June 10, 2011
- in Uncategorized by schooloftrade
Euros tumble on Bailout Concerns, Crude Oil tumbles as demand drops, and Finance Ministers attend the G8 Summit in Vienna
Traders around the world are reacting to news this morning out of Europe regarding bailout potential for southern Europe. The debt level (and concern level) keep rising as northern Europe keeps trying to help save the stability of the Euro.
The falling Euro is putting pressure on Global banks to keep interests rates lower (to stop inflation) than normal, which is driving down demand, causing prices on Crude Oil to fall today. Even ahead of the summer driving season we hear rumors of continued resistance on crude oil prices. We certainly wont complain.
Looking at today’s economic news, you need to look hard to find it, but we have the G8 Summit in Vienna starting today, which will have the Finance Ministers (the people printing all the money) meeting to discuss global economic policy, which we assume will affect Gold and other fixed income and interest rate products around the world. It’s hard to tell what to expect this morning. It’s a Friday, and we may not get any news from G8, so we will see shortly.
News today we have both CAD News (Crude Oil correlation) and Import/Export Prices at 830am. That’s the only news we have today until the late-afternoon news at 200pm about the treasury budget. The big question is how this G8 summit will affect the markets and the news reaction today. We can see both sides of the coin. We need to get in and get out early because it’s a Friday, however we may get late morning news out of this meeting in Vienna that may have European traders moving things around late this morning. Tough to tell, but we will be ready for whatever the day throws our way.
Looking at the charts this morning we can see the Dollar Index is much stronger this morning after this news out of Europe, Crude Oil is falling back down to the pre-Hurricane news announcement (surprise surprise) and Gold continue to chop sideways ahead of the G8 Summit response.
We’ve been watching the dollar index all week, looking to see which direction it would take after breaking out of its sideways range. The dollar got a nice push to the upside after Euro fears increased, and we will look for the dollar to develop this trend so we can use it as a correlation. As of right now we can’t be overly certain this trend is here to stay, so wait for price to break 74.500 before we get too bullish on the dollar. For today we will use the 13range (see below) chart to make educated decision on the current dollar trend.
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| DX 89Range SchoolOfTrade.com |
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| DX 13range SchoolOfTrade.com |
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| Crude 89Range SchoolOfTrade.com |
If price rises:
– Avoid the middle of the range around 101.50, also the open 101.30
– Selling resistance levels first, and then looking to buy pullbacks with higher prices.
– Selling 102.00 highs of the wedge/channel
– Sell 102.40, 12.75, 103.30, 103.35
– We do not expect much action to the higher side today.
– We will be buying at support as prices are dropping
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Price Falls:
– I’m buying support levels first, then selling retracements with new lower lows.
– Even with prices falling this morning I will not sell the lows.
– Avoid the BMT and the big round number of 100.00
– Buying 100.80 support level, 100.45, 100.20 as support. Then sell retracements below these three major support levels from the 89range chart.
– Avoid 100.00
– Buying 99.52 support, and then selling below 99.50 to sell the highs of the wedge below us.
– We will HOPE for price to break the 99.50 so we can sell it down to 98.07 the lows of the wedge.
