Malaysia Forex Traders

Forex Income Engine

2008-11-26T08:49:00.001-08:00

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Forex Income Engine

2008-11-26T08:49:00.000-08:00

Euro comes off highs against dollar on caution ahead of U.S. jobs data

2008-07-02T10:23:00.001-07:00

The euro came off highs against the dollar on profit-taking ahead of key jobs data out of the U.S. and Thursday's interest rate decision by the European Central Bank. The euro began the day on a firm note, buoyed by hopes of a euro zone rate hike Thursday, but has since edged back down after failing to break through the key $1.5850 mark.

Attention has turned to the release of ADP jobs data out of the U.S., which should give a hint on how the closely-watched official non-farm payroll numbers will look when they are released Thursday. A better-than-expected ISM survey on U.S. manufacturing activity Tuesday provided some optimism that the U.S. economy may be over the worst. Many remain sceptical, however, and any gains are proving to be shortlived.

"The dollar's failure to rally despite the firm headline ISM number shows investors are highly sceptical of the U.S.' near-term economic prospects," said Geoffrey Yu at UBS. The euro/dollar rate is likely to remain confined to tight ranges as market players stay sidelined ahead of what is largely expected to be a quarter point interest rate rise from the ECB Thursday.

With the euro zone economy showing signs of faltering, however, the key focus will be on the accompanying press conference for any signals on whether the central bank will be in a position to deliver any more rate rises.

Euro zone PPI data earlier Wednesday nevertheless continued to suggest that the ECB's worries over rising inflationary pressures have far from gone away. The figures showed producer prices in the region rose by 1.2 percent in May from April and by 7.1 percent from a year earlier, way above forecasts for more moderate gains of 0.7 and 6.6 percent respectively.

Elsewhere, the pound remained weak, with the euro earlier hitting a 23-day high against the UK currency of 0.7968, as UK data pointed to a very bleak outlook for the UK housing and construction sectors.

The latest UK construction PMI slumped to 38.8 in June from 43.9 in May, showing activity in the sector declining at the fastest pace since the series began in 1997. At the same time, housing equity withdrawal slumped to its lowest level since the first quarter of 2001, according to figures released by the Bank of England.

The news comes amid major concerns about the outlook for the housebuilding sector, as shares in Taylor Wimpey Plc lost nearly half their value after it announced it had failed to raise equity and will cut 900 jobs, as conditions in the housebuilding market continue to deteriorate.

Euro comes off highs against dollar on caution ahead of U.S. jobs data

2008-07-02T10:23:00.000-07:00

Dollar Broadly Lower, FOMC & Carry Trades Watched

2008-06-22T20:32:00.001-07:00

Dollar was broadly lower last week as markets readjusted over-expectation on the chance of rate hike from Fed and renewed concern of credit crisis. Indeed, the odds of a 25bps hike in this week's FOMC meeting, as implied by interest rate futures, dropped sharply to a slim 8% chance after a series of disappointing economic data last week. Elsewhere in the markets, rate gap and expectation remained the dominant force with Aussie and Kiwi climbing most while the Japanese yen was broadly lower but the yen regained some grounds towards the end of the week as global stock markets tumbled. FOMC meeting will take center stage this week with a number of important economic data featured from US, Eurozone and UK.

On the data front, the data released last week provided little good news to the US economy. Headline PPI climbed sharply from 6.2% yoy to 7.2% yoy in May, beating expectation of 6.8%. Core PPI, on the other hand, was unchanged at 3.0% yoy. Housing starts dropped further to 0.975m annualized rate, a 17 year low. Building permits also dropped to 0.969m, annualized rate. NY State Manufacturing report dropped sharply from -3 to -8.68 in Jun versus expectation of -3.0. The index has been negative in four of the past five months as conditions remain restrictive. Philly Fed index also missed expectation and dropped further to -17.1 in Jun. Industrial production missed expectation and dropped -0.2% mom in May, with capacity utilization down from 79.7% to 79.4%. Current account deficit widened to -176.4b in Q1. Leading indicators climbed 0.1% in May. Jobless claims came in at 381k, slightly worse than expectation of 375k. TIC capital inflow recorded sharp rise to 115.1b in Apr.

Eurozone HICP was revised up to all time high of 3.7% yoy in May, up from prior month's 3.3%. Trade surplus in Eurozone came in at 2.3B in Jun. Germany ZEW dropped to a 15 year low of -52.4. Germany PPI climbed 1.0% mom, 6.0% yoy, above expectation of 0.9% mom, 5.8% yoy.

It was a big week for the pound. Headline CPI accelerated further to 3.3% yoy in May, with RPI climbed to 4.3% yoy, RPI-X climbed to 4.4% yoy. With inflation above 3.0%, BoE Governor King was triggered to write an open letter to Chancellor Darling. In the letter, King explained that oil and food prices, which alone account for 1.1% of the 1.2% increase in CPI since Dec, was the major driving factor in the current surge in consumer inflation. He noted that he expected a sequence of open letter over the next year or so. However, the overall tone was much less hawkish than expected. King noted that the path to bring inflation down to the bank's 2% target was "uncertain" even though CPI may exceed 4% this year. This disappointed the markets who has been expecting King to sketch a clear plan.

