Gold
Gold continues to be very noisy, but we’ve had a strong week over the last handful of sessions, which, of course, was interrupted by Thanksgiving in the United States. Nonetheless, this is a market that just has no real hope of breaking down significantly, at least not in this environment. However, if we were to drop below the $3950 level, then the market could fall apart. On the other hand, it’s very likely that we could see a little bit of upward pressure, perhaps sending this market to the $4400 level.
USD/CHF
The US dollar initially tried to rally for the week, but continues to see a lot of resistance at the 0.81 level. The 0.81 level has been significant and consistent resistance over the last several months, as we continue to see a lot of sideways action in general. The 0.79 level underneath is significant support, and therefore, we are sitting in the consolidation area that I think could be thought of as a potential “bottoming pattern”, or perhaps even an “accumulation process.” I do think that eventually we will see this market turnaround, so I am more or less “buy on the dip.”
Silver
Silver has exploded to the upside during the trading week, especially as we got to the Friday session, which may have had a fairly significant lack of participation, as it was the day after Thanksgiving. The market closed just over the $57 level, and this explosive move looks very like a short-covering rally. So, with that being said, market participants will continue to look at short-term pullbacks as buying opportunities, with the $55 level that offers support, and then again, we should see support at the $54 level, which was previously resistance. The size of the candlestick is astonishing at this point.
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USD/JPY
The US dollar tried to rally initially during the week against the Japanese yen, but it continues to see a little bit of an overhang due to the idea that the Federal Reserve may start cutting rates. That being said, though, the Bank of Japan is very much loose with its monetary policy, and it’s almost impossible to imagine a scenario where the Japanese suddenly get tight with their monetary policy, so this is the one place that I would anticipate the US dollar attracting a lot of attention. The ¥153 level should end up being a significant floor in this market.
Bitcoin
Bitcoin continues to see a lot of volatility, but this week did see buying for once, as the market looks as if it is trying to establish some type of range. This is exactly what the market will need to convince traders to come back in and start buying again. The $92,500 area bird quite a bit of a barrier, so if we can break above the weekly candlestick, then Bitcoin might go looking to the $100,000 level, which is also where the 50 Day EMA sits. On the downside, I believe that the $80,000 level probably ends up being significant support. Anything below there is disastrous for Bitcoin.
DAX
The German index rallied during the trading week as it looks like the €23,000 level continues to be significant support. The 50 Week EMA sits just below there, and we have been consolidating for months. All things being equal, this is a market that I think continues to see a lot of noise, and I do believe that there are a lot of questions to be asked about where we are at the moment. The market now looks as if it is simply trying to digest the gains from the massive move higher previously. If we can break above the €24,500 level, then it’s likely that the DAX truly takes off. As things stand right now, it’s likely that we continue to see consolidation and short-term back-and-forth trading.
EUR/USD
The Euro rallied rather significantly during the trading week to close near the 1.16 level. This is a market that continues to see a lot of volatility, and we are now testing a somewhat significant downtrend line and the 50 Day EMA indicator. That being said, we haven’t really changed much over the past week, as we continue to jump back and forth on the latest interest rate expectations coming out of the Federal Reserve. I don’t necessarily think the Euro is going to jump drastically against the US dollar, just grind back and forth. I am more of a “fade the rally” type of trader.
USD/MXN
The US dollar tried to rally against the Mexican peso during the early part of the week but gave back the gains as it reached above the 18.50 MXN level. We currently find this market looking at the 18 MXN level, and if we can break down below there, then I think the US dollar is in serious trouble against the Mexican peso, as it is not only a large, round, psychologically significant figure, but it is also the 61.8% Fibonacci retracement level from the big move to the upside. The interest rate differential favors the Mexican peso and should continue as long as I can see.
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