Risk Appetite Returns!
By Mike Conlon | February 16, 2010
The markets are back to “normal” after some being closed for various holidays. Risk appetite is the play today, as the Euro is rebounding against the dollar on thoughts that the Euro may have slid “too far, too fast”. Also, news out of Australia from the Reserve Bank minutes hinted that further rate hikes were in order should the Australian economy extend its recovery.
Also to note is that commodity prices are higher as which is consistent with an increase in risk appetite.
On to the currencies:
Aussie (AUD): The Aussie is higher on new from the RBA minutes. Analyst expectations are for the Aussie to gain to .91 vs. USD by the end of March. Should the economy continue to expand, then further rate hikes could be in order. The current benchmark rate is at 3.75%, making the Aussie a popular destination for carry trades.
Kiwi (NZD): The Kiwi is moving in tandem with its South Pacific partner the Aussie. While growth has not been as robust in New Zealand, the Kiwi will also benefit from increased commodity prices and a higher benchmark interest rate as well. That rate is currently 2.5%.
Loonie (CAD): The Loonie is trading higher this morning on the risk trade as well as the fact that oil is back over $75. Canada is in the spotlight right now as host of the 2010 winter Olympics as sometimes they get lost in the shuffle in the risk trade hierarchy. The Loonie is up to 1.043 vs. USD this morning, its highest level this month.
Euro (EUR): The Euro is higher against all but the commodity currencies, paring back some of its losses from the previous week. There is tough talk coming from the EU finance ministers regarding Greece, as news has surfaced that Greece may have used derivatives to “fudge the numbers” in order to gain entry to the EU. The fact that Goldman Sachs was involved should come as a shock to no one. Also contributing to the Euro gains this morning is the reading from the German Sentiment Index this morning which was lower than previously reported, but ahead of analyst expectations which net-net is positive for the Euro.
Pound (GBP): The Pound is lower this morning across the board as consumer prices rose 3.5% from a year earlier. A deviation of more than 1% from the target rate of inflation (2%) requires a letter from BOE Governor King as to how he intends to get back to the goal rate. Inflation volatility is to be expected, and this reading was not a surprise to analysts. This could put more Quantitative Easing back on the table for the UK, which would be Pound negative.
Dollar (USD): The Dollar is down this morning as risk-taking is the flavor of the day and stock futures and commodities are higher. The dollar is down 1% vs. the Kiwi and Aussie.
Yen (JPY): As is expected on a risk-taking day, the Yen is down against all but the Pound as the threat of deflation keeps rate hikes off of the table and provides the fuel for carry trades in Aussie and Kiwi despite the good GDP numbers from yesterday.
In overnight markets, the Nikkei closed higher but the Hang Seng closed lower. European markets are higher as are US stock market futures. Oil is back over $75.25 (+1.5%) and gold is up to around 1115 (+1.38%).
As you can see, there is always something happening in the currency market that can influence sentiment and thus market direction. Following the news is extremely important in understanding how market participants view world events.
Do you want to be a market participant? Get started today!
To learn about how world events can affect all markets, be sure to check out our currency trading courses!
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End of the Year Blowout Sale!
By Mike Conlon | December 28, 2009
END OF THE YEAR BLOWOUT SALE! OVER 55% OFF!
As we come to the end of 2009, now is the time to look back and reflect upon this past year and to think about making changes going forward. 2009 was a “roller coaster” of a year for investors and many were left wondering what to do when the markets were collapsing and then missed the rally back.
However, one group of investors was able to navigate the treacherous waters of 2009 with relative ease and was able to turn market panic into profits! You may be asking yourself where these investors found these opportunities…..
In the Currency Market!
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Did you know that the currency market is the largest financial market in the world with over $3 trillion traded every day and is 30 times larger than the daily trading volume of NYSE and NASDAQ put together?
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We realize that many of our subscribers are novices to the currency market and that is why we are offering our subscribers from now until the end of 2009 our most complete and thorough currency trading program — ALL 3 COURSES — at over 55% off the regular price!
