Forex Trading, Forex News, Articles and Trading Strategies

The greenback, as the dollar is often referred to, climbed versus virtually all of the 16 most traded currencies, as unfavorable economic reports worldwide brought risk aversion up among traders this week, favoring the low-yielding safety profile of the North American currency.

Since last week’s employment report in the U.S. showing worse than expected numbers, risk aversion has returned to markets, and this week, multiple news coming from North America, as a report showing a fall in consumer confidence, and globally, as pessimist speculations for several European Union nations, pushed equities markets down globally, reflecting in currency markets movements. The Swiss Franc lost against the dollar as central bank’s President Jean-Pierre Roth said policy makers will continue to buy foreign currencies to stop the national currency rally. The Ruble lost against the dollar after Bank Rossii cut its benchmark interest rates and the crude oil, the main Russian export, fell below $60 a barrel in New york.

Analysts believe that the U.S. dollar may continue bullish as it is hard to expect that extremely optimistic news will revert the current pessimistic trends in currency and equities markets. The dollar’s position as the main world currency may be discussed in the upcoming weeks, which is the only foreseeable factor that can bring the greenback down for the short-term future.

USD/CHF ended the week at 1.0858 climbing from a previous rate of 1.0777. USD/RUB traded at 32.7380 from 31.8580.

If you want to comment on the U.S. dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.

It is a must that we get familiarize with terms that are often used in the Forex trading. Without knowing what they mean, we actually get lost in this major money making method. So here are few important key forex terms which I think every forex trader must be aware of.

PIP

The increment in the currency value is called a PIP. If EUR/USD move from 1.8889 to 1.8890 it is one pip. The Pip is how you measure your profit or loss. It is calculated in different way for a currency pair with USD as its base currency and for a pair in which USD is not the base currency.

Do not worry, we need not calculate this pip value, the brokers will do it for us automatically.

LOT

An important term. The standard lot size is $100,000 and the size of a mini lot is $10,000. We always buy and sell in lots. For example if you buy 1 lot of USD/CHF at 1.5000, it means,

USD/CHF at an exchange rate of 1.4555
(.0001 / 1.5000) x $100,000 = $6.6 per pip

here, 0.0001 is the minimum change in currency value i.e. the PIP
1.5000 is t he exchange rate and
100,000 is the lot we buy or sell.

The broker will calculate this for us.

LEVERAGE

It is possible to trade large money in forex with very little amount. This is made possible by what is called leverage. For example, you start an account with a broker for $1000 and the broker is offering a 100:1 leverage meaning you can trade 100 times your money i.e. with $1000 you can trade 1 lot of $100,000 of Forex money.

As luring as it might seem. It has high risks involved too. The more the leverage the more the profit but do not forget that it is also more the loss.

BID PRICE

Bid price is the price at which the market is ready to buy the currency pair. This is the price for which you can sell your base currency. For example,if GBP/USD 1.7500/05, the bid price is 1.7500. This means you sell one British pound for 1.7500 U.S. dollars.

ASK PRICE

Ask price is the price at which the market is ready to sell the currency pair. This is the price for which you can buy your base currency. For example,if GBP/USD 1.7500/05, the ask price is 1.7505. This means you buy one British pound for 1.7505 U.S. dollars.

SPREAD

Spread is the difference between Bid and Ask price. This is mostly where the broker gets his money. For example if EUR/USD is 1.5800/05, then the spread is 5 pips.

CROSS CURRENCY

The currency pairs in which neither the base nor the quote currency is USD. For example, EUR/GBP. Buying EUR/GBP riggers two trades involving USD. i.e. it is equivalent to buying EUR/USD and selling a GBP/USD. These involve high transaction cost and has higher risks involved.

MARGIN CALL

Margin call is given by your brokers. The broker notifies you that your margin deposits have fallen below the required minimum level. This is when we will not have opportunity to trade further unless we deposit further.

This is all I can think right now. If you want to know more about any listed term or anyother term please let me know.

Now that we know the basics of Forex trading, the next step would be trading the currencies. It is highly recommended to trade using demo accounts for atleast 6 months before you go live. It gives an opportunity for you to get familiarized with the trading methods and strategies. Trading Forex is not an easy task. It requires a lot of hard work and patience. Do not hurry and open a live account. It may lead to a very bad experience.


Photo by: epicharmus

Which is the Ideal time to open a forex account?

It depends. Few may feel confident enough to open an account within 2 months. But if you ask is it the correct time? I may say No. It is YOU who have to decide. Just think.

- Am I ready to bear the loss?

- If I do a mistake, Am I in a position to accept it? (both mentally and financially)

- Do I have the right Forex broker?

- Do I have the required knowledge and experience?

These are few questions you must ask yourself before opening a live account.

Choosing the Right Broker:

Even if we have enough experience and knowledge, the broker we choose plays an important role in our trading life. Be sure that you have chosen the right broker before trading live. Have a look at how to choose the forex broker who is right for you.

Before going live with the broker, do trade with their demo account.

Few Forex brokers who offer Demo account

There are many brokers. Choose your broker wisely. I would suggest you to open demo accounts with 3 different brokers and compare your broker's feature and choose the best for you.

Each broker has a different software and they provide online training on how to trade forex with their software. Most of the forex tutorials they provide are easy to understand. It is upto you to choose the right broker.

My question to you:

When do you think is the right time to open a live forex account? Do share your views so that all can be benefited.

Forex brokers play a major role in our forex trading. A Forex broker is an individual or a company which buys and sells orders according to the trader's(your) decisions. Choosing the right forex broker could be a daunting task. It kind of decides our fate with forex trading.

This Forex world is yet another place where we can find 'n' number of scams. This mainly includes forex brokers. There are many people who have lost money because of trusting wrong Forex brokers. It could be overwhelming for you as there are thousands of forex brokers providing similar services. How can you choose the right forex broker? There are few basic needs that a forex broker must satisfy in order to be considered.


Is the Forex Broker regulated?

