Forex & commodities on March 26, 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. April is a seasonally bullish month for gold and neutral for silver.
  2. The EU’s economy is deteriorating faster than the U.S. economy. A medium term bearish factor for EURUSD and bullish for the U.S. Dollar.
  3. U.S. oil rig count is rising. This puts a cap on oil prices.

1 am: April is a seasonally bullish month for gold and neutral for silver.
Gold’s seasonality is bullish in April. Silver’s seasonality is neutral (slightly bullish) in April.
Here’s gold.

Here’s silver.

Keep in mind that “seasonality” is an AVERAGE of the market’s performance during that month. This doesn’t mean that gold and silver will definitely go up this April.
1 am: The EU’s economy is deteriorating faster than the U.S. economy. A medium term bearish factor for EURUSD and bullish for the U.S. Dollar.
Money Flow determines the medium-long term direction for currency pairs. Money Flow is a relative factor: money flows to the economy that’s relatively stronger. When money flows to a country, that country’s currency appreciates.
The European economy is deteriorating (short term) right now while the U.S. economy is still ok. This implies that Money Flow will start to leave the EU and head to the U.S.. This is a medium term bearish factor for the Euro and a bullish factor for the U.S. Dollar.

1 am: U.S. oil rig count is rising. This puts a cap on oil prices.
U.S. oil rigs increased from 800 to 804 last week. This is because U.S. producers have lower costs than many foreign producers and are attracted by profitable prices.
This puts a cap on oil prices. Even if oil prices rise, they won’t rise far. U.S. producers will just bring more rigs online and pump more oil, thereby driving prices back down.

Read Forex & commodities on March 23, 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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