CURRENCY TRADING SUMMARY – 19th June 2008 (00:30GMT)

US dollar down as credit crisis hits regional banks.


U.S. Dollar Trading (USD) with little economic data out yesterday markets were driven by equities and commodities. US stocks were down again as focus switched to the regional banking troubles hit by mortgage delinquencies. The Dow Jones touched below 12000 for the first time in 3 months. US crude inventories showed a decline of 1.2 million barrels and combined with dollar weakness sent oil higher again. In the US share markets, the NASDAQ was down 28 points (1.14%) and the Dow Jones was down 131 points (1.08%). Crude Oil closed up $2.29 ending the New York session at $136.20 per barrel. Looking ahead, weekly jobless claims forecasted at 375K. June Philly Fed is also released expected rebound from May’s -15 to -10 this month.


The Euro (EUR) continued to pivot the 1.5500 level as new a direction waits to be established. The Euro bounced off day lows as Oil popped higher. Further gains were tempered by newly elected Italian Prime Minister Berlusconi comment “It is unfortunate that the ECB has done nothing to stop hyperinflation of Euro”. Overall the EUR/USD traded with a low of 1.5463 and a high of 1.5538 before closing the day at 1.5528 in the New York session.


The Japanese Yen (JPY) stock market weakness failed to provide support as continued high Oil and yield differentials weighed. EUR/JPY made new multi-month highs briefly trading above 168. Overall the USDJPY traded with a low of 107.72 and a high of 108.44 before closing the day around 107.85 in the New York session. BoJ Governor Shirakawa is scheduled to speak.


The Sterling (GBP) continued to trade heavy as the BoE minutes came in 8-1 with the lone dissenter pressing for a rate cut. The Cable was lifted off lows from a higher than expected CBI Industrial Trends Orders came in stronger at +1 vs. market expectations of -12. Late day USD weakness also provided support. Governor King commented that Q2 is expected to slow considerably, further delaying any rate rises. Overall the GBP/USD traded with a low of 1.9480 and a high of 1.9610 before closing the day at 1.9597 in the New York session. Looking ahead, May Retail Sales expected to come in at -0.1% up from last months -0.2%.


The Australian Dollar (AUD) was helped to day highs as commodities bounced on general USD weakness. AUS/JPY made new multi month highs above 102. Overall the AUD/USD traded with a low of .9403 and a high .9472 before closing the day at .9469.


Gold (XAU) bounced as oil and risk sentiment started to creep into the market. Questions about the US Fed’s willingness to raise rates have improved Gold’s position as an inflation hedge. Overall trading with a low of USD$880.80 and high of USD$895.60 ending the New York session at USD$894 an ounce.


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Euro – 1.5575
Initial support at 1.5461 (June 17 low) followed by 1.5303 (June 13 low). Initial resistance is now located 1.5552 (Jun 17 High) at followed by 1.5587 (Jun 12 high).


Yen – 107.65
Initial support is located at 106.8 (June 12 low) followed by 106.24 (Jun 10 low). Initial resistance is now at 108.61 (Feb 14 high) followed by 108.98 (Jan 14 high).


Pound – 1.9600
Initial support at 1.9472 (June 17 low) followed by 1.9410 (Jun 13 low). Initial resistance is now at 1.9612 (Jun 18 high) followed by 1.9698 (June 10 high)


Australian Dollar – 0.9455
Initial support at 0.9304 (50% retracement of the .8953 to 0.9655 advance) followed by 0.9291 (May 15 low). Initial resistance is now at 0.9491 (Jun 12 high) followed by 0.9527 (Jun 10 high).


Gold – 894
Initial support at 858 (Jun 12 low) followed by 850 (Psychological Number). Initial resistance is now at 895.7 (June 16 high) followed by 900 (round number).


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FOREX TRADING SUMMARY

FOREX Daily Outlook from Easy-Forex

RBA hike as the BoC cuts. XAU tumbles on profit taking.



U.S. Dollar Trading (USD) was mixed versus a number of majors yesterday tracking data and rate outcomes of other central banks for a change. In events specific to the US market, Fed Chairman Ben Bernanke urged lenders to expand mortgage write-downs for borrowers whose home values have declined and said that more must be done to cease foreclosures.

While, "efforts by both government and private-sector entities to reduce unnecessary foreclosures are helping, but more can, and should, be done." Also, Bernanke sees "delinquencies and foreclosures likely will continue to rise for a while longer." In U.S. share markets the NASDAQ was slightly higher by 1.68 points (+0.07%) whilst the Dow Jones was down by 45.10 point (-0.37%). Crude oil fell by US$2.60 a barrel to US$99.85 mainly on profit taking. Looking ahead, Services ISM will be key to the market today whilst ADP employment often considered a preview to the Non Farm Payrolls data on Friday is also scheduled for release today.

The Euro (EUR) was once again range bound, trading higher during the day despite the Euro zone policy makers pressuring Washington to do more to halt the dollar's decline. On the data front Eurozone PPI data came in on expectations of 0.8% for the month of January. Overall the EURUSD traded with a low of 1.5174 and a high of 1.5250 before closing the day at 1.5210 in the New York session. PMI Services and Retail Sales are key figures for the EZ on Wednesday with forecast at 52.3 and 0.4% respectively.

The Japanese Yen (JPY) strengthened against the dollar, as investors' concern over the US slipping into recession prompted carry trade to be fled. The Currency gained for a sixth straight day, approaching a three-year high, as stocks fell on speculation banks will have to write off more mortgage-related debt on the back of Bernanke’s prompt during his speech. Overall the USDJPY traded with a low of 102.65 and a high of 103.57 before closing the day at 103.32 in the New York session.

The Sterling (GBP) strengthened against the dollar even after a private report showed construction, which accounts for 6 % of Britain's economy, grew at its slowest pace in February. Traders pared bets on how far the BoE will cut interest rates this year which also added to the pound gain. Overall the GBPUSD traded with a low of 1.9827 and a high of 1.9892 before closing the day at 1.9862 in the New York session.

The Australian Dollar (AUD) had a data filled day first with Retail Sales figures for the month of January coming in unchanged from the previous at 0.0%. The Aussie Dollar sell off was limited ahead of the much anticipated RBA rate announcement in which board decided to lift the cash rate to 7.25% (25 basis point hike), the highest level in 12 years.

Nonetheless the AUD did suffer on the back of tentative comments in which policy makers noted “some moderation in household demand is beginning to occur” in which “the extent of the moderation was uncertain.

In other news the current account deficit widened to a record $19.4 billion from it previously revised $16.4 billion. Overall the AUDUSD traded with a low of 0.9220 and a high of 0.9371 before closing the day at 0.9274 in the New York session. Looking ahead, key data in the form of Quarter Four GDP is out on Wednesday morning, with expectation at a decline to 0.8%/3.9% from the previous 1%/4.3%.

The Canadian Dollar (CAD) fell to the lowest in more than a week after the central bank reduced the benchmark interest rate a half-percentage point and signaled it probably will cut again to help the economy cope with a slowdown in the U.S. Overall the USDCAD traded with a low of 0.9854 and a high of 0.9978 before closing the day at 0.9950 in the New York session.

Gold (XAU) fell sharply on profit taking having traded at record highs the previous session. XAU traded with a high of 987.50 and a low of 959.35.

___________________________________

Euro – 1.5200
Initial support at 1.5074 (Feb 28 low) followed by 1.4971 (Feb 27 low). Initial resistance is now located at 1.5275 (Mar 3 high) followed by 1.5304 (1.4311 plus 0.618 of 1.3361 to 1.4967).

