Why learn forex? Why trade forex? By reaching GoLearnForex, you must already be aware that Forex trading is a very lucrative way to make money from home or from work. Moreover, I'm sure you know someone, or have heard of someone who's already making good money in FX trading. Why not you ?

What you might not know though, is that 7 out of 10 traders keep on losing money in the Forex market! That's right, 70% of individual FX traders keep losing their hard-earned money in the market; while the other 30% work freely at home and make a solid living out of Forex.

So what is the major difference between the losing 70% and the winning 30%?

Forex trading knowledge and a sound trading system! If you want to have financial freedom by trading Forex and confidence in your trades; you need to get educated in Forex before you start trading it. Those who trade the Forex market with some knowledge and practice are taking advantage of one of the most lucrative markets anywhere in the world.

By golearnforex

Read more »

Let’s pick up where we left off in the last article on the basic happenings of the foreign exchange market. We mentioned that people buy and sell currencies for one another, but we need to establish how these prices are set.

In forex, prices for currencies are relative to one another.

How forex prices work

It’s hard to imagine giving a price for a currency in another currency. That just doesn’t make sense; it’s much easier to understand currency value as what we can exchange it for.

We can easily know that 1.25 US Dollars is enough to buy a soda–a Coca-Cola. However, how can traders know that $1.25 is equal to 1 Euro, .80 Pounds, or 10 Mexican Pesos?

It’s the economy!

In many ways, the value of each currency is tied to the performance of the economy it represents.

When the American economy is performing well, the dollar is likely to rise in value against other currencies. Thus, holding dollars is very much like investing in every person, company, and government in America, since the value of the dollar is dependent on everyone’s success.

Isn’t it great we all benefit from the success of everyone else? A strong economy almost always leads to a stronger national currency.

Taking that point to its logical conclusion, it would make sense that when the US economy is strong, so too is the dollar. Thus, the dollar’s value rises against other, weaker economies. A new perspective: if the US economy is growing and Mexico was experiencing a recession, the US dollar would likely be a stronger investment than the Mexican Peso. The market would reflect this, and it would take more Pesos to buy a dollar.

Investors who notice this trend can profit by speculating on the changes in currency values. If the dollar is soon to rise against the Peso, a trader could exchange Pesos for dollars through a currency broker. This trader would make a profit after the exchange rates change in his or her favor.

For example: Assume that we borrow 10 Mexican Pesos and trade them for 1 US Dollar.

If the currency rates change so that now it takes 11 Pesos to buy 1 US Dollar, we can exchange our US Dollar for 11 pesos, pay back the 10 pesos we borrowed, and enjoy a 1 peso profit. That one peso profit, at the current exchange rate of 11:1, is worth $.09. We made a 9% return on our dollars!

This is the very simple core of the foreign exchange market. When traders speak of buying and selling currencies, they’re really just talking about swapping one currency for another to make a profit. Of course, the full story is slightly more complicated, but keep reading and we’ll share all the nitty-gritty details.

Read more »

To put it in very simple terms, the foreign exchange market is a currency market, where investment banks, institutions, commercial companies, and individual investors go to buy, sell, and ultimately swap one currency for one another.

Different currencies are used in different places around the world. In the United States, we use the US dollar, which is our currency. In Australia, the official currency is the Australian Dollar. In Great Britain, they use the Pound. Europe uses the Euro.

All of these currencies have a different value, which is dependent on other currencies.
So what is forex?

Forex is the foreign exchange market. The foreign exchange market is a virtual market where investors buy and sell currencies for other currencies.

If you’ve traveled out of your home country before, you’ve interacted with the foreign exchange market and you didn’t even know it.

If you were to travel from the United States to Canada, you would trade your US Dollars for Canadian dollars at a bank, airport teller, or any currency exchange service. In trading your US dollars for Canadian Dollars, you participated on the global forex market.

But we’re just small fry in this massive global market.

You see, we’re just individuals. We don’t have tons and tons of money like banks, institutional investors, hedge fund managers, or mega-corporations. In comparison to these oversized professionals, we’re merely a drop in the bucket.

