Monday, May 30, 2011

EUR, GBP vs. USD gains momentum

Spillover on Crosses

Figures on German unemployment were better, the upcoming US and European data on consumer confidence and Non-farm Payrolls may find some friendlier support for the US dollar this short trading week schedule. Although, mix to negative may prevail for housing and US consumer confidence due to the continued oil and gasoline prices currently hurting most American consumers.

Apparently, the fundamentals on the European sovereign debt problems have eased-off. As European leaders have made their stance clear on providing a second package deal for the Greek problems that would eventually lead to Greece meeting its scheduled payment options without the restructuring program.

But the main headlines of Japan being downgraded have a more direct effect on the crosses rather than that of the USDJPY with only a meager trading range and working at 81.69 as of this writing. the obvious seems to unwind other major traders to checkout the crossess as they have more market potential with accompanying volatility as seen on the prices of the GBPJPY & EURJPY.

However, even without such reports from last week's price movements, the strength of the Euro & Pound have made it clear that the actual market sentiments on these pairs were still bullish. Pushing higher to the 1.4406 levels for the EURUSD and 1.6545 for the GBPUSD respectively, has maintained its consistent market momentum thus far. This also included the price reversal for the EURGBP cross rate to change its tone from a low of 0.8610 trend line support. A confirmation from the daily candlestick inverted hammer of 5.26 also lent support for the directional price change that is now signaling a continuing upward price movement.

The spill-over sentiments carried through the EURJPY & GBPJPY crosses as the upward momentum increases for the start of a shorter trading week. EURJPY is currently at the 117.45; while the GBPJPY is at 134.96, a clear breakout from the 133.20 levels. Expect some pullbacks along the way.

Please refer to complete report and analysis on our website. http://www.megatrade101.com/

Friday, May 27, 2011

Economy outweighs QE2 & European Contagion

USD Lost ground!

As of now, the negative figures and mix reports from the unemployment claims, retail sales, GDP, the housing / home sales figures and specially the consumer spending missed it numbers have led the US Dollar to move ever closer to it second smaller wave lower as we have expected. Although, the timing couldn't have made it better as the US market prepares for a long holiday weekend and the closing / opening of the month of June is in between a squeezable shorter & tight trading schedule for next week.

As most analyst have been eyeing on the market reversal for the US Dollar with the end of the QE2 prompting a positive tone for the US dollar to strengthen further. However, as much as we wanted to be convinced, that major corrective move higher for the USDX was merely a signal that it does have room for a recovery. But in any major trend there is a major correction occurring within. The same is true with the EURUSD & GBPUSD respectively, which still is within it true bullish trend. However, the only reason why they have been correcting is the European debt crisis and the previous negative statements from Eu officials prompting the Euro to move lower. Making market sentiments to shift from time to time as the consolidation, wider price swings and fluctuations were made to confuse the market participants.

As we have been caught once to earlier due to the degree of difficulty in analyzing the timing rather than the market trend direction. However, the true sentiments still remains the same, based on our May 24th market analysis that the European currencies are still heading on it northernly directions higher. And the signals and confirmation came through on the 26th of May. Although, the end of the month will fall on a Tuesday were most traders would not make any serious decision in the market.

Now with that said, the crucial closing for the month and the succeeding trading weeks in the next two weeks would likewise be critical for the GBPUSD and the EURUSD to have another major correction within as the end of the 2nd quarter comes simultaneously with the end of the QE2. However, market sentiments would prevail by that time and a lot of our traders out there loves to speculate a market trend reversal ahead of time. The trading activities and price behavior for the coming week would be a pivotal point as to the trend's directional movement. Although, we have some market outlook in mind already but would rather wait it out until the week's trading ending the 3rd & 10th of June, 2011.


Please watch for our next couple of market view reports regarding the market on our network site.

Tuesday, May 24, 2011

Increasing Market Volatility

As prices swings in both directions.


We have mentioned in our previous market view report as of the 17-22nd of May's updated analysis; that the market prices would have to be giving up its gains / losses and would create a consolidation pattern for the month of May. Please refer to our "USDJPY & USDCAD still taking lead' review which the market prices has been persistently been swinging in both directions.

