If US dollar strengthens, the commodities will come down: Ray Barros

Ray Barros, CEO, BarroMetrics Trading Group, spoke to ET Now. Excerpts:

How do you see commodities behaving because that may set the trend for many resource stocks across Asia?

And, specifically how do you see sugar, iron ore, steel, or nonferrous metals panning out depending on which ones do you look at, a lot of stocks in Asia are based on these resources?

In terms of the resources, they are really a US dollar story as far as I am concerned. Let's take crude as the example of the commodities in relation, you can see that if you look at the crude chart, there is a potential head and shoulders pattern forming. As long as we do not take out 83, then we are going to come down and have a look at 6940. If we take out 83 on the upside, then we will take out 84, which is the all time high, reaction high at the moment and then we will go on to about 87-88 but that comes back to the US dollar and if US dollar strengthens and I think it will, I am bullish at the US dollar at the moment, then crude and the rest of the commodities will come down and in terms of the US dollar if you look at the DX Index basis near its future month, we have got a very tight congestion range between 8150 and 7960.

If we can take out 8150, we had an attempt at that last night, which pulled back. If we get a weekly close above 8150, we will see 83 and 84 and you will see the commodities go a long way down.