More Problems for the Euro!
By Mike Conlon | December 11, 2009
I wrote earlier in the week in an article titled, Euro Dead Zone, that there is some potentially trouble brewing in the Euro. Part of this is due to structure of that currency, in that it is comprised of different economies at different levels of strength.
Typically, the stronger economies “balance out” the weaker ones, and as I mentioned there are starting to be a lot more weaker than strong. One of the “solutions” that I pointed out is that the ECB might consider a lowering rates to make it more affordable for the weaker countries to gain access to capital. It doesn’t appear that there is going to be inflation there anytime soon.
But today there is another solution being reported on Bloomberg: that perhaps the weak countries, most notably Ireland and Greece, would pull out of the European Monetary Union (EMU). Or they can pray that the IMF will bail them out.
This presents a problem that is two-fold: 1) I can’t imagine that these countries would leave the EMU voluntarily, which would mean that they have become “persona non grata”, namely not welcome or forced out; which would 2) undermine confidence in the Euro as a currency.
And today we are seeing this on the charts. Let’s look at a 4-hour chart of EUR/USD: (click chart to enlarge)
Now while part of this move can be attributed to US dollar strength, I can’t help but think that the Euro is inherently weak due to the competing interests of its members. If they expel the “weak” members every time there is a problem, the Euro is quickly going to turn back into the Deutschmark! As of this writing, EUR/USD is down .68%.
To follow this situation real-time with a free, practice trading account, click here!
Tags: account, article, blog, charts, currenc, currency, dollar, dow, ECB, EUR, Euro, Europe, eurusd, forex, forextrading, free, fx, fxedu, Il, interest, lot, lower, market, mie, Mike Conlon, news, practice, rate, time, USD
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Weekly Outlook from InnerFX 12/07
By Mike Conlon | December 7, 2009
EURUSD
Despite several attempts to breach higher last week, the euro failed to hold gains as the dollar rallied across the board on Friday, as a result of better than expected unemployment figures. The 270 points decline of Friday has cleared half of euro’s gains accumulated during the previous two months, hence December started by favoring the dollar bulls. Is this the time of a prolonged correction? Could be… but I maintain my positive view on EUR against the buck, for now, treating such declines as potential opportunities to re-initiate EUR long positions. Speaking of current market conditions – short-term sentiment is slightly bearish due to recent rejection into the 1.5150 region along with Friday’s collapse below the 1.49 handle, back into the key support region around 1.4850. A rising trend line support coming from July’s low at 1.3830 has been reached and limited intra-day losses but in case of the decline’s resumption within the coming trading sessions, we should focus towards the next support levels – into the 1.4700/30 and 1.4600 regions. In case of a recovery, which at this moment seem more plausible to me, I expect the 1.5000 mark, along with 1.5050, to provide a minor barrier – a lot weaker than before (during October and November). A sustained breach above the 1.5 handle would also turn momentum positive, signaling that the correction is over. Also keep an eye on the S&P500 as important levels are still intact into the upside – the 1113 barrier which is still intact, despite several attempts to breach higher along with false breaks/spikes to as high as 1119. Another key barrier is the median retracement of the long-term decline from 1576 to 666.75 which is set at 1121. Due to the solid correlation between EURUSD and S&P500: no sustained break above 1113 -> no breach above the 1.5100/50 region, simple as that.
(click all charts to enlarge)
Gold
The superior band of the uptrend channel (seen in the chart below) is, once again, providing support on current pullback. In case of a break lower, next downside barriers into the 1126 and 1100 regions may limit losses. Short-term sentiment shows some bearish signs but it was about time to look for a correction – because it can’t just climb to record highs forever, right? However, if the correction continues – below 1100, bulls should start to worry. On a medium term basis – uptrend is intact and extended dips will favor further buying.
