Gold Technicals – Back Above 1,300 But Downside Bias Remains

old prices pushed lower yesterday, trading below 1,300 during US afternoon despite broad risk appetite staying bearish. Despite being a traditional safe haven asset, “risk off” trend failed to have a bullish impact on Gold yesterday, but that is no surprise as fundamentals do not support inflated Gold prices in the long-run. Furthermore, CFTC Commitment of Traders Report suggests that institutional speculators are clearing their long positions, compounding the bearish pressure.

Hourly Chart

What is more interesting is current minor rally seen during Asian hours that has sent prices back above the 1,300 round figure. This is because Asian stock indexes are actually bullish – ASX 200 is back in the black at +0.04%, rebounding from a initial 0.35% drop. Singapore’s STI and Hong Kong’s HSI are clocking decent gains, with the only major loser being Nikkei 225 which is standing at -0.88%. However, it should be noted that prices of N225 remained mostly stable, with the losses mostly due to the bearish gap. Hence, if risk trends are anything to go by, we should be seeing Gold trading lower and not higher right now.

Such price action puts a major spanner in our previous assertion about strong bearish pressure, as we should have expected bears to go for the jugular and push prices lower when risk trends are in favor of a bearish move, instead of moving against the flow higher. This suggest that that uptrend that has started since 2nd April may still be in play and it will be folly to simply brush upside risk away in the immediate short-term.

That being said, long-term bullish follow-through is unlikely to be significant with prices likely to face resistance from Channel Top which will likely coincide with Stochastic indicator being Overbought should that happens. As such, Channel Bottom remain a viable bearish target, and will remain so unless prices manage to break Channel Top and more importantly push beyond last Friday’s swing high. If that happens, it is possible that institutional speculators may start to stock up Gold once again to speculate on the bullish momentum. On the other hand, failure to do this may spur yet more selling from the said speculators as they have yet to clear all their previously long positions based on the COT report.

BlackBerry: Fall is maintained as long as 10.3 is resistance

BlackBerry: Fall is maintained as long as 10.3 is resistance

Short Term Trend: Our pivot point stands at 10.3.

Our preference: the fall is maintained as long as 10.3 is resistance.

Alternative scenario: Above 10.3, 11.19 and target 11.71.

With regard to technical analysis, the relative strength index (RSI) is below its neutrality area at 50. The indicator of convergence / divergence of moving averages (MACD) is below its signal line and negative.

Also, the Underlying is below its moving average of 20 to 50 days (is located at 9.67 and 9.59 respectively).

Resistances and supports: * 10.3 ** 11.19 9.96 – 8.22 7.72 ** 7.21 *

Medium-term trend: The Underlying is above its 100-day moving average (8.19). The distance with respect thereto is 14.3%. On the upside resistance level to watch is at 11.71, a major support is at 6.71.

FOREX- Japanese Yen Lower as Risk Appetite Appears

Yen Japones

There’s a bit of risk appetite in the markets, and the Japanese yen is lower as a result. even though some worries about China and Ukraine initially caused a bit of aversion, things have changed and the yen is moving lower — even against the euro.

Forex traders and investors are mostly shrugging off the disappointing growth data out of China, as well as ignoring the continued crisis in Ukraine. While political leaders around the world decry Russia’s annexation of the Crimean Peninsula, not a whole lot of substance — beyond freezing assets and announcing a few sanctions — has been done.

As a result, China and Ukraine aren’t causing enough risk aversion to help the yen along. Indeed, there is a bit of risk appetite as stocks around the world, particularly in Asia, head a little higher. Without much concern about what’s going on, there is no need for a safe haven like the Japanese yen. Plus, with Abenomics still in full swing, there is little reason for the yen to see gains right now. And the BOJ probably doesn’t want a strong yen anyway.

At 13:44 GMT USD/JPY is up to 102.4145 from the open at 102.1555. EUR/JPY is up to 141.1090 from the open at 140.9550. GBP/JPY is up to 168.8175 from the open at 168.1650.

Forex Trading – should you invest?

Forex trading is all about putting your money into other currencies, so you can gain the interest for the night, for time period or the difference in trading money all around. Forex trading does involve other assets along with money, but because you are investing in other countries and in other businesses that are dealing in other currencies the basis for the money you make or lose will be based on the trading of money.

Constant trading is done in the forex markets as time zones will vary and the markets will open in one country while another is near closing. What happens in one market will have an effect on the other countries forex markets, but it is not always bad or good, sometimes the margins of trading are near each other.

