DfxTrade is a new on-line Forex broker that was added to my site today. According to its website, the company is based in Hong Kong and operates globally except for the residents of the United States. For some odd reason their domain name is registered only until June 2010 (less than a half of a year left), which looks to be a rather disturbing trend among the new brokers. DfxTrade offers a custom Forex trading platform with the possibility of using custom indicators. It’s a stand-alone platform and it needs to be downloaded and installed first. MetaTrader platform isn’t supported by this broker. Other highlights are:

• PayPal, wire and credit cards as deposit methods.
• $200 minimum account size to start trading and 0.1 lot minimum trade size.
• Spread vary between 2 and 3 for EUR/USD.
• Offers trading with gold and silver.

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Carry trade is a popular trading strategy that is based on buying a high-yielding asset with the low-yielding asset, so that the cost of loan is less than the yield of the asset you’ve bought. In Forex, carry trade is based on buying a currency pair with a high positive interest rate difference (swap) or selling a currency pair with a high negative interest rate difference. The good current examples of the long carry trade pairs are AUD/JPY, ZAR/JPY, HUF/JPY and of the short carry trade pairs — USD/ZAR and USD/HUF. Often such trades yield not only the interest rate difference but also a normal position profit based on the buy/sell price difference; this happens when the market becomes driven by the carry traders. But this strategy is also quite dangerous as the interest rates fluctuate and the currencies with the high yields are usually very unstable. During my more than 4 years long experience as a Forex trader I had a carry trade position open only once and it wasn’t very successful. And how about you?

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The long-term support line formed at a weekly timeframe chart of the EUR/CHF currency pair now holds even more strength as the price has shown a very interesting trend consolidation pattern during several last weeks. As you can see on the chart the currency pair remain in a fading bearish downtrend with each new candle smaller than previous. A weekly close below the support line may signal a strong downtrend tendency, while the sudden jump in the price rate may be considered as a beginning of the long-term upward trend. Click on the image below to see the full-size chart:

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The long-term support line formed at a weekly timeframe chart of the EUR/CHF currency pair now holds even more strength as the price has shown a very interesting trend consolidation pattern during several last weeks. As you can see on the chart the currency pair remain in a fading bearish downtrend with each new candle smaller than previous. A weekly close below the support line may signal a strong downtrend tendency, while the sudden jump in the price rate may be considered as a beginning of the long-term upward trend. Click on the image below to see the full-size chart:

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Read the rest of Consolidation at Support Line on EUR/CHF W1 — March 7th 2010 (18 words)

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The EUR/USD currency had a change on its positive trend today despite a fall in the U.S. number of pending home sales, as factory orders rose in North America and mainly thanks to an ECB statement affirming that stimulus will last as long as they are necessary to help the region’s economy to increase its pace of recovery. EUR/USD is falling and currently trades at 1.3565.

Pending Home Sales, a forward-looking indicator based on contracts signed in January, fell 7.6% to 90.4 from a revised number of 97.8 in December. The actual figures came considerably below forecasts which expected an increase of 1.4% in pending home sales.

U.S. factory orders advanced 1.7% in January from a previous revised advance of 1.5% in December. Forecasts expected a less expressive advance of 1.4% for new orders.

Nonfarm business productivity was revised from 6.2% to 6.9% during the fourth quarter of 2009, while forecasts expected the rate to be at 6.2% like the previous report.

Initial jobless claims were at 469k last week from a previous revised data of 498k applications. Forecasts were near the correct number expecting 472k applications.
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The dollar pared much of the euro’s advance from last week as several reports in the U.S. indicated that economic improvements in the country are far more positive than the situation in most Eurozone member countries, as manufacturing increased for another month and personal spending rose beyond forecasts. The EUR/USD currency pair trades currently at 1.3505.

Personal income rose by 0.1% in January from a previous revised increase of 0.3% in December and below forecasts that suggested a rise by 0.5%. Personal spending rose considerably more, showing an advance of 0.5% from a previous one of 0.3%, while forecasts expected a growth by 0.4%. Core PCE price index remain unchanged while forecasts expected a rise by 0.1%.

