1st on Forex

US GDP and Unemployment Figures:Good? --> Oil: Bad?

Volatility was muted as GDP and Unemployment numbers came in with no surprises and barely fazed the currencies.

GBP-USD 1 Minute Chart 11am EDT

Triangle Patterns Can Work on Any Time Frame

US Oil inventories came in unexpectedly lower than expected and their was a slight pop on the charts - for about 5 minutes

FDIC: "Take your Lumps!"

CNBC's Steve Leesman interviewed a representative of the FDIC and asked about the health of the Federal Bank Insurance organization.

There seemed to be yet another warning being issued - similar to Bernanke's comments about possible  Regional Bank failures - that given the "continued uncertainty" the FDIC would like to see higher than the "normal" minimum on bank reserves.

Other comments were that there are still some ways to go in the troubled housing market and they would like to see the foreclosures level off and get the houses selling - even if some people and institutions have to "take their lumps"

- Subscribe to the blog with the link on the right to keep posted...

Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN),He is available as a Mentor and Trading Coach to Select Clients Click Here for a Free Self Evaluation Survey.

Technorati Tags: GDP,FDIC,Bernanke,triangle pattern,technical analysis,oil

Union of South American Nations Formed - Was That a Tree Falling?

We Interrupt This Broadcast  -   Ohh, Nevermind..

Last Friday May 23, 2008  - According to Marco Sibaja of the Associated press, 12 nations of South America signed an agreement to form a "Continental Parliament" fashioned after the European Union.  The "Union of South American Nations" or abbreviated is UNASUR has been born. A Google search was needed to reassure myself that the news was "official" and sure enough Wikipedia has the facts laid out.

New Currency On The Way

As a currency trader my interest was piqued as I learned on Wikipedia that this has been in the planning stages for a long time. The presidents of the seven founding countries (Argentina, Bolivia, Brazil, Ecuador, Paraguay, Venezuela and Uruguay) have already officially launched the South American Bank in Buenos Aires in December 2007.

"We are here to make Simón Bolívar's dream real. [...] Sooner, rather than later, we shall have a single currency, a single passport... Sooner, rather than later, we shall have a parliament with directly elected representatives for this new nation that we are creating today. "

—Former Peruvian President Alejandro Toledo, 8 December 2004. Source: Wikipedia

I watched patiently for any major news organization to pick up on any of this, especially the Sunday major network shows  - But all we get is Barrack and Hillary 7x24...  It seems to me that this is like the proverbial "tree falling in the Brazilian Rain Forest" - Is this not major news? Is anybody out there?  There's tress falling everywhere!  (and I think the Chinese want to make chop sticks out of them!)  

 

Back to Our Regular Programming - and the charts,,,,

GBP-USD Daily Chart above - Resistance is Futile (click to enlarge)

 

 

GBP-USD 30 Min Chart above - Sterling in the Box! (click to enlarge)

Look carefully and you can see the failed inverse Head and Shoulder that completed quickly.

Good trading to ya'all.. down south... Happy Pippin...

Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN),He is available as a Mentor and Trading Coach to Select Clients Click Here for a Free Self Evaluation Survey.

Technorati Tags: Union of South American Nations,UNASUR,UNASUL,constitution,May 23 2008,common currency,GBP,USD,Dollar,trading,techincal analysis,resistance is futile

The Week Ahead - May 26 - 30

Monday: US and UK Holiday - Beware of Low Volume Volatility Moves as Currency Markets Know No Holidays!

This Weeks Calendar

Below is a Consolidated Summary of Scheduled News Events that I am watching. for the "Week Ahead"  Note: All times are listed in US Eastern Time Zone and there are other scheduled events that I may not have listed.

