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Friday, May 17, 2013

The forex market is closing the trading week with another rally in the greenback as speculation over an imminent reduction of QE3 continue to support the dollar. Prior to the opening of the NY trading session, there was market chatter that the ECB was considering the possibility of a negative deposit rate so the common currency began to weaken and sell off at the 1.2885-90 resistance level. Later, The US Dollar Index or DXY, broke above it's 2012 high of 84.10, which created broad dollar gains across multiple currency crosses. This was the catalyst that initiated the deeper selloff in the EUR/USD pair. Once the EUR/USD broke through the 1.2840 support (May 15th low), stops were triggered and shorts were added to send price to the 1.2800 psychological level where price eventually found support at 1.2796.

In today's V.I.P. trading webinar, we discuss price action in the EUR/USD and NZD/USD, and look for opportunities to place orders in the market using the Slumdog Forex Trading System.

Tuesday, May 14, 2013

Earlier in today's trading session, the EUR/USD continued it's whipsaw behavior as headlines from both signs of the pond (US & Eurozone) kept the common currency locked within a range. German ZEW numbers basically came in unchanged at 36.4 for May, when last month's number was only 36.3.  This failure to beat the forecast of 38.2 did not change investor sentiment since the Eurozone Industrial Production number beat expectations at 1.0%, which neutralized the weak Zew reading. However, risk sentiment eventually leaned in favor of the greenback as it benefited from both safe haven flows and improving US fundamentals that caused investors to search for yield in equities. The DXY or USD Index rallied, along with global equities and US Treasury yields. This risk appetite was created despite the rumors of a potential tapering off of QE by the FED. The EUR/USD pair fell 98 pips from its session high at 1.3029 to a session low of 1.2931 where price found support at the 61.8% fibonacci retracement level of the rally starting April 4th at 1.2740 to the May 1st High at 1.3243. Most of the dollar-demoninated crosses saw USD strength including the USD/JPY which broke above the 102.00 resistance.

Later in the trading session, David Tepper, who is the hedge fund manager at Appaloosa Management, stated in an interview that he is definitely remaining bullish on equities and this was the final catalyst that improved risk sentiment for the day and we continued to see USD strength for the remainder of today's trading session.
 

Thursday, May 9, 2013

In today's V.I.P. webinar, we briefly discuss the current price behavior in the EUR/USD pair and the fundamental news & events pushing market prices. We also attempt to place a few live trades using the Slumdog Forex trading system.

Wednesday, May 8, 2013

The record close in the Dow above 15000 created the risk appetite that initiated the move higher in the EUR/USD early in the Asian Session. But, it wasn't until the release of China's trade balance report from April, which reported a trade surplus of 18.2 billion, that we began to see a little bit of steam added to this rally. Good numbers out of China supports the euro since the eurozone is China's biggest trade partner.

Asian Central Banks began to buy at 1.3090-1.3095 which set the tone for stops to be hit at the 1.3112 level. The 100 Day Moving Average at 1.3158 poses a much more significant resistance.

In today’s technical analysis session, we described price action in EUR/USD and identified common areas of support & resistance for trade entry.

Tuesday, May 7, 2013

In today's Trading Webinar, we discussed price action in the EUR/USD and the reasons for the tight range-bound activity despite the pro-risk market environment .

A better than expected German Industrial Orders from March and short-covering were two of the main reasons for the initial break out of consolidation and rise in the common currency.

Thursday, May 2, 2013

In today's V.I.P. webinar, we briefly discuss the current price behavior in the EUR/USD pair and the fundamental news & events pushing market prices. We also attempt to place a few live trades using the Slumdog Forex trading system.

Wednesday, October 17, 2012

There was a positive handover into today’s trading session for the EUR/USD pair as risk appetite continued to dominate the forex market for another day. The recent credit rating decision to hold Spain at a Baa3 status from Moody’s Investor Services caused the euro to pop higher during the Asian trading session. Although there was risk appetite in the market, the rally was very limited and well subdued. On today, we saw the EUR/USD rally 86 pips from the session low at 1.3054 to the session high at 1.3139.

In today’s technical analysis video, we will describe price action in EUR/USD and identify common areas of support & resistance for trade entry.

Tuesday, October 16, 2012

Good fundamentals from both sides of the pond (US & Europe), was the driving force behind the risk on environment for today and we saw the euro outperform major currencies for the past two trading sessions.

During the European Session, the October ZEW indicator for Germany increased for another month by 6.7 points primarily due to investor relief over the ECB's unlimited bond purchasing program. We also heard news that German lawmakers were open to extending a precautionary credit line to Spain, in an attempt to initiate a first step in Spain formally requesting aide from the ESM. This news relieved investor's fears and caused the EUR/USD and other beta assets to rally on risk appetite. This risk sentiment continued into the New York Trading Session.

