This week has seen continued dollar strength and we now have the dollar in a new long-term uptrend against a couple of the majors with possibly more to come this week.
The stock markets remain mixed, as do commodities. Interest rate futures are consolidating near their recent lows and remain in a long-term downtrend.
The US stock indices have had a mixed week but the Nasdaq 100 ended higher by 1.61%, but both remain some way off their recent all-time highs and need considerable further strength before the uptrend resumes if indeed, it does.
The Dax and Nikkei, the two stock indexes that we trade which are already in long-term downtrends are roughly in the middle of the range from their January highs and February lows. A breakout in either direction is currently out of range.
The energy markets shrugged off their recent correct, rallying from just above a key support level and went on to make new highs for the current move. Light Crude Oil came just 3 cents short of printing $70 for the first time since November 2014. Brent Crude remains the stronger of the two in terms of price, having hit $75.61 this week. The long-term trend remains up for the sector, but Natural Gas continues to lag.
Gold and Silver broke to the downside having broken support but have so far been unable to press further to the downside. The long-term trend is now down for all four metals that we trade at LS Trader.
From last week: “Lumber continues to run and shows no sign of stopping at present. There is no bearish divergence in momentum. The only negative is that sentiment is extremely bullish.” Lumber rallied to new all-time highs again. Sentiment remains extremely bullish, yet volatility is moderate and there is no momentum divergence, so we could have further to run.
Corn made its highest print in almost two years as several of the grains markets resume strength. Cotton also made its highest print in almost a year.
From last week: “However, dollar strength is becoming evident against several of the major currencies, having already broken out against the Swiss franc this week. A change of long-term trend is within range for the Australian dollar this week, where major support is likely to be tested.” The Australian dollar broke support as expected to complete a long-term trend change to down, but so far without follow through.
The dollar continues to gain ground against many of the majors and we could see changes of the long-term trend against the British Pound and Euro, as well as in the dollar index itself over the next few weeks.
Interest rate futures
Interest rate futures continued their short-term corrective rally this week and came close to testing resistance, which has so far held firm. The long-term trend remains bearish and the RSI is in the bear range, where it has been since September last year.