This came amongst downgrades on its growth forecast.

On this news, an already twitchy market saw the pound fall against all of its major counterparts.

Some in the market then will reconsider whether UK rates will rise as early as mid-year. We will see a fuller picture when the bank releases the minutes from its recent inflation report meeting next week. The MPC members have a tough job in balancing higher inflation with weak economic growth, with King rightly acknowledging that “if you don’t see differences of view in this kind of situation, when ever would you find them?” What is certain, is that the BoE will have to raise interest rates at some point, the market will now however have to reassess when they will pull the trigger with King giving no hints away on timing.

Edward Knox

Analyst - Caxton FX

Sentance gives sterling a boost

2011-02-23T07:14:00.002-08:00

It seems that this interest rate saga is keeping the market on tenterhooks, with a new twist hitting the headlines this morning. In a nice follow up to my recent blog, the story continued today as Andrew Sentance, a resident hawk in the MPC, more or less rebuffed Governor King’s speech which claimed that the market was “getting ahead of itself” in anticipating an interest rate hike.

In response sterling recouped some of its losses from yesterday, up against most of its major counterparts as Sentance slammed the Central Bank’s economic forecasts, accusing them of understated inflation risks. In his most outspoken attack yet, Sentance made clear his view on the Central Bank’s poor track record in forecasting inflation, and suggested that monetary policy would most likely need to be tightened faster and “more than the markets currently expect” to combat record inflation.

Sentance argued that raising interest rates would bolster the value of the pound, which would help to offset the rising cost of imported commodities – a key contributing factor to the doubling of the banks inflation target.

Although this morning’s comments will no doubt have offered support for sterling, the underlying problems of high unemployment and low real wages may well be reflected in tomorrow’s retail sales data. The market then will now look forward to the MPC minutes, which will be released on Wednesday with baited breath: will we see a third vote in favour of a rate rise? Not just yet would be my guess.

Edward Knox

Analyst - Caxton FX

Middle East crisis overshadows MPC minutes

2011-02-23T07:14:00.000-08:00

With tensions in the Middle East reaching fever pitch, we’ve finally seen the market react today. Investors have lined up to put their money in safer assets on the back of the geopolitical risks with the US dollar, Swiss franc and Japanese yen all benefitting from the global uncertainty.

Libya, the latest in a string of countries across northern Africa and the Middle East to revolt against its oppressive regime in recent times, is teetering on the edge of civil war as Muammar Gaddafi, the tyrannical ruler, desperately clings to power saying that he will fight “until the last bullet” - a phrase which I’m sure won’t sit well with the protesters looking to give their country the progress it needs after decades of mismanagement.

The pound fell against its safe-haven US counterpart today as investors sought to hedge the risk of a potential fall-out from Libya. The pound gained against the euro in early trading on the back of this US strength, however ceded its gains on the back of hawkish comments from ECB policy maker Yves Mersch. Mersch said that he would not be surprised if the bank “sharpened its tongue on inflation”.

The comments saw a huge swing in the euro’s favour perhaps alerting the market that there are indeed big decisions to be made on interest rates after the news of the unrest in the Middle East quite rightly stole the headlines.

The ECB is still expected to trail the Bank of England in raising interest rates, but Mersch’s comments have certainly done the euro no harm. The gains come despite concerns raised by the Bundesbank Governor and one time ECB president candidate Axel Weber, who fired a parting shot at the ECB’s bond purchasing programme on the same day that it was revealed that they bought 24% of Portuguese debt in the auction 2 weeks ago.

Despite waning enthusiasm for the pound off the back of falling risk sentiment, the market will now be gearing itself up for the results of the MPC’s minutes which will be revealed tomorrow.

Edward Knox

Analyst - Caxton FX

USD/CHF Classical 02.23

2011-02-23T06:04:00.003-08:00

USD/CHF: The market has been in the process of pulling back after stalling out ahead of key short-term resistance by 0.9785 in the previous week. Still we see any additional declines well propped above 0.9300 (record lows) on a close basis and look for the market to once again be well supported on the current dips into the 0.9300’s. Ultimately, only a close below 0.9300 would concern, while back above 0.9500 should confirm bias and accelerate gains.

Written by Joel Kruger, Technical Currency Strategist for DailyFX.com

If you wish to receive Joel's reports in a more timely fashion, e-mail jskruger@dailyfx.com and you will be added to the "distribution" list.

source.. yahoo

USD/NOK Breaking Down Below Medium-Term Range Base

2011-02-23T06:04:00.001-08:00

A daily overview of technical developments in the regional currencies. Take a look inside for the latest scoop on the Norwegian Krone and Swedish Krona.

Eur/SekThe market could finally be in the process of carving a material base with the latest setbacks being very well supported by 8.70 and resulting in the latest bullish reversal back towards key resistance at 8.85. Look for a break and close back above 8.85 to officially confirm short-term bullish reversal and open the door for a more significant recovery towards 9.00 further up. Any setbacks should now be well supported ahead of 8.75.

Eur/NokWe are finally starting to see the formation of a potential base in the cross after the market had dropped to fresh multi-year lows by 7.70. At this point, the latest rally has stalled out ahead of 8.00, and for the recovery to continue, we would need to see a higher low somewhere above 7.70 to be confirmed on a sustained break back above 7.95 and through psychological barriers by 8.00. A break and close back below 7.70 would negate.

Usd/SekRemains under some intense pressure with the market trading just off of the yearly and multi-week lows from several days back at 6.36. However, with daily studies looking stretched, there is the risk for some corrective upside ahead. A bullish reversal week would definitely help the USD’s cause here and we would need to see a break above 6.55 to encourage these reversal prospects. Back above 6.55 also sets up a potential double bottom formation that opens a recovery to 6.70 over the coming sessions.

Usd/Nok remains under intense pressure with the market now looking to establish below critical medium-term support at 5.70. A sustained move below 5.70 would then expose a more significant decline back towards 5.50, while a break back above 5.75 would now be required to alleviate downside pressures.

Written by Joel Kruger, Technical Currency Strategist for DailyFX.com

USD/JPY Classical 02.23

2011-02-23T06:03:00.001-08:00

USD/JPY:The market continues to remain extremely well bid on dips, with the latest surge back above 83.00 really encouraging longer-term recovery prospects and opening the door for a potential break of key topside resistance by 84.50 over the coming days. Longer-term cyclical studies certainly suggest that the market could be poised for a major bullish reversal and we would look for a break and weekly close back above 84.50 to help confirm outlook. Any dips from here should be well supported above 82.00 on a close basis, while only a break and close back below 82.00 would concern.

Written by Joel Kruger, Technical Currency Strategist for DailyFX.com

If you wish to receive Joel's reports in a more timely fashion, e-mail jskruger@dailyfx.com and you will be added to the "distribution" list.

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source .. yahoo

China Weekly: Concerns Mount Over Slowing Growth; PBOC Sends Mixed Signals on Yuan

2011-02-23T06:02:00.002-08:00

A slowing PMI manufacturing reading raises some concerning issues while the PBOC governor sends mixed messages about yuan appreciation…..

CHINA WEEKLY

It has been a busy week in China with several important developments to take note of, we start by looking at the comments by the central bank governor Zhou Xiaochuan, who said that China has no plans to change the rate of appreciation of its currency in spite of calls to accelerate the process. The comments, made on the sidelines of the G20 meeting over the weekend, articulated that China will stick to its plan for a gradual internationalization of its currency saying there has been no change to its strategy. Zhou was cited as saying “the topic is quite complicated and we have no new announcements so far” offering no hints of changes to the pace of appreciation. The comments by the central bank governor are certainly not a surprise to us and Zhou certainly towed the line, but in light of other recent actions by the central bank and China’s general push in the direction of internationalizing the yuan we had been hopeful for a little more from the governor.

China’s push for international acceptance of the yuan has expanded in recent weeks to embrace three, synchronized steps: currency outflow to overseas investments, offsure yuan market in Hong Kong and backflows of yuan to China as foreign investment. The central bank, which is leading the governments’ go-global campaign, expanded a pilot program for yuan-based settlement for cross-border trade in January with the release of a related measure covering foreign direct investments by Chinese companies. And, in anticipation of the third go-global step, which is still said to be in the planning stage, a source close to the development said research is being conducted for a program that would allow yuan-denominated investment in China by foreign firms to facilitate currency back-flow. The source also said that research has involved various government ministries ranging from the Ministry of Finance to the State Administration for Industry and Commerce, noting that in the best case scenario the government’s back-flow policy could be ready in six months. Overseas investors are sure to be pleased by the direction that the central bank is moving in as it would simplify what’s now a complex currency exchange process. Also, further availability of the yuan is likely to please many since the yuan now is in short supply and there are few channels for foreign investors to access yuan funds. The central bank’s decision to expand the trade settlement project while adding the anti-speculator step and studying back-flow policy came after China’s annual quota for yuan conversions for cross-border trade settlements assigned to the Bank of China-Hong Kong was suddenly exhausted last October. Immediately after that incident, officials from the Hong Kong Monetary Authority (HKMA) met with counterparts at the central bank and China Securities Regulatory Commission and decided to step up activities encouraging overseas markets for the yuan and further promote the offsure yuan market in Hong Kong. Considering these developments in recent weeks the PBoC governor’s comments (above) on the sidelines of the G20 sent mixed messages about the central bank’s policy regarding the internationalization of the yuan, we will therefore follow the age old phrase; actions speak louder than words and trust the actions taken by the central bank rather than a regurgitated party line.

Moving on, China’s manufacturing sector slipped to a seven-month low in February , though activity remains expansionary, according to a flash reading of manufacturing PMI, which stood at 51.5 down from 54.5 in January (any reading about 50 is expansionary). In a statement released by HSBC and Markit, who conducted the survey, they said “flash PMI data points to a meaningful slowdown in the industrial sector in February, the Chinese New Year may be a factor but not the only reason. It also implies that quantative tightening is starting to filter through yet more still needs to be done to check inflation”. The implications of this statement could be rather dire, we have mentioned in this report repeatedly that Beijing has a very difficult task of tamping down inflationary pressure without overstepping their bounds and affecting growth too much. While it has been made known that Beijing is no longer focused exclusively on maintaining white-hot growth and dealing with inflation has become a priority there is a fear that measures enacted to tackle inflation will be draconian in nature and will slow growth too sharply creating a ripple effect across the global economy. The other option, of not tackling inflation effectively enough, has rather severe implications for the Chinese economy too. Therefore, we will continue to watch the actions of the administration carefully and hope that they manage to walk the fine line between rampant inflation and a hard landing for the economy. Growth is already forecast to be lower than the average of 9.5% over the last decade moderating to 8.1% annually. While the probability of growth in China slowing to below 5% a year, often cited as a doomsday scenario, is still relatively remote, Morgan Stanley said in a report last week that “overly aggressive tightening of monetary policy” could be a potential factor to derail China’s growth.

Finally, talking of aggressive tightening, the central late last Friday hiked the reserve ratio requirement (RRR) for banks by 0.5% bringing the officials RRR to a record 19.5% for bid banks. This was the second RRR hike of 2011 and comes just a week after the central bank raised the key interest rate by 0.25%. The hike will drain about 350 billion yuan ($53.24 billon) from the banking system, according to estimates by Bank of America-Merrill Lynch.

USDJPY: Bounce Hinted Ahead

2011-02-23T06:02:00.000-08:00

USDJPY put in a Bearish Engulfing candlestick pattern below the 84.00 figure and pushed lower, with prices now testing support at the 50% Fibonacci retracement of the 2/4-2/16 upswing (82.55). The barrier is reinforced by a falling trend line connecting recent lows, hinting this are may prove to be a reasonable place for a rebound. With that said, an actionable trade setup remains elusive and I will stay on the sidelines for now. Initial resistance lines up at 82.89, the 38.2% Fib.

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Bank of England Minutes Show's BoE Dale Joins in Call for Rate Hike

2011-02-23T06:01:00.002-08:00

Bank of England policy maker Spencer dale joined Sentence and Weale in voting for a interest-rate hike this month as members said that case for a tighter monetary policy had “grown in strength”. The minutes showed that “for three members, the case for removing some monetary stimulus at this meeting was compelling”. While Dale and Weale voted for a 25bp increase in the key rate off record lows at 0.50%, Sentence increased his call to a 50bp increase while Adam Posen maintained his vote to add 50 billion pounds to the bank’s asset purchase plan.

The more hawkish outcome of the minutes led the pound to rally against the dollar climbing just above 1.6270 but was unable to make any assault on the recent range highs at 1.6300. While sterling bulls driven by interest hike speculation have been in firm control for most of February but there are some clouds brewing on the horizon as public sector job cuts are expected to take their toll on consumer spending along with the higher VAT rate which was introduced in January. Therefore, unless bulls can press the Gbp/Usd pair higher through resistance at 1.6300 we may see this pair topping out and making a measured move lower as concern for UK fundamentals takes control of the market. However, we may well see that market players ignore some of the UK fundamentals and keep the pound relatively well bid since the Bank of England is widely expected to hike rates ahead of the ECB, Fed and certainly BoJ.

source,... yahoo

GBP/USD Remains Bullish

2011-02-23T06:01:00.000-08:00

Thomas Long, On Wednesday February 23, 2011, 8:09 am

The GBP/USD appears poised to move up to test the 1.6300 level.

The GBP continues to climb as traders believe that the Bank of England may be leaning towards raising interest rates at some point in the near future. The move up off of the late May low continues with the pair moving up towards the early November high of 1.6298. I would continue to look for buys as long as the pair remains above the 1.57497 low noted on the chart.

DailyFX provides forex news on the economic reports and political events that influence the currency market.

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DailyFX provides forex news on the economic reports and political events that influence the currency market. Learn currency trading with a free practice account and charts from FXCM.

Looking to Sell GBP/USD

2011-02-23T06:00:00.000-08:00

Symbol	Price	Change
GBPUSD=X	1.62	+0.01

Joel Kruger, On Wednesday February 23, 2011, 7:49 am EST

Currencies are looking pretty stretched intraday and this market is one of the most bid on the day following a more hawkish than expected Bank of England Minutes. However, at the end of the day, we don’t see any real change to policy despite the change in the vote, and we would expect to see any rallies from the news to eventually be offered should they continue into North American trade. We are well aware of the key topside resistance by 1.6300 and have therefore placed our entry above the figure in the event that we see some stop hunting above the figure. If the level is taken out and stops are cleared above 1.6300, we don’t at that point see rallies extending much further and will then look to get involved. At that point, hourly studies will be well overbought and the ATR will have been exceeded by a significant margin. STRATEGY: SELL @1.6330 FOR AN OPEN OBJECTIVE; STOP 1.6430. RECOMMENDATION TO BE REMOVED IF NOT TRIGGERED BY NY CLOSE (5PM ET) ON WEDNESDAY.

source ,.. yahoo

BOE Minutes Produce More Hawkish Result; But No Real Policy Change

2011-02-23T05:59:00.000-08:00

We will be looking for an opportunity to fade any excessive rallies in Cable today, with the market eyeing a break above key topside barriers at 1.6300…

Currencies have managed to stabilize and regain their footing after getting obliterated in early Tuesday trade on the back of some elevated risk concerns and country specific setbacks. The biggest setback of all was the earthquake in New Zealand, with the New Zealand Dollar dropping by over 2% on the day against the buck and only managing to consolidate its losses when other markets began to recover in North American trade. RBNZ Governor Bollard was out on the wires on Wednesday reassuring locals that the central bank was monitoring financial markets to ensure stability and that the central bank was ready and able to meet any requirements for cash by the banks. Market chatter of an emergency meeting to lower rates in response to the earthquake proved unsubstantiated to this point.

