Possible Automaker Bankruptcy Boosts US Dollar & Chart Analysis EUR/USD

USD

The Dollar rallied on Monday as news of possible bankruptcy at US automakers, General Motors and Chrysler sent investors into the currency markets seeking the safe-haven USD and Japanese Yen. When times get tense in the financial world it is common for investors to pull their money from higher yielding, higher risk investments and pick up the US and Japanese currencies – viewed as more stable and resistant to losses as other investments.

At 5PM GMT, the Dollar was up 1.08% to the Euro at 1.3142, up 1.14% to the Pound to 1.4157, up 1% to the Canadian Dollar to 1.253, up 2.18% to the Australian Dollar to .6788 and up 1.7% to the Kiwi to .5602.

EUR

The Euro was down broadly as news emerged that Spain was forced to take over a regional bank once thought to be stable. This added to the selling already underway as investors braced for another interest rate cut by the European Central Bank, a move that is expected to bring the core rate down to 1%.

At 5:10 GMT, the Euro was down .1% to the Pound at .9271, down 2.15% to the Japanese Yen to 127.26, down ¼% to the Canadian Dollar to 1.6464, down ½% to the Swiss Franc to 1.5144 and up 1% to the Australian Dollar to 1.933.

Background to Mondays Market Action

President Obama surprised the markets today by denying the US Automakers, General Motors and Chrysler’s, request for additional funding after demanding the resignation of the GM Chief Executive. It was widely expected that Obama would grant their request for an additional 21 Billion Dollars, however as the G20 summit approaches, it seems as if Obama is interested in publicly denouncing his “spender” label. Obama and British Prime Minster Gordon Brown are trying to garner support for a 1.7 Trillion Dollar “Global New Deal” as their counterparts in many European and Asian countries are questioning their tendency to spend blindly on bailing out companies that are failing – termed “Zombie” companies.

The G20 meets Wednesday in London.

Chart Analysis: EURUSD

EURUSD is slicing lower on the new bout of risk aversion to open the week and ahead of a possibly dovish Trichet on Thursday. Online forex sees a key level comes in just above 1.3100, the 100-day moving average (not an important MA recently, but was very influential in recent years), and also the 50% retracement level for the recent rally to north of 1.3700. Below that, the psychologically important 1.3000 level looms.

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G20 – The dawning of a new world order.

The thing about big conferences involving world leaders is that everyone is so proper and polite in front of one another. British Prime Minister Gordon Brown is lobbying the world for a new world order along with President Barack Obama. They are proposing a 1.7 Trillion Dollar global stimulus plan for the world to follow, the trouble is over the weekend news broke that the world is not into that idea. France, Germany, Spain, Russia, China, have all made statements questioning the idea of such a global spending effort – some classifying it as counterproductive.

The Canadian Prime Minister was on American Television on Sunday being very diplomatic in his discourse. He said that he needed to review the proposal and that certain things needed to be ironed out before a “meaningful discussion could be had on the issue” – in plain English, the G20 will not yield any fruit on Brown and Obama’s plans. The few things needed to be ironed out are this – FIX YOUR BANKS FIRST, SHOW US THAT THEY ARE GOOD AND SOLVENT, THEN MAYBE WE CAN TALK ABOUT YOUR IDEA.

The Online Forex world knows this to be true. And the erratic trading on the dollar and pound have proven that there are many skeptics out there with regard to the G20 and what it will produce. Aside from some smiley pictures, a few days in cloudy London and some good old Scotch, what can these leaders say they came home with? I do not believe they will come home with much.

It is going to be a slow week up until the summit on Wednesday – light volumes and erratic swings will be the norm (unless someone big makes a gaffe like Geithner or Brown did last week). I also believe that the world is in for a shock when they see what all the spending and currency manipulation has done to the two staple currencies, the Pound and the Dollar. The Pound used to trade at over $2 to the Dollar and now it is hovering around $1.40 – this is a big drop. And the US Dollar is almost at parity with the Canadian Dollar – this used to be the butt of many jokes about Canada back in the day when I first started out. But now the two are neck and neck – it used to be .60 cents on the dollar for the Canadian currency. Perhaps we are in for a new world order. Perhaps we are in the midst of history in the making.

Hang on.

