FX UPcoming

Euro Erasing Gains, Pound Finds Support From Higher Retail Sales

The Pound continued its steady march higher reaching above 1.6500 after bottoming at 1.6309 yesterday. A 1.2% jump in retail sales help provide support but wasn’t the catalyst for the move. Consumer consumption rose after an unexpected 0.9% fall in May as apparel sales skyrocketed by 4.7%. The U.K. housing market also saw signs of improvement with home loans rising to 35,325-the highest since March, 2008-according to the British Banker’s Association.

The rise in mortgages confirms the BoE’s lending report which called for improvement in home loans in the months ahead. However, the report also stated that credit for consumers and businesses continues to remain a challenge which could increase the chances of further quantitative easing from the central bank. However, yesterday’s minutes from the MPC’s last policy meeting indicated that they are leaning toward ending the asset purchase program but will wait until they can better assess the impact of current actions. We should get further insights at the August meeting when the central bank will release its quarterly inflation report. Until then we could see sterling continue to remain range bound between 1.6000 and 1.6700 which could spell weakness ahead.

The Euro has started to erase earlier gains after reaching an intra-day high of 1.4267 as traders appear reluctant to become too bullish. There is still a fair amount of uncertainty pertaining to a global recovery and although there have been signs of improvement; broad based unemployment has limited the expected potential for a rebound in growth. The Euro-Zone current account showed that demand from abroad remains weak as exports fell by 5.9%. However, on a seasonal adjusted basis the deficit narrowed to -1.2 billion from -6.1 billion as it showed a surplus in the goods account. Meanwhile, French business confidence rose for a fourth straight month to 78 from 77 on improving household demand supporting the notion that the regions’ economy is stabilizing. Technically the support/resistance line at 1.4180 continues to be a key level and could limit downside risks today. Yet, if the Euro continues to remain range bound a re-test of 1.3900 remains a possibility over the near-term.

The dollar has come under some pressure overnight as we have seen an increase in demand for risky assets. Earnings season for the most part has been positive outside of Morgan Stanley’s loss yesterday which has limited downside risks. Today we will have several; blue chip names report including 3M, AT&T and McDonald’s which could impact sentiment. Regardless jobs and housing data today will generate significant focus as they still remain as the critical elements in a recovery. Initial jobless claims are expected to increase to 557,000 from 552,000 which could dampen optimism as unemployment is expected to continue to rise until the end of the year. Meanwhile, existing home sales could add to the signs that the housing market is stabilizing with an expected 1.3% increase in June.

Forex is actually the foreign exchange and deals in the goods, services and currency trading. Forex trading has gained prominence with the passage of time and more and more people have started chasing the trend. This concept of forex is purely based upon investment whether they are small, or big one.

Forex is also considered the economic indicator of economy and help to ascertain the financial picture of the nation. Also, forex market is the biggest financial and economical market of the world. Its money capacity is considered even larger than the equity and treasury markets.

Currency trading is the chief work undertaken in this market and thus, great risk factors are involved with them. It is also said that it reflects the true financial and economic condition of the country in a defined way. Moreover, currency trading also highlights the factors connected with the assets that country store.

It is generally said that forex is a very volatile market and prices fluctuate very quickly in fraction of seconds. So, while trading meticulous concentration should be paid so that you do not miss out any prominent moment where price has gone steeply upwards. This is considered as the most important forex trading strategy which can bring you huge sums of profits.

As per the different forex trading signals, emphasis must be paid upon the mediums through which you can get instant information. Thus, internet and mobile phones can serve the purpose in the most appropriate way. These different forex trading signals can get you access to the forex alerts all 24/7. This makes them highly convenient and hassle free service mediums.

Forex strategy system works on the economic driving force of demand and supply concept. Once the demand f any product increases steeply, it directly influences the supply side. On the overall picture of the forex trading system, it highlights the profitability of the forex market.

Forex alerts are also needed for the awareness about the changes that take place in the financial market of forex forex signals so that economic feasibility of that country can be determined accordingly. This in turn helps the economists for analyzing the different trends that influence the market. They after bring the new theories of economics that can help in understanding the forex strategy system in a better way.

Currency trading also help in exchanging the most used currency in which most of the trades of the country can be undertaken. In case, company wants to trade with any other country, at that time it requires its currency so that it can further undertake the business. Also, currency trading forms a vital part of investment that can help to earn profits.