Jerry's Watch List - US News May 26 - 30 (in Brief)

Mon	All Day	Holiday - Beware of Low Volume Volatility
Tue	10:00 10:00	Consumer Confidence New Home Sales
Wed	7:00 7:45 8:55 10:30	MBA Purchase Application UBS  Store Sales Red Book - Chain Store Sales Petroleum Status Report
Thu	8:30 10:00 10:30	US GDP *** Live Webinar  - Click Here to Register Help Wanted Classified Index Natural Gas Report
Fri	8:30 9:45 10:00 15:00	Personal Income and Spending NAPM - Purchasing Managers Index - Chicago Consumer Sentiment Farm and Food  Prices

 

Jerry's Watch List - International News May 26 - 30 (in Brief)

Mon	GBP NZD NZD	All Day 21:00 22:00	Spring Bank Holiday - Beware of Volatility Business Confidence Inflation Expectations
Tue	EUR GBP	2:00 4:30	German GDP and Consumer Confidence Mortgage Approvals
Wed	JPY	19:50	Retail Sales
Thu	GBP EUR CAD NZD GBP JPY JPY	2:00 5:00 8:30 18:45 19:01 19:30 19:50	Housing Prices Consumer Confidence Current Account Trade Residential Building Permits Consumer Confidence CPI and Household Spending Industrial Production
Fri	EUR EUR CAD	2:00 5:00 8:30	German CPI Unemployment Rate and Flash CPI GDP - Industrial and Raw Production Prices

 

Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN),He is available as a Mentor and Trading Coach to Select Clients Click Here for a Free Self Evaluation Survey.

Technorati Tags: economic calendar,forex,Memorial Day,Low Volume,Volatility

New Up Trend Channel for US Dollar vs Canadian?

USD-CAD 30 Min Chart

Dollar Breaks Out of the Loonie Box in Final Minutes of Week (Click to Enlarge)

The last few posts have documented a text book example of a consolidation "box".  In the final minutes of the New York session the US Dollar made a break out of the box - and now is on higher ground - for now. The question is: What will happen when the markets re-open on Sunday - especially with the Memorial Day Holiday in the US? Stay Tuned....

US Home Sales - and the Dollar - Still Under Pressure

CAD-USD 60 Min May 23, 2008 12 Noon EDT (Click to enlarge)

Reacting to US Home Sales -  The chart above as of 12 Noon shows the market moving from the previous post about an hour ago! Resistance is now being tested to the upside as I type. The 10 am 60 minute bar - (possibly reacting to US existing home sales) opened at the low end of 0.9834 and topping out at 0.9877 - closing near the top at 0.9872. That's 43 pips - which is approximately  the same width of the box.

Technorati Tags: US Home Sales,Dollar,Canadian,Loonie,chart,technical anlayis

Chart Review

 

The Loonie in the Box  - 1 Day Later

CAD-USD 60 Min May 23, 2008 10:30am EDT (Click to enlarge)

The CAD-USD pair 24 hours later is still going sideways in the box. The chart above overlays the previous posted with current price at time of posting. The current range of 0.9878-0.9825is being tested to the up side with the 10 am 60 minute bar opening at the low end of 0.9834 and topping out at 0.9877 - closing near the top at 0.9872. That's 43 pips - which is approximately  the same width of the box.

 

Aussie Doing the 2-Step - Back up

AUD-USD 2 Hour Chart May 23 2008 10:30am EDT (Click to enlarge)

The Stair step that I posted May 21st around midnight took the step down - and in the process broke the trend channel. Price has since bottomed out at 0.9542 and is reversing to the upside. As of this posting price has exceeded the 75% retracement and stepped back up into the previous range above resistance.

Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN),He is available as a Mentor and Trading Coach to Select Clients Click Here for a Free Survey and 15 or 30 Minute Consultation.

Technorati Tags: Aussie,Canada,US,Dollar,Chart Patterns,Technical Analysis. USD-CAD,FX,Curreny

Canadian Loonie - In the Box

(Click on Chart to Enlarge)

Symmetrical Box Pattern

The above chart shows the USD-CAD 60 min chart in a nice consolidation range of 40  pips. This box pattern is split symmetrically with 20 pip ranges each. There is also an upper and lower buffer range of a few pips for extra measure.