BoE minutes released showed an 8-1 vote too keep rates unchanged in the Jun meeting. Blanchflower was the sole dissenter voting for a 25bps cut. Most members believed that short term inflation outlook has worsened further and medium term inflation risks have moved further to the upside. If there were a serious threat to medium-term inflation expectations then a preemptive rise in rates would be appropriate," but after all, they still believe that a slowdown in the economy is enough to bring CPI back to the 2% target in medium term. The minutes also explicitly said that there was no case of a cut because of the inflation risks.

UK retail sales grew 3.5% mom in May, the most since 1986, pushing yoy rate to 8.1%, much stronger than consensus of -0.1% mom and 4.1% yoy. The data argued that UK consumer spending is still robust despite sluggish rate growth and inflation. Also, the data lifted some hope for BoE to raise rate to curb the persistently high inflation but it remains premature to draw conclusion based on just one piece of data. CBI industrial survey surprised on the upside by turning positive to +1 in Jun.

BoJ minutes released noted that the board members are fully aware of the risks on both growth and inflation, but there is little chance to change policy stance in the near future. Japanese Tertiary Industry index climbed 1.8% in Apr. All industry index climbed 0.8% in Apr.

SNB left three-month Libor unchanged at 2.25-3.25%, with mid point at 2.75%. The accompanying statement noted that there is a general increase in inflation since "the global economy remains robust and the price of oil has continued to climb" even though economic activity slowed down. Financial markets are "less turbulent". Real GDP forecasts in 2008 was unchanged at 1.5-2.0%, but inflation forecast is up to 2.7% SNB expected that with current Libor rate of 2.75%, inflation will ease back to 1.7% in 2009 and 1.3% in 200. Swiss retail sales climbed 2.4% mom in Apr, above expectation of 2.0%. ZEW index deteriorated further from -60.4 to -63.8 in Jun. Combined PPI climbed 1.2% mom, 3.9% yoy in May, above expectation of 0.9% mom, 3.6% yoy. Industrial production dropped -9.3% qoq in Q1, rose 4.3% yoy.

Canadian headline CPI accelerate for the second consecutive month, and at a much faster than expected pace, from 1.7% yoy to 2.2% yoy in May. Though, core CPI remains unchanged at 1.5%. The data provided the solid bullet for BoC to kept rates on hold last week and is supportive to BoC to refrain from further rate cut in view of rising inflationary pressure. Retail sales report was solid which saw ex-auto sales jumped by 1.1% in Apr, much better than consensus of 0.7%. Headline sales rose 0.6% mom, inline with expectations. Leading indicators climbed more than expected by 0.2% in May.

RBA meeting minutes said that "on current policy settings, the necessary moderation in demand is likely to occur. This is taken as a signal that RBA is comfortable with the current policy stance and reduced the chance of another hike in the near future.

Fundamental Analysis

2008-06-18T11:21:00.001-07:00

Fundamental analysis is a technique that attempts to determine a Currency strength by focusing on underlying factors that affect a country's actual business and its future prospects. On a broader scope, you can perform fundamental analysis on economy as a whole. The term simply refers to the analysis of the economic well-being of a financial entity as opposed to only its price movements.

Example for Fundamental Analysis based on Economics Event :

What moves EUR/USD?

1. US Non Farm Payroll — measures new jobs created in States.
2. Interest rates — FOMC rate decisions.
3. US Trade Balance, European Trade Balance — a proportion between exports and imports in US economy.
4. U.S. Current Account
5. US Treasury Inflow Capital (TIC) Data — a measure of how much foreign buying of country's securities takes place.
6. US Gross domestic product (GDP) — a measurement of growth in economy.
7. Federal Open Market Committee (FOMC) Rate Decisions — data about changes in currency rates.
8. US Retail Sales — a measure of strength of consumer expenditure.
9. Consumer price index (CPI) — a measure of inflation in Europe.

What moves USD/JPY?
Besides US economic indicators, there are important data of Japan economy with its indicators:

1. Bank of Japan Monetary Policy Meeting — decides on measures to preserve strength of the currency.
2. Japanese Trade Balance — Japanese imports versus exports.
3. Gross domestic product (GDP) — growth in an economy.
4. Consumer price index (CPI) — a measure of inflation.
5. Industrial production index — a measure of activity in the Japanese manufacturing sector
6. Retail sales — a measure of strength of consumer expenditure.
7. Tankan report — assessment of Japanese business conditions: proportion of "optimistic" businesses to "pessimistic" ones.
8. Unemployment rate

What moves GBP/USD?
All US economic indicators should be watched plus:
1. UK Housing Prices — number one indicator for Pound, UK Housing Prices are primary gauge of inflation in the UK.
2. Bank of England Meeting — provides an outline of monetary policy and changes to currency interest rates.
3. UK Unemployment rate
4. UK Retail Sales

Dollar Gains Narrowly Vs Euro, Yen In Data-Light Session

2008-06-18T10:19:00.001-07:00

The dollar is faintly stronger versus its major rivals early Wednesday, but a lack of major data releases is keeping trading muted.

Without any economic reports to guide currency markets, traders are focusing on a dollar-supportive ease in oil prices overnight. However, earnings results from Morgan Stanley (MS) are weighing on U.S. sentiment.

This sideways trading will likely grip the dollar until next week, say analysts, when the market will finally receive a single view on monetary policy and an interest rate decision from the Federal Open Market Committee on Wednesday.

