FXstreet.com Live Sessions Archives:

US GDP Release Live Coverage with Nick Nasad

(07/31/2009)

1:10

FXstreet.com: Trading OTC Forex on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange or futures you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange and futures trading, and seek advice from an independent financial advisor if you have any doubts.

1:10

FXstreet.com: Good morning, good afternoon and good evening to everyone all over the world. Today's U.S. GDP Live Coverage will start in 5 minutes. I am really happy to introduce Nick Nasad who is going to take part in this live event today as a co-presenter. He will be giving us a direct picture for the market status.

1:10

FXstreet.com: Nick Nasad is a currency market analyst with CMS Forex for the last 3 years. He closely monitors fundamental releases and reports their results and provides commentary to the company's clients through CMS Forex's interactive economic calendar Forex Capsule and through daily Forex market video recaps. He has also written extensive educational material on using technical analysis in trading Forex.

1:10	FXstreet.com: Today’s sponsor is CMS Forex.

1:11

[Ad]

CMS - Integrated Pattern Recognition Tecnology View

1:11	Nick Nasad - CMS: Hello everyone, and thank you fxstreet for having me on again

1:11	FXstreet.com: Hello Nick, what's you preview for today's GDP?

1:12	Nick Nasad - CMS: It's friday, and we are all awaiting the release of the 2nd quarter GDP. We've had an interesting week so far, and the GDP release has a good chance of either solidifying risk appetite or reversing some of the recent optimism

1:13	Nick Nasad - CMS: GDP is expected to decrease an annualized 1.5%, as personal consumption continues to be negative and companies scale back on output and employment in order to weather the downturn both in global trade and domestic demand.

1:14

Nick Nasad - CMS: There have been some bright spots in the US economy, mainly recent positive data form the housing sector including better housing starts and home sales. We have also seen companies for the most part either matching their earning forecasts or exceeding them, which has helped boost stocks prices around the world.

1:14	Nick Nasad - CMS: On the other hand, we saw durable goods orders slide 2.5% this week, and consumer confidence has slipped as jobs remain hard to find. That can crimp household and consumer spending.

1:15	Nick Nasad - CMS: Still, even though the economy remains in recession, the decline will not be nearly as big as it was in the 1st quarter..

1:15	Nick Nasad - CMS: so lets take a poll of what you see GDP doing

1:16	FXstreet.com: Thanks Nick, now it's time to hear what do you think... Vote the poll!

1:16	What do you anticipate the outcome of U.S. GDP? Good result and bullish for the USD ( 31% ) Good result but bearish for the USD ( 46% ) Expected result and low volatility ( 8% ) Bad result and bearish for the USD ( 0% ) Bad result but bullish for the USD ( 15% )

1:16	FXstreet.com: Today’s sponsor is CMS Forex.

1:16

[Ad]

Trade with VT Trader™ Web from your web browser. View

1:17	Nick Nasad - CMS: let me take some questions

1:17	[Comment From v12Fx] Hey will there be a spike up or down?

1:18	FXstreet.com: 12 mintes for the data release, not it's time to answer some of the questions you are sending today

1:19

Nick Nasad - CMS: its hard to predict that sort of thing, but its good to anticipate the different scenarios. Many traders are likely waiting for the report before taking positions, especially into the weekend, so a number that is different from the consensus forecast can give the markets a jolt. A figure that meets expectations may be met with lower volatility

1:20	Nick Nasad - CMS: several pairs are coming up against some key levels, so if we see a different result, we can see some strong moves still.

1:20	[Comment From Guest] I think the -1.5% forecast is optimistic given that Q1 was -5.5%. My forecast is around -3.5%

1:21	Nick Nasad - CMS: A big part of the drop in 1st quarter GDP did have to do with liquidation of inventories, where this quarter there was likely more orders places to refill stockpiles, not much more mind you, but enough to help avoid as bad a result as the 1st quarter.

1:21	[Comment From Guest] think people are really expecting -1.5? or has the recent run lifted unofficial expectations

1:23	Nick Nasad - CMS: In a survey of about 80 economists by bloomberg, estimates ranged from a 0.7 percent gain to a decline of 2.9 percent.

1:23	[Comment From Guest] hi nick what u think about eur/usd after US GDP release ?

