Masoud : EUR/USD Review 06 Oct 10

Hello Koala king and folk.

Good day to you.

Yesterday we witnessed a strong uptrend in the euro where that this time the euro and gold work in conjunction of a stunning growth showed. Yesterday the euro reached 1.3850, which was an important resistance and a bit of Euro strength was stopped. However today broke 1.3850 and 1.3880 was hit.

As 1.3850 to 1.3880 is one of the strongest support and resistance region many traders begin to identify their own profit and exit from long positions that caused the fall of the euro.

On the other hand, Goldman Sachs analysts in a Bloomberg article commented that the outlook for the US economy over the next 6-9 months may be negative and it may be “fairly bad” or “very bad”.

In the first case, American economic growth rate will be equal to 1.5-2% through the middle of 2011, while the unemployment rate would moderately advance to 10%. The second variant associated with 25-30% probability implies that the United States will once again slide to the severe recession.

With regards to the economic stimulant package of the US, differences exist between the republicans and democrats. With the recent resignation of key members of Mr Obama's economic team, there may be more complications brewing.

News from Japan also reported today that Japan summit G7 (8 October) no other intervention plan.

Towards the end of week, we have very important news, most notably is the NFP on Friday. Today and tomorrow be very careful of market volatility because many traders before the NFP may begin exiting their positions and may create extreme market movements.





From a technical point of view, euro in H1 is an ascending channel and until the euro is no longer in the ascending channel, just buy the floors as proposed. Do note the price retracement from Fibo 61% in the 1.3880-90. (above Picture).

Trade with open eyes and without feeling.

Have a nice time.

Masoud.

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

Related Forex Articles from the Koala Forex Training College.

• US Non-Farm Payroll Review Sep 2010
• Support and resistance lines are never a single pip

Masoud : EUR/USD Review 06 Oct 10

EUR/USD Daily Review 5 Oct 10

Good day forex trading koalas.

It is Tuesday and i hope everyone is doing fine.

Yesterday we noted better than expected housing economic data from the US. Having said so, it was cautioned that foreclosures and dropping prices still plague the housing market.

China expressed support for a stable euro and even mentioned about it's willingness to purchase more Greek bonds when possible.





Looking at the EUR/USD chart above, the strong line of 1.38 is broken for now. Do note that support and resistance lines are never a single pip and hence do not hastily take this as the ticket for the bullet train north!

The S&P 500 is above 1150 for now and suggests positive sentiments.

Oil is still above $80 and gold climbs higher to $1330+.

***

The US ISM Non-Manufacturing PMI came out better than expected. This probably brought some relieve to the risk averse investors. Furthermore, with China's words of support for the euro, investors are probably increasing their risk appetite and withdrawing from typical risk aversion instruments like the US Dollar for higher yielding instruments such as equities.

Having said so, we have many major economic events this week such as the Euro Minimum Bid Rate and Margin Call US Non-Farm Payroll and the markets usually do not move too wide when such events are around unless of course adverse developments occur.

Get a feel of the market pulse and use the equities and commodities as clue.

Trade Safely.

***

I am getting fatter and fatter! Being a weak koala, having extra kilos will probably make things worst. I heard that a lack of sleep will make one fat and a lack of sleep is something i have aplenty!

Oh dear . . .

***

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• What is risk aversion
• Support and Resistance lines are never a single pip

EUR/USD Daily Review 5 Oct 10

EUR/USD Daily Review 4 Oct 10

Good Monday forex trading koalas!

Are you blue today? I hope not. Who heard of a blue koala before anyway?

Yes week we ended on a bullish note, testing the 1.38 region. While gold and commodities suggest that the recovery is picking up, we understood that caution was to be exercised. Sentiments can be quite a flirt at times and we definitely do not want to be on the wrong side when the flip happens.




Looking at the EUR/USD chart above, the strong line of 1.38 held it's ground for now. The currency pair has since eased off and is now testing the line of 1.3680.

