Forex Quantitative Trading
Forex and Commodities: What will be the year 2011?
The year 2010 was largely influenced by the crisis Debt and the second round of quantitative easing in the United States. These two factors are likely to remain on the radar operators in 2011. Will be added to them the possibility of slower growth in China, which would be reflected in the power of commodity currencies.
Despite all the problems current with the disintegration of the euro area (yet!) seems unlikely. The political will to hold together the euro area is still high enough to maintain this incredibly difficult and costly projects alive. The European Central Bank has made arrangements (purchase obligations peripheral EU enlargement of the European financial stability, increased financial assistance for IMF assistance, confirmation of the availability funds in an emergency, etc.) that can be used not only for stabilizing the European bond market. The stabilization bonds then lead to the stabilization of the fall of the euro and the strengthening korektivnímu possible. Korektivnímu because the amount of debt reduction and estimation the euro area, as well as warnings about possible further reductions will be aware of traders and prevents excessive strengthening. Prospects overall is slightly negative. Band for 2011: 1.3750 to 1.2500
Significantly expanding the policy of the United States in years 2009 and 2010 helped to stabilize and then recover the GDP growth. Unfortunately, every coin has two sides: the expansionist policy aggravated debt in the future cause many problems.
In terms of U.S. dollars will be changing primary setters in 2011 the possibility of rate higher interest rates and the level of economic growth. Due to austerity measures and increased taxes in many European countries can expect that the United States benefit from the growth of the economy before driving EU.
Quantitative easing (QE) in the United States partly contributed to the growth of GDP and other key indicators. Pursuit improving economic development would lead to the possibility that the Fed does not apply all the money for ANC. Discussion of these options would respond by strengthening USD.
As long as unemployment is close to the current 9.8% and inflation remains very low, the Fed ready to use all the means and opportunities that will increase interest rates remain very low. Strong growth in the U.S. $ would be unlikely. However, if an improvement in the labor market and inflation rose, the Fed could begin to signal a rate hike that would make the underlying trend and the possibility of a significant strengthening of the U.S. dollar. This option is not in the first half of the year probably. The overall outlook is positive. Band from 2011 to the USD Index: 76.00 to 88.00.
On the money market and in particular its volatility will certainly affect the development in China. China's inflation is currently a maximum of two years and the Chinese central bank has increased PBoC rate since mid-October both. A further tightening of monetary policy is likely and could have far-reaching implications. The higher rates of Most equity markets react to the sale. Fall of the major stock indexes "Hang Seng in Hong Kong" SSE "in Shanghai would certainly lead a drop in the other world indices. The sharp decline in equity markets have benefited from the status of U.S. Refuge, and Japanese investment has returned to Japan – JPY strengthens, usually more than USD, so that the USDJPY decline. The currencies of countries with higher rates such as AUD and NZD, which are traditionally used for speculative carry trade during the fall in equity markets weaken substantially.
At the risk of a "bubble" in the Chinese real estate market and bad loans of Chinese banks highlights a number of analysts have quite a long time. The risk of falling prices real estate are increasing each month and rising interest rates, it could be a mechanism that causes the bubble burst. In terms of risk of "shock" that cause a high risk aversion is the temporary development of China is very important.
economy China is growing by about 10% annually and imports large quantities of products. When you slow down, imports these products would be reduced. This will greatly harm the countries that export to China, particularly Australia and therefore the AUD.
When I mentioned Australia, I can not resist a few comments: property prices rising steadily, and among the highest in the world. Australia in 2010 has increased interest rates four times, usually a percentage point. As a consequence of the increase the number of defaults. Taking into account the risks mentioned above, and also on the basis of PPP is the Australian dollar overvalued by about 30%, I see no place for the AUD to strengthen significantly.
The Australian dollar is very sensitive to changes in risk aversion, whether the extension of signs / worsening of the crisis and falling stock markets lead to large výprodejům. The risk that the repeated collapse similar to the one we saw in mid-2008 when more than four months AUDUSD has fallen from 0.98 to 0.60 is probably not high, but according the tendency of strengthening of the AUD will continue indefinitely could be very dangerous. The possibility of deception through the development of the economy Australia seems to me a lot and so I think next year AUD closed at a lower level. Band for 2011: 1.0500 to 0.9350.
In the longer term are important for exchange rates of inflation, interest rates of GDP growth. But we must not forget the difficult define "market sentiment", which may have a greater impact than the fundamentals in the short term. 2010 was a year of volatility. Because of the potential risks (of enlargement of the European debt crisis, even the non-payment of bond investors, falling stocks and shares fall mainly in emerging markets, escalating tensions on the Korean Peninsula and Iran, etc..) I'm very skeptical about the idea that 2011 is a year of stabilization, security and low volatility.
Technically:
Chart: Weekly moving averages: 10 50 100 200 SMA
The price is less than 10, 100 and 200 SMA, which can be regarded as confirmation of a downtrend. Price broke through the SMA 50, but still above the average did not close. Even if the closure had taken place, the price of each lot of resistance, the outermost regions whose line is directed downward trend, which over the last maximum 1.4280. In the medium term will cost a lot easier to achieve at levels below the highest, because the support for 1.30 is the next support up to 1.25. The probability of reaching the level of about 1.25 I think it is higher in the medium term.
The situation on the index USD is in terms of moving averages are ambiguous. The four moving averages, but aggregated in a very narrow band, from which one can conclude that the penetration area flash occurs. According to the trend line heading up the ventilation must be to the north. Out to 82.00 would be very important bullish signal techniques and how this would not prevent the 88.00 index.
"Properly" ordered the moving averages confirmed a strong trend is bullish. What is interesting in this graph, the distance between price and SMA 100 or 200. This distance can be regarded as extreme and strategies based on a return to long-term average, therefore, suggests a lower value. Drilling of the previous low or lower 10 SMA can be considered a bearish signal.
The situation for gold is very similar to the situation in the AUDUSD. Here, we sorted correctly confirming the strength of the trend SMA. The distance between the price and 100 or 200 SMA is really important (26% and 46%) so that the average short-term retracement is likely. Pause in the past or at least below 10 SMA is the minimum required for a signal marking a change of trend.
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