EUR/USD Slumps on Worsening Consumer Confidence

EUR/USD is currently posting a biggest daily drop since July 10th as the consumer confidence report for July along with the housing data for May cut the traders’ hopes for the fast economical recovery and boosted the attractiveness of the U.S. dollar in the Forex market. EUR/USD is now trading near 1.4173.

S&P/Case-Shiller Home Price index for 20 U.S. states was at a seasonally adjusted level of 140.05 in May — that’s a 17.05% drop compared to a year before. A decline by 17.90% was expected following an 18.10% drop in April.

Consumer confidence decreased from 49.3 in June to 46.6 in July in United States. It was a rather unexpected drop (forecasts pointed at a decline only to 49.0).

On the good side, yesterday, a report on the June’s new home salesshowed a growth from 346k to 384k annualized seasonally adjusted rate. That report surpassed the optimistic forecast of gain to 355k rate.

Do You Trade Anything Else Except Forex?

I think that the Forex market offers a lot of advantages compared to the other types of financial trading. Currency pairs offer a variety of choices, events to react on and the technical analysis is simply beautiful in Forex. But I also like to trade in other markets. Because many Forex brokers also offer gold and oil, I sometimes like to set up long-term positions on these instruments. I also have some portfolio in stocks, but it can hardly be called a real trading because I only trade like once in 3-6 months in stocks. What about you? Do you trade in anything else than currency pairs?

Do You Mix Forex Trading with Any Other Type of Financial Trading?

•  No, I prefer to trade only currencies.
•  Yes, I also trade gold.
•  Yes, I also trade oil.
•  Yes, I also trade CFD.
•  Yes, I also trade stocks.
•  Yes, I also trade commodity futures.
•  Yes, I trade almost everything.
•  I don't even trade Forex.

GBP/USD Chart Patter — July 26th 2009

This time I once again show only one Forex chart pattern that I’ve detected during the last trading week. It’s GBP/USD ascending triangle with a small downward slope. This is a bullish continuation figure and I recommend expecting an upward breakout, which can happen in a week or two. Click on the image to get the full-size chart screenshot:

Forex Technical Analysis for 07/27—07/31 Week

EUR/USD trend: sell.
GBP/USD trend: sell.
USD/JPY trend: buy.
EUR/JPY trend: sell.

Floor Pivot Points
Pair	3rd Sup	2nd Sup	1st Sup	Pivot	1st Res	2nd Res	3rd Res
EUR/USD	1.3927	1.4018	1.4109	1.4200	1.4291	1.4382	1.4473
GBP/USD	1.6013	1.6161	1.6289	1.6437	1.6565	1.6713	1.6841
USD/JPY	91.28	92.18	93.48	94.38	95.69	96.59	97.89
EUR/JPY	129.06	130.57	132.59	134.10	136.12	137.63	139.65

Woodie’s Pivot Points
Pair	2nd Sup	1st Sup	Pivot	1st Res	2nd Res
EUR/USD	1.4018	1.4110	1.4200	1.4292	1.4382
GBP/USD	1.6156	1.6279	1.6432	1.6555	1.6708
USD/JPY	92.28	93.68	94.48	95.89	96.69
EUR/JPY	130.70	132.84	134.23	136.37	137.76

Camarilla Pivot Points
Pair	4th Sup	3rd Sup	2nd Sup	1st Sup	1st Res	2nd Res	3rd Res	4th Res
EUR/USD	1.4101	1.4151	1.4167	1.4184	1.4217	1.4234	1.4251	1.4301
GBP/USD	1.6265	1.6341	1.6366	1.6392	1.6442	1.6467	1.6493	1.6569
USD/JPY	93.57	94.18	94.38	94.58	94.99	95.19	95.39	96.00
EUR/JPY	132.67	133.64	133.96	134.29	134.93	135.26	135.58	136.55

Fibonacci Retracement Levels
Pairs	EUR/USD	GBP/USD	USD/JPY	EUR/JPY
100.0%	1.4291	1.6585	95.29	135.61
61.8%	1.4221	1.6480	94.44	134.26
50.0%	1.4200	1.6447	94.18	133.84
38.2%	1.4178	1.6414	93.92	133.43
23.6%	1.4152	1.6374	93.60	132.91
0.0%	1.4109	1.6309	93.08	132.08

CFD, Indices, Equities and Forex Trading Broker

Aurora Global Markets is a new Forex broker company that was added to the list on my site today. It’s on-line since 2009 and offers brokerage services on almost every kind of financial market — starting from Forex and ending with the equities. They have their own custom browser-based platform, which supports charts and other useful trader’s tools. Other highlights of Aurora Global Markets include:

• Hundreds of trading instruments
• Only traders from South Africa, European Union, Canada, New Zealand and Bahrain are accepted
• Non-EU traders need to send notarized copies of ID documents
• Variable spreads on all instruments
• Regulated by FSA

EUR/USD Posts Small Change for 3rd Day

EUR/USD rose slightly today, but again, just insignificantly, hovering slightly below the major resistance line. The lack of significant movement in the dollar-against-euro pair was accompanied by the increase of the initial jobless claims in the past week. EUR/USD is now trading near 1.4222.

