Here are my discretionary thoughts on forex and commodities. I only trade the stock market.
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- Safety haven theme isn’t able to push gold and silver above resistances. A medium term bearish sign.
- The U.S. Dollar is starting to hold on its 50 daily moving average support.
- China will pay for oil with Yuan. A long term bearish factor for the U.S. Dollar.
9 am: Safety haven theme isn’t able to push gold and silver above resistances. A medium term bearish sign.
Gold and silver (particularly gold) went up yesterday when the stock market fell. Precious metals were playing a safety haven theme. But nevertheless, gold and silver still could not break their resistance levels.
Gold and silver are trying to use multiple themes to break their resistance levels and none of these themes are working. This is a medium term bearish sign for precious metals.
9 am: the USD is starting to hold on its 50 daily moving average support.
The USD Index has been stuck in a very narrow range over the past 2 months with the 50 sma as resistance. The USD Index has not been able to break above this resistance for more than 3 days.
The USD is now firmly sitting above this resistance level. The longer the USD holds the 50sma as support, the more likely the USD will be to make a bigger bear market bounce.
1 am: China will pay for oil with Yuan. A long term bearish factor for the USD.
China plans to start paying for its oil imports with Yuan in the second half of 2018. This is part of China’s plan to reduce the U.S. Dollar’s status as the world’s reserve currency.
Russia and Angola are already onboard with this plan. Other countries will follow.
Right now the world uses the Petrodollar to pay for oil. This creates an artificial demand for the USD which props up the USD’s long term value. Once demand for the Petrodollar starts to fall, demand for the USD will fall as well. This is a long term bearish factor for the U.S. Dollar and supports the USD’s bear market case.
The Petroyuan (paying for oil imports with Yuan) is just the start. Going forward China will pay for more and more of its commodity imports using its own currency.
Read Forex & commodities on April 2, 2018: outlook
I only trade stocks. These are just my thoughts/outlook on other markets.
- Gold and silver are in bull markets.
- I’ve decided to buy some gold and silver as long term investments.
- The U.S. Dollar is in a bear market.