Something to read

Chart This: Gold Breaks Through $1,300 Level :

The "Gold Forecaster" Gary Wagner is on Kitco News to talk about gold's 4-week high and whether the $1,300 breakout signals a rally on this edition of "Chart This!" Wagner says the "market is having a series of higher lows" and this may be a good signal for the bulls. "Gold has fallen out of favor in regards to being a safe-haven asset and so it doesn't seem to react as much to world turmoil as we have seen in the past," he added. Wagner also discusses Bernanke and whether or not the Fed will taper. He ends by looking at the defined range gold is trading in and looks at it in terms of Fibonacci levels. Kitco news, July 22, 2013.

China Working Quietly To Buy Up Gold

The Fed’s preferred measures of inflation are so low they’re in the Fed’s panic zone. What gives?

“There’s an ideal playbook, and it would look something like this,” James Rickards, author of the New York Times bestseller Currency Wars, explained. “You’d have higher inflation than we have today, but not super high. It might be in the 3-4% range. GDP of maybe 5%, which is pretty high, and then that would bring down the debt-to-GDP ratio so the United States doesn’t look like Greece.”

The result would be a cheaper dollar, which would help exports and get the inflation the Fed wants. “And you’d have negative real interest rates,” he added, “which is to say inflation would be higher than the nominal rate — so let’s say inflation 3.5% and a nominal rate of maybe 2.5%, you’d have 1% negative rates.”

None of that is happening. There’s no inflation. In fact, the Fed is talking about deflation. Instead of a weaker dollar, we have a stronger one. Interest rates are rising, but without any inflation, we’re getting positive real rates.

Rickards thinks the Fed is way off the mark about the economy’s health. Bernanke thinks the economy is in much better shape than it really is. “You look at the Fed’s forecasts for the last four years, they were wrong every time, and they were wrong by a lot, meaning why should we believe the forecast now? They’re not going to taper.”

After September, Bernanke will be a lame duck. That means his last Board of Governors meeting will be in January. “We can’t be certain of this,” Rickards qualified, “but it seems very unlikely that he’s going to do anything dramatic on his way out the door. If Bernanke actually does taper in September, which I don’t expect, it’s going to be a shock to the markets, and we’re going to see more of a drawdown in gold, a drawdown in stocks.”

From the Fed, we pivoted to gold. The People’s Bank of China last revealed its total gold holdings in April 2009 — 1,054 tonnes — and they could use it as a weapon in the currency wars.

“If you’re China, the last thing you want to do is be transparent about your gold purchases, because it will drive the price up,” says Rickards. He compared China’s strategy to a game of Texas hold ’em. “You want a big pile of chips. The U.S. has a big pile of chips, Europe has a big pile of chips. The U.S. has 8,000 tonnes of gold, 17 members of the euro system have 10,000 tonnes. China at 1,000 tonnes is not a player, but at 5,000 tonnes, they are a player.”

According to his best information, China is there already. To be clear, no one really knows, except for maybe a member of the Communist Party, says Jim. “But I have spoken to a number of sources in Asia,” he says. “I’ve spoken to a number of people who are very close to the physical market, I’ve done my own investigations. Every time I have an estimate and try to verify it, what I get back is that I’m wrong on the low side.”

So he expects that come April 2014, China will announce that it owns 5,000 tonnes of gold.

“That should be an earthquake because even the gold deniers, the gold doubters, are going to have to sit up and take notice. Either the Chinese are dopes, which they’re not, or people will start to get gold, which I think they will.”

If these scenarios played out, gold would go a lot higher. Jim told us it could go up in a very short span of time, say, 90 days or at the most six months.

“The world of $4,000 gold is the world of $400 oil, $100 silver, higher prices for copper, corn, wheat and everything else,” he continued. “In other words, it’s a world of very high inflation in which the value of your retirement funds and your annuities have been wiped out.

In that case, there will be winners and losers. As Mr. Rickards explains, the winners will include those who hold gold. “That’s going to be a very small minority. It’s a small minority today. It might get a little bit larger, but that’s not most of the population.”

The losers will be everyone else. “So,” Jim explains, “you’re going to have this resentment, this political resentment, where the vast majority of the people who just sort of took it on the chin are going to be looking at a small number of people who protected themselves, and they’re going to say that’s not fair. And we’ve seen this before. Congress has a way of dealing with it, which is a windfall profits tax.”

