EUR/USD Daily Review 7 May 10

Good day Koalas!!!!!!!!!!

Today is cash your pips for beer day. What does this mean? This means that if you are GREEN for the week, good job! Enjoy the weekend. If you are not, do not engage in emotional trading. Head to The Koala's Learn Forex Trading Training College and learn forex the right way!

Yesterday, we noted that the ECB was refraining from taking concrete measures to rectify the crisis. Comment was made that European officials should instead increase their measures to cut budget deficits.Investors were also worried about hiccups in the execution of the aid solution for Greece.



After a test of the 1.2550 line, the EUR/USD retreats above 1.2600.

The S&P 500 faced a massive drop yesterday and NYSE was reported to comment that electronic trading was to be blamed for the plunge. The plunge was so deep that i decided not to post it here as the chart will be too long! To give you an idea how bad it was, the plunge briefly erased more than $1 trillion in market value. The S&P 500 had since recovered and is now trading around 1120. It remains depressed by the crisis in the Euro Zone.

Oil has dropped below $80 and the current crisis seems to be seriously affecting the recovery.

Gold has touched $1200 despite a stronger US Dollar. This suggests increased demand due to risk aversion as gold is usually an investment of choice during stormy economic weather.

***

An emergency conference call by G7 finance chiefs today was made to discuss the impact and spread of the Greek crisis. The Australian Prime Minister said that investors felt that Europe’s efforts so far is “inadequate.” and the UK Prime Minister commented that the crisis is “deteriorating.” The apparent lack of concrete measures by the ECB worried investors and dampened sentiments.
The time taken for the European nations to come together for a solution for the Greek deficit crisis raised concerns for investors as speculations were made that in the event of any other European nations that plunges into trouble, the same "sluggish" efforts may be seen.

Over in the US, while the Non-Farm Payroll performed better than expected, do note that the unemployment rate has increased to 9.9% due to the increase of job seekers. It is important that we always analyze data from both perspectives.

As there is an EU economic summit ongoing, i will definitely think twice about leaving trades open over the weekend. Recently, forex gaps over the weekend seems common.

As we prepare for the close of the week, bullish relief may bring the currency pair to 1.2720/1.2800.

Further bearish developments may send it down to 1.2645/1.2550.

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Finally weekend is here! I am so tired this week that i can sleep like a koala! I have been waiting for the weekend to do some catching up on L4D2 too. Remember that we are facing tough times in the financial world and hence practice proper money management.

Trade safely and stay tuned for the weekly review :)

EUR/USD Daily Review 7 May 10

EUR/USD Daily Review 6 May 10

Good day everyone.

Today is Thursday and once again we are approaching the end of the week. Hopefully you are green in profit!

Yesterday we noted that the strikes in Greece were getting worst and it even resulted in three deaths. A comment was made that there was a threat that the crisis in Greece might spread to other member states. Furthermore. Portugal might receive a rating cut as Moody’s Investors Service noted that the country was facing challenges to reduce it's budget deficit.



Reviewing the EUR/USD above, the currency pair is facing immerse bearish pressure as it slices through supports with ease.



The S&P 500 bashes through 1160 and is currently around 1150+. This indicates negative sentiments as investors probably withdrew their investments from riskier assets.

Oil is now at $81. As it approaches $80, a drop below that may indicate a stalled recovery as oil can be a clue to the global economy at times.

Gold... GOLD IS CURRENTLY AT $1190+. This suggests that the demand may be strong. Gold is priced in US Dollar and despite a much stronger dollar, it has risen in value. Gold is often an investment of choice when it comes to economic apprehension and hence risk aversion may be strong.

***

While the Euro minimum bid rate remains the same, investors were apparently not pleased with the comments. ECB apparently resists the pressure to take new measures to combat the Euro Zone’s spreading deficit crisis. Trichet mentioned that the ECB felt that Spain and Portugal don’t have the same difficulties as those faced by Greece. European officials should instead increase their measures to cut budget deficits. Investors are worried that the crisis may spread beyond control. Concerns were also noted of the looming strikes and their possible impact on the economy.

Germany is currently in the midst of debate with regards to the aid solution. Investors are worried of any potential hiccups. With more strikes being planned for Greece, the outlook seems bleak.

Among the data releases tomorrow, the main highlight would be Margin call US Non Farm Payroll. Plan your trades well.

Bullish relief may target 1.2800.

Further bearish assaults may test us at 1.2645/550.

Trade Safely.

