USA: СВ Consumer Confidence makes up 52.5pts in December

 

Dec 28^th 2010 at 15.00GMT the US Conference Board released its Consumer Confidence report.

Previous value 54.1 Forecast 56.3

The СВ Consumer Confidence index is a composite index based on household research. The consumer confidence index is an anticipatory indicator of consumer spending, which in its turn is the main indicator of the country’s overall economic activity. The survey involves 5000 households. The respondents are asked to evaluate the present and future economic conditions, including labor market perspectives, business conditions and general economic situation.

In the US the СВ Consumer Confidence index grows in value, however insignificantly (a couple of points). According to James Nielsen, vice-president of Global Consumer Insights under Nielsen Co., the Americans are still too cautious about their spending in the light of economic ambiguity and still high unemployment level.

Switzerland: KОF Econоmic Barоmeter makes up 2.1pts in December

On Dec 29^th at 10.30GMT the KOF Economic Research Agency released its Econоmic Barоmeter index for December.

Previous value 2.12 Forecast 2.08

KОF Econоmic Barоmeter is a composite indicator based on 12 economic indexes. It is used to define Switzerland’s economic development perspectives for the next 6 months. As a rule the value is volatile.

The 12 indexes are connected with Switzerland’s banking sector, housing market, industrial production, new manufacturing orders and consumer confidence.

The KОF Econоmic Barоmeter index entered the positive zone inSeptember 2009. It has been staying positive ever since even though since July 2010 it has been showing some weakness. It means that the GDP keeps growing while the pace of economic growth starts declining.

How real is the possibility of Germany leaving the EU?

 

This year has shown that the further perspectives of the EU and its currency are not that favorable. Some experts even say that their existence may go out on a limb. According to them, there are plenty of significant reasons for numerous countries of the Euro zone to go back to their own national currencies. And they well may do it in the future.

What is Germany dissatisfied with?

Masterforex-V Academy experts have defined the following issues:

·         The only thing known for a certainty is that most Germans are not satisfied with the common European currency.

·         The Cologne-based analytic center called YoGov-Institut has recently conducted a corresponding survey. The results show that about 49% of the respondents want the D-Mark back while 41% oppose their opinion.

·         No wonder that the results look like that because the Euro currency is less reliable than the old D-Mark, which has had a significant impact on the income and the quality of life of most Germans.

·         Having a relatively powerful economy Germany has to support its weaker EU counterparts.

Portugal runs out of sugar. Will it affect Europe?

Market Leader informed

Previously Masterforex-V Academy experts repeatedly suggested paying attention to the fact that sugar and coffee prices had been constantly increasing and updating their highs around the world. The recent publications of the Financial Times prove that in 2011 the situation is unlikely to change for the better. Moreover, the supplies of sugar and coffee will be restrained, which in its turn will create favorable conditions for the prices to continue their way up. Indeed, it sounds like a rather probable scenario if to take into account that last week Portugal completely exhausted its sugar reserves.

In terms of figures, the terrible situation looks as follows: On Monday at NYMEX the March raw-sugar contract broke a 30-year price record by reaching $0.335 per pound (453g). On the same day the March coffee contract (Arabica) reached $2.2695 per pound, which appeared to be a new price record in 30.5 years.

Crises of the Nineties and Ways of Combating Them (Part III)

Market Leader informed

Crisis in Japan and its consequences

In late 1980s some ‘forecasters’ claimed that Japan, which had been developing much faster than the US for a long time, would soon overtake it in terms of GDP per capita and, in the first decade of the 21^st century, the total gross domestic product and industrial production. In the 1990s Japanese growth rates were more than twice less than in the US and reached even negative figures in 1998 ending up around the zero in 1999-2000.Japanese decline came about because of a lot of factors – from ‘infection with the Asian illness’ to structural ailments of Japanese economy. However, most analysts believe that organic vices of the financial system that came to the foreground played the most important role.

In a somewhat sensational book intended to destroy the myth of the everlasting Japanese miracle, Professor D. Hayes (a European citizen living and working in Japan) writes: “The core of the Japanese financial system has kind of inherent mould. Whether we look at the Japanese financial system from a micro or a macro perspective, we see one and the same picture everywhere: fraud, nepotism, absolute lack of competence”. You can also read the following in the summary on the book’s cover: “Japan allowed large-scale infiltration of organized crime into its financial institutions".

Crises of the Nineties and Ways of Combating Them (Part II)

Market Leader informed

Features unique to the Brazilian crisis in 1998-1999

It isn’t easy to find a country in the world with such an explosive potential – the gap between the rich and the poor is among the widest globally. Having peacefully liquidated the military dictatorship in late 1980s, Brazil, a federation by state structure, opted for the path of liberal and democratic (by Latin American standards) development. However, inflation which reached hundreds and even thousands of percent a year remained its primary obstacle to normalization of the economic situation. In 1994, a financial stabilization was carried out upon the initiative and under the supervision of Finance Minister Cardoso to become the first success in many decades. Inflation was lowered to a level of several percent a year. Furthermore, this Brazilian-style shock therapy didn’t put an end to industrial growth. These achievements made such a strong impression on the nation that soon Cardoso was elected President and reelected for the second term in 1998.

