Oil falls below $100

Crude extends decline to near $99 a barrel on increase in U.S. crude supplies.

SINGAPORE (AP) -- Oil prices fell further Thursday after dropping by more than a dollar in the previous session on larger-than-expected increases in U.S. crude and gasoline supplies.

Prices remained supported near Tuesday's record close of $100.88 a barrel as the U.S. dollar tumbled to fresh lows against the euro and worries about the American economy drove more money into energy futures as a hedge against inflation.

The report by the U.S. Energy Department's Energy Information Administration showed that country's crude oil inventories rose by 3.2 million barrels, or 1%, to 308.5 million barrels.

Although that number is slightly lower than levels a year ago, it is well ahead of the 2.4 million barrel gain analysts had been expecting, according to a survey by Dow Jones Newswires. It was the seventh straight week the report showed a rise in crude inventories, suggesting the U.S. at least has more than enough oil to meet demand.

Light, sweet crude for April delivery lost 36 cents to $99.28 a barrel in Asian electronic trading on the New York Mercantile Exchange, late afternoon in Singapore.

The contract fell $1.24 to settle at $99.64 a barrel Wednesday after surging as high as $102.08 a barrel, a trading record. On Tuesday, the contract jumped $1.65 to settle at a record $100.88 a barrel.

The EIA data showed gasoline inventories also jumped more than expected -- by 2.3 million barrels to 232.6 million barrels; analysts had expected a more modest rise of 400,000 barrels. Refinery activity also increased much more than expected.

The weakening U.S. dollar also helped prop up prices. The 15-nation euro jumped to a record $1.51 against the greenback, meaning that crude remains a relative bargain for buyers overseas. Gold - another commodity seen as a hedge against inflation - also struck a record Wednesday.

In his testimony to the U.S. Congress Wednesday, Federal Reserve Chairman Ben Bernanke warned of sluggish business growth ahead, and signaled a willingness by the central bank to cut interest rates again. But Bernanke also noted that the Fed must keep a close watch on inflation given the sharp rise in energy prices and other costs.

Heating oil futures lost 1.16 cents to $2.7595 a gallon while gasoline futures dropped 2.12 cents to $2.4565 a gallon.

Natural gas futures advanced 3.8 cents to $9.098 per 1,000 cubic feet.

Brent crude rose 31 cents to $97.96 a barrel on the ICE Futures exchange in London.

House approves $18B in oil taxes

Bush to veto bill rolling back tax breaks for oil

Stockholm shares slightly lower midmorning hit by weak US dollar

Shares were slightly lower in midmorning trade on profit taking following yesterday's weak US data and on concerns after the US dollar fell to 15 year lows against the Swedish krona.

At 10.50 am, the OMX Stockholm index was down 0.38 pct at 323.08 points, while the OMX Stockholm 30 was 0.48 pct lower at 975.37 points. Turnover amounted to 4.588 bln skr.

Big exporting companies exposed to the dollar were among the biggest losers, with Volvo B down 1.31 pct at 94.25, Electrolux B down 2.12 pct at 103.75, Ericsson (NASDAQ:ERICY) B down 0.80 pct at 13.65, and Atlas Copco A down 1.73 pct at 99.25.

Handelsbanken A was up 0.28 pct at 177.00 skr after its sharp fall yesterday. Keefe, Bruyette & Woods (KBW) downgraded shares in the bank to 'underperform' and slashed its 2008 and 2009 EPS estimates by 6 pct and 10 pct respectively, following the bank's weaker-than-expected fourth quarter results.

'Handelsbanken reported a weak Q4 result, missing consensus on the net interest income, fee and cost line by 1 pct, 3 pct and 9 pct. We are particularly concerned with the cost development which has previously been SHB's strongest card,' said KBW.

Among the other banks, Nordea was down 0.85 pct at 93.70, Swedbank A down 1.14 pct at 173.50, and Skandinaviska Enskilda Banken A down 0.93 pct at 159.50.

TeliaSonera (PINKSHEETS:TLSNF) was outperforming, up 1.43 pct at 49.50, after Dagens Industri reported the company's CEO Lars Nyberg is in discussions with Russian telecom investment company Altimo over a possible deal.

Scania B was down 0.63 pct at 157.00. Scania's Martin Lundstedt seen as likely successor to Leif Ostling as CEO of company reported Dagens Industri.

Hennes & Mauritz B was down 0.85 pct at 351.00. Swedish retail sales increased 4.8 pct in December from a year earlier, the Central Statistical Bureau reported. Market expectation was for a rise of 6.6 pct, according to a survey by SME Direkt.

Elsewhere in the market, Sandvik was down 0.23 pct at 106.25, Tele2 B down 0.92 pct at 107.75, and SCA B down 1.47 pct at 100.50.

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The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.

Euro Holds 1.5100 As Data Continues to Shine, Where is the Top?

Talking Points

• Japanese Yen: Bounces to 106.50
• Euro: Holds 151.00 as labor retail data prove supportive
• Pound: No event risk today
• Swiss Franc: employment expands for 11th quarter in a row
• US Dollar: GDP on tap

EURUSD made itself comfortable at its new home above the 1.5000 level, holding on to the 1.5100 figure for most of the night. The news out of the EZ continued to be constructive as both labor data and Retail PMI numbers demonstrated that the underlying fundamentals in the 15 member region remain sound.

