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Tuesday, 09 November 2010 12:30

GBP/USD:The market has been holding above 1.6000 barriers

Contributed By: DailyFx


GBP/USD:The market has been holding above 1.6000 barriers over the past few days, and has most recently pushed beyond 1.6100. This could open the door for additional upside over the coming days, with the 1.6500 figure standing out as the next major resistance point. However, there is some short-term support by 1.6075, and a close back below this level will take the pressure off of the topside.

Published in Forex News
Tuesday, 09 November 2010 12:30

NZD/USD: multi-month gains stalling out just shy of critical psychological barriers

Contributed By: DailyFx


NZD/USD:We are finally starting to see some form of a top, with the multi-month gains stalling out just shy of critical psychological barriers by 0.8000 and reversing course. From here, there is plenty of room for additional weakness and we see scope for additional declines back towards previous resistance now turned support by 0.7650 over the coming sessions. Intraday rallies should be well capped ahead of 0.7900.

Published in Forex News
Tuesday, 09 November 2010 12:31

USD/CAD: Price action on Monday looks encouraging

Contributed By: DailyFx

USD/CAD:While we retain a medium-term and longer-term bullish outlook, rallies remain well capped for now, with the market once again dropping back to parity. However, despite the weakness, we recommend buying on dips into the major psychological barrier with the market expected to be very well supported by the figure. Ultimately, only a close back below 0.9970 would give reason for concern, while a break and close back above 1.0160 will relieve downside pressures. Price action on Monday looks encouraging and could act as a trigger for renewed upside.

Published in Forex News
Tuesday, 09 November 2010 09:36

UFXBank Forex Outlook: Dollar Continues to Advance

USD Dollar (USD) – The Dollar continues to advance versus the other major currencies in Forex trading, after Friday’s better than expected U.S. jobs data eased pressure on the Dollar in the wake of the Federal Reserve’s asset purchase plan announcement. The NASDAQ fluctuated around zero and the Dow Jones decreased by 0.33%. Crude oil strengthened by 0.2%, closing at $ 87.06 a barrel, the highest price in two years. Gold (XAU) rose by 0.4%, closing at $1403.20 an ounce, a new historic record. No major news is expected today.

Euro (EUR) – The Euro fell for a second day versus the Dollar amid concern that some governments in the region will struggle to pay their debt, curbing demand for European assets. The EUR/USD has broken the 1.4000 level and has been trading below it since yesterday. As long as the price is below this level, a short position is preferred. Overall, EUR/USD traded with a low of 1.3887 and with a high of 1.4085. Today, German Final CPI is expected to remain at 0.1%.

EUR/USD – Last: 1.3861







British Pound (GBP) – The Pound was down against the Dollar, falling to a 2 day low as the Dollar recovered ground on the back of Friday’s data .The main momentum of the GBP/USD is absolutely bullish, although it has fallen in the last two days. As long the price is trading above 1.6080 level and above the 10 moving average, a long position is preferred. Overall, GBP/USD traded with a low of 1.6104 and with a high of 1.6213. Today, Manufacturing Production is expected to remain at 0.30%, trade balance is expected at - 7.90B vs. -8.20B prior.

GBP/USD - Last: 1.6131









Japanese Yen (JPY) –The Yen fluctuated against the Dollar after the Bank of Japan said that there were signs of a moderate recovery in Japan’s economy which led investors to prefer the Japanese stock market. The USD/JPY continues to trade around the 80.00-81.00 area. The main support line on the daily chart is still located at 80.00, and the momentum is still bearish as long it‘s trading below the 82.00 level. Overall, USD/JPY traded with a low of 81.00 and with a high of 81.43. No economic data expected today.

USD/JPY-Last: 80.93








Canadian dollar (CAD) – The Canadian Dollar weakened versus the Dollar as the Dollar rallied against most major currencies on reduced demand for assets related to economic growth. The Canadian housing starts fell more than expected (168K vs. 181K), which supported a weaker Canadian dollar. The support level of the USD/CAD on the four hour chart is located at 0.9980, and if the USD/CAD breaks below this level, a short position is preferred and the momentum continues to be positive for the Canadian Dollar. Overall, USD/CAD traded with a low of 0.9994 and with a high of 1.0055. Today, BOC Gov Carney Speaks.

USD/CAD - Last: 1.0042











Published in Forex Articles
Tuesday, 09 November 2010 09:11

USD/CHF: any setbacks should be very well supported

Contributed By: DailyFx

USD/CHF: We contend that the market is in the process of carving a material base by 0.9460, and any setbacks should be very well supported ahead of 0.9500 in favor of a sustained recovery. The market should in fact hold above the 0.9580 area on a close basis which represents a 78.6% fib retracement off of the latest move. Ultimately only back below 0.9460 would negate and give reason for pause. Look for a break and close back above 0.9740 to confirm and accelerate.

Published in Forex News

Contributed By: DailyFx


USD/JPY:While we like the idea of the market establishing a major base by current levels over the medium and longer-term, short-term price action has still not confirmed any signs of a bottom, with the price action over the past few days more characteristic of a bearish consolidation ahead of the next drop towards the record lows. Ultimately, a close back above 82.00 will now be required to relieve downside pressures. However, we will be on the lookout for an opportunity to buy on dips below the 79.75 record lows.

Published in Forex News
Monday, 08 November 2010 06:53

Crude Ripe for a Reversal

Contributed By: DailyFx


Crude’s 5th wave has finally burst on to the scene and price has reached 8650 (former support and resistance this year), which should provoke a reaction. I do expect this rally to reverse and for the larger decline to resume in a C wave lower. Additional strength would find resistance at 8880 (78.6% retracement).