The Canadian Dollar continues to strengthen as hints that the Bank of Canada may be poised to hold or start raising rates. This is in addition to Canada having oil reserves in the form of shale - ready to be cracked - as Oil and other commodities continue to spike.

Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN),He is available as a Mentor and Trading Coach to Select Clients Click Here for a Free Survey and 15 or 30 Minute Consultation.

Technorati Tags: Oil,Loonie,Forex,Chart pattern,technical analysis. USD-CAD,FX,dollar,trading,range

Oil Up - Dollar Down - Aussie Takes the Stairs

FOMC Minutes Released - Fed Cuts Growth Targets - Worries About Inflation

What's a Central Bank to do? Depending on who you read and listen to - there is either reason for concern - or "the worst is over".  The messages being telegraphed from the likes of Trichet and Bernanke as well as the BOE and even the Australian and New Zealand banks all are extremely concerned about inflation - and slower growth.

Going Up - Down Under -- Aussie vs. US Dollar

Ascending Trend Channel

The 2 hour chart (above) shows the AUD-USD gaining continued strength with a well formed ascending channel.

60 Minute Stair Step Pattern

The same AUD-USD pair  but the 60 minutes chart (above) shows a really nice "Stair Step" pattern. Of course, the question is - which step is next? 

Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN),He is available as a Mentor and Trading Coach to Select Clients Click Here for a Free Survey and 15 or 30 Minute Consultation.

Technorati Tags: Oil,US Dollar,Australian Dollar,central bank,FOMC,BOE,technical analysis,chart pattern,stair step,trend channel

The Week Ahead - May 19-23

This Week

Below is a Consolidated Summary of Scheduled News Events that I am watching. for the "Week Ahead"  Note: All times are listed in US Eastern Time Zone and there are other scheduled events that I may not have listed.

Jerry's Watch List - US News for May 19 - 23 (in Brief)

Mon	10:00 - Leading Indicators
Tue	7:45: UBS Store Sales 8:30: PPI - Producer Price Index 8:55: Red Book - Chain Store Sales 10:00: State Street Investor Confidence Index
Wed	7:00: MBA  Purch Apps - Mortgage-Loan Indexes 10:30: Petroleum Inventory Status 14:00: FOMC Minutes
Thu	10:30: Natural Gas Inventories
Fri	10:00: Existing Home Sales

Jerry's Watch List - International News for May 19 - 23 (in Brief)

Mon	ALL DAY - CAD: Holiday - Victoria day 21:30pm:   - AUD: RBA Minutes
Tue	2:00:   EUR - German PPI m/m 20:30: AUD - WMI Consumer Sentiment m/m
Wed	4:00: EUR - German Business Climate & Expectations 4:30: GBP - BOE Minutes 7:00: CAD - CPI 8:30: CAD - Leading Indicators
Thu	4:30: GBP - Retail Sales 7:00: CAD - Retail Sales 8:30: CAD - Leading Indicators
Fri	4:30: GBP - GDP

Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN),He is available as a Mentor and Trading Coach to Select Clients Click Here for a Free Survey and 15 or 30 Minute Consultation.

Weekend Trading & Computer Maintenance Routine

Do You Have a Checklist?

Send me your routine by posting comments and next weekend I will post mine...

Back Up Your Data Now!

Everything in Life is Temporary - especially electrical components! Not that long ago my main trading systems Hard Drive gave me a ""Black Screen of Death" that's the one with the message that says, " Disk Drive Read Write Error - Press Control Alt Delete". This message does not say have a nice day at the end...

