Gold Surges As Downside Risks Build – FX Forecast 2/11/16
EUR/USD Creates Whipsaw
Both pairs had quite the whipsaw back and forth today. The initial move to the downside was on the first comments from Yellen and that was followed by US Dollar weakening when the market absorbed the further dovish comments. The fact is we are seeing a global slow down and now central banks have no new tricks to throw this down turn. For most major economies, interest rates are quite low along with massive stimulus. What are they going to do next time around. Negative interest rates and throw even more money at it? This is why I preach being self sufficient. I’ve said many times before and I’ll say it again, 2008 is going to look like a gentle stroll in the park compared to what we will see next. We have the same upper point we had from yesterday’s forex forecast, but we don’t have many quality lower levels. Our only lower listed point is beyond the ADR and therefore we are unlikely to reach it. As I talked about in tonight’s daily market preview video, I will be looking for any new lower levels formed during the day.
Pound Pushes Higher
The GBP/USD moved 130 pips up, 130 pips down, and then finally it has moved back up around 130 pips. Overall we have had quite a bit of overall price action that finally ended with the Pound pushing slightly higher. On a longer term perspective I still think the 1.4600 area is a bigger line in the sand for medium term market direction. We are quickly approaching this level again and if it closes above it towards the end of the week then further upside becomes likely. For today, we have two upper levels. A break and hold above the first level means we are more than likely going to be seeing our secondary upper point. We also have two nice lower levels from which I would take any valid stop run long.
Forex News For February 11th 2016
Fed Chair Yellen Testifies 10:00 AM Eastern: Like yesterday we have another speech from Yellen planned today. Today she will be testifying before the Senate Banking Committee. Like yesterday I would expect volatility but maybe not as much. Much of what she was going to say was said yesterday which makes today a little less likely to be as volatile. I would still move definitely avoid carrying a trade into her speech.