Dollar strength has been the dominant trend as we head into the second half of the summer, with the PowerShares DB US Dollar Index Bullish ETF (NYSE: UUP) starting the month at new highs.  These moves have been propelled largely by geopolitical concerns in areas like the Ukraine, Gaza, and Iraq.  Typically, the summer months tend to be market by slower price volatility, but geopolitical concerns like these can have the potential to influence short-term trends in illiquid markets.  Here, we look at the latest technical developments in the forex majors.

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AUD/USD – Australian Dollar vs. US Dollar

Critical Resistance:   0.9505

Critical Support:   0.9210

(Chart Source:  CornerTrader)

AUD/USD Forex Strategy:  Wait for additional pushes lower before getting long again.  Buy at 0.9110, with stop losses below the 0.90 mark in AUD/USD.

The Aussie is starting to show slowing momentum and prices are now rolling over after hitting highs at 0.9505.   Further downside is now expected, given that the AUD failed at 78.6% Fibonacci retracement at 0.95.  Critical support can now be found at 0.92 but any approach of this level would create a head and shoulders pattern on the hourly charts, and a break of 0.92 could be defined as the neckline.  Daily RSI is approaching oversold territory, so bounces are still possible.  The data in these trends has also been confirmed by reports released by FXPips.

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GBP/JPY – British Pound vs. Japanese Yen

Critical Resistance:   1.7530

Critical Support:   1.6950

(Chart Source:  CornerTrader)

GBP/JPY Forex Strategy:  Stay with the positive trend but wait for better buying opportunities, after prices move into oversold territory.  Go long at 1.7050, with a stop loss below 169.50.  

The GBP/JPY is showing a strong uptrend, with long-term highs posted at 175.30  But we are seeing prices drop below the 100-day moving average and break the uptrend line that started back in February.  This suggests that the forex pair has further to fall, and the RSI still has more room to the downside before becoming oversold.  Strong support is not seen until we reach 1.6950, so it is prudent for forex traders to wait until price reach these areas before buying again.

When we think of traditional investments, stocks and mutual funds are probably the first things that come to mind.  But when we think in historical terms, precious metals have been around far longer, and are still actively used by investors today.  Assets like gold and silver have set a strong historical precedent in the marketplace but there can be difficulties when trying to figure out when and how to invest.  There are common market instruments like the SPDR Gold Trust ETF (GLD) and the iShares Silver Trust ETF (SLV), but these are typically referred to as “paper assets” because they do not allow you to take ownership is physical assets.

Physical Assets vs. Market Funds

In these cases (GLD and SLV), you are buying into a fund.  This is very different from buying a gold coin or gold bar, and these two asset types will generally not trade at the same value.  For these reasons, most traditional investors feel much more comfortable owning physical gold or silver, which generally comes in the form of jewelry, gold coins, or gold bars.  There is a variety of ways to buy these types of assets but it is important to understand that much of what you might typically see in the financial news headlines does not actually refer to gold prices, but instead to funds that are designed to trade close to the underlying prices in the physical metal.

When To Buy Gold

Now comes the real question:  When is the best time to start buying gold?  Traditionally, investors have used gold as a hedge against price inflation and a falling US Dollar.  When the Dollar is buying, your cash purchasing power is falling, and it will often make sense to start moving into safer assets in order to gain additional financial protection.  Most investment managers recommend that you have at least some precious metals exposure as part of your portfolio.

Gold also tends to perform well during times of uncertainty.  If we think back a few years to the financial crisis of 2008, gold markets began trading in an incredibly strong rally that ultimately reached valuations above $1,900 per ounce.  This was largely because investors were looking for asset security during a time of financial turmoil.  Since gold has one of the longest histories as a stable financial market asset, gold tends to be one of the first choices when the economy starts to look gloomy and negative.

But even when we understand these historical tendencies, there are still difficulties that can be found when you first start trying to invest in gold and other precious metals (like silver or platinum).  Daily commodities market updates at ForexMinute offer a good way for investors to stay ahead of the market and to monitor gold prices as they begin to change.  It can be easy to miss new information and start to make position mistakes if this is not done correctly.  Fortunately, these mistakes can be avoided when we take a conservative approach.

How Long Should You Hold a Gold Investment?

Gold investments tend to be long-term investments.  This means that most people buying exposure in these sectors tend to avoid the “day trader mentality” and hold their positions for extended periods of time.  When price moves occur in gold and other metals, those moves tend to unfold over years (rather than months or days).  This is the reason that a majority of investment advisers recommend obtaining exposure with a “retirement mindset” rather than to assume you will be actively buying and selling your assets on a regular basis.  Fortunately, this makes investments in these areas much easier as you will not be forced to “time the market” and risk significant losses if you happen to buy or sell at the wrong time.

When we look at the price activity seen in recent weeks, it certainly looks like the tide is turning for the Euro and that we are ready to see lower market valuations into next quarter.  From a chart perspective, we have already seen a break in critical support in the 1.3630 region and was a highly bearish move that has built in momentum and sent prices much lower as we head into the middle of June.