German unemployment declined more than expected dropping by -75K from -48K forecast, as EZ largest economy continued to expand. More importantly German Retail PMI readings recovered from their sharp drop last month of 44.2 to end up above the 50 boom/bust level once again printing at 52.1. Overall, the EZ Retail PMI numbers stood at 52.4 – comfortably in expansion territory.

The overnight economic news goes a long way towards explaining ECB’s rather sanguine attitude towards growth. With labor markets continuing to generate jobs and with consumer demand in the region relatively healthy, ECB sees little need to lower rates anytime soon. As we’ve noted before, as long as EZ employment environment remains supportive, the ECB will have all the political protection it needs to maintain its hawkish policy.

Nevertheless, with EURUSD trading at such lofty highs the pair is overbought on a short term basis, as popular sentiment has clearly shifted to the euro. When the demise of the dollar becomes the top story on the Drudge report, a near term top in the EURUSD is not far behind. Yet any retrace in the pair is likely to be corrective and short lived. For the time being the fundamental story stands squarely on the side of euro bulls and if US data shows no signs of improvement, the pair could easily move higher after a short term pause.

To that end, today’s US GDP numbers could provide some fireworks in today’s North American session. The market expects an upward revision to 0.8% - still a paltry rate of growth - but slightly better than the initial 0.6% read. If the data surprises to the upside, it may quell some of the doom and gloom forecasts of an imminent recession that dogged the greenback. If, however, the news is even worse than the bears believe, the greenback could come under fresh selling pressure stoking fears that the recession is already here as EURUSD will continue its dally journey to new highs.

After 1.50, what’s next for the Euro?

Forex Report with FMCI Update by Forex Metrics - Feb.28/2008

Forex Report with FMCI Update by Forex Metrics - Feb.28/2008

FMCI is down by 54 pips to 1.2210 level with 4 out of 10 currencies up.

Today, after the US economic data release, FMCI dropped substantially due to the fear of recession gripping the global economy. Although Euro was high against USD and Pound, the overall global trend shows sign of economic slowdown.

FMCI reflects the current trend of global economies as a whole, from the value of major global currencies. Fall in FMCI indicates a global slowdown.

Economic data released on Feb/27 was negative for US.

* US Durable Goods Orders m/m fell -5.3% confirming reduction in consumer durable goods buying power.
Core Durable Goods Orders fell -1.6% m/m.
New Home Sales dropped to 588K, again showing no sign of recovery.
USD Crude Oil Inventories dropped to 3.2M and oil prices shot above $100 a barrel pushing inflationary pressure upward.

Finally, Bernanke acknowledged inflation risks but said “it is important to recognize that downside risks to growth remain.”
All these factors accelerate dollar its Record Breaking Declines. Also, Fed clearly indicates substantial interest rate cut which will increase interest rate gap between major economies.

* Germany figures were consistent with expectation, which made EU outlook positive and gave a boost to EURO to an all time high against USD.

* The UK GDP rose 0.6% q/q and 2.9% y/y in Q4 of 2007, which is considered positive, but not strong enough. Value of pound is at a level where exports may remain stable.

US recession fear is for real and interest rate cut at measured pace will only support growth, as any substantial cut will not help the economy. It appears that fed is under panic situation and more concerned about depression than recession.

Whereas Euro is not acknowledging the global slow down, which may be affecting EU in other half of 2008.

Trading with caution is recommended, as the only factor that is consistent globally today is, Change.

Major currencies were overall trending upwards with exception of USD.

Forex Report with FMCI Update by Forex Metrics - Feb.26/2008

Forex Report with FMCI Update by Forex Metrics - Feb.26/2008

FMCI shot up by 110 pips to 1.2245 level with 9 out of 10 currencies up.

Today, FMCI rose substantially with a relatively positive economic data. Major currencies were volatile in upward direction.

Economic data released on Feb/25 was positive in a way for US and UK.

* US existing-home sales fell a less-than-expected by 0.4% on m/m to a 4.89 million annual rate in January. This catalist signifies the possibility of avoiding recession and gave boost to USD, although there was negative news, that inventories of homes available for sale increased 5.5% at the end of January to 4.19 million.

* UK house prices fell 0.2% m/m in February, pushing annual house price inflation to a 22-month low, showing a sign of economic slowdown. Bank of England’s Monetary Policy Committee member Kate Barker commented “Recession remains outside the main possibilities….We have got this combination of shocks coming from abroad and it’s difficult….We certainly expect a period of greater volatility this year,” Definitely inflation is under check and cut in interest rate would be a suitable move for boosting the economic growth.
Major currencies were overall trending upwards, but still range bound.

Weekly Forex Update - Week09 : Feb.24/08 - Mar.01/08

Weekly Forex Update - Week09 : Feb.24/08 - Mar.01/08

ForexMetrics Currency Index (FMCI)

Last week FMCI was stable and consistent above 1.2100 level. Since FMCI is stable, major currencies do not have a definite direction as yet due to uncertainty on global economic slow down. Stable FMCI indicates that major currency pairs may remain range bound, which is suitable for conservative trader. Please be advised that we do not recommend forex trading, as FMI works on its own strategy of “TradeVestment”. For our trading strategy and techniques, range bound currency pairs are most favorable.

