FX Trade 24×5

The Foreign exchange market or forex market occurs wherever one foreign currency is traded for another. It is the largest market in the world with daily trading of US $1.9 billion. Individuals actually make up a very small part of this market and when they do participate they do so through a broker or other professional trader. In order to play the trading game, one must know how to forex forecast correctly. There are two major ways to do this: technical analysis and fundamental analysis.

To forex forecast using technical analysis, you must understand a variety of technical analysis tools. Such tools include the relative strength index (RSI), stochastic oscillator, moving average convergence divergence (MACD), number theories, waves, gaps, and trends. The RSI, stochastic oscillator, MACD, gaps and trends are all extremely common technical analysis tools for those trying to forecast as well as play the stock market. While these tools can be used for the stock market, they can be used equally as well in forex forecasting.

Both the RSI and stochastic oscillator measure whether a currency is overbought or under-bought. The MACD on the other hand measures whether or not a trend will continue going up or down. When using charts to forex forecast, one may notice gaps between the bars. This occurs when no trading took place and an up-gap usually represents a strong market force, while a down-gap will indicate the opposite. The trends or Trendlines indicate an upward price movement or downward price movement based on the peaks and troughs of the trendline. None of these technical analysis tools require you to do the math. There are plenty of charts services on the web that are either free or require a fee that can do these calculations for you.

Other technical analysis tools that were mentioned include number theories. The two main number theories are the Fibonacci and the Gann. The Fibonacci numbers involve adding numbers to come to a ratio of 62% that is a popular retracement number. The Gann numbers are based on the theory of W.D. Gann who during the 1950s made an extraordinary amount of money performing forex forecasting. Gann used a variety of forecasting methods in order to measure price movement and time. These are presently known as price/time equivalents. To learn more about technical analysis tools and how to use them, one can turn to the web or their local bookstore. There are plenty of sites and books whose goal it is to teach people the art of forex forecasting. Keep in mind, that forex forecasting using technical analysis is not easy and it will require a great amount of studying. When it comes to performing technical analysis, some people prefer one analysis tool to another and this is not an indicator of which method is actually better. It is just a matter of personal preference.

The other method of forex forecasting, fundamental analysis, involves using factors outside of charts and numbers. The factors include political, environmental, and economic issues. For example, if a hurricane hit the United States coast and shut down a lot of major refineries the result on gas prices could influence the strength of the dollar. The fundamental analyst looks at the big picture of a country and the world and they must be extremely familiar with political, economic, and environmental news around the world. Fundamental analysis is not for someone who picks up a paper once a week. It requires devotion and a true interest in issues around the world.

When forex forecasting, some people choose to use either fundamental or technical analysis based on what works the best for them. However, it is probably best if you have strength in one method of analysis, but still reference the other. This is because there is not one single method that will provide you with the right answer. Also, while the technical chart may show a strong currency, if you are not aware of political and economic issues within a country then you could be blindsided, thusly losing a lot of money. Prior to forex forecasting, you should practice by paying attention to trading levels and picking your entry and exit points. When you feel you have reach a good point in successful forex forecasting practicing then you can move on to real forex forecasting.

The largest market in the business world consists of the trading of foreign currency. Foreign currency trading, often abbreviated as FX, Forex or foreign exchange, is considered a “liquid” market, meaning that there is actually very little actual market trading going on while trading foreign currency—most Forex online trading is purely speculative, with only a small percentage of actuals translating into companies’ or governments’ conversion needs. In a liquid market, assets are converted very easily, with very little loss into cash, yet there is enough account activity going on to satisfy both the sellers and buyers competing in the market. The Easy-Forex system, an online Forex platform, is designed to assist potential Forex traders in their daily dealings, making the process as smooth as possible. With Easy-Forex, there is no Forex software to download, and potential traders can begin dealing in just minutes.

For the most part, foreign exchange is traded on margin. Margin consists of a deposit used to secure an open position in the market, and the amount of foreign currency available to the trader to deal in depends entirely on their margin. With Easy-Forex, traders can deal in small amounts easily—even as low as one hundred United States dollars. This smaller, safer trading amount would be unheard of at banks or with competing Forex online platforms. In addition, potential traders have the option to use their credit cards to fund their margin deposit, making it simple to begin trading in minutes.

