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I'll be posting regular market updates from well respected Forex experts and showcasing the best Forex advice and systems, so you don't have to waste fruitless hours searching for it yourself!
Add me to your 'Favourites' now and as a special thank you, I'd like to give you 4 fantastic FREE gifts by simply entering your details on the right of this page >>>
You'll receive my 3 Part Ebook series 'The Forex Decoder' which covers everything from the history of Forex, to revealing the most consistently profitable indicators you'll need in your Forex arsenal. I've sorted the 'wheat' from the 'chaff' so you don't have to make the same mistakes as I did when I first started.
You'll also receive a copy of Mark Nelson's famous '7 Habits Of A Highly Successful Trader' which will prove an indispensible aid in your Forex career, as it has done in mine.
Just enter your details on the right and get these 4 fantastic gifts absolutely for FREE >>>
Yours 'Forexly',
Cliff
Simon Denham's Daily Market Comment
As has been proved time and time again markets can be subject to big
moves to the downside especially when all the sellers pile in and send
stock markets tumbling. Often these falls can come in twos and we had
been calling the FTSE to commence the session some 30 points lower
overnight as Asian markets joined the selling but gradually throughout
the morning our quote has recovered somewhat and at the time of writing
the FTSE is only just in the red at 5760.
The sell off yesterday showed just how jumpy investors can be and whilst we haven’t seen anything like it at all so far this year, it brings back memories of the volatility experienced back in August and November last year. Even though a big fall is often proceeded by another one, we have seen all the retracements in 2012 met by buying and considering that the uptrend seems to still be intact, this could be seen as yet another buying opportunity by the bulls. It’s when the markets are at the height of their panic mode that they have usually reached their furthest point and overnight and this morning we’ve seen some tentative buyers of the FTSE creeping in. However, the current little bout of panic mode may not be over yet as we approach tomorrow evening’s deadline for the PSI to agree to take write downs on their Greek debt.
This amongst other issues has been the trigger for the weakness in equity markets so far this week. No one seems immune to the slow down in growth across the world as we saw China downgrade its GDP forecasts at the week end and this morning Australia had GDP data for Q4 which was much lower than expected. This is an economy that has been absolutely booming and a direct beneficiary of the rapid growth in China so this morning’s figure is yet another worrying piece of data.
Investors are simply factoring in the risk of the worst case scenario, if the PSI involvement was poorly subscribed and this led to a default by Greece on its debt. Such an event would be very bad news, but even though the indications up to today have been of limited PSI, the creditors of Greece would rather see a substantial write down of their assets in exchange for other interest bearing bonds as opposed to losing the whole lot. It is unlikely that come tomorrow Greece will end up defaulting, but you have to prepare yourself for the slim chance that it might happen, which is why we’ve seen the selling across risk assets.
Of course the euro was not immune to the selling yesterday as it suffered from yet another attack by the bears. EUR/USD nearly touched on the 1.3100 mark but just seems to have found a little bit of support taking it to 1.3165 this morning. The lack of public commitment from the Greek PSI is really taking its toll on the single currency.
The dollar’s recovery against the Yen looked to have triggered a bit of a short term bearish signal as it dipped below the 200 period moving average on the hourly chart. USD/JPY is at 80.75 this morning and seems to be holding on for now but it remains well below its recent highs. We’ve seen too many times before the dollar make a come back against the Yen only for it to be short lived and so dollar bears which may have suffered a little from the recent squeeze might be positioning themselves for a reversal of the recent move, however you can only really expect that to happen if risk appetite picks up again.
Gold couldn’t hold onto the 1700 level and once it broke below its lows the flood gates opened somewhat taking the yellow brick to as low as 1662. This morning, along with the other markets, gold has found a little bit of support taking it to 1674 at the time of writing.
Brent is also perkier this morning and hasn’t really suffered the same sort of selling that other risk assets have in the past few days. This goes to show just how much the black stuff is propped up by geopolitical risk priced in. Brent is at 122.65 at the time of writing.
The sell off yesterday showed just how jumpy investors can be and whilst we haven’t seen anything like it at all so far this year, it brings back memories of the volatility experienced back in August and November last year. Even though a big fall is often proceeded by another one, we have seen all the retracements in 2012 met by buying and considering that the uptrend seems to still be intact, this could be seen as yet another buying opportunity by the bulls. It’s when the markets are at the height of their panic mode that they have usually reached their furthest point and overnight and this morning we’ve seen some tentative buyers of the FTSE creeping in. However, the current little bout of panic mode may not be over yet as we approach tomorrow evening’s deadline for the PSI to agree to take write downs on their Greek debt.
This amongst other issues has been the trigger for the weakness in equity markets so far this week. No one seems immune to the slow down in growth across the world as we saw China downgrade its GDP forecasts at the week end and this morning Australia had GDP data for Q4 which was much lower than expected. This is an economy that has been absolutely booming and a direct beneficiary of the rapid growth in China so this morning’s figure is yet another worrying piece of data.
Investors are simply factoring in the risk of the worst case scenario, if the PSI involvement was poorly subscribed and this led to a default by Greece on its debt. Such an event would be very bad news, but even though the indications up to today have been of limited PSI, the creditors of Greece would rather see a substantial write down of their assets in exchange for other interest bearing bonds as opposed to losing the whole lot. It is unlikely that come tomorrow Greece will end up defaulting, but you have to prepare yourself for the slim chance that it might happen, which is why we’ve seen the selling across risk assets.
Of course the euro was not immune to the selling yesterday as it suffered from yet another attack by the bears. EUR/USD nearly touched on the 1.3100 mark but just seems to have found a little bit of support taking it to 1.3165 this morning. The lack of public commitment from the Greek PSI is really taking its toll on the single currency.
The dollar’s recovery against the Yen looked to have triggered a bit of a short term bearish signal as it dipped below the 200 period moving average on the hourly chart. USD/JPY is at 80.75 this morning and seems to be holding on for now but it remains well below its recent highs. We’ve seen too many times before the dollar make a come back against the Yen only for it to be short lived and so dollar bears which may have suffered a little from the recent squeeze might be positioning themselves for a reversal of the recent move, however you can only really expect that to happen if risk appetite picks up again.
Gold couldn’t hold onto the 1700 level and once it broke below its lows the flood gates opened somewhat taking the yellow brick to as low as 1662. This morning, along with the other markets, gold has found a little bit of support taking it to 1674 at the time of writing.
Brent is also perkier this morning and hasn’t really suffered the same sort of selling that other risk assets have in the past few days. This goes to show just how much the black stuff is propped up by geopolitical risk priced in. Brent is at 122.65 at the time of writing.
