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As has been mentioned, in September in the financial markets expected - high volatility. This is due to the situation in Syria, the Fed meeting, the next issue of the U.S. debt. Market participants return from holidays, seasonal factors cease to influence the quotes and the currency markets with market makers are gradually coming volumes. As a rule, the markets are trying to advance in prices lay the probability of certain events. Current early fall - is no exception. In anticipation of the key battles of the participants are trying to act now. After the Foreign Affairs Committee of the United States adopted a draft resolution approving strikes against Syria, the probability of a storm on markets in financial assets has increased substantially. At this point of the draft resolution would have the whole Senate vote. It will be next week, as long as the players again will shift attention to economic factors.
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Yesterday the Russian tracking system recorded the launch of some ballistic objects. This information will be immediately affected by the financial markets. Short-term demand for the dollar was strong, and the stock markets have experienced selling pressure. The entire financial world is in suspense, waiting for the development of the Syrian conflict. Robert Menendez, who served as chairman of the Foreign Affairs Committee of the Senate of the United States at the beginning of the hearing of the Senate said he supported the initiative of the President of the country to strike at Syria. The main argument Menendez was a deep conviction that it is necessary to show the world that the United States does not intend to keep a hand with the use of weapons of mass destruction. It should be noted that the leaders of both houses of Congress supported the decision of the president.
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In currency trading on Tuesday, the European single currency continues to lose weight. Apparently, the purpose of the players on the reduction of the euro is a mark of 1.2750 . Market returns military history. U.S. forces and their allies can begin to aggressive action on Wednesday, French President Francois Hollande. In contrast to other countries, France is inclined to consider participating in strikes against Syria. The development of military conflict will result in an increase in instability and volatility in the financial markets. Make any definite and clear predictions in these situations is pointless.
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The past week was marked by the strengthening of the U.S. currency. Bearish on the dollar had to surrender their positions. This demand for the U.S. currency may be caused by the expectations of the September meeting of the Federal Reserve, as well as positive data on the U.S. economy. Today, in the states of the output for the occasion. In this regard, the currency market players will be focused on the data from Europe. On the strong volatility on Monday should not count.
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On Thursday, the British Parliament was voting on the situation in Syria. With a small margin of 13 votes, the procedure is concluded in favor of the opponents of the outbreak of hostilities. The Prime Minister said the UK would not go to the aggressive actions against Syria as long as the decision is not supported by a majority in the UN Security Council. In general, the stress of the situation in the East gradually subsides. But despite a lull in the development of military conflict, at any time can whip up a new hotbed of hostilities. In this regard, the markets continue to trade with increased volatility.
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The situation in Syria is developing a negative scenario. Waiting for the full-scale war involving neighboring countries encouraged investors to go into quality. The sale of risky assets around the world is not yet crossed the brink of a panic, but it can occur in the near future. In this case, we can see a sharp increase in demand for the U.S. currency.
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The last days of the euro is in a narrow channel. In yesterday's trading session was marked by an attempt to test the lower levels, but it did not succeed, and quotes the euro back to 1.3380 zone. Volatility in the major currency pairs continues to be low. In connection with the development of the military conflict in Syria the attention of major players in the financial markets has shifted to assets such as gold and oil. European stock indexes closed yesterday in a deep red. But despite the increased activity in the commodity and stock markets, the dollar index is in no hurry to develop any directional movement.
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Around the forthcoming appointment of a new head of the FED goes a lot of talk. Analysts almost unanimously repeat of only one favorite, his name is Larry Summers. Summers can make competition unless Janet Yellen, currently occupies the post of deputy chairman of the Federal Reserve. The fact that President Barack Obama will nominate Larry Summers to lead the main financial institution of the country, there are fewer doubts. But, nevertheless, it should be noted that not all members of Congress support the Obama initiative. Some politicians are quite negative view of this personnel decision. This is due mainly to the fact that during his tenure as finance minister Summers held this year in which the interests of Wall Street were taken into account in the least.
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Friday's trading session ended on a minor for a dollar note. Quiet start of the last trading day of last week, did not presage such a rapid closure. In the U.S. session quotes euro and the pound rushed to their local maxima. If released last week showed the Euro zone economy were within expectations,macroeconomic indicators of the British economy slightly pleased investors. Therefore, the pair EUR/USD hit 1.3410 and quotes GBP/USD close to 1.56 .
The situation with the major currency pairs is the same. To the key FED meeting in September, the probability that the market might try to go beyond the medium-term channel is very low. Hurry up with the occupation of positions in such circumstances, it's not necessary, and would be preferable to wait for a signal about the future direction of the movement of the market itself.
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This week the foreign exchange market is completed without any significant change in prices. The participants have not decided on the motion vector of the medium-term. Minutes of FOMC was able to provide some support for the U.S. currency and, most of all, the demand for the dollar will continue in the beginning of next week. Good data from Europe and China encourage investors to expand the limits on risky assets. Indiscriminate rush in this direction is not observed, as to the key, experts say, the FED's September meeting to make any mid-term and long-term strategy is risky.
