Timeless Trading

Is there a shift taking place ?

2012-03-13T17:08:00.002-07:00

The U.S. dollar is becoming more and more attractive. With QE3 being shelved

Over the past few months the U.S. dollar traded primarily on risk appetite. I believe they would sell the dollar and by risker assest. So as the S&P 500 or the dow rose the dolla would sell off. However, i believe something has fundamentally changed. The us dollar has started to take notice of the improvements in the us economy by rising on good data and sliding on weakness. Today the reaction and Optimism from the FOMC sent the dollar soaring, against all major currency. Now tell me if I’m wrong in thinking whether or not we are seeing a fundamental shift in how the dollar is trading

Japan

Shirakawa said “The task of overcoming deflation and achieving sustainable economic growth with price stability cannot be realized overnight. The issue of beating deflation is strongly related to how growth potential should be strengthened and patient effort is needed to tackle this problem. The BOJ will continue to do the best we can as a central bank. At the same time, I strongly expect that parties concerned such as companies, financial institutions and the government will do their utmost while fully recognizing the importance of strengthening growth potential. In managing policy, we must ensure that the economy is headed toward a path of sustainable growth and price stability. Given that the cause of deflation is structural problems such as Japan's low growth potential, we cannot expect to achieve our goal immediately." So has the Jap tactics changed also is forcing on growth and will this allow for a weaker yen? Instead of relying on intervention which has proven woefully ineffective in weakening the yen, the Japanese monetary authorities are looking at QE as a much viable policy tool to control any appreciation of the currency.” And if this is the case then the yen will weaken as proved with other countries that has introduced this method so in effect The central bank’s plans for continued easy monetary policy has made the Yen less attractive especially on a day when the FOMC statement suggests that more QE in U.S. is no longer necessary.

Pls tell me what you think

EURJPY Elwave and harmonics Combined

2012-03-13T04:04:00.000-07:00

Willl continue to monitor

AUDUSD possible 5TH WAVE UP

2012-03-12T16:58:00.000-07:00

is Japan headed for a Financial Meltdown

2012-03-12T11:22:00.002-07:00

FXEmpire | March 12 2012 12:29 EDT

i know in pervious post i said that the eurjpy could go to the sky and beyound will some of it is true and the trade is working out fine. Howevr i found what i believe to be a bearish butterfly on the daily. so use caution.
News below

By FX Empire.com

Is Japan Headed for a Financial Meltdown

Over the past few weeks, most economists and investors have been watching the story in Greece unfold. Waiting at the back door are Hungary, Portugal, Spain and Italy. The EU has spent a lot of time and effort pushing austerity measures and using standardized calculations to evaluate budgets and financial projections, in many cases ignoring cultural and financial differences. EU ministers have tied debt to GDP, which is a text book approach. Except it doesnt always work and sometimes it just is plain old fashion wrong. Lets take a look at our close ally and friends, but a country no one can really figure out.
Japans debt to GDP ratio is the worst in the developed world, yet the BoJs interest rates are the lowest available, excluding Switzerland.

The main reason is that for the close to 15 years weve seen an excess of Japanese savings and a deficit of demand for those savings. So the Japanese government was able to issue debt without any competition from the private sector. But the Japanese demographic profile means that more workers are withdrawing from the workplace and drawing down their retirement savings.
The Japanese government is running a fiscal deficit of 10 to 11 per cent of GDP. Expenses for social security accounts for 27 trillion against total revenues of approximately 45 trillion. In addition, the Japanese government has interest expense of 10 trillion. Add them both together, and the Japanese government is spending 90 per cent of its total revenue on these two items.
We think that we are in the midst of an inflexion point, where theres not enough Japanese savings to finance Japanese government debt. That means that the Japanese government will have to borrow in international capital markets. Given Japans risk profile its debt to GDP ratio is 230 per cent Japan may have to pay, say, 3 to 3.5 per cent to borrow. But that would push Japans interest expense to 30-35 trillion. We believe that is a recipe for disaster. The Bank of Japan has announced that it will start buying a lot of Japanese government debt, which will temporarily allay the problem. But if the market starts thinking that Japanese inflation will pick up, interest rates will be pushed higher.

