December 10, 2009 at 9:26 am
The Gold & CHF Correlation by GoLearn Forex
USD/CHF:
The Swiss Franc has a positive correlation to Gold. Thus, as Gold appreciates so does the CHF and vice versa. When the Gold rush of 2009 began the CHF participated in the precious metal’s appreciation. However, the correlation broke down as Gold broke its all time high. In the below Chart the CHF hesitated as it broached Dollar parity while Gold enjoyed near new daily highs. We would have expected the CHF to enjoy new highs, in line with Gold, once breaking parity with the Greenback but that did not transpire.
INSERT CHART CORR
The CHF like most of the G-10 is currently holding at very volatile handles. During the Dollar’s initial rally the Franc closed just above the 50 day MA and has since surpassed it. Currently the CHF has breached S1 at 1.0278. In the Chart below we have drawn a Fibonacci Retrace from the CHF low on April 20th, then trading at 1.17. We used the CHF high on November 26th, with a handle at .9918 to complete the Fibonacci range.
INSERT CHART CHF
The Fibonacci Retrace puts the 23.6% retrace level at 1.0350. The 100 day MA is also converging on the same level. If the Swiss Franc takes out the FIBO 23.6% level and closes below the 100 day MA this would trigger an additional short CHF entry. A close below the 50 day MA at 1.0163 would generate a long CHF entry.
There are a number of moving parts to watch when trading this pair. Gold has been hit hard during this Dollar rally and most analysts felt a retrace was imminent given the metal’s stellar rise. However, most analysts also forecast Gold to retain most if it’s appreciation given the high level of demand. This view may shield the Franc from massive depreciation. However, if the CHF takes out the 100 day MA prior to Gold firming then we would expect to see significant price action.
Commodities in a Slump by GoLearn Forex
It was a mixed day on Wall Street following a continued selloff in the Asian and London sessions. The DJIA closed the day at 10,337.05 up 51.08 points. It saw modest gains as analysts upgraded their ratings on 3M and Sprint Nextel.
The Greenback gave up some gains from its 3 day rally as the DXY closed down slightly to 76.038, but still above the 50 day MA. The big winner on the day was the Kiwi, as it advanced 1.81%. The RBZ held rates at 2.5% but improved their forecasts to include a possible rate hike in mid 2010. Additionally, Governor Bollard added the Bank’s expectation now looks for a significant rise in GDP.
Commodities continued their slump as Oil closed the session down 1.75 to 70.87. Corn, Wheat, and Soybeans sold off as the dollar held firm most of the day. Gold finished the day essentially unchanged to close at 1,128.60
Thursday will see a lot of price action as Unemployment figures is Australia print. Consensus expectations are looking for a modest rise to 5.9%. Obviously a print above or below will advance or plummet the AUD as the market looks for direction in this Dollar rally. The SNB will make its Interest Rate decision, although widely expected to keep rates on hold. Traders will focus their attention to accompanying language from the Central Bank. In the U.K the BOE will announce their interest rate decision and although they are expected to keep rates on hold at .5% it will be the Central Banks accompanying statements that have the chance to stir the market. Lastly, in the U.S, Trade Balance figures will print as will Jobless Claims. Traders will be watching carefully to see where Jobless Claims print as they seek to confirm last week’s NFP numbers. A significantly higher print may put an end to the Greenbacks rally while a better than expected print will affirm the Dollars new levels.
Upcoming Forex Events December 10, 2009
CHF Interest Rate Decision Forecast 0.25% Previous 0.25%
GBP Interest Rate Decision Forecast 0.50% Previous 0.50%
CAD Trade Balance Forecast -0.50B Previous -0.90B
USD Trade Balance Forecast -36.50B Previous -36.50B
December 10, 2009 at 9:18 am
To those who are totally new to the Forex Market, they need to know all about the various technical terms that are widely used in the same. The most basic terms like the platforms, the quotations and other things need to be known to the traders because they are inevitably used in the market. Here the significance of the currency quotes is given. This will also be emphasized upon by the Forex Broker.
When trading, the currency rates are inevitably referred to. The trading always goes on in pairs and it becomes essential to convert currencies and to measure them in terms of the other currency. There are basically two types of currencies that are dealt with in the Forex Market. The first currency is that which is used by the person in the country of residence. That currency or the currency for which the other currency is bought is called the Base Currency. An American in the USA will have the base currency as the USD while a British trader in the UK will have the base currency as the GBP.
The other currency which is traded for the Base Currency is called the Quote Currency. If the trader has chosen his currency pair to be USD/GBP, then the Base Currency is the USD and the Quote Currency is the GBP. Supposing the value of GBP traded for 1 USD is 0.6236, then the typical quotation is given as USD/GBP = 0.6236. This means that if 1 USD is traded for an equivalent amount of GBP, then the trader will receive 0.6236 Pounds in return.
The shown figure is normally given with some common difference between the two quoted prices and the actual market price. This common difference is nothing but the Spread that the Forex Broker charges the trader. Suppose the same example as above, then the apparent figure before the quotation will be 0.6230/42 supposing that the spread is worth 6 pips. The pip is the basic unit when measuring the currency conversion rate. It is also the basic unit of measurement when taking into consideration the profit and loss margin. The pip is usually measured as the last decimal in the conversion rate. In this case, the pip will be 0.0001 unit of the currency.
The two numbers mean that if one had to buy the GBP for the USD, then he would have to buy them at 0.6242 and then sell them at 0.6230. If the trader had 100 USD, then he will get 62.30 GBP in return for them. If he had to sell the same USD for GBP, then he would get 62.42 Pounds for 100 USD. A trader with the GBP as the base currency will receive 62.30 pounds for them in return if he had to sell off the foreign currency, in this case the USD.
December 10, 2009 at 9:17 am
What is behind the loss of money even by forex robots and exert advisors? They assure you of sure gains but sometimes end up in loss. Read this article before you buy yourself one of these cheap, get rich quick software packages to get the reasons.
This is the message that people from the trading market expect you to believe, pay a few dollars and sit back and relax while you get an income without any effort. If this is true then why is the whole world not interested in trading? Why is there a high percentage of traders who lose a large amount of money? So what is the big reason behind all this drama.
Most trades miss to read the small print in the track records. They mistake the robots to have made real money when it really has not made any. The track record is just a back test over old data.
This just means that the vendor is now aware of the closing prices and thereby simulates a track record. The vendor fits the data into the system. Is there any chance of making money by knowing the rates at which the market closes tomorrow? Yes, you will become really rich by making great predictions and thereby reaping big profit. But the simulated track record does not offer you that. It has no indication of future profitability.
The only thing common in almost all forex robots is that, all say that they make huge profits. But when you ask the vendor for a real time track record, it is not available. Either the track record is not from a neutral source or no track record exists.
There are a lot of people who claim to have made a lot of money through these robots but in reality, these people are selling their robots. They just hope to make a few rebate commission from the vendors. If they are making so much money then why do they need this money? The answer for this is known to you and I too know the answer.
Forex trading is a sector in which 95% of the investors tend to lose money. If you have to win in the market then you have to acquire all the skills. So instead of relying on such robots for help, you acquire the skills that is necessary to win in this market and gain profits. So do not sit back and expect money to fall on you. Learn the tricks and trade on your own and eat the fruit of your hard work. When you put in effort in forex trading, the rewards are enormous.