This is the first thing you should check about a broker. In the United States, a broker should be registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC) and a NFA member. The CFTC and NFA protects the public against fraud, manipulation, and abusive trade practices.

You can verify the broker information at NFA's website.

How is the forex broker's Customer Service?

This is very important because at times we will get doubts and questions on using the broker's services. We must be sure that the customer service is highly satisfactory. Check if they have

- 24 hour customer support
- many options of contacting them (phone,e-mail,chat etc)
- representatives with Good knowledge about Forex
- timely and prompt response
- courtesy towards the customers

Be sure to choose the right one as it your hard earned money that you are giving to the Forex Brokers.

The Forex Trading Software

Another key factor. Most of the brokers provide online forex trading and for this an exclusive software is required. Make sure that you are clear in using the software and also feel very comfortable with the software.

- You must be able to get all the required information (current account balance with realized and unrealized profit and loss, margin available, and any margin locked in open positions) in the main screen of the software.

- Make sure that you have the ability to view real-time currency exchange rate quotes.
It is better to have a demo account first. Study the and then go live with them.

Leverage,Currency Pairs,Trading hours,transaction cost etc
Make sure you are able to trade all the major currency pairs and most of the minor currency pairs. Know more about the currency pair and how to read them.


Check if the broker offers various Leverage options. Though there are many options, 100:1 is the best for standard account and 200:1 is the best for Mini account. As said before, Leverage can make or break you. So be careful, more leverage more money and even more risk.


Check if the broker is available during the active trading hours.


Instant automatic execution of your trade is a must. Check if the broker is providing this service. If not, he is out of the list right away as this is the most important factor.


Check if we can open an trading account for a minimum amount. The ideal amount for a beginner would be anywhere between $300 to $500. As a new trader, I would strongly suggest you not to invest more unless you are sure of your trading strategy.


Check if the broker offers low spread values. Lower the spread, more the saving for you.


Check if the transaction costs and rollover charges are reasonable.

Forex broker's review

Also check the current reviews of the forex broker from the internet. Also you can find a lot of help from forex forumns. Ask people how they rate their forex brokers. The pros and cons and then decide which one is the best for you.


These are some of the basic requirements that your broker must satisfy. in order to be chosen. I would strongly suggest you to first get a demo account from 2 or 3 brokers, about whom you have already done the background checks. Trade with them using the demo account. Call their customer service and ask silly doubts and check how they are handling you. Finally choose the one who you feel is the best for you.


Choose your broker wisely. Choose a forex broker who is suitable for your needs and not because someone asked you to. Do your ground work properly and carefully. Forex is a place where you are the boss and you have all rights to hire or fire a forex broker. Your money. Decide wisely.

As a Forex newbie, I had a lot of questions about currency pairs. How to read currency pairs, when to trade which currency pairs etc. Reading forex books and articles, I could get a clear view of when to trade which currency pair. This is a very important factor as this determines our immediate Profit or Loss in Day trading.

Most of us will have a specific time which is comfortable for us to trade currencies. If we are wise enough we would be trading the correct Pair for that time. This is determined by many key factors.

I have consolidated the information to make it easy and handy for us.

Time: 7.00 PM EST - 4.00 AM EST
Best currency pairs to trade :

USD/JPY
AUD/USD
GBP/CHF
NZD/USD
GBP/JPY

Currency Pairs to avoid:

EUR/USD
EUR/CHF
EUR/GBP


Time: 8.00 AM EST - 5.00 PM EST
Best currency pairs to trade :

GBP/USD
GBP/JPY
USD/CHF
GBP/CHF


Currency Pairs to avoid:

EUR/GBP
EUR/CHF


Time: 2.00 AM EST - 12.00 AM EST
Best currency pairs to trade :

EUR/USD
USD/CAD
GBP/USD
USD/CHF
GBP/CHF


Currency Pairs to avoid:

JPY based currency


The market is highly active between 8.00AM EST and 12.00PM EST.

The market is at its slowest between 2.00AM EST and 4.00 AM EST.

Do you have any strategy for trading any currency pair at a given time?

This is the basic step in currency/forex trading. We deal with a lot of currencies here and reading the currency pairs wrongly would cost a lot of money. In forex trading, currency is always stated in pairs. For example, EUR/USD, USD/JPY etc. It is because we will be buying a currency and simultaneously selling the other.

Let us take an example and learn more in detail. The value is just an example and in real time the USD/JPY pair has a different value.

USD/JPY = 1.4500

The currency before the '/' is called the 'Base Currency' and the second currency is called the 'quote currency'. In our example, USD is the base currency and JPY is the quote currency.

When buying, the exchange rate indicates how much we have to pay in units of the quote currency to buy one unit of the base currency. In our example, we have to pay 1.4500 JPY(Japanese Yen) to buy 1 USD(US dollar).

When selling, the exchange indicates how much of the quote currency we get for selling one unit of the base currency. In our example, we will get 1.4500 JPY(Japanese Yen) when we sell 1 USD(US dollar).

It always means that you are buying the base currency and simultaneously selling the quote currency.

When to buy and Sell the Base currency?
We buy the base currency when we think it will increase (appreciate) relative to the quote currency.

We sell the base currency when we think it will decrease (depreciate) relative to the quote currency.

For example, we will buy USD/JPY if we are sure that the exchange rate for USD will increase relative to the JPY.

What is Long and Short w.r.t Forex trading?
It is very simple, Long=Buy and Short =sell.

'Going long' in forex means you are buying the base currency and selling the quote currency which is nothing but 'buying' the currency pair.

'Going Short' in forex means you are selling the base currency and buying the quote currency which is nothing but 'selling' the currency pair.

Technical analysis is nothing but analyzing the market with the help of charts. More calculation than speculation. As already mentioned, analyzing the market before placing any trade is a must for trading currency wisely. While fundamental analysis is more to do with the economic news, technical analysis is more of trends.