Monitor FMCI for fundamental economic analysis and daily report, before trading.
USD

US data definitely points towards continuing slow down of economy but at a reducing rate, as impact of rate cuts starts percolating towards grass root level. Reason for slowdown is liquidity crunch impacting housing sector and the ripple effect has slowed down consumer durables and automobile sector. The basic issue that US faces today is unavailability of cheap liquidity and this cannot be solved just by cutting interest level. US economy is currently under catch 22 situation. If Interest rate drops down to 2% in next 2 quarters, it may be a boost to economic growth but, drop in interest rate is causing inflationary pressure which may even out economic growth in short run.

Federal bank has to be very vigilant in deciding interest rate and has to balance inflation and growth. Bernanke’s decision would be very critical from now onwards, as 50 bps cut, which is widely expected, may not only boost growth, but increase inflation and inflationary pressure at all levels. This may lead US economy to stagflation, which would be undesirable.

Due to political pressure, coming election and external global factors, federal bank appears to be all set to cut more interest rate, as they may not have patience to wait till impact of rate cuts percolate deep into economy, which would be atleast 2 quarters. FMI-Team views that, the balancing act to boost growth and control inflation in current situation, can be performed only by holding interest rates and gradually cutting interest rate at measured pace depending on economic global data.

USD, during recession, may not necessarily get weaker as other economies, as US still contributes to 28% of global business.

What would make USD weaker is not recession or slow economic growth, but high rate of inflation. Currently, we view USD as range bound with majors only because USD is highly dependent on economic data and interest rate decision. Any more drastic cut may lead US to stagflation and USD may change its trend from Neutral to Downward.

European Union (Euro)

Last week, European Union data was kind of soft as the central bank has viewed inflation pressure reducing in next quarter and also forecasting a slower economic growth rate, but is not concerned about recession. We totally agree with this view as these subtle comments make us believe that EU central bank will try to hold interest rate as long as it is possible based on economic data.

There is nothing wrong with this view. However, in our opinion, EU central bank should cut its interest by 25 bps, only in the event of US federal cut as a preemptive move. The reason being to keep EU growth rate stable and well above inflation rate.

We see Euro as range bound currently, but any further increase in interest rate gap between US and UK, may lead to strengthening of EURO. Not good for economy specially in global slow down.

Sell Euro on strength.

Expected EUR/USD Range : 1.4887 to 1.4502

British Pound (GBP)

UK economic growth has been diminishing and inflation is stable. Sustaining growth rate at current interest rate level is tough. Expect interest rate cuts. Delay in interest rate cut by 25 bps may cause substantial slow down in British economy. This is with the view in mind, that liquidity crunch and expensive cost of borrowing will cause a ripple effect in slowing down economic growth.

Sell Cable against USD on strength.

Expected GBP/USD Range : 1.9892 to 1.9383
Expected EUR/GBP Range : 0.7569 to 0.7393

Conclusion:

Economic data from US, UK and EU was weak last week.

Euro will stay strong against USD and Cable.

USD may consolidate and shall remain range bound.

Pound may get stronger against USD and Euro.

Forex Market Mechanism

I believe all of you already know by now that the Forex market is the largest traded market in the world. So how are these currency pairs quoted on the Forex market? You will see two numbers on all Forex quotes. The first number is called the bid and the second is known as the offer (or the ASK) price. Take for instance EURUSD, you will see 1.4394/1.4395. The first quote of 1.4394 is the bid price, the price where traders are prepared to buy Euro against the USD Dollar. The second number 1.4395 is the offer or ask price and it is the price traders are prepared to sell the Euro against the US Dollar. You will notice that there is a difference between the bid and the offer price. This difference is known as the spread. Based on the previous EUR/USD quote, you know that 1 Euro is equal 1.4394 US dollar.

The way profit is measured of a currency is by “pips” or point. PIP is the acronym for price interest point. If the EUR/USD moves from 1.4394 to 1.4444 that is 50 pips. A pip or 0.001 is the last decimal place of a currency quotation with the exception of the Japanese Yen and Yen cross rates. A price movement for the USD/JPY from 111.10 to 111.60 will be 50 pips.

Microsoft + Yahoo = Microsoft - $44.6 billion

NEW YORK (Reuters) - Microsoft Corp (MSFT.O: Quote) has made an unsolicited offer to buy Yahoo Inc (YHOO.O: Quote) for $44.6 billion in cash and stock, seeking to join forces against Google Inc (GOOG.O: Quote) in what would be the biggest Internet deal since the Time Warner-AOL merger.

In its boldest-ever acquisition move, Microsoft said on Friday it offered $31 per share for Yahoo, or a 62 percent premium over the Internet media company's closing stock price on Nasdaq Thursday.

Yahoo, whose shares jumped to $30.75 in premarket trading, said it would evaluate the bid.

Microsoft shares, which have a market capitalization of about $300 billion, fell 6 percent to $30.78.

The 19 biggest trading scams

Company: Societe Generale (2008) Detail: Lost 4.9 billion euros ($7.2 billion) before taxes after trader went beyond permitted limits on European stock index futures.

Company: Bank of Montreal (2007) Detail: Wrong-way bets on natural gas led to a pretax loss of about C$680 million ($663 million).

Company: Amaranth Advisors LLC (2006) Detail: Trader Brian Hunter's bad bets on natural gas triggered $6.6 billion of losses.

