Nick McDonald 's Opinion

A markets and trading columnist for the NZ Herald

Nick McDonald: Here are some markets to watch

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It's not just the Ukraine crisis that has sent world natural gas prices higher, says Nick McDonald. Photo / Thinkstock
It's not just the Ukraine crisis that has sent world natural gas prices higher, says Nick McDonald. Photo / Thinkstock

These are some key markets and price points that traders will be watching in the weeks and months ahead for potential opportunities.

1 - Gold

Tension and uncertainty around the world is putting upward pressure on gold which has rallied from $1200 to $1380 in three weeks. The week ahead should see a test from below the historical price resistance level at $1400. Any break above this key level is a good indication that the bulls are very much in charge and the next stop is likely to be $1550 - that's a $150 window of opportunity on the gold price which short to medium term traders will be looking to take advantage of.

2 - NZD/USD

Only four weeks in the last 30 years has NZD/USD had a weekly close above 0.8500 and last week just happened to become the fifth. This is a major level for the currency pair and a significant sign of strength if we can hold the level this week for a second week running.

Watch the 85c level closely to see if it now supports the price as it is retested from above or if price rejects 0.8500 to end this week below there like it has many times in the last three years. Holding this key level will show that price is strong and well supported but breaking higher again above 86c would be very strong indeed.

It is slightly longer term than the week ahead but watch out for new highs and 90c later in 2014. Barring a major shift in US Federal Reserve policy, the forecasts for aggressive Reserve Bank interest rate hikes forecast in the coming years is going to keep upward pressure on the NZD/USD.

3 - Natural Gas

In mid-2008 natural gas was trading at $20. As recently as late 2013 it traded as low as $2.48. Now having finally broken that five year downtrend, natural gas looks set to move higher and has big opportunity to the upside as it recovers some of those losses. I am looking for buying opportunities on the weekly chart and many traders will be looking keenly for any pullbacks to $4 from last week's close at $4.42.

It is not just the Russia/Ukraine tensions that are contributing towards rising prices.

Sentiment is changing and that is not just showing on the charts with the new price uptrend. In the BP Energy Outlook to 2035, BP sees natural gas as "the fastest growing of the fossil fuels, with demand rising at an average of 1.9 per cent a year".

Nick McDonald is a New Zealander teaching everyday people how to trade the worlds markets via his company Trade With Precision.

Nick McDonald

A markets and trading columnist for the NZ Herald

Nick McDonald is a leading independent trader and trading trainer with a global following via his company Trade With Precision. It started back in 2004 when Nick left his 9-5 job while living in London and within 3 months of discovering technical analysis became an independent full time trader. He founded Trade With Precision in 2006 born from corporate requests for him to train retail trading clients of large brokers and exchanges worldwide. A specialist in technical trading strategy for any market and any timeframe, Nick cuts the 'nonsense' associated with traditional technical analysis.

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