The big question today: Is this just a round of Friday profit taking or are we setting up for a squeeze?
In the forex market I don’t see a major scope for a squeeze but elsewhere the picture is more worrisome and it could begin to spread from there.
1) Oil
Crude prices have been in a prolonged decline, touching $75.84 earlier this week in a 30% decline since June.
WTI crude oil
2) Gold
It looks like it will come down to the wire but if gold closes above $1171, it splashes a textbook three-candle-reversal on the daily chart. More gold analysis here.
Gold three candle reversal
3. Bonds
The bond market was the first to signal a strain before the Great October Whipsaw and 10-years have rallied hard today, forming a bearish engulfing candle on the daily chart.
US 10 year yields reversal
If yields begin to fall again, the dollar could fall as well.
