Technical Analysis Crude Oil for 9/16/15

Crude oil prices gave back its earlier gains, falling to session lows of $43.92/barrel, after peaking just over $45.00. The move came following news that the White House would not support current legislation being debated over lifting the U.S. ban on oil exports.  Prices then rebounded following the API report which showed an unexpected draw in inventories of 3.1 million barrels pushing prices back to $45 per barrel.

Support on crude oil prices are seen near last week’s lows at $43.22 which coincides with the 20-day moving average.  Resistance is seen near a downward sloping trend line that connects the highs in June to the highs in July and comes in near $46.60.  Momentum remains positive but the trajectory of the MACD is flattening reflecting consolidation.

Technical Analysis Crude Oil for 9/16/15
Technical Analysis Crude Oil for 9/16/15

Technical Analysis EUR/USD for 9/15/15

The EUR/USD traded in a narrow trading range during the North American trading session, peaking at 1.1320 at mid-morning, before easing back to 1.1284 lows. The bulk of euro short covering ahead of the FOMC was likely carried out last week, when liquidity was deeper. From here, the pair is likely to consolidate into Thursday’s Fed announcement, though given the reduced odds for a rate hike, EUR/USD risk still appears to be to the upside.

The EUR/USD remains above support near the 200-day moving average at 1.1240, with resistance seen near the August highs at 1.17.  Momentum has turned positive with the MACD (moving average convergence divergence) index recently generating a buy signal. This occurs as the spread crosses above the 9-day moving average of the spread.

Technical Analysis EUR/USD for 9/15/15
Technical Analysis EUR/USD for 9/15/15

Technical Analysis Crude Oil for 9/15/15

Crude oil touched session lows of $43.60, down over $1 per barrel from pre-N.Y. opening levels. The move has been attributed to Iran cutting prices for its crude, prompting demand from China and India in particular. This has reportedly led to Iran’s exports increasing as much as 1 millionbarrels per day, exacerbating the already oversupplied market. It remains to be seen if Iran exports will continue at this increased pace, but if they do, further downward pressure on crude prices can be expected.

Crude oil tested support near the 20-day moving average at 43.60, making a lower high and a lower low.  Resistance is seen near the recent highs at 45.20. While the MACD continues to print in the black, the trajectory has turned negative pointing to consolidation.

Technical Analysis Crude Oil for 9/15/15
Technical Analysis Crude Oil for 9/15/15

Technical Analysis Natural Gas for 9/15/15

Natural Gas prices moved higher on Monday, breaking out of a tight range following a warmer than expected forecast for the mid-west and east coast, reported by the Nation Oceanic Atmospheric Administration.

Prices pushed through resistance near the 20-day moving average at 2.70, and is poised to test a downward sloping trend line that connects the highs in May to the highs in August and comes in near 2.88.  Support is seen near a horizontal trend line that connects the lows in April, June and September and comes in at 2.63.  Momentum is positive with the MACD printing in the black with an upward sloping trajectory pointing to higher prices.

Technical Analysis Natural Gas for 9/15/15
Technical Analysis Natural Gas for 9/15/15

Technical Analysis Gold for 9/15/15

Gold prices held steady on Monday, as investors await the Federal Reserve’s decision on interest rates scheduled for Thursday September 17.  Support is seen near the recent lows at 1,090, while resistance is seen near the 20-day moving average at 1,129.  Momentum remains negative with the MACD printing in the red with a downward sloping trajectory which points to lower prices.

Traders were focused on Monday on Chinese retail sales which rose 10.8% y/y in August, better than expected, versus July’s 10.5% y/y pace. Year-to-date, sales accelerated to a 10.5% y/y clip compared to July’s 10.4% y/y. Industrial production improved to a 6.1% y/y rate in August versus 6.0% previously, and was steady at a 6.3% y/y cumulative pace.

Technical Analysis Gold for 9/15/15
Technical Analysis Gold for 9/15/15

Technical Analysis Crude oil for 9/14/15

Crude oil prices moved lower on Friday following a report from Goldman Sachs that forecast lower prices for crude and a potential target of $20 per barrel. Goldman said although this is not their base case the overhang of supplies could push crude oil back down to these levels.  Crude initially dropped but recovered following a report from Baker Hughes that showed a 10 rig drop in their weekly drilling rig count.