The FXEDU currency trading course bundle, valued at $1397, can now be yours for only $625!
That’s over 55% off the retail price!
Our courses will teach you:
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You will have over 6 months to complete the courses and will have 24-hour/day access to our instructors and course materials for one full year to continue your training throughout the year!
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Tags: account, charts, comments, course, currenc, currencies, currency, currency market, currency trading, data, dow, financial, fx, fxedu, Il, instructor, invest, pair, pairs, rate, spot, Swiss, time, trade, trend, volume
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GBP Still Strong!
By Mike Conlon | October 16, 2009
The British pound is still strong today, showing a little bit of follow through from yesterdays gains. Yesterday I called out a trade in GBP/AUD as a low risk opportunity based on some technical factors, despite the fact that the trade was “counter-trend”. Let’s see how its doing:
(click charts to enlarge)
As you can see, this trade is up about 169 pips from yesterdays entry price (1.7828-1.7659=169 pips). While you’re not going to be able to retire just yet LOL, this high probabilty set-up is showing some initial gains and looks promising going forward. To give you an idea of what this means, with just one lot, you would have made $169 if you were in this trade.
And the cost to get into this trade? Just $50 in margin. So in theory, you put up $50 to make $169. That’s pretty good coin! Now imagine what happens when you use the multiplier effect of leverage!
While its never a good idea to over-leverage your account, taking high probability trade set-ups can be extremely profitable if you know what you’re doing!
To learn about how to spot trade set-ups such as these, check out our currency trading courses here.
Want to test my calls in real time with a practice account of your own? Get started here.
Tags: account, AUD, blog, British, charts, course, currenc, currency, currency trading, forex, forextrading, fx, fxedu, gbp, idea, Il, lot, Mike Conlon, pip, pips, pound, practice, practice account, real time, spot, technical, tip, trade, trend
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See What I Mean?
By Mike Conlon | September 23, 2009
It looks like the FED did as was expected and the market was kind enough to follow suit, by selling the dollar and buying up other currencies. But see what I mean about the volatility! Take a look at this 5-minute chart of EUR/USD. (click chart to enlarge) Over 60 pips in less than a few minutes!
Hopefully readers you took my advice and sold USD bought other currencies, or steered clear of the mayhem all together!
Want to learn how to spot forex trading opportunities based on the fundamentals? Click Here.
Want to get set up with a real-time practice forex trading account? Click Here.
Tags: account, blog, currenc, currencies, currency, dollar, EUR, fed, forex, forex trading, forextrading, fundamental, fx, fxedu, Il, market, Mike Conlon, minutes, mywealth, pip, pips, practice, spot, time, USD
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GBP/USD Short Looking Good!
By Mike Conlon | August 26, 2009
Just wanted to post a quick update on this trade that triggered yesterday. We actually closed out a portion at 1.6175, for a 175 pip gain. This pair is the biggest loser of the day so far (-1.04%), so it appears that other traders may have recognized the H&S pattern as well. The reason we closed a portion was because of the doji that occurred on the 5-minute chart, and the stochastic cross that occurred as well. See chart (click to enlarge)
While this trade started out as a pattern on the daily chart, we chose to drop down to the 5-minute chart to manage the trade as our first profit target was hit. Our trailing stop for the rest of the position is now at 1.6275, which is just above the most recent area of resistance, and also represents a 75 pip gain. So basically this is now a risk free trade!
To learn how you can spot trades such as this one, check out our inexpensive currency course!
To get started with a live, free practice account, click here.
Tags: account, blog, closed, course, currenc, currency, dow, forex, forextrading, free, fx, fxedu, gbp, Il, mie, mywealth, pair, pip, practice, practice account, spot, trade, trader, trades, update, usd
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Markets become “weighed down” after today’s Employment report!
