Fed Sees No Major Problems in U.S. Economy

Today is a very important day for the financial traders from all over the world - Fed is to decide its interest rate policy until the next meeting (if not further). While almost 92% of all traders expected rate cut by 25 basis points - to 4.50% - the main intrigue was concealed in Fed's formulation and reasons for the cut (or its absence in case they would decide to leave things as they were). With one member voting against rate cut and words like "economic growth was solid in the third quarter" and that "some inflation risks remain", it is now almost certain that this was the last rate decrease until the end of 2007.

To much surprise of the majority of Forex traders, U.S. macroeconomics data came out very optimistically tuned today. Starting from GDP (advance) at 3.9% in third quarter, which appeared greater than 3.1% expected; ending with September construction spendings which increased by 0.3% (against -0.2% fall in August and and -0.4% expected for that month).

On the bad side of the reports are Chicago PMI with a decrease from 54.2 to 49.7 and a big surprise present for oil bulls - another major drawdown in U.S. commerce crude oil inventories by almost 3.9 million barrels.

eToro - Forex Innovation

Making something new in world of the retail on-line Forex services is a great job, hardly accomplished by Forex brokers today. eToro is a new kind of broker that brings innovative ideas to Forex trading via Internet. Aiming on the novice traders (like some other brokers - Pip Forex and Marketiva) it offers a very simple, yet interesting approach to buy and sell currencies. eToro developed its unique platform with 3 different types of trading - Dollar Trend, Globe Trader and Forex Match; none of them being like they are on Metatrader or any other platform:

• Dollar Trend - trader chooses a trend direction and watches the dollar rise or fall against a set of currencies. Almost the same as buying and selling the DXY.
• Globe Trader - two different currencies (countries) a chosen on the map and the currency pair behavior is literally seen on that map. More like a common Forex trading.
• Forex Match - more traditional currency pair selling and buying with all the stop-losses and take profits.

They offer visualization and easy-to-understand scheme that even a 10 year old child can understand, making Forex accessible for the vast majority of the Internet audience. The only problem with this extremely newbie-friendly platform is that it hardly can satisfy professionals' demand; adding Metatrader 4 choice would certainly benefit eToro.

Trade Your Way to Financial Freedom E-Book

Another great e-book was added to my site today - it is "Trade Your Way to Financial Freedom" by Van K. Tharp. Too bad it is a rather poor quality scan. Nonetheless it is a very important book for all financial traders. And, in my opinion, it is especially important to Forex traders. Because it has so wonderful section about position sizing and money management which is usually Forex trader's biggest problems (at least it was and somewhat still is for me). It is a big book with a lot of useful information. But if you don't have enough time to read it all, read chapters about position sizing and R-multiples. This will probably change your way of thinking about successful trading strategy.

HY Markets - On-Line Forex Broker

Long time since I've updated my Forex brokers section, so today is a good day to do it, IMHO. HY Markets is a rather new broker on the on-line Forex market, but they have a good and long off-line history with offices in both United Kingdom (London) and United Arab Emirates (Dubai). For their customers HY Markets offer custom web trading platform which makes trading possible from virtually any computer in the world, without downloads and installations. Mini Forex accounts available for $50 minimum deposit and 1:200 leverage. Funds can be deposited and withdrawn via wire transfer, credit cards and PayPal. My overall suggestions on HY Markets - good to start with if you don't want to download anything and good for professionals with a lot of money for it is a reliable broker and offer better conditions for the bigger accounts.

Forex Technical Analysis for 10/29-11/02 Week

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

Floor Pivot Points:
Pair	3rd Sup	2nd Sup	1st Sup	Pivot	1st Res	2nd Res	3rd Res
EUR/USD	1.3944	1.4035	1.4213	1.4304	1.4482	1.4573	1.4751
GBP/USD	2.0015	2.0136	2.0329	2.0450	2.0643	2.0764	2.0957
USD/JPY	111.50	112.38	113.28	114.16	115.06	115.94	116.84
EUR/JPY	157.59	159.03	161.68	163.12	165.77	167.21	169.86

