US Government Vs. Economy

The New administration of President Obama has painstakingly been trying to address the priorities of the overall economy. From the various stimulus packages that they have implemented without going into the detail; have somehow worked. The overall percentage still could not be determined as issues always manage to come up.

With the "Real Estate" market as one of the economic barometers that measures how our overall market conditions and economic measures has been dragged down with the newest report of a $5.4B housing project that was endorsed to the bank creditors that financed the project in Manhattan's town and Cooper Village. Others that been before this event have contributed to the negative outlook for the overall market sentiments that still overshadows the financial markets.

In essence, these negative reports in general would be coming from the economic indicators and reports while the US administration relentless efforts to build back the economic reforms to sustain the recovery of the economy by talking and taking necessary steps and whatever it takes to help lift the status of the United States as the global economic and technology leader. That's why the Obama administration has been pushing real well on renewed energy and new technology that would bring it back to where they belong.

However, we would like to give our own version of what is currently happening in the markets price behavior in the Foreign currency market. Although, we may not be able to cover all grounds but we would like to site a short summary of our sentiments and analysis. Some may agree and disagree that trading the FX market is more on technical analysis rather base it on fundamental reports. But we would like to have a balance on all possible angles. Somehow, the most basic explanation may already be the best in our constructive conclusions.

Recognizing the in spite of these overall negative economic numbers and reports from the August of 2009 to the current news has been almost , always been a negative ill-effect for the US Dollar. However, there were real and valid signals both in price numbers and how the market has been reacting since then. Key numbers for Gold was registered at $1,226.38 high, with a corresponding low USDX at 74.21bp low. As the price range is recognized the USDX recent top at 78.81 as of last week already showed it has achieved it inital target objective. It's ladder-like formation moving forward to the North of our charts will be done exactly the way it had moved lower. As most strategist have said " in an orderly fashion ".

The contrary price movements of the USD/JPY and the USD/CHF will continue for sometime making most traders / FX investors more confused as to where the directional movement of each major pair would go to. However, these are unusual times where we would see the strength of the US Dollar will be in line more often with the strength of the Japanese Yen. As major market participants are cross trading their positions in larger amounts for the start of the year. As the cautionary measures are being discussed by the so called " Volcker's Policy " in restraining major banks to take more leverage risks in the financial markets as a whole. While indirectly having a similar effect with the CFTC's proposal of restricting leverage trading for the Forex market.

So these market behaviors are actually occurring as of this writing, which led us to share our outlook of the market conditions. Try to see and observe the price behavior of the the currency pairs made mention and judge for yourself.

Good Luck and Happy trading.