This Friday morning we have some important patterns emerging. I like to form a daily outlook using a 4 Hour chart because it provides a good combination of “big picture” perspective as well as enabling our “thumbs on the pulse” of the market. So let’s get started:

USDCHF
Dollar weakness is the focus today and we see the battle lines are right on the key support at 1.04. Its best to get a confirmation of either a bounce off support or a break down before one anticipates what will happen.

EURUSD – Bearish facing test of Inner and Outer Support
Technically, the action is clearly on the side of the bears. But the key is confirmation. We have a fuzzy barrier of Inner support at 1.2980. Its fuzzy because there are a lot of candlestick “tails“ there. This means the market is not drawing a line in the sand on Support. It actually tested the Outer Support at 1.2953. Tactically, the interesting situation will be a break of Inner Support with a target to Outer Support. Also, a failure at 1.2980 could generate a bounce condition.

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It should not be assumed that the methods, techniques, or indicators presented in these pages will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these pages are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.

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Each auto maker reports sales individually. The reports are typically released over the course of the first three business days of the month. Using the individual reports, a total annual sales pace can be calculated after applying Commerce Department seasonal factors. It is this annual sales pace that the market refers to when discussing auto and truck sales for the month.
In Depth

Vehicle sales figures rarely grab the attention of the market probably for two reasons. First, though the specifics of the data are not terribly difficult to understand, their implications are a little hard to trace. Second, unlike many economic releases, vehicle sales are not released all at once and at the same time every month. This makes it difficult for the market to quickly interpret what the numbers mean for the overall consumption picture and to react accordingly.

This is what happens in terms of vehicle sales during the course of any given month:
The individual vehicle manufacturers report their sales results during the first three or four days of the month.
A day after the last manufacturer reports the Bureau of Economic Analysis releases its estimate of unit auto sales.
About a week after that the BEA releases its estimate of unit truck sales.
The Census Bureau releases its retail sales report, including a measure of sales at automotive dealers, usually around the 13th of the month.
Roughly two weeks after that the BEA releases its personal income and outlays release, including a measure of spending on motor vehicles and parts.

Each item in this list warrants a more detailed discussion.

Manufacturers
Most vehicle manufacturers usually always report sales results on the first business day of the month; Ford does not report until the third business day. As these individual results trickle out over the news wires throughout the day, diligent economists and market analysts are busy calculating running totals and applying seasonal factors to them–the BEA supplies factors for the coming six months in advance–in order to come up with approximations for auto and truck sales rates. These figures are some of the first hard spending data for any given month; comparing these derived rates to those from months and years prior is a big help when it comes to formulating a consumption forecast for the month.

Unit Sales
Once economists and analysts have translated individual sales results into annual rates, they turn to the BEA to provide “official” unit sales rates. Unfortunately, though the BEA is using the same seasonal factors as the rest of us, more often than not it produces unit rates that are modestly different than the ones that market previously had in mind. Thankfully, however, these differences usually pop up in the individual sales categories–domestic car sales, import car sales, domestic truck sales, and import truck sales–but wash out when all the vehicle types are aggregated.

Retail Sales
With unit sales rates in hand we can proceed to forecast the auto sales contribution to the retail sales figure. And this link is important. In fact, autos often prove to be such a significant swing factor that retail sales are scrutinised on both a total and an excluding-autos basis. It is also worth remembering that the auto term in the retail report is notoriously difficult to estimate; it is not at all rare to see it decline (increase) during a month when unit auto sales rise (fall). Still, by the time the retail sales report rolls around, a few other preliminary spending gauges can be used in conjunction with the unit auto data to get a pretty good read on whether retail consumption rose or fell for the month.

Personal Consumption Expenditure
With unit sales rates and retail auto spending data in hand analysts can hone their estimates for the auto category in the personal consumption release. Many analysts place relatively more emphasis on the retail auto figures to sharpen their PCE estimates, but the unit auto numbers typically have better predictive power for that series. Besides, it is not commonly known that the BEA does not rely at all on the the retail sales data to produce its consumption estimates. Thus, as an important component of the monthly consumption figures that go directly into the quarterly GDP calculation, the PCE auto data are most important to economic forecasters.

One such opportunity just came about with Abe Cofnas, one of the original pioneers of retail forex trading and author of three books on the subject. I first had occasion to run across Abe’s work when I started my own journey into forex. At the time I was trading futures and stocks, and came across Abe’s column in Futures magazine.

I was impressed by his straight-forward approach and ability to explain the intricacies of the forex market. I was hooked. So I went out and bought Abe’s book and dove right in and it was instrumental in my development as a forex trader.

In addition to his books, Abe is the president and founder of Learn4x.com and has been teaching students the forex market since 1999. I had a chance to catch up with Abe, and here are the highlights of the interview:

(FTB): You’ve seen a lot of traders come and go in the forex market. What is the one common trait all successful forex traders must have?

