Fundamental Outlook for US Dollar:

It was a tenuous week; but the dollar was able to ultimately hold its own through the close. However, just because momentum behind the earnings-driven rally in risk appetite has stalled does not mean that the world’s most liquid currency has avoided a collapse all together. Sentiment winds have died down; but they can easily jostle the safe-haven dollar should another economic catalyst surface. This makes for an uncertain future when combined with the fundamental influence that the 2Q GDP report will have on the currency. Now, not only do traders have to interpret the data, they will also have to judge whether it has a greater impact on risk appetite or growth considerations for the beleaguered dollar.

Looking ahead to next week, the most immediate threat to the greenback’s stability is the intensity and direction of risk appetite. While this currency is deeply mired in speculation surrounding the economy’s leading or lagging growth potential, interest rate expectations, and deficit projections among other influences; risk appetite has proven itself to be insuperable. With the Federal Reserve vowing to keep the benchmark lending rate at levels that insure a carry status when conditions do turn around and politicians ensuring the economy will struggle with record levels of debt for years to come, there seems little doubt that the dollar will maintain its position on the opposite of risk appetite. But, considering the stalled progress most of the dollar and yen crosses saw last week; is there a strong shift in sentiment in the works? With EURUSD and GBPUSD just off of key levels of resistance, the pressure is growing. However, the primary source of momentum this past week – the second quarter earnings season – is already on the decline. If left up to the markets alone, equities have already forged new highs for the year; but commodities, fixed income and risk-sensitive currency pairs have not pushed to comparable levels. Oddly enough, one of the most likely catalysts for risk going forward also happens to be the most attention grabbing indicator on the US docket: GDP.

According to economists forecasts, the world’s largest economy contracted at a 1.5 percent on an annualized pace through the second quarter. This would be a marked improvement from the 5.5 percent and 6.3 percent rate of the recession through the first quarter of 2009 and fourth quarter 2008 respectively. This would certainly confirm policy officials expectations for a return to positive growth by the end of this year or beginning of the next; but through the near-term it is still a call for speculation to rank the economy’s performance against that of its major counterparts. China recently reported a sharp advance to a 7.9 percent pace of expansion while the UK printed a record 5.6 percent contraction. And, then there are still those economies that have yet to report their numbers. Japan suffered a record-breaking 14.2 percent slump through the first quarter, but is expected to snap back according to BoJ and Cabinet officials. The Euro Zone awaits it August 13th release, but the Bundesbank has already stated Germany saw only a ‘slight contraction’ through the second quarter. This will increasingly become a consideration of nuance.

The other facet of the US 2Q GDP release is that it will be accepted as a gauge of global growth. This further complicates the issue. Should the reading be good, the influence on risk appetite could outweigh the implications for US returns and actually drag the dollar down; and vice versa. Another important consideration is the timing of this release. Due Friday, speculators may decide to move the dollar before the data crosses the wires. If this is the case, the GDP report could factor into long-term projections but not short-term volatility. –JK

The Candlestick Pattern - A Profitable Forex Trading Strategy

Is the candlestick pattern a profitable Forex trading strategy? Candlesticks patterns were first used in Japan five centuries ago in the Dojima rice exchange. Today, it has become a popular tool for foreign exchange traders to predict currency trends. The system provides data on past and present trading patterns that are used in forecasting movements of various currencies.

The Forex market is a good source of income for people who know how to accurately read currency trends. Because of numerous Forex software and programs that are readily available nowadays, more and more people are given the opportunity to engage in foreign exchange trading. One of tools that have helped people earn money in the currency market is the candlestick pattern.

Before employing candlestick pattern trading, aspiring traders must first know enough about it. There are many kinds involved here and choosing the right one needs some thought. But for the many that are already into candlestick trading, he 30-minute candlestick chart seems to be the best of the lot and they counsel that before engaging in a trade, one must see to it that the pattern has been completed. There is danger in going ahead without getting the final picture first.

