Last week was the herd. All metals and energies rose at the same time. The US dollar depreciated along with below expectation US economic data releases. This resulted everything rising and breaking past key technical resistances. You went long with a high margin money in all metals and energies. You won. You went short and you got busted.
This week may or not repeat last week. US private ADP numbers on Wednesday and US April nonfarm payrolls is the key. A number below 160,000 will result in another big downward spiral for the greenback. April did not have any Easter employment. I do not foresee any spillover effect of Easters positively affecting US jobs number. The only risk could be past increase in previous month employment numbers. Japanese Yen against the US dollar below 105 (if any) will provoke direct intervention by the bank of Japan and will be create another short term bull cycle for US dollar denominated commodities. Middle East and Islamic state risk have not affected financial markets in April. I believe that this week continue too.
Low risk traders can book profit (on their long positions) just before the release of US April private ADP numbers on Wednesday. Looks for such signs. Thereafter depending on the fall (if any) all metals and energies need to trade over key weekly resistances to ensure continuity of bullish trend. For example suppose gold trades around $1327 in Asian session on Wednesday. Key weekly resistance is at $1308.20.
This post was published at GoldSeek on 2 May 2016.
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