By CountingPips.com

U.S. Retail Sales rose more than unexpected in the month of February as consumer spending on retail goods edged higher following an increase in sales for January. Advance estimates of retail sales showed that sales increased by 0.3 percent to a total of $355.5 billion in February, according to the report by the U.S. Commerce Department released today. January’s retail sales data was revised lower to show an increase of 0.1 percent after the original report registered a 0.5 percent increase.

The February retail sales data was better than the market forecasts which were expecting retail sales to decline by approximately 0.2 percent. Increased retail sales data bodes well for the domestic economic recovery as consumer spending accounts for roughly two-thirds of economic activity in the U.S.

On an annual basis, February’s retail sales level was 3.9 percent higher than the February 2009 sales level following an annual increase of 4.1 percent in January.

Core retail sales, excluding automobile sales and parts, advanced by 0.8 percent in February after the revised data showed that core sales fell by 0.5 percent in January. The core sales data surpassed market forecasts which were expecting a rise of 0.3 percent. On an annual basis, core sales rose by 4.2 percent in February from the February 2009 level following an annual gain of 4.3 percent in January.

Contributing to the advancement in retail sales numbers for January was a 3.7 percent jump in electronics & appliance stores sales and a 2.5 percent increase in miscellaneous stores retailers. Food and beverage store sales gained by 1.3 percent while general merchandise store sales advanced by 1.0 percent.

Contributing negatively to the retail data was a decrease in motor vehicle & parts dealer sales by 2.0 percent in February while health & personal care stores sales declined by 0.7 percent.

By CountingPips.com

The United States trade deficit decreased unexpectedly in January as imports fell at a faster pace than exports, according to a release by the Commerce Department today. The U.S. trade deficit decreased by $2.6 billion to a total international trade deficit of $37.3 billion in January following a deficit of $39.9 billion in December. Today’s trade deficit numbers surpassed the market forecasts that were expecting the deficit would rise to approximately $41.0 billion for the month.

January’s trade in goods deficit fell by $2.5 billion to a total goods deficit of $49 billion while the surplus in services rose by $0.1 billion to a total surplus of $12.1 billion.

On an annual basis, the U.S. trade deficit is $0.4 billion higher than the January 2009 level as exports have increased by 15 percent ($18.7 billion) while imports have increased 11.9 percent ($19.1 billion) annually.

Contributing to the decreased deficit level was a decline in January imports by $3.1 billion from December to a total of $180.0 billion. Imports had increased for four straight months before January’s turnaround. U.S. exports declined for the month to a total of $142.7 billion which was a decrease of $0.5 billion from December’s total.

The politically sensitive U.S. trade deficit with China edged up in January, despite the overall deficit decrease. The deficit with China rose to $18.3 billion in January from a deficit of $18.1 billion in December. Other notable U.S. trade deficits were with the European Union at $2.8 billion, Japan at $3.3 billion, Mexico at $4.6 billion, OPEC at $7.2 billion and Canada at $3.9 billion.

U.S. trade surpluses with other countries for January included Australia at $0.9 billion, Hong Kong at $1.6 billion and Belgium at $0.3 billion.

Weekly Jobless Claims fall by 6,000.

A separate government release by the U.S. Labor Department showed that weekly U.S. jobless claims decreased in the week that ended on March 6th. New jobless claims edged down to a total of 462,000 unemployed workers, a decline over the prior week by 6,000 workers. The jobless claims data was right in line with expectations as market forecasts predicted a fall to 460,000 jobless claims. The 4-week moving average of unemployed workers rose by 5,000 from the prior week to a total of 475,500.

Meanwhile, workers seeking continuing claims for unemployment benefits for the week ending February 27th increased for the week. Continuing claims rose by 37,000 workers to a total of 4,558,000 unemployed workers. The four week moving average of continuing claims showed no change for the week to remain at 4,581,000 workers.

By CountingPips.com

The U.S. Dollar has been mixed in forex trading today against most of the major currencies on a limited news day. The commodity currencies have been supported while the European currencies have fallen slightly versus the dollar in today’s trading action.

The dollar has lost ground against the Canadian dollar, Australian dollar, New Zealand dollar and the Japanese yen today while the American currency has edged slightly higher versus the euro, British pound and the Swiss franc, according currency data by Oanda.

The EUR/USD currency pair is currently lower by about 20 pips after opening the day (00:00GMT) at the 1.3619 exchange rate and has settled into trading near the 1.3600 level. The EUR/USD had fallen to an intraday low at 1.3537 before reversing direction.

The US stock markets have had a winning session today with the Dow gaining by approximately 40 points, the Nasdaq increasing over 14 points and the S&P 500 up by over 5 points. Oil has edged lower to $81.49 while gold is unchange at $1,123.60 per ounce.

Economic news releases today showed that Japan’s leading index increased in January to a 97.1 score from a 94.3 reading in December. This beat market forecasts expecting a score of around 96.6. Out of Europe, Switzerland’s consumer price index edged up by 0.1 percent in February after a 0.1 percent decline in January, according to the Switzerland Federal Statistics Office. On an annual basis, the February cpi increased by 0.9 percent over the February 2009 level.

The United Kingdom’s total trade deficit increased more than expected in January, according to data from National Statistics. The U.K. deficit in goods and services reached £3.8 billion in January following a deficit of £2.6 billion in December. This surpassed market forecasts looking for a deficit of approximately £3.0 billion. Exports, excluding oil and other volatile items, decreased by 6.0 percent in January while imports declined by 1.2 percent. The January trade deficit marked the largest since August 2008 for the U.K.

AUD/USD Chart – The Australian dollar has resumed its recent ascension versus the dollar in trading as the AUD/USD pair bounced off the rising trendline today to reach above the 0.9100 exchange rate today. The AUD/USD has now climbed over 300 pips since February 25th when the pair touched a 0.8800 lowpoint.

By CountingPips.com

The U.S. dollar ended a very busy news week mixed against the other major currencies, according to currency data from Oanda. The U.S. currency made clear gains versus the British pound and Japanese yen while showing very slight gains against the euro, Swiss franc and the New Zealand dollar in the week that ended March 5th. The dollar, meanwhile, fell against the Canadian dollar and Australian dollar for the week.

The largest gain for the dollar this week was against the Japanese yen with a 128 pip increase followed by the 98 pip advance versus the British pound (see chart). The dollar declined by over 229 pips against the Canadian dollar while declining by 122 pips to the Australian dollar.

