Archive for November 18th, 2009
GoLearnForex Analysis 18/11/2009
USD/JPY:
The Yen has lost ground to every other currency in the G-10 except the Dollar, since March of 2009. The BOJ has always favored a weak currency as it supports their large export business which accounts for over 20% of their GDP.
INSERT CHART a
The Chart above is a daily JPY chart looking back through this past March. Although the Yen trended down it was extremely volatile through August. After mid August it continued a less volatile trend towards a handle of 88.00 before retracing to 92.00. Since mid October it has been struggling to breach near term resistance at 88.00.
On the daily JPY chart below you can see we added Bollinger Bands (BB). BB are very good during range trading and very dangerous during trending markets. BB are best understood as a mean or avg as indicated by the yellow dotted line. The red lines represent a standard deviation from the mean. In short you expect price to be somewhere between the 2 red lines. When price nears one of the bands you expect it to return toward the mean, what traders call a reversal.
INSERT CHART b
Notice that from March through August the same period of time shown on Chart A above that price moves precisely the way we expect with BB. The green swing line shows price moving from one band to the next. However, towards the end of August price does not move towards the mean as the JPY has started to trend. This is why BB are difficult to use during trending markets as we do not expect price to move back towards the mean.
There are a number of tools available to you via your charting platforms that can help you isolate when to expect the BB reversal versus a false reversal signal. On the lower half of Chart b the Relative Strength Index (RSI) helps traders identify when a trend is strong and may continue. The red vertical line that runs through the false reversal signal also shows that the RSI indicates we are in the footholds of a strong trend. Typically an RSI descending after breaching 70 (over bought) or ascending after breaching 30 (oversold) indicate a weakening trend.
Currently the JPY is sitting on the lower band of the BB and the RSI reads low in terms of trend strength. Additionally, the Yen is bumping up against R1 and R2 is fairly close as well. For now it appears that the trend has slowed.
Analysis by http://www.golearnforex.net
Daily Review 18/11/2009
USD Dollar (USD)
The Dollar gained versus most majors as Industrial Production came out weaker, lowering risk appetite. Industrial Production came out 0.1% versus 0.4% expected. PPI came out weaker with 0.3% versus 0.6% forecast. TIC Long-Term Purchases came out better with 40.7B versus 27.3B expected. NASDAQ and Dow Jones rose slightly by 0.27% and 0.29%. Crude gained by 0.68% closing at 79.44$ a barrel and Gold (XAU) remained almost unchanged with 0.16% change closing at 1140.5$ an ounce. Today, Building Permits are expected higher with 0.59M versus 0.57M prior and Core CPI is expected with 0.1% versus 0.2% prior. Housing Starts are expected higher with 0.61M versus 0.59M and Crude Inventories are expected with 1.2M versus 1.8M prior.
EURO (EUR)
The Euro weakened versus the Dollar and the Pound as risk appetite weakened and ECB\’s president Trichet said a strong Dollar is important for the world economy. European Trade Balance came out better than expected with 6.8B versus -0.9B expected. EUR/USD traded with a low of 1.4806 and with a high of 1.4998. Today, European Current Account is expected with 0.6B versus -1.3B prior. ECB President Trichet will speak in Frankfurt.
EUR/USD – Last: 1.4870
|
Resistance |
1.4900 |
1.4925 |
1.4955 |
|
Support |
1.4810 |
1.4740 |
1.4703 |
British Pound (GBP)
The Pound remained almost unchanged versus the Dollar as CPI figures came out better than expected but Industrial Production in the U.S lowered investors Risk Appetite. CPI came out 1.5% versus 1.4% expected and RPI came out -0.8% versus -0.9% expected. Overall, GBP/USD traded with a low of 1.6755 and a high of 1.6872. Today, MPC Meeting Minutes will be released. CBI Industrial Order Expectations are expected with -47 versus -51 prior.
GBP/USD – Last: 1.6800
|
Resistance |
1.6850 |
1.6900 |
1.6955 |
|
Support |
1.6750 |
1.6670 |
1.6625 |
Japanese Yen (JPY)
The Yen gained versus the Euro and weakened versus the Dollar as risk appetite lowered after Industrial Production in the U.S came out weaker than expected. Overall, USD/JPY traded with a low of 88.73 and a high of 89.53 and EUR/JPY traded with a low of 132.44 and a high of 133.58. Today, All Industries Activity is expected with -0.1% versus 0.9% prior.
USD/JPY-Last: 89.17
|
Resistance |
89.65 |
90.00 |
90.18 |
|
Support |
88.80 |
88.60 |
88.25 |
Canadian dollar (CAD)
The Canadian Dollar dropped as Risk Appetite weakened following U.S production data. Overall, USD/CAD traded with a low of 1.0464 and a high of 1.0617. Today, Canadian CPI is expected with 0.2% versus 0% prior and Core CPI is expected with 0% versus 0.3% prior.
CAD/USD – Last: 1.0535
|
Resistance |
1.0620 |
1.0680 |
1.0735 |
|
Support |
1.0475 |
1.0450 |
1.0425 |
Research by http://www.ufxbank.com
Advantages and Disadvantages of Metatrader 4
There are numerous types of Forex robot programs and trading softwares used by the Forex traders to facilitate their Forex trading experience. The robots and softwares help the traders making effective and profitable trading decisions that can lead those gaining huge profits from the Forex market. The Metatrader 4 is one of the most effective Forex robots and it has gained critical reviews and positive feedbacks from many Forex traders. In this article, we will discuss about the advantages and disadvantages of Metatrader 4 so that you can get more knowledge about this program.
One of the principal and widely known advantages of Metatrader 4 is that it is capable of handling multiple currencies simultaneously. It can easily store several years of Forex market data and as a result, the Forex traders can do back testing on its servers. Another advantage of the program is that it requires user authentication. As a result, it cannot be misused by anyone except you. The program also has a 128-bit security program for ensuring its security properly.
The Metatrader 4 allows you to perform other applications of Forex trading and can also generate real time information and data. You can get charts that plot the trends and patterns in the Forex currency trading market by using this software. The robot also operates its functions just like the real human Forex brokers and hence make you feel comfortable while using this. The Metatrader DataFeed and Server are also programmed by using the C++ programming language and it can be availed in multiple languages as well.
However, in spite of having so many advantages, there are a few disadvantages of Metatrader 4 as well. One of the main disadvantages is that it is not as flexible as the other software programs available in the market. There are a few strict guidelines for the software and the guidelines are implemented by the user. Another disadvantage is that the Metatrader 4 software does not have the ability to react immediately to the changes that happen suddenly in the Forex market. As a result, it may cost you a time decay that is quite dangerous for you and is capable of even losing your money in the Forex market.
There are many Forex traders who believe that the Metatrader 4 software is usually end solutions and is far more different compared to the traditional strategies in investment. It may cause you to not be able to reach your goals and gain huge profits, as you have to set rules and guidelines for this program. The software is especially difficult for the novice Forex traders.
From the above discussion, it can be said that the Metatrader 4 is good software for the experienced Forex traders; however, the novice traders should stay away from it.
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