He was quick to add that laws like that don’t happen overnight — there’s a legislative process that bogs it down. “Secondly,” he adds, “you should be able to see it coming and maybe pivot out.”

Upcoming MetaTrader 4 and MQL4 Upgrades - Big Changes Are Underway


At the moment, we are doing a huge amount of work preparing for MetaTrader 4 client terminal's upgrade.
Here are some upcoming changes:


1. Complete replacement of MQL4 language and MetaEditor 4 with common MQL5 and MetaEditor components

Instead of working on MQL4 -> MQL5 compatibility, we have decided to go the opposite way. We have transferred the maximum possible amount of MQL5 language functions and features fully preserving MQL4 functionality. In other words, all powerful MQL5 functions, including ООP and the native code compiler, will become available in MQL4.

To achieve this, we have developed a unified compiler that automatically supports both MQL4 and MQL5 languages. MetaEditor will also become a single application both for MetaTrader 4 and MetaTrader 5 platforms. Thus, it will be possible to compile both MQL4 and MQL5 from any version.

2. MQL5 Storage will be available in MQL4 IDE

Thus, it will be easier to manage source code versions, participate in team operations and synchronize files.

3. MQL4 code protection is considerably increased

New EX4/EX5 files are provided with a serious and completely revised protection.

4. The market of applications will become available in MetaTrader 4

Transition to the new compiler that supports resources and conventional protection suited for each user's PC will allow users to develop and sell full-fledged applications. There is no need to worry about the protection of EX4/EX5 files sold via the market - they do not contain bytecode but only a pure native code signed by our private key.

This solution puts in order all the diversity of existing programs and protects the sellers.

5. The market of MetaTrader 4 applications will open for MQL5.community in mid-August

Developers already can prepare their applications and register as sellers. We will start releasing the first beta versions of the terminal in a couple of weeks.

6. We have many other extensive plans but it would be better to postpone them for a while.

3 Price Channels To Help You Find High Probability Trades

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Article Summary: Framing price action helps a trader recognize high probability entry and exits. Framing is based on prior price action so while it cannot predict the future it can help build expectations so you know if the current room may be running out of steam or just beginning. There are a handful of ways to frame price action so you only need to decide which method works best for you.
Price can often feel subject to the rules of nature like gravity or inertia. Therefore, when price drops to a certain level, you can often notice a bounce at some point. Framing price charts with channels can help you see when price may react or bounce and when an appropriate entry or exit may appear.
There are many charts and trading strategies with price channels so treat it like a buffet. Choose only what you want and if something doesn’t suit you, leave it be for the next trader. Channels can also accomplish different things like helping you to pinpoint trend continuation entries or range bound reversals.

You’ll be introduced to 3 types of channels in the article. Hand drawn channels are the grade school version of channel trading but can be extremely effective in finding entries and exit. Donchian Channels help traders find breakouts and breakdowns by looking at price extremes over a set number of periods or days. Lastly, we’ll look at an advanced channel based on Median-Line analysis, called Andrews Pitchfork.

Hand Drawn Channel


This is the best place to start for newer traders. Hand drawn channels are easy to understand and can be used in ranging or sideways markets with price reacting to support and resistance. Channels can also be used in a rising market like we see on the EURUSD chart above.


The key qualification for a channel is that price should touch at least two times but three or more is best. In a rising channel like we see above on EURUSD, the force is behind the buying pressure as we see with higher highs and higher lows so the high probability trading would have you buying near channel bottoms with stops below entry and outside of channel and selling near channel tops. Shorting at channel tops are not recommended because we’re in an uptrend.

Donchian Channel Breakout Trading



Richard Donchian created a profoundly simple trend following strategy in the 1980s built on the concept of buying strength and selling weakness. Donchian Channels are considered a high probability breakout strategy that finds price exceeding the high or low over a user specified number of hours/days /weeks. This channel strategy works well in rising or falling markets but is best retired during range bound markets.

Because few breakouts result in legitimate trends many traders will place a stop exit at the opposing channel. This limits risk and prevents you from holding onto a losing trade too long. Traders who aren’t comfortable with that wide of a stop are encouraged to reduce trade size or you can protect your trade by placing a stop utilizing Average True Range or with a stop in the middle of the channel which would be a 10-day low or high depending on trend direction.


