Majors are the most liquid and widely traded currency pairs in the world. Trades involving majors make up about 90% of total Forex trading. The Majors are: EUR/USD, GBP/USD, USD/JPY, USD/CHF, AUD/USD and USD/CAD.
Symbol
Country
Currency
USD
United States
Dollar
EUR
Euro members
Euro
GBP
Great Britain
Pound
JPY
Japan
Yen
CHF
Switzerland
Franc
CAD
Canada
Dollar
AUD
Australia
Dollar
GBP/USD is the only currency pair with its own name. It is known as "Cable" but there are also lots of abbreviations for other currency pairs such as
Forex can be traded 24 hours a day and 5 days a week. The main trading centers are in London, New York, Tokyo, and Singapore, but banks throughout the world participate. The biggest foreign exchange trading centre is London, followed by New York and Tokyo. Currency trading happens continuously throughout the day; as the Asian trading session ends, the European session begins, followed by the US session and then back to the Asian session, excluding weekends.
The following approximate market schedule is based on New York local time: Japan forex markets open at 19:00 followed by Singapore and Hong Kong that open at 21:00. European markets open in Frankfurt at 2:00, while London opens at 3:00. New York forex markets open at 8:00. European markets close at 12:00 and Australian markets start again at 18:00.
The answer is Currency. Currencies are always traded in pairs, such as EUR/USD, GBP/USD, etc. Why? Because when you trade forex, you are exchanging 1 currency to another currency simultaneously (buying 1 currency and selling the other at the same instance). You will gain from differences of traded currency price rates.
The foreign exchange (currency or forex or FX) market exists wherever one currency is traded for another. It is by far the largest financial market in the world, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions.
The average daily trade in the global forex markets currently exceeds US$ 2 trillion. Retail traders (individuals) are a small fraction of this market and may only participate indirectly through brokers or banks.
· A Personal Computer (and PDA, optional and preferable)
· Stable and high speed internet connection
· Limited equity (for example $1000)
· Reliable, reputable and trusted online forex broker
You dont need an office, otherwise you can start your business from home or anywhere else. Even when you are traveling, you still can make money. As simple as that!
• In forex trading, you decide when you want to work, how long you want to work, and how much money you want to make (You are the Boss) • Forex trading requires limited equity and the yield could be unlimited • You can make money anywhere (as long as you are connected to internet) and anytime (forex market opens 24 hours a day, 5 days a week). • You can maximize your profit and limit your loss. • You will have a big probability to become financially freedom by trading forex. All you need to do is read this website for forex tutorial and guide, find your own profitable trading system (or use ours) and repeat making profit by your own trading system.
Why should you learn forex? I myself make a lot of money from forex. Forex is the largest money market in the world. There is always an opportunity for you to make money. No matter how hard the competition is. The part I love most is you can earn unlimited profit in forex.
Thursday, major statistical reports due for the day include consumer prices data from Eurozone and Italy.
At 2:00 am ET, retail sales data for August is due from Finland. Sales had dropped 0.3% year-on-year in July. In the meantime, EU 25 new car registrations report is also due.
At 3:00 am ET, the Czech Statistical Office is slated to release producer price data for September. Prices are expected to drop 5.2% year-on-year, larger than the 5.1% decline seen in the previous month. Czech import and export prices data for August is also expected at the same time.
In the meantime, the Turkish statistical office is scheduled to issue unemployment data for July. Economists expect the unemployment rate to ease moderately to 12.9% from 13% in the preceding month. Further, Slovakia is set to release harmonized consumer price data for September at 3:00 am ET.
Half an hour later, retail trade figures for August is due from Statistics Netherlands. Sales are expected to drop 4% annually, faster than the 3.6% fall in July.
At 4:00 am ET, the European Central Bank is expected to release its monthly bulletin. At the same time, the Italian statistical office ISTAT is scheduled to release the final report for September CPI. The preliminary estimate showed that consumer prices rose 0.2% on a yearly basis in September. Meanwhile, the HICP climbed 0.3% in September from the previous year. The statistical office is expected to confirm the preliminary estimate.