The attention to interest rates has kept the lower-yielding yen under pressure from its crosses. The yen fell overnight to its lowest level since July 2007 against the euro, which rose as high as Y168.05. Against the dollar, the yen is within range of its four-month low struck Monday.

Early Wednesday in New York, the euro was at $1.5497 from $1.5513 late Tuesday. The dollar was at Y108.13 from Y107.96. The euro was at Y167.57 from Y167.53 late Tuesday, according to ECB. The U.K. pound was at $1.9545 from $1.9573, while the dollar was at CHF1.0426 from CHF1.0420 Tuesday.

Given oil's dominance over the dollar's movements, traders are looking toward the release at 10:35 a.m. EDT of the latest U.S. Energy Department oil inventories. Oil traders have said the data will be the key driver for prices, and therefore could swing the buck from its narrow range Wednesday.

Meanwhile, the euro was briefly boosted overnight versus the dollar on a warning from European Central Bank executive board member Juergen Stark that inflation levels remain "unacceptably high." He said that there is a need to check that the current policy rate is appropriate to counter price risks.

That supports the market view that the ECB is likely to hike interest rates at its next meeting in July, which would increase the yield of the euro versus the dollar.

However, other ECB officials recently appeared to be trying to temper the market's tightening expectations, holding down excessive euro gains.

The dollar too was tempered in its advance due to a scaling back of market expectations of interest rate hikes by the Fed, especially after U.S. data releases Tuesday also painted a still strained economic picture.

Elsewhere, the pound remained under fairly heavy selling pressure after the Bank of England signaled Wednesday that although U.K. inflation could rise as far as 4% later this year, the bank is in no position to hike interest rates given the weakness of the U.K. economy and the risk this would pose to financial markets.

Publication of the latest minutes from the BOE monetary policy committee failed to shift sentiment as they showed members voting 8 to 1 to leave rates unchanged, very much as the market expected.

In Shanghai, broad weakness in the U.S. dollar and a fall in the dollar-yuan fixing rate pushed China's yuan to a record high against the U.S. unit Wednesday. Dealers said the dollar will likely consolidate around the psychological support of CNY6.8800 the rest of the week, given its sharp drop against the yuan recently.

Dollar Gains Narrowly Vs Euro, Yen In Data-Light Session

2008-06-18T10:19:00.000-07:00

Battered and Bruised

2008-06-04T15:16:00.001-07:00

Battered and Bruised

It was a manic Monday for the British Pound, plunging hundreds of pips against major currencies on word of new troubles in the lending sector. Mortgage lender Bradford and Bingley, popularly known as B&B, is in serious trouble, and is selling off a huge chunk of its business in an effort to remain afloat. The news hit the British Pound hard, sending the currency spiraling to a 300 pip loss vs. the Japanese Yen in the space of three hours (see Figure 1).

Figure 1: 15 minute chart shows GBP/JPY plunge of 300 pips on June 2. Source: Saxo Bank

Both Bradford and Bingley started out as separate "building societies", and merged in 1964. In recent years, B&B has transformed itself into a specialist mortgage bank and is now Britain's largest provider of loans to landlords and property investors. Clearly this is not the best business to be in right now, as the U.K.'s housing bubble appears to be deflating rapidly. B&B also provides so-called "self-cert" loans for the self-employed, similar in some ways to the "no-doc" loans that caused so much trouble for U.S. mortgage companies over the past several years. To shore up its finances, the lender is planning to sell a 23% stake to US private equity giant Texas Pacific Group. B&B also was forced to cancel a rights offering that was designed to raise capital to shore up the lender's bottom line. As traders digested this news, the British Pound was hit hard against the U.S. Dollar, with the GBP/USD pair falling over 200 pips before finding support at 1.9600, as seen here on the hourly chart (see Figure 2).

Figure 2: GBP/USD takes a hard fall, losing over 200 pips in short order. Source: Saxo Bank

The Great Britain Pound - U.S. Dollar chart is intriguing on the longer time frames as well; in fact, some have suggested that the weekly chart shows a massive head and shoulders formation. Depending on how you look at it, one could say that this sloppy top has been under construction for several years. You can also see that the Pound has not been strong against the greenback for months, stretching back to November. This is despite the fact that the USD fell to new lows vs. the Euro and Australian Dollar during that time. Hey, it's not pretty, but you can see a topping formation in the chart, with major support in the area of 1.9400 (see Figure 3).

Figure 3: GBP/USD weekly chart shows a long-term topping formation. Source: Saxo Bank

Like Glenn Close's obsessed character in the classic '80's movie "Fatal Attraction", the subprime/credit mess just won't die. So what's next for the British Pound? Traders are looking for clues as to whether a bailout might be in the works. Northern Rock, the best known British victim of the credit squeeze and a rival of B&B's, was nationalized by the British government after it ran into severe trouble acquiring credit to finance its operations. Keep an eye on the minutes of the Bank of England's most recent meeting, to be released this Thursday, for indications as to whether the BoE had deeper concerns about the banking sector when they met recently. Just the thought that after all this time there could be more shoes to drop - possibly another Bear Stearns, or another Northern Rock - could serve as a major blow to confidence in both currency and equity markets. Stay tuned.

