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Fundamental Analysis and Technical Analysis

August 28, 2013 in Forex Articles

A forex trader needs to learn a lot of things in order to grow as a trader and be able to formulate sound forex trading strategies.

One of the things he needs to learn from the get-go is fundamental analysis and technical analysis – and what their differences are. Many traders use both of these types of analyses at different points in order to gain more knowledge that will help them in making new strategies for their forex trades.

Fundamental analysis involves study and interpretation of various economic data and fundamentals. This includes studying interest rates, inflation rate, economic indicators, and employment rates.

Technical analysis involves the study and interpretation of technical data and charts.

But what are the differences between the two? Here they are:

Fundamental Analysis

Fundamental analysis is seen by many successful traders as one of the best ways to determine market movements. The aim of using fundamental analysis is to be able to gain a deeper understanding of a country’s performance. Being able to gauge how a country performs will help them determine if the value of their currency will rise or fall. The very center of this research is the economic performance of the country. Traders will pore through various economic data and economic indicators – and from there they can build a picture of how the country is fairing economically.

Fundamental analysis is a very holistic way of using information and data. It is not uncommon for traders to not just look at a country’s specific economic performance. They will also look at the global economic climate because these worldwide economic sentiments can also have a serious effect on a country’s economy. Fundamental analysis is also grounded more on long-term investments. If a country has been doing well economically and posting good economic numbers then the prospects for its currency to increase in value over time is quite high and most traders will usually ride that sentiment for the long-term.

Technical Analysis

Technical analysis deals with the historical prices and milestones of a currency’s value. Among traders who use technical analysis, their belief is that the currency’s past performance is the best indicator of how it will perform. Technical analysts do not really believe in looking at economic indicators. To them how a currency performs is a better gauge for their strategies. Their attention is solely focused on charts that indicate price movements based on hours, days or weeks. They use their analysis to determine the best entry point for a trade and where is the best exit point. Also, because of this perspective, they are not really concerned about long-term commitments to their position. They will make more frequent trades and will enter and exit the market a number of times.

So which one between fundamental analysis and technical analysis is a better direction to take? If you will look at how the big brokers and companies do their analysis you will see that they use a combination of fundamental analysis and technical analysis to better understand market movements and formulate better forex strategies. Doing both kinds of analysis is the best option since you get to see market movements from both perspectives. But your trading style is a big factor in the kind of analysis you should use. If you are more committed to long-term positions then fundamental analysis should be your focus. If you want more frequent trades and want to know when is the best time to enter and exit the market then you should use technical analysis.

Threat of war in Syria giving a boost to the US dollar

August 27, 2013 in Forex Articles

Geo-political concerns in the Middle East and rising tensions in Syria have given a boost to the US dollar against Sterling this morning. Sterling was trading above 1.57 USD last Wednesday and is now nearer the 1.55 USD level as the “flight to safety” has given a boost to the greenback. Continued weakness in emerging market currencies such as the Turkish Lira (due to its proximity to Syria) and Indian rupee is also giving a boost to the US dollar.

With the crisis in Syria getting worse and worse and the veiled threat from the US Secretary of State, John Kerry yesterday the threat of war seems to be increasing. With the US and UK on one side and the Russian and Chinese on the other, this is extremely serious.

The US dollar has been unloved and neglected since the beginning of July and perhaps  the US Secretary of State John Kerry’s quote, in the most forceful reaction yet to the August 21 gas attack outside Damascus, said President Barack Obama “believes there must be accountability for those who would use the world’s most heinous weapons against the world’s most vulnerable people.”

The Euro has been remarkably strong but the European single currency has also begun to show some weakness today from the fundamentally over-valued position it currently holds. With the Euro still above 1.3350 against the US dollar, there is plenty of room for a further correction not just due to the threat of war in Syria but also nervousness ahead of the German elections next month and the extremely high unemployment rate in Southern Europe.

Is this the turning point for the US dollar?

Time for the US dollar to recover from recent weakness?

