Daily Spot: Currencies
A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]
Dollar Basket Mar (DXH) Second time’s a charm? Friday’s gap down had extended deeper to probe the prior lows (circled green). It recovered on a closing basis to rob sellers of their traction. Extending down further Monday was unlikely, so Monday’s consolidation was appropriate in that context. A close above 79.85 (circled green) is needed to signal mmentum reversing up, and the pattern is meanwhile directionless.
Gold Feb (GCG) Down to one engine now. The month-old 1427.40 high opening gap is now within $3 of being filled. The path there is only getting more dangerous. It is a series of gaps left outstanding, narrow consolidations and shallow pulbacks that continue to reflect excessive optimism. This is no time to be getting long, and a close under 1411.00-1414.00 could end the rally. Recovering from an intraday dip into the pullback limit would launch a last upleg.
30-year Treasury Mar (USH) Detours are getting shorter. Monday’s gap down held 120’14 to remain within corrective limits, and then closed above 121’14 to signal the bigger corrective bounce was still underway targeting 123’06 and 124’00. The intraday high stopped pessimistically short of fully filling the gap back to Friday’s high, which is bullish from a contrarian perspective.
Crude Oil Feb (CLG) Almost done loading the gun, not yet triggered. Friday’s probe of new highs had spiked back down into the close to finish under prior highs. Monday, too, a little earlier and from a higher high. The pattern is distributive up here as expected. But it still needs a trigger to signal momentum reversing down, which is at least a close under 91.00.
Natural Gas Feb (NGG) Could it get more bullish? Wait, can it? Friday’s recovery back to the Head & Shoulders neckline made a test of its shoulder likely. Monday’s open gapped above it and extended to close above the pattern’s head. This recovery is no longer a secret. Pullbacks should now hold the 4.50 area, and any test of it must quickly reject the pullback to prevent sellers from gaining traction. Regardless, the bigger multi-month basing pattern that was interrupted by Head & Shoulder has confirmed exactly that, that it was only interrupted.
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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Softs (Fri, coming).