Relative Performance Versus USD Wednesday (As of 12:30GMT)

GBP +0.73%
EUR +0.62%
AUD +0.51%
CAD +0.17%
NZD +0.12%
CHF +0.12%
JPY -0.05%

Meanwhile, the Euro has put in a most impressive recovery rally after totally negating a near 200 point drop in a matter of hours to once again threaten a break of some key range resistance at 1.3745. The rally was initially brought on by some hawkish ECB Mersch comments, who warned that the ECB could be looking to shift to a more restrictive policy going forward. The Euro has also been able to shrug off lower global equities and ongoing geopolitical concerns with the violence in North Africa seemingly taking a backseat for now. Libya has most recently declared force majeure on oil exports of 1.5M barrels a day. However, markets have found comfort in the fact that OPEC would be willing to boost oil production if Libya’s oil exports were to actually stop.

Elsewhere, the Bank of England minutes released showed a 5-3-1 split among monetary policy members with Dale joining Sentance and Weale in calling for an immediate rate hike. The Minutes were definitely more on the hawkish side and Sentance even raised his call to a 50bp hike from 25bp previously. Adam Posen the ultra dove maintained his vote for a 50 billion pound extension to the central banks’ asset purchase plan. The shift that is taking place on the MPC reveals a desire by the Bank of England to gradually move towards a less accommodative stance on monetary policy, but at the end of the day, we have still seen no official shift in policy despite the change in vote. The pound caught an initial bid after the more hawkish minutes but was unable to make an assault on key range highs at 1.6300 in European trade. We have a sell order in place should Cable break above 1.6300 (see below).

Other data this morning failed to materially effect price action with French and Italian CPI data coming in slightly softer than forecast, Swiss producer & import prices meeting consensus forecasts and Euro-zone industrial new orders coming in much better than estimates. In the UK, Loans for House Purchase missed expectations, but a healthy upward revision to December’s numbers mitigated any negative reaction.

Looking ahead, US Existing Home Sales (-1.1% expected) at 15:00GMT is the only important release in the North American session. There are however two speeches to watch carefully, with Kanasas City Fed’s Hoenig and Fed’s Plosser speaking on the topic of the economy and the economic outlook at 17:30GMT and 18:30GMT respectively. US equities have recovered and are now pointing to a higher open after notching up the biggest one-day loss in 2011 on Tuesday. Both oil and gold are well bid going into the North American session extending hefty gains from the previous trading day.

TECHNICAL OUTLOOK

EUR/USD:The sharp upside reversal on Tuesday certainly threatens short-term bearish prospects, with the market now looking to establish back above 1.3700. Key resistance comes in by 1.3745 and a break and close above this level will completely negate bearish outlook and open the door for a more significant rally over the coming sessions. However, inability to establish above 1.3700, will once again put the focus back on the downside and expose a retest of 1.3425 further down. In the interim, we remain sidelined and will wait for a clearer signal.

USD/JPY: The market continues to remain extremely well bid on dips, with the latest surge back above 83.00 really encouraging longer-term recovery prospects and opening the door for a potential break of key topside resistance by 84.50 over the coming days. Longer-term cyclical studies certainly suggest that the market could be poised for a major bullish reversal and we would look for a break and weekly close back above 84.50 to help confirm outlook. Any dips from here should be well supported above 82.00 on a close basis, while only a break and close back below 82.00 would concern.

TRADE OF THE DAY

GBP/USD: Currencies are looking pretty stretched intraday and this market is one of the most bid on the day following a more hawkish than expected Bank of England Minutes. However, at the end of the day, we don’t see any real change to policy despite the change in the vote, and we would expect to see any rallies from the news to eventually be offered should they continue into North American trade. We are well aware of the key topside resistance by 1.6300 and have therefore placed our entry above the figure in the event that we see some stop hunting above the figure. If the level is taken out and stops are cleared above 1.6300, we don’t at that point see rallies extending much further and will then look to get involved. At that point, hourly studies will be well overbought and the ATR will have been exceeded by a significant margin. STRATEGY: SELL @1.6330 FOR AN OPEN OBJECTIVE; STOP 1.6430. RECOMMENDATION TO BE REMOVED IF NOT TRIGGERED BY NY CLOSE (5PM ET) ON WEDNESDAY.

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Canadian companies scale back Libya presence

2011-02-22T01:09:00.000-08:00

Labourers work at the site of the new Tripoli International Airport last year. Reports on Monday say foreign firms are withdrawing their workers from the volatile country. (Ismail Zitouny/Reuters)

Canadian companies are keeping a watchful eye on the unfolding chaos in Libya, and there are reports that some employees are being escorted out of the country for their own safety.
Oil and gas titan Suncor Energy Inc. and engineering firm SNC-Lavalin Group Inc. are two of the largest Canadian-based companies with operations in the region.
"Some work on certain projects is temporarily suspended," a spokesman for SNC-Lavalin said. "All [projects] remain under supervision, and we will continue to monitor the situation to determine next steps."
"The health and safety of our employees, as always, remains our primary concern," the company said.

'Petro-Canada has decided a few hours ago that they're evacuating us.' —Elizabeth Atkinson, geophysicist

SNC-Lavalin operates numerous infrastructure projects in the country, including airports and water facilities.
CBC News has also learned that Winnipeg native Elizabeth Atkinson, a geophysicist for Suncor stationed in Tripoli, has been removed from her work site along with her colleagues for safety reasons.
"Things have changed quite a bit," she told her family in a voicemail message. "Petro-Canada has decided a few hours ago that they're evacuating us."
Petro-Canada was merged with Suncor in a $43-billion deal in March 2009.
"We are ensconced in an ex-pat compound. We're no longer living out in the community," Atkinson said.

500 Canadians in Libya

"In the interest of the safety and security of our people, we do not provide details or status commentary on contingency plans," Calgary-based Suncor spokesman Brad Bellows said.
"Suncor has contingency plans to ensure the safety of our staff in all countries and regions in which we operate. This obviously includes Libya, where we are [monitoring] and responding to events."
Other foreign firms have already started an exodus. Anglo-Dutch energy titan Shell PLC is in the process of evacuating several dozen employees from its lone exploratory gas drilling site in the country. Multinational rival BP said it is "very likely" to do the same thing in the coming days.
A gold seller talks to the photographer as she waits for customers at the old city in Tripoli. The country was on the brink of civil war Monday. (Zohra Bensemra/Reuters) Libya is a major player in the energy industry. With 44 billion barrels of proven or probable reserves, it is Africa's largest oil producer. The country earns more than $46 billion a year from oil, which makes up 95 per cent of Libyan exports.
Crude oil prices were sharply higher on Monday due to the volatility.
European benchmark Brent crude hit a three-year high of $105.28 US a barrel, up $2.70 on the day. The comparable North American benchmark, the March light, sweet crude contract, was as much as $5.10 US higher to $91.30 before retreating.
Canadian Foreign Affairs Minister Lawrence Cannon said there are an estimated 500 Canadians in Libya and about 350 have registered with the Canadian Embassy in Tripoli. He said about 50 are working for Canadian energy firms.
Cannon said there are no immediate plans for a government evacuation of Canadians from the country.

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Wall Street looking to Wal-Mart

2011-02-22T00:44:00.001-08:00

Click the chart for more market data. By Ken Sweet, contributing writerFebruary 21, 2011: 10:34 AM ET

NEW YORK (CNNMoney) -- With the G-20 conference wrapped up, investors this week will turn their attention to the all-important U.S. consumer -- as reports show how much they've been buying and how optimistic they are.
As Wal-Mart, Target and other retail giants report quarterly earnings this holiday-shortened week, investors will be closely watching to see how much Americans opened their wallets over the holiday shopping season and how the economy is faring.
If the big retailers disappoint, stocks could head downward, said Kevin Mahn, chief investment officer with Hennion & Walsh.
"I think we're well on our way in the economic recovery, but we need to see if those Americans who held jobs throughout the recession have stopped saving and started spending," said Mahn.
On the agenda
Monday: U.S. markets are closed in observance of the Presidents Day holiday. No economic or company earnings reports are scheduled to be released.

Tuesday: A flurry of retail earnings are due before the market open. Dow members Wal-Mart (WMT, Fortune 500) and Home Depot (HD, Fortune 500) are expected to post modest gains from a year ago, with analysts forecasting $1.31 a share for the world's biggest retailer and 31 cents a share for the home-improvement chain.
Bookseller Barnes & Noble (BKS, Fortune 500) and department-store chain Macy's (M, Fortune 500) also will report.
Wall Street will get a gauge on the real estate market when Case-Shiller releases its home price index at 9 am ET.
The Conference Board will release its February consumer confidence report at 10 am ET. Economists expect it to rise slightly from January, to 67.0.
Hewlett-Packard (HPQ, Fortune 500) will report its earnings after the closing bell.
Wednesday: Before the opening bell, Home Depot rival Lowe's (LOW, Fortune 500), luxury homebuilder Toll Brothers (TOL) and department store Saks (SKS) are scheduled to report.
Next the spotlight turns to real estate, as the National Association of Realtors releases existing home sales numbers for January at 10 am. Existing home sales are expected to slip slightly, to 5.23 million units on an annualized basis.
Thursday: Weekly initial jobless claims will be released at 8:30 am, and are expected to be unchanged at 410,000. The Census Department's report on durable goods orders is due at the same time; orders are forecasted to rise 3%.
Earnings from Target (TGT, Fortune 500) and department store Kohl's (KSS, Fortune 500) are due before Thursday's opening bell. Analysts are looking for Target to post a profit of $1.40 per share, according to Briefing.com.
The Commerce Department issues its new home sales report at 10 am.
Friday: Wall Street will get a second reading on the U.S.'s fourth-quarter gross domestic product Friday. Economists expect GDP to come in slightly higher at 3.3% growth.
A final read of February's University of Michigan consumer sentiment survey also is on the docket. The index is expected to remain unchanged at 75.1.
JC Penney (JCP, Fortune 500) rounds out the retail-heavy week when it releases its quarterly results before the market open. Analysts are looking for the department store chain to earn $1.08 a share.

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Forex Market Trading

2011-02-22T00:42:00.002-08:00

For all those who are not exactly experts when it comes to forex market trading, the first thing to understand is that it is not the same thing as stock market trading. Forex trading and stock trading are two entirely different concepts.
Different kinds of securities are traded in stock markets and forex markets and under very different market conditions too. The forex market deals in the trade of foreign currencies whereas the stock market deals with trade of stocks and shares. This is probably the most important distinction between the two different kinds of trading.
The term forex defines foreign exchange. It is to be understood that the forex market is a platform where the activity of forex market trading is undertaken. The players involved are investors who try to make profits by speculating on the rise or fall of the value of different currencies from all parts of the world.
There is no limit to the forex depth of market trading and your success in this field is defined by your experience. Most forex investors are experienced enough to know how to extract profits for themselves by maneuvering of the rise or fall of value of currencies in the market in their favor.
All investors, old or new should be aware of the forex depth of market trading. It is the only way to make a success out of your career as a forex trading investor. All forex trading investors should know very well that, like any other market trading, this type of investment also involves two actions, namely, purchasing and selling of currencies.
As a trader you can choose to purchase or sell any currency amongst hundreds of options. But most regular traders stick to some popular currencies such as GBP, EUR, USD, CAD, JPY, AUD and CHF.
The usual strategy adopted by investors involved in forex market trading is to use one currency as the base and then use to compare with other currencies to find out the comparative values. This is a very effective method for newcomers in this line to understand the workings behind the frequent rise and fall of different currency values in a given day.
Thus, if you are looking to learn how to increase your forex trading profits, you will have to increase your investment and try to involve other major currencies as the base in your trading cycle.
Once this is accomplished, the prices of currencies that are not your preferred base currencies can be compared with the price of your base currencies. This is why it is very important to have detailed knowledge about the forex depth of market trading.
But though this sounds easy to follow, it has to be remembered that keeping track of various currencies, their charts and their trading prices can turn out to be quite a difficult task.
That is why several newcomers and even seasoned traders prefer to take the help of certain automated forex software to keep track of their forex market trading business. Such software helps to keep tabs on the frequent fluctuations in the forex pricing.
In fact, a good forex trading software can also make out if a new price trend is emerging and can let the trader know in advance so that he or she can make the trade at the most profitable time. It is always best to get as much information as you can on forex depth of market trading before actually starting out as an investor in this business.

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Free Forex Trading Tip - Forex Global Trading Tips For The Forex Currency Trading System

2011-02-22T00:42:00.000-08:00

As the Forex global currency trading system has the highest volatility of any investment market today, it's absolutely vital that you get access to as many Forex global trading tips to fast track your Forex education and to lock in faster Forex profits. This article will reveal free Forex global trading tips for the volatile Forex currency trading market.
The beauty of the internet is that Forex global traders can now go online pretty much anywhere in the world at any time of day or night and get access to free Forex trading tips. With the right Forex currency trading system, Forex traders can reap large profits with Forex global trading.
There are some qualities that a Forex trader should have to become the best Forex trader he or she can be and to lock in faster Forex profits.
It is absolutely vital that you use proven strategies when buying or selling in the Forex global currency trading system. The best way of achieving this is by consulting reputable Forex charts and graphs that are known to be proven indicators and pivot points to follow when investing in Forex global trading.
Contrary to stock trading, as the global Forex market trades in every currency there is never a threat of insider trading. What separates a successful Forex trader and a consistent Forex loser is the level of their Forex trading education and the fundamentals that they follow in their individual Forex currency trading system.
The more that you can educate yourself about the currencies you are trading in the global Forex market the more accurately you will be able to predict the way these currencies will move and the more profits you will be able to reap.
The most savvy Forex traders understand that the best Forex currency trading system is the one that they have perfected and stuck to, with no exceptions. By creating your very own individual Forex currency trading system and sticking to it you will be virtually able to put your Forex global trades on autopilot as you simply follow the Forex currency trading system that you have already created and that has been proven to work.
Margin trading is a very easy way for Forex beginners to lose their money fast. Don't even venture into this Forex currency trading system until you have perfected your own strategies and know exactly what you are doing.
Forex currency trading is not risk free. It is critical that you bear in mind the volatility of the Forex global currency market in combination with what is going on politically and economically in many countries around the world.
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Forex Futures Trading and Spot Forex Trading

2011-02-22T00:27:00.000-08:00

Many people are interested in both Forex futures trading and spot Forex trading and want to know whether the two are pretty much the same thing or whether they are very different. Both Forex futures trading and spot Forex trading are highly popular Forex trading strategies that are used by millions of Forex traders on a daily basis. Both methods are very similar but there are some important differences that any Forex trader should know about when deciding on a particular method.
Forex futures are essentially about the establishment of a futures contract between two parties that obligates both parties to a trade of a currency pair at some point in the future. The price point is set beforehand, and the seller can own the currency once the actual future is written, or they may have a chance at risking the currency pair in hope that it will be cheaper at some point before what is called the settlement date.
Spot Forex is a pretty much the same thing as futures except that with spot fx the actual trade of the currency happens right at the point of trade or at a short time there after. The price point is determined at the point of trade as well and this is not much different than with Forex futures. The actual physical exchange of currency doesn't happen right away with futures as it does with spot, and the exchange instead happens on what is called the delivery date, which is typically a date set in the near future.

Both Forex futures and spot Forex are very similar and in essence the primary difference is when the actual currency exchange takes place. Both can be used to leverage future predictions with market trends and both can be used with success by any knowledgeable Forex trader. Some have argued that with Forex futures the trader is simply speculating with their futures transactions and will hardly ever close out their positions before the appropriate settlement date. This is definitely true to a point because the majority of Forex futures contacts do not last until the official date of delivery due to premature settling by traders. In the end I think I prefer spot fx because of its more sturdy grounding in reality although I know people who do well with futures so it is up to you whether you prefer the levity of futures or the solidarity of spot.

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Oil surges 6% as Libya tension intensifies

2011-02-22T00:21:00.000-08:00

Click chart for oil and other commodities prices By Ben Rooney, staff reporterFebruary 21, 2011: 5:19 PM ET

NEW YORK (CNNMoney) -- Oil prices surged more than 6% Monday as antigovernment protests in the Middle East and Africa intensified, raising worries about possible supply disruptions.
Crude oil for April delivery gained $5.69, or 6.3%, to $95.40 a barrel.

