Trade of the Day

  • USD/CHF Takes a dive- The USD/CHF took a dive today with stronger than expected CHF PMI numbers being released. The forecasted figure was 59.6, however, the actual figure was released almost 3 points higher than 62.8. In addition, strong European data and weak US ISM Manufacturing Prices may have also fueled this draw down.

    usdchfdrop
  • BoJ injects 800 billion yen-

    Today, the GBP/JPY continued its strong movements with a 375 pip drop. Starting the day at a high of 229.09, it began its descent to the lowest point at 225.32. News that the Bank of Japan injected 800 billion yen into the financial system was the reason. It nearly erased this drop in two hours with a 300 pip upward movement. It has since traded at 226 on anticipation of the interest rate announcement tomorrow.

  • GBP/JPY closes out the entire week- Every day this week, the GBP/JPY dominated the currency markets in largest movements. The only difference today was that it moved up instead of down. Hitting a low of 219.27 early in the day, the pair soon began its near 1000 pip movement. News that the Fed decreased its discount rate started the reaction. Confidence was restored in investors viewing the move as the Fed’s management of recessionary risk. They moved the DOW up more than 200 points. With that, traders could stomach risk a bit more reversing the losses in the GBP/JPY pair.
  • GBP/JPY for the third-

    For the fifth straight day, the GBP/JPY has made the largest moves of the major pairs. Today’s movement was only a little over 200 pips. I say only because after hitting its peak on Saturday at 243.97, it’s dropped more than 1000 pips. The pair hit its lowest point today at 231.66 after weaker economic data was released in Britain. Recent downturns in financial markets at the hands of the credit crisis also played were a factor.

  • GBP/JPY for the second time in a row-

    For the second day in a row, today’s money maker was the GBP/JPY. After the pair dropped by more than 300 points this past weekend, it continued the trend. This morning’s weaker than expected inflation data in Great Britain can be partly attributed to this. A softer economic picture pushes down expectations of another BoE rate hike further down. The GBP/JPY started the day at a high of 237.43.

  • GPD/USD- Anyone going short on the GBP/USD into the weekend saw great gains. Even if you entered the trade ahead of the 200 pip gain early Friday morning, you would have still made a profit of 100 pip. After hitting its highest point on Saturday at 2.0389, the pair began its slide toward this morning’s low point of 2.0083 marking a nice 300 pip return to those shorting the GBP/USD.

  • GBP/JPY...again-

    The largest movement for the second day in a row was the GBP/JPY. The pair erased yesterday’s 400 pip gain by crashing down on news that BNP Paribas froze three investment funds with positions in US subprime mortgages. France’s largest bank prevented withdrawals after claming it couldn’t fairly value investors’ holdings.

  • Recent EUR/USD strengthening- Since today’s news of the BNP Paribas situation, the EUR/USD has been dropping slowly. Expect this trend for the next day as global markets continue to become anxious about the subprime crises and its recent developments. These concerns strengthen the USD because more investors revert to its safe haven status. Until these recent worries subside in financial markets or the EU posts strong economic data next week, go short on the EUR/USD.
  • GBP/JPY...again-

    The largest movement for the second day in a row was the GBP/JPY. The pair erased yesterday’s 400 pip gain by crashing down on news that BNP Paribas froze three investment funds with positions in US subprime mortgages. France’s largest bank prevented withdrawals after claming it couldn’t fairly value investors’ holdings.

  • GBP/JPY- The GBP/JPY made a 400+ pip movement in the wake of a BOE inflation report released early today. Record oil costs and rising food prices pushed the inflation above the Bank’s comfort zone. Ahead of the release, the pair traded at its lowest point of the day at 239.83.  In nearly nine hours, the pair bounced 400 points upward to its highest point of 244.01

  • AUD/JPY-

    With eyes glued to the Fed’s rate decision and subsequent press release , Australia’s interest rate announcement didn’t get enough attention. As I recommended yesterday, the AUD/JPY proved a great opportunity; one of the best of the past 24 hours.

  • AUD/JPY-

    With eyes glued to the Fed’s rate decision and subsequent press release , Australia’s interest rate announcement didn’t get enough attention. As I recommended yesterday, the AUD/JPY proved a great opportunity; one of the best of the past 24 hours.

