Daily Futures Commentary June 4, 2009

Thursday, June 4, 2009

Yesterday’s action in the U.S. Dollar demonstrated how much of an influence this instrument can have on other markets. Since almost every futures market group was affected by the stronger Dollar, traders have to consider the possibility that a major shift in investment strategy may be taking place. Based on the trading action and the developing chart formations, it is possible that investors could be shifting toward a stronger Dollar/weaker commodities scenario. The fall in equity prices may be indicating that investors are shifting funds out of risky assets altogether.

Because of tomorrow’s Non-Farm Payrolls Report, traders may have to wait another day to get verification that a topping formation is developing. This is because there is a chance that yesterday’s move was related to trader liquidation ahead of the report. Furthermore, technical chart formations are indicating that a number of markets are in a position to post lower closes for the week which means that Friday’s close will be most important.

A combination of technical and fundamental factors helped contribute to a huge rise in the U.S. Dollar against all major currency futures markets Wednesday. This action …
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