Andrew’s Pitchfork – Median Line


Trading with the pitchfork is powerful once you understand where to find starting points for drawing the pattern. Pitchfork trading was developed by Dr. Alan Andrews based on the concept that price often returns to an average price overtime with swings away from the median line often returning until the trend switches directions. This pattern allows for tight risk and reasonable profit targets.

The argument that helps traders build strategies around the pitchfork is that 80% of the time in trending markets, prices will gravitate towards the rising or falling median line. The pitchfork’s foundation will be based on 3 swinging pivots in the markets (identified as A,B, &C on the chart). The starting swing (Point A) is the beginning of the median line and swing extreme points B and C around Point A bring you the pitchfork.
There are many helpful tools for finding the starting points A, B, & C but after a while you’ll be able to pin point the market swing starting points with your trader’s eye. You can use the Zig Zag indicator which helps you to determine the most important price changes and turns and draw your pitchfork from those points. Another option is to use daily or weekly fractals that show you price reversals to highlight turning points in the market.
The preferred target when trading the pitchfork is the middle line. However, in strong trending markets or ranging markets, you can target the opposing pitch fork. The stop is often placed outside of the pitchfork by the amount of 0.5 or 1 times Average True Range to allow the market to breathe within the trend.


Closing Thoughts


The key to this or any strategy is to find the one that works best for you. The end goal of whichever channel you use is to frame price action on your preferred time frame so that you can determine appropriate entries and exits. Regardless of the method you use, make sure to limit your risk by placing stops outside of the channel and using appropriate trade size for your account balance.

Happy Trading!

Silver Prices Could See Further Gains If $20 Breached - SocGen

Silver prices are bumping up against $20-an-ounce level and if the area is “convincingly cleared” then the metal could see further gains, perhaps to $22, said Societe Generale on Wednesday.

There is heavy selling interest at $20, based on the number of December options positions, the firm said, but technical charts turned positive when the 10-day moving average crossed above the 20-day moving average.

“These conflicting signals point to renewed volatility in the silver price, something to which most silver investors are fully accustomed. If the $20 level is convincingly cleared then we can expect an attack on $22, which is a Fibonacci retracement level from the drop from $35.36 last October,” the firm said.

Strong demand in India and China supports silver, and there’s been renewed exchange-traded-fund buying in silver after dovish testimony from Federal Reserve Chairman Ben Bernanke earlier this month, they said.

The gains in silver come on the back of buyers seeing bargains in the metal after the recent fall in price, along with some switching to silver jewelry from gold because of economic austerity, they said. Further gains are likely, but could be limited.

“The price has therefore recovered towards $20 in the first weeks of July, and has the potential to sustain a short-covering rally towards $22, but silver remains in surplus, the majority of both supply and demand is not price-responsive and silver is likely to remain largely bound to gold. We continue to expect a bear market for the longer-term, with prices drifting towards a $15 average in 2017,” they said.

Oscillators

An oscillator is any object or data that moves back and forth between two points.

In other words, it's an item that is going to always fall somewhere between point A and point B. Think of when you hit the oscillating switch on your electric fan.

Think of our technical indicators as either being "on" or "off". More specifically, an oscillator will usually signal "buy" or "sell", with the only exception being instances when the oscillator is not clearly at either end of the buy/sell range.

Does this sound familiar? It should!

The Stochastic, Parabolic SAR, and Relative Strength Index (RSI) are all oscillators. Each of these indicators is designed to signal a possible reversal, where the previous trend has run its course and the price is ready to change direction.

Let's take a look at a couple of examples.

We've slapped on all three oscillators on GBP/USD's daily chart shown below. Remember when we discussed how to work the Stochastic, Parabolic SAR, and RSI?

If you don't, we're sending you back to fifth grade!

Anyway, as you can see on the chart, all three indicators gave buy signals towards the end of December. Taking that trade would've yielded around 400 pips in gains. Ka-ching!

Then, during the third week of January, the Stochastic, Parabolic SAR, and RSI all gave sell signals. And, judging from that long 3-month drop afterwards, you would've made a whole lot of pips if you took that short trade.

Around mid-April, all three oscillators gave another sell signal, after which the price made another sharp dive.

Now let's take a look at the same leading oscillators messing up, just so you know these signals aren't perfect.