Initial jobless claims were at 554k last week — that’s a 30k increase compared to the previous week’s 524k. The release came out to be almost exactly the same as the forecast value of 555k.

Existing home sales increased to 4.89 million annual rate in June, following the revised rate of 4.72 million in May and 4.83 million forecast for June.

As was reported yesterday, the U.S. crude oil inventories showed another declining week — -1.8 million barrels, while the motor gasoline inventories rose once again — by 0.8 million barrels.

Money Management and Risk Management

A new trading e-book has been uploaded to my site today. It’s Money Management and Risk Management by Ryan Jones. As the title of this book goes, it’s about money management — one of the most important parts of Forex trading (and not only Forex, but any other financial trading that involves risk and probability). The author wisely divides the money management into two kinds — the proper and improper money management. Where the first type refers to the one that always keeps in mind both the risk and reward parts of each trading action, while the improper tries to amplify the importance of only one of those to vital parts. Unfortunately, the majority of traders, especially newbie traders, that see the possibilities opened by the on-line Forex market and its huge leverage, fail to see the full picture and all the more so they can’t apply the propermoney management to their trading strategy. But now you can download this book to learn more about the proper money management:

• Money Management and Risk Management

Free Professional Forex Course from eToro

From now on every trader that opens a demo or real account with theeToro Forex platform will receive the first lesson from a professional Forex training course for free. To get the rest of the lessons of this course, trader just need to contact eToro via one of the available methods to get the information on how to obtain this course for free. I’ve browsed through the first lesson of the course and it seemed quite introductory to me (as it’s probably supposed to be). There are ten lessons overall and they cover the following topics:

1. Basics of Forex.
2. A quick guide to eToro’s revolutionized trading platform.
3. Fundamental analysis.
4. Technical analysis basics, charts, chart types, timeframes.
5. Trends, trend lines, support & resistance lines.
6. Fibonacci and pullbacks.
7. Popular indicators.
8. Breakouts and swing trading.
9. Trading examples.
10. Adapting technical analysis to commodity trading.

Looks quite interesting to me, especially the last topic since I’ve been trading commodities a lot lately. You can get more information about eToro and open account with this Forex broker.

Expert Advisor Based on MACD Patterns

Another MetaTrader expert advisor was added to my site today — MACD Pattern. It’s based on the MACD patterns (Moving Average Convergence/Divergence), specifically for EUR/USD H4 chart. It shows quite interesting back-test results but, unfortunately, has also two major problems. First, it has more than 27% maximum relative drawdown (that’s more than $6,000 drop during one moment). Second, it doesn’t explicitly control bar opening and uses stop-loss and take-profit levels, which means that the backtests aren’t very accurate and the resulting data should be treated very skeptically. But 60% profit over the course of less than 19 months is quite nice. Here you can see the test results graph (click to enlarge):

A strong drawdown can be seen close to the end of the test — its reason is unknown to me, but I guess it’s tolerable.

You can also view the complete testing report. Go directly to MACD Pattern expert advisor page to download this EA or get more information about it. If you don’t like MACD Pattern, you can check other MetaTrader expert advisors.

Will EUR/USD Reach 1.5000 Before September?

Looking at the weekly chart of the EUR/USD currency pair it’s easy to say that it’s currently trading in some kind of a long term triangle pattern with the narrowing boundaries. Although, the upper boundary offers a strong resistance far below 1.5000 level, there is a high probability of the bullish breakout. Fundamental analysts talk about the inevitable dollar’s weakness that will come soon as the global economy starts to recover from the crisis. On the other hand, the U.S. dollar still remains a global reserve currency, while the euro still haven’t managed to gain the proper reputation, which suggest a bearish breakout in EUR/USD. And what do you think about it?

Will EUR/USD Reach 1.5000 Level Before September 1st 2009?

•  Yes, it will reach 1.5000.
•  No, it won't reach 1.5000.
•  I don't know.