British Pound Gives Up Early Gains Against Yen

The British pound initially rally during the trading session on Thursday but gave back gains to show a bit of hesitation. At this point, the market looks like it could drop towards the ¥155 level, an area that has been important more than once, so it will be interesting to see how this plays out. Ultimately, I think this is a market that will eventually find buyers, but if we get a significant break down below that ¥155 level, that could unleash quite a bit of selling pressure like we had seen the last time we rallied so significantly.

GBP/JPY Video 21.01.22

On the other hand, if we turn around and break above the top of the candlestick for the trading session on Thursday that would be a very bullish sign and could see a lot of buying pressure jump back into the trading session. All things being equal, it is possible that we see that, due to the fact that we have seen so much in the way of bullish pressure recently. Ultimately, I think this is a market that will come down to whether or not we have risk appetite.

Keep in mind that this pair is highly sensitive to the risk appetite of markets in general, as the Japanese yen is considered to be a safety currency, while the British pound is a little bit more bullish as far as risk is concerned. This pair is highly volatile, so you need to pay attention to that as well, so I would keep my position size relatively small until we get some of this volatility out of the markets.

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Euro Continues to Go Back and Forth in Order to Build Rally

The Euro has gone back and forth during the course of the trading session on Thursday as we continue to see a lot of back-and-forth noisy behavior in the Forex markets in general, and of course we are starting to ask questions as to whether or not we are seen support in this general vicinity. After all, we had broken out from just above here, but we also have the 50 day EMA sitting just above. That lends itself to the question of whether or not this was a false breakout, or if we finally build up enough pressure to go higher?

EUR/USD Video 21.01.22

As for myself, I see much better set ups but if we do break out above the 50 day EMA on a daily close, then I would be more convinced of the idea of this market going higher. It is worth noting that there is a bit of an uptrend line sitting underneath, and therefore the triangle has in theory at least held. If we break down below the 1.1250 level, that could spell trouble for the Euro and send it down to the lows again, possibly even down to as low as the 1.10 level underneath.

I think the only thing that you can do at this point in time is just watch the US dollar in general, as the Euro is quite often thought of as the “anti-dollar”, and therefore it makes quite a bit of sense that we would see it move counter to what the greenback does overall. The Euro is not necessarily strong, but the US dollar seems to be losing little bit of ground to the fact that the German Bund is trying to go positive with yields for a longer-term move.

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Australian Dollar Climbs During the Trading Session

Looking at this chart, you can see that we broke above the 50 day EMA, but when I look at this chart, I can also see that there is a significant amount of resistance near the 0.73 level, so in that sense I would be very cautious about getting aggressive. If we can break above the 0.73 level, then it is very likely that we could see this market go much higher, perhaps reaching towards the 0.75 level. Looking at this chart, you can see there is a lot of noisy behavior going on, and quite frankly I think what we are seeing here is the Aussie reacting to the great Thursday morning Asian stocks had as it is quite often used as a proxy for Asia.

AUD/USD Video 21.01.22

If the market were to turn around and break down below the 0.7150 level, then I think we probably have a run down to the 0.70 level just waiting to happen, which makes a certain amount of sense due to the United States dollar has been so strong against European currencies, so if it spreads and Asia this is what we will get. I would anticipate a bit of choppiness, but it is worth noting that the 0.70 level underneath was a major support level and we have bounced quite nicely from there. Unfortunately, when we have this amount of volatility around the world, you need to think more along the lines of a short-term trading environment.

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S&P 500 Testing Support

The S&P 500 has gone back and forth during the course of the trading session on Wednesday, as we are testing the 4550 area. This is a general vicinity where we have seen a bit of noisy behavior and support in the past, so it is not a huge surprise to see that support has come back. The question now is whether or not we can break above the top of the candlestick for the Wednesday session? If we can, then it is very likely that we will see this market go much higher, perhaps reaching towards the 50 day EMA. Alternately, if we break down below the 4500 level it could be very ugly, and I think at that point in time we would probably see markets break down significantly.

