Forex News and Reports

Where you stand in relation to the overall technical evidence may be more important than an individual candlestick pattern.

For example, a bullish candlestick in a major bearish  market should not be used as a buy signal. A bullish candlestick formation, especially when confirmed by other technical indicators in a bull market, would be a buying signal point.

I’ve found this proverb in a trading book and i like it :

“A prudent man has more than a string in his bow “

After a dropping for most of the Asian session, EURUSD staged a vicious one-way rally that took the pair to record highs by early European trade.

The US dollar posted its largest single-day loss in over a year, as speculation for future US Federal Reserve interest rate cut doomed the greenback to further drops. Outlook has grown increasingly dim for the downtrodden US currency, as both speculative and sovereign traders show very little interest in holding dollars. Continued speculation that key oil producing countries may drop the dollar as their primary reserve currency has clearly hurt the USD, while increasingly pessimistic forecasts for US economic growth and interest rates has likewise hurt confidence in the dollar.

Retail Forex Trading Explained…

A few year ago, Dirk du Toit wrote this book.

Below are some of his ideas, as i can remember them. I hope this will help you to understand better the forex exchange market.

he has a personal trading system, 4×1 and median system.

it’s very important to understand probability.

trading is not a spectator game.

don’t forget that, we traders, are the market

the forex market is a game, a game of chess…

stop further losses

in currency trading, you live in real time, or you don’t live at all.

he believes that you must never forget that in the end forex is only a business where you must have profit.

don’t underestimate your common sense.

don’t use a very high leverage.

Forex exchange market is not a common exchange market.

(more…)

Following is a table of forecasts for New Zealand’s official cash rate at the four remaining reviews this year.

2007           July    Sept.    Oct.    Dec.
---------------------------------------------
Median         8.25%   8.25%   8.25%   8.25%
---------------------------------------------
ANZ National   8.25%   8.25%   8.25%   8.25%
ASB Bank       8.25%   8.25%   8.25%   8.25%
Barclays       8.0%    8.0%    8.0%    8.0%
BNZ            8.25%   8.25%   8.25%   8.25%
Citigroup      8.25%   8.25%   8.25%   8.25%
Deutsche       8.25%   8.25%   8.25%   8.25%
First NZ       8.25%   8.25%   8.25%   8.25%
Goldman Sachs  8.0%    8.0%    8.0%    8.0%
HSBC           8.25%   8.25%   8.25%   8.25%
ICAP           8.25%   8.25%   8.25%   8.25%
JPMorgan       8.25%   8.25%   8.25%   8.25%
Macquarie      8.25%   8.25%   8.25%   8.25%
RBC            8.25%   8.25%   8.25%   8.25%
TD             8.0%    8.0%    8.0%    8.0%
UBS            8.0%    8.0%    8.0%    8.0%
Westpac        8.25%   8.5%    8.5%    8.5%
==============================================

Trading the moment of the NFP relaese is hit and miss, trading the momentum of the NFP is a better bet.

The volatility of the 1st Friday of each month that NFP is released is not just down to the number of jobs created, this is a complex release that has four components that Traders must be aware of:

1. The actual number of jobs reported as being created this month; July’s number is expected in at 125k, and is an average of analysts’ figures that range from 300k to 20k. The High to Low difference in opinion is enormous.
2. The revision to the previous month’s number; Probably as important as the new number, the revision can add 50k to the previous amount, and that is what creates the volatility as Traders re-align their previous thoughts on what happened four weeks ago.
3. The Employment Rate; Currently at 4.5% is one of the lowest in the world and has stayed between 4.5-4.6% recently. Any move outside this area would be dramatic
4. Average Hourly Earnings; Looking at coming in around 0.4%, this is the number that the Fed stated was causing it concern as an inflationary read.

Click below for full article : (more…)

Measures the number of new jobs created in the previous month, excluding the farming industry. A rising trend has a positive effect on the nation’s currency. The number of new jobs being created is one of the most important indicators of the economy’s health because consumer spending, which is highly correlated with labor conditions, makes up a large portion of GDP. This report is the first of the month that relates to labor conditions, making it susceptible to big surprises.

(more…)

Rising oil prices and strong US job growth sent carry trades to fresh highs today.  With the labor market sparing the US economy from a major downturn, the market is hungry for risk and yield.  Selling in the Japanese Yen has been so strong that the currency hit a new record low against the Euro, a 20 year low against the high yielding New Zealand dollar, a 16 year low against the Australian dollar and a 14 year low against the British pound.  In other words, the Yen crosses hit decade if not multi decade highs.  The move in oil prices has also pushed the Canadian dollar to a new 30 year high.

