Dithering by the FED, coupled with associated weakness in the US dollar have both combined to provide gold bugs with some much needed good news in the last couple of week, with gold rising Lazarus like from its trough of despondency in the $1110 per ounce region, to positively sparkle at the $1190 per ounce.
Cable’s (FXB, quote) recent revival which was signalled with a two bar reversal off the strong support platform at 1.5163 came to a juddering halt today on the release of the CPI data. Until this release cable had been testing the 1.5474 area as well as the 100 ma which capped the recent rally.
So far in this morning’s forex trading session it’s been a case of selling the euro and buying the commodity dollars, with a strong move lower also in the EUR/JPY, although this bearish sentiment towards the euro has not been as strong in eurodollar.
Whenever I put the proverbial pen to paper and start to write about gold, I can already hear the chorus of dissenting voices from those traders and investors who only view their beloved metal as bullish, and can never accept the reality of what is actually happening on the chart.
For oil traders and speculators the summer months continue to deliver stellar trading opportunities, and whilst equity investors are wringing their hands, the WTI contract shows no signs of wanting to reverse just yet.
When considering the chart for crude oil, there is really only one question to answer and it is simply this – how low can it go! And to answer that particular question we need to consider the charts across a variety of timeframes.
Cable anticipating BOE by going precisely nowhere! All we can say is 1.5550 region represents strong support & is also where have the 200 ma.
Of the currencies likely to be in focus this week, I really did not expect the week to start with a further move lower for the Loonie (and the Canadian economy) which have both been badly affected by falling oil prices (USO, quote) .
