Oil Prices Dive to 10-Week Low
The U.S. dollar was mixed during Friday’s session, as it was a day where the currency market showed a lack of direction. On one hand, it rose versus the pound, but on the other hand it dived versus the Aussie. The fact is that it is hard to predict which way the forex market and the dollar will go these days. As a result, you will need to follow all the U.S. data very closely as the trading week unfolds. The dollar may actually end up being a big gainer in the days ahead.
One of the biggest losers when it came to the forex market was the Japanese yen, as the nation’s leaders continue to state that they will do what is needed to boost the economy. Leading speculators feel that there will be more stimulus for the economy in the days ahead. In some respects, it was a relief for traders that the yen rose from a five-year low versus the dollar on Friday.
The Australian dollar is headed for its longest stretch of weekly losses in 28 years. This is bad news for a currency which was previously deemed as strong. This shows traders will need to trade the forex market very careful from now on. Among its biggest losses have been versus the greenback and the pound.
There was a lot of weakness for American stocks during the previous week of trading. Investors had a lack of risk appetite due to the forecast of Fed tapering. In other words, as the U.S. economy improves, this makes it more likely that the U.S. Federal Reserve will cut back stimulus.
This has resulted in financial traders going short on all fronts when it comes to American stocks. This is why you will want to look into alternative assets in the days ahead.
Oil prices dipped to their lowest level in ten days on Friday due to there being a fuel shortage. This is in contrast to what we saw in previous trading days, when the commodity went from strength to strength. This shows just how quickly the situation can change in the commodities market. The lower prices have also come on the concern that the Fed will reduce stimulus. It should be taken into account that the supplies of gasoline climbed the most in 11 months in the seven days ending December 6. Experts point out that demand is weak, and if it does not increase soon, then this could put further downward pressure on prices.
Gold futures were lower for a good amount of the previous trading week, but the good news is that the yellow metal was able to surge more than $13 during Friday’s trading session. Traders were in the mood to go long, as they realized that the commodity dived too far. Therefore, there may be bullishness in the days ahead when speaking of gold. With this in mind, open weekly Call options in gold to maximize your returns.
Gold was the surprise winner when it came to bullish assets at the end of last week. This was despite traders expecting the commodity to make even bigger declines. This shows just how quickly the situation can change in the financial markets each trading day. Traders will want to go long on gold in the week ahead if they intend on making higher returns from the financial markets. However, you still want to follow the global economy very closely to make informed trading decisions.