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For the first half of yesterday's trading session was characterized by a symbolic strengthening of the dollar. Publication of the minutes of the last meeting of the Federal Open Market Committee, the Fed is not particularly affected the dynamics of the major currency pairs. Grown up a little volatility in the moment of the news has been replaced by a continuation of the growth of the U.S. currency. Market participants have not heard specific statements from the representatives of the monetary authorities. The main focus of the report was made on positive expectations regarding the U.S. economy.
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Despite published in August of interesting macroeconomic data, the major currency pairs continue to drift lower level of volatility. It seems that in the near future we will see a way out of quotes from well-established ranges. Given the length of this phase is no trend, the movement is rapid and high amplitude. The first signals of an impending storm is coming from the stock markets of the world, where there is increased volatility in the background begun reduction indexes.
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At the end of last week, the U.S. dollar has lost weight again against major competitors. The reason for such a negative attitude to the dollar from investors was the publication of disappointing macroeconomic data in the U.S.. This week, market participants will have the opportunity to evaluate the protocol FOMC. This may lead to new estimates of the prospects for monetary policy the FED.
The current situation in the U.S. economy and the euro zone rather ambiguous. In this regard, the major currency pairs continue to trade in the usual ranges. The data on business activity, which is out this week, can provide some support for the European currency. In recent years, more and more experts are inclined to believe that there are risks of short-term improvement of the macroeconomic parameters Eurozone and the UK. In the event that such assumptions will receive confirmation of the reports, the demand for the pound and the euro in the near future may increase.
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Current trading week in the FOREX market started with the strengthening of the dollar. But on Thursday, the U.S. currency again come under pressure. Data on capital flows disappointed bull increase the dollar, and quotes the U.S. currency lost all reclaimed levels. Was a strong report on retail sales in the UK. This allowed the pair GBP/USD to rewrite the local maximum and go higher.
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Bidding on Wednesday did not bring any surprises the foreign exchange market participants. The head of the Federal Bank of St. Louis in his speech yesterday noted that the campaign to curtail the FED's monetary stimulus needed more positive U.S. economic data. Players continue with great attention the state of macroeconomic statistics. Dealers said today, investors will focus on the data on the volume of retail sales for July in England. Many players are waiting for improvement of this indicator. These positive expectations may be the cause of the speculative demand for the pound in the last session.
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Many experts believe the financial markets, after the FED will begin to curtail stimulus program, the U.S. stock market will decline. But there are reputable experts who predict an even greater increase of the market. Jim Paulsen, chief investment strategist of which Wells Capital Management, confident that in 2014 the U.S. stock market will be a new wave of growth.
The main argument in favor of this scenario appears that the role of loose monetary policy of the FED in the recovery of the U.S. economy is much less significant than the majority suggests. According to the strategist, the economy is not only able to get out of the stagnation phase, but also to begin to prosper and grow. Thus, the essence of the situation lies in the trust. If the markets get a hint of what the economy can fully function without feeding the FED, it will be a much more powerful stimulus than the actual program of quantitative easing.
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FED officials literally chorus continue to declare that the U.S. economy is in a recovery phase and macroeconomic indicators fully meet the conditions for the onset of decline of redemption of bonds. Eurozone monetary regulator, however, goes on to say that he intends to continue to maintain loose monetary policy despite clear signs of improvement in the economic situation.
Investors are divided into two camps: some are waiting for the inevitable, in their opinion, the dollar growth on all fronts, while others, apparently, do not rush to conclusions and can count on the fact that the FED will offer something in return QE. And all this spiced sauce confidence to data of macroeconomic statistics. Analytical discussion among experts on the subject of fundamentalists like the tug of war. The reality at the moment is that the U.S. equity indices are storming the highs and the dollar continues to give up their positions against the euro and other currencies.
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Over the past week the dollar again lost some of their positions. But despite continued pressure, the rate of weakening of the U.S. dollar against major competitors have considerably decreased. Some analysts attribute the current weakness of the dollar to seasonal factors. Here are taking place, as an imbalance in demand for currency by the period of tourist trips and low trading activity due to the holiday season. Major participants (market makers) may again take to the dollar closer to the fall. Thus, August can be a turn-month for the U.S. currency. The cause of the dollar can be a mass closing of short positions by speculators. According to some brokers foreign exchange market in recent weeks, the volume of Short euro against the dollar is at record levels.
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Bidding on Thursday marked the continuation of the reduction of the dollar against major competitors. The relatively strong data on Macroeconomics European region are forcing market participants to sell the U.S. currency in favor of the euro. Balancing the position players on the FOREX has been going on for a long time. According to analysts, the markets still do not believe the FED will take active measures in the near future.
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Quotes of the major currency pairs on the news the last days of testing the local levels of support and resistance. The dollar continues to gradually take their positions on all fronts. Apparently, the speculation about the decline in the FED's bond purchase program on the backburner, and market participants act out a relatively strong economic data from the European region.