With Easy-Forex, there is a qualified staff ready to assist traders with anything they might need, and unlike so many other internet marketing businesses, there are real people waiting to take troubleshooting calls or emails. In addition, beginning Forex traders can take advantage of the option for live help and one-on-one Forex training straight from the experts to ensure they will be properly equipped to utilize the Forex market to their advantage. Moreover, the trader will be assigned a personal account manager who will act as a live operator during the trader’s first activity on the market, guiding them through their first steps in Forex trading.

On the Easy-Forex web site, located at www.easywayforex.net, all the resources potential traders need is just a mouse click away—Forex trading members can log in to easily get up-to-date currency exchange rates, as well as view forex news, stock feeds, and crawls on the main page, keeping them in the loop on what is going on in the market. Using the Easy-Forex system, potential Forex traders will be far better equipped to avoid the high risks and potential pitfalls of Forex trading, especially with all the control www.easywayforex.net offers over their account activity, such as surgically precise take-profit and stop-loss rates, ensuring that each deal is closed at the precise take-profit rate, and the trader will not lose any more than their stop-loss amount at risk. With just a few clicks of a mouse, any hopeful trader can access the largest market in the world, with potential profit at their fingertips in minutes—the Easy-Forex way.

To your success

http://www.easywayforex.net team

The foreign exchange market or forex for short is a trillion dollar business that encompasses the trading of any and all the world’s currencies. Individuals who trade in the forex market usually do so through a trained broker or other professional. You must be kept up to date on forex information in order to trade in the forex market. This not only includes such things as the value of a particular currency, but you must also be kept well informed of the world’s economic, political, and environmental news. For example, unlike the stock market where you may have insider trading or secrets, there is very little of this in the forex marketplace. This is because the forex is a reactive marketplace that gets its strength from real cash flows and also the flow of the Gross Domestic Product (GDP), interest rates, budgets, and trade deficits. Many of these things, especially cash flows, can be a result of a natural disaster, gas prices, and can even be seasonal such as during December when people tend to spend more because they are purchasing Christmas presents. Therefore, since the forex is so reactive, no one can truly know what will happen in the forex marketplace, no matter how seasoned they have become at forex forecasting.

Of course, keeping up with the entire world’s political, economic, and environmental news can be taxing since there are only so many hours in a day. You could attempt to keep up with this and other forex information on your own, but you would have to read a lot of newspapers and watch the news a lot. A simpler way to stay up to date on forex information is through websites that are devoted to forex information. There are a variety of forex information sites on the web, and your level of forex expertise will ultimately determine which forex information sites you visit.

When you are starting out in the forex marketplace, you should look for a site that provides forex information such as up-to-the minute headlines, as well as education tools. One of the best sites for forex information is Forex Knowledge.com (www.forexknowledge.com). Obviously, one of the draws to this site is the up-to-the-minute news and the excellent charts, but there is also a knowledge section that allows visitors to learn about the forex market, how to get started, history of the forex, and a forex introduction. Below the educational section, visitors will find information on the fundamentals of the forex market. This section contains information on the PIP, how to read prices, country currency codes, and there is even a glossary of forex terms. Visitors will also find forex trading tools that include articles on technical analysis, market awareness, and trading strategies. For the seasoned forex investor who only needs the up-to-date news, charts, and quotes, the website Forex Markets.com (www.forex-markets.com) will be useful. While the forex information found at this site will prove indispensable, the chat forum, where each day hundreds of messages are posted, will prove equally as useful. This allows users to not only obtain forex information from the website but also from colleagues. The forum is open to all users, and registration to use the service is free. Prior to participating in the chat forum, users must keep in mind that the chat forum is not a chat room and should not be treated as such.

Trading in the forex can be quite lucrative if you know and understand what you are trying to accomplish. No matter what your intentions are, forex information is vital to your success. If you are just getting started in the forex marketplace, it would be smart to take it slow and learn about the forex as well as how to interpret and apply forex information.

Forex trading analysis: what goes on with the markets?

