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COMMENTARY

• EUR/CHF Soaring, 2-Year Highs in Sight
  Written by Matthew Weller
  Last updated 5/14/2013 2:59:20 PM ET
  Though the rally in the U.S. Dollar has stolen all the headlines of late, the EUR/CHF surge of the past few weeks has been relatively under-the-radar. The pair has rallied nearly 300 pips since the start of the month, and based on the recent price action, bulls may be gunning for the 2-year high at 1.2570 next.
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• Crude oil under pressure
  Written by Fawad Razaqzada
  Last updated 5/14/2013 12:41:57 PM ET
  Crude oil is a touch lower in this late afternoon trade here in London, weighed down by concerns over demand and excess supply, and a stronger US dollar. Prices showed mixed reaction to today’s main data releases that included a surprisingly strong 1% rise in eurozone industrial production and an equally disappointing German ZEW reading. I am actually surprised how well prices have managed to hold up given the fact there are very few reasons why prices should go up...
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• Precious metals off worst levels, but still remain lower on the day
  Written by Fawad Razaqzada
  Last updated 5/14/2013 11:41:05 AM ET
  Precious metals turned mixed in the afternoon, recovering from earlier falls, even as the US dollar remained near a 10-month high against a basket of foreign currencies. Predicting the direction of gold has been extremely difficult of late – to say the least – because there are currently two main counteracting forces acting on the price...
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• AUD/NZD: Near-Term Pattern Suggests Top Likely Around 1.2100
  Written by Matthew Weller
  Last updated 5/13/2013 2:07:30 PM ET
  The AUD/NZD is ticking up toward the 1.2100 round handle for the first time in a week. This level marks the convergence of the 61.8% retracement of last week’s large drop (XA) and the 127.2% extension of today’s Asian session pullback (BC), creating a clear Bearish Gartley Pattern. If rates manage to rally up to 1.2100 (or secondary pattern completion at 1.2120), a reversal is more likely and a sell opportunity will emerge.
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• Crude oil down, but off lows
  Written by Fawad Razaqzada
  Last updated 5/13/2013 11:55:44 AM ET
  Crude oil fell today as the US dollar remained near recent highs. With the supply of oil abundant and only set to increase further, demand has to keep up pace for prices to remain stable around these levels...
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• GBP/USD looking shaky
  Written by Fawad Razaqzada
  Last updated 5/13/2013 5:42:54 AM ET
  The Cable found stiff resistance around its 50% retracement of the last major sell-off last week. Price touched the 1.56 level and after a period of consolidation below that figure, it started to ease. The selling gathered momentum on Thursday after the Bank of England kept monetary policy unchanged, although this was more to do with the dollar’s strength rather than the pound weakness...
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• Precious metals sharply lower as dollar rallies
  Written by Fawad Razaqzada
  Last updated 5/10/2013 11:57:18 AM ET
  Precocious metals fell sharply today as the dollar rallied after the USD/JPY broke above that psychological 100 barrier. The near-term outlook for gold remains uncertain with ETF outflows continuing, albeit at a slower pace than in April. Investors are finding better yields in equities which remain in a long-term bull market thanks to the extraordinary easy policy employed by a number of central banks around the world. But the Fed has already mentioned it will slow down or withdraw its lifeline provided the rate of US unemployment falls to 6.5%. This could help extend the dollar’s rally, and in the process, cause buck-denominated assets like gold to fall. But over the long term, gold prices are likely to rise considerably, especially once we see the return of inflation and hopefully some economic growth, too. What’s more, central banks remain net buyers in the physical market while jewellery demand from China and India is only likely to rise with falling prices.
