Daily Spot: Currencies
A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]
Dollar Basket Mar (DXH) Three consecutive days of narrow ranging – despite kicking off with a gap up – had failed to extend higher. A Head & Shoulders-like pattern formed. Extending higher out of the pattern required gapping up Monday. In its absence, there was a likelihood to retest 80.10 support.
80.10 support had been tested already overnight last week. Its retest would need to react up sharply to avoid a retest of prior lows. In fact, prior lows were retested down to 79.42. Monday’s close was still in the process of testing prior lows as support.
A small gap back to Friday’s 80.46 close is left outstanding. Its retest isn’t required since it was created by gapping open under Friday afternoon’s lows. But a close above 79.85 would signal momentum reversing up. A close above 80.90 is needed to signal a bigger rally underway.
Gold Feb (GCG) Attraction back to last Tuesday’s 1427.40 remained alive just for having held 1381.00 support. A close above 1398.00 is needed to signal that leg of the move underway. Monday tested 1398.00, and closed above it but didn’t trigger it convincingly. Pullbacks should now hold 1385.00 as support to avoid resuming the decline.
30-year Treasury Mar (USH) Monday’s open gapped down and eventually tested last week’s low by a 1-tick margin. That does not fulfill the minimum objective of a new low, earned by last week’s breakout and confirmation. The shallow interim bounce does suggest pessimism is approaching unsustainable levels, but a better probe under 121’27 is needed to complete the bottom. This is despite Sunday night’s 120’19 lower low, and despite the reaction up into positive territory. The reaction up might yet test 123’06-124’00 before probing the lows.
Crude Oil Jan (CLF) The attraction back up to 90.65 was obvious at Monday’s gap up. But the balance of the session faded lower anyway. The dip reacted up after nearly filling the gap back to Friday’s close.
Natural Gas Jan (NGF) Gapping up Monday introduced the same problem as last week’s gap up. Friday’s 4.42 close was retested, as was its 4.39 last relative low, and even the deepest test yet of 4.31-4.35. Closing above 4.39 robbed sellers of their traction. Now Monday’s 4.50 gap up can attract price higher. A close above 4.50 would signal a larger rally leg underway.
[/pay]
Share your questions and comments on this post in the blog, or in the chartroom…
Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Softs (Fri, coming).