EUR/USD Forex Forecast Reviews | Learn Forex Trading: 27 June 2010

Tuesday, July 6, 2010

EUR/USD Daily Review 6 Jul 10

Good day forex trading koalas.

Second day of the week and i hope everyone is moving on green.

Yesterday, we saw the US bank holiday bring in low volume trading. The market was so silent that you can hear a pin drop! An interesting point to note is that while the Euro Zone posted good data, the EUR/USD took no notice of it. I mentioned that the rules of the game now is rather one of who is worst off and hence it only matters when something adverse pops up!

After climbing into the 1.24 range, the EUR/USD faces resistance at 1.2645.

To folks who are new, you are in for a treat. For folks who are with me a long time, you know you want it.

I LOVE IT WHEN MY CHARTS WORK !!!!!!!!!!!!!! MONEY MONEY MONEY.

ok thanks for letting me vent all the hidden steam.

The S&P 500 is rather positive today but we must remember that we are far below from the heights of 1200+ A few months ago. This suggest that sentiments remain weak.

Oil is around $73+.

Gold is just below $1200.

***

So who gave the EUR/USD a pair of nike air?

Probably the poorer than expected US ISM Non Manufacturing PMI. I mentioned yesterday that if this data falls short of expectation, we may see a further sell off of the US Dollar and it indeed so it was. Weeks ago, everyone was talking about the apparent great recovery of the US. When the housing tax credits and the temporary census employment ended, mounting negative data began pouring out and now investors are apprehensive towards the US.

Whether if the current Euro bull run will continue for long remains a question. Investors are worried that the stress test of the European banks may highlight more risk but fail to address it properly. There are no concrete plans on the action steps should the test discover critical issues.

A renowned foreign-exchange forecaster mentioned that the Euro may fall to almost parity in 2011 before recovering. Sentiments echoed by others are that the recent strength is due to short covering rather than a change in momentum.

Data release for tomorrow includes the German Factory Orders.

Bullish momentum may continue to 1.2720 while a bearish attack may see 1.2550.

***

I slept only 4 hours yesterday and my eyes are burning !!! If you pity this poor koala, simply share to more people about the site.

My greatest satisfaction comes from the thought that i probably helped someone avoid a margin call :)

Trade safely.

Related Forex Articles from the Koala Forex Training College.

EUR/USD Daily Review 5 Jul 10

Good day forex trading koalas.

I hope you had a great weekend!

Today is Monday but i am not blue.

No blues to be seen in the EUR/USD for now too.

The US is closed for a bank holiday today and this is reflected in a classic low volume trading pattern as seen above.

One point i will like to touch on is the better than expected Euro Retail Sales today. It hardly caused any movement in favor of the Euro. This suggests that the recent upwards momentum may indeed be the theory we explored that the market is simply going in favor of the zone that is not as weak instead of the zone that is more outstanding. If this indeed turns out to be true, we may see the US Dollar strengthening again as soon as the poor data flowing out of the US stops.

Tomorrow brings us the US ISM Non-Manufacturing PMI. This is a popular leading indicator of economic health and hence may spark some momentum. Please remember to practice proper money management.

Any bullish momentum may test 1.2600 while bearish attacks may see 1.25/1.2440/1.24. Please be reminded though that support and resistance lines are never a single pip!

***

Why am i not blue? This is because i am toooooooooooooooooooo busy at my crazy work to even be blue. Serious! However i am very concerned about my own health. I have still not feeling 100% since the problems began 3 weeks ago.

If i can only make my ends meet via farming, that will be great! Maybe i should start practicing on farmville facebook. LOL

Related Forex Articles from the Koala Forex Training College.

Sunday, July 4, 2010

Masoud : EUR/USD Review 4 Jul 10

Hello Koala King and folks.

Good day to you!

This week marks the first week of the second half of 2010. So it is suitable timing to take a look at the developments in world markets.

