3rd August 2015 Currency markets, news and analysis

Forex Market Commentary  

In the US, the Institute for Supply Management's index of national factory activity slipped to 52.7 in July 15, falling much below expectations that it would come near last month's reading of 53.5. Add to this China poor manufacturing data and trader's cannot read much into a hawkish interest rate activity amidst increasing signs of slowing economic activity both in USA and China. On the back of this poor data crude oil had a rough day. Crude oil total output by the Organization of the Petroleum Exporting Countries (OPEC) reached the highest monthly level in recent history in July 2015 adding to the pressure on crude oil. Furthermore this total production figure could still rise even further if Iran goes ahead with it's plan to raise output by 500,000 barrels per day as soon as the  sanctions are lifted. 

See on Bloomberg - 

http://www.bloomberg.com/news/videos/2015-08-04/brent-falls-below-50-for-first-time-since-january 

China is growing at it's slowest annual pace. 7% per annum, in the last 25 years.  it remains to be seen what policy makers will decide to stimulate the increasingly morbid Chinese economy. With over 3.5 trillion Dollars in currency reserves and low levels of government debt China has alot of room to attempt inject some growth into it's slowing economy.

On the back of negative economic outlook in USA the Dow slipped 9 points to  17598.20 whilst the SSE Composite Index consolidated 48 points up at 3,671.49 and Euro STOXX50 came in at 30 points up to close at 3628.00.

Read on Bloomberg - 

http://www.bloomberg.com/news/articles/2015-08-03/u-s-stock-index-futures-decline-after-equities-post-july-rally 

Given that the Greek equities market had to withstand a furious assault the Euro currency resilience remains very strong. Greece's stock market suffered heavy losses on Monday after reopening from a five-week shutdown. Greek equities fell some 23 percent at the market open before eventually recovering slightly as most investors ran for the exit.

Whilst the EUR/ USD has stabilized at the 1.09 mark in the longer term traders now see problems ahead for the US Dollar as the last 2 attempts to pierce the 100 mark on the USDX have been botched and this can now be seen as a signal that the period of Dollar appreciation has already seen its peak with further growth likely to be slowing down considerably.

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
97.541     +0.088 +0.11%  
Support 95.830 Resistance 98.530
Forward 1 year - 98.344s.

EUR
1.093850     -0.003395 -0.31%
Support   1.08123      Resistance 1.12003
Forward 1 year - 1.10760s.  

Crude Oil  

45.54     +0.37 +0.79%

Support 44.56   Resistance  48.40
Forward 1 year - 53.50s.

Gold

1082.25     -11.10 -1.02%

Support  1,068.7     Resistance 1,115.5
Forward 1 year  -  1,101.4s.

Pieter Bergli - DeLoren Trust Holdings

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