Although, the strengthening USD has been more influential, the up and down swings were more reflected on the foreign currencies rather than the US Dollar index as it maintains it levels at the current 75.95 from a registered high at 76.36 basis points.

While the EURUSD made a slight recovery back to the 1.4091 from a low of 1.3968 which apparently so did the GBPUSD from a low of 1.6056 and is currently working at 1.6145 as of this writing. This has indeed influenced the cross EURGBP from an unexpected low of 0.8662 and is currently at 0.8723 recovery levels. this would prompt some re-positioning as it may now have some legs to continue its directional movements higher from the lower extension. at least an average of 125-200pips on the average wide fluctuations on both directions. Giving up gains/loss has been a norm for the prices. And this may go on for the rest of the month regardless of any dramatic report.

Although, one thing is for certain that such wide fluctuation would not be suitable for retail traders not unless a bigger tolerance levels with the right amount of trading funds would be utilize. If not we do advice to stay out of the market place if such appropriations would not be met. Currency correlations and cross trading amongst majors, cross rates and options are the best known and open strategy to be able to be success in this type of market conditions. Again, as we mentioned that the degree of trading difficulty should be measured well as increasing volatility would always be present at this point in time.

For the time being, the EURGBP, EURUSD may tend to fluctuate in a wider corrective mode as market shifts and position adjustment towards month end and new month opening prices would contribute more to this volatile market. As the EURGBP has a more northernly direction as it continues to have apositive tone due to the recovery but not of the USD but more of the EUR vs. the GBPUSD. Remember, that major financial institutions use other foreign currencies to do their transactions other than the US Dollar by itself. As major banks have international currency exposure vs. the US dollar with varying rate differentials.

Checkout the complete report on our website!

Have a good trading week ahead!

Thursday, May 19, 2011

Market Analysis - SRO

The uncertainty of the market participants could be best described across the board based on the price behavior currently viewed in the market place. Setting aside for the time being the other fundamental factors surrounding the market, one would be view it as a waiting game for breakout prices to occur. Although, the overall sentiments derived from the previous market movements of recent days compared to the previous weeks have certainly been subdued. The continuing analysis has been a bit more challenging, since the market prices would never really show its actual intent ( next directional price movement). Even with the combined technical tools available, the uncertainty will always be present in the market place. However, a well informed investors' decision or analysis can only lead to a calculated speculative action best described weighing the risk/reward ratio in a given period of time.
The probability of an increase market volatility would occur depending on the interest and intense activity made by the majority of institutional players rather than the main street investors is no comparison to say the least. With that said, from the most recent COT report the overall shift of interest and volumes have been identified from the key price reversal established from the US Dollars higher directional move as to this writing. Currently measured by the US Dollar Index at 75.30 basis point; it now has more room to re-adjust lower and re-test its lower band before a real trend reversal could occur. And in addition, a second wave of volume and open interest increase can only justify this key turn or pivotal price point for the USD to be more convincing.
For a complete report, visit our website at http://www.megatrade101.com/

Tuesday, May 17, 2011

USDJPY & USDCAD taking its lead

Almost every analyst & trader have been expecting prices to move higher along with the US treasury yields before the end of the QE2 as the Federal Reserve allows it to expire by June 2011. True enough in an ideal situation in anticipating a higher US dollar move against the major pairs. Today's highlight have been more on the USDJPY not because of this reason, but more on the reaction and influential movements of the cross rates particularly the GBPJPY, AUDJPY & the EURJPY.
With price comparison between the majors and cross rates almost all daily chart formations have signaled a friendlier upward direction which has given a much needed relief recovery for the majors after the recent downward movement of the past weeks. While these corrective price movements may seem to be sustaining in today's trading sessions, other traders may still find some reluctance to take a speculative position in the market. Nevertheless, as most traders have been eyeing a short on rally for the Euro & British Pound for that matter. These has been the general sentiments amongst traders and dealer recommending analyst seen in their blogs and market review.

