FOREX Daily Xnalytics 111011

8/3/2019 FOREX Daily Xnalytics 111011

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Euro Rose On Plan To Recapitalize European Banks

EUR-USD 4

GBP-USD 6

USD-CHF 8

USD-JPY 10

AUD-USD 12

PERFORMANCE 14

ABOUT THE AUTHOR 16

Inside this issue:

K N O W L E D G E I S P O W E R

Tuesday, 11 October, 2011

The Euro rose the most in more than a year against the Dollar after French and Germanleaders pledged to deliver a plan to support banks and repeated a commitment to keepGreece in the Euro bloc.

The US Dollar dropped against all of its major counterparts as global stocks advanced.

German Chancellor Angela Merkel and French President Nicolas Sarkozy said in Berlinyesterday they have given themselves three weeks to devise a plan to recapitalize banksand find a durable solution for Greeces debt load. Currencies of commodity-exportingcountries rallied as raw materials gained.

EUR-USD settled up 2 percent at 1.3641 and gained as much as 2.4 percent, the mostsince July 2010. It traded as high as 1.3698, the strongest level since Sept. 21. EUR-JPYrose 2 percent to 104.61 with the USD-JPY little changed at 76.68.

The Euro remained higher as the ECB is opposed Germanys push to rewrite theEurozones 12 week-old-rescue plan as leaders prepare the ground for a potentialGreek default. European leaders will deliver a plan by the Group of 20 summit meetingon Nov. 3.

The Euro also advanced as Belgium agreed to buy the local consumer-lending unit ofDexia SA, ending a 15-year cross-border experiment with France after the European

debt crisis deepened. Belgium will pay 4 billion ($5.5 billion) for the division andguarantee 60 percent of a so-called bad bank to be set up for Dexias troubled assets.

The Euro stayed higher even as a report showed European investor confidence fell to thelowest in more than two years. An index measuring sentiment in the euro region declinedto minus 18.5 in October from minus 15.4 in September. Thats the lowest since July2009.

GBP-USD was 0.7 percent stronger at 1.5666. An index of consumer sentiment abouthiring prospects in the U.K. fell 1 point to minus 67 from August, taking its decline over

the third quarter to 17 points.

The Swiss Franc strengthened against the Euro by the most since Sept. 5, the day beforethe SNB imposed a ceiling of 1.2000 versus the Euro and resumed purchases of foreigncurrencies to curb the Francs advance. The Franc rose 0.6 percent to 1.2326 per Euroand was the best performer among the major currencies.

According to the private-banking unit of JPMorgan Chase & Co, the SNB may raise itsceiling for the Franc to 1.3000 per Euro from 1.2000 per Euro.

Australian Dollar advanced beyond parity with the US Dollar to the highest level sinceSept. 22, rising to as much as 1.0013.

Overall, the currency markets are still being driven by expectations that the Europeandebt crisis will be cleaned up quickly and efficiently, any headlines to the contrary couldcause a major shift in sentiment.


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Tuesday, 11 October, 2011

Economic Calendar

Gold rose to $1677.70 per ounce - a 2% gain on last Friday's close - while stocks and commodities also gained andgovernment bonds fell following a pledge by France and Germany to recapitalize Europe's banks. Silver rose to $32.03 -32.8% up on where it ended last week.

The leaders of France and Germany announced Sunday that they will have a new plan to deal with the ongoing Eurozonecrisis within the next three weeks. While a detailed plan was lacking, traders view any progress on bank recapitalization asa positive for gold.

France reportedly wants to use funds from the European Financial Stability Facility - the Eurozone's 440 billion bailoutfund - to recapitalize French banks. Germany, however, is said to view such a step as a last resort.

Franco-Belgian banking group Dexia agreed this morning to the nationalization of its Belgian division by that country'sgovernment. The Belgian government will buy Dexia Bank Belgium for 4 billion. It has also pledged to guarantee 90billion of Dexia's borrowing over a period of ten years - the equivalent to around a quarter of Belgium's GDP last year byInternational Monetary Fund estimates. Ratings agency Moody's warned on Friday it may cut Belgium's credit rating. Fellowratings agency Fitch meantime downgraded both Italy and Spain.

Over in China - the world's second-largest source of private gold bullion demand - sales of gold during last week'sNational Day Golden Week "were 50% higher from a year earlier". The October Golden Week is also traditionally apeak period for real estate demand. Data taken from 20 major cities however show home sales last week were 23% downcompared to a year earlier - making it the worst in six years. Shanghai saw a 40% drop. But most developers were still notwilling to cut prices beyond marketing gimmicks, hoping for the government to loosen monetary policy tightening measuressoon.

