Forex rebates on every trade - win or lose!

Hils thanks - I had quite a funny exit actually as I have 2 accounts & I accidentally bought a position in the other account instead of closing my short - at 1.9463. It then dropped to 1.9440 so I closed the short & then closed the long when it went back to 1.9470

My gut reaction is that longer term it's a short but I don't want to sit out another rise to 2.15 - so happy with nothing open at the moment - I will look for a new short entry.

I love your charts with the explanations - many thanks. All I can see is a big head & shoulders which looks complete!!

NEW YORK (Dow Jones)--The euro strengthened against the dollar early Tuesday in New York after billionaire investor Warren Buffett revealed an offer to reinsure municipal bond portfolios, and on the back of some grit from euro-zone officials.

The euro reached an intraday high of $1.4585 and Y156.56 early Tuesday morning. The dollar also hit Y107.54 after Buffett, in an interview on CNBC, said his Berkshire Hathaway (BRKA BRKB) holding company offered up to $800 billion in municipal bonds to bond insurers Ambac Financial Group Inc. (ABK), MBIA Inc. (MBI) and FGIC. Buffett says one firm rejected his offer and he is still waiting to hear from the other two.

Sentiment was also boosted by news that six major mortgage lenders, including Citigroup (C) and Bank of America (BAC), have a plan to ease foreclosures. That helps currencies with higher interest rates to gain against their lower-yielding competitors as investors take riskier bets.

But the scope of the euro's lead indicates a bias for dollar buying and demonstrates that the single currency is under pressure from actions to stimulate the U.S. economy by the Federal Reserve and U.S. government, said Stuart Bennett, senior foreign exchange strategist at Calyon Credit Agricole CIB in London.

Early Tuesday in New York, the euro was at $1.4538 from $1.4522 late Monday, while the dollar was at Y107.37 from Y106.91. The euro was at Y156.10 from Y155.26 late Monday. The U.K. pound was at $1.9523 from $1.9505, according to EBS, while the dollar was at CHF1.1026 from CHF1.1018 late Monday.

UBS data signal that clients' demand for the dollar is growing and the greenback is just one of three major currencies, along with the Canadian dollar and U.K. pound, enjoying long positioning on a four-week net basis.

"These trends support our view that clients seeking protection from a more pronounced global downturn will increasingly turn to dollar funds for safety," said Alina Anishchanka, currency strategist at UBS in London. Investors are favoring "the currencies with central banks that are ahead of the curve and are cutting rates to support growth," she said.

At the same time, currency markets are also subdued in the absence of major economic releases Monday or Tuesday. January retail sales out Wednesday will be the week's first big data event.

In a meeting of finance ministers Tuesday, the current euro-zone president, Slovene Finance Minister Andrej Bajuk, said economic growth in the European Union is slowing but will be close to potential in 2008.

Slovenia holds the rotating presidency of the E.U. for the first six months of the year.

The E.U.'s finance ministers were again quick to highlight the economic differences between the euro zone and the U.S.

"There are no big macroeconomic imbalances in the European economy," Bajuk said. "The housing sector, the capital markets are not facing the same issues as in the U.S."

Also, a survey released Tuesday from the Center for European Economic Research, or ZEW, showed sentiment among German financial analysts and institutional investors unexpectedly improved in February, albeit slightly.

The ZEW think tank's economic expectations index increased to -39.5 points from -41.6 points in January - above economists' forecasts of -45.0 points.

A day earlier, St. Louis Federal Reserve Bank President William Poole acknowledged that the risks of a recession have increased in the U.S., but said that the "best bet is that we won't have a recession."

A new plan encouraged by the Bush administration, dubbed Project Lifeline, is part of the effort. The lenders promise to seek contact with homeowners who are 90 or more days overdue on their mortgages. In some cases, homeowners will be given the chance to "pause" their foreclosure for 30 days while lenders try to work out a way to make the loans affordable. Lenders could begin sending letters to these borrowers as soon as this week. Homeowners wouldn't qualify for the program if they are in bankruptcy, if they already have a foreclosure date within 30 days or if the loan was for an investment or vacant property.