Woodie's Pivot Points:
Pair	2nd Sup	1st Sup	Pivot	1st Res	2nd Res
EUR/USD	1.4057	1.4258	1.4326	1.4527	1.4595
GBP/USD	2.0136	2.0329	2.0450	2.0643	2.0764
USD/JPY	112.38	113.28	114.16	115.06	115.94
EUR/JPY	159.03	161.68	163.12	165.77	167.21

Camarilla Pivot Points:
Pair	4th Sup	3rd Sup	2nd Sup	1st Sup	1st Res	2nd Res	3rd Res	4th Res
EUR/USD	1.4244	1.4318	1.4343	1.4367	1.4417	1.4441	1.4466	1.4540
GBP/USD	2.0348	2.0435	2.0463	2.0492	2.0550	2.0579	2.0607	2.0694
USD/JPY	113.21	113.70	113.86	114.03	114.35	114.52	114.68	115.17
EUR/JPY	162.08	163.21	163.58	163.96	164.70	165.08	165.45	166.58

Tom DeMark's Pivot Points:
Pair:	EUR/USD	GBP/USD	USD/JPY	EUR/JPY
Resistance:	1.4393	2.0547	115.50	164.45
Support:	1.4124	2.0233	113.72	160.36

Fibonacci Retracement Levels:
Pairs	EUR/USD	GBP/USD	USD/JPY	EUR/JPY
100.0%	1.4394	2.0572	115.03	164.56
61.8%	1.4291	2.0452	114.35	163.00
50.0%	1.4260	2.0415	114.14	162.52
38.2%	1.4228	2.0378	113.93	162.03
23.6%	1.4188	2.0332	113.67	161.44
0.0%	1.4125	2.0258	113.25	160.47

New Signs of Recession for U.S. Economy

The closer it is to the October 31st when the FOMC's meeting on interest rates policy will be held the stronger the dollar bears feel themselves on the Forex market. With almost each day bringing new reasons for the Fed to decrease interest rate again this time the decision became clear now.

Initial jobless claims for the last week decreased compared to the previous week report, but still came out worse than expected - 331k compared to 339k previous week and 320k expected.

Durable goods orders by the manufacturers, according to U.S. Census Bureau, in September decreased by $3.8 billion or 1.7%, while previous value was revised from 4.9% (also decrease) to 5.3%. Now, considering that the markets were expecting increase by 1.5%, it is possible to say that manufacturing sector is suffering or at least is going to suffer something close to a crisis.

September new home sales increased a little from August number - 770k against 735k (but August value was revised from 795k) and they were still lower than expectations. But real estate sector is already known to be in downfall. So, at least for me nothing surprising here.

Oil And Home Sales Fall Again

This day was very volatile on Forex EUR/USD pair, but it was without a distinct leader among those two. With dollar falling and rising during the day it ended almost at the same point it started. But trend for the rest of the week could have been probably founded today by two important fundamental reports on U.S. economics.

First, the crude oil inventories for the last week fell by whopping 5.29 million barrels. Department of Energy even changed the phrase in its report from "well above the upper end of the average range for this time of year" to "near the upper end of the average range". With low oil inventories, the price for this vital commodity can continue its fast growth seen during the last days. And expensive oil will almost certainly mean cheap dollar.

Second, existing home sales for September showed decreased by almost 0.46 millions to 5.04M (total annual rate). That is more than 19% lower than the September 2006 figure and also significantly lower than National Association of Realtors expected for this September. Weak real estate reports adds another reason for FOMC to lower interest rates next meeting (31st of October). And that can't be good for dollar too.

Forex Technical Analysis for 10/22-10/26 Week

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

Floor Pivot Points:
Pair	3rd Sup	2nd Sup	1st Sup	Pivot	1st Res	2nd Res	3rd Res
EUR/USD	1.4015	1.4080	1.4190	1.4255	1.4365	1.4430	1.4540
GBP/USD	2.0124	2.0206	2.0361	2.0443	2.0598	2.0680	2.0835
USD/JPY	109.91	112.21	113.35	115.65	116.79	119.09	120.23
EUR/JPY	158.36	161.03	162.39	165.06	166.42	169.09	170.45

