Forex Crunch 5 Reasons Why The Yen Intervention Will Hold

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• 5 Reasons Why The Yen Intervention Will Hold
• More Unemployed Brits – Pound Vulnerable
• EUR/USD Sep. 15- Slipping After the Goldman Move
• Forex Daily Outlook – September 15 2010
• Gold enjoys Goldman
• Barrier Options Now Available on StartOptions
• Greenback Plunges on Goldman – Breakout Update
• Euro Reality Check

5 Reasons Why The Yen Intervention Will Hold Posted: 15 Sep 2010 04:18 AM PDT The massive intervention by the BOJ to weaken the yen sent USD/JPY more than 200 pips higher. The move is far from over. The first intervention in 6 years comes after months of failed verbal intervention. Here are 5 reasons why this move will be powerful. There are significant differences between the failed interventions by the Swiss National Bank and this move: Long buildup: this move followed months of warnings and negotiations with other central banks. While this move is the sole work of the BOJ without joining forces, central banks and traders were anticipating this move and learn to accept it. Japan means business: they keep on pushing forward, all the time. It wasn’t a one time move. US figures support the move: The intervention comes after the influx of bad US figures ended. Recent numbers such as are better – Non-Farm Payrolls and retail sales have been hopeful. Better US figures mean a stronger USD/JPY. Europeans are OK with it: They would prefer a coordinated move but they do note the rapid equiproportional appreciation of the yen and said it was bad for the recovery. The Chinese factor: China recently passed Japan as the world’s No. 2 economy. China enjoys a low-valued currency which it fully controls. The US has urged China to release the yuan but the moves have been subtle to say the least. In the meantime, Japan’s yen strengthened and weakened Japan’s economy. A weaker yen could indirectly be a political interest of the US. So maybe the move wan’t coordinated with the US, but they might back it somehow. Want to see what other traders are doing in real accounts? Check out Currensee. It's free..

More Unemployed Brits – Pound Vulnerable Posted: 15 Sep 2010 02:05 AM PDT A rise in the number of unemployed people was reported at he fresh Claimant Count Change release. This disappointment makes GBP/USD more vulnerable than other currencies. Britain’s earliest report on the job market disappointed – instead of a decrease of 4300 unemployed people, Britain “gained” 2300 new ones. Also last month’s figure was revised to the downside. The unemployment rate remained at 7.8% as expected, but this is a rather “old’ figure – relates to July. This undermines the Pound: GBP/USD fell from 1.5520 to 1.5480 immediately after the release, and is now struggling around 1.55. Further levels below: 1.5350, 1.5230 and 1.5120. Above – 1.5720, 1.5833 and 1.60. The Pound had two chances of rising yesterday, but the gains were limited – CPI came out stronger than expected, at 3.1% and didn’t slip back to the 1-3% government target. While this theoretically raises the chances of a rate hike, Britain’s vulnerable position will probably deter policymakers from acting. The Pound’s gains were limited. Later yesterday, a bigger event rocked the markets – Goldman Sachs reiterated its prediction that the Federal Reserve will have to print one more trillion dollars in order to boost the economy. EUR/USD rose above 1.30, AUD/USD reached a two year high, th Swiss Franc became stronger than the dollar, and other currencies rocked as well. The British Pound also gained, but the gains were limited. Later today, Mervyn King will speak at the Trades Union Congress, in Manchester. The governor of the BoE usually brings the Pound down by expressing concern about the economy and/or dismissing inflation. With these weak unemployment figures, the Pound is vulnerable to King’s words. Want to see what other traders are doing in real accounts? Check out Currensee. It's free..

