Hello traders everywhere! Adam Hewison here, President of INO.com and Co-creator of MarketClub, with your mid-day market update for Monday, the 13th of May.
The Aussie Dollar Crashes
Today we are going to take a look at the Aussie dollar to understand why it closed last Friday at its lowest levels since June 2012. This market clearly is on the defensive as Australia re-tools its economy with a lower priced currency. By lowering its currency, Australia hopes, like Japan, to jump start its economy. A less expensive Aussie dollar should help make Australian exports more competitive and more attractive, particularly to China, which is its main trading partner.
This particular trade could be one of the best trades of 2013. If you haven't seen last week's Aussie Dollar video, you can watch it here.
The Trend Continues In The Yen
The US dollar moved to its best levels in five years against the Japanese Yen, as the Yen reached 102 early this morning in overseas trading. The Japanese Yen has been on the defensive against the US Dollar since last October, when our Monthly Trade Triangle kicked in and the Dollar began to accelerate its gains against the Yen. I believe that this market, which is very overbought, is getting close to a target zone around the 103.00 level. I would now expect the 100.00 level to act as a floor for the US dollar.
Watch Today's Video Update Here
Is The Euro Finally Ready To Move?
With all of our Trade Triangles in a negative mode for the Euro, I expect to see this market move down to the 1.2750 area before it's all over. Any kind of strength in this market will be short covering and not new buying. If we see any kind of rate cuts coming out of Europe, I would expect that kind of action to be a negative for the Euro.
The Major Trend In Gold Resumes
Last Friday, gold closed at its lowest weekly close in three weeks. I have said this before, it takes a tremendous amount of energy to reverse a market and change its trend. Gold is finding out just how difficult this task is to get back into a bullish mode. I think we will see further pressure and sideways action before gold can once again resume its upward trend. In the meantime, I would not rule out another test of the $1,300 level. We are relying on our Trade Triangle technology to tell us when the downward trend is over.
Watch Today's Video Update Here
On Investors' Minds:
UNITED STATES - Complacency, the IRS and Benghazi
MIDDLE EAST - Potential conflict
EUROPE - Another rate cut coming?
ASIA - A license to print money
THE FED - An enigma wrapped in a conundrum
OTHER - May 19th, debt ceiling suspension expire
Have a great trading day,
Adam Hewison
President, INO.com
Co-Creator, MarketClub
Adam appears frequently on the following financial news channels as a guest expert. Click on any cable logo to watch Adam's latest appearance.