Woodie's Pivot Points:
Pair	2nd Sup	1st Sup	Pivot	1st Res	2nd Res
EUR/USD	1.4091	1.4214	1.4266	1.4389	1.4441
GBP/USD	2.0206	2.0361	2.0443	2.0598	2.0680
USD/JPY	112.21	113.35	115.65	116.79	119.09
EUR/JPY	161.03	162.39	165.06	166.42	169.09

Camarilla Pivot Points:
Pair	4th Sup	3rd Sup	2nd Sup	1st Sup	1st Res	2nd Res	3rd Res	4th Res
EUR/USD	1.4205	1.4253	1.4269	1.4285	1.4317	1.4333	1.4349	1.4397
GBP/USD	2.0387	2.0452	2.0474	2.0495	2.0539	2.0560	2.0582	2.0647
USD/JPY	112.61	113.55	113.87	114.18	114.82	115.13	115.45	116.39
EUR/JPY	161.54	162.65	163.02	163.39	164.13	164.50	164.87	165.98

Tom DeMark's Pivot Points:
Pair:	EUR/USD	GBP/USD	USD/JPY	EUR/JPY
Resistance:	1.4310	2.0521	117.94	167.76
Support:	1.4135	2.0284	114.50	163.73

Fibonacci Retracement Levels:
Pairs	EUR/USD	GBP/USD	USD/JPY	EUR/JPY
100.0%	1.4319	2.0524	117.94	167.72
61.8%	1.4252	2.0433	116.63	166.18
50.0%	1.4232	2.0406	116.22	165.71
38.2%	1.4211	2.0378	115.81	165.23
23.6%	1.4185	2.0343	115.31	164.64
0.0%	1.4144	2.0287	114.50	163.69

Dollar Takes More Beating

Today U.S. dollar continued its way down the Forex market to historical bottoms of its rate against Euro currency. With EUR/USD hitting its new historical maximum at 1.4309, there is a little doubt now that dollar will stop euro reaching and breaking 1.4500 level. This is mainly caused by bad U.S. data coming out last weeks, which might mean another Fed rate cut by the end of the month.

First strike on dollar bulls was delivered today by the initial jobless claims report for the past week with 29k increase from the previous week - to 337k. Then the leading indicators by the Conference Board Inc. came out showing a 0.3% growth, which appeared as expected. But it is a very weak indicator that doesn't mean a lot to Forex traders usually.

Second strike was Philladelphia Fed Business Outlook Survey showed a very strong decrease in the diffusion index of current activity from 10.9 in September to 6.8 in October, whereas even pessimistic market analysts were expecting to see 7.0 value.

To sum it up - it is a bad time to be long on dollar, but good to be long on EUR/USD.

EUR/USD Fluctuations Continue

EUR/USD retraced back to 1.4200 level today after some very disappointing housing data came out in U.S. Overall situation continues to remain uncertain with the EUR/USD ranging between 1.4050 and 1.4250. It now formed a clear plateau pattern on the daily chart marking some major break in the Euro vs. Dollar struggle.

Housing report for September showed a further downfall in this economics sector with the decrease in both housing starts and building permits numbers exceeding pessimistic market forecasts. There were 1,191k housing starts (against 1,285k expected) and 1,226k new building permits (against 1,300k expected) this September.

Contrary to real estate sector bad news September CPI report showed a better than expected value - 0.3% against 0.2% expected, and that's from the -0.1% in August.

Crude oil inventories report for the October 8-12 week showed a major increase in commercial oil inventories - 1.8 million barrels, which can easily compensate for the previous decrease by 1.67 million barrels.

Success Story of a Part Time Forex Trader

A new Forex article was added to my collection today. Hearing another success story of the Forex trader might as old to some people, as motivating to others. I think this one will be at least useful to many Forex traders. Experienced and professional Forex traders can say that part time Forex trading can't be good and that it will always lack the "full market control and awareness". Yes, I'd agree with them to some extent, but still, part time trading remains the only option to many Forex beginners (and not only beginners, just not professionals). So, here it is:

How I became a successful part time trader - by Joe Chalhoub

Street Smarts - a Book About Short-Term Forex Strategies

A new Forex strategy e-book now can be downloaded from my site - this time it's about many (really a lot) powerful short term strategies and the basic rules of trading Forex using such strategies. It even has a chapter on Wolfe Waves - one of my best trading method for Forex charts. But don't expect to spend 20-30 minutes to read some strategy from this e-books and begin earning millions in a few days. This is a big book with highly interconnected information that will help you a lot in your strategy building as a whole book, not separate chapters. Be prepared for some long but very interesting and educating reading:

Street Smarts - High Probability Short Term Strategies - by Laurence A. Connors and Linda Bradford Raschke.