A forex market will be present when two countries are involved in trading, and when money is traded for goods, services or a combination of these things. Currency is the money that trades hands, from one to another. Often times, a bank is going to be the source of forex trading, as millions of dollars are traded daily. There is nearly two trillion dollars traded daily on the forex market. Should you get involved in forex trading? If you are already involved in the stock market, you have some idea of what forex trading really is all about.

The stock market involves buying shares of a company, and you watch how that company does, waiting for a bigger return. In the forex markets, you are purchasing items or products, or goods, and you are paying money for them. As you do this, you are gaining or losing as the currency exchange differs daily from country to country. To better prepare you for the forex markets you can learn about trading and purchasing online using free ‘game’ like software.

You will log on and create an account. Entering information about what you are interested in and what you want to do. The ‘game’ will allow you to make purchases and trades, involving different currencies, so you can then see first hand what a gain or loss will be like. As you continue on with this fake account you will see first hand how to make decisions based on what you know, which means you will have to read about the market changes or you will have to take a brokers information at value and play from there.

If you, as an individual want to be involved in forex trading, you must get involved through broker, or a financial institution. Individuals are also known as spectators, even if you are investing money because the amount of money you are investing is minimal compared to the millions of dollars that are invested by governments and by banks at any given time. This does not mean you can’t get involved. Your broker or investment advisor will be able to tell you more about how you can be involved in forex trading. In the US, there are many regulations and laws in regards to who can handle forex trading for US citizens so if you are searching the internet for a broker, be sure you read the print, and the information about where the company is located and if it is legal for you to do business with that company.

Gold drops as Fed tapers monthly bond purchases

Investing.com – Gold prices dropped on Wednesday in a knee-jerk selloff after the Federal Reserve announced it was trimming its monthly bond-buying program to $55 billion from $65 billion.

Fed bond purchases spur recovery by suppressing interest rates, weakening the dollar in the process while making gold an attractive hedge.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at $1,332.20 a troy ounce during U.S. trading, down 1.97%, up from a session low of $1,3330.90 and off a high of $1,360.10.

The April contract settled down 1.01% at $1,359.00 on Tuesday.

Futures were likely to find support at $1,328.20 a troy ounce, the low from March 10, and resistance at $1,393.80, the high from Sept. 8.

The Fed earlier said it was leaving interest rates unchanged and reduced the amount of bonds it buys in the open market each month to $55 billion from $65 billion, both moves in line with expectations.

The news sent gold falling, as the Fed’s asset-purchasing program, which kicked off in 2012 at $85 billion a month, has supported the yellow metal by weakening the dollar.

Elsewhere, the Fed omitted previous language calling for rate hikes if the unemployment rate approaches a 6.5% threshold, a policy tool known as forward guidance.

Even though the economy is improving, a highly accommodative monetary policy stance remains appropriate, the U.S. central bank said.

Still, gold remained lower on sentiments that even though interest rates may remain low for time to come, stimulus tools such as bond purchases are on their way out.

Meanwhile, silver for May delivery was down 1.24% at US$20.603 a troy ounce, while copper futures for May delivery were up 0.99% at US$2.981 a pound.

Top Trade Idea For March 13th, 2014 – AUDUSD

Complex corrective wave for the audusd pair and from my point of view this is a triple combination and these kind of patterns are usually the leg of a contracting triangle of a bigger degree.

What is interesting is the fact that triple combinations are always ending with a contracting triangle to act as a reversal pattern and this means previous trend (the downtrend) will be reversed.

Also another clue that we are in a triangle that should break higher after completion is the fact that for this last wave a purple price is forming a truncated zigzag and this pattern is retraced minimum 81% so you can imagine the covering there.

Our recommendation would be to close any longs into the 0.9340 area, without waiting for the 81% retracement to come, as this would be only the b wave pink to the upside and then just wait for 0.90 to come over and over again and buy that area for the triangle to break higher or for the d wave to come.

We should then look at how the b-d trend line respects the time element but normally the triangle should break higher with the e wave to take less than the time taken for the previous d wave to form.

End of the triangle should be below previous corrective wave (0.8997) so every time 0.90 is coming just go long with stop loss 0.8662 and having a final target a move towards parity.

I know everyone is bearish on the audusd but this is the whole beauty of technical analysis: it allows one to have a contrarian opinion.

