Canadian Interest Rate Decision, Bernanke Testimony & Australian CPI…all important today!

The Canadian rate decision will be out at 9am EST today. It shouldn’t be anything “earth shaking” with such low rates already. However, what could be…are any comments that they make. So have your ear atune to that.
Bernanke will testify at 10am EST today. Oh, he’s going to tell us how he’s going to be able to “reign in inflation” before it gets out of hand…and that’s his job to do so. However, I’ve never seen the U.S. Fed be “proactive” and “preemptive” yet.
They always “react”. So once again, they will be too late and inflation will get much higher than it should before they can get it under control. Nonetheless, if his “talk” is convincing, it could move the dollar today.
Then at 9:30pm EST tonight, you’ll want to pay attention to Australia’s CPI number. This will tell you a lot about the future direction of interest rates there, in my opinion. Also, their Assistant Governor of the RBA will speak at 10pm EST. So see if there’s anything “enlightening” that could move the Aussie dollar.
Lots to watch for today. Should be interesting. I’m still generally bullish on EUR/CHF and bullish (a buyer of) AUD/USD at this point.

Sean Hyman

Buy EUR/CHF in newly established uptrend with “blessing” of the Swiss central bank, while earning daily interest too!

By Sean Hyman | July 22, 2009

The best of all worlds…

Trade a pair that recently broke into a new uptrend. Trade it because the Swiss are intervening in their currency to weaken it and boost the EUR/CHF pair. Trade it to earn intereest daily with little downside likely.
Take your pick, on your reasoning…personally, I trade it for all three reasons. Click on the chart to enlarge it. You’ll see that the daily downtrend is broken by almost any measurement you can think of. It’s above its red downtrend line, above its 50 SMA, also above its 200 SMA (long term moving average).

Then check out the 4 hour, 40 day chart below. You can buy the breakouts of these red downward corrections and get in “in a timely fashion”. Click on the chart to enlarge it.

At the “Economic Turning Point”?

If we’re at the “economic turning point” as I believe we are…then that will be bad for the dollar, yen and Swiss franc but will be particularly good for those currencies that tend to be influenced by inflation, commodities and risk taking…which would be the Aussie dollar, New Zealand dollar, Canadian dollar and British pound…and arguably in that order.As an additional note, if this is true…then the natural course of “Swiss franc weakness” may kick in and help the Swiss central bank out with a weaker franc. They’ve been proactively “selling francs” but there may come a time (and we could be there now) that the market actually kicks in and “aids” their intervention efforts for a weaker franc to the euro in particular. If so, between their collective “franc selling” and the market’s turning point…it could bode well for those that are long (buyers of) EUR/CHF. The Swiss are attempting to put in a floor on the EUR/CHF pair around 1.50-1.51. So anytime it gets to around the 1.51 region, one could go long the pair with a wide stop and low number of lots and probably experience a good “upside to downside” risk ratio

I’ll also note that, so far, the Swiss have been able to reverse the daily downtrend on the EUR/CHF pair and have “held the line” quite well so far. You can look at it from most any aspect you wish and it still holds true. The pair is technically above its downtrend line, 50 SMA, 200 SMA, etc…all of which are bullish for the EUR/CHF pair. See the chart below. Click on it to enlarge it.

Want to learn more about fundamentals and technicals? Sign up for an inexpensive, only forex course today and we’ll show you how: http://www.mywealth.com/currency-trading.html

British Pound Soars on Better than Expected Jobless Claims Data!

By Sean Hyman | July 15, 2009
In recent months (since February, to be exact)…the unemployment claims for the U.K. economy have fallen quickly after February’s huge spike higher. There was an improved revision to the previous month’s data 30.8K and also a better number this time (23.8k) vs. 41.4K expected. The lower the number, the better…in the case of unemployment numbers.
You can see this visualized on the chart below. (Click on the chart to enlarge it). You’ll see that unemployment claims are headed in the right direction (south) and that’s good for their economy and the Pound!

Tags: blog, British, data, dollar, economy, forex, forextrading, GBP-USD, Hyman, lower, pound, Sean, Sean Hyman, time, U.K., unemployment

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Central Banker Bollard gives the “Green Light” to New Zealand’s Economic Recovery!

