Forex Trading Signal for 16 May 2013

                                                                                


Japan (Tokyo)                               United Kingdon (London)                        USA (New York)

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EUR/USD

Down Trend :

 (1) SELL

E/P: 1.28862

T/P: 1.29500

S/L: 1.30160

(2) SELL

E/P: 1.28688

T/P: 1.28400

S/L: 1.29000

GBP/USD

Up Trend:

(1) BUY

E/P: 1.52304

T/P: 1.52500

S/L: 1.52000

(2) SELL

E/P: 1.52233

T/P: 1.51900

S/L: 1.52500

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Forex - Dollar rises amid flight to safe on soft European, U.S. data

A string of disappointing economic indicators in the U.S. and Europe sent the dollar rising against most major currencies on Wednesday as investors sought safety in the liquid greenback.

In U.S. trading on Wednesday, EUR/USD was down 0.33% at 1.2877.

Government data released earlier revealed that U.S. industrial production fell more than expected in April, contracting 0.5% after expanding a revised 0.3% in March. 

Analysts were expecting industrial production, which gauges output at the country's factories, mines and utilities, to contract by 0.2% last month. 

Prices at the wholesale level in the U.S. disappointed as well.

The U.S. Department of Labor said the country's producer price index fell 0.7% in April, outpacing analysts calls for a 0.6% fall and beyond the 0.6% decline during the previous month. 

Core producer price inflation, which excludes food and energy, rose 0.1% last month, in line with expectations after a 0.2% increase the previous month. 

A regional manufacturing barometer in the U.S. disappointed as well.

The Federal Reserve Bank of New York's Empire State manufacturing index slid to -1.4 in May, from a reading of 3.1 last month, disappointing expectations for a rise to 4.0.

Weak data in Europe also bolstered the greenback's appeal.

Preliminary data showed that eurozone's gross domestic product contracted 0.2% in the first quarter, more than market calls for a 0.1% contraction though an improvement from a 0.6% decline in the previous quarter. 

Germany's GDP rose less than expected in the first quarter, expanding 0.1% after a 0.7% decline in the previous quarter. 

Still, analysts had expected the largest European economy to rise 0.3% in the first quarter. 

Year-on-year, the German economy contracted by 1.7%, outpacing expectations for a 0.2% a rise after an increase of 0.1% in the fourth quarter.

Disappointing data often fuels bets that the Federal Reserve won't rush to phase out stimulus measures that weaken the greenback to spur recovery, especially a USD85 billion monthly asset-purchasing program known as quantitative easing.

The euro, however, fared worse on sentiments that the European Central Bank has room to cut rates further while in the U.S., the Fed can merely keep policy loose for longer but has no real room for further accommodation, which bolstered the dollar's global appeal as a safe harbor.

The greenback, meanwhile, was down against the pound, with GBP/USDtrading up 0.06% at 1.5219.

The Bank of England predicted earlier that U.K. economic growth may speed up to 0.5% in the second quarter from 0.3% in the first three months of the year, which gave the pound support. 

Furthermore, official data showed that the number of unemployed people in the U.K. declined more than expected in April, dropping by 7,300 after a 9,900 decline the previous month. 

Analysts were expecting a decline of 3,000. 

Separately, the U.K. unemployment rate ticked down to 7.8% in March from 7.9% in February. 

Analysts were expecting the unemployment rate to remain unchanged.

The dollar was down against the yen, with USD/JPY down 0.06% at 102.36, and down against the Swiss franc, with USD/CHF trading down 0.13% at 0.9658.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.05% at 1.0174, AUD/USD down 0.11% at 0.9880 and NZD/USD trading up 0.30% at 0.8222.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.29% at 83.94. 

On Thursday, U.S. will unveil official data on building permits and housing starts. The U.S. is also to release official data on consumer inflation, initial jobless claims and the Philly Fed manufacturing index.

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U.S stocks end higher on hopes Fed stays loose; Dow rises 0.40%

U.S. stocks finished higher on Wednesday after a widely-watched industrial output gauge missed expectations and fueled hopes the Federal Reserve will keep monetary policy loose.