Mega-corporations rely on the foreign exchange market to trade in their currencies that they earn all around the world. Walmart, one of the largest retail companies in the world, has stores in 44 countries around the globe, even though it is based in the United States.

When it earns money in France, the company isn’t paid in dollars. Walmart gets paid in Euros. The company has to trade its Euros in for dollars to account for profits and losses.

Naturally, Walmart participates in the foreign exchange market to convert its foreign currencies into its home currency.

You Don’t Have to Be Big to Trade Forex

But you don’t have to be a Fortune 500 company to trade on the foreign exchange market. In fact, many traders make money in foreign exchange in buying and selling currencies for a profit. We’ll get to this in the following tutorials, but the point needs to be made that:

There are many reasons currencies are swapped for one another
You don’t have to be a millionaire or billionaire to trade forex

By now you’re probably wondering how we establish a price for money. We’ll get to that in the next tutorial…

forexonlinelearning

Read more »

Forexpros – U.S. stock futures pointed to a broadly lower open on Wednesday, after rallying sharply the previous day on the Federal Reserve's pledge to keep rates at ultra-low levels “at least” through mid-2013.



Ahead of the open, the Dow Jones Industrial Average futures pointed to a loss of 1.5%, the S&P 500 futures fell 1.3%, while the Nasdaq 100 futures dropped 1.9%.



The Federal Reserve pledged on Tuesday to keep its benchmark interest rate at an all-time low, adding that it will maintain a loose monetary policy until “at least through mid-2013.”



In a statement, the Fed said growth was much slower than expected and the labor market had deteriorated, underlining concerns over the U.S. economic outlook.



The Fed also indicated that it “discussed the range of policy tools available to promote a strong economic outlook recovery in a context of price stability” and said it was prepared to employ the tools “as appropriate”.



Meanwhile, shares in Walt Disney tumbled 4.3% after the company reported restructuring and impairment charges totaling USD34 million in the third quarter.



On the upside, department store operator Macy’s saw shares climb 3% after reporting a 64% increase in second quarter profit. The upbeat results prompted the company to raise its full-year earnings forecast.



Clothing retailer Polo Ralph Lauren saw shares surge 10.2% after it said fiscal first quarter net income rose 52% to USD184.1 million. Revenue in the quarter rose 28% to USD1.49 billion, above expectations for revenue of USD1.43 billion.



Other notable earnings scheduled for Wednesday include, technology firm Cisco Systems and media giant News Corp., which were both slated to report results after the closing bell.



Meanwhile, shares in Bank of America could be active, as chief executive Brian Moynihan was scheduled to face an investor conference call later in the day with Fairholme Capital, which owns around 92 million shares in the bank.



Across the Atlantic, European stock markets posted sharp losses, as mounting fears over sovereign debt contagion weighed. The EURO STOXX 50 tumbled 1.7%, France’s CAC 40 fell 1.5%, Germany's DAX shed 0.5%, while Britain's FTSE 100 edged 0.25% lower.



During the Asian trading session, Hong Kong’s Hang Seng Index jumped 2.1%, while Japan’s Nikkei 225 Index rose 0.9%.



A report from China’s National Bureau of Statistics showed that China’s trade surplus widened to USD31.5 billion in July, the highest level in more than two years. Analysts had expected China’s trade surplus to widen to USD27.4 billion.



Later in the day, the U.S. was to produce data on the federal budget balance as well as reports on crude oil stockpiles and wholesale inventories.

Read more »

Forexpros - The U.S. federal budget balance fell less-than-expected last month, official data showed on Wednesday.



In a report, Department of the Treasury said that U.S. federal budget balance fell to a seasonally adjusted -129.4B, from -43.1B in the preceding month.



Analysts had expected U.S. federal budget balance to fall to -140.0B last month

Read more »

Forexpros - The Euro was lower against the U.S. Dollar on Wednesday after the release of U.S. data on Federal Budget Balance.



EUR/USD was trading at 1.4226, down 1.04% at time of writing.



