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Forex Market Outlook 10/25/11

By Mike Conlon, ForexNews.com on Oct 25, 2011

Well it looks like the market is unaware that there is major risk potential in the marketplace as stocks and commodities took off yesterday and it was “game on” for risk appetite. As a result, the Euro as well as the commodity bloc currencies moved higher despite the Euro debt decision due out tomorrow.

Does the market know something that we don’t? As often is the case, the answer is simply “no”. What the market does know is that it wants to take on risk and wants to buy stocks (especially large fund managers who have posted less than stellar returns) as corporate earnings have been largely better than expected. Throw in higher Chinese PMI data that showed that they aren’t slowing entirely and you have a recipe for gains.

Forex Market Outlook 10/21/11

By Mike Conlon, ForexNews.com on Oct 21, 2011

The market has been range-bound headed into the weekend, but man, those ranges are pretty big! I was surprised as I thought we’d see the ranges tighten up but that hasn’t been the case. Yesterday, the markets made huge moves as various news trickled out regarding the Euro debt crisis.

It is times like these when I tend to be more cautious, as it is difficult to know when news may hit or what its impact may be. Yesterday, the markets were selling off as risk aversion picked up throughout the early US session, only to completely reverse after “news” came out that the size of the rescue plan is going to be in the magnitude of $1.3 Trillion, with a “T”. That is encouraging news for the market, as in this case more is better.

Forex Market Outlook 10/20/11

By Mike Conlon, ForexNews.com on Oct 20, 2011

This morning all eyes are on Athens where the Greek rioters are protesting against further austerity measures which are to be voted to ensure that Greece is taking the steps necessary to continue the bailout discussion. The Troika will be reporting the economic state of affairs in Greece but so far the sentiment has been that that was Greece has done is insufficient to date.

Forex Market Outlook 10/18/11

By Mike Conlon, ForexNews.com on Oct 18, 2011

With the overhang of the realization that indeed Euro zone leaders will not have a resolution in place by next week like the G-20 leaders asked for, it is now questionable what exactly Merkozy were referring to when they claimed to be able to have something ready by early November. Is their timetable still in play? From where I sit, it doesn’t seem likely.

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Economy Recovering? This Indicator Seems to Think So!

You know, when an economy does start to recover, it’s not widely known at the time. In fact, the news will still be as full of “gloom and doom” as ever even when it starts.

So you won’t know when the economy is turning by listening to the nightly news. So what can you look to?

Well, here is one widely watched economic barometer that institutional investors have used throughout the years. What is it? Copper

Now you may think, “What in the world does the price of copper tell us about the economy?”

Canadian dollar will Continue to Suffer from the U.S. Slowdown!

Have you ever seen someone make a mistake and not only do they suffer for it but someone else does as a result also? Well, this is exactly what’s happening to Canada right now.

You see, most of last year, you could say that the Canadian dollar was falling because of falling commodity prices. Since Canada exports so many widely used commodities like oil and lumber, when prices fall, so do their profit margins. It costs them about the same amount to produce the product but what they can get for it in the market is determined by where those commodities are trading at the time.

USD/CAD Pushes Towards 1.30 Once Again!

http://www.mywealth.com/blog/sites/default/files/u3/usdcadtrade.JPG

Two Long Term Potential Breakouts About to Happen!

Two potential long term breakouts are emerging in the most unlikely spots…the yen carry trade: EUR/JPY and NZD/JPY

Everyone has been used to yen strength this year and everyone has been accustomed to the idea of the “carry trade” selling off for even longer.

So if this breakout occurs in the upcoming days to weeks as I suspect it will, it will catch many traders off guard. There are still a ton of traders “short” on this trade that will be caught on the wrong side of the trade and will have to reverse their positions.

Also, there will be many former “carry traders” that have given up on the concept and will have written it off by now as a strategy. It’s about that time when these new, fresh breakouts occur.

Thoughts for the Intra-day traders out there…

A couple of days a week it seems like there are low momtenum days in the market. Today appears to be one of those days.
If you’re a swing trader or a long term carry trader, then this would not matter.

However, if you are into short term trades, then you need momentum type moves NOW and not days from now. There’s not one major currency pair up or down even 1% today. So to me, that constitutes a lack of momentum for the day unless that suddenly picks up.
For the short term trader, momentum (strong, quick trending moves) are your friend…and a lack of momentum (creeping trends or dull ranges) can be your enemy.

120 Billion Reasons to Sell the Yen!

This past year, one of the few financial instruments in the world was headed to the moon. Which one was that? The yen!

Yeah, the carry trade unwound which caused money to flow away from high yielding currencies and back into low yielding currencies like the yen.

Investors became risk adverse with their money. They poured it into things that had been beaten down for years because it seemed to be a safe place to run to. Thus the yen was a huge beneficiary during this ultimate “fear factor”.

However, recently I started talking to you about a possible turn coming in the yen and that the yen party was about to come to an end soon.

Things go from “Bad to Worse” in Japan

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