Forex Market Commentary
ECB cuts rate by 10 basis points to minus 4%.
This week the ECB, in summary, cut its three key interest rates: it lowered the main refinancing rate to 0.0% from 0.05%., then the deposit rate was reduced 10bps to -0.40% and then the marginal lending facility rate was reduced by 5bps to 0.25%. The ECB also increased the size of it's QE program by €20bn to a total of €80bn a month. The stimulus package. Once properly digested traders in the market quickly identified a definite shape and character to the forward yield curve as negative yields were thus deemed to have a definite end game in the shape of this once and for all grand stimulus package. The Euro currency gained ground and European equities firmed on the day and week as the USD came under pressure. Interestingly crude oil topped the 36 Dollar resistance and carried forth to hit the 40 Dollar mark identifying a definite end to the downward trend in prices. However, the euphoria on the Euro front may not last long. Across Euro land factory orders are down and unemployment a sticky problem for some time yet
EUR/ USD - For our purposes of studying the EUR/ USD this year 2016 we shall be keeping an eye out for yield convergence signs. We must note the the large scale of the stimulus package undertaken by the ECB vs the reluctance of the US Fed to raise rates further this year at the very least points to a holding pattern on interest rate spreads between the USD and EUR if not the beginning of a convergence if we have hit rock bottom on the Euro yield and absolute top of the US yield. In short montetary policy divergence between the two send the EUR/ USD lower and the slightest reduction of this expectation towards mild convergence is sending the EUR/USD back up. Key resistance is located at 1.1453 and 1.1640 and as the weeks unfold and should US data indicate a slow down then watch for EUR/ USD to challenge the 1.16. Support at 1.0810.
GBP/ USD - Our purposes of watching this pair would be to identify opportunity as the Brexit talks increase volatility. This week's short term bullish momentum is fading fast and resistance at the 1.4280 seems too stern a test. prices are sliding back to resume the downward trend with an eye towards the 1.3503 level.
Gold bullion - at the moment is stalling as the outlook on the USD appears neutral. profit taking yesterday saw bullion drop 25 points to settle at 1250 area. In the long term we will be looking ahead to breaches of 1300 and 1390 with strong support at 1243.
Crude Oil WTI - has ghad a good week rising to 40 Dollars. The trend is neutral as consolidation above 28 Dollars continues with indicators pointing to a neutral to bullish bias and a sustainable trading range of 30-40 Dollars for the next 6 months. Expect the shorts in play above 40 Dollars until the end of this year.
Important data:
FX:
EUR/ USD 1.115600 -0.004365 -0.39%
USD/CHF 0.98284 -0.00021 -0.02%
USD/JPY 113.800 +0.721 +0.64%
CNY/ USD 0.153330 + 0.00050 +0.1%
GBP/USD 1.43855 +0.01065 +0.75%
AUD/ USD (commodity currency) 0.756750 +0.010975 +1.47%
USD/CAD (commodity currency) 1.32110 -0.01151 -0.86%
NZD/USD (commodity currency) 0.67495 +0.00690 +1.03%
Fixed Income Markets:
US Federal Reserve - +0.50%
US 30 Day Fed Fund 99.6300 +0.0025 0.00%
US 2 year T-Notes 108.976563 -0.054688 -0.05%
US 10 year T-Notes 28.765625 -0.296875 -0.23%
ECB Base rate 0.040 %
Chinese interest rate PBC China 4.35 %
Japanese interest rate (BoJ) 0.10 %
Equities Markets:
Nikkei 16,938.87 + 86.52 (0.51%)
SSE Composite Index 2,810.31 + 5.58 (0.20%)
Hang Seng 20,199.60 + 215.18 (1.08%)
DAX 9,831.13 + 72.25 (0.74%)
FTSE 100 6,139.79 + 332.98 (3.51%)
DJIA 17,213.31 + 218.18 (1.28%)
Commodities Futures Cash:
Crude Oil WTI 40.00 +0.60 +1.51%
Gold 1250.625 -24.790 -1.94%
Indicies:
USDX 96.231 +0.057 +0.07%
VIX 17.65 + 1.30 - 6.86%
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