Also due at 4:00 am ET, is September’s trade data from Norway. The trade balance logged a surplus of NOK 24.9 billion in August.
At the same time, Austrian consumer price inflation data for September is also due. In August, the inflation rate stood at 0.3% on a monthly basis and 0.4% on a yearly basis.
At 5:00 am ET, the Eurostat is expected to release a revised report for Eurozone HICP. Eurozone consumer prices declined 0.3% on a yearly basis in September. The statistical office is expected to confirm the initial estimate released on September 30.
Conditions for New York manufacturers improved significantly in October, according to a report released by the Federal Reserve Bank of New York on Thursday, with the index of activity in the sector rising to its highest level in over five years.
The New York Fed said its general business conditions index rose to 34.6 in October from 18.9 in September, with a positive reading indicating growth in the manufacturing sector. Economists had been expecting the index to fall to a reading of 17.5.
With the unexpected increase, the business conditions index rose to its highest level since May of 2004, when the index came in at 35.0.
The unexpected increase by the index was partly due to notable improvements in new orders and shipments. The new orders index rose to 30.8 in October from 19.8 in September, while the shipments index jumped to 35.1 from 5.3 in the previous month.
Employment also showed a significant improvement compared to the previous month, with the number of employees index rising to 10.4 in October from a negative 8.3 in September. This marks the first positive reading for the index since June of 2008.
On the inflation front, the prices paid index edged down to 19.5 in October from 20.2 in September, while the prices received index fell to a negative 5.2 from a negative 3.6 in the previous month.
European industrial output rose for a fourth month in August, increasing just below 1% from July. From a year earlier, August output fell 15.4%, a big drop but still the smallest YOY decline in eight months. The euro (EUR) area continues to recover ‘at a gradual pace’ according to ECB President Trichet. The positive news coming from the manufacturing sector is a good sign the European economic recovery will be sustainable.
Another report overnight showed that China’s exports fell by the least amount in nine months during September. As we have written over and over again, China will lead the world out of the global recession, and the latest reports show China beginning to pull away. Reports due out next week will likely show that China’s economic growth accelerated to 8.9% in the third quarter, slightly above the government’s target.
Business confidence in Australia slipped for the first time in five months, driven by a decline in confidence among retailers and manufacturers, a report released by the National Australia Bank said on Tuesday.
The index measuring business confidence stood at 14 in September, down 4 points from August’s reading of 18. August marked the highest reading recorded in the index in nearly six years. A figure above zero means optimists outnumber pessimists.
The decrease in the index was largely due to the receding confidence among the retail and manufacturing sectors, which fell 6 points and 11 points, respectively, from August, while higher confidence was seen in the construction sector on the back of higher infrastructure spending.
Hong Kong’s government will closely watch and revise its land supply arrangements, if necessary, on rising concern over development of a property bubble in the economy, Chief Executive Donald Tsang said in his annual policy address on Wednesday.
Tsang told the Legislative Council, “The relatively small number of residential units completed and the record prices attained in certain transactions this year have caused concern about the supply of flats, difficulty in purchasing a home, and the possibility of a property bubble.” He noted that property prices returned to their mid-2008 levels, except for luxury flats.
For luxury flats, prices are still below their peak in 1997. At the same time, home purchasing power is greater than in 1997 and the number of negative equity cases remains very small. A steady property market can avoid property owners from being hit hard during an economic downturn.
According to Land Registry, the number of sale and purchase agreements for all building units received for registration in September jumped 95.9% annually to 14,437 units and sales of residential units surged 102.2%.
Hong Kong GDP rose 3.3% sequentially in the second quarter after falling 4.3% in the first three months of the year. That was the first increase following declines in four consecutive quarters. The strong stimulus measures adopted by the Mainland Authorities helped the Chinese economy regain growth momentum, thereby benefiting the Hong Kong economy.
UK annual inflation slowed more than expected in September to a five-year low. Also, inflation stood below the central bank’s 2% target for the fourth straight month.
