A warm welcome from OnlineForex.com- the Online Forex Trading expert! We are all about the fundamentals here: it's our view that you need a clear understanding of all the trends going on in the markets before you start trading for the day, so that you can trade with the overall currency flow or at least know when you are trading against it. Remember to think about your time frame- are you trading hourly, daily, weekly or monthly forex trends? You get the picture. Take a view on the trend that matches your timeframe, while keeping an eye on the amount of volatility in the markets.Wednesday update US dollar rally, Euro selling, fails again
Apologies for lack of Tuesday update, some technical problems.
If you have been way for a few days you would think that nothing had happened in the world if you used forex markets as a guide. Here we are back at Friday levels after an equity sell-off on Monday reversed partly on Tuesday. Events in Holland ( Resignation of government) and the French election which caused the wobble have not gone away but markets seem to be taking a wait and see stance. In EUR/USD we are back at 1.32 again and you wonder what will eventually give us some proper volatility. BIS ( Bank for International Settlements) data for recent months points to a big decline in forex turnover which considering the level of geopolitical and economic tensions is a surprise. Or maybe not ,why get involved if nothing much is happening you could say.
My original thoughts were for a Euro bounce on the IMF deal which didn’t happen. However, with things as they are its still quite possible. What didn’t go down, might go up, so still a chance of EUR/USD 1.33 plus where I think we might add to our short position again.
Today we have UK GDP out at 8.30 GMT. its expected to show 0.1% plus which keeps the dreaded R word at bay. In truth the UK is suffering like everyone in Europe but provided its not way away sterling probably will not move too far. A negative number would see it give up some of its recent gains but nothing major. I mean what the heck would you short it against.
We should get some policy hints from the Fed today although no real changes are expected. I am not sure if its QE expectations holding the dollar back still or the rumoured repatriation of Euros by the banking sector. In fact I don’t think anyone has a handle on things at the moment which is why its best to stick to smaller positions with limited horizons.
We have 8 trading days until the French election run off and unless there is some major change in polls forex markets look like treading water. Further ahead we can see real problems but right now no one seems to care or more likely just cant fathom the outcome at least in the short term.
10 man Chelsea beat Barcelona in the Champions league Semi final and just adds to Catalan woes at the moment.
Headlines
- Equities.. A recovery following Mondays sell-off and Apple profits released after hours were better than expected. It will be interesting to se if the recent slide in Apple shares is reversed by much
- Bonds.. Tensions in the EZ have eased but are likely to return at any time. Germany issues a 30 year bond today which is only a dream for other EZ members
- US..Data remains mixed and one assumes the Fed will draw no immediate conclusions for a change in policy
- Holland… Reuters reporting Dutch elections set for Sept. 12th
- Japan.. Quiet ahead of BOJ announcements USD/JPY 81.20 and like elsewhere looking for inspiration
Ireland.. The Emerald Isle remains in the doldrums. Retail sales down again as austerity measures continue to take money from consumers pockets. Their one bright spark , exports from companies attracted for years by Irelands low corporation tax ( The tax Sarkozy was desperate to align with France and others).
It would seem sensible for maybe core EZ countries to allow struggling countries to lower their taxes to attract some inward investment helping growth and narrower trade deficits further down the road. That is probably way to sensible a view to get anyone excited in the EZ and of course would lead to a short term fall in the tax take.
However, it looks like Germany will soon be forced to make some concessions to policies to produce at least a modicum of growth in other countries.
JUST RELEASED … UK GDP 1st Qtr -0.2% and technically recession. Sterling back over EUR/GBP 82.00
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