Best of the Week
Most Popular
1. Climate Change Mass Extinction - Birds, Bees and Bugs: Going Going Gone - Richard_Mills
2.A Purrrfect Gold Price Setup! - Peter_Degraaf
3.Who Finances America's Borrowing? Recession Indicator for Independent Thinkers Part 2 - F_F_Wiley
4.America’s One-sided Domestic Financial War - Raymond_Matison
5.Gold Price Summer Doldrums - Zeal_LLC
6.Two Key Events Will Unleash Gold - Jim_Willie_CB
7.Billionaire Schools Teacher in NAFTA Trade Talks - Richard_Mills
8.Get Out Of Crypto Cannabis Bubble Before It Pops and Move Into Bargain Basement Miners - Jeb_Handwerger
9.Stock Market Could Pullback for 1-2 weeks, But Medium Term Bullish - Troy_Bombardia
10.G7 Chaos, Central Banks and US Fed Will Drive Stock Prices This Week - Chris_Vermeulen
Last 7 days
What Did Crude Oil - Platinum Link Tell Us Last Week? - 17th Jul 18
Gold And The Elusive Chase For Profits - 17th Jul 18
Crude Oil May Not Find Support Above $60 This Time - 17th Jul 18
How Crazy It Is to Short Gold with RSI Close to 30 - 16th Jul 18
Markets Pay Attention Moment - China’s Bubble Economy Ripe for Bursting - 16th Jul 18
Stock Market Uptrend Continues, But... - 16th Jul 18
Emerging Markets Could Be Starting A Relief Rally - 16th Jul 18
(Only) a Near-term Stock Market Top? - 16th Jul 18
Trump Fee-Fi-Foe-Fum Declares European Union America's Enemy! - 16th Jul 18
US Stocks Set For Further Advances As Q2 Earnings Start - 15th Jul 18
Stock Market vs. Gold, Long-term Treasury Yields, 10yr-2yr Yield Curve 3 Amigo's Update - 15th Jul 18
China vs the US - The Road to War - 14th Jul 18
Uncle Sam’s Debt-Money System Is Immoral, Tantamount to Theft - 14th Jul 18
Staying in a Caravan - UK Summer Holidays 2018 - Cayton Bay Hoseasons Holiday Park - 14th Jul 18
Gold Stocks Summer Lows - 14th Jul 18
Trump US Trade War With China, Europe Consequences, Implications and Forecasts - 13th Jul 18
Gold Standard Requirements & Currency Crisis - 13th Jul 18
Focus on the Greenback, Will USD Fall Below Euro 1.6? - 13th Jul 18
Stock Market Outlook 2018 - Bullish or Bearish - 13th Jul 18
Rising Inflation is Not Bearish for Stocks - 13th Jul 18
Bitcoin Picture Less Than Pretty - 13th Jul 18
How International Observers Undervalue the Chinese Bond Market - 13th Jul 18
Stocks Trying to Break Higher Again, Will They? - 12th Jul 18
The Rise and Fall of Global Trade – Redux - 12th Jul 18
Corporate Earnings Q2 2018 Will Probably be Strong. What This Means for Stocks - 12th Jul 18
Is the Relative Strength in Gold Miners to Gold Price Significant? - 12th Jul 18
Live Cattle Commodity Trading Analysis - 12th Jul 18
Gold’s & Silver’s Reversals’ Reversal - 12th Jul 18
The Value of Bitcoin - 11th Jul 18
America a Nation Built on Lies - 11th Jul 18
China, Asia and Emerging Markets Could Result In Chaos - 11th Jul 18
Bullish Gold Markets in the Big Picture? - 11th Jul 18
A Public Bank for Los Angeles? City Council Puts It to the Voters - 11th Jul 18
Yield Curve Inversion a Remarkably Accurate Warning Indicator For Economic & Market Peril - 11th Jul 18
Argentina Should Scrap the Peso and Dollarize - 11th Jul 18
Can the Stock Market Close Higher For a Record 10th Year in a Row? - 11th Jul 18
Why Life Insurance Is A Must In Financial Planning - 9th Jul 18
Crude Oil Possibly Setting Up For A Big Downside Move - 9th Jul 18
BREAKING: New Tech Just Unlocked A Trillion Barrels Of Oil - 9th Jul 18
How Trade Wars Penalize Asian Currencies - 9th Jul 18
Another Stock Market Drop Next Week? - 9th Jul 18
Are the Stock Market Bulls Starting to Run? - 9th Jul 18

