John Starks

The EUR/USD went into free-fall from 1.3241 high to 1.3134 low, losing more than 100 pips during the European session has data from Euro countries and EMU show the contracting manufacturing figures intensifying, while the unemployment rates rise.

 

The EUR/USD is quoting around 1.3145 for now, below the 20-day MA at 1.3155. Below is the 100-day MA, at 1.3116 and the psychological level at 1.3100.

 

Meanwhile, Portugal sold €500 M of 6-month titles and €1 B of 12-months, at 2.935% (previous at 2.9%) and 3.908% (3.652%). Higher yields, but good cover.

Forexpros - The U.S. dollar remained mixed against its major counterparts on Tuesday, as investors eyed the release of a key report on U.S. manufacturing activity while concerns over Spain’s sovereign debt crisis continued to weigh on investor confidence.

During European afternoon trade, the dollar was lower against the euro, with EUR/USD rising 0.18% to hit 1.3263.

Trading was expected to be light as markets in France, Germany and Italy remained closed due to national holidays.

The euro weakened earlier as data on Monday confirming that Spain’s economy entered a recession in the first quarter sparked fresh fears that austerity measures could impair economic growth in the euro zone.

Investors were also cautious ahead of weekend elections in Greece and France and the European Central Bank’s policy meeting on Thursday.

The greenback was higher against the pound, with GBP/USD slipping 0.09% to hit 1.6221.

The pound came under pressure after the U.K. manufacturing purchasing managers' index dropped to 50.5 in April from a downwardly revised 51.9 in March, but remained above the neutral 50.0 mark that separates expansion from contraction.

Analysts had expected the manufacturing PMI to fall to 51.4 last month.

The report underlined concerns over the outlook for the U.K. economy, after official data last week showed that the economy entered a recession in the first quarter.

Elsewhere, the greenback was steady against the yen and lower against the Swiss franc, with USD/JPY easing 0.01% to hit 79.82 and USD/CHF falling 0.18% to hit 0.9058.

The yen remained supported after new easing measures announced last week by the Bank of Japan fell short of some market expectations.

The greenback was steady against its Canadian counterpart and sharply higher against its Australian and New Zealand cousins, with USD/CAD inching 0.01% higher to hit 0.9872, AUD/USD plummeting 1.04% to hit 1.0321 and NZD/USD shedding 0.62% to hit 0.8134.

The Australian dollar fell sharply against all of its major counterparts after the Reserve Bank of Australia surprised markets with a larger-than-expected interest rate cut to 3.75%, its lowest level since early 2010, in an attempt to boost the nation's commodity-linked economy.

The export-related currencies had found support earlier after official data showed that an index of Chinese manufacturing activity rose to a 13-month high of 53.3 in April from 53.1 the previous month, but remained slightly below expectations for a reading of 53.6.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.13% at 78.76.

Later in the day, the U.S. was to release a closely watched report by Institute for Supply Management on manufacturing activity.

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How is margin on opened positions calculated? And what does this represent?

What is a currency carry trade?

Finally do both banks agree on a trading strategy: short EUR/GBP. The Copenhagen based bank, Danske Bank, says in its daily technical report to “short at 0.8378 for a 0.8067 objective, stop at 0.8253", while Commerzbank suggests to do “shorts from 0.8275 were profit stopped 0.8205. Resell 0.8215, 0.8230, stops 0.8285.”

Yesterday it was announced that the UK is officially in recession after its quarterly GDP growth rate registered a second consecutive negative reading (-0.3%, followed by today's -0.2%). UK YoY GDP growth did worse than expected, reaching 0.0% while the 3 month change of the Index of Services came in line with forecasts at 0.2%. The eurozone's consumer, economic and industrial confidence indices did worse than expected with scores of -19.9, 92.8 and -9.0, respectively.

The pair is currently trading at 0.8164, down by 0.18%.

What happens if the broker can't find a match for a position? Do they take the other side of it? Or do they look for clients orders from another brokers?

The price of the barrel of the American benchmark for the light crude oil is trading lower on Tuesday, following some strength in the greenback and the effects of a probable slowdown in the Chinese economy, the world’s second oil consumer. According to data, demand for crude oil in China has dropped to the lowest level since November 2011, to 9.51 million barrels/day in March.

It is worth noting that despite yesterday’s improvement in the HSBC flash manufacturing PMI in China, the value still remains under the 50 threshold, indicative of contraction.

As of writing, WTI is down 0.11% at $103.01

Next support levels lie at 102.01 followed by 100.88 and then 99.92, while resistance levels are located at 104.09 ahead of 105.04 and finally 106.17.

When price moves lets say one pip, what EXACTLY does that mean? What is the mathematical model behind it? WHo calculates the pip change.