2nd September 2015 Currency markets, news and analysis

Forex Market Commentary  

Volatility in the  global equities is a bad thing as it goes.

The Dow sinks -469.68 points down  -2.84% on Tuesday and today the Down surges +293.03 +1.82% on the day session to come in at 16351.38 . with labor day coming this monday on the 7th September the markets are very edgy about the slightest whiff of news with asia at the epicenter at the moment. recollecting the Greek woes, global equities and forex was never as nervous and volatile as the last 2 weeks in all.


Small traders tend to gravitate to swing trading and day trading sessions with the premise that they may thrive on the bounce of a news release. However with volatility comes risk and the high chance of a reversal. Traders that seek large returns in a day session often do not hedge themselves with options as the set up cost maybe expensive. Consequently they use trailing stops which can easily be overwhelemd during a sudden reversal. Large traders in the currency markets tend to have larger investment horizons and usually do hedge their positions with options. larger traders usually are able to ride the short term high volatility flash-points if only because there positions are not outright naked directional trades with trailling atops.

USDX hovering on the 95 and may find itself range bound 90-96 for the balance of this year. EUR/ USD has little reason to justify anything stronger than a technical bounce but equally the resilience of the Euro Zone, organization of the ECB and soundness of the Bund continues to attract investors to it's equities and fixed income products which creates the demand for EUR/ USD. Any slide back to the familiar 1.08 territory will be slow slippage for the rest of this year. Crude oil WTI front end at the 45 reinforces dealers opinions that the market is in fact oversold. Gold may find itself sliding from its current perch of 1130 given that most of the stresses in the global equities markets have played their hand and there really cant be much further shocks to come because we've gone through the worst of it now.

US Labor day is on Monday the 7th September and FX markets are now growing thin in volume as minds switch into holiday mode.

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
95.975     +0.001 0.00%
Support 95.008     Resistance 96.918
Forward 1 year - 96.878s.

EUR/USD
1.122065     -0.005250 -0.47%
Support   1.10643          Resistance 1.13723
Forward 1 year - 1.12810s.  

Crude Oil  WTI

45.88     -0.37 -0.84%

Support 40.18  Resistance  48.42
Forward 1 year - 51.56s.

Gold

1133.300     -5.650 -0.50%

Support  1,115.0     Resistance 1,149.2
Forward 1 year  -  1,139.2s.

Pieter Bergli - DeLoren Trust Holdings

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