Daily Forex News

February 1st, 5:00 am by Benzinga

We can pretend as much as we want that our current way of life is sustainable, but that doesn’t make it so. Even while I drive on the highway, I sometimes wonder, “If gas prices go up to $5 per gallon, how many fewer cars are there going to be on the highway?” I cannot speak for all Americans, but I know in the Midwest, oftentimes rush hour can be unbearable — that is when unemployment is relatively high. One has to wonder how much more crowded the highways would be if unemployment went down to around 4 percent.

These sentiments regarding gas prices extend to many sectors of the economy including (but not limited to) unemployment, higher education, the legal system, the prison system, health care, food consumption, developing technology, material goods, and labor. In addition to the aforementioned issues, the threats of war, societal unrest, climate change, and international terrorism make for quite an ominous global situation. One has to wonder if the problems are systemic. From a macrohistorical perspective, even political and economic leaders are seeing problems with the global economic system — in particular, the capitalist free-market model.

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January 31st, 10:17 pm by Sam

(eToro Blog) Wall Street is poised to end the last day in January in the Red. Wall Street indices were down after the Conference Board reported that its gauge of consumer confidence fell in January. The confidence index fell to 61.1 in January from 64.8 in December. Consumer confidence dropped as sentiment on business conditions and employment declined from the previous two months. In another report, the S&P Case Shiller index reported that home price index dropped 1.3%. For the year, the index measured a 3.7% drop in home prices. This confirms with the statements from Fed Chairman Ben Bernanke that the housing market remains week and continues to make it difficult for the Fed to rescue the economy.

With Wall Street looking to end the last day in the red, OpenBook trader joker811 has been very actively trading the indices. This traded started shorting the DJ30, NSDQ100 and SPX500 in the European session and booked profits on several trades including a massive 22% profit on a short SPX500 position. This trader focuses on trading in the indices and EURUSD. The trader is up 15% so far this week primarily because of their wins in trading indices.

Wall Street was slumped in the red today with the Dow down 61 points, the Nasdaq down 9 points and the S&P 500 down 4 points at the time of writing this report. While European indices ended in the positive today on progress made at the EU summit, Wall Street reacted negatively to declining confidence and home prices. Traders on OpenBook are primarily short the Dow (DJ30) with average limits at 12,450 and stops at 12,750.

OpenBook trader qur1024 is another trader who has been mixing up his currency trading with indices. This trader too focuses on the EURUSD but also watches the SPX500. The trader allocates 18% of their portfolio to SPX500 and booked several profitable trades in the past several days as high as 20.83%.

Another OpenBook trader who benefited from the EURSUD drop today is trader Zapdos. This trader shorted the EURUSD near 1.3176 and closed it near 1.3123 for a 212% gain. This trader has closed other EURUSD trades as well this morning with gains ranging from 8% to 28%. In addition the trader is holding short positions on SPX500 with floating profits of 17% and 21% respectively.

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January 31st, 5:00 am by Benzinga

On Monday, the yield on the 5-year Portuguese note spiked. The yield hit a record for the post-euro era of 22.69%. The trade may have been fueled by the turn of events in Greece. The general perception of the market may be to accept Greece’s default as a given.

Last year, markets appeared frightened by the prospect of a Greek default, but various commentators have begun to talk-down the event. Perhaps most interesting was JP Morgan Chase’s (NYSE: JPM) CEO Jamie Dimon characterizing the net effect of a Greek default on US financials as being practically nothing.

Greece’s overall debt is a relatively paltry sum when seen from a global perspective. Still, the turn of events in Portugal may have given credence to what market bears have been warning of: a contagion effect.

There had been plans for a deal to allow Greece to take a “voluntary” haircut of 50%.

Yet, some creditors resisted the deal (perhaps hoping to use credit default swaps to profit—these instruments wouldn’t payout in the event of the default being voluntary) and there was talk that Greece would need to increase the haircut further to better get the growth rate of its debt under control.

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January 30th, 8:16 pm by Sam

(eToro Blog) The EU summit and Greek debt negotiations filled Wall Street with worries and the Dow is down 85 points, the Nasdaq is down 10 points and the S&P 500 is down 9 points at the time of writing this report. Traders on Open Book are primarily short on the Dow (DJ30) with average limits at 12,450 and stops at 12,750.

