Natural gas markets have broken down significantly during the course of the week to slice through the $2.60 level, and then reaching towards the $2.40 level. All things being equal, when you look at the longer-term chart you can make an argument for a bit of a head and shoulders, and therefore we could see a bit of a sellout. This makes quite a bit of sense as we are trading the March contract.
NATGAS Video 25.01.21
A breakdown below the $2.30 level could open up a move down towards the lows again, perhaps reaching as low as the $1.60 level. That being said, it does not necessarily mean that we get there right away, but as temperatures rise, demand for natural gas will of course plummet. Furthermore, the entire idea of stimulus making natural gas take off to the upside is a bit of a laugh, as it has not done it over the years and of course we are still oversupplied when it comes to natural gas it is not even funny.
I believe that rallies are to be sold into, especially near the $2.80 level which is already seen a significant amount of selling pressure in the past. At this point, any time we get a bit of a rally, it should be looked at with suspicion because the oversupply of natural gas is more of a longer-term structural problem than anything else. With this being the case and of course warmer temperatures, I only sell natural gas and have no interest in trying to buy it. In fact, I do not even have a scenario where I would be a buyer of this commodity.
Gold markets have gone back and forth during the course of the week, showing signs of volatility yet again, reaching down towards the 50 week EMA. However, we have bounced from there and formed a candlestick that is essentially a hammer. This suggests that we are possibly going to see a bit of a bounce but as long as stimulus is all over the place and we are not sure what is going to happen with that scenario, it is obvious that we need to be very patient with the trade if we are involved in it.
Gold Price Predictions Video 25.01.20
If we can break above the highs of the week, that more than likely opens up the possibility of a move towards the $1900 level. Above there we then could see a move towards the $1960 level, but it may take some time to make that happen. After all, we are not completely sure about what happens next with the stimulus, just that there will be one. The stimulus probably will not be as big as originally thought, and that of course is something to pay close attention to. That could give a little bit of a lifeline to the US dollar in the short term, as it is oversold anyway.
As far as selling gold is concerned, I have no interest in doing so until we break below the $1700 level which would be a pretty significant move. Longer-term, I believe that we are going to go looking towards the $2100 level, but it may take a significant amount of effort to finally get there. Gold continues to be choppy, but it seems as if it is trying to form some type of bottoming pattern.
Silver markets have plunged below the 50 day EMA during the trading session on Friday to show signs of weakness, but we have turned around to continue the overall push to the upside from the recent bounce. When you look at the candlestick, it does make a little bit of a hammer, but given enough time I think what we are struggling with is the $26 level. If we can break above, there then it is likely that silver will continue much higher. Keep in mind that silver is highly sensitive to the value of the US dollar, and the overall idea of stimulus. Stimulus is a main driver of expectations when it comes to interest rates, which by default will drive down the value of currency over the longer term.
SILVER Video 25.01.21
Another thing stimulus will do is drive up the demand use for industrial silver, which will also more than likely drive up the price. That being said, if we can break above the $26 level it opens up a move towards the $27.50 level, and then eventually the $28 level. Alternately, if we were to break down below the candlestick for the trading session on Friday, then we probably go looking towards the $24 level again, an area that has been important recently. I do not have any interest in selling silver, but I do recognize that you need to pick your spots due to the fact that silver contracts can be quite volatile and cause massive problems for people’s accounts if they are not careful. In general, this is a market that I think eventually goes higher but we probably have a lot of wood to chop in the meantime.
Natural gas markets have broken down a bit during the trading session on Friday, dipping below the 200 day EMA. That being said, the market looks as if it is trying to find a certain amount of stability in this area, and perhaps a short-term bounce could happen. The market is a little bit oversold on short-term charts but given enough time I think we will be looking at a move to the upside to try and start selling again. Ultimately, this is a market that given enough time will start to look at the overall negativity coming due to the fact that there is going to be a significant lack of demand due to warmer temperatures coming.
NATGAS Video 25.01.21
At this point, bounce would probably be more of a technical bounce anyway. The 50 day EMA above at the $2.66 level will probably offer resistance, but most certainly the $2.80 level will as well. I have got no interest in trying to buy this market, because quite frankly there is so much in the way of negativity and oversupply out there that it is hard to believe you would be looking to buy this contract for anything more than a quick scalp. However, this is a market that I think will be more volatile than anything else. Regardless, I have no interest in trying to get too cute with this and I will simply wait for a selling opportunity on signs of exhaustion above. As we start to trade the March contract, this suggests that we are going to see more bearish pressure in general.