The EUR/USD continued its climb higher after US CPI, TIC Data, and Industrial Production Data was released better than expected. The US consumber price index rose by 0.6% for the month of September as gasoline costs jumped, which stoked concerns about inflation. Also, net buying of long-term equities, notes and bonds by international investors rose for the month of August to $90 billion as foreign investors sought shelter from the European debt crisis. US industrial output had also rebounded 0.4%.

Thursday, October 11, 2012

There was a negative handover from yesterday's trading session into today's trading session as news of S&Ps downgrade of Spain's credit rating to BBB- put pressure on the common currency. As Spanish 10yr bond yields rose, we saw the price of the EUR/USD pair fall during the first half of the Asian trading session and it found support at 1.2825, which became the session low for the day. It was at this level where market sentiment shifted from being risk averse to having risk appetite as bids from Middle Eastern Sovereigns & Russian Banks caused the pair to rally & retrace all of its losses from earlier. There was news of a single no-touch barrier option at 1.2800 that these Asian institutions defended from being triggered and this initiated the move higher. In addition to this, investors also hoped that the recent Spanish downgrade, along with the fear of rising bond yields in Spanish paper, will force Spain to formally request for aid from the ESM bailout fund, which would trigger the ECB's Outright Monetary Transaction. This news eased the market by pushing Spanish bond yields lower and initiated the risk rally.

Good economic numbers out of the US also enhanced the risk appetite in EUR/USD. Jobless claims from last week fell to a 4 year low at 339,000, which was a 30K drop from the previous week's jobless claims number. The US Trade deficit also widened to $44.2 billion, during the July to August period, as slower global growth reduced foreign demand for US goods or exports. This may cause a rebalancing towards risk and an intentional weakening of USD by the FED to improve demand for US exports. So, this news also contributed to the risk-on rally in EUR/USD. The pair had climbed 125 pips, from the session low at 1.2825 to the session high at 1.2950, where price found resistance for the day.

In today's V.I.P. webinar, we discussed common areas of support & resistance in the EUR/USD pair and we also attempted to place a few live trades using the Slumdog Forex trading system.

Tuesday, October 9, 2012

When trading in thin volume & low volatility environments, any type of rumor or false news can create such a huge market response or over-reaction, that it can prematurely push the price of asset classes into overbought or oversold territory. During today's price action for the EUR/USD pair, we saw this exact scenario play out earlier in the European trading session. About 30 minutes following the European Open, there was false information released that Spain's 10-yr bond yield breached above the 6.00% level. This news caused strong selling and flight to safety in the EUR/USD pair that pushed price towards the 1.2900 psychological level. It was later discovered that the group who released this false information had been looking at the wrong bond issuance for the Spanish 10-yr paper and later retracted their statement. However, the damage had already been done. The EUR/USD eventually pared some of it's losses on a deep retracement towards resistance at 1.2960, but continued its decline on the backdrop of statements released by ECB President Mario Draghi about further weakening in the Eurozone and also the World Bank's lower growth forecast for China with a revised 7.7% GDP projection for 2012.

In today's V.I.P. webinar, we discussed the current price behavior in the EUR/USD pair and we also attempted to 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.

Wednesday, October 3, 2012

In today's V.I.P. webinar, we briefly discuss the current price behavior in the EUR/USD pair and the fundamental news & events pushing market prices. We also place a few live trades using the Slumdog Forex trading system.

Wednesday, July 11, 2012

We had an interesting trading session as the market shifted from risk appetite during the Asian & European trading session to risk averse during most of the US session. Today's trend was primarily bearish with euro weakness driving most of the market movement, in both equities, commodities & other asset classes. We saw the EUR/USD currency pair fall 84 pips from the session high at 1.2297 to session low at 1.2213, which formed a new low for the year.

In today's technical analysis video, we will briefly explain the price action in the EUR/USD pair and identify common areas of support & resistance for potential trade entries.

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, July 5, 2012

For most of the week, the EUR/USD pair has been moving within a tight consolidation pattern, with a slight bearish bias, primarily due to institutions & hedge funds resting during the 4th of July holiday week and also over indecision concerning the outcome of the June Non Farm Payroll Report that is scheduled to be released on Friday. However, during today's trading session, we saw an unexpected pickup in volatility as 3 Central Banks intervened simultaneously to stimulate their economies. The PBOC (People's Bank Of China) eased their market by cutting the reserve ratio requirement by 31 basis points in an attempt to stimulate their economy. The BOE (Bank Of England) had also announced a plan to further ease markets by adding an additional 50 billion pounds of asset purchases to their current quantitative easing program. A few minutes after their announcement, the ECB had announced their plan to cut the interest rate by 25 basis points to 0.75% and also lower the deposit rate to 0.00%, in an attempt to remove the incentive banks would have in storing money at the ECB. This decision encouraged the sell-off in the euro during the NY Trading Session and the pair had fallen 175 pips from the session high at 1.2538 to the session low at 1.2363. In addition to this, there was also good US data that strengthened the greenback as well. 

