Global FX Economy 30th Sept 2015, Dow upbeat. Currency markets, news and analysis.

Forex Market Commentary  

Dow end positive.

The Dow ends up some +235.57 or +1.47% to close in positive territory at 16284.70.  Officially Q3 comes to an end today and it has without doubt been the worst performing quarter for the Dow over the last 4 years.   A general cheer all round: the US private employers added some 200,000 jobs in September which is a really strong showing and a jolt in the face of the recent China equities crisis. America is hiring and Q3 is always the most important indicator of where the economy is headed. with the Fed's conditions of inflation targets not met, equities have a joyful day as bargain hunters seek to take positions in a battered US equities market.

USD was strong bid in the wave of strong equities trading and the EUR/ USD pair skewed in favor of the USD with the Euro slipping to the 1.11 and looking more likely to re test the 1.08 should US Q4 data show more encouraging signs of inflationary pressure building up in the domestic economy. Crude oil gets some cheer when the Dow reflects strength and rises to 45 whilst bullion loses its shine slipping further from the 1150 mark and looking likely to re test the 1100 support.

Like it or not US corporates can only adjust to a strong US Dollar advance that looks very likely now for 2016 given the strong resilience of the US economy in one of the worst storms seen since 2008 with a year that first brought us the Grexit drama and then the China crisis. But the big question remains; how far can the US economy go on with a strengthening Dollar next year?



Read on Bloomberg the wave of optimism returning to US equities:

http://www.bloomberg.com/news/articles/2015-09-30/u-s-futures-rally-as-s-p-500-nears-its-worst-quarter-since-2011

and on the IMF outlook for slower growth ahead for 2016:

http://www.bloomberg.com/news/articles/2015-09-30/lagarde-says-fed-hike-slowing-china-to-challenge-world-economy 

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
96.263     -0.019 -0.02%    
Support 94.569     Resistance 96.849
Forward 1 year - 95.534s.

EUR/USD
1.117150     -0.008050 -0.72%
Support   1.10853          Resistance 1.14673
Forward 1 year - 1.14840s.  

Crude Oil  WTI

45.33     +0.24 +0.53%

Support 42.53  Resistance  48.11
Forward 1 year - 50.46s.

Gold

1115.480     -8.305 -0.74%

Support  1,131.1    Resistance 1,150.1
Forward 1 year  -  1,138.1s.

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.



* European Union laws require European Union visitors to this blog to know that cookies are used by Blogger and Google, including use of Google Analytics and AdSense cookies and in reading material from this blog do consent to the use of such cookies

Global FX Economy 29th Sept 2015, consolidation market day. Currency markets, news and analysis.

Forex Market Commentary  

Consolidation theme of the day; lack of direction.

The general consensus with US equities is that we are entering into a bear market and that corporate earnings will hit the floor the moment the Fed dares to raise rates and allow the USD to float up further viz a viz the major basket of currencies to hurt US corporate earnings abroad. That being the general extreme viewpoint of nervous Fortune 500 CEO's. However analysts are divided with some suggesting buy at the dips and others suggesting to sell into  the rallies. Overall there is a lack of direction due to the wait and see strategy of the US Fed. Credit markets are trading near 30 basis points on the front end Treasuries but the Fed is unwilling to acknowledge an official hike. Altogether the reluctance of the Fed  to raise rates now rather than later is costing US equities markets a gruesome slide. Most analysts feel better get it over and done with than to continue to allow volatility to jump up and down on a daily basis.


Read on Bloomberg the anxiety of investors as the Fed continues to wait:

http://www.bloomberg.com/news/articles/2015-09-29/pimco-sees-fed-phantom-rate-hike-at-root-of-market-volatility

and on Reuters read about the amazing fall of the house that Marc Rich built:

http://www.reuters.com/article/2015/09/30/us-glencore-trading-idUSKCN0RT21A20150930 

Once again to reiterate our viewpoint:

With the EUR/ USD strong resistance lies ahead at the 1.14 and support at the 1.10 with a bias to the upside with more short covering on open short positions due to the current Dollar woes off the back of a global slow down. Further resistance and support lies at the key 1.17 and 1.05 for major technical breakouts..


USDX has a bias for lower to the 93 mark failing to consolidate at 96 for another upward challenge on the 98.

