The yearly Janet Yellen’s speech will be given on Friday at Jackson Hole. The market is expecting clear signals to come from this speech to understand whether to head North or South. In the meantime, the dollar is slowly regaining its power while waiting for the symposium to happen. The main question the markets want to be answered is: “How likely is it that the FED’s rate hike will happen before the end of 2016?” Considering the dollar’s dynamics, investors are expecting optimistic signals to come from the FED head. However, it is wise to consider the closure of the existing positions, thus minimising the losses as you’d turn stops to the black.
Lingering next to the broken ascending channel you can see that the Euro has yet to decide to pull back. Our main scenario has remained the same in terms of this pair, and it implies to the fall. It is wise to resume the pair sales once it gets back to the descending channel which has been drawn between the points A and B and broken through earlier. There is a nicely looking bullish trap waiting to be found in the trendline:
Bulls can consider the option of further euro growth: it is a possibly a potential flag in the 4-hour chart. Of course, it is nice to have the hammer forming within the 4-hour timeframe right next to the flag’s lower border, but the broken ascending channel is bringing the pair down from above. Do not give priority to this option as it is not wise:
The WTI oil pulled back from the broken ascending channel and is heading towards the broken descending channel, which can potentially be a flag. Let’s buy next to the broken downtrend at the forming of the candlestick reversal patterns:
The Gold got away from its triangle, and we are expecting it to reach two levels – 1303.00 and 1260.00. The second goal is to reach the height or the base of the broken triangle:
Silver is ahead of gold. It had a broken range on Monday and is heading to South now. Here, the sales of precious metal will start looking interesting if you decide to try the broken lower range (we should rely on candlestick reversal patterns). Potential objective in terms of the fall is 18$ per ounce:
The Old Gentleman got caught up in the 3rd point of the descending channel. The position is risky (!) as the trend is not a common one – it lies in a daily trend. However, selling with the current prices is definitely worth trying. Entering with a small lot is a great idea especially in the case when other open positions are already overloaded with the Dollar buys against the other currencies and commodities. It is also risky to open positions on the COT CFTC report:
The buys of this operation, as well as, sales of big bears have reached a historical maximum. This situation took the last place in 2013 and then the British Pound went steadily up for many months in a row. Now the Pound is cheaper and we are expecting for the beautiful boom to happen once the currently open positions of the Pound will close. Although the Pound can still drop to 100-200 points to get ready for the next jump to the North:
Let us remind you that this material is provided for informative purposes only and cannot be considered as a direct go ahead to implement transactions in the financial markets.
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