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Daily Commodity Spot: Are Currencies Coming to a Near-Term Extreme?


A breakdown of the day's seven most active commodity futures.

The following are the latest daily summaries of my ongoing intraday coverage, providing context to interpret price action. Any prices listed are for a contract's current "front month." Their direction tends to correlate with any ETFs listed for each.

Today's Highlight: Currencies extended their recent trending, probing above recent highs, while stocks fell to their range's lower-end. Have currencies gotten ahead of the game, and are they coming into near-term extremes?

Dollar Basket
Mar Contract DX; (UUP), (UDN)
Wednesday's tepid probe of fresh lows for the week was extended lower nonetheless on Thursday. And now Friday has closed below the consolidation for a second consecutive session. This setup typically produces at least one more lower low. Also, currencies tend to duplicate Friday's behavior on Monday morning, making fresh lows likely Monday morning. Recovering to close positive Monday after probing fresh lows could form a bottom. Otherwise, the trend remains down.

Mar Contract EC; (FXE)
Although the open's gap up to 1.3145 was retraced back down to Thursday's 1.3104 close, Thursday's 1.3186 high was eventually recovered Friday up to 1.3223. The rally's 1.3333 target remains intact, with next resistance at 1.3285.

Feb Contract GC; (GLD)
Holding above 1719.00-1720.00 through Thursday's close made the rally likely to extend to 1746.50. Slightly higher highs probing 1736.00 Friday still managed to close just above Thursday's highs, keeping alive the rally's momentum. Now the rally needs pullbacks to hold any test down to 1724.50.

Mar Contract SI; (SLV)
Friday's opening dip was recovered to probe and close above Thursday's highs. Having retested the rally's 33.55 target intraday, and having ranged around Thursday's high all Friday afternoon, the higher close does not signal the rally being ready to resume.

30-Year Treasury
Mar Contract US; (TLT)
Friday's opening gap down to 142-05 support was recovered to the 143-04 bounce limit. Its resistance needed to hold to for assurance that a new downleg was about to begin. But afternoon highs retested Wednesday's 143-16 FOMC peak. Reversing back down Monday under 143-04 would be credible for launching a new downleg, but not immediately rejecting Friday's rally would make it likely to extend higher Monday.

Crude Oil
Mar Contract CL; (USO)
Friday's choppy session maintained Thursday's range. While that may seem neither bullish nor bearish, the burden of proof was on sellers to extend Thursday afternoon's rejection of the morning's gap up. The sell-off must now basically melt-down Monday to be credible, or else a rally back to 103.00 and potentially to 111.00.

Natural Gas
Mar Contract NG; (UNG)
Friday morning's flat ranging around 2.65 broke higher into the afternoon, and then again into the close, attacking the rally's 2.81 target. Regardless, the rally is unlikely to resume without first testing 2.56, and preferably also 2.50 over the course of 2-3 days.

Editor's note: Rod's analytical techniques are designed to efficiently identify targets and turning points for any liquid stock or market in any time frame. He applies his techniques live intraday, primarily to S&P futures, at RodDavid .com.
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No positions in stocks mentioned.
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