Greece Riots, Euro Plummets

U.S. Dollar Trading (US) the negativity accelerated around the world with Protests in Greece turning Violent and the Greek PM offering to resign. US Stocks fell aggressively and US Data stunned to the downside. June NY FED dropped to -8 vs. 12 previously. In US stocks, DJIA -178  points closing at 11897, S&P -22 points closing at 1265 and NASDAQ -47 points closing at 2631. Looking ahead, Weekly Jobless Claims forecast at 420k vs. 427k previously. Also released, May Philly Fed forecast at 6.8 vs. 3.9 previously.

The Euro (EUR) the riots in Greece combined with news Moody’s placed three major French Banks for possible downgrade review. Support at 1.4400 broke quickly and the pair continued to plummet to fresh month lows under 1.4200. April Industrial Production rose 0.2% m/m as expected. Overall the EUR/USD traded with a low of 1.4155 and a high of 1.4439 before closing the day around 1.4190 in the New York session. Looking ahead, May CPI forecast at 2.6% vs. 2.6% previously m/m.

The Japanese Yen (JPY) the major moved higher as the USD outperformed on safe have flows. The yen did strengthen against risk currencies though with EUR/JPY breaking below the key Y115 level and NZD/JPY sharply back to Y65. Overall the USD/JPY traded with a low of 80.37 and a high of 81.07 before closing the day around 80.90 in the New York session.

The Sterling (GBP) was under heavy pressure on risk aversion and weak May Jobs data. UK May Claimant Count at +19.6k vs. 7k expected. EUR/GBP broke lower and this did provide support for Cable which found a base under 1.6200. Overall the GBP/USD traded with a low of 1.6168 and a high of 1.6379 before closing the day at 1.6190 in the New York session. Looking ahead, May Retail Sales forecast at -0.6% vs. 1.1% previously.

The Australian Dollar (AUD) was very strong in the Asian session when RBA governor spoke hawkishly about the chance of rate hikes if the July CPI data was above the bank’s target rate. This was reversed in the stock slump and Euro crash later in the day but losses were limited so far. AUD/NZD fared better rallying on weak milk prices. Overall the AUD/USD traded with a low of 1.0534 and a high of 1.0716 before closing the day at 1.0575 in the New York session.

Oil & Gold (XAU) was well supported on sovereign default fears testing above $1530. Overall trading with a low of USD$1513 and high of USD $1535 before ending the New York session at USD$1529 an ounce. Oil crash breaking key support at $98 and continuing to test $95 by the end of the day. WTI Oil Closed -4.30 at $95.30 a barrel.

TECHNICAL COMMENTARY

Euro – 1.4190                    

Initial support at 1.4142 (76.4% retrace of 1.3970-1.4697) followed by 1.4068 (May 26 low). Initial resistance is now located at 1.4248 (Jun 15 high) followed by 1.4500 (Psychological Resistance)

Yen – 80.90

Initial support is located at 79.57 (May 5 low) followed by 78.83 (Mar 18 low). Initial resistance is now at 81.01 (Jun 3 high) followed by 81.33 (Jun 2 high).

Pound – 1.6210

Initial support at 1.6173 (76.4% retrace of 1.6058-1.6547) followed by 1.6132 (May 25 low). Initial resistance is now at 1.6383 (Jun 15 high) followed by 1.6496 (Jun 1 high).

Australian Dollar – 1.0575

Initial support at 1.0510 (May 26 low) followed by the 1.0440 (May 25 low). Initial resistance is now at 1.0726 (Jun 8 high) followed by 1.0877 (76.4% retrace of 1.1012-1.0441).

Gold – 1526

Initial support at 1513 (May 24 low) followed by 1504 (May 23 low). Initial resistance is now at 1545 (June 6 high) followed by 1577 (All time high).

Oil – 95.30

Initial support at 95.00 (Intraday Support) followed by 94.30 (Intraday Support). Initial resistance is now at 98.00 (Intraday resistance) followed by 100.00 (Intraday Resistance).

Written by Anthony Darvall

Risk Off as Global Recovery Slows Down

U.S. Dollar Trading (US) US stocks continued to fall overnight with the weak Jobs data continuing to dampen sentiment. This Dollar gained through safe haven buying with risk assets sold including commodities. Fed Member Fisher commented QE3 would require very high hurdles to activate. In US stocks, DJIA -61 points closing at 12090, S&P -13 points closing at 1286 and NASDAQ -30 points closing at 2702. Looking ahead, FED Chairman Ben Bernanke speaks.

