Forex & commodities on February 9, 2018: outlook


Here are my discretionary thoughts on forex and commodities. I only trade the S&P 500.
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Thoughts

  1. The U.S. dollar index will be capped at 91.
  2. Any continued pullback in gold and silver will be limited.
  3. Oil might pullback a little more to its 38.2% retracement

3:30 pm. The USD Index will be capped at 91.
There is an inverse correlation between the U.S. dollar and U.S. stock market. The USD Index is bouncing on the S&P’s correction.
I think the USD Index will at most bounce to 91. This turns prior support from the past few years into resistance. Then the USD’s bear market will resume.


6 am: any continued pullback in gold and silver will be limited
Gold and silver might pull back a little more. But their downside is limited.
Gold’s major trendline support is at $1250-$1260

Silver’s major trendline support is at $15.8-$15.9

In addition, the gold:silver ratio is very high right now. This means that the gold:silver ratio will soon reverse down, which is bullish for gold and silver in the medium term.
*The gold:silver ratio usually rises when gold & silver prices fall. The ratio usually falls when gold & silver prices rise.

6 am: Oil might pullback a little more to its 38.2% retracement
Oil has already retraced 23.6% of its entire rally. The stock market has already made a correction and gold/silver have already made a pullback. Pullbacks typically retrace 38.2%, which means that oil will probably fall to $57-$58 before bottoming.

Read Forex & commodities on February 8, 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. The USD Index will crater below its final support (90-91) in the first half of 2018.
  3. The best traders I know are still bullish on Bitcoin in the short and long term. I don’t know when the crypto bubble will end.

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