China's central bank has raised its interest rates five times in the last 12 months - while increasing commercial banks' reserverequirements nine times. The annual rate of consumer price inflation fell to 6.2% last month - down from 6.5% in August.

In New York, the net long position of bullish minus bearish Gold Futures and options contracts held by non-commercial - or'speculative' - traders on the COMEX rose2.2% in the week ended October 4, to the equivalent of around 505 tonnes ofGold Bullion, according to data released by the Commodity Futures Trading Commission on Friday. This follows the previousweek's fall of 20%.

The gross tonnage of gold held to back shares in world's largest Gold ETF the SPDR Gold Trust in contrast fell by just 1.8%in the two weeks ending October 4. Gold ETF stocks have changes only minimally, contrasting this with the fall in speculative

Gold Gained On Europes Banks Recapitalization Talk Optimism


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Tuesday , 11 Oc tober , 2011

All Eyes On Dexia

The leaders of France and Germany have announced that they are ready to recapitalise Europes troubled banks and have

reached agreement on a "long-lasting, complete package" to counter the blocs debt crisis. But the German chancellor andthe French president refused to go into detail about the plans. The announcement came hours after the governments ofFrance, Belgium and Luxembourg said they had approved a plan for the future of the embattled Franco-Belgian bankDexia.

Both leaders were tight-lipped on whether they had decided that the 440 billion bailout fund, the European financialstability facility (EFSF), could be used to recapitalise banksa position known to be favoured by the Frenchor whether itcould only be used as a last-ditch resort if a member state could not cope with shoring up its banks' capital on its own. Thelatter is known to be Merkel's preference, but on Sunday the chancellor would only say: "Germany and France want thesame criteria to be applied, and criteria that are accepted by all sides."

Merkel added: "We are not going into details today," adding that the duo would present a "complete package" forstabilising the Eurozone at the end of the month in time for the G20 summit in Cannes on 3-4 November. "This summit has to

be a success for the sake of the global economy," she stressed.

While Merkel and Sarkozy refused to reveal exactly what lies ahead, German media was reporting that Eurozone officialsare planning for a scenario in which investors would take a haircut of up to 60% on Greek bonds.

Merkel had been put under extra pressure to reach a speedy solution after coming under attack from the US for damagingdawdling. The World Bank president, Robert Zoellick, told a German magazine last week that there was a "total lack" ofvision in Europe and Germany in particular needed to show more leadership.

The International Monetary Fund has said banks across the continent might need up to 200 billion ($267 billion) in newcapital. The European Union disputes the IMF's estimate but has been warning that lending between banks and from banksto businesses is threatening to freeze up.

The implosion of the Franco-Belgian lender Dexia following its sizable exposure to Greek and other Eurozone sovereigndebt, meanwhile, added a sense of urgency to the talks. France, Belgium and Luxembourg announced on Sunday they hadapproved a plan for the future of the embattled bank but offered no details. France and Belgium became part owners of

the bank during a 6 billion bailout in 2008.

After Dexia's shares plunged last week amid fears it could go bankrupt, the French and Belgian governments stepped inand guaranteed its financing and deposits. The bank said in a statement on Friday that trading in its shares would remainfrozen until it could "communicate more precisely on the various choices and options concerning the future of the group". Thebank has significant exposure to Greek debt, and there are fears Greece may default in some fashion.

Finding a solution is particularly urgent for Belgium because Moody's Investors Service placed the country's Aa1 rating onreview for a possible downgrade on Friday, due in part to the expected expense of guaranteeing that Dexia's depositors

will lose no money.


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EUR-USDMONTHLY

DOMINANTTREND

EUR-USDWEEKLY

DOMINANTTREND

EUR-USDDAILY

DOMINANTTREND

In the bigger picture, the fall from 1.4548 indicates that the rise from 1.1875 is completed with three waves up to 1.4940It also suggests that the rise was merely part of the consolidation pattern that started back in 2008 at 1.6039. Furtherdecline would now be seen to the 161.8% expansion target 1.4940 to 1.3969 from 1.4695 at 1.3124 which lies above a

demand zone at 1.3463-1.3522 first and a sustained break there will target 1.1875 and below.