The S&P 500 hangs around the 1140+ region.

Oil remains above $80 for now and gold is still elevated above $1300. As gold normally benefits from demand during times of uncertainty, one must consider the real nature of this price boom.

***

The US pending home sales came out much better than expected and we are probably seeing some take up of the US Dollar for now. As the US housing market is a sensitive issue for now, investors may tend to react emotionally. After all, foreclosures are still happening and the property prices are dulled.

The Chinese premier mentioned that China supports a stable euro. European bonds holdings would not be reduced and in fact China plans to buy Greek bonds once available. While this is a good boost for the euro, it has yet to be translated on the charts. This is the beauty of forex. A seemingly euro positive development having no effect due to the market focus on other issues.

Fed chairman Bernanke is due to speak later and hence be careful of unexpected spikes. Tomorrow economic menu brings us important data such as the Euro Retail Sales and US ISM Non-Manufacturing PMI.

Trade Safely.

***

I clocked less then 6 hours of sleep last night and now i am suffering from the effects. I see sleep as a hindrance to my productivity and how i wish humans do not need sleep. LOL

***

Related Forex Articles from the Koala Forex Training College.

• Gold is a popular investment during times of uncertainty
• Housing activity is a stimulant for the economy
  

EUR/USD Daily Review 4 Oct 10

Masoud : EUR/USD Review 03 Oct 10

Hello Koala King and folks.

Good day to you!

The week was turbulent and pressure was on the upside. At the beginning of the week concerns surfaced regarding the possibility of the bank of Ireland stopping the Euro climb. Furthermore a paper published in the Wall Street Journal wrote, the Fed expanded economic stimulus programs which bought state assets in the "panic" will now focus on more meaningful purchases. However the market seems to have ignored this and the US Dollar continues to lose it's value.

Usually US Dollars will be weaken in the third quarter due to the reduced demand of export for America. Furthermore US Dollar purchases and budget plannings will be made and delivery will occur when the US Dollar is higher. All in all, a critical devaluation of the US Dollar will be detrimental to America and hence world financial mechanisms will not allow that to happen causing a concrete support that will not break easily.

Ireland's economic problems are increasing and the increase in yields of the government bonds is evident. Markets fully understand that the amount of bond yield spreads have reached levels reminiscent of the Greek state, a month before the economic crisis started and the situation was completely out of control, prompting economic aid from IMF and Europe Union to began. The interesting point is at that time, Ireland was the first country to impose economic austerity programs but now remains strangled by economic chaos including problems in the banking sector.

Note that until Tuesday this week where Fed minutes are released, the market will probably not purchase any US Dollars.

As September and the third quarter ends, we had a turbulent quarter. September was a good month for the US stock market and total market growth in the third quarter was about 10.5% an expected result.

The 10-year rate of return on bonds 2.5 percent is in the critical level fluctuation, and indicate that attention is still subject to decisions of the Federal Fund Committee. I personally believe that liquidity, bank deposits or extending credit, or buying property, especially toxic , is completely ruled out.

Following reasons:

1 - retaliation bill with China, and the vast support of President Obama's small enterprises.

2 - Chicago Index indicates the industry to strengthen the situation in the region. While the falling unemployment rate shows very little, industrial orders are growing. However, reports suggest that indicators of household consumption and cost suggest a reducing number of unemployment benefit claimants and we may predict a positive outlook.

3 - According to statistics, corporate profitability in the second quarter was better than market expectations. This vision gives us that America's economy in the industrial and service areas seems better than expected.

Of course we're entering the fourth quarter and further improvement of conditions is required until November for a positive reaction from the Feds.

Europe Union's projected use of 200 billion euros was apparently up to 146 billion unused and this sign indicates stability. However one of my economist friend mentioned that the third week of October may be a Black Euros Week. Be very careful.

An Institute announced that the EUR/USD may hit 1.5. The institute had said that hedge funds and institutional clients as well as central banks in South America and Asia are working in high volume to buy euros and sell US Dollars.





