Monthly Archive for August, 2007

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Humpty Dumpty’s Corner – New System Strategy Update

Hello Forex Fans!

I am sorry I have given any signals lately. Last week I spent hours tweeking the system and I must say Im totally impressed. The system has kicked out nearly ever major move over 50 pips so far since Ive revised it.

The reason I havent been giving any signals is because I am extremely tied up this week. All the signals are coming in when Im not watching or sitting at the computer. Nevertheless, its nice to see the tweeked version kicking some major butt!

I have relayed the system to another trader that monitors it when Im not around. He is on vacation for a week, but when he comes back, I will have another set of eyes watching it and calling me if there’s a major signal, which I will pass along here.

Sit tight, cause when we’re in full mode next week, hopefully the markets will be moving as it has been. If it is, we are in for a major ride.

Humpty

Investica – Credit Fears Return

In the period after the Federal Reserve statement on Tuesday until the end of Asian trading on Thursday, risk aversion eased with a significant return of confidence in high-yield assets and rising stock markets. The yen and Swiss franc also encountered fresh selling pressure as carry trade activity resumed.

Credit fears have now returned with the announcement that withdrawals had been suspended on three BNP Paribas funds. There have also been rumours of difficulties at German bank WestLB, which have been denied.

In addition, US and European money market rates have tightened with a spike in interest rates and rumours of an ECB meeting to discuss liquidity difficulties.

Markets are still in the very dangerous northern hemisphere Summer period when underlying liquidity is running at reduced levels which increases the threat of erratic and volatile trading. Overall it is unlikely that markets will settle over the next two weeks at least.

Source: Investica

The market’s pretty volatile today with EUR and GBP doing some seesaw starting from a plummet.

Forex Site Recommendation – PFXGlobal

Whilst browsing through ForexFactory, one of the commentary caught my attention.

Haven’t seen a forex site that utilizes and makes full advantage of videos. PFXGlobal makes videos almost daily with commentary on the market. Well it relieves me in a way with all the boring texts and daily routines yet still keeping me in the loop on the markets.

With the charts getting really colourful on the video and the interesting guy behind giving analysis opinions on the market, any person who just begin on embarking their journey with forex might be interested to just spend some more time on work.

Still take all resources with a pinch of salt and enter your trades by your own analysis. I don’t really like the 5 minutes chart analysis on their video. To each its own.

A pity they don’t have RSS feeds, which is somewhat amusing since they’ve got almost everything there. Videos, Forums, and all. According to Alexa, they should be growing and with their forex video niche, this one might raise up to be one of the few top forex sites in the future.

Ooh, RSS feeds is something we have though. Subscribe to ours today! *Another shameless plugin.

If you don’t know what RSS is, you can refer to a little tip on RSS and what the heck is RSS from No Bullshit HYIP Blog

Daily FX – Euro Falls Back Into its Ranges

This one caught me since its the same pair that I am looking at for a potential short.

The Euro’s failure to close near its high yesterday was a good leading indicator for today’s weakness. In contrast to the sharp rise in factory orders, industrial production actually fell short of expectations in the month of June. It appears that big ticket items boosted orders and those take time to be reflected in production. Current account and trade figures from Germany are due for release tomorrow. Although we could see further losses in the Euro, support should come in at 1.3670. The European Central Bank is still expected to raise interest rates next month and there is no major US or European data left on the economic calendar. As a result, the EUR/USD is most likely expected to revert back into 1.3600-1.3850 trading range.

Source: Daily FX

NewsTraderFX – Fed Statement Is Crucial For Equity Markets And Carry Trades

Coming at a time when Fed Chairman Bernanke is facing is first potential crisis, it will be very interesting to watch The Fed’s policy play out through all of this. I would not expect to see a change in the inflation bias, although markets will be looking for any sign of change in The Fed’s opinion regarding the housing situation and its potential to hinder growth going forward. As Bernanke clearly stated during his testimony last month, the situation is viewed as being “contained”.

Former Fed Chairman Allan Greenspan would have been talking about easing by this time and it’s fairly well established that Greenspan’s over-easing of policy helped cause the housing/credit bubble to begin with. Ben Bernanke operates in a very different way then his predecessor. Greenspan was much more of an intiutive, seat-of-the-pants type, while Bernanke’s academic and research background leads him to rely on history, models, projections and mathematics. If Bernanke were to paraphrase the former chairman, he might use the phrase “Immoderate Indulgence” to describe what had existed before all this blew up.

In my opinion, Bernanke will not be easing policy or changing his statement based on what he likely sees as a necessary adjustment to the “immoderate indulgence” despite the fact that people are going to be hurt in the process, because it’s likely that the “biting of the bullet” that will occur now is probably the best chance for assuring the long term health and stability of the U.S economy. Economic leaders from Central Banks, the IMF and the BIS have long warned against the excesses they saw in the fixed income markets, making the current situation of the “chickens coming home to roost” variety in their view.

That being said, we trade from the information at hand so a careful observation of the statement will be crucial to anticipating future market trends.

