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Equities Drop Again, USD Weakens Dec. 17, 2014

Turmoil In The Markets Keep the Plunge Protection Team Busy Yesterday

I have to admit although the chaos in the markets these days I expected at some point. I had to laugh when I saw the pictures in an article this morning and I just had to share them. The comment at the top of this one is part of the screen shot so I cant take credit for it.

Market Chaos

Second was this tweet of trades on the S&P someone posted citing a total of 3.7 Billion in buys looking very suspicious. Shall we say most likely the Plunge Protection Team hard at work?

Plunge Protection Team

Something seems fishy there. On to the charts

EUR/USD Makes First Push From Range

With the weakening USD the EUR/USD finally made the first push up yesterday so the probability is higher to see that continue today. If they cant stop the equity plunge then it should continue as well. However the USDX is at monthly support that they may not be willing to break just yet. The best level for a long is the 1.2484 while I would normally still be open for the short from 1.2555 or the stop run to yesterdays highs.

EUR/USD hourly chart 12-17-2014

 

GBP/USD Rejects Push Down

There was definitely something going awry yesterday when the UK can print worse than expected data and produce such a move to the upside in the GBP/USD. At this point it would be best to keep an open mind on direction for this pair but as with the EU, if the market rout continues without some big tape bomb from governments or central banks then the probability for more USD weakness is higher. Normally I would be open for the long with the conviction upwards from 1.5723 while still consider a short from 1.5772 but this move is a good example of the added risk to trading at this time of year especially when markets are going nuts on thin volume.

GBP/USD hourly chart 12-17-2014

 

EUR/JPY Also Reflecting Market Turmoil

The wild swings in the EUR/JPY yesterday are just another sign things are a bit crazy right now. Its not very often we see a 180 pip move retraced 200 then drop 150 all in the same day. The probability of us seeing more of these are high and likely to continue into next year so I will be sticking to my plan of not trading but for you die hards my advice would be to stick with the most significant levels to trade and be careful. The best levels for today are at 146.80 and 146.34 at the Asian highs for a short or 145.42 and 145.14 for a long. Keeping in mind the mid levels are higher risk.

EUR/JPY Hourly chart 12-17-2014

 

Forex News Today

Today we have the UK BOE Meeting Minutes along with their unemployment data. I have doubts there will be much they will be push on unless the minutes or even some votes have changed. Otherwise they will be waiting for what the Fed does late in the NY session. They may start something on the Euro Zone CPI data if it drops below zero or even something to the same magnitude on US CPI when NY opens. Having said all that I expect they will either wait for the Fed or if the equities rout begins early again they will be ignoring news all together and be moving on risk and or potentially panic again.

Personally I wont be paying much attention and look to see what happened tomorrow morning 🙂

Happy Trading

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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