I Only Have US Dollars How Can I Sell Euros?

Trading in the Forex Market can be very profitable if you have knowledge and experience.  A small bit of knowledge can quickly move the profitability odds in your favor. You may not get rich, but you won’t lose your money. And with time you will become a successful trader.

A good foundation is the best way to build, like a skyscraper, without a good foundation, the building will eventually collapse.

To trade and make money in Forex, you need to understand what the markets are all about.

Currency trading is fairly simple to understand. There are two primary reasons why the value of a currency moves. The first is because of a “real” market, which is based on supply and demand.

For example, as outside investors or visitors wish to buy things within another country, they are forced to convert their domestic currency into the currency of the country in which they are buying. Similarly, as money leaves the country, people must sell their currency for the foreign currency they will need to spend or invest abroad. Exchanging currencies drives supply and demand, which causes currency value to increase or decrease. This is a very basic explanation, until there was an acceptable trading and clearing system, this was the how the markets moved. Many years ago, the markets worked based on the gold standard and all currencies were either gold (coins) or backed by gold.

Now the markets are traded through a global exchange where values are attached to currency based on demand, which today, has very little to do with visitors exchanging money to make purchases, a great deal of currency flows through central banks The primary reason the FX market exists is to facilitate the exchange of one currency into another for multinational corporations that need to trade currencies continually (for example, for payroll, payment for costs of goods and services from foreign vendors, and merger and acquisition activity). However, these day-to-day corporate needs comprise only about 20% of the market volume.  

80% of trades in the currency market are speculative in nature, based on economic and technical data in the hopes that the demand of that currency will increase or decrease, this is known as selling short or buying long. Central Banks no long move currency between countries, it is all done via computers and investors never take control of these funds, they are tracked by the global exchanges and by brokers.

Currency on the open markets is not bought and sold as you were in an Exchange at the Airport, but they are a miniature version of a global exchange. They have a value assigned to each currency and when you arrive at the airport with your USD you can sell them to get Euros and upon your return home you can sell your Euros at the Airport to get USD. Unfortunately, at the stand at the airport, you lose a lot per transaction because they have to cover their overheads and make profit on your transaction. That is why global exchanges and brokers do not deal in small quantities of currency.

The retail FX market is purely a speculative market. No physical exchange of currencies ever takes place. All trades exist simply as computer entries and are netted out depending on market price. For dollar denominated accounts, all profits or losses are calculated in dollars and recorded as such on the trader’s account. put on by large financial institutions, multibillion dollar hedge funds and even individuals who want to express their opinions on the economic and geopolitical events of the day.

Because currencies always trade in pairs, when a trader makes a trade he or she is always long one currency and short the other. For example, if a trader sells one standard lot (equivalent to 100,000 units) of EUR/USD, she would, in essence, have exchanged Euros for dollars and would now be “short” Euros and “long” dollars. To better understand this dynamic, let’s use a concrete example. If you went into an electronics store and purchased a computer for $1,000, what would you be doing? You would be exchanging your dollars for a computer. You would basically be “short” $1,000 and “long” one computer. The store would be “long” $1,000 but now “short” one computer in its inventory. The exact same principle applies to the FX market, except that no physical exchange takes place. While all transactions are simply computer entries, the consequences are no less real. This is how you sell Euros when you only have Dollars.

EUR/CHF Forecast January 20, 2012, Fundamental Analysis

EUR/CHF Forecast January 20, 2012, Fundamental Analysis
EUR/CHF Forecast January 20, 2012, Fundamental Analysis
The EUR/CHF pair ended a mixed session as usual, where the pair fluctuated heavily yesterday amid the heavy load of fundamentals and events from the euro area region and with the lack of fundamentals from Switzerland, where the pair was very volatile and fluctuated heavily.

Today more volatility and fluctuations are expected, as this week comes to an end and especially with the lack of major fundamentals and events from both economies.

Germany is due to release the Producer Price Index report for December at 07:00 GMT which is expected to hold at 0.1% rise on the month and on the year ease to 4.6% from 5.2%.

