The Forex market is in a funk
of indecision at the moment. Typical of the difficulty most pairs have in
finding direction is Cable, or the pound Sterling against the US dollar (GBPUSD),
for which it has proved impossible to refrain from hugging the Monthly 200
period Simple Moving Average (SMA) (see chart above) for some time. We have
previously alluded to the significance of this price level in Technical
Analysis terms. See “British pound
could push the boundaries”.
Elsewhere, the market is
dominated by a wait-and-see attitude over the upcoming referendum in Crimea , due to take place this coming Sunday. Most
Western leaders have made noises about making Russia pay for this intervention,
but Vlad Putin seems to be willing to press ahead and rely on the Machiavellian
calculations he
presumably has made about NATO’s non-existent appetite for armed
conflict and Europe’s, and in particular Germany’s, reliance on Russian gas for
its much of its energy needs.
Hopefully they will sort it
all out and we can get back to commenting on the US economic upturn, which is
now backed not just by good employment numbers but also by a rise in retail
spending, which has just been announced, the situation in Oz and New Zealand,
on which we remain well focused, and the likelihood or otherwise of the Bank of
England to follow the lead of our Kiwi friends and raise interest rates, sooner
rather than later, among other things.
Chinese apprehension
Talking about Australia and New
Zealand , it is worth noting that all might not be going as
swimmingly well in China ,
those countries’ biggest trading partner, as might be thought by many.
The Dow Jones Newswire has
recently succinctly captured much that should concern us about The People’s
Republic:
“China unveiled a raft of data that
showed slower industrial and retail activity in the first two months of the year,
the latest evidence to suggest the world's second-largest economy is losing
steam.
"This is terrible,"
Liu Li-Gang, a Hong Kong-based economist at ANZ Bank, said. "I wasn't
expecting high figures, but this is worse than I thought."
Industrial output rose 8.6
per cent year-over-year in the January-February period, down from a 9.7 per
cent increase in December, data from the National Bureau of Statistics showed
Thursday.
The rise in the two
months--combined to adjust for distortions from the Chinese Lunar New Year
holiday--is the slowest since 2009.
Growth in fixed-asset
investment also eased to 17.9 per cent year-over-year, the weakest pace since
2002, down from 19.6 per cent last year as a whole.
While activity continues to
expand, the pace of growth is poor by Chinese standards. It now seems unlikely
that economic growth in the first quarter of this year will match the 7.7 per
cent year-over-year rate logged in 2013”.
Happy Saint Patrick’s Day
Next Monday is the 17th of
March, St. Patrick’s Day, and a national holiday here in Ireland . We
wish all readers a happy one.
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