HOW TRADING OUTSIDE OF THE FX MAJORS CAN IGNITE YOUR TRADING

The Attraction of Only Trading Majors

Many traders will state that they will only trade a major currency pair such as EURUSD, USDJPY, or GBPUSD. This mindset is understandable as you’re likely to see a clear majority of coverage on these currency pairs. However, this limited view of trading opportunities can be a major mistake that can be easily remedied by looking at currency crosses or non-FX majors.

Learn Forex: Current Open Interest at FXCM

You can see above that at any given time, the open interest on FXCM’s book of client trades are concentrated around 4 trades. The concentration of open trades are often skewed in favor of EURUSD around 30%, Gold or XAUUSD around 15%, a similar reading for GBPUSD, and USDJPY around 10%. Other majors command much less attention like AUDUSD, NZDUSD or USDCAD sitting around 5-7%. This imbalance, regardless of the technical opportunities, appears to be due to familiarity of majors and others wanting to trade what everyone else is trading.

The Benefit of Trading Crosses

Learn Forex: Typical Strong / Weak Rating (Listed Weakest to Strongest)

You can likely find a great boost in your trading by doing something similar. If you’re unfamiliar with taking a strong / weak approach, you’ll learn that the reasons for one currency becoming the strongest and another the weakest are many. However, strong /weak relationships often develop from an imbalance in monetary policy or interest rate guidance from a central bank along with a technical tipping point.

Here’s a question that often goes through my mind when I think about someone asking me what opportunities are available on EURUSD or GBPUSD vs. EUR-crosses or GBP-crosses.

Why would you want to trade two very weak or two very strong currencies?

Of course, it’s your money and you can trade what your heart desires. However, I can’t imagine trading two very weak or two very strong currencies. A current example is USDJPY. The JPY has resumed weakness after it topped out in early February 2014 around 100.72. Unfortunately, the upside is limited and even if the weak JPY resumes, an even weaker USDOLLAR could upset those banking on JPY weakness taking on its 2013 form.

Learn Forex: USDJPY vs EURJPY Displays The Difference

On the other side of the spectrum, what if both currencies are very strong. While we haven’t seen a scenario with USD being strong since early January, we have seen an example of EUR & GBP both being rather strong. With a scenario of two strong currencies, you will often see two economies that have extremely supportive fundamental data at the same time and technically, you’re likely to see a range. With a strong / strong scenario, the stronger currency of the two will be which ever has had the most recent news announcement which makes the cross an unfavorable scenario for a trend following swing trader.

A Potential Set-Up With AUDCAD

Referencing the open interest pie chart above, you don’t even see AUDCAD. This means that a small amount of FXCM traders, likely less than 3%, are considering this opportunity that has a favorable fundamental and technical set-up in the near term. We’ve recently come off of a very favorable week of fundamental data out of Australia that brought a developing Ichimoku set-up for AUDUSD. On the other hand, Canada had a dismal employment report.

Learn Forex: AUDCAD Break Could Push Cross Higher

While the overall trend is down, given we’re trading lower than the March 2013 peak, the resurgence of the AUD brings focus to AUDCAD upside. Technically, the cross just cleared the all-important 1.00 parity level (dotted-line on the chart above) has us looking higher in the next few weeks to the 1.03 level where resistance could be found via the Fibonacci technique. Most importantly though, it brings about a clear technical trade idea on a pair not normally traded which could bring a distinct edge to your trading that other’s do not have because they only look to one or two currencies.

Closing Thoughts

This AUDCAD set-up just shows you how trading outside of the FX Majors can open up trading opportunities you may have not considered before. If you keep your focus only on the majors, it’s possible that they could only present unfavorable technical or fundamental pairings which could limit the opportunities that are available in the FX market week in and week out.

Order Flow Trading Part Two

Last week I began a series of articles about Order Flow Trading. We defined Order Flow trading as a wide-ranging term for styles of trading that are all focused on anticipating where large buy and sell orders would be located, and in trading along in tandem with those orders. In short, Order Flow Trading involves picking levels. I outlined how to find those likely levels: look for previous daily and weekly highs and lows, and emphasised that many of the best trades are the most frightening counter-trend trades. I will now try to explain why this is so.

An Order Flow Scenario

Let us imagine the following hypothetical scenario. It is a few minutes before 8am London time, an hour that is commonly regarded as the “London Open”, a time at which Forex volatility tends to rise dramatically. Looking at the daily chart on London time, yesterday closed very near its open, and the overnight Asian session has been extremely quiet. Yesterday’s high was 1.3100 and yesterday’s low was 1.3000, the price right now is approximately 1.3050. In other words, yesterday’s daily candle was a doji, and yesterday’s high and low are both confluent with round numbers.

