Market Review of Wednesday: There was no real progress yet on the fiscal cliff in the evening. U.S. stocks were affected and fell, the Dow Jones, Nasdaq and S&P fell 0.74%, 0.34% and 0.75% respectively. Commodities: gold, and silver fell across the board. Before closing, part of the decline recovered. Crude oil continued to rally yesterday. With respect to currencies, the change in late market sentiment resulted in the European currencies to finish lower. Commodity currencies did not change and remained vulnerable all day. The yen was a day of consolidation.
Posted By:
Chen Jingquan
Chen is a popular Forex Analyst in China. He setup his own financial consulting firm back in 2005 and started writing financial reports and analytical papers for various Chinese financial websites in 2007. He became a famous forex analyst in 2008 and a frequent guest in various forex seminars and interviews, including exclusive interviews held by CCTV finance channel, Hexun.com, Sina Finance, Sohui Finance and EastMoney.com
Contrasts: Longer-term versus Near-Term Dollar Moves
The U.S. dollar is at the heart of many forex trades and the price action longer-term with the prospect of a winding down of Qe is bullish but the recent transition in the trend shows that the problem is not whether QE will end but when and until that is know, the U.S. Dollar could continue to chop sideways.
The problem is that the dollar’s uptrend is no longer valid and to expect higher high and higher lows in this environment will be instead met with the volatility and unpredictability of a distribution market trend.
Raghee Horner