forex weekly analysa

Guest Commentary: Weekly Outlook April 18 - 22

2011-04-18T18:00:00.001-07:00

Weekly outlook for April 18-22

Here is a weekly outlook for April 18th to 22nd presenting the main
news items and reports related to US, Canada, Australia and Europe.

(all times GMT):

* Monday 18th of April 2.30 – Monetary Policy meeting Australia's
Bank :The minutes of the monetary policy meeting of the reserve
bank of Australia, in which the board discusses the domestic and
international economic conditions and decides on the Bank's basic
interest rate which is currently at 4.75%. The meeting was held
back in April 5th, however the minutes are published only two
weeks after the meeting;

* Friday 19th of April 13.00 –Canadian Core CPI:This monthly
report presents the main changes in the core consumer price index
which excludes the most volatile components such as energy, fruit
and vegetables. According to the previousCanadian statistics
reportforFebruary 2011, the CPI rose by 2.2% in 12 month up to
Februarycompared to a 2.3% increase up to January 2011. The main
reason for the rise is related to the energy prices that increased
by 10.6% during the 12 months up to February 2011;

* Wednesday 20th of April 9.30 Bank of England MPC meeting: This
will shows the minutes of the last Bank meeting in which it was
decided to maintain the basic interest rate at 0.5% and the asset
purchase program at 200 billion pounds, as GB's inflation rate
declined from 4.4% (Y2Y) on February to 4.0% on March 2011;

* Wednesday 20th of April 15.30 – EIA report about Crude oil
inventories: The EIA (Energy Information Administration) will
present its weekly report on the recent newsrelated to
U.SPetroleum and oil stocks declined by 4.9 million barrels, which
is a 0.28% drop compared to the previous week. The stocks reached
by April 8th 1,763.9 million barrels. This was the largest
withdraw since mid March. (see here my recent review on crude oil
stocks);

* Thursday 21stof April 13.30 – Department of Labor report - US
unemployment claims: For the week ending on April 9th, initial
claimsincreased by 27,000, to reach 412,000 claims; the insured
unemployment rate declined by 0.1 percent points and reached 2.9%
for the week ending on April 2nd; and the number of insured
unemployment was 3.680 million, a decrease of 58,000 compare to
the previous week's number (see here my review on the recent US
Labor report);

* Thursday 21st of April 15.30 – EIA report about Natural gas
storage:the EIA will also issue a weekly report about the recent
changes in natural gas storage, production and consumption in the
US. In the recent EIA report natural gas storageincreased by 1.8%,
i.e. an injection of 28 Bcf, as the total storage reached 1,607
billion cubic feet for all lower 48 states; the natural gas
storage was 10 Bcf above the 5-year average. (see here my recent
natural gas storage review).

By: Lior Cohen, Energy Analyst for Trading Energy

DailyFX provides forex news on the economic reports and political
events that influence the currency market.

Learn currency trading with a free practice account and charts from
FXCM.

Source: Dailyfx.com

U.S. Initial Jobless Claims Fall in the Latest Week

2011-03-31T10:10:00.002-07:00

Initial unemployment insurance claims fell 6,000 to 388,000 for the
week ending March 26, 2011, more than reversing the previous week's
4,000 increase to an upwardly revised 394,000 level (initially
reported as 382,000). The level of claims in the latest week came in
slightly above market expectations for a 380,000 level. Upward
revisions to previous weeks largely reflected revisions to
seasonal-adjustment factors back to 2006. The four-week moving average
of initial claims, which normally provides a better indication of the
underlying trend in labour markets, rose to 394,250 from 391,000 the
previous week but remained below the 400,000 level for a fifth
consecutive week. Continuing claims (for the week ending March 19,
2011) fell 51,000 to 3,714,000 from 3,765,000 last week.

Despite the tick up in the four-week moving average of initial claims
in the latest week, the measure remained below the 400,000 level for a
fifth consecutive week, leaving the encouraging downward trend that
has been evident in the data in recent months broadly intact.
Today's report will likely have a limited effect on expectations
ahead of tomorrow's March employment report given that the payroll
employment survey was conducted earlier in the month (the payroll
survey is conducted in the week containing the twelfth day of the
month); however, the drop in the four-week moving average of initial
claims from 388,500 in the March survey week from 419,500 in February
is consistent with our expectation for employment to continue to
increase in the month. We expect tomorrow's payroll employment
report will show a 180,000 gain in private employment in March
although continued weakness in hiring by state and local governments
will limit the gain in overall payrolls to 168,000. This represents a
slight moderation from the 222,000 and 192,000 gains in private and
public employment, respectively, in February, reflecting the view that
the February employment report was boosted by a weather-related
rebound from depressed January levels that we do not expect to be
repeated in March.

Source: ActionForex.Com

Guest Commentary: Upcoming Week for the USD/CAD March 27 2011

2011-03-31T10:10:00.001-07:00

Upcoming Week for the USD/CAD – March 27 2011

Places to put limit orders this week

Buying USD:

0.9800, 0.9780, 0.9750 (aggressive), 0.9720 (aggressive)

Selling USD:

0.9815, 0.9830-40, 0.9910, 0.9940 (aggressive)

Why:

The tabling and vote of non-confidence by the opposition in the
Canadian government spurred a late day rally on Friday, erasing losses
from Thursday. Last week the rate was contained within a range - a low
of 0.9730 (support) and a high of 0.9844.

The longer-term price trend continues to point lower, but indicators
such as the MACD are showing a bullish divergence. As the USD has made
lower lows versus the CAD the MACD has been making higher lows,
showing a lack of momentum and conviction in the downward moves.

A rally above the 0.9973 would be an indication of a turning point in
the pair, but a daily close above 1.00 would tell the real tale. The
last close we had above parity was on January 28 where the pair closed
at 1.0011 only to fall over the next two sessions.

Figure 1. USD/CAD Daily Chart

Source: Freestockcharts.com

The MACD on the hourly chart did not confirm the drop to 0.9730 last
week, and is signalling momentum in the USD. A rally above 0.9840 is
likely to see continued buying into the higher resistance levels (see
Selling USD levels).

The pair continues to trade in a choppy fashion, with momentum failing
to be sustained in either direction. This should be remembered when
placing trades, as currently this is not a strongly trending pair.

Volatility has broken out and reversed course on the legs of the
earthquake in Japan. The daily average (14) range which reached a
miniscule 52 pips/day on March 13, has since climbed to 90 pips/day.
The breakout in volatility, if it can be sustained, is likely to push
the pair beyond the range it has been contained in. Indicators such as
the MACD indicate the breakout will be to upside.

High impact news this week:

USD Consumer confidence:Tuesday@ 10 AM EST

CAD Gross Domestic Product:Thursday@ 8:30 AM EST

USD Non-Farm Payrolls & Unemployment:Friday@ 8:30 AM EST

USD ISM Manufacturing:Friday@ 10 AM EST

Have a great trading day!

Written by Cory Mitchell, CMT

Cory Mitchell is an independent trader specializing in short- to
medium-term technical strategies. He is the founder
ofhttp://vantagepointtrading.com/, a website dedicated to free trader
education and discussion. After graduating with a business degree,
Mitchell has spent the last six years trading multiple markets and
educating traders. He has been widely published and is a member of the
Canadian Society of Technical Analysts and the Market Technicians
Association.

Source: Dailyfx.com

Commentary by Central Bank Policymakers Could Overshadow Data Next Week

2011-03-26T13:11:00.001-07:00

The flow of data next week is particularly heavy, as it marks the end
of March and the beginning of April, meaning growth figures will be
released from major economies, as well as labor market data from the
U.S. However, following the European Union Summit, the markets will be
looking towards commentary by central bank policymakers around the
globe to figure out how to wind down stimulus, withdraw liquidity, and
raise rates. U.S. Treasuries saw their yields jump late in the North
American session on Friday following commentary by Federal Reserve
Governor Charles Plosser that he would support action to end the
FOMC's mandate of quantitative easing. With many FOMC policymakers
scheduled to speak next across the globe, markets will be listening
eagerly to try and pinpoint a time if and when the Federal Reserve
will raise rates. Further hawkish commentary will assuredly boost
interest rate expectations, sending the Greenback higher against other
major currencies.

* German Consumer Price Index (YoY) (MAR P): March 29 – --:-- GMT

Inflation is expected to continue its creep higher in Europe, with
Germany's consumer price index expected to have gained by 2.2
percent in March, on a year-over-year basis. Calls by European
Central Bank policymakers remain high; in fact, the OIS shows a
124.2 percent chance of the European Central Bank raising interest
rates by 25-bps at their meeting in a few weeks. Consumer prices
have been accelerating an increasingly accelerating rate since
August, and the year-over-year inflation rate has been positive
every month since November 2009. A reading over 2.0 percent would
mark the second consecutive month in which the index had gained at
such a pace, and another jump in German consumer prices would
likely be the final nail in the coffin for an ECB rate hike with
purchasing power being siphoned from European consumers.

* U.S. Consumer Confidence (MAR): March 29 – 14:00 GMT

Consumer confidence is forecasted to fall back below 70.0, after
holding above said level for only one month. A reading of 65.0
would roughly equate to the reading in January, which was 64.8. The
reading in February was the highest rate in three years. A turn
lower in the housing market will likely be one of the leading
causes of the decline in confidence, as evidenced by a record low
in new housing starts this week. A poor housing market, in
conjunction with rising inflationary pressures, the crisis in the
Middle East and North Africa, and a deteriorating nuclear situation
in Japan area also to have been factors that could have weighed on
confidence. The latter two events could just be a temporary drag on
confidence if the situations are resolved without too much
collateral damage to human life and the environment. A
steeper-than-expected drop will almost definitely weigh down the
U.S. Dollar, as one would expect a deteriorating outlook for the
economy to be followed by less consumption, and depressed growth
figures down the road. Join a DailyFX analyst for live coverage of
event!

* Canada Gross Domestic Product (YoY) (JAN): March 31 – 12:30 GMT

Canadian gross domestic product data surprised the market in the 4Q
of 2010, as exports expanded at their fastest rate since 2004 and
the pace of spending by consumers quickened. However, facing steep
debt issues coming into 2011, as well as a strong Canadian dollar
relative to its U.S. counterpart, figures, though expected to show
continued growth at a 3.1 percent clip, could miss expectations.
Clearly, the Canadian people are not pleased with the direction the
country is moving in, given that the House of Commons voted today
to remove the current conservative government from its position,
with new elections expected to be held in May. Similarly, economic
conditions in the first few months of the new year were likely to
have been significantly worse than they were in the preceding
months, leading one to believe that the GDP figure could be slimmer
than anticipated. However, considering the components of growth are
well-documented before the release of the aggregate number, the
price action sparked onto Loonie-crosses could be limited. Join a
DailyFX analyst for live coverage of event!

* U.S. Change in Non-farm Payrolls (FEB): April 1 – 12:30 GMT

Payroll figures beat forecasts last month, expanding by 192,000
jobs, versus the 190,000 expansion expected. Job growth in December
was particularly weak, but the markets seemed to accept the higher
figure in January as a result of more moderate weather conditions
relative to how they were in December, and an improving overall
economy. True, another round of payrolls at or above expectations
will certainly support Federal Reserve Chairman Ben Bernanke's
postulation that there are "grounds for optimism" about
improvements in the labor market, although it has been projected
that there needs to be at least 125,000 jobs added every month for
the labor market to keep up with population growth. Also featured
on Friday will be the Unemployment Rate, which after falling to its
lowest level since April 2009, is expected to hold at 8.9 percent.
Join a DailyFX analyst for live coverage of event!

* U.S. ISM Manufacturing (MAR): April 1 – 14:00 GMT

The ISM manufacturing gauge has risen every month since July,
reaching its highest level since May 2004 when it reached 61.4 in
February. The index is expected to show continued expansion in the
manufacturing sector, which is indicated by a reading above 50.0. A
weaker Greenback across the major currencies has certainly helped
increase demand for American goods, ultimately boosting exports and
keeping growth running. Another strong number will boost hawkish
rhetoric within the Federal Reserve, as rate hike proponents will
cite the gauge as a reason to withdraw quantitative easing in order
to prevent the economy from overheating. On the contrary, if the
figure slides more than expected, it could lead to a weaker U.S.
Dollar, as adversaries of a rate hike will cite unstable footing
the U.S. economy finds itself on, and another reason to extend
quantitative easing or introduce a whole new round of liquidity
injections.

See the DailyFX Calendar for a full list, timetable, and consensus
forecasts for upcoming economic indicators.

Written by Christopher Vecchio, DailyFX Research

Source: Dailyfx.com

G-7 Intervention, The Week in Review

2011-03-20T19:59:00.001-07:00

The Group of Seven may have launched their first concerted currency
intervention in over ten years, but its chance of success, while
perhaps better than even, is by no means assured. Dollar purchases by
the central banks, in the Tokyo, European and American markets on
Friday lifted the currency by more than three figures against the yen,
from 78.82 as high as 82.00, a third of which had been lost by the
close.

The timing chosen by the central banks, almost immediately after a
punishing stop loss run from 79.80 to 76.25 the day before, had good
market rationale. Sell stops tend to act like quicksand on a market,
drawing traders and the market to their execution.

If the banks had intervened before the stops were executed and then
over time the levels drifted lower toward the area below 80.00, the
orders would have been executed despite the bank's prior intervention.
Then intervention, always risky, would then have looked like a
failure. It is as certain as possible without actually knowing, and
the banks will not inform, that the central bank decision makers and
their execution desks were aware of the stop loss sell orders below
79.80 and that knowledge informed their decision.

Currency markets will have a hard time returning to comparative
economic logic until central banks resume normal interest rate
policies. As long as the Federal Reserve has a zero rate, and that is
an apt description even if it is not technically accurate, and a
negative real Fed Funds rate counting inflation, the dollar will not
be able to gain permanent traction no matter the performance of the US
economy.

Despite much talk of the safe haven trade since the Japanese
earthquake, there has been no general move into the dollar or really
anywhere else in volume due to the Asian events.

Fear of capital loss is the driving force behind the safe haven trade.
During the acute phase of the financial crisis investors briefly
accepted negative returns on Treasuries for the perceived safety of US
government bills. Current fear of capital loss in the financial market
is muted, in the background due to recent history but not manifest.
Gold is lower post Japan; if there were any generalized safe haven you
would see it in gold

The one possible safe haven move has been to the Swiss Franc which
reached a new historical record post the Japanese event. That is
probably more a vote for safety and discretion of funds in Swiss banks
than a vote of confidence in the Swiss economy. But the Swiss Franc is
a relatively minor currency compared to the volumes of true safe has
flows that entered the US dollar and dollar assets during the fall off
2008, or from the euro when the dissolution of the single currency was
feared in the first blush of the debt crisis last year.

The main impact from the Japanese event, aside from the very emotional
reactions from to the threat of a nuclear cloud, has been the prospect
for slower world economic growth.

Different currencies are responding differently to the events in Asia.
It is not the dollar or dollar related considerations that are driving
the markets. The dollar is the other side of most currency trades so
what is actually Australian Dollar weakness shows up and can be
mistakenly interpreted as US Dollar gains

Yen strength prior to intervention had more to do with repatriation,
though amounts are difficult to quantify, existing market positions
and large stops below 79.80 executed Wednesday evening New York time,
(Thursday morning in the Antipodes), in typically thin Sydney/Auckland
liquidity. The move was entirely typical of trading in that market.
The beginning position of the yen well below 90 to the dollar owed
most to the residual of the collapse of the carry trade two years ago
which had originally carried the yen to its position below 100

Euro strength is due to several factors: recalculation of the euro/yen
crosses with a stronger yen (weaker dollar yen); the recent ECB rate
statements and promise of an April hike and the generally better
European debt picture.

Australian, New Zealand and Canadian Dollar weakness has been due to
their commodity currency status and the potentially slower world
economic growth from the Japanese events. In addition all three
currencies had been at or close to historical highs versus the dollar
so almost any major event whose outcome is unknown is a good reason to
take profit. There had also been renewed questions on China's ability
to maintain growth

The dollar is not putting up any much resistance to these developments
because it has an overhang of quantitative easing. Without the benefit
of the safe haven trade monetization is the fear stalking the dollar.
Even though US statistics are better the frozen Fed rate policy and
continuing QE will continue to negate any positive effects on the
dollar from US economic expansion.

Source: ActionForex.Com

The Trading Week: Mar. 21 - Mar. 25

2011-03-20T02:32:00.001-07:00

Mar.
19, 2011
(Allthingsforex.com)
–
Economic
growth,
consumer and
housing market
data from the
world's
largest
economy,
coupled with
the EU summit,
the U.K.
inflation gauge
and the Bank of
England meeting
minutes, will
place the U.S.
dollar, the
euro, and the
pound in the
spotlight
throughout the
busy week
ahead.

In
preparation for
the new trading
week, here is
the outlook for
the Top 10
economic events
that will move
the markets
around the
globe.

1. USD-
U.S. Existing
Home
Sales,
the main gauge
of the
condition of
the U.S.
housing market
measuring the
number of
closed sales of
previously
constructed
homes,
condominiums
and co-ops,
Mon., Mar. 21,
10:00 am,
ET.

In
light of the
worst-than-expected
housing starts
report, the
sales of
existing homes
could also
confirm the
weakness in the
U.S. housing
market with a
monthly sales
decline to 5.15
M in February
from 5.36 M in
January.

2. GBP-
U.K.
CPI-Consumer
Price
Index,
the main
measure of
inflation
preferred by
the Bank of
England, Tues.,
Mar. 22, 5:30
am, ET.

Inflation in
the U.K. is
forecast to
remain
stubbornly high
with a reading
of 4.2% y/y in
February, up
from 4.0% in
January and
well above the
Bank of
England's
3.0% ceiling.

3. GBP-
Bank of England
Monetary Policy
Committee
Meeting
Minutes,
a comprehensive
report of the
central
bank's
meeting that
could provide
an outlook on
the economy,
interest rates
and future
monetary
policy, Wed.,
Mar. 23, 5:30
am, ET.

The
minutes are
expected to
show that the
Monetary Policy
Committee was
not in any
hurry to hike
interest rates
as the majority
of policy
makers voted
against a rate
hike. However,
rising
inflationary
pressures could
continue to put
pressure on the
Bank of England
to consider a
rate hike
sooner rather
than later. If
at upcoming
meetings more
committee
members were to
decide to join
the camp of the
three
"rate
hawks"
Andrew
Sentence,
Spencer Dale
and Martin
Weale, the
market could
continue to
price
expectations
for an interest
rate increase
in the near
future.

4. JPY-
Japan Trade
Balance
of the
difference
between imports
and exports,
Wed., Mar. 23,
7:50 pm,
ET.

The
Japanese export
growth is
expected to
make up for the
deficit
reported last
month with a
trade surplus
reading of up
to 895 B yen in
February,
compared with
the 471 B yen
deficit in
January.

5. GBP-
U.K. Retail
Sales,
an important
gauge of
consumer
spending
measuring sales
at retail
establishments,
Thurs., Mar.
24, 5:30 am,
ET.

Rising
fuel and food
costs could
weigh on the
U.K. consumer
sentiment and
spending with
retail sales
dropping by
0.5% m/m in
February from
the 1.9% m/m
increase in the
previous month.

6. USD-
U.S. Durable
Goods
Orders,
a leading
indicator of
economic
activity
measuring
durable goods
orders placed
with domestic
manufacturers,
and U.S.
Jobless Claims,
an important
gauge of
employment
trends and
labor market
conditions,
Thurs., Mar.
24, 8:30 am,
ET.

After a
sharp 3.2% m/m
bounce in
January, the
U.S. orders for
durable goods
are expected to
pull back with
a reading of
1.6% m/m in
February.
First-time
applications
for
unemployment
benefits are
forecast to
reach 492K,
slightly higher
that the
reading of 385K
in the previous
week. To
indicate a
significant
decline in
unemployment,
economists
estimate that
jobless
applications
would need to
fall to 375K or
below.

7. JPY-
Japan CPI-
Consumer Price
Index,
the main
measure of
inflation
preferred by
the Bank of
Japan, Thurs.,
Mar. 24, 7:30
pm, ET.

Deflationary
pressures in
Japan could
continue to
push the
inflation gauge
below 0% for
another month
with the CPI
registering a
-0.3% y/y
reading in
February from
-0.2% y/y in
January.

8. EUR-
Germany IFO
Institute
Business
Climate and
Expectations
Index,
a leading
indicator of
economic
conditions and
business
expectations in
the
Euro-zone's
largest
economy, Fri.,
Mar. 25, 5:00
am, ET.

The
German IFO
index is
forecast to
show a small
shift lower in
the optimistic
outlook for the
largest economy
in the
Euro-zone with
a reading of
110.5 in March,
compared with
111.2 in the
previous
month.

9. USD-
U.S. GDP- Gross
Domestic
Product,
the main
measure of
economic
activity and
growth in the
world's
largest
economy, Fri.,
Mar. 25, 8:30
am,
ET.

The
main spotlight
economic event
of the week
will bring the
third and final
reading for the
U.S. Q4 GDP
which is
forecast to
revise the U.S.
economic growth
higher by 3.0%
in the fourth
quarter of
2010, up from
the revised
estimate of
2.8% and faster
than the 2.5%
growth in the
third quarter.

10. EUR-
European Union
Summit,
a meeting of EU
leaders to
discuss
solutions to
the debt crisis
and other
economic
issues, Fri.,
Mar. 25, All
Day
Event.

The
final day of
the March 24th
and 25th EU
Summit would be
the deadline by
which EU
leaders have
promised to
deliver
concrete
measures and
"comprehensive
solutions"
to contain the
debt crisis,
including
possible
expansion of
the European
Financial
Stability
Facility fund.
With some
alarming trends
re-emerging
from the
European debt
markets and
debt
obligations
coming due for
Spain and
Portugal,
should the EU
leaders fail to
deliver on
their promise,
a massive
investor
disappointment
could weigh on
the euro.

Source: Fxstreet.com

Forex Strategy Outlook: Volatility Expectations Favor Breakout Trading

2011-03-18T16:39:00.001-07:00

Market Conditions Summary

A noteworthy bounce in forex options markets' volatility
expectations raise the risks of sharp US Dollar moves against the
Euro, making breakout-style trading systems attractive in the week
ahead.

DailyFX+ System Trading Signals – An early-week reversal in the US
Dollar sparked initial losses in trend-following Momentum1 and
Momentum2 systems, but the later pullback in the USD left Momentum1
higher on the week while the latter saw more modest losses.
Performance in Breakout2 was similarly mixed amidst sharply choppy
moves, but a subsequent pickup in volatility expectations bodes well
for the frequent outperformer. Said system looks particularly
attractive in Japanese Yen pairs amidst sharp jumps in volatility
expectations.

To gain a greater understanding of all six trading systems, view my
recent presentation on SSI and the trading signals on our FXCM Digital
Expo page.

DailyFX Individual Currency Pair Conditions Summary

Recent market moves have sparked noteworthy bounces in FX Options
market volatility expectations, visible through our 1-week, 1-month,
and 3-month DailyFX Volatility indices. Yet those same implied
volatility levels remain well within their overall downtrend, limiting
our longer-term bullishness for breakout systems. In the shorter-term
watch for sharp currency moves, but we'll need to see a sustained
breakout in our volatility indices to call for a more substantive
shift in market conditions.

Benchmark Trading Systems

Data and Backtest Results Generated using FXCM Strategy Trader

Our range trading strategy continues to outperform amidst the
downtrend in market volatility expectations. The recent jump in
volatility expectations notwithstanding, our outlook remains bullish
for our RSI range trading system.

Written by David Rodríguez, Quantitative Strategist for DailyFX.com,
drodriguez@dailyfx.com

To be added to this author's distribution list, send an e-mail
subject line "Distribution list" to drodriguez@dailyfx.com

Definitions

Range Strategy – The benchmark range trading system shows the
hypothetical performance of a simple Relative Strength Index strategy
on 60-minute EURUSD, GBPUSD, USDJPY, USDCHF, USDCAD, AUDUSD, and
NZDUSD pairs. It sells when the 14-period RSI falls below 70 and buys
when it crosses above 30. No other trading rules are used.
Hypothetical results are generated using FXCM Strategy Trader.

Trend Strategy – The benchmark trend trading system shows the
hypothetical performance of a simple Moving Average Crossover strategy
on 60-minute EURUSD, GBPUSD, USDJPY, USDCHF, USDCAD, AUDUSD, and
NZDUSD pairs. It buys the currency pair when the 50-period Simple
Moving Average crosses above the 100-period and 200-period averages.
It sells when the 50-period crosses below the 100-period and
200-period averages. No other trading rules are used.

Breakout Strategy – The benchmark breakout trading system shows the
hypothetical performance of a simple Channel Breakout strategy on
60-minute EURUSD, GBPUSD, USDJPY, USDCHF, USDCAD, AUDUSD, and NZDUSD
pairs. It will set a buy order at the highest high of the previous 20
bars plus one pip and a sell order at the lowest low of the previous
20 bars minus one pip. No other trading rules are used.

Volatility Percentile – The higher the number, the more likely we
are to see strong movements in price. This number tells us where
current implied volatility levels stand in relation to the past 90
days of trading. We have found that implied volatilities tend to
remain very high or very low for extended periods of time. As such, it
is helpful to know where the current implied volatility level stands
in relation to its medium-term range.

Trend – This indicator measures trend intensity by telling us where
price stands in relation to its 90 trading-day range. A very low
number tells us that price is currently at or near monthly lows, while
a higher number tells us that we are near the highs. A value at or
near 50 percent tells us that we are at the middle of the currency
pair's monthly range.

Range High – 90-day closing high.

Range Low – 90-day closing low.

Last – Current market price.

Bias – Based on the above criteria, we assign the more likely
profitable strategy for any given currency pair. A highly volatile
currency pair (Volatility Percentile very high) suggests that we
should look to use Breakout strategies. More moderate volatility
levels and strong Trend values make Momentum trades more attractive,
while the lowest Vol Percentile and Trend indicator figures make Range
Trading the more attractive strategy.

HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME
OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY
ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO
THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN
HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY
ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.

ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT
THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN
ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO
HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF
FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO
WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE
OF TRADING LOSSES IS MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT
ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO
THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION.

OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN
THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH
CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS. Any opinions, news,
research, analyses, prices, or other information contained on this
website is provided as general market commentary, and does not
constitute investment advice. The FXCM group will not accept liability
for any loss or damage, including without limitation to, any loss of
profit, which may arise directly or indirectly from use of or reliance
contained in the trading signals, or in any accompanying chart
analyses.

Source: Dailyfx.com

China Weekly: Labour Shortages Lead to Re-Think of One-Child Policy; PBOC Eases RRR For Well-Behaved Banks

2011-03-09T19:55:00.001-08:00

CHINA WEEKLY

A silent week in Plates last week leaves us with an opportunity to
look at some social and political changes taking place, but firstly
to the banking system. It has been reported that the Chinese central
bank, The People's Bank of Plates (PBOC), has reversed an increase
in the reserve ratio requirement (RRR) for some lenders as a reward
for prudent lending practices. Despite the positive action by the
central bank we believe that this shouldn't be misconstrued to
suggest a shift in policy by the central bank. We continue to hold
that more tightening measures are in the pipeline, counting further
raising of the RRR rate. Rather, the action reflects part of an
ongoing campaign by Beijing to curtail simple loan practices, which
the administration fears could lead to lax lending standards,
increasing terrible loans and ultimately hurt the financial system.
The go which was reported both in the domestic press and by the
international media gave Chinese banking stocks a boost, which
despite the recent bout of RRR and interest rate hikes are performing
relatively well so far this year. Hopes of strong profits on the back
of solid earnings growth in 2010 for Chinese banks coupled with
increased earnings in coming years is buoying Plates bank stocks.

Turning now to the labour market, amid a hiring drive by domestic and
worldwide companies there is a dire shortage for skilled labour which
has led to frenzied bidding to attract certified personnel. Candidates
with the necessary credentials are now typically seeing alluring
offers that include salary increases of 40% to 50% and improved bonus
and benefits packages. Employees who plot to leave their job are often
getting counter-offers from their current employers which often exceed
the rival offer, as companies are wary of losing personnel through
poaching. The jobs squeeze is also spilling over to service-centrer
hubs further than mainland Plates, counting Hong Kong and Singapore.
The shortage of workers is also affecting lower rungs on the
employment ladder as labour trends show that fewer Chinese workers are
opting for menial, low-paying factory jobs. This conundrum has
afflicted the east coast for some time now and is now set to spread
inland to the nation's less developed central and western regions.
Yin Weimin, minister for human resources and social security, said
that labour scarcity problems, which have been felt most strongly at
factory and service-industry jobs on the east coast, appeared
structural in nature and were set to spread inland. The governor of
Hunan province, Xu Shousheng, commented adage that enterprises in his
province were struggling to find workers, though problems were less
severe than in the east of the country.

Finally, reports ahead of schedule this week indicated that Plates may
be taking into account lifting its family-plotting restrictions, and
is taking into account a 'two-child' policy. The deputy director
of the Committee of Population, Resources and Environment, Wang
Yuqing, said that he personally favoured a gradual opening of a
two-child policy. Adding that he believes the limitations on the
current policy will be lifted by the end of the 12th Five-Year Plot,
covering 2011 to 2015. Wang went on to say that wide implementation of
a two-child policy won't lead to a population boom in Plates. His
comments were echoed by analysts at Bank of American Merrill Lynch who
said "Plates's one-child policy might have contributed to high
growth in the past, but the Chinese population is rapidly aging,
economic growth is slowing and inflation is rising, due partially to
this outdated policy". Meanwhile, Citigroup economists who have been
making models for the possibility of a two-child policy since the
1980s say that "the proportion of two-child families is declining
due to rising costs of raising kids and leisure", again suggesting
that the relaxing of the one-child policy wont necessarily lead to a
population boom. Citigroup also noted, that policy makers were also
likely to bring to somebody's attention the retirement age for women
as they remove the one-child policy in an effort to ease concerns
about the aging population in Plates and tackle a shortage of workers
across the labour market.

Written by Jonathan Granby, DailyFX Research Team

Source: Dailyfx.com

The Yen is strong today

2011-03-08T20:07:00.002-08:00

*USD –* Last week the February non-farm payroll headline number was
essentially in line with expectations (192,000 vs. 196,000 expected),
while private payrolls were a marginally stronger than anticipated
(222,000 vs. 200,000 forecast). The fall in unemployment to 8.9% from
9.1% is encouraging. Broad unemployment fell for the third straight
month to 15.9%, its lowest point since April 2009. In the US, a slow
start to the week means that potential market movers are saved for
Thursday and Friday with the main consequence, February retail sales,
on Friday. A strong gain in auto sales and a rebound in building
materials are expected after terrible weather depressed January sales.
This will give a boost to overall retail sales with American consumers
expected to remain in a spending mood, particularly given the lift to
disposable incomes from the recent tax cuts and somewhat better
weather. Also on Friday, the University of Michigan consumer
confidence is anticipated to increase slightly. Earlier today, Dallas
Fed President Fisher spoke on the US economy warnomg that he would
vote to scale back or stop the central bank's $600 billion
bond-buying curriculum if it proves to be "demonstrably
counterproductive." "The liquidity tanks are full, if not brimming
over. The Fed has done its job," he added. Fisher is one of the new
hawks who have rotated to become a voting member of the FOMC this year
making his comments regarding the asset hold curriculum of particular
interest.

*EUR –* The euro, having breached resistance at its February peak of
$1.3862, has jumped to a four-month high, beginning the week above
$1.40. The go comes as expectations grow that the ECB will hike
interest rates as soon as next month. ECB President Trichet told
reporters that rates may rise in April as the central bank looks to
slow inflation, which has now outpaced the Bank's 2% target for
several months. But, the single currency met resistance after Friday's
downgrade of Spain's sovereign debt by Fitch's rating agency and an
overnight downgrade of Greece by Temperamental's. While expectations
of higher rates will provide significant support for the ordinary
currency in the near term, continued concerns over Eurozone debt will
likely keep the EUR relegated to its recent ranges, albeit towards the
top.

*GBP –* Last week Sterling traded in a tight one cent band against
the USD as the currency appears to be catching its breath following
the recent go higher. The BoE is widely expected to keep rates steady
at its meeting on Thursday. Sentiment still remains that they will
have to increase rates sometime this year as inflation is running at
double the BoE's target of 2.0%. With oil prices spiking higher,
U.K. manufacturers have said they plot to bring to somebody's
attention prices to help defray their higher manufacturing costs. This
will place additional difficulty on inflation – and thus lends
support to the GBP.

*JPY –* The Yen is strong today, but in line with most of the
non‐USD majors. In the midst of a donation scandal, Japan's
foreign minister, Seiji Maehara has resigned, but there has been
essentially no currency result. Data today included a strong
coincident index, which rose to 106.2 and the leading index, which
disappointed expectations, but still rose to 101.9. The key driver of
the USDJPY pair remains interest rate differentials between the US and
Japan, and risk aversion. Once we are through the first quarter,
USDJPY will likely drift higher for the remainder of the year.

*CAD –* The CAD starts the week near a three-month high as the price
of oil surged to nearly $107/bbl.
Crude, Canada's primary export, rose to a 29-month high as
increasing violence in Libya has raised concerns that global supply
disruptions may increase. While energy prices will be the primary
market driver this week, investors will take note of several key
Canadian economic releases, counting housing starts, international
merchandise trade, and an employment report. While the Canadian
economy is facing a potentially hard road ahead with a strong currency
making the nation's goods and air force relatively more expensive,
rapidly rising energy prices will keep the loonie well supported in
the near term.

*MXN –* The Mexican peso rose nearly 1% against the greenback last
week when crude oil, the nation's following largest export rose to a
yearly high. Internally, Mexico left its benchmark overnight lending
rate at a confirmation low of 4.5%, but the central bank changed the
tone of its policy in acknowledging increased risks to the inflation
outlook as a result of geopolitical tensions and weak crop growth due
to weather conditions. To curb peso gains, the central bank has been
buying as much as $600million monthly since March 2010, boosting
foreign reserves. In the near term, the peso should remain well
supported by the rising oil prices.