We reach 8am London time and the price begins to rise sharply. After just half an hour, the strong upwards move has the price hovering just underneath 1.3100.

Some traders will look at this scenario and see strong buying pressure pushing the price up. However, a sharp move up may simply mean that sellers have pulled their orders back to 1.3100, creating a misleading vacuum that allows the price to rise sharply. As soon as the price hits 1.3100, order flow sellers who have picked this level as an excellent selling level step in with short orders, and the price falls dramatically, reaching a short profit of 40 pips within another half an hour, suffering a drawdown of only 2 pips.

Sometimes the Faster the Move, the Weaker the Move

What many experienced order flow traders will tell you is that the moves that fly quickly to the obvious levels worth going counter at are usually the best trades, because the quickness of the move is indicative of a vacuum rather than strength.

How to Pick the Levels

Of course, it goes without saying that a simple strategy of fading every previous daily or weekly high is, over time, unlikely to prove very profitable. A certain amount of discretion needs to be utilised in picking the right levels at which it is worth getting involved. Note that order flow trades do not need to be counter: you can wait for levels to be broken and retested before trading them in line with the trend.

Here are a few tips for picking pairs to trade and the levels at which there is likely stacked-up order flow:

Choose the most liquid pairs. At the moment the best pair for fading levels seems by far to be EUR/USD, although it does not move very far.

Pick levels with confluence of more than one recent previous daily high or low and trend lines, round numbers, or pivot points.

If the pair has already made a typical day’s range, that is a good sign.

If the pair reaches the level without hitting any other obvious level during the most liquid part of the day, this increases the probability that it will be a good fade trade.

Use tight stops, as the really good trades will usually not exceed the level by more than a few pips.

Look to protect or lock in some profit after the trade goes about 40 pips (with EUR/USD) in your favor.

This kind of counter trend trading is best practiced in conditions where the daily charts are consolidating and there is no obvious trend.

Dollar Pares Gains vs. Yen After Payrolls Data Disappoints and Other Top Forex News

The U.S. dollar pared gains against the yen on Wednesday, following the release of disappointing U.S. private sector payrolls data.

This mornings ADP nonfarm payrolls data showed that the U.S. private sector added 139,000 jobs in February, well below expectations for an increase of 160,000.

And there was more bad news later on when the Institute of Supply Management said its non-manufacturing purchasing manager’s index fell to a 43-month low of 51.6 last month from 54.0 in January. Confounding expectations for a fall to 53.5 in February.

The data caused the dollar to give-up ground against the Japanese yen which suffered in risk-off trading after tensions eased in the standoff between Ukraine and Russia.

USD/JPY ended the session up 0.10% at 102.32, down from a high of 102.55 earlier.

While the euro trimmed losses against the dollar after this mornings data. The single currency couldn’t find any friends this morning, despite data showing that euro zone private sector activity grew more rapidly than initially estimated in February, expanding at the fastest pace since June 2011.

Investors remain wary of this weeks European Central Bank’s meeting on Thursday amid concerns that the bank could tighten monetary policy.

EUR/USD ended the session down 0.03% at 1.3738, up from a low of 1.3707 earlier.

The pound also found support this morning after official data showed that activity in the U.K. service sector dipped in February, but growth remained robust.

GBP/USD ended the session up 0.40% at 1.6731.

Elsewhere, the U.S. dollar fell against the Canadian dollar after the Bank of Canada left rates on hold at 1.00% on Wednesday, a decision that was widely anticipated.

The bank said economic growth in the fourth quarter of 2013 was slightly stronger than anticipated, adding that it still expects growth of 2.5% in 2014.

However, the bank also said inflation is expected to remain well below target for some time and the direction of the next change to the policy rate will be data dependent.

USD/CAD closed the session down 0.45% at 1.1042.

And the Australian dollar moved higher, despite the Reserve Bank of Australia indicating the Aussie needs to keep falling if the economic recovery is to take hold.

AUD/USD climbed 0.39% to 0.8987.

Finally, the New Zealand dollar moved higher against the greenback as concerns about the crisis in Ukraine ease.

NZD/USD climbed 0.35% to 0.8419.

