You are browsing the archive for December 2012 -

some easy tips for Risk Management in the Forex Mortgage

December 28, 2012 in Forex Articles

Risk management is a vital part in Forex mortgage trading. So If you are ready to touch the base it is very necessary for you to know the tricks to manage the risks associated with it. To manage the risks involved you first need to understand the risks associated with it.

Minimize the Transaction exposure: A firm has transaction exposure whenever it has contractual whose values are subject to unanticipated changes in exchange rates due to a contract being denominated in a foreign currency. so it is very important to know the risk level and try to handle this exposure.

Minimize the Economic exposure: Any transaction that exposes the firm to foreign exchange risk also exposes the firm economically, but economic exposure can be caused by other business activities and investments which may not be mere international transactions, such as future cash flows from fixed assets. so if you are from this risk you need take measures which can save your valuable money which you have invested.

It is crucial in currency risk management to minimize discrepancies between asset and liability currencies in mortgage forex trading. It may be tempting to seek loans in countries with low interest rates and invest in countries with high interest rates, especially if foreign exchange rates are currently favorable. Unless a company has a global presence backing up this speculation, however, it is dangerous to do so and may needlessly expose the company to interest rate risk.

This way if you can reassess your strategies and can invest that way you can enjoy trading happily.Deviation from expected profit average is what determines the investor’s risk on the financial market. Risk management methods are applied before and after opening positions. The main risk management method is applied to reduce losses in mortgage forex trading.

Pound/Dollar – Triple Top Technical Rejection – Fiscal cliff In Focus

December 27, 2012 in Forex Fundamentals and News

Pound/Dollar – Triple Top Rejection – Fiscal cliff In Focus 

  • As noted in our recent updates the pound/dollar currency pair has now failed on three separate attempts to break sustainably through the 1.6300 area.  The 1.6300 area triple-top rejection has now seen an extended follow through over the recent trading sessions.
  • Market participants attention is now firmly back on negotiations around the so called U.S. ‘fiscal cliff’.  Barack Obama – the US President – has cut his vacation in Hawaii short and is flying to Washington in order to continue negotiations and attempt to reach a deal.  
  •  In related markets the sterling/yen pair is trading around the highest level seen since April 2011, as the JPY has experienced further depreciation and continues to broadly under perform.  EUR/GBP is trading above the recent 0.8164 range resistance highs as the EUR/USD has held relatively firm while cable moved lower.


GBP/USD Technical Update – 27/12/2012

gbpusd 2012-12-27



USD/JPY Breaks Over 85.00

December 27, 2012 in Forex Fundamentals and News

USD/JPY breaks over 85.00USD/JPY Broke over the psychological level of 85.00 first time since April 2011.

After the Tsunami hit Japan on March 11, 2011 with an earth quake of 9.0 magnitude on Richter scale, they Japanese Yen had gone down to 76.59 on March 16th 2011 but then had recovered to touch 85.52 on April 5th 2011. This was the first time for USD/JPY to hit 85 since mid September 2010. Since then the current pair remained below 85.00 with first low at 75.36 followed by the high of 84.18 and then the subsequent low of 77.13.

The Christmas of 2013 seems to have brought some cheers for Japanese Yen which has been hurting the national exports badly because of being strong against all currency majors. The economy has been depressed and the currency has been strong, proving that it was being preferred as a safe haven currency better than the U.S. Dollar.  The opening of Asian session after the Christmas holiday saw USD/JPY to break the barrier of 85.00 after over 21 months. The pair went as high as 85.72 and staying bullish around there.

The next resistance over 85.00 level was 85.97 during September 2010 and the pair is slightly below that. If that resistance is also taken off then we can expect some more substantial gains.

Some important dates and price action since 2010 for ready reference:


1) May 2010: 94.98

2) April 5, 2011: 85.52

3) March 11, 2012: 84.18

4) December 27, 2012: 85.72 as of now.



