EUR/USD was at the highest since December 21 as yesterday’s pledge of the Federal Reserve to keep interest rates low at a prolonged time continued to push the dollar lower. Macroeconomic reports weren’t helping the US currency as housing and jobs data was negative, while leading indicators rose less than expected.

Initial jobless claims (seasonally adjusted) increased from 356k to 377k in the week ending January 21, compared to the median forecast of 371k. (Event A on the chart.)

Durable goods orders increased 3.0% in December, according to the advanced report. Forecasters predicted a 2.1% rise, while the November figure was 4.3% (revised from 3.8%). (Event A on the chart.)

New home sales were down to 307k on a seasonally adjusted basis in January from 314k in November. An increase to 321k was expected by market participants. (Event B on the chart.)

Leading indicators increased 0.4% in December. It’s more than a November growth (0.2%), but less than markets expected (0.7%). (Event B on the chart.)

EUR/USD started today’s trading session flat and even began to head down, but rallied after a report showed declining pending home sales. The currency pair was further boosted after the Federal Reserve extended the target for exceptionally low interest rates from mid-2013 to late 2014.

Pending home sales declined 3.5% in December, compared to the median forecast of a 0.6% percent drop. That’s followed the November increase by 7.3%. (Event A on the chart.)

Crude oil inventories increased by 3.6 million barrels, while total motor gasoline inventories decreased by 0.4 million barrels last week. (Event B on the chart.)

The Federal Open Market Committee kept interest rates unchanged near zero (event C on the chart) and reiterated its intention to continue stimulating the economy:

To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy.

The FOMC also extended its pledge to keep the rates record low to late 2014. (Event D on the chart.)

BW Hosting is a Dubai (UAE) based IT company that, among other services, offers a high quality but very expensive VPS hosting specifically for Forex traders. They pre-install the MetaTrader platform (both MT4 and MT5 versions) and offer a great support in installing any additional components or the platforms of the particular brokers. I’ve been able to use their free trial offer and both connection and execution speed were excellent. Although this VPS won’t be suitable for many traders due to its high price, I still recommend it if you are trading with UAE-based brokers. Other highlights of BW Hosting are:

• Operating system is Windows Server 2008 R2.
• 3-day free trial is available.
• Payment is possible only via bank transfer and credit cards.
• Only 5 GB monthly traffic included.

EUR/USD was down today as talks about reducing Greek debt ended in a stalemate. Private creditors demand 4 percent interest rates, while Greece asked for less than 3 percent. The negative outcome of the discussion may result in a new wave of risk aversion on the Forex market. US data again was positive for the dollar as the housing market continued to improve and manufacturing expanded more than was previously estimated.

Richmond Fed manufacturing index was at 12 in January, two times the forecast figure of 6 and four times the December reading of 3. (Event A on the chart.)

On Friday, a report on existing home sales was released, showing an increase from 4.39 million (revised from 4.42 million) in November to 4.61 million in December, compared to the average forecast of 4.65 million. (Not shown on the chart.)

As of today, the latest free e-book that was added to EarnForex.com is “The 5 Steps to Becoming a Trader” by an unknown author. This extremely short (only 5 pages!) PDF e-book lists and describes the 5 steps of becoming a Forex trader. The steps are the fundamental psychological levels that are passed during the learning curve in almost any activity, e.g.: driving, sports, professional skills, etc. These steps are the following:

1. Unconscious Incompetence
2. Conscious Incompetence
3. The Eureka Moment
4. Conscious Competence
5. Unconscious Competence

You’ve probably seen them before — whether related to mastering the Forex market or something else. Nevertheless, there are useful things to read and it’s interesting to try finding out in what phase you are now. Personally, I feel like I’ve entered the Conscious Competence level not so long ago. You can download this e-book for free:

• The 5 Steps to Becoming a Trader

A channel pattern has formed on the daily chart of the USD/JPY currency pair. While it’s not exactly horizontal, it can be traded as such without a problem because the slope is almost unnoticeable. The price has touched both top and bottom borders of the channel 3 times.

I set my entry stop orders (cyan lines) at borders (yellow lines) + 10%: 78.39 for long and 76.40 for short. The targets (green lines) are the height of the channel (165 pips) added to the borders: 79.87 for long positions and 74.92 for short positions. Stop-loss can be set after the breakout has occurred on high or low of the breakout bar. Please see the screenshot of this channel pattern below:

EUR/USD reached today the highest price since January 4 as Spain sold more government bonds than its maximum target at today’s auction, while French borrowing costs fell. It was a bit disappointing day for the United States as reports showed that economic growth and housing sector stalled. On the other hand, jobless claim fell more than was expected.

Housing starts declined to 657k in December (seasonally adjusted) from 685k in November, while market participants hoped them to stay at the same level. Building permits were at the seasonally adjusted rate of 679k last month, being near 680k in the month and matching forecasts. (Event A on the chart.)

Seasonally adjusted initial jobless claims fell from 402k to 352k in the week ending January 14. That’s a better result that 387k predicted by analysts. (Event A on the chart.)

CPI showed no change in December, following the absence of growth in November. A huge disappointment for traders as a 0.1% growth was expected. (Event A on the chart.)

Philadelphia Fed manufacturing index rose a little from 6.8 in December to 7.3 in January. The December reading was revised down from 10.3. Market anticipated a bigger increase to 10.7. (Event B on the chart.)

Crude oil inventories decreased by 3.4 million barrels, while total motor gasoline inventories increased by 3.7 million barrels last week. (Event C on the chart.)

EUR/USD advanced today for the third session as the International Monetary Fund wants to boost its lending resources by $500 billion to safeguard from the global economy from the European crisis. Greek Prime Minister Lucas Papademos will talk with private bondholders to convince them forgive Greece at least half of its debt. Today’s reports from the United States were good for the most part, except the Producer Prices Index that unexpectedly dropped.

PPI declined 0.1% in December, while it was expected to rise by the same rate. The index rose 0.3% in the preceding month. (Event A on the chart.)

Net foreign purchases were $59.8 billion in November. The actual value was well above the average forecast of $27.3 billion and the October reading of $8.3 billion (revised $4.8 billion). (Event B on the chart.)

Industrial production and capacity utilization advanced in December. Industrial production rose 0.4%, much better than the revised November drop by 0.3%. Capacity utilization increased to 78.1% last month from 77.8% in November. Forecasts were near the actual readings: 0.5% and 78.2% respectively. (Event C on the chart.)

Yesterday, a report on NY Empire State Index was released, showing an increase to 13.5 in January from 9.5 in December, while the expected figure was 10.8. (Not shown on the chart.)

Taking losses in an imminent part of Forex trading process. Some traders seek the no-loss strategies (including omitting the stop-loss), but such attempts are rarely successful. On the other hand, any loss can be a serious hit in the emotional state of a currency trader, while some losses may also be lethal to the trader’s account balance. Personally, I aim to limit my losses with very small amounts, but occasionally I open long-term trades with open target and loss allowance. Such trades may end up with unexpectedly high loss. As of now, my biggest one-trade loss is $372.76 closed in October 2011. It’s also not a pure Forex trade because I’ve made it in Platinum, but I count it as it was on my Forex account. And how about you?

 Loading ...