August 23, 2013 in Forex Articles

On Wednesday 14th August,  Sterling was trading above 1.57 USD and the Euro was trading above 1.34 USD. On fundamentals, there seems to be disparity between the economic situation in the UK and Europe to justify the strength in their respective currencies. No doubt economic data in the UK recently has exceeded expectations with GDP figures revised upwards this morning, PMI Services figures at their best levels for more than 6 years and glimpses of recovery in employment figures. In Europe, Germany has started to show signs of recovery with data out this morning exceeding expectations. German export figures were better than expected for the second quarter, capital investment and construction investment exceeded expectations thus showing recovery in Germany. Eurozone PMI figures out yesterday were stronger than expected but France continues to disappoint with data out yesterday showing their PMI figures below 50 (<50 in contraction) and lower than expected.

 

Germany is the powerhouse of Europe with their strong sense of work ethic and efficiency as well as their excellent manufactured products from Mercedes to Miele and BMW to Bosch. Their products and reliability are the envy of the world. However, Germany is not Europe! There are countries in southern Europe were productivity is poor and the relaxed attitude of long lunches and “siestas” are still common. With unemployment amongst the 18-30 year olds in Greece, Portugal and Spain above 50%, finding a job is extremely difficult for this disheartened group of young adults. Austerity measures in parts of Europe has resulted in many people being extremely unhappy and thus lowering productivity and resulting in depression and illness.

 

Things will no doubt get better for Europe but with an exchange rate of 1.34USD against the Euro, exporting goods to the rest of the world (countries pegged to the US dollar) is not easy. This level cannot be justified on fundamentals. Sterling, too is at a level against the US dollar where exports are not competitive and from a purchasing power point of view goods in the US are far cheaper than the UK. The difference in the price of goods between Europe and the US is even greater. Upcoming elections in Germany in the next few weeks is going to make the currency markets nervous as there is no clear leader. Perhaps this will be the catalyst for prolonged weakness in the Euro and strength in the US dollar? Continued geo-political concerns in the Middle East will further enhance the credentials of the US dollar and this will put downward pressure on the Euro and Sterling.

All About Forex Orders

August 22, 2013 in Forex Articles

The instructions you make to enter and exit a trade in the forex market are called orders. There are different types of orders you can enter and while some orders are basic, other orders depend on the kind of forex trading strategy you have formulated.

Following are the basic order types you can place in the forex market:

Market order

This is the order you make if you want to buy or sell at the best price. For example, if you see that the ask price of the USD/JPY is 100.20, then you will be sold the currency at that price when you make a market order.

Limit Entry Order

With a limit entry order you can buy below or sell above the market at a specified price.

Following the USD/JPY currency pair stated above as an example, if it is trading at 100.20 but you want to sell when it reaches 100.40, you can either wait in front of your PC and click on the sell market order when you see it hit 100.40 or you can use a sell limit order that will automatically put a sell order for you when trading reaches 100.40. With the sell limit order, your trading platform will issue the order for you. Basically, you use the limit entry order if you think the price will reverse when it reaches the price you’ve earmarked.

Stop-Entry Order

This is the reverse of the limit entry order. With this order you can buy above or sell below the market at your specified price. If the USD/JPY price is at 100.20 and the value is moving up. You think that when it reaches the resistance of 100.40 it will continue to move up. All you need to do is to issue a stop-entry order at 100.40 and an automatic buy will be made at that value. You use stop-entry orders when you think the price is going to continuously move in one direction.

Stop-Loss Order

A stop-loss order is what you place if you want to minimize or prevent additional losses if the price does not go your way. If the USD/JPY value is at 100.20 and you had a long position. But instead of it rising, the value started falling, you can issue a stop-loss order 100.00 that will automatically institute a sell order at that value to close your position and minimize your loss.

A stop-loss order is extremely important because it means you won’t have to diligently look at your computer to monitor the value of your chosen currency pair in order to protect yourself from additional losses. The order will do it for you.

