Forex Market Commentary
Terrible pessimism on Wall Street. No matter the upbeat June US University of Michigan Confidence Index ( consumer sentiment) which came in positively at 94.6 vs. the 91.4 estimated. Still the Dow took a beating today. The Dow has been climbing nicely to 18039.37 on Thursday and then plunges today Friday 140 points to close at 17898.84 with an overall sense of anxiety. Traditional June swoon is in full swing. This is because the Michigan report points to consumer sentiment last month and the Fed points to rate hikes in the coming months. It is like comparing yesterday to tomorrow and all that really counts is what's going to happen tomorrow and so far corporate USA is very nervous that continued Dollar strength and retail and commodity price inflation may raise rates and therefore implicate the future costs of borrowing and affect corporate earnings thereby; hence the end of week equities swoon. Read on Bloomberg how large traders are starting to look at hedging mechanisms to iron out the increasing volatility in US equities -
http://www.bloomberg.com/news/articles/2015-06-12/you-can-t-keep-the-panic-out-of-stocks-forever-vix-traders-say
USD is indecisive and traders are looking to the vital In FOMC rate decision that will be given on June 17. This will be the one that will tell us if this is going to be either a directionless or decisive summer. One of the biggest problems the fed have on mind is the sheer insane size of public debt already enar the 18.1 trillion US Dollars mark!. Just to put that into context in the year 2000 a mere 15 years ago the US public debt was some 5.5 trillion US Dollars. Any increase in US interest rates of 25 basis points is going to send the Public debt figure up by 25 billion dollars!
Read on Bloomberg the economic report on reasons why 'full employment' should be standing nearer the 4.3% mark to allow the Fed room to push rate hikes back some more.
http://www.bloomberg.com/news/articles/2015-06-12/here-s-the-research-that-could-push-back-a-fed-september-rate-hike
EUR/USD is beginning to look like the shorts are starting to yield inch by inch as inflationary pressure starts to rear its head and German Bund yields start to close the gap on US Treasuries. EC cot data released yesterday for futures contracts for 9th June shows large specs long 52,643 short 190,617
commercials long316,710 and short 139,995.
Fundamentally, in the absence of the Grexit and salient economic contractions, the USD doesn't have a trade wind to give it that extra boost now in its flight to parity. add to that increasing US trader anxiety and CEO's round corporate America, plus the World bank, all crying out for rate respite, then pretty much the USD not only has lost it's trade wind but is having the stuffing knocked out of it if the US economy is starting to show more signs of grinding to a halt. The Fed is certainly going to listen to swooning CEO's in their cry for cheap money because that's what creates jobs and no government can afford at this time going into election year, to be seen to hold out against jobs creation.
Crude oil retains its bullish sentiment with WTI July contracts sitting nicely above their 20 and 100 day moving averages to suggest that were in for a 'long' summer drives season where gas at the pump can only go north. But volatility will make sure its going to be a very nervous summer for oil traders this year. Gold is looking the opposite and its current August contract is sitting below the 20 and 100 day moving averages attracting even more short attention. this could get really nasty if the USD decides to march back up again.
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
94.953 -0.146 -0.19%
94.953 -0.146 -0.19%
Support 94.362 Resistance 96.452
Forward 1 year -95.877. Low growth positive line.
Forward 1 year -95.877. Low growth positive line.
EUR
1.1266 0.0000 0.00%
Support 1.11037 Resistance 1.13977
Forward 1 year - 1.13490. Low growth positive line
Crude Oil
60.46 -0.76 -1.25%
Support 59.21 Resistance 61.01
Forward 1 year - 62.46. Low growth positive line.
Forward 1 year - 62.46. Low growth positive line.
Gold
1181.3 0.0 0.00%
Support 1,171.4 Resistance 1,187.6
Forward 1 year - 1,185.1 Low growth line.
Pieter Bergli - DeLoren Trust Holdings
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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
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
