Bitcoin
Bitcoin will continue to do very little because there is almost no reason for it to rally. After all, risk appetite is terrible right now, and bitcoin is about as far from the spectrum as you can get. In that case, pay close attention to the $18,000 level, as we eventually break down from there, and then we may go down to the $15,000 level. At this point, the rallies will continue to be sold, as there is no reason to think that bitcoin or anything else crypto-related will see a massive influx.
Gold
The gold markets went back and forth as we continued to hold the $60 level for the week. At this point, the $1,680 level offered resistance to the bounce, which makes sense because it should have a certain amount of “market memory” attached to it. On the other hand, if we turn around and break below the $1,620 level, then we have dropped to the $1,500 level very quickly.
As long as the Federal Reserve continues to keep monetary policy tight, it’s hard to imagine a scenario where the gold market actually rises. The US dollar will continue to be the headwind for the gold markets.
EUR/USD
The Euro rallied significantly during the week, but was still depressed at this point, making it difficult to see any upside anytime soon. The parity level will almost certainly cause some resistance, so you’d think you’d be paying close attention to this level for an eye-shorting opportunity. While there are headlines about the EU’s energy saving plan, there is no real argument for the euro to rise. Prepare to be disappointed.
GBP/USD
The British pound went back and forth during the trading week as we continue to bounce around the 500 point range. The 1.15 level continues to provide massive resistance, while the 1.10 level will provide support. At this point, I think we are more likely not to be a side market as we try to figure out what the next move is. That said, the US dollar will continue to be more buoyant than the British pound, so I prefer to play down signs of exhaustion for short-term moves.
USD/JPY
The US dollar initially rose during the week, but on Friday we saw the Bank of Japan step in and intervene again. However, with the Bank of Japan still trapped, it’s hard to get too excited about trying to short the pair. The ¥150 level will again be the next target, but I would still expect a slight pullback to suggest value. I have absolutely no interest in trying to short the pair as long as the Bank of Japan continues to cut interest rates.
WTI crude oil
The West Texas Intermediate Crude Oil market has been quite volatile during the week, but we are essentially hanging on the $85 level. There is a big push between whether there is enough demand or not, as the global economy is almost headed for recession. On the other hand, 2 million barrels per day have been cut from OPEC in recent days. Therefore, I think you are looking at a push/pull market and therefore should be looking at short-term range trading systems.
S&P 500
The S&P 500 rallied for the week as we saw a lot of noise around the 3600 level. That being said, the 3800 level above offers resistance, so at this point I think we continue to bounce around the 200-point range. I think at this point we’re sitting in a big consolidation area that could lead to some support from mid-2021, but since we’re in the middle of earnings season, that’s not going to happen yet, it’s more likely a “rally left” market.
DAX
The German index had a positive week, but we’re still in the middle of a rising wedge, and there’s clearly a lot there that could spell trouble for the European Union. There was a headline on Friday in which Germany’s energy minister said there was a framework for the European Union to set energy price caps. It almost never works, so at this point, I think it’s only a matter of time before fatigue starts to shorten again. However, keep a close eye on the €12,500 level, as if the market were to break down from there, we are likely to go lower.
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