Trailing Stop

Trailing Stop can be seen as a kind of stop-loss order but the difference is that it moves as the price fluctuates.

If you’ve decided that you want to go short on USD/JPY at 100.50 with  trailing stop of 20 pips, it means your stop loss is at 100.70. If the value goes down to 100.20 this means the trailing stop will now move to 100.40.

Do remember that the stop will remain at this price. It will not widen if the price suddenly goes up and counter to your position. So, to add to the example above if the price is at 100.20, and the trailing stop is now at 100.40, and the price then moves back up to 100.35, the stop remains at 100.40. The trade remains open up until the price goes up and hits the 20 pips that you’ve set. When this happens a stop-loss order is automatically triggered and your trade is closed.

You may check AskMarioSingh.com for Further Forex trading resources.

Is the Indian Rupee near the bottom?

August 21, 2013 in Forex Articles

When there is blood on the streets, that’s the time to invest or as Warren Buffett says “Buy fear, sell greed” well perhaps it is time to take a closer look at the Indian Rupee. The currency has been in free fall since the start of the year as concerns about their budget deficit and inflation have spooked the currency. There is also political uncertainty with the government very unpopular ahead of elections next year and predictions of a hung parliament not doing any favours for the economy.

Last week, restrictions were imposed on how much its citizens and companies can invest abroad. This is supposed to have reduced pressure on the Rupee but the  currency has fallen further since with the Indian Rupee comfortably above the 100 level against Sterling. This morning the Indian Rupee was trading above 101 against the pound and nearly 65 against the US dollar. This level was unthinkable even a few months ago. Capital restrictions will adversely impact company profits and tightening capital restrictions will discourage foreign investment which is obviously not good for the economy.

 

India’s main concern is the huge current account deficit which is 4.8 per cent of its gross domestic product. The plunging Rupee has raised concerns that the country may have its sovereign credit rating downgraded to “junk” thus encouraging even further falls in the currency. With sentiment weak and business financing conditions and investment growth expected to weaken further, the likelihood of a downgrade increases.  A downgrade in its rating would mean higher borrowing costs for Indian companies and thus impact margins and profitability. The falling Rupee has made imports much more expensive and inflation an even greater concern with higher import prices for day to day essentials like onions! Remember the high price of essential food items will cause civil unrest where the majority can barely afford to eat.  This in turn will cause further political instability – not the best reasons to invest in a country.

The currency is undoubtedly undervalued at current levels and a great place for tourists to visit and stay in its beautiful hotels which are at least 20% cheaper than a few months ago due to the sharp depreciation  but there is always an overshoot in the FX markets and the currency could continue to fall a little more but surely we are near the bottom. With all the problems in the Indian economy it is no surprise that it is the worst performing currency in Asia. The country has a very strong domestic economy and has potential to recover from its current state but the record current deficit and slow growth needs to be addressed.

 

Yesterday, the Reserve Bank of India said it would buy long-dated government bonds worth  Rs 8000 crore (£800 bn/ $1.25bn) through an open market operation on Friday. Perhaps, this will give the currency some stability and act as the catalyst in the Rupee recovering. We wait with bated breath.

Sterling approaching 1.56 USD as recovery continues in the UK economy

August 15, 2013 in Forex Articles

Economic data out earlier this morning from the UK at 930am highlighted the strength of the UK economy. Better than expected retail sales for July figures came out at 3.0% versus expectations of 2.7% year on year. Retail sales in the UK jumped by 1.1% in July, according to the Office for National Statistics (ONS).

The rise was significantly larger than expected and means sales are up 3% compared with last year – the fastest annual rise since January 2011. The positive sentiment on the High Street adds to indications that the UK’s economy is beginning to recover from its deep recession. The retail industry accounts for about 5.7% of the economy.

Food sales increased by 2.1%, their largest rise since April 2011 as sunny weather saw customers buy more food, alcohol and clothing. The better than expected figures gave a boost to Sterling with the pound extending yesterday’s gains and fast approaching the 1.56 USD level.

