Aggressive speculators drove December Silver to a fresh high for the year ahead of this week’s elections and Fed meeting. Traders seem to be increasing positions in anticipation of a Republican victory and new Fed quantitative easing. Some traders are on the sidelines this morning, creating volatile swings on thin volume.
The U.S. Dollar Index finished the week lower after failing to confirm last week’s potentially bullish closing price reversal bottom.
Clearly, both the daily and weekly chart patterns indicate this market can accelerate to the upside if the daily swing top at 78.61 is taken out to the upside. This move is likely to trigger a short-term rally to a 50% retracement level at 79.58.
U.S. Dollar Crushed This Week after Fed Hints at More Economic Aid
The U.S. Dollar finished sharply lower this week after the Fed strongly hinted that it would provide more aid to prevent the economy from derailing. Foreign currency investors reacted as if the Fed had given them the green light to sell the Dollar, delivering a crushing blow to the greenback against all major currencies.
Aussie and Japanese Yen to be Main Focus Next Week
The Australian Dollar and the Japanese Yen are likely to be the main focus next week as both are expected to be big movers if the global equity markets expand to the upside as expected.
Money continued to flow out of T-Bonds and Gold which may be an indication that investors are gearing up for a stock market rally next week.
S&P finishes Near Low; Could Test 1050.50 Early Next Week
The September E-mini S&P 500 finished the week near its low, but slightly above a key 50% price level at 1065.25. The weekly chart indicates the market still has more room to the downside with 1050.50 the next likely target. A test of this level could attract strong buying power.
Euro Reverses Week to Up; Charts indicate More Upside to Follow
U.S. Dollar, Closes, Week, Higher, Despite, Volatile, Euro
The U.S. Dollar finished the week higher despite volatile trading action in the Euro. The Greenback closed decisively higher against the Euro, Swiss Franc and Japanese Yen while ending up lower against the New Zealand Dollar. The Dollar ended up almost flat versus the British Pound, Australian Dollar and Canadian Dollar.
The U.S. Dollar Index finished the week near its high after sharp breaks in the British Pound and Euro drove it sharply higher on Friday. The close above a retracement zone by the Dollar puts it in a position to challenge the high for the year at 81.70. It was a volatile week for the Dollar.