Daily Spot: Currencies

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

[pay]Dollar Basket Dec (DXZ) Monday’s opening gap up remained in positive territory throughout the day  (boxed red). But the market did not trend higher. A recovery would not have been credible, anyway, not until Friday’s low is probed.

While the “inefficient optimism” left outstanding the test of Friday’s low, i.e. a new low intraday, there is also the gap back to Friday’s close to be filled (circled green).

The setup is still in-play in which a probe under Friday’s 78.30 low that closes above its 78.63 high would be able to explode higher Wednesday – and presumably with better results than last Thursday.

Gold Dec (GCZ) Monday’s narrowly ranging inside day, still hovering at last Thursday’s high, further confirms Friday’s “ineffectual optimism.”

30-year Treasury Dec (USZ) Not much going on Monday, after fulfilling its potential overnight to 134’10 without following-through. The ineffectual optimism gapped up, ranged sideways, and probed the morning’s high without closing above it or above any relevant prior highs. It’s not a sell signal but not the stuff of a durable breakout rally.

Crude Oil Nov (CLX) Hit its 82.10-82.15 resistance, which pushed back. Nothing technically to undermine its ongoing potential to 83.20-83.25.

Natural Gas Nov (NGX) Monday extended down despite a lot of opportunities for buyers to gain traction. In this sense, the pattern resembles capitulation – gapping down, ranging exclusively negative intraday. It is not ineffectual optimism, but a gap up above 3.80 would form an Island.

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