The Euro (EUR) came under pressure with uncertainty regarding the final bailout package for Greece inspiring profit taking from Friday’s rally. June Sentix slumped to 3.5 vs. 0.9 previously. The market listed Overall the EUR/USD traded with a low of 1.4556 and a high of 1.4659 before closing the day around 1.4585 in the New York session. Looking ahead, April Retail Sales forecast at 0.4% vs. -1% m/m.  

The Japanese Yen (JPY) the USD/JPY tested Y80 a few times in Europe but the level held firm before a small bounce towards opening levels. EUR/JPY selling added pressure but could also save the major with the uptrend providing support for USD/JPY. Overall the USD/JPY traded with a low of 79.96 and a high of 80.41 before closing the day around 80.20 in the New York session.

The Sterling (GBP) was very calm but pressured to the downside with the general risk off mood in the market. EUR/GBP tried to extend gains but failed to push much further into the 0.8900 region. The outlook is mixed to negative given the tough austerity measures announced by the government. Overall the GBP/USD traded with a low of 1.6284 and a high of 1.6438 before closing the day at 1.6430 in the New York session.

The Australian Dollar (AUD) fell back with the Euro and pressure from weak commodities. Support was found under 1.0700 and the market ended at opening levels. The RBA is ahead and could provide direction from the statement accompanying. Overall the AUD/USD traded with a low of 1.0690 and a high of 1.0769 before closing the day at 1.0725 in the New York session. Looking ahead, RBA announcement forecast unchanged at 4.75%.

Oil & Gold (XAU) moved another level higher testing above $1550 before falling back late in the day. Overall trading with a low of USD$1540 and high of USD $1553 before ending the New York session at USD$1544 an ounce. Oil fell back under $99 on concerns about global demand. WTI Oil Closed -1.21 at $99.01 a barrel.

TECHNICAL COMMENTARY

Euro – 1.4585                    

Initial support at 1.4451 (Jun 3 low) followed by 1.4308 (Jun 2 low). Initial resistance is now located at 1.4711 (76.4% retrace of 1.4940-1.3970) followed by 1.4800 (big figure resistance)

Yen – 80.25

Initial support is located at 80.00 (Big figure support) followed by 79.57 (May 5 low). Initial resistance is now at 81.33 (Jun 2 high) followed by 81.77 (May 19 high).

Pound – 1.6330

Initial support at 1.6268 (May 26 low) followed by 1.6132 (May 25 low). Initial resistance is now at 1.6496 (Jun 1 high) followed by 1.6547 (May 31 high).

Australian Dollar – 1.0735

Initial support at 1.0609 (May 27 low) followed by the 1.0510 (May 26 low). Initial resistance is now at 1.0758 (May 31 high) followed by 1.0877 (76.4% retrace of 1.1012-1.0441).

Gold – 1543

Initial support at 1524 (Jun 3 low) followed by 1504 (May 23 low). Initial resistance is now at 1550 (June 1 high) followed by 1577 (All time high).

Oil – 98.55

Initial support at 98.00 (Intraday Support) followed by 95.00 (Intraday Support). Initial resistance is now at 100.00 (Intraday resistance) followed by 103.00 (Intraday Resistance).

Written by Anthony Darvall – easy forex

Day Trading

What is day trading?

Day trading is one way of performing foreign exchange trading. Usually day trading deals are opened and closed on the same day – you can make as many trades a day as you want. It is your decision.

It is possible for a day trading deal to last longer than one day. When this happens, the deal is automatically renewed at 22:00 GMT each night until the deal closes. Upon renewal you will be charged a fee for rolling the deal for an extra 24 hours. This fee will be collected once a day when the deal is renewed. The fee will be collected form your Free Balance in your trading account, and if there is no sufficient free balance then your credit card will be debited. If there is no credit card, the next time you have a free balance and execute a withdrawal from your account, the amount owed due to non-payments of the rolling fee will be deducted from the amount you have withdrawn.

Day trading is becoming more popular now that more people use the Internet. It is one of the Forex instruments (or products) offered by easy-forex.

Be sure to also read Leveraged Trading after this article.

