In this video the Trader Cast looks at currency pair EUR/USD, FTSE, Dow Jones and Gold for the upcoming May 4th session.
We are starting a shorter trading week with a bank holiday in Europe on Monday and on Friday we have Unemployment rate announcement and Non Farm Payroll numbers from US which should be a very important market moving events and potentially increase volatility.
EUR/USD — Looking at the 4 hour chart we have a double bottom with neckline defined at 1.1300 level. Longer term trend from daily, weekly and monthly still pointing to fairly embedded logical resistance at 1.1294. A breakout above that level could potentially open up the way for the retest of resistance at 1.1380 followed by 1.1452. These levels would also been seen as a logical shorting levels for anybody with a longer term point of view. Also these levels would be seen as quick partial profit taking zones for anybody who is looking to trade the breakout. The other alternative is the current resistance at 1.1294 holds and price moves lower to downside then support will be located at 1.1131. A swift move lower would test the support at 1.1053 and 1.10.
FTSE — The 6920 level looks significantly supportive which correlates to 50 period EMA. We have a trendline from end of day timeframe. We could come back to 7000 level from above and if it holds as support then a price move slightly higher then we could see 7051 as upside resistance and 7083, 7100. A breakout above 7100 could open up way for new high at 7127. Alternatively if we fall below and a loss of 7000 level could open up way for retest of 6950, 6873 levels.
Gold — We had a fairly substantial breakout, consolidation and this massive rejection last week. The pullback challenged some fairly significant support levels at 1200, 1195. Once we lost those levels it becomes newly found resistance instead of support based on this trendline. This low we see in the chart has now become resistance at 1180 and thats our immediate resistance. If the price moves swiftly higher above that level we could potentially challenge further upside resitance at 1185. Only a breakout above that level and candle close above it could target further upside resistance at 1200. A sell off from current high could potentially target downside support at 1185, 1160 and 1150 levels.
In this video the Trader Cast looks at currency pair EUR/USD, FTSE, Dow Jones and Gold for the upcoming May 4th session.
After some positive movement last week the EUR/USD took a hit on Friday recording a 0.22% dip bring the exchange rate dow to 1.1199. Also taking a hit the greenback was the GBP/USD. The GBP/USD dropped by 1.32% closing the week at 1.5148. The USD/JPY fared better going up by 0.64% and an exchange rate of 120.50. Also recording positive movement was USD/CAD with a 0.68% increase in price bringing the exchange up to 1.2159. Friday closed on positive note for all major indices. The Dow went up by 1.03% to close at a market value of $18,024.06. The Dow was followed by the NASDAQ with a bump of 1.29% and a market value of $5005.39.
The S&P 500 also recorded upward movement with a 1.09% jump to close at a market value of $2108.29. Major commodities did not do as well towards the end of the week. A barrel of West Texas Intermediate fell by 0.80% followed by Brent oil with a 0.48% dip bringing the prices down to $59.15 and $66.46 a barrel respectively. Following crude oil’s lead was Gold with an ounce of COMEX dropping 0.67% and closely followed by Gold spot with a 0.50% dip. The price for an ounce of COMEX Gold is now $1,174.50 with Gold Spot dropping to $1,178.46.
In this video the trader guy looks at currency pair EUR/USD pair for the May 1st session.
EUR/USD — It could be an interesting session as Europe is on holiday, the Labor day that includes Germany, France, Italy and Switzerland. So liquidity will be a bit of issue during the large portion of the day. As you can see on the daily chart we have the 100 day Moving average plotted which is offering a bit of resistance. We also have the 1.12 area which had been supportive and resistance in the past. The area around 1.15 level looks quite noisy. It won’t surprise me if we end up consolidating between 1.12 and 1.10 level. Is it a trend change yet. I think we are getting close. So more than likely you are looking to scalp this market in shorter term timeframe like the 1 hour chart. If it could break down from here then we could see 1.11 level. This is quite choppy and has been very bearish for quite sometime. There is going to be little to encourage the bullish traders. Ultimately the 1.15 level looks like the magic number.
Capitalism is an economic system in which the free market alone controls the production of goods and services. Its key features included open competition, profit motive of producers and private ownership of property. Capitalism stands in direct contrast to government controlled economie where production and prices are set by a central decision making body. As a system based on free markets the prices of various goods are negotiated between the buyer and seller because producers have an incentive to maximize profit they tend to provide items that are relatively scarce and therefore attract a higher price.
Economist Adam Smith argue that this profit motive actually benefits society at large. He compared free markets to an invisible hand pushing producers to sports, goods and services for which there is greater need. Timothy a farmer initially wanted to plant corn but an oversupply around the world has lowered prices. Instead he decides to plant soyabeans which are more profitable because of the smaller supply relative to the demand. If too many producers make the same decision as Timothy the free market will correct itself. Soyabeans prices will go down and farmers will choose to focus on another crop or perhaps go into another crop.
Advocates of capitalism believe this system is significantly more efficient than a centrally controlled economy however critics suggest that it can also lead to wealth being concentrated in a relatively small segment of population to the detriment of other groups. In reality a purely capital system is hard to find. Even in the United States for example the government subsidizes certain industries for social and political reasons. In most transactions the only thing controlling the price is the consumer’s willingness to buy.
A Line of Credit is an arrangement where a bank offers a maximum loan amount that that the borrower can draw upon at any time. The borrower can be a individual business or government entity has the flexibility to take out as much as they want up to the maximum amount. Lines of credit have couple of important advantages.
