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Strong & Weak: Australian Dollar Rejected at Key Level
Talking Points:
The USD and JPY are historically seen as safe haven currencies. When we see these currencies occupying the weak side of the analysis that has represented a risk “on” environment in the past. The big question is will this trend continue?
Since the majority of traders have already bought the Dollar, then they become a future pool of potential sellers when they decide to close out their trade. This emotion is likely accelerated if they are in a losing position.
However, the lack of follow through has me concerned about broad based USDOLLAR weakness. The single currency has several reasons to weaken, yet it remains stubborn. Therefore, be careful that the oversold levels may revert back to the mean and the Buck might actually strengthen.
Australian Dollar Tags 200 Day Simple Moving Average :
the Australian economy is tied closely to the performance of the Chinese economy. China is important to the worldwide economy. So if weakness begins to erupt in China, it could spill over into other major economies like the United States and Australia negatively affecting their stock markets.
As a result, the Australian Dollar is a good proxy for worldwide stock markets. With the rally we’ve
seen in equities for the past couple weeks, the Aussie has enjoyed strength as well.
Now that equities are near the top of their ranges, there is an increased probability of a dip to modestly lower levels. If the stock markets shift sideways to lower in the range, we can reasonably expect the Aussie to move lower. Therefore, the trading opportunity is to sell the Australian Dollar currency basket.
Executing the Trade
Since we don’t know which currencies the Aussie is likely to underperform against, so we will take a diversified approach and sell the Australian Dollar against a basket of currencies.
The basket allows us to trade a currency rather than a pair. Therefore, we can boil the performance of the trade down to the Australian Dollar.
We recommend risking less than 5% on all open trades. As a result, risk less than 1-2% on this basket so you have additional capacity to take on other trades.
On the other hand, the Australian Dollar found strong resistance at the 200 Day Simple Moving Average.
METALS OUTLOOK: Gold Traders Watching $1,350/Oz Level, FOMC For Next Week's Action
Traders who follow technical charts and those who watch fundamental factors both have something to monitor next week in the gold market, as gold trades around the pivotal $1,350-an-ounce area ahead of a Federal Open Market Committee two-day meeting.
December gold futures rose Friday, settling at $1,352.50 an ounce on the Comex division of the New York Mercantile Exchange, up 2.9% on the week. December silver fell Friday, settling at $22.639 an ounce, but up 3.3% on the week.
In the Kitco News Gold Survey, out of 34 participants, 26 responded this week. Of these, 20 see prices up, while five see prices down and one sees prices sideways. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.
Gold prices rallied this week, supported by a weaker dollar. December gold futures prices on Thursday settled a hair above $1,350, and on Friday managed to shrug off earlier losses to add to a second day of settlements north of $1,350.
Bob Haberkorn, senior commodities broker, RJO Futures called the move “impressive for the bulls.”
Because of the near-$38 an ounce price rise this week, he sees the market adding to its gains in the coming week.
Part of what might determine if gold can hold above $1,350 an ounce is how the market acts after the November options expiration, said George Gero, precious metals strategist and vice president at RBC Capital Markets Global Futures. He said some of the selling on Friday is from traders who wanted to get out of positions ahead of time. “If we get a close above $1,350 after options expire, we could see the market work higher,” he said.
Gold has struggled to move much above $1,350 in the past, market watchers noted. The market has held in a wider range of about $1,280 to $1,350 recently, with physical buying coming in at the lows and selling by exchange-traded-fund investors when prices rise. One precious metals trader at a bullion bank said while he sees higher prices next week, “the only fly in the ointment is that premiums on the Shanghai Futures Exchange are slipping and that shows that Chinese are selling gold. (That may be) just some profit taking, though.”
Frank Lesh, broker and futures analyst with FuturePath Trading, pointed out several technical-chart considerations to keep in mind. He said he believes gold is likely to trade around the current area as the market consolidates its recent gains.
“Gold has retraced over 50% of the recent range of $1,434 to $1,251. This midpoint is $1,342 and should become an important support area. Looking at this year’s range of $1,704 to $1,182, this market still has a ways to go to achieve the midpoint of $1,443, with $1,381 the 0.382 (Fibonacci) retracement level. Gold did push through the down trend line and remains above the 20-day (moving average) for now. Gold is now a trade against the dollar and the inverse correlation is very strong right now,” Lesh said.