By Sean Hyman | July 14, 2009

Last night, New Zealand’s central banker stated that “early signs of a global recovery have emerged” and that “New Zealand looks likely to start recovering ahead of the pack”How’s that for an “economic green light”? Pretty good, huh…

More specifically, he stated that their economy will start growing in the final quarter of this year. He’s still likely to keep their interest rates low until late 2010 though (because the economy needs further stimulus).
Bollard also expressed his interest in a weaker NZD dollar, however, I’m not so sure he’s going to get that wish granted with a speech like last night’s speech.
Sentiment improves when economic growth resumes. On top of that, New Zealand still has the 2^nd highest interest rate of any industrialized nation, so the “carry traders” may still bid up his currency while at the same time selling the U.S. buck or yen!
A recent Westpac report expects that their economy will grow 2.6% next year (more than twice the pace it forecast in April). Again, another “big plus” for the carry traders that live the Kiwi dollar (NZD).
So far, the New Zealand dollar has gained a whopping 17% on the U.S. dollar in the past 6 months. With reports like this from Westpac and Bollard, that trend is more likely to continue than to abate!
So while Bollard calls recent gains in the New Zealand dollar “unhelpful”…he may find that it becomes even more “unhelpful” in the weeks/months to come!
As things get “booming” again, it looks like he could increase the minimum capital requirements of banks to reign in excessive lending by making them hold more money in reserves. So he will be able to pull in the reigns a bit when the time comes…but possibly not enough to deter more Kiwi buying!

By Sean Hyman | July 13, 2009

Whoa! What a difference a day makes. Overnight the news came out that Prime Minister Aso of Japan has called an election for August 30^th. The way the polls are going, I see that the Japanese are once again disgruntled with their Prime Minister.
I must say, they go through these guys like water! However, this election will likely end the Liberal Democratic Party’s near half-century rule.
Aso also plans to dissolve the lower house of parliament next week.
If a new party gets in power (and that appears to be almost guaranteed), then one thing they are shooting for is a diversification of Japan’s reserves. It appears everyone is jumping on the “dollar bashing” bandwagon lately.
Japan’s opposition party, that is leading in the polls, said that the nation should consider shifting its reserves away from the dollar and buy International Monetary Fund bonds.
The problem? They are the 2^nd largest holder of dollars and U.S. Treasuries outside of China (which has already announced plans to do what Japan is now suggesting too)!
So let’s see…China, Japan, Brazil, Russia and India have now all basically “signed on” to the “dollar dumping” party.
This will continue to hurt the sentiment for the dollar and weigh it down. China has over $2 trillion in dollar reserves now and Japan still has over $1 trillion in dollar reserves, so just between the two of them, we’re not talking about any small sum.
I don’t think I’d want to be on the opposing side of their “trade” either. Therefore, the dollar’s days/weeks/months ahead of it are looking more “grim” all the time.
Therefore, look for the U.S. Dollar Index to continue to plummet overall and for other foreign currencies to continue to rise up against it over time.
Sean Hyman
www.forextradingblog.com

Tags: blog, Brazil, China, currencies, demo, dollar, dow, forex, forextrading, fx, Hyman, index, India, Japan, lower, news, RSI, Sean, Sean Hyman, sentiment, ssi, time, trade, U.S.
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The Swiss confirm that they are intervening when the Franc strengthens!

By Sean Hyman | July 10, 2009

The Swiss are intervening in their currency when they notice the franc’s strength. This is likely to continue until their economy no longer suffers from the franc’s appreciation OR until global economic growth is solidly underway to where traders are “franc sellers” once again as they seek out higher yielding currencies at that point. Here’s the Bloomberg article that confirms the Swiss actions: http://www.bloomberg.com/apps/news?pid=20601083&sid=ad95AZDGUM9s So while many pairs are falling lately, the Swiss are attempting to put a floor under EUR/CHF in particular. If they are successful, then one could pick up some meager rollover interest daily with minimal downside risks when compared with other currency pairs out there.
Want to learn more about fundamentals and technicals? Sign up for an inexpensive, only forex course today and we’ll show you how: http://www.mywealth.com/currency-trading.html
Also, get a free, real time demo trading station here: http://www.fxedu.com/practice-forex-account
Sean Hyman
www.forextradingblog.com

Tags: account, article, blog, CHF, course, currencies, currency, currency pair, currency pairs, demo, demo trading, dow, economic, economy, EUR, forex, forextrading, franc, free, fundamental, fx, fxedu, Hyman, interest, mywealth, news, practice, real time, Sean, Sean Hyman, station, Swiss, technical, trade, trader, trading station

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Rumors of more Swiss Intervention in EUR/CHF. U.S. Weekly Unemployment Claims Improve!

By Sean Hyman | July 9, 2009
Rumors of Swiss (SNB) intervention catapulted EUR/CHF upward about 60 pips within minutes. Also, the U.S. Weekly Unemployment Claims was quite a bit lower than last time and lower than expectations. So that’s a great improvement. Unemployment Claims came in at 565k vs. 608k expected and 617k the previous month.

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