Whats really moving the market today?

Buddies while we did reject the first resistance level ,second attempt broke above .

The background fundies are not just holding they are gaining power so while my pair eur/usd messes with the technical levels the power is still in force as i type ,whether it changes ,who knows but i will ride it till it does .

With the power behind us breaking a "00" shouldnt be to difficult.

Oil breaking the $100 is a good sign.better tha other levels.

For anyone that isnt sure how to apply the drivers to price .

Please review my last couple posts i tried to do a live trade step by step .

illustrating what the various drivers were doing in relation to my pair right from entry.

Before criticising please look for faults in the evidence.
By all means feel free to point out potential areas of improvement .

(RTTNews) - The euro gained on the broadly weaker sterling as the International Monetary Fund warned Greece it will need to make deeper budget cuts in exchange for further aid.

The IMF, with its leader Dominique Strauss-Kahn in jail in New York on sex assault charges, is urging Athens to adopt new reforms in the coming months. Greece is desperate to avoid restructuring its sovereign debt, and will need help from neighbors and the IMF.

A lack of consensus on the Greece crisis has hurt the euro in recent weeks, but its losses versus the dollar have been muted by a series of economic releases showing lingering weakness in the U.S. economy.

The euro was stuck near $1.42 versus the dollar today, unable to sustain a move back toward 17-month highs set earlier in May. The euro topped out near $1.50 a few weeks ago.

In news from the beleaguered U.S. housing front, mortgage applications continued to rise last week, as home owners rushed to lock in low interest rates.

U.S. mortgage applications increased 7.8 percent from one week earlier, according to data from the Mortgage Bankers Association's Weekly Mortgage Applications Survey for the week ending May 13, 2011.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.60 percent from 4.67 percent.

The Federal Reserve is scheduled to release the minutes of the April 26-27 monetary policy setting meeting at 2 pm ET. The FOMC minutes are also likely to be combed through to get further insights into the Fed's thinking about economic conditions and its monetary policy stance.

Meanwhile, the euro rose to a 10-day high of GBP 0.8824 versus the sterling.

The number of Britons claiming jobless allowance increased in April at the sharpest pace since January last year, even as the UK's private sector struggled to compensate for job losses in the public sector due to government spending cuts.

The Bank of England's rate-setting body decided by a split vote to leave the key interest rate unchanged this month as concerns over consumer spending overshadowed mounting inflation, the minutes of the meeting revealed Wednesday.

On the flip side, the Eurozone economy no longer needs the degree of economic or monetary stimulus adopted during the height of the financial crisis, given the strong ongoing recovery of the region, European Central Bank (ECB) Executive Board member Jurgen Stark said Wednesday.

(RTTNews) - The dollar rallied versus the sterling but remained locked in a stalemate with the euro and yen on Wednesday, as focus remained on whether Greece will accept strict terms in exchange for sovereign debt aid.

The International Monetary Fund, with its leader Dominique Strauss-Kahn in jail in New York on sex assault charges, warned Greece that further reforms are needed if they hope to arrange for another lifeline.

Meanwhile, soaring U.K jobless claims helped the dollar hit a 6-week high versus the sterling. The buck jumped to $1.6137 its highest since early April, picking up more than a penny from its overnight levels.

The number of Britons claiming jobless allowance increased in April at the sharpest pace since January last year, even as the UK's private sector struggled to compensate for job losses in the public sector due to government spending cuts.

The minutes of the latest Bank of England policy meeting showed its rate-setting board voted 6 to 3 in favor of keeping rates on hold at 0.5 percent.

The dollar was stuck near $1.4230 versus the euro, even as the Greece's sovereign debt crisis remained unresolved. Economic weakness in the U.S. has prevented the dollar from extending May's move away from a 17-month low near $1.50.

There buck eased versus the yen, slipping to Y81.15. With the loss, the dollar returned to a stubborn trading range.

The Federal Reserve is scheduled to release the minutes of the April 26-27 monetary policy setting meeting at 2 pm ET. The FOMC minutes are also likely to be combed through to get further insights into the Fed's thinking about economic conditions and its monetary policy stance.