Yen – 103.30
Initial support is located at 102.61 (Mar 3 low) followed by 101.67 (Jan 1995 reaction low). Initial resistance is now at 104.97 (Jan 23 high) followed by 105.39 (Feb 29 high)

Pound – 1.9845
Initial support at 1.9763 (Feb 28 low) followed by 1.9644 (Feb 22 low). Initial resistance is now at 1.9975 (Feb 27 high) followed by 2.0000 (Round Number)

Australian Dollar – 0.9375
Initial support a 0.9122 (38.2% retracement of the 0.8513 to 0.9499 advance) followed by 0.9006 (50.0% retracement of the 0.8513 to 0.9499 advance). Initial resistance is now at 0.9499 (Feb 28 high) followed by 0.9555 (Open + Last week range * 1.618)

Gold – 976.10
Initial support at 953.48 (Feb 28 low) followed by 949.00 (Feb 27 low). Initial resistance is now at 988.15 (Mar 4 high) followed by 1000.00 (Round Number)

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US Dollar trades at fresh record lows!

CURRENCY TRADING SUMMARY – 04 MARCH 2008

U.S. Dollar Trading (USD) was subject to an extremely volatile session on Monday trading at fresh record lows versus a number of majors, before pairing those losses. The initial moves against the dollar were largely attributed to traders adding to bets that the Federal Reserve will look to cut rates by 50 bps on March 18. On the data front, ISM manufacturing came in slightly better then expectations at 48.3 (Forecast: 48). In U.S. share markets, the NASDAQ was up by 7.93 points (+0.09%) whilst the Dow Jones fell slightly by -7.49 points (-0.06%). Crude oil rose by US$0.56 a barrel to US$102.40, having earlier hit a record high of US$103.95. Looking ahead, Fed Chairman Ben Bernanke is scheduled to talk on mortgage foreclosures at 1400 GMT.

The Euro (EUR) traded at a fresh record high during the session, before comments made by Luxembourg Prime and Finance Minister Jean Claude Juncker said he was becoming “increasingly concerned” about the Euro’s recent rally, which ceased any further upside moves. Overall the EURUSD traded with a low of 1.5158 and a high of 1.5275 before closing the day at 1.5205 in the New York session. Looking ahead, key growth data in the form of GDP is scheduled for release on Tuesday as well as PPI figures for the fourth quarter and the month of January respectively.

The Japanese Yen (JPY) traded at it strongest level in 3 year versus the USD, breaking below key 103.00 levels. Fear of recession in the US sent Asian stock markets lower which prompt carry trade unwinding and boosted the Yen. Overall the USDJPY traded with a low of 102.62 and a high of 103.70 before closing the day at 103.21 in the New York session.

The Sterling (GBP) was range bound trading sideways for much of the session, GBPUSD traded with a low of 1.9810 and a high of 1.9935 before closing the day at 1.9846 in the New York session.

The Australian Dollar (AUD) rose from for Asian session lows, as major Asian equity markets heading into the red ensured the AUD remained pressured as a high yielding currency. Overall the AUDUSD traded with a low of 0.9300 and a high of 0.9420 before closing the day at 0.9397 in the New York session. Looking ahead, Retail Sales for the month of January are released today whilst the RBA is widely expected to increase rates by 0.25%, leaving the borrowing rate at 7.25%. UPDATE: Aussie Retail Sales for the month of January seen well below expectations of 0.0% (Forecast: 0.4%; Prior: 0.5%)

Gold (XAU) rose to new records but later gave back its intra-day gains, as US recession and surging oil price above 103 continue to boost the metal serving as inflation hedge. XAU traded with a low of 975.65 and a high of 989.35

__________________

Euro – 1.5200
Initial support at 1.5074 (Feb 28 low) followed by 1.4971 (Feb 27 low). Initial resistance is now located at 1.5275 (Mar 3 high) followed by 1.5304 (1.4311 plus 0.618 of 1.3361 to 1.4967).

Yen – 103.30
Initial support is located at 102.61 (Mar 3 low) followed by 101.67 (Jan 1995 reaction low). Initial resistance is now at 104.97 (Jan 23 high) followed by 105.59 (Feb 29 high)

Pound – 1.9845
Initial support at 1.9763 (Feb 28 low) followed by 1.9644 (Feb 22 low). Initial resistance is now at 1.9975 (Feb 27 high) followed by 2.0000 (Round Number)

Australian Dollar – 0.9375
Initial support a 0.9266 (23.6% retracement of the 0.8513 to 0.9499 advance) followed by 0.9122 (38.2% retracement of the 0.8513 to 0.9499 advance). Initial resistance is now at 0.9499 (Feb 28 high) followed by 0.9555 (Open + Last week range * 1.618)

Gold – 976.10
Initial support at 953.48 (Feb 28 low) followed by 949.00 (Feb 27 low). Initial resistance is now at 985.00 (Mar 3 high and bull channel resistance) followed by 1000.00 (Round Number)

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Forex Weekly Outlook & Review

Last week’s currency trading review

A week filled with rate announcements.

The Dollar suffered from pessimistic comments made by Chairman Bernanke and Vice-Chairman Kohn throughout the week, indicating that recession fears would persuade the Federal Reserve to cut rates further. As a result, the dollar traded at record lows against a number of currencies and commodities.

Data out of the U.S. also did little to provide any added confidence to the greenback with consumer confidence at 16 year lows to end the week, whilst GDP grew at its slowest pace since 2002. The Euro traded at a record high shooting through the psychological 1.50 barrier to trade as high of 1.5238.

The Euro was also supported by data in the form of German IFO which indicated that business sentiment remained positive in the region. The Euro closed last week at 1.5184 having opened at 1.4804. The Japanese Yen ended the week at fresh three year highs versus the USD as risk aversion in the later part of the week prompted a wide cross Yen sell off.

The Japanese Yen began the week at 107.37 before ending at 103.88. The GBP continued to under perform due to the fallout from the ongoing credit crisis and on expectations of further rate cuts from BoE, although was able to take advantage of a broadly weaker US dollar.

The Sterling Pound closed lat week at 1.9886 having opened at 1.9588. The AUD also posted fresh 24 year highs of 0.9499 on surging commodity prices and ongoing expectations the RBA will look to increase interest rates on the 4th of March.

The Aussie dollar however gave up much of its gains as plunging equity markets prompted a wide spread carry trade sell off. The Aussie Dollar closed last week at 0.9323 having opened at 0.9210. The New Zealand dollar also posted 23 year high during the week of 0.8213.


The forex trading week preview

In the States; data this week is expected to continue to signal a U.S. recession, Manufacturing ISM on Monday, and Services ISM on Wednesday. Pending Home sales and initial jobless claims on Thursday, whilst the much anticipated Non Farm Payrolls heads a heavy data for the first Friday of the month, followed by Unemployment Rate. With his comments having such a drastic impact on the markets last week, Fed Vice Chairman Kohn is once again speaking on Friday.

In the Eurozone; PMI Manufacturing and CPI figures on Monday will start the proceedings for a busy week out of the EZ. Whilst GDP, Retail Sales and PMI Services continue the theme into Wednesday. However that would be overshadowed by the ECB interest rate announcement on Thursday, and as always Trichet post press conference. In the UK; The BoE meets on Thursday and no change is expected. On the data calendar this week the main focus should be the manufacturing and services PMI’s released on Monday and Wednesday respectively.

