The euro was affected towards the end of this week’s session as U.S. consumer sentiment declined, raising risk aversion among traders which opted mostly for the yen and the dollar to protect their assets.
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Showing posts with label forex currency market. Show all posts
Showing posts with label forex currency market. Show all posts
The euro was affected towards the end of this week’s session as U.S. consumer sentiment declined, raising risk aversion among traders which opted mostly for the yen and the dollar to protect their assets.
Forex, the foreign exchange market, is the global market that trades currency and is largely influenced by the products and portfolios of a person or businesses country. Large financial institutions, businesses, and some individuals, earn millions each day by making careful decisions on what currency to buy or sell. The foreign exchange market is similar to the stock markets that exist in many countries but instead involves one global market making it the largest market in the world. Forex speculation is necessary because the rate of currency never stays the same. The value of the United States dollar changes each minute in response to the current and foreign events. The same is true for currencies world wide making the entire market move quickly and requiring quick decisions that can make millions. Many new foreign exchange traders have been attracted by the opportunity to make large amounts of money in a relatively short amount of time. What many do not realize, or chose to overlook, is that there is always the chance that an investor will lose a great deal of money because of bad investments. To avoid making bad choices in the foreign exchange market a great deal of Forex speculation is necessary. This speculation is used to help determine which currencies should be bought and which must be sold. In the foreign exchange market the major currencies are the United States dollar, the British Pound, the Euro, the Japanese Yen, and the Swiss Franc. These are only a few of the currencies being traded on the global market but they are the ones most often traded. In the Forex market you decide which currency you wish to sell based on its current value and potential to make money while buying currency that you believe will later make you money. Since foreign currency trading is done 24 hours a day with time changes world wide causing overlaps that will eventually affect foreign currencies leading to Forex speculation. While the Internet and home computer access has made it possible for anyone to enter the world of foreign exchange trading Forex speculation is not something that should be attempted by just anyone. Even with the many classes, courses, and seminars available through the Internet and in real life learning the art of Forex speculation takes time, practice, and experience. Well known foreign exchange brokers have been known to make a mistake from time to time and inexperienced individuals can find themselves in financial ruin if they are not careful. If you are interested in Forex trading and have no experience in the foreign exchange market it is in your best interest to find an experienced Forex broker to handle your trades. Finding a broker that is experienced in Forex speculation can help make your venture a success. Keep in mind, the foreign exchange market is not a guaranteed way to make money. Research your potential broker and begin with cautious investments. Investing a great deal of money into the fast paced world of foreign currency exchange could lead to a great loss if one is not careful.
Monday, Aug 10, 2009, 14:38 GMT
By John Hardy Consultant/FX Strategist Saxo Bank
Key days ahead for USDJPY as FOMC meeting likely to help decide whether rally is overambitious or a sign of more to come.
USD shaking off past behavior as positive employment sees USD strength. EURUSD looking to follow up on correction lower this week?
MAJOR HEADLINES – PREVIOUS SESSION
New Zealand Jul. QV House Prices fell -5.0% YoY vs. -7.1% in Q1.
Japan Jun. Adjusted Current Account Total out at ¥1799B vs. ¥1350B expected
Japan Q2 Housing Loans rose 0.4% YoY vs. 3.5% in Q1
Australia Jun. Home Loans rose 1.1% vs. 1.8% expected
Japan Jul. Preliminary Machine Tool Orders fell -72.2% YoY vs. -72.8% in Jun.
Norway Jul. CPI out at -0.6% MoM and underlying CPI at -0.6% vs. -0.2%/-0.2% expected.
THEMES TO WATCH – UPCOMING SESSION
(All times GMT)
UK Jul. BRC Retail Sales Monitor (2301)
UK Jul. RICS House Price Balance (2301)
Australia Jul. NAB Business Conditions/Confidence (0130)
China Jul. Producer/Purchasing Price Index (0200)
China Jul. CPI (0200)
China Jul. Retail Sales (0200)
China Jul. Industrial Production (0200)
China Jul. Trade Balance (no time given)
Japan BoJ Target Rate (no time given)
Japan Jul. Consumer Confidence (0500)
Market Comments:
Friday saw a watershed break from recent behavior in the USD, as the extension in the equity market rally failed to punish the greenback - a pattern we have seen so many times in the recent past. The Yen was the biggest loser vs. the dollar initially as bonds also came under significant pressure in an all-out riskfest immediately after the US employment report. But the European currencies have opened the new week here on a weaker note as equity markets have corrected lower after the rather limp US close on Friday and the JPY has taken back some of the lost territory vs. especially the pound sterling. Speaking of stock markets around the world, it is interesting to note that the Shanghai composite has had a rough going over the last several sessions and that many of the EM currencies are also finding it tougher to move stronger against the "safer" USD and Euro. So despite signs of continued optimism in some of the biggest markets, there are signs that risk appetite is waning a bit at the fringes of the market.
A very interesting article from Bloomberg today has China accusing Australia's Rio Tinto of "spying" and costing Chinese steel producers some $100+ billion over a 10-year period. It is a bit surprising that the story has not weighed more on the Aussie, as one can only wonder if any follow up move by the Chinese authorities down the road could have them bullying Australian companies in some way or even sanctioning them. China is set to release a raft of data tonight. It is becoming consensus knowledge that the Chinese numbers are fiction, so it is far more interesting to see how the markets react to the data than it will be to read the data and try to glean anything from it.