Market Oracle FREE Newsletter

5 "Tells" that the Stock Markets Are About to Reverse

Daily Futures Markets Commentary for 7th July 09

Commodities / Forex Trading Jul 08, 2009 - 07:18 AM GMT

By: BrewerFuturesGroup

Commodities

Traders are looking for the September Canadian Dollar futures to open higher this morning. There may not be any major fundamental news driving this market higher this morning, but nonetheless traders like the long side. The main driving force behind this rally seems to be technically driven as many indicators have reached oversold levels.


On June 1 this contract topped at .9275. This high capped a huge rally that began on March 9 at .7700. The entire rally coincided with the rally in equities and commodities and clearly demonstrated investor desire for higher yields.

As equities rallied along with gold and crude oil, traders sold U.S. Dollars and bought Canadian Dollars. Another reason for the rally was that the Canadian economy seemed to be in a better position to recover than the U.S. economy. The Canadian banking system was certainly not as devastated by the credit crunch as much as the U.S. system and the Bank of Canada had not pumped that much stimulus into the economy.

As the U.S. Dollar was facing weakness because of the threat of inflation, the Canadian Dollar was not expected to face such a threat. In addition, the Bank of Canada only threatened quantitative easing while the Fed spent billions trying to keep interest rates down. Clearly the Canadian Dollar looked like the better of the two currencies.

Around June 1, the Bank of Canada began expressing concerns regarding the rapid rise in the Canadian Dollar. It felt that the rise in its currency would hurt the export market which is a major component of the Canadian economy. At this time speculators began to lighten up positions in anticipation of action by the Bank of Canada. Some assumed that the BoC would intervene while others thought the BoC would enact quantitative easing to try to boost the economy. Whatever the reason, speculators began liquidating and the market began a shortterm correction.

Recently this market began to slow down its rate of decent despite lower gold, crude oil and equity markets. This was a sign that the buying was becoming greater than the selling.

Technically, this market is currently finding support at 50% of the April low at .8000 and the June high at .9275. If this market establishes support at this level of .8638 then traders should start to look for bottom pickers to begin to trigger the start of a short-covering rally which could take the September Dollar back to at least .8855 to .8923 over the short run.

Today seems to be shaping up into a counter-trend day. The recent trend has been stronger Dollar, weaker commodities and equities. Overnight this sentiment seems to have shifted. Although it doesn’t look like traders have completely abandoned a strong Dollar scenario, buying has been stable enough overnight to trigger the start of short-covering rallies in many of the markets that had declined recently.

August Gold is expected to trade higher today. Although there is no apparent inflation, the inability to break this market under $900 has caused many shorts to cover and take protection while they sort out the news. Regaining $930 could be constructive to this market and could put it on pace to challenge $952.00. It may be too early to tell if this is a bottom or just shortcovering, but gold is definitely a market that should be on your radar at this time.

Please do not hesitate to contact us at 1-800-971-2440, with any questions.

www.brewerfuturesgroup.com

futuresblog@brewerfuturesgroup.com

DISCLAIMER: Futures and options trading involves substantial risk of loss and is not suitable for every investor. The valuation of futures and options may fluctuate, and, as a result, clients may lose more than their original investment. The impact of seasonal and geopolitical events is already factored into market prices. Prices in the underlying cash or physical markets do not necessarily move in tandem with futures and options prices. In no event should the content of this correspondence be construed as an express or implied promise, guarantee or implication by or from Brewer Futures Group, LLC, Brewer Investment Group, LLC, or their subsidiaries and affiliates that you will profit or that losses can or will be limited in any manner whatsoever. Loss-limiting strategies such as stop loss orders may not be effective because market conditions may make it impossible to execute such orders. Likewise, strategies using combinations of options and/or futures positions such as “spread” or “straddle” trades may be just as risky as simple long and short positions. Past results are no indication of future performance. Information provided in this correspondence is intended solely for informational purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.


© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules