Have you been feasting on the much needed volatility on forex dance floor today?
Mr. Euro declined for the second day in a row against Ms. USA (the US dollar) yesterday, in some small part ushered by the release of German Business Sentiment (ZEW). The recurring theme and element of consistent concern stems from uncertainty around the Russia-Ukraine crisis. Germany’s ZEW survey has been in decline for the past eight months, and now sits at 8.6, its lowest level since December 2012. Russia being one of Germany’s biggest trading partners, it comes as no surprise that German business sentiment is down, with little signs of an early resolution.
Global stock markets are suffering as well, with European stocks taking a tumble for the same reason as the euro with the DAX down 0.7%, “The drop in the ZEW index confirms the near-term downside risk for the German and Eurozone economies emanating from the Ukraine crisis.” Fear it would seem is back.
The Eurozone is not the only casualty however, the FTSE weakened modestly, but the more interesting aspect was to be found in trading volumes sitting at 40% of the 90-day daily average. A product of course of the summer lull, but in large part attributable to global uncertainty, traders are sat on their hands at the moment with little clue as to what to do.
However when there are victims, there are always victors and economically speaking this seems to be the US. With the dollar seeing continued and relatively substantial gains against the vast majority of its dancing peers. Investors are piling into Ms. USA motivated by fear and uncertainty and it would seem in large part out of herd mentality. The wisdom of crowds!!
Other worldly news today sees the release of UK Jobless claims, Eurozone industrial production followed by US advanced retail sales. China’s industrial production and retail sales data set came out slightly lower, leaving the market between a rock and a hard place with no certainty on which direction the countries prosperity could fall.
Short-term FX Signals
EUR/USD 4-hour: Mixed signals
Invest Diva likes: Short positions below 1.3441 with targets at 1.3331 & 1.3256 in extension.
If pair goes nuts: Above 1.3441 look for further upside with previous support turned resistance at 1.3519 and 1.3637 as targets.
What’s up on the forex dance floor: The pair remains below below a key resistance level
Supports and resistances:
1.3637
1.3519
1.3441 pivot point
1.3331
1.3256
GBP/USD 4-hour: Under pressure
Invest Diva likes: Short positions below 1.6883 with targets at 1.6696 & 1.6651 in extension.
If pair goes nuts: Above 1.6881 look for further upside with previous support turned resistance at 1.6969 and 1.7100 as targets.
What’s up on the forex dance floor: The pair is scratching the lower band of Mr. Bollinger With the RSI right below the over-sold zone so we could see short-term upside before more declines
Supports and resistances:
1.7100
1.6969
1.6883 pivot point
1.6696
1.6651
USD/JPY 4-hour: Consolidating
Invest Diva likes: Long positions above 102.31 with targets @ 102.42 & 102.49 in extension.
If pair goes nuts: Below 102.31 look for further downside with 102.12 & 101.99 as targets.
What’s up on the forex dance floor: The pair is about to enter the Ichimoku cloud with the RSI heading up above the neutrality area.
Supports and resistances:
102.73
102.49
102.31 pivot point
102.12
101.89
