The euro ended the week negative against the US dollar as the 1.18 level continues to be a major barrier. I suspect that the next week will probably see more of the same, but we do have the jobs number announcement coming out on Friday in the United States, which could have a major influence on where we go next. With that being said, I think we remain fairly choppy and sideways until Friday, but if we can close above the 1.1875 level, the euro goes looking to the 1.20 level.
The British Pound pulled back a bit during the week as it continues to struggle with the 1.35 level. The 1.35 level is a large, round, psychologically significant figure that continues to cause a few headaches for traders. That being said, we are still in a “wait and see” mode here, so I suspect that this will be much like the euro, in the sense that we may get a resolution by the end of the week. I am not looking for much at the moment.
Gold continues to see a lot of volatility, but this last week was particularly negative. At this point, we have re-entered the previous accumulation pattern of the ascending triangle, but we are trying to bounce and recover. If we can clear the $4400 level, then I think the gold market has a real shot at going higher. Otherwise, I’m looking for sideways action at the moment, but have no interest whatsoever in shorting this market as there are still plenty of people out there willing to buy it.
The pound drifted a little bit lower against the Japanese yen for the bulk of the week, but just like we had seen the previous week, buyers came in and picked it up again. The market looks as if it is still watching the ¥209.20 level as a potential floor, and I’m inclined to be a buyer of dips in this market as you get paid to hang onto it, and of course, the Bank of Japan is essentially stuck with loose monetary policy for the foreseeable future with the massive amount of debt that Japan currently owes.
Bitcoin continues to consolidate, and I think that will probably be the main thing for the next several weeks. On short-term dips, I see a lot of interest in buying Bitcoin, and I think that will continue to influence where we go next. That being said, if we were to break down suddenly and go below the $80,000 level, that would be a very negative turn of events. A break above the $94,000 level has been bullish for this market again, looking for a move all the way back to the $108,000 level, but I would anticipate it taking some time.
The US dollar has rallied a bit against the Canadian dollar during the trading week, and as we are closing things out, it looks like the US dollar is trying to break above the 1.3750 level. The real challenges between there and 1.38, and breaking above the 1.38 level, could have buyers trying to push this thing back to the 1.40 level. Ultimately, this is a market that I think continues to be very noisy, which is typical for this pair, but I am looking at this through the prism of buying dips and trying to accumulate value.
The NASDAQ 100 had a pretty sickly looking candlestick for the week, as we continue to see the markets meander. That being said, I would read too much into it because we are, of course, in the midst of closing out the holiday season. Volatility and a lack of volume will be working against you, but I think the real price here is the 26,000 level. If we can break above there, then the NASDAQ can continue to go much higher.
Finally, in the “bubble du jour”, we have the silver market. The silver market has seen quite a bit of negative volatility this past week, but I would not read too much into it as we are in the midst of the holiday season and, quite frankly, it’s difficult to imagine a scenario where traders would not have taken some of the gains out of the market. Where we go from here is a bit of a mystery, but the healthier move would either be a pullback or some sideways action. Currently, it looks like the $70 level is very important, so if we break down below there I think the correction could be fairly steep. Going parabolic would be a huge mistake at this point.
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