  • EUR/JPY- Today’s money maker was the EUR/JPY pair. Starting the day at a low of 161.54, it hit a high of 163.48 a few minutes past 12PM (ET) marking almost a two hundred pip movement. The ECB’s Trichet gave the euro some strength by pledging “strong vigilance” toward inflation this morning. After leaving the 4% rate untouched today, markets interpreted his comments as signal for a rate increase at the central bank’s next meeting. It’s important to watch whether this pair’s momentum will continue with an upward trend toward last week’s levels.
  • CAD/JPY- Today’s uncertain markets provided a lot of opportunities for traders. One of the best proved to be the CAD/JPY pair with close to a 300 pip movement. Overlooking the potential for a volatile yen due to more risk-aversion, traders were buying the pair closely related to oil. With oil hitting its one-year high above $78, economists question whether supplies can match the surging demand. Today’s US crude oil inventories decreased by 6.5 million. The pair’s lowest level was at 109.93 early morning and now it is trading at its highest point of 112.70.
  • GBP/USD- With another slow day passing, the GBP/USD saw some of the largest changes in prices. After starting at 2.0305, the pair soon dropped to its lowest level at 2.0264. After regaining some strength, it reacted to some mixed US indicators and moved down. A strengthening returned in part to the record consumer confidence figure released by the US. Riding on this momentum, it hit its highest level of the day at 2.0377 marking a 100+ pip movement. Larger movements may continue as the pair looks to return to its upward trend of the past month.
  • The carry trade looks good again- Gaining nearly 200 pips, the pair to trade today was the EUR/JPY. It marked a reversal in the unwinding carry trade of the past week. A few factors are responsible. This weekend’s voting results showed the prime minister’s party lost a majority in the upper house election for Japan. Also, interest rate futures have shifted to expectations toward a pause during the central bank’s August meeting. Weaker economic data is responsible for this. And if world financial markets keep with less volatility, this trend may continue.
  • Strengthening USD- Today proved to be a great day for anyone going long on the USD. US 2nd quarter GDP estimates were already looking optimistic at 3.2% especially when compared to the first quarter’s slowing of 0.6%. But those estimates proved conservative today at 8:30 am when GDP posted at a strong 3.4%. Opening positions yesterday was key as most gains were made before the announcement.
  • Weakening CHF- The Swiss franc is experiencing a weakening across the board. Since the day began, it has lost to all major currencies. Why? As those major currencies point toward more rate hikes, the spread between the Swiss rate and those will stay the same. With last Friday's PPI showing no change, the probability that the Swiss bank will increase by more than 25 basis points to narrow the gap is small. The GBP/CHF posted the largest gains of the day so far with close to a 200 pip move in the pair.

  • GBP/JPY Finally breaks 250!- With the GBP/USD gaining further gound and hoping to hit 2.05 by the end of the week, the GBP/JPY cross has been shooting up as well. It finally broke the much awaited 250 mark today.

    The View:
    gbpjpybreak
  • CAD Interest Rate- The recent strengthening of the CAD across the board can be accounted to the speculation of a rate increase. As expected, the Bank of Canada increased rates by 25 basis points to 4.50%. Since this rate was already priced into the current trading price of the USD/CAD, the pair saw a nice bounce back towards normal trading rates. (1.05-1.06)

    The View:
  • Post PPI GBP Rally- The U.K PPI data was released this morning at 4:30 am EST. The PPI was released at a moderately high 0.6% for input and 0.2% for output. PPI serves as a leading indicator of consumer inflation. A higher PPI is usually a sign of inflation and a possible rate hike in the future. These numbers served as a spark that further ignited the already bullish GBP.

    The View:
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    eur/gbp
  • CAD/JPY Smooth Move Up- The CAD/JPY pair rallied over a 150 pips over the span of 12 hours due to various factors.

    The Reason:
    Oil rose near its 10-month high due to pressure from Nigeria and US refinery Risks. In addition, the Canadian Employment change and Unemployment rate were released this morning at 7:00, both showing positive growth in the economy with a higher than expected employment change, 34.8K from 17.5K, and a steady 6.1% unemployment rate. All three factors can be accounted for the sudden rise in the Canadian Dollar across the board.
  • NZD Current Account- New Zealand current account released helped the NZD move up from its recent drop against the Yen. After yesterday's better than expected trade balance numbers, traders wasted no time in longing the pair. The forecast was -2.47 billion and the actual figure was released at a moderate -2.22B. This helped the NZD move up to the 94 range after its recent drop to the 92 range. This quiet 200 pip move may have occured as a reaction to the recent strengthening of the Yen. Current outlook on the NZD/JPY looks bullish until further possible intervention from the RBNZ.
  • GBP/USD Multiple Moves- This morning turned out to be heaven for intraday traders with the BoC statement being released at 7:30 am and the US ISM numbers being released at 10:00 am. The GBP/USD pair went for a wild ride with the release of the interest rate statement and followed a quick drop after the release of positive ISM numbers.

    The View:
    gbp statement
  • GBP/JPY Breakout- The GBP/JPY pair breakout to a 100 pip rally early this morning as a result of a continuation triangle formation. In addition, strong GBP construction PMI and the USD still being under tremendous pressure resulted in the cross breaking yesterday's high. Traders should look for a technical correction soon in the pair and the outlook for the pair should be bearish for rest of the day.

    The View:
    gbpjpybreak
  • EUR/JPY Strong Falling Wedge- The EUR/JPY conformed to the Falling Wedge Pattern this morning with a drop of over a 100 pips. The drop in the EUR/JPY pair can also be accounted to the strengthening of the Yen due to the decrease of carry trades as a result of the situation in the subprime market. Investors see a possible fall out of rates and currency depreciation as a result of the Bear Stearns situation.

