Gold
There’s almost no way I can do any analysis of the overall markets without looking at gold. The gold market ended the week hanging around just below the crucial $5000 level, although it is a bit stretched at the moment. I would anticipate some type of pullback here, but I don’t think it will be anything other than a potential buying opportunity if and when we break above the $5000 level. We will likely see the gold market rip even higher. I see support every $200 all the way down to at least the $4000 level.
EUR/GBP
This is a market that I think too many of you are sleeping on. The euro initially tried to rally against the British pound during the week, but we have seen market memory come into the picture at the 0.8750 level, coupled with the stronger than anticipated Retail Sales figures coming out of the United Kingdom, and the forward-looking PMI numbers, it makes sense that the British Pound continues to strengthen. In fact, the British pound is rapidly becoming one of the better performers in the G-10 world. (The other one being the Australian dollar.) This point, rallies continue to be fading opportunities for short-sellers, and a breakdown below the 200 Day EMA could open up a move to drop much further.
Silver
The other market that everybody is asking me about is silver, which has doubled in price over the last 9 weeks. The market managed to break above the $100 an ounce level on Friday trading, and it looks like a market that is rapidly getting out of control. That being said, sooner or later, everybody loses money, and a move like this, so I would be very cautious. I still think the only thing you can do is either buy dips or sit on the sidelines, as I certainly wouldn’t want to be the person trying to short this type of momentum, but keep in mind it would not even change the trend if this market drops back down to the $70 level, which would wipe out most traders.
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USD/JPY
The US dollar initially rallied against the Japanese yen but has seen a lot of volatility during the course of the trading week, breaking well above the ¥158 level, only to crash lower, as the Bank of Japan decided to sit still. The interest rate differential still helps the US dollar, but we are in an area that has shown massive resistance more than once, so a bit of a pullback would not be a huge surprise. Ultimately, I think this is a “buy on the dip” pair, but you probably need to get out of the way in the short term as the US dollar is definitely on its back foot currently.
EUR/USD
The euro has shot straight up in the air during the week as trade tensions between the United States and the European Union continue to cause headaches. As I write this article, we are currently testing the 1.18 level, an area that has been a massive resistance, extending at least 50 pips. If we can break above all of that, it would be a very strong sign for the euro. Ultimately, this is a market that is range-bound still, but it certainly looks like somebody is trying to break out.
USD/MXN
The US dollar has fallen significantly against the Mexican peso again this week, breaking below the crucial 17.50 MXN level. At this point, it looks like a market that is probably heading to the 17 MXN level rather quickly, as we continue to see the carry trade play out. Short-term rallies will continue to be selling opportunities in a market that is beaten down rather significantly, and as a result, I like the idea of shorting.
Bitcoin
Bitcoin has been all over the place during the week as we continue to see a lot of questions asked about the resiliency in the longer-term, and whether or not the $84,000 level will hold. The $84,000 level seems to be rather important, from a technical analysis standpoint, though you can make an argument for a bearish flag. A breakdown below the $80,000 level could open up a move down to the 200-week EMA sitting right around the $60,000 level. If we can turn around and recapture the $95,000 level, then there’s a chance that we can try to get back to the $100,000 level.
S&P 500
The S&P 500 fell to the 6800 level early in the week, but has spent the rest of the week rallying from there, as the spat between the European Union and the United States has calmed down. With that being the case, traders are starting to focus on the upcoming earnings calls that will be the main driver, barring any geopolitical noise over the next couple of weeks. As things stand right now, it looks like the S&P 500 is well supported. This point, the 6800 level remains massive support in my analysis.
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