Daily Spot: Currencies
A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]
Dollar Basket Mar (DXH) The open’s gap down got it way wrong. Monday’s open did mimic Friday’s characteristics by immediately probing new lows. The balance of the session trended back up, also closing above the prior session’s low. The open’s gap down to 76.21 would need to be retested before a durable bottom could form, but a close above 76.75 would suggest buyers were already regaining traction.
Gold Apr (GCJ) Minimum objective met, but there’s still room. Monday’s close was still in the process of testing 1435.00 or trying to recover it. Closing above it would have maintained the rally’s momentum. But the morning’s 1445.70 new high fulfilled the minimum requirement of last week’s setup. A second consecutive close under 1435.00 would signal the top had formed. Extending the rally would next target 1454.00.
30-year Treasury Jun (USM) Setting up for failure. Monday’s bounce up to Friday’s high also closed back above 118’26 again. Having trending up intraday, the inside day is a form of “ineffectual optimism.” Unlike a failed probe of new highs that would resolve down, this instance simply forms an unstable base – higher highs may follow, and they would be likely to fail. Above 119’26 would target a retest of 120’17, which could extend up to 122’00 if not rejected immediately.
Crude Oil Apr (CLJ) New highs, and holding. Monday’s gap up came within about 30 cents of its 107.25 high. The balance of the session ranged sideways exclusively in positive territory. And yet, the session did not form “ineffectual optimism,” since the morning’s low was not probed temporarily to trap buyers. Higher highs remain possible, if only temporarily. Closing back under 102.50 would signal momentum already reversing down.
Natural Gas Apr (NGJ) It’s alive. Monday’s 3.85 gap down was above prior lows. Follow-through to 3.83 did attack prior lows. There is no unfinished business below. A sudden reversal quickly recovered 3.95. An afternoon surge tested fresh highs up to 3.99. This is back above levels that launched the recent surge to 4.17. Now extending above 4.03 would put into play 4.35.
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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Weekender (Fri).