10th March 2015

Market Commentary

USD made a big push yesterday as large specs started adding the pressure. EUR/USD now 106 as momentum gathers  and confidence in the EUR base currency erodes rapidly with the new wave of selling oddly enough triggered by that US employment report last friday. The Dow plunged woefully 332.78 points, -1.85% to close at 17662.94 in the wake of the rising USD strength with the specter of rising interest rates becoming more formidable every day.   Sydney, Tokyo, Zurich, Frankfurt, central banks across 15 nations are trying to cut their interest rates and apply open market operations and a form of Q.E. to try buy back government bonds to boost domestic economies. The US went through that phase 7 years ago when Ben Bernanke first implemented the program of stimulus through the repurchase of government debt to pump more liquidity into the system. It was a long and hard fight but the US economy was much more diversified in comparison to that other economic deflationary disaster of Japan in the 1990's. Now, with the US economy shedding off the credit binge of 2008, growth is a consistency and therefore the yield differential in bond markets becomes the US Dollar is now the golden child of the global currency market. http://www.bloomberg.com/news/articles/2015-03-10/four-charts-that-show-the-dollar-s-big-day 

But of course the yield differential is not as straightforward for investors seeking to capitalize on income gain. The rate of currency appreciation as the base for the US domestic bond market brings more problems for foreigner investors who seek to cash out and convert back to their fast depreciating domestic currencies like EUR and Yen. Furthermore what is bizarre is that since the SNB shock of Jan 16th 2015 and the depreciation of the USD, since then, the USD has almost retraced 70% of the big drop in an immense show of strength. Dollar strength is not good news for commodities like oil and the metals. In view of large spec attention now drawn to the currency markets we should expect a quietening of the commodity markets. The CRB Reuters/ Jefferies chart now having declined from the 280 level on Oct 6 2014 to 216 by the present week, confirming that crude oil and gold will continue to slide as Dollar rises.
 
 
US DX
98.670     +1.008 +1.30%
Support  97.455   Resistance 99.235


EUR
1.067800     -0.015270 -1.41%
Support   1.06000      Resistance  1.09220


Crude Oil
48.66     +0.37 +0.74%
Support    46.79     Resistance 51.11


Gold
1161.845     -6.420 -0.55%
Support  1,145.4   Resistance    1,177.0
       

Pieter Bergli - DeLoren Trust Holdings

A non-profit commitment to provide education on the properties of currency markets

Forex market commentaries and media reports for free

 
Disclaimer - U.S. Government Required Disclaimer - Commodity Futures Trading Commission

Futures and Options trading involves risks of losses. No representation is being made that any reader and account will or is likely to achieve profits or losses similar to those that are being discussed on this blog http://forexeducationperspective.blogspot.com/. The past performance of any trading system or methodology discussed is not necessarily indicative of future results.

CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

All trades, patterns, charts, systems, etc., discussed in this blog http://forexeducationperspective.blogspot.com/ are for educative and illustrative purposes only and not to be construed as specific advisory recommendations for actual trades. Disclaimer -  http://forexeducationperspective.blogspot.com/ bears no responsibility for the trading actions of its readers.