gbp

FX Daily: Unwinding the spurious dollar rally

The dollar strengthened across the board yesterday with no clear catalyst. We suspect that in an environment that keeps pricing large Fed cuts, USD rallies aren’t very sustainable. We’ll be awaiting the next leap higher in short-term USD rates to endorse a dollar rebound. Today, the focus is on PMIs and the Bank of Canada, which may disappoint dovish bets.

 

USD: Sticky Fed cut bets hinder USD rebound

The dollar rebounded sharply yesterday as the risk-on mood generated by Beijing’s reported stock support package evaporated during London trading hours. The Hang Seng is having another good day today, even though Beijing’s measures appear an emergency and temporary solution, more a symptomatic treatment rather than addressing fundamental economic concerns.

European and US equities failed to follow the Hang Seng's gains yesterday but also showed broad resilience. The rise in US rates did not look large enough to justify the rota

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Sideways drifts and targets hit

Sideways drifts and targets hit

Jason Sen Jason Sen 28.10.2021 12:21
AUDUSD trades sideways after we warned last week that the rally has ended with Thursday's bearish engulfing candle. We keep holding good support at 7465/55 & held just below strong resistance at 7555/65. We can trade the range while we wait for a breakout. NZDUSD longs at 7140/30 work perfectly again yesterday hitting the target of 7180/90 for profit taking as we remain in the sideways trend. This could be the case for an extended period after Thursday's bearish engulfing candle. AUDJPY also likely to trade sideways for a while after Thursday's bearish engulfing candle for a sell signal. Today's Analysis. AUDUSD longs at good support at 7465/55 work again on the bounce to 7500/05 for profit taking before a high for the day yesterday exactly at the next target of 7530/35. Strong resistance at 7555/65 should be a big challenge. Try shorts with stops above 7580, looking for a double top sell signal. Longs at 7465/55 again today stop below 7445 (so the risk is very small). A break lower is a sell signal targeting 7410/7390, perhaps as far as 7360/50. NZDUSD longs at first support at 7140/30 could work again re-targeting 7180/90 for profit taking & as expected this was a high for the day. If we retest 7200/7220, try shorts with stops above 7240, looking for a double top sell signal. BUT be ready to sell again at very strong resistance at 7255/75. Stop above 7300. Longs at first support at 7140/30 must stop below 7120 so the risk is very small. A break lower is a sell signal targeting 7090/80 probably as far as 7040/30. AUDJPY I would sell at 8620/40 (unfortunately yesterday's high was 8605) with stops above 8660 looking for a double top sell signal. A break higher kills the bearish engulfing candle for a buy signal. First support at 8460/40 in the sideways trend. A bounce targets 8500 perhaps as far as 8540/50. A break below 8420 however is the next sell signal targeting 8370 & 8345/35. To subscribe to this daily report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk USDJPY longs at support at 113.40/30 were offered 50 pips yesterday. as we topped exactly at first resistance at 113.80/95. EURJPY buying opportunity at at 131.60/40, stop below 131.30. CADJPY shorts at first resistance at 9240/60 keep working this week. https://www.youtube.com/watch?v=wASlHvMEN6g Update daily at 06:30 GMT Today's Analysis. USDJPY meets minor resistance at 113.85/95. Strong resistance at last week's high at 114.50/70. Shorts need stops above 114.80. A break higher is a medium term buy signal. Good support again at 113.40/30. Longs need stops below 113.20 so the risk is very small. A break lower target 113.00/112.90 & 112.60/50. EURJPY buy at 131.60/40, stop below 131.30. A break lower is a sell signal targeting 130.90 then an important buying opportunity at 130.40/20 with stops below 130.00 Longs at 131.60/40 target 131.90 & 132.10 for profit taking. Strong resistance at 132.20/40. Shorts need stops above 132.60. CADJPY shorts at first resistance at 9240/60 work again as we target 9200 & 9175, hit as I write this morning. A buying opportunity at 9120/00 with stops below 9090. Gains are likely to be limited with first resistance at 9240/60. However on a break higher sell at 9280/9300 with stops above 9320. To subscribe to this daily report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk EURUSD breaks support at 1.1620/00 so this is now working as resistance. It is difficult to trade the pair as the daily ranges are small & we are mostly trading sideways. USDCAD shorts at first resistance at 1.2420/40 this trade worked perfectly on the collapse to 1.2370  & as far as first support at 1.2300/1.2280. Longs here also this trade worked perfectly on the bounce to 1.2370 for an easy 120 pip profit on the day. GBPCAD shorts at first resistance at 1.7050/70 handed a quick & easy 150 pip profit yesterday. Update daily at 06:30  GMT Today's Analysis. EURUSD holding below first resistance at 1.1610/20 targets 1.1580 & 1.1540/30. A break below 1.1520 is an important medium term sell signal. A break above 1.1620 however can target resistance at 1.1665/75.  Next we look for a test of minor resistance at 1.1690/99. Exit longs & try shorts with stops above 1.1720. USDCAD same levels apply for today with first resistance at 1.2420/40. Shorts here stop above 1.2450. Be ready to buy a break above 1.2450 targeting 1.2510/30. Shorts at 1.2420/40 target 1.2370 then support at 1.2300/1.2280. Longs here need stops below 1.2270 for a sell signal. GBPCAD shorts at first resistance at 1.7050/70 worked perfectly on the collapsed to our targets of 1.6950/40 & 1.6910/1.6890 for an easy 150 pip profit yesterday. Ultimately we are looking for the target of 1.6870/60, perhaps as far as support at 1.6800/1.6780. We can try shorts again at first resistance at 1.7050/70 but must stop above 1.7090. A break higher is a buy signal targeting a selling opportunity at 1.7155/75 with stops above 1.7195. To subscribe to this daily report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk GBPUSD high for the day exactly at resistance at 1.3835/55 so far this week followed by a test of support at 1.3740/30, but we over ran to 1.3707. EURGBP longs at important 200 week moving average support at 8405/8395 worked perfectly on the bounce to first resistance at 8455/65 for profit taking. Shorts here are also working as I write. GBPNZD breaks important support at 1.9180/70 for a sell signal. Update daily at 07:00 GMT Today's Analysis. GBPUSD first support at 1.3740/20 but be ready to sell a break below 1.3700 targeting 1.3670/60, perhaps as far as strong support at 1.3600/1.3580. Any longs at support at 1.3740/20 target 1.3770/80, perhaps as far as strong resistance at 1.3835/55. This remains key to direction in severely overbought conditions. Try shorts again with stops above 1.3875. A break above here is a medium term buy signal. EURGBP longs at important 200 week moving average support at 8405/8395 work on the bounce to first resistance at 8455/65 for profit taking. Shorts need stops above 8475. A break higher targets 8500. Shorts at first resistance at 8455/65 are working as we target 8440 before a retest of important 200 week moving average support at 8405/8395. Longs need stops below 8380. A break lower is a medium term sell signal. GBPNZD break below support at 1.9180/70 is a sell signal targeting 1.9110/00. First resistance at 1.9170/90. Shorts need stops above 1.9210.
Intraday Market Analysis – EUR Builds Up Bullish Reveal

Intraday Market Analysis – EUR Builds Up Bullish Reveal

John Benjamin John Benjamin 29.10.2021 08:55
EURUSD cuts through resistanceThe euro surges as the market prices in inflation pressure despite the ECB’s dovish message.Bullish candles have pushed the single currency above the triple top (1.1665) which sits on the 30-day moving average, paving the way for a reversal. Strong momentum is a sign of short-covering from those caught on the wrong side of the market.An overbought RSI could temporarily limit the range of the rally. However, renewed optimism may send the pair to the daily resistance at 1.1750. 1.1620 is the support in case of a pullback.USDJPY tests demand zoneThe Japanese yen recouped losses after the BOJ sees a weak yen as positive for Japan’s economy. And the US dollar has come under pressure near a four-year high.An overbought RSI on the daily chart points to an overextension. On the hourly level, the pair has found bids around 113.30 near a previous consolidation range.A bearish breakout would test the round number at 113.00, which lies on the 20-day moving average and is critical in safeguarding the uptrend. The bulls need to lift 114.30 before they may resume the rally.US 30 pulls backs for supportThe Dow Jones consolidates as investors digest earnings near the all-time high.A breakout above the August peak at 35600 and a bullish MA cross from the daily timeframe indicate an acceleration on the upside as the rally continues.Pullbacks could be an opportunity to buy low. An overbought RSI has triggered a minor sell-off below 35600, shaking out weaker hands in the process. A drop below 35450 would lead to the psychological level of 35000. 35830 is now a fresh resistance.
Wild Choppy Moves

Wild Choppy Moves

Monica Kingsley Monica Kingsley 29.10.2021 15:27
One-sided S&P 500 session, perhaps a bit too much – the bulls are likely to face issues extending gains when VIX is examined. The stock market sentiment remains mixed, and one could easily be pardoned for expecting larger gains on yesterday‘s magnitute of the dollar slump. And long-dated Treasuries barely moved – their daily candle approximates nicely the volatility one as both give the impression of wanting to move a bit higher while their Thursday‘s move was a countertrend one.Not even value was able to surge past its Wednesday‘s setback, which makes me think the bears can return easily. At the same time, tech stepped into the void, and had a positive day, balancing the dowwnside S&P 500 risks significantly. The very short-term outlook in stocks is unclear, and choppy trading between yesterday‘s highs and 4,550 shouldn‘t be surprising today.At the same time, precious metals could have had a much stronger day – but the sentiment was risk-off in spite of the tanking dollar and doubted yields as the rising tech and gold at the expense of silver illustrate. Miners recent outperformance was absent just as much as commodities vigor with the exception of copper. And it‘s more celebrations in the red metal following its steep and far reaching correction, that‘s the part of missing ingredients as much as fresh inflation fears (yes, adding to risk-off mood, inflation expectations declined yesterday).All in all, it looks like a case of abundance of caution prior to next week‘s Fed, compounded by sluggish incoming data, where just cryptos are ready to move first.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 decisively reversed upwards, but the daily indicators barely moved – the consolidation doesn‘t look to be over.Credit MarketsHYG entirely reversed Wednesday‘s plunge but the low volume flashes amber light at least – the bulls are likely to stop for a moment.Gold, Silver and MinersGold upper knot doesn‘t bode as well as it did the prior Friday, and the same goes for miners. The yellow metal‘s strength was sold into, making it short-term problematic for the bulls.Crude OilCrude oil held $81 on not too shabby volume but the bulls are still on the defensive until $84 is overcome. When XLE starts outperforming VTV again, the outlook for black oil would improve considerably. Natgas falling this steeply yesterday isn‘t inspiring confidence either.CopperCopper finally reversed, and the upswing is a promising sign even though I would like to have seen higher volume. Again, the red metal remains well positioned to join in the commodities upswing once the taper announcement is absorbed.Bitcoin and EthereumBitcoin bulls are pausing while Ethereum ones keep running – cryptos are providing an encouraging sign (to be taken up by real assets) going into the Fed next week.SummaryChoppy trading in stocks is likely to continue even though 4,610s are closer than a break below 4,550s at the moment. Much nervousness in the markets before the coming Wednesday – cash is being raised while the dollar suffered in spite of daily move up in yields. Risk-off hasn‘t clearly retreated as seen in sectoral performance and VIX – time to be cautious while waiting out this soft patch in commodities that are most likely to return to scoring gains, accompanied by the retreating dollar.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Intraday Market Analysis – USD Grinds Key Resistance

Intraday Market Analysis – USD Grinds Key Resistance

John Benjamin John Benjamin 01.11.2021 09:31
USDCHF bounces off demand zoneThe US dollar inched higher after a solid core PCE reading in September. The pair is testing the major demand area from last August’s lows (0.9100).A bearish MA cross on the daily chart has dented buyers’ optimism. An oversold RSI may attract a ‘buying-the-dips’ crowd while short-term sellers take some chips off the table.However, 0.9190 could be a challenging hurdle to lift as the bears would be eager to fade the rebound. A new round of sell-off would send the greenback to the daily support at 0.9020.EURGBP attempts to reboundThe euro found support from better-than-expected growth and inflation data. A bullish RSI divergence suggests that the downtrend may have lost its momentum.A break above 0.8470 has prompted sellers to cover some of their bets. But the RSI’s overbought situation has so far tempered the optimism.The bulls will need to lift offers around 0.8485 which sits on the 30-day moving average before they could turn the tables. Failing that, a drop below the demand zone between 0.8400 and 0.8420 would deepen the correction.GER 40 finds supportThe Dax 40 bounces back thanks to upbeat European stock earnings.A bullish MA cross on the daily chart is a sign of recovery. Though the index has hit a speed bump at 15775 which is a major resistance from last September’s sell-off.The drop below 15630 has led intraday buyers to bail out, driving short-term price action downward. As the RSI ventured into the oversold zone, the pullback attracted dip-buying interest at the lower range of the previous consolidation (15400). This is a congestion area along the MA cross.
Don‘t Fear Risk-Off

Don‘t Fear Risk-Off

Monica Kingsley Monica Kingsley 01.11.2021 13:50
Not confirmed by bonds, the S&P 500 advances regardless – the daily yields retreat is powering tech while value goes nowhere. Higher beta sectors such as financials are sputtering, revealing the defensive nature of the stock market advance – at least to this degree, stocks and bonds are in tune. Yes, risk-off is winning these days, and it would be only up to VIX to join the fray, but the key volatility measure is likely to keep complacently trading around the 17 level. In other words, not too far from the bottom of its recent range, and not indicating imminent change of the bull market character.While we have seen much better market breadth readings in the years gone by (the narrow leadership is reminiscent perhaps of the late 1990s), there‘s no chart proof of the behemoths being in kind of getting really serious trouble (with the possible exception of Facebook). True, smallcaps have largely gone sideways over the many months, but midcaps are already breaking higher, and that won‘t be unnoticed by the Russell 2000 (soon to follow).The bears haven‘t thus far made any serious appearance, and 4,550s held with ease in spite of the dollar reversing Thursday‘s losses. All the more encouraging is the relative strength of both gold and silver when faced with one more daily decline in inflation expectations – as if balancing before the Fed act changes anything.I ask, how serious can they be about delivering on taper promises when prices increase relentlessly (look at Europe too), these are being blamed on supply chain bottlenecks without acknowledging their persistent and not transitory nature, and the real economy is markedly slowing down (not in a recession territory, but still)?Looking at commodities, we‘re reliving the 1970s, and cryptos are still the key beneficiary of monetary largesse – precious metals aren‘t a dead asset class in the least, they just frontrunned it all and peaked in August 2020 as I alerted you to back then. Fresh upswing is in the making.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 once again decisively reversed upwards, and even though the daily indicators are weakening, the rally can easily go on. Dips are to be bought.Credit MarketsHYG keeps acting weak, but this is being overlooked by stocks as tech remains driven by NYFANG.Gold, Silver and MinersGold‘s lower knot indicates accumulation, and miners reversing higher would be a great confirmation. Regardless, such a result when dollar rose steeply and yields with inflation expectations retreated, is encouraging.Crude OilCrude oil again held $81, looks set to return above $84 again. XOI and XLE weakness has to be understood in terms of the challenged VTV, and isn‘t here to stay.CopperCopper is providing a buying opportunity, and looks likely to join other base metals (especially alluminum) and broader commodity index strength as agrifoods wake up too.Bitcoin and EthereumThe Bitcoin and Ethereum upswings can go on – it looks to be a question of a relatively short time when cryptos are done with the sideways correction.SummaryS&P 500 indeed got at 4,610s instead of suffering setbacks, and the same holds true for real assets next. Across the board, these have performed well in spite of the USD upswing and decreasing inflation expectations, which I chalk down to pre-Wednesday positioning. Therefore, I‘m taking the high beta weakness with a pinch of salt, and the same goes for precious metals or the economic cycle sensitive copper. As for oil, the U.S. economy can (and will have to) withstand prices higher than $90 as 2022 arrives.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Intraday Market Analysis – USD Hits Resistance - 02.11.2021

Intraday Market Analysis – USD Hits Resistance - 02.11.2021

John Benjamin John Benjamin 02.11.2021 08:42
USDCAD consolidates at 4-month lowThe US dollar retreats ahead of this week’s FOMC as traders await further catalysts. Price action has stabilized above 1.2300, a major demand zone from last summer.1.2430 from the latest sell-off is a key resistance as it coincides with the 20-day moving average. The current consolidation suggests the market’s indecision, though overall sentiment remains bearish.A deeper correction would send the greenback to 1.2150. A bullish breakout on the other hand may challenge the supply area around 1.2550.EURJPY tests key supportThe euro struggles to bounce higher after Germany’s lackluster retail sales in September.The pair has come under pressure at 133.45 near June’s peak. The subsequent retracement has met some bids at 131.60 when the RSI dipped into the oversold territory.The triple test of the support level indicates solid buying interest. However, the bulls will need to push above 132.80 before the uptrend could resume.On the downside, a bearish breakout would extend the sideways action towards 130.80 which sits on the 30-day moving average.US 100 falls back for supportThe Nasdaq 100 surges to a new all-time high as investors expect the strong growth trend to continue. The break above the previous peak at 15700 has put the index back on an upward trajectory.A bullish MA cross on the daily chart is a confirmation of the market’s optimism. However, a brief pullback is necessary to let the bulls catch their breath.15620 is the immediate support. Further down, 15280 is key daily support on the 20-day moving average. The psychological level of 16000 would be the next target rebound.
Bitcoin’s trading psychology - 02.11.2021

Bitcoin’s trading psychology - 02.11.2021

Korbinian Koller Korbinian Koller 02.11.2021 09:49
BTC in US-Dollar, Daily Chart, leg analysis:Bitcoin in US-Dollar, Daily chart as of October 25th, 2021.From a pure price perception, it might seem that the consistency bitcoin holds in price bubbles might be of the same origin, but they are not. In 2009, the value of the coin was zero, and fans exchanged it more like reminding of a seedy Star Wars bar exchange of true fans for a new idea, technology, beliefs, and freedom. Even so, bubbles arose a year later, and the price was driven by extreme supply and demand imbalances due to ill-liquidity when news hit the media.Since these times, we have seen all sorts of traders, speculators, investors, banks, hedge funds, governments join the speculation in a profitable market. Each with their specific mindset, interests, and trading psychology. The latest shift is now the race of governments getting a hold on the worldwide dominance reign. They will be true hodlers. Before that last influx, the bitcoin market was dominated by pure speculators for the most part. In a sense, they were forced into this market to stay competitive. Wide swings were the result since there was little incentive to stay in this game for the long term or, in other words, taking the risk on the large downswings.One first step, identifying in which market and cycle one is competing, are comparing up-legs in size (percentage) and steepness (time).The daily chart above shows such measurements of the last two significant moves in bitcoin this year.It has taken bitcoin only three months to more than double in price.BTC in US-Dollar, Weekly Chart, Projections:Bitcoin in US-Dollar, weekly chart as of October 26th, 2021.With governments and the wider population now being the last to come to the party, we will see a shift in the trading behavior of bitcoin. This needs adjustment in one’s trading style to be part of this craze for the virtual, decentralized future.One such shift in the process may be a reduction of retracements depth within the second leg from a weekly perspective. We have drawn a projection of the second leg highly conservative in the chart above. Conservative, since second legs are typically longer, and we only assumed an identical extension to the first leg (1=2=3 in length and angle). BTC in US-Dollar, Monthly Chart, time accuracy:Bitcoin in US-Dollar, monthly chart as of October 26th, 2021.Bitcoins’ childhood days have long passed. Seedy bar purchases have changed for high liquidity and professional exchanges with advanced order execution functionality. The big guns sit on the table, and as such, trading has shaped up. The individual is now playing against the best in the world, like in any other asset class, and risk should be perceived as such.Nevertheless, a larger time frame play for wealth preservation and a hedge against inflation is controllable in risk. Market participation analysis allows for a better grip on what to expect and scales in on targets from a time perspective. The above monthly chart illustrates our view of a possible future. The logarithmic chart shows best what inherent strength bitcoin possesses.Bitcoin´s trading psychology:The largest group that is not invested in bitcoin yet is the more significant part of average citizens. Consequently, we will find ourselves in an extreme supply demand imbalance due to bitcoins fixed limit of 21 million coins. More importantly, we will discover new trading behavior with a new group participating, with new psychology. These purchases will be made by amateurs who are motivated by fear more than greed. This market participant will be a long-term speculator trying to hold on to his investment versus making a quick buck. We anticipate more moderate overall retracements percentagewise. As well, we expect steeper legs up. These will result in a different system needed to participate in a market with low-risk entry points.Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter.This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting.By Korbinian Koller|October 26th, 2021|Tags: Bitcoin, bitcoin consolidation, Bitcoin mining, crypto analysis, Crypto Bull, crypto chartbook, crypto mining, low risk, quad exit, technical analysis, trading education|0 CommentsAbout the Author: Korbinian KollerOutstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
The US dollar retreats ahead of this week’s FOMC as traders await further catalysts

The US dollar retreats ahead of this week’s FOMC as traders await further catalysts

FXMAG Team FXMAG Team 02.11.2021 10:19
EURJPY tests key support. USDCAD consolidates at 4-month low 1.2430 from the latest sell-off is a key resistance as it coincides with the 20-day moving average. The current consolidation suggests the market’s indecision, though overall sentiment remains bearish. A deeper correction would send the greenback to 1.2150. A bullish breakout on the other hand may challenge the supply area around 1.2550. EURJPY tests key support The euro struggles to bounce higher after Germany’s lackluster retail sales in September. The pair has come under pressure at 133.45 near June’s peak. The subsequent retracement has met some bids at 131.60 when the RSI dipped into the oversold territory. The triple test of the support level indicates solid buying interest. However, the bulls will need to push above 132.80 before the uptrend could resume. On the downside, a bearish breakout would extend the sideways action towards 130.80 which sits on the 30-day moving average. US 100 falls back for support The Nasdaq 100 surges to a new all-time high as investors expect the strong growth trend to continue. The break above the previous peak at 15700 has put the index back on an upward trajectory. A bullish MA cross on the daily chart is a confirmation of the market’s optimism. However, a brief pullback is necessary to let the bulls catch their breath. 15620 is the immediate support. Further down, 15280 is key daily support on the 20-day moving average. The psychological level of 16000 would be the next target rebound.
Silver’s fuse is about to be lit

Silver’s fuse is about to be lit

Korbinian Koller Korbinian Koller 30.10.2021 16:45
The average investor is news-driven. As much as the Federals Reserve  (the Fed) might be criticized, this large investor group is not commonly doubting news. In other words, it has generally believed the Fed’s narrative that inflation is transitory. The bad news is rarely released shortly before Christmas. However, it would not surprise if tapering started in early 2022. And maybe not just begin but be more aggressive throughout the year as expected. With this, the narrative will change from a “we are not worried, it is transitory” to a “we need to deal with” regarding inflation. Therefore, this could easily be the fire to the fuse of the Silver rocket. We now see early signs of such a lift-off in price in recent silver price movements. Silver’s fuse is about to be lit. Silver in US-Dollar, daily chart, low-risk entry points: Silver in US-Dollar, daily chart as of October 30th, 2021. It isn’t only that the overall narrative on transitory inflation is starting to get holes. We like the silver play, for instance because gold is somewhat in the limelight in battle with bitcoin. Consequently, allowing for silver to shine while it is typically in the shadow. On top of it all, we find clear evidence that commodities with industrial use are likely in a long term bull market. This is a play where everything is coming together. A multi stream both in fundamental and technical edges stack upon each other. As of right now, we have identified four low-risk entry points on the daily silver chart, which are marked in bright green horizontal lines. We would take off 50% of the position near the US$26 mark to mitigate risk (see our quad exit strategy). Silver in US-Dollar, weekly chart, good risk reward ratio: Silver in US-Dollar, weekly chart as of October 30th, 2021. The weekly chart offers a low-risk opportunity as well. We illustrated above a play that assumes an entry point in the lower third quadrant of the yellow marked sideways zone. It would provide for a risk/reward-ratio between 1:1 and 1:2 towards the financing point. As well we assume an exit of half of the position at the top near US$28 of the yellow sideways channel (see our quad exit strategy). With two more exits of each 25% of total trade equity at targets US$34.83 and US$48.72, we find the weekly play to be conducive to our low-risk policy.  Silver in US-Dollar, monthly chart, favorable probabilities: Silver in US-Dollar, monthly chart as of October 30th, 2021. With its most considerable weight, the monthly chart provides the necessary overview. It shows how likely a success rate to a long-term play outcome is. We find three dominant aspects supporting our aim for a bullish long-term play. Trend: The linear regression channel is marked in diagonal lines (red, blue, green). It shows a clearly bullish trend with a high likelihood of continuation. Support: The Ichimoku cloud analysis provides solid evidence of support to the recently established bullish tone in silver. Probabilities: Price highs from 1980 to 2011 built a double top price formation. As a result, it prevented prices from getting higher than the price zone marked with a white box. The third attempt of price reaching this price zone nevertheless has a much higher statistical probability of penetrating this distribution zone and allowing the price to go higher. Silver’s fuse is about to be lit: We find ourselves in challenging times. Certainly, not only in market play. One of the essential pillars to come out ahead is bending in the wind and staying flexible. Should the FED indeed raise interest rates to a degree non-reflected in the anticipated market price of speculators and come as a surprise, we might see a stock market decline next year of a substantial percentage. Consequently, this would temporarily drag silver prices down as well. We share methods in our free Telegram channel to build low-risk positions within the market that reduce risk through partial profit-taking. Our quad exit strategy allows us to hedge physical acquisitions by trading around these positions on smaller time frames in the silver paper market. Our approach provides a way to maneuver through a delicate environment to hedge against inflation and preserve wealth. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can also subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting.
Lip Service to Inflation, Again

Lip Service to Inflation, Again

Monica Kingsley Monica Kingsley 03.11.2021 14:54
S&P 500 quick downswing attempt indeed didn‘t come – fresh highs were confirmed by bonds. Even if just on a daily basis, that‘s where the bias is – long stocks still, but with a wary eye as Treasuries and corporate bonds need to kick in on a more than daily basis. I‘m taking it as that the bullish expectations for today are really high – so much so that better than expected non-farm employment change resulted in a sell the news reaction. So, how does that line up with today‘s FOMC? Dovish undertones are obviously expected – at least in attempting to sweep the hot inflation under the rug, spinning it somehow else than with the tired transitory horse. Discredited one too. So, how would the taper message be delivered, and could it go as far as $15bn a month asset purchase reduction while avoiding rate hike mentions as much as possible? Even if $15bn is indeed the announced figure, I‘m looking for the Fed to soften it before it can run its course, i.e. before 2H 2022 arrives – the economy isn‘t in such a great shape to take it, and the fresh spending bill (whatever the price tag), needs central bank‘s support too. Let‘s recall my yesterday‘s words about how that‘s likely to translate into market moves: (…) Overall, stocks haven‘t made much progress, and are vulnerable to a quick downswing attempt, which probably though wouldn‘t come today as the VIX doesn‘t look to favor it. Wednesday, that could be another matter entirely. Still, there is no imminent change to the stock bull run on the horizon – the focus remains on ongoing Fed accomodations. Tomorrow‘s Fed taper announcement wouldn‘t change a lot – so much can (and will) happen in the meantime, allowing them to backpedal on the projections, making rate hikes even more of a pipe dream. The Fed isn‘t taking inflation seriously, hiding behind the transitory sophistry, and that‘s one of the key drivers of rates marching up, rising commodities, and surging cryptos. Look for more oil and natgas appreciation while copper goes up again too. Precious metals are still waiting for a catalyst (think dollar weakening when even rising rates won‘t provide much support, and inflation expectations trending up faster than yields) – a paradigm shift in broader recognition of Fed obfuscation and monetary policy being behind the curve. The Fed turning even more dovish than expected, would light the fireworks – they‘re likely to pay lip service to inflation similarly to Jun, but it won‘t pack the same punch. Inflation expectations haven‘t peaked, and the yield curve is about to steepen again as rates would mostly be moving higher. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 keeps rising, and is setting itself up for a brief disappointment. We aren‘t though making a top with capital t. Credit Markets Universal risk-on move in the credit market, on volume that didn‘t disappoint, which just confirms the bulls‘ overall technical advantage. Gold, Silver and Miners Gold downswing left a lot to be desired – we aren‘t likely staring at a true slide next. I actually look for silver (and the cyclically sensitive commodities such as copper, and also oil) to outperform gold in the wake of the Fed move. Crude Oil Crude oil didn‘t move much on a closing basis, but the bulls need more time to retake the reins. Copper Copper really doesn‘t want to decline, and remains slated to play catch up to the CRB Index again. The improving bullish outlook requires just time now – selling volume is drying up, tellingly... Bitcoin and Ethereum Bitcoin and Ethereum bulls haven‘t yielded, and keep the overall technical advantage. Should prices dip below $58K in BTC without solid buying materializing, now that would make me wary. But the Fed won‘t be hawkish., no. Summary Potential S&P 500 bear raid is approaching, and the more dovish the Fed would be, the shallower dip in stocks can be expected. Yes, the bulls keep having the upper hand – credit markets have behaved. As mentioned yesterday, that‘s the big picture view - the very initial reaction to taper announcement would likely be reversed higher. Cryptos, oil, copper would react best, with precious metals figuring it out only later – unless the Fed negatively surprises, in which case cryptos would be prone to wilder swings (but not downside reversal in earnest). Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Intraday Market Analysis – USD Struggles To Bounce Back

Intraday Market Analysis – USD Struggles To Bounce Back

John Benjamin John Benjamin 04.11.2021 08:38
EURUSD claws back lossesThe US dollar fell after the Federal Reserve called for patience on raising interest rates.The pair has met strong resistance at 1.1690, a previous demand zone on the daily chart that has turned into a supply one. The latest sell-off has been contained by 1.1535, near the base of the recent rebound as an oversold RSI attracted some bargain hunters.A surge above the intermediate resistance of 1.1620 would bring in more momentum traders. Then a break above 1.1690 could kickstart a bullish reversal in favor of the euro.XAUUSD tests resistanceGold recovers as the US dollar softens across the board following a neutral FOMC.Price action had previously struggled to clear the supply area around 1810, the origin of the September correction. The subsequent fall below the support at 1785 has prompted buyers to take profit.However, the RSI’s repeated oversold situation has caught buyers’ attention at the daily support at 1760. 1785 is the hurdle ahead and a bullish breakout would resume the recovery. Failing that, the bears may push towards 1740.USOIL falls back for supportWTI crude slipped after the EIA reported a larger increase in US inventories. The psychological level of 85.00 has been an effective hurdle so far.The previous fall below 81.00 has put the bulls on the defensive, especially after their failure to achieve a new high above 84.70. This is a confirmation that sentiment has grown cautious after the price’s recent vertical ascent.The RSI’s overbought situation on the daily chart could call for a pullback. 79.50 is the closest support. Its breach may send the price to 76.50.
S&P 500’s Advance Isn’t Broad-Based, a Topping Pattern?

S&P 500’s Advance Isn’t Broad-Based, a Topping Pattern?

Paul Rejczak Paul Rejczak 01.11.2021 13:36
  The S&P 500 extended its bull market on Friday as it reached the new record high above the 4,600 level. Is this still a topping pattern? The S&P 500 index gained 0.19% on Friday, Oct. 29, as it extended its recent advance following a lower opening of the trading session. It reached yet another new record high of 4,608.08. The stock market was reacting to worse-than-expected quarterly corporate earnings releases from the AAPL and AMZN. However, the MSFT and TSLA stocks drove the index higher again on Friday. The market seems overbought in the short-term most likely it’s still trading within a topping pattern. The nearest important support level is at 4,550-4,570, and the next support level is at 4,520-4,525, marked by the previous daily gap up of 4,520.40-4,524.40. On the other hand, the resistance level is now at around 4,650. The S&P 500 trades along a short-term upward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Apple Is Volatile While Microsoft Keeps Rallying Let’s take a look at the two biggest stocks in the S&P 500 index, AAPL and MSFT. Apple released its earnings after the Thursday’s close and the first reaction was negative. But on Friday the stock retraced some of its intraday decline. Nevertheless it lost 1.8%. The resistance level remains at $154-156. It is still trading well below the record highs, as we can see on the daily chart: Now let’s take a look at MSFT. It keeps rallying and reaching new record highs after its last week’s Tuesday’s quarterly earnings release. The market remains above a month-long upward trend line. We can see that in the short-term it’s getting more and more technically overbought. The stock may enter a consolidation or a correction just like in the middle of August when it rallied above $300 level. Conclusion The S&P 500 index reached the news record high on Friday, however it closed with a gain of just 0.2%. It still looks like a topping pattern and we may see a consolidation or a downward correction at some point. There may be a profit-taking action following quarterly earnings releases. Today the main indices are expected to open 0.4% higher, but we will likely see an intraday correction later in the day. Here’s the breakdown: The S&P 500 reached new record high on Friday, as it broke slightly above the 4,600 level. A speculative short position is still justified from the risk/reward perspective. We are expecting a 3% or higher correction from the new record highs. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Crude Eyeing OPEC+ Meeting – Where is Oil Headed?

Crude Eyeing OPEC+ Meeting – Where is Oil Headed?

Sebastian Bischeri Sebastian Bischeri 03.11.2021 15:32
With the OPEC+ meeting on Thursday, oil looks to be in a corrective phase, as pressure is on for more crude. Are we looking at bearish winds ahead? Crude oil prices have started their corrective wave, as we are approaching the monthly OPEC+ group meeting on Thursday, with some market participants now considering the eventuality of a larger-than-expected rise in production. U.S. API Weekly Crude Oil Stock: Inventory levels of US crude oil, gasoline and distillates stocks, American Petroleum Institute (API) via Investing.com Regarding the API figures published Tuesday, the increase in crude inventories (with 3.594 million barrels versus 1.567 million barrels expected) implies weaker demand and is normally bearish for crude prices. Meanwhile, in the United States, the average price of fuel stabilized on Tuesday after several weeks of increase, according to data from the American Automobile Association (AAA), however, that’s 60% higher than a year ago. Chart – WTI Crude Oil (CLZ21) Futures (December contract, 4H chart) In summary, we are now getting some context on how the oil market might develop in the forthcoming days, with some crucial events to monitor as they could have a strong impact on the energy markets, and particularly on the supply side. My entry levels for Natural Gas were triggered on Monday (Nov.1), and I’m updating my WTI Crude Oil projections. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Leading the Taper Run

Leading the Taper Run

Monica Kingsley Monica Kingsley 05.11.2021 15:02
No S&P 500 pause to speak of – bonds support the buying pressure. The broad turn to risk-on has value holding up relatively well while tech remains in the driver‘s seat. The daily weakness in financials looks misleading, and as a function of retreat in yields – I‘m looking for stabilization followed by higher prices. Real estate though is starting to smell a rat – I mean rates, rising rates. Slowly as the Fed didn‘t give the green light, but they would acommodate the unyielding inflation.There was something in the taper announcement for everyone – the hawks are grasping at the possibility to increase taper pace should the Fed start to deem inflation as unpleasantly hot. I wrote about the dovish side I take already on Wednesday when recapping my expectations into the meeting.Coupled with non-farm payrolls coming in above expectations, the table is set to reassure the stock bulls that further gains are possible while the lagging commodities move up. Precious metals would continue recovering from the pre-taper anxiety, and miners with copper kicking back in, would be the confirmation. The dollar should welcome the figure corresponding to yields increase, buying a little more time.One more note on oil – its downswing is positive for the stock bulls as its retreat works to increase disposable income, and in the zero rates environment, kind of acts as a shadow Fed funds rate. Regardless, I‘m standing by the call for triple digit oil prices in 2022.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 fireworks are continuing with improving participation, and the path of least resistance remains higher.Credit MarketsUniversal risk-on move in the credit market still continues, and the long HYG knot isn‘t a sign of a reversal – the bulls merely got ahead of themselves, that‘s all.Gold, Silver and MinersGold easily reversed the pre-taper weakness, and so did silver. I‘m now looking for the miners to catch up, and a good signal thereof would be a fresh commodities upswing. No, CRB Index hasn‘t peaked.Crude OilCrude oil hasn‘t peaked either, and appears attracting buying interest already. While $80 were breached, the commodity is getting ahead of itself on the downside – the oil sector doesn‘t confirm such weakness.CopperCopper has stabilized in the low 4.30s, and an upswing attempt is readying – its underperformance of CRB Index would get reversed.Bitcoin and EthereumBitcoin and Ethereum consolidation goes on, and nothing has changed since yesterday – stabilization followed by slow grind higher is what‘s most likely next.SummaryS&P 500 stands to benefit from real economy revival, earnings projections and taper being conducted in the least disruptive way, apparently. Credit markets have made up their mind, and aren‘t protesting the risk-on sentiment, which has come from a temporary commodities retreat (hello, China). Inflation worries should though still return to the fore as the rising rates aren‘t as much a result of improving economy and yield spreads, which the precious metals are sensing already.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Gold FINALLY Breaks Free Amidst S&P INSANITY

Gold FINALLY Breaks Free Amidst S&P INSANITY

Mark Mead Baillie Mark Mead Baillie 08.11.2021 08:13
Gold, after 18 weeks of being stuck in a maniacal Short trend without price really going anywhere, FINALLY broke the bonds of the M word crowd by flipping to Long -- but not without a mid-week scare: more later on that affair. But we begin by assessing the stark INSANITY besetting the parabolic performance of the S&P 500, +25% year-to-date. It settled yesterday (Friday) at 4698 (reaching 4718 intra-day), a record closing high for the seventh consecutive session. Such phenomenon has occurred but five other times in the past 41 years! So here's a multiple choice question for you: Ready? Across all those years (i.e. from 1980-to-date), what is the longest stretch of time between all-time highs for the S&P 500? â–  a) eight monthsâ–  b) just over three yearsâ–  c) slightly less than six yearsâ–  d) all of the above (for you WestPalmBeachers down there)â–  e) none of the above If having answered "e)", you are correct: the longest stint was almost seven-and-one-quarter years from 24 March 2000 through the DotComBomb up to 13 Jul 2007. 'Twas the complete antithesis of the current paradigm of an all-time high every single trading day. But wait, there's more: those of you who were with us way back in the days at AvidTrader may recall our technically having "mild", "moderate" and "extreme" readings of both oversold and overbought conditions for the S&P. Well, get a load of this: yesterday was the S&P's 12th consecutive day with an "extremely overbought" reading. During these 41 years, that has only happened once before, 36 years ago in 1985. And the price/earnings ratio then was a respectable 10.5x: today 'tis five times that much at 54.4x (!!!) easily more than double the S&P's lifetime median P/E (since 1957) of 20.4x. And still more: Every time the S&P moves from one 100-point milestone to the next, 'tis a FinMedia "big headline deal", albeit the percentage increase comparably narrows. Nonetheless, trading gains and losses are measured by the point, not the percentage. And from 1980-to-date, the S&P has gone from 100 to now 4700, (i.e. through 46 milestones. Upon having just achieved the 4600 level on 29 October, the average number of trading days over these past 41 years to reach each 100-point milestone is 236 (just about a year's worth). But now from 4600-4700 took just five days! Cue John McEnroe: "You canNOT be SERious!!" 'Course, every trend reaches a bend, if not its end. And whilst the market is never wrong, something will the S&P upend. You regular readers already know the "earnings are not there" to support even one-half the S&P's current level. Moreover, 'tis said when the Federal Open Market Committee does nudge up its Bank's Funds rate, 'twill be "Game Over" for the S&P, (something of which the Fed is very fearful). "But mmb, even a rise from just 0.25% to only 0.50% maintains a really low rate..." Nominally still low, yes Squire: but upon it occurring, the Fed shall have doubled the cost for every bank that comes to the borrowing window, from which one can then ask banking clientele: "How's that variable rate loan workin' out for ya?" And thus falleth the first domino. And the S&P. Have a great day. Gold had a great day yesterday in settling out the week at 1820. But as noted, 'twas not before a mid-week scare. With Gold wallowing on "The Taper of Paper" Wednesday -- down at 1758 (a three-week low) -- the tried-and-true, widely followed daily moving average convergence divergence (MACD) crossed to negative. Such previous 11 negative crossings had averaged downside follow-through of 86 points. Thus within that technical vacuum, another run sub-1700 was placed on Gold's table. What instead followed was a one-day whipsaw, Gold's MACD finishing the week with a positive cross, and even better, the weekly parabolic Short trend FINALLY being bust per the first Gold-encircled dot in our weekly bars graphic: FINALLY too Gold had its first Friday in five of not being flogged ostensibly by the M word crowd. Should they thus have left the building, in concert with both the daily MACD back on the positive side and the weekly parabolic again Long, the door is open for Gold to glide up into the 1900s toward concluding 2021. As for the five primary BEGOS Markets, here are their respective percentage tracks from one month ago (21 trading days)-to-date, the S&P having swiftly replaced Oil as the leader of the pack. Of more import, note the rightmost bounce for Gold and the Bond. Why are those two stalwart safe havens suddenly getting the bid? (See our opening commentary on S&P INSANITY): Meanwhile as we waltz into the waning two weeks of Q3 Earnings Season, of the S&P's 505 constituents, 426 have reported (450 is typically the total within the seasonal calendar), of which 340 (80%) have bettered their bottom lines from Q3 of a year ago when much of the world purportedly was "shut down". Thus such significant improvement was expected: "They better have bettered!" Yet as noted, our "live" P/E is at present 54.4x. Thus to bring earnings up to snuff such as to reduce the P/E to its lifetime median of 20.4x, bottom lines need increase by 167%: but the median year-over-year increase (for those 396 constituents with positive earnings from both a year ago and now) is only 19%. Thus for those of you scoring at home, a 19% increase is nowhere near the "requisite" 167%. "Look Ma! Still no earnings!" (Crash). Still earning to grasp good grace is the track of the Economic Barometer, which bopped up a bit on the week's headline numbers. To be sure, October's Payrolls improved with a decline in the Unemployment Rate and a jump in the Institute for Supply Management's Services Index. But with a return of folks to the workplace (excluding those who've post-COVID decided they don't need to work) came a plunge in Q3's Productivity combined with a spike in Unit Labor Costs. As well, October's growth in Hourly Earnings slowed and the Average Workweek shortened, such combination suggesting temporary jobs materially lifted the overall Payrolls number. Also less highlighted was September's slowing in Factory Orders, shrinkage in Construction Spending, and the largest Trade Deficit recorded in the Baro's 24-year history. Here's the whole picture from one year ago-to-date with the S&P standing up straight: To our proprietary Gold technicals we go, the two-panel graphic featuring price's daily bars from three months ago-to-date on the left with the 10-day Market Profile on the right. And note the "Baby Blues" of linear regression trend consistency being abruptly stopped in their downward path thanks to Friday's "super-bar" -- Gold's best intra-day low-to-high run in nearly four weeks -- and the highest closing price since 04 September. As well in the Profile, price sits atop the entire stack, which you'll recall for the prior two weeks was at best a congestive mess. But to quote Inspecteur Clouseau, "Not any moooure...": As for Silver, she's not as yet generating as much comparable excitement. At left, her "Baby Blues" continue to slip even as price gained ground into week's end. At right, the price of 24 clearly is her near-term "line in the sand". Still, our concern a week ago of her falling into the low 22s has somewhat abated, albeit the daily parabolic trend remains Short; however a quick move to 24.700 ought nix that condition. "C'mon, Sister Silver!": So there it all is. We see Gold as poised to FINALLY move higher toward year-end, (barring a resurgence of the M word crowd). And we see the S&P as poised for its off-the-edge-of-the-Bell-curve INSANITY to cease, (barring an economic erosion that instead furthers the flow of free dough). After all, bad is good, just as Gold is always good. In that spirit to conclude for this week, here are three good bits from a few of the smartest (so we're told) people in the world: Betsey "With an e" Stevenson says with respect to folks not returning to the workforce post-COVID that "...It’s like the whole country is in some kind of union renegotiation..." That is True Blue Michigan-speak right there. But think about it: when you've got a) the upper labor hand, and b) the aforementioned free dough that you popped into the stock market to thus gain some 38% since the economy first shutdown, why work, eh? Besides, the feeling of marked-to-market wealth is a beautiful thing. Elon "Spacey" Musk now notes that Tesla has not contracted with Hertz to sell 100,000 four-wheel batteries. Recall when that deal first was announced, the price of TSLA went up many times more than the additional incremental return of the transaction. But hardly has it since retracted. 'Course, the company's Q3 earnings were "fantastic", in turn nicely bringing down the stock's P/E to just now 345.8x. And comparably as you already know, the only other two S&P 500 constituents classified as being in the sub-industry category of "Automobile Manufacturers" are Ford (P/E now 26.1x) and General Motors (P/E now 7.7x). But a shiny object that rolls, too, is a beautiful thing. Peter "Techie" Thiel has just opined that the soaring price of bits**t is indicative of inflation being at a "crisis moment" for the economy. 'Tis not ours to question this notion; rather 'tis beyond our pay grade to understand it. What we do understand is that THE time-tested (understatement) indicator and mitigator of inflation -- i.e. Gold -- is priced at such an attractively low level versus where it "ought" be (i.e. 3981 per our opening graphic's decree), that never again such a beautiful opportunity shall we see! Cheers! ...m... www.deMeadville.com www.TheGoldUpdate.com
Target Hit! Another Successful Call on Natural Gas

Target Hit! Another Successful Call on Natural Gas

Sebastian Bischeri Sebastian Bischeri 05.11.2021 15:10
  Have you ever tracked your progress during your oil and gas trading journey and seen such trades? Read on… and come aboard! In the previous edition published last week and updated on Monday, I projected the likelihood of a sturdy support level on the gas market – Henry Hub Natural Gas (NGZ21) Futures – for going long around the $5.268-5.361 zone (yellow band), with a relatively tight stop just below $5.070 and targets at $5.750 and $5.890. So, the market indeed sank just below that band to trigger an entry on Monday, and then it was suddenly pushed back up by the bulls waiting to take over the price to the upward direction. This long trade was also supported by the fundamentals, as the heating needs for the month of November were gradually increasing. The weather forecasts appeared to orientate the demand upwards backed by an uninterrupted demand for Liquefied Natural gas (LNG) US exports. Then, Nat-Gas hit the first target at $5.750 on Wednesday, and stopped at the $5.876 mark – located just $0.014 below the second projected target at $5.890 – on Thursday! Regarding Crude Oil, a new entry, provided to our premium subscribers on Wednesday has just being triggered. The black gold is now attempting to rebound onto that support, which acts as a new floor. Trading Charts Chart – Henry Hub Natural Gas (NGZ21) Futures (December contract, daily chart) Now, let’s zoom into the 4H chart to observe the recent price action all around the abovementioned levels of our trade plan: Chart – Henry Hub Natural Gas (NGZ21) Futures (December contract, 4H chart) In conclusion, my trading approach has led me to suggest some long trades around potential key supports - natural gas recently offered multiple opportunities to take advantage of dips onto those projected levels. If you don’t want to miss any future trading alerts, make sure to look at our Premium Section. Have a nice weekend! Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Intraday Market Analysis – GBP Struggles For Support - 05.11.2021

Intraday Market Analysis – GBP Struggles For Support - 05.11.2021

John Benjamin John Benjamin 05.11.2021 08:51
GBPUSD tests key floor The pound plummeted after the Bank of England held interest rates against expectations. The plunge below the daily support at 1.3570 has caught buyers off guard. Those who bet on a rebound around 1.3600 have rushed to the exit, raising volatility in the process. The September low at 1.3430 would be the next target. An oversold RSI may attract some buying interest, though buyers might be cautious to avoid catching a falling knife. The supply zone between 1.3640 and 1.3700 could keep the sterling under pressure. USDJPY consolidates gains The US dollar consolidates recent gains as traders digest the start of the Fed’s taper. The pair is seeking support around the 20-day moving average after a parabolic rise sent it to a four-year high. An overbought RSI from the daily chart is a sign of exhaustion and traders may be reluctant to push higher. The greenback has found bids along the demand zone over 113.30. The bulls need to clear the fresh hurdle at 114.45 before they could resume the uptrend. A bearish breakout would trigger a sell-off towards 112.50. US 500 grinds to new highs The S&P 500 continues to climb as the Fed deliberately leaves rate hikes off the table. The rally has gained momentum after the index cleared the previous peak at 4550. Sentiment remains bullish, but an overbought RSI in the daily timeframe may call for a pause. Overextension is also on the hourly chart as the RSI repeatedly ventures above 70. The bulls are pushing towards the psychological level of 4700. 4620 on the 30-hour moving averages may attract trend followers’ bids in case of a pullback.
Here We Go Again - Gold Simply Can’t Stand $1,800!

Here We Go Again - Gold Simply Can’t Stand $1,800!

Arkadiusz Sieron Arkadiusz Sieron 02.11.2021 15:05
  The yellow metal couldn’t face the downward pressure and declined abruptly on Friday. What happened, and why did it fail? Friday was a brutal time for gold. The price of the yellow metal dropped sharply from around $1,795 to $1,775 in the early morning hours in the US. Am I surprised? Not at all. In Thursday’s edition of the Fundamental Gold Report, I wrote that “gold may struggle until the Fed’s tightening cycle starts. You have been warned!”, and, as if on cue, gold wasn’t able to maintain its position around $1,800 and declined. Actually, gold prices have been testing and failing to hold this key psychological level for the last three weeks. What exactly happened on Friday? Well, the Bureau of Economic Analysis published the report on personal income and outlays in September 2021. The publication shows that U.S. nominal consumer spending increased 0.6%, while the disposable personal income declined 1.3%, reflecting a decrease in government social benefits. Additionally, the annual rate of change in personal consumption expenditures price index accelerated from 4.2% in August to 4.4% in September (see the chart below), the highest pace since January 1991. Wait. Inflation rose, but gold prices declined? Exactly. Inflation is fundamentally positive for gold in the long run, but so far – as I explained last week – “inflationary worries have been counterweighted by the expectations of the Fed’s tightening cycle”. The relationship is simple: higher inflation translates into higher expectations of a more hawkish Fed. The odds of an interest rate hike in June 2022 increased from 23.1% - recorded at the end of September - to 61.6% on October 22 and 65.7% on October 29, 2021. As a result, the bond yields increased, while the greenback strengthened. There is also another possible driver of rising interest rates and an appreciating US dollar. CPI inflation in the euro area accelerated to 4.1% in October from 3.4% in September, reaching the highest value since July 2008. However, the ECB kept its monetary policy unchanged last week despite quickly rising prices. Moreover, it’s not signaling any tightening of its stance, maintaining that high inflation is transitory even though Christine Lagarde acknowledged that the decline in inflation would take longer than the central bank had initially expected. The point here is that the ECB remains an outlier among central banks, which either have already tightened or signaled tightening of their monetary policy. This means that the US dollar is likely to appreciate against the euro, which should be another headwind for gold. Having said that, this scenario will occur if the markets believe in a dovish stance of the EBC. The rising yields on German bonds indicate that the markets don’t entirely trust Lagarde’s rhetoric and expect a more hawkish stance of the ECB, which would be fortunate for gold.   Implications for Gold What does higher US inflation imply for the gold market? Well, not so much in the short run. Even though I’ve seen some signs of a bullish revival in the gold market, the bulls remain too weak to challenge the $1,800 level. That’s too much, man! Luckily, better times are coming for gold. Have you seen the advance estimates of the durable goods orders (0.4% decline in September) or of the GDP in the third quarter of this year? According to the BEA, real GDP increased at an annual rate of 2.0% (annualized quarterly growth), much below the 6.7% reported in Q2 and much below the expectations of 2.8% growth. When it comes to the annual percentage growth year-over-year, real GDP rose 4.9% compared to 12.2% in Q2, as the chart below shows. So, the pace of growth remains historically fast, but it’s decelerating quickly. Given that the economy has already reopened and energy and transportation crises are hurting growth (not to mention inflation wreaking havoc), we should expect a further slowdown on the way. And this brings us closer to… yes, you guessed it, stagflation. To be clear: we are still far from stagnation, but the economic slowdown after a spectacular post-pandemic recovery is already unfolding. When we add it to high inflation, we should get an environment supportive of gold prices. However, supportive factors won’t be able to fully operate until the Fed starts hiking interest rates and gold prices bottom out. Sometimes one needs to hit rock bottom to succeed later; perhaps that’s also the case with gold. Time will tell. If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
A New Profitable Call on Crude Oil: “The Yoyo-Trade”

A New Profitable Call on Crude Oil: “The Yoyo-Trade”

Sebastian Bischeri Sebastian Bischeri 08.11.2021 16:54
Was the adage "buy the rumor, sell the news" also verified with that new trading position? It was Thursday (Nov. 4) that the following rumor had flourished: a possible coordinated action which was supposed to consist of drawing on the strategic reserves of several countries, including the United States, which were leading the dance. Meanwhile, our subscribers were just getting ready to go long around the $76.57-79.65 support zone (yellow band), with a stop placed on lower $76.48 level (red dotted line) and targets at $81.80 and $83.40 (green dotted lines). As a result, oil prices had contracted in stride (trading just into our entry area), just before the rumor effect faded shortly on Friday (Nov. 5), to push them back up. In fact, with oil prices picking up momentum on Friday, once again settling firmly above $80 per barrel, and with a market still showing doubts on the possible use of strategic crude reserves, the proposed trade entry on the black gold, triggered on Thursday – following my last post – was thus profitable since it already turned into a partial profit-taking at the end of the week. Then, on Saturday, Joe Biden said that his administration had the means to cope with the rise in energy prices, in particular after the OPEC+'s decision not to raise their production to more than 400,000 barrels per day. in a context of global imbalance between supply and demand. In addition, Joe Biden also insinuated that the organization (and its allies) might actually not do its best to pump enough volume of crude oil. Trading Charts Chart – WTI Crude Oil (CLZ21) Futures (December contract, daily chart) Now, let’s zoom into the 4H chart to observe the recent price action all around the above-mentioned levels of our trade plan: Chart – WTI Crude Oil (CLZ21) Futures (December contract, 4H chart) In summary, my trading approach has led me to suggest some long trades around potential key supports, as this dip on crude oil offered a great opportunity for the bulls to enter long whilst aiming towards specific projected targets. If you don’t want to miss any future trading alerts, make sure to look at here. . Moreover, for those interested in Forex trading, please note that I am currently preparing some new series about the co-existing links and relationships between commodities and currencies. Stay tuned – happy trading! Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Getting Back To Risky Assets As A Result Of Russian Move?

Calling the Precious Metals Bull

Monica Kingsley Monica Kingsley 08.11.2021 16:54
S&P 500 paused to a degree, but bonds didn‘t – we‘re far from a peak. That though doesn‘t mean a brief correction (having a proper look at the chart, sideways consolidation not reaching more than a precious couple of percentage points down) won‘t arrive still this month. It‘s a question of time, and I think it would be driven by tech weakness as the sector has reached lofty levels. It‘ll go higher still, but this is the time for value and smallcaps. And when the dollar starts rolling over to the downside (I‘m looking at the early Dec debt ceiling drama to trigger it off), emerging markets would love that. And commodities with precious metals too, of course – sensing the upcoming greenback weakness has been part and parcel of the gold and silver resilience of late. Precious metals are only getting started, but the greatest fireworks would come early spring 2022 when the Fed‘s failure to act on inflation becomes broadly acknowledged. For now, they‘re still getting away with the transitory talking points, and chalking it down to supply chain issues. As if these could solve the balance sheet expansion or fresh (most probably again short-dated) Treasuries issuance (come Dec) – the Fed is also way behind other central banks in raising rates. Canada, Mexico and many others have already moved while UK and Australia are signalling readiness – the U.S. central bank is joined by ECB in hesitating. Don‘t look for the oil breather to last too long – black gold is well bid above $78, and hasn‘t made its peak in 2021, let alone 2022. As I wrote on Friday, its downswing that works to increase disposable income (serving as a shadow Fed funds rate in the zero rates environment), would prove short-lived. The real economy would have to come to terms with stubbornly high oil prices – and it will manage. The yield curve is starting to steepen modestly again, and fresh spending initiatives would breathe some life into the stalling GDP growth. Next year though, don‘t be surprised by a particularly weak (even negative) quarterly reading, but we aren‘t there by a long shot, I‘m telling you. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 looks getting ripe for taking a pause – the rising volume isn‘t able to push it much higher intraday. Credit Markets HYG strength indeed continues, and it‘s a good sign that quality debt instruments are joining – the reprieve won‘t last long though (think a few brief weeks before rates start rising again). Gold, Silver and Miners Gold and silver continue reversing the pre-taper weakness, and miners are indeed joining in. I‘m looking for more gains with every dip being bought. Crude Oil Crude oil hasn‘t peaked, and looks getting ready to consolidate with a bullish bias again. $85 hasn‘t been the top, and the energy sector remains primed to do well. Copper Copper is deceptively weak, and actually internally strong when other base metals are examined. As more money flows into commodities, look for the red metal to start doing better – commodities haven‘t topped yet. Bitcoin and Ethereum Bitcoin and Ethereum consolidation has come to an end, and the pre-positioned bulls have a reason to celebrate as my prior scenario– stabilization followed by slow grind higher is what‘s most likely next – came to fruition. Summary S&P 500 breather is a question of time, but shouldn‘t reach far on the downside – the credit markets don‘t support it. Commodities are catching up in the (dovish as assessed by the markets too) taper aftermath, and precious metals are sniffing the dollar‘s weakness a few short weeks ahead. With fresh money not needed to repair commercial banks‘ balance sheets, it flows into the financial markets, and the taper effects would be negated by the repo operations – yes, I‘m not looking for a liquidity crunch. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
USD Index: Are New Milestones in the Cards?

USD Index: Are New Milestones in the Cards?

Przemysław Radomski Przemysław Radomski 08.11.2021 16:54
While the greenback's failed breakout on Nov. 4th may seem bearish, it faced a similar situation in August and October, only to recover and achieve new highs. After the USD Index’s negative response to the ECB’s monetary policy meeting on Oct. 28, I warned on Oct. 29 that dollar bears were unlikely to celebrate for much longer. I wrote: Based on the rather random comment during the conference, the traders panicked and bought the EUR/USD, which triggered declines in the USD Index (after all, the EUR/USD is the largest component of the USDX). Was the breakout to new 2021 lows invalidated? No. The true breakout was above the late-March highs (the August highs also served as a support level, but the March high is more important here) and it wasn’t invalidated. What was the follow-up action? At the moment of writing these words, the USDX is up and trading at about 93.52, which is just 0.07 below the August high in terms of the closing prices. Consequently, it could easily be the case that the USD Index ends today’s session (and the week) back above this level. You’ve probably heard the saying that time is more important than price. It’s the end of the month, so let’s check what happened in the case of previous turns of the month; that’s where we usually see major price turnarounds. I marked the short-term turnarounds close to the turns of the month with horizontal dashed blue lines, and it appears that, in the recent past, there was practically always some sort of a turnaround close to the end of the month. Consequently, seeing a turnaround (and a bottom) in the USD index now would be perfectly normal. And after the forecast turned into reality, the USD Index surged above 94 and remains poised to resume its uptrend over the medium term. To explain, if we zoom in on the four-hour chart, it highlights the importance of the price action on Nov. 5. During the session, the USD Index hit a new 2021 intraday high before a small reversal occurred. This might seem bearish at the first sight (it’s a failed breakout, after all)… However, similar developments were also present in August and October. After the dollar basket attempted to make new highs and failed, the greenback eventually regained its composure and achieved the milestones. As a result, another 2021 high should occur sooner rather than later. Please see below: The first failed attempt to break above the previous highs triggered sizable short-term declines. This happened in August (marked with red). The second – September – attempt triggered only a small correction (marked with green) that was then followed by a bigger rally. Similarly, the – marked with red – October invalidation was followed by a sizable decline, and the current one (marked with green), is relatively small. And it’s likely to be followed by a short-term rally, just like the September correction was. On top of that, as you can see on the below chart, the current setup for the USD Index and gold mirrors what we witnessed in early August. Following its sharp summertime rally, the USD Index moved close to its 50-day moving average without reaching it. And after buyers stepped in, the USD Index resumed its uptrend and made a new 2021 high. Moreover, with a similar pattern and a similar reading on the USD Index’s RSI (Relative Strength Index) present today, the greenback’s outlook remains robust. I marked both cases with red, vertical, dashed lines below. More importantly, though gold, silver, and mining stocks’ upswings concluded once the USD Index bottomed close to its 50-day moving average in August and sharp drawdowns followed. Moreover, while gold, silver, and mining stocks’ recent rallies were likely underwritten by expectations of a weaker USD Index (it did fail to move to new highs, right?) , technical (as described above and below) and fundamental realities contrast this thesis. As a result, the 2021 theme of ‘USD Index up, PMs down’ will likely resume over the medium term. Please see below: Equally bullish for the greenback, the Euro Index remains overvalued and should suffer a material drawdown over the medium term. For example, the index’s previous lows, its 50-day moving average, and its declining resistance line combined to create major resistance and the Euro Index is now retesting its 2021 lows. As a result, the next temporary stop could be ~1.1500 (the March 2020 highs, then likely lower). For context, the EUR/USD accounts for nearly 58% of the movement of the USD Index, and that’s why the euro’s behavior is so important. Please see below: Adding to our confidence (don’t get me wrong, there are no certainties in any market; it’s just that the bullish narrative for the USDX is even more bullish in my view), the USD Index often sizzles in the summer sun and major USDX rallies often start during the middle of the year. Summertime spikes have been mainstays on the USD Index’s historical record and in 2004, 2005, 2008, 2011, 2014 and 2018 a retest of the lows (or close to them) occurred before the USD Index began its upward flights (which is exactly what’s happened this time around). Furthermore, profound rallies (marked by the red vertical dashed lines below) followed in 2008, 2011 and 2014. With the current situation mirroring the latter, a small consolidation on the long-term chart is exactly what occurred before the USD Index surged in 2014. Likewise, the USD Index recently bottomed near its 50-week moving average; an identical development occurred in 2014. More importantly, though, with bottoms in the precious metals market often occurring when gold trades in unison with the USD Index (after ceasing to respond to the USD’s rallies with declines), we’re still far away from that milestone in terms of both price and duration. Moreover, as the journey unfolds, the bullish signals from 2014 have resurfaced once again. For example, the USD Index’s RSI is hovering near a similar level (marked with red ellipses), and back then, a corrective downswing also occurred at the previous highs. More importantly, though, the short-term weakness was followed by a profound rally in 2014, and many technical and fundamental indicators signal that another reenactment could be forthcoming. Please see below: Just as the USD Index took a breather before its massive rally in 2014, it seems that we saw the same recently. This means that predicting higher gold prices (or the ones of silver) here is likely not a good idea. Continuing the theme, the eye in the sky doesn’t lie. And with the USDX’s long-term breakout clearly visible, the wind still remains at the dollar’s back. Please see below: The bottom line? With my initial 2021 target of 94.5 already hit, the ~98 target is likely to be reached over the medium term, and the USDX will likely exceed 100 at some point over the medium or long term. Keep in mind though: we’re not bullish on the greenback because of the U.S.’ absolute outperformance. It’s because the region is fundamentally outperforming the Eurozone, the EUR/USD accounts for nearly 58% of the movement of the USD Index, and the relative performance is what really matters. In conclusion, the USD Index remains in the driver’s seat and new highs should materialize over the medium term. And while gold, silver and mining stocks have rode the S&P 500 higher recently, history has been unkind when the precious metals ignore technical and fundamental realities. Moreover, with gold, silver, and mining stocks’ strong negative correlations with the U.S. dollar standing the test of time, it’s likely only a matter of time before investors realize this as well. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Bitcoin rockets from best support at 60500/60000

Bitcoin rockets from best support at 60500/60000

Jason Sen Jason Sen 09.11.2021 08:27
Bitcoin rockets from best support at 60500/60000 & through he all time high at 66500/67000 as predicted, initially targeting 69500/70000 Ripple through 6 month trend line resistance at 12300/400 for a buy signal. Ethereum longs at best support at 4380/4340 work on the run to the next target of 4800.Today's Analysis Bitcoin longs from anywhere above 60000 this trade worked perfectly as we beat 66500/67000 as expected initially targeting 69500/70000. We should struggle so do not be surprised to see some profit taking. However a break above 70000 is a good buy signal & can take us as far as 70000/78000. Downside is expected to be limited with first support at 67000/66500. Longs need stops below 66000. Ripple break above 12400 is an important medium term buy signal initially targeting 12800/850 & 13050. Support at 12300/12200. Best support at 11800/11700. Longs need stops below 11600. Ethereum longs at best support at 4380/4340 worked on the bounce back above 4475/55 to the targets of 4600/50 & 4800 & hopefully as far as 4950/5000 this week. Downside is expected to be limited with minor support at 4650/40. Best support at 4520/4480. Longs need stops below 4430. Emini S&P December hitting the targets as far as 4696/99 before reversing from 4712 & we are closing in on first support at 4675/70 this morning. Nasdaq December seeing a little profit taking from our 16420/440 target but downside should be limited in the bull trend with no sell signal yet, despite overbought conditions. Emini Dow Jones December we wrote: hit the next target of 36000/100 & if we continue higher in the bull trend look for 36250/280. Target hit with a new all time high at 36375. Today's Analysis. Emini S&P meets first support at 4675/70. Longs need stops below 4665 but then expect strong support at 4650/45. Try longs with stops below 4635. Unlikely but further losses meet an excellent buying opportunity at 4615/05. Longs need stops below 4595. The only resistance is at 4710/15. You would have to brave or crazy to sell short in this endless bull market! A break above 4720 targets 4735/40 then 4760. Nasdaq December straight to the next target of 16420/440 with a new all time high only 8 ticks above!! Eventually we can reach 16700, perhaps this week. Then we look for 16850. First support at 16260/240 likely to be tested this morning, but below here meets second support at 16140/120. Unlikely but further losses meet a buying opportunity at 15970/920. Longs need stops below 15890. Emini Dow Jones December new all time high at 36375 but watch resistance at 36410/440. I certainly do not recommend a short but we could pause here. If we continue higher look for 36490/500 & 36750/800. First support at 36100/35950. Best support at 35700/650. Longs need stops below 35550. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
The uncertain certainty of bitcoin

The uncertain certainty of bitcoin

Korbinian Koller Korbinian Koller 09.11.2021 10:24
Some might argue that it is best to sit on one’s hands and wait for a time when bitcoin prices are suppressed, and they have a point with the possibility of a market crash. And then again, they might have said that already when bitcoin was still trading at US$3,000 (we do not find it likely that bitcoin will ever retrace to those levels again.). Where are the uncertainties in bitcoins certainty? When you dissect a complex mechanism, you will always find a problem. It is like going to the bakery. It would be foolish to expect to get anything else but bread. Maybe it is better to look at a glass half full, meaning why not look at why bitcoin could be a certainty? BTC in US-Dollar, Monthly Chart, every buyer is a winner if he didn’t sell: Bitcoin in US-Dollar, Monthly chart as of November 9th, 2021. The monthly chart above certainly shows that whoever bought in the past has made a profit by now. Yet, we know “hodling” isn’t an easy thing. Personal risk appetite determines the number of bitcoin that can be held throughout these boom and bust cycles. We solved this dilemma through our quad exit strategy. And we teach low-risk position size building in our free telegram channel. BTC in US-Dollar, Weekly Chart, new all-time highs: Bitcoin in US-Dollar, Weekly chart as of November 9th, 2021. Now, moving forward to real-time, we can make out a similar bullish picture on the weekly chart after our glimpse in the past. Recent events provide data that substantiates bitcoin’s long-term certainty. A look at the last two weeks of October (marked in white) reveals a very brief battle with a minimal retracement level at the double top of all-time highs. Bears barely get a foot in the door, where typically bitcoin experiences significant retracements. To us, a clear sign that the rush is on. Big player money is now rushing to accumulate the necessary size they aim to hold on their books for the long term. Consequently, reducing volatility, one of the most feared aspects of bitcoin, which in times to come will attract more market players to this trading vehicle.   BTC in US-Dollar, Monthly Chart, six figures in 2022: Bitcoin in US-Dollar, Monthly chart as of November 9th, 2021. A look into the future from a monthly chart perspective is confidence building as well. With new all-time high prices printing at the time of publication of this chart book, our bet is still on bitcoin with a 63% over 47% chance that prices will advance from here rather than retracing to a substantially lower price level. So far, bitcoin has done nothing else but eradicate the uncertainties placed in its way. The most stubborn doubter would likely be happy if they had picked up a few coins when they traded at a dollar. What provides confidence for our forecast is the confirmation that bitcoin price retracements are now more modest. This lets us assume that the number of professional traders participating in this market has increased. In the monthly chart above, you can make out that closing prices of the month’s May, June, and July this year closed above the 50% Fibonacci retracement levels. A conservative retracement for bitcoins historical standards. We project for the near term that bitcoin will reach six-figure prices in mid-February next year. The uncertain certainty of bitcoin: From the anticipatory perspective, it seems evident that holding bitcoin is a prudent move with a look into the future. A hedge is needed once the risk is apparent to all, and the house of cards will tumble.  From a real-time perspective, we also find bitcoin to be a “must-own.” The charts above showed the strength with which bitcoin is aching to claim its turf, and it is never good to wait till “fear of missing out” kicks in, and low-risk entry opportunities become scarce.  And from a reactionary perspective, a look in the past, it is evident that anybody would like a piece of the action where bitcoin has nothing but a stunning history of unheard percentage moves and made it from eight cents to US$ 67,000 in just a dozen years.  There are always uncertainties in speculative ventures, but bitcoin itself is a certainty, not to be rationalized away for the years to come. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|November 9th, 2021|Tags: Bitcoin, bitcoin consolidation, Bitcoin mining, crypto analysis, Crypto Bull, crypto chartbook, crypto mining, low risk, quad exit, technical analysis, trading education|0 Comments About the Author: Korbinian Koller Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
Intraday Market Analysis – GBP Seeks Support

Intraday Market Analysis – GBP Seeks Support

John Benjamin John Benjamin 09.11.2021 09:01
EURGBP sees a temporary pullback The sterling inched higher as traders took profit after the BOE’s dovish shift last week. The rally above the supply area of 0.8570 is a sign of commitment from the buy-side. Strong momentum has forced the bears to rush for the exit door. 0.8620 is now the next resistance. Its break would bring the euro to September’s high at 0.8660, where a breakout may lead to a bullish reversal in the medium-term. In the meantime, an overbought RSI is causing a pullback. The base of the latest surge at 0.8465 is an important support. NZDUSD tests key resistance The New Zealand dollar recoups losses as risk appetite recovers. The pair has met buying interest at 0.7070 along the 20-day moving average. A bullish RSI divergence is a sign that the bearish momentum has waned. When this happens in a demand zone, it makes a rebound of greater significance. 0.7180 is a major hurdle ahead following a previously botched bounce. Its breach may resume the kiwi’s uptrend above 0.7220. The RSI’s double top in the overbought area may briefly limit the bullish impetus. GER 40 consolidates gains The Dax 40 continues to rally in hopes of a prolonged low-rate environment. The bulls are pushing towards 16200 after the index reached the milestone at 16000. However, the RSI’s multiple ventures into the overbought area and a bearish divergence indicate that the rally may have overextended. A temporary pullback would be necessary to let the bulls catch their breath. 15920 is the immediate support. Further down, 15730 on the 20-day moving average would be an area of interest.
Bitcoin is climbing undeterred higher

Bitcoin is climbing undeterred higher

Korbinian Koller Korbinian Koller 02.11.2021 11:02
Bitcoin is volatile and nosedives in some of these attacks. A historical look back illustrates how bitcoin each time is climbing higher right after: 2009 traded for free (zero value) between enthusiasts 2010 worth US$0.08 2011 from US$1 up to US$32 back down to US$2 2012 from US$4.80 up to US$13.20 2013 from US$13.40 up to US$1,156 and down to US$760 2014 – 2016 down to US$315 2017 up to US$20,089 2018 down to US$3,122 2019 up to US$13,880 2020 up to US$34,800 2021 up to US$67,016 And these last three years, bitcoin has been climbing higher, undeterred. BTC in US-Dollar, Monthly Chart, bitcoin, a true winner: Bitcoin in US-Dollar, Monthly chart as of November 2nd, 2021. The monthly chart above illustrates bitcoin’s winning characteristics. We can see harmonious swings. Retracements are substantial, but bitcoin shows a persistent tendency to outperform previous all-time highs. BTC in US-Dollar, Weekly Chart, explosive recent history: Bitcoin in US-Dollar, Weekly chart as of November 2nd, 2021. The weekly chart points towards more explosive moves recently. After a breakout of a multi-year range, we can see that bitcoin has started to move substantially due to more widespread adoption. Swing behavior is getting more harmonious. At the moment, we are in the midst of a battle between bears and bulls at a double top formation. Consequently, the following days to weeks will show who will come out ahead. The fact that bulls cling to their winnings for this long gives price in this pat situation a slight edge for the bullish corner.   BTC in US-Dollar, Daily Chart, stepping away from the noise: Bitcoin in US-Dollar, Daily chart as of November 2nd, 2021. The daily chart can be pretty volatile. These smaller time frames are advised only to be traded if you are a professional. This applies particularly to struggle zones like the one we are currently in, for instance. Intraday swings can get substantial. In addition, once these battles between bears and bulls resolve, daily percentage moves can be staggering. Luckily, one doesn’t need to fear such challenging trading environments. To clarify, step up to larger time frames and reduce trade frequency and position size. Accept the risk based on adequate position size to your individual psychology and risk appetite. Consequently, buying for the long term will become much easier. It is essential as such to be familiar with a trading object’s typical behavior and, in bitcoins case, not to forget its ability to shine after a major setback. Bitcoin is climbing undeterred higher: Overall, bitcoins’ technical personality makes it an easy choice for one’s wealth preservation portfolio. Especially when options for wealth preservation investments are limited! This year’s strength towards gold and silver price performance had us increase bitcoins percentage allocation within the long-term portfolio. It fulfills two valuable functions to firmly find its place under historically much longer established counterparts. Scarcity for stability, and a more considerable performance potential necessary to protect against inflation. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting.
Gold, Silver, and Miners Just Can’t Jump

Gold, Silver, and Miners Just Can’t Jump

Przemysław Radomski Przemysław Radomski 03.11.2021 15:17
Let’s face it, the metals are not having an easy time breaking out. Short-term rallies end up going nowhere and bearish signs are still in abundance. Yesterday’s session was once again quite informative, and so is today’s pre-market trading. In yesterday’s analysis, I emphasized the importance of the relative weakness that we just saw in mining stocks, so let’s start with taking a look at what mining stocks did yesterday. At first glance, yesterday’s performance might look like a bullish reversal, but zooming in clarifies that something else was actually in the works. Let’s take a look at the GDXJ 1-hour candlestick chart for details. Yesterday’s “reversal” was actually a breakdown below the previous (mid-October) intraday lows along with the verification thereof. The GDXJ moved below the above-mentioned lows and – while it moved back up – it ended the session below them. This is a bearish type of session. Also, if you were wondering about the high volume in the final hour of trading – that’s relatively normal as that’s when bigger trades tend to take place. And while mining stocks were busy verifying the breakdown, gold tried to break above its declining, red resistance line, and verify that breakout. While yesterday’s session didn’t bring much lower gold prices (and the invalidation), today’s pre-market trading makes it clear that the attempt to break higher failed. Just like I had indicated yesterday. This time the rising short-term support line is not there to prevent further declines as the breakdown below it was also confirmed. What does it mean? It means that gold is likely to fall, and quite likely it’s going to fall hard. Besides, silver price is after a major short-term breakdown, too. After a powerful short-term rally, silver had reversed, and now it broke below its rising support line. That’s yet another bearish indication. Please note that at first silver was reluctant to decline while mining stocks moved decisively lower, which was normal during the early part of a given decline. Silver did some catching-up action yesterday, but since miners are not showing strength, I’d say that we’re getting to the regular part of a short-term move, not close to its end. And the move lower is likely to continue, just as the move higher is likely to continue in case of the USD Index. The USDX is after a verification of the breakout to new 2021 highs and after an about monthly consolidation above them. This is a perfect starting point for a major upswing, and we’re likely to see one soon. All in all, while the outlook for the precious metals sector is very bullish for the following years, it’s very bearish for the following weeks. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Great Profitable Runs

Great Profitable Runs

Monica Kingsley Monica Kingsley 09.11.2021 15:04
S&P 500 pause goes on, and bonds support more of it to come. Tech keeps thus far the high ground gained, but value is showing signs of very short-term weakness – and yields haven‘t retreated yesterday really. The correct view of the stock market action is one of microrotations unfolding in a weakening environment – one increasingly fraught with downside risks. To be clear, I‘m not looking for a sizable correction, but a very modest one both in time and price. It‘s a question of time, and I think it would be driven by tech weakness as the sector has reached lofty levels. It‘ll go higher over time still, but this is the time for value and smallcaps in the medium term.The dollar though isn‘t putting much pressure on stock, commodity or precious metals prices at the moment – such were my yesterday‘s words:(…) when the dollar starts rolling over to the downside (I‘m looking at the early Dec debt ceiling drama to trigger it off), emerging markets would love that. And commodities with precious metals too, of course – sensing the upcoming greenback weakness has been part and parcel of the gold and silver resilience of late. Precious metals are only getting started, but the greatest fireworks would come early spring 2022 when the Fed‘s failure to act on inflation becomes broadly acknowledged.For now, they‘re still getting away with the transitory talking points, and chalking it down to supply chain issues. As if these could solve the balance sheet expansion or fresh (most probably again short-dated) Treasuries issuance (come Dec) – the Fed is also way behind other central banks in raising rates. Canada, Mexico and many others have already moved while UK and Australia are signalling readiness – the U.S. central bank is joined by ECB in hesitating.And that‘s what precious metals would be increasingly sniffing out. Commodities are joining in the post-taper celebrations, and my prior Tuesday‘s market assessments are coming to fruition one by one. Oil is swinging higher and hasn‘t topped, copper is coming back to life, and cryptos aren‘t in a waiting mood either.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 pause is here, and all that‘s missing, is emboldened bears. They may or may not arrive given that VIX keeps looking lazy these days – either way, the risks to the downside are persisting for a couple of days at least still.Credit MarketsHYG strength evaporated, but it‘s on a short-term basis only. The broader credit market weakness would get reversed, but it‘s my view that quality debt instruments would be lagging.Gold, Silver and MinersGold and silver continue reversing the pre-taper weakness – the upswing goes on, but is likely to temporarily pause as the miners‘ daily weakness foretells. Still, I‘m looking for more gains with every dip being bought.Crude OilCrude oil bulls continue having the upper hand, no matter the relative momentary stumble in maintaining gains – the energy sector hasn‘t peaked by a long shot.CopperCopper is participating in the commodities upswing – not too hot, not too cold. Just right, and it‘s a question of time when the red metal would start visibly outperforming the CRB Index again.Bitcoin and EthereumBitcoin and Ethereum consolidation has indeed come to an end, and both leading (by volume traded) cryptos are primed for further gains. SummaryS&P 500 breather remains a question of time, but shouldn‘t reach far on the downside – the bears are having an opportunity to strike as credit markets have weakened, and there isn‘t enough short-term will in tech to go higher still. The very short-term picture in stocks is mixed, but downside risks are growing. The dollar is already weakening, much to the liking of commodities and precious metals – there is still enough liquidity in the markets as any taper can be easily offset by withdrawing repo money sitting on the Fed‘s balance sheet.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Intraday Market Analysis – Euro Attempts To Bounce

Intraday Market Analysis – Euro Attempts To Bounce

John Benjamin John Benjamin 10.11.2021 08:58
EURUSD meets resistance The euro finds support from an upbeat economic sentiment from across the block. The pair has met buying interest in the demand zone around 1.1520. A bullish RSI divergence suggests that sellers may have taken their feet off the pedal. Subsequently, a break above 1.1560 prompted the short side to cover. 1.1615 is a key supply zone from last week’s sell-off, after which the bulls need to lift offers near 1.1690 before a reversal could gain traction. On the downside, a fall below 1.1550 may call the rebound into question. XAGUSD awaits breakout Bullions rise as the US dollar retreats ahead of the release of inflation data. A bullish MA cross on the daily chart is a sign that sentiment could be turning around. Silver is testing the September high of 24.80. A bullish breakout would trigger an extended rally towards 26.00. However, the RSI’s double top in the overbought area has held buyers back as the market awaits new catalysts. A combination of profit-taking and fresh selling could drive the price lower. The base of a previous breakout at 23.70 would be a support. US 500 seeks support The S&P 500 consolidates gains over strong corporate earnings and improved economic outlook. The divergence between the 20 and 30-day moving averages indicates an acceleration in the rally. Though there is a chance of a pullback after the RSI shot into the overbought area. The bullish bias means that buyers may be eager to jump in during a correction. The index is hovering above 4660. 4625 on the 20-day moving average would be the second line of defense. On the upside, a rebound would lead to 4750.
How Strange! Gold Rises on Strong Payrolls!

How Strange! Gold Rises on Strong Payrolls!

Arkadiusz Sieron Arkadiusz Sieron 09.11.2021 15:20
US economy added 531,000 jobs in October, surpassing expectations. Gold reacted… in a bullish way, and jumped above $1,800! The October nonfarm payrolls came surprisingly strong. As the chart below shows, the US labor market added 531,000 jobs last month, much above the expectations (MarketWatch’s analysts forecasted 450,000 added jobs). So, it’s a nice change from the last two disappointing reports. What’s more, the August and September numbers were significantly revised up – by 235,000 combined. Let’s keep in mind that we also have the additions of 1,091,000 in July and 366,000 in August (after an upward revision). Additionally, the unemployment rate declined from 4.8% to 4.6%, as the chart above shows. It’s a positive surprise, as economists expected a drop to 4.7%. In absolute terms, the number of unemployed people fell by 255,000 - to 7.4 million. It’s a much lower level compared to the recessionary peak (23.1 million), however, it’s still significantly higher than before the pandemic (5.7 million and the unemployment rate of 3.5%). Implications for Gold What does the recent employment report imply for the precious market? Well, gold surprised observers and rallied on Friday despite strong nonfarm payrolls. As the chart below shows, the London P.M. Fix surpassed the key level of $1,800. To show gold’s reaction more clearly, let’s take a look at the chart below, which shows that the price of gold futures initially declined after the October Employment Situation Report release. Only after a while, it rebounded and rallied to about $1,820. It’s a surprising behavior, as gold usually reacted negatively to strong economic data. Until now, gold liked weak employment reports as they increased the chances of a dovish Fed that would continue its easy monetary policy. Now, something has changed. But what? Well, some analysts would say that nothing has changed at all. Instead, they would tell us that the latest employment report is not as strong as it seems. In particular, the labor force participation rate was unmoved at 61.6% in October and has remained within a narrow range of 61.4% to 61.7% since June 2020, as the chart below shows. The lack of any improvement in the labor force participation rate could be interpreted as a lack of full employment and used by the Fed as an excuse to leave interest rates unchanged for a long time. I’m not convinced by this explanation. “Full employment” does not mean that all people are working, but all people who want to work are working. And, as the chart above shows, the fact that after the Great Recession the labor participation rate didn’t move back to the pre-crisis level didn’t prevent the Fed from hiking interest rates in 2015-2019. There is also another possibility. It might be the case that investors are now focusing on inflation. The employment report showed that the average hourly earnings have increased by 4.9% over the past twelve months, raising some concerns about wage inflation and general price pressure in the economy. Remember: context is crucial. If the new narrative is more about high inflation, good news may be positive for gold if they also indicate strong inflationary pressure. Although I like this explanation, it’s not free from shortcomings. You see, stronger inflation concerns should increase inflation premium and bond yields. However, the opposite is true: the real interest rates declined last week (see the chart below), enabling gold to catch its breath. After all, the markets are expecting a more dovish Fed than before the announcement of tapering. This is a fundamentally positive development for the gold market. Having said that, it’s too early to declare the start of the breakout. If inflation stays high, the US central bank could have no choice but to hike interest rates next year. Also, although the recent jump despite strong payrolls is encouraging, gold has yet to prove that it can stay above $1,800. If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
EURUSD well established so we keep trading them until prices breakout of the range.

EURUSD well established so we keep trading them until prices breakout of the range.

Jason Sen Jason Sen 10.11.2021 14:24
EURUSD levels are well established so we keep trading them until prices breakout of the range. We have shorts at first resistance at 1.1600/10 from yesterday USDCAD we have longs at 1.2440/20 targeting strong resistance at 1.2510/30. GBPCAD beat strong resistance at 1.6860/70 but meets a selling opportunity at 1.6930/50 with stops above 1.6970. Update daily at 06:30 GMT Today's Analysis. EURUSD strong resistance at 1.1600/10. Shorts need stops above 1.1630. A break higher can target strong resistance at 1.1695/1.1705. Exit longs & try shorts with stops above 1.1720. A break higher is a buy signal targeting 1.1765/70 & 1.1800/10. Shorts at 1.1600/10 target 1.1570/60 (hit), perhaps as far as first support at the October low at 1.1530/20. A break below 1.1510 is a sell signal initially targeting 1.1490 & although this could hold initially (a low for the day certainly possible but longs are risky) we eventually expected to target 1.1430/20. USDCAD longs at 1.2440/20 target strong resistance at 1.2510/30. Shorts need stops above 1.2550. First support at 1.2440/20 but longs need stops below 1.2410. A break below here targets 1.2370/65 perhaps as far as support at 1.2300/1.2280. Longs here need stops below 1.2270. A break lower is a sell signal. GBPCAD selling opportunity at 1.6930/50 with stops above 1.6970. A break higher however targets 1.7050/70. Shorts at 1.6930/50 target 1.6860, perhaps as far as 1.6810. A low for the day is possible here but further losses are likely to retest last week's low at 1.6735/25. GBPUSD beat 1.3510/30 to target 1.3570/80 & my selling opportunity at 1.3600/20. Shorts here worked perfectly with a high for the day at 1.3607 & a collapse to my target of 1.3525/15. In fact this was also the low for the day. EURGBP shorts at the 200 day moving average at 8585 work on the slide to second support at 8520/10 for profit taking on any remaining shorts. A low for the day exactly here so longs also worked on the bounce to 8550. GBPNZD shot higher to strong resistance at 1.9050/70 but shorts need stops above 1.9090 (which looks likely today's high as I write). Update daily at 07:00 GMT Today's Analysis. GBPUSD try shorts again at 1.3600/20 targeting 1.3560, perhaps as far as minor support at 1.3525/15. Below here look for 1.3470/60. A selling opportunity at 1.3600/20. Try shorts with stops above 1.3635. A break higher targets 1.3570/75. EURGBP holding below 8550 retests support at 8520/10. Try longs again with stops below 8500. A break lower targets 8475. Longs at 520/10 target 8550 before first resistance at the 200 day moving average at 8585/95. A break above 8600 is a buy signal for this week. GBPNZD shorts at strong resistance at 1.9050/70 target 1.9895, perhaps as far as 1.8950. A break above 1.9090 targets 1.9170/80. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
Profiting on Hot Inflation

Profiting on Hot Inflation

Monica Kingsley Monica Kingsley 10.11.2021 16:08
S&P 500 pause finally went from sideways to down, and might not be over yet. Credit markets aren‘t nearly totally weak – tech simply had to pause, so did semiconductors, and the Tesla downswing took its toll. Value though recovered the intraday downside, and VIX retreated from its daily highs – that may be all it can muster. I‘m looking primarily at bond markets for clues, and these reacted to the PPI figures with further decline in yields.At the same, inflation expectations are moving higher – the more you shorten the maturity, the higher they go, let alone RINF, their key ETF. Markets will be proven very wrong about the transitory inflation complacency – inflation rates aren‘t going to decline if you just leave them alone. And taper coupled with rate hikes hesitancy won‘t do the trick either.S&P 500 is still primed to go higher – the only question is the shape of the current consolidation. Liquidity is still ample, the banking sector is strong, and the Russell 2000 isn‘t really retreating. As stated yesterday:(…) The correct view of the stock market action is one of microrotations unfolding in a weakening environment – one increasingly fraught with downside risks. To be clear, I‘m not looking for a sizable correction, but a very modest one both in time and price. It‘s a question of time, and I think it would be driven by tech weakness as the sector has reached lofty levels. It‘ll go higher over time still, but this is the time for value and smallcaps in the medium term.Precious metals are consolidating – it‘s almost a pre-CPI ritual, but under the surface, the pressure to go higher keeps building. I‘m looking for a strong Dec in gold and silver, with unyielding oil and copper gradually waking up. Cryptos aren‘t taking prisoners either.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 finally declined, and the very short-term picture is unclear – is the dip about to continue, or more sideways trading before taking on prior highs? It‘s a coin toss.Credit MarketsHYG recouped some of the prior downside, but the LQD and TLT upswings give an impression of risk-off environment. Sharply declining yields aren‘t necessarily positive for stocks, and such is the case today.Gold, Silver and MinersGold and silver look like briefly pausing before the upswing continues – miners are pulling ahead, and the ever more negative real rates are powering it all.Crude OilCrude oil bulls continue having the upper hand, and oil sector is also pointing at higher black gold prices to come. Energy hasn‘t peaked by a long shot.CopperCopper went at odds with the CRB Index, but that‘s not a cause for concern. It‘ll take a while, but the red metal would swing upwards again.Bitcoin and EthereumBitcoin and Ethereum are briefly consolidating, and a fresh upswing is a question of shortening time. SummaryS&P 500 remains momentarily undecided, but the pullback shouldn‘t reach far on the downside – the bears are having an opportunity to strike on yet another hot inflation numbers. This isn‘t transitory really as I‘ve been telling you for almost 3 quarters already. Needless to say, the fire under real assets is being increasingly lit – more gains in commodities, precious metals and cryptos are ahead as inflations runs rampant on the Fed‘s watch.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Intraday Market Analysis – USD Cuts Through Resistance

Intraday Market Analysis – USD Cuts Through Resistance

John Benjamin John Benjamin 11.11.2021 09:26
USDJPY attempts a bullish reversalThe US dollar broke higher after October’s CPI exceeded expectations.On the daily chart, the RSI has dropped back into the neutrality area. The greenback has secured bids around the 30-day moving average. An oversold RSI on the hourly chart attracted a ‘buying-the-dips’ crowd at 112.70.The latest surge above the psychological level of 114.00 has prompted sellers to cover their bets, paving the way for a bullish reversal above 114.25. Before that, an overbought RSI may lead to a pullback towards 113.05.XAUUSD breaks resistanceRising US CPI boosts the demand for gold as an inflation hedge.After being unable to clear the daily chart’s triple top at 1833 over the course of the summer, the precious metal has cut through the resistance like a hot knife through butter. High volatility suggests that sellers were quick to bail out.As momentum traders jump in, the bullish breakout would lead to an extended rally towards 1900. An overbought RSI may cause a limited pullback. In that case, 1823 at the base of the rally may see strong buying interest.USOIL retreats from resistanceWTI crude edged lower after the EIA reported a slight rise in US inventories. The price’s swift recovery above the sell-off point at 83.00 is an indication that sentiment remains overall optimistic.However, the previous peak and psychological level of 85.00 seems like a tough hurdle to overcome for now. An overbought RSI has triggered a temporary pullback with a break below 81.90. In turn, this is deepening the correction towards 79.30.Trend followers may see the limited retracement as an opportunity to stake in.
Intraday Market Analysis – USD Seeks Support - 19.10.2021

Intraday Market Analysis – USD Keeps Bullish Momentum

John Benjamin John Benjamin 12.11.2021 09:33
GBPUSD buried in bearish territory The pound continues to retreat after Britain’s growth fell short of expectations in Q3. A break below September’s low at 1.3420 has invalidated the latest rebound, putting buyers on the defensive once again. The RSI’s double bottom in the oversold area may ease the bearish push momentarily. A bounce could be an opportunity to sell into strength. 1.3500 is the immediate resistance. On the downside, renewed momentum would drive price action towards last December’s lows around 1.3200. AUDUSD struggles for support The Australian dollar came under pressure after the unemployment rate returned above 5% last month. The sell-off continued after a brief pause over the 30-day moving average near 0.7390, turning the latter into a fresh resistance. The lack of support suggests increasingly downbeat sentiment. The base of October’s bullish breakout at 0.7240 is the next support. The RSI’s oversold situation may cause a limited rebound from the round number at 0.7300, though it is likely to turn out to be a dead cat bounce. US100 tests demand zone The Nasdaq 100 suffers losses as high inflation dents risk appetite. An RSI divergence showed a deceleration in the uptrend, a sign that the rally has overheated. Subsequently, a drop below 16200 has prompted leveraged buyers to exit for fear of a correction. As the RSI inched into the oversold territory, the index saw bids near the breakout zone (15900) from earlier this month. The support-turned-resistance at 16200 is the first hurdle. Then the bulls will need to clear 16400 before the rally can resume.
Netflix Stock (NFLX) Ahead Of Important Data, XAUUSD Chart's Reduced Amplitudes - Swissquote's MarketTalk

Inflation to the Moon - Gold Wears a Space Suit!

Arkadiusz Sieron Arkadiusz Sieron 11.11.2021 16:06
  Inflation rears its ugly head, surging at the fastest pace since 1990. The yellow metal has finally reacted as befits an inflation hedge: went up. Do you know what ambivalence is? It is a state of having two opposing feelings at the same time –this is exactly how I feel now. Why? Well, the latest BLS report on inflation shows that consumer inflation surged in October, which is something I hate because it lowers the purchasing power of money, deteriorating the financial situation of most people, especially the poorest and the least educated who don’t know how to protect against rising prices. On the other hand, I feel satisfaction, as it turned out that I was right in claiming that high inflation would be more persistent than the pundits claimed. After the September report on inflation, I wrote: “I’m afraid that consumer inflation could increase even further in the near future”. Sieron vs. Powell: 1:0! Indeed, the CPI rose 0.9% last month after rising 0.4% in September. The core CPI, which excludes food and energy prices, accelerated to 0.6% in October from 0.1% in the preceding month. And, as the chart below shows, the overall CPI annual rate accelerated from 5.4% in September to 6.2% in October, while the core CPI annual rate jumped from 4% to 4.6%. This surge (and a new peak) is a final blow to the Fed’s fairy tale about transitory inflation. As one can see in the chart above, the CPI rate has stayed above the Fed’s target since March 2021, and it won’t decline to 2% anytime soon. This contradicts all definitions of transitoriness I know. What’s more, the October surge in inflation was not only above the expectations – it was also the biggest jump since November 1990, as the chart below shows. Unfortunately for Americans, it might not be the last word of inflation. This is because over 80% of CPI subcomponents were above the Fed’s target of 2%, which clearly indicates that high inflation is not caused merely by the reopening of the economy but also by the broad-based factors such as the surge in the money supply.   Implications for Gold Ladies and gentlemen, gold finally reacted to surging inflation! As the chart below shows, the price of gold (Comex futures) spiked from below $1,830 to above $1,860 after the BLS report on CPI. Why did gold finally notice inflation and react as a true inflation hedge? Well, it seems that the narrative changed. Until recently, investors believed the Fed that inflation would be transitory. Reality, however, has disproved this story. Another factor I would like to mention is the FOMC’s recent announcement of tapering of its quantitative easing. That event removed some downward pressure from the gold market. By the way, this is something I also correctly predicted in the Fundamental Gold Report that commented on September inflation report: “it seems that until the Fed tapers its quantitative easing, gold will remain under downward pressure. Nonetheless, when it finally happens, better times may come for gold.” Indeed, yesterday’s rally suggests that gold recalled its function as a hedge against inflation. Until today, I was cautious in announcing the breakout in the gold market, as the yellow metal jumped above $1,800 only recently. However, the fact that gold managed not only to stay above $1,800 but also to continue its march upward (in tandem with the US dollar!) suggests that there is bullish momentum right now. Having said that, investors should remember about the threat of a more hawkish Fed. Higher inflation could support the monetary hawks within the FOMC and prompt the US central bank to raise interest rates sooner rather than later. The prospects of a tightening cycle could weigh on gold. However, as long as investors focus stronger on inflation than on tightening of monetary policy, and as long as the real interest rates decrease, or at do not increase, gold can go up. If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
HK Rallies and PBOC Cuts, US Stocks Stabilize

Focus on the Real Gains

Monica Kingsley Monica Kingsley 11.11.2021 15:51
S&P 500 declined, and not enough buyers arrived in my view. Still, we‘re likely to see a brief pause in selling, and that‘s giving the bulls a chance. Credit markets were a bit too beaten down by the troubled 30-year Treasury auction and Evergrande moving into the spotlight somewhat again. VIX managed another upswing, and doesn‘t point to the S&P 500 having gotten to an excessively bearish positioning just yet. I think some treading the water before stocks make up their mind, is most likely next. The downswing doesn‘t appear to be totally over, but we have arguably seen the greater part of it already. Tech isn‘t yet stabilized, but the increasing volume spells a pause in selling. I‘m still looking for clues to the bond markets. And it‘s clear that not even higher rates can sink the precious metals run – neither the late day rush to the dollar had that power. Miners continue behaving, and their daily black candle doesn‘t scare me – the realization of inflation not having peaked, and being as stubborn as I had been pounding the table since eternity, is working its magic: (…) inflation expectations are moving higher – the more you shorten the maturity, the higher they go, let alone RINF, their key ETF. Markets will be proven very wrong about the transitory inflation complacency – inflation rates aren‘t going to decline if you just leave them alone. And taper coupled with rate hikes hesitancy won‘t do the trick either. S&P 500 is still primed to go higher – the only question is the shape of the current consolidation. Liquidity is still ample, the banking sector is strong, and the Russell 2000 isn‘t really retreating. Precious metals are consolidating – it‘s almost a pre-CPI ritual, but under the surface, the pressure to go higher keeps building. I‘m looking for a strong Dec in gold and silver, with unyielding oil and copper gradually waking up. Cryptos aren‘t taking prisoners either. Crude oil is well bid in the $78 till $80 zone, and would overcome $85 – we aren‘t looking at a reversal, but at temporary upside rejection. Likewise copper would kick in with vengeance, and the shallow crypto consolidations are barely worth mentioning at all. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 decline continues, and the very short-term picture favors a little consolidation – the selling might not be over just yet. Credit Markets HYG, LQD and TLT – weakness anywhere you look, without tangible signs of stabilization, which makes any S&P 500 upswings a doubtful proposition. Gold, Silver and Miners Gold and silver look to be just getting started – the growing money flows aren‘t sufficient to push prices lower. Miners are pulling ahead, and the ever more negative real rates coupled with surging inflation fears (and Fed policy mistake recognition) are powering it all. Crude Oil Crude oil bulls would have to step in around the $80 level again, and it seems they wouldn‘t find it too hard to do. Yesterday‘s downswing looks like a daily setback only. Copper Copper downswing was again bought, and I‘m not looking for the bears to make much further progress as commodities appear ready to turn up again regardless of temporary dollar strength. Bitcoin and Ethereum Bitcoin and Ethereum are again briefly consolidating, and the bulls haven‘t really spoken their last word. It‘s a nice base building before another upleg. Summary S&P 500 is likely pausing for a moment here, and any further pullback isn‘t likely to reach far on the downside. The late day selloff in real assets was merely a brief, news-driven correction that would be reversed before too long, and precious metals are showing the way as inflation is moving back into the spotlight, and the talk about Fed‘s policy mistake is growing louder. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Red Hot and Running

Red Hot and Running

Monica Kingsley Monica Kingsley 12.11.2021 15:44
S&P 500 really went through the brief pause in selling, but credit markets haven‘t stopped really. Their weakness continues, but is hitting value a tad harder than tech. Together with VIX turning south, that‘s one more sign why the bulls are slowly becoming the increasingly more favored side. Hold your horses though, I‘m talking about a very short-term outlook – this correction doesn‘t appear to be over just yet (the second half of Nov is usually weakner seasonally): (…) some treading the water before stocks make up their mind, is most likely next. The downswing doesn‘t appear to be totally over, but we have arguably seen the greater part of it already. … I‘m still looking for clues to the bond markets. There, it had been a one-way ride. TLT though is having trouble declining further, and that means a brief upswing carrying over into stocks, is likely. Primarily tech would benefit, and the ever more negative real rates would put a floor beneath the feverish precious metals run. Make no mistake though, the tide in gold and silver has turned, and inflation expectations aren‘t as tame anymore. In this light, there‘s no point in sweating the commodities retracement of late. True, the rising dollar is taking some steam out of the CRB superbull, but that‘s only temporary – I‘m looking for the greenback to reverse to the downside once the debt ceiling drama reappears in the beginning of Dec. Then, the Treasury would also have to start issuing more (short-term) debt, which would put a damper on any upswing attempts. Meanwhile, inflation would keep at least as hot as it‘sx been recently, and the Fed policy mistake in letting the fire burn unattended, would be more broadly acknowledged. What a profitable constellation for precious metals, real and crypto assets! Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 is bidding its time – the shallow very short-term consolidation continues, with the bears slowly running out of time (for today). Credit Markets HYG, LQD and TLT – weakness anywhere you look continues, but LQD is hinting at a possible stabilization next. Unless that‘s more broadly followed in bonds, any S&P 500 upswing would remain a doubtful proposition. Gold, Silver and Miners Gold and silver were indeed just getting started – a relatively brief pause shouldn‘t be surprising. Any dips though remain to be bought. All in all, PMs are firing on all cylinders currently. Crude Oil Crude oil bulls keep defending the $80 level, with $78 serving as the next stop if need be. The consolidation starting late Oct would though resolve to the upside in my view – it‘s just a question of shortening time. Copper Copper participated in the commodities upswing – not too enthusiastically, not too weakly. The volume seems just right for base building before another red metal‘s move higher. Bitcoin and Ethereum Bitcoin and Ethereum are still consolidating, and the relatively tight price range keeps favoring the bulls. Summary S&P 500 is looking at a mildly positive day today, but the correction isn‘t probably over just yet. With most of the downside already in, I‘m looking for bullish spirits to very gradually return. Precious metals will be the star performers for the many days to come, followed by copper and then oil. Crypto better days are also lyiing ahead. All in all, inflation trades will keep doing better and better. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Will Evergrande Make Gold Grand?

Will Evergrande Make Gold Grand?

Arkadiusz Sieron Arkadiusz Sieron 12.11.2021 18:57
  Evergrande’s debt issues are a symptom of China’s deep structural problems. If the crisis spills over wider, gold may benefit, but we are still far from such a scenario. Beijing, we have a problem! Evergrande, one of China’s largest real estate developers and biggest companies in the world, is struggling to meet the interest payments on its debts. As the company has more than $300 billion worth of liabilities, its recent liquidity problems have sparked fears in the financial markets. They also triggered a wave of questions: will Evergrande become a Chinese Lehman Brothers? Is the Chinese economy going to collapse or stagnate? Will Evergrande make gold grand? The answer to the first question is: no, the possible default of Evergrande likely won’t cause a global contagion in the same way as Lehman Brothers did. Why? First of all, Lehman Brothers collapsed because of the run in the repo market and the following liquidity crisis. As the company was exposed to subprime assets, investors lost confidence and the bank lost its access to cheap credit. Lehman Brothers tried to sell its assets, which plunged the prices of a wide range of financial assets, putting other institutions into trouble. Unlike Lehman Brothers, Evergrande is not an investment bank but a real estate developer. It doesn’t have so many financial assets, and it’s not a key player in the repo market. The exposure of important global financial institutions to Evergrande is much smaller. What’s more, we haven’t seen a credit freeze yet, nor an endless wave of selling across almost all asset classes, which took place during the global financial crisis of 2007-2009. Given that the Lehman Brothers’ bankruptcy was ultimately positive for gold (although the price of the yellow metal declined initially during the phase of wide sell-offs), the fact that Evergrande probably doesn’t pose similar risks to the global economy could be disappointing for gold bulls. However, gold bulls could warmly welcome my answer to the second question: the case of Evergrande reveals deep and structural problems of China’s economy, namely its heavy reliance on debt and the real estate sector. As the chart below shows, the debt of the private non-financial sector has increased from about 145% of GDP after the Great Recession to 220% in the first quarter of 2021. So, China has experienced a massive increase in debt since the global financial crisis, reaching levels much higher than in the case of other economies. The rise in indebtedness allowed China to continue its economic expansion, but questions arose about the quality and sustainability of that growth. As Daniel Lacalle points out, The problem with Evergrande is that it is not an anecdote, but a symptom of a model based on leveraged growth and seeking to inflate GDP at any cost with ghost cities, unused infrastructure, and wild construction. Indeed, the levels and rates of growth of China’s private debt are similar to the countries that have experienced spectacular financial crises, such as Japan, Thailand, or Spain. But the significance of China’s real estate sector is much higher. According to the paper by Rogoff and Yang, the real-estate sector accounts for nearly 30% of China’s GDP. On the other hand, China has a relatively high savings rate, while debt is mostly of domestic nature. China’s financial ties to the world are not very strong, which limits the contagion risks. What is more, the Chinese government has acknowledged the problem of excessive debts in the private sector and started a few years ago making some efforts to curb it. The problems of Evergrande can be actually seen as the results of these deleveraging attempts. Therefore, I’m not sure whether China’s economy will collapse anytime soon, but its pace of growth is likely to slow down further. The growth model based on debt and investments (mainly in real estate) has clearly reached its limit. In other words, the property boom must end. Rogoff and Yang estimate that “a 20% fall in real estate activity could lead to a 5-10% fall in GDP”. Such growth slowdown and inevitable adjustments in China’s economy will have significant repercussions on the global economy, as – according to some research – China’s construction sector is now the most important sector for the global economy in terms of its impact on global GDP. In particular, the prices of commodities used in the construction sector may decline and the countries that export to China may suffer. Given that China was the engine of global growth for years, it will also slow down, and, with lower production, it’s possible that inflation will be higher. Finally, what do the problems of China’s real estate sector imply for the gold market? Well, in the short term, not so much. Gold is likely to remain under downward pressure resulting from the prospects of the Fed’s tightening cycle. However, if Evergrande’s problems spill over, affecting China’s economy or (a bit later) even the global economy, the situation may change. Other Chinese developers (such as Fantasia or Sinic) also have problems with debt payments, as investors are not willing to finance new issues of bonds. In such a scenario, the demand for gold as a safe-haven asset might increase, although investors have to remember that the initial rush could be into cash (the US dollar) rather than gold. Unless China’s problems pose a serious threat to the American economy, the appreciation of the greenback will likely counterweigh the gains from safe-haven inflows into gold. So far, financial markets have remained relatively undisturbed by the Evergrande case. Nevertheless, I will closely monitor any upcoming developments in China’s economy and their possible effects on the gold market. Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care.
Crude Oil Eyeing EIA Figures – “Yoyo-Trade” Exited After Hitting All Projected Targets!

Crude Oil Eyeing EIA Figures – “Yoyo-Trade” Exited After Hitting All Projected Targets!

Sebastian Bischeri Sebastian Bischeri 10.11.2021 17:11
  Is crude really set to break its highs again? Fundamental Analysis Crude oil prices reached their last highs on Wednesday before pulling back, initially supported by US crude stocks falling as shown by API figures, and afterwards cooled by contrary prospects from the U.S. Energy Information Administration (EIA). Meanwhile, our subscribers were exiting their last oil trade, after the black gold hit the second projected target at $83.40 (see technical chart). U.S. API Weekly Crude Oil Stock: Inventory levels of US crude oil, gasoline and distillates stocks, American Petroleum Institute (API) via Investing Regarding the API figures published Tuesday, the decline in crude inventories (with 2.485 million barrels versus 1.900 million barrels expected) implies greater demand and is normally bullish for crude prices (at least in theory). This was indeed the case yesterday, as those figures have supported crude prices in the first place. In the perspective of the figures to be published later today by the U.S. Energy Information Administration (EIA), and according to the median of analysts surveyed by Bloomberg, the market would expect an increase of 1.6 million barrels, so let’s see whether this figure will be confirmed. Chart – WTI Crude Oil (CLZ21) Futures (December contract, daily chart) In summary, with an oil market progressing (with some rallying limitations set by threats of the US administration to release some of its strategic crude reserves – to relieve the market by artificially increasing the supply) – there is currently no trade position justified from a risk-to-reward point of view. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
S&P 500: Inflation Fears May Push Stock Prices Lower

S&P 500: Inflation Fears May Push Stock Prices Lower

Paul Rejczak Paul Rejczak 10.11.2021 15:55
  Stocks’ short-term rally came to an end this week and the S&P 500 index entered a consolidation along the 4,700 level. Is this a topping pattern? The S&P 500 index lost 0.35% yesterday, as it fell below the 4,700 price mark following two-day-long consolidation along the Friday’s record high of 4,718.50. The recent rally was not broad-based and it was driven by a handful of tech stocks like MSFT, NVDA, TSLA. The market seems overbought in the short-term and most likely it’s trading within a topping pattern. Today we may see another consolidation or a profit taking action following worse than expected inflation data release (the CPI monthly number came at +0.9% vs. the expected +0.6%). The nearest important support level is at 4,650-4,675 and the next support level is at 4,600. On the other hand, the resistance level is at 4,700-4,720. The S&P 500 broke below its steep short-term upward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq Lost 0.7% on Tuesday Let’s take a look at the Nasdaq 100 chart. The technology index broke above the 16,000 level recently and it was trading at the new record high. The market accelerated parabolically above its short-term upward trend line. But yesterday it lost 0.7% and closed below that trend line. The resistance level remains at 16,400, and the short-term support level is at 16,000, among others, as we can see on the daily chart: Apple’s Further Consolidation and Microsoft’s Potential Topping Pattern Let’s take a look at the two biggest stocks in the S&P 500 index, AAPL and MSFT. Apple continues to trade within a consolidation along the $150 level and it is still well below the record highs, and the Microsoft is close to breaking below its over month-long upward trend line. So the tech “megacaps” may be turning lower, as we can see on their daily charts: Conclusion The broad stock market went slightly lower on Tuesday and we may see a downward continuation this morning. The main indices are expected to open 0.2-0.5% lower following worse (higher) than expected consumer inflation number release. It looks like a topping pattern and we may see a downward correction at some point. There may be a profit-taking action following quarterly earnings releases. Here’s the breakdown: The S&P 500 extended its uptrend last week, but since Friday it is trading within a short-term downtrend. But still no positions are justified from the risk/reward point of view. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Intraday Market Analysis – USD Seeks Consolidation

Intraday Market Analysis – USD Seeks Consolidation

John Benjamin John Benjamin 15.11.2021 08:53
USDJPY hits temporary resistance The Japanese yen pulled back after a larger-than-expected GDP contraction in Q3. The US dollar is looking to hold onto its gains after a rally above 114.00. Sentiment has recovered and a surge above 114.45 around the October peak would resume the uptrend. However, the current rebound may lack the strength to clear the supply zone right away. An overbought RSI has held the bullish fever back. A breach below 113.70 would lead to a deeper correction towards 112.80, which is a key level to keep the rebound relevant. EURCHF struggles for support The euro bounced higher after the bloc’s industrial production beat expectations in September. The RSI’s oversold situation on the daily chart has attracted bargain hunters’ attention around 1.0530, a demand area from May 2020. Price action had three failed attempts to lift offers at 1.0600, a sign of strong selling pressure to keep the downtrend going. A bullish breakout may trigger a runaway rally as sellers seek to exit a crowded short bet. A bearish one would send the single currency to 1.0490. UK 100 tests support The FTSE 100 edged lower after active job postings in the UK hit a record high. The index came under pressure at the psychological level of 7400. A combination of an overbought RSI and its bearish divergence suggests that the rally was losing momentum. Sentiment remains upbeat and a pullback could be an opportunity to get filled at a better price. Trend followers may be waiting to buy the dip near the first support at 7315. A deeper correction would send the price to 7255 along the 30-day moving average.
XAUUSD (Gold) And XAGUSD (Silver) - A Technical Look

Gold 'n Silver 'n CPI Oh My!

Mark Mead Baillie Mark Mead Baillie 15.11.2021 09:26
The Gold Update by Mark Mead Baillie --- 626th Edition --- Monte-Carlo --- 13 November 2021 (published each Saturday) --- www.deMeadville.com  Let's start with October's Consumer Price Index (CPI) as reported by the U.S. Bureau of Labor Statistics: its excitedly-disseminated reading was +0.9% (which annualized is a whopping +10.8%). "Oh, 'tis the worst in 30 years!", they say. "Oh, 'tis the worst in 40 years!", some say. We say: "C'est très exagéré." Why? Because Labor has established this level -- or higher -- three times prior during the 24 years of our maintaining the Economic Barometer: for September 2005 'twas +1.2%; for June 2008 'twas +1.1%; and recently for this past June 'twas (as is now) a like +0.9%. Here's that history: Such exaggerative reporting of this October's +0.9% CPI growth arguably does have merit, for 'tis a very concerning rate of inflation. However as Grandpa Hugh would encourage today's news desks : "Get it first, but FIRST, get it RIGHT!" as opposed to the current-day media mantra of "Fake it FIRST, but fake it as FACT!" 'Course there are other sources that find far greater inflation; however in sticking with Labor's "official" measure, glaringly missing from the subsequent reportage is that -- following those three prior inflationary pops -- came cooling over at least the few ensuing months. 'Tis per the rightmost column of "next" three-month CPI average growth in the below table: Again, ours is not to belittle the seriousness of October's +0.9% CPI rise; rather 'tis to simply show it in the context of historical fact. Please notify a media outlet near you. Seriousness, indeed. For of further practical import (on the assumption that neither do you eat, nor use petroleum-based products), October's Core-CPI growth of +0.6% has already been realized four times just in the prior 15 months. Critical concern there, and justifiably so given the price of Oil has risen from 39.82 at mid-year 2020 to 83.22 at October 2021's settle (+109%). For from the "That's Scary Dept." the cumulative rise in the full CPI across that same 16-month-to-date stint is only +7.3% ... solely by that metric, folks have been gettin' off easy despite higher petrol prices! Fortunately, Gold and Silver may be FINALLY gettin' off their respective butts via their inflation mitigative role. Which obviously points to their having so much farther up to go. Per our opening Gold Scoreboard, price settled out the week yesterday (Friday) at 1868, its second-best single-week performance thus far this year on both a points (+47.7) and percentage (+2.6%) basis. Thus comparatively, 'tis a fine leap forward for Gold. However as you ad nausea already know, even in accounting for its supply increase, Gold by StateSide M2 currency debasement "ought" today be 3986. As well is the ever-annoying fact of Gold first hitting the present 1868 level a decade ago on 19 August 2011 when the money supply was just 44% of what 'tis today, ($9.457 trillion vs. $21.343 trillion). "Got Gold?" And as for Sweet Sister Silver, 'twas her third best weekly performance year-to-date, albeit settling yesterday at 25.41 is a price first achieved 11 years ago on 04 November 2010. "Got Silver?" (Oh and from the "Gold Plays No Currency Favourites Dept." the Dollar recorded its fifth best up week of the year. "Got Bucks?" We'd rather Swiss Francs). Moreover, from our always revered "The Trend is Your Friend Dept." as we saw a week ago, Gold's weekly parabolic trend -- after an intolerably lengthy stint as Short with little net price decline -- did flip to Long. And as is the rule rather than the exception, price this past week continued higher. Which begs your question: "How much does price rise when this happens, mmb?" Bang on cue there, Squire. And the answer is: across the 43 prior Long weekly parabolic trends since 2001, the median increase in the price of Gold is +8.3%. Thus by that number, from Gold's trend flip price back at 1820, an +8.3% increase this time 'round would bring us to 1971. Modest perhaps by valuation expectations, but a start. Too, some of you may recall this sentence from our 02 October missive wherein we nixed our year's forecast high of 2401: "...The more likely scenario shall well be Gold just sloshing around into year-end, trading during Q4 between 1668-1849..." Fab to already be wrong there! For here are the weekly bars and parabolic trends from this time a year ago-to-date: Now in the midst of all this inflation trepidation came Dow Jones Newswires this past week with "The Economic Rebound From Covid-19 Was Easy. Now Comes the Hard Part." Makes sense given everything having been shutdown last year. But: how bona fide actually is "Rebound"? Let's look at corporate earnings, (now yer not gonna get this anywhere else, so pay attention): with but a week to run in Q3 Earnings Season, most of the S&P 500 constituents that report within this calendar timeframe have so done, and with fairly admirable results: 80% bettered their bottom lines, (or as we said a week ago "better have bettered" given the economic shutdown of last year). Yet here's the dirty little secret: many mid-tier and smaller companies have also reported, by our count 1,368 of 'em. And of that bunch, we found just 56% of them did better. That is a Big Red Flag given mid-to-small businesses drive the American economy. We doubt your money manager knows that number. In addition to the past week's inflation reports, lost in the shuffle were the Econ Baro metrics showing September's Wholesale Inventories as backing up, whilst November's University of Michigan Sentiment Survey fell to a 10-year low, the 66.8 level not seen since November 2011. 'Course the S&P loving bad news, its Index roared upward to finish the week at 4683, a mere 36 points below its all-time high. Together with the Baro, here's the year-over year picture: Now to some impressive precious metals' technicals via our two-panel graphic of Gold's daily bars from three months ago-to-date on the left and those for Silver on the right. "Impressive" as when the falling baby blue dots of trend consistency reverse course back up without having dropped to mid-chart, the buyers are clearly in charge: As for the 10-day Market Profiles for Gold (below left) and Silver (below right), life is good at the top: Good as well is Gold's buoyant positioning within its stack: The Gold StackGold's Value per Dollar Debasement, (from our opening "Scoreboard"): 3986Gold’s All-Time Intra-Day High: 2089 (07 August 2020)Gold’s All-Time Closing High: 2075 (06 August 2020)2021's High: 1963 (06 January)The Gateway to 2000: 1900+10-Session directional range: up to 1871 (from 1759) = +112 points or +6.4%Trading Resistance: none per the ProfileGold Currently: 1868, (expected daily trading range ["EDTR"]: 25 points)Trading Support: Profile notables are 1864 / 1827 / 1793The 300-Day Moving Average: 1822 and falling10-Session “volume-weighted” average price magnet: 1816The Final Frontier: 1800-1900The Northern Front: 1800-1750On Maneuvers: 1750-1579The Weekly Parabolic Price to flip Short: 16862021's Low: 1673 (08 March) The Floor: 1579-1466Le Sous-sol: Sub-1466The Support Shelf: 1454-1434Base Camp: 1377The 1360s Double-Top: 1369 in Apr '18 preceded by 1362 in Sep '17Neverland: The Whiny 1290sThe Box: 1280-1240 Next week brings 14 metrics into the Econ Baro; consensus expectations look for it to turn higher. To be sure, turning higher have been Gold and Silver as inflation their prices stir; and yet their levels now 10 years on are the same as they were; thus their doubling from here can well be a blur! Cheers! ...m... www.deMeadville.com www.TheGoldUpdate.com
MSFT, Johnson&Johnson and More Companies With Reports to be Released shortly

Weekly S&P500 ChartStorm - 14 November 2021

Marc Chandler Marc Chandler 15.11.2021 11:20
The S&P500 ChartStorm is a selection of 10 charts which I hand pick from around the web and post on Twitter. The purpose of this post is to add extra color and commentary around the charts. The charts focus on the S&P500 (US equities); and the various forces and factors that influence the outlook - with the aim of bringing insight and perspective. Hope you enjoy! p.s. if you haven’t already, subscribe (free) to receive the ChartStorm direct to your inbox, so you don’t miss out on any charts (you never know which one could change the whole perspective!) Subscribe Now 1. Vacciversary: Can you believe, an entire year has passed since the Pfizer vaccine announcement. Markets had a strong immediate reaction, and since then have chalked up some 34% in gains. Of course a bunch of other factors are also at play, and we also had delta along the way, but you have to think at some level if there were no vaccine that the ride in markets might have been a little rougher. Source: @LarryAdamRJ 2. Investor Movement Index: The IMX moved down slightly in October - this continues the pattern of movement downwards from the peak in optimism of a few months ago. This is typically not a healthy sign for sentiment indicators i.e. reaching an extreme and then leveling off. Source: TD Ameritrade 3. Investment Manager Index: On the other hand, the Markit IMI rebounded further in November with risk appetite surging to multi-month highs and expected returns reaching a new (albeit short history - newish survey) high. Source: @IHSMarkitPMI 4. Euphoriameter: Even my own Euphoriameter composite sentiment indicator has ticked higher so far in November as valuations and bullish surveyed sentiment remain high and volatility lulls back towards complacency. Source: @topdowncharts 5. Investor Sentiment vs Consumer Sentiment: But not all sentiment indicators are at the highs: consumer sentiment has been decidedly less optimistic. I mentioned in a recent video that the UoM consumer sentiment indicator was perhaps overstating the extent of the decline, but the other 2 consumer confidence indicators I track for the USA have also started to drop off recently. This has left quite the divergence between consumer sentiment and investor sentiment. A large part of this is probably down to the inflationary shock that is currently facing the global economy due to pandemic disruption to the global supply chain *and* unprecedented monetary + fiscal stimulus (remember: supply shortages/backlogs and the associated inflation surge don’t exist if there is no demand —> demand has been boosted by stimulus —> and stimulus helps stocks ——> gap explained). Source: @takis2910 6. Real Earnings Yield: Another effect of the surge in inflation has been a plunge in the real earnings yield: again this can be squared up by noting that stimulus has been a key driver of the inflation shock and a key driver of the surge in asset prices —> surging asset prices (stock prices) leads to a lower nominal earnings yield (again: gap explained). So is this a problem? Perhaps, but one way or the other it will probably be transitory (if you can read between the lines a little there!!). Source: @LizAnnSonders 7. Valuations: Valuations rising = risks rising... but then again it's a bull market, so POLR is higher (for now). n.b. “POLR” = path of least resistance: basic notion that in markets and life when a force is set in motion an object will not change its motion/trajectory unless another force acts on it... That means a bull market will carry on until something changes e.g. a crisis, monetary policy tightening, recession, regulations/politics, (or a combination of all of those!). Source: @mark_ungewitter 8. Household Financial Asset Allocations: We all know by now that equity allocations by households is at/near record highs. But one surprise: cash holdings have jumped and are apparently on par with debt (bonds etc) ...even as cash rates suck (and are even suckier when you consider the real interest rate). Probably an element of booking gains, stimulus payments, and precautionary savings. Recall though: the job of cash is preservation of capital (and optionality) vs generating returns, as such. Source: @MikeZaccardi 9. S&P500 Constituents Return Distribution: I thought this was interesting - especially the tails of the distribution - a lot of heavy lifting being done at the tails. But also that ”s” — tails (i.e. big dispersion between left and right tails). Source: @spglobal via @bernardiniv68 10. The Five Biggest Stocks: The bigness of the biggest stocks in the index is biggening more bigly. Serious though: the market is increasingly lop-sided, this means diversification may be diminishing as systematic risk will be increasingly driven by specific risk. Source: @biancoresearch Thanks for following, I appreciate your interest! !! BONUS CHART: Leveraged ETF trading indicator >> Click through to the ChartStorm Substack to see the bonus chart section https://chartstorm.substack.com/p/weekly-s-and-p500-chartstorm-14-november Follow us on: Substack https://topdowncharts.substack.com/ LinkedIn https://www.linkedin.com/company/topdown-charts Twitter http://www.twitter.com/topdowncharts
Will You Allow Gold to Break Your Heart?

Will You Allow Gold to Break Your Heart?

Finance Press Release Finance Press Release 15.11.2021 15:46
Infatuated with gold? Many people are, but love affairs with commodities (or stocks) are dangerous. They’ll steal your heart, then dump you.Our critics often forget that we’re focusing on the medium-term outlook in precious metals, not intraday price moves. They’ll say “Look, gold moved up today. You were wrong Radomski.” That’s nice, but where will it be one or two months from now?While gold, silver, and mining stocks’ optimism resurfaced with a vengeance last week, the trio have broken plenty of hearts since peaking in August 2020. Thus, will the current rallies end in marriage or be another mirage?To begin, while the HUI Index/gold ratio invalidated the breakdown below its rising support line, a similar development occurred in 2013 and the downtrend still resumed.On top of that, I marked (with the shaded red boxes below) just how similar the current price action is to 2013. And back then, after a sharp decline was followed by a small corrective upswing before the plunge, the ratio’s current behavior mirrors its historical counterpart. Furthermore, the end of the corrective upswing in 2013 occurred right before the gold price sunk to its previous lows (marked with red vertical dashed lines in the middle of the chart below). Thus, the ratio is already sending ominous warnings about the PMs’ future path.Even more revealing, the ratio is dangerously close to its 200-day moving average. And when a similar development occurred in 2013 – with the ratio rising slightly above its 200-day moving average (marked with the red vertical dashed line below) – a sharp reversal occurred, mining stocks materially underperformed, and the ratio plunged.Please see below:Likewise, while the GDX ETF rallied again last week, I warned previously that a corrective upswing to $35 was a possibility (the senior miners reached this level intraday on Nov. 12). However, with the GDX ETF’s RSI (Relative Strength Index) signaling overbought conditions, the air should come out of the balloon sooner rather than later.Please see below:To explain, the GDX ETF rallied on huge volume on Nov. 11 and there were only 4 cases in the recent past when we saw something like that after a visible short-term rally.In EACH of those 4 cases, GDX was after a sharp daily rally.In EACH of those 4 cases, GDX-based RSI indicator (upper part of the chart above) was trading close to 70.The rallies that immediately preceded these 4 cases:The July 27, 2020 session was immediately preceded by a 29-trading-day rally that took the GDX about 42% higher. It was 7 trading days before the final top (about 24% of time).The November 5, 2020 session was immediately preceded by a 5- trading -day rally that took the GDX about 14%-15% higher (the high-volume day / the top). It was 1 trading day before the final top (20% of time).The January 4, 2021 session was immediately preceded by a 26-trading-day rally that took the GDX about 17%-18% higher (the high-volume day / the top). It was 1 trading day before the final top (about 4% of time).The May 17, 2021 session was immediately preceded by a 52-trading-day rally that took the GDX about 30% higher. It was 7 trading days before the final top (about 13% of time).So, as you can see, these sessions have even more in common than it seemed at first sight. The sessions formed soon before the final tops (4% - 24% of time of the preceding rally before the final top), but the prices didn’t move much higher compared to how much they had already rallied before the high-volume sessions.Consequently, since the history tends to rhyme, we can expect the GDX ETF to move a bit higher here, but not significantly so, and we can expect this extra move higher to take between an additional 0 and 7 trading days (based on the Nov. 12 session, so as of Nov. 15 it’s between 0 and 6 trading days).Why 0 – 6 trading days (as of today – Nov. 15)? Because with the 4% timeline now in the rearview, the latter represents the updated 24% timeline based on the preceding rally (that took 30 trading days).Since it’s unlikely to take the mining stocks much higher, and the reversal could take place as soon as today (also in gold and silver price), I don’t think that making adjustments to the current short positions in the mining stocks is justified from the risk to reward point of view.Is there a meaningful resistance level that would be likely to trigger a decline in mining stocks? Yes! The GDX ETF is just below its 38.2% Fibonacci retracement level based on the August 2020 – September 2021 decline. The resistance is slightly above $35, so that’s when the final top could form.As for the GDXJ ETF, the gold junior miners have already hit their 38.2% Fibonacci retracement level (potential resistance) and the top may be upon us. Moreover, when the GDXJ ETF’s RSI increased above (or near) 70 in mid-2020 and in mid-2021, sharp drawdowns followed.As a result, those historical readings provided us with great shorting opportunities.In conclusion, investors have fallen in love with gold, silver, and mining stocks once again. However, when it comes time for matrimony, the precious metals often leave investors at the altar. As a result, while we remain bullish on gold, silver, and mining stocks’ long-term prospects, timing is important. And while the recent upswings may seem like the beginning of a new bull market, several reliable indicators beg to differ. Thus, caution is warranted, and new lows will likely materialize over the medium term.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Intraday Market Analysis – Gold Approaches Supply Zone

Intraday Market Analysis – Gold Approaches Supply Zone

John Benjamin John Benjamin 16.11.2021 09:28
XAUUSD tests trendlineGold continues on its way up as investors seek to hedge against inflationary pressures. The rally picked up steam after a break above the triple top at 1833. Price action is grinding up along a rising trendline.The bulls are pushing towards 1884, a major resistance where last June’s sell-off started. Strong selling pressure is possible in that supply zone as short-term buyers may take profit and reassess the directional bias.1855 on the trendline is the first support. A bearish breakout may trigger a correction to 1823.AUDUSD breaks above bearish channelThe Australian dollar softened after the RBA minutes reiterated that there will be no rate hike until 2024.The pair has found buying interest at the base of October’s bullish breakout (0.7280). A break above the falling channel indicates that sentiment could be turning around.0.7390 is a key resistance and its breach could prompt sellers to bail out. In turn, this would raise volatility in the process. Traders may then switch sides in anticipation of a reversal. An overbought RSI has so far limited the upside impetus.GER 40 rally gains tractionThe Dax 40 climbed after upbeat retail sales and industrial production in China lifted market sentiment.The index is seeking to consolidate its recent gains after it cleared the previous peak at 15990 which has now turned into support. Sentiment remains optimistic and 16300 would be the next step.An overbought RSI on the daily chart may temporarily put the brakes on the bullish fever. But a pullback may once again attract a ‘buying-the-dips’ crowd above 15990. A deeper correction may send the price towards 15770.
Technical Analysis - Support And Resistance - Terms You Should Know

Key event risk and front of mind this week...

Chris Weston Chris Weston 16.11.2021 12:15
UK jobless claims (Tuesday 18:00 AEDT) and Oct CPI (Wed 18:00 AEDT) New home prices (today at 12:30 AEDT), Retail sales, industrial production, fixed-asset investment, property investment (all today 13:00 aedt) Aussie Q3 wage data (Wed 11:30 AEDT) RBA gov Lowe speaks (Tues 13:30 AEDT) US retail sales (Wed 00:30 AEDT), Fed speeches all week with the highlight vice-chair Clarida (Sat 04:15 AEDT) The inflation debate is still the hottest ticket in town – it is promoting higher volatility (vol) in rates markets and bonds, with a small pick-up seen in FX volatility (vol). Equity markets are still, however, calm, with the VIX at 16.3% with falling demand to hedge potential drawdown. This divergence in implied vol across asset class remains a key talking point, but there is no doubt that the boat is not yet tipping with correlations among stocks almost at zero, and cyclical sectors (of the S&P500) still holding up well vs defensives. If the US high yield credit spread accelerated above 273bp above the US 10yr Treasury (currently 267bp), then again, I think equities would be a better sell.  Now this dynamic may change, especially if the debt ceiling comes into play in mid-Dec…but what are the signs to look for over a medium-term?  A higher vol regime will make conditions far more prosperous for equity short-sellers and change the dynamics in FX markets, with renewed downside demand for high beta FX (AUD, NZD, CAD, and MXN). The USD will turn from one being driven by pro-cyclical forces – i.e. relative economics and rate settings - to one sought for safe-haven demand, with the JPY also benefiting.  (Implied volatility benchmarks across asset class) Firstly, I would start with the rates markets – we can see a bit over 2 hikes priced into US fed funds future by the end-2022, with rates ‘lift off’ starting in July. I think if we priced in over 3 hikes in 2022 it could become more problematic for risk assets. Looking out the Eurodollar rates curve, we see a reasonably aggressive pace of hikes in 2022 and 2023, but then the pace markedly declines with barely anything priced for 2024 and 2025. In essence, the market sees hikes as front-loaded suggesting the Fed are in fact not dramatically behind the curve – a factor that is one of the core debates in macro.  We see an 89bp differential between the Eurodollar Dec 2025 and Dec 2022 futures contracts – if this moves back to say 140bp then this could be the market feeling that inflation is going to be a far greater problem and rate hikes are being more aggressively priced throughout the next four years. (Orange – US 5y5y forward rate, white – Fed’s long-term dot plot projection) Also, if the US 5y5y forward rate (the markets view on the ‘terminal’ fed funds rate – now 1.94%) pushed above 2.50% (the Fed’s long-term dot plot projection), again, I think this would be a trigger for far higher volatility and risk aversion.  A move to 2.50% won't play out overnight, if at all, and we’ll need to see real evidence that the US labour force participation rate is not going above 62%, while unit labour costs stay elevated and supply chains heal at a glacial pace. However, if the forward rate was eyeing 2.5% I think this could be a factor many strategists will point to for the VIX to sustain a move above 20%. The gold market is perhaps one of the more classic signs of inflationary concerns – this is a play on US ‘real’ (adjusted for inflation expectations) rates though, where the combination of a better economy in Q4, record negative US real rates and rising inflation is one the gold bulls will seek out precious metals. The Fed may need to promote a move higher in real rates, but the knock-on effect is they risk the stock market finding sellers – notably in growth stocks. A downside break of -2% in 5yr US real Treasury’s could be the trigger for gold to push into and above $1900.  Many debate the linkage between inflation expectations and the real economy. I’m not sure it matters when people are feeling the effects for themselves, and much has been made of the recent NFIB small business survey and Friday’s University of Michigan consumer sentiment survey, which hit the lowest levels since August 2011.  Clearly inflation is not popular and is increasingly the key political issue – I’d argue if real rates break to new lows this could accelerate inflation hedges, while a move through 2.7% in US 5y5y inflation swaps (currently 2.55%) would also play into the idea that perhaps the Fed, at the very least, need to radically reduce the pace of QE in the December FOMC meeting.  Clearly, the US Nov CPI (released 11 Dec) is going to be a big event for markets to digest and the signs are price pressures will continue to build from the current 6.2% YoY pace.  Crude and gasoline also play a key role in shaping sentiment – Senate Majority Leader Schumer has called on President Biden to release an element of the US’s Strategic Petroleum Reserves (SPR). This is a factor that has been talked up since OPEC rejected the US’s calls to increase output by more than 400k barrels. However, the introduction of Schumer into the mix just adds fuel to the fire and this may weigh on crude. So, a few indictors I am watching that could spur the market into a belief the Fed are genuinely behind the curve – I’d argue the market isn’t there yet, but if the factors I mention don’t show evidence of dissipating then we could see forward rates move to levels that could highlight the Fed need to act far more intently – that is where risk dynamics could markedly change.
The Top 5 Companies Added to Our Stock Market Watchlist this Quarter

The Top 5 Companies Added to Our Stock Market Watchlist this Quarter

Invest Macro Invest Macro 16.11.2021 12:10
https://investmacro.com/2021/11/the-top-5-companies-added-to-our-stock-market-watchlist-this-quarter/ Body: By InvestMacro The fourth quarter of 2021 is approximately halfway over and we wanted to highlight some of the top companies that have been analyzed by our QuantStock system so far. The QuantStock system is an algorithm that examines each company’s fundamental metrics, earnings trends and overall strength trends to pinpoint quality companies. We use it as a stock market ideas generator and to update our stock watchlist every quarter. However, be aware the QuantStock system does not take into consideration the stock price so one must compare each idea with their current stock prices. Many studies are consistently showing overvalued markets and that has to be taken into consideration with any stock market idea. As with all investment ideas, past performance does not guarantee future results. Here we go with 5 of our Top Stocks halfway through Quarter 4 of 2021: Gilead Sciences Inc. Health Care, Large Cap, 4.29% Dividend, Our Grade = A Gilead Sciences Inc. (NASDAQ: GILD) is first up and is a company engaged in developing innovative therapies for life-threatening diseases. Its medicine portfolio includes treatment for conditions ranging from HIV and hepatitis to coronavirus and cardiovascular disorders. If we talk about its financial performance, the bio-pharmaceutical company recently crushed expectations for the third quarter. It posted adjusted earnings of $2.65 per share on revenue of $7.42 billion for the quarter ended September 30. The results easily beat the consensus forecast of $1.76 per share for earnings and $6.29 billion for revenue. If we look at its key financial metrics, Gilead stock is currently trading around $67.48 against its 52-week range of $56.56 – $73.34. Moreover, its P/E value is 11.55, while the company’s total market value is just over $84 billion.   US Steel Materials, Small Cap, 0.77% Dividend, Our Grade = A- United States Steel Corporation (NYSE: X), founded in 1901, is one of the leading steel producers in the U.S. The strong demand for steel helped the company post better-than-expected financial results for the third quarter. United States Steel reported adjusted earnings of $5.36 per share for the three months ended September 30, beating expectations of $4.85 per share. Quarterly revenue of $5.96 billion also surpassed the consensus forecast of $5.79 billion. If we look at the recent price movement, United States Steel stock has gained more than 50 percent value so far in 2021. The 52-week range of the stock is $10.72 – $30.57, while the total market value of the company is approx. $7 billion.   Seagate Technology Information Technology, Medium Cap, 3.18% Dividend, Our Grade = A- Seagate Technology Holdings plc (NASDAQ: STX) is one of the world’s biggest hard disk drives (HDDs) makers. It still generates a large portion of its revenue by selling traditional HDDs. The company last month announced better-than-expected financial results for its fiscal first quarter, driven by solid demand from cloud data center clients. Seagate reported adjusted earnings of $2.35 per share on revenue of $3.12 billion for the three months ended October 1, while analysts were looking for earnings of $2.21 per share on revenue of $3.11 billion. The impressive financial performance drove Seagate stock higher in recent weeks. Seagate stock is now up nearly 80 percent on a year-to-date basis.   Synchrony Financial Financials, Medium Cap, 1.68% Dividend, Our Grade = A- Synchrony Financial (NYSE: SYF) has vast experience in the financial sector. It is one of the biggest credit card issuers in the U.S., working with hundreds of retailers to support their credit card plans. The company last month announced a solid profit for the third quarter. Synchrony reported earnings of $2 per share, significantly higher than 52 cents per share in the comparable period of 2020 and better than the consensus forecast of $1.52 per share. If we see its recent price trend, Synchrony has grown its value at a decent pace so far in 2021. The company’s share price has increased about 47 percent on a year-to-date basis. The 52-week range of the stock is $29.32 – $52.49, while its P/E ratio stands at 7.10.   Lazard Ltd Financials, Small Cap, 3.98% Dividend, Our Grade = A- Lazard Ltd (NYSE: LAZ) specializes in financial advisory and asset management services. It mainly advises clients on mergers and acquisitions (M&A), capital structure, and restructuring plans. It has advised on some of the biggest and most complicated M&A deals of the last century. If we look at its financial performance, Lazard posted mixed results for the third quarter. Its earnings of 98 cents per share exceeded the expectations of 95 cents per share. However, the quarterly revenue of $702 million missed analysts’ average estimate of $715 million. Lazard stock traded mostly lower following the results. Nevertheless, the company’s share price is still up nearly 15 percent on a year-to-date basis. -------------------------------------------------------------------------------------------------- By InvestMacro – Be sure to join our stock market newsletter to get our updates and to see more top companies. All information, stock ideas and opinions on this website are for general informational purposes only and do not constitute investment advice.
Biden Signs a Bill to Revive Infrastructure… and Gold!

Biden Signs a Bill to Revive Infrastructure… and Gold!

Arkadiusz Sieron Arkadiusz Sieron 16.11.2021 14:13
Gold rallied thanks to the changed narrative on inflation, and Biden’s infrastructure plan can only add to the inflationary pressure. Huge price moves ahead? I have a short quiz for you! What the government should do to decrease inflation that reached the highest level in 30 years? A) Decrease its expenditure to make room for the Fed to hike the federal funds rate. B) Press the US central bank to tighten its monetary policy. C) Deregulate the markets and lower taxes to boost the supply side of the economy. D) Introduce a huge infrastructure plan that will multiply spending on energy, raw materials, and inputs in general. Please guess which option the US government chose. Yes, the worst possible. Exam failed! At the beginning of November, Congress passed a bipartisan infrastructure bill. And President Biden signed it on Monday (November 15, 2021). To be clear, I’m not claiming that America doesn’t need any investment in infrastructure. Perhaps it needs it, and perhaps it’s a better idea than social spending on unemployment benefits that discourage work. I don’t want to argue about the adequacy of large government infrastructure projects, although government spending generally fails to stimulate genuine economic growth and governments rarely outperform the private sector in effectiveness. My point is that $1.2 trillion infrastructure spending is coming at the worst possible moment. The US economy is facing supply shortages and high inflation caused by surging demand, which choked the ports and factories. In short, too much money is chasing too few goods, and policymakers decided to add additional money into the already blocked supply chains! I have no words of admiration for the intellectual abilities of the members of Congress and the White House! Indeed, the spending plan does not have to be inflationary if financed purely by taxes and borrowing. However, the Fed will likely monetize at least part of the newly issued federal debt, and you know, to build or repair infrastructure, workers are needed, and steel, and concrete, and energy. The infrastructure spending, thus, will add pressure to the ongoing energy crisis and high producer price inflation, not to mention the shortage of workers. Implications for Gold What does the passing of the infrastructure bill imply for the gold market? Well, it should be supportive of the yellow metal. First, it will increase the fiscal deficits by additional billions of dollars (the Congressional Budget Office estimates that the bill will enlarge the deficits by $256 billion). Second, government spending will add to the inflationary pressure, which gold should also welcome. After all, gold recalled last week that it is a hedge against high and accelerating inflation. As the chart below shows, gold not only jumped above the key level of $1,800, but it even managed to cross $1,850 on renewed inflation worries. The infrastructure bill was probably discounted by the traders, so its impact on the precious metals market should be limited. However, generally, all news that could intensify inflationary fears should be supportive of the yellow metal. You see, the narrative has changed. So far, the thinking was that higher inflation implies faster tapering and interest rates hikes and, thus, lower gold prices. This is why gold was waiting on the sidelines for the past several months despite high inflation. Investors also believed that inflation would be transitory. However, the recent CPI report forced the markets to embrace the fact that inflation could be more persistent. What’s more, tapering of quantitative easing started, which erased some downward pressure on gold. Moreover, despite the slowdown in the pace of asset purchases, the Fed will maintain its accommodative stance and stay behind the curve. So, at the moment, the reasoning is that high inflation implies elevated fears, which is good for gold. I have always believed that gold’s more bullish reaction to accelerating inflation was a matter of time. It’s possible that this time has just come. Having said that, investors should remember that market narratives can change quickly. At some point, the Fed will probably step in and send some hawkish signals, which could calm investors and pull some of them out of the gold market. My second concern is that gold could have reacted not to accelerating inflation, but rather to the plunge in the real interest rates. As the chart below shows, the yields on 10-year TIPS have dropped to -1.17, a level very close to the August bottom. When something reaches the bottom, it should rebound later. And if real interest rates start to rally, then gold could struggle again. However, I’ll stop complaining now and allow the bulls to celebrate the long-awaited breakout. It’s an interesting development compared to the last months, that’s for sure! If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
The Elephant in the Room

The Elephant in the Room

Monica Kingsley Monica Kingsley 16.11.2021 15:42
S&P 500 is starting to run into a setback even if VIX doesn‘t reveal that fully. Credit markets going from weakness to weakness spells more short-term woes for stocks – a shallow downswing that feels (and is) a trading range before the surge to new ATHs continues, is likely to materialize in the second half of Nov. We may be in its opening stages – as written yesterday: (…) Can stocks still continue rallying? They look to be setting up for one more downleg of the immediately predecing magnitude, which means not a huge setback. The medium-term path of least resistance remains up – the Fed is still printing a huge amount of money on a monthly basis, and it remains questionable how far in tapering plans execution they would actually get – I see the risks to the real economy coupled with persistently high inflation as rising since the 2Q 2022 (if not since Mar already, but most pronounced in 2H 2022). Stocks are still set for a good Dec and beyond performance. The elephant in the room is (the absence of) fresh debt issuance lifting up the dollar, making it like rising yields more. Not only that these are failing to push value higher, but the tech resilience highlights the defensive nature of S&P 500 performance. Crucially though, precious metals are seeing through the (misleading dollar strength) fog, and are sharply rising regardless. Make no mistake, with the taper reaction, we have seen what I had been expecting (or even better given that I prefer reasonably conservative stance without drumming up expectations either way) – I had been telling you that the hardest times for the metals are before taper. And the magnitude and pace of their upswing casts a verdict on the Fed‘s (likely in)ability to follow through with the taper execution, let alone initiate the rate raising cycle without being laughed off the stage as markets force these regardless of the central planners. The galloping inflation expectations are sending a very clear message: (…) if you look at the great white metal‘s performance, it‘s the result of inflation coming back to the fore as the Fed itself is now admitting to high inflation rates through the mid-2022, putting blame on supply chain bottlenecks. Oh, sure. The real trouble is that inflation expectations are starting to get anchored – people are expecting these rates to be not going away any time soon. Precious metals are going to do great… Copper is awakening too, and commodities including oil would be doing marvels. TLT downswings would be less and less conducive to growth, so if you‘re still heavily in tech, I would start eyeing more value. Let me add the Russell 2000 and emerging markets to the well performing medium-term mix. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bulls didn‘t make it too far before running into another (mild, again I say) setback – so far, a sideways one. Credit Markets Credit markets renewed their march lower, and unless they turn, the S&P 500 upswings would remain on shaky ground (if and when they materialize). Gold, Silver and Miners Gold and silver remain on a tear, and even for the breather to unfold, it takes quite an effort. The bears clearly can‘t hope for a trend change. Crude Oil Crude oil bulls keep defending the $80 level, with $78 serving as the next stop if need be – these consecutive lower knots keep favoring the bulls, just when the right catalyst arrives. Whether that takes one or two days or more, is irrelevant – it will happen. Copper Copper ran into an unexpected setback, which however doesn‘t change the outlook thanks to its relatively low volume. I‘m still looking for much higher red metal‘s prices. Bitcoin and Ethereum Bitcoin and Ethereum are seeing an emerging crack in the dam that doesn‘t tie too well to developments elsewhere. The bulls should step in, otherwise this yellow flag risks turning into a red one. Summary S&P 500 bulls are now holding only the medium-term upper hand as the rally is entering a consolidation phase. Anyway, this trading range would be followed by fresh ATHs, which would power stocks even higher in early 2022. Precious metals have quite some catching up to do, and the long post Aug 2020 consolidation is over. Copper, base metals, oil and agrifoods are likely to keep doing great as inflation expectations show that inflation truly hasn‘t been tamed in the least. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Bitcoin, a battle for freedom

Bitcoin, a battle for freedom

Korbinian Koller Korbinian Koller 17.11.2021 08:01
We find ourselves ensued in various battles. Environmentally, economically, and from a human perspective. As much as it is questionable if coal and oil, centralized money, and wars (attacks on ourselves) hold a prosperous future, change is typically avoided. There have been moments in history where rapid change happened. Most often introduced by a charismatic human being with a compelling principle at a defining moment when a change was needed. S&P 500 Index versus BTC in US-Dollar, Monthly Chart, bitcoin an answer to crisis? S&P 500 Index versus Bitcoin in US-Dollar, Monthly chart as of November 16th, 2021. The bitcoin idea was born as a response to the crash of 2008. In its principles, diametrical to fiat currencies. Bitcoin is decentralized, limited, deflationary and digital. There is no historical event where increased money printing has resolved economic turmoil. And yet, we have not come up with a better solution, or at least we have not implemented it yet. The chart above shows how shortly after the crash of 2008, the first transaction ever sent on the bitcoin blockchain was completed in January 2009.Coincidence? It took some time until the cryptocurrency’s pseudonymous creator Satoshi Nakamoto found traction with his idea reflected in bitcoin’s price rise. Still, it has not just caught up but outperformed the market by a stunning margin. BTC in US-Dollar, Monthly Chart, don’t underestimate powerful ideas: Bitcoin versus gold and silver in US-Dollar, Monthly chart as of November 16th, 2021. Covid provided like a steroid a means to illustrate many shortcomings in a magnified way. The chart above shows that bitcoin speculation was an answer to where many find a more prosperous future compared to precious metals. In addition to fundamentals and technical, the underlying idea and hope for a transitory future got traction when people were most afraid.   BTC in US-Dollar, Monthly Chart, sitting through turmoil with ease: Bitcoin in US-Dollar, Monthly chart as of November 16th, 2021. Dissecting markets like this in all their shades and facets is necessary for discovering underlying currents, motivation, and sustainability of trends. In bitcoins case, the found strength of application, beliefs, and principles inherent in bitcoin itself and its traders allows for sitting more easily through its volatility swings. Once the mind grasps reason, it tolerates easier, otherwise hardships to trade a volatile vehicle like bitcoin. With a battle ensured on this magnitude and for an expected long duration, one can accept deep retracements in a more tranquil fashion. The monthly chart above shows that bitcoin might face one of those quick dips that hodlers accept, knowing that the battle isn’t over yet. Bitcoin, a battle for freedom: Mills are grinding slowly. Change typically takes time, and those holding the reign over financial power will certainly not surrender such summoned energies lightly. While this world certainly needs a more adaptive behavior of humanity both for its wellbeing and the planet itself, it is unlikely that a shift, if at all, will be swift. This means that bitcoin is a continued struggle to establish itself. And this will result in continued high volatility for the years to come. As such, it will remain an excellent opportunity for the individual investor. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting.
Intraday Market Analysis – USD Pushes Higher

Intraday Market Analysis – USD Pushes Higher

John Benjamin John Benjamin 17.11.2021 09:08
EURUSD lacks support The US dollar inched higher after October’s retail sales beat expectations. There has been a lack of interest in the single currency following its fall below the daily support at 1.1530. The divergence between the 20 and 30-hour moving averages indicates an acceleration in the sell-off. The bears are targeting the demand zone around 1.1200 from last July. The RSI’s oversold situation may prompt momentum traders to cover. Though a rebound is likely to be capped by 1.1370 and sellers would be eager to sell into strength. GBPJPY attempts to rebound The sterling recouped losses after Britain’s unemployment rate dropped to 4.3%. On the daily chart, the pair saw support near the 61.8% (152.60) Fibonacci retracement of the October rally. A bullish RSI divergence was a sign that the bearish pressure was fading. A break above 153.60 could be an attempt to turn the mood around. The initial surge may need more support after the RSI shot into the overbought area. Should the pound stay above 152.35-152.60, a rebound would lift it towards 155.20. NAS 100 tests peak The Nasdaq 100 bounces back supported by robust tech earnings. The index showed exhaustion after a four-week-long bull run. A combination of an overbought RSI and its bearish divergence made traders cautious in buying into high valuations. A break below the psychological level of 16000 has triggered a wave of profit-taking. A deeper retreat below 16020 would send the index to the previous peak at 15700 which coincides with the 30-day moving average. On the upside, A rally above 16400 would resume the uptrend.
Intraday Market Analysis – GBP To Test Resistance

Intraday Market Analysis – GBP To Test Resistance

John Benjamin John Benjamin 18.11.2021 10:37
GBPUSD bounces higher The pound inched higher after the UK’s inflation soared to 4.2% in October. Sentiment remains pessimistic after a botched rebound from the demand zone at 1.3420. However, an oversold RSI has attracted some buying interest. Its bullish divergence suggests a slowdown in the sell-off, prompting momentum traders to take profit and look for the next breakout. The sterling may bounce back if the bulls succeed in keeping it above 1.3380. 1.3530 would be the first hurdle. Otherwise, a bearish breakout would send the pair to 1.3200. USDCAD reaches new high The Canadian dollar fell back after the annual inflation rate matched the consensus. Following the greenback’s rally from the demand zone at 1.2300, a bullish MA cross on the daily chart suggests that the current rebound is picking up steam. As a sign of strong commitment, buyers were eager to keep price action above 1.2480 when the RSI flirted with the oversold area. A break above 1.2600 may trigger an extended rally towards the daily resistance at 1.2760. 1.2540 is fresh support in case of a pullback. USOIL falls through key support WTI crude tumbled after OPEC warned of supply surplus. The rally has stalled after the bulls struggled to lift offers at 85.00. On the daily timeframe, the RSI’s double top in the overbought area indicates an overextension. A break below 79.00 has led to profit-taking and put the long side under pressure. 81.60 is now a fresh resistance from the latest sell-off. The buy-side will need to achieve new highs before they could bring in momentum interest. Failing that, 75.00 is a key floor to keep price action afloat.
The Top 5 Companies Added to Our Stock Market Watchlist this Quarter

The Top 5 Companies Added to Our Stock Market Watchlist this Quarter

Invest Macro Invest Macro 18.11.2021 10:56
By InvestMacro The fourth quarter of 2021 is approximately halfway over and we wanted to highlight some of the top companies that have been analyzed by our QuantStock system so far. The QuantStock system is an algorithm that examines each company’s fundamental metrics, earnings trends and overall strength trends to pinpoint quality companies. We use it as a stock market ideas generator and to update our stock watchlist every quarter. However, be aware the QuantStock system does not take into consideration the stock price so one must compare each idea with their current stock prices. Many studies are consistently showing overvalued markets and that has to be taken into consideration with any stock market idea. As with all investment ideas, past performance does not guarantee future results. Here we go with 5 of our Top Stocks halfway through Quarter 4 of 2021: Gilead Sciences Inc. Health Care, Large Cap, 4.29% Dividend, Our Grade = A Gilead Sciences Inc. (NASDAQ: GILD) is first up and is a company engaged in developing innovative therapies for life-threatening diseases. Its medicine portfolio includes treatment for conditions ranging from HIV and hepatitis to coronavirus and cardiovascular disorders. If we talk about its financial performance, the bio-pharmaceutical company recently crushed expectations for the third quarter. It posted adjusted earnings of $2.65 per share on revenue of $7.42 billion for the quarter ended September 30. The results easily beat the consensus forecast of $1.76 per share for earnings and $6.29 billion for revenue. If we look at its key financial metrics, Gilead stock is currently trading around $67.48 against its 52-week range of $56.56 – $73.34. Moreover, its P/E value is 11.55, while the company’s total market value is just over $84 billion. US Steel Materials, Small Cap, 0.77% Dividend, Our Grade = A- Free Reports: Get Our Free Metatrader 4 Indicators - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis. United States Steel Corporation (NYSE: X), founded in 1901, is one of the leading steel producers in the U.S. The strong demand for steel helped the company post better-than-expected financial results for the third quarter. United States Steel reported adjusted earnings of $5.36 per share for the three months ended September 30, beating expectations of $4.85 per share. Quarterly revenue of $5.96 billion also surpassed the consensus forecast of $5.79 billion. If we look at the recent price movement, United States Steel stock has gained more than 50 percent value so far in 2021. The 52-week range of the stock is $10.72 – $30.57, while the total market value of the company is approx. $7 billion. Seagate Technology Information Technology, Medium Cap, 3.18% Dividend, Our Grade = A- Seagate Technology Holdings plc (NASDAQ: STX) is one of the world’s biggest hard disk drives (HDDs) makers. It still generates a large portion of its revenue by selling traditional HDDs. The company last month announced better-than-expected financial results for its fiscal first quarter, driven by solid demand from cloud data center clients. Seagate reported adjusted earnings of $2.35 per share on revenue of $3.12 billion for the three months ended October 1, while analysts were looking for earnings of $2.21 per share on revenue of $3.11 billion. The impressive financial performance drove Seagate stock higher in recent weeks. Seagate stock is now up nearly 80 percent on a year-to-date basis. Synchrony Financial Financials, Medium Cap, 1.68% Dividend, Our Grade = A- Synchrony Financial (NYSE: SYF) has vast experience in the financial sector. It is one of the biggest credit card issuers in the U.S., working with hundreds of retailers to support their credit card plans. The company last month announced a solid profit for the third quarter. Synchrony reported earnings of $2 per share, significantly higher than 52 cents per share in the comparable period of 2020 and better than the consensus forecast of $1.52 per share. If we see its recent price trend, Synchrony has grown its value at a decent pace so far in 2021. The company’s share price has increased about 47 percent on a year-to-date basis. The 52-week range of the stock is $29.32 – $52.49, while its P/E ratio stands at 7.10. Lazard Ltd Financials, Small Cap, 3.98% Dividend, Our Grade = A- Lazard Ltd (NYSE: LAZ) specializes in financial advisory and asset management services. It mainly advises clients on mergers and acquisitions (M&A), capital structure, and restructuring plans. It has advised on some of the biggest and most complicated M&A deals of the last century. If we look at its financial performance, Lazard posted mixed results for the third quarter. Its earnings of 98 cents per share exceeded the expectations of 95 cents per share. However, the quarterly revenue of $702 million missed analysts’ average estimate of $715 million. Lazard stock traded mostly lower following the results. Nevertheless, the company’s share price is still up nearly 15 percent on a year-to-date basis. By InvestMacro – Be sure to join our stock market newsletter to get our updates and to see more top companies. All information, stock ideas and opinions on this website are for general informational purposes only and do not constitute investment advice.
Investors Expect High Inflation. Golden Inquisition Ahead?

Investors Expect High Inflation. Golden Inquisition Ahead?

Arkadiusz Sieron Arkadiusz Sieron 18.11.2021 15:33
  Inflation expectations reached a record high. Is gold preparing a counterattack to punish gold bears? In a , nobody expects the Spanish inquisition. In the current marketplace, everyone expects high inflation. As the chart below shows, the inflation expectations embedded in US Treasury yields have recently risen to the highest level since the series began in 2003. Houston, we have a problem, an unidentified object is flying to the moon! The 5-year breakeven inflation rate, which is the difference between the yields on ordinary Treasury bonds and inflation-protected Treasuries with the same maturity, soared to 2.76% on Monday. Meanwhile, the 10-year breakeven inflation rate surged to 3.17%. The numbers show the Treasury market’s measure of average CPI annual inflation rates over five and ten years, respectively. The chart is devastating for the Fed’s reputation if there’s anything left. You probably remember how the US central bank calmed investors, saying that we shouldn’t worry about inflation because inflation expectations are well-anchored. No, they don’t! Of course, the current inflation expectations oscillate around 3%, so they indicate that the bond market is anticipating a pullback in the inflation rate from its current level. Nevertheless, the average of 3% over ten or even just five years would be much above the Fed’s target of 2% and would be detrimental for savers in particular, and the US economy in general. I’ve already shown you market-based inflation expectations, which are relatively relaxed, but please take a look at the chart below, which displays the consumer expectations measured by the New York Fed’s surveys. As one can see, the median inflation expectations at the one-year horizon jumped 0.4 percentage point in October, to 5.7%. So much for the inflation expectations remaining under control!   Implications for Gold Surging inflation expectations are positive for the gold market. They should lower real interest rates and strengthen inflationary worries. This is because the destabilized inflation expectations may erode the confidence in the US dollar and boost inflation in the future. So, gold could gain as both an inflation hedge and a safe haven. And, importantly, the enlightened Fed is likely to remain well behind the curve in setting its monetary policy. This is even more probable if President Biden appoints Lael Brainard as the new Fed Chair. She is considered a dove, even more dovish than Powell, so if Brainard replaces him, investors should expect to see interest rates staying lower for longer. So, inflation expectations and actual inflation could go even higher. Hence, the dovish Fed combined with high inflation (and a slowdown in GDP growth) creates an excellent environment for gold to continue its rally. After all, the yellow metal has broken out after several months of consolidation (as the chart below shows), so the near future seems to be brighter. There are, of course, some threats for gold, as risks are always present. If the US dollar continues to strengthen and the real interests rebound, gold may struggle. But, after the recent change, the sentiment seems to remain positive. Anyway, I would like to return to the market-based inflation expectations and the famous Monty Python sketch. With an inflation rate of 3%, which is the number indicated by the bond market, the capital will halve in value in just 24 years! So, maybe it would be a too-far-reaching analogy, but Monty Python inquisitors wanted to use a rack to torture heretics by slowly increasing the strain on their limbs and causing excruciating physical pain (luckily, they were not the most effective inquisitors!). Meanwhile, inflation hits savers by slowly decreasing the purchasing power of money and causing significant financial pain. With the inflation rate at about 6%, hedging against inflation is a no-brainer. It’s a matter of financial self-defense! You don’t have to use gold for this purpose – but you definitely can. After several disappointing months, and the lack of gold’s reaction to inflation, something changed, and gold has managed to break out above $1,800. We will see how it goes on. I will feel more confident about the strength of the recent rally when gold rises above $1,900. If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
Like Clockwork

Like Clockwork

Monica Kingsley Monica Kingsley 18.11.2021 15:44
S&P 500 took a little breather, and sideways trading with a bullish slant goes on unchecked. Credit markets have partially turned, and I‘m looking for some risk appetite returning to HYG and VTV. Any modest improvement in market breadth would thus underpin stocks, and not even my narrow overnight downswing target of yesterday may be triggered. The banking sector is internally strong and resilient, which makes the bulls the more favored party than if judged by looking at the index price action only. Consumer discretionaries outperformance of staples confirms that too. When it comes to gold and silver: (…) Faced with the dog and pony debt ceiling show, precious metals dips are being bought – and relatively swiftly. What I‘m still looking for to kick in to a greater degree than resilience to selling attempts, is the commodities upswing that would help base metals and energy higher. These bull runs are far from over – it ain‘t frothy at the moment as the comparison of several oil stocks reveals. Precious metals dip has been swiftly reversed, and it‘s just oil and copper that can cause short-term wrinkles. Both downswings look as seriously overdone, and more of a reaction to resilient dollar than anything else. In this light, gold and silver surge is presaging renewed commodities run, which is waiting for the greenback to roll over (first). And that looks tied to fresh debt issuance and debt ceiling resolution – Dec is almost knocking on the door while inflation expectations are about to remain very elevated. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bulls continue holding the upper hand, and yesterday‘s rising volume isn‘t a problem in the least. Dips remain to be bought, and it‘s all a question of entry point and holding period. Credit Markets Credit markets stabilization is approaching, and yields don‘t look to be holding S&P 500, Russell 2000 or emerging markets down for too long. Especially the EEM performance highlights upcoming dollar woes. Gold, Silver and Miners Gold and silver decline was promptly reversed, and the lower volume isn‘t an immediate problem – it merely warns of a little more, mostly sideways consolidation before another push higher. PMs bull run is on! Crude Oil Crude oil bulls could very well be capitulating here – yesterday‘s downswing was exaggerated any way examined. Better days in oil are closer than generally appreciated. Copper The copper setback got likewise extended, and the underperformance of both CRB Index and other base metals is a warning sign. One that I‘m not taking as seriously – the red metal is likely to reverse higher, and start performing along the lines of other commodities. Bitcoin and Ethereum Bitcoin and Ethereum bears may be slowing down here, but I wouldn‘t be surprised if the selling wasn‘t yet over. We‘re pausing at the moment, and in no way topping out. Summary S&P 500 bulls keep banishing the shallow correction risks, leveling the very short-term playing field. The credit markets non-confirmation is probably in its latter stages, and stock market internals favor the slow grind higher to continue. Precious metals remain my top pick over the coming weeks, and these would be followed by commodities once the dollar truly stalls. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Intraday Market Analysis – USD In Pullback Mode

Intraday Market Analysis – USD In Pullback Mode

John Benjamin John Benjamin 19.11.2021 09:15
USDCHF seeks support The US dollar stalled after weekly jobless claims came in higher than expected. The pair’s attempt above the daily resistance at 0.9310 suggests that the bulls may have gained the upper hand. Intraday buyers’ profit-taking led by the RSI’s overbought situation has caused a limited pullback. Buyers may see dips as an opportunity to get in at a discount. Bids could be around the resistance-turned-support at 0.9235. 0.9330 is a fresh resistance. And its breach may trigger an extended rally towards last April’s peak at 0.9450. NZDUSD bounces off demand area The New Zealand dollar inches higher as traders are positioning for an RBNZ rate hike next week. From the daily chart’s perspective, the pair has bounced off the demand zone near the psychological level of 0.7000. A bullish RSI divergence indicates a slowdown in the bearish momentum, a sign that sentiment could be turning around. An oversold RSI has attracted buying interest. A rally above 0.7060 would prompt sellers to cover, paving the way for a recovery towards 0.7175. A break below 0.6980 may drive the kiwi to 0.6900. US30 struggles to rally back The Dow Jones is under pressure as investors fear that inflation could choke off economic recovery. The index has been struggling to reclaim the landmark 36000, which coincides with the 20-day moving average. The faded rebound suggests exhaustion after a month-long breakneck rally. The RSI’s double-dip into the oversold area has attracted buying interest. Though buyers may stay cautious unless the first resistance at 36180 is lifted. On the downside, the previous peak at 35500 has turned into the next support.
Weekly S&P500 ChartStorm - 21 November 2021

Weekly S&P500 ChartStorm - 21 November 2021

Callum Thomas Callum Thomas 22.11.2021 09:40
The S&P500 ChartStorm is a selection of 10 charts which I hand pick from around the web and post on Twitter. The purpose of this post is to add extra color and commentary around the charts. The charts focus on the S&P500 (US equities); and the various forces and factors that influence the outlook - with the aim of bringing insight and perspective. Hope you enjoy! p.s. if you haven’t already, subscribe (free) to receive the ChartStorm direct to your inbox, so you don’t miss out on any charts (you never know which one could change the whole perspective!) Subscribe Now 1. S&P 500 Seasonality Chart: It’s everyone’s favorite chart updated again (maybe for the last time this year?). The S&P500 has been sticking to the seasonality script through most of this year… makes me think about Murphy’s Law tho - maybe the market will start to improvise and go off-script? Either way, the next few weeks seasonally look like sideways action. Source: @topdowncharts 2. Volatility Seasonality: A twist on the previous chart — same concept, but this time with implied volatility. I find it interesting to note that the VIX has actually been a bit lower than usual for this time of the year (and trending up short-term…). One last VIX spike before year-end? Source: @topdowncharts 3. Stockmarket Statistics: What happens after the market goes up a “crazy overheated” 20%+ over the course of a year? More Gains. Historically most of the time if the market closed up 20%+ for the year, the next year was also positive (84% of the time). As of writing, the market is up some 27% YTD (albeit, this year ain't over yet!). Source: @RyanDetrick 4. Bad Breadth? Fully 1/3rd of stocks are in a downtrend. (defined as trading below their respective 200dma) Will this bearish divergence be a problem? Source: Index Indicators 5. GAARP vs GAAAP: On this metric, growth stocks are the most expensive ever vs value stocks. So it begs the question… Growth at a reasonable price? or Growth at *any* price? (but then again, who defines what "reasonable" is in a market like this!) Source: @TheOneDave 6. Low Energy: Energy stocks are attempting to turn the corner vs the rest of the market, but face high hurdles from the raging tech bull market, rise of ESG investing and regulatory/political hurdles, not to mention commodity market volatility. What comes down must go up? (or something else?) Source: @dissectmarkets 7. Buybacks Back: New all-time high for buybacks in Q3 (with 95% reported). Always makes me wonder these trends — you see the majority of buybacks occurring near market peaks… i.e. when valuations are extreme expensive. The opposite of value investing: buy more when its expensive, buy less when it’s cheap — seems like upside-down logic to me, but then again I am a simple man. Source: @hsilverb 8. Payout Ratio: As an interesting follow-on to the ATH in buybacks/dividends, it’s interesting to note that the dividend payout ratio is actually below average... Scope to return more cash to investors? Source: @ChrisDagnes 9. Buffett Indicator: Looks like this indicator has reached a permanently higher plateau! (kidding of course - echoing the famous last words of Irving Fisher back in 1929) Interesting stat to note: to make this indicator as cheap as where it got to during the financial crisis lows the market would need to fall over 70%. Definitely not a prediction, but interesting nonetheless. I would say I have multiple quibbles with this indicator, I think CAPE and ERP are better valuation metrics, but that’s a topic for another day. Source: @KailashConcepts 10. Buffett the Compounder: Speaking of Buffett, a lesson in compounding. Source: @DividendGrowth Thanks for following, I appreciate your interest! !! BONUS CHART: total stockmarket leverage >> Click through to the ChartStorm Substack to see the bonus chart section https://chartstorm.substack.com/p/weekly-s-and-p500-chartstorm-21-november                   Follow us on: Substack https://topdowncharts.substack.com/ LinkedIn https://www.linkedin.com/company/topdown-charts Twitter http://www.twitter.com/topdowncharts
Global Markets In Times Of Affection Of Situation In Eastern Europe

On the radar this week...

