Daily Spot: Currencies

A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]

Dollar Basket Dec (DXZ) Having dragged a 1-2 day correction into 2-1/2 days, A recovery Monday wasn’t likely. So the open’s gap up quickly peaked, and was retraced to fill the gap back to Friday’s close. Now a more substantial and durable recovery would be credible, but might not begin until Wednesday’s open.

Gold Feb (GCG) Despite holding at its 1407.00 bounce target through Friday’s close, Monday’s open gapped up and extended higher. The intraday extension was retraced, so buyers did not gain traction for their efforts. But sellers have yet to exploit this, and can regain traction only by gapping down Tuesday. Otherwise, extending the rally would next target new highs at 1436.50.

30-year Treasury Mar (USH) Monday’s opening gap up consolidated briefly at 124’18 before firming into the noon hour. It was an inside day (contained entirely within the prior day’s range) to indicate its sponsorship was weak hands. It trended up, indicating that the weak hands are optimistic, which is bearish from a contrarian perspective. The pattern remains likely to resolve down and resume the decline..

Crude Oil Jan (CLF) A gap down recovered to probe fresh highs, then reversed back under the open’s low. This is the basis of a Pivot Reversal setup, but it ultimately failed to form all but the final element by recovering into the close. A failed sell signal becomes a buy signal, making higher highs likely. The setup isn’t ideal because of Sunday night’s higher highs, so failing to maintain higher highs at Tuesday’s close would be bearish.

Natural Gas Jan (NGF) Unlikely to begin trending from a standing stop on Mondays, gapping up was suspicious after Friday’s ranging. In fact, the session only ranged narrowly after gapping up. The gap back down to Friday’s close should be filled, but the pattern remains likely to launch a new rally leg.

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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Softs (Fri, coming).