Best Thread FXCM/DailyFX Signals and Strategies

[Jason Rogers]

Gold, Silver Drop Most in Over 2 Months on Bernanke Stimulus Silence

Bernanke testimony in Congress makes no mention of further easing > Markets had been pricing in some sort of additional stimulus > Gold and silver plummet

Gold and silver posted their biggest intraday drops in over two-and-a-half months as Federal Reserve Chairman Ben Bernanke dampened expectations for further monetary stimulus and pushed the USD higher. As of 18:11 GMT, spot gold was down by 3.32 percent at $1,724.77 and spot silver was down 4.77 percent at $35.14. For both commodities, this was the steepest drop since December 14.

Gold

Silver

In his semi-annual testimony before Congress, Bernanke provided no hints as to additional measures that the Fed could undertake to stimulate economic activity in the United States. While maintaining that the situation remains “far from normal,” the Fed chairman noted improvements in terms of unemployment, which fell to a three-year low of 8.3 percent in January. Further adding to the case that the economic recovery is gaining momentum without need for additional stimulus, US GDP growth for the 4th quarter was revised up to a 3.0 percent annualized rate from 2.8 percent. At the same time, Bernanke added that the Fed’s pledge to keep interest rates low until late 2014 was “conditional” upon econnomic developments.

 

[Jason Rogers]

ADP Reports 216,000 Private Jobs Created in February; USD Trades Mixed

Written by Trang Nguyen of DailyFX

THE TAKEAWAY: U.S. Companies Added 216,000 Jobs in February> Job Creation in Private Sector Gathered Pace > U.S. Dollar Mixed

Job creation in the private sector gathered pace in February after slowing somewhat in the previous month, pointing to positive developments in the U.S. labor market in year 2012. The monthly ADP National Employment report issued today showed that U.S. companies added 216 thousand jobs last month, following a revised 173 thousand gain in January and 292 thousand increase in December. The print is slightly higher than expected as forty-four economists survey by Bloomberg News had predicted a gain of 215 thousand. This is also better than monthly employment average of 200 thousand in last five months. January’s reading was upwardly revised to a gain of 173 thousand from 170 thousand initially reported. As the ADP employment change is considered a precursor to the non-farm payrolls number, a favorable figure today raised hope that non-farm payrolls reading released this Friday might meet or beat expectations as well.

U.S. Monthly ADP Employment Change vs. Change in Nonfarm Payrolls: June 2010 to Present

Prepared by Trang Nguyen

Job growth was widespread in most of private firms in February, led by service-producing companies. Service producers generated 170 thousand jobs, following 149 jobs added in January and 225 jobs created in December. Employment in the construction industry grew by 16 thousand, marking the fifth consecutive gain in this sector. Meanwhile, employment in the financial services sector increased 14 thousand in the month, the largest monthly gain over the last two years. Employment in manufacturing accelerated in February, as did good-producing sector. Factories added 21 thousand jobs compared to 16 thousand in January while goods producers hired 46 thousand more employees in the month, nearly double the number added in December, 2011.

Regarding to size base, small firms registered the biggest increase of 108 thousand new hires in February compared with 93 new jobs in the preceding month. Likewise, medium firms reported 88 thousand new payrolls, well above 76 thousand added in January. Large firms created 20 thousand jobs in February after modestly adding 4 thousand jobs in the prior month.

 

[Jason Rogers]

NFP The Monthly Market Mover

A fitting article in light of tomorrow's US NFP release:

Written by Walker England of DailyFX Trading Instructor

The Non-Farm Payrolls is one of the most watched and highly anticipated reports on the US economic calendar. Non-Farm Payrolls will be abbreviated within as NFP and is released on a monthly basis to give a timely glimpse into employment inside of the United States. These numbers are released by the U.S Bureau of Labor Statistics to assist policy makers with decisions regarding monetary policy.

NFP looks specifically at net changes in employment as jobs are created or subtracted in an economy in any given month. The term Non-Farm is used since farm / agricultural workers are not included in the employment count. The decision to not include agricultural jobs lies in these jobs being largely seasonal that could possibly produce small temporary shifts in labor reporting. For this reason certain government employees, private household employees and nonprofit organization are also not included in the count.

