Forex Crunch Forex Daily Outlook – January 4th 2009 |
- Forex Daily Outlook – January 4th 2009
- Will the US Finally See Job Gains?
- 5 Predictions for the Forex Industry in 2010 and Beyond
- 15 Most Popular Posts of 2009
| Forex Daily Outlook – January 4th 2009 Posted: 03 Jan 2010 01:00 PM PST
The first trading day of 2010 begins with a rather busy calendar. American ISM Manufacturing PMI will stand out today as well as echoes from Ben Bernanke’s speech late on Sunday. Let’s see what’s up for today. Ben Bernanke said that low rates aren’t to blame for the house bubble – bad regulation and bad execution of regulation are to blame. Looking to the future, Bernanke mentioned that if regulations won’t stop bubbles, the central bank will step in with the rate tool. Is this a hint for rate hikes? Moving into Monday, Australia’s AIG Manufacturing Index provides an early indicator for the Aussie. This will be followed by a more important figure: Commodity Prices, which are expected to show a lower year-over-year drop. For more on the Aussie, check out the AUD USD forecast. In Switzerland, the SVME PMI is expected to edge up to 57.1 pushing USD/CHF lower. In Europe, Final Manufacturing PMI is expected to confirm the read at 51.6 points. Sentix Investor Confidence is predicted to edge up, but still remain in the negative zone. The EUR/USD forecast has more, including a technical analysis for this pair. In Britain, Manufacturing PMI is expected to tick up from 51.8 to 52.1 points. British Net Lending to Individuals is expected to double to 0.6 billion. Also in Britain, Mortgage Approvals are expected to remain almost unchanged, ticking up to 58,000 this time. For more on the Pound, read the GBP USD forecast. In the US, the ISM Manufacturing PMI is expected to rise by 53.6 to 54.1 points, something that will put a smile on dollar bulls’ faces. This index has been above the 50 point mark, meaning economic expansion, for the past 4 months. Also in the US, Construction Spending is expected to drop by 0.4% and a speech from FOMC member Elizabeth Duke could also move the markets. That’s it for today. Happy forex trading! Want to see what other traders are doing in real accounts? Check out Currensee. It’s free. |
| Will the US Finally See Job Gains? Posted: 03 Jan 2010 07:30 AM PST
The American job market has reached a turning point, where a gain in jobs is at a hand. In this preview, there are arguments for both options, expected market behavior and possible strategies for trading this major news event. In a previous post about forex binary options, I’ve shown how a binary option can be used to hedge a breakout of a pair. Towards the upcoming Non-Farm Payrolls due this week, I’ll show how to hedge this event, in any case.
Expected forex market reaction American Non-Farm Payrolls for November have been excellent: only 11,000 jobs were lost in the US. This was far better than a loss over 100,000 that was expected. It was accompanied by a upwards revision of the previous release and a drop in the unemployment. This was no ordinary NFP release. During most of 2009, good news would send the dollar down. Why? Risk appetite. Hopes of global recovery would send traders to more “dangerous” currencies. Bad economic news from the US would send the dollar higher on risk aversion. Fear of ongoing trouble would send traders to the “safe haven” currencies such as the Yen and the US dollar. On December 4th, this correlation was broken. Good American news translated into a dollar rally. The markets went back to normal. During the rest of December, normality continued to rule. This also meant that the stock markets and the dollar moved together, contrary to the behavior between March and November, where the dollar would fall when stocks rose, and the dollar gained on stock market weakness. This “normal” behavior is expected to continue in the upcoming Non-Farm Payrolls release for December 2009, due on Friday January 8th. Will two years of job losses end now? The current expectations are for a very small drop in jobs – only 1,000. This reflects the median of 58 economists. As this number is very close to zero, some economists are expecting job gains, the first in 2 years. Arguments for a rise in jobs could be found in the continuing drop in weekly unemployment claims. Last week’s number went down to 432K, the lowest since August 2008, before the collapse of Lehman brothers. It could also be supported by the official end of the recession in the US. Such a positive outcome of job gains, even if the number is very small, will have a great impact on the market. The dollar will probably celebrate such an event and rise across the board. The preferred reaction in this case is to go long on the dollar while hedging this with a binary option that will go against the dollar. For example: short on EUR/USD with a CALL option on this pair. In case the markets turn around and the dollar falls, the binary options will defend against this loss. The skeptic scenario But not everybody is optimistic. Many say that last month’s good result was due to a rise in temporary and part time jobs, not in real full time positions that have a long term effect. This pessimistic view sees a renewed drop in jobs, and a long road to recovery. Some reason the good figures with the governments special stimulus spending. They claim that when the government’s programs end, the sector that was helped goes back to “normal” – back to recession. The fall in new home sales is explained by the end of a government program in this field. In case the NFP is negative once again, the dollar will fall. In this scenario, the preferred way is to go short on the dollar, and to hedge it with a binary option with the dollar. For example, going long on EUR/USD together with a PUT option in case the dollar surprises and gains. I’m optimistic. I hope that jobs are gained in the US, and that the global economy will really pull out of this recession. If you’re interested in using binary options for hedging as mentioned here, check out Start Options which specialize in binary options. They have agreed to extend their Christmas promotion to Forex Crunch readers, and give a $25 welcome bonus to traders that arrive from here. |
| 5 Predictions for the Forex Industry in 2010 and Beyond Posted: 02 Jan 2010 08:15 AM PST
The forex industry evolved nicely in 2009. Looking towards 2010, and the new decade, here are 5 predictions about the industry. I wrote this post after reading Kathy Lien’s excellent article about the top 5 events of this decade. I’m looking at trends that already began recently, as well as trends that I believe that we’ll see in 2010 and in the following years.
I’d love to hear more predictions… Want to see what other traders are doing in real accounts? Check out Currensee. It’s free. |
| Posted: 02 Jan 2010 08:15 AM PST
The year is coming to an end, and it’s time for some conclusions. Here’s a list of the most popular posts on Forex Crunch for 2009.
Notes: This list excludes outlooks and news posts. So, the items are long-term, general-purpose posts that are useful for a long time by forex traders, analysts, enthusiasts, etc. I’ll just add that out of the weekly forecasts, I found that the ones about the British Pound are the most popular – they exceed those about EUR/USD which is the world’s favorite pair. Let’s start the list:
I’ll probably post another list of my favorite posts this year. Have a great 2010! |
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