This morningâ€™s weaker-than-expected U.S.
ADP report was another sign of a weaker economy. With the employment market
possibly contracting, traders grew even more confident that the Fed would add liquidity
to the market.
Speculators continued to drive December
Gold and December Silver sharply higher in anticipation of another round of
quantitative easing by the U.S. Federal Reserve. Pumping more money into the
economy is generally bad for the Dollar, but bullish for commodities and
Technically December Silver regained a
steep uptrending Gann angle from the 17.79 bottom. This is a sign of strength. This angle
establishes support today at 22.59. A close under this level will be a sign of
The U.S. Dollar is trading lower against
all major currencies in reaction to this morningâ€™s disappointing U.S. ADP
employment report. Traders were banking on a figure of +20,000 but were handed
With the number on the wrong side of the
zero, traders sold off the Greenback in anticipation of a weak U.S. Non-Farm
Payrolls number on Friday. The disappointing, but not surprising number also
solidified trader conviction that the Fed will add additional liquidity to the
market in order to stimulate the economy.
No one expected a â€śbigâ€ť number since the
economy only grew at 1.6% according to the latest GDP report, but todayâ€™s
report showed that employers arenâ€™t necessarily firing, but they certainly
arenâ€™t hiring. This morningâ€™s report could be a sign that employment is
beginning a contraction.
The December Euro broke out to the upside
through the Fibonacci target at 1.3896. Letâ€™s see if it can sustain the rally
by establishing support above this level. A close back under the .618 line
could be the start of a short-term profit-taking break ahead of tomorrowâ€™s
European Central Bank policy meeting.
The rally in the December British Pound
helped establish a new higher bottom at 1.5669. The rally, however, appears to
be slowing in front of the August top at 1.5997. Trading is light today because
of Thursdayâ€™s central bank meeting. Investors are looking for the Bank of
England to talk about additional quantitative easing through its asset buyback
The December Swiss Franc is up this morning
as the U.S. Dollar continues to lose its glitter as the global reserve
currency. The main trend is up. A new main bottom was formed at 1.0165. A move
through this price will turn the main trend to down.
The December Japanese Yen broke the
â€śintervention topâ€ť. Traders are approaching the market with caution at current
levels in anticipation of another round of intervention by the Bank of Japan.
So far there has been no sign of central bank activity. The last intervention took place during the
Japanese trading session.
The December Canadian Dollar rallied
sharply higher early in the session but is now trading off its high. The weaker
equity market as well as the intraday break in crude oil off its high is giving
long traders an excuse to take profits. The weaker Dollar, stronger Euro is
expected to help limit the break.
The December Australian Dollar took out
yesterdayâ€™s high while slowing working its way toward the July 2008 top at
.9849. The break in the U.S.
equity markets has had a limited effect on the Aussie. Itâ€™s going to take a
hard break in the stock market to trigger a profit-taking break. The weak U.S.
economy is the main catalyst behind the Aussie Dollarâ€™s strength.