Forex Robot: Usd Dominated By Business Cycles

Having trouble viewing this email?
Click here
http://campaign.r20.constantcontact.com/render?llr=d7egsfcab&v=001cNWX07JYSkTlmFZp3cR3YNFmJScOJq1KK10t37haNYw8Mcq_8FduUD3j9-EHgTib9pe-JA2LnW6GpJ-1qG1y56fJLS9T56B63UbiYjvj4wU6uWJ0oCH-CT16dG_Bz0h9LVV3Z0pFrns%3D

TheLFB Daily Client Note
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Client Note: U.S. Session Preview

April 04, 2011
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Quick Links

Latest Charting Video [http://r20.rs6.net/tn.jsp?llr=d7egsfcab&et=1105053840617&s=4796&e=001hQTBWrmXFJnCvpPnRRyuWg1RjsWchUNosQX_L3rinYlcVnpGiUqQyXERWljTmK79tFzskUBv06GuDAmz79gzxHo1KE1kyoUwclB4LVwX18g7IMKmwTxYyxEnS0JvU9OvLrEAUmnmPUvUYSUqgU1pIw==]
Newsletter Archive [http://r20.rs6.net/tn.jsp?llr=d7egsfcab&et=1105053840617&s=4796&e=001hQTBWrmXFJn3Kyak-fqkhgK351zKSlRo5s16F0uARHNQ4s1Bsgb-5jZtZrvhNnVi6Rhl6vvxH7gXT-h0OsEYhwQUWNhzNPjd3BQAdgbQVQaDkyGumfsB8ZXLJvGqZBhiHD-fzfETh4sS9mk4cfpm5A==]
Follow us on Twitter [http://r20.rs6.net/tn.jsp?llr=d7egsfcab&et=1105053840617&s=4796&e=001hQTBWrmXFJm_i3Wi2csGLoFyadjeSRX_UwOP6xohOch57zfP3wwT0_UzejDdTTfa0BdmydvcrbFsVlnqkHCZtEuA0aWCM_QGYR7lvbdaifYJTGcUMouDMQ==]
Contact Us [http://r20.rs6.net/tn.jsp?llr=d7egsfcab&et=1105053840617&s=4796&e=001hQTBWrmXFJlCLdNcX1h_PuKKLlbZIBxHZac179N1wILi6rNmj7wNBgHyL-eEk_Jmc75W5NbB_TAjxQmUSJdQ_s1XUr8XmrXV5sCma9iVZlP3fY1hwI1yDAxwVF527e3szHxs3aLNeUNBleRA2GdgJtLW9_aw7aoR]
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Dear Trader,
Welcome to TheLFB's daily client note. Follow along with the trade team as they
review global markets, headlines, trade divergence, momentum, and currency impact
over the 24 hour trading session. Please use the links opposite to access recent
articles and videos, and to register for trade desk updates.
Sincerely,
TheLFB Trade Team
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Trade Desk Note
Usd Dominated By Business Cycles
Peak, contraction, trough, expansion, growth, are the five cycles of the global
economic business cycle. Each phase of the cycle reflects the currency valuation
for each economic region. The cycles run over an average ten to fifteen year period.
The next move in the U.S. phase will likely be from the trough into expansion, which
will be lead by economics, sentiment, or a mixture of both. A double-dip move back
into the contraction phase is historically unlikely, but could happen if the U.S.
housing and employment outlook worsen as the summer approaches. The reasons why
or how it all happens can be debated forever.
The phases of contraction and trough have already happened globally, and there
is now an upward target of sustainable expansion that may lead to growth over the
coming quarters. Growth will come, it always does, but the relative strength of
the U.S. cycle compared to other regions may not be as robust.
The U.S. is following the business cycle phases the same way other regions are,
but the difference is that the U.S. is going from boom to bust a lot quicker than
other regions. The cycles are getting shallower, and are coming in shorter five
to eight year cycles, creating volatility in dollar valuations.
The downside of relatively quick moves in expansion and contraction is that the
Usd does not have time to re-establish new values as well as other currencies, and
because of global commodities being priced in dollars, the quicker cycles can create
inflation pressures that are historically stronger than previously noted. The killer
effects of consumer inflation, coupled with increasing debt levels are weighing
heavily on the U.S. business cycle's lifespan.
As the U.S. moves along its own cycle, so the global economies follow theirs, but
right now the moves are out of sync; the global market's peak phase came at the
same time as the U.S. contraction phase started, and that is now leading to a period
where the U.S. tries to expand as some overseas regions are already looking hard
at the impact of solid growth. The real question is how the market prices Usd based
debt; any GDP growth will be negated by forward debt valuations, especially if overseas
regions are expanding ahead of the U.S.
The U.K. is dealing with every bit as strong a recession as the U.S., and is seeing
consumer confidence levels stripped to the bone. The Euro-zone is expanding from
an economic slow-down from the effects of the credit crisis and reductions in bank
lending. Australia is down-grading overseas growth and absorbing interest rate increases
and implementation in an effort to control an economy that is leading the global
business cycle. Japan has struggled in their business cycle phases, and has absorbed
failed quantitative easing programs, stagflationary pressures, and now the impact
of the tragic earthquake in March.
All-in-all we are seeing a base in global economics as the trough phase completes,
and as a consequence of that the value of the Usd may automatically decrease having
already absorbed a lot of contraction-related bad news. As the U.S. looks to get
out of the business cycle trough, and can overcome housing and employment woes,
the other major forex economic regions may become empowered by the U.S. consumer.
In the near-term that may be enough to allow other economic regions to overtake
the U.S. because of having far less debt to finance.
Those moves will decrease dollar valuations, increase oil prices, increase global
inflationary fears, and allow a period of trade to happen where, for the first time
in twelve to eighteen months, the dollar finds sellers in strong enough numbers
to be able to break 75.00 on the dollar index.
This may turn out to be the start of a sideways distribution phase, after a possible
near-term dollar rally if equity trade finds sellers, ahead of more dollars getting
sold over the next year as the U.S. administration deals with a public 'Strong Dollar
policy that is anything but wanted in reality.
The most robust periods of U.S. economic expansion have been on the back of a weaker
Usd, and with the amount of Usd based debt now in the market, it may be very difficult
for the dollar to do much more than reverse near-term oversold conditions on the
days that equity markets go lower. Traders however will be looking at the mid-term
signals that are still very much in short-dollar mode.
In the near-term, history tells us, global business cycle anticipation has more
of an impact on currency valuations than anything else; and that is what traders
are now starting to see reflected across global asset class charts. The four hour
cycles, the near-term support and resistance, linear trend-lines, and daily moving
average areas are all getting threatened at the same time.
If things break as Usd weakness it will be a technical reflection of a shift in
the global business cycle expectation. The U.S. expansion cycle historically comes
from a sustained period of Usd weakness, and that is what traders are about to see
over the mid-term, if global equity trade holds in the green.
The signals are there that the markets just cannot get the dollar index easily over
the 78.00 price range; it will not go up when other related markets are moving lower.
March may have been a near-term swing point, and if oil prices get back above $110
a barrel it may be that 75% of trader's attention needs to be on short-dollar set-ups,
following the global business cycle path, with 25% of attention going towards long-dollar
moves on days that equities move hard to the downside. TheLFB trade team will signal
and alert clients directly as things unfold.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Disclaimer And Disclosure