By Sean Hyman | July 2, 2009
Unemployment in the U.S. now stands at 9.5%. Job losses came in at -467,000 vs. -360k expected. Oil slumped to $67 down recently from $70-$73. The Dow is down 160 points. Most all foreign currencies that I see are down on the day as the defensive plays of the dollar and yen both thrive upon the dour NFP report. So any bright spots out there? Yes, the revision on last month’s NFP came in better than expected by a small margin. Also, the ECB kept rates unchanged rather than lowering rates in the Euro Zone. So those are basically the only two “rays of light” out there this morning so far.
Tags: currenc, currencies, dollar, dow, ECB, EUR, Euro, forex, FXEDU, Hyman, job losses, lower, mywealth, nfp, oil, rate, Sean, Sean Hyman, spot, U.S., unemployment, Yen
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How to Spot a Longer-Term Trend!
By Sean Hyman | June 30, 2009
When I’m teaching my courses each day, I get this question quite often. So I thought I’d share it here with you too! How in the world do you know how to spot the long term trend? Well it’s really simple.
First, you should pull up a daily chart that goes back in time at least a year (even more time is even better). Then place a 200 Simple Moving Average (SMA) on the chart. That’s the line that I’ve got the arrows pointing to on the chart below. The SMA can be found under the “Studies” or Indicators” section of most any charting package.
Let the 200 Day SMA be Your Guide
One of the most widely used indicators in the world is the 200 SMA. I even catch purely fundamental traders putting it on their charts. Why? Because everyone needs to be able to tell which way the long term trend is headed, even pure fundamentalists.
I’ve charted the EUR/USD pair on the daily chart going back several years in time.
The 200 SMA Smoothes out the Trend and Points the Way to Trade
Towards the left of the chart we can see that the “average” price moves upward over time. So while the price may be jagged and spiky at times, they moving average smoothes all of this out so that we can tell if the price is headed up overall or downward overall. To the left of the chart, the price continues to climb higher, so it’s in an uptrend at that point. However, on the latter part of the chart (right side), then trend turns downward and the longer term trend is then downward. You want to define the trend’s direction and trade with it because that’s where the higher probability trades lie. Low probability trades would be shorting an uptrend or buying a pair in a downtrend. You will notice that the price tends to trade at or above the 200 SMA in an uptrend and in a downtrend the price dips below the 200 SMA and holds at or below it.
How to know when a New Longer-Term Trend is likely Beginning!
Therefore, we’re alerted to a “new long term trend” emerging when the price makes this shift. We can see that in August of 2008 when the price fell below the 200 SMA. At that point, the long term uptrend ceased and the “new” downtrend emerged. Then in May of 2009, the uptrend re-emerged for the EUR/USD. As long as the pair can hold above this 200 SMA, then it’s still in its longer term uptrend. Once the pair drops back below the SMA and holds below it, we know that the uptrend has likely ended. So let the 200 Daily SMA on the daily chart be your guide as to whether you should be looking for “long” (buying) entry opportunities or whether you should be looking for “shorting” (selling) opportunities for your entries into a trend. Using this as your guide will enhance your trading performance. No matter how much you get tempted…don’t trade against this trend, but stick with it. Oh sure, you can take profits if you wish, once it trades way away from the 200 SMA…just don’t counter trend trade against it. Be patient and wait for a re-entry back into the trend once the pair retraces back towards its 200 SMA once again!
Click on the chart to enlarge it. 
Tags: alert, blog, charts, course, dow, downtrend, EUR, forex, forextrading, fundamental, Hyman, pair, Sean, Sean Hyman, short, simple, spot, teach, time, trade, trader, trades, uptrend, USD
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When Support becomes Resistance!
By Mike Conlon | June 24, 2009
In my previous note today I mentioned that this morning was down for the Euro. As I was going through my charts I noticed something significant on EUR/USD. Earlier this month, I pointed out a technical pattern on this currency pair known as a “head and shoulders” pattern. The premise of the pattern is that when you draw the neckline it acts as support and if that support is breached it can become a pretty good short trade. Turned out to be a pretty good trade.
