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Commodity

Commodity Prices and Currency MovesCommodity Prices and Currency Moves When trying to distinguish the relationships between certain commodities and currencies around the world it helps to realize that situations can change and the relationships are fluid. However, there are some time-tested relationships that have been established over the years that may continue to hold true well in to the 21st century. Let’s take a look at a few of the most reliable correlations between commodities and the currencies they influence. AUD/USD – Markets eye data AUD/USD and Silver What are commodities? The prevailing thought around trading circles is that Gold and the AUD/USD (Australian Dollar / U.S. Dollar) is the ultimate correlation to follow, however, Silver is actually more reliable. It’s no secret that Australia has a significant portion of their economy tied to mining, but most don’t realize the scale with over 2% of the workforce employed by it, over 5% of the GDP relying upon it, and it contributes around 35% of the nation’s exports. Therefore, the fluctuations of the metal market have a large impact on the outlook for the AUD. Pound to Canadian Dollar USD/CAD and West Texas Intermediate Crude Oil Commodity Prices and Currency Moves best currency pairs Benefits of trading the forex market West Texas Intermediate or WTI is the main type of oil traded in North America and is incredibly influential to the Canadian economy. It’s no secret that the U.S. is the world’s foremost consumer of oil (at nearly 19 million barrels per day (bpd), well ahead of 2nd place China at almost 11 million bpd), but many people don’t realize how they get said oil. Live FX News Many make the false assumption that Saudi Arabia is the nation with which it relies on a majority of its oil imports, but a third of oil imports comes from Canada, with Saudi Arabia contributing just over 17%. Interestingly, out of the 19 million bpd the US consumes 10 million bpd are produced in-house, but since Canada exports so much oil to their larger neighbors to the south, their currency is intrinsically tied to the value of the black gold. USD/NOK and Brent Crude Oil While these correlations are the most recognized and reliable in the early part of the 21st century, it doesn’t mean that they are the only ones. There are plenty of commodities around the world, and the ever-changing global landscape means that certain industries will diminish while others rise up. According to some estimates, the known oil reserves will only supply the world until around 2040, after which we may have to find another form of making our machinations operate. Commodity Prices and Currency Moves
Education
by fxpremiere
You cannot lose this Soybean Oil trade !!It is time to take a look into the weekly and monthly chart where a huge supply zone overlap. We have a monthly supply zone at 51.5 - 57.1 and a weekly supply zone at 51.5 - 52.7 which overlap at 51.6 - 53.6. They are both original zone so the probability of this short trade is to the moon. This is a very easy trade to take and I sure don't want to miss this chance. Always follow your trading plan regarding entry, risk management, and trade management. Good luck! ~ Tuan Anh Commo
CBOT:ZL1!Short
by TheCommoTrader
Gold’s weekly outlook: Feb 22-26Gold suffered a red bar mainly due to technical reasons as the movement was on expected lines and the downside got limited to the previous low creating a double bottom which is an imminent reversal signal till the pattern holds significance. The world is still looking perplexed on the vaccine front as multiple issues have come forth mainly regarding their use and effectiveness against new mutations and the efficacy/dosage against the original covid-19, this simply shows the level of uncertainty the globe is in with no promising way out to restore/reopen the economies excepting the odd stimulus measures. In such a given scenario where the virus is still creating havoc along with other geopolitical issues its really hard to believe the low lying of the yellow metal as it remains the most sought after asset be it banks, governments or privates for hedging/vaulting/printing or other economic purposes. To watch next week – Fed Chair Powell testimony and other important economic data. On the chart – Gold moved along its expected path creating a double bottom which is a key reversal signal till the pattern holds which hopefully will given the even poor fundamentals ahead due to resurgence of virus (2nd wave) in some parts of the globe. With a rise in uncertainty due to confusing vaccinations and inability to suppress fresh spikes/cases it paves way to a now long awaited and foolproof rise in the gold price as technically it becomes fully supportive which went missing from last few weeks. We have 2 scenarios – 1. Gold closed above the support, till this is held it can go to $1789. If this is crossed it can move towards $1804. And if this is taken out it can rally to $1823. 2. Shorts can come into play only if the double bottom pattern gets invalidated except the evergreen scalp trades. Bullish view – Bulls eventually failed to protect $1800 but on the optimistic side created a double bottom which is a major reversal signal and was on anticipated lines as well. Now, till bulls hold the pattern they can aim for higher highs as technically gold is at the best possible support and fundamentals are too creepy for any fall in gold so net net the current situation makes up a good recipe for a tempting upside. Bears can come into the fray once the bullish pattern gets invalidated though the move lower needs to be comforting enough to create short positions as fake-outs are happening at large these days. On larger terms, gold remains bullish and prices are expected to head higher. Possible trades are on both sides but mainly on upside, gold can be bought above $1792 for the targets of $1804 and $1823 with a stop loss placed below $1782. Longer term target $1839. Dips towards support (and breakout region) can be used to create longs for the above mentioned targets. Shorts can be useful for scalp trades only.