One important item that has provided stability in Japan and peace of mind for investors in Japanese bonds has been Japan’s consistent current account surplus. However beginning before, but accelerating after the accident at Fukushima, Japan has seen its trade balance decline sharply. The reactor meltdowns and subsequent closure of the vast majority of nuclear plants has forced Japan to aggressively shift away from nuclear base load power. But that has meant it has had to pay a lot for LNG, oil and coal for its power generators.But this shift can and will be addressed and changed. This is only a temporary adjustment, large and important but temporary.
Last year, Japans had a trade deficit for the first time since 1980. New data just released shows that Japan also ran the largest single month full current account deficit since the oil shocks of the 1970′s.
Will a Japanese crisis happen there are some clear warning signs. If so it will happen sooner rather than later. No one ever thought we would see what we are witnessing in the EU, and even when all the signs were present politicians, lawmakers, economists and analysts turned a blind eye.
Originally posted here

2012-03-12T11:00:00.002-07:00

CHINA UNCERTAINTY

Data on Friday showing solid growth in U.S. employment suggested the world's largest economy was strengthening and in less need of further monetary stimulus from the Fed, which holds its policy meeting on Tuesday.

Economic conditions elsewhere were less rosy or clear-cut.

China's trade balance data over the weekend showed the largest deficit in at least a decade, following recent reports that inflation cooled in February while retail sales and industrial output fell below forecast.

"Aside from healthy demand for industrial metals, assessment of recent Chinese data is mixed, and more figures are needed to clarify the uncertainty," Niimura said.

Mr PRICe ABOVE 50% ABC WKLY PIVIOT POINTS @ 107.80

British Pound Outlook Monthly/Weekly Charts

2012-03-11T17:51:00.000-07:00

Clues: The Asending triangle formation of the Pound technically is a bullish Sign. However with a few bolts that need to be nailed into the euro, we should antispate a break to the the down side.

GBPUSD MONTHLY

A break below 1.5300 could test the psychological level of 1.5000 level before a close below that figfure could see a test of the 1.40s

A break above the 1.6800 level which is a 50% retracement of the of the 2008 finanical crisis meltdown
could see a test of the Upper retrracement level of 61.8% just above 1.7500 the double top at 1.6800 will play a hugh role in any upside momentum in the the pound.

On the weekly chart, the Pound found support just above 1.5300 level which looks like an uneven head and shoulders formation. This a bearish indication, and a break of the supporting levels
will support an out look for a stronger dollar.
If we fail @ the support 1.5300 expect futher range trading at a rise back to the lower mids of 1.6180, the latter being the top of the ead and shoulders .

GBPUSD WKLY

In conclusion with the bank of Engalnd supporting further QE (Quantitative easing and the International Montery Fund revising uk growth to 1.1% from 1.6%, we find it difficult to see much Upside if any
Importantly, a sovergin downgrade of the uk could be the tipping point that sends the sterling Lower.

Daily Chart

4hr Chart

Your Welcome

All i ever wanted was for someone to tell me the Truth

2012-03-11T16:13:00.001-07:00

All i ever wanted was for someone to tell me the Truth. Then i can decided what i will do with the information, be it Call, Stick, Fold or Bust.

Emmmm, Whats really going on Europe has nothing to do with solving a debt crisis and everything to do with preserving a corrupt system based on limitless debt and growing government power. The sooner you understand that fact, the sooner you’ll be able to prepare for what happens next. There are two options for what happens next, and we’ll get to those shortly.

First, though, doesn’t it strike you as strange that all of Europe can be brought to its knees by tiny little Greece? Greek GDP is just 2.4% of Europe’s GDP. In economic terms, Greece doesn’t matter. Its lack of growth or economic competitiveness shouldn’t be factors that can destroy Europe’s 13-year single currency experiment. Yet, Greece obviously does matter; otherwise the European financial markets wouldn’t be celebrating the latest €130 billion bailout that’s on its way to Athens.

So here’s our question: Why do Greek finances matter to anyone outside of Greece? If you rule out the obvious things that don’t matter, that leaves everything else. Or as Sherlock Holmes was fond of saying, “when you have eliminated the impossible, whatever remains, however improbable, must be the truth.”

First, let’s see why the possible explanations for Greece’s importance to the world are actually impossible. Take the issue of debt reduction. As we wrote last week, the deal before Europe would reduce Greek debt to 120% of GDP by 2020. The IMF says that level is sustainable.