OpenBook trader Pumpingstein has already started their trading week with a bang. This trader shorted the DJ30 in two stages. The trader first shorted the DJ30 around 12,604 and booked some profits as the DJ30 fell towards 12,554. Then the trade entered his second short leg at 12,560 and closed that trade at 12,536. This strategy netted the trader 22% and 10% respectively. The trade has opened a third short position at 12,540 and is waiting for their target at 12,426. With the mood firmly bearish on Wall Street, this trader might be able to close out all three DJ30 positions at a profit today. This trader is up 43.9% in the month of January.

The latest economic report from the U.S. showed that personal incomes rose 0.5% in the month of December but that did not translate into more spending. In fact personal spending fell by 0.1%. In a signal that much better things lie ahead for the economy, disposable income rose 0.3%. Inflation rose 0.1% in December as measured by the PCE index. For 2011, inflation measured at 2.4%. The Federal Reserve for the first time set an inflation target at 2% at its policy meeting last week. Federal Reserve official Plosser in his comments today said that he differs on the Fed outlook on the economy. He is more optimistic on the economy than the Fed and expects GDP in 2012 and 2013 be around 3%.

OpenBook trader drangie who we have been following closely was successful today as she traded several profitable positions on the SPX500. This trader who trades the SPX500 primarily in the pre-U.S. session closed several positions in profit by shorting the SPX500 near 1,308 and waiting for her profit targets to hit. This trader usually trades the SPX500 with tight profit targets and has been successful in both buy and sell direction. The trader focuses on trading the SPX500 on her own and copies top trader Hschinner to get exposure to the EURUSD.

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January 29th, 12:36 pm by David Becker

(eToro Blog) US markets edged higher during the past week, as headlines in Europe were offset by robust earnings and mixed economic data.  The technical breakouts on the major indexes, along with upward pointing momentum were met with weekend profit taking.

On Open book, positioning was mixed with slightly more buyers than sellers on the S&P 500 and the Nasdaq 100.  Guru trader Anugia, who is up almost 3% for the week and 1270.8% over the past three months, closed his open positions on the S&P 500 Index and the Nasdaq prior to the Federal Reserve decision on interest rates.

This trader has a portfolio that is comprised of 66.9% US indexes, and currently 123 traders who are copying his trades.  This all-star also dedicates most of his time toward trading equity indexes with nearly 31.3% of his portfolio focusing on European indexes.  With a stellar track record, Anugia is one of the “go to guys” to follow as far as equity index traders are concerned.

Petra09, a Spanish trader, used the upward momentum of the US markets to trade from the long side and reap solid gains.  During the past 3 months this index trader is up more than 52%.  Mid week he closed a buy position on the Dow Industrials gaining 8.3%.  This trader also focuses on the US index markets and has shown robust returns over the past few months as his concentration has leaned toward equity indexes as his trading instrument of choice.

In corporate news, Apple released earnings to much fan fare.  The large tech titan beat expectations handily, selling more than 37 million iPhones.

As for monetary policy, the Federal Reserve surprised market participants by changing the data to which it believes interest rates will remain at or close to zero percent.  The FOMC announced that rates will remain at current levels to a least the end of 2014.  In prior statements, the central bank had promised to keep Federal Funds rates near zero to the middle of 2013.

With the MACD (moving average convergence divergence indicator) showing increasing momentum, for both the Nasdaq and the S&P 500, and recent resistance giving way, traders like Petra09, who are looking to benefit from upward movements should continue to benefit from strong Wall Street sentiment, provided news out of Europe does not sabotage investors confidence.

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January 27th, 7:59 pm by Sam

(eToro Blog) Wall Street declined today on the lower than expected print of the fourth quarter GDP. The U.S. economy grew at 2.8% in Q4 2011, lower than the analyst expectations of growth of 3.0%. Consumer spending rose 2%, up from 1.7% in the previous quarter. However government spending fell with a 12.5% drop in defense. Exports grew by 4.7% and imports rose 4.4%. The rise in imports negated the effect of rising exports on the GDP. In a separate report the University of Michigan consumer report showed that consumer confidence rose to 75.0 in January, the fifth straight month of gains. The Dow is down 73 points, the Nasdaq is up 2 points and the S&P 500 is down 4 points at the time of writing this report. Traders on OpenBook are primarily long the SPX500 with average limits at 1,330 and stops at 1,300. OpenBook trader drangie was busy scalping on both sides of the SPX500 this morning. The trader looked for opportunities to buy the SPX500 as it approached 1,314 and sell as it approached 1,322. This strategy netted the trader a total of 30% in gains today.