Dollar gains on solid U.S. manufacturing, personal spending dat

The dollar firmed against most major currencies on Monday after solid U.S. factory and consumer spending reports sparked a rally, while unease over the Ukraine crisis fueled safe-haven greenback demand as well. In U.S. trading on Monday, EUR/USD was down 0.50% at 1.3733.

The Commerce Department reported earlier that personal spending rose 0.4% in January, above expectations for an increase of 0.1%. Personal spending for December was revised down to a 0.1% gain from a previously reported increase of 0.4%.

The report added that personal income rose 0.3%, beating expectations for a 0.2% increase, after a flat reading in December.

Meanwhile, the core PCE price index, which is stripped of food and energy items, inched up by a seasonally adjusted 0.1% in January, in line with expectations, after rising 0.1% in December.

The core PCE price index rose at an annualized rate of 1.2%, above forecasts for a 1.1% increase, after rising at a rate of 1.1% in December.

Consumer spending is the single biggest source of U.S. economic growth, accounting for as much as two-thirds of economic activity.

The Federal Reserve pays close attention to personal income and spending when deciding the fate of monetary policy, and Monday's data prompted investors to assume the U.S. central bank will continue scaling back its monthly asset purchases as the year progress.

Fed asset purchases, currently set at  $65 billion a month in Treasury and mortgage debt, aim to spur recovery by suppressing long-term borrowing costs, which weakens the dollar as a side effect by sending investors to stocks in hopes investing and hiring accompany rising equity prices.

The dollar also saw support after the Institute for Supply Management revealed that its manufacturing purchasing managers’ index rose to 53.2 last month from 51.3 in January, beating forecasts for a reading of 52.0.

The report attributed the rise to an increase in new orders after rough winter weather disrupted commerce at the start of the year.

The euro, meanwhile, came under pressure as escalating tensions over the crisis in the Ukraine sparked a broad-based selloff in risk assets.

Russian President Vladimir Putin over the weekend sent troops into the Crimea region.

The move sparked fears that the West will impose sanctions on Russia. Russia’s central bank hiked interest rates from 5.5% to 7% on Monday after the rouble fell to new record lows against the euro and dollar.

In the euro zone, data on Monday confirmed that the region’s manufacturing purchasing managers’ index declined to 53.2 in February from 54.0 in January. It was the first dip in five months, highlighting the fragile nature of the recovery in the euro area.

The rate of decline in France’s manufacturing sector eased in February, while activity in Germany’s manufacturing sector rose for the eighth straight month.

Elsewhere, the dollar was down against the yen, with USD/JPY down 0.35% at 101.43, and up against the Swiss franc, with USD/CHF up 0.34% at 0.8834.

The greenback was up against the pound, with GBP/USD down 0.51% at 1.6660.

In the U.K., data revealed that a strong upswing taking place in the U.K. manufacturing sector continued in February, with jobs growth in the sector accelerating to a 33-month high.

The Markit U.K. manufacturing purchasing managers’ index for February came in at 56.9, up from a revised 56.6 in January. Analysts had expected the index to tick down to 56.5.

A separate report showed that the number of mortgages approved in the U.K. rose to 76,947 in February, the highest level since November 2007, from 72,798 in January.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.15% at 1.1080, AUD/USD up 0.03% at 0.8930 and NZD/USD down 0.20% at 0.8367.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.35% at 80.08.

Forex Market Review

The Australian dollar continued on from yesterday’s RBA meeting with enough support to hit 89.67 US cents. Even with Governor Stevens labelling the dollar still “high by historical standards” it did little to temper the demand with a key weapon of further rate cuts seemingly now over with a period of on hold expected in the near term. Vladimir Putin also helped risk assets and the Australia dollar with comments that eased some tension, especially as troops that were training were pulled from close to the Ukraine border. The Australian dollar made its most significant gain against the Yen trading as high as 91.6 Yen, a 150 pip gain since early Monday morning.

The US dollar was not quite as impressive as the Aussie but still was able to put on 80 pips versus the Yen amid the easing tensions in Ukraine-Russia standoff but there is still much unrest in the Russian speaking regions. On an economic front it was a night void of key data outside of UK Construction PMI which remained well above 60 but missed estimates not helping the Pound which was sluggish and has slipped close to where it sat this time yesterday at 1.6659 USD.

The Canadian dollar

The Canadian dollar is poised to test a 4 1/2-year low in a reversal of the rally That Brought it to its highest level in a month , According to Royal Bank of Canada , citing technical factors.