On the other side of the coin (looking at the fundamentals), there are plenty of factors that support these moves.  So while the US Dollar has been on the receiving end of most of this year’s selling pressure, there have been many developing reasons for why forex traders should have expected bearish moved in the Euro shared currency.  For stock traders, it will be important to see how the PowerShares DB US Dollar Index Bullish ETF (NYSE:UUP)  and SPDR S&P 500 Trust ETF (NYSE:SPY) behave in response.  But there is likely to be some carry over into precious metals, as well.  So watch for increased volatility in the SPDR Gold Trust ETF (NYSE:GLD) and the iShares Silver Trust ETF (NYSE:SLV).

New investors should consider researching these topics further, and learn finance online at Global Finance School.

Sovereign Debt Crisis

Most important is the fact that there is little reason to believe that the Eurozone has officially recovered from its sovereign debt crisis from just a few years back.  If you remember, these negative economic scenarios tyrannized financial news headlines for an extended period of time and then quickly disappeared.  But when we look at the underlying economic data, this lack of attention makes little sense.  What makes even less sense is the fact that the currency has been rallying against the Dollar for most of this year even though the Federal Reserve has made it abundantly clear that its QE stimulus programs will be completed before the end of this year.

Since this essentially means that fewer Dollars will be running through the global economic system (and no real change in the underlying demand for the US currency), the implications here should be bullish for the currency.  But the broader cross-currency correlations have snowballed and the resulting forex news stories for most of the year have involved higher market valuations in the EUR/USD and GBP/USD.  These latest moves signal that a change is afoot and that the market is now ready to correct back toward its fundamentals.  This means that forex traders will need to acknowledge the 11.3% unemployment that is seen in the region as a whole along with the fact that annual growth numbers as measured by GDP clearly favor the US economy on a relative basis.

Chart Perspective:  EUR/USD

But while most of the market has ignored the fundamentals and traded almost entirely using momentum based strategies, the break of 1.3630 has confirmed that a new environment is in place and that the Euro itself is likely to encounter prolonged weakness.  “Critical support for the EUR/USD was originally found at 1.3630, but since this area was invalidated we are not likely to encounter additional support until we reach 1.3480,” according to the expert market analysis team at ForexAbode.  “1.35 is likely to give some psychological support in the interim but the overall bias is clearly bearish given the latest price trajectory.”

Google is said to be negotiating the fine. Industry analysts said that the ruling is a landmark case as this is the first fine imposed by the FTC for internet privacy violation. 

According to reports, Google violated user’s consent decree by planting cookies on Apple’s internet browser. This essentially bypassed Apple’s privacy settings. 

The cookies planted by Google aimed those advertisements targeting Safari users. Google said that they did not expect the cookies to bypass the privacy protections of Safari. The company also pledged to remove the files. 

Jonathan Mayer, a researcher from Stanford, was the first to discover the breach. Mayer published his findings on his blog last February 16. 

Google spokesman Chris Gaither said the company is prepared to cooperate with the commission for any questions. Claudia Bourne Farrell, spokeswoman for the FTC, did not issue a comment. 

The consent decree was signed by Google and the FTC last year. The decree was to settle allegations that the company violated its privacy policies when it launched its social networking service Buzz in 2010. 

Under the 20-year settlement, Google is barred from misrepresenting how the company handles information of users. It also mandates the company to strictly follow policies on consumer data protection. 

According to Centre for Digital Democracy executive director Jeffrey Chester, Google is quickly becoming the poster child of privacy problems.

Symantec said the virus targets searches made on Google using Firefox, Safari or Chrome. The virus also directs users to pages that have been determined by the hackers. Symantec is an Internet security firm, which offers anti-virus software. 

Symantec added that when a user clicks an online ad, he is then directed to websites of various publishers and merchants. The hackers earn about eight cents per click instead of Google receiving the amount as referral fee. 

A researcher from Symantec said Google doesn’t receive any money from these hijacked clicks and the tech giant is essentially losing as much as $10,000 in daily revenue. 

Based on Symantec’s research, those affected by Trojan are Macintosh computers. Last month, Apple issued a software update that should prevent Flashback from affecting its computers. The virus was believed to be hijacking Java programs. 

Industry analysts said that Flashback may have affected as many as 600,000 Apple computers globally, with about 30,000 of these in Australia.

The breach was discovered by Dr. Web in early April. Dr. Web is a Russian security firm. Mac users turned to online to express their disappointment over the tech giant. 

Tech bloggers have also advised users to delete Java from their Mac computer if they are not using the software at all. 

The appearance of Flashback in Mac computers has put the spotlight on Apple with industry observers saying more hackers might attempt to hack Apple devices.

The US commission has launched a 17-month investigation on Google Street View, a technology that allows Google to have a panoramic view of many streets all over the world.

The investigation revealed that from May 2007 to May 2010, Google Street View gathered data from Wi-Fi networks to establish locations of users, which are then used to provide location-based services. The anomaly came when Google also gathered data that are not related to the Street View project like emails, passwords, text messages and other important details.