In Japan; should continue to track equity markets and hope to benefit from risk aversion. The BoJ meets on Friday followed by the BoJ monthly report.

In Australia; the RBA meets on Tuesday where it is widely expected to hike by 25 bps in order to curb inflation. Whilst Retail Sales, Current Account (both Tuesday) and GDP (Wednesday) prove to be the key pieces of economic data. Further more several RBA officials are scheduled to speak throughout the week adding to the interest. Neighboring New Zealand is also scheduled for a rate announcement this week on Thursday morning although largely expected to hold.

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Euro – 1.5200
Initial support at 1.5074 (Feb 28 low) followed by 1.4971 (Feb 27 low). Initial resistance is now located at 1.5239 (Feb 29 high) followed by 1.5304 (1.4311 plus 0.618 of 1.3361 to 1.4967).

Yen – 103.05
Initial support is located at 103.36 (Feb 2005 low) followed by 101.67 (Jan 1995 reaction low). Initial resistance is now at 105.39 (Feb 29 high) followed by 106.65 (Feb 28 high)

Pound – 1.9840
Initial support at 1.9763 (Feb 28 low) followed by 1.9644 (Feb 22 low). Initial resistance is now at 1.9975 (Feb 27 high) followed by 2.0000 (Round Number)

Australian Dollar – 0.9320
Initial support a 0.9266 (23.6% retracement of the 0.8513 to 0.9499 advance) followed by 0.9122 (38.2% retracement of the 0.8513 to 0.9499 advance). Initial resistance is now at 0.9500 (Round Number) followed by 0.9555 (Open + Last week range * 1.618)

Gold – 976.10
Initial support at 953.48 (Feb 28 low) followed by 949.00 (Feb 27 low). Initial resistance is now at 976.14 (Feb 29 high) followed by 1000.00 (Round Number)

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US Dollar Takes a Beating - FOREX Daily Outlook

USD is battered on Kohn comments and abysmal consumer confidence, pushing Euro, Oil, and NZD to record highs. Ben Bernanke speaks on monetary Policy.

CURRENCY TRADING SUMMARY – 27 FEBRUARY 2008

U.S. Dollar Trading (USD) was battered across the board as reports showed that consumer confidence dropped in the month February 87.3 to 75.0, establishing its lowest level in five years. Consumers remain pessimistic that the world’s largest economy is destined to continue its slowing. The Dollar further suffered on dovish comments made by Fed Vice Chairman Kohn. In his speech today, Donald Kohn said that he did not foresee the current levels of elevated inflation to persist, reaffirming market expectations that the FOMC meeting in march will eventuate in another 50 bps cut. In U.S. share markets the NASDAQ was down 17.51 points (0.75%) whilst the Dow Jones was also up by 114.70 points (0.91%). Crude oil also traded at record high overnight of US$101.23 up US$2.00 a barrel. On Wednesday, heavy data is scheduled with the release of New Home Sales and Durable Goods for the month of Jan. More importantly, Fed Chairman Bernanke is scheduled for his semi-annual address on Monetary Policy, as markets will listen more attentively then usual to see if he echoes Vice Chairman Kohn comment last night or takes an opposing stance.

The Euro (EUR) traded at a fresh record high on Tuesday, following a battered US dollar. In data specific news, the German IFO came in at 104.1, well above the expected 102.8, weakening the case for near-term Euro zone interest rate cuts and easing concerns about the health of the single currencies largest economy. The EURUSD traded low of 1.4779 with a high of 1.4984 before closing the day at 1.4968 in the New York session. Gfk consumer confidence and ECB Weber are the key events on Wednesday. UPDATE: The Euro broke through key 1.50 levels for the first time on the open of the Asian session, Trading at an all time high of 1.5050

The Japanese Yen (JPY) strengthened on a broadly weaker dollar on Wednesday following a significantly concerned Fed Vice-Chairman last night. The USDJPY traded with a low of 107.20 and a high of 108.14 before closing the day at 107.24in the New York session.

The Sterling (GBP) rose against the generally weaker greenback as the market caught up with the Bank of England's view that interest rates will be cut gradually, rather than sharply. Overall the GBPUSD traded with a low of 1.9640 and a high of 1.9874 before closing the day at 1.9858 in the New York session. UK GDP data is released on Wednesday.

The Australian Dollar (AUD) continue gaining against the US dollar and Japanese yen, boosted by increased risk appetite as investors piled into higher yield currencies. Overall the AUDUSD traded with a low of 0.9250 and a high of 0.9335 before closing the day 0.9321 in the New York session. The NZD also traded at a record high early Asian Session trading with a high of 0.8186.

Gold (XAU) surged on a broadly weaker dollar, higher oil prices and appeal as a safe haven investment. XAU traded with a low of 926.40 and a high of 948.50

_________________________________

Euro – 1.4995
Initial support at 1.4778 (Feb 26 low) followed by 1.4702 (Feb 21 low). Initial resistance is now located at 1.5050 (Feb 27 high) followed by 1.5096 (1.4440 plus 1.4311 to 1.967).

Yen – 107.35
Initial support is located at 106.73 (Feb 22 low) followed by 106.35 (Feb 11 low). Initial resistance is now at 108.22 (Feb 25 high) followed by 108.67 (38.2% retracement of the 114.66 to 104.97 decline)

Pound – 1.9865
Initial support at 1.9644 (Feb 26 low) followed by 1.9611 (Feb 22 low). Initial resistance is now at 1.9876 (Feb 26 high) followed by 1.9960 (Jan 30 reaction high)

Australian Dollar – 0.9330
Initial support a 0.9216 (Feb 25 low) followed by 0.9167 (Feb 21 low). Initial resistance is now at 0.9400 (Round Number) followed by 0.9500 (Round Number)

Gold – 951.80
Initial support at 906.1 (Feb 19 low) followed by 896.50 (Feb 7 low). Initial resistance is now at 954.60 (Feb 21 high) followed by 970.73 (Bull channel resistance)

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Dollar continues to ease on rate cut expectations.

CURRENCY TRADING SUMMARY – 25 FEBRUARY 2008


U.S. Dollar Trading (USD) ended the week lower across the board on growing recession fears. In a quiet end to the week in terms of data the greenback eased as traders added to bets that the Federal Reserve will look to cut rates on the 18th of March by as much as 50 bps. In U.S. share markets the NASDAQ was up by 3.57 points (+0.16%) whilst the Dow Jones was also up slightly by 96.72 points (+0.79%). Crude oil edged higher once again, falling short of the $100 target, up by US$0.83 a barrel to US$99.06. Looking ahead, key data is in the form of US Existing Home Sales, with economists forecasting a decline to 4.8 mln for the month of January, from the previous 4.89 mln.

The Euro (EUR) rallied on the back of EURJPY crosses heading to a five week high of 159.58 on Thursday. In what was otherwise a dour session, the EURUSD traded with a low of 1.4786 and a high of 1.4863 before closing the day at 1.4824 in New York. ECB president Trichet is scheduled to testify in front of Parliament on Monday

The Japanese Yen (JPY) traded at a week high versus the USD on the back of easing equity markets. As a result the JPY ceased eight successive session of decline versus the Euro and traded at its strongest level against the USD since Feb 12. Overall the USDJPY traded with a low of 106.69 and a high of 107.57 before closing the day at 106.92 in the New York session.