S&P 500 Video 20.01.22

If we do get that breakdown, I will be a buyer of puts, because it will probably only be a matter of time before the central bank in the United States says something to lift the market. They do not want the stock market melting down, despite the fact that everybody is banking on the idea of at least four interest-rate hikes next year and based upon what we are seen in the bond market, some people were actually expecting as many as five interest rates. That seems to be very unlikely to me, but it is worth paying close attention to, so at this point in time I am a bit cautious about shorting anything, although I would not jump “all in” to the upside either. Position sizing will be crucial at this point in time.

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Silver Markets Reach 200 Day EMA

Silver markets have rallied significantly during the trading session on Wednesday to reach the 200 day EMA. That being said, the market looks as if it is trying to figure out where it can go next. Ultimately, this is a market that is getting a little bit stretched, but as interest rates fell a bit during the trading session, the US dollar got a little bit of a beating, and that of course helps silver which is so highly sensitive to the US dollar itself.

SILVER Video 20.01.22

Obviously, the 200 day EMA is an area where a lot of people will pay attention to, but it is also worth noting that the overall attitude of the market has been one of consolidation for ages, and we could go as high as $25 and still not break out of it. In fact, that is probably where we are going over the longer term but right now it seems as if we are simply killing time trying to reach the top. Dips should continue to be buying opportunities, lease as long as we can stay above the $23 level at this point.

Silver is very volatile, and obviously we have gotten so stretched that perhaps we probably need to take a look at the market through the prism of “finding value”, and other words buying dips as they occur. The market of course is one that can move at the drop of hat, so your position size ultimately is a major factor in whether or not you can survive silver trading. Either way, it seems as if it is going to be almost impossible to short this market in this current environment.

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Crude Oil Continues to Race to the Upside

WTI Crude Oil

The West Texas Intermediate Crude Oil market has gapped higher to kick off the trading session on Wednesday, but then pulled back a bit to fill that gap. At the $85 level, we have seen buyers jump back in and it looks like the oil market is simply going to continue to go straight up in the air. Because of this, I think the market is one that will continue to go much higher, and pullback should be thought of as a bit of a gift, in what looks to be a very explosive move to the upside. Recent drone attacks in the United Arab Emirates and a pipeline fire between Turkey and Iraq has caused major havoc in this market, not to mention the fact that OPEC has been struggling to produce.

Crude Oil Video 20.01.22

Brent

Brent markets have done the same thing, initially taken out to the upside on a gap, pulling back, and then filling the gap in order to take off again. At this point, Brent looks as if it is trying to get to the $90 level, which of course is a large, round, psychologically significant figure that a lot of people will pay close attention to. Ultimately, this is a market that goes much higher, but the $90 level might cause a little bit of a hiccup. On pullbacks, I like the $85 level as a bit of a floor in this market, and if we can get the US dollar selling off, that will also help this market as it is of course priced in those very same US dollars. All things been equal, this is a market that I think goes much higher over the longer term.

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Natural Gas Markets Pull Back Towards 200 Day EMA

Natural gas markets have pulled back a bit during the course of the trading session on Wednesday to show signs of hesitation, as we are sitting just above the 200 day EMA. The 200 day EMA of course is a longer-term indicator that a lot of people pay attention to, but it is also worth noting that the $4.10 level just below was the top of the overall consolidation area that we had been in. Because of this, the market is likely to see a lot of interest in this area, as previous resistance should be support. Because of this, if we can break down below the $4.10 level on a daily close, I think we will continue to fall apart.

NATGAS Video 20.01.22

Keep in mind that natural gas is highly volatile, and of course very sensitive to short-term weather fluctuations in the northeastern part of the United States. After all, we just had a major storm hit the New York, Boston, and Washington DC area. However, it is starting to go away and therefore people are looking towards the future, recognizing that there will be less demand for natural gas going forward. With this, I think it is probably only a matter of time before we see a continuation of the overall selling.