(AC): When all is said and done it comes down to psychology-the trader’s mindset. Successful traders may have different technical analysis tools, and fundamental views, but they have a mind-set that permits them to survive. The best of us lose money, and maybe even 40% of the time. The mindset is to recognize the opportunity and not dwell on the loss. Also, of critical importance is recognizing just what is driving the currency prices. There is a lot of noise, and you have to filter out the noise as well. The most successful traders “listen” to the market.

(FTB): In your opinion, why is the forex market the fastest growing financial market to trade and what are the advantages over other markets?

(AC): The key reason is that the world is interconnected as never before and forex allows a person to ride what I call, “the light-beam” of the world economy. By trading currency pairs you participate globally immediately and that is exciting.
Also, an average person no matter what their background can trade and win! I see it all the time, the “best and the brightest” often can’t trade better than Mr. Joe Six-pack!

(FTB): How has the industry changed since you began as one of the pioneers in forex trading?

(AC): There is greater awareness of forex. Today forex is considered a legitimate alternative investment and trading medium. The industry was the “wild west” years ago. Spreads were 5 pips and more and today, retail trading offers institutional spreads. The industry has acquired legitimacy and the players are required to be more capitalized.

(FTB): Which is more important, fundamental or technical analysis?

(AC): There is a common notion that it’s a battle between fundamental thinking and technical analysis. I don’t think that is true. Let’s define the terms. Technical analysis is deriving insight into the price action by ONLY looking at charts. Fundamental analysis is detecting the forces that move the prices. So price action is both fundamental and technical. You need to know what moved the price and not just that it moved a certain distance with momentum. The movement of the EURUSD in the next 5 minutes may be a reaction to the words of a central banker, or the release of a budget policy. If the trader doesn’t see what is going on outside the chart, there is exposure to misinterpretation.

(FTB): What is the biggest mistake novice traders make time and time again?

(AC): One word: Anticipation. “Newbies” or novice traders think they can anticipate the price direction. So they assume the currency pair will move to “their” script. The more experienced trader reacts and confirms what the price is doing, and THEN decides to join a direction instead of anticipating one.

(FTB): What advice would you give to new traders looking to enter the forex market?

(AC): Get into the action as soon as possible with real capital. I have found the best traders in the world in virtual trading-until they go live and face the psychodynamics of real trading. Set aside some risk capital and join the action. Put on trades, learn from errors, etc.

(FTB): Do you have a favored style of trading that you use?

(AC): I do have many different styles that fit different goals. But to answer the question, I like what I call “sniper” trading. I focus on entry conditions, and get into the action and ride the predominant wave. A good entry can result in a short grab of 5-10 pips or even more. But you have to catch the momentum and then-get out of the way and protect your profit. I have pioneered Price Break charting and Renko charting for detecting trend variations and what I call the “micro-detection of sentiment”. We can go down to the pip level of granularity in detecting if it’s time to get out!

(FTB): What is the “secret” to making profits in the forex market?

(AC): Hmmm…. ”Pip Accumulation”. What I mean by that is that one can spend an entire day waiting for a big move opportunity or scan about 12 currency pairs for 5 good moves per pair for short term gains. It’s easier to get 50 pips with several trades than with one.

(FTB): What was the best trade call you ever made?

(AC): Long the Aussie at .63 in March 09 and it went to .94 in November 09. I didn’t hold it that long but it was a beautiful move I caught several times in and out on the way.

(FTB): How has becoming a best-selling author impacted your trading?

(AC): My books: The Forex Trading Course (Wiley), The Forex Options Trading Course (Wiley), and my new book Sentiment Indicators (Bloomberg Press) were probably the best source of improving my trading than any other. The reason is that it forced me to be clear in my thinking about how to trade. I learned that if you can teach and tell someone exactly how to do something, the process of doing so forces you to detect your own weaknesses. It was a therapeutic experience.

This morning has started out in full risk-taking mode, as no additional negative news has come out of the Euro zone. As I mentioned yesterday, every day without news will embolden the market and encourage risk-taking. Yesterday’s rumor du jour was that the Chinese government was re-evaluating its Euro zone holdings, which sent the market lower as fears of further selling in the Euro were heightened. However, the Chinese denied that rumor and the markets have rebounded strongly this morning.

The Dollar has benefited as of late due to the flight to safety trade, so at this point while the fundamentals are improving, the US still has a long road to recovery ahead.

In the forex market:

Aussie (AUD): The Aussie is higher on risk-taking this morning, as traders aggressively jump back into carry trades. Because the Aussie had been sold off due to risk-aversion, carry traders buying here are essentially getting a discount which is giving them a better return on investment.

Loonie (CAD): The Loonie is higher as well, as oil is back above 73. The market is looking ahead to next week’s rate policy meeting, where the expectation is that they will raise rates. If the Euro zone can stabilize, then this will most likely happen.