Crude Oil should come under serious tests this week to stay above the 40 Dollar mark given the crisis in the commodities sector and needs see more encouraging news from China.

Gold Bullion needs to see a test of the 1120 to confirm a bearish bias whilst USD has run out of momentum as with commodities gold should come under selling pressure and needs stay above 1150 to confirm an upward bias.

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
96.015     +0.120 +0.15%   
Support 94.569     Resistance 96.849
Forward 1 year - 95.534s.

EUR/USD
1.124510     -0.000690 -0.06%
Support   1.10853          Resistance 1.14673
Forward 1 year - 1.14840s.  

Crude Oil  WTI

44.94     -0.29 -0.65%

Support 42.53  Resistance  48.11
Forward 1 year - 50.46s.

Gold

1126.450     +2.665 +0.24%

Support  1,131.1    Resistance 1,150.1
Forward 1 year  -  1,138.1s.

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.



* European Union laws require European Union visitors to this blog to know that cookies are used by Blogger and Google, including use of Google Analytics and AdSense cookies and in reading material from this blog do consent to the use of such cookies

Global FX Economy 28th Sept 2015, bullion firm holds. Currency markets, news and analysis.

Forex Market Commentary  

The Dow swoons again on the hint of a rate hike.

Down to close at  16,001.89 with -312.78 or -1.92% points shaved off on the session the Dow is in serious trouble of another rapid descent to the 15,000 mark. The cause? More jitters over interest rates; which leaves the trading community perplexed when Wall Street CEO's are ever going to come to terms with the fact that interest rates must rise sooner or later. Much deeper than Wall street's continued anxiety over interest rates is the the problem of slowing economic growth on a global scale. China is leading the way with drops in demand for commodities like crude oil, iron and nickel which is translating into lower revenue forecasts for commodity related corporations and hence a drop in share price, which then feeds off into lower US Dollar prices and lower bullion prices with fears of inflation almost vanished.

Read on Bloomberg the vast problems of the commodity traders:

http://www.bloomberg.com/news/articles/2015-09-28/with-glencore-commodity-rout-beginning-to-look-like-a-crisis


With the EUR/ USD strong resistance lies ahead at the 1.14 and support at the 1.10 with a bias to the upside with more short covering on open short positions due to the current Dollar woes off the back of a global slow down. Further resistance and support lies at the key 1.17 and 1.05 for major technical breakouts..


USDX has a bias for lower to the 93 mark failing to consolidate at 96 for another upward challenge on the 98.

Crude Oil should come under serious tests this week to stay above the 40 Dollar mark given the crisis in the commodities sector and needs see more encouraging news from China.

Gold Bullion needs to see a test of the 1120 to confirm a bearish bias whilst USD has run out of momentum as with commodities gold should come under selling pressure and needs stay above 1150 to confirm an upward bias.

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
95.894     -0.117 -0.15%   
Support 94.569     Resistance 96.849
Forward 1 year - 95.534s.

EUR/USD
1.124350     +0.005550 +0.50%
Support   1.10853          Resistance 1.14673
Forward 1 year - 1.14840s.  

Crude Oil  WTI

44.43     0.00 0.00%

Support 42.53  Resistance  48.11
Forward 1 year - 50.46s.

Gold

1132.550     -12.850 -1.12%

Support  1,131.1    Resistance 1,150.1
Forward 1 year  -  1,138.1s.

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.



* European Union laws require European Union visitors to this blog to know that cookies are used by Blogger and Google, including use of Google Analytics and AdSense cookies and in reading material from this blog do consent to the use of such cookies

Forex Charts 26th September 2015 Currency markets, news and analysis

Forex interactive charts

Powered by ForexGoer

Forex charts for technical analysis


Pieter Bergli - DeLoren Trust Holdings

A non-profit service for free education on in the forex markets


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.



* European Union laws require European Union visitors to this blog to know that cookies are used by Blogger and Google, including use of Google Analytics and AdSense cookies and in reading material from this blog do consent to the use of such cookies

Global FX Economy 25th Sept 2015, bullion firms as Fed under fire. Currency markets, news and analysis.

Forex Market Commentary  

The Dow finishes the week on a high note.

