Four points to always remember in the back of your mind.(Global Market Update)

1) EURO Zone will spilt or there will be serious disagreements among the members during the next five years.

2)Dollar will make historic highs against Pound and Euro in the next three years.

3)Stock, metals and energy markets currently looks very uncertain until 27 May, notably alternative energy stocks, will enter in its most unique era in the Wall Street history.

4)Rand(ZARUSD) will enter into a hugely negative period from mid June and I see Rand going back to 13.00 against USD by end of 2012.

One surprising point is here – compared to USA market fall, all other markets will fall even more although the Goldman charge originated from USA. Japan, Hong Kong, India, China and all major European market will crack big.

More Downside Pressure Expected on Euro versus US dollar.

After a strong up a couple of weeks ago the EURUSD pair has meandered over the last week. Greek hopes and worries dominated the Euros trading in the last week. The Euro had the best weekend gap, starting above 1.36 and almost reaching 1.37 last week. After it dropped and closed the gap on Friday. The Greek troubles aren’t over yet.


After starting the week with an impressing weekend gap (after releasing the news of Goldman Sachs scandal) Greek Finance Minister Giorgos Papakonstantinu said Greece’s talks with the European and IMF officials on a potential aid package will last two weeks and a joint text will then agreed by May15. He also said “rumours about restructuring pf debt are nonsense”. Axel Weber, the President of the Bundesbank is not only an influential member of the ECB,but the leading candidate to replace Jean-Claude at the top position. He said to the group of German lawmakers that Greece may require financial assistance of as much as 107.92 billion dollar to escape its debt crisis and avoid default.

The European Union said Greece’s budget deficit last year was worse than it previously forecast and could top 14 percent of gross domestic product as “off-market swaps” cloud its estimates. The EU’s statistics office said today Greece’s deficit was 13.6 percent last year, higher than the governments April 7 forecast of 12.9 percent. Greek bond yields have surged to the highest in more than a decade. Also in near term the Euro has the selling pressure because the widening of the Greek 10-year bond or German Bond spread to 500 basis points.

On Tuesday the German PPI data was released at 0.7 percent while the forecasted value was 0.5 percent. German Producer Prices took a break and remained unchanged last month. After two months of surplus, Europe’s current account, consisting of good trade balance ,services and money, fell into a deficit of revised 1.7 billion last month. This deficit was actually 3.9 billion and 5.3 billion was the market consensus. From the past six months, the German ZEW economic sentiment has been on the fall, hurting the Euro all the time. Previously it was 44.5 points; the released data was 53 points which had a small impact on the Euro.

French Flash Manufacturing PMI is released with value of 56.7 points. The services sector is somewhat lagging behind, in Europe’s second largest economy. According to German Flash PMI, the Europe’s largest economy enjoys a strong manufacturing sector. The services sector was released to advance from 60.2(revised) to 61.3 points. All European Flash PMI rose from 54.1(Revise) to 55.5 Points. All the numbers are above the critical line of 50 shows positive economic expansion.

Today, the President Mr. Jean-Claude Trichet of the ECB might comment about the situation of debt-struck countries and might also say something about the stagnant economy.Tomarrow there are three main economic indicators called German Ifo Business Climate ,this is the second major survey from Germany. The data is expected to rise from 98.1points to 98.9 points. The data is the highest in almost two years. There is another data, which is going to be published on Friday called Industrial New Orders, the data is expected to fall from 1.6 percent to 0.9 percent.

As a technical point of view, the EURUSD has a support at around 1.3109 - this was the low of last year in May (that is May18, 2009)and the second support at 1.2959 .On the other hand, the EURUSD has a resistance level at 1.3423 which was the high of March 26, 2010.The second resistance for EURUSD is at 1.3493.
Have A Great And Profitable Trading Day.........

Canadian Dollar (Loonie) becomes stronger versus US dollar. (USDCAD)

USDCAD was declining from 1.0777 (that is 5 Feb, 2010) as compared to the low of 0.9985 last week. Because of the higher prices of commodities the Canadian dollar rose to parity with the greenback last week. The Canadian dollar fell sharply because of the disappointing employment report which was showed the Canadian economy added 17,600 jobs as against expectations of 26,000. After released this data last week, the USDCAD has settled into declining channel.