There is what traders call the engulfing candlestick patterns. This pattern is considered more reliable than others and the most profitable to use. The term "engulfing" refers to a market situation where the current candle engulfs the previous one. The engulfing patterns consist of the bearish engulfing and bullish engulfing patterns. Both patterns can tell traders which direction a currency will most likely to go after the pattern is completed. The engulfing bullish patterns form when price levels of certain currencies are at their lowest points while bearish patterns will occur when the prices are at their peak.

How does one effectively use candlestick patterns to increase chances of earning? The engulfing patterns actually tell what currencies are on the downward or upward trend, which can provide a trader an accurate idea of when to trade. The best times are when there are strong indications that the trend is running its course. The trend may not be that strong but the candlestick chart must provide evidence that the trend is definitely coming to an end. In this case, the candle will have grown smaller.

What exactly do traders need to see in the candlestick pattern that will let them start trading? When traders see an up candle engulfed by a down candle immediately following it, it means that there is an upward trend and a short trade is advisable. The downward trend works under the same principle.

A profitable Forex trading strategy using candlestick patters entails timing and analysis, but it can certainly make money for traders.

What is Search Engine Marketing?

What is search engine marketing? It is a global term that refers to all the different ways you can market a site on the zillion or so search engines out there. In truth, it is a catch all term for most people who know they should probably have a website, but not much more than that. It is like walking up to a real estate agent and saying you need a house.
f you have a business, you need a site. If you have site, you must need search engine marketing. Logically, this makes sense. In the practical world of internet marketing, however, search engine marketing is a very broad term. It encompasses a wide variety of things.

When most people use the phrase, they are really saying something else to a marketing company like ours. What they are saying is I need exposure for my site. I need to get people from the search engines to my site. Most important, I need them to buy. If this is your general thought process, you are thinking along the correct line of thought. There is, however, a problem.
Search engine marketing has a number of distinct areas. The problem, of course, is most sites should only use a certain type of search engine marketing. The role of a good search engine marketing firm such as ours is to identify those areas, explain why they should be used and successfully carry out a campaign for your site.

In general, search engine marketing is just a catch-all phrase that really means very little. If you are considering marketing for your site, make sure to get a more detailed understanding of what you are getting into and why you should do so.

What Is The Foreign Exchange (FOREX) Market?

There is a lot to discover about the foreign exchange (forex) market and you will need to understand how it works if you plan to take practical steps towards becoming a successful forex trader.

You will come across several different terms for the forex market. Forex and fx are both short ways of saying 'foreign exchange'. It may also be called the currency market, the foreign currency market, the currency trading market, etc. All of these terms refer to the same international market on which the currencies of the world are exchanged and traded.

The forex market is not situated in one particular place. Practically every country is involved so there is a possibility of trading currencies in most countries. Because of this, the market runs 24 hours a day, five days a week. The week starts on Monday morning in Sydney, Australia (that is, 5 pm Sunday EST in the USA) and ends at 4 pm EST on Friday in New York. During that time it is always possible to trade currencies somewhere in the world.

The forex market is a surprisingly recent phenomenon. Up until the 1970s, currencies had been stable relative to one another since the second world war. What was called the 'gold standard' gave every currency a value in relation to the US dollar. This system was introduced in order to maintain a stable world economy.

However, in the early 70s the USA abandoned the gold standard and the values of the different currencies began to change. Banks immediately began to exchange currencies for profit, buying low and selling high, instead of only making exchanges when they needed to transfer money from one country to another. In effect, each currency became a tradeable commodity. This was the beginning of forex trading.

The value of a currency is, in a sense, the value of the nation whose currency it is, so just like companies on the stock exchange, if a nation is successful the value of its currency increases and if it is going though a crisis the value drops. These fluctuations can be great and can happen very fast. The sums involved can be huge too. The total value of transactions on the forex market now averages almost $2 trillion dollars a day.

