It sounds like a play on words, based on the Karate Kid refrain, Wax-On Wax Off , and for all I know it was. Still, I rather like this characterization – coined by a research team at HSBC – of the markets ‘ current performance

The rally in the Pound, which lifted it 10% from trough to peak, appears to be fizzling. The Pound is already down 3% in the last two weeks, and is trending downward. It now stands at a four-week low against the Dollar

I shouldn’t have been so complacent in declaring the paradigm shift in forex markets, whereby risk aversion had given way to comparative growth and interest rate differentials. While such a shift might have been present – or even dominant – in forex markets over the last couple months, it appears to have once again been superseded by the so-called safe haven trade .

In early July, when the Euro rally was (in hindsight) just getting under way, I reported on the apparent paradigm shift in forex markets , whereby risk-driven trades that benefited the Dollar were giving way to trades driven by fundamentals, which could conceivably favor the Euro. Since then, the Euro has continued to rally (bringing the total to 12% since the beginning of June), confirming the paradigm shift.

Next week, the Open Market Committee (OMC) of the Federal Reserve Bank will hold its monthly meeting. Even without checking futures prices, it’s obvious that the probability of an interest rate hike is nil

With the onset of the Eurozone sovereign debt crisis this year, volatility levels in forex (as well as in other financial markets), surged to levels not seen since the height of the credit crisis. While volatility has subsided slightly over the last few months, it still remains above its average for the year, and significantly above levels of the last five years.

It has been three years since the Bank of International Settlements’ last report on foreign exchange was released. Since then, analysts could only speculate about how the forex market has evolved and changed. The wait is now over, thanks to a huge data release by the world’s Central Bank, which showed that daily trading volume currently averages $4.1 Trillion, a 28% jump since 2007.

Opposite to normal thinking, Forex is now known by many people in the world. Nowadays, both big players and small organization and individuals participate in forex trading. It’s no longer ruled by the big players, every people can do forex trading

{Visit – www.hbjcapital.com for more details} We are happy to announce “The Combo Special Offer” from HBJ Capital, valid for just 5 days (from Mid Night July 22nd to Mid Night July 26th).

Today is the release of the much-anticipated results of the European bank stress tests, which are due out at 12 EST.  There has been much speculation surrounding the tests, which are intended to provide clarity and transparency into the health of the European banking system. Much of the recent rhetoric leading up to the tests has been positive; however it will be interesting to see if the market agrees.  There is still some risk surrounding the results, as potential red flags still exist.  Potential red flags could be the believability of the tests if only a few banks fail, or the new knowledge that more banks may be in trouble if more than expected fail.   Either way, the market appreciates transparency, so in the long run this should be a positive. The Euro has made a nice run higher from its June lows, so a reversal or pullback would not be out of the question entirely