Weekly Outlook: 2015, February 08 - 15

The US Dollar Index fell initially during the course of the week, but as you can see struggled below the 94 level to continue selling off, and bounced enough to form a nice-looking hammer. The hammer suggests that the buyers are going to come back into the marketplace, but this market is most certainly overbought by just about any metric measure it by. Because of this, we are bullish of the market but we recognize that it might be difficult to place long-term trades to the upside in general right now.



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Silver markets fell after initially trying to rally during the course of the week. As you can see the area above the $17.00 level continues to be resistance, and as a result we ended up having a shooting star. The shooting star of course suggests weakness, but we see so much in the way of support below that we actually believe eventually the buyers will pick this market backup and send it much higher. With that, we are buyers, not sellers but do not have the right set up quite yet.



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Gold markets fell significantly during the course of the week, as the nonfarm payroll numbers came out stronger than anticipated during the session on Friday. This of course brought the value of the US dollar, which of course turned back around against the gold markets. However, we see that the $1220 level below is massively supportive, and therefore a supportive candle would be reason enough to start buying in this general vicinity. We don’t have it yet obviously, but we will be watching this market for buying opportunities in this general vicinity.



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The USD/JPY pair initially fell during the course of the week, but found enough support to turn things back around and break well above the 190 level. That being the case, the market almost looks as if it’s ready to plow through the 120 level next, and then ultimately break out for longer-term buy-and-hold type of trading. We have no interest in selling this market and we believe that the 115 level is the absolute bottom of the market going forward. With that, we are very bullish after a very positive nonfarm payroll number.



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The USD/CHF pair went back and forth during the course of the week, eventually forming a very neutral candle. We are struggling at the 50% Fibonacci retracement level, so if we can break down below the bottom of the candle, we would be sellers. On the other hand, if we break above the top of it, we are not buyers because we see significant resistance at the 0.95 level as well based upon previous support, and the 61.8% Fibonacci retracement level sitting right on top of the large, round, psychologically significant handle.



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The USD/CAD pair broke down during the course of the week, testing the area below the 1.25 handle. That being the case, the market looks as if it is ready to bounce from here and perhaps head to the 1.28 handle. We think that the market will ultimately test the 1.30 level, and even if we break down below the bottom of the scandal, the 1.20 level below should be the “floor.” Ultimately, this is a very good uptrend but is a bit overbought at this point in time.



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The NZD/USD pair went back and forth during the course of the week, forming a relatively neutral candle. It now looks as if market could sell off every time it rallies, and that’s exactly how we are going to approach the New Zealand dollar itself. We want to sell it every time it rises as a result of the bearishness that we have seen recently, and the central bank intervention out of Wellington. The US dollar continues to be the strongest currency in the Forex markets, so it makes sense that we continue lower.



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The GBP/USD pair broke higher during the course of the week, after first testing the 1.50 level. With that, the market looks as if it is ready to try to fight its way higher, like a break of the top of the range. However, there is enough resistance above there at the 1.55 level to keep us from doing so as we believe the market will ultimately run into white a bit of resistance there. With that being said, this just isn’t a market that we like trading from a longer-term perspective at the moment.



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The EUR/USD pair tried to break out above the 1.15 handle this week, but as you can see ran into far too much resistance and turned back around to form a shooting star. The shooting star of course is a negative sign and we believe that a break below the bottom of it should bring in sellers back into the market. At that point time we would anticipate a move down to the 1.10 level as it is the next large, round, psychologically significant number, but ultimately we will probably go even lower than that given enough time. Rallies continue to offer selling opportunities.



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