ForexGen Strategies

Euro Rises Against US Dollar, Testing Key Resistance

fxgenstrategies — Mon, 29 Dec 2008 18:38:10 +0000

The Euro pushed higher against the US Dollar overnight, testing as high as 1.4170 and set to challenge critical, multi-year support/resistance levels. The British Pound diverged from the single currency, losing its grip on the 1.47 mark. Switzerland’s KOF Leading Indicator and UK Housing Equity figures are on tap in European hours.

Key Overnight Developments

• Euro, British Pound Diverge Against the US Dollar

Critical Levels

The Euro pushed higher against the US Dollar overnight, testing as high as 1.4171 and then settling in a narrow range above 1.4140. It seems the bulls are determined for another run at key support-turned-resistance at an upward-sloping trend line that had guided EURUSD higher since 2002 and was broken to the downside in October. Still, our EURUSD Exchange Rate Forecast points to the likelihood of a bearish scenario through January.

The British Pound diverged from the single currency, losing its grip on the 1.47 mark late into the session and sinking to test below 1.4650.

Euro Session: What to Expect

Tumbling real estate values are expected to see the Bank of England’s Housing Equity Withdrawal measure fall -3.3 billion pounds in the third quarter, following the first negative reading in a decade in the three months through June. A negative figure means that Britons put 3.3 billion more into their homes (via mortgage payments, for example) than they were able to get back in borrowing against their value. Naturally, that’s 3.3 billion less that is available for consumption and investment, weighing on overall economic growth. House prices have fallen 10.2% through December since peaking in May according to Rightmove PLC, a firm listing for-sale properties online.

In Switzerland, the KOF Leading Indicator is expected to print negative for the second consecutive month in December, falling to the lowest in over 5 years. The metric is an index of six indicators of Swiss economic performance for the following six to nine months. The negative reading suggests the mountain nation will not see economic growth for much of the coming year.

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After High-Profile Start, SC Limps to End of 2008

fxgenstrategies — Sun, 28 Dec 2008 22:22:05 +0000

Trials both communal and personal highlight a 2008 that for SC ends on a dark economic note

South Carolina started 2008 with a hand in shaping the nation's future. The year ends with the state battered by repercussions, from both within and beyond its borders.
Turmoil in the nation's housing market morphed into a crisis of credit and consumer confidence. Companies announced layoffs and the state's unemployment rate shot to the third-highest in the U.S. in November -- 183,000 were jobless as the holidays approached.

"The little people are suffering. It seems like the CEOs are walking away," Michael Jones, a 61-year-old former Army sergeant, as he applied for unemployment benefits earlier this month because his savings was drying up.
The state's drooping economy means fewer taxes to pay for the services expected from state and local governments, and trouble is in store for some schools and universities. State employees are losing pay through furloughs. For the state's low-income residents, programs that provide care for HIV patients, the terminally ill and the hungry are being slashed.
Economic forecasters believe it will get worse. They predict double-digit unemployment for 2009.

But in a year that for many ended with intensely personal economic travails, others had memories far more frightening.
A family in Anderson was slaughtered in April, and their teen son now stands accused of the murders. High schoolers in Chesterfield worried for their own safety this spring after authorities say a classmate planned to blow up the building.
A Hilton Head Island couple vanished in March and their former accountant committed suicide as suspicion fell on him. A boy in Sumter was gunned down as he and his family did the most innocent of activities: trick-or-treating on Halloween. Four people died and two musicians suffered burns when their private jet ran off the end of a Columbia runway in September and burst into flames.

There were moments when the state's dismay was communal, too.
Months after it opened, the $400 million Hard Rock Park filed for bankruptcy protection as the economy dashed the cheery predictions made before it opened. The owners now hope to sell it off.
The high price of gas this summer surely hurt the Myrtle Beach attraction. There was a sense of shared burden as drivers stood, cringing, in lines to pay $4 per gallon and then watched pumps run dry after hurricanes Gustav and Ike shut down refineries in the Gulf of Mexico. State prosecutors issued 37 subpoenas for price gouging and say the investigation continues.

