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Daily Spot: Currencies – If, Then… Market Timing

Daily Spot: Currencies

By Rod David | February 28, 2011 - 7:53 pm

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

Dollar Basket Mar (DXH) What bottoms and breakouts have in common. The only thing unusual about Monday’s new low is how quickly it departed from Friday’s modest optimism. Mondays usually mimic Fridays, but Monday’s gap down only mirrored Friday’s gap up. Neither followed-through intraday.

Regardless, Feb 1’s low was probed. Interestingly, the 76.92 opening print was also the closing print. Gapping up Tuesday above 77.20 would signal momentum quickly reversing up, likely to trend up sharply intraday.

The Euro’s pattern is almost perfectly inverted from the Dollar Index, while the Swiss Franc was eerily calm and slightly lower Monday.

Gold Apr (GCJ) Lots of room for noise. Monday’s post-close action dipped briefly to test 1405.50. It held, as it must to maintain potential for noise to test 1426.00.

30-year Treasury Mar (USH) Target met, and held, but not rejected. Holding out for the 122’04 target was rewarded, but only overnight. No intraday retest is required. But an intraday retest is likely so long as 121’14 holds as support. At this stage of the pattern, extending higher almost requires beginning with an aggressive spike up. Any less optimism would be vulnerable to reversing down intraday.

Crude Oil Apr (CLJ) Hitting the snooze button again. Another optimistic start ended the day notably weaker. Sunday night’s open surged $2 to 100.00, then started falling to 96.70. The pattern is still consolidating, flat to lower, refueling for the next rally leg. Under 95.50 would target 92.00.

Natural Gas Apr (NGJ) Just a little slow on the uptake. Monday’s action did duplicate Friday’s as is customary. But the immediate breakout from Friday’s Flag pattern up to 4.09 was almost fully retraced back down to 4.04. So long as 3.98 holds as support, this leg’s initial target is 4.21.

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

Posted in Daily Spot