Next week also brings the FOMC meeting, which concludes on Wednesday. The Fed is widely expected to stand pat on its quantitative-easing program. Analysts said a combination of the lack of economic data because of the three-week U.S. government shutdown and the likely hit the economy took because of the closure are among the reasons the Fed will continue the program.
There’s debate whether the Fed’s announcement will push gold through $1,350. Bulls said confirmation that the Fed will continue to buy bonds could encourage traders to buy gold, especially if dollar weakness persists. Haberkorn doesn’t agree.
“I don’t think we’ll see a big move after the Fed. We couldn’t hold after the surprising news after the September meeting,” he said.
Haberkorn said while he thinks gold could see gains next week, he doesn’t see gold in a new bullish trend.
“For the rest of the year, I’m thinking we’re going to be in a tug-of-war and a lot of sideways action going on. I can’t see the bullish trend (restarting) until we get over $1,430. What I’d do now is play the ranges and be willing to do some short-term trades,” he said.
The problem gold – and other precious metals – have is that there’s a lack of outsider investor interest for now, he said. Instead, he said, “they’re all in the equity market. Our customers tell us they’re killing it in equities and you open your 401(k) and it’s like Christmas time. So people have their eyes off metals.”
Tiger Woman on Wall Street: Winning Business Strategies from Shanghai to New York and Back by Junheng Li
The author’s new book “Tiger Woman On Wall Street” will be released on Nov 8, 2013 by McGraw Hill.
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When foreigners visit China, they are often impressed by the country’s spectacular hardware: the modern architecture of the coastal areas, the fancy international hotels and luxury shopping malls, a high-speed railway that runs at more than 180 miles per hour while still providing passengers with Wi-Fi access.
The continuous news cycle that contrasts China’s economic success with the lukewarm economic recovery in the U.S. and E.U. reinforces this view. A poll released in July by the Pew Research Center shows that many people around the world believe China is poised to overtake the U.S. as the world’s leading superpower. China’s economy continues to chug along at more than 7.5%, with projections showing that it will surpass the American economy by 2030. Many Americans think that it is merely a matter of time before China takes over the world.
But what is conveniently dismissed, amidst the popular American declinism, is that China still lacks the “software” to support and sustain the impressive hardware. By software, I refer to the rule of law, accountability, governance, and most importantly the quality of its people, as citizens, workers and managers. China’s educational system has failed to produce either an honorable or an innovative labor force – defined broadly to include those who make their living by their hands and by their brains.
Drawn to the American values of individualism, freedom and social mobility, I left China in 1996 to pursue a liberal arts education at Middlebury College in the rural Vermont. During the 17 years since I left China, it is astonishing to notice that education remains first and foremost a device for drilling party ideology into impressionable minds, despite the dramatic changes in the society and economy. Textbook material exemplifies and glorifies the party—how it takes care of its people, the way a parent does for a child, and how society should therefore be appreciative and obedient, ready to put self-interest aside when the party asks.
Teaching ideology in itself is not a problem, but dictating which idea is right or wrong is a problem. Every school in the world teaches some sort of ideology. American schools prioritize freedom of choice and individualism, for example. They encourage students to dare to be different, to think out of the box, to take risks, and to lead. The products of those ideologies include some of the world’s greatest innovators, such as Bill Gates, Mark Zuckerberg, and Steve Jobs.
Junheng Li, Tiger Woman On Wall Street
We are having paypal, webmoney, credit or debit card and QIWI Wallet/ But, as Renat told in his profile - we are having to have Bitcoins soon. So, this is small a small article/news about Bitcoins :
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Bitcoin Singapore Conference Roping in Brilliant Speakers
Bitcoin Singapore Conference to be held on November 15th at the Fullerton Hotel will have celebrated speakers who are going to enlighten audiences with their expertise and experience in the Bitcoin economy. The majestic Fullerton Hotel will be welcoming the participants from around the world this fall.
Impressive List of Speakers
The following speakers have been roped in to speak at the Bitcoin Singapore Conference: Asher Tan of CoinJar, Zennon Kapron of Kapronasia, Steve Beauregard of GoCoin, Hakim Mamoni of DealCoin – Seedcoin, Konrad S Graf – economist, Adam Vaziri of Neopay – Diacle, Ken Lo of Anx.hk, Anthony Hope of MartixVision, Charlie Shrem, Joseph Lee of BTC.sx, Gtabriel Miron of MEXBT.com and Jesse Heaslip of BEX.io.