Weather made life tough, especially in the Upstate, as a multiyear drought dragged on.
In Greenville, hundreds of suspected illegal immigrants were arrested in October and pointed toward deportation after an investigation into a poultry plant's hiring practices. The sweep that left the city's Spanish-speaking community wringing its hands left others wondering why local officials looked the other way for so long.
Dashboard cameras allowed a look into the working lives of South Carolina state troopers, and not everyone enjoyed the view. Footage showed a trooper striking a motorcycle with his cruiser; an officer not bothering to get out of his car as he chased a running suspect across the grounds of a populated apartment complex; a trooper striking a man with a shotgun after the suspect was subdued.
The heads of the state's Public Safety Department and Highway Patrol resigned in February. One trooper was acquitted of a federal charge in 2008, while a second awaits trial.

But the state also banded together to set the nation's course during the presidential primary season.
South Carolina's Republicans boosted John McCain on his path to the nomination, as the Arizona senator avenged his loss in the state to President George W. Bush in 2000. A week later, Democrats gave Barack Obama a resounding win and momentum the history-making candidate would never relinquish.
In all, the state hosted three debates between presidential contenders, and after vaulting Obama and McCain into a General Election showdown, a record 1.9 million state residents cast ballots in November.
But those days of presidential primaries are almost a year old. The focus now is on the economic troubles expected to cut a wider and deeper swath in the coming months.

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Types of Forex Orders

fxgenstrategies — Fri, 26 Dec 2008 03:31:30 +0000

Multiple types of orders are available in the forex market. Bear in mind that not all order types are available at all online brokers, so add order types to your list of questions to ask your prospective forex broker.

Take-profit orders

Don’t you just love that name? An old market saying goes, “You can’t go broke taking profit.” Use take-profit orders to lock in gains when you have an open position in the market. If you’re short USD/JPY at 117.20, your take-profit order will be to buy back the position and be placed somewhere below that price, say at 116.80 for instance. If you’re long GBP/USD at 1.8840, your take-profit order will be to sell the position somewhere higher, maybe 1.8875.

Limit orders

A limit order is any order that triggers a trade at more favorable levels than the current market price. Think “Buy low, sell high.” If the limit order is to buy, it must be entered at a price below the current market price. If the limit order is to sell, it must be placed at a price higher than the current market price.

Stop-loss orders

Boo! Sound’s bad doesn’t it? Actually, stop-loss orders are critical to trading survival. The traditional stop-loss order does just that: It stops losses by closing out an open position that is losing money.

Use stop-loss orders to limit your losses if the market moves against your position. If you don’t, you’re leaving it up to the market, and that’s dangerous. Stop-loss orders are on the other side of the current price from take-profit orders, but in the same direction (in terms of buying or selling). If you’re long, your stop-loss order will be to sell, but at a lower price than the current market price.

If you’re short, your stop-loss order will be to buy, but at a higher price than the current market.

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What Does Scalping Mean?

fxgenstrategies — Thu, 25 Dec 2008 01:29:10 +0000

Scalping is a trading strategy that the trader try to make many small profits with small price changes, the Scalper will place from dozens to hundreds trades in a single day because it’s believed that the small price moves are easier to catch than larger moves.
It based on an observation that the most of the price movements goes in the trader direction for a while of time before it goes in its trend direction!

In the Forex world a lot scalpers say “If I make a 20-25 pips per day by scalping the market and with a proper money management I might double my account balance every month”.
Theoretically, true! But what about the real? What about the risk of scalping the market?

Scalping risk:

While it seems profitable method when scalping the price movements, however the spread you pay when you open a trade makes the risk-reward more risky than the long term trading (trend trading).