 

If the loonie ends today weaker than yesterday’s closing of C $ 1.0953 per U.S. dollar , it would form a ” bullish key reversal day ” that signals the end of the currency ‘s recent run of strength , George Davis , chief technical analyst at RBC Capital Markets, wrote in a note to clients. The next key level is C $ 1.1033 .

” A daily close Above This level would amplify the oversold nature of the daily studies , exposing the high at $ C1.1223 once again , ” Davis wrote , citing the Jan. 31 Reached level That was the weakest since July 2009 . ” A close above yesterday’s high at C $ 1.0976 would be an even more powerful signal . “

The loonie, as the currency is Known for the image of the aquatic bird on the C $ 1 coin , depreciated 0.8 percent to C $ 1.1037 per U.S. dollar at 11:20 am in Toronto. It earlier advanced to C $ 1.0911 , the strongest level since Jan. 16. One loonie buys 90.60 U.S. cents.

Canada ‘s currency has Strengthened 0.7 percent versus the greenback This Month after dropping 4.5 percent in January, its biggest loss for the first month of the year in at Least 42 years .

Forex trading is all about putting your money into other currencies, so you can gain the interest for the night, for time period or the difference in trading money all around. Forex trading does involve other assets along with money, but because you are investing in other countries and in other businesses that are dealing in other currencies the basis for the money you make or lose will be based on the trading of money.

Constant trading is done in the forex markets as time zones will vary and the markets will open in one country while another is near closing. What happens in one market will have an effect on the other countries forex markets, but it is not always bad or good, sometimes the margins of trading are near each other.

A forex market will be present when two countries are involved in trading, and when money is traded for goods, services or a combination of these things. Currency is the money that trades hands, from one to another. Often times, a bank is going to be the source of forex trading, as millions of dollars are traded daily. There is nearly two trillion dollars traded daily on the forex market. Should you get involved in forex trading? If you are already involved in the stock market, you have some idea of what forex trading really is all about.

The stock market involves buying shares of a company, and you watch how that company does, waiting for a bigger return. In the forex markets, you are purchasing items or products, or goods, and you are paying money for them. As you do this, you are gaining or losing as the currency exchange differs daily from country to country. To better prepare you for the forex markets you can learn about trading and purchasing online using free ‘game’ like software.

You will log on and create an account. Entering information about what you are interested in and what you want to do. The ‘game’ will allow you to make purchases and trades, involving different currencies, so you can then see first hand what a gain or loss will be like. As you continue on with this fake account you will see first hand how to make decisions based on what you know, which means you will have to read about the market changes or you will have to take a brokers information at value and play from there.

If you, as an individual want to be involved in forex trading, you must get involved through broker, or a financial institution. Individuals are also known as spectators, even if you are investing money because the amount of money you are investing is minimal compared to the millions of dollars that are invested by governments and by banks at any given time. This does not mean you can’t get involved. Your broker or investment advisor will be able to tell you more about how you can be involved in forex trading. In the US, there are many regulations and laws in regards to who can handle forex trading for US citizens so if you are searching the internet for a broker, be sure you read the print, and the information about where the company is located and if it is legal for you to do business with that company.

Dollar steady in holiday thinned trade

The dollar was little changed against the other major currencies in holiday thinned trade on Monday, as recent soft U.S. economic data fuelled concerns over the outlook for the economic recovery.

Dollar little changed in thin trade

USD/JPY edged up 0.09% to 101.92, pulling back from lows of 101.39, the weakest since February 6.
The dollar remained under pressure after data on Friday showing that U.S. factory output fell unexpectedly in January clouded the outlook for the economic recovery. The data prompted some investors to wonder whether the Federal Reserve will slow the pace of reductions to its asset-buying stimulus program.
Trade volumes were expected to remain thin on Monday, with U.S. markets shut for the President’s Day holiday.
The safe haven yen touched session highs earlier after official data on Monday showed that Japan’s gross domestic product expanded 0.3% in the final three months of 2013 and grew 1.0% on a year-over-year basis.
Market expectations had been for quarterly growth of 0.7% and an annual increase of 2.8%.
EUR/USD touched highs of 1.3724, the strongest since January 24 and was last up 0.08% to 1.3704.
Demand for the euro continued to be underpinned as Friday’s better-than-expected euro zone fourth quarter growth data eased concerns that the European Central Bank could tighten monetary policy at its next meeting.
Also supporting the euro, ECB governing council member Ewald Nowotny said Monday the banks bond buying program is “not that relevant” anymore, because of the improved economic situation.
Elsewhere, the pound eased back from four-year highs against the dollar, with GBP/USD slipping 0.12% to 1.6728. The pair rose to highs of 1.6823 earlier, the strongest level since November 2009.
Demand for sterling continued to be underpinned after the Bank of England revised up its forecast for growth in 2014 in last week’s quarterly inflation report, and indicated that it may raise rates as soon as next year.
The dollar slid against the Swiss franc, with USD/CHF edging down 0.13% to 0.8916.
The Australian dollar slipped lower, with AUD/USD dipping 0.09% to 0.9026, while NZD/USD was down 0.14% to 0.8356.
In New Zealand, data on Monday showed that retail sales rose 0.7% in the final three months of 2013 and were up 1.2% from a year earlier. Market expectations had been for a quarterly gain of 1.2% and an annual increase of 1.6%.
The U.S. dollar was lower against the Canadian dollar, with USD/CAD edging down 0.09% to 1.0968.