Kiwi (NZD): The Kiwi is also up on carry trades and NZ reported last night a better than expected trade surplus, showing that demand for imports declined as exports increased. However, an IMF report said that the Kiwi may be 10-25% over-valued and that a lower valuation would help narrow its account deficit. So there could be a pause at the mid-year expectation if inflation is contained, though carry traders don’t mind as they are content with the yield differential.

Euro (EUR): Hooray for the Euro! They have finally had a day where everyone was on the same page and the message to the marketplace was clear and concise: the Euro is not in danger of failing, and the debt crisis is likely to be contained. CPI figures in Germany came in on target, showing that inflation is contained despite a weaker Euro. Growth in the US and China may offset the Euro zone debt crisis. China did not pile on to the mess, claiming that they are not reviewing their Euro holdings quelling fears that a further sell-off was imminent.

Pound (GBP): The Pound is higher as risk-appetite in the market has picked up, and the lack of negative news from the Euro zone is providing support.

Dollar (USD): The Dollar is lower this morning as risk-taking has reduced demand for the safe-haven trade. GDP figures came in slightly lower than expected, but positive nevertheless. Initial jobless claims were slightly higher; showing signs that while the US economy is improving, it is moving very slowly. Some may claim that part of this GDP growth was due to government stimulus programs, which are starting to expire shortly. Whether or not the economy can remain on this trajectory remains to be seen once the stimulative measures are removed.

Yen (JPY): As expected, the Yen is the worst performer this morning as risk-appetite has increased the selling of yen as yield-seeking traders put on their carry trades. Tomorrow will bring a plethora of economic data, from CPI to the jobless rate; however don’t expect these to be market movers unless they are grossly out of line.

Yesterday’s blog article about the market “proceeding with caution” was prescient in that it showed that market was still jittery. What started out as a positive day quickly reversed as rumors of a potential Chinese sell-off of Euro assets.

However, with an additional day of Euro stabilization due to the lack of negative news, the markets gain confidence in the global economic picture. As you see, it doesn’t take long for the market to have a “short memory”.

Canada’s gross domestic product grew 6.1 percent in the first quarter of this year, the fastest pace in a decade. July delivery for crude oil rose $0.71 (1 percent) to $74.68 per barrel on the New York Mercantile Exchange. Crude oil is the source of the biggest export revenue for Canada.

Considering the good fundamentals, the bets on the increasing interest rates rose, while they dropped previously as the turmoil on the global markets decreased the likelihood of the increase. Tomorrow’s decision of the central bank about the interest rates, whichever it’ll be, will have the significant impact on the Canadian currency.

USD/CAD dropped to 1.0460 as of 18:20 GMT today from the opening price of 1.0516. EUR/CAD went down to about 1.2863 from its opening rate of 1.2914.

If you want to comment on the Canadian dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.

Forex Trading versteht sich als die Luxusklasse der Spekulation und bietet ein beträchtliches Potenzial. Der Handel mit Währungen findet nicht an einer zentralen Börse, sondern direkt zwischen den Marktteilnehmern statt. Öffnungszeiten wie an der Börse sind dabei ebenfalls passé: Der Forex Handel beginnt am Sonntagabend in Australien und endet am Freitagabend in den USA. Über die Accounts der Forex Broker kann so rund um die Uhr mit Währungen gehandelt werden.

Der Devisenmarkt gilt dabei als der fairste Markt der Welt, weil es einzelnen Teilnehmern nicht möglich ist, die Kurse zu beeinflussen. Privatanleger können am Forex Handel teilnehmen und auf Augenhöhe mit Geschäfts- und Notenbanken das Geschehen verfolgen. Gewinne können dabei bei steigenden und fallenden Kursen erzielt werden und die Gebühren im Forex Trading sind deutlich niedriger als beim Handel mit Aktien oder Derivaten.

Auf diesen Seiten bieten wir Ihnen einen Einblick in die Welt des Währungshandels und zeigen Möglichkeiten auf, mit denen am Forex Markt Geld verdient werden kann. Fachspezifische Fragen werden ebenso beleuchtet wie die Angebote der wichtigsten Forex Broker und die Möglichkeit, über Forex Signale die besten Chancen rechtzeitig zu erkennen und Geld zu verdienen. Mit dem richtigen Know-How ausgestattet, kann binnen kürzester Zeit mit dem Forex Trading begonnen werden.
Informieren Sie sich bei dieser Gelegenheit auch gleich über Girokonten.

At first glance, there have been many changes to his training. His chart school, which are Rob’s trade ideas for students in video format appear to be more interactive. He provides a web conferencing platform where any of his students can attend and ask questions via messenging or voice. Other basic course materials seem unchanged such as the course introduction, FX basics, backtesting, support and resistance, moving averages, and similar topics. These are really basic though and I don’t see any reason why these would ever change. The course materials are also for the totally inexperienced forex trader, someone who has really never explored Forex outside of this course.