At the close of U.S. trading, the Dow Jones Industrial Average finished up 0.40%, the S&P 500 index ended up 0.51%, while the Nasdaq Composite index rose 0.26%.

Government data released earlier revealed that U.S. industrial production fell more than expected in April, contracting 0.5% after expanding a revised 0.3% in March. 

Analysts were expecting industrial production, which gauges output at the country's factories, mines and utilities, to contract by 0.2% last month. 

The Federal Reserve is currently buying USD85 billion in assets such as mortgage debt or Treasury holdings from banks each month, a monetary stimulus tool known as quantitative easing that weakens the greenback to spur recovery, with stock prices rising as a side effect.

Wednesday's data convinced many investors such programs will stay in place for now.
Prices at the wholesale level in the U.S. disappointed as well, which also fueled sentiment that the Fed will continue with its liquidity injections.

The U.S. Department of Labor said the country's producer price index fell 0.7% in April, outpacing analysts calls for a 0.6% fall and beyond the 0.6% decline during the previous month. 

Core producer price inflation, which excludes food and energy, rose 0.1% last month, in line with expectations after a 0.2% increase the previous month. 

A regional manufacturing barometer in the U.S. disappointed as well.

The Federal Reserve Bank of New York's Empire State manufacturing index slid to -1.4 in May, from a reading of 3.1 last month, disappointing expectations for a rise to 4.0.

Leading Dow Jones Industrial Average performers included American Express, up 1.76%, JPMorgan Chase, up 1.65%, and Procter & Gamble, up 1.54%.

The Dow Jones Industrial Average's worst performers included Hewlett-Packard, down 2.56%, Chevron, down 1.61%, and Alcoa, down 0.70%.

European indices, meanwhile, finished higher.

After the close of European trade, the EURO STOXX 50 rose 0.50%, France's CAC 40 rose 0.41%, while Germany's DAX 30 finished up 0.28%. Meanwhile, in the U.K. the FTSE 100 finished up 0.11%.

On Thursday, U.S. will unveil official data on building permits and housing starts. The U.S. is also to release official data on consumer inflation, initial jobless claims and the Philly Fed manufacturing index.

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EUR/USD May 15 – Suffers from weak GDP numbers, fails to recover on weak US data

EUR/USD was hit by a constant flow of disappointing GDP numbers from the old continent: France officially entered a recession, Germany barely escaped one and Italy’s economy contracted again. These numbers sent the pair to new lows. Also data from the US fell short of expectations, but euro/dollar only saw a limited bounce, far from a recovery. How low will we go?

Here is a quick update on the technical situation, indicators, and market sentiment that moves euro/dollar.

EUR/USD Technical

• Asian session: Euro/dollar failed to recover the 1.2960 line in the Asian session, and later fell to support at 1.2880, before losing this level as well and hitting a new low of 1.2842.
• Current range: 1.28 – 1.2880.

Further levels in both directions:

• Below: 1.2805, 1.2750, 1.27, 1.2624 and 1.2587.
• Above: 1.2880, 1.2960, 1.30, 1.3030, 1.31, 1.3160 and 1.32.
• 1.2805 is the border of the long term 1.2805 – 1.3170 and is critical support.
• 1.2880 turns into resistance, but it is not that strong at the moment. 1.2960 is more significant.

Euro falls on weak euro-zone GDP – click on the graph to enlarge.

EUR/USD Fundamentals

• 5:30 French GDP: exp. -0.1%, actual: -0.2%.
• 6:00 German GDP: exp. +0.3%, actual +0.1%.
• 6:45 French CPI: exp. +0.1%, actual -0.1%.
• 8:00 Italian GDP: exp. -0.4%, actual -0.5%.
• 9:00 Euro-zone GDP: exp. -0.1%, actual -0.2%.
• 12:30 US PPI: exp. -0.6%, actual -0.7%. Core PPI +0.1% as expected.
• 12:30 US Empire State Manufacturing Index: exp. +3.6, actual -1.4 points.
• 13:00 US TIC Long-Term Purchases: exp. +33.8 billion, actual -13.5 billion.
• 13:15 US Industrial Production: exp. -0.1%, actual -0.5%.
• 13:15 US Capacity Utilization Rate: exp. 78.4%, actual 77.8%.
• 14:00 US NAHB Housing Market Index: exp. 43 points, actual: 44 points.

