15th September 2015 Currency markets, news and analysis

Forex Market Commentary  

Will they; wont they?

US retail sales came in strong for August following July strong data suggesting that US consumers could shrug off all this bad news about China. Prior to the FOMC decision tomorrow US retail sales climbed 0.2 percent overall for the month of August according to the US Commerce Department. As a result the Dow climbed +228.89 +1.40% to close at 16599.85 following a robust Asian session which saw the Nikkei 225 regaining confidence earlier in the day. Whilst large currency specs seem to be holding off most of the action now seems to be boiling in Treasuries as investors pushed bond yields up to near 4 year highs in anticipation of a rate hike of 25 basis points.

Equities have been in a real up and down battle since the China crisis unfolded and investors have struggled to fathom the longer term impact on the US economy. The Chicago Board Options Exchange Volatility Index was established in 1990 to measure market volatility under an index known as VIX.  since 1990 the average level is 16.9. Today the measure is at 22.54 indicating extreme equities market turbulence. This follows from the first ever 10 per cent correction in the Dow since 2011.

Thus for today we resume another holding pattern waiting for a breakout come Thursday US session. In truth nobody quiet knows what the Fed may do with arguments for  and against a rate hike equally weighed. Small traders wishing to capitalize on momentum swings can rapidly drown on whipsaw so great care is needed to identify the eventual trend on the USD in the days ahead.

Read on Reuters this morning:

http://www.reuters.com/article/2015/09/16/markets-japan-stocks-idUSL4N11M1FC20150916 

and on Bloomberg:

http://www.bloomberg.com/news/articles/2015-09-16/goldman-warns-markets-unprepared-for-fed-as-treasuries-seesaw 

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
95.419     -0.174 -0.22%  
Support 94.768     Resistance 95.888
Forward 1 year - 95.824s.

EUR/USD
1.12840     -0.00250 -0.22%
Support   1.12173          Resistance 1.14093
Forward 1 year - 1.14350s.  

Crude Oil  WTI

45.25     +0.25 +0.56%

Support 43.17  Resistance  46.61
Forward 1 year - 50.28s.

Gold

1104.645     -3.525 -0.32%

Support  1,090.2    Resistance 1,118.6
Forward 1 year  -  1,107.9s.

Pieter Bergli - DeLoren Trust Holdings

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