The dollar remained fairly flat, and Whipsaw Wednesday was in full effect with inside ranges in most markets. Crude oil EIA data showed a draw of 15k barrels, after API reported a build of 2.7 million. The bullish data along with wildfires affecting Canadian oil sands production allowed crude to break above 100 basis June, but closed the day below. In our opinion the action was overdone and we retain our bearish sentiment, but remain nimble at the same time. The Euro remained range-bound as investors are sceptical with respect to Greek debt restructuring; the day’s highs will have to be respected, along with the 50 day MA at 1.4325.
Once again, we find ourselves at a critical juncture and would need technical confirmation of a breakdown or breakout before participating in futures. We have stock index options expiring on Friday, so we anticipate skewed action which was present today; whether it will hold up, we will find out tomorrow. As for metals, $100 oil fanned the fire for the yellow and silver metal, but in the wake of George Soros selling off the bulk of his gold investment and Silver having yet to justify a trading range after dropping 27% leaves the markets susceptible to sharp sell-offs. Technically, gold was unable to climb above 1500 and Silver fell far short of the 36.80 resistance as traders covered shorts going into the Fed minutes.
Today’s Important Economic Announcements (GMT)
8:30 AM GBP Retail Sales m/m
9:00 AM CHF ZEW Economic Expectations
10:00 AM GBP CBI Industrial Order Expectations
11:20 AM GBP MPC Member Bean Speaks
12:30 PM USD Unemployment Claims
2:00 PM USD Existing Home Sales & Philly Fed Manufacturing Index
2:30 PM Natural Gas Natural Gas Storage
5:30 PM USD FOMC Member Evans Speaks
Corn
Corn futures rallied Wednesday as rain in key grain-producing areas along the Northern Plains as well as flooding on the Mississippi River in the Southeast have hampered the planting of the next crop, spurring recent price gains. July corn gained 4.1% to settle at $7.496 a bushel on CBOT. It traded as high as $7.502 a bushel. The corn contract hit its 30-cent gain-and-loss limit, the CME Group, which operates CBOT, confirmed Wednesday. Corn in particular has had to maintain a delicate balance. Pressured by rising feed and ethanol demand, it had entered the 2011-2012 crop with historically low expectations for end-season stockpiles.
Stop Loss: 754.03
Take Profit: 727.52
USD/NOK
The USD/NOK (Dollar/Krone) has been on a relentless descent over the last twelve trading months. Since our June 10th 2010 high was established at 6.7273, prices have continued to trend as much as 22% lower. Temporarily price has moved off of the established April 2nd low of 5.2147 up to current resistance as seen on our daily chart. The USD is currently at an impasse. The currency has gained strength over the last two weeks against many pairs including the Krone. However, the fundamentals for the currency remain unchanged. More insight will be given as the USD FOMC Meeting Minutes are set to be released on Wednesday this week. If it appears that more monetary easing and the continuation of a low interest rate policy are in the works, we can expect our trend to continue on its present direction.
Stop Loss: 5.5586
Take Profit: 5.5490
GBP/USD
Sterling is lower after an unexpected jump in UK unemployment claims while the unemployment rate surprisingly declined. As expected, meeting minutes from the Bank of England’s latest policy meeting showed the MPC is determined to hold interest rates at ultra-low levels in the near term. A surprise jump in unemployment claims sent sterling lower versus both the dollar and the euro. The unemployment rate surprisingly ticked lower to 7.9% from 7.8% on expectations of an increase to 7.9%. It is a bright spot on an otherwise bleak UK unemployment outlook. The negative data highlights the slow recovery the UK economy faces. We expect the GBP to weaken further today.
Stop Loss: 1.6185
Take Profit: 1.6104
Published by www.SolidityBrokers.com
