20th August 2015 Currency markets, news and analysis

Forex Market Commentary  

Massive drop in equities today; there's blood on the Street and for the USA this is going to hurt as a global sell off threatens to dampen prospects for US growth. Following yesterday's negative reaction to the release of the data of the July minutes of the FOMC and given the serious loss in confidence in the Chinese markets trader's expectations of earnings of US corporates are being considerably tested.  Today the SSE Composite in Shanghai too a massive nose dive as global investors screamed for the exit. closing at 3,664.9 and now trading at the 3500 mark as we speak the SSE Composite is doing all that it can to stay afloat above the serious water mark of 3500. Anything under that would be considered as a shock to the system and total loss of confidence. The 52 week trading range on the SSE is 5,166.25 - 2,195.82. The Nikkei 225 in Japan took the brunt on today's session roiling at 20,032 and now as we speak 500 points down on the early session as traders panic for an exit with the Nikkei now under the 20,000 mark; 52 week trading range being 20,952.70 - 14,529.  the Hang Seng as we speak is 500 points down, Euro STOXX50 dived a large 115.00 points to close at 3,318.00 with more blood bath to come today after this morning early session murder in Asian equities and the Dow? -358.04 or -2.06% to close at 16990.69 for Thursday' session. friday will expect more murder in equities as investors head for a clear out prior to the weekend.

So what's going on? Global contagion and the cause is China. The devaluation of the currency is basically like throwing a baked bean at a charging rhinoceros. It's not going to sort out the problem and I stated this analysis for some time now. The heart of the equities problem is trader's perceptions of the state of Chinese corporations: slow earnings, rising credit problems and at the very very core heart: a Chinese consumer all but evaporating into thin air.

The USDX slipped to 95, EUR/USD gained to 1.12 as short covering bounced the Euro currency up, crude oil stands miraculously at the 40 dollar for now and gold edged up with investors looking for safety.

Read on Bloomberg today choice reports

http://www.bloomberg.com/news/articles/2015-08-21/china-s-stock-index-futures-decline-before-manufacturing-report 

and Reuters:

http://www.reuters.com/article/2015/08/21/us-markets-oil-idUSKCN0QQ02X20150821 




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
95.448    -0.321 -0.41%
Support 94.839 Resistance 96.015
Forward 1 year - 97.273s.

EUR/USD
1.128000     +0.003165 +0.28%
Support   1.10487      Resistance 1.13307
Forward 1 year - 1.14160s.  

Crude Oil  WTI

40.90     -0.42 -1.03%

Support 40.66  Resistance  43.88
Forward 1 year - 51.17s.

Gold

1163.660     +4.925 +0.43%

Support  1,105.3     Resistance 1,123.5
Forward 1 year  -  1,119.1s.

Pieter Bergli - DeLoren Trust Holdings

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