US Equities Breaking Fresh Multi-Month Lows – July 28th 2015
The market is at a decision point and has been going back and forth for the past few months. A few days ago I was asked why I mention Chinese equities in the fx commentary from time to time. The fact is we are in a global economy and what happens on the other side of the world matters. Yes the Chinese equity market has a completely different set of circumstances effecting it. Without a doubt that is true. What smart people tend to forget is the market is very emotional and therefore fear spreads like wildfire. When someone sells because of fear they don’t have a list of technical reasons to support the fear, they just have an emotion that they are choosing to act on. As a result, what happens around the world matters. Why does any of this matter?
To be honest, to me personally it really doesn’t lol. I don’t have any exposure to the equity market but many people reading this daily commentary do. As a result I think it is critical that anyone who has exposure to the equity market keep in open mind to world wide sentiment. Sentiment, both positive and negative is contagious. Keeping an eye on things like Chinese equities, or whatever is getting attention at the moment can be a good leading indicator in regards to what will happen locally. Again, this is critical especially for those with exposure to the market 24/7 like retirement funds. On to the market!
Euro Rallies On Better Than Expected German IFO Data
Like I mentioned in yesterdays forex market commentary the Euro is approaching a key point for short term direction. The current trend to the downside we have been running for the last month is getting close to breaking. A push and hold above today’s highs will be a strong indicator that further upside is likely. I wouldn’t be surprised if the EUR/USD retraced slightly or went range bound for a day or two before making that move. Like yesterday I’m still not sold on direction and therefore I will be open to trading long from any of the lower manipulation points or going short from any of the upper levels. Obviously this requires the entry criteria to be satisfied once the price reaches a pre-selected manipulation point.
Pound Runs Into Previous Range
Yesterday I talked about a few points that could mean some bullish momentum for the Pound. Yesterday we did see that but overall we are really just right back into the previous range bound market we left. At this point I still feel like remaining open on direction is the best course of action. Yesterday we had a really nice short setup on the Pound that resulted in a -20 pip loss for me. Its been a little while since I took a loss but the market had to give me a nice little reminder that losses happen:) For those of you that are Day Trading Forex Live members make sure to check out the video daily market review for a full breakdown of that short setup that occurred during the New York session.
Like the Euro I will still be trading in either direction should a valid setup occur from any of the pre-selected manipulation points.
Forex News For July 28th 2015
UK Prelim GDP Q/Q 4:30 AM Eastern: This is a big market mover and one that I would not carry a trade going into. Because this is the prelim number it has a much higher probability of deviation from the expected number. Therefore a big market move is more of a probability than any of the future quarterly GDP numbers. The last release of this number was .2 worse than expected and the GBP/USD spiked down over 50 pips. This month the number is expected at .7
US Consumer Confidence 10:00 AM Eastern: Like most US data, US Consumer Confidence is getting more attention from the market and this piece of data is capable of making a move larger than 15 pips on the initial spike. The expected number is 100 even. Any deviation of more than 4 full points will create a decent little spike in the market but I wouldn’t exactly call this a trend changer.
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