Annual inflation slowed to 1.1% in September from 1.6% in August, the Office for National Statistics reported Tuesday. This was the lowest annual rate since September 2004. Economists had expected the annual rate to ease to 1.3%. Month-on-month, consumer prices remained flat, the lowest monthly change since records began in 1996. Core annual inflation that strips out energy, food, alcohol and tobacco stood at 1.7%, down from 1.8% in August.
The largest downward contribution to the change in the CPI annual rate came from housing and household services, the ONS said. There were also large downward contributions from food and non-alcoholic beverages as well as restaurants and hotels. On the other hand, the largest upward contribution came from transport and clothing and footwear.
Further, the agency said the retail price index, which is used for indexation of pension and state benefits, stood at 215.3 in September, up from 214.4 in August. From August, the retail price index was up 0.4%.
Retail prices dropped 1.4% in September from the same period of last year compared to a 1.3% fall in August. Consensus forecast was for a 1.5% fall. Excluding mortgage interest payments, retail prices were up 1.3%, slower than the 1.4% growth seen in the prior month.
Overall results for the third quarter were encouraging. The survey found that confidence strengthened across the board in the third quarter. Domestic orders and sales also strengthened considerably, especially in manufacturing. However, they remain negative, making it difficult to argue that the UK has already emerged from recession. The cashflow indicator remained negative and still remain weak by historical standards.
Confidence returned to the UK housing market in September, with the net balance of respondents expecting house price to rise moving up to its highest level since May 2007, a survey showed Tuesday.
Data released by the Royal Institute of Chartered Surveyors showed that a net 22% saw house prices rising rather than falling in the three months ended September, the highest balance in more than two years. This comes after a net balance of 10% in August, and stood higher than economists’ expectations for a balance of 16%.
The biggest gains were seen in London, with a net 79% seeing rise in prices rather than falls, while in the South east, the proportion was 52%. However, a net 18% of respondents saw more price falls rather than rises in Yorkshire and Humberside. In Wales, the net balance was 15%.
On Monday, the Council of Mortgage Lenders said the number of house purchase loans in August totaled 52,700, up 29% from the same period of last year. However, approvals fell 5% from July. On October 7, Fitch Ratings in a report warned that the recent gains in house prices could provide only a temporary respite and expects the prices to fall from its nearly two year peak. The rating agency forecasts house prices to fall 30% overall from its peak in October 2007, with the prices being currently 13% below that peak, having dipped 19% in the first quarter. The fall would bring it in line with the long-term average, Fitch said.
The latest house price data from Nationwide showed that prices rose for the fifth consecutive month in September. House prices climbed a seasonally adjusted 0.9% month-on-month in September, after a 1.4% rise in the preceding month. Further, the Lloyds Banking Group Plc’s Halifax division said on October 6 that house prices climbed for the third consecutive month in September, by 1.6% on a monthly basis compared to a 0.8% rise in August.
The latest quarterly survey from the British Chamber of Commerce released Tuesday said the decline in economic activity in Britain was coming to an end, although most of the rebound is from historic lows.
Hong Kong consumer prices dropped for the second consecutive month in July and marked its biggest fall in five years, the Census and Statistics Department said on Thursday.
The consumer price index or CPI declined 1.5% year-on-year in July, worse than a 0.9% fall in the previous month. The decline was in line with economists’ expectations. This was the first decline in CPI since January 2005 and the biggest since early 2004. The CPI had grown 6.3% in the same month last year.
The CPI, excluding the effects of all government’s one-off relief measures or underlying CPI, dropped 0.3% in July, in contrast to the 0.4% growth in the previous month. This was mainly due to the decline in food prices and smaller increase in private housing rentals.
During the first seven months of the year, the CPI rose 0.5% from the same period of the previous year. For the three months ending July, the index dropped 0.8% year-on-year.
A Hong Kong government spokesman said, the consumer prices decline in July was a part of a global phenomenon. The government expects the underlying consumer price inflation to stay negative in the coming months, as local price pressures continue to subside and import prices remain soft.
Last week, the government forecast headline consumer price inflation for 2009 at 0.5%, revised down from 1% predicted in May. Underlying consumer price inflation is expected at 0.9%, same as in May.