Chris Weston Chris Weston 22.11.2021 08:18
Powell vs Brainard Fed chair nomination  Covid trends and restrictions in Europe US core PCE inflation (Thursday at 2 am AEDT) RBNZ and Riksbank central bank meeting US cash markets shut Thursday for Thanksgiving (Pepperstone US equity indices still open)  Eurozone PMI (Tuesday 20:00aedt) – ECB speakers in play BoE speakers to drive the GBP – will they cast doubt on a December hike? With Covid risks on the rise in Europe and ultimately restrictions being implemented we’ve seen renewed selling interest in the EUR, and the oil-exporting currencies (NOK, CAD, MXN). Certainly, the NOK was the weakest G10 currency last week, and GBPNOK has been a great long position – a pair to trade this week, but consider it is up for 9 straight days and has appreciated 5.2% since late October.  I questioned last week if the divergence in EURCHF plays out, and the break of 1.05 negates that, suggesting staying short this cross for now as the CHF is still a preferred safe-haven.  EURUSD has been in free-fall EURUSD has been in free-fall and will likely get the lion’s share of attention from clients looking for a play on growing restrictions and tensions across Europe. The pair has lost 3.5% since rejecting the 50-day MA on 28 Oct and has consistently been printing lower lows since May – predominantly driven by central bank divergence and a growing premium of 2-year US Treasuries over German 2yr - with the spread blowing out from 78bp to 128bp, in favour of USD. For momentum, trend followers and tactical traders, short EUR remains attractive here.  It will be interesting to see if we see any pickup in shorting activity in EU equities – notably the GER40, with the German govt warning of lockdowns ahead. A market at all-time highs (like the GER40) is a tough one to short, but if this starts to roll over then I’d go along for a day trade. There is a raft of ECB speakers also to focus on, notably with President Lagarde due to speak on Friday.  Playing restrictions through crude While we can play crude moves in the FX, equity and ETF space, outright shorts in crude have been looking compelling. Although we see SpotCrude now sitting on huge horizontal support and a break here brings in the 50-day MA. Of course, as oil and gasoline fall, the prospect of a release of the SPR (Strategic Petroleum Reserves) diminishes, however, the Biden administration could use this move lower move to their advantage and capitalize to keep the pressure on.  (SpotCrude daily) A rise in restrictions also means market neutral strategies (long/short) should continue to work, and long tech/short energy has been popular. We can express this in our ETF complex, with the XOP ETF (oil and gas explorers) -8.1% last week and that works as a high beta short leg. Long IUSG (growth) or the QQQ ETF against this would be a good proxy on the opposing leg. In fact, looking at the moves in Apple, Nvidia, Alphabet and Amazon, and we can see these ‘safe haven’ stocks are working well again, as is Tesla although for different reasons.  Stocks for the trend-followers For the ‘buy strong’ crowd, I have scanned our equity universe for names above both their 5- and 20-day MA AND at 52-week highs. Pull up a daily chart of any of these names - they should nearly always start at the bottom left, and end top right. Playing the RBNZ meeting tactically By way of event risks, the RBNZ meeting (Wed 12:00 AEDT) is one of the more interesting events to focus on. Will the RBNZ raise by 25bp or 50bp? That is the question, and of 19 calls from economists (surveyed by Bloomberg) we see 17 calling for a 25bp hike – yet the markets are fully pricing not just a 25bp hike but a 43% chance of 50bp – from a very simplistic perceptive if the RBNZ hike by ‘just’ 25bp, choosing a path of least regret, then we could see a quick 25- to 30-pip move lower in the NZD. The focus then turns to the outlook and whether the 8 further hikes priced over the coming 12 months seems to be one shared by the RBNZ.  Traders have been keen to play NZD strength via AUD, as it is more a relative play and doesn’t carry the risk on/off vibe, which you get with the USD and JPY. I’d be using strength in AUDNZD as an opportunity to initiate shorts, especially with views that RBNZ Gov Orr could talk up the possibility of inter-meeting rate hikes.  GBP to be guided by the BoE Chief The GBP is always a play clients gravitate to, with GBPUSD and EURGBP always two of the most actively traded instruments in our universe. A 15bp hike is priced for the 16 Dec BoE meeting after last week’s UK employment and inflation data, but consider we also get UK PMI data (Tuesday 20:30 AEDT), and arguably, more importantly, speeches from BoE Governor Bailey and chief economist Huw Pill – perhaps this time around expectations of hikes can be better guided – although, a bit of uncertainty into central bank meetings is very pre-2008 and makes things a little spicy/interesting.  (BoE speakers this week) GBPUSD 1-week implied volatility is hardly screaming movement, and at 6.5% sits at the 10th percentile of its 12-month range. The implied move is close to 130pips, so the range at this juncture (with a 68.2% level of confidence), although I multiple this by 0.8 to get closer to the options breakeven rate. So at this stage, 100 pips (higher or lower) is the sort of move the street is looking for over the coming five days, putting a range of 1.3557 to 1.3349 in play – one for the mean reversion players. Personally, I would let it run a bit as that volatility seems a little low, and a break of 1.3400 could see volatility pick up. I’d certainly be looking for downside if that gave way.  Happy trading.
We Might Say Next FED Moves Are Not Obvious As Some Factors Differentiate Circumstances

Silver, shrugging off attacks

Korbinian Koller Korbinian Koller 20.11.2021 13:32
Weekly chart, Silver in US-Dollar, strong along gold: Silver in US-Dollar, weekly chart as of November 20th, 2021. The weekly chart illustrates price behavior over the last 15 months. Silver prices are trading near the center of the sideways range. Gold in US-Dollar, weekly chart, rumors shrugged off: Gold in US-Dollar, weekly chart as of November 20th, 2021. The weekly chart of gold isn’t much different from where prices stand. In short, there is no evidence that gold has lost its luster. Otherwise, we would see silver trading in a relationship much lower. Rumors are just that – rumors! Silver is shrugging them off. Silver in US-Dollar, quarterly chart, room to go: Silver in US-Dollar, quarterly chart as of November 20th, 2021. A historical review with a quarterly chart over the last eighteen years reveals that silver prices can sustain extreme extensions from the mean (yellow line) for extended periods. Using the extreme of the second quarter in 2011 as a projective measurement (orange vertical line) for an upcoming target would provide for a price target more than 10% above all-time highs at US$56. In addition, the chart shows that we find ourselves in a strong quarter so far, which is in alignment with cyclical probabilities. Silver in US-Dollar, weekly chart, prepping the play: Silver in US-Dollar, weekly chart as of November 20th, 2021. Trade setup Let us return to the weekly time frame for a possible low-risk entry scenario with this target in mind.We find a supply zone based on fractal transactional volume analysis near the price of US$24.11 and US$22.65. Both attractive entry zones for excellent risk/reward-ratio plays.   Phase 1 drilling program at Guigui discovered not only the largest intrusive ever found in the district, but it’s the first mineralized skarn ever seen in Guigui! Silver, shrugging off attacks: It will not be rumors, doubts, and speculations that will be the catalyst for silvers’ success or failure. It isn’t a question of “if,” but just a question of “when” we will see the next massive price advance in this precious metal. The odds are stacked too much in favor of a continued price movement up that the long-term investor should let doubts allow for diverging from a splendid opportunity to partake in wealth preservation and a very profitable way to participate in a chance rarely presented this prominent. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can also subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|November 20th, 2021|Tags: Crack-Up-Boom, Gold, Gold bullish, Gold/Silver-Ratio, inflation, low risk, Silver, silver bull, Silver Chartbook, silversqueeze, technical analysis, time frame, trading principles|0 Comments About the Author: Korbinian Koller Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
COT Speculators drop British pound sterling bets to lowest level in 76-weeks

COT Speculators drop British pound sterling bets to lowest level in 76-weeks

Invest Macro Invest Macro 22.11.2021 11:46
November 20, 2021 By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday November 16th 2021 and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar. Highlighting the COT Currency data this week is the second straight decline in British pound sterling speculative positions. The pound sterling speculator contracts dropped sharply for the second consecutive week this week and have now fallen by a total of -46,646 contracts over just this two-week time period. These declines have pushed the overall speculative position into a bearish sentiment level of -31,599 contracts which marks the lowest standing of the past seventy-six weeks, dating back to June 2nd of 2020. The GBPUSD currency pair has been under pressure since the middle of October and fallen from around 1.3800 exchange rate to just above the 1.3435 level currently, a drop of almost 400 pips. Data Snapshot of Forex Market Traders | Columns Legend Nov-16-2021 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index EUR 705,698 86 -3,826 34 -26,985 68 30,811 25 JPY 252,897 91 -93,126 10 115,758 94 -22,632 1 GBP 207,099 43 -31,599 51 41,182 54 -9,583 36 MXN 170,102 33 -47,655 2 46,127 99 1,528 50 AUD 166,688 57 -61,153 27 69,858 71 -8,705 31 CAD 148,955 30 8,709 62 -26,717 35 18,008 74 USD Index 59,387 88 34,908 86 -40,455 7 5,547 77 RUB 52,624 58 22,625 67 -23,936 31 1,311 70 CHF 49,320 27 -8,889 54 18,767 52 -9,878 34 NZD 42,945 30 13,965 95 -15,521 6 1,556 70 BRL 31,767 32 -15,698 48 15,743 54 -45 66 Bitcoin 13,648 78 -1,478 69 357 0 1,121 23   US Dollar Index Futures: The US Dollar Index large speculator standing this week was a net position of 34,908 contracts in the data reported through Tuesday. This was a weekly lowering of -540 contracts from the previous week which had a total of 35,448 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 86.0 percent. The commercials are Bearish-Extreme with a score of 7.4 percent and the small traders (not shown in chart) are Bullish with a score of 77.2 percent. Free Reports: Top 5 Companies Added to Our Stock Watch List this Quarter - Here are the Stock Symbols that stood out so far in the fourth quarter of 2021. Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.   US DOLLAR INDEX Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 80.8 3.4 12.8 – Percent of Open Interest Shorts: 22.0 71.5 3.5 – Net Position: 34,908 -40,455 5,547 – Gross Longs: 47,959 2,000 7,621 – Gross Shorts: 13,051 42,455 2,074 – Long to Short Ratio: 3.7 to 1 0.0 to 1 3.7 to 1 NET POSITION TREND:       – COT Index Score (3 Year Range Pct): 86.0 7.4 77.2 – COT Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 5.0 -2.7 -13.6   Euro Currency Futures: The Euro Currency large speculator standing this week was a net position of -3,826 contracts in the data reported through Tuesday. This was a weekly reduction of -7,599 contracts from the previous week which had a total of 3,773 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 33.8 percent. The commercials are Bullish with a score of 68.1 percent and the small traders (not shown in chart) are Bearish with a score of 25.4 percent. EURO Currency Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 28.1 57.3 12.8 – Percent of Open Interest Shorts: 28.6 61.1 8.4 – Net Position: -3,826 -26,985 30,811 – Gross Longs: 198,181 404,266 90,261 – Gross Shorts: 202,007 431,251 59,450 – Long to Short Ratio: 1.0 to 1 0.9 to 1 1.5 to 1 NET POSITION TREND:       – COT Index Score (3 Year Range Pct): 33.8 68.1 25.4 – COT Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 5.7 -5.2 -0.0   British Pound Sterling Futures: The British Pound Sterling large speculator standing this week was a net position of -31,599 contracts in the data reported through Tuesday. This was a weekly lowering of -19,506 contracts from the previous week which had a total of -12,093 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 51.2 percent. The commercials are Bullish with a score of 54.0 percent and the small traders (not shown in chart) are Bearish with a score of 35.8 percent. BRITISH POUND Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 24.4 61.4 11.3 – Percent of Open Interest Shorts: 39.6 41.5 15.9 – Net Position: -31,599 41,182 -9,583 – Gross Longs: 50,443 127,197 23,322 – Gross Shorts: 82,042 86,015 32,905 – Long to Short Ratio: 0.6 to 1 1.5 to 1 0.7 to 1 NET POSITION TREND:       – COT Index Score (3 Year Range Pct): 51.2 54.0 35.8 – COT Index Reading (3 Year Range): Bullish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -8.3 9.2 -8.1   Japanese Yen Futures: The Japanese Yen large speculator standing this week was a net position of -93,126 contracts in the data reported through Tuesday. This was a weekly increase of 12,225 contracts from the previous week which had a total of -105,351 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 10.4 percent. The commercials are Bullish-Extreme with a score of 93.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 0.8 percent. JAPANESE YEN Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 9.7 80.5 8.6 – Percent of Open Interest Shorts: 46.6 34.7 17.6 – Net Position: -93,126 115,758 -22,632 – Gross Longs: 24,635 203,468 21,790 – Gross Shorts: 117,761 87,710 44,422 – Long to Short Ratio: 0.2 to 1 2.3 to 1 0.5 to 1 NET POSITION TREND:       – COT Index Score (3 Year Range Pct): 10.4 93.7 0.8 – COT Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -18.4 15.5 -4.1   Swiss Franc Futures: The Swiss Franc large speculator standing this week was a net position of -8,889 contracts in the data reported through Tuesday. This was a weekly rise of 8,154 contracts from the previous week which had a total of -17,043 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 54.4 percent. The commercials are Bullish with a score of 52.0 percent and the small traders (not shown in chart) are Bearish with a score of 34.3 percent. SWISS FRANC Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 11.2 64.2 24.4 – Percent of Open Interest Shorts: 29.2 26.1 44.5 – Net Position: -8,889 18,767 -9,878 – Gross Longs: 5,502 31,663 12,048 – Gross Shorts: 14,391 12,896 21,926 – Long to Short Ratio: 0.4 to 1 2.5 to 1 0.5 to 1 NET POSITION TREND:       – COT Index Score (3 Year Range Pct): 54.4 52.0 34.3 – COT Index Reading (3 Year Range): Bullish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 11.9 -12.2 11.8   Canadian Dollar Futures: The Canadian Dollar large speculator standing this week was a net position of 8,709 contracts in the data reported through Tuesday. This was a weekly rise of 3,605 contracts from the previous week which had a total of 5,104 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 62.3 percent. The commercials are Bearish with a score of 34.9 percent and the small traders (not shown in chart) are Bullish with a score of 74.0 percent. CANADIAN DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.6 42.1 27.1 – Percent of Open Interest Shorts: 23.8 60.0 15.0 – Net Position: 8,709 -26,717 18,008 – Gross Longs: 44,147 62,689 40,389 – Gross Shorts: 35,438 89,406 22,381 – Long to Short Ratio: 1.2 to 1 0.7 to 1 1.8 to 1 NET POSITION TREND:       – COT Index Score (3 Year Range Pct): 62.3 34.9 74.0 – COT Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 29.6 -26.4 10.0   Australian Dollar Futures: The Australian Dollar large speculator standing this week was a net position of -61,153 contracts in the data reported through Tuesday. This was a weekly gain of 2,271 contracts from the previous week which had a total of -63,424 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 27.1 percent. The commercials are Bullish with a score of 71.0 percent and the small traders (not shown in chart) are Bearish with a score of 31.2 percent. AUSTRALIAN DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 18.5 67.2 11.8 – Percent of Open Interest Shorts: 55.1 25.3 17.1 – Net Position: -61,153 69,858 -8,705 – Gross Longs: 30,760 112,044 19,744 – Gross Shorts: 91,913 42,186 28,449 – Long to Short Ratio: 0.3 to 1 2.7 to 1 0.7 to 1 NET POSITION TREND:       – COT Index Score (3 Year Range Pct): 27.1 71.0 31.2 – COT Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 27.1 -29.0 24.4   New Zealand Dollar Futures: The New Zealand Dollar large speculator standing this week was a net position of 13,965 contracts in the data reported through Tuesday. This was a weekly boost of 1,083 contracts from the previous week which had a total of 12,882 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 94.7 percent. The commercials are Bearish-Extreme with a score of 6.5 percent and the small traders (not shown in chart) are Bullish with a score of 69.7 percent. NEW ZEALAND DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 61.4 24.1 11.5 – Percent of Open Interest Shorts: 28.9 60.2 7.8 – Net Position: 13,965 -15,521 1,556 – Gross Longs: 26,388 10,349 4,923 – Gross Shorts: 12,423 25,870 3,367 – Long to Short Ratio: 2.1 to 1 0.4 to 1 1.5 to 1 NET POSITION TREND:       – COT Index Score (3 Year Range Pct): 94.7 6.5 69.7 – COT Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 9.9 -11.8 19.8   Mexican Peso Futures: The Mexican Peso large speculator standing this week was a net position of -47,655 contracts in the data reported through Tuesday. This was a weekly gain of 752 contracts from the previous week which had a total of -48,407 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 1.5 percent. The commercials are Bullish-Extreme with a score of 98.8 percent and the small traders (not shown in chart) are Bearish with a score of 49.5 percent. MEXICAN PESO Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 41.1 55.3 3.1 – Percent of Open Interest Shorts: 69.2 28.2 2.2 – Net Position: -47,655 46,127 1,528 – Gross Longs: 69,984 94,074 5,245 – Gross Shorts: 117,639 47,947 3,717 – Long to Short Ratio: 0.6 to 1 2.0 to 1 1.4 to 1 NET POSITION TREND:       – COT Index Score (3 Year Range Pct): 1.5 98.8 49.5 – COT Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -5.5 5.6 -1.5   Brazilian Real Futures: The Brazilian Real large speculator standing this week was a net position of -15,698 contracts in the data reported through Tuesday. This was a weekly decrease of -240 contracts from the previous week which had a total of -15,458 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 47.6 percent. The commercials are Bullish with a score of 54.4 percent and the small traders (not shown in chart) are Bullish with a score of 66.3 percent. BRAZIL REAL Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 26.7 64.6 8.0 – Percent of Open Interest Shorts: 76.1 15.0 8.2 – Net Position: -15,698 15,743 -45 – Gross Longs: 8,468 20,507 2,545 – Gross Shorts: 24,166 4,764 2,590 – Long to Short Ratio: 0.4 to 1 4.3 to 1 1.0 to 1 NET POSITION TREND:       – COT Index Score (3 Year Range Pct): 47.6 54.4 66.3 – COT Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -17.9 19.3 -12.9   Russian Ruble Futures: The Russian Ruble large speculator standing this week was a net position of 22,625 contracts in the data reported through Tuesday. This was a weekly advance of 1,922 contracts from the previous week which had a total of 20,703 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 66.9 percent. The commercials are Bearish with a score of 30.7 percent and the small traders (not shown in chart) are Bullish with a score of 70.2 percent. RUSSIAN RUBLE Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 57.7 37.7 4.6 – Percent of Open Interest Shorts: 14.7 83.2 2.1 – Net Position: 22,625 -23,936 1,311 – Gross Longs: 30,357 19,849 2,418 – Gross Shorts: 7,732 43,785 1,107 – Long to Short Ratio: 3.9 to 1 0.5 to 1 2.2 to 1 NET POSITION TREND:       – COT Index Score (3 Year Range Pct): 66.9 30.7 70.2 – COT Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 5.2 -3.3 -20.9   Bitcoin Futures: The Bitcoin large speculator standing this week was a net position of -1,478 contracts in the data reported through Tuesday. This was a weekly reduction of -11 contracts from the previous week which had a total of -1,467 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 68.7 percent. The commercials are Bullish with a score of 71.4 percent and the small traders (not shown in chart) are Bearish with a score of 22.9 percent. BITCOIN Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 63.4 5.0 14.7 – Percent of Open Interest Shorts: 74.2 2.4 6.5 – Net Position: -1,478 357 1,121 – Gross Longs: 8,649 678 2,008 – Gross Shorts: 10,127 321 887 – Long to Short Ratio: 0.9 to 1 2.1 to 1 2.3 to 1 NET POSITION TREND:       – COT Index Score (3 Year Range Pct): 68.7 71.4 22.9 – COT Index Reading (3 Year Range): Bullish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 0.9 -20.8 4.5 Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
Like the Latest Bond Flick, the US Dollar Has No Time to Die

Like the Latest Bond Flick, the US Dollar Has No Time to Die

Przemysław Radomski Przemysław Radomski 22.11.2021 15:11
While the dollar is on a tear, precious metal stocks have gotten away with it lately. But how long will their resistance last? The USD Index (USDX) After the USD Index’s negative response to the ECB’s monetary policy meeting on Oct. 28, I warned on Oct. 29 that dollar bears were unlikely to celebrate for much longer. I wrote: Based on the rather random comment during the conference, the traders panicked and bought the EUR/USD, which triggered declines in the USD Index (after all, the EUR/USD is the largest component of the USDX). Was the breakout to new 2021 lows invalidated? No. The true breakout was above the late-March highs (the August highs also served as a support level, but the March high is more important here) and it wasn’t invalidated. What was the follow-up action? At the moment of writing these words, the USDX is up and trading at about 93.52, which is just 0.07 below the August high in terms of the closing prices. Consequently, it could easily be the case that the USD Index ends today’s session (and the week) back above this level. You’ve probably heard the saying that time is more important than price. It’s the end of the month, so let’s check what happened in the case of previous turns of the month; that’s where we usually see major price turnarounds. I marked the short-term turnarounds close to the turns of the month with horizontal dashed blue lines, and it appears that, in the recent past, there was practically always some sort of a turnaround close to the end of the month. Consequently, seeing a turnaround (and a bottom) in the USD index now would be perfectly normal. And with the USD Index making quick work of 94, 95, and now 96, the greenback’s rally continues to gain steam. What’s more, the USD Index also surged above its late 2020 resistance and 98 should be the next bullish milestone. More importantly, however, gold, silver, and mining stocks are sensing that something is amiss. For example, while they largely ignored the USD Index’s recent ascent, their negative correlations resurfaced last week (on a very short-term basis, so far, but still). Moreover, while the precious metals’ recent rallies were likely euro-weakness-driven and not USD Index-strength-driven, the dollar basket’s uprising should elicit more pain for gold, silver, and mining stocks over the medium term. To explain, I wrote on Nov. 17: The euro recently declined and the prices of silver and gold recently rallied shortly after dovish comments from the eurozone. Namely, while the expansionary nature of fiscal and monetary decisions in the U.S. might be after its peak (with the infrastructure bill signed even despite high inflation numbers), the eurozone is far from limiting its expansionary (i.e., inflationary) policies, and it was just made clear recently. That was bearish for the euro and bullish for the gold price – as more money (euros in this case) would be chasing the same amount of physical gold. The point here is that it might have been the decline in the value of the European currency that caused gold to rally, and it had little to do with what happened in the USD Index. Don’t get me wrong, most of the time, the gold-USD link is stable and negative. In some cases, gold shows strength or weakness by refusing to move in tune (and precisely: again) with U.S. dollar’s movement. But in this case, it seems that it’s not about the U.S. dollar at all (or mostly), but rather about what happened in the Eurozone and euro recently. As a result, with the USD Index likely to take the lead in the coming months, the precious metals should suffer along the way. For context, the USD Index is approaching overbought territory and a short-term decline to ~95 isn’t out of the question. However, it’s more of a possibility than a given. Moreover, the greenback’s medium-term outlook remains robust, and any short-term pullback is likely a corrective downswing within a medium-term uptrend. Circling back to the euro, I’ve been warning for months that the Euro Index was materially overvalued and that a sharp re-rating would likely unfold. I wrote previously: The next temporary stop could be ~1.1500 (the March 2020 highs, then likely lower). For context, the EUR/USD accounts for nearly 58% of the movement of the USD Index, and that’s why the euro’s behavior is so important. And after the Euro Index sunk to a new 2021 low last week, the European currency has officially fallen off a cliff. To that point, after breaking below the declining support line of its monthly channel, a drawdown to ~111 is likely next in line (which is signaled by the breakdown below its bearish head & shoulders pattern). The Euro Index is near oversold territory and a short-term bounce may ensue, but the bearish medium-term implications remain intact. Please see below: Adding to our confidence (don’t get me wrong, there are no certainties in any market; it’s just that the bullish narrative for the USDX is even more bullish in my view), the USD Index often sizzles in the summer sun and major USDX rallies often start during the middle of the year. Summertime spikes have been mainstays on the USD Index’s historical record and in 2004, 2005, 2008, 2011, 2014 and 2018 a retest of the lows (or close to them) occurred before the USD Index began its upward flights (which is exactly what’s happened this time around). Furthermore, profound rallies (marked by the red vertical dashed lines below) followed in 2008, 2011 and 2014. With the current situation mirroring the latter, a small consolidation on the long-term chart is exactly what occurred before the USD Index surged in 2014. Likewise, the USD Index recently bottomed near its 50-week moving average; an identical development occurred in 2014. More importantly, though, with bottoms in the precious metals market often occurring when gold trades in unison with the USD Index (after ceasing to respond to the USD’s rallies with declines), we’re still far away from that milestone in terms of both price and duration. Again, the recent move higher in the USD Index doesn’t necessarily apply in the case of the above rule, as it was not the strength of the USD but weakness in the euro that has driven it. Likewise, with the USD Index now approaching its long-term rising support line (which is now resistance), a rally above the upward sloping black line below would invalidate the prior breakdown and support a move back above 100. However, with the dollar basket’s weekly RSI (Relative Strength Index) now above 70, a short-term consolidation may ensue. Conversely, please note that the recent medium-term rally has been calmer than any major upswing witnessed over the last 20 years where the USD Index’s RSI has hit 70. I marked the recent rally in the RSI with an orange rectangle and I did the same with the second-least and third-least volatile of the medium-term upswings. The sharp rallies in 2008 and 2014 were of much larger magnitudes. And in those historical analogies, the USD Index continued its surge for some time without suffering any material corrections. As a result, the short-term outlook is more of a coin flip. However, the medium-term outlook remains profoundly bullish, and gold, silver, and mining stocks may resent the USD Index’s forthcoming uprising. Just as the USD Index took a breather before its massive rally in 2014, it seems that we saw the same recently. This means that predicting higher gold prices (or the ones of silver) here is likely not a good idea. Continuing the theme, the eye in the sky doesn’t lie. And with the USDX’s long-term breakout clearly visible, the wind still remains at the dollar’s back. Please see below: The bottom line? With my initial 2021 target of 94.5 already hit, the ~98 target is likely to be reached over the medium term, and the USDX will likely exceed 100 at some point over the medium or long term. Keep in mind, though: we’re not bullish on the greenback because of the U.S.’ absolute outperformance. It’s because the region is fundamentally outperforming the Eurozone, the EUR/USD accounts for nearly 58% of the movement of the USD Index, and the relative performance is what really matters. In conclusion, while the USD Index’s 2021 surge caught the consensus by surprise, I’ve been sounding the bullish alarm for many months. And with more strength likely to materialize over the medium term, the ‘death of the dollar’ narrative has been grossly over-exaggerated. Moreover, while gold, silver, and mining stocks recently ignored the greenback’s fervor, history implies that their relative strength won’t last. As a result, more downside will likely confront the precious metals over the next few months. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
More And More Universities Are Including Metavers In Their Education Program

Fixed income market: the week ahead

Althea Spinozzi Althea Spinozzi 22.11.2021 14:23
Summary:  This week it's all about a surge of Covid-19 cases and inflation. The debt ceiling issue will keep long-term yields in check in the United States while spurring volatility in money markets. Lack of collateral and new lockdown measures are also compressing spreads in the Euro area. Yet, policymakers' engagement to the idea of less accommodative monetary policies on both sides of the Atlantic indicates that yields will not remain rangebound for long. Once the lid is lifted, inflationary pressures will push yields higher. Therefore, it's safe to assume a continuous bear flattening of yield curves. US Treasuries: volatility in money markets will keep long-term yields in check. Yet, inflation concerns continue to grow, pointing to higher rates once the debt ceiling issue is resolved. This week, investors will need to focus on the Fed Minutes released on Wednesday, inflation numbers, and the White House's announcement concerning the Federal Reserve Chair nomination. The Fed’s minutes might unveil details regarding the decision that led to tapering this month and whether FOMC members begin to fret about inflationary pressures. Last week, several Fed’s speakers opened up about accelerating tapering and hiking interest rates in 2022. Among them, Fed Vice Chair Richard Clarida called for a discussion to expedite tapering to enable the central bank to hike interest rates sooner. At the same time, if Biden nominates Leal Brainard as Fed Chair, it could advance inflation worries. Brainard is known to be more dovish than Powell. In the case of her nomination, the market could anticipate interest rates to remain low for longer, implying stickier inflation, provoking a selloff in bonds. The Personal Consumption Expenditure Index, one of the inflation data most looked at after the Federal Reserve, will be released on Wednesday. The PCE core deflator index YoY is expected to rise to 4.1%, the highest in more than 31 years. As we mentioned in earlier editions of “Fixed income market: the week ahead”, we expect inflationary pressures to continue to rise and higher rents, housing and wages to make inflation stickier, putting at odds policymakers’ transitory narrative. Therefore, although the US yield curve has already flattened substantially, we cannot expect anything else than more flattening. The only difference is that once the debt ceiling issue is resolved, long term yields will need to rise together with short term yields, putting at risk weaker credits. The debt ceiling will be a crucial topic for December. Janet Yellen has said that the US Treasury will run out of cash soon after the 3rd of December if an agreement over the debt ceiling is not found. However, money markets have started to price a default during the second half of December. Indeed, last week's 4-week T-Bills auction was priced with a yield of 0.11%, more than double the Reverse Repurchase facility rate. We expect volatility in money markets to continue to remain elevated until the debt ceiling is lifted or suspended. Until then, the long part of the yield curve will serve as a safe haven causing yields to remain compressed. Yet, once the debt ceiling hurdle has cleared, long-term rates will resume their rise. European sovereigns: lack of collateral and a surge in Covid-19 cases will keep yields compressed. Yet, something is changing among policymakers. In Europe, governments are imposing new lockdown measures due to increasing Covid-19 cases, causing yields to drop significantly. Yet, inflationary forces have already been set into motion. Another lockdown might exacerbate inflation further as consumption will switch from services to goods, putting more pressure on prices. Meanwhile, policymakers have started to open to the possibility that upside inflation risk might remain throughout winter. Therefore, near-term hikes expectations are unlikely to reverse despite new lockdown measures. Yet, lack of collateral in the euro area contributes to keeping short-term yields compressed across the euro area, including the periphery. At the same time, swaps with the same maturity have widened as the market prices earlier interest rate hikes. Demand for collateral will remain strong until the end of the year. However, 2022 opens up to widening risk, as demand for bonds will start to wane, and the front part of the yield curve will shift higher according to interest rate hikes expectations. Source: Bloomberg and Saxo Group. However, it looks too early to call for higher yields in the Euro area, as a lot still depends on yields in the US and December's ECB meeting. Suppose more governments across the euro area impose lockdown measures. In that case, the central bank might look to extend the PEPP bond-buying program after March, compressing yields further. The next few weeks preceding Christmas are going to be critical to set direction in European sovereigns. Economic calendar: Monday, the 22nd of November  Spain:  Balance of Trade United States: Chicago Fed National Activity Index, Existing Home Sales (Oct),  2-year Note Auction, 5-year Note Auction Eurozone: Consumer Confidence Flash (Nov) Tuesday, the 23rd of November Germany: Markit Composite, Manufacturing and Services PMI Flash (Nov) Eurozone: Markit Composite and manufacturing PMI Flash (Nov) United Kingdom: market/CIPS Composite, Manufacturing and Services PMI Flash (Nov) United States: Markit Manufacturing PMI flash (Nov), NY Fed Treasury Purchases TIPS 7.5 to 30 years, 2-year FRN Auction, 7-year Note Auction Wednesday, the 24th of November New Zealand: Interest Rate Decision, RBNZ Press Confidence France: Business Confidence Germany: Ifo Business Climate (Nov), 15-year Bund Auction United States: Durable Goods Orders (Oct), GDP Growth Rate QoQ 2nd Est (Q3),  Continuing Jobless Claims, Corporate Profits QoQ Prel (Q3), Durable Goods Orders (Oct),  Goods Trade Balance (Oct), Initial Jobless Claims, Jobless Claims 4-week Average, retail Inventories Ex Autos (Oct), Core PCE Price Index (Oct), Michigan Consumer Sentiment Final (Nov), PCE Price Index (Oct), Personal Income (Oct), Personal Spending (Oct), FOMC Minutes, 4-week and 8- week bill auction Thursday, the 25th of November New Zealand: Balance of Trade Japan: Foreign bond Investment, Coincident Index Final, Leading Economic Index Final (Sep) Germany: GDP Growth Rate YoY Final (Q3), GfK Consumer Confidence (Dec) Sweden: Monetary Policy Report, Riskbank Rate Decision France: Unemployment Benefit Claims Canada Average weekly earnings YoY Friday, the 26th of November Australia: Retail Sales MoM Prel (Oct) South Korea: Interest Rate Decision France: Consumer Confidence Switzerland: GDP Growth Rate YoY (Q3) Italy: Business Confidence (Nov)
Intraday Market Analysis – USD Bounces Back

Intraday Market Analysis – USD Bounces Back

John Benjamin John Benjamin 22.11.2021 08:40
GBPUSD hits resistance The pound pulled back after Britain’s retail sales registered a steeper drop to -1.3% in October. The pair has met stiff selling pressure in the supply zone around 1.3510, a support that has turned into resistance after a failed rebound. An oversold RSI may cause a limited rebound. However, a bearish MA cross on the daily chart suggests that sentiment is still pessimistic. 1.3380 is a key support to keep the sterling afloat. A bearish breakout may trigger an extended sell-off to last December’s lows around 1.3200. USDCAD breaks higher The Canadian dollar struggles after a contraction in September’s retail numbers. The US dollar bounced off the resistance-turned-support at 1.2580. This is a sign that the bulls are still in control. A bullish MA cross on the daily timeframe confirms the directional bias for the next few days. The daily resistance at 1.2770 would be the next target. Its break would lead to a test of the double top at 1.2900. In the meantime, the RSI’s overextension has temporarily held the bulls back. We can also expect buying interest during dips. GER 40 struggles for support The Dax 40 tumbles as lockdowns across Europe hurt sentiment. The RSI’s overbought situation on the daily chart has made buyers cautious in pursuing high valuations. On the hourly chart, a bearish RSI divergence suggests a deceleration in the upward momentum. Then a dip below 16200 confirms weakness in the rally, prompting leverage positions to liquidate. The psychological level of 16000 is a congestion area as it coincides with last August’s peak and the 20-day moving average. 16300 is now a fresh hurdle.
Electrification and urbanisation will drive growth in copper

Electrification and urbanisation will drive growth in copper

Peter Garnry Peter Garnry 22.11.2021 08:26
Summary:  Copper is an essential metal in our green transformation driven by electric vehicles and upgrades to our electric grid infrastructure. The ongoing urbanisation in the world is also driving construction which is one of the key demand drivers for copper. The demand outlook looks strong, but how can investors get exposure to copper. We explore the different options and highlights specifically six miners with high exposure to copper. The long-term growth drivers of copper The green transformation will electrify the global economy as cars go electric and more homes in colder areas will switch from natural gas as heating source to that of air to water heat pumps. In warmer parts of the world we will continue to see an acceleration in air conditioners to cool homes. The main usage of refined copper is for electrical applications, but it is also used in housing (pipes and fittings), cars, telecommunication and industrial machines. Copper has the second highest thermal conductivity at room temperature among pure metals and is thus the preferred metal used in electrical applications. As the world electrifies in the name of the green transformation and rapid urbanization continues in Asia, Africa, and South America, copper will continue to enjoy strong annual growth rates. How to get exposure to copper? Copper has been rebranded as a green metal because of its importance for the green transformation and investors are increasingly asking us how to invest in copper. The most direct way is of course to invest in high grade copper futures on COMEX (part of CME Group) with the current active contract being the Mar 2022 contract (Saxo ticker: HGH2), but the contract has a contract value of around $106,537 at current level making it inaccessible to most retail investors. One could also invest through CFD on futures (Saxo ticker on the Mar 2022 is COPPERUSMAR22) where the investor could buy 100 pounds of copper instead of 25,000 pounds in the futures reducing the contract size to $425. However, getting exposure through CFDs and futures the investor must regularly roll the contract to the next active contract, and the investor could also incur financing cost increasing the drag on performance. The chart below shows the continuous futures contract on high grade copper since 2002. Source: Saxo Group Few miners offer pure exposure to copper Another way to get exposure to copper that removes the difficulties of rolling futures or CFD contracts is to invest in mining companies that extract or refine copper. The table below shows 16 mining companies with exposure to copper with Codelco, the largest copper producer in the world, absent from the list as the Chilean miner is only listed in Chile and thus not investable for our clients. The copper mining industry has delivered a median total return in USD of 132.6% over the past five years beating the global equity up 105% in the same period. The rising copper prices the past year driven by investors positioning themselves in green metals (defined as metals that will play a key role in the green transformation) which in turn has pushed up revenue in the industry by almost 40%. Sell-side analysts are generally bullish on copper miners with a median upside of 16% from current levels. In our view investors should select one or two copper miners to get exposure and avoid the ETFs on the industry as they are too broad-based and lack the pure exposure profile needed to play the copper market. Name Market cap (USD mn) F12M EV/EBITDA Revenue growth (%) Price-to-target (%) 5Y return (USD) Revenue from copper (%) Antofagasta PLC 18,871 5.1 43.8 3.4 166.6 84.8 First Quantum Minerals Ltd 14,962 5.1 41.9 20.9 111.3 84.2 Southern Copper Corp 45,944 8.6 39.7 3.1 128.9 81.6 KGHM Polska Miedz SA 7,026 3.8 28.3 26.4 80.0 73.8 Jiangxi Copper Co Ltd 9,843 7.2 44.6 37.8 27.3 71.0 OZ Minerals Ltd 6,397 7.6 38.7 -6.1 288.4 60.0 Glencore PLC * 65,890 4.5 -7.5 13.9 78.2 39.0 Boliden AB 9,291 5.1 26.2 3.7 68.1 35.0 Freeport-McMoRan Inc 57,080 5.7 55.5 13.2 193.3 33.7 Teck Resources Ltd 14,468 3.9 28.7 19.9 22.0 27.0 BHP Group Ltd 131,046 4.0 41.7 18.6 136.4 26.0 Zijin Mining Group Co Ltd 39,925 8.8 27.4 52.1 396.4 22.7 Anglo American PLC 47,342 3.5 59.0 15.7 262.8 22.3 MMC Norilsk Nickel PJSC 47,479 5.1 27.1 13.5 191.1 20.6 Rio Tinto PLC 98,497 3.6 39.5 15.8 149.2 11.5 Vale SA 60,329 2.5 77.2 87.6 111.4 5.5 Aggregate / median 674,389 5.1 39.6 15.7 132.6 34.4 Source: Bloomberg and Saxo Group* EBITDA contribution as Glencore does not breakdown revenue split on metals As the table also show, there is no such thing as pure exposure to copper except for futures, options and CFDs on the underlying copper. The miner with the highest revenue exposure to copper is Antofagasta with 84.8% revenue share from copper extraction and refining. Most copper miners also extract gold and silver as part of their copper operations. Out of the 16 copper miners in our list, only 6 of these miners have more than 50% of revenue coming from copper extraction and refining. Outlook and risks High grade copper futures have been range trading for more than half a year as slowing demand out of China due to a slowdown in housing construction has weighed on the demand side. On the positive side inventories have been tight in copper which has helped support the copper price and the global pipeline of new copper mines, but also potential tax charges in Chile and Peru (roughly around 40% of global supply) could negative impact supply and keep copper prices high. The annualized growth rate in global refined copper demand has been around 3% in the period 2009-2020. China has for many years been the key driver of demand growth for copper, but going forward electrification (electric vehicles and air-to-water heat pumps and urbanization in India will begin to play a bigger marginal role on demand creating a more steady and diversified demand picture. In 2022, demand outside China will be driven by construction, grid infrastructure, and transport. Another risk to copper demand is significantly higher interest rates next year as that would curtail growth in construction which is interest rate sensitive.
Ever Thought About Biofuels to Diversify Your Portfolio?

Ever Thought About Biofuels to Diversify Your Portfolio?

Sebastian Bischeri Sebastian Bischeri 19.11.2021 16:49
How do you feel about adding a broader range of stocks to our energy investment portfolio watchlist? Let’s see what we can do! By the way, feel free to send us your questions or topics that you would like us to write about in the forthcoming editions, so we’ll try our best to answer them! Trading positions are available to our premium subscribers. First, let’s quickly define what biofuels are: A biofuel is a liquid or gaseous fuel derived from the transformation of non-fossil organic matter from biomass, for example, plant materials produced by agriculture (beets, wheat, corn, rapeseed, sunflowers, potatoes, etc.). So, it is considered a source of renewable energy. The combustion of biofuels produces only carbon dioxide (CO2) and steam (H2O) and little or no nitrogen and sulfur oxides. Therefore, biofuels – as being at the crossroads between energy and agricultural commodities – respond to economic drivers (crops/supply, demand, dollar strength, reserves, etc.) and geopolitics of both industrial sectors. Furthermore, they allow their producing countries to reduce their energy dependence on fossil fuels. Key reasons to invest in these alternative energy sources: Given the recent surge of oil and gas prices, biofuels have become somehow more attractive, and consequently one could witness a slight shift in demand from fossil to non-fossil fuels. This was also a central topic of talks during the recent United Nations Conference of the Parties (COP26), which recently took place in Glasgow (Scotland), and where world leaders finally agreed to preliminary rules for trading carbon emissions credits. In addition, as we all know, the combustion of fossil fuels contributes to greenhouse gas (GHG) emissions. Regarding biofuels - the carbon emitted to the atmosphere during their combustion has been previously fixed by plants during photosynthesis. Thus, the carbon footprint seems to be a priori neutral. Stock Watchlist (Continued) In the first article, we started a watchlist with some major energy stocks. In the second article, we added some more spicy assets (MLPs). Today, let’s update it with some biofuel-based stocks! As usual, our stock picks will be shared through that link to our dynamic watchlist which will be updated from time to time, as we progress through this portfolio construction process... Below is an example of some indicative metrics: Daily Technical Charts Figure 1 – Green Plains, Inc. (GPRE) Stock (daily chart) Figure 2 – Aemetis, Inc. (AMTX) Stock (daily chart) Figure 3 – Tantech Holdings Ltd. (TANH) Stock (daily chart) In summary, those biofuel-related stocks may present some benefits to diversifying your energy portfolio while covering some alternative fuels as well. As always, we’ll keep you, our subscribers well informed. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve a high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
With Gold and the Buck, as Told, You're in Luck

With Gold and the Buck, as Told, You're in Luck

Mark Mead Baillie Mark Mead Baillie 22.11.2021 08:17
The Gold Update by Mark Mead Baillie --- 627th Edition --- Monte-Carlo --- 20 November 2021 (published each Saturday) --- www.deMeadville.com As time is at a bit of a premium for penning this week's missive, (even as Gold is priced at a massive discount by valuation), let's jump right in. The macro question at large we oft receive is: â–  "How come Gold isn't much higher with all the money printing?" Macro indeed per the above Gold Scoreboard, price having settled yesterday (Friday) at $1847, just 46% of our valuation level of $3993. To be sure per the right-hand panel Gold is, on balance, in ascent toward chasing the unconscionable rise in the U.S. "M2" money supply; yet the gap from here to up there remains HUGE! The micro question of late we oft receive is: â–  "How come Gold is going up even if the Dollar is also going up?" Micro indeed as such phenomenon does on occasion occur given (for the ad nauseath time) Gold plays no currency favourites. To be sure, both Gold and the Buck have been on the rise per their percentage tracks for the 15 trading days thus far in November. Here as shown, Gold is +3.5% and the Dollar Index is +2.1%. Yes, Gomer, it really can happen: In fact "surprise, surprise, surprise" if measuring from mid-year 2014, (albeit their respective routes hardly are in linear harmony), Gold is +39.7% and yet the Dollar Index is +20.4%. So even more broadly there, no directional favoritism. And yet from that date some seven years ago, the supply of Gold is only +10.7% whereas the U.S. "M2" money supply is +88.4%. Further with specific respect (or lack thereof) to the Dollar, recall from Econ 101 class that more of something (in this case much more) makes it worth less, arguably in the Dollar's case worthless. And yet an inevitable -- some say forcibly imminent -- Federal Reserve interest rate increase (versus, for example, sovereign bank rates in Europe still seen as staying essentially negative for the foreseeable future), is therefore getting the Dollar a bid such as to push the Buck into the lead of the currencies' so-called Ugly Dog Contest. 'Course, attempting to explain irrationality is an exercise in same, in this case more Dollars nonetheless being worth more whatevers. And even irrespective of inflation, we read speculation this past week of the €uro ultimately collapsing ... and being replaced by the Dollar. "What?" But then, could such dual-continent currency still be deemed a "Federal Reserve Note"? Either way, we wouldn't recommend your losing sleep over this whimsy. For if you've Gold, you're fine. And looking .9999 fine is our chart of Gold's weekly bars with their parabolic long trend, now neatly in place these past three weeks. Yes, Gold put in an acceptable net loss for this recent week after having been up for five of the prior seven. However, the daily table therein of our BEGOS Markets "Breakout?" suggestions popped up last evening with "Sell" for both precious metals. So some further slipping may be seen into the ensuing week; yet on balance by the bars' structure in the chart, the 1800s not only appear safe, but the dashed regression trend line is now more perceptively rotating from negative toward positive. And that would tie in well (as historically noted last week) with Gold reaching 1971 during this new parabolic Long run: Thus having awakened the dip buyers, let's turn to the StateSide economy, by which our Economic Barometer had a sound week and sufficiently so as to put it on pace toward recording its second best month year-to-date. For the week's 14 incoming metrics, 12 were improvements over the prior period, the only two negatives being inflationary October Import Prices (even ex-Oil) and a slight slowing in that month's Housing Starts. But the latter was mitigated by growth in Building Permits, plus a firm increase in November's National Association of Home Builders Index. November also scored marked increases for both the New York State Empire and Philly Fed Indexes. Other positives included October's Retail Sales, Industrial Production, Capacity Utilization, and the Conference Board's lagging read of Leading Indicators. "'Tis all good, right?" Well, just bear in mind there, Bunky, that much of Q3's Gross Domestic Product "growth" was mitigated by a very high Chain Deflator, (i.e. inflationary rather than real growth): And as to Q3 Earnings Season, it just ended as follows: for the S&P 500, 80% of reporting constituents beat both estimates and prior period results. 'Tis rare when the latter keeps up with the former. However more broadly, 1,440 other mid-cap and smaller companies by our tabulation found just 56% having actually improved over 2020's Q3 shutdown period. That's an uh-oh... But in toto, great economics (arguably inflationarily but not really) + great earnings (by estimates but not always actual growth) = S&P 500 all-time highs. Moreover, money is pouring into the stock market per the website's S&P Moneyflow page: "Let's all buy high!" 'Tis quite extraordinary. "So then maybe this a blow-off top, mmb..." Squire, we long ago stopped counting the number of would-be S&P blow-off tops. Remember: as we've herein put forth for many-a-year, this is now the age of the stock market being the Great American Savings Account. "You have to be IN!" they say. "Gold's for the BIN!" they say. And then there's the ever-annoying individual blurter: "I bought X back at blah and am now making BLAH!" For whom we have this important reminder: the market capitalization of the S&P 500 as of Friday night is $41.4 trillion; yet the liquid M2 money supply of the U.S. is but half that at $21.4 trillion. So when it all goes wrong, good luck in getting out with something. Meanwhile amongst it all going good, we read that a record number of StateSide workers are quitting their jobs, the notion being they can do better doing something else. Watch for this great mania of "There's a better way!" and "My stocks are so up!" ultimately ending with "What was I thinking?" Then from the "We Knew This Was Coming Dept." it seems just mere weeks go by before yet again U.S. Treasury Secretary Janet "Old Yeller" Yellen has to chase down the Legislature 'cause she's run out of dough to make the country go. For sanity's sakes: "Got Gold?" Hopefully as the Fed Chair passes to Lael "The Brain" Brainard, she and the Treasury Secretary can sort it all out. (See too: "In Like Flint", 20th Century Fox, '67). From steely flint to a wee loss of glint describes at present our precious metals. Per the two-panel graphic below, we see on the left a bit of a topping pattern in the daily bars, but again with structural support still well within the 1800s. Then on the right in Gold's 10-day Market Profile, 1864 clearly is the dominant price traded across these past two weeks: Silver, too, shows similar toppiness per her daily bars (at left) with the low 24s/high 23s as supportive; then in her Profile (at right), 25.15 is where the bulk of Sister Silver's action has been: In sum, we see a bit of near-term pullback for Gold and Silver, but nothing really materially daunting, especially given the notion of 1971 during Gold's current parabolic up run; (you'll recall from a week ago, arriving at that level equates to the median gain of the 43 prior parabolic Long trends since the year 2001). And at some point -- you know, and we know, and everyone from Bangor, Maine to Honolulu and right 'round the word knows that -- the Buck ultimately shall run out of luck. Indeed to that end (and so much more), in having opened with a couple of questions, let's close with one that came in this past week from a highly-valued publisher of The Gold Update: "Do you think $1900 is nigh?" Our response in kind: "$4000 is nigh." Cheers! ...m... www.deMeadville.com www.deMeadville.com
Best Pick for Corona Woes

Best Pick for Corona Woes

Monica Kingsley Monica Kingsley 22.11.2021 15:49
S&P 500 stumbled as value plunged – corona fears are back as Austria lockdown might very well be followed soon by Germany. The mood on the continent is souring, and coupled with accelerating German inflation data, helping to underpin the dollar. Overall, the reaction reminds me of the corona market playbook of Feb-Mar 2020 when I aggresively took short positions, riding them all the way down to the Mar 23 bottom. So, why am I not beating the bearish drum today as well? We have a lot of incoming stimulus (both monetary and fiscal), the economy is slow but the yield curve hasn‘t inverted the way it did in 2019 – make no mistake, we‘re in a rate raising cycle (even if the Fed didn‘t move, the markets would force it down the road). I know, pretty ridiculous notion with 10-year yield at 1.54% and Oct YoY CPI at 6.2% - but the rates being even more negative elsewhere, help to explain the dollar 2021 resilience. That‘s the bullish side to last week‘s bearish argument. What gold and silver are sniffing out, is that the Fed would have to reverse course once the tapering effects start biting some more – not now, with still more than $100bn monthly addition. Cyclicals and commodities that had massively appreciated vs. year ago (oil doubled), are feeling the pinch of fresh economic activity curbs speculation in spite of the polar shift of U.S. strength in energy of 2019 and before. Begging the OPEC+ to increase production might not do the trick, and with so much inflation already in (and still to come), the key investment theme is of real assets strength. Precious metals have broken out, are no longer an underdog, and the inflation data will not decelerate for quite a few months still. And even as they would, it would come at a palpable cost to the real economy, and the resolute fresh stimulus action wouldn‘t be then far off. As I wrote in Apr 2020, it‘s about the continuous stimulus that‘s the go-to response anytime the horizon darkens, for whatever reason. Wash, rinse, repeat. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bulls still have the upper hand, and value recovery accompanied by good tech defence of high ground gained, is the awaited mix. The market breadth is narrowing, and needs to be reversed to give the bulls more breathing room. Credit Markets Once corona returns to the spotlight, bets on „reversion to the mean“ in credit markets are off. Weakening data get more focus, and flight to safety is on, puncturing the trend of rising yields that would inevitably lead to yield curve control. Gold, Silver and Miners It‘s as if the gold and silver bulls don‘t trust the latest rally – I think that‘s a mistaken belief for we have turned the corner, and precious metals are about to shine – of course, invalidating the latest miners weakness in the process. Crude Oil Crude oil bulls didn‘t recover from Friday‘s spanner in the works, and while the dust hasn‘t settled, black gold is prone to an upside reversal at little notice. I‘m not overrating the oil index weakness. Copper Copper smartly recovered, moving at odds with the CRB Index, which I treat (especially given Friday‘s Austria news repercussions) as a vote of confidence that the economy isn‘t rolling over to a deflationarry hell (pun intended). Bitcoin and Ethereum Bitcoin and Ethereum are still going sideways in this correction, but today‘s lower knot is encouraging. The consolidation though still appears to have a bit further to go in time. Summary S&P 500 bulls keep hanging in there, and the waiting for bonds to come to their senses might take a while longer. Tech keeps cushioning the downside, and we haven‘t peaked in spite of the many warnings. Value and Russell 2000 upswings would be good confirmations of the stock bull market getting fresh fuel. Precious metals would have the easiest run in the weeks ahead – commodities in general not so much. Their breather is though of a temporary nature as all roads lead to real assets. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Intraday Market Analysis – Nasdaq Hits Resistance

Intraday Market Analysis – Nasdaq Hits Resistance

John Benjamin John Benjamin 23.11.2021 09:20
NAS 100 pulls back Investors took profit after Jerome Powell’s renomination as US Federal Reserve Chairman. The tech index saw an acceleration in its rally after a break above the previous peak (16450). Strong momentum suggests that buyers are committed to keeping the uptrend intact after a brief pause. However, the RSI’s triple top in the overbought area indicates exhaustion, and a fall below 16550 has triggered a correction. 16300 is the next support from a previous supply zone. A rebound needs to clear 16750 before the rally could resume. AUDUSD struggles for support China’s property slowdown and lower commodity prices weigh on the Australian dollar. The pair has given up most of its gains from the October rally, a sign that support is hard to come by. Nonetheless, a series of lower lows has attracted trend followers’ interest in maintaining the status quo. 0.7220 is an intermediate support. An oversold RSI may prompt the short side to cover, raising bids in the process. However, the bulls will need to lift offers around the former support at 0.7300 before they could expect to turn the tables. NZDJPY seeks support The New Zealand dollar remains under pressure after disappointing retail sales in Q3. The kiwi is seeking support after a surge above last May’s peak at 81.20 led the daily RSI into an overbought situation. Short-term sentiment remains bearish as the pair struggles to achieve a new high. 80.55 is a major resistance after the bulls’ multiple failed attempts. A bullish breakout may pave the way for a reversal towards 82.00. Otherwise, a drop below 79.50 would send the pair towards September’s high at 78.50.
All alone with bitcoin

All alone with bitcoin

Korbinian Koller Korbinian Koller 23.11.2021 11:06
With this psychological burden, you want to stack your odds as good as possible to gain an edge for balance. Bitcoin provides such advantages. The inherent volatility allows for follow-through after an entry. In other words, one gets good risk/reward-ratios in midterm plays on bitcoin. Also, necessary for the long-term time frame player since hodling has another psychological hurdle that piled on top can be devastating. You won’t find many traders who bought a bundle of bitcoin when it traded at a dollar and are still holding it without ever having sold or rebought some. BTC in US-Dollar, Quarterly Chart, the Doji explosion: Bitcoin in US-Dollar, Quarterly chart as of November 23rd, 2021. The quarterly chart of bitcoin shows how explosive moves to the upside can be. If you look at the yellow lines, you will see that a small Doji builds after a retracement, and then prices explode within the next quarter like rockets. This trading behavior provides for sensational risk/reward-ratios. The quarterly chart shows a bullish quarter. Even though all-time highs have been rejected, we see the year ending on a bullish note. The great thing about this self-directed profession, on the other hand, is that you get all the credit. Work directly translates into money, without the typical step in between, selling a product or a service. If you are good at what you are doing in the trading/investing arena, rewards can be more than plentiful. No gift baskets need to be sent to a boss or coworker. True rewards for arduous work to yourself. A very self-fulfilling profession indeed. BTC in US-Dollar, Monthly Chart, most often trending: Bitcoin in US-Dollar, Monthly chart as of November 23rd, 2021. The monthly chart illustrates the steepness of the trend, and yellow lines provide a possible long reload opportunity, which will take all-time highs out next year. Another benefit for individual traders choosing to trade bitcoin is its unique personality of trending much more than most trading instruments. This unique feature adds a massive edge to a trader’s trading arsenal. BTC in US-Dollar, Weekly Chart, freeing investment capital fast: Bitcoin in US-Dollar, weekly chart as of November 23rd, 2021. But this isn’t all. From a trading perspective, bitcoin supports the unsupported individual in comparison to gold or silver as alternate wealth preservation tools due to its speed. Risk is the most defining aspect for a trader, and consequently, capital exposure time is the most crucial aspect. After all, the longer money is in the market, the more exposed it is, let’s say, to unexpected news and six sigma events. Market money parked cannot produce elsewhere and is also emotionally draining. No such thing in bitcoin.A look at the weekly time frame illustrates what we mean by this. It took less than eight weeks for bitcoin to gain staggering percentage moves within the first and second leg in this steep regression channel up. We also just entered a low-risk entry zone again for a third leg to mature. In short, you are all alone with bitcoin, but at least you picked the most ideal alliance with this trading vehicle to stack the odds in your favor. All alone with bitcoin: The business of market play is unique. You’re not learning this skill in school, mentors are hard to come by, and it isn’t a group sport. It is advisable to seek out a community of like-minded traders like our free telegram channel, since spouses rarely can comprehend the steepness of the learning curve and the challenges of constant self-reflection and pain until the consistency is mastered.  While one typically can team up and is supported within a group at the mastery level required, it’s a solo sport in trading.  Statistics support that the likeliest reason for failure in this business is underestimating the time required to acquire all the important skills necessary for success. New traders run either out of money or patience.  The press makes it look so easy, and the fact that all one needs to do is press a button doesn’t help towards a more respectful attitude. Yet, the mere truth is that it is one of the most demanding businesses to find oneself into. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|November 23rd, 2021|Tags: Bitcoin, bitcoin consolidation, crypto analysis, Crypto Bull, crypto chartbook, DeFi, low risk, quad exit, technical analysis, trading education|0 Comments About the Author: Korbinian Koller Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
Betting on Hawkish Fed

Betting on Hawkish Fed

Monica Kingsley Monica Kingsley 23.11.2021 15:46
S&P 500 reversed from fresh ATHs as spiking yields sent tech packing. Value didn‘t soar, but held up considerably better – still, stock bulls are getting on the defensive. Markets have interpreted the Powell nomination as a hawkish choice. I‘ve written the prior Monday:(…) the Fed is still printing a huge amount of money on a monthly basis, and it remains questionable how far in tapering plans execution they would actually get – I see the risks to the real economy coupled with persistently high inflation as rising since the 2Q 2022 (if not since Mar already, but most pronounced in 2H 2022.Inflation hasn‘t moved to the Fed‘s sights, and yesterday‘s rection in yields and precious metals is a bit too harsh. While rates are on a rising path as I‘ve written yesterday, precious metals overreacted. True, the bullish argument for the dollar stepped to the fore as yields differential between the U.S. and the rest of the world got more positive, and at the same time, various yield spreads keep compressing. That‘s a reflection of less favorable incoming economic data. Just as much as Friday‘s reaction was about corona economic impact projections, yesterday‘s one was about monetary policy anticipation.Inflation expectations though barely budged – the decline doesn‘t count as trend reversal. CPI isn‘t done rising, and the more forward looking incoming data (e.g. producer prices) would confirm there is more to come. All in all, it looks like precious metals (and to a smaller degree commodities), are giving Powell benefit of the doubt, which I view to be leading to disappointment over the coming months. Should Powell heed the markets‘ will, the real economy would weaken dramatically, forcing him to make a sharp dovish turn – and he would, faster than he flipped since getting challenged in Dec 2018.We‘re experiencing an overreaction in real assets – as stated yesterday:(…) the Fed would have to reverse course once the tapering effects start biting some more – not now, with still more than $100bn monthly addition. Cyclicals and commodities that had massively appreciated vs. year ago (oil doubled), are feeling the pinch of fresh economic activity curbs speculation in spite of the polar shift of U.S. strength in energy of 2019 and before. Begging the OPEC+ to increase production might not do the trick, and with so much inflation already in (and still to come), the key investment theme is of real assets strength.Precious metals have broken out, are no longer an underdog, and the inflation data will not decelerate for quite a few months still. And even as they would, it would come at a palpable cost to the real economy, and the resolute fresh stimulus action wouldn‘t be then far off. As I wrote in Apr 2020, it‘s about the continuous stimulus that‘s the go-to response anytime the horizon darkens, for whatever reason. Wash, rinse, repeat.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 bulls lost the momentary upper hand, and value recovery isn‘t yet strong enough to carry it forward. A less heavy move in bonds – temporary yields stabilization – would be needed to calm down stock market nerves.Credit MarketsTreasuries held up best, and that‘s characteristic of a very risk-off sentiment. The low volume in HYG isn‘t a promise of much strength soon returning.Gold, Silver and MinersPrecious metals turned sharply lower, and haven‘t stabilized yet. Bond market pressures are keenly felt even though inflation expectations didn‘t follow with the same veracity. The next few days will be really telling.Crude OilCrude oil bulls have made a good move, and more strength needs to follow. The fact that it would be happening when the dollar is strengthening, and many countries are tapping their strategic reserves, bodes well for black gold‘s recovery.CopperCopper springboard bulding goes on, and the CRB Index isn‘t tellingly yielding – the hawkish Fed bets better be taken with a (at least short-term) pinch of salt.Bitcoin and EthereumBitcoin and Ethereum are still going sideways, and today‘s resilience is a good omen – across the board for risk assets.SummaryS&P 500 bulls need tech to come alive again, and odds are it would with a reprieve in spiking yields. While bond markets are getting it right, yesterday‘s fear in corporate bonds was a bit too much – the Fed isn‘t yet in a position to choke off the real economy through slamming on the breaks. Markets are prematurely speculating on that outcome, which would be a question of second or third quarter next year. Treasuries have though clearly topped, and stocks do top with quite a few months‘ lag – we aren‘t there yet. Enjoy the commodities ride, and confidence gradually returning to precious metals.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Interest rate sensitivity is back in town haunting technology stocks

Interest rate sensitivity is back in town haunting technology stocks

Peter Garnry Peter Garnry 23.11.2021 16:23
Summary:  Interest rate sensitivity came back roaring yesterday pushing down all of our growth baskets. Yesterday's move shows the potential for a correction in US technology stocks should the US 10-year yield continue to rapidly advance towards the highs from March. We also show how the Nasdaq 100 and STOXX 600 move in opposite direction during large up or down days in the US 10-year yield. Growth baskets look awfully vulnerable Yesterday’s move in the US 10-year yield of 8 basis points made it the 10th biggest move higher in US yields this year. Back in March when technology stocks were under pressure we wrote a lot about interest rate sensitivity in growth stocks as their present value are derived from expected cash flows further into the future than the typical MSCI World company. If interest rates rise faster than future growth expectations then the net effect is negative on the present value and more so for growth stocks as they have a higher duration. We saw downside beta (higher sensitivity) in all of our growth equity baskets with the gaming basket down 2.3% and the worst performers being the E-commerce and Crypto & Blockchain baskets down 4.2% and 5.1% respectively. This tells you a lot about the sensitivity and given the drawdown in technology stocks back in March, we could easily experience a 15-20% drawdown in technology stocks. The local highs from March in the US 10-year yield is the key level to watch for a breakout and a new trading environment. With all the options activity in Tesla dwarfing the combined options activity in FTSE 100 constituents, we believe Tesla will be at the center of the next risk-off move in technology. Nasdaq 100 vs STOXX 600 are yin and yang of interest rates We have previously tried to calculate the interest rate sensitivity, but this time we are pursuing a different approach. We look at the past 231 trading days this year and group the 1-day difference in the US 10-year yield into deciles. In order to measure interest rate sensitivity we calculate daily excess log returns for Nasdaq 100, S&P 500 and STOXX 600 against the MSCI World Index and compute their average daily excess return for each decile. As the barplot shows, there is significant negative excess return in Nasdaq 100 in the 1st decile (the 10% days with the highest positive difference in US 10-year yield) and significant positive excess return in STOXX 600. This makes perfect sense because Nasdaq 100 is high duration growth stocks and STOXX 600 has a clear value tilt towards financials, energy and mining which exhibit much lower duration. The pattern is completely reversed in the 10th decline (days with large negative difference in US 10-year yield). The other eight deciles do not show the same clear spread between Nasdaq 100 and STOXX 600. In other words, if interest rates suddenly move aggressively higher then growth portfolio will take a serious hit and hence why we recommend investors to improve the balance between growth and value stocks, or said differently reduce the equity duration.
Article by Decrypt Media

More Public Debt Is Coming. Another Gold’s Rally Ahead?

Arkadiusz Sieron Arkadiusz Sieron 23.11.2021 15:13
  Democrats are not slowing down - the social spending bill follows the infrastructure package. Will gold benefit, or will it get into deep water? Will the American spending spree ever end? On Monday last week (November 15, 2021), President Biden signed a $1 trillion infrastructure package, and just a few days later, Biden’s social spending bill worth another $1.75 trillion passed the US House of Representatives. Apparently, $1 trillion was not enough! Apparently, we don’t already have too much money chasing too few goods. No, the economy needs even more money! Yes, I can almost hear the lament of American families: “we need more money, we already bought everything possible, we already own three cars and a lot of other useless crap, but we need more! Please, the almighty government, give us some bucks, let your funds revive our land”. Luckily, the gracious Uncle Sam listened to the prayers of its poor citizens. Given the above, one could think that the US economy is not already heavily indebted. Well, it’s the exact opposite. As the chart below shows, the American public debt is more than $27 trillion and 125% of GDP, but who cares except for a few boring economists? Of course, neither infrastructure nor spending bill will increase the fiscal deficits and overall indebtedness to a similar extent as the pandemic spending packages. These funds will be spread over years. Additionally, the fiscal deficit should narrow in FY 2022 as pandemic relief spending phases out (this is already happening, as the chart below shows), while the economic recovery combined with inflation tax bracket creep increases tax revenues. However, both of Biden’s bills will increase indebtedness, lowering the financial resilience of the US economy. What’s more, the overall debt is much larger than the public debt I focused on here. Other categories of debt are also rising. For instance, total household debt has jumped 6.2% in the third quarter of 2021 year-over-year, to a new record of $15.2 trillion.   Implications for Gold What does the fiscal offensive imply for the precious metal market? In the short run, not much. Fiscal hawks like me will complain, but gold is a tough metal that does not cry. Both of Biden’s pieces of legislation have been widely accepted, so their impact has already been incorporated into prices. Actually, the actual bills could be even seen as conservative – compared to Biden’s initial radical proposals. In the long run, fiscal exuberance should be supportive of gold prices. The ever-rising public debt should zombify the economy and erode the confidence in the US dollar, which could benefit the yellow metal. However, the empire collapses slowly, and there is still a long way before people cease to choose the greenback as their most beloved currency (there is simply no alternative!). So, it seems that, in the foreseeable future, gold’s path will still be dependent mainly on inflation worries and expectations of the Fed’s action. Most recently, gold prices have stabilized somewhat after the recent rally, as the chart below shows. Normal profit-taking took place, but gold found itself under pressure also because of the hawkish speech by Fed Governor Christopher Waller. He described inflation as a heavy snowfall that would stay on the ground for a while, rather than a one-inch dusting: Consider a snowfall, which we know will eventually melt. Snow is a transitory shock. If the snowfall is one inch and is expected to melt away the next day, it may be optimal to do nothing and wait for it to melt. But if the snowfall is 6 to 12 inches and expected to be on the ground for a week, you may want to act sooner and shovel the sidewalks and plow the streets. To me, the inflation data are starting to look a lot more like a big snowfall that will stay on the ground for a while, and that development is affecting my expectations of the level of monetary accommodation that is needed going forward. So, brace yourselves, a janitor is coming with a big shovel to clean the snow! Just imagine Powell with a long-eared cap, gloves, and galoshes giving a press conference! At least the central bankers would finally do something productive! Or… maybe shoveling is not coming! Although the Fed may turn a bit more hawkish if inflation stays with us for longer than expected previously, it should remain behind the curve, while the real interest rates should stay ultra-low. The December FOMC meeting will provide us with more clues, so stay tuned! If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
Dax 40 December hit the buying opportunity at 16080/060. Try longs with stops below 16040.

Dax 40 December hit the buying opportunity at 16080/060. Try longs with stops below 16040.

Jason Sen Jason Sen 23.11.2021 13:31
EuroStoxx 50 December just completed a head & shoulders reversal pattern for a sell signal initially targeting minor support at 4310/00. FTSE 100 December a high for the day exactly at first resistance at 7240/60. Update daily at 07:00 GMT Today's Analysis. Dax holding minor resistance at 16140/160 to retest strong support at 16090/060. Try longs with stops below 16040. A break lower however is a sell signal with 16060/090 working as resistance targeting 16000 & a buying opportunity at 15960/930. Try longs with stops below 15900. A break above 16180 keeps bulls in control for today targeting 16260/280. A break above 16290 should target 16350/390. EuroStoxx holding the head & shoulders neckline resistance at 4330/40 targets 4310/00 then 4270/60, perhaps as far as strong support at 4240/30. Resistance at 4330/40 but above here allows a recovery to 4375/80 before a retest of 4400/10. Anyone want to bet on a double top sell signal here? A break above 4410 however targets 4418/20 but eventually we can reach as far as 4450/55. FTSE we have a buying opportunity at 7170/50 with stops below 7135. A break lower targets 7100/7090, perhaps as far as 7040/30. Longs at 7170/50 target 7200 then first resistance at 7240/60 for some profit taking. If we continue higher look for 7300/10 this week. Emini S&P December new all time high exactly at the 4735/40 target in the bull trend, but severely overbought conditions finally kicked in with a sudden collapse to the 4670/68 target. This leaves a bearish engulfing candle, which is a very short term negative signal. We do have severely negative divergence on the daily chart so there is a risk of a further correction but I think there are too many retail traders betting on a crash for it to happen just yet. Nasdaq December hit the next target of 16640/660 next target then a new all time high at 16767. However prices then crashed leaving a huge bearish engulfing candle, which is a very short term negative signal. Emini Dow Jones December shorts at first resistance at 35850/950 worked perfectly with a high for the day here, followed by a retest of last week's low at 35490. Update daily at 07:00 GMT. Today's Analysis. Emini S&P first support at 4670/68 but a break below 4660 targets 4640 then the best support at 4630/20. Try longs with stops below 4610. Very minor resistance at 4700/10 but above here retargets 4720/23 & 4735/40 then 4750. Nasdaq December collapsed through first support at 16450/400 to target 16300/270 then best support for today at 16230/200. Try longs with stops below 16150. A break lower however sees 16200/230 working as resistance to target 16100 & 16030/010 before a buying opportunity at 15900/850. Try longs with stops below 15800. First resistance at 16400/450. Shorts need stops above 16500. A break higher targets 16550/600 before a retest of the all time high at 16630/767. Emini Dow Jones December strong support at 35450/350. A break lower however targets 35100/35000. Watch for a bounce from here on the first test. However a break lower meets a buying opportunity at 34800/750, with stops below 34650. First resistance at 35850/950. A break above 36000 should be a buy signal targeting 36230/250. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
FX Update: USD kneejerks higher as Powell gets nod for second term

FX Update: USD kneejerks higher as Powell gets nod for second term

John Hardy John Hardy 23.11.2021 17:08
Summary:  US President Biden will tap Jay Powell for a second term as Fed Chair and will nominate Lael Brainard to be promoted to Vice Chair of the Fed, a move that sent the USD modestly higher and US yields sharply higher, though some of the reaction may have been on pent-up reaction to prior developments. Elsewhere, the descent in the Turkish lira is turning dire, while the kiwi is weaker ahead of an RBNZ meeting tonight. FX Trading focus: USD follows US yields higher in the wake of Powell getting nod for 2nd term Surprising a sizable minority and perhaps myself to a degree, US President Biden will tap Jay Powell for a second term as Fed Chair, while seeking to promote Lael Brainard from her current position to Vice Chair. The most prominent reason given for not going with Brainard is that her confirmation process may have proven contentious, something Biden wanted to avoid, and given extensive Democratic party support for Powell, the progressive wing aside, it was always the “easy option”. Brainard will still have to go through a confirmation process with the Senate. More interesting is the Brainard was not nominated to Vice Chair in the banking supervision and regulation role that the soon-gone Quarles occupied, a role that many envisioned for her. Biden has more nominees to consider for Quarles’ replacement and other empty spots, but continuity appears assured, though a Vice Chair Brainard will carry more weight when she dissents on non-monetary policy issues in the future (she never dissented on FOMC votes but has dissented more than 20 times on board votes linked to loosening regulation on US financial institutions). Other positions at the Fed will need filling as well, including the replacement of Quarles as banking supervisor. The market reaction to the news was fairly straightforward and “as expected” algorithmically, i.e., Brainard was supposed to be the more dovish pick, so Biden going with Powell saw the USD stronger as the market priced in about 10 basis points more in the way of Fed hikes through the end of next year. It’s tough to tell whether some of the reaction was the market simply adjusting to have this important issue “out of the way” allowing traders to price in other recent developments, like hot US data and Fed Vice Chair Clarida’s comments on possibly speeding up the pace of the Fed’s taper of asset purchases at the December FOMC meeting. The next test for whether this USD move can extend will be with tomorrow’s October PCE Inflation print and the FOMC minutes. For USDJPY, as I argue below, an extension higher  likely needs more upside from longer US yields. US President Biden will speak today on the economy and “lowering prices for the American people” which many believe will include a release of crude oil from US strategic reserves. That’s a risky move if it fails. Chart: USDJPYUSDJPY spilled over the 115.00 barrier in the wake of Powell getting the nod for a second term, with  the move now trying to decide whether it can stick. Arguably, the rise in Fed policy expectations don’t mean much if the longer end of the US yield curve remains anchored as it has lately, which continues to suggest that the market sees inflation as transitory and/or that Fed potential on rates will max out around 2.0% and crush the growth and inflation outlook. While 10-year US yields were sharply higher yesterday, they’re still bogged down in the range since the pivot high of 1.70% in October and the cycle high near 1.75% all the way back at the end of March. The logjam needs to break there and send US long yields higher for better fundamental support for a significant break above the 115.00 level in USDJPY. European politics in the spotlight – with Germany dealing with a new Covid ave and the ongoing natural gas and power crunch, it is time for the government coalition to announce itself and begin ruling. An announcement of the “stoplight” coalition could be imminent and we’ll have to watch the awkward combination closely, particularly the LDP Lindner’s attitude toward spending as the traditionally liberal party’s supply side principles are at odds with its Social Democratic and Green coalition partners inclinations, although energy emergencies are not political, but must be dealt with.  Elsewhere, Italian president Mattarella announced he will be stepping down. If, as some believe, an effort is made to replace his mostly ceremonial role with Mario Draghi, elections would have to be held. And the French election season will only heat up from here, where we watch whether Macron can keep the populists Zemmour and Le Pen at bay.  The Euro is getting very cheap – bigger fiscal, an ECB reverse repo facility, and a non-Covid constrained outlook by spring could have EURUSD in a very different place by then. Antipodean action- the Aussie has risen sharply versus the kiwi (NZD) over the last couple of sessions as the news flow for the  Aussie has improved notably, with China’s central bank possibly signaling it is ready to bring stimulus, some of the news flow in the property sector improving, and especially as iron ore prices have jumped sharply, particularly overnight, on all of the above plus anticipation that China will have to increase steel output soon. The Reserve Bank of New Zealand was one of the quickest central banks to turn hawkish over the summer and abandon QE and was only delayed slightly in hiking rates by New Zealand’s first Covid outbreak in many months over the summer. The central bank chief Adrian Orr has made it clear that the bank is on the path or many more rate hikes to come and the market has priced in a policy rate of 1.50% by the April meeting of next year versus the current 0.50%. Most believe that the central bank will only hike 25 bps tonight but a significant minority believe that the bank will hike 50 bps. As important will be the market mood (if risk sentiment is weak on further US yield rises, for example, the impact of any RBNZ move may be muted) and whether guidance is able to meet lofty expectations for further tightening. The NZ 2-year yield has traded flat at elevated levels since late October, while NZDUSD has declined, arguably on the fresh momentum in Fed expectations, so moving the needle may require that the RBNZ deliver a 50 basis point hike and even more hawkish guidance. Turkish lira move getting downright disorderly – Turkish President was out yesterday complimenting the recent Turkish Central Bank chief’s decision to cut rates another 100 basis points and declaring that the Turkish government would concentrate on policies that encourage economic growth. In rather dire language, he drew parallels between the current situation and the struggle to form the modern Turkish state in 1923 in the wake of World War I. As of this writing, USDTRY traded near 12.50 after starting last week near 10.00, a breathtaking move. Much more of this kind of price action, and the risk of hyperinflation will swing into view. Table: FX Board of G10 and CNH trend evolution and strengthThe most important trend shift was yesterday’s huge dump in precious metals – look at the momentum scores for the last 2- and 5 days. Otherwise, most trends of late are extending with the exception of the badly fading NZD. Table: FX Board Trend Scoreboard for individual pairsThe precious metals in for a rough ride on the USD- and US yield move in the wake of the Fed Chair nomination move yesterday. Elsewhere, getting some hefty trend readings in USD/SEK and UDS/NOK, which remain high beta to Euro weakness. Upcoming Economic Calendar Highlights (all times GMT) 1445 – US Nov. Flash Markit Manufacturing and Services PMI 1500 – UK BoE Governor Bailey at House of Lords 1500 – US Nov. Richmond Fed Manufacturing 1730 – ECB's Makhlouf to speak 1800 – Canada Bank of Canada’s Beaudry to speak 2130 – API’s Weekly Petroleum Stock Report 0030 – Japan Nov. Flash Manufacturing and Services PMI 0100 – New Zealand RBNZ Official Cash Rate Announcement
Intraday Market Analysis – EUR Stays Under Pressure

Intraday Market Analysis – EUR Stays Under Pressure

John Benjamin John Benjamin 24.11.2021 09:15
EURUSD struggles to rebound The euro bounced back after PMI readings in the eurozone exceeded expectations. The pair is testing July 2020’s lows around 1.1200. The RSI’s oversold situation on the daily chart may limit the downward pressure for now. We can expect a ‘buying-the-dips’ crowd as price action stabilizes. Sentiment remains fragile though and sellers may fade the next rebound. The bulls will need to lift 1.1360 before a reversal could take shape. Failing that, a bearish breakout would trigger a new round of sell-off towards 1.1100. NZDUSD lacks support The New Zealand dollar softened after the RBNZ met market expectations and raised its cash rate by 25bps. The downward pressure has increased after 0.6980 failed to contain the sell-off. The pair has given up all gains from the October rally, suggesting a lack of interest in bidding up the kiwi. An oversold RSI caused a rebound as short-term traders took profit and the bears were swift in selling into strength. The directional bias remains bearish unless 0.7010 is cleared. The September low at 0.6860 is the next support. UKOIL bounces back Brent crude recovers on speculation that OPEC+ may lower production to counter a release of strategic reserves. A break below 79.30 has shaken out the weak hands. The price has met buying interest over the daily demand zone around 77.70, which coincides with last July’s peak. A surge above 82.00 puts the bears on the defensive. Short-covering would exacerbate short-term volatility. An overbought RSI may cause a brief pullback. Then 85.50 is a key hurdle before the uptrend could resume.
Altcoins are pulling away from boring Bitcoin

Altcoins are pulling away from boring Bitcoin

Alex Kuptsikevich Alex Kuptsikevich 24.11.2021 09:45
Bitcoin has lost 2.5% on Wednesday morning, returning to $56.3K. It seems that after a lull of a day-long, sellers’ pressure on the first cryptocurrency has continued. Meanwhile, the cryptocurrency market manages to remain positive, adding 0.3% in capitalisation over the past 24 hours. A little over a month ago, Bitcoin’s share of total crypto market capitalisation trended downwards. From a peak of 49.2% on October 19th, its share has fallen to 41.7%. Optimistic market participants point to impressive demand for altcoins, which is shaping the trend. On the other hand, pessimists point out that without the market’s flagship Bitcoin, cryptocurrencies are more likely to reverse sooner rather than later, recalling the situation in late 2017 and early 2018. Behind the pressure on bitcoin is a reduction in risk traction in traditional finance, while retail investors continue to look to cryptocurrencies for insurance against devaluation and speculative/investment potential. In addition, the way retail investors participate in cryptocurrencies has changed over the past five years since the previous cycle. Cryptocurrency ICO and trading have migrated to crypto exchanges, minimising some of the fraud risks of cryptocurrency creators. However, the investment risks have not gone anywhere. Of course, Bitcoin’s steady downward trend is eating away at crypto enthusiasts’ optimism. Still, a smooth pullback like this acts as an incentive for the market to look for new names, leaving Bitcoin to conservative finance. The latter has only begun to regularly allocate a share of their portfolio to crypto this year, filling it predominantly with Bitcoin. At the same time, the leading edge of investors already views the first cryptocurrency as too conservative and boring.
Dax 40 December longs at 16080/060 stopped below 16040 for a sell signal targeting 1a buying opportunity at 15960/930.

Dax 40 December longs at 16080/060 stopped below 16040 for a sell signal targeting 1a buying opportunity at 15960/930.

Jason Sen Jason Sen 24.11.2021 10:52
Dax 40 December longs at 16080/060 stopped below 16040 for a sell signal targeting 1a buying opportunity at 15960/930. However unfortunately we unexpectedly ran as far as 15860 before the bounce. EuroStoxx 50 December we wrote: just completed a head & shoulders reversal pattern for a sell signal initially targeting 4310/00 then 4270/60 (a low for the day here), perhaps as far as strong support at 4240/30. FTSE 100 December shorts at first resistance at 7240/60 worked a few times for 50 tick scalping opportunities before we eventually broke higher, so now this is today's support. Update daily at 07:00 GMT Today's Analysis. Dax my buying opportunity at 15960/930 was clearly too high - apologies - I will revise to 15870/840. Try longs with stops below 15800. Very strong support at 15750/700. Longs need stops below 15650. A break lower meets the best support for this week at 15575/525. Strong resistance at 16050/100. Shorts need stops above 16150. A break higher keeps bulls in control for today targeting 16260/280. A break above 16290 should target 16350/390. EuroStoxx shorts work on the slide to 4270/60. Holding first resistance at 4300/10 risks a retest of 4270/60 with a fall as far as strong support at 4240/30 possible before the end of the week. Resistance at 4300/10. Second resistance at 4330/40 but above here allows a recovery to 4375/80 before a retest of 4400/10. Anyone want to bet on a double top sell signal here? A break above 4410 however targets 4418/20 but eventually we can reach as far as 4450/55. FTSE holding what is now first support at 7260/40 targets 7300/10, perhaps as far as 7335/40 before a retest of 7380/90. Minor support at 7260/40 then we have a buying opportunity at 7170/50 with stops below 7135. A break lower targets 7100/7090, perhaps as far as 7040/30. Emini S&P December longs at first support at 4670/68 unexpectedly stopped below 4660 before a bounce from 4650. Bulls remain in control with no sell signal. (Although the bearish engulfing candle is likely to signal sideways trend so ease severely overbought conditions). Nasdaq December lower after a huge bearish engulfing candle, which is a very short term negative signal. Shorts at first resistance at 16400/450 worked perfectly, with a high for the day here. However we were buying at 16230/200, with stops below 16150...a low for the day at 16119 so unfortunately my stop was too tight with a recovery now as far as 16350. Emini Dow Jones December shorts at first resistance at 35850/950 worked perfectly with a high for the day here, followed by buying in to longs at strong support at 35450/350 & a low for the day here. Perfect calls!! Update daily at 07:00 GMT. Today's Analysis. Emini S&P I am going to stick with first support at 4670/68 but a break below 4660 targets 4640 then the better support at 4630/20. Try longs with stops below 4615. The best support at 4600/4395 this week - stop below 4385. Very minor resistance at 4700/10 but above here retargets 4720/23 & 4735/40 then 4750. Nasdaq December best support for today at 16230/180. Try longs with stops below 16100! Hopefully that gives us enough room. A break lower however sees 16180/230 working as resistance to target 16030/010 before a buying opportunity at 15900/850. Try longs with stops below 15750. First resistance again at 16400/450. Shorts need stops above 16500. A break higher targets 16550/600 before a retest of the all time high at 16630/767. Emini Dow Jones December longs at at 35450/350 worked perfectly on the bounce to 35790, just below first resistance at 35850/950. A break above 36000 should be a buy signal targeting 36230/250. Strong support again at 35450/350. A break lower however targets 35100/35000. Watch for a bounce from here on the first test. However a break lower meets a buying opportunity at 34800/750, with stops below 34650. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
COT Speculator Extremes: Brent Oil, Coffee, Mexican Peso & Palladium lead Bullish & Bearish Positions

COT Speculator Extremes: Brent Oil, Coffee, Mexican Peso & Palladium lead Bullish & Bearish Positions

Invest Macro Invest Macro 24.11.2021 08:11
November 23, 2021 By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter The latest update for the weekly Commitment of Traders (COT) report was released by the Commodity Futures Trading Commission (CFTC) on Friday for data ending on November 16th 2021. This weekly Extreme Positions report highlights the Top 5 Most Bullish and Top 5 Most Bearish Positions for the speculator category. Extreme positioning in these markets can foreshadow strong moves in the underlying market. To signify an extreme position, we use the Strength Index (also known as the COT Index) of each instrument, a common method of measuring COT data. The Strength Index is simply a comparison of current trader positions against the range of positions over the previous 3 years. We use over 80 percent as extremely bullish and under 20 percent as extremely bearish. (Compare Strength Index scores across all markets in the data table or cot leaders table) Speculators or Non-Commercials Notes: Speculators, classified as non-commercial traders by the CFTC, are made up of large commodity funds, hedge funds and other significant for-profit participants. The Specs are generally regarded as trend-followers in their behavior towards price action – net speculator bets and prices tend to go in the same directions. These traders often look to buy when prices are rising and sell when prices are falling. To illustrate this point, many times speculator contracts can be found at their most extremes (bullish or bearish) when prices are also close to their highest or lowest levels. These extreme levels can be dangerous for the large speculators as the trade is most crowded, there is less trading ammunition still sitting on the sidelines to push the trend further and prices have moved a significant distance. When the trend becomes exhausted, some speculators take profits while others look to also exit positions when prices fail to continue in the same direction. This process usually plays out over many months to years and can ultimately create a reverse effect where prices start to fall and speculators start a process of selling when prices are falling.   Here Are This Week’s Most Bullish Speculator Positions: Brent Oil The Brent Oil speculator trader’s futures position comes in as the most bullish extreme standing this week. The Brent speculator level is currently at a 98 percent score of its 3-year range. The speculator position totaled -12,900 net contracts this week which was a change by -1,049 contracts from last week. The speculator long position was a total of 45,201 contracts compared to the total spec short position of 58,101 contracts. Free Reports: Top 5 Companies Added to Our Stock Watch List this Quarter - Here are the Stock Symbols that stood out so far in the fourth quarter of 2021. Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.   Coffee Futures The Coffee Futures speculator trader’s futures position comes next in the extreme standings this week. The Coffee speculator level is now at a 97 percent score of its 3-year range. The speculator position was 66,081 net contracts this week, a change by 5,261 contracts from last week. The speculator long position was a total of 79,550 contracts versus the total speculator short position of 13,469 contracts. New Zealand Dollar The New Zealand Dollar speculator trader’s futures position comes in third this week in the extreme standings. The NZD speculator level resides at a 95 percent score of its 3-year range. The speculator position was 13,965 net contracts this week which marked a change by 1,083 contracts from last week. The speculator long position was a total of 26,388 contracts versus the total speculator short position of 12,423 contracts. 2-Year Bond The 2-Year Bond speculator trader’s futures position comes up number four in the extreme standings this week. The 2-Year speculator level is at a 91 percent score of its 3-year range. The speculator position was -5,445 net contracts this week and changed by 11,292 contracts from last week. The speculator long position was a total of 345,245 contracts against the total spec short position of 350,690 contracts. US Treasury Bond The US Treasury Bond speculator trader’s futures position rounds out the top five in this week’s bullish extreme standings. The Long T-Bond speculator level sits at a 88 percent score of its 3-year range. The speculator position was -16,368 net contracts this week which was a move of 11,704 contracts from last week. The speculator long position was a total of 144,973 contracts in comparison to the total speculator short position of 161,341 contracts. This Week’s Most Bearish Speculator Positions: Mexican Peso The Mexican Peso speculator trader’s futures position comes in as the most bearish extreme standing this week. The MXN speculator level is at a 2 percent score of its 3-year range. The speculator position was -47,655 net contracts this week, a weekly change of 752 contracts from last week. The speculator long position was a total of 69,984 contracts versus the total spec short position of 117,639 contracts. Palladium The Palladium speculator trader’s futures position comes in next for the most bearish extreme standing on the week. The Palladium speculator level is at a 7 percent score of its 3-year range. The speculator position was -2,038 net contracts this week which was a change by 916 contracts from last week. The speculator long position was a total of 3,108 contracts compared to the total speculator short position of 5,146 contracts. Japanese Yen The Japanese Yen speculator trader’s futures position comes in as third most bearish extreme standing of the week. The JPY speculator level resides at a 10 percent score of its 3-year range. The speculator position was -93,126 net contracts this week saw movement by 12,225 contracts from last week. The speculator long position was a total of 24,635 contracts against the total spec short position of 117,761 contracts. Nikkei 225 Yen The Nikkei 225 Yen (Japanese stock market) speculator trader’s futures position comes in as this week’s fourth most bearish extreme standing. The Nikkei 225 Yen speculator level is at a 11 percent score of its 3-year range. The speculator position was -4,195 net contracts this week which was a change by -3,892 contracts on the week. The speculator long position was a total of 9,075 contracts versus the total speculator short position of 13,270 contracts. 5-Year Bond Finally, the 5-Year Bond speculator trader’s futures position comes in as the fifth most bearish extreme standing for this week. The 5-Year speculator level is at a 20 percent score of its 3-year range. The speculator position was -344,595 net contracts this week and changed by 62,890 contracts from last week. The speculator long position was a total of 300,750 contracts compared to the total spec short position of 645,345 contracts. Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
FX Update: USD remains firm, RBNZ taps brakes on expectations

FX Update: USD remains firm, RBNZ taps brakes on expectations

John Hardy John Hardy 24.11.2021 13:44
Summary:  The US dollar remains firm after the news of Fed Chair Powell getting the nod for a second term on Monday, but a more aggressive extension of its recent strength is avoided as US yield rises were tempered yesterday. Elsewhere, a less hawkish than expected RBNZ saw the kiwi sharply weaker as the market removed a chunky bit of forward rate hike expectation on the latest guidance. FX Trading focus: USD follows US yields higher in the wake of Powell getting nod for 2nd term The US dollar strengthening in the wake of President Biden’s announcement that he would tap Jay Powell for a second term as Fed Chair extended modestly yesterday and into this morning, somewhat tempered by a strong US 7-year treasury auction taking the steam out rises in yields yesterday – with the 7-year benchmark actually notching new highs for the cycle before retreating in the wake of the auction. The more widely tracked 10-year US treasury yield benchmark is still rangebound below the October pivot high of 1.7% and the post-pandemic outbreak high of 1.75%  from the end of March. This has kept USDJPY from extending notably above the sticky 115.00 area of the moment. Elsewhere, the euro remains relatively weak despite ECB Vice President de Guindos out speaking and hinting some concern on inflation rises: “the ECB is continuously pointingout that the inflation rebound is of a transitory nature....However, we have also seen how in recent months these supply factors are becoming more structural, more permanent.” But just this morning we also have the ECB’s Holzmann out saying that inflation is likely to slow from next year. Later today we will get the expected German government coalition deal (SPD’s Scholz as Chancellor with Green’s Baerbock reportedly set for the foreign minister post and importantly, the liberal LDP’s Lindner set to lead the finance ministry), with a press conference set for 3 p.m. EURJPY and EURUSD are heavy this morning and note that  the 128.00 level in EURJPY is a well-defined range low, while EURUSD doesn’t have notable  support until well below 1.1200 and arguably not until psychological levels like 1.10. With covid spiking and a galloping energy crisis, I don’t envy the new German leadership. Overnight, the Reserve Bank of New Zealand waxed a bit more cautious than was expected by the market, and not only by raising the rates 25 basis points rather than the 50 basis points that a minority were expecting to see. In the central bank’s new statement, the bank strikes a more cautious tone: yes, clearly further rate hikes are set for coming meetings, but the bank is clearly in a wait and see mode, given the tightening of financial conditions already in the bag and that which the market has already priced in: “the Committee expressed uncertainty about the resilience of consumer spending and business investment....(and) also noted that increases in interest rates to householdsandbusinesses had already tightened monetary conditions. High levels of household debt, and a large share of fixed-rate mortgages re-pricing in coming months, could increase the sensitivity of consumer spending to these interest rate increases.” Later today, we have a stack of US data releases crammed into today because of the Thanksgiving holiday tomorrow (and for most, Friday as well). The most important of these is the October PCE Infation data print. Not expecting much from the FOMC minutes later as all eyes are on whether we are set for an acceleration of the QE taper at the December FOMC meeting, with some arguing that Powell and company have more room to move and administer a bit more hawkish message, if they so desire, as the nomination news is out of the way and this reduces hyper-sensitivity to bringing any message that could risk cratering market sentiment. Chart: AUDNZDThe 2-year yield spread between Australia and New Zealand has risen sharply in recent days and especially overnight, where the more cautious than expected tones from the RBNZ inspired a 14 basis point drop in 2-year NZ yields. The price action in AUDNZD was sympathetic with the rally back toward local resistance near 1.0450, though the rally needs to find legs for a move up to 1.0600 at least to indicate we may have put a structural low in with a double bottom here. A brighter relative outlook for  Australia could be in the cards if China is set to stimulate and raise steel output, the anticipation of which has already sharply lifted iron ore prices this week, a key indicator for the Aussie. No notable expectations for the Riksbank tomorrow – as the central bank is expected to wind down its balance sheet expansion next year, while the policy forecast is thought to be in play (perhaps a late 2024 lift-off built into expectations, though the market is ahead of that as 2-year Swedish swap rates have risen close to 30 basis in recent weeks. This is the area where the Riksbank can surprise in either direction relative to expectations). The EURSEK rally has now reversed the entirety of the prior sell-off leg and double underlines the very weak sentiment on Europe, which remains “non-existential” in nature, i.e., so far the market is keeping this about policy divergence and dark clouds over the economic outlook, not about the longer term viability of the EMU, etc…, which in the past 2010-12 crisis inspired SEK upside as a safe haven. Table: FX Board of G10 and CNH trend evolution and strengthA bit of a relative pick-up in petro-currencies in the wake of yesterday’s oil rally, as the market bought the fact of US President Biden announcing a release of barrels from strategic reserves. Elsewhere, the NZD is losing relative altitude and the USD and especially CNH reign supreme. Table: FX Board Trend Scoreboard for individual pairs.Here, note AUDNZD flipping back to positive - a move that would be “confirmed” by a close solidly above 1.0450. Also note NOKSEK trying to flip positive on the latest oil rally, although beware the Riksbank meeting up tomorrow there. .Upcoming Economic Calendar Highlights (all times GMT) 1330 – US Weekly Initial and Continuing Jobless Claims 1330 – US Oct. Advance Goods Trade Balance 1330 – US Q3 GDP Revision 1330 – US Oct. Durable Goods Orders 1430 – UK BoE’s Tenreyro to speak 1500 – US Oct. PCE Inflation 1500 – US Final University of Michigan Sentiment Survey 1500 – US Oct. New Home Sales 1900 – US FOMC Meeting Minutes
Waking Up the Giants

Waking Up the Giants

Monica Kingsley Monica Kingsley 24.11.2021 16:03
S&P 500 recovered from session lows, and is likely to keep chopping around in a tight range today. Tech found solid footing in spite of sharply rising yields, which value (finally) embraced with open arms. The riskier end of credit markets doesn‘t yet reflect the stabilization in stocks, which is a first swallow. Make no mistake though, the fresh Fed hawkish talking games are a formidable headwind, and animal spirits aren‘t there no matter how well financials or energy perform. These are though clearly positive signs, which I would like to see confirmed by quite an upswing in smallcaps. All in all, this is still the time to be cautiously optimistic, and not yet heading for the bunker – that time would probably come after the winter Olympics (isn‘t it nice how that rhymes with the post 2008 summer ones‘ price action too?). Market reaction to today‘s preliminary GDP data will likely be a non-event, and we‘ll still probably make fresh ATHs before stocks enter more turbulent times. In spite of the cheap Fed talk still packing quite some punch, let‘s keep focused on the big picture and my doubts as to the Fed‘s ability to carry out the taper, let alone (proactive? No, very much behind the curve) rate raising plans – as said the prior Monday or yesterday: (…) the Fed is still printing a huge amount of money on a monthly basis, and it remains questionable how far in tapering plans execution they would actually get – I see the risks to the real economy coupled with persistently high inflation as rising since the 2Q 2022 (if not since Mar already, but most pronounced in 2H 2022. (…) True, the bullish argument for the dollar stepped to the fore as yields differential between the U.S. and the rest of the world got more positive, and at the same time, various yield spreads keep compressing. That‘s a reflection of less favorable incoming economic data. Just as much as Friday‘s reaction was about corona economic impact projections, yesterday‘s one was about monetary policy anticipation. Inflation expectations though barely budged – the decline doesn‘t count as trend reversal. CPI isn‘t done rising, and the more forward looking incoming data (e.g. producer prices) would confirm there is more to come. All in all, it looks like precious metals (and to a smaller degree commodities), are giving Powell benefit of the doubt, which I view to be leading to disappointment over the coming months. Should Powell heed the markets‘ will, the real economy would weaken dramatically, forcing him to make a sharp dovish turn – and he would, faster than he flipped since getting challenged in Dec 2018. Inflation expectation indeed held up during the day, marking modest, lingering doubts about Fed‘s ability to execute. Its credibility isn‘t lost, but would be put to a fresh test over the nearest weeks and months. The real economy can still take it, and not roll over – we are in the very early tapering stage so far still. Commodities are pointing the way ahead, and it‘s time for precious metals to shake off the inordinately high levels of fear, which mark capitulation more than anything else. Just when I was writing that it‘s as if the PMs bulls didn‘t trust the latest rally... Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bulls stepped in, the volume is semicredible. I like the lower knot, and would look for increasing market breadth to confirm the short-term reversal. It‘s my view we haven‘t made a major top on Monday. Credit Markets It‘s too early to call a budding reversal in credit markets – HYG needs to pull its weight better. Gold, Silver and Miners Precious metals haven‘t yet regained footing, but that moment is quickly approaching – in spite of the above bleak chart. Compare to the Jun period – Fed‘s talk was more powerful then. Crude Oil Crude oil bulls have made a good move, and more strength did indeed follow. The bottom is in, and many countries tapping their strategic reserves, proved an infallible signal. I look for consolidation followed by further strength next. Copper Copper springboard is getting almost complete, and I think the drying up volume would be resolved with an upswing. The daily indicators are positioned as favorably as the CRB Index is. Bitcoin and Ethereum Bitcoin and Ethereum are still correcting, and the upcoming Bitcoin move would decide the direction over the next few weeks. The takeaway from cryptos hesitation is that real assets can‘t expect overly smooth sailing yet. Summary S&P 500 bulls would ideally look to value outperforming tech on the upside, confirmed by HYG at least stopping plunging. A brief yields reprieve would come once the Fed steps away from the spotlight, which is another part of the bullish sentiment returning precondition set. Overall, the very modest S&P 500 moves keep favoring the bulls within the larger topping process. Keep in mind that the Fed isn‘t yet in a position to choke off the real economy through slamming on the breaks, it‘s just the forward guidance mind games for now. We are waiting for the bit more seriously than last time meant, but still a bluff, getting questioned again, as inflation expectations haven‘t broken down, and are facilitating the coming PMs and commodities runs. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Crude Oil: Anticipating Dips in the Near-Term

Crude Oil: Anticipating Dips in the Near-Term

Sebastian Bischeri Sebastian Bischeri 24.11.2021 16:49
The market is struggling with further downward pressure, triggered by a stronger US dollar, and threats that the US and others will start using their strategic oil reserves. Trade Plan Review Indeed, Japanese Prime Minister Fumio Kishida said on Saturday (Nov 20th) that his government was considering drawing on oil reserves in response to rising crude prices. Since Japan sources most of its oil from the Middle East, the recent surge in prices and the decline of the yen have pushed up import cost for the Japanese archipelago. As a reminder, last week I anticipated a lower dip that would take place onto the $75.25-76.22 yellow band. The recommended objective would be the $79.37 and 82.24 levels. My suggested stop would be located on the $74.42 level (below both the previous swing low from 7-October and the previous high-volume node and volume point of control (VPOC) from September). Alternatively, you could also eventually use an Average True Range (ATR) ratio to determine a different level that may suit you better. For now, that dip did happen Friday around that support area (likely to become a demand zone) where we might see some ongoing accumulation for the forthcoming hours. Now, we can observe a doji formation (candlestick figure), and more precisely a long-legged doji appearing on the daily chart, which is generally synonymous with indecision. WTI Crude Oil (CLF22) Futures (January contract, daily chart) To visualize how the price action is currently developing, let’s zoom into the 4H chart, which illustrates a much clearer downtrend: WTI Crude Oil (CLF22) Futures (January contract, 4H chart) So, as you can see, even on that lower timeframe we have a doji pattern, where the bulls are trying to take over the bears to push the market towards higher levels. Will the current 4H downtrend extend lower, or will the longer-term (daily) uptrend resume its rally? Let’s see where this is going to end up. Here is the latest chart from today (Nov 24th): Figure 1 - WTI Crude Oil (CLF22) Futures (January contract, monthly chart) By the way, my trade target for WTI Crude Oil positions has almost been reached. Please check out more details on my latest oil targets in Monday’s article. That’s all for today, folks. Happy trading! Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
The Trade Off — Episode #001

The Trade Off — Episode #001

Chris Weston Chris Weston 25.11.2021 10:20
The battle has begun. Get ready and experience the first episode of ‘The Trade Off’. This weekly series features Blake Morrow (ForexAnalytix) and our very own Chris Weston, as they engage in an energetic debate of the financial markets - what’s hot, what’s not and always breaking down the trade. This weekly show will be global, timely and relevant. Keen to learn more about trading and the charts Blake and Westy are talking about? Tune into our charting techniques webinar next week: https://youtu.be/73bx8OtZqJs The Trade Off is powered by Pepperstone. Pepperstone is an online FX/CFD broker providing traders across the globe with cutting-edge technology to trade the world’s markets. We’re driven to provide traders with low-cost pricing across all instruments including FX and CFDs (crypto, commodities, indices).
The Turkish Lira rebound, but hardly for long

The Turkish Lira rebound, but hardly for long

Alex Kuptsikevich Alex Kuptsikevich 25.11.2021 13:55
The Turkish Lira added 10% against the dollar and Euro from lows at the start of Wednesday. At the beginning of trading on Thursday, there was also a relative calm in the exchange rate performance. However, an important question to be answered in the coming days is how temporary this calm will be. The fundamentals for the Turkish currency are unchanged: The Turkish central bank and the President continue to argue about the benefits of low-interest rates for the economy and benefits of competitiveness through a weaker currency. But it should not be forgotten that these factors only have a positive effect when the currency has stabilised, and the financial markets have a point of reference. Right now, the economy is suffering a severe shock from a 40% devaluation of the Lira against the USD so far this month to yesterday low. Even worse, such rate hikes are shaping expectations for further depreciation and further spurring sales of the Lira. Retailers and manufacturers in such circumstances prefer to fix prices of goods in harder currencies, which causes a shock freeze in economic activity. The example of Apple’s retail shops being closed because of the Lira’s devaluation is striking but hardly the only one. What we are likely seeing today, and perhaps for the next couple of days, is just a brief moment of stabilisation before a new wave of pressure on the Lira, which could continue right up to the policy changes. Whether it will be capital controls or rate hikes is an open question, but for sure, the answer won’t be easy.
Santa preparing to take back the reins of the market! | MarketTalk: What’s up today? | Swissquote

Silver on Christmas gift list

Korbinian Koller Korbinian Koller 26.11.2021 11:06
Monthly chart, Silver in US-Dollar, favorable timing: Silver in US-Dollar, monthly chart as of November 26th, 2021. Timing for a physical acquisition is in alignment as well. The monthly chart shows a high likelihood for November’s candle closing as an inverted hammer. Consequently, it provides for silver prices approaching the low end of the last 17-month sideways range near US$22. The white line assumes a potential price projection for 2022. Even if we are wrong with our assessment, a gift of silver for a long-term horizon is highly likely to appreciate from momentary levels to a much higher price target. Silver in US-Dollar, weekly chart, silver on Christmas gift list: Silver in US-Dollar, weekly chart as of November 26th, 2021. The value of a gift like this doesn’t stop there. Numismatics provides for children and teenagers a way to study history. Beautiful coins and bars inspire us to hold on to value for future times and encourage saving. The weekly silver chart shows in a bit more detail possible price expansion from a time perspective. This would be our most conservative picture of the future. The green bordered box is an entry zone for a potential reversal to the upside. With a high likelihood of an interest rate change by the Federal Reserve Bank in the second quarter of 2022, the inner yellow curve supersedes in probability for the expected time frame for a price increase. Silver in US-Dollar, daily chart, physical only, spot to risky: Silver in US-Dollar, daily chart as of November 26th, 2021. If you look at the daily chart above, you will find that we have seen a swift downward move in the past. Under our beauty principle, there is a good likelihood that this might occur again. If so, reaction times are much longer with a physical purchase than with spot price trading. Meaning there is no need to precision trade (precision purchase) physical silver, but be not spooked if a swift, extended decline might happen. Consequently, we are pointing this purchase out for physical acquisition only but do not advise taking a spot price position based on the risk.   Phase 1 drilling program at Guigui discovered not only the largest intrusive ever found in the district, but it’s the first mineralized skarn ever seen in Guigui! Silver on Christmas gift list: In this bargain hunting season around Black Friday, we find it is especially sensible to refocus and ask different questions. The human psyche is prone to give in to instant gratification, especially after the hard time the last two years provided. But with this much at stake for 2022, possibly being a year that sets a mark in history, it might be more prudent to look for wealth preservation in a longer time horizon to invest one’s fiat currencies rather than short-lived pleasures. After all, a careful look for generations to come, your children, is a view most valuable in general. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can also subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|November 26th, 2021|Tags: Crack-Up-Boom, Gold, Gold/Silver-Ratio, inflation, low risk, Silver, silver bull, Silver Chartbook, silversqueeze, technical analysis, time frame, trading principles|0 Comments About the Author: Korbinian Koller Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
New virus strain pulls back online vs offline bets in equities

New virus strain pulls back online vs offline bets in equities

Peter Garnry Peter Garnry 26.11.2021 11:52
Equities 2021-11-26 11:20 7 minutes to read Summary:  Equities markets are selling off due to new virus strain due to this strain being much more infectious than the current dominant variants, but more importantly uncertainty over how effective the vaccines will be on this new strain. This uncertainty lifts the probability of more lockdowns and travel restrictions and as a result traders selling off physical companies in energy, mining, financials and consumer discretionary against health care, utilities, and technology stocks. While overshadowed of today's risk-off event there have been several key news out on Chinese equities related to Didi Global, Evergrande, and Meituan which we cover in today's equity update. Equities react to increased likelihood of new lockdowns Financials markets are in upheaval over a new Covid virus strain (called the Nu variant) has been identified in South Africa, which seems to be more infectious than the current dominant strains. With Europe and some northern parts of the US in a stretched situation to an already high number of new cases and hospitalizations, this new virus strain comes at the worst possible time. The good thing is that the more infectious the virus get the less likely it is to also get more virulent, but it can still put pressure on hospitals. Equities are reacting negatively because it is unknown at this point to what degree the vaccines will be effective against the new strain, and thus it increases risk of new lockdowns which leads to an economic hit. Another good thing is that South Africa has been open and transparent about the virus strain which means that countries can react faster and because societies are better prepared the impact overall on the economy such be less than initially during the pandemic. The online vs offline companies trade is expressed today Due to the rising probability of lockdowns, which was already in play before the news of the new virus strain, traders and investors are again pulling out the pandemic playbook on equities. The chart below shows Nasdaq 100 futures vs Stoxx 50 futures over the past 10 trading days which expresses the online/technology vs offline/physical companies. The idea is that online companies can better weather new lockdowns where as companies operating in the physical world obviously are more impacted by travel restrictions and potential lockdowns. Smaller companies are also more vulnerable which is why Russell 2000 futures and the global index on small cap companies are under pressure today. Liquidity is thin today going into the weekend and being on the backside of Thanksgiving in the US (trading in US equities ends today at 1300 EST) and thus the initial reaction in equities was aggressive, whereas a couple of hours into trading European equity futures have bounced back somewhat. Not surprisingly the worst performing sectors today in Europe are energy (lower demand for oil), financials (potential hit to loan books), industrials (more supply constraints and lower demand), consumer discretionary (lower demand for cars and other large consumer items), where as health care, utilities, and technology companies are less off as these sectors are necessities and can weather lockdowns better. China equities continue to weighed down by bad stories Besides the risk-off trade in equities several key stories have hit Chinese equities over the past 24 hours. The Chinese government has asked Didi Global to delist from NYSE emphasizing once again the hidden volatility in Chinese listed stocks in the US. Our view remains that investors that want exposure to China should do that through mainland and Hong Kong listings. Stocks related to the housing market was impacted negatively today from news that Evergrande’s founder Hui Ka Yan has sold shares worth $344mn which is seen as a negative for the company and the industry’s outlook, as the Chinese government is urging Hui to use his own wealth to bolster the company’s finances. Finally, Meituan has reported Q3 earnings showing revenue growth of 38% as expected but operating margins under pressure leading to widening losses as the technology crackdown and “Common Prosperity” are forcing Meituan to increase operating expenses on social security for its gig workers. Appendix: 5-year chart on Nasdaq 100 and Stoxx 50 futures
Crude Oil Didn’t Like Thanksgiving Turkey This Year

Crude Oil Didn’t Like Thanksgiving Turkey This Year

Sebastian Bischeri Sebastian Bischeri 26.11.2021 15:46
  It appears that the US markets didn’t find the Thanksgiving turkey very tasty this year. CBOE Volatility S&P 500 Index (VIX) Futures (daily chart) With the “indicator of fear” (also known as the VIX or Volatility Index) spiking over 13.5 % in the European session, propelling some precious metals (gold and platinum) and natural gas to the roof, while sending the crude and petroleum products to the lower ground, the volatility has just clearly reached a higher level. (Source: FINVIZ) Most of our premium subscribers enjoyed a last ride on the long side for WTI crude oil this month while following our trade projections. For more details of the last oil trading position provided last week, I have just released that trade as it got very close to reach its projected target on Wednesday (Nov. 24). WTI Crude Oil (CLF22) Futures (January contract, daily chart) The main fears on the oil market come from the possibility of a demand slowdown starting from Q1 2022. Additionally, that timing happens when the United States, along with a larger group of countries (including China, India, Japan, Republic of Korea, and the UK) have made the decision to release some of their strategic oil reserves on the market, aiming at artificially increasing the supply, and thus lowering oil prices. Well, this may represent one driver of prices indeed, although a more general economic slowdown associated with a non-sustained demand as we are getting into the winter, may be the main concern now. On the other hand, the winter – expected to be colder in certain regions – is also supporting the gas prices, hence the recent surge on the Henry Hub futures, along with sustained US exports of Liquefied Natural Gas (LNG) that are also supporting natural gas prices. Henry Hub Natural Gas (NGF22) Futures (January contract, daily chart) In conclusion, we could be entering a new volatile period on the global markets, associated with various fears maintained through headlines by media (Covid variants, restrictions, etc.). For now, I would suggest staying away from the noisy headlines and just relax and enjoy some new pieces of turkey leftovers, or whatever else if you don’t eat meat. Ignore the noise and trade what you see (not what you think). Stay tuned and enjoy your weekend! As always, we’ll keep you, our subscribers well informed. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve a high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
FX Update: Position squaring in FX as new covid strain roils markets

FX Update: Position squaring in FX as new covid strain roils markets

John Hardy John Hardy 26.11.2021 14:30
Forex 2021-11-26 14:05 5 minutes to read Summary:  The contagion across asset markets triggered by new covid strain concerns has hit FX in the form of classic deleveraging, as euro and yen shorts are squeezed on a reversal of recent US yield rises and safe haven seeking, while the US dollar gets a pass elsewhere because it is still safer than smaller, less liquid currencies, particularly in EM. The timing is terrible for this wave of risk aversion as we have thin trading conditions over the US Thanksgiving holiday.   FX Trading focus: Position squaring hits heavy euro- and yen shorts Risk contagion across the board overnight on the news of a new covid strain in South Africa with significant mutations and signs of overtaking as a percentage of cases in regional outbreaks. There may a sudden “straw that broke the camel’s back” angle to this, given the covid concerns elsewhere, particularly in Europe. The timing is worse than unfortunate, as the liquidity backdrop of particular concern as the news has hit with the US out on holiday yesterday and only open for half a session today, with few likely anticipating until last night or this morning that they would even need to bother showing up for work today. The sense of whiplash has been particularly acute as we have just had a look at US President Biden nominating Powell for a second term and many highlighting the focus on inflation in his acceptance speech for the nomination, with Brainard’s acceptance speech also highlighting inflation as a major concern. This had jolted Fed expectations for next year to new highs for the cycle at the outset of this week, and now just a few days later we get covid mutation concerns that have sent a deleveraging wave across markets. In US treasuries, this has mean a sharp drop along the entire US yield curve, giving the euro and the yen a strong boost, as the euro in particular was headed south and fast on the policy divergence theme of the ECB seen likely to maintain zero rates and even some level of QE out over the horizon while the market had priced in three full Fed rate hikes by the end of next year before this sudden reversal. On the weak side, while the US dollar has fallen within the G3 and is approximately flat against sterling, the smaller currencies are sharply lower against all of the above, and EM generally doubly so. Meanwhile, a chunky new drop in oil prices on the anticipation of widening international travel restrictions and even domestic lockdowns in places is adding to the NOK woes just after that currency was trying to recover versus the single currency last week, sending EURNOK up through its 200-day moving average and above 10.20 at one point today after trading below 9.70 barely over a month ago. Chart: AUDJPYAUDJPY is doing its usual job of capturing a wave of risk aversion as the lurch lower in risk sentiment was reflected here, and the clearly important 200-day moving average gave way with a bang. This is beginning to demolish the longer-term bullish hopes as it is a hold below the 200-day moving average here is a kind of confirmation of the rejection of the next cycle highs above 85.00 that were attempted last month. Theoretically, if the last gasp support of the 61.8% retracement of the local rally wave can avoid falling, there is shred of hope, but that would likely depend on a full reversal of everything we have just seen overnight. As we emphasized in this morning’s Saxo Market Call podcast, it is impossible to know how the virus situation shapes up here until further details emerge, but the market appears poorly positioned here for a more difficult global growth outlook at a time was just on how much the Fed is going to have to course correct and end QE and hike rates because US Q4 GDP is running incredibly hot. And that was in turn driving the predominant focus on relative policy divergences, with especially Europe being singled out for its particularly weak outlook, given the energy crunch and it being at the epicenter of the latest covid wave. If I am to poke around at places where moves are getting a bit overdone here in the short term, the EURSEK squeeze move looks a bit excessive, but that isn’t to say that poor liquidity and the usual market correlations can’t send it squeezing higher still. Yesterday, the Riksbank brought a rate hike into its forward guidance (late 2024) for the first time for the cycle at a time as the market is front running that and even pricing the ECB to achieve lift-off next year. Trading a market move like the one has developed overnight is tricky business as anything can happen and either direction. Concern may deepen and dramatically so that nations will scramble to limit the spread of this new variant until more is known, and we still know little about its virulence. And in the very short-term, a self-propelling position squaring can extend aggressively ahead of the weekend as risk managers force adjustments linked to the blow-up in volatility. Then the gap risk can move in the other direction over the weekend. Impossible to know, only to limit risk and exercise patience and a couple of weeks or more of headline risks before we know the lay of the land better. Table: FX Board of G10 and CNH trend evolution and strengthAs noted above, the big direction change here is in the euro and the JPY, which have pulled sharply higher in most crosses, with the Swiss franc happy to continue higher as well (suggesting that the USDCHF pair was increasingly important positioning-wise recently?). Elsewhere, SEK downside is beginning to look extreme, and CNH upside likewise if commodity prices continue to crater. Table: FX Board Trend Scoreboard for individual pairs.Far too early to talk trends when what we have here is a sudden positioning wipeout – but we will have to see how the next few days develop. Most “flips” as of this update are linked to the oil move (NOKSEK, CAD crosses etc.) although note the euro ripping higher against AUD and NZD.
Gold's Gains Get Marred as Biden Bonks Brainard

Gold's Gains Get Marred as Biden Bonks Brainard

Mark Mead Baillie Mark Mead Baillie 29.11.2021 08:32
The Gold Update by Mark Mead Baillie --- 628th Edition --- Monte-Carlo --- 27 November 2021 (published each Saturday) --- www.deMeadville.com  Five key points right off the top: â–  Indeed literally at the top: the above Gold Scoreboard displays valuation having crossed above the $4,000/oz. threshold; and yet you can own Gold for a fraction of that at $1,792/oz given yesterday's (Friday's) settle; "Got Gold?" â–  Both wrong -- and moreover shocked -- we were over Biden's handlers writing "Jerome Powell" rather than "Lael Brainard" on the FedHead index card for the President to read aloud this past Monday; a selection 180° anti-correlative with the Administration's endless money 'n climate change modus operandi; â–  The emphasis of last week's piece was for a near-term technical pullback in Gold's price, wherein 'twas stated "...the 1800s ... appear safe..."; rather, this past week's low was 1777, the "Powell" selection being the fundamental impetus justifying that technical condition; â–  Prior to The WHO's (not the band, but the U.N. organization) effort to maintain its raison d'être with Friday's "Oh my! Omicron!" scare, we were prepared to state that "Powell" would push for a FedFunds rate hike in the 26 January Policy Statement; but if this instead is "The Beginning of the End, Part Deux", shall they ever raise again? â–  And "Oh my! Omicron!" in turn is credited as the catalytical scapegoat for the S&P 500's -2.3% loss on Friday, (recall the single-day COVID losses in 2020 were several times that amount); yet still not a FinMedia peep about the S&P's earnings levels simply not being supportive of the Index: our "live" P/E = 49.3x; its lifetime median = 20.4x; (ready for the next means reversion?) Now: but for two trading day's remaining in November's balance, let's go with the following usual month-end graphic, albeit both Monday and Tuesday can well blow us far from Kansas, Toto. Thus with that in mind and seat belts fastened, here are the BEGOS Markets Standings year-to-date. The economically-driven markets dominate the top three podium spots whilst the safe havens remain the also-rans. "Everything's great!" right? Specific to Gold, as above shown -5.7% to this point in 2021, here below we've the weekly bars and parabolic trends, the ongoing blue-dotted Long stance now four weeks in duration. As measured from a year ago, this past week was Gold's third worst performance on both a points and percentage loss basis. A bit of a heartbreaker, that. Even as "Oh my! Omicron!" is wild-card bullish for Gold; yet "Powell" is the more hawkish-to-be FedHead selection (bearish, but not really) for Gold: "You're saying that because rising rates have actually found Gold to rise too, right, mmb?" Spot on there, Squire. Lest we forget, from 2004-2006 the FedFunds rate rose from 1% to 5% and Gold from 380 to 710. Further, to reiterate, Gold by U.S. monetary debasement (wildly bullish) is today worth the Scoreboard-noted 4001. Either way, Gold's year-over-year percentage track has been, on balance, sideways. Which in turn really emphasizes the "Live by the miners, Die by the miners" nature of precious metals-based equities as is starkly made obvious here: For the record from this time a year ago, as positive we've only Franco-Nevada (FNV) +5%, followed in decline by Gold itself -1%, Newmont (NEM) -3%, the Global X Silver Miners exchange-traded fund (SIL) -5%, the VanEck Vectors Gold Miners exchange-traded fund (GDX) -6%, Pan American Silver (PAAS) -12%, and Agnico Eagle Mines (AEM) -19%. (Note to those of you fortunate enough to be scoring at home: the U.S. Money Supply for the same period is +12% versus the supply of Gold just +1% ... Pssst: again, "Got Gold?"). As for our Economic Barometer, the past week's slate of incoming metrics found but one which was negative: October's Durable Orders (itself a volatile series). The balance of the bunch had improvements including Home Sales (both New and Existing), plus Personal Income and Spending. But the "turn a blind eye to it" Q3 Chain Deflator was revised upward: that's the party pooper, further highlighted by the Fed's favourite gauge of inflation -- Core Personal Consumption Expenditures -- doubling its October growth over that for September. "Hey Jay! Raise 'em 26 January anyway?" Here's the Baro along with the wee pullback in the S&P: Next as we go 'round the horn with the BEGOS Markets, their respective rightmost daily bars are indicative of Friday's "Oh my! Omicron!" effect. And note from the safe haven standpoint the net comparable under-performance of the precious metals vis-à-vis the leaps by the Bond, Euro and Swiss Franc. As well, the three year-to-late leaders in the aforeshown BEGOS Markets Standings turned tail toward butt ugly, namely Oil, Copper and the S&P 500. And with all those baby-blue dots of trend consistency on the skids, a Santa Claus rally doesn't at present appear in the bids: As for the 10-day Market Profiles for the precious metals, be it for Gold on the left or Silver on the right, from each one's height, they now hardly look right. Indeed, the pick of "Powell" thus far trumps any Gold-positive fear of "Oh my! Omicron!": And thus Gold for November has gone from stud to dud, the rightmost monthly bar below barely green by a nub. Gold's trying to re-secure The Northern Front remains a Battle Royale: So there it all is. Gold was on a November roll -- up some 95 points (+5.3%) -- just over a week ago, albeit with momentum already perceptively slowing, our last missive showing. Then Monday came Biden's shocking bonking of "Brainard" toward maintaining "Powell" as FedHead, and from the month's high of 1880, Gold post-bonk was swiftly down over 100 points. Even as a safe-haven following Friday's WHO surprise "Oh my! Omicron!" cry, Gold bounced a bit, but failed to hold grip, the question now being: "Does Gold further slip?" Regardless, we answer: "Just buy Gold's dip!" Cheers! ...m... www.deMeadville.com www.deMeadville.com
Day That Changed the World?

Day That Changed the World?

Monica Kingsley Monica Kingsley 29.11.2021 15:48
S&P 500 and pretty much everything apart from Treasuries and safe haven plays down precipitously, with panic hitting oil the hardest. The post Thanksgiving session turned out not so light volume one, but the fear wasn‘t sending every risk-on asset cratering by a comparable amount. What we have seen, is an overreaction to uncertainty (again, we‘re hearing contagion and fatality rate speculations – this time coupled with question mark over vaccine efficiency for this alleged variant), and the real question is the real world effect of this announcement, also as seen in the authorities‘ reactions. Lockdowns or semi-equivalent curbs to economic activity are clearly feared, and the focus remains on the demand side for now, but supply would inevitably suffer as well. Do you believe the Fed would sit idly as the economic data deteriorate? Only if they don‘t extend a helping hand, we are looking at a sharp selloff. Given the political realities, that‘s unlikely to happen – the inflation fighting effect of this fear-based contraction would be balanced out before it gets into a self-reinforcing loop. With the fresh stimulus checks lining up the pocket books, Child and Dependent Care Tax Credit etc., we‘re almost imperceptibly moving closer to some form of universal basic income. Again, unless the governments go the hard lockdown route over scary medical prognostications (doesn‘t seem to be the case now), such initiatives would cushion financial markets‘ selloffs. Looking at Friday‘s price action, PMs retreat shows that all won‘t be immediately well in commodities, where oil looks the most vulnerable to fresh bad news in the short run (while stocks would remain volatile, they would find footing earliest). Demand destruction fears are though overblown, but the dust looks to need more time to settle than it appeared on Friday above $72-$73: (…) New corona variant fears hit the airwaves, and markets are selling off hard. We can look forward for a light volume and volatile session today – S&P 500 downswing will likely be cushioned by the tech, but high beta plays will be very subdued. Commodities are suffering, and especially oil is spooked by looming (how far down the road and in what form, that’s anyone’s guess) economic activity curbs / reopening hits. Precious metals are acting as safe havens today (mainly gold) while the dollar is retreating – and so will yields, at least for the moment. Time for readjustment as the wide stop-loss in oil was hit overnight – it’s my view that the anticipated demand destruction taken against the supply outlook, is overrated. When the (rational / irrational) fears start getting ignored by the markets, we‘re on good track. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 is still far out of the woods, and a good sign of better days approaching would be tech and healthcare sound performance joined by financials and energy clearly on the mend. Earliest though, HYG should turn. Credit Markets It‘s too early to call a budding reversal in credit markets – HYG needs to not merely retrace half of its daily trading decline. Money coming out of hiding in Treasuries, would be a precondition of prior trends returning. They will – they had been merely punctured. Gold, Silver and Miners Precious metals gave up opening gains, and with the hit to inflation expectations, lost the developing tailwind. It would though come back in an instant once calm minds prevail or fresh stimulus gets sniffed out. Crude Oil Crude oil had a catastrophic day – how far are we along capitulation, remains to be seen. The oil sector didn‘t decline by nearly as much, highlighting the overdone and panicky liquidation in black gold. Copper Copper decline didn‘t happen on nearly as high volume as in oil, making the red metal the likelier candidate for a rebound as the sky isn‘t falling. Bitcoin and Ethereum Bitcoin and Ethereum marching up on the weekend, were a positive omen for the above mentioned asset classes. In spite of cryptos still being subdued, the overall mood is one of catious optimism and risk very slowly returning. Summary Friday‘s rout isn‘t a one-off event probably, and S&P 500 would turn higher probably earlier than quite a few commodities. Cynically said, the variant fears let inflation to cool off temporarily, even as CPI clearly hasn‘t topped yet. As demand destruction was all the rage on Friday, supply curbs would get into focus next, helping the CRB Index higher – and that‘s the worst case scenario. Precious metals certainly don‘t look to be on the brink of a massive liquidation – the current selloff can‘t be compared to spring 2020. For now, the price recovery across the board remains the question of policy, of policy errors. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Decentraland price to provide a buy opportunity before MANA sets new highs at $7.5

Decentraland price to provide a buy opportunity before MANA sets new highs at $7.5

FXStreet News FXStreet News 30.11.2021 14:58
Decentraland price is seeing a minor pullback after a 10% upswing. The correction could extend, allowing MANA to retest $4 before rallying to a new all-time high at $7.5. A breakdown of the range low at $2.73 will invalidate the bullish thesis. Decentraland price is currently undergoing a minor retracement. This downswing is likely to continue until it retests a crucial reversal zone. But the move will provide sidelined buyers with an opportunity to accumulate before starting a new upswing to potentially fresh all-time highs. Decentraland price prepares for a blastoff Decentraland price has been teetering around the 50% retracement level at $4.32 for quite some time. Even the COVID-induced crash did not push it below the level. Instead, MANA rallied roughly 10% to $5.23, but it is now experiencing a short-term pullback. Investors can expect Decentraland price to head lower and pierce through the trading range’s midpoint at $4.32. This move will put it closer to a reversal zone, extending from $3.40 to $3.94. A dip into this area will allow sidelined buyers to accumulate and get on the Metaverse bandwagon, propelling Decentraland price to rally. The first hurdle that MANA will face is $4.32, followed by the range high at $5.9. Clearing these ceilings will open the path to new highs. The 100% Fibonacci extension level at $6.31 is close to the range high and is likely to be tagged quickly. However, it could go further – market participants could expect MANA to retest the 161.8% Fibonacci extension level at $7.53. This run-up will indicate a 91% ascent from $3.93 and set a new high for the Metaverse token. The downswing into the buy zone might sound alluring, but investors should note that it will only arrive if the midpoint of the trading range at $4.32 is breached. Failing to do so might trigger a premature uptrend for MANA. MANA/USDT 4-hour chart While things are looking up for Decentraland price, a breakdown through the base of this high probability reversal zone, ranging from $3.93 to $3.40, will be indicative of weak bullish momentum. A daily close below $3.40 is likely to trigger a retest of the range low at $2.74. If Decentraland price produces a swing low beneath this barrier, it will invalidate the bullish thesis.
Feeling the Quickly Changing Pulse

Feeling the Quickly Changing Pulse

Monica Kingsley Monica Kingsley 30.11.2021 16:15
S&P 500 rebound still ran into selling pressure before the close – the bulls lost momentum however well the government and Fed‘s words were received. Credit markets hold the key – specifically, how corporate bonds and Treasuries perform compared to each other. This would be also reflected in the yield spreads, dollar moves, or cylicals vs. stay-at-home stocks.Today‘s analysis will be shorter than usually, so let‘s dive into the charts to fulfill my title‘s objective (all charts courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 is still far out of the woods, and the bulls have to decidedly repel any selling pressure - a good sign of which would be a close in the 4,670s.Credit MarketsAs encouraging as the HYG upswing is, it‘s too early to call a budding reversal a done deal. LQD to TLT performance is a good start, which however needs to continue. The worst for the bulls would be renewed rush into Treasuries, sending other parts of the bond market relatively down.Gold, Silver and MinersPrecious metals retreated again, but the bullish case is very far from lost. As discussed in the caption, the upswing appears a question of time – gold and silver are ready to turn on soothing language of fresh accomodation.Crude OilCrude oil upswing left a lot to be desired and as I tweeted yesterday, remains the most vulnerable within commodities. The dust clearly hasn‘t settled yet within energy broadly speaking.CopperCopper held up considerably better than many other commodities, and gives the impression of sideways trading followed by a fresh upswing as having the highest probability to happen next.Bitcoin and EthereumBitcoin and Ethereum marching up today, is a positive omen for gradual and picky return of risk-on trades. The overall mood is still one of catious optimism.SummaryFriday‘s rout hasn‘t been reversed entirely, and markets remain vulnerable to fresh negative headlines. The degree to which current ones (relatively positive ones, it must be said) helped, is a testament of volatility being apt to return at a moment‘s notice. I‘m certainly not looking for the developments to break inflation‘s back – CPI clearly hasn‘t peaked. Precious metals are well positioned to appreciate when faced with any grim news necessitating fresh monetary or fiscal activism.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Intraday Market Analysis – USD Treads Water

Intraday Market Analysis – USD Treads Water

John Benjamin John Benjamin 01.12.2021 08:17
USDCAD seeks support The Canadian dollar edged higher after Q3’s GDP beat expectations. A bullish MA cross on the daily chart indicates a bullish bias in the US dollar’s favor. The break above the resistance at 1.2770 suggests that the bulls retain control of the direction. An overbought RSI has tempered the bullish fever temporarily, which may be an opportunity for buyers to accumulate. September’s high at 1.2900 is the next target. A bullish breakout could trigger an extended rally towards 1.3100. 1.2730 is now fresh support. AUDUSD falls towards 11-month low The Australian dollar bounced back on upbeat GDP in Q3. The break below 0.7170 has negated October’s rally. A bearish MA cross on the daily chart confirms that sentiment has turned sour. The Aussie is heading to October 2020’s low and the psychological level of 0.7000. An oversold RSI has prompted sellers to start to cover in that congestion area. 0.7190 is a resistance from the previous demand zone and trend followers are likely to sell a rebound. Buyers will need to take out those offers to ease the pressure. UK 100 to test daily support The FTSE 100 struggles with doubts about vaccine efficacy against the omicron variant. A drop below the daily support at 7190 triggered a sharp liquidation. Then a short-lived rebound has met stiff selling pressure at 7170. The index is hovering above the origin of the October rally at 6945. The bulls will need to clear the resistance before they could hope for a recovery. Otherwise, a bearish breakout would send the price to test the triple bottom (6830) from the daily timeframe. And that is the key to the uptrend’s integrity in the medium term.
Apple Stock Price and Forecast: AAPL still could reach $200 by year end

Apple Stock Price and Forecast: AAPL still could reach $200 by year end

FXStreet News FXStreet News 30.11.2021 17:39
Apple stock recovers ground on Monday as it rises 2%. AAPL shares close above $160 and just below all-time highs. Apple and equity indices see increased volatility as Omicron data awaited. After a freaky Friday, it was back to business as usual on Monday with equity markets putting in a solid start to the week. All those rookie traders who panicked on Friday were likely given a stern rebuke from returning senior traders who know that this market in 2021 is a one-way bet. That is thanks to the flow of money from the Fed juicing markets, a huge earnings potential from mega tech names and now a large buyback season as companies are past earnings blackouts. That is certainly what happened on Monday as volumes returned from Friday's reduced levels and markets got back to rallying. Goldman Sachs had said it does not see Omicron as a risk, and the South Africans appear to see this as an overreaction, with cases being reported as mild so far. Hopefully, this plays out to be true, but while it is hard to derail this 2021 bull, we could be in for some volatile weeks ahead. Apple (AAPL) stock news We await more concrete evidence on how sales look for Black Friday/Cyber Monday, but initial reports were not positive with overall online sales down on previous years. Wedbush though sees Apple selling 10 million iPhones over the Thanksgiving weekend and predicts 40 million iPhone sales between now and Christmas. It should be noted Wedbush is strongly bullish on Apple. They have been largely correct with that stance. Apple did receive some good news yesterday in the form of a price target raise from HSBC. Apart from that, it was relatively calm on the news front. Apple (AAPL) stock forecast AAPL stock really needs to break above $162 to hold Monday's gains and push on. Above there, volume thins out, so a move to all-time highs should be achievable. Failure though will likely see a move lower to $150. Volume is light until then apart from a slight spike with support at $157. AAPL 30-minute chart The daily chart shows the strong trend intact and the $157 support. Large volume support sits at $148. AAPL 1-day chart
Twitter steps out of Dorsey’s shadow

Twitter steps out of Dorsey’s shadow

Peter Garnry Peter Garnry 30.11.2021 17:54
Equities 2021-11-30 14:30 6 minutes to read Summary:  Twitter's founder Jack Dorsey is stepping down as CEO leaving the reign to CTO Parag Agrawal. This is hopefully the beginning of a new trajectory for Twitter that has underperformed relative to its potential for way too long. The company has two main objectives. Lift revenue growth to around 30% which would put Twitter well above Facebook and Alphabet in terms of growth, and then drastically improve the operating margin to around 35% which would be almost double of the current level. Is this Twitter’s Nadella moment? Another technology founder in Silicon Valley is leaving the stage, Mark Zuckerberg of Meta is one of the few left, with Jack Dorsey stepping down as CEO after presumed a lot of pressure from shareholders such as the activist hedge fund Elliott Management. His successor is the CTO Parag Agrawal and Dorsey will stay on the board for 2022. The main question is whether this is Twitter’s Nadella moment (Nadella is the current CEO of Microsoft and took over in 2014) meaning whether the new CEO with less strings attached and not being a founder can drastically change the growth and product profile of the company. Too much fat Our main issue with Twitter has always been the lack of consistency in operating margins. Given how consistent Google and Facebook are running their business it has always been a mystery why Twitter has not been more consistent in its operating performance. The company’s operating margin has come down for three straight quarters despite a healthy backdrop for online advertising spending in terms of demand and pricing. Free cash flow generation has been very disappointing over the past year and ultimately that has been driving the share price lower. Twitter has to fundamentally improve the EBITDA margin from its current 18.5% to somewhere closer to 35%; it will be a stretch to demand Facebook-like margin of 50%. If Twitter’s new CEO can deliver that then shareholders are in for some great returns. But more importantly there are no excuses for not delivering high revenue growth while improving the operating margin when you are generating $5bn in annual revenue. Facebook and many other technology companies have been able to grow revenue and operating margin at the same time. Twitter must do the same. Source: Bloomberg So there are two operating yardsticks for shareholders: revenue growth and operating margin. The latter should easily be done by either reducing headcount or at least stop hiring more people at the same pace as before. On revenue growth the key yardstick is to grow faster than the duopoly (Meta and Alphabet) which is expected to grow revenue around 20-25%. Twitter needs to take market share and get closer to Snap revenue growth in order not to lose the narrative and sentiment from investors. In our book, Twitter should be able to grow 30-35% on improved engagement, product features, more brand spending from large brands etc. and with analysts currently estimating 21% revenue growth in 2022, there is a heavy and urgent task ahead for the new CEO. Source: Bloomberg Twitter is an acquisition target With Dorsey gone as CEO and eventually leaving the board by late 2022, it clears the way for an acquisition of the company should the right buyer with the right price come by. Twitter could be an interesting bolt-on acquisition for a traditional media company that wants to enter the social media industry. Investors were initially trading the shares higher on the news of Dorsey stepping down, but the shares ended lower for the session now down 43% from the peak in late February. Given the expectations from earlier this year it is clear that the company has not performed as expected and the new CEO Agrawal will have to quickly earn the trust of investors. For Twitter we really hope this is the company’s Nadella moment. Analysts remain positive on the stock with a 12-month price target of $68 which 49% above yesterday’s close.
The Fed Worries About Inflation. Should We Worry About Gold?

The Fed Worries About Inflation. Should We Worry About Gold?

Arkadiusz Sieron Arkadiusz Sieron 30.11.2021 16:43
Oops!... Gold did it again and declined below $1,800 last week. What’s happening in the gold market? Did you enjoy your roast turkey? I hope so, and I hope that its taste – and Thanksgiving in general – sweetened the recent declines in gold prices. As the chart below shows, the price of the yellow metal (London P.M. Fix) plunged from above $1,860 two weeks ago to above $1,780 last week. It has slightly rebounded since then, but, well, only slightly. What exactly happened? Funny thing, but actually nothing revolutionary. After all, the reappointment of the same man as the Fed Chair and the publication of the FOMC minutes from the meeting that had already took place earlier in November, were the highlights before Thanksgiving. Well, sometimes lack of changes is a change itself and information about the past can shed some light on the future. Let’s start from Powell’s renomination for the second term as the Federal Reserve chair. In response, the market bets that the Fed will hike interest rates more aggressively in 2022 have increased. At first glance, the strong investors’ reaction seems strange, given that the monetary policy shouldn’t radically change with Powell still at the helm. However, the continuation of Powell’s leadership implies that Lael Brainard, regarded as more dovish than Powell, won’t become the new Fed Chair – what was expected by some market participants. Hence, the dovish scenario won’t materialize, which is hawkish for gold. Just two days later, the FOMC revealed the minutes from its November meeting. The main message – the Fed decided to taper its quantitative easing – was, of course, included in the post-meeting statement. The minutes revealed, however, that the Fed officials had become more worried about inflation and had expressed a more hawkish stance than the statement suggested. First of all, we learned from the minutes that some central bankers opted for more aggressive tapering and a more flexible approach that would allow for adjustments in the face of high and persistent inflation: Some participants preferred a somewhat faster pace of reductions that would result in an earlier conclusion to net purchases (…). Some participants suggested that reducing the pace of net asset purchases by more than $15 billion each month could be warranted so that the Committee would be in a better position to make adjustments to the target range for the federal funds rate, particularly in light of inflation pressures. Various participants noted that the Committee should be prepared to adjust the pace of asset purchases and raise the target range for the federal funds rate sooner than participants currently anticipated if inflation continued to run higher than levels consistent with the Committee's objectives (…) participants noted that the Committee would not hesitate to take appropriate actions to address inflation pressures that posed risks to its longer-run price stability and employment objectives. This is because the FOMC members’ concerns about inflation strengthened. As we can read in the minutes, They indicated that their uncertainty regarding this assessment had increased. Many participants pointed to considerations that might suggest that elevated inflation could prove more persistent. These participants noted that average inflation already exceeded 2 percent when measured on a multiyear basis and cited a number of factors—such as businesses' enhanced scope to pass on higher costs to their customers, the possibility that nominal wage growth had become more sensitive to labor market pressures, or accommodative financial conditions—that might result in inflation continuing at elevated levels. Last but not least, the Fed officials also made other hawkish comments. Some participants argued that labor force participation would be lower than before the pandemic because of structural reasons. It implies that we are closer to reaching the “full employment”, so monetary policy could be less accommodative. What’s more, “some participants highlighted the fact that price increases had become more widespread”, while a couple of them noted possible signs that inflation expectations had become less anchored. So, the Fed officials’ worries about inflation strengthened. Implications for Gold What does it all imply for the gold market? Well, both the reappointment of Powell as the Fed Chair and the latest FOMC minutes were interpreted as hawkish, which pushed gold prices down. The more upbeat prospects for monetary tightening are clearly negative for the yellow metal, as they boosted the bond yields (see the chart below). This is something I warned investors against earlier this month. I wrote in the Fundamental Gold Report on November 16 that “when something reaches the bottom, it should rebound later. And if real interest rates start to rally, then gold could struggle again.” This is exactly what happened. Later, in the article on November 18, I added that “I will feel more confident about the strength of the recent rally when gold rises above $1,900”. Well, gold failed to do this, so I’m not particularly bullish on gold right now. We could say that gold did it again: it played with the hearts of gold bulls but got lost in the game, as it didn’t resist the pressure. Yes, the new Omicron variant of coronavirus has been noted, and uncertainty about this strain could provide short-term support for the yellow metal. However, it seems that the prospects of monetary tightening and higher real interest rates will continue to put downward pressure on gold prices. I agree, the rally looked refreshing after months of disappointment. However, it seems that we have to wait longer, possibly for the start of the Fed’s increasing the interest rates, to see gold truly shining. If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
EUR/USD: Sellers aligning around the 1.1300 level

EUR/USD: Sellers aligning around the 1.1300 level

FXStreet News FXStreet News 30.11.2021 14:58
Concerns about the Omicron covid variant weigh on the market’s sentiment. German inflation peaked at 6% YoY in November, according to preliminary estimates. EUR/USD has lost bullish strength and may soon resume its decline. The EUR/USD pair trades marginally lower on Monday around the 1.1280 price level after hitting an intraday high of 1.1313. The American dollar is slowly recovering some of the ground shed on Friday as the market’s mood improves. Asian stocks plummeted, although European indexes trade with modest gains, leading to an uptick in US futures. US Treasury yields are also recovering ground, with the yield on the 10-year note currently at 1.54%. Concerns about a new coronavirus variant firstly detected in South Africa spurred risk aversion on Friday and triggered some measures such as borders closures. Still, the variant, named Omicron, has already been detected in different European countries. So far, the WHO has called it a variant of concern, although there’s not much information about it. Pfizer is developing a study to understand whether their vaccine works against this new strain, while Moderna announced a new shot to combat it could be developed by early 2022. Meanwhile, European Central Bank (ECB) governing council member Pablo Hernandez de Cos said this Monday that European policymakers aim to avoid the premature tightening of the monetary policy, repeating that high inflation could be expected to be transitory, despite being stronger and more persistent than anticipated a few months ago. On the data front, the EU published the November Economic Sentiment, which came as expected at 117.5, down from the previous 118.6. Germany published the preliminary estimate of its November Consumer Price Index, which came in higher than anticipated, up by 0.3% in the month and 6% YoY. The US will publish October Pending Home Sales and the November Dallas Fed Manufacturing Business Index after Wall Street’s close. EUR/USD short-term technical outlook The EUR/USD pair was unable to advance beyond the 23.6% retracement of its November decline at 1.1305, the immediate resistance level. According to the daily chart, the latest advance seems corrective, as technical indicators bounced from extreme readings, now resuming their declines and hinting at a bearish continuation. The 20 SMA maintains its firmly bearish slope above the 38.2% retracement of the same decline, reflecting sellers’ strength. The 4-hour chart shows that the pair remains above a mildly bullish 20 SMA, while technical indicators retreat from oversold readings but remain within positive levels. The bearish case will be firmer on a break below 1.1245, the immediate support level. Support levels: 1.1245 1.1200 1.1165 Resistance levels: 1.1305 1.1340 1.1395
Bitcoin, overcoming adversity

Bitcoin, overcoming adversity

Korbinian Koller Korbinian Koller 30.11.2021 10:47
Nevertheless, this might be over soon. Regulation might kill the majority of the expanded crypto world. Bitcoin might be banned, as it has been in the past in various countries. And yet, once fiat currency value implodes, bitcoin will be the last man standing. BTC in US-Dollar, Weekly Chart, last weeks call on the nose: Bitcoin in US-Dollar, weekly chart as of November 23rd, 2021. We posted the above weekly chart of bitcoin in last week’s chart book release. We anticipated a low-risk entry. BTC in US-Dollar, Weekly Chart, as planned: Bitcoin in US-Dollar, Weekly chart as of November 29th, 2021. Since then, prices have swiftly penetrated our entry zone. We caught two trades, a daily and a weekly time frame position. We posted these trades (entries and the partial exits), as usual, in real-time in our free Telegram channel.Furthermore, we employ a quad exit strategy that ensures instant risk elimination by quickly taking half of the position off. With entries of US$ 53,877 (daily timeframe trade) and US$ 54,000 (weekly timeframe trade), we were able, with first exits at US$ 54,591 and US$ 55,797, to not only eliminate risk but ensure profits on half of the positions of 1.33% and 3.33%. As well our next following targets have been reached! We took another 25% of position size out at US$ 55,811.6 and US$ 57,317.7, which booked us another 3.59% return on the daily position and 6.14% on the weekly position. The remaining 25% of position sizes on each trade we call runners. With stops set now at break-even entry levels, we can only produce additional winnings for each trade. Each trade had tight stops, assuring less than half a percent of risk per trade.   BTC in US-Dollar, Monthly Chart, modest odds for follow through: Bitcoin in US-Dollar, Monthly chart as of November 30th, 2021. The possible contrarian short signal on the monthly chart makes the weekly trades success probabilities for the runner smaller. Nevertheless, this quad exit approach allows for low-risk positioning versus endless mind chatter and debate since it is typical that different time frames show different long, short and sideways plays. Here, bitcoin again overcomes adversity. Typically, tight ranged instruments erase many trade opportunities for profit margins relating to commissions and risk to small. The earlier mentioned profit percent numbers are typical for bitcoins volatility and, as such, allow for risk reduction and short- to midterm profitability being more extensive than the average S&P500 annual return. Bitcoin, overcoming adversity: Bitcoin will be the cure to inflation damage for those you invested in it in a timely manner. Inflation is a creeping disease to money. Humans seem to have in history always procrastinated towards dangers of inflation, mostly since inflation treads slowly. Inflation also holds illusions supporting hope, hope that also fuels procrastination. While most who suffer under inflationary times think prices for goods went up, the reality is that monetary value went down. With this illusion, we hold on to stock portfolios seemingly rising, bonds, 401ks, and Roth IRAs trusting governments for the status quo to be protected or at least trouble to be temporary. Much more likely, most citizens are drained of their savings and cheated out of their retirements. At the end of such a monetary devaluation cycle, it will be the last time bitcoin will defend its place.  Doubt will finally vanish. Unfortunately, too late for those who did not educate themselves early enough to find a haven in this principled way to protect one’s wealth. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|November 29th, 2021|Tags: Bitcoin, Bitcoin bounce, Bitcoin bullish, bitcoin consolidation, crypto analysis, Crypto Bull, crypto chartbook, DeFi, low risk, quad exit, technical analysis, trading education|0 Comments About the Author: Korbinian Koller Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
Can You Hear It? That’s the Crowd Booing Gold’s Downturn

Can You Hear It? That’s the Crowd Booing Gold’s Downturn

Przemysław Radomski Przemysław Radomski 29.11.2021 15:46
Even though the technicals have been predicting this for several months, people were still taken aback by gold’s fall — that’s why they are booing. While the precious metals received a round of applause for their performances in October, I warned on several occasions that the celebration was premature. And with gold, silver, and mining stocks resuming their 2021 downtrends, investors’ cheers have turned into jeers in short order. To explain, I warned previously that the GDX ETF could rally to or slightly above $35 (the senior miners reached this level intraday on Nov. 12, moving one cent above it). However, with the GDX ETF’s RSI (Relative Strength Index) signaling overbought conditions, I highlighted just how quickly the air often comes out of the balloon. For context, the blue vertical dashed lines below depict the sharp reversals that followed after the GDX ETF’s RSI approached or superseded 70. Why am I telling you this? To emphasize that what happened recently was neither random nor accidental. What you see is a true, short-term top that formed in tune with previous patterns. You also see a fake inverse head-and-shoulders formation that was invalidated. This means that the implications of what happened really are bearish. Let’s check why and how, in tune with the past patterns, the previous broad top really was. Please see below: The GDX ETF rallied on huge volume on Nov. 11 and there were only 4 cases in the recent past when we saw something like that after a visible short-term rally. In EACH of those 4 cases, GDX was after a sharp daily rally. In EACH of those 4 cases, GDX-based RSI indicator (upper part of the chart above) was trading close to 70. The rallies that immediately preceded these 4 cases: The July 27, 2020 session was immediately preceded by a 29-trading-day rally that took the GDX about 42% higher. It was 7 trading days before the final top (about 24% of time). The November 5, 2020 session was immediately preceded by a 5-trading-day rally that took the GDX about 14%-15% higher (the high-volume day / the top). It was 1 trading day before the final top (20% of time). The January 4, 2021 session was immediately preceded by a 26-trading-day rally that took the GDX about 17%-18% higher (the high-volume day / the top). It was 1 trading day before the final top (about 4% of time). The May 17, 2021 session was immediately preceded by a 52-trading-day rally that took the GDX about 30% higher. It was 7 trading days before the final top (about 13% of time). So, as you can see these sessions have even more in common than it seemed at the first sight. The sessions formed soon before the final tops (4% - 24% of time of the preceding rally before the final top), but the prices didn’t move much higher compared to how much they had already rallied before the high-volume sessions. Consequently, since history tends to rhyme, it would have been only natural for one to expect the GDX ETF to move a bit higher here (but not significantly so) and for one to assume that this move higher would take between additional 0 to 7 trading days (based on the Nov. 12 session). That’s what is wrote to my subscribers – to expect this kind of performance. The final top formed on Nov. 16 - 4 trading days after the huge-volume session, practically right in the middle of the expected 0-7 trading day range. Moreover, since the GDX topped very close to its 38.2% Fibonacci retracement, it seems that miners corrected “enough” for another huge downswing to materialize. Having said that, let’s move on to more recent developments. Gold price declined heavily recently and the same goes for the silver price. What’s more, the proxy for junior mining stocks - the GDXJ ETF (our short position) materially underperformed on Nov. 26 – after it declined by nearly 3x the percentage of the GDX ETF – and, in my opinion, more downside is likely to materialize over the medium term. The GDXJ ETF ended the Nov. 26 session slightly below its 50-day moving average, and the milestone is often a precursor to sharp drawdowns. That’s what happened in late February 2020 and also in mid-June 2021. Big declines followed in both cases. Moreover, with the S&P 500’s weakness on Nov. 26 mirroring the onslaught that unfolded in early 2020, the GDXJ ETF’s underperformance follows a familiar script. As a result, another ‘flash crash’ for the pair may unfold once again. Keep in mind, though: while asset prices often don’t move in a straight line, a bullish pause may ensue if/once gold reaches its previous lows. All in all, though, lower lows should confront the GDXJ ETF over the short term and my $35 price target remains up to date. As a reminder, that’s only an interim target, analogous to the late-Feb. 2020 low. Interestingly, it is the February 2020 low along with its late-March 2020 high that created this target. Also, the GDXJ/GDX ratio is falling once again. And with the price action implying that the GDXJ ETF is underperforming the GDX ETF, a drop below 1 isn’t beyond the realms of possibility. In fact, it’s quite likely. As such, this is why I’m shorting the junior mining stocks. For context, I think that gold, silver and the GDX ETF are all ripe for sharp re-ratings over the medium term. However, I think that the GDXJ ETF offers the best risk-reward proposition due to its propensity to materially underperform during bear markets in the general stock market. Finally, the HUI Index/gold ratio is also eliciting bearish signals. For example, I marked (with the shaded red boxes below) just how similar the current price action is to 2013. And back then, after a sharp decline was followed by a small corrective upswing before the plunge, the ratio’s current behavior mirrors its historical counterpart. What’s more, the end of the corrective upswing in 2013 occurred right before gold sunk to its previous lows (marked with red vertical dashed lines in the middle of the chart below). Thus, the ratio is already sending ominous warnings about the PMs’ future path. In addition, with the S&P 500 acting as the bearish canary in the coal mine, the ratio plunged in 2008 and 2020 when the general stock market tanked. Thus, if a similar event unfolds this time around, the gold miners’ sell-off could occur at a rapid pace. For more context, I wrote previously: A major breakdown occurred after the HUI Index/gold ratio sunk below its rising support line (the upward sloping black line on the right side of the chart above). Moreover, with the bearish milestone only achieved prior to gold’s crash in 2012-2013, the ratio’s breakdown in 2013 was the last chance to short the yellow metal at favorable prices. And while I’ve been warning about the ratio’s potential breakdown for weeks, the majority of precious metals investors are unaware of the metric and its implications. As a result, investors’ propensity to ‘buy the dip’ in gold will likely backfire over the medium term. In conclusion, the crowd has turned on the precious metals, and the narrative has shifted once again. However, despite all of the drama and the volatility that came with it, the technicals have been predicting this outcome for several months. And with the GDXJ ETF down by more than 20% YTD (as of the Nov. 26 close), the junior miners’ 2021 performance is far from critically-acclaimed. As a result, the chorus of boos will likely continue over the short- and/or medium term. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Intraday Market Analysis – Yen’s Rally Gains Traction

Intraday Market Analysis – Yen’s Rally Gains Traction

John Benjamin John Benjamin 29.11.2021 10:01
EURJPY breaks double bottom The safe-haven Japanese yen soars on news of a vaccine-resistant covid variant. A bearish MA cross on the daily chart indicates weakness in the euro’s previous rebound. The pair has closed below last September’s low at 127.90, a major floor to keep price action afloat in the medium term. This is a bearish signal that the sell-off is yet to end with 127.00 as the next support. The RSI’s double bottom in the oversold area may attract some buying interest. However, the bulls will need to lift 129.50 before a reversal could take shape. GBPUSD struggles to bounce back The pound continues on its way down against the US dollar over divergent monetary policy. The pair is hovering near a 12-month low around 1.3280. Sentiment remains bearish after a failed rebound above 1.3420. A bullish RSI divergence suggests a deceleration in the downward momentum. 1.3390 is the first hurdle ahead. Its breach would prompt the short side to cover and open the door to the daily resistance at 1.3510. Otherwise, a bearish breakout would send the price to 1.3200. GER 40 to test major floor The Dax 40 plunged as investors fret that new lockdowns could wreck the recovery. The gap below 15760 has forced leveraged buyers to bail out, stirring up volatility in the process. The momentum is typical of a catalyst-driven sell-off. Below 15150 the index is testing the psychological level of 15000. The RSI’s oversold situation has attracted a ‘buying-the-dips’ crowd in the demand zone. Further down, 14820 is a key floor to maintain the uptrend. 15530 has become the closest resistance in case of a rebound.
Stocks - More Volatility Following Hawkish Powell

Stocks - More Volatility Following Hawkish Powell

Paul Rejczak Paul Rejczak 01.12.2021 15:12
  Stock prices were volatile on Tuesday, as the S&P 500 fell to the new local low. But today it may rebound again. but will the downtrend continue? For in-depth technical analysis of various stocks and a recap of today's Stock Trading Alert we encourage you to watch   The S&P 500 index lost 1.90% on Tuesday, Nov. 30. The market went lower following testimonies from the Fed Chair Powell and the Treasury Secretary Yellen. On Monday the broad stock market retraced more than a half of its Friday’s sell-off, but yesterday it fell to the new local low of 4,560.00. Today it is expected to open 1.0% higher again, so we will see more short-term volatility. The nearest important support level is at 4,560-4,600. On the other hand, the resistance level is at 4,650, marked by the recent local lows. The S&P 500 retraced most of its early November advance, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq 100 Remains Relatively Stronger Let’s take a look at the Nasdaq 100 chart. The technology index remained relatively stronger than the broad stock market yesterday, as it didn’t extend a short-term downtrend. It remained above its Friday’s local low and above the 16,000 mark, as we can see on the daily chart: Apple Got Close to the Record High Again Let’s take a look at biggest stock in the S&P 500 index: AAPL. Apple accelerated its uptrend a week ago and it reached the new record high of $165.70. However, it retraced almost all of its intraday advance that day. On Friday it got back to a support level of around $157. And yesterday it got back to the all-time high, as it closed slightly above the $165 price level. Conclusion The S&P 500 index is expected to open 1.0% higher this morning following an overnight rebound from the yesterday’s new short-term low. We will likely see an intraday consolidation following a higher opening. And for now, it looks like a consolidation within a short-term downtrend. Here’s the breakdown: The S&P 500 extended its short-term downtrend yesterday, but today it is expected to open higher again. A speculative short position is still justified from the risk/reward perspective. We are expecting a 5% correction. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
It‘s the Fed, Not Omicron

It‘s the Fed, Not Omicron

Monica Kingsley Monica Kingsley 01.12.2021 15:51
S&P 500 plunged on accelerated tapering intentions, and much of the risk-on sectors and commodities followed – even precious metals declined a little in sympathy. But where is the larger reasoning? If the Fed truly intends to taper faster in its belated fight against inflation, it‘s a question of not only markets throwing a tantrum, but of the real economy keeling over. Inflation is a serious problem, including a political one, and here come the Omicron demand-choking effects if the fear card gets played too hard. Thankfully, reports indicate that the alleged variant is merely more contagious and having comparatively milder effects. That‘s how it is usually turns out with mutations by the way – remember that before the number 30 frequently thrown around, shuts off thinking including in the markets. The world‘s economic activity didn‘t come to a standstill with Delta, and it appears such a policy route won‘t be taken with Omicron either. That‘s why I was telling you on Monday that any inflation reprieve the scary news buys, would likely turn out only temporary. Unless the Fed decides to make it permanent, which is what I am doubting based on its track record and the more rocky landscape ahead that I talked in mid Nov extensive article. For now, the Fed‘s pressure is real, and premarket rallies that are sold into during regular sessions, must be viewed with suspicion. It‘s not that we‘ve flipped into a (secular) bear market, but the correction is palpable and real – I‘m not looking for the habitual Santa Claus rally this year. Big picture, the precious metals resilience is a good sign, and return of cyclicals with commodities is the all-clear signal that I‘m however not expecting this or next week. Cryptos resilience is encouraging as much as various stock market ratios (XLY:XLP offers a more bullish view than XLF:XLU – I‘ve been covering these helpful metrics quite often through 2020), which makes me think we‘re in mostly sideways markets for now. At least as I told you on Monday, the (rational / irrational) fears started getting ignored by the markets, meaning we‘re on a gradually improving track. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 isn‘t out of the hot water, and it‘s still just a close in the 4670s that would mark the end of peril to me. The financial sector has to turn, strength has to come to smallcaps simultaneously – the 500-strong index is still performing in a too risk-off way. Credit Markets Positive HYG divergence isn‘t enough – the broad underperformance of S&P 500 must be reversed to establish stronger stock market foundations. Powell just added to the risk-off posture in bonds, and I‘m looking keenly at the expected, ensuing (in)ability to absorb less loose monetary conditions. Gold, Silver and Miners Precious metals are acting weak, but not overly weak. When the markets get fed up with having to bear the tapering / tightening (real and verbal) interventions, it would be gold and silver that rise first. Crude Oil Crude oil turned out indeed weakest of the weak when fear overruled everything. Capitulation is a process, and it‘s quite underway already in my view. The way black gold crashed, the way it would rise once the sky meaningfully clears. Copper Copper weakness is what I don‘t trust here as other base metals did quite better. But again, yesterday was an overreaction to the Fed news that it would discuss speeding up taper. Just discuss. Bitcoin and Ethereum Bitcoin and Ethereum holding relatively high ground, is a reason to think the risk-on scales would tip positive. While BTC is still correcting, I‘m looking for it to join Ethereum. Summary S&P 500, risk-on and commodities aren‘t yet on solid footing as Powell pronouncements outweighed the dissipating corona uncertainty. Either way, the effects on inflation would be rather temporary – inflation indicators clearly haven‘t topped yet as the implicit Fed admission of dropping the word temporary confirms. Once the tightening mirage gets a reality check in the economy and markets, look for precious metals to truly shine. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Copper upside remains despite months of inaction

Copper upside remains despite months of inaction

Ole Hansen Ole Hansen 01.12.2021 16:26
Commodities 2021-12-01 15:00 Summary:  Industrial metals spent most of November trading sideways with concerns about demand being offset by tight market conditions, especially in aluminum and copper. In fact, the price has during these past few months, when worries about Chinese demand took centerstage, been trading relatively close to the average price seen since April. A behavior which in our view highlights a strong underlying demand for copper, not least considering the prospect for inelastic supply struggling to meet green transformation demand towards electrification. Industrial metals spent most of November trading sideways with concerns about demand being offset by tight market conditions, especially in aluminum and copper. Apart from two failed upside attempts in May and October, copper has since April stayed mostly rangebound not swaying too far away from its average price, at $9550 per tons in London and $4.35 per pound in New York. During the past few months copper has performed relatively well considering heightened worries about the economic outlook for China, and more specifically its property sector which has seen near defaults as well as a slump in home sales. Additional headwinds have been created by the stronger dollar and central banks beginning to focus more on inflation than stimulus. In order to counter Chinese economic growth concerns, Vice Premier Liu He has been out saying growth this year should exceed targets, and the government plans more support for business. High Grade Copper has been averaging $4.35 since April with the current action confined to a range between $4.2 and $4.5 while major support can be found in the $4 area. The lack of momentum in recent months has driven a sharp reduction in the speculative long held by hedge funds, a development that could trigger a significant amount of activity once the technical and/or fundamental picture becomes clearer. Against these mostly demand focused macroeconomic headwinds, we have at the same time been witnessing an unusual synchronised tightness in stock levels monitored by the major futures exchanges in London and Shanghai. Unusual in the sense that price arbitrage between the two exchanges often drive changes in stock levels from one exchange to the other. Recently however we have been witnessing levels fall at both exchanges, with aluminum and copper stockpiles at the LME falling to their lowest levels since 2007 and 2005 respectively. In fact, the six industrial metals traded on the LME are currently all trading in backwardation for the first time since 2007. A condition where spot prices trade higher than futures, and driven by the mentioned drop in inventories in response to a post-pandemic surge in demand as well as supply-chain disruptions. On the subject of supply, especially during the coming years when the green transformation will account for an increased proportion of global copper demand, planned mining taxes in Chile, the worlds biggest producers have raised the alarm bells. Politicians are looking for a bigger share of mining profits to help resolve inequalities exacerbated by the pandemic, and with a potential approval moving closer BHP Group has warned it could derail investments thereby making it harder to meet future demand, especially considering the mentioned need for copper towards electrification. Source: Bloomberg An example of increased copper demand driven by the green transformation are the number of finished and planned subsea interconnectors which are paramount for cutting emissions and boosting the effectiveness of renewable energy production. Increased volatility in the production of power from renewable sources such as wind and solar as opposed to traditional sources like coal and gas will continue to increase the need for large scale transmission capabilities of power between countries and regions. The cable below has been used in the now finished 720 kilometer North Sea Link between Norway and the UK, as well in the under-construction Viking link between Denmark and the UK. It carries as much as 1.45 Gigawatt (about the capacity of a nuclear reactor) with most of the 50 kg/meter weight coming from copper. Several other subsea links are planned over the coming years, and together with the need for increased capacity on the electrical grid to support the roll out of EV’s, demand for copper, the king of green metals, look set to increase over the coming years. Electrification and urbanisation will drive growth in copper wrote my colleague Peter Garnry in this update from November 19. In it he also offered a table of mining companies providing exposure to copper. The table below shows 16 mining companies with exposure to copper with Codelco, the largest copper producer in the world, absent from the list as the Chilean miner is only listed in Chile and thus not investable for our clients. The copper mining industry has delivered a median total return in USD of 132.6% over the past five years beating the global equity up 105% in the same period. The rising copper prices the past year driven by investors positioning themselves in green metals (defined as metals that will play a key role in the green transformation) which in turn has pushed up revenue in the industry by almost 40%. Sell-side analysts are generally bullish on copper miners with a median upside of 16% from current levels. In our view investors should select one or two copper miners to get exposure and avoid the ETFs on the industry as they are too broad-based and lack the pure exposure profile needed to play the copper market. As the table also show, there is no such thing as pure exposure to copper except for futures, options and CFDs on the underlying copper. The miner with the highest revenue exposure to copper is Antofagasta with 84.8% revenue share from copper extraction and refining. Most copper miners also extract gold and silver as part of their copper operations, and out of the 16 copper miners in our list, only 6 of these miners have more than 50% of revenue coming from copper extraction and refining.
FX Update: Powell is now an inflation fighter, not a punchbowl spiker

FX Update: Powell is now an inflation fighter, not a punchbowl spiker

John Hardy John Hardy 01.12.2021 16:30
Forex 2021-12-01 15:25 4 minutes to read Summary:  Fed Chair Powell cemented recent evidence that the Fed has changed its stripes from a punch bowl refiller for the economy and the labor market to an inflation fighter at large. The market is finding it tough to absorb this message, given the recent market choppiness and virus distractions, but interesting that the US dollar has not found more strength on this momentous pivot. FX Trading focus: Hawkish broadside from Powell Fed Chair Powell cemented the impression that the Fed has shifted firmly into inflation fighting mode with an appearance yesterday before a Fed panel. The rhetoric was direct and of a make-no-mistake variety. Powell said that the end of balance sheet expansion would likely wind down a few  months sooner than originally foreseen, even with the current omicron variant of covid concerns. He also spelled out that it is probably time to retire the word “transitory” when discussing inflation, ad said that the risk of higher inflation has increased. Perhaps most interesting was a comment that persistent higher inflation brought a risk to getting the labor market back to where it was pre-covid. It is crystal clear at this point that the Fed has pivoted to inflation-fighting and tightening and will move in that direction as quickly as it can until the inflation numbers improve markedly. Of course, the market was already adjusting to clear signs that the Fed is moving into a far more hawkish stance early last week, only to be sidelined viciously by the omicron variant worries in recent days. Were it not for that interlude, Fed expectations would likely be at new cycle highs as yesterday’s signals from Powell make the Fed shift as clear as day. As it is, we have only clawed back a majority of the 2022 hikes priced in pricing of Fed rate hikes, still some 8 basis points to go for end of year Fed pricing (the “omicron discount” being perhaps 15 basis points or more?). The two curious things are that the US yield curve continues to viciously flatten and the market continues to price the terminal Fed rate for the coming hiking cycle at 2.00%. The inability for the longer yields to lift higher recently may be reining in the USD upside for. The other indicator besides yield-curve shifts that is making waves here on my radar screen of financial conditions is the measure of corporate credit, where spreads have blown wider, as discussed over the last couple of episodes of the Saxo Market Call podcast. The bluntness from the Fed yesterday may have driven the particularly bad day for junk bonds as the new style from the Fed could lead investors in the riskiest debt to conclude that they may be allowed to twist in the breeze down the road if inflation levels stay high, rather than receiving endless bailouts that keep zombie companies in business and able to forever roll forward their debts. We are set up for an interesting 2022 that will likely look very different from 2021. The shift in Fed rhetoric will make the market extra-sensitive to US data and developments that impact inflation, from energy prices, to the CPI/PCE data itself and the average hourly earnings data perhaps even more than the usual nonfarm payrolls change focus. Today’s Beige Book could be interesting for anecdotal evidence from interviews with companies on their impression of supply constraints, wage adjustments and issues finding qualified workers, etc. Today’s November ADP Payrolls was another strong 500k+ as expected. Chart: USDJPYUSDJPY was handcuffed by developments yesterday – on the one hand with the USD supported by a rise in Fed expectations, but on the other hand, JPY traders finding no fresh reason to bid up the JPY as the long end of the US yield curve remains pinned at quite low yields and there has been no shift in the Fed’s “terminal rate” – where the market sees the Fed rate hike cycle peeking out. So the price action bobbed well back above the 112.73 range pivot level that was broken yesterday, but has a steep wall to climb to threaten the 115.00+ cycle highs again, something that would likely require the entire Fed yield curve to lift, and more aggressively than expectations for policy normalization elsewhere. Source: Saxo Group Table: FX Board of G10 and CNH trend evolution and strengthAgain, the market is finding the reaction function increasingly difficult to the recent jolts in inputs. Note the huge momentum shift in SEK, where the market overdid the recent squeeze, but the strength there will likely only improve once the euro bottoms and the outlook for EU yields and fiscal improves. Table: FX Board Trend Scoreboard for individual pairs.Well entrenched trends are few and far between, but the EURCNH and EURCHF downtrends stand out, with the latter’s lack of volatility after recent direction changes remarkable. The Swiss franc does well as a safe haven and does well because the SNB can’t be seen weakening the currency when inflation pressures are rising. Upcoming Economic Calendar Highlights (all times GMT) 1500 – US Fed Chair Powell, Treasury Secretary Yellen to testify before House panel 1500 – US Nov. ISM Manufacturing 1530 – DOE’s Weekly Crude Oil and Fuel Inventories 1900 - Fed Beige Book 0030 – Australia Oct. Trade Balance
Saxo Bank 2022 Outrageous Predictions: Here comes a revolution!

Saxo Bank 2022 Outrageous Predictions: Here comes a revolution!

Saxo Bank Saxo Bank 02.12.2021 14:35
Saxo Bank has today released its 10 Outrageous Predictions for 2022. The predictions focus on a series of unlikely but underappreciated events which, if they were to occur, could send shockwaves across financial markets: The plan to end fossil fuels gets a rain check Facebook faceplants on youth exodus The US mid-term election brings constitutional crisis US inflation reaches above 15% on wage-price spiral EU Superfund for climate, energy and defence announced, to be funded by private pensions Women’s Reddit Army takes on the corporate patriarchy India joins the Gulf Cooperation Council as a non-voting member Spotify disrupted due to NFT-based digital rights platform New hypersonic tech drives space race and new cold war Medical breakthrough extends average life expectancy 25 years While these predictions do not constitute Saxo’s official market forecasts for 2022, they represent a warning against the potential misallocation of risk among investors who might typically assign just a one percent chance of these events materialising.  It’s an exercise in considering the full extent of what is possible, even if not necessarily probable, and particularly relevant in the context of this year’s unexpected Covid-19 crisis. Inevitably the outcomes that prove the most disruptive (and therefore outrageous) are those that are a surprise to consensus. Commenting on this year’s Outrageous Predictions, Chief Investment Officer at Saxo Bank, Steen Jakobsen said:   “The theme for 2022 Outrageous Predictions is Revolution. There is so much energy building up in our inequality-plagued society and economy. Add to that the inability of the current system to address the issue and we need to look into the future with a fundamental view that it’s not a question of whether we get a revolution but a more a question of when and how. With every revolution, some win and some lose, but that’s not the point—if the current system can’t change but must, a revolution is the only path forward. A culture war is raging across the globe and the divide is no longer simply between the rich and the poor. It’s also the young versus the old, the educated class versus the less educated working class, real markets with price discovery versus government intervention, stock market buy-backs versus R&D spending, inflation versus deflation, women versus men, the progressive left versus the centrist left, virtual signalling on social media versus real changes to society, the rentier class versus labour, fossil fuels versus green energy, ESG initiatives versus the need to supply the world with reliable energy—the list go on. We collaborated globally on Covid vaccines in 2020 and 2021. Now we need a new Manhattan Project–-type endeavour to set the marginal cost of energy, adjusted for productivity, on the path to much lower levels while eliminating the impact of our energy generation on the environment. Such a move would unleash the most significant productivity cycle in history: we could desalinate water, make vertical farms feasible almost anywhere, increase computer powers to quantum states, and continue to explore new boundaries in biology and physics.” Remember that the world is forever evolving if at varying speeds, while business and political cycles are always finite.” The Outrageous Predictions 2022 publication is available here with headline summaries below: 1. The plan to end fossil fuels gets a rain check Summary: Policymakers kick climate targets down the road and support fossil fuel investment to fight inflation and the risk of social unrest while rethinking the path to a low-carbon future. Realising the inflationary threat from surging commodities prices and the risk of an economic train wreck due to the unrealistic timeline for the green energy transition, policymakers kick climate targets down the road. They relax investment red tape for five years for oil production and ten years for natural gas production, to encourage producers to ensure adequate and reasonably priced supplies that bridge the gap from the energy present to the low-carbon energy future. This development has already jacked up prices and price volatility, not only for energy, but also for industrial metals, most of which are needed in greater quantities for the green transformation push. On top of this, surging energy prices have spiked prices for diesel and especially fertiliser, important farming costs that raise concerns about the production of key food crops. Market impact: The iShares Stoxx EU 600 Oil & Gas ETF (Ticker: EXH1:xetr) surges 50 percent as the whole energy sector gets a new lease on life 2. Facebook faceplants on youth exodus Summary: The young abandon Facebook’s platforms in protest at the mining of personal information for profit; the attempt by Facebook parent Meta to reel them back in with the Metaverse stumbles. Facebook has gone from being a vibrant hub of young people, to a platform for older “boomers” as young people would say. Young people are increasingly turned off by Facebook’s algorithms turning their social media experiences into that of homogenous feedback loops of identical content, or even worse, hateful and disinforming content. Facebook’s own research suggests that teens spend 2 to 3 times longer on TikTok than on Instagram (which is Facebook’s youngest social media asset), and that Snapchat is the preferred way to communicate with friends. A new company name (Facebook is now called Meta) and brand identity to separate and shield Instagram (its most valuable current asset), together with creating a new product tailored towards young people, is the exact same playbook tobacco companies have used for years. But in 2022, investors will realise that Meta is rapidly losing the young generation and thus the future potential and profitability of the company. In a desperate move, Meta tries to acquire Snapchat or TikTok while throwing billions of dollars into building the creepy Metaverse, which is aimed at surveilling users more directly than ever before and getting young people back into Meta’s universe of social media platforms, in the perceived wisdom that being a first mover is always best in technology. The plan struggles to take off as the young generation fails to sign up. Market impact: Facebook parent company Meta struggles, down 30 percent versus the broader market and is urged to spin off its components as separate entities, shattering Zuckerberg’s monopolistic dreams. 3. The US mid-term election brings constitutional crisis Summary: The US mid-term election sees a stand-off over the certification of close Senate and/or House election results, leading to a scenario where the 118th Congress is unable to sit on schedule in early 2023. The chaotic 2020 US Presidential Election was a scary moment for many US institutions. The sitting president Donald J. Trump initially refused to conceded defeat in the election and complained that the election was stolen, a claim that was never seriously challenged in a court of law but one which had widespread sympathy among the Trump base. A crowd of hard-core believers in the stolen election conspiracy was encouraged by the President’s rhetoric to a sufficient degree to storm Capitol Hill and “stop the steal”, i.e., to prevent the election result from being made official on January 6, 2021, in a scene unprecedented in US history. Prior to this, and then again later in the hotly contested Senate run-off elections in Georgia, dedicated election officials—many of them Republican—were doing their duty to tally the real results while risking their life amidst threats—even death threats—from extremists. In 2022, the Republicans ensure that no such traditional duty-bound officials are in the “wrong” place, with all election-related positions filled by toe-the-line partisans ready to do anything to tilt the results to suppressing voter turnout. In the wake of the 2022 election, a handful of key Senate and House races come down to the wire and one or both sides move against certifying the vote, making it impossible for the new Congress to form and sit on its scheduled first day of January 3, 2023. Joe Biden rules by decree and US democracy is suspended as even Democrats also dig in against the Supreme Court that was tilted heavily by Trump. A full-blown constitutional crisis stretches over the horizon over the stand-off as 2023 gets under way. Market impact: extreme volatility in US assets, as US treasury yields rise and the USD drops on hedging against the existential crisis in the world’s largest economy and issuer of the world’s reserve currency of choice. 4. US inflation reaches above 15% on wage-price spiral Summary: By the fourth quarter of 2022, the wages for the lower half of US incomes are rising at an annualised 15% clip as companies scramble to find willing and qualified workers who are increasingly selective due to a rising sense of entitlement as jobs are plentiful relative to the meagre availability of workers at all skill levels. The official US CPI reached a peak at 11.8% in February 1975. It wasn’t until the recession of 1980-82 and brutal policy rate increases to levels as high as 20% that inflation was finally killed. In 2022, the Federal Reserve and Fed chair Jerome Powell repeats the same mistake all over again as the post-Covid outbreak economy and especially the labour market are severely supply constrained, making a mockery of the Fed’s traditional models. Powell believes millions of Americans will return to work and fill some of the 10.4 million open job positions as Covid-19 fades. But this is plain wrong. Some have retired early due to the crisis and thus have permanently left the US workforce. The big difference between today and yesterday is that the pandemic has fuelled a great awakening of workers. Across sectors and income classes they realise they are now more empowered than ever. They demand a better experience: better job conditions, higher wages, more flexibility and a sense of purpose from work. Coupled with persistent inflationary pressures coming from the production side, the energy crisis and labour shortage, this results in unprecedented broad-based double-digit annualised wage increases by Q4. As a consequence, US inflation reaches an annualised pace above 15% before the start of 2023, for the first time since WWII. This prompts the Federal Reserve into a too-little, too-late move to tighten monetary policy faster in a desperate effort to tame inflation. But the central bank has lost credibility; it will take time to regain it. Market impact: extreme volatility in US equity and credit markets. The JNK high-yield ETF falls as much as 20% and the VIXM mid-curve volatility ETF soars as much as 70%. 5. EU Superfund for climate, energy and defence announced, to be funded by private pensions Summary: To defend against the rise of populism, deepen the commitment to slowing climate change, and defend its borders as the US security umbrella recedes, the EU launches a bold $3 trillion Superfund to be funded by pension allocations rather than new taxes. The security umbrella provided by the US during the Cold War and afterwards over much of Eastern Europe is rapidly fading and threatens to fail entirely in the years ahead as the US looks east at far more serious economic and military rivals. French President Macron, backed by a Draghi moving to stave off Italy’s own rise of the populists, rolls out a vision for an “EU Superfund” that will address the three-fold priorities of defence, climate and the related clean energy transition. Given the EU’s aging population and heavy tax burdens, policymakers know that it will be impossible to finance the Superfund with higher taxes on incomes or other traditional tax revenues. Instead, France has a light-bulb moment as it seeks to overhaul its pension system and looks at Europe’s enormous pensions. It decides that all pensions for all workers above the age of 40 must allocate a progressively larger portion of their pension assets into Superfund bonds as they age. This allows new levels of fiscal stimulus in the EU even with the sleight-of-hand trick of hiding the spending in inflation and negative real returns on low-yielding Superfund bonds that are actually EU bonds in disguise. At the same the younger generation enjoys a stronger job market and less unfair tax burdens as the system proves such a success that income taxes are lowered progressively. Market impact: Bond yields harmonise across Europe, leading to German Bunds underperforming. EU defence, construction and new energy companies are some of the best performers. 6. Women’s Reddit Army takes on the corporate patriarchy Summary: Mimicking the meme stock Reddit Army tactics of 2020-21, a group of women traders launch a coordinated assault on companies with weak records on gender equality, leading to huge swings in equity prices for targeted companies. Women are not willing to wait any longer. Tired of the lack of progress, 2022 sees a massive grass-roots effort based on social media platforms to force companies that break civil rights laws to address unfair and sexist, racist, ageist and ableist practices. Although women have been struggling with lower salaries, they have higher saving rates than men. Those savings will now come in handy as they decide to take the situation into their own hands and throw their considerable influence around in a #metoo movement in financial markets. In contrast to the often-nihilistic original Reddit Army, the Women’s Reddit Army will be more sophisticated, with women traders coordinating a long squeeze by shorting stocks of selected patriarch companies. At the same time, they will direct funds to companies with the best metrics on female representation in middle management and among executives. Instead of condemning the development, politicians worldwide welcome and support their cause, putting even more pressure on companies with outdated patriarchal attitudes, poor gender equality in pay, and under-representation of women on boards and in management to address the errors of their ways. Market impact: The movement gets real results as the broader market catches on to the theme and joins in, forcing targeted company prices sharply lower, which sees companies scrambling to change their ways. It marks the beginning of a gender parity renaissance in markets. 7. India joins the Gulf Cooperation Council as a non-voting member Summary: The world’s geopolitical alliances will lurch into a phase of drastic realignment as we have an ugly cocktail of new deglobalising geopolitics and much higher energy prices. Countries reliant on imports for the majority of their energy inputs in a rapidly deglobalising world will need to move fast to strategically reorientate strategic alliances and secure long-term energy supplies. One such alliance could involve India, with its mighty technology sector, joining the Gulf Cooperation Council (GCC) as non-voting member, or in some sort of free trade zone. This alliance would see a reduction in India’s energy insecurity as it secures long-term import commitments. Interregional trading zones will secure “closer to home” production and investment, combined with the security of reliable supplies from India’s point of view, and a reliable destination market from the GCC’s point of view. The alliance helps lay the groundwork for the GCC countries to plan for their future beyond oil and gas and for India to accelerate its development via huge new investments in infrastructure and improvements in agricultural productivity together with fossil fuel imports, bridging the way to a post-carbon longer-term future. Market impact: The Indian rupee proves far more resilient than its EM peers in a volatile year for markets. The bubbly Indian stock market corrects with other equity markets in early 2022 but proves a strong relative performer from the intra-year lows. 8. Spotify disrupted due to NFT-based digital rights platform Summary: Musicians are ready for change as the current music streaming paradigm means that labels and streaming platforms capture 75-95 percent of revenue paid for listening to streamed music. In 2022, new blockchain-based technology will help them grab back their fair share of industry revenues. While the early days of NFTs have looked chaotic and dangerous for asset buyers, the outlook is bright for NFT technology. Not only does an NFT-based platform offer a new way to verify the ownership of rights, but also a way to distribute rights without intermediaries, i.e., a completely decentralised system obviating the need for a centralised platform. The use case for NFTs could prove particularly compelling in the next step for the technology for content generators in the music industry as musicians feel unfairly treated by the revenue sharing models of the current streaming platforms like Spotify and Apple Music. These models don’t guide individual subscribers’ fees to the actual music an individual subscriber listens to. Rather, all subscription fee revenues are aggregated and distributed based on every artist’s share of total streams. In addition, the platforms take a substantial cut, which together with the cut paid to labels is some 75 percent or more of the total revenue. In 2022, an NFT-based service takes hold and begins offering music from notable stars – perhaps the likes of Katy Perry, The Chainsmokers and Jason Derulo, all of whom have recently backed an effort to create a new blockchain-powered streaming platform. Other well-known artists begin pulling their music from the now “traditional” streaming platforms, which suddenly find themselves terminally disrupted. Investors see the eventual writing on the wall for podcasts, movies and other forms of digitisable contents as well. Market impact: Investors recognise that Spotify’s future is bleak, sending its shares down 33 percent in 2022. 9. New hypersonic tech drives space race and new cold war Summary: The latest hypersonic missile tests are driving a widening sense of insecurity as this tech renders legacy conventional and even nuclear military hardware obsolete. In 2022 a massive hypersonic arms race develops among major militaries as no country wants to feel left behind. In 2022, it is clear from funding priorities that hypersonics and space are the heart of a new phase of the deepening rivalry between the US and China on all fronts—economic and military. Other major powers with advanced military tech join in as well, likely including Russia, India, Israel and the EU. Hypersonic capabilities represent a game-changing threat to the long-standing military strategic status quo, as the technology brings asymmetric new defensive and offensive capabilities that upset the two massive pillars of military strategy of recent decades. The first is the potential for devastating hypersonic tech defence against the conventional attack capabilities of long-range bombing aircraft, as well as the so-called “deep water” navy of ships that can bring the fight to any corner of the globe without refuelling. The second pillar of the old Cold War era was the principle of mutually assured destruction (MAD) in the event of nuclear war, under which it was pointless to launch a nuclear war as long as there was still time for the opponent to launch an equally destructive ICBM counterattack from land- and submarine-based ballistic missiles. But the speed and agility of hypersonic tech introduces the belief that superior defence could thwart an attack entirely and even allow for new first-strike capabilities. Market impact: massive funding for companies like Raytheon that build hypersonic tech with space delivery capabilities and underperformance of “expensive conventional hardware” companies in the aircraft and ship-building side of the military hardware equation. 10. Medical breakthrough extends average life expectancy 25 years Summary: Young forever, or for at least a lot longer. In 2022, a key breakthrough in biomedicine brings the prospect of extending productive adulthood and the average life expectancy by up to 25 years, prompting projected ethical, environmental and fiscal crises of epic proportions. The year 2022 sees a breakthrough from a multi-factor approach, as a cocktail of treatments is put together that tweaks cell-level processes in order to extend their life and thus the life of the organism composed of those cells. It’s not cheap, but it’s effective and has already been demonstrated on laboratory mice containing human DNA, extending their lives some 30% and more. The prospect of a massive leap in human quality of life and life expectancy are huge wins for mankind but bring an enormous ethical and financial quandary. Imagine that almost everyone can look forward to living to an average age of 115 and more healthily. What would this mean for private and government pensions, or even the ability or desire to retire? And what about the cost to the planet if it is set to support billions more people, not to mention whether or not there is enough food to go around? And then there is the ethical question of whether it is humane to not make the cocktail available to everyone. In short, how would our value systems, political systems and planet cope?
Hawks Triumph, Doves Lose, Gold Bulls Cry!

