Wednesday, August 20, 2014

Forex Wrapup as at August 20, 2014

Perhaps we will have to adjust our trading strategies very soon..
We have a couple articles here by some recognized experts in currencies, Marc Chandler and Dean Poppelwell. Both of these authors have been involved in currencies for a number of years and have developed an acute sense as to what may be occuring in the markets at this time.
Their articles will provide some decision making information for our longer term  trading strategies
EMU External Account Reviewed
Category: FXE,Marc Chandler Wednesday, August 20, 2014 10:16:20 AM
By Marc Chandler:
The euro area reported its current and financial accounts for the month of June. Combined they make up the balance of payments.
Traditionally, under the gold standard, the current account would be balanced by capital flows and the transfer of gold claims.
In the modern era, some economists emphasize the basic balance in explaining (and forecasting) currency fluctuations. The basic balance is the current account plus long-term capital flows. The assumption is that short-term capital flows are noisy, influenced by cyclical factors, while long-term capital flows are thought to be the true signal, reflecting underlying productivity.
Yet, it often seems that the long-run is a series of short-run disruptions, and that in any kind of time frame relevant for investors and speculators, cyclical considerations are significant. Moreover, currencies deviate in terms of both direction and magnitude for extended periods. It is there are a number of other balances that currencies

Complete Story »

Category: FXA,GDAY,CROC,Dean Popplewell Wednesday, August 20, 2014 1:47:52 AM
By Dean Popplewell:
By Stuart McPhee
AUD/USD for Wednesday, August 20, 2014
The Australian dollar is threatening to break through the support level at 0.93, after recently falling sharply from above 0.9340 in recent hours. Over the last month or so, it has generally been sliding lower from close to 0.95 down to its present trading levels around 0.93. A couple of weeks ago the Australian dollar surged higher to a one week high near 0.9375, before easing back and then falling sharply. It has done well of late to cling onto the 0.93 level after its sharp fall which saw it move from above 0.9400 down to a seven week low below 0.9240. A few weeks ago it was easing back below both the 0.9425 and 0.9400 levels with the former providing some resistance. The Australian dollar reached a three week high just shy of 0.9480 several weeks ago after it enjoyed

Category: FXE,FXB,FXY,FXA,UUP,UDN,Marc Chandler Wednesday, August 20, 2014 7:32:27 AM
By Marc Chandler:
The US dollar is posting gains across the board. It has risen above JPY103 to its best level since early April. The euro has been pushed through the $1.33 and is at its lowest level since last September. The greenback is also edging higher against the dollar-bloc and most emerging market currencies.
Sterling is the main exception. It also had been under pressure, slipping to $1.6600, but two dissents in favor of an immediate rate hike at this month's MPC meeting sent sterling quickly higher (~$1.6680), before sellers re-emerged. The dissents came from the MPC's external members Weale and McCafferty. There had been some speculation of 1-2 dissents, though we were skeptical.
UK interest rates rose a few basis points across the curve, and this lent sterling support. However, data out since the MPC meeting indicates, coupled with the tone of the minutes, ensures Weale and McCafferty stay in

 Category: UUP,UDN,FXE,FXY,FXB,FXC,FXF,FXA,NZDS,Dean Popplewell Wednesday, August 20, 2014 7:27:24 AM
By Dean Popplewell:
By Dean Popplewell
Currently, the central banker remains at the 'core' for most of the forex moves. Governor Stevens at the RBA is trying hard to jawbone his own currency, the Aussie dollar, lower. The 'chameleon' Governor Carney at the BoE seems to be confusing investors with some hawkish weekend copy, combined with dovish comments delivered last week, is complicating the pound's direction this week. Thrown into the mix is an MPC dissenter or two, and if nothing else, policy makers are certainly providing investors with price movement opportunities.
Even stateside, the investor is looking to the policy maker for guidance. The FOMC will release the minutes from its last meeting later this afternoon. Expect the market to downplay the event; instead dealers prefer to look to the annual symposium on monetary policy in Jackson Hole this Friday for market direction. The FOMC minutes will certainly indicate what happened a

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