Email of the Week

Q) Hi Ed, I read your articles and they gave me the little push I needed to begin to make some gains in this market. I want to know what you think of my way to trade. I'm a day worker, and I trade from 22:00 (EST) to 02:00 (EST). My risk is 6% per trade (because my $1 dollar per pip mini account), and never left an open position overnight. The most of the time I never get big moves, just little swings, and at least try to take 1:1 risk reward ratio plus the spread, but this does not always happen and sometimes I get out early if I notice some risky move.

Now in almost two months I have a gain of 45%. I win 62% of my trades, 15% breakeven, and 23% loss. If I get more equity on my account I will reduce my risk per trade, close half of the positions on some level, set my stop at breakeven and let my profits run more. I wish to know your opinion and perhaps some advice from you. Thanks for your time!

Ed Ponsi) Thank you for your kind words, I really appreciate it! Wow, it sounds like you're doing great trading the Asian session, congratulations! I'm glad to hear that you're making money, now I need you to protect your gains with good risk management. It sounds like you're already doing this, but risk management is a never-ending struggle - especially when you are doing well! It doesn't matter how much money we make if we give it back, so job #1 is to hang on to those gains, no matter what market conditions may occur. Here are some changes that I would try to make:

1) Increase your risk-reward ratio. One of the tenets of good trading is to make more money when you win than you put at risk when you lose. In my opinion risk to reward ratio is more important than the number of winners vs. losers. I've seen plenty of traders who had a high win-loss ratio, but because of the level of risk that they are taking, some of them are just one loss away from a margin call.

2) Try to reduce risk and work in those partial exits; this is a great way to let winners run. I know that this might be tough because of capital concerns, etc. but at least create game plans for doing this. That way, when you're ready, it won't seem like a strange new world to you.

3) Don't forget to have fun! As traders, we have the best job in the world - we are basically paid to play a game of pattern recognition and psychology. What could be better than that? Be sure to reward yourself for all of the hard work that you put into learning how to trade, you deserve it! This is also important psychologically, that you have some kind of tangible reward for the work you've done - even if it's symbolic. Congratulations and keep up the good work!

The Bo Diddley Beat

What can you say about a man who had his own beat named after him? I was lucky enough to see this rock guitar legend perform on Randall's Island (a sliver of land on New York's East River, located between Manhattan and Queens) in the summer of 2004, and he tore it up - not bad for a man in his mid-seventies! Rest in peace, Bo Diddley.

Have a question about Forex trading? Send an email to eponsi@tradingacademy.com and we may use your question in an upcoming newsletter. Until next time, best of luck to you in trading.

Watch Out for Scam Forex Seminar !

2008-05-03T21:24:00.000-07:00

a lot of forex seminar in Malaysia have misleading words to amateur traders. Those seminar guru provide good sales talk with misleading words with forex rewards, hidden the real truth of forex marketing trading risk disclosure. Beware of those 100% accuracy forex trading by MR K.

Euro in Range, Sterling Retreats after Central Banks on Hold

2007-09-08T19:52:00.001-07:00

Euro in Range, Sterling Retreats after Central Banks on Hold

Euro stays in tight range while Sterling retreats mildly term ECB and BoE left rates unchanged. ECB kept rates unchanged at 4.00% today. In the following press conference, Trichet said that even though policy stance is still on the "accommodative side" and inflation risks remains on the upside in the medium term, more information is needed before the next policy move. Also Trichet said that it's too early to draw conclusion from the current correction in risk reassessment. No "vigilance" was used by Trichet this time which suggests that ECB will be on hold for a while, at least, till Oct. One thing to note is that Trichet emphasized a few times that ECB has to ensure that money markets function properly whatever the interest rate is and that this is completely separate topic to maintaining price stability. Also, ECB announced a new long-term refinancing operation as a supplementary operation will be conducted, the details of which will be available right after the press conference.

BoE kept rates unchanged at 5.75% as widely expected. In the accompanying statement BoE expect inflation to remain close to its 2% target, or a "little below", in the next few months. Also, "tentative signs of a lowing in consumer spending" is noted. But "indicators of pricing pressure remain somewhat elevated. " Regarding the recent credit crunch, BoE noted that it's too soon to tell how the disruption in financial markets will impair the availability of credit to companies and households but will monitor closely the evolution of both "credit spreads" and the "quantities of credit extended". more details will be available in the minutes to be published on Sep 19.

From US, jobless claims dropped more than expected to 318k. Q2 productivity accelerated more than expected to 2.6% while unit labor costs slowed to 1.4%, suggesting reduced risk of wave inflation. Next will be ISM Non-manufacturing Index. Dollar has been pressured since yesterday's poor ADP and pending home sales. Additional pressure will be seen in case of downside surprise in today's ISM non-manufacturing index as markets are already speculating and poor NFP number tomorrow.

FX Markets Quietly Steady after Existing Home Sales

2007-08-27T08:24:00.000-07:00

FX Markets Quietly Steady after Existing Home Sales

The forex markets are quietly steady in early US session. Existing home sales in US dropped merely 0.2% in Jul from an upwardly revised 5.76m annualized rate to 5.75m. Though it marked a fifth consecutive decline in the existing home sales and is the lowest reading since Nov 02, it's slightly better than expectation of 5.70m. The inventory-to-sales ratio surged to 9.6 months, while the median existing price is down by 0.6%. The data offered no catalyst for more volatility in the markets. Focus will be shifting to tomorrow's Germany Ifo and Eurozone M3.