Back in a universe where common sense prevails, you can see that the plan is a joke, at least in terms of debt reduction. A plan to reduce Greek’s debt to 120% of GDP...EIGHT YEARS FROM NOW...is not a serious plan about debt. Therefore, the plan cannot be about debt reduction.

Will the plan make Greece more competitive in the long run? Well, probably not. In order to get more money by March 20th, the Greek Parliament had to agree to certain structural reforms. Some of those reforms might even be a good idea. But cutting the minimum wage isn’t going to be popular. And with Greek GDP shrinking by 7% in the fourth quarter, years of austerity won’t make Greece more competitive. The lifestyle of the Greeks will be destroyed and the debt will remain. Therefore, the plan cannot be about making Greece more competitive.

Does saving Greece save the euro? Not at all. The euro would be better off without Greece and Greece would be better off without the euro. The Germans are even planning for a euro that doesn’t include Greece. With its own currency, Greece could default, devalue, inflate and start over. Argentina did it in the last 10 years. It’s not rocket science. Therefore, saving Greece is not about saving the euro.

If saving Greece is not about saving the euro, and if it’s not about reducing Greek debt, and if it’s not about making Greece a more competitive economy...then just what IS it about? Well, now that we’ve rule out what’s impossible, let’s look at what’s left.

Saving Greece means preventing a technical default...even though Greece has already defaulted in a real-world sense. So why is avoiding a technical default so important to the European Central Bank (ECB) and the International Monetary Fund (IMF)? The current plan certainly looks like a default. Under the plan, €100 billion worth of Greek debt would disappear, thanks to a debt swap agreement with private sector investors. The ECB has twisted enough arms to get creditors to accept a 70% haircut on their current Greek debt without actually calling it a default.

And yet, bizarrely, Greece’s creditors could be forced to accept this not-a-default default losses recourse to the credit default insurance they purchased. That’s right; they might lose 70% of their capital and still be denied a payout on the default insurance they purchased. That would be like an insurance company refusing to honor a fire insurance policy because only 70% of your house burned to the ground.

It gets kind of wonky here. But really, it’s about who gets to make the rules. To you and me and everyone else in the universe where common sense prevails, a non-voluntary 70% loss on your government bonds is a default. But you and I don’t get to decide what constitutes a credit default. That honour belongs to the International Swaps Derivatives Association (ISDA). The important thing to keep in mind here is that the ISDA is a trade group made up of banks and financial firms. Those are the firms that have the most to lose if Greek bonds default. It’s in the interest of the members of the ISDA that a non-voluntary credit event in Greece NOT be called a default.

It gets even murkier here. The ISDA essentially represents the global banking system. In Europe, the banking system is full of government bonds. Those bonds are nominally assets. If Greece defaults, it sets a precedent for how other countries might deal with unsustainable debt levels. This imperils the collateral of Europe’s entire banking system.

If you want to put it in simpler terms, let’s say that Europe’s banking system is full of rotting meat. Some investors bought that meat thinking they were going to get prime rib. But they can smell the stink of the meat from a mile away. They want to be compensated for the bad meat. The ISDA, which owns the freezer in which the meat went bad, says, “Well, we’ve decided the meat isn’t bad after all. And you have less of it than you thought anyway, as of now.”

This is a crude analogy. But this is exactly what happened last week. A “determinations committee” of the ISDA ruled that Greece’s default is not a default. The committee determined that “no credit event has yet occurred” for holders of credit default protection on Greece.

You can see the basic problem: everyone else knows that if Greece defaults (officially), the value of other government bonds in Spain and Italy and Portugal will plummet too. A Greek default wouldn’t be important because of the size of the default (although French and German banks would stand to lose a fair bit). It would be important because it would begin the process of blowing up bank balance sheets all over Europe.

When you realize that the ISDA and the ECB and the EU are in league to save their financial skins, you realize that the Greek rescue plans is about preventing other countries from realizing that default is an option. In fact, it’s not even about preventing the realization. It’s about making it impossible for a country to default on its obligations...even if it means erasing the word “default” from the English language.

If the centralized European Welfare State model is to survive, banks must not take losses on their government bond holdings. Individual and private investors, on the other hand, will be forced to take losses through a “collective action clause.” This clause allows your securities to be revalued without your consent if a majority of other bondholders agree to it.