Company: Refco Inc. (2005) Detail: Declared bankruptcy after hiding $430 million of debt

Company: China Aviation Oil (2004) Detail: Lost $550 million on (Singapore) Corp. speculative oil-futures trades, forcing debt restructuring.

Company: Allied Irish Banks Plc (2002) Detail: Trader hid $691 million in currency market losses.

Company: Plains All American (1999) Detail: Lost $160 million because of Pipeline LP unauthorized crude-oil trading by an employee.

Company: Long-Term Capital (1998) Detail: Lost $4 billion after a debt Management default by Russia

Company: Peregrine Investments (1998) Detail: Collapsed from at least Holdings Ltd. $300 million of debt bought from insolvent companies.

Company: National Westminster (1997) Detail: Disclosed $125 million charge Bank Plc to cover options-trading loss.

Company: Deutsche Morgan (1996) Detail: Fired fund manager Peter Young Grenfell for unauthorized trading and paid $279 million to bail out investors.

Company: Sumitomo Corp. (1996) Detail: Disclosed a $2.6 billion loss on unauthorized copper trades by Yasuo Hamanaka.

Company: Daiwa Bank (1995) Detail: Disclosed a $1.1 billion loss from unauthorized trades.

Company: Barings Plc (1995) Detail: Collapsed after trader Nick Leeson racked up $1.4 billion in losses.

Company: Orange County (1994) Detail: Lost $1.7 billion from debt California and derivatives used to expand its investment fund.

Company: Kidder Peabody & Co. (1994) Detail: Took a $210 million charge to reflect what it said were false bond trading profits by trader Joseph Jett.

Company: Codelco (1994) Trader Juan Pablo Davila lost more than $200 million speculating on copper

Company: Metallgesellschaft AG (1993) Detail: Lost more than $1.5 billion trading oil futures contracts
Company: Drexel Burnham (1990) Detail: Filed for bankruptcy after Lambert Inc. pleading guilty to charges of insider trading and stock manipulation.

TFN NEWS BRIEFING: Macroeconomics highlights to 10:10 GMT

US, EU unlikely to stop Microsoft deal

WASHINGTON (AP) - U.S. and European antitrust regulators aren't likely

to prevent Microsoft from buying Yahoo, analysts said Friday, though scrutiny of

the deal could drag on for months.

2008-02-01 23:31:41

EconoLog

NEW YORK (AP) - Is the U.S. economy slipping into recession? Economists,

analysts, company executives and investors are increasingly recognizing the

possibility. Following are some comments Friday assessing the state of the

economy, and what may happen if it slides into a recession:

-- Analysts from Moody's in a conference call cited heightened fear of a

recession as one of the reasons the ratings agency is likely to downgrade some

bond insurers' financial-strength ratings by the end of the month.

UPDATE: Colombia Nov Trade Surplus $190M Vs Nov 2006 Deficit

Colombia posted a trade surplus of $190 million in November compared to a $239 million deficit in the same month in 2006, the national statistics department, known as DANE, said Friday.

DANE said exports in November advanced 47% to $2.59 billion.

In the first 11 months of the year, the country posted a trade deficit of $1.33 billion compared to a deficit of $52 million in the same period in 2006.

Exports of oil, coal, coffee and nickel rose 53% in November from the same month in 2006 to $1.43 billion, while other exports saw a 42% rise to $1.69 billion.

Exports of oil products in November rose 111% to $853 million, boosted by higher prices, as the country's oil companies shipped 25% more tons of oil and processed products out of the country. Coal exports rose 9.5% to $304 million in value, and were up 2.1% to 5.74 million metric tons in volume.

In November, the worth of nickel exports fell 6.1% to $118 million, while coffee exports rose 20% to $152 million.

The largest trade deficit registered by Colombia in the first 11 months of the year was with Mexico at $2.25 billion, followed by China at $2.02 billion and Brazil $1.67 billion.

The trade gap with those countries was partly offset by surpluses of $3.34 billion with Venezuela and $2.05 billion with the U.S.

Analysts partly attribute the wider deficit in the 11-month period to the appreciation of the Colombian peso, which gained 11% last year, made exports less competitive, while encouraging Colombians to buy more imported goods and services.

Forex Benefits

The benefits of trading Forex (FX) online include but are not limited to the following:

• Real time live price quotes and execution
• Lower transaction costs
• Real time account position analysis as it relates to Profits & Losses
• Free full access to real time market news, data and analysis - including real-time price quotes, international news, government-issued economic indicators and reports, as well as subjective information such as expert commentary and analysis, trader chat forums etc.

The benefits of trading Forex (FX) vs. Equities & Futures Contracts are:

• Around the clock trading capability - 24 Hour a day trading (Weekdays)
• High level of liquidity, especially in the major currencies as the market exceeds US $1.8 Trillion daily.
• Highly leveraged with utilization of margins which allows for profit maximization and minimal up-front deposits. Please beware that this also indicates that the potential for losses is great as well if a prudent strategy is not adhered to.
• Lower transaction costs as most brokers do not charge commissions / fees as they operate from the width of the spreads in currency pairs.
• Real Time level information field between market participants
• Profit potential without restrictions in both a Long and a Short market (No up tick rule as in a Stock Short transaction).
• Uses easily understood terminology

Margins & Rollovers

Margins in the Forex (FX) market, unlike their counterparties in the purchase of equity (Down payment), provide for a performance bond against trading losses. The utilization of margins allows traders to hold a position much larger than their account value (Leverage). This allows for increased profit capabilities & positions while maintaining a constant counterbalance against trading losses even in a highly volatile market.