*AUD –* The AUD is modestly higher this morning as commodity
currencies have been broadly supported by rapidly rising energy and
precious metal prices. But, the AUD has been relegated to its recent
ranges as investors start to consider the effects that prolonged high
oil prices may have on global growth. The market will take note of
Australian employment and housing reports this week and trade weigh
and CPI data out of Plates, Australia's primary trade partner. While
rising commodities will provide support for the AUD in the near term,
high prices and a strong currency could ultimately weigh on the
export-driven Australian economy.

*Last Week's Currency Highs and Lows and Forecast*

*U.S. Economic Indicators*

Source: Fxstreet.com

Oil Spike Hits Market....

2011-03-08T20:07:00.001-08:00

It was only a matter of time before oil hit this market with the price
of oil over $100 for this long. It has been trading well above $100
dollars per barrel for several days now with a spike near $107 per
barrel pre-market today. The market finally gave it up to some degree
on this spike, although not as much as one might reckon based on the
breakout technically in place.

The day started out not too terrible at all with slight gains, but it
didn't take long before the market started to head lower. The
promotion accelerated quite rapidly with the Nasdaq testing down and
breaching its 50-day exponential moving average intra-day. The Nasdaq
fell a instant 70 points from top to bottom in just a few small hours,
or nearly 3%, which shows you the intensity of the promotion. The S&P
500 held well above its 50-day exponential moving average all day, but
it, too, sold quite hard once things got vacant on the Nasdaq.

The Nasdaq often leads both ways, and today was no exclusion to that
rule as the S&P 500 tried hard to hold in the green, while the Nasdaq
was decently red. But in the end, the depth of the fall on the Nasdaq
took the rest of the market down with it. Oil has been holding on for
a while now, and yet the market has found a way to dance around this
terrible news for the economy. You really had to marvel what was
holding this market up, and to this day, all I can say about it is
either the market thinks it's a small lived blast up, or that the bull
market is just that powerful. My guess is a bit of both.

The price of oil controlled by overnight circumstances overseas. The
market doesn't seem to reckon this is a long-term conundrum to be
sure, although that doesn't mean it can't have small-term affects to
the down side, offering up a nice correction to unwind things down to
where you can buy far more aggressively. If oil stays up at high
prices, such as we're seeing now, the perception alone of what that
can do to our economy will take this market lower. The game of
psychology being as vital as real events that take place around the
world.

It doesn't necessarily matter what the truth is, it's about the
perception, and this is what causes folks to hit the sell button. So
for now the market is captive to the price of oil on a
moment-to-moment basis. The longer we stay over $100 per barrel, the
more you'll hear negative talk about this countries future. And that
could keep the correction rocking on a while longer, which in truth,
would serve this market well.

One thing about corrections is the somewhat predictable nature of what
stocks will do from the perspective of how deeply they'll sell or not.
If you had a strong earnings report in this past quarter you won't
come close to seeing the types of losses that will be sustained from
the companies that reported terrible earnings in the past quarter.
Those are the stocks to avoid, and again, why you should permanently
keep a scoreboard of who did what. Bull trend or bear trend, it's
incredibly vital to know what took place so you can then choose wisely
whether or not to participate vacant forward from a long or small
perspective, depending on what type of market we're in.

In addition, you want to avoid the stocks most tied in to the reason
we're promotion off in the first place. The catalyst, if you will.
With oil the major catalyst, transportation stocks should really be
avoided at all costs. This is an ongoing process for every type of
market. Know what's causing what in either a bull or bear trend for
the small- term and respond accordingly. For now there's no of poorer
quality place to be than transports. If oil suddenly declines on world
events, there will be no better place to be. Simply adjust to the
moment's news.

The daily charts are doing some very excellent unwinding of their
recently overbought oscillators. It's a excellent start and would be
fantastic if they really went to oversold instead of just neutral. The
area that needs the most work is the weekly charts as they're just
coming out of overbought and want to see the major index chart RSI's
get down to the lower or mid 50's on those weekly charts. The lower
the better, especially on those key daily charts. How fantastic would
it be to finally get a test down to the 30 RSI level on those daily
index charts. Just for once, which would allow for a much more
aggressive long stance. With things where they are now, it's not
terrible to have some exposure, although it would be fantastic to just
about go all in but only if things really unwound down across the
board on those daily charts.

If they did, the weekly's would be unwound enough. If you're
overbought for too long it often takes a period of oversold to occur
before you rock back up. Conundrum is you don't want to get too cute
waiting so you let the 60-minute charts offer the right access, even
if we don't quite get really oversold on the daily charts. Any and all
unwinding is welcome on the daily charts folks. We're working our way
there but deeper promotion would be needed to hit where things would
align best.

If the S&P 500 loses 1294 then the Nasdaq will have already lost its
50-day exponential moving average with break down. That's what we need
to get things lower for some weeks to a couple of months. 2729 is the
number on the Nasdaq. With today's close we're just not through it
with any break down, thus, we need to get confirmation there first. If
we do, and it starts to run lower, then we can get the S&P 500 to
follow along with the Dow. If that takes place, this market could get
a sever test lower as the bears will become far more courageous having
seen all those key 50-day exponential moving averages go away.

It'll take a go below all the 50's across the board because on back
tests, the bears will come roaring in to take this puppy back down.
Having lost only the Nasdaq, they still won't get overly aggressive.
They want to see those 50's get taken out across the board. Then
they'll feel excellent about being small and not having to worry about
covering those small positions too promptly. So for now we watch and
learn about whether these levels will hold and keep things on the
light side for now.

Source: Fxstreet.com

Forex Strategy Outlook: Extended US Dollar Losses Favor Trend Trading

2011-03-07T12:12:00.001-08:00

An extended US Dollar downtrend favors continued trend trading in the
week ahead, while considerable Japanese Yen moves point to breakout
trading through the same stretch.

DailyFX+ System Trading Signals– It was a mixed week of performance
for our trading signals systems, as choppy moves in US Dollar pairs
made it hard for our trend trading systems to produce worthwhile
trades. Our Range trading systems saw slightly better performance, but
it was overall a honestly dreary week for the trading signals systems.
Exceedingly low volatility expectations but strong currency trends
paint a mixed picture for the week ahead. Yet amidst such one-sided US
Dollar declines, we favor Momentum1 and Momentum2 trades in USD pairs
while sticking to Breakout2 for Japanese Yen crosses.

To gain a superior understanding of all six trading systems, view my
recent presentation on SSI and the trading signals on our FXCM Digital
Expo page.

DailyFX Individual Currency Pair Conditions Synopsis

Small and standard-term volatility expectations are now at or near
their lowest levels since the onset of the global financial crisis in
2008, and markets have clearly become quite complacent through recent
price action. This leaves us in a hard spot as the US Dollar
nonetheless continues to hit fresh lows against the Euro and other
counterparts. Yet we see modest selection but to favor trend systems
until further notice. We may shift our bias when/if the US Dollar
suddenly switches direction and volatility expectations jump through
small-term trade.

Benchmark Trading Systems

Data and Backtest Results Generated using FXCM Strategy Trader

Mixed market conditions are similarly clear in benchmark strategy
performance, with our RSI, Moving Average, and Channel Breakout
systems tiny losses in the past week. Outlook is subsequently honestly
mixed.

Written by David Rodríguez, Quantitative Strategist for DailyFX.com,
drodriguez@dailyfx.com

To be added to this author's distribution list, send an e-mail
subject line "Distribution list" to drodriguez@dailyfx.com

Definitions

Trend – This indicator measures trend intensity by telltale us where
price stands in relation to its 90 trading-day range. A very low
number tells us that price is currently at or near monthly lows, while
a higher number tells us that we are near the highs. A value at or
near 50 percent tells us that we are at the middle of the currency
pair's monthly range.

Range High – 90-day closing high.

Range Low – 90-day closing low.

Last – Current market price.

OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN
THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH
CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS. Any opinions, news,
research, analyses, prices, or other information contained on this
website is provided as general market commentary, and does not
constitute investment advice. The FXCM group will not accept liability
for any loss or hurt, counting without limitation to, any loss of
profit, which may arise directly or indirectly from use of or reliance
contained in the trading signals, or in any accompanying chart
analyses.

Source: Dailyfx.com

Forex Weekly Outlook - March 7-11

2011-03-06T23:29:00.000-08:00

*Rate Decisions in New Zealand and the U.K. Employment data in U.S.,
Canada and Australia, US Prelim UoM Consumer Sentiment and many more
await us this week. Here is an outlook on the Market movers ahead.*

US labor market is continuing to strengthen in light of last week's
ADP estimate. Companies bent 217,000 new jobs last month after a
revised 189,000 gain in January. This positive outcome supports
Centralized Reserve Chairman Ben S. Bernanke's testimony to
Congress on March 1 adage there are "grounds for optimism" showing
the job market is recovering.

* *New Zealand* *Rate Choice*: Wednesday, 20:00. Following the
volatility in oil prices due to the tension in the Middle East and
in and last week's fatal and destructive Christchurch
earthquake, it appears that the Reserve Bank of New Zealand is
expected to cut the cash rate by 0.25% to 2.75% from 3.0% in the
previous month. This cut is aimed to lift confidence in light of
the halt in market activity.

* *Australian Employment Data:* Thursday, 0:30. Employment change in
Australia gained 24,000 jobs following a mere 2,300 January. This
rise was more than the 18,400 analysts had expected. Meanwhile
unemployment rate remained steady at 5.0% equivalent to the
previous reading and the forecasted value. Job foundation is
expected to gain 21,500 and Unemployment rate is likely to remain
5.0%.

* *British Rate Choice:* Thursday, 12:00. Following the ambiguous
results of the inflation report handed on Feb 16 and the BOE press
conference which followed, it can be suggested that the BOE will
not endorse the markets' views and bring to somebody's attention
rates in the near future. But King stated that there is a strong
possibility of a rise in interest rates in the middle of the year
due to inflation uncertainty in the market. The rate is not
expected to change this time.

* *US Unemployment Claims:* Thursday, 13:30. A remarkable drop in
early unemployment claims was registered last week with 368,000
claims 27,000 less than expected following 388,000 in the week
before. This was the lowest number since May of 2008. New
unemployment claims are predicted estimated at 373,000.

* *US Centralized Budget Weigh:* Thursday, 19:00. The U.S. budget
shortage widened less than expected in January success $49.80
billion below analysts' predictions of a $70 billion shortage.
Shortage was lower than expected due to arise in tax total
admission money. Concern about the growing U.S. shortage has taken
on new urgency after a series of sovereign debt crises in Europe
fueled a movement toward painful fiscal simplicity initiatives in
nations around the globe. President Barack Obama is under
difficulty to show how he plans to solve the budgetary shortage.
U.S. budget shortage is expected to grow to $235.1 billion.

* *Canadian Employment Data:* Friday, 12:00. Canada employment
change in January surged to 69,200 well above the forecast of
18,900 indicating the country's economic recovery may be
accelerating. But the jobless rate rose to 7.8 % from December's
7.6 %, as more people sought work. Nevertheless there is growing
confidence that the Canadian market will grow this year and lower
Unemployment rates. A growth of 31,300 new jobs is expected and
jobless rate is forecasted to drop to 7.7%.

* *US Retail Sales:* Friday, 13:30. Sales at retailers rose less
than forecasted in January, indicating consumers' difficulty of
maintaining last quarter's rise in spending without larger gains
in employment. Buys increased 0.3 % following 0.5% in December.
Winter snowstorms may give reasons for the slowdown in spending.
Core Retail Sales without autos, gasoline and building materials,
gained 0.4 % after a 0.3 % gain in December. January figures
compelled economists to cut forecasts for consumer spending this
quarter. Retail sales are expected to gain 0.6% this time while
Core Ratail Sales are expected to grow 0.7%. *

* US Prelim UoM Consumer Sentiment,* Friday, 14:55. U.S. UoM
Consumer Sentiment has seen a modest improvement in February
rising to 75.1 revise to 77.5. Analysts predicted a rise to74.8. A
slight drop to 77.3 is predicted now.

*All times are GMT.

Source: Fxstreet.com

AUD/CAD – Elliott Wave Count in the 4H and Daily Charts

2011-03-06T07:28:00.001-08:00

!! AUD/CAD !!

- We start in the 4H chart of AUD/CAD where we are seeing a
descending triangle, which has a slightly bearish suggestion.

- Also the RSI has tagged below 30, and disastrous to kiss 70, and if
it is returning below 40, it should reflect a bearish attempt in the
small-term.

- Looking at the structure, we see that on the left side, we have what
looks like an impulse wave down, followed be a corrective structure
up, which missed the previous top at *1.02*, and instead capped at
*1.0140*.

- That was followed by a bearish impulse wave as well.

- Now we are in correction. Wave (a) is pretty clear, as an impulse
wave. Then its not clear if there will be a running triangle, or if
the (a)(b)(c) sample has already been complete.

- I train for myself to look for further correction because we all
tend to complete the correction too soon. But if the market breaks
below *0.9830*, we can consider the correction broken, looking at
least to test *0.97*, or lower towards 0.96, 0.94 (see daily chart).

- But, if we are still completing a (b) wave, then (c) can break above
the triangle, but wait its not bullish yet. Let's then see what
happens at parity, *1.0*, because respect of that would doubtless
complete a flat correction.

- When you look at the daily chart, we see that the market is indeed
topping after a rally from *0.86* in June of 2010 to *1.0205* in Nov.
2010.

- We most likely had an extended wave 3, with a truncated wave 5. The
structure had been as such: Bullish impulse waves (5-waves) were
followed by bearish corrective waves (3-waves) UNTIL the end of
December/beginning of January, where we had a decline that had an
impulse structure to follow the impulse wave 5.

- This is why I believe the current wave count had completed wave a,
and b, and now in c, which could remain in a flat if it respects 0.95,
or be in a zig-zag that can push to *0.96*, or even lower towards
*0.94/0.9350* area (50% retracement, 150% projection/expansion)

- So one last look back at the 4H chart, and we see that we can either
be in wave (iii) of c, or still working on wave (ii).

Source: Fxstreet.com

Trading Week Outlook: Mar. 7 - Mar. 11

2011-03-06T01:20:00.001-08:00

Mar.
5, 2011
(Allthingsforex.com)
– In the
aftermath of a
cautiously
optimistic
employment
report, the
trading week
ahead will
bring a
sequence of
U.S. consumer
spending and
sentiment data,
along with two
major European
events- the
Bank of England
interest rate
announcement
and the EU
Summit, which
could have a
significant
impact on the
future
direction of
the pound
sterling and
the euro.

In
training for
the new trading
week, here is
the outlook for
the Top 10
spotlight
economic events
that will go
the markets
around the
globe.

1. NZD-
Reserve Bank of
New Zealand
Interest Rate
Announcement,
Wed., Mar. 9,
3:00 pm,
ET.

With
the Prime
Minister of New
Zealand in suspense
for a reduction
of interest
rates because
of
"virtually
no growth for
the current
financial
year" and
the market
aggressively
pricing such
expectations,
the Reserve
Bank of New
Zealand could
deliver a rate
cut by 0.25%,
bringing the
benchmark rate
to 2.75% from
3.0%. If the
central bank
does not open
the door to
further rate
cuts, the New
Zealand dollar
could find an
opportunity to
right some of
its recent
losses.

2. JPY-
Japan GDP-
Combined Domestic
Product,
the main
measure of
economic
activity and
growth, Wed.,
Mar. 9, 6:50
pm, ET.

The
final revision
of the Q4 GDP
should confirm
the preliminary
estimate which
indicated that
the Japanese
economy
contracted by
0.3% q/q in the
fourth quarter
of 2010.

3. AUD-
Australia
Employment
Circumstances and
Unemployment
Rate,
the main gauges
of employment
trends and
labor market
conditions,
Wed., Mar. 9,
7:30 pm, ET.

Recovery and
rebuilding
efforts
following the
floods in
Queensland
could continue
to stimulate
job foundation
"down
under" as
the Australian
economy adds up
to 21.5K jobs,
lesser than the
24K new jobs
bent in the
previous month.
The
unemployment
rate is
forecast to
remain
unchanged at
5.0%.

4. GBP-
U.K. Industrial
Production and
Manufacturing
Output,
the main gauges
of industrial
activity
measuring the
output of
factories,
mines and
utilities,
Thurs., Mar.
10, 4:30 am,
ET.

The
U.K. industrial
activity is
forecast to
rise by 0.5%
m/m in January-
same as the
0.5% m/m
reading in the
previous month,
while the
manufacturing
output picks up
the pace by
0.8% m/m,
recovering from
the 0.1% m/m
drop in
December.

5. GBP-
Bank of England
Interest Rate
Announcement,
Thurs., Mar.
10, 7:00 am,
ET.

Three
Monetary Policy
Committee
members voted
for a rate hike
at the last
meeting, while
the Bank of
England
Governor Mervyn
King called
raising the
benchmark
interest rate
as a gesture to
fight inflation
"self
defeating".
The huge
inquiry is who
will win- the
Governor or the
"rate
hawks"?
Making the
right choice
on future
monetary policy
could become an
even more
hard
proposition,
taking into account the
potential
threat of
stagflation-
tenaciously high
inflation
coupled with
possible
economic
slowdown on
rising oil
prices and on
the U.K.
government's
massive
spending cuts.
Although the
well-known
hawks are
expected to
vote for a rate
hike once
again, the
majority of the
MPC members
would be likely
to choose to
keep the
reputation-quo for
another month,
maintaining the
benchmark
interest rate
at the confirmation
low level of
0.5%. The GBP
could stay
supported ahead
of the meeting,
but if there is
no announcement
of a rate hike
and if there
aren't
more MPC
members to join
the hawkish
camp, we could
witness some
unwinding of
long GBP
positions.

6. USD-
U.S. Jobless
Claims,
an vital
gauge of
employment
trends and
labor market
conditions,
Thurs., Mar.
10, 8:30 am,
ET.

Last
week's
jobless claims
report
registered the
largest drop in
first-time
applications
for
unemployment
benefits since
May, 2008.
Early jobless
claims fell to
368K for the
week ending
February 26,
below the 375K
"magic
number"
estimated by
economists to
indicate a
significant
decline in
unemployment.
Forecasts are
pointing to
another
positive
reading of 673K
for the week
ending March
5.

7. CAD-
Canada
Employment
Circumstances and
Unemployment
Rate,
the main gauges
of employment
trends and
labor market
conditions,
Fri., Mar. 11,
7:00 am, ET.

The
Canadian
economy is
expected to add
up to 32K jobs
in February,
lower than the
69.2K new jobs
bent in the
previous month.
The
unemployment
rate is
forecast to
pull back to
7.7% from 7.8%
in
January.

8. USD-
U.S. Retail
Sales,
an vital
gauge of
consumer
spending
measuring sales
at retail
establishments,
Fri., Mar. 11,
8:30 am, ET.

Consumer
spending in the
U.S. is
expected to
pick up the
pace with
retail sales
rising by 0.5%
m/m in
February, up
from 0.3% m/m
in
January.

9. USD-
U.S. Consumer
Sentiment,
the University
of Michigan's
monthly survey
of 500
households on
their financial
conditions and
outlook of the
economy, Fri.,
Mar. 11, 9:55
am, ET.

The
U.S. consumers
are forecast to
remain
optimistic for
another month
as the
preliminary
estimate of the
consumer
sentiment index
reaches 77.3 in
March, slightly
lower than the
77.5 reading in
the previous
month.

10. EUR-
European Union
Summit,
a meeting of EU
leaders to
discuss the
impact of the
unrest in North
Africa and the
Middle East, as
well as the
debt crisis and
economic
issues, Fri.,
Mar. 11, All
Day
Consequence.

Although the
main focus of
the EU Summit
will be the
turmoil in
Libya and the
Middle East and
its impact on
the economy, we
could also see
discussions on
how to contain
the debt
crisis,
counting
possible
expansion of
the European
Financial
Stability
Facility fund.
With the 5-year
CDS on
Portuguese
sovereign debt
back on the
rise and debt
obligations
coming due for
Spain and
Portugal,
should the
summit fail to
deliver an
agreement on
permanent
solutions to
stop the debt
crisis from
spreading, the
euro could
suffer the
consequences.

Source: Fxstreet.com

Weekly Focus: Oops - They Did it Again

2011-03-05T01:02:00.001-08:00

!! About The Author !!

*Danske Bank*

Disclaimer

This publication has been prepared by Danske Markets for information
purposes only. It is not an offer or solicitation of any offer to
purchase or sell any financial instrument. Whilst reasonable care has
been taken to ensure that its contents are not untrue or misleading,
no representation is made as to its accuracy or completeness and no
liability is accepted for any loss arising from reliance on it. Danske
Bank, its affiliates or staff, may perform services for, solicit
business from, hold long or short positions in, or otherwise be
interested in the investments (including derivatives), of any issuer
mentioned herein. Danske Markets´ research analysts are not permitted
to invest in securities under coverage in their research sector. This
publication is not intended for private customers in the UK or any
person in the US. Danske Markets is a division of Danske Bank A/S,
which is regulated by FSA for the conduct of designated investment
business in the UK and is a member of the London Stock Exchange.
Copyright (©) Danske Bank A/S. All rights reserved. This publication
is protected by copyright and may not be reproduced in whole or in
part without permission.

Source: ActionForex.Com

Trading Between The 20 and 50 Daily EMA's.....

2011-03-03T15:54:00.004-08:00

And that's all that is vacant on. Nothing more and nothing less.
Nothing bearish at this point in time until the bears can remove 2722
on the Nasdaq and 1290 on the S&P 500. Those are the respective 50-day
exponential moving averages. The bears have made one excellent step in
terms of the huge gap down off the Doji topping candle but have yet to
follow through. This is classic action within a bull market. The bears
make some headway but never seem to be able to follow through. It
doesn't matter what type of terrible news hits the market. All that
matters is that we're in a bull market, and in bull markets, terrible
news gets rejected with the markets finding a way to hold up against
all odds. The bears have to be very frustrated at this moment in time
because today was their opportunity. Today was their day. Oil went to
$102 per barrel. The market did nothing but pull back off the highs.
No plunge. No huge go lower. One would have expected that to happen,
but it just didn't. Bull market action.

You get the feeling the bears just gave up today after the go down
that didn't follow through. Who can blame them really. Not me for one.
If I was a bear I would likely walk away as well. Why bother lynching
in with shorts when the worst possible news won't take this market
down! So we know the index charts have lost their 20-day exponential
moving averages but are bouncing a bit above their 50-day exponential
moving averages. Stuck between the two moving averages for now while
it makes up its mind about where it wants to go. That's all we have
for now. Stuck between moving averages, but that's not terrible news.
It allows us to sit back and learn about what's coming. Lots to learn
over the next day or two.

Now let's go further than the frustration the bears are feeling. Is
all lost for the bears? Not at all. Poor action in the transports,
iShares Dow Jones Transportation Average (IYT), gives them real hope.
The cost of oil is killing that sector, which is now trading below its
50-day exponential moving average. If the transports continue to trade
poorly it's likely the rest of the market will follow as so many areas
of the market are dependent on the action from those transport stocks.
There are also many leading stocks now trading below their 50-day
exponential moving averages from all areas of this market.

This tells me things won't be simple for too much upside small-term as
things settle out.
The price of oil is a real headache for this market. No one will
argue with that. Even our frothy leader, Mr. Bernanke, said as much
today as he was language about the condition of our economy. He said
that oil must not stay at these levels for too long or it will drag
down the consumer, and thus, the economy, and, of course, that would
be devastating for stocks. Hard to argue that we would not hold up too
well with oil at 100$, or more, for a very prolonged period of time.
The bears have some possibilities here small-term, and thus, the
reason why this market is still unclear overall.

When you look at the individual sector daily charts, you can see the
lines in the sand for both sides. In most cases, the bears have the
20-day exponential moving averages above current price along with that
huge gap down from the top the other day. When looking down at current
price, we see the bulls have the 50-day exponential moving average as
support along with gaps just above that price. Each side with two
weapons of price on their sides. Gaps as one and a moving average as
the other. Talk about a stand off. This is really what's making things
so complicated for anyone who's playing too much. It's making lots of
whipsaw. Whipsaw is emotional, thus, the more you play in this type of
environment the more likely you are to make terrible exiting
decisions.

Also, because things are so unclear, you want to wait and make sure
you have a handle on where we are headed for the small-term, and that,
too, isn't exactly to grasp. The charts say a modest more waiting
before getting aggressive. To small, you'd have to see a 50-day
exponential moving average breakdown and back test on weak
oscillators. To go aggressively long, you'd need to see that upper gap
start to get taken out. Keep it simple. Wait for more insight to come
shortly.

Fascinating times for sure folks. Some bearish small-term signals and
some bullish as well. The action today wasn't fantastic to be sure.
Didn't retrace too much of yesterday's losses, but we did hold on to
some gains in the face of terrible action in the world of oil prices.
As we all know by now, there are times to be aggressive and there are
times to be less so, and this is beyond doubt a less so time. It
doesn't mean you should have any exposure. It just means you shouldn't
have too much and get caught up emotionally.
Equal triangles are very hard at best so be aware of that. Lots of
whipsaw means things remain unclear, and so we should adapt to that
until things get far more obvious. Sometimes that takes more time than
we'd like, but safety first at all times.

Source: Fxstreet.com

The currency markets ended last week on a mixed tone

2011-03-03T15:54:00.003-08:00

*USD –* The currency markets finished last week on a mixed tone. In
the US Q4 GDP was unexpectedly revised down to a 2.8% annualized gain.
A noteworthy area of revisions was personal utilization, now estimated
to have risen at a 4.1% pace, while final domestic demand was revised
down to a 3.1% pace.
The dollar's result to the data was moderately negative. This
morning, the USD fell to its lowest level since November against six
major US trade partners on bets Centralized Reserve Chairman Ben
Bernanke will signal to Congress the central bank plans to maintain
economic stimulus at his semi-annual testimony on monetary policy
tomorrow. The dollar remained lower versus most major peers even after
the Institute for Supply Management-Chicago Inc.'s business
barometer unexpectedly rose to 71.2 this month, the highest level
since July 1988, from 68.8 in January. U.S. consumer spending rose
less than forecast in January, accelerating 0.2% amid increasing fuel
and food costs, data from the Commerce Department showed today.
Another report showed European inflation stayed above the ECB's 2%
target for a following month in January. In the US, all eyes will be
on Friday's nonfarm payrolls report for February.
The data is expected to show a gain of 160,000 (up from 36,000 in
January), with the ADP report (Wednesday) and weekly jobless claims
(Thursday) providing some advance signals. The unemployment rate,
meanwhile, is forecast to tick back up to 9.1% from 9.0%. Also closely
watched in the US will be February's manufacturing and air force
ISMs, with strong numbers anticipated.

*EUR –* EUR is surprisingly strong, gaining 0.4% against the USD and
moving towards a break above the February 2nd, 1.3862 high. This
week's highlight will come with the ECB meeting on Thursday, as
market participants have been building their expectations for a shift
in tone from President Trichet. But, today's softer than expected
January CPI print should provide some relief to inflation hawks. It
was a significant drop in clothing costs (-0.6% y/y and -13.3% m/m)
that was responsible for the largest part of downward difficulty.
Still with oil having risen significantly over the last week,
inflationary pressures are likely to continue. In tomorrow's
European session, Eurostat will release its February CPI estimate
(consensus is calling for 2.4% y/y). Near-term risk for EUR are the
slew of US data today and tomorrow's European PMI and CPI estimate
releases.

*GBP –* Sterling is trading at recent highs as rising oil prices
have stoked bets that the Bank of England will be mandatory to bring
to somebody's attention rates this year to curb inflation. CPI growth,
which was 4% last month, has been above the central bank's target of
2% for 14 consecutive months. The futures market is pricing in a 67
basis point rise in small term interest rates by the end of the year,
with the first go coming as ahead of schedule as May.
This is the third time in the last two weeks we have traded at or near
1.6250 – with a break of that level resulting in a go toward 1.6400.

*JPY –* The yen is slightly weaker today with Japan's January
industrial production increasing 2.4% m/m and 4.7%y/y, well below
consensus, while housing starts rose just 2.7% y/y. But, somewhat
offsetting this was surprisingly strong retail trade, which increased
4.1% m/m and 0.1% y/y. There is limited data expected for the rest of
this week, which is likely to leave the focus for yen on risk aversion
and movement in the US-Japan bond yield spreads.

*CAD –* The loonie started the week at a three-year high against the
USD after a report showed that Canada's economy grew more than
forecast on surging exports. GDP growth registered 3.3% in Q4, led by
a 30% increase in crude oil shipments, causing many investors to start
pricing in a hike in Canadian interest rates. But, continued
geopolitical risks, weakening Canadian retail sales, a slower than
previously forecast US expansion and a stronger CAD may cause the BoC
to pause before tightening policy. Elevated oil prices will buoy the
Canadian dollar in the near term, but unless the economy shows clear
signs of continued recovery, its gains may only be temporary.

*MXN –* The Mexican peso continued to advance against the greenback
last week as geopolitical factors surrounding the Middle East boosted
crude oil prices rise above $97/bbl. As long term effects of political
unrest remain unclear, the crude oil market along with emerging market
currencies should remain supported in the near-term. Internally,
Mexico showed a very strong increase in exports in January of 28% y/y,
as evidence of trade weigh figures, which posted a gain of 63mm vs.
the previous -218mm.
Consumer price index for the following week of February also showed
positive growth of 0.21% vs. the previous 0.17%.

*AUD* *–* The AUD starts the week back towards the top of its recent
ranges as investors' risk appetite recovers. While fears over unrest
in North Africa and the Middle East have begun to subside, commodity
prices have remained at elevated levels. Higher prices for raw goods
provide support for the Aussie, but a strong currency does threaten
the country's export industry as Australian goods become relatively
more expensive. In the week ahead, investors will take note of
Australian retail sales, current account weigh, housing market data
and GDP. High commodity prices, resurgent risk appetite, and a hawkish
outlook from the RBA will likely keep the AUD well supported, at least
for the near term.

*Last Week's Currency Highs and Lows and Forecast*

*U.S. Economic Indicators*

Source: Fxstreet.com

U.S. Initial Jobless Claims Fall More than Expected in Latest Week

2011-03-03T15:54:00.001-08:00

Early unemployment insurance claims fell by 20,000 to 368,000 for the
week ending February 26, 2011, thereby building further on the
previous week's 25,000 drop to a revised 388,000 level (initially
reported as 391,000) and marking the lowest level for claims since May
2008. The improvement in the latest week was contrary to market
expectations for claims to climb to a 395,000 level. The four-week
moving average of early claims, which normally provides a better
indication of the underlying trend in labour markets, fell for the
third time in four weeks, dropping to 388,500 from 401,250 the prior
week and diminishing below 400,000 for the first time since July 2008.
Continuing claims (for the week ending February 19, 2011) fell 59,000
to 3,774,000 from 3,883,000 last week.

The decline in the four-week moving average of early claims continues
the downward trend in the indicator evident since August 2010. This
trend was interrupted temporarily in January, reflecting the effect of
terrible weather that was likely a factor sending the level of claims
up to a near-term 457,000 peak level in the month. This inclement
weather appeared to be reflected in a 32,000 decline in construction
employment in January 2011 that limited the overall gain in private
employment to a disappointing 50,000 in the month. Today's report
will likely have a limited effect on expectations ahead of
tomorrow's payroll employment report for February 2011 since the
payroll employment survey was conducted earlier in the month (the
payroll survey is conducted in the week containing the twelfth day of
the month); but, given the drop in claims to a 413,000 level in the
February survey week, along with the surge in the ISM manufacturing
employment index to its highest level in 38 years in the month, bodes
well for employment growth to have accelerated in February. We expect
that a bounce back in construction employment from a weather-depressed
level in January will contribute to private employment rising 175,000
in the month. Hiring at the government level is likely to remain weak,
but this will not prevent a 160,000 gain in overall payroll employment
in February following the 36,000 increase in January.

Source: ActionForex.Com

EUR/USD – Awesome Oscillator Shows Divergence

2011-03-03T04:39:00.003-08:00

*EUR/USD Current Price:* 1.3853

*Daily Pivots:* S3: 1.3594; S2: 1.3684; S1: 1.3775; P: 1.3833; R1:
1.3924; R2: 1.3983; R3: 1.4042

*EUR/USD:* The go down from the high of 1.3863 on 02/02/2011 unfolded
in 3 waves, ending at 1.3428, signaling that a go up would follow this
correction down. What transpired looks to be still unfolding as price
has retested the 1.3863 to reach a high of 1.3890. We will now use
1.3890 as the key level which must be taken out for further upside
potential. If 1.3890 is taken out then we will likely see slightly
higher levels up to the 1.4000 level. As long as 1.4283 is not
breached, the EUR/USD has room to go lower by all counts. The
indicators I placed on the 4-hour EUR/USD work very well together. I
want to highlight the awe-inspiring oscillator, which shows quadruple
divergence on this time frame. Similarly, we are at the top end of the
Bollinger band, and the Williams %R is topping out. This tells me that
we may make a new high, but it should be small-lived. If we don't
take out 1.3890, then we will drop from current levels and right the
entire go up from the start at 1.3428. We use Elliott Wave to get a
roadmap of what's to follow, but EW is simply a science of patterns
which repeat fractally in every time frame. Once a trader understands
the patterns, one can trade any time frame for profits! Sometimes when
the road is muddy in the larger scenario, and there are multiple paths
to take, it makes sense to drill down to a lower time frame to make
day trading profits and call it a day!

If you are an advanced Forex trader and want to learn Elliott Wave
analysis, please contact me. If you are interested in signing up for a
FREE 60-minute Starter Session, to assess where you are in your
trading, please send an send by e-mail to jody@fxtradersedge.com.
Pleased Trading!

Source: Fxstreet.com

Oil Versus S&P

2011-03-03T04:39:00.001-08:00

!! Jack Steiman, On Playing the (Up)Trend, but Never Letting Your
Guard Down (SwingTradeOnline) !!

The market could beyond doubt use more promotion across the board to
unwind things on those oscillators to oversold. No guarantee we get
it, but the line in the sand is clearly drawn here. The Nasdaq is
being protected by the 20-day exponential moving average down to the
50-day with gaps as well to help out while that huge open gap down at
2808 is capping things on the way up.