    The View:
    eurjpyfalling

    by Sumant Yerramilly
  • NZD/JPY Scalping Opportunity- The NZD/JPY pair has been a great pair for scalping over the past week. It has mainly stayed within range. (30-40 pips) Traders were able to capitalize on the reversal signals released for this pair and comfortably made a profit by hedging the pair. In addition, as shown below Forex is an ideal market for hedging since many pairs are often negatively correlated and stay within a short range.

    The View:
  • Indicators prove to be powerful- The Reason:

    There were many important economic indicators that were released for the Euro, Cad, and USD.

    The EUR/JPY moved down over 120 pips with constant terrible EURO economic data being released. The German current account and French trade balance came to be worse than expected. In addition, the JPY eco watchers survey, survey of the economy, came to be below 50.

  • GBP slips- Since the start of the day, the GBP/CHF has taken a nosedive; it lost close to 200 pips in 12 hours of trading. After hitting its highest level at 2.4739 during the early morning, the pair is trading around 2.4570 at the moment. With no economic indicators from either pair to trade on, the market most likely reacted to the pound’s ascension toward a 6 year high.Traders were not able to break the 2001 high as profit takers began to exit their positions.

  • Poor Retail Sales sparks USD/CAD- As posted in my trade recommendations, the Canadian Core Retail Sales were released today at 8:30 am EST. The retail sales as I predicted came out at .5% lower than the forecasted figure. In addition, unemployment claims had also increased by 12k. With two high impact poor economic indicators being released for the CAD, the USD/CAD jumped up over 100 pips in a span of 5 hours.

    The View:
    usdcadretail
  • GBP Minutes Prove Strong- The GBP MPC minutes were released this morning at 4:30 am. The minutes entail a voting cast of the members views on a possible rate hike in the near future. The previous vote cast was 9-0 kill, 9 against a rate hike and no one in favor for a hike. This morning's minutes were expected to have a vote of 7-2, 7 against and 2 in favor. However, the actual figure was 5-4, giving traders hope for a possible rate hike and driving the GBP up across the board. The 5-4 was not only surprisingly but extremely hawkish, hinting a possible rate hike in July.

    The View:
  • Bank of Japan: No Rate Hike- The Reason:
    There was no surprise when the Bank of Japan decided to keep rates at 0.5%, however, the Yen took a dove with comments made by the Governor of the Bank of Japan Mr. Fukui. He stated that a possible rate hike in July is not a 100% probable, adding to the fact that interest rate will "gradually" rise, giving traders a more bearish outlook on the Yen.
  • Poor New Zealand Retail Sales-

    The New Zealand Retail Sales figures were released last night 6:45 pm EST. The previous figure was a healthy 1.3%, however, this month’s forecasted retail sales was expected to be completely flat at 0.0%. The actual released number was -1.2%, resulting in the NZD taking a substantial hit.

  • Dollar Strengthens against Euro on Sales data- The US dollar began strengthening against the Euro early yesterday morning as investors expected stronger retail sales and inflation data. The USD continued this strengthening trend as US treasury prices fell. As a result, the Euro hit a two month low in morning trading falling from yesterday’s high of 1.3364 to 1.3270.
  • RBNZ intervention big market mover-

    The Reserve Bank of New Zealand intervened in the Forex Market last night to protect the NZD by major sell offs of its currency. This weakened the NZD across the board, dropping the USD/NZD a 100 pips from its all time high.

  • RBNZ rate hike draws attention- For those of you traders who were able to read my recommendation and open positions just in time, it sure did pay off. The RBNZ decided to increase their interest rate from 7.75% to 8.00% which shot up most NZD pairs. This can be attributed due to the fact that most of the market was in the grey area as to whether or not the RBNZ would in fact increase their rates. Thus, when the rate hike was announced, all NZD pairs went flying across the board.
  • A busy morning for USD Traders- Several economic indicators were released today, some of which have greatly impacted the USD this morning. Today, I will mainly focus on the impact of the news releases on the USD/JPY pair. There were three main indicators that resulted in the upward movement of the USD/JPY pair: Nonfarm Employment Change, Personal Spending m/m, and ISM Manufacturing Index.

     

  • The AUD/USD pair hits 17 year high-

    The AUD/USD pushes for 17 year high

    By Sumant Yerramilly

     The Australian dollar rallied up this week to reach a 17 year high. Traders pushed the AUD/USD pair over resistance levels and broke news highs. In addition, gold futures were up as on June 5, 2007 resulting in a positive upward movement for the AUD.

  • The Euro Peaks due to PPI numbers and ECB statements-

    The Euro peaks with PPI numbers and ECB statements

    By Sumant Yerramilly

    The Reason:

     Today, the Euro rose upon the release of higher than expect PPI numbers. PPI measures the rate of inflation experienced by manufactures when purchasing goods and services.

  • Australian GDP Proves Stronger than expected-

    Australia GDP numbers boost currency across the board

     The Reason:

     The Australian GDP was release on June 5th at 9:30 pm. The actual number was .6% more than last quarter’s GDP number. (1.0%) Traders were quick to react to the positive news and boosted the currency across most pairs.

     The View: