FXCM/DailyFX Signals and Strategies

Yesterday I posted the hourly chart of EUR/USD noting the channel. That channel was broken yesterday to the upside, and Jamie Saettele is talking about a EURUSD move back towards the 1.4500 area. Here's a look at his elliott wave chart:

EURUSD: 60 Minute Bars
http://media.dailyfx.com/illustratio...ody_eurusd.png
http://www.dailyfx.com/forex/technical/article/special_report/2011/05/18/TopHeadline_2.html

Of importance for later today is the FOMC Meeting Minutes release at 2:00pm ET. The release is important for learning more about the Feds plans to end QE2 and intentions for the second half of this year. QE2 is scheduled for completion in June. You can read more about today's FOMC meeting minutes release in David Song's daily market briefing http://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/us_open/2011/05/18/05-18-11.html

Just to let you know...I will be out of the office and away from the forums until May 30th. So this thread will be inactive for a week or so. Feel free to visit DailyFX at www.dailyfx.com and I look forward to getting back into the swing of things on May 30th.

Hopefully the market won't make too many big moves while I'm away

-Jason

Hi Jason. I opened my USDOLLAR chart today to see this. Is this a glitch? Because I haven't seen any news about that 7,000 point drop at all. I've seen freak moves like this before but never 7000 points or pips. Reloading my charts and trading station over and over doesn't seem to fix it so...

Hi gimme,

That was definitely a glitch on our side, but it should now be fixed.

-Jason

Trading Seminar with Richard Farleigh

For those of you near London, FXCM and H20 Markets is sponsoring a free forex seminar on Monday June 6th with Richard Farleigh as the guest speaker. Richard Farleigh is a former professional hedge fund manager, author of the critically acclaimed book '100 Secret Strategies for Investing' and star of BBC's hit show Dragon's Den. Richard will be explaining how he was able to consistently trade the financial markets and will be providing a full explanation of the sophisticated trading techniques contained in his critically book "Taming the Lion". The seminar is being held Monday June 6th from 8:30am - 11:30am at The Grange Hotel in London. You can register here http://www.fxcm.co.uk/richard.jsp, and we look forward to seeing you there if you can make it.

-Jason

Where can I check to see when USDOLLAR is going to go live? All I've seen is one interview where somebody said "a couple months from now"

We haven't set an exact date yet. The best time frame I can give you is "possibly within a couple of months" as you mentioned having seen in an interview. We would like to launch it as soon as possible, but this takes time. You can be certain that I will announce it on this thread and the FXCM Discussion thread in the broker section as soon as it is launched in live accounts.

Thanks for your patience with this, and we're just as excited about having it launched in live accounts.

-Jason

The highlight for this week will be on central bank rate decisions. We had the Reserve Bank of Australia come out with their decision last night to keep rates on hold at 4.75% as expected. We will see the RBNZ decision later today, and the ECB and BoE decisions later in the week on Thursday.

Fed Chairman Bernanke is also scheduled to speak today at 3:45pm ET at the International Monetary Conference in Atlanta. Here's what Ilya Spivak had to say in his forex update during the London session:

...markets will be keen to see how the central bank plans to reconcile the end of its QE2 stimulus program in just 2 days with what appears to be an acute slowdown in US economic growth.

Clues on the Fed’s position emerged in yesterday’s comments from policymakers Charles Plosser and Richard Fisher, both of whom struck a hawkish tone. Plosser laid out a case for raising interest rates before unwinding the Fed’s holdings of assets accumulated through QE and assured the markets that the central bank’s hurdle to enact further easing is “very high”. Meanwhile, Fisher plainly said the Fed has “done enough, if not too much” on stimulus and predicted the economy would grow at an annual pace of 3 percent in the second half 2011.
Source: http://www.dailyfx.com/forex/fundame...upportive.html

SSI
Here's a look at the latest SSI update from DailyFX+:

http://img52.imageshack.us/img52/516...11100534am.png

Of note regarding SSI is GBP/USD. Positioning yesterday was at 1.64 and it has flipped to -1.27. The SSI is a contrarian indicator and signals more GBP/USD gains.