Gold markets broke down a bit during the trading session on Friday as the 50 day EMA has offered a significant amount of resistance. At this point, the 200 day EMA at the $1821 level should offer short-term support, but traders are paying more attention to the interest rates in the United States as if they start to rise is very likely that we will continue to see people flock towards the greenback. If that is the case, that can cause a certain amount of negativity on gold. However, as the reflation trade is essentially the main narrative that people are paying attention to now, it will undulate back and forth as to whether or not it is likely to happen. That has a massive influence on what happens next with the gold market.
Gold Price Predictions Video 25.01.21
If we can break above the 50 day EMA, that opens up the possibility of a move towards the $1900 level. Breaking above there then opens up a move to the $1960 level. To the downside, if we were to break down below the 200 day EMA it is likely that we could go towards the $1800 level, possibly even the $1750 level. In general, I think that we have a lot of noise here, but from a structural standpoint, it does look like there are more buyers underneath than anything else but buying dips for short-term opportunities could be the best way going forward. This is a market that continues to be very noisy, as the overall attitude of traders continue to cause major issues. However, it looks as if there is a bit of a basing pattern right now.
The US dollar has been very noisy during the course of the week to turn around and form a bit of a hammer. This is preceded by an inverted hammer as well, so that suggests that the market is likely to see a lot more back-and-forth action than anything else. The market continues to see a lot of indecision, possibly due to the fact that interest rates in the United States continue to strengthen.
USD/JPY Video 25.01.20
Beyond that, this is a market that also is pretty extended to the downside so with this being the case, I believe that you are probably going to see very noisy behavior due to the massive amount of selling pressure just above, but at the same time it looks like we are trying to turn around and show signs of strengthening. In other words, I think it is almost impossible to place a longer-term trade here, unless of course you are willing to hang onto a lot of volatility. Quite frankly, I think there are easier trades to make but one thing you can say about the pair is that we are most certainly extended to the downside so it might be time for a significant bounce.
Quite frankly, I am pretty neutral on this market from a longer-term standpoint, simply because we have seen so much choppiness on the way down that it would take some type of bigger fundamental catalyst to break through all of that and get things moving again. In the meantime, I will probably look at this as more or less a scalping type of market on shorter time frames, perhaps the best suited for day trading.
The British pound went back and forth during the course of the trading week as we are trying to discern whether or not the British pound has enough momentum to continue going higher. At this point, it looks as if the 1.3750 level will continue to be very difficult to overcome, and thereby I think a little bit of sideways action would make quite a bit of sense in this general vicinity. If we can break above the top of the candlestick, then it is likely that we go looking towards the 1.40 level above and then eventually the 1.43 level.
GBP/USD Video 25.01.20
To the downside, if we were to break down below the 1.35 handle, then I would be a little bit more bearish, perhaps thinking that the market could go down to the 1.33 handle. Ultimately though, I do not expect that to be the path of least resistance. All things being equal, the market should probably find plenty of buyers underneath, if for no other reason than the fact that the US dollar is going to continue to suffer at the hand of stimulus.
Furthermore, the British pound is simply exhausted, it is not necessarily a currency that should go straight up in the air if for no other reason than the fact that the British economy continues to be threatened by lockdowns and of course the aftereffect of the Brexit situation, but at the end of the day we are still historically cheap, so there should be value hunters out there willing to pick up the British pound every time it dips.
The British pound has gone back and forth during the course of the week, touching the bottom of the previous weekly candlestick, before turning around and piercing the 200 week EMA. The actual body of the candlestick is green, so that of course suggests that we are more bullish than bearish, but obviously we have a significant amount of work to do to break out. If and when we can break above the ¥142.50 level and opens up the market for a potential move to the ¥145 level.
GBP/JPY Video 25.01.20
Keep in mind that this pair is highly sensitive to risk appetite, so it is important to keep in mind that the overall risk sentiment around the world is going to have a massive influence on what happens here. I do believe that the ¥140 level is starting to act as a bit of a “floor the market”, so a pullback to that area might be a nice opportunity for buyers as well.
At this juncture, I believe that looking for dips to buy probably works out best, but I would not be aggressive about anything at this point. The market certainly has a lot of upward momentum, but I believe that we have figured out he is essentially a grind at this point, not some type of major breakout just waiting to happen. With this, I like the idea of finding support on a daily chart closer to the ¥140 level that I can take advantage of. Having said that, if we break above the 200 week EMA and close above there on the daily chart, I will use that as an entry signal.
