Forex News and Reports

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

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

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.

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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.
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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.

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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.

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• 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

“The sum and tendency of the transactions of the Stock Exchange represent the sum of all Wall Stree’s knowledge of the past,imediate and remote,applied to the discounting of the future.

There’s no need to add to the averages,as some statisticians do,elaborate compilations of commodity price index numbers,bank clearing,fluctuations in exchange,volume of domestic and foreign trades or anything else.Wall Street considers all these things.”(Hammilton-The Stock Market Barometer-Dows Ideas)

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I like this phrase:”The development of rock-solid discipline is among the most challenging endeavors to which a trader can aspire.

The primary reason for failure as a speculator is a lack of disciplined adherence to successful trading and price risk management strategies as opposed to an inability to discover profitable trading methodologies.”

To be a successful forex trader you have to be :

• opend minded
• patient
• objective
• consistent
• disciplined
• even-minded
• nonattached to results(good or bad)
• able to learn fast , especially from your mistakes

Education and the Labour Market

A major area of research at the ZEW in the field of education is the analysis of the link between education and labour market outcomes. As a matter of fact, education is known to be one of the main determinants of labour market success. Therefore, it is of crucial importance for policy-makers to understand how efficient the education system is in endowing youths with qualifications which permit them to successfully integrate into the labour market. An efficient education provides qualifications that contribute to maximising employment, production and overall welfare while keeping social inequalities as small as possible. Whether or not these goals are achieved needs to be analysed .

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[EUR-AUD] The sharp sell-off seen last session confirmed the bearishshooting-star set on Monday and with daily tools pointing down, downside is now vulnerbale, exposing lower support at

1.6685. Intraday strength should be seen as selling opportunity.

Time Zone : GMT+2

London : 9.00 AM - 18.00

New York : 14.00 - 23.00

Tokyo : 2.00 AM - 10.00 AM

Sydney : 23.00 - 07.00 AM

There are at least two benefits in knowing the ‘trading hours’ of Forex markets:

1. The first hour after a major market opens is considered very important and often indicates how the session might develop.
2. In periods when market ‘trading hours’ overlap, liquidity tends to increase as more traders participate in the FX market.

Ralph Nelson Elliott believed that the Forex market moved in waves or cyclic patterns based on the psychology of traders which he named “The Elliot Wave Theory”. Elliot noticed this pattern in the stock market and saw that the markets were not as chaotic as one thought. Elliot noticed that the markets moved in emotional patterns as a cause of outside influences.

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The popularity of forex currency trading system continues to grow as more and more people have realized the potential income that they can earn from forex trading.

With a massive daily profit of $1.5 trillion, forex trading has definitely surpassed the combined profits of bond market and global stock market. This is probably the main reason why many people were enticed to try forex trading.

Along with the massive growth of forex trading comes the forex day trading. As its name implies, forex day trading mainly refers to the actual selling and buying of various foreign exchange currencies all throughout the day. Its main purpose is to come up with no net variation in place at the last part of the day. In other words, for every forex currency bought, there should be one currency sold.

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Pivot points indicate reversals in the market.

A pivot is a candlestick or bar which has one candle or bar on each side , higher or lower than the middle candle or bar .

Pivot points are yet another useful tool that can be added to any trader’s toolbox. It enables anyone to quickly calculate levels that are likely to cause price movement. The success of a pivot-point system, however, lies squarely on the shoulders of the trader, on his or her ability to effectively use the pivot-point systems in conjunction with other forms of technical analysis.

After popping up to 1.2835 in the aftermath of the ECB announcement the EUR/USD spent most of the Asian and European sessions quietly consolidating around the 1.2800 level. Despite the absence of “vigilance” in his remarks, Mr. Trichet’s general tone in the post announcement conference was decidedly hawkish as he stated that the central bank will continue to progressively remove liquidity if EZ growth proceeds at the current pace. For the typically non-committal Mr. Trichet this statement was tantamount to announcing that the ECB intends to take rates to 3.5% by year’s end.

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When a trader buys (goes long) or sells (goes short) a currency pair, the value of the currency pair, as an instrument, initially is close to zero. This is because (in the case of a buy) the quote currency is sold to buy an equivalent amount of the base currency. As the market rates fluctuate, however, the value of the currency pair position held will also fluctuate. Thus, if the rate for the currency pair goes down, the trader’s long position will lose value and become negative. To ensure that the trader can carry the risk in the case a position results in a loss, banks typically require sufficient collateral to cover those losses. This collateral is typically referred to as margin.

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It was a tradeoff for Canadian dollar in Thursday’s session.  The Bank of Canada’s quarterly monetary policy report killed any possibility of an eighth interest rate hike in the foreseeable future, while crude oil prices were soaring to fresh all-time highs.  This situation brings to the forefront the battle of what will drive the loonie in the months to come – the commodity correlation or the halt to interest rate hikes and the implications for dour growth expectations.

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The pound strengthened in early European trade Thursday, despite having only one economic release.  The jump above 1.8400 followed yesterday’s substantial drop to a low of 1.8309 following the release of the US trade deficit, which showed only a modest increase.  The retracement of some losses today came before the release of the BCC Second Quarter Economic Survey.  Cable was relatively unaffected by global uncertainty, despite oil reaching a new high above $75 in New York on Nigerian turmoil, and Israel launching attacks against a Beruit airfield.  On tap at 10:30 are two late announcements out of Britain.  The Leading Indicator Index for May and the Coincident Indicator Index are not expected to show major differences from their respective 0.6% and 0.2% readings in April.  As of 10:05 GMT GBP/USD traded at 1.8376, up from Wednesday’s New York close of 1.8339.

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OTTAWA (AFX) - The Bank of Canada has kept its main interest rate unchanged at 4.25 pct, after a series of monthly rises.
The bank said its outlook for economic growth and inflation in Canada has not changed, despite “a little stronger” than expected growth in the first half of the year and a dollar trading “somewhat higher” than expected.
There was a further shift in demand from exports to domestic consumption while the economy continues to operate “just above its production capacity,” the bank said.
But, inflation has remained above its 2 pct target, due to higher energy prices, the bank said.
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