Scanning the articles on DailyFX this morning, Walker England of the DailyFX+ course team pointed out a great EUR/CAD chart. If you look at this daily chart, EUR/CAD is testing an important 15 month resistance level:

http://img51.imageshack.us/img51/482...01190919am.png

For the CAD, a factor to watch for a potential break will be oil prices. Due to the Canadian Dollars correlation with the price of oil, a drop in oil prices could help EURCAD push above resistance. Traders are expecting an increase in oil production quotas by OPEC today which could put pressure on the price of oil to decrease.

Fed Chairman Bernanke spoke to the Annual Conference of the Committee for a Responsible Federal Budget just now. Here's what a CNBC article has to say about Bernanke's speech:

Bernanke said in the absence of a quick resolution to the battle over the debt limit, the United States could lose its prized AAA credit rating, while the dollar's special status as a reserve currency might be damaged.

"Even a short suspension of payments on principal or interest on the Treasury's debt obligations could cause severe disruptions in financial markets and the payments system," Bernanke said in remarks prepared for delivery at an event sponsored by the Committee for a Responsible Federal Budget. (http://www.cnbc.com/id/43397836)

There was little movement in the Dow Jones FXCM US Dollar Index, but the index basket still remains in an overall downtrend for the year. Take a look at the chart:

http://img844.imageshack.us/img844/4...01130518pm.png

The deadline for raising the US debt ceiling is August 2nd. We could see a rise in USDOLLAR volatility if this thing draws out, giving the Euro and Greece some competition for attention over fiscal problems.

Quick update regarding the Dow Jones FXCM US Dollar Index basket. I know everyone is anxiously waiting for the launch of the basket in live FXCM accounts. We're getting closer to a live launch but still not specific date I can give. Still expecting a launch this summer. I'll let you know as soon as I have more information.

Thanks to everyone in the London area that was able to make it out to the forex trading seminar with Richard Farleigh. We're hosting another forex trading seminar on June 23rd. This time the seminar will be hosted by City A.M.'s editor Allister Heath and DailyFX Market Analyst Alejandro Zambrano. Here's where you can register for the event: http://www.fxcm.co.uk/cam-fx-seminar.jsp

Anyone trading the EUR/USD today should take a look at John Kicklighter's overview of the mess occurring in Greece and its impact on the EUR/USD http://www.dailyfx.com/forex/market_...apandreou.html . Here's a excerpt from the article:

The possibility of Prime Minister Papandreou stepping down creates an incredible amount of uncertainty for the situation in Greece and strength of the euro specifically. Over the past month, the officials from the European Union have been locked in an intense debate over whether Greece should be given a second bailout and what the terms on that additional aid would be. Though there have been reassuring words on this front; no clear confirmation has been given about the timing and conditions of further support. In fact, at the conclusion of the EU Finance Ministers meeting yesterday, it was made clear that no consensus was met and an agreement may not be made until July.

We now know that Greek PM Papandreou will form a new government tomorrow and submit a vote of confidence to the parliamentary group. This should keep traders on their toes, so I would expect continued volatility in the EURUSD. Everyone is focused on Greece at the moment, but I wonder how long it will take for Portugal and Ireland to become a concern again.

John's article also has a graph showing the ECB rate forecast based on data from Bloomberg. Expectations for an increase dropped today.

http://media.dailyfx.com/illustratio..._Picture_6.png

SSI over the past month has been a little boring in my opinion, but things could get very interesting. EUR/USD positioning has flipped from net short to net long, indicating that retail traders are now fading the latest EUR/USD drop.

http://img849.imageshack.us/img849/9...01192702am.png

Fiscal and political uncertainty is hammering the Euro, and I can only imagine what sort of contagion will occur if things really get out of hand. This article from Bloomberg mentions that credit default swaps (a measure of sovereign bond risk) is now at an all time high for Greece, Ireland, and Portugal. http://www.bloomberg.com/news/2011-0...o-records.html

The weekly SSI article from DailyFX is set to be released in a few hours. SSI can be accessed through DailyFX+ at https://plus.dailyfx.com using a live FXCM account number and password to login. If you don't have a live account, you can access a free trial by registering here http://www.fxcm.com/forex-signals.jsp.