 

EUR/USD Forecast January 20, 2012, Fundamental Analysis

EUR/USD Forecast January 20, 2012, Fundamental Analysis
EUR/USD Forecast January 20, 2012, Fundamental Analysis
The EUR/USD pair ended a bullish session once again, where the pair gained sharply yesterday after the successful bond auctions from France and Spain, which witnessed lower yields and stronger demand, and in result markets rebounded on the data as investors were tracking the yields and demand for the longer-term maturities.

Today, with the lack of major fundamentals from the world’s largest economy and the euro-area region, markets are expected very volatile, while heavy fluctuations and downside corrections are highly possible, especially when this week comes to an end and no auctions are due today.

Germany is due to release the Producer Price Index report for December at 07:00 GMT which is expected to hold at 0.1% rise on the month and on the year ease to 4.6% from 5.2%.

The United States is set to end the week with the Existing Home Sales for the month of December at 13:00 GMT where they are expected to extend the gain with 5.2% to 4.65 million from 4.42 million.

 

Cast Your Vote on Greece

As a news analyst, it is my job to sort through the news, reports and private connections to find the real story and share that information with you, the reader. It is also my responsibility to analyze this material in a true and meaningful way without prejudice and preconceived notions.

For the past weeks, we have dealt with the EU debt crisis, which has overshadowed the small country of Greece and the news from Greece has been on the back burner, reaching the headlines every now and then, recently we have been more distracted by Italy and Spain. But Greece just kept simmering in the pot.

Well that pot is about to boil over and Greece has moved to the headlines of every news service in the world.

I find my problem very disheartening. Today, like everyone else I was going to write about Greece’s debt negotiations, the new “haircut”, (isn’t amazing how all these new words or definitions keep popping up, today everyone is having a “haircut” and then there is my favorite, austerity, you know it is a very old word, but has been used more in the last year than in the last decade.) Back to Greece.

I tried to come up with an article that presented a true picture of the negotiations between Greece and their debtors. I tried to come up with a possible bailout scenario. I tried to come up with a picture of the future of Greece’s finances. The truth is I could not even sort through all the headlines in the news today to get a clear picture on what was happening in Greece or if there was going to be a deal soon in Greece.

I thought perhaps, I might share with you, just some of the comments and stories that I found today, many contradictory, many more rumor then fact, many just confusing, but the fact was that I could not come and present to you any clear picture.

The Telegraph:                 He has reiterated that he wants any debt swap with private sector bondholders to be voluntary, and will meet the Institute of International Finance (IIF) today to continue talks.

Mr. Venizelos will also meet the “troika” of the EU, ECB and IMF on Friday. AFP is reporting that the IMF has given the green light for talks on new rescue loans for the country.

Reuters:               Turning up the pressure ahead of Thursday’s talks, Finance Minister Evangelos Venizelos told lawmakers that a large chunk of the bond swap must be agreed by noon on Friday and formalized before Monday’s meeting of euro zone finance ministers.

Yahoo:                 Greece warns significant progress needs to be made to reach a debt deal with private investors.

Reuters:               In Washington, an IMF spokeswoman said staff at the Fund had sought executive board approval for talks with Greece that might lead to a deal requiring “exceptional access” to IMF loans.

Greece already has exceptional access to IMF funding that allows it to draw more than 600 percent of its IMF quota and any further negotiations require fresh board approval.

Reuters:               The stakes could not be higher. The two sides must thrash out a deal within days to pave the way for Greece to receive a new infusion of aid and avoid bankruptcy when 14.5 billion euros ($18.5 billion) of bond redemptions fall due in March.

Even if a deal is struck rapidly, the paperwork will take weeks and Greece’s official lenders — the European Union and the International Monetary Fund — say the work must be cleared before funds are doled out from a 130 billion euro rescue plan they drew up in October.

Fox Business News: Greece is getting ready to launch talks Friday with international creditors on a second bailout package needed to help stave off bankruptcy as negotiations on a bond write-down plan continue, Greek Finance Minister Evangelos Venizelos said.