Unlike the bailout plan announced in December, this latest effort is to involve all kinds of home loans, not just subprime mortgages.

Overnight, the biggest mover during the European session was the U.K. pound, which fell sharply on news that U.K. inflation rose less than feared to 2.2% last month, from 2.1% in December, despite forecasts of a rise to 2.4%.

This will help to ease some of the recent pressure on the Bank of England not to cut interest rates. Not only did the latest producer price figures Monday show that factory gate prices rose by 5.7%, instead of just by 5.1% as expected, but the latest retail sales survey from the BRC showed a 2.6% rise on a like for like basis, the largest increase since September.

Elsewhere, Japanese markets re-opened Tuesday after a national holiday.

Late Tuesday, the regional San Francisco Fed president will speak at 11:05 a.m. EST (1605 GMT) and the January Federal Budget will be released at 2 p.m. EST (1900 GMT).

Hmmm ... that Mr Buffett - he's a one.

Did you know that the advice of the good old guardians of our well-being, those nice UK government people, limits an adult's salt consumption to no more than 6g a day :o)

Call options, anyone?

The 4 hour cable chart shows that it is still rising and there could easily be a fair bit more mileage in it yet. There is, however, resistance at around 1.9740 (red line on piccie) which could pose a bit of a problem first. If it can get through that then a retest of the 1.9950 region representing the previous 4 hour high has got to be on the cards.

I want to go short again!!!

I suspect you'll get a good opportunity to sell into the rally back up above 1.97 at the beginning of next week, Sue.

Hilary, if there is going to be a rise up back over 1.97 next week why did the /$ rate fall so much last night?
My rudimentary understanding of economics accords with what you say. With a lower interst rate in the US than here and reduced liklihood of early cuts in the UK the should be rise in vs $. This indicates a rise back over 1.97 but not yesterday.
Thoughts?

It's got naff all to do with economics, TT. It's what the traffic lights and the squiggly lines on my chart suggest.

edit: Did it fall last night? I'm sure it was 1.9720 at about 7am. That's only a handful (actually two handfuls and a footful) off yesterday's high.

I'll be back next week or the week after - just a bit too busy with my business atm.

Should I go short yet???????????????????????????????????????


Isn't anyone trading Fx?

By these charts, I would say not short just yet. But then again, I am a complete novice.

Daily downtrendline above, test recent continuation head and shoulders, constrained under 50ma, lower highs might all suggest soon taking the short side.
Short under 9714 or run for the hills long above 98??? (sorry those are march contract prices)

The H4 suggests to me that it's got higher to go on this leg, although the faster timeframes suggest there could be a bit of short term unwinding first.

Remember as well that it's only the rising support line from 2006 which has been breached. The support line from 2002 is still intact, currently at around 1.88.

Downside at the moment also seems to be limited at just below 1.94. Three times it's banged on that door in the last month and it's been turned away each time.

Currently above downtrend line from 2.1162 but not by much.
Buy break of this above 9683 or buy around 0.38 pullback of yesterdays move for patternmeisters?
OR Fridays may be pullback days and gap EVENTUALLY around 9480ish from 9.30 move yesterday

LONDON (Dow Jones)--The currency markets may be tough hunting ground for profits among professional traders right now, but amateur dabblers don't seem to be scared away.

Deutsche Bank AG (DB) this week reported that flows on its retail currency trading system hit a record high during January, a tumultuous month for trading.

It doesn't reveal the size of the flows, but it does say that the monthly total was higher than ever before in the system's relatively short two-year history.

The record flows came during a month when the U.S. Federal Reserve cut U.S. key interest rate 125 basis points, including an a 75-point cut in one fell and unscheduled swoop that took the basic Fed rate below that of the European Central Bank's 4.0% policy rate.

