Daily Spot: Currencies
A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]
Dollar Basket Mar (DXH) The Satchel Paige breakout. The inverted Head & Shoulders remains intact, and it has been productive. Fresh recovery highs have rejected the recent new lows.
But three consecutive gaps open – never closing above each morning’s high (red circles vs. green) – continue to indicate that buyers aren’t gaining traction day-to-day. In fact, Monday was “ineffectual optimism” – for gapping up, probing fresh highs, and trading exclusively in positive territory while closing negative.
Monday’s close was still in the process of testing Friday’s highs as support (highlighted pink, Happy Valentine’s Day!). The gap back to Monday’s 78.50 opening print will want to be filled eventually. Dipping first would help to ensure a recovery.
Gold Apr (GCJ) Man, these bars are heavy. Monday’s inside day trended up, which is a form of ‘ineffectual optimism.” A higher high can’t be discounted, but it wouldn’t be likely to gain traction. Testing 1376.00 would be likely to push back down. A close under 1354.00 would signal the next downleg underway.
30-year Treasury Mar (USH) A bigger bounce would be only that. Bounce potential to 119’04was finally fulfilled Monday. It was fulfilled early, without being rejected, leaving potential to 119’16. Closing under 118’00 would signal the downleg had resumed, or at least a retest of last week’s 117’00.
Crude Oil Mar (CLH) Getting close to striking oil. An early bounce above 86.00 was absorbed. Its reversal down to new lows at 84.58 confirms the downleg next targeting 84.00 remains intact. Bounces must meanwhile avoid closing above 86.00.
Natural Gas Mar (NGH) Time to throw bulls a bone? New lows on Monday naturally followed Friday’s new lows. They did not extend, and a bounce would be credible, but no bottoming pattern has formed.
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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Weekender (Fri).