GBPUSD
In my previous article, when cable was trying to recover some ground pushing on the 1.6600 handle from below, I pointed out that more selling towards 1.64 was likely – further weakness emerging, as expected, and cable printed session lows around 1.6420 before closing the week .36% lower. Downside remains favored for now, and a break above 1.6700 is needed to confirm the positive bias. Recent hesitation into the 1.6700 zone confirms the indecision of both bulls and bears and the 1.6270-1.6700 range will probably remain valid for now. However, the said 1.6270/00 support region may limit extended losses and provide a reversal point, as that’s quite an important level.
NZDUSD
Former support provided by the rising trend line coming from .6475 of July has provided a stable resistance on last upside attempts into the .7280/00 region. A break was needed to resume uptrend but selling into rallies favored the current decline which extended to as low as .7130 on Friday. Although NZD’s losses have been relatively smaller comparing to EUR (-0.86% vs. -1.37%), there are no signs of uptrend’s recovery yet. Below current market levels, important support is formed around .7050 by the 61.8% fibonacci retracement of .6685 – .7635. We’ll see how it reacts if current decline continues.
Happy trading!
Tags: analysis, article, blog, buck, charts, decision, dollar, dow, EUR, Euro, forex, forextrading, gbp, gold, Il, lot, market, momentum, nzd, sentiment, ssi, time, trend, unemployment, uptrend, USD
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Yen Strength!
By Mike Conlon | November 25, 2009
As I’m getting ready to take off for Thanksgiving, was just taking a look through some different charts and noticed this one on dollar/yen (USD/JPY): (click chart to enlarge)
This 10-year chart of USD/JPY shows that the dollar is at its weakest against the yen in over 10 years! Remember that when this chart makes new “lows”, it actually means strength for Japanese yen. And you thought I was kidding about dollar weakness in my article below!
To learn more about how to use charts in your analysis, be sure to check out our currency trading courses!
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Happy Thanksgiving to All!
Tags: account, analysis, article, blog, charts, course, currenc, currency, currency trading, demo, demo account, dollar, forex, forextrading, fx, fxedu, Il, Japan, jpy, USD, Yen
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Blog Review at DailyForex
By Mike Conlon | November 2, 2009
I just wanted to take a moment to thank Hillel at DailyForex for taking the time to review my blog. I guess my Mom is not the only one who thinks I’m pretty great LOL! All kidding aside, you can read the review here.
One thing I did want to note about the review is that while I typically don’t offer tutorials on the blog for newbies, I do assume that my readers have a certain level of currency understanding and basic knowledge.
And that’s my role here at FXEDU. I am an instructor. It is my job to make sure that you, the reader, understand the currency market and are comfortable placing trades and participating in the largest financial market in the world.
It is my opinion that a little bit of knowledge can be dangerous in the “wrong” hands. And by wrong I mean “uneducated”.
It is very true that there is a lot of good, free information out there on the internet. But the problem for the novice trader is that it is very unorganized. Because of the nature of being new to something, one might not necessarily know what they should be looking for and could miss very basic, fundamental information that could be critical for their success.
And that’s what we do in our courses. I’m not here to act like some big-shot guru and promise you wild success and if you follow my methods that you’re going to be rich, etc. like you see out there on the internet.
What you’re going to get in our courses is a step by step plan that will take you from start to finish, and help you put together a trading plan that is right for you. The course is an online format, and you have access to our instructors 24-hours a day to ask as many questions as you like. So you can take the course on your own time, at your own pace. And its affordable. Only $100. If you are serious about getting started in forex, our course is the greatest value out there on the internet.
And it won’t cost you an arm and a leg. But it just might save you one. So what are you waiting for???
Get enrolled in a course today!!!
Click here to see all of courses.
Tags: article, blog, course, currenc, currency, currency market, education, financial, forex, forextrading, free, fundamental, fx, fxedu, Il, instruct, instructor, lot, Mike Conlon, news, time, trade, trader, trades
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Secret Meetings Tanking the Dollar?