EUR/USD Sep. 15- Slipping After the Goldman Move Posted: 15 Sep 2010 12:39 AM PDT EUR/USD shot up on Goldman’s speculation about more dollar printing. After conquering 1.30, it slipped back down. Today’s events can supply lots of action. Here is a quick update on fundamentals, technicals, and community trends. EUR/USD flirting with 1.30. Click to enlarge. EUR/USD Technicals Asian session:  EUR/USD slipped lower during Asian session. Current Range is between 1.2920 to 1.30. Further levels: Below,  1.2840, 1.2770, 1.2610, 1.2460, 1.2330 and 1.2150. Above   1.30, 1.3110, 1.3267 and 1.3430. EUR/USD is now between 50% and 61.8% Fibonacci retracement of the drop from 1.3334 to 1.2591. EUR/USD Fundamentals All times are GMT. Most important events emphasized. 9:00 CPI. Exp. +1.6%. 9:00 Core CPI. Exp. +0.9%. 12:30 US Empire State Manufacturing Index. Exp. +8.7. 12:30 US Import Prices. Exp. +0.2%. 13:15 US Industrial Production. Exp. +0.3%. 13:15 US Capacity Utilization Rate. Exp. 75.1%. EUR/USD Sentiment Basel II banking accord still positively impacts the Euro. On the other hand, the debt issues never went away, and they are weighing on the common currency. Market is drifting between “risk on” and “risk off” with a tendency to “risk on”. With “risk off”, good US figures boost the dollar and bad ones hurt it. When risk is on, bad US figures boost the dollar. In recent days, we’ve seen more normal behavior. Japanese massive intervention to weaken the yen may indirectly shake EUR/USD – weakening it. 1.2660 is a stronghold on the downside, 1.3110 on the upside. Currensee Community: 53% are Short, 47% are long, down from 56:44 yesterday. Are the tables turning in favor of the Euro? These are 998 open positions in real accounts trading this pair at the moment. Want to see what other traders are doing in real accounts? Check out Currensee. It's free..

Forex Daily Outlook – September 15 2010 Posted: 14 Sep 2010 03:00 PM PDT Very interesting and hectic day anticipated us today: Empire State Manufacturing Index, Survey in the US, (BOC) Deputy Governor Timothy Lane speaks in Canada, BOE) Governor Mervyn King speaks in the UK, Official Cash Rate in New Zealand and much more. Let’s see what awaits us today In the US Industrial Production, the main gauge of industrial activity measuring the output of factories, mines and utilities. Manufacturing activity, which has been a leader of the US economic recovery, is forecasted to show a smaller rise in industrial output by 0.2%, compared with the 1.0% increase in the previous month. Later in the US, Empire State Manufacturing Index, Survey of about 200 manufacturers in New York State which asks respondents to rate the relative level of general business conditions.  Is forecasted to show a rise of 1.6 points from the previous month and it’s indicates improving conditions. More in the US, Import Prices, monthly earliest government-released inflation data that measures the change in the price of imported goods and services purchased domestically, 0.2% similar to last month and It contributes to inflation for businesses and consumers, especially those who rely heavily on imported goods and services. Also in the US, Capacity Utilization Rate, a monthly leading indicator of consumer inflation – when producers are nearing full capacity they respond by raising prices, and the higher costs are usually passed on to the consumer forecasted to rise by 0.3%. Finally in the US, Crude Oil Inventories, US indicator that affects the loonie due to Canada’s sizable energy sector, and measures the change in crude oil barrels number held in inventory by commercial firms during the past week. Forecast a reduction by 0.7% and influences the price of petroleum products which affects inflation. In Canada, Bank of Canada (BOC) Deputy Governor Timothy Lane, deliver a speech titled “Promoting Canada’s Economic and Financial Well-Being in an Uncertain World” at the Board of Trade, in St. John’s. Can often be used to drop subtle clues regarding future monetary policy. Finally in Canada, Manufacturing Sales, measures the change in the sales made by manufacturers total value has stabilized on 0.1%. It’s a leading indicator of economic health – manufacturers are quickly affected by market conditions, and changes in their sales can be an early signal of future activity such as spending, hiring, and investment. For more on USD/CAD, read the Canadian dollar forecast. In Europe Consumer Price Index (CPI), the main measure of inflation in the Euro-zone and the European Union's equivalent to the CPI- Consumer Price Index.  Inflationary pressures in the Euro-zone are expected to remain subdued at 1.6% August, down from 1.7% in July. And the Core CPI is forecasted to rise by 0.8%. For more on the Euro, read the EUR/USD forecast and Casey Stubbs' latest analysis. In Great Britain, Bank of England (BOE) Governor Mervyn King speaks at the Trades Union Congress, in Manchester and can influents on the subtle clues regarding future monetary policy. Finally in Great Britain, Claimant Count Change is forecasted to show a rise by 0.3K and the number of unemployed people is an important signal of overall economic health Read more about the Pound in the GBP/USD forecast. In Australia, Westpac Consumer Sentiment, Monthly Survey of about 1,200 consumers which asks respondents to rate the relative level of past and future economic conditions, employment, and climate for major purchases has drooped down by 5.7%. For more on the Aussie, read the AUD/USD forecast. In New Zealand, Official Cash Rate, Interest rate at which banks lend balances held at the RBNZ to other banks, and Due to the uncertain outlook and the threat of a global economic slowdown, the Reserve Bank of New Zealand could decide that it would be prudent to keep the current 3.0% benchmark interest rate level unchanged at this meeting, while still leaving the door open to further rate hikes in the months ahead.  More in New Zealand, Reserve Bank of New Zealand (RBNZ) Press Conference & Rate Statement which are among the primary tools of RBNZ to communicate with investors about monetary policy and covers in detail the factors that affected the most recent interest rate decision. In Japan, Tertiary Industry Activity, a leading indicator of economic health that measures the change in the total value of services purchased by businesses, and it is forecasted to rise by 0.8%. That’s it for today. Happy forex trading! Want to see what other traders are doing in real accounts? Check out Currensee. It's free.

