Sunday, August 4, 2013
Wednesday, July 3, 2013
WTI oil price exceeded U.S. $ 100 for the first time since September on Wednesday, while the Brent – is close to 105 USD per barrel price level due to sharpening political turmoil important in Egypt. These kind of political unrests have strong influence on the oil market.
"Black Gold" price rise got into full swing when Egyptian President Mohamed Mursi dismissed the army an ultimatum to resolve the political crisis in the country. The army has warned that it will take action if the government and its opponents ignore the "will of the people."
Due to the political crisis in Egypt at least five ministers have already resigned from their positions. The country has been more than one day in ongoing protests against Mr. Mursi, who accused the Muslim Brotherhood of elevating their interest above the interest of the state.
Egypt is not particularly significant oil exporter, but due to its location is one of the most important oil transit countries in the world.
In particular, oil prices increased as the news of U.S. oil inventories fall last week most this year.
"Today's oil prices are influenced by two factors - knowledge of depleting oil reserves in the U.S. and unrest in Egypt. If excitement gets momentum it poses a threat to oil transit the Suez Canal and the Suez-Mediterranean pipeline, "- said the news agency Bloomberg Says Mark Keenanas, Societe Generale commodity strategist.
Wednesday, June 26, 2013
Half a week has already passed and quite nice moves have already taken in some financial markets. As I wrote a few days ago gold continues collapsing. There have been some hopes that it has already found its’ bottom, but that is not true. 1200 dollar per ounce is very close now. As I said, 1000 would probably be it and then commodity lovers will kick in their longs. Oil will definitely try to get back to 100 dollar per barrel and it is very likely that it will succeed.
US dollar will probably strengthen against European currencies, but lose to commodity currencies. Euro and Pound, together with Swiss Franc will be the biggest losers. Yen will probably be a moderate winner losing only to commodity currencies. Stock indexes are at crossroads and much will depend on the news from Japan on Thursday. I bet Japanese stock index will recover. It may drag down the Japanese Yen though.
Tuesday, June 25, 2013
Trend traders like entering a market when a breakout of an important price level occurs. It maybe a break of an important number, or the area that was not breached in years. Unfortunately, there are numerous fake breaks in financial markets nowadays. It didn’t use to be that way. In fifties, sixties and even the last decade of the century you had a much bigger percentage of valid breakouts than you have now. If you are stock trader you would probably experience less of that, but for a currency trader like myself this is a common practice to enter a break and see it reverse in a few days, or even the same day.
What should we do in this case? We should mix technical analysis with fundamental one. How? You can filter these technical breakouts by waiting for a confirmation from fundamental news. What does that mean? You need to wait for a very important event, such as CPI or Non-Farm payrolls, or Gross Domestic Product data to be released and if that is followed by a break of some price level, only then you do enter the market. I expected a break in Yen recently and what I got was a false break. The market took the price level before news came and the break turned out to be fake.
So, by simply putting this filter on your trades you will avoid a lot of false breakouts and increase your risk reward ratio significantly.
Friday, June 21, 2013
Another one hundred dollar per ounce drop in gold! How much further can it fall? Well, it definitely cannot go to zero as it is not really a stock that can go bankrupt. However, it can and will probably continue falling for some time. I remember mentioning somewhere (hope on this blog) that my prediction for gold is one thousand dollars per ounce. I still keep to this position, but also have a more moderate one: gold my found its’ bottom around one thousand two hundred level. For this scenario to come true we need another 80 dollar fall in the commodity.
I think it is very realistic. The fall might even happen today (Friday) as Fridays are very volatile and unpredictable days in financial markets. S&P500 is already falling, so gold might join the trip down. Anyway, it is most logical for the security to rest a little and consolidate. Then, after a month and a half it may continue its’ downward trend. Or, it is also possible that the commodity has already found its’ long term bottom. I prefer waiting for another week and see whether settling down takes place or not.
I will not write for a few days, so hope you will be patient. See on Tuesday.
Thursday, June 20, 2013
Canadian dollar seems to be stuck at the crossroad. It neither rises, nor falls. Most traders know that it is highly correlated to oil as Canada is rich with this commodity. However, we do expect to see significant advances in most Canadian dollar pairs in the nearest future. Anyone understands that technical analysis is not enough to push the ‘loonie’ out of its’ current ranges. It needs something fundamental (tangible) in order to rise or fall. One of the catalysts could be tomorrow’s data (Canada’s CPI – Consumer Price Index).
Although European currencies: eur/cad and gbp/cad have been rising against CAD, US dollar advance was pathetic. After FOMC decision yesterday and CPI coming tomorrow the picture might drastically change. I think Canadian dollar will fall. Let’s wait and see.
Wednesday, June 19, 2013
Today is probably one of the most important days in financial markets throughout the month and possibly in the year 2013. FED will release interest rate decision. European stocks markets are going lower. Dollar looks a little bit strong, except against Japanese Yen. As I expected oil is going higher and soon my reach 100 dollars per barrel. Gold seems to be frozen, but whatever decision is made today I doubt if it goes higher before going lower to visit its’ previous lows.
Most currencies will probably stay in their current ranges till the release as most investors would be too scared to enter their positions before such an event. Market participants have been speculating for a long time when FED will end their bond buying program and today Ben Bernanke may present us with some hints regarding it.
If you have some open positions at the moment, be sure to tighten your stop loss orders as these might experience tremendous pressure when news hits the wire. Do not take too big positions. Better wait than being sorry.