Forex Market Commentary
Dollar firms as Euro slips.
EUR/ USD slips over 300 pips in a significant 1 day collapse back down to the 1.10 mark and close to the 200 day moving average. Given yesterday's reaction of traders to strong US housing figures and the reluctance to continue short covering, coupled with ECB chief Draghi openly voicing his opinion that a lower EUR/ USD is what is needed to kick start the sluggish export sector, the EUR/ USD for now has failed to pierce the 1.15 mark consistently as the longs now run for cover. Continuous hinting of whatever it takes from the ECB by way of quantitative easing is starkly reminding traders of interest rate differentials and divergence given a robust US economy versus a stagnant European economy. Draghi has played down concerns that inflation has recently turned negative by pointing down to the drop in commodity prices. The Dow senses the feel good factor once again and climbs +320.55 +1.87% to close strongly at 17489.16. Crude oil and gold struggle to climb in the face of fresh buying across the board in the USD as emerging market currencies take the hardest hit with renewed Dollar strength.
Read on Bloomberg how the ECB comments sent a knock on effect on to Asian and US equities:
http://www.bloomberg.com/news/articles/2015-10-22/draghi-sparks-euphoria-in-europe-s-markets-with-stimulus-hints
and
http://www.bloomberg.com/news/articles/2015-10-23/asian-stocks-join-global-advance-as-ecb-signals-stimulus-boost
Read on Reuters the crude oil war chest just sitting and waiting to ignite for the next big push up -
http://www.reuters.com/article/2015/10/22/us-commodities-summit-m-a-idUSKCN0SG1U120151022
and bullion longs beware:
http://www.reuters.com/article/2015/10/22/us-lbma-gold-conference-idUSKCN0SG1H320151022
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
96.348 -0.056 -0.07%
Support 94.213 Resistance 97.993
Forward 1 year - 95.259s.
96.348 -0.056 -0.07%
Support 94.213 Resistance 97.993
Forward 1 year - 95.259s.
EUR/ USD
1.108265 -0.026135 -2.30%
Support 1.10173 Resistance 1.14393
Forward 1 year - 1.14600s.
1.108265 -0.026135 -2.30%
Support 1.10173 Resistance 1.14393
Forward 1 year - 1.14600s.
Crude Oil WTI
45.55 +0.17 +0.38%
Support 44.63 Resistance 48.31
Forward 1 year - 52.07s.
Forward 1 year - 52.07s.
Gold
1166.225 +0.025 0.00%
Forward 1 year - 1,186.5s.
Pieter Bergli - DeLoren Trust Holdings
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