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Equities Attempt A Bounce, Get No Joy Dec. 16, 2014

Stock Bounce Fails, Gold And Oil Drops

Things are starting to look shaky in the markets. Nothing sums it up better than this article title this morning ”

The Bloodbathery Continues – “Some Folks Were Selling… Everything”

What a great time to have a stock market rout just as every body was expecting the Santa bounce, instead they get a market crash. I still believe the Fed and other central banks are shuffling around banging their heads together working on ideas to potentially save the day but if they dont do something soon it may be too late. I guess I should also consider that this is part of the plan as well since they probably know that there isn’t much they can do but start printing. You never know maybe they will let the correction run its course like they should have years ago.

There has also been some other interesting developments with gold tumbling showing that the flight from risk is not going in golds direction, at least for now anyway. It would be more interesting to see exactly who is selling but as oil and other commodities fall it does make some sense that gold will go with to some extent. However if any cracks start showing in the USD things could change rather quick even though the probability for that is rather low for now. Next on the list is the Russian interest rate hike of almost 7% over night. This move was to hopefully save the Ruble from crashing further but Im not so sure it will work unless something kick starts a rise in oil, which is doubtful when the Saudis just yesterday said they could tolerate $40 oil.

I was actually rather sure that they wouldn’t start going nuts until after the holidays. I guess I can chalk this one up as another thing I was wrong about. However it does add more potential to just how interesting next year is going to be.

EUR/USD Holds Upper Range

As this sort of panic continues I expect the EUR/USD to hold the 120 pip range its been in unless it gets help from the EUR/GBP that beat up the GBP yesterday. It should be breaking down with risk aversion but when it doesnt it shows that they are pushing the EG around instead. The levels I would be looking at today are the same with the exception of adding the higher risk 1.2416 yesterdays lows for a potential long. It has the hourly 200 just below for confluence taking a little bit of the added risk away.

EUR/USD hourly chart 12-16-2014

 

GBP/USD Drops 140+ pips

This is the sort of move we have come to expect at this time of year. This one apparently for no reason even though I haven’t looked really hard for any tape bombs yet. Suffice it to say the GBP was the one they beat up on along with stocks yesterday. At this point it does have two intraday pushes down so I would be bias for the short if it weren’t the holiday season. The best levels to short from are at 1.5665 and 1.5652 if they drop more during Asia but they could easily run stops above 1.5675 on low volume.

GBP/USD hourly chart 12-16-2014

EUR/JPY Tests Lower Range

All the Yen Crosses I watch are testing this months lows looking like they could break sooner rather than later. The EUR/JPY did make a first long term push but didn’t show much conviction to the downside. The best levels to trade for the short are at the current Asian high of 146.76 or up at the 147.06 psych level. Otherwise being open for the long with a stop run and clear set up to yesterdays lows is a good idea.

EUR/JPY Hourly chart 12-16-2014

Forex News Today

The calendar is busier today starting with French, German and EZ Manufacturing and Services PMI data. The french figures shouldnt do much without a big miss. German data is expected to get above 50 on Mfg but if it cant then should be Euro negative. If the previous data disappoints then the EZ should as well further weakening the Euro. Later in the day there is the German ZEW Economic Sentiment. I fail to see any reason they expect a rise from 11 to 20 but as with the US data yesterday stranger things have happened.

The UK has BOE Carney speaking just before a slew of inflation data. Depending on what he says they will more likely ignore any small misses in the data and run the GBP around if he says anything big.

The US has Building Permits and Housing Starts but I have my doubts they will do much pushing unless they miss big to the upside. The housing market in the US needs to be showing much more improvement to get them pushing on this data again.

Happy Holidays

Chad

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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