The Euro has rallied significantly during the course of the week, reaching above the 1.21 handle. By doing so, this does suggest that perhaps the Euro is going to make another run towards the top of the overall range that we are in, but right now I think that we are looking at a scenario where we are trading between 1.20 on the bottom, and 1.23 on the top. In other words, we are essentially at “fair value” when you look at the markets, as we are roughly in the middle of all of this. That being said, I think you are probably better off looking at this from a range bound trading opportunity, perhaps even on lower timeframe such as the daily timeframe, perhaps even the four hour timeframe.
EUR/USD Video 25.01.20
The area above 1.23 has a significant amount of resistance that extends to the 1.25 handle, and I do think that it would take a lie of momentum to make that move above 1.25. If we do, that opens up the door to much higher pricing. Currently, the European Union is struggling with lockdowns and of course a delay in the coronavirus vaccine being distributed, so this is part of the problem we are seen. Furthermore, when you look at the overall attitude of the markets, one of the things that you need to pay attention to is that stimulus has been a major driver of the US dollar falling. At this point, stimulus is still an open question as to when and how much it will deliver. With that, I believe more choppiness is ahead for this pair.
The Australian dollar is obviously oversold when you look at the weekly chart. That being said, the market has taken a bit of a break over the last three weeks or so, and it suggests to me that perhaps we are probably best off looking for some type of pullback that we can take advantage of. On the chart, I think the most obvious spot would be somewhere in the neighborhood of the 0.75 handle. That is obviously a large, round, psychologically significant figure, and an area that we broke out of recently. With that in mind, I think that it is only a matter of time before buyers would get involved in that general vicinity.
AUD/USD Video 25.01.20
To the upside, if we can break out to a fresh, new high, then I think we go looking towards the 0.80 level. That is a large, round, psychologically significant figure that has a long history of being both support and resistance. Because of this, I think that we will almost certainly see a reaction to that area, just as it will probably be a bit of a magnet for price. Remember, the idea of getting to 0.80 is that commodities will continue to rally based upon stimulus in the United States, and of course other countries around the world.
The Australian economy is built on commodity production more than anything else so obviously they are very sensitive to things like copper pricing, iron, aluminum, etc. I have no interest in shorting this market, I think that it is only a matter of time before the buyers would come back to look for value underneath.
The US dollar has rallied initially during the trading session on Friday, reaching towards the 50 day EMA which of course is an indicator that has been important more than once in the past. You can see that we have clearly shown a favoritism towards that as significant resistance, so therefore it makes a certain amount of sense that there will be a bit of hesitation in that general vicinity. With that being the case, I am looking for some signs of exhaustion on shorter-term charts in order to start selling this pair again. However, I would note that the most recent pullback suggests that there is a little bit more of confusion here. At this point, the market is likely to see a lot of volatility, but we are still very much in a downtrend despite the fact that we have had less of a pullback.
USD/JPY Video 25.01.21
Looking at this chart, the ¥102.50 level could be the target on a breakdown, but I need to see signs of exhaustion on the short-term chart before start selling again. To the upside, I believe there is a lot of resistance that extends all the way to the ¥105 level, which is rapidly being backed up by the 200 day EMA above. With that being the case, I think it is only a matter of time before we get a nice opportunity to start shorting again. If we break above the ¥105 level, then we have to revisit the entire thesis. However, we may need a day or two to settle down before we can start shorting again.
The British pound pulled back during the trading session on Friday, as we had peeked above the 1.37 handle, but continue to look at that area as major resistance. At this point, I need to see the market break above the 1.3750 level to open up the door to a longer-term position that goes looking towards 1.40 level. At this point, the market just seems a little stretched and of course there were concerns about lighter than expected economic numbers coming out of the United Kingdom during the session, and of course Prime Minister Boris Johnson suggesting that a 500 GBP direct payment to Britons was not going to happen. This suggests that we will continue to see slowing retail sales and a country that is completely locked down in parts.
GBP/USD Video 25.01.21
Furthermore, the US dollar is getting a little bit of a bid due to interest rates are rising in the United States, so it does make the greenback a little bit more attractive. Ultimately though, this is a market that continues to grind back and forth in a bit of an easily defined upward channel, but I think a couple of days; worth of negativity may help this market build the necessary momentum to continue going higher. The 1.35 level underneath could make a significant support level for the market, especially as the 50 day EMA is also approaching that level. The market continues to see a lot of volatility, but I do think that the upward pressure is something that should be paid close attention to. All things being equal, I do believe in the uptrend over the longer term, but a correction makes quite a bit of sense.
