Making a comeback from last week’s update is the Australian dollar (AUD). This week has seen the AUD/USD above 0.7800. The change in the winds was brought about by China being the next central bank to ease, causing widespread greenback (USD) weakening against most of its majors as well as the stability of economic growth in Australia, which has become lengthier than expected. The Australian dollar also saw new heights when the Reserve Bank of Australian (RBA) cut their interest rates to a low of 2.25 percent on Tuesday.
In light of the subject of precious metals, in the early session, Gold and Silver were gaining some momentum. However, this was short lived as in the later trading session, the markets saw the European stocks extending their gains with the German DAX hitting an all-time high as well as the UK FTSE gaining on a high note. Demand for the safe haven assets fell even further as the strength of selling a much-weaker US dollar has been unable to provide the buck-denominated metals any support.
After suffering a dismal period in the second half of 2014 as well as bringing in the New Year, Oil may just be making its comeback. The sudden change of events came about when Oil futures had climbed for the first time in almost an entire quarter from $44.00 to $53.00 a barrel back in 2004. However, this time around it only took 3 days to gain more that 20% instead of 3 months. The market experts say one of the three reasons could have led to the change in direction for this commodity. Either, the strengthening USD, the weakening Euro (EUR) or finally the Chinese manufacturing activity index. Who really knows, but traders are in a state of confusion about this commodity. I would steer clear and walk on the side of caution of this tempting commodity if you are not that much of a risky trader. Personally, I will stick to my guns about oil and my personal feeling that Oil will not make a big comeback in the next 2 – 3 months. I still see it sinking as low as $35.00 per barrel.
Today’s Trading Tip:
CALL on the AUD/USD is my finest choice of the day. If you wish to place any trades on Crude Oil today then ensure it is for short-term trades. Don’t overextend yourself on this commodity especially if you are a cautious trader.
Have a Good Day Traders!
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