As the most comprehensive employment number released in the United States, the results have been known to produce volatility in the Forex Market. The next NFP announcement is set to take place this Friday March 9th at 8:30 am New York time, and it makes sense as a trader to be prepared for unexpected volatility. Below we can see a 5minute chart of the EUR/USD. This snapshot is taken after the February 3rd NFP announcement. Last month it was released that 243,000 new jobs were added to the economy which was considerably more than the 150k predicted. This caused the EUR/USD spiked 40 pips and printed a daily high at 1.3204. Less than an hour later the EUR/USD had moved 139 pips lower to 1.3065.

With expectations of 210,000 new jobs being added to the economy this report; traders need to be ready if numbers do not come out in line with expectations. Traditionally there are many ways of trading the news including breakouts , news fades , and trading market dips . Trading NFP can be an exciting and often profitable pursuit for traders willing to enter into a volatile market. Regardless of the strategy taken, it is always important to keep an eye on risk / reward levels while minimizing the use of leverage in case volatility spikes against your trade.

 

[Jason Rogers]

USD Index Poised For Pullback Ahead of FOMC, AUD Eyes 200-Day SMA

Written by David Song of DailyFX.com

DJ FXCM Dollar Index

The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) is 0.17 percent higher on the day as market participants scaled back their appetite for risk, and the bullish sentiment underlining the greenback may gather pace over the near-term as the fundamental outlook for the world’s largest economy improves. Indeed, the more robust recovery limits the Fed’s scope to push through another large-scale asset purchase program, and we may see the central bank talk down speculation for additional monetary support as growth and inflation picks up. However, as the USDOLLAR comes up against the upper bounds of the ascending channel, the downward trend in the 30-minute relative strength index is likely to produce a short-term pullback in the index, and we may see a small correction before a larger move to the upside.

Although the FOMC is widely expected to maintain its current policy in March, the statement accompanying the rate decision may prop up the USD should Fed Chairman Ben Bernanke refrain from to commenting on QE3. Indeed, Mr. Bernanke may paint a positive outlook for the world’s largest economy in light of the more robust recovery in the labor market, and a less dovish statement could spur another run at the 78.6 percent Fibonacci retracement (10,118) as investors curb bets for additional monetary support. As growth and inflation picks up, the central bank may see scope to conclude its easing cycle in 2012, and the shift in the policy outlook instills a bullish outlook for the USD as the recovery gets on a more sustainable path.

Two of the four components weakened against the greenback, led by a 0.74 percent decline in the Australian dollar, and the high-yielding currency remains poised to face additional headwinds over the near-term as the slowdown in China – Australia’s largest trading partner – casts a weakened outlook for the $1T economy. Indeed, it seems as though policy makers in China will ease policy throughout 2012 in an effort to foster a ‘soft landing,’ and we may see the Reserve Bank of Australia follow suit as the central bank aims to combat the slowing recovery. According to Credit Suisse overnight index swaps, market participants see at least 50bp worth of rate cuts over the next 12-months, and the recent weakness in the aussie may gather pace over the near-term should interest rate expectations deteriorate further. As the AUDUSD carves out a top coming into March, we may see the pair come up against the 200-Day SMA (1.0410) to test for near-term support, but a break below the 23.6 percent Fib from the 2010 low to the 2011 high around 1.0350-60 could lead the pair to give back the advance from earlier this year.

 

[Jason Rogers]

What to Expect for FOMC This Afternoon

Written by Christopher Vecchio of DailyFX.com

What to Expect for FOMC This Afternoon

At his semi-annual testimony in front of Congress on February 29, Federal Reserve Chairman Ben Bernanke offered a cautiously optimistic on the direction of the American economy. However, it was what the chairman left absent from his testimony that proved to be market moving: Chairman Bernanke made no mention of a third round of quantitative easing. In recent weeks, Federal Reserve officials have made waves with their differing views on the effectiveness of quantitative easing, and now market sentiment is leaning towards no such stimulus being offered up. With that said, it became apparent last week that the Federal Open Market Committee is considering another “Operation Twist” like effort.

Whereas the U.S. Dollar strengthened after the chairman’s testimony on Capitol Hill lacking mentions of QE3, the world’s reserve currency depreciated immediately last week when it was leaked that the FOMC would consider another “Twist.” With the Fed Funds rate on hold indefinitely, market participants will look for rhetoric from the Fed about more easing. If the statement accompanying the rate decision shares the same tone that Chairman Bernanke’s testimony to Congress did, then the U.S. Dollar will likely find support. A weaker U.S. Dollar will only come if the FOMC takes a dovish stance accompanied by more promises of central bank intervention.