The British pound initially tried to rally at the open on Friday but then broke back down as the ¥142.50 level above continues offer resistance. Because of this, I do suspect that we need to build up momentum before it truly breaking out to the upside, and with various economic numbers coming out softer than anticipated from London today, it is not a huge surprise to see that the pound has run out of upward pressure, at least in the short term.
GBP/JPY Video 25.01.21
To the downside, the ¥140 level is an area that will more than likely offer a bit of a “floor in the market”, and therefore I think that the market pulling back to that area will more than likely offer quite a bit of support due to the large, round, psychologically significant figure and of course the fact that the 50 day EMA sits in that same neighborhood. That was an area that previously was significant resistance, so “market memory” could come back into play as well in order to cause a bit of buying pressure. After all, most of the narrative right now is about the idea of the “reflation trade” coming into vogue again, and if that is going to be the case this pair should continue to go higher as it is more “risk on” sensitive than many other pairs.
With this being the case, as we get more good news involving the opening of economies, it is very likely that we will see a lot of noise based upon the latest headlines and the like. Coronavirus figures of course are not helping anything either.
The Euro initially shot higher during the trading session on Friday but seems to be giving back gains near the 1.22 handle. Quite frankly, the Euro is probably pricing in the idea of further lockdowns in the European Union, and possibly the struggles of distributing the vaccine as there have been massive delays. The combination of the two essentially makes Europe less competitive than the United States, even though the US has its own issues.
EUR/USD Video 25.01.21
When you look at the US Dollar Index, the US dollar has been oversold for a while, so some type of recovery would make a certain amount of sense. At this point in time, it looks like we could go back down towards the 50 day EMA, perhaps down to the 1.20 level underneath. That is an area that I think attracts a lot of attention, as there was a massive resistance barrier between the 1.20 level and the 1.19 level. With that being the case, the market is likely to see a lot of noisy behavior in general, but I think that given enough time we will continue to see that level offer a lot of interest.
At this point, I would not be surprised to see the market pull back to that general region before we see buyers come back in and try to pick this thing out. All things being equal, this is a market that I think stays in the 300 PIP range that I have marked on the chart, but probably with a slightly negative bias.
The Australian dollar has pulled back a bit during the trading session on Friday, as it looks like we are going to be happy to simply go back and forth in what could potentially be a bullish flag being built. The Australian dollar has been a major beneficiary of the perceived “reflation trade”, as it is highly levered to commodities that are quite often used when stimulus takes over. The biggest problem at this point though of course is the fact that there is a lot of questions as to how big the stimulus will be, because quite frankly the $1.9 trillion worth of stimulus is no longer a “slam dunk” as several senators have stepped out and suggested that they are not going to vote for something that big, and quite frankly are not necessarily in a huge rush to make anything happen. The idea of a lack of stimulus will more than likely have money flowing back into the US dollar.
AUD/USD Video 25.01.21
That being said, there will be stimulus given enough time, perhaps reaching down towards the 50 day EMA. The 0.75 level also offers a significant amount of support, so if we did pullback, I think that is about as far as it goes. On the other hand, if we turn around a break above the top of the bullish flag that is being built, that is obviously a bullish sign and it should open up the door for a move towards the 0.80 level above which looms large from a psychological and structural standpoint. If we broke down below the 0.75 handle, it is possible we may have further to go but at this point I am leaving that as goes a “I will cross that bridge when I get to it” type of scenario.
The S&P 500 has broken a bit higher during the trading session, gaining ever so slightly to break above the 3850 handle. However, it looks as if we are running out of momentum which makes quite a bit of sense considering that we have been on an upward trajectory in ad infinitum. I believe that the 3800 level underneath should continue to be supported, but right now Wall Street is waiting to see how much “cheap money” it is about to get. After all, we are in the midst of earnings season and that might be the excuse to sell off the S&P 500, but the end result is to throw a big enough tantrum to make the Federal Reserve step in. Unfortunately, this is a beast of the Federal Reserve is making, and it is now something that they have to live with.
S&P 500 Video 22.01.21
To the downside, I see the uptrend line in the 50 day EMA as both potential support levels, and areas that I would be willing to jump in with a bigger position. In the meantime, I do think that buying dips does typically work but we are getting a little bit stretched at this point so at the very least we may have to kill a little bit of time. To the upside, I still believe that we are going to try to get to the 4000 level, but it is not going to be easy to get there, and there will of course be the occasional head fake along the way.