The pair was likely to find support at 1.4070, Friday’s low, and resistance at 1.4426, Monday’s high.



Earlier in the day, official data showed that The U.S. federal budget balance fell less-than-expected to a seasonally adjusted -129.4B last month from -43.1B in the preceding month.



Analysts had expected U.S. federal budget balance to fall to -140.0B last month.



Meanwhile, the Euro was down against the British Pound and the Japanese Yen, with EUR/GBP shedding 0.14% to hit 0.8798 and EUR/JPY falling 1.26% to hit 109.24.

Read more »

FXstreet.com (Córdoba) – High-yield currencies moved considerably during the American session, as initially reached fresh highs against the Dollar but then turned lower, to new monthly lows to then bounced sharply back to the upside erasing losses. The Kiwi is outperforming the Loonie and the Aussie on Friday.

Commodity currencies are moving in line with Wall Street main stock indexes. The Dow Jones bottomed earlier at 11,140, the lowest level since early December but then jumped more than 300 points and currently is rising 97 points or 0.86%.

AUD/USD bottomed at 1.0375, fresh 4-month lows but then rebounded sharply to test daily highs at 1.0525. Currently it is struggling to close the week above 1.0500.

NZD/USD reached the lowest level on Asian hours at 0.8275 but currently is testing levels on top of 0.8420.

USD/CAD is trading at 0.9780/85, just a few pips below the price it had at the beginning of the day after peaking at 0.9852, the strongest level since June 29.

Market sentiment improved after reports suggested that the ECB was willing to buy Italian bond and following a press conference where Italian Premier, Silvio Berlusconi, announced a G-7 meeting of Finance ministers and also said that the budget will be balanced by 2013.

Read more »

FXstreet.com (Barcelona) - The United States lost its AAA debt rating, on late Friday, from Standard & Poor’s for the first time in history. The credit-rating agency said the political system of the world’s top economy has become less stable and is still concerned about the government's budget deficit and rising debt burden.

"The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics," S&P said in a statement.

The outlook on the new U.S. credit rating is "negative," S&P added, which means another downgrade is possible in the next 12 to 18 months.

US government says S&P is wrong

The White House reacted with indignation to Standard & Poor's credit rating downgrade from AAA to AA-plus. A government spokeswoman said to media that S&P was wrong in its calculation, the debt value was overestimated by 2 billion, she stated.
Republicans asked President Obama division.

Read more »

Daily Client Note

Global Markets Review

Bull or Bear? It Does Not Matter

The topsy-turvy world of global trade continues its path of one day up and one day down, in reaction to breaking news sentiment. The unique set of fundamental circumstances unfolding as a consequence of years of miss-directed fiscal policies and institutional investment faux pas is likely to continue throughout the summer.

Wall Street opened lower which dragged the USD higher, while bullion was bought in the daily tango of global trade. It will be a relief to get the push-me pull-you farcical debt issues out of the way so that focus can switch to mid-term momentum reads.

Patience is required as the mid-term global charts go through a sideways spiral. We have been here before, many times, but this period of trade does seem to be going on forever.

Whether equity bull or bear, bullion buyer or seller, or a bond investor on the long or short end of the curve, the outlook remains the same; intra-day volatility as fair value is sought in milliseconds rather than historically over a period of days and weeks.

There are near-term trade opportunities in all markets when buying at the low of the previous session and selling at the high. These trades are available as a strategy because of the lack of mid-term chart directional sentiment and momentum.

The USD/S&P 500 inverse correlation remains strong, with equity and bond markets dominating intra-day direction across all global asset classes. Gold and Oil have started to form a near-term inverse correlation, with gold buying being met with oil selling, and vice versa. Silver trade does not yet have the strength of upside momentum seen in gold, but that may be more to do with Exchange floor margin requirement threats more than anything else.

The trade desk has highlighted over the last four years the changes that have happened in regard to electronic trading dominance, and the increase in algorithm trade that tracks momentum, headlines, price action, and sentiment. Who would have thought that Buy-and-Hold would so quickly cover just few days as a strategy, rather than the previous connotation that buying-and-holding could last decades.

