FXCM/DailyFX Signals and Strategies

Hi gjworley,

The platform should automatically update when you login to update the dynamic trailing stop option. However, if you're in an FXCM LLC (US) account, it won't have the trailing stop option. Check that first. Are you setting stops through the open positions window or summary window? If you're setting them through the summary window, then you have an FXCM LLC (US) account.

Jason

Hi Jason , tks for your responce , i have the US account . Is there a way i can change my account to get the ts option , Gary

Hi Gary,

To get the option on TS, you will need to switch the account from FXCM US to FXCM UK. Here is the form to do so depending on your account type:

Standard 10k: http://www.fxcm.com/std10k-hedging-transfer-form.jsp
Micro: http://www.forexmicrolot.com/micro-h...nsfer-form.jsp

-Jason

submitted the form , thank you . I enjoy trading with FXCM , you folks have a lot to offer for the small trader , Gary

Thanks for the feedback Gary and happy to help!

Jason

I'll post more news, details, and information regarding the CFTC proposal as I get them.

Now, back to the market, let's take a look at EUR/USD. EUR/USD has dropped below the 200 day moving average on the daily chart. This signals a change in trend direction and EUR/USD bearishness. This is something to keep on your radar.

http://img51.imageshack.us/img51/315...ingaverage.jpg

I will be taking part in an online chat discussion panel hosted by FX Street discussing the impact of the 10 to 1 leverage proposal and how it will impact forex traders and the industry. The event starts on Thursday at 9:00am EST, and you can find the access through the homepage on FXstreet.com

-Jason

Hi Jason ,I assume FXCM UK accounts will not be effected by this change ( 10 to 1 leverage ) . Am i correct ? Thanks , Gary

Hi Gary,

You are correct. FXCM UK accounts will not be effected by the 10 to 1 leverage proposal.

-Jason

If you're trading the EUR/USD weakness due to it's cross below the 200 day moving average, keep an eye on this trendline for bounces. (8hour chart)

http://img682.imageshack.us/img682/3280/eurusd8hour.jpg

Here's the weekly Euro forecast from DailyFX written by Terri Belkas:

Now that EURUSD has broken below its 200 SMA – a key technical level for the pair – bearish potential has become even greater, especially when you consider the return of risk aversion. Indeed, in coming weeks, the pair is likely to respond sharply to not only European and US economic indicators, but also any news relating to the financial sector.

Looking to euro-specific data, a number of confidence indicators will be released through the week. There is potential for very mixed results following the past week’s German ZEW report, which showed that investors are feeling more confident in current economic conditions, but are becoming increasingly pessimistic about the outlook as the financial markets show signs of pulling back. On Monday, German’s GfK consumer confidence report is projected to slump to 3.1 from 3.3, which would not bode well for Q1 domestic demand. On Tuesday, the IFO measures of business confidence – business climate, current assessment, and expectations – are all projected to either improve or go unchanged. On Thursday, Euro-zone economic confidence is anticipated to rise to an 18-month high of 92.3 from 91.3.

Additionally, German and Euro-zone measures of inflation are anticipated to show that annual CPI rates rose, but on a monthly basis, they could actually show declines. Finally, the German unemployment change is expected to rise in January for the first time since June, this time by 15,000. Like US non-farm payrolls, this number can be very difficult to predict and thus, tends to have a big “surprise” impact on euro trade, albeit for a short period. Overall though, signs of reemerging job losses would hurt prospects for a continuation of the Euro-zone’s recovery. – TB

I find China's method of monetary policy interesting compared with how the Fed operates. We are used to the fed raising or lowering interest rates in increments of 25 basis points (0.25%) to tame inflation or slow things down. In January, China's central bank raised its benchmark rate by 8 basis points twice within a two week span. Then later in January, China's central bank told some banks to increase their reserve requirement by 0.5%. And lastly today, China's regulators told banks to limit lending http://www.bloomberg.com/apps/news?p...d=amY9wPnq4Yfo. The mood has gone from very modest increases in rates to slow things down to more extreme measures such as an increase in reserve requirements and restrictions on lending. Does China's central bank see a surge in inflation or possible bubble forming?

Here's what DailyFX had to say about recent actions taken by Chinese authorities and its effect on the market overnight:

The US Dollar and Japanese Yen raced higher as Asian shares and US stock index futures tumbled after Reuters reported that the China’s central bank will require China Citic Bank Corp and the Industrial and Commercial Bank of China to raise their reserve ratios by an additional 0.5% effective today. The move follows a series of recent actions taken by Chinese authorities to rein in lending on fears that the buoyant may overheat, particularly after stronger than expected growth and inflation figures released last week.

This leads me to EUR/JPY. It's correlation with equities did not continue at the same pace last year which we saw during the height of the equity moves pre-2009; however, it has been steadily moving lower over the past over the past several months and is now testing support. Here's the weekly chart:

http://img710.imageshack.us/img710/745/eurjpy.jpg

DailyFX released a new pivot point tool today.

Here's what it looks like:

http://img19.imageshack.us/img19/4029/pivotpoints.jpg

You can choose from 4 data types: Pivot Points, Camarilla, Woodie, and OHLC. I selected Pivot Points for the screenshot above and circled in red the pivot point level. To the left of the pivot point level is the support levels and to the right is the resistance levels.

As a general overview, a pivot point takes yesterday's high, low, and close then divides it by 3 to give you the pivot point. Traders often look at the pivot point to distinguish whether the market is bullish or bearish. If the market is trading above the pivot, then it is bullish. If the market is treading below the pivot, it is bearish.