For more events and lines, see the Euro to dollar forecast

EUR/USD Sentiment

• Euro-zone recession continues: The euro-zone contracted for a third quarter in a row. Output fell by 0.2%. At the time of the publication, this wasn’t totally unexpected, as Germany provided a big disappointment earlier: the economy grew by only 0.1% in Q1, short of 0.3% expected. Q4 was revised to a contraction of 0.7%. Also other countries disappointed. No end is in sight. This sent the euro lower.
• Negative deposit rates looming: The mention of negative deposit rates was not accidental. Earlier in the week, ECB member Ignazio Visco reiterated that the ECB is considering the idea. The ECB would be the first major central bank to adopt negative deposit rates. Proponents of the idea argue that it would increase lending to businesses and help boost economic activity in the sluggish Eurozone, but it could also scare money away, too fast. The mere mention of the negative rate weighs on the euro.
• US picture brighter, but not a one way street: Recent  employment numbers have been looking positive. Last week, Unemployment Claims came in at 323 thousand new claims, well below the estimate of 333 thousand. It was the third consecutive week that jobless claims has beaten expectations. This is excellent news, but the markets will want to see strong numbers from other sectors of the economy to be convinced that the US is headed in the right direction. Retail sales were good, but fresh data such as the Empire State indicator and industrial production curbed the dollar rally.
•  To taper or not to taper: This is the question facing the Federal Reserve. Is the recovery sustainable? The Fed mentioned that fiscal policy is restraining the recovery, but at least tax revenue is up, and this defers the political issues regarding the debt ceiling.

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Forex - GBP/USD flat to higher on soft U.S. data, BoE comments

The pound traded higher against the dollar on Wednesday after U.S. industrial output and wholesale pricing data missed expectations earlier.

Supporting the pair, the Bank of England forecast an uptick in economic growth later this year, though trading was choppy.

In U.S. trading on Wednesday, GBP/USD was up 0.03% at 1.5216, up from a session low of 1.5174 and off from a high of 1.5272.

Cable was likely to test support at 1.5099, the low of April 2 and resistance at 1.5331, Tuesday's high.

The Bank of England predicted earlier that U.K. economic growth may speed up to 0.5% in the second quarter from 0.3% in the first three months of the year, which gave the pound support. 

Furthermore, official data showed that the number of unemployed people in the U.K. declined more than expected in April, dropping by 7,300 after a 9,900 decline the previous month. Analysts were expecting a decline of 3,000. 

Separately, the U.K. unemployment rate ticked down to 7.8% in March from 7.9% in February. 

Analysts were expecting the unemployment rate to remain unchanged.

The U.S., meanwhile, saw its share of disappointing data.

Government data released earlier revealed that U.S. industrial production fell more than expected in April, contracting 0.5% after expanding a revised 0.3% in March. 

Analysts were expecting industrial production, which gauges output at the country's factories, mines and utilities, to contract by 0.2% last month. 

Prices at the wholesale level in the U.S. disappointed as well.

The U.S. Department of Labor said the country's producer price index fell 0.7% in April, outpacing analysts calls for a 0.6% fall and beyond the 0.6% decline during the previous month. 

Core producer price inflation, which excludes food and energy, rose 0.1% last month, in line with expectations after a 0.2% increase the previous month. 

A regional manufacturing barometer in the U.S. disappointed as well.

The Federal Reserve Bank of New York's Empire State manufacturing index slid to minus 1.4 in May, from a reading of 3.1, disappointing expectations for a rise to 4.0.

Offsetting Cable's gains, however, was a global race to the greenback as markets shunned risk-on assets and chased safety.

The pound, meanwhile, was up against the euro and up against the yen, with EUR/GBP trading down 0.42% at 0.8460 and GBP/JPY up 0.02% at 155.71.

On Thursday, the U.S. will unveil official data on building permits and housing starts. The U.S. is also to release official data on consumer inflation, initial jobless claims and the Philly Fed manufacturing index.

