Forex rebates on every trade - win or lose!

The 4 hour chart paints a similar picture with definite signs of life.

There's something definitely odd about the way in which Metatrader handles its lines.

The red and blue trend lines in the 2 charts above are set up so that they appear in all timeframes.

On the daily chart they cross on 30th December, yet on the 4 hour chart they cross on 7th January and on the 1 hour chart they cross on 9th January. Strange!

Sunday candles Hilary but I can't quite put my finger on it either.

Oh and problems with the H4 candles due to Sunday too depending on your provider.

Fork 'andles?

EUR/JPY - to trade with bullish bias, supported by carry trades amid improved risk appetite. EUR/JPY daily chart positive-biased as bullish key-reversal day pattern completed yesterday, stochastics turned bullish at oversold, although MACD remains bearish. Immediate resistance at 157.83 (Thursday's high), then at 158.47 (Jan. 16 high); support at 154.20 (hourly chart), then at 152.09 (yesterday's low).

Looks to me like it's making lower lows and lower highs on the M1, Chocopops, and the M15 dottie line suggests it's got further to fall.

Unless that's a higher low at 10:17 of course.

:o)

Still not sure whether long term support was broken Monday/Tuesday, Hil.

I think the writing was on the wall with the failures in October, November and December to retest the July high, Chocopops.

I'm an avid follower of Ruthie's Magic ArrersTM and I've noticed how it's been rallying on the weekly charts as the signal line exits the histogram just using the standard MACD settings. I think the big test is going to come probably sometime this spring when the next imaginary up arrer is likely to appear. If it bounces up then, you will be able to say that the carry is still alive and you'll see global equity markets enjoy a summer push up.

If the arrer loses its magic at that point, I think you'll be able to kiss goodbye to the footsie and the Dow for a few years to come. I suspect that it will fail to gain support with the up arrer given the fact that markets always tend to go a bit wobbly as US elections start to loom on the horizon.

Possibly heading for a retest now.

Anyway ...

NEW YORK (Dow Jones)--The global market panic driving Tuesday's Federal Reserve rate cut is rooted in the still controversial idea that the U.S. economy has slipped into a recession.

Many market participants now take it as an article of faith the U.S. economy is, or will soon be, in a contractionary phase of economic activity. Some even argue that as long as it "feels" like a recession, it is one. But that sentiment obscures the reality that thus far there is no definitive view among economists about how weak the economy is, or might become.

That's not to say that even for those who lie on the relatively optimistic side of the spectrum, anxiety isn't riding high. The Fed, which cut interest rates by an unprecedented margin Tuesday, has consistently downplayed and underestimated economic and market conditions over recent months. But even so, it justified its action by saying "appreciable downside risks to growth remain." Clearly, policy makers have grown more anxious.

And rightly so. Since September, the Fed has cut its key overnight target rate by nearly two percentage points and engineered novel mechanisms aimed at getting liquidity into financial markets. In turn, the institution's good works have been washed away by weakening economic data, most notably on the employment and manufacturing fronts, and by a seemingly endless stream of bad news from financial markets. The weight appears to be on the side of those who see the worst for the economy.

"The Fed came out and said we are going into recession" given Tuesday's action, said Eric Green, economist with Countrywide Securities. "We are in the middle of a pretty serious meltdown in the economy," and that's why the Fed acted so aggressively, he said.

Views held by forecasters are unusually diverse. Over recent weeks several major investment banks, including Goldman Sachs and Merrill Lynch, have officially endorsed the view the U.S. economy is contracting. The latter bank's frequently bearish chief economist, David Rosenberg, said the four factors watched by official business cycle dating body the National Bureau of Economic Research are each on the way down. Employment, manufacturing and retail sales, along with industrial production and income, all appear to be coming off cycle high points - Rosenberg sees this as a clear sign of a recession.

The Merrill Lynch economist's assessment of the economic landscape is downbeat, to be sure. On just about every front, he sees bad things, from further sharp declines in housing prices and their related negative impact on consumer spending, to more declines in financial markets.

What's worse, "the healing phase involved in expunging all the excesses left over from a multi-year leveraged boom in asset values takes time," Rosenberg told clients. He reckons the current year will scrape by with an average growth rate of 0.8% - the year will likely see three contractionary quarters - with 2009 limping by at a 1% pace.


Is It Really That Bad?

John Silvia, chief economist with Wachovia Securities, doesn't think things are as bad as Rosenberg does. He notes that "up until September our key indicators did not suggest a recession, but since then these same indicators show a clear shift in the economic winds and therefore a bias toward caution for decision-makers." He sees 50-50 odds of a recession, but believes that if policy makers move aggressively, a downturn need not take place.

