Forex Market Commentary
Markets close and US Labor Day on Monday.
The Dow sinks -272.38 points down to close the week at 16102.38. Nikkei down at 17,792.16 and SSE Composite down at 3,160.17 in what has been a torrid time for global equities. Why we want to look at the global equities numbers first? Because these numbers give us a viewpoint of corporate earnings and corporate cash-flows make up the bulk of cross-border currency movements. That being said and done, in spite of one of the worst global equities scares since 2008, the USDX stands firm at the 96 as a testimony of the resilience of the US economy. EUR/ USD fundamentally is not there at the 1.11 mark and owes it's current lofty position from the global equities turmoil and fund buying of European equities and bonds as safe haven investments. The traditional safe havens are gold and the US Treasury; however, during this crisis gold only shot up a mere 30 points and is fast receding into insignificance to resume its downward trend. Crude oil forwards are over-sold given inventory space; however the Iran factor still weighs heavy to keep crude oil at the 50 mark range and come in at under the cost of production for most nations inclusive of USA, Russia, Latin America and most African producers; which again weighs heavily on global giants like BP, Shell, Exxon and Chevron etc and their earnings forecasts.
Within a macro-economic sense the 4 main pillars of this study are - The USD, by virtue of being the 'international' currency of global choice, the 'Euro' being
the second most trade-able currency, crude oil as a barometer of economic activity and gold as an economic store of value. These 4 pillars find interpretation though the daily price action in global equities and fixed income where investors anticipate corporate earnings and forward levels of interest rate to give us a broad sweep and understanding of the markets and how they work as a whole. At a micro-economic level the study of consumer behavior and real purchasing power becomes the central focal point upon which all macro-economic activity can be viewed as the sum.
Important Indicators:
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 %
Important moving averages:
ECB Base rate 0.050 %
Chinese interest rate PBC China 4.60 %
Japanese interest rate (BoJ) 0.10 %
Important moving averages:
USDX below the 50 day m.at 96.5.
EUR/ USD above 50 day m.a at 1.11
Crude Oil WTI at 50 day m.a. at 46
Gold at 50 day m.a. at 1130
US - 30 DAY FED FUND at 50 day m.a. at 99.77
US - 10 YEAR T-NOTES above 50 day m.a at 126.5
EUR/ USD above 50 day m.a at 1.11
Crude Oil WTI at 50 day m.a. at 46
Gold at 50 day m.a. at 1130
US - 30 DAY FED FUND at 50 day m.a. at 99.77
US - 10 YEAR T-NOTES above 50 day m.a at 126.5
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
96.248 -0.159 -0.20%
Support 95.230 Resistance 97.100
Forward 1 year - 96.998s.
96.248 -0.159 -0.20%
Support 95.230 Resistance 97.100
Forward 1 year - 96.998s.
EUR/USD
1.11535 0.00000 0.00%
Support 1.10367 Resistance 1.12567
Forward 1 year - 1.12460s.
1.11535 0.00000 0.00%
Support 1.10367 Resistance 1.12567
Forward 1 year - 1.12460s.
Crude Oil WTI
46.05 -1.04 -2.27%
Support 44.68 Resistance 47.92
Forward 1 year - 50.97s.
Forward 1 year - 50.97s.
Gold
1121.72 -2.63 -0.23%
Forward 1 year - 1,126.3s.
Pieter Bergli - DeLoren Trust Holdings
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