October (WK2) Market Update

With still no decision regarding a clear direction from the currency market but finally something happened… A very weak US dollar was seen all over our charts starting in a very shy way on Monday but resuming on Tuesday and continuing for the whole week. The ‘Asian’ pairs reflected this in the clearest way with the Australian and the New Zealand dollar seeing gains of more than 400 pips for the last 2 weeks against the American currency.

The British sterling also lost its value against most of the other main currencies – AUD, CAD, NZD – showing clear signals of weakness although the GBP:USD has risen about 200 pips this week.

As for the Indices, in Europe prices showed some recovery and went back to the upper level of range started in August. Same patterns were seen on the US indices with NASDAQ, S&P and the DOW regaining a lot of the value lost last week.

On the Commodities, the surprise came from Crude. Finally breaking the 45 level were price has been stuck from the last weeks and rising to 50 usd per barrel now showing some decisive action. We will need some bigger moves to start making assumptions though… As for Gold also retesting the 1170 level from August yet still holding within the same range.

 

EFFECT OF THE NEWS LOOKING FORWARD

A very slow start of the week is expected with the bank holiday in Japan, US and Canada on Monday. On Tuesday we will know the numbers of the US Federal budget. For the rest of the week it should be a quiet one as there aren’t any major announcements. On Friday the JOLTS jobs numbers from the US are always a concern if there are any significant between the expected numbers and the actual results.

After some (finally!) moves this week on the currency market we are hoping to see the transaction volume increasing and leading the charts to a clear direction. This will either become a sign of a definite break of the overall trends coming from last year or a long term indecision period before everything returning to ‘normal’. Recent US dollar weakness is indicating the first

On the Indices side there is still reason to believe that the short trends might be about to pick up once again but we are still holding on the sidelines and waiting for price to lead the way. Any break of the latest lows should trigger very interesting moves towards the downtrend…

As for the commodities, price is still within the ranges from previous weeks so we are looking forward to see if the overall downtrend on Gold Silver and Oil start once again.