Forex signals, forex strategy system, forex trading signal, forex alerts, forex signal and current trading are all important components often market of forex and influence the financial position of a country in a big way. So, Forex signals, forex strategy system, forex trading signal, forex alerts, forex signal and current trading should be studied in details so that you can trade in the financial markets in the most appropriate way.

SigmaForex

SigmaForex helps a various groups of partners around the world to enlarge their business and expand the full potential of the Forex market. A dedicated Partner Services team supports Sigma partners with a full range of account management services

Why Trade Forex?

There are plenty of good reasons to trade Forex, and if you have experience trading stocks or futures, you have a definite edge over the crowd. Let's take a look at why you should consider this market:

Huge Leverage
Incredibly, you get can 200:1 leverage on Forex pairs. In a mini account, $50 controls a $10,000 position! $500 controls a $100,000 position. This obviously means potentially huge profits. But what about the risk?

Limited Risk
With Forex, your stops are always honored, even on gaps. If you have a position on into the weekend and it gaps against you Sunday night, you will be filled at your stop price -- provided you have a stop in place. Plus, if your account should go to 0.00, your broker will automatically close out trading, so you can't possibly lose more than your margin deposit. If you've ever had a maintenance call from a broker, you'll appreciate this.

24-Hour Trading
If you just can't get enough trading out of your system during regular NYSE trading hours, you'll love the fact the Forex trades 24 hours a day, from the beginning of the Japanese session Sunday evening about 8 PM EST to the end of the US session on Friday at 4:00 or 5:00 PM EST. European bourses open at 3:00 AM EST, and the US session opens at 9:30 AM EST. The slowest periods are between 4:00 PM EST and 8:00 PM EST, between the end of the US session and the beginning of the Asian markets.

No Commissions/Low transaction costs
There's no question but that stock commissions have come down a lot, but with Forex, there is no commission -- your fee is the dealer spread. The spreads are small, usually about 4-5 PIPs. On a mini account, that's $4-$5.

Excellent Liquidity
This is an extremely active market, with $1.5 trillion traded daily in interbank market. Recently it has become wildly popular with traders around the world.

Tremendous Upside Potential -- And Fast
Because of the incredibly high leverage, you have the potential to double your investment quite rapidly -- in hours even. I'll show you a trade shortly to make this point.

What Is Forex and Forex trading?

Forex is an acronym for "foreign exchange," and involves trading pairs of currencies, i.e., buying one currency and selling the other in a single transaction. For example, USD/JPY is buy US dollar/sell Japanese yen. In this case, you expect the dollar to appreciate versus the yen, the yen to depreciate against the dollar, or both. The latter situation, of course, is ideal.

How Do You Calculate Price Movement?

Price movement for any foreign currency pair is calculated in "PIPs” (Price Interest Points) which are 1/10 of 1% of the contract size. For example, for a large account, a PIP is $10. For a mini account, one PIP will be $1.00. For example, on a mini account, let's take a quote of 1.2386 EUR/USD. If price moves to 1.2387, that's one PIP, or $1.00. 100 PIPs equals 1 basis point, or "BIP," so a move from 1.2386 to 1.2486 = one BIP, or $100. Not bad for $50 initial margin.

LMT FORUX FORMULA

Trading in the Forex market is becoming a popular option for people looking for an alternate source of income or even some extra cash to tide them over in these stringent times. However, the Internet is full of bogus products that claim to help you make tremendous profits in the Forex market. Many investors have lost huge amounts of money trusting these Forex programs and are undoubtedly skeptical about trying out any such product.
LMT Forex formula is one of the latest Forex programs in the market. What makes it any different from other products in the market? Well, to begin with, LMT Forex Formula is created by one of the most legendary traders in the Forex market- Dean Saunders. Saunders’ credibility and reputation is well established and anybody can see for themselves the amount of success he has had in the past. Also, Saunders has already also established a fine reputation and a Forex Expert. He has created other Forex programs in the past and all of them are known to be extremely effective. The Dean Saunders brand is enough to place your place in the product implicitly. But, that is not the only reason you should invest in this product. There are many unique features of this one-of-a kind product that make it irresistible. Here are some of its many features:

◦LMT Forex Formula does not automatically trade for you. Many investors have suffered losses with programs that carry on the entire trade on their own without any input from the user. By the time, the user can control the trading; he has already many pips shorter in his account. LMT Forex formula, on the other hand, identifies profitable trades and sets them up for you. Only if you feel comfortable with the trade, do you need to proceed with it.
◦You can trade in 10 different pairs with LMT Forex Formula. This provides the versatility required to find a profitable trade, but does not dilute the effectiveness of the program with too much additional information. By focusing on 10 pairs, you will get the expertise to make profit on them in no time.
◦LMT Forex Formula comes with a 47 page manual. This manual gives you all the information you need to get started with LMT Forex Formula. Even if you are a complete Newbie, you will find the manual extremely easy to read and even easier to follow.