Crises of the Nineties and Ways of Combating Them (Part I)

Market Leader informed

The former Managing Director of the International Monetary Fund, Michel Camdessus, described the financial crisis that struck Mexico in 1994-1995 as ‘The First Crisis of the 21^st Century’. The Great Seven industrial nations held another summit in summer 1995 to discuss, among other issues, Mexican-style crises and ways of preventing them. These concerns didn’t take long to materialize themselves. The crisis in countries of Eastern and South-Eastern Asia in 1997-1998 had many features in common. The largest nation of Latin America, Brazil, ended up in the orbit of a similar crisis in fall 1998. Finally, even though Russia has a special crisis many of its aspects resemble both the Mexican and Brazilian scenario.

Common features of 1990s crises

The then fashionable word ‘globalization’ can be taken as a starting point. Capital always tends to look for most favorable spheres of attraction worldwide. But before early 1990s there had never been such opportunities – political, economic, technical, informational. Only such islands as North Korea remain closed to foreign capital till today.

GBPUSD volatility in advance of Christmas holidays

Market Leader informed

Last week the FOMC announced that the economic improvement won’t prevent it from pouring $600 into the market of bonds until the unemployment is high. Will it help the US economy?

Let’s look at this week’s news releases:

Dec 21st
9:30 GBP - Public Sector Net Borrowing

Dec 22nd
9:30 GBP - Current Account
9:30 GBP - MPC Meeting Minutes
15:00 USD - Existing Home Sales

Dec 23rd
13:30 USD - Core Durable Goods Orders
13:30 USD - Unemployment Claims
15:00 USD - New Home Sales

 

What Euro Rates Should be Expected Before Christmas?

Market Leader informed

The Euro is trading today in the range of 1.3130-1.3180.

 

Investors are gradually preparing for Christmas and the calm is coming to markets. No sharp moves were seen early during the trading day on Monday with the dollar stabilizing across the entire spectrum of the market. The Euro remains under pressure because EU countries leaders failed to adopt any fundamental measures last week.

 

Is Forex in Any Way Different from Gambling: Casino, Slot Machines or Thimblerig?

Market Leader informed

Can one make money in the forex? What is the difference between the forex and gambling: casino, slot machines or thimblerig? It is this kind of an attitude to the foreign exchange market, its likening to a type of gambling that starts showing itself in analytical news overviews in a number of media. What indeed is forex for Russians and residents of the world’s other countries?

 

Is there any difference between forex and gambling (casino, slot machines, thimblerig etc)?

 

Experts of the Analytical Team of the Masterforex-V Trading Academy pointed out that trading in the forex, stock and commodities markets is fundamentally different from gambling in a casino, on slot machines:

Sugar: How Much Will it Cost On Christmas Eve?

Market Leader informed

Next week sugar prices in London and New York will remain generally stable. This follows from a survey held by Bloomberg.

 

5 out of 12 analysts, brokers and traders surveyed by the agency don’t expect any significant fluctuations of raw sugar in New York during this week’s trading that will be over on 23 December. On Friday, 24 December, New York and London Commodity Exchanges will be closed because of Christmas Eve.

 

Sugar prices grew in New York based ICE Futures U.S. as experts of the Masterforex-V Trading Academy pointed out in an article. They added almost 7%.

 

Analysts of the Market Sentiment Analysis Department within the Masterforex-V Trading Academy point out that

Gold and Precious Metals: Will Their Prices Go Down Next Week?

Market Leader informed

International markets are marked by lower trading activity and narrower ranges.

 This is caused by coming Christmas holidays. Market participants don’t feel like risking and are content with summary results of the year, on the one hand. On the other, minor speculative transactions don’t reflect sentiment of managers of large hedge funds. Positive figures for the Eurozone and the US are subjecting gold to downward pressures.

 According to some data, the Hindus were actively buying gold during the Asian session today which pushed its price to $1,378.5 an ounce. Nevertheless, the overall pre-New-Year feeling remains uncertain which, of course, is primarily connected with an outflow of funds from the metal market. At the same time, the financial community is dominated by an opinion about short-term pressures on gold as inflationary expectations and the sovereign debt crisis in the Eurozone stir up investor interest in this metal. The silver market continues consolidating around $29 an ounce. The situation with silver is equivocal, though the general sentiment in the market, according to a number of analysts, remains bullish. Based on some data, platinum is supported by Indian jewelers. However, the price hasn’t made any significant move in a couple of days already and is consolidating around $1,700 an ounce.

ECB increases its capital

Market Leader informed

The European Central Bank is currently strengthening its positions to fortify the Euro-zone countries against a possible default.

ECB representatives say the bank is going to double its stock capital from €5B to €10B by the end of 2012. It is the first time the ECB is going to take such a step since the Euro-zone was founded.

In the meantime, during the EU summit, opened yesterday, the countries agreed to found a special permanent fund for securing the stability of the common European currency. The fund will be allocating money only in case of an actual emergency.

The Euro currency rate has slightly strengthened at Forex in the light of the above-mentioned event. The growth of EUR against USD is taking place within the correction against the bearish wave 1.3497-1.3180. At the Department of studying Masterforex-V trading system they think that getting over the MF pivot at 1.3480 will give way to the formation of bullish wave a(C )/C of the senior timeframe. If the bullish MF pivot at 1.3196 fails to restrain the movement, the currency pair will start developing short downward wave “a(C )/C”.

Today’s news (GMT):

UK sees buying fever for New Year trees and golden coins.

Market Leader informed

Not long ago the UK authorities were speaking about financial difficulties and austerity measures necessary to cope with them. Christmas is coming. It is the reason why New Year trees and golden coins have sharply increased in price.

According to the Royal Mint, the current demand for golden coins is the record-high, the biggest one ever seen (for over 1000 years of the Royal Mint existence). Despite the 450% growth of the price on gold since 2001 and the record-breaking price of $1430.95 per ounce (seen last Tuesday) the sales of golden coins have increased by 400%.

