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Week ending 24 October 2008
The safe haven flow of funds, from collapsing emerging markets to the U.S., continued full strength. With the global slowdown looming bigger and rougher than previously anticipated, currency markets are equalizing from USD multi-year lows, and only the yen’s appreciation through the unwinding of carry trades could top it. The VIX [...]
Week ending 17 October 2008
Although credit markets began thawing, there is no suggestion of normalcy and economic growth continues to stall worldwide. Currencies consolidated within new levels and volatility remains high.
The Westpac-MI leading index for August fell −0.1% with annual growth slowing to 2.5%, below trend of 4.0%, and the September NAB business confidence measure [...]
The long-rumoured coordinated central bank rate cuts finally occurred but did little to calm panic-stricken markets as equities bourses around the world collapsed to multi-year lows and some required closure, with VIX registering historic highs above 70 in this Apocalypse Dow. Commercial credit throughout much of the world remained frozen, and the U.S. dollar was [...]
Trading flags and pennants by the numbers
In the forex trading market, a sharp breakout by a currency pair sometimes indicates more to come. Ed Ponsi, in his excellent manual Forex Patterns & Probabilities (Wiley Trading, 2007), likens it to galloping up ten flights of stairs in that one is likely to pause at the halfway [...]
A US$700Bn bailout package was finally passed on Friday; however, restoring normalcy to global markets will take time and liquidity remains difficult, keeping bullish pressure on USD and threatening more banks than the five that failed this week in Europe. Fundamental data reflecting a deepening of the global slowdown was mostly ignored.
The RBA meets Tuesday [...]
Support and resistance levels form when a number of orders cluster at one point on the chart, and this is particularly true when a large institutional trader, such as a hedge fund or currency manager, is entering the forex trading market with a massive order.
If the institutional trader entered such a large order all at [...]
