Forex Market Commentary
The long awaited April U.S. job data was positive but the reaction in the currency markets was rather curious as momentum specs did not jump in to push the currency in a positive direction. Yes, U.S. job data for April indicated that there were strong under currents for the US jobs market that could keep the Federal Reserve to increase it's hawkishness over a possible hike interest rates this year. But where where the Dollar big guns? Immediately The Dow Jones Industrial Average rose 156.48 points on open, or 0.87 percent, to 18,080 points and then soared267 points to close the day session at the 18191.11.
Confused? It didn't all go as expected by the text book for noise traders who jump in on news releases.
The unemployment rate dropped to 5.4 percent and there was a net increase in employment by 223,000, which follows from a net increase of 85,000 gain in March data, which was the smallest since June 2012. Technically that is impressive. The jobless rate has now fallen to the lowest since May 2008.
See on Bloomberg -
http://www.bloomberg.com/news/articles/2015-05-08/payrolls-gains-seen-keeping-fed-on-pace-for-september-rate-rise
That's all rather well for Bloomberg but largely the market played a wait and see on friday with no specs taking major long positions. Basically there is no new news. We already know that the U.S. economy is bound to fare much better with summer round the corner in Q2 and Q3. That expectation of jobs growth has already been priced in so there's nothing really new in this Fed watch song and dance.
The USDX for the day traded in a range - high 95.065 low 94.324 and the EUR/USD impressively stood its ground in a trading range between 1.12715 and 1.11840 finally resting on weekend close at the 1.12 mark almost at the same position prior to the data release. No stampede and no exit for the EUR/USD. Very curious indeed. Clearly the specs were not impressed with the unemployment data and need more evidence to resume their Dollar long positions.
Interestingly the resumption of crude prices has seen U.S shale producers take a second look at their plant and how to come back online and operate with the prospect of 70 Dollars not far off the horizon. the economics are there; the glut is receding, physical demand is strong and there is opportunity in this industry once again for prices to increase. See on Bloomberg -
http://www.bloomberg.com/news/articles/2015-05-08/america-s-oil-drilling-boom-is-sputtering-back-to-life
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 into equilibrium of demand and supply.
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
US Dollar
94.773 +0.153 +0.20%
94.773 +0.153 +0.20%
Support 93.851 Resistance 95.701
Forward 1 year - 95.950. Flat line.
Forward 1 year - 95.950. Flat line.
EUR
1.12100 -0.00321 -0.29%
Support 1.11133 Resistance 1.13513
Forward 1 year - 1.13020. Flat line.
Crude Oil
59.45 +0.51 +0.86%
Support 57.38 Resistance 60.90
Forward 1 year - 63.52. Low growth positive line.
Forward 1 year - 63.52. Low growth positive line.
Gold
1188.095 +3.955 +0.33%
Support 1,175.0 Resistance 1,200.0
Forward 1 year - 1,194.5. Low growth line.
Pieter Bergli - DeLoren Trust Holdings
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Forex market commentaries and media reports for free
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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
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