OpenBook trader pyruss was closely watching the markets today and advising his followers and copiers. This trader who has 392 copiers on OpenBook started trading the EURUSD in the European session with several shorts on the EURUSD near 1.3100. However once the EURUSD broke above 1.3125, the trader placed several buy trades with profit targets near 1.3170. The trader believes the next EURUSD resistance lies at 1.3240. Pyruss continues to be a EURUSD bull and believes that the EURUSD will move lower on profit taking for now. Fundamentally, pyruss believes that the EURUSD will move higher as Greece is close to reaching an agreement with private bond holders.

OpenBook trader RoncinCorp was long the EURUSD today, however this trader closed most of his long positions before the U.S. GDP report. The trader started buying EURUSD in the European session as the pair crossed above 1.3100. This trader booked several profitable trades between 7.25% and 39%. This trader returned an impressive 629% this week; however this trader utilizes high risk in 41% of his trades.

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January 27th, 7:03 pm by Barbara Zigah

(eToro Blog) The U.S. Bureau of Economic Analysis on behalf of the U.S. Commerce Department reported that the U.S. economy grew 2.8% in the last quarter of 2011, an improvement over the previous quarter’s lackluster growth of 1.8% but falling short of the consensus estimate of 3.0% growth. According to the reading, which was the first of several, it can be primarily attributed to increased consumer spending and higher production from U.S. businesses. Consumer spending rose to 2%, up from 1.7% in the third quarter, but like the GDP data, fell short of analysts’ expectations of 2.4% growth.

Markets as much as expected that the results would come in as they did, especially given the recent release of growth forecasts from the individual Federal Reserve board members who foresee only moderate and modest growth. Indeed, the official statement from the Federal Open Market Committee cautioned that global financial market strains would continue to present significant downside risks. Chairman Bernanke suggested that additional QE might be made available if the recovery appeared to be faltering.

Shortly after the announcement the EUR/USD was trading at 1.3113, but as of this writing resumed its upward momentum and is approaching 1.3138, rising back toward the day’s high of 1.3159. On the OpenBook, trader yeshie turned a profit on his four open shorts, with the most recently closed providing him with a 76% return.

OpenBook guru pyruss is sitting on several long positions which he bought at the dip earlier, one of which is already showing a gain. Guru pyruss believes that the Euro-Dollar will cap 1.3145 at the upside but he will no doubt be watching this rebound closely.

One of OpenBook’s top traders, who prefers not to be considered a Euro bear, may have reconsidered his strategy as he said he would earlier in the week if the 1.30 level held which it clearly has. Yesterday, guru pawelskrzypek took a hit on several shorts that he closed out, and he has since opened several long positions in the pair.

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January 27th, 5:00 am by Benzinga

On Wednesday, the Federal Reserve did something historic: they released guidance.

In the Fed’s January statement, the FOMC kept rates at 0.25%—a move that was widely anticipated. In August of 2011, the Fed announced that it would keep rates near zero until mid 2013. The Fed revised that on Wednesday, pushing the date out until 2014.

Yet, what may have been more interesting to investors was the Fed’s guidance for future policy.

The Fed revised its outlook for future US growth lower, dropping its expectations for GDP growth to 2.8-3.2%. The Fed had seen growth of 3-3.5% previously.

The Fed forecast the inflation rate at 1.5-2% for 2012.

For employment, the Fed believed that the jobless rate would come down, although at a slower pace. The Fed expected unemployment to decline to 6.7-7.6% in 2014.

In his subsequent press conference, Chairman Ben Bernanke stated that, while unemployment targeting was largely impossible, the Fed could get a sense for what the natural rate of unemployment was, and could then use policy to go from there. Bernanke stated that the current rate of unemployment was unnaturally high and that there remained room for the Fed to continue to address the problem of unemployment.