Although the post-meeting press conference shed some light on the discussions and deliberations that had happened during the meeting, the markets may still be curious to know about the degree of cohesion or divisiveness among policymakers.

In news from the housing front, U.S. mortgage applications continued to rise last week, as home owners rushed to lock in low interest rates.

Mortgage applications increased 7.8 percent from one week earlier, according to data from the Mortgage Bankers Association's Weekly Mortgage Applications Survey for the week ending May 13, 2011.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.60 percent from 4.67 percent

Nobody is trading fundamental's here.
.

news items and economic indicators are not equal to fundamentals, they are only one part of them.

I'm surprised not one price chart has been posted here yet. Not complaining just surprised. Don't forget the focus don't have to be on fundamentals alone...

Got exams in the next 2 weeks so won't be posting very much but I am enjoying reading everyone's thoughts. Feel free to do what you want with the thread. Demonstrations, charts, whatever I made this so we can explore different avenues first hand and not get bogged down into the same old way of seeing things.

I think so far we're on the right track but like I said feel free to get crazy with it.

Back later

jmtini
It is good to see another participant, but may I humbly suggest that you consider the formatting of your posts before you actually post them. The way I do it is this:
1) I mark off the source name (for example BBC) and the title in bold
2) I read the entire news article and then post only the most important lines/paragraphs here. I also make sure to use the 'BACKSPACE' button reorganize the text so that there aren't as many new lines. This makes reading the post easier.
3) You could also try highlighting the most important facts in bold, for example an interest rate, a price or a specific fact YOU consider important
4) Finally I add a link to the news piece so that anyone who wants to read the WHOLE thing can do it

http://www.reuters.com/article/2011/...74H4XX20110518

This is something worth noting .

I have been waiting and watching for this type of stuff .

When they go into syria things will get heated ,china had to get out of lybia when military attacked ,russia has a large naval base in syria.
Iran is a neighbour of syria and is the fourth largest oil exporter .

Even this has sent oil up ,if it escalates $114 /barrel will seem cheap.

Gaddafi headed a meeting to mint gold coins to trade oil in ,look were that got him.
get russia to leave syria,possibly bait iran for an exscuse to fight them ,try to stem irans nuclear program and control there oil with a friendlier regime .

Keep your eye out for further news releases, and watch oil soar ,knowing the effects it has on price trade accordingly .
See you in carribean for cocktails lol.

I realise the oil inventories were also released .

mmm I think some people look at the thread title and assume its some kind of attack on Technical Analysis, which it isn't

I have a question that is probably a silly one but

As we know Options expire weeks can cause volatility in the spot market.. Obviously people are either executing or not executing their option trades

But how exactly is this translated into the spot market (what are the mechanics behind it). As in, exactly WHY does this cause volatility?

At what point is liquidity consumed?

My instinctive reaction is to stay away during option expiration.

Hi Cindy,

A thought provoking thread you started & it should gain more momentum as the days go by.

In my view fundamentals are helping to move the market along more & each days & the unrest in the middle east as well as around the world will only get worse as time goes on. Rest assured the fundamentals will clean the dollars from an account if you get caught unaware. Just research the number of hedge funds that have gone under in the last 2 yrs. Many of these funds were trading technical models that those unexpected situations or announcements could not be calculated into the model & your know the rest of the story.

The core of my trading is focused on technical analysis, but being aware of upcoming announcements is always in the mix. Never the less, there will always be those unexpected situations.

Just my views & nothing more. Again thanks for the thread & good luck on the upcoming test.

____________________________

To be honest cindy ,i have researched this subject and trust me ,like everything in forex there are loads of option types and it would be difficult to explain them all here .

best to google it and learn from there .

Just know that if large players are involved in an expiry level,price will tend to head there before expiry ,there will be traders wanting it above and below ,they get it close in order to pop it long enough to profit from it ,after expiry price can continue on its original path.

There was rumoured to be a 2 no touch expiry keeping us up near 14900 but once it touched the bottom touch level the day before expiry lol,they had no reason to defend it and we saw the big move down that had already started a couple days earlier on gbp and oil.

