Tuesday, July 10, 2012
We started today's webinar by discussing the summer malaise period and how traders should position themselves within the currency market. In this type of trading environment, volumes are usually low and you may have to adjust your trading plan to account for the erractic price behavior and whipsaw activity normally seen during this time of the year. For the past two days, the Eurogroup Finance Ministers have been meeting in Brussels to discuss further details surrounding the Spanish Bank Bailout and plans for EU Fiscal Consolidation. All of the Eurozone countries have agreed to offer Spain their first batch of support of over EUR30 billion through the EFSF temporary bailout mechanism, and later through the ESM, for direct recapitalization of the Spanish Banks. Finance Ministers have also agreed to give Spain one extra year to get their budget deficit on target below 3%.
In this webinar, we described the usage of the rsi indicator, slow stochastic indicator, and fibonacci retracement tool as a means to identify possible trade entries after corrective waves or consolidation in the market. Sometimes, it is better for an intraday trader to sell into weakness and buy into strength, rather than following the conventional view of the buy low/sell high principle. In addition to this, we also described ways to identify price reversal patterns on your chart that could signal the beginning of a trend reversal or a deeper retracement in price.
In today's V.I.P. webinar, we briefly discuss the current price behavior in the EUR/USD pair and we also place a few live trades using the Slumdog Forex trading system.
Thursday, October 4, 2012
The EUR/USD pair and other major asset classes have been exhibiting lower volume & volatility ahead of tomorrow's Non Farm Payroll Numbers, as investors remain hesitant to get sucked into any position in this type of risk environment. Market uncertainty has dominated the trading landscape for some weeks now, as Central Bank Policy measures are making it difficult for traders to accurately forecasts price behavior. On today, the euro strenthened in comparison to the greenback on hope generated by a few risk events from earilier this morning. Today's price action in the EUR/USD pair reflected the market's response to two central bank policy meetings and a Spanish bond auction of 2 to 5 year debt. The first of today's risk events, was Spain's successful EUR3.99 billion ($5.2 billion) bond auction. This sale was closely monitored as the market continues to wait for a formal bailout request from Spain. This request for aid would trigger the ECB's OMT (Outright Monetary Transaction) program, which would involve the purchase of shorter-dated debt to help bring borrowing costs lower for Spain and other distressed nations in the Eurozone. Unfortunately, Spain has refused to formally ask for help from the EU, IMF, & ECB over fears that certain conditions attached to the bailout aid would further cripple the already fragile Spanish economy. The Spanish 10-yr bond yield remained flat and hardly moved after the bond auction results were released.
We also had the BOE (Bank Of England) release their policy decision to leave their interest rate unchanged at 0.5% with no additional stimulus. 45 minutes later, the ECB (European Central Bank) announced their decision to leave interest rates unchanged at 0.75%, which drove the EUR/USD pair higher. In regards to the Unemployment Claims, it only rose by 4,000 to 367,000 during the last week of September.
During the last half of the trading session, the minutes to the September FOMC meeting were released. At the last meeting, held Sept. 12-13, the Fed announced a major round of asset purchases aimed at stimulating the economy and pulling down the unemployment rate, which has ranged between 8.1% to 8.3% this year. The Fed announced it would buy large quantities of mortgage bonds until the job market substantially improves. The FOMC minutes revealed that all members except one agreed that the outlook on inflation & economic activity called for more monetary accommodation. This information helped to improve risk sentiment and for the day we saw the EUR/USD pair rally 129 pips from the session low at 1.2903 to the session high of 1.3032.
In today's V.I.P. webinar, we briefly discussed the current price behavior in the EUR/USD pair and current levels of support & resitance for trade entry. We also discussed the effects that the Presidential election will have on financial markets.