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SAFETY AND TRANSPARENCY

Safety of Funds

We believe managers’ and clients’ interests must be aligned. We structures its programs on a performance-based fee model. If you do well, we do well. If you don’t, we don’t. If there is a negative return for the month, it is carried forward and must first be recouped, before performance fees can again be earned.

Our programs are compensated by performance fees, not by transactions made.
Our programs accept individual client accounts. We do not have a pool of funds.
Client funds are sent to an established Forex brokerage, not to our account. You are the only person on the planet whom this broker allows to deposit or withdraw the money from this account. This is YOUR money and YOUR account.
Client has 24/7 access to view the account in live action and its history via investor viewing privileges.
Our traders are able to perform trading operations with the money under your limited power of attorney. They cannot withdraw this money and buy a Ferrari or a private island.

Monthly returns will be based on realized positions at the end of each month. Any fees on new profits (above water mark) are only subject to realized gains, which means no fees will be applied to floating positions.

How we get paid by you?

You don’t pay us directly and you will not be invoiced for our fee. Based on the performance structure agreed between manager and you, the broker will charge the performance fee from your account and credit it to us. As a result, when you withdraw funds to your Bank account, you withdraw only your profits and not the performance fee paid to manager.

Do you provide any guarantee of the return?

We don’t provide any guarantee or assurances for returns. Forex trading is a risky investment and is not suitable for everybody. You should gauge your investment goals before investing in any kind of speculative trading. Always do your due diligence before investing money anywhere. We invite you to view our fund performance and ask us any questions you may have, contact us.

Do I have to open my own brokerage account in order to participate?

Yes you have to. All the money is held in your name in your trading account. In case you already have an account at the selected brokerages, you can transfer us the control.

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PORTFOLIO ADVANTAGES

High Net Worth Investments
Available to the Middle Class

Hedge Funds only allow high net worth investors the availability to invest in such alternative high performing programs. We strive to make alternative high performing investments available to not only the High Net Worth but also the middle class. We aim to build wealth for all.

Massive Liquidity

The 2010 survey shows a substantial rise in activity in traditional foreign exchange markets compared to 2007. Average daily turnover rose to $3.98 trillion in April 2010, an increase of 20% compared to 2007.

Ability to Achieve Profit or Loss in Rising or Declining Markets

Unlike equity and fixed income managers, a Forex Asset Manager employs both long and short positions with equal facility. In Forex trading, there is no difference in profit potential (or loss potential) between a long and short position. Because of this characteristic a Forex portfolio is not ‘biased long’ but able to profit under any market conditions.

Risk Control

Investing in Forex incorporates disciplined risk control procedures in order to limit risk and achieve the smoothest possible growth in its investor account values. Leverage is an acceptable and useful tool when used judiciously and with strict risk management techniques. Investors in currencies are therefore able to achieve a high rate of return with a level of risk control that is not possible with traditional “buy and hold” investments.

Diversification

We have evidence that positive returns can be generated by pursuing a PAMM. What is less widely known is that the introduction of FX in a properly constituted portfolio of other assets can actually reduce the probability and severity of draw downs. This means that many participants in the FX market trade to hedge exposures rather than to generate investment profit.

Greater Leverage

Forex trading provides greater leverage than is found in traditional stock trading, which allows traders to control larger positions with smaller amounts of capital. This also allows you to trade the same size positions you might take with a stock broker, while leaving you with more available capital to trade more markets. Please note that without appropriate use of risk management, a high degree of leverage can lead to large losses as well as gains.

Reduce Portfolio Risk
While Enhancing Returns

When combined with an investor’s existing portfolio of equity and fixed income instruments, the Forex PAMM Program potentially reduces the volatility and risk of that portfolio with the goal of enhancing long-term returns.

Global Diversification

The performance of equity and fixed income investments in one country is often highly correlated with the performance of equity and fixed income investments in other countries. As a result, global portfolios composed solely of equity and fixed income investments lack full diversification, even if they are geographically dispersed. Investing in a Forex managed account gives investors access to markets beyond equity and fixed income investments, providing more complete diversification and a reduction in portfolio risk.