By Mike Conlon | October 6, 2009
There was an article published in the UK Independent by a fairly credible journalist claiming that there were “secret meetings” taking place between Arab Nations and the BRIC countries to end the US dollar’s reign as the world’s reserve currency by agreeing to trade oil in anything but the dollar.
As a result of this speculation, the US dollar is down and gold is up pretty big today (+2.53%). The talk is that they are looking to establish a basket of world currencies plus gold as payment for oil. While foreign dis-satisfaction with the devaluation of the US dollar is nothing new, should these nations pull this off it could have serious repercussions for the US dollar.
Now I don’t want to speculate what would happen if this were to be true, but this appears at least on the surface to really put pressure on Helicopter Ben and the Fed to do something about the falling dollar. But at this point it doesn’t look like that’s going to happen.
Until global account balances come back into more of a balance, expect this to be nothing more than rhetoric as foreign nations like China and Japan (who have major dollar reserves) have way too much to lose should the US dollar decline further due to losing its reserve status.
In the end, something has to give. This global game of chicken will not end well if we stay on the same course. The question is, who is going to swerve first???
Regardless of what happens, it is now more than ever so important that you have an understanding of what goes on in world politics and currency markets. To learn about it, click here.
Tags: account, article, China, course, currenc, currencies, currency, currency market, dollar, dow, fed, fx, fxedu, gold, Il, Japan, meeting, Mike Conlon, news, oil, ssi, trade
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Australia Raises Rates!
By Mike Conlon | October 6, 2009
I wrote back on Sept. 28th that there was some speculation of an Aussie Rate Hike, and yesterday it happened. Reserve Bank Governor Glenn Stevens increased the overnight cash rate target to 3.25 percent from 3 percent, the lowest it had been in 49 years. What surprised me most about this news was not that it happened, but rather that 1 out of 20 currency analysts surveyed by Bloomberg predicted it!
Readers of this blog had a one week headstart!
Well enough back-patting for me now, as I’ve made plenty of wrong calls in the past. But what this means is that there will be further strength for the Aussie (AUD) which also means weakness for the US dollar (USD) and Japanese Yen (JPY).
However, there has been a lot of Yen jaw-boning recently from Japanese officials about possible intervention so be careful with AUD/JPY. Stick with AUD/USD if you want to participate in the carry trade.
I mentioned recently in another article that the US Fed and Bernanke may have to take action to halt the US dollar decline, but it doesn’t appear that they’re ready to do so.
Want to learn how to do a carry trade? Click here.
Want to test my market calls? Click here.
Tags: account, article, AUD, Aussie, bank, Bernanke, blog, carr, carry trade, course, currenc, currency, dollar, fed, forex, forextrading, fx, fxedu, Il, Japan, jpy, lot, market, Mike Conlon, news, rate, ssi, USD, Yen
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Tough Start for GBP!
By Mike Conlon | September 24, 2009
Sometimes in trading you just have to stick with your initial “gut” feeling. Yesterday I wrote in an article below, “Sound As A Pound…. For Now” that I thought the long-term outlook for GBP was negative but that it would probably take a while for the market to catch on before the serious selling would begin.
Apparently not. And I highly doubt its because the market reads this blog, though one never knows! LOL
Anyway, GBP is getting slaughtered this morning, with GBP/JPY (-2.30%), GBP/USD (-1.92%), EUR/GBP (+1.64%), and GBP/CHF (-1.73%).
While I initially thought that GBP would remain positive vs. USD, it appears that they may be playing “catch-up” or “catch down” as it were to USD in the Quantitative easing department.
Any way you slice it, it looks like the GBP selling has begun and it could be a while for it to recover.
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Tags: account, article, blog, CHF, currenc, currency, currency market, dow, EUR, forex, fx, fxedu, gbp, Il, jpy, Mike Conlon, money, pound, practice, practice account, time, trading, USD
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EUR/CHF launches another 60+ pips and counting!
