CURRENCY , OIL SILVRE ANALYSIS AND CHARTS .

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12
Currency, Oil, Silver Analysis and Charts
Anna Coulling @ 9:57 AM, Friday June 12 2009 Article Rating

Euro vs Dollar - Daily Eurodollar Chart 12th June 2009

Eurodollar - EUR vs USD Daily Chart 12th June 2009

Eurodollar - EUR vs USD Daily Chart 12th June 2009

One of the questions I am often asked is at what point dollar strength will return to the market, accompanied by a weakening of the Euro as many traders, analysts and economists are confused with the current technical picture given the dire stream of fundamental news on the economic calendar for Europe. Recent examples include the German GDP figures and this morning's Industrial Production figures which plunged to a new record low, falling by 22% across the Eurozone. By any standards we should have expected a significant rally in the US dollar as a result of such poor figures and yet the Euro continues to maintain its upwards path, and one can only assume that this is fuelled on sentiment rather than fact, but also largely helped by the US Fed who promote the sale of dollars at every opportunity. This was evidenced once again by Dennis Lockhart's remarks that the "USD role as reserve currency may decline; not made up mind yet to increase Treasury purchases" If and until this anti dollar rhetoric changes it is unlikely that we will see any dollar strength return. As currency traders we need to be aware of this as the impact on the forex market cannot be ignored making trading this pair extremely difficult. This dollar weakness rhetoric also spills over into the energy complex and commodities, and until oil prices reverse dramatically then this imbalance will continue unabated.

Technically the eurodollar pair continue to grind their way upwards with a series of closing prices which are each marginally higher than the previous day, with yesterday's candle managing to break and hold above both the 9 and 14 day moving averages. However, this is hardly a convincing trading signal and with the G8 and G20 meetings currently ongoing further sideways consolidation seems inevitable and may even continue into next week if no significant news is forthcoming from these meetings. My trading suggestion is therefore to stay out today and wait until Monday when the market will have had an opportunity to absorb any announcements, and indeed there may be some reaction when the market opens on Sunday night.

Dollars To Pounds - GBP/USD Daily Chart 12th June 2009

Dollars To Pounds - GBP/USD Daily Forex Chart 12th June 2009

Dollars To Pounds - GBP/USD Daily Forex Chart 12th June 2009

Yesterday's wide spread up bar added further momentum to the already bullish British Pound as it continued its meteoric rise from the ashes of earlier in the year, fuelled by anti US dollar rhetoric from the US administration and unhelpful comments from FMOC such as Dennis Flockhart. The pounds to dollars candle closed well above all three moving averages and holding above the minor support level created during last week's turbulence during the political uncertainty in the UK. With further dollar weakness likely it seems that our initial target of 1.6725 has appeared on the horizon sooner rather than later, and any reversal, as we have seen in this morning's trading, may well be the market taking a breather as participants take their profits off the table, before continuing to push Cable higher. Currency markets this morning have exhibited a degree of instability and volatility owing to the G8 and G20 meetings in Italy and Germany respectively which are now running over the next couple of days and any accidental or scripted comments will be closely analysed for any hidden clues as to future monetary policy. The above meetings overshadow the economic news on the economic calendar, which is generally minor, and will have little impact given the significance of these meetings.

NOTE: the currency markets this morning have exhibited adegree of instablity and volatility owing to the G8 and G20 meeting in italy and germany respectively witch are now running over the next coulpe of days and any accidental.

USD/JPY - US Dollar vs Japanese Yen 12th June 2009
US Dollar vs Japanese Yen - USD/JPY Daily Candle Chart 12th June 2009

US Dollar vs Japanese Yen - USD/JPY Daily Candle Chart 12th June 2009

An exciting week on the dollar yen chart, starting with a spinning top on Monday, down bar Tuesday, up bar Wednesday, down bar Thursday and an up bar today - metronomic, lethargic and impossible to trade as the Fed and BOJ slug it out. Like two overweight, punch drunk heavyweight fighters these two leviathans of the currency market are now trading blows in an attempt to force their respective currencies to the bottom. For this reason there is no clear bias to the dollar vs yen and you trade this pair at your peril given that the fundamental news on the economic calendar for both the US and Japan is equally dire. Unless and until there is a knockout by one or the other my suggestion is to stay OUT.
USD vs CAD - US Dollar to Canadian Dollar 12th June 2009
USD to CAD - Daily Chart For The USD/CAD 12th June 2009

