Daily Forex News

January 26th, 5:00 am by Benzinga

Over the last two weeks, Greece has been deliberating with private investors to develop a bailout package that may save the country and its people. To the dismay of many investors, Greece has yet to finalize the deal despite claiming that it would do so quickly. Investors should not be surprised, but should mobilize themselves to be ready for anything.

Greece has had a rocky history in its fundraising efforts. In 2011, when a bailout package was agreed upon by the country as well as certain allies, Greek Prime Minister George Papandreou decided to not pass the bailout package himself. Rather, he decided to hold a referendum. Attempting to pass an important measure via popular election may or may not be detrimental for the nation’s well-being.

Papandreou’s decision was disheartening for many investors, evidenced by significant downturns across global markets. Almost like an identical echo, the lack of clarity in Greece’s current deal is making global investors nervous. Ultimately, investors want to know what to do to protext themselves from volatility.

Let’s face it, one day, the Dow swings up 2%, and the next, it swings down 2%. Unless you are a professional trader and have been doing this for years, it can be very difficult to trade the swings associated with the news. In fact, many professional traders cannot even keep up with the madness themselves!

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January 25th, 10:01 pm by Sam

(eToro Blog) Ahead of the Fed Rate decision, OpenBook trader pyruss has closed several positions on the EURUSD. The trader has been scalping during the European session and looks for opportunity to sell the EURUSD as it approaches 1.3000 and buy the EURUSD when it approaches 1.2950. This technical trader believes that the EURUSD is giving bearish signals in the short term. He keeps an eye on fundamental news as well as European stock markets when making trading decisions on the EURUSD. This trader who has 380 copiers on OpenBook is heading into the Fed rate decision with several short EURUSD trades with entry price from 1.2700 to 1.2900. If the U.S. Dollar gets stronger after the Fed press conference, this trader and his 380 copiers will be in a good position.

As it was, the Fed announced no changes to interest rate policy and said in fact that they would hold interest rates at their historic low levels beyond the originally anticipated mid-2013, now until 2014. The Euro-Dollar rallied on the news and is, as of this writing, trading at 1.3092.

OpenBook guru NMarijus, who’s every word and trade is analyzed in detail by his followers and copiers, is a EUR/USD bear, as well. This trader is expecting volatility from the FOMC rate decision and has several EUR/USD short position exposures ahead of the rate decision and is targeting the EUR/USD to reach as low as 1.2725. He, too, would have benefited from a bullish U.S. Dollar.

OpenBook trader Gavinwright has been buying Gold ahead of the Fed rate decision. This trader, who has 105 copiers, expects the U.S. Dollar to get weaker and Gold to get stronger after the press conference. He has closed several long Gold positions already and has left some long EUR/USD and long Gold positions open before the Fed press conference. The trader has since closed out many of his open longs to varying gains, ranging from 0.75% to as much as 8.0%.

Movement on Wall Street is fairly muted ahead of the conference. The Dow is down 42 points, the Nasdaq is up 17 points and the S&P 500 is down 1 point at the time of writing this report. The Pending home sales report showed that there was a drop of 3.5% in December. The pending home sales index dropped to 96.6, which is still above the December 2010 levels. Economists say that housing markets still remain strong due to the progress made in the last few months of the year. While the Fed did keep rates on hold as expected, it was the Fed’s new communication protocol that is attracting attention from traders and investors. The Fed has said that they will publish forecasts from policy makers for the first time in an effort to provide better guidance to financial markets. The Fed also has new voting members as part of its yearly shuffle. Traders on OpenBook are primarily long the Dow (DJ30) with average limits at 12,750 and stops at 12,500.

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January 25th, 5:00 am by Benzinga

They will call him a socialist. Some of them will call him a communist. The Republicans will be sharpening their teeth and loading up the weapons that they fight so hard for the right to carry, because Warren Buffett has once again publically criticized tax rates offered to millionaires and billionaires.

Of course, Buffett is not a socialist (and he certainly is not a communist – any such claims are ridiculous), he is simply a successful, extremely rich man who has retained his conscience.

When Buffett first made public his opinion that people who earn as much money as himself are not paying nearly enough in taxes, one of the big cries from the right went something like, “well, what is stopping you? Feel free to make a donation.” That was mildly amusing, and it struck a chord with many, but it missed the point.

Buffett is saying that people at any income level will of course pay as little tax as possible within the legal limits. That is every man’s right. Were he to singularly make a contribution, that fails to address the larger problem – many other millionaires will not choose the same path.