Meanwhile, Miller Tabak strategist Tony Crescenzi sees reasons to be hopeful for the outlook. He cites the stance of monetary policy as well as the prospect of fiscal stimulus as reasons to believe any contraction, should it occur, will be short-lived. He added to the list of positives low inventories which must eventually be rebuilt, along with rising exports, healthy corporate cash positions and the possibility of a wave of new mortgage refinancings now that rates are moving lower.

Joel Naroff, who helms forecasting firm Naroff Economic Advisors, said that by his reckoning, the economic data now in hand "doesn't tell us we are in a recession yet." While he's cautious about the outlook, he argued Tuesday's rate cut was forced as much by market expectations as anything else. He warned that it is entirely possible that the upcoming January jobs report may be stronger than many think, which could make the size of Tuesday's action seem over the top.

While Tuesday's action clearly shows Fed officials are at least mindful of worst-case outcomes, even there one finds diversity. Soon-to-retire St. Louis Fed President William Poole used his final vote as a Federal Open Market Committee to in effect say the apocalypse is not now. Poole has been an unreliable guide on monetary policy for some time now, but at the same time, he has represented the views of many when he has argued that as bad as things are for markets, the real economy has not unambiguously lost its bearings.


(Michael S. Derby, a special writer at Dow Jones Newswires, covers the Federal Reserve and the U.S. economy.)

I still haven't closed my short cos I have been working

Still pondering.

Interesting week here.

Monday had some difficult trades with FX. Got stopped out a number of times.
However, I took a trade on FTSE really for no other reason than it was down about 300 points at the time and it had approached a round number.
Maybe i got lucky but got 60 points out of it.

Then I added trendlines, chucked a macd and some fibs on it and I've now i've got 6 winning trades in a row on it. Mainly i am leaving it until about 11:30 to let it set up some trendlines to work off and then waiting for it to go where I think it should go and then going in on turn of the retrace - i.e if I think it's going to go up I wait until it does go up, then wait until the pullback is completed and then go in when it starts moving up after the pullback.
Since the first trade everything has been thouroughly planned and executed and I feel like instead of trying to find a trade that really isn't there I am waiting and waiting until i am sure.

Now why should this work on ftse but not forex for me? I don't know cos it's more or less the same thing. FX i'm waiting until the timeframes match up in one direction and then go in when the moving averages start going in the right direction on the lower timeframe. It's no different to what i'm doing on futures but the results are quite different. (on a small sample of data admittedly)

I wonder whether the difference is just that i've spent 6 years watching the ftse chart whilst trading stocks and i've just got more history in my head about what a good setup looks like on a chart on ftse.

I'm now splitting my time between futures and fx. I'm quite optimistic as the discipline I've learnt on fx seems to have put me in the right state of mind psychologically to trade.
Either the trade is good and i will make money or it isn't and the stop will take care of it. I know my risk before i take the trade and can concentrate on maximising it's potential.

LONDON (Dow Jones)--The dollar is mostly lower in Europe Wednesday as risk aversion rises and the market continues to speculate on how large a rate cut the U.S. Federal Reserve will deliver later in the day.

The dollar had ended U.S. trading Tuesday in relatively positive mood - encouraged by stronger-than-expected U.S. durable goods data, shrugging off a larger-than-expected fall in consumer confidence and boosted by a 0.8% rally in the Dow Jones Industrial Average.

However, sentiment started to turn sour again during Asian hours. Mizuno raised its subprime provisions to Y130 billion, helping to push the Nikkei down 1% on the day, and UBS reported a fourth-quarter writedown of a massive $14 billion.

This was against a background of reports that the U.S. FBI is launching an investigation into improper subprime lending.

Currency strategists at ABN-Amro said investors were made more risk averse by news that Japan's industrial output rose only 1.4% last month instead of the 2.1% that had been expected.

As market sentiment sank, the yen rose against the dollar.

Now, the focus is very much on what the Fed does after its FOMC meeting ends. Although the strong durable goods data initially lifted expectations of a 25 basis point cut, rather than a 50-basis point one, forecasts soon fell back as the data failed to indicate improved consumer activity.

Fed fund futures are now indicating an 80% chance of a 50-point cut and a 28% chance of a 25-point cut, according to Sue Trinh, a currency strategist with RBC Capital Markets in Sydney. She noted that there is also still some speculation over a 75-basis-point reduction.