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Geithner: "Proposal for Chinas world currency" | Pounds Stumbles | Chart Analysis EUR/JPY

USD

Treasury Secretary Timothy Geithner said on Wednesday that the US Dollar was likely to be the worlds reserve currency for a long time to come. And with this, he also said he was open to Chinas world currency proposal. The dollar reacted negatively as Geithner spoke, especially against the Euro which it had been up against until Geithner spoke. As investors began to digest the bank plan the US Treasury announced on Monday, many began to question the viability of the plan which increases US spending and taxpayer liability, and calls on private investors to join in the purchase of these assets with unknown value.

At 5PM GMT, the Dollar was trading down to the Euro .5% to 1.3534 after trading up to 134.95 when Geithner began to speak. The Dollar also fell to the Yen by ½ to 97.57 and to the Canadian Dollar by ½% to 1.2248. The dollar did manage a gain against the Pound to 1.4592, a .6% rise.

GBP

The pound fell after the Confederation of British Industries distributive trades survey balance fell to -44 in March from -25 in February. Analysts had expected a smaller deterioration to -35. The failure to achieve a fully covered Gilt auction, suggesting reduced demand for sterling assets, also weighed on the currency.

Gilt strategists blamed the auction's failure on market uncertainty created by Bank of England Governor Mervyn King when he said on Tuesday that the Bank of England could scale back its program of gilt purchases if they were especially successful in boosting the economy.

At 5:15 GMT, the Sterling was down 1.1% to the Euro to .9272, down about 1% to the Yen to 142.42, down 1 ½% to the Swiss Franc to 1.6394 and down 1 ¼ % to the Canadian Dollar to 1.7858.

Online Forex Chart Analysis: EUR/JPY

The persistent EUR/JPY rally of late finally met resistance late yesterday as equities eased off recent highs. We wonder if the JPY crosses will top out here towards the end of March as Japan gets set for a new financial year. Watch the 200-day moving average in this cross as an important technical level over the coming week.

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Be Afraid – The end is near

The Bank of England is screaming at the British Prime Minister to cease his policy of spending. In fact, they have gotten so vocal for an organization that usually conducts its business behind closed doors and through confidential memos, that every newspaper in England – and most across the world, featured this story on the cover. The Times of London has a picture of Mervyn King, the BOE governor with a headline that reads “No more stimulus” – while online versions of the story have titles – “Stop, we have no more money”. It is interesting to see that the fiscal policy of England is beginning to rattle cages over there. It is worthwhile to note that the Prime Minister, Gordon Brown, is on a whirlwind tour in advance of next weeks G20 summit, trying to garner support for his and US President Obama’s “global stimulus” – and in his home his central bank is saying they cannot even afford it.

Oh, the similarities between the two – US and England – spending silly in the name of recovery while the debt goes higher and higher. There is one difference though, no one is screaming to Obama to stop. IN fact, Treasury Secretary Timothy Geithner just blew another Trillion yesterday and asked the US Congress for powers to seize “troubled companies” in the non-financial sector as well. Sounds more like Soviet style economics to me – but it all came in the name of being able to address an issue before it becomes one. So essentially, a business can be taken over by the US Treasury and its assets sold to other companies if the Treasury secretary (in coordination with the President and Federal Reserve) decides so. In my day we used to have something called a bankruptcy procedure – which required that a company who was in trouble go through the legal system to do the same. Secretary Geithner plan seems to do away with that process – I am not sure that is legal in the US, but have no fear, Congress will pass a retroactive law making it legal.

The world is getting worse – and China and Russia as I spoke about yesterday calling for the world to adopt a global currency in lieu of the dollar just the tip of the iceberg. The UN is doing the same. And while there has been these ideas before, we are entering a period of fear driving decisions, where the irrational becomes the rational in order to save us all from economic disaster. I fear that the UN will get their way now – posing this idea which china and Russia now back as a solution to a problem. I fear a global currency system – as it will destroy the capitalism that has made so many wealthy – and allowed for free markets such as the Forex. IT will kill the Online Forex and commodity industries and turn us all into socialist sheep, following instead of leading and thriving. Be afraid – be very, very afraid.

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Banking Problems in England, considered the worst in Europe at this time | Currency Analysis

GBP

The Pound also had a good Monday against the Yen. It seems as if the banking problems in England, considered the worst in Europe at this time, is not as bad as the perceived danger in the Japanese economy. The UK still has many hurdles to overcome, including the devaluation of the once mighty Pound Sterling, however it is believed that until the G20 summit, the currency will hold in its current neighborhood.