 

Falling mortgage rates and rising consumer confidence is driving a consumer led recovery with strong retail sales but there needs to be caution as inflation concerns will start to weigh on the currency after the strong run from 1.48 USD to the current level.

 

Recent data from the UK has been very good with GDP coming in at double expectations of 0.6% and PMI services at the highest level since 2006. On Wednesday, official unemployment figures showed that the number of those out of work is also continuing to fall thus once again highlighting the recovery in the economy in the UK.  The UK is outperforming its European peers but this has not been reflected in currency strength against the Euro, with Sterling still hovering close to a 52 week low against the single European currency. Sterling is currently trading around 1.17 Euro, less than 3 cents above its 52 week low and more than 10 cents below the 52 week high. With much better economic data it is strange that the markets have not boosted Sterling more against the Euro.

 

The further strength in Sterling today will put pressure on exports and with the pound at 1.56 USD exporters are having a tough time. How long will this continue?

 

Currency Speculators cut back on US Dollar long bets last week

August 4, 2013 in Forex Articles

By CountingPips.com


cot-values



The weekly Commitments of Traders (COT) report, released on Friday by the Commodity Futures Trading Commission (CFTC), showed that large futures traders and currency speculators decreased their bullish bets of the US dollar last week for a second consecutive week.

Non-commercial contracts by large futures traders, including hedge funds and large International Monetary Market speculators, trimmed their overall US dollar long positions to a total of $24.45 billion as of Tuesday July 30th. This was a decrease of $4.24 billion from the total long position of $28.69 billion that was registered on July 23rd, according to calculations by Reuters that determine this amount by the total of US dollar contracts against the combined contract totals of the euro, British pound, Japanese yen, Australian dollar, Canadian dollar and the Swiss franc.

US dollar positions have now fallen for two straight weeks.

COT explanation: The weekly cot report summarizes the total trader positions for open contracts in the futures trading markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators).

Individual Currencies Large Speculators Positions in Futures:

The large non-commercial net positions for each of the individual major currencies directly against the US dollar last week saw weekly increases for the euro, British pound sterling, Japanese yen, Swiss franc, New Zealand dollar, Canadian dollar and the Mexican peso while only the Australian dollar had a declining number of large speculator positions for the week.

Notable changes: Euro net speculative contracts improved to their best position since June while the Australian dollar net positions have fallen to the most bearish position of its recent decline.

Individual Currency Charts:


EuroFX:

eur

Last Six Weeks of Large Trader Positions: EuroFX

Date Lg Trader Net Change
06/25/2013 17357 -2673
07/02/2013 -16090 -33447
07/09/2013 -40900 -24810
07/16/2013 -37165 3735
07/23/2013 -27900 9265
07/30/2013 -8504 19396



British Pound Sterling:

gbp

Last Six Weeks of Large Trader Positions: Pound Sterling

Date Lg Trader Net Change
06/25/2013 -19429 977
07/02/2013 -31324 -11895
07/09/2013 -34259 -2935
07/16/2013 -37446 -3187
07/23/2013 -49653 -12207
07/30/2013 -49463 190



Japanese Yen:

jpy

Last Six Weeks of Large Trader Positions: Yen

Date Lg Trader Net Change
06/25/2013 -61462 428
07/02/2013 -70736 -9274
07/09/2013 -80305 -9569
07/16/2013 -85762 -5457
07/23/2013 -87496 -1734
07/30/2013 -82135 5361



Swiss Franc:

chf

Last Six Weeks of Large Trader Positions: Franc

date Lg Trader Net Change Weekly
06/25/2013 2464 -3327
07/02/2013 -116 -2580
07/09/2013 -1776 -1660
07/16/2013 -4969 -3193
07/23/2013 -5433 -464
07/30/2013 -1261 4172