U.S. oil prices have been trading in a range between $88 and $95 a barrel since the start of the year but prices have been much higher in other parts of the world.
Brent crude, the benchmark European oil standard, hit a 2-1/2-year high of $105 a barrel before retreating slightly to settle at $102.52 a barrel. An overhang of supply has been keeping U.S. prices on the low side ... for now.
"All eyes are on the Middle East and North Africa crisis regarding potential disruptions in oil exports that could drive crude oil prices even higher," Myrto Sokou, an analyst at Sucden Financial, wrote in a research report.
Monday's spike follows violent clashes in Libya over the weekend that were spurred, at least in part, by angst over high unemployment. The unrest has left at least 233 people dead in Libya, according to Human Rights Watch.
Tensions remained high in the North African nation Monday, albeit a far cry from the tumult seen Sunday, when the violence and chaos came to Libyan leader Moammar Gadhafi's doorstep Tripoli, Libya's capital, for the first time.

BP confirmed Monday that it is preparing to evacuate about 140 families and non-essential staff from Tripoli. The oil company said none of its operations were impacted ... yet. But it has suspended preparations for a drilling project in Libya's western desert.
Shell Oil said it closed its Tripoli office, but employees are able to work from home. So far, only dependants of its expatriate staff have been relocated out of the country. "We continue to monitor the situation very closely," said Shell spokesman David Williams.

Here comes $4 gasoline

Libya produces 1.6 million barrels of oil a day, according to the U.S. Energy Information Administration.
By contrast, Russia produces 10.1 million barrels per day, while the United States produces 9.8 and Saudi Arabia, currently observing OPEC production quotas, produces 8.57 million barrels per day. Those numbers include oil from ethanol, natural gas liquids and other products.
The world consumes 87.5 million barrels of oil day. But the balance between what it produces and what it consumes is, as always, tight -- which makes Libya's 1.6 million barrels a day important.
"As long as the situation in this key oil-production region of the Middle East and North Africa remains so volatile, expect prices for the commodity to remain supported," said Ilya Spivak, an analyst at DailyFX, in a research report.
Gold prices also rose as investors sought the perceived safety of precious metals. April gold was up $14.30, or 1%, to $1,402.90 an ounce. Silver also jumped, rising 3.5% to $33.42 an ounce.
The unrest in Libya is part of a wave of protests across the region that started in Tunisia earlier this year and spread to Egypt, where antigovernment protesters toppled the regime of Hosni Mubarak earlier this month.

Unrest in the Middle East and North Africa -- country by country

Protests have been reported in other North African nations, including Morocco and Algeria.
Governments in Yemen and Iraq have also been challenged.
In Bahrain, a small island country next to oil rich Saudi Arabia, about 10 protesters are thought to have died in five days of protests, but opposition activists say dozens more are unaccounted for.
Iran, one of the world's largest oil producers, has seen a renewal of the opposition that has simmered since the country's 2009 election, when hundreds of thousands of people filled Tehran streets to denounce the re-election of President Mahmoud Ahmadinejad.
Oil prices jumped last week amid reports that Iran was moving warships through the Suez Canal on their way to Syria.
The Suez Canal, located between Asia and Africa, is a key passageway for international trade. Millions of barrels of oil move through it every day on the way to both Europe and North America.
The unrest is expected to be a topic of discussion at Tuesday's meeting of the International Energy Forum, a gathering of global energy ministers, in Saudi Arabia.
Meanwhile, stock markets in Europe were also under pressure. The DAX in Germany and the CAC 40 in Paris both fell 1.4%, while the FTSE 100 in London slid 1.1%.
Asian stocks ended mixed. The Heng Seng in Hong Kong fell 0.5%, while the Shanghai composite jumped 1.1%. The Nikkei in Japan closed about 0.1% higher.
Markets in the United States were closed Monday for the Presidents' day holiday.
-- The CNN Wire Service contributed to this report.

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Washington Boils With Arguments Over Government Shutdown

2011-02-22T00:19:00.001-08:00

Senior U.S. Senate Democrats slammed Republicans on Sunday for a "reckless" threat to shut down the government as political posturing intensified on both sides over federal spending and the budget deficit.
The House approved legislation on Saturday to cut federal spending by $61 billion through September. But the bill, pushed through by Republicans, was sure to be significantly changed by President Barack Obama and his fellow Democrats in the Senate.
"Unfortunately Speaker Boehner seems to be on a course that would inevitably lead to a shutdown. ... That's reckless," said Democratic Senator Charles Schumer on CNN'S State of the Union program, speaking of House Speaker John Boehner, the top Republican in Congress.
"We have said shutdown is off the table. ... Boehner, Mitch McConnell, other Republican leaders have not taken it off the table when asked, and there are lots of people on the hard right clamoring for a shutdown."
With the U.S. government funded only through March 4, some lawmakers from both parties are urging compromise, which was seen as the likeliest outcome, even by one of the House's new breed of small-government, deficit-slashing freshman Republicans.

"When it goes to the Senate, they're going to make their changes and then it's got to go to the president. So you know, it will not be in the form that we produced yesterday morning at 5 a.m.," Representative Steve Southerland, a first-term Republican from Florida, said on ABC's This Week news program.
The House bill is a challenge to Obama to tackle record budget deficits seen at hitting $1.6 trillion this year. If there is no compromise, it sets up the possibility of a government shutdown, something Boehner has not ruled out.
PROGRAMS SPARED
But Southerland said on ABC's This Week: "We have no desire to have a government shutdown. I think that Speaker Boehner has been very, very clear."
The bill approved early Saturday morning would slash spending on many domestic programs by 14 percent but leave untouched major programs such as the Medicare and Medicaid healthcare programs for the elderly and poor and the Social Security pension program.
The House vote was seen as a victory for Tea Party conservatives elected in November.
Obama has outlined his own plan for less-severe spending cuts in 2012, and has warned that tightening the belt too much too soon could harm the slow economic recovery.
Democratic Senator Claire McCaskill said her party knows that cuts must be made. "The question is, what are the priorities here?" she said on Fox News Sunday.
"Are we going to take a weed whacker to education funding in this country while we let millionaires continue to deduct interest on their second home? That doesn't seem to be the right priority ... I'm a little worried that the Republicans in the House are so anxious to threaten shutting down the government."

© 2010 Thomson/Reuters. All rights reserved.

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U.S. oil prices don't matter at the pump

2011-02-22T00:18:00.000-08:00

Even though a glut in supply has kept U.S. oil prices down, U.S. motorists won't be spared at the pump. Global prices have surged, and that's the price that counts. By Steve Hargreaves, senior writerFebruary 21, 2011: 5:17 PM ET

NEW YORK (CNNMoney) -- U.S. oil prices remain relatively low compared to the rest of the world, but that doesn't mean American motorists are getting a break at the gas station.
Gasoline prices in the United States have jumped 5 cents in just a week, according to AAA.
The gasoline Americans buy is made not just with U.S. supplies but mainly with oil from around the globe, and that fuel is surging in price.
Since a protester lit himself on fire in Tunisia at the end of December, sparking revolts across North Africa and the Middle East, global oil prices have jumped. Brent crude, pegged to oil prices in the North Sea, is up over 12%.

Oil surges 6% as Libya tension intensifies

Meanwhile New York Mercantile Exchange prices have risen 6%, with most of that coming on Monday.
The 39 different oil contracts tracked globally by the U.S. Energy Information Administration are up almost 8% from the end of December until February 11, the most recent survey date.
"NYMEX is an artificial marker," said Stephen Schork, publisher of the industry newsletter the Schork Report. "It bears no resemblance to global fundamentals."
The benchmark NYMEX oil contract -- the one quoted in most media reports -- is known as West Texas Intermediate.
WTI is pegged to the price of oil in Cushing, Oak., a small town in the northeast of the state that's home to the junction of several oil pipelines and dozens of tank farms.
In Cushing, there's currently an oversupply of crude.
Oil production from Canada's oil sands and North Dakota's Bakken shale formations has surged. Most of this oil is sent to Cushing.
But pipelines out of Cushing to refineries along the Gulf Coast can't handle all the excess oil.
"What is needed is a way to get oil out," Adam Sieminski, chief energy economist at Deutsche Bank, wrote in a recent research note.
Adding to the glut, refineries in the area have been down for maintenance, and the cheap price is giving traders an incentive to store even more oil in Cushing, hoping prices will rise and they can sell it at a profit in the future.
New pipelines are in the works, but they will take many months, if not years to build.
Plus, West Texas Intermediate is just a tiny percentage of all oil traded globally, and much of it is used in the Midwest.
In the North East, a gallon of gas may not contain a single drop of WTI oil, said Schork.
Although "U.S. oil prices" generally mean WTI prices, in reality there are many U.S. oil prices. Many of these other contracts have risen in lockstep with world prices, pushing gasoline prices higher.
Spot prices for Louisiana Light Sweet, a contract pegged to oil in St. James, La., closed Friday at over $105 a barrel. Spot prices for WTI, on the other hand, are around $90 a barrel.
WTI prices are about $10 below prices globally, said Tom Kloza, chief oil analyst at the Oil Price Information Service. Gas prices, he said, are about 25 cents a gallon higher than where the WTI price suggests they should be.
"It's a broken benchmark," said Kloza. "Pay no attention to the WTI price when you wake up in the morning."

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Ford Said to Narrow Volvo Sale Talks to China’s Geely (Update2)

2009-10-28T04:26:00.000-07:00

By Keith Naughton and Cathy Chan

Oct. 28 (Bloomberg) -- Ford Motor Co. narrowed talks on the sale of its Volvo Car unit to one bidder, China’s Geely Holding Group Co., according to two people familiar with the matter.
The negotiations with Geely are progressing, said the people, who asked not to be identified before an announcement is made later today. Ford hasn’t resolved concerns about protecting intellectual property, one of the people said.
Talks involving Ford Chief Financial Officer Lewis Booth in London last week yielded significant progress in reaching a deal to sell the Swedish unit, the people said. Dearborn, Michigan- based Ford, the only major U.S. automaker to avoid bankruptcy, is shedding its international luxury lines to focus on its namesake brand as Chief Executive Officer Alan Mulally aims to return the company to profitability by 2011.

“Volvo is completely integrated into Ford’s product development strategy,” Michael Robinet, a CSM Worldwide analyst in Northville, Michigan, said Oct. 20. “This is akin to selling a room on your house. You can’t separate it easily.”
Ford spokesman Mark Truby declined to comment. Lawrence Ang, an executive director at Geely Automobile Holdings Ltd., Geely’s Hong Kong-listed unit, didn’t answer a call to his mobile phone.
Geely, China’s largest private automaker, is prepared to pay about $2 billion for Volvo, less than a third of what Ford paid a decade ago, people familiar with the talks have said.
Jaguar, Land Rover
Ford put Volvo on the block in December. It sold the Jaguar and Land Rover brands in the U.K. to India’s Tata Motors Ltd. last year for $2.4 billion.
Geely first approached Ford about buying Volvo in the summer of 2008, people familiar with the matter had said, and the Chinese company emerged as the frontrunner. Ford also talked to Beijing Automotive Industry Holding Co. and the Crown Group, led by former Ford director Michael Dingman, son James Dingman and Shamel Rushwin, a former manufacturing and labor executive at the automaker, the people had said.
Ford had considered keeping the Swedish unit, whose losses are narrowing and sales are improving, people familiar with the situation had said. With Volvo’s prospects improving, Ford thought it may get a better bid for the luxury line when the economy improves, the people said.
Any buyer would gain insight into Ford’s future products, which will still share Volvo technology and mechanical vehicle designs, the people said. Ford will continue to provide engines and other major components to Volvo after it’s sold, which is why the intellectual property issues need to be resolved.
Konsortium Jakob
Volvo’s U.S. sales rose 16 percent in September, bucking the 23 percent drop in the auto market. Year-to-date sales fell 22 percent through last month, compared with an industrywide decline of 27 percent. Volvo is trimming costs and improving performance after a $231 million second-quarter pretax loss.
Konsortium Jakob AB, the Swedish investor group that also wants to buy Volvo, will not abandon its bid, Jakob founder Magnus Sundemo said today. Sundemo, who is also head of the engineers’ union at Volvo, said that suppliers were concerned that Volvo’s technology may be abused by Geely.
“We’re not giving up,” he said in a phone interview.source http://www.bloomberg.com

Forex Trading Methods - Scalping

2009-10-26T02:47:00.001-07:00

What is Forex Scalping?

Forex scalping is the art of using high leverage and a large number of short term trades to steadily increase an account. Usually, only 1 to 5 pips are targeted for each trade. This type of trading appeals greatly to day traders and those looking to minimize the risk involved in trading currencies. Next to money management, “risk control” is the single most important trait to a surviving (and thriving) currency trader. The small amount of time that is spent in the market limits much of the risk in exposure in comparison to a longer term system. Also, the freedom involved in a speedy Forex scalping system in such a liquid market is a “magnet” that drives many traders from other markets to try their hand in currency. A disciplined and steady scalper could seamlessly double or triple an account, and spend only a fraction of the time in the market as a common day trader.

Forex Scalping - The Problem

Though Forex scalping may seem like a preverbal “holy grail” at first glance, there are still many unseen hurdles that surround the controversial method of trading. If you do wish to add scalping to your trading toolbox, it is extremely important to pick a broker who can support a scalpers’ system. You will quickly find that many brokers do not allow scalp trading, as the method of quickly entering and exiting trades may actually cause the broker to lose money at the dealing desk. Forex scalping also does not give the broker a means to trade against their clients which is a way of money making for them. Out of the hundreds of online Forex brokers, only a handful support scalping. It is a very thin line between scalping and short term trading. Generally if you hold trades for a minute or less, you may have problems with brokers. They could warn you and then if you continue shut down your account. However, if you trade in minutes or more, most likely you will not have problems with dealing desk brokers. Non dealing desk (ECN) brokers allow scalping where you can hold a position for seconds however the minimum to open an account is higher ($2,000 and above).

Forex Scalping Strategy

Effective Forex scalping strategies take advantage of extremely slight price fluctuations (sometimes only 1-3 pips) many times in order to steadily build an account. Because of the smaller number of pips gained per trade, larger than normal leverages play a key role in a successful Forex scalping strategy. By leveraging much more than a standard day trader in a liquid environment, a very skilled scalp trader is able to make just as much money as the day trader in a shorter period of time. However, this is an obvious double-edged sword. The market can just as easily move against you on a high leverage, which could produce substantial blows to your account.

Also, it is important to take into consideration the physical and mental speed of a trader who will only stay in the market for seconds to minutes. Executing a scalping strategy by hand can be extremely difficult considering the quick amount of time you must be in and out of the market for your strategy to be affective. Many successful Forex scalping strategies are built to be automated; the rules to the system are coded into a trading platform to automatically perform scalp trades around the clock. Though it is completely possible to trade a Forex scalping strategy manually, the majority of today’s traders would agree that automating the process based on a set of rules would be the best way to ensure speed and reliability. When choosing a platform to automate your scalp strategy, it is extremely important to stick with those platforms that allow the execution of your system on every tick (such as MetaTrader 4). This ensures that your entrances and exits will be on a per-tick basis, and will give you a much higher probable rate of success than those platforms who will execute your code more periodically.

To understand the full challenge of scalping as a trading style, consider this: hard work and small gains accumulated over a decent period of time could easily be wiped out with one large loss. Finding a balance between profit levels and size of acceptable losses presents the most difficult challenge to scalper’s strategy.

Forex scalping can be a good method of growing a managed Forex account quickly, but should not be looked at as the “holy grail” of trading. Most brokers do not support scalping, and a consistently profitable Forex scalping strategy can be very difficult to engineer. However, if much time and effort is spent in system optimization and setting up a good relationship with a scalp supporting broker, the benefits could be well worth the time spent.