Traders and investors have not been in such reactive market arenas before, which is a pure reflection of the technical advancements globally that has all aspects of daily life impacted by the speed in which information now travels.

The relentless desire to get information quicker than yesterday, in an effort to respond sooner, has transposed itself into traded markets that are truly 24-hours and are so completely globalized now that regional 9-to-5 trading is virtually obsolete.

Those looking for a flowing bell curve effect on their investment portfolio will not get it by trading and investing in regional markets only; gaps in closing/opening prices due to global momentum swings are prevalent. The long-term investor will have to introduce a near-term mix of global exposure to their portfolio.

Global exposure can be achieved via futures trade, which most see as specialized market verging on the dark side of the moon, via overseas accounts, which the US administration is determined to end, or via currency trading which remain the most liquid of all global traded markets.

As a balance to equities and bonds held over the longer term, exposure to forex offers easy access, low margin requirements, and access to global momentum. Equity and bond sentiment leads, and historically forex follows, creating a tradable balance to the buy-and-hold swings and dips.

Whether equity markets go on a bull run that has S&P 500 breaking 1350 and 1370, or has a bearish reversal that tests 1295 and 1275 is literally a coin-flick in the current headline-dominated trading environment. The reaction to either move however is tradable, via the currency markets that will track both bull and bear equity trade with a high daily correlation.

Read more »

EUR/USD

The pair finished the week higher after Eurozone leaders put forward plans that will permit the financial rescue fund to take advantage of new powers to prevent contagion and help Greece overcome its debt crisis. The move higher came in spite of somewhat mixed macro-economic data releases, as well as less than impressive demand for government debt sales.

In terms of technical levels, support levels are seen at the 21DMA line at 1.4283 and then at the 10DMA line at 1.4178. On the other hand, resistance levels are seen at 1.4400/40 and then at 1.4496.

GBP/USD

Despite the release of dovish BoE minutes from the most recent monetary policy meeting, the pair finished the week higher following renewed risk appetite as investors speculated that policy makers on both sides of the pond will put their differences aside and provide the much needed clarity on debt problems.

Finally, technical studies indicate that supports are seen at the 21DMA line at 1.6074 and then at 1.6069. On the other hand, resistance levels are noted at 1.6344 and then at the 61.8% Fibonacci retracement level of the 1.6747-1.5781 move.

USD/JPY

Despite the renewed sense of optimism over the state of the peripheral Eurozone, the pair finished the week lower amid a weaker USD, which fell around 1.5% as policy makers in the US failed to agree to debt reduction plans. Of note, DPJ's Naoshima said that government efforts to counter JPY strength have been "inadequate".

In terms of technical levels, supports are seen at 78.22/00 and then at the historic low at 76.25. On the other hand, resistance levels are seen at 78.74, 79.03 and then at 79.32, which is also the Tenkan Line.

Read more »

FXstreet.com (Córdoba) - Greek insolvency has been averted for now, sparking relief in the FX markets, so the euro looks set to recover lost ground in the week ahead, according to the Commerzbank analyst team.

"With only a few days left to reach a breakthrough in the US debt limit stalemate, however, it is still too early to sound the all-clear, as a failure by Congress to hike the debt ceiling would result in default on the other side of the Atlantic", said the Commerzbank team. "Against this backdrop, the focus of the FX markets should shift towards the US dollar in the coming days, which will benefit the euro".

The Commerzbank team expects EUR/USD will trade higher in the week ahead. "The only risk to the euro's recovery could be particularly weak US data and a renewed sparking of recession fears – with regard to the USA in particular but also for the world as a whole. Ironically, the subsequent increase in global risk aversion and the resulting flight into safe-haven investments would then send the dollar higher", they added.

Read more »

FXstreet.com's analyst Valeria Bednarik says in the article below that the UK "monetary independence is both a blessing and a curse", good point given the problems over the Eurozone periphery. It seems to be accepted by the market that the BoE is focused on inflation and not the recovery, as the BoE´s governor Mervyn King and Chancellor George Osborne have been busy these last six months.

