EUR/USD Daily Review 07 Dec 09

Good day to all.

Today is Monday. As usual a bluish Monday.

Watch out for a bad attitude from the Monday Blues Koala!



The EUR/USD is having the blues too. Continuing the bearish move since around Wednesday last week, it touches the 1.4700+ region.



Taking note of the circled area, the S&P 500 fights hard to break above 1110 and beyond. I warned about how sentiments may get tired previously and notice how the S&P 500 tested the 1100 line.

Oil is around $76+ now, well within the "standard" zone these days. This suggest that the economy may not be picking up as fast as believed for now.

You can read my recent article on oil and the economy here to understand more.

Gold the biggest winner now becomes the biggest loser! What goes up fast drops down hard too. It is currently at around $1142+. This may indicate that the risk averse folks who are parked in the safety of gold may be selling off for higher yields. Probably encouraged by the better than expected Non-Farm Payroll.

You can read about the clues that we can observe from gold with regards to the economy here.

***

While we got better than expected numbers from the Non-Farm Payroll, we must always take note of the bigger picture. Unemployment rate is at 10% and the number of banks in US to fall this year reaches 128. Mixed signals in the S&P 500 do suggest that not all folks are as ready to go all out for now.

Bullish momentum may take us for a test of the previous bullish trendline again at around 1.4920+ while bearish pressure may drop the currency pair to 1.4719+.

Many folks are calling this the turning point of the EUR/USD. Personally being the careful koala i am, i will monitor closely for further developments as important releases are due this week.

Furthermore, the EUR/USD seems to be fickle about the two main trading themes these days. To reward positive economy news with an US Dollar sell off due to risking seeking or an US Dollar buying spree due to confidence in the US economy? Things may be changing and we do not want to be on the wrong side of the fence.

***

Had a 13 hours day at work. This adds to my blues like whipcream to a cup of low fat coffee. TOTALLY WRONG!

4 more days to the weekends and the start of my year end vacation.

I will be traveling but my dedication to my task of delivering forex views in a shameless way remains so strong that i will be tugging along a laptop. Only for you koalas. *yay! *claps! *whistles! *tears of joy! Thank you Thank you. I never knew you koalas love me and my blog so much.

Alright enough of self consolation for now :P x 100 TrAdE SaFe !!

EUR/USD Daily Review 07 Dec 09

Oil and the economy

Hello,

welcome to another Koala Forex Education Article.

Self learning forex is easy!

Today i will like to touch on oil and it's role in the economy.

Firstly, what is oil? We know that oil is a non-renewable fossil fuel that is used in many aspects of our daily life. Transportation, electricity, heating, etc.

Having said so, oil price is therefore affected by the rules of supply and demand. Since demand is made up of many aspects of our daily life, we can use the oil price as a clue to the health of the economy.



Looking at the weekly oil price from Jan 08, we can see that the peak coincides with the beginning of the 2008 Financial Crisis. After reaching the low of Dec 09, oil price have since slowly gained. It currently around $77+ and has been hovering in this region for more than a month.

This seems to suggest that the economy's health is right around this level for the moment. It is unlike the equities for example which are driven mainly by sentiments and hence still raising in prices due to the belief that the economy in general has recovered much.


Source: Energy Information Administration

Looking at the chart of weekly crude oil stocks ( inventory ) in the US, the amount of crude oil stocks is higher than the usual range for this time of the year. This suggests that crude oil usage remains lower than usual.

Understanding the role of oil, we can proceed to link up connections as to why demand of crude oil remains low.

- Unemployment is high, reducing the need to drive to work
- Times are bad and folks are switching to public transportation
- Demand is low for various consumer goods, reducing the need for oil as a raw
material in the industries

The list goes on.

It is important to note however that since oil follows the supply and demand rules, shortages in supply may trigger movement in price too and hence a look at the oil stocks as we did here may help to shed more light.

