Archive for November, 2009
GoLearn Forex Analysis 30/11/2009
Moving Averages Are Not So Average by GoLearn Forex
Moving Averages – they are not so average
EUR/USD and USD/CHF
On Thursday of last week we saw the EUR and CHF finally break near term resistance. The EUR cleanly sliced through 1.50 and took out near term resistance around the 1.5055 handle. The CHF finally broke parity with the Dollar after struggling for weeks.
The very next day the Dollar was saved by the news coming out of Dubai. Risk aversion was on as traders unwound short Dollar positions to cover themselves. We discuss Moving Averages a fair amount especially since the 50 SMA has acted as support for such an extended period of time and for a number of currencies such as the EUR and CHF.
The CHF touched .9918 on Wednesday only to give back its gains on Thursday. In the Chart below notice the CHF low on Friday as fear penetrated the market place. As a sense of calm returned the CHF was again bouncing off the 50 SMA, as support held again.
INSERT CHART CHF
The EUR easily breached resistance last Wednesday when the DXY hit new lows for the year. As you can see on the Chart below it closed just below the Fibonacci Retrace level of 76.4%. The very next day the EUR gave back all its gains as the market was reeling from the news of the day.
As details emerged and fear stirred recent wounds in the market the EUR plummeted again. Notice the level the EUR hit before retracing its losses on Friday. The 50 SMA again held support for the EUR.
INSERT CHART EUR
The moral here: Do not discount these as just “average” lines. Even if you question the indicative validity of a moving average the very fact that institutional traders monitor these levels makes them exceptionally important if for no other reason.
Mixed Day for Global Equity Markets After Dubai’s Announcement by GoLearn Forex
It was a mixed day for the Global Equity Markets on Friday following Dubai’s debt default announcement the day before. The markets in Asia continued to sell off while in Europe they apparently felt the exposure was sufficiently contained. In the U.S on Friday after returning from Holiday the day prior, it was the DJIA’s turn to take some risk off the table as it closed lower by 154.48 points to 10,309.92 Opening session futures are pointing positive in premarket hours.
The United Arab Emirates (UAE) Central Bank issued a statement indicating they would offer financing to the local and foreign banks at 50bp over the 3month local benchmark rate. This facility offered by the U.A.E C.B will ensure liquidity and restore some confidence in the market.
On the economic data docket for Monday we have a number items set to print out of the U.K. However, forex traders will be analyzing Black Friday sales numbers as well as the ensuing weekend figures. Currently, net sales figures look to be on par with last year. Additionally for Monday, Euro-zone CPI will hit the wire as will Canadian GDP.
Upcoming Forex Events for November 30, 2009
EUR CPI (YoY) Forecast 0.40% Previous -0.10%
CAD GDP (MoM) Forecast 0.40% Previous -0.10%
USD Chicago PMI Forecast 53.00 Previous 54.20
AUD Interest Rate Decision Forecast 3.75% Previous 3.50%
Daily Review 30/11/2009
USD Dollar (USD)
The Dollar lowered versus most majors on Friday as Dubai debt concerns were reduced due to UAE’s pledge to back foreign and domestic banks in Dubai. NASDAQ and Dow Jones dropped by -1.73% and -1.48% after being closed on Thursday due to Thanksgiving. Crude fell by -2.45% closing at 76.05$ a barrel and Gold (XAU) fell for the first time in 9 days with -1.08% change closing at 1174.2$ an ounce. Today, Chicago PMI is expected weaker with 53.1 versus 54.2 prior.
EURO (EUR)
The Euro gained slightly versus the Dollar on Friday’s session as liquidity was lower and stocks declined as a result of Dubai’s financial crisis. The Euro paired its losses as rumors of the UAE backing Dubai’s bank leaked to the market. EUR/USD traded with a low of 1.4828 and with a high of 1.50. Today, CPI Flash Estimate is expected with 0.5% versus -0.1% prior.