Silver markets have tried to break above the psychologically and structurally important $26 level during the trading session on Thursday but seem to be running into a little bit of trouble. Nonetheless, it certainly looks as if we are trying to bottom out and I do think that eventually we do go higher. Because of this, I think that pullbacks will continue to be buying opportunities but silver knees stimulus to make it truly sore. If we break above the highs of the trading session on Thursday it could open up the possibility of a move towards the $27 level, possibly even as high as $28 given enough time.
SILVER Video 22.01.21
All things being equal, I do not have a scenario in which a willing to short the silver market, because I believe that the $24 level has shown us just how supportive it is going to be. Below there, we also have the 200 day EMA which I believe will offer support as well. With everything that I see on the chart, there is no reason to think that we are suddenly going to melt down, so I do like the idea of the longer-term “buy-and-hold strategy”, as well as “buying on the dips.” It really comes down to your timeframe, but I do think that it is only a matter of time before we see a reason to go higher, more than likely in a press conference or bill signed into law in Washington DC to increase spending rapidly.
The West Texas Intermediate Crude Oil market has shown itself to be rather lackluster during the trading session on Thursday, as we begin to wonder about stimulus and how long it will take to get here, let alone how big it is going to be. After all, the market has been anticipating stimulus for a while so one has to wonder whether or not it is completely priced in? That is going to be the case, then you have to wonder what the next catalyst for higher oil prices might be, as there is not much on the horizon due to the fact that we already know that OPEC has been cutting production.
All things been equal though, I do think that it is only a matter of time before we see some type of movement, and I suspect that the next move is probably to pull back towards the $50 region.
Crude Oil Video 22.01.21
Brent also showed a very serious lack of interest during the trading session, so I think it should be looked at through the prism of a market that may have gotten a little bit ahead of itself as well. However, you could make an argument for a bullish flag, so I am certainly not going to be looking to short this market. If I were to short crude oil it would be in the WTI grade. To the upside if we can clear the $57 level then we can fulfill the move to the $60 level. In the meantime, we might be susceptible to short-term pullbacks, but I still believe that there are plenty of buyers underneath waiting.
Natural gas markets fell again during trading on Thursday, as we are rolling over into the March contract. This is typically a time of year we start to see serious selling, based upon the idea of warmer temperatures coming sooner rather than later. With this, I look at any rally as a selling opportunity, especially if we can get near the 50 day EMA above or even better yet near the $2.80 level. The 200 day EMA in and of itself will more than likely cause a bit of a bounce but I would not anticipate that it is going to save the market longer term.
NATGAS Video 22.01.21
There is stimulus coming but quite frankly that has almost nothing to do with natural gas. The biggest problem natural gas faces is that it is so overabundant. Simply put, we will never be able to wipe out the supply unless of course we stop drilling altogether. That is going to happen anytime soon and every time that the market does make a significant move to the upside, the drillers go right back to work. This is a longer-term secular bear market, although price obviously cannot go to zero dollars anytime soon. Because of this, look at rallies that show signs of exhaustion as a gift to start shorting yet again. I do believe that it will be choppy, but still have a very strong downward bias. In fact, I do not have a scenario in which a willing to buy this market, if you squint, you can even make out a bit of a head and shoulders pattern on the daily chart.
Gold markets have pulled back just a bit during the trading session on Thursday to show a little bit of hesitation, but quite frankly at the end of the day we have just seen a massive bounce from a major technical level in the form of the 200 day EMA. It is because of this that I think that the market will eventually go looking to higher levels, not to mention the fact that we have a massive amount of stimulus out there so this suggests that we will continue to see demand for gold, as a hedge against the perceived inflation coming down the road. Whether or not we actually get that inflation might be a different question, but at this point it looks like the US dollar remains on its back foot.
Gold Price Predictions Video 22.01.21
The $1900 level above makes a nice target initially, but eventually I think we go beyond that to look towards the $1960 level. To the downside I believe that the 200 day EMA will continue to offer support, right along with the $1800 level. Underneath there, we have a significant area all the way down to the $1750 level that I think causes a certain amount of support as well. With that being the case, I like the idea of buying short-term pullbacks and I do believe that eventually gold goes much higher. Stimulus coming out the United States will most certainly make this happen by itself, and then of course we have the technical support underneath also.