I’m doing a talk in a couple of weeks and my topic is how a site like ForexLive, with its mix of technical and fundamental analysis, flow information, orders, central bank activity and interpretation of news events helps the average individual trader.

If any of you have an example of how the site helped you initiate a trade or avoid some common pitfalls, I would be very grateful if you could let me know a few examples to help shape my speech.

Thanks in advance!

From our loyal friend Lilac:

It’s only my take on stuff, but I mentioned earlier today that the looming BA strike could provide a potential brake for a cable slide.
In effect, the strike could also act as a buffer with regard to the current state of play in the UK.
Perverse thinking, I know, but here’s the latest resume

http://www.telegraph.co.uk/travel/travelnews/7429899/Easter-holiday-plans-in-jeopardy-as-Unite-goes-ahead-with-7-days-of-BA-strikes.html

coupled with the fact that a further full out strike in May is currently still on the agenda.

“Gordon Brown came under pressure to condemn the industrial action. At a press conference he called on all parties to work together and added: “The disruption to services is completely unacceptable… this is bad news for the British economy.”

Well actually, this is seriously bad news for Brown – and the Labour polls.

Let me take you back to the Rover rout.

http://www.nytimes.com/2005/04/11/business/worldbusiness/11rover.html

The sums involved and the jobs subsequently lost pale into insignificance by today’s standards, but the bail-out was engineered one month before the last UK general election in 2005. And then followed a pointless 4-year £16m enquiry.

http://www.telegraph.co.uk/finance/newsbysector/transport/6172359/Tony-Blair-quizzed-over-collapse-of-car-maker-MG-Rover.html

Having succeeded Blair in June 2007, and after much media speculation in early October that an election would be called for the first week of November, Brown called the whole thing off, following an opinion poll of marginal constituencies targeted by the Conservatives, which indicated that an election could result in the loss of the overall Labour majority.

http://news.bbc.co.uk/1/hi/7031749.stm

Well! That little exercise cost the UK more than a couple of £m in pre-electioneering – it cost millions the Northern Rock ruck, which Jeff Randall inimitably summed up:

http://www.telegraph.co.uk/comment/3644045/Gordon-Brown-will-be-defined-by-Northern-Rock.html

“As a result of Brown’s meddling, what began as a corporate problem has degenerated into a national scandal, the end of which is nowhere in sight”.

A portentous precis of his whole tenure.

In short – the unions are circling their impotent prey.

Meanwhile, keep a beady eye on the punters

http://www.electionpredict.com/news/tories-still-on-course-for-majority-despite-latest-poll.html

During times of stress in the banking system central banks offer institutions the ability to “borrow short” at low rates and “lend long” at higher rates.

US banks have been rebuilding their capital by borrowing from the Fed at near zero and buying US Treasuries (lending to the government) further out the yield curve, profiting from the higher yield on the longer-term bonds. So long as they hold the bonds to maturity and the US does not default on its debts, the trade is essentially risk free.

In Europe, big banks have been playing a riskier game. Since European government bonds come in 16 different flavors, they’ve been passing up vanilla high-quality German bunds for tootie fruity lower-quality Greek bonds. In times of low stress, this is a more profitable strategy than merely buying the German benchmarks. In times of stress, it is a sure loser.

The result? Big European banks have been buying credit default swaps to protect their positions. Greek bond prices have plummeted as CDS traders hedge their positions. In other words, a vicious spiral. Rather than blame hedge funds, European leaders should look no further than their leading banks.

Until there is a unified European bond market, this risk will persist as banks invest in “safe” government debt hoping for a political rescue if the bets go bad. Sounds like sub-prime all over again…

• US retail sales rise 0.3% in February; ex-autos up 0.8%,  stronger than expected
• University of Michigan consumer sentiment weak, 72.5 in March from 73.6 in Feb
• US business inventories unchanged in January
• Rehn: Greek collapse would hurt EU credibility
• Trichet: If too slow to reduce non-standard measures, could distort market behavior
• IMF’s Lipsky: 50% of US toxic assets held by European banks
• US Senator Schumer to propose bill  aimed at curbing Chinese currency manipulation
• IMM specs cut dollar bearish bets
• S&P 500 closes unchanged at 1150
• US 2-yr notes ends at 0.96% yield, up 1 bp; traded above 1% after retail sales

Trichet repeats that the ECB does not want to breed dependency by the banks on cheap credit and that the ECB will continue to phase out its non-standard monetary measures.

No reaction from the market with EUR/USD steady at 1.3762 as the market wraps up for the week.

As we’ve already seen, China is very touchy about currency issues.

That doesn’t look like it will stop Chuck Schumer from rattling the Asian Tigers cage.

The US has been reluctant in the past to confront China too aggressively on the matter, seeing it as counter productive. That reluctance is breaking down however, with unemployment sky-high and the recovery unfolding at a very modest pace.

China does not like to be told what to do, and the market may fear retaliation, verbal at first, and possibly actual sales of US assets. Should be interesting days ahead, or it could just be a an empty threat from Schumer. He has made the same threat before. We shall see.

Earlier in the week I got all worked up about the bullish cross in the 10 and 21 day moving averages in EUR/USD. What I failed to notice was the bearish cross in the 100 and 200 day moving averages today. I don’t know too many folks with pockets deep enough to react to slow-to-react signals like bearish crosses in very long-term moving averages but it is probably worth considering as a warning sign should the rally falter in the days ahead.

One other level to keep in mind next week is the 1.3837 level, the23.6% retracement of the 1.5142/1.3433 decline.

Not much above 127.00, looks like.

Remember how we spent nine months range trading between 139.00 and 127.00? My guess is it will now be very difficult to retake the 127.00 area. If we do, you’d have to surmise that happy days are here again and risk assets will remain in heavy demand.

125.25 contained this morning’s rally and needs to be overcome within the next few days before momentum stalls and traders look to book profits. Seasonals remain a headwind for EUR/JPY with year-end Japanese repatriation expected to peak in the next week or so and Dai Ichi Life floating a huge IPO on the Tokyo exchange in early April.

A move back below the 123.90 area would be our signal that the EUR/JPY rally has come to an end.

When the CFTC announced its 10-1 margin cap, some in the industry thought the CFTC was defending the futures industry by trying to force forex business onto the futures exchanges. A CEO of one of the biggest futures brokerages has come to the defense of the OTC industry, saying the regulations will only drive business off shore…

USD/JPY has been running into steady selling at the 90.55 level throughout the afternoon the market apparently trying to trim some long ahead of the weekend. Rather than gaining momentum above the 91.00 level this morning, USD/JPY drew sellers out of the woodwork and slipped quickly back to the 90.28 level before rebounding. Model funds were said to have been the most aggressive sellers, from what we hear.

USD/JPY trades quietly now around the 90.45 level.

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