USD Trading Outlook (29-01-2014)
Currencies
- The euro (EUR) continues to slide lower as volatility remains low. The single currency, now trading at 1.3660 against the dollar had found earlier support at 1.3629. Traders are looking ahead for the Eurozone money supply data release at this morning.
- The US dollar (USD) has sustained its rise against the Japanese yen (JPY) while pushing even higher. The greenback rose from 102.07 at the beginning of the week to 103.30 this morning. The FOMC statement this evening will remain the highlight of the today’s news as investors will be listening out for the future of US monetary policy.
Equities
- US Tech (NDQ), the 100 largest US tech companies, have rebounded from yesterday’s low of 3476 up to 3519. The index has seen volatility pick up as tech giant Apple missed analyst estimates.
Commodities
- Heating oil (HEO) prices continue to rise from 2.9550 to 3.1308 as cold spells flock North America and Europe. While energy prices have remained range bound, the short supply of heating oil has pushed prices higher.
Mover & Shaker with forex options
- Gold (XAU) found short-term support above 1250 ahead of today’s FOMC statement. As growth in the US has picked up but not at the required speed, there may be voices of consideration over last month’s announcement by Ben Bernanke to taper quantitative Easing by 10 billion per month.
- Options traders may consider constructing a Long Straddle on Gold if they expect volatility to pick up.
- A Long Straddle can be constructed by purchasing an at-the-money Call and an at-the-money Put on gold.
