Forex Market Commentary
On the futures contract USDX took a predictable nosedive as traders cleared out flat with the death of positive USD news to carry the USD forwards against its counter-parties. thus the EUr/ Usd high closing at 1.08 for the week reflects more the weakness in sentiment for USD outlook much more than any inherent value for the EUR. Traders want to see a break out either way through the 1.05 or the 1.10 and so we are currently in a sideways trading channel on the EUR/ USD. This week has been another tiresome week for the USD noting the following key important indicators -
1. Housing starts for March rose at an anemic 0.2% to an annual rate of 926,000, and that was expectations of more than one million. Year on comparison shows that housing starts are down 2.5%. So much for all the recent talk of a US property bubble building up again!
2. Industrial production dropped by 0.6%, an that was almost double the decline analysts were expecting.
3. Retail sales rose 0.9%. This was the first increase in the past three months and biggest monthly increase over the year. yet the figure was a dissapointment as economists were looking for an increase of 1.1%.
4. Now, interestingly, the Fed's own Beige Book stated that the US economy in February and March 2015 was improving only "modestly" or "moderately" across most districts. The report used 44 variations of the word "weak" in comparison to the January report which used only 17 such variations of weakness.
For more detailed analysis on fed
http://www.bloomberg.com/news/articles/2015-04-24/it-already-looks-like-this-quarter-will-be-an-economic-disappointment
Also see Bloomberg weighing in on a potential Dollar reversal.
http://www.bloomberg.com/news/videos/2015-04-24/u-s-dollar-will-pull-back-this-summer-pelosky
Technical data is at best an probability based upon historical prices. However as we have witnessed in the case of crude oil the last few weeks; technical data can also get it completely wrong as the technicians that predicted 30 and 20 Dollar bbl had to revise as the market consolidated at 50 dollar. Market forces of demand and supply for the physical settled prices.
Please note that technical data should only be used as a guide but be aware that it is the fundamental data which becomes the trigger that pushes prices - as for example the clear out on the USDX yesterday which was largely reflective on a build up of poor economic releases on the US economy this week.
1. Housing starts for March rose at an anemic 0.2% to an annual rate of 926,000, and that was expectations of more than one million. Year on comparison shows that housing starts are down 2.5%. So much for all the recent talk of a US property bubble building up again!
2. Industrial production dropped by 0.6%, an that was almost double the decline analysts were expecting.
3. Retail sales rose 0.9%. This was the first increase in the past three months and biggest monthly increase over the year. yet the figure was a dissapointment as economists were looking for an increase of 1.1%.
4. Now, interestingly, the Fed's own Beige Book stated that the US economy in February and March 2015 was improving only "modestly" or "moderately" across most districts. The report used 44 variations of the word "weak" in comparison to the January report which used only 17 such variations of weakness.
For more detailed analysis on fed
http://www.bloomberg.com/news/articles/2015-04-24/it-already-looks-like-this-quarter-will-be-an-economic-disappointment
Also see Bloomberg weighing in on a potential Dollar reversal.
http://www.bloomberg.com/news/videos/2015-04-24/u-s-dollar-will-pull-back-this-summer-pelosky
Technical data is at best an probability based upon historical prices. However as we have witnessed in the case of crude oil the last few weeks; technical data can also get it completely wrong as the technicians that predicted 30 and 20 Dollar bbl had to revise as the market consolidated at 50 dollar. Market forces of demand and supply for the physical settled prices.
Please note that technical data should only be used as a guide but be aware that it is the fundamental data which becomes the trigger that pushes prices - as for example the clear out on the USDX yesterday which was largely reflective on a build up of poor economic releases on the US economy this week.
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
96.898 -0.413 -0.53%
Support 96.406 Resistance 98.086
EUR
1.087340 +0.005765 +0.53%
Support 1.07417 Resistance 1.09737
Crude Oil
57.48 -0.26 -0.45%
Support 55.75 Resistance 58.65
Gold
1179.420 -13.350 -1.12%
Support 1,160.2 Resistance 1,202.8
Pieter Bergli - DeLoren Trust Holdings
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