Support on crude oil prices is seen near the 20-day moving average at $43.49. Resistance is seen near the recent highs at $49.  Momentum remains positive with the MACD (moving average convergence divergence) index printing in positive territory with a flattening trajectory.

Technical Analysis Crude oil for 9/14/15
Technical Analysis Crude oil for 9/14/15

Technical Analysis EUR/USD for 9/14/15

The EUR/USD moved higher on Friday, as U.S. yields slumped following softer than expected sentiment number.  Inflation in German was confirmed in line with expectations which helped give the exchange rate a boost.  Next week, all eyes will be on the Federal Reserve which will make its monetary policy decision on September 17.  Support on the EUR/USD exchange rate is seen near the 20-day moving average at 1.1245, while resistance is seen near the June highs at 1.1435.

German August HICP inflation was confirmed at 0.1% year over year, in line with expectations and the preliminary reading. National CPI was confirmed at 0.2% year over year and the breakdown, which was released for the first time, confirmed that lower energy prices are the main reason behind the low headline rates.

Technical Analysis EUR/USD for 9/11/15
Technical Analysis EUR/USD for 9/11/15

Technical Analysis Natural Gas for 9/14/15

Natural Gas prices edged higher on Friday, despite lower oil prices and an overhang of natural gas in storage.  Prices were buoyed due to weather reports suggest that warm weather is expected in the southern and eastern parts of the US over the next few days.  On Thursday prices received a boost following a smaller than expected injection of inventories into storage according to the Energy Information Administration.

Support is seen near a horizontal trend line near 2.63, while the first level of resistance is seen near the 20-day moving average at 2.71.  Additional resistance is seen near the 50-day moving average which comes in near 2.79.

Technical Analysis Natural Gas for 9/14/15
Technical Analysis Natural Gas for 9/14/15

Technical Analysis Gold for 9/14/15

Gold prices made a lower low but held steady and edged higher into the close.  Softer than expected sentiment number from the University of Michigan weighed on the dollar allowing the yellow metal to gain traction. Momentum remains negative with the MACD (moving average convergence divergence) index printing in negative territory with a downward sloping trajectory that points to lower prices.

U.S. consumer sentiment dropped 6.2 points to 85.7 in September, after falling 1.2 points to 91.9 in August. This is the lowest since last September. The expectations index paced the weakness, falling to 76.4 versus 83.4. The current conditions index slid to 100.3 from August’s 105.1.

Technical Analysis Gold for 9/14/15
Technical Analysis Gold for 9/14/15

Technical Analysis Natural Gas for 9/11/15

Natural gas prices popped higher by more than 2% following a smaller than expected build in inventories, but was unable to hold on to gains and faded during the balance of the trading session. Prices were unable to hold above resistance near the 20-day moving average at 2.71.  Support is seen near the bottom end of the recent trading range at 2.63.

On Thursday the U.S. Energy Information Administration reported that U.S. natural gas stocks increased by 68 billion cubic feet for the week ending September 4. Analysts were expecting a storage injection of 72 billion cubic feet. The five-year average for the week is an increase of around 63 billion cubic feet, and last year’s addition for the week totaled 90 billion cubic feet.

Technical Analysis Natural Gas for 9/11/15
Technical Analysis Natural Gas for 9/11/15

Technical Analysis Crude oil for 9/11/15

Crude oil prices whipsawed on Thursday following stronger than expected inventory numbers released mid-morning by the U.S. Department of Energy. After testing support near the 20-day moving average at $43.02, prices pushed higher moving up by more than 3%.  Traders were more focused on the decline in production in the U.S. by more than 500K barrels per day.

According to the Department of Energy, U.S. commercial crude oil inventories increased by 2.6 million barrels from the previous week. Total gasoline inventories increased by 0.4 million barrels last week, but are in the middle of the average range. Distillate fuel inventories increased by 1.0 million barrels last week but are in the middle of the average range for this time of year.