Atricle source:-http://forex-news-help.blogspot.com/2009/03/forex-trading-methods-scalping.html

Forex Trading Methods - Day Trading

2009-10-26T02:45:00.001-07:00

What is Day Trading?

Day trading refers to the practice of buying and selling financial instruments within the same trading day such that all positions are usually closed before the market close of the trading day. This can occur in any marketplace but is most common in the foreign exchange market and stock market. Many day traders are bank or investment firm employees working as specialists in equity investment and fund management. However, with the advent of electronic trading and margin trading, day trading has become increasingly popular among casual, at home traders. Day traders utilize high amounts of leverage and short-term trading strategies to capitalize on small price movements in highly liquid stocks or currencies. They serve two critical functions in the marketplace - keeping the markets running efficiently via arbitrage and providing much of the markets' liquidity.

Trade Frequency

Although collectively called day trading, there are many styles within day trading. A day trader is actively searching for potential trading setups (that is, any stock or other financial instruments that, in the judgment of the day trader, is in a tension state, ready to accelerate in price in either direction, that when traded well has a potential for a substantial profit). The number of trades you can make per day are almost unlimited, as are the profits and losses.

Some day traders focus on very short-term trading within the trading day, in which a trade may last just a few minutes. Day traders may buy and sell many times in a trading day and may receive trading fee discounts from their broker for this trading volume.

Some day traders focus only on price momentum, others on technical patterns, and still others on an unlimited number of strategies they feel can be profitable. Some day traders exit positions before the market closes to avoid any and all unmanageable risks - negative price gaps (differences between the previous day's close and the next day's open bull price) at the open - overnight price movements against the position held. Other traders believe they should let the profits run, so it is acceptable to stay with a position after the market closes.

Day traders sometimes borrow money to trade. This is called margin trading. Since margin interests are typically only charged on overnight balances, the trader pays no fees for the margin benefit, although they still run the risk of a Margin call.

Profit and Risks

Because of the nature of financial leverage and the rapid returns that are possible, day trading can be either extremely profitable or extremely unprofitable, and high-risk profile traders can generate either huge percentage returns or huge percentage losses. Some day traders manage to earn millions per year solely by day trading.

Because of the high profits (and losses) that day trading makes possible, these traders are sometimes portrayed as "bandits" or "gamblers" by other investors. Some individuals, however, make a consistent living from day trading.
Nevertheless day trading can be very risky, especially if any of the following is present while trading:

- trading a loser's game/system rather than a game that's at least winnable,
- trading with poor discipline (ignoring your own strategy, tactics, rules),
- inadequate risk capital with the accompanying stress of having to "survive",
- incompetent money management (i.e. executing trades poorly).

The common use of buying on margin (using borrowed funds) amplifies gains and losses, such that substantial losses or gains can occur in a very short period of time. In addition, brokers usually allow bigger margins for day traders. Where overnight margins required to hold a stock position are normally 50% of the stock's value, many brokers allow pattern day trader accounts to use levels as low as 25% for intraday purchases. This means a day trader with the legal minimum $25,000 in his or her account can buy $100,000 worth of stock during the day, as long as half of those positions are exited before the market close. Because of the high risk of margin use, and of other day trading practices, a day trader will often have to exit a losing position very quickly, in order to prevent a greater, unacceptable loss, or even a disastrous loss, much larger than his or her original investment, or even larger than his or her total assets.

The Controversy

The profit potential of day trading is perhaps one of the most debated (and misunderstood) topics on Wall Street. Countless internet scams have capitalized on this confusion by promising enormous returns in a short period. Meanwhile, the media continues to promote this type of trading as a get-rich-quick scheme that always works. The truth lies somewhere in the middle. There are those who engage in this type of trading without sufficient knowledge (or some even admittedly for a gambler's high). However, there are day traders who are able to make a successful living. Many professional money managers and financial advisors shy away from day trading, arguing that in most cases the reward does not justify the risk. They often cite that no day trader is world renown, whereas icons like Warren Buffett and Peter Lynch are a testament to the success that can be attained by more traditional forms of investing. Conversely, those who do day trade insist there is profit to be made. They say the success rate is inherently lower as a result of the higher complexity and necessary risk of day trading, combined with all the related scams. Overall, the street remains divided on the issue. At the very least they agree that day trading is not for everyone and involves significant risks. Moreover, it demands an in-depth understanding of how the markets work and various strategies for profiting in the short term.

Day Trading For A Living
There are two primary divisions of professional day traders: those who work alone and/or those who work for a larger institution. Most day traders who trade for a living work for a large institution. The fact is these people have access to things individual traders could only dream of: a direct line to a dealing desk, large amounts of capital and leverage, expensive analytical software and much more. These traders are typically the ones looking for easy profits that can be made from arbitrage opportunities and news events. The resources to which they have access allow them to capitalize on these less risky day trades before individual traders can react. Individual traders often manage other people's money or simply trade with their own. Few of them have access to a dealing desk; however, they often have strong ties to a brokerage (due to the large amounts of commission spending) and access to other resources. However, the limited scope of these resources prevents them from competing directly with institutional day traders, instead, they are forced to take more risks. Individual traders typically day trade using technical analysis and swing trades, combined with some leverage, to generate adequate profits on such small price movements in highly liquid stocks.
Day trading demands access to some of the most complex financial services and instruments in the marketplace. Day traders require:
1. Access to the Trading Desk
This is usually reserved for traders working for larger institutions or those who manage large amounts of money. The dealing desk provides these traders with instantaneous order executions, which can become important, especially when sharp price movements occur. For example, when an acquisition is announced, day traders looking at merger arbitrage can get their orders in before the rest of the market, taking advantage of the price differential.
2. Multiple News Sources
In the move "Wall Street" Gordon Gekko says that 'information is the most important commodity when trading’. News provides the majority of opportunities day traders capitalize on, so it is imperative to be the first to know when something big happens. The typical trading room contains access to the Dow Jones Newswire, televisions showing CNBC and other news agencies, as well as software that constantly analyzes various other news sources for important stories.
3. Analytical Software
Trading software is an expensive necessity for most day traders. Those who rely on technical indicators or swing trades rely more on software than news.Combined these tools provide traders with an edge over the rest of the marketplace. It is easy to see why, without them, so many inexperienced traders lose money.
Techniques
The following are several basic strategies by which day traders attempt to make profits. Besides these, some day traders also use contrarian (reverse) strategies (more commonly seen in algorithmic trading) to trade specifically against irrational behavior from day traders using these approaches.

Some of these approaches require shorting stocks instead of buying them normally: the trader borrows stock from his broker and sells the borrowed stock, hoping that the price will fall and he will be able to purchase the shares at a lower price. There are several technical problems with short sales - the broker may not have shares to lend in a specific issue, some short sales can only be made if the stock price or bid has just risen (known as an "uptick"), and the broker can call for the return of its shares at any time. Some of these restrictions (in particular the uptick rule) don't apply to trades of stocks that are actually shares of an exchange-traded fund (ETF).
1. Trend Following
Trend following, a strategy used in all trading time-frames, assumes that financial instruments which have been rising steadily will continue to rise, and vice versa with falling. The trend follower buys an instrument which has been risin,g or short-sells a falling one, in the expectation that the trend will continue.
2. Contrarian Investing
Contrarian investing is a market timing strategy used in all trading time-frames. It assumes that financial instruments which have been rising steadily will reverse and start to fall, and vice versa with falling. The contrarian trader buys an instrument which has been falling, or short-sells a rising one, in the expectation that the trend will change.
3. Range Trading
Range trading is a trading style in which stocks are watched that have either been rising off a support price or falling off a resistance price. That is, every time the stock hits a high, it falls back to the low, and vice versa. Such a stock is said to be "trading in a range", which is the opposite of trending. The range trader therefore buys the stock at or near the low price, and sells (and possibly short sells) at the high. A related approach to range trading is looking for moves outside of an established range, called a breakout (price moves up) or a breakdown (price moves down), and assume that once the range has been broken prices will continue in that direction for some time.
4. Scalping
Scalping was originally referred to as spread trading. Scalping is a trading style where small price gaps created by the bid-ask spread are exploited. It normally involves establishing and liquidating a position quickly, usually within minutes or even seconds. Scalping highly liquid instruments for off the floor day traders involves taking quick profits while minimizing risk (loss exposure). It applies technical analysis concepts such as over/under-bought, support and resistance zones as well as trend line, trading channel to enter the market at key points and take quick profits from small moves. The basic idea of scalping is to exploit the inefficiency of the market when volatility increases and the trading range expands.
5. Rebate Trading
Rebate Trading is an equity trading style that uses ECN rebates as a primary source of profit and revenue, considering the payment structure of ECN paying per share. Traders maximize their returns by trading low priced, high volume stocks. This enables them to trade more shares and have more liquidity with a set amount of capital.
6. News Playing
News playing is primarily the realm of the day trader. The basic strategy is to buy a stock which has just announced good news, or short sell on bad news. Such events provide enormous volatility in a stock and therefore the greatest chance for quick profits (or losses). Determining whether news is "good" or "bad" must be determined by the price action of the stock, because the market reaction may not match the tone of the news itself. The most common cause for this is when rumors or estimates of the event (like those issued by market and industry analysts) were already circulated before the official release, and prices have already moved in anticipation---the news is already priced in the stock.
Conclusion
Although day trading has become somewhat of a controversial phenomenon, its prevalence is undeniable. Day traders, both institutional and individual, play an important role in the marketplace by keeping the markets efficient and liquid. Some argue that individuals should stay away from day trading, while others argue that it is a viable means to profit. And although it is becoming increasingly popular among inexperienced traders, it should be left primarily to those with the skills and resources needed to succeed.
Article Source:-http://forex-news-help.blogspot.com/2009/03/forex-trading-methods-day-trading.html

Forex Trading - Bollinger Bands

2009-10-26T02:44:00.001-07:00

Bollinger Bands are a tool of technical analysis which was invented by John Bollinger in the 1980s. Having evolved from the concept of trading bands, Bollinger Bands are an indicator that allows users to compare volatility and relative price levels over a period time. Basically, this tool provides a relative definition of high and low. By definition prices are high at the upper band and low at the lower band. This definition can aid in rigorous pattern recognition and is useful in comparing price action to the action of indicators to arrive at systematic trading decisions. When the market is calm, the Bollinger Band lines get closer together and when the market was changing Bollinger Band line expand. The indicator consists of three bands designed to encompass the majority of a security's price action:

1. A simple moving average in the middle

2. An upper band (SMA plus 2 standard deviations)

3. A lower band (SMA minus 2 standard deviations)

Standard deviation is a statistical unit of measure that provides a good assessment of a price plot's volatility. Using the standard deviation ensures that the bands will react quickly to price movements and reflect periods of high and low volatility. Sharp price increases (or decreases), and hence volatility, will lead to a widening of the bands.

For easier understanding, see the following chart: when the price was calm, Bollinger Band lines were close to one another, but when the price jumped up, Bollinger Band lines are spread. The same would happen if the price fell.

Calculation
Upper = Average + 2*SD = X + 2*σ
Middle = Average = X

Lower = Average - 2*SD = X - 2*σ

Bollinger Bounce

The first thing you should know about Bollinger Band is that prices strive to return to the center of the Bollinger Bands. On the following chart you can see that the price has returned back towards the middle of Bollinger Bands.

What you just saw was a classic Bollinger Bounce. The reason why this “bounce” occurs is that Bollinger Band lines act like a level of support and resistance. The larger time period that you observe in the graph (H1, H4, D1), the stronger the Bollinger Bands get. Most traders developed systems that rely on the “jumps”. This strategy is best used when the market is in the range (ranging market) and while there is no clear trend.
Bollinger Squeeze
When the Bollinger Band lines get close together, it usually means that a break out will appear. If the candlesticks start to break out above the upper Bollinger Band line it is customary that the upward trend will continue, same thing is true for the downward trend.

If you look at the chart above you can see the Bollinger Band lines shrinking. Price is just beginning to penetrate upper Bollinger Bands lines and continues to go up. This is the way a typical Bollinger Squeeze works. This strategy is designed to catch a trend as soon as possible. This situation does not happen every day, but you can probably encounter it several times a week if you observe a 15 minute chart.
Interpretation
The use of Bollinger Bands varies wildly among traders. Some traders buy when price touches the lower Bollinger Band and exit when price touches the moving average in the center of the bands. Other traders buy when price breaks above the upper Bollinger Band or sell when price falls below the lower Bollinger Band.
When the bands lie close together a period of low volatility in stock price is indicated. When they are far apart a period of high volatility in price is indicated. When the bands have only a slight slope and lie approximately parallel for an extended time the price of a stock will be found to oscillate up and down between the bands as though in a channel.
As always, traders are inclined to use Bollinger Bands with other indicators to see if there is confirmation. In particular, the use of an oscillator like Bollinger Bands will often be coupled with a non-oscillator indicator like chart patterns or a trend line. If these indicators confirm the recommendation of the Bollinger Bands, the trader will have greater evidence that what the Bands forecast is correct.
Conclusion
Even though Bollinger Bands can help generate buy and sell signals, they are not designed to determine the future direction of a currency. The Bollinger Bands were designed to augment other analysis techniques and indicators. By themselves, Bollinger Bands serve two primary functions:
- To identify periods of high and low volatility
- To identify periods when prices are at extreme, and possibly unsustainable, levels
As stated above, currencies can fluctuate between periods of high volatility and low volatility. Being able to identify a period of low volatility can serve as an alert to monitor the price action of a currency. Other aspects of technical analysis, such as momentum, moving averages and retracements, can then be employed to help determine the direction of the potential breakout.
Remember that buy and sell signals are not given when prices reach the upper or lower Bollinger Bands. Such levels merely indicate that prices are high or low on a relative basis. A currency can become overbought or oversold for an extended period of time. Knowing whether or not prices are high or low on a relative basis can enhance our interpretation of other indicators, and it can assist with timing issues in trading.
Article source:-http://forex-news-help.blogspot.com/2009/04/bollinger-bands.html

Forex Trading - Moving Average

2009-10-26T02:43:00.001-07:00

What is Moving Average?

Moving average is one of the most popular and easy to use tools available for doing technical analysis. It means the average price of a currency over a specified time period (the most common being 20, 30, 50, 100 and 200 days), used in order to spot pricing trends by flattening out large fluctuations. Moving average data is used to create charts that show whether a currency’s price is trending up or down. They can be used to track daily, weekly, or monthly patterns. Each new day's (or week's or month's) numbers are added to the average and the oldest numbers are dropped, thus, the average "moves" over time. In general, the shorter the time frame used, the more volatile the prices will appear, so, for example, 20 day moving average lines tend to move up and down more than 200 day moving average lines. There are four different types of moving averages: Simple (also referred to as Arithmetic), Exponential, Smoothed and Linear Weighted. Moving averages may be calculated for any sequential data set, including opening and closing prices, highest and lowest prices, trading volume or any other indicators. It is often the case when double moving averages are used.

The only thing where moving averages of different types diverge considerably from each other is when weight coefficients, which are assigned to the latest data, are different. In case we are talking of simple moving average, all prices of the time period in question are equal in value. Exponential and Linear Weighted Moving Averages attach more value to the latest prices. The most common way to interpreting the price moving average is to compare its dynamics to the price action. When the instrument price rises above its moving average, a buy signal appears, if the price falls below its moving average, what we have is a sell signal. This trading system, which is based on the moving average, is not designed to provide entrance into the market right in its lowest point, and its exit right on the peak. It allows acting according to the following trend: to buy soon after the prices reach the bottom, and to sell soon after the prices have reached their peak. Moving averages may also be applied to indicators. That is where the interpretation of indicator moving averages is similar to the interpretation of price moving averages: if the indicator rises above its moving average, that means that the ascending indicator movement is likely to continue: if the indicator falls below its moving average, this means that it is likely to continue going downward.