Looking at the numbers, year-over-year inflation was up around 4.2% in June, leading to speculation of a rate hike which could threaten the economic recovery, as growth remains stagnant with the quarterly GDP at mere 0.5% in Q1.

What happened during the first half of 2011? Too much news and too many decisions from the market, What will happen in the second half? Valeria tell us in the article below “TUG OF WAR: Growth vs. Inflation”. This is the fifth issue of our FXstreet.com mid-year check up series, today delving into the situation in the UK with the Pound as the main character.

Tug of War: Growth vs. Inflation

By Valeria Bednarik, Forex Analyst for FXstreet.com

With the crisis the world is living through right now, if there is something to say about the UK it is that their monetary independence is both a blessing and a curse. Back in 2008 when the financial world collapsed following the US housing mortgage crisis, that economic independence had let the UK act in proper manner, and the BOE quickly reacted by cutting rates, creating the assets purchase facility program, and in general favoring a re-balancing of the economy. Problem is, things haven´t gone according to the plan, despite the huge devaluation the UK is still struggling to recover.

And with growth still remaining mostly stagnant, the recovery path seems harder day after day with overwhelming negative fundamental data and rising inflation.

At one point, we may wonder whether the UK is actually advancing or at the verge of a another financial collapse. Especially if things remain unchanged and Chancellor George Osborne continues to insist that the government hold its nerve by not deviating from his plans to cut borrowing, despite the increasing evidence that this policy may be damaging growth.

Economic Growth Stagnant

The United Kingdom GDP expanded just 0.50% over the first quarter of 2011, compared to the previous quarter. From 1955 until 2010 the UK´s average quarterly GDP Growth was 0.59% reaching a historical high of 5.30% in March of 1973 and a record low of -2.50% in March of 1974.
While among the worlds' most developed economies, it´s growth has never been close to outstanding, as we see from the previous figures, yet the main reason of the latest disappointing results may be found in a stalling manufacturing sector, a contraction in construction, and a sharp drop in oil and gas extraction. If something is giving support to the Pound these days, it is the strong oil near $100 a barrel. The bottom line is that when it comes to economic growth, the risk remains to the downside in the UK.

When it comes to the labor sector, the unemployment rate was 7.7% back in May. That's barely above the 7.22% average from 1971 to 2010, so despite it being not a positive figure, at least the sector is among one of the better all things relative. The latest reading in June showed the unemployment rate was down 0.1% over the quarter and 0.1% on the year. Still the report showed there where 1.52 million people claiming unemployment allowances which was an increase of 24,500 from May. In particular, the number of men claiming allowances increased by 15,000 to reach 1.03 million and the number of women claimants increased by 9,500 to reach 493,900, the highest figure since August 1996.

The Minister for Employment Chris Grayling said this month: "There continue to be some encouraging signs in the labor market figures, particularly with the continued rise in private sector employment. It's really important that we continue to support the economy and encourage businesses to invest and create jobs. However, we do not underestimate the scale of the challenge that we face to help people into employment.”

Inflationary Pressure on the Rise

While the UK has cut down their interest rate benchmark to 0.50% where it has remained steady since March 2009, inflation keeps rising above the BOE´s tolerance limit and was last reported at 4.2% in June over the year. From 1989 until 2010, the average inflation rate in the United Kingdom was 2.72% reaching a historical high of 8.50% in April 1991 and a record low of 0.50% in May of 2000.

While back in May this year, the BOE's governor Mervyn King said that inflation was “uncomfortably high,” and officials signaled they may need to raise interest rates later this year even as the economy struggles to build momentum. Interestingly however, the fact is that just one month later the central bank turned back towards it´s prior dovish stance, with 7 out of 9 members voting to keep rates on hold. The flip from hawkish to dovish, has come after the committee lost its hawkish member, Andrew Sentance, in May this year.