If you are smart enough to find a trend analyzing the charts, you would be placing profitable trades. It takes a lot of practice in identifying a "trend". To do that we must know the basics of charts. There are totally 3 types of charts.

1. Line chart
2. Bar Chart
3. Candlestick chart

Out of these three, the candlestick charts convey more information and is very easy to read and interpret. It helps the beginners to understand the market better.

Line Chart:
A line chart simple draws a line from one closing price to another closing price. It is like joining dots and making a graph. You can see the price movement of a currency pair through this chart. Here is an example of EUR/USD Line chart.



Bar Chart:
A bar chart gives more details like when the trade was opened, when it was closed, the high and low of the currency pair for that particular period. These charts are better to analyze, as we get almost all the required details. Here is an example of EUR/USD bar chart.



The basic bar chart interpretation :



Here,

Open: The horizontal line on the left is the opening price
High: The top of the vertical line defines the highest price of the time period
Low: The bottom of the vertical line defines the lowest price of the time period
Close: The horizontal line on the right is the closing price

Candlestick charts:
The most favorite charts of forex experts/traders. It gives the same information as that of a bar chart but in a more readable form. This makes a trader's life easy. Just by looking at the graph we will be able figure out the market's condition and hopefully a trend which will be our major goal in chart analysis. Here is an example of EUR/USD candlestick chart.



The basic Candlestick chart interpretation:



Here,

Open,close,high,low means the same as bar chart. However, the green color indicates that the market went bullish for that period and red color indicates that the market went bearish for that period. As of now just remember this. I will be writing more in detail about bullish and bearish markets.

Support and Resistance are key players in Forex trading. Identifying support and resistance would be our first step towards our Technical analysis. There are different ways a support and resistance line could be placed. Each trader may differ in their own analysis but the basic concept is the same.



Support Lines:
Support lines are horizontal lines drawn in a chart where the market has been at its lowest. It is believed that if the market again reaches the support line, a reversal in trend would happen.

There are times when the market has broken the support lines. We must be careful at these times as they might mislead sometimes. If a support line is broken for sure, then the trend will continue the same way.


Resistance Lines:
Resistance lines are horizontal lines drawn in a chart where the market has been at its highest. It is believed that if the market again reaches the resistance line, a reversal in trend would happen.

Similarly, resistance lines could be broken and if they are then the trend will continue.

Market trend decides if we have placed a profitable trade. Identifying the trend is very important in technical analysis. The two major terms that we will use very often in currency trading is Bullish and Bearish. It is very important to know the meaning of these terms and not to get confused.

What is a Bullish Market?

In simple words, a market where buyers are more than sellers. A bull market tends to be associated with increasing investor confidence, motivating investors to buy in anticipation of future price increases and future capital gains. During a bull market, it is suggested to buy currency pairs.

What is a Bearish Market?

In simple words, a market where sellers are more than buyers.While there’s no agreed-upon definition of a bear market, one generally accepted measure is a price decline of 20% or more over at least a two-month period.During a bear market, it is suggested to sell currency pairs.

Bullish or Bearish - Which is best to trade?

Both are good. Always go with the trend. It is very important to play along with the trend to place profitable trades. Mostly trends are determined with the help of technical analysis i.e. charts. It depends on which type of chart you are using to analyze the market. For example, you may use a 30 min chart to analyze and find that the market is bullish. However, if you analyze using a day chart, it might show that the market is bearish. So, when you decide on placing trades the important information you should be clear with are,

1. Which type of charts Am I going to use for trading?
2. Am I going to trade for long period or short period?

Why trading period and chart play an important role in placing profitable trades?
For example, you are trading the 30 min chart of EUR/USD and after doing immense analysis you find that the market is bullish and buy EUR/USD. After say 8 hours you come and see that you are on a loss. Why? you did the analysis correctly and what happened suddenly?

If you check the 4 hour chart for the same day, it might have given you a different idea. The 4 hour chart could have indicated that the market is bearish. Which means if you had traded EUR/USD using 30 min chart and waited for long hours the analysis could go against you. It is always better if you can trade with the chart. If you had closed the trade within 1 hour, you would have ended up with profits. I hope I made my point here. If this explanation is not clear please feel free to buzz me ask!

It is always suggested that you trade longer period chart, a min of 1 hour chart so that you get a clear idea of the market on that particular day.

Conclusion:

- Always go with the trend.

- Analyze longer period chart for a better analysis.

- Buy currency pair when the market is bullish.

- Sell currency Pair when the market is bearish.

The Canadian currency ended its sixth week of losses against its U.S. counterpart as commodities and stocks dropped moved by concerns that the global slump will be longer and deeper than previously predicted.

The Canadian currency, one of the most linked to stock and commodity prices, lost against the greenback this week as the crude oil dropped the most since January, and considering that raw materials account for more than 50 percent of the Canadian exports, the loonie outlook was directly affected by this bearish sentiment in commodities markets. A report during the week added pessimism for the Canadian economy forecasts, as unemployment numbers rose more than expected in June.

USD/CAD ended the week being traded at 1.1619 from a rate of 1.1675 in the beginning of the week.

If you want to comment on the Canadian dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.

The Chilean peso hit the weakest level in three weeks as the national central bank slashed the benchmark interest rates to a record low for the South American country.

The Chilean central bank set the national interest rates to a record low of 0.5 percent, from a previous level of 0.75, in order to stimulate the emergent South American economy which has also suffered the consequences of the global slump. The copper, one of the main Chilean commodity exports, has also declined adding pessimism for the Chilean currency outlook. The peso, which was one of the best performing traded currencies in the first quarter, posted a weekly loss as risk aversion is back among traders.

USD/CLP closed the week at 551.15 from a previous rate of 548.75.

If you want to comment on the Chilean peso’s recent action or have any questions regarding this currency, please, feel free to reply below.

The yen had one of the best performing days this week as rising concerns that the global slump will be longer than previously expected plagued markets worldwide with high levels of risk aversion, bringing investors to bet on the safety of the Japanese currency.

