Daily Spot: Currencies
A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]
Dollar Basket Jun (DXM) Layover in the USD, on the way to exotic destinations. Monday’s gap up above prior highs dipped back to natural support at Friday’s high before extending to higher highs intraday. That’s a lot of highs. And it’s a lot of buying pressure to expend while leaving outstanding gaps back to the prior two session’s closes. It’s not without basis, since none of last week’s lower lows gained traction. And a second consecutive higher close would confirm Monday’s surge. But a probe of last week’s lows is likelier otherwise, as proceeds from Monday’s sell-offs elsewhere finds other homes.
Gold Jun (GCM) Consumer non-durables are doing well, too. An overnight pullback was righted by the US debt downgrade. Its reaction probed prior highs by $10 up to 1498.60. The next higher resistance is 1500.80, which should be touched regardless of the pattern’s resolution. A close under 1485.50 would signal momentum reversing down.
30-year Treasury Jun (USM) Downgrade this, S&P. Gapping up Monday might have seemed to be confirmation of Friday’s new relative high close. But Friday’s close was still in the process of testing 120’25 resistance, so it wasn’t going to be that simple. The US debt downgrade made it more difficult, dipping down to 119’29. Yet, the 121’09 opening print was recovered into the afternoon. It was still being tested at the close, and the morning’s 121’12 high held, too. But the rally could extend to 122’02 and higher if not rejected through Tuesday morning.
Crude Oil Jun (CLM) Corrective rally may be ending ahead of schedule. [Rolling coverage to Jun, trading at about a 60-cent premium to May.] The two-day rally targeting 111.65 peaked $1 short Friday. Monday’s gap down back under the pivotal 108.85-109.15 area did extend down immediately, but ended abruptly. Its close represented a 61.8% retracement from last week’s 106.00 lows. Closing back above 109.50 would signal the 111.65 bounce target back in-play. But closing under 106.00 would signal the expected downleg had already begun. And it is likely to begin by gapping down sharply.
Natural Gas May (NGK) Head fake gets caught. 4.25 resistance had its opportunity for recovery twice last week. Any subsequent attempt would be suspicious. In fact, Monday’s early strength to 4.27 was rejected down to 4.09. New relative lows down to 3.97 remain likely before any credible rally attempt can begin.
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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Weekender (Fri).