Forex & commodities on May 3, 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. USD Index is rallying and the Euro is falling because EU economic data is deteriorating faster than U.S. economic data.
  2. USD Index is starting to breakout from 92.4 resistance. Next target 94. Bearish for the Euro, Canadian dollar, Yen, and Pound.
  3. Gold and silver are trying to defend their support levels. A breakdown would bring gold to $1240 and silver to $15.6

1 am: USD Index is rallying because EU economic data is deteriorating faster than U.S. economic data
The USD Index is rallying and the Euro is falling because EU economic data is deteriorating faster than U.S. economic data.

However, I don’t expect the USD’s rally and the Euro’s pullback to last too long (in terms of TIME). The EU’s economy is deteriorating a little bit in the short term. In terms of short term economic deterioration, this is about as bad as it gets for the EU.
Meanwhile, U.S. economic data will probably deteriorate a little bit in the second half of 2018. So far it is still positive.

1 am: USD Index is starting to breakout from 92.4 resistance. Next target 94.
I said yesterday that 92.4 is a relatively small resistance level for the USD Index. Once the USD Index breaksout from this level, the next resistance is at 94.
The USD has started to breakout from this resistance level. This is a short term bearish factor for ex-USD currencies.

1 am: Gold and silver are trying to defend their support levels. A breakdown would bring gold to $1240 and silver to $15.6
With the USD Index on the verge of breaking out to 94 from 92.4, gold and silver are making 1 last attempt to hold their support levels.
If gold and silver breakdown, its reasonable to expect precious metals to revisit their December 2018 lows ($1240 for gold and $15.6 for silver).


Read Forex & commodities on May 2, 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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