In comments to lawmakers Thursday, Venizelos said many of the details of the bond-swap plan, a crucial part of a EUR130 billion packages agreed by European leaders and the International Monetary Fund in late October, need to be finalized by Monday’s meeting of euro-zone finance ministers.
BusinessWeek: Greece plans to pay lenders 50 cents for each euro the government borrowed under the terms of a bailout plan agreed on Oct. 26. Its 4 percent notes due in August 2013 trade at about 27 cents. Fitch says an agreement would amount to a “default event” once implemented, while the International Swaps and Derivatives Association says it won’t trigger credit-default swaps bought by investors as insurance against the country failing to meet its obligations.

Reuters:               The talks ran into trouble last week over Greek demands for an interest rate below the 4 percent that banks were willing to stomach and a plan to enforce losses on investors.

A lower interest rate would push the actual loss investors take to well above the 50 percent level initially envisaged.

A 3.5 percent coupon demanded by Greece and its lenders, for example, would imply a roughly 70 percent net present value loss for investors, according to the Reuters Breakingviews calculator.

IBTimes:              Nearly a week after talks hit an impasse, the two sides remain bogged down over the coupon, or interest payment, that Greece must offer on its new bonds under the swap.

Athens and its foreign lenders offered a coupon of just over 3.5 percent during a two-hour meeting on Wednesday, but bondholders rejected that as too low, one source said. They were angling for a coupon of at least 4 percent, the source said.

Talking Greece:                PM Lucas Papademos threatened to activate the ‘collective act clause’ and force private creditors to participation, during his 3-hour talks with Charles Dallara.

EuroNews:          Greek Prime Minister Lucas Papademos has promised that a debt swap will be reached in time between his government and its creditor banks.

Papademos has sent senior officials from Athens to Washington to break a deadlock in talks that has prompted new fears of a disorderly default by Greece.

 

Now, can you make out a clear picture of what is happening in Greece, beside the fact that they are in dire straits, have no money, need to reach an agreement with their creditors real soon. My question to you is if Greece gets the bailout money, which surely will not be enough, the way their economy is going, what is the future for Greece, how they will dig themselves out of this mess or are they just buying more time. What will happen in 10 years from now when we go through another down cycle of the economy? What is your vote, will Greece reach agreements with their creditors, or will the IMF and EU fork over more money? Should Greece get bailed out or should they just swallow the medicine now and not push it off to their grandchildren? You tell me, I would love to know your thoughts.

GBP/USD Forecast Jan. 20, 2012, Fundamental Analysis

GBP/USD Forecast Jan. 20, 2012, Fundamental Analysis
GBP/USD Forecast Jan. 20, 2012, Fundamental Analysis
The pair advanced for the fourth session on Thursday with optimism in markets after French and Spanish successful bond selling which damped demand on the dollar.

Currently, the main focus is on European auctions to see the ability of euro area nations to raise money to repay debt. So far, auctions from euro area nations this week are satisfying.

France sold 7.965 billion euros of medium-term bonds on Thursday, where the yield of the 2014 bills retreated to 1.05% from 1.58% the prior auction, the 2015 notes yields fell to 1.51% compared with 2.44% reached at November’s auction and the 2016 securities also showed a drop in borrowing cost to 1.89% from 2.82% at November’s auction.

Similarly, the Spanish government auctioned 6.61 billion euros of debt maturing in 2016, 2019 and 2022, where the yield on the 10-year securities fell to 5.403% compared with 6.975% at November’s auction.

Moreover, Greece will resume talks for the second day with private sector debt holders after the halt of the negotiations on January 13, to reach an agreement over the size of losses to be bared by creditors to avert a possible default as early as in March. One finance ministry official said on Wednesday a deal could be reached with creditors by the end of the current week.

Regarding fundamentals, data from theU.S.showed that housing starts fell 4.1% in December from the prior 9.3% rise and building permits slipped 0.1% from the revised 5.6% soar. On the other hand, initials jobless claims improved to 352,000 in the week ended Jan. 14 from the revised 402,000 a week before. However, the pair was not much affected by the news.  

