Forex Market Commentary
All eyes are on the Greek referendum on Sunday. A “no” will provide the Tsipras’ government with the backing of the people to negotiate a better package with its creditors but a “yes” will force the Greek Prime Minister to resign and more chaos will ensue. The Euro currency beleaguered that it is, only withstood trading action either way because traders want to wait and see what the referendum will bring. So EUR/ USD stands well at 1.11 mark for the moment. With the USD this week saw non-farm payrolls coming in at lower than expectations at 223K. US unemployment rate came in at 5.3% vs 5.5% a month earlier. USDX stands poised at the 96 mark but lacks the per se data conviction to take the USD through the 100 mark per se. Since 25 basis points has already been factored into US credit markets any official rate hike will effectively become a 'non-event' because the market already has counted this into prices as a reality. Beyond this the Fed will really need to see several months of very strong data and threats to their benchmark targets of labor market 5% unemployment rate and core inflation at the 2% mark. Given weakness in the Euro zone and the worries of Chinese markets toppling over it is hard to see anything vouching for further rate increments at the moment. Moreover given the drop in NFP the Fed clearly sees there is no immediate concern for inflationary pressure. Therefore talk of a EUR/USD parity are not a realistic assumption for this year given that the ECB is already undertaking a successful Euro debt repurchase program and the powerhouse engine German economy manufacturing is doing well pointing to economic strengths which warrant further rate increments over the horizon and rate increments in the Euro zone will lead to the narrowing of the spread of the 10 year US Treasury vs the German Bund. A more realistic scenario for EUR/ USD is a sideways trading channel between 1.07 and 1.12 mark for the rest of the year. Astute traders will be aware of the dips and tops and manage to trade this anticipated 500 pip trading range. Crude oil has slipped to the 55 dollar mark erasing all the gains over the last weeks due to concerns that the US economy is slowing and that demand for crude oil may not be as high in the US as anticipated. Concerns about a slow down in China are also hampering the outlook for crude oil at the moment. Chinese stocks have suffered their worst drops since 2008 and according to HSBC analysts investors should not be looking to buy any dips as we maybe very close to the commencement of a Bear market in Chinese equities. For this reason IMF head has spoken publicly of the US fed not raising interest rates because cheap money affects Europe and China and the last thing US global corporates want to see is a slow down in China. This is now raising crude oil traders fears over demand for crude oil to China. However we do not see crude oil slipping back down to the mid 40's as the logistics are not there to support the lower price. Gold will continue to trade the 1150 to 1200 mark for the rest of the year given an easing over sentiments of US inflation. However seasonal demand could see the bullion price testing the 1200 mark at the end of the year.
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
96.037 -0.031 -0.04%
96.037 -0.031 -0.04%
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
1.1115 0.0000 0.00%
1.1115 0.0000 0.00%
Support 1.08430 Resistance 1.15030
Forward 1 year - 1.13770. Low growth positive line
Crude Oil
55.50 -1.43 -2.58%
Support 57.32 Resistance 59.78
Forward 1 year - 61.31. Low growth positive line.
Forward 1 year - 61.31. Low growth positive line.
Gold
1168.78 +1.63 +0.14%
Support 1,165.5 Resistance 1,194.3
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
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
