Forex Crunch EUR/USD Aug. 25: Holding to Support Amidst Global Slowdown |
- EUR/USD Aug. 25: Holding to Support Amidst Global Slowdown
- Forex Daily Outlook – August 25 2010
- Will the US Economy Fall Alone?
- Harness the power of Sentiment to Get in on the Largest Forex Price Trends Before Others Even Find Out!
| EUR/USD Aug. 25: Holding to Support Amidst Global Slowdown Posted: 25 Aug 2010 12:18 AM PDT
EUR/USD managed to hold on to the support line, moving between terrible housing figures in the US and fresh debt worries in the Euro-zone. Will it proceed and break lower? Here’s a quick update on technicals, fundamentals and community trends.
EUR/USD below long term support, hovering above support – click to enlarge EUR/USD Technicals
EUR/USD Fundamentals
EUR/USD Sentiment
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| Forex Daily Outlook – August 25 2010 Posted: 24 Aug 2010 02:00 PM PDT
Very interesting news and updates coming up today. New Home Sales in the US, Corporate Profits in Canada, Construction Work Done in Australia. Let’s see what awaits us today. In the Us, New Home Sales, an important gauge of housing market conditions measuring the number of newly constructed homes with a committed sale during the previous month, The U.S. new home sales are forecasted to rise a bit to 340 K in July from 330 K, but considering the weak housing starts figures, this report could have the potential to disappoint.
Later in the US, Durable Goods Orders, a leading indicator of economic activity measuring durable goods orders placed with domestic manufacturers. With the US industrial production rising more that the estimates and the manufacturing sector leading the recovery, the orders for durable goods could confirm the trend with an increase of 3.0% m/m in July from the 1.2% drop in June. More in the US, Crude Oil Inventories, the number of barrels of crude oil held in inventory by commercial firms during the past week; decreased by 7M and It influences the price of petroleum products which affects inflation, but also impacts growth as many industries rely on oil to produce goods; Finally in the US, HPI House Price Index (HPI), the purchase price of homes with mortgages backed by Fannie Mae and Freddie Mac, decreased by 4%, a leading indicator of the housing industry’s health, rising house prices attract investors and spur industry activity. In Canada, Corporate Profits, the total value of profits earned by corporations stabilized on 4.8% and it’s a leading indicator, businesses are quickly affected by market conditions, and changes in their earnings can be an early signal of future economic activity. For more on USD/CAD, read the Canadian dollar forecast. In Europe, Germany IFO Institute Business Climate and Expectations Index, a leading indicator of economic conditions and business expectations in the Euro-zone's largest economy, The ZEW institute survey, which is a leading indicator of the German IFO, registered a larger-than-expected decline and it would not be surprising the see the same outcome for this report as the IFO index is expected to pull back to 105.5 from 106.2. For more on the Euro, read the EUR/USD forecast and Casey Stubbs' latest analysis. Read more about the Pound in the GBP/USD forecast. In Australia, Construction Work Done, the total inflation-adjusted value of construction projects completed increased by 1.1% and it’s an important gauge of the construction industry, which has a sizable impact on overall employment and spending For more on the Aussie, read the AUD/USD forecast. 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.
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| Will the US Economy Fall Alone? Posted: 24 Aug 2010 07:37 AM PDT
US existing home sales were a huge disappointment – dropped by 28% to a rate of 3.83 million. But instead of risk aversion that was seen lately, the markets acted differently, with the dollar collapsing together with stock market. Is the US decoupling from the world? Everybody knew that the housing sector couldn’t really stand on its own two feet – sales were very dependent on government aid. But nobody expected this sharp and devastating fall. The release of the figure came out when US stock markets were open, and sent stock indices plunging. In recent weeks, we’ve seen this behavior go hand in hand with a stronger dollar, especially in the main vehicle – EUR/USD. This time was different: EUR/USD, that fell at the beginning of the week and struggled with the 1.2610 support line for many hours, leaped to 1.27 in a short period of time, and left stopped short of the 1.2722 resistance line. Also other currencies gained against the US dollar. This “normal” behavior replaced risk aversive behavior. The United States has the biggest economy in the world, and it’s considered the locomotive, either in growth or in contraction. Is the world changing? Will the US plunge into a double dip recession alone? Will other countries maintain stability while the superpower goes down under? There are already talks about the US being bankrupt, but these were dismissed. Also the talks about a new world reserve currency that will replace the greenback were forgotten, especially after the European debt issues erupted. But with China emerging as a superpower – already the second largest economy in the world, things may be starting to change. What are your opinions? Want to see what other traders are doing in real accounts? Check out Currensee. It's free.. |
| Posted: 24 Aug 2010 05:45 AM PDT
One big epiphany I had as a trader after losing money month after month while becoming a slave to my trading platform was that a successful trading strategy must somehow exploit the behavior of the market. I know, obvious, right? It may look obvious, but it may be a bit deeper than one typically realizes. "How do you quantify the behavior of something so complex and large as the forex market?" you may ask. Well, it gets a lot simpler when you realize that the forex market isn't made up of lines, charts, economic data, and head and shoulder patterns—rather, it's made up of human beings. These human beings are predisposed to act in a certain way when responding to events and fortunately we can take advantage of that to make money. Guest post by Kris Matthews (http://tradeforexfundamentally.com) "Don't get sentimental on me, darling"I can see many technical, chart-based traders already rejecting this- "are you trying to tell me you can read the emotions of the market, or something?" I hear. Well, although emotions have a lot to do with the behavior of price action, it's more about the market's "feeling" of the medium term outlook that determines sentiment. You see, for the time frame that most day traders and swing traders operate on, sentiment is a more dominant driving force than fundamentals or technicals. So how do we judge sentiment in forex trading?
Achieving forex profits in the long runThese two techniques (there are many more) will tell you the directional sentiment of the market. It's up to you to come up with good entry and exit methods, but the most important thing in trading is getting direction right. As you begin to use these techniques, you'll realize that they tell information about turning points even before price has made a complete turn-around and everyone else has found out about it. After everyone else has realized a new trend is beginning, it's too late. In a market that's so competitive (those 1 pip spreads have a price), it's imperative that you know about the behavior of your competition and act fast when the tides of sentiment change. Want to see what other traders are doing in real accounts? Check out Currensee. It's free.. |
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