Daily Spot: Currencies

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

Dollar Basket Mar (DXH) Bottom fishers have been deep-sixed. None of last week’s three lower lows was recovered, only retraced, reflecting denial and ill-timed optimism. Currencies often duplicate Friday’s price action on Monday. So, the drop extended more substantially into the new week.

Friday’s close was a new breakout, so Monday’s lower close was its confirmation. A recovery attempt would be doomed to failure before reaching its 77.25 and 76.05 targets.

Gold Feb (GCH) One target down. Next target further down. An otherwise uneventful day later dived after the pit close. The next lower target at 1333.00 was fulfilled. The next lower target is 1325.00 Bouncing to 1341.00 first would help to refuel for testing 1320.00, too.

30-year Treasury Mar (USH) Seeking the safety of higher ground. It was worth a try ahead of this week’s heavy econ calendar. But Friday’s bounce didn’t create a strong base, which tried anyway to extend higher Monday. And the follow-through tested critical resistance at 120’14 without closing above it. There is no reason to further delay resuming the decline, and plenty of news coming to trigger it. Closing Tuesday under 119’17 would not be surprising.

Crude Oil Feb (CLG) Stretching credulity. Monday’s gap down slid to fresh lows, and almost as quickly stopped sliding. So did Thursday’s drop, which has not been corrected in the interim. This is the same sponsorship, and it should be tiring. Recovering 88.60 would trigger a corrective bounce targeting 90.80 before resuming the drop to 84.00.

Natural Gas Feb (NGG) Like taking off a band-aid. Monday’s pre-open highs up to 4.88 were retraced before the open. An intraday drop attacked 4.55, setting up to fill the outstanding gap back to 4.40. The fast that it can be done, the better chance for recovering, and the better chance for a recovery to be aggressive. Closing under 4.40 would trigger another downleg.

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