In other words 2715 to 2770 is protecting the downside from getting
out of hand, while 2808 is putting the breaks on things. So how does
one play such as market? Well it's pretty simple really. The closer
you get to support, and as long as the oscillators align properly, the
simpler it is to go long. You don't really want to small very much, if
at all, because the primary trend is higher. The closer we get to 2808
the more you lighten up on ancient plays and refrain from taking on
new ones. Only a strong, clear above 2808 changes that picture. Buy
weakness. Lighten up at resistance.

Will this market ever have a stronger pullback? Very possible, and
still in play for sure, but when studying the charts, you can see why
that's been a hard thing for the bears to accomplish. There are so
many open gaps on the way up along with those strong moving averages
that it's vacant to take some further than consequence unforeseen to
get this market to take out some of those support areas. It can be the
Jobs Report this Friday. It can be some civil unrest from overseas. No
way to know for sure, but this market won't just quit for the sake of
being overbought, it appears. It's vacant to need a strong further
than catalyst.

If the market would allow at least the Nasdaq to break decently below
its 50-day exponential moving average now at 2720, the bears would be
able to rush in and take things down quicker and harder. This would
set up a much better, more aggressive buying opportunity. This market
could use a healthful dose of dread, but who knows when we'll get it.
We'll get it, but does it come from here or Nasdaq 3000? No one knows
for sure, but we have to be on alert since it could come at any
moment. Play the trend in place, but never let your guard down.

When looking at the next huge go to come you have to recognize where
the critical junctures are. There's no inquiry it's the 50-day
exponential moving average on the Nasdaq. Sure, the 20-day exponential
moving average is first in line at 2771. Then the gap at 2751. But in
truth the bears will have done nothing if they can't take out the
50-day exponential moving average. That's permanently the line in the
sand. So if you're bearish, there's no reason to celebrate if you can
remove 2771 on a closing basis. Only 2720 will do that trick.

For the bulls, only when we can blow through 2808 can you start to
feel you have something to get excited about. But that's just step
one. That's the bottom of the gap and not the top of the gap.
Ultimately, the top of the gap will have to be taken out. The bottom
is vital because it was on such a huge gap down, and we did fail ten
points below that level today. But, the top of the gap is at 2833.
Like I said, a huge gap.
Everything in between is noise. Again, buy on weakness. I wouldn't
small much right here near the top because we're in that primary bull
market -- thus, adapt to where we are and play appropriately and
you'll do just fine.

!! Mike Paulenoff, On Oil Versus S&P (MPTrader) !!

Away from each other from everyone's thing on Bernanke's Congressional
testimony later Tuesday morning, which certainly has potential to be a
market moving consequence, let's notice the patterns that have
developed in WTI and Brent nearby oil futures.

Both price structures have carved out sideways coil-type formations
since last Thursday, which could represent either bullish or bearish
continuation patterns. In that the coils have emerged well below last
week's highs, my inclination is to handle them as potential bearish
continuation patterns, which by definition should break to the
downside, violating key near term support at $95 (WTI) and at $109.60
(Brent).

Such a scenario presumably will have a positive impact on the S&P
500-- all else being equal. That said, but, in the geopolitically
charged world in which we currently find ourselves, anticipatory
sample analysis goes just so far. If circumstances in Libya or
elsewhere in the Mid-East suddenly flare up, and oil hurdles key near
term resistance at $100 WTI and $115 Brent, then we should brace
ourselves for a run at the prior highs, and that likely will have a
negative impact on the S&P.

Yes, lots of moving parts out there today which will require us to be
watching and listening closely in the upcoming hours.

!! Sinisa Persich, On our Free Stock Pick: VZ (TraderHR) !!

Verizon Communications Inc. (VZ) today broke out of a bullish pennant
formation on a confirmation one-day gain this year of 2.64%. The stock
had been in consolidation for nearly two months after a fantastic
performance in December.

Today's go initiated new momentum which will doubtless test the
52-week high in the 37.50 area. It's also likely VZ will see a go even
further than that level to the next resistance area, which is set at
38.50.

Preferred access (buy stop) price is at 37.10, with a stop-loss price
at 36.25.

!! Harry Boxer, On 4 Charts to Watch (TheTechTrader) !!

The market continues to press higher despite a midday sell off Monday.
They closed with solid gains for the day with technicals better on
NYSE than Nasdaq. Nasdaq was kind of sloppy and may be some cause for
worry.
We'll just have to see how it goes. In a day or so we may look at the
small side, but for now stocks still continue to look strong.

Allot Communications Ltd. (ALLT) is in a gorgeous rising channel, and
has been for months now. It finally broke out of its 2-week flag on a
sharp thrust in volume, nearly 750,000 shares, up 1.13, or 7.6%. A
clean breakout should lead this up toward the 18 1/2 - 19 zone. That's
our next trading target.

Coeur d`Alene Mines Corporation (CDE) had a huge day Monday, breaking
across a key level of resistance with a thrust in volume. It traded
the heaviest volume in a very long time, 8.6 million, up 3.86, or
nearly 14%. That's the highest price that stock has closed in about
three years. At this point I'm looking for a go into the mid 30s.

Royale Energy Inc. (ROYL) is one of the strongest in the junior oils.
While some of the others have backed off, this stock continues to go
higher, success my target of 6.50 Monday. My lesser target is about 7
1/2. That's what I'll be looking for next. It needs to be stopped at
4.90, in my opinion.

Crosstex Energy Inc. (XTXI) popped across key resistance Monday vacant
back a year and a half. This could mean that an extension of this go
to the top of this channel ultimately could take place down the road.
We'll set a long-term target at 25, small-term target at around 13,
intermediate at 18.

Other stocks in our Charts of the Day video are Apricus Biosciences,
Inc. (APRI), Abraxas Petroleum Corp. (AXAS), Dynamic Materials Corp.
(BOOM), Columbia Laboratories Inc. (CBRX), Exelixis, Inc. (EXEL),
Fantastic Panther Silver Limited Or (GPL), Hardinge Inc. (HDNG), ION
Geophysical Corporation (IO), Kodiak Oil & Gas Corp. (KOG), NXP
Semiconductors NV (NXPI), Pulse Electronics Corporation C (PULS),
SodaStream International Ltd. (SODA), Samson Oil & Gas Limited (SSN),
Transition Therapeutics Inc. (TTHI), Vertex Pharmaceuticals
Incorporated (VRTX).

Source: Fxstreet.com

China Weekly: Slower Growth is Latest Policy to Tackle Inflation

2011-03-02T17:50:00.001-08:00

CHINA WEEKLY

A couple of fascinating announcements and data releases over the past
7-days will be the focus of our weekly look at Plates. Starting with
Premier Wen Jiabao's comments adage that Plates will target slower
economic growth over the next fives years than it has done in the
past five, in efforts to improve the quality of that growth and ease
inflationary pressures. Plates, he said, will aim to grow at a pace
of 7% annually in the period from 2011 to 2015, compared with its
embattled growth of 7.5% in the previous five years, when, according
to WSJ data, the nation's economy really grew at a rate of 11.1%
between 2006 and 2010. Therefore, as we are sure is becoming apparent
this projection is more of a floor for the pace at which the country
should grow, not a target, since, as a mentor of mine pointed out
'Beijing does not make binding targets'. The new projections are
consistent with statements made by officials over the last few years
and should be viewed more as a signal of Beijing's intentions over
the standard-term; a need to go away from reliance on
low-value-added, gray polluting industries and a promotion of
domestic utilization. Therefore, while much hay has been made in the
press about slower growth in Plates we recommend that these numbers
aren't taken too seriously. We are encouraged, but, that Plates is
now shifting focus away from maintaining white-hot growth numbers
since such growth comes with significant risk of 'thump and burn'
whereas a slower, higher quality growth which accompanied by stronger
domestic demand will make sure longer term stability.

Moving on, Chinese manufacturing growth, released earlier this week
showed that manufacturing activity slowed in February as inflationary
pressures acted as a negative drag on demand. Plates's official PMI
released by the Plates Federation of Logistics & Purchasing came in at
52.2 down from 52.9 in January, while the privately compiled PMI by
HSBC and Markit Economics hit a 7-month low of 51.7 from 54.5 in
January. It is vital to mention that any reading above 50 indicates
that the sector is still in expansion, but as we can see the expansion
is slowing. HSBC said the reading was in "stark contrast" to a
year earlier, where the index was near a confirmation high. HSBC also
said that the reading was below the long-run trend of 52.3 and was the
steepest one month drop since the series started in April 2004. A key
trend that emerged from the survey was manufacturers' willingness to
pass along wholesale inflation to prices for completed goods. HSBC's
PMI showed that out prices rose at the fastest pace in three months as
costs were passed along. While it is certainly right the economy is in
a cooling trend, the numbers for February were somewhat misleading
since if offers a shot of factory activity during a month when
businesses shut down across the country to mark the Chinese Lunar New
Year Holiday.

Finally, the state-owned People's Daily reported last week that
Plates's new yuan loans for 2011 will likely be around 7 trillion
yen, citing central bank sources. New yuan loans really 7.95 trillion
in 2010. The central bank also unveiled a new measures called 'Total
Social Financing' to exchange the ancient measure of new yuan loans.
Bank of Plates Chairman Xiao Gang also said there is limited room for
Plates to further increase banks' reserve requirement rations, as
many tiny and standard-sized banks are experiencing intense capital
shortages. "If Plates keeps hiking (the RRR rate) substantially,
liquidity might reverse, which would have a negative impact on the
financial system" Xiao said. But, Xiao said there is still room for
further interest rate hikes, and raising interest rates at an
appropriate time can help curb inflation and stabilize the banking
system. If these comments are to be believed and banks of all sizes
are lacking capital we may be seeing the end of RRR hikes, and since
as we have discussed in various past pieces the limited impact of
interest rates on liquidity it is understandable that Beijing is in
suspense that slower growth will help tamp down inflationary pressures
and is pursuing a slower growth rate to achieve this goal.

Written by Jonathan Granby, DailyFX Research Team

Source: Dailyfx.com

The Euro is in an interesting situation right now

2011-03-01T15:44:00.001-08:00

!! Indices !!

Stocks broke three consecutive sessions of losses to end higher amid
light volume, led by financial and tech stocks, and as oil prices
stabilized. The *Dow Jones Industrial Average* gained 61.95 points, or
0.5 percent, Friday, to close at 12,130.45. For the week, the
blue-chip index fell 260.8 points, or 2.1 percent, the largest weekly
percentage drop since mid-November. The *S&P 500* gained 13.78 points,
or 1.06 percent on Friday to close at 1,319.88. For the week, the
broad market index fell 23.13 points or 1.72 percent, the largest
weekly percentage drop since mid-November. The tech-gray NASDAQ gained
43.15 points, or 1.6 percent, to close at 2,781.05. For the week, the
NASDAQ fell 52.90 points or 1.9 percent, its largest weekly percentage
drop since the week of Jan. 21.

!! FOREX !!

The Euro is in an fascinating circumstances right now. Over the coming
month, we are jumping from one major essential consequence to another
week after week. And, these particular affairs are far more
influential than just a singular economic indicator; they play to the
very core of the currency's essential appeal.
Over the past few months, the Euro has marked a notable departure from
the financial concerns that plagued the region's outlook on and off
since the Greek bailout fueled fears that the EMU itself was at risk.
Yet, just in the last week or so, we have really seen the neutral
sentiment turn bullish with interest rate expectations leveraging the
potential for capital and yield returns from this shared currency to a
level that is well further than many of its peers.

!! Commodities !!

*Oil prices traded flat,* with U.S. light crude closing above $97 a
barrel, after Saudi Arabia made assurances that it can pump more oil
to cover for a fall in Libyan exports caused by the turmoil in the
country. Meanwhile, gold *rose near $1,410 an ounce* and was on pace
for a fourth straight week of gains.

!! Equities !!

*Chesapeake Energy* was the best performing energy stock, rising 16.2
percent for the week. Several personal computer stocks also soared:
*Intel , Micron* and *AMD* all gained, while the *Philadelphia
Semiconductor index* rose nearly 2 percent.

Financials were also huge gainers for the day, *Wells Fargo* climbed
after Goldman raised its rating on the stock to "buy" from
"neutral," adage the bank could announce both a rise in its
dividend and a stock buyback, while the brokerage cut *Citigroup* to
"neutral," adage it doesn't see a near-term catalyst for the
company.

Source: Fxstreet.com

If you can dream – and not make dreams your master

2011-03-01T03:24:00.001-08:00

Last week we saw a bombshell drop on the UK economy, with the fourth
quarter growth figure shrinking to -0.6%. This was of poorer quality
than the Office for National Statistics had expected, at -0.5%. The
finger of blame is being pointed to the huge freeze in December but
apparently the economy would have shrunk by 0.1% even without the icy
atmosphere. Naturally this would encourage worries that the economy
was floundering even before the VAT hike kicked in and the spending
cuts deepen in April. It is vital to note that the terrible weather
makes data hard to read and so we have a crossroad ahead, one way
points towards the snow deluge which could have baffled data. While
the other path is possibly besieged with survey's flaw to see an
vital turning point in the economy. Either way, this news hurt
sterling as it fell to a three month low against euro.

These fears over the economic recovery have caused retailers and other
businesses to heap difficulty on George Osborne as they clamour for an
efficient growth strategy in next month's budget. The have
questioned the chancellor to lessen future burdens as they are still
bruised from rises in national insurance, business rates and smallest
wage.

As more evacuees return from Libya over the past few days it has
emerged that Osborne has frozen Colonel Gaddafi's British based
assets, as well as five members of his family. This comes at the same
time as treasury and custom officials ramp up their efforts to make
sure no uncirculated Libyan currency leaves the UK. Apparently 800
Britons have left Libya over the past few days and although some
remain, there are no longer 'large numbers' in the country.

There is not a huge amount to watch out for in terms of UK data this
week, it is being overshadowed by eurozone and US releases. Keep an
eye on PMI Manufacturing, Air force and Construction, as well as
mortgage approvals tomorrow.

Have a lovely week!

!! Jeremy's Trade of the Week !!

This week's trade of the week is a Leveraged Convertible forward
with the client wanting to protect a 6 month budget over the coming
spring period. He buys euros and sells sterling.

The client was able to achieve a worst case rate of 1.1600 on his
selection which allows the client to benefit all the way up to a rate
of 1.21. This rate increases by 1 cent every month i.e. month 1 has a
barrier of 1.21, the 2nd 1.22, the 3rd 1.23 etc. Should the rate touch
the barrier level during the window period (1 month before the expiry
date) then that month's structure reverts to a forward at 1.1600 in
1.5 times the amount needed. i.e. if you originally hedged a monthly
exposure of EUR200k then you would need to buy EUR300k.

This strategy requires no premium, and the use of leverage allowed the
client to increase both his level of protection and the barriers that
he can benefit it up to. As there is a potential further strengthening
for sterling in the future, it provides a balanced upside for this
potential, while guaranteeing a tight WCR.

Source: Fxstreet.com

Forex Strategy Outlook: Volatility Favors Breakout Trading in Japanese Yen

2011-03-01T03:24:00.000-08:00

A pickup in US Dollar volatility expectations points to quick currency
moves in the week ahead, favoring Breakout and Momentum trading
strategies in key currency pairs.

DailyFX+ System Trading Signals – It was a solid week of performance
for Breakout2 and Range2 trading strategies, while Momentum1 similarly
posted respectable gains on key US Dollar pairs. The fact that systems
of all three different trading styles held firm underlines recent
market indecision. Volatility expectations continue to drop near their
lowest levels since the onset of the financial crisis in 2008, and
risks of large currency moves are low. That said, 1-week expectations
have jumped noticeably ahead of key economic data and our strategy
bias takes this into account on a per-currency basis.

To gain a superior understanding of all six trading systems, view my
recent presentation on SSI and the trading signals on our FXCM Digital
Expo page.

DailyFX Individual Currency Pair Conditions Synopsis

Small-term volatility expectations have bounced noticeably ahead of
major global consequence risk in the week ahead, but our 3-month
volatility index remains near its lowest levels since the onset of the
global financial crisis in 2008. The weird mix leaves us in somewhat
of an uncomfortable spot as far as trading biases are concerned.
Instead of a market-wide trading bias, it seems more fitting to look
at strategy biases on a per-currency level.

Benchmark Trading Systems

Data and Backtest Results Generated using FXCM Strategy Trader

Mixed market conditions are similarly clear in benchmark strategy
performance, with our RSI, Moving Average, and Channel Breakout
systems registering gains in the past week. Outlook is subsequently
honestly mixed.

Written by David Rodríguez, Quantitative Strategist for DailyFX.com,
drodriguez@dailyfx.com

To be added to this author's distribution list, send an e-mail
subject line "Distribution list" to drodriguez@dailyfx.com

Definitions

Range High – 90-day closing high.

Range Low – 90-day closing low.

Last – Current market price.

OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN
THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH
CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS. Any opinions, news,
research, analyses, prices, or other information contained on this
website is provided as general market commentary, and does not
constitute investment advice. The FXCM group will not accept liability
for any loss or hurt, counting without limitation to, any loss of
profit, which may arise directly or indirectly from use of or reliance
contained in the trading signals, or in any accompanying chart
analyses.

Source: Dailyfx.com

US Open The Week Under Pressure, Dollar Strong

2011-02-23T06:55:00.002-08:00

*U.S. Dollar* Trading (USD) when the US session opened a sharp sell
off was seen in equities which sent the Dollar higher against risk
assets on safe haven demands. The middle east turmoil threatens to
derail the recent 3 month rally seen in global markets especially if
uprisings spread to Iran or Saudi Arabia. In US stocks, DJIA -178
points closing at 12212, S&P -27 points closing at 1315 and NASDAQ -77
points closing at 2756. Looking ahead, January Existing Home Sales
forecast at 5.24mln vs. 5.28mn previously.

The *Euro* (EUR) fell sharply in Asia on the general risk aversion and
Euro Debt concerns but in excellent health sharply in in the European
session on more comments from ECB officials regarding interest rate
hikes to counter inflation. Overall the EUR/USD traded with a low of
1.3523 and a high of 1.3715 before closing the day around 1.3675 in
the New York session. Looking ahead, December Industrial Orders -0.8%
vs. 2.1%.

The *Japanese Yen* (JPY) had a volatile trading day with risk aversion
sending the Yen higher across the board. The USD/JPY was able to spike
higher in Asia to Y83.40 after Temperamental's place Japan on negative
watch. Overall the USD/JPY traded with a low of 82.99 and a high of
83.55 before closing the day around 83.15 in the New York session.
Update January Trade Weigh at -471bn vs. 60bn forecast.

The *Sterling* (GBP) was under gray promotion difficulty against all
the majors with risk turned off. Cable went back to 1.6100 and EUR/GBP
went back towards 0.8500. GBP/JPY was also under difficulty as the
recent rally reversed. Overall the GBP/USD traded with a low of 1.6099
and a high of 1.6231 before closing the day at 1.6130 in the New York
session.

The *Australian Dollar* (AUD) broke through parity as the market sold
the risk currency heavily across the board. Adding to the promotion
difficulty was news of a major Earth Quake in the New Zealand which
hurt the NZD and overflowed into the Aussie as well. Overall the
AUD/USD traded with a low of 0.9965 and a high of 1.0087 before
closing the day at 0.9990 in the New York session.

*Oil & Gold* (XAU) profit taking kept the precious metal close to
$1400. Overall trading with a low of USD$1392 and high of USD $1411
before ending the New York session at USD$1398 an ounce. Oil finished
lower but was extremely volatile. WTI Oil Closed -$2.10 at $95.50 a
barrel.

Source: ActionForex.Com

China Weekly: Concerns Mount Over Slowing Growth; PBOC Sends Mixed Signals on Yuan

2011-02-23T06:55:00.001-08:00

CHINA WEEKLY

It has been a busy week in Plates with several vital developments to
take note of, we start by looking at the comments by the central bank
governor Zhou Xiaochuan, who said that Plates has no plans to change
the rate of appreciation of its currency in spite of calls to
accelerate the process. The comments, made on the sidelines of the G20
meeting over the weekend, articulated that Plates will stick to its
plot for a gradual internationalization of its currency adage there
has been no change to its strategy. Zhou was cited as adage "the
topic is quite complicated and we have no new announcements so far"
offering no hints of changes to the pace of appreciation. The comments
by the central bank governor are certainly not a surprise to us and
Zhou certainly towed the line, but in light of other recent actions by
the central bank and Plates's general push in the direction of
internationalizing the yuan we had been hopeful for a modest more from
the governor.

Plates's push for international acceptance of the yuan has expanded
in recent weeks to embrace three, synchronized steps: currency outflow
to overseas investments, offsure yuan market in Hong Kong and
backflows of yuan to Plates as foreign investment. The central bank,
which is leading the governments' go-global campaign, expanded a
pilot curriculum for yuan-based settlement for thwart-border trade in
January with the release of a related measure covering foreign direct
investments by Chinese companies. And, in anticipation of the third
go-global step, which is still said to be in the plotting stage, a
source close to the development said research is being conducted for a
curriculum that would allow yuan-denominated investment in Plates by
foreign firms to facilitate currency back-flow. The source also said
that research has involved various government ministries ranging from
the Ministry of Finance to the State Administration for Industry and
Commerce, noting that in the best case scenario the government's
back-flow policy could be ready in six months. Overseas investors are
sure to be pleased by the direction that the central bank is moving in
as it would simplify what's now a complicated currency exchange
process. Also, further availability of the yuan is likely to please
many since the yuan now is in small supply and there are few channels
for foreign investors to access yuan funds. The central bank's
choice to expand the trade settlement project while adding the
anti-speculator step and studying back-flow policy came after
Plates's annual quota for yuan conversions for thwart-border trade
settlements assigned to the Bank of Plates-Hong Kong was suddenly
exhausted last October. Immediately after that incident, officials
from the Hong Kong Monetary Power (HKMA) met with counterparts at the
central bank and Plates Securities Regulatory Commission and chose to
step up activities encouraging overseas markets for the yuan and
further promote the offsure yuan market in Hong Kong. Taking into
account these developments in recent weeks the PBoC governor's
comments (above) on the sidelines of the G20 sent mixed messages about
the central bank's policy regarding the internationalization of the
yuan, we will therefore follow the age ancient phrase; actions speak
louder than words and trust the actions taken by the central bank
rather than a regurgitated party line.

Moving on, Plates's manufacturing sector slipped to a seven-month
low in February , though activity remains expansionary, according to a
flash reading of manufacturing PMI, which stood at 51.5 down from 54.5
in January (any reading about 50 is expansionary). In a proclamation
released by HSBC and Markit, who conducted the survey, they said
"flash PMI data points to a meaningful slowdown in the industrial
sector in February, the Chinese New Year may be a factor but not the
only reason. It also implies that quantative tightening is starting to
filter through yet more still needs to be done to check inflation".
The implications of this proclamation could be rather dire, we have
mentioned in this report repeatedly that Beijing has a very hard task
of tamping down inflationary difficulty without overstepping their
bounds and affecting growth too much. While it has been made known
that Beijing is no longer focused exclusively on maintaining white-hot
growth and dealing with inflation has become a priority there is a
dread that measures enacted to tackle inflation will be draconian in
nature and will slow growth too sharply making a ripple effect across
the global economy. The other selection, of not tackling inflation
effectively enough, has rather severe implications for the Chinese
economy too. Therefore, we will continue to watch the actions of the
administration carefully and hope that they manage to walk the fine
line between rampant inflation and a hard landing for the economy.
Growth is already forecast to be lower than the average of 9.5% over
the last decade moderating to 8.1% annually. While the probability of
growth in Plates slowing to below 5% a year, often cited as a doomsday
scenario, is still relatively remote, Morgan Stanley said in a report
last week that "overly aggressive tightening of monetary policy"
could be a potential factor to derail Plates's growth.

Finally, talking of aggressive tightening, the central late last
Friday hiked the reserve ratio requirement (RRR) for banks by 0.5%
bringing the official RRR to a confirmation 19.5% for huge banks. This
was the following RRR hike of 2011 and comes just a week after the
central bank raised the key interest rate by 0.25%. The hike will
drain about 350 billion yuan ($53.24 billon) from the banking system,
according to estimates by Bank of America-Merrill Lynch.

Written by Jonathan Granby, DailyFX Research Team

Source: Dailyfx.com

Sterling starts near where it left off last week

2011-02-23T04:17:00.001-08:00

*USD –* Resurgent political turbulence in the Middle East led to a
prominent risk-off tone in markets today, with the Libyan regime
seemingly on the edge of toppling as violence in the country escaktes.
US stocks fell this morning as the circumstances in Libya prompted
investors to go away from riskier assets, providing a pause after the
market's six-month rally. On the data front the US trading week was
kicked off with conference board consumer confidence for February. The
release came in above expectations at 70.4, building upon last
month's upward revision to 64.8. University of Michigan consumer
confidence is due out on Friday, but no change is expected as rising
gasoline prices continue to dampen consumer sentiment. Additionally,
housing data is out on Thursday, with both new home sales and existing
home sales are expected to fall somewhat after December's massive
gains in both figures. Therefore, moderate declines of 3.3% m/m and
0.3% m/m, in new and existing sales respectively are expected. January
data for durable goods orders will be released on Thursday with
figures expected to regain some of last month's lost impose a curfew
by growing 2.5% as the December decline was largely due to a massive
99.5% drop in non-defense aircraft orders. Finally, we are due to get
quite a few Fed speeches, with a majority of the hawkish leaning
members language throughout the week.

*EUR –* The euro climbed overnight overcoming risk aversion that
gripped the market amid continuing political shakiness in the Middle
East. The euro rose to highs at $1.3703, rebounding from lows at
$1.3524 hit after oil rose above $100 on continuing unrest in Libya.
The euro's nearly 2 cent rise to the upper end of recent ranges came
after ECB policymakers said the central bank is ready to fight
inflation by increasing interest rates when needed. The proclamation
echoed recent comments from other ECB policymakers and highlights
mounting inflation pressures as Europe's economic recovery gains
traction. Euro zone GDP estimates as reported last week grew 0.3% in
Q4 while the region's Purchasing Manager's Index (PMI) at 58.4 in
February showed continuing gains from 57 the previous month. Euro
volatility will likely continue as risk aversion and inflation
concerns pull the currency in opposing directions.

*GBP –* Sterling starts near where it left off last week, largely
relegated to its recent ranges as investors weigh the prospects of
higher British interest rates against continued unrest in the Middle
East. On one hand, investors have flocked to relatively safe
currencies like the USD, CHF and JPY as protests turned deadly in
Libya, but increasing speculation that the BoE will tighten monetary
policy in the near term has provided support for sterling. In a clear
sign that the hawkish faction of the BoE is gaining support,
policymaker, Martin Weale, told reporters on Monday that a "tiny
increase in the rate may prevent a more rapid tightening later."

*JPY –* The JPY pared its recent decline as global financial markets
seek relatively safe investments.
Global risk tolerance has taken a step back over the weekend with
intensifying protests in North Africa and the Middle East spurring
investors to buy safe assets like the yen. A devastating earthquake in
New Zealand further bolstered the JPY and Japanese bonds, despite
warning of further downgrades of Japan's debt rating from
Temperamental's. While the Japanese economy faces significant
difficulties of its own, focus on unrest in the Middle East will keep
the yen well supported back towards the high end of its recent ranges.

*CAD –* The CAD remained within reach of its recent 3-year highs,
but the continued unrest across North Africa and the Middle East has
investors on edge. Crude oil was up nearly nine percent in ahead of
schedule trade on political turmoil and violent protests in Libya, the
first OPEC member to face well loved protests similar to those that
already brought down long-standing regimes in Tunisia and Egypt. While
global markets are wary to assume riskier assets, swiftly appreciating
crude prices will provide sufficient support for the loonie in the
near term.

*MXN –* The Mexican peso closed out last week on a positive note
following the release of improved US housing data and the news of
growing US inflationary pressures. At the start of this week,
geopolitical risks played a role in driving risk aversion flows, with
upheaval in Libya and earthquake in New Zealand pressuring the peso.
Internally, Mexico's bi-weekly CPI for February is expected to post
a 0.20% gain vs. the previous 0.17%. Meanwhile, trade weigh for
January may widen to -295mm vs. the previous -218mm.

*AUD –* The AUD starts the week on the defense, pushed lower by a
recent wave of risk aversion. With global markets already on edge over
continued unrest in the Middle East, a deadly earthquake in nearby New
Zealand encouraged investors to pare back their bets on
higher-yielding, but riskier assets like the AUD. But, the drag from
the New Zealand earthquake will likely be temporary for the AUD, and
soaring commodity prices will provide significant support in the near
term.

*Last Week's Currency Highs and Lows and Forecast*

*U.S. Economic Indicators*

Source: Fxstreet.com

Forex Weekly

2011-02-22T10:21:00.002-08:00

Review: 14th-20th February 2011

*Recap*

•The G20 meetings disastrous to produce whatever thing particular
and deferred any market-moving developments until April

•In Germany, the CDU party's gray defeat in Hamburg over the
weekend has provoked a gentle fall back in risk-tolerance

•Three major themes are in play – Emerging Market inflation,
Middle-Eastern politics and lingering peripheral stress in Europe

•Market difficulty on BoE to act in the name of reputation was
resisted although three rate hikes are still priced in

*USD*

A honestly turbulent week with few trends holding up in G20 FX
crosses. News flow and sentiment has been very mixed across the
developed world whereas macro-data from EM countries has tended to
outperform expectations. Last week, several key data releases swayed
market opinion. Retail sales figures (0.3% vs. 0.6% exp.) were
disappointing whereas CPI beat expectations (0.4% vs. 0.3% exp.) which
set the mood for mixed and choppy USD trade.

Fed minutes from their late January meeting were made available
although nothing new was mentioned in the official text. An issue
which may come back as an active them was the news of fresh stress
tests intended to be imposed on US banks prior to additional liquidity
measures being withdrawn. The Fed is seemingly attempting to test
whether US banks can take the strain as capital is returned to
investors thus putting untimely difficulty on bank weigh sheets given
the ongoing recovery.

*EUR*

The sovereign debt crisis lingers on with a particular solution still
only on the horizon. European policy makers expect to present a firm
plot by the end of March 2011. In the meantime, indicators that shed
light on Europe's ability to stabilize its periphery are getting a
lot of attention.

Greek GDP figures (-6.6% y/y, from -5.7% y/y in the previous quarter)
indicated to market participants that the simplicity measures imposed
in Greece (and elsewhere) have drastically unnatural economic
prosperity. This is compared to a 4.52% decline in 2010. On quarterly
basis, Greece shrank 1.4% in Q4 2010. For the Euro, the 'Greek
effect' is minimal because Greece makes up only about 3% of total
European GDP whereas the 'contagion effect' has been very actively
weighing on EUR pairs.

Spain approved a law on bank capital requirements. The law gives
savings banks (Cajas) until September to clarify any plans regarding
additional capita and sets a smallest core cap requirement of 8% for
listed banks and 10% for savings banks. Regardless of what decisions
are made, weaker banks will continue to struggle and could potentially
require further help. Debt is simple to buy but very hard to eradicate
once there is too much of it. The probability of a Spanish institution
requiring central bank intervention at some stage in the next year is
high which is likely to act as a weight for the Euro.

By the end of the week the Euro was broadly higher in most pairs –
the largest gain was against USD (+1.20%) while the largest loss was
against CHF (-1.74%). The EUR/CHF pair was particularly volatile last
week as the SNB stepped in to artificially intervene in the value of
the Swissie. The primary reason was most doubtless excessive CHF
strength.

*GBP*

UK CPI figures were in line with expectations and prevented additional
speculation about an imminent interest rate rise. The headline rate
rose from 3.7% to 4.0%, but wasn't higher than consensus. The fact
that CPIY (CPI without tax effects) has now risen above the BoE's 2%
target is doubtless providing BoE members with a juicy topic of
conversation. Once food and energy effects are excluded, inflation is
much lower but crucial assumptions such as a strengthening GBP and an
abatement of commodity price increases seem quite hopeful.

Despite inflation being on the offensive and potentially rising
further in the UK, it should nevertheless slow to some degree before
the end of the year because of standard-term factors like wage growth,
money growth and spare capacity all having more than enough slack to
absorb the inflationary effects thus capping any potential rise in
inflation.
UK growth was revised lower and inflation was revised higher in the
Quarterly Inflation Report. This was a toxic combination for GBP pairs
although Sterling finished the week broadly higher across the board in
G20 FX – largest gains were against USD (+1.58%) and the largest
loss was against CHF (-1.37%).

Also, retail sales data (1.9% vs. 0.6% exp.) was stronger than
expected despite the downward revision to December's figures. Trying
to discern underlying trends from retail sales data at this time of
year is incredibly hard given the large amount of seasonal effects in
play.

*CHF*

The EUR/CHF pair was particularly volatile last week as the SNB
stepped in to artificially intervene in the value of the Swissie. The
primary reason was most doubtless excessive CHF strength.

*Others*
The Riksbank raised interest rates in line with expectations (+25bp)
as expected last week. The fifth increase in a row ensures inflation
stays within target as economic growth remains robust. The Riksbank
also raised its forecasts for future rates, adage "the repo rate
would need to be raised somewhat quicker in the coming period" to
contain inflation.

A key point for us is that the Riksbank is sticking to its earlier
assessments and its estimates are not far off the mark in terms of
accuracy. This adds to central bank credibility. Forecasts for 2012
and 2013 in terms of both policy rates and GDP performance have been
raised. The central bank said it expected inflationary pressures to
rise as wages increased at a quicker rate and spare capacity in the
economy declined.

Preview: 21st- 27th February 2011-02-22

*Looking ahead*

• Three major themes are in play – Emerging Market inflation,
Middle-Eastern politics and lingering peripheral stress in Europe
Middle East tensions escalated over the weekend with fresh political
unrest growing

• As earnings season winds down (80% of the S&P has reported),
markets focus on a gray data calendar and policy events in Europe

• Highest risk of adverse price moves and elevated volatility is
with the commodity currencies - CAD, AUD, NZD, ZAR, RUB, BRL in USD
and JPY pairs

• Next Wednesday's BoE minutes fully in focus for the voting split
which the street will closely analyse. Revision to shocking Q4 2010
GDP figure is expected.