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January 24th, 9:42 pm by Sam

(eToro Blog) Ahead of the Federal Reserve interest rate decision which will be announced tomorrow, traders on OpenBook are primarily short on the EUR/USD with average limits at 1.2800 and stops at 1.3050. Guru pawelskrzypek, who allocates 100% of his portfolio to EUR/USD and is up 50.6% in the last three months, is expecting the EUR/USD to drop further. The trader has positioned himself with several shorts, with entry prices from 1.2900 and 1.3000. Looking at his TP, the trader is anticipating that the EUR/USD could drop as low as 1.2500. This trader is a big Euro bear, and so are 628 OpenBook traders who are copying his strategy.

The U.S. Federal Reserve will announce its interest rate decision at 5:30 pm London time on Wednesday, January 25^th 2012. Markets and economists are expecting the Fed to continue as promised, to keep interest rates on hold at 0.25%. With recent positive economic reports, the chances of further quantitative easing are also low. What makes tomorrow’s rate decision interesting and different from others is that the Fed had recently pledged to change its communication policies, to be more transparent and provide more information to the financial markets. Given that, the Fed will start to publish the individual predictions of senior Fed officials. There is also speculation that Fed Chairman Ben Bernanke could announce an inflation target, in line with other major central banks of the world.

Recent U.S. economic developments to take in consideration

On the jobs front, the latest Non-Farm payroll report showed that 200K jobs were created in the month of December, beating analyst expectations while the unemployment dropped unexpectedly to 8.5%. Inflation has continued to ease with PPI dropping 0.1% and the CPI remaining flat in the month of December. The final estimate for Q3 GDP shows growth of 1.8%. On the housing front, existing and new home sales continue to rise but have been below expectations.

Market’s reaction to last month’s Fed rate decision

The EUR/USD dropped 75 pips after the rate decision, as the Fed kept rates on hold and announced that the U.S. economy was expanding moderately.

Scenario A: Fed keeps rates on hold with plans to continue bond purchases

If no new measures are announced, the EUR/USD will move based primarily on risk sentiment, which is currently negative and which might send the EUR/USD lower by 50 to 75 pips.

Scenario B: Fed keeps rates on hold with further quantitative easing

If the Fed decides that further quantitative easing is needed to protect the U.S. economy from the European crisis, we might see the U.S. Dollar weaken and the EUR/USD might rise as much as 100 pips.

Scenario C: Fed keeps rates on hold and announces formal inflation target rate

This scenario would be considered U.S. Dollar bullish and we might see the EUR/USD drop by 150 pips on the combination of the Fed’s hawkish tone and continued Euro weakness.

OpenBook:

Unlike guru pawelskrzypek, trader and growing OpenBook favorite Gavinwright, is going against the OpenBook majority sentiment and is piling on long positions. This trader clearly believes that the EUR/USD is well oversold at present and is due for a correction. This contrarian trader has several buy EUR/USD positions with entry prices around 1.3000, and looking at the profit target we see that the trader is targeting EUR/USD to reach as high as 1.3040.

Guru Moksel1972, with 1437 copiers, has also been holding several long term buy positions on the EUR/USD pair from December. While keeping those trades open, the trader has been scalping the EUR/USD with consistent profits so far this month, with average profits of 5%. We saw several of our top traders buy EUR/USD in December, which attracted a great deal of sometimes cantankerous debate among the OpenBook users. The future of the Euro is still up in the air and we are trading on a knife’s edge this week! It’s clear that some of the OpenBook traders are thriving on the uncertainty; trader Tojoshi earlier booked solid gains on the EUR/USD pair, closing five long positions with gains ranging from 76% to 188%.

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January 24th, 5:00 am by Benzinga

On Friday, the Canadian consumer price index printed at less than expected, coming in at negative 0.6% against an anticipated drop of 0.1%.

The prior month’s CPI reading was an increase of 0.1%.

Canada’s drop in inflation echoes trends seen around the globe. Although headline inflation in the US continues to increase at a modest pace, core inflation has held tight for some time and has decreased from relative highs seen in the summer.

Earlier in the week, CPI figures released in the Eurozone indicated that inflation had receded, although it remained sharply above 2%. Likewise, inflation figures in China had recently shown a declining trend.

This leads to an increasing amount of speculation that more easing could be incoming. Including in the US, where it seems more and more likely that the Federal Reserve will implement a third round of quantitative easing.

