EUR/USD Daily Review 7 Dec 10

Good day forex trading koalas.

It is the second day of the trading week and i hope you are making money from your forex trading.

In the previous review, sentiments were low as it was speculated that another round of quantitative easing may be conducted by the US Feds. Investors are concerned that the US economy may still be far from being fully recovered.

Looking at the EUR/USD chart above, we can see the currency pair climbing to test the 1.34 region.

The S&P 500 is currently above 1220 and has reached a 2 years high. This is much welcomed by the markets as it suggests positive sentiments.

It was reported that President Obama has agreed to a two years extension on tax cuts. This is probably increasing the risk appetite of investors. Furthermore it was reported that the US Treasury had sold it's remaining stocks of citigroup. With this development, a number of investors feel that the worst is over and the road to recovery is making progress.

Over across the Atlantic, developments are probably bleak. There are investors that believe that Portugal will be next to require a bailout and that there will probably be nations leaving the Euro Zone due to the economic differences. The budget deficit of Greece was reported to be highest among developed nations, clocking in at 15.4% of the GDP. Spain is at 11%.

More economic data is due tomorrow including the German Industrial Production. Be on a lookout for any market developments that may cause risk aversion.

Trade Safely

***

Related Forex Articles from the Koala Forex Training College.

• Quantitative Easing. What Why How ?
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• Support and Resistance lines are never a single pip

EUR/USD Daily Review 7 Dec 10

EUR/USD Daily Review 6 Dec 10

Good day forex trading koalas!

A new start of the week brings us new hopes to make money in forex :) I hope you had a great weekend and let's finish the week in green !

Last Friday, we closed the week with a sell off of the US Dollar. The US Non-Farm Payroll was much worst than expected and together with the increase of the unemployment rate to 9.8%, traders were rushing to jump out of the sinking ship. However is the other "ship" the Euro not sinking?





Looking at the EUR/USD chart above, we note that the bullish momentum did not follow through the weekend as the currency pair dips below 1.33.

The S&P 500 is currently shaky as investors are probably getting down to understanding the market after Friday's US NFP.

It was reported that Mr Bernanke of the US Fed did not rule out the possibility of further quantitative easing. A policy aimed to stimulate an economic recovery of the US, investors are probably apprehensive. The US deficit is massive and any additional inflation of the deficit adds on to the strain felt by the nation. There are also questions on the usefulness of the policy as previous attempts on quantitative easing apparently did not yield much success.

The Euro Zone is facing increasing pressure on it's ability to curb the current deficit crisis. First was Greece and next was Ireland. Which nation is next? Speculations are spreading like wildfire and the complications surrounding an actionable solution due to the region's diversity are weighing sentiments down. There are talks of a possible Euro Zone bond to better manage the risks but nothing concrete has been drafted.

Watch out for more economic data due tomorrow such as the German Factory Orders. Poor numbers will probably depress the sentiments more.

Trade Safely.

Related Forex Articles from the Koala Forex Training College.

• US Non-Farm Payroll Dec 10 Review
• Quantitative Easing. What Why How ?
  

EUR/USD Daily Review 6 Dec 10

Masoud : EUR/USD Weekly Review 5 Dec 10

Hello koala king and folks.

Good day to you.

It seems that as the overall rainfall and snow continued in Europe, currency markets are also affected! America dollars over the last three weeks failed to continue climbing despite the fact that buyers want to ensure the continued strengthening of the currency. This week was once again a focused week on state government bonds of Europe. Following the release of positive data in Asian countries, stock indexes of the region strengthened and probably flowed over to Europe causing the indication of increased risk appetite in the equities market.

The news remains bad in Europe as S&P reviews the rating of Portugal. A possible downgrade may bring more risk aversion to the markets as investors are very much concerned about the Euro Zone.

Mr. Trichet spoke of the ECB continued moves of bonds purchase to prevent acute tension to the market. ECB also announced that Ireland and Portugal bonds are bought. While this caused an initial dip of the Euro value, things quickly pick up as investors felt relieved.

Finally the much anticipated US Non-Farm Payroll came last Friday and the number of jobs created in America was much less than what was expected. As soon as the data was announced, the US Dollar was sold in favor of high yielding currencies. I personally believe that the issue concerning currency movements is not of whether is there risk appetite or not. Observing the equities markets indicates continued demand and hence suggests that overall there is no lack of risk appetite. It is probably more of a shift of funds by investors between the Euro and US Dollar depending on the market conditions.

In this month's US NFP, America's unemployment rate rose to 9.8%. The increase in jobs is usually an indicator of the recovery of an economy from a recession. However with the current low number of jobs created, it seems that the economic growth is not optimal yet and hence we must wait another month to see if the economy improves.





