Forex Market Commentary
Lesson: if there is one single lesson I have learned though my entire trading career it is very simple: The trend is your friend.
Markets move up, markets move down and markets move sideways. In all 3 markets the channels of price action will experience low volatility and high volatility which will mark the boundaries of the 3 channels.
In times of rapid price movement, prices often stretch far away from fundamentals. Moreover technical assumptions derived form technical charts are merely reflections of previous data and only semi-useful as a reference point in trying to assess the present area of price action.
Global equities are still crashing since China declared a currency war with the devaluation of the Yuan. However, the devaluation of the Yuan has now become counter-productive in China as the Chinese begin to realize that economies today are so inter-linked that capital inflows via devaluation can be out balanced by increases in capital outflows as investors run away.
The EUR/USD meantime has run out of steam because reality is beginning to sink back in and fundamentals come back to the fore. European equities were well sought after during the China crisis sparked by the Yuan devaluation but in the long term we are only going through a pause and profit taking on the USD before the long march of appreciation starts all over again. Interest rate fundamentals support this perspective.
So here's a quick snapshot of where we are at in Global equities:
SSE Composite:
Close: 2,964.97 Down
Day's Range: 2,850.71 - 3,001.86
52wk Range: 2,195.82 - 5,166.35
Nikkei 225:
Close: 17,806.70 Down
Day's Range: 17,714.30 - 18,075.12
52wk Range: 14,529.00 - 20,952.70
Euro STOXX50:
Close: 3,218.01 Up
Day's Range: 3,105.48 - 3,237.52
52wk Range: 2,874.65 - 3,828.78
Dow Jones Industrial Average:
Close: 15,871.35 Down
Day's Range: 15,651.24 - 16,312.94
52wk Range: 15,370.30 - 18,351.40
Crude Oil consolidating at 39 on the front end WTI as fundamentals show oversold conditions and gold bullion slipping to 1138 as most of the panic dies away.
Read on Bloomberg today:
http://www.bloomberg.com/news/articles/2015-08-25/zhou-serving-as-circuit-breaker-under-pressure-to-ease-more
and
http://www.bloomberg.com/news/articles/2015-08-25/china-s-yuan-shock-gives-carry-trade-crowd-worst-year-since-08
In speaking of moving averages; markets are not rational and daily price action volatile, but in the longer run trader expectation and negative sentiment can be collectively summed up through the 50 day moving average. 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
93.964 +0.007 +0.01%
Support 92.212 Resistance 94.202
Forward 1 year - 95.740s.
93.964 +0.007 +0.01%
Support 92.212 Resistance 94.202
Forward 1 year - 95.740s.
EUR/USD
1.1530 0.0000 0.00%
Support 1.13673 Resistance 1.16893
Forward 1 year - 1.14570s.
1.1530 0.0000 0.00%
Support 1.13673 Resistance 1.16893
Forward 1 year - 1.14570s.
Crude Oil WTI
39.38 +0.07 +0.18%
Support 37.03 Resistance 41.11
Forward 1 year - 46.68s.
Forward 1 year - 46.68s.
Gold
1138.215 -0.360 -0.03%
Forward 1 year - 1,165.5s.
Pieter Bergli - DeLoren Trust Holdings
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