In the chart below, you can see that the indicators could give conflicting signals.

For instance, the Parabolic SAR gave a sell signal in mid-February while the Stochastic showed the exact opposite signal. Which one should you follow?

Well, the RSI seems to be just as undecided as you are since it didn't give any buy or sell signals at that time.

Looking at the chart above, you can quickly see that there were a lot of false signals popping up.

During the second week of April, both the Stochastic and the RSI gave sell signals while the Parabolic SAR didn't give one. The price kept climbing from there and you could've lost a bunch of pips if you entered a short trade right away.

You would've had another loss around the middle of May if you acted on those buy signals from the Stochastic and RSI and simply ignored the sell signal from the Parabolic SAR.

What happened to such a good set of indicators?

The answer lies in the method of calculation for each one.

Stochastic is based on the high-to-low range of the time period (in this case, it's hourly), yet doesn't account for changes from one hour to the next.

The Relative Strength Index (RSI) uses the change from one closing price to the next.

Parabolic SAR has its own unique calculations that can further cause conflict.

That's the nature of oscillators. They assume that a particular price movement always results in the same reversal. Of course, that's hogwash.

While being aware of why a leading indicator may be wrong, there's no way to avoid them.

If you're getting mixed signals, you're better off doing nothing than taking a "best guess". If a chart doesn't meet all your criteria, don't force the trade!

Move on to the next one that does meet your criteria.

Gold Demand Having Less Impact As Prices Tread Water: Analysts

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With uncertainty growing in the gold market, analysts expect that retail investors will be hesitant to buy more physical gold in the near-term.

Although demand has been exceptionally strong since prices started to drop in April, Jeffrey Christian, managing director at New York-based research firm, CPM Group said that he is starting to see signs of weakening demand for physical gold.

He added that even after gold’s second sharp drop in June – when Comex August gold contracts briefly dropped below $1,200 an ounce and hit a three-year low – investors were hesitant to jump in and buy bullion again.

On June 21, after gold’s second meltdown, CPM Group released an update that warned demand is starting to drop off.

“At present, there are few signs of strong demand at these lower prices on Thursday and Friday. Indian market sources reported increased demand, but said the buying levels were less than half the volumes seen in the first week of May,” the report said. “The decline in prices in the middle of April had been very timely, occurring just prior to the wedding seasons in India and China. This resulted in a substantial amount of buying from consumers in those countries, especially India. This demand helped push gold prices higher through the end of April.”

Although demand in Asia, and more specifically China, is at a record level, Christian added that he expects it to have less impact moving forward, especially as prices consolidate between support at $1,280 and resistance at $1,350.

“Demand in Asia is extremely price sensitive,” he said. “Right now we are in no man’s land. Prices are treading water and investors are hesitant to buy.”

On Thursday the World Gold Council released a report saying that because of strong demand China, the country is expected to import 1,000 metric tons of gold this year. Because of tight import restrictions in India, China is now expected to become the top gold consumer in the world.

Analysts from Barclays have also highlighted the fact that demand from China remains firm but below the record levels seen earlier in the year.

“…physical demand seems likely to remain responsive to prices. Indeed, as prices have firmed, volume traded on the Shanghai Gold Exchange has softened yet remains firm overall,” Barclays’ analysts said in a report published Friday.

Demand is even weaker in North American as the U.S. continues to show signs of a slowly improving economy. Christian said that many of the investors who bought gold were expecting either the economy to completely collapse or see higher inflation. He added that neither of those scenarios has materialized and a lot of those investors have walked away from the market.

“It would take a lot of major economic problems to get these guys to come back to the gold market,” he said. “We just don’t think that is going to happen.”

After hitting a session low of $1,179.40 an ounce on June 28, August gold prices have found some momentum and closed Friday at $1,321.50 an ounce – a 12% gain.

However, Howard Wen, analyst at HSBC, said that the rally appears mostly to be short-covering. Prices have been unable to break through resistance at $1,350, which Wen said is a sign that prices might head lower in the near-term.

“For demand to pick up we would need to see lower prices,” he said. “Most of the buyers looking for a price drop bought earlier in the year.”

Wen added they are looking at some seasonal factors that could be bullish for gold in the near-term. In India, he said they have heard that the monsoon season has been fairly positive, which means farmers will be able to buy more gold in the fall.