Rising prices of commodities and oil prices, the Canadian dollar has crossed parity with the US dollar for the first time from last two years.Becuase commodities and crude from bulk of Canadian economy and its exports. As the commodities and oil prices rise the investors think that the US greenback will strengthen on positive economic news.

The Canadian dollar had hit the historic high of 1.10 percents US against the greenback in the year of 2007.Then it had dipped more than 75 percents US last year as the global crises deepened.

On Monday last week, the Bank of Canada’s quarterly business outlook survey said that companies on balance expect sales to pick up and they are planning to boost investment spending and hiring. Canadian Finance Minister Jim Flaherty said the rise by the Canadian dollar has been “relatively orderly” and business has been able to deal with its climb to around parity with the US dollar. Canadian housing starts were at a rate 197,300 in March, down from revised 200,400 in February, while economists expected 200,000.

Statistics Canada Tuesday reported that Canada’s merchandise exports rise 2.8 percent in February, on the strength of industrial good materials. The Canadian dollar to its strongest level in 22 months against the US dollar. Economic optimism and expectations forecast the Bank of Canada could begin raising rates as early as June.

Today, the US released report on initial jobless at 484,000 (earlier 460,000) which was above the expected 439,000.This is positive for US dollar and negative for the loonie.

On technical point of view, The USDCAD having support at 0.9972 levels. The next support of USDCAD is 0.9820, which was the low of 29 May 2008.The resistance of USDCAD is around 1.0065 and the second resistance is at 1.0105 which was July’s 2008 high.

Characteristics of Successful Traders

Successful traders have absolute control over their emotions; they never get too elated over a win and too depressed over a loss.


Successful traders seldom think of prices too high or low.

Successful traders do not panic; they make adjustments rather than revolutionary changes to their trading style.

Successful traders do not flinch at making the decision to take a loss, they never let loses ride and never add to loosing trades.

(One old trader told me he thought his positions like stock in a store. If something sells it's making you money and you add to that line, if something does not sell it is losing you money so you discount and unload it).

Successful traders treat trading as a business not a hobby.

Successful traders stay physically fit.

Successful traders are prepared for all eventualities on any given trading day. They come to work with a plan that includes many contingencies and not what they just hope will happen.

In your trading program you should therefore have answers to the following what if:

prices open sharply higher or lower?

The market is quiet?

The market is very volatile?

The market makes new highs?

The market makes new lows?

The market goes up early then reverses later?

The market goes down early then reverses later?

The successful trader only trades with money he/she can afford to loose.

Trading can result in substational looses. It is also exciting, exhilarating and can be very ADDICTIVE. The more you are emotionally involved in your money, the harder it will be to make objective decisions about market entry and exit.

Successful traders spend as much time focusing on money management as they do on trading methods.

YOU DO NOT HAVE THE PROFILE OF A SUCCESFUL TRADER IF YOU DO NOT HAVE AT LEAST SOME OF THE ABOVE TRAITS.

Successful traders keep a low profile.

Successful traders listen to the markets. Unsuccessful traders try to impose their will on the market.

Have A Great Trading Day Ahead..........

GBP/USD jumps to test monthly highs at 1.5404.

GBP faces risk of a decline towards its 2010 low at 1.4789 having weakened for a second consecutive week. GBPUSD pair declines from the 1.5389 level (March 17 2010 high) to the level 1.489 level.

This week, the British Pound expects a busy week, with the rate decision being the peak. After the weekend break, the opening price of GBPUSD almost lost the ground level after Friday’s US Non- farm payroll report was released. This data increased by 162,000 in March, and the unemployment was held at 9.7 percent, the U.S. Bureau of Labor Statistics reported.