Forex trading involves substantial risk of loss and is not suitable for everyone.
Each investor should assess his or her financial situation and risk tolerance before
proceeding.
Information, analysis and methodologies provided on The London Forex Broadsheet(TM)
are for informational purposes only and should not be used as a replacement for
research by an individual investor or licensed investment professional. Neither
The London Forex Broadsheet nor any of its affiliates shall be liable for any errors,
omissions or for any actions taken in response to information contained on www.TheLFB-Forex.com
[http://r20.rs6.net/tn.jsp?llr=d7egsfcab&et=1105053840617&s=4796&e=001hQTBWrmXFJmd_zdpbD_WF_DZAUlTzC5utUinzERxeBGQ3a8Dhwrfr6biOgQoLfVkrXRQ9kHwJAduX0xS0VPSdh_6SBDCIlQlFnwfQ6QGXSQCNhWrXDuK6w==]
or any affiliated or other linked sites. All users agree that the information contained
in The London Forex Broadsheet shall not be re-distributed or reproduced except
with express written consent of LFB Services(TM), LLC.
Any non-affiliated services which users may access through the links on the web
site which may include brokerage firms shall be deemed independent of LFB Services,
LLC. The London Forex Broadsheet is not a registered brokerage firm and any links
provided to such companies are for your convenience only. The London Forex Broadsheet
shall not be liable for any damages or costs of any type incurred in conjunction
with your use of the services of any third party listed on the site.
The London Forex Broadsheet hereby makes no representations or warranties regarding
the accuracy of any information contained on www.TheLFB-Forex.com [http://r20.rs6.net/tn.jsp?llr=d7egsfcab&et=1105053840617&s=4796&e=001hQTBWrmXFJmd_zdpbD_WF_DZAUlTzC5utUinzERxeBGQ3a8Dhwrfr6biOgQoLfVkrXRQ9kHwJAduX0xS0VPSdh_6SBDCIlQlFnwfQ6QGXSQCNhWrXDuK6w==]
or any affiliated or other linked sites.
This Risk Disclosure shall apply to all communications transmitted from The London
Forex Broadsheet.
© 2011 LFB Services, LLC. All Rights Reserved.