From a technical point of view as in the picture above you can see, the euro top ascending channel has reached the ceiling, and there may likely be a retracement. Two scenarios can exist:

Scenario One: Probably retracement, so there is the middle Channel and then continued upside.

Second scenario: If Fibo 50% is broken and the price goes below the channel middle line, downside movement may continue to the channel floor.

Have a great weekend.

Masoud.

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

Related Forex Articles from the Koala Forex Training College.

• S&P 500 and the EUR/USD
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Masoud : EUR/USD Review 03 Oct 10

EUR/USD Weekly Review 27 Sep - 1 Oct 10

Good day forex trading koalas!

The weekend is here again and now is the time to rest and prepare for the new week.

In the last review, we saw the EUR/USD approaching the line of 1.36. The idea of more quantitative easing to be done in the US probably sent the US Dollar fans packing. It is probably without doubt that the US economy is fragile and the future uncertain.



Looking at the EUR/USD Daily chart above, we see a strong bullish momentum. The currency pair broke through the resistance of 1.36 and heads towards the 1.38 line. With the 200 EMA below the currency pair, technically the EUR/USD should be more heading towards more bullish momentum. However do be careful as sentiments are often fickle.

Many readers often ask me, why is the EUR/USD so fickle? One moment the US dollar gets the popular support and next, investors shun away from it. While no one has a definite answer to this, it is my opinion that the reason is probably because both economies are fragile and hence no clear investment direction is presented.

US continues to increase it's debt and a number of experts believe that the US may be passed the point of no return. ( Eventual default ) Furthermore, the unemployment crisis continues to act as an anchor to the recovery, dampening spending. Foreclosures continue to happen and the housing market seems to be rather slow. As housing activities stimulates the economic, an absence of it may not be good.

The Euro Zone faces it's own set of economic challenges. Being made up of different states, much compromise must be done for the good of all. The weaker states probably act as an anchor too, making accelerated recovery a challenge.

Watch out for the 1.38 line. If it is taken down, we may see further bullish pressure upside.

Next week brings us a number of important economic data including the US Pending Home Sales. Furthermore, Non-Farm Payroll is due on Friday and hence plan your trades well. You can find the list of the various economic releases in the Economic Calender below.

Related Forex Articles from the Koala Forex Training College.

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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.

EUR/USD Weekly Review 27 Sep - 1 Oct 10

Investing Requires Commitment, But Guided Execution is Today’s Mantra

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Investing Requires Commitment, But Guided Execution is Today’s Mantra

EUR/USD Daily Review 1 Oct 10

Good day forex koalas!

Today is OCT 1. The last quarter of the year. We all know how this period can be crazy and hence hang on tight to your trees!

While we get generally positive news from both the US and Euro Zone economies yesterday, we noted the markets showing us mixed signals. Gold was still on an elevated high while oil was rising too. Either the investors were split in their opinions or no one had any idea on whats happening! LOL





Looking at the EUR/USD chart above, we can see a bullish trend in action.

The S&P 500 is on the upside move again and is nearing 1150. Sentiments seem to be holding.

Gold remains elevated at $1300+ while oil crosses $80.

***

The current figures SUGGEST a possibility. The recovery is strengthening and equities and commodities are rallying.

Now if you have been a reader of TheGeekKnows.com, you would have seen the many times i had cautioned on the weakness of this "recovery" The US continues to incur more debt and the Euro Zone struggles with the economic anchors of the weaker states.

So what is happening? Extreme unrealistic positivity, the calm before the storm, trading based on a flip of the coin? Nobody knows. However what is clear is that this is very probably not the expressway to recovery. Do not be tricked and get caught on the wrong side of the sentiments when it flips.

Trade Safely.

***

My dad went for a check up today as he is having pain in his stomach for sometime now. Old age catches up on all of us. I hope he is ok.

***

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EUR/USD Daily Review 1 Oct 10