In the meantime the British Pound currency rate keeps staying flat at Forex. According to the Department of studying Masterforex-V trading system , GBPUSD has completed a bearish wave of level H8 and is forming a correction. This correctional wave belongs to level H2. It will be developed until the price gets over the MF pivot at 1.5561. In this case the currency pair will see the formation of wave a(C )/C H8.

Today’s news (Dec 17^th ):

Will the Yuan Manage to Replace the US Dollar?

Market Leader informed

The unique path of China’s development has affected its monetary policies and regulation. Transformations in the country started in early 1980s and resulted in rapid growth of the PRC’s economy and, of course, increased weight in the international area not only on different markets, but also in the financial sphere. By late 1990s China eventually became the second-largest holder of gold and foreign currency reserves and the largest holder of debt securities of the superpower – the US. Today China is among leaders of the global economic system and its monetary policies greatly affect global financial markets.

 

What makes PRC’s monetary policies different from western ways?

 

According to experts of the Masterforex-V Trading Academy:
• PRC’s monetary policies are characterized by high effectiveness and specifics far from what is acceptable in liberal economies;
• this helps the country’s government to counter foreign influences and continue successfully developing Chinese economy even in the context of the global crisis;

Precious metal market overview

Market Leader informed

The market of precious metals keeps seeing corrections. Besides,the market is being pressed by the speculative bearish positions and the market sentiments concerning China’s interest rate decision (it is expected to be raised).

Gold has sharply declined. That is how it reacted to the US Initial Jobless Claims report at 10.30GMT (420K for the last week against 421K expected).The price broke through the support level at $1372 per ounce. Now it‘s being traded around $1366.

Global sentiments: according to some analysts, India as the biggest importer of gold, may sharply reduce the import in 2011 (up to 50%). It conditioned by the fact that the rural population, which consumes over 70% of the imported gold, cannot afford buying gold at very high prices. Besides, the Indian market of gold looks overbought (according to unofficial data, this year’s volume of gold imported by India may reach 800 tons).

Copper. Price forecast for 2011.

Market Leader informed

In November-December numerous analytic agencies summarize the results of the year and make forecasts for the next year. In particular, in mass-media articles and releases one can find various forecasts for the future price on copper. Experts of the Department of Market Sentiment Analysis, Masterforex-V Academy, offer their own forecast for the copper futures based on the techniques taught and used at the department.

The price of the copper futures (HG) is currently staying close to the historic high ($4.26), which is a stimulus to perform constant monitoring of the situation. The November up-bar with wide spread and high volume (max volume over the last 7 years) suggests that the big-scale players start taking profit. Defining the further trend will become possible as soon as there are mere signs of one of the variants.

Switzerland: Libor Interest Rate stays unchanged.

Market Leader informed

On Dec 16^th at 8.30GMT Libor released its Interest Rate Decision.

Previous value 0.25% Forecast 0.25%.

The LIBOR Rate (or the London Interbank Offered Rate) is a daily reference rate based on the interest rates at which banks borrow unsecured funds from other banks in the London wholesale money market (or interbank market).

The LIBOR rate is calculated by the British Bankers' Association (BBA) for different terms from 1 day up to 12 months for various currencies.

The British Bankers' Association (BBA) offers the rate as a daily service.

The Swiss National Bank (SNB) may keep the interest rate close to zero trying to restrain the Swiss Franc currency rate after the outbreak of the EU debt crisis threatening the economic recovery of Switzerland.

AUDUSD: Euro session forecast

Market Leader informed

Today (Dec16th) at the Asian session the British Pound strengthened its positions against the US Dollar.

AUDUSD is being traded around 0.9865 gaining 0,3% on average.

Experts suppose that the currency pair has already found its support at 0.9850, last Wednesday’s low. The resistance level is believed to be Tuesday’s high at 0.9875.

It should also be noted that the Australian Dollar (AUD) has gained against JPY and EUR. GBPJPY reached 131,02 (gaining 0,6%) while EURGBP came up to 0.8496 (losing 0,04%).

Movement scenarios: markup. Daily-H1. AUDUSD. Dec 16^th 2010.

1. Upward scenario (CP1-CP2-CP3)

Support level: 0.9840 is critical for this variant of movement. The scenario will be canceled if the level is overcome.

Resistance levels:

Volatility indicator “Saks Channel”: 0.9868 - 0.9934 - 1.0000.

Local highs: 0.9954 - 1.0029. Buy target grid of the basic indicator: 0.9961 - 0.9989 - 1.0035.

 

Strong US dollar presses crude oil.

Market Leader informed

The USD strengthening has been pressing the prices on crude oil over the last few days.

The Euro-zone’s debt problem and the Fed Reserve’s recent report indicate a decline in the global economic development, which affects the demand for energy carriers. Yesterday’s preliminary reports showed the reduction of imports. The refineries are getting ready for the end of the year and trying first of all to exhaust their reserves in order to reduce the machinery taxes.

The OPEC members have recently agreed to hold another emergency meeting in case the prices exceed $90 per barrel as they can significantly restrain the pace of the global economic recovery and growth. In general, these factors press the crude oil prices.

In terms of tech analysis, the situation is negative. There are no aggressive purchases. The buyers cannot hold the levels.

Inflation in UK remains high.

