Silver
The previous week for silver has been very difficult, and the fact that we had been so bullish in the early part of the week almost seems forgotten as I write this. The market tried to get to the $32.35 level, but as soon as they got anywhere near there, we started to see a lot of selling pressure. As I write this article, silver has plummeted down to the $30.44 level, and now it is looking for some type of support. I do think there is support near the $30 level, but I would be watching for some type of bounce before getting involved to the upside. As far as selling is concerned, I am a bit hesitant to do so at the moment.
Gold
Gold initially took off to the upside during the week as well, but unlike silver, it looks like we will be closing with at least a little bit of positive pricing. Nonetheless, I do think that gold is probably entering a larger consolidation area, due to the fact that we had been so bullish most of the year and the fact that it seems like that the $2800 level is a major barrier to overcome. I think between now and the end of the year we probably see a lot of back and forth consolidation, but I still favor buying dips.
GBP/USD
The British pound initially tried to rally during the trading week but started to pull back just a bit as we got close to the 50 Week EMA. Perhaps more importantly, on Friday we have got the GDP numbers causing havoc for the market, as the British economy has actually slowed down. The expected reading of 0.1% was met with an actual reading of -0.1% month over month. In a week that we have seen the Swiss panic and cut 50 basis points, while the Europeans cut 25 basis points, it looks as if money continues to flow toward North America.
EUR/USD
The euro initially tried to rally, but then fell toward the 1.05 level. At this point, it looks like the market is just simply consolidating right around that 1.05 level, and I don’t see much in this market right now that leads me to believe we are going to see a massive run higher. In fact, I would not be impressed at all by a rally in this market that occurs until we get above the 1.0750 level. I suspect we will continue to see short-term rallies faded going forward as the European economy is struggling to say the least.
NASDAQ 100
The NASDAQ 100 had a rather noisy week, and of trying to head into the weekend like it was on fire, screaming to the upside. However, we have seen a little bit of a get back, and I think at this point in time we are likely to see more consolidation going forward, but more with a “buy on the dips” mentality, due to the fact that the Santa Claus rally is something that is certainly going to be on the minds of traders, as people are trying to pad their results for the year for clients. Short-term pullbacks again I believe are going to be bought going forward.
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USD/CHF
The US dollar has screamed higher against the Swiss franc, and that should not be a huge surprise due to the fact that the US dollar was strong to begin with. However, the Swiss National Bank cut interest rates by 50 basis points this week, more than the expected 25 bps. With that, it looks like the Swiss are quite a bit concerned about their economy, and probably more likely, the European economy as 85% of Swiss export inter-that region. With this being the case, I think the US dollar continues to go higher in any short-term pullback I think offers a nice buying opportunity. I have no interest in shorting this pair.
West Texas Intermediate Crude Oil (US Oil)
The WTI Crude Oil market had a very strong week, as it looks like we are trying to do everything we can to get to the $72.50 level. This is an area that’s been resistant a couple of times in the past, so it is worth watching. I think at this juncture, the market is trying to determine whether or not we can finally break out above there. I do believe it happened sooner or later, but I don’t necessarily think it has to happen right now. On a move above the $72.50 level, I suspect that this market gets bullish rather quickly. As things stand right now, I think we are still consolidating.
USD/JPY
The US dollar has launched against the Japanese yen, as the US dollar continues to be the only currency in the world that most people want. The Bank of Japan of course has no chance of tightening monetary policy, and we now seeing traders bet that there is an 80% chance that the Federal Reserve will have to sit still in January. While I do expect an interest rate cut at the December meeting, it’s very likely that Jerome Powell will suggest that they will have to sit still for a while.
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