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2010 January

January 18th, 2010 @ 3:09 am by Setyo Wibowo

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GBPUSD Forecast:
My technical strategy to short near the trendline resistance worked perfectly on Friday as price had a bearish momentum, bottomed at 1.6213 and closed at 1.6257. Although the current bias is more to the downside, I think the bearish scenario is not confirmed yet, not until we have a convincing movement below 1.6250 area, targeting 1.6040 area. The trendline resistance area remains a good place for a short position with tight stop loss above it. Immediate resistance at 1.6330. Break above that area should trigger further bullish momentum and keep the bullish scenario intact.

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January 18th, 2010 @ 3:05 am by Setyo Wibowo

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USDJPY Forecast:
The USDJPY had a moderate bearish momentum on Friday, bottomed at 90.59 and closed at 90.82. This fact should keep the bearish scenario targeting 90.15 remains intact and the bias remains to the downside. Immediate resistance at 91.30. Break above that area should lead us into no trading zone in nearest term but as long as price stay below 91.85 I still prefer a bearish scenario at this phase. Break below 90.15 area should continue the bearish scenario towards 88.00 area.

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January 18th, 2010 @ 2:57 am by Setyo Wibowo

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USDCHF Forecast
The USDCHF had a significant bullish momentum on Friday. On h4 chart below we can see that price break above 1.0213 and now struggling around 1.0280 and the upper line of the bearish channel. This fact should be seen as a serious threat to the bearish scenario especially if we have a consistent move above 1.0280 and violation to the bearish channel, targeting 1.0400 – 1.0500 area. Immediate support at 1.0213 area. Break below that area should keep the bearish scenario intact.

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January 16th, 2010 @ 8:52 am by The Geek

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Good day.

Welcome to the EUR/USD Weekly Review.

This week brought a nasty surprise towards the end.

After failing to break free from the lure of 1.4500, the currency pair gave up and tumbled to the depths of 1.43+.

In the previous weekly review, i mentioned about the resistance at 1.4500 and how news may drive spikes above it? That happened. Therefore you must always remember that resistance and support lines are never a single pip.

Risk aversion seems to have made a comeback as a few of the lingering problems surfaced to haunt the sentiments. For example, Greece’s deficit problem is being highlighted in a negative light as investors seems doubtful of the plan to solve it and the ECB’s strict comments suggests no bail out.

The increasing plans and actions to reduce or remove stimulus measures by the various central banks are also causing a stir as investors are apprehensive of the economy’s ability to cope without extra support. China is rather vocal about stopping speculative bubbles.

In the ECB conference mid week, Trichet said that interest rates are appropriate and investors seem to see this as an indicator of a stagnant interest rate for now. This probably eased the demand for EURO and contributed to the breakdown of 1.4500.

***

Next week brings us more important releases such as EURO’s German ZEW Economic Sentiment and US’s building permits. We know that sentiments are core to the economy and hence do pay attention to it. Furthermore building permits lead to housing start ups and sales. We know that home sales is important to the economy as it spurs economic activities. Refer to the economic calender for the list of releases.

Watch out for more adverse fall out from Greece’s problem. Furthermore, increasingly vocal comments from China about the need to moderate growth may further dampen the recovery party. In the previous week, statistics such as retail sales in the US took a beating and traders are worried about an uneven recovery in the US. Watch out if further poor releases in US may trigger panic reactions.

***

On the technical side, we have broken below 1.4500 back into the previous range of 1.4200 – 1.4500.

Bullish developments may bring us to test 1.4500 again while continued sentiment fall out may trigger bearish advancement towards 1.4200.

Do remember the resistance and support lines are never a single pip.

I had readers writing to me about losing their money during last Friday’s sharp dip. I am sadden to hear this. Folks, remember that money is hard to come by. Do not risk it unnecessarily. Plan your trades.

Trade Safely.

Read more Forex Articles and Views by The Koala at www.thegeekknows.com

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January 16th, 2010 @ 2:29 am by Setyo Wibowo

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EURUSD Weekly Summary
The EURUSD failed to continue its bullish momentum this week. The pair attempted to push higher, topped at 1.4578 but further bullish momentum was rejected as the pair closed significantly lower below 1.4450 key support level. Technically, this fact should be seen as bullish failure and we may once again trapped in range area of 1.4450 – 1.4250 next week but the bias is more to the downside. Euro weakness was triggered by Greek fiscal deficit which could keep pressure on the currency. Break below 1.4250 should trigger further bearish scenario towards 1.4000 area. So, as long as price stay below 1.4450, I prefer a bearish scenario. Have a great weekend and see you guys next week.

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January 15th, 2010 @ 5:25 pm by The Geek

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Good day to all.

It is Friday, AKA time to cash the profits out for pub money day!

Hmmm, however if you were betting on a bullish momentum then i am afraid there will be no party. The EUR/USD took a major dive today.

Like brothers from the same farm, the S&P 500 dips too.

Oil falls into the $77 region, placing it back within the previous range. Thawing winter probably snapped speculative demands of oil.

Gold in the meanwhile remains directionless around $1130+.

***

So who let the bears out? WOOF WOOF WOOF ( ok i know it is DOGs but just ignore that ok ? )

Risk Aversion !

Remember how i have been nagging, reminding, saying, grumbling, typing and ARGGH whatever about Greece’s problem? Where sometimes it may seem to have disappeared but one must never think that a problem will solve by itself?

Yap. The problem is back! The Koala is right!

ECB’s Trichet’s comments about Greece’s problems most likely sent investors running for cover. The thought of the possibility of a “no bail out” policy for Greece probably rained on the investors’ parade!

China’s moves to tame growth and speculative bubbles are taking their toil on sentiment as well.