If the Fed were to allude to the possibility of the present situation being a worse drag on the GDP then previously estimated (perhaps by saying that the risks to their growth estimate had increased), markets would feel supported and would interpet the remarks as indicating The Fed is that much closer to a rate cut, or at least to a more neutral bias. While the underlying problems would still exist, markets would see a light at the end of the tunnel and that might be enough to turn things around; equities, carry trades and risk acceptance would again be the order of the day. What that would also do is further weaken the dollar, due to the combination of renewed risk appetite in carry trades and the likely fall of bond yeilds.

They did this at the March 21st meeting when they alluded to the increased risks to their growth assessment. The DOW took off from there, eventually reaching 14,000 while GBP/JPY went from 231.5 to a closing high of 250 on July 17, in spite of the fact that the inflation bias was retained. As a matter of fact the dollar has done nothing but weaken during the entire time the inflation bias has been in affect, to say nothing about how high the DOW and carry trade positions have gone.

Thanks for reading my post and please use the box on the left to vote. If you’re interested in finding out about my trade room, blog and trading primer, email newstraderfx@yahoo.com

Source: Forexfactory, NewsTraderFX

I like this guy’s insights. A fundamental trader? ;)

Investica – Yen retail selling to continue

There will be retail yen selling interest while Japanese institutions are likely to increase US dollar buying below the 118.0 level. A fragile short-term dollar recovery is likely before the US currency hits renewed selling pressure.

Overall levels of risk aversion spiked higher on Friday with a fresh cutting of carry trades as investors looking to reduce risk ahead of the weekend. The move into the yen was compounded by weak US data, a sharp drop on Wall Street and increased global credit stresses with the yen breaking through the 118.0 technical barrier against the dollar.

This trend accelerated in early Asian trading on Monday due to fears of a rout in global equities. The yen strengthened to a high of 117.20 against the dollar before edging back to 117.50 in a fragile correction as the worst fears over global stock markets were not realised.

There will still be the threat of position capitulation due to margin calls and markets will remain more cautious over carry trades. Volatility levels will remain higher in the short term and Japanese finance officials will be looking to stabilise market conditions. There is also likely to be further retail selling interest which will curb near-term yen support.

Source: Investica

Jude’s Daily Signal 06 August 07 – EURJPY

Buy Stop at 163.55, Stop Loss 163.25

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Jude’s Daily Signal 06 August 07 – GBPUSD

GBPUSD4hrs060807I’ve placed a buystop at 2.0448, stop loss at 2.0418 (30 pips)

Reason:

Following momentum on the 4hrs MACD, trendline on the top seems to be easier to break. And it’s still heading away from the 200EMA/SMA.

Also look out for:

The Industrial Production stats which will be released in 2 hours time. If there’s any chance of an open position, close it before the news or at least place your stop loss level properly.

Analysis by Tim Clayton – Production Shock Required To Trigger Sterling Reaction

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Weekly Forex Technical Analysis on the Majors – 5th August 07

As I have mentioned on my routine before. Usually before the market opens for the week, I’ll be flipping Daily and Weekly charts to see how it will look for the long run. Here, I present to you my studies for the week.

- GBP/USD

Chart on Daily and Weekly still shows the trend is upwards. But take note that there might be possible retracement as a Pin is on the 4 hour chart.

- USD/JPY

The dollar might still continue to slide against the yen as we see on weekly that the MACD might be reversing towards the oversold side and the 200EMA/SMA lines as well. The potential to break the trendline on the bottom is alot higher than the top.

- EUR/USD

This pair seems to be correlated very well with the cable since it’s still onwards the uptrend. We can just see probable retracements, but there should not be any big movements.

- AUD/USD

The Aussie is more prone to break the trendline on the bottom than the top. MACD is reversing for the daily chart and it might head towards the 200EMA/SMA direction.

- USD/CAD

Dollar is gaining ground against the Canadian dollar. There might be a reversal of trend (but ah well, this pair has been an oddball for quite awhile). The MACD is showing a reversal, and the price has pierced through the 1 hour chart for the 200EMA/SMA line.

If you have different opinions or have something to share with us, feel free to drop a message!

CMSFX Giving Away $500 Live Accounts

Found this on Nobsnetwork Forum. An expensive way to market for new customers. I’ll sign up and see how it goes.

CMS International is allowing you to trade demo and make $500 to be transferred to a live account. Check it out here

CMSFXCapital Market Services International – BM, Ltd. (CMS International) will deposit 500 USD* into a Live trading account when you trade successfully on your Demo account. No initial deposit is required from you! CMS International will open a LIVE trading account for you and deposit 500 USD* of our own money for you to trade with. See full terms and conditions below.

Terms and conditions: Limit one (1) bonus per household. Once you realize your profit of 500 USD* notify us by clicking here. Demo and Live account must have the same base currency. The amount that CMS International deposits into your live trading account cannot be withdrawn or transferred before 30 round-turn lots have been traded on the account. Once 30 round-turn lots have been traded, the money can be withdrawn and/or transferred freely. In order to be eligible, you must open a new demo account with an initial balance of 10,000 USD* before August 31, 2007 (profit must be realized before January 1, 2008).

CMS International reserves the right to change the terms of this promotion, and all promotions, at any time without notice. This promotion cannot be combined with any other special offers or promotions provided by CMS International.

A pity this offer is not available to residences in US though.