Mastering the Currency Market: Forex Strategies for High and Low Volatility Markets

Make Volatility and Risk Work for You with Forex Trading!

“This book should be in every trader/investor’s library. As we come out of this depressed market . . . this book can be your companion, helping you avoid mistakes and enhance your trading/investment program.”
—Bill M. Williams, author of Trading Chaos

“Whether you’re just getting started trading the world’s most exciting financial market, or you’re looking to add to your trading edge, [the authors] have written an engaging book packed with powerful techniques that you can use right now.”
—Rob Booker, trader, author, educator, and founder and host of TraderRadio.net

The foreign exchange market is the largest trading market in the world, with average daily volume well into the trillions. Because the market is always characterized by high liquidity, forex traders benefit most from volatile markets—making it the ideal investment approach today and well into the future.

Mastering the Currency Market is a comprehensive guide to currency and futures trading strategies and techniques for both highly volatile and nonvolatile markets.

Putting to work their vast and highly diverse experience in forex trading, the authors explain how to take advantage of the many benefits of foreign exchange trading, including its low cost of entry afforded by margin, and the dynamic pricing by nature of the competitive marketplace. Mastering the Currency Market is divided into five sections covering:

• The basics of trading currencies
• Fundamental analysis of price valuation
• Technical analysis and trading charts
• Trading philosophy and psychological discipline
• Volatility and risk management

With four decades of combined experience, the authors clearly communicate to you a trading method that will give you the confidence to both analyze markets and execute trades successfully, regardless of underlying market conditions.

As 2008 introduced nightmare scenarios for investors around the world, it was Al Gaskill’s most productive period of his trading career. He used the same trading methods spelled out in this book.

Apply the lessons inside and you’ll see profits rise during periods of high market volatility, and when the market slows down, you can downshift to countertrending methods. It’s a win-win investing method, and Mastering the Currency Market leads you through it every step of the way.

Price: $34.95

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Foreign Exchange Market Commentary

EUR/USD closed lower due to profit taking on Monday as it consolidates some of the rally off February's low. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI remain neutral to bullish signalling that sideways to higher prices are possible near-term. If it extends the rally off January's low, the 87% retracement level of the November-January decline crossing is the next upside target. Closes below the 20-day moving average crossing would confirm that a short-term top has been posted.

USD/JPY closed slightly lower due to short covering on Monday as it consolidates some of last Thursday's rally. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI have turned bullish hinting that a short-term might be in or is near. Closes above the 20-day moving average crossing would confirm that a short-term bottom has been posted. If it renews the decline off February's high, February's low crossing is the next downside target.

GBP/USD closed lower due to profit taking on Monday and the low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are turning neutral to bearish hinting that a short-term top might be in or is near. Closes below the reaction low crossing are needed to confirm that a short-term top has been posted. If it extends the rally off December's low, weekly resistance crossing is the next upside target.

USD/CHF posted an inside day with a higher close on Monday as it consolidates some of this winter's decline. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI remain neutral to bearish signalling that sideways to lower prices are possible near-term. If it extends the aforementioned decline, downside targets will now be hard to project now that it has declined into uncharted territory. Closes above the 20-day moving average crossing would confirm that a short-term bottom has been posted.

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Market Morning Briefing

EQUITIES

The Dow (12090.03, -79.85, -0.66%) came off a decent bit yesterday and is coming close to testing important Support at 12000. If this holds, we would still target 12500-700 in the medium term.

Asian indices are flat/ mixed, ranging between -0.28% (New Zealand) and +0.98% (Korea), possibly waiting for clues from the USA (as to whether the 12000 Support will hold or not) and from the Middle East, where Crude has cooled off a wee bit.

The Sensex (18222.67) and Nifty (5463.15) might get bought on dips today as Crude is slightly lower and there are some chances of the Congress-DMK shaking hands again.

COMMODITIES

Crude (105.14) surged yesterday to a high of 106.95 and eased following a report from BBC that the Libyan leader might leave the country. Technically the charts are still looking strong with room for further rise to 110-112 in the coming days/weeks. Support is seen in 100-98 region.