• In the US, focus is on the housing sector as new and pending home
sales figures are due

• German six states CPI on Friday will also be key ahead of Euro
area flash CPI on March 1 and the next ECB meeting on March 3

• There are no significant Chinese data due during the week, but
Singapore and Malaysian CPI on Wednesday will shape the broader Asian
inflation outlook

Bank of England publishes minutes from its February 10 meeting. The
December 2010 vote was 1-7-1 (Posen, Sentence dissent), and the
January 2011 count 1-6-2 (Posen, Sentence and Weale dissent). This
week's inflation report left any outcome possible for the MPC, and
only the minutes can inform whether additional members have shifted in
favour of hikes.

Middle East tensions escalated over the weekend with fresh political
unrest growing - following on from Egypt, Libya, Bahrain, Yemen and
Iran are now firmly in the media spotlight as protests push for
political change in the region. Economic effects have been limited to
fearful risk-off plays for now without any severe price shocks. The
vital element is crude oil supplies which may be restricted given the
scale of the political unrest as well as the fact that oil is usually
used as a bargaining chip for most matters in the region.

On several occasions over the past few months EM inflation and capital
controls have threatened major currencies through two channels: risk
of a global slowdown due to higher interest rates, which in turn could
break down an unwind of dollar-funded involve trades; and slower
capital inflows or even capital outflows from emerging markets which
could reduce reserve accumulation and recycling into non-dollar
currencies, particularly the euro.

But they do underline the difference in view between the Fed and ECB
about how to handle commod price inflation. The ECB is just a lot more
hawkish. It takes years of inflation above 3% for the BoE to show
signs of worry, a couple of months above 2% and the ECB lays down the
law. This is likely to matter increasingly vacant forward and
illustrates one of the cornerstones of our positive EUR/USD view: Fed
policy will remain loose, the Europeans in general are much more
likely to act. It's not vacant to kick in immediately but this will be
a key theme for FX in 2011.

Foreign official buys of US assets have fallen dramatically since QE
was launched, to net sales of $9bn per month on the TIC data and to
buys of only $13bn per month on the modified Fed custody data.

Disclaimer:

We provide an execution-only service. The material contained here does
not contain (and should not be construed as containing) investment
advice or an investment recommendation, or, an offer of or
solicitation for, a transaction in any financial instrument. We accept
no responsibility for any use that may be made of these comments and
for any consequences that result. This communication must not be
reproduced or further distributed. All information in this publication
has been compiled from publically available sources that are believed
to be reliable, but we cannot guarantee the accuracy of all
information. All information and documentation associated with this
report has been bent for the purposes of providing the report only.

Trading foreign exchange, commodity futures, options, precious metals
and other over-the-counter products carries a high level of risk and
may not be suitable for all investors. The high degree of leverage
associated with such trading can result in substantial losses, as well
as gains. The past performance of any trading strategy or methodology
is not indicative of future results, which can vary due to market
volatility; it should not be interpreted as a forecast of future
performance. You should carefully consider whether such trading is
suitable for you in light of your financial condition, level of
experience and appetite for risk, and seek advice from an independent
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* Complete Report

Source: Fxstreet.com

US Dollar Likely to Stick to Ranges, Japanese Yen Pairs to see Breakouts

2011-02-22T10:21:00.001-08:00

Market Conditions Synopsis

Sharp declines in US Dollar volatility expectations favor range
trading in the week ahead, while breakout strategies may continue to
outperform on quick-moving Japanese Yen currency pairs.

DailyFX+ System Trading Signals – It has been a strong week for
Range trading strategies, with Range2posting gains amidst intensely
choppy price action across key currency pairs. Momentum1 and Momentum2
have underperformed as currencies remain in wide ranges, while the
quicker-moving Breakout2 system has done well with volatile Japanese
Yen currency pairs. We have modest choice but to favor Range2 on key
USD pairs amidst low volatility expectations, but Breakout2 may
continue to outperform on quick-moving JPY pairs.

To gain a superior understanding of all six trading systems, view my
recent presentation on SSI and the trading signals on our FXCM Digital
Expo page.

DailyFX Individual Currency Pair Conditions Synopsis

Volatility expectations have dropped to the low end of their
multi-year range, and there is distinct risk that currencies may
continue to stick to wide trading ranges on such low perceived risks
of breakouts. There was a noteworthy overnight jump in 1-week vols,
but the bounce was from a clearly depressed level. We may need to wait
until a sustained bounce in vols before taking a more bullish stance
on Breakout and Momentum-based strategies.

Benchmark Trading Systems

Data and Backtest Results Generated using FXCM Strategy Trader

Range strategies saw their best performance in recent memory on
intensely choppy conditions across USD pairs, while Trend and Breakout
systems suffered accordingly. Current outlook favors Range trading
until further notice.

Written by David Rodríguez, Quantitative Strategist for DailyFX.com,
drodriguez@dailyfx.com

To be added to this author's distribution list, send an e-mail
subject line "Distribution list" to drodriguez@dailyfx.com

Definitions

Range High – 90-day closing high.

Range Low – 90-day closing low.

Last – Current market price.

OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN
THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH
CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS. Any opinions, news,
research, analyses, prices, or other information contained on this
website is provided as general market commentary, and does not
constitute investment advice. The FXCM group will not accept liability
for any loss or hurt, counting without limitation to, any loss of
profit, which may arise directly or indirectly from use of or reliance
contained in the trading signals, or in any accompanying chart
analyses.

Source: Dailyfx.com

Rapidly Approaching Long-term Resistance.......

2011-02-22T00:27:00.002-08:00

What a fantastic ride this has been for us. Fun for sure. Larger
picture, as long as printing press Ben is active, the fun should last
a lot longer. That doesn't mean the market won't take some time out to
pause and sell down some. There are a plethora of reasons to expect a
sell off some time soon. The three primary ones are major resistance
on the Nasdaq (chart included) at 2861. Add strong resistance on the
transports and tiny caps (charts also included), and you have a lot of
sectors close to major resistance. The following reason is overbought
daily charts, and finally, you have confirming, very overbought,
weekly charts on the major indexes. RSI's in the upper 70's on the Dow
and S&P 500 on those weekly charts. Stochastic's a hair under 100. It
doesn't go higher than 100.

The froth is building. We've loved every following of it, but the
froth is getting ancient and still building. You can see the primary
reasons to reckon we'll sell off soon, but again, you never small a
primary bull market, because you simply can not time the moment the go
will start. You can go very broke waiting. This doesn't mean you
shouldn't, or can't, start raising more cash. I believe you should.
Again, no shorting, but small-term it doesn't make a whole lot of
sense to be vacant ultra long. It's best to be cautious, because
historically, the market has had some very nasty pullbacks when the
oscillators have gotten this high for an extended period. On the
weekly charts in particular. Can take another week. Who knows, but
again, not getting overly aggressive, because the risk reward is
beyond doubt the way to go for now.

Now let's talk about this market. Do not mix a strong pullback for the
end of the bull market. Once this pulls down hard most will reckon the
bull market has come to an end. It is not vacant to be over. Earnings
are powerful for sure, and ultimately, that's what moves a market. If
earnings are strong people will want in, and if the current trend
continues, as it is likely to thanks to Ben, then the bull market
should hold very well over the rest of the year.

Look at the promotion as an opportunity to get very long. It won't be
simple knowing when to go back in hard, but the market oscillators
will lend a hand in that arena. The market will bring about some dread
in the near future, and that's what it will need. We've had a 30-plus
spread on the bull bear ratio for weeks, if not longer. Retail is
rocking in and buying all dips. The place-call buying is exploding on
the up side. These are all hints that sooner than later we'll have to
see a strong promotion episode. Welcome it.

When looking at today's market it is very fascinating. We saw some
major sell off from the recent leaders, especially those in technology
and the commodity world. Apple Inc. (AAPL), Mosaic Co. (MOS) , Potash
Corp. of Saskatchewan, Inc. (POT), Agrium Inc. (AGU), and Walter
Energy Inc. (WLT), to name just a very few of them. All of them place
in topping candles for the near-term, yet, these leaders didn't take
the overall market lower, which is really bullish behavior. Classic
bull market behavior for sure. Rotation! This is the very reason why I
tell you to never small a bull market. Stocks can pull back very hard,
yet, not affect the overall market.

Normally, when leaders, such as these, pull back and place in topping
candles, you'd expect the whole market to come racing down with them.
But that's just not happening right now. This is also what makes
calling the top of the go so hard. The market has yet to show that
it's vacant to come down hard and right, although, as I said, that
could happen at any moment. It's also why you have to have at least a
drop of exposure, even at extremes of overbought such as we have. Stay
with the trend, and use corrections to buy, rather than trying to time
a shorting period.

Support is all over the place for this market, and the reason why It
will be very tough for the bears vacant forward with respect to
getting too much down side action, before we reverse back up as things
unwind. There are gaps galore and critical exponential moving averages
so close together. When one is taken out, then immediately there's
another one to deal with.

You don't get a lot of "thin air" moving lower. Just too many levels
of support in a tiny area. For the Nasdaq, we have first support at
2812, which is gap support. Below that we have support at 2800 down to
2780 where there is the 20-day exponential moving average. For the S&P
500, we have gap support at 1329. Below that is the 20-day exponential
moving average at 1316. Just one percent below that first gap support.
On and on we go with support after support close together.

In closing, the daily index chart RSI's are in the low to upper 70's.
The weekly index charts are in the mid to upper 70's. 79 on the Dow.
This means there is extreme risk small-term for a powerful reversal
lower to right this intense level of overbought.
Stochastic's 99.5. Can't last, but again, you can't accurately predict
the moment this caves in. Keeping some long exposure is what you do,
but don't go overboard.

Give yourself a break and have a fantastic 3-day weekend.

Source: Fxstreet.com

Gold higher but outshone by silver

2011-02-22T00:27:00.001-08:00

Commodity prices rises on the back of strong global demand amid
declining inventories.

Essential economic data continues to support the current economic
recovery while global headline inflation rose again during January
highlighting the risk of rising food and energy prices. The ongoing
geopolitical tensions in the MENA region (Middle East and North
Africa) is not far from the headlines either with hoarding of
essential food commodities continuing to be a theme that drives the
agricultural sector. Hawkish comments from the European Central Bank
about fighting inflation helped the dollar weakens against the Euro.

*Modest overall gains for the week *

The Reuters Jeffries CRB index is showing a tiny weekly increase with
mixed performances across the different sectors. Out in front as usual
is the soft sector with cotton and coffee being the strong drivers.
All four precious metals have rallied strongly with silver and gold
recovering from the ahead of schedule 2011 sell off while platinum and
palladium continuing their strong performance on the back of strong
demand from the vehicle industry.

*Gold outperformed by silver*

Gold continued the rally that started in late January following the
breakout of civil unrest in North Africa. Robust physical demand has
off set the modest liquidation in gold ETFs with total holdings only
dropping by 4.5 percent since the December peak. Silver but has been
the star performer over the past few weeks having outperformed gold by
12 percent since the unrest in North Africa started. Investors are
buying silver coins at a speed that is draining supplies with issuers
having to ration sales.
As inflation continues to pick up one of the key questions in the
months ahead will be whether central banks from developed nations will
be able or prepared to apply the economic brakes soon enough. The
market is pricing in the first rate hikes in Europe, UK and the USA to
happen during the following half of 2011. Whether that will be
possible given the continued fragile state of some countries is the
huge inquiry. If the market becomes concerned about central banks
diminishing behind in their fight against inflation it could provide
precious metals with the ammunition to go even higher.

Gold having broken above 1,370 during the week has now set its sight
on 1,400 before the triple top between 1,424 and 1,430 comes into
play. Silver meanwhile broke the December highs and have go to a 30
year high just below 32 dollar per ounce. A year ago 1 ounce of gold
would set you back 70 ounce of silver, that ratio has now dropped as
low as 43.50, the lowest level in 13 years.

*Dread of supply disruptions drives energy*

Global demand for energy continues to support the price of Brent crude
above USD 100 while the distortion in WTI crude stemming from the
Cushing bottleneck has left it drifting below USD 90. Unrest in the
MENA region, healthful demand from Asia combined with an increased
demand for distillate products like diesel have kept prices supported
and these should continue to be the main drivers near term.
Escalating protests in Bahrain and Libya has fueled concern that
supplies from oil producing nations could potentially be disrupted.
This would add a new and perilous dimension to the present global
supply and demand circumstances, also taking into account that OPEC
holds most of the surplus spare capacity
The speculative long spot in WTI crude remains elevated near
confirmation highs and continuing dislocation from other global
benchmarks could trigger some long liquidation thereby widening the
spread even further. On that basis we do not recommend anyone to trade
the spread between WTI and Brent as the relation between the two has
broken down completely.

*Cotton breaks two dollar per pound*

The extreme volatility in cotton continues with the price this week
success the surprising level of two dollars per pound for the first
time ever. Tight supplies combined with strong global pickup in demand
have left the price nowhere to go but higher as cotton mills scramble
to secure supplies. Global production is expected to increase in 2011
as producers react to the price rises by planting more. This should
help rebuild global inventories in the months ahead and is also
reflected in forward prices with the price for December delivery
trading 70 cents below spot.

*Profit taking in grains*

After success new highs last week soybeans, wheat and rice ran into
profit taking this week as high prices saw a reduction in export
demand. Soybean production from Brazil, the world's following
largest exporter look set to beat last year's confirmation as better
than expected rainfall has improved conditions. Wheat prices should
stay supported amid the civil unrest and drought in the northern wheat
areas of Plates which is threatening the winter crop.

*What are forward prices telltale us?*

Passive investments in ETFs or commodity index funds such as GSCI and
DJ-UBS often do not bring the return that investors would expect. This
is due to price differences between the reported spot month
performance and the forward prices. The above investments types are
often invested in the spot month futures contract and have to roll
into the following months ahead of expiry. This exposes them to the
slope of the forward curve, if the forward price is lower they will
obtain a positive roll yield and vice versa if the curve is positive
sloping.
The chart below shows the price difference between spot and one year
forward. Most of the soft commodities which have performed strongly
during the last six month have a positive roll yield as the forward
price trades below spot. This is primarily due to the tight supply
circumstances which has left spot prices at elevated levels. At the
other end WTI crude and natural gas both have forward prices trading
at higher levels which could erode some of the potential gains from
holding long futures positions.

Source: Fxstreet.com

The Trading Week: Feb. 21 - Feb. 25

2011-02-20T01:20:00.001-08:00

Feb.
19, 2011
(Allthingsforex.com)
– The
main measure of
U.S. economic
activity and
growth, coupled
with consumer
and housing
market reports
from the
world's
largest
economy, will
take the center
stage in the
busy week
ahead.

In
training for
the new trading
week, here is
the outlook for
the Top 10
spotlight
economic events
that will go
the markets
around the
globe.

1. EUR-
Germany IFO
Institute
Business
Climate and
Expectations
Index,
a leading
indicator of
economic
conditions and
business
expectations in
the
Euro-zone's
largest
economy, and
Euro-zone
Composite
Manufacturing
and Air force
PMI- Purchasing
Managers
Indexes,
two leading
indicators of
economic
conditions
measuring the
activity of
purchasing
managers in the
manufacturing
and air force
sectors, Mon.,
Feb. 21, 4:00
am, ET.

Following a
positive ZEW
sentiment
survey, the
German IFO
index is
expected to
maintain the
optimistic
outlook with a
reading of
110.2 in
February,
compared with
110.3 in the
previous month.
The preliminary
flash estimate
of the
Euro-zone
Composite PMI
could
demonstrate
strength in the
Euro-zone
economy with
the index
rising to 56.9
in February
from 56.3 in
January.

2. USD-
U.S. Consumer
Confidence
Index of
consumers'
outlook on
present and
future economic
conditions,
Tues., Feb. 22,
10:00 am, ET.

The
trend of
improvement in
the confidence
of U.S.
consumers could
continue with
the index
forecast to
register a
reading of
61.5, compared
with 60.6 in
the previous
month.

Tenaciously
high inflation
and the threat
of economic
slowdown as a
result of the
U.K.
government's
massive
spending cuts
start a
hard
circumstances for
the Bank of
England policy
makers. The
minutes are
expected to
confirm that,
despite of the
rising
inflationary
pressures, the
Monetary Policy
Committee was
not in any
rush to hike
interest rates.
But, if
more policy
makers have
joined the camp
of the two
"rate
hawks"
Andrew Sentance
and Martin
Weale, the
market could
continue to
price
expectations
for an interest
rate increase
in the near
future.

4. USD-
U.S. Existing
Home
Sales,
the main gauge
of the
condition of
the U.S.
housing market
measuring the
number of
closed sales of
previously
constructed
homes,
condominiums
and co-ops,
Wed., Feb. 23,
10:00 am,
ET.

After a
better-than-expected
housing starts
report, the
sales of
existing homes
could also inch
higher to 5.3 M
in January from
5.28 M in
December.

5. USD-
U.S. Durable
Goods
Orders,
a leading
indicator of
economic
activity
measuring
durable goods
orders placed
with domestic
manufacturers,
and
U.S.
Jobless
Claims,
an vital
gauge of
employment
trends and
labor market
conditions,
Thurs., Feb.
24, 8:30 am,
ET.

Despite
of the
significant
2.3% m/m drop
in December,
the U.S. orders
for durable
goods are
expected to
rebound with an
increase of
2.4% m/m in
January.
First-time
applications
for
unemployment
benefits are
forecast to
reach 405K,
slightly lower
that the
reading of 410K
in the previous
week. To
indicate a
significant
decline in
unemployment,
economists
estimate that
jobless
applications
would need to
fall to 375K or
below.

6. USD-
U.S. New Home
Sales,
an vital
gauge of
housing market
conditions
measuring the
number of newly
constructed
homes with a
committed sale
during the
previous month,
Thurs., Feb.
24, 10:00 am,
ET.

The
U.S. new home
sales could
register a
tiny increase
by up to 330K
in January from
329K in
December.
But,
taking into account the
terrible winter
weather
conditions in a
number of U.S.
states, the
potential for
weaker-than-expected
new and
existing home
sales should
not be
excluded.

7. JPY-
Japan CPI-
Consumer Price
Index,
the main
measure of
inflation
preferred by
the Bank of
Japan, Thurs.,
Feb. 24, 6:30
pm, ET.

Although
deflation could
persist with
the inflation
gauge expected
to stay below
0% for another
month, the
Japanese
economy could
see
inflationary
pressures
rising a bit as
the CPI
registers a
smaller 0.3%
y/y decline in
January from
-0.4% y/y in
December.

8. GBP-
U.K. GDP- Combined
Domestic
Product,
the main
measure of
economic
activity and
growth, Fri.,
Feb. 25, 4:30
am, ET.

The
revised
estimate of the
U.K. Q4 GDP
should confirm
that the U.K.
economy
contracted by
0.5% q/q in the
fourth quarter
compared with
the 0.8% q/q
expansion in Q3
2010.

9. USD-
U.S. GDP- Combined
Domestic
Product,
the main
measure of
economic
activity and
growth in the
world's
largest
economy, Fri.,
Feb. 25, 8:30
am,
ET.

This main
spotlight
economic consequence
of the week
will bring the
following estimate
of the U.S. Q4
GDP which is
forecast to
revise the U.S.
economic growth
higher by 3.3%
in the fourth
quarter of
2010, up from
the preliminary
estimate of
3.2% and quicker
than the 2.5%
growth in the
third quarter.

10. USD-
U.S. Consumer
Sentiment,
the University
of Michigan's
monthly survey
of 500
households on
their financial
conditions and
outlook of the
economy, Fri.,
Feb. 25, 9:55
am,
ET.
Consumers
in the U.S. are
expected to
remain
optimistic with
a revised
consumer
sentiment index
reading of 75.4
in February, up
from the
previous 75.1
estimate.

Source: Fxstreet.com

The Weekly Bottom Line

2011-02-19T17:49:00.001-08:00

!! About the Author !!

*TD Bank Financial Group*

The information contained in this report has been prepared for the
information of our customers by TD Bank Financial Group. The
information has been drawn from sources believed to be reliable, but
the accuracy or completeness of the information is not guaranteed, nor
in providing it does TD Bank Financial Group assume any responsibility
or liability.

Source: ActionForex.Com

Critical Week for Dollar, Pound as Key Data Releases to Give Insight on Inflation Debate

2011-02-19T02:11:00.002-08:00

With three significant reports expected, next week will give investors
insight into the underlying fundamentals of the U.S. economy which
could cause an increase in volatility for Dollar-based pairs. Tuesday
has the most important data, starting with the release of the British
Consumer Price Index, interest rate hawks will look for evidence to
raise rates and begin tightening monetary policy as sustained low
rates have flooded capital markets with cash. Also on Tuesday, the
Euro-zone's growth will be examined, and later in the session U.S.
Retail Sales data will be released. Later in the week, the CPI gauges
for the U.S. and Canada will also be released, both of which are
forecast to show continued increases in prices at the same if not
faster rates than the previous period.

* U.K. Consumer Price Index (YoY) (JAN): February 15 – 09:30 GMT

A continued period of low interest rates appears to be putting
increasing pressure on the British economy, as inflation probably
accelerated in January to its fastest pace in over two years.
Coupled with an increase in the sales tax, rising commodity prices
could push the CPI up by 4.0 percent, according to survey figures.
The CPI grew by 3.7 percent in December. The figure will mark
another data release in which inflation is above the Bank of
England's 2.0 percent threshold for their medium target, and
rhetoric from inflation hawks will likely be ratcheted up as a
result. Previously this week, the Bank of England maintained their
key interest rate at 0.5 percent, while continuing its bond
purchase program at £200 billion. With growth remaining muted, it
appears that the U.K. economy could be entering a state of
stagflation – low growth rates and rising prices.

* German Gross Domestic Product s.a (QoQ) (4Q P): February 15 –
07:00 GMT

After falling short of expectations last quarter, European growth
expectations have been lowered to rise by just 0.4 percent, after
gaining a slight 0.3 percent in the third quarter of 2010. German
GDP will likely be the more market moving data, however, as it has
been the German economy that has supported a fair share of
Euro-zone growth while many periphery countries struggle. German
GDP is forecasted to grow by 0.5 percent, after expanding by 0.7
percent in the third quarter of 2010. Despite a jobless rate on
hold at 10.1 percent for the Euro-zone, it appears that concerns
over the solvency of some European Union nations – mainly the
PIIGS – have scared away investors, as investment contracted
towards the end of the year. For much of the second half of 2010,
as sovereign debt concerns increased, growth became reliant on
export growth; the trend is expected to hold, as sales growth from
emerging markets will need to be strong in order for the European
Union to experience higher growth rates as uncertainty surrounds
some member nations.

* U.S. Advance Retail Sales (JAN): February 15 – 13:30 GMT

Consumer demand is expected to continue to remain weak, estimates
for Advanced Retail Sales for January have shown. Initial survey
figures project sales at 0.5 percent, less than the 0.6 percent
gain in December. A recovery in consumer demand is an important
part of the U.S. recovery, as little growth in the labor market has
put increasing pressure on the Dollar. However, after a slew of
hard-hitting winter storms that affected much of the eastern half
of the country, it appears that markets have already priced in the
possibility that the sales data will disappoint. Accordingly,
expectations of increased demand will likely be higher going
forward as the weather improves over the next few months.

* U.S. Consumer Price Index (YoY) (JAN): February 17 – 13:30 GMT

As economic releases crossing the wires over the past few weeks
have pointed towards a quicker pace of economic growth in the U.S.,
the release of the CPI on Thursday will weigh heavily on policy
makers as the debate between inflation hawks and doves heats up.
The CPI is expected to have grown by 1.6 percent in January, after
increasing by 1.5 percent in December. While inflation has been
muted thus far in the U.S. following massive injections of
liquidity into the markets, hawks are becoming increasingly worried
that rising commodity costs coupled with higher food prices abroad
may be a sign that a sharp increase in price pressure may not be
that far off in the U.S. On the other side, inflation doves have
noted that wage growth remains low, and job growth has not picked
up yet, so it remains imperative to continue to leave rates at
historical lows for the time being. The U.S. CPI release figures to
be the most important release of the entire week.

* U.K. Retail Sales (MoM) (JAN): February 18 – 09:30 GMT

After falling by the most ever in December, U.K. Retail Sales are
expected to make a quick rebound, forecasted to grow by 4.3 percent
in January. Sales had fallen by 0.8 percent in December from
November. However, the expectation for such a rebound may be
overzealous, as, despite improving weather conditions in Britain
which was to blame for the decline in sales in December, the
government passed a value-added tax in order to help close the
budget deficit. That, as well as rising inflationary pressures,
could have squeezed disposable income for shoppers, leading to a
lower figure. Should the figure disappoint, expect chatter by Bank
of England policy makers to arise on how to fix an economy headed
toward stagflation.

See the DailyFX Calendar for a full list, timetable, and consensus
forecasts for upcoming economic indicators.

Written by Christopher Vecchio, DailyFX Research.

To contact the author of this report, please send inquiries to:
cvecchio@fxcm.com

Source: Dailyfx.com

Weekly Economic and Financial Commentary

2011-02-19T02:11:00.001-08:00

!! About The Author !!

*Wells Fargo Securities*

Wells Fargo Securities Economics Group publications are produced by
Wells Fargo Securities, LLC, a U.S broker-dealer registered with the
U.S. Securities and Exchange Commission, the Financial Industry
Regulatory Authority, and the Securities Investor Protection Corp.
Wells Fargo Securities, LLC, distributes these publications directly
and through subsidiaries including, but not limited to, Wells Fargo &
Company, Wells Fargo Bank N.A, Wells Fargo Advisors, LLC, and Wells
Fargo Securities International Limited. The information and opinions
herein are for general information use only. Wells Fargo Securities,
LLC does not guarantee their accuracy or completeness, nor does Wells
Fargo Securities, LLC assume any liability for any loss that may
result from the reliance by any person upon any such information or
opinions. Such information and opinions are subject to change without
notice, are for general information only and are not intended as an
offer or solicitation with respect to the purchase or sales of any
security or as personalized investment advice. Wells Fargo Securities,
LLC is a separate legal entity and distinct from affiliated banks and
is a wholly owned subsidiary of Wells Fargo & Company © 2010 Wells
Fargo Securities, LLC.

Source: ActionForex.Com

Currency Markets, Risk Appetite Threaten Trend-Defining Reversal Next Week

2011-02-18T11:19:00.002-08:00

* Currency Markets, Risk Appetite Threaten Trend-Defining Reversal
Next Week

* Will the Economic Docket Claim Responsibility for the Next Trend
or Pure Sentiment?

* European Financial Strains and Chinese Bubble Concerns Starting to
Show Through Equity Climb

The currency market - and perhaps the financial market at large
– is looking at the best opportunity to jump start a meaningful
and enduring trend that we have seen in many months next week. The
vast majority of the time, the markets are set within some form of
trend. This does not necessarily entail a bullish or bearish bias.
Rather, the inclination resides in a sense of familiarity for the
crowd. Whether the masses agree congestion on EURUSD, a persistent
climb for the S&P 500 or tumble for the 10-year US Treasury note
is the appropriate level of activity and direction; it is the
consistency in performance that reinforces the trend and lulls
market participants into a sense of comfort. Yet, it is inevitable
that the speculative arena eventually changes gears. Identifying
these moments ahead of schedule is not simple. A technical
correction for a particularly liquid asset or even a concerted go
across an entire asset class does not necessarily confirm an
underlying shift. That is something we learned with the disastrous
S&P 500 breakdown on last Friday of January and the small-lived
reversal from AUDUSD back in November. A right trend change
develops through an adjustment to essential expectations for risk
and reward rather than a mere shock of volatility. And, these are
the exact elements that we are looking for the pressing future.

We have been looking for evidence of an obvious revival in correlation
across the various asset classes and subsequent drive behind this
freshly together market for some time. Aside from a few brief periods
of gray risk-driven moves; we haven't seen whatever thing this
consistent since the reinvestment effort after the worst of the
financial crisis between March and December of 2009. Leading up to the
ultimate return of conviction, we find complacency and
under-appreciation of risk have become the rule. We see a lack of
concern in the equities-based VIX Index just off three-and-a-half year
lows while junk bond spreads have contracted to levels last seen in
2007. What makes this complacency perilous is the steady advance in
speculative assets. The weigh of expectations for reasonable returns
against the threat of financial shakiness has been heavily skewed such
that the market in general finds itself richly valued. But, investors
can remain ignorant of this threat and continue to plow money into the
markets until something forces the masses to reevaluate the
circumstances. What we need is a catalyst or range of catalysts to
shake confidence.

Taking stock of the danger of a collapse in confidence through the
pressing future, we only need to look at the economic calendar. We
will be reminded of Europe's long recovery time with the release of
the region's first round of 4Q GDP figures. This includes not only
the Euro Zone and Germany figures but the Portuguese and Greek updates
as well. This could easily swamp the inert recovery in confidence the
region has found due to the open-finished and so far shaky promise
policy officials made to expand their bailout efforts. In the UK, the
front-line battle between fiscal simplicity, economic growth and high
inflation will be strained by employment data and the BoE's
Quarterly Inflation Report. Largely overlooked, the US started the
wheels turning on transferring the glut of toxic assets off the
government's weigh sheet back to the blissfully ignorant speculator
by announcing its intensions to wind down Fannie Mae and Freddie Mac.
Then, there is Plates's accelerating effort to tighten the reins on
speculative capital. This gives rise to the potential momentum behind
the inevitable risk aversion go. Global investors won't necessarily
withdrawal funds from the system so much as they will right the
imbalance between developed and emerging market economies and reverse
the steady speculative build up.

DailyFX Involve Trade Index

Risk Indicators:

DailyFX Volatility Index

What is the DailyFX Volatility Index:

The DailyFX Volatility Index measures the general level of volatility
in the currency market. The index is a composite of the implied
volatility in options underlying a basket of currencies. Our basket is
equally weighed and composed of some of the most liquid currency pairs
in the Foreign exchange market.

In reading this graph, whenever the DailyFX Volatility Index rises, it
suggests traders expect the currency market to be more active in the
coming days and weeks. Since involve trades underperform when
volatility is high (due to the threat of capital losses that may
overwhelm involve income), a rise in volatility is unfavorable for the
strategy.

USDJPY 25 Delta Risk Reversals 3 Month

What are Risk Reversals:Risk reversals are the difference in
volatility between similar (in expiration and relative strike levels)
FX calls and place options. The measurement is calculated by finding
the difference between the implied volatility of a call with a 25
Delta and a place with a 25 Delta. When Risk Reversals are skewed to
the downside, it suggests volatility and therefore demand is superior
for puts than for calls and traders are expecting the pair to fall;
and vice versa.

We use risk reversals on USDJPY as global interest are bottoming after
having fallen substantially over the past year or more. Both the US
and Japanese benchmark lending rates are near zero and expected to
remain there until at least the middle of 2010. This attributes level
of stability to this pairs options that better allows it to follow
investment trends. When Risk Reversals go to a negative extreme, it
typically reflects a demand for safety of funds - an unfavorable
condition for involve.

Reserve Bank of Australia Expectations

How are Rate Expectations calculated:

Forecasting rate decisions is notoriously speculative, yet the market
is typically very efficient at predicting rate movements (and many
economists and analysts even believe market prices influence policy
decisions). To take advantage of the collective wisdom of the market
in forecasting rate decisions, we will use a combination of long and
small-term, risk-free interest rate assets to determine the cumulative
movement the Reserve Bank of Australia (RBA) will make over the coming
12 months. We have select the RBA as the Australian dollar is one of
few currencies, still considered a high yielders.To read this chart,
any positive number represents an expected firming in the Australian
benchmark lending rate over the coming year with each point in place
of one basis point change. When rate expectations rise, the involve
differential is expected to increase and involve trades return
improves.

Highest And Lowest Yields:

The Interest rate used to benchmark the currency basket is the 3
months Libor rate

Is Involve Trade and risk appetite rising or diminishing? Discuss how
to trade yields and market sentiment in the DailyFX Forum

Additional Information

What is a Involve Trade

All that is needed to know the involve trade concept is a basic
knowledge of foreign exchange and interest rates differentials. Each
currency has a different interest rate attached to it determined
partly by policy authorities and partly by market demand.When taking a
foreign exchange spot a trader holds long spot one currency and small
spot in another. Each day, the trader will collect the interest on the
long side of their trade and pay the interest on the small side. If
the interest rate on the bought currency is higher than that of the
sold currency, the result is a net inflow of interest. If the sold
currency's interest rate is superior than the bought currency's
rate, the trader must pay the net interest.

Involve Trade As A Strategy

For many years, money managers and banks have utilized the inflow and
outflow of yield to collect consistent income in times of low
volatility and high risk appetite. Holding only one or two currency
pairs would invite considerable idiosyncratic risk (or risk related to
those few pairs held); so traders start portfolios of various involve
trade pairs to diversify risk from any single pair and isolate
exposure to demand for yield. But, even with risk diversified away
from any one pair, a involve basket is still exposed to those
conditions that render this yield seeking strategy undesirable, such
as: high volatility, tiny interest rate differentials or a general
aversion to risk. Therefore, the involve trade will consistently
collect an interest income, but there are still circumstances when the
involve trade can face large drawdowns in certain market conditions.
As such, a trader needs to choose when it is time to underweight or
overweight their involve trade exposure.

Written by: John Kicklighter, Currency Strategist for DailyFX.com

To receive John's reports via send by e-mail or to submit Questions
or Comments about an condition; send by e-mail jkicklighter@dailyfx.

Source: Dailyfx.com

Weekly Focus: Strong Data Shrug off Middle East Tensions

2011-02-18T11:19:00.001-08:00

*Market Movers ahead*

In Euroland Ifo and flash PMIs are expected to print another very
solid reading with a minor decline in Ifo expectations and a minor
increase in the PMIs.

European politics will be in focus with the general election in
Ireland and the first of several regional elections in Germany.

In the US home sales data is expected to show a setback in January.
Durable goods orders and consumer confidence is on the agenda as well.

BoE Minutes on Wednesday can potentially be quite a huge market mover,
as inflation concerns could be causing superior division among
committee members.

No huge data out of Asia, but focus on the outcome of this weekend's
G20 meeting. Japan releases trade data and consumer prices.

In Denmark consumer and business confidence is due. In Norway
unemployment and PMI will be main events. In Sweden KI confidence data
released.

*Global update*

Increasing tensions in the Middle East are beginning to concern the
markets, but strong data has so far been outweighing increasing
geopolitical risks.

This week's FOMC minutes showed that members turned slightly more
concerned on inflation. This was followed by an upward surprise in
January inflation data.