 

[Jason Rogers]

USDJPY Bull Trend Focus on 8550

Written by Jamie Saettele of DailyFX.com

USDJPY –The next objective is 8550 (interim resistance at 8400). Swing players can move the stop up to Tuesday’s low at 8195. Shorter term traders should keep risk to last night’s low at 8285. Short term support is 8310/30. A general tip; in strong uptrends, markets tend to make their lows at opens and highs at closes (at multiple degrees of trends…monthly, weekly, daily).

 

[Jason Rogers]

Why is USD/JPY so Strong?

Written by David Rodriguez of DailyFX.com

A dramatic surge in US bond yields has sent the US Dollar to fresh 11-month highs against the Japanese Yen, and a tectonic shift in forex market sentiment suggests the USDJPY rally is here to stay.

The US 10-year Treasury Yield has surged above its 200-day Moving Average for the first time since July, 2011, and the highly-correlated US Dollar/Japanese Yen has broken to similar peaks.

Chart of US 10-Year Treasury Yield

Data Source: Bloomberg​

If this is truly the break we have been waiting for in bond yields, we expect the USDJPY to follow in kind. The 10-year Treasury Yield has actually remained somewhat subdued and the yield Japanese Yen has nonetheless fallen sharply against the US Dollar. Today’s surge in both the USDJPY and the 10-Year rate suggests that there is yet another reason to watch for further Yen weakness/US Dollar strength. Such insight lines up well with a similarly significant shift in forex trader sentiment.

US Dollar/Japanese Yen versus US 10-Year Treasury Yield

Data Source: Bloomberg​

Our proprietary Speculative Sentiment Index (SSI) data has called for US Dollar losses against the Japanese Yen since it traded below ¥90, but a more recent shift says the opposite. The SSI measures retail forex trader sentiment as seen through FXCM Execution Desk data. Crowds have remained heavily net-long for nearly two years. As of today, crowds have moved net-short and provide strong contrarian signal that the pair could continue higher.

US Dollar/Japanese Yen Forex Retail Positioning Chart: Long interest has not exceeded short interest for nearly 2 years. Today’s shift is very significant.

Data Source: FXCM Execution Desk
Chart source: TradeStation
​

Where do we go from here? It would be foolish to believe that the USDJPY could not correct lower before continuing to fresh highs. Our forex technical forecast predicts that 81.95 is a significant area for support. If and when the US Dollar does correct lower against the Japanese Yen, we may look to buy in expectations of continued USDJPY strength.

 

[Jason Rogers]

Stimulus Around the World: What the FX Trader Should Know

Written by Lujia Lin of DailyFX.com


UNITED STATES
Policymakers in the world’s largest economy have undertaken large-scale measures on both the monetary and fiscal fronts since the Lehman collapse. Since lowering the Federal Funds Rate target to 0.00-0.25 percent in Nov. 2008, the Fed has launched asset purchases that have swelled its balance sheet to unprecedented levels. Fiscal efforts have focused on both project spending and tax cuts.

As of March 2012, the Fed has already completed both QEI and QEII. Operation Twist is ongoing; however, since purchases of longer-maturity Treasuries are being financed from sales of existing holdings, the program is not adding to the Fed’s balance sheet.

These programs have led to renewed confidence in the US banking sector, lower rates across the yield curve (including historically-low mortgage rates), and a recovery led by manufacturing. Despite signs of a pickup in economic activity, however, weak spots remain, with US home prices stagnant at best. Nonetheless, by signaling that it will hold off on further quantitative easing, the Fed appears to consider its pledge of low rates until late 2014 sufficient for sustaining the economic recovery.


EUROZONE
In the Eurozone, the bulk of stimulus efforts have been concentrated on the monetary side, as already large deficits and high debt-to-GDP ratios in many Eurozone countries, in addition to fiscal restrictions under the Stability and Growth Pact, ruled out the possibility of significant fiscal efforts. The two main monetary efforts focused on: (1) purchase of government debt issued by peripheral Eurozone nations and (2) longer-term loans to banks at low interest rates. In addition, Eurozone leaders have launched a number of bailouts for peripheral countries.