The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, dipped 0.01% to 80.16.

Gold futures fall from 3-month high ahead of U.S. retail sales data

Gold prices retreated from the previous session’s three-month high on Thursday, as investors looked ahead to key U.S. economic data later in the day for further indications on the strength of the economy and the future course of monetary policy.

Gold drops from 3-month high ahead of U.S. retail sales report

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery held in a range between USD1,287.60 a troy ounce and USD1,293.20 an ounce.

Gold prices last traded at USD1,287.70 an ounce during European morning hours, down 0.55%.

Gold futures rallied to USD1,296.40 an ounce on Wednesday, the most since November 8, before trimming gains to settle at USD1,295.00, up 0.4%.

Prices were likely to find support at USD1,264.70 a troy ounce, the low from February 10 and resistance at USD1,313.30, the high from November 8.

Meanwhile, silver for March delivery fell 0.9% to trade at USD20.15 a troy ounce. The March contract settled 0.93% higher on Wednesday to end at USD20.34 an ounce.

The U.S. is to produce data on retail sales for January, as well as the weekly report on initial jobless claims later in the session.

Meanwhile, Federal Reserve Chair Janet Yellen is to testify on the bank’s semiannual monetary policy report before the House Financial Services Committee, in Washington.

In her first congressional testimony on Tuesday, Fed Chair Yellen said that the central bank would taper the pace of its asset purchases at future meetings if the economy continued to improve as expected.

She added that the pace of the central bank’s bond purchases are not on a “preset course”, while reiterating that Fed plans to hold interest rates at zero “well past” the time the jobless rate falls below 6.5%.

The testimony is coming amid fresh concerns over the outlook for the recovery, following the weakest two-month stretch of U.S. job creation in three years in December and January.

The Fed tapered its monthly asset purchase program by another USD10 billion to USD65 billion a month at its last policy meeting.

Elsewhere on the Comex, copper futures for March delivery dipped 0.2% to trade at USD3.249 a pound.

Bitcoin Bitcoin falls below USD500 on Mt. Gox

Bitcoin prices fell below the USD500-level on the Tokyo-based Mt. Gox on Thursday, as traders shied away from the virtual currency amid ongoing concerns over withdrawal issues.

Bitcoin drops below USD500 on Mt. Gox

BTC/USD fell to a session low of USD479.92 on Mt. Gox, before trimming losses to trade at USD512.05 during U.S. morning hours, down 5.5%.
Tokyo-based Bitcoin exchange Mt. Gox was forced to halt all Bitcoin withdrawals late last week due to a technical issue, with the issue yet to be fully resolved.
Mt. Gox was once the world’s largest Bitcoin trading exchange, with volume topping 1 million trades a day at its peak. It is now the third-largest Bitcoin exchange.
Meanwhile, sentiment remained jittery after the two largest Bitcoin-trading exchanges came under attack from hackers in the latest development to roil the virtual currency.
Slovenia-based Bitstamp said it halted customer withdrawals to deal with the issue on Tuesday night. BTC-e, which is based in Bulgaria, said it was also experiencing delays in crediting certain transactions.
The price of a Bitcoin last traded at USD654.35 on BitStamp, while prices on BTC-e traded at USD639.25. BitStamp is the world’s largest Bitcoin exchange, while BTC-e is the second-biggest.
According to the CoinDesk Bitcoin Price Index, which averages prices from the major exchanges, prices of the crypto-currency dipped 0.35% to hit USD646.15.
Bitcoin is digital cash for the internet and it is not backed by a government or central bank to regulate or issue it. It can be used to purchase goods and services from stores and online retailers.