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January 23rd, 8:00 pm by Sam

(eToro Blog) Wall Street had earlier rallied higher on investor hopes that Greece would reach an agreement with private bond holders that would prevent the country from defaulting on the debt which comes due in March. Despite some initial pull back for the Euro-Dollar as the trading day commenced, the EUR/USD pair has broken through resistance at 1.3000 and continues to claw higher, reaching an intraday high of 1.3047. It has most recently traded at 1.3039, and sentiment on the OpenBook is predominantly bullish. Guru pyruss commented (on his wall) that he’d like to measure the bull’s mettle, though he wonders too if it’s not a “bull trap.” A review of his open trades reveals that this surprise rally eluded him as only EUR/USD shorts emerge, and a review of his history shows his two recently closed profitable trades may have been premature.

Last week’s mostly positive U.S. economic data is still fresh in the minds of traders this morning, though there is little of import on the U.S. economic calendar today. As a result, stocks are eyeing Europe for direction and most analysts agree that Europe’s headlines will decide Wall Street’s future for the remainder of the trading day. Currently, there are reports that the Greek government is moving closer to a deal with private bond holders. The Eurozone finance ministers also are meeting today in Brussels to hammer out measures to force member countries to limit budget deficits to 0.5% of GDP.

Research in Motion Ltd (RIMM), the makers of the Blackberry phone, captured headlines today when the company announced that the company’s co-CEOs, Jim Balsillie and Mike Lazaridis are resigning as the company fights loss of market share to other device manufacturers. Shares of the company were down 5.82% in early morning trading.

OpenBook trader anugiu continues to hold on to hold several positions with triple digit gains. The SPX500 positions have an average gain of 335% and the NSDQ100 positions have accumulated an average gain of 272%. Trader drangie, who is a short term trader (unlike anugiu), was busy this morning scalping and booking several profitable positions on the SPX500; the trader looked for opportunities to buy SPX500 near 1,318 and sell near 1,316 before the U.S. open. Trader dedenfd was also busy this morning capturing 12.5% gain on SPX500 and 8% gain on NSDQ100.

With the Fed Rate decision two days away, traders on OpenBook are primarily bullish on SPX500 with average limits at 1,400 and stops at 1,290. Earlier, all of the U.S. equity markets had been higher but they have since retreated; as of this writing the DJIA is down 24 points, the NASDAQ 6 and the S&P500 is almost 2 points lower.

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January 20th, 10:49 pm by Sam

(eToro Blog) Wall Street is trading cautiously on the final day of what has generally been a positive week for stocks on news of mixed blue chip earnings. IBM reported a 4.4% rise in 4th quarter earnings, while Microsoft reported a decline and Google entirely missed earnings forecasts. As of this writing the Dow is up 57 points, while the NASDAQ and S&P 500 are down 5.6 points and 3.48 points, respectively. Traders on OpenBook are primarily long the SPX500, with average limits at 1,400 and stops at 1,250.

OpenBook trader drangie caught our attention this morning as she booked five profitable trades on the SPX500 before the U.S. market open. This trader, with 30 followers and two copiers, has so far booked between 4.17% and 6.25% gains on today’s trades and has several more open longs with a narrow range of targets. OpenBook trader spedini is another trader who booked some quick profits on the SPX500, closing five shorts and gaining between 5% and 12.50%.

OpenBook trader anugiu, who has 388 followers and 98 copiers, is another hidden gem. This trader focuses primarily on trading indices, and is holding a gain of nearly 200% on an SPX500 position and an average 344% gain on four open long positions on the NASDAQ. The trader has closed several profitable traders on SPX500 and NSDQ100 in the last thirty days, booking gains of between 46% and 184%.

In U.S. business news, the National Association of Realtors reported existing home sales rose 5% in December, pushing the inventory of homes for sale to the lowest level since 2005. Purchases in 2011 rose 1.7% as mortgage rates reached historic lows. Fed Chairman Ben Bernanke has been pushing to lower mortgage rates by pledging to keep interest rates low and initiating Operation Twist, whereby the U.S. Treasury sells $400 million in short term instruments in exchange for the same amount of longer term bonds. The next Fed meeting is scheduled for next week.

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January 20th, 2:12 pm by Barbara Zigah

(eToro Blog) Among the eToro gurus who prefer to trade the Pound Sterling, trader santosh has continued to be bullish for the currency, recently closing out several long positions which eked out small percentile gains. It’s clear he has a strong conviction of the U.K. economy’s ability to overcome adversity, as he also holds nearly a dozen long positions in the GBP/USD pair, some of them several months old.