The Sterling (GBP) strengthened versus the Euro and Dollar on Friday as robust UK retail data the previous session eased expectations about the extent of monetary easing likely from the Bank of England. Overall the GBPUSD traded with a low of 1.9607 and a high of 1.9709 before closing the day at 1.9684 in the New York session.

The Australian Dollar (AUD) failed to break key 92 cent levels for much of the Asian session before heading to a week high of 0.9240 in Europe. Despite profit taking the AUD was able to return its day highs on higher stock prices at the close of New York. Overall the AUDUSD traded with a low of 0.9168 and a high of 0.9252 before ending the day at 0.9252. In Other news neighboring currency the New Zealand Dollar tested record 22 year highs of 0.8109 on Friday trading at a high of 0.8103

The Czech Koruna (CZK) rose to a record against the Euro and posted a fifth weekly gain on speculation the central bank will raise interest rates. Policy makers have raised the rate 1.25 percentage points to 3.75 percent over the past 10 months. “The Czech story is really very positive,” said Nicholas Kennedy, an emerging-market currency strategist at 4Cast Ltd. in London. “Everyone's looking for a reason to pull back but it's not giving them a reason.” It has been the world's best-performing currency against the Euro this year, gaining 6 percent. The Czech currency also advanced to 16.916 per dollar, from 17.168 on Feb. 15. Overall the USDCZK traded with a low of 16.837 and a high of 16.98.

Gold (XAU) fell from a record, as declining energy and commodity prices eased inflation concerns that had spurred demand for the precious metal as a hedge. Despite easing, XAU ended the week up 4.2% overall, the biggest weekly advance since November 2007. XAU traded with a low of 936.20 and a high of 949.40.


Euro – 1.4835
Initial support at 1.4702 (Feb 21 low) followed by 1.4611 (Feb 18 low). Initial resistance is now located at 1.4863 (Feb 22 low) followed by 1.4956 (Feb 1 high).

Yen – 107.20
Initial support is located at 106.73 (Feb 22 low) followed by 106.35 (Feb 11 low). Initial resistance is now at 107.57 (Feb 22 high) followed by 108.67 (38.2% retracement of the 114.66 to 104.97 decline)

Pound – 1.9690
Initial support at 1.9611 (Feb 22 low) followed by 1.9363 (Feb 20 low). Initial resistance is now at 1.9709 (Feb 22 high) followed by 1.9738 (Feb 14 high)

Australian Dollar – 0.9235
Initial support a 0.9113 (Feb 20 low) followed by 0.9005 (Feb 15 low). Initial resistance is now at 0.9252 (Feb 22 high) followed by 0.9331 (Nov 8, 2007 high)

Gold – 944.70
Initial support at 906.1 (Feb 19 low) followed by 896.50 (Feb 7 low). Initial resistance is now at 954.60 (Feb 21 high) followed by 970.73 (Bull channel resistance)

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The Forex Trading Week Preview

I will provide previews and reviews of these data releases in the daily summary tomorrow.


In the States; ongoing recession fears surround the sentiment on the US in the coming week. Key data releases will surround CPI, FOMC minutes, and housing data on Wednesday.

In the Eurozone; much focus placed on Friday’s PMI manufacturing and services data for further indication of the health of the economy and relative interest rate movements. In the UK; the BoE will release its minutes this week on Wednesday, key to further interest rate movements.

In Japan; BoJ minutes on Wednesday, Thursday Trade Balance, and Governor Fukui speaking on Friday will be key Japanese data this week.

In Australia; RBA minutes on Tuesday is the only key piece of data out this week.


Euro – 1.4650
Initial support at 1.4549 (Feb 14 low) followed by 1.4496 (Feb 12 low). Initial resistance is now located at 1.4709 (Feb 15 low) followed by 1.4759 (61.8% retracement of the 1.4956 to 1.4440 decline).

Yen – 108.20
Initial support is located at 107.27 (Feb 15 low) followed by 106.35 (Feb 11 low). Initial resistance is now at 108.67 (38.2% retracement of the 114.66 to 104.97 decline) followed by 109.82 (50% retracement of the 114.66 to 104.97 decline)

Pound – 1.9510
Initial support at 1.9444 (Feb 12 low) followed by 1.9389 (Feb 7 low). Initial resistance is now at 1.9738 (Feb 14 high) followed by 1.9763 (Feb 5 high)

Australian Dollar – 0.9165
Initial support a 0.9005 (Feb 15 low) followed by 0.8954 (Feb 14 low). Initial resistance is now at 0.9191 (76.4% retracement of 0.9400 to 0.8513) followed by 0.9321 (Nov 9 high)

Gold – 906.40
Initial support at 896.50 (Feb 13 low) followed by 885.0 (Feb 7 low). Initial resistance is now at 927.31 (Feb 11 high) followed by 936.80 (Feb 1 trend high)

Gold Hits All Time High!

Gold dipped to $943.00/943.90 an ounce from$944.40/945.20 an ounce late in New York. On Thursday, it rallied to $953.60, its highest level ever, before a sharpdecline in crude oil erased much of the day's gains.

But dealers said the prospect of more rate cuts in the
United States supported gold's appeal as an alternative
investment and kept the upward momentum intact. Bullion has
risen as much as 14.4 percent so far this year. From Reuters



Easy-Forex™ enables its clients to perform DAY-TRADING in gold and silver rates against the US dollar.

The gold symbol is XAU, the silver symbol is XAG.

The price of gold refers to its price per ounce in USD. For example, if the price is 612.97, it means that an ounce of gold is traded for USD 612.97. Similarly, the price of silver as well refers to its price per ounce in USD. For example, if the price is 11.853, it means that an ounce of silver is traded for USD 11.853.

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Trading with gold or silver rates, as with foreign currency rates, is non-delivery trading, which does not require the "physical" purchase or sale of the "commodity".

Easy-Forex™ clients and traders, who wish to perform Day-Trading with gold or silver rates, will regard the gold (XAU) and silver (XAG) just as they treat any other foreign currency, however – the trade is done only against the US dollar (USD).

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Dollar-euro currency exchange - The Fall of the Dollar

This article provides an overview of the factors affecting the leading currency pair: euro-dollar exchange, commonly expressed as EUR/USD.

• See the current rates chart here

The euro to dollar exchange rate is the price at which the world demand for US dollars equals the world supply of euros. Regardless of geographical origin, a rise in the world demand for euros leads to an appreciation of the euro.

Factors affecting exchange rates
Four factors are identified as fundamental determinants of the real euro to dollar exchange rate:

• The international real interest rate differential
• Relative prices in the traded and non-traded goods sectors
• The real oil price
• The relative fiscal position

The nominal bilateral dollar to euro exchange is the exchange rate that attracts the most attention. Notwithstanding the comparative importance of euro to US dollar bilateral trade links, trade with the UK is, to some extent, more important for the Euro zone than is trade with the US. The dollar and the euro have a strong predisposition to run together in the very short run, but sometimes there can be significant discrepancies. The very strong appreciation of the dollar against the euro in 2003 is one example of these discrepancies.

In the long run, the correlation between the bilateral dollar to euro exchange rate, and different measures of the effective exchange rate of Euroland, have been rather high, especially if one looks at the effective real exchange rate. As inflation is at very similar levels in the US and the Euro area, there is no need to adjust the dollar to euro rate for inflation differentials, but because the Euro zone also trades intensively with countries that have relatively high inflation rates (e.g. some countries in Central and Eastern Europe, Turkey, etc.), it is more important to downplay nominal exchange rate measures by looking at relative price and cost developments.