Market Leader informed

In connection with the growth of the world prices on crude oil and raw materials, the UK consumer price inflation remains at a high level. Such a tendency (3% growth) has already been seen for a couple of months. However, various discounts offered by numerous retailers smoothen over the impact. The Unemployment Rate news-release expected this week is likely to confirm the results of numerous opinion polls saying that the employment rate growth in the UK has slowed down. The Retail Sales report, which is to come out this week as well, is expected to see growth in the light of the New Year holidays. However it won’t considerably improve the overall economic picture.

In the meantime at Forex the British Pound currency rate is trying to decide on the destination of its further mid-term movement. According to the Department of studying Masterforex-V trading system , by breaking through the defensive MF pivot and coming out of the MF sloping channel the price has recently terminated the entire wave started from 1.5510. The newly-formed bearish wave needs its own “moment of truth” to define in what direction GBPUSD will go further. It can be either correctional wave “B” followed by a downward FZR or another breakout of the high, increasing the wave level of the bullish wave.

USA suggests lifting some sanctions off Iraq. What influence to expect on USD currency rate?

Market Leader informed

Today at the UN Security Council meeting the US delegation has offered lifting some sanctions off Iraq. It should be noted that the offer is unexpected for everyone.

U.S. Ambassador Susan Rice said in a letter to Secretary-General Ban Ki-moon circulated Tuesday that the goal of the session is “to recognize and reinforce Iraq’s recent progress and to explore ways in which the United Nations can continue to support the Iraqi government and people.”

However, it is still unclear whether the US initiative will be approved by the others.

Movement scenarios: markup. H4-H1. EURUSD. Dec 15^th 2010.

1. Upward scenario (CP1-CP2-CP3)

Support level: 1.3336 is critical for this variant of movement. A breakout of it cancels the scenario.

Resistance levels:

Volatility indicator “Saks Channel”: 1.3394 - 1.3488-1.3582.

Local high: 1.3440. Buy target grid of the basic indicator: 1.3534-1.36571.

 

What will be the GBPUSD currency rate?

Market Leader informed

Today, on Dec 15^th, the British Pound declined against the US Dollar.

 

GBPUSD is currently being traded around 1,5763, losing 0,7% on average.

 

Currency analysts expect 1.5720 to act as support. Tuesday’s high at 1.5911 may become the closest resistance.

It should also be noted that the British Pound has recently gained versus the Yen and Euro.  GBPJPY reached 132,12 (gaining 0,11%) while EURGBP reached 0.8470 (losing 0,12%).

 

Movement scenarios: markup. Daily-H1-M15. GBPUSD. Dec 15^th 2010.

What are the Implications of Moody’s Possible Downgrading of US Rating?

Market Leader informed

On 13 December 2010 the investor and trader community that has recently calmed down was simply dumbfounded by the announcement made by one of the world’s most trustworthy rating agencies, Moody’s. It forecasted that it might decrease US investment rating in 2012. According to Moody’s analysts, the economic situation in the US is getting worse and ‘is suffering’ because of an extension of tax benefits adopted as a compromise by US Congress upon agreement reached between Republicans and Democrats. What forecasts about the US are behind such rather strange wording of Moody’s?

 

Today’s US rating and Moody’s forecast for ‘tomorrow’. According to Moody’s rating
* the US holds the so-called Aaa level or, simply put, ‘stable growth, positive outlook’;
* 2012 is within sight and might have the outlook downgraded to ‘negative’. This very unpleasant event might result in a rating downgrade within one or, maximum, one and a half years.

 

Why is Moody’s opposing the US so drastically?

Euro-crisis through the eyes of the East

Market Leader informed

The deepening crisis of the common European currency is political rater then economic one. It seems that Western Europe is about to face an epoch of “new” nationalism, but it is not about some hostility.

Everything is commonplace. The European Union has lost its confidence in the future.

Most countries of the world have always considered Europe as some monolith, entity. Now everything has radically changed. The authorities of the EU states have turned from the like-minded into those who defend their own national interests. Previously it was Great Britain that served as the symbol of sovereignty in Europe. Now it can be said about the entire European Union.  The EU governments are desperately trying to gain support at home.

Ireland, the last EU country that got under the pressure of the debt crisis, is in panic, being afraid of losing its independence and get under control of the IMF while Germany is showing its discontent as it has to pay for its spendthrift neighbors.

The so-called peripheral countries are trembling at the thought of Germany becoming the “owner” of the entire EU. Not long ago the EU used to be the guarantor of stability for its members. Now everything has changed. The EU membership causes extra problems for some countries. The EU starts yielding to the East.

Gold, platinum and silver marker overview. What will be the prices?

Market Leader informed

Partially worried about China’s intention to raise the interest rates, the market of gold saw a slight decline on Friday.

However, by the end of the trading day it was very likely that China was not going to change the rates, making the market react with an instant increase.

On Monday it became clear that China had postponed the interest rate increase. The upward tendency continued. Last Friday after the rapid decline some Indian traders started actively buying gold. Judging by the filigree rebound from the support level at 1372,5 on Friday, one may suppose that these were the same buyers.

Besides, the info coincides with the comments given by analysts of precious-metal market in Hong Kong, who mention a strong seasonal growth of the demand for gold shown by China and India. According to Comex, the gold reserves are equal to 11,570 million ounces. It should also be noted that the amount of partial long positions opened by various traders has increased by 9702 contracts. Of course, it is not a mere sign of some strong bullish perspective, but nevertheless, it indicates investors’ long-term preferences.

Crude Oil Market Overview: Will the futures continue its uptrend?