EUR/USD – Last: 1.5025
|
Resistance |
1.5055 |
1.5100 |
|
|
Support |
1.4950 |
1.4870 |
1.4825 |
British Pound (GBP)
The Pound gained versus the Dollar after UAE’s pledge to back Dubai raised risk appetite again lifting the Pound from its monthly lows. Overall, GBP/USD traded with a low of 1.6271 and a high of 1.6510. Today, Net Lending to Individuals is expected with 0.8B versus 0.6B prior, stronger result will lead to less need to expend Britain’s QE program. Mortgage Approvals are expected stronger with 59K versus 56K prior.
GBP/USD – Last: 1.6540
|
Resistance |
1.6590 |
1.6650 |
|
|
Support |
1.6450 |
1.6375 |
1.6325 |
Japanese Yen (JPY)
The Yen weakened versus the Dollar as uncertainty about the Dubai crisis lowered following UAE’s announcement. Investors shifted back from the safety of the Yen to higher yielding currencies. Overall, USD/JPY traded with a low of 85.08 and a high of 87.01 and EUR/JPY traded with a low of 127.38 and a high of 130.14. No economic data expected today.
USD/JPY-Last: 86.80
|
Resistance |
87.05 |
87.50 |
88.00 |
|
Support |
86.30 |
85.75 |
85.25 |
Canadian dollar (CAD)
The Canadian Dollar remained unchanged versus the Dollar as commodities prices dropped but Dubai’s financial crisis uncertainty lowered. Current Account came out weaker than expected with -13.1B versus -12.9B forecast and -11.9B prior. Overall, USD/CAD traded with a low of 1.0585 and a high of 1.0748. Today, GDP is expected stronger with 0.4% versus -0.1% prior. RMPI is expected stronger with 3.1% versus -1.1% prior.
CAD/USD – Last: 1.0585
|
Resistance |
1.0650 |
1.0700 |
1.0750 |
|
Support |
1.0570 |
1.0540 |
1.0505 |
Research by http://www.ufxbank.com
Overview on Metatrader 4
Many times Forex traders need to perform a time synchronization task if expert advisor is working. Time management plays an important role in Forex trading. Every Forex trader should learn time management and money management also. Prohibition for orders opening in definite time spans during 24 hours. Prohibition adjacent to the exertion of the expert advisor about holidays and cancellation of suspended orders after definite time may be needed. In Metatrader 4 time is read from server and relies on the broker configuration. Generally time on the broker server is his restricted time. Metatrader 4 has no means to determine or for the automatic adjustment of time zone.
There is probability at out disposal to know the server time as well as local time of the computer on which this Metatrader 4 is working. If we make use of such dimensions accordingly as hours, minutes and dates then we need to provide correspondence between time on server as well as local time. This task is owned by trader in the Forex trading, while the programmer determining the above restriction can offer only the means for configuration.
With esteem to zero meridian, time will have a shift of 12 to +12 hours that is within 24 hours. But two dates fall within this span. Now let us take an example. Expert advisor must work only throughout the session at NYSE. The opening time of NYSE is 9:30 AM and closing time is 4 PM. When the time will be converted into Greenvich Mean time then we will have GMT-5. We should configure the specialist consultant to work during this time. When we are located at the GMT-0 zone, then we should know our location with respect to zero meridians as well for right synchronization. For instance, out time zone is GMT+1. Therefore time difference males up six hours. As the reference point is time on the Metatrader 4 terminal’s side, then the comparative time shift should be six hours.
Now let us move onto precise figures as well as computations. On trader’s computer, local time is 2.00 PM. We can find the time by shifting the latest time six hours back in New York. We get 8 A.M. It is early for the expert advisors to operation as the stock exchange is not opened still. The exchange will open if the local time will be equivalent to 3.30 PM. When the expert advisor has the TimeShift configuration, then the traders task is only to know the difference between the location time as well as the even time for which the expert advisor must be configured. When the local time leads the needed event then the shift will have the sign “+”. And when the local time follows the event the shift will have the sign “_”.
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