And while the idea of keeping rates low to jump-start growth remains, inflationary pressure keeps rising. The thing is that the BOE would rather focus on containing inflation, rather than stimulating employment or growth. If inflation keeps rising towards 5.0% as Governor King expects, the BOE will may have no choice but to rise the benchmark in an attempt to control it. At the same time, economic growth will hardly gain traction without the help of the central bank, while the UK continues applying their assets purchase program, or QE, as they can't remove it but only extend it: the quantitative easing program is another inflation generator for the economy. Up to this point, the tug of war the bank is trapped in will not result in a positive outcome no matter which side wins.

The BOE will have no choice but to sacrifice growth to contain inflation. While a rate hike may be expected by the end of this year, and we usually understand rate hikes as positive for a currency, I won't be expecting too much strength for the Pound, not even after a rate hike. Unless some signs of recovery start improving the sentiment over the UK economy, the Pound is set to extend its losses over the second half of 2011.

Read more »

Repeat: China Offl PMI Seen Resilient Despite Weak HSBC

BEIJING (MNI) - A sub-50 reading for a China flash purchasing managers index released Thursday doesn't mean the government's index due for release on August 1 will also suggest that Chinese industry is in contraction.

While it wasn't a vote of confidence for the health of the Chinese economy, analysts said the weakness seen in the HSBC flash PMI today probably won't be reflected in the PMI that is issued by the China Federation of Logistics and Purchasing.

Risk currencies and equities sold off immediately after HSBC said its flash purchasing managers index for July fell to a 28-month low of 48.9 and points to a reading under 50 when the UK-based bank reports the final reading on August 1.

The official PMI, a collaboration between CFLP and the National Bureau of Statistics, dropped to 50.9 in June from 52.0. Its last sub-50 reading was in February 2009 and fell to as low as 38.8 in November 2008, at the height of the global financial crisis.

Markets would likely react negatively again on August 1 if CFLP announces the first reading below 50 in 28 months (the PMI is released at 0900 Beijing-time 0100 GMT.)

But analysts said that's unlikely to happen, arguing that the official PMI tends to survey larger state-owned firms, which are in better health than their smaller, often-privately held, peers captured by Markit, which compiles the PMI for HSBC.

"We don't believe that the official PMI would fall below 50 in July," said Ken Peng, a Beijing-based economist with BNP Paribas.

Even HSBC urged caution and dismissed concerns about a hard landing. Economist Qu Hongbin acknowledged that 70% of the HSBC survey panel comprises small and medium-sized firms and argued that the reading below 50 still points to industrial output growth of around 13%.

"Don't panic. Despite the slowing of manufacturing activity, resilient consumer spending and continued investment in thousands of infrastructure projects will continue to support GDP growth rate of almost 9% for the rest of this year," he told clients in a note.

At the same time that HSBC was releasing its survey, Ministry of Industry and Information Technology spokesman Zhu Hongren was telling reporters that industrial output will grow by 13% to 15% in the second half of this year, compared with 14.3% in the first six months.

He acknowledged that small enterprises faced "outstanding difficulties" owing to financing problems, but denied there were waves of closures in southern China.

Today's data revived concerns about a hard economic landing in China, just a week after the government said the economy grew by a stronger-than-expected 9.5% y/y in the second quarter, powered by 15.1% jump in industrial output in June.

Both HSBC's Qu and BNP's Peng said the June data reflected easing electricity supply after the government allowed tariffs to rise. Peng said slightly easier credit conditions and better trade numbers also helped quarterly growth.

"Both the power and the trade boost should fade in coming months and that could tighten business environment further," he said, arguing that data support selective policy easing.

Despite the industry ministry's bullish outlook, pressure is mounting on the central government to further relax at least some of the slew of measures it has introduced since October to battle inflation.

Today's PMI reading may reflect seasonality -- Societe Generale's Wei Yao noted that the PMI last July also fell below 50 -- but it is also evidence of the pain being felt in more vulnerable parts of the economy as liquidity dries up and financing becomes increasingly hard to come by.

