Forex Market Commentary
The Dow is back up at the 18000 level having climbed 75 points to close at 18053.58 and Euro Stoxx climbed 25 points to close at 36614.00. Away with the uncertainty and global equities is starting to look less nervous all round. China beat forecasts to show the economy grew at an annual 7% in Q2. The government of China has forecast an economic growth model of 7 percent for 2015; which is the weakest growth rate in 25 years. A cooling economy and stock market crash needs serious attention for the world's second largest economy.
Now that the Greek fears are dwindling by the day and China seems to be over the worse equities scare where do traders sift through the rubble and pick up pieces for tomorrow and beyond?
Starting firstly with the USD. A tightening labor market already at 5.3% unemployment could occur with Q3 results yet to occur and summer jobs to impact the economy. it's very possible that the US labor market can hit the 5% unemployment barometer that the fed needs to watch. Secondly, core inflation; where does the economy stand? Increasing consumer demand will not contribute so much to rising retails costs as much as commodity inputs for manufacture, and that would very much depend upon the price of crude oil and fuels. Crude oil stable at 50-60 Dollar range for the rest of 2015 is not going to raise core inflation from 1.7% to 2% barometer for the Fed.
Coming to the equities markets; its highly unlikely the Fed will not show a bias to listening to the cried of America's largest CEO's for cheap credit. Politics in an election year demands that equities have a stable outlook.
Thirdly; the bonds markets. Now that the Greek scare is over, how will that affect the outlook of international investors that sought flight to quality and 10 to 30 year Treasury against a backdrop of an uncertain Europe and China? With a calming hand of central bankers in Europe and USA bond investors may feel encouraged to search again for higher yields which will be good news for Chinese equities and Emerging Markets as the demand for US Dollar diminishes.
Finally, given the strong need for US data like labor and inflation, it is very likely that we may not see such strong data till the end of this year. Thus an official 25 basis points rate hike may not even appear till at least December this year.
In conclusion the likelihood of EUR/ USD retreating to 1.05 and parity is becoming less likely; conversely EUR/ USD challenging the 1.15 will need some serious activity in the other European nations besides the usual suspects France and Germany doing more than their fair share to offer quality to investors. USDX seems to be finding less probable cause for a sustained attack on the 100 mark. crude oil should stabilize at 50 60 channel and gold bullion should drift back up with seasonal demand in Q4 to 1200 once 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
96.660 +0.055 +0.07%
96.660 +0.055 +0.07%
Support 93.653 Resistance 97.343
Forward 1 year - 95.943. Low growth positive line.
Forward 1 year - 95.943. Low growth positive line.
EUR
1.100300 +0.000430 +0.04%
1.100300 +0.000430 +0.04%
Support 1.08430 Resistance 1.15030
Forward 1 year - 1.13770. Low growth positive line
Crude Oil
53.74 +0.26 +0.50%
Support 51.32 Resistance 55.78
Forward 1 year - 61.31. Low growth positive line.
Forward 1 year - 61.31. Low growth positive line.
Gold
1155.900 +0.685 +0.06%
Support 1,150.5 Resistance 1,174.3
Forward 1 year - 1,186.2 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