Gold enjoys Goldman Posted: 14 Sep 2010 02:38 PM PDT Not only foreign currencies enjoyed Goldman Sachs’ speculation about the new trillion dollar printing scheme – also precious metals, rallied. Gold reached new uncharted levels and also silver advanced forward. When there’s talk about printing more dollars to stimulate the economy, the dollar weakens as too many dollars make the currency worth less. But for some people, other paper currencies aren’t enough and there are more real “safe haven” assets: Gold and silver had monetary value in ancient times, and times of trouble, they rise. The price of gold crossed the $1265 peak reached in mid-June and peaked at $1274.47 before easing just under $1270. Silver gaining traction Naturally, the focus is on gold, but also the price of silver is advancing. After flirting with the psychological $20 number in the past week, today’s news completed the break higher and it peaked at almost $20.50. It now trades at $20.43. Silver still isn’t at an all-time high. The highest level was recorded on March 17th 2008 – $21.34. This level, now less than a dollar away, is the key level to watch. A break above this figure will open the road to more significant gains. In times of trouble, “paper gold” or “paper silver” aren’t enough for worried people – they prefer real gold. 4 months ago, I reported about the launch of Gold ATMs – automatic vending machines that sell physical gold. A look through the German company’s website doesn’t show any progress since then. But maybe now they have a chance of extending their business. The speculation of a one trillion quantitative easing scheme by the Federal Reserve in November might be addressed at the upcoming FOMC meeting next week. We’ll see if the economy is indeed doing so bad. According the recent Non-Farm Payrolls, there is hope. The notion of the moment is that the dollar is worth less – against other currencies and against solid gold and silver. This notion won’t necessarily continue. Want to see what other traders are doing in real accounts? Check out Currensee. It's free..

Barrier Options Now Available on StartOptions Posted: 14 Sep 2010 09:45 AM PDT Together with the evolution of forex trading, also binary options are evolving – StartOptions is now offering Barrier Options. These hourly options have a 300% return rate when the option expires “in the money” – if the barrier level has been reached at expiry. This new product came after many traders on the platform requested more products – more options for binary options if you wish. These options are available for professional traders: The latest 300% Barrier Options are now offered on Gold futures and soon will be available on a variety of stocks, commodities and currencies on the StartOptions. For example, a trader spotting volatility on Gold futures can place a trade of a Call Barrier Option anytime during the hour at the current price of Gold, $1270, with a Barrier Price of $1272. If Gold futures expires at the end of the hour above $1272, the return is 300%. Put Barrier Options allow traders to trade barriers below the current price. Barrier Options are available for professional traders trading $250, $500 or $1000 stakes on the StartOptions platform. The 300% return rate is significantly higher than standard binary options that have a return rate of 67-75%. Different products suit different types of traders. Go ahead and give barrier options a try, or explore regular binary options, which can be a great alternative to the standard stop loss in forex trading. Click here to get started. I’m happy to see binary options evolve. Full Disclosure: I’m affiliated with StartOptions.

Greenback Plunges on Goldman – Breakout Update Posted: 14 Sep 2010 08:26 AM PDT Goldman Sachs sent the dollar down by assessing that the Federal Reserve will need a dollar printing scheme of another 1 trillion dollars. Yes, one trillion. Quick update on these news and on currency reactions. Quite a few breakouts were seen. Some enjoy this move more than others. Given the state of the economy, Goldman Sachs sees another dollar printing scheme – one trillion: "We don't expect this at the Sept. 21 meeting, but in November or December there's certainly a possibility that it will be announced," Jan Hatzius, chief economist at the bank, said Tuesday. He added the Fed is likely to buy U.S. Treasurys worth around $1.0 trillion to kick-start the economy. This comes as the economy is weak and more stimulus is necessary. Reactions: EUR/USD broke above 1.2930 and bounced back at the barrier of 1.30. GBP/USD broke above 1.5470 and bounced at 1.5520. USD/JPY fell below 83 – another fresh 15 year low. USD/CHF settled well below parity, currently at 0.9956. USD/CAD settled under 1.280 and bounced at 1.02. AUD/USD broke above 0.9366 and above the 2009 high of 0.9405. It now trades at 0.9420 – highest level in two years. NZD/USD broke above 0.7350 and aims for the next resistance line at 0.7440. The Aussie is definitely the big winner of this event. The Pound’s move is the most limited one. Like this story? Vote for it on Forex Factory! What do you think? Will these breakouts hold? Will the Federal Reserve indeed print one more trillion dollars? Or is this just a one-time event? Want to see what other traders are doing in real accounts? Check out Currensee. It's free..

Euro Reality Check Posted: 14 Sep 2010 06:51 AM PDT The highly regarded ZEW Economic Sentiment survey showed pessimism in Europe’s locomotive. This stopped the Euro’s rally and reminded everybody that the European issues are far from over. EUR/USD now trades at the bottom of the current range, failing to top an important resistance line. That’s what happens when pessimism takes over: The German ZEW Economic Sentiment score minus 4.3 points – the lowest in 19 months. Not only did this result fall short of expectations (+10.7), not only did fall from last month’s number (+14), but the negative number has an important meaning – pessimism. This is the fourth consecutive fall and also the fourth consecutive time that the result is weaker than expected. Also the all-European number, which is less important, disappointed at +4.4 points. At least it remained in positive territory. EUR/USD loses hot air Earlier this week, the Euro enjoyed the Basel III accord regarding the stability of banking. It also enjoyed strong news from steaming hot China. The optimistic mood pushed the pair above the 1.2770 line, and quickly above the 1.2840 line. The pair made a push towards the 1.2930 line and already reached 1.2910 before the release. But after the release, the pair dropped to 1.2840, which provided supported, before recovering. A break above 1.2930 will lead to resistance at 1.30, 1.3110 and 1.3267. A break below 1.2840 will open the road to 1.2770, 1.2665 and 1.2610. Also last week, a reminder of the European debt crisis sent the pair down. Similarly now, economic indicators provide the reality check. Want to see what other traders are doing in real accounts? Check out Currensee. It's free..

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