Speaking of the Euro, the highly anticipated speech from Trichet has just focused on productivity. He said that eurozone productivity growth is "disappointing" comparing with more resilient growth in the US. And it is also "not particularly high" compared with previous business cycles. Productivity growth has been stronger in the manufacturing sector. But in services sector, it has not improved much. Trichet has signaled a Sep hike in the Aug ECB meeting just before turmoil in the financial markets. Markets hoped for some hints from Trichet on whether ECB will still hike or not in today's speech.

COT widget

2007-08-07T13:44:00.000-07:00

Stay away from bonds, warns economist

2007-08-03T18:23:00.000-07:00

Stay away from bonds, warns economist
FinanceAsia, 3 August 2007
Link: http://www.financeasia.com/print.aspx?CIID=88105

Robert Lind says high-yield bonds are particularly vulnerable to the
market correction and should warrant higher risk premiums.

After Wednesday's global stock market crash, which caused Hong Kong's
Hang Seng index to drop 3.15%, the markets have been fickle. Intraday
trade has been erratic as bargain hunters move in and out of stocks,
trying to determine the markets' next move.

Negative sentiment has been fuelled by a couple of bad news reports.
Bear Stearns halted redemptions in a mortgage-related hedge fund in the
US, and Australia's Macquarie Bank said two of its bond funds may suffer
potential losses of up to 25%.

As stocks rose yesterday, Moody's darkened the mood again. The credit
ratings agency placed MGIC Australia's rating on review for possible
downgrade. MGIC Australia, is a wholly-owned subsidiary of Mortgage
Guaranty Insurance Corporation, a leading mortgage insurer in the US.

In this environment, investors are finding it impossible to price risk.
The benchmark iTraxx Crossover index, which consists of 50 mostly
junk-rated credits and is an important indicator of sentiment, broke the
500 barrier on Monday - illustrating the heightened cost of insurance
for the most risky assets. But it came down again substantially on
Tuesday, closing at 402, while rising once again on Wednesday to 475.

Says one specialist high-yield investor: "This magnitude of change only
happens every five to 10 years. Investors are so nervous they just don't
know what to do with their money and are behaving erratically."

However, Robert Lind, head of macro research at ABN AMRO, states that
these significant market moves should be viewed as a "normalisation",
which has come about following a bullrun in credit where investors
"bought anything", at prices which did not adequately reflect the risk.

"The areas which have suffered the most significant compressions are the
high-yield debt sectors in emerging markets. These markets should be
perceived as very vulnerable and warrant a much greater risk premium
than they have offered so far. We still need to see investors exercise
considerably more discrimination in their assessment of risk."

Since the tight spreads over the last few years have come about by in an
era of historically low interest rates in an environment of strong
global growth, Lind thinks it is likely that rates will increase. This
should lead to a gradual widening of spreads, although recent events -
which were long overdue - reflect a process which can occasionally be
quite dramatic.

In its latest credit commentary, BNP Paribas says: "The amplitude and
velocity of spread widening in the cash bond, asset swap and CDS sectors
virtually ensure the markets will overshoot. The growing sense of dread
however over rising contagion risks and falling liquidity conditions
hints at fear-driven trade trumping credit rating upgrades and the
positive trends in economic, inflation, and interest rate data; thus we
anticipate more widening in credit spreads."

However, interest rates are still far from restrictive. According to
Lind, the greatest concern is whether the market is appropriately
pricing in the risk of the US housing problem, which triggered the
correction in the first place, and inflation, which are the two factors
that could dampen global growth.

"Fundamentally, from our perspective, investors need to be cautious of
corporate bonds. They are still too expensive. If they want to play the
economic cycle, a better way of doing so is via the equity market, which
is still well-supported in terms of valuation and growth. Obviously, we
are still in an environment where the pressure on credit could continue
to weigh on equities, so investors should shift from riskier areas of
the equity market to safer ones."

Dollar posts modest rise after stronger-than expected CPI, housing data

2007-07-18T13:01:00.001-07:00

Dollar posts modest rise after stronger-than expected CPI, housing data

LONDON - The dollar posted a modest rise after US inflation and housing figures came in stronger than expected.

The CPI measure of inflation rose 0.2 pct in June from May, the smallest monthly increase since January but above analyst expectations of a 0.1 pct rise.

Meanwhile in the US housing sector, which is generally seen as the economy's weakpoint, figures showed the number of new homes built in June posted a 2.3 pct rise from a year ago to a 1.467 mln unit annual rate. The consensus forecast had been for a more moderate rise to 1.450 mln units.

The figures caused the dollar to make a moderate gain against the euro, although its moves are likely to be limited while markets await Federal Reserve chairman Ben Bernanke's testimony to congress.

At 1.44 pm, the euro was at 1.3755 usd having been at 1.3780 shortly before the data was released. The pound also slid further off its morning high against the greenback, dropping to 2.0464 usd from 2.0505.

The pound, which had earlier set a 26-year high of 2.0547 usd, retreated steadily to below the 2.04 usd level on the news that the 9-strong BoE rate-setting committee was split by a 6-to-3 margin to hike borrowing costs to 5.75 pct this month.

The news was seen as a little less hawkish than expected and led to a slight scaling back in rate hike expectations.

Markets still predict another quarter point hike, to 6.00 pct, over the coming months but appear to be a little less certain whether an increase to 6.25 pct will materialise.