Redundancies - and Planning for Failures

My background in computers is extensive as I began my career at IBM in Boca Raton in 1980 - two months before the IBM personal computer was placed on the market. Bill Gates would walk the halls in his K-Mart clothes - probably mumbling how lucky he was that IBM was fighting for it's life in a anti-trust lawsuit. But that's another story - Anyway, my technical background has me already prepared for computer breakdowns. I have three computers at the ready at all times. Two of them on as I am trading with my trading platform and charting services configured. So I had no Fear or Panic. Trading goes on - However....

Never Trade When You Are Distracted!

I closed all my trades and began the process of determining just how bad the situation is and when I realized my drive was corrupted - I promptly removed it, and installed a 100G drive that I had bought about 6 months ago and began my rebuilding process.

Do You Have Your Restore Disks?

Once upon a time when you bought a computer you received a nice thick manual telling you how to use and maintain your machine, along with all the software to reload your system to factory specifications. Today, many machines do not come with these resources. If you have them - find them now and put them in a safe place where you will remember where they are. If you do not have your restore disks -Your computer manufacturer may have provided a way for you to create them with one or two DVD's - or you may need to call your manufacturer and request them to be sent. (Don't be surprised if they want to charge you some $$$$ and even worse - be prepared that they may not send you the right disks.)

Out with the Old?

If you are not technically savvy you have a few options. You may consider buying a new system, especially if your current system was over 3 years old and getting slow. If you do this - consider making your old machine a secondary -or even a third backup system. Consider stopping into your local computer store (not necessarily the big nationwide chain) and get to know your local computer geek - they may become your best friend when you need them!

Bottom Line - Back Up Your Data and Keep Your Cool

Today you can buy an external Hard Drive that attached via USB for less than $50 US. This type of drive helped me in the past during a prior Hard Drive failure when I was able to boot my machine into "safe mode" and transfer my important recent documents and files - before proceeding with repairs and overhauls to my system. Having a regular routine is part of being a professional - whether it is trading or anything else! Backing up your data is a routine I encourage each and everyone of you to start doing - TODAY!

Jerry Furst is an active trader, educator, and Founder of Investors Education Network (IEN), he is also a mentor and trading coach to select clients. And occasionally a computer geek!

Central Banks Signal End of Low Interest Rates - Technical Analysis on Rising Euro

Calls for Rate Increases Rising to an Audible Level for Bernanke

Rising Oil prices and Food prices worldwide can be attributed to the falling US Dollar, and like it or not - there is no other real "safe haven" in the world. So finally.... the Fed is making noise that it might start raising interest rates and supporting the US Dollar.  US consumer confidence is reported to be at it's lowest since 1980! Former Fed Chairman Paul Volcker has been very vocal lately about Bernanke's team ignoring inflation. When Volcker was Chairman he raised interest rates into the high "teens" in the early 1980's. This successfully stopped the bleeding of the US Dollar for the Reagan administration. Volcker is also credited for causing a recession in the process.

Signs of Other Central Banks Frustrations

On Friday, ECB member Erikki Liikanen echoed and restated Trichet's comments about Central Bank policy being focused on the "Long Term" price stability and watching inflation. This is in contrast to the "Short Term" interest rate policy that the US Treasury has been using to maintain liquidity in the financial markets amongst banks. The Financial Times front page reported that the ECB is investigating that banks are exploiting the liquidity of low interest rates to  "offload more risky assets"

Euro Rising - For Now

Technical Analysis - Interest-ing Chart  (click on chart to enlarge)

The Euro gained about 100 pips in the New York session closing the week at approx 1.5575. The 60 Minute chart above on the EUR-USD is interesting from many angles. Friday's close shows a nice Triangle Pattern that is in play. 1.5700 is a potential target If this Triangle completes, as it coincides with a 1,618 extension.  Price settled in at a "Prior Resistance Level"  at the May 6 spike just shy of 1.56. Also interesting in this chart is a Fibonacci Cluster with 200 and 161.8 extensions at the 1.5780 range.