By Sean Hyman | July 30, 2009
Yesterday, I wrote an article and did a YouTube video for our partner, mywealth.com. Since the release of that article, EUR/CHF has launched forward another 60+ pips and counting. It’s literally hitting new highs as of this writing.
To view the full article and video, check it out here: http://www.mywealth.com/blog/post/potentially-safest-forex-play-entire-fx-world
Enjoy!
Sean Hyman
www.forextradingblog.com
Tags: article, blog, CHF, EUR, forex, forextrading, fx, Hyman, mywealth, pip, pips, release, Sean, Sean Hyman
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Bloomberg Forecasters Agree with my EUR/CHF position!
By Sean Hyman | July 20, 2009
Today I just wanted to share a piece of a Bloomberg.com article with you that backs up my view in “selling francs” along with the central bank when you buy the EUR/CHF pair.
Here’s what they had to say about it:
July 20 (Bloomberg) — Switzerland’s central bankers are breaking the will of foreign-exchange traders with their first solo currency-market interventions since 1992. Less than a month after betting the Swiss National Bank’s franc sales would fail to halt its rise, investors are the least bullish since 2007, options prices show. This year’s five most- accurate franc forecasters in Bloomberg surveys see the currency trading between 1.50 and 1.55 per euro by Dec. 31, the range it has been in since after the bank started intervening March 12. “The SNB has won its battles, and they’ve given no indication that they are ready to end this policy,” said Jessica Hoversen, an analyst in Chicago for futures broker MF Global Ltd. She advises buying euros and selling the franc when it approaches the 200-day moving average. The currency traded at 1.5196 per euro as of 11:16 a.m. in London; the 200-day average was 1.5104. By holding back the franc, policy makers led by Chairman Jean-Pierre Roth, 63, are trying to prevent deflation from worsening the steepest recession since 1992 and restore investor confidence.
Want to learn more about fundamentals and technicals? Sign up for an inexpensive, only forex course today and we’ll show you how: http://www.mywealth.com/currency-trading.php
Also, get a free, real time demo trading station here: http://www.fxedu.com/practice-forex-account
Sean Hymanwww.forextradingblog.com
Tags: account, article, bank, blog, central bank, central bankers, CHF, course, currency, currency trading, demo, demo trading, dow, ETF, EUR, Euro, forex, forextrading, franc, free, fundamental, fx, fxedu, Hyman, intervention, invest, investor, market, mywealth, news, pair, practice, rate, real time, recession, sales, Sean, Sean Hyman, ssi, station, Swiss, Switzerland, technical, time, trade, trader, trading station
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The Swiss confirm that they are intervening when the Franc strengthens!
By Sean Hyman | July 10, 2009
The Swiss are intervening in their currency when they notice the franc’s strength. This is likely to continue until their economy no longer suffers from the franc’s appreciation OR until global economic growth is solidly underway to where traders are “franc sellers” once again as they seek out higher yielding currencies at that point. Here’s the Bloomberg article that confirms the Swiss actions: http://www.bloomberg.com/apps/news?pid=20601083&sid=ad95AZDGUM9s So while many pairs are falling lately, the Swiss are attempting to put a floor under EUR/CHF in particular. If they are successful, then one could pick up some meager rollover interest daily with minimal downside risks when compared with other currency pairs out there.
Want to learn more about fundamentals and technicals? Sign up for an inexpensive, only forex course today and we’ll show you how: http://www.mywealth.com/currency-trading.php
Also, get a free, real time demo trading station here: http://www.fxedu.com/practice-forex-account
Sean Hyman
Tags: account, article, blog, CHF, course, currencies, currency, currency pair, currency pairs, demo, demo trading, dow, economic, economy, EUR, forex, forextrading, franc, free, fundamental, fx, fxedu, Hyman, interest, mywealth, news, practice, real time, Sean, Sean Hyman, station, Swiss, technical, trade, trader, trading station
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