EU finance ministers seem to have agreed that the permanent mechanism
should be able to accord up to EUR500bn. Q4 GDP data disappointed
slightly

The Riksbank hiked by 25bp and raised the repo path by about 25bp.

In Norway GDP numbers disappointed, but mainly on temporary factors.
The outlook remains strong with more need for policy tightening.

In Plates inflation increased less than expected in January suggesting
that the expected peak in inflation during Q1 will be lower than
previously expected.

*Full Report in PDF*

Source: ActionForex.Com

China Weekly: Inflation Likely to Persist Through H1 2011 Despite Rate Hikes

2011-02-18T04:00:00.001-08:00

CHINA WEEKLY

Plates's consumer price index (CPI) rose 4.9% in January from a year
earlier according to the National Bureau of Statistics, the figure
matched the leaked result from Monday but was below the average
consensus of 5.4%. While inflation rose at a slower than expected
rate, certainly a ray of light, the producer price index (PPI),
measuring wholesale inflation, climbed at a quicker than expected rate
of 6.6%, forecasts had been for a 6.3% rise. Despite the appearance
that inflation is moderating many still tip CPI to reach 6% sometime
in the first half of 2011 before cooling in the following half of the
year. Beijing faces a mammoth task in attempting to tamp down
inflationary difficulty in the economy without enacting, what may be
perceived to be as, draconian measures, which may also slow growth.
Some analysts at RBC suggest that CPI wont soften that much in the
following half of the year making an unexpected consequence, ie
weather related crop failures, catastrophic. Brian Jackson, an analyst
at RBC, said "the risk is that inflation will stay stronger for
longer, particularly if serious drought conditions in the north of the
country persist or worsen".

The National Bureau of Statistics also announced several weighting
changes to the way it calculates the consumer price index, increasing
the weighting of material goods, which it said added slightly to the
January inflation figure. The bureau said it recalculated the gauge of
consumer outlays to reduce the weighting of food to 30.2% from 32.4%
previously, while housing was increased to 19.2% from 15%. BofA
Merrill Lynch analyst Ting Lu said that CPI may moderate in February
though not enough to avoid further interest rate hikes, which could
come in April. He said increases in banks' reserve ratio
requirements were possible as ahead of schedule as this month.

In anticipation of a strong CPI reading the PBOC acted ahead of the
release and hiked interest rates last week for the third time since
October in an effort to cool rising inflation pressures. The
proclamation released by the central bank said it will bring to
somebody's attention the one-year lending rate to 6.06% from 5.81%
while boosting the one-year deposit rate to 3% from 2.75%. As we
discussed above interest rate hikes as the expected way by most that
Plates will try and damp down inflation in coming months and this most
recent hike was largely expected by the market, although some felt the
timing was somewhat of a surprise. We have mentioned several times in
the past that one of the largest problems with hiking rates in Plates
is that it will not have the desired effect since the savings rate in
Plates is already very high and higher interest rates will do modest
to attract fresh liquidity. It is because of this we have seen Plates
bring to somebody's attention the reserve ratio requirement (RRR) rate
for banks several times too in an attempt to drain liquidity from the
economy. The inquiry remains if the PBOC will be able to cool
inflationary pressures without overreating and slowing growth.

Turning to Plates's trade weigh data which was also released last
week, imports surged from a year earlier while exports grew at a
slightly slower rate, slashing the monthly trade surplus in half to
$6.5 billion, the lowest reading in nine months. Many analysts, but,
were instant to note that the numbers were heavily distorted by a
flurry of trading activity being pushed through ahead of the week-long
Chinese New Year holiday, which fell a week earlier this year than
last year. We won't be surprised if the trade data for February
slumps after exporters and importers front-loaded their trading
activities in January.

Finally, the State Administration of Foreign Exchange (SAFE) said in a
proclamation posted on its website that Plates is not facing losses of
up to $450 billion on bonds issued by Fannie Mae and Freddie Mac as
was claimed in a recent media report in the daily International
Finance News which cited the loss figure. The regulator said it had
been receiving interest payments of around 6% annually through 2008
and 2010 on bonds issued by the US mortgage agencies, and that reports
it had suffered losses on securities issued by them were
"groundless" SAFE added that it had never invested in equity
issued by either agency.

Written by Jonathan Granby, DailyFX Research Team

Source: Dailyfx.com

Market Roars Back.....

2011-02-17T20:26:00.001-08:00

But you just can't kill the beast someone once wrote in a song. No
different here, as the beast known as the bull market, won't go away
quietly. It gets a drop below overbought, then comes raging back
without even a fight by the bears. It's as if they've just given up,
which makes me nervous. But you can't argue with a market that uses
any promotion to come right back the very next day. The futures
started ticking up overnight, which told me here we go again. You just
can't keep this thing down with any momentum. You marvel who's buying
these futures. The fed? Could be, but it doesn't matter does it. It
catches on with many others joining in and up she goes. We gapped up
and spent modest time churning before moving higher still. There was
one powerful pullback intraday, but that, too, got bought up as they
rolled along.

That allowed the market to close very close to the highs of the day,
and also allowed the Nasdaq to close above price resistance at 2817.
Not a blow out above, thus, it's not really safe, but above price
resistance, nonetheless. Once it disastrous intraday you would have
thought that it, but not this crazy bull market. Shocking how promptly
that pullback was bought up. Shows you the power of what's waiting in
the system on any promotion. It takes about one percent before the
orders start roaring in. Bottom line is the market closed nicely, and
above 2817 Nasdaq, which opens the door to trying to get up to the
2007 highs at 2861. Time will tell if that's possible but it's only
one and a half percent away.

One has to marvel the affect of all of this easing by the fed, and all
of the dollars being printed with regards to the value of our dollar.
The chart of the dollar is collapsing, and ultimately, that can't be
excellent for the citizens of this country, but the fed, the printing
press fed, seems unconcerned about that for now. He has to know, one
would reckon about the ramifications of all the printing, but he truly
doesn't seem to care about the future. It seems as though he's focused
only in the moment and will try to deal with the fallout when it hits
years from now when everything is really devalued.

In a perfect appropriate world, the dollar would rise along with
stocks, but the inverse relationship is holding up overall. Some days
they trade in tandem, but overall, they trade inversely and sadly. In
the case of the printing press, it means terrible things for the
United States dollar. To sum it up, we celebrate a excellent market
today, but we will pay dearly for this behavior in the years to come.
No one knows when, but it will hit us all when we least expect it.

The market has been grinding its way higher for months. You get a go
up, and then you get a handle, or bull flag, that ultimately rises
once again. Until this market shows that this sample won't work, it's
best to stay with the patterns perceived future based on the recent
past. You really need to avoid shorting a market such as this, and I
bring this up tonight, because it's vital to stay with the trend and
not fight it as some of you are now thought of doing based on emails I
have received. At some point shorting will work. Maybe that moment is
upon us, but those of you who wanted to start shorting a month or more
ago, must be glad you didn't small just because we were overbought. It
would have been very painful for sure. Just stick with the trend, and
accept that at the end of the go. You'll have a loser, or two, but it
won't be too terrible because we'll exit promptly on the huge reversal
stick. No way can anyone hit 100%, so be prepared for a tiny hit by
being long a bit when we reverse down. No worries. We'll deal with
that later, but for now, stay away from vacant against the trend as
much as humanly possible.

RSI's are at 75 on the Dow, 72 on the S&P 500, and just shy of 70 on
the Nasdaq.
Basically, they're just above 70 on all the other major index charts.
We all know that markets stay overbought far longer than they do
oversold. It's been that way forever, and isn't likely to change any
time soon. Because we can stay overbought much longer than anyone
would expect, it's telltale us to stay long, but it's also telltale us
that when taking on new plays, make sure the chart of that individual
play is not overbought as well.

Try to buy plays that have unwound stochastic's below 50, if not near,
oversold at 20.
Get RSI's that are decently below 70. 55, or lower, would be even
better. In a different environment you wouldn't have to be so careful,
but you really do need to be careful right now. It's a game of
appropriateness at all times. Slow and simple here at overbought.

Source: Fxstreet.com

Silver's Big Test

2011-02-16T02:12:00.001-08:00

!! Jack Steiman, On Wash, Rinse, and Repeat Upcycle (SwingTradeOnline)
!!

It's the same ancient tale. Wash, rinse, and repeat. The market goes
higher until the daily charts get those 70 RSI readings, and then it
sells off a bit to unwind some. Once unwound just a modest bit it
starts its journey once again to the upside. At some point that'll
stop. The RSI, stochastics, and MACDs, will some day really sell off
when everyone expects it not to.

For now, you give the market the benefit of the doubt, and know that
once it unwinds, some of the moves back up will once again resume. It
would be just perfect if we'd sell hard for a while to allow those
oscillators a real rest, but they may not come for a while longer. So,
for now, you continue to play with long exposure only. Shorting makes
modest sense, and those of you who have tried it have doubtless
learned a hard lesson about shorting a primary uptrend.

I can't argue with you for a pullback being necessary, but the
earnings keep coming in on a positive note, frustrating the bears.
Earnings rule the roost, and we are seeing mostly very strong numbers
from the majority of sectors. The commodity stocks continue their
overall rampage as it has become clear to all that inflation is the
real global conundrum, even if printing press Bernanke refuses to tell
the truth to this country's inhabitants. He's trying to tell us that
inflation isn't terrible. All you have to do is take out the cost of
food, health care, and energy, and all is fine. Too terrible that
these are the things we use most, but as long as he tells us we don't
count them, he's satisfied to lie to us all. Whatever!

The commodity world knows differently and that's why they continue to
lead this bull market higher. Lots of participation everywhere else as
well, but nothing has led like those commodity stocks. Inflation is
the real conundrum from a total world perspective.
The stock market is telltale us that. Look at FedEx Corporation (FDX).
They warned, and said part of the reason is because of higher fuel
prices.

The market is very overbought, folks. Don't lose sight that within
bull markets we do get overbought, and sometimes quite a bit so. RSI's
are in the mid 70's on the Dow. Low 70's on the S&P 500, with the
Nasdaq right near 70. Many other index charts are well above 70. There
will have to be a pullback very shortly. Be prepared for it and don't
be shocked when it hits. A excellent pullback doesn't end the bull
market, but it does offer up more opportunities. That's something I
wouldn't mind seeing as it's getting harder and harder to find
excellent set-ups due to highly compressed moves already in place.

Can overbought get more so? Sure! But, make no mix that the higher up
we go in terms of the oscillators, the harder we'll fall when it
snaps. I need not remind you of how quick things can turn down. We've
all experienced this unexpectedly. Don't get caught off guard.

The Nasdaq has fantastic support down at 2755/65. This trend line has
held perfectly thus far. 2860 is the ancient high from 2007. This is
unlikely to get taken out should we continue higher, even through some
small-term pullback's to unwind a bit. 2757 is also the 20-day
exponential moving average. 2755/2757 is very powerful support. On the
SPX, 1305 is the 20-day exponential moving average, with 1275 the
50-day exponential moving average. I'd like for this market to visit
the 50-day on the SPX, but I am not counting on it. The bull market
remains in break down, but small-term things are perilous.
Don't get overly aggressive, but keep some scratch in the game.

!! Mike Paulenoff, On Silver\'s Huge Test (MPTrader) !!

Spot silver prices pivoted off the Jan 25 low at 26.34 and have since
climbed towards a confrontation with the prior bull market high at
31.29 established on Jan 3. Spot silver has in excellent health more
than 80% of the "bearish engulfing candle" -- key downside reversal
candle off of the 31.29 high on Jan 3 high to the 28.83 low on Jan 7.
This usually results in a total recovery that tests the top of the
candle (31.29).

Such a test could be forthcoming in the hours immediately ahead, which
will have significant technical implications for silver prices

If this 31.29 level is hurdled and sustained, it should trigger upside
continuation towards 32.50-33.00 thereafter. From a huge picture
perspective, only a decline that breaks the Jan low at 26.34 will
confirm that silver has place in a significant peak.

The Silver Wheaton Corp. (SLW) sample resembles the spot silver
sample, but must hurdle its Dec-Jan resistance line, now at 37.17
prior to acceleration towards a retest of its Dec high at 42.34. If
spot silver hurdles and sustains above 31.29, SLW should play catch-up
in a rush.

!! Sinisa Persich, On our Free Stock Pick: BTU (TraderHR) !!

Peabody Energy Corp. (BTU) surged 3.06, or 4.87%, today on
higher-than-average volume and finished at its highest close in more
than two years. It closed at 65.90, substantially above key resistance
at 65.00, confirming the breakout. The close was also near the high of
the day, another excellent sign and indication of possible
continuation of current momentum.

We're looking for a go towards the 69.50 area in the next couple of
days. Preferred access (buy stop) price is at 66.20, with a stop loss
at 64.00.

!! Harry Boxer, On 4 Charts to Watch (TheTechTrader) !!

The market still pushes forward and there are a lot of stocks looking
not only positive, but breaking out.

BSQUARE Corp. (BSQR) is looking excellent, up another 1.21 to 11.99
Monday. It closed right at the January highs, which could lead to a
nice thrust if it breaks out. I'm looking for it to eventually go up
to the 17 - 18 zone.
Small-term trading target is 14.

IPG Photonics Corporation (IPGP) had another fantastic day Monday.
That's two in the last three sessions, with a huge run up of 12.87
last Thursday, a pause-day Friday, and run of another 7.25 on Monday.
That's 20 points in three sessions. Although it's overbought for sure
small-term and has exploded through the top of the channel with a huge
breakaway gap, there may be more upside. Look for something perhaps in
the 55 - 58 zone.

Oil stocks are running, and Northern Oil and Gas, Inc. (NOG) is no
exclusion. On Monday it popped 1.24, or 4.3%, on 1.16 million shares,
breaking out across the neckline of a head-and-shoulder's bottom It
looks like it's headed at this point to approximately the 33 range, my
small-term trading target.

Tianyin Pharmaceutical Co., Inc. (TPI) had a huge pop Monday of 25%,
up 65 cents, closing at 3.24, right at the declining topsline. Next
target up around the Oct-Nov double top near 3 3/4 should be
forthcoming shortly.

Other stocks in our Charts of the Day video are Almaden Minerals Ltd.
(AAU), Augusta Resource Corp. (AZC), Flotek Industries Inc. (FTK), FX
Energy Inc. (FXEN), InterDigital, Inc. (IDCC), Interphase Corp.
(INPH), Cheniere Energy, Inc. (LNG), Oasis Petroleum Inc. (OAS),
Optical Cable Corp. (OCCF), O2Micro International Ltd. (OIIM), Procera
Networks, Inc. (PKT), Uranium Energy Corp. (UEC), US Energy Corp.
(USEG).

Source: Fxstreet.com

Roses are red, violets are blue, with inflation rising, what can we do?

2011-02-15T17:12:00.000-08:00

This week is being held hostage by the Bank of England's inflation
report on Wednesday morning, partly because the choice to keep
interest rates unchanged could have been a close call and we will find
out just how close when the report comes out. Of course there is a
limit to the shock factor of these figures as the MPC would have has a
glimpse at them and still chose not to bring to somebody's attention
rates. What is generally assumed is that the combinations we mentioned
in last week's sterling update, namely; VAT, oil and food price
rises, will push CPI inflation up to near the 4.2% mark from where it
currently rests at 3.7%. It seems likely that the MPC will use the
inflation figure to keep the door open to the possibility of raised
rates within the next few months, even if they do not choose to do so.
It would make sense that the MPC would want to be certain of the Q4
slowdown being a blot on an otherwise positive copy book. The threat
of a rate rise is not vacant to go away promptly, the committee will
do what they can to avoid putting them up but if the difficulty
intensifies too much come the middle of this year they might not have
a choice.

It doesn't stop there when it comes to vital data releases, after
the interest rate announcement comes the ILO unemployment rate and on
Friday morning we will see the retail sales figure. We expect to see
employment fall again in December what with snow deterring
job-seekers, while January's retail sales could have boosted when
consumers were finally able to access the shops, especially with the
VAT hike on the 4th.

David Cameron has stepped up his 'Huge Society' with the hope of
lift-off occurring this year, a 'vision' document has been
released by Francis Maude, cabinet office minister, and it details the
coalition's strategy. The main disclosure in this document is that
it will need approval from the European commission to access millions
of pounds sealed in dormant bank accounts. Cameron is aware that the
thought of his 'Huge Society' is not capturing the hearts and
minds of the UK, even his own party members seem unimpressed.

!! Jeremy's Trade of the Week !!

This week's trade of the week is a 'Risk Reversal'. A risk
reversal allows you to hedge yourself close to the market but in turn
for a reduced upfront cost, it gives you 100% benefit up to a
pre-determined level.

The client will benefit in all upward movement up to a capped level.
Should the GBPEUR rate be below 1.1650 they are able to buy euros at
1.1650, if it is above 1.22 on the first expiry but then they have to
hold euros at 1.22. The capped level increases by 1 cent every month
i.e. month two's is 1.23, month three's is 1.24 etc. If the rate
is in-between the two levels then the clients buys the euros at spot.

This strategy has an upfront cost of 1.2% and allows a hedge with a
nominal WCR of only 2.2 cents from current market price . It is also
significant for buyers of sterling and sellers of other currencies.

Source: Fxstreet.com

Are Grains the Place to Invest in 2011?

2011-02-15T16:55:00.002-08:00

In 2008 rough rice exploded in price, nearly doubling in less than 4
months as a global panic brought it to the highest prices ever
recorded on its futures contract. That same year wheat went higher on
a perceived shortage of its own, breaking all previous price records
on its more than 100 year description on the Chicago Board of Trade.

Following those spikes, grains promptly declined in price through
2009. Quick forward to the summer of 2010. Russia, one of the world's
top 5 wheat exporters, experienced one of the worst droughts in recent
description and even saw fires threaten crops. Wheat spiked 35% in a
week - yes, in just 1 week! Then tragedy struck Australia, one of the
world's top 10 wheat producers, and floods occurred in key growing
regions leading to as much as 50 percent of the crop being downgraded
to feed quality - not fit for human utilization! Cotton shocked the
world with a major shortage that sparked the largest cotton rally in
description - bringing futures prices far further than any level they
have ever been. All this and none of these are *the REAL reason to get
invested with grains.*

For decades the crucial point for traders in the grain markets was on
the supply side. After all it is events like the ones I just mentioned
that have been game-changers in grains for a long, long time. When
Bush Jr. introduced corn ethanol subsidies it was the first time in a
long time that a demand component became a game-changer. By the way -
that was a major contributor to the largest percentage rally in corn
in more than 100 years. You see when supply is the issue traders can
account for the percent drop in supply and its effect on price. But,
when demand becomes the issue it lends itself to potential panic. How
much demand can be a relative nameless number, especially when it
doesn't serve a country like Plates to show its hand while buying much
needed corn for import. Demand-based panics have the potential to
offer truly historic opportunities, and a rare demand based
opportunity is staring the world straight in the face right now.

Plates, one of the largest consumers of commodities in the world, is
growing at a phenomenal rate.

*Here are some stats:*

According to Xinhua news agency reports, the urban population of
Plates is close to topping 700 million

By 2015, Plates may have around 1.39 billion citizens

International Energy Agency data suggests that Plates topped the US in
energy utilization in 2009

For years population growth has been met with Plates's strong domestic
production of grains and other key commodities. But there comes a
point where the capacity for domestic production may be exceeded by a
strong domestic demand. A excellent inquiry here is how would someone
know if capacity is flaw to grow enough to meet population growth?
*For Plates the proof is in the overall domestic utilization of key ag
commodities:*

Past performance not indicative of future results. Data courtesy of
USDA.

*Then take a look at a shot of their recent imports:*

Utilization is climbing. The growing middle class and urban population
is adding more meat to their plates. Yet the imports have been only
modestly higher in wheat. Soybean imports nearly doubled - how much
more might be needed in the coming years? Arable land in Plates is
certainly limited and the possibility of negative weather wreaking
havoc with production is permanently around the corner. Sure, yields
and modern farming techniques can potentially increase yields, but you
can only fit so many plantings in limited farmlands.

India finds itself much in the same boat with escalating population
growth and the potential for significant demand requirements on their
farming community. *Here are some stats:*

Past performance is not indicative of future results.Data courtesy of
USDA.

As you can see, India has experienced sudden import surges in wheat.
Their crops and food production remain susceptible to weather issues,
and that can spell opportunity.

*Population Growth*

It takes all of 10 minutes perusing the news these days to see
commodity prices are inflating and that there are real concerns over
rising demand. I am not telltale you whatever thing new. What I am
telltale you is there is growing demand that has the potential to
materialize into a food crisis.

But I am not the only one that sees this opportunity. Veteran grains
floor trader Matt Pierce, who CNBC goes to for grain market analysis,
also sees an incredible opportunity in 2011.

"The population rise in Plates and India is spiraling out of control
and the potential impact on corn, wheat, soybeans, cotton, rice and
oats is likely to be exciting. I believe 2011 will bring about one of
the most significant price moves in the description of grain futures
here at the Chicago Board of Trade."

Matt Pierce is one seriously experienced grain trader to pay attention
to. A grain specialist, Matt studied farming, management, and trading
sciences at the Institution of Agricultural Sciences at the University
of Illinois. He has worked for many of the industry's largest grain
traders and they pay for his consultation on a regular basis. Matt's
frequent appearances on CNBC and Bloomberg have made him a household
name. He is near legendary reputation on the floor with his massive
global information network that he has built up over his career. His
grain service, GrainAnalyst.com is gaining traction as the place to go
for real grain insight and recommendations - for hedgers and
speculators alike. But, Matt wanted to give everyone, not just his
subscribers, an inside track on his forecasts for this year's grain
growing season.

On February 15th Matt is releasing a very vital report for grain
traders. *The report will provide traders, hedgers and new investors a
unique insight into how to try to play this upcoming global
consequence in the grain markets:*

Which market is the most exposed to a potential shortage

When he expects huge price moves to occur

How current events might impact plantings

What the impact of the cotton price explosion may have on soybeans and
other grains

Why the Plates and India population growth may forever change the
grain markets

Right now Futures Press is giving you a pre-release sale price on this
report, which will sell for $99 after February 15th. If you order
before the release on the 15th you will save over 50% and pay just
$49! That is obviously a fantastic price tag for such in-depth
analysis of what could be the next huge boom. Futures Press is
offering this deal so that as many people as possible get a
opportunity to experience the talent, skill and knowledge of grain
specialist Matt Pierce. As a special bonus you will also receive a
follow up report that Matt will release live from the USDA
Agricultural Outlook Forum in Arlington, Virginia on February 24th and
25th. This conference will mark the USDA's first release of their
forecast for planted acreage for the 2011 growing season and Matt will
be presenting his findings and analysis at the conference on behalf of
the CME. Report buyers will get critical news from the conference as
it happens!

Source: Fxstreet.com

Market Overbought Again On The Daily Index Charts....

2011-02-15T16:55:00.001-08:00

It's the same ancient tale. Wash, rinse and repeat. The market goes
higher until the daily charts get those 70 RSI readings, and then it
sells off a bit to unwind some. Once unwound just a modest bit it
starts its journey once again to the up side. At some point that'll
stop. The RSI, stochastics, and MACDs, will some day really sell off
when everyone expects it not to.

The market has been ripe, and I can't argue with you for a pullback
being necessary, but the earnings keep coming in on a positive note,
thus, the bears have been constantly frustrated. Earnings rule the
roost, and we are seeing mostly very strong numbers from the majority
of sectors. This is not allowing the bears to get any near-term
satisfaction other than a 1-25 promotion period that gets immediately
bought up. For now it really is wash, rinse, and repeat. Stay with the
trend.

The commodity stocks continue their overall rampage as it has become
clear to all that inflation is the real global conundrum, even if
printing press Bernanke refuses to tell the truth to this country's
inhabitants. He's trying to tell us that inflation isn't terrible. All
you have to do is take out the cost of food, health care, and energy,
and all is fine. Too terrible that these are the things we use most,
but as long as he tells us we don't count them, he's satisfied to lie
to us all. Whatever!

The commodity world knows differently and that's why they continue to
lead this bull market higher. Lots of participation everywhere else as
well, but nothing has led like those commodity stocks. Inflation is
the real conundrum from a total world perspective. The stock market is
telltale us that. Look at FedEx Corporation (FDX) tonight. They
warned, and said part of the reason is because of higher fuel prices.
Inflation folks.

The market is very overbought folks. Don't lose sight that within bull
markets we do get overbought, and sometimes quite a bit so. RSI's are
in the mid 70's on the Dow. Low 70's on the S&P 500, with the Nasdaq
right near 70. Many other index charts are well above 70. There will
have to be a pullback very shortly. Be prepared for it and don't be
shocked when it hits. A excellent pullback doesn't end the bull
market, but it does offer up more opportunities. That's something I
wouldn't mind seeing as it's getting harder and harder to find
excellent set-ups due to highly compressed moves already in place.

If things could pause for several weeks, or even months, it would be
very healthful and set us up to get very aggressive. Can overbought
get more so? Sure! But, make no mix that the higher up we go in terms
of the oscillators, the harder we'll fall when it snaps. I need not
remind you of how quick things can turn down. We've all experienced
this unexpectedly. Don't get caught off guard.

Source: Fxstreet.com

USD gained against most currencies on Egypt's turmoil

2011-02-15T07:52:00.003-08:00

*USD –* The USD gained against 14 of the 16 most actively traded
currencies last week as Egyptian President Mubarak's 30-year rule
came to an abrupt end. After three weeks of demonstrations, which
remained mostly peaceful, the calls for political change became too
strong for the Egyptian dictator to ignore, forcing him to cede power
to the military. Global markets have generally embraced the democratic
change as a positive for the region with global commerce, oil
transport through the Suez Canal most notably, largely unaffected. The
dollar also benefited on signs that the US labor market is humanizing,
albeit slowly. With weekly jobless claims dropping by the most in more
than two years, investors appear bullish on the US economy. Markets
will but closely monitor retail sales, housing, and inflation data due
this week combined with the Obama administration's 2012 budget
proposal that calls for $1.1 trillion dollars in cuts over the next
decade.

*EUR –* The EUR starts the week by dropping against all of its
most-traded counterparts on expectations that officials will again
struggle to bridge differences over expanding the Eurozone's
"bailout" fund. The ordinary currency also came under difficulty
ahead of schedule in the European session on speculation that the
restructuring of West LB AG, a German state-owned bank bailed out
during the financial crisis, is flaw.
Further compounding the euro's woes, Ireland's main opposition
party said that it wants to renegotiate the country's EU-IMF loans,
and Greek officials criticized demands from both the EU and IMF.
Portuguese debt also gave investors cause for concern as yields on
10-year bonds rose to 7.37%, small of the 7.64% reached last week, but
still providing enough difficulty to lead most to believe the third
Eurozone member will seek EU help.

*GBP –* Inflation data will be the key driver for Sterling this
week. Consumer prices are expected to increase 4.0% on Tuesday. This
follows last month's increase of 3.7% - which was the highest
reading since November 2008. This, coupled with Wednesday's
quarterly inflation release by the central bank, has the market
speculating that the BoE will bring to somebody's attention rates
sooner rather than later in an effort to stave off inflation.
Sterling has already gained 2.6% against the greenback this year,
currently trading at a key psychological level of 1.60. The data this
week should provide further direction for the pair and show whether a
go above that level can be sustained.

*JPY –* JPY has managed to hold on to marginal strength against the
USD through European trading, but is moving to near flat as the North
American trading day session starts. Q4 Japanese GDP contracted as
expected, but while recording a –0.3% q/q and appearing somewhat
better than the expected number of –0.5% q/q, a downward revision to
Q3's data took away the relative upside growth surprise. USDJPY has
recaptured some upside initiative, despite trading slightly lower
today, in line with the upside difficulty on US-Japanese shorter term
yields. Look to 84 as primary resistance, though a trade past this
level opens up a shot at the 4.5 month high near 84.50.

*CAD –* The CAD gained against all of its G10 counterparts last week
as strong North American economic data increased speculation that the
BoC will tighten monetary policy. The Canadian economy unexpectedly
posted its first trade surplus in more than 10 months last week as
rising energy and metals prices buoyed the largest jump in exports in
nearly three decades. The BoC has left rates at 1% since late
September. At the Bank's December meeting, Governor Carney said that
exporters needed to regain competitiveness hurt by a strengthening
currency and slowing global demand by investing in productivity. With
exporters clearly rescue their competitiveness, markets have begun to
expect the BoC to consider tightening policy as soon as next month.

*MXN –* The Mexican peso in excellent health from last Friday's
weekly low after Mexican Finance Minister, Ernesto Cordero, commented
that policy makers may auction off more monthly dollar options. This
may help soften the impact any sudden outflow of capital would have on
the peso. Despite the recovery, the peso is still under difficulty,
with USD/MXN remaining well above the 12.0000 support level. Fresh
strikes and protests in Cairo over better pay and work conditions has
renewed tensions in the Middle East, prompting investors to shy away
from riskier, emerging market assets.

*AUD –* The AUD starts the week back above parity with the USD after
diminishing below the mark last Friday for the first time in three
weeks. The Aussie has fallen out of investor favor as of late, with
markets on edge over unrest in the Middle East. Investors have also
been less keen to buy the AUD ahead of key Chinese data this week that
may suggest Australia's largest trading partner may continue to
tighten its monetary policy. Trade data this morning has encouraged
investors as Chinese imports outpaced exports, but the Chinese New
Year holiday likely distorted the data. Investors will be focused on
Tuesday's inflation data out of Plates, with expectations for higher
interest rates likely providing significant resistance for even the
high-yielding AUD.

*Last Week's Currency Highs and Lows and Forecast*

*U.S. Economic Indicators*

Source: Fxstreet.com

China Weekly: Inflation Likely to Persist Through H1 2011 Despite Rate Hikes

2011-02-15T07:52:00.001-08:00

CHINA WEEKLY

Written by Jonathan Granby, DailyFX Research Team

Source: Dailyfx.com

Forex Weekly

2011-02-14T23:54:00.001-08:00

By George Tchetvertakov

Review: 4th- 11th February 2011

Recap
• Oil prices fell dramatically to close last week at $85.32 after
Egyptian President Hosni Mubarak resigned and handed power to the
military, easing concerns over the disruption of crude-oil supplies
from the Middle East
• Despite improving macro-data, the Fed re-iterated its ultra-low
policy stance. Earliest policy tightening likely to be early 2012
• BoE passed up the chance for an ahead-of-the-curve rate hike as
Inflation Report looms this coming week
• Portuguese long-term bond yields reached record highs. The broad
issue of EFSF/IMF/EU funding may not wait until March to be resolved
if market speculators push Portuguese yields to the brink
• Surprise PBOC policy action (+25bp) taken in their stride by
market participants. China remains on a clear and long-term tightening
phase

*USD*

The Egyptian political crisis managed to exert some effect on FX rates
last week. Mubarak's refusal to stand down as President contrary to
popular opinion gave global equity indices a jolt and heightened fears
of broader instability in the region. Commodity prices have been
sensitive to events ongoing in Egypt (especially oil) since the end of
January. Asian stocks fell more than 1% with some indices taking their
heaviest losses for nine months; in the US, the S&P 500 managed to
hold above 1,300 - falling as low as 1308.47 before recovering to
close above 1,327. The strong lift in equities came on the back of a
public resignation by Mubarak. The issue has ebbed away somewhat as
media attention focused on celebrations and chickens being counted but
the realisation over the weekend that Egypt remains in a transitional
state with an evident quasi power-vacuum has led to heightened USD
demand in the early part of this week. This nervousness should persist
in the short-medium term as 6 nations report CPI figures - India,
China, Canada, UK, US and Sweden. Assuming inflation remains a topical
issue because of rising commodity prices and stronger than expected
recovery rates in the developing world, exposure to currencies where
domestic markets are overheating is likely to be most effective.

In the US last week, the lack of significant macro data intensified
the focus on Ben Bernanke (Fed Chairman) as he made a crucial speech
to the House Budget Committee. Following a puzzling employment report
on Jan 4th market participants were keen to gauge what flat job growth
alongside a falling rate of unemployment actually means for the US
economy.
What we were looking for in the speech was how the chairman
characterized the sharp drop in the unemployment rate in December and
January. He said that the decline in the unemployment rate and
"improvement in indicators of job openings and firms' hiring plans"
provide "grounds for optimism on the employment front."

Bernanke also said: the unemployment rate probably will remain
elevated for some time" and "inflation is expected to persist below"
the levels the Fed sees as consistent with its mandate". In Fed
speak this means that it will be several years before the unemployment
rate returns to a more normal level and a sustained period of job
creation is needed to ensure the durability of the recovery. In short,
Bernanke didn't dismiss the decline in unemployment as an anomaly,
but by the same token, he remains focused on headline payroll
employment.

Despite heightened anticipation of the speech, Bernanke refrained from
altering comments he made earlier this month. We were expecting to
hear re-affirmation that the Fed remains in ultra-loose mode – and
this was the broad tone of the speech. Bernanke reiterated his core
view that the Fed should be patient and accommodative despite the
better-than-expected macro data observed in recent months.

*EUR*

The ECB President, Jean Claude Trichet indicated that the Euro-zone
needs stricter rules on budgets and other elements of economic policy
and "an appropriate economic union" to function properly.

The Portuguese 10yr bond yield climbed to its highest level since the
launch of the Euro last week after the European leaders meeting in
Brussels failed to establish concrete plans for ongoing reform -
delaying the final outcome until March 24th. Demand for peripheral
sovereign debt remains a key price driver for all EUR pairs as
investors continue to monitor the persistent debt problems in Europe,
in wait for a viable, long-term solution.

An unexpected fall in German IP (-1.5% vs. 0.2% exp.) capped EUR gains
against the US Dollar. Despite the figure and nervousness surrounding
peripheral sovereign debt, risk tolerance remained high allowing
equities to post fresh multi-year highs.

A factor that came out of nowhere and punished EUR pairs across the
board was the shock exclusion of Axel Weber as future ECB President.
Currently the head of the Bundesbank, Axel Weber is considered to be a
strong hawk on the ECB board and was thus seen as a direct source of
confidence for Europe and the Euro. Considering the ongoing crisis in
Europe's periphery, Weber was likely to be a steady hand in a rough
storm. EUR/USD sold off rapidly on the news. A range of candidates
will now vie for the ECB's top spot. Each candidates' preferred
core policy stance may influence investor opinion of the Euro and any
firm announcement may lead to EUR rallies (if hawkish candidate is
selected) or EUR declines (if dovish candidate is selected).