EUR/USD Daily Review 6 May 10

EUR/USD Daily Review 5 May 10

Good day koalas.

Today is mid week Wednesday. I hope you are green so far. If you are, well done and stay so. If you are red, try to recover but not let emotions rule you.

Yesterday we noted that the strikes in Greece were escalating. Government workers closed schools, hospitals and disrupted flights. Demonstrations were held against further salary cuts and tax increases. These measures were proposed to cut budget deficits. Investors did not like a country with problems and this probably caused much risk aversion. Furthermore, there was growing fear that focus would soon turn to Spain or Portugal. These two countries recently received rating cuts.



The EUR/USD faces major bearish pressure. Only 1 bullish candle can be seen above.



Looking at the S&P 500, sentiments are affected too as the index dropped below 1180 and tested 1160.

Oil is affected too and is currently trading at $83+.

Despite a stronger US Dollar, gold is holding steady at around $1174+. This suggests a strong demand and may be a result of strong risk aversion. Gold is a popular investment when the economy faces uncertainty.

***

The strikes in Greece have escalated into worst conditions. Buildings were on fire and three deaths were reported. Citizens were unhappy that they were made to suffer because of the decisions of the politicians that led them there. The reports of deaths in the protests increased the negative sentiments and resulted in the declines of stocks and bonds. Comments were made that the measures are only meant to save costs but more needs to be done to ensure growth and recovery.

ECB's Weber mentioned that there is a threat that the crisis in Greece may spread to other member states. Moody’s Investors Service is considering a credit rating cut for Portugal as it notes that the country faces challenges to reduce it's budget deficit.

We know that sentiments, especially negative sentiments spread like cancer and extreme caution is recommended. As Germany debates about it's part of the aid package, investors will be monitoring closely. Any setback may cause extreme reactions.

Tomorrow brings us the Euro minimum bid rate among other important news such as the US unemployment claims. Keep a look out for the press conference that comes with the minimum bid rate announcement. Many investors will probably be anticipating this and the possible hints of any development of the current Euro Crisis.

Bullish relief if any may bring us back to 1.2950 /1.3000.

Further bearish assaults may see us at 1.2800/1.2720.

***

I worked 15 hours again. While i am very tired, time does seem to pass faster. I have been doing lots of thinking lately. Is my emotional genes strengthening like the US Dollar? Or is age catching up on me like a budget deficit. LoL Either way, i am deeply saddened by the loss of 3 lives in Greece. Life is beautiful. It shouldn't end this way.

Trade safely and live well.

EUR/USD Daily Review 5 May 10

EUR/USD Daily Review 4 May 10

Good day koalas...

I knew making fun of Monday blues will come back at me one day! I had a bad Tuesday. Even better call it Post Monday blues - blues.

Yesterday, we saw gold hitting high levels on probable risk aversion. Although Greece accepted a $145 billion aid package from the International Monetary Fund and its Euro Zone partners over the weekend, investors were careful and they feared of potential complications. This aid solution needed the buy-in of a number of Euro countries and it was not known if any objection might arise. Worries of further strikes in Greece or the debt problem spreading to other countries added to the negative sentiments.



The EUR/USD sliced through the support line of 1.3090. ( It did stop it momentarily but the bearish pressure was too strong )



The S&P 500 suffers a break down too and is currently below 1180. Should it stay below, we may be seeing strong negative sentiments.

Oil retreats back to $86+.

Gold is pressured by the strong US Dollar but is still trading around $1170+. Boosted by demand probably due to risk aversion.

***

The strikes in Greece are escalating. It was reported that Greek government workers closed schools, hospitals and disrupted flights. Demonstrations were held at Acropolis. This is against the further wage cuts and tax increases consequent of the measures to cut budget deficits. A general strike is reported to be planned for tomorrow. Investors do not like a troubled country and this probably caused much risk aversion. The Greek government is sandwiched between the need to implement deficit cutting measures and the unhappy citizens.

There is growing fear that the media will soon turn their attentions to Spain or Portugal now that the Greek Deficit Crisis is "old news." These two countries recently received rating cuts. Speculations of Spain requiring a bailout were heard and these were promptly dismissed by the Spanish PM.

Calls by the German Chancellor's coalition to allow the “orderly” default of the European Union member states probably caused more negative sentiments too as investors speculate if there are troubles on the horizon.

Tomorrow brings us important data such as the US ADP Non-Farm Employment Change. The unemployment crisis in the US is far from over and hence watch out for unexpected developments. Eurozone releases it's retail sales figure too and investors usually see this as an indicator of the consumer economic health.

