Daily Review 13/09/2010

Today’s Forex Trading review:

USD Dollar (USD)

On Friday, the dollar finished with gains versus most of the major currencies as lack of confidence in the market pushed investors towards safety. The Stock Markets in the U.S. closed positive with the Dow Jones and NASDAQ rising by 0.46% and 0.28% respectively. Crude Oil jumped by 3% and closed at $76.40 a barrel. Gold (XAU) closed almost unchanged at $1246 an ounce. Today, The Federal Budget Balance is expected at -109B vs. -165B previously.

EURO (EUR)

On Friday, the euro finished the week lower against the Dollar after being unable to hold gains above 1.2740 and retraced to 1.27 zones. Concerns about the debt crisis may be worsening, and signs the global recovery is unstable, trimmed appetite for higher yield. The French Industrial Production came out at 0.9%, worse than an expected 0.8%. Holding above the support level of 1.2670 keeps the momentum positive for the pair. Overall, EUR/USD traded with a low of 1.2673 and with a high of 1.2747. No economic data is expected today.

EUR/USD – Last: 1.2784

British Pound (GBP)

The Pound showed weakness on Friday versus the dollar and closed below 1.54 levels as the macro data showed that the PPI Input came out at -0.5%, worse than the expected 0.2%. Holding above the support level of 1.5380 keeps the momentum positive for the pair. Overall, GBP/USD traded with a low of 1.5354 and with a high of 1.5427. Today, The Nationwide Consumer Confidence report is expected at 59 vs. 56 previously. The RICS House Price Balance is expected at -11% vs. -8% previously.

GBP/USD – Last: 1.5400

Japanese Yen (JPY)

The dollar gained versus the Yen on a tight, narrow range of trading. The pair made attempts to consolidate above the 84 levels as it was supported by easing concerns over a US double dip. Trading above the 84 level might shift the momentum to positive for the pair. Overall, USD/JPY traded with a low of 83.76 and with a high of 84.15. No major economic data is expected today.

USD/JPY – Last: 84.13

Canadian dollar (CAD)

The U.S dollar gained versus the Canadian dollar on a tight and narrow range of trading, near the critical level of 1.0340. The Employment Change came out 35.8k, better than the expected 23.9k. The Unemployment Rate came out 8.1%, worse than the expected 8%. Holding below the 1.0340 resistance area might extend gains for the pair, but if otherwise, a rebound could be seen. Overall, USD/CAD traded with a low of 1.0308 and with a high of 1.0367. No economic data is expected today.

USD/CAD – Last: 1.0327

Daily Review 25/08/2010

Today’s Forex Trading review:

USD Dollar (USD)

The Dollar rose against other major currencies after industry data showed that U.S. existing home sales fell to their lowest level in 15 years (3.83M vs. 4.68M forecast), causing to sell higher yielding assets . NASDAQ and Dow Jones weakened by 1.66% and 1.32% respectively , crude oil fell by 2.0% the lowest price in 11 weeks ,closing at 71.36$ a barrel, Gold (XAU) rose by 0.4% , closing at 1233.4$ an ounce. Today, Core Durable Goods Orders are expected to rise from -0.9% to 0.6%, New Home Sales are expected at 333K vs. 330K prior.

EURO (EUR)

The Euro fell heavily against the yen and closed almost unchanged versus the Dollar, touching a six-week low during the session as main indexes and commodities fell strongly, more than 1.5 percent, supported to buy safety currencies like the Yen and Dollar. The pair continuing to trade downwards, therefore the momentum is still strongly bearish and a short position is preferred. Overall, EUR/USD traded with a low of 1.2587 and with a high of 1.2719. Today, German Ifo Business Climate is expected to weak from 106.2 to 105.8.

EUR/USD – Last: 1.2656

British Pound (GBP)

The Pound fell against the Dollar after the London based Times reported that Bank of England policy maker Martin Weal said the U.K. faces a “real risk” of a second recession . The GBP/USD has broken the support level at 1.5480 and crossed down the 10 moving average on the daily graph, therefore a short position is preferred. Overall, GBP/USD traded with a low of 1.5372 and with a high of 1.5505. No economic data expected today.

GBP/USD – Last: 1.5430

Japanese Yen (JPY)

The Yen advanced to the strongest level since June 1995 against the Dollar as concern the global economy is slowing encouraged demand for safer assets. Trade Balance came out better than expected at 0.61T vs. 0.47T forecast. The momentum of the USD/JPY is strongly bearish, the next support on the daily chart is located at 83.50, therefore a short position is preferred. Overall, USD/JPY traded with a low of 83.59 and with a high of 85.15. No economic data expected today.

USD/JPY-Last: 84.38

Canadian Dollar (CAD)

The Canadian Dollar fell for a fourth straight day versus the Dollar, touching the lowest level in seven weeks, as investors soured on higher yielding assets and currencies. As long the USD/CAD above 1.0500 levels a long position is preferred, the next resistance on the daily chart is located at 1.0700, if the price cross this level the trend will continue to be bullish. Overall, USD/CAD traded with a low of 1.0536 and with a high of 1.0664. No major economic data expected today.

USD/CAD – Last: 1.0595

Forex Trading: Limit order 16/07/2010. Sell GBP/CHF @ 1.5970 , SL @ 1.6145 , TP1 @ 1.5875 TP2 @ 1.5810 TP3 @ 1.5740

The pair has been  trending downwards and has made a small retracement upwards.

We want to enter the main trend which is still downwards but first wait for a confirmation the trend continues.

The entrance point is located below the last bottom the pair has made on the 4 hour chart.

More aggressive traders could try and short the pair from its current location but they should be advised the retracement upwards might continue higher and a SL of above 1.6170 is recommended for such traders.

 The RSI is near 50 in neutral territory.

SL is located above the last top the pair has made yesterday and above the 100 period moving average which is likely to act as a resistance for the pair.

TP’s are located  slightly above the support levels the pair has.

All analysis is based on the 4 hours chart.

Current rate: 1.6075

Forex option trading has been given a number of names like FX option, forex option, options trading and currency options. Being one of the most liquid markets of the world one thing is assured that there will frequent changing of hands. Forex option is a type of financial instrument whose value can be derived from the underlying asset and the asset is kept to protect or secure an amount for future transactions. The owner of such option is given the right to exchange a certain amount of money from one currency to another and the rate if fixed earlier and also the time is agreed upon earlier. However if the situation is not in favor of the owner he cannot push the transaction to avoid losses.

This type of trading is undertaken for two main reasons:

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When the internet had not been so popular there were only a selected number of retail forex brokers or professional traders or seasoned forex merchants who were interested in this type of trading. The transaction involving options can only be done through a large amount of money. Moreover due to the constraints of technology it was very hard to constantly keep a track of all the movements taking place in the market. But in the present day world with the quality of technology being so high an investor can continuously monitor all the real time updates of the movements of the forex market and information that is being uploaded on the World Wide Web and this has made option trading a relatively easy task then it was before.

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