Simple Moving Average (SMA)

Simple Moving Average is the simplest type of moving averages. Basically, SMA is calculated by adding the last number in the period from the closing price, and then dividing that number with a period. Let me explain in example, if you select SMA 5 on a 1 hour graph, add the closing prices for the last 5 hours, and then divide that number by 5. If you select SMA 5 on a 30 minute graph, you will add the closing prices for the past 150 minutes (30*5), and then divide that number by 5. In the same way you can calculate SMA for any time period.

Most of the trading platforms will make all these calculations for you. The reason why I am bothering you with this component of technical analysis is because it is extremely important to understand how to calculate the moving average. If you understand how every moving average is calculated, you can make your own decision, which type is the best for you.

Like any other indicator, SMA works with a delay. Because you observe the average price, you are actually looking at the "forecast" of future prices, not the concrete future. Here's an example of how moving averages reduce the price activity:

On the previous chart you can see 3 different SMA. As you can see, the bigger period SMA you take, the more it stays behind the more prices. You probably noticed that the 62 SMA is much further away from current prices then 30 and 5 SMA. This is because with 62 SMA you are adding closing prices from the last 62 periods and dividing it with 62. The higher the number of periods that you are using, the slower is reaction to the movement of prices. SMA on this graph shows the overall sentiment in the market in a given period. Instead of just looking at the current price on the market, moving averages provide a broader view, and give us the general prediction of prices in the future.

SMA = SUM (CLOSE, N)/N ; Where:

N = number of calculation periods

Exponential Moving Average (EMA)

Although SMA is an excellent tool, one major problem is associated with it: SMA is very sensitive to sudden jumps (spikes). By looking at the next example you will better understand what I mean:Suppose that we draw a 5 SMA on the daily chart of EUR / USD and the closing prices for the last 5 days are as follows: 1st day - 1.2345, 2nd day - 1.2350, 3rd day - 1.2360, 4th day - 1.2365, 5th day - 1.2370. SMA would be calculated as: (1.2345+1.2350+1.2360+1.2365+1.2370)/5 = 1.2358. But what if the 2nd day price was 1.2300? SMA result would be much lower and you get the impression that the price is going down, when in reality, 2nd day may perhaps have been only one remote event (for example, reduction of the interest rate).

What I am trying to indicate is that the SMA may sometimes be too simple. If there was only a way to filter the jumps so that we do not get the wrong picture and make the most out of moving averages. It exists and is called the Exponential Moving Average (EMA).

EMA is a type of moving average that is similar to Simple Moving Average, except that more weight is given to the latest data. The Exponential Moving Average is also known as "Exponentially Weighted Moving Average". This type of moving average reacts faster to recent price changes than a Simple Moving Average. In our example above, EMA would put more weight on the 3rd-5th day, which means that jump on the 2nd would have a lesser value and would not influence so much on the moving average. It would put more emphasis on what traders are doing right now. While trading, it is more important to see what merchants are doing right now, not what they were doing last week or last month.

EMA = (CLOSE(i)*P)+(EMA(i-1)*(100-P)) ; Where:

CLOSE(i) = the price of the current period closure

EMA(i-1) = Exponentially Moving Average of the previous period closure

P = the percentage of using the price value

Smoothed Moving Average (SMMA)

A Smoothed Moving Average is sort of a cross between a Simple Moving Average and an Exponential Moving Average, only with a longer period applied. The Smoothed Moving Average gives the recent prices an equal weighting to the historic ones. The calculation does not refer to a fixed period, but rather takes all available data series into account. This is achieved by subtracting yesterday’s Smoothed Moving Average from today’s price. Adding this result to yesterday’s Smoothed Moving Average, results in today’s moving average.

In a Simple Moving Average, the price data have an equal weight in the computation of the average. Also, in a Simple Moving Average, the oldest price data are removed from the moving average as a new price is added to the computation. The Smoothed Moving Average uses a longer period to determine the average, assigning a weight to the price data as the average is calculated. Thus, the oldest price data points in the Smoothed Moving Average are never removed, but they have only a minimal impact on the moving average, which is similar to how an Exponential Moving Average places more weight on the more recent data.

The first value of this smoothed moving average is calculated as the simple moving average (SMA):

SUM1 = SUM(CLOSE, N)

SMMA1 = SUM1/N

The second and succeeding moving averages are calculated according to this formula:

SMMA(i) = (SUM1-SMMA1+CLOSE(i))/N ; Where:

SUM1 = the total sum of closing prices for N periods

SMMA1 = the smoothed moving average of the first bar

SMMA(i) = the smoothed moving average of the current bar (except for the first one)

CLOSE(i) = the current closing price

N = the smoothing period

SMA versus EMA
If you want a moving average which will match the movement of prices quite quickly, then the EMA with a short period (eg. 3, 5, 8) is the best choice for you. This may help to ''hunt down'' the trend in the early stage, which will result in higher profits. Specifically, the earlier you have caught the trend, the more you can ''ride'' through it, and you can make more money. The pitfall is that while using this type of moving average you can get a false signal which you won’t recognize and lose your investment. Since the moving average quickly matches the price, you can even think that a new trend is forming, but in fact it is just an abrupt jump, which returns to the starting position (spike).
With SMA the situation is completely opposite. If you want the moving average to respond more precisely and slowly to the price changes, then the longer period SMA is the best choice for you. Although slow responding to the price changes will save you from many possible pitfalls, the smaller SMA may also result in too much delay and missing of a good trade.

Uses for Moving Averages

There are many uses for moving averages, but three basic uses stand out:
1. Trend identification/confirmation
2. Support and Resistance level identification/confirmation
3. Trading Systems
Which is better?
Which moving average you use will depend on your trading and investing style and preferences. The Simple Moving Average obviously has a lag, but the Exponential Moving Average may be prone to quicker breaks. Some traders prefer to use Exponential Moving Averages for shorter time periods to capture changes quicker, while others prefer Simple Moving Averages over long time periods to identify long-term trend changes. In addition, much will depend on the individual security in question. Moving average type and length of time will depend greatly on the individual security and how it has reacted in the past.
The initial thought for some is that greater sensitivity and quicker signals are bound to be beneficial. This is not always true and brings up a great dilemma for the technical analyst: the tradeoff between sensitivity and reliability. The more sensitive an indicator is, the more signals that will be given. These signals may prove timely, but with increased sensitivity comes an increase in false signals. The less sensitive an indicator is, the fewer signals that will be given. However, less sensitivity leads to fewer and more reliable signals. Sometimes these signals can be late as well.
For moving averages, the same dilemma applies. Shorter moving averages will be more sensitive and generate more signals. The EMA, which is generally more sensitive than the SMA, will also be likely to generate more signals. However, there will also be an increase in the number of false signals and whipsaws. Longer moving averages will move slower and generate fewer signals. These signals will likely prove more reliable, but they also may come late. Each investor or trader should experiment with different moving average lengths and types to examine the trade-off between sensitivity and signal reliability.
Trend-Following Indicator
Moving averages smooth out a data series and make it easier to identify the direction of the trend. Because past price data is used to form moving averages, they are considered lagging, or trend following, indicators. Moving averages will not predict a change in trend, but rather follow behind the current trend. Therefore, they are best suited for trend identification and trend following purposes, not for prediction.
When to Use
Because moving averages follow the trend, they work best when a currency is trending and are ineffective when a currency moves in a trading range. With this in mind, investors and traders should first identify currencies that display some trending characteristics before attempting to analyze with moving averages. This process does not have to be a scientific examination. Usually, a simple visual assessment of the price chart can determine if a security exhibits characteristics of trend.
In its simplest form, a currency’s price can be doing only one of three things: trending up, trending down or trading in a range. An uptrend is established when a currency forms a series of higher highs and higher lows. A downtrend is established when a currency forms a series of lower lows and lower highs. A trading range is established if a currency cannot establish an uptrend or downtrend. If a security is in a trading range, an uptrend is started when the upper boundary of the range is broken and a downtrend begins when the lower boundary is broken.
Once a currency has been deemed to have enough characteristics of trend, the next task will be to select the number of moving average periods and type of moving average. The number of periods used in a moving average will vary according to the currency's volatility, trendiness and personal preferences. The more volatility there is, the more smoothing that will be required and hence the longer the moving average. There is no one set length, but some of the more popular lengths include 21, 50, 89, 150 and 200 days as well as 10, 30 and 40 weeks. Short-term traders may look for evidence of 2-3 week trends with a 21-day moving average, while longer-term investors may look for evidence of 3-4 month trends with a 40-week moving average. Trial and error is usually the best means for finding the best length. If there are too many breaks, lengthen the moving average to decrease its sensitivity. If the moving average is slow to react, shorten the moving average to increase its sensitivity. In addition, you may want to try using both Simple and Exponential Moving Averages. Exponential Moving Averages are usually best for short-term situations that require a responsive moving average. Simple Moving Averages work well for longer-term situations that do not require a lot of sensitivity.
Conclusions
Moving averages can be effective tools to identify and confirm trend, identify support and resistance levels, and develop trading systems. However, traders and investors should learn to identify currencies that are suitable for analysis with moving averages and how this analysis should be applied. Usually, an assessment can be made with a visual examination of the price chart, but sometimes it will require a more detailed approach.
The advantages of using moving averages need to be weighed against the disadvantages. Moving averages are trend following, or lagging, indicators that will always be a step behind. This is not necessarily a bad thing though. After all, the trend is your friend and it is best to trade in the direction of the trend. Moving averages will help ensure that a trader is in line with the current trend. However, markets, currencies spend a great deal of time in trading ranges, which render moving averages ineffective. Once in a trend, moving averages will keep you in, but also give late signals. Don't expect to get out at the top and in at the bottom using moving averages. As with most tools of technical analysis, moving averages should not be used on their own, but in conjunction with other tools that complement them. Using moving averages to confirm other indicators and analysis can greatly enhance technical analysis.
Article source:-http://forex-news-help.blogspot.com/2009/04/forex-trading-moving-average.html

Forex Trading Weekly Forecast - 05.25.09

2009-10-26T02:42:00.001-07:00

US Dollar Plunges Into Oversold Levels, Signals Potential for Reversal

Fundamental Outlook for US Dollar: Neutral

- US homebuilder confidence rose to the highest levels since September, according to the NAHB
- On the other hand, US housing starts and building permits plummeted to new record lows
- The Federal Reserve’s outlook for growth and unemployment has deteriorated, according to the latest FOMC minutes

The US dollar was easily the weakest of the majors last week, which was interesting in light of the fact that US equities and the CBOE’s VIX volatility index ended virtually unchanged, albeit with some rocky price action in between. Indeed, if there were any signs that US assets were losing their status of “safe havens,” it was this: After Standard & Poor’s downgraded the outlook for the UK from “stable” to “negative” due to their “deteriorating public finances,” ballooning national debt in the US spurred speculation that the same could happen to their economic outlook, if not their long-term credit rating altogether. In fact, the US dollar decline was in lockstep with a plunge in Treasury prices, highlighting a drop in demand for all things dollar-related. However, given the extent of the greenback’s decline, this coming week should be very interesting. Will the US dollar go back to trading in line with risk trends, gaining with other low-yielding currencies, or will it trade as the one of the “riskiest” assets out there? Since the DXY index is well into oversold levels, technical factors suggest that the dollar could bottom in the near-term. As they say though, “the trend is your friend,” so traders should be cautious.

This week’s US economic calendar is chocked full of releases. On Tuesday, the Conference Board’s consumer confidence index for the month of May is forecasted to continue rising from its record low of 25.3 reached in February up to 43.0. With record keeping having begun in 1967, the steady plunge in sentiment from the 2007 highs of 111.90 makes the extent of the recession especially clear.

On Wednesday, the National Association of Realtors (NAR) is anticipated to report that existing home sales rose 2.0 percent in April to an annual pace of 4.66 million from 4.57 million. However, there are indications that the results could prove to be disappointing as the Commerce Department reported on May 19 that housing starts plunged by 12.8 percent during the month of April, and a whopping 54.2 percent from a year earlier, to a record low annual pace of 458,000.

On Thursday, the release of US durable goods orders are projected to show that domestic demand may have increased slightly at the start of Q2, as they are forecasted to have risen 0.5 percent in April, but excluding transportation the index is anticipated to fall 0.3 percent. While the headline result will have the most impact on forex trading, the markets should keep an eye on non-defense capital goods orders excluding aircraft, as this number serves as a leading indicator for business investment. The three-month annualized figures remain deeply negative, but the monthly component has improved over the past two months and a continuation of this dynamic would be supportive of outlooks for a slow recovery in the US economy.

Finally, on Friday, the second round of US Q1 GDP estimates are due to hit the wires, and the results could be market-moving. The preliminary reading is forecasted to be revised up to -5.5 percent from -6.1 percent, which also marks an improvement when compared to the Q4 2008 result of -6.3 percent. There is some evidence that revisions will be to the downside, though. First, the US trade deficit widened for the first time in eight months during March by 5.5 percent to $27.6 billion. A breakdown of the report showed that exports slumped 2.4 percent to a more than two-year low of $123.62 billion while imports fell 1.0 percent to $151.196 billion. According to Bloomberg News, the Commerce Department used a much larger increase in exports when calculating Q1 GDP, suggesting that initial estimates of a 6.1 percent annual contraction may have been optimistic. Also, personal consumption is forecasted to be adjusted to 2.0 percent from 2.2 percent after March advance retail sales were revised down to -1.3 percent from -1.1 percent.

What Happens to the Euro Rally When Risk Appetite Settles?

Fundamental Outlook for Euro This Week: Neutral

- Euro Zone factory and service sectors contract at the slowest pace in 8 months
- German investors lament current conditions but growing more optimistic over the future
- Is the EURUSD breakout just beginning or is this the last gasp? Read the weekly technical outlook

The euro was set on a steady and aggressive rally against its primary counterpart - the dollar – this past week. The drive for this rally evolved with time: from scheduled event risk to general market sentiment to speculation over national credit health. However, when the dollar is subtracted from the equation, is the euro really as strong as the EURUSD advance would suggest? Looking over the crosses, the single currency was eking gains against those economies that are struggling to maintain stability and depreciating when measured up to the high yielders. This should be considered a reminder that there are general market themes and euro-centric fundamentals; and the market will follow whichever has the greater influence at the time. Looking ahead to next week, there are a number of factors that could come into play including monetary policy speculation, growth forecasts and the permanence of sovereign credit ratings. Which will take responsibility for the guiding the euro?

Considering the market’s reaction to Standard & Poor’s downgraded forecast for the UK’s credit rating this past week, this has the greatest potential for market impact going forward. The pound immediately dropped when the news crossed the wires; but the real reaction came from the dollar as rating concerns spread to the United States as budget deficits and bank rescues swell debt levels. For the world’s largest economy, even a passive threat of a credit downgrade is substantial (as its assets are the benchmark for risk-free); but what is the danger to the Euro Zone? Speculation is a tricky thing to gauge; but under the right conditions, a threat to the European regional credit rating could certainly undermine the currency. With the US losing its safe haven status, UK considered financially unsound and Japan suffering from a record-breaking recession; the Euro Zone is considered one of the most secure, developed economies. Invalidating this perception could quickly undermine confidence in the economy and its assets. However, we have to consider how real a threat this is. According to Eurostat numbers, the government debt to GDP ratio through the end of the year was at 69.3 percent. What’s more, we have already seen Greece, Spain, Ireland and Portugal downgraded individually. With the global policy makers trying to stabilize a global recession and stamp out the lingering effects of a financial crisis; all major economies are at risk.