At 5:20 GMT the GBP was trading up 1 ¼% to the Yen to 140.44, down ¾% to the Canadian Dollar to 1.7825. up 1/3^rd to the Swiss Franc to 1.6349 and down 1 ¾% to the Australian Dollar to 2.0722.

Currency	Daily stance	Analysis
EURUSD	0/+	1.3740 holds the key for the near term direction. If it goes above, then we target 1.3860 or else we will re-visit 1.3580
EURJPY	0/+	Look for a re-test of Asian 131.95-00 high. Support is listed at 130.55
USDJPY	0/+	Buy when it breaks above 96.60 for a short term test of 97.30-35, or else watch it trade in the 95.50-96.50 range
GBPUSD	0/+	1.4580-90 looks a magnet pre-Geithner. Above sees acceleration to 1.4700-20
AUDUSD	0/+	While holding gains above 0.6940-50 look for extension to 0.7020

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Euro strength sparks export worries

EUR

The strength of the Euro is beginning to concern many within the European Union. Traditionally, higher currency valuation has a direct affect on the export trade as goods are more expensive to purchase. The rise in the value of the Euro at a time when the European export business is already in a severe state of slowdown will no doubt have a further negative impact on the industry.

The European Union, in contrast to the governments of The United States, Great Britain and Switzerland, has not announced an economic stimulus program that includes the purchase of government debt by the Central Bank or the injection of “new” money into the financial system. While this tactic is typically not common, many countries have employed it in an effort to free up money for business and consumer lending in a market that is essentially void of such at this time.

The fear is that if the EU does not act soon, the Euro could rise to $1.60 versus the Dollar and reach and even exceed parity with the Sterling – a move that would virtually lock out European exports from most major countries.

At Friday’s close, the Euro traded down .6% to the Dollar at 1.358 although for the week the Euro was up over 5% versus the greenback. The Euro traded down to the Pound to close at .9386, down 1/3rd to the Swiss Franc to 1.5294 and up nearly 1% to the Yen to 130.31.

USD

The US Dollar had a rebound on Friday; however it did have the largest weekly fall since 1985 against a basket of major currencies. The fall of the dollar was spurred on by a decision last Wednesday by the US Federal Reserve to purchase more than one trillion dollars worth of long-term US government debt – which is kind of like taking money from your left hand pocket and putting it into your right hand pocket. The money the fed used was “new” money – freshly printed for that matter – and that was seen as flooding the market.

Analysts are expecting the dollar sell off to continue as the US government nears three trillion dollars worth of new spending to help curb the recession. At a certain point the US runs the risk of devaluing their currency – which would have a trickle down affect on imports as well as the sale of government debt. Some analysts are predicting a collapse of the US’s standing as a safe haven currency because right now it is hard to see it sustained as such with record deficit and an overall astronomical national debt that would take at least fifteen years to pay down. The last such country to do something similar to the US was Zimbabwe – and we all know how that turned out.

The Dollar closed up 1 ½% to the Yen to 95.93, up ¼% to the GBP to 1.4459, up .1% to the Canadian Dollar to 1.2411 and down .35% to the Australian Dollar to .6872.

Chart EUR/USD – 30 Day

The Dollar seemed to be holding its own until the US government began unveiling their spending plans. The chart below shows a direct correlation between the various spending bills and their effect on the value of the Dollar against the Euro. To think this is coincidence, one only needs to look at the USD versus every major currency and a similar pattern will be revealed. IN the past 30 days, the Dollar has lost over 7% to the Euro – a staggering number. And many are predicting that this could just be the beginning if the US keeps spending AND if the EU does not implement a more aggressive approach to its handling of the recession. $1.3750 is the next resistance level and if it should hit that the next level up would be $1.3950. It is expected that the Euro to break through both levels in the near term.

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Forex Online Currency Analysis- This is EURO's Day | Increase in Unemployment in Britain | Bank of Japan’s Non-Move on Interest Rates

EUR

The Euro had an up day against the Dollar and Pound in advance of the US Federal Reserve’s decision on interest rates and in response to poor unemployment data coming out of Great Britain. In what could signal a change in sentiment the European equity markets have been doing better and the fortunes of the Euro have appeared to reverse.