TVC:GOLDLong
by vanimator
3
Are you ready for some Natural Gas ?I believe Nat Gas is approaching a crucial demand zone! WHAT NEXT? My current view remained neutral and speculative with Natural Gas being in a range of 2.9xx - 3.400. However, Natural Gas could develop a bullish move if the weather condition in the US continued to strengthen. For Intraday traders, you could look for Buy setups as it approaches 2.9xx with R:R ratio at 3.04. To be more clear, your target will be at 3.400 and stoploss at 2.740. If you want to be risky your stop loss could be at 2.550. For Swing traders and Position traders, I will not take this trade. Always follow your trading plan regarding entry, risk management, and trade management. Good luck! ~ Tuan Anh Commo
NYMEX:NG1!
by TheCommoTrader
Gold going funkyIt has been a while since Gold was looked into... From previous analyses, Gold is indeed bearish of late, and revisited 1800 again, only to break down and closed the week below 1800. Furthermore, the last week closed below the 55EMA. This has not happened in a very long time, and may represent opportunities. Technically, Gold is still bearish. Noted the RPM indication that a consolidation bottom may form soon. This is corroborated with MACD possibly forming a bullish divergence. Meanwhile, there may be a flash crash of sorts to 1600 or at minimum to 1700 instead, in the weeks to come. Clearly, being patient is key, drawing lines, and watching while preparing for the next up wave starts now.
COMEX:GC1!
by Auguraltrader
Gold’s weekly outlook: Feb 15-19Gold had a small green week mainly owing to a negative movement in dollar and a dull risk on activity along with the broader aspect of safe haven buying due to continued uncertainty caused by the ongoing pandemic which is still unleashing its wrath in many parts of the globe. It does seem the world is awaiting a trigger to get a more directive approach though the trend looks to be already set in place its just that the fuel is on the lower side, and the most awaited trigger could be the extra large stimulus which would offer ample push in the direction. Else the fundamentals remain the same with no notable difference as events come and go but the level of uncertainty refuses to die down. To watch next week – Stimulus, earnings and other important economic data. On the chart – Gold made a pin bar or a reversal candle which would be validated on the next open though there may still be some room for a pull back as the double bottom pattern is yet not convincingly printed. Technically, gold remains a buy on dips since it remains in consolidation until a clear direction is achieved. We have 2 scenarios – 1. Gold closed above the support, till this is held it can go to $1839. If this is crossed it can move towards $1857. And if this is taken out it can rally to $1875. 2. Bears still have a chance to change the trend in their favor if they invalidate all possible bullish patterns and the always available scalp trades. Bullish view – Bulls tried again to surge higher as they were successful in defending $1800 but were denied again as the consolidation continues in the yellow metal. The candle formed shows early signs of reversal which to a certain extent increases the belief in bullish bets even if the full reversal pattern hasn’t formed as yet. Fundamentally, bulls remain buoyed as the current situations are not showing any signs of stability and if one thing gets resolved another remains ready to fill up the empty space in the uncertainty bar. For bulls to remain in the game they need to prevent the invalidation(s) of bullish patterns formed or in formation. Bearishness still has an outside chance if bullish patterns are denied to be formed. On larger terms, gold continues to remain bullish and prices are expected to head higher. Possible trades are on both sides but mainly on upside, gold can be bought above $1828 for the targets of $1839 and $1857 with a stop loss placed below $1817. Longer term target $1875. Dips towards support (and breakout region) can be used to create longs for the above mentioned targets. Shorts can be useful for scalp trades only.
TVC:GOLDLong
by vanimator
COCOA is tapping on the resistance of recent trading rangeNIB (cocoa ETN) is pushing against the top of the trading range. Cocoa has been consolidating for around two month now. Since I am long term bullish on agricultural commodities such as cocoa, if/when the top of the range is taken out, I expect quick run up as most of these commodities tend to have unidirectional run. First target is $32.80 range and next is the yellow down trend line. When and if that trend line is taken, I expect bigger upward move. Have a good trade everyone, T.