The ECB’s unconventional measures – combined with Eurozone leaders’ efforts to push through a Greek debt swap and to introduce stricter budgetary rules – have led to some degree of improvement in market sentiment in Europe. Amid improved market confidence, the ECB is now considering suspending the SMP and has even resumed warnings about inflation. Growth remains moribund, however – even Germany’s economy contracted 0.2 percent in the 4th quarter of 2011 – implying that at least the existing loose policy will continue for the foreseeable future.

 

[Jason Rogers]

Yen Crosses-Reversal Risk is High

Written by Jamie Saettele of DailyFX.com

EURJPY Daily Line

The EURJPY has rallied over 1400 pips from its January low and nearly touched the 10/31/11 (intervention high) today. The proximity of the October pivot combined with the impulsive (5 wave) structure of the advance and waning upside momentum (RSI divergence) warn of a turn lower from current levels. Bigger picture, the 5 wave advance does suggest that a major low is in place and that the coming decline will prove corrective. Levels to keep in mind in

GBPJPY Daily Line

The GBPJPY has rallied over 1600 pips from its January low. The impulsive (5 wave) structure of the advance and waning upside momentum (RSI divergence) warn of a turn lower from current levels. Bigger picture, the 5 wave advance does suggest that a major low is in place and that the coming decline will prove corrective. Levels to keep in mind in the coming weeks are the former 4th wave low at 12650 and former resistance at 12280.

 

[Jason Rogers]

US Dollar’s Time to Shine Against All Except Japanese Yen

Written by David Rodriguez of DailyFX.com

A major shift in Japanese Yen sentiment suggests it may claw back losses against the US Dollar (ticker: USDOLLAR), but an even-larger move in the US S&P 500 and broader financial markets suggest the USD may have bottomed versus the Euro and British Pound.

Last week we called for a potential EURUSD and GBPUSD top. And though we were clearly early in our calls on the Euro, the turn in the financial market tide could be what Dollar bulls have expected.

A critical point is whether the Dow Jones FXCM Dollar Index trades above critical 8-month highs. Else we believe that the Japanese Yen may have set an important short-term bottom, and our short-term USDJPY bearish remains firmly bearish absent a turn in market sentiment.

 

[Jason Rogers]

USD Index Poised For Fresh Highs, AUD Struggles To Hold Support

Written by David Song of DailyFX.com

Dow Jones FXCM US Dollar Index

The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) remains0.21 percent higher from the open after moving 91 percent of its average true range, and the rebound from 9,896 looks poised to gather pace as the greenback appears to be breaking out of the downward trending channel from earlier this month. Although the 30-minute relative strength index is coming off of overbought territory, the upward trend in the oscillator reinforces our call for more USD strength, and we may see a small pullback before a larger move to the upside. As the Federal Open Market Committee takes note of the more robust recovery, the shift in central bank rhetoric should continue to prop up the dollar, and the committee may see scope to conclude its easing cycle in 2012 as the world’s largest economy gets on a more sustainable path.

Dow Jones FXCM US Dollar Index

 

[Jason Rogers]

’Hawkish’ FOMC Minutes Dampen QE3 Hopes, Send U.S. Dollar Soaring

Written by Christopher Vecchio

The Federal Reserve’s policy meeting on March 13 was decisively neutral. Indeed, with the statement accompanying the decision suggesting that sentiment among policymakers was broadly neutral, the minutes from the meeting – released at 18:00 GMT today – highlighted the recent ‘hawkish’ shift among voting members.

Equity markets plunged after the minutes were released, with the S&P 500 dropping approximately 9-points from its pre-release level. The AUDUSD and EURUSD sold-off with fervor, with the former dropping by 60-pips and the latter plummeting by 120-pips. The Japanese Yen was also substantially weaker, with the USDJPY climbing 80-pips after the release. Broadly speaking, the U.S. Dollar was the best performer with the Dow Jones FXCM Dollar Index (Ticker: US Dollar) cracking the psychologically significant 10,000 level.

