Global FX Economy 12th Oct 2015. Equities positive. Markets, news and analysis

Forex Market Commentary  

The Dow closes Monday firm.

What we should see from now till mid December is the slow and gradual unwinding of Dollar longs as speculative traders seek to square their books and close positions. The much anticipated official US rate hike never occurred and looks highly unlikely in Q1 2016 as well. Very interesting to note that Gold closed strong in the 1160's today. That is usually indicative of specs exiting the USD. US inflation is running at 1.7% compared to the Euro zone which is actually running at 0.9%. In spite of slow manufacturing pace and never ending problems trying to find stability within the Euro pact, still the EUR/ USD trades higher today once again due to short covering and closing out of current positions rather than for any per se interest in the Euro. ECB chief Mario Draghi still has a tough act to follow in buying back Euro bonds and putting liquidity into the system by forcing down interest rates. Currently the ECB has been buying about 60 billion Euro worth of outstanding bonds in the attempt to keep the Euro currency down but all to no avail as the USD shows weakness and the EUR/ USD rises to 1.13 today. USDX has slid down to the 94 and is looking towards the 92. crude oil holding impressively at 48 whilst gold shines in the 1160's looking for a push to the 1200 mark.

Congratulations to Angus Deaton of Princeton University for winning the Nobel prize in Economics for his microeconomic analysis of consumption where disposable income is at the heart of nearly every major macroeconomic issue in the world.

 

Read on Bloomberg:

 

http://www.bloomberg.com/news/articles/2015-10-12/angus-deaton-wins-2015-nobel-prize-in-economics 

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 
94.883     +0.006 +0.01%        
Support 94.805     Resistance 96.895
Forward 1 year - 96.270s.

EUR/USD
1.13568     -0.00150 -0.13%
Support   1.11140          Resistance 1.12640
Forward 1 year - 1.14310s.  

Crude Oil  WTI

48.06     +0.45 +0.90%

Support 46.02  Resistance  51.96
Forward 1 year - 44.76s.

Gold

1164.41     +6.42 +0.55%

Support  1,126.0    Resistance 1,150.4
Forward 1 year  -  1,133.2s.

Pieter Bergli - DeLoren Trust Holdings

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