Charles ‘Charlie’ Shrem IV, the 23 year old American businessman and entrepreneur who co-founded the Bitcoin startup company BitInstant and is currently working as Vice Chairman of the Bitcoin Foundation, will be the star speaker at the conference. His success at an early age is going to inspire others in the industry to make it big.
Another star speaker at the conference is Hakim Mamoni. He co-founded Seedcoin, and founded DealCoin and now stays in Chengdu, China, where he created a mobile and internet application startup.
Adam Vaziri will be another speaker who is expected to provide great insight on Bitcoin. He is a UK lawyer in technology and currently working with Neopay Ltd on licensing e-money and payment institutions.
Sponsors and Partners
The organizers of the conference have also roped in some outstanding sponsors and partners who are contributing to the success of the event. BTC Robot and BitTunes are sponsoring the conference. On the other hand, Bitcoin Institute and Seedcoin are the partners in the event.
Patience in Forex Trading
As the saying goes, “Patience is a virtue.” When it comes to investing, this is especially true. But although even the best traders and investors understand how important patience is, very few have mastered the skill. Patience in trading is a disciplined art and must be practiced intensively before it becomes automatic.
Whether it’s with stocks, commodities or Forex, holding back from a knee-jerk reaction to trading is difficult to do. Logic takes a back seat to our emotions and we end up making a quick, often non-judicious, decision. Reigning in our need for quick results is an acquired talent.
Here’s what usually happens: As a trader, you’ve done your due diligence, sought out the best Forex broker and opened an account. Intellectually, you choose the direction in which the currency pair will move, (based on a gut feeling?) and wait. The price starts to move in the opposite direction and you start to panic. You place an order below your planned entry point in a rush to make sure you don't miss the trade. You’ve now diminished some of your potential profit. More importantly, you have broken the rules that caused you to enter the trade in the first place.
Letting your emotions take over your decisions can be very dangerous in the long run. Emotions can be seen as the trader's worst enemies; they often lead to misjudgment and loss. Learning how to stand back, take time to analyze the situation and then move forward is always the prudent thing to do. Setting yourself rules and keeping to them is a way of holding the emotional side of trading at bay.
Trading Opportunities
When it comes to trading, keep in mind that there are always many trading opportunities in the market; the difficulty is not so much in finding trading opportunities, but making sure the opportunities fit your trading rules. Since 80% of all Forex trades end in a loss, the chances losing your money far outweigh those of coming out ahead.
Learning to use financial graphs and Forex indicators can be beneficial in training yourself in trading patience. Taking the time to read the graphs properly and interpret the indicators provides you with an emotional brake and offers a short interval between the time you make your decision to move and actually placing the trade.
Patience in trading is also needed after you have placed the trade. If the price moves in the direction anticipated, you must then choose whether to sell and take a small profit or wait till the price moves even higher. Small profit vs. large profit or possible loss. If you wait too long, the price could start to move in the wrong direction and you will lose. If you act too hastily and sell, you haven’t given yourself the chance for the price to move back up.
Again, this is where your set of trading rules comes into play. If you decided beforehand that your will be satisfied with a small profit, then you will move to sell once the price moves even slightly in the anticipated direction. If you have decided to sit out the trade till it reaches the highest price, then you can stay firm in your trade and wait it out. If it keeps going up and you sell, you have profited; if it turns around, you can lose all your money.
If you follow your own goals and strategies, then you will have more patience in trading than if you set yourself up without any guidelines. Practicing patience in trading reduces your stress, removes unexpected surprises and makes Forex trading a lot more fun.
2013-10-28 22:30 GMT (or 23:30 MQ MT5 time) | [AUD - RBA's Governor Speech]
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Stevens Says Aussie Likely to Be Materially Lower in Future
Australia’s central bank Governor Glenn Stevens said the local currency’s level isn’t supported by costs and productivity in the economy and the nation’s terms of trade are more likely to fall than rise. The Aussie dropped.
“The foreign exchange market is perhaps another area in which investors should take care,” Stevens said today in the text of a speech in Sydney. “It seems quite likely that at some point in the future the Australian dollar will be materially lower than it is today.”
“It would be a mistake to relax for very long in the face of this delay. Surely the ‘taper’ will come,” he told a Citigroup Inc. conference. “For some countries, including Australia, the beginning of a return to something resembling more normal conditions, in at least one major advanced country, would lessen some of the difficulties we face in our own policy choices.”