Beware that any clear signs of raising US interest rates from the FOMC could see the Dollar gain substantially and quickly  - Despite the bullish implications on this chart for the Euro.

 

Tune In to Live Webinar's - Broadcast Free - on FX Street

New Time-12 Noon Eastern Time - Every Monday

Tune in to my Live Webinars every Monday at 12 Noon Eastern US Time - 16:00 GMT for the "1st on Forex - The Week Ahead" - Click Here to Register for your Free Password and Admission to the Show!

Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN),He is available as a Mentor and Trading Coach to Select Clients Click Here for a Free Survey and 15 or 30 Minute Consultation.

Technorati Tags: Euro,US,Dollar,technincal analysis,currency,trading,forex,Trichet,Bernanke,Volcker,consumer sentiment,inflation,oil,webinar,education,Jerry Furst,triangle pattern,Fibonacci extensions.

Consumer Inflation up only 0.2% - Right!

Gasoline Prices Down 2% and other Government "Statistics"

There’s No Inflation – Everything is Fine…

The pundits seem happy to shrug their shoulders and accept the lies the government keeps pushing. Recently Glenn Beck on CNN showed actual  proof of what the true inflation numbers should be -according to Shadow Government Statistics or SGS.

No Conspiracy Theories Here

it makes perfect sense, according to John Williams who runs SGS  and the Glenn Beck show interview  The US government has modified the formulas and calculations for very good reasons. Social Security, Welfare, and even the Treasury Inflation Protected Bonds (TIPS)  are adjusted to keep pace with inflation. By keeping the "official rate of inflation" down - the payments saved are tremendous - at the expense of people living on fixed incomes and those buying TIPS. .

Chart above from Shadow Government Statistics

shows that current inflation if calculated by formulas and methods in 1982 would have been over 11.6%! Using revised calculations before 1998 inflation would be at approximately  7.3%! The current calculation methods state that inflation is at 4.0%. This still does not explain how the government reported that gasoline prices declined 2% in April...

 

40 pip Spike on the CPI News

The US Dollar reaction to the CPI numbers took the Euro from 1.5440 to 1.5480 in a few minutes – The Pound also gained about 40 pips from 1.9420 to 1.9460 - and 90 minutes later gave back most of the gains.

 

Technorati Tags: Forex,currencies,US Dollar,Euro,Pound,CPI,USD,Inflation,Glenn Beck,Shadow Government Statistics,gas,TIPS,bonds

 

Tune In to Live Webinar's - Broadcast Free - on FX Street

New Time-12 Noon Eastern Time - Every Monday

Tune in to my Live Webinars every Monday at 12 Noon Eastern US Time - 16:00 GMT for the "1st on Forex - The Week Ahead" - Click Here to Register for your Free Password and Admission to the Show!

Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN),He is available as a Mentor and Trading Coach to Select Clients Click Here for a Free Survey and 15 or 30 Minute Consultation.

Fundamental and Technical Data

When trading - many people think either fundamental or technical - I like both! The long term trend is often defined by a summary of fundamental data. However, on the short term - the only thing that really matters is where price trades on the chart. Here is Tuesday's mid-day look at both.

 

Financial News from Big Ben - on both sides of the Atlantic

Ben Bernanke spoke Tuesday morning via video link to the Federal Reserves Bank of Atlanta’s annual markets conference. He stated that the Fed is ready to continue the aggressive liquidity provisions if needed.

The Fed chief says that although there has been “some improvement” the markets are still far from “normal” but he tried to reassure by saying that recent “extraordinary” measures will not become necessary once the markets work out the elevated risk and interbank funding pressures.

Bloomberg reports that this is in stark contrast to Treasury Secretary Paulson’s opinion that the worst is over. It can be argued that Bernanke is being more honest – that there may be more problems in the banking sector.

