Gas: Volatility still remains high and colder weather over January and February could see the natural gas bulls come back into town says Luke Suddards
Aa
Share
It's going to be a resillent week as they're not many crucial macroeconomic events in the schedule and investors, traders and companies are awaiting the decisions of all of major central banks in the world. Even if volatility isn't dominating today's headlines it's good to dwelve into situation on the markets as gas prices are falling in the US and EUR/USD may be on the verge of a trend reversal. As a week before, we're pleased to ask Finimize's Luke Suddards to speak his mind.
Natural Gas (NATGAS) plunges, have markets got calmer at last?
Gas prices are falling as storage levels remain high and temperatures have been warmer. It looks as if price wants to test the $5 level. Volatility still remains high and colder weather over January and February could see the natural gas bulls come back into town.
Are you of the opinion that EUR/USD price movement suggests a trend reversal?
Yes, in the short term it does seem as if we're seeing EURUSD reverse its downtrend and it is now above its 200-day SMA. The euro is a pro-risk currency and as long as we see equities rallying into year-end we could see EURUSD reach 1.10. The other factor to consider is expectations around the Fed. We saw the jobs data out last Friday coming in hotter than expected, particularly the wage pressures. The next major risk event for FX traders will be US inflation data out on 13 December. If that surprises to the upside then we likely see the terminal rate revised higher and a higher probability of a 75bps hike priced in for the Fed's next meeting. December is far and away the euro's best month. EURUSD has gained in 14 of the past 20 Decembers, and all of the past five. The average gain is around 1.3% with a hit rate of 70%.
