Will the World get back to the Gold Standard?

Market Leader informed

Not long ago the Financial Times published an article by Robert Bruce Zoellick, President of the World Bank, who gave his voice for getting back to the Gold Standard.

It is not the first time we have heard such statements. However, there is a reasonable question of how it can be done if gold is not enough to secure the entire global financial system. Yet, it was the lack of gold that was the main reason for canceling the Gold Standard.

Numerous experts share the same opinion that over the mid and long term gold will continue gaining in value. So in the short run we may witness $1500 per troy ounce. There are even more brave forecasts. For example, some COMEX investors expect gold to have reached $2000 per ounce by November 2010.

In the meantime, the gold price has already come out of the MF sloping channel, terminated a Weekly wave (1156,7-1429,8) and made a correction to 38%. At the moment gold is retracing against last week’s downtrend. If the high is broken through, gold will regain its mid/long-term uptrend. If the price gets over the MF pivot at 1341.0 and resistance at 1339.5 (last week’s low) there will be a D1 FZR* testifying to the continuation of the downward tendency.

Resistance levels:

What are the perspectives of S&P500 futures?

 

 

 

 

 

 

 

Last week’s support and resistance levels of S&P500 futures 1197.50 and 1177.00 remain the key levels to decide this week’s mid-term tendency.

Is strong Dollar contra-indicated for USA?

Market Leader informed

North American business circles believe that the strong US dollar won’t do the US any good.

That is why they started lobbying the weakening of the national currency. It should help the American exports and support the producers.

After previously losing its ground to meet those needs, the USD index has finally made an upward H8 FZR* and formed bullish wave a (C )/C of level H4, which indicates the strengthening of the US dollar, experts from the Department of studying Masterforex-V trading system say.

If it is shortened wave C, then there will be a sharp reversal for bearish wave a(C )/C of level H8, with further perspective for C of D1. Such a scenario will take place if there is a breakout of the bullish MF pivot (1.6900) and bullish the MF sloping channel. Otherwise the uptrend of the USD index will hold true.

What is in store for Euro zone?

Market Leader informed

The Euro zone is in difficult situation at the moment. The economic crisis leads to political disputes and social unrest. Germany is trying to strengthen its status in Europe while setting its own economic policy rules for others in exchange for a chance of receiving a loan at a low interest rate.

Europe is getting helpless and vulnerable to new shocks. It may lead to the situation when the EU will preserve its integrity only on condition that the participants will take their political interest in it.

However, according to some analysts, if the real economic situation will be taken into account a transition to new (or old) money will be a beneficial solution rather than a curse.

According to the EURUSD chart at Forex it is too early to speak about the reversal of the uptrend.

At the Department of studying Masterforex-V trading system they think that after coming out of the MF sloping channel (based on 1.1875 and 1.2587) the price will form only the 1^st wave for the full-grown downward FZR*. The downward movement stopped at 38.2% of the retracement against the bullish wave 1.1875-1.4282. Currently, the price is developing wave a(C )/C from 1.3785. The weakening of EURUSD will be stopped if the there is a breakout of the MF pivot at 1.3597 with coming out of the MF sloping channel. If the mentioned obstacles are overcome the price will start forming either upward wave A or a correction to the entire bearish wave started at 1.4282.

 

Great Britain to allocate credit for Ireland

Market Leader informed

Great Britain has answered to Ireland’s official request for financial aid to support its banking system.

The exact sum allocated by London is not specified. George Osborne has only said that it is estimated at billions of euro. The UK government’s willingness to help Ireland raises concerns. However, George Osborne assures that the UK will benefit from the recovery of the Irish economy as the banking systems of the two neighboring countries are closely connected and 5% of British products are exported to Ireland.

The British Pound keeps on losing its ground at Forex.

Experts from the Department of studying Masterforex-V trading system report that GBPUSD is currently being traded within the scope of wave a(C )/C  of level H8, which will be terminated in the short run. The correction in the form of subwave b (C ) shouldn’t get over the defensive bearish MF pivot or/and come out of the MF sloping channel. Otherwise GBPUSD will get into D1 flat.

News for Nov 24^th 2010 (GMT):

09:30     GBR - Gross Domestic Product (GDP) Revised

09:30     GBR - Services Activity Index

13:30     USA - Jobless claims, Private Income, Durable Goods Orders, Consumer Spending,      

14:55     USA - Michigan Consumer Sentiment Index

15:00     USA - New Home Sales, FHFA Home Price Index, Crude Oil Inventories

What impact does Irish crisis have on Euro?

Market Leader informed

On Monday EURUSD opened the trading week with a gap against the background of the EU providing Ireland with financial aid.

Ireland’s official request for help made Euro gain in value against US dollar. However, the debt problems of Portugal and Spain made investors get rid of the Euro currency, making the EURUSD rate decline.

