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At the November FOMC meeting, the Fed will likely leave the policy rate unchanged at 1% and will not announce additional easing measures as recent economic data improved. Yet, the focus lies on policymakers’ discussion about ways of increasing transparency and tools to boost growth when needed. At the post-meeting press conference, Chairman Ben Bernanke will assure the market that the stimulus currently in place is sufficient and the Fed will promptly implement further easing measures should the recovery disappoint.

In the September minutes, the Fed unveiled that ‘most participants indicated that they favored taking steps to increase further the transparency of monetary policy, including providing more information about the Committee’s longer-run policy objectives and about the factors that influence the Committee’s policy decisions’. Indeed, the debates among Fed members regarding the issue have heated up in recent weeks. Minneapolis Fed President Narayana Kocherlakota criticized it lacks clarity in the central bank’s mission and this should be improved through ‘explicit communication’.

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“It took me several years to become consistently profitable. I had the great misfortune of making a lot of money quickly and thinking that I knew what I was doing. I did not. I lost all the money I had made and a lot more before I realized I had no clue.” – Tom Alexander

Hello:

If you want to play the markets triumphantly, you need to determine the direction of the trade based on the overall trend. Then you need to determine the best location for the entry and the stop. You must not make a trade that does not meet your exact entry criteria: you require rock-solid discipline to achieve this. You ought to compute the exact amount of risk; the position sizing, safety measures and the target. Trades should not be taken without seriously considering safety measures. Make

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“If you are expecting the market to rise, the risk is relatively small and you are seeking substantial long-term wins.  If you are expecting the market to fall, then you would have to wait until you actually see it falling… The true trend of the market is found in the longer-term charts.  I have always felt that the big money is made by finding the time frame in which you can see and trade the trend.  Sometimes it is as small a time frame as a 15-minute chart, perhaps even less.  But at other times, it requires stepping up to the very largest time frames.”   – Joe Ross Hello: Nicolas Darvas was one of the past market wizards (thanks to Mr. Ralf Kraemer for shedding more light on Darvas’ trading method). Though, he embarked on a multi-year world tour, he maintained constant communication with his broker. He understood the nature of the market. To him, the market behavior was compared to that of a dancer who’d first squat before getting ready for a jump. This means that some consolidation would be in place after a price jump; something that makes the market ready to jump to the next higher target. There was a time wh Read more…

German consumer sentiment remained  at one year low but printed above the market forecast as consumers in Europe’s largest economy remained untroubled by the surrounding sovereign debt crisis. The GFK measure of consumer sentiment was 5.2 versus 5.1 eyed, the same reading as the month prior.

German’s expectations of income continued to rise increasing to 35.1 points from 27.6 points in August signaling that the the labor markets remain string despite the recent slowdown in growth.  However, the forward looking economic expectations index slipped sharply to 4.8 points from 13.8 points in the period prior. Finally, the propensity to buy remained at a high level although its was off its best levels of the year.

Overall the news on the consumer front was not nearly as dour as analyst’s expectations  given all of the recent the turmoil in European financial markets that put the very very existence of the euro into question. Nevert

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Bob Prechter has just released a FREE report — with urgent analysis from his August and September 2011 Elliott Wave Theorist market letters. It will help you put these uncertain markets into perspective so that you’ll be better positioned to both protect your investments when needed and prosper when opportunities arise.

GBP/USD’s pull back from 1.6618 extended to as low as 1.6207 last week but subsequent rebound argues that such pull back might be finished already. Initial bias is mildly on the upside this week for a retest on 1.6618 resistance first. Break will resume whole rally from 1.5780 towards 1.6746. On the downside, however, below 1.6207 again will extend the fall from 1.6618 towards 1.6110. Break there will indicate that rise from 1.5780 is completed and will turn outlook bearish for this support.

In the bigger picture, price actions from 1.3503 (2009 low) are treated as consolidation to long term down trend from 2007 high of 2.1161. Rise from 1.4229 is treated as the third leg of such consolidation. The corrective structure of the fall from 1.6746 to 1.5780 suggests that such rebound is not completed yet. Further rise could be seen through 1.7043 resistance. But we’d expect strong resistance at 50% retracement of 2.1161 to 1.3503 at 1.7332 to limit upside and bring reversal. Nevertheless, break of 1.5780 will revive the case that GBP/USD has already topped out at 1.6746.

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EURUSD Forecast The EURUSD had another volatile but indecisive movement yesterday. The upper line of the triangle still provided a good intraday resistance area while on the downside 1.4350 support region still hold so far. Overall direction remains unclear as price is still in a consolidation phase inside the triangle and need a clear break from the triangle to see clearer direction. Aggressive intraday traders can still take the advantage of the current ranging market, short around the upper line of the triangle and 1.4500 or long around 1.4250 and the lower line of the triangle with tight stop loss as a break from the triangle could lead price to a new trending situation. We still have some spaces inside the triangle and probably can not expect a valid break from the triangle this weekend.

So you just want a simple Forex strategy to trade? Okay, let’s see what we can do…

Firstly, you want to get the probabilities in your favour; this means making sure you’re trading WITH the trend. Yes, I know, you’ve heard it before – but it’s true; trading with the trend will increase the probabilities for you.

The first thing we do is place two moving averages on the chart. The first moving average is a 50 Period Exponential Moving Average of the Highs; and the second is the same, a 50 EMA, but this time of the Lows.

You should have something that looks like this:

Now, we add another Moving Average, this time it’s a 15 EMA of the Close:

Now, there is an indicator for Metatrader4™ to download with this article called ‘QFF-MACDv1.ex4’. Leave the default setting on this indicator. Once you drag it on

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EURUSD Analysis. EURUSD has formed a cycle top at 1.4535 on 4-hour chart. Further decline would likely be seen later today, and first target would be at the lower border of the price channel. As long as the channel support holds, the fall from 1.4535 is treated as consolidation of uptrend from 1.3837, and one more rise towards 1.4700 is still possible, however, a clear break below the channel support will indicate that the rise from 1.3837 has completed.

USDCAD Analysis. USDCAD broke above the price channel on 4-hour chart, suggesting that lengthier consolidation of downtrend from 0.9777 is underway. Range trading between 0.9406 and 0.9529 would likely be seen in a couple of days. As long as 0.9529 resistance holds, another fall could be expected after consolidation and a breakdown below 0.9406 will signal resumption of downtrend.

USDCHF Analysis. No changed in our view, USDCHF remains in downtrend from 0.8276.

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