In fact forexlive posted the rumour as well.

that's what i want to know, why it's rare for peoples here (in FF) talking about option. if option market really have a big portion why peoples here didn't think to study 'how they act' in the market movement...


ps: i know nothing about option, is it worth to study about it?
still looking resources to study..would love if some one give a guide..

hallo Sir, i remember you ever talk about 'Export-Import and currency', what should i know and study?? could you give more explanation about it?

regard,

java.

FOMC meeting minutes were released just over half an hour ago (nope, over an hour ago, it just took me about 40 minutes to write this damn post ). To be honest it was very dull reading, even duller than usual, and you can't find anything that wasn't already communicated to the media earlier. There was discussion of exit strategies but no real clarity on that front. As usual the committee anticipated the somewhat higher level of inflation to be transitory so nothing new here either. Short summary below as well.

Here are some of the key points the way I see it. Highlights are mine.

BALANCE SHEET, FED FUNDS RATE, ASSET PURCHASES

1. Participants noted that the Committee's decision to discuss the appropriate strategy for normalizing the stance of policy at the current meeting did not mean that the move toward such normalization would necessarily begin soon.
2. Most participants indicated that once asset sales became appropriate, such sales should be put on a largely predetermined and preannounced path; however, many of those participants noted that the pace of sales could nonetheless be adjusted in response to material changes in the economic outlook. Several other participants preferred instead that the pace of sales be a key policy tool and be varied actively in response to changes in the outlook.
3. A majority of participants preferred that sales of agency securities come after the first increase in the FOMC's target for short-term interest rates, and many of those participants also expressed a preference that the sales proceed relatively gradually, returning the SOMA's composition to all Treasury securities over perhaps five years.
4. Participants noted that, for any given degree of policy tightening,
   more-gradual sales that commenced later in the normalization process would allow for an earlier increase of the federal funds rate target from its effective lower bound than would be the case if asset sales commenced earlier and at a more rapid pace. As a result, the Committee would later have the option of easing policy with an interest rate cut if economic conditions then warranted. /.../ A few participants expressed a preference that sales begin before any increase in the federal funds rate target, and a few other participants indicated that sales and increases in the federal funds rate target should commence at the same time.
5. The Committee agreed that more discussion of these issues was needed, and no decisions regarding the Committee's strategy for normalizing policy were made at this meeting.

ECONOMY

1. The information reviewed at the April 26–27 meeting indicated, on balance, that economic activity expanded at a moderate pace in recent months, and labor market conditions continued to improve gradually. Headline consumer price inflation was boosted by large increases in food and energy prices, but measures of underlying inflation were still subdued and longer-run inflation expectations remained stable.

1. Participants viewed the weakness in first-quarter economic growth as likely to be largely transitory, influenced by unusually severe weather, increases in energy and other commodity prices, and lower-than-expected defense spending. As a result, they saw economic growth picking up later this year. Participants' forecasts for economic growth for 2012 and 2013 were largely unchanged from their January projections and continued to indicate expectations that the recovery will strengthen somewhat over time.
2. Several participants indicated that, in contrast to the somewhat weaker recent economic data, their business contacts were more positive about the economy's prospects, which supported the participants' view that the recent weakness was likely to prove temporary.

EMPLOYMENT

1. Some participants reported that more of their business contacts have plans to increase their payrolls later this year. A few participants noted that firms may be poised to accelerate their pace of hiring because they have exhausted potential productivity gains, but others indicated that some firms may be putting hiring plans on hold until they are more certain of the future trend in materials and other input costs.
2. Participants discussed whether the significant drop in the unemployment rate might be overstating the degree of improvement in labor markets because many of the unemployed have dropped out of the labor force or have accepted jobs that are less desirable than their former jobs.

1. Participants continued to project the unemployment rate to decline gradually over the forecast period but to remain elevated compared with their assessments of its longer-run level.

INFLATION

1. Participants revised up their projections for total inflation in 2011, reflecting recent increases in energy and other commodity prices, but they generally anticipated that the recent increase in inflation would be transitory as commodity prices stabilize and inflation expectations remain anchored.

1. Many participants had become more concerned about the upside risks to the inflation outlook, including the possibilities that oil prices might continue to rise, that there might be greater pass-through of higher commodity costs into broader price measures, and that elevated overall inflation caused by higher energy and other commodity prices could lead to a rise in longer-term inflation expectations.

