Forex Investment and Currency Trading

The pitchfork is created by drawing a line A from the start and finish of the first significant counter-trend price move (retracement) and then drawing a rend line B from the mid-point of the line back to the start of the original price move. Next, extend this line B to the right and draw two parallel lines starting from the end points of line the first line A (to the right).
Trend lines have been applied to all markets in all time frames. A rising market bounces up off its supporting trend line and a falling market bounces down off its [...]

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Hedgers and speculators in the forex market begin with a common challenge: to determine how to best benefit from the foreign exchange marketplace. The speculator must focus on opportunities to generate profits, while the hedger often concentrates on avoiding the evaporation of profits due to exchange rate fluctuation. In either circumstance, the forex trader is best served when operations in forex are treated as any other business challenge. The most common approaches to developing a business plan can be summarized with the following steps:
Determine an objective
This step may seem to fit the practices of the hedger better than the procedures [...]

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The Treasury’s announcement that it was abandoning its plans to purchase troubled assets, leaving available funds to the new administration, hurt risk appetite. In addition, the Treasury’s wind down of the Supplementary Financing Program (SFP) lowered expectations for issuance. These developments combined with dismal economic data to push Treasuries to yields not seen in data going back over half a century.
With the SFP winding down and TARP outlays winding down until the new administration is in place, the supply of bills may shrink by year-end, possibly richening bills even further from their current absurdly rich levels. However, longer out the [...]

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Last week saw the S&P 500 continue to post multi-year lows, while the USD index consolidated, suggesting that their inverse correlation (a result of the currency’s repatriation bid) may be weakening. Financial crisis is unlikely to remain indefinitely positive for the USD.
EUR/USD spent most of last week consolidating its recent losses, entering into a “triangle formation”, technically speaking. With the fundamental case for further USD gains weak, look for a resolution to the upside. The first significant level of resistance would be seen at 1.3210, the 23.6% retracement of the decline from the July 15th high to the October 27th [...]

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