Today is probably a risk aversion day.
The EUR/USD shedded more than 100 pips as an aftermath of disappointing releases.
Similarly for the S&P 500, a test of the 1100 line seems likely as sentiments drop.
Oil dropped slightly, currently trading at around $76. As oil can be a clue to the global economy’s health, i am paying close attention to its movement.
Gold drops slightly too, trading at around $1107. Gold is rather resilient throughout the recent drops in the financial markets and this may validate that gold indeed is a investment of choice when there is uncertainty. Demands probably kept the gold’s value from dropping too much.
Just as i warned about the potential rain on the parade, it happened.
The German Ifo Business Climate came in lower than expected and lower than the previous release. This double setback is too much to bear for many investors and risk aversion surfaced. With the various strikes going on around the Euro Zone, recovery may be bogged down.
Over at the US, folks are dismay over the CB Consumer Confidence as this release suffered a double setback too. Lower than expected, lower than the previous release. Furthermore, the flames of speculation of an interest rate hike due to the recent Fed surprise discount rate hike were doused when the Federal Reserve Bank of San Francisco President commented that the US economy still needs the support of extraordinarily low rates.
Tomorrow brings us more releases to test the fragile sentiments. Featuring releases such as Industrial New Orders for the Euro and New Home Sales for the US, we need to tighten our seat belts. Furthermore, Fed Chairman Bernanke is due to testify too. Expect investors to scan, speculate, worry, over react, etc over his comments!
A bullish relief may bring us to 1.3600/80.
A clean bearish break may take us to 1.3455 again.
Ok. This is totally interesting.
I read about a guy who trades a “special” ten seconds time frame chart. I was like WHAT? Won’t it be full of false signals? This is amazing. Definitely too fast for my koala reflex! Have you heard of this before?
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