Forex Market Commentary
Adage: It's the economy stupid! Part 2
Another a stormer! Looks like the smart pack have all of a sudden stopped running and started to scratch their heads wondering why theyre running in the very first place!!! Is not the end of the world if China stutters and tumbles.
Rather daft if you ask me. Mean time trillions of dollars was wiped off the global equities markets and countless small traders lost their shirts in the process. Then some bright spark decides that it's not all there at all. What on earth are we running from? the Yuan devalued, everyone ran for cover and now back they come with a sheepish look and pile back into equities realsing how daft it all is and really after all: IT'S THE ECONOMY STUPID! Heads should roll, China tottered and half the traders round the planet panicked when reality read that the US economy and the mighty Greenback could still stand strong. A lot of small traders got wiped out on the wrong side in the process like deer dazzled in front of the oncoming lights of a train wreck.
The Dow climbs back up again with a massive +369.26 points or +2.27% on the day to close at 16654.77 and claw back a decent trillion Dollars in the process! Day before it was up a massive +619.07 points or +3.95%. Asian equities are sparing their blushes and modestly recorrecting themselves.
This without doubt has been the biggest test to the US economy since 2008 and the US came out very strong indeed traders please note.
Now the EUR/ USD having rose with astonishing speed to the 1.16, fell like a stone over 200 pips day before yesterday at the 1.13 mark and fell another 1.12 with another 100 pips today. it's almost like the perfect script for the smart short traders that waited and knew this storm would pass very soon and could enter shorts at 1.116. Fundamentals indicate that a retest of the 1.08 will be on the table in the weeks ahead. We have had the weaker shorts flushed out of the market with a period of sideways trading the last couple of months and now it looks as if the pause in the market is coming to an end. large specs are looking at another assault on the 1.08 to continue to the trade trend direction towards the 1.05 and eventual parity. USDX will take another look at the 98 in tandem and possibly test the 100 mark by the end of the year.
Crude Oil consolidating rises a whopping 3 Dollars to 43 mark on the front end WTI as fundamentals show oversold conditions and gold bullion consolidates at 1125.
Read on Bloomberg:
http://www.bloomberg.com/news/articles/2015-08-26/oil-advances-as-u-s-crude-inventories-unexpectedly-decrease
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
95.616 -0.149 -0.19%
Support 93.212 Resistance 96.202
Forward 1 year - 95.740s.
95.616 -0.149 -0.19%
Support 93.212 Resistance 96.202
Forward 1 year - 95.740s.
EUR/USD
1.12685 +0.00257 +0.23%
Support 1.11673 Resistance 1.13893
Forward 1 year - 1.14570s.
1.12685 +0.00257 +0.23%
Support 1.11673 Resistance 1.13893
Forward 1 year - 1.14570s.
Crude Oil WTI
43.01 +0.45 +1.16%
Support 41.03 Resistance 44.11
Forward 1 year - 46.68s.
Forward 1 year - 46.68s.
Gold
1130.945 +2.520 +0.22%
Forward 1 year - 1,165.5s.
Pieter Bergli - DeLoren Trust Holdings
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