Starting of the third quarter, economic concerns of Europe due to the effects of the debt crisis and the affecting of the various economic sectors in these countries, will continue especially when this crisis is apparently spreading to more and more countries such as Spain, Italy, Ireland and Portugal. The sentiments with regards to Europe may become a dark landscape. This prospect is likely to start a second round of economic recession in the later months of the year. Some economic experts, including George Soros and Rubin believes that the possibility of the emergence of this phenomenon in Europe has already appeared in the economy.

What is good is the increasing attention paid by the European countries in terms of the dimensions of the debt crisis and the actions taken to minimize damage. However, a lot of time is needed for a exit from the economic crisis and even if this process does not lead to recession, economic growth will probably be severely reduced.

Interbank rate for the European Union (Euribor) rose and is currently at the highest level since October 2009, and it is likely to have more upside push. This is stated to be one of the main potential causes of the fall of the Euro. Factors affecting the price of Euro, beyond the economic indicators are more issues, including debt securities market. Brief understanding about the bonds market can also show much more clearer picture of the nature of the recent moves of the Euro. Price changes and yield of the bonds have a severe effect on financial markets. Higher yield of Europe financing bonds means high costs to many European governments.

Hence in the next six months we may expect continued decline in the Euro and the move toward new records. Some analysts predict the currency pair to drop to 1.12 EUR/USD by the end of the year. In fact Fitch has announced that European countries are likely to have a double dip recession.

The Euro situation currently is such that the performance of the indexes of other regions may not affect much on a positive side but can have much affect when it comes to adverse news. The most important factor for the upside on the Euro now is to reduce debt crisis concerns in Europe. Everything else probably comes next. So a good strategy may be that if the Euro rose in Europe session, we may expect it to decline again in the next session if negative news of Asia and American pops up. The strategy in the previous weeks was of rather low risk and in the coming weeks will be probably profitable. Usually the effects of positive news session in Europe have not much strength and will start selling again.

In May, American bad data such as NFP causes a buy impact on the US dollar but based on the motion on Thursday and Friday, we should not rush to judge. Continued risk aversion are likely to be buying dollars again and we can say that these figures will intensify concerns and may be indicators of the opportunity to sell stocks, buy yen and buy US dollars.

From a technical point of view, while the trend line in the Daily (more than seven months continues) is not broken and the price level of 1.27 is not closed, the main trend is descending. Currently, S&P broke the nine months low and broke the neck line of head and shoulder pattern in the daily that I shown to you last week.

Have a great weekend.

Masoud.

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

If you are on Facebook, i urge you to join TheGeekKnows.com page. Discussions on forex opinions and trades can be found there.

Related Forex Articles from the Koala Forex Training College.

The Koala System Forex Review 28 Jun - 2 Jul 10

Good day fellow Koala System users.

Yes i took a one week break for the system review.

Basically i was examining two factors.

1) The best use of the system

2) The best time frame for the system.

-1-

As far as the best use is concerned, scaling is definitely out. This system is primarily a slow trend system. Best suited for intra-day traders ( 15 minutes ) and intra-week traders ( 30 minutes ).

-2-

The best time frame is a tricky one. Besides the need to suit the above styles discussed, different market conditions calls for different time frames. With the recent spikiness of the market, a lower 15 minutes works better. A 30 minutes approach will result in no trade zone for most of the week.

While we continue to explore the best ways to do so, remember that patience and proper money management is a must!

Looking at the EUR/USD 15 minutes chart for the week, we can see that The Koala System brought us 3 opportunities.

While the currency pair did begin bearish for the first half of the week, the first suitable opportunity only came in the second day when the pair is below the 200 EMA. The Koala System is not a risky trading style and hence we must wait often.

The midweek is mainly spiking but we managed to identify one quick opportunity.

The last opportunity was a potential winner if you used a proper trailing stop. The strong upwards momentum carried the currency pair up from the lows. This is due to the poor US data coming out of the country.