Though the main economic indicators are yet to confirm an economic recovery, Hong Kong’s economy emerged from the worst recession in the second quarter, prompting the government to raise the outlook for this year.
The government expects the recovery process to be “rather bumpy”. It now expects the economy to contract by 3.5%-4.5% in real terms this year, up from 5.5%-6.5% decline forecast in May. Most private sector analysts are currently projecting the economy to contract by 3.5%-5.5%.
Thursday, the Philippine central bank ended its monetary easing that started in December 2008 as the economy showed signs of recovery from the global recession.
The Bangko Sentral ng Pilipinas held its key interest rate unchanged at a record low of 4%, in line with expectations. The interest rate on overnight lending or repurchase facility was kept at 6%.
In July, the central bank cut its key policy interest rate by 25 basis points to the current level.
Since December 2008, the central bank made a cumulative reduction of 200 basis points in its benchmark interest rate. The central bank also initiated liquidity enhancing measures.
Asian central banks have stopped cutting interest rates after seeing signs of economic recovery and demand rebound. In the second quarter, the Japanese economy grew 3.7% and China expanded 7.9%. Economic growth was 20.7% in Singapore.
While recent data has shown some signs of stabilization in the labor market, the Labor Department released a report Thursday morning showing that first-time claims for unemployment benefits unexpectedly increased in the week ended August 15th. The report showed that initial jobless claims rose to 576,000 from the previous week’s revised figure of 561,000. The increase came as a surprise to economists, who had expected jobless claims to edge down to 550,000 from the 558,000 originally reported for the previous week. With the unexpected increase, jobless claims rose for the second consecutive week, although they remain well off the highs seen in March. The Labor Department also said that the less volatile four-week moving average rose to 570,000 from the from the previous week’s revised average of 565,750. Additionally, the report showed that continuing claims edged up to 6.241 million in the week ended August 8th from the preceding week’s revised level of 6.239 million.
UK retail sales in July registered its biggest annual increase since May 2008 reinforcing the perception that recession is slowly leaving the economy. At the same time, government borrowing was the largest on record for July.
Retail sales rose 3.3% in July from a year earlier, which was the biggest increase since May 2008, the Office for National Statistics reported Thursday. July’s increase was larger than the expected growth of 2.7%.
Predominantly food store sales rose 2% annually in July and non-food store sales grew 3.4%. Clothing and footwear sales increased 10.3%, while sales volume for household goods stores dropped 1.3% in July.
On a monthly basis, retail sales volume grew 0.4% in July, in line with expectations, but slower than June’s revised 1.3% increase.
Further, the ONS report showed that the seasonally adjusted value of retail sales increased 2.6% on a yearly basis in July. Meanwhile, the estimated total value of sales on an unadjusted basis was GBP 21.9 billion in July. The average weekly value of sales was GBP 5.5 billion.
Manufacturing activity in the mid-Atlantic region is showing some signs of stabilizing, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday, with the index of activity in the sector unexpectedly climbing into positive territory in August.
The Philly Fed said its index of current activity rose to 4.2 in August from a negative 7.5 in July, with a positive reading indicating growth in the sector. Economists had been expecting a more modest increase to a negative 2.0.
With the bigger than expected increase, the index rose above zero for the first time since September of 2008 and reached its highest level since November of 2007.
However, Peter Boockvar, equity strategist for Miller Tabak, noted, “The data measures the direction of improvement, not the degree. So, don’t extrapolate that we are at November ‘07 output levels.”
A turnaround in new orders contributed to the improvement in the sector, with the new orders index rising to 4.2 in August from a negative 2.2 in July. The shipments index also jumped to 0.6 from a negative 9.5 in the previous month.
The report also showed that the inventories index rose to 0.3 in August from a negative 15.4 in July. This marks the first positive reading for the inventories index since September of 2007.
Research group the Conference Board released its report on leading economic indicators in the month of July on Thursday, showing that its leading indicators index increased for the fourth consecutive month.
The report showed that the leading economic index rose 0.6 percent in July following an upwardly revised 0.8 percent increase in June. Economists had expected the index to increase by 0.7 percent, matching the increase originally reported for the previous month.