A Rollover is used for open daily positions; a trader will either pay or earn interest on their positions depending on the established margin and market position. Rollover positions are an inherent part of the Forex (FX) trading so it is imperative to keep track of the costs associated. Interest is paid on the currency that is borrowed, and earned on the one that is purchased. If a trader is buying a currency with a higher interest rate than the one he/she is borrowing, the net differential will be positive – and the client will earn funds as a result. Otherwise, the trader will have to incur a negative rollover and pay as long as the position remains open. (In other words, if you are long (bought) a particular currency and that currency has higher overnight interest rate you will gain and if you are short (sold) the currency with a higher overnight interest rate than you will lose the difference.)

Market Overview

The Foreign Exchange or Forex (FX) market allows individuals and/or firms to speculate on the exchange rate between two currencies. It may also be utilized for hedging and protection purposes by individuals and/or firms that transact business globally.

The FX market is considered an Over The Counter (OTC) or 'Interbank' market, due to the fact that transactions are conducted between two counterparts over the telephone or via an electronic network. Trading is not centralized on an exchange as with the stock and futures markets.

The major players in the market up until now have been only professional traders from major international commercial and investment banks. Today, the market is being utilized by other market participants that range from large multinational corporations, global money managers, registered dealers, international money brokers, futures and options traders, to private speculators.

The three main reasons for the market are – conversion of foreign profits into domestic currency, hedging against unwanted exposure to future price movements in the currency market and the most popular reason is for speculative profits which accounts for 95% of today’s daily FOREX (FX) volume.

By speculating in the Forex (FX) market, traders buy & sell currencies with the hope of making a profit when the value of the currencies changes in their favor.

Traders utilize both Fundamental (Global News, Economic Data) & Technical (Real Time and Historical Rate Data) analysis in order to assess their bias / position.

Technical traders use charts, trend lines, support and resistance levels, and numerous patterns and mathematical analyses to identify trading opportunities, whereas fundamentalists predict price movements by interpreting a wide variety of economic indicators including news, government-issued indicators and reports, and even rumor.

The major factors affecting the Forex (FX) market are economic, social and political events that relate to monetary and fiscal policies around the globe (Interest rates, Inflation, Trade Surplus / Deficit, etc.) In addition, traders also assess Central Banks across the globe with regards to intervention policies where governments sometimes participate in the Forex (FX) market to influence the value of their currencies, either by flooding the market with their domestic currency in an attempt to lower the price, or conversely buying in order to raise the price. Any of the aforementioned factors or large market orders might cause volatility.

The most dramatic price movements however, occur when unexpected events happen. The event can range from a Central Bank raising domestic interest rates to the outcome of a political election or even an act of war. Nonetheless, more often it is the expectations surrounding an event that drives the market rather than the event itself.

The Forex (FX) market's volume is estimated at over US $1.8 Trillion daily which makes it the largest and one of the most exhilarating trading markets in the world today – 30 times larger than the volume of US Equities markets.

As in any investment, it is prudent to assess the online forex trading brokers prior to opening an account. Below you will find the regulating bodies that oversee the industry:

		US Commodity Futures Trading Commission (CFTC)
		US National Futures Association (NFA)
		US National Association of Securities Dealers (NASD)
		UK Financial Services Authority (FSA)
		Finanstilsynet (FSA Denmark)
		Swiss Federal Department of Finance (FDF)
		Association Romande des intermediares financiers (ARIF)
		Hong Kong Securities and Futures Commission (SFC)
		Australian Securities & Investments Commission (ASIC)

Forex Technical Analysis for 01/28-02/01 Week

EUR/USD trend: sell.
GBP/USD trend: hold.
USD/JPY trend: buy.
EUR/JPY trend: hold.

Floor Pivot Points:
Pair	3rd Sup	2nd Sup	1st Sup	Pivot	1st Res	2nd Res	3rd Res
EUR/USD	98.3103	49.8734	98.3517	49.9148	98.3931	49.9562	98.4345
GBP/USD	1.8987	1.9162	1.9497	1.9672	2.0007	2.0182	2.0517
USD/JPY	102.27	103.62	105.18	106.53	108.09	109.44	111.00
EUR/JPY	145.84	148.98	152.84	155.98	159.84	162.98	166.84

Woodie's Pivot Points:
Pair	2nd Sup	1st Sup	Pivot	1st Res	2nd Res
EUR/USD	74.1022	146.8093	74.1436	146.8507	74.1850
GBP/USD	1.9162	1.9497	1.9672	2.0007	2.0182
USD/JPY	103.62	105.18	106.53	108.09	109.44
EUR/JPY	148.98	152.84	155.98	159.84	162.98

Camarilla Pivot Points:
Pair	4th Sup	3rd Sup	2nd Sup	1st Sup	1st Res	2nd Res	3rd Res	4th Res
EUR/USD	146.8072	146.8186	146.8224	146.8262	146.8338	146.8376	146.8414	146.8528
GBP/USD	1.9551	1.9691	1.9738	1.9784	1.9878	1.9925	1.9971	2.0112
USD/JPY	105.13	105.93	106.20	106.46	107.00	107.26	107.53	108.33
EUR/JPY	152.86	154.79	155.43	156.07	157.35	157.99	158.64	160.56