On Friday, theUnited Kingdomis set to end the week with December retail sales at 09:30 GMT to see the impact of the holiday season on Sales. Retail Sales excluding auto fuel are expected with 0.6% rebound on the month following 0.7% decline.

TheUnited States, on the other hand, is set to end the week with the Existing Home Sales for the month of December at 13:00 GMT where they are expected to extend the gain with 5.2% to 4.65 million from 4.42 million.

The data may affect the pair’s movement due its relevance, yet the pair will probably be more affected by the general sentiment which will focus on the latest developments from the euro zone. 

USD/CHF Forecast Jan. 20, 2012, Fundamental Analysis

USD/CHF Forecast Jan. 20, 2012, Fundamental Analysis
USD/CHF Forecast Jan. 20, 2012, Fundamental Analysis

The pair fell for the fourth session on Thursday with optimism in markets after French and Spanish successful bond selling which damped demand on the dollar.

Still, the main focus is on European auctions to see the ability of euro area nations to raise money to repay debt. So far, auctions from euro area nations this week are satisfying.

Francesold 7.965 billion euros of medium-term bonds on Thursday, where the yield of the 2014 bills retreated to 1.05% from 1.58% the prior auction, the 2015 notes yields fell to 1.51% compared with 2.44% reached at November’s auction and the 2016 securities also showed a drop in borrowing cost to 1.89% from 2.82% at November’s auction.

Likewise, the Spanish government auctioned 6.61 billion euros of debt maturing in 2016, 2019 and 2022, where the yield on the 10-year securities fell to 5.403% compared with 6.975% at November’s auction.

Moreover, Greece will resume talks for the second day with private sector debt holders after the halt of the negotiations on January 13, to reach an agreement over the size of losses to be bared by creditors to avert a possible default as early as in March. One finance ministry official said on Wednesday a deal could be reached with creditors by the end of the current week.

Regarding fundamentals, data from the U.S. showed that housing starts fell 4.1% in December from the prior 9.3% rise and building permits slipped 0.1% from the revised 5.6% soar. On the other hand, initials jobless claims improved to 352,000 in the week ended Jan. 14 from the revised 402,000 a week before. However, the pair was not much affected by the news.   

On Friday, the United States is set to end the week with the Existing Home Sales for the month of December at 13:00 GMT where they are expected to extend the gain with 5.2% to 4.65 million from 4.42 million.

The data may affect the pair’s movement, yet the pair will probably be more affected by the general sentiment which will focus on the latest developments from the euro zone.  

USD/JPY Forecast Jan. 20, 2012, Fundamental Analysis

USD/JPY Forecast Jan. 20, 2012, Fundamental Analysis
USD/JPY Forecast Jan. 20, 2012, Fundamental Analysis
The USD/JPY pair traded within the same range that dominated the pair’s movements in three weeks, where both the dollar and the Japanese yen are still losing grounds against other majors.

The Japanese yen retreated against the euro and higher-yielding currencies sue to the risk appetite that returned to the financial market.

On the other hand, the greenback maintained its two days decline against its major counterparts, where sings of recovery from the U.S. economy supported confidence between investors which reduced demand for safe haven currencies.

Rumors that the IMF is about to increase its resources by $600 billion in order to help the fight against the debt crisis supported the euro to record more gains against the dollar, while the rally in the Asian stocks helped restore confidence in the global market.

On Friday at 04:30 GMT, the Japanese economy will release the All Industry Activity Index for November, where the prior reading was 0.80% and it’s expected to come at –0.9%.

At 05:00 GMT, Japan will issue the Coincident Index for November, where the previous reading was 90.3; on the other hand the Leading Index for November had a prior reading of 92.9.

The U.S. economy will report the Existing Home Sales for December, where it’s expected with 3.7% rise to 4.65 million from 4.42 million.

NZD/USD Forecast Jan. 20, 2012, Fundamental Analysis

NZD/USD Forecast Jan. 20, 2012, Fundamental Analysis
NZD/USD Forecast Jan. 20, 2012, Fundamental Analysis
The NZD/USD pair dropped early Thursday after the New Zealand dollar retreated against other majors due to the decline in CPI during the fourth quarter, while the greenback maintained its two days of losses against other majors.