The GBP/USD fell for the third straight week and for the sixth out of the last seven weeks. Since February 14th to March 5th, the GBP/USD has decreased from 1.5701 to 1.5137 for a loss of 564 pips in the last three weeks.

Futures Bets vs Euro pullback from record highs, Pound shorts rise

Futures bets against the euro decreased from their record high levels as of March 2nd, according to the Commitments of Traders (COT) data released on Friday by the Chicago Mercantile Exchange. Non-commercial futures positions, those taken by hedge funds and large speculators, were net short the euro against the U.S. dollar by 66,770 contracts after being net short the euro by 71,623 contracts the week before. The net short euro positions had increased for six consecutive weeks before this week’s pullback and have coincided with the euro’s sharp decline against the dollar that brought the EUR/USD to a ten-month low on March 2nd.

The COT report is published every Friday by the Chicago Mercantile Exchange (CME) and shows futures positions as of the previous Tuesday. It can be a useful tool for traders to gauge investor sentiment and to look for potential changes in the direction of a currency or commodity. Each currency contract is a quote for that currency directly against the U.S. dollar, where as a net short amount of contracts means that more speculators are expecting that currency to fall against the dollar and net longs expect that currency to rise versus the dollar.

Other major currencies net short in the CME futures market against the dollar this week were the British pound and Swiss franc while the Japanese yen, Australian dollar, Canadian dollar, and New Zealand dollar all had a net long amount of contracts. The British Pound Sterling net shorts increased for the sixth week in a row with net shorts rising to -67,549 after a total of -62,884 last week. The Swiss franc net short positions registered -6,310 contracts after -8,819 net shorts last week.

The Japanese yen had net long positions of 32,552 contracts, up from 1,717 the week prior. The Australian dollar futures positions were net long by 48,761 contracts after last week totaling net long 38,992 contracts. Canadian dollar long positions were net by 38,289 contracts after 28,421 net longs last week and the New Zealand dollar net longs were 5,112 this week after last week being 6,392 net long contracts.

Busy News Week Roundup:

This week featured many important economic releases and was highlighted by Friday’s U.S. government employment report that showed employment fell by 36,000 workers. The jobs report was better than the forecasts and maintained the flow of optimism that a U.S. economic recovery is underway. Other major releases included the Australian Reserve Bank hiking their interest rate to 4.00 percent as expected while the Bank of England, European Central Bank and the Bank of Canada all held rates steady.

Australia’s retail sales grew by 1.2 percent in January from the month before while Australia’s GDP rose by 0.9 percent in the fourth quarter for a 2.7 percent annual increase.

The Eurozone employment rate leveled at 9.9 percent and beat forecasts predicting the rate to rise to 10.1 percent. Retail sales out of the Eurozone fell by 0.3 percent in January to fall by 1.3 percent on an annual basis. The EU’s GDP grew by 0.1 percent in the fourth quarter to match forecasts and to register a 2.1 percent decrease from the fourth quarter of 2008.

Canada’s GDP grew by 0.6 percent in December and by 5.0 percent on an annualized basis in the fourth quarter of 2009 while Switzerland’s GDP expanded by 0.7 percent in the fourth quarter and marked an annual increase of 0.6 percent.

Other U.S. data showed that service-sector business activity grew by more than expected in February while manufacturing activity fell by more than expected in two different data releases by the Institute for Supply Management. The ADP employment change came in with a 20,000 worker decrease to match forecasts while the governments initial jobless claims data this week fell by 29,000 workers. Pending home sales levels fell for the second month in a row in January by 7.6 percent but were still 8.8 percent above the January 2009 sales level.

Upcoming Events:

Next week’s economic calender highlights include the Swiss unemployment rate, Swiss retail sales, British trade balance, Germany’s consumer price index, Australian employment change, U.S. trade balance, Canada’s employment change and U.S. retail sales. Interest rate decisions are due out of New Zealand on Wednesday and out of Switzerland on Thursday with market forecasts expecting rate holds.

Have a great weekend!

By CountingPips.com

U.S. Nonfarm Payrolls employment data released today showed that jobs fell in the month of February by less than expected while  January’s jobs data was revised slightly higher. The Department of Labor nonfarm payrolls report showed that employment fell by 36,000 workers in February to total of 14.9 million unemployed workers following January’s revised job loss of 26,000 workers. The jobs data was better than expected as market forecasts were predicting a decrease by approximately 68,000 workers for the month.

The unemployment rate remained steady at 9.7 percent after dropping from 10 percent in December to January. Market forecasts were predicting the rate to rise to the 9.8 percent level.

January’s employment totals were revised from an original estimate of 20,000 jobs lost to 26,000 jobs lost for the month.

In the two years since the recession began in December 2007, the number of unemployed workers has increased by 8.4 million and the unemployment rate has advanced from 5.0 percent to 9.7 percent.

The goods-producing sector was the hardest hit by job losses for the month as this sector lost 60,000 total jobs with the construction sector losing 64,000 jobs. The manufacturing sector, meanwhile, added 1,000 jobs in February.

The service-providing sector gained 42,000 total workers in February as the education & health services sector added 32,000 jobs and the professional and business services sector increased by 51,000 jobs. Transportation and warehousing lost 12,000 jobs while financial activities shed 10,000 workers. Government hiring decreased by 18,000 workers in January.

By CountingPips.com

U.S. Pending Homes sales fell more than expected in the month of January, according to the monthly report released by the National Association of Realtors (NAR) today. The NAR report showed that pending home sales contracts signed by buyers fell by 7.6 percent in January following December’s 0.8 percent revised decrease. On an annual basis, pending home sales were still 8.8 percent above the January 2009 sales level.

The January’s sales decline was worse than the approximately 1.0 percent increase that the market forecasts were expecting.

NAR chief economist Lawrence Yun commented on recent pending home sales levels saying, “January pending sales, though still higher than one year ago, remain much lower than expected given that a large number of potential buyers are eligible for the expanded home buyer tax credit. Moreover, the abnormally severe and prolonged winter weather, which affected large regions of the U.S., hampered shopping activity in February.”

Pending home sales in the Northeast decreased by 8.7 percent in January while the Midwest saw a decline of 8.9 percent. Sales in the South edged down by 2.1 percent and sales in the West decreased by 13.2 percent for the month.

On an annual basis, all four areas were above the January 2009 sales level with the Northeast showing an annual gain of 20.5 percent, the Midwest showing a 11.8 percent annual rise, the South showing a 18.0 percent increase and the West showing a 1.4 percent annual advancement.

Weekly Jobless Claims fall by 29,000.

