Forex Trading Using Intermarket Analysis – Louis B Mendelsohn

JaPan The Ministry of Finance (MoF) is probably the single most important political and monetary institution in Japan and, in fact, the world when it comes to guiding forex policy. It may take just a statement from a MoF official about the economy or the value of the yen to drive the forex market. Japan has been the most active country in using intervention or threats of intervention to protect against undesirable appreciation/depreciation of the yen. The Bank of Japan (BoJ), Japan’s central bank, has considerable independence for some aspects of monetary policy such as the overnight call rate for short-term interbank rates.

The BoJ uses the call rate to signal monetary policy changes, which impact the currency. The BoJ also buys ten-year and twenty-year Japanese Government Bonds (JGBs) every month to inject liquidity into the monetary system. The yield on the benchmark ten- year JGB serves as a key indicator of long-term interest rates. The difference between ten-year JGB yields and those on U.S. ten-year Treasury notes is an important driver of the USD/JPY exchange rates.

Another Japanese government institution that has an impact on the forex market is the Ministry of International Trade and Industry (MITI). MITI looks after the interests of Japanese industry and defends the international trade competitiveness of Japanese corporations. It formerly played a bigger role than now in forex markets. In addition to the normal stream of data (i.e., GDP, trade numbers) that affect most currencies, perhaps the most important economic report from Japan is the quarterly Tankan survey of business sentiment and expectations. eUroPe The single most important financial agency in Europe is the European Central Bank (ECB), which sets interest rates to maintain an economic growth rate of about 2 percent.

In light of votes by several countries to reject a common constitution for the European Union, the authority and role of the ECB is not as clear as that of, say, the U.S. Federal Reserve.

discovering hidden Market reLationships that provide earLy cLues For price direction Louis B. MendeLsohn Foreword By darreLL r. JoBMan MarketpLace Books® coLuMBia, MaryLand Copyright © 2006 by Market Technologies, LLC. All rights reserved. Reproduction or translation of any part of this work beyond that permitted by Section 107 or 108 of the 1976 United States Copyright Act without the permission of the copyright owner is unlawful.

Requests for permission or further information should be addressed to the Permissions Department at Marketplace Books®. VantagePoint Intermarket Analysis Software is a trademark of Market Technologies, LLC. Synergistic Market Analysis and Hurricaneomic Analysis are service marks of Louis B. Mendelsohn. All other trademarks, service marks, or registered trademarks are the property of their respective owners. Other names, designs, titles, words, logos, or phrases in this publication may constitute trademarks, service marks, or trade names of other entities that may be registered in certain jurisdictions.

This publication is designed to provide accurate and authoritative information and the views and opinions of the author in regard to the subject matter covered. It is sold with the understanding that neither the publisher, copyright holder, nor the author is engaged in (1) providing commodity trading advice based on, or tailored to, the commodity interests or cash market positions or other circumstances or characteristics of any particular client, or (2) rendering investment, legal, accounting, or other professional services. If trading or investment advice or other expert assistance is required, the services of a competent and appropriately licensed person should be sought.

From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers. This book, along with other books, is available at discounts that make it realistic to provide them as gifts to your customers, clients, and staff. For more information on these long lasting, cost effective premiums, please call us at 800- 272-2855 or e-mail us at [email protected]. ISBN 1-59280-295-8 Printed in the United States of America. 1 2 3 4 5 6 7 8 9 10 OceanofPDF.com ConTenTs ForeWord ix PreFaCe xV inTrodUCTion xix Chapter 1 WHaT is Forex?

1 If you have traveled internationally, you may already know something about the forex market, today’s hottest marketplace. Discover why you might want to trade forex. Chapter 2 THe Forex markeTPlaCe 11 The forex market is the world’s largest marketplace, dwarfing all other markets combined.

This is a short excerpt from the opening of “” by Unknown, quoted for review and introduction purposes. All rights belong to the copyright holders.

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