(more…)

Each month, excluding January, the Reserve Bank of Australia (RBA) Board meets to set the nation’s short term interest rate (i.e., “cash rate”). The Board announces the decided rate shortly after the meeting, and when there is a change in rates they also releases a statement that contains the economic conditions that effected their decision. A rising trend in interest rates has a positive effect on the nation’s currency. Short term rates are the paramount factor in currency valuation; traders look at most other indicators merely to predict how interest rates may change in the future. High interest rates attract foreigners looking for the best “risk-free” return on their money, which can dramatically increases demand for the nation’s currency. The decision on where to set interest rates depends mostly on inflation. The primary objective of the central bank is to achieve price stability; when inflation rises above an annualized rate of approximately 3%, they will respond by raising interest rates in an attempt to bring prices down.
(more…)

How Will The Markets React?
Interest rate announcements are always important for the foreign exchange market. With the Bank of England, this upcoming rate decision will be market moving regardless of whether they decide to raise interest rates or not. After having raised rates in May and then leaving them unchanged in June, the BoE is expected to lift rates from 5.50 to 5.75 percent tomorrow. Of the 60 economists surveyed by Bloomberg, 52 or 87 percent of them are calling for an interest rate hike. This almost unanimous view puts the “surprise” element of the event risk to the downside. Therefore if the Bank of England leaves rates unchanged or raises rates and then issues some very neutral language in their statement, we could see a far larger move in the GBP/USD than if they do exactly what the futures curve is pricing in, which is to raises rates and remain hawkish. According to futures traders, the BoE could bring rates up to 6 percent by the end of the year. The recent movements in the currency, bond and stock markets indicate that British pound and Gilt traders are expecting higher rates while stock traders are not.

(more…)

Each month the Bank of England (BOE) Monetary Policy Committee (MPC) votes on where to set the nation’s short term interest rate (i.e., “bank rate”). Shortly after each vote, the MPC releases a statement that contains the outcome of their vote, a brief commentary of the economic conditions that effected their decision, and most importantly, clues regarding the outcome of future votes. A rising trend in interest rates has a positive effect on the nation’s currency. Short term rates are the paramount factor in currency valuation; traders look at most other indicators merely to predict how interest rates may change in the future. High interest rates attract foreigners looking for the best “risk-free” return on their money, which can dramatically increases demand for the nation’s currency. The decision on where to set interest rates depends mostly on inflation. The primary objective of the central bank is to achieve price stability; when inflation rises above an annualized rate of approximately 2%, they will respond by raising interest rates in an attempt to bring prices down.

Measures overall economic health by combining ten leading indicators including average weekly hours, new orders, consumer expectations, housing permits, stock prices, and interest rate spreads. The index is published monthly by The Conference Board, a leading private US research group, but traders tend to pay little attention because the components that make up the index are reported at an earlier date.

If crude continues to rise, it will not be long before the average price of gasoline in the US moves back above $3 a gallon.  When this happens, companies around the world will begin to add fuel surcharges, which will also boost core inflation.  Over the past few years, we have seen oil become the primary driver of hawkish monetary policy across the globe.  The higher oil prices rise, the longer central banks will keep interest rates high, which in one word, boils down to CARRY.

(more…)

How Will The Markets React?

Next week, the US economic calendar will be exceptionally busy and US manufacturing ISM is the first of many key pieces of data due for release. Regional indexes have been strong.  Both the Empire State and Philadelphia Fed surveys jumped in the month of June.  The Empire State survey reached a 1 year high while the Philly Fed survey hit the highest level since March 2006.  Even though Chicago PMI fell in the month of June, it still remains above 60, which is well into expansionary territory.

(more…)

Today’s economic calendar was a good follow up to the Fed’s decision to leave rates unchanged at the end of its two day meeting yesterday. The central bank’s favored inflation gauge cooled to a new multi-year low, while weak consumer spending numbers added another facet to the concerns for the economy.

(more…)

WarRen Buffett is acknowledged by investors around the world as the world’s best investor.

Here are some of his investing secrets :

1. Invest in quality businesses, not stock symbols.
2. Don’t invest for ten minutes if you’re not prepared to invest for ten years.
3. Scan thousands of stocks looking for screaming bargains.
4. Calculate how well management is using the money they have.
5. Stay away from “glitter” stocks.
6. Know what a fat pitch is and what to do with it.
7. Calculate how much money you will make, not whether the stock is undervalued or overvalued according to some academic model.
8. Remove the weeds and water the flowers - not the other way around.
9. Become a conscious investor.

The main economic law of supply and demand is that markets that offer the highest return to investment will attract more investors and capital. These markets are those where the nations offer the highest rates and in this way they will create the most demand for their currencies.

(more…)

A good trader should have a plan with specific guidelines.This plan should answer to some of these questions :

• How the market works ?
• What is your purpose ?
• What will you do in order to get to the edge ?
• Are you prepared to have some bad trades ?
• Can you “survive” to the worst scenario ?

• thinker not “feeler” - can see the big picture
• good self-esteem
• non-conformist - follow their ideas
• strong math skills
• very strong honesty
• strong integrity
• don’t get caught up in the excitement