The yen rose against the greenback after U.S. Vice President Joe Biden affirmed that government measures to stimulate the economy may take up to 18 months to work, immediately raising insecurity and confusion regarding the future of the North American economy. The Japanese currency rose the most versus the euro, as several events added to the bearish sentiment for the European common currency, including speculations that more than 10 Eastern European nations will need loans from the International Monetary Fund to stabilize their economies,

mostly in critical budget conditions. The yen also gained sharply versus the South African rand, one of the most high-yielding currencies, which lost intensively since last week’s U.S. jobs report.

Currency specialists affirm that the yen’s rally may continue for the next weeks, as last year’s credit crunch memories are still very vivid among traders, pushing market downs on any signs that the expected economic recovery won’t happen anytime soon, which is favorable for the yen, since it is the safest bet for times of confusion and pessimism.

USD/JPY traded at 92.66 as of 10:41 GMT being rather stable after bottoming at 91.77. EUR/JPY declined to 128.61 from 130.15 in the intraday.

If you want to comment on the Japanese yen’s recent action or have any questions regarding this currency, please, feel free to reply below.

The euro is posting its worst weekly performance against the yen in two months and losing against several major currencies as more than 10 Eastern European nations will need loans to rescue their economies from the rising recession in the region.

The Eurozone currency weakened against virtually all of the 16 most traded currencies after an article posted in the German newspaper Handelsblatt affirmed that the International Monetary Fund would be already discussing aid plans for at least 10 Eastern European nations, including EU members like Bulgaria and Balkan nations like Croatia and Macedonia. The German newspaper stated that the situation is more delicate in countries like Belarus, Romania and Latvia, being the

latter facing the worst recession among all European Union country members. The yen climbed this week helped by a growing risk aversion, which attracted investors to its safer profile, making the Euro to face one of its most negative weeks versus the yen since the beginning of the year.

Investors were led to sell euro priced assets this week as risk aversion is rising on markets due to concerns regarding the world recession duration. The negative speculations on Eastern Europe economic health has led traders to sell the euro this week and search for safety in currencies like the yen and the U.S. dollar.

EUR/JPY fell trading at 129.05 as of 9:40 GMT from 130.15 in the intraday. EUR/USD remained bearish being traded at 1.3911 from 1.3952.

If you want to comment on the Euro’s recent action or have any questions regarding this currency, please, feel free to reply below.

The Polish zloty, which have severely devalued versus the Eurozone currency when the global slump struck Europe last year, rose today as Polish government affirmed that the euro entry process may start this year for the Eastern European Nation.
The Polish Finance Minister Jacek Rostowski stated today in an interview given to Gazeta Prawna that the zloty may be stable enough during this year’s second semester to start the euro admission process, immediately reflecting on the Polish

currency price, which also rallied supported by a rebound in risk appetite this Thursday, making investors to purchase high-yielding currencies like the Australian dollar and the Brazilian real.

EUR/PLN traded at 4.3503 falling from a previous rate of 4.4242.

If you want to comment on the Polish zloty’s recent action or have any questions regarding this currency, please, feel free to reply below.

The Brazilian high-yielding currency, declined for almost a week as concerns regarding the global rose, but today it rebounded as commodities rallied, spurring demand for the South American country’s currency.
The Brazilian real had favorable news that supported the currency to post its first gains versus all majors in a week, as car sales in China rose the most since 2006,

fueling demand for high-yielding assets. Metallic commodities rebounded today, mainly the copper, after Alcoa Inc. posted smaller losses than forecasts, indicating that demand for commodities may be recovering, a sign that can be interpreted as a global recession easing indication.

USD/BRL traded at 1.9910 as of 19:29 GMT from a previous rate of 2.0175 in the intraday chart.

If you want to comment on the Brazilian real’s recent action or have any questions regarding this currency, please, feel free to reply below.

The Australian currency rose against the yen from a seven-week low after a report yesterday indicated that unemployment figures in Australia rose less than forecast, spurring demand for the Aussie, which had lost against all majors since last week’s risk aversion wave.

After losing more than 3 percent yesterday versus the yen and the greenback, the Australian dollar initiated a rebound influenced by domestic and international news. A report yesterday in Australia showed better-than-expected unemployment numbers, which even if still on the rise, did not match rather grim speculations from economic analysts, helping the Aussie to gain. The International Monetary Fund stated yesterday that 2010 global economic growth will be higher than

previously suggested, stopping low-yielding currencies like the yen to continue its rally, and finally bringing investors back to higher-yielding positions like Aussie-priced assets, as commodity prices also rebounded slightly this Thursday.

Analysts indicated that fundamental factors, even if not optimal served as an excuse for traders to profit, selling the overpriced Japanese currency and opting back for higher-yielding positions in stock markets and in currencies like the Australian dollar and its Canadian counterpart, which rebounded after severe losses during the past days. The Australian may continue to rebound if positive news, even if slight ones, help risk appetite to rise once again.

AUD/JPY traded at 72.82 as of 11:51 GMT after bottoming at 70.87 hours earlier. AUD/USD followed the same movement, being traded at 0.7838 from 0.7717.

If you want to comment on the Australian dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.

The Japanese yen, which was rallying intensively against all majors after a wave of risk aversion struck markets last week, dropped today as Japanese importers sold the currency led by speculations that after this week’s rally, the yen would be overpriced.

The yen lost today versus all 16 most traded currencies after a Japanese government official affirmed that the current volatility and extreme valuation of the national currency would be unfavorable, stopping immediately the yen’s rally, as investors speculate that the Japanese government may eventually intervene to control further gains of the Asian currency. After speculations appeared last week that the global slump would be deeper and longer, yesterday, the International

Monetary Fund predicted a revised global growth for 2010, with rather optimistic figures, encouraging traders to return to higher-yielding options in stocks and in the currency market, consequently damping demand for refuge currencies like the yen and the greenback.