The current month for May and the succeeding weeks of trading would be more of a corrective move from the down turn of prices with a subtantial wider range of price fluctuation. What this all means is that any particular recovery would be a relief recovery and would eventually end up with some consolidation patterns towards the end of the month for May. Although, this would be good for swing and day traders with smaller increments to take from the market. The daily fluctuations between the three major markets would more likely give and take its individual gains and losses even before and after the BOE & the FOMC minutes of their meetings within this week. However, we do have to see how the USDJPY may lead the forex market with its current showing even before the 1st Qtr. release of Japan's GDP.

USDJPY is currently at the 81.58 after registering a high at 81.79 initially. Meanwhile, on the technical front the 4hour chart formation of the USDJPY already did provide the price reversal signal at the 80.75 mid-price levels after consolidating within the Ichimoku Senkao span cloud and a cross over occurred on its way higher and above the 81.05/10 levels. These are the typical incremental movements that we are referring to unless a build-up of momentum and a considerable increase of daily fresh volumes established in the financial futures in line with the current spot & futures market correlation.
For a complete market view analysis; click on the link to go to our website: http://www.megatrade101.com/





Wednesday, May 11, 2011

A Basic Hedging & Spread / Straddle Strategy. . .

. . . between Spot & Futures Market

Patience is indeed a virtue especially when it comes to waiting for the market prices move to a bias direction higher for the US dollar. Apparently, the as every trader / investor is looking forward to the Friday's report; market participants have already absorbed the inflationary effects and analysis from other indicators. However, the price fluctuated with a wider range including the GBPUSD which made a recovery up to 1.6515 that led to a corrective move for the GBPJPY as high as 134.02; wherein the key price to watch is at 133.65 on the recovery levels. Although, currently working at the 132.50 would now continue to make another attempt heading south to the 131.00 in anticipation before the news on Friday.

As the US Dollar Index is currently above the 75.05-20 bp would be gaining its momentum on speculative longs by institutional ahead of the report. If so, staying above these levels for the week would ignite a renewal for US Dollar bulls to dominate the market.

As it has reflected on the major pair that we have chosen & executed to hedge with the USDCHF (Spot Market) last May 05 @0.8607 long an equivalent to the USDX long @73.05 basis point (ICE Futures/spread & straddle strategy) versus an earlier short-sell on the GBPJPY @134.53 Therefore, the key levels to watch for the closing prices would entail the USDX to close above these levels to maintain a positive tone for the succeeding weeks to follow that would lead to a probable trend and price reversal confirmation. Which includes volume and open interest build up on the futures market as well.

These strategies are made more to maximize the market potential of the position and using the leverage / overall positive net positions to assure the strategic technique in protecting the gains against any possible adverse price fluctuation in the event of a surprising fundamental news that may otherwise do the opposite. A bit more expensive to carryout but investment well made based on a carefully planned and executed trade. Please refer to our market view & analysis report dated 6th of May 2011: An Effective Forex Trading Strategy on our website at http://www.megatrade101.com/

Monday, May 9, 2011

Price Page Indicator & Market Psychology

Price Page Indicator's Market Psychology

The signals derived from the Price Page Indicator that has again proven its reliability from where the basis of the trade positions had taken shape even before the remarks from the ECB holding rates unchanged came about. The so called rumor from Greece's intentions of pulling out from the Euro currency really had no bearing except that it was highlighted by some analyst to justify the market's movement. There are apparently more real factors that contributed to the dramatic drop that was not expected as it accelerated its downward momentum during the closing of last week's movement.

We still maintain our current position to on both cross rates; GBPJPY & EURJPY to gain momentum on its downward direction for the week. Although, some conflicting signals would occur within the major trend. The near term movements would react with more volatility and wide price fluctuations as major institutions would simply eliminate small speculative investors from the market. A convincing follow-through price momentum towards the upcoming Consumer Price Index (CPI) and the University of Michigan's Confidence figure would more likely be mixed but would also have a friendlier net effect for the USDX in the long run. Then this would reaffirm and gain more interest for US Dollar bulls.

The news of S&P's downgrade for Greece & Portugal's contagion effects looming in the air has taken the highlights on the news. Not to mention the debt and trade deficits of what the US is facing is a battle cry for every trader's choices as to what the direction of the market would be in the coming trading days. After a Euphoria market, chaos and confusion on market directions takes place. This is where market psychology takes into account the market behavior from past experience in trading these volatile market.

Visit our website: www.megatrade101.com for a complete market review

Friday, May 6, 2011

An Effective Trading Strategy Part 2

Fundamentals:

Considering what just transpired in the Foreign Exchange Market with the key major currencies have made more dramatic when the ECB decided to hold such interest rates increase as of the moment. the cause and effect of such interest rates hikes would have been untimely. Rate differentials amongst major countries are taken into consideration especially with most of the Asian Pacific Region countries gradually increased their rates while the Japan and the United States have kept its stance as a way to assist a flagging economy. Keeping it where it is now have prompted a timely US Dollar recovery which have given some breathing room for market sentiments to shift its course, making price adjustments for the majors to correct itself from these events.

The second consideration is the continued increase on margin requirements for the precious metals where increase in open interest have been building up for the past several months. Based on the Commitment of Traders reports that most major participants were indeed institutionals and for those unwilling to accept the requirement had no choice but simply to settle such existing positions that led to the major corrective movements in Gold and Silver in particular. Paying close attention to the Volumes and Open interest would determine any probable shift in money flow and drastic measures on technical momentum would be reflected on the price behavior.

With that said, the Technicals and trading strategies have to be in place during these critical times of market conditions. such as the description of an effective strategy that would apply in these conditions.

Technicals:

From our previous market view analysis as of May 03, 2011; the confirmation of the GBPJPY & EURJPY heading lower was made after the above reports on the ECB was released. This was the fundamental factor that have caused the recovery on the US Dollar which was the main interpretation of the market. Prior to this decision the almost all of the 1st and secondary target levels have been achieved. Starting with the USDX at the 72.70bp low, Euro at the 1.4880 with extensions at the 1.4938, the EURGBP cross rate at the 0.8900 and extending to the 0.9040 just to name a few. Such target levels where obtained in sync with the market behavior prior to the two major reports for the week. And this also coincided with the new month of May signaling a major correction within a major trend. Price reversal do occur whenever such market price objectives are attained on a given period of time. which apparently the majors did.

For a complete report, including trade plan, market view analysis and execution pls. visit our website: www.megatrade101.com








Thursday, May 5, 2011

Next Best - High Probability FX Trade Video






Update: this video supports the Market View Analysis dated the 3rd of May. Speculating what the next best currency pairs that has a high probability of market potential. Please visit our complete report on the market conditions on our website: http://www.megatrade101.com/






Tuesday, May 3, 2011

Next-best - High Probability FX Trade

The investors sentiments and price behavior of the Forex market has undoubtedly been weighing more than any particular news that comes out. Not even the news of Osama bin Ladin death hardly had any effect on the USD as many have claimed that a recovery could be made as a welcome news. The irony of the matter is that the consistency of the US Dollar's weakness has not been really respected by some analyst. As they foresee an eventual end and may soon signal for a reversal.
Unfortunately, we still don't see any real circumstances that may provide such a reversal. True enough that the USDX has maintained its lower levels for quite some time now and registered a low at 72.80bp. A slight recovery back to the 73.20+/- would only be a technical adjustment that would equally be reflected with the rest of the major pairs.

Amongst the heavy players in the market are still the favored major financial institutions dominating the market, as reflected in the Commitment of Traders report. Nonetheless, speculative short positions by most retail traders have run into troubles for the past months especially on the European currencies particularly the Euro. Anticipating market trend reversals for the Euro and the USDJPY have been the norm for some of the reports and analysis from the broker-dealers and traders recommendations for a couple of months then. And now, the change of heart shows that most traders are eyeing on the 1.5100 levels.

We still maintain our position on the market analysis until such time that we do see an indication for changes or eventful changes that may transpire in the market. For the time being, the corrective moves on the GBPUSD gives enough breathing room for the cross rate EURGBP to move to its 2nd target objective at the 0.9020-9135 range levels. Although, Asian and European investors are shifting some positions and funds adjustments as some profit-taking has been made during Gold's corrective move back down to the USD1520.00/oz. levels. Next best move would be towards the Japanese Yen correlation with the British Pound as it makes is technical adjustment. Based on our process of elimination; the next-best probability trade to choose from would be the GBPJPY.

Visit our website: www.megatrade101.com for a complete report and market view analysis.