Market Volatility
Welcome to another forex trading week!
Last week we had some memorable moments but what a bizarre 5 days it was.
On Monday crude oil went close to it's all time high taking down the Dollar at the same time.
Tuesday Bernanke's testimony gave the impression of weaker growth in the economy and rising inflation. Equities were dropping as Bernanke was talking and oil came down about $9 a barrel from yesterday but today will be remembered for the new all time high created by the Euro Dollar. The Cable produced a new high from the last 3 three and a half months.
Wednesday saw a further move down in oil which now reached £132 a barrel based on a Government report that US oil supplies had increased. The Euro started selling off against the Dollar which maybe as a result of profit taking but provide a pop and drop shorting opportunity to some traders.
Thursday saw even further decrease in oil which now closed at $130 a barrel and the Euro clawed but some losses but convincingly at all. However, it decided to rest above the support level.
Friday gave further weakness in equities at the open but closed modestly higher and oil dropped again closing at $129 a barrel.
The whole week provided volatility in both equities and the currency market. While the currency market was focussing on the Euro continuation or reversal from an all time high, the equities were concerned over Fannie Mae and Freddie Mac.
Chart courtesy of Advanced Get. Data provided by eSignal.
The daily USDCHF forex analysis above gives a good picture of what might happen with the Dollar. Those of you that were on the webinars should analyze the Swissy chart further with the techniques we have shown you.
Chart courtesy of Advanced Get. Data provided by eSignal.
The Pound Dollar chart above shows what happened since Tuesday and why. The resistance trendline was tagged causing the price to reverse. Sterling is holding at the breather level so has done well in spite of rising unemployment claims and inflation.
Lastly, Trichet suggest the Eurozone growth is likely to rebound.
Have a good trading week.
Forex Analysts
Javid Shaik & Anne Chapman
posted by Javid Shaik @ 12:25 AM
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