Forex & commodities on April 6, 2018: outlook


Here are my discretionary thoughts on forex and commodities. I only trade the stock market.
Go to the homepage for my latest thoughts on forex and commodities.

Thoughts

  1. The USD Index is approaching the top of this range (resistance).
  2. Gold and silver’s safety haven rallies are becoming weaker and weaker. A medium term bearish sign.
  3. USD and gold correlation = a medium term bearish factor for oil.

1 am: the USD Index is approaching the top of this range (resistance).
After turning its 50 daily moving average into support, the USD Index is approaching the top of its range at 90.4. Some traders plan on shorting the USD here for a small decline.
I don’t think this is a good idea. A breakout above the 90.4 resistance could lead to a much bigger USD bounce.

1 am: Gold and silver’s safety haven rallies are becoming weaker and weaker. A medium term bearish sign.
Gold and silver have been rallying on trade-war related news over the past 2 weeks (a safety haven play). However, gold’s rally on each successive trade-war news is getting weaker and weaker.
Gold is hardly up today despite the S&P 500 falling 1% overnight on additional tariff threats.


This is a medium term bearish sign for precious metals. The safety haven theme can no longer push gold and silver up.
1 am: USD and gold correlation = a medium term bearish factor for oil.
There is a moderately positive correlation between gold and oil right now. If gold falls in the medium term, then that will be a bearish factor for oil in the medium term as well.

There is also a moderately inverse correlation between oil and the U.S. Dollar Index. A USD breakout on the upside = a medium term bearish factor for oil

Read Forex & commodities on April 5, 2018: outlook

Bottom line

I only trade stocks. These are just my thoughts/outlook on other markets.

  1. Gold and silver are in bull markets.
  2. I’ve decided to buy some gold and silver as long term investments.
  3. The U.S. Dollar is in a bear market.

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