FXcast Announces Trading Competition

FXcast Forex broker announced a Forex traders competition which will be held on real accounts from the 1st till 30th of November with the best trader to receive $5,000 prize. Minimum account size for the competition is not high - just $250, but that will surely add more adrenaline for the participants and will make the whole event more exciting. On the other side - real accounts will stop some traders from entering this championship. Nevertheless, such competition can be useful for all Forex traders as their skills will be tested both against big greed and the excessive moderation.

If you want to join the competition follow these guidelines:

1. FXcast will start a trading competition on the real accounts Forex market (no demo accounts).
2. Become a customer of FXcast if you are not already one.
3. Open a special competition account in your membership area.
4. Deposit $250 to your competition account.
5. Start trading at the 1st of November.
6. The trader with the highest closing ballance (no open positions!) on November the 30th will be declared a winner and receive $5,000 in cash.

Good luck with winning on Forex!

Forex Technical Analysis for 10/15-10/19 Week

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

Floor Pivot Points:
Pair	3rd Sup	2nd Sup	1st Sup	Pivot	1st Res	2nd Res	3rd Res
EUR/USD	1.3823	1.3919	1.4048	1.4144	1.4273	1.4369	1.4498
GBP/USD	2.0012	2.0128	2.0243	2.0359	2.0474	2.0590	2.0705
USD/JPY	116.03	116.41	117.01	117.39	117.99	118.37	118.97
EUR/JPY	161.24	162.69	164.71	166.16	168.18	169.63	171.65

Woodie's Pivot Points:
Pair	2nd Sup	1st Sup	Pivot	1st Res	2nd Res
EUR/USD	1.3927	1.4065	1.4152	1.4290	1.4377
GBP/USD	2.0128	2.0243	2.0359	2.0474	2.0590
USD/JPY	116.41	117.01	117.39	117.99	118.37
EUR/JPY	162.69	164.71	166.16	168.18	169.63

Camarilla Pivot Points:
Pair	4th Sup	3rd Sup	2nd Sup	1st Sup	1st Res	2nd Res	3rd Res	4th Res
EUR/USD	1.4053	1.4115	1.4136	1.4156	1.4198	1.4218	1.4239	1.4301
GBP/USD	2.0230	2.0293	2.0315	2.0336	2.0378	2.0399	2.0421	2.0484
USD/JPY	117.06	117.33	117.42	117.51	117.69	117.78	117.87	118.14
EUR/JPY	164.81	165.77	166.08	166.40	167.04	167.36	167.67	168.63

Fibonacci Retracement Levels:
Pairs	EUR/USD	GBP/USD	USD/JPY	EUR/JPY
100.0%	1.4240	2.0476	117.78	167.62
61.8%	1.4154	2.0388	117.41	166.29
50.0%	1.4128	2.0361	117.29	165.89
38.2%	1.4101	2.0333	117.17	165.48
23.6%	1.4068	2.0300	117.03	164.97
0.0%	1.4015	2.0245	116.80	164.15

Dollar Regains Positions After Mixed News

After yesterday's EUR/USD high peaks dollar is showing a good trend today moving the EUR/USD pair back to below 1.4200 levels hitting bottom 1.4150 mark. That of course can be considered as an ongoing correction for the previous weeks growth of Euro, especially considering that there were too few good news for the U.S. economy on which the dollar growth could have been based.

Monthly retails sales report for the September was among good news - 0.6% growth (0.2% was the expected value).

Producer Price Index came out good to with 1.1% growth against 0.5% expected by analysts. But the core component of PPI was very low - just 0.1% (0.2% expected). So, the big growth of PPI can be accounted on the recent oil price rally.

Among bad news, the business inventories in August added only 0.1%, which significantly below the already pessimistic forecast of 0.3% growth.

