Press review - page 107

Sergey Golubev
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2013-03-13 05:45 GMT (or 06:45 MQ MT5 time) | [CNY - Industrial Production]

if actual > forecast = good for currency (for CNY in our case)

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Weak Data Signal China Slowdown

China's industrial production, retail sales and fixed investment grew less than expected in the first two months of 2014, underscoring the moderate slowdown in the region as measures to clamp down credit suppressed investment.

Industrial production increased 8.6 percent year-on-year in the January to February period, the National Bureau of Statistics said Thursday. Production was forecast to grow 9.5 percent, following a 9.7 percent rise in December.

Another report from the statistical office showed that retail sales grew by a double-digit 11.8 percent year-on-year during the two months, which was weaker than the 13.5 percent increase forecast by economists.

Further, urban fixed asset investment during January to February increased 17.9 percent from the last year, which was also slower than expectations for 19.4 percent.

The government targets 17.5 percent fixed asset investment growth for the whole of 2014, after it advanced 19.6 percent in 2013.

Nonetheless, economic data in January and February are usually distorted by the Lunar New Year holiday.


Sergey Golubev
Moderator
113440
Sergey Golubev  

5 Software Stocks to Buy Now (based on investorplace article)

ENVI, GA, INTU, PWRD, EVOL improve in weekly rankings
Sergey Golubev
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Sergey Golubev  
Trading the News: USD - Michigan Consumer Sentiment (based on dailyfx article)
  • U. of Michigan Confidence to Improve for Second Consecutive Month
  • Has Held Above 80 for the Last Three-Month; High of 85.1 in 2013

A further pickup in the U. of Michigan Confidence survey may prop up the U.S. dollar ahead of the Fed’s March 19 meeting as it raises the prospects for a stronger recovery in 2014.

What’s Expected:

Time of release: 03/14/2014 13:55 GMT, 9:55 EDT
Primary Pair Impact: EURUSD
Expected: 82.0
Previous: 81.6
Forecast: 80.0 to 83.0

Why Is This Event Important:

Indeed, positive developments coming out of the U.S. economy may heighten bets of seeing another $10B reduction in the asset-purchase program, but an unexpected decline in household sentiment may drag on interest rate expectations as Fed Chair Janet Yellen pledges to retain the zero-interest rate policy even after achieving the 6.5% threshold for unemployment.

How To Trade This Event Risk

Bullish USD Trade: Consumer Confidence Climbs to 82.0 or Higher

  • Need to see red, five-minute candle following the release to consider a short trade on EURUSD
  • If market reaction favors a long dollar trade, sell EURUSD with two separate position
  • Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward
  • Move stop to entry on remaining position once initial target is hit; set reasonable limit
Bearish USD Trade: Household Sentiment Unexpectedly Falters
  • Need green, five-minute candle to favor a long EURUSD trade
  • Implement same setup as the bullish dollar trade, just in the opposite direction

Potential Price Targets For The Release

  • Stalls at Trendline Support, 61.8% Fib Expansion- Higher High in Place?
  • Break of Bullish RSI Momentum to Highlight Near-Term Correction
  • Interim Resistance: 1.3960-70 (61.8% expansion)
  • Interim Support: 1.3600 Pivot to 1.3620 (23.6 retracement)

Previous USD - Michigan Consumer Sentiment :



Sergey Golubev
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Sergey Golubev  

GBPUSD Technical Analysis (based on dailyfx article)

  • GBP/USD Technical Strategy: Sidelines Preferred
  • Range between 1.6600 and 1.6765/70 intact
  • Dark Cloud Cover on weekly warns of larger correction

The range between 1.6600 and 1.6765/70 for the Pound remains in force. While a test of the range-top looked possible yesterday, sellers at the 50% Fib Retracement level at 1.6690 acted to cap the GBP/USD’s advance. This has resulted in a Bearish Engulfing candlestick pattern that is threatening a break of the range-bottom at 1.6600.





Forex Strategy - GBP/USD Range-Bottom At 1.6600 In Focus
Forex Strategy - GBP/USD Range-Bottom At 1.6600 In Focus
  • www.dailyfx.com
Be on the lookout for a bullish reversal signal in the session ahead as we go for another test of the range-bottom at 1.6600.
Sergey Golubev
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Bank of England calls in leading QC to investigate forex-rigging claims

Lord Grabiner to look into allegations Bank's own staff were involved in manipulating £3tn-a-day foreign exchange markets
Bank of England calls in leading QC to investigate forex-rigging claims
Bank of England calls in leading QC to investigate forex-rigging claims
  • Jill Treanor
  • www.theguardian.com
The Bank of England has called in one of the most respected figures in the legal world, Anthony Grabiner QC, to investigate allegations that some of its staff may have been involved in manipulating the £3 trillion-a-day foreign exchange markets for almost 10 years. Lord Grabiner was hired by News Corp to chair its standards committee in the...
Sergey Golubev
Moderator
113440
Sergey Golubev  

China's Twitter "Weibo" Files For $500 Million IPO (based on Forbes article)

The Chinese version of Twitter, Weibo, filed a preliminary prospectus on Friday for an initial public offering in the U.S. to raise $500 million.