1) March 16, 2011: 76.59

2) October 30, 2011: 75.36

3) September 9th 2012: 77.13

Note: All dates mentioned are according to Japan Standard time which is  UTC (GMT) +9.00 hours.

Euro/Dollar Analysis Update – Thin Illiquid Trading Anticipated

December 26, 2012 in Forex Fundamentals and News

Euro/Dollar Analysis Update – Thin Illiquid Trading Anticipated Near Year End

  • The 1.3300 area pinbar from last week was followed by a drop of around 60 pips and a test of the recent range highs.  The euro had subsequently found a bid after a decline to previous 1.3171 area resistance.
  • Relative inactivity could now be the overriding theme due to the Christmas holiday period.  The FX markets are set to resume trading on Wednesday but thin liquidity is anticipated with European markets closed.
  • Key upcoming event risk includes US Unemployment Claims, CB Consumer Confidence and New Home Sales on the 27th Dec.  The fiscal cliff likewise remains as a key focus.

EUR/USD Update – D1 Chart 24/12/12  

eurusd price action analysis


Gold Technical Analysis – Dec 24th

December 26, 2012 in Trading with Other Commodities

Gold Technical Analysis – Dec 24th

Gold Technical Analysis

  • The price of gold has found support at a key level comprised of the following technical points of interest:  61.8% Fibonacci retrace, FE100 expansion from a potential ABC correction point and the previous resistance area around $1630 – as highlighted in our previous update.
  • The latest reversal came just above this tight confluence level as price hit an ascending trend line area, adding additional bullish weight from a technical analysis perspective.
  • Prior to this the price of gold was in a strong down trend recently; it remains to be seen whether the precious metal can hold above this support level going forward.  We will be monitoring the price action around this prior “support zone” to gain a directional bias going forward.

XAUUSD – – Daily Chart

gold technical analysis

Any news, opinion, analysis, price quote or any other information should be taken as general market commentary only and not as advice to trade on. Omissions and errors may occur.

Countdown to the Fiscal Cliff – Dec 25, 2012

December 25, 2012 in U.S.

There are increasing signs that perhaps the U.S. will indeed go over the fiscal cliff.

As of now, there is no sign of a concrete proposal on the table that can be debated and negotiated. Congress is in recess while both President Obama and Speaker Boehner have proceeded out of town on vacation. Any action to hammer out a solution and to legally implement it must therefore be completed within the few days between Christmas and D-day, which is January 1. That looks difficult, though the politicians may yet get their act together.

A rising swell of opinion puts some of the blame at the door of President Obama, saying he has a secret agenda to let the fiscal cliff happen and thereby let Americans face the spectre of a huge rise in taxes. Thereafter, it may be politically more expedient to try to roll back some of those taxes, looking better opposite the Republicans, who could be handed the blame for the fiscal cliff.

These have been strenuously denied by the Democrats, though unfortunately, as things are shaping up, it appears that script is playing out.

As for the markets, there would probably be volatility and turmoil ahead as the reality sinks in. But they may bounce back, rubber-band like, once some clarity emerges after January 1.

Desperate Times May Cost the Bank of Japan its Independence

December 23, 2012 in Japan

“We expect (the BOJ) to discuss it at the next policy board meeting.”

That is incoming Japanese Prime Minister Shinzo Abe’s brief to the Bank of Japan with respect to his 2% target for inflation.

Abe’s statement, spoken during a television interview today, is backed up with a simple threat in case the BOJ does not toe his line: “”If it doesn’t, we’ll revise the BOJ Law and set up a policy accord with the central bank to agree on an inflation target. We may also seek to have the BOJ held accountable for job growth.”

Is he taking a page out of the US Fed’s book by binding the bank to the twin guideposts of an inflation target and an unemployment rate?

Note that at its recent meeting the US Fed too decided to keep its ultra-low interest rate unchanged “at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored.”

Is this an unspoken opinion that the BOJ has been less pro-active in engaging with the country’s economic problems compared to its US peer across the ocean?

Apart from the stick of changing the law to cut the BOJ’s wings, Abe also stated that he will handpick someone more amenable to his own views when current BOJ Governor Masaaki Shirakawa’s term expires in April next year.