Canadian Dollar:

cad

Last Six Weeks of Large Trader Positions: CAD

date Lg Trader Net Change Weekly
06/25/2013 -10638 15449
07/02/2013 -16250 -5612
07/09/2013 -23829 -7579
07/16/2013 -20043 3786
07/23/2013 -16758 3285
07/30/2013 -11434 5324



Australian Dollar:

aud

Last Six Weeks of Large Trader Positions: AUD

date Lg Trader Net Change Weekly
06/25/2013 -61644 1877
07/02/2013 -70515 -8871
07/09/2013 -63255 7260
07/16/2013 -70686 -7431
07/23/2013 -63982 6704
07/30/2013 -72573 -8591



New Zealand Dollar:

nzd

Last Six Weeks of Large Trader Positions: NZD

date Lg Trader Net Change Weekly
06/25/2013 -711 -2837
07/02/2013 -1174 -463
07/09/2013 -1008 166
07/16/2013 -2744 -1736
07/23/2013 -1846 898
07/30/2013 -520 1326



Mexican Peso:

mxn

Last Six Weeks of Large Trader Positions: MXN

date Lg Trader Net Change Weekly
06/25/2013 4981 -15968
07/02/2013 2847 -2134
07/09/2013 8035 5188
07/16/2013 11366 3331
07/23/2013 19799 8433
07/30/2013 24888 5089

The Commitment of Traders report is published every Friday by the Commodity Futures Trading Commission (CFTC) and shows futures positions data that was reported as of the previous Tuesday (3 days behind).

Each currency contract is a quote for that currency directly against the U.S. dollar, a net short amount of contracts means that more speculators are betting that currency to fall against the dollar and a net long position expect that currency to rise versus the dollar.

(The graphs overlay the forex spot closing price of each Tuesday when COT trader positions are reported for each corresponding spot currency pair.)

See more information and explanation on the weekly COT report from the CFTC website.

 

Article by CountingPips.com

 

Large Currency Speculators trimmed US Dollar bullish bets. GBP & JPY bets drop for 4th week

July 29, 2013 in Forex Articles

By CountingPips.com


cot-values



The weekly Commitments of Traders (COT) report, released on Friday by the Commodity Futures Trading Commission (CFTC), showed that large futures traders and currency speculators cut back on their total bullish bets of the US dollar last week after increasing their positions over the previous three weeks.

Non-commercial large futures traders, including hedge funds and large International Monetary Market speculators, pared their overall US dollar long positions to a total of $28.69 billion as of Tuesday July 23rd. This was a decrease from the total long position of $29.61 billion that was registered on July 16th, according to position calculations by Reuters that derives this total by the amount of US dollar positions against the combined positions of euro, British pound, Japanese yen, Australian dollar, Canadian dollar and the Swiss franc.

COT explanation: The weekly cot report summarizes the total trader positions for open contracts in the futures trading markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators).

Individual Currencies Large Speculators Positions in Futures:

The large currency speculator net positions for each of the individual major currencies directly against the US Dollar last week showed weekly increases for the euro, Australian dollar, New Zealand dollar, Canadian dollar and the Mexican peso while the British pound sterling, Japanese yen and the Swiss franc all had a declining number of large speculator positions for the week.

Notable changes: Euro net speculative contracts rose modestly for the second straight week while the British pound and Japanese yen net positions both fell for the fourth consecutive week and the Swiss franc net positions dropped for the fifth week.

Individual Currency Charts:


EuroFX:

eur

Last Six Weeks of Large Trader Positions: EuroFX

Date Lg Trader Net Change
06/18/2013 20030 27563
06/25/2013 17357 -2673
07/02/2013 -16090 -33447
07/09/2013 -40900 -24810
07/16/2013 -37165 3735
07/23/2013 -27900 9265



British Pound Sterling:

gbp

Last Six Weeks of Large Trader Positions: Pound Sterling

Date Lg Trader Net Change
06/18/2013 -20406 33281
06/25/2013 -19429 977
07/02/2013 -31324 -11895
07/09/2013 -34259 -2935
07/16/2013 -37446 -3187
07/23/2013 -49653 -12207



