Forex Market Commentary
Seasonal hedging with gold taking shape.
No matter what ECB chief Mario Draghi wants in his desire to see EUR/ USD push lower to the 1.05 to help famed European industrial exports, the winds of change are running to the contrary much to the ECB exasperation. Why? because the great Dollar push from 1.34 mid last year to 1.05 was a stretch too much and now equilibrium needs to be restored to the pair with more net shorts closing and thus the EUR/ USD is heading for a 50% retracement ear the 1.20 mark by the end of the year. its a classic case of speculators running ahead of commercials and now the elastic band has to snap back. so this week's EUR/ USD gains once again is becoming a story of short covering rather than any fund buying. Options traders can seek opportunity in writing 1.20 calls and 1.08 puts because this market is not going for any spectacular changes. Grexit came and went, China hit the dirt came and went; there's nothing further to torment the pair and so at least until Q1 2016 we should see a firmer EUR/ USD and overall USDX barely above the 90 mark. ECB QE though welcome is not going to help the large export base of Europe without a EUR/ USD below the 1.10.
In all this global investment movement the one benefactor for the next 2-3 months is gold. bullion is 1170 mark and firm bid to 1200 in the weeks ahead. options writers could do well with puts at the 1140-50 range as we have high probability of northside 1200 -1250 with short covering going on in the EUR/ USD market compounding bullion bid.
Crude oil remains bid with logistics confirming seasonal buying and the Iran factor and over-production now becoming a moot point at least as OPEC come to the realization that prices must go up. The worst is over and we should be range bound 45-55 the rest of the year.
Today on Bloomberg please read:
http://www.bloomberg.com/news/articles/2015-10-13/fed-s-tarullo-says-he-doesn-t-currently-back-a-2015-rate-rise
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
94.692 -0.072 -0.09%
Support 94.805 Resistance 96.895
Forward 1 year - 96.270s.
94.692 -0.072 -0.09%
Support 94.805 Resistance 96.895
Forward 1 year - 96.270s.
EUR/USD
1.138930 +0.003580 +0.32%
Support 1.11140 Resistance 1.12640
Forward 1 year - 1.14310s.
1.138930 +0.003580 +0.32%
Support 1.11140 Resistance 1.12640
Forward 1 year - 1.14310s.
Crude Oil WTI
47.33 +0.18 +0.38%
Support 46.02 Resistance 51.96
Forward 1 year - 44.76s.
Forward 1 year - 44.76s.
Gold
1172.350 +14.010 +1.21%
Forward 1 year - 1,133.2s.
Pieter Bergli - DeLoren Trust Holdings
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