Now here we are, a couple of weeks later, and what was formerly short-term support has now become resistance! Let’s have a look… (click charts to enlarge)
As you can see from the charts, the area right around the neckline that had formerly been support has now become resistance and has held on two different occasions. This occurs often and is something that technical traders should be aware of. Short-term traders who like to trade “the range” can enter short positions below resistance with a stop placed just above.
Get ready for the FOMC announcement, just about an hour away!
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Know your Patterns!
By Mike Conlon | June 4, 2009
As currency traders, it is extremely important to know technical patterns. Especially if one plans to trade in shorter-term time-frames. Yesterday I wrote about looking at different time-frames and finding trades that I may not otherwise know existed. And this part of my daily routine. Allow me to explain.
Every morning when I begin my day, I look at all of the currency pairs I intend to trade in as many time-frames as possible. I am looking for discernible patterns that I recognize that will give me a clue as to which way a pair may be moving that day. Once I have a few patterns that I like, I then check for news or information which may give me a clue as to why a certain pattern is forming. Here’s one I found this morning:
(click chart to enlarge)
As I was flipping through my charts, I came upon EUR/USD and saw this beauty on a 3-hour chart. A near-perfect head and shoulders pattern! If you look at the chart, you can see both shoulders (marked by an ‘S’) and the head (marked by an ‘H’). This is a reversal pattern and tells me that if the BODY *note not the wick* breaks the neckline, then its going to be a pretty good short opportunity.
If the candle does not break the neckline, then I can consider getting long and using the neckline as support, placing my stop just below that area.
Upon checking out the news, I know that the ECB had a rate meeting and that ECB President Trichet made some comments. Now I’m not going to pretend to be able to know the effects of his comments or actually even what he said for that matter, but I will let the market tell me.
By using a technical set-up to get into a trade, I can sport low-risk entries for what I’m hoping will be profitable trades. To learn more about how you can spot patterns like this one, check out our currency course. Just think, if you learn just one set-up from our course and you make a profitable trade, then the course has paid for itself!
Tags: blog, charts, comments, course, currency, currency pair, currency pairs, EUR, explain, forex, forextrading, fx, fxedu, market, news, rate, spot, technical, time, trade, trader, trades, USD
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Trading in Different Time-Frames!
By Mike Conlon | June 3, 2009
When trading different currency pairs, it is important to be aware of the time-frames you are trading in so that you can take advantage of different moves. Today is a perfect example of this scenario. So far this AM’s biggest losers are the commodity currencies. The Aussie dollar (AUD), Canadian dollar(CAD), and New Zealand dollar (NZD) are all losing ground against the US dollar (USD) and the Japanese Yen (JPY).Does this mean it is time to get short? Not so fast. In previous articles Sean Hyman has made a great case for these currencies and frankly the charts don’t lie! The uptrends on the commodity currencies have been going up steadily and the fundamentals are in place for their rally to continue. But what to do about a day like today?This is where looking at different time-frames can help you. Take a look at the charts below. The first chart is a 5-minute chart of the AUD/USD pair. The lines drawn on the chart represent short-term resistance, so trades entered on the short side near those resistance points would provide low-risk entries for a short position.(click on charts to enlarge thumbnail)
The chart on the right side is the daily chart of the AUD/USD pair. As you can see, the trend is clearly up. Which means that you want to be long, and brings us to the theme of the day, that you can be in opposite positions on the same pair at the same time! This is known as “hedging”, and can really help add to your profits and help limit your losses.
Recently the NFA (National Futures Association) outlawed this practice here in the US, but this is still allowable abroad. If you would like to learn more about hedging or how you can open a hedging trading account with a broker abroad, email us at: sales@fxedu.com.
Tags: article, AUD, Aussie, blog, cad, charts, commodity, currencies, currency, currency pair, currency pairs, dollar, forex, forextrading, fundamental, hedging, Japan, jpy, new zealand, new zealand dollar, nzd, spot, ssi, time, trend, uptrend, USD, Yen
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