The fall of the dollar
The steady and orderly decline of the dollar from early 2002 to early 2004 against the euro, Australian dollar, Canadian dollar and a few other currencies (i.e., its trade-weighted average, which is what counts for purposes of trade adjustment), while significant, has still only amounted to about 10 percent.

There are two reasons why concerns about a free fall of the dollar should not be worth consideration. The first is that the US external deficit will stay high only if US growth remains vigorous. But if the US continues to grow strongly, it will also retain a strong attraction for foreign capital, which should support the dollar. The second reason is that the attempts by the monetary authorities in Asia to keep their currencies weak will probably not work.

The basic theories underlying the dollar to euro exchange rate:

Law of One Price: In competitive markets free of transportation cost barriers to trade, identical products sold in different countries must sell at the same price when the prices are stated in terms of the same currency.

Interest rate effects: If capital is allowed to flow freely, exchange rates become stable at a point where equality of interest is established.

The dual forces of supply and demand determine euro vs. dollar exchange rates. Various factors affect these two forces, which in turn affect the exchange rates:

The business environment: Positive indications (in terms of government policy, competitive advantages, market size, etc.) increase the demand for the currency, as more and more enterprises want to invest there.

Stock market: The major stock indices also have a correlation with the currency rates.

Political factors: All exchange rates are susceptible to political instability and anticipations about the new government. For example, political or financial instability in Russia is also a flag for the euro to US dollar exchange because of the substantial amount of German investments directed to Russia.

Economic data: Economic data such as labor reports (payrolls, unemployment rate and average hourly earnings), consumer price indices (CPI), producer price indices (PPI), gross domestic product (GDP), international trade, productivity, industrial production, consumer confidence etc., also affect fluctuations in currency exchange rates.

Confidence in a currency is the greatest determinant of the real euro-dollar exchange rate. Decisions are made based on expected future developments that may affect the currency. A EUR/USD exchange can operate under one of four main types of exchange rate systems:

Fully fixed exchange rates
In a fixed exchange rate system, the government (or the central bank acting on its behalf) intervenes in the currency market in order to keep the exchange rate close to a fixed target. It is committed to a single fixed exchange rate and does not allow major fluctuations from this central rate.

Semi-fixed exchange rates
Currency can move inside permitted ranges of fluctuation. The exchange rate is the dominant target of economic policy-making, interest rates are set to meet the target and the exchange rate is given a specific target.

Free floating
The value of the currency is determined solely by market supply and demand forces in the foreign exchange market. Trade flows and capital flows are the main factors affecting the exchange rate. A floating exchange rate system: Monetary system in which exchange rates are allowed to move due to market forces without intervention by national governments. For example, the Bank of England does not actively intervene in the currency markets to achieve a desired exchange rate level. With floating exchange rates, changes in market demand and supply cause a currency to change in value. Pure free floating exchange rates are rare - most governments at one time or another seek to "manage" the value of their currency through changes in interest rates and other controls.

Managed floating exchange rates
Governments normally engage in managed floating if not part of a fixed exchange rate system.

The advantages of fixed exchange rates are the disadvantages of floating rates:
Fixed rates provide greater certainty for exporters and importers and, under normal circumstances, there is less speculative activity - although this depends on whether the dealers in the foreign exchange markets regard a given fixed exchange rate as appropriate and credible.

Advantages of floating exchange rates
Fluctuations in the exchange rate can provide an automatic adjustment for countries with a large balance of payments deficit. A second key advantage of floating exchange rates is that it gives the government/monetary authorities flexibility in determining interest rates.

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Forex Forecasting

Basic Forex forecast methods: Technical analysis and fundamental analysis

This article provides insight into the two major methods of analysis used to forecast the behavior of the Forex market. Technical analysis and fundamental analysis differ greatly, but both can be useful forecast tools for the Forex trader. They have the same goal - to predict a price or movement. The technician studies the effect while the fundamentalist studies the cause of market movement. Many successful traders combine a mixture of both approaches for superior results.


Technical analysis
Technical analysis is a method of predicting price movements and future market trends by studying charts of past market action. Technical analysis is concerned with what has actually happened in the market, rather than what should happen and takes into account the price of instruments and the volume of trading, and creates charts from that data to use as the primary tool. One major advantage of technical analysis is that experienced analysts can follow many markets and market instruments simultaneously.

Technical analysis is built on three essential principles:

1. Market action discounts everything! This means that the actual price is a reflection of everything that is known to the market that could affect it, for example, supply and demand, political factors and market sentiment. However, the pure technical analyst is only concerned with price movements, not with the reasons for any changes.

2. Prices move in trends Technical analysis is used to identify patterns of market behavior that have long been recognized as significant. For many given patterns there is a high probability that they will produce the expected results. Also, there are recognized patterns that repeat themselves on a consistent basis.

3. History repeats itself Forex chart patterns have been recognized and categorized for over 100 years and the manner in which many patterns are repeated leads to the conclusion that human psychology changes little over time.


Forex charts are based on market action involving price. There are five categories in Forex technical analysis theory:

Indicators (oscillators, e.g.: Relative Strength Index (RSI)
Number theory (Fibonacci numbers, Gann numbers)
Waves (Elliott wave theory)
Gaps (high-low, open-closing)
Trends (following moving average).


Some major technical analysis tools are described below:

Relative Strength Index (RSI):
The RSI measures the ratio of up-moves to down-moves and normalizes the calculation so that the index is expressed in a range of 0-100. If the RSI is 70 or greater, then the instrument is assumed to be overbought (a situation in which prices have risen more than market expectations). An RSI of 30 or less is taken as a signal that the instrument may be oversold (a situation in which prices have fallen more than the market expectations).

Stochastic oscillator:
This is used to indicate overbought/oversold conditions on a scale of 0-100%. The indicator is based on the observation that in a strong up trend, period closing prices tend to concentrate in the higher part of the period's range. Conversely, as prices fall in a strong down trend, closing prices tend to be near to the extreme low of the period range. Stochastic calculations produce two lines, %K and %D that are used to indicate overbought/oversold areas of a chart. Divergence between the stochastic lines and the price action of the underlying instrument gives a powerful trading signal.

Moving Average Convergence Divergence (MACD):
This indicator involves plotting two momentum lines. The MACD line is the difference between two exponential moving averages and the signal or trigger line, which is an exponential moving average of the difference. If the MACD and trigger lines cross, then this is taken as a signal that a change in the trend is likely.

Number theory:
Fibonacci numbers: The Fibonacci number sequence (1,1,2,3,5,8,13,21,34...) is constructed by adding the first two numbers to arrive at the third. The ratio of any number to the next larger number is 62%, which is a popular Fibonacci retracement number. The inverse of 62%, which is 38%, is also used as a Fibonacci retracement number.

Gann numbers:
W.D. Gann was a stock and a commodity trader working in the '50s who reputedly made over $50 million in the markets. He made his fortune using methods that he developed for trading instruments based on relationships between price movement and time, known as time/price equivalents. There is no easy explanation for Gann's methods, but in essence he used angles in charts to determine support and resistance areas and predict the times of future trend changes. He also used lines in charts to predict support and resistance areas.

Waves
Elliott wave theory: The Elliott wave theory is an approach to market analysis that is based on repetitive wave patterns and the Fibonacci number sequence. An ideal Elliott wave patterns shows a five-wave advance followed by a three-wave decline.