During January, major currencies jerked higher and lower with no clear pattern, driven by different factors on different days. Trading volumes were heavy but direction was tough to call, and long-standing economists are still puzzled by the market's behavior.

Such volatility seriously crimped professional currency hedge funds' returns, leaving many nursing losses. Big-hitting traders have had their nerves frayed, and anecdotal evidence suggests they are now holding their positions for much shorter periods.

"There was a lot of damage done in January and few people had a strong month," said Keith Presbury, who runs the Rhicon Forex Investment Management currency fund in London. That has filtered through to shorter-term positions now "because managers don't want to show a terrible first quarter," he added.

But it could be that despite wobbly exchange rates, which have been particularly difficult to predict over recent weeks, retail investors are finding greater comfort in currencies than in other, more established asset classes.

"As the world observed tumbling equity prices during January 2008, investors sought to optimize alternative asset classes where they could make money, and foreign exchange presented such an opportunity," said Catherine Hardimann, head of Deutsche Bank's retail foreign exchange service in Europe.

Retail trading in the $3.2 trillion-a-day currency markets is clearly taking off. Research firm Aite Group estimated last summer that retail flows at the end of 2006 had hit $60 billion a day. That's a tiny slice of the market as a whole, but it's up fivefold from 2001.

Aite also predicted that flows by the end of 2007 would have hit $77 billion a day. Tighter regulation of retail currency trading systems, driven by the National Futures Association in the U.S., has helped to bolster confidence in the sector.

For trading systems, several of which have struck deals with big foreign-exchange banks to work together on reaching retail clients, this new boom time is what they have been working for over several years.

"In the past couple of years, the industry has reached critical mass," said Glenn Stevens, chief executive of retail trading outfit Gain Capital Group in Bedminster, N.J.

"The big banks were almost forced to entertain retail currency trading, and now it's embarrassing not to offer it," he said.

Stevens reckons that retail flows will keep growing even if big currency managers keep suffering patchy performance.

"You're more likely to hear about it if funds are getting beat up than if they're being successful," he said. "Many professionals have gone flat, but for the individual traders, this volatility means opportunities."

1.30PM US inflation data didn't yield any real support to the dollar. Yet anyway!
2.00PM housing data only likely to be reactive in one direction, but even then probably not by much? At least for now!

(Updates throughout with euro's late-day move to a fresh all-time high at $1.5050)



By Min Zeng and Robert Flint
Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--The dollar tumbled to a record low against the euro as continued concerns about the U.S. economy led to full-fledged attack on the greenback.

Remarks from a top Federal Reserve official, hinting at the need for further interest-rate cuts to head off a recession, sent the euro on the last leg of its advance into record territory.

Adding to the selling pressure on the dollar were surging commodities prices, which spurred investors to buy assets from Australia, New Zealand, Canada and Brazil. The New Zealand dollar hit its strongest point at 81.30 U.S. cents since the local currency was freely floated in 1995.

The euro reached as high as $1.5050 in late-afternoon trading as selling momentum intensified after Fed Vice Chairman Donald Kohn signaled downside risks to growth and that the central bank may need to cut rates further to prevent the economy from slipping into recession. The level surpassed the previous peak of $1.4968 in November.

The euro may rise even farther beyond $1.5050, especially if Fed Chairman Ben Bernanke reiterates gloomy economic growth in the near term, and suggests more rate cuts Wednesday and Thursday during his semi-annual testimony to the Congress, traders said.

"Forces are ganging up against the dollar," said Jeff Gladstein, global head of foreign-exchange trading at AIG Financial Products in Wilton, Conn. "The belief is that Bernanke will reiterate on the hill that the Fed will stand ready to ease further. This is good for stocks, good for commodities and good for dollar bears."

Late Tuesday in New York, the euro was has retreated to $1.5013, up from $1.4823 late Monday. The dollar was at Y107.24, down from Y108.07. The dollar was at CHF1.0749, down from CHF1.0899, and sterling was at $1.9862 compared with $1.9674. The euro was at Y160.67, from Y160.52 Monday.