Bullish relief may bring us to 1.3090/1.3200.

Bearish devastation may target 1.3000/1.2950.

***

OK back to my grumblings. I had lots of nonsense today! Bad work, Bad luck, Bad PC, Bad gastric.. do we need more already? How can i make life better without resorting to challenging self positivity talks ..." Bad is good. Bad is good. Bad is good." Yes it doesn't work. DUH.

Trade Safely and don't make it a Bad trade.

P/S something good after all. I improved on the Forex Education section. Now i group articles together in classes. Yay! Check out the Koala's Learn Forex Trading Training College

EUR/USD Daily Review 4 May 10

EUR/USD Daily Review 3 May 10

Hello Blue Koalas!

Before we began, being blue doesn't mean you stop helping! I have just launched a new contest for the MOST HELPFUL ACTIVE FOREX KOALA! Check it out and be merry :)

Ok. We closed off last week on a ... now wait. Where is Friday's EUR/USD Daily Review? Oh right.. if you have not being following, after working for some 15 hours in the day on Thursday and followed by more on Friday, i fell asleep on my keyboard when i was about to begin my research for the day. Koalas do need their sleep! Sincere apologies.



Ok. The EUR/USD is suffering from the Monday Blues and is currently struggling with the 1.3200 line. This totally erased Friday's bullish gain.



The S&P 500 is climbing, moving away from 1180. As i highlighted in the chart above, the American economy is no island of it's own and is affected by the Greek Deficit Crisis apparently. However it remains resilient as the 1180 support still holds.

Oil is currently at $88, probably affected by the concerns of the oil spill crisis

Gold... Gold is HIGH! Currently trading at $1180+, this suggests strong demand. As gold is usually an investment of choice when it comes to economic uncertainty, investors may be concerned.

***

Greece accepted a $145 billion aid package from the International Monetary Fund and its Euro Zone partners over the weekend. This plan is supported by the ECB and in return, Greece promised to bring about a cut of 30 billion euros in the budget and to bring a deficit of 13.6 percent of gross domestic product to within the European Union limit of 3 percent in 2014. To further extend it's support, the ECB announced that it would indefinitely accept the country’s debt as collateral no matter what credit rating is assigned to Greece.

While this seems to be positive news for the Greek Deficit Crisis, investors are wary and they fear of potential complications. This aid solution requires the buy-in of a number of Euro countries and it is unknown whether any objection may arise. Another concern at the top of the list is the worry that the problem may spread to other countries such as Spain and Portugal. Both received credit rating cuts recently. The length of time taken to craft and deliver the aid package for Greece leaves many wondering on the response if other Euro nations fall into need too. Many traders also fear of more strikes complicating the matter and the ability of Greece to cut the budget deficit to 3% by 2014. Risk aversion lurks.

Tomorrow brings us a few highlights that may be important. German Retail Sales and US Pending Home Sales are among those.

Bullish relief may see 1.3200/85.

Further bearish sell off may test the region of 1.3090/1.3000.

***

Something came into my mind today and i thought i'll share with you. I was wondering if there is anyone who doesn't love attention? Looking at all the attention seekers around, sometimes i may even be one of those LOL. Is the desire for attention inbuilt into our DNAs? Have you seen anyone who really doesn't fancy any attention at all? HmmmmMmmmMmMmm..

OK! Enough of your attention :P :P :P

Trade safely and i'll see you soon. ( Remember to check out that contest ! )

EUR/USD Daily Review 3 May 10

Masoud : EUR/USD Review 2 May 10

Hello Koala King and folks.

Good day to you!

The U.S. Treasury sold 1.5 billion shares of Citi as part of it's exit plan from the extraordinary measures taken during the height of the financial crisis. Such exit moves taken by the U.S. government in principle could be an indication of promising economic prosperity and may provide faster recovery. This may urge the stock markets to go up but however in the long run, may result in a reduction of the US Dollar's value. Having said so, watch out for short term bullish run of the US Dollar because of increased interest rates of the US.

Moving on the same subject, on Wednesday an important meeting for the Federal Reserve with regards to interest rates concluded. The Fed statement indicated that the policy of keeping low interest rates will be continued and has not changed. The Federal Reserve estimated that the economic growth and labor market in total was positive,and this along with the continuance of the low interest rate caused the stock market to climb while the US dollar is weaken.