Technical point of view: A pattern that is often observed is the continuation of the US NFP currency movement trend by investors in the Tokyo and London sessions on Monday. Therefore we may seen a bullish EUR/USD. As you can see above, the EUR/USD may be still within the descending channel but a high ceiling channel is broken. Note the "ladder" pattern of the currency pair.

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.

• Risk aversion in the forex market
• Resistance and support lines are never a single pip
• US Non-Farm Payroll Dec 10 Review
  

Masoud : EUR/USD Weekly Review 5 Dec 10

US Non-Farm Payroll Review 3 Dec 10

Good day forex trading koalas!

Did you get a margin call last Friday?

I certainly hope not. I reminded again and again about the extreme risk when it comes to trading during the US Non-Farm Payroll. This is probably not a good method to make money in forex.

In the previous review, we noted that the US NFP data was much better than expected. Immediately there was a knee jerk reaction in favor of the US Dollar followed by a counter move. The flip flop could have easy wiped out trades on both sides.





Looking at the EUR/USD chart above, we see a move of almost 200 pips during the December 2010 US NFP! As the move was mainly bullish, traders speculating on a bearish move would have been devastated.

Although the US NFP came in positive, the increment of jobs was just 39k. A much higher increase was expected. This caused concerns as investors struggle to make sense of the data due to other strong economic outlooks. The ultimate rain to the parade was the unemployment rate. It increased to 9.8% and once again brings the US close to the dreaded 10% unemployment rate. As employment is crucial to consumer spending, risk aversion towards the US economy developed and the US Dollars was sold as seen above.

A number of the forex trading koalas mentioned to me that their positions were wiped out when they tried to counter trade the bullish jump. Looking back at the chart above, the currency pair never receded from the bullish momentum. I always feel that it is not advisable to try to catch tops and bottoms.

Trade Safely.

***

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• The US Non-Farm Payroll and the EUR/USD
  
• The US unemployment crisis
• Forex Mistakes : Picking tops and bottoms

US Non-Farm Payroll Review 3 Dec 10

EUR/USD Weekly Review 29 Nov - 3 Dec 10

Good day forex trading koalas.

It is the weekend again and now is a good time to review on our forex trading plans. Personally i use the weekend to evaluate the markets and see if my views are in line with the overall fundamentals. Like they always say, going against the trend is like hitting the wall with an egg!

In the previous EUR/USD weekly review, we noted that the global economy faces three potential problems. The Euro Zone Deficit Crisis, the cooling of China's economic growth and the two Koreas.

Looking at the EUR/USD daily chart above, we note a extensive bullish momentum for the currency pair.

Early week, the market suffered from risk aversion. There were speculations that Portugal and Spain may be heading down the hall of bailouts. After the Greece and Ireland bailouts, investors are apprehensive. The bearish pressure exerted by the risk aversion sent the EUR/USD below 1.3 and the 200 SMA. This indicated bearish sentiments.

As midweek approached, an Italian bond auction was not well received and this sparked concerns. Economic experts mentioned that Spain might be the next to suffer economic woes and being twice as large as the economies of Greece, Ireland and Portugal combined, it might be a huge strain on the Euro Zone. It was also reported that the loans of the Euro Zone had reached a 1.9 billion euros and that increased speculations of a bleak outlook for the Euro Zone.

As the week headed towards the weekend, the line of 1.3 turned out to be a turning point for now. The S&P 500 hit above 1200, suggesting positive sentiments. This was probably contributed by the much better than expected US Pending Home Sales. Investors were encouraged by the data as it might be an indication that the end of the housing tax credit some time back did not hamper growth much. Having said so, we must remember that the US deficit is massive and carries a high risk of complication. The 1.32 line was tested.

The US Non-Farm Payroll was released on Friday. The numbers was much lower than expected. Of much surprise was the increase of the unemployment rate to 9.8%. As employment is a main driver of consumer spending which in turn is an important facet of the economy, this probably caused much risk aversion towards the US economy. This probably caused an inevitable sell off of the US Dollar for Euros. The EUR/USD shot up like a bullet train and is currently slightly above 1.34. Equities was affected too.

***

I was reading a report earlier and i felt that it highlights the increasing tension between the various nations of the Euro Zone. The ECB, IMF and now the Belgian Finance Minister support the possibility of increasing the Euro Bailout Fund. There are concerns that the current amount of bailout funds may not be enough if Spain comes under the water next. Furthermore Portugal is coming under speculations too that it may need a bailout. However Germany and France is not for the idea. Earlier Germany mentioned that it felt that investors need to play a part too in this crisis management. Should tensions continue to increase, it will probably prompt a wave of risk aversion and speculations.

A comment by an adviser to the China Central Bank was highlighted in a report too. To curb capital inflows and a possible raise in lending in the beginning of 2011, the China Central Bank may increase the reserve ratios of banks. As investors usually see China as a lead in the global recovery, any slowdown in the growth of it's economy may prompts fear of a recovery slow down.

