US Non-Farm Payroll Review 4 Mar 11

Good day forex trading koalas.

Welcome to another review of the monthly US Non-Farm Payroll event. Many folks suffer a margin call during such events due to over sized positions. This is a very risky and unpredictable economic event and personally, i rather be just sitting out on this and observing if possible.

In the previous review, we noted that the Feburary US NFP came out lower than expected. Investors were shocked and knee jerk reactions were seen. The range was huge and risk aversion drove the EUR/USD down. Having said so, the US Unemployment Rate was lower than expected and it helped to mitigate the situation. US equities rose and the US dollar was further strengthened as investors saw that as a sign of improving employment conditions.





The US NFP for March came out pretty much around the estimate. Looking at the EURUSD chart above, we note that the initial range was a mere 50+ pips. This supports the fact that investors were not surprised and hence not much big changes of positions happened. Furthermore the strong technical line of 1.4 probably helped to cap the range. Having said so, the currency pair did ranged tightly.

Moments later we noted a climb up towards the 1.4 line. In fact the line was touched. This suggested bullish pressure. While the US NFP was close to the estimates, it turned out that the US Unemployment Rate unexpectedly dropped to 8.9%. This was a surprise to many and brought renewed optimism to many as investors and traders speculate that this is yet another sign that the US labor market is improving. Earlier in the week, the lower than expected US Unemployment Claims also brought positive sentiments to many.

As we head towards the second quarter of the year, continued positive outcomes from this monthly important event will definitely steer the sentiments towards the US Economy to a brighter note.

Trade Safely.

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Related Forex Articles from the Koala Forex Training College.

• The US Non-Farm Payroll and the EUR/USD
  
• The US unemployment crisis
• Tom, the story of a margin call

US Non-Farm Payroll Review 4 Mar 11

EUR/USD Weekly Review 28 Feb - 4 Mar 11

Good day forex trading koalas.

It was a week of directionless trading. Many folks were trying to catch a top and failed. Remember that forex is never 100% predictable. The only way to make money from forex is probably proper money management and patience.

In the previous review, we noted that inflation risk is high and in particularly investors are speculating that the European Central Bank may hike interest rates soon to combat inflation. Hence the demand for Euro may increase.

Looking at the EUR/USD chart above, we can see a long period of hesitation around the line of 1.38. We all know that 1.38 is usually a strong resistance. However the line succumbed to the intense upside pressure towards the end of the week.

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Beginning of the week saw repeated attempts to break the 1.38 line. There was risk aversion in the markets due to the escalation of conflicts in the Middle East and North Africa. Having said so, bullish pressure remained due to the inflation risks. Indications from the ECB continued to fuel speculations that an interest rate hike is due soon.

By mid week, the EUR/USD began to test the region above 1.38. Many traders began to call for a top due to the strength of the line. They believed that risk aversion would work to dampen the currency pair.

Towards the end of the week, it became clearer that 1.4 might be next. A breakout developed and pushed the EUR/USD above 1.39. A particular development probably helped along. This was the better than expected US unemployment claims. It was the lowest since May 2008 and most investors see this as a strong indication of an improvement in the labor market of the US. Risk seeking activities increased.

The US Non-Farm Payroll was due at the end of the week. While the statistics came out rather expected, the unemployment rate was lower than expected! This was a much welcomed change and it brought the unemployment rate below 9%. This further fueled the indications that the US labor market is improving and probably sparked a demand for higher risk assets. The EUR/USD touched the 1.4 line.

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Inflation risk will probably continue to be a focus next week as many economic data is suggesting that inflation is growing. This is an important matter to consider as many investors will probably speculate that the European Central Bank will take measures soon to curb inflation. The Euro will probably face increased demand due to the anticipation of an interest rate hike.

I mentioned previously that two of the most troubling factors of the US economy are probably the housing market and employment situation. Many experts and Mr Bernanke himself believe that these two factors are weighting the US economic recovery down. With the drop of the unemployment claims and the unemployment rate, investors are probably going to be looking at the US economy with renewed optimism.

