FOREX-DD : Forex Daily Analysis: Forex Daily Analysis

USD still weakening, despite no data.

EURUSD made new highs at 1.4118 despite lack of interesting data. Carries higher on Friday, making new highs this morning.

Overnight News Bullets

FR Wages QoQ (2Q F) out at 0.6% as expected. Prior 0.6%.
E-Z Current Account (Jul) out at 1.7B vs. 3.5B expected. Prior at 7.3B (revised from 5.9B.)
E-Z PMI Manufacturing (Sep A) out at 53.2 vs. 53.9 expected. PMI Services out at 54 vs. 57.6. PMI Composite out at 54.5 vs. 56.9.
CA Retail Sales MoM (Jul) out at -0.8% vs. 0.0% expected. Prior at -1.1% (revised from -0.9%).
CA Retail Sales Autos MoM (Jul) out at -0.3% vs. 0.3% expected. Prior at -0.2% (revised from -0.3%.)
US Baker Hughes Rig Count out at 1769 vs. 1787 prior.
JN Fukuda named Japan’s ruling party leader, next prime minister.

O/N Data Heat map:

EU	US	JP	UK	SZ	AU	CA	NZ	NO	SE	FR
-						-

Calendar

Today's Highlights:

Time (GMT)	Region	Release	Consensus
08:30	UK	Public Finances PSNCR (AUG)	3.5B
08:30	UK	Public Sector Net Borrowing (AUG)	6.5B
09:00	EC	Industrial New Orders MoM/YoY (AUG)	-3.0% / 10.2%
23:50	JN	Corp. Service Price YoY (AUG)	1.6%

This and Next Week’s Highlights:

Date	Region	Release
25 Sep	JN	Supermarket sales
25 Sep	SW	Trade Balance, PPI
25 Sep	SZ	UBS Consumption Indicator
25 Sep	GE	IFO – Business Climate, IFO – Current Assessment
25 Sep	UK	Total Business Investment
25 Sep	US	S&P/CaseShiller Composite-20, S&PCaseShiller Home Price Index, Consumer Confidence, Richmond Fed Manufacturing Index, Existing Home Sales, ABC Consumer Confidence
25 Sep	NZ	Westpac NZ Consumer Confidence
26 Sep	GE	GfK Consumer Confidence Survey, IFO Sep. Business Climate
26 Sep	SW	Manufacturing Confidence, Economic Tendency Survey, Consumer Confidence
26 Sep	UK	GDP, Current Account,
26 Sep	SZ	KOF Swiss Leading Indicator
26 Sep	US	MBA Mortgage Applications
26 Sep	NO	Norwegian Deposit Rates
26 Sep	NZ	Building Permits, Current Account
26 Sep	US	Durable Goods Orders, Durables Ex. Transportation, DOE U.S. Crude Oil Inventories

What's going on?

USD still weakening. USDCAD trading below parity, but recent Canadian data has been quite disappointing.
Only important data today is the Euro-Zone Industrial New Orders. Could have some impact on DAX.

FX

Look for a break to the downside in GBPJPY

EUR	USD	JPY	GBP	CHF	AUD	CAD	NZD	NOK	SEK	PLN
+	-		-			+		+	+

FX Trading Strategies

Pair	Supp.	Resis.	Comments
GBPJPY	231.65	234.00	We have a short signal in GBPJPY this morning at 232.739….So we placed an order to sell at 232.79 stop offer, targeting 231.80 with a stop at 233.19 bid.

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FOREX : Foreign Exchange Market

FOREX is a word play on the term Foreign Exchange Market. It is a market for buying and selling of currencies from all over the world. Certainly, such transactions are bound to be voluminous. It is just an estimate that there are about transactions of $1.5 trillion USD on a daily basis in the FOREX. Now just compare this with the paltry $300 billion USD a day transactions for the US Treasury Bond and the $100 billion a day transactions for the US Stock Exchange.

The FOREX came into existence in 1971 when the fixed currency exchanges were abolished. Currencies no longer had fixed values after that; on the contrary, their rates (mostly taken in comparison with the USD) were fluctuating, and changed on a daily basis. Throughout the seventies and the eighties the FOREX grew steadily, showing more advancement in the later years. The market has stupendously grown from $70 billion USD a day to the staggering amount that it transacts today on a daily basis.

There are actually about five thousand trading institutions in the FOREX. These include international banks, central government banks such as the US Federal Reserve, and commercial companies and brokers for all types of foreign currency exchange. The best thing that shows the unbiased nature of the FOREX market is that it has no fixed headquarters anywhere – it operates primarily from all major cities like New York, Tokyo, London, Hong Kong, Singapore, Paris, Frankfurt, etc. One can even use the telephone or the internet to make the transactions. The major businesses at the FOREX are the buying and selling of products in other countries. Several transactions are also conducted from the currency brokers or traders who stand to make small profits with the daily fluctuations in the market.

Most of the FOREX business is centered on big banks and financial institutions, but it doesn’t mean that the FOREX is inaccessible to small investors. The recent changes in the financial regulations have effectuated this accessibility. Earlier, a minimum transaction size was required to conduct business with the FOREX. But the current rules have made it possible to break large inter-bank units into smaller bits. Each bit is worth as less as $100,000. This makes it possible to each individual investor through loans that are extended for trading, known as leverage. The ratio to control the lots is 100:1. This means, every $1000 USD will allow one to control $100,000 on the FOREX.

The benefits of trading with the FOREX are mentioned below:-

(1) Liquidity of Investments – As the FOREX is a huge market, the funds have a very high degree of liquidity. This is because of the presence of the international banks who provide their bids and carry out a large number of transactions on a daily basis. Therefore, there is always a buyer or seller for any type of currency.

(2) Highest Degree of Accessibility – The FOREX is open 24 hours a day for 5 days a week. Every Monday morning the exchange opens at Australian Standard Time and closes on Friday afternoon at New York time. Greater accessibility is provided because the transactions can be conducted from the person’s home or office.

(3) Open Market – At the FOREX, there are no secrets. All the fluctuations that occur in the market are made accessible to everyone at the same time. There is no insider trading in the FOREX.

(4) No Commission – There is no hassle of paying commission to the brokers in the FOREX. Here the brokers earn by setting up a difference between the buying price and the selling price of a currency, which is known as a spread.

It must be understood by now that for the FOREX to work effectively, the currencies must always be traded in pairs. For instance, the Japanese yen must be traded against the euro. When one kind of currency is sold, there should be another to be bought in its stead.

The profit happens because there is always mobility between the different currencies. Even if there is a miniscule change in the exchange rate, then it could mean substantial changes in the profits due to the large amount of money involved in the transactions. People are thronging to the FOREX and not any other institution due to the trust that they have in it. To add to the advantage, the market is absolutely well-advanced and uses sophisticated software for dealing out its transactions.

FOREX-DD : Forex Daily Analysis

Forex Daily Analysis - Monday, Sep 24th