Attempting to make sense of the movement in the currency markets in today's session can be very confusing. Case in point? The Euro/Dollar. A report by the OECD, the Organization for Economic Co-operation and Development, warned that tapering of the bond buying programs (monetary easing) by various Central Banks, could result in a slowdown in global growth. It singled out the Euro-Zone as a region that could be most impacted and consequently lowered its forecast for that region's growth.
Normally, that would have been enough to put pressure on the Euro. No so today! Today seems to be a case of large speculators squaring positions ahead of this month's end. Since everyone and their dog has been long the US Dollar and short nearly every other currency on the planet, we are seeing a bit of an unwind occurring which is taking the Dollar lower, especially given the fact that the equity markets are under pressure today. That too might be a case of end-of-the-month position squaring.
Trying to read too much into price action at this time of the month can be rather futile. I am more interested in seeing how things close the week this Friday instead. Nonetheless, if we can any breaches of chart resistance or support levels, no matter what the cause, we could see additional price volatility.
Speaking of price volatility, has anyone seen the Volatility Index lately? Check it out....What I find rather fascinating is that lately, the VIX has actually been moving higher even as the stock market has been making one new lifetime high after another on an almost daily basis. Perhaps, even some of the perma equity bulls are beginning to wonder if this bubble can keep inflating indefinitely!?
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
Trader Dan's Work is NOW AVAILABLE AT WWW.TRADERDAN.NET