Keep in mind that we are trading the February contract already, which of course is the last winter months. Once we get into the contract of March, then you start to talk about spring when demand will naturally fall off anyway. Because of this, I remain bearish.

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Gold Markets Continue to Look Strong as We Break Through Resistance

Gold markets have exploded to the upside, breaking above the crucial $1835 level, an area that has been significant resistance previously. That being said, the market looks as if it is trying to continue the overall upward pressure, especially as the bond market continues to cause a lot of headaches for traders around the world. Now that we are breaking above the $1835 level, it is very likely that we could go looking towards $1850 level. That being said, I would anticipate a certain amount of volatility, but that is normal with the gold market. Quite frankly, the market will continue to take its cues from the bond market as per usual, as the bond market drives most things. Ultimately, I do think that this market probably continues to go higher though.

Gold Price Predictions Video 20.01.22

If we break down below the $1820 level, I think we could go looking towards $1800 level next, which is where the 200 day EMA sits. That being said, this was a major breakout and I think it will have plenty of follow-through. Whether or not we go straight up in the air is a completely different question, but at this point in time I certainly would not bet against the gold market. Gold tends to be very volatile, very choppy and then suddenly takes off, which is exactly what we are seeing here. Until something changes quite drastically, I have no interest in shorting this market and I do believe that it eventually goes much higher. With inflation roaring, it makes sense from a lot of old traders that they pile into gold as well.

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US Dollar Continues to Grind Against Japanese Yen

The US dollar has fallen during the trading session on Wednesday to reach down towards the 50 day EMA. We had seen a certain amount of support in that area, thereby causing the market to bounce again. At this point, it looks as if the market is trying to figure out whether or not we will continue to have enough momentum to go higher. The 50 day EMA is of course an indicator that a lot of people pay attention to, so it is worth noting.

USD/JPY Video 20.01.22

To the upside, the ¥115 level will be important as well, as it is a large, round, psychologically significant figure and an area where we had seen a bit of selling pressure as of late. If we can break above there, not only would we break above the top of the shooting star that formed just Tuesday, but we would also clear an area that previously had been thought of as a significant barrier. Because of this, I think that more money would flow into this market if that does in fact happen, and thereby could cause a little bit of a rush.

To the downside, if we break down below the 50 day EMA, we will probably go looking towards the bottom of that hammer from last Friday to see whether or not there will be support for buyers in that general vicinity. With US rates rising, it does make a certain amount of sense that we will continue to see the US dollar strengthen against the Japanese yen.

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British Pound Finds Support Against US Dollar

The British pound has fallen a bit during the course of the trading session early on Wednesday, only to turn around and find plenty of support in the area in order to make sure that the potential uptrend is holding. Ultimately, it comes down to whether or not we can continue to see the momentum come into play, but right now it still a little bit of an open question. Clearly, the session on Wednesday did a lot to help the overall situation, so if we can break above the top of the candlestick on Wednesday, I will be a buyer again. At that point, I anticipate that the market goes looking towards the 1.37 level above.

GBP/USD Video 20.01.22

To the downside, if we were to break down below the lows of the Tuesday session, I think that opens up a move down to the 1.35 handle, but as things stand right now the British pound has been one of the strongest currencies out there as it is believed that the British economy is going to recover much quicker than others, and of course the Bank of England is expected the Heikin Straits rather soon. With this being the case, it is the British pound that is giving the US dollar the biggest fight right now, so I think we may continue to see that play out. After all, this has been a huge move to the upside, and it certainly suggests that it should have a bit of follow-through. All things been equal, this is a market that I think continues to be noisy but overall looks very positive to me.

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Euro bounces from low levels

The Euro has rallied a bit during the trading session on Wednesday to show signs of life after what was a horrible Tuesday. Because of this, it looks as if we are trying to find support in the middle of the previous consolidation phase, which does make a certain amount of sense even though we had sold off so drastically during the previous session. Keep in mind that yields in America continue to spike, and as they took off during the day on Tuesday, the US dollar strengthened against almost everything.

