Burning The Shorts

We are seeing quite a bit of activity this morning with Draghi attempting to jawbone the EUR lower albeit with limited success as the EUR/USD seems to be ready to deploy its second stage rocket boosters. If nothing else he’s giving Yellen a brilliant run for her money when it comes to insinuating more dovish monetary policies despite having run out of ammunition and now attempting to face forex vigilantes armed with a BB gun. There will be blood, mark my words.

Here’s a view on the EUR/USD featuring the finger of God on the hourly panel. The daily on the right looks like it’s ready to start trending soon. In that scenario we could easily see us touching 1.15 or higher by the end of the month. I better head to the ATM today as it doesn’t look like Draghi has any real firepower left and has now resorted to performing a monthly ceremonial rain dance to keep those deflationary demons at bay.

Meanwhile we continue to see big moves in the futures as well. After major gains in the grains (that would have been a perfect title yesterday) precious metals are now following suit. Silver just blasted not just through daily or weekly resistance but managed to eviscerate the 25-month SMA and is now trading far above a monthly NLBL. Bullish! With a bit of luck we’ll see a retrace here so that we can take advantage of a last-kiss-goodbye long entry opportunity.

Similar story over in the gold futures – the gold bugs seem to be hellbent on finally breaking out of that sideways churn zone from hell they’ve endured since mid February. Intermediate target would be 1350 here.

Crude also looks like it may be ready to rock & roll. The daily panel (left) is showing us price touching the 100-day SMA and when that happens you quite often see either an immediate retrace or a little dip followed by a celebratory burning of the shorts. I am not going to chase this one but if we get that dip lower and things slow down, I’ll be sure to look for an entry signal.