Another potentially, potent fundamental driver for the euro going forward is monetary policy. While its benchmark lending rate is well below the Australian and New Zealand targets, the Euro Zone rate advantage was considered relatively stable – until recently. At the authority’s last policy meeting, officials cut rates once again to 1.00 percent and relented in taking the first step into un-conventional territory by announcing their intentions to purchase covered bonds. Forecasts among policy officials vary widely as to whether the central bank has done enough or if they are lagging the potential for crisis. Divergent commentary will continue to split the market and bolster volatility; and the louder the call is for additional cuts and expanding quantitative easing, the heavier the euro will become.

The third potential driver for the euro next week is scheduled event risk. A prominent list of economic indicators, the docket may not only trigger short-term volatility; but it will also feed into the aforementioned themes. The offerings are substantial. Sentiment is covered by the IFO business and GfK consumer numbers. Growth forecasts will follow German employment and retail PMI figures. And, though its influence is likely dampened German and Euro Zone consumer-inflation data could still contribute to rate forecasts.

Japanese Yen Bounces Despite Record GDP Contraction – What Gives?

Fundamental Outlook for Japanese Yen: Neutral

- Japanese Yen rallies as Finance Minister says Ministry of Finance has no planes to intervene in forex market
- Yen bounces on better-than-expected GDP, but economy nonetheless contracts a whopping 4 percent in Q1
- Is the Japanese Yen-funded carry trade recovering?

The Japanese Yen scarcely survived a week of truly dismal economic data, squeezing out a marginal gain against the downtrodden US Dollar but falling sharply against every other major counterpart. Japanese government officials reported the worst Gross Domestic Product contraction in the survey’s 50+ year record, and weak economic fundamentals limited trader demand for the low-yielding Yen. That being said, the currency actually saw a marginal bounce following the GDP news release; forecasters had anticipated an even worse economic contraction. A modestly positive week for the US S&P 500 and other global equity indices only compounded the risk-sensitive Japanese Yen’s woes, and broader JPY momentum remains to the downside.

The USD/JPY finished below the psychologically significant 95.00 marker for the first time since March, and traders expected the Japanese Ministry of Finance to express concern at relative JPY strength. Yet Finance Minister Kaoru Yosano effectively ruled out forex intervention—removing a key source of USD/JPY support. It seems that the days of a highly vocal Ministry of Finance are long gone; current officials are taking a much more hands-off approach to the Japanese Yen exchange rate. We question whether such a laissez-faire stance is truly sustainable, however. Japanese exports have effectively crashed due to the combination of weak global consumption and a stronger Japanese Yen.

Subsequent outlook for the recently-downtrodden Yen is somewhat unclear, but momentum plainly remains to the downside against all except the US Dollar. An ostensibly busy week of economic event risk is unlikely to have a major effect on the Yen. We will instead monitor any and all developments in global risk sentiment—especially as seen through major global equity indices. The correlation between the USD/JPY and the US S&P 500 may have weakened through recent trade, but the equivalent S&P link to the EURJPY and GBPJPY remains near record-highs. In other words, the EUR/JPY and GBP/JPY are likely to take their cues from developments in risky asset classes. The US Dollar’s fate may depend on global investor sentiment towards USD-denominated asset classes.

British Pound Likely to Look Past Economic Data, Continue Higher

Fundamental Outlook for British Pound: Bearish

- Consumer Prices Fall to Lowest in 15 Months in April
- GDP Data Confirms Economy Shrank At Record Pace in First Quarter
- S&P Downgrades UK Outlook to ‘Negative’ on Growing Budget Deficit

The British Pound could continue to rise next week as an uneventful economic calendar offers little event risk to slow the currency’s momentum. Last week, the sterling showed surprising resilience in the face of a record drop in gross domestic product, a weak CPI report , and news that rating agency S&P downgraded their UK outlook from “stable” to “negative”. It seems traders heard everything they needed to about the economy’s prospects a week earlier when the Bank of England’s quarterly inflation report revealed expectations inflation will remain below the target 2% until 2012 as the economy takes a slower path to recovery, taking the punch out of subsequent releases along the same theme. The lack of potency in negative economic data suggests that the Pound remains at levels that are too low to attract new sellers all the while those that are already short become increasingly anxious about overextending their exposure, quickly rushing to cover their positions at the slightest hint of a reversal. Put simply, the British Pound seems heavily oversold and likely needs to correct still higher before it becomes attractive to sell once again.

Little stands in the way of the Pound’s momentum in the week ahead: Nationwide House Prices are set to drop -1% in May to bring the annual pace of decline to -13.7%, a reading well within the range of values that has been seen since the free-fall in property values moderated towards the end of 2008; GfK Consumer Confidence is seen rising to -25 in May from -27 in the preceding month, the seventh consecutive time that the rate of contraction in sentiment has slowed (likely owing to the government’s stimulus measures). While neither release speaks of a robust economy (albeit they do hint at one that is shrinking at a slowing rate), the trends behind these indicators have long been priced in and are unlikely to make or break the current bullish upswing in a meaningful way.

Turning to risk sentiment, short-term studies reveal a declining link between the MSCI World Stock Index and the trade-weighted average value of the British Pound. Indeed, 30-day correlation studies reveal the link now stands at 56% having printed as high as 86% as recently as late April. This suggests that the currency may not suffer a setback even if risky assets confirm a double top at resistance marked by the high from early January’s, a scenario that could well materialize in the near term.

Written by Terri Belkas, John Kicklighter, David Rodriguez, Ilya Spivak and John Rivera, Currency AnalystsArticle Source - Forex Trading Weekly Forecast - 05.25.09
Article source:- http://forex-news-help.blogspot.com/2009/05/forex-trading-weekly-forecast-052509.html

Common Indicators For Forex

2009-10-26T02:19:00.001-07:00

Indicators are an important tool in making a trade at Forex market. The following tools are merely an education that you can utilize a decision for trading in Forex.

1. Bollinger Bands

This is a kind of indicator that was used by traders to measure the volatility of a market. In simple words, Bollinger Band in an indicator that will tell you if the market is quiet or if the market is loud.

If the market is in quiet stage the bands will contract, on the other hand if the market is being loud the bands will expand.

You will notice that if the bands were close together in a chart it means that the prices are quiet but if the bands spread apart in the chart it means that the prices have moved upward.

2. MACD

Moving Average Convergence Divergence or MACD is a tool that is used by traders to determine the moving averages that are indicated in a new trend either it is bearish or bullish.
If you are using a MACD chart you will notice three number used in settings.

a. The first thing that you will notice is the number of periods in the chart that is used to compute the moving average in faster phase.

b. The second thing is the number of periods that is used in the chart that is to calculate the moving average in slower phase.

c. The third thing that you will notice is the number of bars on the chart that is used to compute for the moving average with the difference from the faster phase and the slower phase moving averages.

3. Parabolic SAR

The Parabolic SAR or Stop And Reversal can determine where the trend might end. Parabolic SAR is one tool that is very easy to use. This indicator will simply show you when are the prices going up or going down for that matter. The chart can signal you whether you are to buy or to sell.

This indicator is helpful only at market that are trending often and that has downturns and long rallies; however, you do not want to use this indicator when the market is being choppy, choppy means that the prices are moving sideways.

4. Stochastics

This is another kind of indicator that helps traders to determine where the trend might end. Stochastics is an indicator that measures oversold or overbought conditions in the Forex market.
You can use Stochastics in many ways; however, the basic role of Stochastics is to show traders where the market is oversold or overbought.

5. Relative Strength Index

This can also be called as the RSI; this has similarity with the Stochastics indicator. Both can determine the oversold and the overbought conditions of the Forex market.
RSI is one of the most popular tools for traders because this helps them confirm the trend formations.

Basically, we can just pick one indicator and move on however, this is applicable if the world is perfect enough for us to trade. But that is not the case, indicators also have imperfections and so we must avoid these imperfections as often as we can.

That is why a lot of traders combine all these indicators so that they can clearly see what they have to do with the help of these indicators.

Article Source - http://www.tjfengcai.com/common-indicators-for.html

Characteristics of the Forex Market

2009-10-26T02:18:00.003-07:00

Being the world's largest financial market, the foreign exchange (or forex) market offers unmatched benefits and advantages to the prospective investor. With superior liquidity and leverage compared to stocks and futures markets, the forex market is arguably the best financial investment you can find.

What makes the forex market an excellent financial market? The characteristics that make the forex market a good one are lower trading costs, excellent transparency, superior liquidity and very strong market trends.

LOWER TRADING COSTS

Ask anyone dealing in stocks and they will tell you that they have to shell thousands of dollars to get started. Not so with the forex market. With just a few hundred dollars (often $250 or less), you can open a mini forex account and start trading!

The lower trading costs in the forex market has made it possible for even small, individual investors to make decent profits from forex trading. With lower costs, the possible losses are also much lower. You will discover that forex trading usually has no commission fees unlike in other investments. The costs of forex trading are limited to the spread or the difference between the selling and buying prices for a particular currency pair.

EXCELLENT TRANSPARENCY

Transparency means the free access to trading information. Forex trading is a transparent process because the trader has full access to market data and information that are necessary to perform successful transactions. The excellent transparency of the forex market means that forex traders have more control over their investments and can decide what to do based on the information available.

SUPERIOR LIQUIDITY

In a forex market, traders are free to buy and sell currencies of their own choosing. The superior liquidity of the forex market enables traders to easily exchange currencies without affecting the prices of the currencies being traded.

So whether you trade a few thousand dollars or several millions, you can be assured of the same currency prices during the time an order was placed and then executed. The forex market's superior liquidity allows you to get the profits you expect at the time you made the trade.

STRONG MARKET TRENDS

Forex traders make money by getting accurate market data and then analyzing the direction the market takes. To do this, forex traders rely heavily on trends and trending in an attempt to predict the direction of the forex market. Most traders use technical analysis to analyze past and present forex market data and then search for trends.

Other financial markets use trends and trending but this characteristic is much stronger in the forex market. Due to strong trending, forex markets are much easier to analyze and identify possible entry and exit positions during trading.

Now you already know the characteristics that make the forex market a sound, financially-stable and profitable investment area, maybe it's time to put your money into the forex market and earn handsome profits. You can just take advantage of the forex market's positive assets and make your money work for you.

Article Source - http://www.tjfengcai.com/characteristics-of-the-forex.html

Why Invest in the Forex Rather Than in Stocks

2009-10-26T02:18:00.001-07:00

There is a widely held misconception that the best way to earn from your investments is through investing in stocks.

Yes, investing in the stock market is a good way to profit from one's savings but there are other ways one can invest money that are relatively much less complicated and demanding but as profitable, if not more, than investing in stocks.

Like investing in the foreign exchange or forex.

So why is the forex hassle-free compared to the stock market and what are its advantages over it?

The following are just some of the benefits when one chooses the forex on top of the stock market.

No need to monitor thousands of stocks.

Tired of monitoring several thousands of stocks like the 4500 listed in the New York Stock Exchange and the additional 3,500 in the NASDAQ?

With the forex, you only need to focus on the four major currency pairs. Though not necessary, you can also dabble in the 34 second tier currencies if you got some spare time and want to be really competitive and have advantage against other traders.
Express execution of market orders.

Unlike the stock market, there are no discrepancies between the price that one sees in the platform and the execution price needed to start the exchange in the foreign exchange market.

What you see is the price you get as there is price certainty in every forex market and trades are done real time.

No short-selling restrictions.

In other markets particularly the stock market, heavy restrictions are made on short selling.
Such stringent measures are non-existent in the foreign exchange market as currency trading is a two-way process; one also buys currency simultaneously when he/she is selling a currency and vice-versa.

Hence, there is no structural bias on the foreign exchange market, as everyone has equal access to a rising or falling market.

Highly sensitive market.

Traders in the foreign exchange market can (and most of the time they do) profit from such mundane news, for instance, a change in the interest rates.

This spontaneity of the forex creates infinite opportunities and advantages for every trader as they can always take advantage of the ebb and flow of currencies caused by simple rumors.
24 hour, commission-free market.

Free from additional transaction fees such as those from the government and middlemen and being open 24 hours a day, 5.5 days a week are advantages of the foreign exchange market not only over the stock market but to other financial markets as well.

Traders about to invest should be well informed of the advantages of forex so as not to waste time and money in investing in the complicated and demanding world of stocks as these advantages present the foreign exchange market as a viable, if not better investment alternative to the stock market.

Article Source - http://www.tjfengcai.com/why-invest-forex.html

Potential Dangers in Foreign Exchange

2009-10-26T02:17:00.001-07:00

Foreign exchange is very profitable and also it is risky. Multiple traders and numerous sophisticated trading instruments exacerbate these risks in foreign exchange. Knowing foreign exchange risks are vital in managing it.

The shifting of worldwide market supply and demand creates a continuous effect on the foreign exchange market. Such effect can be identified as an exchange rate risk. Spot deals, forwards outright, futures and options in foreign exchange are the ones mainly affected by the exchange rate risk.

Exchange rate risk starts with the foreign exchange traders. What a good foreign exchange trader can do is to cut the losses short and go with profitable positions. Two popular measures to keep foreign exchange losses low are the position limit and the loss limit.

In position limit, foreign exchange trader may be limited to carry a certain currency at any time when regular trading is going on. Another position limit calls for maximum outstanding position kept overnight by foreign exchange traders. Each trader must have an established foreign exchange market limit based on level of trading skill and not by level of seniority or profitability. Each bank and treasury may have rules regarding this. The limits may be held high or low for a set period of time by the senior officer from the treasury to encompass unique foreign exchange market condition.

The loss limit is a way of holding off unsustainable losses by foreign exchange traders. This limit enforced by senior officers on the dealing room is chosen either on daily or monthly basis. This measure is of enormous help for foreign exchange trader because it lifts added pressure on deciding the size of loss to take.

Foreign exchange risk is to be tamed by the management by setting clear rules regarding policies of risk management. The rules must be revised regularly or in response to unusual market development. The management must find the most suited way in dealing with present or projected trading capacity. And it also takes into account the loopholes of these ways so as to come up with a proper risk management policy. Flexibility and sped of adjustment are crucial in fast-changing financial markets such as in foreign exchange.

Position and loss limits are very basic risk management measures. And with the help of control tool, these limits can be implemented better and easily. With the aid of computers, foreign exchange transactions are entered into the system database. The treasury and chief trader can have access continuously, instantly and comprehensively to trading date. Whatever their conclusions, it can then be transmitted to headquarter terminals.

Article Source - http://www.tjfengcai.com/potential-dangers-in-foreign.html

More About Fundamental Analysis in Forex

2009-10-26T02:15:00.003-07:00

It's now what you've got, but how you use. So it goes that the make or break of any forex trading transaction actually does not lie on how much money you put in trading, but on trading strategies that rely purely on analysis.

There are two types of analysis in forex: the technical analysis and the fundamental analysis.

The long and short of technical analysis is that it is based on past trends in the forex market. You will know if it is a technical analysis you are making if you are looking at charts and graphs.

Fundamental analysis, on the other hand, employs a little more of "being in the moment."
Fundamental analysis in forex covers the spectrum of all economic and political climates that may affect the prices of currencies. Forex traders typically rely on the news to get information on inflation, growth rates, unemployment rates, and economic policies.

While technical analysis gets into actual and historic movements in the forex market, fundamental analysis, on the other hand, takes an overview of forex movements. Fundamental analysis paints for the forex traders a broad picture of the conditions affecting the price of a currency. In order to get the best analysis, forex traders have to supplement their findings in the fundamental analysis with that of the technical analysis.

Forex currency prices are essentially affected by forces that affect supply and demand. These forces of supply and demand, in turn, are affected by conditions in a country's economy. Two of the most important economic factors that affect supply and demand are an economy's strength, and interest rates.

Economic indicators can also affect supply and demand. Governments and the academe are the sources of these economic indicators, and they are followed by all segments of the investment industry. The two most important of these economic indicators are INTERNATIONAL TRADE and INTEREST RATES. There are other economic indicators like the Consumer Price Index or CPI.