Jason, thanks for your reply to my post, in my openion all opening and close no matter what time or hour should be the same, they way you have set by the opening or the time does create false signals to whomever yousibg Ichimoku, not good for the traders, only good for FXCM, but thanks for your reply, buy the way (so no reason to be paranoid , is not in my dictionay, I don't use Ichimoku or any broker platform to analyze the market.

Mme

Hi Mme,

There's no centralized location for forex trading and therefore no set time for the open/close of a daily candle, but 5pm ET is considered to be the start of the new trading day which is why the daily candle on FXCM's FXTSII begins at 5pm ET. The MT4 platform always begins at 00:00 according to the server time and the start time of the daily candle is not something we could change unfortunately without changing the server time. You'll notice that many forex brokers with MT4 have varying server times. Appreciate your response and all the best with your trading.

Jason

The EUR/USD has been suprisingly strong after bottoming out at the 1.41 level on Friday given last week's focus on Greek fiscal problems. The next 24 hours could pose a significant risk for market volatility due to

1) Greek parliamentary vote of confidence for PM Papandreou
2) FOMC rate
3) Bernanke press conference
4) ECB Trichet and BoE King press conference[/b]

The Greek parliamentary vote is scheduled for today at 5:00pm ET (21:00 GMT) which also coincides with daily rollover. Please be careful if trading before and after this event as this event coupled with rollover could cause an increase in market volatility resulting in increased spreads and decreased market liquidity.

Here's an article from DailyFX on what to watch out for:

A scheduled “No Confidence” vote in the Greek government threatens substantial volatility and widened spreads for the Euro/US Dollar pair, warning traders to reduce positions and leverage ahead of difficult market conditions.

The vote is scheduled to begin at 21:00 GMT (17:00 New York Time) and last approximately for 30 minutes, coming at the time of worst intraday liquidity and widest spreads for the Euro/US Dollar pair.

http://media.dailyfx.com/illustratio..._Picture_3.png

Traders should be especially cautious with euro positions ahead of the result, reducing leverage on EURUSD positions on the threat of poor trade execution and being taken out of trades due to exceedingly wide spreads.

Greek members of parliament will vote on whether Prime Minister George Papandreou’s government will stand and whether new elections will decide the makeup of the domestic government. Papandreou’s socialist party has 155 of the 300 seats in parliament, with 151 votes necessary to retain power. Should the government fail to receive these votes, it would put further Greek fiscal aid at clear risk; some policymakers have speculated that a vote of no confidence would guarantee a Greek debt default.

Such a scenario could lead to a mass exodus from European assets as traders shed Greek debt exposure at rock-bottom prices. Given that the European Central Bank holds a significant sum in Greek government debt, it could likewise affect the central functioning of currency union.

Continue reading...http://www.dailyfx.com/forex/market_...olatility.html

Check this one out. AUD/USD SSI flipped from net short to net long as of this morning's update on DailyFX+.

http://img830.imageshack.us/img830/9...01194930am.png

Looking at the daily chart, AUD/USD is holding on to support. If this level doesn't hold, it could go down as far as 1.02 before finding another major support level.

http://img4.imageshack.us/img4/5636/...01194342am.png

It's been a while since I've been able to update this thread, but hopefully I can now get back into the swing of things. One major event everyone should pay attention to is the EU stress test results coming out this Friday July 15. The potential for negative results along with uncertainty over financial stability in Italy and Greece is causing market jitters. Here's a nice article from Bloomberg on what we could possibly expect with Friday's release: http://www.bloomberg.com/news/2011-0...ess-tests.html

In other news, the USD/JPY and GBP/JPY are hitting extreme SSI levels as traders fade the JPY strength. Both pairs are trading down to levels not seen since the height of panic after the March tsunami. The latest SSI figures from today shows nearly 90% of of traders in GBP/JPY are long and nearly 87% of traders in USD/JPY are long:

http://img200.imageshack.us/img200/4...01132647pm.png

The SSI is a contrarian indicator and signals more possible USDJPY and GBP/JPY losses.

