Forex Blog

EUR/USD trend: sell.
GBP/USD trend: sell.
USD/JPY trend: sell.
EUR/JPY trend: sell.

EUR/USD is growing for the third day straight now. Although the gains are quite modest, the divergence indicators show that the current correction may turn into quite a large bullish wave for this currency pair. EUR/USD is currently trading at 1.368 — a gain of 37 pips from the today’s open.

Initial jobless claims posted an expected drop last week — they fell from 498,000 (upwardly revised from 497,000) to 478,000. The average forecast by the market analysts was at 475,000. It’s good sign for the U.S. employment market, but it’s barely enough to give a particle of confidence to the investors.

Wholesale inventories continued to grow in August and added 0.8% — almost twice slower than July’s 1.5% gain, but above the analysts’ forecast of 0.4%.

EUR/USD currency pair is growing for the second day in a row today after the Federal Reserve and the major central banks cut the interest rates to provide additional help to the tumbling markets. Fed cut the interest rate from 2% to 1.5%, Bank of England — from 5% to 4.5%, European Central Bank — from 4.25% to 3.75%, Bank of Canada — from 3% to 2.5% and Swiss National Bank — from 2.75% to 2.50%. This didn’t influence dollar much — it continued to fall despite some positive fundamentals reports from U.S. today. EUR/USD is currently trading near 1.3652 level above the opening value of 1.3621.

Pending home sales index rose by 7.4% in August after 2.7% drop in July. It’s good growth for the national realty sector because the average forecast was at 1.1% fall for August.

Crude oil inventories added 8.1 million barrels last week following 4.3 million barrels gain a week before. The last two weekly increases pushed crude oil inventories to the upper half of the average range for this time of year.

The expert advisors that work on one broker can stop working on another; the problem with them often lies in OrderSend Error 130. If you see Error 130 in the Log of your MetaTrader platform when your expert advisor should be opening a position, then that means that the stop-loss or take-profit levels are set to close to the current market price. In the MQL documentation this error is called ERR_INVALID_STOPS («Invalid stops»). Some Forex broker set the minimum distance between the current price and the stop-loss/take-profit levels to prevent scalping or abusing the quote delays. That’s not a real problem for the majority of the expert advisors that don’t use scalping. To prevent this error from occurring, you need to change the expert’s code.

First, you might want to know what’s the minimum stoplevel is set in your broker’s MetaTrader server. Adding this line of code will output the current minimum stoplevel for the currency pair of the chart, where you run the EA:
Print(MarketInfo(Symbol(),MODE_STOPLEVEL));

You shouldn’t be using stop-loss or take-profit level, which are closer than MarketInfo(Symbol(),MODE_STOPLEVEL) to the current market price. If your EA calculates stops and take-profits dynamically, this is what I suggest you to do:

1. Declare a global variable for the minimum StopLevel; e.g.:
   int StopLevel;
2. In the init() function of your expert advisor define the minimum StopLevel:
   StopLevel = MarketInfo(Symbol(), MODE_STOPLEVEL) + MarketInfo(Symbol(), MODE_SPREAD);
   Note, that adding a spread difference is also required.
3. The next time your stop-loss or take-profit is calculated, just check them to be not less than StopLevel:
   if (StopLoss < StopLevel) StopLoss = StopLevel;
if (TakeProfit < StopLevel) TakeProfit = StopLevel;
4. Don’t forget to refresh the current market rates with RefreshRates() before adding the stop-loss/take-profits levels to the actual market rates.

That should help in the majority of the cases. At least, for me such handling of the OrderSend Error 130 has always worked.

ForexGen, which began to operate on-line in 2006, is a Forex broker that offers quite interesting trading conditions, including MT4 platform, spreads as low as 0 pips and no overnight swaps. The spreads on the major currency pairs go do down to 1 pip for $5,000 and bigger accounts and decline to 0 for accounts starting from $50,000. Leverage also varies depending on the trading account size — from 1:200 to 1:500 for mini and micro accounts, 1:100 for standard accounts and 1:50 for big accounts.

Unfortunately, there are four major problems with this broker. First, their site claims to be on-line since 2001, while it’s not. Second, ForexGen offers 1 pip commission per trade to their partners, which means that the broker doesn’t receive profit from the spread on big accounts and that’s a bad sign for traders. Third, ForexGen tries to look like it’s registered with some authorities or regulatory institutions, but in fact it isn’t. Fourth, they have a lot of bad reviews in the Forex community; I don’t know of they are justified, but that’s something I would be worried about.

EUR/USD trend: sell.
GBP/USD trend: sell.
USD/JPY trend: sell.
EUR/JPY trend: sell.

EUR/USD continued to fall today for the fifth day in a row even as the employment reports from the United States showed a dramatic decline. It looks like the raging recession in U.S. is a real problem for everyone except the dollar. Maybe, because the traders prefer to convert into treasuries when the market turbulence is highly active.

Non-farm payrolls declined by 159,000 in September following 73,000 drop in August. Market analysts expected a decline by no more than 90,000 for the last month. Despite such a huge drop in the non-farm employment, total unemployment rate remained unchanged at 6.1%.

ISM services index fell insignificantly in September — it went down from 50.6 to 50.2, while the forecasts were at 50.0 value. ISM services index remains in a generally neutral zone.

EUR/USD broke down below the 1.3800 support level today as the dollar was fundamentally more attractive than the euro. Traders expect that the $700 billion bail-out plan will be adopted in the House of Representatives soon after passing Senate yesterday. Meanwhile, European Central Bank left the interest rate unchanged at 4.25%, which spurred talks that the rate may be lowered at the next governing council meeting. Macroeconomic statistics which came out today in U.S. wasn’t very positive for the dollar, but didn’t help the euro much. EUR/USD is currently trading near 1.3804.

Initial jobless claims rose by 1k last week compared to the week before — from 496k (revised up from 493k) to 497k. Traders were expecting a decline to 475k.

Factory orders in U.S. were down by 4.0% in August following 0.7% growth in July. Analysts expected that the factory orders will drop by 3.0% in August.

EUR/USD continued to fall today after the yesterday’s record-breaking decline, despite the unexpectedly low reading of the influential ISM purchase manager’s index. EUR/USD broke the technical and psychological support line at 1.4000 during the trading session, but then return to the levels above and is now trading near 1.4004.

ADP employment report showed that the employment decline slowed down from 37,000 from July to August to 8,000 decrease from August to September. The estimated decline was 50,000.

Construction spending stalled in August after 0.6% decline a month earlier and 0.5% forecasted drop for August.

ISM PMI fell significantly in September — from 49.9 to 43.5. Only a minor drop to 49.5 was expected by the market analysts. But it looks like it didn’t affect dollar’s rate much as the markets are currently driven by the bail-out plan speculations.

EUR/USD fell today at a fastest daily pace since the early September as the fundamentals in U.S. came out at a better than expected level today, spurring both U.S. stock market and dollar rallies. EUR/USD lost almost 300 pips today and is currently trading near 1.4129 level.

Chicago PMI, indicating the business confidence, dropped from 57.9 to 56.7 in September — that’s not a bad result, considering the average forecast of 54.0 for this index.

Consumer confidence index, measured by the Conference Board, rose from 58.5 to 59.8 this month, bringing a very positive surprise to the dollar and U.S. stocks bulls. The median forecast for this index September’s value was at 55.0. The continuous growing of the confidence indicators from the month of June, signal that the recession in U.S. isn’t strong enough and will probably disappear soon.