However if prices rise too much, Wen would expect demand to wain because people would only be able to buy so much.

“People only have so much money so it’s not a question of when they will buy but of how much they will buy,” he said.

For the next few months, especially during the slower summer period, Wen said he expects prices to trade in a range of $1,125 and $1,375.

CPM group is also not that far off from HSBC’s outlook. Christian said that looking at the long-term price trend there are indications that prices are nearing a bottom; however investors should expect more volatility in the near-term.

“We have said that we wouldn’t be surprised to see prices spike lower in July and August. We are almost finished with July so we will have to wait and see,” he said. “If prices hover around these levels until September we could see investors start to come back and buy.”

METALS OUTLOOK: Gold Traders' Full Plate Next Week Includes FOMC, U.S. GDP, Payrolls, ECB

Gold Traders and investors in other markets have a full economic calendar to monitor next week.

“There's no shortage of potential market movers,” said Nomura, listing a meeting of the Federal Open Market Committee, July U.S. employment report and second-quarter gross domestic product. On top of that, the Institute for Supply Management releases its manufacturing report, and the European Central Bank and Bank of England hold policy meetings.

In particular, market participants will be watching U.S. data and a policy statement after the FOMC for more signs on when tapering of quantitative easing might start, and the impact of this on Treasury yields.

“They (gold traders) will be keying off interest rates and the dollar,” said George Gero, vice president and precious-metals strategist with RBC Capital Markets Global Futures.

The large number of news events means potential for the market to be volatile and chop around. Further, light summer trading conditions could also add to price swings, said Afshin Nabavi, head of trading with MKS (Switzerland) SA.

“We’re in the middle of summer holidays,” he said. “The volatility we’ve seen is because of a lack of liquidity more than anything else. This could continue into a good part of August – this directionless $20-$30 up and down.”

Ahead of the heavy news slate, participants in the Kitco News Gold Survey were mixed on expectations for price movement next week. Of 23 respondents, nine saw prices up, six down and eight sideways or steady.

Gold posted a gain this week and so far is up for the month of July after previously falling three straight months. August gold settled after the pit session Friday at $1,321.50 an ounce on the Comex division of the New York Mercantile Exchange, up $28.60 for the week. September silver gained 30.5 cents to $19.765.

A meeting of the FOMC winds up Wednesday, and a number of observers said they look for policymakers to rehash their message of the last several weeks. If anything, sentiment may have shifted some toward a more dovish Fed after a Wall Street Journal article saying policymakers may fine-tune their forward guidance, thereby re-emphasizing their intentions to remain accommodative despite any modest tapering initiatives. Economists do not expect the Fed to announce any scaling back of QE next week, although many feel it could happen in September, if data keeps improving.

“(Fed Chairman Ben) Bernanke has tried to reassure markets by stressing the need to continue providing accommodation, while at the same time stressing the ‘data dependent’ nature of those plans,” Nomura said. “However, we do not expect the FOMC to announce any change in its asset purchases program and believe the first reduction in the pace of purchases is more likely to come at the September meeting. In the FOMC statement…we will look to see if the FOMC provides any new forward guidance with regards to its asset purchases program and the first rate hike. In addition, it will be important to note if they speak about the volatility in financial markets since the last FOMC meeting and its possible negative impact on the FOMC’s economic outlook.”

Besides the Fed, traders will closely monitor economic data, since policymakers say this ultimately will dictate policy decisions. Key reports next week include consumer confidence on Tuesday, followed by the ADP private-sector employment report, gross domestic product and Chicago Purchasing Managers Index on Wednesday. Thursday brings weekly jobless claims and the ISM Purchasing Managers Index. Friday brings what is generally regarded as the most important report of all – non-farm payrolls, as well as personal income and spending and factory orders.

“The jobs numbers will be pretty much the thing that everyone will be looking at,” said Kevin Grady, president of Phoenix Futures and Options.

Expectations are that the government will report a 1.1% rise in second-quarter GDP, down from 1.8% in the first quarter. July non-farm payrolls are expected to climb 188,000 after a 195,000 rise in June, with the jobless rate forecast to dip to 7.5% from 7.6%.

Sean Lusk, director of commercial hedging with Walsh Trading, commented that gold could be hurt if the data is strong, particularly if non-farm payrolls suddenly grew by more than 200,000 in a month. Still, he doubts there will be major upside surprises in the week’s data based on the recent trend.

