MasterForex: The US will maintain easing in the long term, and the US Dollar Index is under pressure - Foreign Exchange Simulation Trading Account

by master0722 on 2011-08-10 14:26:21

The best foreign exchange trading platform by your side: http://www.masterforex.cn/?yzforex.com

Yesterday, the focus of the market was mainly on the Federal Reserve's interest rate meeting. In the end, the Federal Reserve announced that it would maintain the current federal funds rate within the range of 0-0.25%, and stated that the risks of a downturn in the economic outlook had increased. The Federal Reserve said that economic indicators showed that employment market conditions had deteriorated in recent months, and the risks of an economic downturn had increased. The economic situation could ensure that abnormally low interest rates would be maintained at least until the middle of 2013. At the same time, it was expected that the pace of economic recovery in the coming quarters would slow down compared to previous meetings, and unemployment would remain high, for foreign exchange account opening.

Unemployment will only gradually approach the dual target levels of the committee. It was also predicted that in the coming seasons, as the rise in energy and other commodity prices subsides, inflation will slow down to meet or fall below the dual target levels of the committee, but the committee closely monitors the development of inflation and inflation expectations. After the Federal Reserve's meeting statement, risk aversion quickly declined. The US dollar index and gold (1758.50, 15.50, 0.89%) saw declines. Although the Federal Reserve did not mention the third round of quantitative easing, the market has obviously already anticipated this. According to the display of the federal funds rate futures index, the probability of the Federal Reserve raising interest rates in early 2013 fell from 38% to 20% after the interest rate decision. If there are no other major negative messages today, global stock markets are expected to continue to rebound, and the improvement in market sentiment may drive further rebounds in risk currencies, for foreign exchange account opening.

Similarly, due to the continuous poor economic data recently, Goldman Sachs has lowered its global economic growth forecast, predicting that global economic growth in 2011 and 2012 will be 4.0% and 4.4%, respectively, lower than the previously forecasted 4.1% and 4.6%. Among them, Japan's GDP for 2011 remains at a contraction of 0.8%; the GDP growth rates for the Eurozone in 2011 and 2012 were adjusted from 2.1%, 1.7% to 1.9% and 1.4%, respectively. Additionally, the GDP forecasts for the BRIC countries, which have been quite favored, also encountered downward adjustments: the GDP growth rate for the BRIC countries in 2011 was adjusted from 7.9% to 7.7%, while in 2012 it remained at the originally predicted 7.9%. Among them, China's growth rate for 2011 was reduced from the original 9.4% to 9.3%, while the GDP growth rate for 2012 still maintained the originally predicted 9.2%, for foreign exchange simulation trading accounts.

In Europe, the European debt crisis still poses significant risks. Currently, there are rumors in the market that France could become the next country to be downgraded. Since France is the second-largest economy in the Eurozone, if something happens to France, the Eurozone debt crisis might cause more ripples again; therefore, when going long on the euro, one needs to be cautious about the risk factors of the European debt crisis.

Euro/USD:

After the Federal Reserve's interest rate decision, the Euro/USD experienced a surge followed by a retreat. The EU debt crisis remains a shadow over the Eurozone. However, in the short term, the euro has shown an upward trend, but 1.4410 and 1.4530 may become strong resistance levels for the euro in the near future. From a technical perspective, one can consider buying euros around 1.4270 with targets at the aforementioned resistance levels of 1.4410 and 1.4530, setting a stop-loss below 1.4250.

USD/JPY:

After the Federal Reserve's interest rate decision, the USD/JPY further broke below the level of 77.00 before Japan's intervention, and the appreciation momentum of the yen was very strong. Unless the Japanese government intervenes in the market again, there is little force in the short term that can stop the decline of the USD/JPY. Since the Federal Reserve stated that extremely low interest rates would be maintained at least until the middle of 2013, and possibly implement the third round of quantitative easing, even if the Japanese government intervenes in the market again, it will likely be difficult to stop the decline of the USD/JPY.

From a trading perspective, one can consider going long on USD/JPY around 76, waiting for direct intervention by the Japanese government, or being a quick responder to the market after confirming the Japanese government's intervention.

GBP/USD:

The GBP/USD plunged nearly 200 points in the early session in the United States due to domestic unrest in the UK, but rebounded strongly above the 50-day and 100-day moving averages around 1.6200 at the end of the session, supported by the rise in US stocks. Today, 1.6340 has become the dividing line between bullish and bearish sentiment for the pound. If the rebound encounters resistance here, short positions can be opened. If it breaks through strongly, short-term chasing can be considered. Risk-loving investors can also look for opportunities to buy low between 1.6260 and 1.6240.

Click here to immediately open your MasterForex foreign exchange simulation trading account.