Colt FX Late Edition December 1st 2008
Colt FX Late edition Monday December 1st 2008
In this week’s issue:
Forex Focus December 1st to 5th
Monday December 1st Update
Live trading session: Wednesday December 3rd
Colt on candles
New prices for Colt FX Total
Forex Focus December 1st to 5th
Markets anticipate this week’s rate cuts
Fundamentals took the back seat again as equity price action continued to be a major influence on currency prices…video + charts + text
Calendar December 1st to 5th
For an extensive list of the week’s economic releases and events see our economic calendar.
Monday December 1st News round-up
If last week was one of stimulus packages and buoyant stock markets, then this week looks set to rain on the parade. The Bank of Japan’s governor, Masaaki Shirakawa set the tone this morning when he noted that last weeks economic data showed that Japan’s economy was in ‘a severe state’. He described Japanese economic activity as ‘sluggish’. The central bank are planning to hold an emergency meeting on Tuesday (from 04:00 GMT) to discuss measures to ease credit strain which are driving up corporate lending costs. Most reports find it unlikely that they will cut interest rates from the current 0.30%. Shirakawa is due to hold a press conference on Tuesday which is slated for 06:30 GMT.
Even China, once thought of as recession-proof, posted a CSLA (China’s equivalent to PMI) contraction in manufacturing activity for the second month running.
Monday’s UK Manufacturing PMI data was so dire that one economist was inspired to say that British manufacturing had fallen off a large cliff. It seems that neither the weak pound nor recent cuts in interest rates have stalled the country’s slide into recession. A Bank of England cut of 1% on Thursday is looking more likely with every passing day and GBP/USD fell almost 400 pips in the hours after the data was released.
The euro zone’s Manufacturing PMI final figures were revised down to 35.6, a record low. The consensus is that the ECB will cut 50 bps. The ECB does not usually go against expectations, but these figures wouldn’t stand in the way of a bigger cut.
US numbers were also grim. Manufacturing PMI came in at its lowest for 26 years and Ben Bernanke admitted that the US economy ‘would probably remain weak for some time’. He went on to say that although further rate cuts were ‘feasible’, there was ‘obviously limited’ room for further reductions and “the second arrow in the Federal Reserve’s quiver -- the provision of liquidity -- remains effective.”
All this gloom can only mean one thing and falling equities markets around the world reflected falling risk appetite. On the forex markets this invariably leads to yen strength across the board and dollar strength against the Europeans.
As I write (20:30 GMT), EUR/USD is trading around 1.2640, the next significant support will be met at 1.2450 and if that breaks the key level is 1.2320.
GBP/USD eventually found support at 1.4850 and is currently trading around 1.49. We see support below 1.4850 at 1.4700.
USD/JPY is currently testing support at 93. The last time it plumbed these depths and fell to test 91.00, rumors abounded that the BoJ was ready to weaken the yen. So I’ll expect strong support at 92 and I’m looking forward to the outcome of tomorrow’s emergency meeting.
Please check our economic calendar for full details.
Live Trading Sessions
The next session will be on December 3rd at 15:30 to 17:30 GMT. We will be trading the Colt FX pairs; and the Jam FX system; looking at the RVI indicator and taking a look at what is happening on the charts.
If you’d like to join in, write to me at colt@coltfx.com.
Colt FX Total New Price Check out the new low price in the ColtFX shop.
You can find the RuLang code to Relative Vigor Index RVI on the Colt FX forum. We will be taking a look at the indicator in this week’s Colt FX live session.
Colt on candles My latest blog which aims to test the effectiveness of Japanese candlestick analysis.
Forex Club’s Platinum Package
Forex Club is offering the Colt FX distance learning course as part of their package of incentives to open a Platinum account. You can learn more about the details of this offer at http://www.fxclub.com/platinum/. You can find out more about Colt FX in our short film What is Colt FX?
Forex Club is offering the Colt FX distance learning course as part of their package of incentives to open a Platinum account. You can learn more about the details of this offer at http://www.fxclub.com/platinum/. You can find out more about Colt FX in our short film What is Colt FX?
If you have any questions about this newsletter or any of our services, please drop me a line at colt@coltfx.com.
Disclaimer
www.coltfx.com, and any of its affiliates, will not be held responsible for the reliability or accuracy of the information available in this newsletter. The content provided is put forward in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Colt FX or its affiliates. The reader agrees not to hold Colt FX or any of its affiliates, liable for decisions that are based on information in this newsletter. We highly recommend that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.
www.coltfx.com, and any of its affiliates, will not be held responsible for the reliability or accuracy of the information available in this newsletter. The content provided is put forward in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Colt FX or its affiliates. The reader agrees not to hold Colt FX or any of its affiliates, liable for decisions that are based on information in this newsletter. We highly recommend that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.
1 December | 
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