Currency analysts point on charts that the yen’s rally was haste and sharp, and even if being supported by fundamental factors, a correction is a natural consequence after an intense climb. Тhe speculations regarding importers selling the yen to profit also added to the yen’s rally to ease and post the first day of losses since last week’s U.S. jobs report.

USD/JPY rose to 93.22 as of 10:31 GMT after hitting 91.75 the lowest price in four months. GBP/JPY followed, trading at 150.88 from 146.65.

If you want to comment on the Japanese yen’s recent action or have any questions regarding this currency, please, feel free to reply below.

The Canadian dollar slashed its previous gains as the crude oil fell for a sixth day in a row, on concerns that a longer global slump will damp demand for energy in the U.S., the main destination for Canada’s commodity exportation.
The Canadian currency reached a seven-week low against its U.S. counterpart as its attractiveness declined significantly on concerns that the global slump will be longer than expected, provoking a new wave of pessimism which brought investors to safer positions in the currency market, being the yen, this week’s best performing option so far. The crude oil, Canada’s main export to the

U.S. was traded at near $60 in New York, the lowest level since May 26.

USD/CAD traded at 1.1663 as of 23:44 GMT after peaking at 1.1720 in today’s session and remaining stable in the intraday comparison.

If you want to comment on the Canadian dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.

Chile, one of the world biggest copper exporters, is witnessing its currency to fall against all majors as the price of the metallic commodity declined due to a new wave of pessimism, which may decrease demand for metals.
The Chilean peso posted crescent gains until last week, as optimism and a Chilean central bank dollar selling program caused the currency to rally against the euro and the greenback. After a negative U.S. jobs report last week, the Chilean currency had the biggest loss since April, as a new wave of pessimism concerning the global slump caused risk aversion to rise, making stocks and commodities like the copper,

one of the main Chilean exports to fall, reflecting negatively on the South American currency.

USD/CLP traded at 546.70 as of 22:50 GMT, rising from a previous rate of 541.40.

If you want to comment on the Chilean peso’s recent action or have any questions regarding this currency, please, feel free to reply below.

GBP/USD and USD/YEN made the contrarian massive downward move.the yen crosses were hammered big.EURO and AUD also relatively underwent the drop when there is no specific trigger has been given as excuse for the drop and that too when BOE interest rate decision is for tomorrow.
This implies, the players made all the drops to induce heavy long liquidation form traders teading with our stop or hedging to change the sentiment tomorrow .
it is wise to wait for the rise to take short positions in EURO ans GBP.
the players are expected to firm up towards close as they normally donot make hat tricks.
Hope they follow their own rules.

Thanks
Netwise

Russia, the world’s leading energy supplier and main oil exporter to Europe, has witnessed a considerable drop in its currency as the crude oil prices is reaching almost a week of declines, as concerns regarding the global slump may slash energy demand for the next months.

The Russian Ruble has been affected directly by the latest fall in the crude oil rates, which after rallying as the global economy showed several signs of recovery, faced yesterday the longest streak since December, losing more than 1 percent and reaching a rate of $61.99 a barrel in New York, the lowest price in two months, weighing negatively on the ruble, which is extremely linked to commodity prices due

to the vast natural resources availability in the Russian country. Bank Rossii regulates the price of the ruble in a band to prevent exporters to lose competitiveness in global markets, and after last week’s speculations that measures would be taken to prevent ruble gains, oddly enough the ruble went down thanks to international pessimism.

Analysts suggest that the new wave of pessimism, if continued, will affected not only the ruble but also Russian stock markets, which are mainly moved by the national energy companies. If the recession will be prolonged in Europe, the demand for oil will falter, affecting the Russian currency andeconomy in multiple sectors.

USD/RUB climbed to 31.8007 from 31.552 in the intraday comparison, being the fourth session in a row of gains for the greenback versus the ruble.

If you want to comment on the Russian Ruble’s recent action or have any questions regarding this currency, please, feel free to reply below.

The Australian dollar, one of the main high-yielding currencies among the 16 most traded, has been witnessed a sharp decline since last week’s new wave of pessimism struck equities and commodities markets.

Since last week the Aussie entered a significant downtrend mainly against the yen and the greenback after a U.S. employment report indicated more-than-expected job cuts in the North American nation, suggesting that the global slump will still be the main world financial scenario for an undetermined period of time. The Australian dollar is down for almost a week as stock markets have been bearish for almost a week, and tomorrow, an Australian jobs

report is likely to show that the unemployment reached the highest level in six years, adding to the already negative outlook for the Australian currency. The Aussie high-yielding profile lost attractiveness as investors look for safety purchasing assets mostly priced in U.S. dollar or in yen.

Economists affirm that a combination of two individual factors weigh negatively on the Aussie’s outlook, the new wave of optimism, and tomorrow’s jobs report, which is likely to come negative. The Australian dollar has climbed significantly as the global economy showed signs of recovery, but as the global slump insists to affect markets, we will be likely to see a weakening Aussie for the next weeks.

AUD/USD fell to 0.7849 as of 8:53 GMT from a previous price of 0.7955. AUD/JPY traded at 73.92 from 75.77.

If you want to comment on the Australian dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.

The yen is this week’s best bet among traders, as speculations that a weak U.S. corporate earnings to be posted this week made Japanese investors to sell overseas assets and repatriate their capital to the Asian nation.
After negative news last week that brought risk aversion up in world markets, this Tuesday events provided support for the yen to gain even further, as pessimist

statements in the U.K., regarding the countries financial sector health, and speculations that U.S. corporate earnings will be weaker than previously expected spurred attractiveness for the yen’s safety profile, making Japanese investors to repatriate their capital an bringing traders that were opting to higher-yielding assets to purchase yen priced ones, in order to protect their options from bearish market days.

GBP/JPY fell to 152.85 as of 20:47 GMT from a previous rate of 155.25.

If you want to comment on the Japanese yen’s recent action or have any questions regarding this currency, please, feel free to reply below.

