Tag Archives: economic indicators

Chart of the Day: GBP/USD

Happy Friday all! And what an interesting week it has been, hasn’t it?

I must admit that the erratic movements in the markets have had me a little on edge. Which way to go? Am I making the right decisions? It’s been a mixed bag of results to tell you the truth. In a prolonged rolling market, leaving trades unmonitored is not the wisest decision. You have to be literally implanted in your chair, eyes glued to the computer screen to avoid getting yourself into a precarious situation.

Anyway, I will keep this post as short and pain-free as possible! 😉

Let’s take a look at the chart for GBP/USD:

gbpusd 6.26.09

Over the course of the past day,  around 7am PST yesterday til now, the pair has moved nearly 300 pips to the upside.  It has made the most significant moves of practically all the other pairs but if you look at the entire chart, it is basically rendered trendless/rolling. We have been trendless since the beginning of June and will have to wait for a significant breakout or breakdown to be back on track again. In my opinion, a break to the downside may be the most plausible. The pair has already hit its highest point three times during this month, the highest it has been since Oct. 30th, 2008….8 months ago! So, like I said, a breakdown most likely will be coming and we should keep an eye out for that.

We are 3 trading days away from the end of the month and no real critical data will be out until mid-next week.

USD: ISM Manufacturing PMI

USD: Unemployment Rate

USD: Pending Home Sales

USD: Consumer Confidence

EUR: Interest Rate Decision

JPY: Tankan Manufacturing Index

CAD: GDP

AUD: Retail Sales

AUD: Trade Balance

GBP: Manufacturing PMI

Just a few important data releases to be aware of.

Hope everyone enjoys the weekend! Until next week…! 😀

Forexgal_1.

Daily Picks Update: USD/JPY

Hello readers! 🙂 Hope you’re all having a great day.

Yesterday, I posted my daily pick which was USD/JPY and I wanted to give you guys an update on what happened with my trade. As mentioned in my previous post, I was -30 pips as I was writing the blog entry. My expectations were that USD/JPY would continue its move to the upside. Japan was due to release some very important data at 4:50pm PST and it was widely expected that the news would be negative therefore, movement in the markets was imminent. Unfortunately, the move we were looking for was short-lived. Immediately after the news was released, there was an increased move upwards and my account did go positive by about 35 pips only to completely retrace within 5 mins. Within an hour’s time, the pair changed sentiment and began to sell-off. It was quite shocking and I wasn’t the only one blindsided by the dramatic change of events. How did USD/JPY go from being a buy to sell within 5 mins when all signs(Japan’s declining manufacturing sector) pointed to a continued move to the upside? Apparently, there were rumors spreading about President Obama allowing Chrysler to go bankrupt(which turned out to be unfounded) and this shook the FX markets to its core, causing USD/JPY to sell off. Look at the chart below:

usdjpy-4109

The arrow points to the 5pm candle, where the sell-off began. After 6pm, the trend turned into one of consolidation and USD/JPY has not recovered since. The change in sentiment was quite unexpected, as I explained before, which was due to the rumor of the folding of one of America’s major car companies. This experience, I hope will serve as a learning lesson not only for myself but any trader out there. Trends can change at the drop of a dime, due to unforseen influences. Fundamental and technical analysis is imperative to trading Forex but neither one is foolproof. Anything can happen in FX but with proper analysis and timing, you will be successful, hopefully, at least 80% of the time. In this case, I did my analysis and with the news coming out that was forecasted as being negative, I was sure that the trade would work out in my favor but out of the blue, speculation came into play and threw the equilibrium of the market off. Nothing is set in stone, we should all remember that. And we will lose sometimes, it’s keeping the losses to a minimum that’s important.

Keep abreast of news from the G20 London Summit which will be in meetings all day tomorrow. It could move the markets, who knows? Also, the ECB President will be speaking tomorrow, EUR interest rate will be determined, and USD unemployment claims data will be released.

Forexgal_1.

Forex NewsBeat

Today, there were a few economic data reports that were released.

Some of the highlights include:

USD:  Building permits dropped by 4.8 % in the month of January to 521,000 units, down from 547,000 units the previous month.

Housing starts plummeted to a 50-year low, down from 560,000 units to 470,000 units.

Knowing this information is quite important because it can help predict what will happen not only in the Forex markets but also the real estate/housing markets. Based on the positive or negative news that are reported, I could, for example, be able to forsee when the real estate market may start picking up again. Knowledge is power, learning as much as you can about economic data helps tremendously in making sound investment decisions.

Forexgal_1.

Forex NewsBeat: Economic Data

When trading Forex, there are a few very important aspects that must be considered before executing a trade. One criterion is the analysis of economic data, also known as fundamental analysis. Keeping abreast of the economic news is necessary as in Forex, you are trading on the expectation that a country’s currency may rise or fall due to how robust that country’s economy is. Several important indicators to keep track of include: employment, real estate/housing markets, manufacturing production(which also includes auto manufacturing output), trade balance, FOMC rate decisions. There are many others that do have an impact(some minimal in comparison to others) but the ones previously mentioned take somewhat of a precedence above the rest. These indicators drive the foreign exchange(Forex) markets significantly. When you know what is going on in the economy, you can, for instance, predict when the real estate market will begin to recover. Understanding and recognizing the boom and bust cycles can be critical pieces of information when it comes to investing not only in real estate, but also the stock market.

Highlights from today’s economic news:

U.S. unemployment rate soars to a 26-year high(previous high dates back to October 1982) in January to 7.6 percent. Approximately 598, 000 jobs were lost last month, a 35-year high, the 5th highest loss in recorded history.

U.K. manufacturing production fell for the 10th month straight, 2.2 percent from November, the worst in nearly 30 years. Yesterday, the Bank of England(BoE) cut its benchmark interest rate to 1%, down 50 basis points from 1.50% from last month.

Canada’s economy loses 129,000 jobs in January, greatest loss in over 30 years. The country’s unemployment rate rose by 0.6 percent to 7.2%.

My thoughts: As you can tell, the outlook does not look very promising on the whole. Unemployment rates are climbing dramatically by the month, homes are foreclosing left and right, businesses are shutting their doors, and the banks and stock markets are in turmoil. Here in the U.S., we’re looking forward to the stimulus bill to be passed as soon as possible so we can begin rebuilding our economic infrastructure. Now, we’re just waiting, time will tell but let’s not despair(even though it’s pretty hard not to in this deepening global crisis). Easier said than done, I know.

Hope you all have a good weekend, economic disheartenment aside. 🙂

Forexgal_1.