After a long wait, it’s finally here….BabyPips.com Version 2.0! It’s been a very long project; one that we have been working on for more than 6 months now, but we are very excited because we think it will provide even more value to you as a learning Forex trader. I never knew that building a website could be so hard! I definitely have a new found respect for all you "internet geeks" who possess the skills to design and create bodacious websites. Without you, we’d all be stuck having to read ugly web pages, and probably get massive headaches from trying to read a screen with non-matching colors, inappropriately sized text, and constant error messages. So from the bottom of Big Pippin’s heart, I’d like to give you mad props for being the true "Playas" of the virtual world! With that said, I’d like to start today’s post off by explaining some of the new features we have added to this pimped-out site.
First and foremost, we have added the much anticipated college lessons to our School of Pipsology. These lessons deal with slightly more advanced FX topics but are an essential part to every traders’ education. Learn all about trading personalities, leverage, market sentiment, and other groovy topics that will help increase your Forex IQ.
Now Big Pippin doesn’t like exams, but trust me when I say that the new BabyPips.com exams you find at the end of each lesson will truly help your understanding of the FX world and will help make you a better trader. But these aren’t like those boring exams you used to take in real school. No way homie! These exams will help you get that bling you desperately need. And the best part is that you can re-take these exams if for some reason you didn’t pass it. And we’re not going to go around like your teacher used to and announce your grade to everyone so feel free to take the exams over and over again until you get everything right. That’s the kind of school Big Pippin likes!
We’ve also added some ways you can interact with your fellow BabyPips students. First of all, you’ll notice we’ve changed our "Analysis" tab to a "Blogs" tab. Don’t worry though; our analysis stuff will still be here, but now you can interact and discuss our posts by leaving comments. To do this, you have to register (for free of course! Big Pippin doesn’t like giving out his cash!) on our site, but once you do that you will have full access to leave any comments you might have. Another perk to registering is that you will also have full access to our new Forums and Forexpedia.
On our Forums you can discuss Forex related topics with your fellow traders, ask questions about anything you’re confused about, or connect with other traders through private messaging. Or if you’re an advanced trader, you can spread the love and help new traders by answering their questions and posting interesting Forex related content. It’s all about the community, and we’re making sure that all of our groovy visitors have a cool place to chill. (Did I mention there’s an arcade in our Forums? Try beating my score on Island Golf. I’ll give you a dollar if you can beat me!)
Finally, we have added a massive Forex encyclopedia that we like to call our "Forexpedia". Like a regular encyclopedia, if there is a term or topic relating to the Forex that you need more info on, you can hop on to the Forexpedia and find what you’re looking for. The cool thing about our encyclopedia is that if there is a topic or term that is not yet included, you can add a page about it yourself. Thats right! You can become a contributor to what will eventually become the biggest Forex encyclopedia in the world!
I’m usually a calm and collective cat, but this new version of BabyPips.com has me dancin like it was Saturday Night Fever! In fact, all of the FX-MEN were so excited to get this site out that we probably made some mistakes along the way. If you happen to find a bug, then you should let our head geek know what the problem is by emailing him at firstname.lastname@example.org.
And now……..onto the FOREX!
So the Cable is at a 15 year high, the Euro is blazing and the Yen and Swissy are gaining on the Dollar. The poor dollar is not looking good right now and it’s showing up in the charts. I said on Thursday that even Bernanke himself wouldn’t be able to slow the Dollar’s fall with all his inflation talk. On Friday when he spoke his piece on inflation, the market disregarded it and instead traded on the weak ISM number which again, caused the dollar to lose more ground.
Traders are basically convinced that the Fed will cut rates but they might be over excited about it. I said that I thought a rate cut might happen by Q1 but after calming down a bit and digesting more information, I think I was a bit over-zealous in my statement. While it’s true the economy is slowing down, Bernanke seems pretty set on all his inflation views. As long as those views are in place I don’t think the monetary policy will be changing any time soon. My new prediction is sometime in Q2 but I’ll have to re-visit that as time goes on!
The big stories for the week are the ECB meeting on Thursday where they will most likely be increasing their interest rates, and the Non Farm Payroll report on Friday. The dollar was slow today and I expect it to be slow until there is another major fundamental catalyst. We should see some range trading until these catalyts take place.
No surprises here. My Bias-O-Meter is still showing a bearish Dollar.
EUR/USD; GBP/USD= Bullish
USD/CHF; USD/JPY= Bearish
US Unit Labor Costs
8:30 am ET; 13:30 GMT
Previous= 3.8%; Forecast= 3.3%
US Non Farm Productivity
8:30 am ET; 13:30 GMT
Previous= 0.0%; Forecast= 0.5%
US ISM Non-Manufacturing Index
10:00 am ET; 15:00 GMT
Previous= 57.1; Forecast= 55.0
Ok so we should all know by now that the indicators are showing that the Euro is overbought. The indicators have been showing this for some time now but we’ve been seeing a new trend these past 2 weeks which means the indicators have been meaningless for the time being. However, yesterday’s candle formed a spinning top (which is a good reversal candle signal), and today’s trading pretty much didn’t do anything at all. Add to the fact that the daily stochastics has been showing overbought since November 23, and we have good conditions for a short term reversal. I’m not expecting anything drastic but a move to 3250 is a reasonable target.
The Cable has stalled at 9800 and I’m not too surprised. I mean goodness gracious! The Cable is at a 15 year high for cryin out loud. Like the Euro we’re seeing very little movement and some indecision early on this week. With a spinning top formed from yesterday’s candle and the extended overbought signal given by the daily stochastics, the next move is likely to be towards the downside. 9750 is the safe target but 9700 doesn’t look entirely out of reach; especially since the Cable tends to have wide ranges of movement.
The Swissy has found support at 1900 and its daily stochastics has shown an extended oversold condition. I think this pair will move to at least 1950 and 2000 would be the next target. If the move is bigger than I think, then look for the pair to hit its 50 SMA on the 4 hr. chart which is around 2050.
The Yen has found support at 115.00 and looks to be headed back up as the daily stochastics is showing oversold conditions. The 4hr stochastics shows a little more room for some selling and I think that 115.00 will be a good place to go long.
Buy at 115.00; Stop Loss= 114.50; Target 1= 115.50; Target 2= 116.00 (50 SMA on the 4hr chart)
Can the dollar gain any ground this week? Probably not, but I also don’t think it will lose much ground either. My guess is that traders will be waiting for the ECB meeting on Thursday and the NFP report on Friday before making any big moves. Happy trading! Feel free to comment. I’d love to hear your thoughts!