Continuing its stagnation and some recent decrease Michigan Sentiment index (preliminary!) showed a decrease from 83.4 to 82.0 points, thus not meeting the optimistic expectations (84.0).

Dollar Loses On Good U.S. Trade Balance

A significantly improved trade balance of the United States was reported today with the value of -$57.6B ($1.6B improvement from previous month). While narrowing trade balance deficit is a good news for the whole U.S. economy a reaction on this news wasn't very good on the currency market. Dollar stopped its strengthening and gave up almost 100 points against Euro currency hitting 1.4240 daily maximum on EUR/USD.

Some other good news came from employment sector of the economy, showing that only 308k jobless claims were issued last week, which is slightly better than 320k of the previous report.

On the bad side U.S. oil inventories had a rather sharp fall last week - 1.7M barrels, which is especially worrying just before the heating season. But the whole inventories volume is above average level, so it might be not so bad after all.

FXcast Now Offers Exchange Service

FXcast Forex broker now offers e-currency exchange services to its customers. They offer almost free exchange of e-gold to WebMoney or Liberty Reserve. This service is done with the low 2.7% commission which is fully compensated after the trader close a specific amount of positions This amount is determined as $10 of commission for every 1 full standard Forex lot. I think it is a good addition to a Forex broker that is focusing on e-currencies and many active traders will use it.

Initial quote from FXcast newsmail - removed regarding the request from FXcast.

Interview with FXOpen Forex Broker

Recently I've asked management from FXOpen to answer several questions in a format of an interview to get more information on this fast developing on-line Forex broker. Denis P., FXOpen Head Manager, agreed to answer these questions and now I can present them to you. They are an on-line Forex broker which was previously known as FXEgypt and rebranded to FXOpen just about two months ago. You can find more information on this broker here.

You've re branded from FXEgypt to FXOpen recently. Was it a successful step for your business?

Changing the name of the company and forming an exciting, new brand was something thatwe had planned for quite some time. FXOpen is an international brand which is clear and easily understandable for people from different countries and different religions and cultures. FXEgypt will remain as our regional representation for Egypt, as well as FXMalay for Malaysia, FXFrench for France for example.

FXOpen gives an impression of a broker that targets mainly Muslim traders, or traders from generally Islamic countries. Is it your marketing strategy? Or is this a misunderstanding, and that your business model is equally structured for any kind of a Forex trader?

FXOpen began it’s business from Egypt. Our first project was FXEgypt which was targeting Egyptian clients and people located in and around Egypt, and of course, most of them are Muslims. Since early 2007, our company has developed a lot and opened new markets also in Islamic countries, but that doesn’t mean that we are marketing for Islamic traders exclusively. FXOpen offers the same quality of service for any client from any country and any culture.

Your trading software, MetaTrader 4 is a powerful trading platform. MT4 holds great potential for people to program their own automated expert advisors. Do you limit your traders in using automated experts?

Yes, MetaTrader 4 is a great program from a company called MetaQuotes. We do allow EA trading, however, there is a restriction on the quantity of trades that may be opened at the same time. You may have a maximum of 100 positions open at the same time. Apart from that, there are no other restrictions for automated expert advisors.

Trading courses are available on your site. Do you think that it is important for Forex brokers to educate their clients? Do many of your clients take advantage of this training?

Currently we do not offer online courses, but you may attend live seminars or courses proposed by our representatives. This option is very popular in Egypt for example. We believe that all traders, not just absolute beginners should have a good understanding of the market and how to trade it before risking their money in a Forex trading account. The training may take one week, one year, or even longer, but this investment in training is something that will pay for itself over and over again.

FXOpen supports almost all e-currency methods of payment that are currently available. Do you think that e-currencies are the future of Forex trading, or you are just trying to keep up with the customers' demand?

E-currency transfers are very popular with our customers. We believe that e-currency methods of deposit/withdrawals have a great future due to their convenience and the fact that internet businesses, all relying on convenient e-currencies have exploded in popularity in recent years. However, quite a few clients are using the traditional wire transfer method.

What's your point of view on those that treat Forex trading as a gambling? What are the main differences between trading and gambling, in your opinion?