Gaps
Gaps are spaces left on the bar chart where no trading has taken place. An up gap is formed when the lowest price on a trading day is higher than the highest high of the previous day. A down gap is formed when the highest price of the day is lower than the lowest price of the prior day. An up gap is usually a sign of market strength, while a down gap is a sign of market weakness. A breakaway gap is a price gap that forms on the completion of an important price pattern. It usually signals the beginning of an important price move. A runaway gap is a price gap that usually occurs around the mid-point of an important market trend. For that reason, it is also called a measuring gap. An exhaustion gap is a price gap that occurs at the end of an important trend and signals that the trend is ending.

Trends
A trend refers to the direction of prices. Rising peaks and troughs constitute an up trend; falling peaks and troughs constitute a downtrend that determines the steepness of the current trend. The breaking of a trend line usually signals a trend reversal. Horizontal peaks and troughs characterize a trading range.

Moving averages are used to smooth price information in order to confirm trends and support and resistance levels. They are also useful in deciding on a trading strategy, particularly in futures trading or a market with a strong up or down trend.

The most common technical tools:

Coppock Curve is an investment tool used in technical analysis for predicting bear market lows.

DMI (Directional Movement Indicator) is a popular technical indicator used to determine whether or not a currency pair is trending.

Unlike the fundamental analyst, the technical analyst is not much concerned with any of the "bigger picture" factors affecting the market, but concentrates on the activity of that instrument's market.

Fundamental analysis
Fundamental analysis is a method of forecasting the future price movements of a financial instrument based on economic, political, environmental and other relevant factors and statistics that will affect the basic supply and demand of whatever underlies the financial instrument. In practice, many market players use technical analysis in conjunction with fundamental analysis to determine their trading strategy. One major advantage of technical analysis is that experienced analysts can follow many markets and market instruments, whereas the fundamental analyst needs to know a particular market intimately. Fundamental analysis focuses on what ought to happen in a market. Factors involved in price analysis: Supply and demand, seasonal cycles, weather and government policy.

The fundamentalist studies the cause of market movement, while the technician studies the effect. Fundamental analysis is a macro or strategic assessment of where a currency should be trading based on any criteria but the movement of the currency's price itself. These criteria often include the economic condition of the country that the currency represents, monetary policy, and other "fundamental" elements.

Many profitable trades are made moments prior to or shortly after major economic announcements.


Also see the dictionary of FOREX terms >> CLICK HERE

Visit to the Home Page for complete details and explinations >> CLICK HERE

How to save One Million Dollars

I thought this info was both useful and enlightening. I found this information in a issue of Kiplinger magazine that was sitting on my desk.

It talks about what you need to do to save $1Million dollars at different ages. I think they assume you already have money in savings on which you're earning 8% annually.

Check it out...


How to Make a Million at 25
You've Saved: $0 To reach one million by age 65 you need to save $286 per month.

How to Make a Million at 35
You've Saved: 0$ To reach one million by age 65 you need to save $671 per month.
If You've Saved: $50,000 To reach one million by age 65 you need to save $304 per month.

How to Make a Million at 45
You've Saved: 0$ To reach one million by age 65 you need to save $1,698 per month.
If You've Saved: $50,000 To reach one million by age 65 you need to save $1298 per month.
If You've Saved: $100,000 To reach one million by age 65 you need to save $861 per month.

How to Make a Million at 55
You've Saved: 0$ To reach one million by age 65 you need to save $5,466 per month.
If You've Saved: $50,000 To reach one million by age 65 you need to save $4,859 per month.
If You've Saved: $100,000 To reach one million by age 65 you need to save $4,253 per month.
If You've Saved: $200,000 To reach one million by age 65 you need to save $3,040 per month.
---

I thought this was good stuff! You can see the article online at:
http://kiplinger.com/magazine/archives/2008/02/how-to-save-a-million.html

FOREX Daily Outlook

Hope everyone has the day off today!


Poor data out of the US signals further economic concerns. BoJ keep rates on hold at 0.50% in a unanimous vote. >> Full Details

CURRENCY TRADING SUMMARY – 18 FEBRUARY 2008 (00:30GMT)

· U.S. Dollar Trading (USD) fell across the board as disappointing data ensured the greenback remained heavily pressured. New York manufacturing and tumbling consumer confidence added to concern that the U.S. economy is headed for a recession. The NY Fed manufacturing survey fell to -11.72 for the month of February, signaling a contraction for the first time in almost 3 years, whilst Consumer Confidence recorded it lowest reading since 1992, coming in at 69.6. In US share markets, the NASDAQ was down by -10.74 points (-0.46%), whilst the Dow Jones also declined by -28.77 points (-0.23%). Crude oil fell from a five week high on speculation U.S. demand will drop after a report showed that consumer confidence slumped to the lowest level since 1992. However, Crude did end the day up by US$0.23 a barrel to US$95.69.

· The Euro (EUR) traded at a week high on the back of poor data out of the US, prompting investors to look for alternative currencies. Its rise of 1.3% versus the dollar is the biggest weekly advance since Dec 28, 2007. In Eurozone specific data, Trade Balance for the month of December declined by -4.2 bln, well short of the expected 2.4 bln rise. Overall the EURUSD traded with a low of 1.4632 and a high of 1.4709 before closing the day at 1.4669 in the New York session.

· The Japanese Yen (JPY) fell earlier after the Bank of Japan voted unanimously on Friday to keep interest rates unchanged at 0.5 percent, as expected. With Governor Toshihiko Fukui citing the decision on the back of inflationary risks remaining low. The JPY capped its losses on the back of poor manufacturing data out of the US, ensuring the USDJPY traded with a low of 107.22 and a high of 108.32 before closing the day at 107.67 in the New York session.

· The Sterling (GBP) ceased five days of gains against the dollar as investors viewed the recent rally to be a misrepresentation of the UK economy, and future policy outcomes. However any further declines were limited on the back of poor US data. Overall the GBPUSD traded with a low of 1.9597 and a high of 1.9722 before closing the day at 1.9614 in the New York session.

· The Australian Dollar (AUD) remained firm throughout the Asian session, and was buoyed by poor US data in the New York session. Overall the AUDUSD traded with a low of 0.9009 and a high of 0.9098 before closing the day at 0.9071 in the New York session.

· Gold (XAU) traded lower on the back of easing oil prices, as investors were subject to profit taking. XAU traded with a low of 898.70 and a high of 915.20.


· Euro – 1.4680
Initial support at 1.4631 (Feb 15 low) followed by 1.4549 (Feb 14 low). Initial resistance is now located at 1.4698 (50% retracement of the 1.4956 to 1.4440 decline) followed by 1.4759 (61.8% retracement of the 1.4956 to 1.4440 decline).

· Yen – 107.85
Initial support is located at 107.00 (Feb 13 low) followed by 106.35 (Feb 11 low). Initial resistance is now at 108.67 (38.2% retracement of the 114.66 to 104.97 decline) followed by 109.82 (50% retracement of the 114.66 to 104.97 decline)

· Pound – 1.9575
Initial support at 1.9606 (Feb 15 low) followed by 1.9551 (Feb 13 low). Initial resistance is now at 1.9738 (Feb 14 high) followed by 1.9763 (Feb 5 high)

· Australian Dollar – 0.9080
Initial support a 0.9005 (Feb 15 low) followed by 0.8954 (Feb 14 low). Initial resistance is now at 0.9102 (Feb 4 high) followed by 0.9125 (Nov 12, 2007 high)

· Gold – 902.60
Initial support at 896.50 (Feb 13 low) followed by 885.0 (Feb 7 low). Initial resistance is now at 927.31 (Feb 11 high) followed by 936.80 (Feb 1 trend high)



See complete data and live charts: Click Here
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FOREX Daily Outlook

Bernanke signals more US rate cuts are on the agenda.