However, Bear Stearns analysts said the data will do little to change the outlook for interest rates in the UK.

"The tone of the MPC hawks remains uncompromising and it sounds like the UK is on a collision course with 6.0 pct rates before year end," they said. "There is obviously a split in thinking in the MPC in terms of how far rates need to go, so timing for the next move will be down to the data and (BoE governor) Mervyn King's hearts and minds campaign in the next few months," they added.

Strong NY State Index Provides No Support to Dollar

2007-07-16T10:55:00.000-07:00

The New York State Manufacturing Index defied critics once again in Jul and rose to 26.46, reaching a one year high, and being much better than expectation of a fall to 28.0. The index indicates manufacturing conditions continue to improve in the New York State, with details supporting the headline view. However, this piece of good news provides little support to the green back and it continues to remain pressured. Dollar continue to hover near record low against Euro, falls to fresh 26 year low against sterling. In addition, the greenback is still staying near to the new 22 years low and 18 years low against Kiwi and Aussie made earlier today. Canadian dollar is also hovering new 30 year high against the greenback.

Nevertheless, downside momentum in the greenback is limited so far as traders are holding their bets on some key events in the week. Producer and consumer inflation will be featured in the coming two days with another round of housing data. More important, Bernanke will have his semi-annual testimony on Wed and Thu, together with the release of FOMC minutes.

GBP/USD
Daily Pivots: (S1) 2.0279; (P) 2.0323; (R1) 2.0385
Cable's recent rally resumes today by surging to new 26 years high at 2.0403. At this point, further rally should be seen as long as cable stays above 2.0307 minor support. Sustained trading above trend line resistance (now at 2.0380) will encourage further rally towards next upside target of 100% projection of 1.9183 to 2.0132 from 1.9621 at 2.0570. However, note that upside momentum is seen diminishing with mild bearish divergence condition in 4 hours RSI. A break below 2.0307 minor support will indicate that the rally from 1.9621 could have made a top and deeper correction should then be seen towards 2.0056 support.

In the bigger picture, the sustained break of 2.0207 projection target confirms underlying upside momentum is still strong. Also, it added much credence to the case that whole up trend from 1.7047 is resumption of multi-year up trend from 1.3680. In such case, further rally should then be seen to 61.8% projection of 1.3680 (01 low) to 1.9554 (05 high) from 1.7047 (05 low) at 2.0677 first.

Having said that, even in case of a short term correction, downside should be contained above 1.9783 resistance turned support and bring medium term rally resumption. Also, break of 1.9862 low is needed to indicate a medium term top is formed and turn outlook neutral. Otherwise, medium term outlook will remain bullish.

What ARE the 17 Steps? by Van Tharp

2007-07-15T06:55:00.000-07:00

Lets take a look at the 17 steps one by one, with the first of the eight steps involving the development of a sound business plan.

First — assess your beliefs about trading and about yourself.

Although it’s difficult to grasp, did you know that nobody actually trades the market? Instead, you always trade your beliefs about the market

Second — determine your objectives for trading. System experts know that understanding your objectives thoroughly is half the battle in developing a system but most people have never taken the time to even consider what their objectives might be.

Third — understand the big picture. What’s the market doing overall and how can you measure it for yourself? It's important that you know how to determine the big picture for yourself and how to measure it.

Fourth — include three strategies that are compatible with the big picture in your business plan. Although there are thousands of systems out there, there are not many types of strategies. Know the essence of ten key strategies that you could use, the general picture of how they work and how you can adapt them for yourself.

Fifth — understand what your personal edges might be and how they set you off from the crowd. Having an edge in the markets isn’t just a slight advantage; it could be the pivotal difference in your success. So it’s very important to list your edges in your business plan and be able to capitalize on them. You need to know the key edges that almost any investor has over market makers or institutional investors. Or if you are a CTA, hedge fund, or portfolio manager, you need to know what your key edges might be.

Sixth — understand the key systems that almost every business must understand and start to think about developing structures for those systems. From marketing to cash flow, to back office and clients, trading is a business and should be regarded as such. More importantly, developing the right structures and systems is crucial for business success. For example, if you are a private trader, you must deal with clients – even if those clients are you and your family.

Seventh — develop a worst-case contingency plan. Most people don’t even consider this crucial component until it’s too late, but the key to a successful business plan is to be able to overcome disaster.

Eighth — select your trading market based upon two key factors. Learn what you need to know so that you can determine the following: Are you going to trade stocks? Are you going to trade futures? Are you going to trade mini-forex or real forex through the big banks? Are you going to do options on any of these? What market will you trade? Whatever you select must take into account the big picture and what is likely to happen in the next five to ten years.

Ninth — know about strategy preparation. There are several key sub steps that you should take before you think about trading. You need to know what you should do to get ready and how to follow up.

Tenth — know the key steps in strategy development and how to test for each. You’ll need to understand how to test exit signals, determine what your initial risk will be, and select and test your profit taking exits.

Eleventh — properly evaluate your system. Know what information you’ll need to gather to really test and compare your system with any other system. It's good to have a formula that will allow you to compare your system with any other system in the world and rank that system. Thus, you’ll know whether your system is weak, average, good, excellent, or superb.

Twelfth — master a simple way to get to know your system well without a lot of cost. You need a method to understand if your back testing is accurate. And, to understand what the worst-case scenarios will be for your system. Through this testing, you’ll be able to develop a simple position sizing model to fit your objectives.