At 5PM GMT, the Euro was trading above the psychological $1.30 mark against the USD at 1.3151; the Euro was also up strong against the British Pound to .9389 a 1.3% rise. The Euro also rose more than ½% to the Canadian Dollar to 1.6637, up ¼ to the Yen to 128.65 and up over1% to the Australian Dollar to 1.987.

GBP

The amount of unemployed in England rose at the fastest pace ever to a pre 1997 level of over 2 million. The numbers indicated that manufacturing jobs are being lost at alarming pace, sparking fears of an export slowdown. The British government’s assertion that a lower pound will support the export/manufacturing industry is being dismissed by investors that believe that only an increase in overseas demand can help the industry. Wednesday’s numbers have given credibility to this argument as Britons working in manufacturing, the staple of the export industry, have lost their jobs that at any other point since they began recording this data.

At 5:15 GMT, the Pound was down over 1/3% to the US Dollar to 1.3997, down ¼% tot the Aussie to 2.1153, down almost 2% to the Swiss Franc to 1.6283 and down 1% exactly to the Japanese Yen to 136.96.

JPY

Fallout from the Bank of Japan’s non-move on interest rates late Tuesday was muted as the aggressive moves of other Central Banks, notably the UK and Switzerland seemed to take precedence. The Yen slowed its decent, but still was weak in Wednesdays trading session even after the BOJ declared that they will be buying Japanese Government Bonds – which are now perceived to be a non-move considering that none of other major countries are buying Japanese Debt and the BOJ buying debt of their own country is considered to be a wash.

The Yen rose ¾% to the Dollar to 97.87, rose more than 1% to the Australian Dollar to 64.56, rose .8% to the New Zealand Dollar to 51.85 and fell ¾% to the Swiss Franc to 83.97 on top of its losses to the Euro and gains against the Pound mentioned above.

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Dollar is Beginning to Lose its Luster

Ok, so the stock markets seem to be bouncing back, data releases seem to be telling a good tale and the dollar is beginning to lose its luster as online Forex investors move towards a more risky approach to their investing. I still believe there is a long way to go before we can call this crisis over – I still don’t believe we have hit the bottom yet. I would not be surprised at all to see the markets suck everyone in for a few more weeks- perhaps even a month, and then collapse once again. The problem here that everyone needs to see is that this “turnaround” in the economy came overnight – on the heels of a dismal employment report in the US. It was protracted based on a better than expected retail sales report – a report that does not take into account the fire-sales and going out of business sales that saw retail prices drop in some cases, by 80%.

Forex traders and the Forex Broker companies are smarter than that. Have you ever wondered why when the stock market’s fall the currency gets stronger and vice-versa? It is because the Forex tends to work more on economic logic than raw emotion. If people are losing money in equities, they look for a quiet and safe place to park their cash – and what better place to park cash than in Cash, or rather, in foreign currencies. Forex traders know that the economy is no beeter now than it was two weeks ago – and they are preparing themselves for the fall while in the mean-time, taking advantage of some good shot-term trading opportunities to earn some extra money.

We must not forget that the EU is in trouble and still cannot agree on anything related to a solution. What is good for France is not good for Germany and what is good for the West is not good for the (or available to) the East. It’s a problem being connected at the hip when economically when your individual economies are in need of different things. The US is not out of the woods by far. All of this money printing and debt issuing by the US government will come back to bite them, big-time. IF anything, these Trillions – with a capital “T” – have made recovery in the long term a difficult task because deflation can creep up at any moment. The worse situation is retreating to the stagflation days of the seventies after Nixon nixed the gold standard and made deficit spending possible.

History is there for us to learn from it. Why can’t our bright and educated leaders see that?

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Watch out: Dollar in a very erratic trading session | The Euro ended the week with one of its best weeks since the end of 2008 | The Sterling gained

USD

The dollar gained against the Euro and a host of other currencies on Friday in a very erratic trading session. As the vibe in the stock markets turned negative, investors returned the greenback as a safe haven. The equity markets had been sharply positive all week long, with US markets gaining roughly 9%, Forex investors had taken the opportunity to test their risk appetite, however Friday seemed to indicate a migration back to the US Dollar.

