The U.S. dollar was hammered versus the Yen, trading near its seven week low after a large sell-off made safe havens more attractive. One beneficiary was the Swiss Franc, which reached a three week high against the dollar.

Weak Chinese Reports Worry Markets
Markets have been rattled by weak manufacturing reports from China that suggest its economy is slowing down. Manufacturing activity fell in January to the level of 49.6 following a 50.5 performance in December. The announcement prompted concerns in the markets, leading to a move into safe havens like the Japanese Yen and Swiss Franc. It also led to the advance of German bonds to a one month high with yields falling to five month lows.

Securities in Italy fell following the recent news from China, and Spain also found its securities dropping for the first time in recent weeks. The U.S. dollar also continued to be weak, although most of the weakness is thought to be a result of the markets anticipating further tapering by the Federal Reserve.

Euro Strengthens
The Euro gained ground versus the U.S. Dollar for a number of reasons, including the release of PMI numbers. Services and manufacturing beat expectations, and the region’s largest economies except Germany saw robust numbers in both sectors.

The Services PMI in the E.U. beat expectations of 51.5, coming in at 51.9, while manufacturing beat expectations of 51.5 with a figure of 51.9 — the largest increases since the summer of 2011. The Euro strengthened in spite of bearish sentiments expressed by the President of the European Central Bank. The President’s inflation concerns were not shared by many economists who feel the Euro could continue to advance if economic data continues to be positive.

Gold Lifts
The price of gold spiked to its highest level in nine weeks as inflows came from investors spooked by stock market losses and concerns about emerging markets.

Market Outlook
Many economists expect more weakness in the markets as more data emerges from China. The Federal Reserve should also have an impact with further tapering expected to affect the stock market and emerging markets.



Here are reasons Why US Dollar Could Rally in Short term

by Bhaveek Patel

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Euro against US Dollar is in uptrend for medium term, Buy on Decline

by Bhaveek Patel

EURUSD pair in forex has is very popular, as I see these days it has become highly predictable with technical analysis. As I see the charts I feel that EURUSD is now beginning a new up trend as it has bounced from 1.2050 to 1.29 about 900 pips rally in 3 months. If I see the daily chart the pair is already trading above the 200 days SMA, In this case I will be only […]

OTC Forex Trading illegal in India, Here is trick to trade major currencies

by Bhaveek Patel

In year 2011, RBI has come up with a clear notice that, Indians are not allowed to trade in International Forex OTC (over the counter) market (you can read it on the website of RBI). In the meanwhile, stock exchanges has opened the gateway for traders to take positions in currencies like USDINR, EURINR, GBPINR and JPYINR. Currently these four currency pairs are available for trading, But there is a trick by which big traders […]

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by Bhaveek Patel

Majority of the forex traders use technical analysis approach to trade, most of these technical traders want the currency pair to follow the trend, may be up or down. When I say about forex trading there are many currency pairs available for trading. Suppose the trader want the trending currency pair, here is how to find which currencies are trending. For doing so there is a simple trick, it is if major currency pairs like […]

Bullish divergence spotted on NZDUSD, Forex pair trade near support

by Bhaveek Patel

Today’s trade setup on NZDUSD we see a nice bullish divergence trading opportunity, we see that this pair may bounce from its support level which lies at 0.8125 zone. ON 1 hour chart slow stochastic was making higher high, but price action was showing lower low, hence in near term this pair can move higher if risk in market comes back. There is no fundamental news for New Zealand today, hence NZD/USD pair may move […]