Prices of the virtual currency soared to an all-time high of USD1,241.10 on November 29. It was trading at USD100 in early October.

Forex Brokers

If you are considering currency trading, you should be an experienced trader who can handle financial losses. Because of the risk, forex trading is not suitable for most investors. If you have been an active day trader, you likely have the skill set to use forex successfully, or at least have an understanding of the risk involved.

On the other hand, the forex market is now more welcoming than ever to newer, lower-volume investors. While volume investors fuel the majority of the $4 trillion dollar-per-day market, lower-volume investors have increasing opportunities, too. In the past, minimum deposits were in the thousands; now you can fund a new account with as little as $100. With this low deposit requirement, you can test out a few services without risking large sums of money.

If you’re trading from the United States, we recommend that you consider Alpari, due to its low commission rate and easy online trades, or MB Trading, which offers commission-free accounts. Traders based elsewhere in the world may want to investigate Dukascopy, a Swiss institution with a good reputation for transparency. We also offer articles about forex trading, profiling the good and bad of various brokerages, along with full reviews of the top forex brokers

Forex Brokers: What to Look For

To help you make an informed selection, we compared trade details, brokerage types, funding options, trading platforms, and help and support.

Trades

Some forex brokers are lowering the barriers to entry by allowing you to open forex accounts with as little as $100, whereas in the past, minimum deposits were in the thousands of dollars. In terms of available pairs of currencies, even though the majority of forex trades involve just a handful of currency pairs, most forex brokerages offer from 30 to 60 pairs of currencies. So you if you are interested in a fairly rare pairing, confirm that it is available through the forex broker that you are considering. Be aware that the minimum trade lot size is 1,000 for most forex brokers, which means that your currency pair transaction must be for at least 1,000 of whatever currency pair you are buying or selling. Some brokers require you to trade in lot sizes of 10,000.

If you trade in the United States, the law of the land protects you from yourself by limiting your ability to leverage trades to 50 to one. (Leverage is money that you borrow from the broker in order to conduct larger transactions than your actual funds would allow. With a leverage of 50:1, you can conduct a $50 transaction with $1.) In Europe, you can leverage up to 400:1. Just remember that, although leverage multiplies your ability to make profits, it is a two-edged sword so it can also multiply the speed with which you lose money.

Brokerage & Funding Options

When selecting a broker, you have a choice of two types: a market maker or an Electronic Communications Network (ECN) broker. Each charges you in a different manner. Market-maker brokers take a percentage of the spread in value between the buying and selling price. Because that spread constantly varies, some nefarious market makers have been known to manipulate spreads artificially for their own gain. ECN brokers usually just charge a commission per transaction, and so have no incentive to game the bid-ask spread. Be sure to read all fine print and contract details before opening a new account, so you know what kind of broker you’re dealing with. Also, be careful to note which governing agencies the broker is regulated and licensed by.

Before selecting a new broker, you should consider funding and payment options, along with all associated fees and interest charges. In our research, we found that withdrawing money from an account was trickier than depositing money into the account. Since it may take days or longer to retrieve your funds, you should not trade with money that you actually need in the short-term.

If you are a day trader, you do not have to worry about interest rates because you won’t be holding funds overnight. However, if you hold a position overnight, the broker will charge you interest. Since Islamic law prohibits interest, most brokers offer interest-free accounts for Muslims; these accounts charge a fee rather than interest. Brokers may charge other fees, including wire-transfer fees, margin rates and routing fees.

Trading Platforms

Most forex brokers use the MetaTrader platform with their clients, a popular trading platform that an experienced trader will likely already know well. You’ll likely have access to MetaTrader both on the web and via mobile. All platforms are now web-based, although many brokers offer their own proprietary trading platforms as well.

Help & Support

Although nothing can replace extensive research and experience with a broker over an extended time, we did evaluate a few criteria to show you different brokers’ levels of help and support. We compared how easy it is to contact the forex brokers and what kind of education they provide to clients. The best forex brokers offer telephone, email and chat support. The top brokerage services also provide documentation, videos and tutorials to help you learn how to minimize your risk.

Forex trading involves a high amount of risk, so we recommend that you educate yourself as much as possible before starting. Take advantage of the education provided directly from the brokers, market forums and our comparative reviews of different brokers.