You do not need to be a full time trader to make satisfactory use of the LMT Forex Formula. All you need is about 10-15 minutes of time on a daily basis. The LMT Forex Formula provides you with 4 checks for every trade and these 4 checks are all that you need to look into everyday. If you are satisfied with the checks, you can go ahead with the trade. Apart from that, you simply need to keep an eye on your existing trades and close them when the system recommends it.

Foreign exchange market

The foreign exchange market (currency, forex, or FX) is where currency trading takes place. It is where banks and other official institutions facilitate the buying and selling of foreign currencies. [1]FX transactions typically involve one party purchasing a quantity of one currency in exchange for paying a quantity of another. The foreign exchange market that we see today started evolving during the 1970s when worldover countries gradually switched to floating exchange rate from their erstwhile exchange rate regime, which remained fixed as per the Bretton Woods system until 1971.

Presently, the FX market is one of the largest and most liquid financial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other financial institutions. The average daily volume in the global foreign exchange and related markets is continuously growing. Traditional daily turnover was reported to be over US$3.2 trillion in April 2007 by the Bank for International Settlements.[2] Since then, the market has continued to grow. According to Euromoney's annual FX Poll, volumes grew a further 41% between 2007 and 2008.[3]

The purpose of FX market is to facilitate trade and investment. The need for a foreign exchange market arises because of the presence of multifarious international currencies such as the US Dollars, Euro, Japanese yen, Pound Sterling, etc..., and the need for trading in such currencies.

Euro Volatility Likely as Central Bank Delivers Interest Rate Decision

European Central Bank leaves rates unchanged despite high unemployment - German Retail Sales report boosts optimism on domestic consumption - Yet Euro Zone Industrial data points to weakness in demand

A busy week of economic event risk left the Euro almost exactly unchanged against the US Dollar, and it seems markets remain incapable of breaking the EURUSD from its multi-month range. Forex options markets showed that volatility expectations remained high ahead of the European Central Bank interest rate decision and the US Nonfarm Payrolls report, but sharp post-NFP moves were incapable of pushing the EURUSD below the key 1.4000 mark. Illiquid late-week trading invited a brief foray below the psychologically significant 4000 level, but a quick bounce signaled that few were willing to force a larger breakdown in the key currency pair. If the combination of an ECB rate decision and a US NFP release were not enough to break the Euro from its range, we see relatively little scope for big moves in the week ahead. Indeed, short-term volatility expectations have fallen substantially ahead of what may be yet another week of range trading.

Euro Zone economic event risk will likely take a backseat to broader financial market flows as the Euro/US Dollar pair remains tightly correlated to key risky asset classes. The rolling correlation between the EURUSD and Reuters CRB commodity index is once again near record-highs. It is subsequently unsurprising to note that Gold, Oil, and the US S&P 500 remain in similarly choppy price ranges prices through the past month of trading. The end-of-week tumble in the S&P index leaves it at risk for continued declines, but we will have to see a noteworthy break before calling for similar moves in the EURUSD.

Traders should keep an eye out for financial market reactions to the US ISM Services report and surprises from final revisions to Euro Zone Q1 GDP results. The former will shed light on the all-important US Services sector and has historically produced big moves in the S&P 500 and US Dollar. Markets remain on edge following a worse-than-expected NFP result, and we will need to see promising signs for US economic conditions to bolster investor confidence. A sharp drop in domestic equities could easily lead to similar moves in the US Dollar-potentially sending the EURUSD below key support. Later-week GDP figures could likewise provide impetus for Euro volatility. Recent revisions to Q1 UK GDP results sent the British Pound substantially lower against major counterparts. Although admittedly unlikely, similar changes to Eurostat's estimates for domestic economic growth could send the Euro lower versus major counterparts.

