OFTEN referred to as the “fear index” the volatility index, or Vix, is a measure of investor sentiment. As it rises from its lows, a higher reading points to increasing concerns and uncertainty. ETX Capital is quoting 30.20-30.35 for the September contract.
Cable has struggled to break new ground to the upside and technically, it looks like any short-term rallies will be sold. Key resistance is up around $1.5800-25, with stops building above $1.6000. ETX Capital’s current spread on cable is $1.5576-$1.5582.
The yen has been consistently performing well against the dollar, and over the last few weeks the dollar-yen rate has been flirting with going south of ¥85, with the minimum reached at ¥84.70. Trading against a trend this strong is risky, so it’s wise to maintain a short position. But if the market goes above ¥86.50, it could be the time to buy. Cantor Index offers a spread of ¥85.44-¥85.46.
Dollar-Swiss franc has been range-bound between SFr1.0350 and SFr1.060 for a month now and looks like it is trying to establish a bottom around the SFr1.0360 level. Recent patterns suggest we may see a short-term move back to SFr1.050 area, which looks like an area to book profits or even consider a short trade. Spread Co offers a spread on dollar-Swiss franc of SFr1.0442-SFr1.0445.
Against the euro, the Swiss franc has traded back near to levels seen in July, with CMC Markets offering a spread for euro-Swiss franc of SFr1.3405-1.3408.
Despite the curve ball of the worse-than-forecast German ZEW reading of consumer sentiment for August, the single currency is still gaining ground over the dollar. Eurozone inflation remains far from weak, while the US economy edges ever closer to the abyss of a double-dip recession, so it seems an obvious conclusion to draw that European Central Bank yields will start to improve first. This in turn should keep the euro relatively favoured and the current IG Index price on euro-dollar is $1.2874-$1.2875.