Daily Forex Market Commentary
The dollar has a down day on Friday versus the European currencies, but only consolidated against the independent yen. I don't expect the start of a new direction on the first day of June, so consolidation should prevail.
Euro/dollar
Euro/dollar held above the support of the 60-day moving average at 1.5518 and rallied on Friday. The upmove failed to trigger a bullish reversal, so consolidation should rule today.
Immediate support now comes at 1.5495 and 1.5460. below 1.5415, distant support is seen at 1.5287 from a pivot low. Again, it's unlikley to dip that low.
The resistance at 1.5570 may hold on the day. If it doesn't, then look for a rally to as high as 1.5650. Distant resistance is perched at 1.5817.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Mixed to slightly bullish
LONG-TERM: Bullish
Dollar/yen
Dollar/yen incurred choppy trading around the poivot at 105.60 but closed virtually unchanged. Expect more consolidation here.
Initial support is pegged at 105.18. Below 104.60 there is distant support at 103.60. Don't expect to see it though.
Immediate resistance is at 105.60 from a 50-point pivot that targets 105.10 and 106.10. The next resistance remains at 106.30. A further spike up to 106.85 is unlikley today.
Oscillators are rising.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bearish
Sterling/dollar
By Friday, sterling/dollar has been alternating up and down days for seven days. If this silly pattern continues, then Monday should be a down day.
Support is first seen at 1.9770. Below 1.9685, cable retains support at 1.9615.
Initial resistance is at 1.9850. Above it, there is further resistance at 1.9880, 1.9910 and 1.9935. Distant resistance follows at 2.0005.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Dollar/Swiss franc
Dollar/Swiss fell on Friday after three consecutive days of gains after failing to surpass the 100-day moving average. Monday should see only consolidation.
Immediate support is seen at 1.0395. Below 1.0375 there is support at 1.0310. Distant support follows at 1.0215.
Initial resistance is pegged at 1.0460. A break above 1.0533 would signal a spike up to 1.0622, but this unlikely today.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Slightly bullish
LONG-TERM: Bearish
Cornelius Luca
Global Forex Trading
http://www.gftforex.com
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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.
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