Now we’re coming to the real nuts and bolts of what’s at stake. The technocrats in Europe are at war with private investors. The members of the ISDA are in league with the technocrats to preserve their system. That part is easy to understand.

The technocrats are employed by government and get to spend your money. This system is good for them. It’s good for the members of the ISDA too. Loaning money to the government is good business. Collecting rent off the expansion of credit is easy money. They want the system to last as well. Who is the system not good for? Everybody else who’s on the outside looking in. Investors who want their capital to be productive are out of luck. And taxpayers who question the value of austerity measures and debt reduction plans that don’t really reduce debt are also out of luck. No wonder they are angry.

We’ve come a long way, then. Greece isn’t about saving Greece. The only reason something so small and insignificant could matter so much is that it matters in a way no one is willing to say. It’s about the subversion of sovereignty and democratic processes by removing decisions from people and giving them to trans-national financial elites. It’s about preserving a global system that’s based on the accumulation of debt and growing government power because there are two groups of people who benefit tremendously from that system, even if most people don’t.

This is simply the latest example of corrupt government operatives colluding with the financial elite to steal money, liberty and big chunks of “the pursuit of happiness” from “we, the people.”

Regards,

by Dan Denning,
for The Daily Reckoning

You heard it 1st @timelessfx

•GREECE ISSUES STATEMENT ON DEBT SWAP

2012-03-09T00:03:00.000-08:00

The biggest sovereign debt restructuring in history is now, well, history. The headlines are finally come in:

GREECE COMPLETES DEBT SWAP
GREECE SAYS EU172 BLN OF BONDS TENDERED IN SWAP
GREECE GETS TENDERS, CONSENTS FROM HOLDERS OF 85.8%
GREECE SAYS 69% OF NON-GREEK LAW BONDHOLDERS PARTICIPATED

We learn that €152 of the €177 billion in Greek law bonds have tendered, which is 85.8%. This means that €25 billion in Greek law bonds have not - these are the hedge funds that could not be Steven Rattnered into participating, and will now sue Greece for par recoveries.This is also the number that ISDA will look at today to determine if, in conjunction with the CAC, means a credit event has occurred. And yes, the CACs are coming, as is the Credit Event finding: by http://www.zerohedge.com/

AudUSd 07/03/2012

2012-03-07T10:11:00.001-08:00

Lets start with the Daily being Correctively Bullish ( the only thing that worries me is that the aud has failed to rally back to the Larger medium Line so this signals a drop to the base line EMMMM!!!

Although this trade is still in its infantacy on the 4hr time.
I took advantage of the weekly Pivot support @ 1.05392 using the 4hr Anchor System
We had RBA keeping intrest rates the same @4.25
As the drop in the audusd slowed down and the dolla index peaking today @ 73.200 I took advantage

A 4hr fractral at A wkly support level 1.05392
A True swing buy signal warning us of a possiable surge to the 8Dema. A close above the 8Dema @ 1.0572 which also happens to be montly s1 turn resistance @ 1.05821 a break above there
Will continue the reversal upwards
But not so fast we have unemployment rate and change due out later today so will have to waite and see.
So we are still correctively bullish on the daily (see rules above) untill 1.05821 montly pivot can be recaptured and held

Hrly Below
You can see Yellow 4hr confirm push above 50 while the stochastics hrly dips to the up side
4hr blue line rsi rising
volume surge not great on the hrly but i did say this trade is still young will have to want and see what happens in th e market and employment figure results draws closer
P.s i have to go down to the 5 min time frame to get entry not something i ususally do but becasuse the trade is only in its potential stage i took the chance with tight stops . presently, my stop is at break even.

pls comment

Q&A: Greek debt swap

2012-03-07T04:48:00.001-08:00

Greece is only hours away from its latest make-or-break deadline - to reduce its massive debtload.

The country's government secured a second bailout worth 130bn euros (£110bn; $173bn) from the European Union and the International Monetary Fund last year and this was ratified last month.

But to get its hands on the money, it must get its private sector lenders to agree to take a loss on what it owes them.

Otherwise it won't get the aid it needs to keep it afloat. And that would mean the prospect of an imminent and disorderly default, and possibly even an exit from the euro.

The deadline for the debt swap is 2000 GMT on Thursday.

Greece was bailed out to the tune of 109bn euros back in 2010.

But by the middle of 2011, it became clear that this was never going to be enough for Greece to pay off its massive debts as its economy shrinks.