Hawks Triumph, Doves Lose, Gold Bulls Cry!

Arkadiusz Sieron Arkadiusz Sieron 02.12.2021 17:20
The hawkish revolution continues. Powell, among the screams of monetary doves, suggested this week that tapering could be accelerated in December! People live unaware that an epic battle between good and evil, the light and dark side of the Force, hard-working entrepreneurs and tax officials is waged every day. What’s more, hawks and doves constantly fight as well, and this week brought a victory for the hawks among the FOMC. The triumph came on Tuesday when Fed Chair Jerome Powell testified before Congress. He admitted that inflation wasn’t “transitory”, as it is only expected to ease in the second half of 2022. Inflation is therefore more persistent and broad-based than the Fed stubbornly maintained earlier this year, contrary to evidence and common sense: Generally, the higher prices we’re seeing are related to the supply and demand imbalances that can be traced directly back to the pandemic and the reopening of the economy. But it’s also the case that price increases have spread much more broadly and I think the risk of higher inflation has increased. Importantly, Powell also agreed that “it’s probably a good time to retire that word.” You don’t say! Hence, the Fed was wrong, and I was right. Hurray! However, it’s a Pyrrhic victory for gold bulls. This is because the recognition of the persistence of inflation pushes the Fed toward a more hawkish position. Indeed, Powell suggested that the FOMC participants could discuss speeding up the taper of quantitative easing in December: At this point the economy is very strong and inflationary pressures are high and it is therefore appropriate, in my view, to consider wrapping up the taper of our asset purchases, which we actually announced at the November meeting, perhaps a few months sooner, and I expect that we will discuss that at our upcoming meeting in a couple of weeks. What’s more, Powell seemed to be unaffected by the Omicron coronavirus strain news. He was a bit concerned, but not about its disturbing impact on the demand side of the economy; he found supply-chain disruptions that could intensify inflation way more important. That’s yet another manifestation of Powell’s hawkish stance.   Implications for Gold What does the Fed’s hawkish tilt imply for the gold market? Well, gold bulls get along with doves, not hawks. A more aggressive tightening cycle, including faster tapering of asset purchases, could boost expectations of more decisive interest rates hikes. In turn, the prospects of a more hawkish Fed could increase the bond yields and strengthen the US dollar. All this sounds bearish for gold. Indeed, the London price of gold dropped on Wednesday below $1,800… again, as the chart above shows. Hence, gold’s inability to stay above $1,800 is disappointing, especially in the face of high inflation and market uncertainty. Investors seem to have once again believed that the Fed will be curbing inflation. Well, that’s possible, but my claim is that despite a likely acceleration in the pace of the taper, inflation will remain high for a while. I bet that despite the recent hawkish tilt, the Fed will stay behind the curve. This means that the real interest rates should stay negative, providing support for gold prices. The previous tightening cycle brought the federal funds rate to 2.25-2.5%, and we know that after an economic crisis, interest rates never return to the pre-crisis level. This is also what the euro-dollar futures suggests: that the upcoming rate hike cycle will end below 2%. The level of indebtedness and financial markets’ addiction to easy money simply do not allow the Fed to undertake more aggressive actions. Will gold struggle in the upcoming months then? Yes. Gold bulls could cry. But remember: tears cleanse and create more room for joy in the future. If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
Intraday Market Analysis – Gold Awaits Breakout - 03.12.2021

Intraday Market Analysis – Gold Awaits Breakout - 03.12.2021

John Benjamin John Benjamin 03.12.2021 09:42
XAUUSD tests key support Gold treads water as markets await US jobs data release. The metal remains under pressure after it failed to maintain bids above 1780. Sellers are testing the daily support at 1760. A bearish breakout would shatter hopes of a swift rebound and send the price to last September’s low at 1725. That move could then threaten the integrity of the uptrend on a longer timeframe. 1806 is a fresh resistance and sellers could be waiting to double down at a better price. On the upside, a bullish breakout may propel the metal to 1845. EURUSD attempts bullish reversal The euro recoups losses as traders reposition ahead of today’s nonfarm payrolls. A bullish RSI divergence indicates a slowdown in the bearish push. The pair has found support near June 2020’s lows around 1.1190. Then successive breaks above 1.1270 and 1.1370 have prompted short interests to bail, paving the way for a potential reversal. 1.1460 next to the 30-day moving average would be the target and its breach may turn sentiment around. 1.1240 is a key support to keep the rebound relevant. US 500 heads towards daily support The S&P 500 continues on its way down as investors jump ship amid the omicron scare. The latest rebound has been capped by 4650, a sign that the bears are in control of short-term price action. A combination of pessimism and lack of buying interest means that the index is stuck in a bearish spiral. An oversold RSI may cause a limited rebound as intraday sellers cover their positions. 4450 at the origin of a previous bullish breakout would be the next target. 4360 is a second line of defense that sits in a daily demand zone.
Bridge Too Far

Bridge Too Far

Monica Kingsley Monica Kingsley 02.12.2021 16:36
S&P 500 gave up sharp intraday gains on the first Omicron patient in CA. Corona packing punch still, and sending TLT far above yesterday‘s highs while the dollar remained unchanged. That‘s as risk-off as can be on a little surprising headline – the key difference is though that the Fed doesn‘t have the back of buy the dippers this time. The accelerated taper noises coupled with demand destruction thanks to Omicron, is delivering an inflation repreive. Make no mistake though, should demand be choked off too hard, fresh stimulus would have to come – for now in the heat increasingly being turned on, practically all asset classes suffer to varying degrees. The market isn‘t yet at a stage of sniffing out fresh stimulus countering the destructive policy effects which are being felt currently. Economic activity around the world hasn‘t been hampered, but markets are willing to err on the pessimistic side. For now and still – only when the riskier debt instruments such as HYG turn up to deal with the prior downswing, would be a reason to cheer for animal spirits returning. That idea sounds though hollow at this time. The bears have the upper hand unless proven otherwise – that is, by a close in the 4670s. Which is what the title says... Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 breaking below the 50-day moving average, and taking time consolidating below, isn‘t bullish at all. The reversal was broad based, arguably hitting value more. Yes, market breadth is dismal. Credit Markets Positive HYG divergence is gone – the broad underperformance of S&P 500 must be reversed first to make stock market upswings trustworthy. It remains unclear how much would HYG be able to rebound when quality debt instruments cool off. Gold, Silver and Miners Precious metals weakness remains, but isn‘t convincing enough to short the market, no. The coming reversal to the upside would be ferocious, but we aren‘t there yet. Crude Oil Crude oil plunge is slowing down, and it‘s more than black gold that‘s looking for direction here – this concerns the commodities complex as such. I‘m looking for copper to show the way, and oil to follow. Copper Copper is sitting at a rising support line, undecided yet whether to take the Fed and Omicron threats seriously or not. It‘s wait and see for now, but the bullish side has the medium-term upper hand. Bitcoin and Ethereum Bitcoin and Ethereum are cautious as well, but the bears are looking for an ambush – let‘s see how far they can get. Summary The ugly S&P 500 close concerns both value and tech – and there was no premarket upswing to speak of. The bears have the upper hand for today as markets look to be in the phase of sell first, ask questions later. Any reversal (in stocks or commodities) has to be accompanied by a credible upswing in riskier bonds, ideally with money coming out of the dollar as well. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
FX Update: Omicron whiplash for USDJPY

FX Update: Omicron whiplash for USDJPY

John Hardy John Hardy 29.11.2021 13:42
Forex 2021-11-29 13:00 4 minutes to read Summary:  The Friday meltdown in USDJPY and JPY crosses was all about position squaring as we had just come from a place of anticipating a more hawkish shift from central banks, particularly the US Fed. The sense of whiplash was most acute in USDJPY, which had just been up testing multi-year highs before the deleveraging across markets on the new omicron covid variant clouding the outlook. FX Trading focus: Narrative whiplash for JPY traders on omicron variant concerns The news of the new omicron variant of covid could not have come at a more difficult time for the market to absorb for at least two reasons. First, of course, was the poor liquidity when US markets were closed Thursday and only open part of Friday due to the Thanksgiving holiday. Second was that we had just earlier the same week seen Fed Chair Powell and Brainard elevating the relative focus and position of grappling with inflation in their acceptance speeches, which had sent Fed rate hike expectations to new highs for the cycle early last week before the news hit. That ratcheting up of Fed rate anticipation had helped take USDJPY to new highs since early 2017 above 115.00 and EURUSD to new lows below 1.1200. But the positioning build-up in USDJPY has been far more extreme and the reaction in JPY crosses on Friday was fully in fitting with the JPY’s old status as a safe haven. Note that AUDJPY had its worst single-day drop since the heart of the pandemic outbreak panic in March of last year, while EURJPY has poked below the important 128.00 area that would suggest a break-down if the move holds. EURUSD rose sharply, as the sudden repricing of the Fed saw the EU-US yield spread tightening sharply, but the move would have to extend as far as 1.1500 to start having more profound technical implications. Has the market taken the news too far? That is not for me to judge, as it will take some time to assess the status of the reach of the current outbreak transmissibility, virulence and vaccine-evading characteristics of this new variant, all while real damage is being done as some countries are limiting travel, some merely from the areas where the new variant was discovered in southern Africa, while Japan has announced a full ban on inbound travel starting tomorrow. US President Biden will speak on the new variant later today. What does the best outcome look like? The omicron variant proves very transmissible, but is considerably milder and/or not particularly good at getting around the existing vaccines. Worst case involves some combination of significant vaccine evading characteristics and virulence that is anywhere similar to prior variants. I suspect that without immediate good news (real news surely requires at least a week from here?), the uncertainty could see risk-correlated trades dragged lower before things can improve, but a significant further deterioration in risk assets would likely require actual bad news emerging rather than merely an extension of the uncertainty. Regarding a timeline for learning more about the risks from the omicron variant, it’s best perhaps to admit that I have no clue, but a Reuters article suggests the major vaccine makers may be able to determine efficacy of existing vaccines in about two weeks. Chart: USDJPYWhile other JPY crosses were bigger movers on Friday, the technical development in USDJPY was the most remarkable, as it came off new cycle- and multi-year highs. The damage is significant locally, but would turn more severe if the 112.73 pivot low from October is broken and then goes on to challenge the more structurally significant 111.50-111.00 area. Source: Saxo Group Looking at the week ahead, we would normally be touting the importance of the next set of US survey numbers (November Consumer Confidence and November ISM Manufacturing on Wednesday and ISM Services on Friday) and November jobs and earnings numbers on Friday, but instead, we’ll have to juggle the ongoing news flow and headlines from the new virus variant and may have to file these data away for a later “pent-up” reaction if the omicron variant impact dissipates. Besides the US dollar and the JPY, I will watch all points on the US yield curve and risk sentiment measures closely for how the market is reading the situation. Powell is out today with opening remarks at some event - more interesting is testimony tomorrow, together with Treasury Secretary Yellen, on the policy response to the pandemic, which could see interesting exchanges on inflation, etc.  Table: FX Board of G10 and CNH trend evolution and strengthThe JPY is in a very different place from where it was a week ago or even two trading sessions ago and looks to remain the high-beta currency to whether the virus news drags market sentiment. The SEK reading looks extreme, but difficult to fade in terms of picking levels – downside put spreads in EURSEK the cautious way to proceed for those interested in fading this move now rather than waiting for a reversal pattern to develop. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Talking trends is treacherous business when the market goes into headline reactivity mode, but note that USDJPY and CNHJPY turning negative (if they close lower today) would make it a clean sweep for the JPY across the board. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1300 – Germany Nov. Flash CPI 1330 – Canada Oct. Industrial Product Prices 1530 – US Nov. Dallas Fed Manufacturing Survey 1715 – ECB President Lagarde to speak 2000 – US Fed’s Williams (voter) to speak 2005 – US Fed Chair Powell gives opening remarks at conference 2350 – Japan Oct. Industrial Production US President Biden to speak about omicron variant 0030 – Australia Oct. Building Approvals 0100 – China Nov. Manufacturing and Non-manufacturing PMI 0200 – Australia RBA’s Debelle to speak
Intraday Market Analysis – USD Accumulates Support

Intraday Market Analysis – USD Accumulates Support

John Benjamin John Benjamin 02.12.2021 08:58
USDCHF to test key support The US dollar stabilized after Jerome Powell hinted at speeding up the taper pace. The break below 0.9270 has put the rally on hold. The support has turned into resistance with the latest rebound fading. But a bullish divergence suggests a loss of momentum in the retracement as the price approaches 0.9140. Buying could be expected in this demand zone around November’s low 0.9100. Sentiment remains upbeat as long as the greenback is above this level. A bounce above 0.9270 may resume the uptrend. XAGUSD remains under pressure Silver struggled after US Treasury yields jumped on Fed’s hawkish tilt. A bearish MA cross on the daily chart indicates a deterioration in the market mood after a drop below the floor at 23.00. An oversold RSI caused a limited rebound which was then capped by 23.30. This was a sign that the bears were still in control of the direction. The psychological level of 22.00 is the next support. Its breach would lead to September’s lows at 21.50, an important level to keep the metal afloat in the medium term. USOIL tests major demand zone WTI crude inches higher as OPEC+ discuss whether to let additional output flow as previously planned. The price is hovering above a major demand zone between 62.00 and 64.00. A bullish RSI divergence indicates that the selling pressure might have eased. A rally above 71.20 could force the short side to cover and bring in more buying momentum. Then 76.00 would be the next hurdle before a full-blown recovery. On the downside, a bearish breakout could trigger a broader sell-off and potentially derail a 19-month long rally.
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: ETH outperforming its peers, BTC struggles and XRP bearish

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: ETH outperforming its peers, BTC struggles and XRP bearish

FXStreet News FXStreet News 02.12.2021 17:11
Bitcoin refrains from making new highs as Tuesday’s gap-fill kills uptrend continuation. Ethereum outpaces its peers by barely hitting new all-time highs. XRP price again looking for direction as investors interest wanes. The Bitcoin bull rally got stopped in its tracks this week after BTC price came under more pressure from the Omicron story, and the resulting market turmoil. Ethereum price, however, came just $16 away from making a new record high, making gains in contrast to the other two majors. XRP saw investors buying the dip, but the uptrend hit a wall and got stopped in its tracks. Bitcoin price on the backfoot after a slowdown that made it lose bullish momentum Bitcoin (BTC) price popped higher at the beginning of the week, shrugging off investors' concerns about the new Covid variant. On Monday, BTC price opened up much higher than where it closed on Sunday, forming a gap in the chart. As a general rule, gaps get filled sooner rather than later, and this was the case on Monday, when bulls saw their early gains lost as BTC price retraced to fill the gap. Bears have seized the opportunity to defend the new monthly pivot for December at $59,586, which coincides with the start of a Fibonacci retracement.. Evidence of this weakening can be found in the Relative Strength Index (RSI), dipping back below 50, showing that bullish demand is starting to wane. BTC/USD daily chart As a result of current market uncertainty, expect potential investors to stay on the sidelines. Although the red descending trend line has been broken a little, it still holds importance and investors will probably only step in following a break back above it, helped, perhaps, by breaking news about vaccine effectiveness against the new strain. Either that or investors will sit on their hands and wait for another bounce off $53.350. Should that level fail to hold, however, and there is more bad news, expect a quick 6% drop towards the $50,000 psychological level and previous historical support. At that level bulls will likely mount a defence against a further downturn. Ethereum price outpaces its peers and could make new highs by the end of this week Ethereum (ETH) price, unlike Bitcoin and XRP, saw bulls run a tight and steep rally from $4,000 towards $4,936 in just five days. That was in a troubled market-facing considerable headwinds. That said, bulls now need to keep a tight stop on current ETH price action in order for a bull trap not to form, after the pull-back on profit-taking that occurred in the wake of price barely hitting an all-time high. ETH quickly reversed from its highs on Wednesday and tested the December pivot at $4,481. That is just $16 above the historical technical level marked up on the chart from November 12. This is a level of great importance and it will be very interesting to see if bulls can maintain price action above it, perhaps, helped by a possible bounce off the red top line that has so far been successfully capping price action to the upside. ETH/USD daily chart That red descending trend line, on the other hand, should support a break below $4,465, but if bulls flee the scene, expect a bull trap to form and price to run down lower. The first support tested in that decline is the historical double top at $4,060, with the monthly S1 support level at $4,000 just below there. The correction could already hold 18% of accrued losses from the highs of Wednesday, which would attract investors interested in the buying opportunity at those levels. Ethereum prices breaks all resistance barriers, with $5,000 within sight XRP price sees bulls rejected at $1.05, pushing price back towards $0.88 Ripple (XRP) price saw sparks fly in a nice uptrend on Wednesday, but then hit a bump in the road after the $1.05 level held firmly, following two failed tests to the upside. The rejection that squeezed prices to the downside on Tuesday, probably washed out quite a lot of investors and technical traders, and caused the lack of momentum and drive in XRP price action to tackle that $1.05 resistance. As the price fades further to the downside today, expect current market uncertainty to weigh further on XRP and see a possible retest of the short-term double bottom at $0.88. XRP/USD daily chart On a retest of that double bottom, a break looks more than likely, as the level holds no historical or other significance. That would hand bears the opportunity to push XRP price down towards either $0.84, for the third test of support at that level, or breakthrough and run down to $0.80, which is a prominent figure and the level of the monthly S1 pivot support level, combined with a historical significant support level at $0.78, originating from June 8. This would provide the perfect zone for a fade-in trade for XRP traders. XRP price appears to develop nasty bear trap
Ready, set, silver, go

Ready, set, silver, go

Korbinian Koller Korbinian Koller 03.12.2021 12:56
The most obvious first step is: “How much?” Depending on your time horizon and if your approach is purely diversification for your overall portfolio, a percentage of total investment capital needs to be set. This percentage should be higher on a more aggressive wealth preservation strategy and higher expected returns on beating inflation. Another aspect is if silver is traded as the only hedge or alongside other precious metals. Silver already has a leverage factor in relationship to gold. For example, gold’s response to covid was a 37% up move, while silver moved up 80%. This volatility leverage works both ways, increasing the risk for silver if not purchased on low-risk entry points and traded with appropriate money management. We have pointed out various reasons why we find silver an extremely attractive play long term in this year’s chart book releases. Monthly chart (a week ago), Silver in US-Dollar, ready: Silver in US-Dollar, monthly chart as of November 26th, 2021. The above chart was posted in our last week’s publication. We wrote:” The monthly chart shows a high likelihood for November’s candle closing as an inverted hammer. Consequently, it provides for silver prices approaching the low end of the last 17-month sideways range near US$22.” Monthly chart, Silver in US-Dollar, set: Silver in US-Dollar, monthly chart as of December 3rd, 2021. We were spot on. The anticipated entry zone has been reached. We added to our physical holdings and shared the trade live in our free Telegram channel. Silver in US-Dollar, weekly chart, silver: Silver in US-Dollar, weekly chart as of December 3rd, 2021. We asked, “how much?” and in what diversification, which leaves us with the question of what denomination. The rule of thumb is that the smaller the weight amount is and the more recognizable the brand, the higher the cost. In addition, valuable numismatic collector’s coins have premiums as well. Generally, we find the added cost of brand items (Canadian maple leaf, American eagles, Austrian Philharmonic, and alike) to be of value since it adds to liquidity at a time of sale. While we would stay away from the added cost of numismatic collectible coins, we find there to be value to have a mix of coins and larger bars to arrive at a reasonably low-cost basis with a high degree of liquidity at the time of sale (larger bars are harder to sell than one-ounce coins). The weekly chart above illustrates that as much as we have entered the “shopping zone” for silver, there is a probability that we might see a quick spike down as we have seen at the end of September. As pointed out in the previous chart book, the goal of physical acquisition should not be the ultimate lowest price but availability and execution itself. We make a point of this, especially since we noticed that physical acquisition prices have in percentage retraced much less than the spot price right here, and once the turn is complete, could proportionally faster jolt up. Silver in US-Dollar, quarterly chart, go: Silver in US-Dollar, quarterly chart as of December 3rd, 2021. It is essential to have an exit strategy in place before entry. These exit projections are necessary to measure risk/reward-ratios. Moreover, with the entire plan clear, there will be no debate while in the trade. This part of exit psychology is often overlooked, but a low-risk entry point alone does not provide a good strategy. We expect a price advance on silver within the next six to eight quarters to a price target of US$74.40! Significant profits allowing for an outstanding risk/reward-ratio. Ready, set, silver, go: Last week, we anticipated the market’s direction correctly and find ourselves now at the desired low-risk entry zone. With possible additional questions about physical acquisition answered today, we might have reduced doubt. The devil is in the details, and due to the various countries, their taxation law, and the wide variety of official precious metal dealers, we did not dive into the details on where to take possession of your possibly desired purchase.  Nevertheless, our multinational membership in our free Telegram channel might provide helpful information to your specific situation. We hope we have provided enough knowledge to erase doubt. We encourage participation since we see procrastination towards a wealth preservation strategy as the poorest choice in this challenging time for your hard-earned money. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can also subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|December 3rd, 2021|Tags: Crack-Up-Boom, Gold, Gold/Silver-Ratio, inflation, low risk, Silver, silver bull, Silver Chartbook, silversqueeze, technical analysis, time frame, trading principles|0 Comments About the Author: Korbinian Koller Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
FX Update: EURCHF lower has been the Teflon trade

FX Update: EURCHF lower has been the Teflon trade

John Hardy John Hardy 03.12.2021 13:50
Forex 2021-12-03 13:28 4 minutes to read Summary:  A look across FX shows many of the usual suspects weakening with the recent bout of risk aversion, with commodity currencies near important levels versus the US dollar. While the JPY has traded erratically of late on conflicting themes and has not shown its safe haven status of yore, the Swiss franc has, managing to thrive when the focus is on inflation and when it is on weak risk sentiment as the SNB seems to have quietly stepped away from reining in franc strength. FX Trading focus: EURCHF lower has been the Teflon trade The most consistent trending pair in G10 FX of late has been the slide in EURCHF, which has even slipped below the prior six-plus-year low near 1.0500 over the last week. Remarkably, the pair has maintained its consistent ride lower through some remarkable jolts in the background, including the more hawkish shift from the Fed and the omicron news. This may suggest that the move is not being driven by strong speculative flows – which might have shown significant volatility in line with other currency pairs recently, but rather by consistent flows as the Swiss National Bank has apparently stepped away from the assumed stout defense of the 1.0500 level. The last two weeks of sight deposit data have shown no growth, i.e., no signs that the SNB is leaning against this move after doing so the prior four weeks. Also, when inflation fears dominate as they have at times recently, CHF strength is an easy way to avoid importing inflation without rocking the boat with monetary policy signals, while CHF strength is also a natural safe haven play when volatility spikes as it has in recent weeks. The consistent trend may be set to extend here, with parity in EURCHF a natural target. Elsewhere in FX, most of the smaller currencies are lining up on the usual risk-on, risk-off fault-lines, with commodities currencies and Scandies all weak as sentiment has softened again today, although it will be interesting to see if oil prices can make a stand after the reversal of the sharp sell-off yesterday despite nominally bearish news. Big next levels coming into view include 1.3000 in USDCAD and 0.7000 in AUDUSD. On the strong side, the EUR, USD and JPY are jockeying for the upper hand in addition to the strong CHF noted. The reaction function around today’s US jobs report (can a strong average hourly earnings add further energy to Fed upside expectations on top of an already momentous shift, and how much will residual omicron uncertainty hold back that pricing for now?). Chart: EURCHFEURCHF has weakened steadily since mid September in line with the weakening in EURUSD, but far more steadily than the latter, as this trend has managed to sustain through recent volatility elsewhere and shifting focus. The technical situation is without remarkable variation and there are no signs that the SNB is leaning against the move of late. Could the move extend all the way to within reach of parity? Source: Saxo Group Elsewhere, notable BoE hawk Michael Saunders was cautious sounding in comments today on the omicron variant uncertainty, prompting the sharp slide in sterling today. He said that the omicron development is a key consideration for whether to hike in December and sees some advantages in the BoE waiting for omicron data, which may sideline any hike potential at the December 16 meeting, with the market currently putting low odds on a move (difficult to measure – the idea has developed that the BoE will hike 15 bps to 0.25%, with about a 5-7 bps of hiking priced). Saunders still favors policy tightening soon and said today that the rate rise would be limited if the BoE gets going soon. Table: FX Board of G10 and CNH trend evolution and strengthThe impressive CHF rising nearly all the way to the top of the table here, as the left/right split of the G10 currencies is nearly perfect, with all of the five “smalls” in the red, most of them deeply so. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Plenty of bright orange readings in the daily ATR shadings – these indicate very significant volatility relative to the last 1000 trading days (top 10% ranking), , while it is interesting to note something like the EURUSD supermajor still trading with still quite low intraday volatility. AUDNZD is trying to flip back to negative, while USDCHF and USDJPY have yet to follow through lower after their recent flips to the negative in the “trend” reading. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1300 – ECB Chief Economist Philip Lane to speak 1330 – US Nov. Change in Nonfarm Payrolls 1330 – US Nov. Average Hourly Earnings 1330 – US Nov. Unemployment Rate 1330 – Canada Nov. Net Change in Employment 1330 – Canada Nov. Unemployment Rate 1415 – US Fed’s Bullard (voter in 2022) to speak 1500 – US Nov. ISM Services  1500 – US Nov. Factory Orders
Shockingly slow job growths Vs unemployment dive

Shockingly slow job growths Vs unemployment dive

Alex Kuptsikevich Alex Kuptsikevich 03.12.2021 15:15
In November, The US economy created 210K jobs, a shockingly low number compared with the expected 550K. And this is the weakest increase since January.This indicator noted a close correlation with the dynamics of new coronavirus cases, which are also at their highest since the beginning of the year in the USA.Average hourly earnings rose by 0.3%, maintaining the annual rate of 4.8% and falling short of expectations of a rise to 5.0%. It will not be surprising if policymakers comment in the coming days to raise the question of whether the recovery is losing steam. This is a negative surprise for the dollar as it reduces the pressure on the Fed with accelerated unwinding and faster rate hikes.The unemployment rate and the share of the economically active population, measured differently, contrasting sharply with the data above, marking a significant improvement. The unemployment rate has collapsed from 4.6% to 4.2%. This is a return to the multi-year norm, indicating a full labour market recovery. Notably, however, the economically active population has risen to 61.8%, indicating that the fall in unemployment is not the result of a shrinking labour force.Traditionally, markets pay more attention to month-on-month changes in employment numbers, but in this case, the effect of this extremely weak NFP data is balanced by a healthy, low unemployment rate.
Bonds Didn‘t Disappoint

Bonds Didn‘t Disappoint

Monica Kingsley Monica Kingsley 03.12.2021 15:57
S&P 500 sharply rebounded, and signs are it has legs. My key risk-on indicator to watch yesterday, HYG, turned up really strongly. No problem that the dollar didn‘t decline, it‘s enough that financials and energy caught some breath. We‘re turning to risk-on as Omicron didn‘t cause the sky to fall. What a relief! Seriously, it doesn‘t look that hard lockdowns would be employed, which means the market bulls can probe to go higher again. What I told you on Wednesday already in the title It‘s the Fed, Not Omicron, today‘s non-farm payrolls illustrate. Such was the game plan before the data release, and this refrain of bad is the new good, is what followed. The Fed is desperately behind the curve in taming inflation, and its late acknowledgment thereof, doesn‘t change the bleak prospects of tapering (let alone accelerated one) into a sputtering economy. What we‘re experiencing currently in the stock market, is a mere preview of trouble to strike in 2022. We‘re in the topping process, and HYG holds the key as stated yesterday. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 returned above the 50-day moving average, the volume wasn‘t suspicious – the bulls have regained the benefit of the doubt, and need to extend gains convincingly and sectorally broadly next. Credit Markets HYG successfully defending gained ground, would be a key signal of strength returning to risk-on assets and lifting up S&P 500. There is still much to go – remember that the sharpest rallies happen in bear markets, so all eyes on HYG proving us either way. Gold, Silver and Miners Precious metals weakness looks deceptive and prone to reversal to me – the real fireworks though still have to wait till the Fed gets doubted with bets placed against its narratives. Crude Oil Crude oil plunge is getting slowly reversed, about to. Beaten down the most lately, black gold is readying an upside surprise. Copper Copper is turning higher, taking time, but turning up – it‘s positive, but still more of paring back recent setback than leading higher. I‘m reasonably optimistic, and acknowledge much time is needed to reach fresh highs. Bitcoin and Ethereum The bearish ambush of Bitcoin and Ethereum didn‘t get too far – crypto consolidation goes on, no need to panic or get excited yet. Summary S&P 500 is in a recovery mode, and the bulls look ready to prove themselves. The keenly watched HYG close presaged the odds broadly tipping the risk-on way, just as much as cyclicals did. It‘s a good omen that commodities are reacting – not too hot, not too cold – with precious metals in tow. In tow, as the Fed isn‘t yet being doubted – the NFPs are a first swallow of its inability to carry out tapering plans till the (accelerated or not) end. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
The Trade Entry Has Been Triggered – How to Secure Profits?

The Trade Entry Has Been Triggered – How to Secure Profits?

Sebastian Bischeri Sebastian Bischeri 03.12.2021 15:34
  Entry… triggered! The price rallies to the Moon, but you don’t want to cash out “just yet” - am I right? So, let’s see how to prevent hard landing. There are obviously several methods to assess risk and thus to manage it, depending on one’s risk appetite or what is also more commonly known as risk profile. One method I use on swing (longer-term) trades is to manually lift my stop once – at least – 50% of the first target has been reached on a swing trade. I provide such trades on Sunshine Profits based on the projections I draw. Let’s take a practical case: in my last trade position on WTI crude oil provided on Nov-30, the market found a floor around $66. Then after being pushed up by the bulls, it rebounded onto that support level ($65.70-66.21), and rallied up to $69.49. So, if we take our reference entry in the middle of the yellow band at $66, the market moved up exactly 70% of the total distance to the target 1. At this point, to avoid giving profits away, an option would be to lift the stop to net breakeven ($66 + commissions/fees) so that the risk for that trade could get offset once 50% of the distance to the target 1 is passed. Following that, if, for example, the market pursues its rally further – let’s say up to 60% – then the stop will be lifted to net breakeven + 10% of the distance to the target 1. In our case the market rallied up to 70% of the distance to the target 1, so the stop should be lifted to net breakeven + 20% of the distance to the target 1. From my experience, this may represent a good way to manually trail your stop. Of course, there are many different methods to do so, but I haven’t heard of many investors or traders mentioning that one, therefore I wanted to present it here. The following chart is the one I posted in my trade review published on Wednesday, the 1st of December: WTI Crude Oil (CLF22) Futures (January contract, daily chart from Dec-1) To better visualize the price action that occurred, we zoomed into the 4-hour chart: WTI Crude Oil (CLF22) Futures (January contract, 4H chart from Dec-1) As you can see, the level provided was optimum given its function to act as a floor for rebounding prices. Then, the market was up to 70% of the total distance to reach the target 1, and finally reverted back down to the stop level. Now, this is today’s chart: WTI Crude Oil (CLF22) Futures (January contract, daily chart) Again, a zoom into the 4H chart lets us see more details of the price action that occurred: WTI Crude Oil (CLF22) Futures (January contract, 4H chart) In summary, using such a method of risk management to keep intermediate profits before the trade reverts strongly to the downside might be a good idea, particularly during high volatility periods. Are you interested in seeing this strategy in action? Make sure to check my Oil Trading Alerts! Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Weekly Close Out

Weekly Close Out

Luke Suddards Luke Suddards 04.12.2021 17:45
Omicron: In today’s weekly I’ll be dedicating some digital ink for the latest information on the new variant omicron. Ok so what are the major points of importance. New admissions to hospitals in Gauteng increased by 144% last week (hospitalisations lag cases by around 1-3 weeks). So far the early data shows the majority of these hospitalisations are from the unvaccinated (if that trend remains that’s positive). However, a recent study released from South Africa indicates reinfection risk is 3 times higher than previous variants. In terms of the deadliness of this variant, the early data looks good with Australia’s Chief Medical Officer Paul Kelly stating that of the 300 cases recorded worldwide all were very mild or had no symptoms at all. However, the sample size is too small so we can’t draw solid conclusions at this stage. The major vaccine makers have offered timelines of two to six weeks for assessing the vaccine escape properties of omicron via in-vitro lab tests. Interestingly, Moderna is less optimistic than Pfizer about expecting current vaccines needing to be tweaked to fend off the omicron variant. Volatility will remain high as the market remains on tenterhooks as new information drips through. Dollar Index (DXY): The greenback is flat on the week, with many quite perplexed by the lack of gains (particularly against the euro) given the hawkish Fed pivot and risk sentiment remaining on edge. The dollar coming in flat is a combination of gains against high-beta cyclical companies offset by losses against traditional safe haven currencies. Just take a look at the charts of USDJPY and AUDUSD. In terms of the euro, I’ll chat more about that below in the EURUSD paragraph. The big domestic news for the dollar this week was Jerome Powell’s hawkish rhetoric. The word transitory is to be retired as he admits the threat of persistently higher inflation has grown. On the QE purchases side of things, he remains open to it being wrapped up earlier than originally expected with a discussion on a faster pace taking place in 2 weeks at their December meeting. He elucidated his thoughts on the employment side of their mandate, stating that a great labour market requires a protracted expansion and in order to achieve this price stability has to occur. I see this as inflation now taking primacy over employment goals, indicating a shift in the Fed’s thinking with regards to inflationary pressures. The hawkish commentary from FOMC members this week such as Daly, Quarles, Barkin and Bostic would certainly suggest this is the case. STIRs are showing rate lift-off for practically June 2022 (96%) and over 2.5 hikes through December 2022. All attention now falls to the Non-Farm Payrolls number out today. The preliminary indicator such as ISM manufacturing index, ADP and jobless claims all pointing towards decent numbers from the jobs report today disappointed as NFP numbers missed expectations by a significant amount. Price moves have been muted as traders may be reluctant to place any fresh positions on and chase with the risk of adverse news over the weekend regarding omicron. Bottom line - traders should expect cross-asset volatility to remain higher over December. Next week we’ll receive November US inflation data, which is expected to remain elevated. DXY has regained the upper trend line of its ascending channel, putting some distance between price and its moving averages. The 21-day EMA continues to provide some dynamic support to price dips. The RSI has held above the key 55 level of support. Targets wise keep an eye out on the 96.5 on the upside and to the downside the 21-day EMA and former support around 95.5. EURUSD: So why did EURUSD strengthen on the market sell-off due to omicron on Friday and has remained fairly defensive throughout this week? It’s certainly not because the euro is a safe-haven currency in times of risk aversion. This price action has more to do with its use as a funding currency. Traders borrow euros to search for higher yield globally which is a decent strategy when risk conditions are favourable, however, when that risk dial flips in other direction we see the typical carry trade unwind, leading to flows back into the euro. Additionally, because expectations for rate hikes with regards to the eurozone are already significantly low, it’s at much less risk of a dovish repricing working favourably in terms of spread differentials with the dollar. Political pressure is rising on the ECB to act, particularly from Germany. A Reuters article out mid-week pointed towards some members wanting to rather hold off declaring their asset purchase intentions at this December meeting due to uncertainty caused by omicron. However, the ECB's Muller stated that he doesn’t think omicron is a reason to shift the scheduled end date for PEPP. Following this line of thought just today Madame Lagarde expressed that she feels certain that PEPP will cease in March as planned, saying markets require clarity in December. On the data front we had better than expected inflation prints from Germany (5.2% YoY) and the eurozone (4.9% YoY). It’s quiet in terms of economic data next week with the ZEW survey out as we lead up to a crucial ECB meeting in two weeks. EURUSD is drifting lower from its 21-day EMA. The RSI has stalled around the 40 level. Looking at the technicals clearly EURUSD is in a downtrend. Rallies in my opinion should be short lived with sellers coming in. Key levels to monitor in both directions are 1.135 (21-day EMA) and on the downside 1.12. GBPUSD: With a vacuum of economic data for the UK, the words of central bankers took centre stage. Bailey didn’t provide much meat at his speech this Wednesday. However, Saunders (leans hawkish) who spoke today has caused a repricing lower in the probability of a 15bps rate hike come December (only an additional 4bps now from around 8bps pre-speech). He expressed the need for potentially taking a patient approach with the uncertainty from omicron. Cable is lower as a result. On the virus front, the UK regulator has given the green light for booster doses to be offered to all adults. Additionally, the government has signed a contract for 114 million vaccine doses from Pfizer and Moderna, including access to modified vaccines if they're needed to tackle omicron and other future variants of concern. On the political front, domestically the Tories held the seat of Old Bexley and Sidcup, however, with a reduced majority. On Brexit, it’s been quiet of late with some optimism around the granting of additional fish licences to French fisherman in Guernsey, Jersey is the more important zone though prone to flare ups in tension. However, temperatures remain high between France and the UK on issues related to immigration. Next week sees UK October GDP data released. EURGBP has been moving higher on the back of dovish commentary (given he’s a hawk) from Saunders as well as benefiting from any souring in risk-sentiment. The 200-day SMA isn’t far aware, which has previously capped price gains. Cable continues to -plumb fresh YTD lows and is now nearing 1.32. The RSI is near to oversold territory but with some room remaining to eke out further losses. Moving averages are all pointing downwards. Targets wise, on the upside the 1.335 and above there former support around 1.34 (21-day EMA too). USDJPY: This pair continues to trade on US 10-year yield moves and now it’s status as a safe-haven currency has kicked back in. Early Friday morning has seen a bid coming in, which could be some pre NFP positioning on expectations of a move higher in the back end of the US yield curve. Put EURJPY on your radar, price is at a key support level around 128. USDJPY is finding support around its 50-day SMA, 113 round number and the 38.2% Fibonacci level. Price is trying to overcome resistance from the 50-day SMA. The former range support is providing some resistance around 113.5. The RSI is trying to get back into its range support around 46. Targets wise on the upside, 114 will be important and on the downside 112.5 (this week's lows). Gold: Gold has slipped below the $1775 support level as the hawkish fed leads to higher short term rates, kryptonite for the shiny yellow metal. Fears over inflation have failed to help gold stay propped up as well as risk-off fears from omicron. Inflation data out from the US next week will be a risk event for gold traders as well as the Fed meeting the following week. Today’s NFP hasn’t ignited much excitement in gold markets. Gold is trying to reclaim the $1775 support level. The 50-day SMA has made a very minor cross above the 200-day SMA. The 21-day EMA has been capping further gains. The RSI is in no man's land around 38. Targets wise, if $1775 is cleared then $1800 opens up (moving averages just below there). On the downside, $1750 comes into view. Oil: Crude fell sharply into a bear market this week as risk-off, Fed tightening, fears over further lockdowns and travel bans from the new omicron variant led to a repricing on the demand side of the equation. OPEC+ the main event for crude traders this week, decided to stick to their scheduled 400k bpd for January, but caveated this with the meeting remaining in “session”, meaning changes to the supply side could be made before their 4 January meeting if omicron causes a further deterioration. This led to yo-yo style price behaviour. Until there is more clarity regarding omicron, I expect oil’s price to remain choppy without a solid price trend. Backwardation spreads have narrowed, indicating a more balanced supply and demand equation. Iranian Nuclear Negotiations began the week positively, but sentiment turned pessimistic towards the end of this week, providing further short-term bullish tailwinds to crude’s price. JPM has some very bullish forecasts with the bank expecting crude to hit $150 by 2023. Oil is having a run at its 200-day SMA. The RSI has moved out of overbought territory and is a fair distance below its 50-day SMA (some mean reversion). Right now price will remain choppy within a range as omicron news flow prevents a trend from forming. Targets wise, on the upside the 200-day SMA and $73.50 dollar mark will be key. On the downside $68 support is important.
Gold's 1780s Are Driving Us Crazy!

Gold's 1780s Are Driving Us Crazy!

Mark Mead Baillie Mark Mead Baillie 06.12.2021 08:31
The Gold Update by Mark Mead Baillie --- 629th Edition --- Monte-Carlo --- 04 December 2021 (published each Saturday) --- www.deMeadville.com In completing its 48th trading week of 2021, Gold settled yesterday (Friday) at 1784. 'Twas the eighth week this year that Gold has settled in the 1780s (the first occurrence being on 19 February). Indeed, Gold's median weekly settle price year-to-date is 1788. Yet as anybody engaged in the Gold Story knows, Gold first traded in the 1780s a decade ago on 09 August 2011, the U.S "M2" money supply that day at $9.5 trillion; (today 'tis $21.5 trillion). So to reprise that from the "You Cannot Be Wrong Dept.": should anyone ask you "off the cuff" what is the price of Gold, your instantaneous response of "1780" shall (so 'twould seem for the foreseeable future) not only be correct, but enhance your dazzling intellectual image. To reprise as well "The M Word" crowd, clearly their parking place of preference is Gold's 1780s. Of the 233 trading days year to date, 27 of Gold's closures exceeding 1800 have -- within the five ensuing trading days -- found price settle in the 1780s, or lower. "1800? SELL!" Sheesh... Gold's 1780s are driving us crazy! Regardless, Gold -- and moreover Silver -- are doing what markets do when their technicals turn negative: price goes down. Per our Market Magnets page, Gold from 1861 on 18 November found price then pierce down through its Magnet: "SELL!" From our Market Trends page, Gold from 1847 on 19 November found the "Baby Blues" of trend consistency begin to plummet: "SELL!" From our Market Values page, Gold from 1805 on 22 November crossed below its smooth valuation line: "SELL!" More mainstream technical signals have since followed to "SELL!" And recall -- just prior to it all in our anticipating near-term selling -- we nonetheless deemed the 1800s as "safe": "WRONG!" Having thus now driven you crazy, we obviously deem holding and buying Gold as "RIGHT!" especially as the stock market -- be this another false signal or otherwise -- finds the S&P 500 doing its dance of a snake in death throes. To be sure we've seen such before, only to see the Index magically survive, indeed thrive. You veteran readers of The Gold Update may recall some six years ago (on 23 January 2016) our characterizing the S&P as being in such "death throes", the ensuing three weeks then finding the Index fall 5% from a "live" price/earnings ratio of 43x; (today 'tis 47x). "But don't forget it's now time for the Santa Claus Rally, mmb..." Yet another conventional wisdom notion there, Squire, via your appreciated "leading comment". Irrespective of what "everybody says" and expects, Santa Claus doesn't always come to Wall Street. Since 1980, as measured yearly from 01-to-24 December, Santa has skipped gifting the stock market 11 times. "WHAT?" 'Tis true. For those of you scoring at home, the S&P recorded net losses across that festive stint in '80, '81, '83, '86, '96, '97, '00, '02, '08, '15 and '18, the latter being a 409-point (-14.8%) loss. (Advice to the stocking stuffer: buy coal ... nudge-nudge, wink-wink, elbow-elbow). Moreover, have you been monitoring the major market dislocations of late? Talk about the maligning of conventional wisdom! In yesterday's session, the €uro, Swiss Franc, ¥en -- and yes the Dollar Index too -- all closed higher. "WHAT?" 'Tis true. Still, even as there is Dollar demand given the prospect of it paying a positive interest rate, the yield on the U.S. Treasury Bond continues to fall: 'twas 2.177% on 08 October, but is down now to 1.678%. In fact across our BEGOS Markets (Bond, Euro/Swiss, Gold/Silver/Copper, Oil, S&P 500), the price of the Bond is the only component with a positive 21-day linear regression trend. "WHAT?" 'Tis true. And then there's Oil: by our Market Values page, Black Gold settled yesterday 15 points below its smooth valuation line (66.22 vs. 81.51), even as Oil Inventories fell. "WHAT?" 'Tis true, (albeit OPEC is gonna keep a-pumpin'). Still, by that measure, Oil's price is massively, -- indeed deflationarily -- dislocated near-term from value. Too as noted, the Price of the S&P continues to be ridicously dislocated from the support of its Earnings; but if you get your dumbed-down P/E of 28.1x from the media, when 'tis honestly 47.4x, go ahead and say it: "WHAT?" 'Tis true. 'Course, the ongoing and most overwhelming dislocation is the price of Gold vis-à-vis our Scoreboard Dollar-debasement valuation (1784 vs. 4008). Say no more, Igor. A December to remember? Early on, 'tis the season to be dislocated. To which naturally (as subtly stated) we find Gold located in the 1780s. Why expect it to be anywhere else? So spot-on is Gold in the 1780s that per the following graphic of weekly price, the rightmost close is right on the dashed regression trendline. So are the 1780s driving you crazy, too? At least Gold's parabolic trend still is Long, although the aforementioned negative technicals have kept on the lid, (to say nothing of "The M Word" crowd?). Note as well the 79.1x reading of the Gold/Silver, ratio, essentially at a two-month high, the white metal having been terribly on the skids of late: Anything but skidding these last couple of months has been our Economic Barometer, it now having reached its highest oscillative level in better than three years. Whilst nominally last week's 13 incoming metrics were quite mixed, their overall effect net of prior period revisions and consensus expectations was to launch the Baro higher still as we here see: Amongst the improvers were November's Unemployment Rate and Average Workweek, plus both the Manufacturing and Services readings from the Institute for Supply Management, along with October's Construction Spending, Factory Orders and Pending Home Sales. However: November's ADP Employment data, Labor's Non-farm Payrolls and Hourly Earnings, the Chicago Purchasing Managers' Index and the Conference Board's read on Consumer Confidence were all weaker. Therein, too, is the red line of the S&P 500, its aforementioned snaky death throes throwing the Index all over the place this past week. The S&P's intra-day runs were as follows: Mon +48, Tue -86, Wed -143, Thu +91, Fri -113. Want some perspective for that? The entire trading range of the S&P 500 for the year 2004 was less than this past Wednesday's session alone. "WHAT?" 'Tis true. 'Course, back in 2004, 'twas a greater percentage range, but at least the average P/E for that year was a "reasonable" (vs. today) 26.4x. Thus again is begged the question: "Has the S&P crashed yet?" Obviously not, but we're feelin' very leery 'bout January. "As goes January..."(although you regular readers know we've demonstrably debunked that conventional notion as well). BUT... As for the Federal Reserve's removing of the punch bowl, Atlanta FedPrez Raphael "Ready to Raise" Bostic again says its time to step up the Taper of Paper Caper, whilst FedGov Randal "Have No" Quarles says 'tis time for The Bank to prepare to raise. And as noted in last week's missive: were it not for the "Oh my! Omicron!" scare, we could well see a FedFunds rate hike in the FOMC's 26 January Policy Statement. So just keep wearing your masque such that everything's great, and in turn let the Fed increase its rate! Here's another positive from the "Good Is Bad Dept.": the StateSide government shan't run out of money this time 'round until 18 February. Low on dough? To Congress you go! Just ask TreaSec Yellen, for she's in the know! Ho-ho-ho... Either way, west of The Pond "inflation" remains the watchword -- or if you prefer the real word -- as the word "transitory" is being transited away. East of The Pond, the EuroZone (just 23 years young) sees its inflation level hitting record high levels; but should it be peaking, 'tis thought any European Central Bank rate rise shan't next year materialize. And lacking any upside mobility of late (duh) are our precious metals, the following two-panel graphic bearing along as butt ugly. On the left we've Gold's daily bars from three months ago-to-date, their cascading "Baby Blues" reinforcing price's downtrend, (although price never really departs the 1780s, right?). On the right similarly is the same story for Sister Silver, who clearly is suffering the ravages of DDS ("Dangerfield Disrespect Syndrome"), by which she's none too happy. For from the precious metals' respective highs of just three weeks back, Gold has dropped as much as -5.8% ... but Silver more than double that at -12.6%! "WHAT?" 'Tis true: Meanwhile, still dwellers in their Profile cellars are Gold (below left) and Silver (below right). Here is the entirety of their trading across the last two weeks, the high volume price apices as labeled. And that is a lot of overhead work to do: So after all of that, are you ready to tune out? You can't be so blamed. Gold's 1780s have got us all crazy! Puts us in mind of that iconic glamour rock hit by Sparks from back in '83 -- supportive of the film by the same name -- "Get Crazy"Tune it in on your radio dial: sure to bring a you a Golden Smile! Cheers! ...m... www.deMeadville.com
Intraday Market Analysis – USD Shows Weakness

Intraday Market Analysis – USD Shows Weakness

John Benjamin John Benjamin 06.12.2021 10:44
USDCHF struggles to bounce The US dollar softened after November’s nonfarm payrolls missed the mark. The pair has met stiff selling pressure at 0.9270, a former support that had turned into a resistance. The bullish RSI divergence suggests a slowdown in the sell-off though there is no confirmation yet for a sustainable bounce. 0.9120 is a key demand area on the daily timeframe and a bearish breakout would invalidate the November rebound. Buyers may switch sides as sentiment further deteriorates, exacerbating volatility to the downside. CADJPY breaks higher The Canadian dollar surged after November’s unemployment rate fell to 6%. A bearish MA cross on the daily chart still indicates a pessimistic mood. An oversold RSI on the hourly chart caused a limited bounce as short-term traders took profit. Sellers are eager to fade rebounds with the latest being at 89.20. 87.20 at the base of the October rally would be the next support. A deeper correction may send the loonie to 85.90. The bulls will need to lift said resistance before they could initiate a reversal. UK 100 attempts to rebound The FTSE 100 recouped some losses bolstered by a weaker US jobs report. The index saw buying interest over the psychological level of 7000 which sits in the daily demand zone. The RSI’s double-dip in the oversold area has attracted a ‘buying-the-dips’ crowd in this congestion area. A close above the immediate resistance at 7150 is an encouraging sign of a bullish attempt. 7310 is a major hurdle ahead, its breach could short circuit the correction. 7060 is the closest support in case of weakness in the rebound.
China turns from stick to carrot

China turns from stick to carrot

Alex Kuptsikevich Alex Kuptsikevich 06.12.2021 13:00
Last Friday was marked by strong pressure on Chinese shares, which lost 10-20% each in New York trading due to the announcement that DiDi, the Chinese counterpart to Uber, will delist in the US and float in China by the middle of next year. This is a significant concession to the Chinese authorities, and investors took it as a signal that we will be hearing more announcements like this soon. This is probably Politburo’s policy turn from a stick to a carrot. Chinese equity indices have been falling since February due to three negative factors: regulatory restrictions on the technology sector, tight monetary policy and waning economic growth. However, the risks of an economic slowdown seem to have come to the forefront, pushing back fears of inflation and turning to monetary stimulus to stabilise financial markets. On Monday, the People’s Bank of China lowered the reserve requirement for banks, freeing up about $188bn of liquidity. The measures are designed to support small businesses by easing access to finance. The bank took the step because of early signs that inflationary pressures are stabilising and the need to get the economy back on growth. The policy easing is moderately negative for the renminbi and should weaken the yuan, taking it away from the 2.5-year highs against the dollar. Furthermore, the Chinese Politburo promises “healthy development” for the real estate sector. It is unlikely that this wording will allow the asset holders of distressed property developers Evergrande or Kaisa to breathe a sigh of relief. But for the market, such top-level attention raises hopes that the peak of pressure is over. Since the global financial crisis, China has largely ensured a growth recovery thanks to the massive stimulus to the economy. This year, the Politburo avoided such sweeping actions for fear of adding fuel to the inflation fire. However, it seems that they are not prepared to stay on the sidelines any further. Friday’s sell-off in the Chinese giants is reminiscent of a final blow to a trend, which is often followed by a reversal. We saw a similar thing with oil in April 2020. Today the H-Shares Index is taking out Friday’s momentum on the US markets, losing 2% and trading at 5.5-year lows, near the bottom of the long-term trading range, down more than 30% from the peaks. Reaching these levels has caused the authorities to move to support the economy and the financial system. We could then see increased buying on the realisation that the sell-off in Chinese companies has gone too far, pushing them back to multi-year lows.
The risk vortex of crypto and bubble baskets

The risk vortex of crypto and bubble baskets

Peter Garnry Peter Garnry 06.12.2021 14:04
Equities 2021-12-06 13:30 5 minutes to read Summary:  Our Bubble Stocks and Crypto & Blockchain baskets are the two worst performing baskets this month as these pockets of the market are currently going through a big realignment in terms of expectations. The Fed's new objective of getting inflation under control will accelerate tapering and led to several rate hikes next year. Combined with a significant fiscal drag next year, US growth stocks will be hit by both lower growth and higher discount rate on cash flows, the worst of all combinations. This means that growth stocks that can show a credible upward sloping path on operating margin will fare much better whereas growth stocks that will fail in delivering higher operating margin will experience more trouble. Friday’s price action was not pretty. Despite strong economic figures from the US the 10-year yield declined and normally that would have been a positive for technology stocks, but instead Nasdaq 100 continued lower with our Bubble Stocks and Crypto & Blockchain baskets leading the declines. On Saturday, Bitcoin was down as much as 21.2% at the lows adding to the woes of these pockets of the market. We know from surveys that there is a large overlap in exposure between investors in growth/bubble stocks and cryptocurrencies and that it is people under the age of 35 that dominates the exposure. Source: Saxo GroupThe Crypto & Blockchain basket (see composition below) is down 12.7% in December making it the worst performer and if we see the Fed getting ahead of the curve hiking rates three times next year then it could take more steam out of the crypto industry. The recent high profiled listing of Bakkt through a SPAC is a crypto related company that we will soon release a more thorough analysis of. As the table below also show analysts remain bullish on the industry with a median price target 77% above current prices. The key risk for bubble stocks and crypto related assets this week is the US inflation report on Friday which could accelerate the market’s expectations of tapering and rate hikes if inflationary pressures remain stubbornly high. Name Segment Market Cap (USD mn.) Sales growth (%) Diff to PT (%) YTD return (%) 5yr return Coinbase Global Inc Crypto exchange 57,169 139.3 44.1 NA NA Signature Bank/New York NY Bank 18,487 9.7 22.2 128.2 110.5 MicroStrategy Inc Investment firm 6,896 5.1 38.5 62.4 218.0 Galaxy Digital Holdings Ltd Crypto services 6,245 NA 83.5 128.3 1,213.0 Silvergate Capital Corp Bank 4,364 61.3 32.1 121.0 NA Marathon Digital Holdings Inc Crypto mining 4,274 4,562.5 64.1 298.9 57.7 Bakkt Holdings Inc (*) Digital assets platform 3,354 NA 114.9 29.3 NA Riot Blockchain Inc Crypto mining 3,339 1,497.4 90.3 68.6 659.6 Northern Data AG Infrastructure 2,523 62.7 20.7 26.8 NA Voyager Digital Ltd Crypto broker 2,105 8,169.3 83.1 234.0 NA Monex Group Inc Financial institution 1,827 75.3 50.4 111.2 182.7 Hut 8 Mining Corp Crypto mining 1,553 203.9 102.8 241.8 352.1 Hive Blockchain Technologies Ltd Crypto mining 1,216 395.3 NA 67.4 3,900.0 Bitfarms Ltd/Canada Crypto mining 1,194 7.0 57.0 220.0 NA Canaan Inc Infrastructure 1,040 225.5 NA 2.2 NA Stronghold Digital Mining Inc (*) Crypto mining 872 NA 132.3 NA NA Argo Blockchain PLC Crypto mining 690 131.5 127.5 236.4 NA Coinshares International Ltd (*) Digital asset management 586 NA -7.3 NA NA Bit Digital Inc Crypto mining 571 NA 69.9 -62.4 NA Bitcoin Group SE Crypto broker 236 138.7 187.4 -41.8 626.8 DMG Blockchain Solutions Inc Investment firm 128 2.7 104.1 58.1 1,533.3 Digihost Technology Inc Crypto mining 118 NA NA 100.7 NA Taal Distributed Information Technologies Inc Blockchain platform 105 NA 139.5 49.0 NA Future FinTech Group Inc Blockchain e-commerce 85 2,555.0 NA -35.1 -83.6 Quickbit EU AB Crypto payment services 59 -27.2 NA -18.1 NA Safello Group AB Crypto broker 17 NA NA NA NA Aggregate / median   119,055 135.1 76.5 68.0 352.1 Source: Bloomberg and Saxo Group* Added to theme basket on 29 October 2021** Infrastructure segment means physical computing applications for crypto mining Growth stocks have a profitability problem more than a growth problem The selloff in growth stocks have many liquidity and technical characteristics, and the recent shift by the Fed to focus on getting inflation down is beacon of what to come. The Fed will accelerate its tapering of bond purchases and move more quickly on interest rates which means that the discount rate will go up while growth might face headwinds from higher interest rates and a fiscal drag (the fiscal deficit will shrink in 2022). This is a double whammy for growth stocks. DocuSign’s Q3 earnings release was portrayed as a problem of revenue growth but if you model the company’s shareholder value then you will see that the more sensitive parameter to its implied expectations is its future operating margin. While DocuSign lifted its operating margin to 3.1% for the quarter up from 0.5% in Q2 and -5.2% a year ago, it was still below expectations and that extends the trajectory for improving the operating margin and thus lowers the value of the company. Many growth companies will not have growth trajectories that will differ much from what is implied in current market values, and a downside miss is definitely not the biggest downside trigger on market value. The reality is that growth stocks are priced for high growth and then a hockey stick on operating margin, but if that hockey stick is pushed further out then it has a big impact on market value. The next year will separate growth stocks into two camp. Those that can deliver on expanding their operating margin and those that will fail to do that. 
Topping Process Roadmap

Topping Process Roadmap

Monica Kingsley Monica Kingsley 06.12.2021 15:43
S&P 500 bulls missed a good opportunity to take prices higher in spite of the sharp medim-term deterioration essentially since the taper announcement. It‘s the Fed and not Omicron as I told you on Wednesday, but the corona uncertainty is reflected in more downgrades of real economy growth. There are however conflicting indicators that make me think we‘re still midway in the S&P 500 topping process and in for a rough Dec (no Santa Claus rally) at the same time, and these indicators feature still robust manufacturing and APT (hazmat manufacturer) turning noticeably down.Still, it‘s all eyes on the Fed, and its accelerated tapering intentions (to be discussed at their next meeting) as they finally admitted to seeing the light of inflation not being transitory. The ever more compressing yield curve is arguably the biggest watchout and danger to inflation and commodity trades – one that would put question mark to the point of answering in the negative whether we are really midway in the topping process. Another indicator I would prefer turning up, would be the advance-decline line of broader indices such as Russell 3000. And of course, HYG erasing a good deal of its prior sharp decline, which I had been talking often last week – until that happens, we‘re in danger of things turning ugly and fast, and not only for stocks should 4530s decisively give.In spite of decreasing yields, the dollar continues acting on the bullish argument introduced 2 weeks ago. Seeing antidollar plays struggle (part of which is the function of inflation expectations drifting lower on the Fed‘s turn – let‘s see when the central bank breaks something, which is a story for another day), is truly a warning of downside risks having sharply increased since Thanksgiving. Not only for stocks, where we might not be making THE correction‘s low, but also for commodities, cryptos and precious metals. In a series of two tweets yesterday, the warning is in regardless of a smooth Monday ahead.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 bears are looking a bit tired here, and the room for an upswing is getting evident. The surge late on Friday concerned both tech and value, thankfully – overall, the market breadth isn‘t though much encouraging.Credit MarketsHYG did successfully defend gained ground, and strength appears very slowly returning – the gains have to continue to sound the all clear, for considerably longer. As said on Friday, the sharpest rallies happen in bear markets, so all eyes on HYG proving us either way.Gold, Silver and MinersPrecious metals are looking fairly stable at the moment – not ready to decline, and still taking time to rebound. The accelerated taper idea didn‘t take them to the cleaners – the real fireworks though still have to wait till the Fed gets really close to choking off growth.Crude OilCrude oil could keep the intraday gains, but appears base building here – similarly to natgas, this is a medium-term buying opportunity as prices would inevitably recover.CopperCopper prices reflect the combined Fed and (to a lesser degree) Omicron uncertainty – it‘s casting a verdict about upcoming real economy growth, and the red metal is still looking undecided, and merely gently leaning towards the bulls.Bitcoin and EthereumThe bearish ambush of Bitcoin and Ethereum was reserved for the weekend, and the bleeding hasn‘t stopped so far.SummaryS&P 500 looks to have reached the low, but the jury remains out as to whether that‘s THE low. I highly recommend reading today‘s analysis for it lays out the key metrics to watch in its opening part. The nearest days and weeks will be of crucial importance in determining whether the worst in the stock market and commodities correction is behind us, or whether we still have some more to go.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
US Dollar Still Has the Green Light

US Dollar Still Has the Green Light

Przemysław Radomski Przemysław Radomski 06.12.2021 16:13
  The dollar looks poised for another rally, to gold’s dismay. So, what’s the price target for the greenback over the winter months? While the consensus across the financial markets (especially at the beginning of the year) was that the U.S. dollar was destined for devaluation, I warned that the greenback would rise from the ashes. And with gold, silver, and mining stocks often moving inversely to the U.S. dollar, the latter’s ascent helped make the precious metals one of the worst-performing asset classes in 2021. Moreover, after more dollar doubters emerged in October – and the precious metals rallied hard – the USD Index eventually cut through 94, 95, and then 96 like a knife through butter. And with the precious metals reversing sharply once again, I expect another rally to push the USD Index to ~98 over the medium term. Perhaps quite soon. And the implications for the precious metals sector, are bearish. On top of that, while overbought conditions elicited a short-term pullback, end-of-month turnarounds and / or rallies are commonplace for the greenback. For context, I warned that a consolidation was likely overdue by highlighting the USD Index’s overbought RSI (Relative Strength Index) readings with the red arrows above. Conversely, the blue vertical dashed lines above demonstrate how the USD Index often bottoms near the end of each month, and rallies often follow. And while the current consolidation may need some more time to run its course, higher highs should materialize over the medium term. To explain, after the USD Index recorded sharp rallies in June and July, consolidation phases unfolded before the uptrends continued. And while the secondary uprisings occurred at more moderate paces, the USD Index still managed to make new highs. As a result, ~98 should materialize during the winter months. Furthermore, if the forecast proves prescient, the USD Index’s strength will likely usher gold back to its previous 2021 lows. Adding to our confidence (don’t get me wrong, there are no certainties in any market; it’s just that the bullish narrative for the USDX is even more bullish in my view), the USD Index often sizzles in the summer sun and major USDX rallies often start during the middle of the year. Summertime spikes have been mainstays on the USD Index’s historical record and in 2004, 2005, 2008, 2011, 2014 and 2018 a retest of the lows (or close to them) occurred before the USD Index began its upward flights (which is exactly what’s happened this time around). Furthermore, profound rallies (marked by the red vertical dashed lines below) followed in 2008, 2011 and 2014. With the current situation mirroring the latter, a small consolidation on the long-term chart is exactly what occurred before the USD Index surged in 2014. Likewise, the USD Index recently bottomed near its 50-week moving average; an identical development occurred in 2014. More importantly, though, with bottoms in the precious metals market often occurring when gold trades in unison with the USD Index (after ceasing to respond to the USD’s rallies with declines), we’re still far away from that milestone in terms of both price and duration. Again, the recent move higher in the USD Index doesn’t necessarily apply in the case of the above rule, as it was not the strength of the USD but weakness in the euro that has driven it. Likewise, with the USD Index now approaching its long-term rising support line (which is now resistance), a rally above the upward sloping black line below would invalidate the prior breakdown and support a move back above 100. Also, please note that the recent medium-term rally has been calmer than any major upswing witnessed over the last 20 years, where the USD Index’s RSI has hit 70. I marked the recent rally in the RSI with an orange rectangle and I did the same with the second-least and third-least volatile of the medium-term upswings. The sharp rallies in 2008 and 2014 were of much larger magnitudes. And in those historical analogies, the USD Index continued its surge for some time without suffering any material corrections. As a result, the short-term outlook is more of a coin flip. However, the medium-term outlook remains profoundly bullish, and gold, silver, and mining stocks may resent the USD Index’s forthcoming uprising. Just as the USD Index took a breather before its massive rally in 2014, it seems that we saw the same recently. This means that predicting higher gold prices (or the ones of silver) here is likely not a good idea. Continuing the theme, the eye in the sky doesn’t lie. And with the USDX’s long-term breakout clearly visible, the wind remains at the dollar’s back. Furthermore, dollar bears often miss the forest through the trees: with the USD Index’s long-term breakout gaining steam, the implications of the chart below are profound. And while very few analysts cite the material impact (when was the last time you saw the USDX chart starting in 1985 anywhere else?), the USD Index has been sending bullish signals for years. Please see below: The bottom line? With my initial 2021 target of 94.5 already hit, the ~98 target is likely to be reached over the medium term (and perhaps quite soon), mind, though: we’re not bullish on the greenback because of the U.S.’ absolute outperformance. It’s because the region is fundamentally outperforming the Eurozone, the EUR/USD accounts for nearly 58% of the movement of the USD Index, and the relative performance is what really matters. In conclusion, gold, silver, and mining stocks have reversed sharply in recent weeks. And though the trio tried to ignore the USD Index’s recent uprising, I wrote on Jul. 23 that the time-tested relationship of ‘U.S. dollar up, PMs down’ will likely be a major storyline during the Autumn months. To that point, with the theme likely to continue over the medium term, lower lows should confront gold, silver, and mining stocks over the next few months. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Intraday Market Analysis – USD Treads Water - 07.12.2021

Intraday Market Analysis – USD Treads Water - 07.12.2021

John Benjamin John Benjamin 07.12.2021 09:00
GBPUSD attempts to rebound The sterling consolidates as BOE officials stress due to inflationary pressure from a tight labor market. So far, rebounds have been an opportunity for trend followers to sell into strength. The pound is testing last December’s demand zone around 1.3200. An oversold RSI may help lift bids momentarily as sellers take profit. 1.3300 is the immediate resistance. Then the bulls will need to clear the origin of the latest sell-off at 1.3370 to attract more buying interest. On the downside, a breakout would send the price to 1.3100. NZDUSD sticks to downtrend The US dollar edged higher thanks to a rally in Treasury yields. Increasing divergence between the 20 and 30-day moving averages suggests a deterioration in market sentiment. On the hourly chart, a short-lived rebound has struggled to stay above 0.6780. And that is a sign that the bears are still in control of the direction. 0.6700 is the next support. Its breach would extend the sell-off to November 2020’s lows near 0.6600. The RSI’s oversold situation may cause a limited rebound with 0.6810 as the closest resistance. US 30 breaks higher The Dow Jones recoups losses as the omicron variant may have less impact than feared. The index bounced off last October’s lows around 34000. An oversold RSI in this demand zone has attracted a crowd to buy the dips. A break above 34950 and then 35300 would prompt short-term sellers to cover, paving the way for a sustainable rally. 35950 would be a key hurdle and its breach may turn the cautious mood around and resume the bullish trend. 34700 is the first support when the bulls try to catch their breath.
Bitcoin, going from strength to strength

Bitcoin, going from strength to strength

Korbinian Koller Korbinian Koller 07.12.2021 14:07
Like a whale diving deep to gorge on krill to emerge even more empowered shortly after. When catching these cycles right, bitcoin is ever rewarding. BTC in US-Dollar, Monthly Chart, up and up and up: Bitcoin in US-Dollar, monthly chart as of December 7th, 2021. Typically, fortunes are slowly acquired and quickly destroyed, not so with bitcoin. Bitcoin’s up moves can be as dramatic as their declines. In addition, bitcoin seems bulletproof to fundamental attacks. With China’s ban on mining, its share of the global hash rate sank from 75% held in September 2019 to zero by now. Miners migrated to the US and had its 2019 4% hash rate rise to 35%. It is essential to remind oneself of facts like these, when emotions overcome one with doubt and confidence falters at these steep declines in bitcoin. At times when opportunity knocks and self-confidence is critical for accurate trade execution. The monthly chart above shows the roller coaster moves that can make even the stern trader doubtful, yet bitcoin rose closer to the sun after each cloud. We find six figure bitcoin prices to be likely within the next few months, as indicated in the very right green up arrow in the chart. Gold in Bitcoin, Daily Chart, measuring true value: Gold in Bitcoin, daily chart as of December 7th, 2021. Where we see bitcoin going from strength to strength, as well, is the relatively rare occurrence of fiat currencies being endangered by inflation to the level that we are right now. Fortunes can change hands quickly. Typically, procrastination is fueled by the belief of a rise in the cost of things. In reality, currency is less valuable. We, as such, encourage you not to measure everything in your country’s currency. We find measurements towards a gold price or a bitcoin price a more realistic view of price/value changes. The chart above shows how the relationship between gold and the bitcoin price changed over the short term, with bitcoins’ recent sharp decline.   BTC in US-Dollar, Weekly Chart, in the not to distant future: Bitcoin in US-Dollar, weekly chart as of December 7th, 2021. A six-sigma event risk in the overall market environment is always present. Such a market crash would temporarily drag bitcoin to lower prices and needs to be reflected in your money management. Other than that, we see prices right here as a good starting zone for the next push-up which should exceed all-time highs in the not-too-distant future, as portrayed in the above chart. Bitcoin, going from strength to strength: No matter what we tell ourselves, when prices decline, we feel fearful. It is always hard to step into such selling pressure for a low-risk entry spot based on the action/ reaction principle to be part of the next cycle up.  Moreover, practice and planning are required to be part of these upswings and to ride the wave. Our quad strategy aims to reduce initial risk quickly after an entry has been made. Last Friday’s entries near the lows of the day allowed for a more than ten percent profit-taking on half of the position size, a target we call “financing.” Unheard of in any other liquid, low-risk market. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|December 7th, 2021|Tags: Bitcoin, Bitcoin bounce, Bitcoin bullish, bitcoin consolidation, crypto analysis, Crypto Bull, crypto chartbook, DeFi, low risk, quad exit, technical analysis, trading education|0 Comments About the Author: Korbinian Koller Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
Alibaba Stock Price and Forecast: Why is BABA stock going up?

Alibaba Stock Price and Forecast: Why is BABA stock going up?

FXStreet News FXStreet News 07.12.2021 15:59
BABA stock rallies over 10% on Monday in broad rally. Chinese names have suffered as DIDI delisting hits sentiment. BABA and others rally on Monday as China cuts commercial bank reserve requirements. Chinese stocks are nothing if not volatile, and this continued on Monday with huge rallies in most names. The reason was that China cut the reserve requirement for commercial banks in an effort to try and pump liquidity into the system. This can be taken two ways, and investors chose to see the positives. China is struggling to contain problems in the banking and property sectors from spreading, and the travails of Evergrande Group have been well documented. Evergrande was due to pay $82.5 million on Monday, but we are still in the dark on whether it met this latest payment or not. Bloomberg is reporting that another Chinese developer, Kaisa Group Holdings, received a forbearance proposal from bondholders on Tuesday. A forbearance proposal would be a form of an agreed delay or reduction in repayments. If agreed by both bondholders and the company, it averts a formal debt default. BABA chart, 15-minute Alibaba (BABA) stock news BABA stock has been under pressure throughout 2021 as a wave of negative sentiment hit Chinese equities and in particular Chinese tech names. This was kickstarted by BABA itself as it had to shelve the proposed spin-off IPO of ANT Group late in 2020. China then began taking a more cautious approach to its tech sector as worries over the huge amounts of data generated by them escalated. Didi Group (DIDI) did manage to get its IPO off the ground in New York but now plans to delist to Hong Kong. Alibaba stock is down 47% so far in 2021 and 22% over the last month as the sell-off has accelerated. Alibaba (BABA) stock forecast Investors may rejoice at the current bounce in Chinese tech stocks, but this has all the makings of yet another dead cat bounce. Take a look at the monthly chart below. BABA has broken the huge $130 level, which was really the last hope of support. Now it is lookout below until $100. The longer-term view is strongly negative until $169 is broken to the upside. Alibaba chart, monthly Shorter-term traders will be aware of the 9-day moving average offering resistance at $127.56. The MACD, stochastics and RSI all remain in bearish territory. The 15-minute chart does show short-term support at $112 with a large amount of volume at that level on Friday that provided a base for Monday's rally. This may carry on for Tuesday as risk assets are due to bounce, but $130 will likely cap any further gains. Alibaba daily chart above and the 15-minute chart below. The 15-minute shows the large support volume at $112.  
Oil and more...

Oil and more...

Luke Suddards Luke Suddards 07.12.2021 17:07
Oil: Crude has been rocketing higher after positive news flow with regards to omicron. Early evidence from South Africa indicates that ICU and oxygen usage are lower than previous waves at similar points on the timeline as well as those in hospital being largely unvaccinated. Based on this small sample size of evidence (which makes me still cautious) this leads one to believe omicron seems more transmissible, but less severe. Fauci (Biden’s Chief Medical Adviser) also shared optimism over the weekend stating that early signals show not a whole lot of severity. GlaxoSmithKline Plc also announced from their recent research that their Covid-19 antibody treatment is effective against mutations in omicron. Risk assets, which oil is falls into got a boost from this and current price action indicates some hot money has flowed back into the black liquid. Adding fuel to the bullish fire we had news that Iran-US Nuclear talks have stumbled a bit. Looking at the daily chart, technicals are strong with an oversold bounce having taken place with $68 support holding. Price is now above its 200-day SMA. Targets wise, on the upside the 21-day EMA around $76 and $78 will be important. On the downside $73.5 (just above the 200-day SMA) will be key. AUDUSD: The RBA left their policy settings unchanged as expected by the market. On the technicals, looking at the 1-hour chart here we can see price is facing some resistance in the form of the intersection of the 200 period SMA, downtrend line and 61.8% Fibonacci level. The RSI is in overbought territory. Could we see a dip lower towards the 0.705 area between the 21 period EMA and the 50 period SMA. On the upside 0.715 would be important. EURJPY: EURJPY on the 1 hour chart has been fluctuating between the 128.5 and 127.5 range bounds. Keep this one on your radar if you like playing the range.
Who Wants to Buy Bitcoin Now?

Who Wants to Buy Bitcoin Now?

Alex Kuptsikevich Alex Kuptsikevich 08.12.2021 08:40
Since yesterday, Bitcoin has gone from almost $52K to $50.7K. On Tuesday, the crypto market was green on nearly all fronts, including ETH, ADA, XRP, etc. And although the Fear Index continued to remain in the horror zone with 26 points, everyone was buying altcoins. However, BTC did not gain a foothold above the resistance at $51,800, so it is premature to talk about conquering the heights and completing the correction. Perhaps this is not even a correction now, but a search for the actual price without rose-coloured glasses and excessive optimism. Whether there are still those who want to ride up at their own expense on the market, we will only find out when Bitcoin rises above $56K. A Grayscale poll found that 26% of American investors have already bought BTC. So, apparently, we just need the remaining 74% to join in. But do they have any motivation? Moreover, the United States has introduced cryptocurrencies into its anti-corruption strategy, although exactly how this will affect the market is unclear. Aside from the local downward trend in Bitcoin, the cryptocurrency market remains bullish, rapidly changing sentiment and moving from correction to growth. Based on the posts on Twitter, the popularity of cryptocurrencies is only growing. Thus, in partnership with the Gemini crypto exchange, the largest bank in Colombia, Bancolombia, added transaction services with BTC, ETH, LTC, and BCH to its list. Video game developer Ubisoft has launched an NFT platform, and blockchain project Spiral, a division of Jack Dorsey's Block, will improve Bitcoin's Lightning Network. Among the small altcoins, the hot class of projects related to the metauniverses remains. This topic is so popular that almost any new project considers it its duty to point out the potential for the development of this topic. It seems that investors are recruiting all newcomers to their portfolio, hoping to get an impressive profit if at least one project hits. However, you should be extremely careful. At the end of November, it seemed that the Covalent coin, issued six months ago, recovered relatively quickly from the traditional drawdown in the first months of its life. However, since the beginning of December, its value has been rapidly decreasing, colouring the first eight days of the month in red and confidently remaining below the offering price. At the same time, this cryptocurrency suits well for intraday trading: for yesterday's session, for example, it grew by 3.62%, although this did not affect the overall “red” result.
Weak November Payrolls Won’t Help Gold

Weak November Payrolls Won’t Help Gold

Arkadiusz Sieron Arkadiusz Sieron 07.12.2021 17:14
  November employment report was mixed. Unfortunately for gold, however, it won’t stop the Fed’s hawkish agenda. Nonfarm payrolls disappointed in November. As the chart below shows, the US labor market added only 210,000 jobs last month. This number is much lower than both October’s figure (546,000 gains) and the market expectations (MarketWatch’s analysts forecasted 573,000 added jobs). So, it’s a huge blow to those optimistic about the US economy. However, this is a huge blow that nobody will care about because the disappointing payrolls were accompanied by a big decline in unemployment. As the chart above shows, the unemployment rate decreased by 0.4 percentage points, from 4.6% in October to 4.2% in November. What’s more, the unemployment rate declined simultaneously with the increases in both the labor-force participation rate (from 61.6% to 61.8%) and the employment-to-population ratio (from 58.8% to 59.2%). This means that the reduction in unemployment was genuine and rather not a result of dropping out from the labor market. Additionally, wage inflation has slowed down from 4.84% in October to 4.8% in November, remaining below expectations, which could slightly ease inflationary concerns. Last but not least, after revisions, employment in September and October combined was reported to be 82,000 higher than previously indicated, and the monthly job growth has averaged 555,000 so far this year. Therefore, even a weak November doesn’t change the fact that 2021 marked a great improvement in the US labor market.   Implications for Gold What does the November employment report imply for the gold market? The nonfarm payrolls disappointed, but it’s not enough to stop the Fed from accelerating the pace of tapering its quantitative easing, especially given the significant reduction in the unemployment rate. So, the hawkish revolution won’t be stopped. It may even be strengthened, as a big decline in unemployment brings us closer to “full employment” and meeting the criteria for hiking interest rates. This is, of course, not good news for the gold bulls. After hearing worries about inflation a few weeks ago, the Fed managed to calm investors. They’ve believed that Powell and his colleagues would take the inflationary threat seriously. Markets now expect a speed-up in the pace of tapering in December and as much as three interest rates hikes in 2022 (there are even investors who bet on seven hikes by the end of the next year!). However, there is a silver lining here. With the unemployment rate at 4.2%, the potential for further improvement is rather limited. And when a new upward trend begins, we will have rising unemployment rate and high inflation at the same time. Such conditions create stagflation, which would take gold higher. This is still a song of the future, though. Let’s focus on the recent past: gold prices increased slightly on Friday (December 3, 2021). Although the London P.M. Fix hardly changed (see the chart below), the New York price rebounded to about $1,783 on Friday from $1,769 the day before. However, it doesn’t change the fact that gold remains stuck in a sideways trend below $1,800, as concerns about inflation exist along with expectations of a more aggressive Fed tightening cycle. Luckily for gold, despite its hawkish rhetoric, the US central bank will remain behind the inflation curve. The cautious, dovish policy is simply too tempting, as hitting the brakes too hard could trigger a financial crisis and a recession. With the CPI annual rate above 6%, the Fed should have already hiked the federal funds rate instead of waiting until Q2 2022. And even with three 25-basis point hikes, real interest rates will remain deeply in negative territory, which should be supportive of gold prices. If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
The stock market switches to a new idea

The stock market switches to a new idea

Alex Kuptsikevich Alex Kuptsikevich 07.12.2021 16:20
About 13 months ago, in early November 2020, we saw a shift in the previous months’ investment idea thanks to Biden’s presidential election victory and the emergence of effective and affordable vaccines. Then we saw a investors’ shift from so-called “work from home” companies to the broader market and a strong recovery in energy and financial sector stocks. But the technology sector, which had initially stalled, did not find itself on the margins of the markets either. The trade wore off early this November, and the leading sectors retreated from their peaks. Initially, news of the new omicron strain scared the markets. Still, in recent days some of the fear has dissipated, and there are hopes that the new variant is acting as a light at the end of the tunnel, offering hope that the mutation of the virus has made it less deadly, though many times more infectious. Most importantly, existing vaccines mainly protect people, if not from the disease, then from the severe course of the disease. If the first observations are confirmed, this could prove to be a welcome sigh of relief for the tourism industry, as it dramatically reduces fears of stricter lockdowns. As early as next spring, the coronavirus will not restrict people’s travel and leisure activities in the most optimistic scenario. If so, the following investment idea for the markets could be airline and tourism stocks, which have been at annual lows recently, as the surge of optimism from November last year to March this year quickly deflated. In addition, the markets could finally switch from outperforming growth stocks to value stocks due to the monetary policy reversal in response to inflation. Growth equities have been pulling the market up in all recent years when the Fed has been in a position to stimulate inflation rather than suppress it. Investors favour stocks of companies with a sustainable business model and regular dividends during such periods. These could be the Consumer Staples and Utilities. These sectors lagged last year, adding 2% and 7%, respectively. Possibly, the ‘switch’ we suggest will not be harmful to the Financial sector, which is benefiting from increased lending and rising interest rates. In terms of indices, we see an increased chance that the Nasdaq/Dow ratio, which repeated the highs of the 2000 peak at 0.47, will correct in the coming months. We are not saying that the ratio will return to 0.11, meaning it will lose ¾ of its current values. More sensible at the moment is to expect this ratio to correct to 0.30 in 2022-2023, assuming a 35% fall in the Nasdaq with the Dow Jones unchanged.
New Year Resolutions: what to watch in 2022? | MarketTalk: What’s up today? | Swissquote

Fireworks to Go On?

Monica Kingsley Monica Kingsley 08.12.2021 16:01
S&P 500 sharply extended gains, and credit markets indicate some continuation even if by pure inertia. A trend in place, stays in place until reversed – and yesterday‘s upswing was sufficiently supported by the credit markets. The late day retreat in HYG is an obvious warning of a pause possibly coming next, but not of a reversal – the improvements in market breadth speak for themselves. So, I‘m looking for a lean day today, and I‘m keenly watching bonds and cyclicals such as financials for further short-term direction clues. While yesterday‘s upswing was driven by tech, the daily rise in yields and inflation expectations (however modest) was balanced out by still more yield curve compression. The risk-on turn in credit markets isn‘t over, and the key question is whether HYG can extend gains or at least go only sideways for a while. Today‘s key premarket news propelling risk assets up, was about Pfizer extolling its three-dose alleged efficiency against Omicron – even though the news was sold into shortly thereafter, it has the power to buy more time and provide fuel for stocks and commodities. The copper weakness remains the only watchout in the short term, and silver sluggishness reflects lack of imminent inflation fears. As if the current prices accurately reflected above ground stockpiles and yearly mining output minus consumption. It‘s the same story in the red metal, by the way. Patience in the precious metals – it‘s about Fed either relenting, or placing inordinate amount of stress on the real economy, which would take time. Spring 2022 most probably would bring greater PMs gains than 2021 with its fits and starts – aka when inflation starts to bite the mainstream narratives and stocks, some more. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 gapped higher, and is once again approaching ATHs. Hold your horses though for it would take some time to get there. I would prefer to see broader participation within value, which isn‘t totally there at the moment. It‘s improving, but still. Credit Markets HYG upswing was considerably sold into, and that spells some consolidation ahead. The degree to which it spills over into stocks, remains to be seen. Gold, Silver and Miners Precious metals are still looking stable, and ever so slowly improving after the Fed hawkish turn hit. The central bank and real yields projections hold the key, but the countdown to higher prices is firmly on. Crude Oil Crude oil upswing indeed continued, and black gold looks set to consolidate gains unless value stocks spring some more to life later today. Anyway, the medium-term chart remains bullish. Copper Copper is another reason why I‘m not overly bullish for today – the red metal‘s base building looks to need a bit more time to play out. Bitcoin and Ethereum Bitcoin and Ethereum are still base building, and looking vulnerable. While a downswing isn‘t guaranteed, it can come and turn out to be sharp. Summary S&P 500 is likely to consolidate recent strong gain, not accelerating the surge today. The bulls within risk-on assets look to be slowly gaining the upper hand, and the opening part of today‘s analysis describes it‘s not a one-way street to fresh highs as the Fed has turned from a tailwind to a headwind. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Bitcoin’s dominance went below 40%: crypto winter or maturity?

Bitcoin’s dominance went below 40%: crypto winter or maturity?

Alex Kuptsikevich Alex Kuptsikevich 09.12.2021 08:46
The cryptocurrency market capitalisation rose slightly, by 0.4%, to 2.36 trillion in the past 24 hours. The cryptocurrency Fear & Greed Index added another 1 point overnight to 29, a significant retreat from the December 6 lows of 16 points, but still in the fear zone. Binance Coin, XRP and Luna have added between 4% and 10% over the past 24 hours, leading the gains among the top altcoins. Growth has been held back by the negative dynamics of the first cryptocurrency, which is losing more than any other of the top-20 coins. The pressure intensified on exceeding the $50K level, pushing it down 1.7% in a day and 12% in seven days. As another result, bitcoin’s overall crypto market share fell below 40%. Approaching this mark in May was a manifestation of sharp profit-taking in Bitcoin after a dizzying rally. Any sustained period when the share of the first cryptocurrency fell below 40% was in January -March and April-June periods in 2018. After that, the BTC domination has recovered with altcoins’ deeper crash, called later the crypto winter. But there is another crucial point: Bitcoin’s peak share declines from cycle to cycle as more new players emerge. At the beginning of 2017, it was 87%, then in 2019, it is already less than 70%. Many other projects have appeared in place of XRP, which has lost its former strength, like a hydra with several new ones growing in an area of its severed head. That said, neither the mechanics (BTCUSD above its 200-day average and retreating from an oversold area on the daily charts) nor the sentiment in the stock markets are pessimistic, indicating that we see purely local momentum in Bitcoin. Ether continues to pivot around its 50-day moving average, sticking to local bullish momentum. As always, it should be stated that a sustained negative on Bitcoin has the power to affect the entire crypto market, but the smooth slide in price suggests that enthusiasts are looking for other ideas in the sector, but not a general flight out of it. Perhaps capital flowing from one cryptocurrency to another is the best scenario for the entire market. However, as Saturday showed, it is easy to scare the whole market with solid moves in BTCUSD.
What Happens After a Bullish Stampede?

What Happens After a Bullish Stampede?

Przemysław Radomski Przemysław Radomski 08.12.2021 15:14
  The bulls pumped up the market, but with fundamentals deteriorating and corporations largely responsible for the spike, regular investors will be left holding the bag. With investors betting on a Santa Clause rally despite the deteriorating fundamentals, the S&P 500 helped the GDXJ ETF (proxy for junior mining stocks) outperform on Dec. 7. However, with short-covering and corporate buybacks primarily responsible for the daily spike, another ‘Minsky Moment’ could be on the horizon. To explain, I wrote on Nov. 19: While European markets have largely ignored the recent coronavirus spikes, a sharp sell-off could be the spark that lights the S&P 500’s correction. To explain, the DAX 30 Index (Germany) and the CAC 40 Index (France) both closed slightly lower on Nov. 18. However, prior to Nov. 18, the DAX 30 had closed in the green for 13 of the last 15 trading days, and one-upping its European counterpart, the CAC 40 had closed in the green for 15 of the last 16 trading days. On top of that, the CAC 40 had an RSI (Relative Strength Index) north of 80, while the DAX 30 had an RSI north of 75. As a result, both indices are materially overbought at a time when Germany is implementing new restrictions. Thus, if a Minsky Moment strikes in Europe, don’t be surprised if the negativity cascades across the Atlantic. To that point, after volatility erupted on cue, the DAX 30 suffered an intraday peak-to-trough decline of 7.8%, the CAC 40 dropped by 7.3%, and the S&P 500 dropped by 5.2%. Please see below: However, with overzealous equity bulls back at it again on Dec. 7, the PMs benefited from the risk-on sentiment. However, with the fundamental problems still present, investors may have set themselves up for more disappointment. To explain, with hedge funds increasing their short bets a little too late, Goldman Sachs Prime Brokerage reported that last week, “US equities on the GS Prime book made up more than 85% of the global $ net selling (-1.4 SDs), driven by short sales and to a lesser extent long sales (9 to 1).”  In a nutshell: hedge funds increased their short bets at the worst possible time. Please see below: Thus, with the Dec. 7 rally driven mainly by a reversal of these positions, the profound short squeeze helped uplift the PMs. For example, Bank of America data shows that last week’s corporate buybacks were the highest weekly total since March. And by repurchasing nearly $3.4 billion of their own stock (focus on the first blue column from the left), their bids helped calm the S&P 500’s selling pressure. Please see below: What’s more, while Bank of America said that hedge funds and retail investors somewhat bought the dip last week (though, they’re still net-sellers over the last four weeks), corporations did much of the heavy lifting.  As a result, with retail investors running out of gas and hedge funds mainly closing out their shorts on Dec. 7, the S&P 500 should resume its correction. More importantly, though, mining stocks’ recent strength should wilt away as the drama unfolds.  Please see below: And now for the grand reveal: corporations' buyback blackout period begins on Dec. 10. And since they can't repurchase more shares until the New Year, the elephant in the room won't be able to support the S&P 500. Likewise, after hedge funds covered their shorts on Dec. 7, short-covering won't be able to support the S&P 500 either. As a result, mining stocks should suffer if the negativity resurfaces over the next few weeks. Please see below: To explain, the red line above tracks the hourly movement of the S&P 500, while the gold line above tracks the hourly movement of the GDXJ ETF. As you can see, the junior miners often follow in the S&P 500’s footsteps. And with the S&P 500 setting itself up for another drop, the GDXJ ETF likely won’t be far behind. To that point, with the headline Consumer Price Index (CPI) scheduled for release on Dec. 10 and the Fed’s next monetary policy meeting scheduled for Dec. 14/15, sources of volatility will arrive at a time when corporations are stuck on the sidelines.  For context, I wrote on Nov. 12: I’ve highlighted on several occasions how the Commodity Producer Price Index (PPI) often leads the following month’s headline CPI. And after the former increased by 2% month-over-month (MoM) on Nov. 9 – which is a material MoM increase – and by 22.2% YoY (a new 2021 high), it implies a headline CPI print of roughly 5.75% to 6.25% when the data is released on Dec. 10. Please see below: To explain, the green line above tracks the YoY percentage change in the commodity PPI, while the red line above tracks the YoY percentage change in the headline CPI. If you analyze the relationship, you can see that the pair have a close connection. In addition, after expectations for September were pulled forward to July, and then expectations for July were pulled forward to June, now, the probability of a Fed rate hike in May 2022 has reached ~69%. Please see below: Also noteworthy, St. Louis Fed President James Bullard said on Dec. 3 that “the danger now is that we get too much inflation.... It's time for the [Fed] to react at upcoming meetings.” He added: “the inflation numbers are high enough that I think [ending the taper by March] would really help us to create the optionality to do more if we had to, if inflation doesn't dissipate as expected in the next couple of months.” For context, Bullard reiterated that he expects two Fed rate hikes in 2022. The bottom line? While the bulls stampeded through Wall Street on Dec. 7, things aren’t as rosy as they appear. And while the PMs benefited from the renewed optimism, their tepid rallies are even more fragile. Moreover, with another inflation print on the horizon and the FOMC’s Dec. 15 decision including its Summary of Economic Projections, the hawkish revelations could rattle the financial markets. And with corporate buybacks starting their holiday vacation on Dec. 10, stock market investors are on their own to navigate what comes next. In conclusion, the PMs rallied on Dec. 7, as risk-on sentiment reigned supreme. However, with the S&P 500 rallying by more than 2% and WTI rallying by nearly 4%, the PMs’ daily upswings were relatively muted. As a result, precious metals investors sense that caution is warranted. And with their trepidation a sign of heightened anxiety, they likely realize that going long the PMs involves much more risk than reward. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Intraday Market Analysis – USD Continues To Soften

Intraday Market Analysis – USD Continues To Soften

John Benjamin John Benjamin 09.12.2021 10:14
USDCAD tests key support The Canadian dollar inched lower after the BOC left its interest rate unchanged as expected. The pair has met stiff selling pressure at the supply zone around 1.2850, a triple top on the daily chart. A drop below 1.2720 has forced out short-term buyers. 1.2580 is the next support and it sits on the 30-day moving average. A bearish breakout would deepen the correction to the psychological level of 1.2500. On the upside, the bulls will need to clear 1.2770 before they could have another attempt at the supply zone. USOIL rebounds from demand zone WTI crude bounces back on signs that the new virus strain has a limited impact on demand. Price action met strong buying interest near last August’s lows at 62.00, a major support from the daily chart to keep the uptrend intact. A bullish RSI divergence in this congestion area indicates a loss of momentum in the bearish drive. Then a rally above 69.30 forced the sellers to exit, opening the door for an extension towards 79.00. The initial surge has pushed the RSI into the overbought territory. 68.00 is an immediate support. GER 40 to test major resistance The Dax 40 recoups losses as fears of the omicron variant start to subside. Last October’s lows near 14900 have proven to be a solid support. The rally above 15520 stirred up volatility as the last sellers rushed to the exit. The bulls are pushing towards 15920, where the index took a nosedive in late November. A bullish breakout could attract more buying interest and turn market sentiment around. Meanwhile, an overbought RSI has caused a pullback, giving time for the bulls to accumulate. 15300 is the closest support.
Natural Gas looks oversold and has potential for some rebound

Natural Gas looks oversold and has potential for some rebound

Alex Kuptsikevich Alex Kuptsikevich 09.12.2021 14:37
The price of natural gas in the US had collapsed by almost half in just over two months and is back to July levels when the European energy crisis’ rally had started. Interestingly, gas prices have also remained under increased pressure during periods of rising oil, indicating more selling. The history of recent years suggests that sharp spikes act as the final stage of a rally, and then we see the price returning to the starting point of an upward momentum or even lower. In this long-term pattern, the price from the current $3.75 has the potential to move down to $2.50 or even back to the multi-year support levels near $2.00 during 2022. However, locally, a 45% drop from the peak in early October with a sharp acceleration late last month looks excessive and needs a correction. The prices on the New York Mercantile Exchange have barely broken through its 200 SMA and touched the oversold area on daily RSI charts. A stabilisation at those levels could start a corrective bounce. A new round of rising energy prices in Europe is also on the buyers’ side. Moreover, the cost of oil has added 15% to the lows of early December, contrasting with a 20% fall in gas. This divergence is rarely sustained unless caused by supply problems. Thus, short-term traders should take a closer look at natural gas, which is poised for a corrective bounce to $4.5-4.7, following its oversold trend of recent weeks.
Frontrunning CPI

Frontrunning CPI

Monica Kingsley Monica Kingsley 09.12.2021 15:50
S&P 500 rose as VIX retraced over half of its recent spike, but tech and value have a short-term tired look. Cyclicals turning down while utilities with staples barely budge in spite of a surge in yields? That looks really risk-off to me, and together with commodities and precious metals going nowhere, represents your usual setup before tomorrow‘s CPI announcement. So, count on some headwinds today.A reasonably hot inflation figure is expected tomorrow – inflation expectations have risen already yesterday. The fears are that a higher than what used to be called transitory figure, would cut into profit margins and send value lower. Even if inflation (which certainly hasn‘t peaked yet as I‘m on the record for having said already) isn‘t yet strong enough to sink stocks, the Fed‘s reaction to it is. The dynamic of tapering response messing up with the economy would take months to play out – so, the bumpy ride ahead can continue. If only the yield curve stopped from getting ever more inverted...Markets keep chugging along for the time being, and the warning signs to watch for talked in Monday‘s extensive analysis, aren‘t flashing red. While I would prefer to see more copper strength for confirmation (almost as much as no question marks creeping into the crypto land), this is what we have – and it indicates that the path higher won‘t be steep. Neither in stocks, commodities or precious metals – as I wrote yesterday:(…) The copper weakness remains the only watchout in the short term, and silver sluggishness reflects lack of imminent inflation fears. As if the current prices accurately reflected above ground stockpiles and yearly mining output minus consumption. It‘s the same story in the red metal, by the way.Patience in the precious metals – it‘s about Fed either relenting, or placing inordinate amount of stress on the real economy, which would take time. Spring 2022 most probably would bring greater PMs gains than 2021 with its fits and starts – aka when inflation starts to bite the mainstream narratives and stocks, some more.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 upswing looks ripe for a brief breather – the volume is drying up, and consolidation in the vicinity of ATHs shouldn‘t be unexpected.Credit MarketsHYG held up quite well on the day, but the stock market mood it translated into, was risk-off one as rising yields couldn‘t help cyclicals.Gold, Silver and MinersPrecious metals are still basing, positioned for the coming brief decline that has pretty good chances of being reversed right next. The countdown to higher prices and Fed mistake is firmly on, and the risks of being out of the market outweigh the patience now required.Crude OilCrude oil upswing is running into predictable headwinds, which I look to be resolved to the upside perhaps as early as tomorrow‘s regular session (I‘m not looking for CPI to send real assets down).CopperCopper is still quite lukewarm, and doesn‘t indicate a commodities surge right ahead. Some consolidation wouldn‘t be surprising now that half of the CRB Index downswing has been erased. Bitcoin and EthereumBitcoin and Ethereum keep looking vulnerable – the yesterday discussed downswing possibility looks to be progressing, unfortunately for the bulls.SummaryS&P 500 is still likely to consolidate recent strong gain, and at the same time not to tank on tomorrow‘s inflation data. The (almost classical, cynics might say) anticipation is playing out in commodities and precious metals today, but I‘m looking for the downside to be reversed tomorrow as the yields vs. inflation expectations duo hint at. Fed fears this early in the tapering cycle will likely look to be a blip on the screen in the topping process hindsight.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
VeChain price nears crucial support as VET prepares for 35% breakout

VeChain price nears crucial support as VET prepares for 35% breakout

FXStreet News FXStreet News 09.12.2021 15:54
VeChain price is close to retesting the $0.086 support level after failing to set higher highs. A potential increase in buying pressure around this area will likely propel VET by 35% to retest the $0.118 resistance barrier. A breakdown of the $0.079 support floor will create a lower low, invalidating the bullish thesis. VeChain price has remained in a lull despite many altcoins’ remarkable recovery. The altcoin’s attempt to push through and produce a higher high was foiled, resulting in a retracement to an immediate support level. This correction to support will likely provide the platform for a recovery that will propel VET to pre-crash levels. VeChain price vies for an uptrend VeChain price set up a swing high at $0.099 on December 5 and retraced below the immediate support level at $0.0086. While this dip was brief, the recovery that followed set up a lower high at $0.097. Since that point, VET has consolidated but is slowly trending lower, approaching the $0.086 support level. A retest of this barrier will create a triple tap setup. Sidelined buyers can enter long around this level and wait for the reversal of the downtrend and the start of a new uptrend. Investors should expect VeChain price to rally past the $0.099 swing high and reach for the $0.118 resistance level. This move will constitute a 35% move and help VET recover to pre-crash levels. Despite the bullish outlook for VET, market participants should, nevertheless, exercise caution around these levels. VET/USDT 4-hour chart If VET penetrates below the immediate support level at $0.086, however, it will indicate that the selling pressure is overwhelming the bullish momentum. If bears knock VeChain price back down to produce a lower low below the $0.079 platform, it will invalidate the bullish thesis. In this situation, VeChain price could retrace to or sweep below the $0.070 support barrier, where buyers could then still, nevertheless, come in and give the uptrend another shot.
All’s Well That Ends Well, But Gold Is Far From Finished

All’s Well That Ends Well, But Gold Is Far From Finished

Przemysław Radomski Przemysław Radomski 10.12.2021 13:51
  Fundamentals are as strong as ever, but gold has to go some way down before it can resume its uptrend. Think of Moria from The Lord of the Rings. While inflation has soared, the S&P 500 has soared, WTI has soared, and copper has soared, 2021 has been extremely unkind to the precious metals. Gold has declined by 6.25%, silver by 16.66% and the GDX ETF by 14.83% YTD – not to mention the GDXJ ETF (our short position), which is down by 24.91% (all as of the Dec. 9 close). Moreover, investors often assume that material underperformance provides them with buying opportunities. I mean, why not position for a reversion to the mean? However, the harsh truth is that bearish technicals predicted these drawdowns well in advance. And while 2021 has been rough, the charts signal more downside in 2022. To explain, while gold prices, silver prices, and mining stocks rallied hard in October, their price action was more of a trick than a treat. And with the trio becoming part of the bears’ Thanksgiving dinner in November, only Santa Clause can save them now. However, while the S&P 500 had uplifted sentiment, the GDX ETF closed the Dec. 9 session one cent below its Dec. 3 close and the senior miners gave back all of their early-week stock-market-induced gains. As a result, investors aren’t showing much faith in the GDX ETF’s medium-term prospects. Please see below: As further evidence, the GDX ETF’s 4-hour chart is also sending ominous signals. For example, after running into its declining resistance line (the red dashed line on the right side of the chart below), the senior miners’ momentum fizzled, and a sharp decline followed. For more context, I wrote the following on Dec. 7 and updated the analysis on Dec. 9: After verifying the breakdown below its rising support line, the GDX moved lower, just as I expected it to. Now it’s after a breakdown below its previous (November) lows, and it seems to be verifying that breakdown just as it verified the breakdown below the rising support line in late November. The black dashed line in the above chart shows the resistance provided by the previous lows. It wasn’t invalidated. At the same time, the GDX is well below its declining red resistance line, and even if it moves close to this line but then declines, it will not be viewed as something bullish. What happened yesterday (Wednesday) and on Tuesday is exactly what I put in bold. Gold miners moved to their declining red resistance lines and then they moved back down. As far as the November lows are concerned, while it might not be 100% clear based on the above chart, it is the case that the lowest daily close in November was $31.53, and yesterday, the GDX ETF closed the day at $31.49. As the daily closes are more important than the mid-session candlestick closes, I don’t view the breakdown below the November lows as invalidated. Showcasing similar weakness, the GDXJ ETF also reversed sharply after slightly breaking above its declining resistance line (the black dashed line on the right side of the chart below). The invalidation of the breakout served as a strong sell sign, and it’s no wonder that junior miners declined by almost 3% yesterday. Moreover, investors rejected the junior miners’ attempt to rally back above their November lows. As a result, whether big or small, the gold miners have struggled mightily. Please see below: To that point, with more negativity likely to commence in the coming weeks and months, I wrote on Dec. 2 that the selling pressure may persist until the GDXJ ETF reaches its September lows: One of the previous situations that’s similar to the current one is what we saw right before the mid-year top. I marked mid-year declines (from the start to the first more visible correction) in both charts: GDX and GDXJ with orange rectangles. If the history repeats itself, both proxies for mining stocks could move back to their previous 2021 lows before correcting. Please see below: Finally, while I’ve been warning for months that the GDXJ/GDX ratio was destined for devaluation, the ratio has fallen precipitously in 2021. Interestingly, the ratio is still moving lower, its RSI was previously overbought, and similar periods of excessive optimism have preceded major drawdowns (marked with the black vertical dashed lines below). For example, the ratio showcased a similar overbought reading in early 2020 – right before the S&P 500 plunged. On top of that, the ratio is still near its mid-to-late 2020 lows and its mid-2021 lows. As a result, the GDXJ ETF will likely underperform the GDX ETF over the next few months. It’s likely to underperform silver in the near term as well. Furthermore, a drop below 1 in the ratio isn’t beyond the realms of possibility. In fact, it’s actually quite likely – that’s what happened in 2020 as well, and that’s why I’m shorting the GDXJ ETF. For context, I believe that gold, silver, and the GDX ETF are all ripe for sharp re-ratings over the medium term. However, it’s my belief that the GDXJ ETF offers the best risk-reward ratio due to its propensity to materially underperform during bear markets. As a result, shorting junior miners remains the most prudent strategy, in my opinion. In conclusion, while the seasons have changed, gold, silver, and mining stocks’ downtrends have remained the same. With a cold winter likely to culminate with new lows, the precious metals should embark on a tumultuous journey over the medium term. However, as Shakespeare told us: all's well that ends well. And with gold, silver and mining stocks poised to soar in the years to come, the bulls should have the last laugh over the long term. In the meantime, patience is prudent, as sharp drawdowns will likely materialize before the precious metals resume their secular uptrends. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Catching More Than a Decent Bid

Catching More Than a Decent Bid

Monica Kingsley Monica Kingsley 10.12.2021 15:48
S&P 500 predictably relented, but the resilience of value provides a glimmer of hope. Quite a solid one as the HYG spurt to the downside didn‘t inspire a broader selloff, including in tech. Yesterday was your regular wait-and-see session of prepositioning to today‘s CPI data. This not exactly a leading indicator of inflation clearly hasn‘t peaked, and inflation around the world either. The difference between the U.S. with eurozone, and the rest of the world, is that many other central banks are already on a tightening path.I count on such a CPI reading that wouldn‘t cause a rush to the exit door and liquidation in fears of Fed going even more hawkish (in rhetoric, it must be said). My series of pre-CPI release tweets have worked out to the letter – and now, it‘s back to the inflation trades.I already told you in yesterday‘s report:(…) A reasonably hot inflation figure is expected tomorrow – inflation expectations have risen already yesterday. The fears are that a higher than what used to be called transitory figure, would cut into profit margins and send value lower. Even if inflation (which certainly hasn‘t peaked yet as I‘m on the record for having said already) isn‘t yet strong enough to sink stocks, the Fed‘s reaction to it is. The dynamic of tapering response messing up with the economy would take months to play out – so, the bumpy ride ahead can continue. If only the yield curve stopped from getting ever more inverted...Markets keep chugging along for the time being, and the warning signs to watch for talked in Monday‘s extensive analysis, aren‘t flashing red.The pieces of the stock market and commodities rally continuation are in place, and the same goes for precious metals reversing the prior cautious stance. Even cryptos are warming up to the data release.Looking further ahead in time to 2022, I can‘t understate the bright prospects of agrifoods (DBA) – and it‘s in no way just about the turmoil in fertilizer land.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 downswing looks ready to be reversed soon – in spite of the drying up volume which often accompanies bull markets. The daily indicators remain positioned favorably to the bulls.Credit MarketsHYG weakness looks somewhat overdone to me – the prior upswing is still getting the benefit of my doubt. The coming sessions just shouldn‘t bring a steep HYG decline in my view.Gold, Silver and MinersPrecious metals are still basing, and I‘m looking for the hesitation to be reversed to the upside. Just see the tough headwinds in comparing silver being almost at its Sep lows while gold is trading much higher. Once the inflation narratives get a renewed boost, silver would play catch up.Crude OilCrude oil upswing is running into predictable headwinds, but I‘m looking at the next attempt at $72 to succeed, and for $74 to be broken to the upside later on.CopperCopper is still lukewarm, and waiting for the broader commodity fires to reignite. The red metal isn‘t in an anticipatory, frontrunning mood – its prolonged consolidation means though it‘s prefectly prepared to rise decisively again.Bitcoin and EthereumBitcoin and Ethereum are finding buying interest, but the Ethereum underperformance has me still cautious after taking sizable ETH profits off the table yesterday.SummaryS&P 500 rally is likely to continue today, and the same goes for risk-on and real assets. The Fed evidently won‘t be forced into a more hawkish position in Dec, and the markets are starting to celebrate. Silently celebrate as it‘s not about fireworks, but a reasonable and well bid advance across the board. I hope you‘re likewise positioned!Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Another 4 Years of Gold’s Tricky Romance With Jay

Another 4 Years of Gold’s Tricky Romance With Jay

Arkadiusz Sieron Arkadiusz Sieron 10.12.2021 16:45
  “Do you love me?”, asked gold. “Of course, my dear”, replied Jay, but his thoughts were with others: asset purchases tapering and interest rate hikes. “It’s complicated” – this is how many people answer questions about their romantic lives. The relationship between gold and Jerome Powell is also not a clear one. As you know, in November, President Biden announced that he would reappoint Powell for the second term as the Fed Chair. It means that gold will have to live with Jerome under the same roof for another four years. To say that gold didn’t like it is to say nothing. The yellow metal snapped and left the cozy living room of $1,850, slamming the door loudly. In less literary expressions, its price plunged from above $1,860 on November 19 to $1,782 on November 24, 2021, as the chart below shows. The impulsive gold’s reaction to Powell’s renomination resulted from its failed dream about a love affair with Lael Brainard. She was considered a leading contender to replace Powell. The contender that would be more dovish and, thus, more supportive of gold prices. However, is a hawkish dove a hawk? Is Powell really a hawk? Even if more hawkish than Brainard, he still orchestrated an unprecedentedly accommodative monetary policy in response to the pandemic-related economic crisis. It was none other than Powell who started to cut interest rates in 2019, a year before the epidemic outbreak. It was he who implemented an inflation-averaging regime that allowed inflation to run above the target. Right now, it’s also Powell who claims that the current high inflation is transitory, although it’s clear for almost everyone else that it’s more persistent. I wouldn’t call Powell a hawk then. He is rather a dove in a hawk’s clothing. So, gold doesn’t have to suffer under Powell’s second term as the Fed Chair. Please take a look at the chart below, which shows gold’s performance in the period of 2017-2021. As you can see, the yellow metal gained about 34% during Powell’s first term as the chair of the Federal Reserve that started in February 2018 (or 40% since Trump’s November 2017 nomination of the Fed). Not bad! Actually, gold performed much better back then than under Yellen’s term as the Fed Chair. During her tenure, which took place in 2014-2018, the yellow metal was traded sideways, remaining generally in a corridor between $1,100-$1,300. I’m not saying that Yellen despised gold, while Powell loves it. My point is that gold’s performance during the tenures of Fed Chairs varies along with changes in the macroeconomic environment in which they act and the monetary stance they adopt. Gold suffered strongly until December 2015, when Yellen finally started hiking the federal funds rate. It then rebounded, only to struggle again in 2018 amid an aggressive tightening cycle. However, at the end of that year it started to rally due to a dovish shift within the Fed, and, of course, in a lagged response to unprecedented fiscal and monetary actions later in 2020. I have bad and good news here. The former is that the macroeconomic environment during Powell’s second term could be more inflationary, demanding more hawkish actions. The Fed has already started tapering of its quantitative easing, and bets are accumulating that it could start hiking interest rates somewhere around mid-2022. What’s more, the continuation of Powell’s leadership ensures more stability and provides markets with more certainty about what to expect from the Fed in the coming years. This is bad news for safe-haven assets such as gold. Last but not least, the composition of the FOMC is going to shift toward the hawkish side. This is because some strong doves, such as Daly and Evans, are out, while some notable hawks, such as George, Mester (and also Bullard), are among the voting members in 2022. Gold may, therefore, find itself under downward pressure next year, especially in its first half. On the other hand, the current FOMC expresses clearly dovish bias. With mammoth public debt and elevated asset prices, aggressive tightening would simply be very risky from a financial and political point of view. So, the Fed is likely to generally remain behind the curve. By the way, Biden not only reappointed Powell for the second term as Fed Chair, but he also appointed Brainard as Vice-Chair. We also can’t exclude that Biden agreed to Powell’s second term only if he conducts “appropriate” monetary policy. Democratic Senator Elizabeth Warren once called Powell “a dangerous man.” Well, in a way, it’s true, as powerful people can be dangerous. However, history shows that Powell doesn’t have to be a threat to gold. After all, he is not a hawk in the mold of Paul Volcker, but merely a hawkish dove, or a dove that will have to normalize the crisis monetary policy and curb inflation. In the upcoming months, gold may struggle amid prospects of more interest rates hikes and likely strengthened hawkish rhetoric from the Fed. However, precious metals investors often sell the rumor and buy the fact. So, when the US central bank finally delivers them, better times may come for the yellow metal, and gold and Jay could live happily ever after. The End. Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care.
TSLA Stock Price and Forecast: Why is Tesla is going to break below $1,000?

TSLA Stock Price and Forecast: Why is Tesla is going to break below $1,000?

FXStreet News FXStreet News 10.12.2021 16:09
Tesla stock underperforms strongly on Thursday as continued profit-taking strikes blow. Equity markets remain nervous as VIX inches up again on Thursday and indices lose ground. TSLA also feels pressure from more sales by CEO Elon Musk. Tesla (TSLA) shares lost a lot of ground on Thursday as investors cashed in recent gains ahead of the year end. TSLA has to be included in practically all indices, passive and active funds, and the temptation to book some strong profits ahead of the new year is just too tempting. Added to this is the strong retail investor base who will also be much more inclined to sell out before the holiday season, and the stock has been coming under heavy selling pressure. Call options have been a strong feature of the rise in Tesla this year, especially the last six months. Call option volumes have been steadily decreasing. Tesla (TSLA) stock chart, 15-minute As we can see from the chart above, December has not been kind to Tesla stock so far, and we see this continuing. Tesla (TSLA) stock news Added to profit-taking and Elon Musk selling stock was news yesterday that the National Highway Traffic Safety Administration (NHTSA) is scrutinizing a feature in some Tesla versions that allow users to play video games in the car. Obviously, this would be a distraction to the driver. We are assuming it is a passenger feature but nonetheless still distracting. Elon Musk sold another $963 million worth of Tesla this week, and Cathie Wood of ARK is still selling small amounts. Tesla (TSLA) stock forecast Somehow $1,000 is still holding in there as support, but surely today is the day when that will finally break. Then it is a pretty clear path in terms of support straight to $910. $1,000 is psychological, but it has been tested quite a few times and the more a level is tested the weaker it becomes. Tesla is putting in a series of lower highs and knocking on the door of $1,000 each time. So the bounce from $1,000 can be said to be weaker each time. We also have a falling Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) confirming the price action. Tesla (TSLA) stock chart, daily
Silver is moving up

Silver is moving up

Korbinian Koller Korbinian Koller 11.12.2021 10:45
So, what are the facts: Monthly chart, Silver in US-Dollar, probabilities: Silver in US-Dollar, monthly chart as of December 10th, 2021. In 2020, silver broke a multiyear sideways range and moved strongly up. It has now consolidated for over a year in a sideways range again. This is a bullish setup! As much as emotions might be weary, from a probability perspective, a general rule is that the longer a congestion is from a time perspective, the more significant will be the subsequent breakout from that range. Statistical probabilities are also clearly pointing to the upside rather than returning into the prior range. Not to forget, buying near the lows of such a range box guarantees the lowest entry risk and highest risk/reward-ratio play to be taken for the long side, even if emotions might tell you otherwise. 2021 silver trades performance: 2021 silver trades performance. Another fact is that one does not need to know when and if a breakout is happening to extract money from the markets consistently. The above chart is this year’s silver trades that we posted in real-time in our free Telegram channel. The systematic approach focuses on low-risk entry points with a risk reduction method through our quad exit strategy. Sideways markets provide an income-producing aspect of one’s trading, and a possible breakout of a range would give a significant bonus. An approach like this keeps emotions in check since one’s labor gets rewarded and allows for significantly higher rewards once ranges do break. Silver in US-Dollar, quarterly chart, silver is moving up: Silver in US-Dollar, quarterly chart as of December 10th, 2021. In short, while waiting is strenuous, and one might feel doubtful, from a probability perspective, silver is an even likelier success story now than it has been six months or a year ago. What should also not be underestimated is the fundamental situation of this wealth preservation play. The extensions of governments playing the inflation game to such length are like adding fuel to the silver play. Widespread problems that are the pillars to this insurance play have, if anything, increased. Consequently, supporting a good likelihood that silver prices go up. When? Well, that is hard to say since no one knows the future, but maybe this question gets proportionally in weight too much attention since insurance isn’t just bought for the next storm to come but in principle acquired to make one feel good and to protect one’s wealth long term. The quarterly chart above shows how silvers inherent volatility can sustain, in times of market turmoil, extended phases of extreme standard deviation levels. Price moves far away from the mean (red line). We are trading near the mean as of now, and the very right green line is a projection of a possible price move up.   S&P 500 in US-Dollar, quarterly chart, Quod erat demonstrandum: S&P 500 in US-Dollar, quarterly chart as of December 10th, 2021. Still, some doubt left? Have a look at the above S&P500 chart, representing the broad market. Does that look like a healthy chart? Baby boomers and general stock-market participants might be in for a rude awakening once they realize how little their fiat currency is still worth when they cash in those stock portfolio investments. Just compare your total living cost from 2020 with 2021. All positions from food to health insurance, from car gas to electricity bills. Calculate the percentage difference from those two numbers and add this percentage to the average acquisition cost of your physical silver, and you have the real value of your silver already now. How does homelessness double to a half million people per day sleeping roofless factor in? Does this chart represent great times when we face supply chain disruptions? Or is it all smoke and mirrors, and once the music stops, there will be countless chairs missing for everyone to sit down? Silver is moving up: The essential principle in play is that markets are counterintuitive. Meaning your feelings might have switched from enthusiasm to uncertainty, even frustration, but probability facts are in direct opposition to one’s feelings. This principle is the underlying reason why moves out of extended congestion zones can result in substantial moves. Once emotionally weak hands are washed out, these breakouts come from an emotional perspective surprising. Bears step aside and bulls chase prices. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can also subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting.
Bitcoin Weekly Forecast: BTC might dive below $40,000

Bitcoin Weekly Forecast: BTC might dive below $40,000

FXStreet News FXStreet News 10.12.2021 16:09
Bitcoin price has penetrated below the $53,000 support level and is currently exploring the $48,000 to $50,000 foothold. BTC needs to rise above $57,845 to flip bullish, failing could leave it open to retest $40,000. On-chain metrics are indicating a wide array of emotions, painting the indecisiveness of the crypto markets. Bitcoin price is currently hovering around a crucial barrier as bulls and bears hash it out. This fight for control shows indecision among the participants and is often formed before a volatile move. Short-term investors need to be cautious about the next move, therefore, so as not to be caught off guard. Bitcoin price at crossroads Bitcoin price has slipped below the $50,000 psychological level five times over the last six days. Although the first four times BTC recovered back above it, the December 9 crash produced a daily close below it. Price action for the next few days is crucial as it will determine or establish a directions bias. In some cases, Bitcoin price could consolidate before it violently explodes. While it is difficult to say in which direction BTC might head, let’s assume, it is a bullish move. In that case, Bitcoin price needs to produce a daily close above $57,845 to indicate that the bulls are back in control. Doing this will establish a higher high and eventually, a higher low, which will confirm the start of an uptrend. Even after flipping the $57,845 level, BTC needs to wade through a thick consolidation area up to $61,000. Beyond this level, the big crypto will then have to tackle the $65,509 hurdle and eventually the all-time high at $69,000. To trigger this scenario, BTC needs to consolidate or reverse the downtrend and produce a higher high above $57,845. BTC/USD 1-day chart Supporting this scenario is the daily active addresses chart, which shows that DAA is above the 30-day average of 944,000 and is currently at 1.11 million. This data reveals that despite the recent flash crashes, investors are still interacting with the bitcoin blockchain, suggesting that they are optimistic about BTC’s performance. BTC DAA chart Further implying that an uptrend is likely is the 365-day Market Value to Realized Value (MVRV) model, which has reset and is currently at 1%. This on-chain metric is used to determine the average profit/loss of investors that purchased BTC over the past year. There is a chance this index might dip into the negative territory, but there is also the possibility that long-term holders might start accumulating, kick-starting the uptrend. BTC 365-day MVRV chart Lastly, the stable coin supply reserve on all exchanges has hit a new all-time high of $21.3 billion as of December 9. This uptick seems to have picked up pace around November 25, indicating that investors could be preparing to buy the dip if we ever get one or using the stablecoins as collateral for their existing positions. BTC stablecoin supply reserve chart BTC bears are not far behind While the bullish scenario does not seem out of the realm of possibility, the breakdown of the $50,000 psychological level and $48,326 support level suggests that bears are in control. If buyers fail to rescue the pioneer crypto at these levels, there is a high chance the downtrend could deepen, knocking BTC down to $40,596, the next support floor. If this were to happen, the market makers will likely collect the liquidity resting below this area, allowing BTC to revisit the $30,000 levels again. In an extremely dire case, Bitcoin price could head below the July 20 swing low at $29,763 to collect the sell-stop liquidity. Supporting the bearish side of arguments is IntoTheBlock’s Global In/Out of the Money (GIOM) model, which shows that the next stable support level extends from $45,615 to $23,046. Here roughly 5 million addresses purchased 3.35 million BTC at an average price of $36,730. Even if BTC might head to $30,000 or lower, there is a high chance it might revisit $36,000. BTC GIOM Moreover, the large transaction volume worth $100,000 or more has also dried up from 12 million on November 16 to 5.4 million on December 6. This 55% reduction indicates large institutions or whales are uninterested in BTC at the current levels. BTC large transactions volume chart Investors need to be cautious, therefore, and observe how Bitcoin price reacts around the $50,000 psychological level. A consolidation followed by a pump to $57,845 will suggest that the bulls are trying to make a comeback. In which case, market participants need to wait for confirmation. If Bitcoin price continues to sell-off, then a revisit of $40,000 or lower seems plausible.
Gold Stays Sedentary Whilst Silver (a Steal!) Skids Senselessly

Gold Stays Sedentary Whilst Silver (a Steal!) Skids Senselessly

Mark Mead Baillie Mark Mead Baillie 13.12.2021 09:18
The Gold Update by Mark Mead Baillie --- 630th Edition --- Monte-Carlo --- 11 December 2021 (published each Saturday) --- www.deMeadville.com Without looking... Think quick! What is the price of Gold right now? (HINT: If you read last week's missive, you already know the answer). "Uhh gee, mmb... in the 1780s?" Spot-on there, Squire, for the simplest reason that the price of Gold is always in the 1780s. Don't believe it? Feel free to verify the following, (you cannot make this stuff up): 'Twas in the 1780s ten years ago; 'twas in the 1780s ten months ago; 'twas in the 1780s ten weeks ago; 'twas in the 1780s ten days ago; and 'tis today in the 1780s -- 1783 to be precise -- as portrayed in the above Gold Scoreboard. That is just 44% of Gold's Dollar-debased value of 4015, even as honestly-adjusted for the increase in the supply of Gold itself. No kiddin'. Indeed should Gold have just died, an epitaph of solely "1780" is perfectly apt. "Charles, is this Gold's gravestone?" ... "That, my dear Dysphasia, is a rhetorical question." For just as the price of Gold was relatively "fixed" post-Issac Newton in the $18-to-$20 range, then again relatively "fixed" post-Bretton Woods in the $34-to-$35 range -- until 1971 upon Richard Nixon nixing such Gold Standard -- today we might say Gold is relatively "fixed" in the 1780s by "The M Word" crowd. Indeed, the "manipulation" motif is gaining more and more mainstream mention of late, the market depth of bids and offers rotating marvelously around 1780 as a centerpiece price. And it never being wrong, the market is what 'tis today: 1780. But broad buying sway can this allay: for Gold remains extraordinarily under-owned, an understatement at that. 'Course, the day to sell your Gold is the day everybody wants it, even at a five-figure price. But for now, why own a dense, ductile lump of rather incongruous rock when with a mere tap of the mouse one benefits many times over from an increasing array of shiny objects permeating the markets, be they earningless stocks or cryptocrap or even non-fungible tokens? Certainly they make one and all cocksure and feeling fine! (Until suddenly the objects vanish, but we're not supposed to say that). And how about Sister Silver of late? Hardly does she feel very great. Whilst Gold has been ad nausea sedentary in forever wallowing 'round the 1780s, and more accurately being -3.0% month-over-month, Silver senselessly has skidded -10.9%! Quite obviously, Silver has not been adorned in her precious metals pinstripes. So it must instead be that she is sporting her industrial metal jacket, right? For Cousin Copper clearly must be going over the cliff. But no, 'tisn't. Rather for the same stint, Copper is off but a mere -0.5%. What To Figure, eh? Last week we wrote of market dislocation: Silver has become so dislocated as to have been left naked! Here are the percentage tracks of our BEGOS Markets' metals triumvirate from one month ago-to-date (21 trading days): Further, guess what just crossed above 80x for its first occurrence since 29 September? Exactly right: the Gold/Silver ratio, which now is 80.3x. Its millennium-to-date average is 66.4x. Thus were Silver today (22.215) priced at the average, she'd in fact be +24.6% higher at 27.690. (Think means regression). Either way, by our math, Silver right now is a steal (!!!) So as Silver sinks even as Copper remains buoyant -- which makes no sense -- Gold sedentarily sits. In settling out the week yesterday at the aforementioned 1783, price on a points basis traced its narrowest week (since that ending on Valentine's Day 2020) in the last 22 months, and the narrowest week on a percentage basis since that ending nearly two years ago on 22 December 2019. So narrow was last week's trading range that it barely shows as the rightmost nub on the graphic of Gold's weekly bars from one year ago-to-date: Economically, the past week of incoming metrics were inflation-persistent. There was an upward revision to Q3's Unit Labor Costs along with a downward revision for the quarter's Productivity: that's Classic Stagflation, right there! Too, November's CPI remained stubbornly high with an +0.8% reading, (which for those of you scoring at home is an annualized pace of +9.6% ... are ya gettin' that with all the dough you've got sitting in the bank? Oh right, you put it all in the stock market). October's Trade Deficit backed off from that for September, whilst Consumer Credit eroded and Wholesale Inventories somewhat bloated. December's University of Michigan Sentiment Survey regained the 70 level, but remains below the COVID-era average of 77. Put it all together and the Economic Barometer lost of bit of tether: With further respect to rising everything ('cept the metals), Dow Jones Newswires during the week ran with "This Inflation Defies the Old Models. Neither supply or demand by itself is increasing prices; it’s an unusual combination of both." True enough: we've tons of money chasing not enough stuff, the cost of which to produce and supply is ever-increasing. This is what happens when the system is flooded with money. Everybody's loaded, so why the heck seek work? Especially given your shiny object investments see you retiring at 35. (Or as a French friend oft texts to us: "So gréat!") Meanwhile come 21 December (that's Tuesday a week), some 40% of StateSide obligations shan't be payable (per analysis from the Bipartisan Policy Center) given the debt ceiling then being reached. "Hey Shinzō, that you? Joe here. Hey listen: we may have to skip that next interest payment. My Janet who? Hello Shinzō? Hey! Are you still there, buddy?" Or something like that. Which leads us to three critical, succinct questions: â–  "Got Gold?" â–  "Got Silver?" â–  "Has the S&P crashed yet?" Just askin'. In fact speaking of the latter, our "live" S&P 500 price/earnings ratio is now 48.6x, (another of our honest calculations that the FinWorld elects not to perform). In fact, the "in" thing these days is to value a company -- should they not have earnings -- by revenues. (This is referred to as "Dumbing-down beyond stoopid"). For example, we read this past week that such valuation method is apparently touted for a shiny object called "Snowflake". Last year this object's top line was +$592M and its bottom line -$539M, a truly symmetrical snowflake swing of -$1.1B. Moreover, we read (courtesy of NASDAQ) that negative swings are to be again seen in '22, '23 and '24. And snowflakes do melt. (See 2000-2002). Just sayin'. 'Course to be fair, Gold's price as a function of valuation continues to melt. The U.S. money supply continues to rise, yet Gold's price remains hardly wise, (except in the guise to load up on this prize). To wit, our two-panel graphic featuring on the left Gold's daily bars from three months ago-to-date and on the right price's 10-Market Profile. The good news per the "Baby Blues" having just ceased their fall right at the -80% axis is that price's recent freeze in the 1780s may be the consolidative haunch from which to launch. And obviously, those incessant 1780s clearly dominate the Profile: Silver's like graphic shows both price and the "Baby Blues" (below left) clearly more skittish than Gold, whilst her Profile (below right) sees her singin' the blues. (But grab some Silver whilst you've nuthin' to lose!) Grab a glimpse too at The Gold Stack: The Gold StackGold's Value per Dollar Debasement, (from our opening "Scoreboard"): 4015Gold’s All-Time Intra-Day High: 2089 (07 August 2020)Gold’s All-Time Closing High: 2075 (06 August 2020)2021's High: 1963 (06 January)The Gateway to 2000: 1900+The 300-Day Moving Average: 1815 and fallingThe Final Frontier: 1800-1900The Northern Front: 1800-1750Trading Resistance: 1785 / 179510-Session “volume-weighted” average price magnet: 1783Gold Currently: 1783, (expected daily trading range ["EDTR"]: 22 points)Trading Support: 1777 / 177310-Session directional range: down to 1762 (from 1811) = -49 points or -2.7%On Maneuvers: 1750-1579The Weekly Parabolic Price to flip Short: 17282021's Low: 1673 (08 March) The Floor: 1579-1466Le Sous-sol: Sub-1466The Support Shelf: 1454-1434Base Camp: 1377The 1360s Double-Top: 1369 in Apr '18 preceded by 1362 in Sep '17Neverland: The Whiny 1290sThe Box: 1280-1240 And then there's next week. 15 metrics are scheduled for the Econ Baro. And the mid-week cherry? A policy statement from the Federal Open Market Committee. "Oh no, not again!" Kinda like those radio hits: good or bad, they just keep on comin'! So c'mon and get yourself some Gold, and don't forget the Silver too! Cheers! ...m... www.deMeadville.com www.TheGoldUpdate.com
FOMC meeting and Christmas will take crypto off pause

FOMC meeting and Christmas will take crypto off pause

Alex Kuptsikevich Alex Kuptsikevich 13.12.2021 09:36
Cryptocurrencies avoided strong moves over the weekend. Bitcoin failed to significantly move away from its 200-day moving average and Ether from the $4000, leaving short-term traders in limbo. The capitalisation of all cryptocurrencies has barely changed in the past 24 hours, remaining at 2.26 trillion. The cryptocurrency Fear and Greed Index is gradually recovering, rising to 28 (fear) against a low of 16 on Saturday morning. But as we can see, the state of extreme fear has not pushed key coins over the red lines. Bitcoin saw demand last week on intraday declines below $48K. Buyers support prevented it from getting below a critical technical level. But we are alarmed that the bulls managed to push the rate only slightly higher. If the bulls surrender this defensive line, a mighty avalanche of liquidation of marginal long positions is likely. If that happens, we expect volatility to spike to a magnitude similar to what we saw on the first Saturday in December and earlier in September and May. ETHUSD is hovering around $4000, and bounces from that level are getting lower in December. So far, Ether has withstood the sellers' onslaught, defending the round level and the September highs area. However, a fifth consecutive week of declines is lousy publicity for cryptocurrencies. The key demand drivers are still speculative expectations of price growth rather than company performance as in shares. Investors in the two major cryptocurrency coins have paused to assess the situation. They are waiting for meaningful signals for a continued bullish trend or the start of a bear market. The markets seem to be lacking new drivers for a strong bullish rally in the major cryptos. This week, financial market attention will be focus on the Fed meeting, and cryptocurrencies could come off pause if the Central Bank's comments elicit an unequivocal market reaction. Investors should also note that Bitcoin often makes strong moves around Christmas.
Omicron, USDJPY, Gold, DXY highlighted in this Luke Suddards' piece

Omicron, USDJPY, Gold, DXY highlighted in this Luke Suddards' piece

Luke Suddards Luke Suddards 10.12.2021 15:15
Pfizer and BioNTech released the results of their recent laboratory study which found that their vaccine’s antibody response is capable of neutralizing omicron (levels similar to 2 doses against previous strains) after three doses. There was a more than 25-fold reduction in the efficacy of the vaccine however, showing the 32 mutations in omicron does certainly have an impact. The vaccine induced T cells are not affected by omicron and should therefore still provide protection from severe symptoms. To finish off a Japanese study showed that omicron was 4.2 times more transmissible than delta in its early stage. We know that omicron was far more transmissible already so this isn’t a major shock, however, the issue with higher transmissibility is the opportunity for further new variants to arise which (hopefully) will not increase in lethality. Dollar Index (DXY): The greenback is basically flat from where it started the week as traders remain hesitant to push price in a new direction until today’s CPI result is out the way. Omicron news as mentioned above has been on the positive side so risk-off flows derived from that side of things has been non-existent. However, where we could see more safe haven bids for the dollar is from any escalation in the Russia Ukraine tensions, with an invasion very likely seeing risk-off ensconcing markets. This would clearly benefit the dollar on the lhs of the smile (risk-off). Data wise, job numbers filled the rather quiet calendar throughout the week with vacancies reaching new records as well as jobless claims breaching the 200k mark, coming in at 184k. We also had bond auctions coming to the fore, beginning with the front end of the curve, 3-year auctions showed strong demand despite today’s inflation numbers; moving to the back end of the curve the 10-year also showed relatively robust demand. It was the 30-year bond which was very weak with yields spiking higher leading to fears over today’s inflation numbers being the main driver. Inflation numbers were smack bang in line with consensus at 6.8% YoY (highest since 1982) and 4.9% YoY for core. The initial market reaction saw the dollar softer as short term rates fell (clearly the market was positioned for 7%), but that initial dollar weakness is now being retraced as it's still a solid number (Fed won't change path) with prices increases broad based.  Next week the focus will be on the Fed meeting where the risks are definitely tilted towards the hawkish side for the dollar. (Source: TradingView - Past performance is not indicative of future performance.) The dollar is ever so slightly above its upper trend line and the 21-day EMA has provided good dynamic support. The RSI has bounced off the 55 support level too keeping the uptrend momentum in tact. There is some resistance at 96.5 to monitor and on the downside the 21-day EMA would be important to watch if price slides. EURUSD: The euro continues to tread water as it faces headwinds on multiple fronts. The week began with fairly positive ZEW sentiment reading with current conditions missing (expected with covid restrictions), but the main index reading more positive than expected. Olaf Scholz has now been inducted as Chancellor of Germany with the end of Merkel’s reign officially coming to an end. European gas has been soaring again as tensions between Russia and US led to reports than Biden could implement sanctions on Russia. Europe is highly exposed to the price of natural gas so this could be one to watch for sure. Next week sees a very important ECB meeting with a fresh set of economic projections out (I’ll be watching their inflation forecasts particularly) as well as insights into how they’ll navigate the completion of their PEPP programme and transition. I’ll be providing a preview next week.  (Source: TradingView - Past performance is not indicative of future performance.) EURUSD moves sideways with a slight tilt towards the downside capped by the overhead 21-day EMA. 1.135 resistance has formed as the one to watch. The price support at 1.125 should be on your radar too. The RSI has rolled over a touch and pointing lower. The former low around the lower trend line at 1.12 could be very important over the next week. GBPUSD: Sterling has been under pressure as multiple factors line up against it. The week began with centrist Ben Broadbent’s speech which didn’t drop any hints on what the BoE may do at their December meeting. UK GDP data was disappointing with missed expectations on a monthly time frame as well as YoY and 3-month average. Plan B restrictions have now been implemented - guidance to work from home from Monday, and an extension of face masks to most public indoor venues (public transport etc). Mandatory Covid-19 passes will now be needed for entry to places such as nightclubs and venues with large crowds. With Plan B restrictions and softer GDP data, markets are all but certain a BoE hike will not happen at next week’s meeting, opting to rather wait until February for a move. I’ll be providing a preview for this event, but we shouldn’t be getting any curve balls as expectations are widely baked in for no hike, leading to very muted reactions in GBP crosses if any. UK opinion polls have moved against Boris Johnson after the uproar caused by allegations of his rule breaking Christmas party. Labour is now ahead in a variety of polls, which hasn’t occurred for a long time. If the fallout continues the Conservative MPs may decide to trigger a vote of no confidence in him which may inject some political instability. Article 16 could be used as a deflection and distraction tactic to turn the spotlight away from himself. (Source: TradingView - Past performance is not indicative of future performance.) GBPUSD looks technically weak as it trades below the lower trend line of its descending channel. The RSI hovers just above oversold. 1.315 on the downside would be key for a move lower while 1.32.5 - 1.33 on the upside just below the 21-day EMA would be key. USDJPY: The yen continues to come under pressure as the US 10-year yield moves higher and risk sentiment leans on the positive side, reducing the need for risk-off hedges. Tensions over Russian invading Ukraine will need to be monitored though as this could see flows directed towards the yen. (Source: TradingView - Past performance is not indicative of future performance.) USDJPY continues to be bid around its 38.2% Fibonacci level and mini range support around 113.5. The 50-day SMA and 21-day EMA are bunched up right together on the price candles. The RSI edges above the 46 level of support. Targets wise, on the upside 114-114.5 will remain key while on the downside 112.5 will be important to watch. Gold: Omicron variant positive news flow is taking the allure away from gold for safe haven flows, however, rising tensions between the US and Russia is helping to offset that. Real yields have also been rising higher of late which will pressure gold as well as a stronger dollar. Gold is a tad stronger on the inflation release as traders had most likely positioned for a 7% print and this not being the case has led to some bids flowing through.  (Source: TradingView - Past performance is not indicative of future performance.) Gold remains trapped in a tight range with today's inflation data a potential catalyst for a more directional move. Price is now just above the $1775 support level. The RSI has turned back upwards, but remains in no-man's land. The important level on the upside will be $1800 just above all the key moving averages. Oil: Oil certainly saw some new hot money coming back in to drive the recent recovery up from the $68 support area. Beginning the week we saw Saudi Arabia decided to hike their selling price to Asia and the US, indicating that they believe demand will remain robust despite omicron restriction fears. So far omicron news has been positive enough not to lead to expectations of serious demand destruction. Plan B work from home guidance has probably led to some slight weakness in crude, but we’ll need to watch what airlines decided to do in the next few weeks for jet fuel demand. Official US inventory data showed a modest reduction in inventory levels, but nothing to get excited about. Iranian talks are continuing ahead with nothing of anything major to report back on (Source: TradingView - Past performance is not indicative of future performance.) Oil now between its 200-day SMA and the 21-day EMA, is looking for its next direction. Support comes in around $73.50 with the 200-dauy SMA just below there. On the upside $76 provides resistance aided by the 21-day EMA. The RSI, has turned upwards and will need to continue in that direction for bulls to be satisfied.
On a Knife-Edge

On a Knife-Edge

Monica Kingsley Monica Kingsley 13.12.2021 15:04
S&P 500 recaptured 4,700s on little change in market breadth and ever so slowly coming back to life HYG. Credit markets made a risk-on move, but HYG isn‘t leading the charge on a medium-term basis in the least – it‘s improving, but the stiff headwinds in bonds are being felt. Given the CPI discussed at length on Friday, it‘s still a relative success. Make no mistake though, time is running short in this topping process, and trouble is going to strike earliest after the winter Olympics. Global economic activity might be peaking here, and liquidity around the world is shrinking already – copper isn‘t too fond of that. The Fed might attempt to double the monthly pace of tapering to $30bn next, but I doubt how far they would be able to get at such a pace. Inflation and contraction in economic growth are going to be midterms‘ hot potatoes, and monetary policy change might be attempted. Tough choices for the Fed missed the boat in tapering by more than a few months. 2022 is going to be tough as we‘ll see more tapering, market-forced rate hikes (perhaps as many as 2-3 – how much closer would yield curve control get then?), higher taxes and higher oil prices. Stocks are still likely to deliver more gains in spite of all the negative divergences to bonds or other indices (hello, Russell 2000). Copper would be my indicator as to how far further we have to go before GDP growth around the world peaks. Oil is ready for strong medium-term gains, and I‘m not looking for precious metals to yield much ground. Silver though is more vulnerable unless inflation returns to the spotlight. Cryptos do likewise have issues extending gains sharply. All in all, volatility is making a return, and it isn‘t a good news for the bulls. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 advance continues, and I‘m looking for ATHs to give in. It will take a while, but the balancing on a tightrope act continues. Credit Markets HYG strength didn‘t convince, but it didn‘t disappoint either – the constellation remains conducive to further stock market gains. So far and still conducive. Gold, Silver and Miners Precious metals are stronger than miners, and the lackluster, sideways performance is likely to continue for now – fresh Fed policy mistake is awaited, and it‘s actually bullish that gold and silver aren‘t facing more trouble when the consensus expectation is faster taper. Crude Oil Crude oil upswing is still struggligh at $72, and remains favored to go higher with passage of time as excess production capacity keeps shrinking while demand isn‘t being hit (no, the world isn‘t going the lockdowns route this time). Copper High time copper stopped hesitating, for its sideways trading is sending a signal about future GDP growth. The jury is still out in the red metal‘s long basing pattern – a battle of positive fundamentals against shrinking liquidity and possibly slowing growth. Bitcoin and Ethereum Bitcoin and Ethereum bottom searching goes on, and I suspect at least a test of Friday‘s lows is coming. I don‘t see too many signs of exuberance returning right away as Ethereum hasn‘t yet started to outperform. Summary S&P 500 bulls continue climbing a wall of worry even if credit markets don‘t confirm entirely. Risk-on and real assets rally is likely to continue, and the road would be getting bumpier over time. The Fed won‘t overcome market expectations, and the last week of Nov (first week of balance sheet contraction) pace wouldn‘t be consistently beaten without consequences down the road. Select commodities and precious metals are already feeling the pinch, but there is no sending them to bear markets. Get ready for the twin scourge of persistent inflation and slowdown in growth to start biting increasingly more. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Tesla (TSLA) Stock Price and Forecast: Will Tesla break $1,000

Tesla (TSLA) Stock Price and Forecast: Will Tesla break $1,000

FXStreet News FXStreet News 13.12.2021 16:09
Tesla (TSLA) just cannot break below key support at $1,000. Equity markets remain supportive with more all-time highs for the indices. Tesla (TSLA) is still seeing selling from CEO Elon Musk. Tesla shares are still holding above the key $1,000 level as we approach the final lap of the year. Tesla (TSLA) is up an impressive 44% so far this year in what has been the year of the mega tech names. Indeed Goldman Sachs notes this morning that five stocks account for more than half of the S&P's return since the end of April. Those names are all familiar big tech, Tesla, Microsoft, Alphabet, Nvidia, and Apple. This so-called narrowing of the returns or a lack of market breadth is often cited as a bearish factor. Goldman adds that the market cap of the top 10 stocks in the S&P make up 31% of the total S&P 500 market cap. That is the highest since 1980. While all this is beginning to sound increasingly alarmist fear not Goldman said. They estimate that this narrowing trend is set to continue and to stick with growth stocks into 2022. Tesla (TSLA) should see more benefits if that strategy is maintained, adding further to the large headache the stock gives value to investors. Price/earnings multiples are out the window with Tesla. It is pure momentum. Tesla (TSLA) chart, 15 minute Tesla (TSLA) stock news Not exactly stock specific but Elon Musk is Time magazine Person of the Year for 2021. Time CEO said, "Person of the Year is a marker of influence, and few individuals have had more influence than Musk on life on Earth, and potentially life off Earth too.".In relation to EV's the CEO added: "a market that Musk almost single-handedly created, seeing long before others the demand for clean-energy transportation that the world’s climate crisis would eventually propel." In other more specific news, Tesla has had to stop accepting orders for new Model S and Model x orders outside North America, according to electrek. Tesla is rumored to have a large backlog of orders. Demand obviously remains strong as more and more countries offer incentives for electric vehicle purchases. Tesla (TSLA) stock forecast We are still forecasting Tesla to return to the gap at $910 before year-end. $1,000 held again on Friday but the level is seeing increasing bombardment. The more a level is tested the weaker it becomes. We fear the next time it will go and that will signal a sharp move to $910. The stock is already well capped by the 9 and 21-day moving averages and only a break above $1063 will change our bearish stance. Tesla, daily chart
Cardano Price Prediction: ADA eyes 40% rise with on-chain metrics backing the claim

Cardano Price Prediction: ADA eyes 40% rise with on-chain metrics backing the claim

FXStreet News FXStreet News 13.12.2021 16:09
Cardano price is undergoing a retracement that will likely set the stage for a 38% run-up to $1.75. ADA needs to flip the $1.60 resistance barrier into support to reach its destination at $1.75. The transaction data and the recent uptick in average transaction size support the bullish thesis for the so-called “Ethereum killer. Cardano price has set up liquidity pools that are likely to be taken advantage of going forward. The most probable direction for ADA seems to be bullish, with on-chain metrics providing a tailwind to the claim. Cardano price to collect buy-stop liquidity Cardano price set up a double top at $1.75 on December 2 and retraced 32% to $1.13. A few days later, ADA created a double bottom at $1.13 and surged 18%. However, the recent upward correction will likely set the stage for the incoming bullishness to be sustained. A bounce off the $1.26 support level that sets up a new swing high above $1.47 will confirm the start of an uptrend. In this scenario, Cardano price will encounter the $1.60 resistance level. Flipping this barrier into a support floor will suggest that the buyers are taking control. This move will open the path for collecting the buy-stop liquidity resting above the $1.75 hurdle. In total, the climb would constitute a 38% gain. ADA/USDT 4-hour chart Supporting the bullish outlook for Cardano price is the recent uptick in the average transaction size from $23,877 to $83,704. This 250% spike in transfer size indicates that investors are interested in the price of ADA at the current levels and are actively pouring money into it. ADA average transaction size Moreover, IntoTheBlock’s Global In/Out of the Money (GIOM) model is another contributing factor to Cardano’s bullishness, and it shows that ADA will face little-to-no imminent resistance. Two significant clusters of underwater investors appear at $1.42 and $1.60. Here, roughly 381,000 and 441,000 addresses purchased nearly 4.32 billion and 5.25 billion ADA tokens, respectively. Therefore, an uptick in buying pressure that propels Cardano price into these clusters is likely to be met with selling momentum from holders trying to break even. Hence, ADA bulls need to clear these two levels to reach their destination at $1.75. ADA GIOM While things are looking good for Cardano price, there is a high chance ADA might retrace below $1.19 to collect liquidity. Investors can scoop the so-called “Ethereum killer” for a discount in this situation. However, if Cardano price produces a lower low below $1.12, it will invalidate the bullish thesis. In this case, ADA could slip down to retest the 1.02 support floor.
We Might Say Next FED Moves Are Not Obvious As Some Factors Differentiate Circumstances

Will Inflation Look Different in 2022?

Przemysław Radomski Przemysław Radomski 13.12.2021 17:04
One swallow doesn't make a summer, but when it comes to slower inflation pressure, there have been several. Will the narrative change soon? While Fed Chairman Jerome Powell had been preaching his “transitory” doctrine for months, the thesis was obliterated once again after the headline Consumer Price Index (CPI) surged by 6.8% year-over-year (YoY) on Dec. 10. Additionally, while the Commodity Producer Price Index (PPI) – which will be released on Dec. 14 – is likely provide a roadmap for inflation’s next move, signs of deceleration are already upon us.  For example, supply bottlenecks, port congestion, and rapidly rising commodity prices helped underwrite inflation’s ascent. However, with those factors now stagnant or reversing, inflationary pressures should decelerate in 2022. To explain, Deutsche Bank presented several charts that highlight 2021’s inflationary problems. However, whether it’s suppliers’ delivery times, backlogs of work, port congestion, bottleneck indices, or the cost of shipping and trucking, several inflationary indicators (excluding air cargo rates) have already peaked and rolled over.  Please see below: To that point, global manufacturing PMIs also signal a deceleration in input price pressures. With input prices leading output prices (like the headline CPI), the latter will likely showcase a similar slowdown if the former’s downtrend holds. Please see below: Source: IIF/Robin Brooks To explain, the colored lines above track the z-scores for prices paid within global manufacturing PMI reports. In a nutshell: regions were experiencing input inflation that was ~2 and ~4 standard deviations above their historical averages. However, if you analyze the right side of the chart, you can see that all of them have consolidated or come down (the U.S. is in light blue). As a result, it’s another sign that peak input inflation could elicit peak output inflation. As mentioned, though, the commodity PPI is the most important indicator and if the data comes in hot on Dec. 14, all bets are off. However, the monthly weakness should be present since the S&P Goldman Sachs Commodity Index (S&P GSCI) declined by 11.2% in November.   Also noteworthy, Morgan Stanley’s Chief U.S. Economist, Ellen Zentner, also sees signs of a deceleration. She wrote: “We are seeing nascent signs that pipeline inflation pressures are easing – based on evidence from company earnings transcripts, ISM comments, Korea trade data, China's inflation data, the Fed's Beige Book, a department huddle with our equity analysts, and our own survey.” To explain, the green, gold, and blue lines above track Morgan Stanley’s core inflation estimates for emerging markets, developed markets, and global markets. If the predictions prove prescient, the 2022 inflation narrative could look a lot different than in 2021. However, please remember that inflation doesn’t abate without direct action from the Fed, and with a hawkish Fed known to upend the PMs (at least in the short- or medium run), the fundamental environment has turned against them. For example, when the Fed turns hawkish, commodities retreat, and with U.S. President Joe Biden showcasing heightened anxiety over inflation, more of the same should materialize over the medium term. To explain, Morgan Stanley initially projected no rate hikes in 2022. Now, Zentner expects “2 hikes in 2022, followed by 3 hikes plus a halt in reinvestments in 2023.” She wrote: “Before investors close out the year, we need to get past the FOMC's final meeting next week, and it comes with every opportunity for surprise. On Wednesday, we expect the Fed to move to a hawkish stance by announcing that it is doubling the pace of taper, highlighting continued inflation risks and no longer labeling high inflation as transitory, and showing a hawkish shift in the dot plot. We think this shift will shake out in a 2-hike median in 2022, followed by 3.5 hikes in 2023 and 3 hikes in 2024.” Furthermore, upping the hawkish ante, Goldman Sachs initially projected no rate hikes in 2022. Then, the team moved to three rate hikes in 2022 (June, September, and December 2022). Now, Goldman Sachs expects the FOMC to hike rates in May, July, and November 2022 – with another four hikes per year in 2023 and 2024.   The Fed’s Time to Shine “The FOMC is very likely to double the pace of tapering to $30bn per month at its December meeting next week, putting it on track to announce the last two tapers at the January FOMC meeting and to implement the last taper in March,” wrote Chief Economist Jan Hatzius. “We expect the Summary of Economic Projections to show somewhat higher inflation and lower unemployment. Our best guess is that the dots will show 2 hikes in 2022, 3 in 2023, and 4 in 2024, for a total of 9 (vs. 0.5 / 3 / 3 and a total of 6.5 in September). We think the leadership will prefer to show only 2 hikes in 2022 for now to avoid making a more dramatic change in one step, especially at a meeting when the FOMC is already doubling the taper pace. But if Powell is comfortable showing 3 hikes next year, then we would expect others to join him in a decisive shift in the dots in that direction.” Speaking of three hikes, the market-implied probability of three FOMC rate hikes in 2022 has risen to 96%. Please see below: For context, I’ve been warning for months that surging inflation would force the Fed’s hand. I wrote on Oct. 26: Originally, the Fed forecasted that it wouldn’t have to taper its asset purchases until well into 2022. However, surging inflation pulled that forecast forward. Now, the Fed forecasts that it won’t have to raise interest rates until well into 2023. However, surging inflation will likely pull that forecast forward as well. More importantly, though, while the PMs have remained upbeat in recent weeks, the forthcoming liquidity drain will likely shift the narrative over the medium term. The bottom line? While inflation shows signs of peaking, there is a vast difference between peak inflation and the Fed’s 2% annual target. As a result, even if a 6.8% YoY headline CPI was the precipice, it’s nothing to celebrate. Thus, the Fed needs to tighten monetary policy to control inflation, and anything less will likely re-accelerate the cost-push inflationary spiral.  To that point, with the precious metals extremely allergic to a hawkish Fed, I’ve highlighted on numerous occasions how the GDXJ ETF suffered following the 2013 taper. With 2022 Fed policy looking even more hawkish than in mid-2014, the latter’s downtrend should have plenty of room to run. In conclusion, the PMs were mixed on Nov. 10, and the scorching inflation print was largely ignored by investors. However, with the Fed poised to provide another dose of reality on Dec. 15, the recent volatility should persist. To that point, it’s important to remember that the S&P 500’s volatility increased materially after the Fed tapered in 2013. With stock market drawdowns bullish for the USD Index and bearish for the PMs, there are plenty of technical, fundamental, and sentiment factors brewing that favor the theme of ‘USD Index up, PMs down’ over the medium term. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Intraday Market Analysis – USD In Brief Consolidation

Intraday Market Analysis – USD In Brief Consolidation

John Benjamin John Benjamin 14.12.2021 09:42
USDCHF looks for breakout The US dollar consolidates ahead of the Federal Reserve meeting. The pair is grinding for support above 0.9160 after it gave up most gains from the November rally. Overall sentiment remains positive as long as price action stays above the daily support at 0.9100. The current consolidation is a sign of accumulation from the long side. A close above the immediate resistance at 0.9270 would propel the greenback to the previous peak at 0.9360. On the downside, between 0.9160 and 0.9195 lies an important demand zone. US 30 to test previous peak The Dow Jones 30 inches lower as investors look ahead to Fed’s aggressive tapering. By lifting offers around the psychological level of 36000, a major resistance on the daily chart, the bulls may have turned sentiment around. As the index falls back in search of support, the RSI’s oversold situation may catch buyers’ attention. A break above 36350 may resume the uptrend. Otherwise, 35620 is the closest support where buyers could jump in for fear of missing out. Further down, 34800 would be a second line of defense. GER 40 seeks support The Dax 40 treads water as major central banks are set to update their policies. An initial surge above 15500 has prompted the bears to cover. Then the index found support at the 38.2% (15550) Fibonacci retracement level while an oversold RSI attracted buying interest. And that is a sign of underlying strength in the rebound. A bullish MA cross indicates an acceleration on the upside. A break above 15840 may send the price to the all-time high at 16300. In case of a deeper pullback, 15300 is a critical level to keep the rebound relevant.
Gold – Recovery ahead

Gold – Recovery ahead

Florian Grummes Florian Grummes 14.12.2021 13:26
https://www.midastouch-consulting.com/13122021-gold-recovery-ahead December 13th, 2021: The gold market is nearing the end of a difficult and very challenging year. Most precious metal investors must have been severely disappointed. Gold – Recovery ahead. Review 2021 started quite bullish, as the gold price climbed rapidly towards US$1,960 at the beginning of the year. In retrospect, however, this peak on January 6th also represented the high for the year! In the following 11.5 months, gold did not even come close to reaching these prices again. Instead, prices came under considerable pressure and only bottomed out at the beginning and then again at the end of March around US$1,680 with a double low. Interestingly, the low on March 8th at US$1,676 did hold until today. The subsequent recovery brought gold prices back above the round mark of US$1,900 within two months. But already on June 1st, another violent wave of selling started, which pushed gold prices down by US$150 within just four weeks. Subsequently, gold bulls attempted a major recovery in the seasonally favorable early summer phase. However, they failed three times in this endeavor at the strong resistance zone around US$1,830 to US$1,835. As a result, sufficient bearish pressure had built up again, which was then unleashed in the flash crash on August 9th with a brutal sell-off within a few minutes and a renewed test of the US$1,677 mark. Despite this complete washout, gold bulls were only able to recover from this shock with difficulty. Hence, gold traded sideways mainly between US$1,760 and US$1,815 for the following three months. It was not until the beginning of November that prices quickly broke out of this tenacious sideways phase and thus also broke above the 15-month downtrend-line. This was quickly followed by another rise towards US$1,877. However, and this is quite indicative of the ongoing corrective cycle since the all-time high in August 2020, gold prices made another hard U-turn within a few days and sold off even faster than they had risen before. Since this last sell-off from US$1,877 down to US$1,762, gold has been stuck and kind of paralyzed for three weeks, primarily trading in a narrow range between US$1,775 and US$1,785. Obviously, the market seems to be waiting for the upcoming FOMC meeting. Overall, gold has not been able to do much in 2021. Most of the time it has gone sideways and did everything to confuse participants. These treacherous market phases are the very most dangerous ones. Physical investors can easily sit through such a sideways shuffling. But leveraged traders had nothing to laugh about. Either the movements in gold changed quickly and abruptly or almost nothing happened for days and sometimes even weeks while the trading ranges were shrinking. Technical Analysis: Gold in US-Dollar Weekly Chart – Bottoming out around US$1,780? Gold in US-Dollars, weekly chart as of December 13th, 2021. Source: Tradingview Despite the 15-month correction, gold has been able to easily hold above the uptrend channel, which goes back to December 2015. The steeper uptrend channel that began in the summer of 2018 is also still intact and would only be broken if prices would fall below US$1,700. Support between US$1,760 and US$1,780 has held over the last three weeks too. The weekly stochastic oscillator is currently neutral but has been slowly tightening for months. Overall, gold is currently trading right in the middle of its two Bollinger bands on the weekly chart. Thus, the setup is neutral. However, bottoming out around US$1,780 has a slightly increased probability. Daily Chart – New buying signal Gold in US-Dollars, daily chart as of December 13th, 2021. Source: Tradingview On the daily chart, gold has been searching for support around its slightly rising 200-day moving average (US$1,793) over the last three weeks. However, eye contact has been maintained, hence a recapturing of this important moving average is still quite possible. Despite the failed breakout in November, the current price action has not moved away from the downtrend-line. A further attack on this resistance thus appears likely. Encouragingly, the daily stochastic has turned up from its oversold zone and provides a new buy signal. In summary, the chances of a renewed recovery starting in the near future predominate on the daily chart. In the first step, such a bounce could run to around US$1,815. Secondly, the bulls would then have to clear the downtrend-line, which would release further upward potential towards US$1,830 and US$1,870. The very best case scenario might see gold being able to rise to the psychological number of US$1,900 in the next two to four months. On the downside however, the support between US$1,760 and US$1,780 must be held at all costs. Otherwise, the threat of further downward pressure towards US$1,720 and US$1,680 intensifies. Commitments of Traders for Gold – Recovery ahead Commitments of Traders for Gold as of December 12th, 2021. Source: Sentimentrader The commercial net short position in the gold futures market was last reported at 245,623 contracts sold short. Although the setup has somewhat improved due to the significant price decline in recent weeks, the overall constellation continues to move in neutral waters. There is still no clear contrarian bottleneck in the futures market, where professional traders should have reduced their net short positions to below 100,000 contracts at least. Until then, it would still be a long way from current levels, which could probably only happen with a price drop towards US$1,625. As long as this does not happen, any larger move up will probably have a hard time. In summary, the CoT report provides a neutral signal and thus stands in the way of a sustainable new uptrend. However, given the current futures market data, temporary recoveries over a period of about one to three months are currently possible. Sentiment for Gold – Recovery ahead Sentiment Optix for Gold as of December 12th, 2021. Source: Sentimentrader Sentiment for gold has been meandering in the neutral and not very meaningful middle zone for more than a year. Furthermore, a complete capitulation or at least very high pessimism levels are still missing to end the ongoing correction. Such a high pessimism was last seen in spring of 2019, whereupon gold was able to rise more than US$800 from the lows at US$1,265 to US$2,075 within 15 months. This means that in the big picture, sentiment analysis continues to lack total capitulation. This can only be achieved with deeply fallen prices. In the short term, however, the Optix for gold has almost reached its lows for the year. At the same time, german mainstream press is currently asking, appropriately enough, “Why doesn’t gold protect against inflation? This gives us a short-term contrarian buy signal, which should enable a recovery rally over coming one to three months. Seasonality for Gold – Recovery ahead Seasonality for Gold over the last 53-years as of December 12th, 2021. Source: Sentimentrader As so often in recent years, precious metal investors are being put to the test in the fourth quarter of 2021. In the past, however, there was almost always a final sell-off around the last FOMC meeting between mid-November and mid-December. And this was always followed by an important low and a trend reversal. This year, everything points to December 15th or 16th. Following the FOMC interest rate decision and the FOMC press conference, the start of a recovery would be extremely typical. Statistically, gold prices usually finish the last two weeks of the year with higher prices, because trading volume in the west world is very low over the holidays, while in Asia, and especially in China and India, trading is more or less normal. Also, the “tax loss selling” in mining stocks should be over by now. Overall, the seasonal component turns “very bullish” in a few days, supporting precious metal prices from mid-December onwards. Typically, January in particular is a very positive month for gold, but the favorable seasonal period lasts until the end of February. Macro update and Crack-up-Boom: US-Inflation as of November 30th, 2021. ©Holger Zschaepitz Last Friday, inflation in the U.S. was reported to have risen to 6.8% for the month of November. This is the fastest price increase since 1982, when Ronald Reagan was US president, and the US stock markets had started a new bull market after a 16-year consolidation phase. Today, by contrast, the financial markets have been on the central banks’ drip for more than a decade, if not more than two. The dependence is enormous and a turn away from the money glut is unthinkable. Nevertheless, the vast majority of market participants still allow themselves to be bluffed by the Fed and the other central banks and blindly believe the fairy tales of these clowns. The Global US-Dollar Short Squeeze However, while inflation figures worldwide are going through the roof due to the gigantic expansion of the money supply and the supply bottlenecks, the US-Dollar continues to rise at the same time. A nasty US-Dollar short squeeze has been building up since early summer. The mechanism behind this is not easy to understand and gold bugs in particular often have a hard time with it. From a global perspective, the US-Dollar is still the most important reserve currency and thus also the most important international medium of exchange as well as the most important store of value for almost all major countries. Completely independently of this, many of these countries still use their own currency domestically. International oil trade and numerous other commodities are also invoiced and settled in US-Dollar. For example, when France buys oil from Saudi Arabia, it does not pay in its own currency, EUR, but in USD. Through this mechanism, there has been a solid demand for US-Dollar practically non-stop for decades. The US-Dollar system The big risk of this “US-Dollar system”, however, is that many foreign governments and companies borrow in US-Dollar, even though most of their revenue is generated in the respective national currency. The lenders of these US-Dollar are often not even US institutions. Foreign lenders also often lend to foreign borrowers in dollars. This creates a currency risk for the borrower, a mismatch between the currency of their income and the currency of their debt. Borrowers do this because they have to pay lower interest rates for a loan in US-Dollar than in their own national currency. Sometimes dollar-denominated bonds and loans are also the only way to get liquidity at all. Thus, it is not the lender who bears the currency risk, but the borrower. In this way, the borrower is basically taking a short position against the US-Dollar, whether he wants to or not. Now, if the dollar strengthens, this becomes a disadvantage for him, because his debt increases in relation to his income in the local currency. If, on the other hand, the US-Dollar weakens, the borrower is partially relieved of debt because his debt falls in relation to his income in the local currency. Turkish lira since December 2020 as of December 13th, 2021.©Holger Zschaepitz Looking, for example, at the dramatic fall of the Turkish lira, one can well imagine the escalating flight from emerging market currencies into the US-Dollar. Since the beginning of the year, Turks have lost almost 50% of their purchasing power against the US-Dollar. A true nightmare. Other emerging market currencies such as the Argentine peso, the Thai baht or even the Hungarian forint have also come under significant pressure this year. On top, the Evergrande bankruptcy and the collapse of the real estate bubble in China may also have contributed significantly to this smoldering wildfire. All in all, the “US-Dollar short squeeze” may well continue despite a technically heavily overbought situation. Sooner or later, however, the Federal Reserve will have to react and row back again. Otherwise, the strength of the US-Dollar will suddenly threaten a deflationary implosion in worldwide stock markets and in the entire financial system. The global house of cards would not survive such shock waves. The tapering is “nearish” It is therefore highly likely that the Fed will soon postpone the so-called “tapering” and the “interest rate hikes” until further notice. To explain this, they will surely come up with some gibberish with complicated-sounding words. All in all, an end to loose monetary policy is completely unthinkable. Likewise, the supply bottlenecks will remain for the time being. This means that inflation will continue to be fueled by both monetary and scarcity factors and, on top of that, by the psychological inflationary spiral. In these crazy times, investors in all sectors will have to patiently endure temporary volatility and the accompanying sharp pullbacks. Conclusion: Gold – Recovery ahead With gold and silver, you can protect yourself well against any scenario. In the medium and long term, however, this does not necessarily mean that precious metal prices will always track inflation one-to-one and go through the roof in the coming years. Most likely, the exponential expansion of the money supply will continue and accelerate. Hence, significantly higher gold and silver prices can then be expected. If, on the other hand, the system should implode, gold and silver will be able to play out their monetary function to the fullest and one will be glad to own them when almost everything else must be written down to zero. In the bigger picture, however, gold and silver fans will have to remain patient for the time being, because the clear end of the months-long correction has not yet been sealed. Rather, the most important cycle in the gold market should deliver an important low approximately every 8 years. The last time this happened was in December 2015 at US$1,045. This means that the correction in the gold market could continue over the next one or even two years until the trend reverses and the secular bull market finally continues. In the short term, however, the chances of a recovery in the coming weeks into the new year and possibly even into spring are quite good. But it should only gradually become clearer after the Fed’s interest rate decision on Wednesday what will happen next. A rally towards US$1,815 and US$1,830 has a clearly increased probability. Beyond that, US$1,870 and in the best case even US$1,910 could possibly be reached in February or March. For this to happen, however, the bulls would have to do a lot of work. Analysis initially written and published on on December 13th, 2021, by www.celticgold.eu. Translated into English and partially updated on December 13th, 2021. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter. By Florian Grummes|December 13th, 2021|Tags: Gold, Gold Analysis, Gold bullish, Gold Cot-Report, gold fundamentals, gold mining, Gold neutral, Silver, The bottom is in|0 Comments About the Author: Florian Grummes Florian Grummes is an independent financial analyst, advisor, consultant, trader & investor as well as an international speaker with more than 20 years of experience in financial markets. He is specialized in precious metals, cryptocurrencies and technical analysis. He is publishing weekly gold, silver & cryptocurrency analysis for his numerous international readers. He is also running a large telegram Channel and a Crypto Signal Service. Florian is well known for combining technical, fundamental and sentiment analysis into one accurate conclusion about the markets.
Chart of the Week - Global vs US Corporate Earnings

Chart of the Week - Global vs US Corporate Earnings

Callum Thomas Callum Thomas 14.12.2021 14:51
Global vs US Corporate Earnings: On the topic of US vs global equities, a key reason for the extended trend of US beating global equities has been the long-term cycles in relative strength of *earnings*.   The chart below shows that US earnings have outgrown global peers substantially over the past decade. Interestingly enough it follows a previous decade of global earnings outgrowing US earnings.   Basically this lens presents a glimpse of the fundamental trends underpinning the price trends that have been fairly extensively documented.   Thus one takeaway is that this long-term cycle in fundamentals will need to turn in order to reinforce any turn in price. But also of significance is value: I would argue that the superior profitability and earnings growth of US companies is already in the price - and then some. So there is some nuance to this puzzle…Key point: US corporate earnings have outgrown global peers over the past decade.       NOTE: this post first appeared on our NEW Substack: https://topdowncharts.substack.com/       Best regards, Callum Thomas Head of Research and Founder of Topdown Charts   Follow us on: LinkedIn https://www.linkedin.com/company/topdown-charts Twitter http://www.twitter.com/topdowncharts
Three ways to buy bitcoin

Three ways to buy bitcoin

Korbinian Koller Korbinian Koller 14.12.2021 13:15
With more than a trillion-dollar market cap, bitcoin is now in an echelon where regulation would be fearful to intervene harshly, since a bitcoin crash would affect other markets. In a way, the last pillar is cemented for there to be little risk to think of a world without bitcoin. That being said, even if only minor, some bitcoin exposure is now widely accepted as a wise decision of portfolio management. We share three ways of purchase that we find conservative. We aim to demystify the saga of bitcoins acquisition risk due to its volatility. BTC in US-Dollar, Quarterly Chart, zooming out, away from the noise: Bitcoin in US-Dollar, quarterly chart as of December 14th, 2021. Risk is related to size. Suppose you buy a small enough amount alongside your overall market exposure, small enough that you can afford assets even to go to zero, then the risk is minimized. Would it be nice to have picked up a few thousand bitcoins when it was available at five dollars or a few hundred at fifty, certainly! Nevertheless, thinking long term and with volatility now being much less, the more bitcoin had settled in and is more widely accepted, even buying here now at US$47,000 is just fine. What we find less attractive is not owning any. And after that initial purchase, to add at price dips in bitcoin to grow a position size over time would be a possible extension of such a strategy. The quarterly chart above shows how bitcoin has always reached new all-time highs again, and there is no fundamental or technical evidence that this behavior should change. BTC in US-Dollar, Weekly Chart, buy low and hold: Bitcoin in US-Dollar, weekly chart as of December 14th, 2021. Another way to participate in the bitcoin market if you already have some exposure is buying in tiny increments when markets seem low. This means buying after one of bitcoin’s steep declines and add this way to your long-term exposure. The weekly chart above shows with a green box an approximated entry zone. We used ABC pattern recognition, volume profile, Fibonacci retracements, action-reaction models, and inter-market relationships along with other tools to zoom into such a low-risk and high success probability zone. Once such a zone is established, we go a time frame lower. In this case, the daily time frame, to fine-tune entries. Therefore, it increases probabilities and reduce entry risk even further. BTC in US-Dollar, Daily Chart, low-risk entries with quad exit: Bitcoin in US-Dollar, daily chart as of December 14th, 2021. Our third option presented is a more active way in market participation. It is refined in its form to suit more experienced traders to soothe trading psychology. In addition, it keeps entry risk to a minimum and maximizes profits. We openly share the underlying principles in our free Telegram channel. Alongside, we post real-time entries and exits for educational purposes. This approach has a sophisticated exit strategy (quad exits). It allows for partial profit-taking and expansive position size building over time to maximize one’s bitcoin exposure without added risks. The daily chart above focuses on two supply zones (yellow horizontal lines). The zones got identified by volume profile analysis (green histogram to the right side of the chart). We want the price to build a double bottom price pattern at one of these levels to enter a long position. We have already retraced from recent all-time highs in a typical percentage fashion for bitcoins trading behavior. Consequently, a turning point here is highly likely. Three ways to buy bitcoin: Overwhelm often stems from a lack of choices. After reading this chart book, we hope that those readers who feel intimidated experience a sigh of relief. Like gold, bitcoin is a store of value. We find a good likelihood that bitcoin might surpass the ten trillion gold market cap. Consequently, your investment right now has a fair chance to grow by a factor of ten or more.  After acquiring bitcoin, you can store your purchase in a small cold wallet, the size of a USB stick. Tuck it away, just like you do your precious metal coins. Buying now for the long term is still stepping in front of most market players which have succumbed to their doubts and procrastination. Consequently, it allows for this investment to be early, anticipating a likely change of the future regarding payment methods and store of value vehicles. Therefore, an asset with significant growth potential (=attractive risk/reward-ratio). Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|December 14th, 2021|Tags: Bitcoin, Bitcoin bounce, Bitcoin bullish, bitcoin consolidation, crypto analysis, Crypto Bull, crypto chartbook, DeFi, low risk, quad exit, technical analysis, trading education|
Another Inflation Twist

Another Inflation Twist

Monica Kingsley Monica Kingsley 14.12.2021 15:45
S&P 500 gave up premarket gains, and closed on a weak note – driven by tech while value pared the intraday downswing somewhat. Market breadth still deteriorated, though – but credit markets didn‘t crater. Stocks look more cautious than bonds awaiting tomorrow‘s Fed, which is a good sign for the bulls across the paper and real assets. Sure, the ride is increasingly getting bumpy (and will get so even more over the coming weeks), but we haven‘t topped in spite of the negative shifts mentioned yesterday. The signs appear to be in place, pointing to a limited downside in the pre-FOMC positioning, but when the dust settles, more than a few markets are likely to shake off the Fed blues. I continue doubting the Fed would be able to keep delivering on its own hyped inflation fighting projections – be it in faster taper or rate raising. Crude oil is likewise just hanging in there and ready – the Fed must be aware of real economy‘s fragility, which is what Treasuries are in my view signalling with their relative serenity. We‘ve travelled a long journey from the Fed risk of letting inflation run unattented, to the Fed making a policy mistake in tightening the screws too much. For now, there‘s no evidence of the latter, of serious intentions to force that outcome. Lip service (intention to act and keep reassessing along the way) would paid to the inflation threat tomorrow, harsh words delivered, and the question is when would the markets see through that, and through the necessity to bring the punch bowl back a few short months down the road. As stated yesterday: (…) Global economic activity might be peaking here, and liquidity around the world is shrinking already – copper isn‘t too fond of that. The Fed might attempt to double the monthly pace of tapering to $30bn next, but I doubt how far they would be able to get at such a pace. Inflation and contraction in economic growth are going to be midterms‘ hot potatoes, and monetary policy change might be attempted. Tough choices for the Fed missed the boat in tapering by more than a few months. 2022 is going to be tough as we‘ll see more tapering, market-forced rate hikes (perhaps as many as 2-3 – how much closer would yield curve control get then?), higher taxes and higher oil prices. Stocks are still likely to deliver more gains in spite of all the negative divergences to bonds or other indices (hello, Russell 2000). Copper would be my indicator as to how far further we have to go before GDP growth around the world peaks. Oil is ready for strong medium-term gains, and I‘m not looking for precious metals to yield much ground. Silver though is more vulnerable unless inflation returns to the spotlight. Cryptos do likewise have issues extending gains sharply. All in all, volatility is making a return, and it isn‘t a good news for the bulls. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 ran into headwinds, and fresh ATHs will really take a while to happen, but we‘re likely to get there still. Credit Markets HYG didn‘t have a really bad day – just a cautious one. Interestingly, lower yields didn‘t help tech, and that means a sectoral rebalancing in favor of value is coming, and that the current bond market strength will be sold into. Gold, Silver and Miners Precious metals held up fine yesterday, but some weakness into tomorrow shouldn‘t be surprising. I look for it to turn out only temporary, and not as a start of a serious downswing. Crude Oil Crude oil continues struggling at $72, but the downside looks limited – I‘m not looking for a flush into the low or mid $60s. Copper In spite of the red candle(s), copper looks to be stopping hesitating, and is readying an upswing. I look for broader participation in it, and that includes commodities and silver. The run up to tomorrow‘s announcement would be telling. Bitcoin and Ethereum Bitcoin and Ethereum bottom searching goes on, yesterday‘s downside target was hit, and the bulls are meekly responding today. I don‘t think the bottom is in at $46K BTC or $3700s ETH. Summary Risk-off mood is prevailing in going for tomorrow‘s FOMC – the expectations seem leaning towards making a tapering / tightening mistake. While headwinds are stiffening, we haven‘t topped yet in stocks or commodities, but the road would be getting bumpier as stated yesterday. Select commodities and precious metals are already feeling the pinch late in today‘s premarket trading, but there is no sending them to bear markets. Get ready for the twin scourge of persistent inflation and slowdown in growth to start biting increasingly more – just-in producer price index (9.6% YoY, largest ever) confirms much more inflation is in the pipeline, and the Fed would still remain behind the curve in its actions. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
No Turnaround Tuesday for Equities?