*GBP*

Inflation concerns were the theme for GBP pairs last week and it
remains so this week as the BoE is due to publish its eagerly awaited
Inflation Report on Wednesday. Last week, inflation concerns rose as
UK PPI (1.7% vs. 1.3% exp.) indicated the fastest pace of UK factory
gate inflation for over two years. Britain's 'high inflation
without strong growth' problem is being attributed to imported
inflation via commodity prices rather than domestic causes. BoE
policymakers will be concerned because the inflation is becoming a
problem for business and consumers alike.

In our view, persistent consumer inflation above the BoE's target
rate is slowly beginning to augment future inflation expectations.
Also, BoE assurances that inflationary effects would fade after the
financial crisis have not rung true. This week's CPI estimate is
likely to show further upside pressures on prices – Y/Y inflation is
currently 3.7% but a print above 4% is very likely according to a mean
average of analyst expectations.

The BoE left interest rates unchanged last week, the APF was also kept
unchanged at £200bn. The BoE is clearly hesitant about taking
pro-active steps ahead of the market on interest rates. The thinking
seems to be that if rates were raised, the current level of UK GDP
growth would be too anaemic to avoid deflationary effects. Market
participants have not taken the BoE at face value however and see a
60% chance that the BoE will raise interest rates by 25bp at its next
meeting on March 10th.

*CHF*

With tension in Egypt fading away as an active FX theme, runs into the
Dollar, Yen and Swiss Franc are subsiding. The overall impact of
political unrest in Egypt has been localised so effects on major
currencies have been fairly minimal. The Swissie lost more ground last
week against its G20 counterparts. Heaviest losses were against USD
(-1.77%) and EUR (-1.61%).

The global risk-profile wasn't helpful for CHF pairs while further
downside was induced due to a very unexpected fall in month-on-month
inflation (-0.4% vs. -0.1% exp.). For us, the surprise was the fact
that commodity price pressures are not being felt as much as in other
territories (e.g. UK). The SNB could not justify a hike in Q1 on the
back of such a weak headline CPI figure although a negative number was
expected. Probably the most important aspect for the SNB will be the
lack of feed-through from headline to core inflation. Core inflation
remains subdued and within the SNB's remit because volatile
components such as food, energy, fuel as well as other seasonal
products are excluded. Intervention in EUR/CHF is a long-shot given
the stability in core inflation.

*OTHERS*

The PBOC surprised all market participants with a 25bp rate hike,
taking the official Chinese rate to 6%. This was the second increase
in just over a month and indicates the PBOC doing all it can to cap
inflation effects. Despite the shock value of the announcement, market
participants were largely expecting further PBOC tightening so the
price action wasn't incredibly volatile. Investors were quick to
understand that the PBOC hike is actually a positive sign because the
Chinese economy is growing strongly thus requiring adjustment –
rather than hiking because they have lost control of inflation in a
desperate attempt to contain rapid growth. Going forward, further rate
hikes are likely as part of a normal tightening phase within the
business cycle.

Very interestingly, last week's hike comes at a time when macro data
is outperforming across the globe; compared and contrasted to last
year when China was being seen as the primary avenue of world economic
growth. Consequently, any meaningful Chinese slowdown and/or overly
hawkish policy have a good chance of being offset by other nations
with strong rates of recovery.
*Preview: 14th- 21st February 2011*

Looking ahead
• Bond auctions take centre stage – Belgium (Tuesday), Portugal
(Wednesday) and Spain (Thursday). Speculative attempts to destabilise
Portuguese bonds are possible and likely
• Two key interest rate decisions: Bank of Japan and Riksbank. BoJ
will stay on hold while Riksbank should hike 25bp
• UK Inflation report and CPI data will probably show upward
revision to inflation and downward revision for GDP growth – GBP
pairs likely to see higher volatility
• In the US - CPI , Fed Minutes, IP and Housing data are the key
macro data readings
• G20 Meetings in Paris may have an effect on G20 FX if the US/China
currency war spat is re-kindled or action is announced to combat
rising oil prices. If political uncertainty in Egypt persists,
economic uncertainty is almost sure to follow

At the start of this week it was the Euro's turn to take centre
stage. EUR/USD has shed 0.5% in the first trading session of the week
following the London open on Sunday. Investors are incredibly vigilant
given the mass of EUR themes in play. Peripheral bond auctions are
anticipated to be crucial for investor confidence and considering that
last week we saw quasi-speculative attacks on Portuguese government
bonds, it is a possibility that an auction on the weaker side prompts
further pressure from speculators. The EFSF/EU/ECB may be called upon
if yields rise/prices fall too far, too quickly. Also, rumours of a
rescue plan for German bank WestLB have added to existing concerns
about European banks.

Event risk is present for SEK traders as we expect the Riksbank to
resume with its series of rate increases. We see a 0.25% hike as
almost certain. In addition to the announcement, the Riksbank will be
publishing an updated Monetary Policy Report on Tuesday. The report is
likely to indicate or at least hint that policy expectations have
changed (so market participants should expect more hikes over the next
12-18 months).

We see the current interest rate in Sweden rising to 3.0% before the
end of 2011 and up to 4.75% in 2012. Sweden has largely avoided the
effects of the financial crisis and has even managed to avoid
large-scale fiscal adjustment that's been so gravely needed in other
nations. A slowdown in economic activity due to weakness in Europe for
example poses a risk to this view. Swedish economic data will have
added importance in the meantime. Equally, excessive SEK strength
could also weigh on economic growth and prosperity leading to
questions being raised about the practicality of tightening monetary
policy too soon.

In the past month China, Indonesia and India have all raised interest
rates as a way of combating inflation and maintain stable inflation
expectations. The problem facing the UK for example and other
developed economies alike is inflationary effects without the growth
to show for it. Current inflation is mostly cost-push driven from the
supply side. It is not demand led which means taming inflation when
demand is weak would only mean a larger financial burden for
consumers, especially mortgage-holders.

The likely beneficiaries of the seemingly all encompassing inflation
outlook that's pervading most G20 economies are the risk-on
currencies such as NZD, CAD, AUD, Scandies and potentially the Euro if
other factors don't interfere. On the other side of the spectrum are
countries that are likely to be languishing in negative real interest
rates for some time and thus should take comparatively longer to
attract investor capital flows (USD, GBP). The Fed is most likely to
tolerate higher inflation over the next year which more or less
cements negative real interest rates in the US at least until the
start of 2012.

Positive real interest rates, GDP growth, stable but rising inflation
and hawkish policy are the prime conditions for currency appreciation
– emerging economies are closer to meeting these conditions (or
they've already met them) than developed nations are which explains
the broad based appreciation of commodity currencies against
traditional alternatives such as USD, CHF, JPY, GBP over the course of
this recovery since 2009.

The Eurogroup meets on Monday and the broader Ecofin on Tuesday.
Setting a firm fiscal framework will be the focus. Some form of
agreement will be seen as a strong positive by market participants in
the long-term and could even induce a good-will rally in the
short-term as investors breathe yet another sign of relief. However,
unless we see a direct change to the EFSF's modus operandi, G20 FX
is unlikely to be affected signficiantly. The size (amount) and scope
(type of asset class) of EFSF buying is the key. A resoultion is most
likely in March but a an agreement now is possible. If the scheduled
European auctions don 't proceed smoothly, tension will be high
amongst European policymakers to find a quick, firm solution to the
European sovereign debt problem. We could see hasty action on behalf
of European Finance Ministers and Central Bankers if market rumours
and opinion take the same course as they did with Greece and Ireland
in 2010.

*Disclaimer:*
We provide an execution-only service. The material contained here does
not contain (and should not be construed as containing) investment
advice or an investment recommendation, or, an offer of or
solicitation for, a transaction in any financial instrument. We accept
no responsibility for any use that may be made of these comments and
for any consequences that result. This communication must not be
reproduced or further distributed. All information in this publication
has been compiled from publically available sources that are believed
to be reliable; however we cannot guarantee the accuracy of all
information. All information and documentation associated with this
report has been produced for the purposes of providing the report
only.

* Complete Report

EURUSD: bearish outlook expected to prevail

2011-02-14T19:31:00.001-08:00

!! EUR/USD !!

The pair will likely remain volatile this week and the bearish outlook
which gathered pace last week is again expected to prevail. This week
sees the return of government debt auctions by the peripheral Eurozone
states in form of Spanish bonds and Portuguese T-bills. In addition to
that, investors will be paying a particular attention to the release
of the ZEW Survey, performance of which is crucial in judging the
economic recovery not just in Germany but is also a excellent
indication of business attitude across the bloc. If that wasn't
enough, German and France are due to release their preliminary Q4 GDP
readings. In terms of technical levels, a major support is seen at
1.3500, which once broken will open the door towards a support level
located at 1.3479 which is also the 38.2% Fibonacci retracement of the
1.2860-1.3862 go.

!! GBP/USD !!

This is a crucial week for the GBP currency since the data and events
that are due to take place will be seen as key indicators whether the
BoE will bring to somebody's attention rates in H1 2011 or in fact
remain on the side-lines well into later 2011. The release of the
latest CPI data will likely show that inflation has jumped to above 4%
and that core CPI now stands at 3%. Much of the rise will be
attributed again to a rise in commodity prices and also to the fact
that retailers have all applied a higher VAT rate. But the major risk
which may see the currency surrender a majority of the recent rise is
the Quarterly Inflation Report by the BoE which is expected to show
that the policy makers are stubborn that a high level of economic
slack will bring down inflation to a mandated level. Should this prove
to be the case investors will be mandatory to reposition their rate
hike expectation which will result in a broad based GBP sell-off.
Finally, in terms of technical levels, key supports are seen at 1.5922
which is also the 38.2% Fibonacci retracement of the Dec-Feb go,
followed by the 100DMA at 1.5825. On the other hand, resistance levels
are seen at 1.6020 and then at 1.6115/40.

!! USD/JPY !!

A slew of risk events in Europe and the US, together with the fact
that the USD index remains in a bullish sample indicates that the pair
will remain on an upward trend this week. Still, this week's release
of the monthly report may see the BoJ policy members upgrade its
assessment on the economy and while the interest rate range is also
expected to remain unchanged, the minutes may show sign of hope for
the economy.

Source: Fxstreet.com

London Session: Risk-On As We Start The Week

2011-02-14T08:14:00.003-08:00

* Risk-on resumes after Mubarak resigns

* Plates is the world's following largest economy as Japan flounders
in Q4 2010

* Euro area sovereign problems rear their head once more and weigh
on the euro

* GBP likely to be choppy as consequence risks get closer

The week is starting off pretty much as we left it on Friday. The
markets are still in risk-on mode after the resignation of Egyptian
President Mubarak and the honestly cool transition to military rule
until elections later this year. This has boosted risky assets. The
Aussie is higher and stocks are also responding well to the end of
protests in Tahrir square in Cairo. Oil fell sharply on Friday as
threats to global oil supply from protests disrupting trade flows on
the Suez Canal were drastically reduced. Oil is consolidating a
modest at the start of this week, as investors reassess the risks;
this is reflected in the "doji" sample forming on the daily WTI
crude chart, which suggests that bulls and crude bears are honestly
balanced for now.

In a honestly light data calendar today investors will be watching the
developments in Egypt, particularly the economic impact, which could
run into the billions of Egyptian pounds after the economy impose a
curfew to an nearly complete be idle during 18 days of protests. They
will also assess the news that Plates overtook Japan as the world's
following largest economy after Japanese GDP for the fourth quarter of
last year contracted by 1.1 per cent due to a slowdown in exports and
fading in government stimulus plans which hurt domestic utilization.
GDP is expected to bounce back in the first quarter as a weaker tone
to the yen this year all help to improve Japan's terms of trade spot.
The yen has had a mixed result to the GDP news, USDJPY has come off
its highs and the Nikkei also closed higher after a strong showing in
the Asia session. Of course, part of this may have been due to Asian
stocks moving in line with the improvement in sentiment toward risky
assets at the end of last week.

Although Plates claimed the mantle of following largest economy from
Japan, it is still many years from claiming the ultimate title, that
of largest global economy. Its economy is just under $5 trillion,
compared with the U's economic behemoth, which stands at $14 trillion.
But there was a sign that Plates was rebalancing its economy toward
domestic demand, something it will need to do to try and take on the
US in the growth stakes in the coming years. The trade weigh for
January narrowed sharply, the surplus was $6.46bn versus expectations
of $11.3bn, after a massive 51 per cent surge in imports, relative to
a 37.67 per cent gain in exports. The huge increase in imports was
place down to the Lunar New Year holiday on 2 February and also rising
commodity prices. But, it's unlikely that import growth of this
magnitude can be sustained, and we wouldn't be surprised to see the
trade surplus widen in the coming months.

The euro is on the back-foot this week and has had a sharp go lower
versus the other major currencies. This is surprising since usually
the euro trades alongside risk. But, as we have pointed out before,
the euro has been trading more in line with higher yields rather than
risk in recent weeks. Yields have come off on the back of: 1, a
reduction in interest rate expectations after the ECB toned down its
hawkish rhetoric ; 2, a flare up in sovereign debt concerns –
Portuguese 10-year yields are currently above the crucial 7 per cent
level and press reports suggest the Irish bailout plot is encountering
problems; and 3, the uncertainty about succession at the ECB after
Bundesbank President Axel Weber resigned from his post effective April
30. This is weighing heavily on the single currency. Industrial
production data from across the Eurozone released this morning did
modest to help matters. It contracted 0.1 per cent on the month,
doubtless due to weather-related factors. But the annualised rate of
growth is still a honestly healthful 8 per cent, driven by the core
economies of Germany and France.

Ahead this week look out for consequence risk in the Eurozone and the
UK. Italy holds a 15 –year debt auction today, while Spain holds a
15-year auction on Thursday. These will be key litmus tests for
investor sentiment towards Southern European debt. Also, the UK's CPI
data on Tuesday and Inflation Report and accompanying press conference
by Mervyn King on Wednesday will be key drivers of the pound vacant
forward. It could be a volatile few days for sterling, and investors
need to strap themselves in tight. The pound has started the week in
honestly mixed fashion as investors' demand for dollars pushed GBPUSD
down from 1.6080 to 1.6020 at the start of the European session.

Also, watch out for headlines regarding Obama's presentation of the US
Budget, it is expected to include some harsh spending cuts to reign in
the US's enormous shortage.

Source: ActionForex.Com

The expectations gauge declined to 67.6 from 69.3

2011-02-14T08:14:00.001-08:00

A very vital indicator of US economic improvement was released on
Friday. The consumer sentiment rose in February, success the highest
level since June.

The gauge hit 75.1, up from a final January reading of 74.2. The
current-conditions index rose to 86.8 in February, the highest since
January 2008, up from 81.8 in January. Meanwhile, the expectations
gauge declined to 67.6 from 69.3.

!! THE WEEK AHEAD !!

*MONDAY:* NY Fed Pres speaks

*TUESDAY*: Retail sales, Empire State Manufacturing Survey, import &
export prices, Treasury international capital, business inventories,
housing market index, Cleveland Fed Pres speaks, Dodd-truthful
hearing, Fed Treasury Secretary Geithner testifies before US House,
Fannie/Freddie reform hearing, credit card default rates reported, 13F
filings due; Earnings from Barclays, Dell and Tesla

*WEDNESDAY:* Weekly mortgage apps, housing starts, PPI, industrial
production, House hearing on FCIC report, oil inventories, FOMC
minutes; Earnings from Comcast, CBS.

*THURSDAY:* Weekly jobless claims, CPI, leading indicators,
Philadelphia Fed survey, Chicago Fed Pres speaks, money supply;
Earnings from Barrick Gold, AngloGold and Nordstrom

Source: Fxstreet.com

Forex Weekly Outlook - February 14-18

2011-02-13T05:13:00.002-08:00

*US Inflation data, TIC Long-Term Buys, UK employment data, American
FOMC Meeting Minutes and Unemployment Claims are the highlight of this
week. Here is an outlook on the coming events.*

Increases in prices for specific goods does not reflect on overall
inflation which is currently below the central bank's desired level
said Dennis Lockhart, president of the Centralized Reserve Bank of
Atlanta. Low inflation rates was the reason for the Fed's following
round of bond buying in November. Lockhart said the $600 billion
curriculum is already working.

* *German ZEW Economic Sentiment:* Tuesday, 10:00. German economic
sentiment climbed more than expected in January success 15.4
points from 4.3 points in December. Economists had forecast an
increase to 7 points. And the Eurozone index increased to 25.4
points in January from 15.5 points in December. ZEW President
Wolfgang Franz said, "The currently low level of real interest
rates should strengthen demand for capital equipment in Germany.
Increased job security stimulates private utilization". A climb
to 20.2 is expected now.

* *US Core Retail Sales: Tuesday, 13:30.* Retail Sales continued to
grow in December increasing by 0.6%, from a month earlier rising
for the six consecutive months. Core sales, which remove the
volatile autos and gasoline components also rose but by a lesser
0.4%. Core retail sales, is expected to gain 0.6% while Retail
sales is predicted to increase 0.5%.

* *US TIC Long-Term Buys:* Tuesday, 14:00. U.S. Treasury
International Capital buys rose above expectations in November
soaring to USD 85.1 billion after diminishing to USD 28.9 billion
in October while analysts had expected buys of long-term
securities to reach USD 46.7 billion. This data reflects the weigh
of domestic and external investments. Further growth to USD 91.3
billion is predicted.

* *British Employment Data:* Wednesday, 9:30. The number of people
claiming unemployment benefits in the U.K. fell more-than-expected
by a seasonally adjusted 4,100 in December, after diminishing by
3,200 in November. Analysts had expected the claimant count to
fall by 1,400. The rate of unemployment was maintained at 7.9% in
line with expectations. Another fall of 3,300 is expected now.

* *British Inflation Report:* Wednesday, 10:30. The
recent UK inflation data came in at CPI 3.7% for December
2010 with real inflation at just above 6%. This is well above
the BOE claim that high inflation of above 3% was permanently
just temporary and that it would resolve in a sub 2% rate by
the end of the year (2010). The BOE's recent Inflation Report
in November 2010 forecasted UK CPI Inflation to target an
ahead of schedule 2011 peak of 3.5% before inflation falls to
below 2% CPI by the end of 2011 to target a rate of approx
1.7%, and for inflation to remain well below 2% into the end of
2012, Meanwhile high inflation continues to rise
during 2011.

* *US Building Permits:* Wednesday, 13:30. Building permits for new
construction, or additions, surged to 635,000 in December well
above the forecasted reading of 555,000 following 530,000 in
November. Analysts are optimistic regarding the housing market
forecasting growth in the new single-family home sales. A smaller
gain of 570,000 is predicted now.

* *US* *PPI :* Wednesday, 13:30. Producer price inflation rose
more-than-expected by 1.1% in December after rising by 0.8% in
November while analysts had expected PPI to increase by 0.7%. Core
PPI, which excludes food and energy costs, rose in line with
expectations, rising by 0.2% in December, after increasing by 0.3%
in November. A climb of 0.9% is forecasted now.

* *American FOMC Meeting Minutes:* Wednesday, 19:00. The previous
FOMC meeting minutes released on January focuses on the gradual
growth in employment, the concern about the housing market and the
risk of deflation due to low inflation rates.

* *Japan**'s Inflation Report:* Tuesday. Japan's central bank
kept it key interest rate unchanged at virtually zero in to
protect the fragile economy. According to expectation BOJ's
nine-member policy board voted unanimously at a two-day meeting to
keep the overnight call rate target at 0 to 0.1 percent. Although
Japan's economy has been pressured by slowing overseas demand, a
persistently strong yen and deflation the central bank predicts,
but, that the economy will gradually find its footing again and
return to a "moderate recovery path" in correlation with the
growing global economy.

* *US* *Core CPI:* Thursday, 13:30. CPI in December jumped 0.5
percent, following a modest 0.1 percent rise the month before.
Analysts had projected a 0.4 percent boost. Without food and
energy, CPI inflation came in at 0.1 percent, equaling the rise
for November and matching expectations. CPI is in a growing trend
due to higher oil prices while the Core CPI is soft due to weak
housing and gray struggle among retailers. In coming months, the
Fed likely is vacant to have to address this issue of two track
inflation between headline and core numbers.Core CPI is expected
to increase by 0.2%.

* *US Unemployment Claims:* Thursday, 13:30. The number of Americans
filing new applications for regular state unemployment-insurance
benefits fell 36,000 to a seasonally adjusted 383,000 success the
lowest level since July of 2008. Analysts expected an early-claims
level of 411,000. The job market is showing a real recovery. The
number of new claims is expected a slight climb to 401,000.

* *US Philly Fed Manufacturing Index:* Thursday, 15:00.
Manufacturing activity in Philadelphia fell unexpectedly in
January to 19.3 after rising to 20.8 in December revised down from
24.3. Analysts had expected the index to rise to 21.0. The report
said that all of the survey's broad indicators remained positive
this month and there was an apparent pickup in new orders and
employment. In addition, the survey's broad indicators of
future activity suggest that firms expect a continued expansion in
activity over the next six months. Manufacturing activity is
predicted to grow further to 20.8.

* *Ben Bernanke speaks:* Friday 13:00*.* Centralized Reserve
Chairman Ben Bernanke is due to participate in a panel discussion
titled "Global Imbalances and Financial Stability" at the
Global Imbalances and Financial Stability Launch Consequence, in
Paris. He will doubtless talk about stimulus programs to help
recovery. His words have fantastic influence on the market.

*All times are GMT.

Markets End the Week in Risk-off Mode

2011-02-13T05:13:00.001-08:00

It's been another up-and-down week for forex markets. We started the
week in risk-seeking mode, but that waned as we progressed through the
week and by the start of yesterday's European session risk nose-dived
as investors were spooked by renewed concerns about the political
uncertainty in Egypt and worries that inflation concerns will slow
global growth. The dollar has been the chief beneficiary - the
greenback has risen by 1.5 per cent over the last two days on a
broad-based basis. EURUSD has lost its momentum and fallen below
1.3595 - the top of the Ichimoku cloud. The pair is now bouncing along
the 1.3520 zone, and a weekly close down here would spell further
losses for the single currency.

The yen and Swiss franc have been hit the toughest by the dollar's
resurgence, as the greenback takes the prize for most sought-after
safe haven. A weekly close above 78.55 - the base of the daily
Ichimoku cloud chart - in the dollar index would be positive for an
extension of dollar gains next week, and we could see back to the
80.00 highs from last month.

A stronger dollar is weighing on commodities and stocks. The Eurostoxx
index is down more than 1 per cent so far today, and the futures
market is pointing to a weak opening for US stocks. While the euro is
being weighed down by the rise in the dollar, European equities are
getting hit by concerns about the solvency of Portugal. Its 10-year
lending costs are back at unsustainable levels, above 7 per cent,
which is the threshold that could cause the Iberian nation to apply
for bailout funds from the EFSF rescue facility. This concern is
weighing on sentiment towards the European banking sector, which holds
a lot of the peripheral nations' debt. The financials' sector in the
Eurostoxx 50 is down more than 1 per cent so far today, which is
dragging down the entire market as it makes up nearly 30 per cent of
the index.

The pound is performing honestly well, but GBPUSD is showing weakness
and is currently below 1.6000. As expected, the Bank of England kept
rates on hold yesterday but the sceptre of rate hikes has not
evaporated. The market is still expecting 3 rate hikes this year, and
the 3-month GBP swap rate has started to rise again after a sharp drop
yesterday. The pound is still in an uptrend and we expect it to retain
its bullish tone as we close the week. Next week, but, is a different
ball game. The Inflation Report next Thursday is a major consequence
risk for the pound as the Bank of England will give their outlook on
growth and inflation for the next 2 years. This will highlight whether
the market has been right to price in such aggressive hikes, or if it
has got ahead of itself. Whatever the outcome, it has the potential to
be a volatile time for GBP.

Elsewhere, the Aussie dollar is back below parity, diminishing in line
with other risky assets. It was also weighed down by comments from RBA
Governor Stevens who said that expectations of further rate hikes not
taking place until the latter part of this year were okay, as the Bank
was ahead of the curve on the inflation front due to its previous rate
hikes since 2009. German CPI fell in January as expected, but the
annualised rate remains at 2 per cent, which is at the high end of the
ECB's target inflation rate. UK Producer prices for January reinforced
the growing pressures in the inflation pipeline. This is likely to
fuel further concerns about the Bank of England's inflation-fighting
credibility and calls for the Bank of England to hike rates.

In contrast to this, the Centralized Reserve is about to lose one of
its hawkish members. Fed Governor Warsh is will step down on March 31.
He was one of the more outspoken critics of the following round of
quantitative easing.

Ahead today, the University of Michigan confidence data is out. It is
expected to rise to 75.0 from 74.2 in January. The trade weigh is also
expected to deteriorate, with the shortage rising from $38.3bn to
$40.5bn in December. This might garner some attention, as weak exports
could weigh on growth vacant forward.

Source: ActionForex.Com

Dollar Rampant ahead of Weekend on Egyptian Fears

2011-02-12T19:08:00.004-08:00

Dealing with the unexpected has sent the dollar surging overnight in
response to President Mubarak's unpredicted choice to extend his stay
in office until September. Making matters of poorer quality is news
that the nation's armed forces back his plot and will aid the
transition over time. The importance is a buildup in the roar from the
thronging masses descending on Cairo's Tahrir Square. Heading into the
weekend during which whatever thing could happen and, very likely
will, the only opportunity traders are keen to take is that the
dollar's safe haven reputation will send it higher on a day when a
further sign of domestic strength might reveal a rise in consumer
confidence to its highest in seven months.

*U.S. Dollar* - The dollar index jumped after Mubarak addressed his
people and said he'd not take note to the voice of an increasingly
hostile further than world. The dollar rose by 0.4% to 78.58 against a
basket of currencies as investors ran for cover seeking its safety
ahead of the weekend. Later on Friday morning the University of
Michigan will release its January consumer confidence reading, which
is predicted to show a further improvement as households improve. If
the index matches the expected reading of 75.0 it will be the best
performance since June. Investors keep changing their take on the
dollar between its use as a funding vehicle as the global economy
recovers and as an outright bullish play. A recent slide in bond
prices has changed investors' perceptions over the dollar's role as a
involve trade victim. The spike in bond yields has burned many
investors as borrowing costs rise and with the tailwind of widening
yield spreads further boosting the dollar's appeal.

*Japanese yen* - Testimony to the dollar's changing role in the
involve trade arena is today's ascent for the greenback to its highest
against the yen since January 7. The dollar bought ¥83.68 making for
a weekly rise from last Friday's close at ¥82.37. The dollar was
bought against most Asian currencies at the end of the week after the
People's Bank of Plates set its daily reference rate for the yuan at
its strongest in several weeks and the Bank of Korea unexpectedly left
monetary policy unchanged.

*Aussie dollar -* Governor Stevens appeared in front of a
parliamentary committee on Friday to discuss the economy and monetary
policy. He came across as content with current policy and described
monetary conditions as being "on the firm side" adding that
policymakers had deemed it "sensible of late" to leave interest rates
unchanged. Expectations of any further rise in interest rates promptly
diminished and added to the risk-off nature of trading in light of
events in Egypt, the Aussie dollar slumped right through par with the
dollar for the first time since January 31 and sad down at 99.60 U.S.
cents.

*Euro -* The euro is losing out to the dollar and is also hampered by
growing concerns that the sovereign debt crisis is on the verge of
reemerging. The euro reached a session low at $1.3508 matching
Monday's low. German consumer prices for January dipped once again
between months but the annual pace nudged higher to a 2% pace.

*British pound -* Former Bank of England outsider Kate Barker turned
conventional wisdom on its head, making traders reckon about the
plausibility of sterling-supportive increases in interest rates. She
noted that the Bank is likely to be highly wary of fuelling the pound
though a rise in interest rates in a go calculated to control
inflation but that would undermine growth. Recognizing that the
integrity of the Bank is challenged at a time when inflation is nearly
twice its target and growth has had "the wind taken out of its sails"
Ms. Barker rephrased the burning issue of credibility facing the Bank.
If the MPC voted to now tighten monetary policy to address inflation
and caused a crush to growth at a time when the economy is already
hamstrung a whole new consensus over its credibility would emerge with
people likely to question, "Do we really want these people running our
economy?" Ms. Barker noted that exporters who have benefitted from a
decline in the level of the pound since 2007 could easily afford to
see sterling weaken from its current levels in a go that would benefit
the broader economy. The pound slid on Friday to $1.5963 before
rebounding to above $1.6000.

*Canadian dollar -* The Canadian unit aced a nice combination on
Friday, not only lynching on to the coat tails of a firmer greenback,
but also uplifted by rising crude oil prices s perceived tensions in
the Middle East flared. The loonie shrugged off an earlier decline to
the greenback to $1.0014 U.S. cents before edging back to an unchanged
$1.0044 cents.

Source: ActionForex.Com

Critical Week for Dollar, Pound as Key Data Releases to Give Insight on Inflation Debate

2011-02-12T19:08:00.003-08:00

With three significant reports expected, next week will give investors
insight into the underlying fundamentals of the U.S. economy which
could cause an increase in volatility for Dollar-based pairs. Tuesday
has the most vital data, starting with the release of the British
Consumer Price Index, interest rate hawks will look for evidence to
bring to somebody's attention rates and start tightening monetary
policy as sustained low rates have flooded capital markets with cash.
Also on Tuesday, the Euro-zone's growth will be examined, and later
in the session U.S. Retail Sales data will be released. Later in the
week, the CPI gauges for the U.S. and Canada will also be released,
both of which are forecast to show continued increases in prices at
the same if not quicker rates than the previous period.

* U.K. Consumer Price Index (YoY) (JAN): February 15 – 09:30 GMT

A continued period of low interest rates appears to be putting
increasing difficulty on the British economy, as inflation
doubtless accelerated in January to its fastest pace in over two
years. Coupled with an increase in the sales tax, rising commodity
prices could push the CPI up by 4.0 percent, according to survey
figures. The CPI grew by 3.7 percent in December. The figure will
mark another data release in which inflation is above the Bank of
England's 2.0 percent threshold for their standard target, and
rhetoric from inflation hawks will likely be ratcheted up as a
result. Previously this week, the Bank of England maintained their
key interest rate at 0.5 percent, while continuing its bond hold
curriculum at £200 billion. With growth remaining muted, it
appears that the U.K. economy could be entering a state of
stagflation – low growth rates and rising prices.

* German Combined Domestic Product s.a (QoQ) (4Q P): February 15 –
07:00 GMT

After diminishing small of expectations last quarter, European
growth expectations have been lowered to rise by just 0.4 percent,
after gaining a slight 0.3 percent in the third quarter of 2010.
German GDP will likely be the more market moving data, but, as it
has been the German economy that has supported a honest share of
Euro-zone growth while many periphery countries struggle. German
GDP is forecasted to grow by 0.5 percent, after expanding by 0.7
percent in the third quarter of 2010. Despite a jobless rate on
hold at 10.1 percent for the Euro-zone, it appears that concerns
over the solvency of some European Union nations – mainly the
PIIGS – have frightened away investors, as investment contracted
towards the end of the year. For much of the following half of
2010, as sovereign debt concerns increased, growth became reliant
on export growth; the trend is expected to hold, as sales growth
from emerging markets will need to be strong in order for the
European Union to experience higher growth rates as uncertainty
surrounds some member nations.

* U.S. Advance Retail Sales (JAN): February 15 – 13:30 GMT

Consumer demand is expected to continue to remain weak, estimates
for Advanced Retail Sales for January have shown. Early survey
figures project sales at 0.5 percent, less than the 0.6 percent
gain in December. A recovery in consumer demand is an vital part of
the U.S. recovery, as modest growth in the labor market has place
increasing difficulty on the Dollar. But, after a slew of
hard-hitting winter storms that unnatural much of the eastern half
of the country, it appears that markets have already priced in the
possibility that the sales data will disappoint. Accordingly,
expectations of increased demand will likely be higher vacant
forward as the weather improves over the next few months.

* U.S. Consumer Price Index (YoY) (JAN): February 17 – 13:30 GMT

As economic releases crossing the wires over the past few weeks
have pointed towards a quicker pace of economic growth in the U.S.,
the release of the CPI on Thursday will weigh heavily on policy
makers as the debate between inflation hawks and doves heats up.
The CPI is expected to have grown by 1.6 percent in January, after
increasing by 1.5 percent in December. While inflation has been
muted thus far in the U.S. following massive injections of
liquidity into the markets, hawks are becoming increasingly
apprehensive that rising commodity costs coupled with higher food
prices abroad may be a sign that a sharp increase in price
difficulty may not be that far off in the U.S. On the other side,
inflation doves have noted that wage growth remains low, and job
growth has not selected up yet, so it remains imperative to
continue to leave rates at historical lows for the time being. The
U.S. CPI release figures to be the most vital release of the entire
week.

* U.K. Retail Sales (MoM) (JAN): February 18 – 09:30 GMT

After diminishing by the most ever in December, U.K. Retail Sales
are expected to make a instant rebound, forecasted to grow by 4.3
percent in January. Sales had fallen by 0.8 percent in December
from November. But, the expectation for such a rebound may be
overzealous, as, despite humanizing weather conditions in Britain
which was to blame for the decline in sales in December, the
government passed a value-added tax in order to help close the
budget shortage. That, as well as rising inflationary pressures,
could have squeezed disposable income for shoppers, leading to a
lower figure. Should the figure disappoint, expect chatter by Bank
of England policy makers to arise on how to fix an economy headed
toward stagflation.

See the DailyFX Calendar for a full list, timetable, and consensus
forecasts for upcoming economic indicators.

Written by Christopher Vecchio, DailyFX Research.

To contact the author of this report, please send inquiries to:
cvecchio@fxcm.com

Source: Dailyfx.com

The Trading Week: Feb. 14 - Feb. 18

2011-02-12T19:08:00.001-08:00

Feb.
11, 2011
(Allthingsforex.com)
– In the
week ahead, a
sequence of
U.S. consumer
spending,
housing,
industrial
activity and
inflation
reports will
offer more
details on the
state of the
recovery in the
world's
largest
economy, while
crucial
inflation data
from the U.K.
should provide
the clues to
the future
direction of
the Bank of
England's
monetary
policy.