EURUSD volatility expectations remain muted, but we cannot rule out flare-ups in financial market tensions. It will be critical to watch whether many many key asset classes can break out of their month-long trading ranges-potentially sending the EURUSD beyond range-lows at 1.4000 or highs near the 1.4200 mark. - DR

Forex News Update

CHF: Reported intervention against EUR & USD

Reuters & Bloomberg yesterday reported speculation that the SNB has been buying both EUR and USD, consistent with a dramatic move in the CHF crosses. The perceived involvement in USD/CHF came as a surprise to the market, as the SNB had previously stated it would specifically buy euros as part of its intervention policy. But, the weakness in the USD and JPY had meant that daily estimate of the SNB’s trade-weighted exchange had appreciated by more than the level of EUR/CHF would suggest. Indeed, the Swiss TWI was at its strongest post-intervention level ahead of yesterday’s reported intervention - if this is what the SNB was concerned about, then it would make sense for them to intervene in USD as well as EUR. Intervention in USD/CHF is likely to be viewed as ramping up the SNB’s commitment to prevent the CHF from rising inordinately. Post-intervention sell-offs in the CHF have tended to be temporary, partly related to the SNB’s stance that it is not looking to weaken the currency, only to prevent it from appreciating. As such, there could more attempts to test the SNB’s resolve in the weeks ahead, but traders continue to expect EUR/CHF to remain well-supported.

ZAR: SARB rate decision today

South African consumer price inflation moderated to 8.0% y/y in May from last month’s 8.4% print, marginally higher than the consensus estimates for 7.9% y/y. While an improvement from the April print, it is noted that much of the moderation in today’s number stems largely from base effects, with the majority of the components in the inflation basket remaining sticky - particularly in the services components of CPI which makes up around 46% of the overall basket. Despite the broad-based nature of consumer price pressures, the SARB is likely to continue to see a moderating inflationary trend, driven largely through the country’s large output gap, which is expected to keep a lid on consumer price increases in 2009. Nevertheless, significant risks to the inflation outlook remain and a more conservative approach by the SARB is likely to be adopted at today’s MPC meeting. Market looks for a 50bp cut as a result.

Discritioanry Technichal levels

Asia Session Highlights

Consumer prices rose in June for the first month since February, said TD Securities in an estimate released today. In it, the brokerage firm stated that inflation came in at 0.4% on the month, dissenting from the previous period’s decline of 0.3%. The 12 months through the end of June saw such prices rise at a slower pace than they had prior, by only 1.4% vs 1.5%. Nonetheless, the slight increase for the month still managed to keep the metric within the Reserve Bank of Australia's 2.0% inflation target.

The Reserve Bank of New Zealand released a report today, on its website, titled “New Zealand Bank Funding Costs and Margins.” The report said that "a large part of the OCR cuts have been passed on to household and business borrowing rates." Since July of 2008, the bank has slashed its overnight cash rate by 600 basis points to 2.50%. Despite this effort, and the its visible results, the mortgage market might not exactly benefit as much as the RBNZ would have appreciated. The statement added that "the spreads between marginal funding costs and floating mortgage rates have widened in recent months to historically high levels." This noted reflection of risk-aversion might "hinder the efforts of monetary policy to stimulate economic activity." It is yet unclear whether such a statement will prelude another rate move down. But for now, one might choose to think that if 600 basis points worth of cuts have failed to ease the pressure on mortgage rates, that yet another move down might not be so effective in easing such a variable.

Governor Masaaki Shirakawa of the Bank of Japan shed some positive, yet cautious, light as to what he feels the direction of the Japanese economy may be. In a speech given in Tokyo at the Quarterly Branch Managers’ Meeting, he stated that the rate of economic deterioration in his country had begun to slow amid an upward turnaround in exports to foreign countries. Nonetheless, he cautioned that economists ought to watch for the downside risks associated with the deflationary environment that they are currently facing.

China's head of the National Bureau of Statistics, Ma Jiantang, says there is no risk of inflation for the country in the remainder of this year, Reuters reported. In a press conference given today, Ma stated his objection to such a notion. The 12 months through the end of of May saw the Asian country's consumer prices decline 1.4% with producer prices plummeting 10.4% in the same period.

Critical Levels

Price action on both the Euro and Pound saw volatility remain in check against the U.S. Dollar, before European equities began trading. Sterling, however, managed to break short-term support on a 60-minute chart dating back to July 2.

Forex Trading

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