1:25	Nick Nasad - CMS: The EUR/USD saw consolidation most of last week, before a plunge from 1.43 to 1.40 mid-week. That decline perfectly tested teh 61.8% retracement of the rally stat started on July 9th around 1.38.

1:25	Nick Nasad - CMS: we've had a slight rally Thursday that picked up steam overnight, and we are now testing the bottom part of the consolidation zone from the last two weeks (1.4150)

1:27

Nick Nasad - CMS: the bias for this pair, if we see a better than expected or a GDP figure that is in line, risk appetite should favor the Euro,. A break of 1.4150, could signal another move towards testing 1.43... Of course a worse than expected result can cause the old support level to turn to resistance which could then favor a greenback rally.

1:29	Nick Nasad - CMS: The GBP/USD pair, has fallen back slightly the past 30-40 minutes, but we can see that it too is testing important resistance. The 1.6550-1.6570 area is now being tested for the 4th time since July 19th.

1:29	FXstreet.com: Today’s sponsor is CMS Forex.

1:29

[Ad]

CMS - Integrated Pattern Recognition Tecnology View

1:31	Nick Nasad - CMS: Similar scenario, a better result could help extend the Pound's recent run. If you look at the GBP/JPY and EUR/GBP, you can see that the Pound has already broken its recent support (EUR/GBP) and resistance (GBP/JPY)

1:31	FXstreet.com: Advance GDP q/q -1.0%

1:32	Nick Nasad - CMS: thats a better result, and initial quick reaction is a slight gain in the greenback

1:33	Nick Nasad - CMS: if the US economy is able to come out of its recession earlier than other economies it has a chance of raising rates earlier than others, which benefits the greenback

1:34	Nick Nasad - CMS: The report shows inventory liquidation subtracted less from GDP in the second quarter than it did in the first quarter, 0.83 of a percentage point versus 2.36 percentage points.

1:35	[Comment From Guest] ya !! the market has already anticipated good GDP so there might be a profit booking in the stocks

1:36	Nick Nasad - CMS: we are seeing a bit of profit taking behavior in the first 5 minutes, the GBP/USD have cut most of its gains from overnight already.

1:38	Nick Nasad - CMS: the Yen is also strengthening against the greenback, sliding to its close from yesterday's session.

1:39	Nick Nasad - CMS: as one person has mentioned, the expected results for GDP were likely priced in at this point, and without a much better headline figure, we are seeing a bit of profit taking. I wouldn't think this number increases risk aversion. consumer spending did decrease 1.2%

1:40	Nick Nasad - CMS: that is an important gauge of how the recovery will go, since job losses are still steep and if consumer retrench and do not spend, the recovery will be slow.

1:40	[Comment From Mashhoud] Does it make a bearish movement in eurusd

1:42	Nick Nasad - CMS: the EUR/USD just tested its upward sloping line of support using yesterdya;' low and the overnight low just below 1.41

1:43	FXstreet.com: Nick is having some technical issues, please bear with us

1:43	FXstreet.com: Today’s sponsor is CMS Forex.

1:43

[Ad]

Trade with VT Trader™ Web from your web browser. View

1:43	Nick Nasad - CMS: we're seeing a bounce from that, so you have to watch how the markets react around 1.41. better to wait and see a break of that level as an initial signal

1:44	[Comment From Guest] nick, how much do you expect the eur/usd will drop before consolidation occurs?

1:45

Nick Nasad - CMS: Guest, we have just come out of 2-week period of consolidation in the pair, and Wednesday saw a break of 1.4120. If we see greenback strength keep teh pair below that level in today's trading, we could see a new range between 1.40 and 1.4150., though currently, a retest of 1.43, if risk appetite remains is more likely.

1:46	Nick Nasad - CMS: now, that doesn't confimr to what we have been seeing the first 15 minutes following the release.

1:46	[Comment From v12Fx] I would like to see a close above 1.6580 for bullish continuation of GBP/USD, to 1.70 area

1:48	Nick Nasad - CMS: yes, a break of the recent channel on the GBP/USD would be a strong signal that traders are done consolidating and would like to move the pair higher. Most of June and July has been speng in a zone between 1.66 and 1.62.