EUR/USD 1-minute Chart: April 3, 2012

Charts Created using Marketscope – Prepared by Christopher Vecchio​

Key points from the FOMC statement:

• FOMC saw no need to ease anew unless growth slows, and officials saw economy “expanding moderately” last month.
• “Labor market conditions continued to improve and the unemployment rate declined further, though it remained elevated.”FOMC participants saw jobless rate gradually declining.
• Housing market “remained depressed”, expected housing to slowly recover.
• “Overall consumer price inflation was relatively subdued in recent months”. “Measures of long-run inflation expectations remained stable. Most FOMC participants expected inflation rate at 2% or less.
• Near-term forecast for real GDP growth revised up slightly. In its March forecast, the FOMC”s projection for real GDP growth over the medium term was somewhat higher than in January, mostly reflecting an improved outlook for economic activity abroad, a lower foreign exchange value for the dollar and a higher project path of equity prices. FOMC continued to forecast that real GDP growth would pick up only gradually in 2012 and 2013.
• Significant outlook change could alter 2014 rate plan.
• Economy facing continuing headwinds, members generally expected a moderate pace of economic growth over coming quarter with gradual further declines in the unemployment rate.
• A couple of members indicated that the initiation of additional stimulus could become necessary if the economy lost momentum or if inflation seemed likely to remain below its mandate-consistent rate of 2 percent over the medium run.

Was the market reaction following this commentary warranted? Perhaps not, considering these beliefs were well-established back at the March 13 meeting. Regardless, it is important to consider what will happen going forward. It should be noted that the meeting occurred before Chairman Ben Bernanke opened up the last week of March with remarks that more easing could be warranted should the labor market continue to struggle.

By no means is this a suggestion for more QE – I am ardently against more easing – but rather a reminder that Chairman Bernanke has already eased off the hawkish tones in the time period between the March 13 meeting and the release of the minutes on April 3. Should economic conditions deteriorate over the coming weeks - slow growth out of Asia and Europe will hurt the U.S. economy - the FOMC's tone could revert quickly.

 

[Jason Rogers]

Euro/Swiss Franc Nears 1.20, Swiss National Bank Hovers-Trade Setups?

Written by David Rodriguez

The Euro/Swiss Franc exchange rate hit its lowest levels since September, 2011, and extremely one-sided retail forex trader positioning sets the stage for major volatility in the days ahead. How can we trade it?

The Euro/Swiss Franc exchange rate trades dangerously close to the Swiss National Bank’s stated floor at the SFr 1.2000 mark, and forex trading speculators have taken notice.

Our proprietary FXCM Speculative Sentiment Index data shows that the number of traders long the Euro/Swiss Franc outnumber those short by a massive 41 to 1. In other words—nearly 98% of traders in our sample are currently long the Euro against the Swiss Franc. This falls just short of the record set in February when the EURCHF fell to $1.2030, but the day’s not over and we could conceivably hit fresh peaks in our SSI.

Euro/Swiss Franc Chart Shows Retail Positioning Near Record Long

Data Source: FXCM Execution Desk DataChart Source: TradeStation

What happens next? Are forex speculators justified in positioning for Euro/Swiss Franc bounce?

The obvious question is whether such incredibly one-sided sentiment points to a Euro/Swiss Franc exchange rate bounce. When we saw similar extremes on the last decline towards SFr 1.2030, the EURCHF inched higher without any obvious prodding from the Swiss National Bank. Yet as we trade closer to the critical SFr 1.2000 mark, the threat of a showdown looms large and promises a great deal of volatility.

The Swiss National Bank remains committed to its EURCHF floor and as such stands ready to intervene at any moment. Such consistency in message and mission suggests that traders are justified in taking positions. Yet it seems unlikely that the SNB would essentially give speculators risk-free profits and we urge caution against taking aggressive positions against the lows.

Nothing is Guaranteed, Risk of EURCHF Declines Remains Real Despite SNB Floor

Financial markets are not known for their kindness, and even the threat of Swiss National Bank intervention does not guarantee that the Euro/Swiss Franc rewards speculators and remains above SFr 1.20. The fact that traders are so heavily net-long EURCHF suggests that any intervention could be quite expensive.

As the central bank would buy the EURCHF, speculators would aggressively sell long positions and book profits. Such a move could potentially offset the intervention and indeed make it quite expensive for the SNB to maintain their floor. That’s exactly what we have seen in previous failed SNB interventions, and you can be sure that central bankers are acutely aware of said risks.

Could we potentially see the EURCHF dip below SFr 1.20? Absolutely. The Swiss National Bank could stick to its word and defend the floor, but that doesn’t rule out an intraday spike below to take a lot of speculators out of their positions. A “run on stops” and momentary dip below 1.20 seems entirely plausible when one considers that the SNB does not want to have speculators sell into major interventions.