Japan’s economy has been plagued by deflation and recent data points to slowing exports and GDP. The economic mire has probably pushed Abe to consider radical steps to reignite growth, and he is unlikely to let the much-hallowed ‘independence’ of the central bank stand in his way, given the massive mandate that swung him back to power at the last general election.

Chart Alert: GBP/USD’s Failure To Sustain Over 1.6300

December 23, 2012 in Chart Alert

GBP/USD saw some consolidation during the later part of the last week. Some more consolidation is expected. The daily chart shows the possible support near 1.6130 where the previous resistance should work as support and this should get strength by the current trend line.

GBP/USD Daily Chart:

GBP/USD Daily Chart- consolidation and possible supports

GBP/JPY Failing Below 138.00

December 23, 2012 in Chart Alert

GBP/JPY’s  failure below 138.00 after going as high as 137.86 and the wide gap between the opening price and the highs of past 3 trading days suggest a possible consolidation. The 38.2% retracement level of the upward move during November 12th/13th to December 19th, 2012 is quite close to the high of the previous sideways move during  November 22nd and December 10th was 133.91. This previous resistance should work as a support for any downward consolidation. Tis combined support is expected near 133.20.

GBP/JPY Daily Chart:

GBP/JPY Daily Chart- Expected Consolidation

EUR/USD Breaking Two Support Levels

December 22, 2012 in Chart Alert

This chart alert is subsequent to this previous EUR/USD alert. The currency pair managed to break the recent continuous support of 5-day EMA as well as the Tenkan-line level of daily Ichimoku cloud. Though the weekly closing was approximately at the 5-day EMA but these breaks indicate the possibilities for some more consolidation, especially after the failure to sustain over 1.3300 as mentioned in the previous alert. The next support levels of 22-day EMA and Kijun line support of daily Ichimoku cloud are almost at the same level i.e. near 1.3095.

EUR/USD daily chart with EMAs:

EUR/USD daily chart- break of 5 day EMA support

















EUR/USD daily chart with Ichimoku cloud:

EUR/USD daily chart- break of Tenkan line support

Countdown to the Fiscal Cliff – Dec 21, 2012

December 21, 2012 in U.S.

Hard won concessions wrested from each other by Obama and Boehner faced a serious setback Thursday when Republicans cancelled a vote on Boehner’s Plan B legislation.

Boehner’s plan proposed to raise taxes on the rich, those earning over $1 million per annum. Though the bill was largely symbolic, as it would have passed in the Republican controlled House but would have failed in the Democrats led Senate, its abandonment lays bare the immense opposing pressures that stand in the way of a resolution.

A chastened Boehner acknowledged the bill did not have the required support from amongst his own members, and put the ball in Obama’s court, asking him to come up with suitable legislation to avoid the impending financial catastrophe.

Both Obama and Boehner ultimately need the support of their party members to resolve the deadlock. Republicans have traditionally opposed higher taxes and defence cuts. Democrats loathe cutbacks on welfare spending such as healthcare and Social Security pensions.

Yet the country’s massive fiscal deficit can be resolved only by taking these self-same bitter pills.

The news of the turmoil sent investors across the world scurrying to seek shelter in the dollar and yen.

Action now shifts to next week when the House and Senate will reconvene.

EUR/USD Seems To Have Stuck Up

December 21, 2012 in Chart Alert

EUR/USD’s current price action is still near the support of 5-day EMA and this support has been working good for past few days. However, the last two daily red candles show a wide gap between the highs and the closing price and that indicates possibilities of some consolidation towards 1.3140/1.3120 if there is a break below 1.3188.

EUR/USD-Dec 21 2012- Asian Session

Another daily chart with daily Ichimoku cloud, which also show that the first support of Tenkan line is not broken as yet:

eur/usd -daily ichimoku cloud

Some consolidation may come if there is a break of these supports. Please also check the overall situation mentioned in the previous EUR/USD chart alert.