The USD has now increased in volatility over the last 2 weeks and surely this is a deepening problem for spot traders who now have to choose between using deeper stop losses or more expensive option trades to hedge against the volatility. Dollar volatility has surged to 15% compared to the flat channel 5-7% volatility range for 2014. Large specs are unwinding their big USD bets sending the USDX into increasing uncertainty. The FED appears less aggressive and the EUR has been able to claw itself back to the 1.10 mark after specs had drove the EUR to almost challenge parity. Now that the ECB Q.E has implemented much of the fear factor has already been priced in and is slowly being removed as traders begin to observe the working practicality of a bond buy back program in Europe. Goldman Sachs are still pointing to parity and even a decline to the 0.80 mark vs USD. However, such an opinion can only be founded on the maintenance of bond differentials with the US increasing and the EUR rates decreasing. And given the FED new Dovish remarks and the waning of skepticism over ECB open market operations, the USD may yet be sent into a tail-spin of volatility for the remainder of the year as specs start to become divided on the respective values of the USD and EUR. Dollar weakness spurs Crude and the precious metal.
For further analysis turn to Bloomberg -
and
USDX
97.056 +0.102 +0.13%Support 96.146 Resistance 99.126
EUR
1.095630 +0.016940 +1.57%
Support 1.07020 Resistance 1.11100
Crude Oil
47.21 -0.24 -0.52%
Support 44.52 Resistance 49.08
Gold
1189.810 +7.385 +0.62%
Support 1,173.4 Resistance 1,198.2
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.