Positive contributions from six of the ten indicators that make up the leading index contributed to the continued growth.
The interest rate spread, weekly jobless claims, weekly manufacturing hours, supplier deliveries, stock prices and manufacturers’ new orders for non-defense capital goods contributed positively to the index.
Meanwhile, the negative contributors were the index of consumer expectations, real money supply, and building permits. Manufacturers’ new orders for consumer goods and materials held steady in July.
(RTTNews) - The Eurozone private sector economy showed signs of broad stabilization as the Purchasing Managers’ Index hit the threshold level for August. A return to growth in manufacturing output and slowing rate of contraction in the service sector led to the stabilization.
The Flash Eurozone Composite Output Index rose to 50 in August from 47 in July, a survey from the Markit Economics showed Friday. Economists had expected the index to edge up to 48 in August. The latest reading marked the end to a fourteen-month stretch below the no-change mark of 50.
A reading above 50 indicates an expansion in the private sector activity, while a level below 50 suggests contraction.
Since its record low witnessed in February, the headline reading improved for each of the last six months. The increase seen in August was the greatest in the series history.
The Flash Purchasing Managers’ Index for the manufacturing sector stood at its 14-month high of 47.9 in August, rising from 46.3 in July. The expected reading was 47.5.
Meanwhile, the services PMI came in at 49.5, up from 45.7 in July. The services activity index posted its highest reading in the current fifteen-month sequence of contraction and stood above the expected 46.5.
The US Dollar continued its fall backed by rising equity markets as Chinese equities started its rebound after the 4% decline on Wednesday. AIG said that it plans to repay the money borrowed from the US government which also helped push the equity markets higher. Leading indicators posted a reading of a rise of 0.6% backed by improvements in job sector and positive equity markets while the Philadelphia Fed manufacturing activity showed a positive reading at 4.2 against an expectation of -2.0 and better than the previous reading of -7.5 as new orders received increased. This data shows that the manufacturing sector has gained the most majorly boosted by the auto sector where the cash-for-clunkers program has helped the most.
Although every investment involves some degree of risk, the risk of loss in trading off‐exchange forex contracts can be substantial. Therefore if you are considering trading in this market, you should be aware of the risks associated with this product so you can make an informed decision prior to investing. The material presented here is not to be construed as trading advice or strategy. ACMNY makes a strong effort to use reliable, expansive information, but we make no representation that it is accurate or complete. In addition, we have no obligation to notify you when opinions or data in this material change.
Positive economic data out of the Euro zone and United States managed to lift investors’ desire for riskier assets, pushing equity markets higher. The EurUsd rose 73pips, finding support at 1.432, while the UsdJpy fell 32pips to 94.50. The GbpUsd appreciated 50pips, bringing the cable to the upper-range of 1.65. Equity markets rose in the U.S. and Europe, with the Dow higher by 1.45% or 136pts and the FTSE up by 1.43% or 66pts. The yield curve experienced some flattening, with the 10 and 30 year bonds up 12 and 9bps respectively. Commodities were higher across the board with oil up by $.44bbl at $73.39bbl and gold up $13.4oz approaching the mid-range of $954oz.
Non-bank foreign exchange companies offer currency exchange and international payments to private individuals and companies. These are also known as foreign exchange brokers but are distinct in that they do not offer speculative trading but currency exchange with payments. I.e., there is usually a physical delivery of currency to a bank account.
It is estimated that in the UK, 14% of currency transfers/payments are made via Foreign Exchange Companies.These companies' selling point is usually that they will offer better exchange rates or cheaper payments than the customer's bank. These companies differ from Money Transfer/Remittance Companies in that they generally offer higher-value services.
An important part of this market comes from the financial activities of companies seeking foreign exchange to pay for goods or services. Commercial companies often trade fairly small amounts compared to those of banks or speculators, and their trades often have little short term impact on market rates. Nevertheless, trade flows are an important factor in the long-term direction of a currency's exchange rate. Some multinational companies can have an unpredictable impact when very large positions are covered due to exposures that are not widely known by other market participants.
