EUR/USD Forex Forecast Reviews | Learn Forex Trading: 26 December 2010

Thursday, January 6, 2011

EUR/USD Daily Review 6 Jan 2011

Good day forex trading koalas!

Before we start, i want to apologize. I am having an extreme headache and hence i will not be writing alot. However i do want to share my opinions to you my dear readers and hence i am fighting the pain!

In the previous review, Masoud mentioned that a double top formation developed on the H1 EUR/USD chart and a drop to 1.3080+ may happen if the formation turned out to be true.

Looking at the EUR/USD chart above, Masoud's view on the EURUSD was right on the spot! It tested the 1.3080+ region and looked poised for more.

The S&P 500 is facing mixed reactions for now probably due to the US Unemployment Claims. While the US Unemployment Claims turned out to be worst than expected, based on an average taken over the past four weeks, the figures are dropping.

I always mentioned regarding the complexity of how the markets are influenced by sentiments and now is a perfect example. A group of investors with knee jerk reactions probably became risk averse regarding the worst than expected data. On the other hand, another group of investors probably analyzed the data, saw the lowering trend and are probably optimistic regarding the US employment market.

Among the various economic data due tomorrow, lies the US Non-Farm Payroll and the Unemployment Rate. Estimates are optimistic and hence if unexpected data occurs, we may be seeing strong reactions. BE CAREFUL OF US NFP !!

As we hover around the region of 1.3090, do be aware that a historically strong support of 1.3 lies below.

Trade Safely.

***

Related Forex Articles from the Koala Forex Training College.

Wednesday, January 5, 2011

Masoud : Midweek EUR/USD Review 5 Jan 11

Hello koala king and folks.

Good day to you.

Estonia became the seventeenth nation to adopt the single currency Euro. Based on GDP from the end, Estonia is the second (after the small country of Malta). Sarkozy also declared in a speech: “The end of the euro would be the end of Europe”.

In America, positive and almost strong construction spending and the index of ISM was announced. It was in line with market forecasts and it bolstered speculation and restore confidence in a global economic growth in 2011. This probably enhanced the willingness to invest in higher yield assets.

Due to the fear of the Euro Zone Deficit Crisis, bonds rose in Europe and a weakened flow of risk appetite in the financial markets was seen. Low volume of liquidity in the currency exchange market is still visible but we have experienced some volatility in recent days. However this is expected to gradually become more relaxed. Having said so it is probably better to enter into trades only after when rational and orderly patterns return.

Last night the minutes of the previous meeting of the Monetary Policy Committee of the United States Federal Reserve (FOMC) was released. Fed officials said that the recent economic gains have not been enough to buy back the assets and the Fed policymakers believe that economic improvements achieved has not reached pre-specified thresholds. Therefore previous quantitative easing plans to buy 600 billion dollars in bonds so as to help reduce unemployment and the economy in general will continue.

The Fed said that while the economic outlook is improving, the members believe that this perspective is not enough and does not guarantee enough to make any amendments to the quantitative easing policy.

Today in Europe, Portugal 6-month bond auctions are held and certainly the market will be attracted. In the remaining days of the week, the private sector employment (ADP), the monthly employment report (NFP) and the speech by Mr. Bernanke will probably bring apprehension and risk aversion as investors await to review the economic conditions of America.

Technical point of view: Yesterday the EUR/USD in Time frame H1 formed a double top and today the EURUSD broke the neck line. Hence there is a possibility that the currency pair may fall to 1.3080. If the resistance 1.3080 is broken, the goal would be 1.2950.

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.

Tuesday, January 4, 2011

EUR/USD Daily Review 4 Jan 2011

Good day forex trading koalas.

Second trading day of the new year and i hope no one has forgotten what i said! To make money in forex, proper money management is important!

In the previous review we noted that the string of recent positive economic data from the US probably brought optimism towards the US economy to the market. S&P 500 is doing good. Currencies however still display patterns indicative of low liquidity.

Looking at the EUR/USD chart above, 1.34 is being tested for the moment as the currency pair attempts to steer clear of it. If the EURUSD continues to be bullish, we may see a test on 1.3450+.