In today's V.I.P. webinar, we discussed the current price behavior in the EUR/USD pair and the fundamental news & events pushing market prices. We also placed a few live trades using the Slumdog Forex trading system.

Tuesday, July 3, 2012

In today's V.I.P. webinar, we briefly discuss the current price behavior in the EUR/USD pair and the fundamental news & events pushing market prices. We also place a few live trades using the Slumdog Forex trading system.

Tuesday, June 26, 2012

Most of today's trading session has been marked by thin or lighter trading volume as investors sit on the sideline & patiently wait to hear whether EU policymakers will come up with some viable solution on how to solve the Eurozone Debt Crisis at this week's EU Leader's Summit. On yesterday, the Spanish government officially requested a bailout for their troubled banks and this resulted in 28 of their banks being immediately downgraded by Moody's Investor Service. As a result of this rating downgrade, Spanish bond yields climbed higher for the 10-yr paper, which put pressure on the EUR/USD pair and a few other euro crosses. There have also  been recent talks about the development of a fiscal union, which would be an attempt to enforce monetary & economic governance for the entire Eurozone as a whole. But, nations like Germany, Finland, and the Netherlands are directly opposed to this form of integration because it would require them to alter their constitutions & relinquish some of their sovereignty to a centralized budgetary group in Brussels.  Many investors believe that this move towards a fiscal union is very unlikely to happen anytime soon, but the formation of a banking union is an adequate first step towards this goal. The EUR/USD has been sliding lower and had fallen 74 pips and found support at 1.2455, where price began to retrace and rally during the 2nd half of the trading day.

In today's V.I.P. webinar, we discussed the current price behavior in the EUR/USD pair and looked for opportunities to place a live trade using the Slumdog Forex trading system.

Thursday, June 21, 2012

In today's V.I.P. webinar, we briefly discuss the current price behavior in the EUR/USD pair and the fundamental news pushing market prices. We also place a few live trades using the Slumdog Forex trading system.

Tuesday, June 19, 2012

Over the weekend, Greece’s Pro-Bailout New Democracy Party claimed a very narrow victory over the Syriza Party, which removed fears of a potential Greek exit from the Eurozone and caused the euro to gap higher & rally briefly on investor confidence. However, the Greek inspired relief rally was short-lived due to disturbing news coming out of the Spanish Banking Sector & their bad loans, which caused the Spanish 10-Yr bond yield to break above the crucial 7.00% level. Since Spanish borrowing costs for 10-Yr paper are at an unsustainable level, this puts into question Spain's ability to fund itself. Unfortunately, this news caused the market to shift from being Greek focused, to now being Spain focused and prior optimism had quickly shifted to market uncertainty as we began to see the EUR/USD weaken, despite the hopeful outcome of the Greek election.

During today's webinar, we discussed the current price action for the EUR/USD pair and the reasons for the random & whippy nature of price for the euro instrument. Today's trading session had been marked by very thin & illiquid trading environment, which may continue until there is more clarity regarding Spain & the euro crisis as a whole. There were rumors about ECB intervention in the Spanish bond market & Middle Eastern Central Bank Buying of EUR/USD that kept the Euro propped after the disappointing German ZEW data, which slumped to a 14 year low at -16.9, much lower than the previous month’s value of 10.8.

Thursday, June 14, 2012

During most of today's trading session, the EUR/USD pair has been moving within a tight range ahead of Sunday's Greek Election. This price behavior further indicates the overall uncertainty & concern many investors have about the future of the Eurozone. Yields in the Spanish 10-Yr Bond have climbed throughout the trading day in response to last night's credit rating downgrade of Spanish Debt, 3-notches lower, by Moody. Spanish yields reached a euro-area record high of close to 7% for 10 -yr debt, which is an unsustainable level for the sovereign & brings to question the nation's ability to fund itself.  Many institutions & bond funds are not allowed to hold debt at a lower credit rating and they were forced to sell their bond holdings after the downgrade, which caused borrowing costs for Spanish 10-Yr Paper to rise. In the past, when sovereign yields broke above 7%, there was an immediate need for an EU-IMF bailout for that country.

During today's webinar, we discussed the price action for the EUR/USD pair and how it was much different compared to other asset classes, like equities & commodities. Other markets showed signs of risk aversion as investors began to move towards safer harbours. However, in the currency market, price reacted differently and the EUR/USD was contained within a 52 pip range despite the negative news coming out of Spain. This proves that investors are choosing to sit on the sideline & wait to hear the outcome of the Greek Elections over the weekend before they place a position in the euro.