Global FX Economy 26th Oct 2015. Euro pain barrier. Markets, news and analysis.

Forex Market Commentary  

Euro weakens on soft PMI Data.

We can be taken and a confirmation now that the ECB has thrown down the gauntlet. we are now looking at a trading range between 1.12 to 1.08 and for the ECB the lower the EUR/ USD then the better.
The US economy has already shrugged off a strong USD and is at full employment however it remains to be seen how listed companies can cope should the USD rise another 10% against it's major trading partners. The Dow closed almost flat yesterday at the 17623.05   just  -23.65 -0.13% to reflect the growing underlining strength of US markets in stark contrast to European, Asian and Emerging markets. It remains to be seen in the new year which way large specs will push the USD and all probabilities are for a higher value and rate increment; which makes us look ahead at where the next 'carry trade' will appear ie. borrow in the depreciating currency, and certainly specs will be looking to take advantage of a robust USD should they be able to plot a less volatile forward yield curve for counter-party currencies to plot a carry trade. USDX holds at 96, crude oil slips to 43 on inventory pile up woes and gold just about holding at 1160 but fearful of further declines given the sudden turn around in the USD.


Read on Bloomberg how a strong Dollar is hurting US corporates who are struggling to adjust to further USD increment next year:

http://www.bloomberg.com/news/articles/2015-10-25/the-dollar-ate-our-profit-is-lament-of-delta-mattel-whirlpool

and read on Reuters the crude oil price slide:

http://www.reuters.com/article/2015/10/26/us-markets-oil-idUSKCN0SK02O20151026 

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 
96.697     -0.121 -0.16%      
Support 94.213     Resistance 97.993
Forward 1 year - 95.259s.

EUR/ USD
1.106325     +0.001315 +0.12%
Support   1.10173         Resistance 1.14393
Forward 1 year - 1.14600s.  

Crude Oil  WTI

43.51     -0.47 -1.05%

Support 44.63  Resistance 48.31
Forward 1 year - 52.07s.

Gold

1164.950     +0.920 +0.08%

Support  1,170.2    Resistance 1,191.2
Forward 1 year  - 1,186.5s.

Pieter Bergli - DeLoren Trust Holdings

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