Copper
The copper market initially tried to rally this week, but the markets are giving up gains above the $6.50 level. Ultimately, this is a market that still has a lot of demand out there, but as the artificial intelligence trade gets a little more noisy, that continues to cause some headaches for copper bulls.
Nonetheless, this is a market that still has plenty of support underneath, and the $6 level could end up being a significant floor. Ultimately, if the market were to turn around and rally from here and recapture that $6.50 level, it could lead to a much bigger rally to the upside.
S&P 500
The S&P 500 has been all over the place this week, which makes sense considering that we had the U.S. elections, but really the big story here is going to be the interest rate situation and whether or not rates continue to cause problems, as real rates pay people to hold paper instead of holding stocks.
Ultimately, a move above the $7,600 level would be strong for the S&P 500. A breakdown below the 50-week EMA, currently at the $7,259 level, would be bearish.
Silver
The silver market has rallied quite nicely for most of the week, but did shy away from the $55 level, which is a large, round, psychologically significant figure and an area that's seen both resistance and support in the past.
It is showing resistance right now, and rising real rates continue to be a major problem for silver. Therefore, it's likely to continue to see hesitation in breaking out.
Gold
The gold market has also been bullish but struggled below the $4,200 level. If we can break above the $4,200 level, then gold really could start to take off. But again, we have the same problems with real rates over here as we do in silver, with the gold market looking a little heavy.
If we were to break down below the bottom of the candlestick for the week, it could open up deterioration in the gold market down to the $3,500 level.
USD/CAD
The U.S. dollar rallied against the Canadian dollar for the week, but most of what we've seen has been in the back half of the week, as the employment numbers of both countries moved in opposite directions. The U.S. added 165,000 jobs last month instead of the expected 65,000, for a net surprise of 100,000 to the upside.
Conversely, Canada failed in its employment estimate, losing 4,700 jobs instead of gaining 14,600 as anticipated. Ultimately, this is a market that looks likely to continue to see the interest rate differential favor the United States, as well as economic policy and momentum.
GBP/USD
The British pound rallied a bit during the week and then gave back gains as those jobs numbers came out of America. It looks like we are failing to hang on to gains, but we still have significant support below near the 1.32 level.
Overall, this is a market that I think continues to see a lot of back-and-forth trading. At this point, despite the fact that the British pound has rolled over, it doesn't look very much like a market that has changed overall.
EUR/USD
The Euro tried to rally at the beginning of the week, testing the 200-week EMA, and then gave back gains. The market looks as if it is going to continue to favor the U.S. dollar overall, as the Europeans have to worry about things like energy over the winter and the fact that the ECB seems relatively noncommittal to some type of tightening.
On the other hand, the Federal Reserve is expected to raise rates in December, so I anticipate continued downward momentum.
USD/MXN
The one place the U.S. dollar is struggling is against the Mexican peso, but that makes a certain amount of sense because of the interest rates favoring Mexico. MXN 19 continues to be an area of importance, and if we were to break down below the 200-week EMA, we could drop towards the MXN 18 level.
All things being equal, the U.S. dollar could fall against the Mexican peso due to the idea that the better the U.S. economy does—and with that jobs report, we certainly have seen signs of it—the better the Mexican economy will do. I believe a pullback is ready to occur.
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