Fibonacci Retracement Levels:
Pairs	EUR/USD	GBP/USD	USD/JPY	EUR/JPY
100.0%	1.4779	1.9848	107.89	159.11
61.8%	1.4621	1.9653	106.78	156.44
50.0%	1.4572	1.9593	106.44	155.61
38.2%	1.4523	1.9533	106.09	154.78
23.6%	1.4463	1.9458	105.67	153.76
0.0%	1.4365	1.9338	104.98	152.11

Euro Rises as Dollar Weak on Average Releases

Today EUR/USD again showed a good level of gains, recovering from the major drop that was seen on Monday. It's already up by almost 0.8% and is looking strong. The reason for this behavior lies in the good Eurozone fundamental data and average data from U.S. today.

Initial jobless claims report for the last week showed an insignificant drop by 1,000 compared to previous 302,000 (which has been revised up from 301,000). The analysts expected a growth to 320,000 that week.

The report by National Association of Realtors on Existing home sales in December showed a bigger than expected decline — to 4.89 million from 5,00 million in November (annually adjusted).

Crude oil inventories in U.S. continued to grow in the past week, rising up 2.3 million barrels, compared to previous value. This growth can mean a domestic demand decline and the wish to increase the inventories while the oil prices are quite low.

Euro Down Fastest Since December

EUR/USD unexpectedly fell today after the moderate fundamental statistics were released in the United States. This currency pair declined from 1.4803 opening price to 1.4656 making it the largest daily drop for EUR/USD since December 14.

CPI (Consumer Price Index) in December showed a better than expected growth, increasing by 0.3% - still lower than in previous month (0.8%), but above the forecasted 0.2%.

Net foreign purchases of the long-term securities in November were at quite a high level - $90.9 billion, but lower than October's $114.0 billion.

December's industrial production stalled with 0% change, but that can be considered a good news, because the negative change has been expected. Industrial capacity utilization dropped slightly, going down from 81.6% (revised from 81.5%) to 81.4%.

U.S. crude oil inventories last week showed a gain at last increasing by almost 4.3 billion barrels after the previous report of 6.7 billion barrels dropdown.

Forex Trading Tips

Why do hundreds of thousands online traders and investors trade the forex market every day, and how do they make money doing it?

This two-part report clearly and simply details essential tips on how to avoid typical pitfalls and start making more money in your forex trading.

1. Trade pairs, not currencies - Like any relationship, you have to know both sides. Success or failure in forex trading depends upon being right about both currencies and how they impact one another, not just one.
   
2. Knowledge is Power - When starting out trading forex online, it is essential that you understand the basics of this market if you want to make the most of your investments.
   

   The main forex influencer is global news and events. For example, say an ECB statement is released on European interest rates which typically will cause a flurry of activity. Most newcomers react violently to news like this and close their positions and subsequently miss out on some of the best trading opportunities by waiting until the market calms down. The potential in the forex market is in the volatility, not in its tranquility.
   

3. Unambitious trading - Many new traders will place very tight orders in order to take very small profits. This is not a sustainable approach because although you may be profitable in the short run (if you are lucky), you risk losing in the longer term as you have to recover the difference between the bid and the ask price before you can make any profit and this is much more difficult when you make small trades than when you make larger ones.
   
4. Over-cautious trading - Like the trader who tries to take small incremental profits all the time, the trader who places tight stop losses with a retail forex broker is doomed. As we stated above, you have to give your position a fair chance to demonstrate its ability to produce. If you don't place reasonable stop losses that allow your trade to do so, you will always end up undercutting yourself and losing a small piece of your deposit with every trade.
   
5. Independence - If you are new to forex, you will either decide to trade your own money or to have a broker trade it for you. So far, so good. But your risk of losing increases exponentially if you either of these two things:
   

   Interfere with what your broker is doing on your behalf (as his strategy might require a long gestation period);
   

   Seek advice from too many sources - multiple input will only result in multiple losses. Take a position, ride with it and then analyse the outcome - by yourself, for yourself.
   

6. Tiny margins - Margin trading is one of the biggest advantages in trading forex as it allows you to trade amounts far larger than the total of your deposits. However, it can also be dangerous to novice traders as it can appeal to the greed factor that destroys many forex traders. The best guideline is to increase your leverage in line with your experience and success.
   
7. No strategy - The aim of making money is not a trading strategy. A strategy is your map for how you plan to make money. Your strategy details the approach you are going to take, which currencies you are going to trade and how you will manage your risk. Without a strategy, you may become one of the 90% of new traders that lose their money.
   
8. Trading Off-Peak Hours - Professional FX traders, option traders, and hedge funds posses a huge advantage over small retail traders during off-peak hours (between 2200 CET and 1000 CET) as they can hedge their positions and move them around when there is far small trade volume is going through (meaning their risk is smaller). The best advice for trading during off peak hours is simple - don't.
   
9. The only way is up/down - When the market is on its way up, the market is on its way up. When the market is going down, the market is going down. That's it. There are many systems which analyse past trends, but none that can accurately predict the future. But if you acknowledge to yourself that all that is happening at any time is that the market is simply moving, you'll be amazed at how hard it is to blame anyone else.
   