In
training for
the new trading
week, here is
the outlook for
the Top 10
spotlight
economic events
that will go
the markets
around the
globe.

1. JPY-
Japan GDP-
Combined Domestic
Product,
the main
measure of
economic
activity and
growth, Sun.,
Feb. 13, 6:50
pm, ET.

The
preliminary
estimate of the
Japanese Q4
2010 GDP is
forecast to
show the
economy
contracting in
the fourth
quarter with a
reading of
-0.5% q/q, down
from 1.1% q/q
in Q3 2010.

2. GBP-
U.K. CPI-
Consumer Price
Index,
the main
measure of
inflation
preferred by
the Bank of
England, Tues.,
Feb. 15, 4:30
am, ET.

The
U.K.
inflationary
pressures are
expected remain
tenaciously
above the Bank
of
England's
3.0% ceiling
for another
month with the
consumer
inflation gauge
forecast to
rise by 4.0%
y/y in January
from 3.7% y/y
in December. As
long as
inflation
levels remain
elevated, the
Bank of England
could be
prompted to
bring to somebody's attention rates
sooner rather
than
later.

3. EUR-
Euro-zone GDP-
Combined Domestic
Product,
the main
measure of
economic
activity and
growth, Tues.,
Feb. 15, 5:00
am, ET.

Following a
preliminary
estimate of
0.3% q/q, the
following reading
of the
Euro-zone GDP
is forecast to
bring an upward
revision of the
fourth quarter
economic growth
by 0.4% q/q in
Q4 2010.

4. USD-
U.S. Retail
Sales,
an vital
gauge of
consumer
spending
measuring sales
at retail
establishments,
Tues., Feb. 15,
8:30 am, ET.

Consumer
spending in the
U.S. could
register
another
positive month
with retail
sales forecast
to increase by
0.6% m/m in
January, same
as the 0.6% m/m
reading in
December.

5. JPY-
Bank of Japan
Interest Rate
Announcement,
Wed., Feb. 16,
expected around
12:00 am, ET.

With the Q4
GDP expected to
show the
Japanese
economic growth
slowing down,
the Bank of
Japan could
consider
additional
stimulus for
the economy and
would be likely
to maintain its
accommodative
monetary
policy, keeping
the benchmark
interest rate
in a target
band between 0%
and
0.10%.

6. GBP-
Bank of England
Inflation
Report,
the central
bank's
official
assessment on
current
inflationary
pressures and
outlook on
future
inflation,
Wed., Feb. 16,
5:30 am, ET.

In
its previous
report the Bank
of England has
said that
inflation could
rise above 4.0%
before easing
back to the
bank's
comfort level
around 2.0%.
The market has
been pricing
aggressively Q3
rate hike
expectations
and if the
report reveals
that the Bank
of England
expects
inflationary
pressures to
continue to
rise, the odds
for an interest
rate hike in
the near future
would increase,
lending support
to the pound
sterling.

7. USD-
U.S. Housing
Starts,
a leading
indicator of
housing market
activity
measuring
construction of
new residential
properties,
Wed., Feb. 16,
8:30 am,
ET.

Throughout
last year, the
U.S. housing
data has been
either weak or
mixed, at best,
and this report
could have a
similar outcome
with the
housing starts
registering a
slight increase
to 540K in
January from
530K in
December, while
building
permits decline
to 570K from
630K in the
previous month.

8. USD-
U.S. Industrial
Production,
the main gauge
of industrial
activity
measuring the
output of
factories,
mines and
utilities,
Wed., Feb. 16,
9:15 am, ET.

Manufacturing
activity in the
U.S. is
expected to
increase by
0.5% m/m in
January, lower
than the 0.8%
m/m reading in
December.

9. USD-
U.S. FOMC-
Centralized Open
Market
Committee
Meeting
Minutes,
a comprehensive
report of the
Fed's
meeting that
could provide
an outlook on
the economy,
interest rates
and future
monetary
policy, Wed.,
Feb. 16, 2:00
pm, ET.

The
minutes are
expected to
highlight the
reasons behind
the Fed's
choice to
stay the course
and continue
its
ultra-accommodative
monetary policy
of near 0%
interest rates,
coupled with
the $600
billion
quantitative
easing curriculum
of Treasury
bond buys.

10. USD-
U.S. Jobless
Claims,
an vital
gauge of
employment
trends and
labor market
conditions, and
U.S. CPI-
Consumer Price
Index, the main
measure of
inflation in
the
world's
largest
economy,
Thurs., Feb.
17, 8:30 am,
ET.

After last
week's
better-than-expected
drop to 384K in
the number of
Americans
filing
applications
for
unemployment
benefits, the
jobless claims
could spike a
bit higher with
a reading of
410K.
Inflationary
pressures in
the U.S. are
forecast to
increase with
the Core CPI
rising by 0.2%
m/m and 1.7%
y/y in January
from 0.1% m/m
and 1.5% y/y in
December.

Source: Fxstreet.com

Currency Markets, Risk Appetite Threaten Trend-Defining Reversal Next Week

2011-02-11T23:39:00.005-08:00

* Currency Markets, Risk Appetite Threaten Trend-Defining Reversal
Next Week

* Will the Economic Docket Claim Responsibility for the Next Trend
or Pure Sentiment?

* European Financial Strains and Chinese Bubble Concerns Starting to
Show Through Equity Climb

DailyFX Involve Trade Index

Risk Indicators:

DailyFX Volatility Index

What is the DailyFX Volatility Index:

USDJPY 25 Delta Risk Reversals 3 Month

Reserve Bank of Australia Expectations

How are Rate Expectations calculated:

Highest And Lowest Yields:

The Interest rate used to benchmark the currency basket is the 3
months Libor rate

Is Involve Trade and risk appetite rising or diminishing? Discuss how
to trade yields and market sentiment in the DailyFX Forum

Additional Information

What is a Involve Trade

Involve Trade As A Strategy

Written by: John Kicklighter, Currency Strategist for DailyFX.com

To receive John's reports via send by e-mail or to submit Questions
or Comments about an condition; send by e-mail jkicklighter@dailyfx.

Source: Dailyfx.com

Markets began to fret over the potential bailout of Portugal

2011-02-11T23:39:00.003-08:00

!! EUR/USD !!

The pair finished the week lower as market participants turned their
attention to the rising yields of the Portuguese government bonds
which is threatening to undermine the nation's debt issuance
curriculum and in turn lead to another bailout by the EU/IMF. In
addition, the go lower was supported by weaker than expected German
Factory Orders and Industrial Production data. Countering those fears
was a lower than expected take up of the ECB's 7-day "money
operation" which was especially welcomed given the looming stress
tests for the EU banks. By the closing stages of Friday the pair was
trading just above the key 1.3500 level, which once broken will open
the door towards a support level located at 1.3479 which is also the
38.2% Fibonacci retracement of the 1.2860-1.3862 go.

!! GBP/USD !!

The pair disastrous to benefit from the release of better than
expected BRC Retail Sales, as well as RICS House Price and finished
the week lower near the key 1.6000 level as renewed surge in the USD
which in turn weighed heavily on investor appetite for the currency.
In addition, speculation that high yields of government bonds will see
Portugal bailed out also aided to the renewed strength in the USD. In
terms of other UK specific news, despite the fact that the shadow MPC
voted 5-4 for a rate hike, the MPC of the BoE refrained from doing so
and instead kept both the Asset Hold Facility (APF) and interest rates
unchanged. In terms of technical levels, key supports are seen at
1.5922 which is also the 38.2% Fibonacci retracement of the Dec-Feb
go, followed by the 100DMA at 1.5825. On the other hand, resistance
levels are seen at 1.6020 and then at 1.6115/40.

!! USD/JPY !!

The pair finished the week higher amid a stronger USD as markets
started to fret over the potential bailout of Portugal, while a better
than expected weekly jobs data out of the US further boosted value of
the greenback.
The pair remained a by product of risk averse sentiment throughout the
session which in turn saw the pair thwart 83.00 level. It is worth
noting that Temperamental's said a lack of success by the Japanese
government on fiscal reform would have a negative implication for the
country's credit rating, while deputy administration director of the
IMF Naoyuki Shinohara said that Japan's large debt burden is also
unsustainable.
But at the same time the Nikkei Business Daily reported that the
central bank may upgrade its assessment of the overall economy at a
monetary policy meeting next week.

Source: Fxstreet.com

Weekly Focus: Growth and Inflation Data to Dominate in the Coming Week

2011-02-11T23:39:00.001-08:00

*Market Movers ahead*

In Euroland we have a full calendar for the week to come. The main
release is Q4 GDP figures for Euroland, Germany and France on Tuesday.

On Tuesday we expect the US retail sales report for January to
surprise positively. On Wednesday the Minutes from January's FOMC
meeting will give some indication how far the new found unity in the
FOMC goes. Further look out for housing data, local confidence surveys
from New York and Philadelphia Fed and core CPI during the following
part of the week.

There are two vital events in the UK; the CPI release on Tuesday and
Bank of England's Inflation Report on Wednesday.

Also look out for the release of Chinese consumer prices, which are
expected to have risen quick reflecting seasonal distortions from the
Chinese New Year holiday.

France chairs G20 in 2011 and will host the first G20 finance minister
meeting on 18-19 February in Paris.

*Global Update*

It's been a very cool week on the data front in the US, but overall
data continued to give more reason for optimism regarding the
sustainability of the recovery.

The main focus this week remained on the ongoing riots in Egypt. The
Egyptian President Mubarak clung on to power as he announced a
transfer of power to his vice president in a speech Thursday night,
but retained his title.

Fed chairman Ben Bernanke repeated his dovish tone at his testimony
for the housing committee this week. Although sounding a bit more
positive on the employment outlook he reiterated that unemployment is
still very high and far from Fed's target of full employment.

*Full Report in PDF*

Source: ActionForex.Com

Potential US Dollar Reversal Calls for Breakout and Trend Trading in Week Ahead

2011-02-10T22:37:00.003-08:00

Market Conditions Synopsis

A significant US Dollar rebound suggests we may be at a potential
turning point for key US Dollar trading pairs, pointing to volatile
and eventful trading conditions in the week ahead.

DailyFX+ System Trading Signals – Quick-moving systems such as
Momentum2 and Breakout2 saw strong performance through the past 7 days
of trading, benefiting from pronounced moves in US Dollar pairs and
other key currencies. Volatility expectations have dropped noticeably
as the European Central Bank interest rate choice and the US Nonfarm
Payrolls report have come and gone. Yet this only just guarantees
volatility will slow in the days ahead as we are arguably at a
potential turning point for the Greenback. We favor Breakout2 and
Momentum2 on most currency pairs in the days ahead. Slower-moving
Momentum1 could falter unless we see pronounced price trends across
the board, while Range1 and Range2 strategies look attractive only on
key range-bound currency pairs.

To gain a superior understanding of all six trading systems, view my
recent presentation on SSI and the trading signals on our FXCM Digital
Expo page.

DailyFX Individual Currency Pair Conditions Synopsis

Volatility expectations have dropped near their lowest in quite some
time. Yet much the same could have been said just two weeks ago, and
we have since seen sharp moves across major currencies through that
stretch. We seldom want to spot ourselves against FX Options market
volatility expectations. Yet they seem relatively underpriced given
the possibility we may be near an vital turning point in pairs such as
the Euro/US Dollar.

Benchmark Trading Systems

Data and Backtest Results Generated using FXCM Strategy Trader

Range and Breakout strategies saw strong performance while Trend
suffered, as the benchmark Moving Average Crossover system remains
small USD. A right reversal would likely hurt Trend systems further
while benefiting Channel Breakout and Range systems accordingly.

Written by David Rodríguez, Quantitative Strategist for DailyFX.com,
drodriguez@dailyfx.com

To be added to this author's distribution list, send an e-mail
subject line "Distribution list" to drodriguez@dailyfx.com

Definitions

Range High – 90-day closing high.

Range Low – 90-day closing low.

Last – Current market price.

Source: Dailyfx.com

U.S. Initial Jobless Claims Fall More than Expected in Latest Week

2011-02-10T22:37:00.001-08:00

Early unemployment insurance claims plunged 36,000 to 383,000 for the
week ending February 5, 2011 following the previous week's 38,000
decline to a 419,000 level (initially reported as 415,000). This
result leaves the level of early claims at its lowest level since July
of 2008. The improvement in the latest week was much larger than
market expectations for claims to fall to a 410,000 level. The
four-week moving average of early claims, which normally provides a
better indication of the underlying trend in labor markets, fell
sharply as well, to 415.5,000 from 431,500 the prior week. Continuing
claims (for the week ending January 29, 2011) dropped 47,000 to
3,888,000 from 3,935,000 last week.

The drop in the four-week moving average of early claims in the latest
week reaffirms the view that the sizeable swings in the data in recent
weeks were likely the result of shifting holiday schedules and
weather-related volatility, and that the underlying downward trend in
layoffs since the near-term spike last August remains intact. This
improvement in the claims numbers has yet to be reflected in
significantly stronger monthly payroll employment growth, with the
latest example being the poorly modest 36,000 increase in payroll
employment in January 2011. With that said, hiring in January was
likely slowed by inclement weather and, given the strength in the
employment components of the ISM releases along with indications that
the overall economic backdrop continues to improve, the decline in
early claims bodes well for employment growth to strengthen vacant
forward.

Source: ActionForex.Com

51/2 Months Without a Pullback

2011-02-10T05:11:00.001-08:00

!! Jack Steiman, On Must-Own Market (SwingTradeOnline) !!

There's no guarantee we'll just start a bear market out of the blue.
In fact, as long as printer Bernanke keeps those presses rolling, the
odds of a bear market are extremely remote. It's all about liquidity
and he's making sure those presses stay on 24/7. The bears haven't yet
accepted the consequences of this reality, and thus the bull market
continues forward and upward, ignoring overbought conditions.

The ancient expression of never playing against the trend is a real
lesson for everyone. If you can reckon from that perspective you can
learn to keep out of harms way. It allows you to stay unemotional.
That's the only way to play successfully. It still amazes me to see
how many people are not playing appropriately and trying to beat the
market to the correction. It's coming. I'm not talking about 2-3%.
That's ordinary. I'm talking about a much more sustained pullback. It
will come, but timing it is really impossible in this environment.

The market keeps sending unfortunate lessons to those who won't take
note. Don't be that person. When you see a reversal that sticks and
tells you it's time to go along then you do so, but until then you
keep long exposure. Not so much that you can't handle the consequences
of a normal pullback of a few percent. If you're not overly exposed,
you can handle a few dollars being taken off stocks as things cool
off. If you're fully loaded long, any normal pullback will feel
overwhelming. Bottom line is if you play without greed you have a much
superior opportunity of success long-term. Stick with the trend and
don't overdo at overbought. End of tale!

The market closed Monday over 1311, or the ancient highs, which, of
course, can only be looked upon as bullish. It doesn't mean the
correction won't start Tuesday, but it is beyond doubt excellent
action to close over 1311. The best part of this bull market, and the
best part again about Monday's action, was the simple reality of
participation all over the stock market world. Sector after sector
either went up, or pulled back a bit, within overall bullish patterns
that simply need handles or flags. Very modest is braking down within
a sector. Some stocks will permanently break down on terrible
earnings, etc., but the sectors are really holding up quite well.

This is the type of action that tells you things are still bullish
because for a market to break lower with break down, you need sector
charts to start flaw on huge volume trends, and we just aren't seeing
that take place. So we are lynching on to our plays for now.
Will take half positions off from time to time when need be, but the
market remains on a must-own basis to some degree. If you want to go
cash and wait for some deeper promotion to take place, I wouldn't
blame you. But I feel it's fine to hold some exposure as the bull
moves along, and just deal with the pullbacks as they occur.

!! Mike Paulenoff, On Oil Versus S&P (MPTrader.com) !!

Oil prices continue to press lower off of the recent high at $92.84
during the first days of the Egyptian crisis., which turned out to be
a Bull Trap.
The ongoing decline is testing key near-term support along the Nov-Feb
support line, now at $85.83. So far Tuesday, the trendline appears to
be holding the onslaught; but, should nearby oil violate and sustain
beneath $85.83, then the price structure will be heading directly for
a test of the prior pivot low of $85.11 (Jan 27), which if breached
will complete a rounded top sample that has been developing since
ahead of schedule December when oil first climbed above $90.

At that juncture, all technical roads will be pointing towards
downside continuation towards $81-$80 next. How will the equity
indices respond to the prospect of a 12%-14% drop in oil prices? In
theory, it should be a net positive for the retail, consumer and
transport sectors, as well as for manufacturers -- unless, of course,
all asset classes initially follow oil's lead into a (well-deserved)
correction.

That said, a break of 1309.00/25 will be the first minor negative
technical signal that will bring to somebody's attention our concern,
while a break of 1298 will suggest strongly that a period of rest and
digestion is in progress in the S&P 500 emini.

!! Harry Boxer, On 4 Charts to Watch (TheTechTrader.com) !!

Several stock we follow are spiking up, breaking out, and showing real
strong relative strength.

Allot Communications Ltd. (ALLT) came down to the bottom of the
channel and has been moving up the last 5-6 sessions, taking a go from
around 11 up to around 14 1/2. The top of the channel around 16 is
beckoning.
That's our small-term trading target. It sure has nice momentum,
fantastic technicals, and is moving along very nicely.

InterDigital, Inc. (IDCC), which has been a recent swing trade target
of ours, jumped 2.69 to 53.50 on Monday, success as high as 54.20.
Nevertheless, up 5.3% on 1.6 million shares. A go toward my trading
target up around 58 may be very doable.

Mercer International Inc. (MERC) had a huge day Monday. It's been in a
gorgeous rising channel for the last 3 1/2 months. Today it popped
1.38, or 16.4%, on 1 3/4 million shares. It appears to be able to go
higher. Looking for a trading target up around 11 - 11 1/2 range.

SodaStream International Ltd. (SODA) reached new all-time highs today
at 44.89, backed off, and closed at 44.28, up 1.79, but nevertheless
acting well. It appears this stock can make it up towards my 48-50
target rather promptly.

Other stocks in our Charts of the Day video are Alon USA Energy, Inc.
(ALJ), Allot Communications Ltd. (ALLT), Accuray Incorporated (ARAY),
AudioCodes Ltd. (AUDC), AXT Inc. (AXTI), Cognex Corp. (CGNX),
Evergreen Energy, Inc. (EEE), Fuwei Films (Holdings) Co., Ltd. (FFHL),
InterDigital, Inc. (IDCC), IDT Corporation (IDT), Mercer International
Inc. (MERC), Motricity, Inc. (MOTR), Repros Therapeutics Inc. (RPRX).
Silicon Graphics International Corp. (SGI), SodaStream International
Ltd. (SODA), and Ultra Clean Holdings Inc. (UCTT).

!! Mel Hickerson, On 51/2 Months Without A Pullback (@mels_info) !!

Five and a half months without much of a pullback and the 30 session
average of intraday trading range has narrowed from more than 2% per
day in June to a mere 0.9% currently. This is painful for day traders.

The largest pullback has been on the order of 4% (November). Six month
stretches without 5% pullbacks are nearly to no avail of. The last
time the SPX traded 5% lower than the thirty session high was on
September 1st. So today was the 108th session since the last 5%
pullback. We went 89 sessions without a 5% into the summer of 2007
after vacant 149 sessions ending in February of 2007.
Looking back through the description of the SPX, most of the lengthy
stretches without a 5% correction end between 100 sessions and 150
sessions with only three such streaks that continued longer than our
current streak during the last 15 years, all three leading up to the
market top in October of 2007.

But having said that, description is currently on the side of the
bears small-term. I am not convinced description means much right now,
*but here are the historical facts:*

Five times the SPX has been at a 52 week high on Payroll day, and then
gapped up more than 0.25%. Over the next three days performance was
consistently negative: -1.0%, -0.2%, -1.8%, -1.1%, and -0.1%. Only one
time was the SPX up more than 1% at any point.

With the SPX up more than 2.5% month-to-date on the first day of the
following week of a month, the SPX was up 1.0% on two occasions, but
lower -1.0% or superior on twenty occurrences out of forty-eight.

Our ten day relative is at 82. Seeing this value above 80 is quite
rare, last happening after the October 13th session.

Market has been up while volume is decreasing. This will often lead to
a brief pullback.

So description is calling for lower as the week progresses. Let's see
what we are given. A excellent down day would certainly broaden the
range for day trades.

We zoomed right up to the key level of 1320 today and spent much of
the day there, closing just below it. Key levels to watch on Tuesday:
1320 remains a key pivot.
Support on the downside is at 1318, 1213, and 1307. Of course, 1304
and 1300 remain as support if we should get that far. On the upside,
1324, 1329 and 1335. There really isn't a lot of resistance overhead
if we break above 1320 and hold it.

Source: Fxstreet.com

China Weekly: Rate Hike Rhetoric Continues Apace; M&A Activity Surges in 2010

2011-02-09T05:30:00.003-08:00

CHINA WEEKLY

According to a recently released report by PricewaterhouseCoopers
(PwC) Plates has set a confirmation in overseas
merger-and-acquisition activities in 2010. The report shows that
Chinese companies launched 4,251 merger-and-acquisition deals, both
internally and overseas, a 16% increase from 2009. The total value of
these deals reached $200 billion an increase of27% from the previous
year. Lu Yubiao, a partner in PwC's M&A department said "the
overseas resources sector is the main target for Chinese M&As, fueled
by the country's rising resource demand to support the rapid
economic growth". Lu also said that Asia, Africa, Australia, the EU
and US markets are major destinations for Chinese capital. Adding
that Chinese buyers have a growing appetite not just in the resources
sector but also for overseas high-tech, equipment manufacturing and
vehicle enterprises. The report also showed that "the Chinese
government is encouraging private-equity (PE) funds in an aim to
channel capital flow into competitive private sectors" according to
Li Ming, partner at PwC. PwC data shows that PEs were involved in 580
M&A deals in 2010, up 66% from 2009, and are playing an increasing
role as the source of Chinese M&A deals. Li said that Chinese M&A
activity is likely to remain active in 2011 as the country's 12th
Five-Year Plot for the period from 2011 to 2015 is set to continue
encouraging domestic industry consolidation and overseas cooperation.
It is our opinion too that Chinese companies will continue to exhibit
strong interest in M&A deals related to highly certified overseas
assets due to the country's surging demand for technology
investments and natural resources.

On the interest rate front an adviser to Plates's central bank, Li
Daokui, told reporters that it would be "understandable" if
interest rates would rise as part of adjustments to policy during the
quarter. As Beijing focuses more inflation and less on maintaining
quick economic growth an interest rate hike in the first quarter may
well be forthcoming. Li said that he expects Plates's trade surplus
as a percentage of GDP to ease to 3.3% in 2010 from 5.8% the year
prior and estimated further easing to around 1% this year. In terms
of overall growth he forecast an expansion of 9.5% this year but
added that 8.5-9% would be a more sustainable rate of growth. These
lower forecasts have been largely accepted by the central banks, and
as mentioned above they are likely shifting their focus away from
maintain quick growth but rather combating mounting inflationary
pressures in the economy. With many now forecasting crude to top
$100, or even $120, this year energy prices remain a serious concern
for the central bank when assessing policy. Chinese markets are set
to return later in the week from their New Year's holiday break and
we expect further rhetoric about rate hikes to follow. Whether the
PBOC will in fact tighten rates remains to be seen, they may elect to
use a RRR hike or some other tool to try and drain liquidity out of
the economy. We remind readers that we have discussed in the past the
earn of hiking interest rates in a nation with an already high
savings rate.

Written by Jonathan Granby, DailyFX Research Team

If you wish to contact the author with comments or questions send by
e-mail jgranby@fxcm.com

DailyFX provides forex news on the economic reports and political
events that influence the currency market.

Learn currency trading with a free practice account and charts from
FXCM.

Source: Dailyfx.com

EUR/USD – Elliott Trumps

2011-02-09T05:30:00.001-08:00

*EUR/USD Current Price:* 1.3637

*Daily Pivots:* S3: 1.3455; S2: 1.3511; S1: 1.3568; P: 1.3630; R1:
1.3686; R2: 1.3748; R3: 1.3809

*EUR/USD:* While it appears that the go up to 1.3863 completed a
5-wave sequence for the C leg of wave 2 or B, 1.3863 must hold on the
topside for us to see further drops in the EUR/USD. If 1.3863 is taken
out then we will likely see slightly higher levels as discussed last
week up to the 1.4000 level. As long as 1.4283 is not breached, the
EUR/USD has room to go lower by all counts. Let us focus on the recent
peak at 1.3863 and the subsequent go down to 1.3507. The go down
appears to be a nice 5-wave sequence which so far has corrected 50% of
the way up to 1.3691. A continued go down would require price to break
down through 1.3611 followed by 1.3507. Once 1.3507 is broken, 1.3335
is the embattled go of equality which would be a smallest target. If
we are indeed beginning a wave 3 down, then price will very promptly
come back to the previous low of 1.2859. To summarize, we are prepared
to sell rallies to 1.3863 or look for a break of 1.3507 to sell. We
use Elliott Wave to get a roadmap of what's to follow, but EW is
simply a science of patterns which repeat fractally in every time
frame. Once a trader understands the patterns, one can trade any time
frame for profits! Sometimes when the road is muddy in the larger
scenario, and there are multiple paths to take, it makes sense to
drill down to a lower time frame to make day trading profits and call
it a day!

Source: Fxstreet.com

EUR/USD Bounces Off its Recent 2-Week Lows on ECB Council Member Mersch's Comments

2011-02-09T02:05:00.000-08:00

Last week we saw the EUR/USD stumble following the ECB interest rate
choice, proclamation, and press conference with ECB President Trichet
in which he disappointed market expectations and was less hawkish than
anticipated.

For the most part, the proclamation saw inflation risks balanced, but
that the ECB would be watching for any following-round effects and
would act if necessary. These comments were echoed yesterday by ECB
governing council member (and the President of Luxembourg's Central
Bank) Yves Mersch though the headline that stuck out was his call for
hiking rates to control "following-round effects."

From Bloomberg: ECB Will Act on Following-Round Effects, Mersch Says

"At the beginning of March you'll have our first forecast in 2011
and if it's right that what we see at the moment is only a temporary
increase with a retreat at the end of the year below 2 percent,
there's no danger," Mersch said in Luxembourg late yesterday. "But,
there would have to be a rigorous intervention by the monetary
authorities if across the following- round effects there's the risk
that this increase transforms into a plateau."

ECB President Jean-Claude Trichet last week signaled no pressing
plans to bring to somebody's attention interest rates even though the
bank expects inflation to stay above its 2 percent limit for longer
than it predicted just three weeks earlier. Annual price gains in the
euro area have accelerated to 2.4 percent, the fastest in more than
two years and the central bank will publish new economic and inflation
forecasts at its next policy background meeting next month."

While raising rates in it of itself will not stem the major cause of
recent inflation which is mainly being driven by external factors like
oil and other commodity prices, it would show that the ECB is
committed to price stability and could reduce the demands for higher
wages by workers.

Some other fascinating bits from Mersch's comments was that he says
the ECB should bring to somebody's attention rates even before exiting
other measures undertaken by the ECB like unlimited lending to banks
and buying of periphery sovereign debt.

Can Mersch's comments re-ignite the EUR/USD buying we had seen prior
to the ECB choice or did it just help the pair right its earlier 4
session slide?

I don't believe this changes the underlying dynamics too much and the
forecast for a rate hike by the ECB is still for the autumn of 2011.
That is still closer than when the Fed is likely to go and so the
expectations around interest rate differentials continues to benefit
the EUR in the standard term.

With not too much on the essential docket - except for the rate hike
by Plates overnight - the EUR was higher on stronger equities in the
previous US session that carried over to Asia. European stocks were
flat for the most part and we started to see a go towards USD yet
again at the start of today's NY session. If we have a shift towards
risk aversion due to the Plates news, then the EUR/USD has the
opportunity to retest its lows just above 1.35 in the small term.

Source: ActionForex.Com

EUR/USD had a volatile time again last week

2011-02-06T22:02:00.001-08:00

!! Last Week Recap !!

*EUR/USD* had a volatile time again this week with the rate rising
sharply ahead of schedule on, only to give back its gains later in the
week. The week started with the Euro trading higher after EZ CPI Flash
Estimate came out at +2.4% year on year, versus a previous reading of
+2.2%. Also, German Retail Sales declined by -0.3% month on month,
which was significantly lower than the increase of +1.9% expected.
Nevertheless, the previous number was revised upward from -2.4% to
-1.9% which neutralized its effect somewhat. In U.S. numbers on
Monday, Personal Spending increased by +0.7% month on month, edging
the consensus of a +0.6% increase, and Chicago PMI, which came out at
68.8, beating the consensus of a 65.5 print. On Tuesday, EUR/USD
continued on the upside after news that the German Unemployment Change
declined by -13K versus an expected fall of -11K, and the Eurozone
Unemployment Rate, which held steady at 10.0%. In U.S. releases, ISM
Manufacturing PMI came out at 60.8, which was significantly higher
than the 57.8 expected while ISM Manufacturing Prices also rose
substantially to 81.5 that was considerably higher than the 73.6
expected. Wednesday saw EUR/USD make its weekly high of 1.3861 before
promotion off on news that S&P had cut Ireland's credit rating to A
from A- with a warning of a further downgrade. Also weighing on the
Euro was ADP Non-Farm Payrolls showing an increase of +187K, which was
notably higher than the +148K expected. Nevertheless, the previous
number was significantly revised downward from +297K to +247K. On
Thursday, EUR/USD started a steep decline after EZ Retail Sales came
out at a disappointing -0.6% versus an expected increase of +0.6%.
Adding to the decline was the ECB keeping its benchmark Smallest Bid
Rate at 1.0% as widely expected. The disappointment came from the post
announcement remarks by ECB President Trichet referring to recent
inflationary developments in the Eurozone, "These developments have
not so far unnatural our assessment that price developments will
remain in line with price stability over the policy-significant
horizon." Also adding to the Euro's woes were U.S. Early Jobless
Claims, decreasing to 415K versus 420K that was expected; and U.S. ISM
Non-Manufacturing PMI that came out at 59.4, versus an expected print
of 57.2. On Friday, EUR/USD continued its slide, making its weekly low
of 1.3543 ahead of U.S. Non-Farm Payrolls which came out at a
disappointing +36K, considerably lower than the +138K that was
expected with the previous number revised significantly higher from
+103K to +121K, which dampened the effect. Also supporting the
Greenback was the U.S. Unemployment Rate, which dropped to 9.0% versus
9.5% that was expected. EUR/USD then rallied on small covering to
close at 1.3586 a decline of only -0.2% from its previous weekly
close. Over the weekend, at the EU Economic Summit in Brussels,
Germany led a proposal backed by France to stimulate more challenged
Eurozone economies.

*USD/JPY* started the week trading lower, only to rally sharply by the
end of the week. The rate started the week on a soft note on Monday,
despite news that Japanese Preliminary Industrial Production rose
+3.1% month on month, versus a consensus of a +2.9% rise. Also,
Japanese Housing Starts increased by +7.5% year on year that was
considerably higher than the expected increase of +4.8%. On Tuesday,
USD/JPY dropped sharply despite positive U.S. ISM Manufacturing PMI
and the Japanese Monetary Base, which declined to 5.5% year on year
from a previous reading of 7.0% with the consensus expecting 7.6%. On
Wednesday, USD/JPY reversed and started trading higher after the U.S.
ADP Non Farm Employment Change showed an increase of +187K, versus
+148K that was expected. Thursday saw the Greenback continue to
strengthen after positive U.S. Early Jobless Claims and ISM
Non-Manufacturing PMI. On Friday, USD/JPY made both its weekly high of
82.46, and weekly low of 81.09 after the Non-Farm Payrolls number
showed the U.S. economy had added only 36K jobs in December and the
U.S. Unemployment Rate, which dropped to 9.0% from 9.4%. USD/JPY then
consolidated to close at 82.12, a drop of only 6 pips on the week and
ending the week virtually unchanged.

*GBP/USD* traded sharply higher last week after a series of positive
economic releases. Cable started the week on a strong note trading
higher off of its weekly low of 1.5819 seen on Monday. The rate rose
substantially despite positive U.S. numbers and in the absence of any
significant economic releases in the U.K. On Tuesday, GBP/USD
continued sharply higher after news that the U.K. Manufacturing PMI
came out at 62.0, a confirmation high and considerably higher than the
consensus of 58.0. Also on Tuesday, U.K. Nationwide HPI dropped -0.1%
month on month, versus an expected decline of -0.3%. Cable continued
rallying on Wednesday after U.K. Construction PMI came in at 53.7,
that was considerably better than the consensus of a 49.8 print. On
Thursday, GBP/USD made its weekly high of 1.6276 after U.K. Air force
PMI came out at 54.5, substantially higher than the consensus of 51.2.
The rate then came off as positive U.S. numbers were released later in
the day. On Friday, Sterling continued promotion off despite the U.K.
Hallifax HPI increasing by +0.8%, versus -0.2% expected, and after
news the U.S. Unemployment Rate dropped to 9.0% from 9.4%. GBP/USD
then went on to close at 1.6096, an overall gain of +1.5% for the
week.

*AUD/USD* rose sharply last week after a slew of positive economic
data out of Australia. The week started on a strong note with the rate
trading higher after making its weekly low of 0.9864 seen on Monday.
In economic releases, the Australian MI Inflation Gauge increased by
+0.4% month on month, versus a previous reading of +0.2%, and Aussie
Private Sector Credit increasing by +0.2%, just slightly lower than
the 0.3% that was expected. AUD/USD continued its steep ascent on
Tuesday after Australian HPI increased by +0.7% quarter on quarter,
significantly higher than the flat reading expected. Also, the RBA
left its benchmark Cash Rate unchanged at 4.75% as widely expected.
After the rate announcement, Glenn Stevens made hawkish comments
stating that rebuilding the hurt in Queensland was "unlikely to have
a major impact on inflation" sending the rate even higher. On
Wednesday, AUD/USD consolidated after positive employment data out of
the United States and Australian HIA New Home Sales declining by -0.6%
versus a previous reading of -0.2%. On Thursday, the Aussie resumed
rallying after Australian Building Approvals increased by +8.7%,
notably higher than the +1.6% expected, with the previous number
upwardly revised to -3.9% from -4.2%. Friday saw AUD/USD make its
weekly high of 1.0199 after the RBA released its Monetary Policy
Meeting Minutes for January. In the minutes, the RBA increased its
estimates for Australian GDP growth from +3.75% to +4.25%. AUD/USD
then went on to sell off on profit taking to close at 1.0139, showing
an overall gain of +1.6% from its previous weekly close.