Currency players are also keen to get some measure of whether the Fed will cut rates again next month. Analysts reckon that if the Fed fails to suggest further easing, this could knock equities and prove negative for the dollar.

Apart from the Fed, the market also faces the latest gross domestic product and ADP employment numbers.

The former is expected to show fourth-quarter growth slowed sharply, to 1.2% from 4.9% in the third quarter.

Strategists at UniCredit Markets and Investment Banking warn that an even sharper slowdown could "ignite" dollar bears even before the FOMC decision.

The ADP employment data is expected to show a 40,000 increase in January, the same as in December.

At 1032 GMT, the dollar had fallen to Y106.91 from Y107.04 late Tuesday in New York, according to EBS. The euro was at Y158.35 from Y158.20, and at $1.4807 from $1.4777.

The dollar was down at CHF1.0890 from CHF1.0927, while the pound has risen to $1.9920 from $1.9892.

LONDON (Dow Jones)--In a busy week for U.K. data, attention will be focused on whether the Bank of England's Monetary Policy Committee will cut interest rates Thursday.

All 11 economists surveyed by Dow Jones Newswires expect the MPC to announce Thursday a cut in the key interest rate from 5.5% to 5.25%.

"The main question appears to be not whether the Bank of England will cut interest rates next Thursday, but rather by how much," said Howard Archer, an economist at Global Insight.

"But despite calls for a 50-basis-point reduction, we expect the Bank of England to trim interest rates by 25 basis points to 5.25% on Thursday," he said.

The key indicator next week is the purchasing managers index for the U.K.'s dominant services sector released Tuesday. Economists expect the index to lose momentum, softening to 52.0 in January from 52.4 in December.

Manufacturing output and industrial production figures for December are released Thursday and economists are expecting a modest rebound. Going forward, however, economists expect the manufacturing sector to struggle as it is buffeted by the credit crunch, slowing domestic demand and elevated oil prices.

DATE GMT INDICATOR PERIOD FORECAST PREVIOUS
Feb 05 0930 PMI Services Jan 52.0 (9) 52.4
Feb 06 0001 Nationwide consumer Jan N/A (-) +85
Feb 07 0930 Manufacturing Dec +0.1%MM (8) -0.1%MM
Feb 07 0930 Manufacturing Dec +0.2%YY (8) +0.1%YY
Feb 07 0930 Indus Production Dec +0.1%MM (9) -0.1%MM
Feb 07 0930 Indus Production Dec +0.7%YY (9) +0.4%YY
Feb 07 1200 MPC Feb 5.25% (11) 5.5%
Due in week Halifax Index Jan N/A (-) 1.3%MM
(Figures in parentheses refer to number of economists surveyed.)

I'm still indecisively short

Hey ho

should have closed at 1.94 like Hils said - problem is I'm working with no access to trade!

This is the 4 hour cable chart since the end of last year. The indicator is a stochastic of MACD which does everything that MACD does as well as measuring how overbought or oversold the market is.

You can use it to easily identify the highs and lows of the legs. It's pretty clear that since November it's been making progressively lower highs and lows.



This most recent high last week was higher than the previous high. It remains to be seen yet whether the overnight low can be confirmed as a higher low on the H4 chart because the indicator hasn't yet started to move up. If it does start to inch up today, we're certainly in for a retest of the 1.9950 level and it could easily sail on past this if the MPC don't cut rates this week. They're a law unto themselves and the market has clearly priced in a cut, but I don't see any reason for them to cut just to appease Joe Public all the time that inflation (which is the primary part of their mandate) is not going down.

hi everyone, hope your all keeping well.

Havent looked in for quite a while, been having an excellent time enjoying life as a saisonaire. Had a bit of a nasty fall last week, split my calf muscle, see the doctor tomorrow and find out what the ultrasound scans show. Might be back trading sooner than I thought!

cc notice not much mention of candles, theres some excellent education stuff on interpreting candles for fx which I found a great help and gave me alot more information on the chart i was looking at. Unfortunately the information is on a computer thats in spain. One of the guys was dan gramza(auwful voice), think they were education webinars on cbot, certainly one of the american exchanges

Would be really keen to attend an fx getogether if thats still on the cards, out here until end of season unless its bad news tomorrow. Near airport would be good for me.

Goforit, my wife tore/separated calf muscle skiing on Christmas day 2001 (no alcohol involved). Key to still skiing (age nearly 54) was MUSCLE MASSAGE rather than any physiotherapy etc

still short

Still pondering!

What time is the bank decision?

Closed it at last 1.9440

Watch it fall now!