Another event pressing Euro is the proposal introduced by Green Party (Ireland) to hold general election in January, which has underlined political uncertainty in Ireland. Moreover, Moody’s service has recently announced a possible decline in Ireland’s sovereign rating AA2, which is currently being reconsidered. Moody’s experts say that the financial aid will increase the debt load, worsening Ireland’s credit rating.

After such announcements Euro failed to stand its ground and started a downtrend.

According to experts from the Department of studying Masterforex-V trading system , EURUSD retains the possibility of a further decline within the scope of wave C of level D1. Getting over the MF pivot at 1.3630 will indicate the alternative scenario (wave C on H4).

Today’s news may introduce changes:

09.00GMT - Eurozone news

09.30GMT - BBA Mortgage Approvals (GB)

16:30GMT - GDP revised and Prelim GDP Price Index (USA)

Levels of support and resistance:

* 1.4281 АD3 BASE

* 1.4184 88,2% D3

* 1.4085 76.4% D3

* 1.3963 61,8% D3

* 1.3865 50% D3

6ECONT and EURUSD come down to earth

Market Leader informed

Yesterday the common European currency formed a strong downward impulse against USD, passing over 250tps and making a new local low at 1.3530. EURUSD is currently being traded around the 1.3530 area.

Most investors are concerned about Ireland’s problems and feel negative about EUR. However, there is another concern: they say there is a chance of China toughening its monetary policies. Analysts report that the bearish sentiments are currently prevailing at the market. They suppose that last week’s growth was correctional.

Today’s news releases can have a significant impact on the market. At 9.00GMT the EU is releasing its major economic data while at 9.30GMT GB is to publish its GDP value. The US news block is expected to come out from 13.30 till 15.30GMT, including Existing Home Sales.

The Department of Volume Analysis of Masterforex-V Academy has defined for today’s European session:

The mid-term dynamics has the form of consolidation within a wide-range flat.

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

The reaction of the price to 1.3600 (the volume of the current week – over 16.000 lots) may become today’s key moment. Another test with an upward breakout will indicate growth. A downward impulse with settlement below the level will prompt bearish sentiments.

Ireland to receive financial aid

Market Leader informed

Ireland is getting ready to receive anti-crisis financial aid to the sum of 90B euro.

However everything is not as simple as it may seem: in order to get the financial aid the country will have to accept the austerity plan. That is the decision made at the video conference of all the EU finance ministers. All of them are members of the ECOFIN Council. 16 ministers representing the Eurozone states make up the Euro Group.

According to the final declaration of the ECOFIN and the Euro Group, only 3 financial sources will be used to make up the financial aid package: the funds will be provided by the IMF, the EU and the Eurozone.

But in order to receive the money Ireland will have to develop and implement an austerity plan aimed at recovering the national economy. The ECOFIN and the Euro Group claim that the budget consolidation program should be conformed to the Irish authorities and the ECB.

*A series of changes in the Irish tax code will serve as basis of the program. Dublin has only one week to work out the plan of radical changes and present it to the corresponding institutions. The program is expected to hold true within the next 4 years. The aim is to reduce the budget deficit by 2014 - by 3% of the GDP on average – according to the Stability and Growth Pact (SGP). As for putting it into practice, Ireland should reduce its budget deficit from 50B down to 5B euro within the allocated time.

*The IMF will take part in providing Ireland with financial support, Managing Director of the IMF Dominique Strauss-Kahn says. According to him, the IMF is ready to help Ireland, including long-term lending.

How to profit from New Year rally?

Market Leader informed

Within the next month and a half mass media will be offering an investment idea – New Year rally…

Some people think that it’s time to purchase all shares indiscriminately. Others believe it’s a dirty trick as “market sharks” will use the rally to make money. Nevertheless, the rally does take place!

While risking your assets do not rely on groundless statements. One should always keep in mind that investment is a kind of business, where he/she has to compete with “sharks” in order to gain profit.

Let’s find out what is the most effective way to take advantage of this market regularity.

The analysis is based on MMVB Index (2000-2010) without taking into account the crisis period with abnormal volatility.

Diagram 1. Average quarterly gain of the index

Will the World get back to the Gold Standard?

Market Leader informed

Not long ago the Financial Times published an article by Robert Bruce Zoellick, President of the World Bank, who gave his voice for getting back to the Gold Standard.

It is not the first time we have heard such statements. However, there is a reasonable question of how it can be done if gold is not enough to secure the entire global financial system. Yet, it was the lack of gold that was the main reason for canceling the Gold Standard.

Numerous experts share the same opinion that over the mid and long term gold will continue gaining in value. So in the short run we may witness $1500 per troy ounce. There are even more brave forecasts. For example, some COMEX investors expect gold to have reached $2000 per ounce by November 2010.