Transparency

A managed account will give clients the ability to monitor their investment account 24/7. All that is needed is a PC and access to the Internet. Each client has a unique login and user name which will give them access to view their account being managed live.

Low Correlation

FX returns have a very low correlation with bond or equity market returns. Between 1980 and 2006, they had a 5% correlation with equities and a minus 21% correlation with bonds. Equities and bonds, meanwhile, had a 26% correlation rate over this period.

No Independent Market Controllers

The stock market is very susceptible to large buys and sells. On the other hand, Forex is the largest, most liquid market. This makes the likelihood of any one fund, bank or company controlling a particular currency extremely slim. The extreme liquidity of the Forex market is reflective of its many large participants from around the world, including banks, hedge funds, brokerages and governments.

24 Hour Trading

The Forex market is a 24 hour exchange. Majority of the participating brokers are open from 5:00pm EST on Sunday until 5:00pm EST on Friday, with customer service usually available 24/6. Traders can participate during the Asian, European and U.S. market hours.

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WHY FOREX PORTFOLIO

• Trading opportunities in both long and short positions

• Professional account management by experienced managers

• Asset diversification – low correlation with bond or equity market

• Safety – account is managed under your name

• Transparency – 24/7 real-time account access and monitoring

• Liquidity of assets – money can be withdrawn at any time

• Low initial investment for a PAMM account

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BOE sees stronger growth, lower inflation – GBP/USD recovers

The Bank of England raised its growth forecasts, but stressed that the recovery would be weak. Q2 growth is expected to stand at 0.5% and yearly growth will reach 2% in 2 years time. This is the last inflation report by outgoing governor Mervyn King. He accompanies the report with a press conference.

GBP/USD was trading at around 1.5240 before the publication, bouncing from earlier lows. It fell in the immediate aftermath of the publication, but recovered quickly. Update: it is now trading higher than before the publication.

Inflation is expected to peak in the third quarter, but isn’t expected to drop below 2% in the next 2 years. King also says it is not the time to be complacent, despite the current forecasts that assume the financial crisis impact is gradually fading.

All in all, the forecasts are more positive than in the previous report: stronger growth and lower inflation. King added that “recovery is in sight for the UK economy”.

More from the King: monetary policy continues to be a hard balancing act, and it cannot solve all problems. There is lots of stimulus at the moment.

The main risks come from the euro-zone, even though the BOE forecasts no more contraction in the old continent during the second half of the year.

Labor productivity is expected to rise. Investors expecte interest rates to remain below 1% in the next four years.

Earlier, the UK reported better-than-expected employment numbers: the number of jobless claims dropped by 7.3K in April, and the unemployment rate for March fell to 7.8%.

For more, see the GBP/USD forecast.

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Forex - GBP/USD edges higher on strong U.K. data

The pound edged higher against the U.S. dollar on Wednesday, after the release of positive employment data from the U.K., while investors eyed highly anticipated U.S. economic reports later in the day. 

GBP/USD hit 1.5254 during European morning trade, the session high; the pair subsequently consolidated at 1.5229, adding 0.12%. 

The pair was likely to find support at 1.5099, the low of April 2 and resistance at 1.5331, Tuesday's high. 

Official data showed that the number of unemployed people in the U.K. declined far-more-than expected in April, dropping by 7,300 after a 9,900 decline the previous month. 

Analysts had expected the number of unemployed people to fall by 3,000 last month. 

Separately, the U.K. unemployment rate ticked down to 7.8 in March, from 7.9 the previous month. Analysts had expected the unemployment rate to remain unchanged. 

Sentiment remained under pressure however, after preliminary data showed that Germany's gross domestic product rose less-than-expected in the first quarter, adding 0.1% after a 0.7% decline in the previous quarter. Analysts had expected the GDP to rise 0.3% in the first quarter. 

Year-on-year, Germany's GDP contracted by 1.7%, disappointing expectations for a 0.2% a rise, after an increase of 0.1% in the fourth quarter. 

Sterling was higher against the euro with EUR/GBP shedding 0.29%, to hit 0.8471. 

Later in the day, the U.S. was to release data on producer price inflation, industrial production, the capacity utilization rate and a report on manufacturing activity in New York State.

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