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• Crude oil in vicious sell-off
  Written by Fawad Razaqzada
  Last updated 5/10/2013 11:25:18 AM ET
  Crude oil plunged today and still falling as I type this. This is by no means a surprise given the extent of rally we saw over the last three weeks or so, and the fact that production of oil is rising while demand remains weak. Although we didn’t have a lot of economic data to provide fresh clues on demand, we already knew that crude stockpiles are near record highs and so it was almost inevitable we would see such a vicious sell-off. Also helping the move was the rallying dollar which has fallen against all of the majors today after the USD/JPY skyrocketed through that psychological 100 mark. What’s more, on WTI, there is a well-established bearish trend line at around $96/$97 that I have been pointing out for several days now which managed to hold firm again. This encouraged the bulls to book profit on their longs and the bears to establish fresh short positions, thus causing prices to slide.
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• AUD/USD long-term bullish trend broken
  Written by Fawad Razaqzada
  Last updated 5/10/2013 6:35:07 AM ET
  Yesterday saw the Aussie fall sharply as investors further reduced their long exposures following that surprise rate cut by the RBA. This, and the fact that USD/JPY took out the psychological resistance at 100 (which caused all pairs denominated in USD to fall) the AUD/USD plunged through that 1.0150 barrier. This means that the Aussie has now broken that long-term support at 1.0150, so we should see more losses in the days and weeks to come...
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• USD/JPY Explodes Through 100, Buying Dips
  Written by Matthew Weller
  Last updated 5/9/2013 2:21:15 PM ET
  After one of the quietest starts to a week in recent memory, we finally have some excitement in the markets. After flirting with the key level for weeks, the USD/JPY finally broke through the widely-watched 100.00 level, hitting an air pocket and instantaneously repricing up to 100.30. Rates have since continued to rally to up to 100.60 as of writing. At this point, the initial stop run may be losing steam, presenting a chance for traders who missed the initial breakout to buy the pair on a dip back toward previous-resistance-turned-support at 100.00.
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• Precious metals little-changed
  Written by Fawad Razaqzada
  Last updated 5/9/2013 1:25:10 PM ET
  Both gold and silver have relinquished most of their gains from earlier, leaving prices little-changed on the session. The dollar strengthened against a basket of foreign currencies and this pressurised all buck-denominated assets, while holidays across several European countries and the lack of any major data discouraged traders from initiating bold positions...
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• Crude oil drifts as investors weigh demand, supply
  Written by Fawad Razaqzada
  Last updated 5/9/2013 1:05:01 PM ET
  Crude oil drifted lower for most of the session in this quiet day, before bouncing off its lows in late afternoon. To a large degree, this was due to bank holidays across several European countries, including France, Germany and Switzerland. Overnight, strong jobs data out of Australia and New Zeeland were shrugged off after a fractionally higher-than-expected Chinese CPI reading reduced the possibility of further easing of policy from Beijing...
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• GBP/USD trade idea ahead of BoE policy decision
  Written by Fawad Razaqzada
  Last updated 5/9/2013 6:54:23 AM ET
  It is Governor Mervyn King's penultimate MPC meeting before handing over to Mark Carney, who is still in charge of things at the Bank of Canada. No change is expected, so the pound could stage a relief rally if this indeed turns out to be the case. But ...
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• USD/CAD: Parity in Sight, Stop to Breakeven
  Written by Matthew Weller
  Last updated 5/8/2013 2:20:21 PM ET
  The USD/CAD sell trade featured in this morning’s Candlestick Daily report triggered shortly after the article was published, leaving us short the pair from 1.0045. Since then, the 2-week bearish trend line has predictably pushed rates down into the lower 1.000s, taking our trade into an unrealized profit. With bearish trend line resistance now near our entry and the USD/CAD’s propensity to reverse midday, it would be prudent to move the stop on the trade down to manage risk.
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• Crude oil mixed despite easing demand concerns; gold up
  Written by Fawad Razaqzada
  Last updated 5/8/2013 12:08:58 PM ET
  Crude oil traded mixed today with Brent down and WTI up as demand concerns eased following the release of strong economic data from China and Germany. Precious metals traded mixed with gold up and silver down slightly.
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