Equity market continued to trade sideways on Friday ahead of the G20 meeting on the weekend in Moscow. Now that the meeting is behind us, we shall see if the market can move out of its current trading range.
For NQ support is at 2760, resistance is at 2780.
-- Bullish above 2780
-- Bearish below 2760
-- Bullish above 2780
-- Bearish below 2760
As expected there was no consensus on what to do regarding currency wars. There is NO mention of Japan or Japanese policy of rapid yen devaluation, as it is the US Federal Reserve engineered policy in order to fund the ever-growing US budget deficit. For now funds can aggressively short the yen (borrow yen) and long the US dollar (by buying US treasury), and not worry about the downside risk, at least not worry for a while if the the Fed has its way.
But as with any market manipulation, it can only go on for so long, sooner or later the trade will be reversed, and reversal can decimate (collapse) the USD in a hurry. But for now, long dollar and short yen is a sure winning trade.
As you can see below, the USD has rallied more than 15% against the Yen over the last three month.
FRANKFURT (MarketWatch) — The Group of 20 has spoken, and it has effectively proclaimed that it’s more afraid of stalling economic growth than overheated rhetoric about the threat of a so-called currency war.
In the statement issued Saturday, G-20 finance ministers and central bankers effectively told Japanese Prime Minister Shinzo Abe to go ahead and pursue policies that will result in a weaker currency — provided that he doesn’t actually talk about the level of the yen