NLong
by TK0421
Gold’s weekly outlook: Feb 08-12Gold made another attempt to break through the resistance of $1875 but yet again failed as a volatile dollar denied such a move. Another probable reason behind gold’s limited upside at the moment could be the risk on mood across asset classes which is due to the extensive liquidity in the system and also due to the fact a large stimulus is in the offing as promised by the Biden administration. Cutting to the reality, the vaccines and other measures are seen to be fruitful to an extent but it hasn’t brought the economy back to normal or near normal and in such a scenario all these rallies in risk on assets might be short lived or at a point it(risk on) will propel gold along with it given the importance of gold either as a hedge or safe haven or backup for the currency printed which has been one of the main reasons behind the strength of the rally in the prices till now. Coming to the ongoing pandemic and its effects, still newer variations/mutations are being feared which may be more deadlier than the ones found recently, it certainly provokes a deep sense of uncertainty and fear as the current situation of virus in the world is nearly mirroring last year which turned out to be disastrous for all. It might not be ideal to point fingers at any rallies risk on or risk off as the major driver is the massive liquidity injected by the central banks across the globe and the recent movements in financial instruments should be seen as the new normal way of trading/investing in the markets. To watch next week – Earnings, stimulus and other important economic data. On the chart – Gold had an unimpressive week where it fell below $1800 after a gap of 65 days though the move was short lived as it closed fairly higher at the end of the week. This move might not be surprising once the failed daily breakout was noticed as the next best and sustained pattern formation ideally would be a double bottom sorts which is one of the most impactful and foolproof reversal patterns and currently it looks like in the making. Again even after a move below $1800 and a constant failure to break above the $1875 mark gold remains a buy on dips as the chart remains bullish along with dollar in a bear grip which should keep the gold afloat. We have 2 scenarios – 1. Gold closed above the support, till this is held it can go to $1823. If this is crossed it can move towards $1839. And if this is taken out it can rally to $1857. 2. Bears have a chance again to change the trend in their favor by invalidating any possible bullish patterns and the always available scalp trades. Bullish view – Bulls look a bit exhausted as they were unable to protect the breach of the $1800 even if it was for a very short time. Though still they look strong compared to the bears as the double bottom pattern looks quite imaginable given the fundamentals the world is reeling in due to the ongoing pandemic and other geopolitical issues. For bulls it is very important to protect the lows and till it is safe the metal can rise back to new highs. Bearishness could only prevail if all possible bullish patterns gets invalidated. On larger terms, gold remains bullish and prices are expected to head higher. Possible trades are on both sides but mainly on upside, gold can be bought above $1824 for the targets of $1839 and $1857 with a stop loss placed below $1812. Longer term target $1875. Dips towards support (and breakout region) can be used to create longs for the above mentioned targets. Shorts can be useful for scalp trades only.
TVC:GOLDLong
by vanimator
Maybe it is not too late to get some BREAD !!CBOT Wheat is range bouncing! WHAT NEXT? My current view remained neutral with wheat being in a range of 632 - 670. However, wheat could develop a bullish move on Monday and early Tuesday due to USDA Supply and Demand report later Tuesday. Wheat is overall bullish trading in this range, so we should be looking for Trend-Following Buy setups as it approaches our lower orange demand zone at 625 - 632. So the highlighted green zone is still a very strong area even though it is tested a coupled of times. I strongly believed that this is where smart money a.k.a institutional traders stops hunt and they are looking forward to make the market move higher. As per my trading style: I already have a couple of positions open at 626 and 630 with stop losses somewhat at 615. Always follow your trading plan regarding entry, risk management, and trade management. Good luck! ~ Tuan Anh Commo
CBOT:ZW1!
by TheCommoTrader
Dead wrong on Oil, but what now?Obviously my previous predictions on Oil were wrong, however, it is hard to forecast a vicious virus from the far East. Now, the doomsdayers are back, touting their long bond positions with gold, saying "I told you so." Those positions have worked, and oil has tanked. To be clear, I don't dislike bonds or gold here, but Oil is ripe for a rebound. We are deeply oversold, indeed, I believe this sell-off is far overdone. From a pure technical perspective, the RSI is now turning, and MACD looks to be bottoming out. We should retest the ~60 level again, as this was the previous range bound channel crude was trading in. If 50 is broken, this thesis is invalidated and I am dead wrong. We will see.
NYMEX:CL1!Long
by MT-Macro