Good Morning Traders,
With a disappointing US corporate earnings result that was announced yesterday, there was a considerably unexpected drop in the USD and US stocks. All US durable goods also took a nose dive due to the release. The biggest stock that felt the drop was Microsoft that saw a 9.1 percent decline after it was doing so well until Monday’s unexpected plummet.
The drop in the USD was followed by the Federal Reserve that may hold off hiking interest rates for longer, than initially predicted, time. Today will see the release of a policy statement by the US Central Bank. There was just too much hype surrounding the greenback (USD) in the last few months – as we all know what goes up must eventually come down. This is the downfall of the greenback (USD) for the week.
With that, the euro (EUR) saw a 1 percent increase yesterday, this takes it further away from our Monday report on its 11 year low. This change in direction is due to Greece’s anti-bailout from the 19-nation currency. I also do not see a fast recovery for Greek stocks anytime soon. However the EUR may stay strong for a few more days. Things are looking up on the side of the euro (EUR). This would be my currency of choice along with the Yen (JPY) in terms of trading for this week.
Turning our focus towards the commodity markets, Crude oil rose as a result of the weaker USD. Still I feel this commodity is way too volatile at the moment to stay on the up and up. My guess is that in two more days it will reacquaint itself with the bearish trend.
Gold came down again yesterday after seeing a five month high, due to the Greece election that shrugged off news that the anti- austerity party had won elections. My view is that Gold maybe down now but it won’t be for long. This precious metal is a fighter and I foresee that this will make a turn around and become the safe haven it is known to be.
Today’s Trading Tip:
Select the ‘PUT’ on USD/EUR as I predicted yesterday, and a ‘CALL’ on JPY/USD and EUR. Just for today I would ‘CALL’ Crude. It is risky but that’s what trading is all about.
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