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Treasury Bonds Rally Sharply Higher in Flight to Safety Rally

Discussion in 'Forex Daily News & Outlook' started by futuretrends24, May 5, 2010.

  1. futuretrends24

    futuretrends24 New Member

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    Today’s sample of Futures Analysis from FuturesHound.com

    June Treasury Bonds closed sharply higher as equity markets collapsed and demand for safer assets increased. The rally early in the trading session sent yields plunging while triggering a breakout over the last main top at 121’05. T-Bonds began to break from the 121’14 high near the mid-session after triggering stops above the last main top at 121’05. Higher volatility and strong upside momentum should underpin the markets, but gains could be limited if traders decide to lighten up their positions ahead of Friday’s U.S. Non-Farm Payrolls Report.

    June Gold finished higher after a successful test of a key 50% level at $1158.60 encouraged fresh buying. Gold initially broke after a strong rally in the U.S. Dollar. A break in equity markets also helped drive down demand for the metal. After testing the 50% level at $1158.60 and putting in a bottom at $1156.20, gold began to rally as the Euro plunged over 1%.

    Speculators began buying gold as a hedge against a possible collapse in the Euro. The strong momentum late in the trading session could lead to a follow-through rally on Thursday. The only negative to the gold market at this time appears to be margin call selling. Should equity markets break sharply again, traders may have to sell gold to meet their margin calls in the equity markets.

    Read full article at full article at FuturesHound.com as well as Futures Analysis, Futures Education and exclusive timely market Gann Analysis

    Disclaimer: Trading on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore should not invest money that you cannot afford to lose.
     
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