Review Commodity-Linked Currencies by GoLearn Forex

AUD, NZD, CAD

Commodity Linked Currencies:

Most majors have been range bound for the last month and some even longer then that. If you play support and resistance then your entries points are relatively defined.  However, what do you trade when handles are in between S & R?

The first assessments a trader should make are what currencies have recently retraced the most and why.  Secondly a trader needs to assess current market conditions.  Let’s apply these 2 rules.  Through last week, the Commodity Linked Currencies were down the most versus the Greenback.  The reason these pairs were down was due impart to Oil losing some momentum and a firming of the Dollar on risk aversion.

A brief assessment of current market conditions has the Dollar on its heels and Oil moving higher.  Additionally, EUR & GBP are currently near resistance levels so unless one thinks the EUR or GBP will finally break resistance one will need to look elsewhere for the best trade.

INSERT CHART OIL

The AUD, NZD, and CAD are among the Commodity Linked Currencies.  These pairs are currently the furthest away from resistance and therefore have the best risk to reward ratio. Couple that with a weak Dollar and overall strong commodity prices and you expect these pairs will move the most. Chart A above displays the movement in the price of Oil against the AUD, NZD and CAD. From this Chart you can see the positive correlation in price action.  As Oil appreciates so do these currencies and vice versa.

The bar chart below displays percent gainers and loser against the Dollar for November 23^rd.  You will notice that the NZD, AUD and CAD are in the top 4. Add this analysis to your repertoire and it provides another venue for trading in these market conditions.

INSERT BAR CHART

When Will the Gold “Bubble” Burst by GoLearn Forex

Positive economic data released today pushed Global Equity Markets higher once again.  In Canada, a better than expected print on Retails Sales moved the CAD higher as well as month over month figures that published at 1%.   In addition, last month’s print was revised upwards as well.

In the U.S., Existing Home Sales month over month came in at 10.1% versus expectations of 2.3%. The DJIA moved ahead 132.71 points to 10,450.95 marking a high for year.  All of this was bad news for the Greenback as the DXY dropped to 75.125.  The CAD was the big gainer against the Dollar, up 1.4%.

Gold continues to make new highs striking 1,174 before settling back to close at 1,165.20, a $14.60 gain for the day.  Some analyst are concerned about Gold’s appreciation and see it as the next asset bubble to crash, however, other say the move is justifiable and that higher Gold’s price will prevail.  Oil clawed its way back from a recent lull to hit an intra-day high of 79.92, before closing the day at 77.68

Economic data releases due out tomorrow include GDP in the EUR zone as well as in the U.S.  Case Schiller Home Price Index will print tomorrow as well as the U.S Consumer Confidence numbers.  Today’s Home Sales print and the prior day’s Retail Sales figures in the U.S beat expectations. This may dampen the effects that the U.S Consumer Confidence figures and Case Schiller Price Index have.  Normally these can be market movers but sales figures right now are in the driver’s seat.

Upcoming Forex Events for November 24, 2009

EUR German Ifo Business Climate Index Forecast  92.50  Previous  91.90

USD GDP (QoQ)  Forecast    3.00%  Previous  3.50%

USD FOMC Meeting Minutes

AUD Construction Work Done (QoQ) Forecast  0.10%  Previous  -0.10%

Analysis by http://www.golearnforex.net

GBPUSD – A Closer Look by GoLearn Forex

GBP/USD:

Range bound trading continues.  It is especially obvious when MA is moving horizontal.  Notice on the daily Cable chart below that the 50 SMA has been horizontal since late July while the 100 SMA turned horizontal in late September.  The 100 SMA is above 50 SMA which is typical of a falling price environment. Additionally, the last time a complete candle appeared below the 50 SMA price fell an additional 4.54%.

INSERT CHART

If you have been trading support and resistance then you have been very successful recently. The yellow rectangular area indicates upper level resistance. Those who trade pure reversals would look to make short entries there.

Point “A” defined our first high in the range.  We make Point “A” the first level of resistance, R1.  Points “B” & “C”encroach but never breach R1.  These would become Reversal Trades 1 & 2.  Point “D” breaches R1 before retracing. Points “E”, “F” and “G” look similar to  “A”, “B”, and “C”.  Point “H” breaks resistance before retracing its gains.

For Points “B, C, E, F, and G” if you were trading straight S&R you would have fared very nicely.  However, for Points “D & H” indicated by the red arches you would have mostly likely been stopped out before picking up the reversal.

With proper risk controls traders will minimize their max loss on every position.  A forex trader cannot expect to win on every trade so choosing the best trades and entry points is essential.  With the use of Candle patterns, Momentum indicators and Oscillators a trader can time the entry where the lull in momentum begins (blue vertical lines) which may signal a reversal.  The Chart below uses the MACD with a histogram to demonstrate falling momentum. The histogram more clearly reveals the convergence of the MACD with the Average.  If you wait for 3 full bars with lower highs (red arrows) to form and ensure that price is still at the point of resistance you can avoid tripping a stop loss and possibly end up in another winning forex trade.