The Dollar did erase early losses brought on by gains in stocks after decent economic data and hints that the US banks might not be as bad off as everyone thinks. Online Forex nalysts believe that the recent rally here for the USD against the Euro is all about the stock market. Investors are trying to gage whether or not the downslide in the economy is nearing a bottom – at this point, any good news can spur a rally. But the rallies are short lived because the sentiment is still quite negative.

At Friday’s close, the Dollar was up .15% to the Euro to 1.2926, up .3% to the Japanese Yen at 97.98, and unchanged versus the Swiss Franc at 1.185. The Dollar did fall to the Aussie and Kiwi, closing down ½% to the AUD to .6579 and down nearly 1% to the NZD at .5248.

EUR

The Euro ended the week with one of its best weeks since the end of 2008. Much of the gains the Euro made this week were based on investors testing their risk appetite, as stated above, however news from European Central Bank executives also played a part in the Euro’s rebound. Last week, several ECB board members declared that the crisis was being managed more aggressively and that a light at the end of the tunnel is in sight.

The Euro closed up ½% to the Yen to 126.68, up .16% to the Swiss Franc to 1.5321, down .4% to the Australian Dollar at 1.9641 and down .35% to the Canadian Dollar to 1.6441.

GBP

The Sterling gained widely on Friday as investors appeared to be giving the battered UK currency a break on Friday. Much hype of the UK’s bank bailout plan and overall negative sentiment about the state of the British economy has kept the Pound down in recent weeks. As investors retreated from more risky positions on Friday they appeared to find value in the Sterling.

The Pound closed up ½% to the dollar closing at 1.4 flat and up .3% to the Euro at .9231, up ¾% to the Yen at 137.18 and up ½% to the Swiss Franc to 1.6591. The Pound did fall slightly to the Canadian Dollar to 1.7803 and to the Australian Dollar to 2.1271.

ChartAnalysis: USDCAD

The recent inability of the USD/CAD to stay firm above the 1.30 level coupled with significant tension in the fundamentals has put pressure on the currency pair. The rising trend line looks like the next key support level below the 1.2675 line of support. Another way to play for a stronger CAD is with a CADCHF or EURCAD trade. USDCAD will need to see 1.2950 again to give bulls renewed hope here....

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President Obama signed PORK!

The problem with the world is not that there is an economic crisis, it is that the politicians who are “trying” to deal with it are just making things worse. When US President Obama was candidate Obama, he promised the US people that he would eliminate excess spending, known to all as Pork. Well, after three enormous bailout bills filled with this Pork passed through the US congress, President Obama signed them – saying things arrogantly like “it’s a stimulus bill, what do think we do in a stimulus bill, spend” to justify the frivolous dollars that were spent. Yet yesterday was the clearest sign that this young, charming, good-looking man has no experience as CEO and limited experience in politics. Prior to signing a new 410 Billion Dollar spending bill filled with 8500+ frivolous spending items (pork), he lectured the press about how earmarks (pork) are bad and how it was shameful that congress needed to continue this policy of adding items to a budget that have no place in a budget in times of a crisis the magnitude of which the world is facing.

He then went into a closed room and signed the bill – with no cameras present.

Forex traders took it out on the dollar yesterday as people are starting to worry about where all this money is coming from. The US printing presses are on overdrive trying to make enough money to meet the demands of this Presidency which is already responsible for close to three trillion dollars of spending – more than the GDP of most major countries – and he is not even past his first 100 days.

Sure, all this spending might help the economy in the short term – how can an infusion of so much money not start an economy. But he is sealing the fate of the global economy for the next ten years as interest rates will soar and taxes will be raised in an attempt to pay for all this. Forex brokers have it right, sell the dollar because inflation will kick in and then the devaluation will begin. Get out while you can – before the carnage on Forex street really begins.

Look for Online Forex traders and blogs to begin trying to find a new favorite. Perhaps the Australian Dollar as I have been touting for months. It has done quite well – the yields are high and the potential for growth is great. Keep watching the Aussie – and don’t say I did not tell you so.

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Daily FX Reviews

EUR

The European central Bank Executive member, Lorenzo Bibi Smaghi, made comments on Tuesday that confirmed that the ECB was ready to lower interest rates to 0 should deflationary signs continue to be visible. Despite this, the Euro had a good session, continuing to make gains against some of the majors it has suffered against in recent weeks. Forex broker analysts attribute the bounce in the Euro to an increase in risk appetite, however these gains are not expected to last as banking worries and continued decline in the global economic environment are expected to push investors back into safe-havens like the US Dollar.