The market is still dominated by international and investment banks, major corporations and other large financial institutions. However, it is possible to trade as a private individual through a broker and with the rise of the internet this has become much more popular. There are now a large number of people involved in forex trading through their home computers, although because they trade much smaller amounts than the institutions, they only account for around 2% of the total forex market.

The most common exchanges involve the US dollar against other currencies (especially the euro, British pound, Japanese yen, Swiss franc and Australian dollar) but it is possible to trade any one currency against another. Many of the automated forex robots used by individual traders concentrate on lesser pairs such as the pound against the euro.

The foreign exchange market is huge and an individual trader can feel like a tiny ant dodging around the feet of elephants. But anyone can get into it if they have a little capital that they are willing to risk. Some brokers will let you start with as little as $250. Before investing any real money, however, it is best to practice with a forex demo account while you learn the foreign exchange basics.

What Are Pivot Points in Forex Trading?

You may hear that one of the handier tools in a forex trader’s toolbox is a pivot point calculator. Pivot points are one of the commonly used triggers for trading systems. If you’re new to the forex market, though, you may be foggy on exactly what pivot points are and what they can mean to your trading.

In a nutshell, pivot points are exactly what they sound like – the point at which the market is expected to turn – if it’s been going down, a pivot point is the value at which it will reverse the trend and begin to climb. If it’s been rising, then the pivot point is where the sentiment of the traders will turn and begin a downward trend. Obviously, being able to predict major movements in the money market is a valuable skill, since it hints at the where the market is moving and whether or not this is the time to trade or stick.

Pivot point trading is an especially popular method of mapping out a trading strategy. It was originally used by floor traders in the stock market who liked it because it allowed them to gauge where the market was heading with just a few simple bits of information and calculations. By knowing the high, low, opening and closing points from the previous day, they could calculate a point at which the market had ‘turned’ to head upward or downward. Pivot points can help predict where the market is going – and coupled with the resistance and support points, give you an idea how far in that direction it will go.

There are a number of ways to calculate the pivot points for the day, but the most common – and easiest – is to average the opening, closing and high points for the last day’s trading. There are other pivot points that can be calculated from those numbers as well. Before we talk about how to calculate them and what they mean, let’s define a few terms:

Pivot point – the point where the market reverses a current trend

Resistance – A high point in a market chart that recurs regularly. Generally, it’s the point where the market (or currency) will begin a downturn

Support – A low point in the market chart that recurs regularly. Generally, it’s the point where the market (or currency) will begin to climb back up.

Traditionally, support and resistance points are difficult to break through. Most of the time as the numbers approach that level; there will be a slight rebound in the other direction. An interesting phenomenon is that once a resistance or support point is broken, it tends to switch sides – a broken resistance will often become a support for prices on the other side of the line.

The most common calculation for arriving at a pivot point is:

Pivot: (High + Close + Low)/3

Resistance: 2 * Pivot – Low

Support : 2 * Pivot – High

USD/EUR Date:02/03/06 14:40 O=0.83174 H=0.83188 L=0.83167 C=0.83188

Given this data for Feb 3, 2006, the pivot points for Feb 4, 2006 would look like this:

Pivot: 0.83180

Resistance: 0.83193

Support: 0.83172

Those numbers give me some points on which to base my strategy for the day. If the market opens above the pivot point, it’s a bull market, and most advisors would go for long trades, since the direction of the market is up. If it opens below pivot, it’s time to favor short trades and quick sales.

There are two common sales strategies using pivot, resistance and support points.

Breakout Trade: When a currency pair breaks through a resistance or support point, there’s usually a surge of activity around it. Buy if the charts show a break through a resistance, sell if the rate drops below a support point.

Pullback Trade: When the exchange rate drops back from a high, most traders will buy, based on other information that’s available. It’s a tricky move, though, since the pullback could just be a temporary pause in the upward momentum, or the beginning of a downward rebound.