There were concerns based on the speculation that the central bank support package that Europe came up with may not be able to prevent the budget deficit of Greece and the Euro value dropped. Ms. Angela Merkel in connection with the financial aid to Greece, did an interesting talk mentioning that Greece must first give its promise to take tough measures in order to get help from Germany. We must remember that even if financial aid is given to Greece, there must still be a careful and rigorous program in relation to reducing the deficit to solve the root cause of the crisis. This complication of the issue keeps even the experts unclear.

One of the important developments were the strikes in Greece and the other credit rating cuts of Greece, Spain and Portugal that begun on Tuesday night. This created a severe risk aversion and the stock market and the Euro fell. Safe assets such as gold were in demand. In a meeting together with Mr Trichet, Mr Kahn IMF managing director and German authorities on increasing aid to Greece. The possibility of the Euro still further decreasing should be expected. The Greek crisis was said to have spread to Spain and Portugal and it increased risk aversion and the demand of safe haven currencies like yen and the dollar.

The U.S. labor market is apparently improving with the economic recovery. The market still remains fragile and is hence one of the reason of a low interest rate.

While most of all economist and financial institutions estimate economic growth and rising inflation, bear in mind that the reduction of the financial markets in Greece remains a risk. I think in 2011, there may be strong growth in interest rates. Inflation will reach very high levels which causes severe growth of the stock indexes. However in the short term I think the fact that markets continue to be affected by the Greece crisis and the Euro will continue to fall. Interesting that the situation in Greece is so critical that the S&P rating falls to “Junk”.



From a technical point of view as the above picture, the EUR/USD in daily time frame is in a downward channel located in the channel where the price floor did look to the RSI and Stochastic.

Have a great weekend.

Masoud.

Masoud is a businessman and a Senior Koala. Connect with him at our page on Facebook.

Masoud : EUR/USD Review 2 May 10

The Koala System Forex Review 26 Apr - 30 Apr 10

Good day users of The Koala System.

I hope your weekend is wonderful so far.

In the last review, price action was slow and weak at first and The Koala System fulfilled it's duty by showing signs of no trading. ( Flipping koalas and price cutting through the koalas ) Price action did eventually pick up and concerned about having unsustainable borrowing costs, Greece requested for a bail out near the end of the week. Sentiments improved. A total of 2 risky opportunities and 2 standard opportunities were presented.



The week brought us choppy price actions. With the Greece deficit crisis on the main stage, investors were apprehensive and concerned. Choppy conditions are not optimal for The Koala System. The system is mainly a guide to trade with the trend. Choppy conditions are not trending conditions.

In the first part of the week, two risky opportunities were observed. Once again i do not encourage excessive risky during trading and you should only think of attempting so when you have proper money management. Towards the late second day, continued concerns on Germany's apparent reluctance to partake in the aid solution brought the Euro down. Along so, a standard opportunity was available for harvest. After which, the currency pair slipped back into choppy conditions.

In the later part of the week, sentiments slowly improved and the EUR/USD rose and hovered around the 200EMA. Early Friday, a standard opportunity presented itself. After which the currency pair went back into choppy conditions before closing for the week.

Many folks have been writing to me that having a lower take profit level may help. For example 30pips. While this may be true, we have to adjust our take profit and stop loss ratio too to maintain a practical ratio. I am looking into this myself and i welcome your feedback in the forums.

Do read the latest EUR/USD Weekly Review for a heads up.

Trade safely and remember making money in forex is never easy!

The Koala System Forex Review 26 Apr - 30 Apr 10

EUR/USD Weekly Review 26 Apr - 30 Apr 10

Good day Koalas!

I hope you are enjoying your weekends so far. My week was so tiring that all i can think of is to have a GOOD rest. Heh.

In the last EUR/USD Weekly Review, we saw the week starting on a bearish note. Apprehension about the Euro Zone and in particular the Greek deficit crisis remained strong and investors were probably seeking their fortunes elsewhere.
Near the end of the week, Moody’s downgraded the ratings of Greece and mentioned that the outlook is negative. This caused a major outflow of investments from the European region. The budget deficit estimate of Greece was revised from 12.7% to 13.6%. Worst than expected. The EUR/USD slipped to as low as the 1.32 region due to risk aversion. A bail out was requested. In the meanwhile, the US economy remained rather resilient. Gold had risen considerably too and this might be due to increased demand. Gold is usually an investment of choice when the economic outlook is uncertain and we might be seeing investors seeking shelter in the precious metal.