The interbank market caters for both the majority of commercial turnover and large amounts of speculative trading every day. A large bank may trade billions of dollars daily. Some of this trading is undertaken on behalf of customers, but much is conducted by proprietary desks, trading for the bank's own account. Until recently, foreign exchange brokers did large amounts of business, facilitating interbank trading and matching anonymous counterparts for small fees. Today, however, much of this business has moved on to more efficient electronic systems. The broker squawk box lets traders listen in on ongoing interbank trading and is heard in most trading rooms, but turnover is noticeably smaller than just a few years ago.
For the absolute newcomer to forex trading, this short collection of videos found on youtube.com will gently introduce you to the world of currency exchange. Several education and forex training programs are readily available over the Web to further your trading skills and knowledge and range from forex courses to rather complex software algorithms to help with trade decisions. I suggest you take the time to read the appropriate reviews and feel free to post reviews on any company, platform or website that you have had experience with.
Unless your broker or signal provider is calling the shots for you, a certain amount of bona fide forex training is in order. From formal schooling to online education and learn-at-home courses, sorting through the various forex training alternatives can be more confusing than the subject of forex itself.
Regardless of where you are in your forex career, make sure you stay abreast of current trends and changes as they apply to forex trading techniques, signals, pips, spreads, and more. As a well-educated forex trader, I still seek counsel from my favorite signal providers just to stay one step ahead. For many, one source of forex education is not enough, as different services offer varying degrees of information about the forex market. Make sure your forex education is both well rounded and from reputable trainers.
I was shocked to see it but I think we actually got some truth this morning with the latest GDP data. The headline number showed contraction of 6.1% in Q1 while Q4 was revised even lower to show contraction of 6.3%. Yes, those numbers are ugly and I'm sure quite a few market participants were expecting the S&P 500 and Dow to get hammered on this data, but that was certainly not the case. About the only thing that got hammered was the USD Index and Treasuries.
The headline numbers really didn't matter, especially to those that move markets. It was the underlying fundamentals contained within the GDP report that sent money-flows into risk markets like equities, crude, gold, and non-risk averse currencies such as the euro, pound sterling, and Aussie, and out of the dollar, yen, and US Treasuries. When it comes to using the fundamentals to gauge market direction, sentiment, and where money-flows will go, the thing I do is breakdown the entire GDP report to get a full and well rounded view for how markets should react.
So, what I'm going to do here is go through what I saw in the GDP fundamentals that explain why the markets reacted the way they did; this is the exercise I go through in my mind whenever we get a major piece of fundamental data that will cause strong price action volatility. And GDP is certainly one of those fundamentals that impact money-flows and sentiment
As we've talked about several times the past few weeks in the updates, prices and price inflation are a major catalyst that either drive markets up or drive them down, it's a very simple correlation. Here's what today's GDP data revealed about 2008 Q4 and 2009 Q1 prices/inflation:
GDP price index for domestic purchasing:
-3.9% in Q4 2008 -1.0% in Q1 2009
GDP price index for domestic purchasing ex food and energy:
+1.2% in Q4 2008 +1.4% in Q1 2009
Those numbers are pretty cut and dry. The plunge in consumer price inflation that hammered equities in Q4 of 2008 is subsiding and this is the kind of fundamental data that leads to higher prices of equities and money-flows that go out of the USD, JPY, and Treasuries and back into those higher risk markets. These price and inflation numbers are what I consider to be some of the core underlying fundamentals of what moves markets and money-flows and it's glaringly obvious why equities have recovered in 2009. The correlation between prices, inflation, and equities shows part of the story for why and how equities have been able to recover, these fundamental correlations are working just as they should should be and even though there are signs of disinflation within other fundamental data, this GDP report reveals possible resurgence of price pressures.
The final two days last week while I was trading the yen crosses I noticed an interesting correlation shift between the yens and their majors, specifically between the EUR/JPY and its cousin, the EUR/USD and the GBP/JPY and its cousin, the GBP/USD. I'll get to that part in a moment, but before we dissect that potential correlation shift we need to put some things in perspective in regards to the Japanese yen.
