June Comex Gold futures finished sharply higher on Monday as violence in Ukraine triggered an aggressive speculativeJ buying spree. A steep drop in U.S. equity markets also led to increased hedge purchases.
Besides the fundamental events, technically, the market confirmed its double-bottom at $1268.40 and $1272.00 when it crossed the recent top at $1306.60. This move also turned the main trend to up on the daily chart. The objective of this chart pattern is $1341.20 to $1344.80. Based on the current upside momentum, this objective could easily be reached within the next 5 to 7 days.
Sellers hit the June Crude Oil market today as traders chose to ignore the events in Ukraine and shifted back to the supply and demand fundamentals. With supply at a record high, prices should have a hard time rallying until the supply condition is cleaned up or demand begins to increase.
Technically, a pair of bottoms at $98.74 and $98.15 separates the market from reaching a major downside objective at $97.53 to $95.98. On the upside, retracement zone resistance is at $100.42 to $101.13. The first level stopped the rally on Monday.
Although sellers are in control today, speculators will be watching the situation in Ukraine for any disruptions in supply. A disruption in supply could trigger greater demand for Brent crude which could lead to short-covering in the West Texas Intermediate market.
The EUR/USD finished slightly better on Monday. Despite a lower economic forecast for the Euro Zone, the currency still managed to eke out a small gain versus the dollar. Volume is below average as investors take to the sidelines ahead of this week’s European Central Bank announcement. Investors are a little tentative about pushing the market higher because of the possibility of fresh quantitative easing by the ECB.
The GBP/USD traded a little higher on limited volume. Today was a bank holiday in the U.K. In addition, many investors may be standing aside until after this week’s Bank of England Monetary Policy Committee announcement. Investors expect a serious discussion about an interest rate hike.
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