*USD/CAD* lost considerable impose a curfew last week despite positive
U.S. economic numbers. The rate started the week on a soft note,
trading lower off of its weekly high of 1.0056 after news that
Canadian GDP rose by +0.4% month on month, versus an increase of +0.2%
that was expected. Also out on Monday was Canadian RMPI that increased
by +4.2% month on month, that was considerably better than the
increase of +3.3% expected, and Canadian IPPI rising +0.7% month on
month edging the consensus of a 0.6% increase. On Tuesday, the rate
dropped sharply despite positive U.S. ISM Manufacturing PMI and ISM
Manufacturing Price data. The decline continued into Wednesday despite
positive U.S. employment data. On Thursday, the rate reversed and
traded higher after positive U.S. economic data. Friday saw USD/CAD
make its weekly low of 0.9830 after news that Canadian Employment
Change showed the Canadian economy had added +69.2K jobs in December,
significantly higher than the consensus of an increase of +18.9K.
Nevertheless, the Canadian Unemployment Rate increased to 7.8% versus
the consensus which expected the rate to remain at 7.6%. USD/CAD then
rallied on small covering to close the week at 0.9881, showing an
overall decline of 1.3%.

*NZD/USD* lost some impose a curfew last week after trading to new
intermediate term highs ahead of schedule in the week. The rate
started the week on a positive note despite the New Zealand Trade
Weigh showing a shortage of -250M that was considerably of poorer
quality than the -15M expected, and New Zealand Building Consents
which declined by -18.6% month on month, versus a previous increase of
+7.8% revised down from +8.8%. On Tuesday, NZD/USD continued higher
after the New Zealand Labor Cost Index increased by +0.6% quarter on
quarter, edging the consensus of a +0.5% increase. Also on Tuesday,
ANZ Commodity Prices increased by +3.8% versus a previous reading of
+2.0%. Wednesday saw NZD/USD make its weekly high of 0.7823 as the
price of gold climbed over the $1,350 level. The rate then headed
south after New Zealand Employment Change declined by -0.5% versus an
expected increase of +0.2%, and the New Zealand Unemployment Rate,
which jumped to 6.8% from 6.5%. On Thursday, the rate consolidated as
the U.S. released positive economic data. Friday saw the rate continue
its decline with NZD/USD making its weekly low of 0.7665, the rate
then rallied somewhat on spot squaring to close at 0.7684, showing an
overall decline of 0.4% from its previous weekly close.

!! The Week Ahead !!

*USD:* This week's U.S. economic calendar calms down considerably
compared with last week, and it will feature the U.S. Trade Weigh due
out on Friday. Monday starts the week out with the release of Consumer
Credit (2.2B m/m), while Tuesday has the IBD/TIPP Economic Optimism
survey (52.8) scheduled. On Wednesday, Fed Chairman Ben Bernanke will
testify before the House Budget Committee on the U.S. economic
outlook, monetary policy and fiscal policy in Washington D.C. and
Crude Oil Inventories (last 2.6M) is due out. Thursday offers the
vital Weekly Early Jobless Claims (411K), as well as Wholesale
Inventories (+0.7% m/m), Natural Gas Storage (last -189B) and the
Centralized Budget Weigh (-69.5B). Friday then features the
highlighted U.S. Trade Weigh (-40.4B), in addition to the Preliminary
University of Michigan Consumer Sentiment survey (74.6), Preliminary
University of Michigan Inflation Expectations (last +3.4%). Saturday
will end the week with a speech by FOMC Member Raskin in Park City.

*AUD:* The upcoming week's Australian economic calendar calms down
considerably compared with last week, but it will feature the closely
watched Australian Employment Report due out on Thursday. The week
starts on Monday with the release of the AIG Construction Index (last
43.8), ANZ Job Advertisements (+2.0% m/m) and Australian Retail Sales
(+0.5% m/m). Tuesday then offers the tentatively scheduled NAB
Quarterly Business Confidence survey (last 9), while Wednesday has
just the Westpac Consumer Sentiment survey (last -5.7%) due out.
Thursday features the highlighted Australian Employment Report that is
comprised of the Employment Change (+20.3K) and Unemployment Rate
(5.0%). Friday will then end the week with vital testimony by RBA
Governor Stevens in Canberra before the House of Representatives'
Standing Committee on Economics. Technically, AUD/USD broke out of its
consolidation sample to the upside last week, trading mostly higher
off a low of 0.9865 seen on Monday to a high of 1.0199 on Friday
before closing somewhat below that at 1.0139. In doing so, the rate
has broken back above the psychological parity level and the lower
support line of a key bullish standard term upward channel now drawn
at 1.0077, with another mildly rising standard term trend line
offering resistance to the rate at the 1.0274 level currently. In
addition, a shorter term rising wedge sample now seems to be forming
on the daily charts with an upper resistance line currently drawn at
1.0289 converging with a lower support line now at 0.9894.
Furthermore, last week's price action remained well above
AUD/USD's 200-day Moving Average, which now reads at 0.9350 and has
a positive slope that still indicates a bullish standard term outlook
for the pair. Furthermore, the rate's key 14-day RSI broke back
above the neutral line of the indicator and now reads in the upper
central part of neutral territory at 61 that could somewhat block
upside price action over the coming week. Early resistance for the
rate is seen at 1.0182, at 1.0199, and then above that at 1.0255.
Support for AUD/USD is indicated initially in the 1.0004/76 region
around the psychological 1.0000 parity level, and then below that in
the 0.9803/96 region, at 0.9752, 0.9622 and 0.9536.

*NZD:* The forthcoming New Zealand economic calendar calms down to
nearly nothing, and only has the FPI (last -0.8% m/m) due out on
Friday. Technically, last week's sessions saw NZD/USD trade
initially higher to its weekly peak of 0.7823 seen on Wednesday but
then come off to a weekly low of 0.7665 on Friday before closing the
week at 0.7685. Last week's price action in NZD/USD furthered its
recent upward movement and still remained above the key 61.8%
retracement level at 0.6944 of the down go from 0.8213 to the 0.4892
low of March 4th, 2009, thereby keeping the next major technical
target to the upside at the key 0.8213 high last seen on March 14th of
2008. Furthermore, the pair continues to sustain gains above the lower
support line of its slightly diverging standard term up channel that
is now drawn at the 0.7542 level, with its upper line now at 0.8494.
In addition, a longer term rising wedge sample appears on the charts
with an upper line now at 0.8067 and a lower line at 0.7481. A break
of the key lower lines of these rising patterns would be needed to
call into inquiry the rate's bullish outlook from a chart sample
perspective. Furthermore, NZD/USD continues to trade above its vital
200-day Moving Average that now comes in at 0.7323 and retains its
upward slope to yield a bullish standard term outlook for the pair.
Support for NZD/USD is now seen initially on the charts at 0.7665, and
then below that in the 0.7454/0.7575 congestion region that
encompasses the vital psychological 0.7500 level, and then in the
0.7342/85 region. Resistance shows up initially in the 0.7785/91
region and the 0.7812/72 region, and then above that at the vital
0.7973 and 0.8213 levels.

*GBP:* The U.K. economic calendar warms up a bit this coming week, and
it will feature the BOE's Rate Choice and MPC Proclamation due out
on Thursday. Monday has no notable data releases scheduled so the data
week starts on Tuesday with the featured release of the BRC Retail
Sales Monitor (last -0.3% y/y) and the RICS House Price Weigh (-38%).
Wednesday offers the BRC Shop Price Index (last 2.1% y/y) and the U.K.
Trade Weigh (-8.6B). Thursday then features the highlighted BOE Rate
Choice and associated MPC Rate Proclamation in which the central bank
is expected to leave its benchmark Official Bank rate and Asset Hold
Facility at 0.5% and 200B respectively. Thursday also has scheduled
the release of Manufacturing Production (+0.5% m/m), Industrial
Production (+0.5% m/m), and the tentatively scheduled NIESR GDP
Estimate (last +0.5%). Friday will end the week with PPI Input (+1.3%
m/m) and PPI Output (+0.4% m/m). Technically, GBP/USD traded sharply
higher ahead of schedule last week from a low of 1.5819 on Monday to a
weekly high of 1.6228 on Thursday before then coming off to close at
1.6096 on Friday. This price action succeeded in making a new recent
high and sustained a weekly close above the psychological 1.6000
level. Also, GBP/USD remained above its 200-day Moving Average that
now reads 1.5473, and the indicator's increasingly positive slope
yields a mildly bullish standard term outlook for GBP/USD.
Furthermore, last week's rally left the rate's 14-day RSI higher
within the upper part of neutral territory at 61 that may block upside
price action next week. Resistance to the topside for GBP/USD shows
initially at 1.6182, and then above that at 1.6228 and 1.6297. Support
for the pair is indicated initially in the 1.6035/58 region just ahead
of psychological support at 1.6000, and then below that at 1.5909,
1.5750 and 1.5663.

*EUR:* The upcoming Eurozone economic calendar is again reasonably
active this week, and it will feature the release of the ECB's
Monthly Bulletin on Thursday. Monday starts the data week out with the
release of Sentix Investor Confidence (14.1), German Factory Orders
(-1.4% m/m), a speech by Buba President Weber in Tallinn, and
tentatively scheduled testimony by ECB President Trichet before the
European Parliament in Brussels. Tuesday then offers the French
Government Budget Weigh (last -140.7B), the French Trade Weigh (-4.1B)
and German Industrial Production (+0.2% m/m). Wednesday has just the
German Trade Weigh (+11.8B), while Thursday features the release of
the highlighted ECB Monthly Bulletin, in addition to French Industrial
Production (-0.3% m/m), Italian Industrial Production (+0.4% m/m), and
another speech by Buba President Weber, this time in Vienna. Friday
then ends the week with German Final CPI (-0.5% m/m), German WPI
(+0.9% m/m), French Preliminary Non-Farm Payrolls (+0.2% q/q), and a
speech by ECB President Trichet in Bremen. Technically, EUR/USD rose
to a mid week high of 1.3861 last Wednesday before then giving back
its gains to hit Friday's 1.3543 low and closing the week at 1.3586.
In doing so, the rate made another fresh recent high and also
sustained gains and its weekly close above the vital 1.3500
psychological level. EUR/USD also closed the week notably above its
key 200-day Moving Average's present level of 1.3085, and when
combined with the indicator's slight positive slope, this maintains
the mildly bullish standard term outlook for the pair. Nevertheless,
although the rate's 14-day RSI flirted with overbought territory
ahead of schedule last week, that indicator then corrected to end the
week back in neutral territory at the 54 level that should not block
future price action significantly in either direction during the
coming week. Support for EUR/USD shows initially in the 1.3523/60
region, and then below that in the vital 1.3420/98 region, at 1.3395
and at 1.3314 ahead of key psychological support seen around the
1.3000 level. Resistance to the topside is seen initially at 1.3636,
and then above that at 1.3757 within the 1.3697/1.3775 congestion
region, at 1.3861 and at 1.4043.

*JPY:* The Japanese economic calendar warms up significantly this
coming week, and it will feature Japanese Core Machinery Orders due
out on Thursday. Monday will start the week off with a speech by BOJ
Governor Shirakawa in Tokyo, in addition to Leading Indicators
(101.5%). Tuesday then offers Bank Lending (-1.9% y/y), the Japanese
Current Account (+1.55T), M2 Money Stock (+2.3% y/y) and the Economy
Watchers Sentiment survey (45.6). Wednesday has scheduled Household
Confidence (40.5), Preliminary Machine Tool Orders (last 64% y/y),
while Thursday features the highlighted Core Machinery Orders (+5.2%
m/m), in addition to the CGPI (+1.4% y/y). That will end the week
since Japanese markets will close in Friday in observance of the
National Foundation Day bank holiday. Technically, last week saw
USD/JPY trade initially lower to 81.30 on Tuesday before closing above
that at 82.18 after a volatile Friday session saw first the weekly low
of 81.10 trade and then the weekly high of 82.46. Last week's price
action saw the rate again test and even briefly exceed the upper of
its declining standard term channel trend lines that is currently
drawn at the 82.35 level. A sustained break above this key line could
see USD/JPY trade sharply higher. Furthermore, if the 84.51 level is
bested during the coming weeks, then Fibonacci projection targets of
the early corrective wave upward from the major 80.24 low up to the
more recent 84.51 high of December 15th come in at 1:1=85.18, 1:1.236
= 86.19, 1:1.5 = 87.32 and 1:1.618 = 87.82. Nevertheless, the rate
continues to trade significantly below its 200-day Moving Average that
is now at 85.48, and the slope of that key indicator continues to be
quite negative, thereby still yielding a bearish standard term outlook
for the pair. Resistance for USD/JPY currently shows up initially at
82.46 ahead of the 83.37/67 congestion region, and then above that in
the 84.34/51 region and at 85.38. Early support for the rate is seen
in the 81.66/81.97 region, then below that at 81.10, at 80.91, and in
the 80.24/52 region just above key psychological support at the 80.00
level.

*CAD:* The Canadian economic calendar coming up this week is about as
active as the prior week, and it will feature the Canadian Trade Weigh
due out on Friday. The week starts on Monday with the release of vital
Canadian Building Permits data (+2.9% m/m). Tuesday then has the
closely watched Housing Starts data (171K), while Wednesday is silent.
On Thursday, the NHPI (+0.6% m/m) is due out, along with a speech by
Governing Council Member Murray in Regina. Friday then concludes the
week with the highlighted Canadian Trade Weigh data (-0.4B).
Technically, USD/CAD came off of its Monday high of 1.0057 last week
to hit its weekly and new long term low of 0.9830 on Friday before
closing the week a bit above that at 0.9882 after a volatile Friday
trading session. The rate managed to close the week below its key
psychological parity level of 1.0000, and its price action has
generally stayed below the centre point of a gradually downwards
trending channel bounded by an upper line now drawn at 1.0371 and a
lower line that now provides support at 0.9811. Nevertheless, a
descending wedge also seems to be forming within that channel that
indicates significant upside potential for the rate if the wedge
sample's declining upper line now at 1.0037 is exceeded. The rate
also stayed well below its 200-day Moving Average last week that is
now at 1.0247 and is still slightly diminishing, which suggests a
mildly bearish standard term outlook for the rate. The chart for
USD/CAD shows early resistance at 0.9951, and then above that within
the 0.9974/1.0057 congestion region around the key psychological
1.0000 level. Additional resistance appears in the 1.0145/76 region
and at 1.0208. Early support for the rate shows up in the major
0.9835/59 support region, and then below that at 0.9818, in the
0.9709/55 region and at 0.9056.

Weekly Economic and Financial Commentary

2011-02-05T23:37:00.001-08:00

!! About the Author !!

*Wells Fargo Securities*

Wells Fargo Securities Economics Group publications are bent by Wells
Fargo Securities, LLC, a U.S broker-dealer registered with the U.S.
Securities and Exchange Commission, the Financial Industry Regulatory
Power, and the Securities Investor Protection Corp. Wells Fargo
Securities, LLC, distributes these publications directly and through
subsidiaries counting, but not limited to, Wells Fargo & Company,
Wells Fargo Bank N.A, Wells Fargo Advisors, LLC, and Wells Fargo
Securities International Limited. The information and opinions herein
are for general information use only. Wells Fargo Securities, LLC does
not guarantee their accuracy or completeness, nor does Wells Fargo
Securities, LLC assume any liability for any loss that may result from
the reliance by any person upon any such information or opinions. Such
information and opinions are subject to change without notice, are for
general information only and are not intended as an offer or
solicitation with respect to the hold or sales of any security or as
personalized investment advice. Wells Fargo Securities, LLC is a
separate legal being and distinct from affiliated banks and is a
wholly owned subsidiary of Wells Fargo & Company © 2010 Wells Fargo
Securities, LLC.

Source: ActionForex.Com

The Trading Week: Feb. 7 - Feb. 11

2011-02-05T17:27:00.002-08:00

Feb.
4, 2011
(Allthingsforex.com)
–
Following a
couple of busy
trading weeks
for the euro
and the U.S.
dollar, the
lighter on
economic data
week ahead will
shift currency
traders'
focus to the
pound sterling
ahead of the
Bank of England
interest rate
announcement,
coupled with
industrial
production and
wholesale
inflation
reports from
the U.K.

In
preparation for
the new trading
week, here is
the outlook for
the Top 10
spotlight
economic events
that will move
the markets
around the
globe.

1. AUD-
Australia
Retail
Sales,
an important
gauge of
consumer
spending
measuring sales
at retail
establishments,
Sun., Feb. 6,
7:30 pm,
ET.

Despite
of the floods,
consumer
spending in
Australia is
expected to
register
another month
of increase,
with retail
sales rising by
0.5% m/m from
0.3% in the
previous month.

2. EUR-
Germany
Industrial
Production,
the main gauge
of industrial
activity
measuring the
output of
factories,
mines and
utilities,
Tues., Feb. 8,
6:00 am,
ET.

After
the 0.7% m/m
drop in
November,
industrial
activity in the
Euro-zone's
largest economy
is forecast to
rise by 0.1%
m/m in
December.

3. USD-
U.S. Federal
Reserve
Chairman
Testimony
for the House
Budget
Committee on
economic
conditions and
monetary
policy, Wed.,
Feb. 9, 10:00
am, ET.

Chairman Ben
Bernanke's
testimony is
expected to
echo the
statement
issued at the
latest FOMC
monetary policy
meeting,
highlighting
the reasons
behind the
Fed's
decision to
stay the course
and continue
its
ultra-accommodative
monetary policy
of near 0%
interest rates,
coupled with
the $600
billion
quantitative
easing program
of Treasury
bond purchases.

4. AUD-
Australia
Employment
Situation and
Unemployment
Rate,
the main gauges
of employment
trends and
labor market
conditions,
Wed., Feb. 9,
7:30 pm, ET.

Recovery and
rebuilding
efforts
following the
floods in
Queensland
could boost job
creation
"down
under" as
the Australian
economy adds up
to 20.3K jobs,
compared with
only 2.3K new
jobs created in
the previous
month. The
unemployment
rate is
forecast to
remain low at
5.0%.

5. CHF-
Swiss CPI-
Consumer Price
Index,
the main
measure of
inflation
preferred by
the Swiss
National Bank,
Thurs., Feb.
10, 3:15 am,
ET.

The inflation
reports in the
weeks and
months ahead
could become
significant
risk events for
the Swiss
franc's
multi-year
bullish trend
against the
U.S. dollar and
the euro,
especially if
the Swiss
National Bank
warns that the
threat of
deflation once
again looms
over the
economy. The
Swiss inflation
gauge is
forecast to
drop with a
reading of
-0.1% m/m in
January,
bringing the
annual rate of
inflation to
0.4% y/y from
0.5% y/y in
December.

6. GBP-
U.K. Industrial
Production and
Manufacturing
Output,
the main gauges
of industrial
activity
measuring the
output of
factories,
mines and
utilities,
Thurs., Feb.
10, 4:30 am,
ET.

The
U.K.
manufacturing
activity is
expected to
pick up the
pace by 0.5%
m/m in December
compared with
0.4% in the
previous month,
in spite of the
unexpected GDP
contraction in
the fourth
quarter of
2010.

7. GBP-
Bank of England
Interest Rate
Announcement,
Thurs., Feb.
10, 7:00 am,
ET.

Although the
Bank of England
is likely to
maintain the
current record
low benchmark
interest rate
at 0.5%, two
monetary policy
makers voted
for a rate hike
at the previous
meeting and a
third Monetary
Policy
Committee
member has
joined the
hawkish camp
with a
statement
issued last
week. The
market has been
pricing
aggressively Q3
rate hike
expectations
and if the Bank
of England
confirms that
view, the GBP
could remain
comfortably
above the $1.60
mark.

8. USD-
U.S. Jobless
Claims,
an important
gauge of
employment
trends and
labor market
conditions,
Thurs., Feb.
10, 8:30 am,
ET.

To indicate a
significant
decline in
unemployment,
economists
estimate that
jobless
applications
would need to
fall to 375K or
below. In
recent weeks
applications
for
unemployment
benefits have
unexpectedly
spiked higher
to 454K, but
could resume
their pull back
to the 400K
level with a
reading of 411K
from 415K in
the previous
week.

9. GBP-
U.K. PPI-
Producer Price
Index,
a measure of
factory-gate
inflation on a
wholesale level
and a leading
indicator of
consumer
inflation,
Fri., Feb. 11,
4:30 am, ET.

Wholesale
inflationary
pressures in
the U.K. are
expected to
subside in
December as
input price
inflation
registers a
smaller 1.3%
increase from
3.4% in
November, and
output prices
forecast to
rise by 0.4%
m/m compared
with the 0.5%
increase in the
previous
month.

10. USD-
U.S. Consumer
Sentiment,
the University
of Michigan's
monthly survey
of 500
households on
their financial
conditions and
outlook of the
economy, Fri.,
Feb. 11, 9:55
am, ET.

The
trend of
improvement in
the U.S.
consumer
sentiment is
forecast to
continue with a
preliminary
estimate of
74.6 in
February,
slightly higher
than the 74.4
reading in the
previous
month.

Source: Fxstreet.com

The Weekly Bottom Line

2011-02-05T17:27:00.001-08:00

!! About The Author !!

*TD Bank Financial Group*

Source: ActionForex.Com

Resistance at Important Fibonacci Retracement

2011-02-05T10:07:00.004-08:00

!! Gold (XAU/USD) !!

- Gold bulls have been in control the last 2 weeks, bringing gold from
1309 to 1359.

- This completes an abc correction with equality waves in a and c.
This is also right under the 61.8% retracement level.

- Here, the latest (12:00PMET) 4H candle shows strong rejection from
attempting to break above 1360. If the market breaks below 1340, we
are likely vacant to test 1323. If the market breaks below 1323, we
are heading back to 1309.

- Below this 1309 support, we have the 50% retracement level in sight
as seen in the daily chart, which is the 1295 level.

!! Silver (XAG/USD) !!

- Silver is in a very similar circumstances to gold's. It has
retraced just under 61.8% as the market tested 29.30.

- The bearish outlook needs to see the market break below 27.60. A
break below 28.00 might suffice as an ahead of schedule signal if the
market shows very large bearish candles. The target on the downside is
first 26.50 area. If the market then breaks below 126.40, the 125.00
level is in sight.

Source: Fxstreet.com

Forex Strategy Outlook: US Dollar Weakness Favors Trend Trading

2011-02-05T10:07:00.003-08:00

Market Conditions Synopsis

Continued declines in forex options market volatility expectations
suggest that major currencies could stick to relatively tight trading
ranges in the week ahead.

The past week of unpredictable and quick-shifting price action made
for a mixed week of performance from our DailyFX+ trading signals and
benchmark trading systems alike. Breakout and Momentum systems
generally benefited from noteworthy US Dollar weakness, and a
continued downtrend would likely favor Momentum systems vacant
forward. Outlook for Breakout strategies is more nuanced; while said
systems would likely pick up gains on continued USD weakness, they
tend to underperform through times of lower market volatility. We will
reluctantly go Breakout systems to "Underweight" and handle them
with a sense of skepticism amidst low volatility expectations..

Forex Trading Automated Systems Outlook

DailyFX+ System Trading Signals – None of our six trading strategies
had a particularly notable week of gains or losses, and overall
performance was exactly average on shifting market conditions.
Continued US Dollar weakness would nonetheless favor Momentum2, which
remains heavily net-small the USD amidst a noteworthy shift in
small-term sentiment. Momentum1 is a trickier proposition given that
said system tends to do well amidst the longer-term trends and is
liable to get chopped out on sudden shifts. Given low volatility
expectations, extended trends seem somewhat less likely. Said
conditions similarly favor Range2 trades in the days ahead. We will
handle Breakout2 trades with a certain degree of skepticism on low
market volatility.

To gain a superior understanding of all six trading systems, view my
recent presentation on SSI and the trading signals on our FXCM Digital
Expo page.

Benchmark Trading Systems

Data and Backtest Results Generated using FXCM Strategy Trader

Benchmark Range, Trend, and Breakout strategies saw quite mixed
performance through the past seven days, and unclear forecasts make it
admittedly hard to favor any one strategy for the week ahead.

DailyFX Individual Currency Pair Conditions Synopsis

Written by David Rodríguez, Quantitative Strategist for DailyFX.com,
drodriguez@dailyfx.com

To be added to this author's distribution list, send an e-mail
subject line "Distribution list" to drodriguez@dailyfx.com

Definitions

Range High – 90-day closing high.

Range Low – 90-day closing low.

Last – Current market price.

Source: Dailyfx.com

Weekly Focus: Strong Figures Support Growth Outlook

2011-02-05T10:07:00.001-08:00

*Market movers ahead*

There are no vital market movers scheduled for the week to come.

ECB President Jean-Claude Trichet speaks in Bremen on Friday. We
expect Trichet (again) will call for a strengthened EU-coordination to
place further difficulty on European leaders.

Also Friday, troubled Spanish GDP figures for Q4 are released. We
project a slight increase of 0.2% q/q.

In Norway CPI figures for January are released on Thursday.

*Global update*

Both the US ISM and the European PMIs signal a very strong start to
2011 while the Chinese PMIs were more mixed.

ECB and FED rhetoric signals that hikes are still far away. At the ECB
governing council meeting Jean-Claude Trichet was slightly more dovish
in his rhetoric.

Despite strong US figures Fed chairman Ben Bernanke focuses on high
unemployment, so we continue to look for the first hike around
mid-2012.

*Focus*

The ECB turns market focus to inflation and the Fed to deflation.
Especially after the recent movement in EUR/USD, standard- to
long-term upside for the currency pair remains.

*Full Report in PDF*

Source: ActionForex.Com

Will U.S. Nonfarm Payrolls Top Expectations And Place Additional Pressure on the EURUSD?

2011-02-04T00:43:00.001-08:00

Talking Points

* ADP Employment Jumps 187K in January

* ISM Manufacturing Pushes Higher in January

* Unemployment Rate Expected to Rise to 9.5 Percent

* Consumer Confidence Climbs to a Seven Month high

Following the ECB rate decision which fueled a selloff in the euro,
currency traders will shift their focus to the highly anticipated U.S.
nonfarm payrolls report for potential confirmation of a EURUSD
turnaround. Economists are expecting payrolls in the world's largest
economy to climb to 145K in January after rising 103K the month prior.
Heading into the report, market bias is dollar positive, and a better
than expected report could add momentum to the dollar rally.

Taking a look at December's report, payrolls rose 103K amid
expectations of 150K, while private payrolls increased 113K. At the
same time, the unemployment rate fell to 9.4 percent as the labor
force participation rate scaled back. The breakdown of the release
showed that average hourly earnings climbed 0.1 percent, while the
unemployment to population ratio was unchanged at 58.3 percent. For
this month's report, weather might have dragged down employment as
severe weather conditions weighed on areas such as construction.
However, I do not rule out an employment print of 140K or greater as
the private sector gradually gains momentum.

Ahead of the release, ISM non-manufacturing composite rose to 59.4,
marking its highest level since August 2005, with the employment
component climbing to its highest level in over 7 months. Not to
overlook, the Monster.com employment will be released tomorrow. The
report is of great importance because the index measures overall
employee demand from online recruitment activity, reviewing more than
1500 websites. In turn, an increase in the report may hint that hiring
is picking up. It is also worth noting that consumer confidence is at
a seven month high as households gain confidence that the economic
recovery is gathering strength. Conversely of market expectations, Ben
Bernanke held a press conference today and said that the unemployment
rate is unlikely to decline as fast as the fed likes, while noting
that growth is not fast enough for a significant turnaround in the
labor force. Furthermore, Mr. Bernanke added that he sees some "good
news" in the labor market, and expects more. Indeed, the comments by
the central back head were fairly mixed; however, the payrolls release
will add color to the blurry picture.

For the past two months, the employment report failed to meet
expectations, with the result leading the dollar to push lower against
its major counterparts. The selloff was largely due to increased
expectations that payrolls would post a remarkable gain following the
impressive ADP employment release which showed a surprising 247K
print.The release failed to live up to market expectations, and as a
result, currency traders punished the greenback. In January, ADP
employment climbed to 187K. Though the reading bodes well for
tomorrow's nonfarm payrolls release, traders should not rule out
another dismal release as the economic outlook for the U.S. remains
uncertain.

All in all, traders should trade carefully ahead of the release as the
dollar stands at the crossroads. Indeed, the release may add color to
the bleak economic picture and pave the way for a profitable trade
heading into next week's session.Indeed, the dollar has been gaining
momentum recently on the back of euro weakness, thus, a better than
expected report will push the buck higher. Conversely, a dismal NFP
figure may set the stage for a short dollar position as concerns
surrounding inflation and the labor force remains. Nonetheless,
gauging sentiment will be as important as the report itself.

Created by Michael Wright

Source: Bloomberg– Created by Michael Wright

The unemployment rate in the U.S. has fallen from a high of 9.9
percent in April to 9.4 percent in December, according to the U.S.
labor department. Economists are now expecting the jobless rate to
return to back to 9.5 percent in January. Maximizes

EURUSD 4 Hour Chart

Source: Intellicharts – Prepared by Michael Wright

EURUSD: The pair as recently pushed below its rising trend line that
was intact for a little less than a month. Indeed, the recent break
below 1.37 opens the door to the 1.3570 area. It is worth noting that
our speculative sentiment index now stands at -1.79 and is expected to
push lower as traders bet on a euro pull back. With daily studies
recovering from overbought territory, I do not rule out a further
losses in the EURUSD.

Written by Michael Wright, Currency Analyst

To Receive Future Articles by Email, please contact me at
mwright@fxcm.com

Michael Wright is the author of FX Headlines, Fundamentals vs.
Technical's, Intraday Trading, Weekly Spotlight, and Forex Trading
Weekly Forecast

Source: Dailyfx.com

forex weekly analysa

Guest Commentary: Weekly Outlook April 18 - 22

U.S. Initial Jobless Claims Fall in the Latest Week

Guest Commentary: Upcoming Week for the USD/CAD  March 27 2011

Commentary by Central Bank Policymakers Could Overshadow Data Next Week

G-7 Intervention, The Week in Review

The Trading Week: Mar. 21 - Mar. 25

Forex Strategy Outlook: Volatility Expectations Favor Breakout Trading

China Weekly: Labour Shortages Lead to Re-Think of One-Child Policy; PBOC Eases RRR For Well-Behaved Banks

The Yen is strong today

Oil Spike Hits Market....

Forex Strategy Outlook: Extended US Dollar Losses Favor Trend Trading

Forex Weekly Outlook - March 7-11

AUD/CAD – Elliott Wave Count in the 4H and Daily Charts

Trading Week Outlook: Mar. 7 - Mar. 11

Weekly Focus: Oops - They Did it Again

Trading Between The 20 and 50 Daily EMA's.....

The currency markets ended last week on a mixed tone

U.S. Initial Jobless Claims Fall More than Expected in Latest Week

EUR/USD – Awesome Oscillator Shows Divergence

Oil Versus S&P

China Weekly: Slower Growth is Latest Policy to Tackle Inflation

The Euro is in an interesting situation right now

If you can dream – and not make dreams your master

Forex Strategy Outlook: Volatility Favors Breakout Trading in Japanese Yen

US Open The Week Under Pressure, Dollar Strong

China Weekly: Concerns Mount Over Slowing Growth; PBOC Sends Mixed Signals on Yuan

Sterling starts near where it left off last week

Forex Weekly

US Dollar Likely to Stick to Ranges, Japanese Yen Pairs to see Breakouts

Rapidly Approaching Long-term Resistance.......

Gold higher but outshone by silver

The Trading Week: Feb. 21 - Feb. 25

The Weekly Bottom Line

Critical Week for Dollar, Pound as Key Data Releases to Give Insight on Inflation Debate

Weekly Economic and Financial Commentary

Currency Markets, Risk Appetite Threaten Trend-Defining Reversal Next Week

Weekly Focus: Strong Data Shrug off Middle East Tensions

China Weekly: Inflation Likely to Persist Through H1 2011 Despite Rate Hikes

Market Roars Back.....

Silver's Big Test

Roses are red, violets are blue, with inflation rising, what can we do?

Are Grains the Place to Invest in 2011?

Market Overbought Again On The Daily Index Charts....

USD gained against most currencies on Egypt's turmoil

China Weekly: Inflation Likely to Persist Through H1 2011 Despite Rate Hikes

Forex Weekly

EURUSD: bearish outlook expected to prevail

London Session: Risk-On As We Start The Week

The expectations gauge declined to 67.6 from 69.3

Forex Weekly Outlook - February 14-18

Markets End the Week in Risk-off Mode

Dollar Rampant ahead of Weekend on Egyptian Fears

Critical Week for Dollar, Pound as Key Data Releases to Give Insight on Inflation Debate

The Trading Week: Feb. 14 - Feb. 18

Currency Markets, Risk Appetite Threaten Trend-Defining Reversal Next Week

Markets began to fret over the potential bailout of Portugal

Weekly Focus: Growth and Inflation Data to Dominate in the Coming Week

Potential US Dollar Reversal Calls for Breakout and Trend Trading in Week Ahead

U.S. Initial Jobless Claims Fall More than Expected in Latest Week

51/2 Months Without a Pullback

China Weekly: Rate Hike Rhetoric Continues Apace; M&A Activity Surges in 2010

EUR/USD – Elliott Trumps

EUR/USD Bounces Off its Recent 2-Week Lows on ECB Council Member Mersch's Comments

EUR/USD had a volatile time again last week

Weekly Economic and Financial Commentary

The Trading Week: Feb. 7 - Feb. 11

The Weekly Bottom Line

Resistance at Important Fibonacci Retracement

Forex Strategy Outlook: US Dollar Weakness Favors Trend Trading

Weekly Focus: Strong Figures Support Growth Outlook

Will U.S. Nonfarm Payrolls Top Expectations And Place Additional Pressure on the EURUSD?

Guest Commentary: Upcoming Week for the USD/CAD March 27 2011