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EUR-USD4-HOURLY

DOMINANTTREND

TRADE IDEAS

DATE OPEN HIGH LOW LAST CHANGE

10-10-11 1.3389 1.3698 1.3377 1.3641 +0.0263

Action L1 L2 Stop-Loss

Price action corrected to the 61.8% retracement level of 1.3145 to 1.3689 at 1.3481 and then some.As mentioned in the weekend update, MACD is above the zero line and unless and until it crosses backbelow, the idea that price action has resume its downward trajectory is not entirely confirmed. ADX isclimbing steadily, further suggesting the resumption of the fall 1.45475 is deferred. The immediate tar-get is the supply zone at 1.3793-1.3875. A peaking of the ADX within this zone coupled with a rever-sal signal should not be ignored as the overall medium-term bias is still favoring the downside. Pres-ently, an inside bar has appeared and a close below 1.3618 would trigger a sell signal in the 4-hourly

chart. Unless accompanied by a peaking of the ADX, this signal carries less significance.


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GBP-USDMONTHLY

DOMINANTTREND

GBP-USDWEEKLY

DOMINANTTREND

GBP-USDDAILY

DOMINANTTREND

In the bigger picture, price actions from the 2009 low of 1.3503 are treated as correction to long-term downtrend from the2007 high of 2.1161. The rise from 1.4230 is treated as the third leg of such a correction. The fall from 1.6616 isaccelerating; suggesting that the correction is completed at 1.6745 and the medium-term outlook has turned bearish for1.3502/4230 support zone. Such a move could either be the fourth leg of the consolidation from 1.3502, or the resumptionof the long-term downtrend from 2.1161. On the upside, sustained trading above 1.6745 will extend the rise from 1.4230to 1.7043 and above. Strong resistance is expected within the cluster at the 50.0% retracement of 2.1161 to 1.3503 at

1.7332 and the 100.0% projection of 1.3503 to 1.7043 from 1.4230 at 1.7770 to limit upside.


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GBP-USD4-Hourly

DOMINANTTREND

TRADE IDEASAction L1 L2 Stop-Loss

Sell 1.5631* 1.5896

Target 1.5528 1.5391


10-10-11 1.5558 1.5687 1.5526 1.5666 +0.0107

* A 4-hourly close below the trigger price means the condition is met, exit remaining long positions, if

any, and turn short.

Just as expected, price action tested last weeks high at 1.57136 and into the supply zone at 1.56356-1.56734.An inside bar had appeared in the 4-hourly chart and a close below 1.5631 would trigger asell signal. Note the peaking of the ADX. In the event that the sell signal is triggered, the immediatetarget is the 38.2% retracement of 1.5270 to 1.5687 at 1.5528 followed by the 50.0% mark at1.5479. A demand zone lies just below these levels at 1.5305-1.5391. The resumption of the fall from1.6616 is not confirmed until and unless MACD is back below the zero line. Beyond the supply zone at

1.5635-1.5673, the next target is the 38.2% retracement of 1.6616 to 1.5270 at 1.5784.


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USD-CHFMONTHLY

DOMINANTTREND

USD-CHFWEEKLY

DOMINANTTREND

USD-CHFDAILY

DOMINANTTREND

In the bigger picture, the entire downtrend from 1.1730 has likely made an important long-term bottom at 0.7067. At thispoint, the rebound from there is treated as a correction only. Strong resistance at the 50.0% and 61.8% retracement of1.1730 to 0.7067 at 0.9399 and 0.9949. Successful clearance of these levels would open up the challenge of the 38.1%retracement of 1.8309 to 0.7067 at 1.1361.


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USD-CHF4-HOURLY

DOMINANTTREND

TRADE IDEAS


10-10-11 0.9273 0.9274 0.9001 0.9035 -0.0234

Action L1 L2 Stop-Loss

Sold 0.9163* 0.9123*

Target 0.8935 0.8701

* A 4-hourly close above the trigger price means the condition is met, exit remaining short positions.

The warning of a possible reversal was right on the money. As noted, a shooting-star like bar hasappeared last Thursday, and a close below 0.9163 would trigger a selling signal and it did. Likewise,MACD in the weekly chart is just below the zero line and may be pivotal in the long-term as it lookstechnically attractive as a selling level. This is because the dominant trend in USD-CHF is still down. Alsonoted was the possibility that the retracement target at the 50.0% retracement of 1.1730 to 0.7067 at0.9399 may likely to be missed. This overnight decline is now near the 23.6% retracement of 0.7710 to0.9313 at 0.8935. It may even challenge the 38.2% retracement at 0.8701 which is above the secondtrough at 0.8646. 4-hourly MACD is now below the zero line accompanied by a rising ADX confirming

the validity of this sell signal.


