Gold lost ground yesterday after investors came in to cover short positions on the precious metal.This also silver and other metals loose ground as well yesterday with the commodity currencies gaining some ground on the Dollar especially the Canadian dollar.Gold which is seen as a hedge against the US dollar was an unusual move since the Dollar lost some ground with the S&P 500 gaining ground during the trading session.
The Euro is still marred by bad news but there seems to be some correction of some sought as we await Italy bond selling today which we expect the Chinese funds to flow in to help avert the situation temporarily. Even though the Greek yields are at an all time high above 100%, the French banks may be downgraded and the poorly performing ECB balance sheet, we may see some reprieve before the Euro goes lower.The US dollar is not doing that well either which may be one other reason that the EUR/USD is still holding on to its position.The currency pair is currently oversold at 30 on the 14-day relative strength indicator.
We would also expect the high yielding antipodean currencies to remain under pressure with dovish remarks coming from Newzealand which expects to keep the interest rates lower for a longer time period.The Australian dollar was also under performing which should put pressure on the RBA to move to accommodate policy stands.However, the charts speak a different language with a slight change in sentiment with this regards. There seems to be a reversal potential on the short term that we will be patient to see on how it all pans out. Good luck trading to everyone and do your own analysis before moving forward.
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