So Greece's benefactors - the International Monetary Fund and the other eurozone governments - agreed a second bailout worth 130bn euros.

But one of the key conditions was that Greece would reach a deal with its existing private sector lenders to reduce its debt.

This would be done through a swap of old bonds with newly-issued bonds that would be worth a lot less and pay less interest.

After months of negotiations between the Institute of International Finance (IIF), which represents most of Greece's private sector creditors, and the European Central Bank - which also owns a lot of Greek debts as a result of efforts to prop up Greece's banks and its bond market - a deal was finally reached in February.

Private holders will take a 53.5% nominal loss on their Greek debt - which works out to a real loss of about 74% after taking into account the loss of future interest payments, and the extra time being given to Greece to repay its reduced debts.

That means Greece wipes out what it owes on more than half of its 206bn-euro mountain of debt.

The 107bn-euro losses - the "haircut" - being allocated to lenders, along with another huge package of public sector spending cuts, aim to reduce the Greek government's total indebtedness from 160% of GDP now to 120.5% by 2020.

What is the issue now?

As the deadline approaches, no-one is entirely sure if the deal will come to pass.

Major banks such France's Societe Generale and Italy's UniCredit - both of whom have seen large write-downs on their Greek holdings triggering steep falls in their share prices - have said they will participate.

But others, including some Greek pension funds, have said they will not.

To add to the tension, the IIF - which agreed the broad terms of the deal - has refused to say how much Greek debt the members of its steering committee hold.

Members include banks BNP Paribas and Deutsche Bank, and insurer Allianz.

Reports have also said that a quarter of Greece's privately-held debts are owned by hedge funds, which can bet on declines in the markets, unlike mutual and pension funds.

No-one is quite sure what these secretive funds will decide to do.

One piece of good news is that a global financial body, the International Swaps and Derivatives Association, announced last week that the debt write-off would not constitute a default.

A ruling of a "credit event" - a default - would have meant insurance against bond losses, called credit default swaps, would have been paid out.

That would have caused further losses and uncertainty for already fragile financial institutions.

What needs to happen next?

Greece wants 90% of holders to accept the offer.

They think this is likely to happen because the deal has a few sweeteners - such as upfront cash payments, a guarantee on some of the debt repayments from the eurozone bailout fund, and a warrant offering a higher rate if the Greek economy does better than expected.

For the deal to pass, the take-up must be above 75%. This would allow Greece to activate a Collective Action Clause (CAC) in its bond contracts that would force the rest of its bond investors to accept the deal.

To complicate matters even further, the CAC rules differ between Greece's international bonds governed by English law, and its roughly 177bn-euros worth of bonds that are governed by Greek law.

Even if Greece manages to get past the 75% threshold, it would still consult with its bailout lenders and private sector lenders again if total acceptance is less than 90%.

This is because it wants to try to prevent a "credit event", which might happen if it uses the CACs to force lenders to accept losses.

If the overall acceptance for its Greek and English law-governed debt is less than 75%, then the deal is off and we are all back where we started.

And if the deal does not happen?

Greece is continually having to pay back what it owes to creditors, which adds urgency to all these conversations.

The nation's next big payment comes due on 20 March, when it owes 14.5bn euros.

It cannot afford this unless it gets the money from the new EU and IMF bailout - and it cannot get that money without the debt swap.

So if the debt swap does not happen on Thursday as planned, Greece and its creditors would have to come up with a Plan B (or C) pretty quickly.

Or default.

http://www.bbc.co.uk/news/business-17283783

news (Dow Jones)

2012-03-01T05:26:00.001-08:00

8:24 (Dow Jones) USD/CAD is 0.4% lower heading into the North American open, changing hands around C$0.9858, helped by a global glut of PMI data that did little to spark new anxieties. China's index even topped expectations, rising 0.5 points to 51.0. CAD appears on firm footing as we head into a steam of 8:30 am data from both sides of the border -- with the much-anticipated initial jobless claims report, and personal income and consumption data due in the US, and Q4 current account balance data, and industrial and raw materials price indices due in Canada. Positive reports could send USD/CAD lower, but support lies around Wednesday's low of C$0.9845. Resistance, meanwhile, comes in just before the C$0.99 handle. (karen.johnson@dowjones.com)

DAILY TECH OF MAJORS

2012-02-29T05:21:00.000-08:00

AUDUSD

EURUSD

GBPUSD

USDCAD

USDJPY

Timeless Trading: Shhhh!!!!EurChf Daily in a possiable Stage of Acc...