The credit availability index in the Market News International China Business Sentiment Survey fell to 33.33 in June, the third lowest on record (the China Business Sentiment Flash Survey is scheduled for release at 0935 Beijing time, 0135 GMT on July 22 and the final survey on July 29.)

Analysts said that Beijing could be forced to respond if the CFLP reports a lower-than-expected reading on August 1.

"No doubt, the growth momentum continues to soften. We expect the official PMI to come in at 50," said SG's Yao. "If official PMI comes in below 50, PBOC will probably be very cautious in tightening further."

beijing@marketnews.com ** Market News International Beijing Newsroom: 86-10-5864-5274 **

Read more »

FXstreet.com (Córdoba) – The EUR/USD suffered one of the worst 2-day loss in history. The pair traded at 1.4900 on Thursday and finished the week around 1.4350. The decline started with Trichet words singling that the ECB is not going to raise rate in the next meeting and on Friday, rumors about Greece leaving the Eurozone accelerated the decline.

The pair bottomed in the last day of the week at 1.4313, 620 pips below weekly highs reached on Wednesday at 1.4933 when it traded at the highest level in 17 months. The Euro was the worst performer during the week among majors.

In the Eurozone, Greece denied that it is considering leavening the euro. There were also speculations about a debt restructuration. “Pending the substantiation of this speculation, the euro will remain under pressure; but it will also hold off from a major run”, said Senior Currency Strategist from Daily FX, John Kicklighter.

A confirmation that Greece intends to leave, would send the euro sharply lower according to the Daily FX analyst. “Alternatively, putting to rest this speculation could lead to a temporary bounce that unwinds this morning’s losses. However, that doesn’t mean that it will recover any more ground than that; as traders now realize that the market is highly sensitive to concerns over the region’s financial stability”, Mr. Kicklighter added.

“The euro sell-off could continue on further position unwinding – especially if the correction in commodity prices runs further – and even lower levels in EUR/USD in the short term cannot be ruled”, analyst at the Danske Bank wrote in a report before the Greece news hit the wires. They concluded that in the short term the pair could continue to go lower if the indications that the global economy is slowing down spreads to equity markets, but they still see the underlying trend for a higher EUR/USD. “Hence, on the back of ECB hikes and easy monetary policy in the US, we will look for attractive levels to reposition for renewed upside”.

Read more »

FXstreet.com (Córdoba) – The EUR/USD peaked earlier at 1.4540/47, the highest price since January 14, 2010 but lost bullish momentum, moved in ranges for some hour and currently is testing levels below 1.4500. The pair is retreating after rising 200 pips from today’s opening price, extending to almost 400 pips the distance from Monday’s low.

The EUR/USD hit recently at 1.4987 the lowest price since early European session and remains hovering barely below the 1.4500 level.

Fan Yang, Chief Technical Strategist at FXTimes points out that the pair “is likely returning to its bullish mode”. “A swing projection seen in the daily chart is suggested by a positive reversal signal where the RSI low is lower, but the price low is higher”, Yang says. He affirms that the swing projection targets 1.4675, “this is the short-term target at the moment”.

Read more »

By: Tom Jennemann

New York 20/04/2011 - Comex gold was steady above $1,500 on Wednesday morning on a weaker dollar and governmental debt worries.

But prices have eased slightly from the morning's high following a flood of positive earnings reports and stronger equity markets.

Gold futures on the Comex division of the New York Mercantile Exchange for June delivery were recently trading up $9 at $1,504.10 per ounce in New York and earlier in the session reached an all-time record of $1,506.20.

"The impetus for the run-up early this morning was clearly the softer dollar, which is getting hammered and fell to its lowest level in the past 15 months [against the euro],” a US-based fund manager said. “When the dollar takes a beating like this, metals are going to rally."

The euro rose 1.4 percent to 1.4543 against the dollar this morning largely on increased risk appetite and after a successful bond auction in Spain.

But the yellow metal has edged down marginally from its intraday high since the open of equity markets in New York.

"We've seen some quite positive earning reports from the likes of Intel and Freeport-McMoRan, which had the Dow up by over 175 points," the fund manager said.