Here's where you can find it on the website http://www.dailyfx.com/technical_analysis/pivot_points/

Over the past week, I've commented on weakness in the EUR/USD and EUR/JPY. We should expand our view to the EUR in general as to why the EUR has been weakening. An important factor to watch out for is the stability of certain Euro-Zone countries credit ratings and budget deficits which is causing concern and creating stress on the Euro.

Greece was the focus of this in past weeks due to a ballooning budget deficit and whether they will actually be able to afford the run up in debt. Nouriel Roubini mentioned on CNBC that "Greece is bankrupt", and the Economist had a good article on the problems they're running into with their budget deficit.

Then, today we hear increased chatter about Portugal's budget deficit weighing on the Euro (see today's WSJ article). First Greece, now Portugal starting to prove the saying that there's never one cockroach. Could Spain be next?

So what does this mean for currency traders?

As long as there is continued focus on problems with Euro countries finances, it can only be negative therefore I'm watching pairs such as EUR/USD, EUR/AUD, EUR/NZD and EUR/JPY.

Here's what Jamie Saettele of DailyFX has to say:

Bigger picture, “staying below 14583 keeps the larger trend pointed lower in either a 3rd wave or C wave. If a C wave, then the decline should extend to the 13650-13750 area. If a 3rd wave, then the decline likely extends closer to 13000.” Near term, favor the downside against 14200, as there are 5 waves lower from that level. There is potential resistance at 14110/25. Above 14200 would shift focus to 14250-14335.

http://www.dailyfx.com/export/story-...1727798555.gif

This is a question that seems to be coming up often on other sections of the forums...

Here is a list of the differences between FXCM UK and FXCM US:

http://img215.imageshack.us/img215/8...ukvsfxcmus.jpg

i really enjoy reading ur thread Jason, i love the way you analyze fundamentals and put it in perspective.

Thanks fugly! I'm a little biased towards the fundamentals in my own trading (which filters through onto this thread) because I tend to look for longer term trends lasting more than a day. I'll leave the technical analysis to the DailyFX analysts. If I look at technicals it's mostly just good old support/resistance with maybe a fibonacci thrown in. I also tend to think the big picture fundamentals don't get enough coverage on DailyFX either

Here's a technical view of EUR/NZD outlined by Tom Long, a course instructor for DailyFX.

We are starting to see some of the currency pairs we have been following start to move in the direction of the daily trend.
This EUR/NZD 4-hour chart shows how Fibonacci retracement levels can be an effective tool for trend traders. The market spiked up above the 61.8% level but then quickly reversed and is now trading back below the 38.2% level. This is obviously bearish for this pair and we should look for more selling pressure. Some aggressive traders may already be in their sell position on this pair and I would think that many have their protective stop above the high of that candle that quickly spike up through the 61.8% level.

http://www.dailyfx.com/export/story-...G_49632352.jpg

How about Ben Bernanke's re-appointment to Fed Chairman? I thought the vote would be closer than 70-30.

DailyFX's weekly SSI report was released today. I always keep an eye on this for long term trends. Here's EUR/USD

http://www.dailyfx.com/export/story-...sd/SSI128b.gif

Positioning turned net long earlier this month which has signaled USD strength.

Some interesting fundamentals below from Sean Hyman's "News in 60 Seconds" blog post to start off the week. The AUD rate announcement should be interesting, and possible GBP weakness is on my radar:

Switzerland's justice minister warned in an interview on Sunday that top bank UBS could collapse if sensitive talks with the United States over a high-profile tax fraud investigation fall through.
"The actions of UBS in the United States are very problematic."The Swiss economy and the job market would suffer on a major scale if UBS fails as a result of its licence being revoked in the United States".

Gold $1,089
Oil $73.49 (Exxon Mobil's profit fell in the 4th quarter.)

U.S. sends more ships toward Iran. Iran supposedly planning a revolt on Feb. 11th. We'll see. However, it could be supportive of the U.S. dollar: http://www.guardian.co.uk/world/2010...-missiles-gulf

AUD Interest Rate decision comes out at 10:30pm EST tonight. Expectations are for a 0.25% hike to 4.00%!

GBP Manufacturing PMI better at 52.4 vs. 52.0 expected and 52.0 last time.

USD ISM Manufacturing PMI comes out at 10am EST today. Expectation: 55.5. Previous month revised downward already to 54.9 vs. 55.9.

President Obama to propose a $3.8 trillion budget.

Geithner speaks at 10am EST today. He testifies before the House Senate Finance Committee on the fiscal 2011 budget.

NZD Labor Cost Index q/q comes out at 4:45pm EST today. Expectation: 0.5%.

I've started watching GBP/CHF past couple of days and GBP in general due to last weeks lower than expected GDP announcement of 0.1%. Gives very little reason for the BOE to think about raising interest rates. And next week we have the NIESR GDP estimate for the UK which is estimated at 0.3%. And finally there's a BOE meeting on Thursday.

Here's what I'm looking at on the chart:

http://img709.imageshack.us/img709/9173/gbpchfchart.jpg

A retest of 1.7000 could develop into a head and shoulders pattern. The DailyFX Plus signals include GBP/CHF in the signal list but no signal being generated yet by DailyFX Plus. Only a downtrend indication.

http://img132.imageshack.us/img132/2...pchfsignal.jpg

You can access DailyFX Plus at http://plus.dailyfx.com. Use your live FXCM account number and password to login.