The economic situation in the US might be giving off signals indicating a recovery from the financial crisis, but the US Dollar is not destined to fair very well.

While there are countless analysts who are forecasting a rise in the Dollar in the months to come, there is a an evolving group of traders who are expressing genuine concern over the Dollar’s long term prospects.

The bottom line of this concern is based on the reality that the large amount of money the US has used in order to dig from out of the financial avalanche will come back to haunt them in the form of Dollar weakness.

The Wall Street Journal reported only a few days ago this exact sentiment, and the notion that it presented has taken off and was widely discussed on business shows where onetime Dollar hawks have been pouncing on the notion that it can survive and thrive moving forward.

The truth is the US debt load is too heavy, it is unbearably large and it will affect the future of American business as it relates to other countries.

Import and export prices might skyrocket as a result of inflation, new taxes might be levied to help pay off the debt, basically we might see an economic recovery that will be highlighted by a weak and struggling Dollar – which will in turn bring on another crisis.

I am in no way suggesting that the Dollar will fall – for now the US is too strong for that, but I am saying that they are on the right path to having that happen.  Obama’s policies are beginning to cause issues for his popularity.

His Democratic congress is not secure in their jobs as more and more people express dissatisfaction with the spending.  His honeymoon is over.

Forex Trading bloggers have been more and more critical of his policies as the world emerges from the darkness of the recession and seeks “something else” to invest in. People who deal with online Forex traders have also been keen to this – as the news becomes better the Dollar becomes weaker. And this is a trend that I believe will continue. 

Analyzing the USD. More contradictory data came out on Wednesday, this time a disappointing Durable Goods Orders report. 

The bad news helped propel the Dollar to shake off all of this weeks losses as investors retreated from their riskier investments into the relative safety of the Greenback. 

The past few weeks has been difficult for investors, hearing things are getting better but not seeing the supporting data for those claims. 

Home sales rose 9.6% as well it was announced on Wednesday, however most of the rise was due to foreclosure sales and government auctions of foreclosed properties owned by defunct banks.

At 11:00 PM GMT, the Dollar was up .32% to the Euro to 1.4249, up .005% to the Yen to 94.2, up .7% versus the Yen to 1.6244, up 1% to the Canadian Dollar to 1.0971, up .9% to the Australian Dollar to .828, up .4% to the Kiwi and up .65% to the Swiss Franc to 1.0679.

The Chinese stock market has all but collapsed the past several weeks, falling off nearly 25% in a six week span overall capped by a 6.7% drop yesterday. The causes for concern in the Forex world relate specifically to the Dollar. 

As you might recall from several weeks ago, I spoke of the Chinese selling off some of their US treasuries and diverting that money to support their commodity purchases. 

This tactic is proving to be detrimental to the short term stability of the Chinese economy as with the information on the  stock exchange shows that industry is not moving which means the metals and durable goods  they are buying are sitting in warehouses instead of feeding the economic machine.

For the Dollar this is a signal that could spell out a difficult Fall/Winter once again, as China commits more money to helping their own corporations and diverts more and more funds away from Treasuries. 

Already, the US has held three Bond issue auctions in which the Chinese bought nothing – a fact that is not getting as much attention at this stage than it should.  I would bet, since my blogs have been a few weeks ahead of the mainstream news, that this will become a bigger deal in the coming months as more auctions go by and China continues sitting on the sidelines.

Aside from this we have the British Economy which is sputtering along as it seems the politicians are doing nothing. Political sensitivity aside, the Sterling has been suffering because the establishment in Parliament is still trying to get over a spending scandal which dominated the headlines for two months. 

They are timid and afraid to do anything significant for fear of more backlash, so they are also sitting and watching.  What Forex investors need is a clear sign from government that they are doing something, being proactive and working to turn the economy around instead of hoping that it will all by itself.

This week will be a slow one, many in the US are off for the week and Europeans are spending the last week catching the remnants of the summer sun. The ECB meets this week – don’t look for anything shocking there – they too are catching rays.

JPY. The Japanese Yen rallied on Monday as a 6.7 percent fall in the Shanghai Composite Index in China sent investors to the relative safety of the Yen for safety and was a big factor on the higher-yielding currencies most of the day. 