ISM PMI Index was to 56.5 in February with a slighltly lower result for this index from a previous reading at 58.4. Forecasts expected this manufacturing index to be at 57.7. Readings above 50 mean expansion in the sector.

Total construction spending declined by 0.6% in January confirming numbers expected by forecasts, and from a previous decline of 1.2% in December.
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The dollar pared much of the euro’s advance from last week as several reports in the U.S. indicated that economic improvements in the country are far more positive than the situation in most Eurozone member countries, as manufacturing increased for another month and personal spending rose beyond forecasts. The EUR/USD currency pair trades currently at 1.3505.

Personal income rose by 0.1% in January from a previous revised increase of 0.3% in December and below forecasts that suggested a rise by 0.5%. Personal spending rose considerably more, showing an advance of 0.5% from a previous one of 0.3%, while forecasts expected a growth by 0.4%. Core PCE price index remain unchanged while forecasts expected a rise by 0.1%.

ISM PMI Index was to 56.5 in February with a slighltly lower result for this index from a previous reading at 58.4. Forecasts expected this manufacturing index to be at 57.7. Readings above 50 mean expansion in the sector.

Total construction spending declined by 0.6% in January confirming numbers expected by forecasts, and from a previous decline of 1.2% in December.
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The U.S. dollar posted its sharpest decline versus the euro today despite a gross domestic product report published today showed growth in the North American economy for last year’s final quarter. Existing home sales slid much beyond forecasts, allowing the euro to pare a good amount of this week’s losses. EUR/USD currently trades at 1.3674.

Preliminary GDP report for last year’s fourth quarter showed a growth of 5.9%, from the previous advance report that showed showed an increase of 5.7%. Forecasts expected a decline to 5.6%, being the GDP numbers an optimistic sign of recovery in the U.S. economy.

Existing home sales declined to a seasonally adjusted annual rate of 5.05 million units in January from a previous revised reading of 5.44 million units in December. The actual figures came considerably below forecasts that expected 5.51 million units sold.

Michigan Consumer Sentiment index declined to 73.6 in February from a previous reading of 73.7 in January. Forecasts expected this important confidence index to be at 74.0.

Chicago PMI rose to 62.6 in February from a previous reading of 61.5 in January. Forecasts missed out once again expecting a decline to 59.6 for this business barometer index.
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EUR/USD trend: sell.
GBP/USD trend: sell.
USD/JPY trend: buy.
EUR/JPY trend: hold.
GBP/JPY trend: hold.

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The dollar outperformed virtually all of the 16 main traded currencies as domestic reports ranging from manufacturing to housing showed better than expected numbers for the U.S. economy, boosting attractiveness for assets in the country as the economic growth accelerates. The euro erased yesterday’s gains as the EU is unlikely to fund a bailout for Greece to solve its budget deficit issues. EUR/USD is near the lowest level in 2010 and trades at 1.3608.

Building permits were at seasonally adjusted annual rate of 621k in January, showing figures below forecasts that expected 630k permits approved and from a previous reading of 653k (revised) in December. Housing starts for January were at a seasonally adjusted level of 591k from a previous revised rate of 575k in December. Forecasts expected housing starts to be at 580k.

Import and export prices published today showed an increase of 1.4% in import prices last month from a previous advance of 0.2% in December. Export prices rose 0.8 percent in January after advancing 0.6 percent in December.

Industrial production and capacity utilization rate rose in January. As industrial production increased 0.9% from a previous revised reading of 0.7% in December, utilization rate was at 72.6% from a previous revised reading of 71.6%. Forecasts were exact for the capacity utilization rate and expected industrial production to increase 0.7%.

Treasury budget report showed a deficit of $42.6 billion in January, compared to $63.5 billion in January 2009. This report came with better than expect figures as forecasts suggested the Federal budget balance to show a deficit of $44.2 billion.
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