The U.S. Dollar Index finished higher on Friday while eking
out a small gain for the week, but the trading action during todayâ€™s session
indicates that it may be overbought. Following a strong overnight surge to the
upside following the Fedâ€™s discount rate hike late Thursday, the Dollar topped
early in the trading session then struggled to stay positive the rest of the
By mid-session it looked as if traders were shrugging off
the Fedâ€™s discount rate hike.Traders seemed
to be treating the action by the Fed as something the central bank had to do to
encourage banks to borrow from the private sector. At the start of Fridayâ€™s
trading session, investors reacted as if the Fed had begun to tighten its
monetary policy. This was not the case, however as the Fed reiterated its
position through the media that interest rates will not rise for an â€śextended
To recap the week, the Federal Reserve hiked the discount
rate 25 basis points to 75 basis points late Thursday, sending the U.S. Dollar
sharply higher. This buying spree spilled over into the overnight trade pushing
the Dollar Index closer to the all-important major 50% level at 82.63.
The discount rate hike by the Fed was implemented to
encourage banks to borrow more from the private sector. This move did not
reflect a change in monetary policy however despite market reactions and
analyst commentaries to the contrary.Some had interpreted the action by the Fed as a move towards
monetary-policy normalization although the Fed insisted this was not the case.
As far as the Fed is concerned, its official statement is that interest rates
will remain low for an â€śextended periodâ€ť.
What it could mean is that the Fed is comfortable enough to
begin hiking rates although it is not a change in monetary policy. In addition,
I think it sends a clear signal that the emergency supply of liquidity that
helped fund the economic recovery is over. It could also be interpreted as a
psychological move by the Fed for investors to get ready for the future course
of monetary policy.This action by the
Fed basically signaled that future rates are more likely to go up, rather than
stabilize or go down.
Some analysts called the move by the Fed a surprise.The timing may have been a surprise, but a
discount rate hike was mentioned twice by the Fed during the last two weeks. In
Bernankeâ€™s testimony to Congress on February 10th, he said the discount rate
would have to be raised â€śbefore longâ€ť.The FOMC minutes released on February 17th stated that a discount rate
hike â€śwould soon be appropriateâ€ť. As far as the timing is concerned, it looks
as if the Fed wanted to separate the hike from its normal FOMC activities in
order to emphasize that this hike was not a change in monetary policy.
Stock traders caught on quickly to what the Fed meant with
its discount rate hike. The strong rally in the equity markets helped drive up
demand for higher risk assets. The Dollar began its topping process early in
the trading session just after the EUR USD bottomed.The Greenback started to break as
profit-takers took over while the Euro turned positive.
The EUR USD posted a daily closing price reversal bottom.
This potentially bullish pattern could trigger the start of a near-term
short-covering rally if confirmed on Monday. The first short-term objective was
already reached at 1.3615, setting up a further rally to 1.3656.
A rally through 1.3656 could prove interesting. This will
mean that upside momentum is building which could trigger a further rally to the
last main top at 1.3788. A rally through this price will turn the main trend to
up and set up the possibility of a huge rally back to 1.4011.
This may sound improbable, but there are a record amount of
shorts in the market according to the CFTCâ€™s Commitment of Traders Report. If
some event happens that spooks the weaker shorts, then this scenario could take
place. Last week it was reported that China
had bought Euros so additional buying activity by these two nations could be
the catalyst needed to trigger a short-covering rally. Furthermore, an
injection of cash by the European Union or the International Monetary Fund into
will also drive shorts out of the Euro.
The GBP USD started the day sharply lower after a worse than
retail sales report. This report was another signal that the U.K. economy was falling further behind the U.S.
economy.If the Euro rallies, traders
may begin dumping on the British Pound. Oversold conditions could trigger a
mild short-covering rally next week before this market moves lower once again.
A rally in the Euro will help pressure the USD CHF. This is
because it is diminishing the chances of another round of intervention by the
Swiss National Bank. Fridayâ€™s closing price reversal top is a strong sign that
the selling is greater than the buying at current levels.
The hike in the discount rate by the Fed has caused Japan to lose
its short-term interest rate advantage against the U.S. Dollar. This has turned
the Japanese Yen into the main carry trade currency once again. The daily chart
indicates the USD JPY is overbought, but the weekly chart indicates more upside
The weakening Dollar triggered a turnaround in the crude oil
and gold markets on Friday. The subsequent rally in these two markets helped pressure
the USD CAD to its lowest level in 4 weeks.
Strong demand for equities and commodities helped to boost
interest in higher yielding assets. This triggered strong intraday rallies in
both the AUD USD and NZD USD.
Forex Trading News
Daily Forex Market News Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Forex News Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."
Actionable trading levels delivered to YOUR charts in real-time.
Tue 17 July 2018 AA 08:30 GB- Employment A 13:15 US- Industrial Production AA 14:00 US-Powell Testimony Wed 18 July 2018 AA 08:30 GB- CPI A 12:30 US- Housing Starts/Permits AA 14:00 US-Powell Testimony Thu 19 July 2018 AA 1:30 AU- Employment AA 08:30 GB- Retail Sales A 14:30 US- EIA Crude A 12:30 US- Weekly Jobless Fri 20 Jun 2018 A 12:30 CA- CPI/Retail Sales
John M. Bland, MBA co-founding Partner, Global-View.com
Global-View Affiliate Program
We are starting an affiliate program to market some of our products.
Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.
Put the word "affiliate" in the email subject line.
Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.
looking for your first broker or do you need of a new one? There are
more critical things to consider than you might have thought.
We were trading long before there were online brokers. Global-View
has been directly involved with the industry since its infancy. We've
seen everything and are up-to-data with recent regulatory changes.
The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.
The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.
Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.
The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.
Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.
Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.
Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.
WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES
CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN
EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE
PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE
INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC
REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL
SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR
SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.