Daily Spot: Currencies
A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]
Dollar Basket Jun (DXM) Keeping its head while all those about it... Two consecutive sessions of gapping down to new lows did not extend lower intraday. Monday’s open neither gapped down nor did it probe new lows. That’s somewhat subdued behavior for an otherwise strong trend. Especially considering Gold’s early strength. Of course, Gold backed off, so perhaps the Dollar is more attracted to the three recent gaps outstanding above.
Gold Jun (GCM) Probing higher highs with little net effect. Last week’s three consecutive sessions of “ineffectual optimism” left the wrong environment for maintaining Monday’s opening gap up. Its brief probe of new highs was retraced back into negative territory. A subsequent bounce intraday retested the open’s gap, neutralizing its attraction above. Closing under the 1506.00 prior highs and under Monday’s 1502.00 low would signal momentum was reversing down sharply.
30-year Treasury Jun (USM) Complacency at resistance only expends energy. Although Wednesday’s session was entitled to range narrowly, Thursday’s narrow ranging reflected weakness. Monday’s narrow range confirms. It’s not a sell signal, but it is weak basing that would undermine a rally attempt. A test of the 122’02 target may be no less likely, but its test is becoming much more likely to reverse down sharply.
Crude Oil Jun (CLM) Optimism, meet resistance. Wednesday and Thursday’s reluctance to decline from the bounce’s 111.65 target reflected just enough optimism to keep alive the bounce’s momentum. Monday’s gap up crossed the line into excessive optimism, just as the prior rally’s 113.00 target was being tested. A big intraday reaction down closed probed 111.65 and closed while trying to recover positive territory. The open’s 113.22 gap up will want to be retested as resistance before a close under 111.65 can trigger an even bigger downleg.
Natural Gas Jun (NGM) Dipping a little, a little late. Despite trading weaker throughout Monday, potential remains alive for extending the rally up to 4.55. Closing any higher would signal a much more significant rally underway.
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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Weekender (Fri).