Forex Market Commentary
Firstly, on the equities front, the Dow has consolidated back above the 18,000 level this week to close on friday at 18086.45 some 33 points down on the day but overall a good gain for the week. The SSE Composite Index Shanghai had a stormer to close on Friday at 3,957.35 which up 134.18 points or 3.51%. In fact it could be said that it was the consolidation in the Chinese market that prevented the Euro stoxx 50 from a rout to come in at 3672 just a meager -5 points but overall forming a consolidation pattern given the mess of Greece.
Greece in a mess. Bloomberg sums up nicely an explanation of the 3rd bail out since Greece joined the Euro currency. Please read here -
http://www.bloomberg.com/news/articles/2015-07-17/here-s-what-membership-in-the-euro-did-for-greece
Now why did we turn to equities first? Equities are a healthy barometer of interest rates sentiment and investor outlook which fuels currency demand. Since the global economy of 2015 is so inter-connected what takes shape in Shanghai becomes extremely important not only because it is one of the first trading sessions of the day but because of the economic importance of China to Europe and USA. traders are more or less agreed that growth outlook is going to come in considerably less and were going to adjust to new ranges of GDP growth in the 7% range. But domestic and international investor nervousness at this shock of the weaker growth rate will soon abate and that will all funnel into a consolidation pattern which will then strengthen the outlook for commodity demand.
See on Bloomberg reasons traders believe Chinese equities will consolidate now
http://www.bloomberg.com/news/videos/2015-07-17/we-ve-clearly-seen-a-floor-in-chinese-stocks-rooney-vera
The weakness of China makes it tough for the Fed to listen to Wall Street and Shanghai in the cry for cheap credit which would then hold back the strength of the Dollar. With trade flows between USA and China and Europe and China reaching over $1 trillion in both bilateral trade, the Fed needs to see China mature its trade relationships for the interests of USA corporate giants. Wall Streeters want to see the Chinese consumer eating a Big Mac and drinking a Coca Cola or a Starbucks coffee. Cheap Dollar credit is not only an issue now for the US economy today.
Crude oil is holding at 51 and should Chinese equities now consolidate we do not expect any further decline in price. But Iran is a major factor and increased exports from Iran could dampen prices. Gold bulion on the other hand is facing an abysmal loss of confidence as the price has now collapsed to the 1130's region. Read on Reuters the Iran factor in the crude markets -
http://www.reuters.com/article/2015/07/17/us-markets-oil-idUSKCN0PQ03720150717
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
97.956 +0.295 +0.38%
97.956 +0.295 +0.38%
Support 97.316 Resistance 98.436
Forward 1 year - 98.969s.
Forward 1 year - 98.969s.
EUR
1.08310 -0.00585 -0.54%
1.08310 -0.00585 -0.54%
Support 1.07897 Resistance 1.09497
Forward 1 year - 1.11480s.
Crude Oil
51.15 -0.09 -0.18%
Support 49.66 Resistance 51.84
Forward 1 year - 58.43s.
Forward 1 year - 58.43s.
Gold
1134.82 -9.64 -0.84%
Support 1,120.4 Resistance 1,150.2
Forward 1 year - 1,148.7s.
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