A separate government release by the U.S. Labor Department showed that weekly U.S. jobless claims decreased in the week that ended on February 27th. New jobless claims fell to a total of 469,000 unemployed workers, a decrease over the prior week by 29,000 workers. The 4-week moving average of unemployed workers fell by 3,500 from the prior week to a total of 470,750.

Meanwhile, workers seeking continuing claims for unemployment benefits for the week ending February 20th also decreased for the week. Continuing claims fell by 134,000 workers to a total of 4,500,000 unemployed workers. The four week moving average of continuing claims dropped by 29,250 to 4,575,750.

By CountingPips.com

The U.S. Dollar has fallen versus its global currency rivals so far today in forex trading as investor’s risk appetite has hit renewed levels. The dollar has been losing ground versus the euro, British pound, Swiss franc, Australian dollar, Canadian dollar and Japanese yen while gaining ground against the New Zealand dollar, according currency data by Oanda at 3:47 pm EST.

The euro has surged versus the dollar for the second straight day as the EUR/USD pair has extended to trading above the 1.3700 level. This pair touched a high of 1.3736 before pulling back and has traded at its highest exchange rate since February 17th. The euro has been helped out by news that Greece has pledged budget cuts and new taxes to help shore up some of its debt obligations.

The U.S. stock markets, meanwhile, have traded a bit lower today after a positive start with the Dow Jones down by 3 points, the Nasdaq decreasing over 1 point and the S&P 500 at about even at the time of writing.  Oil has climbed higher by $1.09 to trade at $80.77 while gold has gained by $5.80 to trade at the $1,142.70 per ounce level.

GBP/USD Chart – The British pound sterling has been gaining for a second consecutive day versus the American dollar as the GBP/USD has come off the 1.5000 psychological level to the upside to reach above 1.5100. The GBP/USD had fallen to a low point at 1.4784 on Monday due to concerns of a possible hung parliament emerging in the next election. This prompted speculation that a divided parliament could hamper Britain’s economic policy and growth.

U.S. Economic News: ADP Employment cuts 20k and ISM Service-Sector data rises

U.S. employment fell by 20,000 workers in January but marked the lowest monthly job decline in a year, according to the new ADP National Employment job report out today. U.S. nonfarm private employment fell by 20,000 workers in February following the revised decline of 60,000 jobs lost in January. The January jobs data was originally estimated to have fallen by 22,000 workers while February’s decline marks the 25th straight job declining month. Today’s data matched the 20,000 job decrease that market forecasters were expecting.

The employment data, despite the decrease, has improved in each of the last eleven months and today’s report marked the best monthly result since January of 2008 when the private sector added jobs.

The service-providing sector showed an increase of 17,000 jobs in February and increased for the second straight month. The goods-producing sector decreased by 37,000 jobs as construction jobs fell for the 37th straight month with a decline of 41,000 workers while the manufacturing sector had a gain of 3,000 jobs for the first rise since January 2008.

Medium sized businesses added jobs in February with an increase of 8,000 jobs. Large businesses lost 10,000 jobs in February and small businesses dropped 18,000 jobs.

The market-moving US Nonfarm Payrolls report for February is to be released Friday at 12:30 pm GMT with market forecasts predicting a decline of 30,000 jobs after January’s decrease of 20,000 jobs.

U.S. ISM Non-manufacturing Business expands

U.S. non-manufacturing business activity rose for the second straight month in February and increased to its highest level since December 2007, according to a report released today by the Institute for Supply Management.

The Non-manufacturing Index (NMI) registered a score of 53.0 percent in February from a score of 50.5 percent in January. Today’s data surpassed market forecasts which were expecting an index score of a 51.0 percent.

The NMI equally weights the index scores of business activity, new orders, supplier deliveries and employment and an index score below 50 is considered contracting or declining while a score above 50 is considered growth or expansion. Contributing positively to the report were increases in new orders, business activity/production, employment and supplier deliveries.

By CountingPips.com

The US Dollar has traded stronger versus its European currency rivals today in forex trading while being mixed overall against the other major currencies. The dollar has been gaining ground versus the euro, British pound, Swiss franc and Japanese yen while losing ground against the Australian dollar, New Zealand dollar and Canadian dollar, according currency data by Oanda.

The British pound sterling plummeted versus the dollar earlier today in fx trading after an opinion poll was published showing that this year’s general election in Britain could produce a hung parliament and after news was reported that Prudential PLC would buy a part of AIG (Asian Operations).

Today’s action was an acceleration of the pound’s recent downtrend which has seen the pound fall for five out of the last six weeks to the dollar while also falling to the euro for three straight weeks.

A divided parliament may present a new challenge for Britain’s economy as the political uncertainty could hamper the navigation out of a fragile economic state. The news prompted heavy selling of the pound, dropping the currency to its lowest exchange rate versus the dollar in ten months.

GBP/USD 1-Hour Chart – The GBP/USD fell all the way to the 1.4784 level before paring some of the losses and climbing back to trading around the 1.5000 level.

Euro rises vs Pound

The Euro spiked against the pound today as the EUR/GBP touched a high of 0.9150 in trading before coming back to the 0.9050 level. The EUR/GBP has now surged from the 0.8682 level to the 0.9050 level in just over two weeks.

EUR/GBP Daily Chart – The Euro broke out of its downtrend on the daily chart versus the British Pound last week in forex trading and spiked higher today. The MACD indicator has now turned positive while this pair trades at just about the 70 level on the RSI.

By CountingPips.com

Today, it is a pleasure to bring you an interview with long-time forex trader and analyst Sean Hyman. A financial career spanning over 17 years in currencies, stocks and commodities, Sean’s background includes working as a stock broker at Charles Schwab and for the large forex brokerage, FXCM. Sean has also written for numerous financial websites and currently provides forex insight for the Money Matrix Insider and World Currency Watch, where he is the resident “Professor FX”. I’d like to thank Sean for taking the time to answer our questions.

How did you become involved in the forex world? Was there something particularly attractive to you about the forex market?

A long time ago, I read about a trader in the book “Market Wizards” that traded currencies. It was way back then that I learned that they traded 24 hours a day without commissions and generally with less slippage.

That was an awesome change from the stock market that traded 6 ½ hours a day and had both buy and sell commissions and you could count on a decent amount of slippage on many of the trades. So went I saw all of the advantages of currencies over stocks, I was hooked!

How would you say you got your “forex” education? Did you learn by demo trading, did you have a mentor? etc.

At first I read things like Currency Trader magazine, etc. but then later on I went study an online forex course at www.fxcm.com . That’s where I got my “well rounded” forex education.