The role of oil is indeed important in our modern day economies. While the nature of the fundamentals does not make oil a good leading indicator of short term forex prices, it is vital as a clue for long term currency relationships and hence an important indicator to note.

You may wish to read my article on Gold and it's role in the economy too.

Oil and the economy

The Koala System Weekly Review 30 Nov 09 - 04 Dec 09

Good day to all Koala System users.

Did your koalas treat you well this week? Now let us all remember that the koalas treat us well not only by suggesting to us when to trade. It warns us to stay out too when the going gets tough.

As suggested in my previous EUR/USD Weekly Review, this week was tough




As a promise to a few users, i have included detailed view of the various highlighted areas and the thought process that comes with it.

1) Right at the start of the week, the koalas warned us that things were choppy. Notice that although the price seemed to be going down, the red koala tested the other 2 koalas often. This was a no trade signal as it suggested that the price might be trying to flip direction.

2) True enough, the price flipped later and presented to us a good opportunity. I took this opportunity because the 3 koalas were just around parallel and the price was around the red koala. When you see the price sits or rests around the red koala, it is suggesting that the move is stable.

3) Lastly with the Non-Farm Payroll, comes the usual volatility associated with it. The Koala System did warned of it. We could see the 3 koalas diverging which indicated that the current move might be too fast for comfort. Furthermore, the price hardly touched the red koala and this suggested that the price action was amok.

Folks, i hope this article shed some light on how you can think like a koala. Remember that The Koala System is designed to prevent you from going against the trade and hence patience must be there to wait for the right opportunity. Plan your trade well and never panic again!

Trade safe.

The Koala System Weekly Review 30 Nov 09 - 04 Dec 09

EUR/USD Weekly Review 30 Nov 09 - 04 Dec 09

A good day to you.

I hope your weekend is coming along well so far.



The week was a big whipsaw as the EUR/USD climbed and tested the previous high of 1.5140+ as circled and ended the week just below the bullish trend.

I said during the last weekly review that since the bullish envelop was pushed higher to 1.5140+ , we may see more of it. Indeed we did visit the high of 1.5140+.

The main highlight of the week was the Non-Farm Payroll report and it clocked in much better than expected. At a mere -11 000 versus the expected - 119 000. This suggests that the US economy may be recovering and hence the US Dollar strengthen. As many speculations were towards the bullish side, the sudden drop in the EUR/USD probably caused stop losses to trigger, adding on to the bearish momentum. The pair eventually closed around 1.4844+.

I mentioned in the EUR/USD Daily Review that the present trading theme apparently rewards the good developments in US as a signal for risk seeking. This tends to cause the US Dollar to weaken as traders sell the currency for higher yields. The reaction in this session of the Non-Farm Payroll was contrary as the US Dollar strengthens instead. Thus i am speculating that the recent sell off of the US Dollar may be caused by the lack of confidence in the US Dollar, rather that the confidence in the EURO. The drop of Gold prices seems to validate this as traders sell off their Gold for riskier assets.

There are quite a few speeches and importance releases stacked up next week. ECB Trichet and FED Bernanke will be making appearances early week and be ready for unexpected spikes as traders react to their comments. US trade balance and unemployment claims come Thursday while the US Retail Sales, US Prelim UoM Consumer Sentiment and an appearance again by ECBTrichet, Friday. These are important events and may affect the price. Other releases are due too and you can find them in the Economic Calender below.

While bullish forces may attempt to regain the bullish trend by targeting the support turned resistance line at 1.4900+, the S&P 500 seems to have stalled around 1100 and close monitoring should be done. Any breakdown in sentiments may bring out the bears for an attempt to overcome the strong support of 1.4800, opening up 1.4730+ for grabs. Gold may serve as a clue too as a halt in it's ascend may suggest that 1.5140+ is the turning point thus marking the end of the bullish trend since March 09.