A user suggested the use of a 50 EMA and till now i do find some usefulness of it. Thank you buddy you know who you are. Expect this to be featured in the next review :)

For folks just joining us, you can view The Koala System rules here.

Trade safely.

US Non-Farm Payroll Review 2 Jul 10

Good day forex trading koalas.

Welcome to another US Non-Farm Payroll report.

In the previous review, we noted that two hours prior to the release of data, the currency pair was already dropping. Regardless if it was because of the G20 meetings happening on that day or if any NFP data was "leaked", the drop was intensive and this is why i include two hours before the NFP and the four hours after in my reports.

While it remained an increase, we must remember that this contains the figures from the temporary employment of census workers by the government.

Let us now take a look at the Jul 10 US NFP.

Once again, two hours before the report was released, the currency pair was already moving upwards. This continued a momentum since mid week as the continued poor data from the US drove investors away.

The NFP turned out worst than expected, marking a loss of jobs. The "boost" by the temporary census workers is waning off ". This definitely spooked the investors and everyone was risk averse. Having said so, where was the risk aversion then? As i said earlier, this continued a momentum that the US recovery is faltering and hence a poor NFP confirmed this further and investors in their knee jerk reactions definitely rushed to sell their US Dollar faster than you can say " What the *** ??"

The low and high of the NFP was almost 100 pips and this flip flop could have threatened any margin calls excessively risked.

While the unemployment rate dropped to 9.5% due to the shrinking labor force, this percentage remains high and will definitely remain a drag to the US economy. Towards the end of the day, the currency pair eased towards the pre NFP levels after the initial knee jerk reactions wore off.

Trading during the NFP is probably not a wise choice.

Trade safely.

Related Forex Articles from the Koala Forex Training College.

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Available in both Standard and Micro lot sizes, read about it for yourself and make your own decisions. What matters most is that it works for YOU.

Saturday, July 3, 2010

EUR/USD Weekly Review 28 Jun - 2 Jul 10

Good day forex trading koalas!

The weekend is here and it is time to take a look at our forex performance.

Once again i apologize. I was under medication on Friday and was taken down at the keyboard again. Sigh. How i wish i am a healthier koala.

In the last review, we noted a forex gap. China brought positivity by indicating that it will relax the yuan's fixed rate to the US dollar. However we need to consider that this was just a mention and concrete actions remains to be seen. Should expectations be disappointed, we may see a return of risk aversion.

The German Ifo Business Climate and the US Existing Home Sales came out worst than expected and created a further blow to the sentiments. Later, Germany, France and UK were reported to be jointly pushing for a charge of levies on banks' balance sheets so as to ensure a fair contribution by banks to reflect the risk they pose to the financial system. The G20 however remains inconclusive. While the US Treasury Secretary said that the credit market is getting better, the expiration of the tax credit for home sales were causing poor home sales to surface and risk aversion was seen.

Spain faces massive debt redemption next month and the US Federal Reserve commented that the European crisis may affect the American economy.

Looking at the EUR/USD chart above, we can see a massive bullish momentum towards the end of the week.

The start of the week marks the concluded G20 meetings with no concrete conclusions. Although the countries agreed on the need to tighten up the financial processes, concrete agreement remains elusive. Observing various correlations, a report mentioned that it is apparent that the markets are reacting nowadays mainly based on emotional events rather than fundamental points. This makes trading tricky and unpredictable, something we see with the numerous spikes. A report warned that states in the US are facing a budget crisis. Spending needs to be cut back and revenues increased. This is an important crisis to monitor.

Moving to mid week. a general strike happened in Greece and it was the fifth one for the year. Over 9000 protesters marched and state services were disrupted. It is without doubt that investors do not like sovereign issues and this put out with fire with regards to any risk appetite. Greece cannot afford such issues with the weak economy. Investors will probably pull out of the country and further weaker the economy. In the US, the CB Consumer Confidence turned out worst than expected. This data is often taken as a leading indicator of consumer economy and hence risk aversion was on. The "strong" recovery of the US is apparently not so. Housing and employment weakness continue to plague the market and the deficit of the US is increasing.