The New Zealand dollar drooped early Thursday after the fourth quarterly consumer price index dropped by 0.3% and retreated to 1.8% over yearly basis from the previous 4.6%.

The unexpected figures for the inflation in New Zealand reduced expectations that the Reserve Bank of New Zealand could hike rate during next week meeting, where the Kiwi lost ground against the greenback.

On Friday, the U.S. economy will report the Existing Home Sales for December, where it’s expected with 3.7% rise to 4.65 million from 4.42 million.

AUD/USD Forecast Jan. 20, 2012, Fundamental Analysis

AUD/USD Forecast Jan. 20, 2012, Fundamental Analysis
AUD/USD Forecast Jan. 20, 2012, Fundamental Analysis
The AUD/USD pair retreated for the first time in three days, after the Australian employer unexpectedly cut jobs in December, which dragged the down despite the current dollar weakness.

The Australian dollar was not able to benefit from the current rally in the Asian stocks in addition to the market sentiment which supported the risk appetite due to the latest signs of recovery from the U.S. economy.

Australian employers have cut jobs during December by 29.3 thousand, which ended the three days rally for the Aussie against the dollar, while the US dollar continued its weakness against other majors as risk appetite continued in the global market supported by the rally in stocks.

On Friday at 00:30 GMT, the Australian economy will release the Import Price Index for the fourth quarter, where its expected to come at 0.6% higher than the prior reading of 0.0%.

The Export Price Index for fourth quarter is expected at the same time, with a previous reading of 4.0% and it’s expected to come at –2.0%.

The U.S. economy will issue the Existing Home Sales for December, where it’s expected with 3.7% rise to 4.65 million from 4.42 million.

Euro advances on IMF and Greece, ahead of France’s and Spain’s bond auctions

Markets are rising quietly ahead of the France’s and Spain’s bond auctions on hopes Greece will soon reach an agreement with bondholders while the International Monetary Fund considers expanding its lending resources to help the euro-zone countries fight the debt crisis.

The IMF is seeking to expand its lending resources by $500 billion yet the U.S. and other countries rejected the idea, considering that the Europe must solve this problem with its own money. Meanwhile Greece might reach an agreement with bondholders over the size of the losses to avoid a messy default.

The upbeat earnings report from Goldman Sachs and EBay helped keep sentiment positive, while earnings from Bank of America, Morgan Stanly, Google, Microsoft and Intel will keep investors cautious, especially after the New York based Kodak filed for bankruptcy as consumers turned from film to digital technology.

Asian stocks advance today on IMF and China, as world’s 2nd largest economy considers easing the capital requirements and is letting its five biggest banks boost lending to avoid hard landing risks. Nikkei 225 rose 1.04% yet the S&P/ASX 200 fell 0.07% after Australia’s employment unexpectedly fell in Dec.

In Europe shares advanced on Greece and IMF hopes ahead of the France’s and Spain’s long-dated bond auctions. Portugal’s yields fell yesterday after a successful auction easing some of the worries ignited since S&P’s mass debt rating cuts in Europe. DAX rose 0.04% while CAC 40 gained 0.49%.

Today the ECB will release its monthly report, while the US will be releasing its CPI index, the housing starts and building permits data along with the weekly jobless claims, Philly index and EIA crude oil inventories. In Europe, France will sell 9.5 billion euros of debt while Spain will sell 4.5 billion euros of bonds.

The euro is seeing some gains trading around 1.2888 while the pound is trading with a slight upside momentum around 1.5437. The dollar index is slightly falling trading around 80.36, while the yen is strengthening trading around 76.70. The AUD is weakening following the jobs data trading around 1.0395.

As the US dollar lost its appeal commodities found support for another day where crude is trading with gains around $101.65 compared with the lowest at $101.01 while gold is around $1665.20 from the lowest at $1655.80 as eyes are on Europe.