2012-02-17T05:13:00.000-08:00

Timeless Trading: Shhhh!!!!EurChf Daily in a possiable Stage of Acc...: Been Tracking This 1 4 since yesterday although still early i placed a small track just to monitor Price Action. Keeping a close eye on d...

DAILY

news

EUR/CHF continued to be bounded in range of 1.2031/2127 last week, engaged in sideway trading. As noted before, a short term bottom is in place at 1.2031 but there is no scope for a rebound yet 1.2132 resistance intact. EUR/CHF would possibly engage in range trading between 1.2 and 1.2132 in the near term. On the downside, we'd maintain that SNB should remain determined to defend the 1.2 floor in the cross. Hence, any downside should be contained there. EUR/CHF remains in a "buy zone". But the timing of rebound could be until confirmation of the next SNB president and when markets revive speculation of SNB raising the 1.2 floor. When that happens, EUR/CHF would likely be pushed through 1.2132 resistance back towards 1.25 level.

In the long term picture,after SNB intervention, the long term down trend in EUR/CHF is put into a halt at 1.0061. While the whole rebound from 1.0061 was strong, there is no scope of trend reversal yet. And, we'd expect strong resistance inside 1.2399/3243 resistance zone to limit upside unless there is a drastic turn in risk sentiments. But in any case, downside should be contained above 1.2, the floor set by SNB.

22/02/2012
exit long eurchf

Shhhh!!!!EurChf Daily in a possiable Stage of Accumulation

2012-02-17T04:55:00.000-08:00

Been Tracking This 1 4 since yersterday although still early i placed a small track just to monitor Price Action. Keeping a close eye on development.

USDCHF seducetively Beautifull Bearish Butterfly

2012-02-16T04:02:00.003-08:00

USDCHF Beautifull Bearish Butterfly, love the angles on this 1, still i will not be just yet need more ocnfirmation but keeping a close eye on this 1,

Got some doji's However we are bullish 4hrs and this may only be a retracement to continue Bull objectivefor higher prices, we have a rounding bottom. so in looking at the overall story i may use this signal to extablish long position.

Pls comment

On Sterling, UK Inflation & few charts

2012-02-15T04:47:00.000-08:00

Read this 1st

http://ashraflaidi.com/ hot-chart/ ?a=3117

Exchange Rates

The Real Exchange Rate

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If you put 100 pounds in a bank, and earn 8% interest over the year (eight pounds interest), this is only the nominal rate of interest. What you really get - the real rate of interest - depends on the rate of inflation as well. If inflation was running at 5% over the year, then the real rate of interest was only 3% (8% − 5%). Your 100 pounds became 108 pounds, but goods and services costing 100 pounds a year ago now cost 105 pounds. In real terms you have only really made 3 pounds.

The nominal exchange rate between, say, the pound and the dollar is simply the amount of dollars you can buy for each pound as dictated by the price in the foreign exchange markets. To find the real exchange rate, we have to allow for relative inflation rates in the two countries, just as you do with interest rates, of growth, or spending, or incomes or anything where the price rises distort the picture.

In this case, the picture that is being distorted is the UK's competitiveness, in terms if trade, with other countries. If the trade weighted index for sterling fell by, say, 5% over a given year, this would make UK manufacturers' exports 5% cheaper in foreign countries. If sterling falls, UK manufacturers are happy! But if, over the same period of time, prices in the UK rose by 5%, the benefit in terms of the reduced value of the pound for UK manufacturers would be cancelled out by the higher domestic prices.

The real exchange rate tries to take relative changes in countries' inflation rates into account. Look at the formula below:

In this formula, the 'world' price level is an average of the price levels of the sixteen countries that are included in the trade weighted effective exchange rate. Assume that the UK's effective exchange rate stays constant over a given year. If UK inflation is 10% over that year, and world inflation is only 7%, then the real exchange rate will rise by roughly 3% (10% − 7%). The exact rise would be 2.8%. See if you can work out why it is not exactly 3%. Read through the following example, trying to understand the principles,click to reveal answer when you have finished.