Up to close at  16,314.67 with +113.35 points on the session or +0.70%. Hardly surprising since Fed Chair Yellen  will not be moved even in the face of mounting criticism. Fortune 500 companies have their cheap credit and consequently the Dow can breathe once again  as the status quo remains unchanged. Where are we going? On the back of such uncharacteristic uncertainty traders have been buying gold futures s a hedge.

USDX is trading  at the 50 day moving average at 96.2 where it has been sitting the last 4 weeks. Signs are that it cannot break above the 50 day m.a. for the moment. A slide back to the 93 mark is expected.

EUR/ USD is also sitting on the 50 day moving average at 1.15. The strong upside move since 3rd week April appears to be drawing to a close with a test of the 1.08 at play once again.

WTi crude oil is below the 50 day moving average at 46 and has been in such down trend since 3rd week June but consolidating within the 45 range. Topside targets at 50 remain out of reach; more likely 43-48 range bound trades for the remainder this year.

Gold is above the 50 day moving average this week by virtue of late speculative interest. Gold may test 1200 later this year.

Important moving averages: USDX  at the 50 day m.at 96.2.
EUR/ USD at 50 day m.a at 1.15
Crude Oil WTI below 50 day m.a. at 46
Gold above 50 day m.a. at 1130
US - 30 DAY FED FUND at 50 day m.a. at 99.83
US - 10 YEAR T-NOTES above 50 day m.a at 127

Equities:

On the back of Fed Chair Yellen's statements global equities have a fairly good day Friday realizing that  cheap money is available for the markets.

Asia:
Nikkei 225   17,880.51 + 308.68(1.76%)
SSE Composite 3,092.35 - 50.34 (1.60%)
Hang Seng 21,186.32    + 90.34 (0.43%)

Europe:

DAX 9,688.53 +  260.89(2.77%)
CAC 40 4,480.66 + 133.42(3.07%)

USA:
Dow 16,314.67  +113.35 (+0.70%)    

Fixed Income Markets: US Federal Reserve -  +0.25%   
ECB Base rate 0.050 %
Chinese interest rate PBC     China     4.60 %
Japanese interest rate (BoJ)    0.10 %

 

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
96.227     -0.077 -0.10%   
Support 94.569     Resistance 96.849
Forward 1 year - 95.534s.

EUR/USD
1.11975     +0.00174 +0.16%
Support   1.10853          Resistance 1.14673
Forward 1 year - 1.14840s.  

Crude Oil  WTI

45.37     +0.46 +1.02%

Support 42.53  Resistance  48.11
Forward 1 year - 50.46s.

Gold

1146.340     -4.660 -0.40%

Support  1,131.1    Resistance 1,150.1
Forward 1 year  -  1,138.1s.

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.



* European Union laws require European Union visitors to this blog to know that cookies are used by Blogger and Google, including use of Google Analytics and AdSense cookies and in reading material from this blog do consent to the use of such cookies

Global FX Economy 24th Sept 2015, Fed uncertainy leaves bullion bid. Currency markets, news and analysis.

Forex Market Commentary  

Bullion is bid when USD lacks direction.

Nothing can be worse than a ship lacking a helmsman. Today whilst equities became a mundane affair and USD a sluggish activity the world's investment community suddenly poured into bullion in protest at the overall lack of direction with the US economy. Yesterday, Bill Gross, founder of the largest bond fund in the world: PIMCO, became just another more voice in a string of high-profile figures to voice discontent on the growing distortion in the US credit markets where the market bid/ ask median point is way off the Fed's own interpretation of credit risk. In a  free market economy where currencies, being the largest vehicle of daily trade, have their values set by bank dealers, minute by minute, with a fluctuating bid/ask range, the sum of all bank bid/ask offers gives the investor and idea where a currency can stand. Add to this the dealers in Treasuries setting the daily price of 30 day Fed Funds through a bid/ ask market of voices an overall we have an idea where the price of money is and where the value of its currency lies. But when one leg of the free market structure becomes held down by a straight-jacket then what of the other leg? USDX priced at the 96 mark on the front end futures reflects the sum total of bid/ask on the short end of the yield curve in the credit markets at 25 basis points. Take this away through an official line of zero rate and then come to terms with the reason why the USDX cannot march beyond the 98 to the 100 mark. 