Aside from that, I’d learned how to use technical indicators in the stock market and so I was able to transfer those technical analysis skills into the currency market.

It’s funny that you mention about demos…I only used them to learn how to execute currency orders, etc. After that, I started a small live account because I knew that the psychological level was never engaged in demo trading and that’s why people will be successful in demos and not in their live account sometimes.

How often do you trade, are you a full-time trader? Do you trade longer or shorter times?

I’m the Dailyfx.com Forum Moderator and I also run two forex newsletter services (the Currency Cross Trader at www.worldcurrencywatch.com & the Money Matrix Insider at www.moneymatrixinsider.com ). So all of that keeps me trading in the midst of “talking shop” with traders on the dailyfx.com forums and researching for my next trades.

I tend to put on 1-2 trades every couple of weeks. Most of these trades are swing trades that last at least “days to weeks”. I usually only have 1-2 trades on in the market at any one given time. I tend to use the daily chart’s trend as my “directional gauge” to trade in…and the 1 hour or 4 hour chart to trade off of (to enter the trade in).

Do you have any preference on the currency pairs you trade?

Honestly, I will trade most any of the 40+ pairs that FXCM.com offers on their trading platform. I scan through all of the daily charts. My goal is to find the prettiest trend…one that can be seen from across the room.

Once I’ve narrowed those pairs down to the best couple of charts out there, I look for opportune entry points on the 1 or 4 hour charts. If there’s not a high probability set-up then…I sit on my hands until there is one. Pros don’t feel the need to trade at just any time. It’s taken me a while to get to that point (years actually).

Do you use more technical analysis or fundamental analysis, both?

I have four main parts to my analysis: Sentiment …what is the mood of the market. Are traders in more of a “risk seeking” mode or more of a defensive “risk aversion mode”. If they are in “risk seeking” mode, then I know that the pairs will respond to fundamentals. If the market is in a defensive mode, then I know that I can only rely on technicals.

In a stable market, I technically trade the best fundamental currencies. It would be like a stock trader ONLY choosing to trade the companies with the best earnings outlook.

Once I’ve found my pair and the trade set up, my final piece of the analysis is the “risk analysis” which some call “money management”. Its how many lots to trade and how wide my stops need to be. I never risk more than 5% of my account balance on any trade if I were to be stopped out.

So just to recap those 4 points: Sentiment…then Fundamentals, then Technicals, then Risk Analysis.

Do you have any favorite economic or favorite technical indicators that you feel are most reliable?

With fundamentals I watch the CPI year over year data, interest rate announcements, GDP and the employment reports. I look for this info at www.tradingeconomics.com and at www.dailyfx.com.

On the technical side of things, I look to the 50 or 200 day Simple Moving Average and the Slow Stochastics 14,3,3 settings mainly. Sometimes I’ll use the Elliott Wave Oscillator as well. I also love to see what the DailyFX SSI (Speculative Sentiment Index) reading is too. I love to enter trades where there is a strong trend and the SSI reading gives an extreme reading that shows the retail traders are trying to “fight the trend” by attempting to pick a top or a bottom. This is the dumbest thing a trader can do. However, it gives me a very high probability trade as I stick with the trend and they get stopped out, margin called out or scared out. Either way, it’s the “fuel to the fire” for my trade.

Pros know to stick with the trend. The novice says, “Its gone too far and has to turn around.” Therefore they try to be a “bottom picker” or a “top picker”. Once someone has been in the markets for over 17 years as I have…you learn who lasts and who doesn’t. The trend traders stand the best chance of lasting because trends are more likely to continue on than they are to reverse. Bottom and top pickers are always executing low probability trades and rarely last over the “long haul”.

You have also been a stock trader and a commodities trader. Are there specific stock indexes or commodities markets that you feel that forex traders should always keep an eye on?

Yes, I was and still am also a stock trader. I trade stocks and commodity ETFs for my longer term retirement accounts and use forex for my near term to medium term trading account. I watch the Dow, S&P 500 and NASDAQ. I also watch gold, oil, copper a lot too.

Depending on how these commodities are doing will weigh heavily on how the “commodity dollars” like the Australian dollar, New Zealand dollar and the Canadian dollar do. Since those countries are all major commodity exporters, they generally trend in the same direction as the commodities themselves. Also, commodities & stocks tend to have a fairly strong inverse correlation to the U.S. dollar. The euro (generally) tracks along with stocks fairly well too. Now with all of the Greece problems creeping in, the euro has tanked before stocks have.

On the forex market and particularly on the US Dollar, we have seen the dollar stage a rally since the end of 2009, do you think we will see continued Dollar strength through 2010?

Yes, I do think that the dollar rally is likely to continue because interest rate hikes are closer than they were in 2009 AND also because I believe that stocks will tank again later on this year and that money will run to the defensive side…into the world’s reserve currency…the U.S. dollar.

With banks not lending as they should…sustained high unemployment…higher taxes coming from the Obama administration and higher interest rates coming…I don’t see how corporations are going to expand their profit margins and businesses in that type of environment. Therefore, I’d imagine a double dip recession is going to unfold and stocks will head back towards their lows. This would all be supportive of the dollar.

NOW, with that said…if that doesn’t pan out and the dollar breaks its uptrend, I’m just as willing to short. Ultimately, I always want to stay on the side of the trend. I’d always rather be wrong in my opinion of where things are headed and have to change directions to stay on the side of the trend and still make money.

On the global forex stage, are there any particular currencies out there that you feel may be undervalued and/or may be poised to outperform? Or vice versa, currencies that may be ready to decline?

The euro is still overvalued in my opinion. It will likely fall much further (even more than it has already). I think both the dollar and the yen will continue to rise in this shaky, volatile type of environment.

In conclusion, do you have any advice to anyone starting out in forex trading? Is there anything in particular that you wish you had learned when you started out?

Don’t wing it. Get an education. Heck, you can take a course online at fxcm.com for $20. If you’re an active poster on dailyfx.com, you can sometimes even get it for free. Tap into the mentors aka instructors there. They are some of the best I know.

Start with a well capitalized account. Let me be more specific. Trade a MAX of 1 mini lot per $5,000 in a mini account OR trade a MAX of 1 micro lot per $500 in your account. Use wide stops and few lots. Trade over days or weeks and not intraday.

Risk no more than 5% of your capital on any one trade if you were to be stopped out. Trade with the trend. Don’t know the trend direction? Slap a 50 or 200 day SMA on the daily chart and trade in the direction that it points to. Take only entry signals in the direction of that trend. NEVER trade counter to the trend. Trade trends, not news events.

