Forex Go!

Sorry for the lack of posts recently. My long standing illness has been getting me down recently. Anyway I have two guest posts that you may find useful. The first one is entitled Using Fundamental And Technical Analysis In Trading and is featured below, whilst the second one will be posted tomorrow. I hope you find them useful.

Fundamental analysis remains an essential part of formulating trading strategies for the majority of traders, regardless of whether its stocks, shares or commodities. The subject of fundamental analysis is incredibly broad with a wealth of information available to the novice and expert trader alike.

Generally speaking fundamental analysis will be used for trading stocks and shares, but where short-term trading strategies are prominent, such as FX trading, technical analysis will often be favoured. Of course, using a hybrid of both fundamental and technical analysis will ensure both bases are being covered and can often be the best approach for trading.

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Allowing Greece to leave the Eurozone will be painful but its like cutting off an arm with gangrene – it just needs to be done to save the euro. In the short term, it will be painful and packed with uncertainty but in the long run, it will make the euro a healthier and more attractive currency. However in the meantime, we still have to keep a close eye on the developments to see how everything will play out. Samaras was unable to form a new government and now its Tsiparas’ turn. Most likely Tsiparas will fail as well in which case PASOK may give it a shot. At the end of day, a second general election will probably need be called in June. Between now and then, loan disbursements and austerity program implementation will suffer and the EUR/USD will remain under pressure. Read more…

The South African rand advanced against the US dollar today after three day of losses as the euro gained versus the greenback on hopes that European lawmakers would approve an increase of the bailout fund.

European finance ministers meet in Copenhagen today to discuss whether to boost the rescue fund. The euro gained against the dollar, helping the rand in the process. Additionally, the European Union is one of the major trading partners of South Africa, therefore its economic health affects the rand strongly. Earlier, a report showed that borrowing of South African consumers grew 7.9 percent in February, following the increase by 7.3 percent in January.

USD/ZAR fell from 7.7110 to 7.6600 as of 10:31 GMT today.

If you have any questions, comments or opinions regarding the South African Rand, feel free to post them using the commentary form below.

Its been a very quiet week this week because I only managed to find one decent trading opportunity overall. There were no trades according to my 4 hour trading system (see right for more details) because the price generally moved against the trend on the FTSE and the GBP/USD and EUR/USD pairs. The only trade I did find was a breakout trade on Tuesday morning.

The overnight trading range (between 00.00 and 08.00 UK time) for the GBP/USD pair was just 44 points so when the price finally broke below this range at around 08.55, I went short at 1.5401.

I then closed the position for 20 points profit a short while after. The S1 level, which is often a good exit point was a little too far away for my liking (around 50 points below my entry point), but as it turned out the price did actually hit this target.

Not to worry though. A 20 point profit for the week is better than no profit at all, and certainly better than losing money. Plus the stock market rally has meant that a lot of my long term holdings have gone up nicely, and I even banked a 150 point profit going long on Vedanta earlier in the week.

So it wasnt a bad week at all.

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If job growth in the U.S. is slowing at a time when growth in China is abating, the recent outperformance of the equity and currency market is not warranted. Slower growth should lead to lower equity values and greater risk aversion. We now understand why Federal Reserve officials have avoided sounding overly optimistic about the outlook for the labor market and the U.S. economy in general. Previously, there were improvements in economic data but the recent deterioration means their sustainability have come into question. With jobless claims falling short of expectations at a time when regional manufacturing reports are deteriorating and housing demand is slowing, there is plenty of evidence that the recovery is losing momentum. Fourth quarter GDP growth was confirmed at 3.0 percent and not revised higher like some economists had expected. Fo Read more…

The Australian dollar was hammered in Asian and early European trade today dropping below the key 1.0500 level on warning from BHP Billiton that a slowdown in Chinese demand for iron ore may lead the company to curb some if its investment projects. BHP Billiton is the world’s largest mining company and its comments shook the market on fears that China’s growth was slowing faster than originally thought.

Earlier in the session the RBA released its minutes which maintained a generally upbeat tone. The RBA  minutes stated that, “Members noted that the past month had seen an improvement in the prospects for the global economy, with European policymakers making progress in addressing the region’s debt and financial problems. Major downside risks were seen to remain, but the probability of a very bad outcome in the near future had receded a little further.” 

The RBA concluded, “On balance, the Board considered that it was appropriate for interest rates to be around their average levels, which was judged to be the case at present. The Board w

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The Australian dollar dropped versus the Japanese yen and fluctuated against the US dollar after reaching the monthly low as the report showed that Australias economic growth slowed last quarter.

Australian gross domestic product rose 0.4 percent in the fourth quarter of 2011, compared to the advance by 0.8 percent in the previous three months and the median forecast of 0.7 percent. Nations current account deficit widened from A$5.8 billion in the third quarter of last year to A$8.4 billion in the fourth quarter. Moreover, economists predict that tomorrows report will show that Australian employment growth slowed and unemployment rate rose.

AUD/USD traded at 1.0566 as of 9:26 GMT today after falling from 1.0554 to 1.0509 the lowest level since January 25. AUD/JPY was at 85.29 followin

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Its been a week of free gifts this week, and I have another one for you today. It is a forex system from Casey Stubbs (from Winners Edge Trading).

This system is based purely on price so you do not need to add lots of fancy indicators to your charts. It appears to be very profitable as well because one trader who has used this system has managed to bank gains of more than 400%.

If you want to get free access to this system, you can do so by clicking on the following link:

We can tell by the price action of the EUR/USD that investors are either scared of being overly short euros or genuinely optimistic that the worst of Greece’s troubles are finally behind us.  It is hard as analysts to understand this sentiment because a credit event for Greece, which is increasingly likely could still wreck havoc on the markets.  However prices do not lie and the EUR/USD is gradually edging higher.  Given the significant amount of short EUR/USD positions in the market, there is no question that fear of a short squeeze has been the main reason for the EUR/USD’s resilience.  Euro rose to its highest levels this year following the German IFO report that showed business confidence rising to its highest level since July.  The EUR started to rally during the early European hours and gained momentum after the German IFO report printed at 109.6 versus a 108.8 forecast.   Un Read more…

Risk FX was mildly higher in early morning European trade, lifted by supportive comments from PBOC governor Zhou and slightly better than expected data from EZ GDP. The EUR/USD recovered the 1.3150 level but remain contained below 1.3200 as traders kept a wary eye on Athens, while AUD/USD  was considerably stronger rising to  1.0775 within striking distance of its  recent highs as risk sentiment proved supportive.

PBOC chief Zhou Xiaochuan pledged that the country’s central bank will increase its holdings of euro-denominated assets. Zh

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