The Yen also rose in part on a post-election rally that saw the opposition party take over for the first time ever. The winning party called the Democratic Party of Japan is widely seen as to favor broader spending in government run social programs and economic stimulus programs. 

At 11:15PM GMT, the Yen was up .6% to the US Dollar, up .3% to the Euro to 133.43, up .35% to the British Pound to 151.71, up .43% to the Swiss Franc to 87.95 and up .2% to the Australian Dollar to 78.68. 

More Forex trading news. Trading was extremely quiet all around as the British markets were closed for a public holiday and many American’s on vacation in advance of the Labor Day holiday which marks the unofficial end to summer. The primary focus this week will be on the European Central Bank policy meeting on Thursday and the US non-farm payrolls figures which are due to be released on Friday. 

The Sterling fell 2.6% in August against the US Dollar, the largest fall of the year for the British currency.  The UK outlook is uncertain in traders eyes, despite official efforts to portray the situation as improving. Disappointing data, growing unemployment and rising consumer prices are cited as sources of the uncertainty.

The Chinese Shanghai Composite Index was down nearly 25% in the past 40 days which has raised concerns with American economists about the interest China will hold in future US treasury auctions. Their answer might come sooner than expected as they will have their first opportunity next week to see what, if any affect the drop has had.

It is becoming increasingly easier to pick a winner in the Forex market – and when I mean easier I mean, short the US Dollar.

The US Dollar dropped to its lowest point in a year against a basket of currencies on Tuesday after broad gains stocks brought a return of risk appetite.  Trading volume was markedly higher as investors returned from their vacations and began to assess the happenings of recent weeks.

The Dollars fall was also sparked by the rise in commodity prices such as gold which traded above $1000 for the first time since February.  Concerns over the USD’s status as the reserve currency were also a factor as a report by the United Nations which called for a new World Reserve System diminished the demand for the Dollar.

 at 11:15PM GMT, the Us Dollar was trading down 1.14% to the Euro to 1.4494, down 1% to the Japanese Yen to 92.23, down 1% to the Sterling to 1.6494, up .07% to the Canadian Dollar to 1.0785, down .8% to the Australian Dollar to .8622, down .5% to the New Zealand Dollar to .6959 and down 1.4% to the Swiss Franc to 1.0463 

The US Dollar dropped to its lowest point in a year against a basket of currencies on Tuesday after broad gains stocks brought a return of risk appetite.  Trading volume was markedly higher as investors returned from their vacations and began to assess the happenings of recent weeks.

The Dollars fall was also sparked by the rise in commodity prices such as gold which traded above $1000 for the first time since February.  Concerns over the USD’s status as the reserve currency were also a factor as a report by the United Nations which called for a new World Reserve System diminished the demand for the Dollar.

At 11:15PM GMT, the Us Dollar was trading down 1.14% to the Euro to 1.4494, down 1% to the Japanese Yen to 92.23, down 1% to the Sterling to 1.6494, up .07% to the Canadian Dollar to 1.0785, down .8% to the Australian Dollar to .8622, down .5% to the New Zealand Dollar to .6959 and down 1.4% to the Swiss Franc to 1.0463

The Australian Dollar has been stellar in the past few months, and I have made no secret of my love for this currency. But, it is the US Dollar that has now caught my eye as the most lucrative trade, whichever currency it is paired up with, if you happen to be on the short side of things you have been doing quite well.  Even against the pathetic Sterling the Dollar has been losing and I do not foresee this changing anytime soon.

One reason for this is the new development out of the United Nations, which openly called for a “new World Reserve” currency system – a new world order of things if you will.  Now, keep in mind the UN has not been a fan of the US for some time now, despite the US paying most of its bills and being a staunch supporter of most of its social programs such as UNESCO and UNICEF.  The world hates the top dog and if it were not for the veto power the US holds, I know there would be much more open criticism and dare I say, sanctions, against the world’s largest economy. 