1:49

Nick Nasad - CMS: we saw that huge run-up March -May, and after two months of more sideways action, with a very clear ressitance, it might be time to extend the rally. However, though the Pound has been releasing some positive data (espeically regarding the housing market), any re-ignition of fears in financial markets can send the pair back down...

1:50	[Comment From Guest] personal consumption 1.2 percent gross private investment dropped 20.4 percent

1:51	Nick Nasad - CMS: some of the figures from the release: Business spending dropped by 8.9%, after decreasing 39.2% in the first quarter. Investment in structures fell 8.9%. Equipment and software slid by 9.0%.

1:53	Nick Nasad - CMS: the market is likey focusing on the dip in consumer spending (70% of GDP) as weak labor markets have kept growth in wages, salaries and benefits down in the 2nd quarter

1:53	Nick Nasad - CMS: with the threat of losing your job added, its no wonder consumers are not spending.

1:54	[Comment From tell it like it is] GBP/USD will fall to retest 1.5980 has had a bullish run but has got ahead of itself, housing market up on thin volume, unemployment however continues to rise further

1:56

Nick Nasad - CMS: the resistance here is quite strong, and the recent rally is a product of better stocks and stability in the financial sector. However those are leading indicators that lag employment and spending figures, which despite all the money the Bank of England is pumping into the economy remains weak.

1:57	Nick Nasad - CMS: though its still early in the session, it seems that teh resistance levels in pairs like the GBP/USD and USD/JPY and support in the case of the USD/CAD have worked to push back the recnt moves seen yesterday and overnight.

1:59	Nick Nasad - CMS: so far, the negative factors of the GDP report have caused traders to sell higher yielders instead opting to buy greenback and yen, perhaps as profit taking plays a role as well, since we are in a friday session, and we have come up against key levels that held.

2:00

Nick Nasad - CMS: still, many of these same levels could be retested next week, as the sense of risk appetite is returning to markets. Yesterday was a clear indication of this as stocks surged and oil shot up around 5%. With stocks in Japan hitting a high for this year and the Dow Jones index in the US climbing above 9200, investors are feeling better.

2:02

Nick Nasad - CMS: that has been helped by companies making their earning forecasts. so, in the short term we may have another round of consolidation, but keep your eyes peeled for any breakouts, such as a move by the USD/CAD below 1.075, or a push by the Pound above 1.66. A lot rides on what incoming data tells us about the global recovery.

2:02	Nick Nasad - CMS: and I will leave you with that.

2:03	Nick Nasad - CMS: thank you very much for your particiaption in today's live coverage

2:03	Nick Nasad - CMS: i hope you all have a wonderful weekend, though there is still some trading to do before then. all the best!

2:03	FXstreet.com: Thanks Nick for your time today and thanks to all the users gathered here today for your participation

2:04	FXstreet.com: I hope to see you all next week in the European Central Banks Live Coverage with Valeria Bednarik

2:04	FXstreet.com: Today’s sponsor is CMS Forex.

2:04

[Ad]

CMS - Integrated Pattern Recognition Tecnology View

2:04

2:05

Disclaimer: Trading OTC Forex on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange or futures you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange and futures trading, and seek advice from an independent financial advisor if you have any doubts.

Expert: Sunil Mangwani, CEO at FibForex123
Moderator: Maud Gilson, Conference Manager

Summary:
Fibonacci ratios are a very popular tool among technical traders and are based on the following series of numbers identified by mathematician Leonardo Fibonacci in the thirteenth century: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, etc.
Price has an uncanny way of respecting Fibonacci ratios, and it’s worth studying these ratios in detail.
There are different kinds of Fibonacci ratios like retracement, expansions, projections, fans etc, and each of them has a different characteristic and a different use.

Every tool of technical analysis, every method / technique, must be used to manage a trade more efficiently.
This simply means that a trader must have a “Trading Plan”.
I have seen that a Trading Plan is often the thin line between success and failure in the markets and a ‘Trading Plan’ must incorporate the 3M’s (Money, Mind & method… in that order).
In this webinar, we attempt to use the “Fibonacci Method” to enable us to manage our trades.
One must remember that Technical analysis is NOT the trading plan.
Use the tools of technical analysis as a path to manage your trades.

Continue reading "Using Fibonacci ratios to manage your trades efficiently" »