EUR/USD Forecast January 19, 2012, Technical Analysis

EUR/USD rose straight up for the Wednesday session as traders celebrated more rumors of free money for the Greeks in the form of some kind of bailout being put together by the IMF. The bond auctions are a mixed bag, and the German Bunds continue to attract a lot of money. Because of this, we have to question the underlying strength of this move.

The pair is most decidedly in a down trend, and the pop could very well be the start of a nice correction that will allow us to sell at higher prices. Certainly anyone who is buying Euros at this point is running on more “hopium” as we saw last year, and to think the trend is about to change is being a bit premature.

Because of this, we are very interested in seeing what happens if we reach the 1.20 area. This area should be very resistive, and we would sell any signs of weakness in a heartbeat. We will not buy at this point – there are far too many reasons not to.

EUR/USD Forecast January 19, 2012, Technical Analysis
EUR/USD Forecast January 19, 2012, Technical Analysis

USD/JPY Forecast January 19, 2012, Technical Analysis

USD/JPY fell for the session on Wednesday as the Dollar got sold off in general. The pair currently is sitting on top of a nice support area at 76.50 level and the market simply hasn’t moved much over the last couple of weeks.

The Bank of Japan is always a threat to intervene, and as a result selling isn’t going to be an option at this level. The market could be bought if we see a break higher as there is an automatic backstop because of the BoJ. The 78.25 level seems to be the top of the range, so we would only get involved in this pair for a short term trade as the market is so tightly wound at this point.

USD/JPY Forecast January 19, 2012, Technical Analysis
USD/JPY Forecast January 19, 2012, Technical Analysis

GBP/USD Forecast January 19, 2012, Technical Analysis

The GBP/USD pair shot straight up on Wednesday as traders took on more risk for the session. However, the pair is currently at the bottom of a massive consolidation pattern from just a couple of session back, and will find the 1.55 level to be very resistive. Because of this, we actually prefer the downside at the moment, but will have to wait in order to see if we get that signal.

The pair did manage to break over the shooting star formed on Tuesday, and this is a very bullish sign. With that being said, it looks like the market will just now be looking at serious resistance, and the area just above could be a real fight. Because of this, we cannot buy this pair.

Also, we have to take into account that the British economy will continue to suffer because of the issues in the EU. The European Union will be going into recession this year, and as the Brits sell 40% of their exports to that area, this will certainly have a detrimental effect on the health of the UK economy. Adding to this concern is that fact that the UK banks are all knee-deep in the EU mess, and this will certainly cause pain at home as well.

The US on the other hand is seeing expansion, and this should continue to keep the Dollar attractive in comparison. While this pair is normally a “risk on” pair, the truth is that relationship may decouple for a while as the true fundamentals actually favor the US dollar for once.

Looking at the charts, we need to see a breakout above the 1.58 level to be wholly convinced of the upside potential, and will be looking for selling opportunities between here and there. The breakdown below the 1.53 level would be massive as it would be the longer-term head and shoulders giving way for a move down to the 1.40 level or so. With this in mind, we like selling rallies going forward, and would become very aggressive sub-1.53.

GBP/USD Forecast January 19, 2012, Technical Analysis
GBP/USD Forecast January 19, 2012, Technical Analysis

EUR/GBP Forecast January 19, 2012, Technical Analysis

EUR/GBP rose for the Wednesday session as the Euro did well in general. The Pound also gained against the Dollar, and as a result the “risk on” trade came back. This pair has been in a downtrend as of late, and this latest move may have been the pullback people were waiting for. After all, the daily candle is a bit of a shooting star, and it is near the 0.8250 level, an area that has seen reactions recently. With his in mind, we are willing to sell on a break of the session lows from Wednesday. We are not buying the pair at this point in time.

EUR/GBP Forecast January 19, 2012, Technical Analysis
EUR/GBP Forecast January 19, 2012, Technical Analysis

USD/CHF Forecast January 19, 2012, Technical Analysis

USD/CHF fell hard during the session on Wednesday as traders sold off the US dollar. However, the 0.93 level is just below, and this was the site of serious support previously. Because of this, we would hesitate to sell at this point in time. The level would have to be cleared on a daily close in order to think of selling.

