1st Qrt.Ending USD Strength

With some economic barrage of news coming for the week from consumer Confidence, the ISM manufacturing report, US Jobless claims and again, the Non-farm Payrolls numbers would show a mixture but generally true US dollar supportive news report that would trigger a confirmation of the US economic recovery is underway.

Although, the reports may again be supportive of increased volatility; traders and investors are well focused on a much anticipated and bias bounce for the Euro and the British Pound which has failed from the first few attempts since it reached their technically oversold areas. Most analyst have time and again recommended shorts on recovery as a way for the European currencies to move lower than where they are now. In short, the mindset of the traders and investors have always been in line with Euro's weakness as the underlying support for the US dollar's strength and not more on the other way around.

As news in all financial networks has been concentrated in European financial troubles and have not really capitalized on the US government's economic solutions that is leading the recovery from the financial crisis.

On a technical basis, the opening prices for the EUR/USD and the GBP/USD has led a slight recovery as early as the Asian trading sessions which would spill over to European session. But these price fluctuations are relatively sluggish for the coming release of the reports towards the week ending April 2 which happens to overlap with the weeks close and the opening of a new month and the 2nd quarter of the year. Expect some rapid volatility on prices as adjustments are again made during this period. And the total opposite of the market sentiments will prevail upon the end of the week and the first three days of the 2nd week of April. Which we have anticipated a probable US Dollar correction could be made and anticipated by most major institutions in the Forex market. This is vital to take note of as it has proven to be true to its behavioral patterns since we could remember.

The USD/JPY would still take the lead over the strength of the USD compared with the Swiss Franc. However, the continued upward momentum would still build up for the CHF/JPY and the EUR/JPY. these cross pairs has been the latest favorite of our trade team since the profit potential are far greater than any of the major pairs. As trading currency spread and diversification should always be practised and applied whenever engaging in the Forex trading market.

The Aussie and Kiwi will continue to experience some sluggish outlook and motion for their prices. Although, as most Asian currencies are more favorable to trade for their resiliency towards the financial crisis and are still enjoying a boost in their GDP and trade relations with Europe and the United States.

Good Luck and Happy Trading!

CHF/JPY & EURJPY benefits from USD strength

The spill over of positive sentiments for the USD from the downgrading credit ratings for Portugal and the never ending jittery and fear of the Euro Zone financial crisis have contributed more for the Cross rates like the CHF/JPY and the EUR/JPY. However, the leading major pair by the USD/JPY has made significant movements and currently continuing their course upwards.

These economic reports have made the technical outlook for the USD/JPY to be justified when it was still hoovering its trading range from a triangular formation. that led our team to believe that eventually the break upwards would only be triggered by a fundamental report such as the Fitch cutting its credit rating for Portugal.

Our market view dated the 22nd of March stated that the 92.20 levels could be more attainable whenever the USD would have enough volumes to move higher. Now working at 92.06 with a slight resistance at the 92.40/50 range. Meanwhile, the CHF/JPY has already confirmed their sustained upward direction working at 86.16 with a slight resistance price at the 86.20/30 levels as well.

The EUR/JPY has made headway from our long position registered at 122.30 and currently working at the 123.10 levels that happens to coincide with the USD/JPY continued strength. while the cross EUR/JPY was still pacing the CHF/JPY due tot he fact that the Euro's 10 month low price of 1.3283 has now made it more supportive while it corrects pushing the EUR/JPY higher to its current levels.
Pls. check out our latest FX video presentation Trend following the CHF/JPY

http://youtube.com/megatrade101

Good Luck and Happy Trading!

Technically driven Market

FUNDAMENTAL :

In the absence of any real economic reports except what has been in the limelight over and over again are the Chinese Reminbi or the Yuan being discussed by the US congressmen attack on the currency, its value relative to the US trade deficits, recession and the financial crisis. the continued bashing of the China's policy on the other hand has been an envy for most of the US politicians as the US recovery has been slow from the Jobs data, real estate and contrary to the stock markets performance for the 1st quarter of the year.

Good signs are there for the USD however, as most investors and traders are more focused on the EUR/USD decline as the major factor for the USD recovery and not more of the other way around. These are the fundamentals that has been hanging over the air for sometime now as it is only now that the shift and focus is turning form negative to positive for the USD. The irony of the matter is by then the USD would take a corrective move and the shift will revert back from the previous sentiments. In addition, there are a lot of European funds still caught in between the recent sales of the Euro around the 1.3600 average price levels where some analyst were expecting that the EUR/USD will go back to the 1.2880 as expectations of the European financial crisisled by Greece and Spain's inability to handle their debt problems.

TECHNICAL :

On the technical stand point, keeping an eye on the USDX opening for the week lower from it Friday's close had indicated that the USD may try to finish the 1st quarter ending with a stronger tone with a shortened trading week in the the 1st week of April due to Asia's market holiday closures in trading. The lower opening at 80.50 and a high of 81.08 1st attempt have shown that this would probably happen. It is more defined on the support levels of 79.50-80.05 bp as long as the USDX holds above these levels it is still in an upward trend with minor corrective moves along the way.

This also holds true for the GBP/USD more than the EUR/USD with the EUR/GBP has more influential movement rather than by the individual pair still on a corrective divergence since March 14 which had a technical indicator for this correction. There is a video supporting these analysis which can be found http://youtube.com/megatrade101. The GBP/USD earlier support at 1.4770 may still be valid as a basis ; the 1.3440 was the closest price from our target price of 1.3380 pivotal point for the EUR/USD to recover. Which it is still within the trading range, but now will really depend more on the USDX continued recovery rather than the weakness of the Euro as everyone are focusing on.

Meanwhile, the AUD/USD has slowed compared with the better choice for the NZD/USD which has outperformed the Aussie on the previous two weeks movement. Targeting the 0.9328-32 high respectively and the major resistance of 0.9405. And the NZD/USD 0.7250 initial objective with a possible attempt towards 0.7410 as it 2nd resistance price levels. But both majors are equally at footing as the mid-term trend is still intact for an upward move as Asian currencies are in better a position rather their counterparts.

The USD/JPY is still confined with its weekly trading range and would breakout to the upside after a London shakeout of the long USD/JPY between the next two weeks of this month and the opening of April. Although, there also a possibility that the USD/CHF may take the limelight on this shakeout depending which investors shifts would come first. WE will find out which of these two pairs will likely take the action as we go along the way this coming week.

Good Luck and Happy trading!

Corrective Mode for Major Pairs Ahead

As the current market conditions enters its third week of the first quarter of the year, the underlying performances of the major pairs has been more in focus with the trending cross rates like the EUR/GBP and the EUR/JPY. This is equally true from the past weeks directional trend on both crosses. Their initial target objectives were met with a gradual market movements with sustainable volume participants in steady proportion.

The EUR/GBP touching its 0.9150 close enough and was considered the first attempt to its 0.9225 levels objective on the Fibonacci retracement measure. Although, do not discount the probability for a possible second attempt. However, on a day to day basis, there maybe some corrective downward movement due to a technically motivated selling divergence and pressure to settle and liquidate on profit taking previous long positions in the market place. Some pullbacks are therefore expected in the near term around the 0.8900-50 price levels as shown in the shaded area of the EUR/GBP chart on the right hand side corner. While the major trend still remains to be intact but still expect some up and down swings whenever it touches the fibonacci supports and resistances.

Meanwhile the EUR/JPY 122.70 -123.05 may seem to be a very good support price levels that could be touched on a swing lower that would be an ideal time to create some long positions as it goes on ahead of the week probably more towards the Asian and European sessions. With the daily expectations for the major pairs such as the Euro and the Aussie to do the same corrective movement in line with the closing weeks of the 1st quarter. The probability is more likely that the corrective movement may occur ahead of a US Dollar decline on a slow manner. Where opening highs may appear to move higher but eventually go lower for the rest of the weeks ahead.

The same presence of a divergence occurring with the hourly charts for the Aussie and Euro are distinct in such a way that the obvious correction is in place. However, do not forget that within a major upward trend there are major corrective movement lower within any quarter ending of the year. These has been the true and time tested market behavior present at all time in the Foreign Exchange Market. Getting caught in-between these time frame may lead to some market volatility as position adjustments again do happen.

