GBPUSD stays flat while waiting for economic news

Market Leader informed

The British Pound met November in a flat range.

At the moment GBPUSD keeps ignoring the positive tendencies shown by the numerous economic sectors. Even British Petroleum has recently reported profits in the 3^rd quarter after suffering heavy losses connected with the oil spill in the Gulf of Mexico.

By now the price has succeeded in partially recovering from yesterday’s decline after the news (the recovery is over 50%).

As a result GBPUSD widened the flat range. Numerous investors and traders are not in a hurry to enter the market as they are waiting for today’s news on USD.

News for Nov 3^rd 2010 (GMT):

09:30     GBR - PMI Services

12:15     USA - ADP Employment Change

14:00     USA - ISM Non-Manufacturing Composite, Factory orders

14:30     USA - Crude Oil Inventories

18:15     USA - Federal Open Market Committee Rate Decision

Global crisis: what debts will developed countries have?

Market Leader informed

The number of problems in the modern world is getting bigger while the number of the ways to solve them is declining. The pension problem is becoming more pressing. Scientists around the world are concerned about the reduction of the able-bodied population. It is not a secret that many countries have huge public debts. That is why austerity measures, including the reduction of financing a range of social programs, are seen as a solution.

Last week one of the popular info agencies released the results of survey, according to which by 2050 the public debts of the majority of the developed countries will reach 300% of the national GDP. According to the similar forecast for this year, the figure is 60% of the GDP.
The United Nations report that in 30-40 years the total number of those who are older than 65 years will double, reaching 1 billion people. If there are no active steps towards reconsidering the budgets, including the introduction of pension and health-care reforms, the sovereign debts of the developed counties will hit their economies with another severe crisis.

Of course, at this point the developed countries’ safety factor is fairly high in terms of pension and social maintenance, but the demographic situation there is seriously deteriorating.

The forecast for the US isn’t much better. According to the modest estimations, the public debt is expected to reach 415% of the GDP by 2050. The Japan is expected to experience even a harder strike: its sovereign debt is expected to reach 750%. The developing countries will have to face the same problem. However the problem there is not expected to be so severe.

Wall Street: problems again?

Market Leader informed

People have already started to gradually forget about the crisis.

US banks are showing stability, the rivalry is getting weaker. However, according to the reports of some broking agencies, the situation is not as favorable as it seems to be.

All that semblance of stability is made at the expense of the funds allocated for bad debts. The Wall Street is still working professionally, however it cannot influence all the changes. There are even suppositions: “The things, which are bad for the Wall Street, are good for the entire economy”. The US has created a “soap bubble of prosperity” while the Wall Street has to pay for it.

The financial sector is still showing poor results. However bonus payments keep rising, practically breaking their previous record. Experts assume that the bonuses are growing faster than the incomes.

All that has led to the loss of the investors’ confidence in the Wall Street because they do not want to see “soap bubbles” as when the situation is really stable the brokers and banks earn less.

 

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6ECONT and EURUSD: rather up than down

Market Leader informed

Over the last few days the common European currency has made a consolidation effort, updating the local high at 1.4010. Today’s trading session may indicate whether the indefinite movement will turn into a flattish pattern within the 1.3878 – 1.3920 range or EURUSD will manage to conquer new heights, forming a solid bullish impulse.

This week’s market movements can be influenced by FOMC meeting minutes, which are to be released on Nov 3rd at 19.15GMT.
Most analysts consider the current condition of USD as rather weak. That is why in the short run we may witness the consolidation of the US Dollar against other major currencies. The investors’ attention is focused on how often and in what volume the Fed Reserve is going to implement the measures of “quantitative weakening”.

Today’s news impact on the market is minimal as the macroeconomic data are expected to come out only for GB at 09.30GMT.

For Nov 2nd 2010 the Department of Volume Analysis of Masterforex-V Academy has determined:
The mid-term trend of EURUSD
The short-term trend of 6ECONT (EURUSD):
The key moment will be the market reaction to 1.3920, which is a significant level of the contract with 52.000 lots of trading volume. If EUR succeeds in settling above the level and turning it into support, there will be a solid base for an uptrend. Otherwise the price may continue developing the flattish pattern.

Greek police detains 2 suspects carrying a parcel bomb for Nicolas Sarkozy

Market Leader informed

According to Reuters, on Monday Greek police intercepted a parcel bomb addressed to the French president. Earlier that day another package had exploded at a courier company in Athens, injuring an employee. 2 suspects were detained later, however the police didn’t find out if there were any ties with al-Qaeda.

In the meantime, EURUSD keeps moving within the 1,37-1,4079 range.

There is a retracement currently being formed against yesterday’s completed bullish wave. By now the price has terminated bearish wave A H1. On forming downward wave a(c )/C the price will start developing a FZR* of the same wave level.
The Department of studying Masterforex-V trading system supposes that today EURUSD will keep staying within the same range (1,37-1,4079). The enquiry is that the market participants are waiting for tomorrow’s significant news releases, which may decide the future of USD. It is very likely that until the news release on the Fed Reserve interest rate decision the Forex traders will be cautious.

“Golden days” continue… What should investors do?

Market Leader informed

Gold keeps restlessly growing in price, conquering one historical high after another. The situation for investors is rather difficult: to buy, to sell or to maintain?