The euro could rise to $1.51, which will be a strong resistance point for the common currency, said Gladstein. If the euro manages to break $1.51, it has the potential to reach the longer-term target of $1.55, he said.

The dollar was already under pressure after U.S. data showed consumer confidence and housing prices continued to slide, which came in contrast to better-than-expected business confidence data released in Germany. The divergence raised speculation that the economic slowdown in the U.S. may not spill over into other economies, traders said.

"There will be further dollar weakness ahead," said Samarjit Shankar, director of global strategy for the global markets group in Boston at Bank of New York Mellon. "There is lack of contagion. Maybe it is just a U.S. slowdown story. American investors venture overseas to seek higher-yielding assets."

He said the euro could rise to $1.51-$1.52 by the end of March.

The dollar has weakened against the euro in the past five years, with the exception of 2005. The selling intensified after the Fed became the first central bank in Group of Seven nations to cut borrowing costs in September after the subprime-mortgage turmoil swept global credit markets and threatened broader growth.

The Fed has cut its fed-funds rate 225 basis points since September to 3% and traders bet on further reductions next month. In contrast, the European Central Bank has kept its rates steady at 4%, citing concern over inflation.

Lower rates in U.S. are dimming the allure of dollar-denominated assets.

Traders and strategists have talked about a rebound in the dollar later this year as they view that aggressive rate cuts will eventually bring U.S. growth back to a firmer track. Still, near term, with U.S. data continuing their negative tone and more Fed cuts in the cards, investors prefer bets against the dollar against other major peers, traders said.

Adding a blow to the dollar were reports showing rising inflation risks. The producer price index came out higher than expected, which followed a spike in consumer price index released last week.

"Weak data are pointing to increasing risks of stagflation in the U.S.," said Brian Dolan, chief currency strategist at FOREX.com, a unit of online currency trading firm Gain Capital in Bedminster, N.J. "It's a weak dollar thing as commodities denominated in dollars move higher and the dollar is sold to offset price increases in other currencies."

In Tuesday's economic news, U.S. January producer prices rose 1.0%, higher than a consensus of 0.4% in a Dow Jones Newswires survey. The core number, excluding food and energy, rose 0.4% versus expectations for a 0.2% rise.

Meanwhile, the Conference Board said its index of consumer confidence for February fell to 75, which, with the exception of the start of the Iraq War in 2003, was the lowest reading in 15 years. Also, home prices in 10 major metropolitan areas in the fourth quarter were down 8.9% from a year earlier, according to the S&P/Case-Shiller home-price data released Tuesday. That was the largest decline in the measure's 20-year history.

U.S. durable goods will be released at 8:30 a.m. EST Wednesday, followed by new home sales data that are due 10 a.m. EST.

Cable Daily chart with some food for thought added concerning Ruthie's Magic ArrersTM

I would have thought that the MACD will pass up through the histogram in around 15 sessions hence.

Well, I said I'd be back with a plan. My aim is 100 pips a week. Given how busy I sometimes am at work that may be hard to achieve.

I've had 2 trades today.

Went long cable at 1.9860 at about 9.35 this morning as it looked like a breakout, wanted a tight stop just in case and in the end got stopped out for 23. If I'd had a wider stop (40 pips,I could have netted 50 or so pips in the afternoon but that wasn't to be.

Next trade was long EUR JPY @ 156.59 at around 12.50, with a large 90 pip stop; too large really and I'll have to address that. I did move the stop up to break even as soon as we had clear water. Anyway, all went swimmingly and I closed that +80 on the leg up. If I'd hung on a bit longer it could have been over 100 but I took my money off the table.

Net result +57 on the day. I may struggle to do anything tomorrow as it's going to be a busy one.

Is nobody interested in this thread anymore?

I've drawn another pretty picture. I reckon the 2.0170 region could prove to be a good place to short cable from in a few days time.