Market Leader informed

At this point there is impulse wave C (C ) developing from $80.24. The price on the WTI crude futures at NYMEX reached one of its target levels at 90.10 -50% of the bearish wave Amn. After that the market reacted to the price resistance with an increase in the wave level. These are the following possible scenarios of the forthcoming price movement:

·         Elongating the wave through “the Hound by Elder/MF” from the reference point ($87.04) followed by the formation of wave A( c);

·         Breaking through the defensive bullish pivot at $87.04, increasing the wave level up to D1-D2 in the form of wave B.

The Department of studying Masterforex-V trading system draws your attention to the fact that the bullish tendency is not over yet. However, the current situation offers partial profit-taking as the market has shown bearish signs around the resistance level, which prompts a possible retracement against the current uptrend.

AUDUSD: what will be its currency rate on Dec 13th?

Market Leader informed

Today, on Dec 13^th, the Australian Dollar declined against the US Dollar. AUDUSD is currently being traded around 0,9844, losing 0,11% on average.

Currency analysts note that the currency pair has already managed to find its support level at 0,9753 which corresponds to Wednesday’s low. It is also clear that the closest resistance level is 0.9897, Friday’s high. In the meantime AUD has gained in value versus EUR but has declined versus JPY. It means that EUR loses its leading positions, giving way to JPY and AUD.

Having lost 0,2% of its value AUDUSD reached 1,3398. AUDJPY reached 82,62 while losing 0,12% on average.

Movement scenarios: markup. H4-H1. AUDUSD. Dec 13^th 2010.

1.Upward scenario

0.9832, support, is critical for this variant of movement. A breakout of it cancels the scenario.

Resistance levels:

Volatility indicator “Saks Channel”: 0.9890 - 0.9965 - 1.0040.

Local highs: 0.9964 - 1.0002. Buy target grid of the basic indicator: 0.9885 - 0.9918 - 0.9971 - 1.0004 - 1.0057.

2.Flat scenario (Flat-zone):

Support level: 0.9832.

Resistance level: 0.9896.

For the flattish movement scenario these levels are critical. If there is flat widening, the levels may see false breakouts. However, the deviation shouldn’t exceed 161.8% - 0.9936. Therefore, in this case the price cannot come out of the buy-zone or sell-zone. The 161.8% support level inside the buy-zone and the 161.8% resistance level inside the sell-zone are critical for this scenario and cancel it once violated.

3.Downward scenario

0.9896, resistance, is critical for this variant of movement. A breakout of it cancels the scenario.

Resistance levels:

Volatility indicator “Saks Channel”: 0.9815 - 0.9740 - 0.9665.

Local lows: 0.9775 - 0.9752 - 0.9739.. Sell target grid of the basic indicator: 0.9816 - 0.9792 - 0.9752 - 0.9728 - 0.9688 - 0.9664.

 

 

 

Provided by the Department of mid-term trading and GTMT, Masterforex-V Academy.

 

 

 

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EURUSD: what will be the currency rate of EURUSD?

Market Leader informed

Today, on Dec 13 2010, currency market experts noticed thatthe common European currency significantly declined versus the US Dollar.

EURUSD is being traded around 1.3191 after losing 0,279% of its value.

Masterforex-V Academy analysts note that the currency pair has probably defined its support. It is located at 1.3166, Thursday’s low. The current resistance is at 1.3323, Thursday’s high.

Besides, EUR has declined a little against JPY and GBP. EURGBP reached 0,8360 after losing 0,11% of its value. EURJPY reached 110,97 (0,07% lost).

Movement scenarios: markup. H4-H1. EURUSD. Dec 13^th 2010.

1.Upward scenario

1.3176, support, is critical for this variant of movement. A breakout of it cancels the scenario.

Resistance levels:

Volatility indicator “Saks Channel”: 1.3268 - 1.3411.

Local high: 1.3442. Buy target grid of the basic indicator: 1.3250-1.3295-1.3268.

2.Flat scenario (Flat-zone):

Support level: 1.3163.

Resistance level: 1.3281.

GBPUSD: what will be its behavior at the forthcoming trading sessions?

Market Leader informed

GBPUSD has recently shown a significant decline.

Currency market analysts note that GBPUSD is being traded at 1,5783 while losing 0,13% on average.

Masterforex-V Academy experts say that the currency pair has probably found its support at 1.5669, which is Wednesday’s low. At this point the closest resistance level is 1.5861 – Friday’s high.

Besides, it should be noted that GBP has consolidated its positions versus EUR and JPY. EURGBP lost 0,14%, having reached 0,8358. GBPJPY gained 0,06% on reaching 132,74.

Movement scenarios: markup. H4-H1. GBPUSD. Dec 12^th 2010.

1.Upward scenario (Pic1)…

1.5755, support, is critical for this variant of movement. A breakout of it cancels the scenario.

Resistance levels:

Volatility indicator “Saks Channel”: 1.5850-15951.

Local high: 1.5861. Buy target grid of the basic indicator: 1.5924 - 1.5954 - 1.6003.

2.Flat scenario (Flat-zone):

Coffee yield will grow. Will it become cheaper?

Market Leader informed

This year analysts expect a record-breaking crop of coffee beans - 139,4 million sacks ( 1 sack = 132 pounds = 60 kilos).

It is 12% more than in 2009. Brazil shows the biggest production growth. It is the world’s biggest exporter of coffee. Brazilian farmers have already gathered 54,7 million sacks, which is a good figure as compared with the last years’ one (44,8 million). Columbia has also gathered a rich crop of 9,6 million sacks (against 8 million in 2009).