“Looking at the jobless claims, one week they’re up by 30,000, the next week they give it back, and then we had an uptick this week. As far as the housing and retail numbers, it’s all been mixed,” he said.

While the FOMC tends to take center stage among central banks in terms of influencing commodities, the market also will be focused on the European Central Bank Thursday. A dovish ECB tends to undermine the euro, which supports gold, and vice-versa. Nomura economists said they anticipate an extensive discussion on whether to cut rates, as was the case in July.

“At this stage, we believe the ECB may send a ‘warning salvo’ to markets – threatening to act in September if there is no improvement – leaving the September meeting as more likely than August’s meeting in terms of actions, though there is a high chance it could happen next week because of the extent of the current debate within the council, including the clear ‘downside bias’ on rates communicated last month,” Nomura said.

On other topics, Grady said he sees potential for gold to run into some selling on rallies from producers who might need to hedge, particularly when they are trying to obtain financing for projects.

Lusk pointed out that some profit-taking selling pressure could emerge yet in gold, particularly with the August futures headed toward a monthly rise. However, a bottom may be forming, he said.

Soon, Lusk pointed out, seasonal factors will start to move to the forefront in gold. “As we come into the Indian wedding season into September, I think traders will get a jump on a potential rise in prices,” he said. The yellow metal typically tends to draw support from late August into year-end due to physical buying tied to gift-giving holidays around the world, ranging from autumn festivals in India to Christmas in Western nations.

Another focus next week, Gero added, will be first-notice day for the August futures on Thursday. To avoid delivery, traders must make decisions on whether to exit positions or roll them ahead into deferred contract months.

Forex - Weekly Outlook: July 29 - August 2 :

The dollar dropped against the yen on Friday and was trading near six-week lows against the euro as recent U.S. economic data failed to convince market participants that the Federal Reserve will soon begin to taper its stimulus program.

USD/JPY hit session lows of 97.96, the highest since June 27, before settling at 98.30, down 1% for the day and 2.07% lower for the week.

The yen gained ground against the greenback after the release of mixed U.S. data on initial jobless claims and durable goods orders on Thursday.

The Labor Department said the number of individuals filing for initial jobless benefits last week increased by 7,000 to a seasonally adjusted 343,000, compared to expectations for an increase of 6,000 to 340,000.

The Commerce Department said orders for long lasting manufactured goods rose by a seasonally adjusted 4.2% in June, compared to expectations for an increase of 1.3%, while core durable goods orders, which exclude volatile transportation items, were flat in June, compared to expectations for a 0.5% increase.

EUR/USD hit highs of 1.3296 on Friday, before settling at 1.3279, up 0.01% for the day and 0.91% higher for the week.

The dollar found support earlier in the week, after data revealed new U.S. home sales hit a five-year high in June.

The Commerce Department reported earlier U.S. new home sales jumped 8.3% to 497,000 units, their highest level since May 2008.

Analysts were expecting new home sales to rise 1.8% to 482,000, which bolstered the dollar.

The pound was rangebound against the dollar on Friday, with GBP/USD dipping 0.03% to settle at 1.5386, up 0.13% for the week.

On Thursday, the Office of National Statistics said the U.K. economy expanded by 1.4% on a year-over-year basis in the second quarter, in line with expectations. The U.K. economy grew by 0.3% year-on-year in the first quarter.

The U.K. economy expanded 0.6% quarter on quarter, after a 0.3% expansion in the first quarter.

Elsewhere, the Canadian dollar was steady Friday, with USD/CAD easing 0.01% to settle at 1.0278.

Meanwhile, the Australian and New Zealand dollars came under pressure after weak Chinese manufacturing data for July added to fears over a slowdown in the world’s second largest economy, but the kiwi found support as the Reserve Bank of New Zealand left interest rates unchanged.

The preliminary reading of China’s HSBC manufacturing purchasing managers’ index fell to an 11-month low of 47.7 in July, from a final reading of 48.2 last month. Analysts had expected the index to rise to 48.6.

On Thursday, the RBNZ held its benchmark interest rate at 2.50%, in a widely expected move, and said it will keep borrowing costs at a record low this year.

AUD/USD hit session highs of 0.9296, before settling 0.9263, 0.19% higher for the day and up 0.45% for the week.