2013-10-29 14:00 GMT (or 15:00 MQ MT5 time) | [USD - Consumer Confidence]
if actual > forecast = good for currency (for USD in our case)
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U.S. Consumer Confidence Falls Sharply Due To Government ShutdownWith the government shutdown weighing on expectations, the Conference Board released a report on Tuesday showing a substantial deterioration in U.S. consumer confidence in the month of October.
The Conference Board said its consumer confidence index tumbled to 71.2 in October from an upwardly revised 80.2 in September. Economists had been expecting the index to fall to 75.0 from the 79.7 originally reported for the previous month.
With the much steeper than expected monthly decrease, the consumer confidence index fell to its lowest level since April.
Lynn Franco, Director of Economic Indicators at the Conference Board, said, "Consumer confidence deteriorated considerably as the federal government shutdown and debt-ceiling crisis took a particularly large toll on consumers' expectations."
"Similar declines in confidence were experienced during the payroll tax hike earlier this year, the fiscal cliff discussions in late 2012, and the government shutdown in 1995/1996," she added. "However, given the temporary nature of the current resolution, confidence is likely to remain volatile for the next several months."
2013 Remaining Market Outlook And What To Do Next - Fiscal Uncertainty and a Santa Claus Rally
Investors continue to listen for clues from the Federal Reserve and are making adjustments to their portfolios to brace themselves for an inevitable environment of rising interest rates.
The following portfolio management ideas for careful and thoughtful consideration remembering that any investment portfolios should be custom tailored to an investor’s specific financial goals, income needs, investment timeframe and tolerance for risk :
Trading is Methodical - Markets are Emotional
Talking Points
For example, traders tend to get emotional because they think the market is methodical. Traders will have a methodical approach such as using trend lines to enter trades. Assuming this approach has worked reasonably well in the past, if the market moves against the position, the trader is surprised. There is a support trend line, the market HAS to bounce higher, yet it moved lower.
In essence, the trader has projected their methodical approach onto the market and begins to believe the market is methodical. When we believe the market is methodical, we rationalize the trend line break as a false break and hope prices return to a profitable level.
As you can see, the trader let their emotions into their trading by assuming the market was methodical. When the market doesn’t do what we expect, then we let poor trading techniques into our trading plan and account. Poor trading techniques such as adding to a losing position, using no stop loss, or widening a stop loss level are common mistakes emotional traders make.
What to Expect From Your Forex Account
As we place trades and orders in our account, remember that your strategy of when to place orders is the method and do not want over emphasize each pip, trade, or market movement. Each trade is just one of a thousand insignificant trades. Trading is a game of 3 steps forward then 2 steps backward. When you expect perfection, you will be disappointed. Therefore, expect losing trades.
You may be wondering, how many losses are needed to become a better winner?
A common misconception is that a strategy’s success hinges on a high win ratio. That is simply not true. Some of the best strategies win only 40-50% of the time.
What is a good win ratio? There is no grand formula. It is not a one size fits all approach, but determine the strategy’s edge using the win ratio. Then confidently trade your method and let the market’s emotions determine the outcome of the trade.
Lastly, expect losses to be incurred and prepare for them through low leverage so the majority of your equity is preserved.
2013-10-30 08:55 GMT (or 09:55 MQ MT5 time) | [EUR - German Unemployment Change]
if actual < forecast = good for currency (for EUR in our case)
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German Unemployment Rises a Third Month as Growth Slows
German unemployment rose for a third month in October, adding to signs of a slowdown in Europe’s largest economy.
The number of people out of work climbed a seasonally-adjusted 2,000 to 2.97 million, after gaining by a revised 24,000 in September, the Nuremberg-based Federal Labor Agency said today. Economists predicted no change, according to the median of 36 estimates in a Bloomberg News survey. The adjusted jobless rate was unchanged at 6.9 percent.
The German economy, which helped to pull the 17-nation euro area out of recession in three months through June, probably expanded at a slower pace in the third quarter, the Bundesbank said on Oct. 21. Sentiment among companies on the economic outlook dipped for the first time in six months in October amid uncertainty over the pace of the recovery in the currency bloc, Germany’s biggest trading partner.
“Survey indicators are weakening a bit and the big concern that we have is that even German companies are not investing that much,” said Anatoli Annenkov, senior economist at Societe Generale SA in London. “If we have continued growth in the third and fourth quarter, we can start to look forward to continued improvement in the labor market.”