When you treat FX trading as gambling, you become a player in a casino and as you know, the casino always wins. If anyone wants to become a trader he or she needs to understand that a trader’s job is the same as a doctor or chauffeur... A Doctor’s mistake may cause health problems, a chauffeur's mistake, a car crash. Mistakes by traders causes money loss. While there are often, unexpected or unplanned situations that arise during the trading week, for the most part, the FOREX market works according to a well defined list of rules, like the rules of Physics. Following these rules will usually give a positive result.

There are many on-line Forex brokers available nowadays, and you appear to be one of the most popular. What special features help you to attract traders? Do you have a secret weapon that is an essential component of your success?

Success is constructed from small steps, combined to make the whole. Support+Promotion+Services and a bit of luck of course, all combine to make FXOpen a attractive broker to work with. Our main target is to serve each client as if he or she is the company's only client. Private contact and personalised service is very important to us. Our clients are our friends.

Forex trading in the Islamic world is quite a controversial topic, due to its overnight interest payments and marginal nature and the perception that it is a form of gambling. What would you say to Muslims that want to trade Forex?

Trading is a JOB and isn’t gambling at all unless you want to treat it as a game or a get rich quick scheme. Every single successful trader out there today has approached the market as a career choice rather than a passing fancy in the hope of a quick buck. Training, dedication, and persistence is essential to trade Forex. The swap interest issue is something that we take very seriously for our Islamic clients. As you may know, Islamic Shariah Law forbids Muslims from dealing with any form of Riba (Interest, Usury), so for our Islamic clients, unlike many other brokers, we offer a swap free account option where no overnight interest is earned or charged to their accounts.

Fundamental and technical analysis often contradict each other. In your opinion, what is the most successful approach to Forex trading?

Most traders (about 90%) are utilising technical analysis only. However, technical traders often consider fundamentals when reading the charts. To ensure your success, you should always bring a least a little of the fundamental considerations into the charts before making trade decisions.

What are the future plans of FXOpen? Are there any new features planned, if this is not a commercial secret?

We have recently launched a brand new website http://www.fxopen.com, and have introduced an advanced trader’s cabinet. We have several promotions running already, which you can check by visiting http://www.fxopen.com/OurPromotions.aspx. We are also planning to add new trading instruments during October and increase the speed and reliability of the trading servers. FXOpen will always work towards upgrading our services to fulfill all of our client's needs! Our open door policy is our commercial secret. When the client talks, we listen and bend over backwards to make them happy. This is the FXOpen edge.

Hope you learned something interesting and useful about FXOpen and their view on Forex trading from this interview. If you have some comments regarding this interview or FXOpen broker, feel free to leave them here, or send via this contact form.

Forex Technical Analysis for 10/08-10/12 Week

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

Floor Pivot Points:
Pair	3rd Sup	2nd Sup	1st Sup	Pivot	1st Res	2nd Res	3rd Res
EUR/USD	1.3764	1.3897	1.4015	1.4148	1.4266	1.4399	1.4517
GBP/USD	2.0084	2.0181	2.0300	2.0397	2.0516	2.0613	2.0732
USD/JPY	112.81	113.74	115.37	116.30	117.93	118.86	120.49
EUR/JPY	162.33	162.96	164.15	164.78	165.97	166.60	167.79

Woodie's Pivot Points:
Pair	2nd Sup	1st Sup	Pivot	1st Res	2nd Res
EUR/USD	1.3893	1.4008	1.4144	1.4259	1.4395
GBP/USD	2.0181	2.0300	2.0397	2.0516	2.0613
USD/JPY	113.74	115.37	116.30	117.93	118.86
EUR/JPY	162.96	164.15	164.78	165.97	166.60

Camarilla Pivot Points:
Pair	4th Sup	3rd Sup	2nd Sup	1st Sup	1st Res	2nd Res	3rd Res	4th Res
EUR/USD	1.3995	1.4064	1.4087	1.4110	1.4156	1.4179	1.4202	1.4271
GBP/USD	2.0301	2.0361	2.0380	2.0400	2.0440	2.0460	2.0479	2.0539
USD/JPY	115.58	116.29	116.52	116.76	117.22	117.46	117.69	118.40
EUR/JPY	164.35	164.85	165.02	165.18	165.52	165.68	165.85	166.35