Let’s find out what makes gold behave in such a way! According to some experts, the reasons for the “rise” of gold are in the following:
• growing money supply
• unstable economy
• formation of international reserves

Inflation processes connected with USD make gold prices rise. According to the latest data, the US Federal Reserve will buy back its liabilities in the volume which is twice as low as it was previously announced. Consequently the volume of the unsecured money supply will rise up to almost $500 million. The logical conclusion is that in the short run the factor is going to push the gold price further up.
As far as the unstable economy is concerned, only this summer politicians started saying that national economies survived the crisis. But nobody can guarantee stable economic growth in the sort-term perspective. The forecasts are unspecific as those who make them are carful. So it can be definitely concluded that this issue will also promote an further increase in the price on the precious metal in a fairly long-term perspective.

InstaForex: it is time for price retracement!

Market Leader informed

Wave analysis: Friday’s minimum is most likely to be the end of wave C. Yet, the whole structure resembles the horizontal triangular pattern, consequently now we can witness the 4th wave of the pattern – d. If the assumption is right then the current wave objectives are in the 1.4000 area, followed by a reversal for the downward 5th wave – e, with the closest objective around 1.3800.

Tech analysis indicates that the bullish retracement within the framework of working out the “sell” signal has already been terminated as the market will face another wave of the downtrend with the closest objective at 1.3750. That is why it would be logical to assume that wave d is finished and there will be some downtrend.

Fundamental analysis: this time there is little info to analyze. The US makes efforts to stimulate its national currency. On the other hand, Japan may seriously interfere with the market in the short run, waiting for info on the volume of the assets bought by the Fed Reserve. That is why now it is too difficult to make any forecasts basing on the results of the fundamental analysis. Consequently, we should currently rely only on the mentioned tech and wave analysis.

EURUSD: is the “Euro marathon” over?

Market Leader informed

Yesterday the Greeks were celebrating the 2500th anniversary of the Battle of Marathon.
The Battle of Marathon took place in 490 BC during the first Persian invasion of Greece. It was fought between the citizens of Athens, aided by Plataea, and a Persian force commanded by Datis and Artaphernes (taken from Wikipedia). The Greeks managed to gain a victory over the Persians. A messenger was sent to Athens. He ran 42km 195m, announced the news and fell dead. In his memory an marathon race is held every year, the participants of which follow the route of the famous messenger warrior.

In the meantime, by the beginning of this trading week EURUSD has formed an upward H3 FZR*.

The Department of studying Masterforex-V trading system supposes that on getting close to 1.4080 there will be a retracement against the downward H4 wave. If the level is overcome the price will form an H8 FZR.
For the downward scenario the key levels are: an H4 FZR (1.3734) – the start of subwave c (C ) of level H8 with further getting over the current mid-term low at 1.3697 will prompt the continuation of the retracement against the wave C of level D2.

News for Nov 1st (GMT):

08:55 GER - Purchasing Manager Index Manufacturing
09:00 EU - Purchasing Manager Index Manufacturing
12:30 GB - Purchasing Manager Index Manufacturing
12:30 USA - Personal Income, Personal Spending, Personal Consumption Expenditure Deflator
14:00 USA - ISM Manufacturing, Construction Spending

David Cameron gains further support

Market Leader informed

Last Thursday there was the EU summit held in Brussels, where David Cameron prevented the EU budget costs from growing 5.9%.
His decision was supported by France and Germany. According to Cameron, it is unacceptable to increase the expenses of the EU budget while the UK government has decided to implement the austerity measures.
Against such a background GBPUSD is showing steady growth.

Experts from the Department of studying Masterforex-V trading system report that at the moment the price of GBPUSD is moving inside wave c (C ) of level H4, which will provide further support for the uptrend until the defensive MF pivot and MF Sloping Channel are broken through.

Today’s news (GMT):

09:30 GBR - PMI Manufacturing
12:30 USA - Personal Spending, Personal Income
14:00 USA - ISM Manufacturing, Construction Spending

Speaking about Great Britain’s strategic lines of development

Market Leader informed

In October one of the British citizens was lucky enough to win the “Euro million” lottery jackpot to the sum of 129 million euro. Now he is able to solve all his financial problems, which cannot be said about Great Britain as a whole.
The British government can only boast its 2nd strategic overview. The authors had a difficult task – to formulate the country’s development strategy while the government is trying to reduce the budget deficit.
The 3 main parts of the document explain the place of GB in the modern world and the most “harmonious” ways of surviving crises. The existing threats to the national security are also mentioned there.

The national strategy is:
• To consolidate GB’ ties with the fast-developing countries that are gradually becoming more significant in the international arena, including China, India, Russia and Brazil.
• To reduce the military costs by 7-8%, down to 1.7% of the national GDP, which is lower than the NATO standards (2%). According to the BBC, this will make other EU members of NATO reduce their military costs as well.

Besides, London has decided to change its priorities. Within the next 2 months the British parliament will be introduced with a bill implying the principle of sovereignty in the EU system of law and changing the order established by the European Communities Act 1972 (an Act of the Parliament of the United Kingdom providing for the incorporation of European Community law into the domestic law of the United Kingdom – Wikipedia), which will make it possible to cancel any decision within the framework of the EU’s common system of law.
London still can boast Moody’s highest credit rating with stable forecasts. However the risk of a decline in the rating may increase if the government fails to consolidate the budget and if the treasury-bond yield rises or there is another wave of the debt crisis.
The UK real estate market keeps showing the negative tendency. Over the last 12 months the prices has fallen 12.4%. The amount of the new homes for sale in September is the lowest in 6 months (26.000). The average price has decreased down to the level of January 2006. The only positive indicator is housing affordability, which has declined down to the minimal level registered in Feb 2004.

Tech analysis of GBPUSD rate.