From a technical point of view, the test of the 1.3 / 200 SMA failed and this indicates the strength of this region. While the price closed slightly above 1.34, this may not indicate a clean break of the resistance.

There are many economic data due next week including the US Prelim UoM Consumer Sentiment. Furthermore Mr Bernanke is due to speak hours just after the new trading week opens. Close observation of the developments is a must.

You can find the list of the various economic releases in the Economic Calender below.

Trade Safely.

Related Forex Articles from the Koala Forex Training College.

• Risk aversion and the forex market
• Support and Resistance are never a single line
• US Unemployment Crisis
• Housing is good for the economy
  

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 29 Nov - 3 Dec 10

EUR/USD Closing Thoughts 3 Dec 10

Good day forex trading koalas.

It is the end of the week and i hope everyone will make money from forex. Do remember that the forex market will still be there next week and hence never over trade.

Yesterday we noted that the US pending home sales was much better then expected. Sentiments was good and the equities market gained.

Looking at the EUR/USD 1 hour chart, we notice a spike up. The currency pair is testing the 1.34 region.

The US Non-Farm Payroll was released today. The data was much lower than expected and that probably caused disappointment. Furthermore the unemployment rate increased to 9.8%, sparking alarms regarding the state of the employment market in US. Consumer spending is important for an economy and a depressed employment market may further reduce that.

Equities were affected and US dollars were sold for Euros as seen in the chart above. Do be careful though as this may merely be a knee jerk reaction to the negative news.

Trade Safely.

***

Related Forex Articles from the Koala Forex Training College.

• Never over trade
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EUR/USD Closing Thoughts 3 Dec 10

EUR/USD Daily Review 2 Dec 10

Good day forex trading koalas.

Today is Thursday and soon it will be the end of the trading week. I hope you are on your way to make money from forex and remember, do not forget your proper money management!

In the previous review, Masoud explored the intensity of the Euro Zone crisis weighing down on the markets. Risk aversion is strong as investors fear of a Euro Zone meltdown.

Looking at the EUR/USD chart above, we observe a bullish moment in progress.

The US S&P 500 is currently above 1200 and this suggests that the sentiments are positive. Risk appetite has increased as investors are feeling optimistic.

Earlier, the US pending home sales clocked in much better than expected at an impressive of 10.4%. Investors probably see this as an indication of better market conditions. As home sales usually stimulates the economy, an increase of it will probably have wide benefits to the economy. This also probably eased some fear with regards to the expiration of housing tax credits some time back.

Having said so, i will like to remind everyone that the US budget deficit is massive and hence there is a risk of complications.

Tomorrow brings us many economic events including the US Non-Farm Payroll. Extreme volatility usually happens during the US NFP and hence extreme caution must be taken.

Trade Safely.

***

Related Forex Articles from the Koala Forex Training College.

• Risk aversion in the forex market
• Home Sales stimulates an economy
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EUR/USD Daily Review 2 Dec 10

Masoud : Midweek EUR/USD Review 1 Dec 10

Hello koala king and folks.

Good day to you.

After announcing details of the financial aid package to Ireland, the current risk aversion was reinforced once again and the downside pressure intensified. Meanwhile the EURUSD fell sharply and serious doubts emerged regarding the resolution of the crisis in Europe. The Euro was weaker against the US Dollar. Furthermore the bond spreads of the Euro Zone countries increased. To add on to the risk aversion, a news release claims that the amount of borrowing countries from the central bank of Europe increased from 852 million euros to 1.9 billion euros. Intense bearish pressure is weighing on the Euro and once again the economic woes of Spain, Portugal and Belgium will be focused.

A weak bond auction in Italy brought to light a situation of concern regarding bonds. The 10-year bond rate spreads of Italy compared against Germany reached a record 200 units. According to economic experts, a financial crisis in Spain will be the new challenge for the Euro Zone. Spain's economy is twice the total economies of Greece, Ireland and Portugal.

The World Bank President emphasized that the world economic situation is still very fragile and uncertain. However the occurrence of a second wave of the crisis is far-fetched and unlikely. The World Bank in its June report warned of a second wave of financial crisis in Europe and other countries that face a debt crisis.

Statistics Institute of Europe in its latest report said that inflation in the Euro Zone sixteen member countries during November has reached more than 1.9 percent. The European Central Bank intends a European inflation rate under the 2 percent hold.





Technical point of view: The EUR/USD in time frame H1 is within a descending channel and now the currency pair has reached to the high ceiling channel. I am waiting for a possible drop of the EUR/USD. Regarding channel trading, do not trade in the opposite direction trend of the channel and use channels that matches to the main trend.

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.

• Risk aversion in the forex market
• Resistance and support lines are never a single pip
  

Masoud : Midweek EUR/USD Review 1 Dec 10