The area is however, a great place to looks for support. If we get it on a 4 hour chart or above, we are willing to have a go on the long side in this pair, knowing that the road ahead is probably choppy but biased to the upside. We are buying on supportive candles going forward.

USD/CHF Forecast January 19, 2012, Technical Analysis
USD/CHF Forecast January 19, 2012, Technical Analysis

EUR/CHF Forecast January 19, 2012, Technical Analysis

EUR/CHF had a fairly wild day on Wednesday as the market first rose, and then fell. The Swiss National Bank has imposed a “floor” at the 1.20 level in which we expect them to intervene. In fact, they said they would. Because of this, you have to be very brave to short this market right now, and we are willing to take the other side of that trade. On the first sign of supportive action, or if we drop below the 1.20 level – we would consider buying a small position in this pair.

EUR/CHF Forecast January 19, 2012, Technical Analysis
EUR/CHF Forecast January 19, 2012, Technical Analysis

AUD/USD Forecast January 19, 2012, Technical Analysis

AUD/USD broke out on Wednesday from a triangle that had kept it under pressure for the last month or so. The solid close at the end of the session foretells higher prices, and the market looks set to continue the rise as we are breaking the very last bits of resistance at the close. The close of the candle is solid, and the top of the range is where we stand.

The 1.04 level was significant resistance, and it appears that the level should be supportive going forward as well. The triangle that was just broken actually measures all the way up to 1.12, and because of this – we have become “buyers only” of this pair as of today. On a pullback and support at 1.04, we are buying. On a break of the Wednesday high, we are buying. Selling cannot be done as long as we stay above the 1.04 level mentioned above.

AUD/USD Forecast January 19, 2012, Technical Analysis
AUD/USD Forecast January 19, 2012, Technical Analysis

USD/CAD Forecast January 19, 2012, Technical Analysis

USD/CAD fell for the Wednesday session as the Dollar got hit around the world. The “risk on” scenario came back into play, and people bought many of the “riskier” currencies. However, the pair is currently at the bottom of a massive symmetrical triangle that has support below at 1.01 as well. Because of this, the pair looks much supported at this point.

On a daily close below the triangle, we still would have to wait…..until the pair can break below the 0.99 level as it is the bottom of support. The pair will rise if there are bad headlines coming out, which seems to happen all the time. We are willing to buy on supportive action at this point, but are very aware of the downward pressures.

USD/CAD Forecast January 19, 2012, Technical Analysis
USD/CAD Forecast January 19, 2012, Technical Analysis

NZD/USD Forecast January 19, 2012, Technical Analysis

NZD/USD rose for the session on Wednesday as traders bought the “risk on” trade globally. The Kiwi is always sensitive to these types of moves as it is representative of so many different commodities. The pair was always going to rise as the stock markets around the world rose, and the commodity markets as a whole did fairly well.

The 0.80 level was a massive resistance area, and the fact that the market managed to close so far above it for the session signals that this uptrend is set to continue in this market. The Dollar has done fairly well against most currencies lately except the so-called “commodity dollars” such as the New Zealand dollar, and as a result shows that the commodity trade is very much alive and well. If this pans out – the NZD/USD should be set to rise for the foreseeable future.

As long as we stay above the 0.80 level, this market is suddenly a “buy only” one. The health of the Kiwi is obvious, but the headline risks could have a say from time to time. The close looks very good at this point, and the 0.82 level should be the next area that the market tries to test going forward.

The trade for our money going forward is to buy on the dips as long as we are above 0.80 or so. We think this area should be supportive in the near term, and the level will be considered vital by a lot of traders. With this knowledge, we are very interested in seeing how price reacts to the level.

On a break above the highs for Wednesday shows that the momentum is picking back up, and if we get above that high – we are long of this market as it should signal more strength ahead. The market does look set to break to higher levels, so we aren’t ready to sell in this market at all. Buying short-term dips and new highs is the way we are going to proceed over the next several weeks in this pair.

NZD/USD Forecast January 19, 2012, Technical Analysis
NZD/USD Forecast January 19, 2012, Technical Analysis