Forex: A down market typically means a stronger currency
October 14, 2009 by Currency Trading Tips
Filed under FOREX Market
This week has been a strange and yet interesting week on the Forex. The volume has been incredibly light due to end of summer festivities in the US and Canada and Western Europe, however the flow of data and information has not ceased.
We have seen officials declaring the recession over, and yet only a few hours later a piece of Data comes out that contradicts that idea. And we have seen the Dollar getting bounced around.
September in the stock market is normally the worst month, about an average of 3% loss are recorded each year since 1929. While October is the “crash month” (last year alone the market fell 13% in October) the downfalls are few and far between – so September is the hard month.
A reason for this is that people come back from vacation and pull back their investments to gage the market and see what has happened – a portfolio reshuffle is how brokers define it.
In the forex trading though it is different: A down market typically means a stronger currency and although this works out most of the time, this year, 2009, we are not seeing this trend.
The worries that investors have now are no longer just about which company will do better next year, or which company is poised for a breakout, the concern is based on governmental activities and it is affecting the Forex’s relationship to stocks.
As currency is a true indicator of how strong a country is economically, traders have begun translating this into their stock holdings as well.
Which company will be most affected by government legislation or which organization will fall under a new law or which bank will need money?
The Dollar has been falling this month – in tandem with the US stock markets. The question remains for Forex traders, will this trend continue and if so, how low can it go?
The Dollar fell broadly on Wednesday, in the online forex market, after an informal data release showed a higher than expected rate of unemployment.
US employers in the private sector shed 298,000 jobs in August according to the ADP payroll report. The Dollar initially rose on risk aversion sentiment, however continued fears over the mounting governmental debt load along with a very light volume combined to bring the Dollar down in late session trading.
The ADP jobs report is an early indicator of how the official government “non-farm payroll” (NFP) report will look.
The NFP report is set to come out on Friday and includes both public and private industries. The consensus on the street is that 225,000 jobs will be reported as lost, although with private industry alone shedding close to 300,000, the NFP is likely to disappoint.
At 11:00 PM GMT, the Dollar was down .42% to the Euro to 1.4282, down .9% to the Japanese Yen to 92.15, down .85% to the British Pound to 1.6286, down .05% to the Canadian Dollar to 1.1041, down 1.2% to the Australian Dollar to .8357 up .2% to the Kiwi to .6736 and down .55% to the Swiss Franc to 1.0594.
The USD/CAD currency pair is up challenging that 1.1100/20 area again on weakness in the commodity currencies and a new sell-off in oil. A close above that level looks significant for further progression towards perhaps 1.1400 or more.
The 55-day moving average is up just above 1.1100 as well, but the USD/CAD doesn’t seem to have much of a habit of paying attention to that number.
If oil continues below 67 dollars a barrel and equities remain in a sour mood, it’s hard to see the pair not continuing its ascent. Structurally, the failed attempt to maintain new lows below 1.0800 recently has neutralized the old bearish trend, but we’ve no bullish confirmation just yet. 1.1120+ would be a first step.
Thanks to Forex Ace for contributing this article to our Currency Trading blog:
We have seen officials declaring the recession over, and yet only a few hours later a piece of Data comes out that contradicts that idea. And we have seen the Dollar getting bounced around.
September in the stock market is normally the worst month, about an average of 3% loss are recorded each year since 1929. While October is the “crash month” (last year alone the market fell 13% in October) the downfalls are few and far between – so September is the hard month.
A reason for this is that people come back from vacation and pull back their investments to gage the market and see what has happened – a portfolio reshuffle is how brokers define it.
In the forex trading though it is different: A down market typically means a stronger currency and although this works out most of the time, this year, 2009, we are not seeing this trend.
The worries that investors have now are no longer just about which company will do better next year, or which company is poised for a breakout, the concern is based on governmental activities and it is affecting the Forex’s relationship to stocks.
As currency is a true indicator of how strong a country is economically, traders have begun translating this into their stock holdings as well.
Which company will be most affected by government legislation or which organization will fall under a new law or which bank will need money?
The Dollar has been falling this month – in tandem with the US stock markets. The question remains for Forex traders, will this trend continue and if so, how low can it go?
The Dollar fell broadly on Wednesday, in the online forex market, after an informal data release showed a higher than expected rate of unemployment.
US employers in the private sector shed 298,000 jobs in August according to the ADP payroll report. The Dollar initially rose on risk aversion sentiment, however continued fears over the mounting governmental debt load along with a very light volume combined to bring the Dollar down in late session trading.
The ADP jobs report is an early indicator of how the official government “non-farm payroll” (NFP) report will look.
The NFP report is set to come out on Friday and includes both public and private industries. The consensus on the street is that 225,000 jobs will be reported as lost, although with private industry alone shedding close to 300,000, the NFP is likely to disappoint.