Buy the best technical uptrends on the currencies with the strongest fundamentals. Sell short the best looking downtrends with the currencies that have the absolute worst fundamentals. Don’t put a ton of indicators on your chart. If you have more than 2-3 on there, you have too many on your chart. What the price is doing is more important. Indicators show you what the price is likely to do. The price action on the chart shows you what the pair is doing.

Identify the trend FIRST, then look to the indicators below your chart. Many traders focus on the indicator first (which is a mistake) and they forget about the most important thing…the trend’s direction.

Remember that the risk management on the trade is just as important as picking the right direction on the trade. Pros are prudent risk managers. Novices are sloppy risk managers. Pros trade trends. Novices trade counter to the trend. Pros plan a trade before they enter it and place stops and limits from the start of the trade. Novices are emotional and are quick to click the buy or sell button without “thinking the trade through” first. They “wing it” once they are in the trade.

Never “double down” on a loser. Never back your stop up and widen it. DO remove the risk to the trade once a trade has moved sufficiently away from your entry point. Pros trail their stop based off of what the pair has done up until now while novices try to predict the future and “hope for the best”. Pros “follow” trends…novices feel a need to “predict” and be right. Pros would rather respond to the market.

Learn more about Sean Hyman at:

www.moneymatrixinsider.com

www.moneynews.com

www.worldcurrencywatch.com

http://www.sovereignsociety.com/

http://forexforums.dailyfx.com/

By CountingPips.com

US Dollar trades lower in forex trading, Stocks edge up

The US Dollar has been on the defensive across the board today while the U.S. stock markets have advanced on a busy news day. The American currency has been declining today versus the euro, British pound, Japanese yen, Canadian dollar, Swiss franc, Australian dollar and the New Zealand dollar, according to currency data by Oanda at 3:28 pm EST in the U.S. session.

The euro has mounted a comeback the last couple of days against the dollar after starting the week under heavy selling pressure due to the Greek debt crisis. The EUR/USD currency pair has traded as high as 1.3682 today from opening the day at 1.3536 and after touching a low of 1.3452 early on Thursday. The EUR/USD is currently trading close to this week’s opening exchange rate and could be on its way to reversing a six-week losing streak.

The US stock markets, meanwhile, have traded a bit higher today with the Dow Jones advancing by 20 points, the Nasdaq increasing over 5 points and the S&P 500 up by close to 3 points at the time of writing.  Oil has climbed higher by $1.32 to trade at $79.49 while gold has gained by $10.50 to trade at the $1,118.30 per ounce level.

Today’s economic news showed that the U.S. economy expanded by more than originally estimated in the fourth quarter of 2009 and at the fastest pace in over 6 years, according to a release by the U.S. Commerce Department. The second government estimate showed that the U.S. Gross Domestic Product grew on an annualized basis by 5.9 percent in the October to December quarter following a real 2.2 percent growth rate in the third quarter. The previous estimate put the GDP advance at 5.7 percent.

A significant contributor to the gain in GDP for the fourth quarter was a slowdown in the cutbacks of business inventories. Inventories fell by just $16.9 billion in the fourth quarter after a decrease of $139 billion in the third quarter and a decrease of $160.2 billion in the second quarter. This slowdown in the slashing of inventories accounted for adding approximately 3.9 percent to the GDP increase.

The fourth quarter GDP numbers advanced by the highest growth rate since 2003 and surpassed economic forecasts expecting the growth to meet the prior estimate at 5.7 percent.

GDP has now increased for two straight quarters after contracting for four quarters in a row. The economy declined by 6.4 percent in the first quarter of 2009 and by 0.7 percent in the second quarter before the third quarter’s 2.2 percent rise. Overall for the calendar year of 2009, GDP decreased by 2.4 percent following a 0.4 percent increase for 2008 and a 2.1 percent growth rate in 2007.

Also contributing to the economic expansion was an increase in consumer spending which makes up roughly two-thirds of U.S. economic activity. Consumer spending rose by 1.7 percent (vs 2.0% in previous release) in the quarter after an increase of 2.8 percent in the third quarter.

A gain in exports contributed positively to the GDP numbers as exports of goods and services increased by 22.4 percent (vs 18.1% previous release) in the quarter while imports advanced by 15.3 percent.

Existing-Home Sales drop for second straight month

Also released today, the U.S. existing-homes sales data fell more than expected for the month of January, according to the monthly report produced by the National Association of Realtors (NAR). The NAR report showed that existing-home sales including single family homes, co-ops and townhouses fell by 7.2 percent in January to a seasonally adjusted annual rate of 5.05 million units. Despite the monthly decline, existing-home sales increased by 11.5 percent an annual basis from the January 2009 level.

Market forecasters had predicted the sales data would rise by 0.9 percent in January to a 5.50 million unit sales pace. December’s existing-homes sales had decreased by a revised 16.2 percent to a 5.44 million home rate.

The median sales price for existing homes was $164,700 in January while total housing inventory decreased in January by 0.5 percent to a total of 3.27 million homes.

NAR chief economist Lawrence Yun commented in the report about the sales figures, “Most of the completed deals in January were based on contracts in November and December. People who got into the market after the home buyer tax credit was extended in November have only recently started to offer contracts, so it will take a couple months to close those sales. Still, the latest monthly sales decline is not encouraging, and raises concern about the strength of a recovery.”

By CountingPips.com

Economic news out of the U.S. today showed that new orders for durable goods increased by more than expected in the month of January. Durable goods orders in the United States rose by 3.0 percent in January to a total of $175.7 billion following December’s revised 1.9 percent gain, according to the report released by the U.S. Commerce Department today. January’s advance marked the second consecutive month of increases after October and November registered declines.

Market forecasts had been expecting that durable goods orders would increase by approximately 1.5 percent for the month. Durable goods are products manufactured in the U.S. and considered to last more than three years.

New orders for durable goods excluding transportation decreased by 0.6 percent in January following a revised increase of 2.0 percent in December. This data was worse than the market forecasts which were predicting an increase of 1.0 percent for durables minus transportation for the month.

January’s results for shipments of durable goods decreased by 0.2 percent after gaining for four straight months. Unfilled orders increased by 0.1 percent after falling for fifteen straight months while durable good inventories decreased 0.1 percent for the thirteenth consecutive month. January non-defense orders for new goods rose by 4.7 percent while defense orders for capital goods increased by 19.2 percent.

Weekly Jobless Claims rise by 22,000.

