China gets fresh chance to float the yuan

Economic gloom is deepening in China and abroad, forcing extraordinary measures. Responding to the euro zone’s debt crisis, for example, six central banks led by the U.S. Federal Reserve recently lowered the cost of emergency U.S. dollar funding for European banks. And at home, the People’s Bank of China cut the reserve requirement ratio for commercial lenders by 0.5 percentage points.

Rupee Overview 13th Dec

Buy @ 53.3 stop @ 53 tgt 53.55 - 53.8 intrday

Trading and sustain above 53 will bring to 53.9 - 54.4 - 55 in near term, where we are buying from 51.5 level and expect to halt at 55 around. CMP is 53.5 and hold long advise

USD/INR: Rupee yesterday which open at the level of 52.25 per$ failed to trade below 52.2 and traded side way to upsdei for the day and breached the higher resistance of 52.8 and closing was seen above 53 per$ which was the near term highe on closing basis. Today opening is seen positive around 53.2per$ where it failed to cross the lower level of 53 per$ and is trading at 53.36$ nearing the resistance of 53.4per$. If sustain trading is seen above 53.4 will bring to higher level of 53.8per$ to 54.5 per$ which will be just the extension target of the rise what we have been seen in past days. Where on lower side it’s not expected to trade below 52.8 per$ on closing basis and any dip will be buying opportunity where on higher side if sustain trading above 53.4per$ will spark the higher target of 53.8 per$ to 54.5 per$ in near term. Stochastic has reverted from the lower zone with positive intersection and is trading at 60% zone with positive intersection where buying can be seen in near term.

Statue and Italian Flag in front of Vittorio Emanuele monument.

Rome paid slightly less than 6% to sell 7 billion euros of one-year bills on Monday as appetite for short-term maturities, especially from retail investors, helped offset market pressure on Italian debt after last week's European Union summit.

Statue and Italian Flag in front of Vittorio Emanuele monument.

At 5.952%, the one-year yield was just below a euro lifetime record high of 6.087% hit at a mid-November sale.

In a bid to support key domestic demand for its debt, Italy held a so-called "BOT day" on Monday, with banks scrapping fees for retail investors who bought the bills at auction.

Demand for the bills totalled around 13.5 billion euros.

Rupee Over View 12 Dec. 11

USDINR Buy @ 52.3 Stop @ 52.15 tgt 52.5 - 52.7 per$..

Rupee on Friday closing was seen around the level of 52.25 per$ and on lower side low was tested at 52.18 per$, on higher side it has tested the level of 52.55per$ but failed to hold higher ground and correction was seen. Today opening is seen flat around 52.25per$ where it failed to cross the lower level of 52.15 per$ and is trading at 52.34per$ nearing the resistance of 52.4per$. If sustain trading is seen above 52.4 will bring to higher level of 52.8per$ to 53.26per$ which will be just the retracement of the rise what we have been seen in past days. Where on lower side it’s not expected to trade below 52.16 per$ on closing basis and any dip will be buying opportunity where on higher side if sustain trading above 52.5 will spark the higher target of 52.8 per$ to 53.5 per$ in near term. Stochastic has reverted from the lower zone with positive intersection and is trading at 60% zone with positive intersection where buying can be seen in near term.

Trading Call in Nifty 12th Dec 2011

Rajeev: Nifty Sell @ 4895 TGT 4875 4855 4835 Stop Loss 4815 CMP 4895 12/12/2011 9:23

The Three Trend line Strategy

The Three Trend line Strategy

Newcomers to trading the foreign exchange currency markets do well to accept the observation of experienced seasoned traders that the idea of a perfect Forex trading tool is an illusion.

While no perfect Forex trading tool exists, using a combination of tools to identify a converging of favorable market factors can yield a majority of high probability trades over a period of time.

Trendlines certainly deserve close consideration and many successful traders add them to their collection of Forex trading tools.

It should be stated at the outset that trendlines by themselves do not provide a strong enough signal to warrant making a trade. They are a useful addition and provide confirmation of signals from other tools. (See resource box for a visual example of using a trendline as a trade entry point)

The Three Trendline Strategy

Consider these three main types of trendlines you need to know and use if you are going to make any sense of trendlines.

