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.

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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 1.5275 (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

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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 1.5275 (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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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.



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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.



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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).



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