Overall, the JPY put in a rather strong week, especially against the USD, even in the face of equities that were able to rally after selling-off earlier in the week. Under "normal" market conditions, the exact opposite would have been the case as riskier appetites send their money-flows into equities and out of the yen, and based on that fairly solid and steady market correlation, the yen crosses would have been driven higher as the S&P 500 and Dow made back their losses.
That wasn't exactly the case for one of the two yen crosses... earlier in the week I gave a GJ support level of 141.50 which did manage to hold solid all week, but there was a definite shift in the correlation between the GU, GJ, and equities... both the EUR/USD and GBP/USD managed to put in a rather strong performance on Thursday and Friday, however, the GBP/JPY sold-off to a much larger degree than the EUR/JPY even though they generally follow each other when equities are strong and their cousins remain well supported, which was the case at the end of last week.
On Friday the EUR/JPY made its high for the day and remained well supported to the upside just as the EUR/USD was putting in the same exact performance. The GBP/USD also remained fairly supported yet the GBP/JPY was sold-off with conviction. As the euro was testing the 1.3300 level its cousin was testing the 129.00 level, which were their top of the range highs, correspondingly, while the pound sterling was testing its highs at the 1.4770 level and was able to remain supported above 1.4700, the GJ was plummeting down to the 142.50 level which was 200-points lower than its high. Within the GJ's price action it showed zero signs it should be bought and was screaming "sell me" from the time NY opened and right through the close.
So why would the EU and EJ maintain its positive correlation and maintain its ability to move in tandem with equities while the GU and GJ went in opposite directions? Now before we go any further, let me just say this is my own theory and opinion, so take it for what it's worth...
As technical as the GBP/JPY may be, the markets were hit with some massively negative fundamental data out of the UK and even though the GBP/USD found a way to recover back above the 1.4750 level on Friday, I think it's possible the pound sterling/yen correlation is showing risk aversion towards the UK economy, based on the UK's fundamentals which are growing alarmingly negative.
The dollars fundamentals were bad last week and the yen gained a lot of ground on dollar. The euro's fundamentals were great last week and the euro gained on yen. The pound sterling's fundamentals were abysmal and the yen gained on the pound... are you seeing a pattern here? I am. As risk aversion still remains the order of the day, to me it's obvious that the yen was the weakest against the currency which had the strongest fundamentals, and that currency was clearly the euro, not the dollar or the pound sterling.
So, what exactly is putting the pound at such risk? Read on...
Not only do those debt and budgetary issues put the GBP at risk, the potential for a ratings downgrade on UK sovereign debt adds a tremendous amount of risk. Just like Treasuries and Bunds, Gilts are AAA rated but it's my opinion their rating is now at risk. With UK government expenses running almost 125% higher than revenues, how can their sovereign debt rating not be at risk?
The way the UK is dealing with the staggering expense-to-revenue situation is by printing more money but anybody with half a brain cell in their head knows that's not an answer to the problem. In a perfect and honest world the UK's debt rating would have already been reduced to at least emerging market levels (BBB) even though their budget, expense-to-revenue, and debt-to-GDP ratios rival that of any third world country. At this point Great Britain's monetary and fiscal situation reminds me of another island, Haiti.
According to the latest UK debt figures, the DMO will need to raise an additional £197 billion in public debt in 2010, £154 billion in 2012 and 2013, and £125 billion in 2013 and 2014. So, what does all this mean for us as Forex traders, especially for those that trade the pound? It's very simple, and it won't matter what your chart or your techs say, should Standard and Poors, Moodys, or Fitch drop the triple-A rating on Gilts, the pound sterling will be brutalized, end of story.
This week the Treasury is set to auction $101 billion worth of new debt. I'm not even sure why they are referring to these events that involve the Fed buying US debt as a "Treasury auction"... it would be the equivalent of me listing a product on ebay, borrowing money from a bank at 0% interest, bidding up my own product, and then buying it myself with the bank's money and promising the bank I'll repay them when I re-sell my product again sometime in the future.