The week ahead seems bumpy due to the numerous appearances and releases. As usual trade safe and never risk excessively. Embark on my Proper Money Management Series here and learn to manage risk.

If you are looking for more Forex articles, Casey tames the EUR/USD at his blog while Forex Crunch masters most of the currency pairs!

EUR/USD Weekly Review 30 Nov 09 - 04 Dec 09

EUR/USD Daily Review 4 Dec 09

Who loves a Friday say I.

Finally the weekend is coming and soon we can start dreading the upcoming Monday. Yeah !

We had our monthly free entry no restrictions bound margin call party. The Non-Farm Payroll !


After testing the previous high yesterday, Non-Farm Payroll came and took the breath ( and for some money ) away.



The S&P 500 while making higher highs as circled, remains rather drawn to the 1100 level. This seems to suggest that the market is not quite ready to move on to the next level yet.

Oil is currently hangs around $77+, earning the award of one of the most boring commodity for now.

Gold our "winner" took a punch as the speculators probably switched their loyalties to the US Dollar as a result of the better than expected Non-Farm Payroll. It currently licks it's wounds at around $1170+.

***

Today looks like a fundamental day to me!

You see, these days when the news is bad in the US, the US Dollar usually strengthen due to risk aversion. On the other hand, when data is good, the US Dollar weakens as folks move on to seek higher yields.

Today however sees a better than expected US data and this resulted in the US Dollar strengthening! Back to the basics now. When something is good in the country, the country's currency usually strengthen due to demand. Now that's fundamental for you!

This leads me to speculate on a theory. ( With the help of Mulder's recent report to me )

*The recent bullish run of the EUR/USD may be more on the lack of confidence in the US Dollar rather than the confidence of the EURO.*

If this indeed proofs to be true, we may be in a better position to interpret economic releases in future.

As we close the week, bullish forces may attempt to take it back to 1.4910 to close for the week while the jubilant bears may try to capture more at 1.4850. ( This may indicate a break of the current bullish trend. Strong support expected probably )

***

Today's Non-Farm Payroll was unexpected and probably many margin calls happened. Hopefully none of you the koala readers had it. Remember it is core of the koala school of thought that proper money management must always be there.

Mulder just sent me a short update on the situation and it seems that many from the Union of Excessive Risk Kangaroos (UERK ) were hit by the rouge price action. Thank god the impact to the Kingdom of Koalas was minimum as most koalas stayed true to the values of the koalas.

Stay tune for the EUR/USD Weekly Review and another koala Forex Education article.

Trade safe and have a goooood koala weekend!

EUR/USD Daily Review 4 Dec 09

EUR/USD Daily Review 3 Dec 09

Good day!!!

today is Thursday. You know the dance come on... TGIF IS TOMORROW !!!!! yeah !

I am so looking forward to it.



The currency pair retreated after a test on the previous high of 1.5140+.
Currently it sits between the region of 1.5063 - 1.5088. I LOVE IT WHEN MY CHARTS WORK!



While the S&P 500 did attempt to break clear of the de facto resistance at 1110+, as spoken yesterday, it seems to have bounced off for now. Folks may wonder why the better than expected unemployment claims data in the US did not push this sky high. Well do note that after all, employment rate of the US is still at a record high! We will probably see more testing of the resistance though.

Oil remains around $78+ -. Ranging for ages as the industries struggles with the economy recovery.

Gold in the meanwhile eased off slightly, currently around the $1210+ zone.

***

Koalas, tomorrow is .. NON FARM PAYROLL !!! mambo jumbo margin call party time! Personally i am a risk averse koala and i don't hold my short term positions around then. Dips of 100 pips are not uncommon and you won't want to be on the wrong train!

Long term outlook remains bullish as the weekly trendline has not been breached yet.

Bullish pressures may test the previous high of 1.5140+ again.

Bearish surprises should target clearing the area of 1.5063+ and followed by 1.5000.