Trade setups for EURCHF

As traders we always want to know how we can take advantage of various opportunities, and we would be remiss to ignore the potential for a EURCHF surge. Yet we can’t ignore the risk of a decline, and such analysis suggests that the real opportunity could be to place buy entry orders below SFr 1.20 on the chance that the SNB makes a run on stop loss levels before intervening.

Is this guaranteed to work? Absolutely not. Yet we play probabilities, and in our opinion the SNB is unlikely to abandon its floor altogether. Time will tell whether this strategy proves successful.

 

[Jason Rogers]

EURUSD: Trading the U.S. Non-Farm Payrolls Report

Written by David Song and Michael Boutros from DailyFX.com

Trading the News: U.S. Non-Farm Payrolls

What’s Expected:

Time of release: 04/06/2012 12:30 GMT, 8:30 EST

Primary Pair Impact: EURUSD

Expected: 205K

Previous: 227K

DailyFX Forecast: 200K to 250K

Why Is This Event Important:

The world’s largest economy is expected to add another 205K jobs in March and the ongoing improvement in the labor market should prop up the U.S. dollar as it dampens the Fed’s scope to push through another large-scale asset purchase program. As the recovery gets on a more sustainable path, we should see the FOMC continue to soften its dovish tone for monetary policy, and the committee may look to normalize monetary policy towards the end of the year as the outlook for growth and inflation picks up. However, as market participation tapers off ahead of the holiday weekend, we may see whipsaw-like price action across the major currencies, and we will be prudent going into the event in an effort to preserve our capital.

Recent Economic Developments

As the economic recovery gradually gathers pace, businesses across the U.S. may continue to ramp up their labor force, and a marked rise in employment could push the EURUSD back below 1.3000 as market participants scale back expectations for more quantitative easing. However, easing demands paired with the slowdown in production could drag on hiring, and we may see the FOMC carry its zero interest rate policy into 2013 in an effort to encourage a stronger recovery. In turn, a dismal NFP report could spark a sharp rebound in the EURUSD, and we may see the pair maintain the range carried over from the previous month as market participants weigh the prospects for future policy.

Potential Price Targets For The Release

Although the EURUSD will be our primary focus for NFPs, we will also be watching the USDJPY as the pair tends to show a notable reaction to U.S. event risks. A look at the encompassing structure sees the USD/JPY trading within the confines of a flag formation off the March highs as the pair consolidates after its nearly 800 pip run off the February lows. Key daily support rests with the 23.6% Fibonacci extension taken from the February advance just below the 82-figure, with channel resistance limiting topside advances in the interim. While our medium-term bias on the pair remains weighted to the topside, the current correction is likely to persist so long as the RSI remains within the confines of the descending channel formation.

Our 30min scalp charts once again highlights intra-day support at the 61.8% Fibonacci retracement taken form the March advance at 81.94. A break below this level risks further dollar losses with subsequent support targets seen at 81.70, the 78.6% retracement at 81.34 and the 81-figure. Interim topside resistance stands with the 50% retracement at 82.35 backed by 82.60 and the 38.2% retracement at 82.80. A breach above channel resistance alleviates some of the pressure on the pair with such a scenario eyeing targets at the 83-figure, the 23.6% retracement at 83.30 and 83.60. Should the print prompt a bullish dollar response look to target topside levels with a break above 83.60 offering further conviction on our medium-term bias.

How To Trade This Event Risk

As market participants anticipate to see another 200+K rise in NFPs, the data certainly highlights a bullish outlook for the greenback, and the market reaction could pave the way for a long U.S. dollar trades as market participants scale back bets for QE3. Therefore, if we see the print come in-line or above forecast, we will need to see a red, five-minute candle subsequent to the release to establish a sell entry on two-lots of EURUSD. Once these conditions are fulfilled, we will place the initial stop at the nearby swing high or a reasonable distance from the entry, and this risk will generate our first objective. The second target will be based on discretion, and we will move the stop on the second lot to cost once the first trade hits its mark in order to preserve our profits.

In contrast, easing demands from home and abroad paired with the slowdown in production may bear down on hiring, and a soft labor report could renew expectations for additional monetary support as the Fed aims to foster a stronger recovery. As a result, if the development falls short of forecast, we will implement the same strategy for a long euro-dollar trade as the short position laid out above, just in the opposite direction.

