Dollar Index Trading

The dollar index is much like any stock market index and is conceived from a group of currencies valued against the dollar itself in a price weighted format. The forex currencies involved are the Euro,  British Pound,  Japanese Yen, Swedish Krona, Canadian Dollar and the Swiss Franc. However there were far more currencies in the European Union before the establishment of the Euro single currency, the Euro carries the greatest price weighting in the dollar index which is understood by traders, which is 57.6% of the entire index with 13.6% to the Yen, 11.9% to the Pound, 9.1% to the Canadian Dollar, 4.2 to the Krona and 3.6% to the Swiss Franc.
The contract is called  the Dollar Index Futures and the trading symbol is DX. The contract itself trades on ICE exchange Intercontinental Exchange and is valued at any given time as shown: $1000 x The Index Value.  This would be an example if the DX was trading at 80.89, this would make the value of 1 contract to be $80,809. The margin required to trade this product on ICE, is set by the exchange itself and at the present time $880 per contract, this will give traders some leverage to trade with.  A single tick up or down is worth $5.00 profit or loss.

Dollar Index Trading

Gold and silver

Gold and silver also got a boost from continued violence in Iraq, as well as rising tensions between Ukraine and Russia. Workers at Iraq's largest refinery said Thursday that rebels had taken over most of the facility, in what has become a test of Baghdad's ability to protect a pillar of the country's oil-rich economy from a Sunni Muslim insurgency. In Ukraine, a NATO official said the alliance is seeing a buildup of Russian troops near the country's border, describing the development as a "very regrettable step backwards." Some investors buy gold in times of economic or geopolitical uncertainty, believing the metal will hold its value better than other assets.

The Federal Reserve

The Federal Reserve continued to trim its QE program, reducing the scheme by $10 billion, to $35 billion/month. If all goes as planned, the Fed could wind up QE in the fall. The Fed also hinted that interest rates will continue to stay low for the foreseeable future, which likely means that we won’t see any rate hikes before the first quarter of 2015. With regard to economic activity, the Fed noted that the recovery is continuing, but it reduced its forecast of economic growth to 2.1-2.3%, down from an earlier forecast of around 2.9 percent. The bottom line? There were no dramatic items in the Fed statement, with one analyst describing current Fed policy as “steady as she goes”.On the inflation front, CPI moved up modestly, posting a gain of 0.3%. This was the strongest gain we’ve seen since January 2013. CPI followed suit, climbing to an eleven-month high. The index rose to 0.4%, beating the estimate of 0.2%. The Fed policy statement took note of the weak inflation levels, which are nowhere near the Fed’s target of 2%.

Major currencies

The major currencies are in a holding pattern on Wednesday, ahead of today’s US Federal Reserve’s policy statement. USD/JPY is no exception, trading at the low-102 range. In economic news, the Bank of  Japan released its monetary policy meeting minutes. Japanese Current Account remained steady in May, easily beating the estimate. In the US, the Fed is in the spotlight, with a policy statement and a follow-up press conference. There are no Japanese releases on Wednesday.
All eyes are on the Federal Reserve on Wednesday, as the US central bank will release a policy statement later in the day. The Fed is expected to trim its QE program by another $10 billion, which would reduce the asset purchase scheme to $35 billion/month. The big question is when the Fed will raise interest rates, but Fed chair Janet Yellen is unlikely to shed much light on that issue. If, as expected, QE is wound up in 2014, we could see a rate hike in the first half of 2015. However, cuts to QE are dependent on the health of the US economy, which continues to move in the right direction, despite some bumps in the road.

GBP/JPY Daily,, EUR/USD Daily

 GBP/JPY  Daily
14::15 GMT - Another balanced range day was been trading into this pm. but GBP's just now started to run at the recent 173.35 high to        threaten  breakout at both the Jan-May overhead trend and at previous (Jan-May) highs, looking for a significant breakout.  In that event  the obvious target is the 174.85 YTD high. Cut back  through 172.50 today/Wed. cancels.
 EUR/USD   Daily
14::30GMT - Though there has not been much follow through s/term,  balance of risk has probably switched to the downside with the break  of 1.3540. Lower reference area comes at recent lows at 1.3502/10 then 1.3475/85.  Res. is  at 1.3580/87

Australian dollar

The Australian dollar has posted losses on Tuesday, as the pair trades in the low-0.93 range early in the North American session. On the release front, the RBA released the minutes of its last policy meeting, and New Motor Vehicle Sales posted a modest gain of 0.3%. In the US, Building Permits softened in May but CPI releases beat their estimates.
The news out of the US was mixed on Tuesday. Building Permits dropped to 0.99M, well below the estimate of 1.07M. On the inflation front, CPI moved up modestly, posting a gain of 0.3%. This was the strongest gain we’ve seen since January 2013. CPI followed suit, climbing to an eleven-month high. The index rose to 0.4%, beating the estimate of 0.2%. Meanwhile, Building Permits dropped sharply to o.99M, well below the estimate of 1.07M.

USD/CHF Daily 6/19

USD/CHF  Daily 6/19
13::30 GMT - Mkt. has still been unable to break higher and prices havedropped back last several hours. Initial sup. is still at Fri's low   at 0.8956 and the mkt. should rebase around there. Lower sups. are at 0.8951 then 0.8935/40. Res. is at today's high at  0.9013.N.I.

The Japanese yen has edged lower on Monday, as the pair trades in the high-101 range late in the European session. It’s a quiet schedule on Monday, with no major releases. In Japan, today’s sole event is the BOJ Monthly Report. In the US, there was good news as the Empire State Manufacturing Index posted another strong reading. Capacity Utilization Rate and Industrial Production met expectations. There were no surprises from the BOJ, which released a policy statement on Friday. The central bank said expansion of the monetary base would continue at its current level of JPY 60-70 trillion per year. This follows remarks from BOJ Governor Haruhiko Kuroda last week, who noted that the easing measures have led to the economy moving in the right direction. However, the monetary moves have hurt the yen, which continues to trade at very high levels against the dollar, and this trend is likely to continue.