A day trading deal with easy-forex involves four main steps:

1. Decide to perform a Forex deal
2. Decide the deal you want to make and build it in your online account
3. Monitor the deal in your account
4. Close the deal

Here is an example using the four steps in detail:

Step 1: You decide to perform a Forex deal.
You believe USD will rise in value because you have followed the market and you think a rise is most possible in the near future. You decide to buy USD before the rise and sell after the rise. This way you will make a profit if indeed USD rises.

Step 2: Decide the deal you want to make
You choose the currency pair to trade. You might choose to trade EUR/USD, which means you buy or sell USD against the EUR. Once the USD increases to the level you expect, you close the deal. You then get more EUR for the amount of USD you bought.

Here is an example, putting aside the spread issue: assuming the rate for EUR/USD is 1.2600. This would mean 1 EUR costs 1.2600 USD. It also means you receive 1.2600 USD if you sell 1 euro. If EUR strengthens (i.e. the rate increases), and goes to 1.2700, you will pay 1.2700 USD to buy one euro (USD is now worth less), so selling back the EUR at 1.2700 in exchange for USD again will get you 1.2700 USD at a profit of 0.0100 USD. In this example, assuming you purchased 10,000 EUR, you have made 100 USD profit. Buying 10,000 EUR only requires 100 USD security deposit if you are using a 1:100 leverage. So in this hypothetical case, by investing 100 USD you made 100 USD profit. However, if the EUR would have decreased to 1.2500, you would have lost your 100 USD security deposit.

In real life however, the market maker is charging a spread, which is the difference between the bid and ask price at any given moment. However, the idea is that the change in the exchange rate exceeds the value of the spread (typically 3-5 pips) which still enables a profit to the investor.

Next you decide the amount you want to trade. You do not have to buy the whole amount because you can use leveraged trading. The most common leverage is 1:100.

Then you choose how much you want to risk. This is your investment.

You can set the Stop-Loss rate next. This is the rate at which your deal will automatically close if it goes against what you expect. While your deal is still open, you can change this rate at any time. At easy-forex^® we require you to set a Stop-Loss rate to ensure you do not lose more than you are willing to do. Do not to risk more than you can accept to lose.

easy-forex^® offers a unique Freeze rate feature. A Freeze will fix a rate for a short time if you need a few seconds to think about your position. It gives you more time to accept or refuse the deal on offer.

When you have made these decisions, you then press the Accept button and your deal is open.

Step 3: Monitor your account
Logging into your online account at easy-forex, you can look at how your account is progressing 24 hours a day, seven days a week. This gives you the chance to open and close deals or to change your deal whenever you want.

Step 4: Close the deal
You can choose to close the deal when you decide. If you have set a Stop-Loss rate and the deal reaches that rate, it automatically closes. Some traders find Stop-Loss rates a good way to make sure they do not lose more than the limit they set. The deal can also close automatically if you set a Take Profit rate. You are not required to set a Take Profit rate but it does mean that you are freed from constantly monitoring your positions.

Forex Market History

What is Forex

In Forex one currency is traded for another. The Forex market is the worlds largest financial market. Other names for this market is the foreign exchange market or the currency market.

How do currency traders make money? They spot opportunities, and take advantage of the smallest fluctuations in exchange rates. Forex is unlike no other financial market in the world. There is little or no inside information.

The basics of Forex trading is easy to understand:

• One currency is traded against another.
• You trade in pairs. For instance EUR/USD represents the euro as expressed in US dollars.
• The forex market is open 24 hours per day throughout the week.
• The spread between bid and offer is the difference between the buying price and selling price.

Understanding the reasons of Forex trading is importent for every trader. This series of articles on the history of currency trading, give an understanding of the mechanisms involved in the exchange of foreign currency, to see how financial markets work and what influence the movement of money.

Forex, or FX, stands for Foreign Exchange. Forex is the simultaneous buying of one currency and selling of another. Since you purchase money with money, there are two transactions (buying and selling) happening at the same time.

“Forex” stands for foreign exchange; it’s also known as FX. In a forex trade, you buy one currency while simultaneously selling another – that is, you’re exchanging the sold currency for the one you’re buying. The foreign exchange market is an over-the-counter market.

Currencies trade in pairs, like the Euro-US Dollar (EUR/USD) or US Dollar / Japanese Yen (USD/JPY). Unlike stocks or futures, there’s no centralized exchange for forex. All transactions happen via phone or electronic network.