Impact that the U.S. Non-Farm Payrolls report has had on USD during the last month

February 2012 U.S. Non-Farm Payrolls

Employment in the world’s largest economy increased another 227K in February following the 284K rise the month prior, and the ongoing improvement in the labor market certainly dampens the Fed’s scope to expand its balance sheet further as the recovery gathers pace. The above-forecast print propped up the dollar, with the EURUSD slipping below 1.3100, but we saw the pair consolidate throughout the North American trade as the exchange rate settled at 1.3116 going into the close.

 

[JSMITH07611]

Re: EURUSD: Trading the U.S. Non-Farm Payrolls Report

mr fxcm

your spreads are far too high. Also the extra charge in your nightly rollover charge is far too high since besides the difference in currencies overnight bank rates you add on a percentage charge every night which is sneaky and not necessary since you claim your only profit is from the spreads.

secondly you are the opposite of the traders and the trades do not go into the market at all. You are market makers and mainly make money when clients loose. You can claim all you want that this is not true but it is easy to lie when no one can proove otherwise. If you would have asked mfglobal or worldspreads if they segregrate money they also lied that they did and proof since they are regulated but that did not stop them being dishonest and sorry to say the same is with fxcm. If you can show me a statement with currenex or the cme or the actual exchanges of trades being hedged that i can verify i would beleive you but i am prepared to put down £1000 now that you cannot prove this since you don't hedge but rely on 90% of people loosing money.

every body look at this link FXCM Fined $2 Million for Slippage Issues ? Clients Will Be Compensated - Business Insider where it says fxcm fined 2m for slippage. just proof you are low lifes like the rest of spread betters.

regards

a person who is in the spreadbetting industry

 

[Jason Rogers]

Fundamental Market Forecast - 04.09.2012

By John Kicklighter, Currency Strategist

Fundamental Market Forecast - 04.09.2012 - YouTube

 

[Jason Rogers]

Written by David Rodriguez of DailyFX.com

DailyFX PLUS System Trading Signals –The US Dollar (ticker: USDOLLAR) has remained in an exceedingly choppy range against the Euro and other key currencies, and such directionless price action makes for difficult trading conditions. Forex options market volatility expectations remain low, and it seems that most believe the Euro/US Dollar and other key pairs will stick to their recent ranges.

Indeed, it seems likely that the US Dollar broadly sticks to its recent consolidation ranges amidst such low volatility, and we will position ourselves for range trading in the days ahead. What could change so that we shift our biases?

Euro/US Dollar resistance is well-defined at recent range highs of $1.32, while spike-lows at the $1.30 mark likewise underline support. Similarly, the Dow Jones FXCM Dollar Index remains stuck within a 9,900 to 10,050 range. The next market moves could be big if any of these levels break. But holding between these support and resistance levels would leave our range trading bias intact.

 

[Jason Rogers]

Today’s Weekly Strategy Outlook from DailyFX lists the current bias for EUR/USD, USD/CHF, and NZD/USD as “Range” which probably shouldn’t surprise any of you that have been trading these pairs over the past couple of months.

Here’s a look at the complete bias list:

While ranges may not be the most exciting markets to trade, they can still present opportunities for those that are patient. The new FXCMapps.com store has a couple of expert advisors ideal for range trading, and one of them is the RVI Range Trader which buys and sells based on the Relative Vigor Index.

You can download the RVI Range Trader EA and others at FXCMapps.com

 

[Jason Rogers]

All Eyes on Fed Amid Hopes US Recovery Can Offset Global Headwinds

Tomorrow we have the FOMC release coming out, and this one is extra special since Bernanke will be giving a press conference after the release. Here's what Ilya Spivak, DailyFX Currency Specialist has to say about it.

The focus now turns to the Federal Reserve monetary policy announcement due on Wednesday for an update on the other side of the equation. US economic data has increasingly to outperform relative to expectations since the last sit-down of the policy-setting FOMC committee (according to data from Citigroup). This may signal that the pace of recovery is once again faltering after a strong start to the year, replaying similar scenarios in 2010 and 2011. Alternatively, it may reflect a catch-up in economists’ expectations for US growth amid signs of genuine acceleration. A survey of analysts polled by Bloomberg hints the latter may indeed be the case. The median forecast for 2012 US GDP growth rose from 2.2 to 2.3 percent since the last Fed meeting, with upgraded expectations for the first, second and third quarters.​

And to stay on top of market moving news as it happens, you can use the DailyFX News Notifier.



The DailyFX News Notifier indicator is the perfect companion for traders who do not want to be caught off guard by economic announcements. The announcements that are shown on the DailyFX Economic Calendar display on any chart where the indicator is added, helping you stay informed and make sound trading decisions.

