AUD-USD took out the high of 0.9953 by 10 pips at 0.9963 below been sold off aggressively. Current retracement is heading towards the 55-EMA which is close to the 38.2% retracement level at 0.9800. A close below the 55-EMA on the 4-hourly chart would be the first warning that the bullish is in doubt.
USD-CHF had a marginal high relative to Friday at 0.9883. At any rate, it is still below the 55-EMA though the rebound in yesterday’s session is relatively aggressive. This rebound is now near the 50.0% retracement from 1.0065 to 0.9725 at 0.9895. This level is near the 55-EMA (currently at 0.9897). There is a good chance this rally can be contained there. Having said that, a close above the 55-EMA in the 4-hourly chart would be the first sign that the decline is losing strength. At any rate, price actions from 1.0065 to 0.9725 are corrective in nature which may portends a period of consolidation.
USD-JPY indeed traded to the 50% retracement of 80.23 to 84.39 at 82.31 and reversed sharply. Though unexpected, it is currently just under the 61.85% retracement level of 84.39 to 82.32 at 83.60, having traded as high as 83.65. The short-term outlook is unclear as the MACD is still below the zero signal line while price actions are now above the 55-EMA. Further rally would challenge the high at 84.39 and if so, the overall long-term bearish outlook would have to be reassessed.
GBP-USD on the other hand is faring slightly better relative to EUR-USD having traded as high as 1.5822 before easing. This level is near the high of 1.5836. Further break there would open a cluster of Fibonacci retracement levels; notably the 50.0% and 61.8% retracements of 1.6299 to 1.5484 at 1.5892 and 1.5988 respectively. So far the advance is corrective in nature as was the decline from 1.6299 to 1.5484. This means GBP-USD is largely in consolidation in the long to longer-term outlook. On the downside, the 38.2%, 50.0% and 61.8% retracements of the rise from 1.5484 to 1.5822 at 1.5693, 1.5653 and 1.5613 respectively should contain further weakness besides the short-term support is at 1.5484.
EUR-USD has stayed very much within last Friday’s range; closing below the 38.2% of the rise from 1.2967 to 1.3421 at 1.3248. In the short-term, bias is slightly negative with the possibility of further weakness to the 50.0% and 61.8% of 1.2967 to 1.3421 at 1.3194 and 1.3140 respectively. On the upside, the next target is the 38.2% retracement of 1.4267 and 1.2967 at 1.3464. Further break above this level lay a series of Fibonacci retracement levels at 1.3617 and 1.3770 respectively.
A single trader has gobbled up to four-fifths of the copper traded in London, stockpiling it in warehouses. The unknown buyer has been building up the dominant position since at least last week, putting a squeeze on the market.
According to the rules of the London Metal Exchange (LME), the trader must lend out copper if it holds between 50pc and 80pc of the total to maintain day-to-day liquidity in the market.
The trader is currently lending at a 0.5pc premium to the cash price.
The premium for spot price copper over delivery in three months’ time reached $89 (€66) in the middle of this week — the highest in two years.
Stockpiles in London have fallen by more than a third since their levels at the beginning of the year.
LME copper was steady at $8,720 per tonne this morning, having reached a high of $8,732 earlier. A record price of $8,966 was hit in mid-November.
The large position is not the only reason the copper price is high.
There are fears of a shortfall in supply next year, as mining production is not expected to keep pace with rebounding demand following the recession.
Two US investment banks and one UK company also want to launch exchange-traded funds linked to copper, which is likely to suck demand out of the market further.
Attempts to “corner a market” have been made for centuries, and happen when an investor purchases a large enough market share to be able to influence the price of it.
Investors can do this in several ways. The easiest is to buy the commodity and hoard it.
Another way is to buy futures contracts and sell them later at a profit after inflating the price. However, very few of these attempts have ever succeeded.
Here are two examples.
Mr Hamanaka bought one million tons of copper over a decade in a desperate attempt to keep prices up.
At one point he held so much of the metal — as much as 5pc of world supplies — that traders dubbed him Mr Copper.
Mr Ward bought 241,000 tons of cocoa beans and now owns enough to manufacture 5.3 billion quarter-pound chocolate bars.
Mr Ward, who is worth around £36m, holds so much of the market he could force manufacturers to raise the price of everyone’s favourite chocolate bars.
The world’s banks will collapse in a few hours from now when millions of people withdraw their money simultaneously to “destroy” the system.
It all began two months ago with a muddled interview on a French regional newspaper website by Eric Cantona, the footballer turned film actor. Cantona, 44, suggested that it was time for a “bloodless” revolt against capitalism.
“If 20 million people withdraw their money, the system collapses, no need for weapons, blood, or anything,” he said. More than 34,000 people around the world, mainly in France, Italy and Britain, have taken Cantona’s big idea seriously.
They have pledged their support to internet sites which have called for a co-ordinated “bank run” tomorrow. Another 27,000 are said to be “considering” joining in.
Politicians and bankers, who initially ignored the growing “buzz” surrounding the Cantona bank raid, have been making increasingly jittery remarks in recent days.
They say there is no danger that the banking system will collapse, even if the super-wealthy Cantona withdraws all his own millions (which he insists that he will).
They fear, nonetheless, that mass demands for cash could gum up the system in some countries and cause, at least local, liquidity problems.
Hard-left politicians in France initially welcomed the idea of the 7 December banque attaque. They cooled their support after the idea also won the backing of politicians on the extreme nationalist right.
It is doubtful whether Cantona – who has made millions from his football and acting careers and a string of TV ads for razors, sportswear and tea – expected to start a revolution.
The former Manchester United striker’s interview with Presse Océan on 7 October, which has become a big hit on YouTube, starts incoherently but then becomes portentous.
“If you want to talk about revolution, there is no point in taking up arms and killing people,” he says. “There is something very simple we can do.
“The system is based on the power of the banks. If 20 million people withdraw their money, the system collapses. No need for weapons, or blood or anything.”
His idea was taken up a month ago by a scriptwriter called Geraldine Feuillién, who created a website called Bankrun2010.
The idea of mass cash withdrawals on 7 December has since spread all over the world. Asked if he would be taking part, Cantona told the French newspaper Libération last week: “In view of the strange solidarity which is developing … yes I will be there on 7 December”.
Ms Feuillié insists that the international banking system is so weak that even a small bank-run – much smaller than the 20 million people envisaged by Cantona – could have devastating consequences.
“The system is already clinically dead,” she said. “Even a partial success could bring the banks down because Europe especially is short of liquidity.”
Not so, insist the French banks. Most banks around the world have limits on how much cash you can withdraw without giving several day’s notice, they point out. There has been no surge of advance requests.
Is Eric Cantona about to enter economic as well as footballing history? Or will he score an own goal? Answer when the banks open in a few hours time.
After hitting the 50% retracement level 1.0182 to 0.9537 at 0.986, AUD-USD looks set to challenge the high of 0.9953 next. Yesterday’s retracement is so far limited to the 23.6% retracement of 0.9537 to 0.9937 at 0.9847. Further decline, if any, should be contained above the 55-EMA which is close to the 38.2% retracement level at 0.9874. Sustained rally above 0.9953 would confirm the 3-waves decline from 1.0182 to 0.9537 is completed and AUD-USD is set to challenge its all-time high of 1.0182 and above. On the downside, a close below the 55-EMA on the 4-hourly chart would be the first warning that the bullish is in doubt.
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