Wednesday, August 14, 2013

Forex FlashBeck

U.S. failed to see much growth as the Producer Price Index came out dead flat and was even negative when food and energy are removed. The numbers show that the economy is falling short of Fed target rate of 2% annual inflation which could spike more taper talk. Crude oil has been range bound and gold has seen a slight recovery but both could see significant moves once the Fed's true stance on we tapering is revealed.

The EUR/USD dropped further against the dollar even on a day when it should have rallied. The flash GDP came in at .3% growth which officially ends Europe's longest recession in decades. The problem Europe still faces is high unemployment which, like we have seen in the U.S., can lead to an agonizingly slow recovery. (see EUR/USD below)

The USD/CHF continued to rally, enhancing our gains despite the fact that the Swiss ZEW report showed increased confidence in the Swiss business outlook for the next six months by institutional investors. Though the rally doesn't allow us to tighten our stop loss we can't complain about the gains. (see USD/CHF below)

The USD/CAD bounced around before closing slightly lower. We are watching for a bounce off the trend line or a rally to past resistance and currently there is more bearish pressure so we are watching for a support bounce however it needs to occur soon because the bearishness momentum is beginning to wane. (see USD/CAD below)