A separate government release by the U.S. Labor Department showed that weekly U.S. jobless claims increased in the week that ended on February 20th. New jobless claims climbed to a total of 496,000,000 unemployed workers, an increase over the prior week by 22,000 workers. This gain of jobless claims was more than expected as market forecasts predicted a fall to 465,000 jobless claims. A 4-week moving average of unemployed workers declined by 6,000 from the prior week to a total of 473,750.

Meanwhile, workers seeking continuing claims for unemployment benefits for the week ending February 13th also increased for the week. Continuing claims rose by 6,000 workers to a total of 4,617,000 unemployed workers. A four week moving average of continuing claims edged up by 4,250 to 4,600,750.

US Dollar trades higher in Forex.

The U.S. dollar has been mostly stronger in forex trading today against the other major currencies on investor risk aversion. The dollar has advanced today versus the British pound, Canadian dollar, New Zealand dollar and the Australian dollar while falling against the Japanese yen, according to currency data by Oanda as of 2:29 pm EST.

Against the euro and the Swiss franc, the American currency is trading virtually unchanged from today’s opening rate after registering gains that have been pared by this afternoon. The euro had fallen versus the dollar to the 1.3452 exchange rate earlier today from the 1.3542 opening rate before an afternoon surge that has brought the EUR/USD pair to back to the 1.3541 level.

The U.S. stock markets, meanwhile, are declining today with the Dow Jones following by approximately 90 points, the Nasdaq decreasing over 10 points and the S&P 500 down by almost 7 points so far.  Oil has fallen by $1.94 to $78.06 while gold has gained by $11.30 to trade at the $1,107.80 per ounce level.

USD/JPY 1-Hour Chart – The US Dollar falling today in forex trading versus the Japanese Yen by over 100 pips on trader risk aversion. The USD/JPY fell under the 89.00 level for the first time since February 5th and is down by over 200 pips since Sunday after gaining last week.

By CountingPips.com

New Home Sales in the United States decreased more than expected for the month of January according to data released by the Department of Commerce today. Purchases of new single family homes fell to an annual rate of 309,000 in January for a 11.2 percent decline from December. Revised data showed that new home sales decreased in December by 3.9 percent to an annual rate of 348,000 homes. On an annual basis, January’s rate of new homes sold was 6.1 percent lower than the January 2009 level.

Today’s sales data failed to match market forecasts which were expecting a 3.5 percent increase in sales for an annual rate of 354,000 new homes sold.

Contributing to the decrease in December was a 35 percent drop in new homes sold in the the Northeast while the West registered a 12 percent decline in sales. Sales in the South fell by 10 percent while the Midwest saw an increase by 2.1 percent from December to January.

US Dollar mixed in Forex Trading

The U.S. dollar has been mixed in forex trading today against the other major currencies after the new home sales report and the Federal Reserve’s Semiannual Monetary Policy Report to the Congress today. The Fed report provided anticipation in the markets for any new hint of when interest rates might move. The Fed statement put to rest much of any rate hiking speculation with the usual line that rates are “likely to remain exceptionally low for an extended period”.

The dollar lost ground during the Fed’s congressional meeting but has managed to pare some of those losses later while U.S. stock markets were pushed higher. Overall today, the dollar has gained today versus the British pound and the New Zealand dollar while falling against the euro and the Swiss franc, according to currency data by Oanda at 2:55 pm EST. The dollar, despite early ups and downs, is currently trading virtually unchanged versus the Canadian dollar, Japanese yen and the Australian dollar compared to today’s opening day rates.

The U.S. stock markets have stayed positive today with the Dow Jones gaining by over 60 points, the Nasdaq increasing over 15 points and the S&P 500 up by just under 8 point at time of writing. Oil has edged higher by $1.00 to $79.86 while gold is about unchanged at the $1,102.70 per ounce level.

By CountingPips.com

The U.S. dollar has been on the rise in the forex markets today while U.S. stocks have taken a hit as investor risk aversion has been the dominant theme in the U.S. session today. A sharp decline in the Conference Board’s consumer confidence survey to its lowest point since April 2009 has contributed to a higher preference for the safe haven currencies (U.S. dollar, Japanese Yen) and less demand for the higher-yielding currencies as well as stocks and oil.

The dollar has been driven higher today versus the euro, Swiss franc, British pound, Canadian dollar, New Zealand dollar and the Australian dollar, according to currency data by Oanda at 2:17 pm EST. The dollar, meanwhile, has fallen versus the biggest beneficiary of risk averse sentiment, the Japanese yen.

The U.S. stock markets have had a negative trading session today with the Dow Jones falling by over 80 points, the Nasdaq decreasing over 20 points and the S&P 500 showing over a 10-point shortfall. Oil has declined by $1.33 to the $78.92 per barrel level while gold has been unchanged and trades around the $1112.60 per ounce level.

Consumer Confidence decreases in February Survey

Consumer confidence fell in February after increasing for three straight months, according to a report released today by the Conference Board, which produces the Consumer Confidence Index. In a survey of 5,000 households, the index showed that consumer confidence decreased by 10.5 points from 56.5 in January to standing at 46.0 in February. The Expectations index also fell in February to 63.8 from 77.3 in January while the Present Situation index declined from 25.2 in January to 19.4 in February.

The Director of the Conference Board Consumer Research Center Lynn Franco talked about the newest survey saying, “Consumer Confidence, which had been improving over the past few months, declined sharply in February. Concerns about current business conditions and the job market pushed the Present Situation Index down to its lowest level in 27 years (Feb. 1983, 17.5). Consumers’ short-term outlook also took a turn for the worse, with fewer consumers anticipating an improvement in business conditions and the job market over the next six months. Consumers also remain extremely pessimistic about their income prospects. This combination of earnings and job anxieties is likely to continue to curb spending.”

U.S. house prices see small gain in December

Home prices in the U.S. improved in December to show a small increase for the seventh straight month, according to the Standard & Poors/Case-Shiller Home Price Index released today. The S & P’s/Case-Shiller Index measures sales prices of existing single-family homes in major cities nationally. The report showed that the 20-city composite index increased by 0.3 percent in December on seasonally adjusted basis. On an annual basis, the 20-city composite fell by 3.1 percent in December from the December 2008 level.

David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s, commented on the report saying, “As measured by prices, the housing market is definitely in better shape than it was this time last year, as the pace of deterioration has stabilized for now. However, the rate of improvement seen during the summer of 2009 has not been sustained.”

USD/JPY 1-Hour Chart -The U.S. Dollar falling versus the Japanese Yen today in forex trading. The USD/JPY pair has leveled at the significant 90.00 psychological level after breaking below the recent supportive trendline earlier today.