Gold (1432) tested its crucial 1445-1450 Resistance reigon and has come off from there slightly. As mentioned yesterday, 1445-50 is a very important Resistance region to watch and a break above it might take it further up towards 1475-1500. While 1450 holds, there is a chance of a fall to 1400-1370 once again. But it is too early to take a call on this and we will have to wait and see.

Silver (35.72) has come off sharply from yesterday's high of 36.75. However, the Support at 35.50 is still holding and while above 35.50 the outlook remains bullish for further rise to 37+ levels.

Copper (4.32) has failed to see a strong rise past 4.50 and has fallen sharply. With this sharp fall yesterday, Head and Shoulder pattern formation seen on the charts. A strong break below 4.25-20 region would confirm this. TO see the Head and Shoulder pattern on the Copper chart click on the following link:
http://www.kshitij.com/graphgallery/coppercandle.shtml#candle

CURRENCIES

Slight recovery in the Dollar Index (76.52) from yesterday's low near 76.12, further rise possible. Sterling Pound (1.6196) has been the biggest loser, coming off from a high near 1.6341 on news that Feb Retail Sales did not do as well as Jan. Supports may be there in 1.6150-00 region.

The Euro (1.3980) trades slightly lower compared to yesterday's high near 1.4036 and Dollar-Yen (82.28) has come up from yesterday's low of 81.95. Dollar-Swiss is steady near 0.9268 while the Aussie (1.0118) has bounced a little after falling sharply to 1.0090 overnight from yesterday's high near 1.0185. Thus, the Aussie has been the most volatile pair since yesterday. But, it has Support in the 1.0090-70 region.

Overall, the Dollar is still very weak and might find short-term selling interest on rallies for a few more days. The underlying concern seems to be that the US is unlikely to raise rates whereas the Eurozone is more likely to.'

In Asia, the Sing Dollar continues to trade strong near 1.2660. The Korean Won too is strong near 1116.40. Elsewhere in the world, the Russian Rouble (28.19) has seen strong gains over the last few months, with the USD-RUB coming down from 31.67 at the beginning of December. Dollar-Rupee has opened steady today at 45.0550/0650.

INTEREST RATES

The 3M USD LIBOR was unchanged at 0.31%. The 2Y and 10Y yields were up 1 bps and 3 bps each to quote at 0.70% and 3.51% respectively. The 10Y yield has very strong Resistance in 3.50-70 region and while it holds the yields can come down further to 3.20 in the coming days/weeks. To see the 10Y US Yield chart click on the following link:
http://www.kshitij.com/graphgallery/usdsin92.shtml#sin92

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Daily Financial Market Outlook

Daily Forex Fundamentals | Written by Lloyds TSB | Mar 08 11 05:11 GMT

The eurozone will remain at centre stage today, with sovereign debt problems in the periphery taking prominence over further positive economic data from Germany. Moody's downgraded Greece's sovereign rating three notches to B1 yesterday, pushing the cost of insuring Greek sovereign debt to a record high and putting upward pressure on bond yields and CDS throughout the region. Portugal's 10-year bonds hit a high of 7.5% and spreads with German bunds widened, sparking speculation that it could be close to asking for official financial support. The concern has to be that critical meetings scheduled for March 11 and on March 24 and 25 may fail to deliver the widely hoped ‘catch all' solution to the debt problems, leading to a raft of sovereign rating downgrades and a further sell-off in related bond markets. The current uncertainty will provide an interesting backdrop to presentations by the ECB's Nowotny and Weber this morning.

Data from Germany this morning are poised to highlight the stark divergence in economic prospects, with factory orders forecast to rebound by 2.2% in January after a weather-related 3.4% drop in December. However, the annual growth rate will slow to 15.5%, from 19.7% in December, highlighting just how strong momentum was at the start of last year. The difference now is that the benefits of the export-based recovery are increasingly spreading to the domestic economy, providing the basis for more sustainable growth. The January industrial output figures are released tomorrow.

In other events, the UK DMO will sell £0.8bn of index-linked 2042 bonds this morning, while the US Treasury will issue $32bn of 3-year notes this afternoon.

Chart: German manufacturing sector remains buoyant as global recovery sustains

 

Lloyds TSB Bank

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