The EUR/USD tested the region below 1.3200 before climbing to 1.3300+ for the weekends.

The start of the week began with a small gap down after the G20 meetings over the weekend. Dont let a forex gap ruin your trades and hence understand the risk about it. Read the article on forex gaps. Although the bail out was requested, there were concerns that Germany might not release the funds yet as the German Chancellor mentioned that she won’t release Greek aids funds until the country displays a “sustainable, credible” plan to reduce the budget deficit and a final decision might be in a “few days.” The condition that Greece takes “tough” measures for the next several years was mentioned but Greece's citizens were already unhappy that they were made to bear the consequences of a poor financial policy and hence more strikes might happen.

As the week continued on, further EUR/USD weakness was seen. A report stated that credit-default swaps on European sovereign debt rose to records levels due to concerns that Greece’s deficit woes was starting to affect the borrowing ability of nations in a similar plight throughout the European region. Portugal and Spain might be at risk of being affected. This brought speculations of a a massive crisis of the Euro Zone and hence risk aversion was strong. Germany’s reluctance to take part in the aid solution probably caused the market to worry.

Midweek, a report by Standard & Poor's mentioned that holders of Greek bonds may lose as much as 200 billion euros should the government default. Greece's rating was cut three steps to BB+, below the investment grade. S&P believes that the outlook is negative for Greece. Greek bonds experienced a sell off. Portugal was not spared too and received a cut in ratings as well. The IMF Managing Director told German lawmakers that as much as 120 billion euros in aid may be needed instead of 45 billion euros. Investors were probably concerned about how feasible can this aid package be and how the long term needs can be addressed. Questions were raised too with regards to how future crisis in the Euro Zone could be handled.

Towards the end of the week, a report stated that Greek officials would finish talks with the European Union and the International Monetary Fund in the next few days. Investors saw this as a sign of an agreement and the big sell of in the bond market was stopped. Continued optimism of a looming agreement caused the risk appetite to improve and the currency pair recovered from it's low for the week.

***

The Greek Finance Minister mentioned that Greece faces a “unprecedented” budget cuts as the European region and International Monetary Fund approach the approval of a 120 billion-euro aid bailout for the debt- laden nation. This may provide relief as investors worry of an approaching bond redemption. The government is wrapping up discussions with the IMF and EU on conditions for the three-year loans. European finance ministers are scheduled to meet tomorrow to confirm their share of the aid package to stop the biggest financial crisis in the Euro’s history. Either unexpected outcome may cause a shift in sentiments and result in a forex gap. One must not forget that while most brokers are closed for the weekend, global developments continue.

While an agreement may improve the situation, concerns remain with regards to the Greece citizens. The citizens are unhappy with the budget cuts and do not wish to be responsible for a poor financial policy of the government. If further strikes happen, the already fragile economy of Greece may deteriorate more. From the recent performance of the EURO, it seems that the market is very concerned. We may see knee jerk reactions to the downside at the slightest news hence do be careful and plan your trades well.

A recent report stated that China manufacturing grew at a faster pace in April, exposing overheating risks in the world’s fastest-growing major economy. Should the Chinese authorities move in to curb speculative growth, the market may be concerned with a derailment of the recovery. Many investors see China as a major player in the recovery process.

From a technical point of view as mentioned previously, we may have slipped into a lower range. Further weakness of the EURO may bring further test of the 1.3200 line.

Next week brings us a number of crucial data releases including the EURO minimum bid rate and the US Non-Farm Payroll. I always mention that the NFP is a highly risky event. Read the NFP reports to see why. You can find the list of the various economic releases in the Economic Calender below.

Trade safely and remember to plan your trades well.

***

Are we missing an EUR/USD Daily Review? Yes we are. There was no daily review yesterday and i apologize sincerely for it. It is never the koala's way to disappear without informing . When that happens, that means something unexpected happened to the forex koala. Remember the other day i mentioned that i worked 15 hours? The next day i worked until pretty late too. When i sat down to begin my research and catch up for the day, i felt asleep right at my keyboard. LOL Sigh the consequences of crazy work lol.

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Visit our new home on facebook and be a fan.

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Read more about the EUR/USD at my buddies' wonderful blogs.

Forex Crunch writes a weekly EUR/USD outlook. It is a very popular write up and he is one of the best.

Winners Edge Trading with his great technical analysis brings about much knowledge to learn.

EUR/USD Weekly Review 26 Apr - 30 Apr 10