For example if your broker charges you 5 pips spread for opening EURUSD position and your target is 10 pips and 10 pips stop loss; the price have to move 15 pips (5 pips of spread + 10 pips your target) to take the profit while it have to move only 5 pips (10 pips your stop loss - 5 pips of spread) and stop loss level will be reached.
So, the risk-reward ratio in this case is 2-1 which means a very dangerous and risky method to scalp!

Another risk in the Scalp is that one large loss could eliminate the many small gains that the trader has worked to obtain. So it needs a very good exit strategy to decrease this risk!

Why brokers hate scalping?

The most of brokers will not turn your trades with a market maker

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Dollar Edges Higher vs Euro, Pound, Yen

fxgenstrategies — Wed, 24 Dec 2008 01:10:24 +0000

Dollar edges higher vs euro, pound, yen in light holiday-week trading

The dollar traded mixed against major currencies Tuesday in light holiday trading.
The 15-nation euro inched up to $1.3967 in late New York trading, up from $1.3958 late Monday, while the British pound traded down to $1.4735 from $1.4865.
The dollar also rose to 90.68 Japanese yen from 90.07.

A stream of dour economic data on U.S. housing and economic activity left the buck largely unscathed as the end of the year approaches, especially as economies abroad show pain as well.
The Commerce Department reiterated that gross domestic product in the third quarter fell at an annual rate of 0.5 percent. The estimate is unchanged from last month. Economists expect a sharper decline in the current quarter.

Two housing reports on Tuesday, one from the Commerce Department on new home sales and one from the National Association of Realtors on existing home sales, fell by more than expected. New home sales fell 2.9 percent, to the slowest pace in almost 18 years, in November. Home resales fell by 8.6 percent to a yearly rate of 4.49 million in November. Both reports noted double-digit declines in median sales price.

The Dow Jones industrials finished lower for the fifth straight day, falling 100 points to 8,419.49.
In Britain, meanwhile, the government said the economy shrank by 0.6 percent in the third quarter, more than had previously been thought. The Bank of England is expected to cut interest rates close to zero in 2009.
Cutting rates can undermine a currency as investors transfer assets elsewhere, looking for higher returns. The Federal Reserve cut the federal funds rate to a range of 0.25 to zero earlier this month. Few major economies now have rates above Britain's current 2 percent.
In other currencies, the dollar slipped to 1.2133 Canadian dollars from 1.2185, and fell to 1.0871 Swiss francs from 1.0916.

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British Pound And Euro Technical Outlook

fxgenstrategies — Tue, 23 Dec 2008 02:21:43 +0000

British Pound Technical Outlook

The British Pound has found a short-term base against the US Dollar, holding highly-contested support near the psychologically significant 1.4700 mark. Its recent price formation likewise looks vaguely like an inverse head and shoulders pattern, and a break above 1.5500 would signal that a more medium term reversal is likely.

Shorter-term, the British Pound looks to challenge previous spike-highs at the psychologically significant 1.5000 mark.

Euro Technical Outlook

The Euro has stalled at significant resistance against the US Dollar, and we see further scope for Euro/US Dollar weakness through upcoming trade. After such dramatic US Dollar declines, we would expect to see similarly sharp corrections. A reversal at the pair’s 61.8 percent Fibonacci retracement of its 1.6040-1.2330 decline and 200-day Simple Moving Average signals further dramatic advances are unlikely.

The very short term shows that the Euro/US Dollar has thus far held short-term intraday lows of 1.3825, but a break below signals that a move towards previous lows near 1.3600 is likely.

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Qimonda Set For Euro325 Million Bailout

fxgenstrategies — Sun, 21 Dec 2008 20:54:06 +0000

Troubled memory-chip maker Qimonda AG on Sunday secured a rescue package of euro325 million ($452 million) in loans from a German regional government, parent company Infineon and a Portuguese state bank.
The Economy Ministry in the German state of Saxony, where Qimonda has a major plant, said in a statement that it achieved a "breakthrough" when Portugal agreed to join the rescue package through its state investment bank. The company has a facility in Porto, Portugal.
Munich-based Qimonda will get a euro150 million loan from Saxony, euro75 million from Infineon Technologies AG and euro100 million from the Portuguese bank, according to the ministry, Qimonda and Infineon.