Japanese Yen:

jpy

Last Six Weeks of Large Trader Positions: Yen

Date Lg Trader Net Change
06/18/2013 -61890 11016
06/25/2013 -61462 428
07/02/2013 -70736 -9274
07/09/2013 -80305 -9569
07/16/2013 -85762 -5457
07/23/2013 -87496 -1734



Swiss Franc:

chf

Last Six Weeks of Large Trader Positions: Franc

date Lg Trader Net Change Weekly
06/18/2013 5791 26529
06/25/2013 2464 -3327
07/02/2013 -116 -2580
07/09/2013 -1776 -1660
07/16/2013 -4969 -3193
07/23/2013 -5433 -464



Canadian Dollar:

cad

Last Six Weeks of Large Trader Positions: CAD

date Lg Trader Net Change Weekly
06/18/2013 -26087 9820
06/25/2013 -10638 15449
07/02/2013 -16250 -5612
07/09/2013 -23829 -7579
07/16/2013 -20043 3786
07/23/2013 -16758 3285



Australian Dollar:

aud

Last Six Weeks of Large Trader Positions: AUD

date Lg Trader Net Change Weekly
06/18/2013 -63521 -244
06/25/2013 -61644 1877
07/02/2013 -70515 -8871
07/09/2013 -63255 7260
07/16/2013 -70686 -7431
07/23/2013 -63982 6704



New Zealand Dollar:

nzd

Last Six Weeks of Large Trader Positions: NZD

date Lg Trader Net Change Weekly
06/18/2013 2126 -527
06/25/2013 -711 -2837
07/02/2013 -1174 -463
07/09/2013 -1008 166
07/16/2013 -2744 -1736
07/23/2013 -1846 898



Mexican Peso:

mxn

Last Six Weeks of Large Trader Positions: MXN

date Lg Trader Net Change Weekly
06/18/2013 20949 -42825
06/25/2013 4981 -15968
07/02/2013 2847 -2134
07/09/2013 8035 5188
07/16/2013 11366 3331
07/23/2013 19799 8433

The Commitment of Traders report is published every Friday by the Commodity Futures Trading Commission (CFTC) and shows futures positions data that was reported as of the previous Tuesday (3 days behind).

Each currency contract is a quote for that currency directly against the U.S. dollar, a net short amount of contracts means that more speculators are betting that currency to fall against the dollar and a net long position expect that currency to rise versus the dollar.

(The graphs overlay the forex spot closing price of each Tuesday when COT trader positions are reported for each corresponding spot currency pair.)

See more information and explanation on the weekly COT report from the CFTC website.

 

Article by CountingPips.com

 

Sterling’s recent run against the US Dollar over?

July 25, 2013 in Forex Articles

Britain’s recovery picked up  in the second quarter, official figures have confirmed, with GDP expanding by 0.6% which was the expected figure, so no surprises but the growth rate is double the previous quarter figure. The 0.6% rate of growth was the figure predicted by economists. There have been signs of a pickup in retail sales but margins have been hit. The Office for National Statistics said that all sectors of the economy saw growth between April and June. Both industrial production, and the key services sector, expanded by 0.6%, the ONS said, with construction – which has been a heavy drag on the economy in recent quarters – picking up by a healthier than expected 0.9% helped by incentives from the UK government.

Sterling fell back sharply against the US dollar after the release of the figures, having been above 1.5380 before the GDP announcement the pound quickly fell to 1.5330 and is currently at 1.5320. Sterling had had a very strong run from 1.48 USD to close to 1.54 USD in the last three weeks. Today’s confirmation of the GDP figures from the UK, although good that it is the first time since 2011 that the UK has seen back-to-back quarterly increases, after a 0.3 per cent rise at the beginning of this year. The figures are still on the low side especially when compared with U.S GDP figures. The decline in Sterling soon after the announcement of the figures will probably continue and it would not be a surprise if the 1.50 USD level is breached possibly within the next couple of weeks. The new Bank of England governor Mark Carney is known to want Sterling to depreciate and want the UK to become more of an export oriented economy and boost exports.

