Forex rebates on every trade - win or lose!

cynic
So, your guru says 20700 - another 700 points to go.

Hmmmmmmmm, interesting.

mg

Overnight or tomorrow will likely prove me wrong. But...........I'm not sure this is ready to short yet. The last 4-5 days has seen it working off its 'over-boughtness' and is consolidating quite nicely without shedding too many pips. I find it hard to believe that having spent all this time reaching the magical figure it is going to drop back in a hurry. Additionally, I think it will have another go at 20150 and possibly beyond. After this pregnant paws, whatever it does next will likely be in a rush. If it does continue to dip slowly, my chart offers support at 19985 & 19950.

Anyone trading usa/cad?

Managed to get that sorted out eventually, phew.

Certainly been something of a day on Cable. Found support at 19950 and I must admit I didn't think it was going to get back through 20000 in a hurry, but then it generally proves me wrong!

The rising trend line offers support just above 20000 now and the previous support at 19950 is currently at 19965 and rising. MACD is turning up also on the 2hrly.

Dare I say it's beginning to look like a long again?

pth

I'm long. Usually bad news when I take a position :-)

Goforit

No, but I did a chart anyway :)

Oh he's on a roll ;)

AUD :)

Nicole Elliott, Mizuho Corporate Bank, on Cable:

"Continues to consolidate surprisingly neatly in a 'flag' formation. This should allow us to get used to trading with a $2 handle yet futures positions are well below December's record. The pound is no longer overbought and bullish momentum is strong. Attempt small longs at $2.0025 but be prepared to add to $1.9900; stop well below $1.9800. Short term target $2.0100 and $2.0500 medium term."

Took +34 from an overnight long before breakfast, now flat and will see what the day brings.

Don't know if anyone traded this today (Goforit?) but bounced in a smart fashion off the top of the channel :)

Err, I didn't!

Nice one SC. Was quite keen to open a long position at 20010, but I tend not to sleep very well when I'm in the market overnight.
Have managed +57 during the day, but unfortunately a mis-timed long that turned rather nasty for a while prevented me from risking additional funds; thankfully it worked out ok in the end :)

pth

pth - its a nice pair to trade on the pullback at the moment. I feel that in the last year or so I have become too fixated on cable. There are alot of things( including some indices)that are trending very well at the moment. Spent the last couple months(in between skiing etc) learning to use fibonacci on pullbacks, and applied to strongly trending fx or whatever its starting to work well for me! It has certainly added another way to trade and am starting to take aslightly longer timeframe to trade in. I think its called "planning the trade, then trading the plan" - for me it helps to take the emotion out of trading. I set my stoplosses, and put in my targets, and then get on with looking for the next trade rather than watching every tick of one trade.
USD/CAD( AUD) has trended well for over a month, big question is for how much longer. Sell the rallies and buy the drops!

I have been spending some time trying to find the best value online broker for Forex.

I have accounts with ETrade and IGMarkets at the moment.

ETrade hugs the actual market price but the spreads are wide, where as IGMarkets skew the price but the spreads are narrow.

This afternoon I had my two accounts and demo versions of FXCM and EFX Group running for a comparison.

FXCM seemed to hug the market but the spreads are somewhat wider than IGMarkets.

EFX Group came out the best. Following the market price on the majors like glue. Although they charge $5 per $100,000 traded the spreads on EURUSD GBPUSD were often zero and pairs like EURCHF USDCAD were often down to 1 pip and sometimes zero.

Will the live platform in practice give the zero spreads - I shall see !

Unless anybody knows better, until I can fund a Dukascopy Interbank account, it's the best I can find.

Cheers qwento - I'll take a look at EFX.


Which will crack first - the pound or the dollar?

By John Stepek, MoneyWeek
April 25 2007

The $2 pound is back. It took a while - in fact, the pound hasn't been at these dizzy heights in about 26 years, but at last we can snatch up all the 50p dollars we want, high-tail it to the States, and gorge ourselves on bargains.
But how long will it last for and why have we hit this level again after all this time? There is no easy answer to either of those questions but lets have a go at it anyway.

There are lots of reasons behind sterling breaching the $2 mark. Most obviously, inflation just took off in a very visible way in the UK (though of course, as regular readers know, it's been on the way up for a long time). Bank of England governor Mervyn Kings letter to the chancellor seems to have finally brought the Citys attention to the fact that inflation is a problem in this country, which means that the market now expects further interest rate rises.

Meanwhile, the housing market is still roaring away while economic growth figures have been strong enough to keep a smile on even Gordon Browns face.

Diverging interest rates
On the other hand, despite persistent inflationary fears in the US, the market generally still expects the next move to be a rate cut over there, particularly in light of the crumbling housing market. This may be wrong there are similar inflationary forces such as rising food prices and more costly energy bills in the US - but its expectation that counts in this case.

