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Is Gold Setting A Bottom? July 16th 2015 Fx Analysis

Is Gold Setting A Bottom Or Getting Ready To Break New Lows?

During November 2014, Gold made its first run towards $1140 and held. Again in the spring of 2015 gold made another test of $1140 and once again bounced nicely. We are for the third time testing $1140 and the question rises again, are we going to be setting a bottom or finally break through and set multi-year lows? As a big fan of that beautiful yellow metal I’m hoping for sub $1000 and I tend to think we are going to see it. If you asked me 6 months ago whether or not we would see these prices I would have very clearly said no but some things have changed. 

At this point I tend to believe they will do everything possible to kick the can down the road as long as possible. If things are stabilized the interest in gold as well as silver will remain muted. This is in combination with the fact that both gold and especially silver have been a victim of naked short selling. At some point in the future this will end up being a good thing for those holding physical. At some point the price of physical will detach from “paper” gold and silver. When this does occur the surge into physical metals will be quite aggressive. It will also clearly illustrate just how manipulated the paper commodities market truly is. Either way I do believe those looking to buy have some time. Obviously world events will dictate the timing of this, and an unexpected economic nose dive will speed up the process significantly.

Euro Nearing Major Support Levels

The Euro did not produce any trades yesterday based on our selected levels. Remember the market must be doing what we want otherwise we simply leave it alone. As our goal is to track smart money we only deal from high probability manipulation points. Therefore interaction with these levels is essential if we are to see a trade potentially setup. Today I will still be open on direction as the start of this move was Greek news and thus I tend to trust it less. 

The Euro has already ran into a very substantial lower level and for the time being it is holding. The current Asian lows will be the first lower manipulation point I would look for a valid stop run to occur. The next point will based on the lows from late May 2015. 

EUR/USD Chart - July 16th 2015

The Pound Continues To Hold Yesterday’s ‘Tape Bomb’ Gains

The Pound is still holding the gains from yesterday’s move up following talk of a future rate hike closing in. With Canada cutting rates, UK CPI being at 0, and the world economy barely holding its head above water…how likely does a rate hike seem. The cynic in me favors a stop run of the highs to trade against Tuesday’s move up. This is however just an opinion and I would need to see a valid stop run and confirmation of an upper level to take the trade. On the contrary, a break and hold above the Tuesday high tells us the market believes a rate hike might be nearing and thus will likely signal further upside. The Tuesday highs are clearly today’s line in the sand for the Pound.

GBP/USD Chart - July 16th 2015

Forex News For July 16th 2015

ECB Interest Rate Decision 7:45 AM Eastern: Obviously this is very unlikely to change. With that being said the same was true about yesterday’s CAD rate decision and avoid carrying a trade into news such as this.

ECB Press Conference 8:30 AM Eastern: This is where most of the action will take place. Historically the ECB has been quite good at letting the market know what was going to occur in advance through the press conference. This is also why the press conference has always been what people pay attention to.

US Yellen Testifies 10:00 AM Eastern: I don’t know about you but I’m about fed up with hearing this pig talk. There has been a lot of talk from here that has nothing to do with the current market and if the same is true tomorrow then there is nothing to worry about in regards current market conditions.

US Philly Fed Manufacturing Index 10:00 AM Eastern: This generally takes a deviation of 8 +/- from the expected number to get a sizeable move. Like all US data Philly Fed has been gaining some size in regards to the market move it has the ability to create. Overall don’t expect much.


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