Monday, July 8, 2013

Effect of Non Farm payrolls last week

Last week Friday Labour market performance surpassed expectations and pushed American stock indices. Standard & Poor's 500 index was the biggest gain in three weeks.

America's largest companies stock price changes locks Standard & Poor's 500 Index last week's trading session came to 1.02%. During the week, the index jumped 1.6%.

Industrial share price changes shows that the Dow Jones Industrial Average index had 0.98% gain. Total purchased and sold about 4.95 billion shares, which was almost a quarter less than the three-month average.
Investors cheered the U.S. Labor Department data showed that in June the U.S. employed 195,000 people, vol. y. far more than analysts had expected. For example, Bloomberg news agency surveyed economists predicted that June will create 165,000 jobs. In May, they created 175,000. True, the unemployment rate remained unchanged at 7.6%.

"Labour market indicators quite strong, while the stock markets are favorable. True, we still have to come to terms with bond yields. We'll see how high it will rise "- Says Matthew platforms, Northern Trust Corp. Share trading guide. The Company manages the investment of approximately 810 billion USD.

Even before the publication of labor market indicators, investors will gladly bought according to the knowledge of Europe. Important news for investors was the European Central Bank President Mario Draghi's words, that interest rates will remain low. According to p. Draghi, key interest rates will be maintained at the same level or even decline as long as necessary. Bank of England manager also suggested that the retention of record-low interest rates.

Investors are in wait for performances of companies. Traditionally, the first public performance of the aluminum giant Alcoa Inc. ' This is going to take place on July 8, after the end of trading day.

Monday, July 1, 2013

Forex news

This is the second post on the topic of Forex. I want to discuss the second best topic on Foreign Exchange market and that is Forex news. This is the driver of most strong market moves that are inspired by fundamental news releases. Most people would advise you against trading fx events and they might be right. Newbie traders get burned when they try to capitalize on Forex volatility and enter the market that is inspired by this or that macroeconomic event. Old and experienced traders know what it is to have an open position and get burned when market turns against you and you are in a loss of thousands of pips.

You can go to any Forex provider, find economic calendar on their page and check what important news events are scheduled for the week. Some of the most famous websites to do that could be dailyfx, Forex factory,, fxstreet, myfxbook, forexyard or forexpeacearmy. Choose the one you like most, or two and each Sunday check what events are to be released on the coming week.

What are some of the most important Forex news releases? The first would be interest rate decision. Most central banks do it once a month or once in two months. This is the key to fundamental analysis in currency trading. Quite often these are followed by press conferences where central bankers share their view of economy. In most cases these post release events are even more important than the events themselves.
Consumer price index would be second, because it measures inflation in a country and as you know inflation is very much connected to increasing or cutting interest rates.

Producer price index comes next as it directly influence consumer price index and might be a generator of inflation.

Retail sales, although not so important it does create big market moves from time to time. Employment indicators are of high importance as they measure the health of employment sector and of global economy on the whole. Non Farm payrolls should be mentioned separately as it is the biggest driver in employment numbers. By the way, it is coming this Friday.

Other less important, because they create less volatility are: consumer confidence data, durable good orders, beige book and a few more. Some data has no influence to the markets at all.

So, next time you think about opening a trade look at the calendar if there are no economic releases scheduled in the horizon.   

Friday, June 28, 2013

Major Forex pairs

I start the blog by discussing major Forex pairs. There are a lot of currency pairs that you can speculate on, but it is important to find the ones that fit your trading style best. Why? Because, volatility, turnover and volume vary in those pairs and various market participants trade those. So, each pair can behave differently and so you should trade them accordingly. Before we go on to major Forex pairs I have to say that there exist so called minor or crosses that as I have said have much smaller volume, but can still present you with a lot of opportunities. But I will talk on the crosses in my next post. So what are the majors? Let us take them one by one.

The king of Forex: eur/usd pair

This is considered one of the best pairs and it gets the biggest turnover in the market. Some statistics in the past said that it takes around 34 percent of transactions of all market volume. That is why it can be called the king of Forex. The pair can be easily analyzed both fundamentally and technically.

The second spot for: usd/jpy

It is very volatile pair and not so orderly as eur/usd. You can see a lot of choppy price action in Dollar Japanese Yen pair daily. Statistics say that it takes around 12 percent of all transactions in the Foreign Exchange Market. So, you can easily trade a lot of standard lots in the pair and just as easily get out of your positions as you got into them.

The bronze medal for: aud/usd

It is strange, because I thought that it should go to gbp/usd, but I was wrong. So, Australian Dollar and US Dollar pair gets 11 percent of all market orders. It is also rather choppy like usd/jpy pair, but forms very nice ranges and you can trade reversals at the tops and bottoms.

The fourth place is for: gbp/usd

A lot of traders like Pound pairs, because they are extremely volatile. British Pound and US Dollar pair gets about 9 percent of volume in fx market. It is second best to eur/usd in terms of technical patterns and the way it moves.

Fifth place for: usd/cad

Canadian dollar is probably the champion of choppy price action. I hardly ever trade it. However, it gets about 7 percent of market volume daily. Quite a thing!

Sixth place for: usd/chf

US Dollar and Swiss Franc pair very much resembles price action of eur/usd. We can say that whatever happens to eur/usd will also happen to usd/chf. So, if you do not like eur/usd, you might consider usd/chf for a change. It gets about 3 percent of daily market volume.

Seventh place: nzd/usd

It gets much smaller volume and is usually placed together with currency crosses in terms of volume, but as it is US dollar denominated pair it is among the majors. It forms nice trends and often goes shoulder to shoulder with aud/usd pair.

Next time I will cover some of the main Forex crosses. Well, maybe all of them!