Thirteenth — work on your objectives to actually develop position sizing models. This step is one of the keys to developing a system that fits you.

Fourteenth — know how to do a complete self-assessment. A successful trader needs to know the answer to these questions: How does my personality type impact trading? What is the most important attitude that I must have as a trader and how can I assess if I have it? What are my beliefs and values and how can I assess them? How do I begin to assess my key issues so that I know what could happen that might really interfere with my trading?

Fifteenth — commitment to do what it takes. There are many things you can do on a regular basis to really improve yourself. And if you have the commitment to really doing them, you’ll be unstoppable.

Sixteenth — how to develop a top down approach to discipline. Few traders have the kind of discipline needed for successful trading, but if you combine top-down discipline with regular self-work, you’ll be amazed at the difference in your trading.

Seventeenth — put what you know into action. Learning and studying are very important factors in any endeavor, however the only true way to be successful as a trader is to take action. Getting in there and learning from your experiences.

Dollar Hovers Near Lows ahead of Retail Sales

2007-07-14T10:37:00.001-07:00

Dollar is generally in consolidation mode near to recent lows ahead of today's retail sales data from US. Apparently, market hesitates to push the greenback through some key near term support levels against Sterling and Swissy this week. Even though EUR/USD edged to new record high, the medium term resistance of 1.3822 is playing some effect in capping the pair's rally. Growth in headline sales is expected fall back to 0.1% Jun after a strong rise of 1.4% in May. Growth in ex-auto sales is also expected to slow from 1.3% to 0.2%. However, with a lot of details in the report, there are a lot of uncertainty on how markets will react, in particular if the actual data comes in not far off expectation. Also, considering Friday's profit taking effect, we could still see the some dollar rebound even if retail sales disappoints today.

Other data from US include import prices which is expected to slow from 0.9% to 0.7% in Jun, business inventories which is expected to slow from 0.4% to 0.3% in May and University of Michigan consumer sentiment which is expected to rise slightly from 85.3 to 86.0 in Jun.

The Japanese yen remains generally weak today as global stocks soars. Meanwhile, Kiwi rebounded sharply overnight after much stronger than expected retail sales growth of 1.2% which enforces speculations that RBNZ is not done with the current tightening cycle. But after all, the rally in Kiwi is still limited by last week's high of 0.7879.

FX Mastery Trading Seminar 2007

2007-07-01T14:18:00.000-07:00

I just came back from Petaling Jaya for 2 Days FX Mastery Trading Seminar by Dar Wong at PJ Hilton.

Kuasa Forex Seminar Gempur 2007

2007-06-27T00:21:00.000-07:00

I attend the Forex Seminar at Berjaya Times Level 14 for Forex Trading Seminar by Mohd Nazri Yacob.

Rahsia Orang-orang Terkaya Di Malaysia Terbongkar

2007-06-07T08:25:00.000-07:00

Rahsia Forex adalah buku sensasi dari Fadzley,Jutawan Muda Melayu yang bakal merubah kehidupan anda sekarang.Fadzley akan membongkar rahsia menjana pendapatan yang lumayanyang selama ini digunakan oleh institusi-institusi kewangan dan orang-orang terkaya di Malaysia.

http://www.rahsiaforex.com/affiliate/?i=trader8 /

Berikut adalah pengakuan salah seorang pelajar, Desmond Landing dari Lahad Datu, Sabah, yang telah mengaplikasikan teknik dan strategi yang Fadzley gunakan untuk menjana beribu-ribu setiap saat.
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"Hai Fadzley,
Saya ingin ucap terima kasih banyak-banyak sama kamu. Didikan kamu sangat berkesan serta sangat mudah di ikuti.
Selepas mempelajari dan mempraktiskan teknik rahsia kamu ini, saya telah berjaya mendapat RM3,000 hasil usaha saya dalam masa 5 hari...
Wah, bagaikan mimpi saya ketika itu. Sehingga kini pun saya masih rasa bagaikan bermimpi. Saya tahu teknik kamu bagus dan boleh mendatangkan untung pada saya, tapi saya tidak sangka sehingga begini BANYAK dalam masa yang begitu SINGKAT pula.
Jika saya tahu, sudah pasti saya melabur lebih banyak lagi dan menjadi kaya raya seperti kamu. Kamu adalah idola saya sekarang kerana kamu telah membuka mata saya kepada potensi wang yang bakal saya peroleh.
Terima kasih.
- Desmond Landing Lahad Datu, Sabah"
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Anda juga boleh mendapat hasil yang sama seperti Desmond dengan mengaplikasikanteknik dan strategi yang terdapat di dalam Rahsia Forex.
Baca pengakuan dari mereka-mereka yang telah mencubanyadan beroleh keuntungan lumayan daripada buku ini.

http://www.rahsiaforex.com/affiliate/?i=trader8

Selamat berjaya.

EUR/USD's

2007-06-06T07:24:00.001-07:00

EUR/USD's rise from 1.3391 stalls after breaking short term falling trend line (now at 1.3523) briefly. Nevertheless, intraday bias will remain on the upside as long as 1.3487 holds. Since the corrective fall from 1.3681 is regarded as completed with three waves down to 1.3391 with bullish convergence condition in 4 hours MACD and RSI, further rally is expected to follow to towards 1.3609 resistance. Break will encourage a retest of 1.3681 high.