Using pivot points to inform your strategy in day trading is a complex subject. You’ll find a great deal written about it by various gurus and experts. These basics can help you understand what you’re reading from them.

Top 10 Forex Trading Tricks: You Won’t Lose

The foreign exchange market or forex is the largest and most liquid markets in the world. Its growing popularity can be seen by the whooping $2 trillion trades a day. While the forex can be an extremely lucrative market, it can also be somewhat complicated. These ten tricks will help insure trading success in the foreign exchange market.

First, make sure you implement a trading plan. You should develop a foreign exchange trading system that you can stick with. Having a decent strategy is not enough you need a well-developed system to effectively implement your strategies. You should start by creating a schedule of when you will do your Forex trading. Next create on organized budget to keep track of the inflow and outflow of your money. It’s important to understand that Forex trading, like any business venture, will have its peaks and slumps. You should be prepared to stick to your system despite these fluctuations to maximize profits in the long run.

Second, make plans to trade within your means. Quite simply, if you cannot afford to lose, then you really cannot afford to win either. All traders hope that the will be profitable in their investments, but losing at some point is inevitable. For this reason it is important that you invest only money that you could stand to lose. Try setting aside some saving that you can dedicate just to trading.

Another helpful hint is to trade along side the majorities. This means trading mainly on the most common currency pairs. The most common currencies are the United States dollar, USD, the Japanese yen, JPY, the European Euro, EUR, the United Kingdom pound, GBP, the Australian dollar, AUD, the Swiss franc, CHF, and the Canadian dollar, CAD. The most common pairs of currency are referred to as majors and are GBP/USD, EUR/USD, AUD/USD, USD/JPY, USD/CHF, and USD/CAD.

Another way to insure success is to avoid emotional trading. Stick to you trading strategy and do not deviate because of gut feelings or hunches. Learn to exit the market when signals indicate that the market is about to swing in an unfavorable direction.

Learning to trust the trends is another important trick. Although currencies will always fluctuate slightly, they generally move steadily in one direction. If you are not sure on where to position yourself in the forex, following a trend is usually a safe bet.

Next, you should anticipate small losses. Know matter how well you know the market or how long you have been a trader you will probably encounter small losses. You need to expect and accept these losses as small components of a larger plan. Be ready for these small losses and put them aside in anticipation of acquiring greater returns in the future. The key to long-term success in the Forex market is patience.

Another helpful hint for traders is to avoid Forex strategies that you do not understand. You should do your research ahead of time and draw on the information from useful Forex guides and tutorials. It is important to be cautious of Forex scams. There are numerous scams popping up where companies offer to do your trading for you, these are the ones you should avoid. You should develop your Forex methods with an expert and only make trades on your own or through a licensed broker. The bottom line is making sure that you are fully aware of all aspects of your strategy and are comfortable with the risks and benefits.

Next, make sure you have an exit strategy planned out. Though you should expect small losses, you need to be able to recognize when you are in to deep. Before you jump into the Forex market you should set yourself limits on how much you plan to invest. One you determine the amount that you plan devote to your Forex trading do don’t surpass you limit. Be able to cut you losses once you realize the situation will not get better.

Traveling Geithner displays optimism

Jul 14, 2009 (The Washington Times - McClatchy-Tribune Information Services via COMTEX) -- Treasury Secretary Timothy F. Geithner is using a trip to Europe and the Middle East this week to shore up confidence in the U.S. economy and the dollar, though he warned Monday the struggle against the global recession is far from over.

"In my view, there are still significant risks and challenges ahead," Mr. Geithner said at a news conference in London after talks with British policymakers, including Prime Minister Gordon Brown and Chancellor of the Exchequer Alistair Darling. "We have done a great deal domestically ... but there is a lot of uncertainty."

Mr. Darling agreed "there's a lot of uncertainty in the world" regarding the state of the global economy.

