TheLFB-Forex.com A Forex Trader Portal
Market Wire Update:
Spinning Majors, Flat Trends
Forex Trader Note: Heads Up! Japanese Tankan numbers are released at 18:50 EST. This is the big one on the Japanese calendar; it is released once a quarter as a barometer of the health of the Japanese industrial economy. A miss either way on this one could set the tone for Asian equity and currency movement overnight.
Ahead of the Federal Reserve rate decision on Wednesday, we address the movement in equities, forex, and commodities in this article link. It focuses attention on the fact that two U.S. economic releases (Non-farm Payroll and Retail Sales) have lit a fire under interest rate expectancy. Is it going to be a damp squib on Wednesday at 14:15 EST?
Price action has been strange over the last two weeks. First, it was the NFP report, which despite the excellent numbers, failed to move the market anywhere that could hold. The market actually saw a short-lived sell-off in the days following the labor market report. Fast-forward a week to last Friday and the currency market entered into a strong risk-aversion mode, while the equity market failed to move, despite another very bullish report in U.S. retail sales. The big question is; why is this happening since equities should surge while the dollar tumble on signs that the economy is improving? We will get the answer this week.
Macro View:There is very weak momentum and sentiment reads on the global market drivers, and major pairs (below), even though the dollar created major waves on Friday. We need to just reduce targets and lot sizes on any forex trade taken ahead of confirmation that the dollar has topped out, or that the equity and commodity markets are ready to make a move lower. We will update as things unfold, but until the 4 hour chart reads get aligned we need to practice caution.