Only Indonesia indicates negative dynamics: this year’s crop is 9,4 million sacks against 10 million sacks in 2009. The reason is unfavorable weather conditions. That is why experts are concerned not only about the volume of the Indonesian crop but also about its quality.

Let’s see what benefit we can gain from the info when the coffee futures (KC) is concerned. The daily chart indicates a steady uptrend within the scope of a sloping channel. In early November it got into a range. The following movement will be determined by the direction in which the price comes out of the range, with further settlement above/below its borders. An increase in supply should favor a decline in price. In this case the price may make another effort to reach $198. If the price settles below it may decline down to 184-186$ (variant 1). On the other hand, the price may be influenced by the US policy of quantitative easing, which has already started influencing the global markets through causing an increase in the prices on numerous recourses, including energy carriers and foodstuffs. The futures of coffee may also get into the wave,

Gold and Silver: What Prices Should be Expected in the Medium Term?

Market Leader informed

The gold market is concerned to some degree that the Chinese will raise interest rates during the weekend. It is also reported that Indian buyers of gold that were present yesterday at the Asian and European trading sessions and pushed prices to $1.395 per ounce left the market in the evening. It seems the gold market got no support from the higher opening of the stock markets today unlike in the industrial metals (platinum and copper). There is an opinion that gold prices, at least to some extent, were undermined by news that IAMGOLD might substantially increase gold production in 2011. However, gold hasn’t been very sensitive recently to high and low tides of physical deliveries.

As expected, silver will get a fresh support from news regarding repeated launch of silver coins in the US. There are also rumors that Indian buyers shifted their interest to silver treating it as a cheap alternative to gold. These should have pushed prices up. But it wasn’t the case and silver follows in the footsteps of gold. Nevertheless, if Indian interest really turns to silver this will significantly affect the silver market in general.

Gordon Brown: Is Europe in for a New Spiral of Currency Crisis?

Market Leader informed

In his interview to BBC Business Editor Robert Peston, Great Britain’s former Prime-Minister Gordon Brown forecasted a new wave of crisis of the single European currency in early 2011. He believes that the first couple of months of the coming year promise the Euro a rapid growth till it reaches ‘its ultimate prime’ later to be followed by a substantial decline. This will involve more than simply problems of sovereign debt of Eurozone nations.

 

What are Gordon Brown’s estimates based on?

 

According to former Prime-Minister Gordon Brown, who also served as Great Britain’s Chancellor of the Exchequer for ten years, European banks should:
* get rid of the monstrous amount of debt as soon as possible (it includes loss-making assets and deficit of domestic capital for coverage of expenses);
* develop more structural flexibility as far as the single European currency is concerned.

The European Union: Divorce, Portuguese Style?

Market Leader informed

According to American analysts, troubled countries, including Portugal, Greece, Spain and, recently, Ireland should come to an independent decision to leave the Eurozone. They should do this as soon as possible because, otherwise, there might be a real threat of global crisis around the entire European banking system.

 

The report by one of the leading economists of the American Enterprise Institute, D. Lachman, points out that these countries cannot avoid such measures because currently a default by any EU country will trigger a domino effect at the periphery which may result in disastrous consequences.

 

According to the expert, these countries’ debt has been ‘chronic’ for a long time. It is the life buoy of bailout that stops their economies and the entire European banking system from crumbling down. Nevertheless, as soon as the stream of finance dries out the consequences are absolutely obvious.

 

Drastically restricted by the single currency space, these countries cannot resort to currency devaluation, a natural step in the current situation, as a way to reduce a sizable part of losses. They cannot expand exports, either, as a shock-absorber that cushions negative impact of the spending cut programs.

Experts: Why and How Much Will Food Prices Grow?

Market Leader informed

Based on November figures, the Russian Bureau of Statistics confirms that prices for major foods are growing at a faster pace in the Russian Federation, in particular, potato, cabbage, onion, millet, buckwheat and sugar. Annualized inflation grew by 8% in November with the relevant figure for October being at 7.5%, September - 7%, August – 5.5%. Price growth also affected vegetables and fruits with 4% of growth in November as compared to 1.8% of decline in October. For comparison: foods added five times less percentage-wise in November 2009 that this year.

 

What lies behind this sudden rise in prices?

 

Interesting price statistics in the regional breakdown:
1. Sugar has grown in all regions including by over 10% in 8 regions as Masterforex-V experts suggested in a feature: Why and How Much will Sugar Prices Grow?
* by 22% in Jewish Autonomous Oblast.

What are the perspectives of investing in Australia?

Market Leader informed

Foreign investors show growing interest in Australia, which is quite logical as Australia is a most safe country in terms of investments. The net amount of the deals made by foreign buyers over the period of 2008-2009 is 25 billion Australian dollars. Most investors come from the UK, Hong Kong, Japan. Over the mentioned period of time they purchased 988 dales and 3639 homes.

Thanks to such an increased inflow of the foreign buyers Sydney sees growing demand for fixed property in the Central Business District, western suburbs and areas of the Northern Coast.

According to experts from the Department of studying Masterforex-V trading system , AUDUSD has finished a bearish wave of level D3 (1,0181-0,9536) and is currently developing a bullish correction to it. Having made a rebound from 0,9638, the prices is most likely to continue the downward movement. To start a new uptrend it will have to get over the pivot at 0.9950.

Will Euro bring luck to Estonia? Shocking comparison of Estonia and Ireland.