“Despite all the dire headlines of late, Wall Street doesn't think the economy is hanging off the cliff,” he added. “Some folks are looking at riskier assets this morning as the stock bulls have returned.”

Standard Bank echoed this sentiment in a note. "Fears that the global economic recovery might be in jeopardy, sparked by Standard & Poor's ratings outlook downgrade of the US, have been dispelled by strong corporate earnings results and a steady improvement in US housing data," analyst Marc Ground wrote.

Existing US home sales rose 3.7 percent in March to an annualised rate of 5.1 million units, slightly ahead of expectations, the National Association of Realtors said on Wednesday morning.

Nevertheless, many investors continue to express concerns about the burgeoning debt crisis in the US and Europe and inflation around the world.

Bolstering this argument was S&P's surprise outlook downgrade of US long-term debt to "negative" to "stable".

"This latest chapter in the saga of sovereign debt concerns highlights gold's benefits as a risk-hedge and currency diversifier. It also presents new challenges for investors who traditionally, in times of uncertainty, steer capital towards US Treasuries," Marcus Grubb, managing director of the Investment at the World Gold Council, said in a statement.

Additionally, the US government does not have a credible plan to cut the deficit, International Monetary Fund chief economist Olivier Blanchard said on Wednesday according to French paper Le Monde.

Comex silver for May delivery also soared on Wednesday - it was recently trading up about one dollar at $44.90 per ounce, which is a 31-year high. The closely watched gold-silver ratio has dropped to 33.5 - a 28-year low.


(Editing by Mark Shaw)

Read more »

FXstreet.com (Córdoba) – The Swiss Franc continues its rally against the Dollar. The USD/CHF fell further below 0.8900 and reached a new all time low at 0.8878. The pair remains trading near session low, holding a bearish bias. Greenback is headed toward the tenth daily decline out of the last 12 trading days.

The recovery of the Dollar earlier found resistance at 0.8930 and the pair resumed its downtrend as the Swissy strengthened across the board.

To the downside, support levels could be located at 0.8860 and below at 0.8820 while to the upside, probable resistance levels lie at 0.8890 and above at 0.8930 and 0.8965.

Read more »

FXstreet.com (Córdoba) – Stocks rose sharply in Wall Street with the Dow Jones ending at the highest level since June 2008. Gold reached fresh record highs above $1,500 an ounce as the Dollar posted losses across the board.

The DOW rose 1.52% on Wednesday and has risen more than 300 point in three days. Earnings reports and better-than-expected housing data triggered optimism in Wall Street.

In the currency market, the Aussie and the Swiss Franc were among the best performers. The Yen trimmed losses on American hours but finished mostly lower in the market.

The EUR/USD reached fresh 15-month highs at 1.4545, pulled back afterwards to 1.4485 but managed to rise back above 1.4500. Cable remained steady on American hours consolidating around 1.6400, barely below April highs.

The USD/CHF extended its decline to fresh record lows at 0.8870/80 and remains under pressure. Greenback is also trading at record lows against the Aussie.

Read more »

By: Jamie Coleman

Hopes for robust US growth have been dialed back further in the wake of the US trade data which has pressured US yields lower. The buck, which suffers from many woes, seems to latch on to the latest one to float across the screens, and yields are today's problem du jour for USD bears to hang their hats on... 10s are down 10 bp in yield with 5 over 12 bp lower.

Read more »

FXstreet.com (Buenos Aires) – USD/CHF remains steady around 0.8960, near daily low set at 0.8942 just around US opening. The pair has been falling straight for 5 days already, accumulating over 400 pips to the downside this month. All time low, set on March 16th following Japan’s earthquake, lies at 0.8860.

The pair, that seems extremely oversold according to Valeria Bednarik, Fxstreet.com chief analyst, holds its “bearish momentum intact both in 1 and 4 hours charts, and despite extreme oversold readings are clear in both, pair seems not ready for a bullish corrective movement. Lose of 0.8940 daily low, should accelerate the slide towards mentioned record low”.

Read more »