Forex & commodities on February 14, 2018: outlook


Here are my discretionary thoughts on forex and commodities. I only trade the S&P 500.
Go to the homepage for my latest thoughts on forex and commodities.

Thoughts

  1. USD’s price action today is bearish.
  2. Gold and silver are on the verge of a massive breakout. Bullish price action.
  3. As expected, USDJPY is leading the U.S. dollar’s bear market
  4. Crude oil’s price action is still weak.

3 pm: USD’s price action today is bearish.
I’ve said this for months already: the U.S. Dollar is in a bear market because inflation is coming. We are in the final inflation stage of this economic expansion. Historically, rising inflation has been medium-long term bearish for the U.S. Dollar.
The USD’s price action today is bearish. It fell on today’s higher than expected inflation (CPI) report. This is exactly how it should react to inflation-related news during a USD bear market.
Here’s the U.S. Dollar Index on an hourly bar chart.

3 pm: gold and silver are on the verge of a massive breakout.
Gold and silver spiked on today’s rising inflation (CPI) report. This is bullish price action. Gold and silver are reacting as they should to the final inflation stage of this economic expansion.
More importantly, gold is on the verge of a massive breakout.

Silver underperformed gold today, which is a short term bearish sign. Silver should outperform gold in a healthy rally. Perhaps gold and silver will pullback a little more. Who knows. But the medium and long term are decisively bullish.

8 am: As expected, USDJPY is leading the U.S. dollar’s bear market
Yesterday I said that USDJPY was on the verge of breaking down. It is now breaking down below a big medium term support.

USDJPY did not fall significantly during the USD’s previous down wave. Now that USDJPY has finally broken down, I expect it to lead the USD’s upcoming down wave. We can see this happening already. USDJPY is the weakest pair today.

8 am: crude oil’s price action is still weak.
Yesterday I said that oil’s price action was weak. That weakness continues into today. Oil is down while gold and silver are up. There should be a positive correlation between gold/silver and oil, but gold/silver’s bounce isn’t lifting oil up.

I expect oil to fall to its 38.2% fib retracement. This is some short term weakness. But the medium and long term are bullish.

Read Forex & commodities on February 13, 2018.

Bottom line

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

  1. Gold and silver will break above their tight range in the first half of 2018.
  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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