NZD/USD hit highs of 0.8105 in Friday’s session before trimming gains to close at 0.7931, easing up 0.01% for the day and 1.80% higher for the week.

In the week ahead, the Federal Reserve, the Bank of England and the European Central Bank are to publish their monthly policy statements. Canada and the U.S. are to produce economic growth data and the euro zone is to release data on manufacturing activity.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, July 29

Japan is to publish government data on retail sales, the primary gauge of consumer spending.

The U.K. is to release official data on net lending to individuals, which is the change in the total value of new credit issued to consumers, followed by industry data on realized sales.

Later in the day, the U.S. is to produce industry data on pending home sales, a leading indicator of economic health.

Tuesday, July 30

New Zealand is to publish official data on building consents, while Australia is to produce official data on building approvals. In addition, Reserve Bank of Australia Governor Glenn Stevens is scheduled to deliver a speech.

Japan is to release a preliminary government report on industrial production, while Bank of Japan Governor Haruhiko Kuroda is set to speak at the Research Institute of Japan, in Tokyo.

In the euro zone, a Gfk German consumer climate report is to be released, as well as preliminary data on German consumer price inflation and Spain's gross domestic product.

Canada is to produce official data on raw materials price inflation.

The U.S. is to release a report on the Standard & Poor's/Case-Shiller Composite-20 house price index, followed by the Conference Board's report on consumer confidence.

Wednesday, July 31

New Zealand is to produce data on business confidence, a leading indicator of economic health, while Australia is to publish official data on private sector credit.

Elsewhere, Germany is to release official data on retail sales and unemployment change, while France is to publish an official report on consumer spending. In addition, official reports are to be produced on consumer price inflation and the unemployment rate for the entire euro zone.

Canada is to release official GDP data, which is the change in the inflation-adjusted value of all goods and services produced by the economy.

The U.S. is also to produce GDP data, as well as a report on non-farm employment change and data on manufacturing activity in Chicago. Separately, the Federal Reserve is to release its monthly monetary policy statement, which will be closely watched for indications on the future of the central bank's stimulus program.

Thursday, August 1

Australia is to publish industry data on new home sales.

In Switzerland, markets are to remain closed due to a national holiday.

In the euro zone, reports will be released on manufacturing activity in Spain, Italy and the entire single currency bloc. Later in the day, the European Central Bank is to release its monthly monetary policy statement, followed by a press conference.

The U.K. is to produce a report on manufacturing activity, while the Bank of England will also publish its monetary policy statement.

The U.S. is to release official data on weekly unemployment claims, followed by a report by the Institute of Supply Management on manufacturing activity.

Friday, August 2

Australia is to release official data on producer price inflation, a leading indicator of consumer inflation.

The U.K. is to produce industry data on house price inflation, as well as a report on construction activity.

In the euro zone, data is to be published on Spanish employment change, while Switzerland is to release a SVME report on manufacturing activity.

The U.S. is to round up the week with official data on non-farm employmet change, the unemployment rate, average hourly earnings and personal spending, as well as a report on factory orders.

Forex News Trading Summary

One of the major economies that most traders keep their focuses on is the economic and the political situation of the American economy. Also, you should watch out for indicators from the European Union although they may have a smaller impact than those from the US

You may also check with heads of central banks announcements. This can give you ideas of possible increases or decreases in inflation and interest rates. Inflation has a direct effect on interest rates as when it goes up, banks try to leverage the interest rates.

Fundamental analysis comprises the examination of macroeconomic indicators and political considerations when evaluating one nation's currency relative to another.

Fundamental traders follow these news announcements, known as fundamental indicators, because they paint a picture of a currency's strength in relation to other countries.

Fundamental indicators are reports that include statistical data on things such as employment report,GDP, international trade balance, retail sales, manufacturing data, inflation and interest rates.

What you should know about trading the news in Forex

1. Even if you do not trade news it is important to know about the date and time the news are due, Especially major economic news that can result in extreme short term market conditions. Some traders, actually, prefer not to trade at all during economic news releases.
2. The less the price moves before news releases the greater the potential for a major market move after the news report
3. Breakouts following the economic reports can sometime last for a very short period of time from several seconds to several minutes.
4. Generally, if the news did not carry any surprise or unexpected data then there will be no significant reaction in the Forex market.