Technical Analysis Crude oil for 9/11/15
Technical Analysis Crude oil for 9/11/15

Technical Analysis EUR/USD for 9/11/15

The EUR/USD moved higher despite rising U.S. yields which have backed up to 2.22%, ahead of next Thursday’s FOMC meeting.  Short term Fed Fund futures predict a 30% change of the Fed making a move next week. The currency pair pierced through short term resistance near the 20-day moving average at 1.1235, targeting the May highs at 1.1466.  Support below the 20-day moving average is seen near an upward sloping trend line at 1.1170.

Inflation data showed that U.S. import prices dropped 1.8% in August with export prices down 1.4%, steeper declines than forecast. The 0.9% decline in July import prices was not revised but the 0.2% slip in July export prices was nudged down to -0.4%. On the jobs front, U.S. initial jobless claims fell 6k to 275k in the week ended September 5, from a revised 281k the last week of August. The left the 4-week moving average at 275.75k versus 275.25k

Technical Analysis EUR/USD for 9/11/15
Technical Analysis EUR/USD for 9/11/15

Technical analysis Gold for 9/11/15

Gold prices edged higher on Thursday amidst general dollar weakness despite rising U.S. yields and a risk on trade environment.  Support on the yellow metal is seen near an upward sloping trend line that comes in near $1,080.  Resistance is seen near the 20-day moving average at $1,129.  Momentum has turned negative with the MACD (moving average convergence divergence) index recently generating a sell signal.  The negative trajectory of the index points to lower prices.

The weaker growth backdrop in the U.S. on Thursday allowed gold prices to gain traction. The 0.1% decline in July inventories will reduce Q3 GDP forecasts while the decline in import and export prices shows that inflation remains subdued.

Technical analysis Gold for 9/11/15
Technical analysis Gold for 9/11/15

Technical Analysis Natural Gas for 9/10/15

Natural Gas prices moved back down to the bottom end of the current range testing the lows near 2.63. This came despite a weather forecast that showed warmer than normal temperatures throughout the mid-west and east for the next 8-14 day.

Prices are stuck and depressed given the large overhang of natural gas in storage which is approximately 30% more than the same time last year.  Support is seen near a horizontal trend line at 2.63, while resistance is seen near a downward sloping trend line at 2.68.

Technical Analysis Natural Gas for 9/10/15
Technical Analysis Natural Gas for 9/10/15

Technical Analysis EUR/USD for 9/10/15

The EUR/USD moved higher during the U.S. trading session, as yields declined following stocks lower.  Lower yields in the U.S. make the greenback less attractive, giving a boost to the currency pair. The exchange rate pushed through short term resistance near the 10-day moving average at 1.1199.  Support is seen near last week’s lows at 1.1085.  Momentum remains negative with the MACD printing in the red with a downward sloping trajectory.

German PM Merkel says that the Eurozone is enjoying an economic recovery, with the overall situation better than a year ago. Merkel stressed that the path of reform has been worth it. For Germany, the Chancellor expects 1.8% growth this year and in 2016 helped by solid budget policies.

Technical Analysis EUR/USD for 9/10/15
Technical Analysis EUR/USD for 9/10/15

Technical Analysis Crude Oil for 9/10/15

Crude oil prices were buoyed in early trade, moving higher during the European session only to fail as the risk on rally faded on Wall Street.  Prices closed on their lows and are now poised to test the 20-day moving average at $43.17.  Resistance on gold prices are seen near a downward sloping trend line that comes in near $47.

Traders will be watching the Energy Information Administration’s report on crude oil inventories that will be released on Thursday at 10:30 AM ET. Expectations are for a build of 1mm barrels of crude oil. On Wednesday evening the American Petroleum Institute reported that crude supplies rose by 2.1 million barrels for the week ended Sept. 4, which compares to forecast a climb of 300,000 barrels.