1.4 is an important line from a technical point of view. Therefore it is crucial that we play attention to how the currency pair reacts at that level. The week closed slightly below thus we cannot rule out a failure to break the resistance.

Next week brings us a number of important economic data such as the US Unemployment Claims and Retail Sales. Investors will be looking at the Unemployment Claims closely after the good release this time. 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.

• Never try to pick tops and bottoms excessively
• Home Sales is good for the economy
• US Unemployment Crisis
  

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 28 Feb - 4 Mar 11

EUR/USD Daily Review 3 Mar 11

Good day forex trading koalas.

Today is Thursday and soon it will be the end of the trading week. I hope you are making money from forex. The currency exchange market is no easy feat!

With the continued conflicts in the Middle East and North Africa regions, risk aversion is in the markets. The EUR/USD while weighed down, slowly makes it's advances beyond the 1.38 line.





Looking at the EUR/USD chart above, we witness a breakout in progress. While many folks believed that the 1.3880 line may hold strongly, the currency exchange market surprises all again. The currency pair shot through the 1.39 line and seems to be on it's way to touch 1.3940 and beyond. We must always remember that trying to pick tops and bottoms excessively is dangerous.

A quick look at global equities suggests that sentiments are doing well today. Most equities index are clocking green.

Moments ago, the US unemployment claims statistics was released. It was lower than expected and in fact it was reported to be the lowest since May 2008. Many investors see this as a sign of improving labor conditions and optimism towards the US economy increased. While folks may be expecting an increase in the US Dollar, the current increase in demand for the Euro is the opposite of risk aversion. Investors are encouraged by the good statistics and are selling relatively safe assets such as the US Dollar for higher yielding currencies and assets.

While the ECB held on to the current interest rates, inflation risk are mounting and investors are speculating that an interest rate hike should be due by year end. This is causing an increased take up of the Euro too.

We have the US ISM Non-Manufacturing PMI due soon and tomorrow brings us the important US Non-Farm Payroll among other economic data. Do be careful of unexpected spikes.

Trade Safely.

***

Related Forex Articles from the Koala Forex Training College.

• Risk aversion in forex
• Forex Mistakes : Picking tops and bottoms
• US Non-Farm Payroll Feb 11 Review
  

EUR/USD Daily Review 3 Mar 11

Masoud : Midweek EUR/USD Review 2 Mar 11

Hello koala king and folks.

Good day to you.

Events happening in China such as the bullish commodity market will probably not leave much impact. The Chinese government plans on the market is more intervention on the supply and demand. However due to the volume of demand, tangible change may not happen. In the medium term, the Chinese government gradually to curb budget deficit will eventually lead to the privatization of more governmental services so as to reduce the size.

Continuing unrest in the Middle East and North Africa and the spread to other countries have caused concerns in traders. Risk seeking activities are lesser and traditionally low risk assets such as gold and silver have shown continued demand. Financial policymakers around the world have raised concerns regarding increasing inflationary pressures from oil and its impact on global economic growth. If these pressures increase and the various central banks fail to take appropriate measures, the price of gold will increase.

Besides Libya and Bahrain, the issue between North and South Korea may escalate too. In China, hundreds of police were called in to settle protests in Beijing and Shanghai.

The European Central Bank continued it's sharp stance to counter inflation and appears to have a tendency to raise interest rates, the time may be earlier than expected. In contrast, Fed officials remains focused on other issues of creating conditions of employment.

Yesterday, rating agency S&P mentioned that it could further downgrade both Portugal and Greece's debt in the coming months. This is pending the new European Stability Mechanism features that will be decided later this month.





Technical point of view: As I said in the weekly analysis, the EUR/USD trend is ascending and I believe it is still. As you can see in the above picture, the EUR/USD failed to break the mid line of fork in daily time.(Green Line). On the other hand a strong resistance of 1.3850 has been hit and if this resistance is broken, the target would be 1.41.

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 forex
• Gold during risk aversion
• US unemployment crisis

Masoud : Midweek EUR/USD Review 2 Mar 11