The Chartered Institute of Purchase and Supply/Markit construction PMI index jumped from 48.5 to 53.1last month in February. Sarah Ledger economist at Markit said increase in March PMI data indicates the growth of activity within the UK construction sector. This kind of growth in construction sector in March took place for the first time in more than two years. This was supported by rising new orders, as private sector demand increased. After this report the Pound goes down. Cable spun lower after Prime Minister Brown called for a general election on 6 May and Parliament was dissolved.

On Wednesday, the major data was released in regards to the British Pound called Services PMI; the services sector is doing quite well but shows weaker data than expectations–purchasing managers expecting the economic expansion. Previously it was 58.4, the actual was 56.1 (less than forecasted -58.1) .It resulted in some selling pressure on GBP.

 Today there are four major economic indicators going to be published, which are very important for the British Pound. The first data called Halifax HPI, House Price Index data shows it was previously -1.6 percent and actual is 1.1, which is more than forecasted (forecasted 0.6 percent).The second data called Manufacturing Production m/m, last month it was dropped by 1 percent and now it is 1.3 percent which is more than expected (forecast was 0.7 percent).Published data is slightly positive for Great British Pound. Another data called Rate decision (it involves Official Bank Rate, Minimum Bid Rate) was published yesterday. All the rates are published unchanged. Official Bank Rate is 0.50 percent which was same last month. The other rate was called Minimum Bid Rate released yesterday unchanged as 1 percent.(The same as the last month).It shows the economy of Britain is improving which is positive for GBP.

National Institute of Economic and Social Research (NIESR), GDP publishes every quarter. This release will complete the first quarter of 2010 and is expected to show a small rise in GDP. NIESR showed a rise of 0.3 percent last time. On Friday PPI(British Producer Price) will be published. In this indicator the PPI input forecasted rose from 0.1 percent to 1.2 percent.PPI output expected to rise from 0.3 percent to 0.4 percent.

As per the chart showing the support for the GBPUSD is at 1.4789 which is the lowest of 2010.The next support at 1.4539 which was the low of last year (April, 2009).On the other hand the resistance is at 1.5404 which was the strong resistance of the last year (January, 2009).

EUR/USD bounce from 1.3383, reaches 1.3517 sessions high.

The US Dollar finished the last week as the top performing G10 Currency, staging against the Euro. The G10 currency is a listed 10 Euro-based Currency ETCs, (Exchange Traded Commodities),providing long or short exposure to the EUR versus G-10 Currencies. The Euro continued strengthening after the announcement of the ECB to help for Greece. Now a day, euros movement is totally depend on the performance and progress of its weakest member: Greece.


After the European Union agreed to support Greece in the crucial situation. The Greece Raises $6.7 Billion in Bond Sale. The bond, worth $ 6.7 billion, was priced to yield 6 percent .After this news, the EURUSD gone up from 1.3412 to 1.3510 on Monday. But one point to note that the one day‘s advance does not make a sense to decide that now the Euro is at a bullish mode. The ECB’s Lorenzo Bini Maghi commented on the current situation for bailout of Greece. He does not see any good impact in the economy because of giving a bailout package to the Greece. On Monday 29 March 2010, the Euro enjoyed a bounced back rally on short covering for the most of the day. Also, the US February Core PCE stayed unchanged at 0.0 percent, lower than the forecasted 0.1 percent. It was negative for the US Dollar as against the Euro.

On Tuesday, Euro zone economic data was increased more than expected in March. After published this news, the euro was falling sharply against the dollar.

Looking forward to Wednesday, the major important data is called ADP Non-Form Employment. The data dropped unexpectedly in March from the previous month.

According to the data processing firm ADP, this job data was decreased by 23000 from February to March on a seasonally adjusted basis, according to the ADP National Employment Report. Most of the Economist had expected an increase of 40,000 jobs, it failed their expectations. Following to the release of this data, U.S dollar sharply down against the euro, with EURUSD up 0.75 percent, trading at 1.3505.

Currently, the EURUSD having its support at 1.3381and if it breaks this support level with a heavy volume then the next support is at 1.3265.The EURUSD touched these two support level last year in April. On the other hand, the resistance for EURUSD is at 1.35431, which was crossed the same level last year.

Dipak Sharma

sdipak83@sify.com