Daily FX Profit Signal April 1st, 2010

Dollar continued to see volatility all over the place, giving up ground to the majors except for the JPY, AUD, and NZD. We continue to take a cautious stance on the market as the lack of correlation between the majors puzzles us. Recent breaks below/above support and resistance levels haven’t been met with a lot of resistance but the lack of follow through is what’s concerning. These large pull backs are most likely retracements, and at this time, we’re looking for confirmation.
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Daily FX Profit Signal March 31st, 2010

A bit of consolidation yesterday as markets are gearing up for economic data releases, specifically this Friday’s NFP release. The commodity currencies, specifically the Aussie has done extremely well and is now testing the upper limits; with Retail Sales coming out within just one hour, we’ll be looking for either a continuation higher above .92 or a failure and a move lower behind worse than expected numbers. We should continue to see extreme volatility and are focused on the longer term picture rather than the short term; it’s becoming very dangerous and we are opting out of using stops that are further away than we prefer, hence the lack of direction and the frequency of trades.
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Daily FX Profit Signal March 30th, 2010

Markets are puzzled by the lack of follow through from dollar bulls, especially on the commodity pairs, which are seeing a big divergence from the rest of the majors. Sometimes it’s better to sit on the sidelines and not participate in this type of action. We haven’t had a serious trade in almost 2 weeks and just when we want to step in, something out there is telling us to stop and wait. It seems the last few weeks have given us more opportunities during our Live! Trading sessions than the daily setups. The daily setups are warranting stops that are a bit higher than what we’d like to see; that’s expected during such conditions, but we’re going to remain patient and wait for the opportune time.
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Economic Calendar 28 March - 2 April

DATE	TIME	CRNCY	EVENT	ACTUAL	FORECAST	PREVIOUS
Mon		EUR	EUR German Consumer Price Index - EU Harmonised (YoY) (MAR P)	1.3	0.9	0.50%
29-Mar
		EUR	EUR German Consumer Price Index (YoY) (MAR P)	1.1	0.9	0.60%
Tue	14:00	USD	USD Consumer Confidence (MAR)	52.5	51	46
30-Mar
Wed	7:55	EUR	EUR German Unemployment Change (MAR)	-31K	7K	-1K
31-Mar
	23:50	JPY	JPY Tankan Large Manufacturers Outlook (1Q)	-8	-8	-18
	23:50	JPY	JPY Tankan Large All Industry Capex (1Q)	-0.4	+0.4	-13.80%
Thu	6:00	EUR	EUR German Retail Sales (MoM) (NOV)		0.00%	-0.5% (R-)
1-Apr
	14:00	USD	USD ISM Manufacturing (MAR)	59.6	57	56.5
Fri	12:30	USD	USD Unemployment Rate (MAR)		9.70%	9.70%
2-Apr
	12:30	USD	USD Change in Non-Farm Payrolls (MAR)		190K	-36K

Interest Rate Decisions

Interest rates decisions news flashes provide guidelines for the overnight lending rate which are bound to have an effect on businesses and consumers alike. An upward surge in the cost of living - inflation and a runaway economy is slowed by hiking the interest rates. Lowering interest rates rejuvenates an economy from the doldrums by enabling consumers to get easy credit thus increasing consumption. Currencies strengthen when interest rates move north and weaken when the rates move southwards.

 

 Change in Employment

Change in employment index compares the employment to the unemployment rates in a certain economy. The index which is calculated by economist is used to predict future spending and consumption pertains which are likely to occur due to change of one of the parameters. An economy can either grow or contract depending on which of the two parameters changes.

 

Consumer Price Index (CPI)

CPI is one of the most reliable parameters used to gauge the extent of inflation on the economy. Every household spends money on some basic commodities and utilities, these items are collectively referred to as “the consumer basket”. By monitoring the changes in price of the consumer basket, economists are able to predict the interest trends. This is largely due to the fact that central bank will more often than not act to tame inflation by raising interest rates and vice versa. The adjustments of interest rates to keep consumer basket within the majorities reach will affect the underlying currency either strengthening or weakening it.

 

Retail Sales

Retails sales are good pointers of the state of the economy. When the economy is strong and growing, retails sales escalate and consumer are more willing to spend money on luxury goods. Conversely, a shrinking economy is characterized by a reduction in retail sales and cautious spending by consumers.

 

Trade Balance

This is simply the difference between total exports and total exports between two or more trading nations. Multinational trade involves the export and import of goods and services between nations. When one country exports more than it imports the net effect is a trade surplus. The reverse of this is known as trade deficit. Great emphasis is placed on Trade Balance Report as it shows the movement of goods and services between nations. Countries with trade surplus usually have stronger economies as there have more money in than what there are spending.

 

Gross Domestic Product – GDP

GDP is derived at by measuring the consumers’ ability to consume / afford goods and services produced within their economy. A strong GDP is a sign of a robust economy which should be checked for inflation - rising interest rates - while a weak GDP could be interpreted to indicate a recession meaning interest rates are likely to head south.

 

ISM Manufacturing Survey

This survey gauges the mood and sentiments of companies’ top brass, decision and policy makers towards inflation. The centerpiece of this survey is their take on business outlook - new business, production capacities, backlogs, inventory levels and manpower issues. A 50 points scale is used to interpret the findings with value 50 indicating expansion, while values below 50 are a sign of recession

Daily FX Profit Signal March 29th, 2010

Happy Monday Traders,

Recent volatility remains our number one concern. While providing opportunities, this type of volatility is unwelcome. The current theme remains to be of risk appetite/aversion as bulls and bears continue to fight out for direction. The trend remains in favor of the buck and we are once again looking to enter the market long dollar positions. The dollar weakness we saw on Friday and on today’s open is most likely the retracement from the recent rally. We’re looking forward to trading the NFP live this Friday; looking for further dollar strength throughout the week.
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Daily FX Profit Signal March 24th, 2010

The dollar continued with the recent rally even in the wake of better than expected UK Retail Sales. We are looking for a continuation into the next 24 hours, setting up a nice finish to this week’s rally. We still see risk ahead of the weekend as we’re sure to hear more about Greece and the IMF. We are looking for good entry levels to long the buck.  With the euro setting a lower daily low, we are now looking at 1.3400 as the main level of resistance, followed by 1.3450. Plenty of important people speaking throughout the day and we will have some data out of the US to help with the price action

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