EUR/USD Video 20.01.22

All of that being said, we did not break down below the bottom of the consolidation area, so it does make a certain amount of sense that we would continue to see buyers coming back into the picture. If we can break back above the 50 day EMA that I would consider this to be a situation where support held, and we could go higher. Until then, I am a bit suspicious and cautious, and would have to watch the US dollar across the market in order to feel comfortable either buying or selling.

Nonetheless, this is a market that I think will have to make a bigger decision, probably based upon bond markets. After all, the German Bund managed to go positive as far as yields are concerned, which is something that we have not seen in a couple of years. This of course made the Euro a bit more attractive, but at this point I think the only thing you can count on is a ton of noisy behavior over the next couple of weeks as we try to sort things out.

For a look at all of today’s economic events, check out our economic calendar.

British Pound Bounces After Initial Selloff

The British pound has initially sold off during the trading session on Wednesday to reach down towards the ¥155.50 level, before turning around and showing signs of life again. Ultimately, this is a market that I think is trying to find its footing and if risk appetite picks up a bit, that could help it happen as well. As long as we can stay above the ¥155 level, it is very likely that this market will continue to find buyers on every short-term debt.

GBP/JPY Video 20.01.22

To the upside, the ¥157.50 level more than likely will be resistance, and of course the target. That being said, I would anticipate seeing a lot of noisy behavior, which is typical for this pair anyway. Keep in mind that this market has gone parabolic recently, so a little bit of working off of the froth makes quite a bit of sense. On the other hand, if we were to break down below the ¥155 level, it could be a very negative turn of events, probably tied together with the idea of a general “risk off” market in general.

Any break down below there could open up a move towards the ¥152.50 level, and then possibly the ¥150 level after that. Keep in mind that the market recently went parabolic and then did exactly that. Because of this, is very possible that we could continue to see a huge and volatile range, but obviously we would need to see some type of catalyst. At this point, it looks like the British pound continues to be very strong in general, so I think that will continue to be the case here as well.

For a look at all of today’s economic events, check out our economic calendar.

Australian Dollar Reaches Towards 50 Day EMA

The Australian dollar has rallied a bit during the trading session on Wednesday to reach towards the 50 day EMA again, a barrier that has been difficult to break above over the last three candlesticks. If we can, then it opens up the possibility of a move towards the 0.7280 level, where we had broken down from a couple of days ago. When you look at this chart, it does not take much imagination to see a channel, so that might very well be where we are heading.

AUD/USD Video 20.01.22

To the downside, if we break down below the 0.7160 level, it is possible that we could go looking towards the 0.71 handle, an area that has been slightly supportive in the past but quite frankly I think that is minor support and will go looking towards the 0.70 level underneath. All things been equal, this is a market that continues to see a lot of choppiness, but a lot of it comes down to the Chinese economic figures which of course are starting to show signs of life again, despite the fact that currently the Chinese economy is starting to move in the right direction.

Keep in mind that the Aussie dollar is highly sensitive to the Chinese mainland as there is so much trade between the two economies. As long as China can clean its act up, the Aussie dollar should be a beneficiary, despite the fact that interest rates in America are rising. Regardless, we are a couple of levels to look at, and therefore trade against.

For a look at all of today’s economic events, check out our economic calendar.

S&P 500 Takes Beating on Tuesday

The S&P 500 has sold off a bit during the trading session on Tuesday as we are threatening an uptrend line and the 4600 level as I record this. That being said, a lot of traders out there are freaking out about the idea of the Federal Reserve raising interest rates. In fact, the only thing that anybody seems to be talking about, so at this point in time I think this is a story that is eventually going to run out of steam. Ultimately, even though the Federal Reserve is tapering and theory, the reality is they may not be able to do so, at least as things stand right now.

