22nd April Currency markets, news and analysis

Forex Market Commentary  

European equities were rather flat on lack of earnings strength but Greek Finance Minister Yanis Varoufakis said that he was confident Greece would reach a deal with its international lenders and that helped to buoy the EUR/ USD. With the USD overgrown there is a significant threat that a weakening Dollar could lessen the demand for US government debt from foreign bond traders and investors. In fact half of the US treasury market is dominated by international investors, in particular, Chinese. Us economic data is starting to sag in increasing frequency and comments from the US fed appear to indicate a delayed introduction of rate hikes. the problem is that if the USD starts a reversal as it surely may, then the Us bonds markets may also suffer as a consequence. Most analysts are now looking to the end of the year for rate revision as the hype of US economic growth is yet unproven and in fact the USD investment may yet prove to be too much too soon.

A retreating USD may give fresh impetus to commodities like crude oil and the bullion markets. Dollar longs must consider the dearth of positive Dollar news to support further Dollar growth and a push of the USDX to the 100 mark and beyond. The next likely dollar scenario would be a lull as us economic data slows further as commodity prices rise and then if inflation starts to grow the US fed may have to consider 25 basis points rate hike and that would then spur the USD back into action as well as the US bond markets. Dollar longs consider growing evidence for a reversal and look to option covers if a market position is to be maintained for the long term.

Always look to support and resistance band lines as the key to understanding in the long and short term where prices are converging. Professional technical traders use 50 day and 200 day medium and slow moving averages as fundamental cornerstones for interpreting the direction of price action.

USDX

98.195     +0.131 +0.17%

Support 97.299  Resistance  98.769

EUR  

1.071000     -0.001435 -0.13%

Support   1.06643  Resistance 1.08503

Crude Oil  

56.25     +0.09 +0.16%

Support   54.90   Resistance 57.82

Gold

1187.185     -14.005 -1.17%

Support   1,172.7       Resistance 1,211.5

        




Pieter Bergli - DeLoren Trust Holdings

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