No Turnaround Tuesday for Equities?

Marc Chandler Marc Chandler 14.12.2021 15:01
December 14, 2021  $USD, Canada, Chile, Currency Movement, EMU, Hungary, Japan, Mexico, UK Overview:  Activity in the capital markets is subdued today, ahead of tomorrow's FOMC meeting conclusion and the ECB meeting on Thursday.  The MSCI Asia Pacific equity index fell for the third consecutive session.  European bourses are heavy after the Stoxx 600 posted an outside down day yesterday. Today would be the fifth consecutive decline. Selling pressure on the US futures indices continues after yesterday's losses.  Australia and New Zealand bonds played catch-up to the large drop in US Treasury yields yesterday, while European benchmark yields are edging higher.  The 10-year US Treasury yield is around 1.43%.  The dollar is mixed against the major currencies.  The Canadian and Australian dollars and Norway are softer, while the Swiss franc and euro lead with around a 0.25%-0.35% gain.  Most emerging market currencies are little changed, though the Turkish lira is paring yesterday's intervention-fueled gains.  Led by the Hungarian forint ahead of the outcome of the central meeting, and helped by a firm euro, central European currencies lead the emerging markets.  The JP Morgan Emerging Market Currency Index is off for a second session after breaking a four-week slide last week.  Gold continues to consolidate and is within yesterday's range ($1782-$1791).  Oil is also trading quietly, with the January WTI contract in a $70.50-$72.00 range.  European (Dutch) natural gas is rising for the sixth session of the past seven, during which time it has increased by nearly a third.  US natgas has fallen by almost 30% in the past two weeks and is off for about 4.4% this week already.  Iron ore is paring yesterday's 6.5% gain, while copper is drifting lower and is extending its loss into the fourth consecutive session.   Asia Pacific Year-end pressures are evident in Japan's money markets, and the BOJ responded by arranging an unscheduled repo operation for the second consecutive session.  Yesterday's overnight operation was for JPY2 trillion (~$17.5 bln) after the repo rate rose to two-year highs.  The repo appeared to have been lifted by dealers securing funding for bill purchases.  Today the BOJ offered to buy JPY9 trillion of bonds under the repo agreement.   The US has offered to lift the steel and aluminum tariffs on Japan on similar terms as the deal struck with the EU.   A certain amount, based on some historical market share, can be shipped to the US duty-free, but over that threshold, a levy will be imposed.  Unlike the EU, Tokyo did not impose retaliatory tariffs.  Estimates suggest that Japan shipped around 5% of its steel to the US, though some might have made its way through Mexico.   The regional highlights for the week still lie ahead.  Tomorrow, China reports November retail sales, industrial production, new home prices, investment, and the surveyed jobless rate.  Retail sales are expected to have slowed, while industrial output may have firmed.  Investment in property and fixed assets may have stalled.  Japan has its tertiary index (October) tomorrow, a November trade balance on Thursday (it nearly always deteriorates from October), and the Friday BOJ meeting.  The BOJ is expected to extend some of its emergency facilities.  Australia reports its November jobs data first thing Thursday morning in Canberra.  After three months of job losses, a strong report is expected as social restrictions were lifted.   Today, the dollar is confined to about a quarter of a yen range above JPY113.50.  It has not traded above JPY114.00 this month so far.  Nor has it traded below JPY113.20 since last Monday.  An option for $760 mln at JPY1113.85 rolls off today.  The Australian dollar tested the session high near $0.7135 in the European morning but met a wall of sellers, perhaps, related to the nearly A$600 mln option at $0.7130 that expires today. It has traded down to a five-day low around $0.7090, which is the halfway point of last week's rally.  The next retracement (61.8%) is near $0.7065. The dollar continues to struggle to sustain upticks against the Chinese yuan. It is trading heavily today, its seventh loss in the past eight sessions.   Still, the greenback held above yesterday's low (~CNY6.3580).  It was unable to poke above CNY6.37.   The PBOC's dollar fixing was set at CNY6.3675, while the market (Bloomberg survey) anticipated CNY6.3666.   Europe The UK reported solid employment data.  The November claimant count rate eased to 4.9% from a revised 5.0% (initially 5.1%), representing a nearly 50k decline after the October decline was revised to 58.5k from -14.9k.  The pace of earnings growth slowed to 4.9% from 5.9% (three-month, year-over-year).  Employment rose by nearly 150k (three months) after a 247k increase previously.  Tomorrow, the UK sees November CPI and PPI.  Both are expected to have quickened from October.  Nevertheless, the BOE is now seen on hold until February.   Hungary's central bank is set to hike the base rate today.  A 40 bp increase would follow last month's 30 bp hike.  Today's move would be the sixth in a row.  The base rate began the year at 60 bp, and today's hike would lift it to 2.50%.  On Thursday, Hungary likely hiked the one-week deposit rate.  It has been hiked for the last four weeks.  It had been at 75 bp until June, when it was hiked by 15 bp.  It was lifted by 30 bp in July and again in August.  It reverted to 15 bp increases in September and October.  The one-week deposit rate was raised several times last month to 2.90%.  It is up another 40 bp so far this month, and it is expected to be lifted by another 20 bp this week.   In October, industrial output in the euro area rose 1.1% after a 0.2% decline in September.  The preliminary PMI will be reported on Thursday, ahead of the ECB meeting.  Activity likely slowed. The focus of the ECB meeting is on the guidance about bond-buying next year.  The emergency facility is expected to wind down at the end of Q1, but given that it will still be buying bonds, tapering may not be as necessary or pronounced as, say, with the Federal Reserve.  The ECB staff will also update forecasts, including a sharp upward revision to next year's while extending the projections to 2024.  There is also interest in what the ECB will do about its long-term loans (TLTRO).    The euro has firmed in the European morning but remains mired in a narrow range.  Indeed, the range over the past five sessions is a little less than a cent (~$1.1260-$1.1355). There is an option for nearly 500 mln euros at $1.1330 that expires today.  For the past month, the euro has been in a $1.12-$1.14 trading range, with the notable exception on November 24, when the low for the year was recorded (~$1.1185).   Sterling slipped below $1.32 in late Asian turnover but found bids lurking there, and Europe has extended its recovery toward $1.3235.  Resistance is seen in the $1.3260-$1.3275 area. Sterling has not traded above $1.33 since December 3, yet a move above there is necessary to lift the technical tone.   America The US reports November producer prices today.  The headline rate is expected to push above 9%, while the core rate pokes through 7%.  The market is understandably more sensitive to consumer prices than producer prices.  Tomorrow, ahead of the FOMC statement, the November retail sales (softer than the 1.7% headline increase in October) and the December Empire manufacturing survey will be released.   Although the Senate is expected to maneuver to lift the debt ceiling today, the Treasury is planning a large bill pay down (~$175 bln) to ensure it would have the space to settle the coupon auctions.  That said, the supply of bills is likely to improve through Q1 22, according to estimates.  By most accounts, the Treasury has overfunded itself, and this will allow it to cut back further on new supply, just as the Federal Reserve is expected to accelerate its tapering.   The Bank of Canada was told its inflation target remains 2% but that it can overshoot to support "maximum sustainable employment."  The central bank's language is important.  It said it would "continue" to support the labor market objective, suggesting that yesterday's adjustment to the mandate will have a minor operational impact.  In fact, with inflation (October CPI 4.7%, an 18-year high), Governor Macklem quickly indicated that this was not the situation when it could probe for the maximum sustainable employment.  Still, the new mandate requires that the central bank explain when it is using its new flexibility and how labor market outcomes are incorporated into monetary decisions.  Separately, Canada is proposing alternatives to the US proposed tax incentives for electric vehicles in the Build Back Better initiative.  Canada and Mexico claim that it violated the USMCA and throws a wrench in the 30-year auto integration.  The EU trade commissioner has also expressed concerns about whether the legislation would break the WTO rules too.   Late today, Chile's central bank is expected to deliver a 125 bp rate hike, the same as in October.  The overnight target rate began the year at 50 bp.  It was hiked by 25 bp in July and 75 bp in August.  With today's hike, it will stand at 4%.  More work is needed as November CPI was at 6.7%.  Chile holds the run-off presidential election this weekend.  In the first round last month, the conservative Kast drew 28% support while the left candidate Boris garnered 26%.  Chile's innovation during Covid was to allow people to withdraw funds from their pensions (yes, like a farmer eating their corn seed).  Three withdrawals were granted, but a fourth effort was rebuffed earlier this month.  The World Bank and the IMF expressed concern about the pension fund industry, which had been among the best in the region.  The Chilean peso is among the worst-performing emerging market currencies this year.  It has fallen nearly 15.5% and has only been "bested" by the Argentine peso (~17.3%) and the Turkish lira (-48%).   The Canadian dollar's retreat is being extended for the fifth consecutive session.  The greenback has largely held above CAD1.2800 and is drawing near the high seen after the employment reports on December 3 (~CAD1.2855).  We usually see the exchange rate is driven by 1) general risk appetite, 2) commodity prices, and 3) rate differential.  Here we note that Canada's 2-year premium has fallen from about 60 basis points at the start of last month to around 27 bp now.  Over the same time, the 10-year premium has wholly disappeared.  It was almost 20 bp on November 1 and currently is trading at a four basis point discount.  Meanwhile, the greenback is consolidating against the Mexican peso. For the fifth consecutive session, it has been mainly chopping in a MXN20.85-MXN21.08 range.   On Thursday, Banxico is expected to hike its overnight rate by 25 bp.  We continue to think it is more likely to hike by 50 bp than standpat.  Since June, it has lifted the target rate by 100 bp to 5%.   November CPI stood at 7.37%.     Disclaimer
GameStop Stock News and Forecast: Why did GME stock fall so much on Monday?

GameStop Stock News and Forecast: Why did GME stock fall so much on Monday?

FXStreet News FXStreet News 14.12.2021 16:01
GameStop stock fell nearly 14% on Monday to $136.88. Retail and meme stocks suffered quite sharp falls on Monday. AMC followed GME by falling to $23.24 for a 15% loss. The rise of the meme stock has been a unique feature of this investing year over any others with a special set of once-in-a-generation circumstances elevating many ordinary joes into stock trading stars. The first was GameStop (GME), which made possibly more headlines than any other stock in history. I confess to not doing a lot of research on this, but when you overhear numerous discussions in the local pub about the phenomenon, you know it must be serious. AMC then joined the party, and together the pair became the poster child stocks for the meme stock revolution. We even had the perfect pantomime villain in the Robinhood saga. Regardless, the retail investor is now a powerful force in the stock market, but that power has begun to wane as we approach the final finishing straight of the year. Now retail investors who got in early and held their nerve are being rewarded with yearly gains of 626% for GameStop (GME) and 996% for AMC. So any discussion of a collapse needs to be put into context. The fact does remain though that both stocks are actually well off their 2021 peaks. GameStop shed nearly 14% on Monday, closing at $136.88. There is a slight contradiction to the underlying trend with in-store attendance surely surging, definitely in my local store ahead of the holidays. GameStop (GME) chart, 15 minute GameStop (GME) stock news There was no underlying fundamental news. Rather a catalyst of market weakness and general risk aversion hurt this one. GME and AMC are both momentum names, and when that slows the results can be shocking. GameStop (GME) stock forecast The big catalyst was more technical in our view. In the absence of fundamental news flow, GameStop has been going through support levels like a knife through butter. $167 was a big level, marking the lows going back to September. Cracking below that level was the direct result of breaking the 200-day moving average. Monday saw a move to break $146, marking new six-month lows. GameStop now sits on the last key support before $118. GME shares closed at $136.88, though the volume-weighted average price for the year is $138. Below, the volume begins to strongly lighten, meaning less price discovery, meaning a likely move to $118. This amounts to a low volume fall. I know most readers do not like to hear bearish arguments, especially in some favourite name like GameStop and AMC, but we can only comment on the price action and trends we see. For now, bears are definitely in control. A break of $167 resistance would change the picture. GME 1-day chart
Bitcoin, Ethereum, Metaverse Tokens Sink After Holiday Crypto Rally

Crypto market clings to last line of defence

Alex Kuptsikevich Alex Kuptsikevich 15.12.2021 08:47
Bitcoin continues to cling to its 200-day simple moving average, calming the entire crypto market. In the past 24 hours, the total value of all cryptocurrencies rose 3.3% to $2.19 trillion. The Fear and Greed Index rose 7 points to 28, which it was a week ago. Bitcoin has stabilised near the $48K level, keeping almost equal chances for gains and declines. A meaningful move away from the 200-day moving average line in one direction or the other promises to kick-start a strong momentum. Today the financial markets are wary of the words of the Fed Chairman and the comments of the FOMC. Deviations from expectations can affect the whole financial world, including bitcoin. And through it, the entire spectrum of cryptocurrencies. Ether has been showing close to zero momentum since the start of the day, remaining at $3850. On the chart, it is easy to see the activation of the bears near the 50-day moving average: a sharp breakdown in early December when this line became a resistance. The significant exception was the DOGE. The coin soared more than 40% after Musk tweeted that Tesla was considering selling merchandise for this coin. The explosive growth here is more of a secondary effect of its low liquidity and knee-jerk reaction to the message of Twitter’s chief influencer. Overall, there is also a downtrend here, which has taken 40% off the price from November 8th. However, taking a step back, it is still worth remaining cautious about expectations from the Fed and market dynamics after the announcement. Bitcoin’s technical support and Ether’s attempts to hold near $4000 are more likely to be buyers’ last hope of maintaining the illusion of a bull market. Overall, however, cryptocurrencies have been in a downtrend for more than a month now. These are not sharp dips and short squeezes but methodical selling by funds, as they are very similar to the dynamics of traditional markets. Other coins, where there are few market professionals, have a general downward trend.  
When will the last Bitcoin be mined and where could BTC price be headed?

When will the last Bitcoin be mined and where could BTC price be headed?

FXStreet News FXStreet News 14.12.2021 16:01
There are less than 2.1 million BTC left to be mined. The last Bitcoin is expected to be mined in 2140. Analysts believe that the scarcity could propel BTC price to reach six figures. Bitcoin has recently reached a massive milestone, as miners have minted over 18.9 million BTC into supply, accounting for 90% of the 21 million maximum supply in the network. 90% of all Bitcoin have been created Less than 10% of the entire Bitcoin maximum supply now remains, and analysts are expecting the leading cryptocurrency’s scarcity to influence a supply shock which could propel BTC price higher. As the adoption of Bitcoin and other cryptocurrencies are on the rise, analysts are predicting that the long-term price outlook for BTC will reach over six figures. As miners continue to mint new coins, the number of new Bitcoins entering into supply have steadily increased, reaching past the 18.9 million mark, resulting in 90% of all BTC to have been created and released into supply. After reaching this threshold, only 2.1 million BTC, or roughly 10% of the total 21 million Bitcoin remains to be mined. Additionally, there are estimates of three to five million Bitcoin that have not moved in the past decade, and a large portion could be permanently lost. The current block reward for miners is 6.25 BTC per block, and the rewards will decrease to half of the amount per block post-halving. Given the current rate of 900 BTC mined per day and 210,000 blocks are needed for every halving, the next reward halving is expected to be in May 2024. The current Bitcoin inflation rate fluctuates between 1.75% to 1.88% and after the halving event, the inflation rate is estimated to be around 1.10%. Until 2030, there will be two sizeable Bitcoin block reward halvings, after then, the rewards will be fractions of BTC. The inflation rate is expected to be around 0.50% by 2030, and 98.02% of all Bitcoin supply will be expected to be mined. The last BTC is expected to be mined in the year 2140. Given that Bitcoin hashrate surging to all-time highs, the network has accelerated the timeframe between halvings, as the daily issuance rate has rapidly increased than previously estimated. Bitcoin halvings occur every four years, allowing fewer coins to enter into supply, making the leading cryptocurrency scarce which increases demand. Marcus Soitiriou, analyst at GlobalBlock suggested that Bitcoin’s scarcity will lead to supply shock for BTC to overtake gold’s market capitalization over the next ten years, which stands at around $10 trillion. He estimates the bellwether cryptocurrency’s price to rise to $500,000 in the future. Bitcoin price awaits 12% ascent Bitcoin price has formed a falling wedge pattern on the 4-hour chart, indicating hope for the bulls. BTC has bounced off of the descending support trend line that forms the lower boundary of the governing technical pattern at $45,654. The leading cryptocurrency is now ready for a recovery. The first line of resistance may appear at the 21 four-hour Simple Moving Average (SMA), coinciding with the 38.2% Fibonacci retracement level at $48,501. Additional headwind may appear at the 50 four-hour SMA at $49,057. A break above the upper boundary of the falling wedge could put a 12% climb on the radar toward $55,435. BTC/USDT 4-hour chart If selling pressure increases, Bitcoin price will discover immediate support at the December 4 low at $46,131, before dropping toward the lower boundary of the prevailing chart pattern at $45,654.
How Supply Constraints Stole Christmas

How Supply Constraints Stole Christmas

Saxo Bank Saxo Bank 15.12.2021 13:00
Equities 2021-12-15 10:30 Summary:  If you have tried to buy, well, basically anything, you've probably noticed that the shelves in the stores aren't as full as they used to be. With the Christmas shopping season approaching fast, there is a very real chance that Santa will have a hard time getting everyone what they want. In this article, we will look at how supply constraints will be this year's Grinch, how they will steal Christmas and how you can counteract them. It’s not news that the global supply chains are challenged, but how did it get here and what will it mean for your Christmas presents? In this article, we will look into how supply constraints came about and how they will impact Christmas shopping. “We’ve all become accustomed to the fact that when you order something online, you get it delivered within a few days. That system is broken down and we have to be much more patient now,” says Ole Hansen, Head of Commodity Strategies at Saxo Group. Exceptional demand challenges the physical limits of the worldOne of the main drivers behind the supply constraints is a sudden imbalance between supply and demand, which is an effect of the COVID-19 breakout in the early 2020s. On one hand, a collapse of the global economy was expected, and on the other, governments across the globe started supporting both businesses and people by handing out money. The global economic collapse in large part didn’t happen and the world went into a lockdown, which meant that people suddenly had money on their hands but couldn’t travel or go to restaurants, so instead they started buying goods and commodities.“I normally tend to tell the Danish media that it all began when we got our holiday check paid out from the government, because then we all went on a spending spree. Restaurants and cinemas were closed, so we went online and went shopping for consumer goods. So, from having cancelled lots of orders, expecting a sharp decline in economic activity due to the pandemic, companies suddenly had to put in massive new amounts of orders and the system couldn't cope,” says Hansen.In a world where global activity was already historically high, an increase in demand like this puts a lot of strain on the physical parts of being able to supply people with what they want. “When you have such a big shift on the demand side, then when we talk about supply, it's about the physical world - ports, container ships, available containers - and its generally about infrastructure, which takes time to build out and thus can’t make as big a leap as the demand side, because we are talking about building big physical things,” says Peter Garnry, Head of Equity Strategies at Saxo Group. The system, which Hansen is referring to is the logistics sector, where the physical limits of the world are challenged by rapid technological development. “I think what this whole supply chain issue has shown is that everything we're talking about is basically constraints we observe in the physical world, and if there's something we have seen during this pandemic, it’s a phenomenal rally in technology stocks and companies that operate in the online world. When I travel around and talk to clients, I show this chart where you can see that since the great financial crisis, technology companies’ revenue and profits have just taken off like a rocket relative to the physical world, the normal world, the one we are in, and these supply constraints are once again teaching us that a lot of the investment opportunities will be in the online world,” says Garnry. In essence, this means that because governments feared an economic collapse, they handed out money to people and companies who then used the money to buy more goods than usual, like e.g. technological devices and gadgets, which pushed the limits of the physical ships, ports, trucks and roads. In such a situation, the last thing you would want is to clog up the system, so the pressure on the physical limits will be even tougher. Enter Ever Given.The bottleneckWinding the clock back to March this year, one of the largest container ships in the world, Ever Given, was passing through the Suez Canal, one of the world’s most important supply routes. Here it was hit by strong winds that forced the ship to turn, which resulted in the ship getting stuck across the canal. Some 400 container ships were queued up for six days, creating not only shipping delays but also further bottlenecks when the ships arrived at ports at the same time, increasing the pressure on the physical world. So now you had governments handing out money, a global population eager to buy goods, ports that are already overworked and a global trading route which is closed down, halting the usual flow of goods from East to West. A shortage of peopleIt’s probably fair to think that such bottlenecks shouldn’t take long to fix as long as everything is operating as it should. But here it’s necessary to understand two things. The first thing is that on the sea, transportation of cargo is constantly becoming bigger, but on land, this isn’t the case. “Containers ships are getting bigger and bigger, but you still need one truck to move the container to and from the harbour. So, it’s an increasing challenge that these ships roll in and need to be offloaded and loaded in a relatively short time. This has become a major obstacle, like we have seen in Felixstowe in the UK, in Los Angeles and even in Rotterdam,” Hansen says.At the same time, there’s a historic shortage of truck drivers around the globe. In the US alone, it’s estimated that 80,000 additional truck drivers are needed to handle the number of containers that could be delivered at the country’s ports. The reasons for this are many, but it’s an important factor in the supply constraints, and one that isn’t easily fixed.Generally, truck drivers have been in short supply since the mid-2000s. In addition, many economies around the world work at close to full capacity, which usually allows people with lower-paying jobs – like truckers – to move up to higher-paying and more attractive jobs, due to increased demand for workers. Also, governmental support during COVID may have provided some drivers with money they’ve been able to use to get better jobs. “You need a lot of truck drivers, which has been another issue, as there’s a shortage of truck drivers. This is mainly because some of them have found other jobs during the lockdown, where wages are rising in other industries as well, so it's difficult to find all the truck drivers needed to move all these containers. That means that you suddenly end up with a harbour full of empty containers stacking up, which takes space away from the filled ones that need to come in,” says Hansen. So, along with increased demand putting the physical world under pressure, and the blockage of an important trading route, there are also not enough people and trucks to handle the containers when ships do roll in, all adding to the delays and difficulties of moving things around the world.COVID closuresWhen trying to explain how we ended up with supply constraints, it’s impossible not to mention the COVID-19 virus, because it has had a significant impact. As previously mentioned, one reaction to the pandemic has been governmental stimulus, which has created a number of ripple effects. More concretely, COVID-19 has affected operations at ports around the globe – especially in China, one of the world’s key production hubs. “The Chinese zero-case policy on COVID-19 is making it difficult to keep supply chains efficient, because when there’s a new series of cases in China, they tend to close down pretty large parts of the particular region where the cases are happening,” says Garnry.The shortage to rule them allStruggling to ship goods around the world is a major challenge. But struggling to supply the most crucial component in today’s technology goods is arguably a much bigger issue. Semiconductors – also called integrated circuits or microchips – are used in a wide range of goods and products, including electronics. The semiconductor shortage – like the others we’ve described – has been caused by a variety of snowball effects, including bad weather in Texas, trade disputes between China and the US, and especially the COVID-19 pandemic. But this shortage is more significant, constraining sales of some of our most in-demand goods. In that sense, the semiconductor shortage is the real Grinch, which will steal the most popular Christmas presents even before they’re produced. “The semiconductor shortage is impacting everything from Nintendo to car production and PlayStations. iPhone production has also been cut by as many as 10 million units due to these constraints. So, even if you wish for it, and you want it and it's cool, you can't get it,” says Garnry.And if you’re wishing for a new car, semiconductors can also spoil the day. Car manufacturers, who buy lower margin semiconductors, were late in ordering chips after the economy didn’t collapse due to the pandemic. The semiconductor industry had already found willing buyers thanks to high demand for graphics cards for gaming and crypto, as well as chips used in data centres and computers. Car manufacturers were therefore put at the back of the line and have ever since scrambled to get priority, causing car production to be reduced due to lack of semiconductors, meaning that there are a lot of cars that are almost ready to be shipped, but can’t be because they are missing this one component,” says Garnry. Product centralisationLooking at the different reasons why supply chains have ended up in the pickle they’re in, one of them also points to a potential solution, which would be a massive shift in the production strategy that companies have pursued for a number of years. “If you're a large consumer goods company today and your main markets are the US and Europe, you must be contemplating whether you should have production closer to your end markets,” says Garnry. He adds:“Not too long ago, we had a very engaging conversation with Jens Bjørn Andersen, CEO of DSV, and we talked about this situation. In the financial industry, we always suggest that investors should make sure to  diversify their portfolio. But for whatever reason, this concept seems to have escaped the manufacturing industry when you look at their portfolio of production. Said in another way – production companies have sent huge amounts of their global production to China and that really hurts when you have disruptions like these. This could lead us to see more fragmented production and that manufacturing companies begin to diversify their supply chains. My bet is that in the future, we will see some production come back to main consumer markets in the western world.” How to un-steal Christmas from the supply GrinchWhile Garnry’s point about production closer to main markets is relevant, it’s a long-term solution that won’t help this year’s Christmas shopping. For now, we’ll just have to get used to it being more difficult to get what we want.“We need to get the balance back in terms of supply and demand. Until then, we're going to have to live with some disruptions for a number of years and that will create these temporary obstructions in various places in the world,” says Hansen. Garnry adds that the bottlenecks will solve themselves: “We will get there, but it will take some time,” he says.So, what do we do this Christmas? While the Grinch may steal your car, iPhone and PlayStation, Hansen thinks we should look at our wish list and wish for something the Grinch can’t steal – and where we can do good. “Regarding Christmas, think a bit alternatively. The global economy came back very strongly, but there was a whole area which was left in the dark and that was the service sector. So, spare a thought for them if you can't get the goods you are looking for. Wish for a gift card to the cinema or to a restaurant or to some local experience. They're not going to run out of supplies and could use it,” he says.If you want to read more about how to invest in the logistics sector during these challenges, take a look at this article. If you want to get inspiration for more investments in the logistics sector, take a look at Garnry’s theme basket here.
Tough Choices Ahead

Tough Choices Ahead

Monica Kingsley Monica Kingsley 15.12.2021 15:51
S&P 500 declined on poor PPI data, with financials virtually the only sector closing in the black. Rising yields and risk-off credit markets, that‘s the answer – markets are afraid of a more hawkish Fed than what they expect already. While the central bank will strive to project a decisive image, I‘m looking for enough leeway to be left in, and packaged in incoming data flexibility and overall uncertainty. Good for them that the fresh spending initiative hasn‘t yet passed. Still, I‘m looking for the Fed to be forced during 2022 to abruptly reverse course, and bring back the punch bowl. Treasuries look serene, and aren‘t anticipating sharply higher rates in the near term – not even inflation expectations interpreted higher PPI as a sign that inflation probably hasn‘t peaked yet. This isn‘t the first time inflation is being underestimated – and beaten down commodities (with copper bearing the brunt in today‘s premarket) reflect that likewise. Only cryptos are bucking the cautious entry to the Fed policy decision, and decreasing liquidity, in what can still turn out as a lull before another selling attempt. I think that the overly hawkish Fed expectations are misplaced, and that the risk-on assets would reverse the prior weakness – both today and in the days immediately following, which is when the real post-Fed move emerges. Odds are that it would still be up across the board. Yes, I‘m looking for the Fed speak to be interpreted as soothing – as one that would still result in market perceptions that the real bite isn‘t here yet, or doesn‘t look too real yet. Big picture is that public finances need inflation to make the debt load manageable, and that ample room to flex hawkish muscles isn‘t there (as retail data illustrate). As I wrote in yesterday‘s summary: (…) Risk-off mood is prevailing in going for tomorrow‘s FOMC – the expectations seem leaning towards making a tapering / tightening mistake. While headwinds are stiffening, we haven‘t topped yet in stocks or commodities, but the road would be getting bumpier as stated yesterday. Select commodities and precious metals are already feeling the pinch late in today‘s premarket trading, but there is no sending them to bear markets. Get ready for the twin scourge of persistent inflation and slowdown in growth to start biting increasingly more – just-in producer price index (9.6% YoY, largest ever) confirms much more inflation is in the pipeline, and the Fed would still remain behind the curve in its actions. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 had a weak day, but the dip was being bought – there is fledgling accumulation regardless of deteriorating internals, and tech selloff continuing. Credit Markets HYG even staged a late day rally – bonds are in a less panicky mood, not anticipating overly hawkish Fed message. And that‘s good for the markets that sold off a bit too much. Gold, Silver and Miners Precious metals downside appears limited here, and today‘s premarket downswing has been largely erased already. Much catching up to do on the upside, just waiting for the catalyst. Crude Oil Crude oil is on the defensive now – the weak session yesterday didn‘t convince me. I‘m though still looking for higher prices even as today‘s premarket took black gold below $70. Still not looking for a flush into the low or mid $60s. Copper Copper upswing didn‘t materialize, and worries about the economic outlook keep growing. The sideways trend keeps holding for now though, still. Bitcoin and Ethereum Bitcoin and Ethereum bottom searching goes on, yesterday‘s downside target was hit, but the bottom (at $46K BTC or $3700s ETH) might not be in just yet. Cryptos remain in wait and see mode. Summary Bears aren‘t piling in before today‘s FOMC – the Fed‘s moves will though likely be interpreted as not overly hawkish. Given more incoming signs of slowing economy, the window of opportunity to tighten, is pretty narrow anyway. Why take too serious a chance? Yes, I‘m looking for the weakness in real assets to turn out temporary, and for stocks not to be broken by inflation just yet – as argued for in the opening part of today‘s analysis. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
MSFT Stock News and Forecast: Why Microsoft is on target for $300

MSFT Stock News and Forecast: Why Microsoft is on target for $300

FXStreet News FXStreet News 15.12.2021 16:08
Microsoft stock falls over 3% on Tuesday ahead of Fed. Tech stocks suffer as rate hikes hit high growth names. MSFT is close to all-time highs, volume remains elevated. Microsoft (MSFT) is pausing for breath near all-time highs as the market awaits Fed taper talk Wednesday. While high growth stocks may wait in trepidation, more established names such as Microsoft and Apple (AAPL) have continued to attract fresh investors. High growth usually means low profits, but this is certainly not the case for Microsoft or Apple. Indeed, recent research from Goldman Sachs demonstrated the divergence between mega tech names this year versus unprofitable tech names. Unprofitable tech names are down circa 20% for the year, while mega tech is up nearly 30%. The logic is sound – higher rates disproportionally hit high growth rates. By comparison, established mega tech are cash cows that offer huge profits, huge leverage, huge purchasing power and operate in a quasi-monopolistic stance whereby inflationary pressures can be passed on to consumers. GOOGL, AAPL, MSFT outperformance versus Nasdaq since the start of the year Microsoft stock news It used to be the case that consumer staples were the de facto defensive stocks that investors retreated to in times of stress. After all, we all need food for survival. Utility stocks also were well-used defensive mechanisms for much the same logic, basic necessity. However, with the advent of mobile technology, essentials are now seen as communication and news stocks. Big tech fulfills all these roles. Our smartphone is a means of communication, a means of news service, television, shopping, etc. We now view many big tech services as essential and ones we cannot live without. Combine this with huge revenue, in many cases monopolistic qualities, and piles of cash, and you have the perfect defensive stocks for the 21st century. This is why Apple actually appreciated during last week's Omicron sell-off. What we are currently seeing is high growth meme names taking a disproportionate hit ahead of the Fed. Think Tesla down again, and AMC and GME collapsing. The Nasdaq index was the underperformer on Tuesday. Microsoft stock forecast $318 is our key short-term pivot. Already MSFT has put in a lower high, albeit just below all-time highs. A break of $318 sets a lower low and puts a short-term trend in motion. We specify short term here. This is what most of you likely are interested in. The longer-term trend remains bullish, fundamentals are strong, earnings power is consistent and defensive qualities mentioned above can shield it from inflationary pressures. However, there are some bearish points to note for short-term swing traders. We have a decling MACD and RSI. We also have bearish divergences from both indicators, significantly so in the case of the RSI. Based on this we feel $318 is likely to break, and below we see support at $300. We base this not only on the round number theory but on the volume profile. Volume means price acceptance and support. MSFT 1-day chart
Why Isn’t Gold Rallying Along With Inflation?

Why Isn’t Gold Rallying Along With Inflation?

Arkadiusz Sieron Arkadiusz Sieron 05.11.2021 16:20
  Inflation is high and doesn’t seem to be going away anytime soon. However, gold is not rising. The question is – what does the Fed have to do with it? Inflation is not merely transitory, and that’s a fact. Why then isn’t gold rallying? Isn’t it an inflation-hedge? Well, it is - but gold is a lazy employee. It shows up at work only when inflation is high and accelerating; otherwise, it refuses to get its golden butt up and do its job. All right, fine, but inflation is relatively high! So, there have to be other reasons why gold remains stuck around $1,800. First of all, central banks are shifting their monetary policy. Global easing has ended, global tightening is coming! Actually, several central banks have already tightened their stance. For example, among developed countries, New Zealand, Norway, and South Korea have raised interest rates. Brazil, the Czech Republic, Hungary, Mexico, Poland, Romania, and Russia are in the club of monetary policy hawks as well. Even the bank of England could hike its policy rate this year, while the Fed has only announced tapering of its asset purchases. So, although central banks will likely maintain their dovish bias and real interest rates will stay negative, the era of epidemic ultra-loose monetary policy is coming to an end. We all know that neither the interest rates nor the central banks’ balance sheets will return to the pre-pandemic level, but the direction is clear: central banks are starting tightening cycles, no matter how gentle and gradual they will be. This means that monetary policy is no longer supportive of gold. The same applies to fiscal policy. It remains historically lax despite fiscal stimulus being pulled back. Even though Uncle Sam ran a fiscal deficit of $2.8 trillion in fiscal year 2021 - almost three times that of fiscal year 2019 ($0.98 trillion) - it was 12% lower than in fiscal year 2020 ($3.1 trillion). This implies that the fiscal policy is also tightening (despite the fact that it remains extravagantly accommodative), which is quite a headwind for gold. Investors should always look at directional changes, not at absolute levels. What’s more, we are still far from stagflation. We still experience both high inflation and fast GDP growth, as well as an improving labor market. As a reminder, the unemployment rate declined from 5.2% in August to 4.8% in September. The fact that the labor market continues to hold up relatively well is the reason why the so-called Misery Index, i.e., the sum of inflation and unemployment rates, remains moderate despite high inflation. It amounted to 10.19 in September, much below the range of 12.5-20 seen during the Great Inflation of the 1970s (see the chart below). So, the dominant narrative is about both inflation and growth. When people got vaccines, markets ceased to worry about coronavirus and started to expect a strong recovery. Commodity and equity prices are rising, as well as real interest rates. These market trends reflect expectations of more growth than inflation – expectations that hurt gold and made it get stuck around $1,800. Having said that, the case for gold is not lost. Gold bulls should be patient. The growth is going to slow down, and when inflation persists for several months, the pace of real growth will decline even further, shifting the market narrative to worrying about inflation’s negative effects and stagflation. Gold should shine then. Wait, when? Soon. The Fed’s tightening cycle could be a turning point. The US central bank has already announced tapering of quantitative easing, which could erase some downward pressure on gold resulting from the anticipation of this event. Additionally, please remember that every notable market correction coincided with the end of QE, and every recession coincided with the Fed’s tightening cycle. Moreover, don’t forget that gold bottomed in December 2015, just when the Fed started hiking the federal funds rate for the first time since the Great Recession, as the chart below shows. However, when it comes to tapering, the situation is more complicated. The previous tapering was announced in December 2013, started in January 2014, and ended in October 2014. As one can see in the chart above, the price of gold initially increased, but it remained in its downward trend until December 2015 when the Fed started hiking interest rates. Hence, if history is any guide, there are high odds that gold may struggle further for a while before starting to rally next year, which could happen even as soon as June 2022, when the markets expect the first hike in interest rates. Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care.
Intraday Market Analysis – Gold Needs Catalyst

Intraday Market Analysis – Gold Needs Catalyst

John Benjamin John Benjamin 15.12.2021 08:38
XAUUSD awaits breakout Gold consolidates as traders await the Fed’s monetary policy update. The metal came under pressure after it erased all gains from the November rally. Price action is stuck in a narrowing range between the daily support at 1760 and 1806. This indicates the market’s indecision. A bearish breakout would confirm the bearish MA cross on the daily chart and trigger an extended sell-off towards the floor at 1680. On the upside, a rally would send the price to retest the previous peak at 1870. GBPCAD rises towards key resistance The pound bounced back after Britain showed strong wage growth in the three months to October. A bullish RSI divergence indicated a loss of momentum in the latest sell-off. A break above 1.6770 and then a bullish MA cross were the confirmation for a reversal. The pair is heading towards the daily resistance level at 1.7100. Its breach may lead to a broader rally in the medium term. In the meantime, an overbought RSI could temporarily limit the extension. 1.6900 is the closest support in case of a pullback. USOIL seeks support Oil prices struggled after the International Energy Agency said that the omicron strain may threaten global demand. WTI crude is hovering under the 20-day moving average after the RSI briefly shot into the overbought territory. 74.10 near the 30-day moving average seems to be a tough nut to crack for now. A bullish breakout would attract momentum buyers and send the price to the daily resistance at 79.00. Otherwise, 68.00 from the latest rally is the support to keep the rebound valid.
US retail sales worse than expected, but still off the charts

US retail sales worse than expected, but still off the charts

Alex Kuptsikevich Alex Kuptsikevich 15.12.2021 16:30
US retail sales showed unexpectedly weak growth, adding only 0.3% for November against expectations of 0.8% and 1.8% a month earlier. This release triggered a strengthening momentum in the dollar, with the DXY rising 0.2% immediately after the release. EURUSD is making a new weekly low at 1.1240. While the latest data is noticeably lower than expected, one cannot ignore the sharp rise of previous months. US sales are measured in money and are not inflation-adjusted. A price increase of 0.8% for November indicates a real decline in retail sales. However, it is still worth considering that by the same month a year earlier, sales were up 17.9% against a 6.5% increase in prices. The chart clearly shows how the current sales level has broken away from its multi-year trend line. And this gap is partly due to logistical problems and is feeding inflationary pressures. What if the Fed aims to deflate this bubble? It seems, however, politicians are unlikely to announce such intentions.
Stocks Fell Ahead of Today’s Fed – a New Downtrend?

Stocks Fell Ahead of Today’s Fed – a New Downtrend?

Paul Rejczak Paul Rejczak 15.12.2021 15:48
  Stocks went lower yesterday, as investors took profits off the table ahead of today’s FOMC release. Was it a reversal or just correction? For in-depth technical analysis of various stocks and a recap of today's Stock Trading Alert we encourage you to watch   The S&P 500 index lost 0.75% on Tuesday, as it broke below its recent trading range. The broad stock market’s gauge retraced some of its rally and it got back below the 4,650 level. On the previous Friday the index fell to the local low of 4,495.12 and it was 5.24% below the Nov. 22 record high of 4,743.83. Then we saw another attempt at getting back to the all-time high and on Friday the index closed the highest in history. So was yesterday’s decline only a correction? For now, it looks like a downward correction, but we may see some more volatility following today’s FOMC release and tomorrow’s ECB and the BOE release. Today the index is expected to open virtually flat and it will likely trade within a consolidation before the Fed release at 2:00 p.m. The nearest important resistance level is now at 4,665-4,670, marked by the recent local lows and the next resistance level is at 4,700. On the other hand, the support level is at 4,610-4,630, marked by the previous Tuesday’s daily gap up of 4,612.60-4,631.97. The support level is also at 4,600. The S&P 500 is close to the early November local low, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Tech Stocks Are Relatively Weaker Let’s take a look at the Nasdaq 100 chart. The technology index bounced to the resistance level of 16,400. Tech stocks remain relatively weaker, as the Nasdaq 100 is closer to the early December local lows. Conclusion The S&P 500 index will likely trade within an intraday consolidation before the Fed release today. Then we may see an increased volatility in stocks, currencies and commodities. The S&P 500 index trades within a downward correction and we may see more profit-taking action in the near term. Here’s the breakdown: The S&P 500 is expected to open virtually flat ahead of today’s FOMC release. We are maintaining our short position from the 4,678 level. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Considering Portfolios In Times Of, Among Others, Inflation...

Till the Dollar Yields

Monica Kingsley Monica Kingsley 17.11.2021 15:53
S&P 500 staged a very risk-off rally, not entirely supported by bonds. Value declined, not reflecting rising yields. Paring back recent gains on a very modest basis was palpable in financials and real estate, while (encouragingly for the bulls) consumer discretionaries outperformed staples. That‘s a testament to the stock bull run being alive and well, with all the decision making for the medium-term oriented buyers being a choice of an entry point. The brief short-term correction, the odds of which I saw as rising, is being postponed as the divergence between stocks and bonds grows wider on a short-term basis. Even the yield spreads on my watch keep being relatively compressed, expressing the Treasury markets doubts over the almost jubilant resilience in stocks. Make no mistake though, the path of least resistance for S&P 500 remains higher, and those trading only stocks can look forward for a great Dec return. Faced with the dog and pony debt ceiling show, precious metals dips are being bought – and relatively swiftly. What I‘m still looking for to kick in to a greater degree than resilience to selling attempts, is the commodities upswing that would help base metals and energy higher. These bull runs are far from over – it ain‘t frothy at the moment as the comparison of several oil stocks reveals. It‘s still about the dollar mainly: (…) The elephant in the room is (the absence of) fresh debt issuance lifting up the dollar, making it like rising yields more. Not only that these are failing to push value higher, but the tech resilience highlights the defensive nature of S&P 500 performance. Crucially though, precious metals are seeing through the (misleading dollar strength) fog, and are sharply rising regardless. Make no mistake, with the taper reaction, we have seen what I had been expecting (or even better given that I prefer reasonably conservative stance without drumming up expectations either way) – I had been telling you that the hardest times for the metals are before taper. Commodities and cryptos are feeling the greenback‘s heat most at the moment. It remains my view though that we aren‘t transitioning into a deflationary environment – stubborn inflation expectations speak otherwise, and the Fed‘s readiness to face inflation is being generally overrated, and that‘s before any fresh stimulus is considered. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bulls recaptured the reins in the very short-run, but it‘s the upswing sectoral internals that‘s preventing me from sounding the all clear. Credit Markets Credit markets look to be potentially stabilizing in the very short run – it‘s too early to draw conclusions. Gold, Silver and Miners Gold and silver declined, but the volume doesn‘t lend it more credibility than what‘s reasonable to expect from a correction within an uptrend. Forthcoming miners performance is key to assessing the setback as already over, or not yet. Crude Oil Crude oil bulls didn‘t got anywhere, and the oil sector resilience is the most bullish development till now. The absence of solid volume still means amber light, though. Copper The copper setback is getting extended, possibly requiring more short-term consolidation. Unless commodities swing below the early Nov lows, the red metal won‘t be a source of disappointment. Bitcoin and Ethereum Bitcoin and Ethereum crack in the dam is still apparent and open – the bulls haven‘t yet returned prices to the recent (bullish) range. I‘m though looking for a positive Dec in cryptos too, and chalk current weakness to the momentary dollar strength. Summary S&P 500 bulls leveled the short-term playing field, but the credit markets non-confirmation remains. Even though this trading range might not be over yet, it would be followed by fresh ATHs. Precious metals still have a lot of catching up to do, and will lead commodities into the debt ceiling showdown, after which I‘m looking for practically universally brighter real asset days - inflation expectations aren‘t declining any time soon. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
BoE Preview: No rate hike to keep Santa happy?

BoE Preview: No rate hike to keep Santa happy?

Luke Suddards Luke Suddards 16.12.2021 12:57
GBP USD EUR 15 Dec 2021 Take a read below of all the essential details to know for this event. The Bank of England are back to deliver their interest rate policy decision tomorrow at 12pm GMT. No surprises like which unfolded at the November meeting are expected to be thrown the market’s way as the consensus clearly now expects a delay to the 15bps hike. The BoE have gone from one uncertainty to the next – labour data to now omicron. The announcement of Plan B restrictions was the nail in the coffin for any moves by the BoE come Thursday. If even one of the most hawkish members of the MPC (Saunders) stated there could be advantages to waiting for more data on how the omicron variant will impact the U.K. economy before raising rates then we can expect the more dovish/neutral members to be hesitant on the rate hike front. This is quite clearly a patient committee which sees “value in waiting for additional information”. It costs them less to wait and fall temporarily behind the curve as opposed to jumping the gun too early (remember monetary policy has a lag between implementation and visible effects). At the last meeting the interest rate vote was 7-2, with Saunders and Ramsden leading the hawkish charge, however, with the latest commentary by Saunders could we see this meeting’s vote at 8-1 instead? This combined with any softening in the policy statement tone could have dovish implications for money market expectations around February’s meeting, potentially applying some pressure on GBP. Some other historical precedents provide further support for a hold at this meeting – since gaining independence the BoE has never hiked at a December meeting with Christmas round the corner as well as preferring to take policy action at meetings that coincide with monetary policy reports and press conferences. Traders focus will be shifting to February’s meeting as they try to assess whether the BoE will hike by 15bps vs 25bps or hold again. This really does depend on the damage caused by omicron over the next 2 months. The UK with their higher natural immunity and the rapid ramp up in booster jabs (41% of population 12+ and 86% of over 60 population triple jabbed) should be able to avoid harsher lockdowns like we’ve seen previously, limiting the economic impact. This is very much dependent on the number of hospitalizations and deaths (busiest time of year for the NHS in Winter as it is). Case data should have peaked by the time of the next meeting (if it follows previous trends), with the BoE having more information at their fingertips to evaluate whether economic risks (how does the labour market hold up) from omicron will be on a downward trajectory. Continuing with the medium-term outlook, the SONIA curve indicates a bank rate of around 1% by end 2022. This is quite aggressive and creates the risk of a dovish repricing in those expectations if there are any speedbumps throughout next year. This would be a headwind for sterling. Labour, Inflation & GDP data: We received the first official employment report with the distortionary effects of furlough removed. It went fairly smoothly and I think bar omicron this would have been enough for the BoE to move. Average earnings (excluding bonuses) which feeds through to wage pressures was above consensus at 4.3% vs 4% exp, the employment gains of 149k was below the 225k anticipated, however, the claimant count showed a good decrease and the unemployment rate was lower than the 4.3% expected as well as tracking below the BoE’s forecast of 4.5%. Taking into account record vacancies and these figures the labour market looks healthy and is heading in the right direction. Moving onto the price stability side of the equation. Headline and core inflation both substantially beat the market’s expectations and with core (strips out volatile items) at 4% it is now the highest reading since 1992. The surge above 5% at a headline level has arrived earlier than many economist and the Bank themselves expected. Upon closer inspection, services inflation remains weak and price pressures are still largely being driven on the energy and goods components. The concern for the BoE of higher inflation is an unanchoring of expectations and second round effects such as wages rising – this would create more persistent inflation and could prove difficult lowering it back to the 2% target within the Bank’s ideal timeframe. Looking at OIS pricing post this inflation drop it seems rate markets have got a tad ahead of themselves with pricing for a hike tomorrow now at 74%. This could actually see sterling weaken if a hold is announced. GDP data out Friday almost was flat from a MoM perspective as it creeped up by a paltry 0.1%, this is quite significantly down from the 0.6% seen in September as well as the consensus of 0.4%. This leaves the UK economy 0.5% smaller than pre-covid levels. It remains to be seen how the economy will fare going forward as restrictions could be increased as key personnel involved in these decisions produce ominous warnings - CMO Whitty warned that UK hospitals could be overwhelmed in four weeks. Given the UK’s economy is heavily skewed towards services, tighter restrictions are a definite risk to the recovery. GBPUSD: GBPUSD found a pre-meeting bid after the inflation numbers and saw price move above both the mini descending channel and back into the main descending channel. I think a good upside target is the round number 1.33 around the 21-day EMA. Above that 1.335 (white horizontal line) would be the next go to. On the downside, a break of 1.32 would be key bringing the 8 December lows of 1.316 into play. The RSI flirted with oversold and has risen 10 points to around 40. Preview (Source: TradingView - Past performance is not indicative of future performance.) EURGBP: EURGBP has failed again to show proper follow through as it breached its upper trend line and the 200-day SMA. The RSI resistance line at 65 proved again to be a useful tool in guiding the sustainability of the move. Price is now hovering just above its 50-day SMA and right on top of its 21-day EMA. Targets wise on the upside again moves into the 200-day SMA and trend line would be important (around 0.855) and then on the downside the 50-day SMA will prove important with moves below there bringing 0.845 into play. Preview (Source: TradingView - Past performance is not indicative of future performance.)
(WETH) Wrapped Ether Explained. What Is It?

This hedge fund poured over $456 million into Ethereum in a week as ETH price dipped

FXStreet News FXStreet News 15.12.2021 16:08
A hedge fund has reaped the opportunity to buy the recent Ethereum price dip. Ether has recently dropped to a swing low of $3,675. Speculators believe the fund’s CEO caused fear, uncertainty and doubt to drive ETH price lower. While Ethereum price has risen significantly this year, the token has recently suffered several periods of volatility lately, reaching a swing low at $3,675. Ethereum fear and greed index is displaying a reading of 34, indicating fear which suggests that the token may be slightly oversold. A hedge fund has taken the opportunity to buy the ETH dip, pouring over $456 million into the cryptocurrency in less than two weeks. Hedge fund buys the Ethereum dip Cryptocurrency hedge fund Three Arrows Capital has purchased $56 million worth of Ether earlier on December 14. Etherscan shows that the firm, founded by Su Zhu, has transferred 14,833 ETH from Binance and Coinbase to its wallet. This is not the first time the hedge fund has purchased a large amount of Ethereum. Last week, Three Arrows Capital transferred $400 million in ETH from crypto exchanges FTX, Binance and Coinbase to its wallet. Crypto reporter Colin Wu first spotted the transactions and Zhu stated that he will continue to “bid hard on any panic dump,” and that purchasing 100,000 ETH is “dust,” suggesting that more purchases in Ether are yet to be made. However, the founder of the crypto hedge fund has been involved in controversy in the crypto community, as he revealed in November that he “abandoned Ethereum despite supporting it in the past.” His statement attracted attention from the crypto industry, and he has since softened his stance and even turned it around and said, “I love Ethereum and what it stands for.” Speculators in the crypto market suggested that Zhu tried to create fear, uncertainty and doubt to drive Ethereum price down to buy more ETH at a lower price. Ethereum price struggles with major headwind at $3,900 Ethereum price has rebounded slightly after a major drop toward the swing low at $3,675 on December 13. ETH continues to be sealed within a symmetrical triangle but is struggling to battle with resistance at the 200 twelve-hour Simple Moving Average (SMA) at $3,900 as buyers are slowly entering the market. An additional obstacle may appear at the 38.2% Fibonacci retracement level at $3,989, then at the 21 twelve-hour SMA at $4,112. A spike in buy orders may see Ethereum price tag the 50% retracement level at $4,139 then head toward the upper boundary of the prevailing chart pattern, coinciding with the 61.8% Fibonacci retracement level at $4,289. ETH/USDT 12-hour chart If Ethereum price slices above the aforementioned line of resistance, a 26% bounce toward $5,404 is on the radar. If selling pressure increases, Ethereum price may discover immediate support at the lower boundary of the governing technical pattern at $3,712 before sliding toward the swing low at $3,675.
Great Santa Rally

Great Santa Rally

Monica Kingsley Monica Kingsley 16.12.2021 15:40
S&P 500 with pretty much everything else surged as the Fed didn‘t turn too hawkish. Predictably. The day of reckoning is again postponed as the central bank effectively kicked the can down the road by not getting ahead of inflation. Taper done by Mar 2022, and three rate hikes then, doesn‘t cut it. This illustrates my doubts about serious inflation figures to still keep hitting (hello latest PPI), and above all, their ability to execute this 1-year plan. If you look under the hood, they don‘t even expect GDP to materially slow down – 4.0% growth in 2022 with three hikes against 3.8% actual in Q3 2021 on no hikes. Something doesn‘t add up, and just as the Bank of England raising rates to 0.25% now, the Fed would be forced to hastily retreat from the just projected course.Yesterday‘s expectations panned out to the letter:(…) Still, I‘m looking for the Fed to be forced during 2022 to abruptly reverse course, and bring back the punch bowl. Treasuries look serene, and aren‘t anticipating sharply higher rates in the near term – not even inflation expectations interpreted higher PPI as a sign that inflation probably hasn‘t peaked yet. This isn‘t the first time inflation is being underestimated – and beaten down commodities (with copper bearing the brunt in today‘s premarket) reflect that likewise. Only cryptos are bucking the cautious entry to the Fed policy decision, and decreasing liquidity, in what can still turn out as a lull before another selling attempt.I think that the overly hawkish Fed expectations are misplaced, and that the risk-on assets would reverse the prior weakness – both today and in the days immediately following, which is when the real post-Fed move emerges. Odds are that it would still be up across the board. Yes, I‘m looking for the Fed speak to be interpreted as soothing – as one that would still result in market perceptions that the real bite isn‘t here yet, or doesn‘t look too real yet. Big picture is that public finances need inflation to make the debt load manageable, and that ample room to flex hawkish muscles isn‘t there (as retail data illustrate).Markets are interpreting yesterday as the punch bowl effectively remaining in place, and crucially, copper is participating after the preceding weakness. The metal with PhD in economics has been hesitating due to the darkening real economy prospects even though manufacturing data aren‘t a disaster. Consumer sentiment isn‘t though positive, and inflation expectations among the people aren‘t retreating as much as bond spreads would show. The red metals is balancing out the economic prospects in favor of participating in the renewed rush into commodities – the super (let alone secular) bull run isn‘t over by a long shot. Stockpiles are tight, and whatever the odds of the infrastructure bill being passed any time soon, copper isn‘t budging. That‘s great for real assets across the board.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 reversal is to be trusted, and the advance was very solidly taken part in. With not too much willing sellers, the advance will likely moderate today, but still continue. The bull hasn‘t topped, has been my thesis for weeks.Credit MarketsHYG celebrations are ushering in the next risk-on phase – credit markets are confirming. The too hawkish Fed worry is in the rear view mirror, and many assets can run once again, the time is still right.Gold, Silver and MinersPrecious metals downside was indeed limited, and the solid upswing I called for, materialized. Now, let‘s wait for the reaction of this catalyst with more inflation, for the juiciest results...Crude OilCrude oil is once again readying the upswing – the conditions are in place for $72 to give in shortly. Similarly, oil stocks haven‘t peaked, and are merely consolidating.CopperKey vote of confidence is coming today from copper – the red metal would very willingly participate in a fresh commodities upswing. It‘s been ushered in already, actually.Bitcoin and EthereumBitcoin and Ethereum look to have found the bottom as well – what kind of corrective pullback would we get? I‘m not looking for one overly deep and testing yesterday‘s lows.SummaryBears have thrown in the towel, and rightfully so – another instance of the Fed crushing the puts. Being between a rock and a hard place, with midterms approaching, infrastructure bill birthing troubles, the central bank‘s room to act isn‘t really too large. FOMC has met market expectations, and still remained behind the curve on inflation. On top, I‘m looking for them to have to reverse course during 2022 – I‘ve argued the case macroeconomically in the opening part of today‘s report. Back to the inflation trades – long live real assets and the not yet having topped S&P 500 (don‘t look at me, Russell 2000)!Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Cryptos ready for Christmas rally

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Cryptos ready for Christmas rally

FXStreet News FXStreet News 16.12.2021 16:06
Bitcoin bulls consolidate above $48.760 and will be looking to test and break $50,020 to the upside. Ethereum has bulls banging on the door at $4,060, ready for a breakout towards $4,465. XRP sees buying volume picking up, as a return to $1.0 is in the making. Bitcoin price is seeing a lift in price action as supportive tailwinds emerge following a dovishly perceived US central bank decision, with investors buying cryptocurrencies across the board. Ethereum is seeing the same interest this morning, with buying volume picking up as the RSI nudges higher. Ripple is undergoing a tight squeeze against $0.84, with bulls pushing to break the downtrend and rally up to $1.0. Bitcoin price sees investors buying any offer insight as buying volume picks up Bitcoin (BTC) price is seeing a positive lift in sentiment as a backdraught emerges after a perceived dovish central bank decision from Jerome Powell and the US Federal Reserve. This morning, investors are taking a stake in risky assets with equities and cryptocurrencies on the front foot. With that, expect Bitcoin to rally on this sentiment throughout the trading day. BTC price will quickly face a critical hurdle at $50,020 with the psychological $50,000 level included and the S1 monthly support level. This trifecta will weigh on any possible upside potential. But as markets are rallying with risk-on across the board, expect this level to break sooner rather than later, with an intraday target towards $53,350. BTC/USD daily chart Investors should expect positive sentiment to be a major theme throughout the day. Two further major central banks are scheduled to announce their decisions today, however, the Bank of England and the ECB, and there is a risk these could cast a shadow on the current Christmas rally.. If one of these delivers a message that would break current sentiment, expect a quick nosedive correction in BTC back towards $44,088 or $43,030 in a quick rewind of the rally. Ethereum price sees bulls fighting bears at $4,060, ready for a landslide victory Ethereum (ETH) price made a perfect bounce off $3,687 on Wednesday, with investors pushing ETH price towards $4,060 around the monthly S1 support level and a pivotal historical chart level. As price opens again around the same level this morning, elevated buying from investors is putting bears under pressure to close their shorts, switch sides and join the buying camp. When this happens, expect a significant spike in buying volume with a quick break above $4,060 and a continuation towards the 55-day Simple Moving Average (SMA) at $4,332. ETH price is just around $130 away from the monthly pivot level and a second technical element in the same area. Expect the rally to halt around that level as some short-term profit-taking will happen, and the price could fade a little back towards the 55-day SMA. Should current sentiment persist, with tailwinds in equities and cryptocurrencies, expect ETH price action to hit $4,646 by the end of the week, with new all-time highs in sight by next week. ETH/USD daily chart With the end of the year approaching rapidly, expect the volume to die down a bit, which could cause some sharp corrections as sellers will not always be there to match the profit-taking from investors. This could result in possible knee-jerk reactions with ETH price tanking in a matter of minutes. Expect with that, the $3,687 and $3,391 levels to be there as safeguards. Ethereum price must reclaim $4,000 to reignite ETH bull market XRP price sees investors coming in with breakout towards $1.05 Ripple (XRP) price sees investors returning as favorable tailwinds in cryptocurrencies are filtering through into XRP price action. Bulls opened the price this morning close to $0.84, and an initial resistance level is just above at $0.88. Expect a bit of a hesitant start because of this double belt of resistance. Once punched through, expect hesitant investors to pull the trigger and join the rally to move higher towards $0.95 at the 200-day SMA. XRP/USD daily chart Assuming a break above the 200-day SMA, expect a quick pop towards $1.05, but once hit, a quick fade will likely happen, with price action falling back towards $0.99. Should, however, these tailwinds start to fade as quickly as they come, expect a quick return to the downside with a push down on $0.78 and a break lower towards $0.62, with the blue descending trend line and the S2 at $0.58 as supporting factors. XRP price shows signs of incoming breakout
Intraday Market Analysis: USD Weakens Across The Board

Intraday Market Analysis: USD Weakens Across The Board

John Benjamin John Benjamin 17.12.2021 08:56
EURUSD tests key supply zone The euro jumped after the ECB announced it will cut its bond-buying program. The pair’s latest retreat seems to have been an accumulation phase for the bulls. Strong buying interest lies in the demand zone around 1.1230. A break above 1.1320 has put buyers back in the control room. 1.1380 from a previously botched reversal attempt is a major hurdle ahead. Its breach may trigger an extended rally towards 1.1460. The RSI’s overextended situation has caused a brief pullback with 1.1270 as a key support. GBPUSD attempts bullish reversal Sterling surged after the Bank of England raised its interest rates to 0.25%. The pound has been treading water above 1.3170. The sellers’ struggle to push lower and the buyers’ attempts above 1.3260 suggest that the mood could be improving. A break above 1.3300 has prompted the bears to cover, attracting momentum traders in the process with 1.3440 as the next target. That said, an overbought RSI may cause a temporary pullback as intraday traders take profit. 1.3260 has become the closest support. NZDUSD breaks resistance The New Zealand dollar rallied as risk sentiment made its return post-FOMC. A bullish RSI divergence indicates a deceleration in the sell-off momentum. The long candle wick from 0.6700 suggests solid buying interest. Then a break above 0.6800 has put the last sellers under pressure. An overbought RSI has limited the initial surge. A pullback may test 0.6755, previously a resistance that has turned into a support. 0.6860 near the 30-day moving average is the next hurdle, and its breach could trigger a bullish reversal.
Natural Gas: to the Moon and back

Natural Gas: to the Moon and back

Alex Kuptsikevich Alex Kuptsikevich 17.12.2021 10:41
The energy crisis is in no hurry to leave Europe. The first wave of astronomical increases in gas prices this autumn has been followed by a second one, with even higher prices, in Europe exceeding $1500 yesterday. As is often the case, several factors combined in an unfortunate coincidence led to the crisis. It seems that China and Europe were over-zealous at the start of the year in encouraging economic recovery and moving away from coal consumption. The first substitute for coal was gas. But Russia, which had not yet got a certification for North Stream 2, diverted gas to China. The situation was exacerbated by the failure of wind generation, on top of a hot summer and a rather chilly start to winter, requiring more energy. All this is multiplied by a policy that Gazprom is failing to deliver via Nord Stream-2 and that the Russian giant prefers to use other ways to supply gas to Europe as little as possible. So the policies of all concerned have only exacerbated the price hike. Now, the officials’ mood and rhetoric do not promise a rapid improvement soon. However, it is worth realising that it is also in the political will to drastically alleviate the pressure on gas prices. It is unlikely that Europe will survive the whole of 2022 in such a situation, but there could be a rather nasty rise in electricity prices in the next couple of months, pushing inflation further upwards. The latest round of gas price rises came when Germany announced that it would not rush to certify NS2. Almost immediately after that, we saw Gazprom continue to reroute gas to China, exceeding the agreed contractual norms as much as possible, while supplies to Europe dropped to a 6-year low. Europe’s logical response to the current energy crisis with its supply problems is promoting alternative sources of energy. High gas and coal prices are a natural catalyst for the switch to alternatives, and politicians can help by announcing stimulus to speed things up even further. It is also worth looking at companies associated with LNG, which is more flexible than pipeline gas in changing supply in response to demand fluctuations. Gazprom itself rarely benefits from sharp price spikes. It is more likely to benefit from long-term trends, supply growth, and Brent Crude price. The roller-coaster ride we see in European gas prices is not a good investment idea as it creates a lot of uncertainty and adds volatility. Looking ahead to the year, I think the power generation and alternative energy suppliers sectors (beyond coal, oil and gas) are attractive. Shares in companies in the traditional energy sector have risen impressively since last November, and this rally, in our view, is coming to an end. The trend for ESG - took off too fast at the start of 2021 and will run out of steam somewhat over the coming months. It’s not a hundred-metre race but a multi-year marathon, so a smooth transition would be logical. As we see at the end of the year, disruptive moves cause severe supply chain disruption and are costly to the world, including a new surge of interest in coal earlier in November. As long as it looks like a speculative hype idea, we expect companies to outperform this trend when the initial noise subsides and the distortions are balanced. ESG now resembles Big Tech a few years ago: a lot of hype and periodic “deflating”, but there is more potential here than in other trends in the long run.
Fading the Rally

Fading the Rally

Monica Kingsley Monica Kingsley 17.12.2021 15:44
S&P 500 made intraday ATHs, but the upswing was sold into heavily – pre-FOMC positioning raising its head? Bonds didn‘t crater, and the risk-off move wasn‘t all too pronounced. Tech weakness was the key culprit, with value barely hanging onto opening gains. Russell 2000 breaking below its Wednesday‘s open nicely illustrates how late in the topping process we are. What is needed for the upswing to go on, is tech leading the daily charge once again – and it remains to be seen for how long and to what degree would value be able to participate. I‘m taking today‘s S&P 500 weakness as squaring the prior quick long gains, which felt practically as a short squeeze. Now, we‘re working through the faster taper impact, not having shaken the news off yet. We‘re though getting there, if precious metals seeing through the fresh policy move inadequacy, and commodities likewise, are any clue. As I wrote yesterday: (…) pretty much everything else surged as the Fed didn‘t turn too hawkish. Predictably. The day of reckoning is again postponed as the central bank effectively kicked the can down the road by not getting ahead of inflation. Taper done by Mar 2022, and three rate hikes then, doesn‘t cut it. This illustrates my doubts about serious inflation figures to still keep hitting (hello latest PPI), and above all, their ability to execute this 1-year plan. If you look under the hood, they don‘t even expect GDP to materially slow down – 4.0% growth in 2022 with three hikes against 3.8% actual in Q3 2021 on no hikes. Something doesn‘t add up, and just as the Bank of England raising rates to 0.25% now, the Fed would be forced to hastily retreat from the just projected course. Markets are interpreting yesterday as the punch bowl effectively remaining in place, and crucially, copper is participating after the preceding weakness. The metal with PhD in economics has been hesitating due to the darkening real economy prospects even though manufacturing data aren‘t a disaster. Consumer sentiment isn‘t though positive, and inflation expectations among the people aren‘t retreating as much as bond spreads would show. The red metals is balancing out the economic prospects in favor of participating in the renewed rush into commodities – the super (let alone secular) bull run isn‘t over by a long shot. Stockpiles are tight, and whatever the odds of the infrastructure bill being passed any time soon, copper isn‘t budging. That‘s great for real assets across the board. The reason I quoted the above copper part, is the importance of its yesterday‘s move – not too hot, not too cold in pursuing the broader commodities. Keeping above $4.28 with ease today, would be an important signal that the bears aren‘t able to step in convincingly, including in stocks. Oil would sort itself out above $71 while gold and silver would extend their preceding gains today. All in all, stocks would join early next week, and apart from bonds not going more risk-off, Ethereum outperformance would be another confirmation of a broader risk-on upswing to happen. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 downside reversal isn‘t to be trusted on a medium-term basis – but the downswing hasn‘t run its course, looking at volume. Good Nasdaq showing is sorely missing. Credit Markets HYG retreat while the quality debt instruments stayed more or less flat, is concerning for today – and for Monday, should we get follow through in bonds later on. Given the volume comparison, it‘s not certain in the least, which would set up conditions for a broader rally early next week. Gold, Silver and Miners Precious metals downside is clearly over, and a fresh upswing well underway. Correction in equities is marginally helping, and the reaction of Fed‘s underwhelming move with more inflation news, would be the juiciest catalyst. Crude Oil Crude oil is building up the springboard once again – the current consolidation including in oil stocks, would be resolved to the upside next week. We haven‘t seen a genuine trend change in Nov. Copper Key vote of confidence has come from copper – more willing participation from the red metal is called for next (as a minimum, not losing momentum vs. CRB Index). Bitcoin and Ethereum Bitcoin and Ethereum haven‘t kept Wednesday‘s gains, and could very well provide an early sign of buying appetite more broadly returning. Summary Bonds remain in wait and see mode, and aren‘t as bearishly positioned as stocks at the moment. Neither are precious metals or commodities, raising the odds of a bullish resolution to the S&P 500 rally that‘s been faded. The usual constellation is what‘s required – recovering bonds taking the pressure off tech, mainly. Ideally accompanied by solid HYG outperformance, value rising, copper extending gains, and Ethereum doing better than Bitcoin. Tall order, especially for today – but nothing unsurmountable for say Monday-Tuesday as argued for in detail in today‘s report. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
DXY remain in 96.00 – 97.00 ranges. Here are the pairs to look closely for the week ahead

DXY remain in 96.00 – 97.00 ranges. Here are the pairs to look closely for the week ahead

Surya Teja Surya Teja 20.12.2021 08:44
EURUSD re-tested 1.12 level. EURUSD was last traded at 1.12 level in 24th Nov 2021, before buyers quickly pushed the price back to above 1.13 within just 2 trading days, and since then the price remained consolidating between 1.1250 – 1.1350 for the past 15 trading days. In this weekly chart perspective the divergence is too obvious to ignore as RSI signaling oversold since EURUSD broke below 1.13 level in early November 2021. Despite the uncertainty from a macro-economic point of view, there are chances for 1.14 level to be the next bulls target, as long as sellers do not break below 1.12 level. AUDUSD re-tested 0.71 weekly engulf. Following the rise of Iron Ore in mid-November 2021, it has become a huge favor for the Aussie dollar to make a significant upside push just right after sellers reached 0.70 level, which then becomes the Q4 new low. Now buyers that has clear the 0.71 level which will expose 0.72 - 0.73 as the next bull target. However, this will be a tough job for buyers as both 100-200 weekly moving averages act as a strong resistance level, even though last week buyers managed to reach 0.72. After that the price quickly lowered toward weekly engulf neckline before the US session closed. Weekly engulf can be a good area to watch for buyers to look for upside continuation for the week ahead.
Creating silver wealth without fear

Creating silver wealth without fear

Korbinian Koller Korbinian Koller 20.12.2021 09:32
Two weeks ago, we posted the following chart in our weekly silver chart book release, after representing a strong case for a bullish silver play: Silver in US-Dollar, Weekly chart from December 3rd, 2021: Silver in US-Dollar, weekly chart as of December 3rd, 2021. We wrote at the time: “The weekly chart above illustrates that as much as we have entered the “shopping zone” for silver. There is a probability that we might see a quick spike down as we have seen at the end of September.” Weekly chart, Silver in US-Dollar, creating silver wealth without fear: Silver in US-Dollar, weekly chart as of December 18th, 2021. We were spot on anticipating how the market would unfold in the future. Furthermore, we followed the principles of consistent analysis of our surroundings, the market, and ourselves. We advanced confidently in the direction of likely probabilities and tried to keep doubt to a minimum. Hourly chart, Silver in US-Dollar, well positioned: Silver in US-Dollar, hourly chart as of December 18th, 2021. This sequence allowed for a low-risk entry on December 15th, 2021 right at the lows. The entry-level of US$21.47 already allowed for a 2.75% partial profit-taking on half of our position size at US$22.06. As always, we use our low-risk quad exit strategy to reduce risk and, as such, fear of losing profits. Now we are well-positioned with the remainder of the position, and a stop raised to break even entry levels. Silver in US-Dollar, monthly chart, worth the effort: Silver in US-Dollar, monthly chart as of December 18th, 2021. The monthly chart above shows our planned following two targets for this trade. With an entry at US$21.47 and an initial tight stop at US$21.22, our risk/reward-ratio towards our first profit-taking target was about 1:2.37. Now for the next target at US$27.35, it is 1:23, and for the final target at US$47.20, it is 1:103. In other words, with extensive planning and stacking of odds, we were able to identify a trade that had about a percent of risk at entry time. In addition, we quickly mitigated risk by early partial profit-taking. And yet, we still have a profit potential of the final 25% of position size, possibly maturing to a 120% profit. Taking only highly likely and highly profitable trades like these is also confidence-building and a fear eliminator. Creating silver wealth without fear: Michael Jordan’s achievement of playing in the present moment only is nothing short of the accomplishment of monks and so-called enlightened beings. It takes a long stretch of a career to achieve such a skill set. It illustrates that trading is more than just pushing a button or extracting a mathematical edge system. Trading is psychology and requires many skill sets combined to produce the necessary consistency to overcome the dilemma that you are only as good as your last action. Luck alone will get you nowhere in this game. It is not our intention to discourage you. Instead, it is quite the opposite. Often trading can be overwhelming and at times one can be down thinking: „Why can’t I do this, why did I betray my own rules again?” Trading is hard, it takes screen time and skill. Do not let fear and doubt dictate your actions. You can do this! Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can also subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|December 19th, 2021|Tags: bottoming pattern, Crack-Up-Boom, Gold, Gold/Silver-Ratio, inflation, low risk, Silver, silver bull, Silver Chartbook, silversqueeze, technical analysis, The bottom is in, time frame, trading principles|0 Comments About the Author: Korbinian Koller Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
Gold and Silver Takeoffff... uh, No..

Gold and Silver Takeoffff... uh, No..

Mark Mead Baillie Mark Mead Baillie 20.12.2021 08:40
The Gold Update by Mark Mead Baillie --- 631st Edition --- Monte-Carlo --- 18 December 2021 (published each Saturday) --- www.deMeadville.com 'Twas a week of hope for the precious metals, Gold therein rising low-to-high from 1753 to 1816 (+3.6%) and Silver per same from 21.41 to 22.69 (+6.0%). But given Gold is never really supposed to stray too far from the 1780s, let alone Silver be allowed to do anything material but decline, both precious metals eked out immaterial weekly gains. Gold settled yesterday (Friday) at 1799, +0.9% net for the week, and Silver at 22.36, +0.7% net. Indeed a net snoozer of a week: â–  Even as the Swiss Franc saw its linear regression trend (21-day basis) rotate further to positive... â–  Even as the Bond's price moved to a two-week high... â–  Even as the S&P's MoneyFlow for the week values the Index 120 points lower than 'tis... â–  Even (more broadly) as the U.S. money supply since March 2020 has averaged an increase of $1 trillion every 93 trading days... â–  Even as the Federal Reserve again alerted the world that 'tis preparing to raise rates; (they can't be outdone by the Bank of England having just so done, even as the European Central Bank remains hand-wringing): we're actually thinking the Fed terminates the tapering and pulls the trigger in its 26 January Policy Statement... "Sorry folks, but we had to do it, else your stick of butter is gonna cost ten bucks." BOOM! And with respect to the latter, as you regular readers well know, the increasing of FedFunds rates was very precious metals-positive during 2004-to-2006 and on balance Gold-positive from 2015-to-2018. Yes even as we've all these historically very Gold-positive events in play, 'tis low that the precious metals continue to lay. "Well mmb, the dollar refuses to die..." Duly noted there, Squire. As we've been saying, market dislocations are the "in thing" these days. Fundamentals have been flushed down the loo, but at least we've quantitative and technical analysis to see us through. For again we quip -- even as goofball-wacko as market correlations have become -- prices are never wrong, their ebbing and flowing still in play, which for the trader we hope leads the correct way: "Don't dare think, else you'll sink!" (That of course courtesy of "The Trend is Your Friend Dept."). Either way, these are extraordinarily challenging trading days! Did you know that the EDTR ("expected daily trading range") of the S&P 500 right now is 67 points? The average annual trading range of the S&P from 1993-1995 was 47 points per year with an average annual percentage tracing of 11%: this year the S&P is tracing a range that averages better than 5% per month! Again analogous to a snake in its death throes. And yet the precious metals remain a disappointment, (save to "The M Word" crowd). Recall "Gold Forecast High Goes Bye-Bye" penned back on 02 October per nixing our 2401 price forecast high for this year: "...The more likely scenario shall well be Gold just sloshing around into year-end, trading during Q4 between 1668-1849..." We'd hoped to have been wrong about that, but with just two weeks to run in 2021, 'tis exactly what's happened. Indeed you can see it "happening" (or better stated "not happening") here across Gold's weekly bars from a year ago-to-date. A snoozer indeed, be it this past week or past year, the current parabolic Long trend (blue dots) completely bereft of price actually rising: And as an added holiday treat (hardly), here is our like (rarely posted) graphic for Silver, unable to maintain her short-lived parabolic Long trend, indeed now Short (red dots). Rather, a truly tarnished treat, one has to say, her appearing none too festive: But as crooned Neil Young back in '70 "Don't let it bring you down..."as we've a ray of technical hope for Gold into year-end; ('course, fundamental hope for Gold springs eternal). This next chart displays Gold by the day from mid-year-to-date. In the graphic's lower panel is a favoured technical study of the trading community, the mouthful MACD ("moving average convergence divergence"). Of interest is the MACD having just confirmed a crossing to positive. And whilst hindsight isn't future-perfect, it is a useful predictor in forming a reasonable near-term target for Gold, as follows. This is Gold's 13th positive MACD crossover since 26 March 2020. The "average maximum" price follow-through of the prior 12 positive crossovers is +87 points within an average signal duration of 27 trading days, (essentially within five weeks). Thus from the confirmation price of 1799, an average 87-point rise would put Gold at 1886; (more conservatively, the "median maximum" price follow-through across those 12 prior occurrences is +57 points, which if met on this run would find Gold at 1856). So with no formidably recent structural overhead resistance -- plus Gold's penchant to have put in positive Decembers in four of the past five years -- a run up to test the denoted 16 November high of 1880 makes some sense, prudent cash management, as always, taking precedence: 'Course, the biggest "positive" (if you will) of the week was the aforementioned Old Lady of Threadneedle Street raising her benchmark interest rate by 150% from 0.10% to 0.25%. (Dare the 1st Earl of Halifax -- one Charles Montagu, who in 1694 devised establishing William Paterson's 1691 proposal for creating the BOE -- flip his wig). Meanwhile across the channel, the ECB looks to curtail its "emergency" asset purchases, but nonetheless is assessing other stimulus measures. No rate hike there. Certainly neither in China as economic consumption and the property market continue to weaken. "Got Dollars?" For indeed as you already well know lest you've been in a hole, the StateSide FedFolks look to bring their Bank's Funds rate up into the 0.75%-to-1.00% target range by the end of next year. And as noted, we think they'll initially move on 26 January, barring an excessive bout of "Oh my! Omicron!" Oh, and from the "Oh By The Way Dept." President "Jumpin' Joe" Biden just signed the $2.5 Trillion Dollar Debasement Declaration so that TreaSec Janet "Old Yeller" Yellen can keep paying the nation's debt obligations and bills through most of next year. For some perspective: the U.S. money supply from 02 January 1998 to 09 September 2005 grew by $2.5 trillion, (a pace of $1 trillion per 802 trading days) during which time the price of Gold increased by 55%. Today (as previously noted), the money supply is increasing at a an average rate of $1 trillion per just 93 trading days, but terrifically under-owned Gold basically "ain't done squat" (technical term). Just in case yer scorin' at home. Speaking of scoring, the Economic Barometer's strength through November has run out of puff thus far in December as we see here: Notable Baro improvements from last week's set of 15 incoming metrics include November's Capacity Utilization and Building Permits amongst other higher housing measures; but the month's growth in Industrial Production slowed significantly, as did Retail Sales. And whilst December's New York State Empire Index marginally gained ground, the Philly Fed Index more than halved what November's had found. And oh yes, there was also wholesale inflation for November, the Producer Price Index recording an annualized pace of +9.6%: which makes the old riddle about "How many zeros can fit on a Zimbabwean banknote?" not as funny as once 'twas. But 'tis not to worry, the FOMC having just stated that "...Progress on vaccinations and an easing of supply constraints are expected to support continued gains in economic activity and employment as well as a reduction in inflation..." As to how many rising Baby Blue dots does a consistent trend make, let's turn to our two-panel graphic for Gold's daily bars from three months ago-to-date on the left and those for Silver on the right. The respective rightmost up turns from the -80% axes are generally harbingers of higher prices, (and to wit the MACD study for Gold earlier shown). But Friday's rejective price action does initially breed some cause for concern: "The M Word" crowd? The quadruple-witch? Both? We display, you assay: Next we've the 10-day Market Profiles for Gold (below left) and Silver (below right). To be sure, by this view Gold's infinite 1780s appear supportive, whereas poor ole Sister Silver's array is a congested display: Let's close with three mentions of inflation: â–  Dow Jones Newswires "reported" this past week that a factor in determining the duration of inflation is how we feel about it, which in turn shall guide the Fed's interest rate decisions; (folks are well-paid to write this stuff). Here's what we feel: be it cost-push or demand-pull or both, when the money supply increases 33% in less than two years, 'tis game over; â–  From the same creative bunch also came the notion that because increasing inflation effectively makes for negative real rates of interest, the FOMC by not (yet) voting to raise rates is therefore actually stimulating the economy. Yeah, we get that, but such rationale may be the biggest infatuative policy-wonk hot-air crush ever; â–  Speaking of which, here's an inflation-induced blast: we read that the rather wealthy Speaker of the U.S. House of Representatives is not supportive of a proposed ban on Congressional members from owning individual equities, her stating that "We’re a free-market economy": how's that for a 180° turn? (Maggie Thatcher, you don't know what you're missing). But don't you miss out in getting some Gold and Silver on the cheap before inevitably they leap. True, they had a rather feeble takeoff attempt this past week. But once they really get airborne, that'll be our kind of inflation, right there! Cheers! ...m... www.deMeadville.com www.TheGoldUpdate.com
Hong Kong Siblings Arrested Over $50 Million Crypto Money Laundering Scheme

Alibaba Stock News and Forecast: Why BABA stock keeps falling

FXStreet News FXStreet News 17.12.2021 14:41
BABA shares have fallen sharply on fears over delisting. Alibaba stock is now down at 5-year lows. $100 is the next major support as $110 is held for now. Alibaba (BABA) continues to suffer from repeated selling pressure as the original Chinese tech stock suffers backlash effects. Alibaba can be said to have set off the whole Chinese regulatory crackdown. Alibaba was due to spin off its payment subsidiary ANT Group about 14 months ago. The deal fell through, however, after Alibaba CEO Jack Ma appeared to question the Chinese hierarchy. This was the catalyst for a reexamination by China of its burgeoning tech space. Most notably, intense regulatory scrutiny focused on the huge amounts of data generated and stored by Chinese tech names. China saw this as a matter of concern over national security. DIDI was next in the crosshairs. It had IPO'd successfully in New York in early 2021. The stock had listed in New York in apparent defiance of Chinese officials. Once China set its sights on DIDI, panic soon ensued among Chinese tech investors, and BABA and others suffered contagion effects. The trend has been powerful with momentum completely vanishing. BABA shares are down 25% in the last three months, taking total losses for 2021 to 48%. Alibaba (BABA) chart, daily Alibaba (BABA) stock news Alibaba was once known as the Chinese Amazon, and for good reason. The company is still highly profitable. Revenues have grown from $158 billion in 2017 to $717 billion in 2021. This represents a growth rate of nearly 50% from 2020. Despite this, the share price is down a similar amount as mentioned. Gross profit grew 30% to March 2021. Revenue continued to grow as the Chinese tech bubble burst. Revenue is forecast to remain strong, growing by 22% in 2022 and 17% for 2023 and 2024. Revenue will, if those targets are met, have grown to $1.2 trillion by 2024. This represents a near doubling from current levels. Alibaba was hit with a heavy fine by the Chinese authorities after the ANT Group debacle. Investors had hoped the matter was finally settled, but the power of investor fear resurfaced once China restarted its scrutiny of US-listed names, this time with DIDI being the poster child. This fear is likely to remain elevated as Chinese and US tensions are unlikely to subside anytime soon. China is also not likely done with its crackdown and delisting plans for some of its tech names. This presents opportunities and challenges. BABA may be overvalued fundamentally with strong revenue growth, but momentum and fear are powerful factors. More important is uncertainty. Markets hate uncertainty, and that is currently the main headwind for Alibaba and other Chinese tech names. Alibaba (BABA) stock forecast Breaking support at $130 has led to an obvious fascination with $100. Before that, there is a last chance saloon support at $110. This is the September 2016 high. The daily chart has registered an oversold Relative Strength Index (RSI) reading. The Moving Average Convergence Divergence (MACD) has also crossed into bullish territory. A close above the 9-day moving average is needed to get short-term traders interested. Long-term players will need to see a move above $170. The short-term trend is bearish until the 9-day moving average is broken. The stock remains bullish in the short term on a break of $130 in our view. This is high risk, so please use stops. BABA 1-day chart
Dollar‘s Warning Signal

Dollar‘s Warning Signal

Monica Kingsley Monica Kingsley 20.12.2021 15:57
S&P 500 fading the FOMC rally went a bit too far – credit markets aren‘t panicking, so I doubt a fresh lasting downtrend is starting here. Chop, yes – the 4,720 area is proving a tough nut to crack, but it would be overcome. If there are two arguments in favor, it‘s the financials and HYG – the likely rebound in the former, and Friday‘s resilience in the latter. Given that Thursday‘s spurt to 4,750 evaporated so fast, I‘m not looking for a stellar year end. Positive given where we‘re trading currently, sure. Markets are now grappling with faster Fed tapering (which has opened the way to a rate hike in Q2 2022), getting slowly more afraid of fresh corona restrictions, and dealing with inflation that‘s not going anywhere. Outpacing wage growth, with real yields being deeply negative (no, 10-year Treasury yield at even 2% doesn‘t cut it – that‘s my 2022 target, by the way), the administration would be hard pressed in the year of midterms to counter the corrosive inflation effects on poll numbers. And the Fed expects to keep tightening when the real economy is already suffering from contracting liquidity as seen also in strengthening dollar? The central bank will have a hard time taming inflation, and in my view won‘t succeed – the persistently high inflation rates are going to be with us for years to come, and outpacing wages. Corona response is another uncertainty, and given the APT performance, the odds of seeing economic activity (just at a time when supply chains would need to keep working off prior setbacks) restricted, have increased. Similar to the recent high PPI reading, this is one more argument for why inflation isn‘t receding in the short run – not when demand isn‘t likewise being destroyed. As if consumer sentiment weren‘t struggling already... Still, equities are poised to extend gains in 2022, and I‘m looking for a volatile but positive year. 5,200 in Dec 2022 isn‘t out of the question – with large cap tech, financials and energy doing particularly fine. Real rates would remain negative, and precious metals would love the Fed slamming on the tightening breaks, and bringing back the punch bowl somewhat. If you look at the flattening yield curve, it‘s clear evidence of market fears (I call that certainty as that‘s what they excel at – the 1995 soft landing was a notable exception) of the Fed overdoing the tapering & rate hikes. Given all the inflation still ahead, and the expected fiscal-monetary policies working against each other (yes, more handouts), commodities would have another great year. So much for the big picture 2022 predictions. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 on the defensive, but the bullish case isn‘t lost. Some sideways trading of today‘s volatility is likely to preceed the upswing – we aren‘t rolling over to a 5-10% correction now. Credit Markets HYG retreat could have been a lot worse, and it‘s a good sign bonds aren‘t panicking. Just the junk ones would need to outperform the quality ones to drive a good stock market day. For now, bonds remains on guard. Gold, Silver and Miners Precious metals decided to make a measured upswing – this isn‘t a real reversal. Pressure to go higher is building up, and rates rising a little before the Fed moves, won‘t cut it. When liquidity conditions and corona fears ease a little, look for a much steeper upswing. Crude Oil Crude oil is trapped in the omicron uncertainty – quite resilient, which is a testament to the overwhelming pressure for prices to keep rising. Waiting for some fears to be removed before the fundamentals sink in again. Copper Copper is leaning to the bullish side of the spectrum – it certainly isn‘t disappointing. The low volume hints at little willingness to sell – an attempt to spike shouldn‘t be surprising next. Bitcoin and Ethereum Bitcoin and Ethereum weakness today is there, mirroring commodities – but the decline isn‘t in the disastrous category. Wait and see with a whiff of preliminary caution – that‘s all. Summary S&P 500 and oil are feeling the omicron response pinch – the worries boosted by Netherlands lockdown Sunday. Corona remains the wildcard, and markets are ignoring its relatively mild symptoms while focusing on case count. Tech is likely to do better than most of value while yields aren‘t pressured to rise fast. For a moment, inflation is receding from the spotlight, but I‘m looking for it to come back. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Moderna Inc Stock Price and Forecast: MRNA says its booster dose appears to protect against omicron

Moderna Inc Stock Price and Forecast: MRNA says its booster dose appears to protect against omicron

FXStreet News FXStreet News 20.12.2021 16:10
Moderna (MRNA) says a booster dose of its vaccine appears to protect against omicron. Moderna (MRNA) shares boosted themselves, up 7% premarket. Moderna (MRNA) stock has reversed the post-earnings slide. Moderna (MRNA) is back to pre-earnings levels as the emergence of the omicron variant and its effect flows through to multiple vaccine makers. Booster rollouts are ongoing globally and the spread of the new variant is causing new restrictions to be put in place in many European countries. Moderna shares have now retraced back to where they were on November 4, just before a disappointing earnings release. Now, this next phase will be crucial. Can traders push Moderna (MRNA) higher or will longer-term investors hold sway and take a second opportunity for more selling. Moderna (MRNA) stock news The White House has chimed in on the latest covid news as it struggles to cope with the omicron variant. It released an unusually strong statement on Friday urging continued vaccination. "Our vaccines work against Omicron, especially for people who get booster shots when they are eligible. If you are vaccinated, you could test positive. But if you do get COVID, your case will likely be asymptomatic or mild. We are intent on not letting Omicron disrupt work and school for the vaccinated. You’ve done the right thing, and we will get through this. For the unvaccinated, you’re looking at a winter of severe illness and death for yourselves, your families, and the hospitals you may soon overwhelm. So, our message to every American is clear: There is action you can take to protect yourself and your family. Wear a mask in public indoor settings. Get vaccinated, get your kids vaccinated, and get a booster shot when you’re eligible". Here is the link for you to verify the statement. Moderna (MRNA) this morning announced that its authorized booster shot increases omicron neutralizing antibodies approximately 37 fold. The Centre for Disease Control (CDC) had on Friday backed mRNA vaccines over JNJ. Also on Friday Bloomberg reported that researchers from the University of Washington and Humbas Biomed produced results from a study showing limited antibody response against omicron from Sinopharm, Sputnik and JNJ covid vaccines. The study is pre-print and not peer-reviewed. Moderna (MRNA) stock forecast The emergence of omicron had already stabilized losses in Moderna (MRNA) stock and resulted in a higher high on November 29 and a lower low on December 10. The news of this booster effectiveness will see more gains for MRNA shares. November 29 resistance at $376 will be the first target. But in reality, this zone from $320 to $350 (highlighted below) is a resistance zone with decent volume. The spike high in late November was just when news of omicron began to surface and investors rushed back to covid vaccine stocks. Equity markets then began to discount its effect and MRNA slid back. But crucially it set a higher low. We expect further gains here. The RSI has plenty of room to run and yet to signal a significant move. The MACD had already crossed bullishly so more is expected. Breaking above $376 will see a test of $420 to $450. Key supports are the 200-day moving average t $268 and the Dec 10 low at $233. Moderna (MRNA) chart, daily
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Crypto market in shambles as BTC consolidates

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Crypto market in shambles as BTC consolidates

FXStreet News FXStreet News 20.12.2021 16:10
Bitcoin price slides lower, hinting at a retest of the 50 weekly SMA at $44,778. Ethereum price prepares for a 16% breakout from the falling wedge pattern. Ripple price could see an 11% ascent to $0.96 as it prepares for a second leg-up. Bitcoin price is moving sideways, trapped between crucial weekly moving averages. This consolidation has had a positive knock-on effect on Ethereum price which is setting up a bullish pattern ready for a breakout. Ripple, on the other hand, has already embarked on a climb and is preparing for its second leg-up. Bitcoin price anticipates short-term losses Bitcoin price is in a slow downtrend and looking to retest the 50-week Simple Moving Average (SMA) at $44,778. While this development will see BTC shed roughly 3%, it could result in a bounce, triggering a bullish outlook. A successful bounce off the said SMA will open the path to retest the 21-week SMA at $51,256 and, in a highly bullish case, the $53,709 resistance level. If the bid orders continue to pour in, the pioneer crypto is likely to continue its ascent and tag the $57,845 barrier. Regardless, investors need to note that this bullish outlook is contingent on a successful bounce off the 50-week SMA at $44,778. BTC/USD 1-day chart If Bitcoin price slices through the SMA at $44,778, there is a good chance it will continue its descent to $40,596 to collect the liquidity resting below it. A daily close below $44,778 will invalidate the bullish thesis detailed above. Ethereum price eyes higher highs Ethereum price has been outlining a falling wedge pattern since November 28. This technical formation is obtained by connecting the three lower lows and four lower highs formed during this period using trend lines. The setup forecasts a 16% upswing, obtained by adding the distance between the first swing high and swing low to the breakout point at $3,912, which puts ETH at $4,533. Assuming Ethereum price can bounce off the 70.5% retracement level at $3,780, this run-up would constitute a 20% ascent. Therefore, investors need to keep a close eye on the reversal of the retracement. ETH/USD 4-hour chart On the other hand, if Ethereum price shatters the $3,780 and $3,740 barriers, it is likely to head lower to retest the range low at $3,669. A four-hour candlestick close below this level will create a lower low, invalidating the bullish thesis. Ethereum price must reclaim $4,200 as support to resume bull run Ripple price vies to keep going higher Ripple price consolidated around the $0.837 resistance barrier for more than a week. The increased buying pressure resulted in an 11% spike in XRP price, pushing it to set up a potential swing high at $0.917. While the initial surge was noticeable, investors can expect XRP price to retrace before triggering another rally. The 0.837 support level will likely be tagged again soon. Assuming this occurs, market participants can expect Ripple price to climb 12% to retest the $0.936 hurdle. In some cases, XRP price might extend this advance to collect the liquidity resting above $0.980 or $1.018 hurdles. XRP/USD 4-hour chart While things are looking up for Ripple price, a breakdown of the $0.837 support level will indicate weakness among buyers. In this case, XRP price will probably dip below the $0.749 demand barrier to collect the liquidity resting there. A daily close below this level will indicate buyers are unwilling to push the price higher and invalidate the bullish thesis for the remittance token. XRP price looks primed for a break out to $1.75
Tension Beetween Ukraine And Russia Definetely Shaped News In Recent Days

Intraday Market Analysis – AUD Struggles To Bounce - 21.12.2021

John Benjamin John Benjamin 21.12.2021 07:56
AUDUSD sees limited rebound The Australian dollar softens over dovish RBA meeting minutes. The pair has met stiff selling pressure near the 30-day moving average (0.7220). On the hourly chart, a bearish MA cross and a break below 0.7100 indicate weakness in the latest rebound. An oversold RSI may cause a brief rally, but the bears may sell into strength around 0.7160. 0.7050 at the base of the initial breakout is an important support. A lack of bids could send the Aussie to 0.6990 with the reversal attempt at stake. XAGUSD to test demand area Silver drops as the US dollar inched higher across the board. A bullish RSI divergence suggests a loss of momentum in the sell-off. Then the recent surge has broken above multiple levels of resistance, prompting the short side to cover some of their bets. However, the bulls may need to defend their gains after the initial push overextended. The demand zone between last September’s low (21.40) and 21.80 is critical in keeping the rebound valid. 22.65 is now a fresh resistance before a full-blown recovery could materialize. US 30 struggles for support The Dow Jones retreated as major countries imposed curfews ahead of the holiday season. Following a double top under 36200, a drop below 35450 has broken buyers’ attempt to resume the rally. The index is struggling to hold above the base of the December recovery (34800) which coincides with the 61.8% Fibonacci retracement level of the rally from 34000. Buyers will need to lift 35620 before they could attract followers’ attention. 34000 is the daily support to safeguard the bullish bias in the medium-term.
Santa Rally Time

Santa Rally Time

Monica Kingsley Monica Kingsley 21.12.2021 16:05
S&P 500 made a first step towards the turnaround higher in the opening part of this week. Fading the rally is being countered, and yesterday‘s omicron policy response fears are being duly reversed. For the time being, Fed‘s liquidity is still being added – the real wildcard moving the markets, is corona these days. Credit markets are in the early stages of heralding risk-on appetite as returning. As stated yesterday when mentioning my 2022 outlook: (…) Fading the FOMC rally went a bit too far – credit markets aren‘t panicking, so I doubt a fresh lasting downtrend is starting here. Chop, yes – the 4,720 area is proving a tough nut to crack, but it would be overcome. If there are two arguments in favor, it‘s the financials and HYG – the likely rebound in the former, and Friday‘s resilience in the latter. Given that Thursday‘s spurt to 4,750 evaporated so fast, I‘m not looking for a stellar year end. Positive given where we‘re trading currently, sure. Markets are now grappling with faster Fed tapering (which has opened the way to a rate hike in Q2 2022), getting slowly more afraid of fresh corona restrictions, and dealing with inflation that‘s not going anywhere. Outpacing wage growth, with real yields being deeply negative (no, 10-year Treasury yield at even 2% doesn‘t cut it – that‘s my 2022 target, by the way), the administration would be hard pressed in the year of midterms to counter the corrosive inflation effects on poll numbers. And the Fed expects to keep tightening when the real economy is already suffering from contracting liquidity as seen also in strengthening dollar? The central bank will have a hard time taming inflation, and in my view won‘t succeed – the persistently high inflation rates are going to be with us for years to come, and outpacing wages. … Similar to the recent high PPI reading, this is one more argument for why inflation isn‘t receding in the short run – not when demand isn‘t likewise being destroyed. As if consumer sentiment weren‘t struggling already... For now, the year end squaring the books trading can go on, and positive Santa Claus seasonality can make itself heard still. The crypto turn that I had been looking for on the weekend, is happening with strength today. Likewise the oil and copper recovery spilling over into silver, and the reasonably good performance returning to many value stocks too. Very constructive action. In short, the bulls have a good rebound opportunity into Christmas. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 is waking up, and odds are the move would bring it back above the 50-day moving average. Looking at the volume, it‘s as if fresh sellers were nowhere to be found. Credit Markets HYG made an attempt to come back, and comparing it to the quality end of the bond spectrum results in a good impression – one of risk-on return approaching. Gold, Silver and Miners Precious metals downswing isn‘t to be taken too seriously – odds are strong that gold and silver would ride the risk-on return with gains added. It‘s about liquidity not being withdrawn by the market players. Crude Oil Crude oil recoved from the omicron uncertainty – to a good degree, which is a testament to the overwhelming pressure for prices to keep rising. The $72 area setback could be coming back into play still this week, if nothing too surprising happens. Copper Copper is leaning to the bullish side of the spectrum, driven not only by positive fundamentals and Chile elections. The low volume indeed hinted at little willingness to sell – so, let‘s look for a good attempt to rise next. Bitcoin and Ethereum Bitcoin and Ethereum weakness is being decisively rejected, mirroring commodities – the decline indeed hasn‘t been in the disastrous category. The bulls clearly want to move. Summary S&P 500 and oil are rebounding from the omicron response pinch – and it‘s good we see cryptos doing the same. Corona wildcard has calmed down a little, and market breadth is making baby steps to improve. In this environment, high beta assets look poised to erase prior setbacks a little faster today, and can keep those gains unless a fresh bad headline strikes. One more tailwind – at least when it comes to real assets, for sure – is inflation coming back to the spotlight, which is what we‘ll have to wait for some more time still. But it‘ll happen. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Bitcoin’s bullish time cycle alignment

Bitcoin’s bullish time cycle alignment

Korbinian Koller Korbinian Koller 22.12.2021 09:32
Typically, various time frames perform better or worse for a trader at different times due to cycle overlaps. Having multiple trades on simultaneously from different time frames is typically an excellent hedge. This way, one can catch the specific trading instruments’ various shorter and longer-term trends. BTC in US-Dollar, Quarterly Chart, patience pays: Bitcoin in US-Dollar, quarterly chart as of December 21st, 2021. Typical mistakes are either an early entry or a chased trade and getting out too early of a steady trend. These behaviors have to do with pleasure-seeking and pain avoidance motivation. With the chart above in mind, most pass if presented with an opportunity where rewards are paid out in ten years. Wealth preservation, which we are after, should have nothing else in mind—long-term protection with a low-risk profile and a solid performance. The chart presented above is our most conservative view of the future for bitcoin, both in price and time. Meaning, it would come as no surprise to us if much higher price levels are achieved in a much shorter period of time. Yet, we tend to estimate typically very conservative to keep emotions like greed in check. BTC in US-Dollar, Weekly Chart, Bitcoin’s bullish time cycle alignment: Bitcoin in US-Dollar, weekly chart as of December 21st, 2021. The percentage gain numbers of the previous chart assume the worst possible purchase price, which is an all-time high. If we purchase bitcoin right now or prices below recent trading prices, these numbers already drastically change. Meaning, while our pain-avoiding emotional motivators direct us in declining markets to sell, it is principle-based if you have statistically high probability models over the long term to instead think about purchasing bitcoin. As indicated in the weekly chart above, we see a window of opportunity for entries based on our quarterly chart exit time horizon. Scenario A, the more aggressive position-taking, is in a process already at the release of this chart book. Nevertheless, there is a probability that prices could decline as far as US$40,000, and low-risk entry spots within the price decline to such lower levels would be as a scenario B welcome just as well. Should prices penetrate below the US$40,000 level, a regrouping would be required before new entries could be discussed. BTC in US-Dollar, Daily Chart, Position building in motion: Bitcoin in US-Dollar, daily chart as of December 21st, 2021. Assuming entries here in our entry zone between US$47,000 and US$40,000 and exits in our first chart of this chart book, a bitcoin investment next to be an insurance play against troubled fiat currencies could provide a profit near a thousand percent. The daily chart above has marked days and entry prices of three trades we posted live in our free Telegram channel in the last five days. We took partial profits based on our quad exit strategy within hours of entry. Consequently, eliminating the original stop risk of less than a percent to zero risk. With a risk-reward ratio of 1:1000, we find it reasonable to sit through a few years with the remainder position size for sizeable rewards. Bitcoin’s bullish time cycle alignment: Some of the worst mistakes in history were made based on the shortsightedness not to think long term. As creative and inventive a species, we cannot help but follow emotions that often do not have our own best interest in mind. One such emotion is instant gratification. It seems almost a burden to wait for being rewarded patiently. Yet, it is this discipline one needs to be a successful trader. First, you need the patience to not always be too early with one’s entry in a trade not to catch a falling knife. Then you require the patience not to chase a trade if you missed it.  Instead, wait for a later chance to get another low-risk entry spot or to pass up on the trade altogether. And foremost, once finding yourself in a good trade, it is imperative to sit on your hands and let the trade mature to full profits. The higher the time frame of your play is, the harder this test of your patience becomes.Remedies are good planning, consistent reviewing of a plan, rigorously following it, and employing an exit strategy suitable to your psychology (see our quad exit strategy). Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|December 21st, 2021|Tags: Bitcoin, Bitcoin bounce, Bitcoin bullish, bitcoin consolidation, crypto analysis, Crypto Bull, crypto chartbook, DeFi, low risk, quad exit, technical analysis, trading education|0 Comments About the Author: Korbinian Koller Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
Intraday Market Analysis – Gold In Limited Pullback

Intraday Market Analysis – Gold In Limited Pullback

John Benjamin John Benjamin 22.12.2021 08:40
XAUUSD seeks support Gold softens as the US dollar edged higher. A surge above 1788 and then 1808 has prompted the bears to cover. The precious metal is looking for support after the breakout stalled with an overextended RSI. A bearish MA cross may weigh on short-term sentiment. The base of the initial breakout around 1770 is a key support. A deeper correction would lead to the daily support at 1753, a critical level to keep the rebound relevant. Gold may climb towards 1850 if the bulls succeed in pushing above 1814. USDCAD consolidates gains The Canadian dollar recouped some losses after better-than-expected retail sales. A break above the major daily resistance at 1.2930 has put the bulls back in control of the direction. The RSI’s repeated overbought situation may cause a temporary pullback. Trend followers would be looking to jump in at a better price. 1.2880 is the closest support. Sentiment would remain upbeat as long as price action is above 1.2770. A rally above the intermediate resistance at 1.2960 may trigger an extended rally towards 1.3200. UK 100 makes a bullish attempt The FTSE 100 recovered some ground after the Omicron sell-off. The index has found solid buying at 7110. An oversold RSI has attracted a buying-the-dips crowd. A tentative break above 7300 suggests strong interest in keeping the market afloat. A bullish MA cross could lead to an acceleration on the upside. 7385 is a major hurdle on the daily chart. Its breach could cause a runaway rally and resume the uptrend. On the downside, 7250 is the first support, and 7110 is the second line of defense in case of weakness.
When All Is Said and Done

When All Is Said and Done

Monica Kingsley Monica Kingsley 22.12.2021 15:56
S&P 500 duly rallied on broad strength, and credit markets performance bodes well for all risk-on assets. Now a little consolidation after yesterday‘s steep gains is ahead, but I don‘t see it as derailing future gains. The stock bull run isn‘t over, and doesn‘t need the infrastructure bill for its further advance, price action shows. The VIX is calming down, now around 21 with further room to decline still – at least as far as the remainder of 2021 is concerned. Commodities remain in rally mode after the recent correction, and crude oil sending a bullish message (and not one of fear) is a welcome sign. The same goes for copper moving in sync with the rest of the commodities – and that has positive implications for silver too. Precious metals though still remain a patience trade, where the risks of being out of the markets outweight those of being in – it‘s a bet on the Fed making a wrong tapering / tightening move – with the market figuring out so beforehand. It sure would come as the compressing yield spreads reveal that is the greatest fear, but we aren‘t there yet. Finally, cryptos cautious mood today illustrates the certainly less exciting session just ahead than was the case yesterday. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 has woken up, and indeed surpassed the 50-day moving average. The lower volume isn‘t an issue, but a little consolidation is ahead today – not a steep rally continuation. Credit Markets HYG jumped higher in a giant risk-on nod that is further confirmed by the quality bonds performance. Again, I‘m looking for a little consolidation here today as well. Gold, Silver and Miners Gold downswing isn‘t to be taken at all seriously – I‘m looking for more gains in both the yellow and white metals, at their own and relatively slow pace. The countdown to Fed policy mistake and inflation returning to the limelight, is on. Crude Oil Crude oil scored a nice upswing, oil stocks confirmed as well the return of strength into the stock market, and both black gold and S&P 500 can keep rising together over the next days. Chances are the $72 area setback could be coming back into play still this week. Copper Copper keeps agreeing with the risk-on turn, and is certainly primed to go much higher over the nearest weeks and months. Similarly to uranium, I remain bullish on the sector, especially since copper, silver, nickel and lithium are all green economy preconditions. Bitcoin and Ethereum Bitcoin and Ethereum time to consolidate yesterday‘s gains, is here – and I‘m not looking for a bullish picture based on Ethereum performance. Sideways to a little down, that‘s the most likely outcome before the bulls move again. Summary Consolidation of yesterday‘s steep S&P 500 and commodity gains is ahead for today, but the Santa Claus rally is by no means over. Even if oil and cryptos hesitate a little, the constructive message from bonds and copper is overpowering that in my view. As explained in detail within the opening part of today‘s analysis, the bulls have to odds to keep moving – and will likely take advantage thereof before the year is over. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Crypto markets might pause before the uptrend catches traction

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Crypto markets might pause before the uptrend catches traction

FXStreet News FXStreet News 22.12.2021 16:07
Bitcoin price swept the liquidity resting above $49,527 and edged closer to retesting the $50,000 psychological level. Ethereum price could see a brief correction to solidify its breakout from the falling wedge pattern. Ripple price remains strong as it sets up a higher high, indicating a retest of $1 is likely. Bitcoin price is hovering around a crucial level after collecting liquidity above it. This development over the past 48 hours indicates that BTC will consolidate here before continuing its ascent. Ethereum and Ripple follow the pioneer crypto closely and show promise of gains soon. Bitcoin price faces a decisive moment Bitcoin price sliced through Monday’s high at $47,565 and collected the liquidity resting above $49,527. While BTC might head higher and retest the $50,000 psychological level, investors need to pay attention to the possibility that the big crypto might slide lower and sweep Monday’s low at $45,550. If buyers resist booking profits, there is a high chance BTC will retest $50,00 and make a run for last week’s high at $50,0835. In some cases, Bitcoin price might extend to the $53,618 resistance level. In total, this run-up would constitute an 8.6% ascent. BTC/USD 3-hour chart Increased profit-taking from holders could undo the gains seen over the past 48 hours. This development could knock BTC down to Monday’s lows at $45,550 or sweep last week’s lows at $45,438. Ethereum price needs to solidify its stance Ethereum price action since November 28 set up a falling wedge pattern. This setup is obtained by connecting the three lower lows and four lower highs formed during this period using trend lines. The technical formation forecasts a 16% upswing, obtained by adding the distance between the first swing high and swing low to the breakout point at $3,912, which puts ETH at $4,533. So far, ETH has broken out of this pattern and crawled closer to retest the $4,155 resistance barrier. Initially, however, investors can expect a retracement to $3,912 or the 62% retracement level at $3,823. A bounce from these barriers will solidify the breakout and indicate that a 16% ascent to $4,535 is likely. ETH/USD 4-hour chart Regardless of the bullish pattern, if Ethereum price produces a lower low below $3,669, coinciding with the low of the trading range, it will invalidate the bullish thesis. In this case, ETH could revisit the $3,415 support floor. Ethereum price must reclaim $4,200 as support to resume bull run Ripple price remains strong Ripple price pierced through the declining trend line on December 18 and has rallied 19% to set up a swing high at $0.971. This run-up, while impressive, could extend to retest the $1.015 resistance level. In a bullish case, the XRP price could tag the $1.102 hurdle and collect the liquidity resting above it. However, it is unlikely that the remittance token will continue this ascent, especially since BTC might undergo a minor retracement. XRP/USD 4-hour chart Due to the correlation between the two, XRP price might follow the big crypto and undergo a correction. Moreover, the 19% ascent seen so far has collected the liquidity in its immediate vicinity and is likely to undergo a minor retracement. If this downswing pushes Ripple price below $0.688, it will create a lower low, invalidating the bullish thesis. XRP price looks primed for a break out to $1.75
GBPUSD arouses interest, EURUSD is consolidating near June 2020's lows

GBPUSD arouses interest, EURUSD is consolidating near June 2020's lows

John Benjamin John Benjamin 23.12.2021 08:53
EURUSD tests resistance The US dollar stalled over improved risk appetite. The pair is consolidating near June 2020’s lows. A bearish breakout would further extend the downtrend. The euro so far has found buyers at 1.1235. The bulls need to lift offers around 1.1360, the upper band of the recent consolidation range, before they could hope for a reversal. An extended rally may send the price to 1.1460. In the meantime, the RSI’s overbought situation could briefly limit the bullish push as intraday traders take profit near the resistance. GBPUSD makes a bullish attempt The sterling surged after Britain’s economy showed solid growth in Q3. A previous rebound to the supply zone near 1.3370 has put pressure on the short side. Then the pound found bids at 1.3170. Four attempts at this key support suggest a strong interest in keeping the price steady. 1.3370 is a major hurdle as it coincides with the 30-day moving average. A breakout could initiate a bullish reversal and propel the pound to 1.3500. An overbought RSI may cause a short pullback with 1.3240 as the closest support. USOIL awaits breakout WTI crude found support from a larger-than-expected decline in US inventories. Price action saw active buying above 66.00, keeping the early December rally valid in the process. The latest rebound is testing the supply zone around 73.30, which sits along the 30-day moving average. A close above this area of interest would force the bears to cover, paving the way for a rally towards 78.00. On the downside, 71.00 is the immediate support. And 68.50 is a second line of defense in case of a deeper correction.
Still More to Come

Still More to Come

Monica Kingsley Monica Kingsley 23.12.2021 15:34
S&P 500 Santa rally goes on, and risk-on markets rejoice. What a nice sight of market breadth improvement, and confirmation from bonds. Financials and industrials are lagging, but real estate, healthcare and tech are humming smoothly. As I told you yesterday about volatility: (…) The VIX is calming down, now around 21 with further room to decline still – at least as far as the remainder of 2021 is concerned. We got the lower values, and today is shaping up to look likewise constructively for the bulls across both paper and real assets. Yesterday‘s dollar decline has helped as much as well bid bonds. Inflation expectations aren‘t yet doubting the Fed, there is no more compressing the yield curve at the moment, so it‘s all quiet on the central bank front. That‘s good, the Santa rally can go on unimpeded. Precious metals are peeking higher in what looks to be adjustment to the lower yields and dollar, and commodities upswing remains driven by energy, base metals and agrifoods. Cryptos hesitation may hint at slimmer gains today than was the case yesterday when instead of a brief consolidation, we were treated to improving returns. Merry Christmas if you‘re celebrating – and if not, happy holidays spent with your closest ones. Let the festive season and message of the Prince of Peace permeate our hearts and inspire the best in mankind. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 rally goes on, and the 4,720s are again approaching. Market breadth isn‘t miserable in the least, and the riskier end of the bond spectrum looks positive even if larger time frame worries haven‘t gone away. Classic Santa Claus rally. Credit Markets HYG keeps jumping higher – the risk-on sentiment is winning this week. A bit more strength from LQD would be welcome, but isn‘t an obstacle to further stock market gains. Gold, Silver and Miners Gold downswing indeed weren‘t to be taken at all seriously – solid gains across precious metals followed. I‘m expecting a not too rickety ride ahead as the metals keep appreciating at relatively slow pace. Crude Oil Crude oil extended gains, and even if oil stocks paused, downswing in black gold isn‘t looming. Importantly, the $72 area has been overcome – the bulls should be able to hold ground gained. Copper Copper keeps tracking the broader commodities rally, and isn‘t outperforming yet. The red metal‘s long consolidation goes on, and a breakout attempt on par with early Oct seems to be a question of quite a few weeks (not days) ahead. Bitcoin and Ethereum Bitcoin and Ethereum are still consolidating Tuesday‘s gains – the performance is neither disappointing nor stellar. Both cryptos don‘t look to be in the mood for a break below Dec lows. Summary If not yesterday, then probably today we‘ll get a little consolidation of prior two day‘s steep S&P 500 and commodity gains (copper says) – the positive seasonality hasn‘t spoken its last word. HYG posture has significantly improved, and that bodes well for short-term gains still ahead before we dive into market circumstances turning increasingly volatile towards the end of Q1 2022. For now, let‘s keep celebrating – Merry Christmas once again – and enjoying the relatively smooth ride. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Gold along the year

Gold along the year

Mark Mead Baillie Mark Mead Baillie 27.12.2021 09:49
The Gold Update by Mark Mead Baillie --- 632nd Edition --- Monte-Carlo --- 25 December 2021 (published each Saturday) --- www.deMeadville.com Christmas Greetings to Everyone Everywhere. With but five trading days remaining in 2021, Gold -- as we'll show -- traditionally is the gift that keeps on giving into year-end. But first, we've this: The last time 25 December arrived on a Saturday was 11 years ago in 2010: â–  'Twas the date of Gold Update No. 58; today we're penning No. 632; â–  The price of Gold then was 1379; today 'tis 1810, (+31%) â–  The U.S. money supply ("M2" basis) then was $8.9 trillion; today 'tis $21.6 trillion, (+2.4x) â–  The supply of Gold then was 173.7 tonnes; today 'tis 202.8 tonnes, (+17%). Query, (courtesy of the "Fun With Numbers Dept."): Given across these past 11 years the +2.4x increase in the U.S. money supply, even as tempered for the duly noted +17% increase in the supply of Gold itself, ought its price nonetheless now be 2747? After all, currency debasement is the ultimate, primary driver of price, lagging as 'tis been. Further by the above opening Gold Scoreboard which comprehensively accounts for 41 years of currency debasement, more than double present price is Gold's valuation today of 4030! Thus analogous in reprising the infamous query of immortal football coach Vince Lombardi: "What da hell's goin' on out dere??" 'Course, you regular readers of The Gold Update know exactly what's goin' on out dere. 'Tis "The Age of the Shiny Object". Why purchase Gold -- as stated just +31% from this day of days 11 years ago -- when by merely owning the S&P 500 itself you've recorded a gain over same of +276%? Better still, how about your cryptocrap with its gains of +∞%? But wait, there's more: How are those NFTs workin' out for ya? (We think of them ultimately as "non-fundable tokens"). Then, too, is "The M Word" crowd: "Churn it and burn it, baby!" Or as Carly Simon might have sung it from back in '71: "Manipulation..." Regardless, with the S&P now at an all-time "Santa Claus Rally" closing high of 4726 (thank you record level of stock buybacks), Stoopid is sleeping securely because should the market dip from here, it always comes back, right? Arithmetically that's been undeniably true. Undeniably true as well by its historical track is the S&P's price/earnings ratio (our "live" read now 49.5x) having always returned to its median (at present 20.4x since the Index's inception nearly 65 years ago on 04 March 1957). So here's the crux: we've already accounted that year-over-year earnings' increases from a "shutdown 2020" to an "open 2021" were not sufficient enough to materially boost the "E" of the P/E such as to mitigate the ever-rocket-boosted "P". Therefore: the next reversion of the P/E to its 20.4x median essentially requires a move of the S&P from today's 4726 level down to 1948, (i.e. a -58.8% "dip"). But Stoopid worries not: "Been there, done that, it always comes back." Even as this time 'round rates rise, in turn ramping up that variably-priced interest on Stoopid's fully drawn credit cards. "Got Gold?" For which there is some good news, both aft and ahead. â–  Aft - Whilst during each of this past Monday, Tuesday and Wednesday Gold dealt with dilly-dallying 'round as usual in the 1780s, price finally saw its way clear to close on Thursday above 1800, its first weekly settle north of said number since that ending 19 November. â–  Ahead - Per this missive's title, 'tis time for Gold's annual finale rally, (our now pointing that out meaning it shan't occur). But it being a festive day, let's stay positive as traditionally is Gold's wont through the final five trading days of the year. For as the following table displays, Gold during this stint has risen in 17 of the 20 completed years thus far this millennium. We thus anticipate that for this 21st year of the 21st century, Gold shall be higher in a week's time than today's 1810 level: That is a statistical gift. Now here's one that is technical: The above graphic depicts Gold's daily "price oscillator" (a mainstay of the website's Market Rhythms page) during 2021's fourth quarter-to-date. The rightmost wee blue nub just crossed to positive, the trader's signal thus being to get Long Gold. The prior 12 such Long signals (dating back to 27 March 2020) saw upside price follow-throughs averaging as much as +77 points which in that vacuum from 1810 would be to 1887, the more conservative median being +31 points to 1841. No guarantees 'natch, but nicely on time to synch with Gold's annual finale rally should it come to pass. Meanwhile, unsurpassed for better than three years until just now is the current level of the Economic Barometer, which with but a week to run in 2021 saw this past week's set of 13 incoming metrics move the Baro to its highest oscillative level since 31 July 2018. Yes, there were a few weak links in the data: Q3's Current Account Deficit sagged to its worst level since Q3 2006; and although the quarter's final read on Gross Domestic Product increased to an annualized "growth" rate of +2.3%, that was more than double-mitigated by the party-pooper Chain Deflator being finalized at a +6.0% "growth" rate. (For you WestPalmBeachers down there, that basically means there is no real GDP "growth", but rather "stagflation"; look it up). Too, increases slowed in November's Personal Income and Spending. But highlighted were improvements in November's New and Existing Home Sales, Durable Orders and (not surprising should you follow the Baro) the Conference Board's Leading (i.e. lagging) Indicators. 'Course the real stinker was the Fed's favoured inflation read of Core Personal Consumption Expenditures coming in at an annualized pace of +6.0%. But, perhaps folks "just don't get it yet" given the level of Consumer Confidence (also per the Conference Board) rising in December to a five-month high. Here's the whole view: With respect to the Baro's having re-attained the noted 2018 level, 'twas after that the S&P 500 then declined into the year's Christmas Eve by -16.5%. Not that history shall repeat same going into next year: we anticipate worse -- far worse -- either by our "Look Ma, No Earnings!" crash (per the aforementioned P/E assessment), and/or by Federal Reserve Vice Chair Nominee Lael "The Brain" Brainard's "Climate Change!" crash. Also there's now ever-increasing amount of "Oh My! Omicron!" Still, upward economic gains along with increasing inflation strains both serve justice for the Fed to commence raising its Bank's Funds rate as early as 26 Jan. Which in turn means you'll have somewhere else to park your dough when the stock market doth over the cliff go. Get ready for "The Return of the Savings Account!" In theatres next Spring. 'Course far better than that, again: "Got Gold?" And don't forget Silver too! All so stated, New York FedPrez John "It's All Good" Williams looks to the Fed's rate rises as an economic positive -- which to his credit -- has historically synched with the beginning of higher interest rates. And perhaps more costly money can be withstood, Dow Jones Newswires this past week having referred to U.S. household wealth as "vast". Indeed per a year-old survey from the Fed, the median StateSide household wealth level is $122,000. (Admittedly, we did not dig sufficiently deep into the data to divulge if that includes proceeds from the aforementioned fully-drawn credit cards). Next let's fully draw our two-panel graphic of Gold's daily bars from three months ago-to-date on the left and the 10-day Market Profile on the right. Especially encouraging therein are Gold's "Baby Blues" penetrating up through their 0% axis in confirming the regression trend having rotated to positive. And the Profile shows the most dominant trading level of the past two weeks as (no surprise) 1787: With the same drill for Silver, we see her "Baby Blues" (below left) in accelerating ascent, albeit the low 23s may be a sticky wicket there. Still, her Profile (below right) appears supportive for the mid-to-lower 22s, (and happy winkies to you too there, Sister Silver): Time to wrap it up from here with this note: it again appears The World Elites' Economic Forum in Davos is being "deferred", the great convening over The Great Reset to instead take place toward early summer. Bit of an economic inflow delay there for little ole Switzerland, but we have it on well-vetted authority they'll manage. The small alpine nation may rank just 135th by size and 101st by population. But it ranks seventh in total Gold holdings and far and away first in per capita Gold wealth: there is one tonne of Gold for every 8,322 people which (in sparing you the math) is $7,672 per Swiss resident. (Italy is a distant second at $2,589). "And Season's Greetings to you, mmb!" Thank you, Squire, and our very best to you 'n yours, all the little Squires down the line, and absolutely as well to our star readers right 'round the world! Everyone take care, and don't forget the real star: Gold! Cheers! ...m... www.deMeadville.com www.TheGoldUpdate.com
Is the End of Transitory Inflation the End of Gold Bulls?

Is the End of Transitory Inflation the End of Gold Bulls?

Arkadiusz Sieron Arkadiusz Sieron 24.12.2021 11:18
The debate about the nature of inflation is over. Now the question is what the end of transitory inflation implies for gold. I offer two perspectives. Welcome, my son. Welcome to the inflationary machine. Welcome to the new economic regime of elevated inflation. That’s official because even central bankers have finally admitted what I’ve been saying for a long time: the current high inflation is not merely a transitory one-off price shock. In a testimony before Congress, Jerome Powell agreed that “it’s probably a good time to retire” the word “transitory” in relation to inflation. Bravo, Jay! It took you only several months longer than my freshmen students to figure it out, but better late than never. Actually, even a moderately intelligent chimpanzee would notice that inflation is not merely temporary just by looking at the graph below. To be clear, I’m not predicting hyperinflation or even galloping inflation. Nor do I claim that at least some of the current inflationary pressures won’t subside next year. No, some supply-side factors behind recent price surges are likely to abate in 2022. However, other drivers will persist, or even intensify (think about housing inflation or energy crisis). Let’s be honest: we are facing a global inflation shock right now. In many countries, inflation has reached its highest rate in decades. In the United States, the annual CPI rate is 6.2%, while it reached 5.2% in Germany, 4.9% in the Eurozone, and 3.8% in the United Kingdom. The shameful secret is that central banks and governments played a key role in fueling this inflation. As the famous Austrian economist Ludwig von Mises noticed once, The most important thing to remember is that inflation is not an act of God; inflation is not a catastrophe of the elements or a disease that comes like the plague. Inflation is a policy — a deliberate policy of people who resort to inflation because they consider it to be a lesser evil than unemployment. But the fact is that, in the not very long run, inflation does not cure unemployment. Indeed, the Fed and the banking system injected a lot of money into the economy and also created room for the government to boost its spending and send checks to Americans. The resulting consumer spending boom clogged the supply chains and caused a jump in inflation. Obviously, the policymakers don’t want to admit their guilt and that they have anything to do with inflation. At the beginning, they claim that there is no inflation at all. Next, they say that inflation may exist after all, but is only caused by the “base effect”, so it will be a short-lived phenomenon that results solely from the nature of the yearly comparison. Lastly, they admit that there is something beyond the “base effect” but inflation will be transitory because it’s caused only by a few exceptional components of the overall index, the outliers like used cars this year. Nothing to worry about, then. Higher prices are a result of bottlenecks that will abate very soon on their own. Later, inflation is admitted to be more broad-based and persistent, but it is said to be caused by greedy businesses and speculators who raise prices maliciously. Finally, the policymakers present themselves as the salvation from the inflation problem(that was caused by them in the first place). Such brilliant “solutions” as subsidies to consumers and price controls are introduced and further disrupt the economy. The Fed has recently admitted that inflation is not merely transitory, so if the abovementioned scheme is adequate, we should expect to look for scapegoats and possibly also interventions in the economy to heroically fight inflation. Gold could benefit from such rhetoric, as it could increase demand for safe-haven assets and inflation hedges. However, the Fed’s capitulation also implies a hawkish shift. If inflation is more persistent, the US central bank will have to act in a more decisive way, as inflation won’t subside on its own. The faster pace of quantitative easing tapering and the sooner interest rate hikes imply higher bond yields and a stronger greenback, so they are clearly negative for gold prices. Having said that, the Fed stays and is likely to stay woefully behind the curve. The real federal funds rate (i.e., adjusted by the CPI annual rate) is currently at -6.1%, which is the deepest level in history, as the chart below shows. It is much deeper than it was at the lows of stagflation in the 1970s, which may create certain problems in the future. What is important here is that even when the Fed raises the federal funds rate by one percentage point next year, and even when inflation declines by another two percentage points, the real federal funds rate will increase to only -3%, so it will stay deeply in negative territory. Surely, the upward direction should be negative for gold prices, and the bottom in real interest rates would be a strong bearish signal for gold. However, rates remaining well below zero should provide some support or at least a decent floor for gold prices (i.e., higher than the levels touched by gold in the mid-2010s). Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care.
Tesla Stock Price and Forecast: TSLA ready to rally for third day

Tesla Stock Price and Forecast: TSLA ready to rally for third day

FXStreet News FXStreet News 23.12.2021 16:03
TSLA shares shot up 7.5% on Wednesday after Elon Musk claimed he was done selling. NHTSA investigates 580,000 Teslas over video game safety issue. Tesla secures four-year supply of graphite for battery anodes from Australian company. Tesla (TSLA) did not underwhelm those expecting a banner session on Wednesday. TSLA shares careened up 7.5% after Elon Musk added even more color to Tuesday's statement about soon ending his season of selling. Specifically, he said there were a few tranches left, but that he was "almost done." The stock is trading up 1% in Thursday's premarket at $1,019. Tesla Stock News: Tesla secures graphite supply Tesla secured the majority of battery-grade graphite from a new Louisiania processing plant owned by Australia-based Syrah Resources, according to Bloomberg. The processor will have an initial supply capacity of 10,000 short tons a year, and Tesla will have first right to any increased supply capacity. Graphite is used for battery anodes, and China currently produces most of the world's battery-grade graphite. Syrah Resources will supply its graphite from Mozambique on the other hand. Syrah says it could raise its output from Mozambique to 40,000 tons by the middle of this decade. Early Wednesday morning the National Highway Traffic Safety Administration (NHTSA) announced a safety investigation into 580,000 Tesla vehicles sold since 2017 that come equipped with video games that can be played on the center console touchscreen. The NHTSA says that prior to December 2020, the games could only be played when the vehicle was in park. Starting a year ago, however, the agency claims the games were made available to the front passenger when the vehicle was in drive, which "may distract the driver and increase the risk of a crash," the NHTSA said. Musk's tweet on Wednesday that he was "almost done" with selling shares refers to his promise in early November that he would sell 10% of his stake in the EV maker. On a podcast on Tuesday, the Tesla CEO had said he had "sold enough" TSLA stock to meet his 10% goal. Wednesday's admission that he was "almost done" sounds closer to the truth, and some observers think he has sold about 15 million shares thus far with about 2 million to go. TSLA key statistics Market Cap $1.02 trillion Price/Earnings 330 Price/Sales 25 Price/Book 38 Enterprise Value $1.02 trillion Operating Margin 10% Profit Margin 7% 52-week high $1,243.49 52-week low $539.49 Short Interest 3% Average Wall Street Rating and Price Target Hold, $849.64   Tesla Stock Forecast: this is what a reversal looks like On Wednesday, Tesla's share price bounded past December's top trend line that has herded TSLA stock lower since December 1. Before the market opened on Wednesday, FXStreet wrote: "To confirm the reversal, TSLA price must close above the December 17 swing high at $960.61. Further confirmation that the three-week price decline is over would be a close above the December 16 high of $998.54." Indeed, the market has seen both levels broken in a single session. Now TSLA faces resistance at $1,020 from December 10. If bulls can break above this price, then the target will become December 8's $1,072 resistance point. Overpowering here will bring $1,165 into view, which provided resistance on November 30 and December 1. TSLA 1-hour chart
Gold christmas tree?

Gold christmas tree?

Arkadiusz Sieron Arkadiusz Sieron 23.12.2021 12:25
Santa Claus is coming to town! What will he give gold: a gift or a rod? During the holiday week, not much happens in the marketplace. Investors focus on two things right now: whether Democrats will be able to pass Biden’s spending bill in the face of Senator Joe Manchin’s opposition, and whether the coronavirus Omicron variant will trigger new restrictions and hamper economic growth. After all, this strain has already become the dominant one in the US, but its effects are not yet known. Like most of 2021, gold has been rubbing against $1,800 this week but did not have the strength to permanently rise above this level. Despite a surge in inflation and very low real interest rates, the yellow metal didn’t rally. Thus, we could say that gold was rather naughty this year and doesn’t deserve gifts from Santa. However, maybe it’s not gold’s fault, but our too high expectations? After all, gold had to compete with cryptocurrencies and industrial metals (or commodities in general), both of which performed exceptionally well during periods of high inflation. Despite all the Fed’s hawkish rhetoric and tapering of quantitative easing, gold didn’t break down. Hence, it all depends on the perspective. The same applies to historical analyses and forecasts for 2022. The bears compare the current situation with the 2011-2013 period. The 2020 peak looked like the 2011 peak. Thus, after a period of consolidation, we could see a big decline, just as it happened in 2013. On the other hand, gold bulls prefer to compare today with 2015, as we are only a few months away from the Fed’s interest rate hikes. As a reminder, gold bottomed in December 2015, so the hope is that we will see another bottom soon, followed by an upward move. In other words, the bears believe that the replay of the “taper tantrum” is still ahead of us, while the bulls claim that the worst is already behind us.   Implications for Gold Who is right? Of course, me! But seriously: both sides make valid points. Contrary to 2013, the current tapering was well telegraphed and well received by the markets. Thus, the worst can indeed be already behind us. Especially that the 2020 economic crisis was very deep, but also very short, so everything was very condensed. I mean: the Great Recession lasted one and a half years, while the Great Lockdown lasted only two months. The first taper tantrum occurred in 2013, while the first hike in the federal funds rate – at the end of 2015. We won’t wait that long now, so the period of downward pressure on gold prices stemming from expectations of the Fed’s tightening cycle will be limited. Having said that, gold bears highlight an important point: real interest rates haven’t normalized yet. As the chart below shows, although nominal bond yields have rebounded somewhat from the August 2020 bottom, real rates haven’t followed. The reason was, of course, the surge in inflation. However, if inflation eases, inflation-adjusted rates will go up. Additional risk here is that the Fed will surprise the markets on a hawkish side. The bottom line is that Santa Claus may bring gold a rod this time. Although gold’s reaction to the recent FOMC meeting was solid, the overall performance of the yellow metal this month is worse compared to the historically strong action in December. I don’t expect a similarly strong downward move as in 2013, but real interest rates could normalize somewhat in 2022, given the upcoming Fed’s tightening cycle and possible peak in inflation. The level of indebtedness will limit the scope of the move, but it won’t change the direction. Anyway, whether you are a gold bull or a gold bear, I wish you a truly merry and golden Christmas (or just winter holidays)! Let the profits shine, even if gold won’t! If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
USDJPY - an interesting pair, a few words about US 100

USDJPY - an interesting pair, a few words about US 100

John Benjamin John Benjamin 27.12.2021 10:59
USDJPY breaks higher The US dollar inched higher after November’s core PCE jumped to 4.7%. A break above the supply area near 114.20 indicates that the bulls have gained the upper hand. As sellers rush to the exit, the pair may enjoy solid support above the former resistance at 114.05. An overbought RSI has temporarily limited the initial breakout range. After a short accumulation phase, the bulls may have an unobstructed path towards the psychological level of 115.00. That is a major hurdle right under the previous peak. USDCAD retreats to daily support The Canadian dollar bounces back as GDP growth gained traction in October. The US dollar is struggling for support after its tentative break above the August high at 1.2950. A retreat below 1.2900 has led traders to dump leveraged positions. The pair is testing the daily support at 1.2760 which lies along the 30-day moving average. And this makes it an area of interest for the bulls to attempt a rebound. 1.2920 is a fresh resistance ahead. A deeper correction may send the greenback to 1.2650 near December’s lows. US 100 completes V-shaped recovery The Nasdaq 100 continues to recover as improved economic data outweigh covid concerns. The index has met solid buying interest near 15600. This used to be a supply zone from last September. Since then it has recouped losses from the recent liquidation. The RSI’s overbought situation may cause a brief pullback while short-term traders take profit. 16170 is the closest support and 15850 is another layer of defense. On the upside, a break above 16460 could extend the rally to the all-time high at 16770 and beyond.
S&P 500, Nasdaq and more...

S&P 500, Nasdaq and more...

Monica Kingsley Monica Kingsley 27.12.2021 15:56
S&P 500 and risk-on assets continued rallying, pausing only before the close. Santa Claus delivered, and the final trading week of 2021 is here. With the dollar pausing and VIX at 18 again, we‘re certainly enjoying better days while clouds gather on the horizon – Thursday‘s inability of financials to keep intraday gains while yields rose, is but one albeit short-term sign. The Fed is still accomodative (just see the balance sheet expansion for Dec – this is really tapering), didn‘t get into the headlines with fresh hawkish statements, and inflation expectations keep rising from subdued levels. Importantly, bonds prices aren‘t taking it on the chin, and the dollar hasn‘t made much progress since late Nov. Both tech and value are challenging their recent highs, and the ratio of stocks trading above their 200-day moving average, is improving. The same for new highs new lows – the market breadth indicators are picking up. We haven‘t seen the stock market top yet – the rickety ride higher isn‘t over, Santa Claus rally goes on, and my 2022 outlook with targets discussed that a week ago. Precious metals are extending gains, and aren‘t yet raging ahead – the picture is one of welcome strength returning across the board. The same goes for crude oil finally rising solidly above $72 as the omicron fears are receding in light of fresh incoming data including South African policies. It‘s only copper that‘s now reflecting the prospects of real economy slowdown. At the same time, the crypto rebound last week served as a confirmation of broad risk-on advance. Still more to come, as per Thursday‘s article title. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 is within spitting distance of ATHs, and the bulls haven‘t said the last word in spite of the approaching need to take a rest. It‘s rally on, for now. Credit Markets HYG has finally overcome the Sep highs, but its vulnerability at current levels is best viewed from the point of view of LQD underperformance. Investment grade corporate bonds could have been trading higher compared to the progress made by TLT. Gold, Silver and Miners Gold and silver are looking up, and so are miners – the upswing isn‘t overheated one bit, and can go on as we keep consolidating with an increasingly bullish bias. Crude Oil Crude oil once again extended gains, and even if oil stocks are a little lagging, the medium-term bullish bias in black gold remains. The path of least resistance is once again up. Copper Copper at least closed unchanged – the fresh steep rally indeed seems more than quite a few weeks ahead. But the table for further gains is set. Bitcoin and Ethereum Bitcoin and Ethereum are entering the final trading week of 2021 in good shape. The rising tide of liquidity is still lifting all boats in a rather orderly way. Summary Thursday brought a proper finish to the Christmas week, and we‘re not staring at a disastrous finish to 2021 across the board. Short-term extended, but overall very positive bond market performance is aligned, and we can look for positive entry to 2022 in stocks, precious metals, oil, copper and cryptos alike. Shrinking global liquidity, no infrastructure bill, and consolidating dollar complete the backdrop of challenges that would make themselves heard well before Q2 2022 arrives. I hope you had Merry Christmas once again, and will also enjoy the relatively smooth ride while it lasts – 2022 will be still a good year, but with its fair share of corrections. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
AUDUSD, USDCHF and EURJPY status explained

AUDUSD, USDCHF and EURJPY status explained

John Benjamin John Benjamin 28.12.2021 08:43
AUDUSD falls back for support The Australian dollar pulls back as risk assets tread water amid low liquidity. A break above the previous high at 0.7220 reveals a strong bullish bias. However, the RSI’s repeatedly overbought situation may have prompted short-term buyers to take some chips off the table. In turn, this left price action vulnerable to retracement. 0.7200 is the closest support. Its breach would trigger a deeper correction towards 0.7120. A close above 0.7250 may resume the reversal and carry the Aussie to the daily resistance at 0.7360. USDCHF tests consolidation range The US dollar softens over weaker Treasury yields. The pair’s latest rebound has met aggressive selling at the upper bound of the consolidation range near 0.9250. That is a sign of lingering bearish pressure. The greenback is testing the lower bound near 0.9160. Range traders were eager to buy the dip as the RSI ventured into the oversold zone. 0.9210 is an intermediate hurdle leading to the upper limit where a breakout could trigger a bullish reversal towards 0.9350. Otherwise, a drop below 0.9160 may send the pair to 0.9100. EURJPY breaks higher The Japanese yen weakened after Japan’s jobless rate rose to 2.8% in November. The long side has gained the upper hand after they pushed above 129.60. A bullish MA cross following a brief consolidation indicates an acceleration in the upward momentum. A break above the psychological level of 130.00 would set 130.60 as the next target, clearing the path for a rally to 131.30. An overbought RSI may cause a temporary pullback. 129.20 from the previous supply zone has become a fresh support.
Gold and inflation

Gold and inflation

Arkadiusz Sieron Arkadiusz Sieron 28.12.2021 16:28
High inflation won’t go away in 2022. Good for gold. However, it is likely to continue to climb and reach its peak. That sounds a bit worse for gold. If 2021 was tough for you, I don’t recommend reading Nostradamus’ predictions for the next year. This famous French astrologer saw inflation, hunger, and much more coming in 2022: So high the price of wheat, That man is stirred His fellow man to eat in his despair Yuk! So, life is about to get a little more complicated: we must now avoid becoming infected and being eaten by our fellow citizens! If you are interested in how cannibalism will affect the gold market, I’m afraid that I don’t have adequate data. Anyway, if you end up in the pot together with vegetables and your colleagues, gold’s performance probably won’t be your top priority. Hence, let’s focus on inflation. Last week, the Bureau of Economic Analysis released the latest data on the Personal Consumption Expenditures Price Index. This measure of inflation surged 5.7% in the 12 months ended in November, which was the fastest increase since July 1982. Meanwhile, as the chart below shows, the core index, which excludes energy and food, rose 4.7%. It was the highest jump since February 1989. This is very important, as it shows that inflation is not elevated merely by rising energy prices. Instead, it’s more broad-based, which can make inflation more lasting. Indeed, there are strong reasons to expect that high inflation will stay with us in 2022. As the chart below shows, the shelter index – the biggest CPI component – has been rising recently, which should move the whole index up. In other words, surging home prices could translate into higher rents, supporting consumer inflation. Additionally, the Producer Price Index has also been rallying this year. The final demand index rose 9.6% on an annual basis in November, the largest advance since 12-month data was first calculated in late 2010. Moreover, the commodity index surged 23%, and it was the highest jump since November 1974. All this indicates that inflationary pressure remains strong. Implications for Gold To be clear, inflation will eventually peak, and this will probably happen in 2022. This is because a one-time helicopter drop (the surge in the money supply) leads to a one-time jump in the price level. However, inflation is like toothpaste. It’s easy to get it out, but it’s difficult to get it back in again. To use another metaphor, if you wait with your actions until you see the whites of the eyes of a tiger, you can be eaten (sorry for being monothematic today!). This was exactly the Fed’s strategy with the inflationary tiger for most of 2021. Yes, the US central bank accelerated tapering of quantitative easing in December, but it remains behind the curve (or, to continue the metaphor, it’s still holding the tiger by the tail). What does it all mean for the gold market? High inflation should support gold prices. The expectations of a more hawkish Fed probably prevent a big rally, but ultra-low real interest rates are supportive of the yellow metal. However, what is one of my biggest worries for the next year (except for the perspective of being eaten by hungry neighbors) is how gold will react to the peak in inflation. Although inflation will stay elevated, it won’t rise indefinitely. When it peaks, real interest rates could go up, negatively affecting the yellow metal. Of course, one would say that the peak of inflation would be accompanied by a more dovish Fed, so disinflation doesn’t have to hurt gold, just as rising inflation didn’t make it shine. However, this is not so simple, and if inflation stays above 5%, the Fed could still feel obligated to act and bring inflation to its 2% target. Anyway, US monetary policy (together with fiscal policy) will be tighter compared to 2020 and to other major countries, which (together with a likely peak in inflation) creates a rather challenging macroeconomic environment for gold in 2022 (at least until worries about the negative consequences of the Fed’s tightening cycle emerge). If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
XAUUSD seeks support, NZDUSD consolidates recent gains, EURUSD tests important resistance

XAUUSD seeks support, NZDUSD consolidates recent gains, EURUSD tests important resistance

John Benjamin John Benjamin 29.12.2021 08:42
EURUSD tests important resistance The US dollar struggles as the Omicron scare subsides. The pair has been stuck in a narrow range between 1.1230 and 1.1360, because of a lack of liquidity and a catalyst. Following a bounce from 1.1260 price action is testing the upper band of the horizontal consolidation. A bullish breakout would pop up volatility as sellers rush for the exit. An extended rally would set 1.1450 as the next target. On the downside, a fall below 1.1260 may prolong the sideways action for a few more days. NZDUSD consolidates recent gains The New Zealand dollar softens over a limited year-end risk appetite. The latest surge above 0.6830 has put the bears on the defensive. Intraday traders took profit after the RSI showed overextension. The current flag-shaped consolidation could be an opportunity for the bulls to regroup and catch their breath. The demand zone around 0.6760 is a major level to support the rebound. On the upside, 0.6840 on the 30-day moving average is the closest resistance. And its breach may trigger a broader rally towards 0.6920. XAUUSD seeks support Gold edged higher as the US dollar slipped across the board. A close above the supply zone around 1815 is a short-term confirmation that sentiment favors the upside. A bullish MA cross on the hourly chart indicates that the recovery could be picking up steam. Above 1820, 1840 would be the target when momentum makes its way back into the market. In the meantime, buyers may see a retracement to 1803 as an opportunity to buy the dip after the RSI returned to the neutrality area. 1790 is a second level of support.
Fear May Drive Silver More Than 60% Higher In 2022

Fear May Drive Silver More Than 60% Higher In 2022

Chris Vermeulen Chris Vermeulen 22.12.2021 23:17
As the US and global markets rattle around over the past 60+ days, many traders have failed to identify an incredible opportunity setting up in both Gold and Silver. Historically, Silver is extremely undervalued compared to Gold right now. In fact, Gold has continued to stay above $1675 over the past 12+ months while Silver has collapsed from highs near $30 to a current price low near $22 – a -26% decline. Many traders use the Gold/Silver Ratio as a measure of price comparison between these two metals. Both Gold and Silver act as a hedge at times when market fear rises. But Gold is typically a better long-term store of value compared to Silver. Silver often reacts more aggressively at times of great fear or uncertainty in the global markets and often rises much faster than Gold in percentage terms when fear peaks. Understanding the Gold/Silver ratio The Gold/Silver ratio is simply the price of Gold divided by the price of Silver. This creates a ratio of the price action (like a spread) that allows us to measure if Gold is holding its value better than Silver or not. If the ratio falls, then the price of Silver is advancing faster than the price of Gold. If the ratio rises, then the price of Gold is advancing faster than the price of Silver. Right now, the Gold/Silver ratio is above 0.80 – well above a historically normal level, which is usually closer to 0.64. I believe the current ratio level suggests both Gold and Silver are poised for a fairly big upward price trend in 2022 and beyond. This may become an exaggerated upward price trend if the global market deleveraging and revaluation events rattle the markets in early 2022. Sign up for my free trading newsletter so you don't miss the next opportunity! I expect to see the Gold/Silver ratio fall to levels below 0.75 before July/August 2022 as both Gold and Silver begin to move higher in Q1:2022. Some event will likely shake investor confidence in early 2022, causing precious metals to move 15% to 25% higher initially. After that initial move is complete, further fallout related to the deleveraging throughout the globe, post-COVID, may prompt an even bigger move in metals later on in 2022 and into 2023. COVID Disrupted The 8~9 Year Appreciation/Depreciation Cycle Trends In May 2021, I published an article suggesting the US Dollar may slip below 90 while the US and global markets shift into a Deflationary cycle that lasts until 2028~29 (Source: The Technical Traders). I still believe the markets will enter this longer-term cycle and shift away from the broad reflation trade that has taken place over the past 24+ months – it is just a matter of time. If my research is correct, the disruption created by the COVID virus may result in a violent reversion event that could alter how the global markets react to the deleveraging and revaluation process that is likely to take place. I suggest the COVID virus event may have disrupted global market trends because the excess capital poured into the global markets prompted a very strong rise in price levels throughout the world in real estate, commodities, food, technology, and many other everyday products. The opposite type of trend would have likely happened if the COVID event had taken place without the excessive capital deployed into the global markets. Demand would have diminished. Price levels would have fallen. Demand for commodities and other technology would have fallen too. That didn't happen. The opposite type of global market trend took place, and prices rose faster than anyone expected. Markets Tend To Revert After Extreme Events As much as we may want to see these trends continue forever, any trader knows that markets tend to revert after extreme market trends or events. In fact, there are a whole set of traders that focus on these “reversion events.” They wait for extreme events to occur, then attempt to trade the “reversion to a mean” event in price action. My research suggests the COVID virus event may have created a hyper-cycle event between early 2020 and December 2021 (roughly 24 months). My research also suggests a global market deleveraging/revaluation event may be starting in early 2022. If my research is correct, the recent lows in Gold and Silver will continue to be tested in early 2022, but Gold and Silver will start to move much higher as fear and concern start to rattle the markets. As asset prices revert and continue to search for proper valuation levels, Gold and Silver may continue to rally in various phases through 2028~2030. Initially, I expect a 50% to 60% rally in Silver, targeting the $33.50 to $36.00 price level. For SILJ, Junior Silver Miners, I expect an initial move above $20 (representing a 60%+ rally), followed by a follow-through rally targeting the $25.00 level (more than 215% from recent lows). I believe the lack of focus on precious metals over the past 12+ months may have created a very unusual and efficient dislocation in the price for Silver compared to Gold. This setup may present very real opportunities for Silver to rally much faster than Gold over the next 24+ months – possibly longer. If my research is correct, the Junior Silver Miners ETF, SILJ, presents a very good opportunity for profits. Want to learn more about the movements of Gold, Silver, and their Miners? Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals. If you need technically proven trading and investing strategies using ETFs to profit during market rallies and to avoid/profit from market declines, be sure to join me at TEP – Total ETF Portfolio. Pay particular attention to what is quickly becoming my favorite strategy for income, growth, and retirement - The Technical Index & Bond Trader. Have a great day!
S&P 500's rally to be continued?

S&P 500's rally to be continued?

Arkadiusz Sieron Arkadiusz Sieron 29.12.2021 15:31
  Stocks slightly extended their rally yesterday and the S&P 500 reached new all-time high above the 4,800 level. But will the uptrend continue? The broad stock market index lost 0.10% on Tuesday, Dec. 28, as it fluctuated following the recent record-breaking rally. The broad stock market is now way above its local highs from November and December. Stocks broke above the consolidation and we had a Santa Claus rally. The new record high is at 4,807.02. Now we may see a consolidation or a downward correction. The S&P 500 index is expected to open 0.1% lower this morning. On Dec. 3 the index fell to the local low of 4,495.12 and it was 5.24% below the previous record high. So it was a pretty mild downward correction or just a consolidation following this year’s advances. The nearest important resistance level remains at around 4,800. On the other hand, the support level is now at 4,740-4,750, marked by the previous highs. The S&P 500 broke above its two-month long consolidation, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq 100 Remains Below the November High Let’s take a look at the Nasdaq 100 chart. The technology index is relatively weaker than the broad stock market’s gauge as it is still trading below the Nov. 22 record high of 16,764.85. The recent rally in stocks was driven by a handful of stocks and the technology stocks were just retracing their recent declines. However, the Nasdaq 100 broke above the resistance level of 16,400. Apple’s Market Cap Gets Close to $3 Trillion Again Apple stock got back close to its Dec. 13 record high of $182.13. The nearest important resistance level is at $180-182. The stock remains above its two-month long upward trend line. There have been no confirmed negative signals so far, however, the market may be trading within a medium-term topping pattern. It’s getting very hard to fundamentally justify the Apple’s current market capitalization of around $3 trillion. Conclusion The S&P 500 index will most likely fluctuate following the recent record-breaking rally. We may see some profit trading action and a consolidation along the 4,800 level. There have been no confirmed negative signals so far. However, there are some short-term overbought conditions. Here’s the breakdown: The S&P 500 will likely fluctuate following the recent rally. We may see a consolidation or a downward correction at some point. In our opinion no positions are currently justified from the risk/reward point of view. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
GBPUSD consolidates gains, GER 40 breaks above daily resistance, USOIL seeks support

GBPUSD consolidates gains, GER 40 breaks above daily resistance, USOIL seeks support

John Benjamin John Benjamin 30.12.2021 08:24
GBPUSD consolidates gains Growing risk appetite weighs on a safer US dollar. The rally above 1.3360 confirms that short-term sentiment has turned around. However, the push might have run out of steam as the RSI shows a bearish divergence. The deceleration indicates limited buying interest after the price went parabolic. 1.3400 is an immediate support. Its breach could trigger a correction and force the latest buyers out. Then 1.3300 would be the next support. 1.3500 is a major resistance from the daily chart. GER 40 breaks above daily resistance The Dax 40 climbed higher as investors favor value stocks in telecoms, transportation, and utilities. A break above December’s high at 15840 is a strong signal that the bulls may have had the last word. Trend followers would jump in, in anticipation of continuing above the psychological level of 16000. The RSI’s overbought situation could prompt intraday buyers to take profit. The previous resistance 15700 (now turned support) is the first level to evaluate buying interest. 15500 is the second support in case of a deeper pullback. USOIL seeks support WTI crude rallied after the EIA report showed a larger-than-expected fall in US inventories. The bulls are looking to hold onto their recent gains after they cleared the 30-day moving average and daily resistance at 73.20. 79.00 from November’s sharp sell-off is a major hurdle ahead. A bullish breakout could put the rally back on track. The RSI’s overextension may cause a brief pullback. The 38.2% Fibonacci retracement level is an area of interest as it coincides with the previous low at 72.60.
Rallying, singing "Jingle Bells", S&P 500 feels like hanging by the fingernails

Rallying, singing "Jingle Bells", S&P 500 feels like hanging by the fingernails

Monica Kingsley Monica Kingsley 29.12.2021 16:25
S&P 500 feels like hanging by the fingernails – tech down and value retreating intraday. Correction of prior steep upswing is here – the bears will try some more, but I‘m not looking for them to get too far. The signs are there to knock the bulls somewhat down, and fresh ATHs look to really have to wait till next week. Checking up on the VIX, financials and consumer discretionaries confirms the odds of the bears stepping in today, and perhaps also tomorrow (depending upon today‘s close). The repelled HYG downswing likewise doesn‘t represent a significant risk-off turn (yet) – instead, we appear to be on the doorstep of another rotation, and its depth would be determined by how well tech is able to hold near current levels. Looking at precious metals, commodities and cryptos, the sellers of this risk-on rally have good odds of closing in the black for today. Earliest signs of stabilization would come from bonds, tech and cryptos – that‘s where I‘m mostly looking today. Keeping in mind the big picture – all eyes on upcoming Fed balance sheet data: (…) The Fed didn‘t really taper much in Dec, thus the jubilant close to 2021 across the board. The compressed yield curve would eventually invert – regardless of the current levels of inflation, the GDP growth can still support higher stock prices. Precious metals and commodities would though become an increasingly appealing proposition as I‘m not looking for the Fed to be able to break inflation. The tightening risks are clearly seen in market bets via compressed yields, so they‘ll attempt to not only talk a good game – they will act, and the risks of breaking something (real economy) would grow. That‘s the message from Treasuries – hawkish monetary policy mistake is feared and increasingly expected. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 saw a shot across the bow, and it remains to be seen whether the bears take advantage of a promising position to strike later today. Odds are they would at least try. Credit Markets HYG‘s hammer-style candle on rising volume doesn‘t bode well for today. Stabilization in junk bonds would be a most welcome sign once it arrives. Gold, Silver and Miners Gold and silver aren‘t at all well positioned in the short-term – higher yields perhaps accompanied by consolidating inflation expectations, provide the bears with an opportunity. Crude Oil Crude oil is likewise stalling, but not too vulnerable unless fresh omicron fears return to the headlines. The $78 zone indeed looks to take a few days to be reached – I‘m still not looking at this week really. Copper Copper is taking a cautious stance – cautious, not panicky. Building a base not too far from yesterday‘s lows, would be most constructive now. Bitcoin and Ethereum Bitcoin and Ethereum are feeling the pinch, and the Ethereum underperformance has foretold stiffer headwinds than had been the case recently. Genuine downtrend hasn‘t yet developed – the bulls are being tested as we speak. Summary Santa Claus rally is getting the announced reprieve – the day of decision how far it reaches, is today. Unless bonds (I‘m looking at the junk spectrum mainly), tech and cryptos weaken inordinately much, today‘s move would come in the sideways consolidation category. Odds for that are slightly better than a coin toss, but regardless, I‘m looking for a positive first day of 2022 trading to help make up for end of this week‘s headwinds. It‘s also positive that oil remains well bid above $75.50, and copper above $4.40. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
2022 and Gold

2022 and Gold

Arkadiusz Sieron Arkadiusz Sieron 30.12.2021 17:54
  2021 was bad for gold. Unfortunately, 2022 doesn’t look any better, especially at the beginning. The end, however, gives the yellow metal some hope… Bye, bye 2021! It definitely wasn’t a year of gold. As the chart below shows, the yellow metal lost 5% of its value over the last twelve months, declining from $1,887.60 on December 30, 2020, to $1,794.25 on December 29, 2021. Thus, the gold bulls won’t miss 2021, I guess. What about me? Well, I correctly predicted in January that “gold’s performance in 2021 could be worse than last year”. However, I expected more bullish behavior. I thought that rising inflation would be more supportive of gold prices. I’m fully aware that gold is not a perfect inflation hedge, but historical analysis suggests that high and accelerating inflation should be positive for gold prices. After all, inflation lowers the real interest rates, the key fundamental factor in the gold market. However, rising inflation has prompted the Fed to tighten its monetary policy and speed up the tapering of its quantitative easing. Expectations of hikes in the federal funds rate in 2022 also strengthened. In consequence, as the chart below shows, bond yields rose, especially those short- and medium-term, creating downward pressure on gold prices. Thus, we’ve learned two important lessons in 2021: don’t just count on inflation, and don’t fight with the (hawkish) Fed. As you can see, bond yields haven’t returned to their pre-pandemic level yet. Although they don’t have to fully recover, they do have room for further increases. The issue here is that when inflation peaks and disinflation starts, inflation expectations could decline, boosting the real interest rates. Actually, market-based inflation expectations already peaked in November, as shown in the chart below. This indicates that worries about inflation had calmed and investors had regained some confidence in the US central bank’s ability to contain upward price pressure.   Implications for Gold Will 2022 be better for gold than 2021? It’s possible, but I’m not an optimist. I mean here: macroeconomic conditions will turn more bearish for gold. Despite the spreading of Omicron variant of coronavirus, 2022 could mark the end of the global Covid-19 epidemic with a full economic recovery and a return to normal conditions. Fiscal policy will tighten, while the Fed will adopt a more hawkish monetary policy than in 2021. Supply shocks are easing, so inflation may peak, while real interest rates go up further. Moreover, the US dollar may strengthen against the euro, as the ECB is slower with its monetary policy tightening. On the other hand, there are also some factors that could support gold prices. In 2021, GDP rebounded greatly after the economic crisis of 2020, and financial markets also recovered robustly. 2022 may be more challenging for economic growth and the financial sector, though. One thing is the base effect, while another is central banks’ policy normalization and rising interest rates. With massive public and private debts, the Fed’s tightening cycle could deflate asset and credit bubbles and even trigger a recession, or at least a market correction. However, there are no signs of market stress yet, so a financial crisis is not in my baseline scenario for the next year. 2023 (or even later) is a more probable timeframe. Hence, I believe that the end of 2022 may be better for gold than the beginning of the year, as mere expectations of the Fed’s tightening cycle could be replaced by worries about the consequences of interest rate hikes. Anyway, 2021 is (almost) dead. Long live 2022! I wish you a return to normalcy, shining profits and all the golden next year! If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
Crude Oil ahead of 2022

Crude Oil ahead of 2022

Sebastian Bischeri Sebastian Bischeri 30.12.2021 17:54
  Omicron did a bit of a mess at the end of 2021, with oil too. Will crude oil break new price records in the New Year 2022? What do you guys reckon? Market Updates Yesterday, crude oil prices ended modestly higher after a volatile session with amplitudes increased by closing trades, as US crude inventories fell by 3.6 million barrels – more than expected – which is a positive sign for demand. Commercial crude oil reserves in the United States fell more than expected last week, recording the third consecutive significant decline on the back of strong demand, according to figures released yesterday by the US Energy Information Agency (EIA). On the other hand, the overall volatility is mainly due to the possible impact of the Omicron variant on demand; projects, commutations, as well as trips are cancelled, and more severe restrictions are put in place in Europe and China. (Source: Investing.com) The oil market continues to be tight due to the increased demand for heating oil to replace natural gas, which has become very expensive, especially in Europe; the Dutch TTF (Title Transfer Facility) benchmark dropped almost 8% to €89 there. As you may know, one third of European gas supplies come from Russia. This explains why the energy market is also keeping an eye on the Russo-Western crisis around Ukraine. Russian gas exports could be affected if tensions rise, as Russian President Vladimir Putin is due to speak on the phone with his American counterpart Joe Biden later today. I bet they won’t talk about Russian caviar (which might also be considered Russia’s original black gold). RBOB Gasoline (RBF22) Futures (Continuous contract, daily chart, logarithmic scale) Henry Hub Natural Gas (NGF22) Futures (January contract, daily chart, logarithmic scale) WTI Crude Oil (CLG22) Futures (February contract, daily chart, logarithmic scale) Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
S&P 500 - ATH?

S&P 500 - ATH?

Chris Vermeulen Chris Vermeulen 30.12.2021 22:59
A very late Santa Rally appears to have been set up in the US markets as we close in on the end of 2021. The US markets have already started a melt-up trend – which is what I expected to happen prior to the bout of volatility over the past 30+ days. A Very Late Santa Rally Could Prompt A Powerful Move Upward A very late positive shift in the US major indexes may prompt a powerful upward price trend in early 2022. I expect that Q4:2021 earnings and revenues will continue to impress traders while the US Dollar strengthens above 95. This combination of a strong US economy with a stronger US Dollar will continue to attract foreign capital investment in US equities in early 2022. Traders won't want to miss the potential for a Q1 and Q2 rally phase in the US markets IF the US Fed stays moderately inactive throughout the first half of 2022. Sign up for my free trading newsletter so you don’t miss the next opportunity! Traders were concerned that the US Fed and Inflation would prompt a sudden shift by the US Fed. Still, I believe the new Omicron COVID virus and the shift away from hyper-inflationary trends may alter how the Fed sees the global economy in 2022. The US markets may be strengthening simply because of the additional stimulus and strong US consumer activity from the recovery/reflation trade momentum (late 2020 and almost all o 2021). The early 2022 trends may carry momentum into the first two Quarters of 2022 with slowly diminishing strength overall. Please take a minute to review our ADL Price Predictions for 2022 in this research article: The Technical Traders S&P 500 Rallying To New All-Time Highs To Close Out 2021 The S&P 500 recently rallied to new all-time highs just days before the end of 2021. This move suggests traders are shifting away from broader market concerns and starting to pay attention to the pending Q4:2021 earnings and revenue data and the 2021 Annual Data that will hit over the next 30 to 60+ days. Even though the markets are looking for any reason to spike the VIX (volatility), I believe the momentum behind this rally phase is going to continue to drive the S&P 500 up towards 5000 – or higher. My expectations are that we will see a fairly strong 5% to 8% rally in early 2022 from the 2021 end-of-year price levels. I believe the US market is attracting lots of foreign market capital as long as the US Fed does not do anything to topple the current market dynamics. NASDAQ Is Struggling To Reach New All-Time Highs, But Could Explode Higher In Early 2022 Even though the NASDAQ appears to be more volatile than the S&P500 and Dow Jones, it stands a very good chance of exploding higher in early 2022 as Q4:2021 earnings are announced, and end-of-year revenues and US economic data are presented in January/February. I expect that technology will continue to dominate trends related to how US consumers spend their time/money in 2022 – especially if we continue to go through more COVID virus waves. The sectors I'm watching in 2022 are Housing, Technology, Healthcare, Consumer Staples/Discretionary, Metals/Mining, and Retail. If there are any signs of concern in the US/Global markets, I expect to see these concerns appear in the strongest sectors right now (Consumer, Retail, Metals, Housing, and Technology). The US Fed will probably not take any severe actions in Q1:2022 and maybe talk about raising rates in Q2:2022. This means the US markets will continue to attract foreign capital, and traders need to prepare for a potentially explosive upside price trend in the NASDAQ before March 2022.
Bitcoin and Ethereum are staging a daily comeback

Bitcoin and Ethereum are staging a daily comeback

Monica Kingsley Monica Kingsley 30.12.2021 15:49
S&P 500 bulls stood their ground nicely, and the key sectors confirmed little willingness to turn the very short-term outlook more bearish than fits the little flag we‘re trading in currently – it‘s a bullish flag. Given the continued risk-off turn in bonds, the stock market setback could have been more than a tad deeper – that would be the conclusion at first glance. However, high yield corporate bonds held up much better than quality debt instruments, and that means the superficial look would have been misleading. Likewise as regards my other 2 signs out of the 3 yesterday presented ones – tech held up fine, and cryptos have practically erased yesterday‘s hesitation during today‘s premarket. The Santa Claus rally indeed hasn‘t yet run its course, and the slighly better than a coin toss odds of us not facing more than a very shallow correction, look to be materializing. As I wrote 2 days ago – What‘s Not to Love Here – we‘re entering 2022 with great open profits in both S&P 500 (entered aggressively at 4,672) and crude oil (entered with full force at $67.60). Both rides aren‘t yet over, copper is primed to catch up in the short run to the other commodities, gold is well bid at current levels, and together with silver waiting for a Fed misstep (market risk reappreciation) and inflation to start biting still some more while the real economy undergoes a soft patch (note however the very solid manufacturing data) with global liquidity remaining constrained even though the Fed didn‘t exactly taper much in Dec, and nominal yields taking a cautious and slow path towards my 2022 year end target of 1.80-2.00% on the 10-year Treasury. As I wrote prior Monday, we‘re looking at still positive 2022 returns in stocks – of course joined by commodities and precious metals. The path would be though probably a more turbulent one than was the case in 2021. We had a good year of strong gains, and I hope you have benefited. Thank you for all your appreciation and best wishes sent my way throughout all of 2021 and now by email or via Twitter – I would love to wish you a very Happy New Year – may 2022 keep bringing you happiness, success and good health. Enjoy the New Year‘s Eve celebrations, and see you again on Jan 03, 2022! Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 consolidation is still shaping up finely – and does so on solid internals. Particularly the tech resilience is a good omen. Credit Markets HYG could have indeed declined some more, but didn‘t. While I‘m not reading all too much into this signal individually, it fits the (still bullish) mozaic completed by other markets on my watch. That‘s the strength of intermarket analysis. Gold, Silver and Miners Gold and silver got on the defensive, but the bears didn‘t get too far – and the chance they could have, wasn‘t too bad. Rising yields were though countered by the declining dollar. Crude Oil Crude oil is likely to pause today, and will rally again once risk-on returns broadly, including into credit markets. For now, backing and filling above $76 is my leading very short-term scenario – Monday though will be a fresh day. Copper Copper is pausing, but the downswing didn‘t reach far, and was bought relatively fast. More consolidation above $4.40 looks likely, and it would come with a generally bullish bias that‘s apt to surprise on the upside. Similarly to precious metals though, patience. Bitcoin and Ethereum Bitcoin and Ethereum are staging a daily comeback, and as long as mid-Dec lows don‘t come in sight again, crypto prices can muddle through with a gently bullish bias. Summary Santa Claus isn‘t willing to give much ground, and the table is set for this nice rally to modestly continue today – somewhere more pronouncedly (S&P 500, cryptos) than elsewhere (commodities and precious metals). I‘m still looking for a positive first day of 2022 trading to help make up for end of this week‘s headwinds – it has been great that the bears couldn‘t find more strength yesterday. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
USDCHF tests daily support, AUDUSD consolidates gains, EURGBP falls below daily support

USDCHF tests daily support, AUDUSD consolidates gains, EURGBP falls below daily support

John Benjamin John Benjamin 03.01.2022 09:59
USDCHF tests daily support The US dollar softens over increased risk appetite. A drop below the lower band of the consolidation range at 0.9160 confirms a lack of interest in the greenback. The pair is testing the major demand zone around 0.9100 from the daily chart. A bearish breakout could jeopardize the pair’s rebound over the past quarter. It could also trigger a sell-off towards the psychological level of 0.9000. The bulls may be tempted to buy the dip. 0.9180 would be the first resistance to lift before they could turn the downbeat inertia around. AUDUSD consolidates gains The Australian dollar finds support from rising commodity prices. A bullish MA cross on the daily chart indicates improvement in underlying sentiment. The former supply zone between 0.7210 and 0.7220 has turned into a demand zone. Buyers may be eager to join the rally after the RSI returned to the neutrality area. 0.7290 is a fresh resistance, and a combination of profit-taking and fresh selling could temporarily weigh on the Aussie. 0.7120 is a second line of defense in case of a deeper retracement. EURGBP falls below daily support The pound outperforms the euro over diverging monetary policies. The break below the daily support at 0.8380 is an invalidation of the rebound in late November. The RSI’s repeatedly oversold situation has attracted some buying interest, but not enough to sustain a meaningful bounce. 0.8420 is now a fresh resistance. And only its breach could prompt sellers to cover. On the downside, 0.8365 is a fragile support. A breakout would further deteriorate sentiment and send the euro to February 2020’s lows near 0.8280.
"Gold is in the 1960s"

"Gold is in the 1960s"

Arkadiusz Sieron Arkadiusz Sieron 31.12.2021 14:05
  Although your calendar may say otherwise, gold is in the 1960s. The question is whether we will move into the 1970s or speed-run to the mid-2010s. Did you go overboard with your time travel and lose track of time? Probably not, but just in case, I assure you that the current year is 2021. To be 100% sure, I fact-checked it on a dedicated webpage for time-travelers. However, the authority of science is being questioned, and there are people who say that, from a macroeconomic point of view, we are approaching the 1970s, or at least the 1960s. There are also voices saying that the gold market is replaying 2012-2013. Although appearances point to 2021, let’s investigate what year we really live in. The similarities with the 1970s are obvious. Just like then, we have high inflation, large fiscal deficits (see the chart below), and easy, erroneous monetary policy. Fifty years ago, the Fed blamed inflation on exogenous shocks and considered inflation to be transitory too. The new monetary regime adopted by the US central bank in 2020 also takes us back to the 70s and the mistaken belief that the economy cannot overheat, so the Fed can let inflation run above the target for a while in order to boost employment. The parallels extend beyond price pressure. The withdrawal of US troops from Afghanistan reminded many of the fall of Saigon. The world is facing an energy crisis right now, another feature of the 1970s. If we really repeat those years, gold bulls should be happy, as the yellow metal rallied from $35 to $850, surging more than 2300% back in that decade (see the chart below). However, there is one problem with this narrative. In the 1970s, we experienced stagflation, i.e., a simultaneous occurrence of high inflation and economic stagnation with a rising unemployment rate. Currently, although we face strong upward price pressure, we enjoy economic expansion and declining unemployment, as the chart below shows. Indeed, the monthly unemployment rate decreased from 14.8% in April 2020 to 4.2% in November 2021. The current macroeconomic situation, characterized by inflation without stagnation part, is reminiscent of the 1960s, a decade marked by rising inflation and rapid GDP growth. As the chart below shows, the CPI annual rate reached a local maximum of 6.4% in February 1970, similar to the current inflation level. Apparently, we are replaying the 1960s right now rather than the 1970s. So far, growth is slowing down, but we are far from stagnation territory. There is no discussion on this. My point was always that the Fed’s actions could bring us to the 1970s, or that complacency about inflation is increasing the risk of de-anchoring inflation expectations and the materialization of a stagflationary scenario. In the 1960s, the price of gold was still fixed, so historical analysis is impossible. However, it seems that gold won’t start to rally until we see some signs of stagnation or an economic crisis, and markets begin to worry about recession. Given that the current economic expansion looks intact, the yellow metal is likely to struggle at least by mid-2022 (unless supply disruptions and energy crisis intensify significantly, wreaking havoc). Do we have to go back that far in time, though? Maybe the 2020 peak in gold prices was like the 2011 peak and we are now somewhere in 2012-2013, on the eve of a great downward move in the gold market? Some similarities cannot be denied: the economy is recovering from a recession, while the Fed is tightening its monetary policy, and gold shows weakness with its inability to surpass $1,800. So, some concerns are warranted. I pointed out a long time ago the threat of an upward move in the real interest rates (as they are at record low levels), which could sink the precious metals market. However, there are two key differences compared to the 2012-2013 period. First, inflation is much higher and it’s still accelerating, while ten years ago there was disinflation. This distinction should support gold prices. The peak in the inflation rate could be a dangerous time for gold, as the disinflationary era would raise interest rates, putting downward pressure on the yellow metal. Second, the prospects of the Fed’s tightening cycle are probably already priced in. In other words, the next “taper tantrum” is not likely to happen. It implies that a sudden spike in the interest rates similar to that of 2013 (see the chart below) shouldn’t repeat now. Hence, the answer to the question “what year is it?” should be that we are somewhere in the 1960s and we can move later into the 1970s if high inflation stays with us and stagnation sets in or if the next crisis hits. However, we can leap right into the 2010s if inflation peaks soon and the hawkish Fed triggers a jump in bond yields. It’s also possible that we will see a temporary disinflation before the second wave of elevated inflation. So, gold could continue its struggle for a while before we see another rally. Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care.
Let's have a look at S&P 500, Crude Oil, Nasdaq and Credit Markets. Cryptos are still bullish above mid-Dec lows.

Let's have a look at S&P 500, Crude Oil, Nasdaq and Credit Markets. Cryptos are still bullish above mid-Dec lows.