10. Trade on the news - Most of the really big market moves occur around news time. Trading volume is high and the moves are significant; this means there is no better time to trade than when news is released. This is when the big players adjust their positions and prices change resulting in a serious currency flow.
    
11. Exiting Trades - If you place a trade and it's not working out for you, get out. Don't compound your mistake by staying in and hoping for a reversal. If you're in a winning trade, don't talk yourself out of the position because you're bored or want to relieve stress; stress is a natural part of trading; get used to it.
    
12. Don't trade too short-term - If you are aiming to make less than 20 points profit, don't undertake the trade. The spread you are trading on will make the odds against you far too high.
    
13. Don't be smart - The most successful traders I know keep their trading simple. They don't analyse all day or research historical trends and track web logs and their results are excellent.
    
14. Tops and Bottoms - There are no real "bargains" in trading foreign exchange. Trade in the direction the price is going in and you're results will be almost guaranteed to improve.
    
15. Ignoring the technicals- Understanding whether the market is over-extended long or short is a key indicator of price action. Spikes occur in the market when it is moving all one way.
    
16. Emotional Trading - Without that all-important strategy, you're trades essentially are thoughts only and thoughts are emotions and a very poor foundation for trading. When most of us are upset and emotional, we don't tend to make the wisest decisions. Don't let your emotions sway you.
    
17. Confidence - Confidence comes from successful trading. If you lose money early in your trading career it's very difficult to regain it; the trick is not to go off half-cocked; learn the business before you trade. Remember, knowledge is power.

The second and final part of this report clearly and simply details more essential tips on how to avoid the pitfalls and start making more money in your forex trading.

1. Take it like a man - If you decide to ride a loss, you are simply displaying stupidity and cowardice. It takes guts to accept your loss and wait for tomorrow to try again. Sticking to a bad position ruins lots of traders - permanently. Try to remember that the market often behaves illogically, so don't get commit to any one trade; it's just a trade. One good trade will not make you a trading success; it's ongoing regular performance over months and years that makes a good trader.
   
2. Focus - Fantasising about possible profits and then "spending" them before you have realised them is no good. Focus on your current position(s) and place reasonable stop losses at the time you do the trade. Then sit back and enjoy the ride - you have no real control from now on, the market will do what it wants to do.
   
3. Don't trust demos - Demo trading often causes new traders to learn bad habits. These bad habits, which can be very dangerous in the long run, come about because you are playing with virtual money. Once you know how your broker's system works, start trading small amounts and only take the risk you can afford to win or lose.
   
4. Stick to the strategy - When you make money on a well thought-out strategic trade, don't go and lose half of it next time on a fancy; stick to your strategy and invest profits on the next trade that matches your long-term goals.
   
5. Trade today - Most successful day traders are highly focused on what's happening in the short-term, not what may happen over the next month. If you're trading with 40 to 60-point stops focus on what's happening today as the market will probably move too quickly to consider the long-term future. However, the long-term trends are not unimportant; they will not always help you though if you're trading intraday.
   

6. The clues are in the details - The bottom line on your account balance doesn't tell the whole story. Consider individual trade details; analyse your losses and the telling losing streaks. Generally, traders that make money without suffering significant daily losses have the best chance of sustaining positive performance in the long term.
   

7. Simulated Results - Be very careful and wary about infamous "black box" systems. These so-called trading signal systems do not often explain exactly how the trade signals they generate are produced. Typically, these systems only show their track record of extraordinary results - historical results. Successfully predicting future trade scenarios is altogether more complex. The high-speed algorithmic capabilities of these systems provide significant retrospective trading systems, not ones which will help you trade effectively in the future.
   

8. Get to know one cross at a time - Each currency pair is unique, and has a unique way of moving in the marketplace. The forces which cause the pair to move up and down are individual to each cross, so study them and learn from your experience and apply your learning to one cross at a time.
9. Risk Reward - If you put a 20 point stop and a 50 point profit your chances of winning are probably about 1-3 against you. In fact, given the spread you're trading on, it's more likely to be 1-4. Play the odds the market gives you.
   

10. Trading for Wrong Reasons - Don't trade if you are bored, unsure or reacting on a whim. The reason that you are bored in the first place is probably because there is no trade to make in the first place. If you are unsure, it's probably because you can't see the trade to make, so don't make one.
    

11. Zen Trading- Even when you have taken a position in the markets, you should try and think as you would if you hadn't taken one. This level of detachment is essential if you want to retain your clarity of mind and avoid succumbing to emotional impulses and therefore increasing the likelihood of incurring losses. To achieve this, you need to cultivate a calm and relaxed outlook. Trade in brief periods of no more than a few hours at a time and accept that once the trade has been made, it's out of your hands.
    

12. Determination - Once you have decided to place a trade, stick to it and let it run its course. This means that if your stop loss is close to being triggered, let it trigger. If you move your stop midway through a trade's life, you are more than likely to suffer worse moves against you. Your determination must be show itself when you acknowledge that you got it wrong, so get out.
    

13. Short-term Moving Average Crossovers - This is one of the most dangerous trade scenarios for non professional traders. When the short-term moving average crosses the longer-term moving average it only means that the average price in the short run is equal to the average price in the longer run. This is neither a bullish nor bearish indication, so don't fall into the trap of believing it is one.
    