On the downside, touching of 1.3487 will turn intraday outlook consolidative first. In case of pull back, sustained trading below 1.3364 cluster support is needed to confirm underlying bearishness. Otherwise, the corrective fall from 1.3681 is still considered either ended or to be ended soon. That is, another strong rebound is likely to follow.

In the bigger picture, with 1.3364 cluster support (38.2% retracement of 1.2865 to 1.3681 at 1.3369) remains intact, the rise from 1.2865 is still expected to resume to above 1.3681. However, risk of medium term reversal is still high. As discussed before, medium term up trend from 1.1639 is interpreted as having first move completed with three waves up to 1.2978, subsequent sideway consolidation completed at 1.2483. Rise from 1.2483 is treated as resumption of the whole up trend from 1.1639. With such interpretation, we'd expect risk of medium term reversal to increase significantly after EUR/USD met resistance zone between 1.3668 and 100% projection of 1.1639 to 1.2978 from 1.2483 at 1.3822. Hence, focus is now on reversal signals.

On the downside, decisive break of 1.3364 cluster support (38.2% retracement of 1.2865 to 1.3681 at 1.3369) is needed to confirm a medium term top is made. More importantly, with bearish divergence condition in daily MACD and RSI, this will warn that the whole rally from 1.2483 has also completed, and, so is the whole up trend from 1.1639. Focus will then be back to medium term rising channel support (now at 1.3049).

Daily Pivots: (S1) 1.3489; (P) 1.3520; (R1) 1.3555

Dollar Sent Lower by Bernanke but Drawing Support from ISMDollar's

2007-06-05T12:56:00.000-07:00

sell off resumes in early US session after comments from Bernanke which said that housing market's drag on the economy could persist somewhat longer than expected even though the slump has not spilled over into other parts of the economy yet. He said in his speech "The Housing Market and Subprime Lending" in the International Monetary Conference in South Africa via satellite that tighter standard is now required by investors and creditors will no doubt restrain housing demand in the subprime market and some near-prime borrowers may also be shut out. Regarding inflation, though, Bernanke still believes that risk is to the upside and economy will grow at near trend rate.

Dollar additionally pressured by speculation that the United Arab Emirates may be the next Middle Eastern country to end the dollar peg. Syria and Kuwait had recent announced that they would dump the dollar peg to curb rising import costs and inflation that was pushed up by rising costs of imports from Asia and Europe. However, much stronger than expected ISM non-manufacturing index, which rose to 59.7 in May versus expectation of 55.3, is providing some support to the greenback.

Euro, on the other hand was supported by solid Services PMI in May and IMF's raising of its forecast for the growth in the Eurozone economy from 2.3% in 2007 to around 2.5%. IMF also expects that the expansion will "continue apace" next year. Though, Apr retail sales missed expectation by growing 0.2% mom, 1.6% yoy only.

The Aussie remains firm too and took out this year high of 0.8390, reaching as high as 0.8406 so far, highest since Aug 90. Though RBA is widely expected to keep rate unchanged at 6.25% in the coming Asian session, expectation is still firm on another rate hike, probably in near term. Also, Aussie continues to draw support from carry trade. Q1 GDP will also be closely watched in the coming Asia session too and is expected to grow 1.0% qoq, 2.9% yoy.

USD/CHF Daily Pivots: (S1) 1.2233; (P) 1.2255; (R1) 1.2275

2007-05-31T05:51:00.000-07:00

USD/CHF remains bounded in tight range today. Rebound from 1.2198 was limited at 1.2277 and lacks momentum to go further yet. As discussed before, it will take a break above 1.2306 resistance to confirm rebound from 1.1993 has resumed for 61.8% retracement of 1.2571 to 1.1993 at 1.2350. Otherwise, further retreat could still be seen towards 1.2124 cluster support (61.8% retracement of 1.1993 to 1.2331 at 1.2122).

In the bigger picture, previous break of 1.2282 cluster resistance (50% retracement of 1.2571 to 1.1993 at 1.2282) confirms that fall from 1.2571 has already completed at 1.1993 with bullish convergence condition in daily MACD and RSI. More importantly, this will increase the chance that USD/CHF is about to complete a medium term head and shoulder bottom formation (ls: 1.1919, h: 1.1878, rs: 1.1993). Sustained break of 61.8% retracement at 1.2350 and neckline resistance (1.2768 to 1.2571, now at 1.2347) will add more weight to this case. Stronger rally should then be seen to 1.2571 first and then 1.2768.

However, below 1.2124 cluster support (61.8% retracement of 1.1993 to 1.2331 at 1.2122) will indicate that rebound from 1.1993 has possible completed and save the case that recent choppy price actions could merely be part of a medium term triangle consolidation. And, down trend from 1.3283 should still resume after completing such consolidation in such case.

Malaysia Forex Trader

2006-12-24T11:37:00.000-08:00

Welcome to Forex Malaysia. I am a mini forex trader. i have bought a lot of forex trading course materials, spent over US$30,000 to buy these forex courses, eg: Forexmentor, Raghee Forex, MTI Forex, Chris Loris Advanced Forex Course, Andy X Forex, Tradingmarkets’s Abe Cofnas Forex, Ed Ponsi FxEducator, Clay Marafonte AIME Forex, investools Currency Trader… You Name It , I have It.