With last week's last day providing a very interesting pivot point in the market, it makes this week critical for the follow up action. The USD seems to have pivoted to the strong side and could be at least set for at least a consolidation to the strong side. The JPY was very weak on Friday, but it has been extremely rare to see, for example, a falling EURUSD and rising EURJPY simultaneously for any extended period of time, so the JPY will bear a good deal of watching, especially at this Wednesday's FOMC meeting and release of the new monetary policy statement. Has the BoE set the example by insisting on a very cautious stance and even expanding the QE programs as data has shown signs of recovery, comfortable in the face of enormous slack in capacity utilization and employment?
Any shock to the upside in bonds (fall in yields) this week as the 10-year yield approaches the critical 4% level - something the Fed probably eyes with extreme distaste unless it is buying what the green shootists are selling - could see the JPY pivot quickly back to the strong side. The JPY has been a tough nut to crack lately. The last time it had anything approaching as poor a performance as it saw on Friday, it marked a bottom and the JPY appreciated strongly for four or five weeks.
Chart: EURUSDA look at the weekly EURUSD chart shows the strong reversal from the attempt to new highs since the December spike. This sets up expectations for a try back lower to the lower end of the previous range. The first stress test comes with the rising trendline and then the more significant structural support in the 1.3750 area defined by an old high and retest combination (the orange flatline below). The 40-week (200-day) moving average is not in play anytime soon, but will rise rapidly in coming weeks.
More analysis: saxo bank market news and analysis
Risk Warnings:
Saxo Bank A/S shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee or implication by Saxo Bank that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis, especially leveraged investments such as foreign exchange trading and investment in derivatives, can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis do not occur as anticipated.
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What are the advantages of the Forex Market over other types of investments?
When thinking about various investments, there is one investment vehicle that comes to mind. The Forex or Foreign Currency Market has many advantages over other types of investments. The Forex market is open 24 hrs a day, unlike the regular stock markets. Most investments require a substantial amount of capital before you can take advantage of an investment opportunity. To trade Forex, you only need a small amount of capital. Anyone can enter the market with as little as $300 USD to trade a "mini account", which allows you to trade lots of 10,000 units. One lot of 10,000 units of currency is equal to 1 contract. Each "pip" or move up or down in the currency pair is worth a $1 gain or loss, depending on which side of the market you are on. A standard account gives you control over 100,000 units of currency and a pip is worth $10.
The Forex market is also very liquid. When trading Forex you have full control of your capital.
Many other types of investments require holding your money up for long periods of time. This is a disadvantage because if you need to use the capital it can be difficult to access to it without taking a huge loss. Also, with a small amount of money, you can control
Forex traders can be profitable in bullish or bearish market conditions. Stock market traders need stock prices to rise in order to take a profit. Forex traders can make a profit during up trends and downtrends. Forex Trading can be risky, but with having the ability to have a good system to follow, good money management skills, and possessing self discipline, Forex trading can be a relatively low risk investment.
The Forex market can be traded anytime, anywhere. As long as you have access to a computer, you have the ability to trade the Forex market. An important thing to remember is before jumping into trading currencies, is it wise to practice with "paper money", or "fake money." Most brokers have demo accounts where you can download their trading station and practice real time with fake money. While this is no guarantee of your performance with real money, practicing can give you a huge advantage to become better prepared when you trade with your real, hard earned money. There are also many Forex courses on the internet, just be careful when choosing which ones to purchase.
What are the advantages of the Forex Market over other types of investments?
When thinking about various investments, there is one investment vehicle that comes to mind. The Forex or Foreign Currency Market has many advantages over other types of investments. The Forex market is open 24 hrs a day, unlike the regular stock markets. Most investments require a substantial amount of capital before you can take advantage of an investment opportunity. To trade Forex, you only need a small amount of capital. Anyone can enter the market with as little as $300 USD to trade a "mini account", which allows you to trade lots of 10,000 units. One lot of 10,000 units of currency is equal to 1 contract. Each "pip" or move up or down in the currency pair is worth a $1 gain or loss, depending on which side of the market you are on. A standard account gives you control over 100,000 units of currency and a pip is worth $10.
The Forex market is also very liquid. When trading Forex you have full control of your capital.
Many other types of investments require holding your money up for long periods of time. This is a disadvantage because if you need to use the capital it can be difficult to access to it without taking a huge loss. Also, with a small amount of money, you can control
Forex traders can be profitable in bullish or bearish market conditions. Stock market traders need stock prices to rise in order to take a profit. Forex traders can make a profit during up trends and downtrends. Forex Trading can be risky, but with having the ability to have a good system to follow, good money management skills, and possessing self discipline, Forex trading can be a relatively low risk investment.
The Forex market can be traded anytime, anywhere. As long as you have access to a computer, you have the ability to trade the Forex market. An important thing to remember is before jumping into trading currencies, is it wise to practice with "paper money", or "fake money." Most brokers have demo accounts where you can download their trading station and practice real time with fake money. While this is no guarantee of your performance with real money, practicing can give you a huge advantage to become better prepared when you trade with your real, hard earned money. There are also many Forex courses on the internet, just be careful when choosing which ones to purchase.