Nice drop in both USD/JPY and GBP/JPY after I posted yesterday, but we haven't seen any follow through. In other news, Bernanke began his testimony at the Semiannual Monetary Policy Report to the Congress and the US Dollar has taken a hit. Below is a daily chart of the DJ FXCM US Dollar Index basket. I was watching a large triangle developing over the past two months but the 9,750 level seems to be formidable resistance.

http://img43.imageshack.us/img43/178...11110122am.png

So why is the dollar weakening? Here's the takeaway point from Christopher Vecchio of DailyFX:

THE TAKEAWAY: Federal Reserve Chairman Bernanke’s Semiannual Monetary Policy Report to the Congress > Dovish Commentary Suggests Further Easing > U.S. Dollar Bearish

The U.S. Dollar plummeted against a basket of currencies at 14:00 GMT as Federal Reserve Chairman Ben Bernanke began his testimony at the Semiannual Monetary Policy Report to the Congress, in which it was evidently clear that the Federal Reserve was ready to continue its loose monetary policy – and thus further devalue the U.S. Dollar – in order to boost growth prospects for the U.S. economy.

In his discussion of current economic conditions, Chairman Bernanke noted that the pace of expansion so far this year has “been modest” in the United States, with real gross domestic product having risen at “about a 2 percent rate in the first quarter of this year, and incoming data suggest that the pace of recovery remained soft in the spring.” Similarly, the unemployment rate, which had been “on a downward trajectory at the turn of the year, has moved back above 9 percent.”
Full Article: http://www.dailyfx.com/forex/market_alert/2011/07/13/U.S._Dollar_Plummets_as_Bernanke_Suggests_Further_Easing_on_Horizon.html

And finally...those of you waiting (patiently) for the US Dollar Basket to be launched for live accounts with FXCM, we're getting closer! Thanks for your patience

The deadline for raising the US debt ceiling (August 2nd) is quickly approaching and yesterday's warning from Moody's gave us some insight as to how the dollar might react if there's no action taken by August 2nd. David Rodriguez wrote a great report on how the dollar reacted yesterday and how this could give some insight to trading the dollar in relation to the debt ceiling if things continue to get worse:

What could happen if the Treasury Defaulted on its Debt?

The effects of a Treasury default would be substantial and far-reaching, leaving few corners of the market untouched. US Treasury Debt has long been recognized as the global risk-free asset. In most financial models, returns in any asset are benchmarked against the equivalent risk-free rate.

The US government bond yield is thus the bare minimum return required for any US Dollar-denominated asset. If the government defaults on its debt, no matter for how short a period of time, Treasury debt prices would fall sharply and yields move quickly higher.

The yield on owning stocks would have to rise, prices fall to account for the higher underlying benchmark risk. This could easily force the broader US S&P 500 lower and force contagion across international financial centers. We could see a global sell-off in financial market ‘risk’.

In fact, we got a preview of what might happen as Moody’s downgraded outlook on the US sovereign credit rating on July 13th. The US Dollar sold off sharply as an immediate reaction, but the bigger moves came from the S&P 500 and the forex carry trade.

S&P 500 Futures Prices Drop Significantly as Moody’s Downgrades US Credit Rating Outlookhttp://media.dailyfx.com/illustratio...tCeiling_1.png

The US Dollar reaction was slightly more nuanced, as the Greenback initially sold off sharply only to recover shortly thereafter. We could envision similar reactions from the US Dollar if the Debt Ceiling is not raised ahead of the August 2 deadline.

Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) Tumbles on Moody’s US Credit Rating Outlook Downgrade but Subsequently Bounces
http://media.dailyfx.com/illustratio...tCeiling_2.png

The full report can be found on DailyFX here: http://www.dailyfx.com/forex/fundame..._Trade_It.html