Tom DeMark's Pivot Points:
Pair:	EUR/USD	GBP/USD	USD/JPY	EUR/JPY
Resistance:	1.4207	2.0565	143.40	165.38
Support:	1.3956	2.0349	140.84	163.56

Fibonacci Retracement Levels:
Pairs	EUR/USD	GBP/USD	USD/JPY	EUR/JPY
100.0%	1.4281	2.0493	117.24	165.40
61.8%	1.4185	2.0410	116.26	164.70
50.0%	1.4156	2.0385	115.96	164.49
38.2%	1.4126	2.0360	115.66	164.28
23.6%	1.4089	2.0328	115.28	164.01
0.0%	1.4030	2.0277	114.68	163.58

Employment Situation in U.S. Improving

Dollar continues its volatile market dance with Euro currency undecided whether to go south back to 1.4000 or break through to 1.4500. Recent bad fundamental news made positive effect on dollar, most probably because of financial institutions cashing out of stock markets. But today this "bad news - strong dollar" trend was broken.

September nonfarm payrolls came out at 110k - even better than already optimistic expectations of analysts (100k). More than that, extremely bad August result (-4k) was revised towards a much better one (89k), showing that U.S. employment market is still strong and is not dramatically affected by subprime lending crisis.

Among other employment market indicators today came out: unemployment rate - 4.7%, average hourly earnings - 0.4% increase, average workweek - 33.8%.

Carnival of Forex Trading - October 4, 2007

Welcome to the October 4, 2007 edition of carnival of Forex trading. Only three quality Forex trading articles this time - definitely not too many. But they all are worth reading. No useless talking, but an interesting reading.

Thomas Ott presents A Review Of My Forex Trading posted at Neural Market Trends, saying, "I’m closing in on my 1 year anniversary of trading Forex my $100 Forex Experiment. I did really well ($ wise) in the beginning of the year only to get smacked hard between May and June."

Thomas Ott presents US Interest Rates VS Currencies | Neural Market Trends posted at Neural Market Trends, saying, "A quick analysis that shows long term correlation between US interest rates and currencies. Part of a brain tease."

Stirling Newberry presents Why the dollar is taking another beating now posted at The Agonist, saying, "The outlook for the US dollar is a constant and continued erosion, followed by an extended period where the dollar will be very weak compared to other currencies, until there are clear signs of a change in policy regime in the United States. The issue is confidence."

Bad Fundamentals - Good for USD?

While dollar continued to rebound its weak positions today after EUR/USD failing to break 1.4180 resistance, fundamental stats from United States again came out below expectations. And again this caused a dollar rally against the Euro currency. ISM report on business activity for September 2007 showed a decrease by 1% - from 55.8% to 54.8% - well below the pessimistic expectation of 55.0%. After this report dollar went high to its weekly minimum at 1.4130 and now continues to gain strength.

One fundamental news that helped dollar and wasn't negative is the increase of the commercial crude oil inventories by 1.2 million barrels last week. This is logical, since when commodity prices are decreasing, currency gain value. As to the reaction on ISM services index - bad fundamental data now scare stock market investors away, thus making them to cash out into dollars (giving it more demand).

Bad ISM PMI Pushes Dollar Up?

EUR/USD hit another historical maximum today - 1.4281 and then unexpectedly retreated back to 1.4220-1.4230 levels. A still strong resistance value lies slightly below 1.4300 which is preventing EUR/USD to shoot up to 1.4500 or even farther. Every trader now must look towards Fed's Bernanke's decisions and ECB's Trichet's reaction on Euro/Dollar overvaluation (of it is possible in open market).

Fundamental analysis now speaks more for the stocks market rather than currency exchange market. ISM reported on September PMI today with the notable decrease from 52.9% to 52.0%, which is below 52.5% expected value. Anything higher than 50% is still good, but it was a bad surprise for U.S. economy. Surprisingly it turned good for dollar - EUR/USD didn't go above 1.4250 after this release. Nowadays, what's bad for U.S. stock market is good for dollar in its currency pairs on Forex.