Market recap for 24.09.2015
The week comes to its end, as the month as well. For yesterday we had very strong data from Europe starting IFO coming in surprisingly higher amidst the Volkswagen scandal and fears of global recession, Italian Retail Sales were positive and on the US side we had some misleading data with negative Core Durable Goods Orders, slightly lower Unemployment Claims and flat Durable Goods Orders, New Home Sales noted a jump. Natural Gas Storage showed oversupplied value. Yellen gave out a speech in which at the end she faltered during the speech and had to search for medical attention. It is not easy to carry the weight of the world and its economies on your shoulder... She noted several points:
- Still slack, but labor market made considerable progress
- Risk inflation expectations are monitored and expected to downside, warrants ease
- Below 2% inflation likely due to transitory factors
- Most on FOMC "including myself" expect 2015 liftoff
- FOMC views may change if economy "surprises us"
- Economy "not far away from full employment"
Probability for a move: Meeting - 28.10.2015 - 18.0% chance. Meeting - 16.12.2015 - 41.0% chance. Meeting - 27.01.2016 - 49.2% chance.
So the dollar took a beating yesterday. With the Dollar Index closing lower for the day, but my views remain bullish for the USD until the end of the year. With the climbing rate given by the bulls, the Index will go up to 96.8 and most likely to 97.80.
The euro jumped of course against the dollar and spiked right at 1.2897 for a drop down back to the levels around 1.11436. The long perspective - 1.10767, then 1.10166 on the daily trend line and if broken - down below 1.10.
Pound moving lower from 1.52565, the price is distancing itself rom the support and it makes its move to 1.51697 and if broken there, price will go down to 1.51344 and 1.50866.
The dollar did touched 1.33686 and even 1.34211 against the canadian dollar and the price stalled, but I think the price will test these levels again and move higher.