By CountingPips.com

The U.S. dollar continued its gain versus the euro in the forex markets this week while the dollar’s overall performance was mixed against the other major currencies. The U.S. currency rose versus the euro, British pound, Japanese yen and the Swiss franc in the week that ended February 19th, according to currency data from Oanda. Meanwhile, the dollar fell against the Canadian, Australian and the New Zealand dollars for the second straight week.

The dollar’s rise versus the euro marked the first six week gain in almost a decade although the week’s 21 pip increase was the smallest of the last six weeks. The Greek debt crisis and the uncertainty surrounding a potential bailout helped keep the euro under pressure for most of the week. On Monday, European Union officials reiterated their support for the debt-ridden nation but also gave the country one month to formulate a plan to help cut its deficit. One of the euro’s original advocates, Robert Mundell, didn’t do the euro any favors on Tuesday when he stated that Italy, not Greece, was the biggest threat to the euro. See the video.

Futures bets against the euro increased to a record high for the third straight week as of February 16th, according to the Commitments of Traders (COT) data released on Friday by the Chicago Mercantile Exchange. Non-commercial futures positions, those taken by hedge funds and large speculators, were net short the euro against the U.S. dollar by 59,422 contracts after being net short the euro by 57,152 contracts the week before. Net short euro positions have increased for five consecutive weeks.

The COT report is published every Friday by the Chicago Mercantile Exchange and shows futures positions as of the previous Tuesday. It can be a useful tool for traders to gauge investor sentiment and to look for potential changes in the direction of a currency or commodity.

The largest gain for the dollar this week was against the British pound with a 229 pip increase followed by the 158 pip advance versus the Japanese yen (see chart). The dollar declined by over 100 pips against the Canadian dollar and the Australian dollar while showing a small 19 pip deficit to the New Zealand dollar.

Market news that helped push the dollar higher on Thursday was the Federal Reserve’s raising of the discount rate that the government charges for loans to banks. The discount rate was increased from 0.50 percent to 0.75 percent as the move was intended to spur a “further normalization of the Federal Reserve’s lending facilities.

According to the Fed statement, the change was “in light of continued improvement in financial market conditions” but cautioned against thinking this move was a change in monetary policy or a shift in stance on main interest rate. Despite the Fed’s word of caution, the move prompted speculation that this was a first step in the direction of an overall normalization of monetary policy and towards ending its special stimulus programs.

Next week’s economic calender highlights include the S&P/Case-Shiller Home Price Index and U.S. Consumer Confidence on Tuesday. The German Gross Domestic Product and U.S. New Home Sales are released on Wednesday. Thursday releases include Switzerland’s Employment Level, Germany’s Unemployment Change and U.S. Durable Goods Orders. Friday has the U.K. and U.S. Gross Domestic Product reports as well as U.S. Existing Home Sales and Canada’s Current Account data.

Have a great weekend!

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By CountingPips.com

The U.S. Dollar has been mixed in the forex markets on a day filled with U.S. economic data while the American stock markets have traded higher today. The dollar has advanced versus the euro, British pound, Swiss franc and the Japanese yen while declining against the Canadian dollar in forex trading as of 1:34 pm EST in the afternoon of the US trading session. The Australian dollar and New Zealand dollar are trading virtually unchanged against the American currency from their opening day exchange rates.

The U.S. stock markets, meanwhile, are having a positive session today with the Dow gaining around 20 points, the Nasdaq increasing by over 2 points while the S&P 500 is up by roughly 1.2 points. Oil has edged higher to $78.13 while gold has been unchanged at the $1,119.50 per ounce level.

Leading Indicators continue to rise

U.S. economic news releases out of the U.S. today showed that the U.S. Leading Indicators Index published by the Conference Board today increased for the tenth straight month in January. The Leading Indicator Index, which measures future economic activity, rose by 0.3 percent in January following a revised 1.2 percent gain in December. January’s advance failed to surpass the market forecasts which were predicting a gain of 0.5 percent for the month.

The coincident index, which is viewed as a measure of the current economic activity, increased by 0.2 percent in January while the lagging index edged down by 0.1 percent after declining by 0.3 percent in December.

An economist at the Conference Board, Ken Goldstein commented on the report saying, “The cumulative change in the U.S. LEI over the past six months has been a strong 9.8 percent, annualized. This signals continued economic recovery at least through the spring.”

Jobless Claims increase last week

A release by the U.S. Labor Department showed that weekly U.S. jobless claims increased in the week that ended on February 13th. New jobless claims grew to a total of 473,000 unemployed workers, an increase over the prior week by 31,000 workers. A 4-week moving average of unemployed workers fell by 1,500 workers from the prior week to a total of 467,500.

Meanwhile, workers seeking continuing claims for unemployment benefits for the week ending February 6th was unchanged at 4,563,000 unemployed workers. A four week moving average of continuing claims declined by 24,000 to 4,585,750.

Producer Prices gain more than expected

The Producer Price Index, released in a separate report by the Department of Labor, rose more than expected in January as energy costs increased and boosted inflation on finished goods. Producer prices increased by 1.4 percent in January following an increase of 0.4 percent in December and have now increased for four straight months. The annual rate of increase for Janaury showed that producer prices were 4.6 percent higher than January of 2009 after December’s annual rate registered a 4.4 percent increase.

Market forecasts were expecting monthly producer prices to gain by 0.8 percent and the annual rate of increase to register 4.4 percent.

Core producer prices, excluding food and energy prices, rose by 0.3 percent in January following no change in December and surpassing market expectations of a 0.1 percent gain. On an annual basis, core producer prices advanced by 1.0 percent in January compared with an increase of 0.9 percent in December and just above expectations of a 0.8 percent increase.

Helping to contribute to the increased producer prices in January was the cost of energy which advanced by 5.1 percent for the month after increasing by just 0.7 percent in December. The crude goods index climbed by 9.6 percent while the foods index also registered a 0.4 percent increase for the month.

Philly Fed Business Survey improves

The Philadelphia Manufacturing Business Index released today by the Philadelphia Federal Reserve Bank showed that its survey increased in February and has remained in positive territory for the sixth straight month. The Philly general business diffusion index increased to 17.6 in February after January’s score of 15.2. A positive score is considered growth in that business sector while a negative score is considered a contraction. Continuing to show positive manufacturing levels this month in the business survey were the indexes for general activity, new orders, shipments and number of employees.

By CountingPips.com

The U.S. dollar reversed course from yesterday downtrend in the forex markets to gain against the other major currencies today. The dollar has been advancing today versus the euro, Swiss franc, British pound, Canadian dollar, Japanese yen, New Zealand dollar and the Australian dollar as of 2:27 pm EST according to currency data by Oanda.

