USD - USD Moves Up against Rivals
After ending last week slightly higher versus most of its currency counterparts, the USD began this week's trading with a continuation of its recent uptrend, appreciating against every currency rival except the JPY. Dropping below the 1.3000 level against the EUR this morning, and near 1.4700 against the Pound, the Dollar's strength appears to be on schedule for further upward movement against these majors.
The only pair to beat out the USD this morning has been the Japanese Yen, considering many traders are beginning to hedge their bets on the value of the Dollar as the number one safe-haven investment. This may come as a result of the perception that the Dollar may see weakness in the future as investors pull out of the forex market and back into the stock market due to increased risk appetite and uncertainty in various equity markets. As the future decisions of the European Central Bank (ECB) appear to be foggy, traders are not expecting much correction to take place in the EUR/USD's recent downward movement and are instead going short on the EUR where possible.
Last week, traders saw a flurry of economic news affecting the American economy and practically zero news emanating from Europe. This week appears to be the exact opposite. A blizzard of economic events is expected from the Euro-Zone and very little is scheduled to be released from the United States. Forex traders should definitely pay closer attention to the EUR and GBP markets this week as they will be in the driver's seat of the market for the days ahead.
EUR - EUR's Movement Negative, but Busy News Week May Prove Fruitful
The EUR apparently can't catch a break these days. With a steady depreciation against the majors, the EUR looks like last week's loser, and may continue to hold that title throughout this week as well. Dropping below important price barriers against the USD and JPY, but holding steady against the GBP, the EUR's value may be due to recent analysis of the European Central Bank (ECB) than anything else.
Delivering a speech in which uncertainty seemed to be the major headline, ECB President Jean-Claude Trichet apparently only made matters worse for the 16-nation currency. This indecisiveness no doubt comes from the fundamental differences in solutions perceived to be necessary for the economic conditions of the diverse countries which make up the European Monetary Union (EMU). With a multitude of ethnic, linguistic, and cultural backgrounds, each member country brings with it a unique perspective on this recent crisis as well as a different interpretation on what is required to fix this downturn for the interests of each individual country. Disunity reigns supreme in Europe, and the U.S. and Japanese currencies are the beneficiaries.
On the upside for the EUR this week is the slew of data emanating from the Euro-Zone regional economy. With an abnormally busy news week, the Euro-Zone may, for the first time in months, outshine the Dollar and take control of the forex market this week. Traders will absolutely want to tune in to the economic indicators emanating from Europe and the U.K. throughout the week. Most importantly are the two confidence reports, the ZEW Sentiment and German Ifo Business Climate reports, due out Wednesday and Friday respectively.
JPY - Gains on Wall Street and an Indecisive ECB Leads JPY Higher
The Japanese Yen appears to be on the receiving end of large buying session as traders pounce into the Asian currency to hedge against less certain investments like the EUR, GBP and even the U.S. Dollar. Dropping below key support levels against the EUR and GBP, the JPY appears to be on a fresh bullish run which could have much more room to grow if markets continue like they have the past few days.
Slicing through the 145.80 price level against the Pound, and below 129.00 against the EUR, the Yen's recent strength may have much to do with the recent uncertainty in monetary policy decisions within the European Central Bank (ECB) and the rising uptrend in the U.S. stock markets. As usual, this week will not be seeing much economic news coming from the island economy, but with so much attention focused on Wall Street and a stale-mated ECB lately, Japan may not need to take the reins to steer its own market to new heights. Traders should be keeping an eye on the European markets this week as its news will no doubt be the guiding force behind this week's market.
OIL - Global Demand for Oil May Continue Falling; Will its Price Follow?
After last Friday's jump in oil prices, the cost of buying a barrel of Light Sweet Crude has apparently begun to fall after reports showed that the U.S. economy is still forecasting a contraction. With the world's top oil consumer declaring that it's demand for Crude Oil is going to continue falling, and with current production levels being estimated as too high to support prices, traders may be seeing the start of a new downward trend in the price of Crude Oil this week.
Starting last Friday between $51 and $52 per barrel, the price of Crude Oil subsequently jumped to as high as $53 by mid-day. However, during today's early trading hours, the price of Crude Oil has apparently begun to decline and is currently trading at $51.50. With a few analysts claiming that oil remains slightly over-valued, we could see a sell-off in black gold through late-afternoon today.
Article Source - Europe Takes the Wheel of the Forex Market this Week
What is Forex?
The foreign exchange market (Currency, Forex, or FX) is where currency trading takes place. It is where banks and other official institutions facilitate the buying and selling of foreign currencies. Forex transactions typically involve one party purchasing a quantity of one currency in exchange for paying a quantity of another. The foreign exchange market that we see today started evolving during the 1970s when world over countries gradually switched to floating exchange rate from their erstwhile exchange rate regime, which remained fixed as per the Bretton Woods system till 1971.
Today, the Forex market is one of the largest and most liquid financial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other institutions. The average daily volume in the global foreign exchange and related markets is continuously growing. Traditional daily turnover was reported to be over US$3.2 trillion in April 2007 by the Bank for International Settlements. Since then, the market has continued to grow. According to Euromoney's annual Forex Poll, volumes grew a further 41% between 2007 and 2008.
Forex used to be a closed market because only the “big boys” because you needed between 10 and 50 million $ to open an account. But today, with the development of internet, online Forex brokers have the possibility to offer their services to “little” traders. All you need to start is a computer, fast internet connection and information which you can find on this page also.
This enormous market is like the dangerous sea where you can meet lots of sharks and dangerous waters but at the same time it is the only one where two weeks of trading can hypothetically bring you $1,000,000 out of $1,000 of initial investment.
This is certainly hypothetically because a lot of newbie traders deal with their trades as gambling, that surely bring them to having nothing in the end. You should always keep the phrase "be careful!" in your mind. This market would give you its profit possibilities only if you learn the basic things hard and make lots of demo trading.
The statistics is that as much as 95% of traders come to losing their money at Forex, 5% have profit and less than 1% of traders make large fortune at Forex. You shouldn't produce, sell or advertise anything trading at Forex. Your assets are your knowledge, experience and a small amount of cash.
This market is a platform for banks, transnational corporations and individual traders to change the currencies they possess into other ones. This is the spot Forex market. At this market you can trade with up to 1:400 leverage which means that you'll get $400 on your account for each dollar invested. So, you can trade with the $400,000 sum having invested $1,000 onto your account.
Why to trade on Forex?
1. There is no commission fee for trading at Forex.
2. There is no intermediary, you can trade directly at Forex.
3. Forex is open 24-hours a day.
4. Nobody can influence the market for a longer period.
5. High liquidity.
6. Free demo accounts, analysis and charts.
7. Small accounts that allow everyone to try out his luck.
Hope this has answered a lot of questions you were asking yourself about Forex and that you can now start trading. Also make sure that you check out other articles on this blog which can help you earn your fortune.
Good luck to everyone!