Currencies Hold Ranges, Equities Have Worst Week In 3 Yrs Dec. 15, 2014
Equities Falling Around The Globe Leaves Currencies Waiting For Who Will Blink First
As we watched the carnage begin starting with oil dropping and now OPEC members admitting that they wanted to limit the effects of the US shale markets, its looking like the house of cards built by central banks is about to fall. Of course I expect they will jump back in and try to prop everything up, the question is, will it already be too late?
As I told members last week I will be stopping trading for the rest of the year to relax and enjoy the fireworks with my family. With the show already beginning with S&P futures along with the Dow and Nikkei gapping to the downside to start the week I think this is going to be an interesting holiday season for the banksters. However if the blood bath does continue the US Congress has quietly bailed them out yet again passing the buck to the US taxpayer yet again in the latest attachment to the budget bill last week. Check out whats now called the Cromnibus Bill.You just cant make this stuff up.
At risk of sounding like a broken record I will say again that trading at this time of year is much riskier so if you must do so then be safe and don’t trade a live account. There will be set ups and most likely big moves but taking the chance is not advisable.
While the EUR/USD is range bound the best levels will be the highs around 1.2489 for a short and lows at 1.2369 for a long. The other levels in between are valid but carry more risk.
GBP/USD Holds 50 Pip Range
The GBP/USD being in the same situation holding a much tighter range tells us something is keeping them from moving any plan forward for now. Again the 1.5754 for a short is the safest while 1.5652 being the best long level. However Fridays daily levels are valid and are slightly less risky than the mid levels for the Euro.
EUR/JPY Runs Off Early On Abe Winning Vote
The EUR/JPY has retraced most of the move started on the vote giving Abe a super majority according to exit polls. Now that they have calmed down somewhat I expect that this will have a positive effect on the Nikkei and drive down the Yen since this does more or less green light all the printing going forward. Of course just another hint of what the Fed and ECB will be doing in the future. The tell will be if other global equities hold it back. If they do then it will be another sign of waning confidence in the central banks. If that’s the case the blood bath will continue.
Having said that, this pair is also mired in a range from last week and has already ran stops to Fridays lows adding to the probability for a break upwards and as long as the Nikkei can maintain the up swing, the Yen crosses will too. I have my doubts they will run stops to the lows again during the London session but it is surely possible. Otherwise the 148.03 level is good for the short while watching for any conviction above Fridays highs. Otherwise the same is true with the mid levels on this pair being much higher risk for entries.
Forex News Today
There isn’t anything of note for data during the London session today. The US does have some medium impact releases that may get them to push the USD around during NY though. Starting with the Empire State Manufacturing Index expected to rise a couple points. At this point I expect it to be close potentially missing slightly to the downside and not doing much being the higher probability. Next is Manufacturing and Industrial production expected to improve as well but being hovering around the zero mark has potential to create a bigger push on a larger miss either way.
AUD traders have the RBA Meeting Minutes to watch early tomorrow along with Chinese HSBC Manufacturing PMI data. This could be big since they are expecting a drop below the 50 handle
MY APOLOGIES FOR THE BROKEN VIDEO OF INSIDE JOB IN THE COMMENTARY. I DIDNT THINK I WAS COPY WRITE INFRINGING WITH AN ITALIAN VERSION ALREADY ON YOUTUBE. HOWEVER YOU CAN STILL WATCH IT AT THIS LINK. STILL A MUST SEE!
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