Interest rates can either weaken or strengthen a country's position in forex trading. High interest rates typically attract foreign investment, which strengthens the local currency. But it will also adversely affect the stock market because stock investors typically react by selling their stocks, believing that higher interest rates will put companies at an adverse position.

A forex investor must always follow the factors affecting fundamental analysis to get a feel of where his currency is going, whether on a downward weak turn or an upward strength.

Article Source - http://www.tjfengcai.com/more-about-fundamental-analysis.html

Acquiring More Knowledge on Forex

2009-10-26T02:15:00.001-07:00

Knowledge is power. As with anything, the key to succeeding in forex lies in knowing. In the case of forex, knowing means being aware on how the forex market moves and on how increase your chances of profiting from a forex trade.

If you don't know anything, you might as well shoot in the dark, and garner a few successes in the short term but lose in the long haul.

There are, thankfully, many sources of knowledge on forex depending on your persuasion. If you like to learn on your own, the Internet has hundreds of websites featuring useful bits of information. There are also hundreds of e-books covering all aspects of forex trading.

The only challenge with the Internet is that the information is spread as bits and bytes. A website that walks you through the entire process of forex still has to exist. E-books are more promising.

If you want to learn a lot, you may opt for study courses, because (a) they present information on forex in an organized maner and are (b) structured to help students understanding forex trading.

These study courses are either available for free or cost over $1,000. Investing your time and money in them is worth the time you can save in scouring for similar forex information on your own. There are courses available for both beginners and the more experienced traders. In both cases, you only get what you give - free courses may teach you the basics but usually omit the exhaustive training that is needed to analyze charts and plot forex trading strategies.

There two basic types of forex study courses: an offline group class or an online course that you take through the Internet.

The main advantage of an offline group class is that you get undivided attention - any questions you might have does get answered right away by the instructor. This type of class, however, is not for those who do not have the time - you cannot make up for missed classes at a later time.
There are also one-day or two-days' seminar on forex. These are usually aimed at the very experienced trader, but you could benefit from the seminar if you already know the basics.
For the more shy types, there are CD-ROM courses on forex. You may order these materials online and have the CD delivered to you by mail.

But, as always, the best type of forex training is a one-on-one lesson with a forex trainor or mentor.

Article Source - http://www.tjfengcai.com/acquiring-more-knowledge.html

More About Fundamental Analysis in Forex

2009-10-26T02:14:00.003-07:00

It's now what you've got, but how you use. So it goes that the make or break of any forex trading transaction actually does not lie on how much money you put in trading, but on trading strategies that rely purely on analysis.

There are two types of analysis in forex: the technical analysis and the fundamental analysis.

The long and short of technical analysis is that it is based on past trends in the forex market. You will know if it is a technical analysis you are making if you are looking at charts and graphs. Fundamental analysis, on the other hand, employs a little more of "being in the moment."

Fundamental analysis in forex covers the spectrum of all economic and political climates that may affect the prices of currencies. Forex traders typically rely on the news to get information on inflation, growth rates, unemployment rates, and economic policies.

While technical analysis gets into actual and historic movements in the forex market, fundamental analysis, on the other hand, takes an overview of forex movements. Fundamental analysis paints for the forex traders a broad picture of the conditions affecting the price of a currency. In order to get the best analysis, forex traders have to supplement their findings in the fundamental analysis with that of the technical analysis.

Forex currency prices are essentially affected by forces that affect supply and demand. These forces of supply and demand, in turn, are affected by conditions in a country's economy. Two of the most important economic factors that affect supply and demand are an economy's strength, and interest rates.

Economic indicators can also affect supply and demand. Governments and the academe are the sources of these economic indicators, and they are followed by all segments of the investment industry. The two most important of these economic indicators are INTERNATIONAL TRADE and INTEREST RATES. There are other economic indicators like the Consumer Price Index or CPI.

Interest rates can either weaken or strengthen a country's position in forex trading. High interest rates typically attract foreign investment, which strengthens the local currency. But it will also adversely affect the stock market because stock investors typically react by selling their stocks, believing that higher interest rates will put companies at an adverse position.

A forex investor must always follow the factors affecting fundamental analysis to get a feel of where his currency is going, whether on a downward weak turn or an upward strength.

Article Source - http://www.tjfengcai.com/more-about-fundamental-analysis.html

Acquiring More Knowledge on Forex

2009-10-26T02:14:00.001-07:00

Knowledge is power. As with anything, the key to succeeding in forex lies in knowing. In the case of forex, knowing means being aware on how the forex market moves and on how increase your chances of profiting from a forex trade.

If you don't know anything, you might as well shoot in the dark, and garner a few successes in the short term but lose in the long haul.

There are, thankfully, many sources of knowledge on forex depending on your persuasion. If you like to learn on your own, the Internet has hundreds of websites featuring useful bits of information. There are also hundreds of e-books covering all aspects of forex trading.

The only challenge with the Internet is that the information is spread as bits and bytes. A website that walks you through the entire process of forex still has to exist. E-books are more promising.

If you want to learn a lot, you may opt for study courses, because (a) they present information on forex in an organized maner and are (b) structured to help students understanding forex trading.

These study courses are either available for free or cost over $1,000. Investing your time and money in them is worth the time you can save in scouring for similar forex information on your own. There are courses available for both beginners and the more experienced traders. In both cases, you only get what you give - free courses may teach you the basics but usually omit the exhaustive training that is needed to analyze charts and plot forex trading strategies.

There two basic types of forex study courses: an offline group class or an online course that you take through the Internet.

The main advantage of an offline group class is that you get undivided attention - any questions you might have does get answered right away by the instructor. This type of class, however, is not for those who do not have the time - you cannot make up for missed classes at a later time.

There are also one-day or two-days' seminar on forex. These are usually aimed at the very experienced trader, but you could benefit from the seminar if you already know the basics.
For the more shy types, there are CD-ROM courses on forex. You may order these materials online and have the CD delivered to you by mail.

But, as always, the best type of forex training is a one-on-one lesson with a forex trainor or mentor.

Article Source - http://www.tjfengcai.com/acquiring-more-knowledge.html

The US soldier that made his fortune out of online forex trades

2009-10-26T02:13:00.001-07:00

Srg. Sam D. was a US soldier about to finish his military service of three years as a mechanical technician stationed in Wyoming. With the money he set aside each month, and the grant he received from the army, he decided to try his luck investing in the online forex market.

"Before I put in any money", says Sam, "I browsed the net and read some basic things on Forex. After reading about it and asking some friends I started trading online forex."

D. is not the only person investing and winning large sums of money in internet forex trade. Millions of people around the world trade in forex online every day, and it's growingly becoming the largest and most profitable method available.

Because of it's easy to use interface, online forex trade market is available to people from all over the world. For example, disable people find it helpful to enjoy a full experience of trade even though they can not trade in other methods of investment.

The biggest problem that faces the forex market today, and what concerns the majority of internet forex experts, is how to stop the forex security hackers. Lately, the police department has also joined forces with computer experts that specialize in forex online trade to help prevent this phenomenon.

Article Source - http://www.fx-quote.com/

Online Forex tips- Most commonly written tips and strategies in books for forex trading

2009-10-26T02:12:00.001-07:00

Enjoying your investments in the forex market sometimes demands that you make the right moves and develop good investment habits. When done correctly, trading forex currencies can offer and enjoyable as well as profitable experience.

Here are some tips concerning online forex investment that can give you a little help:

Don’t put all your eggs in one basket- many starting online forex investors do so without thinking of the consequences of their investment. Before making your first trade, it is recommended to do some research into the kind of currency you wish to invest in.

Invest in the right website- a reliable website to invest in online forex is also important. One that can give you answers to questions that arise during trade and has an experienced costumer service line.

Stay updated with the latest news- The online forex market is effected by various factors, including interest rates, important world events, economy fluctuations etc.

Stay connected- another method of staying updated is to check the important internet sites ever so often, and also check for email updates or news from other medias concerning online forex.

Places we recommend

when you come to us we will show you all the tips, stocks and online forex quotes that you could ever need in order to make sound decisions and smart moves in the exciting forex market!

Article Source - http://www.fx-quote.com/online-forex-tips.html

Basics of Free Online Forex Trading Courses

2009-10-26T02:10:00.003-07:00

There are some people who doubt the validity of free online foreign exchange trading lessons found on the web. There are many available, but just how useful the information is, well that is up for debate. Before you make any decisions or believe all the information that you have read after downloading the free online forex trading lesson, there are some considerations that you should be aware of.

First things first, there is no such thing as free lunch and as with most things in life, they usually come with a price. The same thing can be applied to free online forex trading courses.

You should always consider the firm or the individual offering the online trading course for free. Find out the reason why the information is being given out for free or what website are they advertising to get you to enroll in. Also, find out how aggressive the contents of the book or article are in terms of convincing you to make an investment on a particular website. The answers to these queries could all play a role in determining the credibility of the information being provided you at no expense.

Another major consideration in the quality of free online forex trading courses is the absence of duplication of widely extensive information. You should be aware that you are going through the pages of a book that is perhaps not written by a professional if the majority of the information in it can be easily accessed by browsing the Internet. In that case, it would be better to stick with the suggestions and procedural articles provided by company sites instead of following the guidelines found in a poorly written electronic course or book.

The top free online forex trading lessons are not restricted to a description of how a single company gets involved in a trade. It should provide a thorough explanation of how all the websites managed by major companies functions in relation to the method of trading futures.

A lot of the sites that provide futures trading likewise provide free online forex trading courses. This is part of their incentive package as a means of getting you to register with their website. These courses are very helpful, particularly if you have already made up your mind to sign-up with a firm as a futures trader.

Free online forex trading courses serves as a price from different websites for traders who register to their site. Take advantage of these, but don't believe everything that you read.

Article Source - http://www.fx-quote.com/basics-free-online-forex.html

Forex Trading Relative Strength Index

2009-10-26T02:10:00.001-07:00

The Forex trading RSI is an oscillator that measures the strength of a currency trend, and ranges between 0 and 100. If you're keen to learn forex trading, the RSI is one of the key indicators you should learn, as it enables you to recognize a Forex trading market situation. The relative strength indicator (RSI) is a measure for whether a currency is overbought or oversold.

Overbought Forex trading occurs if the currency is in an uptrend pattern, because many traders buy the currency in an expectancy for it to keep rising. Over time traders cease to buy the currency, and the rise slows until the trend changes.
Oversold Forex trading happens when the currency price is in a downtrend. Here too the traders stop selling over time, and a short position is created, finally changing the trend direction.

The RSI is an index of price fluctuations over a certain period, and is seen as a percentage.
RSI=sum of price rises/ sum of all price fluctuations
Forex trading RSI rates consist of:

Neutral market- RSI Between 30%-70%.
Oversold market- RSI under 25%.
Overbought market - RSI over 75%.

An RSI should not be used alone, but in addition to other Forex trading technical analysis indicators. The longer the period of time that is used for the RSI, the less fluctuations it is expected to show.
Gary Burton - Forex Analyst
Article Source - http://www.fxinfo.com/rsi-indicator.html

Forex Technical Analysis

2009-10-26T02:09:00.001-07:00

The goal of technical analysis is to predict future forecast price trends based on the historical data. Analysts who use technical analysis tools feel that fundamentals and expectations affect the exchange rates.

Any trader can have an access to tools for technical analysis in order to calculate their trading decisions. Technical analysis has been utilized for centuries in currency trading. It is considered to be rather reliable as it’s based on the experience and prolonged observation.

Don’t worry if you are not familiar with some of the topics below. We will provide you with all the information in our elaborate articles of our extensive guide to Forex trading technical analysis.

We will cover all aspects of technical analysis of foreign exchange in our section including articles which will explain how to Use; Charts and Trends, Trend Lines, Support and Resistance, Head and Shoulder Patterns, Symmetrical Triangle Pattern, Wedge Patterns, Channel Patterns, Flags and Pennants Pattern and Candlestick Charting.

Article Source - http://www.studyforex.com/technical-analysis.html

Charts and Trends as Technical Analysis Tools

2009-10-26T02:06:00.001-07:00

Trends and Charts: Foreign Exchange Trends

The Foreign exchange market has been in existence for more than 100 years and all technical data have been systematically recorded for future use. During this time forex trends have formed and these forex trading trends tend to repeat themselves periodically. These trends and patterns have been proved to be fairly reliable and consistent and are therefore invaluable to Forex traders. Forex charts and trends will aid traders in becoming successful in predicting market directions as traders know that price movements are governed by forex trends and online forex trends.

Forex trading trends may last for months or even years. Forex technical analysis has proven that once foreign exchange trends are in motion, they tend to keep on moving and therefore traders will usually trade with trends and not against it.

Foreign currency trends may be subdivided into three different time frames that will result in different trading opportunities:

Longer Term Currency Trends are foreign exchange trends that indicate and dictate the underlying economic wellbeing of the country that is represented by the currency. These economic trends may last for months or even years.

Intermediate Currency Trends are foreign exchange trends within the main trend that are shorter lived. These economic trends may last for days or a couple of weeks.

Daily Currency Trends are currency trends that occur within a 24 hour period.

Trends and Charts: Charts

Forex charts are the main tool used for technical analysts by traders. Traders use these Forex charts to look for patterns, abnormalities and variations in price movements in order to predict possible future price movements. These Forex charts are graphs indicating price movement versus a certain time frame. Most charting systems will allow you to add technical analysis tools as overlays on your chart. Price movements may be indicated by means of the line chart, the bar chart or candlestick chart.

The line currency chart is used to present the direction of movement of the market, in either an up, down or sideways direction. The bar currency chart uses single graphical bars to present a single period of time. Each single bar is subdivided into 4 marks that represent the highest point, the lowest point, the opening point and the closing point.

The candlestick currency chart also shows market movement for a set period of time. The body of the candlestick will change color when the market moves up (bullish market) and will revert back on a bearish market. Candlestick foreign currency trading charts are the most popular chart used for indicating price movement on a forex chart.

All of the above forex trading charts and online forex charts may be divided into many different time periods, ranging from minutes to hours, weeks and months. Traders use charts and associated time frames that they are most comfortable with.

Forex charting is considered an art and not relied on as pure science. Understanding forex charts and forex trends will not always lead to winning trades, but will aid traders in making educated guesses.

Article source - http://www.studyforex.com/charts-and-trends.html

Using Trend Lines During Technical Analysis

2009-10-26T01:56:00.001-07:00

Trading Forex trend lines are regarded as the most common element of technical analysis used in Forex. Trend lines are however, also regarded as one of the most underutilized forms of technical analysis.

Trend lines can simply be defined as indicators of momentum in the foreign exchange market.

Foreign exchange trend lines indicate the change in share price over a given time frame and may be used as an alarm to indicate sharp acceleration or deceleration of trends in the market. Trend lines thus incorporate the direction and speed of a trading price. FX trading trend lines can also aid as visual indicators of price patterns during times of concentrations in price. A lot can be deducted from this fairly simple graphic method. Profitable entry and exit points, good position on protective stops and emerging trends are a few. Trend lines are invaluable in forecasting trend reversal (indicating a reverse direction in market price).

What is the difference between FX trading trend lines and other momentum based indicators?

Other momentum based foreign exchange trend lines are constructed by means of formulas and the use of computers and computer software. Forex trend lines are solely created from the human brain and are visual indicators, meant to be used as quick reference charts.

How to draw Forex tend lines:

Draw trend lines through the lows of an increasing trend and draw trend lines through the highs of decreasing trends.

Draw trend lines are drawn through long term closing price indicators.

Normal or logarithmic charts may be used to draw trend lines.

Foreign exchange currency trend lines are only valuable if placed through at least 3 troughs (decreasing market trends) or at least 3 peaks (increasing market trends).

Foreign exchange currency trend lines are not useful if they intersect through currency movement charts.

Two or more points are needed to construct a trend line.

The more points obtained, will increase the accuracy of the deduced support and resistance levels indicated by the line.