S&P 500 Video 19.01.22

The equity markets are likely to be extraordinarily volatile for the next couple of months, so most traders are going to need to be very cautious with jumping in and most certainly will have to pay close attention to the position sizing aspect of the market itself. If this keeps up, we will probably get some type of wicked selloff, followed by the mother of all buying opportunities. 4500 level underneath is essentially the absolute bottom of the market right now, and as we are worried about the Fed tightening cycle, it is very possible we could get a lot of sideways choppiness over the next couple of weeks, if not months.

We are in the midst of the “blackout” for the Federal Reserve, meaning that we are just a couple of weeks away from a meeting and therefore they will not be speaking publicly. This could lead to a lot of sideways and choppy behavior as well.

For a look at all of today’s economic events, check out our economic calendar.

Silver Markets Looking to Break Out

Silver markets have rallied during the trading session on Tuesday to reach towards the $23.50 level. This is an area that of course is a major resistance barrier, and we need to break above there and perhaps even close above there in order to go higher. All things being equal, the 200 day EMA is sitting at roughly $24 level, and that of course makes quite a bit of sense as a target and an area of trouble. If we can break above there, then obviously silver really starts to pick up momentum, and it is likely we would go looking towards the $25 level.

SILVER Video 19.01.22

That being said, if we pull back from here it is likely that the bottom of the candlestick for the trading session on Tuesday should offer support. All things been equal, this is a market that I think will be very noisy but pay special attention to the US dollar as a falling US dollar could turbocharge silver and send it much higher. I would also bring to your attention to the $22 level underneath as it has been major support.

The $22 level offer support all the way down to the $21.50 level, and therefore if we were to somehow turn around a break down below there it would be catastrophic for silver. That being said, this looks like a market that is trying to bounce from extreme lows, and perhaps get towards the top of the larger consolidation area, meaning that we could very well get to that $25 level given enough time.

For a look at all of today’s economic events, check out our economic calendar.

Crude Oil Markets Pierces to Make New Highs

WTI Crude Oil

The West Texas Intermediate Crude Oil market has rallied rather significantly during the course of the trading session on Tuesday, breaking out above the $85 level initially. That being said, the market pulling back shows signs of exhaustion, but at this point in time it is obvious that oil wants to go higher. There was a drone attack in the United Arab Emirates that had people jumping into the market initially, but quite frankly this is one that I think the most important thing you can think about is simply buying on dips. The $80 level underneath would be massive support, but I would be surprised if we even got anywhere near there.

Crude Oil Video 19.01.22

Brent

Brent markets also reach higher to show signs of strength and bullish pressure. That being said, a pullback does make a certain amount of sense, so if we do get that pullback, I think there will be plenty of value hunters underneath willing to take advantage of it. Quite frankly, this is a market that I have no interest in shorting, especially as the overall fundamental situation for energy looks to be so strong. With this, I think that any time you get an opportunity to pick up a little bit of value, you have to take advantage of it.

If we can get a shrinking US dollar, that will only add more fuel to the fire, giving us an opportunity to see even more tailwinds in a market that is incredibly strong to begin with. Keep in mind that oil does tend to be very volatile, so do not jump in with a huge position right away.

For a look at all of today’s economic events, check out our economic calendar.

Natural Gas Markets Look Ready to Continue Consolidation

Natural gas markets initially dipped during the trading session but then turned around to find signs of support. That being said, the market looks as if it is ready to reenter the consolidation area that we have made over the last 48 hours, which makes quite a bit of sense as we see a major storm in the United States driving up demand, at least short term. Because of this, I think this is a market that you need to pay close attention to but given enough time we will have to make a bigger decision. That bigger decision for me is more than likely going to be lower.

NATGAS Video 19.01.22

This does not mean we cannot bounce in the short term, and quite frankly it looks like we probably will. The $4.75 area is resistance from what I can see, especially when you look at the area as being the bottom of that massive triangle that I have marked on the chart. It has been tested already, so whether or not we tested again is a completely open question but the think that natural gas to suddenly just going to rip through all of that resistance easily is a bit of a farce.