***

Do you like the new forex / commodities prices? How about the economic calender? I hope you do! I am so glad the weekends are coming soon. I need to rest more as my cough is coming back. I'll see u all soon.

Trade safe!

EUR/USD Daily Review 3 Dec 09

EUR/USD Daily Review 2 Dec 09

Good day to all.

It has been sometime since i boasted shamelessly!

I LOVE IT WHEN MY CHARTS WORK !!



For the past 3 candles, the EUR/USD has been flirting around the 1.5063-88 region. These were previous highs.



The S&P 500 on the other hand seems to have a resistance line formed right about 1110+. The poorer than expected ADP Non-Farm Employment release may make the task of breaking through the resistance even harder. Should it be cleared, we may see another round of US Dollar weakness.

Oil currently remains around $78+. This is going on for too long and we may need... yes only he can find out the truth.... MULDER ! ( I need to contact him again as after the clues from Gold about the US Dollar article, he has once again disappeared hot on the trail of the possibilities of alien forex. )

Gold is currently high at $1212+ ( Oh well, stop wishing that you bought the gold at $950 )

***

EURO minimum bid rate is due tomorrow! Expect the unexpected as traders guess and speculate the rate and crazily react to the press conference should they hear any comment that disturbs them.

After which, we have more mambo jumbos with the US unemployment claims and followed on later by Fed Chairman Bernanke's appearance.

Bullish figures remain as a possible test of 1.5140 followed by 1.5200.

Bearish momentum will need to clear 1.5063 before heading on to 1.5000.

***

Do you love eating? I do. I personally feel that to eat is a kind of happiness too. Unfortunately i do not have much time after working, blogging and feeding of the koalas. Therefore little exercise. We all know what eat alot + little exercise means.. FAT. OH NO.

Trade safe and eat well!

EUR/USD Daily Review 2 Dec 09

EUR/USD Daily Review 1 Dec 09

Jingle bells Jingles bells forex all the way,
oh what fun it is to ride the bullish pair leads the way HEY !

GoooooooD Morning Koalas! A great Tuesday i hope. It is Dec and this means Christmas is here soon. I hope Santa deposits lots of pips to my sock yeah!



The currency pair dipped on concerns of Dubai World last week and recovered this week as quickly as it dips amid reports of support from UAE. This chart shows the dangerous volatility nature of forex so clearly that it is almost
so please trade safely.



Likewise, our market clue the S&P 500 resumes a bullish stance. This suggests that risk seekers are out again. This may add bearish pressure to the US Dollar.

Oil in the meanwhile approaches the top of the range at $79+.

Gold is the winner of the day again, towering high at $1190+. Over the weekend, Iran announced further nuclear plans. Seeing that the US Dollar remains weak while Gold rose, we may be seeing some risk aversion channeling here instead. After all, Gold being it's timeless status, may be seen as a safe haven in times of trouble. Read my article on Gold and it's role in the economy here. to find out more.

***

As we are seeing strong economic reports from the Asia giant China, sentiments may be positive and risk seeking should surface. Furthermore, the rate hike by Australia's RBA suggests that the world economy seems to be moving along well.

While it seems that the sentiments are strongly positive, do not forget that this is forex. US ADP Non-Farm Employment Change is due tomorrow and the Dubai World Crisis may not be totally over yet.

Bullish developments may bring us to test 1.5140 and then 1.5200.

Bearish reinforcements should target to clear the region of 1.5063 and then 1.5000.

***

Today is World Aids Day. Sadly, many folks are dying of Aids daily, often not a choice of their own. Do visit the official website and show your support in ways that you can. This is a worldwide problem and everyone has a part to play. Even humans who think they are koalas.

By the way, my long work starts tomorrow and you know what this means... load up the medicines and fight the future! ( anyone wants to tell me who will like this phrase " fight the future ? :P )

Trade safe and please don't let the possibility of a margin call be FULL HD to you too !

EUR/USD Daily Review 1 Dec 09