USD to CAD - Daily Chart For The USD/CAD 12th June 2009

The dollar to cad continued to consolidate yesterday ending the day on a narrow spread up bar with a small lower wick which found some support in the 1.0950 region which aligned closely with the previous lows of the last few days, and closing marginally below the 9 day moving average. It is interesting to note that these two averages are now converging and indeed about to cross, suggesting that we may see a short squeeze in this pair once again, a pattern which has emerged in early trading today. Whether this will convert into a longer term reversal or is simply as a result of some dollar strength temporarily returning to the market, only time will tell. With constant negative sentiment emanating from the US administration and, in particular, from Fed Members such as Dennis Lockhart, a sustained rally in the US dollar is extremely unlikely until this anti dollar rhetoric ceases. With the G8 and G20 meetings now in progress in Italy and Germany respectively, and with the weekend ahead, now is not the time to be trading on such an uncertain and volatile day. My suggestion is therefore to wait until early next week before entering the market which, by then, will have had a chance to absorb any news from these meeting.
Crude Oil Price - Daily WTI Oil Chart 12th June 2009
WTI Daily Oil Price Chart - Oil Prices 12th June 2009

Crude oil prices just keep marching on supported both from strengthening equity markets and a further weakening of the US dollar, particularly against the Euro. The oil market is used to anti Dollar rhetoric from the likes of Iran, Russia and Venezuela but when it comes from Fed Member Lockhart who yesterday stated ""USD role as reserve currency may decline; not made up mind yet to increase Treasury purchases" there really is no hope. Meanwhile the IEA monthly report showed an upward revision to its 2009 global oil demand figures thereby hinting that crude oil prices are likely to be boosted given this shift in the fundamentals. It will be interesting to see how OPEC producers respond to the increase in daily oil prices and whether the agreed production cuts will in fact hold. From a technical perspective yesterday's oil chart saw crude oil prices climb even higher and at one point achieve an inter day high of $73.23 per barrel. Despite a small hiccup in the rally the price of oil finished 92 cents higher to settle at $72.47. The oil chart is now pointing to the $74.28 minor resistance level, last seen on 17th October 2008 and with the oil market in buoyant mood and moving further away from all three moving averages we should not be surprised to see a retracement at some point in the near

The short and medium term trends are bullish and the long term trend is bullish.

WTI:

Support: $71.32 (yesterday's low) Resistance: $75.85 (high of 21/10/08)

Support: $70.51 (low of 10/06/09) Resistance: $74.28 (high of 17/10/08)

Support: $68.44 (low of 09/06/09) Resistance: $73.23 (yesterday's high)

OIL (BRENT):

Support: $70.63 (yesterday's low) Resistance: $75.04 (high of 15/10/08)

Support: $69.92 (low of 10/06/09) Resistance: $73.29 (high of 21/10/08)

Support: $68.24 (low of 09/06/09) Resistance: $72.27 (yesterday's high)
Spot Silver Price - Daily Silver Chart 12th June 2009

Silver Spot Prices - Daily Silver Chart 12th June 2009

A combination of a weaker US dollar and increasing optimism about industrial demand once again provided support for spot silver prices which ended the day 17 cents higher at $15.390 per ounce and in percentage terms once again outperformed spot gold. The current rally in silver prices mirrors similar bullish sentiment in other commodities such as oil where despite the somewhat bleak fundamental picture, investors appear determined to maintain the upward trend across the commodities market. From a technical perspective the silver chart is very similar to that of gold in that prices are consolidating in a very narrow range. The only minor difference between the two is that the price of silver has shown a marginally more bullish trend on the week with candles that are slightly more descriptive (gold has had a series of doji candles which are indicative of indecision and sideways movement). Yesterday's candle was typical with a small increase on the day closing marginally below the 9 day moving average but with a deep lower wick which seems to have found some support on the 14 day moving average and with each day's candle having a low which is higher than the previous day, again suggesting a bullish flavour. However, today is not a day for trading for several reasons. First it is the end of the week and many traders will be squaring positions ahead of the weekend. Second we have the G8 finance ministers' meeting in Italy where unprompted off the cuff remarks will be seized on by the markets, and all the markets are now waiting for this meeting to unfold so today is likely to be characterized by a further period of consolidation and sideways movement.

The short term is sideways while the medium and long term is bullish.

Support: $14.930 (yesterday's low) Resistance: $15.950 (high of 04/06/09)

Support: $14.760 (low of 09/06/09) Resistance: $15.760 (high of 29/05/09)

Support: $14.620 (low of 28/05/09) Resistance: $15.532 (yesterday's high)

Anna's Websites Below:



http://www.euro-vs-dollar.com
http://www.euro-to-dollar.com
http://www.usd-to-cad.com
http://www.yen-to-dollar.com
http://www.prices-oil.org
http://www.spot-gold-price.org
http://www.pounds-to-dollars.com
http://www.spot-silver.com
http://www.cot-report.com
http://www.currency-trading-forex.com
http://euros-to-pounds.com

Categories: EURUSD, USDJPY, USDCAD, GBPUSD Bullish, Commodities

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