INSERT CHART B

Closing in on Official Shopping Season by GoLearn Forex

The DJIA was flat Friday closing the day down just 14.28 points.  The week saw the DJIA gain 9/10^th of a percent while most Global Equity Markets finished the week in negative territory.  The Greenback gained as risk was held in check as the DXY closed above 75.57 in the forex market, for the first time since November 12^th.

The Kiwi was the big loser, giving up 3.2% and the cable gave up 1.84% after breaking through near term resistance.  The week was marked by global concern over whether the market can sustain their phenomenal 62% gain since the DJIA hit its March lows.  Adding to investors worries will be the lack of liquidity in the market through the remainder of the year.

Monday and Tuesday maybe volatile in the Forex Markets as the U.S has Holiday on Thursday.  Typically and the preceding Wednesday and following Friday are marked by very light volume days.  Friday kicks off the official Holiday shopping season.  On the economic data front Canadian Retail Sales are set to print on Monday and PMI in the EUR zone is due out as well.  U.S Existing Home Sales will print tomorrow and expect that traders will be watching this closely in light of the poorer than expected new home data that came out last week.  A print below expectations should pull even more risk off the table and we would expect the Dollar to strengthen.

Upcoming Forex Events for November 23, 2009

EUR  ECB President Trichet Speaks

CAD  Core Retail Sales (MoM)  Forecast  0.40%  Previous  0.50%

CAD Retail Sales (MoM)  Forecast  0.60%  Previous  0.80%

USD Existing Home Sales  Forecast  5.70M  Previous  5.57M

Analysis by http://www.golearnforex.net

Global Equity Markets All Mixed Up by GoLearn Forex

Global Equity Markets were mixed across the board yesterday.  In the U.S, the DJIA recovered most of its losses after losing nearly 100 points following the poorer than expect housing data numbers.  Housing Starts came in at 529k versus expectations of 600k.  Building Permits printed at 552k versus expectations of 580k.  The housing market was the first in the U.S economy to show signs of a bottom.  Fear of further weakness sent the equity markets on a roller coaster ride.

Additionally, CPI came in slightly higher than expected, however, not high enough to draw much concern at this time.  Gold still continues to make new highs after touching an intraday high of 1,152 before closing at 1,144.30. Oil continues to hold firm just under $80 a barrel.  In the Agriculture space, Corn, Wheat, and Soybeans gave up some of their gains from earlier in the week.

The Dollar Index continued to hold firm at just above 75.  The Pound was the big loser on the day giving up nearly a half a percent to the Greenback while the EUR gained almost 6/10^th of a percent.  Currencies continue to hold at pivotal levels as momentum to break key Support and Resistance levels has been inconsistent.

Thursday will have a few key data releases that the markets will be watching.  In the U.K, Retails Sales are set to print.  Traders will pay special attention to this release as they look for Global consistency in consumer spending.  In the U.S, Continuing Claims will be published.  Investors want to know on a week by week basis are thing looking up in the labor markets.  In the U.S and Canada, Leading Indicators will print. We will have to see how the markets react following yesterday’s CPI data.

Upcoming Forex Events for November 18, 2009

GBP Retail Sales (MoM) Forecast  0.60%  Previous  0.00%

USD Initial Jobless Claims Forecast  502.00K  Previous  502.00K

EUR ECB President Trichet Speaks

JPY Interest Rate Decision Forecast  0.10%  Previous  0.10%

You need Forex Training – Here’s Why.

Non professional forex traders often take the plunge into trading forex before taking the time to learn forex and equipping themselves with the knowledge necessary to find success.  Forex trading is business and not like approaching a roulette table and putting everything on red.  Without proper preparation however, many amateur forex traders find themselves in the same sticky situation as a risk-loving gambler at the roulette table.  That is why proper forex training is imperative for attaining lasting achievement in the forex market.

There are a plethora of options for those seeking forex training, however finding the one that is most suitable to you and your training needs may not be simple.  There are a few criteria that a forex training program should offer in order to fully reap the education necessary to truly learn forex.  We will share with you what you should look for in a training program.

There are two kinds of analysis that each trader should implement into his or her daily updates before opening a trade.  A decent forex training program should teach you both the fundamental and technical aspects of trading forex.  Fundamental reports show all of the outside factors that can affect the market, such as politics, economic announcements and many others.  Technical aspects revolve primarily around the interpretation of the data that can assist traders in accurately predicting future trades.  If one of these elements is missing in a forex training program then you should pass as it is not complete.

Along with understanding the different reports available for forex trading, there are a few other aspects that you should take into serious consideration.  Traders must learn money management.  If a trader’s personal finances are in disarray you can’t expect to make intelligent, thought out trading decisions that are free from an emotional connection. Emotional balance is also pertinent for forex trade.  You need a training program that teaches you how to separate emotion from trading and to maintain self-control.

Once you have found the forex educational program that can train you with the necessary skills, then you need to decipher which trading system is the best fit for you.  Find a reputable system and do your research.  Don’t just rely on ads you see online or on the television, find out what other traders are saying about the quality and consistency of each trading system.

Deciding to trade in forex is a lucrative decision that is available to everyone.  Don’t fall into the common pitfalls of many traders, and take the time to educate yourself and prepare for the forex journey ahead.

Analysis by http://www.golearnforex.net