The week of April 26th to May 1st is expected to be volatile.

Three major economies in the world are giving out important economic numbers.

On April 29^th, the US is giving out its Gross Domestic Product Annualized and is expected to be at 1.1%. That is lower than previous 2.2% from March 27^th. Latter on the day, the FED is expected to give it’s interest rate decision. Economist and investors are waiting for an increase in interest rate by the FED. As an economist, I am planning accordingly and going to invest with that in mind. If we get good numbers from GDP and an increase in the interest rate, it is going to make the US dollar appreciate. The pairs that I am focusing on are the EURUSD, USDJPY, and the AUDUSD. If the GDP numbers are not good and the FED decides to leave it’s interest rate at .25%, the US dollar is expected to depreciate.

The BoJ is giving it’s interest rate decision on April 29th and is expected to be at 0.1. The BoJ hasn’t said anything about increasing or lowering their interest rate. According to the BoJ economic plan, their interest rate is going to be left at 0.1 for the near and long term future. That is because the BoJ is still depreciating the yen to increase inflation. Japan was in deflation and has implemented economic policies to increase inflation and thus increase consumption. An increase in the interest rate would not help in increasing inflation, so the interest rate for Japan is expected to stay the same.

On April 30^th, German and Italian unemployment rate are going to be given. German unemployment rate is at 6.4% and is expected to stay at 6.4%. The German economy is one of the top performers in Europe. On the other hand, Italy’s unemployment rate is at 12.7%. There is no expectation for what the new unemployment rate is going to be for Italy, but it would not diverge much from it’s current rate of 12.7%. Latter on the day, the EU is giving out it’s CPI index and is expected to be at 0%. That is going to be 0.3% higher than previous CPI of -0.3%. This CPI numbers from Europe are not good. These are numbers of deflation in the economy. Japan was in the same situation until the implementation of QE and that is why the ECB has the same economic plan. QE has helped Japan get out of deflation and thus is expected to work for the Europeans as well. That means that the euro is expected to depreciate just like the yen did.

Total gains: $140,335. Manage to get $2,334.6 of gains since April 22. At the moment my gains from open positions are around -11,000. I am hoping that this week will see the USD pattern to reestablish and turning the -11k into positive. Open positions that are EURUSD - Short, EURAUD - Short, EURJPY - Short, USDJPY Long, AUDJPY Long, and AUDUSD - short. 

Selected prices for Wednesday, April 22, 2015 at 9:55pm EST.

EUR/USD: Buy: 1.07085 - Sell: 1.07082

AUD/USD: Buy: 0.77486 – Sell: 0.77482

USD/JPY: Buy: 119.935 – Sell: 119.932

USD/MXN: Buy 15.43567 – Sell: 15.42810

Since the beginning of April the US Dollar has been stuck in the high 90s. DXY, which measures the US dollar against ten major currencies, hit the 100 mark and bounce back down on the week of April 12th – April 19th.  At the moment 9:08PST of 4/22/15 DXY is at 98.14.

The US dollar is still bullish, but DXY seemed that it hit resistance at the 100 level. It is normal for currencies or human involve indices to hit resistance or support at a psychological level such as hundreds, tens, fives, etc. Having said that, it is wise to keep an open opinion on whether the trend has stop for a reversal. If the latter is the case, then we need to ask for how long or whether a bullish trend is appropriate.

It is my own personal believe that the USD has hit a resistance point, but the bullish trend still applies. This is because the FED is still planning to increase interest rate. Which historical data has showed that and increase in interest rate creates demand for the currency. The US economy is still doing better than the European. The ECB is still implementing QE, which would end by September 2015. Japan is still under QE, which will end in 2016. The US business cycle is at it’s expansion level. This creates an increase on investments in securities and thus an increase in foreign net investment in the US, which leads to a demand of the dollar.

For the immediate time it is my believed that the DXY will linger around the 90s or higher 90s.  If not, it is going to continue with its bullish trend. For the long term time it is my believed that the US dollar would continue its bullish trends until economic indicate otherwise.

For the week of April 19 – April 26, I’m looking out for new Zeeland is going to give its CPI, RBA is going to give its CPI, China is giving PMI, German and French are also giving PMI. With this information and other inflationary information from other countries I am going to gage whether the price of goods and services are still depreciating and invest accordingly.

Total Gains for April 22, 2015: 138,000.01 an increase of 5,747 from April 8^th which was the previous post. 

Wednesday, April 8, 2015

At 10:49 PST the U.S. Dollar index DXY is running at 97.81. It is down -0.09%.

This are selected rates at 10:52pst,

EUR/USD - 1.08143 sell, 1.08147 buy.

AUD/USD - 0.77032 sell, 1.08147 buy.

USD/JPY - 119.891 sell, 119.894 buy.

AUD/JPY - 92.354 sell, 92.354 buy. (Difference between the sell and buy prices is call the spread, notice that audjpy has a spread of 0. This is a good spot to place a trade if it is at a good position on the trend.)

The trends that I wrote before still stand. The EUR continues to look like a down trend with the USD an uptrend. The FED is still planning to increase interest rate the big question is when. By all cost, economists predict that in the near future. This will cause the US dollar to increase in value.

The ECB is till under QE. QE is expected to last until September 2016. That means the EUR has more to depreciate. People are looking for the interest gains. Interest gains are the least ‘riskier’ of investment. This will also cause the AUD and other emerging markets currencies with higher yields to appreciate. I would stay out of placing a trade with a higher yield currency against the USD. That is because the USD is expected to appreciate and that would make the other currency to depreciate. I would use other pairs like EUR or JPY against a higher yield currency.

Total Gains 2/1/14 - 4/8/15