By Steve Saville
[This is a brief excerpt from a commentary posted at TSI last week]
In the 2nd July Weekly Update we discussed the risk posed by the recent weakening of China’s currency (the Yuan), and commented: “We won’t know for sure until China’s central bank publishes its international currency reserve figure for June, but the recent weakening of the Yuan does not appear to be the result of a deliberate move by China’s government.” We now know for sure — the Yuan’s pronounced weakness during the month of June was NOT the result of government manipulation. In fact, it can be more aptly described as the result of an absence of manipulation.
We know that this is so because of what happened to China’s currency reserves in June. As indicated by the final column on the following chart, almost nothing happened (there was no significant change). This means that China’s government made no attempt to either strengthen or weaken its currency last month.
Continue reading No Currency Manipulation By China’s Government, Yet
The June Dollar closed higher on Friday while extending this year’s trading range. The high-range close sets the stage for a steady to higher opening when Monday’s night session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. From a broader perspective, June needs to close above 90.49 or below 78.83 are needed to confirm a breakout of the aforementioned trading range and point the direction of the next trading range. First resistance is the 38% retracement level of the November-February-decline crossing at 90.35. Second resistance is the 50% retracement level of the November-February-decline crossing at 91.13. First support is March’s low crossing at 88.53. Second support is February’s low crossing at 87.83.
The June Euro closed lower on Friday. The low-range close sets the stage for a steady to lower opening when Monday’s night session begins trading. Stochastics and the RSI are turning neutral to bearish signaling that sideways to lower prices are possible near-term. If June resumes the decline off March’s high, the 50% retracement of the November-February-rally crossing at 121.97 is the next downside target. Closes above April’s high crossing at 124.68 would confirm that a short-term low has been posted. First resistance is March’s high crossing at 125.54. Second resistance is February’s high crossing at 126.58. First support is the March 1st low crossing at 122.54. Second support is the 50% retracement level of the November-February-rally crossing at 121.97.
Continue reading Currencies
By Kevin Muir
I was rummaging through the Commitment of Traders (COT) data recently and was struck by the number of futures contracts with record speculative positions.
Take a gander at the Euro currency net speculative position.
Continue reading Timing the Consensus Fade