Forex Blog

EUR/USD hit its new significant bottom near 1.3455 level after dollar continued to grow on the high Euro liquidity level and good economical releases from U.S. Next technical support for EUR/USD lies near 1.3330 mark, so it is reasonable to expect some more USD rallying by the end of this week or next week.
Consumer Price Index (CPI) report, released by Bureau of Labor Statistics, showed 0.1% growth in July (as expected) compared to 0.2% growth in June.
Industrial Production report didn’t make any surprises too and came out with a 0.3% growth in July (in June it grew by 0.5%).
Net Foreign Purchases in July fell by $5.2B compared with June number and came out at $120.9B level, which is still historically high.

EUR/USD dropped to its new mid-term minimum (since 07/02/2007) at 1.3560, continuing its fall after the major currency intervention by European Central Bank, which took place yesterday to prevent a possible low liquidity on the financial markets of the European Union. Some good macroeconomic news released in U.S. added some fuel to dollar rally.
Producer Price Index came out at 0.6% increase compared to 0.1% consensus value and -0.2% previous value. Core component of PPI was worse but not dramatically - 0.1% of growth compared to 0.2% in forecast.
U.S. Trade Balance report showed some psychologically positive numbers. Unfortunately for the U.S. they are still mathematically negative, but nevertheless trade balance deficit continue to decrease. In June it was -$58.1 billions ($2.9B better than expected and $1.1B better than previous month).

Synthesis Bank is a registered banking body, located in Switzerland (Geneva and Zurich) and offering Forex trading services. Besides Forex they also offer CFD, Futures, Stocks and Bonds trading which makes it quite a good choice for those that wish to diversify their portfolio as much as possible. Synthesis Bank doesn’t offer Metatrader 4 platform, instead they provide their own platform - Trading Floor. Their spreads are quite good - from 2 pips on EUR/USD, but lack of mini Forex accounts doesn’t serve as an advantage of Synthesis Bank brokerage services.

EUR/USD hit new monthly minimum at 1.3606 today, bouncing back from both the psychological support of 1.3600 and technical support level around 1.3605. One of the main reason for the vigorous dollar behavior can be seen in ECB today’s currency intervention of more than €130 billions. Such a harsh step was needed to prevent a highly possible financial market collapse.
Economical statistics which came this day from the Unites States of America strengthened USD even further. Advance retail sales came out at 0.3% growth compared to 0.2% expected and retail sales excluding autos came out at 0.4% compared to 0.3% expected. Manufacturers’ and trade inventories, seasonly adjusted, are estimated at 0.4% growth compared to May 2007 (at the expected level).

Estimated general trends:
EUR/USD - bearish.
GBP/USD - bearish.
USD/JPY - bearish or ranging.
EUR/JPY - bearish or ranging.

Euro still holds below the 1.3700 level after a major crisis on the world financial markets and currency interventions made by European and Japanese central banks. Dollar’s fundamental future isn’t looking bright, but from the technical side EUR/USD is turning the trendline down currently.
Yesterday’s initial jobless claims news release wasn’t very encouraging - 316,000 new claims - almost 10k higher than expected. This is a bad sign as the employment market looked better previous weeks.
Today export and import prices indexes were released - 2.8% and 1.5% respectively, which both much higher than expected numbers and previous months’ numbers.
Budget deficit in June came out at $36.3 billion dollars, while experts expected $34.0 billion dollars deficit.
Overall fundamental data this week came out worse than several last weeks and this can affect Fed’s decisions on interest rates change.

A new Forex e-book is now available for my site. It is Study Book for Successful Foreign Exchange Dealing — a great introductory e-book for the beginning Forex traders. It’s not just some general article about foreign exchange market that can be met in thousands over the Internet. This e-book covers fundamental analysis and indicators in details, some basic candlestick patterns are also described and shown in examples. Reading it is very easy and would be extremely useful for someone who would like to deepen one’s knowledge in Forex trading.

After the Federal Open Market Committee released its statement yesterday EUR/USD remained on its positions until today’s early European session, which brought Euro to a rally behind the crucial 1.3800 mark. Will EUR/USD stay above it? Probably. Will EUR/USD break the 1.3850 resistance barrier to soar high to 1.4000 level? Less probably. Let’s look on the fundamentals.
Yesterday a labor productivity data for the industrial sector came out lower than expected by the majority of traders - 1.8% increase, instead of 2.1%. Meanwhile, consumer credit for June this year increased by 13.2 billion dollars, while analysts were expecting 6 billion dollars increase.
FOMC released another ‘inflation-concerned’ statement, leaving the interest rates at 5.25% level. While the main concern for the FOMC remains the inflation, it started to get nervous because of the risks connected with the economical growth and especially housing crisis.
Today data on business wholesale inventories came out slightly better than predicted - increased by 0.5% instead of 0.4%, while the crude oil inventories again dropped down significantly - by 4.1 million barrels.
Despite of FOMC being more inflation orientated, the economical growth correction will probably make them to decrease the interest rates at least once (or at least stop increasing it even more). Currently, housing data and oil inventories (taking in mind current oil prices) don’t look very promising for the U.S.

MetaQuotes Software Corp. conjointly with ODL Securities, Alpari, FXDD and Traders’ Magazine is starting its second annual Automated Trading Championship for Fore trading. In this contest traders compete not only in their trading skill, but in their programming skills. All orders and positions management is done by the competitors’ fully automated expert advisors for Metatrader 4 platform. This brings some new and original excitement compared to traditional trading contests, because once an expert advisor was submitted and championship started, trader/programmer can’t influence the trading process at all.
This is not the first time MetaQuotes Software organizes such championship. Last year was debut for the Automated Trading Championshiop 2006 which dragged attention of 258 developers from all over the world.
This time almost 750 participants already registered themselves on the Championship website while it is still 44 days left for the registration period (which ends on 21st of September). The contest will start on the 1st of October and will last almost three months till the 21st of December.
The prizes for the winners of Automated Trading Championship 2007 (three traders with the highest balance available at the end of the contest) are quite high and are likely to serve for the potential competitors as a great motivation to develop and improve their automated expert advisors and trading strategies in general. 1st Prize is $40,000, 2nd - $25,000 and 3rd - $15,000 - so it is $80,000 in total - quite impressing, isn’t it?
I would like to wish all those who will participate in this contest a good luck and a profitable trading. By the way, MetaQuotes Software held an on-line interview with me on the topic of automated trading and Forex trading in general. It is now published at their website and you can find it here.

FXDD is a new broker which I added to Metatrader 4 Forex brokers and PayPal Forex brokers categories. It is present on the on-line Forex trading services market since 2002. But nevertheless it is still unregulated and is not registered with any major financial regulatory organization. With FXDD you can open mini Forex accounts with $500 and use either MT4 trading platform or their own platforms (they have two of them). Unfortunately they don’t support e-gold, WebMoney or CFD trading.