There's not even any logical sense in this sham the Fed and Treasury are running and it's going to end up backfiring on them because this type of manipulation will burst the bull bubble in Treasuries, it will send the yield on the 10-year far above the 3.00% level and that will put downside pressure on mortgage lending rates making it even harder for potential homeowners to borrow which will even further cap home prices and prevent them from rising. Yeah, that sounds like a great plan to me... and then we have the whole issue for how this sham floods the money-supply which I don't even have time to get in to right now.
In my view, the days of the great Treasury bull run should be officially over. Treasury prices should be starting their march back down while yields should be starting their march back up. Treasury supply should far exceed demand and all of those factors are nothing but bearish for Treasuries. But, with $101 billion worth of fresh US debt flooding the markets this week, I believe equities will be one of the beneficiaries...
Forex Software - Claims, claims, and more claims about smart forex software designed to replace an intelligent forex professional when it comes to trading decisions. If it were as easy as a simple software program every bank or financial institution would be on board. Alternatively, invest your time reading reliable reviews from those with real experience using a specific forex software package or Web-based system. Forex Justice enables you to avoid the pitfalls of forex software purchases.
For those who’ve decided to learn forex and want to receive formal training there are many options. Online or offline - be careful. Investigate how long the company has been in business. Check with the local Better Business Bureau to see if they’re registered. If so, you should have access to a rating system that reveals negative write-ups and more
If you are too busy to trade and can find a trustworthy company that will trade on your behalf by searching through our forex managed accounts reviews and ratings, this might be the best solution for you. Again, do all the appropriate 'off-site' research that would be suggested when trusting your funds with anyone, especially when fx trading
1.Take off your blinders. Don’t believe everything you read. Websites and advertisements are worded a certain, compelling way for a good reason – to make a sale. You’re kidding yourself if you think these software sellers have one iota of a conscience. They don’t and will sleep perfectly fine at night regardless of the number of people they’ve financially burned in any given day.
2.Research, research, research! Before turning over your money, become an expert. This means you have to do some work. There are plenty of review sites and forums out there that offer so-called “unbiased” opinions. But, remember point one – don’t repeat my early mistakes; scrutinize everything you read. To be an expert means you must study reviews, ask questions in forums, and download free trials prior to making your final decision. When it comes to purchasing forex software, there is no such thing as doing too much homework.
3.Know Good from Evil. There are three types of forex software and they range in both price and options. If I were you, I would consider both your budget and level of experience before purchasing. One type of forex software gives you more information and data but may be too overwhelming for beginners, while a second type of forex software allows visibility of trading activity and helps you make smarter decisions. A third type of forex software is designed for the most advanced forex trader and may not be appropriate for your level or frequency of trading. My goal is to help you understand the difference and make the most cost-effective forex software investment decision.
1.Trading Platform – Often inherent in your broker’s Forex system, this software is an all-in-one solution. It gives the trader a wealth of information and basic tools, without a lot of guidance. Great for those who can trade without advice; a beginner might not know what to do with all of the information. With trading platform software, guesswork and luck may help the novice.
2.Signal Software – Inviting more involvement from the forex investor, signal software requires a certain degree of experience on your part. Signal software permits you to witness spread changes and make decisions based on those variances. I would not recommend this type of forex software for the beginner as it is better suited for the more advanced forex trader.
3.Charting Applications – Useful for trend analyses and predictions, forex-charting software is appropriate for the more experienced forex investor. Data streams and features generate alerts on buy and sell recommendations. Forex charting application software can be set up for automated transactions, hence, eliminating the need for human intervention. Newcomers beware - this type of forex software requires a great deal of foresight to be used properly.
With forex software, the most important point I can emphasize is that your needs will change as your level of expertise grows. For example, I still use one of the original types of forex software I purchased years ago, but now I understand the complex tools and can take full advantage of the features. Additionally, I have more than one type of forex software in my collection because they all offer something unique.
Forex software is available in many forms: CDs, downloads, and interactive, Web-based programs. Whichever forex software you choose, make sure its credentials support its claims. Forex software needs to be more than functional. It must ultimately deliver the expected results you are anticipating!