At 11:00 PM GMT, the Dollar was down .42% to the Euro to 1.4282, down .9% to the Japanese Yen to 92.15, down .85% to the British Pound to 1.6286, down .05% to the Canadian Dollar to 1.1041, down 1.2% to the Australian Dollar to .8357 up .2% to the Kiwi to .6736 and down .55% to the Swiss Franc to 1.0594.
The USD/CAD currency pair is up challenging that 1.1100/20 area again on weakness in the commodity currencies and a new sell-off in oil. A close above that level looks significant for further progression towards perhaps 1.1400 or more.
The 55-day moving average is up just above 1.1100 as well, but the USD/CAD doesn’t seem to have much of a habit of paying attention to that number.
If oil continues below 67 dollars a barrel and equities remain in a sour mood, it’s hard to see the pair not continuing its ascent. Structurally, the failed attempt to maintain new lows below 1.0800 recently has neutralized the old bearish trend, but we’ve no bullish confirmation just yet. 1.1120+ would be a first step.
Thanks to Forex Ace for contributing this article to our Currency Trading blog:
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Forex Currency Trading Explained for Beginners
April 25, 2009 by Currency Trading Tips
Filed under About Currency Trading
Forex currency trading is one of the most lucrative businesses you can get into these days. When the worries of financial turmoil loom just around the corner, it is good to have an extra source of income you can turn to. Forex currency trading is one of the fall backs you can count on if you have the right knowledge to back you up. Just as it is with any other business, forex trading success comes from hard work and the patience to learn and familiarize yourself with its ins and outs.
Forex currency trading is lucrative but it is also tricky especially for beginners. You have to be aware of its processes and gather enough information to help you come up with your own trading system. The currency trading game is a fast paced one and you always have to be flexible enough to keep up with the demands and the shifting preferences of buyers and sellers.
Forex Currency Trading’s Basics
Before anything else, you might as just want to ask - what is this forex currency trading thing anyway? This business works through a buy and sell process of various currencies. Players operating in this business game rely on exchange rates to know if it’s a good or bad time to sell their specific currencies. As you know, monetary currencies differ from each other in terms of amount but all of them are interconnected with each other. For example, a drop in the US dollar currency may mean a notable increase in euros or vice versa.
When you engage in forex currency trading, you do both the buying and selling of currencies. For example, you may buy euros under the price of US dollars. In essence you are selling the dollars to your business partner as you are buying his share of euros. This is also the reason why forex is also known as Foreign Exchange because there is mutual interaction between the participating business parties.
The Popularity of Forex Currency Trading
One of the reasons why it has become popular is because it offers safe and fast transactions. Regardless of the income that this business brings, people need to exchange currencies especially when visiting another country or when buying important items overseas. This secures the parties involved because it uses the exact exchange rate applied for each monetary value.
Eventually, forex currency trading became popular because of its volatile nature. Currencies never really stay in their current amount. Its rise and drop is dependent on a lot of factors which makes it an exciting and promising field. Anything can happen, which is why most of the forex players have their own tracking system to effectively scout the forex market for good buys. It also does not take much capital to make it a lucrative business. The important thing to have is a keen eye on the market paired with good intuition and some sense of foresight. You need to have a constant feel of the market when it comes to forex currency trading.
Thanks to Pete Miguel for contributing this article to our Currency Trading blog:
Forex currency trading is lucrative but it is also tricky especially for beginners. You have to be aware of its processes and gather enough information to help you come up with your own trading system. The currency trading game is a fast paced one and you always have to be flexible enough to keep up with the demands and the shifting preferences of buyers and sellers.
Forex Currency Trading’s Basics
Before anything else, you might as just want to ask - what is this forex currency trading thing anyway? This business works through a buy and sell process of various currencies. Players operating in this business game rely on exchange rates to know if it’s a good or bad time to sell their specific currencies. As you know, monetary currencies differ from each other in terms of amount but all of them are interconnected with each other. For example, a drop in the US dollar currency may mean a notable increase in euros or vice versa.
When you engage in forex currency trading, you do both the buying and selling of currencies. For example, you may buy euros under the price of US dollars. In essence you are selling the dollars to your business partner as you are buying his share of euros. This is also the reason why forex is also known as Foreign Exchange because there is mutual interaction between the participating business parties.
The Popularity of Forex Currency Trading
One of the reasons why it has become popular is because it offers safe and fast transactions. Regardless of the income that this business brings, people need to exchange currencies especially when visiting another country or when buying important items overseas. This secures the parties involved because it uses the exact exchange rate applied for each monetary value.
Eventually, forex currency trading became popular because of its volatile nature. Currencies never really stay in their current amount. Its rise and drop is dependent on a lot of factors which makes it an exciting and promising field. Anything can happen, which is why most of the forex players have their own tracking system to effectively scout the forex market for good buys. It also does not take much capital to make it a lucrative business. The important thing to have is a keen eye on the market paired with good intuition and some sense of foresight. You need to have a constant feel of the market when it comes to forex currency trading.
Thanks to Pete Miguel for contributing this article to our Currency Trading blog:
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