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We provide investors with valuable alternatives in the Forex marketplace. These include innovative educational opportunities, comprehensive research, superior analytical tools and state-of-the-art electronic trading capabilities.Now may be the time to “ride the wave” in the markets as the major news of the summer, the Euro bank stress tests, were received positively by the market.  Yesterday I commented on the credibility of those tests, and reminded readers to follow the market rather than impose their


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Now may be the time to “ride the wave” in the markets as the major news of the summer, the Euro bank stress tests, were received positively by the market.  Yesterday I commented on the credibility of those tests, and reminded readers to follow the market rather than impose their own view.



So far this morning the market is in risk-taking mode, as CPI data will begin to be released tomorrow in the Euro zone and Australia.  Higher readings may show that policy adjustments may need to take place, especially in Australia.

Adding to Euro strength is the news from the Basel committee on Banking Supervision who announced they would be seeking new measures to shore up the global banking system.

In the UK, a CBI report showed that household spending increased at its fastest pace in nearly 3 years, lending support to the view that economic recovery is taking place.

This morning, US consumer confidence figures and home prices are due out, and yesterday’s housing sales figures were bad historically, yet the market reacted favorably because they were higher than expected.  The market also seemed to overlook the revised figures from last month, which showed a much lower figure.

In the forex market:

Aussie (AUD):  The Aussie is higher as risk appetite has increased due to a positive economic outlook in the markets.  CPI data is due out tomorrow and should those figures come in higher than expected, the market may expect a further rate hike at the next RBA rate policy meeting.

Kiwi (NZD):   The Kiwi is also higher on risk themes going into the RBNZ rate policy meeting tomorrow night.  The expectation is for a rate hike of 25bp to 3%, but pay attention to the policy statement as the Kiwi is closing in on 2010 highs.

Loonie (CAD):   The Loonie is also higher as oil has surged to 79.50 in addition to general risk appetite.  There is no real news on the docket until Friday, when Canada reports GDP figures.

Euro (EUR):   The Euro is also mostly higher, trading largely as expected according to our risk ladder.  Consumer confidence figures and import prices were higher in Germany, showing continued strength in the Euro zone’s largest economy.  This shows a renewed outlook for growth but don’t expect tomorrow’s CPI data to affect monetary policy just yet, as the ECB cannot start raising rates until after the sovereign debt issues of the countries in trouble are rectified.

Pound (GBP):   The Pound is higher across the board as CBI reported sales data showed that household spending increased at the fastest pace in nearly 3 years.  This CBI gauge showed a reading of 33 vs. an expectation of 3.  So it beat handily and the market has responded accordingly as economic growth prospects have advanced.

Dollar (USD):   The Dollar is lower as a “normal” risk-appetite scenario is taking place this morning.  The home price index came in showing a slight increase which is a good sign in that prices aren’t still falling.  However, with the end of the homebuyer tax credit, this may not be the case going forward and as always, the economic prospects here in the US will come down to jobs growth.

Yen (JPY):   The Yen is lower across the board as risk appetite has increased the demand for carry trades.  Recent Yen strength vs. the Dollar has heightened the awareness of possible intervention, but the BOJ appears (for now) to let the market dictate prices.  Japanese employment and CPI data are due out on Thursday night.

So if the market tells you it wants to go up, you should listen.  Many times traders (myself included) try to interpret market news and data and then make predictions of what they think should happen.  A better way to approach the markets is to follow trends that you see on the charts, and then act accordingly.  Try to find low-risk entry points based on technical support and resistance, and then hop on and enjoy the ride.

The news we have been receiving as of late has largely been positive and has emboldened risk appetite.  While there are bound to be hiccups along the way; use them to your advantage by buying pullbacks or selling rallies.

The global economy is still fragile, but every passing day that does not bring bad news should be viewed as a positive for risk appetite.   Money has to flow somewhere, and if you can catch it just right, you may be in for a great ride!

To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!

To follow these events live with a free, real-time practice account, click here!  Don’t miss out on the world’s fastest growing market!

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