Credit markets and derivative currency markets are rational on the basis of the mathematics of averages of market dealer participants. Interfere with the math and we end up with a disequlibria that convinces traders; enough is enough of this funny money; let's get into something more real like gold!

Gold has gained 9% in value this month September as a result of large specs losing faith in the US credit system to close at 1147. USDX at the 96 unchanged and Euro hasn't really got a leg to stand on though still sits at the 1.11 as a result of Dollar woes. Crude oil unmoved at the 45.

Two important reports appear on Bloomberg today:

Firstly: 

http://www.bloomberg.com/news/articles/2015-09-24/u-s-index-futures-drop-before-data-with-s-p-500-near-3-week-low

and secondly watch:

http://www.bloomberg.com/news/videos/2015-09-25/has-yellen-s-speech-comforted-the-markets-

and today's Asian session reaction to Yellen statements reported by Reuters:

http://www.reuters.com/article/2015/09/25/us-markets-precious-idUSKCN0RP03F20150925 

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
96.271     -0.033 -0.04%   
Support 93.569     Resistance 96.249
Forward 1 year - 95.534s.

EUR/USD
1.11735     -0.00066 -0.06%
Support   1.11853          Resistance 1.15673
Forward 1 year - 1.14840s.  

Crude Oil  WTI

45.08     +0.17 +0.38%

Support 42.53  Resistance  48.11
Forward 1 year - 50.46s.

Gold

1147.170     -3.830 -0.33%

Support  1,121.1    Resistance 1,150.1
Forward 1 year  -  1,138.1s.

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.



* European Union laws require European Union visitors to this blog to know that cookies are used by Blogger and Google, including use of Google Analytics and AdSense cookies and in reading material from this blog do consent to the use of such cookies

Global FX Economy 23rd Sept 2015, Gross tells Feds lift-off. Currency markets, news and analysis.

Forex Market Commentary  

Enough is enough; clamor growing against US Fed.

Bill gross founder of the largest bond fund in the world: PIMCO, becomes the latest high-profile figure to speak over this growing distortion in the US credit markets and his frustration in the entire policy of interference with the free market economy in pricing credit risk.

Asian markets started the day with tension but eased off as equities appear to be consolidating from Shanghai to Tokyo to bring back some stability to the Asian region and Emerging Markets equities, currencies and fixed income products as a whole. As a result all eyes are on Europe to take the lead and generate some consistent economic growth to reflect the overall strength and resilience of the US economy. The Dow closed yesterday at 16,279.89   at  -50.58, -0.31%.

Two important articles appear on Bloomberg today:

Firstly: 

http://www.bloomberg.com/news/articles/2015-09-23/gross-tells-fed-to-get-off-zero-now-as-economies-run-on-empty

and secondly:

http://www.bloomberg.com/news/articles/2015-09-24/china-s-218-billion-of-vanishing-debt-shows-rout-ending-to-hsbc

With the statements of former PIMCO founder Bill Gross, there is a huge concern amongst traders that the US Fed is not listening to the natural market process of equilibrium to identify the natural price for money as bid hits offer. This is very disconcerting given that the Fed is seen to be assisting "liability-based business models to survive" and generally speaking doing everything counter-productive for the capital markets to support the long term growth of healthy business models in the US economy.

Asian regional giant HSBC sees the flight of capital risks in China and the region to be of less importance now. The worst is over and excesses in the system needed corrective adjustment. Hopefully liquidity should restore itself when investors see the economic dead wood in China cast aside and recent PBOC activity expanding liquidity to promote stability and growth. However, China's rapid rise has led to wage increases and the loss of competitive edge and the World Bank sees the way ahead for China is to encourage the growth of domestic markets to raise real per capita income for the Chinese consumer.

Over to the USDX, against the backdrop of interest rate fundamentals the USDX holds at the 96 mark and the EUR/ USD has failed to penetrate the staunch 1.15 barrier and risks another slide to the 1.08 region until the next FOMC. The EUR/ USD was heavily over-sold but in the last few weeks much of the weaker shorts have been pushed out of the market. The recent rise of the EUR/ USD was much to do with short covering bounce and roll over of futures contracts rather than any per se indicatoor of exciting news of regional economic growth. crude oil WTI holds at the 44 seeing the worst off as the equities shakedown fades and gold bullion at the 1130.