Update: Supporting video on this analysis at

http://www.youtube.com/watch?v=mkZNz8D2E1U

Good Luck and Happy trading !

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Developing a Sense of Market Timing I

With the recent US jobs data, most of the traders in Wall Street would normally take a pause before any major reports are released. And as some have made it a point to trade from a confirmation with a volatile market and have generated a certain degree of success. For others the percentage of loss is greater as they try to simulate the same scenario with the Foreign Exchange market. But what is the ratio and probability of success versus a loss for the regular / retail investors turned traders for that matter. Quite an expensive price to pay!

In the exchange, we do have a mix of traders, market makers, institutional managers trading for client's accounts as well as their own. The viability of having access to certain information sometimes called in the stock market as the whisper numbers that circulates around purely on speculative basis.

Developing a sense of timing could either be both on a fundamental or technical stand point. More often than not is a technically motivated trader where numbers are plug-in on a trading system that would simply try to trade for itself. but the numbers and position is till derived from the trader / investor who wants either to buy or sell at a certain price. Most trades made are on short term basis that goes for 10-50 pips in between trades.

An application to maximize potential profits could be taken from a well developed trade plan that uses the basis of 4 sequential charts from an hourly, daily, weekly and monthly charting analysis. When all three out of four are in line then the probability of a profitable trade is more likely to happen. Using the hourly charts as entry and exit strategy application is more advisable rather than using them for positioning. The various time frames are geared to provide different signals that may be detrimental to the final trade, so it is equally advisable to implement at all time a time separator line that distinctively identify the time element involve in any such trades. Time management in proper positioning is vital too.

Monitoring prices for longer periods may also be contributing to misconceptions and misunderstanding of the market prices and its behavior. A certain correlation ship amongst the currency majors may also be best used in developing your sense of market timing as the ripple effects on the pairs are quite common. so the Technical tools accessible are only has good as the person's application in the trading process. If others are successful by using a combination of technicals, there is still no guarantee that the same will happen.

There is no " one size fits all " scenario. By having mentors and advisers along the way without having to worry about commission rebates or cash backs then one may be in better hands.

Good Luck and Best of trading for the week ahead!

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Currency Volatility Trades

The much anticipated NFP report has been keeping the market at almost in a stand still after a volatile market week from other reports like the Greece announcement of selling their government bonds which was quite well accepted despite of the country's debt problems and jobless claims unexpectedly lower that prompted the USD to move higher.

The effects were felt more on the USD/JPY which was trading from a low of 88.15/28 to as high as 89.47; the GBP/USD trading range from a 1.4780 low and a high of 1.5202; EUR/USD from a 1.3433 to 1.3736 and the USD/CHF between 1.0888 high and a low of 1.0647. These trading range from the major pairs have showed a 150- 300 pips average range that can easily whipsaw in the market place for the past few days. Such volatility are more likened by the scalpers and short term traders trying to take a few pips in between at the risk of loosing.

However, for most strategist these times of increase market action has been more favorable for spread trades and hedgers in speculative positions. The technical set ups for short term trades would remain bearish for the EUR/USD and the GBP/USD with expectations that within a 24 hour trading range that a 60-75 pip range can be made trading both sides of the trade taking profitable trades in between and just consider a net percentage gain on all trades made for the day.

The Cross rate EUR/GBP has held its prices too above the 0.9000 levels where key price support to watch would be 0.8965-70 which used to be the resistance of the previous run up from the low of 0.8655 major support. Although, the longer term out look still remains on the bullish perspective as the nest leg up may be visible within the next two weeks coming. The only exception was with the USD/JPY which made a remarkable upward price action after the news while the USD/CHF followed with smaller increments.

The AUD/USD have maintained its price stability from the recent hike to 4% and the percentage increase on Australia's GDP which also gave support for a corrective Aussie Dollar. The current price of 0.9008 is steady with an initial support of 0.8855 which may be far fetch to reach unless the numbers on the USD may well be overwhelming that would lead for an AUD/USD correction. Meanwhile, the New Zealand ( Kiwi ) maintains it low price of 0.6880 as of this writing and the negative sentiments are still in place.

Good Luck and Best to your Trades!