But the announcement from the UN comes on the heels of President Obama deciding that he will be the first sitting US president to chair the all powerful (I am being cynical here) Security Council.  In a gesture meant to help bridge the gap between the impression the world has on the “stuck-up” and “maverick” United States, the President wants to approach the world stage with an open hand and show that we can all work together.  Now, I will bet that this move has less to do with nuclear proliferation than it does the UN’s call yesterday – but I am not qualified to make such an accusation.

In the online Forex marketplace we have seen the Dollar start its collapse.  China, which had kept mum on its concerns over the Dollar for a few months, is also back into the picture.  Speculation is that their $2 Trillion Dollars in USD reserves is being liquidated quietly and relocated to gold – which would explain the sudden increase in the shiny commodity.  Aside from this, they are also becoming vocal once more, sending a top Communist party official to the media using words like “dismayed” to describe how they feel about the US’s free use of the Treasury printing presses to cover their bills. 

Cheng Siwei, a top leader in China told the UK’s Daily Telegraph that Beijing was being compelled to redesign its foreign currency reserve policy.  No doubt this is having a grave affect on the USD  and it is the reason why I believe that no matter what the data shows about a recovery, the USD is destined for a downward trend in the coming few months.  China does not do things half assed, and you can bet that this is not the last we will hear about discontent from the US’s largest lender.  The season is ripe for a controversy – its September, and historically it has not been a good month for the USD – my bet is that this will be one of the worst on record.  Sit back and short – you won’t be sorry you did.

Christian Noyer, the ECG governing council member said specifically that he did not believe that there was room for overly optimistic sentiment at this stage. He said that there have been signs, good signs that the economy is rebounding and doing so at a faster rate than anticipated, although these facts are puzzling to the board right now. 

I equate what he said to a man who’s legs were badly injured in a car crash – the doctors say he will walk again, although it will take a long time of hard work and physical therapy, to rehabilitate them.  Just because he begins to wiggle his toes sooner than doctors thought, or just because the feeling returned to his calves does not mean that he will be running a marathon anytime soon – or walking unassisted to the bathroom for that matter.

The economy was hit hard, and there was much damage, internal and external as a result.  There are many elements to this crisis and just because some areas are improving at a faster pace than was thought, does not mean the system as a whole is poised for such a rapid recovery. 

We all need to put these things into perspective.  Noyer was very clear in his caution, he said that the Central Bank and local governing bodies needed to holds steady on fiscal stimulus policies as right now, this is the one thing that is helping the growth.  

Many on the street, online Forex traders and online Forex bloggers included, are anxious to have the governments stop funneling money in to the economy at such a rapid pace and they point to the “recovery” at hand as proof that it is no longer needed.  What I got from Noyer’s statements was that if you eliminate the monetary intervention into the economy at this point, you lose the recovery.

I am not a fan of many of the stimulus packages that were introduced around the world.  I am a free market capitalist in my basics and I was anti-quantitative easing policies in the beginning – and to a large degree still am.  But I do admit that to an extent it has helped certain industries and is the reason why GDP in some countries are on the rise. 

There are still dangers out there and we need to understand this.  Patience here will prove to be virtuous.  And as for the media outlets that are mincing words and leaving out meanings that can only be derived from the tone of voice and circumstances under which things were said, they are simply looking for a good story to tell. 

I have and always will caution my readers to take what they read at face value and if they want to really know the deal – research and read and form your own opinion.  A well informed trader will always be successful. 

Trading the EUR. The Euro rose broadly on Wednesday in the Forex arena, after European Central Bank Governing Council member Christian Noyer said that the world economy is improving at a greater rate than initially predicted. Noyer prefaced his comments though by warning that Central Banks still need to be weary as not all of the signs are positive.  His cautious optimism came on the back of a revised growth estimate from France which is now predicting a .3% increase, up from an estimate of no (0.0%) growth.

At 11:00 PM GMT, the Euro was up .56% to the US Dollar to 1.4552, up .26% to the Japanese Yen to 134.01, up .25% to the British Pound to .8799, up .9% to the Canadian Dollar to 1.5731 and up .55% to the Australian Dollar to 1.6893.  The Euro was down slightly, .07% to 1.5154, against the Swiss Franc.