Currently, the base rate in both countries is 5.25%. However, rates in the UK look set to climb, while in the US they look set to fall. That means that carry traders (who borrow money in a low interest rate currency like Japanese yen, and make money by investing in a higher interest rate currency) are more interested in buying sterling where they can get a higher yield on their money, than dollars.

So it seems to make sense that sterling is rising so strongly against the dollar.

But of course, there's more to it than that. If you look at the UK and the US, they in fact have an awful lot in common with one another - and not much of it is good.

All sorts of debt
Consumer debt is a huge issue in both countries the US consumer seems to have cracked first, with overenthusiastic lending to bad credit risks eating away at the countrys housing market. But the UK consumer also looks very vulnerable a 1.3 trillion debt mountain is not what you want to be sitting on while interest rates are rising.

Not only that, but public borrowing on both the US and the UK is also huge. As Martin Hutchinson points out on Breakingviews, over time, the current account position should matter most. The current account basically measures how much money is coming into a country, and how much is going out. Just like a typical household, if a country runs at a deficit for too long, people start to worry about how it will make good on its debts, and stop buying its currency, driving the currency lower.

The US deficit racks up at about 6% of GDP. To put that into perspective, most economists reckon that at about 4% or so youre starting to get into banana republic territory. Meanwhile, the UK also has a significant deficit last year the current account deficit was 43.4 billion, the largest on record, and equal to 3.4% of GDP.

Foreign investment and financial services
What props America up is the willingness of foreigners to fund its massive deficit by buying dollars. Basically, countries like Japan and China buy lots of dollars to keep their own currencies weak, enabling American consumers to keep buying their exports. As for the UK, whats propping our deficit up is the global boom in financial services, which centres largely on London (much to the chagrin of its rivals in New York).

Neither of these situations can last forever. If US interest rates do head lower, and the dollar keeps weakening, foreigners will not want to keep buying dollars. That would send the US currency even lower.

But the same goes for the global financial boom. The merger and acquisition frenzy, the private equity boom, the hedge fund industry all have been propped up by low interest rates, which has driven a flow of cheap money looking for a home. With global interest rates rising, that flood of money could well dry up which is bad news for the financial services boom.

So in reality, both sterling and the dollar look vulnerable, and it's a tough call as to which will crack first.

Alternatives
But if that's the case, then where should you be investing your money? Well, at MoneyWeek, we're keen on Japan, where the economy looks like it should recover. By buying Japanese stocks, you can gain some exposure to the yen, which is historically low against the dollar at the moment. Alternatively, you could look at Germany - the euro is strong, but interest rates keep rising, and the Germany economy is recovering very well.

But currencies are volatile, and while we like both Japan and Germany's economic prospects, we wouldn't be betting on the money they print. If you're looking for a solid bet in a world of unstable paper money, you need to go back to a tried and tested currency that has lasted millennia without being destroyed by rampant inflation - gold.

Glittering gold
The yellow metal traditionally rises as the dollar weakens, and is also good at protecting your wealth from inflation. Many experts believe that everyone should have about 10% of their portfolio invested in gold, and there are many ways to gain exposure. One of the easiest (and more convenient than buying physical gold) is to invest via a financial instrument that tracks the price of gold Lyxor Gold Bullion Securities (GBS) is one such security listed on the London Stock Exchange.

This is the first time that I've been able to access the damn interweb thingie for a week, as the transition from Pipex to Sky has been a total nightmare. I've currently got just one laptop wired into my router in the hall as that seems to be the only telephone socket in the house which is capable of supporting broadband. Unfortunately, all of the PC's in the house are wired to my office about 30' away. Strange that the telephone socket in my office was capable of supporting Pipex broadband, but not Sky!!!

I now need to go to PC World to see if I can buy a man with a hammer, some cable clips and a length of cable.

I did read in the Torygraph that the Pound had hit $2. Is it true?

Nah Hilary, don't know where that info came from. It's well under $2 at the moment :-)

Re your broadband problems, in a nutshell I would guess the problem is where the telephone line comes into your house. The higher the broadband speed the better the wiring needs to be in your house. I'd say the best thing is to get the outside telephone line to come into the master socket in your office then run all the telephone extensions from there.

Not taking any new positions here as I don't feel the long position has as much going for it . Was thinking about a short from 2.0050 this am but knew I was going to be busy. If only, eh...

Hil, I wondered where you'd gone. Allegedly, the Pound did pass the $2 mark, but seems to have subsided somewhat this morning. It's probably missing you.

SC

'Fraid I was short this morning from 52, but decided that I wasn't that confident and closed flat. Opened another shortly thereafter and closed that for 10 pips.

If only eh?

pth