Wed, Dec 12 2012, 10:49 GMT

by Slobodan Drvenica | Windsor Brokers Ltd

GOLD Spot

Gold is poised for retest of previous high and double-Fibonacci barrier at 1717, 50% retracement of 1752/1684 and 38.2% expansion of wave from 1684, as fresh strength emerged from 1704, correction low, where ascending 20 day EMA contained pullback from 1717. With important 1700 support staying intact and 1/4h indicators in the positive territory, scope is seen for fresh extension higher, as initial barrier at 1714, yesterday’s high, has been cracked. Clearance of 1717, to open next significant barrier at 1722, 03 Dec high and Fib 50% expansion and confirm near-term base and double-bottom at 1684. Good support lies at 1705, reinforced by ascending 20 day EMA, while only loss of psychological 1700 level, would sideline bulls.

Res: 1717, 1722, 1726, 1731
Sup: 1710, 1702, 1702, 1700

SILVER Spot

Near-term structure remains fragile, despite price’s bounce from 32.75, yesterday’s low, break above 33.00, round figure / triangle resistance. Hourly studies are attempting at their midlines, with regain of 33.20, yesterday’s high, required to confirm recovery and shift near-term focus towards key barrier at 33.41, 10 Dec high and near 50% of downleg from 37.36 to 32.50. Upward aligned 4h studies, support the price action, with initial supports at 33.00/32.90, required to protect the downside.

Res: 33.20, 33.26, 33.41, 33.45
Sup: 33.00, 32.90, 32.75, 32.61

CRUDE OIL (Jan 13)

Near-term downtrend from 90.31, 03 Dec peak and channel resistance, remains intact, as the price posts series fresh lows, following break below channel support at 86.00. Immediate focus lies on psychological 85.00 support, loss of which to open way towards key support at 84.05, 07 Nov low. Bounce from yesterday’s fresh high at 85.20, could be described as corrective, despite hourly bulls are gaining pace and price returns above 86.00 handle., as long as 87.00/20, previous peaks and 38.2% of 90.31/85.20, stay intact. Only break here would delay immediate bears in favor of stronger recovery towards 87.75/88.00 zone.

Res: 86.34, 86.77, 87.00, 87.15
Sup: 86.00, 85.77, 85.32, 85.20

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

Technical Summary for Commodities

Wed, Dec 12 2012, 10:49 GMT

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FOREX : Foreign Exchange Market