Guru santosh is a 5-star rated trader with 5624 followers and 930 copiers; one of the key reasons why he has emerged month after month as a top trader is his level of maturity. Recently, one of his many follower/copiers asked why the trader didn’t participate in eToro’s weekly challenge as he was sure to be the winner. His response was that he has his priorities, which is consistent income and equity growth. He’s participated in the past, when time allows, but if he has to make a decision between the safety of a trade and winning the weekly challenge, he chooses the former.

In economic news affecting the Pound Sterling, the U.K.’s Office of National Statistics today reported retail sales improved in December both on a monthly and annualized basis. According to the report, retail sales increased by 0.6%, in line with the consensus call, and well above the revised -0.5% in November. On a year-over-year basis, retail sales rose to 2.6% as compared to a revised 0.4% for the previous period. Excluding fuel sales, the data also showed improvement in December, rising to 0.6% on a monthly basis, up from a revised -0.8%. On a yearly basis, retail sales excluding fuel rose 1.7% from 0.5% in the previous period.

With the data release, the Pound Sterling should have rallied but didn’t, as traders see the news for what it’s worth – a one off event. The data reflects Christmas season shopping and little else; the fundamentals of the U.K. economy are still lacking and overall remains too reliant on the fortunes (or misfortunes, as the case may be) of the Eurozone. As of this writing, the GBP/USD pair is trading lower at 1.5460, and sentiment among the broader OpenBook population remains bearish in general.

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January 20th, 5:00 am by Benzinga

Today, Barack Obama declared that his administration will not issue contracts associated with the Keystone XL pipeline from Canada on February 21. While the Administration has yet to deliver an official statement, officials in the oil & gas industry are bracing for impact. Assuming that the White House will not have a change of heart, what does this news mean for publicly-traded companies and investors?

Companies such as Chevron, Exxon-Mobil, and BP may be directly affected by this declaration. The pipeline project may be a key source of revenue for many multinational companies as well as smaller companies. As such, the government’s decision could be detrimental to margins, earnings announcements, and future direction.

One important aspect of the decision is that many oil rigging jobs are at stake. The Keystone XL pipeline is extremely large, traveling from Canada to Nebraska. In order to maintain efficacy across all points of contact, hundreds, if not thousands, of jobs will be required for maintenance. Although the decision may be beneficial for some aspects of the American economy, jobs will suffer as a result of the legislation.

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January 19th, 10:25 pm by Sam

(eToro Blog)  Wall Street rallied higher on the positive economic reports, and market sentiment was also improved on news that France and Spain reported largely successful debt auctions despite their downgraded rating. As of this writing, the Dow is up 30 points, and the Nasdaq is up 22 points. The S&P 500, which broke 1300 yesterday, is up 6 points at the time of this writing and, as expected, OpenBook traders are long on the SPX500 by a ratio of 3 to 1.

Traders on OpenBook are also primarily long on the Nasdaq (NSDQ100) with average limits at 2,820 and average stops at 2,700. OpenBook trader panchio62 recently opened a long position on NSDQ100 and is floating a profit of 16%. He has been correctly predicting the trend on the NSDQ100 over the past few days, booking 14% – 18% gains on the trades.

The Philly Fed Manufacturing Index signaled a slight expansion in manufacturing activity in the Philadelphia area, rising to 7.3 in January from December’s 6.8. The Empire State Manufacturing index, released earlier this week, also showed an expansion in manufacturing activity in the New York region. While the growth has not been spectacular, it represents a positive shift among manufacturers who have been hardest hit by the 2008-2009 recession.

Consumer prices in the U.S. were unchanged in December according to the Labor Department and consumers had much to cheer about in the last five months of 2011 as commodity prices declined. Inflation pressures eased as energy prices came down due to slowdown in demand worldwide. The energy index dropped 1.3%, food prices, however, rose 4.3%. With demand for oil decreasing, and following comments made by President Obama on the Keystone Pipeline project, there had been an initial decline in oil prices. However, the latest release from EIA has helped to buoy oil stocks and prices, and eToro traders are predominantly long on oil.

As the last trading day of the week approaches, OpenBook traders like pyruss are watching to see whether the bull run will continue. Trader pyruss has had an incredible week with the Euro-Dollar but in a paraphrase of his earlier comments, once tomorrow is over he may revise his position as he prepares for “next weeks battle.”

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