1. Borrowers are only charged interest on the funds they draw.
This is what differentiates line of credit from traditional loans.
2. The Interest rate is often lower than that of one time loan.
For example Evan who owns his own business and therefore has a irregular income from month to month. He applies for the bank for a personal line of credit worth 10K just incase he runs low on cash for a period of time. After checking his credit history the bank agrees. If Evan draws 1000 USD from his credit line he is only charged interest on that withdrawal amount. He sleeps well at night knowing that 9000 dollars of credit is available in an emergency. If he took out a traditional loan on this amount he would be charged interest on the entire loan amount for 10K dollars whether he uses the funds or not.
Most personal lines of credit are unsecured so they don’t require collateral. Your Credit card is an example of unsecured line of credit. The popular home equity line of credit is an example of secured line of credit for the bank places a lead on your property. The lender takes on less risk offers a slightly lower rate. One pitfall of credit line is that borrowers maybe tempted to draw more than they actually need since the funds are readily available. As with loans borrowers should evaluate the pros and cons before applying.
Very few investors are going to put money into a particular security or project if they don’t know what the minimum return on their investment will be. However there is some assurance out there and it is called Required Rate of Return. It helps investors where to put their money and allows them to compare the return on their investment to all other options. They can do this by taking the risk free rate of return, inflation and liquidity into account.
For example an investor requires a return of 6% a year to consider investing in a security. This assumes that this investor can sell the security and inflation remaining at 2% per year. If this investor does not receive a 6% return which is really 4% after inflation then the investor is better off putting the money into a risk free investment that earns 2% per year. The investor understands that returns on stocks are not guaranteed and can only invest in them if it earns a 4% premium over the risk free option. The required rate of return is extremely subjective. Its different for every individual and every company depending on their tolerance for risk and their goals for investing in the first place.
Hantec Markets brings you the latest technical analysis on the GBP/USD pair for the April 30th in this video.
GBP/USD — This huge rally for the last 2 weeks on cable has had a massive impact with 1.5550 is a huge resistance on cable now. A break above this resistance level changes the outlook on cable to positive for the long term. We had constant gains for 7 consecutive days and we are now in the 8th day. The daily momentum indicators are in positive configuration. If the cable can start to survive above 70 on RSI then it would suggest that bulls are still holding on to the more positive outlook and we could see a test of 1.5550 level. If they take profits at the RSI at 70 level then cable could drift sideways. The general elections in UK could also have a big impact on this chart. Looking at the hourly chart the 55 hour moving average has been a basis of support and it comes at 1.5350. Also the reaction low at 1.5390 level looks interesting. Lots of action, volatility and data to come out today that could drive this pair today.
The Wall Street finished in the red as Federal Reserve cited weakness in the American economy. The Dow fell by 0.41%, S&P 500 by 0.37% and NASDAQ lost 0.63% from its value. The US Dollar traded low against most major currencies after data showed that US economic growth slowed sharply in the 1st quarter. The Advance GDP came out at 0.2% vs. 1% forecast and Federal Funds Rate unchanged at 0.25%. Today the Unemployment Claims is expected at 287K vs. 295K previously. Gold fell back slightly to close at $1,204 an ounce. Crude oil rose to its highest level since December to close at $59.55 a barrel.
The Euro rose to a 8 year high versus the US dollar after disappointing US data. According to 8 hour char the pair is close to strong support level at 1.1012 and very positive RSI indicator above 50. Maintaining these conditions may see the pair to move towards 1.1250. However breaking the support may see a reversal and the pair fall to around 1.0850. The Pound rose versus US Dollar. According to daily chart the pair is trading above moving average 10 towards strong resistance level at 1.5520. Holding above moving average may lead to an attempt to breach the resistance and further rise to around 1.5750. Failure to breach the resistance may start a fall to around 1.52.
In this video the Daily Forx looks at currency pair AUD/USD pair for the April 30th session.
AUD/USD — We have a very interesting session today, seen as a good day to lose money. But a lot of people saw this candle from the previous session on Tuesday saw us break above there and looking at the move, probably thought it could straight up to the moon. However that has not been the case. We formed a bearish candle, a shooting star. The 0.8000 level has been significant on longer term chart for sometime. Infact we formed a shooting star here makes me think that we may see a significant sell off. If we can break below the bottom of this candle, I don’t see any reason why we don’t go down to 0.7850 region or so, possibly even lower. What I found interesting about the session is that the US Dollar sold off drastically after weaker than anticipated GDP numbers, which makes sense but at the same time you have to keep in mind that the Australian dollar is a commodity currency, a risk appetite currency.
If the US GDP is bad and GDP of every other economy is bad then who is going to buy copper, zinc and other minerals that Aussie supply to the world. If it is the case then aussie has no business going higher. I think that we are about to see a pullback. If we break below the bottom of the shooting star I am shorting this pair. I have no interest in buying this pair at the moment. So it looks like a sell only market to me.
Hantec Markets brings you the latest technical analysis on the GBP/USD pair for the April 29th in this video.
GBP/USD — Looking at the daily chart this rally in cable is incredible. It has moved about 800 pips in the last 2 weeks from the low of 1.4560. It does not show any signs of stopping. The Flag pattern projection gave us a target of 1.5340 and we have acheived that target now. The daily momentum indicators look positive at the moment. I don’t think this is a bull market yet. Until we see a break above 1.5550 level it is not seen as a reverse in trend. Looking at the hourly chart the outlook is bullish in the near term. The hourly momentum indicators also look positive configuration. It is seen as a near term buy situation with the 1.5550 as big resistance overhead.