But Mr. Geithner and British officials said that the United States and its economic partners have responded well to the financial crisis that nearly crippled world markets last fall.

"I think we have remarkably strong consensus in place on core elements," Mr. Geithner said.

Mr. Darling predicted "there is a very good chance" that the United States and world economies will recover and have sustained growth during the next few quarters.

"We are making progress, we are coming through," he said.

Mr. Geithner traveled to Saudi Arabia on Monday and later this week will visit the United Arab Emirates in an attempt to reassure the Persian Gulf state leaders that the U.S. dollar assets they hold in large quantities remain a sound investment. The two nations are the Arab world's two largest economies.

Mr. Geithner also will meet with French officials in Paris later this week before returning home.

There has been increasing talk in recent days that the dollar's long hegemony as the world's reserve currency could be under threat, with officials in China and Russia among those hinting that a new reserve currency should be considered.

But Mr. Geithner told CNN in an interview broadcast Sunday that the U.S. dollar's role as the world's reserve currency is not likely to weaken because global investors will continue to use it as a safe haven.

"When people are most concerned about risk, generally they want to be investing in the most liquid and safest markets in the world, which is still the market for our Treasury bills," Mr. Geithner said. "We want to be sure we can maintain that basic response."

The secretary on Monday addressed concerns on Wall Street that the federal government so far has ignored pleas for financial aid from CIT Group, a New York-based lender that is facing a possible financial collapse.

CIT's bond and share values have tumbled in recent days out of concern that the Federal Deposit Insurance Corp. has not allowed the lender to participate in its bond-guarantee program created last year to unfreeze debt markets.

"I'm actually pretty confident [that] in that context, we have the authority and the ability to make sensible choices," he said. "We have a significant interest generally in trying to make sure the financial system gets through this [crisis], adjusts where it needs to adjust and emerges stronger.

But Mr. Geithner declined to say if CIT will receive any additional money from the $700 billion Troubled Asset Relief Program.

"Obviously, in that case, as always, we're watching closely developments in those markets," he said.

Following Mr. Geithner's meeting in London, the British Treasury announced it will host a two-day meeting of finance ministers and central bankers of the Group of 20 nations in London starting Sept. 4.

The gathering will precede a late September meeting Mr. Obama will host in Pittsburgh of the G-20 leaders. The G-20 includes the Group of Eight industrialized nations -- the United States, Japan, Germany, France, the United Kingdom, Italy, Russia and Canada -- plus the European Union and the world's major developing economies.

U.S. budget deficit surpasses $1 trillion

Jul 14, 2009 (The Washington Times - McClatchy-Tribune Information Services via COMTEX) -- The U.S. budget deficit topped $1 trillion in June -- with three months still to go in fiscal 2009.

The Treasury Department reported Monday that the budget deficit for the first nine months of fiscal 2009 totaled $1.086 trillion. The deficit for the first nine months of fiscal 2008 was $286 billion, en route to $459 billion for the full year, a nominal record that has been smashed this year.

During the first nine months of the fiscal year, the federal government borrowed more than 40 cents for each dollar it spent.

"This is the first trillion-dollar budget deficit in world history -- that is $8,500 per household borrowed from our children and grandchildren," said Brian Riedl, a budget analyst at the Heritage Foundation.

"Under the Obama budget, America would borrow $9 trillion more over the next decade. These trillion-dollar deficits will become as routine as the high interest rates, steep taxes and economic stagnation they bring," Mr. Riedl said.

Last month's deficit of $94 billion was the first budget shortfall in June in more than 10 years, said Douglas Elmendorf, director of the Congressional Budget Office.

The evolving deficit confirms "how serious the economic downturn is," said James Horney of the Center on Budget and Policy Priorities. Revenues plunged and safety-net spending -- from unemployment benefits to food stamps and Medicaid -- increased, Mr. Horney explained. So, too, did spending to rescue the banking system and Fannie Mae and Freddie Mac, the mortgage-financing giants that were taken over by the government in September.

