It's been a slow start to the first day of trading, but then Monday's are never top notch for trading the markets.
Oil markets continue to be a popular one for traders as they look to capitalise on the strong runs we have seen over the previous month. Certainly with oil held up at the current support level of 44.33 it's likely markets will be taking aim at the next big move and playing both sides of the coin here is an option. If we also saw more positive talk about Iran, rather than global political rhetoric out of the middle east then it may be justified that we could see oil prices slip even lower. Sustainable in the long run, it's unlikely as over the next few years it's likely we will see a strong price rebound.
If we close below 44.33 I would be very careful as we could see the market use this as resistance and look to reject of the level and rush down lower. Certainly if that is the case we could see a very strong move for the 40.00 mark and a chance of strong support again.
The Australian dollar has shown a good cross on the charts, but I am weary of further bullish movements at present. The fight back today was lead in part by a rise in commodity prices (albeit brief) and a weaker US dollar. Additionally, Chinese CPI y/y came in at 1.6% and this has boosted the appeal of the Australian dollar, but all long term data points to a Chinese slowdown for the economy.
Resistance levels are holding up nicely at 0.7423 on the charts, and I certainly expect that we could see a push back from this level and a rush lower as there is nothing at all economically speaking to hold up the current economic situation. Certainly a target of 0.7304 is something I would be looking to target on the charts in the short to medium term, especially with the volatility we have seen lately.
Silver has also been a star performer as of late, as we saw a massive resurgence in the metal after a strong double bottom on the charts. The rise up the charts to 15.442 was a key level of resistance that had been looking to hold for some time, and I would expect to see further tests on the charts for it. Does silver though have a chance of a further bullish run? Yes most likely, but it will need to tackle that level quite strongly on the charts and see further US weakness in the long run. Something that I am certainly not sure of, along with many other analysts and economists out there.
Lastly the EURGBP is one to have on the radar, as it continues to be tested on a strong bearish trend line. I will be watching this one closely and looking for bearish rejections of the trend line as the GBP continues to strengthen against the Euro in the long term.
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