GBP and EURO looking overvalued against the US Dollar

July 23, 2013 in Forex Articles

Last week’s Bank of England minutes pushed Sterling sharply higher against the US dollar  as The Bank of England’s monetary policy committee voted 9-0 to leave interest rates and quantitative easing unchanged.

This sharp rally in Sterling should be used as an opportunity to short the pound again against the US dollar. Sterling has continued to make headway and earlier today was trading at 1.5380, it has since fallen back a little and currently trading at 1.5370. This rally in Sterling from 1.48 USD in the first week of July to the current level is a  good entry level to open short positions in the pound. GDP figures out on Thursday will be influential in determining Sterling in the short-term but a lot of good news for Sterling has already been factored in and there is plenty of room for disappointment. The 1.50 USD level should be broken before the month is out again.

The Euro has had a strong rally against the US dollar in the last couple of weeks rising from 1.28 USD to the current level of 1.32 USD. This rally in the Euro should be an opportunity to go short again. Europe is still in a mess and the rally in the Euro is baffling. In recent week’s Portugal has struggled  to come up with a plan to cut its deficit and could need another bailout. Spain is still in recession and uncertainty in the political situation in Italy is of concern once again. Elections in the powerhouse of Europe – Germany in the next few weeks will also start to cause anxiety in the markets. It should not be too long before the Euro is trading below 1.30 USD again.

The Eurozone crisis could reignite over the summer as political clashes and a weak commitment to austerity could scare the markets and the US dollar will be sought which no doubt will not only weaken the Euro but also Sterling. Continue to buy the USD on any weakness and sell the British pound and Euro against the greenback.

Daily review 11 June 2013 – Dollar lower against yen on BoJ inaction

June 11, 2013 in Forex Articles

The yen climbed this morning against all of its 16 currency counterparts after the Bank of Japan disappointed investors with a lack of new easing measures to its monetary policy as they expected extension of very low interest loans to banks. Following the news, the Japanese currency managed to offset its previous two-session losses against the dollar and was trading at 98.16 at the time of writing, compared to its yesterday’s low of 99.27.

The yen has recovered by 3.9% so far, since its stormy falls which started at the end of last year. For the same period the euro has reported a rise by 2.5% while the dollar has remained almost unchanged.

The British pound was slightly changed from its earlier advances against the greenback after mixed UK economic data was released today, trading at $1.5552 at the time of writing. The Industrial Production has surpassed forecasts both on monthly and annual basis, with the actual figures being 0.1% and -0.6%, respectively. The Manufacturing Production revealed a -0.5% drop (YoY), reigniting worries for a slow-performing British economy.

 

Meanwhile, the Australian dollar is losing ground in a third consecutive session. The Aussie fell to a three-year low on data that the country’s Home Loans have declined to 0.8%, far exceeding experts’ forecasts for a 2% rise. At the time of writing, the Aussie was trading at $93.36. Investors will be following the release ofAustralia’s Westpac Consumer Confidence due tomorrow, as a high reading will help rebound the Aussie.

 

Source: dfmarkets.co.uk

 

Disclaimer: The Content of these charts and analyses does not constitute any form of advice or recommendation by Delta Financial Markets to buy, sell (or refraining from making) any trade or investment. You may wish to seek independent advice before entering into transactions.

Delta Financial Markets shall not be held liable by you or any others for any decision made or action taken by you or others based upon reliance on or use of information or materials obtained or accessed through use of these technical analyses and charts. DF Markets assumes no responsibility for errors, inaccuracies or omissions in these materials, nor shall it be liable for damages arising out of any person’s reliance upon the information on this page. DF Markets shall not be liable for any special, indirect, incidental, or consequential damages.

 

 

 

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.