With the rest of the Euro Zone back in action today, liquidity is probably picking up. Earlier today, the German Unemployment Change performed worst than expected. 3000 unemployed folks were added to the existing pool.

It was also reported that Spain is planning for a new round of stress tests and assistance from the state rescue fund will be limited. Stress tests always present the risk of opening a can of worms and hence we need to monitor developments carefully.

Despite the above, the EUR/USD has been bullish so far and it may be due to the report that China is confident in the European financial market and that China supports the Spanish economic reforms. Spanish government debts will still be bought by China. Being a major economic power, China's support for the region is probably seen as a stability factor.

The US FOMC Meeting Minutes will be out later and investors will be paying close attention for clues to future policy directions. Tomorrow brings us more economic data including the US ADP Non-Farm Employment Change which is often used as a clue for the US Non-Farm Payroll.

Trade Safely.

***

Related Forex Articles from the Koala Forex Training College.

Monday, January 3, 2011

EUR/USD Daily Review 3 Jan 2011

Good day forex trading koalas!

First trading day of the new year and i hope everyone is geared up to make money in forex. Please remember that proper money management is a must!

In the previous review, we noted that the positive economic data streaming from the US probably caused an increase in risk appetite. Probably due to the low liquidity, the EUR/USD gained bullish momentum and tested 1.34.

Looking at the EUR/USD chart above, a small forex gap developed over the weekend. Having said so, forex gap traders speculating on a quick gap closure saw disappointment as the gap has yet to fill. In my opinion, forex gap trading is VERY risky.

The S&P 500 is in the green today and investors are probably still positive about the recent string of good economic data. The US ISM Manufacturing PMI was just released moments ago and it is as expected, higher than the previous month.

Long term koala traders will notice that i have not been mentioning about oil for sometime now and WOAH it is now above $90. I always mentioned that oil can be a clue to the global economy's health and if the $90s are here to stay, i will say that we have made progress as a global economy!

With the liquidity of the market probably still below normal, expect the unexpected for the currency movements. If unsure, staying at the sidelines may be wise. With the rest of the Euro Zone reporting in to the currency exchange market tomorrow, surprises may await.

Tomorrow's economic data lineup includes the German Unemployment Change.

Trade Safely.

***

Related Forex Articles from the Koala Forex Training College.

Masoud : World Economy in Review 2010

Hello koala king and folks.

Good day to you.

Find below my take on the world economy in 2010.

In 2010, a large part of the global economy is still dealing with the consequences of the 2008-2009 financial crisis. While a large number of economists made a relatively simple and quick assessment that the crisis is over in many developed countries of world, complications still surprises the market.

Changing power relations

Emerging powers (China, India, Brazil, etc.) that suffered minimum damage from the financial crisis continued their ascension to the international scene in 2010.

China in the past year in terms of GDP, surpassed Japan and later the United States. It became the world's second largest economy. These developments along with the role of China as a world power in the volume of export of goods and it's huge foreign exchange assets, gave it an increased scope of influence in the field of trade, financial and industrial.

However major weaknesses in China should not be ignored. Especially the country's comprehensive use of economic leverage that the international community are ever more intolerant about : Industrial property rights, low levels of social rights, dumping money (keeping the yuan rate artificially cheap), environmental pollution.

Having said so with the increasing purchasing power of the middle class of the world's most populous country, China will be a growing market for many countries.

Other emerging powers and dynamic developing countries (Thailand, Turkey, Malaysia, Mexico, Indonesia, etc...) in 2010 enjoyed a high growth rate due to their minimized exposure to the financial crisis.

Unlike some skepticism regarding the economic conditions of the "third world", 2010 probably brought international limelight to the developing world due to the relatively great economic performance. This suggests that for the past thirty years and especially in the first ten years of twenty first century, the role of developing countries are probably given less than appropriate recognition.

From USA to Europe

In the United States, a return to boom in 2010 was not as intense as what was predicted. Difficulties arising due to the financial crisis continued to plague the US economy and apprehension remained.

However as a total record, the US economy in 2010 is not that bad. Growth rates in the world's biggest economic power is probably about 3% and is along the growth rates of Germany. The United States in terms of these statistics is among the most successful advanced countries in the world.