CURRENCY TRADING SUMMARY – 15 FEBRUARY 2008 (00:30GMT)

· U.S. Dollar Trading (USD) eased against a number of majors as Fed Chairman Bernanke signaled the Central Bank may continue to cut rates further, amidst concerns the US was headed into recession. His comments addressed the Fed “will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks”, causing futures market to price in an 80% chance that policy makers will move to cut by another 50bps in the next rate meeting on the 18 march. In U.S. share markets the NASDAQ was lower on Thursday by 41.39 points (-1.74%) whilst the Dow Jones also fell by -175.26 (-1.40%). Crude oil fell by rose by US$2.15 a barrel to US$95.42. Looking ahead, heavy data day is scheduled for Friday, with the releases of TIC flows, NY Fed Manufacturing, Industrial Production, and Michigan sentiment survey.

· The Euro (EUR) rallied to a week high post “dovish” Bernanke comments yesterday. On the data front, Eurozone GDP came in better than forecasted in at 0.4%/2.3% for the fourth quarter (Forecast: 0.3%/2.2%). Overall the EURUSD traded with a low of 1.4550 and a high of 1.4649 before closing the day at 1.4634 in the New York session. EU Trade Balance on is scheduled for release on Friday.

· The Japanese Yen (JPY) erased a loss versus the dollar as Bernanke warned that tighter credit will be a “restraint on economic growth”, sparking declines in U.S. stocks. Overall the USDJPY traded with a low of 107.77 and a high of 108.61 before closing the day at 107.97 in the New York session. Looking ahead, the BoJ is scheduled to make a rate announcement, although widely expected that rates will be held at 0.50%.

· The Sterling (GBP) pound gained against 11 of the 16 most-traded currencies as traders reduced bets on interest-rate cuts by the Bank of England this year after Governor Mervyn King said on Wednesday, that price growth will overshoot the bank's 2 percent goal in two years. Overall the GBPUSD traded with a low of 1.9616 and a high of 1.9738 before closing the day at 1.9688 in the New York session.

· The Australian Dollar (AUD) was boosted by all time lows in Unemployment Rate coming in at 4.1%, below forecasted figures of 4.3%. The buoyant data confirmed that the labour force had grown by 26.8K jobs, adding to growing expectations that the RBA may move to increase rates in their March meeting.

· Gold (XAU) traded steady around $910 levels amid rising oil prices. XAU traded with a low of 902.15 and a high of 913.80.



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· Euro – 1.4645

Initial support at 1.4440 (Feb 7 low) followed by 1.4366 (Jan 22 reaction low). Initial resistance is now located at 1.4615 (Feb 12 high) followed by 1.4637 (38.2% retracement of the 1.4956 to 1.4440 decline).



· Yen – 107.80

Initial support is located at 105.71 (Jan 31 low) followed by 104.97 (Jan 23 low). Initial resistance is now at 107.66 (Feb 11 high) followed by 107.89 (Jan 28 high)



· Pound – 1.9690

Initial support at 1.9403 (Feb 11 low) followed by 1.9389 (Feb 7 low). Initial resistance is now at 1.9643 (Feb 12 high) followed by 1.9763 (Feb 5 high)



· Australian Dollar – 0.9020

Initial support a 0.8916 (Feb 8 low) followed by 0.8875 (Feb 7 low). Initial resistance is now at 0.9086 (Feb 12 high) followed by 0.9102 (Feb 4 high)



· Gold – 909.60

Initial support at 896.70 (Feb 13 low) followed by 885.0 (Feb 7 low). Initial resistance is now at 927.31 (Feb 11 high) followed by 936.80 (Feb 1 trend high)



Forex trading involves substantial risk of loss, and may not be suitable for everyone.


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Forex eBook - Read and Learn

Forex risk management strategies

Learn about the basic strategies for controlling risks while trading Forex
The Forex market behaves differently from other markets! The speed, volatility, and enormous size of the Forex market are unlike anything else in the financial world. Beware: the Forex market is uncontrollable - no single event, individual, or factor rules it. Enjoy trading in the perfect market! Just like any other speculative business, increased risk entails chances for a higher profit/loss.

Currency markets are highly speculative and volatile in nature. Any currency can become very expensive or very cheap in relation to any or all other currencies in a matter of days, hours, or sometimes, in minutes. This unpredictable nature of the currencies is what attracts an investor to trade and invest in the currency market.

But ask yourself, "How much am I ready to lose?" When you terminated, closed or exited your position, had you had understood the risks and taken steps to avoid them? Let's look at some foreign exchange risk management issues that may come up in your day-to-day foreign exchange transactions.

• Unexpected corrections in currency exchange rates
  
• Wild variations in foreign exchange rates
  
• Volatile markets offering profit opportunities
  
• Lost payments
  
• Delayed confirmation of payments and receivables
  
• Divergence between bank drafts received and the contract price

There are areas that every trader should cover both BEFORE and DURING a trade.

Exit the Forex market at profit targets
Limit orders, also known as profit take orders, allow Forex traders to exit the Forex market at pre-determined profit targets. If you are short (sold) a currency pair, the system will only allow you to place a limit order below the current market price because this is the profit zone. Similarly, if you are long (bought) the currency pair, the system will only allow you to place a limit order above the current market price. Limit orders help create a disciplined trading methodology and make it possible for traders to walk away from the computer without continuously monitoring the market.

Control risk by capping losses
Stop/loss orders allow traders to set an exit point for a losing trade. If you are short a currency pair, the stop/loss order should be placed above the current market price. If you are long the currency pair, the stop/loss order should be placed below the current market price. Stop/loss orders help traders control risk by capping losses. Stop/loss orders are counter-intuitive because you do not want them to be hit; however, you will be happy that you placed them! When logic dictates, you can control greed.

Where should I place my stop and limit orders?
As a general rule of thumb, traders should set stop/loss orders closer to the opening price than limit orders. If this rule is followed, a trader needs to be right less than 50% of the time to be profitable. For example, a trader that uses a 30 pip stop/loss and 100-pip limit orders, needs only to be right 1/3 of the time to make a profit. Where the trader places the stop and limit will depend on how risk-adverse he is. Stop/loss orders should not be so tight that normal market volatility triggers the order. Similarly, limit orders should reflect a realistic expectation of gains based on the market's trading activity and the length of time one wants to hold the position. In initially setting up and establishing the trade, the trader should look to change the stop loss and set it at a rate in the 'middle ground' where they are not overexposed to the trade, and at the same time, not too close to the market.

Trading foreign currencies is a demanding and potentially profitable opportunity for trained and experienced investors. However, before deciding to participate in the Forex market, you should soberly reflect on the desired result of your investment and your level of experience. Warning! Do not invest money you cannot afford to lose.

So, there is significant risk in any foreign exchange deal. Any transaction involving currencies involves risks including, but not limited to, the potential for changing political and/or economic conditions, that may substantially affect the price or liquidity of a currency.

Moreover, the leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds. This may work against you as well as for you. The possibility exists that you could sustain a total loss of your initial margin funds and be required to deposit additional funds to maintain your position. If you fail to meet any margin call within the time prescribed, your position will be liquidated and you will be responsible for any resulting losses. 'Stop-loss' or 'limit' order strategies may lower an investor's exposure to risk.