 

Pound Drops - FT says Slowing UK Economy - Lower Rates

Fundamental data coming out of the UK confirms some technical weakness for the pound. CPI increased from 2.5% to 3% in April and the Financial Times reported that UK Sales dropped 1.5% in April - the first time spending has dropped two consecutive months since 2005. FT article also suggests that the BOE may need to lower rates .25 in June.

 

Today's Chart - click to enlarge

Chart above shows an expanding wedge on the 4 hour chart with strong resistance at the 1.9600 range confirmed with several Fibonacci levels and the 50 SMA.

 

Tune In to Live Webinar's - Broadcast Free - on FX Street

New Time-12 Noon Eastern Time - Every Monday

Tune in to my Live Webinars every Monday at 12 Noon Eastern US Time - 16:00 GMT for the "1st on Forex - The Week Ahead" - Click Here to Register for your Free Password and Admission to the Show!

Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN),He is available as a Mentor and Trading Coach to Select Clients Click Here for a Free Survey and 15 or 30 Minute Consultation.

Interest Rate Watch - Oil Ready For Final Spike?

What's Trichet Going To Do - Or Say?

The Bank of England – BOE, and the European Central Bank seemed to cast a cloud over the currency markets on Wednesday. Expectations that both Banks will hold rates steady on Thursday left traders with a relatively tame trading day. The chart below shows an unusually quiet GBP-USD pair  trading a very tight 30 pip range for the NY Session.

 

Chart Above - Pound Trades in Tight 30 Pip Range Ahead of Rate Announcements

 

Oil – Ready for a Blow Off Top?

I hear more and more speculation that Oil has no overhead resistance and will soon be spiking to heights of $150 - $200! Could we be ready for a blow off top? Usually when there is chatter of unlimited, unbelievable prices (Do you remember the books titled like “Dow 30,000” just before the Tech Bubble Burst?) this helps the bulls to run over the cliff at full speed - faster than Wylie Coyote! Further, there is also talk of raising margin requirements for the Oil pits that would potentially slow down the speculation.

The question is -  is the current price above $120 sustainable and valid? Economists looking for high prices to curb demand are detached from the reality that the high price of oil is a weak US Dollar issue - as all Oil is settled in US Dollars. The sooner Hank Paulson and Ben Bernanke acknowledge, accept, and react to this fact - with paying more than lip service to a strong dollar - the sooner we all will pay less for gas and oil.

 

When The Going Gets Tough, ... Filler Up – and Charge It!

The US consumer is continuing to spend on credit with a surprise number of over $15Billion! This is way above the consensus expected range of $3B to $7.5 Billion. The report coming at 3pm Eastern time could be viewed as good or bad depending on your angle. The currency markets ignored it completely. Could it be that the middle class is filling their gas tanks with plastic?

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New Time-12 Noon Eastern Time - Every Monday and....Today Twice!

Tune in to my Live Webinars every Monday at 12 Noon Eastern US Time - 16:00 GMT for the "1st on Forex - The Week Ahead" - Also - register for  my live coverage of the GDP and FOMC announcements here on FX Street - Click Here to Register for your Free Password and Admission to the Show!

Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN),He is available as a Mentor and Trading Coach to Select Clients Click Here for a Free Survey and 15 or 30 Minute Consultation.

Technically Speaking - Dollar - Gold

 

US Dollar - Time For a Real Rally?

There is plenty of speculation as to what Jean Claude Trichet will do with the Euro zone's interest rates. Depending on who you listen to the ECB may move rates up, down, or keep them steady. To his credit, Trichet keeps us guessing with statements that he is concerned about inflation and slowing growth.  Hypothetically - All it would take is a clear policy statement from JCT of staying steady - or for a shock a mention of dropping rates - and the US dollar will be able to roar back.

 

Pound Predictions?

Looking at the Weekly chart (above ckick to enlarge) for the Pound Sterling vs. US Dollar you can see that a Head and Shoulder pattern may be completing if price was to drop to the 1.9100 range. This would complete the right shoulder. If that happens - you will have a bounce or break off the supporting neck line. A Dollar Rally will be confirmed if this neck line is broken.