In 2010, investment in the US is increasing and wages somewhat increased, together with household savings. During the last two months of 2010. America published a series of good economic news bringing hope that "Uncle Sam" is back to it's former glory and that the memories of the 2008-2009 Financial Crisis will come to a close.

Having said so there remains the big problem of the U.S. economy, unemployment. It remains at around ten percentage and is taking a long time to recover. Eight million jobs were lost during the crisis in the US and this probably cannot easily be compensated.

The European Union and the European area in 2010 faced much difficulties.

The twenty-seven EU member states in Europe and sixteen Euro Zone countries are not facing the same economic situation and this complicates matters. A group composed of Germany, Austria, the Scandinavian bloc, Netherlands and Luxembourg leads 2010 with more or less satisfactory performance.

On the other hand, another group such as Greece, Ireland, Portugal and Hungary, struggles with debt and financial difficulties. It is only with the help of its regional allies and the International Monetary Fund that the risk of bankruptcies remained controlled.

In between these two groups are countries such as Italy and Spain which currently are economically in an intermediate state. Having said so even the financial situation of a country like France is not immune to doubt.

In the last months of 2010, the Euro as a common currency of sixteen member states of Europe (the first of January with Estonia's participation, there will be seventeen countries) was put to a severe test and in a number of regional member countries including Germany, citizens increasingly become doubtful of the single currency.

In 2011 for the Europe Union and the Euro area, the alarm will sound. The union members have two options ahead: advancing quickly and decisively towards greater integration and acceptance of common economic policies or continue the current situation with the risk of a collapse.

Unity of Europe, one of the most glorious achievements of human civilization is faced with the ultimate challenge

Happy New Year. :)

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.

Saturday, January 1, 2011

EUR/USD Weekly Review 27 Dec - 31 Dec 10

Good day forex trading koalas!

It is 2011 and a happy new year to you :) Remember to trade forex the right way and hope you will make money in forex.

In the previous EURUSD weekly review, we noted that the interest rate hike by China might affect the markets. China is often seen as a major economic player to lead the world out of the recession and hence any effort to curb speculative growth may bring about fears of a stall in recovery. We also note that the 200 SMA lies around the 1.3 line and it may be a strong support.

Looking at the EUR/USD chart above, we can see that the 200 SMA did indeed served as a support region. The week turned out to be a bullish week but it might be due to the low liquidity from the holiday season.

Early in the week while the EURUSD apparently did not react much to the China interest rate hike, global equities fell. There were signs of the currency pair drifting upwards but a poorer than expected US S&P/CS Composite-20 HPI, which is an index of property prices, caused concerns among investors with regards to a sluggish US economy. The EUR/USD dropped to test the 1.32 resistance turned support.

As we moved into mid week, the signs of dropping liquidity began to surface. The currency pair moved unexpectedly in extended ranges.

Towards the end of the week, the US Unemployment Claims and Pending Home Sales both clocked in better than expected. As both the employment and housing markets are crucial to the American economy, these positive results probably brought about optimism towards the US economy. In view of the lack of volume, the EUR/USD probably moved unchecked and this lead to a bullish spike up towards the 1.34 region close for the year.

***

It was reported that China's manufacturing growth slowed in December. This was the first time in five months. This may trigger intensifying concerns regarding the effect of any cooling off of China's growth, adding on to the shock felt when China increased it's interest rates in a bid to curb inflation and rising home / food prices earlier on. A fund manager was earlier reported as mentioning that China is a main focus for 2011.

Next week brings us many important economic data. Lineups include the US FOMC Meeting Minutes and US Non-Farm Payroll. Investors will be monitoring to see if the recovery of the US economy continues and how the effects of the quantitative easing policy is holding up. You can find the list of the various economic releases in the Economic Calender below.

As the New Year Celebrations wrap up over the weekend, expect lower than usual liquidity to continue next week. Be careful as currency movements may continue to be volatile.

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.

Forex Farmer Loses Money !

Happy New Year Forex Trading Koalas ! :)

Time flies and another year has passed. Through all the ups and downs, i hope everyone is now a better forex trader.

May you and your family be well and happy. May you have lots of pips harvests :)

Find below a funny forex video for you to begin the new year with a happy laugh.