Qimonda said that it also expects to receive loan guarantees worth euro280 million from the German federal government and Saxony.
In return for the package, the company said it committed itself to further developing its manufacturing and research facilities in Porto and in Dresden, Saxony's state capital.
Qimonda said earlier this month that it may face bankruptcy if it fails to find new investors. Makers of computer memory chips have been hit hard by falling prices and an oversupply of the products.

Sunday's moves "allow Qimonda to complete its repositioning ... and re-establish its competitive position in the memory industry," as well as invest in new technology, chief executive Kin Wan Loh said.
Infineon spun off Qimonda in 2006 and still holds a 77.5-percent stake. Saxony initially called on Infineon to contribute euro150 million to the rescue package, but the parent company said last week it could not provide that much.
Qimonda, which has more than 12,000 workers, said in October it would cut 3,000 jobs in the U.S. and Germany and sell its stake in Inotera -- a joint venture with Taiwan's Nanya Technology Corp. -- to Micron Technology Inc. for $400 million.

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An individual who is responsible for the entire financial portfolio of another individual or another entity. A money manager receives payment in exchange for choosing and monitoring appropriate investments for the client.

Benefits of being a Money Manager with [ForexGen]:

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* P = k * D “P=Profit, k=Variable Parameter, D=Deposits”

The money manager gets a fixed percentage of the profit previously agreed upon with the client for managing the client funds as a bonus feature.

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US Dollar Plummets as US 10-Year Treasury Yields Hit Record Lows

fxgenstrategies — Thu, 18 Dec 2008 19:55:03 +0000

A massive flight to quality has left US 10-Year Treasury Bond Yields at their lowest levels on record—further emphasizing extreme risk aversion in global financial markets. Banks and other financial entities unwilling to lend to one another have desperately sought safe haven for funds, and US Government debt has largely been the instrument of choice for many investors. Such flows have not resulted in net demand for US Dollars, however, as we have actually seen the US currency fall substantially against major forex counterparts.

US Treasury Bond Yields Hit Record Low

The Euro/US Dollar pair has actually moved lock-step with 10-Year Treasury Bond prices through the past several weeks of trading. Bond prices move inversely to yield, and this chart shows us that falling Treasury yields have coincided with Euro/US Dollar gains. Whether or not this is a lasting shift remains to be seen, but record-low Treasury yields can intuitively hurt demand for the US Dollar.

US Treasury Bond and the US Dollar

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Euro Soars Against US Dollar

fxgenstrategies — Wed, 17 Dec 2008 18:53:37 +0000

Euro Soars Against US Dollar - Is This a Trend Change or Retracement?

The Euro has registered some very impressive gains against the US dollar this week, adding nearly 5% in just the past two days. The pair is now re-testing the multi-year bullish trend line that had guided price action since 2002 and was broken to the downside at the beginning of October. This is the proverbial line in the sand: if the Euro manages to surpass this juncture, the bearish bias will be violated. However, the possibility remains that current EURUSD strength is corrective and the downtrend will resume following the re-test of support-turned-resistance.

EURUSD Spot (Weekly):

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Forex Traders Push US Dollar to Key Support - Is the Correction Over?

fxgenstrategies — Tue, 16 Dec 2008 18:46:13 +0000

The US Dollar has been punished by heavy selling pressure in recent days. The US Dollar Index, an average of the greenback's value against six top currencies, has now retraced 50% of the most recent leg of the rally starting in late September (see chart below). Support is being reinfoced by a key upward-sloping trend line that has guided USD higher since the multi-year down trend changed gears at historic lows in mid-July. This will be a formidable hurdle for US dollar bears to overcome, with any signs of exhaustion in downward momentum in the coming days opening the door for USD bulls to add to existing positions or initiate new ones.

US Dollar Index - Daily Chart

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