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
96.144     -0.053 -0.07%    
Support 93.569     Resistance 96.249
Forward 1 year - 95.534s.

EUR/USD
1.119295     +0.002915 +0.26%
Support   1.11853          Resistance 1.15673
Forward 1 year - 1.14840s.  

Crude Oil  WTI

44.87     +0.39 +0.84%

Support 42.53  Resistance  48.11
Forward 1 year - 50.46s.

Gold

1134.940     +2.150 +0.19%

Support  1,121.1    Resistance 1,150.1
Forward 1 year  -  1,138.1s.

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.



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Floored US Interest Rate Policy

Forex Market Studies 

So the Fed cannot raise US rates; what next?

Former Pimco Head Mohamed A. El-Erian just about sums up these last 7 years of Neo-Keynesian interest-rate meddling: "The first is that a decision to raise rates at the conclusion of the Open Market Committee meeting Thursday would be the first such increase in almost 10 years. That would signal the beginning of the journey out of a prolonged period of floored policy rates that has lasted much longer than anticipated by almost everyone, including Fed officials (past and present)". For the full article please read here as follows:

http://www.bloombergview.com/articles/2015-09-16/cutting-through-the-rate-hike-hype

Central banks exist to police the banking market and to protect the value of a nations currency during the course of steering the nation along the path of economic growth with minimal  inflationary pressure. Post 2008 the US Fed engaged in a two-fold plan to save the US economy: 1. quantitative easing through money market operations to purchase back US Treasuries to place more liquidity into the the money markets and 2. lowering the official interest rates benchmark in succession to assist the credit markets in helping Wall street and Main street find a path back towards economic growth. Under normal circumstances within the framework of the 5-7 year economic cycles from peak to trough, as experienced since the birth of the modern global economic order post WWII, The US economy should have engineered a successful impetus to spur on a stuttering economy into a low-inflationary period of growth. However, the sheer scale of the credit bubble that grew from 2000 - 2007, with the US banking sector and financial services industry largely to blame, brought in the hand of the Federal government with the arrival of the new Obama administration to force intervention in the entire system of risk-allocation and valuation of capital; which should always remain within the domain of the free market enterprise.

Classical Laissez faire economics as championed by the Reagan administration in the 1980's called for the minimum government involvement in the US economy. But where under the Bush administration Bear Stearns and Lehman Brothers were allowed to capitulate to allow for the efficiency of free markets to re-allocate capital with unhindered risk investor assessment; the new administration recognized that it could not stand by to watch the troubles of the insurance and auto industries in 2008. Certain companies were deemed to large to collapse and therefore government intervention was warranted. This action placed additional constraints upon the Federal budget true enough; but worse; it resulted in the distortion of interest rate policy for which today the US economy stands in complete disequilibrium from economic reality. Today, markets have become so disjointed as a result of Big Government intervention in the US economy and the intervention in the entire system of risk allocation in the US equities and fixed income markets. 

Referring back to the article of Former Pimco Head Mohamed A. El-Erian writes "And the prospect of an increase certainly shouldn't produce dire warnings about another "Lehman moment" that would lead to global economic and financial calamity". The trouble is that the Fed has lost much of it's independent clout to serve the political will of government and in therefore serving, listens with keen interest to the acute calls of distress when Fortune 500 CEO's clamor about the cost of credit. The loss of the modern American version of 'Laissez faire', which behooves good governments to refrain from intervention in business affairs, is the reason why today the US Fed cannot move beyond zero percent interest rates even after 7 years of defending businesses too large to fail. One would have considered that the sharp, brief pain of loss eased over by flight of capital to good investments, would have been a better standard of measure that the government trying to assert a positive market value for failed business assets.

For an understanding of interest rate theory please download for free the following book at Bookboon: 



http://bookboon.com/en/interest-rates-an-introduction-ebook

 

The book will amply restore the readers guidance in understanding how markets should price risk through interest rates and how the central bank should work with markets hand in hand rather than to stand aloof and officiate in such a disjuncture that today US credit market traders say one thing and the Fed says another. 

Yours sincerely

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.



* European Union laws require European Union visitors to this blog to know that cookies are used by Blogger and Google, including use of Google Analytics and AdSense cookies and in reading material from this blog do consent to the use of such cookies