At 6pm GMT, the Euro was up 1/4% to the Japanese Yen at 124.81, up more than 1/2 to the British Pound to .9203 and up 3/4 to the Swiss Franc to 1.4699. The Euro fell nearly 1% to the Canadian Dollar to 1.6271 and more than 1 1/4% to the Australian Dollar to 1.9682.

USD

The US Bank Citigroup, recently at the center of a government bailout that saw the US government take a 40% stake in the company, announced on Tuesday that it had actually posted a profit in the first two months of 2009. This news lifted the stock more than 35% and caused a US Dollar sell off in the Forex. The dollar is still considered a safe-haven and analysts took Tuesdays fall of the dollar as a sign of profit taking after the dollar has been on a charge the past three weeks. It is expected that the dollars fall will be short lived and as economic reporting around the globe continues to show a slowing, the Dollar will regain its appeal.

At 6:15GMT, the US Dollar was off 1/4 to the Euro at 1.2638, down .1% to the Yen to 98.81, down .3% to the Pound to 1.382, and down over 1% to the Canadian Dollar to 1.2881 and over 1 1/2% to the Australian Dollar to .6405. The dollar also fell to the New Zealand Dollar over 1 1/4% to .4988 and rose against the Swiss Franc to 1.164 in daily FX charts.

Chart Analysis: EURSEK

The 11.40 level looks pivotal for EURSEK, which could continue to drop if we get a rally in risk appetite going here, and especially if that rally is aligned with a relief rally in the CEE currencies.

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Risk Management Stop Loss Order

Limit your loss with great forex trading strategy - Stop loss Order. Learn online forex concepts and book your profit here with your daily FX tips by Finexo.com. Also learn how to manage your risks using the Stop Loss feature. Watch and go to www.finexo.com to check it out!!

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Daily FX Currency Anaysis & Chart Analysis: AUD/USD

EUR

Investors pushed the Euro down on Wednesday as investors continued to price in the likelihood of an interest rate cut from both the European Central Bank and the Bank of England alt on today. The European Central Bank is expected to cut its core rate by half a percentage point to 1.5 percent, and the Bank of England is expected to lower its rate to 0.5 percent on Thursday, also by half a percentage point. Lower interest rates can weaken a currency as investors move funds to where they earn better returns elsewhere.

At 5PM GMT, the Euro was flat versus the dollar at 1.2573, down 1% versus the CAD at 1.61, and up slightly to the Swiss Franc at 1.4796.

GBP

Consumer confidence in the United Kingdom improved in February according to data released on Wednesday. The numbers though were seen as more as more of a psychological boost than a true indication of what the mood is today as the core negative number was still quite high. 77% of those polled for the survey believed that the economic situation is the same or will get worse in the future as compared to 82% who thought the same in January. The actual report also brought about questions as whether or not there is true optimism in England about recoveries considering that 40% of British mortgage holders are slated to be in negative equity by next year while the unemployment rate is predicted to surpass 8% by the fourth quarter – a number not seen since 1996.

The Sterling reacted to this news by falling 1/2% to the Euro to .8896, rising 3/4 top the Franc at 1.6625 and rising to the US Dollar to 1.413.

AUD / JPY

The Australian Dollar gave back some its big gains from Tuesday early in the session but later recovered after data showed that the Australian GDP reports shocked the market by showing that the economy contracted for the first time in eight years last quarter.

In Japan, the Yen was hurt when Bank of Japan board member, Miyako Sudo, said that he was unsure if the Japanese economy has hit rock bottom yet and pointed to the rapidly falling stock prices as one of the reasons. Giving traders even less confidence in the Yen than they already had.

At 5:30 GMT the AUD was up 1% to the USD to .6439 and the same to versus the Euro to 1.9515, up 2 to the Yen at 63.85 and down 1/2% to the KIwi at 1.2815. While the Yen was down 1% to the CHF to 84.27, down 1 1/4 to the Euro to 124.68 and down 1% to the USD to 99.27.

Chart – AUD/USD

These have been interesting days for the AUD/USD, which recently rejected an attempt down through some key support levels, including especially the rising line of consolidation shown in the chart below and also the flatline support at 0.6330, which was also rejected. This rejection and the strong follow up rally have bullish reversal written all over it, though for more confirmation, we'd like to see a move up through 0.6555 area resistance and/or the falling line of consolidation. As a background note, we again point out the relatively resilient AUD through all of the turmoil we have seen in recent months and despite the new lows posted by many global equity markets in recent days.

