Forex Market Commentary
The year of the Brexit.
Last year 2015 it was the turn of the Euro and speculation that the member state Greece would leave the monetary union of Europe. This year 2016 it is the turn of the UK and the looming referendum. As speculation feeds into price volatility so does opportunity for price discovery present itself. Monday this week was particularly bad for 'cable' as the Pound fell 2.4% at one point to register the fastest depreciation since 2009 when the Bank of England cut rates. Whatever the eventual result of the UK vote large specs will certainly hover over the currency pair in search of any signs of weakness for some momentum trade action and so watch this market very carefully indeed.
Key currency observations next week are further downward pressure on the USDX whilst the GBP and EUR should stiffen their resolves and hold steady given the recent sell-offs viz a viz the USD.
EUR/USD is trading on mixed signals at he moment between a range of 1.11 and 1.09 in a sideways channel and any breakout can take us to 1.14 key resistance on the upside and 1.06 key support on the downside. Latest CME COT data release as of 26 Feb show on the futures contract large specs are at 107,566 long and 154,423 short being 41% bullish in outlook and flat on the week with an overall neutral outlook at the moment on the EUR/ USD.
GBP/USD is consolidating at key support at 1.3800 and considered oversold for the moment. GBP has come under strains which has seen the currency pair slide from 1.52 this time last year to the current lows/ Further Brexit worries can quickly see a testing of the 1.3503 mark which was the 23/01/2009 low. Latest CME COT data release as of 26 Feb show on the futures contract large specs are at 35,479 long and 68,547 short with overall bullish outlook at a mere 34% but 2% up from last week. Oversold conditions may present buy opportunity as specs currently do not think the vote will go to the NO camp.
Gold is maintaining it's recent solid show of strength coming off sharply from the 1050 region achieved in Dec 2015. Currently the precious metal sits perched taking a look at the lofty 1390 mark. Current resistance lies at 1260 with support at 1190.
Crude Oil WTI though under respite is looking technically weak under the 200 day m.a at 47 USD. Support still stands at 28 USD with current resistance at 34 USD.
This coming weekend should set a very important guidelines for the global economy in the shape of the G20 or Group of Twenty finance ministers and central bank governors meeting in Shanghai. Key topics cover economic growth amidst a climate of low interest rates and relatively cheap energy prices.
Read on Bloomberg US Fed concern of a global economic slowdown:
http://www.bloomberg.com/news/articles/2016-02-26/brainard-says-fed-rate-rises-may-be-slower-amid-global-headwinds
and growing producer consense in energy to raise oil prises:
http://www.bloomberg.com/news/articles/2016-02-25/oil-set-for-weekly-gain-as-russia-says-talks-with-iran-continue
Important data:
FX:
EUR/ USD 1.09377 -0.01248 -1.13%
USD/CHF 0.99655 +0.00944 +0.96%
USD/JPY 113.872 +1.038 +0.92%
CNY/ USD 0.152869 - 0.00024 -0.1%
GBP/USD 1.386500 -0.013525 -0.97%
AUD/ USD (commodity currency) 0.71313 -0.01064 -1.47%
USD/CAD (commodity currency) 1.351995 -0.000870 -0.06%
NZD/USD (commodity currency) 0.663135 -0.013505 -2.00%
Fixed Income Markets:
US Federal Reserve - +0.50%
US 30 Day Fed Fund 99.570 -0.015 -0.02%
US 2 year T-Notes 109.273438 -0.195313 -0.18%
US 10 year T-Notes 130.375000 -0.718750 -0.55%
ECB Base rate 0.050 %
Chinese interest rate PBC China 4.35 %
Japanese interest rate (BoJ) 0.10 %
Equities Markets:
Nikkei 16,188.41 + 229.63 48.07 (0.30%)
SSE Composite Index 2,767.21 +25.96 (0.95%)
Hang Seng 19,364.15 + 475.40 (2.52%)
DAX 9,513.30 + 181.82 (1.95%)
FTSE 100 6,096.01 + 83.20 (1.38%)
DJIA 16,639.97 - 57.32 (0.34%)
Commodities Futures Cash:
Crude Oil WTI 32.85 -0.22 -0.67%
Gold 1173.460 1224.78 -12.55 -1.01%
Indicies:
USDX 98.119 +0.673 +0.87%
VIX 21.50 + 0.6 - 1.24%
Pieter Bergli - DeLoren Trust Holdings
A non-profit commitment to provide education on the properties of currency markets. Forex market commentaries and media reports for free
Disclaimer - U.S. Government Required Disclaimer - Commodity Futures Trading Commission
Futures and Options trading involves risks of losses. No representation is being made that any reader and account will or is likely to achieve profits or losses similar to those that are being discussed on this blog http://forexeducationperspective.blogspot.com/. The past performance of any trading system or methodology discussed is not necessarily indicative of future results.
CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
All trades, patterns, charts, systems, etc., discussed in this blog http://forexeducationperspective.blogspot.com/ are for educative and illustrative purposes only and not to be construed as specific advisory recommendations for actual trades. Disclaimer - http://forexeducationperspective.blogspot.com/ bears no responsibility for the trading actions of its readers.
* European Union laws require European Union visitors to this blog to know that cookies are used by Blogger and Google, including use of Google Analytics and AdSense cookies and in reading material from this blog do consent to the use of such cookies
A non-profit commitment to provide education on the properties of currency markets. Forex market commentaries and media reports for free
Disclaimer - U.S. Government Required Disclaimer - Commodity Futures Trading Commission
Futures and Options trading involves risks of losses. No representation is being made that any reader and account will or is likely to achieve profits or losses similar to those that are being discussed on this blog http://forexeducationperspective.blogspot.com/. The past performance of any trading system or methodology discussed is not necessarily indicative of future results.
CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
All trades, patterns, charts, systems, etc., discussed in this blog http://forexeducationperspective.blogspot.com/ are for educative and illustrative purposes only and not to be construed as specific advisory recommendations for actual trades. Disclaimer - http://forexeducationperspective.blogspot.com/ bears no responsibility for the trading actions of its readers.
* European Union laws require European Union visitors to this blog to know that cookies are used by Blogger and Google, including use of Google Analytics and AdSense cookies and in reading material from this blog do consent to the use of such cookies
