Forex Crunch Comeback of European Debt Problems?

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• Comeback of European Debt Problems?
• EUR/USD Sep. 7 – Stabilizing after a collapse
• Forex Daily Outlook – September 7 2010
• The 5 Stages to Becoming a Profitable Trader

Comeback of European Debt Problems? Posted: 06 Sep 2010 11:55 PM PDT A fresh report shows that many big European banks were very “creative” when it came to estimating the size of the sovereign debt that they held. This already sent the Euro way down. Will this turn into an avalanche? Is the debt crisis returning through the front door? At the beginning of May, the financial world was rocked by sovereign debt issues in Europe. IT turned from a “Greek tragedy” into an all-European problem, as much bigger countries such as Spain were seen struggling to pay their debt and to finance old loans. The EU pledged 750 billion Euros as a safety net, and after the markets calmed down, major European banks were tested in “stress tests” to see how they will survive problematic debt. The results were outstanding, with only 7 banks out of 91 failing the tests – all small ones. The amount of problematic debt was quite low. Already then, there were doubts about the methods of these stress tests. It’s now clear that the tests were very very problematic. The WSJ reports that many banks were very creative with reporting their exposure to sovereign debt by Spain, Greece and Portugal. For example: BIS data from March 31 indicates that French banks were holding about €20 billion of Greek sovereign debt and €35 billion of Spanish sovereign debt. In the stress tests, four French banks, which represent nearly 80% of the assets in France’s banking system, reported holding a total of €11.6 billion of Greek government debt and €6.6 billion of Spanish debt. This is bad news for the Euro, that enjoyed a quiet summer on the European front and a problematic one in the US. EUR/USD enjoyed American problems. Is this changing? EUR/USD falls This report sent the Euro down. During the usually quiet Asian session, as American traders are still enjoying the end of Labor Day weekend, EUR/USD collapsed from 1.2880 to 1.2780, and the fall continues. The next minor line of support is at 1.2770, followed by a more significant support line at 1.2722. Lower, 1.2665 is a minor line and 1.2610 is stronghold. A recovery will send the pair towards 1.2840, followed by 1.2930. The debt issues were never fully solved. They were shelved. Germany, France and a handful of stronger European countries continued growing, while Spain, Portugal and Greece suffered from fresh austerity measures. But the German and French banks are still very vulnerable to sovereign debt. A default from one of these countries can create a domino effect that can send also the stronger countries down. Want to see what other traders are doing in real accounts? Check out Currensee. It's free..

EUR/USD Sep. 7 – Stabilizing after a collapse Posted: 06 Sep 2010 11:17 PM PDT EUR/USD collapsed on low volume, and will pick a new direction now that the holiday is over. Here is a quick update on technicals, fundamentals and community trends. EUR/USD within uptrend channels. Click to enlarge. EUR/USD Technicals Asian session:  Eventful session, with Euro/Dollar dropping sharply from 1.2880 to 1.2780, breaking both uptrend support lines. The reason – European banks hid the real valuation of sovereign debt in the stress tests. Their problems are apparently much bigger. Current Range is between 1.2770 to 1.2840. Further levels: Below,  1.2722, 1.2610, 1.2460 and 1.2330. Above   1.2930, 1.30, 1.3110 and 1.3267. Uptrend channel broken: EUR/USD trades in an uptrend channel. Uptrend support began from the lows it reached on August 24th through a low on August 25th. Uptrend resistance began on a swing high on August 24th and was formed on August 26th. After losing it, EUR/USD returned to this range, and even tested the top limit with a swing move to 1.2855 – exactly at uptrend resistance. Currently the pair is just below the uptrend supprt. Secondary channel broken: The uptrend resistance is the same as in the main channel, but the uptrend support is closer – began only in September. It was broken during the Asian session. EUR/USD Fundamentals All times are GMT. Most important events emphasized. 10:00: German Factory Orders. Exp. +0.6% points. EUR/USD Sentiment Market is drifting between “risk on” and “risk off” with a tendency to “risk off”. 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. The 1.2610 line is critical on the downside, 1.3110 on the upside. US and Canada return from the Labor Day weekend. Action already seen in the Asian session. No big events today, but there will be readjustments after the big drop. Currensee Community: 56% are Short, 44% are long. These are 1006 open positions in real accounts trading this pair at the moment. Note – This is a new and still experimental section on Forex Crunch. It’s still in development. Want to see what other traders are doing in real accounts? Check out Currensee. It's free..

Forex Daily Outlook – September 7 2010 Posted: 06 Sep 2010 02:00 PM PDT Australian rate decision is the major event on our calenday. Here Is an outlook on today’s market moving events. In Europe, German Factory Orders a leading indicator of production released monthly has registered 3.2% rise in June. A smaller rise of 0.6% is expected in July. For more on the Euro, read the EUR/USD forecast and Casey Stubbs' latest analysis. In Great Britain, Halifax HPI a leading indicator of the housing industry’s health experienced a promising 0.6% rise in July however a drop of 0.3% is expected in August. More in Great Britain, BRC Shop Price Index released monthly leads the government-released consumer inflation data by about 10 days increased by 1.5% in July. A similar rise is expected now. Read more about the Pound in the GBP/USD forecast. In Switzerland, Unemployment Rate released monthle measuring the percentage of the total work force that is unemployed and actively seeking employment during the previous month expected to rise by 3.7% following 3.8% in July. In Australia, The Reserve Bank of Australia will very likely leave the cash rate unchanged at 4.5% for a 4th month. Domestic developments have been the most enviable among advanced economies but policymakers will stay neutral regarding monetary policies. For more on the Aussie, read the AUD/USD forecast. In New Zealand, Manufacturing Sales released quarterly has increased by 0.9% in the previous quarter a similar rise is expected now. In Japan, Core Machinery Orders a leading indicator of production released monthly expected to rise 2.0% 0.4% more than in the previous month. More in Japan, Bank Lending measuring change in the total value of outstanding bank loans issued to consumers and businesses experienced its biggest fall in 5 years dropping 2.0% in May and June another drop of 1.8% occurred in July. A smaller drop is expected now. Leading Indicators released monthly released monthly and designed to predict the direction of the economy forecasted to reach 98.3% 0.7% less than in June. Finally in Japan, Current Account surplus released monthly is expected to rise by 0.02T compared with the previous month reaching 1.38T which is good for the currency and M2 Money Stock measuring change in the total quantity of domestic currency in circulation and deposited in banks is predicted 2.6% rise following 2.7% in July. 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.

The 5 Stages to Becoming a Profitable Trader Posted: 06 Sep 2010 06:19 AM PDT Guest post by Kris Matthews (http://tradeforexfundamentally.com) I feel that something equally important as the strategy that one uses to trade with is the psychology. Trading (especially forex) is not an easy thing to do and it can be disheartening when losses occur. I wanted to give you something to look forward to so you know what's required to become successful. The following video is inspired by an anonymous statement from a trader who outlined the 5 stages traders go through before becoming successful. I've made several mistakes during each stage, which you may be able to relate to, before making it through and my hope is that you honestly assess which stage you're in and decide what you need to do to get to the next one. I hope that this provides you some certainty and a pathway to make it as a successful, profitable, forex trader. With that, keep at it and remember to keep focusing on your goal and make the right decisions- then you'll hit your target. Want to see what other traders are doing in real accounts? Check out Currensee. It's free..

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