The U.S. stock markets have had a positive session today after yesterday’s rise with the Dow Jones gaining by roughly 30 points, the Nasdaq increasing over 5 points and the S&P 500 showing a 3 point gain. Oil and gold have both been almost unchanged as oil sits at the $77.05 level while gold trades around $1119.30 per ounce.

Yesterday, the dollar was on the defensive as the euro surged sharply higher as many speculated that the euro’s recent decline may have been overdone. Today’s market action appears to show that traders used yesterday’s higher euro level as an attractive point to enter into a euro short position (shorting the EUR/USD). The euro has fallen over 150 pips today (at time of writing) to almost erase all of yesterday’s gains.

The EUR/USD touched a high this morning at the 1.3788 exchange level before a sharp decline brought the pair to the 1.3600 level where there has been buying support and has halted the steep descent. On the eurozone debt situation that has been pressuring the European currency, BusinessWeek quoted noted economist and the so-called “father of the euro” Robert Mundell as saying that Italy is the “biggest threat” to the eurozone. Italy is the eurozone’s fourth largest economy but has the second largest debt in the union. See the full BusinessWeek Story.

US Housing data is mixed in January

Economic news out of the U.S. today showed that housing starts increased in January to the highest level since July 2009 while housing completions and building permits fell, according to data released by the Commerce Department on new residential construction. Housing Starts rose by 2.8 percent in January to a seasonally adjusted annual rate of 591,000 starts following an annual rate of 575,000 in December. January’s data was better than the economic forecasts that were predicting a rise for the month to a 580,000 starts pace.

Building permits statistics, used as a predictor of future construction, showed a seasonally adjusted annual rate of 621,000 permits in January which is a decrease of 4.9 percent when compared to December. Building permits virtually matched forecasts that were expecting permits to number approximately 620,000 annually.

Housing Completions for January decreased when compared to December as completions fell to an annual rate of 659,000 privately-owned housing completions. This is a decline of 12.4 percent from December’s completion totals.

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By CountingPips.com

The U.S. Dollar fell lower in forex trading against most of the major currencies today as renewed risk appetite dominated in the financial markets. Stocks, gold and oil traded to higher levels on the market optimism while the euro advanced by over 150 pips against the dollar. The U.S. currency lost ground to the euro, British pound, Canadian dollar, Australian dollar, New Zealand dollar and the Swiss franc today while the USD gained versus the Japanese yen.

The U.S. stock markets ended sharply higher today after being closed for the President’s day holiday yesterday. The Dow advanced by 169.67 points, the Nasdaq increased 30.66 points and the S&P 500 was up by 19.36 points. Oil traded 4 percent higher to the $77.13 level today while gold climbed by $29.80 to $1,119.30 per ounce.

The fears of the Greece debt crisis took a back seat today to the positive sentiment felt in the markets after weighing on the euro and European markets over the past weeks. Developments on the Greece front saw the European Union reiterate its support for the debt-ridden nation but also gave the country one month to formulate a plan to help cut its deficit.

Meanwhile, positive manufacturing news out of New York helped boost risk appetite today as data showed manufacturing activity grew in February at the fastest pace in four months. The Empire State Manufacturing Survey, a monthly business survey of New York State manufacturers and released by the NY Federal Reserve, rose by more than expected as the general business index increased by 9 points to 24.9 points in February from 15.9 in January. The 9-point gain easily surpassed forecasts expecting an 18.00 score and brought optimism of a recovery in the manufacturing sector.

EUR/USD 1-Hour Chart – The Euro on an upswing in the forex markets today against the U.S. dollar. The EUR/USD surged 150 pips higher and reached a high around the 1.3779 level today. This pair pushed through the 200-hour moving average in red and trades above this level for the first time in a month.

By CountingPips.com

The U.S. dollar continued its rise versus the euro this week in the forex markets while futures bets against the euro climbed to a record high level. The U.S. dollar rose by approximately 46 pips against the euro for the week as the Greek debt crisis and the uncertainty surrounding a potential bailout helped keep the European common currency on it’s downward trajectory. The week ending on February 12th marked the euro’s fifth straight week of decline against the American currency with the euro falling to an eight and a half month lowpoint.

Futures bets against the euro climbed to a record high as of February 9th, according to the Commitments of Traders (COT) data released on Friday by the Chicago Mercantile Exchange. Non-commercial futures positions, those taken by hedge funds and large speculators, were net short the euro against the U.S. dollar by 57,152 contracts after being net short the euro by 43,741 contracts the week before. Net short euro positions have now increased for four consecutive  weeks.

The COT report is published every Friday by the Chicago Mercantile Exchange and shows futures positions as of the previous Tuesday.  It is a useful tool for traders to gauge investor sentiment and to look for potential changes in direction of a currency or commodity.

The U.S. dollar had a mixed week versus the other major currencies in forex trading, breaking its recent weekly trends. The USD rose versus the Japanese yen and Swiss franc while falling against the British pound, Canadian dollar, Australian dollar and New Zealand dollar, according to currency data from Oanda. The American currency had increased against the British pound, Canadian dollar and the New Zealand dollar for three straight weeks prior to this week’s fall and the Australian dollar had declined for four straight weeks before a turnaround.

The largest gain for the dollar this week was against the Japanese yen with a 69 pip increase followed by the 46 pip advance versus the euro (see chart). The dollar declined by over 200 pips against the Canadian dollar and by almost 200 pips versus the Australian dollar.

Next week will be a short week in the forex markets as many countries have holidays. There is the President’s day holiday in the U.S. on Monday, the Family Day holiday in Canada on Monday and the Swiss markets will be closed all week for Carnival. The Lunar New Year will close markets in South Korea, Hong Kong, Singapore, Malaysia, Taiwan, China and Vietnam on Monday with some of these markets staying closed for the week.

Retail Sales data out of the U.K. and Canada will be released while Japan’s interest rate decision and Gross Domestic Product report are also scheduled this week. The U.S. will see economic releases of Empire State manufacturing data, leading indicators, long-term TIC flows, housing starts/building permits and the Federal Open Market Committee’s meeting minutes.

EUR/USD Daily Chart – The EUR/USD currency pair dropped to the 1.3531 exchange rate level on Friday for the first time since May 19th of 2009, only a few months after reaching a 2009 high on November 25th at the 1.5143 level. This pair started its decline in early December and fell below the 200-day simple moving average (in red) on January 19th.