Assume that the RPI in the UK is 100 and the RPI for the rest of the world also happens to be 100. Hence:

In the example above, we said that UK inflation was 10% over the given year. This gives a new RPI of 110. In the same way, the new RPI for the rest of the world will be 107. So the new ratio of price levels will be:

So the ratio has risen by 0.028. As a percentage (multiplying by 100) this is 2.8%.

The problem for the UK during the 70s and 80s was that, regardless of how low the effective exchange rate was, its inflation rate tended to be higher than the world average. This caused the real exchange rate to rise (for a given effective exchange rate), making UK exports relatively more expensive abroad and so less competitive pricewise

http://www.s-cool.co.uk/category/subjects/a-level/economics/exchange-rates

GBPUSD CHANNEL DWN BREAK OUT ? Luv U Market Makers

2012-02-15T03:39:00.000-08:00

GBPUSD CHANNEL DWN BREAK OUT ?

ON BAD NEWS Love you Market Makers

As Market Makers create the Market

2012-02-14T04:07:00.000-08:00

As maket makers create the Market Up i am positioned to sell with them

gbpusd

GB/USD 4hr view

2012-02-13T15:29:00.000-08:00

Another view GBPUSD 4hrs
£ falls to raising medium Line@ 1.57241.. Will we fall through or bounce up

AUDUSD Daily and 4hr chart

2012-02-13T14:11:00.000-08:00

Aud/usd Daily

4hr Chart

Today 15/02/2012

Tricky 1

but i sold the fake move by the market makers

News:

Daily over view

2012-02-13T05:09:00.001-08:00

Price Action

USD/JPY ranges between 77.5--77.75
AUD/USD runs through 1.0750 on better risk flows
GBP/USD stalls at 1.5800
EUR/USD stalls ahead of 1.3300

 Euro advances on relief over Greek parliament vote
    * Hurdles remain ahead of euro zone finmins meeting
    * Voluntary private-sector involvement a worry

    By Luciana Lopez 
    NEW YORK, Feb 13 (Reuters) - The euro rose against the
dollar in light trading on Monday after Greece approved new
austerity measures, but worries about   hurdles in the country's
bid to avoid a disorderly default ate into gains .  
    The Greek parliament passed a package of wage,
pension and job cuts on Sunday, boosting hopes that Athens would
secure more rescue funds from the European Union and
International Monetary Fund ahead of a March bond redemption.
  
    "You got that knee-jerk positive reaction (in the euro), and
that's ultimately starting to fade right now," said Brian Dolan,
chief currency strategist at Forex.com. 
    "There's market suspicion that Greece will meet the targets
it's setting itself, and that we're going to be seeing a replay
of this several months down the road," he added.  
    Markets aren't the only skeptics. Greece must also convince
euro zone finance ministers, who meet on Wednesday. 
    The ministers still require Greece to explain how 325
million euros of this year's total budget cuts will be achieved
before they agree to the 130 billion euro bailout.  
    "We think that Greece is going to get their money by March
20, but we still think the euro's going to sell off," said David
Watt, senior currency strategist at RBC Capital Markets in
Toronto. 
    Volumes were light, analysts said. 
    "Most people are just keeping their heads down, they're
doing things when they have to do it," Watt added. 
    The euro was up 0.36 percent at $1.3220, off a
session high of $1.3283. The single currency faces resistance at
last week's two-month high of $1.3322 and the 100-day moving
average at $1.3325, while traders said a large option expiry at
$1.3300 was likely to restrict further intra-day gains. 
    Analysts at Commerzbank said their euro/dollar order book
model showed a greater density of sell orders at current levels,
adding the $1.3090 area was where the balance became more
neutral, and any downside move may run out of steam there.  
   
   
    Traders were also wary of pushing the euro higher because of
uncertainty over whether private creditors would agree to write
down the value of their Greek holdings. Doubts persist whether
the necessary near-100 percent acceptance can be achieved
without triggering a credit default. 
    "Voluntary private sector participation is unlikely to be at
the levels the IMF and European authorities are looking for and
this is one of the reasons for our bearish view on the euro,"
said Chris Walker, currency strategist at UBS.  
    Even if a voluntary agreement is reached, a debt swap could
take three to four weeks to finalize, leaving a tight deadline
before Greece faces a March 20 bond redemption of nearly 15
billion euros. 
    The euro gave up early gains versus the yen to
trade near flat at 102.32 yen. 
     