The Canadian currency, one of the most linked to stocks and commodities prices, had a weak performance today as stocks in Toronto and the crude oil fell, as concerns that the global slump will be prolonged are on the rise.
The loonie declined today against half of the 16 most traded currencies as the crude oil continued to fall, on concerns that a longer recession will not provide a strong demand for energy in North America and in the global

scenario. After a report last week regarding a weaker-than-expected U.S. jobs data, equities markets around the world went down, speculating that the recession will continue further, affecting currencies like the Canadian dollar, since a significant amount of traders are opting for the safety of its U.S. counterpart.

USD/CAD traded at 1.1658 rising from 1.1587 in the intraday comparison.

If you want to comment on the Canadian dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.

A tepid recovery is expected by year-end in the United States and in Europe, as unemployment remains high and consumes slow. The U.S. dollar has found important support lines at current levels. A rebound is possible over the short term, although the longer term picture should remain bearish.

U.S.: Unemployment is now the big challenge

The economic recovery is unfolding tepidly in the United States, albeit some improvements are expected by year end, as the government¡¦s program of about USD 1 billion to support the auto industry will be fully operative. Nevertheless, the large contraction in consumes would again increase savings, about 7% of the disposable income in May, while the jobless rate could stay near the highs for the first part of 2010. In June, payroll employment declined 467,000 (-370,000 expected) from May¡¦s down move of -322,000 and April¡¦s -519,000. As a result the unemployment rate rose to 9.50% from 9.40% the previous month. The decline covered most of the sectors with the goods producing industry loosing 223,000 jobs and the service industry giving up 244,000 positions. The average hourly earning dropped to 2.7% in June from 3.0% in May. The data was just a confirmation of the June ADP employment report, based upon private sector numbers from 500,000 firms, which showed a loss of 473,000 jobs (-400,000 expected) from May¡¦s ¡V 485,000 and April -518,000.

The pound entered its fourth day of losses against the dollar and the euro, after British financial sector calls Bank of England to expand its asset purchasing program to revive the faltering economy in the United Kingdom.

The British Chambers of Commerce stated yesterday that the already expected economic recovery in Great Britain is not guaranteed and further measures should be taken immediately by the Bank of England, reflecting on the national stock exchange market and currency, the latter losing against virtually all major pairs, mainly to the U.S. dollar,

the yen, and the Swiss Franc. According to the group’s call for the asset-purchasing program expansion, the Bank of England should extend the current program to 150 billion pounds and eventually ask permission to go further, considering the U.K.’s contracting economy needs. Factory production unexpectedly fell in May, adding to the already negative outlook for the pound sterling.

The quantitative easing measures asked by the British Chambers of Commerce may revive Great Britain’s economy, but on the currency point of view, the speculations regarding this fact already weigh on the pound, and if the measures continue further, it’s considerably possible that the pound will bottom against the euro and the U.S. dollar, yet, negative news in these markets make it hard to predict what direction the pairs will follow.

GBP/USD traded at 1.6225 as of 10:36 GMT rising from 1.6125 in the intraday, but still in a very low level considering last week’s rate around 1.6400. GBP/JPY remained stable at 154.53 after several days operating negatively.

If you want to comment on the Great Britain pound’s recent action or have any questions regarding this currency, please, feel free to reply below.

he euro, which until last week was rallying against currencies like the greenback and the yen, started this week losing versus virtually all majors, after speculations that European Union officials will reaffirm that the recession is far from being over.

The euro entered a downtrend since last Friday when concerns rose amid traders that the global slump is still very vivid and further measures will eventually be taken by the European Central Bank in order to stimulate the bloc’s economy. The Luxembourg Finance Minster Jean-Claude Juncker stated this Monday at an Eurozone member countries meeting in Brussels that the Europe is still passing through the crisis, sparking immediate speculations in markets regarding the future of European economies, resulting in a negative day in equities and currencies markets throughout the old continent. The euro lost the most against the yen, being the latter often associated as a refuge when risk aversion climbs.

An unanimous opinion among traders and economists stress on the fact the European Central Bank policy makers aren’t confident in a fast economic recovery in the bloc, which will certainly lead to further measures to be taken in Brussels to stimulate the contracting financial scenario in most of Eurozone countries. If risk aversion continues to climb, we will be likely to see a significant bearish outlook for the euro.

EUR/USD traded at 1.3924 as of 8:57 GMT after bottoming at 1.3875 yesterday and from an week opening price of 1.3975. EUR/JPY followed, trading at 132.55 from an opening price this week of 133.80.

If you want to comment on the Euro’s recent action or have any questions regarding this currency, please, feel free to reply below.

The South African rand, which was the best performing currency in the first quarter among the 16 most traded currencies, thanks to a wave of risk appetite, fell for the third day in a row, as pessimism increases risk aversion, damping demand for high-yielding emergent markets currencies.

After a wave of international negative news that affected the South African currency last week, the rand started this session with a downgraded outlook

as a report today indicated that real estate prices declined the most in 13 years the last month, and speculations that in July 9 a report will show a manufacturing contraction in May, damping demand for the South African currency, which until last week, had posted more than 20 percent gains versus the U.S. Dollar this year.

USD/ZAR traded at 8.0145 as of 19:17 GMT rising from a previous rate of 7.9214.

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The Mexican currency and stocks went down this Monday after the confirmation that President Calderon’s party lost midterm elections, raising concerns that reforms needed to stimulate the Mexican economy will not be implemented.

Mexican President Felipe Calderon’s party lost congressional seats in the latest elections, affecting Mexican stocks and the peso immediately, since the opposition is not likely to allow needed tax increases to stabilize Mexico’s budget,

adding pessimism to the Mexican financial outlook. According to economists, after the elections favoring the Institutional Revolutionary Party, opposed to President’s National Action Party, Mexican credit rating is likely to be cut, and the attractiveness of the peso will decrease in international markets.

USD/MXN traded at 13.2485 as of 19:01 GMT rising from 13.2245.

