Forex Market Commentary
The ability of the Euro currency to withstand a storm is remarkable. but that is largely due to investor confidence in the economies of Germany and France as the core engine of the Euro zone to maintain economic growth. whatever happens this week with the ECB and Greece there is going to be relentless downward pressure until a conclusion can be reached. Either Greece exits and we get over a dramatic shock as specs pile in and force the EUR down or Greece has to dig deeper into the zone of political hurt and agree more austerity and somehow come to terms with it's creditors; a very unlikely scenario.
Read on Bloomberg how European leaders for the moment are waiting for the new Greek proposal on debt mediation and so far why specs have not been taking significant shorts for now -
http://www.bloomberg.com/news/articles/2015-07-07/greece-to-make-official-aid-request-escape-creditor-collision
Should markets begin to move the first domino in a sequence of events will be the Euro. Traders would aim for shorts towards the 1.08, 1.05 and then parity with call options for cover. The USDX at 96 would require a long future and put option with stop loss. Crude Oil is a tougher play and more likely to rebound first and so when prices fall under 50 buying on dips can become an opportunity. Gold will find little reason to climb unless a full Grexit occurs and then we could be long up to 1200 mark again.
The Fed will come under increasing pressure not to increase beyond 25 basis points if the Greeks leave the Euro currency to adopt a parallel 'iou' system in Drachma to honor some portion of its debts. US corporates are not going to enjoy the appreciation of the Dollar and in a political year of elections there will be alot of calls from wall street to protect the US equities markets should the European equities markets crash for 2-3 months. The ECB will be forced into a bigger bond buy back program to provide cheap money into the system to restore confidence win Europe and that would put the Euro currency under severe downward pressure. it would also shave off potentially 3-5 Dollars off the crude oil market which was once stabilizing nicely at the 60's mark but with the Grexit and fear of contagion to Chinese equities, crude can be knocked right back down to a new comfort zone of 50-55 US dollars.
Of far more serious concern to the US and global bond and equity markets is th situation developing in China
Please follow on Bloomberg the discourse on the fears of global contagion should China equities becomes a Bear market -
http://www.bloomberg.com/news/articles/2015-07-08/china-s-market-rescue-makes-matters-worse-as-prices-lose-meaning
and
http://www.bloomberg.com/news/videos/2015-07-08/over-1-300-companies-halt-trading-in-china
A Chinese rout will seriously affect the global economy.
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.
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
96.645 -0.122 -0.16%
96.645 -0.122 -0.16%
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
1.10125 +0.00357 +0.33%
1.10125 +0.00357 +0.33%
Support 1.08430 Resistance 1.15030
Forward 1 year - 1.13770. Low growth positive line
Crude Oil
52.00 -0.33 -0.63%
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
1167.660 -1.350 -0.12%
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