Trendlines are lines drawn across significant lows in an uptrend, and significant highs in a downtrend. The more candles to the left and right of the lowest candle in an uptrend or the highest candle in a downtrend make the low or high point more significant.

1. Short Term Trendlines

Draw these lines across the most recent two lows (for an uptrend) or highs (for a downtrend). These are best observed on a smaller time frame such as a 15 minute or 30 minute chart.

2. Medium Term Trendlines

These are best observed on a higher time frame such as a 60 minute chart. Again connect the nearest significant low to current price action to the previous significant low in an uptrend or the nearest significant high to current price action to the previous significant high in a downtrend.

3. Long Term Trendlines

Use higher time frames such as the 4 hour chart or the daily chart to draw long term trendlines using the same method described for Medium Term Trendlines.

The long term trendline can be a powerful Forex trading tool. Keep in mind that the daily chart is used prominently by traders of big institutions. Such traders probably do not engage in small moves on an intra day level. They are more concerned about taking a position on a currency pair.

The daily chart is consulted by them when making decisions. So by drawing a trendline on a daily chart you can present to yourself graphically just where price is and where it is likely to either possibly bounce and retrace or continue with the current momentum.

Using Trendlines As An Effective Forex Trading Tool

Trendlines on the short time frame merely give you a defined picture of current price action. These trendlines are broken often during the course of a day. It is probably not a good idea to enter trades based on trendline breaks from a small time frame chart. Their main use is to give you a clear, instantly recognizable graphical representation of current price behavior.

However, here is where trendlines can prove to be a useful Forex trading tool:

If you notice price coming back to test a trendline on the higher time frames, (anything over 30 minutes), look at other factors. For example:

· Draw in horizontal lines to mark key support and resistance using previous highs and lows.

· Draw Fibonacci retracement and extension levels.

· Calculate the daily pivot points and put them on your chart.

· Have the 200 EMA (Exponential Moving Average) shown on your charts.

Now, if price were to bounce or touch the trendline on the medium to higher time frames, that is, on the 60 minute, 4 hour, or even daily charts, does that price point also coincide with or match up with one of the other indicators mentioned above?

If for example the trendline intersects with a pivot point which is also a Fibonacci 50% or 62% retracement, or 127% or 162% extension, then you have a convergence of factors. If you entered a trade at that point there is a high probability you will catch at least 10 to 20 pips on the first move on the bounce.

Looking for such opportunities takes patience. They don't come up so often but when they do you can be ALMOST guaranteed a successful trade if you keep your first profit target to a reasonable level.

If trading multiple lots, then be sure to take your first profit at the 10 to 20 pip level and let one or two other lots run if price continues in the direction you anticipate. At the same time of course you would move up your stop to break even point after taking first profit so your trade can now run without risk.

Employ trendlines as a Forex trading tool with caution and discretion. Covering your charts with every trendline possible will only result in confusion and blurry analysis.

One or two trendlines at key or significant swing points, (price highs and lows) can give you a defined, clear picture of price action, which, when coupled with your other Forex trading tools, can result in profitable trades.

Using Trendline Analysis As Part Of Your Forex Strategy

Often, not always, price will break a trendline and move away 10 or 20 pips. Then, it comes back to test the backside of that trendline. That’s where you enter the trade.

If the trendline break coincides with your other favorite indicators such as:

· Pivot Points

· Fibonacci Calculations

· Previous Support Or Resistance

then set an entry order for price to take you in when it comes back to test that level.

That way you enter the trade at an optimum level and squeeze even more pips out of the move.

Note the examples below:

USD/CHF
1 Hour Chart

See how price broke the trendline, then came back to test the backside.

If you look carefully at the chart and run your eyes left, you will see that the trendline bounce also coincides with a previous support/resistance level.

If you did some Fibonacci calculations you would also find that same point matches with 50 and 62% retracement levels.

With that convergence of factors, the trendline backside test makes a good entry point!

Negative News for NIFTY tgt 4700 soon

ALERT : CBI COURT ALLOWS PLEA TO NAME CHIDAMBARAM IN 2G CASE. NEWS HIGHLY NEGATIVE FOR MARKET; MARKET COULD FALL DOWN FURTHER.