In the meantime, the gold price has already come out of the MF sloping channel, terminated a Weekly wave (1156,7-1429,8) and made a correction to 38%. At the moment gold is retracing against last week’s downtrend. If the high is broken through, gold will regain its mid/long-term uptrend. If the price gets over the MF pivot at 1341.0 and resistance at 1339.5 (last week’s low) there will be a D1 FZR* testifying to the continuation of the downward tendency.

 

EU to provide Ireland with financial aid. Will it rescue Euro?

Market Leader informed

On Sunday the Irish government held an emergency session where they decided to ask the EU and the IMF for financial aid.

However, to get the aid the Irish government will have to develop measures to reduce the budgetary spending.

The EUR currency rate at Forex indicates bullish sentiments. According to the Department of studying Masterofrex-V TS, the price has already formed wave a(C )/shortened C. If there is a breakout of the MF pivot at 1.3662 with coming out of the MF sloping channel the wave started at 1.3446 will be terminated. Otherwise EURUSD will continue its upward movement through wave c(C ).

News (GMT):

13:30     US - Chicago Fed Nat Activity Index

15:00     EU - EC Flash Consumer Sentiment

16:00     EU - ECB President Jean-Claude Trichet Delivers Annual Report

19:30     US - Federal Reserve Bank of Minneapolis President Kocherlakota speaks to the Sioux Falls Rotary Club

Consumer prices to grow in Japan

Market Leader informed

The Japanese Ministry of Economy has planned to resume the growth of consumer prices.

The max term for implementing the plan is the end of 2011, Banri Kaieda says. According to him, the first step is to change the falling prices for positive dynamics. The Bank of Japan has supported the government’s decision, however the starting date is not specified.

What is going on with the JPY currency rate at Forex?

Experts from the Department of studying Masterofrex-V trading system, USDJPY is currently moving within the scope of wave c(C ) of level H8. It has already reached $83.77, which coincides with the match of impulse and correction Fibo-grids. That is where the bullish movement has paused. The next significant level of resistance may be $85.87, the location of the defensive bearish MF pivot and 38.2% of the correction grid. If the price goes up, the closest support will be provided by the MF sloping channel and MF pivot.

 

 

 

 

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What serves as an extra stimulus for the British economy?

Market Leader informed

According to retail researchers Verdict, the marriage of Prince William to Kate Middleton is expected to bring almost a billion-dollar boost to the national economy.

Experts suppose that the profit will be gained mainly by travel agencies and companies offering other services. They estimated that the sales of wedding-related products could bring in 26 million pounds while the engagement could be worth 12-18 million pounds in merchandise sales. The official wedding ceremony is to be held in spring-summer 2011.

In the meantime, at Forex the British Pound currency rate has already completed a bullish wave of level H4 after breaking through the defensive bullish MF pivot.

Experts from the Department of studying Masterforex-V trading system report that GBPUSD is currently moving within the scope of an H4 retracement, which will hold true until the MF pivot at 1.5888 stays untouched. Otherwise the downtrend will regain its strength in the form of wave c (C ) of level H4.

6ECONT and EURUSD show confident growth

Market Leader informed

Over the last few days the common European currency has developed stable upward dynamics, constantly updating local highs, the last of which was 1.3770. Currently the price is testing the high.

The US dollar has lost its ground a little versus all other currencies. Probably one of the reasons for it was the news that Ireland had eventually asked for help.

According to the EU finance ministers, the financial aid will be allocated from a special fund. There is a possibility of restructuring the Irish financial industry as they expect Ireland to release its plan to reduce its budgetary spending.

The only significant news release for today is ECB President Jean-Claude Trichet’s annual report at 16.00GMT.

The Department of Volume Analysis, Masterforex-V Academy, has defined for the Euro session:

The mid-term dynamics is upward

The short-term dynamics of 6ECONT (EURUSD):

In terms of volumes, the market reaction to 1.3775 will be important as currently the market is forming the Euro session’s maximal volume cluster (over 700 lots already) around the given level. An upswing from the level will prove that the bullish tendency is still strong. On falling and settling below the level the price may start retracing further down.

 

 

 

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Where Will Increased Inflation Take the Pound Sterling?

Market Leader informed

The quarterly report of the Bank of England on inflation became last week’s key event.
Last year the pound’s first response to the BoE November report was a fall, this year, high inflation rates registered at 3.1% made the British currency stronger.
The Bank of England diplomatically evaded any forecasts in terms of when and how much inflation would be decreased and suggested that it would be facilitated by a sales tax and lower import prices. It was also stated, however, that the Bank was prepared to react to any scenario. 

 

Only a month ago Mervin King, Governor of the Bank of England, said it was necessary to consider the issue of the next stage of quantitative easing as the British economy is suffering from lack of money which affects economic growth rates and slows down reduction of the inflation.