Today's Market Outlook

EURUSD

Bounced off 1.5285, 08 May low, to reach 1.5814/18 highs on 22/27 May, retracing over 61.8% of the 1.6020/1.5285 decline. Fresh weakness followed, with break below 1.5692 support, marking top. Losses so far reached 1.5461 on 30 May, ahead of recovery attempt, with gains being so far capped by 1.5569/68. If the later remains intact, this will mark lower top for fresh attempt towards 1.5461. Clearance of 1.5569, however, would confirm today's 1.5514 as a higher low, ahead of fresh push higher to target 1.5607/61 instead.

Res: 1.5569, 1.5589, 1.5607, 1.5661
Sup: 1.5514, 1.5486, 1.5461, 1.5448

GBPUSD

Has so far retraced over 61.8% of the 2.0024/1.9361 decline, as bounce off 1.9361 reached 1.9848/49 highs on 22/23 May. Choppy action with a slight downside bias was then see, reaching 1.9672/83 lows on 29/30 May before bouncing to 1.9823. Reversal from there cleared 1.9734/30 supports, completing a short-term top, with 1.9595 being reached so far. Further losses now seen towards 1.9585/54, possibly 1.9535/03 on a break.

Res: 1.9672/1.9683, 1.9708, 1.9745
Sup: 1.9585, 1.9554, 1.9540, 1.9503

USDJPY

Bounce from 102.73, 22 May higher low, has exceeded previous 02 May high at 105.70, reaching 105.87 on 29 May. Pullback is now under way, with loss of 105.24/12 suport zone, triggering fresh losses to 104.66 so far. Short-term bulls, however, remain in play, with higher low above 104.61/46 sought for fresh attempt higher. Regain of 105.24/52 needed to re-focus 105.70/87.

Res: 105.12, 105.24, 105.52, 105.54
Sup: 104.61, 104.46, 104.35, 103.89

USDCHF

Extended losses from 1.0625, 08 May recovery high, to reach 1.0216 on 23 May, ahead of recovery. Upside clearance of 1.0355 completed a short-term base, with gains reaching 1.0523/26 on 29/30 May, ahead of the latest retreat. Attempts to build a higher low at 1.0409 have failed, delaying hopes of a fresh rise to 1.0573/89 and warning of a return to 1.0365/55

Res: 1.0444, 1.0470, 1.0507, 1.0526
Sup: 1.0388, 1.0365, 1.0355, 1.0300

Windsor Brokers Ltd
http://www.windsorbrokers.biz

The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.

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