For Professional Clients Only. For Information Purposes Only. Not Investment Advice.
Good Afternoon, when we put out our note on Crude earlier today which flagged a break of 98.25 as leading to a potentially quick drop to 95 (and then possibly 90), we didn't reckon on it happening 30 minutes later! Still, we now have January WTI last at 95.77, so break-out traders would have shorted Crude on the recommendation, WTI is down over US$4 so far today and still looking pretty grim. We still have a feeling for lower WTI, and as our general and long-held view is for a strong USD (DXY), that should exacerbate the risk of further WTI/Brent weakness. On the other key instruments, most readers will know we have been looking for lower Gold prices before getting involved and we have seen sharp drops in both Gold (down US$50 today) and Silver (down almost $2), but possibly there is more to go as Central Banks and other forced sellers take profits wherever they lie. A strong USD also acts as a drag on these prices and other USD-denominated commodities. Policy error risk still runs high and so we will take a small Gold weighting at some point, but not just yet. For anyone that has followed our call on GBP/EUR, today is a good day but it's been a steep rise in a short space of time so we would suggest trimming the positions and taking some profits. GBP/EUR last at 1.1930, up 3 big figures in just a couple of weeks.
Good Afternoon, when we put out our note on Crude earlier today which flagged a break of 98.25 as leading to a potentially quick drop to 95 (and then possibly 90), we didn't reckon on it happening 30 minutes later! Still, we now have January WTI last at 95.77, so break-out traders would have shorted Crude on the recommendation, WTI is down over US$4 so far today and still looking pretty grim. We still have a feeling for lower WTI, and as our general and long-held view is for a strong USD (DXY), that should exacerbate the risk of further WTI/Brent weakness. On the other key instruments, most readers will know we have been looking for lower Gold prices before getting involved and we have seen sharp drops in both Gold (down US$50 today) and Silver (down almost $2), but possibly there is more to go as Central Banks and other forced sellers take profits wherever they lie. A strong USD also acts as a drag on these prices and other USD-denominated commodities. Policy error risk still runs high and so we will take a small Gold weighting at some point, but not just yet. For anyone that has followed our call on GBP/EUR, today is a good day but it's been a steep rise in a short space of time so we would suggest trimming the positions and taking some profits. GBP/EUR last at 1.1930, up 3 big figures in just a couple of weeks.
