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.”

Facebook just acquired the photo-sharing site for a cool US$1 billion. Andreessen Horowitz initially invested US$250,000 in Instagram when it was still called Burbn.

The mobile application development was originally intended to have a location check-in feature similar to Foursquare. It was developed by Google employee Kevin Systrom.

Months after Andreessen Horowitz placed their initial investment, and following no contact nor communication with business partners, Burbn’s development changed course and became a photo-sharing site for iPhone.

This has caused a conflict with Andreessen Horowitz’s other investment in Picplz, an application with the same features.

And while other investors to Systrom’s Instagram doubled their stake and invested even more, Andreessen Horowitz chose to instead go with Picplz and poured US$5 million.

Andreesen took to Quora, a question-and-answer site many developers and proponents of Silicon Valley frequent, to address his company’s decision. He said there was a conflict of interest following the evolution of the product as Burbn to Instagram.

The decision proved to be a mistake. In July of 2011, and after six months of trying to gain 100,000 users, the site was turned over by its founders to Sporcle, an online trivia site.

Andreessen Horowitz’s initial investment of US$250,000 on Burbn—now Instagram—was dissolved to $US7 million. But it would have been $US200 million had the company stayed on.

Industry sources say that the sixth-generation iPhone may include a 3D camera which will have huge implications for iPhone application development. According to Patently Apple, the tech giant has filed for a patent on a new 3D imaging camera that is both applicable to video and photography.

Patently Apple is a news site that provides updates on Apple’s intellectual property moves. The patent application was filed by the tech giant in the third quarter of 2011.

According to the site, the camera will feature depth-detection sensors like RADAR, LIDAR and Laser. These sensors can use stereo disparity maps to create 3D images. The blog post also revealed that the cameras boast of advanced luminance sensors and chrominance, which are essential elements in superior color accuracy.

Industry observers note that if the rumors are true, the 3D image capturing would be, by far, the most advanced camera technology the market will have. Current 3D cameras have limited depth-perception capability.

Although Apple has not issued a statement, many are speculating and hoping that iPhone 5 will have these features.

Sources have also noted that Foxconn, the China-based supplier of Apple, has hired 20,000 additional workers in their factories. Speculations swirl that these would work on the iPhone 5.

Apple’s latest iPhone 4S was launched last October 11. It was the first Apple smartphone launched without Steve Jobs, who by then was battling with cancer and could not make his traditional unveiling speech. Jobs died a day after the iPhone 4S launch.

The iPhone Dev Secrets Review site is offering its video training guide for just $1. Its spokesperson said learning how to create your own apps can be your jumpstart to managing your own business. At a time when it’s hard to find a job, the spokesperson said creating apps can provide you income.

The video course provides entrepreneurs with a step-by-step iphone development guide. It also provides users marketing tips on how to create a buzz and make money.

The website states that the iPhone Dev Secrets is not just a programming guide. People with no background in coding and developing would easily understand the steps. The video also focuses on the business aspect that would make your idea profitable.

iPhone Dev Secrets appears to be taking advantage of the trend where more people are using apps to do different things. Productivity apps, educational apps and game apps are regularly downloaded for a small fee.

In the last couple of years, several game app have taken the world by storm because of their high entertainment value. Rovio, the developer of Angry Birds, has franchised its brand and expanded it to movies, merchandise, and other versions of the game app.

DrawSomething, developed by OMGPOP, has been downloaded 50 million times and has surpassed the popularity of Angry Birds.

What does the Apple TV offer? The Apple TV is believed to allow homemade content to be displayed on several screens in varying resolutions. These include other television sets and computers.

Some say that it would the capability to allow iOs users to create and develop their own applications.

Although this is good news for app development, the tool may not resonate that well with ordinary Mac users. Developing applications can take weeks or months of programming. The more complicated apps would also require a team of developers.

The online world is abuzz with rumors of an Apple TV. Research group CLSA said another proof that proves an Apple TV is in the works is Foxconn’s purchase of 121.65 million shares in Sharp. Each share costs 550 yen.

Hon Hai Chairman Terry Gou also purchased a separate 46.5 percent stake in the Sakai plant of Sharp. Hon Hai is Foxconn’s mother company.

Reports have also revealed that Apple itself has invested more than $1 billion of equipment that is earmarked for Sharp factories. Industry observers, however, say it won’t be a reality until 2013.

Apple has not released any statement about the new product but speculations are plenty online. Some observers say that the new Apple TV is likely to integrate the iPhone and iPad experience with existing TV hardware.

Others, meanwhile, predict that Apple would launch its own TV set that would directly compete with the likes of Panasonic, Philips, Samsung, and Sony.

While there is no official word from Apple, the waiting game continues.

Topeka Capital Markets’ Brian White forecasted that Apple’s stock price may breach the US$1,000 mark within the year.  Another industry analyst was more modest, saying Apple can reach that milestone by 2014. 

But Apple surpassing Google’s stock price is real. Last week, one Apple share is worth US$633.38. This was a big jump from last year’s price at US$341. 

It is apparent that Apple founder Steve Job’s demise hasn’t negatively affected Apple’s future. Despite apprehensions from industry observers, Apple’s star continues to rise, thanks to Apple chief executive Tim Cook. 

Last year, Apple posted record sales with 37 million iPhones and 15.5 million iPads sold at the end of 2011. In the same year, the company also posted double profits to US$13.06 billion. 

Apple’s influence is also expected to reach at least 10 percent of China’s high-end subscriber base, thanks to its partnership with China Unicorn. 

If Apple really want to dominate the tech world, White said it has to venture into and launch a new product—the television. Although the rumor mill has been buzzing around that Apple has always been interested in the TV market, no concrete details have been released to the media.

There are clues, however, to support this prediction with Apple manufacturer Foxconn buying 11 percent stake in Sharp Corp.’s LCD display maker. Apple also has an existing TV called Apple TV although this hasn’t been as successful compared to other Apple devices.

Apple’s audit was conducted by Fair Labour Association, a non-profit organization that audits overseas suppliers and ensures that good working practices are implemented. FLA usually caters to fashion and apparel companies. Apple is the first tech company to join the organization.

Foxconn’s work practice is in direct violation of Chinese laws. The audit also found that the factories run by Foxconn also extend operations to overtime in an effort to make more money.

Hon Hai Precision Industry Co, the official company name of Foxconn, has made a commitment to reduce working hours to a maximum of 49 hours a week. Hon Hai also agreed to increase workers’ hourly salaries despite the reduction of work hours.

This is not the first time that Foxconn figured in controversy. Last year, the factories had an incidence of seven deaths and nine suicide attempts. More than 350 of its workers also threatened to commit mass suicide after Foxconn rejected their proposal for a salary increase.

FLA chief executive officer Auret van Heerden said that it’s a common practice for employees in developing countries to work overtime because this brings in more money. Many workers don’t see it as inhuman and instead, appreciate the opportunity to have steady income.

FLA said that workers in the Foxconn factories earn from US$347 to US$437 monthly.