As speculative traders/ investors of European majors have been squeezed with the roller coaster ride between institutional participants. With the markets ability to find bull and bear spreads where the volatility index continuously increasing daily; the battle between bull and bear traders in Europe have tighten their grip with investors in the North American sessions even after the Fed willingness to stay its course for rates lower until 2013.
Renewed Bond purchases have been the norm for the market investors contrary to the S&P's downgrade for the US; thus pushing the USDX to another rally after touching a 73.82 low and currently reaching a 74.75 lower high compared with the previous 3days high of 75.38. However, what is equally important is the ability of the USDX to stay above the 74.40-75.10 range for the week ending Aug.12 and the coming weeks ahead. These are the key levels to watch for the US Dollar Index; while the Gold prices is currently making a new high at the USD1797.87 as of this writing.
Apparently, with the Dow turning south from a positive tone earlier have been a contributory factor whereas investors shift funds as the continued uncertainty continues. Meanwhile, to top is all is the current concern on French banks as concerns on their huge debt and raised concern by the credit rating of the country which led to bank shares to plunge in double percentage figures.
The EURUSD and GBPUSD are currently headed lower the same manner where they came from a positive tone and is at 1.4195 and 1.6175 respective levels. Other than their technical outlook; as most have noted that the daily price movements have been a roller coaster with gains and loss attributed tot he continued volatility of the market. These conditions are not for those players with a minimal tolerance levels and scalping opportunities may well be left alone for the time being. Wide price swings may be attractive for others but as we always say...the market will always be there. These are exceptional trading times and to out class these market conditions takes a considerable due diligence and strategies in place.
However, maintaining our bias sentiment further confirms the Intermediate Trend for the European majors and cross rates is still bearish. Timing market entries and exits may take a higher degree of trading skills and experience as the wild price fluctuations will trigger most stop loss as easy as it would do with profit taking.
Further gains for Yen and Swiss Franc in value is seen as it has been making from the start of the week. Even after the BoJ intervention needless to say. Would not be surprise to retest lower price levels for USDJPY rates as well. As the Swiss Franc already have done so. Lagging indicators on these market rates would not be as suitable with heavier fundamentals weigh in more than technicals. Of course, other wise risk appetite is bigger than playing a smart market well with these current conditions. Stay clear temporarilyy and wait for a good market timing on better conditions.
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