If you want to comment on the Mexican peso’s recent action or have any questions regarding this currency, please, feel free to reply below.

The yen, the most attractive currency in times of uncertainty, started this week climbing against the dollar and the euro, as pessimistic reports last week led to speculations that the economic recovery will falter, raising risk aversion levels among traders.

Markets opened with a certain degree of pessimism this week, as several news suggested that there may be still a long way for a world economic recovery to occur. Russian President Dmitry Medvedev and French Finance Minister Christine Lagarde made individual remarks on the fact that the world main currencies are not fulfilling correctly international trade needs and foreign exchange should be regulated in an alternative way, forcing the greenback down against the yen. In Europe, IKB Deutsche Industriebank AG posted 580 million euros losses in the fiscal year ending in March 31, reaffirming speculations that the European banking system is still facing major problems, consequently bringing the Eurozone currency down.

After a risk appetite spree unleashed in April as the world posted its first signs of economic rebound, now a new scenario has been built, as further evidences that the economy is rebounding failed to appear, being that a very favorable factor for the yen, according to currency specialists. As long as markets remain concerned with the global slump, the yen will climb.

USD/JPY fell to 95.29 as of 11:12 GMT from an opening price of 95.85. EUR/JPY followed, trading at 132.49 from 133.95.

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Speculations that the Bank of England will take further measures to stimulate the national economy brought pessimism to British markets, setting the pound down against currencies like the euro, dollar and the yen.

The London Stock Exchange started this week negatively, as forecasts indicate that British companies will continue to post weak results for the following month, adding to the already present pessimism in world markets, initiated by a U.S. employment report last week that was interpreted as an evidence of a longer-than-expected period of recession for the United States, and consequentially, in a world scale. The Sunday Times affirmed that the Bank of England may increase its program of asset purchase by $40 billion, as an attempt to rescue Great Britain’s faltering economy, but consequently affecting British bonds and currency outlook.

Economists are certain that the pound short term future will be bearish, as markets are getting more nervous concerning an economic recovery that has been already delayed. British currency specialists indicate that virtually nothing can provide support for the British currency, GDP numbers show a deep contraction on the way, policy makers are constantly trying to rescue British financial system, the global outlook decreases attractiveness for pound assets priced, and finally the growing risk aversion is likely to set the pound further down for the following weeks.

GBP/USD fell and traded at 1.6112 as of 11:56 GMT from an opening price of 1.6315. EUR/GBP rose to 0.8620 from 0.8557.

If you want to comment on the Great Britain pound’s recent action or have any questions regarding this currency, please, feel free to reply below.

Every currency traded in Forex is influenced by the conditions in its country of origin, and the external relations that affect its value. Economic Indicators (GDP growth, import/export trade accounts), social factors (unemployment rate, real estate market conditions) and the country’s central bank policy are the factors that determine the currency value in the Forex market. Each one of the six major currencies has its particularities, and we are going to analyze the fundamentals that drive the currencies individually.

The U.S. dollar (USD) is the most traded currency in the Forex market. It is also used as a measure to evaluate other currencies and commodities. The reserves in USD are by far the largest being held by different nations, and they compose 64% of the world reserves. Globally speaking, the fundamentals that drive the U. S. Dollar are several. Since the largest amount of metallic commodities and the oil are mostly traded with prices in USD, significant demand variations in these markets will reflect directly on the currency value, as it happened in 2008 with the EUR/USD reaching 1.60, being the oil price a big contributor for this event. In the domestic market, the biggest factor that has been moving the dollar are the industry indicators and the real estate boom, and both were caused by an unsustainable credit system which could not be paid, causing a domino effect in the United States economy, and consequently, worldwide. During the last few years, the USD has been losing ground for other currencies, thanks to the credit bubble, and erroneous social policies, but it will still remain as one of the most powerful currencies for an undetermined period of time.

The euro (EUR) is by far the newest currency traded among the major pairs traded on Forex markets. It is used by 16 European Union member countries and it tends to enlarge during the next few years. The fundamental factors that move the Euro are often based on the strongest economies using the new common currency, such as: France, Italy and mainly Germany. The countries’ indicators regarding export trade, inflation and unemployment rate tend to have a high impact on the EUR movements, considering that countries such as Germany are larger exporters of manufactures and technology. Europe still remains an energy dependant from the Russian gas and the Middle Eastern Oil, making higher demands for these commodities to have a negative reflect on the European Union common currency.

The pound sterling (GBP) is the national currency of the United Kingdom, and the fundamental factors that move it are as complex and variable as the British economy and its global influence. The London commodity market plays a fundamental role in the GBP trends, being a reference for oil and gold trading. Nevertheless, as a powerful and globally dynamic economy, the United Kingdom indicators, social situation and the housing sector are perhaps the main determinant factors for the GBP price. Lately, the British economy has faced inflation issues, which led the interest rates to be cut, industrial recession, and other domestic factors that made the trading movements to naturally flow from the GBP towards other strong economically backed currencies, such as the EUR.

The Japanese yen (JPY) is the strongest and by far the most traded currency in the Asian market. Japan’s economy is mainly orientated to the industrial production exportation, and the economic situation of its main commercial partner, the USA, tends to have a direct influence on the JPY market. The JPY is a low-yield currency, being the GBP/JPY the most volatile pair traded on Forex, usually the scalper’s favorite one.

Switzerland is a small country located in the European Alps, yet, its strong international trade and money influx, made the Swiss franc (CHF), one of the main currencies traded on Forex. The CHF is often preferred by low yield investors. In times of financial instability, such as for the last years with the USD, many traders choose the CHF as a safe investment. The CHF trends can be often compared to those of the gold, increasing their value while other markets’ tends to depreciate during economic downturns.

The Canadian Dollar (CAD) faces a similar situation with the other commodity currencies, being majorly an export-dependable. Most of the Canadian production is exported to the USA. Facing the very same credit bubble problem that dragged America into recession, Canada has to deal also with a decreasing demand for all commodities. The CAD usually correlates positively with the prices for the all commodities.

