Forex & commodities on February 23, 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. If oil breaks above $65, next stop is $75-76
  2. The U.S. Dollar Index’s trendline resistance is at 92
  3. Gold and silver just need to fall a little more before reaching long term supports.

3 pm: if oil breaks above $65, next stop is $75-76
I still think oil will fall a little more to $57. But the short term is notoriously hard to consistently predict, which is why I focus on the medium-long term. Oil’s medium & long term outlook are decisively bullish.
Perhaps my short term outlook is wrong. We’ll only know if oil breaks above $65 (previous high). $65 is also a big resistance: oil’s 200 monthly moving average.
If oil breaks above $65, the next resistance is at $75-$76. $75 is also Saudi Arabia’s break-even $. That has been the target price for OPEC’s production cuts. Saudi Arabia needs oil to reach this level before they can implement their Saudi Aramco IPO in the second half of 2018.

6 am: the U.S. Dollar Index’s trendline resistance is at 92
I think 92 is the USD Index’s maximum target for this bounce. Based on an inverse correlation with gold and silver, a USD Index value of 92 brings it up against trendline resistance.
91.8 is also the U.S. Dollar Index’s 23.6% fib retracement. So there is a confluence of resistances from 91.8 to 92.

6 am: Gold and silver just need to fall a little more before reaching long term supports.
As expected, gold and silver are falling a little bit in the short term. They will soon come up against long term support, which is where I think they will find a medium term bottom.
Silver’s support trendline is at $15.8. Gold’s support trendline is further below at $1260.


Read Forex & commodities on February 22, 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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