Forex Market Commentary
The US market is still mixed in its rate outlook.
In truth the recent slide of the EUR/ USD is more to do with ECB chief Draghi comments in the valiant Euro attempt to inflate a sagging economy tottering on near negative yields in stark contrast to the US markets. Yes, it's the economy stupid! The strength in the US economy and a far better yield expectation is what is driving the USD to increasing heights viz a viz it's counterparts. Currently, 10 yr US government yields are running at 2.26%, Contrast this figure with the soft 10 yr German bond yields currently running at 0.48% or Japanese 10 year at 0.31%, and pretty much one could understand the reason for the rise in USD value as international funds seek to purchase USD to acquire higher bond yields in US government securities. Given this bond market context the EUR/ USD is not going to hold well at the 1,05 mark in spite of a slowing US economy. For the moment though commercial banks are putting up strong bid at the 1.06 mark and this should hold. it would take a dramatic consolidation at 1.0450 before Xmas to convince large specs to make a fresh run at the 1.00 parity mark in Q1 16. Given the slowing down crude oil WTI slips to 41 and may slip further to 35 Q1 and Q2 16 before price advance can become a possibility given stockpiles at record highs. Gold bullion will do well to defend the 1050 and is currently slipping that way on alarming news that Chinese gold lease rates are starting to hurt the Chinese economy with record defaults.
Important data:
Equities:
Asia:
Nikkei 225 19,879.81 +20.00 (0.10%)
SSE Composite 3,630.50 +13.44 (0.37%)
Hang Seng 22,754.72 +254.50(1.13%)
Europe:
DAX 11,119.83 +34.39 (0.31%)
CAC 4,910.97 -4.13 (0.08% )
USA:
Dow 17,823.81 +91.06 (0.51%)
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:
USDX above the 50 day m.at 96.5
EUR/ USD below the 50 day m.a at 1.12
Crude Oil WTI below the 50 day m.a. at 46.
Gold low the 50 day m.a. at 1130
US - 30 DAY FED FUND above 50 day m.a. at 99.84
US - 10 YEAR T-NOTES above 50 day m.a at 128.00
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
99.630 +0.630 +0.81%
Support 98.227 Resistance 101.959
Forward 1 year - 100.735.
99.630 +0.630 +0.81%
Support 98.227 Resistance 101.959
Forward 1 year - 100.735.
EUR/ USD
Euro 1.064800
Support 1.05637 Resistance 1.07695
Forward 1 year - 1.0780s.
Euro 1.064800
Support 1.05637 Resistance 1.07695
Forward 1 year - 1.0780s.
Crude Oil WTI
41.55 -0.17 -0.41%
Support 40.68 Resistance 44.58
Forward 1 year - 46.23s.
Forward 1 year - 46.23s.
Gold
Gold 1077.99
Forward 1 year - 1,0808s.
Pieter Bergli - DeLoren Trust Holdings
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