Silver jumped the gun today as it crashed through the support level at 14.126 on the back of a stronger USD as Dudley (New York governor of the FED) mentioned that we are a long way from further QE in the US market, as it still sees itself well positioned to the possibility of lifting interest rates off their record lows. Either way the push through has pushed silver into uncharted territory in the short term and many will now be expecting to see a very bearish trend to continue. There is certainly a very bearish feel for metals at present and with stronger USD a real possibility we could see the market punish commodities - a long term trend at present.
In continuing the trend oil slipped lower today after managed to recover on the charts. This was despite the recent oil data which showed a deficit of 5 million barrels for the previous month, now normally this would lead to a jump in the price of oil, however the USD continues to show strength leading to a sell-off in oil. After a brief touch at resistance 39.88 the market has slipped lower, and will now be looking for lower lows, and most likely a push for support around the 35.00 mark on the charts.
The kiwi continues to feel pressure and it was a slight surprise today as economic data was much stronger than expected. With trade balance data coming in at -649M (exp -675M) the market was fairly positive pushing resistance at 0.6506 on the charts, before falling back to continue a pattern of lower lows on the chart. I now expect to see the NZD struggle to stop pressure from forcing it down to at least 0.6000 at this stage, as weak commodity prices and an economy that is coming off boil struggle to drive market appreciation for the high flying kiwi.
The GBPUSD has been the largest trade of the day for markets as it slipped sharply and landed flat on support, where it has struggled to move at all at 1.5454 on the charts. I am surprised at this sudden devaluation of the pound as the UK economy has certainly seemed like one of the strongest globally when it comes to first world economies. I would be surprised to see further dips on the chart and a push back up the chart is a real possibility but only if we see weaker US data, something that can be a bit rare in today's market environment.
Lastly, the USDJPY is one to watch today as CPI data is due out for Japan. Kuroda and Abe will be watching the data and how markets react, and many are looking for further strengthening of the USDJPY as markets look to take back on risk assets after the recent Chinese melt down which has so far lasted a very short space of time overall. Resistance for this pair is liking to be found at 120.559 on the charts and I would expect to see the pair creep up the charts to touch this key point.
Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.