Natural gas is a market that almost certainly will continue to see selling pressure, due to the fact that there is plenty of it, and quite frankly most people tend to forget that this is a US market, meaning that the issues in Asia and Europe have nothing to do with what is going on here. Unfortunately, I have even seen well respected professionals make that mistake.

For a look at all of today’s economic events, check out our economic calendar.

Gold Markets Find Buyers on Dips

Gold markets went back and forth during the trading session on Tuesday in violent swings in both directions. Quite frankly, this is a market that has been nothing but trouble over the last couple of weeks, as people are trying to figure out what it is that is going on in general when it comes to growth and risk appetite. With this being the case, the market is probably going to continue to see a lot of volatility, but it is worth noting that the gold market found buyers near the 50 day EMA that is starting to curl a little bit higher.

Gold Price Predictions Video 19.01.22

To the upside, the $1830 level looks to be resistance, and therefore think it is probably worth paying close attention to that area, because if we can break above there, especially on a daily close, it is very likely that we will continue to see gold take off to the upside and go looking towards the $1875 level. On the other hand, if we were to break down below the $1800 level, then we will test the support level at the $1785 level, which looks less likely after the action that we had seen early in New York trading as the futures market really took off.

We have seen a lot of noisy trading, but in the end, it looks like people are willing to buy anything close to being thought of as potential value in the gold market. Pay attention to the US dollar, because if it continues to sell off, that helps gold as well.

For a look at all of today’s economic events, check out our economic calendar.

US Dollar Reaches Resistance but Pulls Back

The US dollar has rallied during the trading session on Tuesday to reach towards the ¥115 level before pulling back a bit to form a bit of a shooting star. That being said, I do think that this market will probably continue to rally over the longer term but pay close attention to whether or not the market is moving based upon interest rates in America, or perhaps a fear-based trade. That being said, it is interesting to see that the market gave back his quickly as it did, and the Japanese yen is starting to strengthen against multiple currencies. Because of this, it suggests that we are more or less that this is a fear-based trade more than anything else, so once things calm down a bit, I do believe that we will turn back around.

USD/JPY Video 19.01.22

With that in mind, I prefer this as a “buy on the dips” situation. Ultimately, this is a market that I do think will eventually try to reach the highs again, but I am not necessarily sold on the idea of jumping “all in” right away. Full disclosure: I have already closed my long position in this pair and will more than likely look to find some type of dip in order to take advantage of any type of value. I think there is plenty of support extending all the way down to the lows of the Friday session last week. With that in mind, I am simply looking to short-term charts in order to take advantage of any type of value that occurs.

For a look at all of today’s economic events, check out our economic calendar.

British Pound Testing Major Support Region

The British pound has fallen rather hard during the course of the trading session on Tuesday to reach down towards the 200 day EMA, an indicator that of course a lot of people pay close attention to. Now that we have pulled back like this, it is time to start watching this general vicinity to see whether or not we are going to bounce. Quite frankly, we also have the downtrend line from the descending channel that we had been in, so I think that this is going to be a crucial region to watch for a longer-term move.

GBP/USD Video 19.01.22

If we can start to bounce from here, I will probably put a small position on to go looking towards the 1.37 handle. However, if we close significantly below that downtrend line, then I think we will probably test the 1.35 level. A breach of the 1.35 level of course is a very negative turn of events, perhaps sending this market right back into the negativity that we had seen previously. Regardless, this is a market that had gotten far too ahead of itself for a while, so at this point in time it does make a certain amount of sense to simply wait and see what the market does next.

Given enough time, it will give you a sign as to where we are going next, and therefore if you are just patient enough, you should see a clear set up over the next couple of days. That being said, as Jesse Livermore used to say, “Sometimes, we are paid to wait.”

For a look at all of today’s economic events, check out our economic calendar.