At the last BoE meeting, sterling got some measure of relief as the bank decided not to move forward with rumored measures to cut the deposit rate for banks who held their reserves at the central bank.

Today, however, the Bank confirmed that it is considering making such a move and GBP took an enormous hit versus the broader market, swooning all the way back below 1.6500 vs. the USD and sending EUR/GBP to a new since June. 

The purpose of such a move is to jump start lending by the banks, who are hoarding capital as they try to repair their balance sheets and all manner of ugly assets they still contain. The very weak sterling yesterday came with very little to no news flow and one has to wonder if someone was in the know beforehand – very suspicious.

In any case, the pound has been very consistent inthe Forex market in reacting to every move from the BoE during this part of the cycle.

Let’s see if EUR/GBP pays any to the 200-day moving average up around 0.8885, just above today’s high thus far.. This sell-off in GBP/USD has been rather damaging to the up-trend – see more in today’s chart. Meanwhile, the RICS House Price Balance number was far better than expected and suggested that more estate agents are seeing rising rather than falling prices in the housing market.

The RBA statements at its last meeting at the beginning of this month were far less hawkish than expected, suggesting that an October hike the market was trying to price in was somewhat premature. The minutes released overnight confirm that the RBA’s trigger finger is less than itchy at the moment, as it sought to avoid “premature tightening”.

It is a bit surprising to see AUD not biting a bit more to the downside on this story and recent, less than inspiring data from the Australian economy. It looks like Aussie traders are following the moves in risk appetite in equities (scratched to new highs yesterday) and gold, which has recently topped the 1000-dollar an ounce mark.

The Fed’s Yellen was out with a rather dour speech about the economy and warned that deflation risk was greater than inflation risk. She recommended that the administration do more to support job growth. Meanwhile, Obama is going a bit out on a limb by declaring that the job losses are “bottoming out” .  Meanwhile, the treasury is considering unloading its share of Citibank for a significant profit (if it can get current market prices). Now if that isn’t a signal that the rally in equities has moved too far, we’d like to know what is?

The German ZEW was uninspiring, with the current conditions part of the index still rather gruesome, even if the expectations part of the survey notched a marginal new high for the cycle. This survey is symptomatic of the kind of hope that is out there for a strong recovery and suggest show much optimism is already priced in here. The expectations component has topped out around 70 three times in the last ten years, so we are already most of the way to the “top” after bottoming out at a remarkable -60 in October of 2008. It’s great if reality turns out to be so rosy, but scary to contemplate the disappointment if the future proves more humdrum.

The US data was far stronger than expected in the headlines and saw the paradoxical re3action of the USD heading weaker after the data (USD moving in inverse correlation with risk appetite, bla bla….), though not convincingly. This is getting a bit silly – if the US is really in recovery mode, then this should eventually be a positive for the dollar.

Looking at the internals of the retail sales data, it looks like much of the strength outside of Autos and Gas was due to back to school shopping (strength in clothing, general merchandise, book and sporting goods stores). The US PPI rose more than expected and bonds are selling off heavily, boosting USD/JPY to new highs on the day. The JPY will be very sensitive to any further sell-off in fixed income. 91.75/92.00 looks like a key area of resistance for that pair.

More Forex Trading Analysis: Moody’s came back yesterday to haunt the British Treasury.  Nearly six months after the rating agency lowered the rating on the sovereign nations debt, they came back yesterday with a warning that the country will be in negative territory for the next year to year and a half.  With all the whispering about the true state of the UK economy, publicly seen as stabilizing while privately seen as fledgling, the independent auditors at Moody’s has seemingly undermined political efforts to paint a brighter picture.

The result of this effort was a drop across the board in the Sterling, which has not performed as bad as it could have been after the parliamentary corruption scandal of the early summer.  In fact, British lawmakers have been scarcely seen on television or the newspapers for that matter, keeping a low profile to avoid any further scrutiny that could bring back the calls for a House of Commons overhaul.  To this end, even the Exchequer, Alistair Darling and Prime Minister Gordon Brown have been less than visible since the scandal – only talking when necessary and not really saying much when they do.