Technical Analysis Crude Oil for 9/10/15
Technical Analysis Crude Oil for 9/10/15

Technical Analysis Gold for 9/10/15

Gold prices tumbled on Wednesday moving lower and testing trend line support near an upward sloping trend linen that connects the lows in July to the lows in August and comes in near $1,103. The late selloff in U.S. stocks helped the dollar lose traction giving a small relief to the yellow metal. A softer than expected JOLT jobs report eroded gold luster.

Momentum on gold prices have turned negative, as the MACD (moving average convergence divergence) index generated a sell signal.  This occurs as the spread (the 12-day moving average minus the 26-day moving average) crossed below the 9-day moving average of the spread.   The index moved from positive to negative territory confirming the sell signal.

Technical Analysis Gold for 9/10/15
Technical Analysis Gold for 9/10/15

Handling Your Emotions

In general when you lose money it is concerning to most people.  The idea that your hard earned cash is going up in smoke is difficult for a new trader to handle. But what if losing money was part of your business.  What is you planned on losing money a specific number of times and when it occurs, instead of getting angry you moved on to the next trade.  The best way to handle fear, worry and greed in the FX market is to plan for their eventuality and accept it.

There is no worse feeling than having a trade on that is going in the wrong direction.  You plan out for a specific event to take place and when your criteria is met you finally pull the trigger.  For whatever reason, your trade moves against you but instead of stopping out at your targeted price level, you decide to hold on or even double down.  Now the trade continues to move against you and every day you look at the price of the security and it weighs on you sapping your confidence.

An alternative route is to prepare for eventual losses.  All trading strategies should accept the premise that you will need to prepare for losses.  A winning strategy does not mean you win more than you lose, instead it means that you profit are more than your losses.  So if you win $500 on one trade and lose $50 on 9 trades ($450) you will still have a $50 profit.  If you understand that losses are part of your strategy you will instead focus on risk management and the amount that you are willing to lose relative to your gains.

This concept might generate fear amongst new traders as it is difficult to understand the concept that you are preparing for losses.  In fact, once you have found a great entry point to a trade, prior to transacting you most determine how much you are willing to risk. Once this occurs you can then determine how much the trade will make you.

Another common mistake is to become too greedy.  Looking to hit a home run and ignoring prudent risk management will eventually lead to fear and worry.  By using a trailing stop which moves with the market or a steadfast take profit level, will help you avoid worrying when the market eventually turns against you as you give back your gains.  Market don’t move in a straight line for a long period of time and eventually you will suffer losses if you ignore prudent risk management.

The key to avoiding fear, worry and greed is to set up a plan that incorporates losses as well as specific take profit levels, which will provide you with a comprehensive strategy that removes emotion.

Handling Your Emotions
Handling Your Emotions

Technical Analysis Crude Oil for 9/9/15

Crude oil prices whipsawed on Tuesday, pushing lower during the Asian and European trading session only to rally along with stocks during the U.S. time zone.  Prices finished the session nearly unchanged, but the overhand of crude oil inventories will likely continue to weigh on prices.

Resistance is seen near a downward sloping trend line that connects the highs in July to the highs in September and comes in near $47.50.  This coincides with the 50-day moving average at $47.05.  Support is seen in the 20-day moving average at $43.12.  Momentum remains positive with the  MACD (moving average convergence divergence) index printing in positive territory.

Technical Analysis Crude Oil for 9/9/15
Technical Analysis Crude Oil for 9/9/15

Technical Analysis EUR/USD for 9/8/15

EUR/USD has moved up off its lows, after finding support into 1.1100. Gains appear to be stalling into the 1.1200 level however, and the market may have found its trading range. The risk backdrop remains supportive of the dollar however, as do prospects for a Fed rate hike, which remains on the table following Friday’s jobs report.  Support is seen near an upward sloping trend line at 1.1140, while resistance is seen near the 20-day movign average at 1.1225.

Fed’s LMCI rose 2.1 points in August for a 4th straight monthly gain. July’s 1.1 point gain was revised up to 1.8, while June’s 1.4 point increase was nudged to 1.6. There’s no new data in this report that is a compilation of 19 already released indicators, and it underscores the improvement in the labor market.

Technical Analysis EUR/USD for 9/8/15
Technical Analysis EUR/USD for 9/8/15