The US dollar has been all over the place during the course of the training week, as we are shopping around in a 300 point range. With both the United States and Canada releasing jobs figures on Friday, it’s very likely that this market will remain neutral until then. If and when the market can break out of this range between 1.32 on the bottom and 1.35 on the time, it should dictate the next swing for the rest of the year.
The EUR/USD has recovered after initially falling during the week, to break above the 1.04 level. However, we closed below their later in the day, and it suggests that perhaps we are running into a bit of trouble. Keep in mind that the previous weekly candlestick was a shooting star, and we were not able to break above it. If we break down below the bottom of the candlestick for the week, then it opens up the possibility of a move down to the 1.01 level, maybe even parity. On the other hand, if we turn around a break above the 1.05 level, it very well could lead to a resumption of the bullish pressure in this pair and make a serious attempt at changing the overall trend.
The GBP/USD initially dipped a bit during the trading week but ended up rallying above the 1.20 level. This is an area that of course attracts a certain amount of attention, but it should be noted that when you look at the shorter time frames, there is a significant amount of noise between there and the 1.22 level. Because of this, it’s very likely to be choppy over the next several sessions as the world awaits to see what the labor situation is going to be like in America. That being said, I would expect a very noisy week as this market is overstretched, to say the least.
The AUD/USD had a relatively strong week after initially falling. The shooting star from the previous week was not broken above though, so it’s not like we have the “all clear” quite yet. I anticipate this might be a somewhat choppy market during the course of the week, as we wait for the jobs number, and of course, have to pay close attention to the commodities markets as the Aussie is so highly levered to them. Ultimately, if we break down below the bottom of the candlestick for the week, that could open up a move down to the 0.65 level, an area that has been important a couple of times.
The USD/CHF has fallen significantly for the bulk of the week but still remains just above a support level. The 0.93 level seems to be a significant barrier, so as long as we stay above there it’s likely that we could see a potential bounce. However, if we break down below that level is likely that the US dollar starts to plummet toward the 0.92 level. One thing to look at is the size of the massive candlestick from a couple of weeks ago, but it’s also worth noting that the market has not been able to fall since. I think we have a huge fight on our hands.
The S&P 500 had a positive week, but it’s probably worth noting that it was only 3 true days of trading, and even then, the volume was fairly light. The market finds itself at the 200-Weekly EMA, an area that does attract a certain amount of attention. We are just above the 4000 level, but I think that this is a market ultimately looking for some type of reason to go higher, so it will more likely than not find it. That being said, be cautious about the Friday session, due to the fact that the jobs number will obviously have a lot of influence on the volatility that we see next.
Gold markets have initially fallen a bit during the trading week but ended up turning around to show signs of life as we have formed a hammer sitting on top of the previous downtrend line. That being said, the market looks as if it is going to be bullish, and if we can break above the top of the candlestick, it’s likely that we could see the $1800 level challenge. If we break above the $1800 level, then it’s possible that gold could go as high as $2000. On the other hand, if we turn around and break down below the bottom of the weekly candlestick, that could open up a move down to $1700.
WTI Crude Oil
The last Texas Intermediate Crude Oil market has spent the bulk of the week falling, as it looks like we are still worrying about the potential lack of demand due to economic conditions around the world. If that’s going to be the case, we could very well test the 200-Weekly EMA near the $75 level. On the other hand, if the market can turn around and take out the top of the candlestick of this previously, we could have an attempt to head back into the previous consolidation area, reaching as high as $92.50.