Archive For "February, 2010"

2-26-10

5:08a GMT – Another week down, another Friday ahead of us.

Yesterday was pretty volatile at times, moving 120+ pips in 2 hours alone. I took two trades – the first one off of the initial challenge of the (former) rising trend support, now resistance on the 15:00 gmt candle. This quickly yielded 50 pips. The initial challenge of that type of SR is always the most fruitful in my experience. My second trade is actually still open – a short on the 4:00a GMT shooting star candle (see candlestick alerts) in the resistance zone of 1.3550-1.3580 from my primary trade signal yesterday. That trade has not moved much since its open.

Daily Outlook: Once again it is a Friday and, of course, we have some mixed signals (anyone see a pattern here?). I’ve gotten a few questions about “are we in a double bottom situation” and the answer is – it is too early to tell. To satisfy me we would need a sustained break above 1.3800 before I would take a double bottom scenario seriously. Remember, confirmation on the charts is necessary to risk equity on – otherwise its nothing more than a coin flip. Our strong falling trend resistance is still holding the pair down and as long as that holds I am bearish in the short term.

Trading Idea: It is Friday and signals are mixed so I will be very conservative with my trade plan for the day. For those looking to re-enter the market the first place I will look is on the falling trend resistance, currently at 1.3620, with short targets at 1.3585, 1.3550 and 1.3520. It would have to be a very good signal however for me to double on my current short as I don’t want to go into the weekend heavy, so a more conservative (and less likely to be tripped) entry points would be resistance at 1.3650 and 1.3700.

(click to enlarge)

Quick Links:

Sign up for free forex signals via email here
FAQ on these signals
Forex Candlestick Alerts
Forex Income Calculator
Forex Market Hours
Forex Forums

LOS ANGELES (MarketWatch) — Large hedge funds are betting on a drop in the euro, expecting that the European currency will fall to parity with the U.S. dollar, according to a Wall Street Journal report late Thursday. The report cited unidentified people quoting comments from “all-star hedge-fund managers” representing the likes of SAC Capital Advisors LP and Soros Fund Management LLC at a recent New York gathering. Some of those managers said the euro, which traded at $1.51 in December but was at $1.36 Thursday amid concerns about Greek sovereign debt and other issues, could soon fall to $1.00. However, the report added that “few traders expect the value of the euro to totally collapse, the way the British pound did in 1992.”

LONDON (MarketWatch) — British consumers grew more upbeat in February, taking the consumer confidence index produced by research firm GfK NOP higher by three points to -14. The index is up 21 points from February 2009, said GfK NOP, which conducts a monthly survey of 2,000 U.K. consumers on behalf of the European Commission. The sub-index measuring consumers’ assessment of the economic situation over the last 12 months rose to -50 from -57 in January, while expectations for the general economic situation over the next 12 months rose to 4 from -2. The index measuring the “climate for major purchases” was unchanged at -16.

The dollar slides late in Thursday’s session after touching a fresh nine-month high versus the euro, as stocks pared losses and traders took the opportunity to square up positions.

Revived concerns about Greece’s financial plan send investors back toward the dollar. The yen gains broadly as currency traders unwind bets on riskier assets.

Fed Chairman Ben Bernanke reveals in testimony before the Senate Banking Committee that the central bank is looking into Goldman Sachs Group’s dealings with the Greek government.

NEW YORK (MarketWatch) — Gold prices turned higher in late morning U.S. trading on Thursday as the dollar pared losses versus the euro. Gold for April delivery rose by $5.40, or 0.5%, to $1,102.40 an ounce, after falling for the previous three sessions and touching a two-week low. Action Economics said foreign-exchange traders in Europe were covering short positions — bets the euro will fall more — before markets there closed. The euro traded at $1.3501, after falling to $1.3486 earlier and down from around $1.3535 in North American trade late Wednesday. The dollar index [s$dxy], a measure of the U.S. unit against a trade-weighted basket of six major currencies, traded at 80.953, compared to 80.822 late Wednesday.

WASHINGTON (MarketWatch) — Federal Reserve Board Chairman Ben Bernanke revealed Thursday that the central bank is looking into Goldman Sachs Group Inc.’s dealings with the Greek government. “We are looking into a number of questions of Goldman Sachs’ derivative arrangements with Greece,” Bernanke said in testimony before the Senate Banking Committee. The European Union has demanded that the Greek government provide details of how it used currency swaps and other instruments. The New York Times reported that Greece in 2001 had borrowed billions, with the aid of Goldman Sachs in a deal hidden from public view because it was treated as a currency trade rather than a loan. Bernanke also said the Fed was looking into trading of credit default swaps that allow financial firms and investors to bet that Greece will default on its debt. Bernanke said this trading was “counter-productive” and under review by the Fed and the Securities and Exchange Commission.

NEW YORK (MarketWatch) — Energy stocks fell with the broad market on an unexpected rise in jobless claims and continued jitters over the sovereign debt of Greece and Spain. The NYSE Arca Oil Index dropped 2.2% to 1,002. The NYSE Arca Natural Gas Index fell 1.9% to 522. The Philadelphia Oil Service Index retreated by 2.4% to 196. Reliant Energy dropped 5.3% to $4.32 after it reported a wider-than-expected fourth-quarter loss. The Dow Jones Industrial Average dropped 1.4%, or 147 points.

Investors will be listening closely to see if Federal Reserve chief Ben Bernanke, due back on Capitol Hill for a second day of congressional testimony, sticks to the script that financial markets on Wednesday found very soothing.