Weibo was developed by Nasdaq-listed Sina Corp., which now owns the 77.6% of Weibo. A subsidiary of Alibaba Group owns another 19.3% through a $586 million investment made last April.

The IPO may be a step toward Weibo’s long-predicted spin-off from Sina. The filing says the transaction agreement “contains provisions relating to the company’s carve-out from Sina,” and that $250 million of the net proceeds will be used to repay loans to Sina.

Launched in 2009, Weibo boasted 129 million monthly active users as of December, according to its IPO filing. It allows users to post a feed of up to 140 Chinese characters with multimedia attachments, and in December alone some 2.8 billion of those feeds were posted. “Weibo allows people to be heard publicly and exposed to the rich ideas, cultures and experiences of the broader world.

Sergey Golubev
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The Forex Guide to Fundamentals, Part 1: What is a Fundamental? (based on dailyfx article)

  • Fundamentals tack economic changes
  • Traders want to buy the currency with strong fundamentals
  • Check the economic calendar for upcoming events
Trade analysis is normally grouped into two categories, Technical and Fundamental. Normally when developing a trading strategy, traders will choose one or even a combination of both forms of analysis when developing a trading plan. While its always important to know and understand key technical levels, it is also good to know what is fundamentally driving market price.

What is a Fundamental

So what is a market fundamental? A market fundamental is a piece of specific data or event that causes money to flow either in or out of an underlying asset. As a trader we attempt to find the strongest currency and pair it with a weaker one. This means when trading a fundamental strategy, we will be looking for a series of data points that makes one more attractive than the other.

Knowing this, traders should be factoring in things such as employment data, inflation, interest rates and even political turmoil before buying a particular currency. If the underlying fundamental data is improving or getting stronger we have found a candidate currency to buy relative to another with poor performance.

Economic Calendar


So now that you are a little more familiar with what a fundamental is, now we need to find all this data so we can make an educated trading decision. Every good fundamental trader should have access to an economic calendar. This is where we can see which data points are being released from week to week.
Traders should keep an eye on the calendar at all times, as data hits or misses expectations this will ultimately change our fundamental outlook on a currency.



Which Events to Track

The final question is which events we should follow. This is a fair question, because there is a slew of economic data released each week! To help make things easier, the high importance events have been marked on the economic calendar as high priority/impact. These are the events that our normally monitored by policy makers such as central banks and have the ability to immediately influence market price. While these events are certainly important, just watching events such as this week’s employment figures for the US may not give us an overall opinion of the market.

Watch the Market
Sergey Golubev
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The Forex Guide to Fundamentals, Part 2: Capital Flows & Interest Rates (based on dailyfx article)

  • Capital flows calculates money moving in and out of a currency
  • Economic events and interest rates all affect capital flows

Fundamental analysis in Forex studies economic factors that cause shifts in buying and selling patterns of traders. As demand increases for a currency so does its value. Likewise as money flows out of a currency its value begins to decrease.

What is a Capital Flow

Capital flows describes the flow of funds in to or out from a particular currency. Normally this flow is directly related to capital investments inside of a particular country. For instance, if foreign investors wanted to invest in stocks on the S&P 500, it would require Dollars to do so. This means money would flow into the USD from another currency to make the purchase.

The logic from here is one of supply and demand. If capital inflows exceed outflows that means there is a demand for countries currency. This can provide fundamental trading opportunities as for traders as prices rise to accommodate the new demand. This is also true with a net capital outflow. As there is less demand for a particular countries currency, we would expect a fundamental opportunity to place new sell orders.

Interest Rates & Central Banks

Interest rates are important to capital flows. As investors, speculators, and traders in general all look to maximize their returns they tend to look towards higher yielding investments. That means countries with the highest interest rates, and best economic data tend to see their countries strengthen due to capital flows.

One way to track capital flows is by monitoring economic data on the economic calendar along with central bank releases. Central banks are charges with setting the banking rate that is associated with their currency. As this value changes, so will demand for a particular currency pair.

Forum on trading, automated trading systems and testing trading strategies

Something Interesting in Financial Video January 2014

newdigital, 2014.01.15 07:13

What are interest rates?

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Interest Rate Expectation (adapted from this article)

  • Future interest rate expectations take precedence over the headline rate
  • If a country has a high interest rate, but no further increases are expected, the currency can still fall.
  • If a country has a low interest rate but is expected to raise interest rates over time, its currency can still rise

While it is easy for Forex traders to understand the logic of why investors move money from lower yielding currencies and assets to higher yielding assets and currencies. They may also believe that the simple mechanism of supply and demand is responsible for currency movement. However, this is only part of the story. The expectation of future interest rate increases or rate cuts is even more important than just the actual rates themselves.