Monica Kingsley Monica Kingsley 03.01.2022 15:57
S&P 500 pared prior steep gains, but thanks to the credit markets message, I‘m not reading into Friday‘s weakness much. There is still more in this rally – value held better than tech, and high yield corporate bonds didn‘t really slide. The year end rebalancing will likely give way to solid Monday‘s performance. While VIX appears to want to move up from the 17 level, it would probably take more than one day to play out. As the Santa Claus rally draws to its close, the nearest data point worth looking forward for, is Tuesday‘s ISM Manufacturing PMI. It‘ll likely show still expanding manufacturing (however challenged GDP growth is on a quarterly basis), and that would help commodities deal with the preceding downswing driven by energy and agrifoods. Both of these sectors are likely to return to gains, and especially oil is. As stated on Thursday, the open profits would still keep rising. Precious metals were the key winners Friday, paying attention to the dollar and nominal yields retreat the most. The red metal‘s upswing certainly helped – such were my latest words: (…) copper is primed to catch up in the short run to the other commodities, gold is well bid at current levels, and together with silver waiting for a Fed misstep (market risk reappreciation) and inflation to start biting still some more while the real economy undergoes a soft patch (note however the very solid manufacturing data) with global liquidity remaining constrained even though the Fed didn‘t exactly taper much in Dec, and nominal yields taking a cautious and slow path towards my 2022 year end target of 1.80-2.00% on the 10-year Treasury. As I wrote prior Monday, we‘re looking at still positive 2022 returns in stocks – of course joined by commodities and precious metals. The path would be though probably a more turbulent one than was the case in 2021. Finally, cryptos look to be in agreement with not reading too much to Friday‘s downswings – both Bitcoin and Ethereum are turning up as $46K in BTC held up once again. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook Nasdaq got a little oversold relative to S&P 500 – this is not the start of a fresh downtrend. Once financials and consumer discretionaries turn up, the rally will be on better footing again. Credit Markets HYG could have declined some more, but tellingly didn‘t. Bonds aren‘t ready to turn to risk-off just yet. Upswing attempt next shouldn‘t be surprising in the least. Gold, Silver and Miners Gold and silver are looking at a much better year than was 2021. Stock market volatility, GDP growth challenges and persistent inflation would help the metals and commodities rise. Crude Oil Crude oil is about to move up again as gains were taken off the table on Friday. With the omicron response and related pronouncements coming in lately from the U.S., what else to expect – a great deal of destroyed demand doesn‘t look to be ahead. Copper Copper undid the prior pause, and looks ready to keep defending the $4.43 area. The long consolidation that started in May, would be eventually broken to the upside. Bitcoin and Ethereum Bitcoin and Ethereum may be short-term undecided, but don‘t look willing to decline. Cryptos are still bullish above mid-Dec lows. Summary First trading day of 2022 is likely to extend prior gains, resolving the prior sideways move. As risk-on faltered on Friday, S&P 500 and cryptos are likely to catch up, and oil would probably outperform copper today while precious metals digest very solid New Year‘s Eve gains. We‘re nowhere near the good days ending just yet – turbulence would come once Fed tapering gets really noticeable (post Olympics), with VIX trending higher well before that already. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
NZDUSD can be ahead of consolidation, XAGUSD - silver declines as dollar strengthens, GER 40 goes up, "wishing" Omicron won't hit that much

NZDUSD can be ahead of consolidation, XAGUSD - silver declines as dollar strengthens, GER 40 goes up, "wishing" Omicron won't hit that much

John Benjamin John Benjamin 04.01.2022 09:14
NZDUSD breaks support The New Zealand dollar tumbles against its US counterpart amid soaring Treasury yields. The pair is looking to consolidate its recent gains after it rallied above the 30-day moving average (0.6820). The December high at 0.6860 is a major resistance. A bullish close may propel the kiwi to 0.6950. In the meantime, the pullback below 0.6800 suggests a lack of further commitment from the buy-side as short-term traders took profit. 0.6740 is the next support and its breach may lead to a correction to 0.6700. XAGUSD seeks support Silver falls back as the US dollar strengthens across the board. Price action saw a strong recovery from the daily support at 21.50. A rally above 23.15 indicates interest in keeping the rebound valid, following a brief end of the year sell-off. The double top at 23.40 is an important resistance on the way to 23.70. This point lies in a supply zone from the late November sell-off. A break below the psychological level of 23.00 has prompted intraday buyers to bail out. 22.60 is the closest support and its breach could drive the metal to 21.80. GER 40 rises towards an all-time high The Dax 40 rallies in hopes that Omicron lockdowns can be avoided. A bullish MA cross on the daily charts indicates improved sentiment. The rally accelerated after it cleared the supply area around 15750. The bulls are pushing towards the all-time high at 16300. A breakout could resume the uptrend, attracting trend followers in the process. The RSI surged again into the overbought territory and may temper the bullish fever. 15840 is fresh support. 15680 from the previous resistance area would be a test for buyers’ resolve.
Does gold in the beginning of 2022 remind us year 2021? What about inflation this year?

Does gold in the beginning of 2022 remind us year 2021? What about inflation this year?

Arkadiusz Sieron Arkadiusz Sieron 04.01.2022 13:14
The start of 2021 wasn’t successful for gold: after a few days of rally, the yellow metal entered a bearish trend. 2022 looks uncomfortably similar. So far, so good – the first three days of 2022 didn’t bring a new catastrophe. It’s probably just the calm before the storm, but the new year started well. Even the price of gold has risen! As the chart below shows, the yellow metal managed to jump above the key level of $1,800 at the very end of 2021, but it still maintains its position (at least as of early January 3, 2022). It reminds me of the beginning of 2021. Gold also started last year with a bang, only to plunge later. Its price increased 3.5% during the first week of the year, reaching $1,957, and then began its big downward move. As the chart below shows, the yellow metal plunged below $1,700 at the very end of March. Hence, although January is historically a good month for gold, it might be too early to celebrate, and investors should exercise caution. However, luckily for gold bulls, there is one significant difference between 2021 and 2022. Last year, there were Georgia runoffs and Democrats took over both the White House and the full Congress (the House and the Senate). That was when the blue wave plunged the yellow metal. This year should be politically calmer for the US (so, we don’t count the odds of Russia invading Ukraine and China attacking Taiwan), but the major threat to the gold market remains the same: a rise in the real interest rates. In January 2021, it was the blue wave that triggered a rebound in rates, but it may be induced by many more factors in the future. It could be the development of a new cure against coronavirus and the end of the pandemic, a more hawkish Fed, or a decline in inflation. The spread of the Omicron variant keeps worries alive. After all, as the chart below shows, the 7-day rolling average of COVID-19 cases in the United States has hit a record high of about 405,000. When we are completely back to normalcy, risk appetite and bond yields may increase. Another risk for gold is the stabilization of inflation and even subsequent disinflation. As the chart below shows, we got a one-off boost in the money supply, so inflation is likely to peak this year. Inflation expectations should ease then, and real interest rates may rebound in such a scenario. What gives me some comfort here is that the pace of money supply growth hasn’t returned to the pre-pandemic level yet, but it stays at an elevated level (although much below the peak). It should support high inflation this year. Moreover, the Fed is likely to remain behind the curve and the peak in inflation may only strengthen the dovish camp within the FOMC (although investors should remember that the composition of the voting members of the Committee has become more hawkish in 2022).   Implications for Gold What does it all imply for the gold market? Will the yellow metal resume its long-term bullish trend in 2022? Well, this is what a majority of investors that took part in Kitco News’ annual outlook survey believe. Of nearly 3,000 retail investors, 54% said they see gold prices above $2,000 by the end of the year. This is also in line with Goldman Sachs’ call for gold in 2022. Other forecasters see gold prices trading in a range between $1,800 and $2,000. It’s certainly a possible scenario. After all, much of the Fed’s tightening cycle has already been priced in; and the last time gold bottomed was in December 2015, just around the first hike in the federal funds rate after the Great Recession. However, I expect more volatile trading with strong downside potential. As a reminder, my educated guess is that gold may plunge at some point amid a rebound in bond yields, but will rise later as worries about the next economic crisis accumulate. Indeed, it’s quite funny, but I haven’t even finished this article, and the price of gold has already started to slide amid rising US dollar index and Treasury yields, in line with my warnings from the beginning of this text. This is how I became a prophet. Now I can see that as soon as you finish reading this article you will continue surfing the internet! If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
Can't skip S&P 500 (SPX) and Nasdaq

Can't skip S&P 500 (SPX) and Nasdaq

Monica Kingsley Monica Kingsley 04.01.2022 15:53
Very good S&P 500 entry to 2022, and the HYG intraday reversal is the sight to rejoice. In the sea of rising yields, both tech and value managed to do well – the market breadth keeps improving as not only the ratio of stocks trading above their 200-day moving averages shows. Likewise VIX refused to reach even 19, and instead is attacking 16.50. This is not complacency – the bulls were thoroughly shaken at the entry to the session yesterday – but a buying interest that convincingly turned the tide during the day. As I wrote yesterday: (…) thanks to the credit markets message, I‘m not reading into Friday‘s weakness much. There is still more in this rally – value held better than tech, and high yield corporate bonds didn‘t really slide. The year end rebalancing will likely give way to solid Monday‘s performance. While VIX appears to want to move up from the 17 level, it would probably take more than one day to play out. As the Santa Claus rally draws to its close, the nearest data point worth looking forward for, is Tuesday‘s ISM Manufacturing PMI. It‘ll likely show still expanding manufacturing (however challenged GDP growth is on a quarterly basis), and that would help commodities deal with the preceding downswing driven by energy and agrifoods. Both of these sectors are likely to return to gains, and especially oil is. The only sector taking a beating yesterday, were precious metals. While inflation expectations were little changed (don‘t look for inflation to go away any time soon as I‘ve been making the case repeatedly), the daily rise in yields propelled the dollar to reverse Friday‘s decline, and that knocked both gold and silver off the high perch they closed at last week. Still, none of the fundamental or monetary with fiscal policy originating reasoning has been invalidated – not even the charts were damaged badly by Monday‘s weakness. As economic growth gets questioned while fiscal policy remains expansive unlike the monetary one, volatily in the stock market together with persistent inflation would be putting a nice floor beneath the metals. Even cryptos are refusing to yield much ground, the Ethereum to Bitcoin ratio keeps trading positively, and I‘m not even talking the rubber band that commodities (crude oil and copper) are. Very good for our open positions there, as much as in the S&P 500 – let them keep bringing profits. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook Really bullish price action in both S&P 500 and Nasdaq – that was the entry to 2022 I was looking for. Embellished with prior downswing that lends more credibility to the intraday reversal. Credit Markets HYG refusing to decline more, is the most bullish sign for today imaginable – let it hold, for junk bonds now hold the key, especially if quality debt instruments keep declining steeply. Gold, Silver and Miners Gold and silver look to have reversed, but reaching such a conclusion would be premature. The long basing pattern goes on, and breakout higher would follow once the Fed‘s attempting to take the punch bowl away inflicts damage on the real economy (and markets), which is what the yield curve compression depicts. Crude Oil Crude oil is about to launch higher – and it‘s not a matter of solid oil stocks performance only. Just look at the volume – it didn‘t disappoint, and in the risk-on revival that I expect for today, black gold would benefit. Copper Copper swooned, but regained composure – the stop run is over, and we‘re back to base building for the coming upswing. Broader commodities certainly agree. Bitcoin and Ethereum Bitcoin and Ethereum are very gently leaning bullish, but I‘m not sounding the all clear there yet thanks to how long Bitcoin is dillydallying. Cryptos aren‘t yet out of the woods, but their posture has improved thus far noticeably. Summary First trading day of 2022 extended prior S&P 500 gains, and the risk-on appetite is improving as we speak. Commodities are reaping the rewards, and we‘re looking at another good day ahead, including in precious metals taking a bite at yesterday‘s inordinately large downswing. Nothing of the big factors ahead for Q1 2022 as described in today‘s analysis (I wholeheartedly recommend reading it in full for the greatest benefits – there is only so much / little that I can fit into a one paragraph summary), and that means we‘re looking at further stock market gains as the bull runs (including in commodities and precious metals, yes precious metals), aren‘t over in the least. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Tesla (TSLA) amazes (as always), this time - with a fantastic session

Tesla (TSLA) amazes (as always), this time - with a fantastic session

FXStreet News FXStreet News 04.01.2022 15:55
TSLA shares spiked 13.5% on January 3. Tesla announced 308,000 deliveries in the fourth quarter. Tesla stock almost closed a gap from early November, closing just shy of $1,200. Tesla's (TSLA) first trading session of the year was spectacular. A 13.5% gap up on the heels of a massive vehicle delivery beat seemed to even surpise the bulls. The close at $1,199.78 nearly filled the gap created by the gap down on November 8, and now TSLA shares are set to attempt the all-time high during the first week of 2022. Tesla Stock News: massive delivery beat Sunday's announcement that Tesla had delivered approximately 308,000 vehicles during the fourth quarter (a figure that may be revised higher once official Q4 earnings arrive during the final week of January) was well ahead of even Tesla's most bullish analyst and caused the massive upswing. The amateur analyst who uses the Twitter handle @TroyTeslike had forecast 289,000 deliveries, while Wall Street consensus had bet on 266,000. This positive news has all but left the market forgetting that Tesla is still dealing with a massive recall that came in right before the new year. Chinese regulators ordered Tesla to recall 19,697 Model S vehicles, 35,836 imported Model 3s and 144,208 Chinese-made Model 3 vehicles. This is part of a wide-scale recall with the US National Highway Traffic Safety Administration (NHTSA) that found the rearview camera can be damaged when the trunk is shut. Tesla is expected to recall a total of 475,000 Model 3 and Model S cars as a result. The recall amount is nearly equivalent to last year's delivery numbers. There is a bit of a kerfuffle continuing on Tuesday after it was reported on Monday that Tesla is opening a showroom in China's Xinjiang region, where the controversial detentions and reeducation of the Uighur minority carried out by the federal government has made it a focus of foreign human rights criticism. TSLA key statistics Market Cap $1.2 trillion Price/Earnings 330 Price/Sales 25 Price/Book 38 Enterprise Value $1.02 trillion Operating Margin 10% Profit Margin 7% 52-week high $1,243.49 52-week low $539.49 Short Interest 3% Average Wall Street Rating and Price Target Hold, $851.98   Tesla Stock Forecast: $1,243 is the focus TSLA shares are nearing the all-time high from November 4 of $1,243.49. With the premarket showing a small price rise to $1,205, the likelihood of achieving a new all-time high this week is high. The stock would only need to gain 3.7% to get there. To close the gap between November 5 and 8, TSLA stock needs to hit $1,208, which it likely will on Tuesday. The Relative Strength Index (RSI) is at 66, nowhere near overbought, especially for Tesla. Tesla price has a tendency to hinge on big psychological prices like $1,300. That is where Tesla is headed next. Mark my words. Support is at $1,117, $1,072 and $893. TSLA 1-day chart
Will 2022~23 Require A Different Strategy For TradersInvestors?

Will 2022~23 Require A Different Strategy For TradersInvestors?

Chris Vermeulen Chris Vermeulen 05.01.2022 16:33
Is The Lazy-Bull Strategy Worth Considering? - Part IMany traders struggled in 2021 with the extended price volatility and sideways price trends. Recently, news that Bridgewater's 2021 results were saved by December's +7.8% gain (Source: Yahoo! Finance) leads me to believe a number of independent funds and investors are going to have a tough end-of-year return for 2021.Average Hedge Fund Returns Less Than 25% Of The 2021 S&P500 GainsThe volatility in the US and global markets throughout most of 2021 took a toll on traditional trading strategies. With the VIX trading above 12 on average throughout almost all of 2021, traditional trading strategies may not have been able to adjust to this increased volatility in the US markets – getting chewed up along the way. I wrote an article series about how computerized trading strategies can fail when volatility levels increase beyond traditional boundaries a few weeks ago. You can read the first of the three part series, US Federal Reserve Actions 1999 to Present - What's Next?, and then link to the other two.(source: Aurum.com)Many of the best Hedge Funds could barely squeeze out a profit in 2021. While the S&P500 rallied more than 27% in 2021, you can see from the graphic above that the average returns for Hedge Funds in 2021 were a paltry +6.24%.Sign up for my free trading newsletter so you don’t miss the next opportunity! I expect that the US and global markets will continue to stay in extended price volatility ranges throughout all of 2022 and into 2023 as broad global market transitioning continues to take place. This expectation leads me to conclude that the “Lazy-Bull” strategy may be better suited for traders/investors over the next 24+ months than more active trading strategies.What Is The “Lazy-Bull” Strategy?The Lazy-Bull strategy is a term I use for my proprietary strategies – The Technical Investor and the Technical Index & Bond Trader. I call it the Lazy-Bull strategy because it is straightforward and only generates about 3 to 10 trades per year (on average). Many traders dislike this type of strategy because it it does not require many trades and does not provide the rush/roller coaster ride that many think they should feel while trading, which is not how it should be. Having said that, overall, this strategy has consistently produced positive annual results (CGAR average ROI 15% - 51% depending on ETF leverage, and only 7 - 21% drawdown) – beating the SPY almost every year. If you traded with the 1x, 2x, or 3x ETFs then you would have crushed the S&P 500 every year, and experienced that positive rush feeling that leverage/volatility provides.My trading style is a bit different than most other traders. My objectives consist of three very important concepts:Protect Capital At All TimesTrade Only When Strategically Opportunistic (probabilities are favorable)Trade Efficiently Using Bonds As Trade When Fear Rises among traders and investors.Through the Technical Investor and Technical Index and Bond Trading strategies, I help individuals and advisors learn how trading more efficiently using the Lazy-Bull strategies is for generating large compounded returns as shown in the SP500 chart below.I'll go further into detail regarding my strategies as we continue this multi-part article.Reading Into Q1:2022 – What To Expect?Right now, the world is waiting on Q4:2021 earnings and economic data. The first Quarter of 2022 should be very exciting for US traders as the year-end momentum of 2021 may carry forward into Q1:2022 with solid revenues and earnings. After that, we move into Q2:2022, which may be much more volatile overall.Let's look at our proprietary data mining utility to see what we might expect from the markets in the first Quarter of 2022.January 2022 has more than a 1.41:1 probability ratio of staying positive based on the past 29 years of historical data. Ideally, the average positive and negative monthly ranges are about equal – nearly $5.00. The accumulated monthly data shows that January is usually overall positive by at least $2.50 to $5.00.February 2022 has a much higher chance of extreme volatility. February 2022 shows a much greater positive to negative ratio while the possibility of a bullish February drops to a 1.33:1 probability ratio. Overall, I would suspect larger price volatility in mid to late February 2022 as the markets attempt to transition into late Q1 expectations.March 2022 has the same 1.41:1 probability ratio as January, yet the overall likelihood of extended downside price trends is about 20% greater than January.My analysis of this data suggests January and March of 2022 may surprise traders with a potential for a significant upward price move headed into Q2:2022. I believe Q4:2021 will also surprise traders as US consumers continue to engage and spend. This will lead to higher expectations for Q1:2022, which may set up a bit of a rally ahead of April/May 2022.Q1 and Q2, historically, seem to be strong in terms of traditional market growth and expectations. Yes, there have been instances when unexpected volatility disrupts the more customary types of trends – and 2022 may be one of those years. Our research shows the US Fed may make early efforts to move away from extreme easy money policies – which may shock the markets.Our research suggests the possibility of a 7% to 10% rally in the SPY in the First Quarter of 2022. If our extended research is accurate, our predictive modeling suggests more extreme price volatility may also play a significant role in how price trends/moves in 2022. Is The Lazy-Bull Strategy Worth Considering?In Part II of this article, we'll review the entire year of 2022 Quarterly Data Mining results and present more evidence that 2022 and 2023 may be years where a shift in strategy plays an important role for traders/investors. With the VIX trading above 15 more consistently, many strategies will get chewed up and spit out as the markets roll 9% - 15% up and down while attempting to transition away from the post-COVID stimulus.Get ready; 2022 will be an excellent year for traders with significant trends and bigger volatility. We just have to stay ahead of these trends to protect our capital and allow it to grow more efficiently. The risks of more traditionally moderate volatility systems getting chewed up in this extreme environment will continue. So be prepared to move towards a more protective trading style to survive the next 12 to 24 months.Want To Learn More About The Technical Investor and The Technical Index & Bond Trading Strategies?Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals.I invite you to take a few minutes to visit the Technical Traders website to learn about our Technical Investor and Technical Index and Bond Trading strategies and how they can help you protect and grow your wealth. Have a great day!
Bitcoin (BTC), Ethereum (ETH) and Crude Oil are ones you're likely to watch

Bitcoin (BTC), Ethereum (ETH) and Crude Oil are ones you're likely to watch

Monica Kingsley Monica Kingsley 05.01.2022 15:55
Another daily rise in yields forced S&P 500 down through tech weakness – the excessive selloff in growth didn‘t lead buyers to step in strongly. More base building in tech looks likely, but its top isn‘t in, and similarly to the late session HYG rebound, spells a day of stabization and rebalancing just ahead. I‘m not looking for an overly sharp move, even if the very good non-farm employment change of 807K vs. 405K expected could have facilitated one. Friday though is the day of the key figure release – till then a continued bullish positioning where every S&P 500 dip is being bought, would be most welcome. The same goes for high yield corporate bonds not standing in the way, and for credit markets to reverse yesterday‘s risk-off slant. Likewise the compressed yield curve could provide more relief by building on last few days‘ upswings in the 10- to 2-year Treasury ratio. VIX has been repelled above 17 again, and keeps looking ready to meander near its recent values‘ lower end. That‘s all constructive for stock market bulls, and coupled with the fresh surge in commodities (and precious metals), bodes well for the S&P 500 not to crater soon again. Another positive sign comes from the dollar, which wasn‘t really able to keep intraday gains in spite of the rising Treasury yields. Cryptos though remain cautious (unlike precious metals which moved nicely off Monday‘s oversold levels – on a daily basis oversold), so we‘re in for a muddle through with a generally and gently bullish bias this week… until non-farrm payrolls surprise on Friday (and markets would probably interpret it as a reason to rise). Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 keeps respectably treading water, waiting for Nasdaq to kick in – odds are we won‘t have to wait for a modest upswing in both for too long. Credit Markets HYG is the key next – holding above yesterday‘s lows would give stocks enough breathing room, and so would however modest quality debt instruments upswing. Gold, Silver and Miners Gold and silver are leading miners, but the respectable daily volume makes up for this non-confirmation. The table is set for the floor below gold and silver to hold, while a very convincing miners move has to still wait. Crude Oil Everything is ready for the crude oil upswing – even if oil stocks pause next, which can be expected if tech stages a good rally. Until then, it‘s bullish for both $WTIC and $XOI. Copper Copper is keeping the upswing alive, and any pullbacks don‘t have good odds of taking the red metal below 4.39 lastingly. Still, copper remains range bound for now, and the pressure to go higher, is building up. Bitcoin and Ethereum Bitcoin and Ethereum lost the bullish slant, but didn‘t turn bearish yet – this hesitation is disconcerting, but it would be premature to jump the gun. It‘s still more likely that cryptos would defy the shrinking global liquidity, and try to stage a modest rally. Summary S&P 500 internals reveal tech getting hurt yesterday, and at the same time getting ready for a brief upswing of the dead cat bounce flavor. And if HYG kicks back in, odds increase dramatically that the tech (and by extension S&P 500) upswing won‘t be a dead cat bounce (please note that I‘m not implying vulnerability to a large downswing) – that‘s my leading scenario, which should materialize by Friday‘s market open. Yes, I‘m looking for non-farm payrolls to be well received once the dust settles. Till then, commodities are paving the way for further stock market gains, with precious metals turning out not too shabby either. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Will 2022~23 Require Different Strategies For TradersInvestors Part II

Will 2022~23 Require Different Strategies For TradersInvestors Part II

Chris Vermeulen Chris Vermeulen 06.01.2022 00:19
Is The Lazy-Bull Strategy Worth Considering? Part III started this article by highlighting how difficult some 2021 strategies seemed for many Hedge Funds and Professional Traders. It appears the extreme market volatility throughout 2021 took a toll on many systems and strategies. I wouldn't be surprised to see various sector ETFs and Sector Mutual Funds up 15% to 20% or more for 2021 while various Hedge Funds struggle with annual returns between 7% and -5% for 2021.After many years in this industry and having built many of my own strategies over the past decade, I've learned one very important facet of trading strategy development – expect the unexpected. A friend always told me to "focus on failure" when we developed strategies together. His approach to strategy design was "you develop it do too well in certain types of market trends and volatility. By focusing on where it fails, you'll learn more about the potential draw-downs and risks of a strategy than ignoring these points of failure". I tend to agree with him.In the first part of this research article, the other concept I started discussing was how traders/investors might consider moving away from strategies that struggled in 2022. What if the markets continue trending with extreme volatility throughout 2022 and into 2023? Suppose your system or strategy has taken some losses in 2022, and you have not stopped to consider volatility or other system boundaries as a potential issue. In that case, you may be looking forward to a very difficult 12 to 14+ months of trading in 2022 and 2023.Volatility Explodes After 2017Current market volatility/ATR levels are 300% to 500% above those of 2014/2015. These are the highest volatility levels the US markets have ever experienced in the past 20+ years. The current ATR level is above 23.20 – more than 35% higher than the DOT COM Peak volatility of 17.15.As long as the Volatility/ATR levels stay near these elevated levels, traders and investors will likely find the markets very difficult to trade with strategies that cannot properly adapt to the increased risks and price rotations in trends. Simply put, these huge increases in price volatility may chew up profits by getting stopped out on pullbacks or by risking too much in terms of price range/volatility.Sign up for my free trading newsletter so you don’t miss the next opportunity!The increased volatility over the past 5+ years directly reflects global monetary policies and the COVID-19 global response to the crisis. Not only have we attempted to keep easy money policies for far too long in the US and foreign markets, but we've also been pushed into a hyperbolic price trend that started after 2017/18, which has increased global debt consumption/levels to the extreme.2022 and 2023 will likely reflect a very strong revaluation trend which I continue to call a longer-term "transition" within the global markets. This transition will probably take many forms over the next 24+ months – but mostly, it will be about deleveraging debt levels and the destruction of excess risk in the markets. In my opinion, that means the strongest global economies may see some strength over the next 24+ months – but may also see extreme price volatility and extreme price rotation as this transition takes place.Expect The Unexpected in 2022 & 2023The US major indexes had an incredible 2021 – rallying across all fears and COVID variants. The NASDAQ and S&P500 saw the biggest gains in 2021 – which may continue into early 2022. Yet I feel the US markets will continue to transition as the global markets continue to navigate the process of unwinding excess debt levels and potentially deleveraging at a more severe rate than many people expect.Because of this, I feel the US markets may continue to strengthen as global traders pile into the US Dollar based assets in early 2022. Until global pressures of deleveraging and transitioning away from excesses put enough pressure on the US stock market, the perceived safety of US assets and the US Dollar will continue as it is now.(Source: www.StockCharts.com)Watch For Sector Strength In Early 2022 As Price-Pressure & Supply-Side Issues Create A Unique Opportunity For Extended Revenues/ProfitsI believe the US markets will see a continued rally phase in early 2022 as Q4:2021 revenues, earnings, and economic data pour in. I can't see how any global economic concerns will disrupt the US markets if Q4:2021 data stays stronger than expected for US stocks and the US economy.That being said, I do believe certain sectors will be high-fliers in Q1:2022 and Q2:2022 – at least until the supply-side issues across the globe settle down and return to more normal delivery expectations. This means sectors like Automakers, Healthcare, Real Estate, Consumer Staples & Discretionary, Technology, Chip manufacturers, and some Retail segments (Construction, Raw Materials, certain consumer products sellers, and specialty sellers) will drive a new bullish trend in 2022.The US major indexes may continue to move higher in 2022. They may also be hampered by sectors struggling to find support or over-weighted in symbols that were over-hyped through the end of 2020 and in early 2021.I have been concerned about this type of transition throughout most of 2021 (particularly after the MEME/Reddit rally phase in early 2021). That type of extreme trending usually leads to an unwinding process. I still don't believe the US and global markets have completed the unwinding process after the post-COVID extreme rally phase.(Source: www.StockCharts.com)Will The Lazy-Bull Strategy Continue To Outperform In 2022 & 2023?This is a tricky question to answer simply because I can't predict the future any better than you can. But I do believe moving towards a higher-level analysis of global market trends when the proposed "transitioning" is starting to take place allows traders to move away from "chasing price spikes." It also allows them to position for momentum strength in various broader market sectors and indexes.I suspect we'll start to see annual reports from some of the biggest institutional trading firms on the planet that show feeble performance in 2021. This recent article caught my attention related to Quant Funds in China.I believe we will see 2022 and 2023 stay equally distressing for certain styles of trading strategies while price volatility and an extreme deleveraging/transitioning trend occur. Trying to navigate this type of choppy global market trending on a short-term basis can be very dangerous. I believe it is better to move above all this global market chop and trade the bigger momentum trends in various sectors and indexes.Part III of this research article will focus on Q1 through Q4 expectations for 2022 and 2023. I will highlight broader sector/index trends that may play out well for investors and traders who can move above the low-level choppiness in the US and global markets.WANT TO LEARN MORE ABOUT THE TECHNICAL INVESTOR AND THE TECHNICAL INDEX & BOND TRADING STRATEGIES?Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may begin a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals.I invite you to take a few minutes to visit the Technical Traders website to learn about our Technical Investor and Technical Index and Bond Trading strategies and how they can help you protect and grow your wealth.Have a great day!
Game of Chicken

Game of Chicken

Monica Kingsley Monica Kingsley 06.01.2022 16:18
FOMC minutes didn‘t reveal fresh hawkish tunes, but markets were caught off guard – unlike 3 weeks ago during the statement and press conference. It‘s as if S&P 500 and pretty much everything else woke up to the hawkish reality only now. In spite of the new liquidity powered Santa Claus rally, the sudden realization that the March Fed meeting might very well bring in a first rate hike, forced a sharp downturn across the board.The dollar wasn‘t too affected by the daily rise in yields that hit junk bonds particularly hard. The yield curve keeps being compressed, and is getting closer to the point of inversion. The likely good employment data on Friday would provide the Fed with a convenient cover to embark on and keep pursuing the tightening route. Not that it would have the power to break inflation (even at the professed very accelerated tapering pace – let alone the relatively measly hikes when CPI, PPI or PCE deflator are considered) – this game of chicken with the markets risks a tantrum that could bring up the „fond memories“ of Dec 2018.Yes, the risks of crashing the airplane would grow up over the coming weeks and months – the Fed is walking a very tight rope indeed. Markets are spooked, and the coming days would show whether this is already the start of something worse, or whether we can still shake it off and continue upwards till the Olympics. I‘m still leaning towards the latter.Anyway, good to have closed the profitable S&P 500 and crude oil positions in time.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookTech understandably declined more than value – thanks to yields. S&P 500 bottom might not yet be in really. Bonds and tech need to stabilize first.Credit MarketsHYG is still holding the key, and would provide an early turnaround sign. The plunge in LQD isn‘t looking short-term encouraging in the least – the dust hasn‘t yet settled.Gold, Silver and MinersGold and silver still haven‘t left the sideways consolidation pattern – the white metal would be more affected through the inflation taming fears. That‘s though a premature calculation as inflation might turn out less amenable to be put down fast.Crude OilUnlike practically everything else, crude oil recovered strongly from the FOMC-induced setback – and certainly looks like the strongest of the pack at the moment.CopperCopper gave up advantageous position, and isn‘t really following (energy-led) commodities up yet. The long sideways consolidation is testing the bulls‘ resolve even as the pressure to go higher is building up. The same for silver, by the way.Bitcoin and EthereumBitcoin and Ethereum clearly lost the remainder of the bullish posture – it‘s turning out they aren‘t ready to defy the shrinking global liquidity.SummaryS&P 500 bulls look to get under some more pressure before the repeated hawkish message gets absorbed. The bond markets coupled with the dollar would reveal just how serious the bulls are about buying this dip and now. My bet is that they would remain shaken, and looking hesitantly for a floor. If there is one overarching message from yesterday, it‘s that the hawkish Fed appreciation has been woefully misapprehanded, and if followed through on in its entirety, would lead to a dangerous game of chicken with the markets (we aren‘t there quite yet).Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Why Successful Traders Make More By Trading Less

Why Successful Traders Make More By Trading Less

Chris Vermeulen Chris Vermeulen 06.01.2022 18:20
During my 25 years of trading and mentoring others, I have been dragged through the coals a few times. And by that, I mean I have; blown up a few trading accounts; had some massive gains only to watch them turn into worthless penny stocks, and; I even had one trade based around the volatility index blow up and become worthless the day after I bought it. I've had many other painful and costly trading experiences between those as well, and I know there will be more in the future. This leads me to the first topic I would like to talk about – learning through experience.#1 - Learned Through Expensive ExperiencesI help a lot of traders each year from all walks of life. They range from 18 to 85+ years of age. Some are total newbies, financial advisors, money managers, all the way up to billionaires. What is apparent is that the most successful traders (those who make money year after year) have the same things in common with how they trade. They all: walk a straight and somewhat unemotional line outside of learning from losses and trading mistakes.  focus on managing their capital because they understand just how quick and easy it is to lose money, which is why they focus and follow strict rules. follow very specific trading strategies/rules and do not trade on emotions. protect their capital ALWAYS with stops and position management only trade specific trade setups that put the probabilities in their favor focus heavily on index and bond positions say their trading feels slow/boring most of the time trade multiple strategies#2 - Ignore High Flying, News, Manipulated, and Hype Based MovesIt's hard not to participate in some of these wild rallies and stock crashes we have seen over the last couple of years. It's a natural tendency to want to take part in what everyone else is doing, and the lure of instant oversized gains is powerful. But, unfortunately, most individuals who get involved in these trades lose money for a good reason. They are trading based on greed/emotions with no real measured trading plan.Don't get me wrong; I'm not saying, "don't trade these stocks." In fact, many of these are incredible opportunities for experienced traders. These types of stocks generally become ideal for day traders and even momentum and aggressive swing traders. They can provide some quick extra cash. But that's what these types of trades are - small, fast, higher risk trades that only a seasoned trader should trade.Sign up for my free trading newsletter so you don’t miss the next opportunity!For some reason, traders come into this business thinking it's a game and believes these are the types of trades that should always be traded. They take oversized positions only to experience significant damaging losses to their account.I conducted a survey a little while back, and the survey results blew my mind. Most people want to trade the volatile media-driven hype stocks and commodities. People fall in love with specific assets and want to trade only those, even if there are better assets and more efficient ways to pull money out of the market.The results below frustrate the heck out of me because, to me, it makes no logical sense if you are in the market to make money.Trader Survey Results Confirm Why it is Hard To Make MoneyThe above results make sense as studies have proven that humans react seven times more based on emotions versus logic. This is why the stock market has such wild price swings with Euphoric blowoff tops and Panic washout lows.People are highly addicted to riding their emotions (adrenaline/dopamine), and they love the rush of fast-moving stocks and gambling, which is why the markets are regulated, along with casinos, for that matter. Simply put, people lose control of common sense and logic when they are on tilt with emotion.Fast-moving assets with extreme volatility act as a bug-zapper light, which attracts bugs, only to kill anything that gets too close. In this case, new traders think they can make quick and easy money from hot stock in the news.Trading is a numbers game, and it requires logic, rules,and a proven strategy to win long-term.Based on the survey we did with thousands of traders, you can see that making the same amount of money with fewer trades and lower risk is not that exciting. Instead, traders prefer high volatility assets like metals, and natural gas, which are manipulated and have large wild price swings.Also, from a trading statics point of view, those two are among the most difficult to trade.As a pilot, I know the importance of keeping calm, having checklists/rules, and systems in place. Without them, you will eventually crash and burn; it is just a matter of time. The same holds true for trading and investing in that you need to trade what makes the most money, trade only the best setups, and have the lowest risk.Hottest Symbols vs Biggest TrendsBottom line, I don't care about trading every day or trying to catch the hottest symbols everyone is talking about. Instead, I care about catching and riding the biggest trends in the US stock index and the Treasury Bond ETFs. These are highly liquid sentiment trends that produce oversized gains each year. This is also the reason ETFs have taken over the mutual fund market and why financial advisors and hedge funds primarily trade/own stock index funds and bonds.Through the Technical Index and Bond ETF Trading strategy, I help individuals and advisors trade more efficiently. This strategy trades SPY, SSO, SPXL, QQQ, QLD, TQQQ and TLT, TBT, TMF, which generate large, compounded returns as shown in the chart below:This proprietary ETF trading strategy is straightforward and only generates about 3 to 10 trades per year. Most traders dislike this type of strategy because it lacks lots of action and volatility. If you noticed, you won't find many professional advisors telling you to jump into the fast-moving hype stocks, and for a good reason - they know better and want to protect your hard-earned capital. #3 - The Power Of Slow & Steady Gains Are Mind-Bending!As I learned a long time ago (and this holds true for almost everything across the board), learning something new, like mastering how to trade slower, consistent strategies, can take some getting used to. Everything new will always be a challenge, but once you master something, it becomes simple, low stress, and you will experience more consistent results.Take a look at this data from an Atalanta Sosnoff report. This should get my point across about how powerful slow, boring, consistent returns pack a powerful punch and why thousands of traders from 82 countries follow my index and bond trading signals.Source: Eagle Asset Management.The Technical Index & Bond ETF trading strategy has consistently produced positive annual results (CGAR average ROI 15% - 51% depending on ETF leverage, only 7 - 21% max drawdown). If you traded with the 2x or 3x ETFs, you would have crushed the S&P 500 every year and experienced that rush feeling that leverage/volatility provides but within a safer/smarter way.Passive trading styles like this are a bit different from those you may have traded in the past. My objectives consist of four very important concepts:Protect Capital At All Times.Trade Only When Strategically Opportunistic (probabilities are favorable).Trade Efficiently Using Bonds As Trade When Fear Rises among traders and investors.Move to cash or money market fund when the index and bonds are both out of favor.Concluding Thoughts:In short, I hope this has helped confirm your thinking of trading less and focusing on more solid trade setups. Or maybe it has opened your eyes to the world of slow and steady gains wins the race, with much less stress and effort.If you are interested in learning more about TIBT – Technical Index & Bond Trader, I invite you to visit www.TheTechnicalTraders.com/twa 
Santa comes on a roller coaster this year! | MarketTalk: What’s up today? | Swissquote

Taking XAU/USD and NFP into consideration...

FXStreet News FXStreet News 05.01.2022 15:57
Nonfarm Payrolls in US is forecast to increase by 400,000 in December. Gold is likely to react more significantly to a disappointing jobs report than an upbeat one. Gold's movement has no apparent connection with NFP deviation four hours after the release. Historically, how impactful has the US jobs report been on gold’s valuation? In this article we present results from a study in which we analyzed the XAU/USD’s pair reaction to the previous 18 NFP prints*. We present our findings as the US Bureau of Labor Statistics (BLS) gets ready to release the December jobs report on Friday, January 7. Expectations are for a 400,000 rise in Nonfarm Payrolls following the 210,000 increase in November. *We omitted the NFP data for March 2021, which was published on the first Friday of April, due to lack of volatility amid Easter Friday. Methodology We plotted gold price’s reaction to the NFP release at 15 minutes, one hour and four hours intervals after the release. Then we compared the gold price reaction to the deviation between the actual NFP release result and the expected result. We used the FXStreet Economic Calendar for data on deviation as it assigns a deviation point to each macroeconomic data release to show how big the divergence was between the actual print and the market consensus. For instance, the August NFP data missed the market expectation of 750,000 by a wide margin and the deviation was -1.49. On the other hand, February’s NFP print of 536,000 against the market expectation of 182,000 was a positive surprise with the deviation posting 1.76 for that particular release. A better-than-expected NFP print is seen as a USD-positive development and vice versa. Finally, we calculated the correlation coefficient (r) to figure out at which time frame gold had the strongest correlation with an NFP surprise. When r approaches -1, it suggests there is a significant negative correlation, while a significant positive correlation is identified when r moves toward 1. Since gold is defined as XAU/USD, an upbeat NFP reading should cause it to edge lower and point to a negative correlation. Results There were ten negative and seven positive NFP surprises in the previous 17 releases, excluding data for March 2021. On average, the deviation was -0.93 on disappointing prints and 0.47 on strong figures. 15 minutes after the release, gold moved up by $3.87 on average if the NFP reading fell short of market consensus. On the flip side, gold gained $0.03 on average on positive surprises. This finding suggests that investors’ immediate reaction is likely to be more significant to a disappointing print. However, the correlation coefficients we calculated for the different time frames mentioned above don’t even come close to being significant. The strongest negative correlation is seen 15 minutes after the releases with the r standing at -0.4. One hour after the release, the correlation weakens with the r rising to -0.23 and there is virtually no correlation to speak of four hours after the release with the r approaching 0. Several factors could be coming into play to weaken gold’s correlation with NFP surprises. Several hours after the NFP release on Friday, investors could look to book their profits toward the London fix, causing gold to reverse its direction after the initial reaction. Additionally, US Treasury bond yields’ movements have been impacting gold’s action lately and a decline in the benchmark 10-year T-bond yield on an upbeat jobs report could make it difficult for the USD to gather strength against its rivals, limiting XAU/USD’s downside.    
Shiba Inu price could surge 30% if SHIB can overcome this hurdle [Video]

Shiba Inu price could surge 30% if SHIB can overcome this hurdle [Video]

FXStreet News FXStreet News 07.01.2022 15:56
Shiba Inu price bounces off the daily demand zone, extending from $0.0000269 to $0.0000293.Increased buying pressure could propel SHIB by 31% to sweep the range high at $0.0000399.A four-hour candlestick close below $0.0000269 will create a lower low, invalidating the bullish thesis.Shiba Inu price is at an interesting point in its journey since it has produced two areas of liquidity in the opposite direction. Adding to this exciting development is one hurdle that blocks the path for SHIB and might hinder the bullish outlook.Shiba Inu price prepares for a rallyShiba Inu price set up two swing lows at $0.0000283 on December 20, 2021, and January 5, creating the double bottom setup. Interestingly, this setup took place inside the daily demand zone, extending from $0.0000269 to $0.0000293.While SHIB has recovered above this area, it needs to rally 12% before it faces the trading range’s midpoint at $0.0000341. Clearing this barrier will lead the meme coin to face $0.0000349, which harbors the buy-stop liquidity resting above it. Shiba Inu price needs to clear $0.0000349 before it can reach the range high at $0.0000399, completing its 31% ascent.SHIB/USDT 4-hour chartDepicting the importance of the hurdle at $0.0000349 is IntoTheBlock’s Global In/Out of the Money (GIOM) model. This on-chain metric shows that roughly 110,570 addresses that purchased 82,785 billion SHIB tokens at an average price of $0.0000350 are underwater.Therefore, Shiba Inu price needs to flip this barrier to reduce the selling pressure from holders trying to break even.Beyond this area, the resistance barriers thin out until $0.0000680, supporting the bullish outlook detailed above.SHIB GIOMFurther indicating the oversold nature of Shiba Inu price is the Market Value to Realized Value (MVRV) model. This on-chain metric is used to determine the average profit/loss of investors that purchased SHIB over the past month.Currently, 30-day MVRV is hovering at -11.53%, an opportunity zone, suggesting that SHIB holders are at a loss and are less likely to sell their tokens. Moreover, long-term holders tend to accumulate in this area, which could serve as a significant source of buying pressure and could be the reason to kick-start an uptrend.SHIB MVRVWhile things are looking up for Shiba Inu price, a four-hour candlestick close below the daily demand zone’s lower limit at $0.0000269 will create a lower low, invalidating the bullish thesis. This development could trigger a crash, knocking Shiba Inu price to retest the $0.0000237 support level.
Honeymoon Is Over?

Honeymoon Is Over?

Monica Kingsley Monica Kingsley 07.01.2022 16:03
S&P 500 didn‘t shake off the post-FOMC minutes selloff in the least – and credit markets don‘t offer much short-term clarity either. Probably the brightest sign comes from the intraday reversal in financials higher – but tech still isn‘t catching breadth, which is key to the 500-strong index recovery. Bonds remained in the count down mode, as in not yet having regained composure and risk-on posture.The bottom might not be in, taking more time to play out – if we see a really strong non-farm payrolls figure, the odds of Fed tapering and rate hiking seriously drawing nearer, would be bolstered – to the detriment of most assets. So, we could be looking at a weak entry to today‘s S&P 500 session. But as the data came in at measly 199K, more uncertainty is introduced – will they or won‘t they (taper this fast and hike) – which works to drive chop and volatility.We‘re looking at another risk-off day today – and a reflexive but relatively tame rally in quality debt instruments. Crude oil is likely to be least affected, followed by copper as the red metals takes a second look at its recent weakness going at odds with broader commodities strength. Precious metals look to be a better bet in weathering the tightening into a weak economy storm than cryptos.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookNeither tech nor value offered clues for today‘s session – the downswing overall feels as having some more to go still, and that‘s based on the charts only. Add in the fundamentals, and it could get tougher still.Credit MarketsHYG upswing solidly rejected, and not even high volume helped the bulls – the dust doesn‘t look to be settled here either.Gold, Silver and MinersGold and silver feel the heat, and it might not be yet over in the short run, miners say. Still, note the big picture – we‘re still in a long sideways consolidation where the bears are unable to make lasting progress.Crude OilCrude oil bulls are enjoying the advantage here – firmly in the driver‘s seat. Pullback are being bought, and will likely continue being bought – the upcoming maximum downside will be very indicative of bulls‘ strength to overcome $80 lastingly.CopperCopper‘s misleading weakness continues, and similarly to precious metals, it‘s bidding its time as no heavy chart damage is being inflicted through this dillydallying.Bitcoin and EthereumBitcoin and Ethereum are in a weaker spot, and the bearish pressure may easily increase here even more. This doesn‘t look to be the time to buy yet.SummaryS&P 500 still remains on edge and under pressure until convincing signs of turnaround develop – yesterday‘s session didn‘t qualify. With further proof of challenged real economy, a fresh uncertainty (how‘s that going to weather the hawkish Fed, and are they to listen and attenuate, or not?) is being introduced – short-term chop would give way to an increase in volatility. In the non-farm payrolls aftermath, markets haven‘t yet made up their minds – it‘s the riskier end of the asset classes to take the heat the most here (starting with cryptos). Don‘t look though for a tremendous rush into Treasuries – tech decoupling from the rising yields would be a first welcome sign of a local bottom.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Will 2022~23 Require A Different Strategy For Traders/Investors? Part III

Will 2022~23 Require A Different Strategy For Traders/Investors? Part III

Chris Vermeulen Chris Vermeulen 08.01.2022 13:50
Is The Lazy-Bull Strategy Worth Considering? - Part IIIThis last part of our multi-part article compares trading styles amidst the increasing price volatility and extended hyperbolic trending. We'll explore what we've witnessed in the US markets over the past 5+ years and highlight what to expect throughout 2022. Additionally, we'll highlight and feature the strategic advantages of our advanced Lazy-Bull strategies.Lazy-Bull Rides Big Trends & Avoids Excessive RisksMany people are inherently opposed to the Lazy-Bull strategy because they've been conditioned to think trading requires actively seeking various opportunities every week. We don't quite see it that way. Instead, we see the opportunity for growth and consistency existing in taking 4 to 12+ strategic trades per year while the markets set up broad momentum moves/trends. Our objective is not to trade excessively just for the sake of trading. Instead, we want to take advantage of when the markets enter opportunistic periods of trending and ride those trends as far as they go.Sign up for my free trading newsletter so you don’t miss the next opportunity!This example Weekly SPY chart showing our TTI trading strategy highlights the growth phases in various trend stages. Notice the GREEN and RED sections on this chart where our system has identified directional changes in the major price trends. Over the past 11+ years, there have been numerous bullish price trend phases resulting in 12 months to 36+ months bullish price trend trends. These major price cycles make up part of the advantage of the Lazy-Bull strategy.We are not actively seeking the strongest stock symbols throughout these trends. Instead, we are simply relying on the strength of the US major indexes to carry our trades further into profits as the market's trend. The TTI strategy is a "set it – and forget it" type of strategy until the strategy generates a new entry or exit trigger.Volatility & Price Rotation Make 2022 More Dangerous Than 2021 – What Next?Our research shows 2022 will likely continue to exhibit increased price volatility and bigger price rotation. Meaning 2022 could be very dangerous for shorter-term strategy traders as volatility levels may disrupt traditional stop boundaries or other aspects of their defined strategies.It is important to understand how and when these issues creep into a strategy and attempt to move above these issues.Looking at the Q1 through Q4 data using our proprietary Data mining utility, I'll give you my insight related to the data and what I believe is likely to happen in 2022. Remember, this data consolidated the past 28-29 years of trends in the SPY to present these results – going back to 1993. That means that this data is compiled through several various price trends, major market peaks, major market bottoms, and various volatility levels along the way.Q:2022 AnalysisQ1 data suggests an overall positive/upward price trend is likely in 2022, with the Total Monthly Sum across 29 years totaling 37.94. Broken into annual gains, that translates into an expected $1.30 gain in the SPY in Q1:2022.The Total Monthly NEG (negative) range appears to be more than double the Total Monthly POS (positive) range. However, we may see some price volatility in Q1:2022 that surprises the markets. For example, maybe the US Fed makes surprise rate increases? Perhaps it relates to some other foreign market event disrupting the US markets? I don't know what it will be, but I feel some market event in Q1 is likely, and this event may prompt a fairly large downward price rotation in the SPY.Overall, I believe Q1:2022 will end slightly higher than the end of Q4:2021 levels and may see the SPY attempt to break above $490~500 on stronger earnings and continue the market's bullish price phase.Q2:2022 AnalysisThe second quarter seems a bit more stable in overall price appreciation trends. The data shows a shallow NEG value compared to a moderately strong POS value for Q2. Because of this, I believe the second quarter of 2022 will slide into a relatively strong upward Melt-Up type of trend after a potentially volatile Q1:2022.The Total Monthly Sum value is higher in Q2 than in Q1, suggesting Q2 may exhibit a stronger upward momentum as a more apparent trend direction sets up after the Q1 volatility.The US Fed will likely attempt to aggressively reduce its balance sheet throughout Q2 and into Q3:2022 if my expectations are accurate. This may create some additional market volatility in Q2 and Q3:2022 – but I suspect the US Fed will attempt to conduct a lot of this activity relatively quietly – almost behind the market strength/trends.Q3:2022 AnalysisQ3 shows data that is somewhat similar to Q1 overall. I interpret this data as showing moderate bullish trend strength within the typical mid-Summer US market stagnation in trend. Mid-Summer trends tend to be a bit more sideways in nature. Many traders are vacationing, enjoying the Summer weather, and/or not paying attention to market trends and dynamics. Because of this, I expect the July through September months of 2022 to be relatively quiet and mundane.Additionally, we have the mid-term US elections set up in November 2022. The July through September months will be packed with political posturing, campaigning, and various events filled with antics to distract the markets from focusing on real issues. As a result, election years tend to be somewhat quiet – especially in the 2 to 5 months leading up to the actual election date.The end of Q3:2022 and the start of Q4:2022 could see some bigger, more aggressive price trending. The elections, ramping up of the early holiday/Christmas seasons, and the end of Summer may prompt traders to move into undervalued assets or other opportunist trades seeking to ride out an end-of-year trend. Right now may be a great time to identify strong swing/position trades to close out 2022 with some nice profits.Q4:2022 AnalysisQ4:2022 shows a very strong bullish trend potential, with the POS results greatly surpassing the NEG results. Historically, this is because of the traditional Santa Rally phase of the US markets and may play a big role in 2022 if the US economy stays strong throughout 2022.Overall, I expect the US Fed to act in a manner that supports the "transitioning" of the global markets away from excessive risks while attempting to nudge inflationary trends lower. There is talk that the US Fed may take aggressive action to combat inflation, but I see the Fed's actions are more subtle than brutal at this stage.I believe the US Federal Reserve is keenly aware of the fragility of the global markets after many years of excessive easy-money policies. In my opinion, the current market environment is more similar to the late 1960s and 1970s than the 1990s and early 2000 time frame. We've seen a massive influx of capital in the global markets – push all traditional economic metrics "off the charts" after the COVID event. That capital will work itself throughout the global economy, disrupting more at-risk companies and nations' capabilities, but still prompt a moderate growth component for many years to come.Volatility, Trading, And Profiting From Bigger TrendsThe entire point was to discuss the opportunities of moving above the current excessive price volatility and adopting a trading strategy that is more suited to bigger, broader market price trends. In 2019, I warned that 2020 was likely to be very volatile.In February 2021, I warned that 2021 was likely to be very volatile for certain market sectors: WILL 2021 PROMPT A BIG ROTATION IN SECTOR TRENDS? – PART IIIn early January 2020, I warned the US markets may be set up for a "Waterfall Selloff": ARE WE SETTING UP FOR A WATERFALL SELLOFF?Today, I'm suggesting that price volatility will likely peak sometime in 2022 or 2023 and begin to subside as the excesses of the past 8+ years continue to process through what I'm calling the "transitioning phase" of the markets. This market phase is more of a deleveraging and revaluation phase which started in February 2020 – in various sectors. It has now extended into many global economies where excess risk factors are being addressed and revalued (think China, Asia, and other areas).This transitioning process will likely continue in 2022 and 2023, meaning traders need to be prepared for the increased price volatility and adopt a style of trading that will allow them to profit from these bigger trends. This is why I'm suggesting taking a higher-level approach to trade over the next 24 to 36+ months.Certain market trends will still allow traders to pick up some fantastic profits as sectors and various undervalued symbols gain momentum. Overall, though, I feel that 2022 and 2023 will be moderately difficult for shorter-term trading strategies and that a higher-level, longer-term approach may be a much more beneficial approach.Want To Learn More About My Long-Term Investing Strategy?My Technical Investor strategy is uniquely suited toward this type of trading style. It is simple, longer-term, and rises above the moderate price volatility that disrupts many shorter-term trading strategies.Get ready; 2022 will be an excellent year for traders with big trends and bigger volatility. We have to stay ahead of these trends to protect our capital and allow it to grow more efficiently. The risks of more traditionally moderate volatility systems getting chewed up in this extreme environment will continue. So be prepared to move towards a more protective trading style to survive the next 12 to 24 months.If you are interested in learning more about how my Technical Investor (and other trading strategies) can help you protect and grow your wealth in any type of market condition, I invite you to visit  www.TheTechnicalTraders.com 
Miners Should Prepare a Pillow: Gold's Hard Landing Can Hurt

Miners Should Prepare a Pillow: Gold's Hard Landing Can Hurt

Przemysław Radomski Przemysław Radomski 07.01.2022 15:54
  As in sports, a weak market streak can reverse in the next season. However, the precious metals team looks like it’s about to drop out of the league. While gold, silver, and mining stocks were in the holiday spirit during the final weeks of 2021, I warned on Jan. 4 that the GDXJ ETF’s sleigh was headed for an epic crash. I wrote: The GDXJ ETF’s corrective upswing has likely run its course. Interestingly, the junior miners’ current rally mirrors the small correction that materialized in mid-2021 (early August). Back then, the GDXJ ETF rallied on low volume and didn’t recapture its 50-day moving average. With the same tepid strength present today, the drawdown that followed in mid-2021 will likely commence once again. On top of that, the behavior of the GDXJ ETF’s RSI is also similar – with the indicator moving from roughly 30 to 50. For context, I highlighted the similarities with green and purple ellipses below. Also noteworthy, similar developments occurred in February/March 2020, before the profound plunge unfolded. As a result, the GDXJ ETF looks set for another sharp drawdown over the medium term. After the junior mining stocks ETF proceeded to decline by more than 6% in two days, my short position rang in the New Year with solid gains. What’s more, with the GDXJ ETF likely to break below its 2021 lows over the medium term, winter woes should materialize before a long-term buying opportunity emerges. Please see below: Likewise, with the GDX ETF’s RSI (Relative Strength Index) signaling an ominous outcome for the senior miners, I warned that a sell-off was likely on the horizon. For context, I highlighted the historical similarities with the blue vertical dashed lines below. Moreover, with the GDX ETF’s weakness accelerating on Jan. 5/6, the senior miners have declined sharply in recent days. In addition, the current price action mirrors the senior miners’ ominous performance in July/August 2021 – just like I’ve been describing it for a few weeks now. As a result, the previous corrective upswing is likely over, and the GDX ETF should confront lower lows sooner rather than later. For context, a breakdown below the 2021 lows should materialize over the medium term, and the forecast for gold, as well as gold stocks, is bearish for the next several weeks / months. However, the milestone may not occur over the next few days. Turning to the HUI Index’s long-term chart, the same bearish signals are present. For example, I marked the specific tops with red and black arrows. In the current situation, we saw yet another small move up, but that’s most likely because the price moves are now less volatile. The areas marked with red ellipses remain similar and show back-and-forth movement before the big decline. As such, while we’ve entered a consolidation phase, this week’s selling pressure has been quite ferocious. Thus, the implications are not bullish but bearish. Finally, the GDX/GDXJ ratio continues to perform as expected. For example, I warned throughout 2021 that the ratio was destined for devaluation. ith the metric kicking off 2022 with another decline, the GDXJ ETF continues to underperform the GDX ETF. For context, I believe that gold, silver, and the GDX ETF are all ripe for sharp re-ratings over the medium term. However, I think that the GDXJ ETF offers the best risk-reward ratio due to its propensity to materially underperform during bear markets. As a result, shorting junior miners offers a great risk to reward trade-off. In conclusion, gold, silver, and mining stocks began 2022 with the same weakness that plagued them in 2021. While the worst performers one year often become the best performers the next, the charts signal more weakness ahead. As a result, while the precious metals are poised to soar over the long term, lower lows will likely materialize before their secular uptrends resume. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Fed Hawks Grow Stronger. Will Gold Stand Its Ground?

Fed Hawks Grow Stronger. Will Gold Stand Its Ground?

Arkadiusz Sieron Arkadiusz Sieron 06.01.2022 16:43
  2022 may be the year of Fed hawks. After tapering, they may hike rates and then start quantitative tightening. Will they tear gold apart? During the Battle of the Black Gate in the War of the Ring, Pippin : “The eagles are coming!”. It was a sign of hope for all those fighting with Sauron. Now, I could exclaim that hawks are coming, but that wouldn’t necessarily give hope to anyone fighting the bearish trends in the gold market. Yesterday (January 5, 2022), the FOMC published the minutes from its last meeting, held in mid-December. Although the publication doesn’t reveal any revolutions in US monetary policy, it strengthens the hawkish rhetoric of the Fed. Why? First, the FOMC participants acknowledged that inflation readings had been higher, more persistent, and widespread than previously anticipated. For instance, they pointed to the fact that the trimmed mean PCE inflation rate, which trims the most extreme readings and is calculated by the Dallas Fed, had reached 2.81% in November 2021, the highest level since mid-1992, as the chart below shows. It indicates that inflation is not limited to a few categories but has a broad-based character. The Committee members also noted several factors that could support strong inflationary pressure this year. They mentioned rising housing costs and rents, more widespread wage growth driven by labor shortages, and more prolonged global supply-side frictions, which could be exacerbated by the emergence of the Omicron variant; as well as easier passing on higher costs of labor and material to customers. In particular, supply chain bottlenecks and labor shortages could likely last longer and be more widespread than previously thought, which could limit businesses’ ability to address strong demand. Second, the FOMC admitted that the US labor market could be tighter than previously thought. They judged that it could reach maximum employment very soon, or that it had largely achieved it, as indicated by near-record rates of quits and job vacancies, labor shortages, and an acceleration in wage growth: Many participants judged that, if the current pace of improvement continued, labor markets would fast approach maximum employment. Several participants remarked that they viewed labor market conditions as already largely consistent with maximum employment. The consequence of higher inflation and a tighter labor market would be, of course, a more hawkish monetary policy. Although the central bankers didn’t discuss the appropriate number of interest rate hikes, they agreed that they should raise the federal funds rate sooner or faster: Participants generally noted that, given their individual outlooks for the economy, the labor market, and inflation, it may become warranted to increase the federal funds rate sooner or at a faster pace than participants had earlier anticipated. Additionally, Fed officials also discussed quantitative tightening. They generally agreed that – given fast economic growth, a strong labor market, high inflation, and bigger Fed assets – the balance sheet runoff should start closer to the policy rate liftoff and be faster than in the previous normalization episode: Almost all participants agreed that it would likely be appropriate to initiate balance sheet runoff at some point after the first increase in the target range for the federal funds rate. However, participants judged that the appropriate timing of balance sheet runoff would likely be closer to that of policy rate liftoff than in the Committee's previous experience. They noted that current conditions included a stronger economic outlook, higher inflation, and a larger balance sheet and thus could warrant a potentially faster pace of policy rate normalization.   Implications for Gold What do the recent FOMC minutes imply for the gold market? Well, referring once more to the Lord of the Rings, they are more like the Nazgûl that wreak despair rather than the Eagles offering hope. They were hawkish – and, thus, negative for gold prices. The minutes revealed that after tapering of quantitative easing, the Fed could also reduce its overall asset holdings to curb high inflation. In December, the US central bank accelerated the pace of tapering and signaled three interest rate increases in 2022. The minutes went even further, signaling a possibility of an earlier and faster rate hike and outright reduction in the Fed’s balance sheet: Some participants also noted that it could be appropriate to begin to reduce the size of the Federal Reserve's balance sheet relatively soon after beginning to raise the federal funds rate. Some participants judged that a less accommodative future stance of policy would likely be warranted and that the Committee should convey a strong commitment to address elevated inflation pressures. Hence, the price of gold responded accordingly to the FOMC minutes and declined from about $1,825 to $1,810, as the chart below shows. Luckily, there is a silver lining: the drop hasn’t been too big, at least so far. It may indicate that a lot of hawkish news has already been priced into gold, and that sentiment is rather bullish. However, the hawks haven’t probably said the last word yet. Please remember that the composition of the Committee will be more hawkish this year, but also that the mindset is changing among the members. For example, Minneapolis Fed President Neel Kashkari, one of the Committee’s most dovish members, said this week that the U.S. central bank would have to need to raise interest rates two times this year. Previously, he believed that the federal funds rate could stay at zero until at least 2024. Thus, although inflationary risk may provide support for gold, the yellow metal may find itself under hawkish fire in the upcoming weeks. We will see whether it will stand its ground, like the soldiers of Gondor. If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
Commodities - Crude Oil and Natural Gas in times of Omicron and low temperatures

Commodities - Crude Oil and Natural Gas in times of Omicron and low temperatures

Sebastian Bischeri Sebastian Bischeri 05.01.2022 17:19
  Happy new year, everyone! We hope that 2022 will be a prosperous one for all our readers. However, will it be successful for oil? Energy Market Updates Yesterday, crude oil prices ended higher, after a volatile session as US inventories fell by 6.4 million barrels – more than twice the previous week – which is another positive sign for demand. US inventories levels of crude oil, gasoline, and distillates stocks are again forecasted to fall by about 3 million more than expected last week. That would be another significant decline on the back of greater demand, according to estimated figures released by the American Petroleum Institute (API) yesterday. (Source: Investing.com) Crude oil prices stabilized near their 6-week highs following the OPEC+ group meeting, which maintained a limited increase in production of 400k barrels/day (no surprise). It is therefore a matter of maintaining an increase in production for the seventh consecutive month. This also shows that the organization was confident and believed in the resistance of global oil demand despite the recent restrictions implemented by several governments scared by Omicron, even though those travel restrictions may likely delay the resumption of aviation demand. RBOB Gasoline (RBG22) Futures (February contract, daily chart) WTI Crude Oil (CLG22) Futures (February contract, daily chart) Regarding natural gas, the Henry Hub (US benchmark) is slowly climbing as temperatures are dropping in many regions, while the European benchmark, the Dutch Title Transfer Facility (TTF), rallied 3.5% as European gas prices remain extremely volatile due to reduced exports from Russia (notably via the Yamal pipeline) but also via Ukraine. The upward momentum is also linked to weather forecasts, such as colder temperatures and frost encountering the European continent in the coming days and weeks, which may obviously have a stimulating effect on gas demand. Henry Hub Natural Gas (NGG22) Futures (February contract, daily chart) Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Gold: No Cheer in the New Year

Gold: No Cheer in the New Year

Przemysław Radomski Przemysław Radomski 06.01.2022 12:22
  What a way to start a year! Gold just faked its comeback before moving to new yearly lows. That’s a very bearish way for a market to start the year. Given that miners underperformed gold and silver briefly outperformed it, we have a very bearish storm brewing for the next couple of weeks / months. On Jan 3, I wrote the following: The year 2021 is over, 2022 has finally arrived. However, why does the current price action look “sooo last year”? Because the patterns appear to be repeating and the clearest similarity is present in the key precious metal – gold itself. Gold prices moved higher in late December, and it happened on low volume. The rally caused the stochastic indicator to move above 80 and the RSI above 50. That’s exactly what happened in both: late 2021 and late 2020. What does it mean? Well, it means that we shouldn’t trust this rally, as it could end abruptly, just like the one that we saw a year ago. Besides, gold corrected 61.8% of the preceding decline (so it moved to its most classic Fibonacci retracement), which means that – technically – what we saw in the past two weeks was just a correction, not the beginning of a new rally. And what happened next? Gold declined, faked its comeback, and then declined again to new yearly lows. 2022 continues to be a down year for gold, and this is particularly revealing, because early January is the time when the buy-backs should – theoretically – happen. I’m referring to the tendency for investors to exit losing positions (and – in tune with my expectations and against expectations of almost everyone else – 2021 was a down year for gold, silver, and mining stocks, after all) close to the end of the year, in order to harvest the tax loss, and then to get back into the market in early January. Despite the above tendency, gold is down, silver is down, and mining stocks are down as well. This shows that the precious metals market is weak (which has been clear since gold invalidated its breakout above the 2011 high in 2020) and is unlikely to soar significantly (in terms of hundreds of dollars) unless it slides first. Besides, at the beginning of major rallies, gold stocks tend to lead the way up. And right now, it’s exactly the opposite. The upper part of the above chart features the GDXJ ETF – proxy for junior mining stocks, the middle part features the GLD ETF – proxy for gold, and the bottom part features the S&P 500 Index. The red lines compare the previous stock market highs to what happened in junior miners, and the dotted lines show what juniors did when gold formed its recent highs and lows. In short, junior gold mining stocks are underperforming both: gold, and other stocks. This is as bearish as it can get, given the current situation regarding the USD Index (which is in a medium-term uptrend) and the situation in the interest rates, which are not only about to go up, but the expectations of them going up are becoming more and more hawkish. And that’s no accident either, as it’s in tune with the current political narrative in the U.S. – inflation is currently presented as the major enemy that needs to be dealt with. In other words, as the situation in interest rates is likely to become even more hawkish and the USD Index is likely to move higher, gold is likely to go down, and so – eventually – will the general stock market. And since junior mining stocks have already proven over and over again that they magnify declines on both markets, they are likely to fall particularly hard, when the above markets decline. We gained quite a lot based on the decline in the juniors in 2021, but it seems that the gains that could be reaped in 2022 (of course, I can’t and I’m not promising any kind of specific performance for any market) based on junior miners’ decline (and then their revival) could be breathtaking – but as always, only if one is positioned correctly for both major moves. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
It's gripping, how Decentraland and MANA develops

It's gripping, how Decentraland and MANA develops

FXStreet News FXStreet News 05.01.2022 15:57
Decentraland price is hovering around the $3.16 support level and has tagged it for the third time. A bounce off this barrier could be the key to triggering a 22% rally to $3.96 for MANA. If the $3.16 support level breaches, it will invalidate the bullish thesis. Decentraland price is at an inflection point and will likely catalyze a massive run-up. This outlook, however, depends on how MANA bounces off the support level it is hovering around. Decentraland price looks ready for a move Decentraland price has been hovering around the $3.16 support level for roughly a week. So far, MANA has touched this support level thrice, giving rise to a triple bottom setup. This bottom reversal pattern combined with the consolidation suggests that the Decentraland price is ready for an explosive move. The $3.43 resistance barrier is the first hurdle Decentraland price will face on its journey north. Clearing this blockade will allow buyers to step on the pedal, propelling Decentraland to $3.65. If Decentraland manages to push past $3.65 and the buying pressure continues to hold up, MANA is likely to make a run for the $4 psychological level. Traders can take advantage of this opportunity by entering long at the current position and taking profit at $3.65. MANA/USDT 4-hour chart On the other hand, Decentraland price could fail to bounce off the $3.16 support level. If the selling pressure increases, pushing MANA to produce a four-hour candlestick close below $3.16 will create a lower low. If this barrier is shattered, it will invalidate the triple bottom’s bullish outlook and likely trigger a 4% crash to $3.01.
USD to CAD chart is (probably as expected) linked with jobs stats

USD to CAD chart is (probably as expected) linked with jobs stats

John Benjamin John Benjamin 10.01.2022 10:30
EURUSD tests key resistance The US dollar retreated after December’s nonfarm payrolls came in far below expectations. The pair has been in a narrowing range between 1.1270 and 1.1365. The previous fall below 1.1280 added pressure on the buy side, though it turned out to be an opportunity for the bulls to accumulate at a bargain. A break above the resistance could end the sideways action and trigger a runaway rally towards 1.1460. The RSI surged into the overbought area and may cause a brief pullback above 1.1295. USDCAD tests daily support The loonie rallied after Canada added twice as many jobs as expected in December. The year-end sell-off met strong bids near the daily support at 1.2620. But the rebound came to halt at the supply zone around 1.2810, which used to be a support from the previous consolidation. The RSI’s double top in the overbought zone has restrained the upward momentum. 1.2730 is a fresh resistance as price action is about to retest the critical level at 1.2620. A bearish breakout could trigger a plunge to 1.2540. GER 40 seeks support The Dax 40 edged lower as rising CPI in the eurozone argues in favor of tightening. The index saw stiff selling pressure right under the all-time high at 16300. A bearish RSI divergence in this major supply area indicates a lack of commitment from the bulls as buying slows down. A combination of profit-taking and fresh selling has led to a drop below 16100, a warning sign for a steeper correction. 15800 is the next key support. A breakout could send the index to 15500 at the base of the latest rally.
S&P 500 probably doesn't attract investors, gold and silver recovering?

S&P 500 probably doesn't attract investors, gold and silver recovering?

Monica Kingsley Monica Kingsley 10.01.2022 12:33
S&P 500 indecisiveness Thursday gave way to another down day, and it doesn‘t look to be over in the least. Tech still isn‘t catching breadth enough – and that was my key condition of declaring a reprieve in the selling, if not a turnaround. Likewise credit markets don‘t offer optimistic signs – it‘s still risk-off there, and the sharp rise in yields is putting inordinate pressure on many a tech stock. True, the behemoths aren‘t that much affected, but even a glance at semiconductors tells you that the rot is running deeper than apparent from $NYFANG. This is part of the flight from growth into value, which we will see more of in 2022. The same for still unpleasantly high inflation which won‘t be tamed by the hawkish Fed – not even if they really allow notes and bonds to mature without reinvesting the proceeds already in Mar. The train has left the station more than 6 or 9 months ago when they were pushing the transitory thesis I had been disputing. We have truly moved into the persistently high inflation paradigm, and it would be accompanied by wage inflation and strong precious metals and commodities runs. We‘re looking at very good year in gold and silver while the turbulence in stocks is just starting, and we have quite a few percent more to go on the downside. Oil and copper are set up for great gains too. This will be a year when monetary and fiscal policy work at odds, when they contradict each other. Inflation would catch up with the economic growth in that inflation-induced economic slowdown would be a 2022 surprise. Signs of real estate softening would also appear – it‘s all about housing starts. While rates would rise (2.00% in 10-year Treasury is perfectly achievable), it won‘t catch up with inflation in the least – hello some more negative rates, and financial repression driving real assets. Rhymes perfectly with the 1970s. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook No real floor has materialized in either S&P 500 or tech. Volume didn‘t rise, the buyers aren‘t yet interested – we have to get at more oversold levels. Credit Markets HYG didn‘t build on Thursday‘s advance one iota, and still looks to me melting down. While the 10-year closed at 1.76%, we aren‘t looking at such sharp bond ETF downswings – and the degree in which tech reacts next, would be telling. Gold, Silver and Miners Gold and silver staged an orderly recovery, still tiptoeing around the hawkish Fed, whose tightening cycle would turn out shorter than they think. And sniffing that out, would be the turning point in the metals. Crude Oil Crude oil bulls took a daily pause, but expect it to be short-lived. We‘re looking at triple digit oil not too many months away. Copper Copper pared back Thursday‘s setback, and definitely isn‘t overheated. The sideways consolidation that would be resolved to the upside, continues – the bears are fighting a losing battle. Bitcoin and Ethereum Bitcoin and Ethereum continue trading on a weak note, and the sellers are likely to return soon. This certainly doesn‘t look like a good time to buy. Summary S&P 500 still hasn‘t turned, and I‘m looking for more weakness – tech continues leading to the downside, and bond reprieve hasn‘t yet arrived. Anyway, it‘s questionable how fast tech would react – value can‘t keep S&P 500 afloat by itself. The realization of the hawkish Fed is here as much as the jobs data not standing in their tightening plans (wage pressures are here as quite a lot of vacancies remains unfilled – hello, full employment) – and assets are reacting. As I have stated in the 2nd and 3rd paragraphs of today‘s big picture analysis (investors would appreciate thoroughly), we‘re in for a challenging year in stocks, a great one in precious metals and most commodities – and definitely in for turbulence arriving, pulled over into 1H 2022 courtesy of the Fed. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Intraday Market Analysis – USD Consolidates

Intraday Market Analysis – USD Consolidates

John Benjamin John Benjamin 11.01.2022 08:57
AUDUSD attempts reboundThe Australian dollar bounces back over strong retail sales in November. The pair saw bids near a previous trough (0.7130).The RSI’s double-dip into the oversold area attracted some traders in taking up the bargain. A bullish RSI divergence suggests a deceleration in the downward momentum. And a jump above 0.7180 could be the first step towards a bounce.The Aussie may surge to the daily resistance at 0.7360 if buyers succeed in lifting offers around 0.7270. Otherwise, the price could test the critical floor at 0.7080.USDJPY tests supportThe Japanese yen rose as risk appetite fades across markets.A bullish MA cross on the daily chart indicates that the dollar’s rally gained traction. However, an overbought RSI means that a pullback could be an opportunity for the bulls to buy dips.The dollar is testing the psychological level of 115.00, the origin of the rally above the November peak (115.50). An oversold RSI has brought in some buying interest. A bearish breakout could trigger a correction to 114.30. Then, the bulls will need to reclaim 115.90 in order to resume the uptrend.US 30 continues to retreatThe Dow Jones tumbled as US Treasury yields hit a two-year high on hike bets.A bearish RSI divergence foreshadowed the current sell-off. A drop below 36300 prompted leveraged positions to close out, driving up volatility as short-term sentiment deteriorated. Rebounds could be opportunities for the bears to sell into strength.35700 is an area of interest, as it lies in a former supply zone and along the 30-day moving average. 35200 would be a second layer of support, while 36400 is the immediate resistance.
BTC (Bitcoin) price moves beetween 40 and 50k levels

BTC (Bitcoin) price moves beetween 40 and 50k levels

FXStreet News FXStreet News 11.01.2022 16:04
Bitcoin briefly slipped below $40,000 in Monday's trading. BTC price sees a sharp recovery and a break above Monday’s high. As a broad recovery looks to be underway, expect bulls to target $50,000 in the first phase. Bitcoin (BTC) saw sellers squeeze out their final drop of gains on Monday after demand briefly dipped below $40,000. This level is in line with the low of the September 21 decline last year and BTC price bounced off the monthly S1 support level and a longer-term red descending trend line. Expect a turnaround from here, with demand switching to the buy-side with risk-on back on the front foot. BTC price set for a 180-turn back towards $50,000 Bitcoin price has given market participants quite a lot of pain at the start of 2022. Investors that came on strong out of the gate saw their investments devalue by 17%. On the horizon, however, the clouds start to evaporate, and during the European session, a global risk-on tone across assets is set to soothe and possibly erase the negative headwinds that were dictating price action these past ten days of the new year. Technically, BTC is set for recovery with an entry at around $39,800 and a bounce off the September 21 low, the monthly S1 support level and a rejection by the red descending trend line that formed since November 10. With the turnaround currently in global markets, cryptocurrencies are seeing a tailwind emerge that is set to break the high of Monday and could see it hit $44,088 later today. If markets can hold on to this momentum, expect that by Thursday bulls will attack the 200-day Simple Moving Average (SMA) and the historical $48,760 level, which is then just inches away from $50,000, potentially within sight by the end of the week. BTC/USD daily chart With this turnaround, the Relative Strength Index (RSI) will likely see a bounce off the oversold border and start to drift towards the mid-50 area. This could open the door for short sellers to try and enter with sizeable short positions once $44,088 has been hit, and to seek to push BTC price further below $40,000, with $38,073 as the first price target. This will, at the same time, firmly disappoint investors who hoped to reach $50,000. Such a move, however, would most probably go hand in hand with global market sentiment returning to a depressive move.
Would they sell S&P 500 (SPX)?

Would they sell S&P 500 (SPX)?

Monica Kingsley Monica Kingsley 11.01.2022 15:41
S&P 500 reversed sharp intraday losses, and credit markets moved in a decisive daily risk-on fashion. Turnarounds anywhere you look – HYG, TLT, XLK… but will that last? VIX having closed where it opened, points to still some unfinished job on the upside, meaning the bears would return shortly – but given how fast they gave up the great run yesterday, I‘m not looking for them to make too much progress too soon. Good to have taken yesterday‘s short profits off the table. Assessing the charts, it‘s great (for the bulls) that tech liked the long-dated Treasuries reversal to such a degree – and that value closed little changed on the day (its candle is certainly ominously looking). As a result, we‘re looking at a budding reversal that can still go both ways, and revisit 4,650s in the bearish case at least. Remember that tech apart from $NYFANG lagged, and financials aren‘t yet broken either, meaning that the credit market upswing better be taken with a pinch of salt. True, rates have risen fast since the New Year, and the pace of yield increases has to moderate. I‘m of the opinion that yesterday‘s good Nasdaq showing hasn‘t yet turned tech bullish, and that we still face a move lower ahead. As written yesterday: (…) This is part of the flight from growth into value, which we will see more of in 2022. The same for still unpleasantly high inflation which won‘t be tamed by the hawkish Fed – not even if they really allow notes and bonds to mature without reinvesting the proceeds already in Mar. The train has left the station more than 6 or 9 months ago when they were pushing the transitory thesis I had been disputing. We have truly moved into the persistently high inflation paradigm, and it would be accompanied by wage inflation and strong precious metals and commodities runs. We‘re looking at very good year in gold and silver while the turbulence in stocks is just starting, and we have quite a few percent more to go on the downside. Oil and copper are set up for great gains too. This will be a year when monetary and fiscal policy work at odds, when they contradict each other. Inflation would catch up with the economic growth in that inflation-induced economic slowdown would be a 2022 surprise. Signs of real estate softening would also appear – it‘s all about housing starts. While rates would rise (2.00% in 10-year Treasury is perfectly achievable), it won‘t catch up with inflation in the least – hello some more negative rates, and financial repression driving real assets. Rhymes perfectly with the 1970s. Stocks aren‘t yet out of the woods, the yesterday opened oil position is already profitable, cryptos likewise maintain a gainful slant to the Sunday-opened short – meanwhile, precious metals are once again catching breadth to rise, and the same goes for copper. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook The bid arrived, and the bottom may or may not be in – in spite of the beautiful lower knot, I‘m leaning towards the hypothesis that there would be another selling wave. Credit Markets HYG reversal looks certainly more credible than the S&P 500 one. LQD though didn‘t rise, which is a little surprising – on the other hand though, that‘s part of the risk-on posture, which would have been made clearer by LQD upswing. Gold, Silver and Miners Gold and silver position is improving, and I like the miners coming alive. The stage is set for upswing continuation till we break out of the very long consolidation. Crude Oil Crude oil looks to have declined as much as it could in the short run – I‘m looking for another run to take out $80 – see how little ground oil stocks lost? Copper Copper didn‘t outshine, didn‘t disappoint – its long sideways move continues, the red metal remains well bid, and would play catch up to the other commodities – the bears aren‘t likely to enjoy much success over the coming months. Bitcoin and Ethereum Just as I wrote yesterday, Bitcoin and Ethereum continue trading on a weak note, and the sellers are likely to return soon. This certainly doesn‘t look like a good time to buy. Summary S&P 500 turnaround has a question mark on it – one that I‘m more inclined to think would lead to further selling than a run above 4,720. The tech and bonds progress would be challenged again – we‘re still way too early in the Fed tightening cycle when the headwinds are only becoming to be appreciated. The room for negative surprises and kneejerk reactions is still there (the job market isn‘t standing really in the Fed‘s way), and it would likely take stocks (and cryptos) down while being less of an issue for real assets – be it commodities or precious metals. Wage pressures and unfilled vacancies are likely to last, meaning the inflation would be persistent – the staglationary era coupled with inflation-induced economic slowdown surprise I mentioned yesterday, awaits. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Gold - Fed moves are likely to reveal the shape of the future

Gold - Fed moves are likely to reveal the shape of the future

Arkadiusz Sieron Arkadiusz Sieron 11.01.2022 15:10
  Job creation disappointed in December. However, it could not be enough to counterweight rising real interest rates and save gold. On Thursday (January 6, 2022), I wrote that “the metal may find itself under hawk fire in the upcoming weeks”. Indeed, gold dropped sharply in the aftermath of the publication of the FOMC minutes. As the chart below shows, the hawkish Fed’s signal sent the price of the yellow metal from $1,826 to $1,789. This is because the minutes revealed that the Fed would be ready to cut its mammoth holdings of assets later this year. Previously, the US central bank was talking only about interest rate hikes and the ending of new asset purchases, i.e., quantitative easing. Now, the reverse process, i.e., quantitative tightening, is also on the table. What is surprising here is not the mere idea of shrinking the Fed’s assets – after all, they have risen to $8.7 trillion (see the chart above) – but its timing. Last time, the central bank started the normalization of its balance sheet only in 2018, nine years after the end of the Great Recession and four years after the completion of tapering. This time, QT may start within a few months after the end of tapering and the first interest rate hikes. It looks like 2022 will be a hot year for US monetary policy – and the gold market. Consequently, markets have been increasingly pricing in a more decisive Fed, which boosted bond yields. As the chart below shows, the long-term real interest rates (10-year TIPS) jumped from -1.06% at the end of 2021 to -0.73 at the end of last week. The upward move in the interest rates is fundamentally negative for gold prices.   Implications for Gold Luckily for the yellow metal, nonfarm payrolls disappointed in December. Last month, the US labor market rose, adding just 199,000 jobs (see the chart below), well short of consensus estimates of 400,000. This negative surprise lifted gold prices slightly on Friday (January 7, 2021). The latest employment report suggests that labor shortages and the spread of the Omicron variant of coronavirus are holding back job creation and the overall economy. However, gold bulls shouldn’t count on weak job gains to trigger a sustainable rally in the precious metals. This is because the American economy is still approaching full employment. The unemployment rate declined further to 3.9% from 4.2% in November, as the chart below shows. The drop confirms that the US labor market is very tight, so weak job creation won’t discourage the Fed from hiking the federal funds rate. As a reminder, in December, FOMC members forecasted the unemployment rate to be 4.3% at the end of 2021. What is crucial here is that disappointing job gains reflect labor shortages rather than weak demand. Additionally, wage growth remains pretty fast, despite the decline in the annual rate from 5.1% in November to 4.7% in December. The key takeaway is that, despite disappointing job creation, the US economy is moving quickly towards full employment. The unemployment rate is at 3.9%, very close to the pre-pandemic low of 3.7%. Hence, the latest employment situation report may only reinforce arguments for the Fed’s tightening cycle. This is fundamentally bad news for gold, as strengthened expectations of the interest rate hikes may boost real interest rates further and put the yellow metal under downward pressure. Some analysts believe that hawkish sentiment might be at its peak. I’m not so sure about that. I believe that monetary hawks haven’t said the last word yet, and that the normalization of the interest rates is still ahead of us. Anyway, Powell will appear in the Senate today, so we should get more clues about the prospects for monetary policy and gold this year. If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
We might say interest rates became Topic #1

We might say interest rates became Topic #1

Przemysław Radomski Przemysław Radomski 11.01.2022 14:10
  The imminent interest rate hike by the Fed is almost certain. Are investors' concerns justified and will it mean trouble for the precious metals?  While the S&P 500 and the NASDAQ Composite recovered from sharp intraday losses on Jan. 10, investors’ mood swings signaled heightened anxiety. With the PMs whipsawing alongside the general stock market, more volatility should materialize in the weeks and months to come. To explain, with the Fed on a hawkish warpath to fight rampant inflation, JPMorgan CEO Jamie Dimon told CNBC on Jan. 10 that a resilient U.S. economy could prove problematic for the financial markets in 2022. “The consumer balance sheet has never been in better shape; they’re spending 25% more today than pre-COVID,” said Dimon. “Their debt-service ratio is better than it’s been since we’ve been keeping records for 50 years.” As for inflation and the Fed: “It’s possible that inflation is worse than they think and they raise rates more than people think. I personally would be surprised if it’s just four [interest rate] increases [in 2022],” he added. How would the financial markets react? Source: CNBC Singing a similar tune, the International Monetary Fund (IMF) warned on Jan. 10 that the Fed’s rate hike cycle could slaughter emerging markets. Its report revealed: “For most of last year, investors priced in a temporary rise in inflation in the United States given the unsteady economic recovery and a slow unravelling of supply bottlenecks. Now sentiment has shifted. Prices are rising at the fastest pace in almost four decades and the tight labor market has started to feed into wage increases.”   Volatile Days Ahead While I warned for all of 2021 that inflationary pressures were bullish for the U.S. dollar and U.S. Treasury yields and bearish for the PMs, the IMF stated: “Faster Fed rate increases in response could rattle financial markets and tighten financial conditions globally. These developments could come with a slowing of US demand and trade and may lead to capital outflows and currency depreciation in emerging markets.” As a result, even the IMF is anxiously bullish on the USD Index: For a good reason. With September, July, June, and May all gone by the wayside, now, the market-implied probability of a Fed rate hike in March has risen to nearly 83%. For context, the probability of a March liftoff was less than 10% in early November. Please see below: Likewise, the market-implied probability of four rate hikes by the Fed in 2022 has risen to nearly 87%. Again, the probability was less than 50% in early November. Please see below: Why the material shift? Well, while I’ve been warning for months that rampant inflation would elicit a hawkish about-face from the Fed, investors are finally coming around to this reality. With inflation still running hot, market participants understand that pricing pressures won’t subside without policy responses from the Fed. As a result, the “transitory” narrative is dead, and investors have lost one of their staunchest allies. This means that predicting silver and gold at higher levels in the medium term might not be the best idea. To that point, Bank of America’s dove-hawk spectrum shows that the dovish brigade has lost several soldiers. With the hawks now on the offensive, the officials preaching monetary patience are few and far between.  Please see below: For context, Bank of America still places San Francisco Fed President Mary Daly in the dovish bucket. However, I noted on Dec. 23 that she has materially shifted her stance in recent weeks: Source: The New York Times Furthermore, with inflationary pressures still bubbling, the Manheim Used Vehicle Value Index hit another all-time high of 236.2 in December, as “wholesale used vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) increased 1.6% month-over-month.” Please see below: On top of that, the cost of shipping from Shanghai, China, is still increasing. With the U.S. importing more goods from China than any other nation, the inflationary impact on the U.S. economy is material. Please see below: Finally, while the GDXJ ETF benefited from the NASDAQ Composite’s intraday reversal on Jan. 10, I warned on Oct. 26 that monetary policy tightening would eventually upend the junior miners. I wrote: To explain, the green line above tracks the GDXJ ETF from the beginning of 2013 to the end of 2015. If you analyze the left side of the chart, you can see that when Fed Chairman Ben Bernanke hinted at tapering on May 22, 2013, the GDXJ ETF declined by 32% from May 22 until the taper began on Dec. 18. Moreover, the onslaught didn’t end there. Once the taper officially began, the GDXJ ETF enjoyed a relief rally (similar to what we’re witnessing now), as long-term interest rates declined and the PMs assumed that the worst was in the rearview. However, as the liquidity drain caught up to the junior miners over the medium term, the GDXJ ETF declined by another 36% from when the taper was announced on Dec. 18, 2013 until the end of 2015. To that point, with part one already on the books, the second act will likely unfold once the Fed formally begins its taper in “either mid-November or mid-December.” Thus, history implies that the GDXJ ETF still has plenty of downside left. While the junior miners' ETF has declined by more than 11% since Oct. 26, Goldman Sachs has come around to our way of thinking. Please see below: To explain, Goldman Sachs told its clients last week that the yellow metal has been following its ominous path since 2013/2014 (as you may recall, I’ve been writing about the 2013-now analogy for months). For context, the red line above tracks gold’s price action from July 2010 until December 2014, while the blue line above tracks gold’s price action from July 2019 until now. If you analyze the symmetrical overlay, you can see that the pair have been in sync for some time. Moreover, if you focus your attention on the red line’s plight as time passes, it’s clear why Goldman Sachs is warning its clients about “further downside risk”. To that point, with the investment bank forecasting a real (inflation-adjusted) interest rate regime change in 2022, gold is poised to suffer along the way. To explain, the various bars above track gold’s monthly returns when the real U.S. Federal Funds Rate (dark blue), the real U.S. 5-Year Treasury yield (green), and the real U.S. 10-Year Treasury yield (light blue) begin with positive/negative values and then increase/decrease. If you focus your attention on the bars furthest to the right, you can see that when the real U.S. 5-Year Treasury yield and the real U.S. 10-Year Treasury yield are negative and then rise, gold suffers its worst monthly performances. Moreover, with the current fundamental environment presenting us with precisely that, similar results will likely materialize over the medium term. The bottom line? While investors desperately bought the dip on Jan. 10, the more than 2% intraday swing in the NASDAQ Composite screamed of monetary policy anxiety. With another hot inflation print poised to hit the wire on Jan. 12, the reprieve will likely be short-lived. Furthermore, with the PMs suffering from a similar fundamental affliction – as both the PMs and technology stocks are extremely allergic to rising interest rates – volatility is likely here to stay. As a result, the Fed should continue to break investors’ hearts over the medium term. In conclusion, the PMs rallied on Jan. 10, though their fundamental outlooks remain profoundly bearish. With interest rates poised to rise and the USD Index still undervalued, more headwinds should confront gold, silver, and mining stocks in the coming months. As a result, long-term buying opportunities are likely still a ways away. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Intraday Market Analysis – USD Under Pressure

Intraday Market Analysis – USD Under Pressure

John Benjamin John Benjamin 12.01.2022 09:05
GBPUSD rally gains tractionThe US dollar fell after the Fed Chair’s remark that no decision has been made on quantitative tightening. The pair showed some weakness near the daily resistance at 1.3600.The RSI’s double top in the overbought area led some buyers to take chips off the table. However, a follow-up close above the resistance indicates that the bulls are still in control of the direction.Sentiment remains upbeat and 1.3700 from the start of the November sell-off would be the next target. 1.3570 is a fresh support in case of a pullback.NZDUSD bounces off major supportThe New Zealand dollar recovers as risk appetite returns following Jerome Powell’s testimony.The previous rebound towards 0.6830 met strong selling pressure. Its failure to achieve a new high suggests that the bearish bias lingers. The drop below 0.6740 further weighs on the kiwi. A bounce could still be an opportunity to sell into strength.The bulls need to clear 0.6835 in order to turn the tide, and 0.6730 is a fresh support. A bearish breakout may test the base of December’s bounce at 0.6700.EURJPY maintains uptrendThe euro recoups losses as traders dump safe-haven currencies. The fall below 130.80 has shaken out some weak hands.Nonetheless, the upward bias remains intact after the single currency saw solid demand over the psychological level of 130.00. The RSI’s oversold situation compounded the attractiveness of the discount.A rise above 131.60 would bring in momentum traders and clear the path for an extended rally to 132.55 near last October’s peak. 129.10 is the second line of defence in case of a deeper retracement.
Gold Market in 2022: Fall and Revival?

Gold Market in 2022: Fall and Revival?

Arkadiusz Sieron Arkadiusz Sieron 07.01.2022 16:46
  2021 will be remembered as the year of inflation’s comeback and gold’s dissatisfying reaction to it. Will gold improve its behavior in 2022? You thought that 2020 was a terrible year, but we would be back to normal in 2021? Well, we haven’t quite returned to normal. After all, the epidemic is not over, as new strains of coronavirus emerged and spread last year. Actually, in some aspects, 2021 was even worse than 2020. Two years ago, the pandemic was wreaking havoc. Last year, both the pandemic and inflation were raging. To the great surprise of mainstream economists fixated on aggregate demand, 2021 would be recorded in chronicles as the year of the supply factors revenge and the great return of inflation. For years, the pundits have talked about the death of inflation and mocked anyone who pointed to its risk. Well, he who laughs last, laughs best. However, it’s laughter through inflationary tears. Given the highest inflation rate since the Great Stagflation, gold prices must have grown a lot, right? Well, not exactly. As the chart below shows, 2021 wasn’t the best year for the yellow metal. Gold lost almost 5% over the last twelve months. Although I correctly predicted that “gold’s performance in 2021 could be worse than last year”, I expected less bearish behavior. What exactly happened? From a macroeconomic perspective, the economy recovered last year. As vaccination progressed, sanitary restrictions were lifted, and risk appetite returned to the market, which hit safe-haven assets such as gold. What’s more, a rebound in economic activity and rising inflation prompted the Fed to taper its quantitative easing and introduce more hawkish rhetoric, which pushed gold prices down. As always, there were both ups and downs in the gold market last year. Gold started 2021 with a bang, but began plunging quickly amid Democrats’ success in elections, the Fed more optimistic about the economy, and rising interest rates. The slide lasted until late March, when gold found its bottom of $1,684. This is because inflation started to accelerate at that point, while the Fed was downplaying rising price pressures, gibbering about “transitory inflation”. The rising worries about high inflation and the perspective of the US central bank staying behind the curve helped gold reach $1,900 once again in early June. However, the hawkish FOMC meeting and dot-plot that came later that month created another powerful bearish wave in the gold market that lasted until the end of September. Renewed inflationary worries and rising inflation expectations pushed gold to $1,865 in mid-November. However, the Fed announced a tapering of its asset purchases, calming markets once again and regaining investors’ trust in its ability to control inflation. As consequence, gold declined below $1,800 once again and stayed there by the end of the year. What can we learn from gold’s performance in 2021? First of all, gold is not a perfect inflation hedge, as the chart below shows. I mean here that, yes, gold is sensitive to rising inflation, but a hawkish Fed beats inflation in the gold market. Thus, inflation is positive for gold only if the US central bank stays behind the curve. However, when investors believe that either inflation is temporary or that the Fed will turn more hawkish in response to upward price pressure, gold runs away into the corner. Royal metal, huh? Second, never underestimate the power of the dark… I mean, the hawkish side of the Fed – or simply, don’t fight the Fed. It turned out that the prospects of a very gradual asset tapering and tightening cycle were enough to intimidate gold. Third, real interest rates remain the key driver for gold prices. As one can see in the chart below, gold plunged each time bond yields rallied, in particular in February 2021, but also in June or November. Hence, gold positively reacts to inflation as long as inflation translates into lower real interest rates. However, if other factors – such as expectations of a more hawkish Fed – come into play and outweigh inflation, gold suffers. Great, we already know that 2021 sucked and why. However, will 2022 be better for the gold market? Although I have great sympathy for the gold bulls, I don’t have good news for them. It seems that gold’s struggle will continue this year, at least in the first months of 2022, as the Fed’s hiking cycle and rising bond yields would create downward pressure on gold. However, when the US central bank starts raising the federal funds rate, gold may find its bottom, as it did in December 2015, and begin to rally again. Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care.
The 10 Public Companies With the Biggest Bitcoin Portfolios

At the moment, contrary to ETHUSD and other altcoins, BTCUSD isn't increasing that much

Alex Kuptsikevich Alex Kuptsikevich 12.01.2022 09:02
The crypto market has again surpassed $2 trillion, adding almost 2.7% in the last 24 hours. Bitcoin, meanwhile, has not kept pace with the rise in altcoin prices: BTC strengthened by 1.45% against a 4% rise in ETH, while other leading coins added between 3% and 7%. The purchase of altcoins has intensified after the first cryptocurrency defended the $40K mark. This was like a sign of faith in the sector's short-term prospects, which again allowed enthusiasts to invest in potentially more undervalued coins and projects. The crypto Fear and Greed Index added 1 point to 22 overnight, but we can see that investors took the recent plunge as a buying opportunity. On the chart, bitcoin rebounded from a psychologically important support level for the second time since September. In addition, the RSI indicator on the daily charts came out of the oversold area, signalling a pause in the bearish momentum. However, it is too early to say that we are seeing the beginning of a new growth wave. There are several reasons for that. In this wave of decline, the RSI indicator reached lower lows than earlier in December and markedly lower levels in September and July, marking more persistent and prolonged selling than in previous episodes. Bitcoin's consolidation attempts this week is only a wobble near the bottom. A bullish reversal will be indicated by solid upward momentum in July or September. The mini rebound in December was quickly eaten away by the bears. BTCUSD is consolidating near the lower boundary of the descending channel. To say that we see more than just a bounce within this trend is only possible if it grew above 45k - where the previous local lows and the downside resistance line are concentrated. If bitcoin fails to develop an uptrend, it will seriously spoil sentiment for cryptocurrency traders, creating a toxic environment in the sector and putting selling back on the agenda, despite the prospects of individual projects.
Riding Out Inflation in Style

Riding Out Inflation in Style

Monica Kingsley Monica Kingsley 12.01.2022 16:24
S&P 500 refused further downside, tech caught fire, and credit markets staged a risk-on reversal. The bond upswing is the most important element – Powell‘s testimony wasn‘t able to ignite further rise in yields at the moment.Couple that with continued energy surge, and we‘re looking at real assets being very favorably positioned here (relatively easiest gains ahead), and that has profitable consequences for oil, copper and precious metals bulls. Even cryptos like the fact that CPI didn‘t come above expectations.Stock market fate is though tied to the Treasuries and corporate bonds – keeping an eye on the tech sensitivity to both advancing and retreating yields is of paramount importance, with financials not sticking higher as a sore thumb among other S&P 500 sectors being the other.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookFresh attempt at the lows was repelled, and the bulls aren‘t looking too spooked. Market breadth hasn‘t plunged to new lows, and is being slowly improved. It looks like we‘re about to keep moving up before the bears return.Credit MarketsHYG reversal looks credible, even if the volume was lower. It‘s risk on as HYG outperformed – the next question is how would it fare when yields rise again.Gold, Silver and MinersGold and silver position is improving, and I like it that miners keep coming alive. As written yesterday, the stage is set for upswing continuation till we break out of the very long consolidation.Crude OilCrude oil is performing just right – breaking higher from the prior flag-like structure, and simultaneously being inspired by the oil stocks example – $80 resistance has been decisively taken out.CopperLooking at today‘s price action, the time of copper playing catch up to the other commodities has arrived already – the bears indeed aren‘t likely to enjoy much success over the coming months.Bitcoin and EthereumBitcoin and Ethereum are turning a corner, but animal spirits aren‘t there now – are cryptos more aware of the coming liquidity challenges? The rebound is lacking fervor still.SummaryS&P 500 turnaround succeeded, and markets are choosing to ignore the hawkish Fed and high inflation data. That‘s all good for commodities and then precious metals, but would catch up with stocks over time – in the sense that paper assets would underperform. For now, the S&P 500 bears have been repelled, and it would take a fresh round of higher yields forcing tech down, to knock the 500-strong index lower, which isn‘t likely to happen today. Overall, we‘re looking at still a good year in stocks (check the Latest Highlights for big picture picks), but 2H 2022 would be calmer than the prior 180 days.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
USDCHF a bit down, XAUUSD not changing much and we might say USOIL steadily goes up

USDCHF a bit down, XAUUSD not changing much and we might say USOIL steadily goes up

John Benjamin John Benjamin 13.01.2022 08:54
USDCHF tests daily support The US dollar plunged after December’s CPI slowed down to 0.5% from 0.8% in November. Despite a swift recovery from the daily support at 0.9100, price action came under pressure once again at December’s supply area (0.9280). The dive below 0.9180 then 0.9140 is a sign of liquidation as buyers rush to the exit. As the greenback revisits the critical support at 0.9100, an oversold RSI may attract some buying interest. The former demand area around 0.9200 is now the first resistance level. XAUUSD looks to break out Gold edged higher as the US dollar softened across the board. The precious metal has met stiff selling pressure in the supply zone around 1830. This level used to be a support from last November’s sell-off. The recovery above the psychological level of 1800 shows the bulls’ commitment to keeping the price afloat. A break above the supply zone would force the sell-side to cover and trigger an extended rally towards the previous peak at 1870. On the downside, 1800 has turned into a fresh support. USOIL continues upward WTI crude climbed higher after a larger-than-expected fall in US inventories. A close above the daily resistance at 79.00 was a strong bullish sign. Following a brief pause, the rally accelerated above 80.40. Sentiment remains upbeat and the bulls are keen to buy the dip during a pullback. A breach above 82.20 would clear the path to the peak at 85.00. An overbought RSI may cause a temporary retreat. In that case, trend-followers could be looking to jump in near the closest support at 81.20.
Moderna (MRNA) Stock Price and Forecast: Why do dead cats bounce?

Moderna (MRNA) Stock Price and Forecast: Why do dead cats bounce?

FXStreet News FXStreet News 12.01.2022 15:58
MRNA shares slump on Tuesday after a strong bounce on Monday. FXStreet had called the Monday bounce as likely to fail. Moderna needs to find a new revenue source as covid likely to fade. Moderna (MRNA) shares failed to rally on Tuesday despite Fed Chair Powell talking calmly to Capitol Hill and soothing most equities in the process. Risk was back on and rate hikes are also likely on, this time in March. Powell has carefully mapped out the strategy so as not to surprise markets, and despite yields rising slightly, tech continued to bounce on Tuesday. However, Moderna shares slumped. Moderna (MRNA) stock news Shares in Moderna closed over 5% lower at $221.39 on Tuesday. Many traders are asking why, when all major indices closed higher. Mainstream media have been trotting out the rotation line, which is a neat excuse for, "We don't really know why that happened, so let us just compare it to something else." The fact as always is to do with momentum and trends. Moderna has been falling, and this latest fall is symptomatic of waning investor interest as covid looks to fade. Moderna is hugely over-reliant on its covid vaccine for income. Yes, it has a decent pipeline, but nothing else can come close to matching the revenue generation of its covid vaccine. This is the big problem. Pfizer is much more diversified and a larger company with multiple revenue streams. Moderna (MRNA) is not in this league. It may get there one day, but in the meantime it will face revenue generation challenges. Take a look at the Moderna development pipeline here. It is impressive but nothing that looks either imminent or significant in terms of replacing covid vaccine revenue. Covid is/was a once-in-a-century event (fingers crossed). Moderna (MRNA) stock forecast There is nothing significant in Monday's move despite MRNA shares closing 9% higher. We outlined this in our article earlier in the week and remain bearish on Moderna. The trend is in place as Monday failed to break above $259, so we remain with lower lows and lower highs. $259 is the pivot for the short term. $188.41 is the first target with $200 a big psychological level along the way. There is a pattern here: declining Relative Strength Index (RSI), declining Moving Average Convergence Divergence (MACD) and declining stock price. We have a volume gap from $200 until $180. There is more downside in our view unless MRNA shares close above $259. Moderna (MRNA) chart, daily
All Eyes on Copper

All Eyes on Copper

Monica Kingsley Monica Kingsley 13.01.2022 15:36
S&P 500 sold off only a little in the wake of CPI data – probably celebrating that the figure wasn‘t 8% but only 7%. As if that weren‘t uncomfortable already – and the Fed wants to field accelerated taper, and perhaps even four quarter-point rate hikes to tame it? Oh, and perhaps also balance sheet reduction through not reinvesting proceeds from matured bonds and notes as talked on Monday – sure, that will do the trick. Looking at Treasuries over the prior two days shows that the Fed isn‘t being questioned. Value defends the high ground while tech rallies – Monday‘s fear with its brief return Tuesday, is in the rear-view mirror, compacency returning, and VIX again below 18. Prior upswing consolidation right next, is the most likely action for S&P 500. The real gains though are being made elsewhere – in crude oil and copper. With commodities back on fire, these two have certainly greater appreciation potential next than stocks or cryptos – so, long live our open longs there! The red metal has defied base metals intraday consolidation yesterday, and that has consequences for inflation trades – silver is waiting in the wings. To give you an idea how mispriced the risk of persistently unpleasant inflation is, yesterday‘s CPI coming only in line with expectations, caused inflation expectations to decline… At least the dollar took a rightful breather – its prior sideways consolidation has been broken to the downside. Currencies are starting to figure out inflation, and just how far and inadequate Fed‘s promise to take on it, has been... Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook Daily consolidation of prior strong gains that‘s likely to go on today – stocks are making up their mind as to where next in the very short run now that the bears had been repelled. Credit Markets HYG is likewise looking to need some time to move higher next – volume is declining, and a brief sideways move is most likely now. Gold, Silver and Miners Gold and silver are still sideways to up – not down. The pressure to go higher is building up, waiting for the Fed miscalculation, or perception of the consequencies of its upcoming action. The faith in the central bank isn‘t yet really shaken. Crude Oil Crude oil finds it easiest to keep rising – the technical and fundamental conditions are in place, and oil stocks will continue to be the leading S&P 500 performers. Copper Copper is starting to play catch up to the other commodities finally – it‘ll be a rocky ride, but the red metal has waken up, and cast a clear verdict on inflation that has to seep into other markets next. Will take time, but we‘ll get there. Bitcoin and Ethereum Bitcoin and Ethereum didn‘t convince on the upside, and with no dovish surprise on the horizon, the path of least resistance probably remains down for now. Summary S&P 500 turnaround is getting cemented, and worries about the hawkish Fed or inflation look to be momentarily receding. Not even the PPI is waking up the markets – the focus seems to be on measly 0.1% undershoot. Ironic, pathetic. While stocks keep on moving in a tight range, and still want to keep on appreciating modestly, the real action is happening in the commodities, to be followed by precious metals. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Having A Look At The Markets Considering Tensions, COVID-19 And National Banks Decisions

US 100 doesn't go really high, XAGUSD seems to feel quite good

John Benjamin John Benjamin 14.01.2022 08:38
US 100 revisits major support The Nasdaq 100 faltered after an unexpected rise in US initial jobless claims. The tech index bounced off the demand zone around 15200 which used to be a resistance on the daily chart. A bullish divergence revealed a slowdown in the sell-off momentum. The latest break above 15820 prompted some sellers to cover but came under pressure at 15980. After intraday traders took profit, 15200 is a critical support to keep the rebound relevant. A deeper correction would send the price to 14900. EURGBP stuck in bearish trend The euro rose after ECB Vice President Luis de Guindos said the inflation spike may last longer than projected. Nonetheless, the bearish sentiment still prevails after the pair failed to hold on to 0.8370. The former support has now turned into a resistance. The current consolidation could be a distribution phase and a drop below 0.8325 could send the price to February 2020’s lows near 0.8290. On the upside, the bulls have the challenging task of lifting offers around 0.8370 and then 0.8415 before they could attract more followers. XAGUSD tests major resistance Silver extends its recovery on the back of a weak US dollar. The metal saw support at the psychological level of 22.00. A break above the resistance at 22.80 and then an acceleration to the upside indicates strong buying interest. An overbought RSI has temporarily held the rally back. The bulls are testing the daily resistance at 23.40. A breakout could shake sellers out and trigger a reversal above 24.00. On the downside, buyers could be lurking around 22.60 in case of a pullback.
US Federal Reserve - Playing With Fire Part II

US Federal Reserve - Playing With Fire Part II

Chris Vermeulen Chris Vermeulen 14.01.2022 22:49
The US Federal Reserve has recently taken steps to communicate a change in future policy – suggesting raising interest rates and acting more aggressively to combat inflation. Throughout the last few weeks of 2021 and early 2022, these comments and posturing by the US Fed have created some very big downside price moves in the US major indexes. As a result, the US markets' volatility levels (VIX) have moved to a recent average between 17~21 – nearly 3x historical normal levels.US Fed Likely To Move Very Slowly On RatesOne thing that I believe has become evident to many people is that we have moved past the COVID stimulus conversations of the past 24+ months. Inflation, rising prices, constricted supply-chains, and an excess of capital throughout many global markets appear to have shifted how the US Fed interprets future risks. The Fed is telegraphing these concerns to investors very clearly right now, which means traders/investors are shifting their focus away from high-flying Growth stocks.Even though traders are attempting to shift capital away from certain risky sectors in the US and global markets, I still believe we have about 60 to 120+ days before the bigger market shift takes place.The US Federal Reserve will likely start addressing inflationary concerns by reducing their balance sheet assets – not by aggressively raising interest rates. I feel the US Fed will navigate Q1:2022 and Q2:2022 by reducing balance sheet assets while allowing the global supply-chain issues to attempt to resolve themselves. By June/July 2022, or later, I believe the Fed may start to consider rate increases as a means to slow inflation.Fed Comments Shift Investor Sentiment – Metals In Focus For Later 2022This move away from Dovish/easy-money policies will push traders to consider more traditional hedge investments – like Gold and Silver. I'm sure you've read some comments over the past 24+ months about Gold being an extremely undervalued asset as the US Fed poured trillions of stimulus dollars into the economy? These comments were made concerning the fact that Gold rallied from $1450 in 2019 to almost $2100 in 2020 – over 12 months (over +43%). Could a big move in Gold/Silver happen again in 2022 or 2023?My research suggests a Double Pennant/Flag formation in Gold suggests the $1675 support level becomes critical soon. It also indicates a Breakout/Breakdown move may start to happen before March or April 2022 – near the APEX of the current Pennant/Flag formation.Sign up for my free trading newsletter so you don’t miss the next opportunity! The key APEX range is currently between $1785 and $1830. This represents a very tight price range where Gold may attempt to consolidate as we move towards the March/April Apex. My research suggests a move to levels near $1740 to $1750 may happen just before the Apex Breakout/Breakdown initiates. So, watch for a bit of downside price volatility in Gold before the end of February 2022.Junior Gold Miners May Rally +45%, Or More, On A Gold Price RallyThe Junior Gold Miners (GDXJ) Weekly Chart shows a firm support level near $37.35 that should act as a floor for price. My research suggests the next 45+ days will see GDXJ prices stay below $44 to $45 – trading in a reasonably tight range before starting to rally higher near the end of February 2022.I believe Metals and Miners are aligning for a late February 2022 or Q2:2022 rally. The reason is that I believe the positioning by the US Fed, and expectations related to later 2022 (a mid-term election year), may prompt quite a bit of concern for the US and global equities. This will likely push investors and traders into “old-school” hedge instruments – like Gold and Silver.That means Junior Gold and Silver Miners maybe about 55+ days away from an explosive upside price trend.SILJ May Rally +70% to +100%, Or More, On Fed ActionsNear the end of 2022, I published a research article highlighting the incredible opportunity in Silver – focusing on how the Gold/Silver ratio had recently reached another peak level and had started to decline: Fear May Drive Silver More Than 60% Higher In 2022. This move suggests the disparity between the price of Gold to the price of Silver shows Gold is appreciated (and holding greater value) than Silver over the past few years.The COVID virus event, and the subsequent Fed/Government stimulus, shifted investors/traders focus away from precious metals and into the equities market speculative rally. Now that the US Fed is starting to warn of more aggressive rate increases and other actions, precious metals are suddenly much more important as a hedge against future risks.This SILJ Weekly Chart highlights the incredible base level, near $12, that continues to offer traders a fantastic hedge against a sudden Fed move. Using a simple Fibonacci Price Extension, we can see a $20 target level (+61%) and a $25.64 target level (100%). If the $12 level holds as a base/support, SILJ may be one of the easiest and best hedges against a sudden Fed move right now.The US Federal Reserve is, in my opinion, playing with fireThe COVID Virus Event pushed global debt levels higher by more than $19.5 Trillion Dollars (Source: Bloomberg ). The rush to attempt to save the global economy has created a massive surge in global debt levels – pushing the global debt to GDP level to well above 356% (Source: Axios).Why is this so important right now? Because the US Federal Reserve is talking about an attempt to move interest rates and Fed decision-making back to near-normal levels. In my opinion, this was the one fault of Alan Greenspan in 2006-07. The thought that we can raise rates to “near normal level” at any time when we have grown debt levels excessively throughout the world is failed thinking and ignorant, in my opinion.The US Federal Reserve is trapped and almost backed into a corner. I believe the US Fed will find any rate increases above 1.00 before the end of 2023 will significantly disrupt the global speculative bubble. Any attempt to move rates to levels near or above 2.00 would represent a nearly +2000% rate increase in less than 12 to 24 months. If you want to see a shock to the global markets where global debt to GDP is closing in on 400%, try raising the FFR by more than 2000% over a short period of time. That is what I call “playing with FIRE.”.(Source: Axios)2022 and 2023 will be filled with significant market trends and increased volatility. Right now, traders and investors need to understand the global markets are attempting to quickly transition away from a speculative/growth phase as the US Federal Reserve attempts to telegraph future rate increases. So it's time to start thinking about how to prepare for unknowns and how to protect your capital more efficiently.Growth sectors and US major indexes may continue to move higher for the next 30 to 60+ days, but my research suggests Q2:2022 may represent a "change in thinking" related to a late-2022 Fed shift. We are starting to see the markets move away from the speculative bubble-type trending we saw in 2020 and early 2021. Keep your eyes open and learn how to prepare for the big trends over the next 3+ years. The Fed is playing with fire right now. One wrong move and the markets could start a drastic price correction/reversion.Finding The Right Trading StrategiesIf you have struggled with finding opportunities over the past year or so and want to know which are the hottest sectors, or how to protect and grow your capital, then please take a minute to review my Total ETF Portfolio – Triple-Strategy Trading Plan to help you profit from these big market transitions.Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals.I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking the following link:   www.TheTechnicalTraders.com 
Gold Wars: Revenge of Supply and Inflation

Gold Wars: Revenge of Supply and Inflation

Arkadiusz Sieron Arkadiusz Sieron 14.01.2022 16:53
  Inflation! The Republic is crumbling under attacks by the ruthless Supply Lord, Count Shortage. Dearness is everywhere. Will gold save the galaxy? If George Lucas were to make a movie about 2021 instead of Jedi knights, he would probably call it Revenge of the Supply. After all, last year will be remembered as the period of semiconductor shortages, production bottlenecks, disrupted value chains, delayed deliveries, surging job vacancies, rising inflation, and skyrocketing energy prices. It could be a shocking discovery for Keynesian economists, who focus on aggregate demand and believe that there is always slack in the economy, but it turned out that supply matters too! As a reminder, state governments couldn’t deal with the pandemic more smartly and introduced lockdowns. Then, it turned out – what a surprise! – that the shutdown of the economy, well, shut down the economy, so the Fed and the banking system boosted the money supply, while Congress passed a mammoth fiscal stimulus, including sending checks to just about every American. In other words, 2021 showed us that one cannot close and reopen the economy without any negative consequences, as the economy doesn’t simply return to the status quo. After the reopening of the economy, people started to spend all the money that was “printed” and given to them. Hence, demand increased sharply, and supply couldn’t keep up with the boosted spending. It turned out that economic problems are not always related to the demand side that has to be “stimulated”. We’ve also learned that there are supply constraints and that production and delivery don’t always go smoothly. The contemporary economy is truly global, complex, and interconnected – and the proper working of this mechanism depends on the adequate functioning of its zillion elements. Thus, shit happens from time to time. This is why it’s smart to have some gold as a portfolio insurance against tail risks. Evergiven, the ship that blocked the Suez Canal, disrupting international trade, was the perfect illustration. However, the importance of supply factors goes beyond logistics and is related to regulations, taxes, incentives, etc. Instead of calls for injecting liquidity during each crisis, efficiency, reducing the disincentives to work and invest, and unlocking the supply shackles imposed by the government should become the top economic priority. Another negative surprise for mainstream economists in 2021 was the revenge of inflation. For years, central bankers and analysts have dismissed the threat of inflation, considering it a phenomenon of the past. In the 1970s, the Fed was still learning how to conduct monetary policy. It made a few mistakes, but is much smarter today, so stagflation won’t repeat. Additionally, we live in a globalized economy with strong product competition and weak labor unions, so inflation won’t get out of control. Indeed, inflation was stubbornly low for years, despite all the easy monetary policy, and didn’t want to reach the Fed’s target of 2%, so the US central bank changed its regime to be more flexible and tolerant of inflation. It was in 2020, just one year before the outbreak of inflation. The Fed completely didn’t expect that – which shows the intellectual poverty of this institution – and called it “transitory”. Initially, inflation was supposed to be short-lived because of the “base effects”, then because of the “supply bottlenecks”. Only in November, the Fed admitted that inflation was more broad-based and would be more persistent than it previously thought. Well, better late than never! What does the revenge of supply and inflation imply for the gold market? One could expect that gold would perform better last year amid all the supply problems and a surge in inflation. We’ve learned that gold doesn’t always shine during inflationary times. The reason was that supply shortages didn’t translate into a full-blown economic crisis. On the contrary, they were caused by a strong rebound in demand; and they contributed mainly to higher inflation, which strengthened the Fed’s hawkish rhetoric and expectations of higher interest rates, creating downward pressure on gold prices. On the other hand, we could say as well that gold prices were supported by elevated inflation and didn’t drop more thanks to all the supply disruptions and inflationary threats. After all, during the economic expansion of 2011-2015 that followed the Great Recession, gold plunged about 45%, while between the 2020 peak and the end of 2021, the yellow metal lost only about 13%, as the chart below shows. Hence, the worst might be yet to come. I don’t expect a similarly deep decline as in the past, especially given that the Fed’s tightening cycle seems to be mostly priced in, but the real interest rates could normalize somewhat. Thus, I have bad news for the gold bulls. The supply crunch is expected to moderate in the second half of 2022, which would also ease inflationary pressure. To be clear, inflation won’t disappear, but it may reach a peak this year. The combination of improvement on the supply side of the economy, with inflation reaching its peak, and with a more hawkish Fed doesn’t bode well for gold. Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care.
New Profitable Call on Natural Gas: The Yoyo-Trade Is Back! - 14.01.2022

New Profitable Call on Natural Gas: The Yoyo-Trade Is Back! - 14.01.2022

Sebastian Bischeri Sebastian Bischeri 14.01.2022 16:22
  Gas prices surged in stride and then the market plunged back down like a yoyo thrown from a balcony. What caused such a reaction? At the beginning of the week, Henry Hub natural gas futures closed above the $4 psychological mark on the NYMEX for the first time this new year as a result of robust US LNG exports and weather-driven demand. Overall, the prices on the February contract were still trading on a longer-term downtrend, which is why I was especially looking for the best spot to initiate a short-selling trade rather than jumping on a galloping horse. Meanwhile, some of our subscribers – always free to scalp the market (or to take more aggressive counter-trend trades towards our suggested entries) – were just getting ready to go short around the $4.876.5.079 resistance zone (highlighted by a yellow band), with a stop placed just above the higher $5.400 level (represented by a red dotted line) and targets at $4.568 and $4.213 (also marked by two green dotted lines), according to my last projections. As a result, gas prices indeed surged in stride (performing a high-speed rally up to the 4.879 that got almost immediately stopped by the yellow band – thus triggering our entry). It was just before the market plunged back down like a yoyo thrown from the third floor and wheeling on the first-floor balcony, considering our targets to be located on both the second and first floors. This sudden reversal move was certainly triggered on the one hand, technically by aggressive traders taking profits, but also , more fundamentally, by a slowdown in gas demand as the purchases for colder weeks were already anticipated by the commercials (large MNCs hedging their risk, oil and gas majors, utility companies, etc.); the latter having undoubtedly more impact and weight than we, or larger speculators, on those markets. Thus, I would say the key is trying to think like them to get some understanding of trading energies. Trading Charts Chart – Henry Hub Natural Gas (NGG22) Futures (February contract, daily chart) Now, let’s zoom into the 4H chart to observe the recent price action all around the above mentioned levels of our trade plan: Chart – Henry Hub Natural Gas (NGG22) Futures (February contract, 4H chart) In summary, my trading approach has led me to suggest some short trades around potential key resistances since this sudden surge in natural gas offered a great opportunity for the bears to enter short whilst aiming towards specific projected targets. Some of you – more aggressive traders – may also enjoy jumping on galloping horses. However, for such trades, the timeframe would be much shorter and difficult to make everyone take advantage of them, due to the volatility in the markets and the fact that I always try to provide trades with optimal entry levels meeting a profitable risk-to-reward ratio. You are always free – at your own risk and time schedule – to scalp the markets in a more aggressive way (counter-trend trading) towards a projected entry area if you feel comfortable doing so. However, sometimes, the “FOMO” (Fear-Of-Missing-Out) voices might tell you to trade when you shouldn’t, so just be aware that over-trading could also lead you to take more risky positions – refraining from trading all the time is also part of trading – a mind game that you will have to rapidly master! If you don’t want to miss any future trading alerts, make sure to look at our Premium section. Stay tuned – have a nice weekend! Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
S&P 500 (SPX) Chart Looks Like An Interesting Mountain Trip. Oil keeps moving up

S&P 500 (SPX) Chart Looks Like An Interesting Mountain Trip. Oil keeps moving up

Monica Kingsley Monica Kingsley 17.01.2022 15:18
S&P 500 didn‘t like latest weak data releases, but finished well off intraday lows. This reversal though leaves quite something to be desired – and it‘s sectoral composition doesn‘t pass the smell test entirely either. Yields continued to rise while HYG barely closed where it opened – that‘s not really risk-on. Cyclicals, and riskier parts of tech weren‘t visibly outperforming – the S&P 500 rally felt like a defensive bounce off some oversold levels. That‘s why it won‘t likely hold for long – I don‘t think we have seen the end of selling – more downside awaits. It‘s still correction time, even if 2022 is likely to end up around 5,150 – we‘re still in a bull market, and Big Tech would do well. For now though, rising yields are putting pressure – and they would continue to rise. As liquidity would no longer be added by the Fed by Mar, the question remains how much would funds coming out of the repo facilities and the overnight account at the Fed (think $2t basically) offset the intended tightening. Commodities aren‘t at all shaken, and Wednesday‘s positive copper move doesn‘t look to be an outlier – unlike Friday‘s decline that didn‘t correspond with other base metals. Even though it might be soothing to the pension funds, inflation rates aren‘t likely to come down to the usual massaged 2% during the next 2-3 years, no matter whether the Fed hikes by 0.25% 6 or 8 times. The persistently and unpleasantly 4-5% high CPI is likely to break the mainstream narrative, and stay with us for much longer than generally anticipated, which is only part of the reason why I am looking for gold to leave $1,870s very convincingly in the dust this year. Both yellow and black gold would rise in tandem, and the rising open crude oil profits (heavy long positions opened at $78) are part of the reason behind permanently elevated inflation ahead. The commodities upswing is also no longer tempered by the rising dollar. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook The tech reversal could carry the daily weight of S&P 500 upswing – the daily weight only. I‘m not looking for this modest show of strength to hold. Credit Markets HYG didn‘t close strongly either – rising yields are taking their toll, and will continue doing so. Gold, Silver and Miners Gold and silver downswing needn‘t be feared – while the metals are still sideways, the pressure to go up is building, and the dollar woes would be but the first catalyst (challenged faith in the Fed taming inflation would be next). Crude Oil Crude oil still finds it easiest to keep rising, and black gold could pause a little on the approach to $90 – the technical and fundamental upswing conditions are in place, and oil stocks will continue to be among the best S&P 500 performers. Copper Copper catch up was postponed a little – that‘s all. The decline wasn‘t a true reversal, and the red metal would take on $4.60 before too long again. Bitcoin and Ethereum Bitcoin and Ethereum still can‘t convince on the upside, and with no dovish surprise on the horizon, the path of least resistance probably remains down for now – today‘s session definitely confirms that. Summary S&P 500 upswing isn‘t to be trusted, and its defensive nature out of tune with bonds, is part of the reason why. The stock market correction has further to go, and while tech overall would do well in 2022, it has to decline first – that would set the stage for a good 2H advance. The early phase of the Fed tightening cycle belongs to the bears, and it would continue to be commodities and precious metals to weather the storms best. Long live the inflation trades. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
FTSE 100 and USDCHF slowly goes up?

FTSE 100 and USDCHF slowly goes up?

John Benjamin John Benjamin 17.01.2022 10:49
USDCHF attempts to rebound The US dollar came under pressure after a contraction in December’s US retail sales. Strong selling pressure from the supply area around 0.9280 has pushed the pair all the way below the daily support at 0.9100. An oversold RSI triggered a buying-the-dips behavior but the rebound could be limited as sentiment tilted to the bearish side. The bulls will need to reclaim the support-turned-resistance at 0.9190 first. Otherwise, a new round of sell-off below 0.9090 could send the greenback to last August lows near 0.9020. NZDUSD seeks post-rally support The New Zealand dollar fell as risk sentiment subsided going into the weekend. The surge above the supply zone around 0.6850 has triggered a reversal fever after a month-long sideways action. As the RSI drops back into the neutrality area, buyers could be waiting to jump in at a discount. A pullback below 0.6840 has led to some profit-taking but as long as the price stays above 0.6780 the rebound is valid, or the kiwi could revisit the critical floor at 0.6700. A break above the recent high at 0.6890 would extend the rally to 0.6960. UK 100 consolidates gains The FTSE 100 finds support from the UK’s stronger-than-expected GDP. A break above the top of the previous consolidation range (7545) means a continuation of the current uptrend. Trend-followers may consider a pullback as an opportunity to stake in. Short-term sentiment remains bullish as long as the index is above 7470. A break above the immediate resistance at 7580 would extend the rally upward. A deeper retracement would test 7370 which used to be a major resistance from the double top on the daily chart.
(TSLA) Tesla Stock with +1.75% There are many factors which can influence its price.

(TSLA) Tesla Stock with +1.75% There are many factors which can influence its price.

FXStreet News FXStreet News 17.01.2022 15:56
Tesla gains on Friday as Nasdaq finished in the green. TSLA stock closes at $1049.61 for a gain of 1.75%. Tesla shares are still in a downtrend but holding above the key pivot. Tesla (TSLA) returned to the green on Friday as the NASDAQ took the crown for best performing index, while the Dow suffered a bank burnout. Bank stocks reported on Friday in the form of Citigroup (C), JPMorgan (JPM) and Wells Fargo (WFC), and the results were decidedly mixed. Citigroup and JPMorgan fell heavily and dragged the Dow down with them. Yields though remained under control, allowing the Nasdaq to breathe lighter and make some headway after recent losses. This helped Tesla back into the green, but the stock remains choppy and sideways in motion. Tesla Stock News The Wall Street Journal reported over the weekend that a Tesla lawyer asked Cooley LLP, an international law firm, to fire one of its lawyers who had previously worked at the US SEC. The lawyer in question had supposedly interviewed Elon Musk in the SEC investigation in 2018 into Musk after he claimed on Twitter that he had gotten funding in place to take Tesla private. The SEC investigation led to Elon Musk and Tesla each paying $20 million fines. According to the WSJ article, a Tesla lawyer asked Cooley LLP to fire the attorney late last year, but Cooley did not follow through on the request. Tesla has used alternative law firms on several cases since December. Tesla and Cooley LLP have not yet responded to CNBC requests for comment. This may add to pressure on the stock despite Friday's rebound. Earlier in the week, investors and Cybertruck fans were left disappointed with a further delay to the truck's production timeline release, which has now been pushed to 2023. Tesla Stock Forecast Irrespective of the news, we have an indecisive chart here. TSLA stock's most recent high was a lower one than the previous and has put in a series of lower lows. This means it is currently in a short-term downtrend. $980 is the key pivot that will signify more losses. Breaking $980 makes the target $886. Holding above $980, and the target is $1,200. However, we have a declining Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD). The MACD has also crossed into negative territory. Tesla chart, daily
Holiday Jubilations Take Over GWENT!

Holiday Jubilations Take Over GWENT!

Finance Press Release Finance Press Release 22.12.2021 12:28
CD PROJEKT RED announces that the annual Winter Event has started in GWENT: The Witcher Card Game, with festive rewards and offers up for grabs for all players. GWENT's Winter Event is live right now and will end on January 11th at noon, CET. During this time players will be earning a special in-game resource called Pine Cones, acquired for logging in every day, completing daily quests, as well as winning matches in Standard, Seasonal, and Draft game modes. Once obtained, Pine Cones can then be exchanged for a swathe of themed vanities, including cardbacks, avatars and borders, titles — as well as both a leader and a coin skin! — via a dedicated page in the in-game Reward Book. Watch the Winter Event Trailer Additionally, owners of the Geralt leader skin will be able to take on two special contracts during the event, awarding those who complete them with the equippable Red Hat and Candy Sword trinkets for Geralt. Furthermore, for a limited time players can claim a Geralt-leader-skin-exclusive sword inspired by Netflix's The Witcher series — available for free to all until January 13th, in celebration of the second season's release.The holiday spirit has also spilled into the in-game store, where Shupe the Troll is currently hosting a special sale featuring the Midwinter Bundle and Frozen Bundle, both filled with merry items, as well as the Yule Board. Those who would also like to deck out Geralt with the Winter-Event-only trinkets, but don't yet have him in their collection, can purchase the witcher's legendary neutral leader skin, as it is up for grabs right now in the shop, too. Learn more about the Winter Event GWENT: The Witcher Card Game is available for free on PC via GOG.COM and Steam, Apple M1 Macs running macOS, as well as on Android and iOS. For more information on GWENT, visit playgwent.com. Source: CD Projekt
A New Journey and Saovine Event Kicks Off in GWENT! - 03.11.2021

A New Journey and Saovine Event Kicks Off in GWENT! - 03.11.2021

Finance Press Release Finance Press Release 03.11.2021 15:59
CD PROJEKT RED today announced that the 7th season of Journey and the Saovine live event are available in GWENT: The Witcher Card Game right now. This newest installment of Journey brings over 80 rewards across more than 100 levels for players to unlock. In addition to battling in GWENT's Standard, Seasonal and Draft modes, weekly quests can be undertaken to provide more opportunities to progress through levels, while new chapters of this latest Journey's story will also be available each week — centering around two higher vampires: Regis, an old friend and companion of Geralt of Rivia, and Dettlaff van der Eretein, known from The Witcher 3: Wild Hunt expansion Blood and Wine. Watch the Journey Season 7 Trailer As with previous seasons, the 7th season of Journey is available in two tiers. The free tier is available to all GWENT players and offers avatars, borders, and reward points to unlock — while Journey's Premium paid tier offers all that and more, with cardbacks, coins, music tracks, and titles to unlock, alongside the Regis neutral leader skin as well as alternative outfits and trinkets for Regis to equip during battles. Journey Season 7 begins today and will run for three months. Learn More About the Latest Season of Journey Also available from today in GWENT is Saovine — an annual Halloween-themed event, where this year players must complete special quests given by the three Crones: Whispess, Brewess, and Weavess. Once a player completes all quests from one of the three Crones, they will unlock a title, avatar, and border — and will then be free to accept quests from the remaining Crones. Players will also receive a special coin for doing the bidding of two of the Crones, and a border trinket for completing every task for all three of them. All brand new 11 Saovine rewards can only be gained during this event by fulfilling the Crones' demands. During Saovine, a number of Halloween-inspired ornaments will also be on sale in the GWENT in-game store, including two brand new items: the Saovine gameboard and the Bat Wings trinket for Shupe's leader skin. Saovine will come to an end at 12:00 noon, November 4th CET. Watch the Saovine Event Trailer GWENT: The Witcher Card Game is available for free on PC via GOG.COM and Steam, Apple M1 Macs running macOS, as well as on Android and iOS. For more information on GWENT, visit playgwent.com.   Source: CD Projekt
GWENT Masters Season 3 Concludes! New GWENT Update Coming Tomorrow!

GWENT Masters Season 3 Concludes! New GWENT Update Coming Tomorrow!

Finance Press Release Finance Press Release 06.12.2021 14:27
CD PROJEKT RED announces that Alexander "TLG_Cyberz" Schmidt has claimed the ultimate victory in the Season 3 GWENT World Masters tournament this past weekend, earning the title of GWENT World Champion in the official Witcher Card Game esports series. The season's grand finale tournament played out over the course of Saturday and Sunday, December 4th-5th. Streamed live on Twitch in its entirety, it saw 8 of the best GWENT players from around the world competing in high-stakes battles for a share of the $71,000 prize pool and the title of GWENT World Champion. Relive GWENT World Masters on the official CD PROJEKT RED Twitch channel. The final tournament prize pool distribution and standings are as follows: WINNERAlexander "TLG_Cyberz" Schmidt (Germany)FINALISTSAlexander "TLG_Cyberz" Schmidt (Germany) — $36,140Ilya "BigKuKuRUzina35" Lyapin (Russia) — $9,230SEMIFINALISTSZhang "lord-triss" Yusheng (China) — $8,305Oleg "Akela114" Nikolaev (Russia) — $7,455QUARTERFINALISTSAleksander "TLG_Pajabol" Owczarek (Poland) — $3,480PaweÅ‚ "kams134" Skoroda (Poland) — $2,840Damian "TailBot" Kaźmierczak (Poland) — $1,775Elias "theshaggynuts" Sagmeister (Austria) — $1,775 During the event, before the final match, CD PROJEKT RED also revealed that a new content update for GWENT is coming Tuesday, December 7th. The update will add 12 new cards (2 per each faction), while also introducing a number of regular balance changes. The video overview for the update is available on Twitch, via the GWENT World Masters tournament recording, as well as on GWENT's official YouTube channel. CD PROJEKT RED would like to thank all participants and everyone who watched live to help make GWENT World Masters such a fantastic event.For a complete overview of GWENT Masters — the official esports series for GWENT: The Witcher Card Game — including the ruleset, format, and tournament dates, visit masters.playgwent.com.GWENT: The Witcher Card Game is available for free on PC via GOG.COM and Steam, Apple M1 Macs running macOS, as well as on Android and iOS. For more information on GWENT, visit playgwent.com.   Source: CD Projekt
Another One Bites the Dust

Another One Bites the Dust

Monica Kingsley Monica Kingsley 20.01.2022 16:36
S&P 500 gave up opening gains that could have lasted longer – but the bear is still strong, and didn‘t pause even for a day or two. Defeated during the first hour, the sellers couldn‘t make much progress, and credit markets confirm the grim picture. There is a but, though – quality debt instruments turned higher, and maintained much of their intraday gains.And that could be a sign – in spite of the bearish onslaught driving the buyers back to the basement before the closing bell – that more buying would materialize to close this week, with consequences for S&P 500 as well. I would simply have preferred to see rising yields once again, that would be a great catalyst of further stock market selling. Now, the wisest course of action looks to be waiting for the upcoming upswing (one that didn‘t develop during the Asian session really), to get exhausted.Remember my yesterday‘s words:(…) The rising yields are all about betting on a really, really hawkish Fed – just how far are the calls for not 25, but 50bp hike this Mar? Inflation is still resilient (of course) but all it takes is some more hawkish statements that wouldn‘t venture out of the latest narrative line.Anyway, the markets aren‘t drinking the kool-aid – the yield curve continues flattening, which means the bets on Fed‘s misstep are on. True, the tightening moves have been quite finely telegraphed, but the markets didn‘t buy it, and were focused on the Santa Claus (liquidity-facilitated) rally instead – therefore, my Dec 20 warning is on. The clock to adding zero fresh liquidity, and potentially even not rolling over maturing securities (as early as Mar?) is ticking.And the run to commodities goes on, with $85 crude oil not even needing fresh conflict in Eastern Europe – the demand almost at pre-corona levels leaving supply and stockpiles in the dust, is fit for the job.With SPX short profits off the table, crude oil consolidating, and cryptos having second thoughts about the decline continuation, it‘s been precious metals that stole the spotlight yesterday – really great moves across the board to enjoy!Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 buyers are nowhere to be seen – what kind of reflexive rebound would we get next? The odds aren‘t arrayed for it to be reaching very high – yields are catching up even with financials...Credit MarketsHYG is likely to pause a little next, and the degree of its move relative to the quality debt instruments, would be telling. Rates are though going to keep rising, so keep looking for a temporary HYG stabilization only.Gold, Silver and MinersGold and silver keep catching fire, and are slowly breaking out of the unpleasantly long consolidation. The strongly bullish undertones are playing out nicely – these aren‘t yet the true celebrations.Crude OilCrude oil looks like it could pause a little here – the stellar run (by no means over yet) is attracting selling interest. The buyers are likely to pause for a moment over the next few days.CopperCopper is paring back on the missed opportunity to catch up – the red metal will be dragged higher alongside the other commodities, and isn‘t yet offering signs of true, outperforming strength.Bitcoin and EthereumBitcoin and Ethereum really are setting up a little breather, but I‘m not looking for bullish miracles to happen. Still, the buying interest was there yesterday, and that would influence the entry to the coming week (bullishly).SummaryS&P 500 upswing turned into a dead cat bounce pretty fast, and while we may see another attempt by the bulls, I think it would be rather short-lived. Think lasting a couple of days only. Not until there is a change in the credit markets, have the stock market bulls snowball‘s chance in hell. Commodities and especially precious metals, are well placed to keep reaping the rewards – just as I had written a week ago. For now, it‘s fun to be riding the short side in S&P 500 judiciously, and the time for another position opening, looks slowly but surely approaching. Let the great profits grow elsewhere in the meantime.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Gold: Technical Analysis, Fundamental Analysis, Macro Influences - The Latest "As Good As Gold" Is Here!

Russian Bear and Inflationary Hydra Sent Gold to $1,840

Arkadiusz Sieron Arkadiusz Sieron 20.01.2022 17:24
  Gold soared as investors got scared by reports of an allegedly impending military conflict. Was it worth reacting sharply to geopolitical factors? Gold has been performing quite nicely in January. As the chart below shows, its price increased from $1,806 at the end of December to around $1,820 this week, strengthening its position above $1,800. Yesterday (January 19, 2022), gold prices went sharply higher, jumping above $1,840, as one can see in the chart below. What happened? Investors got scared of the Russian bear and inflationary hydra. President Biden predicted that Russia would move into Ukraine. The threat of invasion and renewal of a conflict weakened risk appetite among investors. To complete the geopolitical picture, this week, North Korea fired missiles again (on Monday, the country conducted its fourth missile test of the year), while terrorists attacked the United Arab Emirates with drones. The heightened risk aversion could spur some demand for safe-haven assets such as gold. The yellow metal tends to benefit from greater uncertainty. However, investors should remember that geopolitical risks usually cause only a short-lived reaction. Investors also recalled the ongoing global inflationary crisis. Some news helped them wake up. In the U.K., inflation surged 5.4% in December, the highest since March 1992. Meanwhile, in Canada, inflation jumped 4.8%, also the fastest pace in 30 years. Additionally, crude oil prices have jumped to around $86.5 per barrel, the highest value since 2014, as the chart below shows. The timing couldn’t be worse, as inflation is already elevated, while higher oil implies higher CPI in the future. Gold should, therefore, welcome the rise in oil prices. On the other hand, it could prompt the Fed to react more forcefully and aggressively to tighten its monetary policy.   Implications for Gold What does the recent mini-rally imply for the gold market? Well, it’s never a good idea to draw far-reaching conclusions from short-term moves, especially those caused by geopolitical factors. Risk-offs and risk-on sentiments come and go. However, let’s do justice to gold. It hit a two-months high, more and more boldly settling in above $1,800. All this happened despite rising bond yields. As the chart below shows, the long-term real interest rates have increased from about -1.0% at the end of 2021 to about -0.6%. Gold’s resilience in the face of rising interest rates is praiseworthy. Having said that, investors shouldn’t forget that 2022 will be a year of the Fed’s tightening cycle, rising interest rates, and also a certain moderation in inflation. All these factors could be important headwinds for gold this year. However, investors may underestimate how the Fed’s monetary policy will impact market conditions. After all, the Fed’s hawkish stance also entails some risks for the financial markets and the overall economy. Practically, each tightening cycle in the past has led to an economic crisis. As a reminder, after four hikes in 2018, the Fed had to reverse its stance and cut them in 2019. The Fed signaled not only a few hikes this year, but also a reduction of its balance sheet. Given the enormous indebtedness of the economy and Wall Street’s addiction to easy money, it might be too much to swallow. Importantly, when the Fed is focused on fighting inflation, its ability to help the markets will be limited. I thought that such worries would arise later this year, supporting gold, but maybe the gold market has already started to price in the possibility of economic turbulence triggered by the Fed’s tightening cycle. Anyway, next week, the FOMC will gather for the first time in 2022, and it could be an important, insightful event for the gold market. Stay tuned! If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
Technical Analysis: Moving Averages - Did You Know This Tool?

Gold Price Chart Might Make Some Investors Happy, US 30 With Reds

John Benjamin John Benjamin 21.01.2022 08:59
XAUUSD breaks resistance Gold surged over geopolitical tensions between the West and Russia over Ukraine. Following a three-week-long sideways grind, the break above the triple top at 1830 indicates strong commitment from the buy-side. 1850 is the next level to clear, which would lead to November’s peak at 1877. The RSI has shot into the overbought area, and some profit-taking could briefly drive the price lower. Buyers may see a pullback as an opportunity to join in. 1820 near the base of the recent rally is a key support in this case. AUDUSD seeks support The Australian dollar climbed back after the unemployment rate dropped to 4.2% in December. A surge above 0.7270 was the bulls’ attempt to initiate a reversal. As sellers covered their bets, the way might be open for a meaningful rebound. The follow-up correction met solid buying interest at 0.7170. Sentiment would remain upbeat as long as price action stays above this key support. 0.7290 is an important hurdle and its breach could trigger a runaway rally towards 0.7420. US 30 tests major support The Dow Jones 30 retreats as traders take profit ahead of next week’s Fed meeting. The index has given up all its gains from the late December rally and fell through the daily support at 34700. This bearish breakout could extend losses to the psychological level of 34000, a critical floor to prevent a deeper correction in the medium-term. The RSI’s oversold situation may attract some buying interest. Nonetheless, the bulls will need to lift offers around 35500 in a show of force, in order to turn sentiment around.
Gamestop (GME) Stock Price and Forecast: Any pop from Activision (ATVI), Microsoft (MSFT) deal?

Gamestop (GME) Stock Price and Forecast: Any pop from Activision (ATVI), Microsoft (MSFT) deal?

FXStreet News FXStreet News 20.01.2022 15:58
GameStop stock fails to ignite despite the gaming sector being in play. GameStop is a bystander retailer, while the big activity is game makers. GME stock remains bearish in our view despite a mid-week short squeeze attempt. GameStop (GME) stock surged in early January but has since slumped consistently. At least some volatility returned to the name. GameStop was the original meme stock but has been suffering of late as investors turn their backs on high growth and high-risk names. GameStop Stock News A pop of 7% on January 7 has been about as good as it gets so far this year for GameStop (GME) holders as the stock exhibits more signs of dwindling interest in the meme stock space. The Wall Street Journal did report on January 7 that GameStop was entering the NFT and cryptocurrency market. This has echoes of another meme stock, AMC. It may smack of desperation or even bad timing given the crypto and NFT craze has also retreated in line with meme stocks. Or it may be a shrewd move. Time will tell, but so far the shares have not given the news much traction. Interest did spike in GME on the back of the mega-deal from Microsoft (MSFT) offering up $69 billion in cash to buy Activision (ATVI), but GameStop is merely a powerless bystander in the acquisition fervor sweeping the gaming sector. GameStop (GME) jumped to the top of WallStreetBets mentions, but this has not seen the correlated share price uptick. In fact, GME shares are down 17% in a week. That takes losses so far for 2022 to nearly 30%. One year on and it does not look like history is going to repeat itself. Video game sales data out yesterday was not exactly comforting with the figure in December down 1% following November's 10% fall. GameStop Stock Forecast The chart is still highly bearish, which was triggered after the double-top formation. This played out and reached our $150 target and then some. Now GME has broken the $118 level, which brings $86 firmly into focus as the next major target. Obviously, $100 along the way will generate headlines, but this is purely psychological. We also note the volume gap from $110 to $70 that could accelerate the move. Bearish unless $160 is broken. GameStop (GME) chart, daily
Can We Call It A Crypto Crash? Bitcoin Below $40k And Ether Below $3k

Can We Call It A Crypto Crash? Bitcoin Below $40k And Ether Below $3k

Alex Kuptsikevich Alex Kuptsikevich 21.01.2022 09:44
The crypto market capitalisation fell to 1.83 trillion, losing 7.3% in the past 24 hours. As we had feared, the selloff was triggered by sharply negative sentiment in US equity markets and intensified by the breakdown of critical support levels. Bitcoin retreated to the $38.8K area. The amplitude of the decline from the peak at the start of the regular session in New York to the bottom at the opening of Asia exceeds 12%. Sellers have proven unbreakable (so far) the upper boundary of the downward price channel that has dominated bitcoin since mid-November. Another worrying fact is that Bitcoin's share has risen to 40.2% of the crypto's total cap. The implication is that investors are breaking out of altcoins even more sharply, as they are less confident in the ability of smaller coins to withstand the titans' fall. Without a sharp intraday reversal (chances for this are minimal), we can confidently expect an acceleration of long position liquidation in Bitcoin and further drawdowns. There is nowhere to look for support until the $30-33K area on the chart. Ether has given up support at $3K, quickly pulling back into the consolidation area of late September, ending up near $2.85K. The intensification of the selloff makes $2K the target of the initial downside wave. Earlier in 2021, the area of 30K for Bitcoin and near 2K for Ether was the bottom of a deep correction. This then attracted buyers, and the total market managed to rewrite highs. In that drawdown, the total capitalisation of cryptocurrencies was down to $1.2 trillion. If the first two cryptocurrencies were targeting lows last summer, it is logical to expect the entire market to return to the lows of that time. But then the external backdrop was highly favourable, as the US market was returning to growth with drawdowns in the 5% range, having already crossed that barrier earlier last year. The continued negative backdrop in equities sets up a deeper pullback in crypto. The crypto market's capitalisation could potentially shrink by half to the $830-900bn area before we see a new wave of long-term buyer inflows. For Bitcoin, this suggests the potential for a drop to 20k.
Still Pushing for More

Still Pushing for More

Monica Kingsley Monica Kingsley 21.01.2022 16:23
S&P 500 gave up yet again the opening gains – the bear didn‘t pause even for a day or two. Buyers defeated during the first hours, and credit markets are once again leaning the bearish way. Risk-off rules even if long-dated Treasuries rose for a day. Tech investors are selling first, and asking questions later, with consumer discretionaries, financials, and also energy hit. The washout S&P 500 bottom is approaching, and our fresh short profits are growing...Talking profits, after a one-day consolidation in precious metals, time has come to cash in on crude oil gains before the decline questioning $86 – that‘s second outsized gains trade in a row there. Black gold won‘t likely be held down for too long, and the same goes for copper knocking on $4.60 for the third time shortly. Excellent for the bottom line.This is the season of real assets (commodities and precious metals), and of the stock market correction still playing out, and driving open crypto short profits alike. Much to enjoy across the board as my fresh portfolio performance chart (check out my homesite) reached a solid new high yesterday – it‘s one year today since I launched my site. Tremendous journey building on prior own strength – thank you very much!Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 buyers still can‘t get their act together – the momentum remains to the downside until credit markets turn and tech bleeding stops. This can happen as early as Monday or Tuesday – I remain watching closely for signs of a high-confidence setup to perhaps take.Credit MarketsHYG pause didn‘t last long, and the volume keeps being elevated without credible signs of buying interest. What‘s more, the credit market posture is decidedly risk-off.Gold, Silver and MinersGold and silver are likely to pause a little, the miners say – but the propensity to rise is there, even this early in the tightening cycle. I‘m looking for dips to be eagerly bought.Crude OilCrude oil looks like seeing the bullish resolve tested soon, and odds are the dip would be relatively quickly bought. Still, the pace of steep upswings is likely to slow down next, I say so even as I continue being medium-term bullish ($90 is doable).CopperCopper is paring back on the missed opportunity to catch up, and it‘s good the red metal managed to rise even if quite a few other commodities stalled. Waking up alongside silver, finally?Bitcoin and EthereumBitcoin and Ethereum little breather is over, the bears did strike again – and it may not be over yet, really not.SummaryThe opening sentence of yesterday‘s summary proved very true, and even faster that I thought possible - „S&P 500 upswing turned into a dead cat bounce pretty fast, and while we may see another attempt by the bulls, I think it would be rather short-lived. Think lasting a couple of days only.“ With the bears in the driving seat overnight – on the heels of a risk-off turn in the credit markets – we‘re likely to witness today another selling attempt.Another yesterday mentioned conclusion remains true as well - „Commodities and especially precious metals, are well placed to keep reaping the rewards – just as I had written a week ago. For now, it‘s fun to be riding the short side in S&P 500 judiciously... Let the great profits grow elsewhere in the meantime.“ Let‘s just add that cryptos are making us smile today, too.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish?

Gold Is the Belle of the Ball. Will Its Dance Turn Bearish?

Przemysław Radomski Przemysław Radomski 21.01.2022 16:06
  The precious metals still do pirouettes on the trading floor, but they can stumble in their choreography. The bears are just waiting for it. With the GDX ETF soaring on significant volume on Jan. 19, the senior miners had a renewed pep in their step. With gold, silver, and mining stocks all dancing to the same beat, the precious metals garnered all of the bullish attention. However, with the trio known to cut their performances short as soon as investors arrive, will the mood music remain so sanguine? Well, for one, the GDX ETF has a history of peaking when the crowd enters the party. For example, I marked with the blue vertical dashed lines and blue arrows below how large daily spikes in volume often coincide with short-term peaks. Moreover, with another ominous event unfolding on Jan. 19, historical data implies that we’re much closer to the top than the bottom. To explain, I wrote on Jan. 20: From the technical point of view, we just saw another day similar to the other days that I marked with vertical dashed lines and black arrows. Those days were either right at the tops or not far from them. As much as yesterday’s (7%!) rally looks bullish, taking a look at the situation from a broad perspective provides us with the opposite – bearish – implications. The zig-zag scenario is being realized as well. The GDX ETF moved to the upper border of the rising trend channel. Also, doesn’t it remind you of something? Hint: it happened at a similar time of the year. Yes, the current price/volume action is similar to what we saw in early 2021. The RSI was above 60, a short-term rally that was preceded by a bigger decline, and a strong daily rally on huge volume at the end of the corrective rally. We’ve seen it all now, and we saw it in early 2021. Please see below: What’s more, the senior miners’ fatigue is already present. For example, the GDX ETF declined by 1.40% on Jan. 20, and the index ended the session only $0.30 above its 2021 close. Likewise, the senior miners failed to rally above the upper trendline of their ascending channel (drawn with the blue lines above). As a result, the price action resembles an ABC zigzag pattern, and while the short-term outlook is less certain, the medium-term outlook is profoundly bearish. As further evidence, the HUI Index’s weekly chart provides some important clues. For example, despite the profound rally on Jan. 19, the index’s stochastic indicator still hasn’t recorded a buy signal. Moreover, the HUI Index dropped after reaching its 50-week moving average, and the ominous rejection mirrors 2013. Back then, the index approached its 50-week moving average, then suffered a pullback, and then suffered a monumental decline. As a result, is this time really different? Remember – history tends to rhyme, and this time the analogies from the past favor a bearish forecast for gold stocks. Turning to the GDXJ ETF, the junior miners were off to the races on Jan. 19. However, the size of the rally is actually smaller than what we witnessed in early 2021. Moreover, when the short-term sugar high ended back then, optimism turned to pessimism and the GDXJ ETF sank to new lows. Thus, with the junior miners’ 2021 story one of lower highs and lower lows, 2022 will likely result in more of the same. Please see below: Finally, the Gold Miners Bullish Percent Index ($BPGDM) isn’t at levels that trigger a major reversal. The Index is now at 30. However, far from a medium-term bottom, the latest reading is still more than 20 points above the 2016 and 2020 lows. Likewise, when the BPGDM hit 30 in 2013, the HUI Index was already in the midst of its medium-term downtrend (similar to what we witnessed in 2021). However, the milestone was far from the final low. With material weakness persisting and a lasting bottom not forming until the end of 2015/early 2016, further downside for gold (and silver) likely lies ahead. For context, it’s my belief that the precious metals will bottom when the BPGDM hits zero – and perhaps when it remains there for some time. In conclusion, gold, silver, and mining stocks put on quite a show on Jan. 19. However, with their bullish rhythm known to turn bearish in an instant, investors should proceed with caution. Moreover, the data shows that when investors rush to buy the precious metals, their over-enthusiasm results in medium-term weakness, not strength. As a result, the trio’s declines likely have more room to run before long-term buying opportunities emerge later in 2022. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Tesla Stock Price and Forecast: Despite market sell-off, TSLA finished Thursday in the green

Tesla Stock Price and Forecast: Despite market sell-off, TSLA finished Thursday in the green

FXStreet News FXStreet News 21.01.2022 16:06
TSLA finished Thursday in the green, gaining 0.06% to $996.27. Equities had gyrated sharply but fell as the close approached. Tesla stock outperforms as Nasdaq and S&P 500 both fall sharply. Tesla (TSLA) managed to hold onto intraday gains but only just barely on Thursday. Stocks (https://www.fxstreet.com/markets/equities) had opened well and were up some 1% for the main indices at the halfway stage of Thursday, but jitters resurfaced as the finish line approached. Investors began dumping positions, and the main indices closed in the red. The S&P 500 shed 1.1%, the Dow closed 0.89% lower and the Nasdaq closed down the most at 1.34% in the red. Tesla however just held onto a green day, up 0.06%. Given that it is a volatile name and a high beta one, this was a strong outperformance. Tesla Stock News: bearish Bank of America forecast a worrying sign Tesla (TSLA) stock may have held its ground in anticipation of its Q4 earnings, which are due out next week. Bank of America and Piper Sandler fought it out with conflicting analyst reports. Bank of America took a dim view of Tesla's market share forecasts, saying it would drop from 69% to 19% of the EV market due to legacy automakers ramping up EV production. However, Piper Sandler noted that it sees Tesla beating delivery estimates for the year due to factories in Texas and Berlin ramping up production. For now, it appears investors are putting more focus on those delivery numbers and anticipating a strong earnings report. The Bank of America report is more alarming, but it does have a longer term outlook with the market share fall predicted for 2024. Tesla Stock Forecast: $886 is a futher downside target Yesterday's move has kept Tesla above the key short-term pivot at $980, but note that yesterday's high price was stuck at the 9-day moving average and Tesla failed to break through. This gives us more belief in an imminent break of $980. If this level does go, then the move to $886 will likely be quick due to a lack of volume. Tesla (TSLA) chart, daily
Shiba Inu price set to crash by 70% as critical support weakens

Shiba Inu price set to crash by 70% as critical support weakens

FXStreet News FXStreet News 21.01.2022 16:06
Shiba Inu price sees bears drilling down on an important area of support. SHIB price could see a nose dive reaction later today should the US session see accelerated selloffs. A break below the 200-day SMA could hold 70% of losses before plenty of support is found. Shiba Inu (SHIB) price continues to be controlled by bears after the dead-cat bounce in stock markets yesterday evening. With the Nasdaq closing sharply lower, giving up earlier gains, cryptocurrencies are being dragged into a selloff on its coattails, and bearish headwinds persist. Expect a further continuation of downside tests, with $0.00002576, up next, and a break below that opening up the possibility of SHIB price being decimated towards $0.00000655 – a 70% devaluation. Shiba Inu hanging by a thread before price action could collapse Shiba Inu price is in a vortex along with other financial market assets, after the US session saw a180 degree U-turn to the downside. The ASIA PAC and European sessions are also sharply lower and with risk assets being slashed across the board. This is being reflected in cryptocurrencies where a selloff is also taking place. At the moment, SHIB price is drilling down to $0.00002482, a level where the 200-day Simple Moving Average (SMA) and the monthly S1 support level intersect.This should offer plenty of support, but with current market sentiment so negative, it is not a given that investors will want to step in and support the trade. A break lower would see price next pause at $0.00001623, the S2 monthly support. The level of the S2 does not hold any historical relevance, however, making it relatively weak, and the only key level further down looks to be $0.00000607, just above the S3 monthly support, and the starting point of a Fibonacci retracement. Depending on how the US session will unfold, expect this to be on the cards in the days to come if markets enter into correction territory or even into a recession. The result would be SHIB shedding 70% of its market value from where it is currently trading. SHIB/USD daily chart Often enough, markets see an uptick after a gloomy negative day like yesterday. Investors start to come in and pick up interesting assets at a discount, and markets finally get to a point where a revaluation trade is made. This could be the same for Shiba Inu, with the 200-day SMA holding its ground, supporting price action, and a bullish candle starting to form with a test at the 55-day SMA around $0.00003395.
USDCHF, CADJPY And UK 100 - All Of Them Got Some Gains

USDCHF, CADJPY And UK 100 - All Of Them Got Some Gains

John Benjamin John Benjamin 24.01.2022 09:51
USDCHF tests daily support The Swiss franc rallied as traders poured into safe-haven currencies. The pair previously bounced off the critical floor (0.9090) on the daily chart. An oversold RSI in this demand zone brought in some buying interest. However, sentiment remains downbeat with the greenback struggling to clear offers around 0.9180. A fall below said support would trigger a new round of sell-off towards 0.9020 as late buyers rush to the exit. On the upside, a bullish breakout would open the door to the recent peak at 0.9275. CADJPY breaks key support The Canadian dollar slipped after disappointing retail sales in November. A bearish RSI divergence at the recent high (91.15) indicates a loss of momentum in the rally. The first drop below 90.60 prompted some buyers to bail out. Then the rebound met stiff selling pressure at 91.90. And this is a sign of exhaustion after a four-week-long uptrend. The loonie now has fallen through the major support at 90.60, with 89.80 as the target. As the RSI goes oversold, traders may look to sell the next bounce near 91.05. UK 100 tumbles through supports The FTSE 100 stalls as appetite subsides across risk assets. An overbought RSI on the daily chart suggests over-extension after a month-long rally. A pullback is necessary for the bulls to catch their breath. A drop below 7530 and then 7470 further weighs on short-term sentiment as profit-taking intensifies. The index is about to test 7380, a fresh demand zone from the November-December double top on the daily timeframe. The bulls need to reclaim 7540 before a rebound could gain traction.
COT Currency Speculator Sentiment rising for Euro & British Pound Sterling

COT Currency Speculator Sentiment rising for Euro & British Pound Sterling

Invest Macro Invest Macro 24.01.2022 11:36
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday January 18th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar. Highlighting the COT currency data is the trend changes in speculator sentiment we are seeing in the Euro and the British pound sterling. Speculators have been boosting their bets for the Euro and pound sterling over the past weeks and have now pushed their bets in both currencies to their best levels since September. Euro positions have gained for five consecutive weeks (a 5-week total rise of +36,463 contracts) and have now been in bullish territory for two straight weeks after spending thirteen out of the past fourteen weeks in bearish territory. This week’s net position of +24,584 contracts marks the best position since September 14th when positions were in a downtrend and on their way into negative territory. British pound speculator bets, meanwhile, have risen sharply with four straight weeks of gains (a 4-week rise by +57,439 contracts) and have now settled into a current position of just -247 net contracts. The net position had been at a multi-year bearish high of -57,686 contracts as recently as December 21st before a turnaround in sentiment. Free Reports: Top 5 Companies Added to Our Stock Watch List this Quarter - Here are the Stock Symbols that stood out so far in the fourth quarter of 2021. Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis. Joining the Euro (18,579 contracts) and British pound sterling (28,919 contracts) with positive changes this week were the yen (6,646 contracts), New Zealand dollar (273 contracts), Canadian dollar (14,868 contracts), Australian dollar (3,032 contracts) and the Mexican peso (9,371 contracts). The currencies with declining bets were the US Dollar Index (-1,458 contracts), Brazil real (-557 contracts), Swiss franc (-3,150 contracts), Russian ruble (-3,195 contracts) and Bitcoin (-172 contracts) Data Snapshot of Forex Market Traders | Columns Legend Jan-18-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index EUR 691,882 80 24,584 43 -50,464 61 25,880 17 JPY 201,820 56 -80,879 17 99,740 86 -18,861 9 GBP 183,234 28 -247 74 2,848 31 -2,601 50 AUD 181,136 68 -88,454 3 98,519 92 -10,065 28 MXN 151,778 27 4,920 29 -7,490 70 2,570 54 CAD 143,371 26 7,492 58 -13,723 47 6,231 42 USD Index 53,283 74 36,434 89 -42,397 4 5,963 82 RUB 45,413 46 6,422 29 -7,251 69 829 57 NZD 44,727 33 -8,331 57 10,622 47 -2,291 26 CHF 39,871 14 -10,810 51 13,799 46 -2,989 54 BRL 32,098 30 -11,369 53 10,759 48 610 74 Bitcoin 11,468 62 -549 91 -22 0 571 26   US Dollar Index Futures: The US Dollar Index large speculator standing this week was a net position of 36,434 contracts in the data reported through Tuesday. This was a weekly lowering of -1,458 contracts from the previous week which had a total of 37,892 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 88.6 percent. The commercials are Bearish-Extreme with a score of 4.1 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 81.8 percent. US DOLLAR INDEX Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 79.5 3.2 15.4 – Percent of Open Interest Shorts: 11.1 82.7 4.2 – Net Position: 36,434 -42,397 5,963 – Gross Longs: 42,369 1,684 8,180 – Gross Shorts: 5,935 44,081 2,217 – Long to Short Ratio: 7.1 to 1 0.0 to 1 3.7 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 88.6 4.1 81.8 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bullish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 2.7 -3.6 6.8   Euro Currency Futures: The Euro Currency large speculator standing this week was a net position of 24,584 contracts in the data reported through Tuesday. This was a weekly gain of 18,579 contracts from the previous week which had a total of 6,005 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 42.5 percent. The commercials are Bullish with a score of 61.5 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 17.3 percent. EURO Currency Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 30.6 56.3 11.5 – Percent of Open Interest Shorts: 27.1 63.6 7.8 – Net Position: 24,584 -50,464 25,880 – Gross Longs: 211,901 389,617 79,656 – Gross Shorts: 187,317 440,081 53,776 – Long to Short Ratio: 1.1 to 1 0.9 to 1 1.5 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 42.5 61.5 17.3 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 10.1 -8.6 -4.3   British Pound Sterling Futures: The British Pound Sterling large speculator standing this week was a net position of -247 contracts in the data reported through Tuesday. This was a weekly gain of 28,919 contracts from the previous week which had a total of -29,166 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 73.8 percent. The commercials are Bearish with a score of 31.4 percent and the small traders (not shown in chart) are Bullish with a score of 50.3 percent. BRITISH POUND Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 21.7 62.5 14.3 – Percent of Open Interest Shorts: 21.8 60.9 15.8 – Net Position: -247 2,848 -2,601 – Gross Longs: 39,760 114,486 26,267 – Gross Shorts: 40,007 111,638 28,868 – Long to Short Ratio: 1.0 to 1 1.0 to 1 0.9 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 73.8 31.4 50.3 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 27.4 -30.6 28.5   Japanese Yen Futures: The Japanese Yen large speculator standing this week was a net position of -80,879 contracts in the data reported through Tuesday. This was a weekly boost of 6,646 contracts from the previous week which had a total of -87,525 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 16.9 percent. The commercials are Bullish-Extreme with a score of 85.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 9.0 percent. JAPANESE YEN Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 4.0 86.1 8.7 – Percent of Open Interest Shorts: 44.0 36.6 18.0 – Net Position: -80,879 99,740 -18,861 – Gross Longs: 8,002 173,701 17,475 – Gross Shorts: 88,881 73,961 36,336 – Long to Short Ratio: 0.1 to 1 2.3 to 1 0.5 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 16.9 85.7 9.0 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -11.3 9.5 -3.1   Swiss Franc Futures: The Swiss Franc large speculator standing this week was a net position of -10,810 contracts in the data reported through Tuesday. This was a weekly reduction of -3,150 contracts from the previous week which had a total of -7,660 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 51.1 percent. The commercials are Bearish with a score of 46.4 percent and the small traders (not shown in chart) are Bullish with a score of 54.5 percent. SWISS FRANC Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 2.3 67.3 30.0 – Percent of Open Interest Shorts: 29.4 32.7 37.5 – Net Position: -10,810 13,799 -2,989 – Gross Longs: 925 26,828 11,951 – Gross Shorts: 11,735 13,029 14,940 – Long to Short Ratio: 0.1 to 1 2.1 to 1 0.8 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 51.1 46.4 54.5 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 2.2 -7.4 15.5   Canadian Dollar Futures: The Canadian Dollar large speculator standing this week was a net position of 7,492 contracts in the data reported through Tuesday. This was a weekly advance of 14,868 contracts from the previous week which had a total of -7,376 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 57.9 percent. The commercials are Bearish with a score of 46.9 percent and the small traders (not shown in chart) are Bearish with a score of 42.2 percent. CANADIAN DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 34.7 41.1 21.8 – Percent of Open Interest Shorts: 29.5 50.7 17.5 – Net Position: 7,492 -13,723 6,231 – Gross Longs: 49,792 58,921 31,270 – Gross Shorts: 42,300 72,644 25,039 – Long to Short Ratio: 1.2 to 1 0.8 to 1 1.2 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 57.9 46.9 42.2 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 15.3 -13.5 6.0   Australian Dollar Futures: The Australian Dollar large speculator standing this week was a net position of -88,454 contracts in the data reported through Tuesday. This was a weekly increase of 3,032 contracts from the previous week which had a total of -91,486 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 2.8 percent. The commercials are Bullish-Extreme with a score of 92.4 percent and the small traders (not shown in chart) are Bearish with a score of 27.9 percent. AUSTRALIAN DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 5.0 82.2 10.5 – Percent of Open Interest Shorts: 53.8 27.9 16.1 – Net Position: -88,454 98,519 -10,065 – Gross Longs: 9,051 148,978 19,008 – Gross Shorts: 97,505 50,459 29,073 – Long to Short Ratio: 0.1 to 1 3.0 to 1 0.7 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 2.8 92.4 27.9 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -6.2 -0.3 17.1   New Zealand Dollar Futures: The New Zealand Dollar large speculator standing this week was a net position of -8,331 contracts in the data reported through Tuesday. This was a weekly advance of 273 contracts from the previous week which had a total of -8,604 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 57.3 percent. The commercials are Bearish with a score of 46.8 percent and the small traders (not shown in chart) are Bearish with a score of 25.6 percent. NEW ZEALAND DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 26.0 66.8 6.4 – Percent of Open Interest Shorts: 44.6 43.0 11.5 – Net Position: -8,331 10,622 -2,291 – Gross Longs: 11,612 29,876 2,851 – Gross Shorts: 19,943 19,254 5,142 – Long to Short Ratio: 0.6 to 1 1.6 to 1 0.6 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 57.3 46.8 25.6 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -31.9 30.0 -5.2   Mexican Peso Futures: The Mexican Peso large speculator standing this week was a net position of 4,920 contracts in the data reported through Tuesday. This was a weekly increase of 9,371 contracts from the previous week which had a total of -4,451 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 29.4 percent. The commercials are Bullish with a score of 69.7 percent and the small traders (not shown in chart) are Bullish with a score of 53.9 percent. MEXICAN PESO Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 49.7 46.1 3.9 – Percent of Open Interest Shorts: 46.5 51.0 2.2 – Net Position: 4,920 -7,490 2,570 – Gross Longs: 75,461 69,942 5,901 – Gross Shorts: 70,541 77,432 3,331 – Long to Short Ratio: 1.1 to 1 0.9 to 1 1.8 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 29.4 69.7 53.9 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 29.4 -30.3 15.6   Brazilian Real Futures: The Brazilian Real large speculator standing this week was a net position of -11,369 contracts in the data reported through Tuesday. This was a weekly fall of -557 contracts from the previous week which had a total of -10,812 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 53.4 percent. The commercials are Bearish with a score of 47.8 percent and the small traders (not shown in chart) are Bullish with a score of 74.2 percent. BRAZIL REAL Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 34.1 56.6 8.9 – Percent of Open Interest Shorts: 69.6 23.1 7.0 – Net Position: -11,369 10,759 610 – Gross Longs: 10,958 18,179 2,841 – Gross Shorts: 22,327 7,420 2,231 – Long to Short Ratio: 0.5 to 1 2.5 to 1 1.3 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 53.4 47.8 74.2 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -7.7 6.6 9.9   Russian Ruble Futures: The Russian Ruble large speculator standing this week was a net position of 6,422 contracts in the data reported through Tuesday. This was a weekly decrease of -3,195 contracts from the previous week which had a total of 9,617 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 28.6 percent. The commercials are Bullish with a score of 68.9 percent and the small traders (not shown in chart) are Bullish with a score of 57.1 percent. RUSSIAN RUBLE Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 35.3 60.0 4.6 – Percent of Open Interest Shorts: 21.2 75.9 2.8 – Net Position: 6,422 -7,251 829 – Gross Longs: 16,034 27,233 2,101 – Gross Shorts: 9,612 34,484 1,272 – Long to Short Ratio: 1.7 to 1 0.8 to 1 1.7 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 28.6 68.9 57.1 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -17.5 19.1 -25.4   Bitcoin Futures: The Bitcoin large speculator standing this week was a net position of -549 contracts in the data reported through Tuesday. This was a weekly decline of -172 contracts from the previous week which had a total of -377 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 90.9 percent. The commercials are Bearish with a score of 28.5 percent and the small traders (not shown in chart) are Bearish with a score of 25.9 percent. BITCOIN Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 73.4 3.1 12.3 – Percent of Open Interest Shorts: 78.2 3.3 7.3 – Net Position: -549 -22 571 – Gross Longs: 8,417 355 1,407 – Gross Shorts: 8,966 377 836 – Long to Short Ratio: 0.9 to 1 0.9 to 1 1.7 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 90.9 28.5 25.9 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 8.4 -13.2 -5.0   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here. CountingPips Forex Blog Forex and Currency News Opinions   COT Bonds Speculators sharply reduce 5-Year Treasury bearish bets for 2nd week →
Nike Stock News and Forecast: NKE just does it again with earnings beat on top and bottom

Nike Stock News and Forecast: NKE just does it again with earnings beat on top and bottom

FXStreet News FXStreet News 21.12.2021 15:54
Nike reported earnings after the close on Monday. NKE stock is higher after a beat on revenue and earnings per share. Nike says Vietnam production levels are now back to 80% of prior volumes. Nike (NKE) seems to have yielded to its longtime trademark – "Just Do It". The company certainly did that on Monday as it unveiled another strong set of results. Not only that, but concerns over supplies from Vietnam were quieted, and the shares are likely to open higher on Tuesday. Nike stock news Earnings per share came in at $0.83, ahead of the $0.63 estimate. This was a significant beat. Revenue was also ahead at $11.36 billion versus estimates for $11.25 billion. Nike shares popped over 2% on the earnings release. With global equity markets looking a bit healthier on Tuesday morning, expect more gains for NKE stock price as the session progresses. Recent concerns over Vietnam supplies had held Nike stock back. Vietnam is a major textile supplier globally, and it was not just Nike that was affected. A covid outbreak had forced numerous closures. However, Nike outlined in the earnings release that Vietnam production levels were now back up to 80% of preclosure levels. The company said it expects revenue to grow in the low single digits for Q3 in line with consensus at just over 2%. Nike has mentioned that input costs are rising and is planning for supply chain costs to rise. Nike did say that it expects margins to rise 150 basis points. This margin gain is being driven by a direct selling online model that Nike has been adopting. Nike stock forecast Nike is not cheap. The stock I mean, not the sneakers! The company trades on a relatively high price/earnings multiple of 45. This is a significant premium to its peers and reflective of Nike's leadership position. Technically, things do not look too positive in the longer-term outlook either. We have a very clear double top in place from August and November. It remains to be seen if Nike shares will be able to hold above resistance at $164-$166 from the 9 and 21-day moving averages. We doubt it and would be fading any rally. Longer term we have a falling Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicator. There is big support coming from the 200-day moving average. Look how well that worked in late September. Currently, the 200-day is at $152. A solid break of that and Nike stock will look to fill the gap created by earnings on June 24. That support is at $134. Failure to fill that gap will be a sign to get back in again, just like in late September. Retracements are opportunities to identify a longer-term trend at play. A retracement that does not create a new significant low is obviously bullish. How to identify one is the tricky part. Given that this is a longer-term time frame, the trick is actually to be slightly late to the party and wait for confirmation. NKE 1-day chart
Decentralized Autonomous Organisation - Another Addition To Our Personal Dictionaries

Price Of Bitcoin Below $36k And Price Of Ether Below $2.5k

Alex Kuptsikevich Alex Kuptsikevich 24.01.2022 09:39
The cryptocurrency fear and greed index was down to 11 on Sunday and slightly up to 13 by early Monday. Crypto market capitalisation lost another 1.1% overnight to $1.61 trillion, the lowest since August. As is often the case with prolonged sell-offs, altcoins are falling with acceleration to the first cryptocurrency, causing BTC's share gains, which already stands at 41.3% against lows of 39.3% in mid-January. Bitcoin's share of 40% seems like a turning point, twice triggering a correction in the crypto market. This level stood like an informal threshold that optimism about altcoins had gone too far. However, the rise in bitcoin's share does little to help its price. We saw the sixth consecutive bearish daily candlestick on Monday morning, and the price rolled back to $35K. The bears may well be able to sell the price down to $32.5K, closing the gap of July and returning the rate to last summer's support area. Alarmingly, the sharp reversal on Friday was not followed by any meaningful bounce. Some observers point out that this is a worrying signal, suggesting further market declines, as we have not seen a final capitulation. Without capitulation, the markets will remain with an overhang of sellers. The price of ether has fallen to $2400, which is less than half of its peak price in November. Events are developing in a bearish scenario, so far broadly repeating what we saw in 2018 in terms of overall sentiment. Long-term buyers can avoid buying at prices above 30k for bitcoin and 2k for ether. We believe long-term investors will look out for purchases in the 20-30k per bitcoin area. Whether these purchases will be at the upper or lower boundary depends, among other things, on the situation in the stock markets. The return of buyers there will support the demand for risk among institutional investors. But as long as we see only steady selling from them, it is too early to talk about buying.
GME Is Plunging Recently, GameStop Stock Price Is Currently ca. $94

GME Is Plunging Recently, GameStop Stock Price Is Currently ca. $94

FXStreet News FXStreet News 24.01.2022 16:27
GameStop stock stages a dead cat bounce on Friday. GME stock closes up nearly 4% on Friday as market freefalls. More losses are likely on Monday as momentum fades and meme is massacred. GameStop (GME) managed to outperform the market significantly on Friday. The meme stock king closed nearly 4% higher at $106.36 despite the main indices closing sharply in the red. However, this was merely a dead cat bounce, and we will outline our reasoning below. GameStop Stock News Nothing too significant behind Friday's outperformance. GameStop (GME) shares had suffered eight consecutive days of losses. Statistically, an up day was becoming more and more likely. GameStop passed a few milestones without much fanfare or reaction from the stock price. Social media traders attempted to play up the one-year anniversary of the GameStop pop, and CEO Ryan Cohen joined in. However, the stock slid. An announcement of a pivot into the NFT space was also met by indifference after a quick surge from the share price. Despite GME spending much of last week near the top of social media mentions, it failed to hook any buyers. The market has little time for risk at present, and speculative meme stocks are getting hit hard so far this year. As we have mentioned, this may be a good thing and avert a full-blown bubble bursting, akin to 2000. The NFT announcement did see a brief pop, but that merely presented a fresh selling opportunity. Year to date, GME is now down nearly 30% and is likely to get worse. The main trading lesson of momentum trading is to get out quickly when momentum stops or stalls. This is not investing or buy-and-hold. This is the realm of quick scalping and risk control. Momentum has collapsed in retail names. Witness falling volumes, falling single share volumes, lower retail sentiment, and drastically lower call option volume: all signs of falling momentum. GameStop Stock Forecast $100 will be broken soon, possibly today or Tuesday. That will lead to some stop-loss triggering as people are herd animals and love round numbers. There will be plenty of stops sitting just below $100. $86 is the target thereafter. The Relative Strength Index (RSI) still has more room to run before being overbought. Breaking $86 is big. That was the retest following the power surge higher back in February pf last year. Below $86 volume thins out, and there is a volume gap until $50. GameStop (GME) chart, daily
The 10 Public Companies With the Biggest Bitcoin Portfolios

Crypto Prices Reviewed - 25.01.2022 - by Korbinian Koller

Korbinian Koller Korbinian Koller 25.01.2022 11:02
Bitcoin will create, not destroy BTC in US-Dollar, monthly chart, no rush: Bitcoin in US-Dollar, monthly chart as of January 25th, 2022. All the typical fears came forward after last week’s price decline in the crypto space. Fears on why to get out of one’s bitcoin hodls. Even to walk away from the idea of bitcoin being a good store of value. But the emotional decision in market participation is often the wrong choice to come out ahead. Bitcoin will not be regulated away. With a near 100 billion tax revenue, bitcoin is unlikely to be banned in the USA. It has established itself in size as an income stream that no one could afford to give up. The monthly chart above shows that after the recent double top bitcoin´s two year strong up move has seen three months of a price decline to the 50% Fibonacci retracement line. To the right of the chart, we portray two fictitious candles as we see a likelihood of the future to unfold over the next two months.   BTC in US-Dollar, weekly chart, sideways to up: Bitcoin in US-Dollar, weekly chart as of January 25th, 2022. On January 20th, the Federal Reserve Board released a discussion paper that examines the pros and cons of a potential U.S. central bank digital currency. News like this shakes up investor’s minds, fearing possible conversions where fiat currency savings might lose some of their value. On top, massive fear ruled the market over the last few days and weeks, a time when professionals know that opportunities are just around the corner. A look at the weekly chart reveals that the right top of the monthly double top had a substructure of a head and shoulders formation. Last week, the shoulder line broke and sent prices plummeting for a near 22% loss. Prices find themselves now in a value zone. In the histogram to the right of the chart, we see a fractal volume analysis. This analysis suggests supply in the price zone between US$36,000 and US$31,000. BTC in US-Dollar, Daily Chart, Bitcoin will create, not destroy: Bitcoin in US-Dollar, daily chart as of January 25th, 2022. As much as we expect a sideways zone for four to eight weeks before bitcoin prices head significantly higher, we already attempted three long trades on a daily time frame after prices entered into the value zone pointed out on the previous chart. Our approach of position building thanks to a quad exit strategy exploit low-risk entry points. Consequently, we were able in the past to catch bitcoin long-term trades near their price lows. News has more than once in the past accelerated price up moves for bitcoin in an unexpected fashion. As a result, we are actively scanning for low-risk opportunities already now. The price moves marked in white show how prices decline quickly in bitcoin, while typically trading sideways most of the time. Fortunately, rising prices act just the same way. The volume profile to the right of the chart shows four significant supply zones. (marked in orange dotted horizontal lines.) Bitcoin will create, not destroy: The good news is that government’s conversion of fiat money to digital might scare people into fleeing with their savings into bitcoin. Henceforth, they further stabilize this payment method. We mention this possible future for bitcoin since changes could be rapid, significant, and surprising. Consequently, bitcoin might find itself in a fast uptrend with high price targets to be expected. We also want to point out the nature of your participation in long-term bitcoin acquisitions. You are not only a speculator on a perfect investment, but also a holder of a positive value. A principle value that protects your freedom of purchasing power. A purchasing power that isn’t transparent allows you to conduct business as you please. Transactions without a controlling force casting a shadow over your choices. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on precious metals and cryptocurrencies, you can also subscribe to our free newsletter. Disclosure: This article and the content are for informational purposes only and do not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|January 25th, 2022|Tags: Bitcoin, Bitcoin bounce, Bitcoin bullish, bitcoin consolidation, crypto analysis, Crypto Bull, crypto chartbook, DeFi, low risk, quad exit, technical analysis, trading education|0 Comments About the Author: Korbinian Koller Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
Crude Oil is Rapidly Climbing, the Rest Is Moving Down or Not At All

Crude Oil is Rapidly Climbing, the Rest Is Moving Down or Not At All

Monica Kingsley Monica Kingsley 24.01.2022 16:05
S&P 500 closed below the 200-day moving average – unheard of. But similarly to the turn in credit markets on Wednesday, the bulls can surprise shortly as the differential between HYG and TLT with LQD is more pronounced now. The field is getting clear, the bulls can move – and shortly would whether or not we see the autumn lows tested next. Now that my target of 4,400 has been reached (the journey to this support has been a more one-sided event than anticipated), 4,300 are next in the bears sight. The bearish voice and appetite is growing, which may call for a little caution in celebrating the downswings next. Relief rally is approaching, even if not immediately and visibly here yet. All I am waiting for, is a convincing turn in the credit markets, which we haven‘t seen yet. The dollar is likely to waver in the medium-term, and that‘s what‘s helping the great and profitable moves in commodities, and reviving precious metals. Crypto short profits are likewise growing – the real question is when the tech slide would stop (getting closer), and how much would financials rebound as well. Not worried about energy – the oil dip would turn out a mere blip. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 buyers are nowhere to be seen, volume isn‘t yet at capitulation levels – rebound off increasingly oversold levels is approaching. Tech melting down faster than value is to be expected – look for consumer staples to do fine too, not just the sectors mentioned above. As written on Friday, the turn in bleeding in credit markets and tech may stop as early as Monday or Tuesday – I remain watching closely for signs of a high-confidence setup to perhaps take. Credit Markets HYG paused for a day while quality debt instruments rose – that‘s still risk-off, but symptomatic of the larger battle and buying interest at these levels already. Could presage a respite in stocks during the regular session next. Gold, Silver and Miners Gold and silver indeed paused a little – in spite of the miners weakness, that‘s no reversal. Most likely only a temporary correction within a developing uptrend. Crude Oil Crude oil bulls are finally getting tested, and by the look of oil stocks, it‘s not going to be a test reaching too far. Not even volume rose on the day – look for price stabilization followed by another upswing. Copper Copper had actually a hidden bullish day – a good consolidation of prior gains. While the volume isn‘t pointing the clearly bearish way, the amplitude of the move can be repeated next. Bitcoin and Ethereum Bitcoin and Ethereum Sunday rally fizzled out, and the downswing doesn‘t look to be yet over as another day of panic across the board is ahead. No signs from cryptos that the slide is stopping now. Summary S&P 500 bulls are readying a surprise – the long string of red days is coming to a pause. Credit markets turning a bit risk-on coupled with a tech pause and financials revival (not to mention consumer staples and energy) would be the recipe to turn the tide. We‘re in a large S&P 500 range, and got quite near its lower band at around 4,300. The short rides are to be wound down shortly, and that will coincide with another commodities run higher. Look to precious metals likewise not to disappoint while cryptos continue struggling at the moment. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
GBPUSD To Visit 1.3440? AUD Recovered, GER 40 Went a Few Steps Up To Slightly Decrease a Moment Later

GBPUSD To Visit 1.3440? AUD Recovered, GER 40 Went a Few Steps Up To Slightly Decrease a Moment Later

John Benjamin John Benjamin 25.01.2022 08:47
GBPUSD remains under pressure The sterling struggles as global markets remain risk-off. A limited rebound has fought to hold above 1.3570 and the sell-off accelerated after a bearish breakout. The pair is testing a previous low at 1.3440 which sits along the 30-day moving average. There could be buying interest in this congestion area after the RSI plunged into the oversold band. 1.3570 is now a fresh resistance, then the bulls will need to lift 1.3660 before they could turn sentiment around. On the other hand, a deeper correction may send the price to 1.3400. AUDUSD in bearish reversal The Australian dollar recovered after the Q4 CPI beat expectations. However, the latest rally took a bearish turn after the price slipped below 0.7170. The lack of commitment to hold onto recent gains suggests a weak risk appetite. A fall below the daily support at 0.7130 further weighs on the Aussie and prompts buyers to bail out. The RSI’s oversold situation helped lift the pair temporarily. Nonetheless, the bears might be eager to sell into strength near 0.7210. 0.7080 would be the next stop as the trend turns south. GER 40 tests critical support The Dax 40 plunges amid rising tensions in Ukraine. The index has given up all gains from the rebound in late December and cut through the major demand zone around 15070. The RSI’s repeatedly oversold situation attracted a buying-the-dips crowd. Nevertheless, there is no sign of improvement in the market mood. And price action has not stabilized yet. A grind of last October’s low at 14820 would test the bulls’ resolve in the medium-term. On the upside, 15600 is the first hurdle to lift.
Everybody Talks About Stocks, In Fact, There's Much To Watch, As MSFT and Others Release Their Reports

Everybody Talks About Stocks, In Fact, There's Much To Watch, As MSFT and Others Release Their Reports

Paul Rejczak Paul Rejczak 25.01.2022 15:51
  The S&P 500 index was trading 4% lower yesterday before closing 0.3% higher. So was it an upward reversal or just another temporary bottom? The broad stock market index accelerated its sell-off on Monday, as it reached the new local low of 4,222.62. The market was 596 points or 12.4% below the Jan. 4 record high of 4,818.62. Investors reacted to further Russia-Ukraine tensions. We are also waiting for series of quarterly earnings releases, tomorrow’s FOMC Statement release and Thursday’s important U.S. Advance GDP release. Overall, we had a big increase in volatility yesterday. Late December – early January consolidation along the 4,800 level was a topping pattern and the index retraced all of its December’s record-breaking advance. This morning it is expected to open 1.6% lower and we may see more short-term volatility. Will it reach yesterday’s low again? Probably not – we’ll likely see a consolidation. The nearest important resistance level is now at 4,420-4,450, marked by yesterday’s daily high, among others. On the other hand, the support level is at 4,300-4,350. The support level is also at 4,220-4,250. The S&P 500 remains below a steep short-term downward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Microsoft Stocks Ahead of the Earnings Release Microsoft (MSFT) will release its quarterly earnings today after the session’s close. It’s an important stock, as it weighs 6.0%, just after the Apple’s 6.7%. So, the S&P 500 traders will be watching that release very closely. Microsoft accelerated its sell-off yesterday and it fell to the local low of $276.05. It was 21% below the Nov. 22 record high of $349.67. The stock remains below the downward trend line, but we can see some clear short-term oversold conditions. Let’s take a look at the Microsoft’s monthly chart. The stock broke below its multi-year hyperbolic run marked by the thick blue curve. The chart is logarithmic, and we can see an enormous rally that took place since 2013. The breakdown may lead to a change in trend or some medium- or long-term consolidation. It looks like a multi-year bull run is over. Futures Contract Got Close to the 4,200 Level Yesterday The S&P 500 futures contract accelerated its downtrend yesterday, as it fell close to the 4,200 level. There have been no confirmed positive signals so far, however there are some downtrend exhaustion signals. (chart by courtesy of http://tradingview.com): Conclusion The S&P 500 index accelerated its sell-off yesterday and at some point it was 4% lower! But the market rebounded sharply following a “V” pattern reversal and it closed 0.3% higher. This morning it is expected to open 1.6% lower and we may see some further volatility. The coming quarterly earnings releases (MSFT on Tuesday, TSLA on Wednesday and AAPL on Thursday, among others) remain a bullish factor for stocks, but there is still a lot of uncertainty concerning Russia-Ukraine tensions. Investors are also waiting for tomorrow’s Fed release and Thursday’s U.S. Advance GPD number release. If you want to be in the loop about any future market changes (with instant mail notifications!) sign up for the newsletter here. Here’s the breakdown: The S&P 500 is expected to open lower again; we may see a consolidation. Opening a speculative long position is justified from the risk/reward perspective. We are expecting a 5% upward correction from the current levels. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
S&P 500 Declined, Gold Price (XAU/USD) Isn't Far From November's Levels

S&P 500 Declined, Gold Price (XAU/USD) Isn't Far From November's Levels

Monica Kingsley Monica Kingsley 25.01.2022 15:55
Tough call as select S&P 500 sectors came back to life, but credit markets are a bit inconclusive. Some more selling today before seeing a rebound on Wednesday‘s FOMC (I‘m leaning towards its message being positively received, and no rate hike now as that‘s apart from the Eastern Europe situation the other fear around). VIX looks to have topped yesterday, and coupled with the commodities and precious metals relative resilience (don‘t look at cryptos where I took sizable short profits in both Bitcoin and Ethereum yesterday), sends a signal of upcoming good couple of dozen points rebound in the S&P 500. Taking a correct view at the hightened, emotional market slide yesterday, is through the portfolio performance – as you can see via clicking the link, yesterday‘s setup needn‘t and shouldn‘t be anyone‘s make or break situation. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 buyers stepped in, and carving out a nice lower knot today is the minimum expectation that the bulls can have. The reversal is still very young and vulnerable. Credit Markets HYG reversed, but isn‘t in an uptrend yet – there is just a marginal daily outperformance of quality debt instruments. More is needed. Gold, Silver and Miners Gold and silver are only pausing – in spite of the miners move to the downside at the moment. HUI and GDX will catch up – they‘re practically primed to do so over the medium-term. Crude Oil Crude oil bulls are still getting tested, and oil stocks stabilized on a daily basis. Some downside still remains, but nothing dramatic – the volume didn‘t even rise yesterday. Copper Copper declined, but didn‘t meaningfully lead lower – the downswing was actually bought, and low 4.40s look to be well defended at the moment. More fear striking, would change the picture, but we aren‘t there yet. Bitcoin and Ethereum Bitcoin and Ethereum reversed, but in spire of the volume, look to need more time to bottom out – and I wouldn‘t be surprised if that included another decline. Summary S&P 500 bulls would get tested today again, and at least a draw would be a positive result, as yesterday‘s tech upswing is more likely to be continued tomorrow than today – that‘s how it usually goes after sizable (think 5%) range days. The table is set for an upside surprise on FOMC tomorrow – the tantrum coupled with war fears bidding up the dollar, is impossible to miss. Best places to be in remain commodities and precious metals, and the coming S&P 500 upswing looks to be a worthwhile opportunity in the making, too – on a short-term and nimble basis. So, I‘m more in the glass half full camp going into tomorrow. Anyway, let‘s take the portfolio view discussed in the opening part of today‘s article. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
GME Stock Chart - We Might Believe $86 is the Current Support

GME Stock Chart - We Might Believe $86 is the Current Support

FXStreet News FXStreet News 25.01.2022 15:55
GameStop stock crashes but recovers in the afternoon. GameStop shares close nearly 6% lower on Monday. GME shares remain top of WallStreetBets interest list. GameStop (GME) stock likes volatility, and meme traders should certainly be used to it by now, but perhaps not the type that was evident yesterday. GameStop shares crashed below $100 and kept on going before a broad-based afternoon rally helped GME stock recover to close just above the psychological $100 level. GameStop Stock News Again we find ourselves writing about a stock with significant movement based solely on price action. There is little in the way of actual hard news flow. GameStop stock has not had a good start to the year, but despite this it remains one of the top trending stocks across most social media platforms. This has partly to do with loyalty and partly to do with the one-year anniversary of the GameStop saga. However, for the most part traders are fixated on the big picture theme of us versus them that captured the whole argument. GameStop is now down over 30% so far in 2022. GameStop Stock Forecast We remain bearish on this one, which I know many loyal holders may not want to hear. We have to focus on the chart and what we can take from that. Loyalty, if not profitable, is pointless to a trader. Emotion should always be controlled. Breaking $100 was psychological and led to some stops likely triggering. We had identified $86 as strong support for the last few weeks, and GME shares more or less bounced perfectly from it yesterday. GME stock bottomed out at $86.29, so we can take some kudos for that. But now where? Holding $86 was actually pretty important as below is a big volume gap that would likely see an acceleration toward $70. Holding gives some hope of a rebound, but $118.59 remains the short-term pivot for us. Below here bears are in charge. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) are both still following price lower, so there is no sign of any divergence or oversold conditions just yet. GameStop (GME) chart, daily
Will FOMC Moves Let Us Prepare Kind of Gold Price Prediction?