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January 26th, 9:48 pm by Sam

(eToro Blog) OpenBook trader waleed0987 has earned praise from his copiers this week for his profitable strategies that use low risk. The trader has traded both long and short EURUSD positions this week with gains as high as 11%. The pair traded in a range between 1.2950 and 1.3040 earlier in the week creating good opportunities for scalpers such as waleed0987. OpenBook trader waleed0987 also took advantage of the swings on the AUDUSD booking gains as high as 7%. The trader is an Aussie bear primarily and has built up some long term positions on the pair. Looking at his open exposure, the trader expects AUDUSD to target 1.0430. Looking at this trader’s P&L graph, we can see that the trade made consistent profits until end of December, when he hit resistance near the 1000% return. The trader’s equity curve hit support near 637% but is now heading higher towards 803%. waleed0987 has returned good results for himself and his 1440 copiers on OpenBook.

OpenBook trader pawelskrzypek is a EURUSD bear despite the 250 pip rally this week. This trader looks for opportunities to short the EURUSD. The trader is devoted to trading the EURUSD only in his portfolio. The trader uses low risk in his strategies and has returned over 123% in the last twelve months. This trader has 643 copiers on OpenBook and has worked on building a solid track record over the last twelve months. Looking at this trader’s P&L graph, we see the equity curve in an uptrend, making higher highs every month. The trader broke through the 100% mark in December and there is no turning back. This week the trade shorted the EURUSD whenever the pair stalled at key resistance levels. As the EURUSD rallied higher this week on positive sentiment, the trader opened several short positions near 1.3155 and is targeting for the EURUSD to fall back towards 1.3090.

We had several Central Bank rate decisions this week. The U.S. Federal Reserve announced that it would keep rates low until late 2014. The Fed also adopted a formal inflation target of 2% for the first time. Fed Chairman Ben Bernanke said that recovery remains fragile with the labor market showing signs of improvement. The Fed also released the policy forecasts of its policy makers in an effort to provide better guidance to the markets. Traders on OpenBook are primarily long on EURUSD with average limits at 1.3200 and stops at 1.2950.

The Bank of Japan announced this week that rates would be kept on hold near zero until price stability is reached. The bank also did not increase the size of its asset purchase program. The BOJ lowered growth outlook in the first quarter of 2012 to -0.3%. For 2013, the BOJ raised GDP estimates to 1.4%. The Bank said that sovereign debt crisis in Europe and the strong Yen were hampering economic recovery and making it difficult for Japan’s exporters to compete in the global markets. Traders on OpenBook are primarily long on USDJPY with average limits at 78.50 and stops at 76.60.

The Reserve Bank of New Zealand announced that it was keeping rates on hold at 2.5%. RBNZ Governor Alan Bollard said that rates would stay at record low levels longer than earlier anticipated as inflation moderated amid global financial uncertainty. Bollard has not cut rates unlike Australia has he expects reconstruction efforts in Christchurch to fuel domestic growth. The slowdown in Europe is affecting China and Australia, which happen to be New Zealand’s largest trading partners. Traders on OpenBook are primarily short on NZDUSD with average limits at 0.8000 and stops at 0.8250.

OpenBook trader Elvanduil has been trading NZDUSD on both sides of the market for the last twenty four hours.  This trader has allocated 33.6% of their portfolio to trading this pair and is a fairly short term trader, scalping for few pips a time. The trader has closed over a dozen profitable positions on the NZDUSD this week with profits as high as 8%. Looking at this trader’s open exposure we see that the trader expects NZDUSD to target 0.8100. OpenBook trader robepu is a long term bear on the NZDUSD. This trader who has 353 copiers on OpenBook expects the NZDUSD to go further lower towards 0.8000. Robepu has done well this week returning 58% in gains.

Euro finance ministers met this week in an effort to adopt fiscal policies that would require member countries to limit deficits to 0.5% of GDP in the future. The ECB and finance ministers were split on how to implement penalties on countries that failed to meet objectives. Talks between private Greek bond holders and government representatives failed to produce any solid results. Creditors agreed to take as high as 70% losses on the debt but disagreements rose over the interest rate payments. A new deadline has been set in February for both sides to come to an agreement.

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