Forex Price Action – USDINX Trade Update | Sept. 27th
As I wrote about two days ago, the USDINX was in a corrective pullback phase, and one should not expect USD strength to continue. On the next day, the EU, GU, AU and NU all closed higher and continued those gains today. As mentioned in my post, the best play was to look for a short off the dynamic resistance and daily 20ema at the 80.00 figure. Playing out as expected, it went only 1.3pts above 80, then rejected off the daily 20ema, following it up today with a second touch off the 20ema and further selling.
Today’s selling was the most aggressive thus far, and the first day in nine that price action closed below the lows of the prior day. This could lead to a new wave of USD strength to end the week. At best, I suspect one more attack on the upside is possible, so will be happy to short at the aforementioned levels again, looking for a medium term target of 78.75
Global Market Commentary:
Most of the big news today was centered around Spain which announced a timetable for its badly needed economic reforms including spending cuts and less tax increases, along with a plundering of social security benefits to plug some current shortfalls which may have something to do with the massive protests in Spain. Spanish 10yr yields are still above 6% which will continue to pressure the large EZ economy needing a bailout in the near future.
Ironically, later in the day Egan Jones cut its ratings from CC+ to CC which may accelerate bailout plans as the situation deteriorates further.
The Euro rallied from the daily 200sma to close strongly higher, up 100pips off the lows while Gold, Silver and Oil all gained on the day with Gold up about $19, and Oil up over $2.
Upcoming Economic Announcements:
|CNY Leading Index||20.00EST|
|AUD Private Sector Credit (YoY)||21.30EST|
|CNY HSBC Manufacturing PMI||22.30EST|
|EUR French Gross Domestic Product (YoY)||01.30EST|
|EUR German Retail Sales (YoY)||02.00EST|
|EUR Euro-Zone Consumer Price Index Estimate (YoY)||05.00EST|
|CAD Gross Domestic Product (YoY)||08.30EST|
|USD Personal Consumption Expenditure Core (YoY)||08.30EST|
|USD U. of Michigan Confidence||09.55EST|
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