Will FOMC Moves Let Us Prepare Kind of Gold Price Prediction?

Arkadiusz Sieron Arkadiusz Sieron 25.01.2022 16:28
  The World Gold Council believes that gold may face similar dynamics in 2022 to those of last year. Well, I’m not so sure about it. Have you ever had the feeling that all of this has already happened and you are in a time loop, repeating Groundhog Day? I have. For instance, I’m pretty sure that I have already written the Fundamental Gold Report with a reference to pop-culture before… Anyway, I’m asking you this, because the World Gold Council warns us against the whole groundhog year for the gold market. In its “Gold Outlook 2022,” the gold industry organization writes that “gold may face similar dynamics in 2022 to those of last year.” The reason is that in 2021, gold was under the influence of two competing forces. These factors were the increasing interest rates and rising inflation, especially strong in operation in the second half of the year, which resulted in the sideways trend in the gold market, as the chart below shows. The WGC sees a similar tug of war in 2022: the hikes in the federal funds rate could create downward pressure for gold, but at the same time, elevated inflation will likely create a tailwind for gold. The WGC acknowledges that the ongoing tightening of monetary policy can be an important headwind for gold. However, it notes two important caveats. First, the Fed has a clear dovish bias and often overpromises when it comes to hawkish actions. For example, in the previous tightening cycle, “the Fed has tended not to tighten monetary policy as aggressively as members of the committee had initially expected.” Second, financial market expectations are more important for gold prices than actual events. As a result, “gold has historically underperformed in the months leading up to a Fed tightening cycle, only to significantly outperform in the months following the first rate hike.” I totally agree. I emphasized many times the Fed’s dovish bias and that the actual interest rate hikes could be actually better for gold than their prospects. After all, gold bottomed out in December 2015, when the Fed raised interest rates for the first time since the Great Recession. I also concur with the WGC that inflation may linger this year. Expectations that inflation will quickly dissipate are clearly too optimistic. As China is trying right now to contain the spread of the Omicron variant of the coronavirus, supply chain disruptions may worsen, contributing to elevated inflation. However, although I expect inflation to remain high, I believe that it will cool down in 2022. If so, the real interest rates are likely to increase, creating a downward pressure on gold prices. I also believe that the WGC is too optimistic when it comes to the real interest rates and their impact on the yellow metal. According to the report, despite the rate hikes, the real interest rates will stay low from a historical perspective, supporting gold prices. Although true, investors should remember that changes in economic variables are usually more important than their levels. Hence, the rebound in interest rates may still be harmful for the precious metals.   Implications for Gold What should be expected for gold in 2022? Will this year be similar to 2021? Well, just like last year, gold will find itself caught between a hawkish Fed and high inflation. Hence, some similarities are possible. However, in reality, we are not in a time loop and don’t have to report on Groundhog Day (phew, what a relief!). The arrow of time continues its inexorable movement into the future. Thus, market conditions evolve and history never repeats itself, but only rhymes. Thus, I bet that 2022 will be different than 2021 for gold, and we will see more volatility this year. In our particular situation, the mere expectations of a more hawkish Fed are evolving into actual actions. This is good news for the gold market, although the likely peak in inflation and normalization of real interest rates could be an important headwind for gold this year. Tomorrow, we will get to know the FOMC’s first decision on monetary policy this year, which could shake the gold market but also provide more clues for the future. Stay tuned! If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
EURUSD, EURCHF and US 30 Chart Don't Show Spectacular Fluctations

EURUSD, EURCHF and US 30 Chart Don't Show Spectacular Fluctations

John Benjamin John Benjamin 26.01.2022 08:44
EURUSD grinds daily support The US dollar inches lower as traders take profit ahead of the Fed meeting. The euro’s struggle to stay above 1.1360 indicates buyers’ weak interest in holding onto previous gains. The latest rebounds have failed to clear the former support that has turned into a resistance. A break below the previous consolidation range and daily support (1.1280) could send the pair to 1.1235. The RSI’s oversold situation attracted some buying interest. But the bulls will need to lift 1.1360 first before a reversal could become a reality. EURCHF attempts reversal The safe-haven Swiss franc retreats as global panic selling takes a breather. A bullish RSI divergence shows a slowdown in the sell-off momentum. Then a rally above 1.0355 has prompted some sellers to cover, taking the heat off the single currency. A bullish MA cross is an encouraging sign for a reversal. 1.0400 is the next hurdle and its breach could be a turning point for traders’ sentiment and a launchpad towards 1.0480. On the downside, 1.0340 is fresh support and then 1.0300 a critical floor to safeguard the rebound. US 30 hits last major support The Dow Jones 30 recoups losses as traders await details on the Fed’s monetary tightening. Breaks below daily supports at 34700 and 34000 have forced buyers to liquidate in bulk. The index saw bids at last June’s low (33200) while the RSI sank into the oversold area on the daily chart. As the quote stabilizes, traders may be looking to buy the dips. A close above 34500 may lead to 35500 which is a key supply zone from a previous breakout. A break below the daily support could trigger a broader correction in the weeks to come.
Apple Stock Price and Forecast: AAPL earnings preview

Apple Stock Price and Forecast: AAPL earnings preview

FXStreet News FXStreet News 26.01.2022 16:22
Apple reports earnings after the close on Thursday.With the Fed out of the way, the road is cleared for the stock superpower.AAPL could help turn the entire market sentiment after Microsoft beat. Apple is due to report earnings after the close on Thursday. With the Fed meeting ending today, investors will then focus on the tech sector to hopefully end the bearish mood currently hitting markets. Tech names along with a not-too-surprising Fed (https://www.fxstreet.com/macroeconomics/central-banks/fed) could turn things around. Sentiment is beginning to look overdone, but it is imperative to get solid earnings from the tech sector. So far the bank sector has disappointed, while the energy sector looks like it should outperform. This week as we mentioned in our preview note is key with 104 of the S&P 500 companies reporting. Apple Stock NewsApple reports after the close on Thursday, January 27. Earnings per share (EPS) is expected to come in at $1.89 on revenue of $118.28 billion. Wall Street analysts also expect Apple to have sold 80 million iPhones in the last quarter. Bank of America certainly is looking to the upside as it outlines in a note out this morning. The bank sees iPhone sales coming in at 81 million and sees a strong revenue number of $121 million, well ahead of forecasts. Analysts have been active this week on the name ahead of earnings. Earlier we reported on Goldman Sachs maintaining their $142 price target ahead of earnings, while Morgan Stanley expects strong iPhone deliveries to maintain bullish earnings.As ever the commentary around earnings will be as important as the earnings themselves. Last time out the dreaded supply chain and chip issues came to light, so we will look for more clarity around these areas.Apple Stock Forecast$157 is big, very big. A break and it likely heads to $148, which is a huge volume profile support and the point of control. But breaking $157 does put in a new lower low and so continue the downtrend. The Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) both look quite stretched, but the RSI is not yet oversold. The MACD, meanwhile, is at its lowest since March of last year, and the histogram is also at its widest in a year. Earnings then could be the catalyst to turn this trend around. Apple (AAPL) chart, daily
Rushing Headlong

Rushing Headlong

Monica Kingsley Monica Kingsley 26.01.2022 16:34
Glass half full call on S&P 500 yesterday was vindicated – this yet another reversal has the power to go on, and credit markets appear sniffing out the upcoming reprieve. While rates have justifiably risen, they have done so quite fast in Jan – time to calm down and reprice the excessively hawkish Fed fears. Even if it was just energy and financials that rose yesterday, the table is set for gains across many assets – just check the progress from yesterday‘s already optimistic upturn, or the already fine early view of yesterday‘s market internals.VIX is calming down, Fed is unlikely to rock the boat too much – such were my yesterday‘s thoughts about:(…) seeing a rebound on Wednesday‘s FOMC (I‘m leaning towards its message being positively received, and no rate hike now as that‘s apart from the Eastern Europe situation the other fear around).The sizable open profits – whether in S&P 500 or crude oil – can keep on growing while gold slowly approaches $1,870 again (look for a good day today), and copper stabilizes above $4.50 to keep pushing higher even if not yet outperforming other commodities. More dry firepowder and fresh profits ahead anywhere I look – even cryptos are to enjoy the unfolding risk-on upswing.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookThis is what a tradable S&P 500 bottom looks like – just as it was most likely to turn out. After the 200-day moving average, 4,500 point of control is the next target.Credit MarketsHYG reversed, but isn‘t in an uptrend yet – this is how a budding reversal looks like, especially since the selling hasn‘t picked up ahead of the Fed. Turning already.Gold, Silver and MinersGold and silver pause was barely noticeable – it‘s a great sight of upcoming strength in the metals while miners unfortunately would continue underperforming to a degree, i.e. not leading decisively.Crude OilCrude oil bulls are back, how did you like the pause? The ride higher isn‘t over by a long shot, and I like the volume of late being this much aligned.CopperCopper looks to be catching breath before another (modest but still) upswing. The buyers aren‘t yet rushing headlong.Bitcoin and EthereumBitcoin and Ethereum reversed, and are participating in the risk-on upturn, with Ethereum sending out quite nice short-term signs. From the overall portfolio view and upcoming volatility though, I would prefer to wait before making any move here.SummaryS&P 500 bulls withstood yesterday‘s test, and are well positioned to extend gains, especially on the upcoming well received FOMC statement and soothing press conference. It had also turned out that a tech upswing is more likely to be continued today than yesterday – the Fed‘s words would calm down bonds, and that would enable a better Nasdaq upswing.As I wrote yesterday, the table is set for an upside FOMC surprise – the tantrum coupled with war fears bidding up the dollar, is impossible to miss. Best places to be in remain commodities and precious metals – and I would add today once again in a while that real assets upswing would coincide with the dollar moving lower later today (check those upper knots of late). So far so good in risk-on, inflation trades – and things will get even better as my regular readers know (I can‘t underline how much you can benefit from regularly reading the full analyses as these are about how I arrive at the profitable conclusions presented & how you can twist them to your own purposes).Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Intraday Market Analysis – USD Gains Bullish Momentum

Intraday Market Analysis – USD Gains Bullish Momentum

John Benjamin John Benjamin 27.01.2022 08:26
USDCAD breaks higherThe Canadian dollar slipped after the BOC kept interest rates unchanged. Its US counterpart found support at 1.2560 after a brief pullback.An oversold RSI attracted some bargain hunters. The current rebound is a sign that there is a strong interest in pushing for a bullish reversal. 1.2700 is a key supply zone as it coincides with the 30-day moving average.A breakout would definitely turn sentiment around and trigger a runaway rally. In turn, this sets the daily resistance at 1.2810 as the next target.NZDUSD continues lowerThe New Zealand dollar steadied after the Q4 CPI beat expectations.However, the pair is still in bearish territory after it broke below the lower end (0.6750) of the flag consolidation from the daily time frame. The RSI’s oversold situation brought in a buying-the-dips crowd around 0.6660 but its breach indicates a lack of buying interest.The kiwi is now testing November 2020’s low at 0.6600. The bears could be waiting to fade the next bounce with 0.6700 as a fresh resistance.XAUUSD pulls back for supportGold tumbled after the US Fed signaled it may raise interest rates in March. The rally stalled at 1853 and a break below the resistance-turned-support at 1830 flushed some buyers out.1810 at the base of the previous bullish breakout is a second line of defense. The short-term uptrend may still be intact as long as the metal stays above this key support.A deeper correction would drive the price down to the daily support at 1785. The bulls need a rebound above 1838 to regain control of price action.
One More Time

One More Time

Monica Kingsley Monica Kingsley 27.01.2022 15:53
Wild FOMC day is over, and markets are repricing the perceived fresh hawkishness when there was none really. It‘s nice to start counting with 5 rate hikes this year when taper hasn‘t truly progressed much since it was announced last year. The accelerated taper would though happen, and the following questions are as to hikes‘ number and frequency. I‘m not looking the current perceived hawkishness to be able to go all the way, and I question Mar 50bp rate hike fears. Not that it would even make a dent in inflation – as the Fed just stood pat, open oil profits are rising.But stocks took a dive before recovering, carving out a fourth in a row lower knot – the bulls are invited to participate, and open stock market profits are moving up again. Also note the divergence between HYG trading at its recent lows while S&P 500 clearly isn‘t. The immediate pressure would be to go higher, and that concerns also copper, and to a smaller degree cryptos. All that‘s needed, is for bonds to turn up, acknowledging a too hawkish interpretation of yesterday‘s FOMC – key factor that sent metals down and dollar up. While rates would continue rising, as the Fed overplays its tightening hand, we would see them retreat again – now with 1.85% in the 10-year Treasury, we would overshoot very well above 2% only to close the year in its (2%) vicinity.That just illustrates how much tolerance for rate hikes both the real economy and the markets have, and the degree to which the Fed can accomplish its overly ambitious yet behind the curve plans. Still time to be betting on commodities and precious metals in the coming stagflation.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookSetback and reversal of prior gains - S&P 500 is though still carving out a tradable bottom. I‘m looking for the index to return above 4,400 and then take on the 4,500 point of control next.Credit MarketsHYG reversed, the panic is there – higher yields across the board without a clear risk-on turn holding. Today is a time for reprieve.Gold, Silver and MinersGold and silver declined as yields moved sharply up and so did the dollar – but inflation or inflation expectations didn‘t really budge. The metals are anticipating the upcoming liquidity squeeze, which won‘t be pretty until the Fed changes course. Not that it truly started, for that matter.Crude OilCrude oil bulls have confirmed they were back, and are ready for more – clearly not daunted by the Fed messaging, and that has implications for inflation ahead. It would really be more persistent than generally appreciated, I‘m telling you.CopperCopper is still in the catching breath phase – not yielding, and that‘s still saying something about inflation and real economy.Bitcoin and EthereumBitcoin and Ethereum are on guard, and ready to move somewhat higher next – for now, lacking conviction, there is no Ethereum outperformance either.SummaryS&P 500 bulls are ready to come back, and prove that the first FOMC move, is the fake one – no, I don‘t mean the moonshot to 4,450 in the first moments. That would be the move I‘m looking for still, and it would be led by the coming tech upswing. Check the commodities resilience to the rising rates prospects – gold and silver need a reprieve in bonds badly to catch breath again, and it would come at the expense of the dollar. For now, markets are afraid of the looming liquidity crunch and Fed policy mistake as the yield curve continues compressing.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Gold Is Bruised but Can Show Strength – By Doing Nothing

Gold Is Bruised but Can Show Strength – By Doing Nothing

Przemysław Radomski Przemysław Radomski 27.01.2022 17:59
  The Fed finally said it: the rates are going up. The USD Index and gold heard it and reacted. The former is at new yearly highs, while gold slides. The medium-term outlook for gold is now extremely bearish. The above might sound like a gloom and doom scenario for precious metals investors, but I view it as particularly favorable. Why? Because: This situation allows us to profit on the upcoming decline in the precious metals sector through trading capital. This situation allows us to detect a great buying entry point in the future. When gold has everything against it and then it manages to remain strong – it will be exactly the moment to buy it. To be more precise: to buy into the precious metals sector (I plan to focus on purchasing mining stocks first as they tend to be strongest during initial parts of major rallies). At that moment PMs will be strong and the situation will be so bad that it can only improve from there – thus contributing to higher PM prices in the following months. Most market participants have not realized the above. “Gold and (especially) silver can only go higher!” is still a common narrative on various forums. Having said that, let’s take a look at the short-term charts. In short, gold declined significantly, and it’s now trading once again below the rising support / resistance line, the declining red resistance line, and back below 2021 closing price (taking also today’s pre-market decline into account). In other words: All important short-term breakouts were just invalidated. The 2022 is once again a down year for gold. Is this as bearish as it gets for gold? Well, there could be some extra bearish things that could happen, but it’s already very, very bearish right now. For example, gold market could catch-up with its reactions to USD Index’s strength. The U.S. currency just moved above its previous 2022 and 2021 highs, while gold is not at its 2021 lows. Yet. I wouldn’t view gold’s performance as true strength against the USD Index at this time just yet. Why? Because of the huge consolidation that gold has been trading in. The strength that I want to see in gold is its ability not to fall or soar back up despite everything thrown against it, not because it’s stuck in a trading range. In analogy, you’ve probably seen someone, who’s able to hold their ground, and not give up despite the world throwing every harm and obstacle at them. They show their character. They show their strength. Inaction could represent greater wisdom and/or love and focus on one’s goal that was associated with the lack of action. You probably know someone like that. You might be someone like that. The above “inaction” is very different from “inaction” resulting from someone not knowing what to do, not having enough energy, or willpower. Since markets are ultimately created by people (or algorithms that were… ultimately still created by people) is it any surprise that markets tend to work in the same way? One inaction doesn’t equal another inaction, and – as always – context matters. However, wasn’t gold strong against the USD Index’s strength in 2021? It was, but it was very weak compared to the ridiculous amounts of money that were printed in 2020 and 2021 and given the global pandemic. These are the circumstances, where gold “should be” soaring well above its 2011 highs, not invalidating the breakout above it. The latter, not the former, happened. Besides, the “strength” was present practically only in gold. Silver and miners remain well below their 2011 highs – they are not even close to them and didn’t move close to them at any point in 2020 or 2021. Gold has been consolidating for many months now, just like it’s been the case between 2011 and 2013. The upper part of the above chart features the width of the Bollinger Bands – I didn’t mark them on the chart to keep it clear, but the important detail is that whenever their width gets very low, it means that the volatility has been very low in the previous months, and that it’s about to change. I marked those cases with vertical dashed lines when the big declines in the indicator took it to or close to the horizontal, red, dashed line. In particular, the 2011-2013 decline is similar to the current situation. What does it mean? It means that gold wasn’t really showing strength – it was stuck. Just like 2012 wasn’t a pause before a bigger rally, the 2021 performance of gold shouldn’t be viewed as such. What happened yesterday showed that gold can and will likely react to hawkish comments from the Fed, that the USD Index is likely to rally and so are the interest rates. The outlook for gold in the medium term is not bullish, but very bearish. The above is a positive for practically everyone interested in the precious metals market (except for those who sell at the bottom that is), as it will allow one to add to their positions (or start building them) at much lower prices. And some will likely (I can’t guarantee any performance, of course) gain small (or not so small) fortunes by being positioned to take advantage of the upcoming slide. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
NASDAQ, Non-Farm Payrolls, GBPAUD, Gold and More in The Next Episode of "The Trade Off"

Stock Market in 2022: Momentum on the Stocks in the Market Are In a Solid Footing

Finance Press Release Finance Press Release 28.01.2022 10:51
The year 2022 is seemingly a mixed bag, even as markets start reopening. The year looks promising, though, with issues like inflation and COVID to contemplate. Historic rallies in 2021 after lockdowns are looking to inspire trading in various industries, with some assets to look out for by investors. Growth will surely return at some point, but so will disappointing instances where tumbles will dominate trading desks. The S & P's historic gains of 30 percent dominated the press at the close of 2021, making investors using Naga and other optimistic platforms. The ended year had one of the longest bull markets. However, the Fed rate tightening and the direction the pandemic will take are some things to expect, notwithstanding that the stock market might grow by a whopping 10 percent in 2022. Trading Movements In Week One 2022 European markets have opened with a lot of optimism in 2022, the pan-European STOXX 600 closed at 489.99 points; this is 0.5 percent higher than the opening figure. The European benchmark was some percentage lower than the overall S&P 2021 performance, though with a surge of 22.4 percent. Record gains in the stock markets have relied on the positions taken by the governments during the pandemic. In the USA and Europe, increasing vaccination rates and economic stimulus measures have improved investor confidence. However, there are indications for more volatility in 2022, a situation investors must watch keenly. There has been little activity in London markets in the first week of 2022, while in Italy, France, and Spain gains of between 0.5-1.4 percent made notable highlights. European markets had diverse industries drive up the closing gains witnessed; the airline sector, in particular, has had a significant influence. Germany’s Lufthansa (LHAG.DE) had an impressive 8.8 percent jump while Air France KLM (AIRF.PA), a 4.9 percent gain. Factory activity is another factor to thank for the first week's gains all over Europe. Noteworthy, the Omicron variant influenced trading in the entirety of December, but the reports that it is milder than Delta has energized market activities coming into January. S&P and DOW Jones 2022 First Week Highs Across the Atlantic, the Dow Jones Industrial Average (DJI) and S&P 500 (SPX) closed at a record high, highlighting a similar aggressiveness as the European markets. While the jump was industrial-wide, Tech stocks continued to dominate, as Apple finally touched the $3 trillion valuation, though for a short time. Tesla Inc. (TSLA.O) posted a 13.5 percent jump thanks to increased production in China and an unprecedented goal to surpass its target. The US market, like the European market, is also in a fix; the Omicron variant of COVID-19 continues to cause concern with the wait-and-see approach, the only notable strategy. Currently, every country is reporting a jump in the number of Covid cases, with the UK going above 100K cases for the first time and the US recording some new records as well. School delays and increased isolation by key workers will surely debilitate the markets, with the global chip shortage another point to contemplate. However, markets can still ride on the increased development of therapies to help fight Covid. The U.S. Food and Drug Administration (CDC) has been quick, as now children can have their third doses as well. Industries to Look Out For In 2022 European automakers have seen early peaks, while the airline sector has also picked up fast. In the US, tech shares continue to dominate, and 2022 might witness new records never seen before. However, the energy sectors have also dominated the news in 2021, and in 2022; the confidence in them will continue to rise because of an anticipation of stabilization in energy prices. The same goes for crude oil prices. Regardless, shareholders will continue watching the decisions by the Federal Reserve, a review in the current interest rates will surely tame inflation. Conclusion 2022 will see its highs and lows in investments. Some assets will make the news and investors will be keen to use any information to make key decisions. Tech will continue to shine, but it is important to anticipate the direction of the pandemic, as it will be an important factor in investor decisions.
Many Factors to Affect XAU This Year. What About The Past?

Many Factors to Affect XAU This Year. What About The Past?

Arkadiusz Sieron Arkadiusz Sieron 28.01.2022 10:38
  Gold’s fate in 2021 will be determined mainly by inflation and the Fed’s reaction to it. In the epic struggle between chaos and order, chaos has an easier task, as there is usually only one proper method to do a job – the job that you can screw up in many ways. Thus, although economists see a strong economic expansion with cooling prices and normalization in monetary policies in 2022, many things could go wrong. The Omicron strain of coronavirus or its new variants could become more contagious and deadly, pushing the world into the Great Lockdown again. The real estate crisis in China could lead the country into recession, with serious economic consequences for the global economy. Oh, by the way, we could see an escalation between China and Taiwan, or between China and the US, especially after the recent test of hypersonic missiles by the former country. Having said that, I believe that the major forces affecting the gold market in 2022 will be – similarly to last year’s – inflation and the Fed’s response to it. Considering things in isolation, high inflation should be supportive of gold prices. The problem here is that gold prefers high and rising inflation. Although the inflation rate should continue its upward move for a while, it’s likely to peak this year. Indeed, based on very simple monetarist reasoning, I expect the peak to be somewhere in the first quarter of 2022. This is because the lag between the acceleration in money supply growth (March 2020) and CPI growth (March 2021) was a year. The peak in the former occurred in February 2021, as the chart below shows. You can do the math (by the way, this is the exercise that turned out to be too difficult for Jerome Powell and his “smart” colleagues from the Fed). This is – as I’ve said – very uncomplicated thinking that assumes the stability of the lag between monetary impulses and price reactions. However, given the Fed’s passive reaction to inflation and the fact that the pace of money supply growth didn’t return to the pre-pandemic level, but stayed at twice as high, the peak in inflation may occur later. In other words, more persistent inflation is the major risk for the economy that many economists still downplay. The consensus expectation is that inflation returns to a level close to the Fed’s target by the end of the year. For 2021, the forecasts were similar. Instead, inflation has risen to about 7%. Thus, never underestimate the power of the inflation dragon, especially if the beast is left unchecked! As everyone knows, dragons love gold – and this feeling is mutual. The Saxo Bank, in its annual “Outrageous Predictions”, sees the potential for US consumer prices to rise 15% in 2022, as “companies bid up wages in an effort to find willing and qualified workers, triggering a wage-price spiral unlike anything seen since the 1970’s”. Actually, given the fact that millions of Americans left the labor market – which the Fed doesn’t understand and still expects that they will come back – this prediction is not as extreme as one could expect. I still hope that inflationary pressure will moderate this year, but I’m afraid that the fall may not be substantial. On the other hand, we have the Fed with its hawkish rhetoric and tapering of quantitative easing. The US central bank is expected to start a tightening cycle, hiking the federal funds rate at least twice this year. It doesn’t sound good for gold, does it? A hawkish Fed implies a stronger greenback and rising real interest rates, which is negative for the yellow metal. As the chart below shows, the normalization of monetary policy after the Great Recession, with the infamous “taper tantrum”, was very supportive of the US dollar but lethal for gold. However, the price of gold bottomed in December 2015, exactly when the Fed hiked the interest rates for the first time after the global financial crisis. Markets are always future-oriented, so they often react more to expected rather than actual events. Another thing is that the Fed’s tightening cycle of 2015-2018 was dovish and the federal funds rate (and the Fed’s balance sheet) never returned to pre-crisis levels. The same applies to the current situation: despite all the hawkish reactions, the Fed is terribly behind the curve. Last but not least, history teaches us that a tightening Fed spells trouble for markets. As a reminder, the last tightening cycle led to the reversal of the yield curve in 2019 and the repo crisis, which forced the US central bank to cut interest rates, even before anyone has heard of covid-19. Hence, the Fed is in a very difficult situation. It either stays behind the curve, which risks letting inflation get out of control, or tightens its monetary policy in a decisive manner, just like Paul Volcker did in the 1980s, which risks a correction of already-elevated asset prices and the next economic crisis. Such expectations have boosted gold prices since December 2015, and they could support the yellow metal today as well. Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care.
Tesla Stock Price and Forecast: Why did TSLA fall despite beating earnings estimates?

Tesla Stock Price and Forecast: Why did TSLA fall despite beating earnings estimates?

FXStreet News FXStreet News 27.01.2022 15:59
Tesla stock swung around violently post the earnings release. TSLA shares quickly dropped 6% despite beating earnings estimates. Tesla then recovered to trade down 2% as buyers stepped in. Tesla (TSLA) swung around pretty wildly in the after-hours market on Wednesday following its earnings release. The stock dropped 6% fairly rapidly despite beating on the top and bottom lines. Buyers then went bargain hunting as the market struggled to grasp what metric to focus on. By the time things settled down, we were nearly back to where things started. At the time of writing, Tesla is back to $930 in the premarket on Thursday, so only $7 or less than 1% lower from where Tesla stock was trading at the close of the regular session and before the earnings drop. Tesla Stock News Tesla beat on earnings per share (EPS), coming in at $2.54 versus the $2.26 average estimate. Revenue also beat forecasts, coming in at $17.72 billion versus the $16.35 billion estimate. This was a pretty strong performance beat on both top and bottom lines. Margins also held up well, coming in at 30.8% versus estimates for 30%. So far so good. However, Tesla then mentioned that its factories were not at full capacity and it saw this continuing into 2022. Supply chain issues were to blame, and investors took a dim view of this and sold the stock sharply lower. However, buyers then stepped in as arguments over demand versus supply issues surfaced. The demand profile remains strong and Tesla stuck to its strong outlook for demand going forward. If it can address supply issues and with new factories in Texas and Berlin coming on line, it may be in a position to drive more supply to meet demand. It is certainly better to have a problem meeting demand than it is to have a lack of demand. This is a case of "if you build it, they will come" for Tesla going forward. Tesla Stock Forecast TSLA bottomed out at $879 after the release, but in reality it spent very little time down there. This is interesting to us on a technical view as it prints a higher low than Monday's sell-off and puts in place the potential for a bottoming formation. From the 4-hour chart below we can see this price action in play. The lows from Monday at $855 are our short-term pivot. Above there things have a chance to turn bullish in a more medium-term view. Below and it is on to $813 to test the 200-day moving average. Tesla chart, 4 hourly
Fed Comments Help To Settle Global Market Expectations

Fed Comments Help To Settle Global Market Expectations

Chris Vermeulen Chris Vermeulen 28.01.2022 14:59
The recent Fed comments should have helped settle the global market expectations related to if and when the Fed will start raising rates and/or taking further steps to curb inflation trends. Additionally, the Fed has been telegraphing its intentions very clearly over the past few months, providing ample time for traders and investors to alter their approach to pending monetary tightening actions. Read the full Fed Statement here.In my opinion, foreign markets are more likely to see increased risks and declining price trends for two reasons. First, at-risk nations/borrowers struggle to reduce debt levels. Second, foreign market traders/investors struggle to adapt to the transition away from speculative “growth” trends. I think the US Dollar may continue to show strength over the next 4+ months as the foreign traders pile into US economic strength while the Fed initiates their tightening actions. So it makes sense to me that global markets would recoil from Fed tightening while debt-heavy corporations/nations seek relief from rising debt obligations.Foreign Markets Struggle For Support Before US Fed Monetary TighteningIn a continuing downward slide, global market equity indexes continue to move lower after the US Fed comments this week. In this article, I wrote about this dynamic on August 3, 2021: US Markets Stall Near End Of July As Global Markets Retreat - Are We Ready For An August Surprise? At that time, I suggested the US markets were stalling while the global markets continued to decline.Now, nearly five months later, we've seen the US market trend moderately higher, attempting to struggle to new highs and exhibit deep downward price trends, while the global markets have continued to trend lower. As we move closer to the US Fed pushing interest rates higher, I expect these trends to become even more volatile and pronounced.US Equities May Find Support After The Fed Raises RatesThe current dynamic in the global markets is that capital is seeking investments where safety and profitable returns dominate over risks. As the global markets transition ahead of the Fed rate increases, I believe the US markets will continue to dominate global assets in opportunities, safety, and returns. Once the Fed starts to raise interest rates, a brief period of volatility throughout the global markets may occur. Still, that volatility should quickly settle as traders chase a stronger US Dollar, US Dollar-based Dividends, and a potential “melt-up” of the US Equity market (particularly the Dow Jones, S&P500, and possibly the Russell 2000).Sign up for my free trading newsletter so you don’t miss the next opportunity!Unless the US Fed takes very aggressive action in raising rates too quickly, I believe, at least initially, the US equity markets will continue to benefit from perceived strengths compared to many global equities/indexes.This means there will be many opportunities for traders and investors in 2022 and 2023 – we have to be patient in waiting for the chance to profit from these big trends. Jumping ahead of this volatility could be dangerous if you are on the wrong side of the price trend. Instead, wait for the right opportunities while you protect your capital from extreme risks. Let the markets tell you when opportunities are perfect – don't try to force a trade to happen.On December 28, 2021, I published this research article showing how my Adaptive Dynamic Learning (ADL) Predictive Modeling system expects price to trend in 2022 and early 2023: Predictive Modeling Suggests 710 Rally In SPY And QQQ Before April 2022. I strongly suggest taking a look at the recent downside price trends in relation to the lower range of the ADL Predictive Modeling expectations. If my ADL Predictive Modeling system is accurate, we may see a relatively strong recovery in the US stock market throughout the rest of 2022 and beyond.Strategies To Help You Protect And Grow Your WealthLearn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals.I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking the following link:   www.TheTechnicalTraders.com 
APPL (Apple) After Release of The Reports. How Will It Affect The Market?

APPL (Apple) After Release of The Reports. How Will It Affect The Market?

FXStreet News FXStreet News 28.01.2022 16:11
Apple stock surges after a strong earnings release. AAPL popped 2% on the numbers, and this move has continued. Apple could turn the entire market sentiment around. Apple (AAPL) dropped earnings after the close last night, and they amounted to a blow out. There had been some talk of record numbers and iPhone sales prior to the release, but this set of earnings surprised even the most bullish previews. The stock immediately popped 2% and stabilized but has since added another 2% to its after-market gains and is currently at $165.79 in Friday's premarket. This marks a 4% gain on the regular session close from Thursday. This big question is whether Apple (AAPL) can turn the entire market sentiment around. It is after all the biggest company in the world with the highest weighting in the main S&P 500 and NASDAQ indices. It certainly has the potential to call a bottom to this miserable start to 2022. Apple Stock News Earnings per share (EPS) came in at $2.10 versus the average estimate of $1.88. Revenue also beat estimates, hitting $123.9 billion versus $118.28 billion. The closely watched iPhone revenue number hit $71.63 billion and represents just under 58% of Apple's total revenue. Gross margins increased from 39.8% to 43.8% yearly. On the conference call post earnings, CEO Tim Cook said he sees this margin remaining strong in Q2 2022 to 43% at the midpoint of projections. However, the March quarter is traditionally the slowest of the year earnings wise due to the post-holiday season lull in sales activity. CFO Luca Maestri addressed the key question of supply chain issues, saying chip issues are only a problem for mostly older models and that problems have eased. Tim Cook said the supply chain is doing well. Overall, this was exactly what the market needed: blowout earnings with a significant beat. The earnings call offered strong revenue and most importantly positive commentary around the supply chain and semiconductor chip issues. We will likely see multiple analyst upgrades as the day progresses. Apple Stock Forecast This now becomes a key barometer for the broad market. AAPL should stabilize and appreciate further from here based on these results. If this current rally fails and fades, then truly we are entering a correction phase. For now, $157 remains key support. This is the high from September and also the 100-day moving average. Hold here and we can then target $167.63 and then onto record highs. Also note how the Relative Strength Index (RSI) is oversold by traditional metrics at 30 (we prefer to use 20) and how the Moving Average Convergence Divergence (MACD) is also at lows with the histogram at the widest we have seen for some time. All of these are indicators of oversold conditions. Everything looks set up for a turnaround. The only caveat is the overall market sentiment. Apple (AAPL) chart, daily
What Are Next Steps of MANA (Decentraland) Price?

What Are Next Steps of MANA (Decentraland) Price?

FXStreet News FXStreet News 28.01.2022 16:11
Decentraland price looks to be set to close the week in profit. MANA price action went against the tide, with global markets nervous and still jitters after the Fed tightening announcement. A weekly close above the S1 and Fibonacci low should trigger a return to the upside. Decentraland (MANA) price has been on the front foot in a challenging market environment. MANA bulls look ready to eke out 28% of gains for this week after the price lifted from the 200-day Simple Moving Average (SMA) and is now set to pop and stay above the monthly S1 support level. Expect more investors to join the rally once the MANA price can consolidate above the S1 and set $2.57 later today as the price target. MANA price set for 15% price hike Decentraland was forming a falling knife last week but got picked up after the bounce off the $1.67 handle and went against the tide this week as the 200-day SMA around $2.0 offered a window of opportunity for more bulls to extend the recovery. In a slow grind, price action again space and lifted MANA 28% until Decentraland price is hovering. As bulls are now trying to consolidate above the monthly S1 at $2.24, and with that as well reentered the Fibonacci retracement to all-time highs. MANA price is yet still far away from any all-time highs. Global markets still look very much on edge, but that does not mean that Decentraland price action will disappoint to the upside. Expect more investors to come in during the US session if MANA price can stay above $2.24. That trigger and inflow will see price action propel further upwards to tick $2.57, the low from December 04 and set as an easy profit target to be reached. MANA/USD daily chart The monthly S1 can be proven slippery when wet, and price action could easily slide back below, triggering bulls to take their money and run. MANA price would be plie back against the 200-day SMA, break it and fulfill the swing trade towards $1.67. Would the swing lower trigger an even more aggressive selloff from bulls and investors, expect a short overshoot towards $1.28, just above the monthly S2.
S&P 500 (SPX) A Very Tight Sequence of The Latest Candles In The Chart

S&P 500 (SPX) A Very Tight Sequence of The Latest Candles In The Chart

Monica Kingsley Monica Kingsley 31.01.2022 15:53
S&P 500 left the 4,270s - 4,330s range with an upside breakout – after bonds finally caught some bid. While in risk-on posture, divergencies to stocks abound – any stock market advance would leave S&P 500 in a more precarious position than when the break above 4,800 ATHs fizzled out. But a stock market advance we would have, targeting 4,500 followed by possibly 4,600. The sizable open long profits can keep growing. Only the market internals would be poor, so better don‘t look at the percentage of stocks trading above their 200-day moving averages, and similar metrics. Enough to say that Friday‘s advance was sparked by the Apple news. When it‘s only the generals that are advancing while much of the rest remains in shambles, Houston has a problem – we aren‘t there yet. Fed‘s Kashkari also helped mightily on Friday – that implicit rates backpedalling was more than helpful. Pity that precious metals haven‘t noticed (I would say yet) – but remember the big picture and don‘t despair, we‘re just going sideways before the inevitable breakout higher. Back to rates and the Fed, there is a key difference between the tightening of 2018 and now – the economy was quite robust with blood freely flowing, crucially without raging inflation. With the Fed sorely behind the curve by at least a year, it‘ll have to move faster and have lower sensibility to market selloffs caused. Stiff headwinds ahead as liquidity gets tighter. Couple that with resilient oil – more profits taken off the table Friday at $88.30 – and you‘ve got a pretty resilient inflation. Not that inflation expectations would be shaking in their boots, not that commodities would be cratering. It‘s only copper (influencing silver) that has to figure out just how overdone its Friday‘s move had been. Not that other base metals would be that pessimistic. Similarly to precious metals and the early tightening phase, commodities would be under temporary pressure as well, but outperforming as we officially enter stagflation. Not too tough to imagine given the GDP growth downgrades. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook Great finish to the week, but S&P 500 bulls have quite a job ahead – it continues being choppy out there. I‘m still looking at bonds with tech for direction. Credit Markets HYG finally turned around, and Friday was a risk-on day. The question remains how far can the retracement (yes, it‘s retracement only) reach – can the pre-FOMC highs be approached? Could be, could be. Gold, Silver and Miners Gold and silver retreated, but no chart damage was done – things are still going sideways as the countdown is on for the Fed to either tighten too much and send markets crashing, or reverse course (again). Crude Oil Crude oil isn‘t broken by the Fed, and why should it be given that it can‘t be printed. Some backing and filling is ahead before the uptrend reasserts itself. Copper Copper is the only red flag, and seeing it rebound would call off the amber light. This is the greatest non-confirmation of the commodities direction in quite a while, and that‘s why I‘m taking it with more than a pinch of salt. Bitcoin and Ethereum Crypto bulls are putting up a little fight as the narrow range trading continues – I‘m not looking at the Bitcoin and Ethereum buyers to succeed convincingly. Summary S&P 500 bulls finally moved in an otherwise volatile and choppy week. For the days ahead, volatility is likely to calm down somewhat, but chop is likely to be with us still – only that I expect it to be of the bullish flavor. 10-year Treasury yield has calmed down, and that would be constructive for stocks – watch next for the 2-year to take notice likewise. The 2-year Treasury is quite sensitive to the anticipated Fed moves, and illustrates well the rate hike fears – coupled with the compressed 10-year to 2-year ratio, we‘re looking at rising expectation of the Fed policy mistake (in tightening too much, too fast). For now though, stocks can recover somewhat, and most of the commodities can keep on appreciating. Precious metals keep being in the waiting game, very resilient, and will turn out one of the great bullish surprises of 2022. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Bitcoin, Fed, Stocks and Bonds

Bitcoin, Fed, Stocks and Bonds

Korbinian Koller Korbinian Koller 01.02.2022 13:18
Bitcoin, the plan, and its execution The Plan: It is an election year when Democrats will project political pressure upon the Federal Reserve to not risk through aggressive policy changes a stock market collapse to keep their votes. As a result, more money printing expands inflation, which supports the interest for bitcoin as an inflation hedge. Should we see in opposition for whatever reason a rapid stock market decline, the investor would unlikely be interested in owning stock or bonds. While initially, bitcoin prices would likely fall alongside the markets, money will likely flow into bitcoin shortly afterward. The execution: With bitcoins prices suppressed from their recent decline (down 52% from its last all-time high at around US$69,000), we have another edge for minimizing exposure risk. BTC in US-Dollar, monthly chart, high likely turning points: Bitcoin in US-Dollar, monthly chart as of January 31st, 2022. The chart above depicts five supply zones we have our eye on. We will try identifying low-risk entry points on smaller time frames at or near these points and reduce risk further with our quad exit strategy. We already had entries near zone 1 and 2 and posted those live in our free Telegram channel. BTC in US-Dollar, weekly chart, bitcoin, the plan, and its execution, reload trading: Bitcoin in US-Dollar, weekly chart as of February 1st, 2022. Once the more significant time frame turning point is identified (white arrow), we will add what we call ‘reload’ trades (see chart above) on the smaller weekly time frame. We do so by identifying low-risk entries in congestion zones (yellow boxes) on the way up. We aim to arrive near the elections in November with a sizable position that is due to our exit strategy being risk-free. Playing with the market’s money will allow for positive execution psychology and ease us to observe our position through an expected volatility period, with further profit-taking into possible volatile upswings that are only temporary in nature. BTC in US-Dollar, Quarterly Chart, long-term profit potential: Bitcoin in US-Dollar, quarterly chart as of February 1st, 2022. While this year’s midterm trading on the long side of the bitcoin market could provide for substantial income from the 50% profit-taking of each individual trade and reload based on our quad exit strategy, the real goal is to have a remaining position size that could potentially go to unfathomable heights, since we see in the long term the inflation problem not going away but rather culminating in a bitcoin rise that could be substantially much larger in percentage than alternative inflation hedges like real estate, gold, silver and alike. Not to say that we find it also essential to hold these asset classes for wealth preservation. The quarterly chart above illustrates the potential of such a position. We illustrated both in time (six years) and price (US$ 134,000) our most conservative model in this chart. Bitcoin, the plan, and its execution: We see no scenario where inflation is just going away. The above narrative shows that a short-term fueling of inflation is likely. Furthermore, a high-risk scenario is fueling inflation even more. Should markets decline rapidly, it can be expected that money printing and buying up the market is the most predominant solution applied. Consequently, the average investor would wake up relieved that prices wouldn’t decline any further but liquidating their holdings in a further inflated fiat currency will have massively decreased purchasing power. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on precious metals and cryptocurrencies, you can also subscribe to our free newsletter. Disclosure: This article and the content are for informational purposes only and do not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|February 1st, 2022|Tags: Bitcoin, Bitcoin bounce, Bitcoin bullish, bitcoin consolidation, crypto analysis, Crypto Bull, crypto chartbook, DeFi, low risk, quad exit, technical analysis, trading education|0 Comments About the Author: Korbinian Koller Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
Tesla (TSLA) Price Also Has Its Ups and Downs. It's Below $920 Currently

Tesla (TSLA) Price Also Has Its Ups and Downs. It's Below $920 Currently

FXStreet News FXStreet News 31.01.2022 15:49
Tesla stock tumbles after beating earnings estimates TSLA shares hit by concerns over supply chain issues. Apple and big tech could turn the market next week. Tesla (TSLA) staged a modest recovery on Friday, but the real damage was done on Thursday when the stock shed nearly 12%. Friday's move was not even that impressive given Tesla's high beta, a fact that would usually see it bounce significantly more than the major indices. As we know well by now high, growth is not the sector of choice this year, and Tesla does straddle this space. Investors are moving back to more traditional sectors and metrics for their portfolios, and the era of high flying growth is coming to an end, for now at least. We view this as a positive event, stretching too far would have resulted in an ugly snapback or bubble popping most likely. This stabilisation should continue for the year with one or two speculative dead cat bounces along the way. We may just get one of those next week as the remainder of big tech gets a chance to continue on from where Apple led. Amazon (AMZN), Google (GOOGL) and Facebook (FB) are all reporting earnings this week. Positive earnings should steady sentiment, and this would then also likely spread to some high growth names. However, in the longer term, we expect balance sheets rather than growth to outperform this year. Tesla Stock News Tesla is not just pure growth, although it is managing to do that rather impressively if the latest results are anything to go by. It will stay with the pace, while other start-up EV manufacturers are more likely to fade away. Tesla created the EV space and remains the brand leader. This will likely not change since it has positioned itself as a premium brand. It will likely face more competition, but we do not see it losing quite as much market share as that forecast by Bank of America. Forecasting a drop from 69% to 19% market share in the space of two years does seem a bit headline-grabbing. The problem for Tesla is its valuation got too ahead of itself, so it is likely to underperform in this new environment despite continued strong earnings and revenue growth. Tesla Stock Forecast The bearish trend is now well-established. Thursday's losses only followed on from what we identified back in early January. The spike higher failed, and then it created a lower low, which confirmed the mid-December low. Even Friday's price action set a lower low than Thursday before the bounce set in. Resistance at $987 is last week's high and is first up. A close above that is significant and a new bar above that will signify a small short-term uptrend. Otherwise, the medium-term downtrend remains in control with support at the 200-day moving average, which sits at $814 currently. Tesla (TSLA) chart, daily
Technical Analysis: Moving Averages - Did You Know This Tool?

(PLTR) Palantir Stock Went Down And Isn't Even Close To November's Levels

FXStreet News FXStreet News 01.02.2022 15:49
Palantir stock rises by nearly 8% on Monday. PLTR shares have suffered from the hawkish Fed and risk aversion. Palantir could see a rally as risk assets see inflows. Palantir (PLTR) is back on the minds of traders as retail interest stocks finally catch a bid in this new environment. Meme and retail interest stocks have been hammered so far in 2022. Most, if not all, of these stocks are high growth, unprofitable and highly speculative names, and the momentum has dried up in this sector in 2022. The Fed has pivoted to a strongly hawkish stance, and markets are pricing in five rate hikes this year. Palantir has fallen 25% so far this year and nearly 50%over the last three months. Palantir Stock News The meme and retail space staged a recovery yesterday as some end-of-month position covering saw some positive flows. Added to this was a more risk-on tone following from Apple's strong earnings late last week and in anticipation of more big tech earnings this week. AMC then whetted risk appetites further this morning when it released revenue numbers that were ahead of analysts' forecasts. AMC shares popped 14% and dragged many retail and meme stocks along with them. All this should contribute to more gains for Palantir on Tuesday as momentum is key for these names. Adding to this and more stock-specific is that Palantir and Satellogic (SATL) announced a strategic partnership. "Combining the forces of Palantir’s Edge AI technology with Satellogic’s frequent high-resolution imagery will give users actionable insight faster than ever, accelerating their operations from space to mud," said Shyam Sankar, COO of Palantir. "The holistic capabilities of Palantir's Foundry will be instrumental in helping Satellogic realize our mission to improve life on Earth through geospatial data,” said Matthew Tirman, President of Satellogic North America. “ Satellogic will provide Palantir’s US government customers with ready access to Satellogic’s high-resolution satellite imagery to drive analytical insights across a range of mission-oriented use cases.” Satellogic only recently went public via a SPAC deal, listing on the NASDAQ on January 26. We do not have details of the financial side of the partnership or the impact on Palantir's revenue streams. The partnership is for five years, and the companies already have an existing collaboration. All this makes it less significant in our view as it is merely an add-on to an existing relationship between the two companies. Investors are pushing the news aggressively on social media. Palantir Stock Forecast We do note the oversold Relative Strength Index (RSI) on January 27 with it dipping below 20. Oversold readings are usually below 30 for the RSI, but 20 eliminates false signals. This then worked well, and today's move is likely to see more gains. Breaking $13.61 gets PLTR shares above the 9-day moving average, and the next resistance is at $15 from both the yearly VWAP and 21-day moving average. The VWAP is the volume-weighted average price. Palantir (PLTR) chart, daily
Crude Oil Consquently Goes Higher, S&P 500 Gains and Bitcoin Slowly Recovers

Crude Oil Consquently Goes Higher, S&P 500 Gains and Bitcoin Slowly Recovers

Monica Kingsley Monica Kingsley 01.02.2022 16:01
S&P 500 pushed sharply higher, squeezing not only tech bears even if yields didn‘t move much – bonds actually ran into headwinds before the closing bell. With my 4,500 target reached, the door has opened to consolidation of prior steep gains, and that would be accompanied by lower volatility days till before the positioning for Friday‘s non-farm payrolls is complete as talked on Sunday. So, we have an S&P 500 rally boosting our open profits while the credit market‘s risk-on posture is getting challenged, and divergencies to stocks abound – as I wrote yesterday: (…) any stock market advance would leave S&P 500 in a more precarious position than when the break above 4,800 ATHs fizzled out. But a stock market advance we would have, targeting 4,500 followed by possibly 4,600. We‘re getting there, the bulls haven‘t yet run out of steam, but it‘s time to move closer to the exit door while still dancing. But the key focus remains the Fed dynamic: (…) Fed‘s Kashkari ... helped mightily on Friday – that implicit rates backpedalling was more than helpful. Pity that precious metals haven‘t noticed (I would say yet) – but remember the big picture and don‘t despair, we‘re just going sideways before the inevitable breakout higher. Back to rates and the Fed, there is a key difference between the tightening of 2018 and now – the economy was quite robust with blood freely flowing, crucially without raging inflation. With the Fed sorely behind the curve by at least a year, it‘ll have to move faster and have lower sensibility to market selloffs caused. Stiff headwinds ahead as liquidity gets tighter. Suffice to say that precious metals did notice yesterday, and copper looks ready to work off its prior odd downswing. Remember that commodities keep rising (hello the much lauded agrifoods) while oil enteredd temporary sideways consolidation. Look for other base metals to help the red one higher – the outlook isn‘t pessimistic in the least as the recognition we have entered stagflation, would grow while the still compressing yield curve highlights growing conviction of Fed policy mistake. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bulls proved their upper hand yesterday, and the question is where would the upswing stall – or at least pause. Ahead soon, still this week. Credit Markets HYG caught a bid yesterday too, but the sellers have awakened – it appears the risk-on trades would be tested soon again. Bonds are certainly less optimistic than stocks at this point, but the S&P 500 rickety ride can still continue, and diverge from bonds. Gold, Silver and Miners Gold and silver retreat was indeed shallow, did you back up the truck? The chart hasn‘t flipped bearish, and I stand by the earlier call that PMs would be one of the great bullish surprises of 2022. Crude Oil Crude oil bulls rejected more downside, but I‘m not looking for that to last – however shallow the upcoming pullback, it would present a buying opportunity, and more profits on top of those taken recently. Copper Expect copper‘s recent red flag to be dealt with decisively, and for higher prices to prevail. Other base metals have likewise room to join in as $4.60 would be taken on once again. At the same time, the silver to copper ratio would move in the white metal‘s favor after having based since the Aug 2020 PMs top called. Bitcoin and Ethereum As stated yesterday, crypto bulls are putting up a little fight as the narrow range trading continues – I‘m not looking at the Bitcoin and Ethereum buyers to succeed convincingly. Time for a downside reversal is approaching. Summary S&P 500 bulls made a great run yesterday, and short covering was to a good deal responsible. Given the credit market action, I‘m looking for the pace of gains to definitely decelerate, and for the 500-strong index to consolidate briefly. VIX is likely to keep calming down before rising again on Friday. Should credit markets agree, the upcoming chop would be of the bullish flavor, especially if oil prices keep trading guardedly. And that looks to be the case, and the rotation into tech can go on – $NYFANG doing well is one of the themes for the environment of slowing GDP growth rates, alongside precious metals and commodities embracing inflation with both arms. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
XAU Stays Strong, But Went Below The "Iconic" Value

XAU Stays Strong, But Went Below The "Iconic" Value

Arkadiusz Sieron Arkadiusz Sieron 01.02.2022 16:30
  Gold fought valiantly, gold fought nobly, gold fought honorably. Despite all this sacrifice, it lost the battle. How will it handle the next clashes? Have you ever felt trapped in the tyranny of the status quo? Have you ever felt constrained by some invisible yet powerful forces trying to thwart the fullest realization of your potential? I guess this is what gold would feel like right now – if metals could feel anything, of course. Please take a look at the chart below. As you can see, January looked to be quite good for the yellow metal. Its price surpassed the key level of $1,800 at the end of 2021, rallying from $1,793 to $1,847 on January 25, 2022. Then the evil FOMC published its hawkish statement on monetary policy. In its initial response, gold slid. That’s true, but it bravely defended its positions above $1,800 during both Wednesday and Thursday. There was still hope. However, on Friday, the metal capitulated and plunged to $1,788. Here we are again – below the level of $1,800 that gold hasn’t been able to exceed for more than several days since mid-2021, as the chart below shows. Am I disappointed? A bit. Naughty goldie! Am I surprised? Not at all. Although I cheered the recent rally, I was unconvinced about its sustainability in the current macroeconomic context, i.e., economic recovery with tightening of monetary policy (the surprisingly positive report on GDP in the fourth quarter of 2021 didn’t probably help gold), rising interest rates, and possibly a not-distant peak in inflation. In the previous edition of the Fundamental Gold Report, I described the Fed’s actions as “a big hawkish wave that could sink the gold bulls” and pointed out that “gold started its decline before the statement was published, which may indicate more structural weakness.” I added that it was also disturbing that “gold was hit even though the FOMC statement came largely as expected.” Last but not least, I concluded my report with a warning that “the upcoming weeks may be challenging for gold, which would have to deal with rising bond yields.” My warning came true very quickly. Of course, we cannot exclude a relatively swift rebound. After all, gold can be quite volatile in the short-term, and this year could be particularly turbulent for the yellow metal. However, I’m afraid that the balance of risks for gold is the downside. Next month (oh boy, it’s February already!), we will see the end of quantitative easing and the first hike in the federal funds rate, followed soon by the beginning of quantitative tightening and further rate hikes. Using its secret magic, the Fed has convinced the markets that it has become a congregation of hawks, or even a cult of the Great Hawk. According to the CME Fed Tool, future traders have started to price in five 25-basis-point raises this year, while some investors believe that the Fed will lift interest rates by 50 basis points in March. All these clearly hawkish expectations led to the rise in bond yields (see the chart below), creating downward pressure on gold.   Implications for Gold What does the recent plunge in gold prices imply for investors? Well, in a sense, nothing, as short-term price movements shouldn’t affect long-term investments. Trading and investing should be kept separate. However, gold’s return below $1,800 can disappoint even the biggest optimists. The yellow metal failed again. Not the first and not the last time, though. In my view, gold may struggle by March, as all these hawkish expectations will exert downward pressure on the yellow metal. In 2015, the first hike in the tightening cycle coincided with the bottom of the gold market. It may be similar this time, as the actual hike could ease some of the worst expectations and also push markets to think beyond their tightening horizon. If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
Has the Santa Rally arrived late this year? Are traders trying to position for a Q4 earnings blowout before the end of 2021?

Has the Santa Rally arrived late this year? Are traders trying to position for a Q4 earnings blowout before the end of 2021?

Chris Vermeulen Chris Vermeulen 28.12.2021 21:50
Predictive Modeling Suggests 7~10% Rally In SPY/QQQ Before April 2022 Has the Santa Rally arrived late this year? Are traders trying to position for a Q4:2021 earnings blowout before the end of 2021? Let’s take a look at what predictive modeling can help us understand. The recent rotation in the SPY/QQQ has shaken some traders’ confidence in the ability of any potential rally – blowing up expectations of a Santa Rally. Yet, here we are with only five trading days before the end of 2021, and the US major indexes are nearing all-time highs again. PREDICTIVE MODELING SHOWS A CONTINUED MELT-UP TREND THROUGH JAN/FEB 2022 Our Adaptive Dynamic Learning (ADL) Predictive Modeling system may hold the answers you are looking for. Let’s look at a few charts to prepare for what may unfold over the next 60+ days. First, this SPY Weekly ADL chart highlights the range of potential outcomes going forward into March/April 2022. The further out we attempt to predict using this technique, the more opportunity exists for outlier events (unusual price trends/activity). Yet, the SPY ADL predictive modeling system suggests a very strong upward price trend in January/February 2022, with a possible narrowing of price in late February – just before another big move higher in March/April 2022. There is an outlier trend that appears below the current price trend. So far, this outlier trend has not aligned with price action over the past 5+ weeks and shows an alternate support level near $430. Sign up for my free trading newsletter so you don’t miss the next opportunity! The ADL predictive modeling system suggests a broad market uptrend is likely in the SPY, with an initial target near $490 possibly being reached by early February. If Q4:2021 earnings come in strong and revenues continue to impress the markets, we may see a rally above the $490 level before the end of February 2022. After the tightening of price near the end of February 2022, it appears the SPY will consolidate near $480, then enter another rally phase and attempt to rally above $500. This type of price action aligns with solid Q4:2021 expectations and continued Q1:2022 economic growth. ADL PREDICTS QQQ WILL RALLY ABOVE $430 BY MARCH/APRIL 2022 This Weekly QQQ ADL Chart highlights a similar type of price trend compared to the SPY. The QQQ appears to have a more consistent upward trend bias with a fairly solid upward price channel trending through the first four months of 2022. It appears the QQQ will rally to levels above $420 by mid-February 2022, then stall for a few weeks, then resume a rally trend through most of March 2022 and into early April 2022. After mid-April 2022, it appears the QQQ will consolidate, again, near the $420~$425 level. This ADL prediction suggests Technology, Healthcare, Consumer stables/discretionary, Real Estate, and other sectors will continue to do well in Q1:2022 and beyond. A rally of 7% to 10% in the first few months of 2022 may send the US markets dramatically higher throughout the rest of 2022 if economic growth stays strong. The ADL predictive modeling system has proven to be a valuable tool in understanding what lies ahead for the markets. Not only does it show a range of potential outcomes and price targets, but it also helps us understand if and when price breaks beyond these ADL predictive ranges (which translates into a unique price anomaly). Price anomalies happen. The COVID-19 price collapse represented a unique price anomaly in 2020. This event, somewhat like a Black Swan event, hit the markets hard and quickly sent prices tumbling. It is important to understand that these events can still happen in the future and can dramatically disrupt expected price trends. Still, if the ADL predictive price trends continue to be accurate, it looks like Q1:2022 and Q2:2022 may continue to see moderate upward price trends with bouts of sideways volatility taking place. The range of the ADL predictive levels (the MAGENTA LINES) shows the type or expected volatility in the markets for Q1 and Q2. It appears volatility will stay elevated over the next 6+ months – so get ready for some big, explosive price trends. Watch for the markets to continue to melt higher over the next few weeks as traders prepare for Q4:2021 earnings to start hitting in early January 2022. We may see the US markets start another big upside price trend – possibly breaking to new all-time highs soon enough. WANT TO LEARN MORE ABOUT PREDICTIVE MODELING? Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals. Please take a minute to visit www.TheTechnicalTraders.com to learn about our Total ETF Portfolio (TEP) technology and how it can help you identify and trade better sector setups. We’ve built this technology to help us identify the strongest and best trade setups in any market sector. Every day, we deliver these setups to our subscribers along with the TEP system trades. You owe it to yourself to see how simple it is to trade 30% to 40% of the time to generate incredible results. Have a great day!
5 Interesting Energy Stocks added to our Watchlist this Quarter

5 Interesting Energy Stocks added to our Watchlist this Quarter

Invest Macro Invest Macro 02.12.2021 10:12
December 1, 2021 The fourth quarter of 2021 is approximately two-thirds over and we wanted to highlight some of the Top Energy Companies that have been analyzed by our QuantStock system so far. Our QuantStock system is a proprietary algorithm that takes into account key company fundamentals, earnings trends and other strength components to find quality companies. We use it as a stock market ideas generator and to update our stock watchlist every quarter. The QuantStock system does not take into consideration the stock price or technical price trends so one must compare each company idea against the current stock prices. There are a plethora of professional studies that continue to show stock markets are overvalued and this is always a key component to consider when researching any stock market idea. As with all investment ideas, past performance does not guarantee future results. Suncor Energy Energy Stock | Medium Cap | 5.42 percent dividend | 15.22 P/E | Our Grade = C+ Suncor Energy Inc. (NYSE: SU) is one of Canada’s biggest energy stocks. It is an integrated energy company engaged in producing synthetic crude from oil sands. Suncor last announced its financial results for the third quarter on October 27. It came up with earnings of 56 cents per share and revenue of $8.11 billion for the three months ended September 30. The results showed significant improvement from the comparable quarter of 2020 but missed the consensus forecast of 58 cents per share for profit and $8.5 billion for revenue. Despite missing expectations, Suncor Energy stock climbed to a new high of $26.97 earlier this month. Matador Resources Co. Energy Stock | Small Cap | 0.51 percent dividend | 16.78 P/E | Our Grade = C- Matador Resources Co. (NYSE: MTDR) is an energy company based in Texas, United States. The company last month announced impressive financial results for the third quarter. Matador earned $1.25 per share during the three months ended September 30, beating the consensus forecast of 96 cents per share. Moreover, it generated revenue of $472.351 million during the quarter, ahead of analysts’ average estimate of $387.950 million. In addition, Matador stock has also performed exceptionally well so far in 2021. The company’s share price has skyrocketed more than 200 percent on a year-to-date basis. The 52-week range of the stock is $10.16 – $47.23, while its total market value stands close to $4.5 billion. Magnolia Oil & Gas Corp. Energy Stock | Small Cap | 0.84 percent dividend | 11.29 P/E | Our Grade = C- Magnolia Oil & Gas Corp. (NYSE: MGY) is another Texas-based oil producer. The company posted solid financial results for the third quarter earlier this month. Magnolia reported adjusted earnings of 67 cents per share on revenue of $283.58 million. The results easily surpassed analysts’ average estimate of 61 cents per share for earnings and $274 million for revenue. If we quickly look at its key financial metrics, Magnolia stock is currently trading around $18.82, against its 52-week range of $18.38 – $19.07. Moreover, the company’s market value is just over $3.4 billion, while its P/E ratio stands at 11.03. China Petroleum & Chemical Corp. Energy Stock | Medium Cap | 10.26 percent dividend | 3.71 P/E | Our Grade = C China Petroleum & Chemical Corporation (NYSE: SNP), commonly known as Sinopec, is a leading oil and gas company based in China. Besides its listing in the New York Stock Exchange, it also trades in Hong Kong and Shanghai. Sinopec last month announced mixed results for the third quarter. Its reported earnings of $2.64 per share, representing a sharp decline from $5.54 per share in the comparable period of 2020. On the positive side, its revenue for the third quarter grew over 52 percent to $114.58 million. If we look at its share price, Sinopec stock has struggled to gain value so far in 2021. The stock has only increased nearly one percent on a year-to-date basis. Petróleo Brasileiro S.A. Energy Stock | Medium Cap | 19.49 percent dividend | 2.71 P/E | Our Grade = C Petróleo Brasileiro S.A. (NYSE: PBR) is one of the leading energy stocks based in Rio de Janeiro, Brazil. The company, also called Petrobras, is engaged in the exploration and production of oil and natural gas. Petrobras last released its quarterly financial results on October 28. The company reported earnings of $5.9 billion for the third quarter, down 26.9 percent from Q2 but significantly higher than the comparable period of 2020. In addition, its quarterly revenue of $23.3 billion was also well above $13.15 billion in the year-ago period. If we talk about its share price movement, Petrobras stock hasn’t performed well this year. The stock is still down nearly six percent on a year-to-date basis. Article by InvestMacro – Be sure to join our stock market newsletter to get our updates and to see more top companies we add to our stock watch list.
S&P 500 Is Almost At New Record High, Will The Uptrend Continue?

S&P 500 Is Almost At New Record High, Will The Uptrend Continue?

Paul Rejczak Paul Rejczak 17.11.2021 16:15
S&P 500 got close to its all-time high, as market mood turned bullish again. But the index retraced some of the rally. So will the uptrend continue? For in-depth technical analysis of various stocks and a recap of today's Stock Trading Alert we encourage you to watch The S&P 500 index gained 0.39% on Tuesday, Nov. 16, as it closed slightly above the 4,700 mark. The market reached the daily high of 4,714.95 before retracing some of the intraday advance. It got close to the Nov. 5 record high of 4,718.50. Last week it fell to the local low of 4,630.86 and it was almost 88 points or 1.86% below the record high. The early November rally was not broad-based and it was driven by a handful of tech stocks like MSFT, NVDA, TSLA. The market seemed overbought in the short-term and it traded within a topping pattern. Then the index retraced some of that advance, as it fell the mentioned 88 points from the record high. The nearest important support level remains at 4,630-4,650 and the next support level is at 4,600. On the other hand, the resistance level is at 4,700-4,720. The S&P 500 broke below its steep short-term upward trend line recently, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq Extended Its Short-Term Uptrend Let’s take a look at the Nasdaq 100 chart. The technology index broke above the 16,000 level recently and it was trading at the new record high. The market accelerated higher above its short-term upward trend line. But last week it retraced some of the advance and it got back to the 16,000 level. Since then it has been advancing and yesterday it got back closer to the record high, as we can see on the daily chart: Apple Above $150, Microsoft at New Record High Let’s take a look at the two biggest stocks in the S&P 500 index, AAPL and MSFT. Apple broke above the $150 price level yesterday. However, it remains well below the early September record high. Microsoft stock retraced all of its recent decline and it reached the new record high of $340.67 yesterday, as we can see on their daily charts: Conclusion The S&P 500 index is expected to open virtually flat this morning. We may see another attempt at breaking above the 4,700 level. However, the market will likely continue to fluctuate along that level following mixed economic data releases. Here’s the breakdown: The S&P 500 bounced from its last week’s local low and it got back above the 4,700 level yesterday. It still looks like a short-term consolidation. Still no positions are justified from the risk/reward point of view. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Crypto as a trading vehicle

Crypto as a trading vehicle

Chris Weston Chris Weston 17.11.2021 09:40
Traders continue to be drawn to crypto as a trading vehicle. Not just because of its ability to trend for a prolonged period, or due to the nature of impulsive momentum that traders can identify and jump on. But also, as we’re seeing now with increased two-way opportunities, and for those that will trade the flow long or short.  For those who see crypto as a vehicle to trade and not just for the long-term adoption story that investors tend to want to be involved with, then from a spread/movement (or volatility) basis crypto is one of the best vehicles out there. We’ve seen that case-in-point over the past 24 hours - A rapid flush out of longs in the market has seen $866m liquidated across exchanges - 31% of that in Bitcoin alone. Again, we look to China where authorities are warning SOEs about cryptocurrency mining, broadly detailing they would increase electricity rates and levies for companies still involved here. While China going after the crypto market is obviously not new, it reminds us that increasing the costs associated with crypto is one of the key influence’s governments can utilise to impact the crypto market, as they can with potentially influencing the fiat-to-stable coin transfer.  There has been some focus on the passing of the US infrastructure bill where a provision has been set for the exchange (or “Broker”) to report customer intel to the IRS – clearly not a popular move for those in the US participating in the crypto market, although it won’t kick in until 2024. This becomes somewhat political, given 1 in 10 Americans have bought and sold crypto in the past 12 months. It perhaps doesn’t shock then that a group of US senators are looking at exempting participants who are involved in the development and innovation of the crypto ecosystem. Either way, crypto will react just like any other asset class to news around regulation, and just as investors are inspired by news of innovation, adoption, or efficiencies - regulation will promote short sharp moves lower, as we have seen periodically.  As a trader, these headlines need to be incorporated fully into one’s risk management. Price moves are the immediate red flag, and a sudden move needs to put us on notice. Personally, when I see a move of 3% in Bitcoin or Ethereum within a 30-minute window, I will assess the headlines and the severity of the issue, as we often see a far slower burn to fully discount news than say spot FX. First movers’ advantage in crypto can therefore be genuinely beneficial and while hedge fund algorithmic activity has dramatically increased in this space over the years, with the technology to react to news far quicker than retail traders, it is still as not as efficient as other asset classes.  This can help level the playing field. The cost to movement trade-off  Our flow is predominantly always seen in Bitcoin and Ethereum – and, while we offer 16 coins in total, these two have the best liquidity, and for an average spread of $33 (on Bitcoin), $5.4 (Ethereum) we see the 12-month average high-to-low percentage range at 6.8% and 8.6% respectively over the past 12 months.  Another popular way to see this is the 5-day Average True Range (ATR). In pips, the 5-day ATR in Bitcoin is 3453 – so this is a spread as a percentage of the daily trading range of 0.96%. On our standard account (comm is incorporated into the spread) this same dynamic in EURUSD sits at 0.97%.  So, in essence, on a spread-per-movement basis Bitcoin is comparable to EURUSD and even gold.  The current set-up Bitcoin daily After a move into 58,621 in Bitcoin, we’ve seen the 50-day MA act as support and buyers stepping in. The 28 Oct swing low of 57,762 is also one to consider, and if we were to see a breakdown through the 50 day and the 28 Oct low and Bitcoin could stage a rapid move into 54,000. As it is, this has the feel that we could see some messy two-way action, and it wouldn’t surprise to see 68,000 capping the upside, 57,000 the downside.  Ethereum daily Ethereum has found support into the lower Bollinger band (20-day MA, 2.5 standard deviations) but has broken the channel support it held since late Sept. That doesn’t mean it will collapse, but the markets propensity to follow the trend is over given price is no longer making higher highs. Another where the near-term price action could get messy and chop around with better two-way price moves.  DOT is one that has seen some good volatility of late and another that is holding the 50-day MA for dear life. A close below 39.66 and this could open a deeper move – a factor which could be appealing as we pay 7.5% on shorts.  As always in trading keeping an open mind is key and for those who want to trade crypto rather than HODL, it feels like the stage is set for two-way opportunity.
Markets Situation, Federal Reserve, Crude, EURJPY, Gazprom And More - "The Trade Off" Is Here!

It Won't Be A Surprise, If We Say S&P 500 Is Moving Like APPL (Apple) According To These Charts...

Paul Rejczak Paul Rejczak 01.02.2022 15:38
  Stocks extended their Friday’s rally yesterday, as the S&P 500 index broke above the 4,500 level. Is this still just an upward correction? The S&P 500 index gained 1.89% on Monday, as it extended its Friday’s gains and broke above the 4,500 level. It retraced more of its recent declines after breaking above the last week’s consolidation along the 4,300-4,400. On last Monday’s low of 4,222.62 the market was 596 points or 12.4% below the Jan. 4 record high of 4,818.62. And yesterday it reached the new local high of 4,516.89. It still looks like an upward correction within a downtrend, however, the market may be also trading within a new uptrend. Late December – early January consolidation along the 4,800 level was a topping pattern and the index retraced all of its December’s record-breaking advance. On Friday it broke above a steep short-term downward trend line. This morning the S&P 500 index is expected to open 0.3% higher following an overnight consolidation. The nearest important resistance level is now at 4,500-4,550, marked by the previous local lows. The resistance level is also at 4,600. On the other hand, the support level is at 4,400-4,450, marked by the recent resistance level. The S&P 500 is now back above its early December local low, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Apple Rallies Again Recently, Apple stock fluctuated along the support level of $155.0-157.5 following mid-January downtrend ahead of its quarterly earnings release. The stock reversed the downtrend after breaking above a short-term consolidation and since the earnings release it gained more than 10%. The resistance level is at around $180.0-183.0, marked by the Jan. 4 record high of $182.94. Conclusion The S&P 500 index extended its Friday’s advance yesterday and it broke slightly above the 4,500 level. It still looks like an upward correction following mid-January declines and a rebound within a new medium-term downtrend. Stocks may further extend their uptrend, but there’s a risk of a short-term downward reversal. Today the index is expected to open 0.3% higher, and we may see some uncertainty and a consolidation along the 4,500 level. The market will be waiting for the quarterly earnings releases (AMD, Alphabet today after the session’s close, Meta tomorrow and Amazon on Thursday, among others) and Friday’s monthly jobs data announcement. There is still an uncertainty concerning Russia-Ukraine tensions. We decided to close our profitable long position that was opened on Tuesday, Jan. 25 at the 4,335 level - S&P 500 continuous futures contract. The details of that position (stop-loss and profit target levels) were available for our subscribers in the premium Stock Trading Alerts. Here’s the breakdown: The S&P 500 broke above the 4,500 level again; it still looks like an upward correction. We decided to close our speculative long position from last Tuesday (4,335 level) at the opening of today’s cash market’s trading session – a gain of around 175 index points. In our opinion, no positions are currently justified from the risk/reward point of view. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Pairs With American Dollar: AUDUSD, USDCAD, NZDUSD - Update

Pairs With American Dollar: AUDUSD, USDCAD, NZDUSD - Update

John Benjamin John Benjamin 02.02.2022 08:31
AUDUSD recoups losses The Australian dollar recovered after the RBA signaled an end to its bond-buying program. The recent sell-off below the daily support and psychological level of 0.7000 further weighed on market sentiment. As the RSI dipped again into the oversold territory, short-term sellers’ profit-taking has driven the price higher. The bears could be looking to fade the current rebound unless the bulls succeed in pushing past 0.7180. 0.7030 is a fresh support and 0.6970 a major floor before June 2020’s lows near 0.6800. USDCAD tests support The Canadian dollar advanced after November’s GDP exceeded expectations. A break above the supply zone at 1.2730 has put the US counterpart back on track. Nonetheless, the rally came to a halt at the daily resistance at 1.2790. The greenback needed a breather as the surge prevented buyers from chasing after volatility. 1.2580 is a key support and an oversold RSI may raise buyers’ interest again. A close above the said resistance could propel the pair to December’s high at 1.2950. NZDUSD sees limited rebound The New Zealand dollar bounced back after the Q4 jobless rate dropped to 3.2%. The pair saw bids over September 2020’s lows around 0.6530. The RSI’s repeated oversold situation has caught bargain hunters’ attention. However, the directional bias remains bearish. The kiwi could find resistance at 0.6700 near the 20-day moving average as trend-followers look to sell into strength. 0.6400 would be the next target if the US dollar makes a comeback across the board.
GBP To USD Chart - A Small Step For GBP As It Strenghtens And Reaches Ca. 1.3500

GBP To USD Chart - A Small Step For GBP As It Strenghtens And Reaches Ca. 1.3500

FXStreet News FXStreet News 01.02.2022 15:49
The British pound climbs in the North American session, 0.34%. The market sentiment is mixed as European stocks rise while US futures point towards a lower open. BoE’s 25 basis points rate hike is fully priced in by investors. The GBP/USD remains downward biased, as it failed to breach above the 100-DMA. After ending January with losses of 0.65%, the British pound snaps three-day losses, climbing 0.31%. At the time of writing, the GBP/USD is trading at 1.3495, though retreating from the 100-day moving average (DMA) lying at 1.3514. As depicted by European stock indices rising, the market sentiment is mixed, but US equity futures underpins the cash market towards a lower open. Bank of England (BoE) expected to post back-to-back rate hikes In the meantime, money market futures, as shown per the CME Group BOEWATCH tool, 100% of market participants expect an increase of 25 basis points, from 0.25% to 0.50%. Sources cited by CNBC said that “With the Bank Rate reaching 0.5%, we expect the MPC to confirm that all APF (asset purchase facility) reinvestments will cease following the February decision.” Source: CME Group Meanwhile, the Philadelphia Fed President Harker crossed the wires. He commented that the Fed is not behind the curve, and he expects a rate hike of 25 basis points, four in the year. Concerning the balance sheet reduction, he said that the US central bank could begin the Quantitative Tightening (QT) once the Federal Funds Rates (FFR) hit 1% to 1.25%. The UK economic docket featured the BoE Consumer Credit, Mortgage Approvals for December. The former came at £0.8B in line with expectations, while the latter rose to 71.051K, higher than the 66K foreseen. Concerning the Market Manufacturing PMI Final for January, increased to 57.3, a tick more elevated than the 56.9 estimated, though trailed the previous month 57.9, showing some slowing, due to the Omicron hit. Across the pond, Manufacturing PMI released by IHS Markit and the ISM for January will be closely watched by GBP/USD traders. That alongside the JOLTs Job Opening for December could shed some light, in anticipation of Thursday’s Jobless Claims and Friday’s Nonfarm Payrolls report. GBP/USD Price Forecast: Technical outlook The GBP/USD is downward biased. During the European session, the pair retreated at the 100-day moving average (DMA) at 1.3514, but any downward moves might be capped by the 50-DMA lying at 1.3418. To the upside, the GBP/USD will face resistance at 1.3500, followed by the 100-DMA at 1.3514 and an eight-month-old downslope trendline around the 1.3530-40 region. On the flip side, the 50-DMA at 1.3418 is the first support level, followed by the 1.3400 figure, and then the YTD low at 1.3357.
Having A Look At The Markets Considering Tensions, COVID-19 And National Banks Decisions

ECB February Preview: Euro bulls hope for a hawkish ECB on hot EU inflation

FXStreet News FXStreet News 02.02.2022 15:56
EUR/USD has been rising steadily since the beginning of the week. Annual HICP in the euro area came in much higher than expected in January. Euro could lose its bullish momentum if ECB downplays inflation concerns. The shared currency suffered heavy losses against the dollar last week after FOMC Chairman Jerome Powell confirmed the Fed’s hawkish stance in the face of high inflation. Following a sharp decline to its lowest level since June 2020, however, EUR/USD managed to stage a decisive rebound during the first half of the week and advanced beyond 1.1300. In addition to renewed dollar weakness, hot inflation data from the euro area helped the pair push higher mid-week. Eurostat reported that annual inflation in the euro area, as measured by the Harmonised Index of Consumer Prices (HICP), rose to 5.1% in January from 5% in December. This print came in higher than the market expectation of 4.4%. The Core HICP, which excludes energy, food, alcohol and tobacco prices, edged lower to 2.3% from 2.6% but surpassed analysts’ estimate of 1.9%. With the first FOMC meeting out of the way, markets now await the European Central Bank’s (ECB) policy announcements and the euro could find it difficult to extend its rebound if investors are reminded of the policy divergence between the Fed and the ECB. ECB on hold The ECB is widely expected to leave its policy settings unchanged following the February policy meeting. In December, the ECB confirmed that it will end the Pandemic Purchase Emergency Programme (PEPP) in March. To soften the policy transition, the ECB announced that it will increase the monthly purchases under the Asset Purchase Programme (APP) to €40 billion in Q2 and €30 billion in Q3 from the current level of €20 billion. The bank intends to maintain the APP purchases at a pace of €20 billion for “as long as necessary” from the last quarter of the year. While speaking at the press conference in December, ECB President Christine Lagarde refrained from dismissing the possibility of a rate increase before the end of 2022 and helped the common currency stay resilient against its rivals for the remainder of the year. Commenting on the inflation outlook earlier in the month, several ECB members sounded relatively optimistic and EUR/USD struggled to preserve its bullish momentum. ECB policymaker Peter Kazimir noted that inflation in the eurozone was expected to peak in the “nearest months” before starting to decline. Moreover, ECB chief economist Philip Lane said that they are not yet seeing a big response from wages to inflation. Similarly, Lagarde explained that energy costs were rising due to temporary factors and added that there were no signs of wages being “bid up.” Hawkish scenario: In case Lagarde hints at the possibility of a rate hike before the end of the year after the latest inflation report, that could be assessed as a hawkish tilt in the ECB’s policy outlook and provide a boost to the euro. Currently, eurozone money markets are pricing in 30 basis points of rate hikes by the end of the year. Dovish scenario: Lagarde might opt to communicate that inflation is close to peaking in the eurozone and outright reject a rate hike in 2022 while pushing back against market rate-hike bets. Lagarde might also mention that they don’t need to normalize the policy as fast as the Fed by highlighting the differences in economic conditions in the US and the EU. Neutral scenario: Given the fact that the ECB will not release its revised economic projections until March, it would be surprising to see an obvious shift in the ECB’s tone. The accounts of the ECB’s December meeting revealed that policymakers are divided over the inflation outlook and February's policy statement is unlikely to touch on that. The ECB should reiterate that it stands ready to act if inflation becomes persistent in the euro area and that it remains committed to ensuring price stability. EUR/USD Technical Analysis Unless the ECB delivers a hawkish surprise, the policy divergence between the Fed and the ECB should continue to favour the dollar over the euro and limit EUR/USD’s upside. At the time of press, the pair was trading near 1.1300, where the 20-day and the 50-day SMAs are located. In case EUR/USD starts using these levels as support, it could target the next static resistance at 1.1375 ahead of 1.1430 (100-day SMA). Meanwhile, the Relative Strength Index (RSI) indicator on the daily chart stays near 50, suggesting that the pair needs to push higher to convince investors that the latest advance is the beginning of an uptrend rather than a correction. On the flip side, a dovish ECB statement could attract bears and cause the pair to slide toward 1.1200 (psychological level, static level). If this support fails, EUR/USD (https://www.fxstreet.com/currencies/eurusd) could touch a fresh 19-month low at 1.1100.
Bank of England (BoE) and European Central Bank (ECB) About To Make Decisions...

Bank of England (BoE) and European Central Bank (ECB) About To Make Decisions...

Alex Kuptsikevich Alex Kuptsikevich 03.02.2022 08:36
The Bank of England and the ECB will announce their monetary policy decisions today. They could reinforce the contrast in policy between these central banks and trigger a significant reassessment in the FX market. The ECB is expected to confirm its plans to halt its emergency balance sheet buying programme in March. But it will keep the refinancing rate at zero and continue with 'regular' balance sheet purchases. The ECB is likely to try to save face after yesterday's new inflation record and show more hawkish rhetoric than we are used to. Even so, the eurozone will fall seriously behind the US and UK in its fight against inflation, which can dent the euro. The Bank of England is expected to raise its rate for the second time in this cycle from 0.25% to 0.5%. And we would not be surprised if there are hints in the official comments of a willingness to raise the rate at every subsequent meeting in the coming quarters. The overall situation could resemble the early 2000s when the Bank of England acted more aggressively than its Fed and ECB counterparts to suppress inflation. Tight monetary policy will provide the pound with a chance to get out of extreme lows where it found itself due to Brexit and the pandemic, consolidating this year in the 1.42-1.60 area in GBPUSD and a move into the 0.70-0.80 range for EURGBP.
Price Of Gold Update By GoldViewFX

S&P 500 Tops The Chart, Gold Finds His Way (?), USOIL On A Straight Way?

John Benjamin John Benjamin 03.02.2022 09:01
XAUUSD attempts to bounce The bullions bounce higher as the US dollar softens across the board. Gold is looking to claw back losses from the liquidation in late January. A close above the psychological level of 1800 would be the first step, pushing short-term sellers into covering their bets. The previous support at 1817 coincides with the 30-day moving average, making it an area of interest and important resistance. A bullish breakout may send the metal to the previous high at 1847. On the downside, 1780 is a fresh support. SPX 500 tests resistance The S&P 500 rallies over better-than-expected corporate earnings. A break above 4490 has eased the selling pressure on the index. The former daily support at 4600 is now a key resistance that lies over the 30-day moving average. A close above this congestion area could turn sentiment around, paving the way for a recovery towards 4750. The RSI’s overbought situation may keep the momentum in check temporarily. A pullback may see buying interest in the demand zone between 4410 and 4490. USOIL consolidates gains WTI crude continues to climb as OPEC+ refuses to raise its output limit. The RSI inched into the overbought territory on the daily chart after a new high above 85.00. The bulls could be wary of chasing after the extended rally. 85.00 has turned into a support and a pullback could be an opportunity to accumulate again. Further down, 82.00 on the 30-day moving average is a major floor for the current rally. The milestone at 90.00 would be the next target when momentum makes its return.
Deer in the Headlights

Deer in the Headlights

Monica Kingsley Monica Kingsley 03.02.2022 15:56
S&P 500 is slowly getting under pressure, which is likely to culminate on weak non-farm payrolls tomorrow if Wednesday was any guide. Credit markets are pushing for higher yields as inflation data keep surprising those policy makers who had been already surprised throughout 2021. Commodities though aren‘t freezing as a proverbial deer in the headlights, and once the scare of the Fed‘s short tightening cycle gets done away with, precious metals would join. In the meantime, look for silver to act on copper‘s cue, and for gold to do relatively better in risk-off settings.As for stocks, my gentle selling bias while on the lookout to enter short towards the session‘s end, hasn‘t changed since yesterday, and the new position is already profitable:(…) the low volume behind the upswing coupled with credit market reversal shows that the push towards 4,600 is next – but it would be fraught with internal vulnerability. It‘s that value has welcomed the risk-on turn while tech barely prevented lower values – the bond reprieve won‘t last, and is providing more fuel behind the commodities push higher, and precious metals recovery.The Kashkari effect and good ISM Manufacturing PMIs have worked fine, but the services data awaits. And I‘m looking at it to throw a spanner in the works, a modest one. For now, controlling the overall risk is key – fresh portfolio highs were achieved yesterday as new S&P 500 long profits were taken off the table – and commodities with precious metals are likely to do well in this extended (sticking out like a sore thumb) rally off oversold levels (in tech). The other key thought expressed in the linked tweet is that S&P 500 hasn‘t entered a bear market, that it hasn‘t rolled over to the downside for good. It‘s that I expect the return of the bears in the not too distant future, and a smoother sailing in 2H 2022.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 bulls prevailed yesterday, but would get under pressure relatively soon. The ominous lower knots say a consolidation is knocking on the door.Credit MarketsHYG repelled selling pressure, but that won‘t last – I‘m looking for lower values across the bond spectrum, coinciding with (temporary) dollar upswing. Risk-off.Gold, Silver and MinersAll this risk-off already in and still to come, is failing to press gold and silver really down – and that tells you the true direction is up, just waiting for a (Fed, inflation, stagflation) catalyst.Crude OilCrude oil bulls aren‘t yet wavering, but remain perched pretty high – I‘m looking for sideways to down consolidation as the bears get emboldened by the rising volume. Trying their luck soon.CopperCopper is back to the middle of its recent range, still positioned for an upside breakout. Commodities are pointing in the right direction – note the absence of sellers yesterday. How far would the USD upswing compress the red metal today? Not much, not lastingly.Bitcoin and EthereumThe narrow crypto trading range is over, and the bears are on the move – look for them to take some time before they get going towards BTC $35K.SummaryS&P 500 bulls are about to meet the bears again, and higher yields won‘t save value stocks, let alone spawn a rush to tech safety. The pressure in stocks to probe lower values, is building up, and 4,450 may not be enough to stop it. For all the pause in Fed hawkish jawboning, the tightening cycle is merely getting started, and stocks will feel it. Unlike precious metals, which would reverse prior hesitation once the rate raising starts in earnest, and start going up. And commodities? These aren‘t waiting for anyone‘s greenlight. And neither should you in life – what I would like to bring to your attention, is that volatility is rising, and it thus makes sense to pare back the overall portfolio exposure and position sizing while taking only the strongest of opportunities.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Seasonality favors another wave up

Seasonality favors another wave up

Florian Grummes Florian Grummes 03.02.2022 21:05
However, these gains attracted some profit-taking at prices around US$1,850. And in the aftermath of last week’s FOMC meeting, gold sold off for three days in a row. This merciless sell-off only ended at US$1,780 wiping out nearly all gains since mid of December. It was some form of the classic “the bull walks up the stairs and the bear jumps out the window” pattern, which is a typical behavior within an uptrend.Hence and exactly for this reason, the deep pullback did not necessarily end the recovery in the gold market. Of course, in the bigger picture, the entire precious metals sector is still stuck in this tenacious correction which has been ongoing since August 2020. In the short-term, however, the pullback has created an oversold setup and once again proved that there is buying interest at prices below US$1,800.US-Dollar index, daily chart as of February 3rd, 2022. False breakout?US-Dollar index, daily chart as of February 3rd, 2022.It also seems that the US-Dollar might have hit an important top last Thursday and is now moving lower, which would be very supportive for gold, of course. Everyone is expecting the US-Dollar to go up as the FED is expected to raise interest rates. But the US-Dollar has been discounting this “hike and taper scenario” for several months already. Actually, the US-Dollar index has been rallying +8.8% since May 2021! During the recent FOMC meeting, however, big money might have used the seeming breakout to sell their dollar longs into a favorable high-volume setup. At the same time, stock market sentiment was extremely bearish. Hence, last week likely triggered a top in the US-Dollar and a violent back and forth bottoming pattern for the stock-market.US-Dollar index, monthly chart as of February 3rd, 2022. A series of lower highs!US-Dollar index, monthly chart as of February 3rd, 2022.In the big picture, a top in the US-Dollar would continue the series of lower highs for the dollar. As well, the US-Dollar is moving within a huge triangle since 2001. After a series of three lower highs since December 2016, a test of the lower boundary of the triangle would give gold prices an extreme tailwind in the coming years. Hence, even if it´s hard to come up with any bearish arguments for the dollar at the moment, technically it looks like the dollar could roll over.Gold in US-Dollar, daily chart from February 3rd, 2020. Gold’s behavior is changing.Gold in US-Dollar, daily chart as of February 3rd, 2022.For gold, a weaker US-Dollar would be very helpful. In fact, since the beginning of this week, we perceive an ongoing change in gold’s behavior. We are getting impressed by its intraday strength! Every small pullback around and below US$1,800 was rather quickly bought again. So far, gold has only recovered 38.2% of last week’s nasty sell-off and currently sits pretty much exactly at its 200-day moving average (US$1,805).But the fresh buy signal from the slow stochastic oscillator on the daily chart promises more upside. Hence, we see gold fuming its way higher in the coming weeks. In the next step, gold will have to overcome the 38.2% resistance around US$1,808.50 and then continue its recovery towards US$1,830. In any case, the seasonal component is at least very favorable until the end of February. Therefore, even higher price targets are conceivable too. But gold needs to breakout above the triangle and clear US$1,850. Only then a more sustainable bullish momentum would emerge which could last further into spring.If, on the other hand, gold takes out US$1,780, the recovery since mid of December might be over already and the medium-term correction might likely pick up again.Conclusion: Seasonality favors another wave upOverall, we assume that seasonality favors another wave up in the gold market. Thus, another rally towards at least US$1,830 is realistic. We are short-term bullish, mid-term neutral to skeptic and long-term very bullish for gold.Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can also subscribe to our free newsletter.Disclosure: Midas Touch Consulting and members of our team are invested in Reyna Gold Corp. These statements are intended to disclose any conflict of interest. They should not be misconstrued as a recommendation to purchase any share. This article and the content are for informational purposes only and do not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting.By Florian Grummes|February 3rd, 2022|Tags: EUR/USD, Gold, Gold Analysis, Gold bullish, gold chartbook, Gold neutral, precious metals, Reyna Gold, US-Dollar|0 CommentsAbout the Author: Florian GrummesFlorian Grummes is an independent financial analyst, advisor, consultant, trader & investor as well as an international speaker with more than 20 years of experience in financial markets. He is specialized in precious metals, cryptocurrencies and technical analysis. He is publishing weekly gold, silver & cryptocurrency analysis for his numerous international readers. He is also running a large telegram Channel and a Crypto Signal Service. Florian is well known for combining technical, fundamental and sentiment analysis into one accurate conclusion about the markets. Since April 2019 he is chief editor of the cashkurs-gold newsletter focusing on gold and silver mining stocks. Besides all that, Florian is a music producer and composer. Since more than 25 years he has been professionally creating, writing & producing more than 300 songs. He is also running his own record label Cryon Music & Art Productions. His artist name is Florzinho.
AMC Entertainment Holdings Stock News and Forecast: AMC nearly doubles debt raise

AMC Entertainment Holdings Stock News and Forecast: AMC nearly doubles debt raise

FXStreet News FXStreet News 03.02.2022 16:35
AMC stock slumped yesterday as debt raise news was digested. AMC now nearly doubles the raise from $500 million to $950 million. AMC is down over 40% in the last month and 43% for 2022. AMC Entertainment Holdings (AMC) stock is back on the news wires the last few days, but unfortunately for holders it has not been well received. AMC stock put in three consecutive green days before slumping over 8% on Wednesday. Risk aversion returned, but AMC also announced it was raising more debt to refinance its existing debt. The stock closed at $15.42 for an 8.5% loss on the day. AMC Stock News This morning AMC has nearly doubled its debt offering from $500 million to $950 million. There is also see a bit more detail on the offering. It is to carry a 7.5% interest rate and expires in 2029. The funds will be used to retire existing debt at 10.5% expiring in 2025. The extra $450 million sees AMC also redeeming some notes at 15-17% due in 2026. So AMC is basically remortgaging at a lower rate. This will reduce its interest payments. AMC needs to do this, however, as it carries too much debt. The company has $5.4 billion in long-term debt. AMC has about $1.6 billion in cash, but it spends nearly $100 million per quarter on debt repayments. So remortgaging makes sense, but it is not exactly comforting. CEO Adam Aron has been looking for ways to improve the financial position of the company, and investors baulked at more share issuances. This was the obvious next step but comes a bit later than optimal. Junk bond yields had reached a record low during the summer. The rate of 7.5% is more or less in line with the sector. CCC high yield corporate bonds are currently yielding on average 8.3%. This is up from 6% during the summer. Moody's reacted positively and changed its outlook to positive. AMC Stock Forecast For now, AMC shares are holding the support at $14.54, but risk aversion is growing after FB earnings last night and a suprisngly hawkish Bank of England this morning. Equity markets will suffer with high risk names getting hit the most. Expect $14.54 to break with the next support at $12.22. A break here and the lure of $10 will be obvious. Only beaking $21.04 ends this curent bearish trend. AMC daily chart
Having A Look At The Markets Considering Tensions, COVID-19 And National Banks Decisions

EURUSD - Heading To 1.1480? GBPUSD After BoE Decision, CADJPY - A Quite Wide Rang?

John Benjamin John Benjamin 04.02.2022 09:38
EURUSD breaks higher The euro soared as traders bet that persistent inflation could force the ECB to act sooner than later. A break below the daily support at 1.1300 had put the single currency under pressure. However, a swift rebound above this support-turned-resistance indicates strong commitment from the buy-side. The pair is rising towards the January peak at 1.1480. The RSI’s triple top in the overbought area may slow the momentum down as intraday buyers take a break. 1.1270 is a key support to keep the rebound relevant. GBPUSD tests resistance The pound popped higher after the BOE raised interest rates to 0.5%. The latest rebound above the resistance at 1.3520 has prompted sellers to cover. Then the rally is accelerating towards 1.3660 which is a major hurdle from the sell-off in late January. A bullish breakout could turn sentiment in the sterling’s favor and send the price to the previous peak at 1.3740. On the downside, 1.3500 is an important support and its breach could invalidate the recovery despite the bullish catalyst. CADJPY awaits breakout The Canadian dollar recovers over growing risk appetite. A fall below the demand zone around 90.60 weighed on sentiment as the loonie struggled to make a higher high. The pair found support at 89.70 in what used to be a former supply area on the daily chart. The current consolidation is a sign of indecision. 91.10 proves to be a tough resistance to crack. A bullish breakout could bring the price to the recent peak at 92.00. Failing that, the pair may suffer from another round of sell-off below 89.10.
Gold Ended January Glued to $1,800. Will It Ever Detach?

Gold Ended January Glued to $1,800. Will It Ever Detach?

Finance Press Release Finance Press Release 03.02.2022 16:57
  Gold didn’t shine in January. The struggle could continue, although the more distant future looks more optimistic for the yellow metal. That was quick! January has already ended. Welcome to February! I hope that this year has started well for you. For gold, the first month of 2022 wasn’t particularly good. As the chart below shows, the yellow metal lost about $11 of its value, or less than 1%, during January. This is the bad side of the story. The ugly side is that gold wasn’t able to maintain its position above $1,800, even though geopolitical risks intensified, while inflation soared to the highest level in 40 years! The yellow metal surpassed the key level in early January and stayed above this level for most of the time, even rallying above $1,840 in the second half of the month. But gold couldn’t hold out and plunged at the end of January, triggered by a hawkish FOMC meeting. However, there is also a good side. Gold is still hovering around $1,800 despite the upcoming Fed’s tightening cycle and all the hawkish expectations about the US monetary policy in 2022. The Fed signaled the end of tapering of quantitative easing by March, the first hike in the federal funds rate in the same month, and the start of quantitative tightening later this year. Meanwhile, in the last few weeks, the markets went from predicting two interest rate hikes to five. Even more intriguing, and perhaps encouraging as well, is that the real interest rates have increased last month, rising from -1% to -0.6%. Gold is usually negatively correlated with the TIPS yields, but this time it stayed afloat amid rising rates.   Implications for Gold What does gold’s behavior in January imply for its 2022 outlook? Well, I must admit that I expected gold’s performance to be worse. Last month showed that gold simply don’t want to either go down (or up), but it still prefers to go sideways, glued to the $1,800 level. The fact that strengthening expectations of the Fed’s tightening cycle and rising real interest rates didn’t plunge gold prices makes me somewhat more optimistic about gold’s future. However, I still see some important threats to gold. First of all, some investors are still underpricing how hawkish the Fed could become to combat inflation. Hence, the day of reckoning could still be ahead of us. You see, just today, the Bank of England hiked its policy rate by 25 basis points, although almost half of the policymakers wanted to raise interest rates by half a percentage point. Second, the market seems to be biased downward, with lower and lower peaks since August 2020. Having said that, investors should remember that what the Fed says it will do and what it ends up doing are often very different. When the Fed says it will be dovish, it will be dovish. But when the Fed says it will be hawkish, it says so. This is because a monetary tightening could be painful for asset valuations and all the debtors, including Uncle Sam. The US stock market already saw significant losses in January. As the chart below shows, the S&P 500 Index lost a few hundred points last month, marking the worst decline since the beginning of the pandemic. Thus, the Fed won’t risk recession in its fight with inflation, especially if it peaks this year, and would try to engineer a soft-landing. Hence, the Fed could reverse its stance relatively soon, especially that it’s terribly late with its tightening. However, as long as the focus is on monetary policy tightening, gold is likely to struggle within its tight range. Some policymakers and economists have argued that the emergence from the COVID-19 pandemic is more like a postwar demobilization and conversion to a civilian industry than a normal business cycle. White House economists have compared the current picture to the rapid increases in 1947, caused by the end of price controls in conjunction with supply chain problems and pent-up demand after the war (“Historical Parallels to Today’s Inflationary Episode”, Council of Economic Advisers, July 6, 2021). The problem with this analogy is that it is only one instance from more than 70 years ago. More recent and more frequent inflation episodes have generally been ended by a recession or a mid-cycle slowdown. Price pressures have an internal momentum of their own and tend to intensify rather than lessen as the business cycle becomes more mature and the margin of spare capacity shrinks in all markets. If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
Price Of Gold Update By GoldViewFX

How the Fed Will Affect Gold? Let's Take A Look Back...

Arkadiusz Sieron Arkadiusz Sieron 04.02.2022 14:47
  Beware, the Fed’s tightening of monetary policy could lift real interest rates! For gold, this poses a risk of prices wildly rolling down. The first FOMC meeting in 2022 is behind us. What can we expect from the US central bank this year and how will it affect the price of gold? Well, this year’s episode of Fed Street will be sponsored by the letter “T”, which stands for “tightening”. It will consist of three elements. First, quantitative easing tapering. The asset purchases are going to end by early March. To be clear, during tapering, the Fed is still buying securities, so it remains accommodative, but less and less. Tapering has been very gradual and well-telegraphed to the markets, so it’s probably already priced in gold. Thus, the infamous taper tantrum shouldn’t replay. Second, quantitative tightening. Soon after the end of asset purchases, the Fed will begin shrinking its mammoth balance sheet. As the chart below shows, it has more than doubled since the start of the pandemic, reaching about $9 trillion, or about 36% of the country’s GDP. It’s so gigantic that even Powell admitted during his January press conference that “the balance sheet is substantially larger than it needs to be.” Captain Obvious attacked again! In contrast to tapering, which just reduces additions to the Fed’s holdings, quantitative tightening will shrink the balance sheet. How much? It’s hard to say. Last time, during QT from 2017 to 2019, the Fed started unloading $10 billion in assets per month, gradually lifting the cap to $50 billion. Given that inflation is now much higher, and the Fed has greater confidence in the economic recovery, the scale of reduction would probably be higher. The QT will create upward pressure on interest rates, which could be negative for the gold market. However, QT will be a very gradual and orderly process. Instead of selling assets directly, the US central bank will stop reinvestment of proceeds as securities run off. As we can read in “Principles for Reducing the Size of the Federal Reserve's Balance Sheet”, The Committee intends to reduce the Federal Reserve's securities holdings over time in a predictable manner primarily by adjusting the amounts reinvested of principal payments received from securities held in the System Open Market Account. What’s more, the previous case of QT wasn’t detrimental to gold, as the chart below shows. The price of gold started to rally in late 2018 and especially later in mid-2019. Third, the hiking cycle. In March, the Fed is going to start increasing the federal funds rate. According to the financial markets, the US central bank will enact five interest rate hikes this year, raising the federal funds rate to the range of 1.25-1.50%. Now, there are two narratives about American monetary policy in 2022. According to the first, we are witnessing a hawkish revolution within the Fed, as it would shift its monetary stance in a relatively short time. The central bank will “double tighten” (i.e., it will shrink its balance sheet at the same time as hiking rates), and it will do it in a much more aggressive way than after the Great Recession. Such decisive moves will significantly raise the bond yields, which will hit gold prices. However, in this scenario, the Fed’s aggressive actions will eventually lead to the inversion of the yield curve and later to recession, which should support the precious metals market. On the other hand, some analysts point out that central bankers are all talk and – given their dovish bias – act less aggressively than they promise, chickening out in the face of the first stock market turbulence. They also claim that all the Fed’s actions won’t be enough to combat inflation and that monetary conditions will remain relatively loose. For example, Stephen Roach argues that “the Fed is so far behind [the curve] that it can’t even see the curve.” Indeed, the real federal funds rate is deeply negative (around -7%), as the chart below shows; and even if inflation moderates to 3.5% while the Fed conducts four hikes, it will remain well below zero (about -2%), providing some support for gold prices. Which narrative is correct? Well, there are grains of truth in both of them. However, I would like to remind you that what really matters for the markets is the change or direction, not the level of a variable. Hence, the fact that real interest rates are to stay extremely low doesn’t guarantee that gold prices won’t decline in a response to the hiking cycle. Actually, as the chart above shows, the upward reversal in the real interest rates usually plunges gold prices. Given that real rates are at a record low, a normalization is still ahead of us. Hence, unless inflation continues to rise, bond yields are likely to move up, while gold – to move down. Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care.
Smelling Blood

Smelling Blood

Monica Kingsley Monica Kingsley 04.02.2022 15:58
S&P 500 is grinding lower, and bonds concur. Risk-off posture and rising yields aren‘t tech‘s friend really, and the VIX is back to moving up. The odd thing is that the dollar wasn‘t well bid yesterday as could have been expected on rising rates – the sentiment called for a bad non-farm payrolls number today. Understandably so given Wednesday‘s preview, and the figure would just highlight how desperately behind the inflation curve the Fed is, what kind of economy it would be tightening into, and shine more light on its manouevering room for Mar FOMC.Fun times ahead for the bears, and the S&P 500 short profits can go on growing – the ride isn‘t over: If tech – in spite of the great earnings Amazon move – gets clobbered this way again on the rising yields, then we could very well see even energy stocks feel the initial selling wave. Not that value stocks would be unaffected, to put it more than mildly – just check yesterday‘s poor showing of financials. Something is going to give, and soon.Precious metals are holding up relatively well, regardless of the miners‘ weakness. Commodities can go on enjoying their time in the limelight – crude oil is not even momentarily dipping, and copper stands ready to keep probing higher values within its still sideways range. Even cryptos are benefiting from what could almost be described as a daily flight to safety.As I wrote in extensive Monday‘s analysis and repeated since, stiff winds are still ahead in spite of the soothing verbal pause in tightening. As the 467K figure just in beats expectations, the Fed gets its justification to withdraw liquidity any way it pleases.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 bulls are getting slaughtered, and the downhill path is likely to continue, thanks to tech. Brace for a volatile day today.Credit MarketsHYG selling pressure made a strong return, predictably. Credit markets are leading stocks to the downside, certainly.Gold, Silver and MinersAs written yesterday, all this risk-off already in and still to come, is failing to press gold and silver really down – and that tells you the true direction is up. The downswings are being bought.Crude OilCrude oil bulls in the end didn‘t waver, and are pushing higher already – the upside breakout can really stick.CopperCopper is back to the middle of its recent range, still positioned for an upside breakout. It would take time, and precede the precious metals one. Rising commodities are sending a clear message as to which way the wind is blowing.Bitcoin and EthereumThe crypto bears didn‘t get far, and it looks like we‘re back to some chop ahead. SummaryS&P 500 bulls are getting rightfully challenged again – the Fed hikes are approaching. See though how little are commodities and precious metals affected. Meanwhile the S&P 500 internals keep deteriorating. Today‘s analytical introduction is special in talking the non-farm payrolls and Fed tightening dynamic, and explains why the pressure in stocks to probe lower values, is still building up, and that 4,450 may not be enough to stop it. For all the pause in Fed hawkish jawboning, the tightening cycle is merely getting started, and today‘s surprisingly strong data gives the Fed as much justification as the quickening wage inflation. I hope you enjoyed today‘s extensive analysis and yesterday‘s risk exposure observations. Have a great day ahead!Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Ethereum Price Prediction: ETH targets $3,000

Ethereum Price Prediction: ETH targets $3,000

FXStreet News FXStreet News 04.02.2022 16:06
Ethereum price made a false break below a short-term trend line yesterday.ETH price breaks above $2,695 and is set for a run towards $3,018.This would mean 13% gains for ETH and a more favourable outlook for next week.Ethereum (ETH) price is set to book the best gains it has made for the whole of 2022, as a bullish candle has now formed on the back of a significant support level. With that move, many bears are getting hurt as they probably fell in the bear trap with the false break below the supportive short-term trend line. Expect more upside to come with global markets enjoying the rally in Amazon shares, which is spilling over into cryptocurrencies and lifting sentiment in ETH towards $3,018.ETH bulls are stabbing bears in the back with a trapEthereum price was dangling below a short-term trend line and looked quite heavy after the slippage (https://www.fxstreet.com/cryptocurrencies/news/top-3-price-prediction-bitcoin-ethereum-ripple-crypto-sentiments-rolls-over-as-meta-shakes-nasdaq-202202031412) from META earnings. But that markets can change their minds overnight is proven yet again, after Amazon’s earnings fueled a booster rally which we are seeing today. This has spilled over into cryptocurrencies and is lifting sentiment in ETH prices with a firm break above $2,695, squeezing out bears in the process, who went short on the false break of the trend line, and it is now just a matter of time before they close out and take their losses.ETH price is thus set for a second rally today as those bears will need to revert to the buy-side volume (https://www.fxstreet.com/cryptocurrencies/news/ethereum-price-pushes-higher-eth-targeting-3-500-202202021800) to close and cut their losses. This will add a boost to ETH prices and could see Ethereum bulls hitting the price target at $3,018, taking out the $3,000 level, and setting the stage for next week. With that move, the red descending trend line could be broken, and with that, the downturn since December, finally (https://www.fxstreet.com/cryptocurrencies/news/ethereum-price-pushes-higher-eth-targeting-3-500-202202021800) breaking the chances for bears and setting the stage for a possible longer-term uptrend.ETH/USD daily chartNevertheless, there are still some earnings on the docket for today that could surprise to the downside and see those tailwinds (https://www.fxstreet.com/cryptocurrencies/news/top-3-price-prediction-bitcoin-ethereum-ripple-crypto-markets-to-favor-bears-soon-202202020838) as quickly fade as they came. Expect that with that lack of support, ETH price will collapse back to $2,695 and start to weigh further on the bulls. Should that spiral into equities, pushing them firmly in the red, and impacting safe haven flow – expect a dip back towards $2,600.
Ukrainian Tensions and Oil - Is Russia Really the Bad Guy?

Ukrainian Tensions and Oil - Is Russia Really the Bad Guy?

Finance Press Release Finance Press Release 04.02.2022 18:04
While everyone is criticizing Russia, it’s easy to follow the US ‘savior’ narrative. However, what if we looked at what’s happening with oil in mind?Disclaimer to today’s article: I’m providing this analysis from a pure energy-focused perspective. I do not claim it represents THE right view, but rather one of those that won’t be as visible in the mainstream. It is interesting to add different views as pieces of the same puzzle. I am looking forward to reading yours in the comments!Picture Source: MemedroidSeveral port facilities in Germany, the Netherlands and Belgium have been the target of cyberattacks, prompting the judicial authorities to investigate the suspicions of extortion of funds at the expense of German operators in the oil sector. Indeed, it would appear that this series of computer hackings that began several days ago primarily concerns oil terminals. This is disrupting deliveries in several major European ports against a backdrop of soaring energy prices.After jumping the day before, thanks to the strengthening of the euro against the US dollar induced by ECB President Lagarde, oil prices continued to rise during the European session on Friday. Consequently, the fall in the greenback came on top of the recovery in demand, the fall in US crude inventories and the disruptions in supply to boost the price of black gold on the climb, the two crude benchmarks evolving above the psychological mark of 90 dollars a barrel, galvanized by solid demand and tensions on the offer coming from (geo-)political risks.Who is Provoking Who?The situation is rather complex on the geopolitical scene, with the US claiming that Russia is planning an invasion in Ukraine, whereas the US under NATO cover sent additional troops to Eastern Europe. The question that may arise here is: who is provoking who? So far, we haven’t seen Russia placing troops in Mexico, on the border with the United States. On the other hand, the Biden administration may encounter difficulties in accepting that the Kremlin can agree to various partnerships with its European neighbors, especially regarding more favorable energy supplies. Instead, it’s in the US interest to weaken those diplomatic relations, potentially leading to additional partnerships that may arise between the EU and Putin.And as we see the US-led narrative getting through the Western mainstream media with more aggressive, suspicious, and tense tones towards Russia, this obviously has the effect of pouring some oil on the Russian-Ukrainian fire. Furthermore, the US needs reasons to demonstrate that NATO is still alive and relevant while a number of countries are now questioning their own participation in the US-led military organisation created in 1949, even going so far as to show some doubts regarding its current motivations.Isolating the Russian BearBy maintaining a hostile tone towards Russia’s intentions, the US is consequently trying to isolate the Russian bear and push their European partners to blindly follow the “official narrative” (as the EU being part of NATO), which could possibly lead to new sanctions on Russia, the latter being able to retaliate by using its energy assets and capacities to deprive the EU of the Russian supplies, which currently on the gas side represent between 30% and 40% of total gas imports for Europe. Then, as a result, the Americans could start exporting more gas into Europe via Liquefied Natural Gas (LNG) shipping – which again could benefit their energy-led commercial balance – the Europeans thus becoming the losing players in this game.As an example, we saw this week that a tanker loaded with LNG from the US will arrive at the LNG terminal in Świnoujście (Poland) at the end of this month, since Poland has LNG import capabilities which could be used to deliver US gas to Ukraine. Apparently, this is the second time (after the first one took place two years ago) that such gas deliveries are made by PGNiG, the Polish state-controlled oil and gas company, in cooperation with ERU (their strategic trading partner on the Ukrainian market).Actually, Ukraine suspended imports of Russian gas at the end of 2015. After relying on Russian gas imports for decades, they currently increasingly depend on imports from Europe. Since Ukraine has no LNG import capabilities, such US gas deliveries have been organized via a pipeline from the Polish terminal (through re-gasified LNG).WTI Crude Oil (CLH22) Futures (March contract, daily chart)Brent Crude Oil (BRJH22) Futures (April contract, daily chart)RBOB Gasoline (RBH22) Futures (March contract, daily chart)Henry Hub Natural Gas (NGG22) Futures (February contract, daily chart)In summary, geopolitics is always complex because it relies on individual economic and strategic interests of countries. The readings also depend on different views, and since there is always a lot of noise, it often helps to take some steps back in order to analyze the global situation from a different angle.Have a nice weekend! And remember to chime in on the conversation.Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Sebastien BischeriOil & Gas Trading Strategist* * * * *The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Intraday Market Analysis – USD Regains Momentum

Intraday Market Analysis – USD Regains Momentum

John Benjamin John Benjamin 07.02.2022 09:10
USDCHF bounces higherThe US dollar rallied after January’s nonfarm payrolls exceeded expectations. The latest pullback found support near the previous low at 0.9180.A bullish RSI divergence suggests a loss of momentum in the sell-off. A close above 0.9275 would force short-term sellers to cover and pave the way for a broader rebound.Then the double top (0.9360) on the daily chart would be the next target. On the downside, a bearish breakout may send the pair to 0.9110.USDCAD awaits breakoutThe loonie weakened after a rise in Canada’s unemployment rate in January. The greenback has previously come to a halt at the daily resistance (1.2800).The retracement then found bids at the resistance-turned-support at 1.2650, suggesting traders’ strong interest in keeping the two-week-long rally intact. The RSI has inched into the overbought territory and may drive the price lower with short-term profit-taking.A bullish breakout may extend the uptrend to December’s peak at 1.2950.GER 40 lacks supportThe Dax 40 drifts lower after the ECB’s hawkish turn. The recent rebound met stiff selling pressure at 15740. Then a fall below 15350 indicates a lack of commitment from the buy-side.A bearish MA cross suggests an acceleration to the downside and may attract more bears. The demand area around 14850 is a critical floor on the daily chart. Its breach could trigger a bearish reversal in the medium term.An oversold RSI may cause a limited bounce. The bulls need to reclaim 15500 in order to turn sentiment around.
Rally Time

Rally Time

Monica Kingsley Monica Kingsley 07.02.2022 15:59
S&P 500 refused to break below 4,450s, and junk bonds took off the lows as well. The bottom isn‘t in, but I‘m looking for a little reprieve next. The degree to which bonds were sold off vs. stocks, hints that we would have lower to go still, ultimately bottoming around late Feb, perhaps even early Mar. Increasingly more Fed hikes are being priced in, and Friday‘s good non-farm payrolls figure is reinforcing these expectations.Treasuries are telling the story as well – the 10-year yield has been surging lately while the 30-year bond didn‘t move nearly as much. It means a lot of focus on Fed tightening, which is making the recent Amazon and Meta earnings ability to move stocks this much, all the better for the S&P 500 in the short run. The 10-year yield is likely to retrace a part of its prior increase, and that would give stocks some breathing room. At the same time though, I don‘t think that the tech selling is done, that tech is out of the woods now – the current rally is likely to run out of steam over the next 5-10 days, then go sideways to down.As for the immediate plan for Monday‘s session, I think the 4460s would hold on any retest, should we get there at all. The bulls have a very short-term advantage, then as mentioned above, selling would resume, and around May or June we could get the answer as to whether we‘ve been just consolidating or topping out. Before that, we‘re in a quite wide range where current stock market values aren‘t truly reflecting bond market sluggishness.Keeping in mind the key Friday‘s conclusion:(…) Precious metals are holding up relatively well, regardless of the miners‘ weakness. Commodities can go on enjoying their time in the limelight – crude oil is not even momentarily dipping, and copper stands ready to keep probing higher values within its still sideways range. Even cryptos are benefiting from what could almost be described as a daily flight to safety.As I wrote in extensive Monday‘s analysis and repeated since, stiff winds are still ahead in spite of the soothing verbal pause in tightening. As the 467K figure just in beats expectations, the Fed gets its justification to withdraw liquidity any way it pleases.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 bulls aren‘t yet winning, but have a good chance to suck in those who believe the tech bottom is in – tech bears would get another opportunity in the not too distant future.Credit MarketsHYG paused, and the heavy selling is catching a bid – reprieve is approaching even if Friday‘s highs didn‘t last.Gold, Silver and MinersPrecious metals aren‘t getting anywhere, and are likely to warmly embrace the upcoming pause in higher yields. But that‘s not yet the true fireworks we would get later in 2022, which would come on the Fed‘s abrupt U-turn.Crude OilCrude oil bulls aren‘t even remotely pausing – I wouldn‘t count on pullback towards $88 or lower really. There is still much strength in black gold regardless of the Iran sanctions waiver – triple digit oil I called for months ago, is getting near.CopperCopper is back to the middle of its recent range, and the downside looks fairly well defended. The upside breakout would take time, and precede the precious metals one. Rising commodities are still sending a clear message as to which way the wind is blowing.Bitcoin and EthereumThe crypto break higher attests to the return of strength underway, and it‘s supported by the volume. The buyers have the short-term upper hand.SummaryS&P 500 bulls withstood the prospect of hawkish Fed getting more job market leeway on Friday, and look to be entering the week with a slight advantage. Also the bond markets look nearning the moment of calming down as the longer durations are painting a different picture than the 10-year Treasury. S&P 500 would like that, but the tech rebound would get tested as we likely move lower to welcome Mar. Till then, stocks are likely to drift somewhat higher before the rally runs out of steam over the next 5-10 days. Full game plan with reasoning is introduced in the opening part of today‘s extensive analysis. Cryptos good performance on Friday is as promising as the commodities surge – enjoy the days ahead.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Bitcoin, Ethereum, Metaverse Tokens Sink After Holiday Crypto Rally

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC bears to go extinct beyond $53,000

FXStreet News FXStreet News 07.02.2022 16:06
Bitcoin price looks overextended as it grapples with the 50-day SMA and the weekly resistance barrier at $42,816. Ethereum price pierces through the bearish breaker and approaches the 50-day SMA at $3,242. Ripple price approaches the $0.757 to $0.807 supply zone that could cut the uptrend short. Bitcoin price has seen tremendous gains over the past three days as it attempts to overcome a massive hurdle. While altcoins like Ethereum and Ripple have corresponded to this bullishness, investors need to exercise caution with fresh investments as a retracement could be around the corner. Bitcoin price faces a decisive moment Bitcoin price has risen 18% over the past four days and is currently hovering below the 50-day Simple Moving Average (SMA) and the weekly resistance barrier confluence at $42,816. If this uptrend is a bull trap, BTC is likely to see rejection followed by a retracement to the immediate support level at $8,481. A breakdown of the said barrier will knock the big crypto down to $34,752. In an extremely bearish case, Bitcoin price could revisit the $30,000 psychological barrier and collect the liquidity resting below it. BTC/USD 1-day chart If BTC produces a daily candlestick close above the breaker’s upper limit at $44,387, however, it will invalidate the bearish thesis. While this development will alleviate the sell-side pressure, it does not mean that Bitcoin price has flipped bullish. A daily candlestick close above $52,000 will produce a higher high and suggest the possible start of an uptrend. Ethereum price slithers close to bearish thesis invalidation Ethereum price has followed the big crypto and pierced the bearish breaker, ranging from $2,789 to $3,167. Any further bullish momentum will push ETH to climb higher and retest the 50-day SMA at $3,242. Assuming BTC retraces, investors can expect Ethereum price to face rejection at $3,242, leading to a 25% pullback to the weekly support level at $2,324. In a highly bearish case, Ethereum price could revisit the $1,730 weekly support level and collect the sell-side liquidity resting below it. ETH/USD 1-day chart Regardless of the bearish outlook, the Ethereum price can invalidate the short-term bearish outlook if it produces a daily candlestick close above the $3,167 resistance zone. A bullish scenario could be kick-started, however, if buyers push ETH to produce a swing high at $3,413. Ethereum price gains momentum to breakout to $3,300 Ripple price faces a blockade Ripple price broke out of its consolidation and rallied 25% from $0.604 to $0.754. This impressive move is currently retesting the weekly resistance barrier at $0.740, which rests below another hurdle that extends from $0.757 to $0.807. Rejection at this multi-resistance zone seems likely considering the situation in which Bitcoin is in, and investors can expect the Ripple price to retrace 16%, returning to the consolidation zone at $0.628. XRP/USD 1-day chart A daily candlestick close above the supply zone’s upper limit at $0.807 will signal a resurgence of buyers and indicate their willingness to move higher. In this case, Ripple price could set up a higher high by rallying 12% to $0.911.    
Are You Thinking the Dollar Will Collapse? That’s False Hope

Are You Thinking the Dollar Will Collapse? That’s False Hope

Przemysław Radomski Przemysław Radomski 07.02.2022 15:49
  Gold’s latest feats increased investors’ appetite. The outlook for the dollar, however, remains healthy. That can only mean one thing. As volatility erupts across the financial markets, gold and silver prices are being pulled in conflicting directions. For example, with the USD Index suffering a short-term decline, the outcome is fundamentally bullish for the precious metals. However, with U.S. Treasury yields rallying, the outcome is fundamentally bearish for gold and silver prices. Then, with panic selling and panic buying confronting the general stock market, the PMs are dealing with those crosscurrents. However, with QE on its deathbed and the Fed poised to raise the Federal Funds Rate in the coming months, the common denominator is rising real interest rates. To explain, the euro’s recent popularity has impacted the USD Index. For context, the EUR/USD accounts for nearly 58% of the dollar basket’s movement. Thus, if real interest rates rise and the U.S. dollar falls, what will happen to the PMs? Well, the reality is that rising real interest rates are bullish for the USD Index, and the euro’s recent ECB-induced rally is far from a surprise. With investors often buying the EUR/USD in anticipation of a hawkish shift from the ECB, another ‘hopeful’ upswing occurred. However, the central bank disappointed investors time and time again in 2021, and the currency pair continued to make new lows. As a result, we expect the downtrend to resume over the medium term.  Supporting our expectations, I wrote the following about financial conditions and the USD Index on Feb. 2: To explain, the blue line above tracks Goldman Sachs' Financial Conditions Index (FCI). For context, the index is calculated as a "weighted average of riskless interest rates, the exchange rate, equity valuations, and credit spreads, with weights that correspond to the direct impact of each variable on GDP." In a nutshell: when interest rates increase alongside credit spreads, it's more expensive to borrow money and financial conditions tighten. To that point, if you analyze the right side of the chart, you can see that the FCI has surpassed its pre-COVID-19 high (January 2020). Moreover, the FCI bottomed in January 2021 and has been seeking higher ground ever since. In the process, it's no coincidence that the PMs have suffered mightily since January 2021. To that point, with the Fed poised to raise interest rates at its March monetary policy meeting, the FCI should continue its ascent. As a result, the PMs' relief rallies should fall flat like in 2021.  Likewise, while the USD Index has come down from its recent high, it's no coincidence that the dollar basket bottomed with the FCI in January 2021 and hit a new high with the FCI in January 2022. Thus, while the recent consolidation may seem troubling, the medium-term fundamentals supporting the greenback remain robust. Furthermore, tighter financial conditions are often a function of rising real interest rates. As mentioned, the USD Index bottomed with the FCI and surged to new highs with the FCI. As a result, the fundamentals support a stronger, not weaker USD Index. As evidence, the U.S. 10-Year real yield, the FCI, and the USD Index have traveled similar paths since January 2020. Please see below: To explain, the green line above tracks the USD Index since January 2020, while the red line above tracks the U.S. 10-Year real yield. While the latter didn’t bottom in January 2021 like the USD Index and the FCI (though it was close), all three surged in late 2021 and hit new highs in 2022. Moreover, the U.S. 10-Year Treasury nominal and real yields hit new 2022 highs on Feb. 4.  In addition, if you compare the two charts, you can see that all three metrics spiked higher when the coronavirus crisis struck in March 2020. As such, the trio often follows in each other’s footsteps. Furthermore, with the Fed likely to raise interest rates at its March monetary policy meeting, this realization supports a higher U.S. 10-Year real yield, and a higher FCI. As a result, the fundamentals underpinning the USD Index remain robust, and short-term sentiment is likely to be responsible for the recent weakness.  Likewise, as the Omicron variant slows U.S. economic activity, the ‘bad news is good news’ camp has renewed hopes for a dovish Fed. However, the latest strain is unlikely to affect the Fed’s reaction function. A case in point: after ADP’s private payrolls declined by 301,000 in January (data released on Feb. 2), concern spread across Wall Street. However, after U.S. nonfarm payrolls (government data) came in at 467,000 versus 150,000 expected on Feb. 4, the U.S. labor market remains extremely healthy.  Please see below: Source: U.S. Bureau of Labor Statistics (BLS) On top of that, the BLS revealed that “the over-the-month employment change for November and December 2021 combined is 709,000 higher than previously reported, while the over-the-month employment change for June and July 2021 combined is 807,000 lower. Overall, the 2021 over-the-year change is 217,000 higher than previously reported.”  Thus, the U.S. added more than 700,000 combined jobs in November and December than previously reported, and the net gain in 2021 was more than 200,000. Please see below: Source: BLS As for wage inflation, the BLS also revealed: “In January, average hourly earnings for all employees on private nonfarm payrolls increased by 23 cents to $31.63. Over the past 12 months, average hourly earnings have increased by 5.7 percent.” As a reminder, while investors speculate on the prospect of a hawkish ECB, the latest release out of Europe shows that wage inflation is much weaker than in the U.S. To explain, I wrote on Feb. 1: Eurozone hourly labor costs rose by 2.5% YoY on Dec. 16 (the latest release). Moreover, the report revealed that “the costs of wages & salaries per hour worked increased by 2.3%, while the non-wage component rose by 3.0% in the third quarter of 2021, compared with the same quarter of the previous year.”  As a result, non-wage labor costs – like insurance, healthcare, unemployment premiums, etc. – did the bulk of the heavy lifting. In contrast, wage and salary inflation are nowhere near the ECB’s danger zone. Please see below: And why is wage inflation so critical? Well, ECB Chief Economist Philip Lane said on Jan. 25: Source: ECB As a result, when the ECB’s Chief Economist tells you that wage inflation needs to hit 3% YoY to be “consistent” with the ECB’s 2% overall annual inflation target, a wage print of 2.3% YoY is far from troublesome. Thus, while euro bulls hope that the ECB will mirror the Fed and perform a hawkish 180, the data suggests otherwise.  In addition, while U.S. nonfarm payrolls materially outperformed on Feb. 4, I noted on Feb. 2 that there are now 4.606 million more job openings in the U.S. than citizens unemployed. Please see below: To explain, the green line above subtracts the number of unemployed U.S. citizens from the number of U.S. job openings. If you analyze the right side of the chart, you can see that the epic collapse has completely reversed and the green line is now at an all-time high. Thus, with more jobs available than people looking for work, the economic environment supports normalization by the Fed. Thus, if we piece the puzzle together, the U.S. labor market remains healthy and U.S. inflation is materially outperforming the Eurozone. As a result, the Fed should stay ahead of the ECB, and the hawkish outperformance supports a weaker EUR/USD and a stronger USD Index. Moreover, the dynamic also supports a higher FCI and a higher U.S. 10-Year real yield. As we’ve seen since January 2021, these fundamental outcomes are extremely unkind to the PMs. Finally, while the Omicron variant has depressed economic sentiment, I noted previously that the disruptions should be short-lived. For example, with Americans’ anxiety about COVID-19 decelerating, renewed economic strength should keep the pressure on the Fed. Please see below: To explain, the light brown line above tracks the net percentage of Americans concerned about COVID-19, while the dark brown line above tracks the change in flight search trends on Kayak. In a nutshell: the more concern over COVID-19 (a high light brown line), the more Americans hunker down and avoid travel (a low dark brown line). However, if you analyze the right side of the chart, you can see that the light brown line has rolled over and the dark brown line has materially risen. Moreover, with the trend poised to persist as the warmer weather arrives, increased mobility should uplift sentiment, support economic growth, and keep the Fed’s rate hike cycle on schedule. The bottom line? The USD Index’s fundamentals remain extremely healthy, and while short-term sentiment has been unkind, rising real yields and a hawkish Fed should remain supportive over the medium term. Moreover, with the PMs often moving inversely to the U.S. dollar, more downside should confront gold, silver, and mining stocks over the next few months. In conclusion, the PMs rallied on Feb. 4, despite the spike in U.S. Treasury yields. However, with so much volatility confronting the general stock market recently, sentiment has pulled the PMs in many directions. However, the important point is that the medium-term thesis remains intact: the USD Index and U.S. Treasury yields should seek higher ground, and the realization is profoundly bearish for the precious metals sector. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Bubble stocks...

Recovery Of Gold (XAUUSD), Will NZDUSD Meet The Sell-off? UK 100 Keeps Quite High Values

John Benjamin John Benjamin 08.02.2022 08:48
XAUUSD breaks resistance Gold continues to recover as the US dollar treads water. The previous fall below the daily support at 1785 had put the bulls on the defensive. The RSI’s oversold signal attracted some buying interest and prompted sellers to cover, driving up the price. The rebound has since gained traction after the metal rallied above the support-turned-resistance at 1817. In fact, the bullish breakout may raise momentum and open the door to the recent peak at 1850. On the downside, 1795 is a major support to keep buyers committed. NZDUSD remains under pressure The New Zealand dollar edges lower amid cautious market sentiment at the start of the week. The pair previously bounced off September 2020’s low around 0.6530. However, 0.6700 on the 20-day moving average so far has proven to be a tough hurdle. A drop below the fresh support (0.6630) indicates that the directional bias remains bearish. And sellers would be eager to fade another rebound. 0.6590 is the closest support. A break below 0.6530 could trigger a new round of sell-off towards 0.6400. UK 100 awaits breakout The FTSE 100 rallies supported by solid performance in the commodity sector. The recent rebound hit resistance near the January peak at 7640. Narrowing consolidation and higher highs suggest increased buying pressure. A bullish breakout would flush sellers out and attract momentum traders, firing up volatility in the process. This would be a strong bullish continuation signal. 7460 is a fresh support if the market remains indecisive. Its breach could extend the correction back to 7250.
Bears Are Watching Crude Oil (WTIC) Carefully As It's Very Close To $91

Bears Are Watching Crude Oil (WTIC) Carefully As It's Very Close To $91

Monica Kingsley Monica Kingsley 08.02.2022 15:34
S&P 500 bulls missed the opportunity, but credit markets didn‘t turn down. Yesterday‘s pause is indicative of more chop ahead – the risk-on rally can‘t be declared yet as having run out of steam, no matter the crypto reversal of today. Bonds are in the driver‘s seat, and the dollar is also cautious – unless these move profoundly either way, the yesterday described S&P 500 reprieve can still play out even if: (…) The bottom isn‘t in, but I‘m looking for a little reprieve next. The degree to which bonds were sold off vs. stocks, hints that we would have lower to go still, ultimately bottoming around late Feb, perhaps even early Mar. Increasingly more Fed hikes are being priced in, and Friday‘s good non-farm payrolls figure is reinforcing these expectations. As for the immediate plan for Monday‘s session, I think the 4460s would hold on any retest, should we get there at all. The bulls have a very short-term advantage, then as mentioned above, selling would resume, and around May or June we could get the answer as to whether we‘ve been just consolidating or topping out. The 4,460s are still holding while commodities look to be consolidating today. As the dollar is up somewhat, bonds would have to face opening headwinds – the effect upon tech would be telling. I‘m still looking for downswing rejection in stocks while precious metals would hold up better than commodities today. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook As stated yesterday, S&P 500 bulls aren‘t yet winning, but have a good chance to suck in those who believe the tech bottom is in – tech bears would get another opportunity in the not too distant future. Credit Markets HYG gave up the opening strength, and the bulls are likely to get under pressure soon – it‘s that yesterday‘s session lacked volume, thus interest of the buyers. The clock is ticking. Gold, Silver and Miners Precious metals keep refusing to make lower lows – that‘s the most important aspect of their tempered ascent. And price gains would accelerate later in 2022, which would come on the Fed‘s abrupt U-turn. Crude Oil Now, crude oil bulls did pause, but the dip isn‘t likely to reach too far – I still wouldn‘t count on pullback towards $88 or lower really – oil stocks would have to turn decidedly down first. Copper Copper is getting cautious, and would probably decline should the commodities pause continue – no matter what other base metals would do at the same time. Still, that‘s internal strength in the waiting, similarly to the precious metals strength. Bitcoin and Ethereum The crypto break higher ran out of steam, warning of a rickety ride ahead – not just in cryptos. Things can still get volatile. Summary S&P 500 bulls haven‘t lost the opportunity to force higher prices, but need to repel the upcoming intraday flush that can come today, and possibly even continue tomorrow. Yes, instead of seizing upon the chance, bonds have merely paused, creating a perfect environment for whipsawish trading today – I‘m still expecting Friday‘s lows to hold on a closing basis, but I‘m not ruling out a fake breakdown first. The very short-term outlook is simply choppy until the bond market upswing kicks in in earnest. And that would provide more fuel to precious metals and commodities while pressuring the dollar – seems though we would have to wait for a while to see that happen. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Crypto Airdrop - Explanation - How Does It Work?

February 8th, 2022, Crypto Chartbook

Korbinian Koller Korbinian Koller 08.02.2022 20:48
Stacking bitcoins winning edges It is not the number of edges that get it low risk. And again, there are no hidden magic formulas. What works well is covering multiple aspects in stacking one’s edges: Market behavior Time of day Oscillators for ranging markets Indicators for trending markets Supply/demand zone identification (VWAP=volume weighted average price, in addition to support and resistance lines) Inter-market relationships Leading/lagging (relative strength within a sector or group) Candlestick pattern Volume Time frame relationships Action-reaction principle News Day of the week Swing leg count MAE (=maximum adverse excursion) Mathematical/statistical edges like standard deviation Your list might look vastly different but should include tools that cover the principal variants of market behavior (ranging, trending, slow/fast price action, liquidity, time, volume, transactions). Investopedia is a good research tool for finding definitions and explanations of the various available technical tools. BTC in US-Dollar, daily chart, how we stack odds in our favor: Bitcoin in US-Dollar, daily chart as of February 8th, 2022. Our previous chart book release described fundamental reasons for being bullish on bitcoin, which we stack in a similar principled fashion. We pointed out that we were looking for low-risk entry points to build up a long-term position for bitcoin. Such a low-risk opportunity arose on February 3rd, last week. We had the following edges stacked at the time of entry (green arrow): General price strength (directional yellow line channel) Previous day retracement (action-reaction principle) Small range Doji for tight stop and possible reversal indication VWAP (blue histogram to the right of the chart) indicating a supply zone Scheduled ECB news item out of the way Time of week Time of day (we entered near the close of the daily candle) Extended from the mean (blue line, standard deviation) Commodity Channel Index (CCI). A momentum-based oscillator useful in congested sideways channels, gave the prior day to execution indication of a long entry (yellow arrow) We posted our entry in real-time in our free Telegram channel. Within a 24-hour period, we could profit on half of the position size for a gain of 8.73%. We also posted this first profit-taking target in real-time in our free Telegram channel. Our quad exit strategy provides income-producing revenues like this but, even more, eliminates risk. Consequently, this approach supports trading the remaining position with psychological ease for the intended long-term holding period. Hence, even starting out as a a short-term trade, the last 25% of the initial position can become a long-term invest. BTC in US-Dollar, weekly chart, well-positioned: Bitcoin in US-Dollar, weekly chart as of February 8th, 2022. With previous entries at recent lows established in much the same manner, we are now exposed to the market with seven remaining rest positions at zero risk. Such an approach can afford to negate whether this will be the long-term turning point or not. Profits have been made. Should our plan pan out, then the remaining exposed capital will lead to further profits. Otherwise, this remaining position size will stop out at breakeven entry level. The weekly chart shows now a confirmed situation of a weekly bar takeout. For most traders this is an entry signal while we were already well established. We are playing with the market’s money and profits banked. With this time frame alignment more money is expected to join the long side. The chart also illustrates the favorable risk/reward-ratio to the right of the chart.   BTC in US-Dollar, monthly chart, early bird: Bitcoin in US-Dollar, monthly chart as of February 8th, 2022. A glance at the monthly chart shows we are positioned very early and aggressively for this time frame. Nevertheless, as soon as prices might reach US$48,000, we will find ourselves here as well time frame aligned with a bar takeout. Green numbers show our entry prices for January with two entries and February with five entries. Should prices move upwards in our favor, we would take again partial profits near the red horizontal trend line slightly below all-time highs. The remaining positions stays in place for a possible breakout to all-time new highs. Too late if you are not positioned yet? No! This continuous flow of adding low-risk entry trades followed by partial profit-taking allows participating at all stages of market swings. Stacking bitcoins winning edges: In short, you want to have a clear instruction sheet on what to do in whatever market condition bitcoin throws at you. With a set of tools broadly covering all these variants and measuring them, you will be able to act without hesitancy. Then you can hope for the best, since you planned for the worst. Risk control is the core of each advanced trading approach! We aim to keep it simple, like a card counter, which supports executing high probability winning trades. At the same time, the crowd is confronted by surprising news or fast-moving markets. They use reactionary, inappropriate execution, which in turn creates losing trades. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on precious metals and cryptocurrencies, you can also subscribe to our free newsletter. Disclosure: This article and the content are for informational purposes only and do not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|February 6th, 2022|Tags: Bitcoin, Bitcoin bounce, Bitcoin bullish, bitcoin consolidation, crypto analysis, Crypto Bull, crypto chartbook, DeFi, low risk, quad exit, technical analysis, trading education|0 Comments About the Author: Korbinian Koller Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
Will Sandbox (SAND) Reach $5 In The Near Future?

Will Sandbox (SAND) Reach $5 In The Near Future?

FXStreet News FXStreet News 08.02.2022 16:08
Sandbox price action has broken above $4.72 but fades in early trading today. SAND price action is at the intersection of a red descending trend line and the historical pivot level. Expect current favourable tailwinds to boost confidence for bulls leading to a break to the upside and new all-time highs. Sandbox (SAND) price action broke above $4.72 yesterday and saw bulls trying to test $5.0. But the intersection of the descending trend line and a pivot level proved to be too heavy and pushed price action back below the $4.72 historical level. Expect bulls to keep supporting as more tailwinds coming from geopolitics support the case for more upside potential towards $6.0. Sandbox price targets $6 for this week Sandbox price looked set to finally end the downtrend since November 25. The intersection of the red descending trend line dictating the downtrend and the historical $4.72 pivotal historic level from November 23, proved too big of a hurdle for price action to close above yesterday. Instead, bulls decided to take profit with price fading as we speak. SAND does not need to one-directionally tank further but will probably see bulls keeping price close to the pivotal $4.72 level. With several favorable tailwinds, such as positive news from talks between Putin and Macron, investors look to be back on the scene and putting some money on the table to invest in risk assets like cryptocurrencies. This will filter through in the demand side volume and will provide the needed impetus to punch through $4.72 again and close above, putting an end to the downtrend and targeting $6.0 this week. SAND/USD daily chart The resistance double whammy at the aforementioned intersection could prove too big of a temptation for profit-taking, and result in the Relative Strength Index dipping further, below 50, and translate into further downside for the altcoin towards $4.28, making it even harder to try for a daily close above $4.72. That could lead to yet more liquidation and see a return to a base level around $3.50.
Stocks: Is $4,500 The Current S&P 500's "Target"

Stocks: Is $4,500 The Current S&P 500's "Target"

Paul Rejczak Paul Rejczak 08.02.2022 15:33
  The S&P 500 index remains close to the 4,500 level following last week’s retreat. Was this just a downward correction? The broad stock market index lost 0.37% on Monday, as it continued to fluctuate within a short-term consolidation. The broad stock market’s gauge retraced some of its recent rally, as it fell to the local low of 4,451.50 on Friday. The market found a short-term bottom after reversing from last Wednesday’s local high of 4,595.31. This morning the S&P 500 index is expected to open 0.2% lower. We will likely see more consolidation along the 4,500 level. The nearest important resistance level remains at 4,540, market by the recent local highs. The resistance level is also at 4,600. On the other hand, the support level is at 4,400-4,450. The S&P 500 continues to trade below the November-January consolidation, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq 100 Remains Relatively Weaker The technology Nasdaq 100 index followed a similar path last week, as it retraced some of the rally. It remains relatively weaker than the broad stock market. The support level is at 13,800-14,000, and the resistance level is at 15,000-15,200. Futures Contract – Short-Term Consolidation Let’s take a look at the hourly chart of the S&P 500 futures contract. It broke above the short-term downward trend line a week ago before rallying up to around the 4,600 level. It’s trading along the 4,500 level after backing from the Wednesday’s high of 4,586. The market remains close to the resistance level of its previous local lows, but there have been no confirmed negative signals so far. So in our opinion, no positions are currently justified from the risk/reward point of view. (chart by courtesy of http://tradingview.com): Conclusion The S&P 500 index trades within a short-term consolidation following the decline from last week’s Wednesday’s local high. The market will likely extend its consolidation, as investors will be waiting for the Thursday’s Consumer price index release. The quarterly earnings season is mostly over now, and there is still an uncertainty concerning Russia-Ukraine tensions. Here’s the breakdown: The S&P 500 index will likely trade within a consolidation ahead of the important Thursday’s consumer inflation number release. In our opinion, no positions are currently justified from the risk/reward point of view. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Having A Look At The Markets Considering Tensions, COVID-19 And National Banks Decisions

EURUSD Keeps Plain Line, US 30 With A Bounce, GBPUSD Gains A Bit

John Benjamin John Benjamin 09.02.2022 08:51
EURUSD hits resistance The euro fell back after ECB President Lagarde tried to cool rate hike expectations. The rally came under pressure at the January peak of 1.1480. The RSI’s overextension at this daily resistance prompted momentum buyers to cash in. A combination of profit-taking and fresh selling may drive the exchange rate lower. Short-term sentiment remains upbeat though unless the single currency drops below the origin of its bullish push at 1.1270. A recovery above 1.1480 could pave the way to last October’s high at 1.1690. GBPUSD consolidates gains The sterling turns higher as traders price in an increasingly hawkish Bank of England. A break above 1.3520 forced sellers to cover some of their positions. However, the pound’s rally came to a halt in the supply zone around 1.3620. The RSI’s overbought situation and bearish divergence suggest softness in the underlying momentum. The pair found bids on the 50% Fibonacci retracement level (1.3490), which sits in the aforementioned supply area. A new rally may propel the pair to the daily resistance at 1.3750. US 30 bounces higher The Dow Jones 30 inches higher supported by better-than-expected earnings. The index steadied after successive breaks above 34800 and 35450. Nonetheless, the recent recovery slowed down on the 30-day moving average, a sign of a lingering cautious mood. 34500 is a key support to keep the rebound relevant. A bearish breakout could extend the correction to 33800. On the upside, a rally above 35700 could attract momentum traders and initiate a bullish reversal to 36500.
NIO - Will It Support The Rise Of Chinese Tech Stocks?

NIO - Will It Support The Rise Of Chinese Tech Stocks?

FXStreet News FXStreet News 08.02.2022 16:08
NIO stock gets a strong rating from latest Barclays research. NIO remains bearish and is down 25% year to date. NIO and other Chinese EV names remain in growth mode as the latest delivery data showed. NIO stock remains mired as it ended Monday virtually flat. The stock is down over 40% from three months ago as Chinese names see international investors flee on regulatory concerns. NIO Stock News It has been a turbulent time for holders of Chinese tech stocks. Alibaba's ANT Group spin-off set things off. Then the DIDI delisting not long after its IPO added to woes. Then a host of regulatory crackdowns was the final straw for international investors who bailed out of the names en masse. This is despite the EV names in particular remaining on track from a growth perspective as all have posted strong delivery data. While January deliveries slowed from December, the yearly growth rates still are impressive. January is traditionally the slowest month of the year in China though due to the lunar new year. NIO for example delivered 7.9% fewer vehicles in January versus December. On a yearly basis, January deliveries were 33.6% higher. This was replicated across many other Chinese EV names. Now Barclays has picked up the theme as it issues a bullish note this morning. "We believe that the rapid adoption of EVs around the world and booming EV sales have presented China’s EV makers a rare opportunity to not only take a sizable market share of the domestic auto market – the largest in the world with about 25-30% global share by units sold per annum – but also build a dominant position on the world stage." Barclays put a $34 price target on the shares. This does highlight the potential growth potential of Chinese tech stocks and the EV space in particular. We question whether investors will reenter, however, having been let down previously. Fool me once, shame on you, fool me twice... Ok, let's not have another George W. Bush moment! The point is a valid one. It will likely take more than analyst upgrades to tempt investors back to the space. Goldman, the king of investment banks, has previously been strongly bullish on NIO and to no avail. It will take a series of strong earnings and relative calm in terms of regulatory concerns to eventually tempt investors back. NIO Stock Forecast The recent spike lower did fill the gap from back in October 2020. The market just loves to fill gaps. We also note this spike lower created a shooting star candle, a possible reversal signal. There is already a bullish divergence from the Relative Strength Index (RSI) as shown. The area around $27.34 is the first resistance. Getting back above indicates the bearish trend may finally be slowing. That would then bring NIO into a range-bound zone from $27 to $32. Only breaking $33.80 from January 3 ends the downtrend. Support is at $14 from the strong volume profile. Look for an RSI breakout as that could signal more gains. The RSI has been shrinking in range and may test an upside breakout. NIO 1-day chart
DJI (Dow Jones) And SPX (S&P 500) Are Likely To Recover Slowly

DJI (Dow Jones) And SPX (S&P 500) Are Likely To Recover Slowly

Alex Kuptsikevich Alex Kuptsikevich 09.02.2022 09:26
Stock markets continue their shaky recovery. On Tuesday, intraday trading patterns in US equities point to a buying trend on declines. The S&P500 and Dow Jones indices rebounded from their 200-day simple moving average. Both indices were below those levels in the second half of January. Still, by the beginning of February, they managed to get back above them on the substantial buying activity of the retail investors. Yesterday's stock market dynamics slightly reduced the tension. Increased buying at the end of the session indicates a buying mood for professional market participants. There have been increasing reports from US investment banks that markets have already priced in a tight monetary policy scenario and will not press equity prices further. Moreover, BlackRock recently noted that markets had priced in overly hawkish expectations. The bond market also looks oversold, declining in previous weeks at the fastest pace since 2008. This is a good reason, at least for a technical rebound. In addition, buyers are supported by strong economic and wage growth, promising corporate earnings stability for the foreseeable future. The switch to a monetary tightening phase turns the market into a more frequent and deeper corrective pullback mode but does not trigger a bear market before a rate hike even begins. Strong fundamentals support a bullish technical picture, with a recovery from the strongest oversold S&P500 RSI and the ability to pop above the 200-day average. From this perspective, the January drawdown has cleared the way for growth, recharging buyers. On an equity level, we can see stabilisation and sharp upward moves in stocks that have been weak since June and shone in the pandemic before that: Peloton, Netflix, GameStop. In theory, this could be a dead cat bounce, but it reduces the selling pressure in blue-chip stocks such as Apple, Amazon, Microsoft, Google and straightens out the overall market sentiment.
Crypto Airdrop - Explanation - How Does It Work?

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Cryptos to retrace before the bull run

FXStreet News FXStreet News 09.02.2022 16:19
Bitcoin price slows down its ascent after flipping the $42,748 hurdle into a foothold. Ethereum price contemplates a retracement after facing the 50-day SMA at $3,208. Ripple price looks ready for consolidation after a 51% ascent over the past four days. Bitcoin price rally is slowing, allowing bulls to take a breather before the next leg-up. While some might argue the short-term outlook looks bearish – due to the flash crash in January, the bigger picture reveals cryptocurrency (https://www.fxstreet.com/cryptocurrencies) markets still have the potential to go higher. A Wells Fargo report published in February reveals that cryptocurrency adoption is growing exponentially and, in many cases, resembles the growth curve of internet adoption. The American financial corporation even goes on to state the crypto sector could soon exit the initial phases of adoption and enter “an inflection point of hyper-adoption.” Wells Fargo Report: Internet usage history vs crypto users Bitcoin price at a decisive moment Bitcoin price rallied 25% in the last four days and set up a swing high at $45,539.(https://www.fxstreet.com/cryptocurrencies/news/bitcoin-begins-correction-after-45k-rejection-where-can-btc-price-bounce-next-202202081914) The rally rippled out, triggering copycat moves in other altcoins and the cryptocurrency market in general. Yet BTC failed to produce a daily candlestick close above the breaker’s upper limit at $44,387. So, as a result, the bearish outlook is still in play. Investors should be prepared for anything between a minor retracement and a full-blow bear trap. An optimistic scenario will likely see BTC retest the weekly support level at $39,481 before triggering the next leg-up. A more pessimistic scenario, however, would speculate that Bitcoin price could crash to $34,752. A breakdown of this support floor could be the key to triggering a crash to $30,000 or lower. BTC/USD 1-day chart While things look on the fence for Bitcoin price, (https://www.fxstreet.com/cryptocurrencies/bitcoin) a daily candlestick close above $44,387 will invalidate the bearish thesis. A bullish regime, however, will only kick-start if BTC produces a daily candlestick (https://www.fxstreet.com/rates-charts/chart/candlestick-patterns) close above $52,000.   Ethereum price takes a breather Ethereum (https://www.fxstreet.com/cryptocurrencies/ethereum) price seems to be undergoing a pullback (https://www.fxstreet.com/cryptocurrencies/news/ethereum-price-holds-above-3k-but-network-data-suggests-bulls-may-get-trapped-202202090153) as it faces off with the 50-day Simple Moving Average (SMA) at $3,208 while still hovering inside a bearish breaker, extending from $2,789 to $3,167. A rejection here could lead to a retracement to $2,812, where buyers have a chance at restarting the uptrend. Assuming the bullish momentum picks up, there is a good chance ETH could slice through the $3,208 and make a run for the $3,413 hurdle. The local top for Ethereum price could be capped around the convergence of the 50-day and 100-day SMAs at roughly $3,600. ETH/USD 1-day chart On the other hand, if Ethereum price fails to stay above $2,812, it will indicate that buyers are taking a backseat. This development will invalidate the bullish scenario and trigger a crash to the weekly support level at $2,324. Ethereum price could liquidate bulls if ETH falls below $3,000 Ripple price to reestablish directional bias Ripple price broke out of its ten-day consolidation (https://www.fxstreet.com/cryptocurrencies/news/xrp-price-could-easily-return-to-1-under-one-condition-202202081437) and rallied 51% in just four days. This run-up sliced through the $0.740 and $0.817 hurdles, flipping them into support levels. While this climb was impressive, XRP price is likely to retrace as investors begin to book profits. The resulting selling pressure could push Ripple price down to the $0.740 support level where buyers can band together for a comeback. In some cases, the U-turn might not arrive until a retest of the $0.595 to $0.632 demand zone. Regardless, investors can expect XRP price to run up to $1 and collect the liquidity resting above it. XRP/USD 1-day chart On the contrary, if the Ripple price fails to stay above the $0.595 to $0.632 demand zone, it will reveal the lack of bullish momentum and hint that a further descent is likely. In this case, XRP price will sweep below the $0.518 support level to collect the sell-side liquidity resting beneath. XRP price could easily return to $1 under one condition
Peloton Interactive (PTON) Stock News and Forecast: And just like that, it's back

Peloton Interactive (PTON) Stock News and Forecast: And just like that, it's back

FXStreet News FXStreet News 09.02.2022 16:19
Peloton shares continue to be the most discussed stock on mainstream and social media. Two straight days of 20%-plus gains for PTON stock. The new CEO gets just the start he would have wanted. It is not exactly reassuring to your confidence when you step down as CEO of a company and the stock immediately explodes higher. Investors clearly had enough of Peloton's (PTON) former CEO John Foley. New man Barry McCarthy hits the ground running despite some mixed commentary from the analyst community this morning. Peloton Stock News Peloton reported earnings on Tuesday. The stock had already surged on news (https://www.fxstreet.com/news) of a new CEO and continued reports that the company may be in the sights of big tech eyeing a potential takeover for the beleaguered fitness company. Revenue came in at $1.13 billion below the $1.15 billion estimate. Earnings per share (EPS) came in below estimates at $-1.39 versus the $-1.20 estimate. The outlook was also weak with Peloton seeing full-year 2022 revenue at $3.8 billion, while analysts had forecast $4 billion. Following the results, Stifel maintained its buy rating on PTON with a $45 price target. Macquarie maintained its outperform rating with a lowered $60 price target, while Barclays also lowered its price target to $60 as well. Bank of America said, "Our estimates that assumed price cuts would drive new demand were too optimistic." BofA has a $42 price target for the stock. Peloton shares had already been strongly ahead in Tuesday's premarket before the earnings release. This was due to the new CEO and a cost-cutting plan including laying off 2,800 employees. The list of potential buyers for Peloton continued to grow as speculation mounted. Potential acquirers include virtually every major fitness company, numerous big tech firms, Berkshire Hathaway and SoftBank. We do question whether in particular big tech would get much benefit out of the acquisition. Fitness has been a big part of the wearable market, and Peloton's subscribers are its value, but do Apple, Amazon and Google really struggle that much for users? Sports companies mentioned include Nike (NKE) and Adidas (ADDYY). These may make more sense as the subscribers could generate more value, add-ons and ancillary sales. Peloton Stock Forecast The weekly chart (https://www.fxstreet.com/rates-charts/chart) gives us all the information we need going back to the launch in September 2019. Peloton (PTON) rallied all the way up to $171 this time last year before steadily falling back. The stock has now totally retraced all of the pandemic gains and then some. In that respect, investors may be tempted to buy into the name as subscribers in 2019 totaled just over 500,000, whereas currently Peloton has 2.77 million subscribers. From the weekly chart, we can see the power of volume gaps we often talk about. Peloton broke sharply once it entered the light volume zone from $81 to $37. Now it has stabilized at a high volume zone and the point of control. This does set a potential base for the stock. (https://www.fxstreet.com/markets/equities) Peloton (PTON) chart, weekly The daily chart below shows we have had a bullish divergence on the Relative Strength Index (RSI) since the last earnings despite the share price continuing to slide. $23 remains support with first resistance at $46. This latest move is likely to calm down unless more takeover talk surfaces. If the price move does calm, then holding above $30 is key to keeping the bottom in place. Peloton (PTON) chart, daily  
Considering Portfolios In Times Of, Among Others, Inflation...

More Profits Ahead

Monica Kingsley Monica Kingsley 09.02.2022 15:54
S&P 500 bulls took the opportunity yesterday amid mild credit market support. Looks like more fireworks are to come – the risk-on turn is merely starting. Not only financials, but also tech welcomed higher yields – it seems that the positive seasonality of 2nd to 3rd week of Feb, is working. We have quite a way to go still on the upside – 4,600s are waiting, and it remains to be seen how far in the 4,600 – 4,700 range stocks make it. Consumer discretionaries are outperforming staples, and energy isn‘t cratering – the brief commodities reprieve (don‘t look though at copper, which seems preparing a nice upside move, or crude oil‘s shallow dip) supports the stock market advance. Precious metals are rising strongly – both thanks to inflation expectations not budging much, and the expected copper upturn. Not even cryptos are plunging. The open S&P 500 and oil profits can keep on rising. Looks like the markets are slowly positioning for yet another hot inflation number tomorrow. How many times lately have there been expectations that high CPI data would sink stocks – but these rallied instead? Thursday is likely to turn out similarly – I‘m not looking for the stock market rally to top out tomorrow. The Mar FOMC is still quite a few weeks away, 50bp rate hike fears notwithstanding. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bulls have made the opening step, and look ready to extend gains. Even volume has returned a little, but importantly, sellers were nowhere to be seen – and that‘ll likely be the case today as well. Credit Markets HYG couldn‘t keep the opening gains, but junk bonds still did better than their quality counterparts. Anyway, the HYG weakness looks likely to be reversed (to some degree) today. Gold, Silver and Miners Precious metals are firmly on another upleg – and miners strength is confirming that. When inflation turns out more stubborn than generally appreciated, and bond yields don‘t catch up nearly enough, precious metals would like that. Love that. Crude Oil Now, crude oil bulls did pause, but the dip isn‘t likely to reach too far – I still wouldn‘t count on pullback towards $88 or lower really – this correction is more likely to be in time than in price. Copper Copper is clearly refusing to decline – its upswing looks to be a question of shortening time only. Likewise the commodities reprieve would be reversed shortly. The red metal‘s price action coupled with precious metals one, is very nice to see – for the fruits it would bring. Bitcoin and Ethereum Cryptos aren‘t weakening – they look to be pausing in the upswing only. How long would they need to consolidate before continuing the attempt to go higher? Summary S&P 500 bulls have a firm grip on higher prices – we‘re looking at another green day today. And if it‘s accompanied by the turning bonds, then all the better. Tech has risen, oil is a little down while sectoral breadth improves – the conditions are in place for S&P 500 to overcome 4,600. The risk-on rally hasn‘t yet run out of time, and the Mar FOMC is still far away. Upgraded rate hike prospects are being increasingly absorbed by the markets, and stocks don‘t look spooked at the moment. The bears‘ time would still come though, but let‘s first enjoy the gains our timely positioning is bringing. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Inflation: 5.9% Increase Of Year To Year US Core CPI?

Inflation: 5.9% Increase Of Year To Year US Core CPI?