A trend line break does not automatically indicate a change in trend movement.

Use at least two points to draw the trend line and a third to confirm the validity of the line.

It is common for any quantity of secondary and smaller trends to form within the scope of the main trend that is plotted.

Types of Trading Forex Trend Lines

Trend lines can appear in three major forms:

Ascending trend – showing a incline in the forex market trend

Descending trend – showing a decline in the forex market trend

Reversal trend – showing that the forex trend has started moving in the opposite direction

These reversal trend lines are characterized by broken trend lines. A trend line is identified as broken as soon as a full length bar body appears on the opposite side of the line.

Trading Forex trend lines are unable to be used to predict levels of support and resistance. The reason is that support and resistance never run at an angle. Support and resistance direction will only move horizontally.

Article Source - http://www.studyforex.com/trend-lines.html

Support and Resistance in Technical Analysis

2009-10-26T01:55:00.001-07:00

Support and resistance analysis forms part of technical analysis and dictates that price movement will tend to stop and reverse at predefined price levels.Support and resistance analysis defines major junction points where variations in supply and demand meet. Let’s take a deeper look into elements of support and resistance trading.

What is “Support”?

Support level is defined as the price level at which point the demand level is strong enough to stop the trading price from declining further. When prices reach this support level it is more likely to bounce off this level, than to break through this level.

The support level indicates the point at which the trading price becomes cheaper and traders become more interested in buying, giving way to a support level where sellers become less interested in selling.

When prices reach the support level it is proved that the increase in demand will outweigh the supply and prices will be stopped from falling below the level of support. When prices decline below the level of support, there is an indication of new willingness to sell. This may also be the case if there is a new unwillingness to buy.

Once the level of support breaks, the cycle will repeat from the start – A decrease in price will awake new interest in buying and a new level of unwillingness to sell -giving way to a new level of support This will form the new lower-level support level.

Support trading can usually be found below the current price, but it is not impossible to trade at or very near support. Support levels are not always easy to identify due to various factors. Price movement is by nature volatile and prices may briefly dip through the support level, before returning upwards. Predicting the point, at which a price is considered to be breaking through the support line, comes with experience and research. Some will only consider this breakpoint if the price closes 1/8 below the current established support level.

What is “Resistance” and “Resistance Level”?

Resistance level is defined as the level at which selling is considered strong enough to hamper the price from increasing any further. The level of resistance theory defines that as a price moves towards resistance, sellers become more willing to sell, and buyers in turn become more unwilling to buy. When the price reaches the level of resistance, supply will outweigh demand and the price will be prevented rising through the resistance level. A break above the resistance level predicts a new willingness to buy and a new lack of interest in selling.

Resistance will not always be strong enough to hold and a breakout might not always be able to break. The bulls must win the bears over before a breakout can be formed. Once the current resistance level has been broken through, the process will repeat and a new higher level of resistance is establishes.

We hope you have found our article on support and resistance trading interesting and that you will now be more confident about support and resistance analysis. Feel free to browse our website for more informative articles on support and resistance trading.

Article Source - http://www.studyforex.com/support-and-resistance.html

Choosing a Great Foreign Exchange System

2009-10-26T01:53:00.001-07:00

Foreign exchange systems have experienced a vast variety of changes over the years and new communications technology has made the efficiency and speed of Foreign exchange systems accessible to the masses.

Many people do not see the importance of implementing a good FX trading system. The difference in making a significant profit on the Forex trading market and running a loss on the Forex trade market can be directly related to the type of Foreign exchange system that you are using.

This FX trading system will allow you to keep up with the market (direct link to Forex market), manage your risks better and most importantly: make better trading profits. The forex system will be your eyes and ears while the Forex trade market runs day and night 24/7 and 365.
A currency foreign exchange system can be defined as any system that forms an automated trading platform through which forex investors can make investment in the foreign currency exchange market. All that is required for a currency foreign exchange system to be implemented is access to a personal computer and access to the internet. These currency foreign exchange systems are software-based programs which can either be purchased or downloaded. Once you sign on to these Foreign exchange systems you are directly connected to perpetual trading world of the global forex market, where you can buy or sell forex currencies.

An advanced online forex trading system empowers you with flexibility and ease of training. New forex investor can first open a demo account, where you trade with forex currency virtually, while building on your trading experience. These FX trading systems allows new users to test the functionality and efficiency of the selected forex system. The FX trading system may aid you on your way with online tutorials and practice runs.

Once you feel experienced enough you may open a mini account with your foreign exchange system. You can use these small amounts to start speculating with strategies that were taught.

How do you go about selecting a good FX trading system?

Make sure that your service provider is underwritten by a standard Forex regulatory authority. All trading through your FX trading system should be transparent at all times and terms and conditions should be clearly stated. Your forex foreign exchange system should offer good “spreads”, generally 2-3 pips for all major forex currencies. Your currency foreign exchange system should offer automated execution features, supply charting tools and use technical indicators.

The system should be based on proved fundamental and technical analysis methods. It is vital to do research on your future FX trading system. Ask for past performances records, historical and risk management features. An ideal forex foreign exchange system should have auto-trading features, allowing your trades to succeed even when you are not available. Multiple leverage ratios should be offered by your Foreign exchange systems, these should include 50:1, 100:1, 200:1 and 250:1 leverage ratios. The FX trading system should provide you facility of margin trading.An ideal forex foreign exchange system should have simple software to help you with your trading requirements.

Article Source - http://www.studyforex.com/foreign-exchange-system.html

Opening an Online Forex Account

2009-10-26T01:52:00.001-07:00

Welcome to our section on opening an online account. Although we are sure that you are raring to go and open a forex account, we urge you to first read through this section before doing so.

Opening an online account is much the same as opening an equity account, although with forex account opening, you are required to sign something called a margin agreement. This forex exchange registration agreement says that the brokerage now has the full right to interfere with your forex trades to protect its interests as you are as of now trading with borrowed money. Once you have taken care of opening an online foreign currency exchange account, simply make sure that you fund your account, and then you will be ready to trade.

There are other topics and questions to consider when opening an online Forex account like; How to succeed at Forex account registration, how to Complete Forex account Confirmation, How to Score the Most Forex Complementary Services, Which Forex Charting package is the best for you? , which Forex News feeds you should keep an eye on? , Why You Should Use Forex Paper Trading, What You Should Know about Forex Micro Accounts, and guides on; currency trading software, Forex Account Activation.

With all this useful general and inside information we are sure you will benefit from secure, successful and satisfying foreign exchange trading experience.

Article Source - http://www.studyforex.com/opening-an-online-account.html

Forex Account Registration

2009-10-26T01:51:00.003-07:00

Signing up for a forex account and opening an online account is much the same as opening an equity account. The only big difference is that, for forex account registration, you are required to sign something called a margin agreement. This forex exchange registration agreement says that the brokerage now has the full right to interfere with your forex trades to protect its interests as you are as of now trading with borrowed money. Once you sign up for forex registration, simply make sure that you fund your account, and then you will be ready to trade.

Make sure you take time to consider your forex registration before you register a forex account. You want to ensure that your FX registration is with a reputable brokerage. You wouldn’t just open an account at any bank and this also counts for your foreign exchange registration.

After your foreign currency exchange registration, you need to define your own basic forex strategy. Fundamental analysis and technical analysis are the 2 basic strategy genres in the foreign exchange market – as is the case with the equity markets. Keep in mind that technical analysis is by far the most used strategy by individual foreign exchange traders.

Technical analysts, like their counterparts in the equity markets, like to analyze price trends. The only main difference between technical analysis in forex, and equities technical analysis, is the time frame. Keep in mind that forex markets are always open 24 hours a day. This means that some technical analysist types need to factor in time and modify strategies to work with the 24-hour a day forex market.

Now, if you think it's tricky to value a company, try valuing a whole country! Forex fundamental analysis is often very complex, and it's normally used only to predict long-term trends. Some traders, however, do trade short term fundamental analysis strictly on news releases. There are various fundamental indicators of currency values released at various times.

Keep in mind that these reports and news releases are not the only fundamental factors to watch. There are also several meetings you should keep an eye on, as you can catch commentary and quotes that can affect markets just as much (if not more) as any report. These forex meetings are often called to discuss inflation, interest rates, and other issues that could affect currency valuations.

By simply examining the commentary and reading the reports, this helps forex fundamental analysts to gain a better grasp of longer term market trends and allow short-term forex traders to profit from happenings that are out of the ordinary.

Article Source - http://www.studyforex.com/registration.html

How to Complete Forex account Confirmation

2009-10-26T01:51:00.001-07:00

After you have spent some time learning about the Forex market advantages, you will probably want to begin the trading process as soon as possible. To fully get to know the Forex trading market you will 1st have to learn how to go about opening your own online Forex account. All your currency transactions will then take place in this account.

Before confirming a forex account, you obviously have to first complete another few steps. To open an account, you have to complete 4 basic steps. Firstly, you have to decide on which account type you want to choose. Secondly, you have to register on the forex website of your choice, as well as enter you personal details.

Thirdly, you need to activate your account and go about confirming a forex account. Lastly, download the Forex trade software of your choice, which will allow you to begin trading.
OK, so now we are on our way to foreign currency exchange account confirmation. Start by choosing a type of Forex trade account that suits your needs. You will see that you will have various account types to choose from, depending on which Forex trading sites you use. If you find the best trading site for your needs, choosing a forex account type and FX account confirmation will be very simple.

One of the key variances between FX Trading account varieties is the size or volume of the actual account. You will find FX trading accounts on the one hand and FX mini accounts on the other, and they all vary in size. Trading account sizes can be anything from twenty-five dollars to ten thousand dollars. The FX account size determines which type of investments you will be able to trade with. Create the forex account based on how much money you have available and remember to confirm a forex account.

Before you do FX account confirmation, during opening, you will be required to input some personal details that will include sensitive credit card details, which will enable you to do real cash transactions. Some websites offer free forex trading and free forex confirmation, which does not ask you to input your bank account details, but you will then only open a demo, and not a long term, account.

You can do most Forex trading registration and foreign currency exchange account confirmations online, even though you are some companies still ask you to register via fax. Luckily this does not happen very often and usually only happens when you confirm a forex account with some small Forex trade websites.

Because forex accounts deal with real money, and security is of the utmost importance, you will have to verify your email address and other personal details, through a couple of necessary steps. Make sure you are sure that you know what the forex website is offering, before you even think of signing the terms and conditions, after which you will go through to the forex confirmation step. You must be dead certain that you know what conditions they offer and what this mean in plain simple English.

Article Source - http://www.studyforex.com/confirmation.html

How to Score the Most Forex Complementary Services

2009-10-26T01:48:00.003-07:00

While its true that there’s no such thing as a 'no strings attached' free lunch, its good to know that there are still some foreign currency exchange complementary services doing the rounds.

Some brokerage firms' Forex complementary services include standing orders. The key benefits of having a standing order as a complementary service are that the market is monitored on your behalf. You just pick your desired exchange rate and your order will be automatically processed if the forex market reaches your chosen rate. The good thing about this kind of FX complementary service is that you will also not be under any obligation to make a definite purchase if the market doesn't really reach your desired rate.

A standing order enables you to capitalize on positive exchange rates when you are not able to personally monitor the market and or do a transaction. Some brokerage firm representatives can assist you in deciding on a rate that is appropriate for current market conditions. Standing Orders is one of the best complementary services to have and it can monitor the market 24 hours a day for mostly up to 14 weeks, after which you must choose whether to renew your Standing Order if the market hasn't reached your specified rate. Most firms also offer you the chance to cancel your standing order if it hasn't already been executed should you change your mind about your currency needs.

Another one of the great Forex complementary services is when your broker provides you with free, real-time streaming quotes. It’s great that web brokers are now being able to offer this complementary service as it is something that was once only really available through expensive full-service firms.

When we are looking at foreign exchange complementary services, we should note that you are more likely to get these free services at full service brokers, although the internet has made it easier for discount brokers to also offer freebies. When you choose to use a discount broker, you should be able to make your own decisions, and be of the opinion that saving on trading cost is more important than added FX complementary services. Full-service brokers are typically better for novices as they offer personalized investment advice, as well as investment research reports that were produced by their company.

Remember not to overlook discount brokers as more of them are starting to provide research reports on various types of stocks, bonds, mutual funds, and other investments, and others are even making some research reports available to their clients as one of their free services.
If you can get some bundled foreign currency exchange complementary services for the same price or slightly more, then all the better!

Article Source - http://www.studyforex.com/complementary-services.html

Your Currency Trading Software Programs

2009-10-26T01:48:00.001-07:00

These days, there are so many forex software programs available; it’s hard to know what to choose. We've read up and tried all the Forex programs for you and came up with a list of the top forex trading software online.

NeoTicker is one of the trading software programs that provide real-time analysis and direct order routing with flexibility and power enhancement to what data brokers and vendors offer. This forex software is supported by the following data vendors and brokerages: eSignal, RealTick, myTrack, Ninja Trader, Interactive Brokers, DTN IQFeed, QuoteSpeed, FXCM, MB Trading, QCharts , EFX Group, Open E Cry, DTN Satellite, etc.

A Forex trading software package really worth mentioning is TradeStation, which was designed to help you find forex trading strategies, and to not just place random trades. This award-winning program trading software lets you back-test your trading thoughts before you trade. Furthermore, it then harnesses your PC's power to monitor the markets and instantly send your forex orders to the marketplace. This FX software also offers deep-discount commissions and the ability to back-test and fully-automate your own options, equities, futures, or forex trading strategies.

eSignal is another award-winning foreign exchange software package with real-time global market quotes, news and fundamentals, as well as decision support, charting and all the professional forex tools that institutions and individual investors demand, delivered directly to your PC via the Internet.

Fap Turbo robot is another favorite currency trading software that seems to tick all the boxes. This FX software is affordable, easy to install, and comes with a money back guarantee. This foreign exchange software has been tested extensively and works automatically for you, which means that it will save you a lot of time and effort.

As with any great currency trading software, the idea behind using FapTurbo isn't just about money. It's also about trading comfortably, in what little time you have, and being free to do the other things that you enjoy, while making another forex income stream.

Our program trading software list won’t be complete without mentioning QuoteTracker. You probably know that there’s much more to a quote than a number and a ticker symbol. This trading software will help you track up to six hundred symbols with a big range of charts and more than a hundred technical indicators. This forex software system will help you spot potential forex opportunities using streaming option chains. You will be able to research fifteen years of historical data, track all the streaming Level II quotes and then chart up to twenty days of intraday data. Furthermore, this trading software allows you to place trades and monitor forex transactions in real time, all from one simple-to-use program.

Article Source - http://www.studyforex.com/trading-software-programs.html

i- Forex Exchange

Why Is The Macedonian Stock Exchange ineffective?

Spend productively into the Foreign Exchange Market

Where to Exchange Money

A rapid Look at Currency Exchange fundamentals

A gainful Online E-Currency Exchange Business For The Internet dealer

Current Inflation

Sterling romps up

UK inflation figures send sterling higher

The euro advances against the dollar

Euro continues to gain but turnaround seen

Sterling plummets as economy contracts

What next for Sterling?

Is this a blip, or the beginnings of a double-dip?

US economy accelerates – dollar turn around seen

Spotlight on Egypt

Dollar weakness, but for how long? Dollar weakness, but for how long?

Sterling romps up

US payrolls down and unemployment down...huh?

Interest rates - an interesting dilemma

George grinds the gears

UK interest rates on hold

Sterling bulls return for a busy week ahead

Eurozone cracks begins to show

Sterling dives on dovish sentiment

Sentance gives sterling a boost

Middle East crisis overshadows MPC minutes

USD/CHF Classical 02.23

USD/NOK Breaking Down Below Medium-Term Range Base

USD/JPY Classical 02.23

China Weekly: Concerns Mount Over Slowing Growth; PBOC Sends Mixed Signals on Yuan

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