Published in Forex News
Monday, 08 November 2010 06:52

Gold Testing 1400

Contributed By: DailyFx


A long hanging man candle on Friday combined with RSI divergence on the daily warns of a reversal but price needs to break Friday’s low in order to confirm. 1400 may prove to be a psychological barrier as well.

Published in Forex News

Contributed By: DailyFx

Commodities – Energy
Crude Oil Digests Recent Gains Near 25-Month Highs
Crude Oil (WTI) - $86.92 // $0.07 // 0.08%

Commentary: Crude oil is close to unchanged as prices consolidate following five straight days of gains last week. After rising 6.7% last week, prices hit a new 25-month high in overnight trade, but so far crude has been unable to decisively break the May highs near $87.15, which is the top of a 13-month range. The U.S. nonfarm payrolls numbers we got last week were unequivocally bullish, and just add to an already bullish picture for the global economy. It is probable that crude oil continues higher in the coming weeks to levels over $90 as demand continues to increase.

This coming week’s economic calendar looks to be extremely light, which is in sharp contrast to last week’s excitement amid the Fed, ECB, BOE, and BOJ policy decisions and the U.S. jobs report. This probably means that the bias of markets will likely remain to the upside given all the positive developments of last week. On the other hand, equities and commodities are extremely overbought and ripe for profit taking. The most likely outcome is that markets end this week fairly flat as recent gains are digested.

Technical Outlook: Prices have put in a bearish Shooting Star candlestick formation below resistance at $87.15, the major swing top set in May that – until last week – served as the 2010 yearly high. Negative RSI divergence continues to point toward a pullback, with a reversal lower initially targeting resistance-turned-support at $84.43, the 10/07 wick high.


Commodities – Metals

Gold Tries to Hold on Despite Dollar Strength

Gold - $1388.10 // $5.55 // 0.40%

Commentary: Gold is down just slightly as the metal is hit with the same profit taking considerations that are affecting crude. Recall that gold rocketed to new all-time highs just under $1400 last week in large part due a sinking U.S. Dollar. But the most interesting action was on Friday when gold continued to hold gains and even finished a bit higher despite a notable 0.88% recovery in the dollar. Perhaps gold traders are considering the one day move in the dollar as just a corrective bound in a strong downtrend.

But if the dollar’s recovery turns out to have legs, we’ll likely see gold begin to move lower, for as we have been pointing out in our Gold – Forex Correlations report, the strong inverse relationship between gold and the dollar very much remains intact:

“Over the past week, we saw the trade-weighted dollar index decline four of five days, while gold advanced three of five days. Incidentally, after the Federal Reserve policy decision on Wednesday, it looked as if the gold-dollar correlation was about to break down. And it did for a brief moment as a swath of gold traders “sold on the news”—gold was down $32 at one point while the dollar also sold off. But that breakdown proved to be ephemeral as gold sharply rebounded by the end of the session to finish lower by only $9. The next day on Thursday, the dollar continued to sell off to new lows for the year, while gold surged a stunning $44 to hit a new record high.” Read more in the latest Gold-Forex Correlations report.

Technical Outlook: Gold prices have put in a bearish Doji candlestick below resistance at the psychologically significant $1400 figure, hinting a pullback may be forthcoming. Initial support lines up in the $1364.77-$1381.00 region.

Silver - $26.69 // $0.05 // 0.20%

Commentary: Silver is flat after rallying $2, or 8% last week. Prices are hitting at new 30-year highs and show no signs of slowing down. Prices continue to benefit from a long-awaited contraction in the ratio between gold and silver prices. Indeed, even with the recent outperformance of silver relative to gold, the ratio between the two metals is only at the lowest since 2008.

The gold/silver stands at 52, the lowest level since August 2008. (The ratio measures the relative performance of gold and silver. A higher ratio indicates gold outperformance, while a lower ratio indicates silver outperformance).

Technical Outlook: Prices have taken out support at the top of a rising channel set from late August to pause ahead of the $27.00 figure, a psychological boundary reinforced by the 200% Fibonacci extension of the 10/14-10/22 downswing. Negative RSI divergence hints that (at least) a corrective pullback may be next. The first layer of significant support lines up at the $25.00 figure.


Published in Forex News
Monday, 08 November 2010 06:52

EURUSD Extends Friday's Losses Amid Debt Concerns

Contributed By: DailyFx

Fundamental Headlines

• Europe’s Markets Edge Lower – Wall Street Journal

• Debt Concerns Hit Euro – Wall Street Journal

• Obama Defends QE2 Ahead of G20 - Financial Times

• Irish Fight To End Bond “Buyers Strike” as EU Examines Budget- Bloomberg

•IG-20 Spat Risk Eases as U.S. Eschews Pushing Targets - Bloomberg

EURUSD: Investor Confidence in the 16 member euro area topped expectations as figures rose to 14.0B in September from a revised 5.0B the month prior, reaching a three-year high. Despite today’s advance, confidence will likely scale back in the coming months as governments implement tough austerity measures to battle their high debt. Meanwhile, the trade balance in Germany widened to 16.8Bin September from 9.0B in August as exports jumped 3.0 percent, while imports contracted 1.5 percent. Not to overlook, industrial production in Germany missed expectations during the same month and entered negative territory for the third time this year. Going forward, Portugal is expected to hold its last bond auction on November 10th, which is expected to cover the rest of this year’s funding needs (of which I expect the ECB to purchase these bonds). Taking a look at the currency markets, the euro is down against all major currencies expect for the New Zealand dollar amid concerns regarding Ireland’s budget deficit. Of particular note is the EURUSD which has extended Friday’s losses to reach an intraday low of 1.38907. Downside risks towards 1.38 remain as the MACD has yet to reverse course.

Published in Forex News
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