Alex Kuptsikevich Alex Kuptsikevich 10.02.2022 13:21
US inflation data for January is in the spotlight in the markets today. The annual growth rate is expected to break 40-year records, reaching 7.3% compared with 7.0% in December. Higher oil prices in recent weeks will reinforce the general price index. But more important in this case may be the core CPI, where prices are expected to rise by 0.5% m/m and 5.9% y/y. Investors and traders expect this report to determine the Fed's next move in mid-March. Rising inflation above expectations and new signs that the inflation trend is taking root could reinforce dollar purchases as markets will immediately put into the price a higher chance of a 50 point rate hike in March and set up a determination for further hikes. And that promises to be bad news for the markets. Signs that inflation is close to its peak and on a downward path promises to be great news for stock markets and shift the balance towards dollar selling. Interest in equities increases when investors see signs of a sustained turnaround in inflation as they stop fearing the Fed's sharply hawkish stance on suppressing price growth.
AUDUSD Gets Rid Of The Recent Resistance, EURGBP Flows Calmly And USOIL Hovers Around $90

AUDUSD Gets Rid Of The Recent Resistance, EURGBP Flows Calmly And USOIL Hovers Around $90

John Benjamin John Benjamin 10.02.2022 08:47
AUDUSD breaks higher The Australian dollar climbs as traders wager on a hawkish shift from the Reserve Bank of Australia. On the daily chart, a break above the 30-day moving average suggests improved sentiment in the short term. The pair extended its gains after it broke the supply area around 0.7170. As sellers scramble to cover their bets, driving up bids, the rally is heading to the next resistance at 0.7210. The RSI’s overbought situation may cause a temporary pullback with 0.7110 as the first support. EURGBP seeks support The euro consolidates gains amid mixed messages from the ECB. The pair found support at February 2020’s low at 0.8290, and a bullish MA cross on the daily chart suggests a potential turnaround. A break above the daily resistance at 0.8405 has put the single currency back on track. An overbought RSI led momentum traders to take profit. The current pullback is testing the 38.2% Fibonacci retracement level (0.8405) which used to be a resistance. 0.8475 is the main hurdle for the reversal to gain traction. USOIL tests support WTI crude bounces higher after the EIA reported a sharp drop in US inventories. Price action is looking to consolidate its gains above the psychological level of 90.00. Sentiment remains upbeat though the bulls need to take a breather after the latest vertical ascent. 88.00 on the 20-day moving average is the immediate support. An oversold RSI may attract buying interest. A deeper retracement would test 85.00. A recovery above 92.30 could trigger momentum buying once again and resume the rally towards 95.00.
Fed Acted, Now It's Markets' Turn. What's The Next Step Of Crude Oil?

Fed Acted, Now It's Markets' Turn. What's The Next Step Of Crude Oil?

Monica Kingsley Monica Kingsley 10.02.2022 15:58
S&P 500 upswing continued amid increasing credit market support. Risk-on, finally – and commodities are on fire again, with precious metals awaiting their time in the spotlight. That‘s the big picture view as markets keep digesting the recently upgraded hawkish talk of the Fed. Or more precisely in my view, they‘re sniffing out the inevitability of the Fed having to make a U-turn later this year. Meanwhile, any temporary hint of lower Treasury yields – the reprieve is arriving – is eagerly embraced by the tech while value is disregarding that. As a result, S&P 500 market breadth is improving, and as stated yesterday, the positive seasonality of 2nd to 3rd week of Feb, is working. Today‘s CPI data would show inflation isn‘t relenting – even White House warned about hot year on year figure coming. Coupled with the tightening job market, the question is now what remains of the budding S&P 500 upswing and bond market reprieve. It‘s becoming increasingly clear that the Fed would have to really move, and that inflation is biting and not exactly sinking input costs. That‘s where we have the cost-push inflation I talked relentlessly over many quarters last year, and wage pressures joining at the hip. It‘s really about letting copper and oil profits keep growing now, while taking off S&P 500 long ones off the table. Done, and PMs are to join next. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bulls had a great day, and need a solid close today against the poor inflation data. This isn‘t though likely to happen unless bonds hold up well during the regular session. Mission impossible, almost. Credit Markets HYG extended gains yesterday, and would need to defend them today. What remains of the risk-on posture, is key to determining the stock market rally longevity vs. waning power. Gold, Silver and Miners Precious metals are firmly on another upleg – I‘m not looking for setbacks during the opening selling pressure to last. The direction is firmly up. Crude Oil Crude oil is still pausing, but at the same time the bulls are readying a response. I‘m looking for continued trading in the recent range, followed by a break higher. Copper Copper is finally on the move, and the high volume speaks plenty about the buying pressure. I‘m looking for dips to be bought – I‘m not expecting a stampede of the bears taking advantage of a „shorting opportunity“. Bitcoin and Ethereum Cryptos aren‘t plunging, but the test of the bullish resolve is arriving today – let‘s see what kind of reversal it turns into. The volume looks solid, so I count on more than a daily setback as a minimum. Summary S&P 500 meets unpleasantly high inflation, which is forcing the hand of the Fed. Stocks are going to have a hard time recovering, and the bullish window of opportunity may be drastically shortened. Good to have taken profits off the table automatically through the trailing stop-loss – commodities would be more resilient. That‘s where real gains are – in real assets, as inflation is returning to the spotlight. Rightfully so as the Fed is desperately behind the curve, and precious metals need to fully get that. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
The Question Is How Will Price Of Gold Act In Times Of ECB Meeting

The Question Is How Will Price Of Gold Act In Times Of ECB Meeting

Arkadiusz Sieron Arkadiusz Sieron 10.02.2022 16:22
  Lagarde opened the door to an interest rate hike, which gave the European Central Bank a hawkish demeanor. Does it also imply more bullish gold? The ECB has awoken from its ultra-dovish lethargy. In December 2021, the central bank of the Eurozone announced that its Pandemic Emergency Purchase Program would end in March 2022. Although this won’t also mean the end of quantitative easing as the ECB continues to buy assets under the APP program, the central bank will be scaling down the pace of purchases this year. Christine Lagarde, the ECB’s President, admitted it during her press conference held last week. She said: “We will stop the Pandemic Emergency Programme net asset purchases in March and then we will look at the net asset purchases under the APP.” She also left the door open for the interest rates to be raised. Of course, Lagarde did not directly signal the rate hikes. Instead, she pointed out the upside risk of inflation and acknowledged that the macroeconomic conditions have changed: We are going to use all instruments, all optionalities in order to respond to the situation – but the situation has indeed changed. You will have noticed that in the monetary policy statement that I just read, we do refer to the upside risk to inflation in our projection. So the situation having changed, we need to continue to monitor it very carefully. We need to assess the situation on the basis of the data, and then we will have to take a judgement. What’s more, Lagarde didn’t repeat her December phrase that raising interest rates in 2022 is “very unlikely”. When asked about that, she replied: as I said, I don’t make pledges without conditionalities and I did make those statements at our last press conference on the basis of the assessment, on the basis of the data that we had. It was, as all pledges of that nature, conditional. So what I am saying here now is that come March, when we have additional data, when we’ve been able to integrate in our analytical work the numbers that we have received in the last few days, we will be in a position to make a thorough assessment again on the basis of data. I cannot prejudge what that will be, but we are only a few weeks away from the closing time at which we provide the analytical work, prepare the projections for the Governing Council, and then come with some recommendations and make our decisions. It sounds very innocent, but it’s worth remembering that Lagarde is probably the most dovish central banker in the world (let’s exclude Turkish central bankers who cut interest rates amid high inflation, but they are under political pressure from Erdogan). After all, global monetary policy is tightening. For example, last week, the Bank of England hiked its main policy rate by 25 basis points and started quantitative tightening. Even the Fed will probably end quantitative easing and start raising the federal funds rate in March. In such a company, the ECB seems to be a reckless laggard. Hence, even very shy comments mean something in the case of this central bank. The markets were so impressed that they started to price in 50 basis points of rate hikes this year, probably in an exaggerated reaction.   Implications for Gold What does the latest ECB monetary policy meeting mean for the gold market? Well, maybe it wasn’t an outright revolution, but the ECB is slowly reducing its massive monetary stimulus. Although the euro area does not face the inflationary pressure of the same kind as the US, with inflation that soared to 5% in December and to 5.1% in January (according to the initial estimate), the ECB simply has no choice. As the chart below shows, inflation in the Eurozone is the highest in the whole history of euro. Additionally, in the last quarter of 2021, the GDP of the euro area finally reached its pre-pandemic level, two quarters later than in the case of the US. Europe is back in the game. The economic recovery strengthens the hawkish camp within the ECB. All of this is fundamentally bullish for gold prices. To be clear, don’t expect that Christine Lagarde will turn into Paul Volcker and hike interest rates in a rush. Given the structural problems of the euro area, the ECB will lag behind the Fed and remain relatively more dovish. However, German bond yields have recently risen, and there is still room for further increases. If the market interest rates go up more in Europe than across the pond, which is likely given the financial tightening that has already occurred in the US, the spread between American and German interest rates could narrow further (see the chart below). The narrowing divergence between monetary policies and interest rates in the US and in the Eurozone should strengthen the euro against the greenback – and it should be supportive of gold. As the chart above shows, when the spread was widening in 2012-2018, gold was in the bear market. The yellow metal started its rally at the end of 2018, just around the peak of the spread. On the other hand, if the divergence intensifies, gold will suffer. Given that Powell is expected to hike rates as soon as March, while Lagarde may only start thinking about the tightening cycle, we may have to wait a while for the spread to peak. One thing is certain: it can get hot in March! If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
Bear Came And Drove Out Gold Enthusiasts, Will Silver Decrease As Well?

Bear Came And Drove Out Gold Enthusiasts, Will Silver Decrease As Well?

Przemysław Radomski Przemysław Radomski 10.02.2022 15:14
  The market was up, but mining stocks chose to reverse. Meanwhile, gold sent a clear signal to investors. So, when everyone buys, what happens? The gold mining stocks and silver mining stocks have reversed, even though gold didn’t. The top for the former is likely in. Most developments regarding the precious metals and their immediate surroundings were a continuation of what we had seen in the previous days, but one thing was different. That one thing is particularly informative. It has trading implications, too. Without further ado, let’s jump into mining stocks. Gold miners fell. Even though they declined by just $0.06, it was profound. The miners were following gold higher during the early part of yesterday’s (Feb. 9) session, but they lost strength close to the middle thereof and were back down before the closing bell. If the gold price reversed and then declined during the day, that would have been normal. However, gold stayed up. It’s fairer to compare GDX to GLD than to compare GDX to gold continuous futures contracts, as the former have the same closing hours, so let’s take a look at what GLD did yesterday. There was no reversal. GLD simply stopped at its declining medium-term resistance line. Also, the general stock market was up yesterday. Consequently, gold mining stocks had no good reason to decline. In fact, they “should have” rallied. They didn’t – they reversed instead. This tells us that the buying power has either dried up or is drying up. When everyone who wanted to get into the market is already in it, the price can do only one thing (regardless of bullish factors) – fall. Those who are already in can then sell. Monitoring the markets for this kind of cross-sector performance is one of the more important gold trading tips. Look, I’m not saying that declines now are “guaranteed”. There are no guarantees in the markets. There might be buyers that haven’t considered mining stocks that would now enter the market, but history tells us that this is unlikely. Instead, declines are very likely to follow. Let’s focus on the GLD ETF chart one more time. As I wrote earlier, it approached its declining medium-term resistance line. Any small breakout here is likely to be invalidated just like what we saw previously in November 2021 and January 2022. This time, however, the volume is low, so gold might not have enough strength for a breakout, and it could decline right away. Junior mining stocks provide us with a perfect confirmation of the bearish narrative. I emphasized before that juniors hadn’t moved above their 50-day moving average, and that they stayed below their rising blue resistance line. Consequently – I wrote – the downtrend in them remained clearly intact. Yesterday’s reversal served as a perfect confirmation of the above. The previous breakdowns were verified in one of the most classic ways. The silver price has been quite strong recently, which is also something that we see close to the local tops. The reversals in mining stocks, the situation in gold, AND the situation in the USD Index together paint a very bearish picture for the precious metals market in the short and medium term. By “the situation in the USD Index”, I’m referring to the fact that it’s after its early-month reversal and right above its rising medium-term support line that was not successfully broken. Since the USD Index remains above its rising medium-term support line, the trend remains up. Therefore, higher – not lower – USD Index values are to be expected. All in all, it seems that gold, silver, and mining stocks are going to decline in the coming weeks (quite possibly days) and that we won’t have to wait too long for the next big decline to start. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Next Rate Increases In UK? Economy With A Small Up In Q4

Next Rate Increases In UK? Economy With A Small Up In Q4

Alex Kuptsikevich Alex Kuptsikevich 11.02.2022 09:48
The UK economy added 1% in the fourth quarter last year and is 6.5% higher than a year ago. The annual growth rate is declining as the low base effect fades away. In December, industrial production added 0.3% and moved into growth territory compared to the same month a year earlier. These are signs that the Bank of England's interest rate hike cycle has met the UK economy in pretty good shape. The British pound has been gaining support in the last two days on the declines in the area of 1.35 GBPUSD despite the impressive upward thrust of the dollar. This dynamic is explained by the fact that the Bank of England has as much potential to tighten policy. Locally the pound looks like a decent competitor to the dollar. The markets are pricing in that the Bank of England may raise the rate by 50 points at one of the following meetings, keeping the policy tightening gap with the Fed. And this is good news for the pound, which could also help reduce inflationary pressures.
S&P 500 Moved Up... Then Down... But Will Strengthen All In All?

S&P 500 Moved Up... Then Down... But Will Strengthen All In All?

Paul Rejczak Paul Rejczak 11.02.2022 15:27
  Stocks retraced their Wednesday’s advance yesterday. Was this a downward reversal, or just a correction within an uptrend? The S&P 500 index lost 1.81% on Thursday, Feb. 10 after gaining 1.5% on Wednesday, as investors reacted to higher-than-expected inflation number release. Investors fear that the rising inflation will lead to a faster tightening by the Fed. On Wednesday the index got close to its previous Wednesday’s local high of 4,595.31, and yesterday it fell to the 4,500 level (the daily low was at 4,484.31). This morning the market will likely open 0.2% higher after an overnight decline. We may see some more short-term uncertainty. For now, it looks like a flat correction or a consolidation within an uptrend from the Jan. 24 local low of 4,222.62. The nearest important resistance level remains at 4,550-4,600. On the other hand, the support level is at 4,450-4,500. The S&P 500 index is close to the previous Friday’s daily closing price, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Futures Contract Trades Along the 4,500 Level Let’s take a look at the hourly chart of the S&P 500 futures contract. It broke above the short-term downward trend line in late January before rallying up to around the 4,600 level. Since then, it has been fluctuating along the 4,500 level. The market remains at the resistance level of its previous local lows, but there have been no confirmed negative signals so far. So in our opinion, no positions are currently justified from the risk/reward point of view. (chart by courtesy of http://tradingview.com): Conclusion The S&P 500 index will likely extend its almost two-week long consolidation after rallying from the mentioned late January local low. So far, it looks like a consolidation within an uptrend. The quarterly earnings season is mostly over now, and there is still an uncertainty concerning Russia-Ukraine tensions. Here’s the breakdown: The S&P 500 index will likely open slightly higher this morning and we may see more fluctuations along the 4,500 level. In our opinion, no positions are currently justified from the risk/reward point of view. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Fed And BoE Ahead Of Interest Rates Decisions. Having A Look At Nasdaq, S&P 500 and Dow Jones Charts

Many Would Want To Know The Near Future Of S&P 500

Monica Kingsley Monica Kingsley 11.02.2022 15:57
S&P 500 upswing was rejected – the intraday comeback didn‘t succeed. Risk-off posture won the day, and the dust is settling. Day 4-5 of the rally‘s window of opportunity that I talked on Monday, is proving as a milestone. Hot CPI data has increased the bets on Mar 50bp rate hike to a virtual certainty, and asset prices didn‘t like that. Not just stocks across the board, but commodities likewise (to a modest degree only) gave up intraday gains, turning a little red. Cryptos too ended down – it had been a good decision to cash in solid open long profits in S&P 500, oil and copper. Fresh portfolio highs reached over this 12+ months period (details on my homepage): What‘s the game plan for today? As the dollar closed flat while yields rose, I‘m not ruling out a reflexive intraday rebound attempt – after all, the bears should rule in the 2nd half of Feb most clearly. As time passes, the rips would be sold into unless bonds and tech can catch a solid bid. With focus on inflation, that‘s unlikely. Medium-term S&P 500 bias continues being short while commodity dips are to be cautiously bought. Crude oil looks to need to spend a bit more time around $90 while copper defending the low $4.50 is equally important. While silver didn‘t rise by nearly as much as the red metal did, it is down approximately as much in today‘s premarket – the white metal would recover on a less headline heavy day. Remember that PMs are trading sideways to up, with decreasing sensitivity to rising 10-year yield, and have done historically well when rate hikes finally start. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 momentum has sharply shifted to the downside, and today‘s recovery attempts are likely to be sold into. I‘m keeping a keen eye on bonds, tech and risk-on in general – not expecting miracles. Credit Markets HYG keeps showing the way, resolutely down as of yesterday. With rising yields not propelling even financials, the bears have returned a few days earlier than they could – in a show of strength. Gold, Silver and Miners Miners issued a warning to gold and silver – yesterday brought a classic short-term top sign. I‘m though not ascribing great significance to it, for it isnt‘a turning point. Gold would be relatively unmoved while silver recovers however deep setback it suffers today. Crude Oil Crude oil appears to need more time to base – while the upside is being rejected for now, the selling attempts aren‘t materializing at all. Higher volume adds to short-term indecision, but strong (long) hands are to win. Copper Copper is running into selling pressure, and looks in need of consolidation in order to overcome $4.60. The red metal remains true to its reputation for volatility. Bitcoin and Ethereum Cryptos are taking their time, and the bulls need to act. Given that volume isn‘t disappearing, the bears have a short-term advantage. Summary S&P 500 looks to be getting under pressure soon again, today. There is no support from bonds, unless these stage an intraday risk-on reversal. The momentum is with the sellers, and rips are likely to be sold as markets digest yet more hawkish Fed action slated for March. Digest and slated are the key words – the Fed‘s hand is being forced here. Commodities and precious metals are likely to do best in what‘s coming – the 5-10 day window of bullish S&P 500 price action, is slowly closing down. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Mining Stocks Don't Stay As Strong As Gold

Mining Stocks Don't Stay As Strong As Gold

Przemysław Radomski Przemysław Radomski 11.02.2022 15:41
  In line with bearish bets, miners have thrown a match. Gold, however, doesn’t want to leave the ring without a fight. How long will it stay high? While gold remains relatively firm despite stock market turbulence, rising real yields, and bearish technical indicators, even a confluence of headwinds hasn’t been able to knock the yellow metal off its lofty perch. However, mining stocks haven’t been so lucky. With my short position in the GDXJ ETF offering a great risk-reward proposition, the junior gold miners’ underperformance has played out exactly as I expected. Moreover, with major spikes in volume preceding predictable sell-offs (follow the vertical dashed lines below), I’ve warned on several occasions that the GDX ETF is prone to tipping its hand – we saw this volume spike in January, which was the 2022 top (as of today). In addition, with mining investors’ power drying up by the day, the medium-term looks equally unkind. Please see below: On Wednesday, gold miners fell. Even though they declined by just $0.06, it was profound. The miners were following gold higher during the early part of Wednesday’s (Feb. 9) session, but they lost strength close to the middle thereof and were back down before the closing bell. If the gold price reversed and then declined during the day, that would have been normal. However, gold stayed up. This tells us that the buying power has either dried up or is drying up. When everyone who wanted to get into the market is already in it, the price can do only one thing (regardless of bullish factors) – fall. Those who are already in can then sell. Monitoring the markets for this kind of cross-sector performance is one of the more important gold trading tips. Look, I’m not saying that declines now are “guaranteed”. There are no guarantees in the markets. There might be buyers that haven’t considered mining stocks that would now enter the market, but history tells us that this is unlikely. Instead, declines are very likely to follow. Yesterday’s big daily decline confirmed my above comments. Gold miners declined much more than gold did, and they did so at above-average volume. The latter indicates that “down” is the true direction in which the precious metals market is heading. To that point, the HUI Index provides clues from a longer-term perspective. When we analyze the weekly chart, it highlights investors’ anxiety. For example, after hitting an intraweek high of roughly 260, the HUI Index ended the Feb. 10 session at roughly 250 – just 3.99 up from last Friday – that’s an intraweek reversal. Furthermore, with the index still in a medium-term downtrend, shades of 2013 still profoundly bearish, and sharp declines often preceded by broad head and shoulders patterns (marked with green), there are several negatives confronting the HUI Index. As such, a sharp drawdown will likely materialize sooner rather than later. Please see below: Finally, the GDXJ ETF is the gift that keeps on giving. For example, with lower highs and lower lows being part of the junior miners’ roughly one-and-a-half-year journey, false breakouts have confused many investors. However, while I’ve been warning about the weakness for some time, more downside is likely on the horizon. To explain, I wrote on Feb. 10: I emphasized before that juniors hadn’t moved above their 50-day moving average, and that they stayed below their rising blue resistance line. Consequently – I wrote – the downtrend in them remained clearly intact. Yesterday’s reversal served as a perfect confirmation of the above. The previous breakdowns were verified in one of the most classic ways. The silver price has been quite strong recently, which is also something that we see close to the local tops. The reversals in mining stocks, the situation in gold, outperformance of silver, AND the situation in the USD Index (the medium-term support held) together paint a very bearish picture for the precious metals market in the short and medium term. All in all, if the weakness continues, I expect the GDXJ ETF to challenge the $32 to $34 range. However, please note that this is my expectation for a short-term bottom. While the GDXJ ETF may record a corrective upswing at this level, the downtrend should continue thereafter, and the junior miners should fall further over the medium term. In conclusion, gold showcased its steady hand throughout the recent volatility. However, mining stocks have cracked under the pressure. With the latter’s underperformance often a bearish omen for the former, the yellow metal’s mettle may be tested over the medium term. As such, while the long-term outlooks for gold, silver, and mining stocks remain profoundly bullish, a final climax will likely unfold before their secular uptrends continue. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Price Of Gold Update By GoldViewFX

Price Of Gold Hitting $2.000? Metal Seems To Feel Good

Florian Grummes Florian Grummes 14.02.2022 07:34
Given last week’s strong price action and gold’s intraday resilience, it is now very likely that gold indeed is breaking out of the multi-month consolidation triangle. Actually, this large and symmetrical triangle had been building for more than a year, at least. However, the correction in gold began on August 7th, 2020. Now it looks like the breakout is in process. Typically, traders tend to aggressively buy into such a breakout. And given Friday’s sharp spike higher, it actually looks exactly like this. Hence, expect more volatility and a sharp move higher as the direction of gold’s next move has become more obvious. Please note, that it is rather challenging to draw and determine the correct triangle, because gold has been in a tricky sideways market for such a long time and many trend-lines have been invalidated during this messy period. But at the latest, a weekly close above US$1,875 should confirm the breakout. This should unleash enough energy to push gold prices quickly towards US$1,900 and even US$1,950 within a few weeks. Obviously, that would fit very well with gold’s seasonal cycle, which is bullish until the end of February at least, but often saw gold rallying into mid of march, too. Consumer sentiment at 10-year low but Fed wants to hike and taper From a fundamental perspective, it leaves us speechless how the Fed can go on a hiking rampage while consumer sentiment is at a 10-year low. While the confidence in governments worldwide is collapsing and inflation is spiking higher, raising rates will have zero impact upon supply shortages. Instead, it will make these shortages only worse and bankrupt more companies in the supply chain. Also, it will bankrupt emerging markets, as the strong dollar has already been putting so much pressure on dollar indebted nations and creditors. It’s all a big mess, and we believe there is no way out. That’s why the warmongering industrial and military complex of the US is desperately trying to push Russia into an attack on Ukraine! Without showing any proof, the Biden administration and their mouthpiece “the mainstream media” have been pushing people’s focus on fears that Russia will soon invade Ukraine. Another noteworthy fundamental observation: Gold’s correction began in earnest when Pfizer & Biontech announced their vaccine on November 9th, 2020. In a first reaction, gold immediately sold off $150 on that same day. Many more similar large red daily candles followed over the last 16 months, destroying the confidence of the gold bugs and shifting millions of dollars to the short sellers. Now that more and more very serious questions about the vaccines are debated in the news, it would make sense for gold to run back to US$1,950. This was the level where gold was trading back on November 9th, 2020. Gold in US-Dollar, weekly chart as of February 13th, 2022. Gold in US-Dollar, weekly chart as of February 13th, 2022. On the weekly chart, gold has been slowly but surely progressing into the apex of the triangle over the last few months. It now looks like Gold is breaking out with vengeance. Theoretically, the resistance zone between US$1,850 and US$1,875 could still stop the bullish train. The weekly Bollinger Bands (US$1,864) sits right in this zone and should at least challenge the bulls for some days. However, the weekly stochastic has just given a new buy signal. On top, the oscillator has been making higher lows since March 2021. A measured move out of this triangle could take gold to around US$1,950 to US$1.975 until spring. The monthly Bollinger Band ($1,975) could become the logical target! Overall, the weekly chart is becoming more and more bullish, suggesting that gold can at least move around US$80 to US$100 higher. Gold in US-Dollar, daily chart as of February 13th, 2022. Gold in US-Dollar, daily chart as of February 13th, 2022. On the daily chart, gold has been struggling with the upper triangle resistance in November and January. Each time, the bears managed to push back. Now it looks like the bulls are finally successful. The fierce and sharp pullback two and half weeks ago had created a nice oversold setup which became the launching pad for the ongoing attack. Since then, the slow stochastic has been nicely turning around. This buy signal is still active and has not yet reached the overbought zone. Thanks to Friday’s big green candle, the bulls are now bending the upper Bollinger Band (US$1,858) to the upside. To conclude, the daily chart is bullish, and gold should have more upside. If the bulls continue their attack, we could see prices directly exploding for four to seven days. More likely would be a consolidation. Only with prices below US$1,835 the breakout would have failed. In that rather unlikely case, the picture could quickly turn ugly again. Conclusion: Gold is breaking out! In mid of December, gold made an important low around US$1,752. Back then, most gold bugs had enough and did throw in the towel after a very difficult and messy 16-month correction. Gold, silver and the mining stock had become the most hated asset. But actually, all that gold might have been doing was building an epic base and a launch pad to start the next leg higher within its bull market. Overall, we expect that Gold is breaking out after a short consolidation! The successful breakout above resistance between US$1,850 and US$1,875 should happen within the next few days or weeks. This should then lead to higher prices and gold will likely run towards US$1,950, at least. However, we are not sure yet whether this will also bring an attack towards the round number resistance at US$2,000. Given the fact, that gold usually starts to struggle somewhere in spring, the ongoing rally could still be just a counter-trend move within the larger ongoing consolidation/correction. Hence, we are short-term very bullish, mid-term neutral and long-term very bullish for gold. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can also subscribe to our free newsletter. Disclosure: Midas Touch Consulting and members of our team are invested in Reyna Gold Corp. These statements are intended to disclose any conflict of interest. They should not be misconstrued as a recommendation to purchase any share. This article and the content are for informational purposes only and do not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Florian Grummes|February 13th, 2022|Tags: Gold, Gold Analysis, Gold bullish, gold chartbook, gold fundamentals, precious metals, Reyna Gold, US-Dollar About the Author: Florian Grummes Florian Grummes is an independent financial analyst, advisor, consultant, trader & investor as well as an international speaker with more than 20 years of experience in financial markets. He is specialized in precious metals, cryptocurrencies and technical analysis. He is publishing weekly gold, silver & cryptocurrency analysis for his numerous international readers. He is also running a large telegram Channel and a Crypto Signal Service. Florian is well known for combining technical, fundamental and sentiment analysis into one accurate conclusion about the markets. Since April 2019 he is chief editor of the cashkurs-gold newsletter focusing on gold and silver mining stocks. Besides all that, Florian is a music producer and composer. Since more than 25 years he has been professionally creating, writing & producing more than 300 songs. He is also running his own record label Cryon Music & Art Productions. His artist name is Florzinho.
US 30 Is On A Slightly Low Level, Which Way Will GBPJPY Choose?

US 30 Is On A Slightly Low Level, Which Way Will GBPJPY Choose?

John Benjamin John Benjamin 14.02.2022 08:48
USDCHF to test resistance The US dollar rises as traders seek safe haven amid tensions in Ukraine. The pair is grinding up along a rising trendline from support at 0.9180. A series of higher lows suggests strong buying interest. A break above the intermediate resistance at 0.9275 may boost buyers’ confidence further. 0.9310 is the next hurdle and its breach would bring the greenback to the double top (0.9370) on the daily chart. On the downside, the trendline is the closest support, and then 0.9180 is a critical level to keep the short-term rally intact. GBPJPY tests demand zone The pound may find support from Britain’s upbeat GDP in Q4. A break above January’s high at 157.70 suggests that the bulls have reclaimed control of price action. The next challenging task is to push above last October’s peak at 158.20. This would resume the uptrend in the medium term. In the meantime, a combination of profit-taking and fresh selling is driving the price towards 155.20. Sentiment would remain steady as long as the sterling met bidders in this demand area. US 30 seeks support The Dow Jones 30 struggled as white-hot US inflation fanned fears of aggressive rate hikes. Nonetheless, a break above the 30-day moving average on the daily chart indicates improved market sentiment. An overbought RSI prompted momentum traders to exit. A fall below 34820 would suggest lingering hesitation among market participants and shake out weak hands. The bulls may see a pullback towards 34500 as a buying opportunity. The rebound may only resume if the price lifts offers around 35400.
Technical Analysis: Moving Averages - Did You Know This Tool?

S&P 500 Chart - There's A Big Red Candle On The Right Hand Side

Monica Kingsley Monica Kingsley 14.02.2022 16:24
S&P 500 opening range gave way to heavy selling as 4,470s didn‘t hold. Risk-on was overpowered, and the flight to Treasuries didn‘t support tech. And that‘s most medium-term worrying – stocks don‘t look to have found a floor, and gave up the opportunity for a tight range trading on Friday all too easily. The prospects of war were that formidable opponent, against which the S&P 500 didn‘t really stand a chance. So, the downtrend has reasserted itself, and HYG doesn‘t look to have found a floor – junk bonds are leading to the downside, with energy, materials and financials standing out, which isn‘t exactly a bullish constellation. The other key beneficiaries of the safe haven bid were gold, miners and oil. Silver lagged as copper retreated all too easily, but I‘m looking for that to change. As for Monday‘s session in stocks, the odds of a countertrend move to the upside, at least intraday, are good. Just a quick glance at the dollar, gold, oil and Bitcoin would reveal the extent of possible stabilization. Stabilization, not a reversal, because HYG is unlikely to turn up, and I‘m not looking for stocks to start moving up again. Thursday marked a high point in the countertrend rally, which was cut short after some 5 days only. Sideways to a little up is the best the bulls can hope for on Monday. Funny though how with all eyes on Eastern Europe, the inflation and steep rate hike bets receded? What a Super Bowl! Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook Whatever backing and filling there could have been, the S&P 500 didn‘t hesitate, and is pointing to the downside. The bears are back, and aren‘t yielding. Credit Markets Credit markets went decidedly risk-off, and a little sideways reprieve wouldn‘t be surprising. But it would change nothing as the bets on rising rates, are on, and the 2-year Treasury is forcing the Fed‘s hand. Gold, Silver and Miners Miners and gold came alive on the tensions escalation news – the uptrend is alive and well indeed, even without these geopolitical developments. The upswing wasn‘t really sold into. Crude Oil Crude oil correction came to an abrupt close, and it‘s unlikely black gold would dip in the current environment. The upcoming corrections would be bought as much as the previous one, and given the oil stocks performance, wouldn‘t likely reach far to the downside. Copper Copper is under pressure, and not holding up as well as other commodities. Base metals though are breaking higher, which is why I‘m looking at Friday‘s red metal trading as a temporary setback only. Bitcoin and Ethereum The floor in cryptos is heralding a tight range day – it‘s good for risk-on that Friday‘s downswing isn‘t immediately continuing, it‘s buying some time. Summary S&P 500 bears are back in the driver‘s seat, and the rush to Treasuries took the spotlight off rate hikes – to a small degree. Not that the Fed would be changing course on geopolitics, we aren‘t there yet. To the contrary, credit markets are pressuring the central bank to move – as decisively as possible in the overleveraged system – and Powell would find it hard not to deliver. Come autumn latest, the strain on the real economy would be hard to ignore – real estate is feeling the pinch already. Stock bulls can‘t expect higher prices unless tech recovers, and we look to be still far from that moment. Real assets with safe haven appeal are likely to do best, and the same goes for the dollar temporarily too. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Tesla Stock Price and Forecast: Should I buy TSLA, RIVN or LCID?

Tesla Stock Price and Forecast: Should I buy TSLA, RIVN or LCID?

FXStreet News FXStreet News 14.02.2022 15:59
TSLA drops nearly 5% on Friday as macro factors in charge. All EV stocks LCID, Chinese names suffer the same fate. Tesla once again is targetting its 200-day moving average. Tesla (TSLA) followed many EV names (all, if we are correct) lower on Friday as macro factors took charge over equity markets. The dominant theme so far in 2022 has been one of rising rates and inflationary pressures. This has led to high growth and tech names underperforming, while energy and financial stocks have been the place to be. That is likely to remain the theme for at least the next quarter if not also Q2. Russia and Ukraine tensions have pushed the oil price above $90, and financial stocks benefit from higher interest rates. Growth stocks, however, do not benefit from higher interest rates as investors look for businesses with cash. With higher interest rates, future cash flows become less valuable. So of the three names mentioned, Tesla, Rivian (RIVN) or Lucid (LCID), we would not want to currently be long any of them. We expect TSLA to perform best of the three due to its market-leading position and revenue, but this sector is out of favour and likely to remain so. Tesla Stock News The latest data from the China Passenger Car Association (CPCA) confirms what we saw from Chinese EV companies earlier. Deliveries for January were down versus December. This is due to the lunar new year in China. Tesla sold 59,845 vehicles in January, down from 70,847 China-made vehicles in December. The Chinese electric vehicle market remains the largest EV market in the world, helped by government incentives and population demand. Tesla Stock Forecast Tesla remains in the strong downtrend identified earlier this year. $945 was tested multiple times as resistance and failed. This has resulted in the recent pullback. Now $824 remains as the 200-day moving average. Below we have trendline support at $752. The 200-day is the key level. Tesla has not closed below its 200-day moving average since June 2021. It has broken the 200-day on an intraday basis several times since but always failed to close below. Notice how volume has steadily been declining in Tesla this month, despite some hugely volatile days. This is indicative of a lack of conviction in the stock. Tesla (TSLA) chart, daily
Will USDJPY Find Its Stability? XAUUSD Is Trades Higher And Higher

Will USDJPY Find Its Stability? XAUUSD Is Trades Higher And Higher

John Benjamin John Benjamin 15.02.2022 09:04
USDJPY hits double top The US dollar recovers as hot CPI fuels bets of a 50 basis points hike in March. The rally came to a halt at January’s high (116.35). Profit-taking compounded by new selling triggered a liquidation below 115.50. The medium-term trajectory remains upward and the bulls may be eager to buy the dips. 114.90 is the next support and an oversold RSI may attract bargain hunters. Further down, the daily support at 114.20 is a major demand zone in case of a deeper correction. A close above the double top could resume the uptrend. XAGUSD tests resistance Bullion rallies over investors’ flight to safety. Silver continues to climb from the daily support at 22.00. Following a brief pullback, a break above the recent high at 23.70 indicates strong buying interest. A bullish MA cross is a sign of acceleration to the upside. The psychological level of 24.00 is the next hurdle and a breakout would bring the price to January’s peak at 24.70. The RSI’s overbought situation may cause a limited fallback; if so the previous low at 22.90 would be the closest support. GER 40 tests critical floor The Dax 40 remains under pressure over Russia-Ukraine tensions. The last rebound’s failure to achieve a new high showed that the bears were still in charge. Trend followers are likely to sell into strength as sentiment remains wary. The index saw bids in the critical demand zone around 14900 which has been tested several times in the last four months. A bearish breakout would trigger a broader sell-off and put a serious dent in the medium-term rally. The bulls will need to reclaim 15500 before they could turn things around.
Should Someone Tell The Price Of Gold It's Time To Review Its Incoming "Oponents"?

Should Someone Tell The Price Of Gold It's Time To Review Its Incoming "Oponents"?

Przemysław Radomski Przemysław Radomski 15.02.2022 16:00
  Gold continues to benefit from the market turmoil and has apparently forgotten about medium-term problems. Meanwhile, the rising USD and a hawkish Fed await confrontation. With financial markets whipsawing after every Russia-Ukraine headline, volatility has risen materially in recent days. With whispers of a Russian invasion on Feb. 16 (which I doubt will be realized), the game of hot potato has uplifted the precious metals market. However, as I noted on Feb. 14, while the developments are short-term bullish, the PMs’ medium-term fundamentals continue to decelerate. For example, while the general stock market remains concerned about a Russian invasion, U.S. Treasury yields rallied on Feb. 14. With risk-off sentiment often born in the bond market, the safety trade benefiting the PMs didn’t materialize in U.S. Treasuries. As a result, bond traders aren’t demonstrating the same level of fear. Please see below: Source: Investing.com Furthermore, while the potential conflict garners all of the attention, the fundamental issues that upended the PMs in 2021 remain unresolved. For example, with inflation surging, St. Louis Fed President James Bullard said on Feb. 14 that “the last four [Consumer Price Index] reports taken in tandem have indicated that inflation is broadening and possibly accelerating in the U.S. economy.” “The inflation that we’re seeing is very bad for low- and moderate-income households,” he said. “People are unhappy, consumer confidence is declining. This is not a good situation. We have to reassure people that we’re going to defend our inflation target and we’re going to get back to 2%.” As a result, Bullard wants a 50 basis point rate hike in March, and four rate hikes by July. Please see below: Source: CNBC Likewise, while San Francisco Fed President Mary Daly is much less hawkish than Bullard, she also supports a rate hike in March. Source: CNBC As a result, while the PMs can hide behind the Russia-Ukraine conflict in the short term, their medium-term fundamental outlooks are profoundly bearish. As mentioned, Bullard highlighted inflation’s impact on consumer confidence, and for a good reason. With the University of Michigan releasing its Consumer Sentiment Index on Feb. 11, the report revealed that Americans’ optimism sank to “its worst level in a decade, falling a stunning 8.2% from last month and 19.7% from last February.” Chief Economist, Richard Curtin said: “The recent declines have been driven by weakening personal financial prospects, largely due to rising inflation, less confidence in the government's economic policies, and the least favorable long term economic outlook in a decade.” “The impact of higher inflation on personal finances was spontaneously cited by one-third of all consumers, with nearly half of all consumers expecting declines in their inflation adjusted incomes during the year ahead.” Please see below: To that point, I’ve highlighted on numerous occasions that U.S. President Joe Biden’s re-election prospects often move inversely to inflation. With the dynamic still on full display, immediate action is needed to maintain his political survival. Please see below: To explain, the light blue line above tracks the year-over-year (YoY) percentage change in inflation, while the dark blue line above tracks Biden’s approval rating. If you analyze the right side of the chart, you can see that the U.S. President remains in a highly perilous position. Moreover, with U.S. midterm elections scheduled for Nov. 8, the Democrats can’t wait nine to 12 months for inflation to calm down. As a result, there is a lot at stake politically in the coming months. As further evidence, as inflation reduces real incomes and depresses consumer confidence, the Misery Index also hovers near crisis levels. Please see below: To explain, the blue line above tracks the Misery Index. For context, the index is calculated by subtracting the unemployment rate from the YoY percentage change in the headline CPI. In a nutshell, when inflation outperforms the unemployment rate (the blue line rises), it creates a stagflationary environment in America. To that point, if you analyze the right side of the chart, you can see that the Misery Index is approaching a level that coincided with the global financial crisis (GFC). As a result, reversing the trend is essential to avoid a U.S. recession. As such, with inflation still problematic and the writing largely on the wall, the market-implied probability of seven rate hikes by the Fed in 2022 is nearly 93% (as of Feb. 10). Please see below: Ironically, while consumers and the bond market fret over inflation, U.S. economic growth remains resilient. While I’ve been warning for months that a bullish U.S. economy is bearish for the PMs, continued strength should turn hawkish expectations into hawkish realities. To that point, the chart above shows that futures traders expect the U.S. Federal Funds Rate to hit 1.75% in 2022 (versus 0.08% now). However, Michael Darda, Chief Economist at MKM Partners, expects the Fed’s overnight lending rate to hit 3.5% before it’s all said and done. “We have this booming economy with high inflation and a rapid recovery in the labor market – much different relative to the last cycle,” he said. “The Fed is behind the curve this time. They are going to have to do more.”  Singing a similar tune, John Thorndike, co-head of asset allocation at GMO, told clients that “inflation is now here, [but] the narrative is that inflation goes away and markets tend to struggle with change. It is more likely than not that real yields and policy rates need to move above inflation during this cycle.” The bottom line? While the Russia-Ukraine drama distracts the PMs from the fundamental realities that confront them over the medium term, their outlooks remain profoundly bearish. Moreover, while I’ve noted on numerous occasions that the algorithms will enhance momentum in either direction, their influence wanes materially as time passes. As such, while headline risk is material in the short-term, history shows that technicals and fundamentals reign supreme over longer time horizons. Thus, while the recent flare-up is an unfortunate event that hurts our short position, the medium-term developments that led to our bearish outlook continue to strengthen. In conclusion, the PMs rallied on Feb. 14, as the Russia-Ukraine conflict is the primary driver moving the financial markets. However, while the PMs will ride the wave as far as it takes them, they ignored that the USD Index and U.S. Treasury yields also rallied. Moreover, with Fed officials ramping up the hawkish rhetoric, the PMs' fundamental outlook is more bearish now than it was in 2021 (if we exclude the Russia-Ukraine implications). As a result, while the timeline may have been delayed, lower lows should confront gold, silver, and mining stocks in the coming months. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
COT Currency Speculator Sentiment rising for Euro & British Pound Sterling

Mean Reversion

Monica Kingsley Monica Kingsley 15.02.2022 16:32
S&P 500 refused further downside yesterday, and while credit markets didn‘t move much, rebound looks approaching as stocks might lead bonds in the risk appetite. When the East European tensions get dialed down, S&P 500 can be counted on to lead, probably more so when it comes to value than tech. That‘s why the tech participation is key as it would make up for the evaporating risk premium in energy. Or precious metals – these are likely to rise once again when the spotlight shifts to the inadequacy of Fed‘s tightening in the inflation fight. For now, the war drums took the limelight away, but don‘t count on gold, silver or oil correcting significantly and lastingly. Cryptos are supporting the return of risk-on as the touted war just isn‘t happening either today or tomorrow, and market participants are dialing back the panicky bets. That‘s why Treasuries and tech movements are so key these days – copper trading shows that we‘re in for paring back of the fire sales. I can‘t call it a full fledged stock market reversal, not yet. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook Pause but more likely a rebound, is what comes next for S&P 500. Closing above the 200-day moving average is possible, but more is needed for a trend reversal in this correction. Credit Markets Credit markets moderated their pace of decline, and there‘s no risk-on posture apparent yet. We may be though nearing the point of credit market reprieve – as much as that‘s compatible with rate raising cycle. Gold, Silver and Miners Miners and gold are benefiting from the tensions, but they‘ll just as easily give up some of these gains next. What‘s important though, is the continued trend of making higher highs and higher lows. Crude Oil Crude oil looks also likely to lose some of the prior safe haven bid, but similarly to precious metals, the trend is higher, and corrections are more or less eagerly bought. Only should the Fed‘s actions harm the real economy, would oil prices meaningfully decline. Copper Copper is rebounding, but still remains trading in a not too hot fashion – the red metal is still trailing behind other commodities significantly. Bitcoin and Ethereum Cryptos deciding to go higher, is a positive sign for stocks as well – the volume looks to be noticeable enough at the close later today to lend the upswing credibility. Summary S&P 500 bulls have the opportunity today, but the market remains as headline sensitive as everything else. Treasuries stabilizing or even moving higher while funds flow out of the dollar, that would be a bullish confirmation – and the same goes for precious metals not getting hammered, but finding a decent floor. The point is that war jitters calming down when Russia doesn‘t take the bait, makes assets to continue with their prior trends and focus, which is Fed and tightening. The bets on 50bp rate hike in Mar went down recently, and when they start rising again, it would make sense to deploy more capital – including into oil above $90, give or take a buck. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Y/Y UK Inflation Indicator Value Equals 5.5% - What's Incoming?

Y/Y UK Inflation Indicator Value Equals 5.5% - What's Incoming?

Alex Kuptsikevich Alex Kuptsikevich 16.02.2022 10:03
Britain's consumer price index fell 0.1% in January, not as sharply as analysts had expected; they were expecting an average fall of 0.2%. Year over year inflation reached 5.5%, a new record since March 1992. There are plenty of signs that peak inflation is near, but the big question is how quickly price growth will return to its 2% target and what effort it will take from the Bank of England. Among signs of a cooling inflation outlook we highlight the second month of slowing producer prices to 13.6% yoy in January against 13.9% and 15.2% in the previous two months. This is an early indicator which allows us to expect less pressure from commodity prices on producers further down the line, which will cool consumer inflation in the coming months. Among the early indicators of inflation around the world is also the Chinese producer price index, which noted a slowdown in January to 9.1% from 10.3% a month earlier and a peak of 13.5% in October. The publication of the UK inflation accelerated the rise in the pound, sending GBPUSD above 1.3570.
Speaking Of nVidia Stock, S&P500 (SPX), The Conflict In Eastern Europe And GBP State

Look At This XAUUSD Slide. Did GBPUSD Find Its Straight Line?

John Benjamin John Benjamin 16.02.2022 08:43
EURUSD bounces off support The US dollar retreats as the Fed’s half-point hike in March remains uncertain. The euro’s break above the daily resistance at 1.1480 boosted buyers’ confidence after a sell-off in January. It bounced off 1.1280 at the base of the recent bullish breakout. The support also is right next to the 61.8% Fibonacci retracement level (1.1265) making it an area of congestion. A close above the intermediate resistance (1.1370) would attract more buying interest. Then an extension above 1.1490 may fuel a rally towards 1.1600. GBPUSD awaits breakout The sterling holds well as Britain’s wage growth beats expectations in December. The current rebound came under pressure in the supply zone around 1.3660 which was the origin of a sharp drop in late January. An overbought RSI led to some profit-taking but the pound has found support above 1.3480. The bears’ failed attempts to push lower indicates strong demand. A bullish close above 1.3640 would lift offers towards last month’s high at 1.3750. The daily support at 1.3370 is a key floor in keeping the rally intact. XAUUSD seeks support Gold drifts lower on signs of de-escalation in Ukraine. A break above last November’s high at 1875 may have put the precious metal back on track. However, the rally ran out of steam in the short term with the RSI shooting into the overbought territory. The price is taking a breather and buyers may see a pullback as an opportunity to stake in. A drop below 1852 may wash out weak hands and deepen the correction towards 1830. 1880 is now a fresh resistance and its breach could propel bullion to last June’s high at 1910.
Stumbling Again

Stumbling Again

Monica Kingsley Monica Kingsley 16.02.2022 15:53
S&P 500 rebound goes on reflexively, but stormy clouds are gathering – I‘m looking for the bears to reassert themselves over the next couple of days latest. The credit markets posture is far from raging risk-on even though select commodities are recovering (what else to expect in a secular commodities bull) and precious metals suffered a modest setback (not a reversal though). Crypto recovery is nodding towards the risk-on upturn that is though likely to get checked soon.It‘s great that tech was the driver of yesterday‘s S&P 500 upswing, but for how long would it keep leadership now that attention is shifting back towards inflation. Yesterday I wrote that: (...) rebound looks approaching as stocks might lead bonds in the risk appetite. When the East European tensions get dialed down, S&P 500 can be counted on to lead, probably more so when it comes to value than tech. That‘s why the tech participation is key as it would make up for the evaporating risk premium in energy. Or precious metals – these are likely to rise once again when the spotlight shifts to the inadequacy of Fed‘s tightening in the inflation fight.So far the stock market advance hasn‘t met a brick wall, but value upswing has been sold into (unlike tech‘s). Energy stocks lost, but are likely to come back – and the next microrotation might not be powerful enough to carry S&P 500 higher. Anyway without a HYG upswing, stock bulls are facing stiff headwinds.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 rebounded on low volume but that wouldn‘t be an issue in a healthy bull market – the trouble is that this 2022 price action isn‘t very healthy.Credit MarketsHYG didn‘t trade on a strong note, and the rise in yields continues almost unabated. This is what I meant yesterday by saying that we may be though nearing the point of credit market reprieve – as much as that‘s compatible with rate raising cycle.Gold, Silver and MinersPrecious metals suffered a temporary setback – they easily gave up some of the safe haven gains, which isn‘t surprising. The bulls though haven‘t lost control, and that‘s key.Crude OilCrude oil dip was bought, and there wasn‘t much bearish conviction to start with. The general uptrend is likely to continue, and $90 appears likely to hold over the next few days definitely.CopperCopper is now in for some backing and filling, but managed to catch up with other commodities a little yesterday. The red metal remains range bound, but making good bullish progress.Bitcoin and EthereumCryptos are paring back yesterday‘s advance, and unless the mid Feb lows give, they‘re likely to muddle through with a modest bullish bias till the attention shifts to the Fed again.SummaryS&P 500 bulls‘ opportunity seems slipping away with each 1D or 4H candle, and I‘m not counting on the credit markets to ride to stocks‘ rescue. The commodities bull though is likely to carry on with little interference – and so does the precious metals bull as the yield curve keeps compressing. Slowdown in economic growth with rampant inflation and the realization that the Fed tightening hasn‘t had the effect, is awaiting, and would usher in strong gold and silver gains.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Binance Coin set for pop above significant resistance as relief rally takes a short halt

Binance Coin set for pop above significant resistance as relief rally takes a short halt

FXStreet News FXStreet News 16.02.2022 16:18
Binance Coin takes a small step back this morning due to some profit-taking.BNB bulls hold all the cards as the relief rally is not over yet.Expect a pop above $444-$452 with a profit target set at $480 for the moment.Binance Coin (BNB) price action shot back above the red descending trend line yesterday with a massive relief rally that lifted market sentiment. With that, the downtrend looks to be broken, and an uptrend could be on the cards if bulls can take out the $444-$452 resistance barrier with a triple top formation, the 55-day Simple Moving Average (SMA) and the longer-term pivotal level all coincide in this region. Once through there, expect the next stage to be set for a move towards $480 with the 200-day SMA coming in, returning another 10%.Binance Coin set for the second phase in the recovery rallyBinance Coin is undergoing some profit-taking this morning after the solid relief rally from yesterday (https://www.fxstreet.com/cryptocurrencies/news/cryptocurrencies-price-prediction-decentraland-binance-dogecoin-asian-wrap-16-feb-video-202202160214) that has lifted market sentiment and saw some decent inflows into markets. On the way up, bulls hit some resistance from the double top from February 08 and January 21 and, in the process, made it a triple top resistance. This, together with the already known $452 and the 55-day SMA coming in at $445, makes it a substantial (https://www.fxstreet.com/cryptocurrencies/news/binance-coin-must-break-out-above-this-level-before-bnb-can-retest-660-202202152150) barrier that will need to be broken to prove that the relief rally still has plenty of juice to go.Expect thus some profit-taking today, a little bit on the back foot with $419 as support to bounce off back to $445. Some more positive signals coming from the Russia-Ukraine developments could be the needed additional catalyst to push through this difficult barrier. The next target is set at $480, with the 200-day SMA falling in line with that considerable number, resulting in probably the same profit-taking pattern (https://www.fxstreet.com/cryptocurrencies/news/dogecoin-and-shiba-inu-price-climbs-as-binance-smart-chain-whales-accumulate-meme-coins-202202151719) as BNB price action shows today.BNB/USD daily chartOverall, the US keeps claiming that the situation in Central-Europe remains precarious and could see an escalation (https://www.fxstreet.com/cryptocurrencies/news/cryptocurrencies-price-prediction-bitcoin-binance-coin-and-decentraland-european-wrap-11-february-202202111055) any time now. Once those headlines hit the wires, expect the whole cryptocurrency space to collapse and for there to be a massive pullback from investors, with BNB price falling back initially to $389. Depending on the severity of the attacks, another push lower towards $340 would be the logical outcome and result in BNB price shedding 22% of its value.
After A Large Amplitude GBPUSD Seems To Be Stable, But Maybe It Will Start Rising Again?

After A Large Amplitude GBPUSD Seems To Be Stable, But Maybe It Will Start Rising Again?

8 eightcap 8 eightcap 17.02.2022 03:09
Today we’re looking at the GBPUSD as buyers continue to hold firm and now only face one level of resistance both they can get the new uptrend back on track. Fundamentally a few things remain on the radar. Russian/Ukrainian Situation, we’ve seen recently that fair ups are supporting the USD and any new escalations could drive the USD higher which would hurt the GBPUSD. T-note yields are another ongoing factor but yields have settled for now but new highs could once again hurt risk pairs including the GBPUSD. US inflation and UK inflation. US inflation and rate rises could be starting to be factored in unless we see a new spike. The minutes didn’t do much to drive the USD this week, while a new rise in UK inflation definitely supported the GBP yesterday giving the GBPUSD a nice boost in Wednesday’s session. With that in mind let’s look at some of the technicals we’re watching on the GBPUSD chart. For now, we see price stuck in consolidation with support and resistance currently holding price. Overall we can see two new uptrends in play, on the short and medium times. Price also sits above all three moving averages and the short term MAs are trading above the 86 MA. While support remains firm we will continue to look for buyers to push at a new continuation. The key to this is a break above the two resistance points. This could confirm a new breakout and start suggesting that the medium-term trend could continue. A break below support and a move back to the new Med-trend would be a small warning sign and further evidence would be required before thinking that the trend is going to continue. GBPUSD D1 Chart The post Forex News: GBPUSD setting up for a continuation? appeared first on Eightcap.
Tesla Stock News and Forecast: TSLA, RIVN or LCID stock, which is the best buy?

Tesla Stock News and Forecast: TSLA, RIVN or LCID stock, which is the best buy?

FXStreet News FXStreet News 16.02.2022 16:18
Tesla bounces strongly on Tuesday as risk assets surge. TSLA stock gains just over 5% on Tuesday. Geopolitical tensions falling help risk appetites return. Tesla (TSLA) shares bounced strongly on Tuesday, eventually closing up over 5% in a strong day for equities. The stock market was buoyed by news of some Russian deployments returning to their bases. Russia then appeared to confirm this as hopes grew for a diplomatic solution. This saw an obvious bounce in equities (https://www.fxstreet.com/markets/equities) with the strongest names being those that were previously the weakest. Understandable, but is this gain sustainable? NATO this morning has said it sees no sign of Russian troops pulling back from the Ukraine border. NATO has said it sees Russian troop numbers still growing along the Russian-Ukraine border. This news (https://www.fxstreet.com/news) still has legs. Volatility has been high as a result and will likely continue that way. Tesla Stock News The latest quarterly SEC filings have provided much information to pore over. In particular, Tesla, they do note some hedge fund selling. This is not too surprising given the record highs TSLA stock pushed on to before Elon Musk sold a stake. Benzinga reports that the latest filing shows Ray D'Alio's Bridgewater cutting its stake in Tesla. Cathie Wood of ARK Invest was regularly top-slicing her firm's stake in Tesla recently. CNBC also reported yesterday that hedge fund Greenlight Capital had made a bearish bet on Tesla shares. Greenlight, according to the report, has been a long time Tesla bear. Apart from those snippets though, macroeconomic factors are the main driver of the Tesla stock price currently. Electric vehicle stocks have not been a strong sector so far in 2022 as growth, in general, is out of favor with investors. This has led to steep falls in other names such as Rivian (RIVN) and Lucid (LCID). Both are at a much earlier stage of development than Tesla (TSLA) and on that basis, we would favor Tesla (TSLA) over them. But we must stress we would ideally avoid the sector entirely until perhaps the second quarter. Once markets have adjusted to the prospect of higher rates, some high-growth stocks may benefit. historical in a Fed (https://www.fxstreet.com/macroeconomics/central-banks/fed) hiking cycle the main indices do advance but growth sectors struggle. Rivian so far is down 36% year to date, Lucid is down 24% while Tesla is the outperformer, down 12% for 2022. Tesla Stock Forecast We remain in the chop zone between the two key levels of $945 and $886. Breaking $945 should lead to a move toward $1,063. That would still be consistent with the longer-term bearish trend. Nothing goes down or up in a straight line. TSLA is unlikely to be able to fight the current overpowering macroeconomic backdrop of rising rates (https://www.fxstreet.com/rates-charts/rates) hitting high growth stocks. But breaking $945 is still significant in the short term and should see some fresh momentum. While $886 is significant, the 200-day moving average at $826 should have our real attention on the downside. Tesla has not closed below this level in over 6 months, so that would be significant and again lead to a fresh influx of momentum. Just this time though, it would be selling momentum. Tesla (TSLA) chart, daily Short-term swing traders should note the volume momentum behind moves. Once volume dries up, Tesla tends to fall off intraday. From the 15-minute chart below, we have an opening gap from Tuesday down to $880. This is short-term support, but a break will see the bottom of Monday's range at $840 tested. Tesla (TSLA) 15-minute chart
NYMEX Gas Prices Catapulted Like Fighter Jets from an Aircraft Carrier

NYMEX Gas Prices Catapulted Like Fighter Jets from an Aircraft Carrier

Sebastian Bischeri Sebastian Bischeri 16.02.2022 16:56
  The Natural Gas flight has passed its first goal and is on its way to the second target. Here is a map showing the route to Natgas’ new destination. In today’s edition, I will provide some updates on recent market developments for Natural Gas futures (NGF22) following my last projections published on Friday, Feb. 11, for which the stop was also updated on Wednesday. Trade Plan We all love it when a trade plan comes together! The market has to cope with stronger demand to fuel increasing industrial activity after being surprised by the warming mid-February weather forecast. Therefore, you can see that the rebounding floor (support) provided was ideal for the Henry Hub, which is also supported by unyielding global demand for US Liquefied Natural Gas (LNG) to turn its momentum back up. The recommended objective of $4.442 was almost hit yesterday. However, it was achieved this morning (during the European session) and the $4.818 level is now the next goal. As I explained in more detail in my last risk-management-related article to secure profits, my recommended stop, which was located just below the $ 3.629 level (below one-month previous swing low), was recently lifted up around the $3.886 level (around breakeven). Now it could be lifted one more time up to 4.180, which corresponds to the 50% distance between the initial entry and target 1. By doing so, the second half of the trade would become optimally managed. Alternatively, you can also use an Average True Range (ATR) multiple to determine a different level (above breakeven) that may better suit your trading style. Henry Hub Natural Gas (NGH22) Futures (March contract, daily chart) Now, let’s zoom into the 4H chart to observe the recent price action all around the abovementioned levels of our trade plan: DHenry Hub Natural Gas (NGH22) Futures (March contract, 4H chart) That’s all folks for today. Happy trading! Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Equities Of Europe Are Under Pressure

Speaking Of nVidia Stock, S&P500 (SPX), The Conflict In Eastern Europe And GBP State

Swissquote Bank Swissquote Bank 17.02.2022 10:42
Good mood didn’t last long as the US didn’t let the tensions de-escalate insisting that Russia is certainly not pulling back its troops but is rather increasing its presence at the Ukrainian border. The US warning hit the investor appetite at yesterday’s session and reversed the earlier week gains in stock indices. As a result, the safe have flows boosted gold, again, as crude oil remained steady around the $92 per barrel. US equities were soft but the S&P500 erased a part of losses at a late-session rally after the release of the Federal Reserve (Fed) minutes, the pricing on the fed funds front flipped to give more chance for a 25bp hike in March, instead of a 50-bp hike. In the FX markets, the US dollar remains strong, while the pound-dollar is eking out gains above the 1.35 mark as the high inflation in the UK keeps the Bank of England (BoE) hawks in charge of the market. Bitcoin is pointed as a risk to the global financial stability, as Fidelity launches Europe's cheapest Bitcoin ETP. In the individual stocks, Nvidia’s strong results didn’t boost the share price in the afterhours trading, Virgin Galactic couldn’t extend Tuesday’s days on worries that they may have some execution problems sending people to the moon and Roblox tanked 26% on softer results. Watch the full episode to find out more! 0:00 Intro 0:28 Ukraine update 1:22 Gold up, but gains vulnerable 1:54 US equities fine with the hawkish Fed minutes 3:38 Sterling gains on soaring inflation expectations 4:54 Cryptocurrencies: a risk to financial stability? 6:04 Why strong results don't boost appetite in Nvidia? 7:35 Why the space travel doesn't seduce investors? 8:34 And why Roblox is not in a good place to reverse losses? Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.
Crypto Airdrop - Explanation - How Does It Work?

Thursday: Significant Decreases Of Bitcoin (-7.7%) And ETH (-7.7%)

Alex Kuptsikevich Alex Kuptsikevich 18.02.2022 08:52
Bitcoin collapsed on Thursday, the most in almost a month amid sales of risky assets. BTC lost 7.7%, ending the day near $40,700. Ethereum fell 7.7%, while other leading altcoins from the top ten also fell, from 5.4% (Binance Coin) to 8.5% (Terra). The total capitalization of the crypto market, according to CoinGecko, sank by 7.3%, to $1.94 trillion. Bitcoin sold more actively than altcoins, which led to a decrease in the Bitcoin dominance index by 0.3%, to 39.8%. The Cryptocurrency Fear and Greed Index plummeted 22 points to 30, returning to a state of fear. Bitcoin has clearly lost its function as a defensive asset lately, showing almost no correlation with gold, which was in high demand on Wednesday and Thursday. The technical picture looks bearish in the short term. Bitcoin did not hold above the 50-day average and fell under previous local lows. It is quite possible that from the end of January to mid-February, we saw a pullback after the momentum of the decline, and now a new step down is being formed. JPMorgan Bank indicated that crypto assets would be negatively affected by tightening US monetary policy. This approach puts crypto on a par with growth companies, which have also come under increased pressure amid rising market interest rates in recent weeks. Charles Munger, an associate of legendary investor Warren Buffett, likened cryptocurrencies to a "venereal disease" and praised China for banning them. According to him, cryptocurrencies are used by hackers, criminals, as well as those who evade taxes.
Bearish Turn Coming

Bearish Turn Coming

Monica Kingsley Monica Kingsley 17.02.2022 15:57
Thanks to Fed minutes, the S&P 500 closed modestly up, but could have taken the stronger credit markets cue. Instead, the upswing was sold into – the selling pressure is there, and neither value nor tech took the opportunity to rise, even against the backdrop of a weakening dollar. That‘s quite telling – the stock market correction hasn‘t run its course yet, and whatever progress the bulls make, is being countered convincingly. Precious metals adored the combo of yields and dollar turning down – and reacted with the miners‘ outperformance. The silver to copper ratio is basing, and the white metal looks to have better short-term prospects than the red one. Still in the headline sensitive environment we‘re in, gold would be stronger than silver until inflation is recognized for what it is. If there‘s one thing that the aftermath of Fed minutes showed, it‘s that the commodities superbull is alive and well, and that precious metals likewise are acting very positively in this tightening cycle. Suffice to say that gold has a track record of turning up once the rate hikes finally start… Excellent, the portfolio is positioned accordingly. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 rebound is getting suspect, and should stocks close on a weak note today, it‘s clear that today‘s wobbling Philly Fed Manufacturing Index won‘t be balanced out by the succession of Fed speakers – the signs of real economy headwinds are here. Credit Markets HYG upswing could have had broader repercussions, and it‘s quite telling it didn‘t. The risk-on turn would likely be sold into, with consequences. Gold, Silver and Miners Precious metals suffered a temporary setback only indeed – I‘m looking for the gains to continue as the miners outperformance just can‘t be overlooked. Crude Oil Crude oil dipped some more, and the dip was again bought. Given the late session wavering, I‘m looking for some more sideways and volatile trading ahead before the upswing reasserts itself. Copper Copper continues trading sideways, but with bullish undertones. More consolidation before another upswing attempt is probable. Bitcoin and Ethereum Cryptos are turning down, but still haven‘t broken either way out of the current range. Both Bitcoin and Ethereum are sending a message of caution. Summary S&P 500 bulls‘ opportunity seems increasingly slipping away given that the buyers couldn‘t defend gains after Fed minutes release. The upturn in credit markets is likely to prove of fleeting shelf life, and would exert downward pressure upon stocks. As I wrote yesterday (and talked extensively within today‘s article chart captions), the commodities bull is likely to carry on with little interference – and so would the precious metals bull as the yield curve keeps compressing, and the beginning of rate hikes would mark further headwinds for the real economy at a time of persistent inflation that could be perhaps brought down to 4-5% official rate late this year (which would leave the mainstream wondering why it just isn‘t transitory somewhat more – what an irony). The Fed‘s tools to be employed are simply insufficient to break the inflation‘s back, that‘s it. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
AUDUSD And NZDUSD Charts Looks Quite Similar... SPX Trades A Bit Lower Than A Few Days Ago

AUDUSD And NZDUSD Charts Looks Quite Similar... SPX Trades A Bit Lower Than A Few Days Ago

John Benjamin John Benjamin 18.02.2022 08:51
AUDUSD attempts to break out The Australian dollar finds support from a low jobless rate in January. The pair has previously hit resistance in the supply zone around 0.7250. This is a daily resistance from the sell-off in late January. Then a recovery above 0.7180 suggests solid buying pressure before a bearish mood could take hold again. A break above the key hurdle could initiate a bullish reversal above this year’s peak (0.7310). Otherwise, a prolonged consolidation may test the demand area between 0.7100 and 0.7150. NZDUSD tests resistance The New Zealand dollar climbed higher as the RBNZ can lift its cash rates next week. Price action came under pressure on the 30-day moving average (0.6730). However, strong support at 0.6590 builds a case for a potential reversal. A break above 0.6690 is an encouraging sign leaving 0.6730 as the last obstacle before a bullish extension. A broader rally would bring the kiwi back to January’s high at 0.6890. In the meantime, an overbought RSI caused a brief pullback towards 0.6660. SPX 500 consolidates The S&P 500 struggles as the Russia-Ukraine crisis persists. The previous rebound has met stiff selling pressure over the 30-day moving average (4590). A pullback has sent the RSI into the oversold territory, triggering some buyers’ interest in racking up the bargain. The rebound is still valid as long as the index stays above the critical area of 4280. A break above 4480 may extend gains to the double top at 4590 which is an important resistance. 4360 is the immediate support if the sideways action lingers.
Decentralized Autonomous Organisation - Another Addition To Our Personal Dictionaries

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Investors spooked by renewed geopolitical tensions

FXStreet News FXStreet News 17.02.2022 16:10
Bitcoin price gets caught in a bearish triangle as tensions in Ukraine flare up again. Ethereum price returns to pivotal support, money repatriation goes into the second day. XRP price in pennant ready for a bearish breakout under the current sentiment. Cryptocurrencies are on the back foot as investors are getting worried about the escalating situation between Ukraine and Russia, as more reports come in from shots in the Donbas region near Luhansk. As the situation does not seem to de-escalate, investors are pulling their money out of what was believed to be the start of a solid and longer-term relief rally that is stalling at the moment. With more downside pressure to come, expect all significant cryptocurrencies to fall back to supportive pivotal levels. Bitcoin price falls into a bearish triangle, set to dip back below $40,000 Bitcoin (BTC) price is getting battered on Thursday after a fade on Wednesday that could still be attributed to some short-term profit-taking. The extension of the falls seems to confirm that sentiment is yet again dipping below zero towards risk-off. Investors pulling out their funds preemptively is reflected with the sharp decline in the Relative Strength Index, where the sell-side demand is outpacing the buy-side demand. In this context, Bitcoin price will remain under pressure for the rest of the week and could be set to slip below $40,000 in the coming days as the situation in Ukraine is set to deteriorate again, potentially inflicting further damage to the market mood. BTC price sees bulls unable to hold price action above $44,088 and in the process is forming a descending trend line that, together with the base at $41,756, is forming a bearish triangle. Expect Bitcoin valuation to decline further as the tensions around Luhansk increase by the hour. Once the $41,756 support is broken, the road is open for a nosedive towards $39,780 with the $40,000 psychological level broken yet again to the downside. BTC/USD daily chart A hail mary could be provided by the 55-day Simple Moving Average at $42,340, which already provided support on February 9 and February 15. With that move, a sudden breakthrough in the peace talks could become the needed catalyst to improve the situation and dislocate Bitcoin price action from the drag of the geopolitical news that is weighing. Bitcoin would see the demand on the buy-side blow up and see a big pop above $44,088. Ethereum bulls are breaking their jaws on the 55-day SMA as the price fades further Ethereum (ETH) price is getting crushed against the 55-day Simple Moving Average (SMA) around $3,143, with bulls unfit to push and try to close price action above it. After three failed attempts in a row, it is becoming clear that the bullish support is wearing thin as, on Tuesday, the daily candle closed above there, and even if the next day ETH price opened above again, it closed below the 55-day SMA. On Wednesday, finally, both the open and the closing price were below the 55-day SMA. This proves that sentiment has shifted in just three trading days and looks set to fade further away from the 55-day SMA on Friday. Expect going forward in the next coming hours that bulls will get squeezed against the wall at $3,018 with both a pivotal level and the $3,000 marker a few dollars below there. As tensions mount, expect some more negative headlines, a breach in defense of the bulls with even the monthly pivot at $2,929 getting involved in the crosshairs. Depending on the severity and the further deterioration of the political situation in Ukraine and the correction in the stock markets, it is possible to see a nosedive towards $2,695. ETH/USD daily chart Global market sentiment is hanging on the lips of Ukraine and the geopolitical situation. With that, it is clear that once the situation gets resolved or de-escalates, markets can shift 180 degrees in a matter of seconds. That same rule applies to cryptocurrencies where Ethereum could pop back above the 55-day SMA and even set sail for $3,391, breaking the high of February and flirting with new highs for 2022. Bulls joining the rally will want to keep a close eye and be mindful of the RSI, as that would start to flirt with being overbought and, from there on, limiting any further big moves in the hours or next trading days to come. Ethereum short squeeze could trigger a spike to $4,000 XRP price set to lose 10% of market value as headline news breaks down relief rally Ripple (XRP) price is stuck in a pennant and is close to a breakout that looks set to be a bearish one. As global markets are continuing the fade from Wednesday, XRP price is breaking below the recent low and sees bears hammering down on the ascending side of the pennant. As more negative headlines cross the wires, expect this to add ammunition for bears to continue and start breaking the pennant to the downside. XRP price will look for support on the next support at hand, which comes in at $0.78, and depending on the severity of the news flow, that level should hold again as it did on February 14. If that is not the caseany further downside will be cut short by the double bottom around $0.75 from February 12 and 13 and the 55-day SMA coming in at or around that area. With that move, the RSI will be triggering some "oversold" red flags and see bears booking profit. XRP/USD daily chart A false bearish breakout could easily see bears trapped on entering on the break to the downside out of the pennant as bulls go in for the squeeze. That would mean that price shoots up towards $0.88 and takes out this week's high. Bears would be forced to change sides and join the buy-side demand to close their losing positions, adding to even more demand and possibly hitting $0.90 in the process. XRP set to explode towards $1.00, bulls hopeful over SEC vs Ripple case
Gores Guggenheim Stock News and Forecast: Is GGPI a better bet than LCID or RIVN?

Gores Guggenheim Stock News and Forecast: Is GGPI a better bet than LCID or RIVN?

FXStreet News FXStreet News 17.02.2022 16:10
GGPI Stock has rallied after a Superbowl ad. GGPI stock surges another 4% on Wednesday as momentum remains high. GGPI may struggle as markets turn negative and growth stocks struggle to hold gains. Gores Guggenheim (GGPI) stock is probably more commonly referred to as Polestar stock now that the SPAC will take electric vehicle maker Polestar public this year. The deal is due to complete some time in the first half of 2022. Polestar is an electric vehicle maker backed by Volvo and Chinese company Geely. So what is different about this one compared to the others? Gores Guggenheim Stock News Polestar looks merely like Volvo's EV division. We know this is not the case as Volvo has its hybrid and EV models planned. However, the companies certainly have strong links. Rivian (RIVN) went public in a blaze of hype and publicity due largely to its links to Amazon (AMZN) and Ford (F). Both companies had stakes in Rivian. However, from what we know, Rivian will have to build out its manufacturing and distribution network. It will not piggyback on Ford for this. Polestar uses the Volvo service network in the UK, and Polestar will utilize Volvo's South Carolina plant to manufacture Polestar models in the US. Previously, Polestar said it will have its showrooms in the US but use Volvo for servicing. Polestar will look to do as much sales work as possible online and use Volvo then for manufacturing and servicing. This gives it an obvious advantage over LCID and RIVN. Gores Guggenheim Stock Forecast On Wednesday, the stock spiked again, closing nearly 5% higher at $12.02. The company has been in charge since the Superbowl ad brought more attention to the stock and the cars. Both seem well received. Now GGPI stock has ramped up to a strong resistance area. Above $12 and as high as $12.36 is the previous spike high from December. This will be tough to break given that high risk stocks are likely to suffer as we close out the week. Geopolitical events are dominating and high growth names are still not favored. SPACs generally hold $10 cash until the deal goes through, so this is obvious support. The best strategy with SPAC trading is to try and buy as close to $10 as possible. GGPI 1-day chart
Commodity Currencies Explained (Part I)

Commodity Currencies Explained (Part I)

Sebastian Bischeri Sebastian Bischeri 15.11.2021 16:26
Ever think of commodities when trading currencies? Or vice-versa? What do Brazilian reals have to do with soybeans, or Indian rupees with diamonds? Let’s start by defining what could be called a commodity currency (or commodity pair). Generally, a commodity currency represents a currency from a country or geographical zone that produces specific commodities which will account for most of its exports. Some examples of currencies which could be considered as commodity currencies are presented in the following table: Currencies Top Material Exports Argentine peso (ARS) Soybean meal ($8.81B), corn ($6.19B), delivery trucks ($3.83B), soybeans ($3.47B), soybean oil ($3.38B), bran ($292M), other vegetable residues and waste ($232M), and ground nut oil ($131M) Australian dollar (AUD) Iron ore ($67.5B), coal briquettes ($51.5B), petroleum gas ($34.1B), gold ($25.4B), aluminium oxide ($5.6B), sheep and goat meat ($3.07B), and wool ($2.26B) Brazilian real (BRL) Soybeans ($26.1B), crude petroleum ($24.3B), iron ore ($23B), corn ($7.39B), sulfate chemical wood pulp ($7.35B), poultry meat ($6.55B), frozen bovine meat ($5.67B) and raw sugar ($5.33B) Canadian dollar (CAD) Crude petroleum ($67.8B), cars ($40.9B), gold ($14.6B), refined Petroleum ($12.3B), vehicle parts ($10.8B), sawn wood ($6.35B), raw aluminium ($5.45B), potassic fertilizers ($5.27B), rapeseed ($3.23B), and rapeseed oil ($2.6B) Indian rupee (INR) Refined petroleum ($39.2B), diamonds ($22.5B), packaged medicaments ($15.8B), jewellery ($14.1B), cars ($7.15B), Rice ($6.9B), Crustaceans ($4.67B), and Non-Retail Pure Cotton Yarn ($2.86B) Indonesian rupiah (IDR) Coal briquettes ($20.3B), palm oil ($15.3B), petroleum gas ($8.32B), cars ($4.52B), gold ($4.01B), lignite ($2.91B), stearic acid ($2.76B), uncoated paper ($2.37B), and coconut oil ($1.9B) Malaysian ringgit (MYR) Integrated circuits ($63B), refined petroleum ($17.8B), petroleum gas ($11.5B), semiconductor devices ($9.65B), palm oil ($8.91B), rubber apparel ($4.37B), other vegetable oils ($1B), copper powder ($873M), asphalt mixtures ($417M), and platinum clad metals ($127M) Mexican peso (MXN) Cars ($53.1B), computers ($32.4B), vehicle parts ($31.2B), delivery trucks ($26.9B), crude petroleum ($26.6B), tractors ($10.7B), beer ($5.07B), tropical fruits ($3.6B), and railway freight cars ($3.57B) New Zealand dollar (NZD) Concentrated milk ($5.73B), sheep and goat meat ($2.62B), rough wood ($2.31B), butter ($2.29B), frozen bovine meat ($2.09B), casein ($613M), and honey ($237M) Nigerian naira (NGN) Crude Petroleum ($46B), petroleum gas ($7.78B), scrap vessels ($2.26B), flexible metal tubing ($2.1B), and cocoa beans ($715M) Peruvian nuevo sol (PEN) Copper ore ($12.2B), gold ($6.76B), refined petroleum ($2.21B), zinc ore ($1.65B), and refined copper ($1.62B), animal meal and pellets ($1.54B), lead ore ($1.01B), fish oil ($434M), and buckwheat ($139M) Russian ruble (RUB) Crude petroleum ($123B), refined petroleum ($66.2B), petroleum gas ($26.3B), coal briquettes ($17.6B), wheat ($8.14B), semi-finished iron ($6.99B), coal tar oil ($4.49B), raw nickel ($4.03B), and nitrogenous fertilizers ($3.05B) South African rand (ZAR) Gold ($16.8B), platinum ($9.62B), cars ($7.61B), iron ore ($6.73B), and coal briquettes ($5.05B), manganese ore ($3.16B), chromium ore ($1.92B), titanium ore ($583M), and niobium, tantalum, vanadium, and zirconium ore ($480M) Swiss franc (CHF) Gold ($59B), packaged medicaments ($46.2B), blood, antisera, vaccines, toxins, and cultures ($32.9B), base metal watches ($13.6B), jewellery ($10.9B), precious metal watches ($7.32B), and hydrazine or hydroxylamine derivatives ($501M) US dollar (USD) Refined petroleum ($84.9B), crude petroleum ($61.9B), cars ($56.9B), integrated circuits ($41.4B), vehicle parts ($41.2B), medical instruments ($29.5B), gas turbines ($28.1B), aircraft parts ($16.3B), and orthopedic appliances ($12.1B) Vietnamese dong (VND) Broadcasting equipment ($42.3B), telephones ($18.2B), integrated circuits ($15.5B), textile footwear ($10.6B), and leather footwear ($6.43B), coconuts, Brazil nuts, and cashews ($3.16B), fuel wood ($2.05B), cement ($1.39B), metal-clad products ($1.37B), and cinnamon ($175M) West African CFA franc (XOF) Gold ($11.66B), cocoa beans ($3.84B), refined petroleum ($2.64B), rubber ($1.08B), raw cotton ($1.04B), and crude petroleum ($941M), cocoa paste ($795M), other oily seeds ($407M), Phosphoric Acid ($346M), coconuts, Brazil nuts, and cashews ($280M), ground nuts ($192M), zinc ore ($173M), raw zinc ($155M), electricity ($141M), cocoa shells ($115M), calcium phosphates ($95.7M), radioactive chemicals ($59.6M), rough wood ($59.5M), raw copper ($49.4M), Petroleum Gas ($42.5M), non-fillet frozen fish ($356.1M), other vegetable residues ($25.4M), and aluminium ore ($3.17M) Data: The Observatory of Economic Complexity (OEC) (Bold: products which the country/economic area was the world’s biggest exporter in 2019) For active trading purposes, the ones highlighted in yellow would be characterised as freely floating and more liquid currencies. Thus, they would also be more accessible and less costly (with lower fees) to trade. For hedging purposes, the others would present some advantages to the commercialisation of their associated natural resources, even though they would rather be considered more exotic currencies. Charts: Here is a representation of some key commodity currencies presented in the above table on a weekly timeframe against the US dollar (reference currency): Each chart was represented within 2-standard deviation Bollinger Bands based on a 20-period simple moving average (in orange), a 50-period simple moving average (blue curve), a 200-period simple moving average (the black curve) and in the pane below is a 14-period relative strength index (in blue) to which was applied a 9-period simple moving average (red curve). All those charts are displayed over a 2-year historical period. In the next article I’ll focus on highlighting some correlations which may exist between key natural resources and the currencies in which they are usually traded. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Oh, Someone Has Stopped Brent Oil Price From Going "Out Of Range"

Oh, Someone Has Stopped Brent Oil Price From Going "Out Of Range"

Alex Kuptsikevich Alex Kuptsikevich 18.02.2022 13:20
Gold and oil, former beneficiaries of geopolitical tensions late last week, have gone their separate ways, with the former rising 2.4% and the latter losing 5% since the start of this week. Brent crude rolled back below $90 and, at one point on Friday, was losing 2.3% to $89, despite still worrying reports of tensions around Ukraine and Russia. It has fallen below the local support of the past ten days and is now just one step away from a decline since the start of the month. While geopolitics remains a joker capable of playing, either way, the macroeconomic picture is working to cool the oil price. US commercial oil inventories rose last week against a seasonally typical decline. As a result, inventories are now 10.9% lower than a year earlier, although it was -15% in mid-January. Production stagnated at 11.6m b/d, but at the end of last week, there was an increase in the number of operating oil rigs from 497 to 516. New data will be released later this evening. Probably, we will see more evidence that producers have stepped up production, convinced of the strength of demand and record profits in many years at their disposal. Locally, the activation of extractive companies is playing into the price pullback from current levels. However, it is a factor in slowing price growth in the longer term, but not a failure. The vector of monetary policy is also worth paying attention to. Rising rates often derail speculative growth in oil. We saw the last two examples on this theme in 2014-2015 when oil collapsed by 75%, and in 2018, it fell by 45%. After those hard lessons, OPEC+ has worked much more closely to meet quotas, so we are talking about a correction rather than a new bear market for oil. Speaking of a local correction, we assume a pullback in the Brent price to the $85 area. That is the peak area in October last year and September 2018 and close to the 38.2% Fibonacci retracement level of the rally from December to mid-February. Deeper drawdowns are also possible if monetary tightening coincides with geopolitical détente and slowing demand. In that case, Brent might briefly correct towards $80. Positive signals on the Iran deal are also factors holding oil back. An agreement with Iran would signal an easing of some of the geopolitical tensions in the Middle East and add around 1% to the global energy system, allowing the resulting shortfall to be digested and a smooth return to restocking for the world.
Our Attention Should Be Drawn To Fed As Well, An Increase Of Interest Rate Is Likely To Come

Our Attention Should Be Drawn To Fed As Well, An Increase Of Interest Rate Is Likely To Come

Chris Vermeulen Chris Vermeulen 15.02.2022 15:31
The FED has made it very clear that it will raise its benchmark interest rate, the federal funds rate. This could have severe consequences and even lead to a financial crisis. They are too far behind the curve and will be labeled a major policy error in the future, most likely. They have put themselves in a situation where they are now their own hostage. They need more leadership to describe what a soft landing is going to look like. They have been too slow to act, and now they are going too fast. The “Powell Put” has now been put out to pasture. We believe that the FED will make more rate hikes than they have announced. Goldman Sachs thinks there will be four 25-basis-point increases in the federal funds rate in 2022. Jamie Dimon, CEO of JPMorgan Chase, said, “he wouldn’t be surprised if there were even more interest rate hikes than that in 2022. There’s a pretty good chance there will be more than four. There could be six or seven. I grew up in a world where Paul Volcker raised his rates 200 basis points on a Saturday night.” Mr. James Bullard of the St. Louis FED spoke out in an arrogant tone that aggressive action is now required. The markets translated this to mean that the FED was going to call an emergency meeting as soon as this coming week to hike interest rates by no less than 50 basis points. This sent interest rates soaring and stock prices plummeting. WARNING: More Downside To Come Uncertainty abounds regarding the path of inflation and new FED policy. This has created a landscape of continued strong periods of distribution in the equity markets. If there are any bounces, they should be used to sell ‘risk assets’. This has been one of the worst starts to a calendar year in the history of the stock and bond markets. Chart Source: Zero Hedge Last Thursday, the reported inflation rate increased by 7.7 percent, the highest in forty years. Stocks tumble as red-hot inflation print pressures technology shares. Markets didn’t like this, which immediately moved them down. Bears are in control of the market, which can be observed from Friday’s trading session. The U.S. 10-year yield rose above 2% for the first time since August 2019 amid a broad Treasury-market selloff. It was driven by expectations for quicker FED interest-rate hikes to contain faster than predicted inflation. It takes at least two to three years to have any material impact on the economy. One sector is currently doing well, which is the oil sector. Cycle's analysis is applied to find the best stocks to invest in and the best sectors. The next sector we are monitoring is Gold/Silver. Crude oil prices are staying strong. There are a lot of geopolitical factors in play here. I think there's a risk premium on oil right now because of Russia. What The Heck is CPI? The Consumer Price Index, CPI, is the measure of changes in the price level of a basket of consumer goods and services. This is one of the most frequently used statistics for identifying periods of inflation in households. Consumer Price Index Summary. Last Thursday, the inflation figures were released, confirming that everything is getting more expensive. It is up 7.5 percent versus last year. Mortgage rates are starting to rise. If you plan to buy a new home, this is the time to do it. These historically low interest rates will not last long. Should I Invest In Gold Today? Owning gold acts as a hedge against inflation as well as a good portfolio diversifier as it is a great store of value. Gold also provides financial cover during geopolitical and macroeconomic uncertainty. Gold has historically been an excellent hedge against inflation because its price tends to rise when the cost-of-living increases. Conclusion: It seems the stock market may be on its last leg here. Big money flow has been coming out of the large-cap stocks while commodities have been rising. Commodities are typically one of the last assets to rally before the stock market top and start a bear market. I see all the signs, but we must wait for the price to confirm before taking action. We have seen this setup before in 2015/2016, also in 2018, and the market recovered and rallied dramatically from those levels.  What Trading Strategies Will Help You To Navigate Current Market Trends? Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals. I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking the following link:   www.TheTechnicalTraders.com 
Bonds Not Reflecting Risks Like They Usually Do – Where's The Beef?

Bonds Not Reflecting Risks Like They Usually Do – Where's The Beef?

Chris Vermeulen Chris Vermeulen 11.02.2022 21:46
I've been paying close attention to Bonds as the global markets react to rising inflation and global central bank moves recently. The US Federal Reserve has yet to take any actions to raise rates, but we all know it will come at some point. Longer-term bonds are acting as if these risks are much more subdued than many traders/investors believe – which has me questioning if global central banks have overplayed the stimulus game? Why would traditional safe-haven assets fail to act in a manner that reflects current market risks like they would typically do? Why have precious metals failed to reflect these risks also properly? Is there something brewing in traders' minds that are muting or mitigating these traditional safe-haven assets? Bonds Continue To Slide After COVID Rally This table, reflecting the recent downward trend in Bonds, highlights the weakened safe-haven tendencies. These assets would generally present with rampant inflation and the possibility of multiple Fed rate increases. (Source: SeekingAlpha.com) Increasing uncertainty throughout the globe, and as inflation climbs to the highest levels since the mid-1970s and 1980s, – “where's the beef?” (to reference a 1980s Wendy's commercial phrase). This TLT Weekly chart shows how risks climbed when COVID hit in February 2020. Yet, take a look at how price has consolidated below $156 and has continued to trend lower over the past six months. After a brief move higher, to levels near the $147 to $155 level, TLT has moved decidedly lower over the past 6+ months. This downward price trend illustrates the diminishing fear levels as traders piled into the post-COVID rally phase. This move suggests traders believe inflation may be temporary or that the US Federal Reserve has room to raise rates without disrupting the global economy. I think the current premise and price trend in TLT vastly underestimates the amount of disruption a series of Fed rate hikes would cause the international markets. The US Federal Reserve will likely consider all options before taking an aggressive move to raise rates. Additionally, the US Fed may decide to allow foreign central banks to move more aggressively to raise rates while it decides to take a more measured approach to inflation. The key to future rate increases is how supply chains open up and how consumers continue to engage in economic activities. Any sudden shift by consumers, or further disruptions in supply for manufacturing and consumer staples/discretionary items, could prompt the Fed into taking aggressive actions. From where the Fed Funds Rates currently are, a move above 0.50% would reflect a +500% rate increase. This may prompt some type of “pop” in certain asset bubbles. (Source: St. Louis Fed) Traders should stay keenly focused on market risks and Bond levels throughout 2022 into 2023 as any sudden shift away from current trends could spell trouble. Right now, Bonds are pricing in minimal risks – which may be a mistake. The market dynamics and trends are changing from what we have experienced over the past 40 years for stocks and bonds. The 60/40 portfolio is costing you money now, and bonds can’t keep up with inflation and are more or less yield-less. The only way to navigate the financial markets safely, no matter the direction, is through technical analysis. By following assets and money flows, we identify trend changes and move our capital into whatever index, sector, industry, bond, commodity, country, and even currency ETF. By following the money, you become part of new emerging trends and can profit during weak stock or bond conditions. What Trading Strategies Will Help You To Navigate Current Market Trends? Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase. This may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals. I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking the following link:   www.TheTechnicalTraders.com 
Wondering How Inflation And Fed Reaction Will Affect Gold

Wondering How Inflation And Fed Reaction Will Affect Gold

Arkadiusz Sieron Arkadiusz Sieron 18.02.2022 16:05
  Not only won’t inflation end soon, it’s likely to remain high. Whether gold will be able to take advantage of it will depend, among others, on the Fed. Do you sometimes ask yourself when this will all end? I don’t mean the universe, nor our lives, nor even this year (c’mon, guys, it has just started!). I mean, of course, inflation. If only you weren’t in a coma last year, you would have probably noticed that prices had been surging recently. For instance, America finished the year with a shocking CPI annual rate of 7.1%, the highest since June 1982, as the chart below shows. Now, the key question is how much higher inflation could rise, or how persistent it could be. The consensus is that we will see a peak this year and subsequent cooling down, but to still elevated levels. This is the view I also hold. However, would I bet my collection of precious metals on it? I don’t know, as inflation could surprise us again, just as it did to most of the economists (but not me) last year. The risk is clearly to the upside. As always in economics, it’s a matter of supply and demand. There is even a joke that all you need to turn a parrot into an economist is to teach it to say ‘supply’ and ‘demand’. Funny, huh? When it comes to the demand side, both the money supply growth and the evolution of personal saving rate implies some cooling down of inflation rate. Please take a look at the chart below. As you can see, the broad money supply peaked in February 2021. Assuming a one-year lag between the money supply and price level, inflation rate should reach its peak somewhere in the first quarter of this year. There is one important caveat here: the pace of money supply growth has not returned to the pre-pandemic level, but it stabilized at about 13%, double the rate seen at the end of 2019. Inflation was then more or less at the Fed’s target of 2%, so without constraining money supply growth, the US central bank couldn’t beat inflation. As the chart above also shows, the personal saving rate has returned to the pre-pandemic level of 7-8%. It means that the bulk of pent-up demand has already materialized, which should also help to ease inflation in the future. However, not all of the ‘forced savings’ have already entered the market. Thus, personal consumption expenditures are likely to be elevated for some time, contributing to boosted inflation. Regarding supply factors, although some bottlenecks have eased, the disruptions have not been fully resolved. The spread of the Omicron variant of the coronavirus and regional lockdowns in China could prolong the imbalances between booming demand and constrained supply. Other contributors to high inflation are rising producer prices, increasing house prices and rents, strong inflation expectations (see the chart below), and labor shortages combined with fast wage growth. The bottom line is that, all things considered – in particular high level of demand, continued supply issues, and de-anchored inflation expectations – I forecast another year of elevated inflation, but probably not as high as in 2021. After reaching a peak in a few months, the inflation rate could ease to, let’s say, around 4% in December, if we are lucky. Importantly, the moderate bond yields also suggest that inflation will ease somewhat later in 2022. What does it mean for the gold market? Well, I don’t have good news for the gold bulls. Gold loves high and accelerating inflation the most. Indeed, as the chart below shows, gold peaks coincided historically with inflation heights. The most famous example is the inflation peak in early 1980, when gold ended its impressive rally and entered into a long bearish trend. The 2011 top also happened around the local inflationary peak. The only exception was the 2005 peak in inflation, when gold didn’t care and continued its bullish trend. However, this was partially possible thanks to the decline in the US dollar, which seems unlikely to repeat in the current macroeconomic environment, in which the Fed is clearly more hawkish than the ECB or other major central banks. The relatively strong greenback won’t help gold shine. Surely, disinflation may turn out to be transitory and inflation may increase again several months later. Lower inflation implies a less aggressive Fed, which should be supportive of gold prices. However, investors should remember that the US central bank will normalize its monetary policy no matter the inflation rate. Since the Great Recession, inflation has been moderate, but the Fed has tightened its stance eventually, nevertheless. Hence, gold may experience a harsh moment when inflation peaks. Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care.
Bullish momentum remains strong

Bullish momentum remains strong

Florian Grummes Florian Grummes 20.02.2022 17:36
Even at the last important low (US$$1,750) on December 15th, 2021, the sentiment was still awful as the sector had become the most hated asset class. Now fast-forward, gold has been successfully breaking out of its multi month triangle and keeps sprinting higher. The bulls currently are bending the daily and weekly Bollinger Bands to the upside, and seasonality is still supportive.Gold in US-Dollar, weekly chart as of February 20th, 2022.Gold in US-Dollar, weekly chart as of February 20th, 2022.Looking at the weekly chart, it appears that gold not only broke out of a triangle consolidation pattern, but also out of a large inverse head and shoulder pattern. It’s not a textbook head and shoulder, but worthwhile noting. A measured move projection could theoretically take gold towards US$2,125! However, the monthly Bollinger Band, sitting at around US$ 1,975, might be a much more realistic target for the ongoing move. As you might remember, the zone between US$1,950 to US$1,975 is very strong resistance. We would not rule out a short-lived overshoot towards US$,2000, though.Overall, the weekly chart is not yet overbought and looks bullish. Hence, the rally has very good chances to continue for a few more weeks.Gold in US-Dollar, daily chart as of February 20th, 2022.Gold in US-Dollar, daily chart as of February 20th, 2022.As expected, the breakout above US$1,840 to US$1,850 has unleashed enough energy to quickly push gold prices towards the round psychological number of US$1,900. Fortunately, the daily stochastic has transformed its overboughtness into the rare “embedded status”, where both signal lines are sitting above 80 for more than three days in a row. Hence, the uptrend is locked-in and shorting this market would be fighting the uptrend.Of course, given the uncertain and complex geopolitical situation, events can and likely will strongly influence gold over the coming days and weeks. Speaking from a technical point of you, any pullback towards the breakout zone around US$1,845 would be a buying opportunity. However, prices below US$1,875 would already be a surprise in the short-term. On the contrary, it’s much more likely that gold will continue its run to at least US$1,930 over the coming days.In summary, the daily chart is bullish. Especially the bullish embedded stochastic oscillator likely will not allow any larger pullback, but rather a consolidation around US$1,900. Watch those two signal lines. Only if one of them would be dropping below 80on a daily close, the bull run might be over!GDX (VanEck Gold Miners ETF) in US-Dollar, daily chart as of February 20th, 2022.GDX, daily chart as of February 20th, 2022.Gold & gold related mining stocks often stabilize your portfolio during uncertain times and do act as a hedge. While the stock market continued its dive due to the crisis in Ukraine and the potential interest rate turnaround in the US, the GDX VanEck Gold Miners ETF is up more than 21.5% since its low in mid of December. Over the last two weeks, the leading gold mining stocks recorded some of their best days in the last 12 months. Last week, Barrick Gold ($GOLD) jumped up more than 7% due to good earnings, a dividend increase, and a new share repurchase program. Some smaller gold stocks like Sabina Gold & Silver ($SGSVF) went up even more (+15% Friday, 11th).Now that gold is on the rise, it’s time for the beaten down and undervalued mining stocks to catch up. Usually, it starts with the big senior produces like Barrick Gold, Agnico Eagle Mines ($AEM) and Newmont Corporation ($NEM), then the juniors like for example Victoria Gold Corp. ($VITFF) join and finally, the explorer and developers literally explode higher.However, the GDX has nearly reached its downtrend line as well as the 38.2% retracement of the whole corrective wave since August 2020. Hence, the big miners are running into string resistance and might need to consolidate soon.At the same time, note, that silver has been lagging. Silver always lags most of the time, but in the final stage of sector wide rally it suddenly passes all the other metals and shots up nearly vertically. That also typically is the sign that the rally in the sector is coming to an end. Obviously, we have not yet seen any strong silver days. Therefore, silver actually confirms that the sector has more room and time to run higher!Conclusion: Bullish momentum remains strongOverall, gold continues to look promising here as the bullish momentum remains strong. Hence, Gold is probably on the way towards US$1,950 and US$1,975, with a slight chance for an overshot to US$2,000. But of course, given the rather overbought daily chart, the risk/reward is not that good anymore. Silver and many of the smaller mining stocks, however, might still offer a chance to play the ongoing rally over the next few weeks. Once gold tops out in spring, expect a big pullback. Maybe even back towards the higher trending 200-day moving average (currently at US$1,808) at some point in midsummer. But that is all somewhere in the future. For now, the bullish momentum remains strong.Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can also subscribe to our free newsletter.Disclosure: Midas Touch Consulting and members of our team are invested in Reyna Gold Corp. These statements are intended to disclose any conflict of interest. They should not be misconstrued as a recommendation to purchase any share. This article and the content are for informational purposes only and do not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting.By Florian Grummes|February 20th, 2022|Tags: $GDXJ, Barrick Gold, GDX, Gold, Gold Analysis, Gold bullish, gold chartbook, gold fundamentals, Newmont Corporation, precious metals, Reyna Gold, Sabina Gold & Silver, Silver, silver bull, US-Dollar, Victoria Gold|0 CommentsAbout the Author: Florian GrummesFlorian Grummes is an independent financial analyst, advisor, consultant, trader & investor as well as an international speaker with more than 20 years of experience in financial markets. He is specialized in precious metals, cryptocurrencies and technical analysis. He is publishing weekly gold, silver & cryptocurrency analysis for his numerous international readers. He is also running a large telegram Channel and a Crypto Signal Service. Florian is well known for combining technical, fundamental and sentiment analysis into one accurate conclusion about the markets. Since April 2019 he is chief editor of the cashkurs-gold newsletter focusing on gold and silver mining stocks. Besides all that, Florian is a music producer and composer. Since more than 25 years he has been professionally creating, writing & producing more than 300 songs. He is also running his own record label Cryon Music & Art Productions. His artist name is Florzinho.
GBPUSD Chart - Green Candles On The Right Hand Side, USDCAD Moved Down A Little

GBPUSD Chart - Green Candles On The Right Hand Side, USDCAD Moved Down A Little

John Benjamin John Benjamin 21.02.2022 08:53
GBPUSD tests resistance The sterling edged higher after January’s retail sales beat expectations. The recent pause has been an opportunity for the bulls to accumulate. A break above 1.3640 would signal solid buying after previous failed attempts. The daily resistance at 1.3750 would be the next hurdle. Its breach could trigger a broader reversal in the weeks to come. 1.3560 is the immediate support. And 1.3490 at the lower end of the horizontal consolidation is the second line of defense in case the pair needs to attract more support. USDCAD awaits breakout The Canadian dollar tanked after disappointing retail sales in December. The US counterpart is still struggling below the supply zone around 1.2800. A close above this daily resistance could propel the pair to last December’s high at 1.2950, a prerequisite for a bullish continuation in the medium-term. The current sideways action is a sign of indecision. 1.2640 is the lower boundary of the recent consolidation range. A bearish breakout would bring the greenback to a previous low at 1.2560. EURJPY struggles for support The Japanese yen rallies amid growing risk aversion across the board. The euro continues to shed gains from the surge earlier this month. A fall below 131.90 triggered profit-taking, and the latest rally came out to be a dead cat bounce after it was capped by this support-turned-resistance. A break below 130.40 (which sits over the 30-day moving average) shows fragility in market sentiment and would cause another round of sell-off. 129.20 at the base of the bullish impetus would be the next support.
Technical Analysis: Moving Averages - Did You Know This Tool?

S&P 500 Chart And Credit Markets Candles Nears Quite Low Levels

Monica Kingsley Monica Kingsley 21.02.2022 13:33
S&P 500 opening upswing gave way to more selling, but credit markets didn‘t lead to the downside on a daily basis. This tells me the plunge would likely be challenged shortly. As in facing a reversal attempt – it‘s that junk bonds for all the recent (and still to come) deterioration, will probably rebound a little next. Value already retraced part of Friday‘s decline – it‘s just tech that didn‘t yet react to the Treasuries reprieve. Good to have taken short profits off the table. The table is set for S&P 500 to rise, and for bonds to rally somewhat. And that wouldn‘t be the result of war tensions lifting up Treasuries, gold and oil. Red hot inflation, decelerating growth and compressing yield curve are a challenging environment, and the odds of a 50bp Mar rate hike are overwhelming, but the Fed‘s balance sheet is still rising – now within spitting distance of $9T. Sure they will take on inflation, but I continue to think that by autumn they would be forced to reverse course, and start easing. Fresh stimulus after markets protest during 1H 2022? Would be helpful for the midterms... The consumer isn‘t in a great shape as the confidence data reveal – and that‘s also reflected in the direction of discretionaries vs. staples. Inflation is pinching, and the pressure on the Fed to act, is on – its credibility is being challenged. Food inflation is high, and seeing food at home prices rising this much, is as surefire marker of coming recession as yield curve inversion is. And yield differentials are flattening around the world – quite a few central banks are more ahead in the tightening path than the Fed. Economy slowing down, stock market correction far from over (yes, in spite of the coming rebound, I‘m looking for lower lows still), and precious metals upleg underway – yes, underway, and especially our gold profits can keep rising - as I wrote on Friday: (…) With gold at $1,900 again and silver approaching $24, copper‘s fate is also brightening – the miners‘ continued outperformance is a very good sign. With crude oil taking a breather, the inflationary pressures aren‘t at least increasing, but don‘t look for the Bullard or other statements to defeat inflation – I‘m standing by the 4-5% official rate CPI data for 2022 (discussed in yesterday‘s summary). CPI might turn out even a full percentage point higher – depends upon the hedonics and substitution massaging. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 caught a little buying interest going into the long weekend – better days though look to be coming. Not a monstrous rally, but still an upswing. Credit Markets HYG is indeed basing, and will help stocks move higher next. LQD and TLT are already rising, and there is still somewhat more to come. Bonds have simply deteriorated too fast in 2022, and need a breather. Gold, Silver and Miners Precious metals fireworks continue – we‘re getting started, and $1,920 is the next stop. Kiss of life from the bond market reprieve comes next, on top of all the other factors I‘ve talked about recently. Crude Oil Crude oil is fairly well bid, but the war jitters are helping it out (as in staving off a bit deeper correction). As both oil and base metals are rising, inflation isn‘t likely to slow down (perhaps later in summer?) - black gold‘s uptrend isn‘t over really. Copper Copper keeps going sideways in a volatile fashion, and can be counted on to break higher – inflationary pressures aren‘t abating, and outweigh the slowing economy. Bitcoin and Ethereum Cryptos did break down over the weekend, but the anticipated risk-on rebound fizzled out a bit too fast – as said on Friday, the bears have the upper hand now. Summary S&P 500 appears on the verge of trying to swing higher, and credit markets would be leading the charge as tech finally turns. Value had trouble declining some more on Friday already. Stock market upswing though wouldn‘t throw the precious metals bulls off balance – not too many weeks have passed since I was at the turn of the year predicting that gold (and silver with miners implied) would be the bullish surprise of 2022 – and for all the talk and preemtive tightening in the credit markets, we haven‘t yet seen the Fed move. Anyway, such a lag in moving the Fed funds rate higher, is normal these decades – we are a long way from the early 1980s when the delay between say 2-year Treasury and Fed funds rate move was some 2 months. Crude oil is likewise going to keep rising, and the same goes naturally for copper following in the footsteps. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Pinterest (PINS) Stock News and Forecast: Earnings see shares rise, but can it continue?

Pinterest (PINS) Stock News and Forecast: Earnings see shares rise, but can it continue?

FXStreet News FXStreet News 04.02.2022 16:06
Pinterest shares rise over 12% in the premarket on Friday. PINS stock surges down to an earnings beat on the top and bottom lines. Pinterest shares remain in a long-term downtrend. Pinterest (PINS) reported strong earnings after the close Thursday night that saw the stock move up over 18% in afterhours trading. So far, most of those gains are holding early on Friday with PINS at $27.70. This represents a gain of 13% from Thursday's close. Pinterest Stock News Earnings per share came in at $0.49 versus consensus estimates for $0.45. Revenue hit $846.7 million versus consensus estimates of $827.2 million. The shares immediately jumped on the news. (https://www.fxstreet.com/news) "We took important steps in 2021 with the launch of our foundational technology to deliver a video-first publishing platform. And, I'm proud to say that for the first time, we surpassed $2 billion in revenue for the year — growing 52% over the previous year — and reached our first full-year of GAAP profitability," said Ben Silbermann, CEO and co-founder of Pinterest. PINS was set up for outperformance and the risk-reward was clearly to the upside. PINS stock had closed the regular session on Thursday down over 10% as the read-across from Facebook saw investors dump the stock. (https://www.fxstreet.com/markets/equities) Just like Amazon, a surprise to the upside offered a better risk-reward profile, and so it proved with investors rushing to cover positions. Pinterest Stock Forecast Pinterest remains mired in a long-term downtrend. Paypal (PYPL) had been rumoured to be in discussion to acquire PINS back in October of last year. PINS shares had spiked to $65 on the rumour, but supposedly Paypal shareholders resisted and nothing ever happened. This led PINS shares on a steady downweard path ever since. The shares are down nearly 70% in the last year and 26% already this year. This move does not really do much to turn that trend around in our view. The big damage was done in the break of $32.34. That remains the bullish pivot. The first support is at $24.08. Pinterest (PINS) chart, (https://www.fxstreet.com/rates-charts/chart) 20 hourly
UK100 Price Trades Below Levels Of The Week Before, Silver Price Raised Noticeably

UK100 Price Trades Below Levels Of The Week Before, Silver Price Raised Noticeably

John Benjamin John Benjamin 22.02.2022 08:59
USDCHF tests daily support The Swiss franc surges as the US-Russia stalemate boosts demand for safe haven assets. Consecutive drops below 0.9220 and then 0.9180 suggest that sellers have taken control. The greenback is heading towards January’s double bottom around 0.9110. A break below this key floor would trigger a deeper correction towards the psychological level of 0.9000. The RSI’s oversold situation may cause a temporary rebound. The support-turned-resistance at 0.9220 is the level to break to give the bulls any hope of recovery. XAGUSD bounces higher Bullion rallies over ongoing geopolitical tensions in Eastern Europe. Silver gained momentum after a break above the supply zone at 23.90. A brief fallback found support over 23.10 which indicates solid buying interest. The price is grinding up along a rising trendline and sentiment remains upbeat as long as it stays above the congestion area near the trendline and 23.60. January’s peak at 24.70 is the target when volatility picks up again. A bullish breakout could trigger a broader reversal in the weeks to come. UK 100 struggles for support The FTSE 100 tumbles as risk appetite slips across the board. The bulls’ latest effort to push beyond 7630 turned out to be futile. A break below 7500 suggests a lack of commitment and weighs on short-term sentiment. Intraday traders have switched sides and look to fade the next bounce towards the former support. A dip below 7430 has opened the door to 7330 as the next target. Further down, the daily support at 7240 would be a major level to keep the uptrend intact in the medium term.
Crypto Charts - BTC Monthly, Weekly, Daily Chart

Crypto Charts - BTC Monthly, Weekly, Daily Chart

Korbinian Koller Korbinian Koller 22.02.2022 09:33
Bitcoin, best in play   The Covid environment brought an additional variant risk factor to the table, especially when it comes to investor psychology. Our last weekly chart book publication made a case for positioning one’s risk hedge plays this year when equity markets most likely trade in a volatile sideways range. We also spoke of a proper wealth preservation strategy, holding both bitcoin and gold within a hedged risk reduction approach for your monies. With our primary focus on risk, the next question is allocation size between bitcoin and gold. As mentioned in the intro, it feels intuitively natural to have significant exposure to the gold side from a cycle history. Yet, insurance seems essential at this time, and as such, we tend to be a bit more aggressive towards bitcoin allocations. Bitcoin, daily chart, not just yet: Bitcoin, daily chart as of February 22nd, 2022. The daily chart reflects the common notion of bitcoin trading alongside PMI numbers and the market as a whole. With the recent break of the modest bounce from the US$33,500 level up leg (yellow up-channel), no immediate low-risk entries for longer-term exposure seems in play.   Bitcoin, weekly chart, great setup, bitcoin, best in play: Bitcoin, weekly chart as of February 22nd, 2022. Nevertheless, we find now zooming out to the weekly time frame a quite interesting entry zone (white box) between the levels US$30,000 to US$34,000. We identified by stacking multiple edges that an entry near US$31,800 would provide the most low-risk entry profile. However, it will depend on how prices will arrive at these levels. As such, we encourage you to check back in our free Telegram channel.  There we post-entries, and exits for educational purposes in real-time. Bitcoin, monthly chart, amazing potential: Bitcoin, monthly chart as of February 22nd, 2022. Where matters become more transparent, and our headlines supported, is at a view of the monthly chart. The first leg up was nothing short of a 1,600% advancement. Now we have been trading for a year in a bullish up sloping sideways channel. With a possible entry at the lows of this channel, a long-term investment provides for a stellar risk/reward-ratio. The second legs are typically longer than the first legs! But that is not all; bitcoin has a higher probability of four-leg moves versus three-leg moves. Consequently, this trade could turn out to be highly profitable after some time. One aspect of risk is the relationship between the size of a potential down move of price and the size of a likely up move. We find bitcoins’ upward potential much more significant than gold for its fundamental characteristics and stellar outperforming history percentagewise. Bitcoin, best in play: Summing it up, bitcoin might not be at its lowest retracement levels yet. Still, its powerful potential in risk/reward-ratio and as an overall risk hedge makes it best in play. We share a low-risk cost averaging in strategy in our free Telegram channel. We find that allocation of funds should be more dominant towards bitcoin. In addition, holding some cash as much as money is deflating can still be a good strategy. Cash is king to purchase desired goods and vehicles, especially when those are even more depressed.    Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on precious metals and cryptocurrencies, you can also subscribe to our free newsletter. Disclosure: This article and the content are for informational purposes only and do not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|February 22nd, 2022|Tags: Bitcoin, Bitcoin bounce, bitcoin consolidation, Bitcoin correction, crypto analysis, crypto chartbook, DeFi, Gold, Gold bullish, low risk, NASDAQ, quad exit, S&P 500, technical analysis, trading education|0 Comments
Credit Markets Trades Really Low, Oil Price Reaches High Levels At The Same Time

Credit Markets Trades Really Low, Oil Price Reaches High Levels At The Same Time

Monica Kingsley Monica Kingsley 22.02.2022 15:36
S&P 500 is waking up to fresh European news, and holds up well. There is no panic upswing in gold and silver, but crude oil and natural gas are up the most. As the U.S. markets are to open following yesterday‘s Washington‘s Birthday holiday, let‘s bring up the key details of yesterday‘s analysis: (…) S&P 500 opening upswing gave way to more selling, but credit markets didn‘t lead to the downside on a daily basis. This tells me the plunge would likely be challenged shortly. As in facing a reversal attempt – it‘s that junk bonds for all the recent (and still to come) deterioration, will probably rebound a little next. Value already retraced part of Friday‘s decline – it‘s just tech that didn‘t yet react to the Treasuries reprieve. Good to have taken short profits off the table. The table is set for S&P 500 to rise, and for bonds to rally somewhat. And that wouldn‘t be the result of war tensions lifting up Treasuries, gold and oil. Red hot inflation, decelerating growth and compressing yield curve are a challenging environment, and the odds of a 50bp Mar rate hike are overwhelming, but the Fed‘s balance sheet is still rising – now within spitting distance of $9T. Sure they will take on inflation, but I continue to think that by autumn they would be forced to reverse course, and start easing. Fresh stimulus after markets protest during 1H 2022? Would be helpful for the midterms... The consumer isn‘t in a great shape as the confidence data reveal – and that‘s also reflected in the direction of discretionaries vs. staples. Inflation is pinching, and the pressure on the Fed to act, is on – its credibility is being challenged. Food inflation is high, and seeing food at home prices rising this much, is as surefire marker of coming recession as yield curve inversion is. And yield differentials are flattening around the world – quite a few central banks are more ahead in the tightening path than the Fed. Economy slowing down, stock market correction far from over (yes, in spite of the coming rebound, I‘m looking for lower lows still), and precious metals upleg underway – yes, underway, and especially our gold profits can keep rising - as I wrote on Friday: (…) With gold at $1,900 again and silver approaching $24, copper‘s fate is also brightening – the miners‘ continued outperformance is a very good sign. With crude oil taking a breather, the inflationary pressures aren‘t at least increasing, but don‘t look for the Bullard or other statements to defeat inflation – I‘m standing by the 4-5% official rate CPI data for 2022 (discussed in yesterday‘s summary). CPI might turn out even a full percentage point higher – depends upon the hedonics and substitution massaging. What a long quote – let‘s update it with the premarket action. S&P 500 is still waiting with its potential upsing, dollar has gone nowhere really, and precious metals look like having a bright day today. The crude oil upswing shows that markets don‘t like the geopolitical news, and are likely to behave in a risk-off way of late (Treasuries, gold and oil up benefiting most). The internals of today‘s stock market action would be telling – I recently got an interesting question touching also upon rates and real estate: Q: I read your most recent newsletter with great interest: 1. You think the Fed would start to ease this fall? In your opinion, how long would that last?  Midterm would be done soon there after so would it be a quick few months then revert back to higher rates? 2. I’m asking question #1 as it would impact real estate. 3. You anticipate a “temporary” rise in the S&P this week? Are you thinking just a few days? I noticed 10 yr is going down. A: Thank you for asking. I'll take 1 & 2 in one go - I think they would change course latest autumn. So, now hawkish and raising, then turning to easing before midterms. Let's see first the damage this tightening does, and the degree to which they then turn dovish. As regards real estate, it's slowing down, homebuilders, XLRE... Headwinds would be stiffening, rates are eating into mortgages, but those ZIP codes where immigration into is high, would do best - but the overall, total real estate isn't an appealing proposition. When markets open, there is likely to be a little SPX rally off oversold readings. Sure, they can get more oversold - that's the way it goes during bearish episodes, which is why I'm not long. The trend for now is to the downside, so I would keep predominantly looking and taking opportunities to short. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 caught a little buying interest going into the long weekend – better days though look to be coming. Not a monstrous rally, but still an upswing. Credit Markets HYG is indeed basing, and will help stocks move higher next. LQD and TLT are already rising, and there is still somewhat more to come. Bonds have simply deteriorated too fast in 2022, and need a breather. Gold, Silver and Miners Precious metals fireworks continue – we‘re getting started, and $1,920 is the next stop. Kiss of life from the bond market reprieve comes next, on top of all the other factors I‘ve talked about recently. Crude Oil Crude oil is fairly well bid, but the war jitters are helping it out (as in staving off a bit deeper correction). As both oil and base metals are rising, inflation isn‘t likely to slow down (perhaps later in summer?) - black gold‘s uptrend isn‘t over really. Copper Copper keeps going sideways in a volatile fashion, and can be counted on to break higher – inflationary pressures aren‘t abating, and outweigh the slowing economy. Bitcoin and Ethereum Cryptos stopped breaking down today, and the price action smacks of joining in the modest risk-on upswing, as unbelievable as it sounds. Summary Yesterday‘s summary is valid also today – S&P 500 appears on the verge of trying to swing higher, and credit markets would be leading the charge as tech finally turns. Value had trouble declining some more on Friday already. Stock market upswing though wouldn‘t throw the precious metals bulls off balance – not too many weeks have passed since I was at the turn of the year predicting that gold (and silver with miners implied) would be the bullish surprise of 2022 – and for all the talk and preemtive tightening in the credit markets, we haven‘t yet seen the Fed move. Anyway, such a lag in moving the Fed funds rate higher, is normal these decades – we are a long way from the early 1980s when the delay between say 2-year Treasury and Fed funds rate move was some 2 months. Crude oil is likewise going to keep rising, and the same goes naturally for copper following in the footsteps. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Tension Beetween Ukraine And Russia Definetely Shaped News In Recent Days

EURGBP - Does The Single Currency Strengthen? Bearish GER 40 Ahead?

John Benjamin John Benjamin 23.02.2022 08:52
EURUSD bounces off support The euro surged over signs that Moscow may remain open to diplomacy. The pair found support at the base of the previous rally (1.1290), indicating the bulls’ commitment to keeping the rebound intact. The RSI’s oversold situation attracted a slew of bargain hunters betting on a lengthy rebound. A break above 1.1390 would prompt sellers to cover and pave the way for a sustained recovery. The recent peak and daily resistance at 1.1490 is a major hurdle. Its breach could extend the rally to 1.1600. EURGBP attempts reversal The sterling whipsawed after BOE officials’ comment about a “modest” rate hike over the coming months. The euro saw strong bids at the base of the February breakout rally (0.8310). A break above 0.8370 wiped out some selling interest, a prerequisite for a meaningful recovery. 0.8400 is the next resistance and its breach would further boost buyers’ confidence and propel the single currency to the recent high at 0.8475. On the downside, a bearish breakout would invalidate the rebound pattern and cause a sell-off below 0.8280. GER 40 breaks floor Trepid sentiment continues to weigh on the Dax. The plunge below the 9-month long consolidation area (14850) may foreshadow a bear market. As traders grew wary, trapped bulls would look to get out of their positions while the bears saw any rebound as an opportunity to sell into strength. An oversold RSI brought in some bids and 14850 is the immediate resistance. However, the index would remain under unless it lifts offers around 15200. Otherwise, the psychological level of 14000 would be the next stop.
Let‘s Try Again

Let‘s Try Again

Monica Kingsley Monica Kingsley 23.02.2022 15:53
S&P 500 had a wild swings day, and didn‘t rise convincingly – credit markets didn‘t move correspondingly either. The upswing looks postponed unless fresh signs of broad weakness arrive. Yesterday‘s session didn‘t tell much either way – the countdown to the upswing materializing, is on even though tech didn‘t take advantage of higher bond prices. That can still come.VIX though reversed to the downside, and the relatively calmer session we‘re likely going to experience today, would be consistent with a modest attempt for stocks to move higher. I‘m though not looking for a monstrous rally, even though we‘re trading closer to the lower end of the wide S&P 500 range for this year than to its upper border. The 4,280s are so far holding but as the Mar FOMC approaches, we‘re likely to see a fresh turn south in the 500-strong index. For now, the talk of raising rates is on the back burner – Europe is in the spotlight.Note that the flight to safety on rising tensions (Treasuries, gold and oil up) didn‘t benefit the dollar. Coupled with the yields reprieve, that makes for further precious metals gains – the bull run won‘t be toppled if soothing news arrives. Likewise crude oil isn‘t going to tank below $90, and remain there. Commodities can be counted on to keep running – led by energy and agrifoods, with base metals (offering a helping hand to silver) in tow. As I wrote weeks ago, this is where the real gains are to be found.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 volume moved a little up, meaning the buying interest is still there – convincing signs of a trend change are though yet not apparent. Should prices prove to have trouble breaking lower over the next 1-2 days, this could still turn out a good place for a little long positon.Credit MarketsHYG continues basing, and keeps trading in a risk-off fashion, which is why I can‘t be wildly bullish stocks for now. Stock market gains are likely to remain subdued, noticeably subdued – as a bare minimum for today.Gold, Silver and MinersPrecious metals fireworks continue, but a little reprieve is developing – nothing though that would break the bull. The run is only starting, and would continue through the rate raising cycle.Crude OilCrude oil is fairly well bid, and doesn‘t appear to be really dipping any time soon. Oil stocks are preparing for an upswing, and would remain one of the best performing S&P 500 sectors. Tripple digit oil is a question of time.CopperCopper‘s moment in the spotlight is approaching as commodities keeps pushing higher, and base metals are breaking up. All of these factors are inflationary.Bitcoin and EthereumCryptos are attempting to move up today, and further gains are likely. I‘m though looking for the 50-day moving average in Bitcoin (corresponding roughly to the mid Feb lows in Ethereum) to prove an obstacle.SummaryS&P 500 didn‘t break to new lows overnight, and appears to be picking up somewhat today. The anticipated rebound might materialize later today, and would require bond participation to be credible. I‘m not looking for sharp gains within this upswing though – the correction looks very much to have further to run. It‘s commodities and precious metals where the largest gains are to be made, with the European tensions taking the focus off inflation (momentarily). The pressure on the Fed to act decisively, is though still on as various credit spreads tell – and the same goes for the compressed yield curve speaking volumes about the (precarious) state of the real economy.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Miners for Breakfast, Gold for Dessert: Bearish Fundamentals Will Hurt

Miners for Breakfast, Gold for Dessert: Bearish Fundamentals Will Hurt

Przemysław Radomski Przemysław Radomski 23.02.2022 15:59
  To the disappointment of gold bulls, the yellow metal’s upward trend will not last long. Fundamentals have already taken their toll on gold miners.  While gold remains uplifted due to the Russia-Ukraine drama, the GDXJ ETF declined for the second-straight day on Feb. 22. Moreover, I warned on numerous occasions that the junior miners are more correlated with the general stock market than their precious metals peers. As a result, when the S&P 500 slides, the GDXJ ETF often follows suit. To that point, with shades of 2018 unfolding beneath the surface, the Russia-Ukraine headlines have covered up the implications of the current correction. However, the similarities should gain more traction in the coming weeks. For context, I wrote on Feb. 22: When the Fed’s rate hike cycle roiled the NASDAQ 100 in 2017-2018, the GDXJ ETF suffered too. Thus, while the Russia-Ukraine drama has provided a distraction, the fundamentals that impacted both asset classes back then are present now. Please see below: To explain, the green line above tracks the GDXJ ETF in 2018, while the black line above tracks the NASDAQ 100. If you analyze the performance, you can see that the Fed’s rate hike cycle initially rattled the former and the latter rolled over soon after. However, the negativity persisted until Fed Chairman Jerome Powell performed a dovish pivot and both assets rallied. As a result, with the Fed Chair unlikely to perform a dovish pivot this time around, the junior miners have some catching up to do. Furthermore, while the S&P 500 also reacts to the geopolitical risks, the Fed’s looming rate hike cycle is a much bigger story. With the U.S. equity benchmark also following its price path from 2018, a drawdown to new 2022 lows should help sink the GDXJ ETF. Please see below: Source: Morgan Stanley To explain, the yellow line above tracks the S&P 500 from March 2018 until February 2019, while the blue line above tracks the index's current movement. If you analyze the performance, it's a near-splitting image. Moreover, while Morgan Stanley Chief Equity Strategist Michael Wilson thinks a relief rally to ~4,600 is plausible, he told clients that "this correction looks incomplete." "Rarely have we witnessed such weak breadth and havoc under the surface when the S&P 500 is down less than 10%. In our experience, when such a divergence like this happens, it typically ends with the primary index catching down to the average stock," he added. As a result, while a short-term bounce off of oversold conditions may materialize, the S&P 500's downtrend should resume with accelerated fervor. In the process, the GDXJ ETF should suffer materially as the medium-term drama unfolds.  To that point, the Fed released the minutes from its discount rate meetings on Jan. 18 and Jan. 26. While the committee left interest rates unchanged, the report revealed: “Given ongoing inflation pressures and strong labor market conditions, a number of directors noted that it might soon become appropriate to begin a process of removing policy accommodation. The directors of three Reserve Banks favored increasing the primary credit rate to 0.50 percent, in response to elevated inflation or to help manage economic and financial stability risks over the longer term.” For context, the hawkish pleas came from the Cleveland, St. Louis, and Kansas City Feds. Moreover, the last time Fed officials couldn’t reach a unanimous decision was October 2019. As a result, the lack of agreement highlights the monetary policy uncertainty that should help upend financial assets in the coming months. As evidence, the report also revealed: Source: U.S. Fed Thus, while I’ve highlighted on numerous occasions that a bullish U.S. economy is bearish for the PMs, the Russia-Ukraine drama has been a short-term distraction. However, with Fed officials highlighting that growth and inflation meet their thresholds for tightening monetary policy, higher real interest rates and a stronger USD Index will have much more influence over the medium term. To that point, IHS Markit released its U.S. Composite PMI on Feb. 22. With the headline index increasing from 51.1 in January to 56.0 in February, an excerpt from the report read: “February data highlighted a sharp and accelerated increase in new business among private sector companies that was the fastest in seven months. Firms mentioned that sales were boosted by the retreat of the pandemic, improved underlying demand, expanded client bases, aggressive marketing campaigns and new partnerships. Customers reportedly made additional purchases to avoid future price hikes. Quicker increases in sales (trades) were evident among both manufacturers and service providers.” More importantly, though: Source: IHS Markit In addition, since the Fed’s dual mandate includes inflation and employment, the report revealed: Source: IHS Markit Likewise, Chris Williamson, Chief Business Economist at IHS Markit, added: “With demand rebounding and firms seeing a relatively modest impact on order books from the Omicron wave, future output expectations improved to the highest for 15 months, and jobs growth accelerated to the highest since last May, adding to the upbeat picture.” If that wasn't enough, the Richmond Fed released its Fifth District Survey of Manufacturing Activity on Feb. 22. While the headline index wasn't so optimistic, the report revealed that "the third component in the composite index, employment, increased to 20 from 4 in January" and that "firms continued to report increasing wages." For context, the dashed light blue line below tracks the month-over-month (MoM) change, while the dark blue line below tracks the three-month moving average. If you analyze the former's material increase, it's another data point supporting the Fed's hawkish crusade. Source: Richmond Fed Finally, the Richmond Fed also released its Fifth District Survey of Service Sector Activity on Feb. 22. For context, the U.S. service sector suffers the brunt of COVID-19 waves. However, the recent decline in cases has increased consumers’ appetite for in-person activities. The report revealed: “Fifth District service sector activity showed improvement in February, according to the most recent survey by the Federal Reserve Bank of Richmond. The revenues index increased from 4 in January to 11 in February. The demand index remained in expansionary territory at 23. Firms also reported increases in spending, as the index for capital expenditures, services expenditures, and equipment and software spending all increased.” Furthermore, with the employment index increasing from 12 to 14, the wages index increasing from 41 to 46, and the average workweek index increasing from 9 to 10, the labor market strengthened in February. Likewise, the index that tracks businesses’ ability to find skilled workers increased from -21 to -19. As a result, inflation, employment and economic growth create the perfect cocktail for the Fed to materially tighten monetary policy in the coming months.  Source: Richmond Fed The bottom line? While the Russia-Ukraine saga may dominate the headlines for some time, the bearish fundamentals that hurt gold and silver in 2021 remain intact: the U.S. economy is on solid footing, and demand is still fueling inflation. Moreover, with information technology and communication services’ stocks – which account for roughly 39% of the S&P 500 – highly allergic to higher interest rates, the volatility should continue to weigh on the GDXJ ETF. As such, while gold may have extended its shelf life, mining stocks may not be so lucky. In conclusion, the PMs were mixed on Feb. 22, as the news cycle continues to swing financial assets in either direction. However, while headlines may have a short-term impact, technicals and fundamentals often reign supreme over the medium term. As a result, lower lows should confront gold, silver, and mining stocks in the coming months. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Final Target Hit on NYMEX Natural Gas!

Final Target Hit on NYMEX Natural Gas!

Sebastian Bischeri Sebastian Bischeri 23.02.2022 16:59
  The Natural Gas flight just landed after hitting its second and last target yesterday. The perfect trade does not exist, but this one has been developing pretty well following our flying map. In today’s edition, I will provide a trade review for Natural Gas futures (NGH22) following my last projections published on Friday Feb-11, for which the stop was also updated last Wednesday and trailed again last Thursday. Trade Plan Just to remember, our initial plan was relying on a gas market having to cope with stronger demand to fuel and increasing industrial activity after being surprised by the warming mid-February weather forecast. Hence, the projected rebounding floor (or support level) provided, which was ideal for the Henry Hub given the unyielding global demand for US Liquefied Natural Gas (LNG), providing a catapulting upward momentum. Then, it took a few days for the first suggested objective at $4.442 to be passed, and a few extra days for the second target located at the $4.818 level to be hit (as it was yesterday). Meanwhile, as I explained in more detail in my last risk-management-related article to secure profits, our subscribers were kindly and promptly invited to place their initial stop just below the $3.629 level (below one-month previous swing low), before receiving a couple of trading alerts suggesting they manually trail it up around the $3.886 level (around breakeven), then one more time up towards 4.180 (which corresponds to the 50% distance between initial entry and target 1), and finally to be lifted up to 4.368 optimally. Consequently, after a reconnaissance mission got close enough to target number 2, the Nat-Gas flight started running out of kerosene after passing through the first target like a fighter jet would break the sound barrier. Therefore, after getting refueled at a lower altitude (just above our highest elevation trailing stop) by a refuelling aircraft, the jet was finally ready to point and lock its last target before striking it. Here is a picture-by-picture record of that trade. First step: flight preparation on carrier ship Henry Hub Natural Gas (NGH22) Futures (March contract, daily chart) Second step: prices catapulted and stop lifted at breakeven once the mid-point target was reached Henry Hub Natural Gas (NGH22) Futures (March contract, daily chart) Third step: target one hit and stop dragged up Henry Hub Natural Gas (NGH22) Futures (March contract, daily chart) Zoom to target one (4H chart): Henry Hub Natural Gas (NGH22) Futures (March contract, 4H chart) Fourth step: mission reconnaissance to target two and refueling aircraft en route to refill the jet tank (stop trailing again) Henry Hub Natural Gas (NGH22) Futures (March contract, daily chart) Zoom to lock final target (4H chart): Henry Hub Natural Gas (NGH22) Futures (March contract, 4H chart) Fifth step: final strike to target two Henry Hub Natural Gas (NGH22) Futures (March contract, daily chart) Now, let’s zoom one more time into the 4H chart to observe the recent price action all around the abovementioned steps of our flying map: Henry Hub Natural Gas (NGH22) Futures (March contract, 4H chart) As you may observe, target one is now serving as a new landing space (support) for a new ranging market cycle. That’s all, folks, for today. I hope that you enjoyed the flight with our company! Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
It Begins

It Begins

Monica Kingsley Monica Kingsley 24.02.2022 16:00
S&P 500 reprieve that wasn‘t – the buyers didn‘t arrive, and the overnight military action sparking serious asset moves, shows that buying the dip would have been a bad idea. And it still is. Risk-on assets are likely to suffer, and I‘m not looking for a sharp, V-shaped rebound. The partial retracement seen in cryptos wouldn‘t translate to much upside in paper assets – it will likely be sold into as the bottom would take time to form. The safe haven premium seen in precious metals, crude oil and other real assets would ebb and flow, but a higher base has been established. The world has changed overnight, and recognition thereof is still pending.I think it‘s clear why I had been derisking as much as possible, wary of volatility both ways in paper assets, and betting instead on a mix of real assets. This has been hugely paying off to subscribers and readers likewise favoring gold and crude oil with some copper added for good measure.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookThis isn‘t how an S&P 500 bottom looks like – downswing continues with more volatility ahead.Credit MarketsHYG is going down again, and credit markets are turning risk-off – look for Treasuries to do relatively better next, with little impact upon stocks.Gold, Silver and MinersPrecious metals fireworks continue, and the upswing got a poweful ally. Whatever retracement seen next, would be marginal in light of the developments.Crude OilCrude oil upswing can be counted on to continue, and oil stocks would remain among the best performing S&P 500 pockets. Black gold is though notorious for its wild volatility, and the coming days won‘t be an exception.CopperCopper upswing would take time to develop, especially now – but the breakout in base metals is on, the inflationary messaging is still there and thriving.Bitcoin and EthereumCryptos aren‘t in a rally mode, but are attempting to put in a low. I don‘t think it would hold, the dust hasn‘t settled yet.SummaryS&P 500 is plunging, and attempting to base, but more selling would inevitably hit. The overnight dust hasn‘t settled yet, but the panic lows would not happen today. Even if it weren‘t for geopolitics, stocks were in rough waters for weeks already, in a serious, yields and liquidity driven correction, with a slowing real economy on top. For all the short-term focus, the buying opportunity would materialize only once the Fed turns – by autumn 2022. The best places to be in right now, are those presented below – precious metals and commodities – as inflation fires continue to rage on.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
USDNOK Nears 9.000 Level, GBPUSD Trades Ca. 1.335, GER 40 (DAX) Opened Quite Lower

USDNOK Nears 9.000 Level, GBPUSD Trades Ca. 1.335, GER 40 (DAX) Opened Quite Lower

John Benjamin John Benjamin 28.02.2022 10:32
GBPUSD looks to steady The sterling recoups some losses as sentiment stabilizes after the initial fear-driven sell-off. A clean cut through the daily support at 1.3360 has triggered a wave of liquidation. Sentiment remains downbeat despite the recent rebound. A deeply oversold RSI attracted some bargain hunters. However, the pound is vulnerable to another sell-off as buyers could be wary of catching a falling knife. 1.3500 from the previous consolidation range is the closest resistance. Further down, 1.3200 (near last December’s lows) might be the next target. USDNOK breaks rising trendline The US dollar consolidates as the Ukraine conflict makes a too aggressive move by the Fed unlikely. A short-lived surge above the supply area (9.0300) indicates strong selling pressure around 9.0900. Then a fall below the rising trendline calls the recent rebound into question. 8.7900 is the next support and buyers will need to lift offers around 9.0900 before they could hope for a meaningful comeback. Further down, this month’s low at 8.6800 is a key floor to keep the greenback afloat. GER 40 attempts to rebound The Dax 40 rebounds as traders bet that sanctions against Russia may not reach their full extent. The index saw solid bids near its 12-month lows (13800). The RSI’s repeated oversold indication has led short-term sellers to take profit in this key demand zone. 14850 from the tip of a previous bounce is the immediate resistance where the bears could be awaiting to sell into strength. A bullish breakout could soothe a battered mood. Otherwise, another round of sell-off may push the index below 13500.
Having A Look At The Markets Considering Tensions, COVID-19 And National Banks Decisions

Having A Look At The Markets Considering Tensions, COVID-19 And National Banks Decisions

Marc Chandler Marc Chandler 28.02.2022 15:36
February 28, 2022  Macro March will be a pivotal month. Three key elements shape the investment climate: geopolitics, easing of Covid pressures in Europe and North America, and the continued monetary policy response.  Russia's threat to Ukraine had been simmering for several weeks before the February 11 warning by the US that an attack was imminent.  It became a significant risk-off factor and added to the pressure on equities, while helping support the bond markets.   While several concessions were offered, there has been no common ground on the key issue of NATO enlargement. Whatever military victory Putin may enjoy, Russia will see more NATO rather than less.  Not only will NATO boost its presence, but it is possible that Sweden (and maybe Finland) joins the military pact.  The risk is that the economic fallout from Russia's military action spurs more inflation and weaker growth.  Most immediately, it has seen the market downgrade the chances of a large rate hike (50 bp) by the Federal Reserve or the Bank of England at their mid-March meetings.     The virus appears to be receding and social restrictions are being lifted in Europe and North America. Economies are re-opening.  Delivery times are improving, suggesting supply chain disruptions are easing. After a slow start, the G7 economies appear to be strengthening, with the exception of Japan. Japan imposed new social restrictions in late January that ran through mid-February.  The February composite PMI was below the 50 boom/bust level for the second consecutive month. In the UK and France, the service PMI has risen above the manufacturing PMI, another sign of a post-Covid recovery.   The normalization of monetary policy takes a big step forward in the coming weeks with the first rate hikes by the US and Canada, and the first balance sheet reduction by the Bank of England.  The European Central Bank will update is forward guidance for its asset purchases and is expected to allow for a hike toward the end of the year.  The Bank of Japan's Yield-Curve Control cap on the 10-year bond at 0.25% may be challenged if global yields drag higher in their wake.   The Reserve Bank of Australia continues to push back against expectations of an early hike, which the swaps market says likely happens in July.   Commodity prices continue to rise.  The CRB Index rose by about 3.5% in February after a 9.8% gain in January.  It has not had a losing week since mid-December.  Adverse weather conditions in South America are helping boost corn and soy prices, which also translates into higher livestock prices.  Oil prices remain near multiyear highs and the April WTI contract has risen by around a quarter this year. The high does not seem to be in place yet, but a nuclear accord with Iran would boost supply.  US natural gas prices are up about 20% this year, but partly it is a function of the weak finish last year. Still, it is above the 200-day moving average by around 4%.  Europe's benchmark (Netherlands) has risen by almost 40%.  Higher oil and natural gas prices have knock-on effects on food production via fertilizer and pesticides, let alone transportation. We note that the last three recessions in the US were preceded by a doubling of oil prices.  The price of WTI has doubled since the start of last year.  Emerging markets have been resilient to start the year.  Brazil and Russia raised rate particularly aggressively 2021 and early this year.  Others, including Hungary, Czech, and Chile have done much of their heavy lifting.  The MSCI Emerging Market Equity Index has held in better than the MSCI World Index of developed countries in the first two months of the year (-4.9% vs. -7.8%).  Year-to-date the JP Morgan Emerging Market Currency Index has risen by almost 1%.  Carry and valuation were often cited as the main considerations.   Bannockburn's GDP-weighted currency index rose about 0.3% in February as the currencies tended to have appreciated against the dollar.  The Chinese yuan (21.8%) and euro (19.1%) have the most weighting after the US dollar (31%) in the index.  They rose by 0.7% and 0.3% respectively. The strongest performer in the index was the Brazilian real (2.1% weighting) with a 3.0% gain, followed by the Australian dollar's (2.0% weighting) 2.25% increase. The weakest by far was the Russian rouble (2.2% weighting), which tumbled 6.75%.     Dollar:   There is no doubt that the Federal Reserve will launch a new monetary cycle at the mid-March meeting.  At one point, the market had priced in a little more than an 80% chance of a 50 bp move out of the gate. The pushback was mild, but the market understood, and the odds now are near 28%, which may still be high.  The focus is on the updated economic projections and any fresh guidance on the balance sheet.  At issue is terminal target rate in the cycle.  In December, five officials projected the Fed funds target rate in 2024 would be above the long-term rate of 2.5% (all but two Fed officials saw it above 2.0%-2.5%).   The Federal Reserve is getting closer to deciding the parameters of its balance sheet strategy.  It may be a bit early for details, but Chair Powell could confirm a start around midyear.  Meanwhile, the US economy is slowing sharply after the historic inventory contribution that lifted Q4 22 growth to about 7fx%.  The Atlanta Fed's GDP tracker sees Q1 growth at 1.3% while the median forecast in Bloomberg's survey is for 1.6% GDP at an annualized pace. Still, a strong rebound is likely to play out before the more sustained slowdown, we expected, starting in H2.     Euro:  First it was the divergence of monetary policy that drove the euro to $1.1120 in January.  The euro recovered to almost $1.15 on February 10, the day before the US warned that Russia could invade Ukraine. Then it was actual invasion took the euro to almost $1.1100.  The European Central Bank's leadership opened the door to a rate hike later this year, before the US warning about Russia's deadly intentions, the market began pricing in a hike in June.  This seemed exaggerated at the time.  The ECB has been very clear on the sequence.  Bond buying, under the Asset Purchase Program will end shortly before the first rate hike. To prepare for a possible hike, the ECB needs to adjust its forward guidance on its asset purchases at the March 10 meeting. It will likely reaffirm purchases in Q2, but it may look for an exit shortly thereafter.  The market has pushed the first rate hike back to the end of Q3. Meanwhile, the US-German two-year interest rate differential continues to trend in the US favor.  Consider that at the end of last September, the US premium was a little less than 100 bp. Now it is near 200 bp.  On the eve of the pandemic, it was almost 220 bp, although there is not a one-to-one correspondence between the exchange rate and the interest rate differential, the euro was in a range between $1.10 and nearly $1.1250 in December 2020.    (February 25 indicative closing prices, previous in parentheses) Spot: $1.1270 ($1.1150) Median Bloomberg One-month Forecast $1.1300 ($1.1175)  One-month forward $1.1280 ($1.1160)    One-month implied vol 7.0% (6.0%)         Japanese Yen:  Unlike most other large economies, Japan continues to experience deflationary pressures as seen by the GDP deflator (-1.3% year-over-year Q4 2021) or the January CPI (excluding fresh food and energy, -0.5% year-over-year).  This, coupled with signs of a weak Q1 has persuaded the market that BOJ is on hold until after Governor Kuroda's term ends in April 2023.  Given the monetary policy divergence and the deterioration of the balance of payments (with rising oil and commodity prices), the yen appears vulnerable.  However, the exchange rate's correlation with the change in the US 10-year yield has slackened, while improving with equities. In other words, its "safe haven" status is outweighing carry considerations.  Still, on balance, we look for the dollar to challenge the January and February high near JPY116.35.  Above those highs, there appears to be little chart-based resistance ahead of the late 2016/early 2017 high around JPY118.60.     Spot: JPY115.55 (JPY115.25)       Median Bloomberg One-month Forecast JPY115.00 (JPY115.15)      One-month forward JPY115.50 (JPY115.20)    One-month implied vol 6.3% (6.1%)     British Pound: Sterling was stuck in a $1.35-$1.36 range for most of February.  Intraday violations common but there was only one close outside the range until Russia invaded Ukraine.  It briefly crashed through $1.32 before rebounding.  The UK gets only 5%-6% of its oil and gas from Russia, but foreign direct investment exposure can be substantial for some companies in some sectors.  Consider that BP has a 20% stake in Rosneft.  The Bank of England meets on March 17.  The market has dramatically downgraded the risk of a 50 bp move, which had been rejected in favor a 25 bp move by a 5-4 vote in February.  Before the US warning about a full-scale Russian attack, the swaps market had more than a 60% chance the BOE would deliver a 50 bp hike in March.  Two weeks later the odds have fallen to less than 20%, the lowest since mid-December.  With the base rate at 50 bp, the BOE will stop reinvesting maturing proceeds of its holdings, and GBP28 bln of bond maturing in March that will not be recycled.  The outright selling of assets from its balance sheet can begin when the base rate reaches 1.0% but it is not a trigger as much as a pre-condition.      Spot: $1.3410 ($1.3400)    Median Bloomberg One-month Forecast $1.3500 ($1.3450)  One-month forward $1.3405 ($1.3395)   One-month implied vol 7.0% (6.5%)     Canadian Dollar:  Like sterling, the Canadian dollar spent most of February in a clear range.  It broke down on the dramatic wave of risk-aversion on the Russian invasion, but, unlike sterling, it was back into the old range within 24 hours.  The US dollar's range was CAD1.2650-CAD1.2660 on the downside and CAD1.28 on the upside.  It shot up to CAD1.2860 but returned to CAD1.27 the following day.   The Bank of Canada meets on March 2.  The swaps market sees a 75% chance that the Bank of Canada delivers a 50 bp to initiate its tightening cycle.  The market is discounting almost 180 bp of hikes over the next 12 months and peaking between 2.25%-2.50% next year from 25 bp now.  It is the most among the G7 countries.  It is also where the central bank sees the neutral rate.  The Bank of Canada is also expected to signal that it plans on letting the balance sheet shrink passively, not replacing maturing securities shortly.     Spot: CAD1.2715 (CAD 1.2770)  Median Bloomberg One-month Forecast CAD1.2600 (CAD1.2690) One-month forward CAD1.2710 (CAD1.2765)    One-month implied vol 6.7% (7.1%)      Australian Dollar: After falling 2.7% in January, the Australian dollar rebounded by 2.25% in February.  Of the major currencies, only the New Zealand dollar outperformed it and its central bank hiked rates for the third consecutive meeting and announced its balance sheet reduction strategy.  Australia's economy appeared to recover quickly from the Covid-related disruption that pushed the January composite PMI below the 50 boom/bust level (46.7).  It bounced back in February to 55.9, the highest since last June.  Higher commodity prices are delivering a positive terms of trade shock.  The average monthly trade surplus was A$10.2 bln last year compared with an average of nearly A$5.7 bln in 2019. While the Reserve Bank of Australia acknowledges the possibility of rate hike later this year, the market is considerably more aggressive.  The swaps market has discounted around 145 bp in tightening over the next 12 months.  However, in recent weeks, the market has pushed the first hike in Q3 from Q2.  For the last four months, the Australian dollar has mostly traded between $0.7000 and $0.7300.  This range may continue to dominate.      Spot:  $0.7220 ($0.6990)        Median Bloomberg One-Month Forecast $0.7200 ($0.7090)      One-month forward $0.7230 ($0.6995)     One-month implied vol 10.0% (10.4%)        Mexican Peso:  The peso appreciated by 1.4% in February.  Latam currencies shined. and accounted for four of the top six EM performers, led by the 3% gain in the Brazilian real.  At her first meeting as Governor of the Bank of Mexico, Rodriguez delivered a 50 bp hike. With price pressures still accelerating, she is poised to repeat it at her second meeting on March 24.   It would bring the target rate to 6.5%.  Recall that in the last cycle, Banxico had raised its target to 8.25% before cutting by in August 2019.  It was at 7.25% in January 2020.  The swaps market expects it to peak in early near year in the 8.00%-8.25% area.  The key is inflation, which has been above 7% for three months through January.  The bi-weekly inflation report had it accelerating in mid-February.  Mexican asset markets are underperforming.  Consider, the yield on its 10-year dollar bond is up 100 bp this year.  Brazil's is up half as much. Mexico's equity benchmark is off almost 1.4% this year while the MSCI Latam equity index is up 11.5%.  The dollar set five-month lows in late February slightly below MXN20.16. It peaked in late January near MXN20.9150.  The bulk of the move is probably behind it and the MXN20.00-MXN20.10 area may offer a nearby floor.      Spot: MXN20.35 (MXN20.80)   Median Bloomberg One-Month Forecast MXN20.50 (MXN20.78)   One-month forward MXN20.46 (MXN20.90)     One-month implied vol 11.0% (10.6%)      Chinese Yuan:  Few observers seem to place any importance on Chinese officials claim that it is making the currency move flexible.  The yuan still can only move in a 2% band around the reference rate that the central bank sets daily ostensibly submissions by its banks.  Although it does not appear to intervene directly, it can still have various levers of influence.   The yuan has risen against the dollar for six of the past seven months.  The currency moves are small but have a cumulative effect. In February, the yuan rose by about 0.7% against the dollar.  It was sufficient to lift it to a new four-year high and what appears to be a new record-high against its trade-weighted basket (CFETS).  After cautioning the market against driving the yuan higher and raising the reserve requirement for foreign currency deposits (earned in part from selling the yuan to offshore buyers), the PBOC shifted in February.  It began setting the dollar's reference rate below expectations.  While a couple of large asset managers have reduced their weightings of Chinese bonds as the premium over Treasuries narrows considerably, foreign investors have been buying Chinese stocks outside of the technology and property sectors.  It is difficult to know the extent of the official tolerance of a stronger yuan when monetary and fiscal policy is more stimulative.  The dollar's low from 2017 was around CNY6.24-CNY6.25.     Spot: CNY6.3175 (CNY6.3615) Median Bloomberg One-month Forecast CNY6.3800 (CNY6.3895)  One-month forward CNY6.3300 (CNY6.3820)    One-month implied vol 3.1% (3.1%)         Disclaimer
USDCHF Trades Lower, EURGBP - EUR Weakened A Bit, US 100 Looks To Hold Its Normal Level

USDCHF Trades Lower, EURGBP - EUR Weakened A Bit, US 100 Looks To Hold Its Normal Level

Jing Ren Jing Ren 01.03.2022 10:07
USDCHF struggles for support The Swiss franc rallies as new sanctions against Russia trigger a flight to safety. The pair has met stiff resistance in the supply area (0.9290). Then a drop below 0.9220 and 0.9170 suggests that sentiment remains cautious and buyers are hesitant. 0.9150 is a key level to safeguard the greenback’s latest bounce. A bearish breakout could send the pair to the daily support at 0.9110. An oversold RSI may attract some buying interest. The bulls need to reclaim 0.9230 before they could hope for a turnaround. EURGBP attempts to rebound The euro struggles amid escalation in Western sanctions. A bullish attempt above 0.8400 indicates an upward bias as sellers cover their positions. 0.8310 has been solid support. And the market mood may become increasingly upbeat if buyers succeed in holding above this level. An extended rally may send the single currency to the daily resistance at 0.8475, where a breakout may cause a bullish reversal in the weeks to come. On the downside, a fall below the said demand zone may send the euro to 0.8260. US 100 to test key resistance The Nasdaq 100 bounces as Russia and Ukraine meet for peace talks. The index saw bids near last May’s lows (13050), an important floor to prevent further bleeding. A rebound above 14050 has prompted some sellers to take profit, easing the downward pressure for the moment. Price action is heading to the next resistance at 14500 which sits on the 30-day moving average, and high volume could be expected in this area of interest. A bullish breakout could boost sentiment in the short term and extend gains to 15280.
Told You, Risk On

Told You, Risk On

Monica Kingsley Monica Kingsley 01.03.2022 15:45
S&P 500 erased opening downside, not unexpectedly. Markets say we‘ve turned the corner, and while the medium-term correction isn‘t over, we‘re going higher for now. The tired performance in credit markets suggests that the pace of the upswing would indeed likely slow, but the dips are being bought – even the 4,300 overnight level held unchallenged.VIX is slowly calming down, and it wouldn‘t be a one-way ride. I hate to say it, but we‘re trading closer to the more complacent end of the volatility spectrum – that‘s though in line with my assumption of toned down price appreciation expectations that I discussed on Sunday and yesterday:(…) While we made local lows on Thursday after all, the upside momentum is likely to slow down next – this week would bring a consolidation within a very headline sensitive environment. It‘s looking good for the bulls at the moment – till the dynamic of events beyond markets changes.Inflation isn‘t wavering, and I‘m not looking for its meaningful deceleration given the events since Thursday, no. Friday is likely to mark a buying opportunity beyond oil and copper – these longs have very good prospects. Another part of the S&P 500 upswing explanation were the still fine fresh orders data – while the real economy has noticeably decelerated (and Q1 GDP growth would be underwhelming), solid figures would return in the latter quarters of 2022. That‘s also behind the gold downswing on Friday, which hadn‘t been confirmed by the miners – the very bright future ahead for precious metals is undisputable. And the same goes for crude oil as oil stocks foretell – the fresh long crude trade together with long S&P 500 one, are both solidly in the black already.Precious metals have found a floor, and aren‘t selling off either. In fact, they are looking at a great week ahead, and the same goes for crude oil followed to a lesser degree by copper. Weekend developments on the financial front triggered a rush into cryptos, and the bullish prospects I presented yesterday, are coming to fruition.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookDaily S&P 500 consolidation as the bulls did shake off the opening setback rather easily – and the same goes for the late session trip approaching 4,310s. Expecting more volatility of the current flavor, and higher prices then.Credit MarketsHYG managed to close above Friday‘s values, and the overall bond market strength bodes well for risk appetite ahead. Let‘s consolidate first, and march higher later.Gold, Silver and MinersPrecious metals are consolidating the high ground gained, miners aren‘t yielding, and silver weakness yesterday actually bodes well for the very short term. Launching pad before the next upleg.Crude OilCrude oil bears have a hard time from keeping black gold below $100. The table is clearly set for further gains – the chart can be hardly more bullish.CopperCopper is a laggard, but will still participate in the upswing. Its current underperformance as highlighten by yesterday‘s downswing, is a bit too odd, i.e. bound to be reversed.Bitcoin and EthereumCrypto bulls were indeed the stronger party, and similarly to gold, it‘s hard to imagine a deep dive coming to frution. I‘m looking for the safety trade to be be ebbing and flowing, now with some crypto participation sprinkled on top.SummaryS&P 500 turnaround goes on, and we‘re undergoing a consolidation that‘s as calm as can be given the recent volatility. Credit markets and the dollar though continue favoring the paper asset bulls now, but their gains would pale in comparison with select commodities such as oil and gold‘s newfound floor. Even agrifoods look to be sold down a bit too hard, and I‘m not looking for them to be languishing next as much as they have been over the last two trading days. Cryptos upswing highlights the present global uncertainties faced – as I have written on Thursday that the world has changed, the same applies for weekend banking events being reflected in the markets yesterday.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Will S&P 500 (SPX) Go Up? On Monday It Decreased By 0.24%

Will S&P 500 (SPX) Go Up? On Monday It Decreased By 0.24%

Paul Rejczak Paul Rejczak 01.03.2022 15:31
  The S&P 500 went sideways yesterday, as investors hesitated following the recent rally. Will the short-term uptrend resume? The broad stock market index lost 0.24% on Monday, after gaining 2.2% on Friday and 1.5% on Thursday. The sentiment improved following the Thursday’s rebound, but there’s still a lot of uncertainty following the ongoing Russia-Ukraine conflict news. On Thursday, the broad stock market reached the low of 4,114.65 and it was 704 points or 14.6% below the January 4 record high of 4,818.62. And yesterday it went closer to the 4,400 level. For now, it looks like an upward correction. However, it may also be a more meaningful reversal following a deep 15% correction from the early January record high. The market sharply reversed its short-term downtrend, but will it continue the advance? This morning the S&P 500 index is expected to open 0.2% lower and we may see some more volatility. The nearest important resistance level remains at 4,400 and the next resistance level is at 4,450-4,500. On the other hand, the support level is at 4,300-4,350, among others. The S&P 500 index broke slightly above the downward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Futures Contract Remains Above the 4,300 Level Let’s take a look at the hourly chart of the S&P 500 futures contract. On Thursday it sold off after breaking below the 4,200 level. Since Friday it is trading along the 4,300 mark. We are still expecting an upward correction from the current levels (chart by courtesy of http://tradingview.com): Conclusion The S&P 500 index fluctuated following the recent rally yesterday. This morning it is expected to open 0.2% lower and we may see some further volatility. Obviously, the markets will continue to react to the Russia-Ukraine conflict news. Here’s the breakdown: The S&P 500 index bounced from the new low on Thursday after falling almost 15% from the early January record high. We are maintaining our speculative long position. We are expecting an upward correction from the current levels. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Real Assets, Bonds and New Profits

Real Assets, Bonds and New Profits

Monica Kingsley Monica Kingsley 02.03.2022 15:49
S&P 500 broke through 4,350s in what appears a back and forth consolidation, for now. Credit markets aren‘t leading to the downside – HYG merely corrected within the risk-on sentiment. Stocks and bonds are starting to live with the new realities, and aren‘t undergoing tectonic shifts either way no matter what‘s happening in the real world. Expect to see some chop not of the most volatile flavor next, and for the bulls to step in in the near future.What‘s most interesting about bonds now, is the relenting pressure on the Fed to raise rates – the 2-year yield is moving down noticeably, and that means much practical progress on fighting inflation can‘t be expected. Not that there was much to start with, but the expectations of the hawkish Fed talk turning into action, are being dialed back. The current geopolitical events provide a scene to which attention is fixated while inflation fires keep raging on with renewed vigor (beyond energies) – just as I was calling for a little deceleration in CPI towards the year end bringing it to probably 5-6%, this figure is starting to look too optimistic on the price stability front.Predictable consequence are strong appreciation days across the board in commodities and precious metals – let‘s enjoy the sizable open profits especially in oil and copper. I told you weeks ago that real assets are where to look for in portfolio gains – and even the modest S&P 500 long profits taken off the table yesterday, are taking my portfolio performance chart to fresh highs. I hope you‘ve been enjoying my calls, and are secure in the turmoil around. Way more profits are on the way, and I am not even discussing the lastest agrifoods calls concerning wheat and corn, for all the right reasons (just check out the key exporters overview)…Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookThis time, the S&P 500 bulls didn‘t shake off the selling pressure – the broad retreat though smacks of temporary setback. As in that the direction to the downside hasn‘t been decided yet – I‘m looking for the buyers to dip their toes here.Credit MarketsHYG downswing didn‘t attract too many sellers, and was partially bought, which means that the pendulum is ready to shift (have a go at shifting) the other way now.Gold, Silver and MinersPrecious metals are doing just great, and can be counted on to extend gains. Remember about the rate raising reappreciation that I talked in the long opening part of today‘s analysis – at central banks, that‘s where to look financially.Crude OilCrude oil bears have been taken to the woodshed, except that not at all discreetly. Let‘s keep riding this bull that had brought great profits already, for some more – as I have learned, I was a lone voice calling for more upside before last week‘s events.CopperCopper is a laggard, but still taking part in the upswing. The prior underperformance which I took issue with yesterday, was indeed a bit too odd.Bitcoin and EthereumCrypto bulls are consolidating well reasoned and deserved gains, and the circumstances don‘t favor a steep downswing really. The current tight range is likely to be resolved to the upside in due course.SummaryS&P 500 turnaround is not a rickety-free ride, but goes on at its own shaky pace. Stocks are likely to consolidate today as bonds turn a little more in the risk-on side, which reflects last but not least the looming reassessment of hawkish Fed policies. That‘s where the puck is (and will increasingly be even more so as Wayne Gretzky would say) financially, and I discussed that at length in the opening part of today‘s analysis – have a good look. Precious metals and commodities already know they won‘t be crushed by any new Paul Volcker. Enjoy the profitable rides presented !Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Gold Miners – Biggest Losers? That’s What Oil Says

Gold Miners – Biggest Losers? That’s What Oil Says

Finance Press Release Finance Press Release 03.03.2022 15:44
After the war-driven gold rally, oil is starting to outperform. History between these two has already shown that someone may suffer. Many suggest: gold miners.The precious metals corrected some of their gains yesterday, but overall, not much changed in them. However, quite a lot happened in crude oil, and in today’s analysis we’ll focus on what it implies for the precious metals market and, in particular – for mining stocks.As you may have noticed, crude oil shot up recently in a spectacular manner. This seems normal, as it’s a market with rather inflexible supply and demand, so disruptions in supply or threats thereof can impact the price in a substantial way. With Russia as one of the biggest crude oil producers, its invasion of Ukraine, and a number of sanctions imposed on the attacking country (some of them involving oil directly), it’s natural that crude oil reacts in a certain manner. The concern-based rally in gold is also understandable.However, the relationship between wars, concerns, and prices of assets is not as straightforward as “there’s a war, so gold and crude oil will go up.” In order to learn more about this relationship, let’s examine the most similar situation in recent history to the current one, when oil supplies were at stake.The war that I’m mentioning is the one between Iraq and the U.S. that started almost 20 years ago. Let’s see what happened in gold, oil, and gold stocks at that time.The most interesting thing is that when the war officially started, the above-mentioned markets were already after a decline. However, that’s not that odd, when one considers the fact that back then, the tensions were building for a long time, and it was relatively clear in advance that the U.S. attack was going to happen. This time, Russia claimed that it wouldn’t attack until the very last minute before the invasion.The point here, however, is that the markets rallied while the uncertainty and concerns were building up, and then declined when the situation was known and “stable.” I don’t mean that “war” was seen as stable, but rather that the outcome and how it affected the markets was rather obvious.The other point is the specific way in which all three markets reacted to the war and the timing thereof.Gold stocks rallied initially, but then were not that eager to follow gold higher, but that’s something that’s universal in the final stages of most rallies in the precious metals market. What’s most interesting here is that there was a time when crude oil rallied substantially, while gold was already declining.Let me emphasize that once again: gold topped first, and then it underperformed while crude oil continued to soar substantially.Fast forward to the current situation. What has happened recently?Gold moved above $1,970 (crude oil peaked at $100.54 at that time), and then it declined heavily. It’s now trying to move back to this intraday high, but it was not able to do so. At the moment of writing these words, gold is trading at about $1,930, while crude oil is trading at about $114.In other words, while gold declined by $30, crude oil rallied by about $14. That’s a repeat of what we saw in 2003!What happened next in 2003? Gold declined, and the moment when crude oil started to visibly outperform gold was also the beginning of a big decline in gold stocks.That makes perfect sense on the fundamental level too. Gold miners’ share prices depend on their profits (just like it’s the case with any other company). Crude oil at higher levels means higher costs for the miners (the machinery has to be fueled, the equipment has to be transported, etc.). When costs (crude oil could be viewed as a proxy for them) are rising faster than revenues (gold could be viewed as a proxy for them), miners’ profits appear to be in danger; and investors don’t like this kind of danger, so they sell shares. Of course, there are many more factors that need to be taken into account, but I just wanted to emphasize one way in which the above-mentioned technical phenomenon is justified. The above doesn’t apply to silver as it’s a commodity, but it does apply to silver stocks.Back in 2004, gold stocks wiped out their entire war-concern-based rally, and the biggest part of the decline took just a bit more than a month. Let’s remember that back then, gold stocks were in a very strong medium- and long-term uptrend. Right now, mining stocks remain in a medium-term downtrend, so their decline could be bigger – they could give away their war-concern-based gains and then decline much more.Mining stocks are not declining profoundly yet, but let’s keep in mind that history rhymes – it doesn’t repeat to the letter. As I emphasized previously today, back in 2003 and 2002, the tensions were building for a longer time and it was relatively clear in advance that the U.S. attack was going to happen. This time, Russia claimed that it wouldn’t attack until the very last minute before the invasion. Consequently, the “we have to act now” is still likely to be present, and the dust hasn’t settled yet – everything appears to be unclear, and thus the markets are not returning to their previous trends. Yet.However, as history shows, that is likely to happen. Either immediately, or shortly, as crude oil is already outperforming gold.Investing and trading are difficult. If it was easy, most people would be making money – and they’re not. Right now, it’s most difficult to ignore the urge to “run for cover” if you physically don’t have to. The markets move on “buy the rumor and sell the fact.” This repeats over and over again in many (all?) markets, and we have direct analogies to similar situations in gold itself. Junior miners are likely to decline the most, also based on the massive declines that are likely to take place (in fact, they have already started) in the stock markets.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Surging Commodities

Surging Commodities

Monica Kingsley Monica Kingsley 03.03.2022 15:55
S&P 500 returned above 4,350s as credit markets indeed weren‘t leading to the downside. Consolidation now followed by more upside, that‘s the most likely scenario next. Yesterday‘s risk-on turn was reflected also in value rising more than tech. Anyway, the Nasdaq upswing is a good omen for the bulls in light of the TLT downswing – Treasuries are bucking the Powell newfound rate raising hesitation – inflation ambiguity is back. The yield curve is still compressing, and the pressure on the Fed to act, goes on – looking at where real asset prices are now, it had been indeed unreasonable to expect inflation to slow down meaningfully. Told you so – as I have written yesterday:(…) What‘s most interesting about bonds now, is the relenting pressure on the Fed to raise rates – the 2-year yield is moving down noticeably, and that means much practical progress on fighting inflation can‘t be expected. Not that there was much to start with, but the expectations of the hawkish Fed talk turning into action, are being dialed back. The current geopolitical events provide a scene to which attention is fixated while inflation fires keep raging on with renewed vigor (beyond energies) – just as I was calling for a little deceleration in CPI towards the year end bringing it to probably 5-6%, this figure is starting to look too optimistic on the price stability front.Predictable consequence are strong appreciation days across the board in commodities and precious metals. – let‘s enjoy the sizable open profits especially in oil and copper. I told you weeks ago that real assets are where to look for in portfolio gains – and even the modest S&P 500 long profits taken off the table yesterday, are taking my portfolio performance chart to fresh highs. Crude oil keeps rising as if there‘s no tomorrow, copper is joining in, agrifoods are on fire – and precious metals continue being very well bid. Cryptos aren‘t selling off either. Anyway, this is the time of real assets...Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 bulls are back, and I‘m looking for consolidation around these levels. The very short-term direction isn‘t totally clear, but appears favoring the bulls unless corporate junk bonds crater. Not too likely.Credit MarketsHYG performance shows rising risk appetite, but the waning volume is a sign of caution for today. Unless LQD and TLT rise as well, HYG looks short-term stretched, therefore I‘m looking for consolidation today.Gold, Silver and MinersPrecious metals are doing great, and they merely corrected yesterday – both gold and silver can be counted on to extend gains if you look at the miners‘ message. As the prospects of vigorous Fed action gets dialed back, they stand to benefit even more.Crude OilCrude oil surge is both justified and unprecedented – and oil stocks aren‘t weakening. It looks like we would consolidate in the volatile range around $110 next.CopperCopper is joining in the upswing increasingly more, and the buyer‘s return before the close looks sufficient to maintain upside momentum that had been questioned earlier in the day. The break higher out of the long consolidation, is approaching.Bitcoin and EthereumCrypto buyers are consolidating well deserved gains, and the bullish flag is being formed. The sellers are nowhere to be seen at the moment – I‘m still looking for the current tight range to be resolved to the upside next.SummaryS&P 500 has reached a short-term resistance, which would be overcome only should bonds give their blessing. It‘s likely these would confirm the risk-on turn, but HYG looks a bit too extended – its consolidation of high ground gained, could slow the stock bulls somewhat. The risk appetite and „rush to safety“ in commodities and precious metals goes on, more or less squeezing select assets such as crude oil. The CRB Index upswing is though of the orderly and broad advance flavor, and does reflect the prospects of inflation remaining elevated for longer than foreseen by the mainstream.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
S&P 500 At Tipping Point To Start A Bear Market And What You Need To See

S&P 500 At Tipping Point To Start A Bear Market And What You Need To See

Chris Vermeulen Chris Vermeulen 03.03.2022 21:38
Is a bear market on the way? My research suggests the downward sloping trend line (LIGHT ORANGE in the Daily/Weekly SPY chart below) may continue to act as solid resistance – possibly prompting a further breakdown in the markets for US major indexes.As we've seen recently, news and other unexpected events prompt very large price volatility events in the US major indexes. For example, the VIX recently rose above 30 again, which shows volatility levels are currently 3x higher than normal levels.Increased Volatility & The Start Of An Excess Phase Peak Should Be A Clear WarningThis increased volatility in the markets, coupled with the increased fear of the US Fed and the global unknowns (Ukraine, China, Debt Levels, and others), may be just enough pressure to crush any upside price trends over the next few months. Technically, my research suggests the $445 to $450 level is critical resistance. The SPY must climb above these levels to have any chance of moving higher.Sign up for my free trading newsletter so you don’t miss the next opportunity! Unless the US markets find some new support and attempt to rally back towards recent highs, an “Excess Phase Peak” pattern will likely continue to unfold throughout 2022. This unique price pattern appears to have already reached a Phase 2 or Phase 3 setup. Please take a look at this Weekly GE example of an Excess Phase Peak pattern and how it transitions through Phase 1 through Phase 4 before entering an extended Bearish price trend.Read this research article about Excess Phase Peaks: HOW TO SPOT THEN END OF AN EXCESS PHASE - PART 2SPY May Already Be In A Phase 4 Excess Peak PhaseThis Daily SPY chart highlights my analysis, showing the major downward sloping trend line, the Middle Resistance Zone, and the lower Support Zone. Combined, these are acting as a “Wedge” for price over the past few weeks – tightening into an Apex near $435~440.If the US major indexes attempt to break this downward price trend, then the price must attempt to move solidly above this downward sloping price channel and try to rally back into the Resistance Zone (near $445~$450). Unless that happens, the price will likely transition into a deeper downward price move, attempting to break below recent lows, near $410, and possibly quickly moving down to the $360 level.SPY Weekly Chart Shows Consolidation Near $435 – Possibly Starting A Phase 4 Excess PeakTraders should stay keenly aware of the risks associated with the broad US and global market decline as the Ukraine war, and other unknowns continue to elevate fear and concerns related to the global economy. In my opinion, with the current excess global debt levels, extended speculative market bubbles, and the continued commodity price rally, we may be starting to transition away from an extended growth phase and into a deeper depreciation cycle phase.My research suggests we entered a new Depreciation cycle phase in late 2019 and are already more than 25 months into a potential 9.5-year global Depreciation cycle. What comes next should not surprise anyone.Read this article about Depreciation Cycle Phases: HOW TO INTERPRET & PROFIT FROM THE RISKS OF A DEPRECIATION CYCLE Traders should stay keenly focused on market risks and weaknesses. I expected the conflict in Ukraine to have been priced into the US markets over the past 7+ days. However, I believe the markets were unprepared for this scale or invasion and will attempt to settle fair stock price valuation levels as the conflict continues. This is not the same US/Global market Bullish trend we've become used to trading over the past 5+ years. Looking Forward - preparing for a possible Bear marketMarket dynamics and trends are changing from what we have experienced over the past 40 years for stocks and bonds. The 60/40 portfolio is costing you money now. Traders need an edge to stay ahead of these markets trends and to protect and profit from big trends.The only way to navigate the financial markets safely, no matter the direction, is through technical analysis. By following assets and money flows, we identify trend changes and move our capital into whatever index, sector, industry, bond, commodity, country, and even currency ETF. By following the money, you become part of new emerging trends and can profit during weak stock or bond conditions.Want Trading Strategies that Will Help You To Navigate Current Market Trends?Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals.I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking the following link:   www.TheTechnicalTraders.com 
Intraday Market Analysis – USD Consolidates Gains - 04.03.2022

Intraday Market Analysis – USD Consolidates Gains - 04.03.2022

John Benjamin John Benjamin 04.03.2022 09:19
USDJPY tests supply areaThe Japanese yen stalled after an increase in January’s unemployment rate.The pair’s rally above the supply zone around 115.80 has put the US dollar back on track. The general direction remains up despite its choppiness. 114.40 has proved to be solid support and kept the bulls in the game.A close above 115.80 would extend the rally to the double top (116.30), a major resistance on the daily chart. Meanwhile, an overbought RSI caused a limited pullback, with 115.10 as fresh support.NZDUSD breaks resistanceThe New Zealand dollar recovers amid commodity price rallies.After the pair found support near last September’s lows (0.6530), a bullish MA cross on the daily chart suggests that sentiment could be turning around. A bullish breakout above the recent high (0.6810) would further boost buyers’ confidence and lift offers to January’s high at 0.6890.On the downside, 0.6730 is the first support if buyers struggle to gather more interest. 0.6675 would be a second layer to keep the current rebound intact.UK 100 lacks supportThe FTSE 100 slipped after the second round of talks between Russia and Ukraine ended without much result.The index met stiff selling pressure at 7560 then fell below the critical floor at 7170. Increasingly bearish sentiment triggered a new round of sell-off to the psychological level of 7000 from last November.A deeper correction would lead to a retest of 6850, dampening the market mood in the medium-term. On the upside, the bulls must clear 7300 and 7450 to reclaim control of the direction.
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Sentiment turns as the U.S. looks to regulate cryptos

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Sentiment turns as the U.S. looks to regulate cryptos

FXStreet News FXStreet News 03.03.2022 16:07
Bitcoin price sees its gains being pared back a bit after more talks on regulatory crackdown out of U.S. on cryptocurrencies. Ethereum price slips further away from $3,018 after Powell's speech before Congress talked about regulating cryptocurrencies. XRP price sideways, awaiting a catalyst to go either way. Cryptocurrencies are facing some headwinds – whilst they have enjoyed more inflows of late as both Ukrainian and Russian inhabitants reverted to cryptocurrencies as an alternative means of payment to avoid sanctions – there are signs this loophole will soon be closed. During Biden's State of the Union speech the president asked for a crackdown on cryptocurrencies to close the escape route for wealthy Russians. FED chair Powell added fuel to the fire by saying that he would welcome further regulation to monitor and control cryptocurrencies better. The result is that these comments have triggered some nervousness in all significant cryptocurrency pairs. Bitcoin bulls are rejected at $44,088 with the risk of sliding back to $42,000 Bitcoin (BTC) price saw a full paring back of the losses accumulated during the Russian invasion as cryptocurrencies saw renewed cash inflow from both Russians and Ukrainians looking for alternative means of payment after both central banks had put in cash withdrawal restrictions. As Bitcoin looked to be poised for another leg higher, both Biden and Powell created some headwinds by urging for more regulatory crackdown, as it is emerging that cryptocurrencies are undermining sanctions on Russia. With this renewed negative attention towards cryptocurrencies, investors are being quick to book profits and, in the process, are pushing BTC price action to the downside. BTC price saw an initial rejection at $45,261, a level which coincides with the low of December 17, and as such triggered some profit-taking. As profit-taking continues bulls are faced with another rejection at $44,088, a level that goes back to August 06. Below that, the search for support finds nothing until $41,756 or the psychological $42,000 level near the baseline of a bearish triangle we had marked up earlier. BTC/USD daily chart As more talks are underway, a breakthrough could still happen at any moment. If that happened, it would mean that bears would fail in their attempt to squeeze out bulls and get stopped out themselves once the price pierced through $44,088 to the upside. That move would even accelerate after shooting through $45,261, with a quick rally to $48,760 and, from there, positioning Bitcoin to pop back above $50,000 next week. Ethereum bulls are defending the 55-day SMA, but support is wearing thin Ethereum (ETH) price takes another step back today after more negative connotations from FED Chair Powell in the house hearing before Congress. Next to committing to more rate hikes, Powell also drilled down on cryptocurrencies and called them a risk that needs to be prioritised with regulations. That puts greater regulation for cryptocurrencies at the top of the congressional agenda – after Ukraine, and inland inflation had pushed that bullet point further down the list. For the moment, ETH sees bulls defending the 55-day Simple Moving Average (SMA) at $2,880. Although it looks good to hold for now, in the past, the 55-day SMA has not built a solid reputation of being well respected. So expect a possible breach once the US session kicks in and Powell makes more negative comments on cryptocurrencies in his second day of congressional hearings, which will likely push ETH price below the 55-day SMA at $2,880, through the monthly pivot at $2,835, and down to a possible endpoint at around $2,695. ETH/USD daily chart As the situation in Russia further deteriorates with more sanctions on the shelf, residents will be forced even more to flee into cryptocurrencies to avoid any repercussions from the financial sanctions imposed. That would mean broad flux inflow throughout the coming days, with ETH price action popping above $3,018, and in the process breaking the double top of rejection from Tuesday and Wednesday. To the upside, that could see $3,391 for a test as the inflow will outweigh any bearish attempts from short sellers. XRP price testing monthly pivot to the downside as dollar strength weighs Ripple's (XRP) price is under pressure to the downside as bears are putting in their effort to break the new monthly pivot at $0.76. Bears are getting help from the other side of the asset pair by the dollar’s strength weighing on price action for a second consecutive day. With Ukraine's current tension and possible retaliation from Russia against the West, safe havens are broadly bid with the Greenback on the front foot and thus outpacing XRP’s valuation, resulting in a move lower. Expect XRP price to see an accelerated move once the monthly pivot at $0.76 gives way. With not much in the way, the road is open to drop to $0.62, with $0.70 and $0.68 as possible breaking off points where bears could see some profit-taking and attempts by bulls to halt the downturn. But the trifecta of the negative comments from both Biden and Powell joined with the safe-haven bid is too big of a force to withstand, making $0.62 almost inevitable in the coming hours or trading days. XRP/USD daily chart The only event that could turn this around is if a catalyst were to remove the safe-haven bid. That could come with a resolution of the current tension in Ukraine or surrender of the Russian army of some sort. In such an outcome, the safe-haven bid would evaporate, followed by a massive risk-on flow which would see XRP pop above $0.78 and rally to $0.88, taking out $0.84 along the way to the upside.
Fighting Continues: Good for Ukraine... And Gold

Fighting Continues: Good for Ukraine... And Gold

Arkadiusz Sieron Arkadiusz Sieron 03.03.2022 16:10
  Kherson fell, but Ukrainians are still fighting fiercely. In the face of war, gold also shows courage – to move steadily up. The battle of Ukraine is still going on. Russian troops took control of Kherson, a city of about 300,000 in the south of Ukraine, but other main cities haven’t been captured yet. Ukrainian soldiers even managed to conduct some counter-offensive actions near the country’s capital. There is a large Russian column advancing on Kyiv, but its progress has been very slow over the last few days due to the staunch Ukrainian resistance and Russian forces’ problems with equipment, tactics, and supplies, including fuel and food. David is still bravely fighting Goliath! Of course, Russian forces still have an advantage and are progressing. However, the pace of the invasion is much slower than Vladimir Putin and his generals expected. The Ukrainians’ defense is much fiercer, while Russia’s losses are more severe. The Russian defense ministry admitted that 498 Russian soldiers have already been killed and 1,597 wounded, but the real number is probably much higher. Even if Russia takes control of other cities, it’s unclear whether it will be able to hold them. What’s more, although the West didn’t engage directly in the war, the response of the West was much stronger than Putin could probably have expected. The US and its allies supplied Ukraine with weapons and imposed severe sanctions against Putin and the Russian governing elite, as well as on Russia’s economy and financial system. For instance, the West decided to exclude several Russian banks from SWIFT and also to freeze most of Russian central bank’s foreign currency reserve assets. Additionally, many international companies are moving out of Russia or exporting their products to this country, adding to the economic pressure. The ruble plummeted, as the chart below shows.   Implications for Gold What does the ongoing war in Ukraine mean for the precious metals market? Well, the continuous heroic stance of President Volodymyr Zelenskyy and Ukrainian defenders is not only heating up the hearts of all freedom-lovers, but also gold prices. As the chart below shows, the price of the yellow metal has soared to about $1,930, the highest level since January 2021. As a reminder, until recently, gold was unable to surpass $1,800. Thus, the recent rally is noteworthy. The war is clearly boosting the safe-haven demand for gold. Another bullish driver is rising inflation. According to early estimates, euro area annual inflation soared from 5.1% in January to 5.8%, and the war is likely to add to the inflationary pressure due to rising energy prices. Both Brent and WTI oil prices have surged above $110 per barrel. Last but not least, I have to mention Powell’s appearance before Congress. In the prepared testimony, he said that the Fed would hike the federal funds rate this month, despite the war in Ukraine: Our monetary policy has been adapting to the evolving economic environment, and it will continue to do so. We have phased out our net asset purchases. With inflation well above 2 percent and a strong labor market, we expect it will be appropriate to raise the target range for the federal funds rate at our meeting later this month. This sounds rather hawkish and, thus, bearish for gold. However, Powell acknowledged that the implications of Russia’s invasion of Ukraine for the U.S. economy are highly uncertain. The near-term effects on the U.S. economy of the invasion of Ukraine, the ongoing war, the sanctions, and of events to come, remain highly uncertain. Making appropriate monetary policy in this environment requires a recognition that the economy evolves in unexpected ways. We will need to be nimble in responding to incoming data and the evolving outlook. Hence, the war in Eastern Europe could make the Fed more dovish than expected at a time when inflation could be higher than forecasted before the war outbreak. Such an environment should be bullish for the gold market. However, there is one important caveat. The detailed analysis of gold prices shows that they declined around the first and second rounds of negotiations between Russian and Ukrainian diplomats in anticipation of the end of the conflict. However, when it became apparent that the talks ended in a stalemate, gold resumed its upward move. The implication should be clear: as long as the war continues, the yellow metal may shine, but when the ceasefire or truce is agreed, we could see a correction in the gold market. It doesn’t have to be a great plunge, but a large part of the geopolitical premium will disappear. Having said that, the war may take a while. I pray that I’m wrong, but the slow progress of the Russian invasion could prompt Vladimir Putin to adopt a “whatever it takes” stance. According to some experts, he is already more emotional than usual, and when faced with the prospects of failure, he could become even more brutal or irrational. We already see that Russian troops, unable to break the Ukrainian defense in open combat, siege the cities and bomb civilians. Hence, the continuation or escalation of Russia’s military actions could provide support for gold prices. If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
Back to Risk-Off

Back to Risk-Off

Monica Kingsley Monica Kingsley 04.03.2022 15:50
S&P 500 consolidation isn‘t turning out well for the bulls as 4,300 can be easily broken again if I look at credit markets‘ posture. Treasuries just aren‘t sliding no matter the Fed‘s ambiguity on inflation, let alone markets sniffing out rate hike ideas getting revisited. Still, tech gave up opening gains, and closed on a weak note while commodities and precious metals maintained high ground, and the dollar continued rising.The odds are stacked against paper market bulls, and as I had been telling you weeks ago already, this is the time of real assets outperformance. In this sense, miners‘ leadership is a great confirmation of more strength to come, of inflation to continue… Everyone‘s free to make their own opinion after the State of the Union address.On the bright side, the flood of recently closed series of trades spanning stocks, precious metals, oil and copper, has resulted in sharp equity curve gains – and more good calls are in the making, naturally:Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 is facing a setback, which could turn a lot worse if the sentiment turn continues. Odds are it would, and we would see some selling going into the weekend.Credit MarketsHYG refused to extend opening gains, and the message is clear, and also a reaction to the Fed‘s pronouncements. Treasuries though are more careful in the tightening prospects assessment – risk-off in bonds and the dollar continues.Gold, Silver and MinersPrecious metals are doing great, and are likely to continue rising no matter what the dollar does. There is no good reason for a selloff if you look around objectively. Miners are confirming, the upleg is underway.Crude OilCrude oil upswing isn‘t yet done, it would be premature to say so. It seems though that the time of volatile chop and new base building can continue – oil stocks are the barometer.CopperCopper outperformance leaves me a bit cautious – the advance is likely to slow down and get challenged next. It was a good run, and the red metal isn‘t at all done in the medium-term.Bitcoin and EthereumCrypto downswing is reaching a bit farther than I would have been comfortable with. The buyers are welcome to step in on good volume, but I‘m not expecting miracles today or through the weekend.SummaryS&P 500 bulls are losing the initiative, and neither credit markets nor the dollar favor a turnaround today. Treasuries rising in spite of the Fed‘s messaging are also casting a clear verdict, and the yield curve compression continues. The risk-off sentiment that is getting an intermezzo here and there, is likely to rule unless the Fed makes a profound turn before the Mar FOMC. And given the inflation dynamics with all the consequences beyond economics, that‘s unlikely to happen. Markets are thus likely to continue fearing the confluence of events till...Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Fed’s Tightening Cycle: Bullish or Bearish for Gold?

