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The Euro goes down…along with markets

What’s with the Finance Industry CEOs anyway? I mean things are looking up in general right now. It’s not over yet. I think everyone knows that. However, the numbers we have been getting recently are not nearly as bad as they could be. It seems like the US Administration finally have a fairly good idea what they want to do, for better or worse. Just recently, the IT companies mentioned that they thought we were at a bottom. Happy days…right?

So, what’s the problem with the Wallstreet CEOs? Why all the doom and gloom? I’ll tell you that it is. Uncertainty…for them. Since they accepted the Bailout money, they know they are going to have to account for it some day. No more massive payouts. People will get fired. It’s a new era. They don’t like it. The whole economy could suddenly get better right now and they still wouldn’t like it. They feel like they have been made scape goats. I agree. When things went well, the took the credit and a lot of them got really rich. They twisted, bent…downright discarded the rules. People want blood. The Government will give it to them. Plus, it’s good for votes…

In any case, that might be part of the reason the market has been down for the last few days. That, and some good old fashioned profit-taking. No one is really sure where we are right now, so we all have to exercise care. As I write this, the Dollar is gaining against all the majors, aside from the yen in the Forex Markets. The Fear trade is back in. I traded down to the support on the EUR/USD pair at 1.3200, so I’m out right now. I don’t know that the dollar has enough power to break through that right now. A third day of dollar gains seems to be firmly in the works for now.

Unfortunately, I won’t be able to find out…not tonight anyway. Sleep…the number one problem about Forex Trading. Will wait to see how the market reacts to the news hitting us tomorrow.

Happy trading

Forex Markets: Dollar reaches it’s top?

We are now back to asking, yet again, whether the dollar will finally stop gaining on the others. I never expected much from the G20 – more like G18, if you really want to get technical about it; but I’m an easy going type of guy – after their planned meeting this week. It was clear that there were going to be differences between the leaders, not to mention the blame on America for the crisis in the first place.

However, it seemed to yield more than just hot air. They agreed to inject $1 Trillion to help address the Economic crisis. There are details to be worked out, and each country still reserves the right to decide exactly how much stimulation they are willing to put into their own economies; but it was generally unified. The markets loved it. The Dollar…not so much.

Forex traders sold the dollar across the board. A No-brainer really, for professionals and those learning forex trading alike. Today, the latest Job numbers in US were released. 663 thousand people lost their jobs in March. In any other environment, that would be horrible:devastating:unbelievably bad. Today, we have a collective sigh of relief instead. Considering what we have seen recently, that figure was pretty tame.

So, it seems that things are getting better. No need to rush to US based Treasuries. No need to buy Dollars. This recession might not be over by a long shot, but the general idea is that there might now be a light at the end of the tunnel. Yee-hah!!

The Safe Haven play might be over for the US Dollar and Yen. That doesn’t necessarily mean that the dollar is going to fall over completely. It’s just that a correction will now happen. This might mean a bit more analysis of each Dollar currency pair, instead of the general strength/weakness play we have been doing all this time.

Things will get interesting…in a different way. Happy trading.

After the roller-coaster that was last week, we are beginning another one. For people who are learning forex trading, or are who are new to the Forex markets, it’s been a pretty harsh environment lately. People like me who proclaim to be part-time traders are also getting a good spanking.

Everyone waited expectantly for the Jobs Report out of the US on Friday. Everyone knew it would be bad, so there were no real surprises at the figure of 651,000. The unemployment rate did jump to 8.1% which was a little higher than most people expected though. I think everyone also expected that such figures could not bode well for the Equity markets. This was the case.

What was a little fuzzy was exactly how the Forex Market, particularly the US Dollar, would react to this news. In the recent past, uncertainty and more negative has tended to favor the US Dollar, what with it’s “Haven” status. However, this has not been 100% reliable lately, as more and more news has come out to show that the US is still very much caught in the recession. It’s always been somewhat counter-intuitive that the Dollar should keep gaining, even as the US economy sinks deeper into the recession.

This was something that could no be ignored on Friday, at least not initially. The Dollar lost substantial ground against pretty much everyone. Unfortunately for those who think the Dollar is losing it’s shine, Forex traders quickly realized the error of their ways and bought the Dollar back. The result: The Forex Markets were back to close to where how they begun the day; most gains against the dollar erased.

So we go into this week expecting quite a bit of news out of Europe. Once again, we expect quite some negativity. Consequently, I think the dollar will be back to it’s old ways again.

Equities go up…Dollar goes down

So, we see it again. This morning, stocks have been rising as the Chinese Government highlights plans for an added Economic Stimulus. This helps to inject some confidence into the market. The risk aversion we have being seeing thus abates a little bit. Investors can come out to play.

After analysis, the offshoot of that is that the dollar loses some steam, at least temporarily. The same goes for the Yen. This loss on the Dollar’s part is furthered increased against the Pound as figures in the UK show that Consumer confidence in February rose from it’s lowest levels in four years. Good times…at least for today.

So, in general terms, a lot of investors talk about long or medium term dollar strength; but as soon as there is the slightest sliver of hope that we might be reaching the bottom of this fall, the dollar is pushed back a little bit. Then some other news comes out that shows that we really aren’t quite there yet; then the dollar gains once more, usually further than it’s previous loss.

It’s no wonder Forex traders still keep betting on the Dollar. We will need a steady succession of good news to end this trend. Today might be the day that starts. More likely, it’s just a breather. More likely, the pain will continue. More likely, dollar strength will continue.

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