An important top for Euro/Usd?
Posted on April 30, 2008 in ()
An important top for Euro/Usd?
The Federal Reserve appears to be doing all what it can to take the economy back on track, but it does not have to capacity to solve everything. Market trends must follow their natural course until new opportunities will emerge. The European currency, in the mean time, seems to have reached an important top. As a result, the bearish correction, within a long term bull trend, might continue.
Time for change in the financial markets
On March 18th, the Federal Reserve cut fed funds and the discount rates by 75 basis points to 2.25% and 2.50% respectively. In the final speech, FOMC underlined a weakening economy, a softener consumer spending and a milder labour market. A larger move was in the cards, but the Federal Reserve probably believes that the injection of liquidity of the past weeks could improve the economy over the medium term. Are they right?. Only time will tell. Financial markets are going through an important consolidation and Bear Stearns debacle could be one of the many. In fact, between the 80¡¦s and the 90¡¦s more than 20% of the financial sector companies disappeared in a way or in another. At current prices, the Standard & Poor¡¦s index might try to rise to higher levels, but sells could start again, if the important support line at 1210 is overcome. Another rate cut is possible by mid-year, although some Fed officials are beginning to consider inflation as an increasing menace. The fast decline of crude, gold and other commodities from the highs could also be the consequence of this different prospective, but it should remain a bearish correction within a strong long term bull trend. In reality, inflation will remain with us for a long time. The Producer Price Index (PPI) decreased to 6.4% year over year in February from January¡¦s 7.4%, but core prices increased to 2.4% from 2.3%.Dollar Extends Fall Vs Yen On Weak Stocks, Risk Sentiment
Posted on April 30, 2008 in ()
Dollar Extends Fall Vs Yen On Weak Stocks, Risk Sentiment
The dollar recently fell to an intraday low against the yen as lower U.S. stocks knocked down risk sentiment.
The dollar Tuesday morning dropped within an hour from a high of Y103.97 to its lowest level since last Wednesday, Y103.22.
The Dow Jones Industrial Average was recently down by about 65 points.
The dollar typically falls versus the yen when stocks are trading lower, as investors turn toward the safety of the lower-yielding yen on lower risk appetite.
"Equity markets have been selling off since the open," said Adarsh Sinha, foreign exchange analyst at Barclays Capital in London.
"Stop losses are being taken out as well, which is why the move has been so sharp," he added. "Risky assets selling off."
Late morning Tuesday in New York, the euro was at $1.5605 from $1.5640 late Monday, while the dollar was at Y103.35 from Y104.17. The euro was at Y161.26 from Y162.92, according to EBS. The U.K. pound was at $1.9713 from $1.9897 late Monday, and the dollar was at CHF1.0327 from CHF1.0347.
Still, John McCarthy, manager of currency trading at ING in New York, said the dollar's sharp move against the yen is surprising considering that the DJIA hasn't fallen closer to 100 points. The fall so far isn't typically enough to send the dollar down so rapidly against the yen, he said.
Traders are likely "getting out of a lot of yen crosses before the (Federal Open Market Committee meeting) decision," McCarthy said.
"It's a risk reduction trade," he said, echoing Sinha's sentiment.
The FOMC is meeting Tuesday and Wednesday and will decide whether to cut its target interest rate again. It is expected to ease rates by 25 basis points and signal a pause in future rate cuts.
USD/JPY: The Dollar fell against the Yen
Posted on April 30, 2008 in ()
USD/JPY: The Dollar fell against the Yen
Furthermore, the ActionForex Technical Team advances: “Note that another rise to 104.96/108.59 resistance zone as long as this channel support holds. However, break will be the first signal that whole corrective rebound from 95.77 has completed and will put focus back to 100.02 support.”
The Mind of a Trader
Posted on April 30, 2008 in ()
The Mind of a Trader
The Beach Ball
Have you ever tried to hold a beach ball under the water? You might be successful for few moments, however it only takes a small change in how you are holding it to make it burst up out of the water, hit you in the face and splash you all over. Sometimes, we as traders try to hold the beach ball under the water. We want the big success, the big win, the huge profits, etc. in a short timeframe. This rarely happens. What are your current trading traits? What do you expect of yourself? Are you open to new ideas? Are you willing to spend the time needed to build the skills and knowledge base needed to reach your goals?
Getting Started in Currency Trading
Posted on April 30, 2008 in ()
Getting Started in Currency Trading
While the Foreign Exchange (FOREX) market can be a very profitable place, you must have a firm understanding of how to operate within this environment if you intend on achieving any success. That’s why you need Getting Started in Currency Trading, Second Edition. This reliable resource—written for both newcomers and those with some FOREX experience—puts trading world currencies in perspective, and shows you exactly what it takes to make it in this field.
Filled with in-depth insights and practical advice, Getting Started in Currency Trading, Second Edition opens with a detailed description of the FOREX market and contains a section of FOREX terms that are clearly defined with examples. It quickly moves on to address some of the most essential elements of currency trading, including:
- · The rapidly expanding and evolving online trading marketplace for spot currencies, generally referred to as retail FOREX
- · The process of initiating and liquidating a live market order
- · The advantages and disadvantages of fundamental and technical analysis
- · The wealth of FOREX products and services now available from third-party vendors
- · The psychology of trading and the stresses that may accompany this endeavor
- · Advanced strategies such as rollovers, hedging, and arbitrage