Global Macro: Fundamentals, Not Politics, Backing Commodities
NEW YORK (TheStreet) -- U.S. politics have stolen the spotlight, but fundamentals are still backing commodity and commodity currency price patterns.
Oil and the Aussie dollar have traded in volatile ranges over the past few days, due to uncertainty over the debt ceiling in the U.S. Looking further out at a daily chart, however, the price patterns show logical formations.
The first chart below is of United States Oil (USO) . Oil has developed what looks to be a head-and-shoulders reversal formation at yearly highs.
Summer has ended and the Syrian violence premium has all but diminished, as oil struggles to maintain its lofty price levels.Increased supply sources, such as a new pipeline between Texas and Oklahoma coming to completion, mean that bears may overcome the bulls in oil. There should be an advance as assets across the board are bid higher when Washington resolves the debt debacle, but don't be surprised if this last push up completes the impending head-and-shoulders reversal pattern. Follow @AndrewSachais This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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