WTI Crude Oil
The West Texas intermediate crude oil market has been a little bit negative during the course of the week, but quite frankly continues to hang around the $80 level. Because of this, I think we have got a situation where we are just simply consolidating overall. The further this market drops, the more likely we are to see value hunters come back in and take advantage of “cheap barrels.” Ultimately, this is a market that I have no interest in shorting, and I think that given enough time we probably have some type of rally, either after a continued dip, or if we can break above the $85 level.
DAX
The German index has fallen apart during the course of the week, testing a major trend line right around the €18,200 level. Underneath there, the market is likely to go looking to the €18,000 level, which has been support multiple times in the past and of course is a large, round, psychologically significant figure. In general, this is a market that I think given enough time, we will have to make a bigger decision, and I think it is still a market that probably rallies. However, if we drop down below the €17,500 level, then the market probably falls apart.
GBP/CHF
The British pound initially tried to rally against the Swiss franc during the past week, but it has fallen to break below the 1.15 CHF level. That being said, there is still plenty of support underneath and I do think that given enough time the buyers returned. Quite frankly, the lower this pair drops, the more interested I am in buying as it gives you a positive swap, as the Swiss National Bank has begun it’s cutting cycle, and the Bank of England of course has not. Ultimately, if we can break above the 1.17 CHF level, this is a market that could really start to take off.
Gold
Gold markets initially shot higher during the course of the trading week, to threaten the $2500 region. We turned around to show signs of negativity, and at this point in time we are hanging around the $2400 level. This is the area that previously had been major resistance, and now it should offer quite a bit of support. All things being equal, even if we do break down below the $2400 level, the $2300 level is a major support level as well.
EUR/USD
The euro initially tried to rally during the course of the trading week, but after the European Central Bank failed to act, but then left the door open for a September rate cut, the euro has been crushed. The 1.09 level has offered a significant amount of resistance, and based upon the idea of the shooting star, it’s also possible that the euro drops down to the 1.08 level, and then possibly down to the 1.07 level. On the other hand, if we were to turn around a break above the top of the candlestick for the week, it opens up the possibility of the euro going to the 1.10 level above.
NASDAQ 100
The NASDAQ 100 initially tried to rally during the week but has since collapsed. Quite frankly, this is a situation where traders have been jumping out of high flying technology stocks, and perhaps jumping into smaller companies such as the Russell 2000. The market is hanging around the 19,500 level at the moment, and this is an area that previously has been support. If we broke down below there, then I think it opens up a move down to the 19,000 level. On the other hand, if we bounce off here, then the market could go challenging the 20,000 level, but right now I think the market is getting a much needed reprieve from the constant upward pressure.
USD/CAD
The US dollar has rallied pretty significantly during the course of the week against the Canadian dollar (USD/CAD currency pair). At this point, it looks like the 1.38 level above is a major barrier, as we have seen play out over the last several months. If we can break above that level, then it’s likely that we could go looking to the 1.39 level. On the other hand, if we pull back from here, I believe that the 1.36 level will offer a significant amount of support, especially as the 50-We EMA currently sits just below that level.
GBP/USD
The British pound initially tried to rally during the course of the trading week, only to turn around and show signs of hesitation just below the 1.31 level. This is an area that’s been important multiple times, so it’s not a huge to rise to see that we have ended up forming a little bit of a shooting star. Furthermore, the market has been dealing with more of a “risk off” attitude over the last several days, so it makes sense that the US dollar has strengthened as a result. At this point, I would be looking at the 1.2750 level as a potential support level. Alternatively, if we turn around and break above the 1.31 level, then the market could really start to take off to the upside.
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