-------------------------------------------

From the minutes it is very clear that negative real interest rates are here to stay for quite a bit longer so you can expect to see the dollar depreciate further and commodity inflation to continue. The FOMC sees no reason to change their monetary policy and even if they were to tighten, they admit the tightening would have to take place gradually over many years (sic!).

You can go and read the meeting minutes yourself here or download the pdf here. It's pretty dull reading to be honest but it's just something I do to keep track of the Fed. I generally prefer going to the original source for the info and then later supplementing that with what the reporters write.

I'm posting two posts from forexlive on the FOMC minutes here to supplement my own comments. I'm probably not going to post anything else on the FOMC minutes because there really isn't much to talk about here. My time is much better spent trying to find a good place to short the dollar.

FOMC discussed scenarios for normalization of policy (LINK)

 

1. Majority favors raising rates before selling assets
2. Most favored first stopping mortgage-backed securities reinvestment
3. Normalization discussion did not mean it would begin any time soon
4. Q1 growth slowdown seen largely transitory; pickup in growth seen limited
5. Many participants seen as more concerned about upside risks to inflation outlook
6. A few saw rise in inflation risks suggesting rate hike may be needed sooner than currently anticipated

They’re laying the groundwork but not in a hurry (LINK)
No real surprises from the FOMC minutes. The Fed leaked several weeks ago that there had been a thorough discussion of exit strategies while no immediate or even medium-term move is expected from the Fed.
They will lay the ground work for exit but the timing will hinge on economic improvement or higher inflation expectations.

The statistics on export /import are released here on forex factory and like most of the other statistical releases ,i personally feel they are part of my secondary fundamental drivers ,most of these releases can be traded as news trading for 30 pips ,but generally i dont think they are trend changers.
But obviously if its a commodity currency like aud or cad you would want to know what gold and oil are up to because they are big exporters of these items.

I posted my main drivers ,but do you see from a few words from a fomc official that they prefer increasing interest rates before other measures .

Most know that doesnt mean in the short term ,but they way price dropped you would think it was going to be this afternoon lol.

In the background ,so far nothing has changed .
But you got to listen to these guys or you could lose a lot of pips ,I gave it every chance to pop up to 4300 but one comment fromm fed sent it tumbling for now .
I do find it strange that while eur/usd tumbled none of the indices really moved ,or oil .

Still cant see any reason not to push up through 4300 maybe during asia when am asleep they been doing that a lot recently.

I cant remember what article i read it in bug.
But theres something to do with the US wanting china to re value its currency ,The report mentioned that this would cause the value of the dollar to reduce for years.

I really feel for the citizens they dont fully realise that they can feel and touch a dollar the same as years ago but they are perhaps lucky if they are holding 20 cents in buying power .
When you got inflation and devaluing of dollar in other forms.
while cutbacks and deflation in your income ,your getting poorer twice as quick.

people trust there government by putting paper currency "safely" in a bank getting perhaps .02% interest ,not realising Inflation at 5% means they are paying 4.08% interest to the bank .
Meaning any savings ,pensions held in paper are making you poorer every day.
Its not as simple as this but you get the idea.

You dont have to own gold to save your savings ,anything in your savings account ,buy something physical.
Lol a jar of coffee will be worth more in 2 years than equivalent dollars.

eg jar coffee now $3.00
you dont have to be a top trader to know that $3.00 wont buy that jar of coffee in 2 years .
Check how much any consumable was worth couple years ago and project forward ,see what i mean .

Look at it like trading the dollar against anything in your shopping basket ,is the dollar stronger against any item ,meaning is anything cheaper .do a chart trade with the trend sell dollar buy anything lol.

Very nice thread. A good place to share. I will try to learn and share here.

Paul, Thanks for your lesson. I have some questions from your text.

1. Oil and USD move in an opposite direction? I see EUR and Oil move in the same direction? Any other factors to be concern?
2. Could you explain more why DOLLAR down--STOCKS up--COMMODOTIES down.?
3. Please explain more about crude dropped 2 days before EUR/USD drop?

Thanks.

http://www.businessspectator.com.au/...cument&src=hp3
Just see this news about stocks and commodities. So what correlation they have?