Volatility Remains High

The Political bickering in congress has led the instability on the market between bulls and bears. However, the obvious weakness of the US dollar is due to this indecisiveness of an agreement in raising the debt ceiling. Although, the repercussions towards the financial markets worldwide are known to everyone concerned. As the deadline nears this August, the market susceptible to wide price fluctuations are increasingly present. Certain surprises would occur before and after the designated time table and would make the financial market investors more jittery as well as excited for major players (institutions) participating in the current conditions. This is no place to trade for retail investor or main street speculative investors who would only get caught flat footed in their daily trades.

With that said, the USDX registering 73.52 low with an opening gap at 73.70 from the Friday closing of 74.10 basis point have shown its weakness in reaction to the stalemate not being able to reach a reasonable agreement. Although, the opening gap could be treated a long opportunity for bulls with a substantially large portfolio to take short trades and generate a short gap trade between trading sessions from Europe and the North American sessions.

As the EURUSD have extended its gains, so did the rest of the majors across the board including the Aussie and the Kiwi. The USDJPY and especially the USCHF have seen strength as the market have pushed the majors to their recent highs in value against the US Dollar. Although, the critical levels for the US Dollar is seen from its current low it now boils down to making the right choices as to which currency pair to trade with. A confirmation before a trade would be the likely choice for others as it really boils down to risk aversion and risk appetite to a certain degree for every investor and trader who would play these market conditions.

However, these market conditions are not close enough to the previous market movements when the GBPUSD moved rapidly down when John Majors walked out from the ERM, the Chernobyl accident that led Gold and even sugar to skyrocket and the worst drought from the Ohio Mississippi basin that led the soybeans market go haywire.

When all is said and done the normal market conditions would be more suitable for smart investors and taking a sideline to relax is a smarter way to go. Markets will always be there! so choose wisely!