Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks Bull Market Smoking Gun - 25th May 24
Congress Moves against Totalitarian Central Bank Digital Currency Schemes - 25th May 24
Government Tinkering With Prices Is Like Hiding All of the Street Signs - 25th May 24
Gold Mid Tier Mining Stocks Fundamentals - 25th May 24
Why US Interest Rates are a Nothing Burger - 24th May 24
Big Banks Are Pressuring The Fed To Losen Protection For Depositors - 24th May 24
Another Bank Failure: How to Tell if Your Bank is At Risk - 24th May 24
AI Stocks Portfolio and Tesla - 23rd May 24
All That Glitters Isn't Gold: Silver Has Outperformed Gold During This Gold Bull Run - 23rd May 24
Gold and Silver Expose Stock Market’s Phony Gains - 23rd May 24
S&P 500 Cyclical Relative Performance: Stocks Nearing Fully Valued - 23rd May 24
Nvidia NVDA Stock Earnings Rumble After Hours - 22nd May 24
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24
Micro Strategy Bubble Mania - 10th May 24
Biden's Bureau of Labor Statistics is Cooking Jobs Reports - 10th May 24
Bitcoin Price Swings Analysis - 9th May 24
Could Chinese Gold Be the Straw That Breaks the Dollar's Back? - 9th May 24
The Federal Reserve Is Broke! - 9th May 24
The Elliott Wave Crash Course - 9th May 24
Psychologically Prepared for Bitcoin Bull Market Bubble MANIA Rug Pull Corrections 2024 - 8th May 24
Why You Should Pay Attention to This Time-Tested Stock Market Indicator Now - 8th May 24
Copper: The India Factor - 8th May 24
Gold 2008 and 2022 All Over Again? Stocks, USDX - 8th May 24
Holocaust Survivor States Israel is Like Nazi Germany, The Fourth Reich - 8th May 24
Fourth Reich Invades Rafah Concentration Camp To Kill Palestinian Children - 8th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

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.


© 2005-2022 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