You can download the DailyFX News Notifier for MT4 at FXCMapps.com

 

[Jason Rogers]

British Pound Humbled as UK Slides into Double-Dip Recession

By Christopher Vecchio, Currency Analyst

The British Pound has had a very interesting past twelve months. On April 28, 2011, the GBPUSD traded to its yearly high at 1.6745, but within six months, the pair had sunk to a new yearly low at 1.5270 on October 6. While the GBPUSD traded back towards 1.6000 in the fall, the start of 2012 was rocky for the Sterling, which saw the cable sink to a two year low of 1.5234 on January 13, 2012.

Recently, on the back of better than expected economic data, Bank of England policymakers began to shift away from their aggregate neutral if not dovish stance. Adam Posen, one of the two remaining doves calling for more quantitative easing on the Monetary Policy Committee, dropped his bid for looser policy. Traders have taken this shift in the MPC as a sign that rates will soon rise, and accordingly, have bid up the British Pound. The GBPUSD rose to a fresh yearly higher at 1.6170 earlier today in hopes that the first quarter growth reading for the United Kingdom would confirm the BoE’s outlook; instead, it now appears the British economy has dipped back into a recession, muddling the British Pound’s recent bullish momentum.

While there have been some improvements in the British economy over the past few months, the first quarter preliminary growth reading did not show it. On a quarterly basis, growth contracted by 0.2 percent after contracting by 0.3 percent in the fourth quarter of 2011; on a yearly basis, growth remained unchanged in the first quarter after growing by 0.5 percent in the fourth quarter of 2011. Of course, it is important to make note of the consensus forecasts, because those are the readings that helped propel the British Pound to fresh yearly highs against the US Dollar: quarterly growth was expected at 0.1 percent; yearly growth was expected at 0.3 percent. When considering the United Kingdom’s growth relative to that of the United States the past few quarters – 3.0 percent annualized in the fourth quarter of 2011 – the British growth picture looks even more dismal.

Thus, not only did the economy contract, growth was much worse than what was expected. While the British Pound fell across the board on the data release, the big question now is whether or not the BoE will reassess their outlook, and whether or not there will now be another liquidity injection in the coming months. Recent inflation data and other gauges of economic output suggest that more easing is possible.

Overall growth aside, inflation has been the biggest issue for BoE policymakers. Certainly the government’s fiscal austerity measures have helped ease price pressures, but beyond what has been already implemented, it appears that inflation won’t come off any further given the measures in place. In fact, after year-over-year price pressures peaked at 5.2 percent in September, they fell to their lowest level in February since November 2010. But inflation has already started to tick back up: the same gauge rose to 3.5 percent in March. A higher inflation outlook is one of the only impediments the BoE will have to implement more easing.
Beyond recent inflation data, trade data suggests that the renewed appeal of the Sterling over the first few months of 2012 has impeded economic growth prospects. Although only data from January and February is available, we do note that in both January and February import growth outpaced export growth. In fact, as exports dropped by 2.0 percent in February, imports rose by 0.2 percent. Similarly, while exports fell by 0.6 percent in January, imports expanded by 1.4 percent. Considering the Sterling’s performance against the United Kingdom’s largest trading partners in January and February, the recent trade data is surprising: the Sterling fell by 0.39 against the Euro in January and February; it lost 1.28 percent to the Swiss Franc; though it appreciated 2.35 by against the US Dollar.

A weaker Sterling is exactly what the British economy needs, however, especially against the Euro and the US Dollar. By further boosting exports, further investment could enter the country in order to help manufacturers meet foreign demand for British goods. Case and point: industrial and manufacturing production contracted by 2.3 percent and 1.4 percent, respectively, in February.

With growth slowing to the point where the economy teeters on the edge of a double-dip recession, it remains to be seen whether or not the BoE sticks to its recent hawkish rhetoric.Yesterday, MPC member David Miles said that his vote for more quantitative easing “looks vindicated” in light of recent data and the first quarter growth reading suggests this may be true. Accordingly, it is likely that the BoE backpedals away from their recent hawkish commentary. Just last week, it looked like the Sterling was set to be one of the best performing major currencies through the first half of the year; now, the Sterling is a bit more humbled, and so too are the BoE’s hawks.

Forecast: GBPUSD to 1.5600 by the end of June