Daily Spot: Currencies
A weekly summary of one complex, including daily updates of other developments elsewhere.
[pay]Dollar Basket Dec (DXZ) Sunday night’s open probed Thursday’s 77.28 opening gap down, and also Thursday’s 77.15 low. This essentially fulfilled the downside objective. But Wednesday’s 77.60 close was still in the process of being tested by Monday’s close.
Not triggering a signal that has otherwise formed can be a contrary signal. Going so far as to probe new lows and then to recover from new lows can be bearish. That sponsorship has expended its buying pressure, and can only leverage its efforts by attracting more buyers.
Another dip to 77.28 that recovers above Monday afternoon’s 77.77 high would be credible for trying another steep rally leg. And this time the launching pad would start out higher, helping to ensure success. But that’s much less likely without either recovering from another dip, or else extending higher Tuesday without delay.
Canadian Dollar Dec (CDZ) The rally from September’s low peaked upon reaching a 261.8% swing of the consolidation that launched it. The sudden and steep reaction down from 9922 helps to confirm that much buying pressure was satisfied at the bounce’s peak.
Perhaps all of the buying pressure was satisfied there. The current bounce is an obligatory bounce, the product of testing “lower prior highs,” and has yet to prove buyers have regained traction. A close above 9885 would be credible for resuming the rally. Otherwise, closing under 9766 would signal a bigger dip underway targeting 9550.
Gold Dec (GCZ) Sunday night’s rally stopped just short of filling the gap back to Thursday’s 1357.60 opening gap. Its dip back to 1341.00 at the open was fully retraced into Monday’s close. But it, too, stopped short of filling the gap. This pessimism suggests there is still potential to probe Thursday’s highs up to 1170.50 before reversing down more substantially.
30-year Treasury Dec (USZ) Government bond market closed during Monday’s Columbus Day holiday, futures ranged narrowly.
Crude Oil Nov (CLX) Overnight action tried to extend the rally. Monday’s open gapped down and ranged sideways throughout. Despite rejecting the overnight high, sellers never justified it by gaining traction. A close under 81.46 would signal a new downleg underway. Otherwise there is potential to test 83.60 first.
Natural Gas Nov (NGX) Friday’s excessive optimism was unlikely to be overcome on a Monday. In fact, Monday’s attempt to rally reacted down to a fresh low. Recovering from more fresh lows Tuesday to close above Friday’s 3.65 low could launch a substantial rally. The trend otherwise remains down.
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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Softs (Fri, coming).