Easy-Forex foreign exchange technology links around-the-clock to the world's foreign currency exchange trading floors to get the lowest foreign currency rates and to take every opportunity to make or settle a transaction.

Avoiding/lowering risk when trading Forex:
Trade like a technical analyst. Understanding the fundamentals behind an investment also requires understanding the technical analysis method. When your fundamental and technical signals point to the same direction, you have a good chance to have a successful trade, especially with good money management skills. Use simple support and resistance technical analysis, Fibonacci Retracement and reversal days. Be disciplined. Create a position and understand your reasons for having that position, and establish stop loss and profit taking levels. Discipline includes hitting your stops and not following the temptation to stay with a losing position that has gone through your stop/loss level. When you buy, buy high. When you sell, sell higher. Similarly, when you sell, sell low. When you buy, buy lower. Rule of thumb: In a bull market, be long or neutral - in a bear market, be short or neutral. If you forget this rule and trade against the trend, you will usually cause yourself to suffer psychological worries, and frequently, losses. And never add to a losing position. On Easy-Forex the trader can change their trade orders as many times as they wish free of charge, either as a stop loss or as a take profit. The trader can also close the trade manually without a stop loss or profit take order being hit. Many successful traders set their stop loss price beyond the rate at which they made the trade so that the worst that can happen is that they get stopped out and make a profit.

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Daily Outlook - CURRENCY TRADING SUMMARY

Buoyant US Retail Sales, Hawkish BoE quarterly report, Aussie Unemployment at fresh 33 year lows of 4.1%
(00:30GMT)

CLICK HERE for complete details and Weekly Outlook


· U.S. Dollar Trading (USD) was mixed versus a number of majors, holding firm on positive Retail Sales out of the U.S. for the month of January coming above expectations, as Core figures were released at 0.3% (F: 0.2%; P: -0.3%R), whilst Headline figures came in at 0.3% (F: -0.2%; P: -0.4%). In U.S. share markets the NASDAQ was up by 108.13 points (+1.21%) whilst the Dow Jones was also higher by 178.45 points (+1.45%). Crude oil was higher by US$0.36 a barrel to US$93.14 after Venezuela said it would stop supplying oil to EXXON Mobil. Thursday sees the weekly release of Initial Jobless claims, whilst Ben Bernanke, and Henry Paulson are scheduled to testify in front of the Senate Banking Committee

· The Euro (EUR) held firm, despite US retail sales unexpectedly rising for the month of January. In Eurozone specific news, Industrial Production declined by -0.2% for the month of December, well short of the forecasted figures of 0.6%, and inline with recent rhetoric surrounding slowing growth in the Eurozone. Overall the EURUSD traded with a low of 1.4530 and a high of 1.4600 before closing the day at 1.4579 in the New York session. Looking ahead, key growth data in the form of GDP for the fourth quarter 0.3% (Forecast: 0.4%; Previous: 0.8%)

· The Japanese Yen (JPY) fell to a one-month low against the dollar after U.S. retail sales unexpectedly rose last month, allaying concern that the world's biggest economy will slide into a recession and hurt global growth. The currency dropped against 14 of the 16 most-active currencies as U.S. stocks rose, signaling traders are more confident to bet on higher-yielding assets funded by loans in Japan. Overall the USDJPY traded with a low 107.00 and a high of 108.37 before closing the day 108.22 in the New York session. Japanese GDP data released on Thursday morning was released at 0.9% (Forecast: 0.4%; Prior: 0.4%) for the fourth quarter.

· The Sterling (GBP) rallied to a two week high against the Euro after the Bank of England raised its inflation forecast, prompting traders to pare bets on interest-rate cuts from the UK. The Sterling Pound also traded at week highs versus the dollar as the central bank forecast in its quarterly inflation report on Wednesday that price growth will overshoot its 2 percent goal in two years even as “downside” risks to the economy remain. The pound also gained as a government report showed unemployment fell to a three-decade low in January. Overall the GBPUSD traded with a low of 1.9552 and a high of 1.9654 before closing the day at 1.9650 in the New York session.

· The Australian Dollar (AUD) paired its weekly gains on positive retail sales figures from the US. The AUDUSD traded with a low of 0.8924 and high of 0.9046 before closing the day at 0.8951 in the New York session. Unemployment Rate for the Aussie is out on Thursday morning with forecast expected to be at 4.3%, same as the previous. UPDATE: Unemployment rate at 4.1%.

· Gold (XAU) little changed in New York, may fall on speculation a rally in equities will reduce the appeal of the precious metals as alternative investments. XAU traded with a low of 896.00 and a high of 910.00.


CLICK HERE for complete details and Weekly Outlook

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What is FOREX?

Forex? What is it, anyway?



The market



The currency trading (FOREX) market is the biggest and the fastest growing market on earth. Its daily turnover is more than 2.5 trillion dollars, which is 100 times greater than the NASDAQ daily turnover. (click here to read full market background by Easy-Forex™).



Markets are places to trade goods. The same goes with FOREX. The Forex goods (or merchandise) are the currencies of various countries. You buy Euro, paying with US dollars, or you sell Japanese Yens for Canadian dollars. That's all.



How does one profit in Forex?



Very simple and obvious: buy cheap and sell for more! The profit is generated from the fluctuations (changes) in the currency exchange market.



The nice thing about the FOREX market, is that regular daily fluctuations, say - around 1%, are multiplied by 100! (in general, Easy-Forex™ offers trading ratios from 1:50 to 1:200). If, for example, the exchange rate of "your" pair of currencies increased by 0.6% in the last 4 hours, your profit will be 60% on your investment! Such can happen in one business day, or in a few hours, even minutes.



Moreover, you cannot lose more than your "margin"! You may profit unlimited amounts, but you never lose more than what you initially risked and invested.



You can implement your choice (the pair of currencies, the volume amount) under any direction to which the market is moving, and yet make profit. It does not matter whether the exchange rate is going up or down: you can always decide to buy Euro and sell dollar, or vice versa - buy dollar and sell Euro. You don't have to physically possess certain currencies in order to perform "buy" or "sell" with them.



How do I start?



Register (Easy-Forex™ offers the simplest and quickest registration process, no obligation); deposit your first trading "margin" amount (credit cards are welcome, only by Easy-Forex™); start trading.



It can't be simpler or easier than that. Need help? We'll provide you with 1-on-1 training and service, as much as necessary (Easy-Forex™ offers real people service, live, in your own language).



How do I trade Forex?



You select the pair of currencies with which you wish to make a Forex deal. You determine the volume (the amount of the deal). You deposit the "margin" (collateral needed to facilitate the deal. Usually - only a very small portion of the whole deal, say: 1% or 1:100).



Before you finally activate the deal, you can still "freeze" it for a few seconds. That enables you to either change the terms, or accept it as is, or altogether regret the whole idea. The "freeze" feature is a unique service by Easy-Forex™.



When your Forex deal is running (you hold an "open position"), you can monitor its status and check scenarios online, whenever you wish. You may change some terms in the deal, or close it (and cash the profit, if any, or minimize the loss, if any). Moreover, Easy-Forex™ lets you determine a "take-profit" rate, with which the deal will close automatically for you, when and if such rate occurs in the market. Meaning: you do not have to stay near your computer when you hold open positions.



Want to know more? Want to get on-line training? Register here (simple, quick, no obligation), we'll be glad to guide you, every step of the way.



Good luck!



Forex trading involves substantial risk of loss, and may not be suitable for everyone.