Towards the end of the week, the sentiments changed.

As the US continues to release poor economy data. Such as the worst than expected unemployment claims and pending home sales, investors began to shift their funds away from the US. This is compared to the successful Spanish bond sales a vast difference. While equities dropped due to the poor data, the Euro gained in value as investors jumped ship. The worst than expected US Non-Farm Payroll magnified this momentum.

***

The poor US NFP brought about much revelations with regards to the recovery. Economists stated that the continued weak employment sector will function as a drag. With a high unemployment rate, consumer spending will be affected and the long chain of effects will go on. Consumer spending is rated at about 70% of the US economy.

Not to be outdone, the ECB mentioned that the recovery of the Euro Zone from the debt crisis is progressing and measures are being planned to prevent a similar crisis from happening again. Having said so, i mentioned many times that this is beyond a simple fix and we must stand ready for further complications. Greece is facing strikes while Spain, a massive debt redemption. Furthermore, a report came out that the European Union unemployment rate is at 10%. This will cause the domestic demand to be weak thus affecting internal economic growth.

Once again, we see weakness in both zones and sentiment victory will go to the zone which is less weak.

Monday is a bank holiday for the US. Among the important economy data releases in the coming week includes the US ISM Non-Manufacturing PMI and the European Minimum Bid Rate. You can find the list of the other various economic releases in the Economic Calender below.

From a technical point of view, 1.26 is a strong line and it definitely takes more than random sentiments to push beyond. If successful, it will open up 1.28.

If you are on Facebook, i urge you to join TheGeekKnows.com page. Discussions on forex opinions and trades can be found there with over 450 fans :)

Trade Safely.

Related Forex Articles from the Koala Forex Training College.

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

Friday, July 2, 2010

EUR/USD Daily Review 1 Jul 10

Good day forex trading koalas.

I know these days i seem to be missing reviews here and there but trust me, it is not that i can help it! Falling asleep while typing or having a fever like yesterday. ARGH!

MUCH APOLOGIES !

On Tuesday, we saw the EUR/USD going down due to risk aversion. Strikes in Greece, poor US data, etc.

Looking at the EUR/USD now, we are definitely seeing a different story.

The S&P 500 is suffering at 1027, a major hit to sentiments probably.

Oil is lower at $72. As oil can be a clue to the global economy's health, $70 will be an important line to note.

Gold in the meanwhile drops to $1207+. As gold is usually a good indication of risk aversion, this is interesting to note.

***

And yes, today's price movement is probably not risk aversion but rather a drop in the sentiments towards the US.

US continues to print poor economy data. Unemployment claims rose and pending home sales clocked a shocking -30% !! Seems like the end of the tax credit is taking it's toll. Investors are definitely dismayed and hence funds flow away from the US Dollar faster than you can say " bye bye !"

Ok i am exaggerating but you get my point.

On the contrary, Euro Zone is getting a boost from a successful Spanish bond sales. This gave investors more confidence that the Euro Zone Crisis is under control and hence resulted in a pull factor in the EUR/USD.

Tomorrow is an important data day, including the MARGIN CALL FRIDAY EVENT!!! Yes. US Non-Farm Payroll. Judging how fickle the market is these days, plan your trades well and before of spikes.

Bullish momentum may see 1.25/1.255. A bearish return may see 1.244/1.240

***

I have been sick since 2 weeks ago and i really want to get better. Since i do not have the luxury to sleep, what else can be done? It is a vicious cycle. In the event that i unfortunately cannot do a review again, my dear readers do take the time to explore the site. I took great pains to produce the articles in the Koala Forex College so as to help as many as possible. Check them out!

Trade Safely.

Related Forex Articles from the Koala Forex Training College.