    BROKEN PROMISES 
    Germany's finance minister, Wolfgang Schaeuble, said in an
interview with German newspaper Welt am Sonntag that Greek
promises on austerity measures were no longer good enough
because so many vows had been broken.  
    Still, Greece effectively voting to stay in the euro by
passing the measure has provided short-term relief to investors. 
    Fear of a major banking crisis has also subsided as the
European Central Bank was set to provide an unlimited amount of
three-year loans later this month after its first operation in
December. 
    The bank's second offer of three-year funds to banks will
draw 500 billion euros of bids, a Reuters poll of traders
showed, topping the 400 billion predicted in the same poll last
week.  
    Analysts said these factors have prompted institutional
investors to scale back on bearish positions in the euro. But
any bounce above $1.35 could see fresh shorts established. 
    Speculators have been cutting their net euro short positions
for the past two weeks, to 140,593 contracts last week from a
record 171,347 contracts two weeks previously.  
    "If euro/dollar goes up to $1.35, it would be a good level
to short it," said Stuart Frost, head of absolute returns and
currency at fund manager RWC Partners. "Once it gets down to
$1.30 people will again buy it. So it's a range play."

GBPUSD daily bearish Butterfly

2012-02-07T04:56:00.000-08:00

Hi with so much going on in the news of late its hard to tell whether this patter will work or not. as
Mr Price is advocating a bullish view for the pound. We are above the weekly pivot of 1.57064, however could the rally be exhasted as the Daily stochastics suggests and the daily fractal points out a high @ 1.5897. the market is not giving away many clues as a possiable drop or Raise squares up as 50/50 bulls and bears. Still on the safe side i will have to say we are above the 55DMA and the 8DMA so any move to the down side is classed as corrective.
untill 1.5576 is broken
i've entered @ 1.58114 with a breakeven stop.

wow pattern still in play

The UK currency was expected to be kept in check ahead of a
Bank of England inflation report on Wednesday that may give
clues on the likelihood of more monetary easing.

 The BoE last week pumped another 50 billion pounds into the
economy to try to stimulate growth under its quantitative easing
(QE) programme. Although the central bank sounded a little less
pessimistic about the economy, investors were wary of building
bullish bets before Wednesday's report.

 "It looks like pressure is on the pound until we get through
the Inflation Report on Wednesday morning," said Lee McDarby,
head of corporate dealing at Investec Bank.

 "It wouldn't be surprising to see more QE from the Bank of
England in the months ahead."

 Morgan Stanley analysts told clients that they aimed to sell
sterling at higher levels towards $1.5960, with a target of
$1.5460, given the prospect of further QE and the UK's large
exposure to the euro zone.

 Inflation data on Tuesday will also be key and is expected
to show a further dip in UK price pressures in January. 
Lower inflation would make it easier for BoE policymakers to
justify further monetary easing as their forecasts have shown
prices dropping back sharply from highs hit last year.

GBPUSD 4HR TIME FRAME

EUR 4HR TRIANGLE ?

2012-02-03T01:07:00.000-08:00

TOP DECLINING , BOTTOM RISING

If this move works the SM (smart money) might try and fake every one on good news and sell at Resistance

Just in case Daily trade is on the up side this morning so be careful Waite for clear signal.

Eurusd Daily Elwave count

2012-02-02T16:46:00.000-08:00

EURUSD Daily

On the upside above the weekly pivot of 1.31111 we are still now correctly bullish as Mr price is above the 55DMA on the 4hr time frame and kissing the daily with a target break out above 1.3233
I believe on the elwave front we are currently in the 4th wave up. with a 4th wave exit is currently @ 1.3230 .
on the down side a break of 1.3020/60 we should see the decline in to the 5th wave down begin the only thing is wave 4 can still extened up to the 1.40 area which is the june 30 2011 consoldation zone low wave 1 and the 4th wave can not go beyond wave 1

At the moment Supply volume strenght to the downsid is not on the cards not sure what we are waiting for? and Prices have been kept upabove the weekly pivot
Possiably we are still in the accumlation phase setting us up for distrubition
i'll waite for a clear signal with over brought stochastics 1hr and 4hr before attempting a sell. at the moment neutral

Comments welcome
:-0

People are Awesome

2012-01-28T16:56:00.001-08:00