ON THE USD & ROLLER COASTER RIDE FOR THE DOW
With China throwing in the mix of a 2% devaluation a new set of currency war are present particularly in the Foreign exchange market. Volatility in stocks and the FX market can be seen and obviously felt by investors as uncertainty to curb a declining China market will take its toll once the right opportunity comes into play. The Chinese government would do everything to tame and take control of its flagging market where exports have shown its weakness in the first place aside from the property market.
Although, one thing is for certain now is that the weakness of the US Dollar is reflected in the current levels trading below the 97.00 basis point have justified our market call supporting the three technically motivated chart formation we have shown on our market view analysis dated the 7.31 towards the 2nd of August, 2015 (Video support below).
Contrary to its major trend of the USD; a collective effort of short-sellers and short-covering activities are being traded as of this writing. Expect daily pullbacks in the currency pairs across the board during the daily session moves. The ill-effects of China's move have dampened bullish traders on the USD as early as today's trading session in the US market. Spill over effects of trading would continue towards the Asia and European trading sessions before the week is over and affecting USDJPY and Yen related crosses at this junction versus the European majors included. Not to mention, the continuing Dark clouds on stocks that may eventually trigger a long standing correction once 17k is breached. Watch for the market behavior on all markets before making a serious trade execution to avoid unnecessary losses.
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