Market Leader informed

While the economic crisis is rending Europe (Greece, Ireland, Spain, Italy) and the population of these countries blames the common European currency for it, on Jan 1^st 2011 Estonia is to exchange its national currency for Euro. Will it bring luck or misfortune to the new member of the Euro zone? The opinions of the pro-governmental and opposing mass media contradict each other. So, let’s consider the problem and try to find out the answer to the question in order to understand the investment trend in Estonia as well as the impact that the event will have on the Euro currency rate.

Estonia is the most northern Baltic state, the economy of which has shown amazing pace of growth. Later it was called the Estonian economic miracle, members of the Estonian Association of Traders under Masterforex-V Academy explain. The real income of the population was improved and evened up, which became possible due to strong authorities and their reasonable economic policies. In terms of transformation quality, Estonia stands out in the crowd of the other EU newcomers (Romania, Bulgaria, Hungary). Many times the EU authorities sited Poland and Estonia as examples.

Sugar: daily market overview

Market Leader informed

 

Not long ago Cameroon bought 58.000 tons of sugar for domestic consumption.

33.000 tons came from Brazil. Traders didn’t react to the event with an increase in the demand for sugar, which underlines the confidence in sufficient reserves at the market of sugar and the ability of the world’s leading sugar producers to satisfy the demand.

The sugar price has considerably exceeded the local high. Moreover, the volume of the preceding Daily down-bar remains higher than the volume of today’s one.

 

Does the Greek economy recover?

Market Leader informed

Dominique Strauss-Kahn, Managing Director of the International Monetary Fund, says the IMF may extend the term of the Greek debt payments. The decision should be approved by the EU authorities. Dominique Strauss-Kahn is impressed by how many efforts Greece makes to recover its economy. He hopes that by 2012 Greece will have reached positive values. However, according to him, Germany is against extending the term form 3 to 11 years.

Meanwhile, Greece keeps seeing protest actions.

EURUSD is retracing against the bullish wave 1.2968-1.3422. At the Department of studying Masterforex-V trading system they suppose that the price is currently developing wave a (C )/C.

At 11.00GMT Germany is to release its data on Industrial Production

 

 

 

 

The British are losing their savings

Market Leader informed

The UK’s former Prime Minister Gordon Brown has published a book dedicated to the financial crisis. According to him, each Briton lost about £14.000. The total sum is lost is over £800B.

The British citizens were losing their savings mostly due to the price decline in the UK housing market, resulting in investment profit reduction. During the crisis the national economy declined almost by 5% while the sovereign debt increased up to 70% of the GDP. According to the analytic research for 2010, the UK citizens are going to lose £250B more.

In the meantime, GBPUSD is retracing from the achieved highs. According to the Department of studying Masterforex-V trading system , by now GBPUSD has terminated wave C from 1.5510. The newly-formed wave needs a “moment of truth” to define the direction of the forthcoming movement.

Dec 8^th. News (GMT):

11.00 GB - CBI

12.00 US - МВА Index                       

15.30 US - DOE U.S. Crude Oil Inventories

6ECONT and EURUSD: widening flat brings no certainty

Market Leader informed

Over the last few days the market has seen some balanced opposition of the bears and bulls resulting in a widening flat within the 1.3200 – 1.3420 range.

The market sentiments are changeable. On the one hand, the currency pair has managed to consolidate and make some bullish efforts. On the other hand, the bears remind that they have in store a significant potential and are not going to give up in the short run. Moreover, in terms of tech analysis, the long-term chart of the currency pair looks more optimistic for the sellers.

The news factor may influence the market at 11.00GMT (combined news block for the EU and UK) and 15.30GMT (US news releases).

For today’s European trading session the Department of Volume Analysis of Masterforex-V Academy has defined the following trends:

The mid-term trend of EURUSD is consolidation within the given rage

The short-term trend of 6ECONT (EURUSD futures):

Silver: what will be the future prices on the precious metal?

Market Leader informed

As soon as on Monday silver exceeded $30 per ounce for the first time since 1980, traders and analysts started questioning the bullish tendency.

Silver and gold have been popular with investors as safe assents under the long-lasting crisis in the Euro zone and the perspectives of the Fed Reserve’s further quantitative easing. Moreover silver is also popular with investors because it is used in industrial production.

Despite the fact that gold has recently reached its record-breaking price level, which is $1430 per ounce, silver has “defeated” gold in terms of profitability, i.e. $100 of investments will bring $180 (+80%) for silver and $130 (+30%) for gold.

The future mid-term movement of silver may be affected by the following factors:

·         The reduction of silver reserves, increased market interest, the Fed Reserve’s policies and the Euro zone crisis speak in favor of its uptrend. In 2011 silver is expected to be in deficit as the global economy is expected to continue recovering, which means that the demand for silver will be strong.

·         The production of silver has been reduced over the last few years as numerous industries have shown little demand for it lately. So the prices are conditioned by investment demand, not by industrial one, which definitely doesn’t favor the uptrend of silver.

Irish crisis – step by step

Market Leader informed

 

Finally it happened. After resisting for sometime Ireland eventually decided to compromise and accept the financial aid from the European Union to the sum of dozens of billions (EUR) to support its banking system.

The world community breathed with relief.

The Irish prime minister’s speech at the end of the last week was met with general approval as until the last minute the Irish authorities had been trying to convince everybody that they didn’t need any external help.

It is quite explainable because over the last 10 years the Irish economy has been a role model in terms of how to build the economy in the EU countries. Yet, they do not want to “come back to earth”. The fact that the financially stable country suddenly went broke certainly needs considering as the situation is really critical.