14. Stochastic - Another dangerous scenario. When it first signals an exhausted condition that's when the big spike in the "exhausted" currency cross tends to occur. My advice is to buy on the first sign of an overbought cross and then sell on the first sign of an oversold one. This approach means that you'll be with the trend and have successfully identified a positive move that still has some way to go. So if percentage K and percentage D are both crossing 80, then buy! (This is the same on sell side, where you sell at 20).
    

15. One cross is all that counts - EURUSD seems to be trading higher, so you buy GBPUSD because it appears not to have moved yet. This is dangerous. Focus on one cross at a time - if EURUSD looks good to you, then just buy EURUSD.
    

16. Wrong Broker - A lot of FOREX brokers are in business only to make money from yours. Read forums, blogs and chats around the net to get an unbiased opinion before you choose your broker.
    
17. Too bullish - Trading statistics show that 90% of most traders will fail at some point. Being too bullish about your trading aptitude can be fatal to your long-term success. You can always learn more about trading the markets, even if you are currently successful in your trades. Stay modest, and keep your eyes open for new ideas and bad habits you might be falling in to.
    

18. Interpret forex news yourself - Learn to read the source documents of forex news and events - don't rely on the interpretations of news media or others.
    

How to avoid typical pitfalls and start making more money in your forex trading

Fiorenzo Fontana, a trader and analyst at UBS wrote a very interesting article containing a lot of tips on how to avoid typical pitfalls and start making more money in forex trading.

All of his tips are very interesting and useful. Some of the less known are as follows:

• Trade pairs, not currencies
• Don't place very tight orders
• Use reasonable stop losses
• Increase your leverage in line with your experience and success
• Don't trade during off peak hours
• The best time to trade is when news is released
• If you place a trade and it's not working out for you, get out
• Trade in the direction the price is going
• Learn the business before you trade - possibly the most important tip!

In the second part of the article, Fiorenzo gives a number of interesting tips relating to trader's behavior and psychology. Again, some of the less known are:

• Focus on your current position(s) and place reasonable stop losses at the time you do the trade
• Focus on one cross at a time
• Don't trust demos - demo trading often causes new traders to learn bad habits. Once you know how your broker's system works, start trading small amounts and only take the risk you can afford to win or lose (new traders - remember that!)
• Stick to your strategy and invest profits on the next trade that matches your long-term goals
• Don't trade if you are bored, unsure or reacting on a whim
• Read forums, blogs and chats around the net to get an unbiased opinion before you choose your broker

Fibonacci Numbers and the Golden Ratio - 3 Tips for Greater Trading Profits

In this report, we will look at the history and background of Fibonacci numbers and The Golden Ratio. We will then outline three specific money management tips that can help increase your profit potential.

Support and resistance levels are an important consideration for most traders to help identify entry and exit points when trading. Fibonacci percentage "retracement" levels based upon the Fibonacci number sequence and golden ratio are very popular with many traders but what are they exactly?

What are Fibonacci Numbers and the Golden Ratio?

The Fibonacci sequence first appeared as the solution to a problem in the Liber Abaci, a book written by Leonardo Fibonacci in 1202 to introduce the Hindu-Arabic numerals used today to a Europe still using Roman numerals.

The original problem in the Liber Abaci posed the question: How many pairs of rabbits can be generated from a single pair, if each month each mature pair brings forth a new pair, which, from the second month, becomes productive.

The Golden Ratio

After the first few numbers in the Fibonacci sequence, the ratio of any number to the next higher number is approximately .618, and the lower number is 1.618. These two figures are the golden mean or the golden ratio.

Its proportions are pleasing to the human senses and it appears throughout biology, art, music, and architecture. A few examples of natural shapes based on the Golden Ratio include DNA molecules, sunflowers, snail shells, galaxies, and hurricanes.

Important Retracement Levels

The two Fibonacci percentage retracement levels considered the most important in trading are 38.2% and 62.8%. Other important retracement percentages include 75%, 50%, and 33%. Three Profit Tips for Using Fibonacci Numbers

1. Fibonacci Defines Stop Loss Levels

A trader can use Fibonacci numbers to set stop loss orders.

For instance, if at least three Fibonacci price levels come together in a relatively tight zone, a stop loss placement just below or above the zone may be set.

A Fibonacci number helps define stops in the following way, if a trader trades against a support zone, if the support zone is violated and the price trades below that zone, the reason for the trade is negated and the position should be closed.

Setting stops using Fibonacci retracements takes the emotion out of trading and gives a pre defined exit point.

2. Fibonacci Defines Position Size

Depending on the risk you are prepared to take per trade, Fibonacci numbers can also define position size. For instance, if prices are right on a specific level, you may wish to have more positions than if the price is further away.

3. Fibonacci Defines Objectives

With Fibonacci numbers, once a pattern completes against a Fibonacci price zone you can use them to set profit objectives to bank partial profits or tighten stop loss levels. This clear objective for traders helps them to lock in profits. The great advantage of Fibonacci numbers and the golden ratio is the fact that they take the emotion out of trading and can define not only stop losses to exit a market, but also set profit objectives as well.

W D Gann and Fibonacci - The Perfect Trading Combination!

One trader who incorporated Fibonacci numbers and The Golden Ratio into his trading was the legendary trader W D Gann. We feel that the use of Fibonacci numbers with the Gann trading method provides traders with the best possible combination to seek long term trading profits.