Forex Zone (Forex Zone)
Czech markets  |  August 06, 2012 10:21:11

Alteration of a computer system might become a living trading company


Knight Capital Group, the largest retail market maker for any shares on the NYSE and Nasdaq, last Tuesday made ??changes to their computer systems to be adapted to changes in the NYSE. On Wednesday after market opening systems, however, began to Knight Capital Group on the NYSE floor to send unwanted orders, making "inflated" the value of certain shares to be doubled. When the shares began returning to normal, Knight already had on its books a large loss, which, according to available data on the whole amounted to $ 440 million. Knight was lucky in the fact that due to excessive volatility, which caused its shares to certain orders, activated the emergency brake, set by the exchange and equity trading was halted. Otherwise, the loss could be even greater.

Today, it is expected that a group of investors come to the rescue of Knight Capital rescue package of $ 400 million that the company could continue to function and, by extension, in order to operate brokerage firm which provides services to Knight. Among those include TD Ameritrade, Vanguard and Fidelity Investments.

This event shows how much influence these days have a computer and stores them as input to the market and, by extension, the company that trades as follows. In this environment, are not immune either small retail traders, but not great players. These anomalies can bring great loss to both.

As regards developments in the monitored pair EUR / USD, so that we really surprised on Friday. After strong sales response on Thursday, we expect further consolidation or decline. Instead, a couple of early European session to strengthen the market close and erased almost all Thursday's decline. He got so into the area where we have registered strong input dealers.

During today's Asian session high of testing the market on Thursday last week, where, in our opinion, was placed a large number of stop loss. About today's Asian session high, however, we again observed a relatively strong input dealers. Our view remains bearish. We expect the market will return to the margins, which emerged in the last 6 days and will test the 1.2300 level. Then we will wait to test whether the price will be toward the low margins, or whether the issue is to test 1.2500 level to which we have already pointed out in the past .

Currently the pair EUR / USD traded at 1.2368 price. Above this price, we see significant resistance around 1.2480 and 1.2500 around. Under the current market price, we see major support around 1.2345 and 1.2300 around.

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