We all know that sentiments, especially bad ones, spread like cancer and hence do be prudent. Use proper money management and survive to trade another day.

Bullish relief may bring us to 1.4400.

If the bears keep things in check, we may end at 1.4360/25.

Keep a look out for my EUR/USD Weekly Review over the weekends.

***

I watched Daybreakers today!

The concept is interesting but the delivery of the movie leaves more to be desired. Imagine if one day the world does becomes like this. Will you turn yourself into one of them or remain as a human?

Trade Safe.

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January 15th, 2010 @ 12:17 pm by Matt "NewstraderFX" Carniol

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This is something that happens sometimes in trading and it’s a difficult thing to deal with; right now, I can’t see why or how currencies will move. The reason?  What exists now in the market is a serious lack of strong fundamental drivers, which tend to get market participants thinking in a herd mentality and price moving in a trend.

What I do see is that many of the familiar correlations are breaking down.  For example, when investors are buying higher-yielding assets (i.e. buying risk), what happens is that lower yielding currencies like the yen are borrowed and traded (sold) for higher yielding assets like the Australian dollar. This is what’s known as the carry trade and something that’s been a major factor in currency movement for years. The reverse is also true; when the market wants to get out of riskier positions, carry trades unwind and the yen tends to gain while higher-yielders fall.

The dollar became the funding currency du jour last March after Bernanke announced on television that the Fed was electronically printing dollars. The resultant flood of excessively cheap liquidity sparked an enormous rally in stocks (over 60% from then until the end of 2009) and a plunge in the dollar against basically everything as its interbank borrowing costs (LIBOR) fell below everything, including the yen.

Let’s look at a Bloomberg headline from today:

“Yen, Dollar Gain as China-Slowdown Concern Spurs Safety Demand”

Huh? The Nikkei and Topix were up 0.68% and 0.77% respectively, while the FTSE was gaining 0.22%. And while that may be nothing to write home about in terms of appreciation, it’s hardly what I would call a “risk-averse” move.   True, there’s a bit of panic over Greece, but that’s been in the news for days now. Why didn’t the euro fall yesterday or the day before that? How can you make a guess that the euro would fall on Friday when the news was basically three days old?

In any event, Bloomberg was also reporting that “corporate credit quality is improving at the fastest pace in almost three years, underpinning the surge in bond sales as economies rebound.” So the question is where’s the risk aversion?

If you’re really going to be a trader it’s important to come to the realization that there are going to be times when NOT trading is about the best trade you can make (meaning that the decision not to trade is a trade itself). I know that isn’t easy because we’re all here to make trades, but you really should be here to do is to make winning trades. For me, that means not trading when I come to the conclusion that I think I’m confused.

I personally can’t trade when I don’t feel extremely confidant in what I’m doing, and that usually happens when a strong fundamental driver is in play. Here’s an example:

I was desperately hoping that the recent NFP report was going to be good. It that had happened, investors would have been speculating like mad about the Fed raising interest rates sooner rather than later, which would of sparked a very nice rally in the dollar that may have lasted for weeks. What happened was that the report was somewhat mixed in that it showed a worse than expected loss for December while the November numbers were revised to a small gain (the first in 20 months). Speculation came off regarding a Fed rate increase, but for the most part currencies suffered the kind of back-and-forth movement that generally is deadly to most traders’ accounts throughout most of the week.

Truth be told, I really don’t feel like I have a handle on things right now and I’m not embarrassed to say so. What I really think is that I’m confused and when I that happens, I try to resist all temptation to push the button. Look at it this way:

Let’s say that trading is basically a coin flip or a 50-50 shot; your trade can only be a winner or a loser (leaving break-even out of the equation for a moment). Fifty percent of the time you’ll lose, and 50% of the time you’ll win. Let’s also say that in 50% of your winning trades, at some point you will be losing. What that means is that in 75% of the trades you get into, there’s a chance that at some point you’re going to be in a negative position.

So my question is, how can you get into a trade when there’s a 75% chance that you’re going to be losing money at some point unless you feel very confident in what you’re doing? I certainly can’t, because there’s nearly a 100% chance of two things happening.

  1. I’m going to decide to cut my losses much faster than usual
  2. I’m going to close the trade with only a small profit, which means that my reward to risk ratio was probably very low or maybe even negative (which means that I could be winning 60% to 70% of my trades and still be a loser)!

So, don’t be afraid to not have a trade. It’s sometimes the best decision you can make. Keep your powder dry until there’s a good strong fundamental driver present because they happen frequently enough and they can last for weeks or months.

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January 15th, 2010 @ 3:22 am by Johan Kriek

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by Johan Kriek (jkriek@fxinstructor.com)

Probabilities:

Direction of  Highest Probability: BEARISH
60 minute trend resistance: 1.4500
Bullish Probability above: 1.4500
Significant resistance: 1.4500
Significant support:1.4290

Direction of  Highest Probability: BULLISH
60 minute trend support: 1.6115
Bearish Probability below: 1.6115
Significant support: 1.6115
Significant resistance:1.6370

Direction of  Highest Probability: BEARISH
60 minute trend resistance: 0.9317
Bullish Probability above: 0.9330
Significant resistance: 0.9330
Significant support:0.9254

Direction of  Highest Probability: BEARISH
60 minute trend resistance: 91.45
Bullish Probability above: 91.45
Significant resistance: 91.45, 93.20
Significant support:0.8500

___________________________________
This analysis has been based on the Probability Study Technique which is derived from the Dow Theory

Also note that a “trading condition” does not constitute a trading signal, but rather a context to execute your own trading system within.

For more about the Probability Study Technique, please visit forums.fxinstructor.com or register yourself a seat at
http://www.fxinstructor.com/eng/courses/probability.php to learn this technique or to book a free Level 1 class

Enjoy and good luck!

Johan

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