It should not come as a surprise that Moody’s found the British economy in bad shape and is forecasting a bleak immediate future.  With record unemployment, manufacturing and exports down to 50 year lows, cost of basic goods rising considerably and increasing poverty at the middle class level, it is a given that they are in trouble.  However, the opinion I hold on the fate of the Sterling in relationship to the current economic climate is bold, by any accounts, and contradictory to the Moody’s report.  Here is why:

I believe that the Sterling is one of the most fairly valued currencies in the Forex Trading Market out there at this moment because of Gold.  The UK spent hundreds of years pillaging and plundering the nations of the world for every natural resource it could find, especially Gold.  So the past 60 years has seen the Brits give back the land they occupied, the deals did not include the treasures.  The UK has by far one of the largest collections of Gold reserves, next to the Vatican of course, and the price of this precious metal has been on the rise topping $1000 per ounce last week.

Even if the economy spends another two years in depression, the value of the Sterling can be stable based on their reserves.  I am not a fan of the British economic policies and I do believe that the ease in which they have gone about spending citizen funds on bailouts has contributed to their situation, but I must respect the almighty Sterling – it has for a long time, and will for a long time to come, be worth every penny (or should I say quid?).

This week has been a strange and yet interesting week on the Forex.  The volume has been incredibly light due to end of summer festivities in the US and Canada and Western Europe, however the flow of data and information has not ceased. 

We have seen officials declaring the recession over, and yet only a few hours later a piece of Data comes out that contradicts that idea. And we have seen the Dollar getting bounced around.

September in the stock market is normally the worst month, about an average of 3% loss are recorded each year since 1929. While October is the “crash month” (last year alone the market fell 13% in October) the downfalls are few and far between – so September is the hard month. 

A reason for this is that people come back from vacation and pull back their investments to gage the market and see what has happened – a portfolio reshuffle is how brokers define it. 

In the forex trading though it is different: A down market typically means a stronger currency and although this works out most of the time, this year, 2009, we are not seeing this trend.

The worries that investors have now are no longer just about which company will do better next year, or which company is poised for a breakout, the concern is based on governmental activities and it is affecting the Forex’s relationship to stocks. 

As currency is a true indicator of how strong a country is economically, traders have begun translating this into their stock holdings as well. 

Which company will be most affected by government legislation or which organization will fall under a new law or which bank will need money? 

The Dollar has been falling this month – in tandem with the US stock markets.  The question remains for Forex traders, will this trend continue and if so, how low can it go?  

The Dollar fell broadly on Wednesday, in the online forex market, after an informal data release showed a higher than expected rate of unemployment. 

US employers in the private sector shed 298,000 jobs in August according to the ADP payroll report. The Dollar initially rose on risk aversion sentiment, however continued fears over the mounting governmental debt load along with a very light volume combined to bring the Dollar down in late session trading. 

The ADP jobs report is an early indicator of how the official government “non-farm payroll” (NFP) report will look. 

The NFP report is set to come out on Friday and includes both public and private industries.  The consensus on the street is that 225,000 jobs will be reported as lost, although with private industry alone shedding close to 300,000, the NFP is likely to disappoint.

At 11:00 PM GMT, the Dollar was down .42% to the Euro to 1.4282, down .9% to the Japanese Yen to 92.15, down .85% to the British Pound to 1.6286, down .05% to the Canadian Dollar to 1.1041, down 1.2% to the Australian Dollar to .8357 up .2% to the Kiwi to .6736 and down .55% to the Swiss Franc to 1.0594.

The USD/CAD currency pair is up challenging that 1.1100/20 area again on weakness in the commodity currencies and a new sell-off in oil. A close above that level looks significant for further progression towards perhaps 1.1400 or more. 

The 55-day moving average is up just above 1.1100 as well, but the USD/CAD doesn’t seem to have much of a habit of paying attention to that number.

If oil continues below 67 dollars a barrel and equities remain in a sour mood, it’s hard to see the pair not continuing its ascent. Structurally, the failed attempt to maintain new lows below 1.0800 recently has neutralized the old bearish trend, but we’ve no bullish confirmation just yet. 1.1120+ would be a first step.