From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley

June is officially in the books!

Now, it’s time to dig into a fresh batch of monthly candles…

As everyone prepares to celebrate over the long weekend, we’re pouring over our monthly charts to reconnect with the primary trend.

And we witnessed some key developments in the commodity markets in June that are hard to ignore:

• Lumber was down almost 45%
• Copper was down 8%
• Natural Gas was up 24%
• Crude Oil was up 10%

Tumbling lumber futures and copper’s failure to hold above its former 2011 highs raised caution for risk assets.

From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley

We’ve been pounding the table about the broad-based strength from the US Dollar since earlier this month. Due to the momentum of its recent move, we believe this rally could have legs beyond just the near-term... But we'll address that when the time comes.

For now, we're positioned to take advantage of this swift rebound from the Dollar through a handful of USD crosses currently offering favorable risk/rewards. 

Though the Dollar gave some of this month's gains back last week, our short-term outlook remains higher. As I write this, many G-10 currencies like the Euro, Pound, Aussie, and Canadian Dollar are all rolling over relative to USD. 

We’ll be revisiting this theme plenty as it plays out over the coming weeks to months.

But in the meantime let’s focus on a currency pair that’s bucking the trend, the US Dollar-Brazilian Real $USD/$BRL.

Here’s a weekly bar chart of USD/BRL:

From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley

Crude Oil has been the Lone Ranger within the energy complex since early June, relentlessly pushing to new highs while other energy-related commodities have been stuck below overhead supply.

But that’s all changing this week as Heating Oil and Gasoline just broke above key resistance levels to new multi-year highs.

The recent strength from Energy also comes as Base Metals continue to cool off and correct. Copper, Tin, and Aluminum are all rangebound below logical levels of resistance after explosive moves off their 2020 lows. This is yet further evidence of the bifurcated market environment we're in right now. All we can do is focus on finding opportunities in areas that are trending... So, let's talk more about Energy.

From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley

Earlier in the week, we held our June Monthly Conference Call, which Premium Members can access and rewatch here.

In this post, we’ll do our best to summarize it by highlighting 5 of the most important charts and/or themes we covered, along with commentary on each.

Let’s get right into it!

From the desk of Steven Strazza @Sstrazza and Ian Culley @IanCulley

There’s no question the landscape in the currency market has dramatically changed with the US Dollar reasserting its dominance in recent weeks.

You can read more about this in our weekly currency post, but here’s an excerpt with the long and short of it:

King dollar is definitely back in the driver’s seat from a tactical viewpoint as we’ve seen a significant shift in favor of USD over the near term. But even the intermediate and long-term trends for most major FX pairs have flipped in the direction of the Dollar over the past month or so.

Considering this broad-based strength, it’s clear that bulls are back in control of the Dollar… at least from a near-term perspective.

So, earlier in the week we analyzed the US Dollar Index $DXY and outlined some critical levels to watch over the short run.

From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley

Last week, we asked the question...is it time for a dollar bounce?

And the market quickly answered with a resounding, YES!

We’ve highlighted several currency pairs challenging crucial levels of support and resistance. Last week, we saw the USD take control at those key levels. 

Both the EUR/USD and GBP/USD turned away from critical areas of former support turned resistance. The USD/CAD moved sharply higher from a major area of support. The AUD/USD broke back below a key retracement level after consolidating for the first half of the year. And the NZD/USD retreated from an area of overwhelming overhead supply.

From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley

Whether you trade commodities or not, it’s been impossible to ignore the recent sell-off in Lumber, as prices have collapsed almost 30% in just the last month.

We pointed out in May that Lumber was due for a digestion of its recent gains.

Well, let’s just say we got a lot more than that! Sometimes markets correct or consolidate through time, and sometimes they correct through price.

And Lumber is most definitely correcting through price!

But Lumber is not the only procyclical commodity to enter a corrective phase. More recently, DR. Copper has begun to digest its recent gains through price as well.

These corrections have already done some damage to the primary uptrends at play as both of these economically sensitive commodities have recently violated critical support levels.

From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley

The US Dollar trading at key levels against a significant amount of Developed and Emerging Market currencies is the major theme in Currency Markets right now. 

The GBP/USD is challenging an area of resistance that acted as support for over two decades but has been a barrier for prices since the Brexit vote almost 5 years ago.

The USD/CHF is on the verge of completing a massive 9-year top.

The USD/ZAR just violated critical support at a decade-long trend line.

And USD/CAD is currently attempting to complete a 5-year double top... with a pattern that looks strikingly similar to that of the DXY Index itself.

From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley

Softs are an area of the commodity space that hasn’t received much attention over the past several months, and for good reason.

As the rest of the commodities complex has been on fire, the action from this group has been muted as they’ve underperformed their peers significantly since last year.

Besides Sugar reaching our initial objective last month and Coffee breaking out of a 4-year bottom, Softs have been a real snooze fest.

Cotton continues to chop within a broad range. Cocoa is well below overhead supply. And OJ grinds sideways as it builds a 3-year base.

But it looks like Orange Juice futures are poised to break free to the upside.

Let’s take a closer look at this favorable risk/reward opportunity in OJ and lay out a potential trade setup to get long this base breakout, if and when it comes...

Here’s the weekly chart of Orange Juice futures:

From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley

A couple of weeks ago, we posed this question in a post titled "Can the Dollar best the BRICS?"

Back then, we were already leaning toward "NO." Fast forward to today, and it's more like a "NO WAY."

The reason for this is simple. In that post, we explained the line in the sand for our USD/BRICS Index was ~19.

In the few weeks since, this critical level has been violated. The market has spoken, and it's saying we're in for a lower US Dollar relative to BRIC-country currencies.

For you visual learners... This is what the chart looked like back then, and here is what it looks like now. Quite the difference, right?

From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley

As May just came to a close, many spent the weekend celebrating the kick-off to the Summer season at Memorial day barbeques. We did that too. BUT... being the nerds we are, we also spent much of the weekend pouring over some fresh monthly candles now that yet another one is in the books.

In the spirit of our sacred monthly candlestick process here at Allstar Charts, in this week's column, we're going to take a step back and discuss some of the primary trends at play in Commodities Markets.

We only get this incredibly valuable information ONCE a month. That's right. Just TWELVE times a year. As such, we really cherish weeks like these. 

So, let's dive right in and talk about one of the charts that really stuck out this month: None other than the good old Thomson Reuters $CRB Index, arguably the broadest barometer for the asset class as a whole.

From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley

The US Dollar remains at crucial inflection points versus both emerging and developed currencies.

In last week’s note, we pointed out the critical 19 level in the WisdomTree Emerging Currency Fund $CEW, along with the numerous tests of support in our custom USD vs. BRICS Currency Index.

Not only is the USD looking increasingly vulnerable against emerging and developed currencies, but we’re now starting to see some of the major Dollar crosses break down or resolve lower.

In many cases, these moves are confirming long-term reversal patterns with USD/CAD. For example, the Dollar just broke to fresh multi-year lows relative to the Canadian Dollar.

We reviewed the chart in this column a few weeks back, highlighting the possibility of an impending double top. 

Well, here’s what it looks like now: