Forex Blog

Euro tried to regain some of its strong positions against U.S. dollar today after some new weak economical statistics regarding personal income and spendings were released to the financial market traders. But after construction spending and very optimistic PMI reports were released dollar started to press on euro and EUR/USD returned to its daily open value.

The most notable are the personal income and personal consumption expenditures (PCE) data reported by U.S. Bureau of Economic Analysis - in October they both rose by 0.2% while markets were expecting 0.4% growth in personal income (same as in September) and 0.2% for PCE.

Chicago PMI report (Business Barometer) showed an increase of this index above the average expectations by the analysts. It was at 52.9 in November, while 50.5 was expected it was 49.7 in October.

Total housing construction spending in October 2007 decreased by 0.8% (seasonally adjusted) compared to September’s value, that’s below pessimistic expectations of 0.3% drop. Real estate sector of the U.S. economy is heading into a deep crisis and new data reports prove that easily.

FXcast Forex broker announced today that it is now starting to accept corporate Forex trading accounts, providing full array of required paperwork. A legal company trading account can allow some successful Forex traders to create managed pool accounts based on FXcast brokerage. So, if you think you are good at Forex trading and view yourself as an entrepreneur you can try opening your own Forex trading company. Another good possibility which has now became possible is for exporting/importing companies to hedge their Forex risks using FXcast trading account, but that’s for really serious companies of course.

EUR/USD confirmed its downtrend intentions today falling from yesterday’s retracement to 1.4740 level. One of the reason for a stronger dollar can be seen in expectations for the increased real GDP growth in third quarter of 2007.

U.S. Bureau of Economic Analysis released its preliminary report on real Q3 Gross Domestic Product. The growth was higher than the previous advance value for third quarter - 4.9% against 3.8% and the same as analysts expected (that were quite optimistic with this indicator). As it was stated by Bureau, the growth was mainly caused by increased exports (thanks to a cheap dollar, I suppose).

Initial jobless claims report for the last week was opposite to GDP. In the week ending Nov. 24, the advance figure for seasonally adjusted initial jobless claims was 352k. That is 23k above the previous revised (from 330k) value of 329k and expected 330k.

New home sales disappointed dollar and U.S. stocks bulls too. Annualized and seasonally adjusted October number was just 728,000 whereas at least 750,000 were expected. And September value was also revised down from 770,000 to 716,000.

EUR/USD seemed almost completely independent of the important fundamental indicators which were signaling the worsening economical situation in USA. EUR/USD was falling by more than 100 pips during the day, but then it returned to a more moderate loss - 50 pips.

Manufacturers’ durable goods orders in October 2007 decreased by $0.9 billion which is 0.4% the previous month value. The consensus forecast for this value was at 0%, meaning that the orders shouldn’t been changing at all.

National Association of Realtors announced its October existing home sales number - 4.97 million annualized, well below both 5.03 million in September and 5.00 expected for October.

Crude oil inventories reported by the U.S. Department of Energy from November 16 to November 23 declined by 0.4 million barrels, showing another week without an increase, which is so needed after some major inventories downfall several weeks ago.

In November Consumer Confidence Index, surveyed by the Conference Board Inc., fell by 8.3 points to its lowest value since 2005. It decreased from 95.6 in October to 87.3 this month. Consumer confidence is the important measure of the consumers’ readiness to spend money and take credits. When this index falls so sharply, it usually means that U.S. economy is experiencing a slowdown or even a recession.

Contrary to the declining confidence index United States dollar strengthened its positions against many other currencies on the Forex market. EUR/USD fell by almost 50 points today. Signs of U.S. economy weakening began to worry OPEC and they promised to increase oil exporting volume, which caused oil prices to slide down. Decreasing oil prices in their turn caused a dollar uptrend.

Today I’ve “attended” a Forex trading webinar by http://www.fxinstructor.com. FXOpen informed me via the MetaTrader 4 mail message that FX Instructor will be holding a free technical analysis on-line lessons on November 26th. The webinar lasted through Asian, European and New York sessions with two hour and a half breaks. The communication via hotCam software went smooth and interactive. There was a chat window, where everyone could say or ask everything they wanted; there was a charting window, where instructor showed the chart and indicators, and the instructor spoke via microphone - the audio was of a good quality, but compact enough to transfer via the web rapidly.

To the contents part, it was informative. That was a large chunk of various information. Two analysts from FX Instructor shared their vision of the majority of popular Forex currencies using a technical analysis. All participants could ask their questions and share comments. All questions were answered thoroughly by the leading analysts. So, to outline the advantages of this webinar:

• A lot of information
• Professional; instructors know what they say
• Convenient form
• Multiple timeframes, currency pairs, trading timezones and technical indicators are covered
• Interaction between students and instructors

Of course, it had some minor disadvantages:

• I had to reconnect manually after losing my connection 2 times
• Instructors speak fast, so a good command of English is a must

That’s it, not many disadvantages I could think about. Overall, I think this service is worth its monthly fee, so, maybe I will subscribe soon. I recommend you to look into it as they often hold free lessons, which are just fun and interesting to look and listen to.

Some traders don’t like trading with brokers registered in some offshore zone with a little or no regulation at all. For these customers exist such Forex brokers as marketindex. ABN AMRO marketindex is the broker which offers financial market trading services as the division of one of the largest banks in Europe. marketindex offers Forex, CFD, commodities and indexes trading. They offer their own custom Java based platform (you don’t need to download anything) with some interesting functions, like box trading. Actually, I would prefer MetaTrader 4 or even Marketiva’s Streamster to this platform, and the trading conditions are a bit below the competition level, but this broker is a good choice for traders which don’t want to risk losing their funds fraud or broker’s bankruptcy.

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

ActiveTrades is my new addition to the Forex brokers list. It is quite an old on-line British broker, which allows not only Forex trading (via MT4 platform), but also stocks CFD trading and the access to the world exchanges: CME, CBOT, NYMEX, COMEX, LIFFE, EUREX, IDEM, NYSE and NASDAQ via futures trading. ActiveTrades also supports many different trading platforms: MetaTrader 4, J Trader, Ninja Trader, RAN Order, Strategy Runner and X Trader. Forex accounts can start with 250 euro, with the leverage reaching 1:400 level.

A new trader’s psychology related e-book for you to read:

Learning Flawless Execution of a Trading System by Mark Douglas

It’s more like an article - just 4 pages long, but it contains a useful information for all Forex traders that have problems in applying a trading strategy. Sometimes, it seems that you know better than your strategy and you correct its actions. Mark describes why such approach is completely wrong and tells us how to avoid it. If you constantly find yourself changing a Forex strategy after it lost 2 positions, you will probably learn some interesting facts from this book.