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The sterling has been negatively affected in currency trading on the FX market today as Moody’s has downgraded Ireland. The euro saw a brief hiccup as the downgrade took place, but German Ifo data has been helping the euro overcome in forex trading.

The U.K. pound, though, is not so lucky in forex trading. Even though Ireland is part of the euro zone, the sterling is being affected in currency trading due to British interests in Irish banks. Banks are the problem in Ireland, and the Irish government is standing behind the banks: Hence, the downgrade. And the sterling is being affected.

It will be interesting to see how long this state of affairs lasts, though. The U.K. pound may pick up against the U.S. dollar if forex traders decide that the latest tax cut extension could endanger the U.S. fiscal situation.

Risk appetite has taken a beating at the start of this week as news broke that South Korea’s military have resumed live firing exercises on an island close to the border with North Korea. Tensions between the two neighbours have been of huge concern since last month’s deadly shelling of Yeonpyeong by North Korea’s army, and in turn, Asian equity indices have taken another nosedive; Shanghai Composite was down -1.41% on the day, the Nikkei -0.85%, and gold has surged back up to $1384.   Given the slump in risk-correlated assets, it’s unsurprising that currency markets awoke to a subdued EURUSD; but the heavy trading cannot be solely attributed to the Korean news given the swirling headlines about contagious sovereign debt downgrades across Europe. Moody’s set the tone of the Christmas season with a stark 5-notch downgrade of Irish debt on Friday and warnings of future downgrades to both Ireland and Spain. Standard & Poor’s has also announced it is reviewing rating of Irish, Portuguese and Greek debt. Full article…

EXPECT NOTHING: APPRECIATE EVERYTHING

Hello:

This article would be my last article this year. Although there is a backlog of articles to be posted, I’ve decided to stop posting articles until the early part of January 2011. This doesn’t mean that I’d stop trading or sending signals to my subscribers. I’ll be attending to my subscribers. I’ll continue trying to make sure that my subscribers receive very good care. And I’d like to say this to my subscribers: “You’re really doing a good job making effort to follow my recommendations. Please keep it up. You’ll likely feel a sense of satisfaction in knowing that you’d assisted someone in a practical way. It’s a great experience to do what’s right and share your knowledge with others. Happy is the one acting with consideration toward those who need it.

From the bottom of my heart and the depth of my soul, I’d like to express my profound gratitude to the administrators, analysts, instructors, and trading signals providers at FX Instructor, LLC; all the members of staff at Fxstreet.com, the administrator at Trade2win.com, the administrators and staff members at Forexpeacearmy.com; the administrator at Ituglobalforex.com, and the administrator at Elitetrader.com.

Full article…

Do you trade all around the year or do you ever take a week or two off? Is this a good time to be taking a Forex vacation?

I don’t know what’s got me thinking in this direction but it seems to me that for many traders, life revolves around the market. Their head, dreams, thoughts, and heart are filled with charts and indicators, Stop Loss and Take Profit prices.

Maybe it will be good for you if you decide to take some time off and let Forex be for a while. Maybe it will clear your mind and let some of the training you got this year really sink in for 2011.

If you feel like you could do with a vacation, this may be as good a time as any to take it. For one thing, it’ll soon be  Christmas, and what better time than this to take some time off? In addition, the market may not be as predicatable as usual the closer we get to the Christmas holiday as many of the regular traders will be on their vacations as well. Even financial institutions may not be running at full manpower.

So, I recommend taking a few weeks off in which you should do your best to “forget” about Forex.

Full article…

Here’s my daily Forex AM program where I discuss my daily trading outlook as well as some helpful lessons about the way I analyze the markets and set up my trades.

I have really been emphasizing directional bias and today’s show is no exception. The directional bias analysis of the dollar has been especially key to my recent set ups and choice of time frames.

Another highlight from today’s show is the on-going set up that has patiently been waiting for a move lower towards parity on the daily USD/CAD.

Full article…

There were mixed opinions going into today’s Riksbank meeting; ultimately, the consensus forecast was correct as policymakers hiked 25bps for a second consecutive meeting, taking Swedish interest rates up to 1.25%. However, this prediction was not unanimously held; of the 21 analysts surveyed by Bloomberg, 5 believed rates would be kept unchanged – and it appears this heterogeneity has been reflected in the actual vote as well. Deputy Governors Ekholm and Svensson both pushed to keep rates on hold, and it is perhaps this cautious attitude that prevented the forecasted repo rate path being revised higher in the accompanying statement. Instead, the statement reiterated that they saw the repo rate quarterly average at 2.0% in Q4 2011, the same as it was in the last statement. EURSEK actually moved higher after the release (perhaps reflecting the disappointment that a revision to the future rate path was not forthcoming), but we feel that SEK is still one of the more attractive prospects going forward. Real interest rates remain amongst the lowest in the G10 and recent data out of Sweden has been excellent. Full article…