Forex Crunch

Forex Trading Hours - When to Avoid Trading
Forex Links for the Weekend
EU Summit Optimism Weakens Dollar

Forex Trading Hours - When to Avoid Trading

Posted: 19 Jun 2009 03:34 PM PDT

Some hours are better to trade than other hours. Here’s a list of the most volatile trading hours for each of the 8 popular currencies.

There are times when the market doesn’t move at all, and it’s quite boring. This is usually during the Tokyo and Sydney sessions.

There are times which are quite wild and unexpected, and your stop loss limits can be breached temporarily, throwing you out of a generally good trade.

In general, the best trading hours are 10:00 to 12:00 GMT, when trading volume is high, but there aren’t too many indicators.

Everybody knows about the most dangerous hour: 12:30 GMT (or 8:30 in New York) when American indicators are usually released. On the first Friday of the month, this is especially dangerous..:)

Here’s a list of the most volatile hours for forex trading for each of the 8 major currencies:

Australian Dollar: 01:30 GMT. This is the time when most indicators are published. 04:30 also sees some indicators.
Swiss Franc: 07:15 GMT. While this is the strongest hour, publications happen many times at 7:00 or at 7:30, aroung the major hour.
British Pound: 8:30 GMT. Here, the timing is quite strict. Almost all the indicators are published at this hour. Only few indicators are not exactly at this time. 23:00 GMT (midnight in Britain) is also notable for some releases, but the major ones are at 8:30 GMT.
Euro: 9:00 GMT. European indicators often come from Germany and France, and therefore the hours vary. Indicators start as early as 6:00 and end no later than 10:00.
Canadian Dollar: 12:30 GMT. Similar to its neighbor in the south, Canada releases many figures at this time. Note that the releases vary in Canada: some indicators are released as early as 11:00 GMT, and as late as 14:00 GMT.
US Dollar: 12:30 GMT. Most indicators, including the king - Non-Farm Payrolls are published at this time, one hour before the stock exchange opens. More than a few publications are made at 14:00 GMT, an hour and a half later. These 90 minutes are very volatile. Trading volume is very high. Banks in New York, London and all across Europe are trading at this time.
New Zealand Dollar: 22:45 GMT. In New Zealand, this is the most popular hour. Another hour that concentrates data is 21:00 GMT.
Japanese Yen: 23:50 GMT. This is very significant. Almost all the indicators are published at this time. Only a small group of releases are made at different times, with 23:30 being the most frequent.

Note that all the times were made during the summer in the northern hemisphere. You should shift one hour down during the winter.

Forex Links for the Weekend

Posted: 19 Jun 2009 02:00 PM PDT

Here is a bunch of interesting forex-related articles. All of them have a scope of more than one week of trading. This time, the list is somewaht longer. Many interesting reads…

Kathy Lien shows how the chart of continuing jobless claims signals that the end of the recession is near.
James Chen is back, and examines the substantial bearishness in the USD/JPY.
Adam Kritzer talks about the interest rate in the US, and asks if it will go higher. My answer Yes - an interest hike will come sooner than later.
Macro Man asks 20 macro-economic questions. Note the question about the EUR/USD.
Casey Stubbs explains why 95% of traders lose money.
Big Bruv specializes in the GBP/JPY. If you’re into this cross, you may find his articles very interesting. The linked article is the most recent one.
James W talks about forex exit strategies. Interesting…

Have a great weekend.

EU Summit Optimism Weakens Dollar

Posted: 19 Jun 2009 10:22 AM PDT

The US dollar had a strong week, with a strong start. It later weakened but remained higher than other currencies. The EU summit optimism erased the gains near the end of trading.

The US dollar had a strong start to the forex trading week. Two unexpected geo-political developments helped the dollar.

The Russian renewed backing of the US dollar as the world’s reserve currency promised a strong start for the dollar. Alexei Kudrin said that there’s no alternative for the dollar.

Second, the turmoil in Iran following the controversial election results caused worries about stability in this rich oil producing nation. When fear is near, the dollar gets gear.

The EUR/USD feels political news more than others. This pair fell below 1.40 and reached the strong resistance line of 1.3750 before bouncing back.

American Indicators - No Big Surprises

Later in the week, “normal” events such Building Permits and Unemployment Claims in the US came out as expected. PPI was disappointing, rising only by 0.2%. Also TIC Long-Term Purchases recorded only 11.2 billion. On the positive side, the Philly Fed Manufacturing Index was much better than expected, and fell by only 2.2 points.

An interesting release was Core CPI, which rose by 0.1%, exactly as expected. Maybe the interest rate hike I was seeing is still beyond the horizon…

All in all, indicators were quite expected, and the dollar went up and down during the week. On a rather slow Friday, the dollar was slightly higher than last week’s close. It is seen across the board.

Taking the Euro, EUR/USD had stabilized around 1.3900-1.3950.

And then came the EU summit.

EU Summit of Hope

Leaders of the European Union met in Brussels and began talking about the end of the crisis. After spending about 5% of GDP in stimulus plans, they expressed optimism that the old continent is seeing first signs of a sustainable economic recovery.

This fresh optimism ignited risk appetite. The US dollar fell against other currencies. EUR/USD now trades at around 1.40, near its value at the beginning of the week.

Do you also think that the EU summit brought the dollar down? Or is it merely a Friday effect?