 

US Dollar Poking Holes in the Swiss Cheese?

The USD-CHF (above) is usually a good indicator of Dollar Direction. The chart above shows the 100 SMA has held as resistance quite well - but a solid break above that line - would have it also break above the current up trend channel. If that happens, it could signal a real Greenback rally against  the British Sterling and the Euro.

 

Meanwhile Back in the Darkened Gold Mines

 

Gold - Giving Traders the Shoulder - Heading Lower?

While Oil is posting lifetime record Highs, and the US Dollar shows a lack of direction, Gold is showing a chart pattern that might be bearish. The Daily chart of Street Tracks ETF GLD shows a Head and Shoulders Pattern with a broken neck line. The neck line coincides with the key 61.8% retracement level support level making this line quite significant if it is violated again. The 200 Period Daily SMA is currently at just about 81. GLD typically trades at 1/10th of the spot price.

 

Tune In to My Live Webinar's - Broadcast Free - on FX Street

New Time-12 Noon Eastern Time - Every Monday and....Today Twice!

Tune in to my Live Webinars every Monday at 12 Noon Eastern US Time - 16:00 GMT for the "1st on Forex - The Week Ahead" - Also - register for  my live coverage of the GDP and FOMC announcements here on FX Street - Click Here to Register for your Free Password and Admission to the Show!

Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN),He is available as a Mentor and Trading Coach to Select Clients Click Here for a Free Survey and 15 or 30 Minute Consultation.

Fed Cuts Rates - Jobless Grows - Dollar Confusion

When Bad News is Good

The US Dollar rallied Friday morning as the Non-Farm Payrolls Report - NFP showed a net loss of only -20,000 jobs. This negative growth of jobs was a positive surprise as it was much better than the expected job loss range of -150,000 to -25,000K .

Euro Double Bottoms at 1.5400 - click to enlarge chart

 

Gold and Oil Up - Despite Dollar Rally

Usually we see a very clear inverse correlation between the US Dollar vs. Oil and Gold - However as of this posting Oil is up over a Dollar at 113.73 and Gold is Up at $855 - So go figure. Yesterday Treasury Secretary Henry Paulson stated once again his "long term" strong dollar policy.  Reuters is quoting Paulson saying, "I'm a strong dollar man" - please....

Planned Confusion: Now You See It... Now You Don't

15 minutes before the NFP report the Fed announced that in conjunction with the ECB and the Swiss National Bank they increased their liquidity arsenal from $50 to $75 Billion available through the TAF or Treasury Auction Facility. That's an an extra $25 Billion between friends! They are also increasing the "Frequency" of the auctions. This unexpected announcement caused some confusion to an already tense trading world awaiting the NFP. Was this timing planned? The FED clearly watches CNBC for direction (not to mention the Futures) - perhaps they wanted some attention just before NFP? I think they should pay attention (and a consulting fee) to Rick Santelli :>)

Waiting Game For Clarity? Read - Fed Minutes

Transparency used to be quite clear with Ben Bernanke, but it appears as if the guessing game is on! Wednesday the FOMC led by Ben Bernanke cut interest rates the expected .25 lowering it's bank rate to 2.0% - However, the Fed left no hint of future policy.. leaving my previous post on April 30th correct - stating that we will have to wait until May 21st for the FOMC minutes report to see what was discussed. Again - restating my previous post, the next FOMC scheduled announcement is not until June 25th - leaving the window open for surprise announcements.

New Time for Weekly Webinar - 12 Noon EDT (16:00 GMT)

Tune in to my Live Webinars every Monday at 12 Noon Eastern US Time - 16:00 GMT for the "1st on Forex - The Week Ahead" -

Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN),He is available as a Mentor and Trading Coach to Select Clients Click Here for a Free Survey and 15 or 30 Minute Consultation.