NASDAQ 100
The Nasdaq 100 initially tried to rally during the week but has collapsed as fear continues to grip the market. Interest rates in America continue to climb and we have now sliced through the crucial 23,800 level.
We are below the 50-week EMA as well and quite frankly; this is a market that is just simply going to move on the latest headlines coming out of Washington or Tehran because that is moving the interest rate markets so violently. As rates rise, they really weigh on technology stocks and that is what we are seeing play out here.
USD/MXN
The US dollar initially fell against the Mexican peso but has formed a hammer for the third week in a row. I suspect this will lead to a weakening Mexican peso and as interest rates rise in America, it does help with that negative swap you would have to pay in order to buy this pair.
To the upside, the 50-week EMA sits at the 18.29 region and then the 18.50 area I believe is your next target. If we do fall from here, watch the way the candlestick forms for the following week because we need to do a lot of damage to US dollar strength to turn this thing around. While I do not necessarily like buying the dollar against the peso overall because of the interest rate differential, this certainly looks like a market that is trying to rally.
GBP/JPY
The British pound has rallied slightly against the Japanese yen for the week, and I think at this point we are going to be watching the 214-yen level more than anything else as it has been a significant barrier. If we were to break above the 214-yen level, then the market is likely to go higher.
Short-term pullbacks I think continue to offer buying opportunities but there is always the threat of the Bank of Japan trying to intervene. That being the case, you do have to be cautious, but you also have to recognize that it is probably a somewhat difficult job for the central bank to keep the value of the yen from being eviscerated. The interest rate differential will continue to drive these yen-denominated pairs higher with the British pound being a prime beneficiary.
EUR/USD
The Euro has been all over the place for the week to essentially form a bit of a shooting star. We are hanging around in the same range we have been in for a while and I do not know that much has changed. If we can break down below the 1.14 level, then the US dollar should strengthen quite drastically.
In that environment, you probably buy the US dollar against almost everything, not just the Euro, although this is a market that can be a great signal as to how the rest of the world is going to trade against the greenback. If we break to the upside, clearing the highs of this past week, that is dollar negative in general and that would more likely than not have this pair looking to get to the 1.18 level.
Gold
The gold market plunged for the week but recovered quite nicely. In fact, we are starting to form a massive weekly hammer, but we need to get above the $4,600 level to be truly impressive. This is a market that has plenty of reasons to go higher but the one thing that is working against it is the fact that the interest rates in America continue to climb.
Higher interest rates continue to be a major issue and that is the one thing really keeping gold down because we all know that there are plenty of geopolitical issues out there that could continue to drive it to the upside. If we were to break down below the $4,000 level, that could be catastrophic for gold, but as things stand up right now, it looks like we are at least trying to bounce.
BTC/USD
The Bitcoin market has been somewhat soft during the week, but we are hanging around the same area and considering that there is a hot war between Iran and the United States, it is actually performing fairly well. We are hanging around the 200-week EMA.
We continue to see $72,000 offer resistance and I think the $60,000 level underneath continues to be a bit of a floor. Ultimately, this is a very noisy market, but I think it is in the midst of trying to form some type of base for a longer-term move.
Natural Gas
Natural gas has fallen during the week, but we have seen a little bit of recovery. I think natural gas is a market that most retail traders should probably be avoiding right now as the demand for natural gas is falling off of a cliff.
While I do understand that the Europeans are going to have issues getting natural gas, it is also the wrong time of year to see a lot of demand for natural gas and unfortunately, most retail traders that I talk to about natural gas have no idea that they are trading a US-centric contract. In other words, spring is coming, and rallies are to be sold in on signs of exhaustion.
USD/CHF
The US dollar has rallied quite nicely against the Swiss franc, and it does look like we are heading towards the crucial 0.80 level. If we were to break above there, then we could see this market really take off to the upside but right now I do not think that is likely to be the case.
In this environment, I am positive on this market, and I do think that interest rate differential continues to carry this market higher with the central bank in Switzerland offering a bit of a floor as well due to the fact that they have threatened to intervene if the Swiss franc strengthens too much. It simply sets up a nice buy on the dip behavior and collecting swap at the end of every day as a way to go forward.