The British currency is heading for the firstly weekly decline against the dollar in a month, after a report released today indicated a less significant service sector growth for the month of June.

The pound had a negative week overall as the British economy contracted beyond expectations in the first quarter, making it to lose ground against the euro, and versus the dollar, as the optimism towards the nation’s economy, which helped the pound to rise more than 10 percent since January against the greenback, failed to continue, as the facts indicate a deep and prolonged recession to follow for the United Kingdom. Adding to the current bearish scenario for the pound sterling, this Thursday, Bank of England policy maker David Miles affirmed that the U.K. banking sector remains in a very delicate situation, leaving space for speculations that difficult moments will continue to be frequent in the British financial system, shunning investors away of pound-priced assets.

A common opinion among traders leads to the fact that there is no more support for the pound to remain bullish against the dollar and the euro. After multiple negative domestic reports and news in the U.K., now, raising tensions regarding the global slump are pushing investors away from British assets, and the quarterly economic numbers are likely to maintain the pound down in the short term.

GBP/USD slid to 1.6314 as of 12:20 GMT from 1.6357 in the intraday. EUR/GBP raised to 0.8577 from 0.8535.

If you want to comment on the Great Britain pound’s recent action or have any questions regarding this currency, please, feel free to reply below.

The dollar ended this week posting gains versus all 6 major currencies, as another wave of pessimism caused by grim reports in U.S. and U.K. spurred demand for the safety of the greenback.

Commodity linked currencies like the Australian dollar, and emergent-markets currencies like the South Korean won posted significant losses against the greenback, after a report in U.S. indicated more-than-expect job cuts, inflating risk aversion among traders, who immediately sold high-yielding assets to purchase assets priced in dollar, which are more reliable in times of uncertainty. Even the yen, which is often associated as a refuge currency during times of crisis failed to end the week positively against the U.S. dollar, as speculations in Japan this week suggested that the country may invest 10 percent of its public pension-reserve funds in high-yielding assets, damping demand for the safety of the yen.

Currency strategists affirm that this kind of reaction in markets was expected in case the employment figures in U.S. failed to rebound, fears that the global slump might be prolonged for an undetermined amount of time were already significant, and negative data like this week’s U.S. report indicating further job cuts rose risk aversion to high levels among traders, which were investing massively in high-yielding currencies, betting in a quick global economic recovery.

USD/KRW ended the week at 1265.90 from a opening weekly price of 1233.04. USD/JPY followed the same trend ending the week at 96.02 from 95.35. AUD/USD fell to 0.7967 from 0.8015.

If you want to comment on the U.S. dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.

After testing the 96.10 resistance during Friday's trading session, USD/JPy has fallen quickly since the early Asian session, around 100 pips from 96.10 to post 95.14 in the early European session. Currently the pair is trading around 95.15/25, 0.90% below today's opening price action

Rajoo C, analyst at Precise Trader, comments: "USDJPY closed @ 9605 which was marginally above the open. Today is the first trading day after the US Holiday and the Non Farm Payroll on last Thursday. The Hourly Oscillators are bearish and price is below the MA, so the bulls must be Sidelined. Hourly Trend is Sideways Down and Daily Trend is Sideways, so expect the price make lower lows towards 9485 level. While the Equities are weak expect this market to come down. The patterns are pointing lower and any pull back while 9630 level holds would be a good shorting opportunity for a fast trade. We prefer to look to Short Cautiously while 9630 level holds or strictly trade only at our levels."

The dollar stuck to narrow ranges against major counterparts in Asian trading Monday, losing ground to the yen but edging higher against the euro, as investors squared positions ahead of this week's Group of Eight meeting.

The dollar was buying 95.25 yen, down from 95.91 yen in late European trade on Friday. U.S. markets were closed Friday for the Independence Day holiday.

The euro traded at $1.3950, down from $1.3997 late Friday.

The dollar index (DXY), a measure of the greenback against a trade-weighted basket of six major currencies, traded at 80.420, down from 80.519 late Friday.

A senior official in the Indian government has joined the growing chorus questioning the U.S. dollar's unofficial position as global reserve currency, according a weekend report.

Suresh Tendulkar, chairman of the Prime Minister's Economic Advisory Council, said he's urging India to diversify its foreign-exchange reserves and hold fewer dollars, Bloomberg News reported Saturday.

The rhetoric towards the dollar's international status comes as leaders of the world's leading economies ready to meet in Italy for the G8 Summit 2009, which will be held from July 8 to July 10. The leaders of Canada, France, Germany, Italy, Japan, Russia, U.K. and U.S. will gather in L'Aquila, and discussions of ways to improve international finance are on the agenda.

Representatives from China, India, Brazil, Mexico, South Africa and Egypt will also be present at the meeting.

"The drumbeat of dollar doubts continues ahead of this week's G8 meeting in Italy," wrote currency analysts at Brown Brothers Harriman.

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The Sterling is falling strongly against Dollar in the early European morning and the pair has fallen around 200 pips in the last two hours from 1.6330 to trade close to 1.6130 and to post 3-week low at 1.6135. Currently the pair is falling 1.15% so far today from opening price to the current 1.6140/50

Tim Salem, comments: "Bearish Hourly Sentiment with Price finds a slight Reversal of the 20SMA/200SMA Hourly Bearish Cross with the 20SMA providing Dynamic Resistance Confluence at the 1.6353 Daily Pivot Area. Also in a “tight” Range, Price is caught between the 1.6275 Daily Static Support, and the 1.6353 Daily Pivot. RSI Readings and Slope of “47” also see Neutrality as of Writing-Time, although Appreciation through the 1.6401 and the 1.6431 Resistance Confluence with the 200SMA may see some subtle Bullish Sentiment if the Areas can Hold. Support levels: 1.6305 1.6275 1.6246 1.6204. Resistance levels: 1.6353 1.6401 1.6431 1.6479."