"Unfortunately, given the situation, the deficit is unavoidable. To reduce the deficit now would be counterproductive to the economy," said Mr. Horney, who added that the long-term budget imbalance must be addressed.

Compared with the October-June period of fiscal 2008, during the first nine months of fiscal 2009:

--Revenues plunged $345 billion, or 17.8 percent;

--Spending soared $455 billion, or 20.5 percent;

--Defense spending increased 7.5 percent to $474 billion;

--Spending on food stamps increased 36.8 percent to $40 billion;

--Medicaid spending increased 23 percent to $186 billion;

--Unemployment benefits increased 165 percent to $77 billion;

--The Troubled Asset Relief Program, which began in October, has cost taxpayers an estimated $147 billion;

--Bailing out Fannie Mae and Freddie Mac has cost $85 billion.

Both the Obama administration and the nonpartisan Congressional Budget Office project that this year's deficit will total about $1.84 trillion. Even adjusted for inflation, that deficit level is three times larger than any annual deficit incurred during World War II, according to budget documents.

The economy during the 1940s, of course, was much smaller than today's. This year's projected deficit of $1.84 trillion represents nearly 13 percent of gross domestic product. In fiscal 1943, the nominal budget deficit of $55 billion totaled more than 30 percent of GDP.

In January, before President Obama took office, the CBO estimated that the budget deficit for fiscal 2009, which was already more than three months old, would approach $1.2 trillion.

Since then, the economy deteriorated more than expected, causing revenues to plunge more steeply. In addition, the administration's multiyear $787 billion economic-stimulus package, which was enacted in February, added $185 billion to the 2009 deficit, according to CBO estimates.

The administration's May forecast, which will be updated later in the summer, projected a $1.26 trillion for fiscal 2010, which begins Oct. 1. That includes $399 billion in stimulus, 45 percent of which will be tax cuts, according to CBO estimates.

Forex Statistics

Once you become somewhat familiar with how the forex market works, and you understand to a point what is involved in trading on the Foreign Exchange Market, you would want to start to gauge market trends in order to profit from your business ventures on the open market.

The name of the game is statistics, and the first rule is that you must be aware there is no such thing as a sure thing on the forex market. While you can never be 100% sure at any given time of the next move that will be made on the market as a whole, being able to read statistics and interpret them will place you ahead of the pack in regards to "guessing" what will happen next.

Forex trading is a lot like gambling. If you can keep track of the cards that have already been played, you are more informed, statistically, regarding what is likely to be dealt next, meaning you can place a bet with greater insight than someone who has no clue what has already been played. With the forex market, if you have information as to what has already occurred over the past few days, months, or even years, you are again placed in a better position to more logically conclude what will happen next. You simply learn the pattern and follow it to the end, reaping the financial rewards.

Charts And Chartists

Wait, did you think you were going to have to research and map out the market's past all by yourself? Of course not! There are people who get paid to do that sort of work. They monitor the market hourly, daily, weekly, monthly, and yearly so that they can provide big-time traders with the same knowledge mentioned before. The more a trading company knows about the market, the more money they can make.

The best part of this is that you have access to the same information as these VIP clients. Chartists, who are essentially market analysts that publish their findings in easy to read charts, produce what is referred to as a candlestick charts. These charts are basically a combination of a line graph and a bar graph that show the trend of various stocks, indexes, or other interests over a specified period of time. Therefore, you can easily determine if the currency is on an uptrend or if it is taking a downturn, when the last major change occurred, and how long it is predicted that the currency pair will continue on the current path.

If your broker does not supply you with these charts, then you should easily be able to draw them yourself with the modern day charting software or trading platform that you get from your broker. These software platforms can draw most charts for you by entering a couple of parameters and viewing the result.

It is recommended however that you learn at least the basics of charting and statistics before you start trading live.