One of the reasons for it was the rapid decline in the housing market, which undermined the banking system making numerous Irish banks fall into the debt abyss. The government allocated 50B euro to help the banking system, which led to the budget deficit growth.

Taking into account Ireland’s reputation and the service it rendered to the EU in terms of forming a favorable image, numerous analysts  are inclined to consider Ireland to be the main threat to Euro.

Irish crisis – step by step

Market Leader informed

 

Finally it happened. After resisting for sometime Ireland eventually decided to compromise and accept the financial aid from the European Union to the sum of dozens of billions (EUR) to support its banking system.

The world community breathed with relief.

The Irish prime minister’s speech at the end of the last week was met with general approval as until the last minute the Irish authorities had been trying to convince everybody that they didn’t need any external help.

It is quite explainable because over the last 10 years the Irish economy has been a role model in terms of how to build the economy in the EU countries. Yet, they do not want to “come back to earth”. The fact that the financially stable country suddenly went broke certainly needs considering as the situation is really critical.

One of the reasons for it was the rapid decline in the housing market, which undermined the banking system making numerous Irish banks fall into the debt abyss. The government allocated 50B euro to help the banking system, which led to the budget deficit growth.

Taking into account Ireland’s reputation and the service it rendered to the EU in terms of forming a favorable image, numerous analysts  are inclined to consider Ireland to be the main threat to Euro.

Fed Reserve to announce receivers of $3.3B financial aid

Market Leader informed

On the order of the US Congress the Fed reserve is to announce the receivers of financial aid to the sum of $3.3B. The legislators urged the Fed Res publish the info after it adopted the financial-aid plan, which reduced the size of the 700B governmental program of supporting risky assets.

So, the info should be published at the Fed Res internet site at noon as provided by the Dodd-Frank Act. The report mentions 6 programs of lending through implementing currency swaps with other central banks and trough obtaining mortgage bonds and investing in Bear Stearns and American International Group.

The data say the Fed Res supports Bank of America and General Electric as previously the collapse of Lehman Brothers became the reason for a considerable increase in spending connected with lending to individuals.

Such actions are expected to intensify the criticism against the US central bank’s actions, especially if to take into account the reaction to the decision made by it on Nov 3^rd 2010 about pouring $600B into the national economy. The Republicans opposed the decision saying such measures might end up with inflation growth and unjustified increase in the value of numerous assets.

Howard Friend, chief economist for MigBank, says that all these attacks are aimed at making political capital. Yet the political criticism is not expressed through deeds while any decision made by the Federal Reserve is always discussed very actively.

Experts of the Department of studying Masterforex-V trading system made their forecast on the further movement of the USD index in the article called “Europe isn’t satisfied with the US monetary policy. What will be the USD currency rate?”

Crude Oil: what will be the price on “black gold”?

Market Leader informed

The news releases reporting that the debt crisis in the EU will be solved have a positive impact on crude oil prices.

Despite that, comments made by the People’s Bank of China on the monetary policies aimed at reducing the inflation, may significantly lower the demand for oil, which will affect its price.

On Wednesday the published reports on crude oil inventories had almost no impact on the market as this week’s inventories has been the biggest since 1987, which testifies to strong bullish sentiments.

The technical analysis of the crude oil chart also indicates the bullish sentiments however the significant growth of the last few days cannot prove that there will be any upswing today. That is why we expect the price to move sideways within the 86-87.5 range.

What impact do economic data from USA and China have on metal markets?

Market Leader informed

Strong economic data from the US and China provided the markets of industrial metals with solid support yesterday.

Today, after the 3 days of growth, the market of metals will probably stay flat waiting for tomorrow’s monthly unemployment rate.

This week gold has been supported by positive economic data and uncertainty at currency markets. The closest resistance level at the market of gold is 1400 while the support is located in the 1365-1375 area.

 

Market overview and trading recommendations in case New Year rally takes place

Market Leader informed

Last week markets were neutral. On Thursday and Friday there the US celebrated Thanksgiving Day, so the stock market volume was low.

The last week was also noticeable for the worsening of the sovereign ratings in Europe. The treasury-bond yield of Spain, Portugal and Ireland exceeded the levels of the corporate emitters of the CIS states. For example, the current interest rate for 10-year treasury bonds is 9% in EUR. Such yields are unlikely to be offered even by the local banks.

One more negative cause was the situation around the inter-Korean conflict.

Out of some positive “drivers” we can single out the data on the initial jobless claims which came out better than expected. The latest value is 407.000, which is the minimal level over the last 2 years in terms of average estimation.

Swiss economy is out of danger

Market Leader informed

Switzerland can sleep soundly despite the fact that most of its neighbors are concerned about the existing sovereign debts. The Economiesuisse (a Swiss corporate union) and the Chamber-of-Commerce representative of a Neuchâtel canton report that nothing threatens the Swiss economy due to the sound fiscal competition, which raises disputes in the parliaments of numerous cantons and is criticized by socialists.

The main conclusion made at the meeting of the Economiesuisse and the Chamber of Commerce is that preserving the sovereignty of cantons in terms of tax policies will lead to prosperity in the future.

In the meantime at Forex USDCHF continues its uptrend in the form of wave C on D1 within the framework of retracement against the bearish wave of Monthly level (1.1730-0.9461).

Experts from the department of studying Masterforex-V trading system suppose that the bullish movement of the currency pair will hold true until the price gets over the defensive MF pivot at 0.9848 and comes out of the MF sloping channel, which will terminate the bullish wave started at 0.9554 while the price will start forming a new MF reference point.

The next important resistance level will be 1.0089