When regulators questioned Google what kind of information they gathered, the company refused to be specific, saying that disclosure is a violation of wiretapping and privacy laws. It maintained, however, that the data collection was legal.

A spokeswoman from Google said the company is enforcing stricter controls on privacy as a result of the issues surrounding Street View. She added that now the investigation is over, everyone can now move forward.

When the breach was first leaked two years ago, the company said the data collection was an unauthorized move of an engineer who acted on his own. Google also insisted that the data collected were never used on any Google product.

Electronic Privacy Information Center executive director Marc Rotenberg said a rogue Google engineer was behind the data collection.

The US Federal Communications Commission said that the tech giant did not violate any laws. The commission, however, imposed a US$25,000 fine on Google.

It used to be that when a user logs in to his Google accounts, he is asked to type random letters and numbers to prove the user is human and not a bot. Reports, however, revealed that Google asks users to identify property numbers as part of its security questions.

The latest change has raised more than a few eyebrows and a lot of tongues wagging. Big Brother Watch privacy and civil liberties director Nick Pickles said that Google’s latest move is a serious privacy issue. He said that it appears Google uses the public as unwitting data loggers. He added that the move is crude and underhanded.

A spokesperson from the tech company confirmed that using house numbers as part of security questions is a trial. He, however, said that house numbers are not used all the time. Instead, it only appears 10 percent of the total security questions.

The spokesperson insisted that the move doesn’t pose any security risk. He reiterated that the company remains committed to privacy and that asking for the property number doesn’t necessarily mean asking for the complete address.

He added that getting the numbers doesn’t involve contextual, geographical nor individual information.

Over the last few years, Google has figured in several controversies concerning violations of user privacy. Just recently, the company paid US$25,000 for gathering personal data via the Street View project. The data were collected without the users’ permission and knowledge.

Google posted a teaser video in its social networking site Google+. The video shows people wearing the Google glasses, which display different kinds of information from directions to calendar reminders to messages from friends to weather forecasts. 

The glasses also come with built-in microphones that would allow the person to give commands. 

Google said Project Glass is the brainchild of Google X (Labs). Although the technology behind the glasses is still at least a year from happening, the company wants to start the discussion and solicit viewpoints from the audience. 

The tech giant also issued an invite to people, asking them to give their feedback in its Google+ page. 

The augmented-reality eyewear is expected to create more intense competition with rivals Facebook and Apple. If Google glasses become a reality, this would directly compete with smart phones and even Apple devices. Instead of checking your phone or Apple gadget to look for information, one can just use his Google glasses. 

And because Google glasses have voice recognition capability, this also competes with Apple’s Siri. 

Industry observers believe that despite the lack of experience in hardware capability, they believe that Google is in the best position to create the technology or software for the eyewear. But it remains to be seen whether people will be open to adapting to the technology and using the glasses.

Terms such as “court order” have been changed to “softer terms” like “government request” to circumvent some laws. The term “court order” implies that authorities can get data from web companies literally without a ruling from the courts. The term has now been changed to “government request.”

Vaile is concerned that this pattern would lead to “fishing expeditions,” an act that extracts information without the need to get a search warrant. This can pose a serious threat to privacy.

Vaile said that a court order provides a roadblock to authorities because of the need to justify their actions. Without this clause, authorities can just request for user data without heavy justification. Authorities may also start routinely requesting for user data even without a justifiable need.

Google has recently updated its Privacy Policy. The policy indicates that the company may provide user data upon the request of government.

Google, however, refused to discuss the details of the privacy changes. It released a statement saying requests are all evaluated. The web giant reiterated its commitment to privacy saying users are notified if changes affect them.

Mia Garlick, Facebook Communications and Policy manager, said that Facebook places safety and security as top priorities. Garlick said the company has a strong relationship with local authorities and that systems are in place in case they need assistance.

While it is safe to assume that these three brands are most trusted, the underlying message is that Australians trust foreign brands more than local brands like Qantas and Dairy Farmers.

BAV director Keith Newton said the most brands are concerned in sales rather than strengthening their leadership and innovating.

He added that brand trust in insurance, retailers, utilities and financial services has declined more than 20 percent in the last couple of years. The decline is because of continuous price increase, poor customer service, and limited offers.

The rise of “house brands” also contributes to the declining trust in major brands. Supermarkets have released their own brands to compete with big brands. These “house brands” are priced considerably lower and have the same high quality.

Aside from the top three most trusted brands, other brands that made it to the list include Paypal, YouTube, Microsoft, Windows 7, eBay.com, and Wii. It is worthy to observe that the most trusted brands continue to improve their products and services.

Among the brands that continue to decline in terms of consumer trust include OPSM, Mr. Sheen, Dymocks, Meadow Lea, and Levi’s.

Brand Asset Valuator is the leading database of products and brands. The study was conducted online covering 5,000 Australians. The study also covered 1,300 brands across more than 120 categories. BAV regularly conducts the survey to measure consumer awareness and trust.