The dollar index currently stands at 81.15 . After overcoming a local minimum at 81.50 is the next target in the medium-term support near 80.50. This day is not filled with any important news events, and for this reason, some traders can sit on the couch and take action.
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Trading in the FOREX market on Wednesday are expected to be active during the second half of the day. Is expected to yield important reports on inflation in the UK and the performance of the Bank of England's Mark Carney. This could determine the fate of a pair GBP/USD in the coming weeks. Market participants' attention will be focused on the pace of economic growth and inflation expectations. Constructive comments Carney can be the reason for the short and medium game to improve the pound.
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Beginning of the week did not bring with them any significant movements in the currency markets. Trading activity on the first day of the week was slightly above the average for this period. There has been some different trends among the major currency pairs. The fact that some couples who traditionally have a high degree of correlation, went in the opposite dealers attributed to the fact that the participants were guided by the local trend of the fundamental parameters. Good data on the business activity of the Eurozone could not keep the European currency at the highs on Friday. As a result, a pair quietly slipped into the close. News flow today will be mainly from the European region.
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The last two weeks the markets get a large amount of information that could identify the medium-and long-term vector of currency movement. But as long as the participants do not rush to take aggressive positions. This limits the range on the major currency pairs. Despite the important data on the U.S. economy and the publication of results of the meeting of leading central banks, the situation in the foreign exchange market remained relatively calm. Apparently, at the moment dominated by technical factors.
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With so many traders are looking forward to applications from the central banks, which, apparently, partly burned. The result of publication of the results of the Fed meeting, the ECB and the Bank of England became the volatility at current levels. Ultimately quotes have not moved from their original values. In yesterday's trading session was quite a lot of news. Due to this dynamics of the major currency pairs was at a certain point in different directions. Despite the strong economic data from the Eurozone, investors chose to eventually sell the European currency. In the speech Draghi quotes pair EUR/USD started the downward momentum.
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Block macroeconomic news yesterday to make quotations of the main currency pairs fluctuate in different directions several times during the trading session. Well, at the end of the day began very real roller coaster. Strong and positive U.S. economic data the day contributed to the development of demand for the dollar, but before the FED's statement quotes again returned to previous levels. Data on employment and GDP of the United States have caused such a positive response on the dollar, as they could be an argument for the soon to minimize the program of quantitative easing. But Ben Bernanke's statement did not contain any hint of that in the near future may be a reduction in incentives.
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Tuesday on the FOREX market was relatively quiet. In the major pairs was some different direction. Quotes of the single European currency have attempted to test the 1.3 area, but the dynamics of the pair GBP/USD had a bearish trend. Drivers to start more or less strong move today will be enough.
Macroeconomic data will reveal different sides of the current situation in the Eurozone and the U.S. economy. In the European session, extend the data on the labor market in the Eurozone. Later, during the American session, participants will assess leading indicators of the labor market, to win back the GDP data for the second quarter (8:30), and at the end of the session to interpret the statements of representatives of the Federal Reserve (14:00).
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Judging by the importance of the upcoming news, trading this week promises to be quite active. Monday can be considered symbolic of the U.S. dollar during the day, as there have been some attempts to play on the rise of the U.S. currency. But, despite the desire of speculators to warm up before the markets publications outcome of the meeting of the central bank, quotes, currency pairs held by the current narrow ranges. News flow of the most powerful, the degree of potential impact on the markets, the data is expected in the second half of the week. Prior to that, most likely, further consolidation.
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Last week was quite an active market for FOREX. A number of macroeconomic news brought volatility to the market. U.S. dollar up again lost ground against major competitors. The dollar index reached 81.50 in the downward momentum that began in early July, after Ben Bernanke slightly dampened investors. This week will be rich in important data that could lead to a radical change of emphasis in the market. On the courses of further monetary policy and tell the FED, the ECB and the Bank of England. Apparently, these two days (Wednesday and Thursday) will be decided mid-term fate of the major currency pairs.
It should be noted that the focus will not remain without such data for the United States economy, as GDP for the second quarter and labor market statistics. All this will greatly affect the course of monetary policy. While the situation is such that the FED would prefer to delay the start of reducing redemption of bonds.
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Trading on the foreign exchange markets Thursday was very dynamic. Tension of the last days has resulted in attempts to pound and the European single currency to test the strength of local support. Driver of these movements served as a data packet on business news for the euro area and the UK's GDP in the second quarter. In the European session, the indices were published research institute IFO. The ratios presented in this time were worse than expected, it is somewhat disappointing investors. After a short period of volatility in the local maxima of the euro and the pound headed down.
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Bidding on the major currency pairs on Wednesday were in the ranges. Some increase in volatility was seen in the U.S. trading session, but overall significant changes in quotes did not happen. Bearish sentiment slowly return to commodity markets. Investors believe that the Fed's tightening policy will contribute to re-evaluation of risks and buying the U.S. dollar. In addition, investors are worried that China's economic slowdown will increase the negative attitude to the prospects of commodity assets.