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USD-JPYMONTHLY

DOMINANTTREND

USD-JPYWEEKLY

DOMINANTTREND

USD-JPYDAILY

DOMINANTTREND

In the bigger picture, price action is still staying well inside the falling channel that started back in 2007 from 124.12. Thereis no indication of a trend reversal yet even though medium-term downside momentum is diminishing with bullishconvergence condition in weekly MACD. The long-term downtrend is still in favor to continue to towards the 70.00psychological level. In any case, sustained break of the 80.22 high is first needed to indicate the completion of the fall from85.51. Secondly, sustained break of 85.51 is needed to be the first signal of the medium-term reversal. Otherwise, the long

-term outlook remains bearish.


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USD-JPY4-HOURLY

DOMINANTTREND

TRADE IDEAS


10-10-11 76.78 76.84 76.56 76.68 -0.04

Action L1 L2 Stop Loss

Bought 77.21 75.64

Target 77.36

Price action is still flat-lining within its old range trading of between 76.00 and 77.00. The 4-hourlyADX is once again showing initial sign of picking up; suggesting lower prices ahead. At the momentMACD is pivoting along the zero line; maintaining its neutrality. In the long-term, there is no change tothe medium to long-term view that price actions could be heading towards the 161.8% projection of85.51 to 79.56 from 82.22 at 72.59 eventually. On the upside, the immediate hurdle is the minorsupply zone at 77.36-76.79; above which lies the 50.0% retracement level of 80.22 to 75.95 at

78.08.


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AUD-USDMONTHLY

DOMINANTTREND

AUD-USDWEEKLY

DOMINANTTREND

AUD-USDDAILY

DOMINANTTREND

In the bigger picture, the rise from 0.8065 is probably completed with bearish divergence in the daily MACD at 1.1078.However, price action is staying well inside long term rising channel from the 2008 low of 0.6007. There is no indication ofa trend reversal and therefore price actions from 1.1078 are viewed as a correction only. Hence while a deeper declinecould be seen to the long-term channel support and possibly lower, strong support is expected from the 0.9403 resistance

turned support to contained any fall.


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AUD-USD4-HOURLY

DOMINANTTREND

TRADE IDEASAction L1 L2 Stop-Loss


10-10-11 0.9751 1.00129 0.9749 0.9987 +0.0219

Profit-taking is more robust than expected and is heading towards the 50.0% retracement of 1.0763 to

0.9386 at 1.0075 next. This is first time in 7 weeks price action is above parity to the US Dollar. Aninside bar in the 4-hourly chart has since appeared. Should the ADX next peaks, the trigger price to sellis for a close below 0.9937. However, 4-hourly MACD is above the zero line and until and unless it

crosses below on a rising ADX, the resumption of the fall from 1.07629 is not confirmed.


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PERFORMANCE ANALYTICS


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PERFORMANCE ANALYTICS


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Your business tag line here.

X B U S I N E S S N A M E

Daniel AngFounder

Since 1985, I have been involved in the trading of derivatives contracts from commodities to gold to financialderivatives contracts like stock index futures to currencies.

As a licensed representative (till 2006) and having held senior positions with various clearing members of theSingapore Exchange - Derivatives as well as foreign brokers based variously in Chicago, New Zealand and Dubai, Ihave gained an unique insight into the workings of the brokerage business.

Setting up Xnalytics has been a dream come true for my fellow colleagues and I as we now have a platform toembark on a new journey - that of educators.

Looking back and reflecting on my quarter of a century in the business of financial derivatives trading, I come torealize a fact - adults these days lack one of the most essential life skills that formal education has failed toimpart.

While graduates are armed with analytical skills and technical know-how, they sorely lack the one skill that

everybody needs but was never equipped with - the know-how to make money.

The fact is hard work and education alone is simply not enough in our increasingly competitive world to secure ourfinancial futures.

Our mission is to educate and impart the art of trading the markets to as many people as possible. Our aim is not toturn everyone into millionaires but to give them a choice. After all, what education does is to give each andeveryone of us a somewhat level playing field - expanding our choices and options in life.

Disclaimer: Information or opinions provided herein should not be used for investment advice and do not constitute an offer to sell or solicitation of an offer

to buy any securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments. When making a decision about your investments, you

should seek the advice of a professional f inancial adviser.

FOREX Daily Xnalytics 111011

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