For example, the United Kingdom had interest rates that hovered between 4.5 and 4.75% which was much higher than the 3.25% in the United States. Conventional wisdom would dictate that GBPUSD should have went up during this time period. However, as seen in the chart above, this was clearly not the case as GBPUSD headed lower. The reason for this was the expectations that the US Federal Reserve would begin a rate tightening cycle. The 250 basis point premium enjoyed in the UK at the beginning of 2005 narrowed to just 25 basis point difference. The Fed raised the interest rate from 3.25% in December 2004 to 6.00% by May of 2006.

If a central bank decides to one day, hike rates and then say that they are through raising rates for the foreseeable future, then a currency can still sell off though the interest rate was raised.

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Forum on trading, automated trading systems and testing trading strategies

Press review

newdigital, 2014.02.15 06:58

Trader Styles and Flavors (based on dailyfx article)

Technical vs. Fundamental

Technical analysis is the art of studying past price behavior and attempting to anticipate price moves in the future. These are traders that focus solely on price charts and often times incorporate indicators and tools to assist them. They look at price action, support and resistance levels, and chart patterns to create trading strategies that hopefully will turn a profit.

Fundamental analysis looks at the underlying economic conditions of each currency. Traders will turn to the Economic Calendar and Central Bank Announcements. They attempt to predict where price might be headed based on interest rates, jobless claims, treasury yields and more. This can be done by looking at patterns in past economic news releases or by understanding a country’s economic situation.

Short-Term vs. Medium-Term vs. Long-Term

Deciding what time frame we should use is mostly decided by how much time you have to devote to the market on a day-to-day basis. The more time you have each day to trade, the smaller the time frame you could trade, but the choice is ultimately yours.

Short-Term trading generally means placing trades with the intention of closing out the position within the same day, also referred to as
“Day Trading” or “Scalping” if trades are opened and closed very rapidly. Due to the speed at which trades are opened and closed, short-term traders use small time-frame charts (Hourly, 30min, 15min, 5min, 1min).

Medium-Term trades or “Swing Trades” typically are left open for a few hours up to a few days. Common time frames used for this type of trading are Daily, 4-hour and hourly charts.

Long-Term trading involves keeping trades open for days, weeks, months and possibly years. Weekly and Daily charts are popular choices for long term traders. If you are a part-time trader, it might be suitable to begin by trading long term trades that require less of your time.

Discretionary vs. Automated

Discretionary trading means a trader is opening and closing trades by using their own discretion. They can use any of the trading styles listed above to create a strategy and then implement that strategy by placing each individual trade.
The first challenge is creating a winning strategy to follow, but the second (and possibly more difficult) challenge is diligently following the strategy through thick and thin. The psychology of trading can wreak havoc on an otherwise profitable strategy if you break your own rules during crunch time.

Automated trading or algorithmic trading requires the same time and dedication to create a trading strategy as a discretionary trader, but then the trader automates the actual trading process. In other words, computer software opens and closes the trades on its own without needing the trader’s assistance. This has three main benefits. First, it saves the trader quite a bit of time since they no longer have to monitor the market as closely to input trades. Second, it takes the emotions out of trading by letting a computer open and close trades on your behalf. This means you are following your strategy to the letter and are not able to deviate. And third, automated strategies can trade 24 hours a day, 5 days a week giving your account the ability to take advantage of any opportunity that comes its way no matter the time of day.


Sergey Golubev
Moderator
113440
Sergey Golubev  

GOLD Fundamentals (based on dailyfx article)

Fundamental Forecast for Gold: Neutral

  • Gold Breaks $1,370 As Emerging Markets Fears Dominate Price Action
  • Weekly Price & Time: Gold Trades at Multi-Month High



Gold on 6 Week Streak- $1400 within Striking Distance Ahead of FOMC
Gold on 6 Week Streak- $1400 within Striking Distance Ahead of FOMC
  • Michael Boutros
  • www.dailyfx.com
What will move the US dollar in the week ahead? We are awash in major fundamental catalysts – the type that can generate meaningful trends and not just short-lived bouts of volatility.
Sergey Golubev
Moderator
113440
Sergey Golubev  

USDJPY Fundamentals (based on dailyfx article)

Fundamental Forecast for Japanese Yen: Bearish

  • Japanese Yen rallies sharply as Chinese trade data disappoints, sends Nikkei 225 lower
  • Lack of action from Bank of Japan allows the USDJPY to drop to fresh lows



Gold on 6 Week Streak- $1400 within Striking Distance Ahead of FOMC
Gold on 6 Week Streak- $1400 within Striking Distance Ahead of FOMC
  • Michael Boutros
  • www.dailyfx.com
What will move the US dollar in the week ahead? We are awash in major fundamental catalysts – the type that can generate meaningful trends and not just short-lived bouts of volatility.