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Trade Online Forex with Major Currencies

EUR

Christian Noyer, the European Union Central Bank Governor, made some key comments today about the EU’s economic policy and as a result, online Forex brokers and investors traded the Euro sideways most of the day on Tuesday. Governor Noyer had said that the Central Bank was mulling over “unconventional” monetary policies in order to stem a dire economic situation in much of the Eastern and some Western European countries. This declaration tempered the Euro, which had earlier posted decent gains, because traders did not seem to like the vague reference to unconventional methods. If the politicians could learn anything in this crisis, it is that the markets do not like uncertainty – and the words “maybe” and “perhaps” are as uncertain as they come.

At 5PM GMT, the Forex brokers were trading the Euro up slightly to the GBP at .8967, slightly versus the CAD to 1.6277, slightly to the Swiss Franc at 1.481.

USD

After a dismal day on Wall Street, Monday, that saw the Major Stock indexes fall to levels unseen since 1996, the US Dollar continued seeing those trading and investing in the Forex fly to the relative safety net that the greenback offers. While the Dollar had a mixed day due to good news down under, it still posted nice gains against the Yen, its key rival for safe-haven status.

As of 5:10 GMT, the USD recaptured most of its losses to the Euro and was down ¼% to 1.2639 after having fallen off the 1.2677 level, the intraday high for the Euro. The Dollar rose versus the Yen nearly ¾ of a percent to 98.07 and was down slightly to the Pound at 1.4085.

AUD

The champion of Tuesday’s trading session with Forex online traders was the Australian Dollar, which benefitted from the Reserve Bank of Australia announced they will leave interest rates untouched for this month. The unexpected move, came with a warning though, that credit default swaps were straining the Aussie economy – which raises the ultimate cost for protection against Australian debt default.

The AUD was trading up 2.5% to the USD at .6454, 3 ¼% to the Yen to 63.31, 2.4% to the Canadian Dollar to .8341 and 1% to the New Zealand Dollar at 1.2914.

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Forex Trading is Tricky - Watch out Latest Update Here

The highlight of last week’s Forex trading session was the fact that despite the continued printing of money they don’t have, despite the continued failings of banks and government “takeover” of a major bank, despite the dire GDP and unemployment numbers that continue to grow, the US Dollar had a banner week. It defies all financial market logic that Forex traders and investors would pump up a currency that is so seemingly troubled. However one look at the field of competition out there for the dollar and you can understand why – there is no place to turn.

Japan’s economy is battered and bruised – the Online Forex world has all but abandoned the Yen because they see they economic climate worse today than it was in the 90’s – and it was really bad in the 90’s. The finance minister gets drunk at a conference and embarrasses the Japanese state – what should be embarrassing is the attempts by the Bank of Japan to hinder the Yens growth in the name of their exports, because now not only the exports are suffering, but also the Yen. Hey, if I were the Japanese minister I would have gotten plastered too – there is no much to be excited about in Japan (with exception to the Sushi and Saki, of course).

The EU is concerned about the Eastern bloc states – there are riots in the streets causing people to think that the iron curtain will once again be lifted. The single currency idea doesn’t look so good now that things are bad, huh? And to think, that over the weekend the EU heads stated there will be no financial bailout for the Eastern countries as a whole – and they expect this not to cause more problems? I am telling you this today, and know that you read it here first – the Euro currency is in bigger trouble than everyone thinks, and the reason for this is more because of political reasons than anything else. Forex traders and readers of Online Forex information sites do not see this factor – and they need to because if the Eastern bloc blows up – which is happening, there will be a war. As well, the Western states, also known as the PIGS (Portugal, Italy, Greece and Spain) are in dire trouble and the EU better have the same answer for them that they gave to the Eastern states – but chances are there are different rules for different member states and we are likely to see some handouts given to the PIGS sometime soon.

Anyway, Forex trading is tricky, as you can see- it’s not all about resistance and support levels and trading ranges – and it is for this reason that the US, with all their problems, continues to dominate and remain strong. Stay tuned for more – I might get into the business of war reporting before this crisis is through.

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