Fed’s Tightening Cycle: Bullish or Bearish for Gold?

Finance Press Release Finance Press Release 04.03.2022 16:14
This month, the Fed is expected to hike interest rates. Contrary to popular belief, the tightening doesn't have to be adverse for gold. What does history show?March 2022 – the Fed is supposed to end its quantitative easing and hike the federal funds rate for the first time during recovery from a pandemic crisis . After the liftoff, the Fed will probably also start reducing the size of its mammoth balance sheet and raise interest rates a few more times. Thus, the tightening of monetary policy is slowly becoming a reality. The golden question is: how will the yellow metal behave under these conditions?Let’s look into the past. The last tightening cycle of 2015-2019 was rather positive for gold prices. The yellow metal rallied in this period from $1,068 to $1,320 (I refer here to monthly averages), gaining about 24%, as the chart below shows.What’s really important is that gold bottomed out in December 2015, the month of the liftoff. Hence, if we see a replay of this episode, gold should detach from $1,800 and go north, into the heavenly land of bulls. However, in December 2015, real interest rates peaked, while in January 2016, the US dollar found its local top. These factors helped to catapult gold prices a few years ago, but they don’t have to reappear this time.Let’s dig a bit deeper. The earlier tightening cycle occurred between 2004 and 2006, and it was also a great time for gold, despite the fact that the Fed raised interest rates by more than 400 basis points, something unthinkable today. As the chart below shows, the price of the yellow metal (monthly average) soared from $392 to $634, or more than 60%. Just as today, inflation was rising back then, but it was also a time of great weakness in the greenback, a factor that is currently absent.Let’s move even further back into the past. The Fed also raised the federal funds rate in the 1994-1995 and 1999-2000 periods. The chart below shows that these cases were rather neutral for gold prices. In the former, gold was traded sideways, while in the latter, it plunged, rallied, and returned to a decline. Importantly, just as in 2015, the yellow metal bottomed out soon after the liftoff in early 1999.In the 1980s, there were two major tightening cycles – both clearly negative for the yellow metal. In 1983-1984, the price of gold plunged 29% from $491 to $348, despite rising inflation, while in 1988-1989, it dropped another 12%, as you can see in the chart below.Finally, we have traveled back in time to the Great Stagflation period! In the 1970s, the Fed’s tightening cycles were generally positive for gold, as the chart below shows. In the period from 1972 to 1974, the average monthly price of the yellow metal soared from $48 to $172, or 257%. The tightening of 1977-1980 was an even better episode for gold. Its price skyrocketed from $132 to $675, or 411%. However, monetary tightening in 1980-1981 proved not very favorable , with the yellow metal plunging then to $409.What are the implications of our historical analysis for the gold market in 2022? First, the Fed’s tightening cycle doesn’t have to be bad for gold. In this report, I’ve examined nine tightening cycles – of which four were bullish, two were neutral, and three were bearish for the gold market. Second, all the negative cases occurred in the 1980s, while the two most recent cycles from the 21st century were positive for gold prices. It bodes well for the 2022 tightening cycle.Third, the key is, as always, the broader macroeconomic context – namely, what is happening with the US dollar, inflation, and real interest rates. For example, in the 1970s, the Fed was hiking rates amid soaring inflation. However, in March 1980, the CPI annul rate peaked, and a long era of disinflation started. This is why tightening cycles were generally positive in the 1970s, and negative in the 1980s.Hence, it seems on the surface that the current tightening should be bullish for gold, as it is accompanied by high inflation. However, inflation is expected to peak this year. If this happens, real interest rates could increase even further, creating downward pressure on gold prices. Please remember that the real federal funds rate is at a record low level. If inflation peaks, gold bulls’ only hope will be either a bearish trend in the US dollar (amid global recovery and ECB’s monetary policy tightening) or a dovish shift in market expectations about the path of the interest rates, given that the Fed’s tightening cycle has historically been followed by an economic slowdown or recession.Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care.
We Will Probably Review All Of Inflation Indicators Around The World This Weekend

Intraday Market Analysis – USD Consolidates - 07.03.2022

John Benjamin John Benjamin 07.03.2022 09:21
USDCHF struggles for support USDCHF The US dollar softens as the Fed may settle for a less aggressive rate hike agenda. The recent sideways action is a sign of the market’s indecision. Sellers’ previous attempts to push below 0.9150 have met some buying interest in this demand zone. A definitive breakout may send the pair to January’s lows around 0.9100. Then the path of least resistance could be down, ending a three-month-long consolidation. 0.9230 is the immediate resistance and 0.9290 is a major hurdle before the greenback could bounce back. XAUUSD breaks higher XAUUSD Gold rallies as investors’ flight to safety continues. The bulls have tempered their aggressiveness after the initial surge. The latest pullback has been an opportunity to accumulate against a bullish backdrop. Price action continues to climb along the rising trendline which suggests that the direction is still up. A break above the psychological level of 2000 would bring in more momentum traders. In fact, that would send the price to August 2020’s high at 2075. Between the trendline and 1930 there is a key demand zone. GER 40 drops to a fresh low GER 40 The Dax 40 plunges for fears of stagflation in the eurozone. The index has ventured further into the bearish territory after it broke below March 2021’s lows around 14000. The liquidation is yet to end as sentiment remains downbeat. A break below the psychological level of 13000 would trigger a new round of sell-off to 12000. The RSI’s oversold situation from both daily and hourly charts may cause a limited bounce if short-term traders take profit. 13500 is the first resistance ahead and could attract more trend followers.  
Crude Oil Climbs High. Is It Enough to Enjoy a Better View?

Crude Oil Climbs High. Is It Enough to Enjoy a Better View?

Sebastian Bischeri Sebastian Bischeri 07.03.2022 16:45
  The threat of sanctions caused a stir in the markets: WTI spiked above $130 and Brent is nearing the $140 mark. Where is crude oil going next? A possible Western embargo on Russian oil caused oil prices to soar again on Monday, as stock markets feared persistent inflation and a consequent economic slowdown. On the US dollar side, the continued rally of the greenback has propelled the dollar index (DXY) towards higher levels, as it is now approaching the three-figure mark ($100), even though it has not had a huge impact on crude oil, other petroleum products, or any other commodities in general. What we rather witness here is the greenback’s safe haven effect attracting investors, much like gold would tend to act in a “store of value” role. US Dollar Index (DXY) CFD (daily chart) On the geopolitical scene, Russia-Ukraine peace talks will be resumed today in Brest (Belarus) at 14:00 GMT, while another meeting is already scheduled at the Antalya Diplomacy Forum on Thursday in Turkey. Russian Foreign Minister Sergei Lavrov and his Ukrainian counterpart Dmytro Kuleba will talk there in the presence of the Turkish foreign minister. We might therefore expect some de-escalation in the Black Sea basin this week if the two parties involved were able to reach an agreement after further negotiations. WTI Crude Oil (CLJ22) Futures (April contract, daily chart) Brent Crude Oil (BRNK22) Futures (May contract, daily chart) RBOB Gasoline (RBJ22) Futures (April contract, daily chart) Henry Hub Natural Gas (NGJ22) Futures (April contract, daily chart) Regarding natural gas, the U.S. Energy Information Administration (EIA) published its Annual Energy Outlook (AEO) 2022 report, suggesting that even with non-hydro renewable sources set to rapidly grow through 2050, oil and gas-derived sources should still remain the top energy sources to fuel most of the United States. The agency is forecasting a rise in the production of Liquefied Natural Gas (LNG) – which mainly comes from shale gas – by at least 35%! In summary, the threat of sanctions has already wiped out almost all Russian oil – at least 7% of global supply – from the world oil market. In the weeks or months to come, we can see sanctions on Russian oil exports create a boomerang effect on European economies, decreasing world market supply, increasing prices for industry, as well as even more rising expenses, and thus cost of living through a ripple effect. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
USDCAD Trades Higher, EURGBP Nears 0.83, S&P 500 (SPX) Fell A Little

USDCAD Trades Higher, EURGBP Nears 0.83, S&P 500 (SPX) Fell A Little

Jing Ren Jing Ren 08.03.2022 09:29
USDCAD breaks higher The US dollar bounces back as traders pile into safer currencies at the expense of commodity assets. The previous rally above the supply zone at 1.2800 has prompted sellers to cover. Then a follow-up pullback saw support over 1.2600, a sign of accumulation and traders’ strong interest in keeping the greenback afloat. A breakout above 1.2810 could pave the way for an extended rise to last December’s high at 1.2950, even though the RSI’s situation may briefly hold the bulls back. 1.2680 is a fresh support in case of a pullback. EURGBP bounces back The euro recoups losses as shorts cover ahead of the ECB meeting. The pair’s fall below the major floor (0.8280) on the daily chart further weighs on sentiment. The lack of support suggests that traders’ are wary of catching a falling knife. The RSI’s double-dip into the oversold area has led to profit-taking, driving the price up. However, the rally could turn out to be a dead cat bounce if the bears fade the rebound in the supply zone around 0.8360. 0.8200 is a fresh support when momentum comes back again. SPX 500 struggles to rebound The S&P 500 extended losses as investors are wary of a global economic downturn. On the daily chart, a brief rebound has met stiff selling pressure on the 30-day moving average (4410). In fact, this indicates that the bearish mood still dominates after the index fell through 4250. Buyers have failed to hold above 4230, leaving the market vulnerable to another round of sell-off. 4110 is the next stop and a bearish breakout could lead to the psychological level of 4000. 4320 is now the closest resistance ahead.
XAUUSD Chart And Bitcoin Charts - BTC/USDT And Bitcoin Vs Gold Chart

XAUUSD Chart And Bitcoin Charts - BTC/USDT And Bitcoin Vs Gold Chart

Korbinian Koller Korbinian Koller 08.03.2022 10:21
Bitcoins image boost   In times of war, unfortunately, other news is quickly overshadowed temporarily. Gold, monthly chart, cup and handle: Gold in US Dollar, monthly chart as of March 7th, 2022. One significant factor is the gold bullish monthly chart with its cup and handle price formation. The larger time frame of the related market plays a substantial role in inter-market analysis. Gold, leading wealth preservation “insurance” for your money in inflationary times, should be on a bitcoin trader/investor’s radar. We find a bullish tone in gold to support possible bitcoin price increases.     Bitcoin/Gold-Ratio, monthly chart, bitcoin is cheap: Bitcoin versus Gold in USD, monthly chart as of March 8th, 2022. An additional welcoming factor can be found in the monthly chart of the bitcoin relationship towards gold. Presently, around 20 ounces buy you one bitcoin, while in the last quarter of last year, the same bitcoin cost you instead 37 ounces of gold. Consequently, those who have exited a fiat currency system or those who constructively hedge their wealth preservation portfolio might have a greater focus on bitcoin currently as on gold; it is cheaper. Bitcoin, weekly chart, still a couple weeks: Bitcoin in USD, weekly chart as of March 8th, 2022. A look at a weekly bitcoin chart shows temporary weakness in a general up slope near an entry zone. The last two weeks provided for substantial income-producing trading through partial profit-taking. Bitcoin had delivered a 32% range from US$34,322 to US$45,400. Unfortunately, there was no directional follow-through beyond this point, and bitcoin has yet again retraced substantially. Currently, Bitcoin is hovering right above a low-risk entry zone again, and we are hawkishly looking out for low-risk entries. A look into the past shows that it took bitcoin ten weeks to turn around in scenario A. Our timing prognosis is another two weeks now before we see possibly fast advancements. Bitcoins image boost: Some think of chocolate when thinking of Switzerland, and indeed this news is sweet to the bitcoin community. Bitcoins’ last step to gain momentum is widespread adoption. News, like the 10% increase in GDP since El Salvador’s declaration of bitcoin being accepted legal tender, is impressive. Yet, it is still met with doubt due to either political or economic situations of countries that have adopted bitcoin so far. With a central money mecca now representing progressive bitcoin use and old history of a conservative, strong financial stability image backing such behavior, widespread mass doubt can be swayed towards more bitcoin adaptation.   Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on precious metals and cryptocurrencies, you can also subscribe to our free newsletter. Disclosure: This article and the content are for informational purposes only and do not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|March 8th, 2022|Tags: Bitcoin, Bitcoin bounce, Bitcoin bullish, Bitcoin consolidation, bitcoin/gold-ratio, crypto analysis, crypto chartbook, DeFi, Gold, Gold bullish, low risk, quad exit, technical analysis, trading education|0 Comments About the Author: Korbinian Koller Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
S&P 500 (SPX) Plunges, Metals And Crude Oil Prices Go Up

S&P 500 (SPX) Plunges, Metals And Crude Oil Prices Go Up

Monica Kingsley Monica Kingsley 08.03.2022 15:41
S&P 500 indeed didn‘t reverse on Friday in earnest, and both tech and value sold off hard. Not much reason to be bullish thanks to credit markets performance either – the posture is very risk-off, and the rush to commodities goes on. With a little check yesterday on the high opening prices in crude oil and copper, but still. My favorite agrifoods picks of late, wheat and corn, are doing great, and the pressure within select base metals, is building up – such as (for understandable reasons) in nickel and aluminum. Look for more to come, especially there where supply is getting messed with (this doesn‘t concern copper to such a degree, explaining its tepid price gains). And I‘m not talking even the brightest spot, where I at the onset of 2022 announced that precious metals would be the great bullish surprise this year. Those who listened, are rocking and rolling – we‘re nowhere near the end of the profitable run! Crude oil is likely to consolidate prior steep gains, and could definitely continue spiking higher. Should it stay comfortably above $125 for months, that would lead to quite some demand destruction. Given that black gold acts as a „shadow Fed funds rate“, let‘s bring up yesterday‘s rate raising thoughts and other relevant snippets: (,,,) If TLT has a message to drive home after the latest Powell pronouncements, it‘s that the odds of a 50bp rate hike in Mar (virtual certainty less than two weeks ago, went down considerably) – it‘s almost a coin toss now, and as the FOMC time approaches, the Fed would probably grow more cautious (read dovish and not hawkish) in its assessments, no matter the commodities appreciation or supply chains status. Yes, neither of these, nor inflation is going away before the year‘s end – they are here to stay for a long time to come. Looking at the events of late, I have to dial back the stock market outlook when it comes to the degree of appreciation till 2022 is over – I wouldn‘t be surprised to see the S&P 500 to retreat slightly vs. the Jan 2022 open. Yes, not even the better 2H 2022 prospects would erase the preceding setback. Which stocks would do best then? Here are my key 4 tips – energy, materials, in general value, and smallcaps. But the true winners of the stagflationary period is of course going to be commodities and precious metals. And that‘s where the bulk of recent gains that I brought you, were concentrated in. More is to come, and it‘s gold and silver that are catching real fire here. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 didn‘t do at all well yesterday, and signs of a short-term bottom are absent. It‘s entirely possible that the brief upswing that I was looking to be selling into to start the week, has been not merely postponed. Credit Markets HYG is clearly on the defensive, and TLT reassessing rate hike prospects – yet, long-dated Treasuries still declined. There is no appetite to buy bonds, and that confirms my thesis of lower lows to be made still in Mar. Gold, Silver and Miners Precious metals keep doing great, and will likely continue rising no matter what the dollar does – last three days‘ experience confirms that. This is more than mere flight to safety - I‘m looking for further price gains as the upleg has been measured and orderly so far. Crude Oil Crude oil‘s opening gap had been sold into, but we haven‘t seen a reversal yesterday. The upswing can continue, and it would happen on high volatility. I don‘t think we have seen the real spike just yet. Copper For all the above reasons, copper isn‘t rising as fast as other base metals (one of the key engines of commodities appreciation). The run is respectable, and not overheated. $5.00 would remain quite a tough nut to crack – for the time being. Bitcoin and Ethereum Cryptos haven‘t made up their mind yet, but one thing is sure – they aren‘t acting as a safe haven. Given the extent of retreat from Mar highs, it means I‘m looking for not too spectacular performance in the days ahead. Summary S&P 500 missed an opportunity to rise (even if just to open the week on a positive note), and its prospects for today aren‘t way too much brighter. It‘s that practically nothing is giving bullish signals for paper assets, and the market breadth has understandably deteriorated. The rush into precious metals, dollar and commodities remains on – these are the pockets of strength, lifting to a very modest and hidden degree Treasuries as well (these are however reassessing the hawkish Fed prospects) at a time when global growth downgrades are starting to arrive. Pretty serious figures, let me tell you. As I wrote yesterday, stocks may even undershoot prior Thursday‘s lows, but I‘m not looking for that to happen. The sentiment is very negative already, the yield curve keeps compressing, commodities are rising relentlessly, and all we got is a great inflation excuse / smoke screen. Inflation is always a monetary phenomenon, and supply chain disruptions and other geopolitical events can and do exacerbate that. Just having a look at the rising dollar when rate hike prospects are getting dialed back, tells the full risk-off story of the moment, further highlighted by the powder keg that precious metals are. And silver isn‘t yet outperforming copper, which is something I am looking for to change as we go by. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Gold Tries to Hold Above $2000 - Hard Landing Ahead?

Gold Tries to Hold Above $2000 - Hard Landing Ahead?

Przemysław Radomski Przemysław Radomski 08.03.2022 16:02
  Gold has hit $2,000 but is still struggling to maintain that historical level. It has already tried 8 times - will the ninth attempt succeed? Many indications make this doubtful. Gold is attempting to break above the $2,000 milestone, and miners are trying to break above their declining resistance line. Will they manage to do so, and if so, how long will the rally last? Yesterday, gold didn’t manage to close above the $2,000 level and it’s making another attempt to rally above it in today’s pre-market trading. However, will it be successful? Given the RSI above 70 and the strength of the current resistance, it’s doubtful. In fact, nothing has changed with regard to this likelihood since yesterday, so what I wrote about it in the previous Gold & Silver Trading Alert remains up-to-date: Gold touched $2,000 in today’s pre-market trading, which is barely above its 2021 high and below its 2020 high. Crude oil is way above both analogous levels. In other words, gold underperforms crude oil to a significant extent, just like in 2003. Interestingly, back in 2003, gold topped when crude oil rallied about 40% from its short-term lows (the late-2002 low). What happened next in 2003? Gold declined, and the moment when crude oil started to visibly outperform gold was also the beginning of a big decline in gold stocks. That makes perfect sense on the fundamental level too. Gold miners’ share prices depend on their profits (just like it’s the case with any other company). Crude oil at higher levels means higher costs for the miners (the machinery has to be fueled, the equipment has to be transported, etc.). When costs (crude oil could be viewed as a proxy for them) are rising faster than revenues (gold could be viewed as a proxy for them), miners’ profits appear to be in danger; and investors don’t like this kind of danger, so they sell shares. Of course, there are many more factors that need to be taken into account, but I just wanted to emphasize one way in which the above-mentioned technical phenomenon is justified. Back in 2003, gold stocks wiped out their entire war-concern-based rally, and the biggest part of the decline took just a bit more than a month. Let’s remember that back then, gold stocks were in a very strong medium- and long-term uptrend. Right now, mining stocks remain in a medium-term downtrend, so their decline could be bigger – they could give away their war-concern-based gains and then decline much more. Mining stocks are not declining profoundly yet, but let’s keep in mind that history rhymes – it doesn’t repeat to the letter. As I emphasized previously today, back in 2003 and 2002, the tensions were building for a longer time, and it was relatively clear in advance that the U.S. attack was going to happen. This time, Russia claimed that it wouldn’t attack until the very last minute before the invasion. Consequently, the “we have to act now” is still likely to be present, and the dust hasn’t settled yet – everything appears to be unclear, and thus the markets are not returning to their previous trends. Yet. However, as history shows, that is likely to happen. Either immediately, or shortly, as crude oil is already outperforming gold. The above chart features the GDXJ ETF. As you can see, the junior miners moved to their very strong resistance provided by the declining resistance line. This resistance is further strengthened by the 38.2% Fibonacci retracement, and the previous (late-2021) high. This means that it’s particularly strong, and any breakout here would likely be invalidated shortly. Given the clear sell signal from the RSI indicator, a turnaround here is even more likely. I marked the previous such signals to emphasize their efficiency. When the RSI was above 70, a top was in 6 out of 7 of the recent cases, and the remaining case was shortly before the final top, anyway. This resistance seems to be analogous to the $2,000 level in gold. By the way, please note that gold tried to break above $2,000 several times: twice in August 2020; twice in September 2020 (once moving above it, once moving just near this level); once in November 2020 (moving near this level); once in January 2021 (moving near this level); once in February 2022 (moving near this level). These attempts failed in each of the 7 cases mentioned above. This is the eight attempt. Will this very strong resistance break this time? Given how much crude oil has already soared, and how both markets used to react to war tensions in the case of oil-producing countries, it seems that the days of the rally are numbered. Moving back to the GDXJ ETF, please note that while gold is moving close to its all-time highs, the junior miners are not doing anything like that. In fact, they barely moved slightly above their late-2021 high. They are not even close to their 2021 high, let alone their 2020 high. Instead, junior mining stocks are just a bit above their early-2020 high, from which their prices were more than cut in half in less than a month. In other words, junior miners strongly underperform gold, which is a bearish sign. When gold finally declines – and it’s likely to, as geopolitical events tend to have only a temporary effect on prices, even if they’re substantial – junior miners will probably slide much more than gold. One of the reasons is the likely decline in the general stock market. I recently received a question about the impact the general stock market has on mining stocks, as the latter moved higher despite stocks’ decline in recent weeks. So, let’s take a look at a chart that will feature junior mining stocks, the GLD ETF, and the S&P 500 Index. Before the Ukraine crisis, the link between junior miners and the stock market was clear. Now, it's not as clear, but it’s still present. Juniors only moved to their late-2021 highs, while gold is over $100 above those highs. Juniors underperform significantly, in tune with the stock market's weakness. The gold price is still the primary driver of mining stock prices – including junior mining stocks. After all, that’s what’s either being sold by the company (that produces gold) or in the properties that the company owns and explores (junior miners). As gold prices exploded in the last couple of weeks, junior miners practically had to follow. However, this doesn’t mean that the stock market’s influence is not present nor that it’s going to be unimportant going forward. Conversely, the weak performance of the general stock market likely contributed to junior miners’ weakness relative to gold – the former didn’t rally as much as the latter. Since the weakness in the general stock market is likely to continue, and gold’s rally is likely to be reversed (again, what happened in the case of other military conflicts is in tune with history, not against it), junior miners are likely to decline much more profoundly than gold. Speaking of the general stock market, it just closed at the lowest level since mid-2021. The key thing about the above chart is that what we’ve seen this year is the biggest decline since 2020, and the size of the recent slide is comparable to what we saw as the initial wave down in 2020 – along with the subsequent correction. If these moves are analogous, the recent rebound was perfectly normal – there was one in early 2020 too. This also means that a much bigger decline is likely in the cards in the coming weeks, and that it’s already underway. This would be likely to have a very negative impact on the precious metals market, in particular on junior mining stocks (initially) and silver (a bit later). All in all, it seems that due to the technical resistance in gold and mining stocks, the sizable – but likely temporary (like other geopolitical-event-based-ones) – rally is likely to be reversed shortly. Then, as the situation in the general stock market deteriorates, junior miners would be likely to plunge in a spectacular manner. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Boeing Company Stock News and Forecast: BA slips on Russian supply woes

Boeing Company Stock News and Forecast: BA slips on Russian supply woes

FXStreet News FXStreet News 08.03.2022 16:05
Boeing stock falls as Russian raw material supplies are likely to be in short supply. Boeing earlier said it was suspending buying Russian titanium. BA stocks fell over 6% on Monday as main indices fell over 3%. Boeing (BA) stock slipped on Monday, even disproportionally versus the main market. While the S&P 500 and the Nasdaq fell in the region of 3% to 4%, Boeing underperformed as it fell just under 6.5%. Boeing Stock News Monday's move took Boeing stock to new 52-week lows as the stock remains pressured in the current risk-off environment. The Wall Street Journal reported on Monday that Boeing had suspended purchases of titanium from Russia as the company felt it had enough supply from other sources. “Our inventory and diversity of titanium sources provide sufficient supply for airplane production, and we will continue to take the right steps to ensure long-term continuity,” a Boeing spokeswoman told WSJ. Also on Monday Cowen & Co. lowered their price target for Boeing from $265 to $230. Cowen maintained their outperform rating on Boeing. Breaking Defense had last week reported that Air Force One's replacement was running up to 17 months late, according to two sources. Boeing is the supplier of Air Force One. Boeing will also likely feel headwinds from the current surge in oil prices. While not directly affected, higher oil prices will flow through to higher airfares and a likely reduction in passenger demand. This would see a knock-on but delayed demand for additional planes affecting Boeing and its main competitor, Airbus. However, Boeing does have a large military division. At the end of 2021 the Boeing Defence, Space & Security division accounted for over 33% of total Boeing revenues. The US Department of Defense is the top customer of this division. Boeing Stock Forecast Breaking the 52-week low is significant, and from the weekly chart below we can see how Boeing failed to regain its pre-pandemic levels. This should have been setting off alarm bells as stocks and indices reached all-time highs. The aerospace sector was a special case, but technically this was a bearish signal. BA stock chart, weekly The daily chart outlines the series of bearish lower lows and highs. Any rally to $185 can be used to instigate fresh bearish positions. BA stock chart, daily
Positive News From Europe Supports (BTC) Bitcoin Price - Is $40.000 Coming?

Positive News From Europe Supports (BTC) Bitcoin Price - Is $40.000 Coming?

FXStreet News FXStreet News 08.03.2022 16:05
Bitcoin price action sees bulls storming out of the gate, with BTC bouncing off a $38,073 historical pivot. BTC price set to tick $39,780 intraday in a range-trading profile. Expect to see more upside, should BTC continue its rally from positive signals out of Ukraine, and punch through the 55-day SMA. Bitcoin price action is back on the front foot today as global markets surf positive news of a ceasefire and fresh round of talks between Russia and Ukraine. The lift in positive sentiment spilled over into cryptocurrencies and saw positive prints across the board. Bitcoin was no different, with the price up 2.30% for the day at the time of writing and a possible tick of over 4% profit going into the U.S. session this evening. Bitcoin sees bulls taking over in ceasefire setback for bears Bitcoin price action is whipsawing between $45,000 to the upside and $34,000 to the downside, in a bandwidth that has been drawn since January. With global markets remaining stressed and on edge, today is set to give a sigh of relief and blow off some steam out of the pressure cooker that is Ukraine. Expect to see further decompression going into the U.S. session as this positive news gets picked up and translated into another round of bullish uplift for the cryptocurrency. BTC price is set to tick $39,780 and will try to break the high of last weekend. But bulls will immediately face another level of resistance, with the 55-day Simple Moving Average (SMA) around $40,250, and the $40,000 level in the way. Add to that the monthly pivot at $41,000 – so within a $1,000 – and there are three bearish elements capable of cutting short any attempts for further upside if no additional relief catalysts are added to the current headlines. BTC/USD daily chart Over the weekend, a ceasefire was already tried but failed after just a few minutes. Should that be the case again, expect this to break the fragile trust that has been in place now since recent talks yesterday. Expect BTC price action to be pushed back to $38,073 a drop of around 4%.
Ukraine’s Defense Shines ‒ and So Does Gold

Ukraine’s Defense Shines ‒ and So Does Gold

Arkadiusz Sieron Arkadiusz Sieron 08.03.2022 17:37
  Russian forces have made minimal progress against Ukraine in recent days. Unlike the invader, gold rallied very quickly and achieved its long-awaited target - $2000! Nobody expected the Russian inquisition! Nobody expected such a fierce Ukrainian defense, either. Of course, the situation is still very dramatic. Russian troops continued their offensive and – although the pace slowed down considerably – they managed to make some progress, especially in southern Ukraine, by bolstering air defense and supplies. The invaders are probably preparing for the decisive assault on Kyiv. Where Russian soldiers can’t break the defense, they bomb civilian infrastructure and attack ordinary people, including targeting evacuation corridors, to spread terror. Several Ukrainian cities are besieged and their inhabitants lack basic necessities. The humanitarian crisis intensifies. However, Russian forces made minimal ground advances over recent days, and it’s highly unlikely that Russia has successfully achieved its planned objectives to date. According to the Pentagon, nearly all of the Russian troops that were amassed on Ukraine’s border are already fighting inside the country. Meanwhile, the international legion was formed and started its fight for Ukraine. Moreover, Western countries have recently supplied Ukraine with many hi-tech military arms and equipment, including helicopters, anti-tank weapons, and anti-aircraft missiles, which could be crucial in boosting the Ukrainian defense.   Implications for Gold What does the war in Ukraine imply for the precious metals? Well, gold is shining almost as brightly as the Ukrainian defense. As the chart below shows, the price of the yellow metal has surged above $1,980 on Monday (March 7, 2022), the highest level since August 2020. What’s more, as the next chart shows, during today’s early trading, gold has soared above $2,020 for a while, reaching almost an all-time high. In my most recent report, I wrote: “as long as the war continues, the yellow metal may shine (…). The continuation or escalation of Russia’s military actions could provide support for gold prices.” This is exactly what we’ve been observing. This is not surprising. The war has increased the safe-haven demand for gold, while investors have become more risk-averse and have continued selling equities. As you can see in the chart below, the S&P 500 Index has plunged more than 12% since its peak in early January. Some of the released funds went to the gold market. What’s more, the credit spreads have widened, while the real interest rates have declined. Both these trends are fundamentally positive for the yellow metal. Another bullish driver of gold prices is inflation. It’s already high, and the war in Ukraine will only add to the upward pressure. The oil price has jumped above $120 per barrel, almost reaching a record peak. Higher energy prices would translate into higher CPI readings in the near future. Other commodities are also surging. For example, the Food Price Index calculated by the Food and Agriculture Organization of the United Nations has soared above 140 in February, which is a new all-time high, as the chart below shows. Higher commodity prices could lead to social unrest, as was the case with the Arab Spring or recent protests in Kazakhstan. Higher energy prices and inflation imply slower real GDP growth and more stagflationary conditions. As a reminder, in 2008 we saw rapidly rising commodities, which probably contributed to the Great Recession. In such an environment, it’s far from clear that the Fed will be very hawkish. It will probably hike the federal funds rate in March, as expected, but it may soften its stance later amid the conflict between Ukraine and the West with Russia and elevated geopolitical risks. The more dovish Fed should also be supportive of gold prices. However, when the fighting cools off, the fear will subside, and we could see a correction in the gold market. Both sides are exhausted by the conflict and don’t want to continue it forever. The Russian side has already softened its stance a bit during the most recent round of negotiations, as it probably realized that a military breakthrough was unlikely. Hence, when the conflict ends, gold’s current tailwind could turn into a headwind. Having said that, the impact of the conflict may not be as short-lived this time. I'm referring to the relatively harsh sanctions and high energy prices that may last for some time after the war is over. . The same applies to a more hawkish stance toward Russia and European governments’ actions to become less dependent on Russian gas and oil. A lot depends on how the conflict will be resolved, and whether it brings us Cold War 2.0. However, two things are certain: the world has already changed geopolitically, and at the beginning of this new era, the fundamental outlook for gold has turned more bullish than before the war. If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
Intraday Market Analysis – USD Consolidates Gains - 09.03.2022

Intraday Market Analysis – USD Consolidates Gains - 09.03.2022

John Benjamin John Benjamin 09.03.2022 08:47
USDJPY breaks higherThe Japanese yen softened after weaker-than-expected GDP in Q4. Despite choppiness in recent price action, confidence in the greenback remains high.A failed attempt at the supply zone (115.80) suggests a lack of momentum, but a swift bounce off 114.65 reveals strong enough buying interest.A bullish breakout would lead to the double top at 116.35. Its breach could end the two-month-long consolidation and trigger an extended rally towards January 2017’s highs around 118.00. 115.40 is fresh support.AUDUSD seeks supportThe Australian dollar stalls as commodity prices consolidate. The rally above 0.7310, a major supply area, has weakened selling pressure and put the pair on a bullish reversal course.The Aussie’s parabolic ascent and an overbought RSI prompted short-term buyers to take profit. As the RSI swings back into the oversold zone, the bulls may see the current fallback as an opportunity to stake in.0.7380 is a fresh resistance and 0.7250 is the immediate support. Further below 0.7170 is a critical level to keep the rebound valid.UK 100 sees limited bounceThe FTSE 100 struggles as the UK plans to ban Russian energy imports.On the daily chart, a break below the demand zone (6850) wiped out 11-months worth of gains and signaled a strong bearish bias. The RSI’s oversold situation may cause a temporary rebound, but a bearish MA cross could attract more selling interest.The liquidation is yet to end as medium-term buyers scramble for the exit. 7200 is a fresh resistance and 7450 is a major supply zone. A drop below 6800 may lead to 6500.
ECB Interest Rate Decision Is Incoming. US Core CPI And Initial Jobless Claims Are Released Tomorrow As Well – Economic Calendar by FXMAG.COM - 10/03/2022

ECB Interest Rate Decision Is Incoming. US Core CPI And Initial Jobless Claims Are Released Tomorrow As Well – Economic Calendar by FXMAG.COM - 10/03/2022

Mikołaj Marcinowski Mikołaj Marcinowski 09.03.2022 16:21
As we wrote in the weekly calendar on previous Friday, the 10th March will be dominated with European Union’s events. However, it’s good to follow news from the USA, as Core CPI And Initial Job Claims are released as well. Events’ data is courtesy of Investing.com European Union So, EU Leaders meet at 10 a.m., what’s the first major event of the day. The Summit is followed by releases of Deposit Facility Rate, ECB Marginal Lending Facility, Interest Rate Decision And Monetary Policy Statement. All of these releases take place at 12:45 p.m. Then, after a short break, ECB will speak to media (1:30 a.m.) USA US Core CPI (prev. 0.6%) And Initial Jobless Claims Are Released (215K) are presented at the same time – 1:30 a.m. Japan Half an hour before midnight investors might focus on Japanese indicators. At 11.30 p.m. Household Spending (MoM And YoY) are released. What’s more? BSI Large Manufacturing Conditions is presented twenty minutes later. This one amounted to 7.9 previously. Brazil For those interested in LATAM markets – you’re welcomed to follow news from Brazil as at the midday Retail Sales (YoY and MoM) are released. Source: Investing.com Time: GMT
EURUSD Rallies, GBPUSD Moves Up A Little, USOIL Goes Back To "Normal" (?) Levels

EURUSD Rallies, GBPUSD Moves Up A Little, USOIL Goes Back To "Normal" (?) Levels

Jing Ren Jing Ren 10.03.2022 08:43
EURUSD bounces back The euro rallies on news that the EU may issue a joint bond to fund energy and defense. The pair found bids near May 2020’s lows (1.0810). An oversold RSI on the daily chart prompted sellers to take profit, easing the downward pressure. A rally above the immediate resistance at 1.0940 and a bullish MA cross may improve sentiment in the short term. However, buyers will need to clear the support-turned-resistance at 1.1160 before they could hope for a meaningful rebound. 1.0910 is the support in case of a pullback. GBPUSD inches higher The sterling claws back losses as risk appetite makes a timid return across the board. Following a three-month-long rebound on the daily chart, a lack of support at 1.3200 and a bearish MA cross shows strong selling pressure. A bounce-back above 1.3200 may only offer temporary relief as sellers potentially look to fade the rebound. 1.3350 is a key hurdle that sits along the 20-day moving average. 1.3080 is fresh support and its breach could trigger a new round of sell-off below the next daily support at 1.2880. USOIL breaks support WTI crude tumbled after the UAE said consider boosting production. The parabolic climb came to a halt at 129.00 and pushed the RSI into an extremely overbought condition on the daily chart. A bearish RSI divergence suggested a loss of momentum and foreshadowed a correction as traders would be wary of chasing the rally. A fall below 115.00 led buyers to bail out, triggering a wave of liquidation. 105.00 is the next support and a breakout could bring the price back to 95.00 near the 30-day moving average.
DAX (GER 40) Has Lost About 3% Over last 24 hours. Mercedes (MBG), Delivery Hero (DHER) And BMW Have Decreased.

DAX (GER 40) Has Lost About 3% Over last 24 hours. Mercedes (MBG), Delivery Hero (DHER) And BMW Have Decreased.

Mikołaj Marcinowski Mikołaj Marcinowski 10.03.2022 14:39
Five-day DAX Price Chart shows it went up after a significant decline few days ago. However, today’s daily chart shows there’s a small downtrend and many companies have decreased since yesterday. Significantly affected - two major automotive industries and Delivery Hero. All of presented charts are courtesy of TradingView.com GER 40 has caught the ‘ground level’, but still trades Ca. 8% lower than before warfare in the Eastern Europe as chart shows: But what about last 24 hours what triggers us mostly? A decline amounts to ca. 3%. Many of stocks have decreased by these three – BMW, MBG And DHER have done it significantly. Mercedes-Benz AG has declined by almost 6% BMW has neared the -7% level. Delivery Hero (DHER) has plunged by almost 6.5%, have a look at the chart below: Source: TradingView.com, Investing.com, Capital.com
Not Passing Smell Test

Not Passing Smell Test

Monica Kingsley Monica Kingsley 10.03.2022 16:01
S&P 500 tech driven upswing makes the advance a bit suspect, and prone to consolidation. I would have expected value to kick in to a much greater degree given the risk-on posture in the credit markets. The steep downswing in commodities and precious metals doesn‘t pass the smell test for me – just as there were little cracks in the dam warning of short-term vulnerability at the onset of yesterday, the same way there are signs of the resulting downswing being overdone now.And that has consequences for the multitude of open positions – the PMs and commodities super bull runs are on, and the geopolitics still support the notion of the next spike.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 turned around, and the volume isn‘t raising too many eyebrows. However, the bulls should have tempered price appreciation expectations, to put it politely...Credit MarketsHYG turned around, but isn‘t entirely convincing yet. We saw an encouraging first step towards risk-on turn that requires that the moves continue, which is unlikely today – CPI is here, and unlikely to disappoint the inflationistas.Gold, Silver and MinersPrecious metals downswing looks clearly overdone, and I continue calling for a shallow, $1,980 - $2,000 range consolidation next. This gives you an idea not to expect steep silver discounts either. Miner are clear, and holding up nicely.Crude OilCrude oil downswing came, arguably way too steep one. Even oil stocks turned down in spite of the S&P 500 upswing, which is odd. I‘m looking for gradual reversal of yesterday‘s weakness in both.CopperCopper has made one of its odd moves on par with the late Jan long red candle one – I‘m looking for the weakness to be reversed, and not only in the red metal but within commodities as such.Bitcoin and EthereumCryptos are giving up yesterday‘s upswing – they are dialing back the risk-on turn and rush out of the safe havens of late.SummaryThe S&P 500 dog indeed just had its day, but the price appreciation prospects are not looking too bright for today. With attention turning to CPI, and yesterday‘s „hail mary decline aka I don‘t need you anymore“ in the safe havens of late (precious metals, crude oil, wheat, and the dollar to name just a few) getting proper scrutiny, I‘m looking for gradual return to strength in all things real (real assets) – it‘s my reasonable assumption that the markets won‘t get surprised by an overwhelmingly positive headline from Eastern Europe at this point. Focusing on the underlying fundamentals and charts, I don‘t think so we have seen the real asset tops – precious metals are likely to do great on the continued inflation turning into stagflation (GDP growth figures being downgraded), and commodities are set to further benefit from geopolitics (among much else).Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
NZDUSD Trades Higher, XAGUSD Nears $25.50-26 Range, US 30 Chart Shows Fluctuations

NZDUSD Trades Higher, XAGUSD Nears $25.50-26 Range, US 30 Chart Shows Fluctuations

Jing Ren Jing Ren 11.03.2022 07:40
NZDUSD consolidates gains The New Zealand dollar inched higher supported by roaring commodity prices. A break above the daily resistance at 0.6890 has put the kiwi back on track in the medium term. A bullish MA cross on the daily chart suggests an acceleration to the upside. As sentiment improves, the bulls may see the current consolidation as an opportunity to accumulate. A close above 0.6920 would extend the rally to 0.7050. 0.6800 is the first support and 0.6730 over the 30-day moving average a key demand zone. XAGUSD seeks support Silver consolidates amid ongoing geopolitical instability. A bearish RSI divergence suggests a deceleration in the rally. A tentative break below 25.40 has prompted some buyers to take profit. While sentiment remains optimistic, a correction might be necessary for the bulls to take a breather. The psychological level of 25.00 is a major demand zone. Its breach could send the precious metal to 24.30 which sits on the 30-day moving average. A rally above 26.90 could propel the price to last May’s highs around 28.50. US 30 struggles for buyers The Dow Jones 30 turned south after talks between Russia and Ukraine stalled again. A rebound above 34000 has provided some relief. Nonetheless, enthusiasm could be short-lived after the index gave up all recent gains. The prospect of a bear market looms if this turns out to be a dead cat bounce. A fall below 32300 could trigger another round of liquidation and push the Dow to a 12-month low at 30800. On the upside, 33500 is the first resistance. The bulls will need to lift offers around 34100 before they could attract more followers.
The War Is on for Two Weeks. How Does It Affect Gold?

The War Is on for Two Weeks. How Does It Affect Gold?

Arkadiusz Sieron Arkadiusz Sieron 10.03.2022 17:21
  With each day of the Russian invasion, gold confirms its status as the safe-haven asset. Its long-term outlook has become more bullish than before the war. Two weeks have passed since the Russian attack on Ukraine. Two weeks of the first full-scale war in Europe in the 21th century, something I still can’t believe is happening. Two weeks of completely senseless conflict between close Slavic nations, unleashed without any reasonable justification and only for the sake of Putin’s imperial dreams and his vision of Soviet Reunion. Two weeks of destruction, terror, and death that captured the souls of thousands of soldiers and hundreds of civilians, including dozens of children. Just yesterday, Russian forces bombed a maternity hospital in southern Ukraine. I used to be a fan of Russian literature and classic music (who doesn’t like Tolstoy or Tchaikovsky?), but the systematic bombing of civilian areas (and the use of thermobaric missiles) makes me doubt whether the Russians really belong to the family of civilized nations. Now, for the warzone report. The country’s capital and largest cities remain in the hands of the Ukrainians. Russian forces are drawing reserves, deploying conscript troops to Ukraine to replace great losses. They are still trying to encircle Kyiv. They are also strengthening their presence around the city of Mykolaiv in southern Ukraine. However, the Ukrainian army heroically holds back enemy attacks in all directions. The defense is so effective that the large Russian column north-west of Kyiv has made little progress in over a week, while Russian air activity has significantly decreased in recent days.   Implications for Gold How has the war, that has been going on for already two weeks, affected the gold market so far? Well, as the chart below shows, the military conflict was generally positive for the yellow metal, boosting its price from $1,905 to $1989, or about 4.4%. Please note that initially the price of gold jumped, only to decline after a while, and only then rallied, reaching almost $2,040 on Tuesday (March 8, 2022). However, the price has retreated since then, below the key level of $2,000. This is partially a normal correction after an impressive upward move. It’s also possible that the markets are starting to smell the end of the war. You see, Russian forces can’t break through the Ukrainian defense. They can continue besieging cities, but the continuation of the invasion entails significant costs, and Russia’s economy is already sinking. Hence, they can either escalate the conflict in a desperate attempt to conquer Kyiv – according to the White House, Russia could conduct a chemical or biological weapon attack in Ukraine – or try to negotiate the ceasefire. In recent days, the President of Ukraine, Volodymyr Zelensky, said he was open to a compromise with Russia. Today, the Russian and Ukrainian foreign ministers met in Turkey for the first time since the horror started (unfortunately, without any agreement). However, although gold prices may consolidate for a while or even fall if the prospects of the de-escalation increase, the long-term fundamentals have turned more bullish. As you can see in the chart below, the real interest rates decreased amid the prospects of higher inflation and slower economic growth. Russia and Ukraine are key exporters of many commodities, including oil, which would increase the production costs and bring us closer to stagflation. What’s next, risk aversion increased significantly, which is supportive of safe-haven assets such as gold. After all, Putin’s decision to invade Ukraine is a turning point in modern history, which ends a period of civilized relations with Russia and relative safety in the world. Although Russia’s army discredited itself in Ukraine, the country still has nuclear weapons able to destroy the globe. As you can see in the chart below, both the credit spreads (represented here by the ICE BofA US High Yield Index Option-Adjusted Spread) and the CBOE volatility index (also called “the fear index”) rose considerably in the last two weeks. Hence, the long-term outlook for gold is more bullish than before the invasion. The short-term future is more uncertain, as there might be periods of consolidation and even corrections if the conflict de-escalates or ends. However, given the lack of any decisions during today’s talks between Ukrainian and Russian foreign ministers and the continuation of the military actions, gold may rally further. If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
Economic Indicators Of Great Britain Released

Economic Indicators Of Great Britain Released

Alex Kuptsikevich Alex Kuptsikevich 11.03.2022 09:11
The new monthly package of UK statistics highlighted the fine shape of the economy in January. For the month, GDP rose by 0.8%, against an expected strengthening of 0.2% and the three-month growth rate accelerated from 1.0% to 1.1%. Industrial production strengthened by 0.7% for the month and 2.3% for January 2021, also beating economists' expectations. The UK economy started the year in good shape, responding positively to the easing of the coronavirus restrictions. This is short-term positive news for the British pound, which has managed to find support after touching another low since November 2020 at 1.3080 per dollar. A strong base in the economy will allow the Bank of England to strengthen its fight against inflation by raising rates. However, price shocks across many commodities and foodstuffs dramatically increase the chances of short-term stagflation in the UK as consumers will save more by cutting back on purchases of non-essential goods and services due to rising energy and food prices. The Ukrainian war crisis, now in its third week, has seen the GBPUSD fall 3.8%, taking more than 1/3 of the pair's rise from the lows at the start of the pandemic. A move below 1.3160 was a signal to a move into a deeper correction phase, and the pair could plunge to 1.2880 at the beginning of next week.
Now, That‘s Better

Now, That‘s Better

Monica Kingsley Monica Kingsley 11.03.2022 15:59
S&P 500 gave up the opening gains, but managed to close on a good note, in spite of credit markets not confirming. Given though the high volume characterizing HYG downswing and retreating crude oil, we may be in for a stock market led rebound today. It‘s that finally, value did much better yesterday than tech.CPI came red hot, but didn‘t beat expectations, yield curve remains flat as a pancake, and the commodity index didn‘t sell off too hard. It remains to be seen whether the miners‘ strength was for real or not – anyway, the yesterday discussed shallow $1,980 - $2,000 range consolidation still remains the most likely scenario. I just don‘t see PMs and commodities giving up a lion‘s share of the post Feb 24 gains next.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 can still turn around, and the odds of doing so successfully (till the closing bell today), have increased yesterday. The diminished volume points to no more sellers at this point while buyers are waiting on the sidelines.Credit MarketsHYG has only marginally closed below Tuesday‘s lows – corporate junk bonds can reverse higher without overcoming Wednesday‘s highs fast, which would still be constructive for a modest S&P 500 upswing.Gold, Silver and MinersPrecious metals are indeed refusing to swing lower too much – the sector remains excellently positioned for further gains. For now though, we‘re in a soft patch where the speculative fever is slowly coming out, including out of other commodities. Enter oil.Crude OilCrude oil still remains vulnerable, but would catch a bid quite fast here. Ideally, black gold wouldn‘t break down into the $105 - $100 zone next. I‘m looking for resilience kicking in soon.CopperCopper fake weakness is being reversed, and the red metal is well positioned not to break below Wednesday‘s lows. I‘m not looking for selloff continuation in the CRB Index either.Bitcoin and EthereumCryptos remain undecided, and erring on the side of caution – this highlights that the risk appetite‘s return is far from universal.SummaryS&P 500 missed a good opportunity yesterday, but the short-term bullish case isn‘t lost. Stocks actually outperformed credit markets, and given the commodities respite and value doing well, bonds may very well join in the upswing, with a notable hesitation though. That wouldn‘t be a short-term obstacle, take it as the bulls temporarily overpowering the bears – I still think that the selling isn‘t over, and that the downswing would return in the latter half of Mar if (and that‘s a big if) the Fed‘s response to inflation doesn‘t underwhelm the market expectations that have been dialed back considerably over the last two weeks. Token 25bp rate hike, anyone? That wouldn‘t sink stocks dramatically...Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Natural Gas: When A Trade Plan Provides Consecutive Wins

Natural Gas: When A Trade Plan Provides Consecutive Wins

Finance Press Release Finance Press Release 11.03.2022 16:24
From time to time, we may want to consider volatility as an ally. After all, why would highly volatile markets necessarily mean more losing trades?The first target was hit – BOOM! Today – just before the weekend – it is time to bank some profits from my recent trade projections (provided on March 2). Since then, the trade plan has provided our dear subscribers with multiple bounces to trade the NYMEX Natural Gas Futures (April contract) in various ways, always depending on each one’s personal risk profile.The first possibility is the swing trading with trailing stop method explained in my famous risk management article.Trade entry triggered on Tuesday, March 8 (firm rebound on yellow band), stop lifted once price extends beyond mid-point (median) price between first target and entry, thus ending at $4.607 (black dotted line), given the market closed at its daily high of $4.704 (purple dotted line) that same day and assuming you entered that long trade at $4.550 (top of the yellow band). That was a quick one that lasted only a couple hours for the day traders who closed their trades at the regular market close (two candles later, see below chart). For the swing traders, the win-stop was triggered the next day (Wednesday) on the following pull-back. Henry Hub Natural Gas (NGJ22) Futures (April contract, hourly chart)The second option is to scale the rebounds with fixed targets (active or experienced traders).This method consists of “riding the tails” (or the shadows). To get a better grasp of this concept, let’s zoom out on a 4H-chart so you can see the multiple rebounds of the price characterized by the shadows (or tails) of candlesticks, where a crowd of bulls are placing buy orders around that yellow support zone, therefore squeezing bears by pushing prices towards the upside (like some sort of rope pulling game). This trading style often requires stops to be tighter with some profit-to-risk ratio greater than 1.5 (with usually fixed targets). Henry Hub Natural Gas (NGJ22) Futures (April contract, 4H chart)Third possibility: position trading. This is probably the most passive trading style, as it would suit everyone’s busy timetable (and be the most rewarding). This is usually the one we privilege at Sunshine Profits since it allows us to provide trade projections some time in advance for our patient sniper traders to lock in their trading targets and take sufficient time to assess the associated risk with each projection as part of a full trade plan (or flying map).Let’s zoom out again to spot our first target getting hit today on a daily chart so we can have an overall view of the next target to be locked in while lifting our stop to breakeven (entry), previous swing low ($4.450) or using an Average True Range (ATR) ratio as some of you may like to use:Henry Hub Natural Gas (NGJ22) Futures (April contract, daily chart)That’s all folks for today. Have a great weekend!Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Sebastien BischeriOil & Gas Trading Strategist* * * * *The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Gold Likes Recessions - Could High Interest Rates Lead to One?

Gold Likes Recessions - Could High Interest Rates Lead to One?

Finance Press Release Finance Press Release 11.03.2022 16:52
We live in uncertain times, but one thing is (almost) certain: the Fed’s tightening cycle will be followed by an economic slowdown – if not worse.There are many regularities in nature. After winter comes spring. After night comes day. After the Fed’s tightening cycle comes a recession. This month, the Fed will probably end quantitative easing and lift the federal funds rate. Will it trigger the next economic crisis?It’s, of course, more nuanced, but the basic mechanism remains quite simple. Cuts in interest rates, maintaining them at very low levels for a prolonged time, and asset purchases – in other words, easy monetary policy and cheap money – lead to excessive risk-taking, investors’ complacency, periods of booms, and price bubbles. On the contrary, interest rate hikes and withdrawal of liquidity from the markets – i.e., tightening of monetary policy – tend to trigger economic busts, bursts of asset bubbles, and recessions. This happens because the amount of risk, debt, and bad investments becomes simply too high.Historians lie, but history – never does. The chart below clearly confirms the relationship between the Fed’s tightening cycle and the state of the US economy. As one can see, generally, all recessions were preceded by interest rate hikes. For instance, in 1999-2000, the Fed lifted the interest rates by 175 basis points, causing the burst of the dot-com bubble. Another example: in the period between 2004 and 2006, the US central bank raised rates by 425 basis points, which led to the burst of the housing bubble and the Great Recession.One could argue that the 2020 economic plunge was caused not by US monetary policy but by the pandemic. However, the yield curve inverted in 2019 and the repo crisis forced the Fed to cut interest rates. Thus, the recession would probably have occurred anyway, although without the Great Lockdown, it wouldn’t be so deep.However, not all tightening cycles lead to recessions. For example, interest rate hikes in the first half of the 1960s, 1983-1984, or 1994-1995 didn’t cause economic slumps. Hence, a soft landing is theoretically possible, although it has previously proved hard to achieve. The last three cases of monetary policy tightening did lead to economic havoc.It goes without saying that high inflation won’t help the Fed engineer a soft landing. The key problem here is that the US central bank is between an inflationary rock and a hard landing. The Fed has to fight inflation, but it would require aggressive hikes that could slow down the economy or even trigger a recession. Another issue is that high inflation wreaks havoc on its own. Thus, even if untamed, it would lead to a recession anyway, putting the economy into stagflation. Please take a look at the chart below, which shows the history of US inflation.As one can see, each time the CPI annul rate peaked above 5%, it was either accompanied by or followed by a recession. The last such case was in 2008 during the global financial crisis, but the same happened in 1990, 1980, 1974, and 1970. It doesn’t bode well for the upcoming years.Some analysts argue that we are not experiencing a normal business cycle right now. In this view, the recovery from a pandemic crisis is rather similar to the postwar demobilization, so high inflation doesn’t necessarily imply overheating of the economy and could subsidy without an immediate recession. Of course, supply shortages and pent-up demand contributed to the current inflationary episode, but we shouldn’t forget about the role of the money supply. Given its surge, the Fed has to tighten monetary policy to curb inflation. However, this is exactly what can trigger a recession, given the high indebtedness and Wall Street’s addiction to cheap liquidity.What does it mean for the gold market? Well, the possibility that the Fed’s tightening cycle will lead to a recession is good news for the yellow metal, which shines the most during economic crises. Actually, recent gold’s resilience to rising bond yields may be explained by demand for gold as a hedge against the Fed’s mistake or failure to engineer a soft landing.Another bullish implication is that the Fed will have to ease its stance at some point in time when the hikes in interest rates bring an economic slowdown or stock market turbulence. If history teaches us anything, it is that the Fed always chickens out and ends up less hawkish than it promised. In other words, the US central bank cares much more about Wall Street than it’s ready to admit and probably much more than it cares about inflation.Having said that, the recession won’t start the next day after the rate liftoff. Economic indicators don’t signal an economic slump. The yield curve has been flattening, but it’s comfortably above negative territory. I know that the pandemic has condensed the last recession and economic rebound, but I don’t expect it anytime soon (at least rather not in 2022). It implies that gold will have to live this year without the support of the recession or strong expectations of it.Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care.
Credit Markets Keeps Downward Move, S&P 500 (SPX) Trades Lower Than Usual, Bitcoin (BTC) Price Is... Quite Stable (Sic!)

Credit Markets Keeps Downward Move, S&P 500 (SPX) Trades Lower Than Usual, Bitcoin (BTC) Price Is... Quite Stable (Sic!)

Monica Kingsley Monica Kingsley 14.03.2022 13:09
S&P 500 bulls again missed the opportunity, and credit markets likewise. Not even the virtual certainty of only 25bp hike in Mar is providing much relief to the credit markets. Given that the real economy is considerably slowing down and that recession looks arriving before Q2 ends, the markets continue forcing higher rates (reflecting inflation). In a risk-on environment, value and cyclicals such as financials would be reacting positively, but that‘s not the case right now. At the same time, equal weighted S&P 500 (that‘s RSP) hasn‘t yet broken below its horizontal support above $145, meaning its posture isn‘t as bad as in the S&P 500. Should it however give, we‘re going considerably below 4,000. That‘s why today‘s article is titled hanging by a thread. Precious metals and commodities continue consolidating, and the least volatile appreciation opportunity presents the red metal. And it‘s not only about copper – crude oil market is going through supply realignment, and demand is not yet being destroyed on a massive scale. Coupled with the long-term underinvestment in exploration and drilling (US is no longer such a key producer as was the case in 2019), crude oil prices would continue rising on fundamentals, meaning the appreciation pace of Feb-Mar would slow down. Precious metals would have it easy next as the Fed is bound to be forced to make a U-turn in this very short tightening cycle (they didn‘t get far at all, and inflation expectations have in my view become unanchored already). Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bears won the day, and Nasdaq remains in a sorry state. 4,160s are the line in the sand, breaking which would accelerate the downswing. Inflation is cutting into the earnings, and stocks aren‘t going to like the coming Fed‘s message. Credit Markets HYG didn‘t keep at least stable – the pressure in the credit markets is ongoing, and the stock market bulls don‘t have much to rejoice over here. Gold, Silver and Miners Precious metals downswings are being bought, and are shallow. The sellers are running out of steam, and the opportunity to go somewhat higher next, is approaching. Crude Oil Crude oil is stabilizing, but it may take some time before the upswing continues with renewed vigor. As for modest extension of gains, we won‘t be disappointed. Copper Copper had one more day of fake weakness, but the lost gains of Friday would be made up for next – and given no speculative fever here to speak of, it would have as good lasting power as precious metals. Bitcoin and Ethereum Cryptos remain undecided, but indicate a little breathing room, at least for today. Still, I wouldn‘t call it as risk-on constellation throughout the markets. Summary S&P 500 is getting in a precarious position, but the internals aren‘t (yet) a screaming sell. Credit markets continue leading lower, and the risk-off positioning is impossible to miss. Not even financials are able to take the cue, and rise. It‘s that the rise in yields mirrors the ingrained inflation, and just how entrenched it‘s becoming. No surprise if you were listening to me one year ago – the Fed‘s manouevering room got progressively smaller, and the table is set for the 2H 2022 inflation respite (think 5-6% year end on account of recessionary undercurrents) to be superseded with even higher inflation in 2023, because the Fed would be forced later this year to turn back to easing. Long live the precious metals and commodities super bulls! Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Tuesday's EUR/USD Analysis: Chaotic Movements on 30M Chart

DAX (GER 40) Has Increased By Ca. 3% Since Friday. Deutsche Bank (DBK), Porsche (PAH3) And Volkswagen (VOW3) Have Gained The Most

Mikołaj Marcinowski Mikołaj Marcinowski 14.03.2022 15:53
It’s a quite good day for German most popular index. Charts - courtesy of TradingView.com There are three brands which should be definitely satisfied as shortly before markets closes… Deutsche Bank (DBK) has gone ca. 7.4% up: Porsche (PAH3) has added ca. 6%: Volkswagen has increased by ca. 5.2% Source: TradingView.com  
Apple Stock News and Forecast: AAPL likely to see more supply chain disruptions, $120 price target

Apple Stock News and Forecast: AAPL likely to see more supply chain disruptions, $120 price target

FXStreet News FXStreet News 14.03.2022 15:57
AAPL stock closed lower on Friday as fears over Ukraine escalation hit.Apple is likely to see more supply chain disruptions due to Chinese lockdowns.Inflation will also cause significant headaches for Apple's top brass.Apple's stock (AAPL) closed lower on Friday as initial optimism on peace talks was quickly washed away by reports of an escalation of the Russian conflict in Ukraine. The market closed lower for the Nasdaq and S&P 500, and most sectors were dragged lower. Apple was not immune to the selling pressure. Apple Stock NewsApple did stage a mid-week product release called Peak Performance. The company unveiled a lower-cost iPhone and some other products in the Mac and IPad space, but the show failed to generate much investor enthusiasm as geopolitical events remain dominant. The analyst community was reasonably impressed with the launch though with Loup stealing the show as they slapped a $250 price target on Apple."Apple remains our Top Pick in IT Hardware given durable fundamentals, predictable cash flows, additional 2022 product launches, and platform stability in an otherwise uncertain and volatile market backdrop," Morgan Stanley said as they put a $210 price target on the stock.However, we note the situation in China over the weekend where lockdowns are back in the cards as the country tries to contain the latest covid surge. According to Reuters, Foxconn has had to close its Shenzen factory, and that will be a hit to Apple's supply chain. The closure is expected to be brief, but the situation is fluid. Assuming this is the Omicron variant, then it is extremely transmissible compared to earlier versions where China was able to contain the circus using strict lockdowns. This is not a good look for Apple.Apple Stock ForecastApple stock is now likely to break the key support at $153.17 today as the market will take the lockdown news negatively. But more importantly, breaking this support at $153.17 means Apple will also break the 200-day moving average, which is set just above at $153.60. This adds yet more negative momentum to the picture. The move will likely slow as there is a lot of volume down here as we can see from the volume profile bars on the right of the chart. It does bring $138.31 as the next target though. The declining Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) are confirming the bearish trend.Apple chart, daily
Increase Of Whales Wallets And California's Digital Financial Assets Law

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Crypto markets in disarray

FXStreet News FXStreet News 14.03.2022 15:57
Bitcoin price loses momentum as it slides back into consolidation along the $36,398 to $38,895 demand zone. Ethereum price slides below a symmetrical triangle, hinting at a move below $2,000. Ripple price remains bullish as bulls eye a retest of $1 psychological level. Bitcoin price continues to tag the immediate demand area, weakening it. Despite the sudden bursts in buying pressure, BTC seems to be in consolidation mode. Ethereum price has triggered a bearish outlook while Ripple price shows signs of heading higher. Also read: Gold Price Forecast: Lower lows hinting at a steeper decline Bitcoin price moves with no sense of direction Bitcoin price dips into the $36,398 to $38,895 demand zone for the fourth time without producing any higher highs. This price action is indicative of a consolidation and is likely to breach lower. A daily candlestick close below $36,398 will invalidate the demand zone and knock BTC to retest the weekly support level at $34,752, which is the last line of defense. A breakdown of this barrier will open the path for bears to crash Bitcoin price to $30,000 or lower. Here, market makers will push BTC below $29,100 to collect liquidity resting below the equal lows formed in mid-2021. BTC/USD 1-day chart While things look inauspicious for Bitcoin price, a strong bounce off the said demand zone that retests the weekly supply zone, ranging from $45,550 to $51,860, will provide some relief for bulls. Ethereum price favors bears Ethereum price action from January 22 to March 4 created three lower highs and higher lows, which, when connected via trend lines, resulted in a symmetrical triangle formation. This technical formation forecasts a 26% move obtained by measuring the distance between the first swing high and swing low to the breakout point. On March 6, ETH breached below, signaling a bearish breakout, which puts the theoretical target at $1,962. A breakdown of the weekly support level at $2,541 is vital; a breakdown of this barrier will expedite the move lower. ETH/USD 1-day chart Regardless of the recent onslaught of bearishness, Ethereum price needs to produce a daily candlestick close above $3,413 to invalidate the bullish thesis. Such a development will also open the possibility of kick-starting a potential uptrend. https://youtu.be/-U0QTf_NwnI Ripple price maintains its bullish momentum Ripple price traverses a bull flag continuation pattern, a breakout from which hints at a continuation of the uptrend. This technical formation contains an impulsive move higher followed by a consolidation in the form of a pennant. The 55% rally between February 3 and 8 formed a bullish flag pole continuation pattern, and the consolidation that ensued in the form of lower highs and higher lows created the pennant. Together, the bullish setup forecasts a 31% ascent for XRP price, obtained by adding the flag pole’s height to the breakout point from the pennant. On March 11, Ripple price broke out from the pennant, signaling the start of the 31% uptrend to $1. So far, the retest seems to be holding up well, so investors can expect the remittance token to continue its journey higher to the $1 psychological level. XRP/USD 1-day chart A daily candlestick close below the immediate demand zone, ranging from $0.689 to $0.705, will create a lower low and invalidate the bullish thesis for Ripple price. In such a case, XRP has the twelve-hour demand zone, extending from $0.546 to $0.633 to support any residual selling pressure. https://youtu.be/rCFQmMHWJZ4
Are Current Market Cycles Similar To The GFC Of 2007–2009?

Are Current Market Cycles Similar To The GFC Of 2007–2009?

Chris Vermeulen Chris Vermeulen 14.03.2022 16:14
Soaring real estate, rising volatility, surging commodities and slumping stocks - Sound Familiar?This past week marked the 13th anniversary of the bottom of the Global Financial Crisis (GFC) of 2007-2009. The March 6, 2009 stock market low for the S&P 500 marked a staggering overall value loss of 51.9%.The GFC of 2007-09 resulted from excessive risk-taking by global financial institutions, which resulted in the bursting of the housing market bubble. This, in turn, led to a vast collapse of mortgage-back securities resulting in a dramatic worldwide financial reset.Sign up for my free trading newsletter so you don’t miss the next opportunity! IS HISTORY REPEATING ITSELF?The following graph shows us that precious metals and energy outperform the stock market as the ‘Bull’ cycle reaches its maturity. The stock market is always the first to lead, the second being the economy, and the third, being the commodity markets. But history has shown that commodity markets can move up substantially as the stock market ‘Bull’ runs out of steam.The current commodities rally in Gold began August 2021, Crude Oil April 2020, and Wheat in January 2022. Interestingly we started seeing capital outflows in the SPY-SPDR S&P 500 Trust ETF in early January 2022, and the DRN-Direxion Daily Real Estate Bull 3x Shares ETF starting back in late December 2021.LET’S SEE WHAT HAPPENED TO THE STOCK AND COMMODITY MARKETS IN 2007-2008SPY - SPDR S&P 500 TRUST ETFFrom August 17, 2007 to July 3, 2008: SPDR S&P 500 ETF Trust depreciated -20.12%The State Street Corporation designed SPY for investors who want a cost-effective and convenient way to invest in the price and yield performance of the S&P 500 Stock Index. According to State Street’s website www.ssga.com, the Benchmark, the S&P 500 Index, comprises selected stocks from five hundred (500) issuers, all of which are listed on national stock exchanges and span over approximately 24 separate industry groups.DBC – INVESCO DB COMMODITY INDEX TRACING FUND ETFFrom August 17 2007 to July 3, 2008: Invesco DB Commodity Index Tracking Fund appreciated +96.81%Invesco designed DBC for investors who want a cost-effective and convenient way to invest in commodity futures. According to Invesco’s website www.invesco.com, the Index is a rules-based index composed of futures contracts on 14 of the most heavily traded and important physical commodities in the world.BE ALERT: THE US FEDERAL RESERVE POLICY MEETING IS THIS WEEK!In February, the inflation rate rose to 7.9% as food and energy costs pushed prices to their highest level in more than 40 years. If we exclude food and energy, core inflation still rose 6.4%, which was the highest since August 1982. Gasoline, groceries, and housing were the most significant contributors to the CPI gain. The consumer price index is the price of a weighted average market basket of consumer goods and services purchased by households.The FED was expected to raise interest rates by as much as 50 basis points at its policy meeting this week, March 15-16. However, given the recent world events of the Russia – Ukraine war in Europe, the FED may decide to be more cautious and raise rates by only 25 basis points.HOW WILL RISING INTEREST RATES AFFECT THE STOCK MARKET?As interest rates rise, the cost of borrowing becomes more expensive. Rising interest rates tend to affect the market immediately, while it may take about 9-12 months for the rest of the economy to see any widespread impact. Higher interest rates are generally negative for stocks, with the exception of the financial sector.WILL RISING INTEREST RATES BURST OUR HOUSING BUBBLE?It is too soon to tell exactly what the impact of rising interest rates will be regarding housing. It is worth noting that in a thriving economy, consumers continue buying. However, in our current economy, where the consumers' monthly payment is not keeping up with the price of gasoline and food, it is more likely to experience a leveling off of residential prices or even the risk of a 2007-2009 repeat of price depreciation.THE POTENTIAL FOR OUTSIZED GAINS IN A BEAR MARKET ARE 7X GREATER THAN A BULL MARKET!The average bull market lasts 2.7 years. From the March low of 2009, the current bull market has established a new record as the longest-running bull market at 12 years and nine months. The average bear market lasts just under ten months, while a few have lasted for several years. It is worth noting that bear markets tend to fall 7x faster than bull markets go up. Bear markets also reflect elevated levels of volatility and investor emotions which contribute significantly to the velocity of the market drop.WHAT STRATEGIES CAN HELP YOU NAVIGATE CURRENT MARKET TRENDS?Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24 months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe we are seeing the markets beginning to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into metals, commodities, and other safe havens.IT'S TIME TO GET PREPARED FOR THE COMING STORM; UNDERSTAND HOW TO NAVIGATE THESE TYPES OF MARKETS!I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
EURUSD Has Climbed A Bit, DAX (GER40) Has Moved Up Slightly, AUDUSD Chart Shows A Small Downtrend

EURUSD Has Climbed A Bit, DAX (GER40) Has Moved Up Slightly, AUDUSD Chart Shows A Small Downtrend

Jing Ren Jing Ren 15.03.2022 08:02
EURUSD struggles to rebound The US dollar bounces across the board as the Fed may possibly raise interest rates on Wednesday. The pair found support near May 2020’s lows around 1.0800. The RSI’s oversold condition on the daily chart prompted the bears to take some chips off the table, alleviating the pressure. 1.1110 is a fresh resistance and its breach could lift offers to 1.1270. In fact, this could turn sentiment around in the short term. Failing that, a break below 1.0830 could trigger a new round of sell-off towards March 2020’s lows near 1.0650. AUDUSD lacks support The Australian dollar slipped after dovish RBA minutes. The pair continues to pull back from its recent top at 0.7430. A drop below the demand zone at 0.7250 further puts the bulls on the defensive. The former support has turned into a resistance level. 0.7170 at the origin of a previous breakout is key support. An oversold RSI may raise buyers’ interest in this congestion area. A deeper correction could invalidate the recent rebound and send the Aussie to the daily support at 0.7090. GER 40 attempts to rebound The Dax 40 edges higher as Russia and Ukraine hold a fourth round of talks. The index bounced off the demand zone (12500) from the daily chart, a sign that price action could be stabilizing. The supply zone around the psychological level of 14000 sits next to the 20-day moving average, making it an important hurdle. A tentative breakout may have prompted sellers to cover. 14900 would be the target if the rebound gains momentum. On the downside, 13300 is fresh support, and 12720 is the second line of defense.
(XAUUSD) Price Of Gold And Price Of Silver (XAGUSD) Decreases...

(XAUUSD) Price Of Gold And Price Of Silver (XAGUSD) Decreases...

Przemysław Radomski Przemysław Radomski 15.03.2022 14:12
  In line with predictions, gold is ceasing to benefit from war-fueled uncertainty. Meanwhile, silver faked another breakout. Could it be more bearish?  Last week’s powerful, huge-volume reversal in gold was likely to be followed by declines. It was – but that’s just the beginning. Yesterday’s $24 decline might seem significant on a day-to-day basis, but compared to last week’s enormous reversal, it’s really tiny. The modest extent of yesterday’s decline is by no means bullish – my emphasis on the small size of the decline so far should be viewed as an indication that much more is likely on the horizon. Besides, gold was down by about $20 in today’s pre-market trading. As I wrote yesterday, gold’s breakout above $2,000 was officially invalidated, and given the weekly reversal, it seems that the war-uncertainty-based rally is over. The decisive move below 70 in the RSI indicator after it was trading above 70 clearly confirms that the top is already behind us. Just like it was in 2020 and 2021 when similar things happened, history appears to have rhymed. On Friday, I wrote the following: Gold’s move of $0.40 (yes, forty cents) above $2,000 is not important as the breakout above this level was just invalidated the previous day. Technically, this is another attempt to break above this level, which is likely to be invalidated based on what we see in today’s pre-market trading. The fact that I would like to emphasize today is that this kind of small rebound after the initial slide is common and perfectly normal for gold. We saw exactly the same thing right after gold’s 2020 top and after its 2021 top, and also two more times in 2021 (as marked on the above chart). This means that yesterday’s upswing is not particularly bullish. It’s a normal post-top reaction. Lower gold values are to be expected. Silver declined yesterday, and it closed the day below its late-2021 high. In other words, the breakout above this level was invalidated. This is a strong bearish confirmation from the white metal. The white metal just invalidated the move above its 61.8% Fibonacci retracement. That’s bearish on its own, but let’s keep in mind that it happened right after silver outperformed gold. Last Tuesday, the GDXJ ETF was up by less than 1%, gold was up by 2.37%, and silver was up by 4.57%. Silver’s outperformance and miners’ underperformance is what we tend to see right at the tops. That’s exactly what it was – a top. Silver declined profoundly, and the attempt to break above its 61.8% Fibonacci retracement level will soon be just a distant (in terms of price) memory. On a medium-term basis, silver was simply weak relative to gold, but we saw short-term outperformance. In short, that was and continues to be bearish. As far as silver’s big picture is concerned, please note that it also provides us with a confirmation of the analogy between 2012 and now. At the turn of the year in 2011/2012, there was a cyclical turning point in silver, and we saw a sizable decline in silver shortly thereafter. The same happened in 2021, after silver’s cyclical turning point. Back in 2012, silver declined more or less to its previous lows and then rallied back up, but it didn’t reach its previous top. It more or less rallied to its 50-week moving average and then by about the same amount before topping. Recently, we saw exactly the same thing. After the initial decline, silver bottomed close to its previous lows, and most recently it rallied to its 50-week moving average and then by about the same amount before topping – below the previous high. Thus, the situation is just like what it was during the 2012 top in all three key components of the precious metals sector: gold, silver, and mining stocks. We have a situation in the general stock market that points to an even quicker slide than what we saw in 2012-2013. If stocks slide sharply and significantly just like in 2008, then the same fate may await the precious metals sector – just like in 2008. In this case, silver and mining stocks (in particular, junior mining stocks) would be likely to fall in a spectacular manner. All the above was confirmed by silver’s invalidation of its breakout above the late-2021 high. Not only has the medium-term outlook been bearish, but now the short-term outlook for silver is bearish too. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
XAUUSD Decreases, Russia-Ukraine Conflict Remains, Fed Decides

XAUUSD Decreases, Russia-Ukraine Conflict Remains, Fed Decides

Arkadiusz Sieron Arkadiusz Sieron 15.03.2022 14:13
  It seems that the stalemate in Ukraine has slowed down gold's bold movements. Will the Fed's decision on interest rates revive them again?  The tragedy continues. As United Nations Secretary-General António Guterres said yesterday, “Ukraine is on fire and being decimated before the eyes of the world.” There have already been 1,663 civilian casualties since the Russian invasion began. What is comforting in this situation is that Russian troops have made almost no advance in recent days (although there has been some progress in southern Ukraine). They are attempting to envelop Ukrainian forces in the east of the country as they advance from the direction of Kharkiv in the north and Mariupol in the south, but the Ukrainian Armed Forces continue to offer staunch resistance across the country. So, it seems that there is a kind of stalemate. The Russians don’t have enough forces to break decisively through the Ukrainian defense, while Ukraine’s army doesn’t have enough troops to launch an effective counteroffensive and get rid of the occupiers. Now, the key question is: in whose favor is time working? On the one hand, Russia is mobilizing fighters from its large country, but also from Syria and Nagorno-Karabakh. The invaders continue indiscriminate shelling and air attacks that cause widespread destruction among civilian population as well. On the other hand, each day Russian army suffers heavy losses, while Ukraine is getting new weapons from the West.   Implications for Gold How is gold performing during the war? As the chart below shows, the recent stabilization of the military situation in Ukraine has been negative for the yellow metal. The price of gold slid from its early March peak of $2,039 to $1,954 one week later (and today, the price is further declining). However, please note that gold makes higher highs and higher lows, so the outlook remains rather positive, although corrections are possible. On the other hand, gold’s slide despite the ongoing war and a surge in inflation could be a little disturbing. However, the reason for the decline is simple. It seems that the uncertainty reached its peak last week and has eased since then. As the chart below shows, the CBOE volatility index, also called a fear index, has retreated from its recent peak. The Russian troops have made almost no progress, the most severe response of the West is probably behind us, and the world hasn’t sunk into nuclear war. Meanwhile, the negotiations between Russia and Ukraine are taking place, offering some hope for a relatively quick end to the war. As I wrote last week, “there might be periods of consolidation and even corrections if the conflict de-escalates or ends.” The anticipation of tomorrow’s FOMC meeting could also contribute to the slide in gold prices. However, the chart above also shows that credit spreads, another measure of risk perception, have continued to widen in recent days. Other fundamental factors also remain supportive of gold prices. Let’s take, for instance, inflation. As the chart below shows, the annual CPI rate has soared from 7.5% in January to 7.9% in February, the largest move since January 1982. Meanwhile, the core CPI, which excludes food and energy prices, surged from 6.0% to 6.4% last month, also the highest reading in forty years. The war in Ukraine can only add to the inflationary pressure. Prices of oil and other commodities have already soared. The supply chains got another blow. The US Congress is expanding its spending again to help Ukraine. Thus, the inflation peak would likely occur later than previously thought. High inflation may become more embedded, which increases the odds of stagflation. All these factors seem to be fundamentally positive for gold prices. There is one “but”. The continuous surge in inflation could prompt monetary hawks to take more decisive actions. Tomorrow, the FOMC will announce its decision on interest rates, and it will probably hike the federal funds rate by 25 basis points. The hawkish Fed could be bearish for gold prices. Having said that, historically, the Fed’s tightening cycle has been beneficial to the yellow metal when accompanied by high inflation. Last time, the price of gold bottomed out around the liftoff. Another issue is that, because of the war in Ukraine, the Fed could adopt a more dovish stance and lift interest rates in a more gradual way, which could be supportive of gold prices. The military situation in Ukraine and tomorrow’s FOMC meeting could be crucial for gold’s path in the near future. The hike in interest rates is already priced in, but the fresh dot-plot and Powell’s press conference could bring us some unexpected changes in US monetary policy. Stay tuned! If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
The Bitcoin Market Is Now Developing The Corrective Cycle To The Downside

Bitcoin Price Charts: BTC/XAUUSD And BTCUSDT - 15/03/22

Korbinian Koller Korbinian Koller 15.03.2022 14:39
Bitcoin is needed as an alternative   The weakened US-Dollar and the present unexpected climate seems not being fully reflected in bitcoin´s price. Consequently, bitcoin prices could soar in the not too distant future. Bitcoin/Gold-Ratio, daily chart, bottom building: Bitcoin/Gold-Ratio, daily chart as of March 15th, 2022. A phenomenon in times of crisis is that individuals look for absolutes or extremes to resolve difficult circumstances. We instead advocate a more principle-based process of solving problems, an approach of choices. Regarding wealth preservation, this would mean gold and silver alongside bitcoin. The daily chart of the bitcoin/gold-ratio shows the bottom building after a downtrend. Currently, one can purchase a bitcoin for twenty ounces of gold. Nearly half as much as five months ago. Indeed, an opportunity to rotate one’s precious metal holding partially into a cheap bitcoin acquisition.     Bitcoin, monthly chart, in waiting position: Bitcoin in USD, monthly chart as of March 15th, 2022. War inherently divides nations, and that does not mean limiting only the ones directly in conflict with each other. It is this divide that, in addition, fuels the competition for each nation to be first in their digital currency release. Sanctioned countries have limited access to the US-Dollar. Consequently, they are highly motivated to create an alternate payment method. The monthly chart is not showing this fundamental support for bitcoin. Early signs of a triangle show that we find likely to break to the upside. Slow stochastic indicator reading (A) shows that the last time around at these levels, a strong up move followed. Similar to the yellow CCI turbo line-level reading (B). Before such a move, we witnessed a quick price spike down (C), which would be no surprise. Bitcoin, weekly chart, bitcoin as an alternative is needed: Bitcoin in USD, weekly chart as of March 15th, 2022. Zooming into the weekly time frame, we can make out the battle between bulls and bears in more detail. Over the last three weeks, prices were rejected above the POC (point of control = high volume node, where our volume profile analysis ranges over the previous fifteen months). As well, price behavior is reflecting the war climate’s uncertainty. At the same time, the bulls have held steady any attempt of the bears trying to push prices below US$37,500. Hence, we should see a substantial move once trading snaps out of this “magnet trading” to the high-volume node. Bitcoin, daily chart, gains and volatility: Bitcoin in USD, daily chart as of March 15th, 2022. The daily chart of bitcoin above describes how we see the future unfold. We anticipate the price to reach all-time highs within the upcoming month. Unfortunately, not in bitcoins typical swing trading manner. We foresee a choppy, volatile market. Consequently, short and midterm trading will be challenging. Stepping up in time frame is a helpful approach to avoid the noise. Bitcoin is needed as an alternative: Governments will try to keep their monopolies and power. However, we don’t think that the adoption of a digital dollar by the masses will not be that easy. We find this especially true to be in a highly transitory time of rapid changes and many challenges. Typically, multiple propaganda waves through media have bridged such doubt but might have lost some of its trustworthiness. Consequently, bitcoin has a fair chance for mass adoption just as well. It already has a history and carries inherent features of freedom that people might long for more than anticipated.   Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on precious metals and cryptocurrencies, you can also subscribe to our free newsletter. Disclosure: This article and the content are for informational purposes only and do not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|March 15th, 2022|Tags: Bitcoin, Bitcoin bounce, Bitcoin bullish, Bitcoin consolidation, bitcoin/gold-ratio, crypto analysis, crypto chartbook, DeFi, Gold, Gold bullish, low risk, quad exit, technical analysis, trading education|0 Comments About the Author: Korbinian Koller Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
S&P 500, Crude Oil And Credit Markets Decrease... Only Bitcoin Price Remains "The Same"

S&P 500, Crude Oil And Credit Markets Decrease... Only Bitcoin Price Remains "The Same"

Monica Kingsley Monica Kingsley 15.03.2022 16:03
S&P 500 decline was led by tech, and made possible by credit markets‘ plunge. The 4,160s held on a closing basis, and unless the bulls clear this area pretty fast today, this key support would come under pressure once again over the nearest days. Interestingly, the dollar barely moved, but looking at the daily sea of red across commodities, the greenback would follow these to the downside. Not that real assets including precious metals would be reversing on a lasting basis here – the markets are content that especially black gold keeps flowing at whatever price, to whatever buyer(s) willing to clinch the deal. Sure, it‘s exerting downward pressure on the commodity, but I‘m looking for the extraordinary weakness to be reversed, regardless of: (…) not even the virtual certainty of only 25bp hike in Mar is providing much relief to the credit markets. Given that the real economy is considerably slowing down and that recession looks arriving before Q2 ends, the markets continue forcing higher rates (reflecting inflation). The rising tide of fundamentals constellation favoring higher real asset prices, would continue kicking in, especially when the markets sense a more profound Fed turn than we saw lately with the 50bp into 25bp for Mar FOMC. Make no mistake, the inflation horse has left the barn well over a year ago, and doesn‘t intend to come back or be tamed. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bears won the day, and are likely to regroup next – yes, that doesn‘t rule out a modest upswing that would then fizzle out. Credit Markets HYG woes continue, and credit markets keep raising rates for the Fed. The bears continue having the upper hand. Gold, Silver and Miners Precious metals haven‘t found the short-term bottom, but it pays to remember that they are often trading subdued before the Fed days. This is no exception, and I‘m fully looking for gold and silver to regain initiative following the cautious Fed tone. Crude Oil Crude oil didn‘t keep above $105, but would revert there in spite of the stagflationary environment (already devouring Europe). With more clarity in the various oil benchmarks, black gold would continue rising over the coming weeks. Copper Copper weakness is another short-term oddity, which I am looking for to be reversed in the FOMC‘s wake. Volume had encouragingly risen yesterday, so I‘m looking for a solid close to the week. Bitcoin and Ethereum Cryptos are very modestly turning higher, but I‘m not expecting too much of a run next. As stated yesterday, I wouldn‘t call it as risk-on constellation throughout the markets. Summary S&P 500 got into that precarious position (4,160s) yesterday, but managed to hold above. Given the usual Fed days trading pattern, stocks are likely to bounce a little before the pronouncements are made – only to continue drifting lower in their wake. That‘s valid for the central bank not making the U-turn towards easing again, which is what I‘m expecting to happen in the latter half of this year. Inflation would continue biting, and that means stocks are mired in a giant trading range a la the 1970s. Commodities and precious metals would continue building a base here, only to launch higher in response to (surprise, surprise) stubborn inflation. After all, where else to hide in during stagflations? Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
USDCHF Nears 0.940 Levels, EURGBP Keeps Its "Stability", USOIL Is Like A Benchmark For Geopolitical Situation

USDCHF Nears 0.940 Levels, EURGBP Keeps Its "Stability", USOIL Is Like A Benchmark For Geopolitical Situation

Jing Ren Jing Ren 16.03.2022 08:11
USDCHF breaks major resistance The US dollar continues upward as the Fed is set to increase its interest rates by 25bp. The rally sped up after it cleared the daily resistance at 0.9360. The bullish breakout may have ended a 9-month long consolidation from the daily chart perspective. The rising trendline confirms the optimism and acts as an immediate support. Solid momentum could propel the greenback to April 2021’s high at 0.9470. Buyers may see a pullback as an opportunity to jump in. 0.9330 is the closest support should this happen. EURGBP tests key resistance The sterling found support after a drop in Britain’s unemployment rate in January. A break above the daily resistance at 0.8400 has prompted sellers to cover, easing the downward pressure. Sentiment remains downbeat unless buyers push the single currency past 0.8475. In turn, this could pave the way for a reversal in the weeks to come. Otherwise, the bears might double down and drive the euro back into its downtrend. A fall below 0.8360 would force early bulls to liquidate and trigger a sell-off to 0.8280. USOIL drops towards key support WTI crude falls back over a new round of ceasefire talks between Russia and Ukraine. Previously, a bearish RSI divergence indicated a loss of momentum as the price went parabolic. Then a steep fall below 107.00 was a sign of liquidation. Buyers continue to unwind their positions as the price slides back to its pre-war level. The psychological level of 90.00 is an important support on the daily chart. An oversold RSI may attract buying interest in this demand zone. 105.00 is the first resistance before buyers could regain control.
Binance Academy summarise year 2022 featuring The Merge, FTX and more

Crypto Prices: Bitcoin (BTC) Gained 1.4%, ETH Increased By 3.1%, Polkadot (DOT) Went Up By 4.5% And Terra Decreased (-6%)

Alex Kuptsikevich Alex Kuptsikevich 16.03.2022 08:30
BTC added 1.4% over the past day to $39.3K. Attempts to develop an offensive ran into a selling wall. The most important line of defense in the first cryptocurrency at the 38.0K area is still more confident withstanding all bear attacks. Ethereum added 3.1% to $2.6K in 24 hours. Other leading altcoins range from a 6% decline (Terra) to a 4.5% rise (Polkadot). According to CoinMarketCap, the total capitalization of the crypto market grew by 1.4%, to $1.75 trillion. The Bitcoin Dominance Index lost 0.1 percentage points to 42.6%. Cryptocurrency fear and greed index added 3 points to 24, although it remains in the territory of "extreme fear". The FxPro Analyst Team mentioned that during the Asian session, there was a sharp jump in the rate from $39.2K to $41.7K, followed by an almost equally rapid pullback to the area below $39.0K. Stop orders were triggered in the morning low-liquid market, but it is clear that the selling pressure remains huge. In fact, since February 10, the rises in the Bitcoin rate have become less and less long and end at ever lower levels. The reason for the jump in prices in early trading in Asia was the statements of official Beijing on support for the markets, which caused a rally in the shares of the region. However, Bitcoin frankly ignored the drawdown of Asian stocks in recent days, so it quickly returned to its place, because other factors have become its key drivers in recent days. Meanwhile, Glassnode believes that bitcoin investors may face a final capitulation. This is indicated by the high proportion of "unprofitable" coins among short-term holders. At the same time, the uncertainty associated with geopolitics and the Fed rate weakened the accumulation of BTC by hodlers and caused an increase in sales on their part.
Snowball‘s Chance in Hell

Snowball‘s Chance in Hell

Monica Kingsley Monica Kingsley 16.03.2022 15:40
S&P 500 is turning around, and odds are that would be so till the FOMC later today. The pressure on Powell to be really dovish, is on. I‘m looking for a lot of uncerrtainty and flexibility introduction, and much less concrete rate hikes talk that wasn‘t sufficient to crush inflation when the going was relatively good, by the way.As stated yesterday:(…) The rising tide of fundamentals constellation favoring higher real asset prices, would continue kicking in, especially when the markets sense a more profound Fed turn than we saw lately with the 50bp into 25bp for Mar FOMC. Make no mistake, the inflation horse has left the barn well over a year ago, and doesn‘t intend to come back or be tamed.Not that real assets including precious metals would be reversing on a lasting basis here – the markets are content that especially black gold keeps flowing at whatever price, to whatever buyer(s) willing to clinch the deal. Sure, it‘s exerting downward pressure on the commodity, but I‘m looking for the extraordinary weakness to be reversed.We‘re seeing such a reversal in commodities already, and precious metals have a „habit“ of joining around the press conference. Yesterday‘s performance of miners and copper, provides good enough a hint.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 upswing looks like it can go on for a while. Interestingly, it was accompanied by oil stocks declining – have we seen THE risk-on turn? This looks to be a temporary reprieve unless the Fed really overdelivers in dovishness.Credit MarketsHYG is catching some bid, and credit markets are somewhat supporting the risk-on turn. Yields though don‘t look to have put in a top just yet, which means the stock market bears would return over the coming days.Gold, Silver and MinersPrecious metals are looking very attractive, and the short-term bottom appears at hand – this is the way they often trade before the Fed. I‘m fully looking for gold and silver to regain initiative following the cautious and dovish Fed tone.Crude OilCrude oil didn‘t test the 50-day moving average, and I would expect the bulls to step in here – after all, the Fed can‘t print oil, and when they go dovish, the economy just doesn‘t crash immediately...CopperCopper is refusing to decline, and the odd short-term weakness would be reversed – and the same goes for broader commodities, which have been the subject of my recent tweet.Bitcoin and EthereumCryptos aren‘t fully risk-on, but cautiously giving the bulls benefit of the doubt. Not without a pinch of salt, though.SummaryS&P 500 bulls are on the (short-term) run, and definitely need more fuel from the Fed. Significant dovish turn – they would get some, but it wouldn‘t be probably enough to carry risk-on trades through the weekend. The upswing is likely to stall before that, and commodities with precious metals would catch a fresh bid already today. This would be coupled with the dollar not making any kind of upside progress to speak of. The true Fed turn towards easing is though far away still (more than a few months away) – the real asset trades are about patience and tide working in the buyers favor. The yield curve remains flat as a pancake, and more stagflation talk isn‘t too far...Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Bitcoin price undergoes sharp fade as bulls storm out of the gate

Bitcoin price undergoes sharp fade as bulls storm out of the gate

FXStreet News FXStreet News 16.03.2022 16:28
Bitcoin price action jumped 7% but fell back sharply in European trading.BTC price action looks to be set to jump above $41,756.61 once the US session kicks in.Expect to see a further continuation of this price jump throughout the week as long as positive signals come from the ongoing talks in Russia.Bitcoin (BTC) price action is performing a countercyclical move this morning as Asian bulls storm out of the gate on positive-speak from the Chinese government. From now on into the European session, gains are still present but have faded slightly. Expect to see a subsequent round of wins coming in during the US session and going further into this week as long as positive signals are communicated independently from both sides in Ukraine and Russia peace talks.Bitcoin price sees bulls swimming against the tideBitcoin price action seems to have awakened many investors who fell asleep staring at their television screen for the past three weeks on the Russian invasion of Ukraine. As they pulled out their money and went long cash, cryptocurrencies dried up a bit and were left to the mercy of bears. Today a few bears will be licking their wounds as bulls have gone in for a push higher as more positive signals come from both Ukraine and Russia on talks, and markets are getting used to the war headlines as everything looks to be priced in. BTC price action technically got rejected to the upside at $41,756.61, the base of a bearish triangle that formed a few weeks ago. Expect this fade in early trading to provide a window of opportunity for European and American bulls to join the rally and ramp up the price above $41,756.61, where a close above will be key this evening. If trading can start on Thursday with an opening price above $41,756.61, expect to see another leg higher by tomorrow evening, near $44,088.73 and even $45,261.84 by Friday.BTC/USD daily chartThe risk could be that the current fade, after the rejection at $41,756.61, could topple into a deeper loss if bears push the price below the opening price. This would trigger panic amongst bulls that got in and will have them remember the same scenario that happened exactly one week ago on Wednesday with a false breakout and a full paring back, and even eking out further losses the day after. Expect bulls to exit instantly once BTC price action prints red numbers, and this to spiral into a setback for BTC price towards $38,703.32 or even $36,709.19.
Oil Prices Keep Falling. Is It Time to Get Long on Black Gold?

Oil Prices Keep Falling. Is It Time to Get Long on Black Gold?

Sebastian Bischeri Sebastian Bischeri 16.03.2022 16:43
  Crude oil continues to decline due to lowered demand, and the petrodollar seems threatened, losing interest. What is the best strategy to take now?  Oil prices kept falling this week, driven by potential progress in Ukraine-Russia talks and a potential slowdown in the Giant Panda’s (China) economic growth due to epidemic lockdowns in some regions where a surge of Omicron was observed. As I mentioned in my previous article, India considers getting Russian crude oil supplies and other commodities at a reduced price by settling transactions through a rupee/rouble payment system. Meanwhile, we keep getting rumors – notably reported by The Wall Street Journal – that Saudi Arabia and China are also currently discussing pricing some Saudi oil exports directly in yuan. The Chinese are actively seeking to dethrone the dollar as the world’s reserve currency, and this latest development suggests that the petrodollar is now under threat. US Dollar Currency Index (DXY) CFD (daily chart) The recent correction in crude oil, happening just seven days after reaching its 14-year highs, might show some signs that the conflict in Ukraine will slow down consumption. On the other hand, if Iranian and Venezuelan barrels flooded the market, we could see crude oil, petroleum products, and distillates turning into new bear markets. WTI Crude Oil (CLJ22) Futures (April contract, daily chart) Brent Crude Oil (BRNK22) Futures (May contract, daily chart) RBOB Gasoline (RBJ22) Futures (April contract, daily chart) Henry Hub Natural Gas (NGJ22) Futures (April contract, daily chart) That’s all folks for today – happy trading! Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
XAUUSD After Fed Decision, NZDUSD And CADJPY Climbs

XAUUSD After Fed Decision, NZDUSD And CADJPY Climbs

Jing Ren Jing Ren 17.03.2022 08:15
XAUUSD stabilizes Gold struggles as the Fed maps out aggressive tightening. The precious metal has given up all its gains from the previous parabolic rise, which suggests a lack of commitment to support the rally. The price is testing the origin of the bullish breakout at 1907 which coincides with the 30-day moving average. An oversold RSI attracted some buying interest. 1961 is the hurdle ahead before a rebound could materialize. Further down, 1880 is key support on the daily chart and its breach could reverse the course in the weeks to come. NZDUSD attempts rebound The New Zealand dollar found support from a rebound in commodity prices. The pair saw solid bids in the demand zone around 0.6725 and right over the 30-day moving average. A bullish RSI divergence showed a deceleration in the pullback, which would have caught buyers’ attention in this congestion area. A close above 0.6800 has prompted short-term sellers to cover and leave the door open for a rebound. 0.6870 is the last major resistance and a bullish breakout could propel the kiwi past the recent peak at 0.6920. CADJPY breaks key resistance The Canadian dollar shot higher after February’s CPI beat expectations. A break above last October’s high at 93.00 could be an ongoing signal to end a 5-month long consolidation. The RSI’s double top in the overbought area may temporarily hold the bulls back. As sentiment turns overwhelmingly upbeat, buyers may be eager to jump in at a discounted price. The supply-turned-demand zone near 91.60 is an important level to safeguard the breakout. The psychological level of 94.00 could see resistance.
Binance Academy: Non-fungible Tokens: $69 Millions For An NFT!? NFT - What Is It?

Non-fungible Token Of Instagram!? Bitcoin (BTC) Trades Quite High

Alex Kuptsikevich Alex Kuptsikevich 17.03.2022 08:53
Instagram will implement NFT in a couple of months, Meta founder Mark Zuckerberg said. Despite the loud statement, it should be noted that all of Zuckerberg's projects related to digital assets previously failed and did not find wide support from the digital community. The head of Meta has a good sense of trends of social networks, augmented reality or metaverses, and in the latter two, there are more and more fast-growing projects. Meanwhile, Bitcoin is up nearly 4% over the past 24 hours to $41K. Ethereum added 4.7% to $2.75K, while Terra is out of the range, losing 0.6% in 24 hours, and other leading altcoins from the top ten add from 3.5% (XRP) to 9.8% (Avalanche). The total capitalization of the crypto market, according to CoinMarketCap, grew by 4% over the day, to $1.82 trillion. The Bitcoin Dominance Index rose 0.2 points to 42.8%. The crypto-currency index of fear and greed added 3 more points in a day, to 27, moving from extreme anxiety to just fear. The FxPro Analyst Team mentioned that demand for bitcoin was supported by it rising for the second day in a row. It was helped by the strengthening of stock indices and the weakening of the dollar. On Wednesday, the US Federal Reserve raised rates by 0.25%, but the comments made by market participants seemed softer than expected, which caused the dollar to fall. According to Glassnode, $1.2 billion worth of bitcoin was withdrawn from the Coinbase crypto exchange in just a week. This is the largest net outflow since July 2017, which signals the mood of investors for long-term storage of the asset. Despite the positive dynamics in recent days, Bitcoin has been trading in a sideways range between $37K and $42K for almost the entire month of March, unable to choose a further direction. Since the last days of February, there has been a solid support line on the declines under $38K. And this is bullish strength, reflecting that long-term buyer interest has migrated from $30K to $38K due to inflation and geopolitical tensions. Such a migration of the level of interest to long-term buyers fully reflects the price jump, which is the actual depreciation of the value of fiat currencies.
The release of Chinese GDP, Bank of Canada interest rate decision and more - InstaForex talks the following week (part I)

Hang Seng Index (HSI) Has Increased Significantly Yesterday

Chris Vermeulen Chris Vermeulen 17.03.2022 13:08
THE SHANGHAI COMPOSITE INDEX HAS DROPPED MORE THAN 40% FROM ITS PEAK IN JUST 2 ½ MONTHS! China Stocks: This morning bottom pickers around the globe are snatching up what they believe to be “bargain basement priced stocks” as the Hang Seng Index gained 9.1% during today’s March 16, 2022 trading session. It was the best day for the HSI since the 2008 financial crisis as the Chinese government pledged to support markets. Tensions are running high as Chinese nickel giant Tsingshan Holding Group, the world’s biggest producer of nickel used in stainless steel and electric-vehicle batteries was sitting on $8 billion in trading losses. According to the Wall Street Journal on March 9, 2022 “The London Metal Exchange suspended the nickel market early last Tuesday, the first time it had paused trading in a metal contract since the collapse of an international tin cartel in 1985. The decision followed a near doubling in prices over a few hours.” ETFs CAN BE USED SPECIFICALLY FOR SEASONS AND DIRECTION! According to Statista www.statista.com on January 11, 2022, the assets managed by ETFs globally amounted to approximately 7.74 trillion U.S. dollars in 2020. With more than 8,000 ETFs to choose from, you can find just about any flavor you need or are looking for. A Kondratieff Wave is a long-term economic cycle that consists of four sub-cycles or phases that are also known as Kondratieff Seasons. This theory was founded by Nikolai D. Kondratieff 1892-1938 (also spelled “Kondratiev”), a communist Russia-era economist who noticed agricultural commodities and metals experienced long-term cycles. The following graph illustrates both the inflation cycle as well as the best investments for each season. The Kondratieff Seasons act as a general guide and each investment has their own specific bull or bear market cycle. ETFs CAN OFFER YOU PROTECTION AND AGILITY IN A BULL OR BEAR MARKET!  The following ETFs are not a recommendation to buy or sell but simply an illustration to emphasize the utilization of selecting an ETF for capital protection or potential appreciation in either a rising ‘BULL’ or falling ‘BEAR’ market. YINN – DIREXION DAILY FTSE CHINA STOCKS BULL 3X SHARES ETF From February 17, 2021, to March 14, 2022 the Direxion Daily FTSE China Bull 3x Shares ETF ‘YINN’ lost -90.78%. Target Index: The FTSE China 50 Index (TXINOUNU) consists of the 50 largest and most liquid public Chinese companies currently trading on the Hong Kong Stock Exchange as determined by the FTSE/Russell. Constituents in the Index are weighted based on total market value so that companies with larger total market values will generally have a greater weight in the Index. Index constituents are screened for liquidity, and weightings are capped to limit the concentration of any one stock in the Index. However, one cannot directly invest in an index. According to Direxion’s website www.direxion.com, Leveraged and Inverse ETFs pursue leveraged investment objectives, which means they are riskier than alternatives that do not use leverage. They seek daily goals and should not be expected to track the underlying index over periods longer than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. YANG – DIREXION DAILY FTSE CHINA STOCKS BEAR 3X SHARES ETF From February 17, 2021, to March 14, 2022, The Direxion Daily FTSE China Bear 3x Shares ETF gained +418.38%. The rates of return shown for the YINN and YANG ETFs are not precise in that they are an estimation as displayed on a chart utilizing the charts measurement tool to emphasize my talking point. Sign up for my free Trading Newsletter to navigate potential major market opportunities! ALERT: THE US FEDERAL RESERVE INTEREST RATE WAS RASIED A QUARTER POINT! In February, the inflation rate rose to 7.9% as food and energy costs pushed prices to their highest level in more than 40 years. If we exclude food and energy, core inflation still rose 6.4%, which was still the highest since August 1982. Gasoline, groceries, and housing were the biggest contributors to the CPI gain. The FED was expected to raise interest rates by as much as 50 basis points. However, investors are speculating that due to the Russia – Ukraine war, the FED may be more cautious and raise rates by only 25 basis points. WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS with US and CHINA STOCKS? Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24 months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe we are seeing the markets beginning to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into metals, commodities, and other safe-havens. UNDERSTAND HOW TO NAVIGATE OUR VOLATILE MARKETS! GET READY, GET SET, GO -I invite you to learn more about how my three ETF Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Tepid BoJ Stance Despite Inflation Surge: Future Policy Outlook

Bank Of England Decided On Interest Rate - 25bps Raise! Check Live Markets' Reaction

Mikołaj Marcinowski Mikołaj Marcinowski 17.03.2022 12:55
Let's see how have GBPUSD and UK100 (FTSE 100) reacted to the raise of the interest rate. Charts: Courtesy of TradingView.com [LAST UPDATE: 17/03/22 15:04 GMT] GBPUSD UK 100 Source: TradingView.com
Interaction Between Price Of Gold (XAUUSD) And Fed's Interest Rate Decision

Interaction Between Price Of Gold (XAUUSD) And Fed's Interest Rate Decision

Przemysław Radomski Przemysław Radomski 17.03.2022 16:07
  The Fed will want to keep inflation under control, and that could have miserable consequences for gold and miners. Will we see a repeat from 2008?  The question one of my subscribers asked me was about the rise in mining stocks and gold and how it was connected to what was happening in bond yields. Precisely, while short-term and medium-term yields moved higher, very long-term yields (the 30-year yields) dropped, implying that the Fed will need to lower the rates again, indicating a stagflationary environment in the future. First of all, I agree that stagflation is likely in the cards, and I think that gold will perform similarly to how it did during the previous prolonged stagflation – in the 1970s. In other words, I think that gold will move much higher in the long run. However, the market might have moved ahead of itself by rallying yesterday. After all, the Fed will still want to keep inflation under control (reminder: it has become very political!), and it will want commodity prices to slide in response to the foregoing. This means that the Fed will still likely make gold, silver, and mining stocks move lower in the near term. In particular, silver and mining stocks are likely to decline along with commodities and stocks, just like what happened in 2008. Speaking of commodities, let’s take a look at what’s happening in copper. Copper invalidated another attempt to move above its 2011 high. This is a very strong technical sign that copper (one of the most popular commodities) is heading lower in the medium term. Yes, it might be difficult to visualize this kind of move given the recent powerful upswing, but please note that it’s in perfect tune with the previous patterns. The interest rates are going up, just like they did before the 2008 slide. What did copper do before the 2008 slide? It failed to break above the previous (2006) high, and it was the failure of the second attempt to break higher that triggered the powerful decline. What happened then? Gold declined, but silver and mining stocks truly plunged. The GDXJ was not trading at the time, so we’ll have to use a different proxy to see what this part of the mining stock sector did. The Toronto Stock Exchange Venture Index includes multiple junior mining stocks. It also includes other companies, but juniors are a large part of it, and they truly plunged in 2008. In fact, they plunged in a major way after breaking below their medium-term support lines and after an initial corrective upswing. Guess what – this index is after a major medium-term breakdown and a short-term corrective upswing. It’s likely ready to fall – and to fall hard. So, what’s likely to happen? We’re about to see a huge slide, even if we don’t see it within the next few days. In fact, the outlook for the next few days is rather unclear, as different groups of investors can interpret yesterday’s developments differently. However, once the dust settles, the precious metals sector is likely to go down significantly. Gold is up in today’s pre-market trading, but please note that back in 2020, after the initial post-top slide, gold corrected even more significantly, and it wasn’t really bullish. This time gold doesn’t have to rally to about $2,000 before declining once again, as this time the rally was based on war, and when we consider previous war-based rallies (U.S. invasion of Afghanistan, U.S. invasion of Iraq, Russia’s invasion of Crimea), we know that when the fear-and-uncertainty-based top was in, then the decline proceeded without bigger corrections. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
S&P 500 (SPX) - It Looks Like Fed Decision Was Needed To Go Up

S&P 500 (SPX) - It Looks Like Fed Decision Was Needed To Go Up

Monica Kingsley Monica Kingsley 17.03.2022 15:57
S&P 500 reversed the pre-FOMC decline, and turned up. The upswing didn‘t fizzle out after the conference, quite to the contrary, the credit markets deepened their risk-on posture. I guess stocks are buying the story of 7 rate hikes and balance sheet reduction in 2022 a bit too enthusiastically. Not gonna happen, next quarter‘s GDP data would probably be already negative. Yet Powell says that the risk of recession into next year isn‘t elevated – given the projected tightening, I beg to differ. But of course, Powell is right – it‘s only that we won‘t see all those promised hikes, let alone balance sheet reduction starting in spring. Inflation would retreat a little towards year‘s end (on account of recessionary undercurrents and modest tightening), only to surprise once again in 2023 on the upside. I already wrote so weeks ago – before the East European events. There wouldn‘t enough time to celebrate the notion of vanquishing inflation. For now, stocks can continue the bullish turn – just as commodities and precious metals aren‘t asking permission. The FOMC is over, and real assets can rise, including the badly beaten crude oil. Made a good decision to keep adding to the commodities positions at much lower prices (or turning bullish stocks around the press conference). Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 upswing looks like it can go on for a while. It was driven by tech, participating more enthusiastically than value. The conditions are in place for the rally to continue, and it‘s likely that Friday would be a better day than Thursday for the bulls. Credit Markets HYG is catching quite some bid, and credit markets have turned decidedly risk-on. It also looks like a sigh of relief over no 50bp hike – the stock market rally got its hesitant ally. Gold, Silver and Miners Precious metals upswing can return – and this correction wasn‘t anyway sold heavily into. Needless to say how overdone it was if you look at the miners. $1950s would be reconquered easily. Crude Oil Crude oil bottom looks to be in, and $110s are waiting. Obviously it would take more than a couple of days to return there, but we‘re on the way. Copper Copper is rebounding, and even if other base metals aren‘t yet following too enthusiastically, $4.70 isn‘t far away. Coupled with precious metals returning to more reasonable values, the red metal would continue trending higher. Bitcoin and Ethereum Cryptos are leaning risk-on, and the bulls will close this weekend on a good note. Today‘s price action is merely a consolidation in a short-term upswing. Summary S&P 500 bulls got enough fuel from the Fed, and the run can continue – albeit at a slower pace. Importantly, credit markets aren‘t standing in the short-term way, but I think they would carve out a bearish divergence when this rally starts topping out. I‘m not looking for fresh ATHs, the headwinds are too stiff, but as stated within today‘s key analysis, the tech participation is a very encouraging sign for the short-term. The dollar indeed didn‘t make any kind of upside progress to speak of yesterday – and as I have also written at length in yesterday‘s report, the pre-FOMC trading pattern in real assets can be reversed now. Long live precious metals, oil and copper gains! Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
GBPUSD Almost Full Recovered After BoE's Decision, USDJPY Doesn't Fluctuate Significantly, S&P 500 (SPX) Is Not So Far From 4400.00

GBPUSD Almost Full Recovered After BoE's Decision, USDJPY Doesn't Fluctuate Significantly, S&P 500 (SPX) Is Not So Far From 4400.00

Jing Ren Jing Ren 18.03.2022 07:58
GBPUSD attempts to rebound The British pound stalled after the BOE failed to secure a unanimous vote for higher rates. A bullish RSI divergence suggests exhaustion in the sell-off, and combined with the indicator’s oversold condition on the daily chart, may attract buying interest. A tentative break above 1.3190 led some sellers to take profit. The bulls will need to push above the 1.3250 next to the 20-day moving average to get a foothold. On the downside, the psychological level of 1.3000 is a critical floor to keep the current rebound valid. USDJPY takes a breather The Japanese yen struggles as the BOJ pledges to stick with stimulus. Sentiment turned extremely bullish after the pair rallied above December 2016’s high at 118.60. The RSI went overbought on both hourly and daily charts, and the overextension could refrain buyers from chasing bids. Trend followers may be waiting to buy at pullbacks. 117.70 is the first level to gauge buying interest and 116.80 is the second line of support. A rebound above 119.00 would extend gains beyond the psychological level of 120.00. SPX 500 tests resistance The S&P 500 bounced higher after Russia averted a bond default. Price action has stabilized above last June’s lows around 4140 where a triple bottom indicates a strong interest in keeping the index afloat. A previous attempt above 4350 forced sellers to cover but hit resistance at 4420. A bullish close above this key level on the daily chart could trigger a runaway rally. 4590 would be the next target when sentiment turns around. Otherwise, a lack of conviction from the buy-side would send the index to test 4250.
Gold Is Showing A Good Sign For Further Drop

Can Disinflation Support A Decline Of Price Of Gold?

Arkadiusz Sieron Arkadiusz Sieron 18.03.2022 15:13
  Inflation continues to rise but may soon reach its peak. After that, its fate will be sealed: a gradual decline. Does the same await gold?If you like inviting people over, you’ve probably figured out that some guests just don’t want to leave, even when you’re showing subtle signs of fatigue. They don’t seem to care and keep telling you the same not-so-funny jokes. Even in the hall, they talk lively and tell stories for long minutes because they remembered something very important. Inflation is like that kind of guest – still sitting in your living room, even after you turned off the music and went to wash the dishes, yawning loudly. Indeed, high inflation simply does not want to leave. Actually, it’s gaining momentum. As the chart below shows, core inflation, which excludes food and energy, rose 6.0% over the past 12 months, speeding up from 5.5% in the previous month. Meanwhile, the overall CPI annual rate accelerated from 7.1% in December to 7.5% in January. It’s been the largest 12-month increase since the period ending February 1982. However, at the time, Paul Volcker raised interest rates to double digits and inflation was easing. Today, inflation continues to rise, but the Fed is only starting its tightening cycle. The Fed’s strategy to deal with inflation is presented in the meme below. What is important here is that the recent surge in inflation is broad-based, with virtually all index components showing increases over the past 12 months. The share of items with price rises of over 2% increased from less than 60% before the pandemic to just under 90% in January 2022. As the chart below shows, the index for shelter is constantly rising and – given the recent spike in “asking rents” – is likely to continue its upward move for some time, adding to the overall CPI. What’s more, the Producer Price Index is still red-hot, which suggests that more inflation is in the pipeline, as companies will likely pass on the increased costs to consumers. So, will inflation peak anytime soon or will it become embedded? There are voices that – given the huge monetary expansion conducted in response to the epidemic – high inflation will be with us for the next two or three years, especially when inflationary expectations have risen noticeably. I totally agree that high inflation won’t go away this year. Please just take a look at the chart below, which shows that the pandemic brought huge jumps in the ratio of broad money to GDP. This ratio has increased by 23%, from Q1 2020 to Q4 2021, while the CPI has risen only 7.7% in the same period. It suggests that the CPI has room for a further increase. What’s more, the pace of growth in money supply is still far above the pre-pandemic level, as the chart below shows. To curb inflation, the Fed would have to more decisively turn off the tap with liquidity and hike the federal funds rate more aggressively. However, as shown in the chart above, money supply growth peaked in February 2021. Thus, after a certain lag, the inflation rate should also reach a certain height. It usually takes about a year or a year and a half for any excess money to show up as inflation, so the peak could arrive within a few months, especially since some of the supply disruptions should start to ease in the near future. What does this intrusive inflation imply for the precious metals market? Well, the elevated inflationary pressure should be supportive of gold prices. However, I’m afraid that when disinflation starts, the yellow metal could suffer. The decline in inflation rates implies weaker demand for gold as an inflation hedge and also higher real interest rates. The key question is, of course, what exactly will be the path of inflation. Will it normalize quickly or gradually, or even stay at a high plateau after reaching a peak? I don’t expect a sharp disinflation, so gold may not enter a 1980-like bear market. Another question of the hour is whether inflation will turn into stagflation. So far, the economy is growing, so there is no stagnation. However, growth is likely to slow down, and I wouldn’t be surprised by seeing some recessionary trends in 2023-2024. Inflation should still be elevated then, creating a perfect environment for the yellow metal. Hence, the inflationary genie is out of the bottle and it could be difficult to push it back, even if inflation peaks in the near future. Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care.
What Is Going On Financial Markets Today? Russia Will Not Resume Deliveries Of Gas

"Boring" Bitcoin (BTC) And Gaining S&P 500 (SPX). Crude Oil Price Chart Shows A Green Candle At The Right Hand Side,

Monica Kingsley Monica Kingsley 18.03.2022 15:50
S&P 500 extended gains, and the risk appetite in bonds carried over into value rising faster than tech. Given the TLT downswing though, it‘s all but rainbows and unicorns ahead today. Not only that quad witching would bring high volume and chop, VIX itself doesn‘t look to slide smoothly below 25 today. Friday‘s ride would be thus rocky, and affected by momentum stalling in both tech and value. Real assets though can and will enjoy the deserved return into the spotlight. With much of the preceding downswing being based on deescalation hopes (that aren‘t materializing, still), the unfolding upswing in copper, oil and precious metals (no, they aren‘t to be spooked by the tough Fed tightening talk) would happen at a more measured pace than had been the case recently. Pay attention to the biting inflation, surrounding blame games hinting at no genuine respite – read through the rich captions of today‘s chart analyses, and think about reliable stores of real value. And of course, enjoy the open profits. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 looks likely to consolidate as the 4,400 – 4,450 zone would be tough to overcome, and such a position relative to both the moving averages shown, has historically stopped quite a few steep recoveries off very negative sentiment readings. Credit Markets HYG is likely to slow down here, as in really stall and face headwinds. The run had been respectable, and much of the easy gains happened already yesterday. Gold, Silver and Miners Precious metals upswing did indeed return – and the miners performance doesn‘t hint at a swift return of the bears, to put it mildly. The path to $1950s is open. Crude Oil Crude oil bottom was indeed in, and the price can keep recovering towards $110s and beyond. No, the economy isn‘t crashing yet, monetary policy isn‘t forcing that outcome, and the drawing of petroleum reserves is a telltale sign of upside price pressures mounting. It‘ll be an interesting April, mark my words. Copper Copper is duly rebounding, and not at all overheated. The move is also in line with other base metals. My yesterday‘s target of $4.70 has already been reached – I‘m looking for a measured pace of gains to continue. Bitcoin and Ethereum Cryptos are taking a small break, highlighting the perils of today. The boat won‘t be rocked too much. Summary S&P 500 bulls made the easy gains already yesterday, and today‘s session is going to be volatile, even treacherous in establishing a clear and lasting direction (i.e. choppy), and the headwinds would be out there in the plain open. These would come from bonds not continuing in the risk-on turn convincingly rather than commodities and metals surging head over heels. Both tech and value would feel the heat as VIX would show signs of waking up (to some degree). Today‘s session won‘t change the big picture dynamics of late, and I invite you to read more in-depth commentary within the individual market sections of today‘s full analysis. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Natural Gas Hits Its Final Target. The Luck of St. Patrick’s Day?

Natural Gas Hits Its Final Target. The Luck of St. Patrick’s Day?

Sebastian Bischeri Sebastian Bischeri 18.03.2022 17:14
  St. Patrick’s Day is historically considered among the best trading days. Apparently, judging by the results, it may have brought some luck to natural gas. If you are interested in looking at the stats, an article by Market Watch summed them up. The second target hit – BOOM! Yesterday, on St. Patrick's Day, the opportunity to bank the extra profits from my recent Nat-Gas trade projections (provided on March 2) finally arrived. That trade plan has provided traders with multiple bounces to trade the NYMEX Natural Gas Futures (April contract) in various ways, always depending on each one’s personal risk profile. To get some more explanatory details on understanding the different trading ways this fly map (trading plan) could offer, I invite you to read my previous article (from March 11). To quickly sum it up, the various trade opportunities that could be played were as follows (with the following captures taken on March 11): The first possibility is swing trading, with the trailing stop method explained in my famous risk management article. Henry Hub Natural Gas (NGJ22) Futures (April contract, hourly chart) The second option consisted of scalping the rebounds with fixed targets (active or experienced traders). I named this method “riding the tails” (or the shadows). Henry Hub Natural Gas (NGJ22) Futures (April contract, 4H chart) The third way is position trading – a more passive trading style (and usually more rewarding). Henry Hub Natural Gas (NGJ22) Futures (April contract, daily chart) The chart below shows a good overall view of NYMEX Natural Gas hitting our final target, $4.860: Henry Hub Natural Gas (NGJ22) Futures (April contract, daily chart) Henry Hub Natural Gas (NGJ22) Futures (April contract, 4H chart) As you can see, the market has provided us with multiple entries into the same support zone (highlighted by the yellow band) – even after hitting the first target, you may have noticed that I maintained the entry conditions in place – after the suggestion to drag the stop up just below the new swing low ($4.450). The market, still in a bull run, got very close to that point on March 15 by making a new swing low at $4.459 (just about 10 ticks above it). Before that, it firmly rebounded once more (allowing a new/additional entry) and then extended its gains further away while consecutively hitting target 1 ($4.745) again. After that, it finally hit target 2 ($4.860)! That’s all folks for today. It is time to succesfully close this trade. Have a great weekend! Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
ECB's Dovish Shift: Markets Anticipate Softer Policy Guidance

Major Forex Pairs: EUR/USD, GBP/USD, EURGBP Affected By Interest Rates Decisions – The Week On Markets By FXMAG.COM

Mikołaj Marcinowski Mikołaj Marcinowski 18.03.2022 19:17
Fed raised interest rate by 25bps so did Bank of England. Data shows that these events haven’t hit major Forex pairs so hard so let’s verify the theory. EUR/USD – A ca. 1.2% Gain The chart shows the week began without significant fluctuations until the Fed decision on March 16th. Immediately after the announcement of the key monetary policy indicator a huge declined stopped the strengthening Euro. The pair even neared the 2% gain level, but during the week has declined again slowly ending it near +1.2%. GBP/USD – Two announcements correlation The week hadn’t began too positively for British pound, but the following days had put GBP back on track to a ca. 1% gain after significant declines shortly after Fed and BoE decisions on accordingly Wednesday and Thursday. EUR/GBP – A ca. 1% Increased Corrected Naturally Fed’s announcement didn’t affect the single currency and British bound heavily, but the Bank of England’s fuelled EUR/GBP almost 1% jump which had been gradually corrected in the following days leaving the pair almost unchanged compared to the 14th March. USD/PLN – exotic pair with interesting outlook There’s no doubt PLN has strengthened throughout the week even if Fed announced the raise of interest rate. The stronger outlook of PLN is surely caused by the previous week’s tightening of monetary policy. EUR/PLN – PLN gained ca. 1.5% Global factors makes the pais with PLN the most interesting ones as another shows a significant loss of Euro To Polish zloty. The following week might bring next tempting fluctuations so let’s keep an eye on this pair.
The Week On Markets: Bitcoin Has Added 10%! Price Of Gold Decreased, But It Could Be Worse.

The Week On Markets: Bitcoin Has Added 10%! Price Of Gold Decreased, But It Could Be Worse.

Mikołaj Marcinowski Mikołaj Marcinowski 18.03.2022 20:15
BTC/USD Bitcoin has added a lot over that week. A 10% gain has remained despite the fact Fed raised interest rate. Gold Gold plunged after the Fed decision, but didn’t crash ending the week with a not so big decline. S&P 500 SPX rally was caused, among others, by Chinese stocks which are said to be back in the game. UK 100 (FTSE 100) The British had its ups and downs this week, but all in all gained ca. 4% at the end of the day (week!)
Potential recovery to approx. US$2,000

Potential recovery to approx. US$2,000

Florian Grummes Florian Grummes 20.03.2022 10:13
Starting at a low of US$1,780 on January 28th, gold went up rapidly US$290 within less than six weeks, reaching a short-term top at US$2,070. Since that high on March 8th, however, gold prices fell back even faster. In total, gold plunged a whooping US$175 to a low of US$1,895 in the aftermath of last week’s FOMC meeting. A quick bounce took prices back to around US$1,950, but the weekly close at around US$1,920 came in lower.This volatile roller coaster ride is truly not for the faint of heart. Nevertheless, gold has done well this year, and, despite a looming multi-months correction, it might now be in a setup from which another attack towards US$2,000 could start in the short-term.Gold in US-Dollar, weekly chart as of March 19th, 2022.Gold in US-Dollar, weekly chart as of March 19th, 2022.On the weekly chart, gold prices have been rushing higher with great momentum. For five consecutive weeks, the bulls were able to bend the upper Bollinger band (US$1,963) upwards. However, the final green candle closed far outside the Bollinger bands and looks like a weekly reversal. Consequently, if gold has now dipped into a multi-month correction, a retracement back to the neckline of the broken triangle respectively the inverse head & shoulder pattern in the range of US$1,820 to US$1,850 would be quite typical and to be expected. In this range, the classic 61.8% retracement of the entire wave up (from the low at US$1,678 on August 9th, 2021, to the most recent blow off top at US$2,070) sits at US$1,827.79. The weekly stochastic oscillator has not yet rolled over, but weekly momentum is overbought and vulnerable.In total, the weekly chart shows a big reversal and therefore no longer supports the bullish case. However, it could still take some more time before a potential correction gains momentum.  Gold in US-Dollar, daily chart as of March 19th, 2022.Gold in US-Dollar, daily chart as of March 19th, 2022.While the weekly chart may just be at the beginning of a multi-month correction, the overbought setup on the daily chart has already been largely cleared up by the recent steep pullback. Despite Friday’s rather weak closing, the odds are not bad that gold might very soon be turning up again. However, gold bulls need to take out the pivot resistance around US$1,960 to unlock higher price targets in the context of a recovery. The potential Fibonacci retracements are waiting at US$1,962, US$2,003 and US$2,028. Hence, gold could bounce back to approx. US$2,000, which is a round number and therefore a psychological resistance.On the other hand, if gold fails to move back above Thursday’s high at US$1,950, weakness will increase immediately and significantly. In that case, bulls can only hope that the quickly rising lower Bollinger Band (US$1,861) would catch and limit a deeper sell-off. But since the stochastic oscillator has reached its oversold zone, bears might have a hard time pushing gold significantly below US$1,900.Overall, the daily chart is slightly oversold, and gold might start a bounce soon. Conclusion: Potential recovery to approx. US$2,000After a strong rally and a steep pullback, the gold market is likely in the process of reordering. While the weekly timeframe points to a correction, the oversold daily chart points to an immediate bounce. Given these contradictory signals, investors and especially traders are well advised to exercise patience and caution in the coming days, weeks, and months. If gold has entered a corrective cycle, it could easily take until the early to mid-summer before a sustainable new up-trend might emerge.Alternative super bullish scenarioAlternatively, and this of course is still a possible scenario, the breakout from the large “cup and handle” pattern is just getting started. In this very bullish case, gold is in the process of breaking out above US$2,100 to finally complete the very large “cup and handle” pattern, which has been developing for 11 years! Obviously, the sky would then be the limit.To summarize, gold is getting really bullish back above US$2,030. On the other hand, below $US1,895 the bears would be in control. In between those two numbers, the odds favor a bounce towards US$1,960 and maybe USD$2,000.Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can also subscribe to our free newsletter.Disclosure: Midas Touch Consulting and members of our team are invested in Reyna Gold Corp. These statements are intended to disclose any conflict of interest. They should not be misconstrued as a recommendation to purchase any share. This article and the content are for informational purposes only and do not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting.By Florian Grummes|March 19th, 2022|Tags: Gold, Gold Analysis, Gold bearish, Gold bullish, gold chartbook, Gold consolidation, gold fundamentals, Gold sideways, precious metals, Reyna Gold|0 Commentshttps://www.midastouch-consulting.com/gold-chartbook-19032022-potential-recovery-to-approx-us2000About the Author: Florian GrummesFlorian Grummes is an independent financial analyst, advisor, consultant, trader & investor as well as an international speaker with more than 20 years of experience in financial markets. He is specialized in precious metals, cryptocurrencies and technical analysis. He is publishing weekly gold, silver & cryptocurrency analysis for his numerous international readers. He is also running a large telegram Channel and a Crypto Signal Service. Florian is well known for combining technical, fundamental and sentiment analysis into one accurate conclusion about the markets. Since April 2019 he is chief editor of the cashkurs-gold newsletter focusing on gold and silver mining stocks. Besides all that, Florian is a music producer and composer. Since more than 25 years he has been professionally creating, writing & producing more than 300 songs. He is also running his own record label Cryon Music & Art Productions. His artist name is Florzinho.
Risks in the US Banking System: Potential Impacts and Contagion Concerns

The Following Week: Only One (!) Interest Rate Decision, British CPI And US Crude Oil Inventories – Economic Calendar By FXMAG.COM

Mikołaj Marcinowski Mikołaj Marcinowski 18.03.2022 19:51
After a week full of central bank’s announcement it’s time to shift down and observe ‘boring’ economic indicators. Data: courtesy of Investing.com Monday, Tuesday - Japan And South Africa Bank of Japan released its monetary policy statement the previous week. The following Monday is a day free for both Japanese and South Africa’s people. Wednesday - Great Britain, Germany And The USA On Wednesday British CPI is released (prev. 5.5%). One and a half an hour later German Manufacturing PMI goes public. After midday (12:30 p.m.) Annual Budget Release is published and followed by the releases of US New Home Sales. At 2:30 p.m. many investors might follow the release of Crude Oil Inventories. Thursday – Switzerland, Germany And The USA At 8:30 SNB Interest Rate Decision (Q1) is released. What is not so usual – the current interest rate in Switzerland amounts to… -0.75%. At the same time German Manufacturing PMI is released. Four hours later important news comes from the USA where Core Durable Goods Orders are presented (0.7%). Friday – Great Britain, Germany And The USA Friday’s morning might be important for British people as Retail Sales indicator is published. The previously announced value was 1.9%. At 9 a.m. we head to Germany for the last time the following week, because German Ifo Business Climate is released (prev. 98.9). The last important event of the week 21/03-25/03 is the US Pending Home Sales (MoM) released at 2 p.m. Source: Investing.com Economic Calendar Time: GMT
AUD/USD Touches 9-Month Low as Australian Job Growth Slips

DAX (GER 40) Has Gone Up Slightly. BMW, BAYN And DBK Have Added The Most

Mikołaj Marcinowski Mikołaj Marcinowski 21.03.2022 14:55
German Index doesn’t shock investors with significant fluctuations despite the fact many countries interact with persistent conflict between Russia and Ukraine. DAX opened only a bit lower than it closed on Friday, March 17th and seems to end the day without any major move. As before we highlight below three companies which have gained the most during today’s session. BMW Bavarian automotive company is today’s leader, as until now it has gained over 2%. BAYN - Bayer Well-known brand associated with medicaments until now has gained over 2% DBK – Deutsche Bank One of the most recongizable banks of the world has gained ca. 2% until now Charts: courtesy of TradingView.com Source: TradingView.com
S&P 500 (SPX) Up, Crude Oil Up, Credit Markets Up, Bitcoin Price Oops...

S&P 500 (SPX) Up, Crude Oil Up, Credit Markets Up, Bitcoin Price Oops...

Monica Kingsley Monica Kingsley 21.03.2022 15:37
S&P 500 did really well through quad witching, and the same goes for credit markets. 4-day streak of non-stop gains – very fast ones. Short squeeze characteristics in the short run, makes me think this rally fizzles out before the month ends – 4,600 would hold. We‘re likely to make a higher low next, and that would be followed by 4-6 weeks of rally continuation before the bears come back with real force again. July would present a great buying opportunity in this wild year of a giant trading range. As I wrote yesterday: (…) The paper asset made it through quad witching in style - both stocks and bonds. The risk-on sentiment however didn't sink commodities or precious metals. Wednesday's FOMC brought worries over the Fed sinking real economy growth but Powell's conference calmed down fears through allegedly no recession risks this year, ascribing everything to geopolitics. Very convenient, but the grain of truth is that the Fed wouldn't indeed jeopardize GDP growth this year - that's the context of how to read the allegedly 7 rate hikes and balance sheet shrinking this year still. Not gonna happen as I stated on Thursday already. Such are my short- and medium-term thoughts on stocks. Copper remains best positioned to continue rising with relatively little volatility while crude oil isn‘t yet settled (its good times would continue regardless of the weak volume rally of last two days, which is making me a little worried). Precious metals are still basing, and would continue moving higher best on the Fed underperforming in its hawkish pronouncements. No way they‘re hiking 7 times this year and shrinking balance sheet at the same time as I wrote on Thursday – Treasury yields say they‘ll take on inflation more in 2023. 2022 is a mere warm-up. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 is now past the 4,400 – 4,450 zone, and hasn‘t yet consolidated. This week would definitely though not be as bullish as the one just gone by – the bulls will be challenged a little. Credit Markets HYG eked out more gains, but the air is slowly becoming thinner. As the sentiment turns more bullish through no deep decline over the coming few days, that‘s when junk bonds would start wavering. Gold, Silver and Miners Precious metals aren‘t turning down for good here – I think they‘re deciphering the Fed story of hiking slower than intended, which in effect gives inflation a new lease on life. Not that it was wavering, though. More upside in gold and silver to come. Crude Oil Crude oil is rising again, but look for a measured upswing that‘s not free from headwinds. While I think we would climb above $110 still, I‘m sounding a more cautious note given the decreasing volume – I would like to see more conviction next. Copper Copper is behaving, and would continue rising reliably alongside other commodities. It‘s also the best play considering downside protection at the moment. Bitcoin and Ethereum Bitcoin isn‘t recovering Sunday‘s setback – but the Ethereum upswing bodes well for risk taking today, even that doesn‘t concern cryptos all too much. Summary S&P 500 has a bit more to run before running into headwinds, which would happen still this week. Credit markets are a tad too optimistic, and rising yields would leave a mark especially on tech. Value, energy and materials are likely to do much better. Crude oil is bound to be volatile over the coming weeks, but still rising and spiking – not yet settled. Copper and precious metals present better appreciation opportunities when looking at their upcoming volatility. Within today‘s key analysis, I‘ve covered the path of stocks, so do have a good look at the opening part. Finally, cryptos likewise paint the picture of risk-on trades not being over just yet. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Kishu Inu, A Meme Coin, Promotes Growth And Development Through Its Transparency

Can (SHIB) Shiba Inu Price Go For A Rocket Launch?

FXStreet News FXStreet News 21.03.2022 16:05
Shiba Inu price is hovering above the $0.0000223 support level, eyeing a 40% upswing. A quick liquidity run below $0.0000202 is likely before triggering the move to $0.0000283. A daily candlestick close below $0.0000158 will invalidate the bullish thesis for SHIB. Shiba Inu price action seems to be repeating itself after a recent breakout from its downtrend. The rebound is pausing and might go for a liquidity run below a vital support level before a full-blown rally kicks off. Shiba Inu price prepares for a new leg-up Shiba Inu price crashed 77% from its all-time high before setting up a swing low around $0.0000202. The downswing, however, was breached on February 3, as price undertook a u-turn and made a 75% ascent. The new uptrend failed to sustain, however, leading to another downswing. After a brief period of consolidation, SHIB breached through its mini downtrend and is currently establishing a support level around $0.0000223 before triggering an explosive rally higher. However, investors can expect Shiba Inu price to slide lower first in search of liquidity below the $0.0000202 barrier. Such a move will signal the start of an uptrend and interested investors can enter long at $0.0000202. The resulting momentum will likely catapult SHIB to retest the immediate hurdle at $0.0000283. This move would constitute a 40% gain and is where market participants can book profits. SHIB/USDT 1-day chart Even if Shiba Inu price breaches the $0.0000202 barrier, the bulls will have another chance to regroup and attempt a run-up into the nine-hour demand zone, ranging from $0.0000158 to $0.0000193. A daily candlestick close below $0.0000193, however, will produce a lower low and invalidate the bullish thesis. In this scenario, Shiba Inu price could crash 15% and retest the $0.0000135 support level.
Central Banks in the 21st Century: Independence, Credibility, and Interest Rate Challenges

UK100 (FTSE 100) Added Ca. 0.5%. Who Gained? AAF, AAL And BP In Focus. The Latter Linked With Rising Crude Oil Price

Mikołaj Marcinowski Mikołaj Marcinowski 21.03.2022 19:11
The most popular British index begins the week in a delicate manner. The amplitude is not that high and we’re to wait a bit longer for more exciting fluctuations. Antofagasta, BP and Anglo American all companies linked with commodities and they all rise. These stock prices fluctuate mostly as the global situation seems to be unsure with the tensions between Russia and Ukraine keep going on. BP and Shell gains as crude oil price increase so expect next uptrends coming, as the 'black gold' keeps rising. UK 100 Chart [UPDATE: 17:30 GMT] BP – British Petroleum Gained Ca. 4%  AAF – Antofagasta Added Over 8% AAL – Anglo American PLC Increased By Over 7% Data/Source: Investing.com, TradingView.com
Warren Buffett's Berkshire Hathaway Stock Tops $500,000

Warren Buffett's Berkshire Hathaway Stock Tops $500,000

Chris Vermeulen Chris Vermeulen 21.03.2022 21:44
A subscriber asked us recently where he should be putting his money and how to limit losses in his retirement portfolio. He expressed frustration as he watched Buffett’s Berkshire Hathaway stock going up, but at the same time, the stock indices going lower and many of his previously favored stocks experiencing substantial losses! This conversation naturally piqued our curiosity. We decided to look into this for him and, at the same time, share our findings with our subscribers.Berkshire Hathaway stock traded at an all-time record high price of $520,654.46. At a stock price of $512,991, Berkshire’s market capitalization is $756.23 billion. Last year, Berkshire generated a record $27.46 billion of operating profit, including gains at Geico car insurance, the BNSF railroad, and Berkshire Hathaway Energy.BERKSHIRE vs. S&P 500 BENCHMARKWarren Buffett, age 91 (known as the ‘Sage of Omaha’), is the chairman and CEO of Berkshire Hathaway. He is considered by many to be the most successful stock investor in the world and, according to Forbes Real-Time Billionaire List, has a personal net worth that exceeds $120 billion USD.Very few can compete with his long-term track record. Since 1965, Berkshire has provided +20% average annual returns, almost double the +10.2% average annual returns for the S&P 500 Stock Index benchmark. The 2022 year-to-date comparison is:BRK.A Berkshire Hathaway +14.53%; SPY SPDR ETF -6.36%; FB Facebook -35.64%However, according to Buffett’s own humility, he has endured years of underperformance and has had his share of bad stock picks. When Buffet was asked about drawdowns at one of Berkshire’s annual meetings, he stated, “Unless you can watch your stock holdings decline by 50% without becoming panic-stricken, you should not be in the stock market.” According to www.finance.yahoo.com, the five biggest percentage losses for Berkshire have been:1974 -48.7%, 1990 -23.1%, 1999 -19.9%, 2008 -31.8%, and 2015 -12.5%.WHAT CAN WE LEARN FROM THE ‘BUFFETT INDICATOR’?The Buffett Indicator, as dubbed by Berkshire shareholders, is the ratio of the total United States stock market valuations (the Wilshire 5000 stock index) divided by the annual U.S. GDP. The indicator peaked at the beginning of 2022 and remains near all-time highs even though many stocks are well off their record levels.This historical chart of the Buffett Indicator was created by www.currentmarketvaluation.com. Doing quantitative analysis, we learn that the indicator is more than 1.6 standard deviations above the historical average, which suggests the market is over-valued and, in time, will fall back to its historical average.Berkshire Hathaway At Fibonacci Resistance!On March 18, 2022, Berkshire hit an all-time high price of $520,654. The Fibonacci resistance level of 2.618 or 261.8% of the March 23 low of $239,440 is $520,196. As shown on the daily chart, Berkshire also met resistance at the 2.618 standard deviations of the quarterly Bollinger Band.THE BENCHMARK: S&P 500 SPY ETFThe S&P 500 Index is the industry standard benchmark when comparing investment returns. It’s worth noting that as Berkshire reached the Fibonacci 2.618 resistance, the SPY found support at the Fibonacci 1.618 of the SPY March 23, 2020 low.Central banks have begun to tighten credit by raising interest rates for the first time since 2018, attempting to bring fast-rising energy, food, and housing prices under control. More time is needed to determine the full impact that rising global interest rates will have on current markets.However, on the chart below, we can see that the SPY put in a major top around 480 and, for the time being, has found support around 420 (the Fibonacci 1.618 level). Considering the increased market volatility and that we are now entering a cycle of higher interest rates, it would not surprise us to see the SPY eventually break below 420.It is worth noting that when a market makes a top after a prolonged bull-market, we usually experience distribution. Distribution with volatility results from large institutions beginning to liquidate their holdings while smaller retail investors are trying to buy stocks on sale. In other words, the retail investors are buying the dip hoping to get a bargain, while the institutional investors are selling the rally hoping to be liquidated and/or go short. It is a battle that retail investors will eventually lose!It is important to understand we are not saying the market has topped and is headed lower. This article sheds some light on some interesting analyses that you should be aware of. As technical traders, we follow price only, and when a new trend has been confirmed, we will change our positions accordingly. We provide our ETF trades with subscribers to our newsletter, and surprisingly, we have just entered five new trades.Sign up for my free trading newsletter so you don’t miss the next opportunity!WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS? Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens.GET READY, GET SET, GO - We invite you to learn more about how my three ETF Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Hawkish Fed „Surprise“

Hawkish Fed „Surprise“

Monica Kingsley Monica Kingsley 22.03.2022 15:55
S&P 500 wavered but is bound to get its act together in the medium term. Powell‘s statements shouldn‘t have stunned the bulls, but they did – the mere reiteration of the tightening plans coupled with remarks on the need to stamp out aggressive inflation before it‘s too late (anchored inflation expectations, anyone? I talked that in the run up to the Sep 2021 P&G price hikes and how the competition would be following in a nod to high input costs, with heating job market on top of the commodities pressure pinching back then already), sent stocks and bonds down.Add the recession fears that were assuaged during the Wednesday‘s conference, and you get the S&P 500 bulls having to dust off after Monday‘s setback. Given how early we‘re in the tightening cycle, and that the real economy isn‘t yet breaking down no matter what‘s in the pipeline geopolitically as regards various consequences to commodities, goods, services and money flows, the stock market bulls are still likely to take on the 4,600 as discussed already.Only this time, the upswing would be accompanied by a more measured and balanced commodities upswing, joined in by precious metals. Great profits ahead and already in the making.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 is consolidating above 4,400, and the relative strength in value as opposed to tech, is boding well – the bulls are pushing their luck a bit too hard as a further TLT decline would pressure growth stocks.Credit MarketsHYG is getting under pressure again, but its decline would be uneven in the short run – as in I‘m looking for quite some back and forth action. First, higher in taking on yesterday‘s selling.Gold, Silver and MinersPrecious metals aren‘t turning lower in earnest – the miners‘ leadership bodes well for further gains, and is actually a very good performance given the hawkish Fed „surprise“ (surprise that wasn‘t, shouldn‘t have been).Crude OilCrude oil strength returning is a very good omen for commodities bulls broadly, and the rising volume hints at return of bullish spirits. The upswing is far from over – look how far black gold got on relatively little conviction, and where oil stocks trade at the moment.CopperCopper is acting strongly, and the downswing didn‘t entice the bears much. The path of least resistance remains higher, and the red metal isn‘t yet outperforming the CRB Index. Great pick for portfolio gains with as little volatility as can be.Bitcoin and EthereumBitcoin went on to recover the weekend setback – Ethereum upswing presaged that. They‘re both a little stalling now, but entering today‘s regular session on a constructive note. I‘m looking for modest gains extension.SummaryS&P 500 is bound to recover from yesterday‘s intraday setback – the animal spirits and positive seasonality are there to overcome the brief realization that the Fed talks seriously about tightening and entrenched inflation. While not even the implied readiness to hike by 50bp here and there won‘t cut it and send inflation to the woodshed, let alone inflation expectations, the recession fears would be the next powerful ally of stock market bears. For now though, we‘re muddling through generally higher (I‘m still looking for a tradable consolidation of last week‘s sharp gains), and will do so over the coming several weeks. The real profits are to be had in commodities and precious metals, as I had been saying quite often lately… Enjoy!Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
US Dollar (USD) Amid Fed's Rhetoric And Tomorrow’s Powell Speech. EUR/USD, GBP/USD And USD/JPY In Focus

US Dollar (USD) Amid Fed's Rhetoric And Tomorrow’s Powell Speech. EUR/USD, GBP/USD And USD/JPY In Focus

Mikołaj Marcinowski Mikołaj Marcinowski 22.03.2022 18:48
The last raise of Fed’s interest rate seems to be tip of the iceberg as hawkish rhetoric is vivid in following Jerome Powell’s testimonies. Inflation is still here and according to Investing.com Goldman Sachs predicts that Fed’s next moves are 50bps raises in the two following months. As we’re waiting for tomorrows midday (GMT) which is the time Fed Chairman speaks, let’s review how have most traded, dollar-based pairs traded over last 24 hours. EUR/USD Morning declines appear to be only temporary, USD has weakened in the afternoon and slightly decreased as the pair gained 0.1% until now. GBP/USD The pair has gained ca. 0.6% and can be threated as a ‘trailer’ of the dollar strengthening later this week. USD/JPY After today’s news about Russian-Japanese end of negotiations considering official truce of World War II (!) and ongoing hawkish Fed’s rhetoric Japanese yen has weakened and the pair has gained ca. 1.1% USD/PLN Exotic pair shows an interesting performance once again after an increase of over 0.4% USDPLN has decreased by over 0.5% as the pair seems to be affected by many factors as the country lies close to Ukraine and had its interest rate increased two weeks ago. Source/Data: Investing.com, TradingView.com Charts: Courtesy of TradingView.com
The Bitcoin Market Is Now Developing The Corrective Cycle To The Downside

March 22nd, 2022, Crypto Chartbook

Korbinian Koller Korbinian Koller 22.03.2022 19:44
Bitcoin´s time to go   Trying to pick tops and bottoms is honorable and a desirable goal. Nevertheless, there needs to be other insurances and principles in place. If an ideal spot passes or the market doesn’t provide for a low-risk entry or enough liquidity for an exit, one still needs alternate tools to participate in the market. Our quad exit strategy allows for position building and market participation that consistently extracts monies from the markets. Bitcoin, daily chart, keep calm and keep trading: Bitcoin in USD, daily chart as of March 22nd, 2022. Precision trading gets even more difficult in wartimes, when frequent and conflicting news events jolt prices alternating up and down. The daily chart above shows these jolts over the last three weeks of wartime. We can identify three low-risk long trade entry opportunities (green up arrows on double bottom price scenarios) and one short trading one (red downward arrow at a double top price formation). Our quad exit strategy takes on each of these trades a partial initial profit to mitigate risk, which allows the remainder position size to be the market’s money at risk only.     Bitcoin, weekly chart, pushing up: Bitcoin in USD, weekly chart as of March 22nd, 2022. Zooming out to larger time frames is another way to avoid noise and see a trading scenario more clearly, and, as such, find “go times” with more accuracy. This weekly chart illustrates that entries and exits are rather entry zones (red and green boxes) versus a precise price level. The trader’s goal is to exploit within such a zone a low-risk entry spot on a lower time frame to get positioned. Regarding bitcoin, we find overall price behavior to be up sloping over the last twelve months, a bullish notion. And we find a high likelihood for the momentary entry zone (green box to the right of the chart). In other words, we are right now in a price zone where its Bitcoin´s time to go. Bitcoin, monthly chart, March closing price: Bitcoin in USD, monthly chart as of March 22nd, 2022. Suppose we further remove ourselves from the noise by electing a higher timeframe. In that case, we find a pat situation on the monthly chart, pat not for a more significant edge for prices to go higher up but for timing on when to enter the markets. Our statistics show that it will be essential on what price level the month of March will be closing. With a close above current levels (white line), we will enter a bullish buy zone. Yet, if prices decline from here in the last nine days of this month, the probabilities of an immediate price advance rapidly decline. Bitcoin/Gold-Ratio, daily chart, Bitcoin´s time to go: Bitcoin/Gold-Ratio, daily chart as of March 22nd, 2022. An additional benefit quiet charting provides in turbulent times is to think outside the box. While all noise points toward the most heated issues, finding a trading opportunity elsewhere might be best. In our previous chart book release, we exploited a great go time for bitcoin. Last week, we provided entry points (green up arrows) for rotating one’s gold into bitcoin. Using our quad exit strategy, the trader who wanted to not expose his money to a volatile fiat currency trading world could profit near ten percent on his first fifty percent of position size. We are now placing the stop for the remainder position size to breakeven entry levels. Bitcoin´s time to go: In war, the first casualty is the truth. Under stress, our minds insist on reason, clarity, precise calls for action. Unfortunately, even the best-informed brightest minds can’t find reliable data in times of war since the distortion field of media around the world is at a level where lies and propaganda outweigh facts and truth.  Luckily, a trader can, in these times, rely more heavily on charts. Charts always encompass the sum of opinion. Charts are consistently working as a reliable source to trade from.  The psychological aspect is hugely beneficial since a consistent bombardment of news and everybody’s opinion can get quickly exhausting.  Reduce news data consumption at a time when calm and levelheadedness is the most powerful tool for wealth creation and preservation, and the “go time” will reveal itself nearly effortlessly.     Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on precious metals and cryptocurrencies, you can also subscribe to our free newsletter. Disclosure: This article and the content are for informational purposes only and do not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|March 22nd, 2022|Tags: Bitcoin, Bitcoin bounce, Bitcoin bullish, Bitcoin consolidation, bitcoin/gold-ratio, crypto analysis, crypto chartbook, DeFi, Gold, Gold bullish, low risk, quad exit, technical analysis, trading education|0 Comments About the Author: Korbinian Koller Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
Gold To Go Head To Head With Fed And Inflation

Gold To Go Head To Head With Fed And Inflation

Przemysław Radomski Przemysław Radomski 23.03.2022 15:17
  The Fed's hawkish alerts seem like a voice in the wilderness to gold investors. However, a carefree attitude can backfire on them – in just a few months. An epic battle is unfolding across the financial markets as the Fed warns investors about its looming rate hike cycle and the latter ignores the ramifications. However, with perpetually higher asset prices only exacerbating the Fed's inflationary conundrum, a profound shift in sentiment will likely occur over the next few months. To explain, I highlighted in recent days how the Fed has turned the hawkish dial up to 100. Moreover, I wrote on Mar. 22 that it's remarkable how much the PMs' domestic fundamental outlooks have deteriorated in recent weeks. Yet, prices remain elevated, investors remain sanguine, and the bullish bands continue to play.  However, with inflation still rising and the Fed done playing games, the next few months should elicit plenty of fireworks. For example, with another deputy sounding the hawkish alarm, San Francisco Fed President Mary Daly said on Mar. 22: "Inflation has persisted for long enough that people are starting to wonder how long it will persist. I'm already focused on letting make sure this doesn't get embedded and we see those longer-term inflation expectations drift up." As a result, Daly wants to ensure that the "main risk" to the U.S. economy doesn't end up causing a recession. Please see below: Source: Reuters Likewise, St. Louis Fed President James Bullard reiterated his position on Mar. 22, telling Bloomberg that “faster is better,” and that “the 1994 tightening cycle or removal of accommodation cycle is probably the best analogy here.” Please see below: Source: Bloomberg   Falling on Deaf Ears To that point, while investors seem to think that the Fed can vastly restrict monetary policy without disrupting a healthy U.S. economy, a major surprise could be on the horizon. For example, the futures market has now priced in nearly 10 rate hikes by the Fed in 2022. As a result, should we expect the hawkish developments to unfold without a hitch? Please see below: To explain, the light blue, dark blue, and pink lines above track the number of rate hikes expected by the Fed, BoE, and ECB. If you analyze the right side of the chart, you can see that the light blue line has risen sharply over the last several days and months. For your reference, if you focus your attention on the material underperformance of the pink line, you can see why I’ve been so bearish on the EUR/USD for so long. Also noteworthy, please have a look at the U.S. 2-Year Treasury yield minus the German 2-Year Bond yield spread. If you analyze the rapid rise on the right side of the chart below, you can see how much short-term U.S. yields have outperformed their European counterparts in 2021/2022. Source: Bloomberg/ Lisa Abramowicz More importantly, though, with Fed officials’ recent rhetoric encouraging more hawkish re-pricing instead of talking down expectations (like the ECB), they want investors to slow their roll. However, investors are now fighting the Fed, and the epic battle will likely lead to profound disappointment over the medium term. Case in point: when Fed officials dial up the hawkish rhetoric, their “messaging” is supposed to shift investors’ expectations. As such, the threat of raising interest rates is often as impactful as actually doing it. However, when investors don’t listen, the Fed has to turn the hawkish dial up even more. If history is any indication, a calamity will eventually unfold.  Please see below: To explain, the blue line above tracks the U.S. federal funds rate, while the various circles and notations above track the global crises that erupted during the Fed’s rate hike cycles. As a result, standard tightening periods often result in immense volatility.  However, with investors refusing to let asset prices fall, they’re forcing the Fed to accelerate its rate hikes to achieve its desired outcome (calm inflation). As such, the next several months could be a rate hike cycle on steroids.  To that point, with Fed Chairman Jerome Powell dropping the hawkish hammer on Mar. 21, I noted his response to a question about inflation calming in the second half of 2022. I wrote on Mar. 22: "That story has already fallen apart. To the extent it continues to fall apart, my colleagues and I may well reach the conclusion we'll need to move more quickly and, if so, we'll do so." To that point, Powell said that “there’s excess demand" and that "the economy is very strong and is well-positioned to handle tighter monetary policy." As a result, while investors seem to think that Powell’s bluffing, enlightenment will likely materialize over the next few months. Please see below: Source: Reuters Furthermore, with Goldman Sachs economists noting the shift in tone from “steadily” in January to “expeditiously” on Mar. 21, they also upped their hawkish expectations. They wrote: “We are now forecasting 50bp hikes at both the May and June meetings (vs. 25bp at each meeting previously). The level of the funds rate would still be low at 0.75-1% after a 50bp hike in May, and if the FOMC is open to moving in larger steps, then we think it would see a second 50bp hike in June as appropriate under our forecasted inflation path.” “After the two 50bp moves, we expect the FOMC to move back to 25bp rate hikes at the four remaining meetings in the back half of 2022, and to then further slow the pace next year by delivering three quarterly hikes in 2023Q1-Q3. We have left our forecast of the terminal rate unchanged at 3-3.25%, as shown in Exhibit 1.” Please see below: In addition, this doesn’t account for the Fed’s willingness to sell assets on its balance sheet. For context, Powell said on Mar. 16 that quantitative tightening (QT) should occur sometime in the summer and that shrinking the balance sheet “might be the equivalent of another rate increase.” As a result, investors’ lack of preparedness for what should unfold over the next few months has been something to behold. However, the reality check will likely elicit a major shift in sentiment.  In contrast, the bond market heard Powell’s message loud and clear, and with the U.S. 10-Year Treasury yield hitting another 2022 high of ~2.38% on Mar. 22, the entire U.S. yield curve is paying attention. Please see below: Source: Investing.com Finally, the Richmond Fed released its Fifth District Survey of Manufacturing Activity on Mar. 22. With the headline index increasing from 1 in February to 13 in March, the report cited “increases in all three of the component indexes – shipments, volume of new orders, and number of employees.” Moreover, the prices received index increased month-over-month (MoM) in March (the red box below), while future six-month expectations for prices paid and received also increased (the blue box below). As a result, inflation trends are not moving in the Fed’s desired direction. Please see below: Source: Richmond Fed Likewise, the Richmond Fed also released its Fifth District Survey of Service Sector Activity on Mar. 22, nd while the headline index decreased from 13 in February to -3 in March, current and future six-month inflationary pressures/expectations rose MoM. Source: Richmond Fed The bottom line? While the Fed is screaming at the financial markets to tone it down to help calm inflation, investors aren't listening. With higher prices resulting in more hawkish rhetoric and policy, the Fed should keep amplifying its message until investors finally take note. If not, inflation will continue its ascent until demand destruction unfolds and the U.S. slips into a recession. As such, if investors assume that several rate hikes will commence over the next several months with little or no volatility in between, they're likely in for a major surprise. In conclusion, the PMs declined on Mar. 22, as the sentiment seesaw continued. However, as I noted, it's remarkable how much the PMs' domestic fundamental outlooks have deteriorated in recent weeks. Thus, while the Russia-Ukraine conflict keeps them uplifted, for now, the Fed's inflation problem is nowhere near an acceptable level. As a result, when investors finally realize that a much tougher macroeconomic environment confronts them over the next few months, the shift in sentiment will likely culminate in sharp drawdowns. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
(MCO) Crypto.com Price Rises As The Company Is Presented As A Sponsor Of An Important Sport Event

(MCO) Crypto.com Price Rises As The Company Is Presented As A Sponsor Of An Important Sport Event

FXStreet News FXStreet News 23.03.2022 15:52
Crypto.com token set a stable base and rallied 12% to clear a crucial hurdle at $0.41. If CRO manages to stay above this barrier, a retest of $0.45 seems likely. A breakdown of $0.41 could trigger a correction to $0.37 or lower. Crypto.com token has set up pools of liquidity at the range low and high of recent run-up. This technical outlook creates ambiguity with directional bias, but the recent announcement indicates a bullish move is likely. The company’s Twitter account posted that it will be a sponsor of the FIFA World Cup Qatar 2022. A blog post further elaborated that Crypto.com will be the “exclusive cryptocurrency trading company” sponsoring the Qatar 2022 FIFA World Cup. This move from the establishment is not unseen in the crypto industry with FTX partnering with major Major Baseball League, Mercedes, eSports teams and so on. The sponsorship will allow Crypto.com to garner branding exposure from within and outside the tournament’s stadiums. Crypto.com token at make-or-break point Crypto.com token fell nearly 20% between March 2 and 7, setting up a range that extends from $0.45 to $0.37. This downswing set a boundary and CRO bulls respected it and created a double bottom at $0.37, triggering then a recovery rally. So far, the Crypto.com token has managed to flip the 50% retracement level at $0.41 and is at the time of writing hovering above it. A continuation of this bullish momentum could see CRO heading back to the range high and perhaps higher. Interested investors can wait for a retest of the $0.41 barrier to enter a long position and book profits at $0.45. In some cases, the run-up could push the Crypto.com token to $0.47 especially if the buying pressure increases. CRO/USDT 4-hour chart Although things are looking favorable to bulls, a breakdown of the $0.41 support level will trigger a move in the opposite direction. If Crypto.com token produces a four-hour candlestick close below $0.37, it will invalidate the bullish thesis. This development could see Crypto.com token slide lower to retest the stable support level at $0.36.
The US Has Again Benefited From Military Conflicts In Other Parts Of The World, The Capital From Europe And Other Regions Goes To The US

EUR/USD Loses 0.15%, GBP/USD Loses 0.35%, USD/JPY Gains 0.35%! You Hawkish Fed! Dollar Strengthens!

Mikołaj Marcinowski Mikołaj Marcinowski 23.03.2022 20:27
Yesterday we were following forex pairs with dollars. Everybody follows dollar index (DXY) to check market’s reaction to Fed rhetoric which is verbalised by Jerome Powell (Chairman) again. Next rate hikes are highly expected. EUR/USD Chart GBP/USD Chart USD/JPY Chart USD/PLN Chart - exotic pair has gained this time, dollar seems to feel better Source/Data: Investing.com, Goldman Sachs, TradingView.com
What Will Be The Impact Of Rising Rates On Stocks & Commodities?

What Will Be The Impact Of Rising Rates On Stocks & Commodities?

Chris Vermeulen Chris Vermeulen 23.03.2022 21:33
Investors and traders alike are concerned about what investments they should make on behalf of their portfolios and retirement accounts. We, at TheTechnicalTraders.com, continue to monitor stocks and commodities closely due to the Russia-Ukraine War, market volatility, surging inflation, and rising interest rates. Several of our subscribers have asked if changes in monitor policy may lead to a recession as higher rates take a bigger bite out of corporate profits.As technical traders, we look exclusively at the price action to provide specific clues as to the current trend or a potential change in trend. We review our charts for both stocks and commodities to see what we can learn from the most recent price action. Before we dive into that, let’s review the various stages of the market; with special attention given to expansion vs. contraction in a rising interest rate environment which you can see illustrated below.PAY ATTENTION TO YOUR STOCK PORTFOLIOWe are keeping an especially close eye on the price action of the SPY ETF. The current resistance for the SPY is the 475 top that happened around January 6, 2022. This top was 212.5% of the March 23, 2020, low that was put in at the height of the Covid global pandemic.The SPY found support in the 410 area at the end of February. If you recall (or didn't know), 410 was the Fibonacci 1.618 or 161.8% percent of the Covid 2020 price drop. Now, after experiencing a nice rally back, of a little over 50%, we are waiting to see if the rally can continue or if rotation will occur, sending the price back lower.COMMODITY MARKETS SURGEDThe commodity markets experienced a tremendous rally due to fast-rising inflation, especially energy, metals, and food prices.The GSG ETF price action shows that we recently touched 200%, or the doubling of the April 21, 2020, low. Immediately following, similar to the SPY, the GSCI commodity index promptly sold off only to then find substantial buying support at the Fibonacci 1.618 or 161.8 percent of the starting low price of the bull trend. Resistance for the GSG is at 26, and support is 21.A STRENGTHENING US DOLLARThe strengthening US dollar can be attributed to investors seeking a safe haven from geopolitical events, surging inflation, and the Fed beginning to raise rates. The US Dollar is still considered the primary reserve currency as the greatest portion of forex reserves held by central banks are in dollars. Furthermore, most commodities, including gold and crude oil, are also denominated in dollars.Consider the following statement from the Bank of International Settlements www.bis.org ‘Triennial Central Bank Survey’ published September 16, 2019: “The US dollar retained its dominant currency status, being on one side of 88% of all trades.” The report also highlighted, “Trading in FX markets reached $6.6 trillion per day in April 2019, up from $5.1 trillion three years earlier.” That’s a lot of dollars traded globally and confirms that we need to stay current on the dollars price action.Multinational companies are especially keeping a close eye on the dollar as any major shift in global money flows will seriously negatively impact their net profit and subsequent share value.The following chart by www.finviz.com provides us with a current snapshot of the relative performance of the US dollar vs. major global currencies over the past year:KNOWLEDGE, WISDOM, AND APPLICATION ARE NEEDEDIt is important to understand that we are not saying the market has topped and is headed lower. This article is to shed light on some interesting analyses of which you should be aware. As technical traders, we follow price only, and when a new trend has been confirmed, we will change our positions accordingly. We provide our ETF trades to our subscribers, and somewhat surprisingly, we entered five new trades earlier this week, two of which have now hit their first profit target levels. Our models continually track price action in a multitude of markets, asset classes, and global money flow. As our models generate new information about trends or a change in trends, we will communicate these signals expeditiously to our subscribers and to those on our trading newsletter email list.Sign up for my free trading newsletter so you don’t miss the next opportunity! WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS? Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens.We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Fed Expectations Amid Mixed Data: Wishful Thinking or Practical Pause?

Natural Gas Price Rises As Triggered By Putin’s Rhetoric That He Will ‘Demand Rouble Gas Payments’

Mikołaj Marcinowski Mikołaj Marcinowski 24.03.2022 12:47
According to Investing.com Russia could require gas payment in roubles what clearly affects both Forex pairs (e.g. EUR/RUB) and natural gas price (TTF) which has increased by 31%. What’s more MOEX is back to the game after such a long break. Some companies have gained significantly already and many would like to know what’s ahead. Generally speaking Russian currency and Russia-associated markets are really volatile at the moment and there are many assets to watch in the following days. Let’s begin with natural gas price. Obviously monthly chart (yes, it’s been one month since the warfare started) shows the fluctuations caused by the start of invasion which took place on February 24th We may say that the true rise came few days later, as negotiations of cease-fire haven’t changed a thing and sanctions have begun to impact the markets. Further developments containing some signals of a ceasefire appeared not to coincide with the reality heading price of natural gas to a next rise. Natural Gas Price Chat (TTF) – monthly 24/02-23/03 - +31% Natural Gas Price Chart (TTF) Daily 22-23/03/22 +18.5% Russian Roubel (RUB) – Forex Charts +11% Monthly chart shows a huge decline and strengthening of RUB. EUR/RUB Chart - Monthly +6% EUR/RUB Chart - Daily (24h) Source/Data: Investing.com, TradingView.com Charts: Courtesy of TradingView.com  
US Close – A brutal week on Wall Street ends on a positive note, Fed reiterates commitment to restoring price stability, Oil plummets on outlook, Gold lower on strong USD, Bitcoin’s danger zone

Crypto Express - Smooth Love Potion (SLP) Price, PanCake Swap (CAKE) And Dogecoin (DOGE) Price Charts

Mikołaj Marcinowski Mikołaj Marcinowski 24.03.2022 14:08
PanCake Swap shows a good performance ending the previous day with a sharp rise and keeping the uptrend. Smooth Love Potion was really, really high but has decreased losing almost all 10% gain. Doge (DOGE) Price doesn’t look like the recent optimistic Elon Musk’s dance as memecoin trades below 0. PanCake Swap (CAKE) Price (CAKEUSD) – 24h Chart Smooth Love Potion (SLP) Price (SLPUSD) – 24 Chart Doge Price (DOGEUSD) – 24 Chart Source/Data: TradingView.com Charts: Courtesy of TradingView.com
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Cryptos on the front foot as rebound turns into new uptrend

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Cryptos on the front foot as rebound turns into new uptrend

FXStreet News FXStreet News 24.03.2022 16:22
Bitcoin price set to touch $45,000 by tomorrow if current tailwinds keep supporting price action. Ethereum price set to rally another 12%, with bulls targeting $3,500.00XRP price undergoes consolidation as the next profit level is $0.90.Bitcoin price, Ethereum and other cryptocurrencies are enjoying a calm week with tailwinds finally able to thrive without constant interruption from headlines about Ukraine or Russia. Markets are also starting to adjust to the situation, with no immediate or significant movements anymore triggered by headlines coming out. Expect to see more upside with several possible cryptocurrencies eking out the best week of the year thus far.Bitcoin price has a defined game plan with $44,088 as the target for today and $45,261 by the weekendBitcoin (BTC) price is on the front foot for a third consecutive day as the rally turns into a broader uptrend. The crucial thing will be to see where BTC price will close this week, as bears need to get weakened with several short squeezes and breakouts running stops from short-sellers. Despite being elevated, the Relative Strength Index (RSI) is still not near the 'overbought' level, providing enough incentive for bulls and investors to keep buying BTC price action.BTC price is set to hit $44,088.73 today, the level of the March 03 highs. If that is gained – and given the current tailwinds – markets will start to expect Bitcoin to eke out new highs for the month with still a week to go. This additional bullish element should help conclude a daily close above $44,088.73. A support test on that same level will trigger new inflows from investors and provide the needed juice to pump price action up to $45,261.84, topping $45,000.00.BTC/USD daily chartA tail risk comes from the big joint meeting today in Brussels, with Biden meeting NATO, the G7 and E.U. leaders. An embargo on gas is on the table and could roil markets if the E.U. decides to walk away from Russian gas supplies, opening up the possibility of further Russian retaliation in Ukraine. That would make global markets move back to risk-off mode, with Bitcoin price dropping back to support at $39,780.68, and intersecting with the green ascending trend line. Ethereum price targets $3,500 after bulls force a daily close above $3,018.55Ethereum (ETH) price is performing a 'classic long' trading plan today after bulls pushed a daily close above $3,018.55. With price action in ETH opening slightly above this level, this morning, the price has faded slightly back towards that same $3,018.55 level to find support and offer the opportunity for new bulls and investors to enter the market. Ethereum price will move back to the upside and continue its rally, which is currently looking more and more like an uptrend that could continue over a broader time frame.ETH price will therefore need to find support around $3,018.55 as the fade will need to be kept in check, as too large a fade could spook investors. Seeing as the current favourable tailwinds are quite broadly present in global markets, expect to see another uplift towards $3,200 and $3,391.52 depending on the number of new positive headlines acting as additional accelerators. With those moves, at least new highs for March will be printed and possibly for February, depending on how steep the rally can continue.ETH/USD daily chartThe risk for Ethereum price is that price action slips back below $3,018.55. That could open the door for bears to jump in again and run price action back to $2,835.83, which is the low of March 21 and the monthly pivot. An additional fail-safe system is the 55-day Simple Moving Average at $2,808.84 as an additional supportive factor to take into account.https://youtu.be/wgpCSH70SIQXRP price undergoes consolidation as the bullish breakout hits $0.90Ripple's (XRP) price has bears and bulls being pushed towards each other as the bodies of the candles from the past two sessions grow very thin. This points to bulls and bears fighting it out and neither yet having the upper hand. Bears are defending the area above $0.8390 from bulls running to $0.8791, and bulls are trying to defend their support at $0.7843. With lower highs and higher lows, the stage is set for a breakout that, seeing the current tailwinds, will probably favour bulls, and result in a quick move towards $0.8791.XRP price is thus set to print new highs for March. With the stock markets having their best performing week for this year, expect to see even more tailwinds spilling over to cryptocurrencies and bulls targeting $0.9110. At that level, bulls will run into the 200-day SMA which will possibly be the halting point of the current uptrend as investors will need to reassess the situation before they advance. Where global markets are at that point and how far off a peace treaty is between Russia and Ukraine will determine if bulls will advance towards $1.00 in XRP price.XRP/USD daily chartAlthough several statements suggest it is unlikely, should Putin be backed further into a corner, the use of nuclear weapons could cast a dark shadow on markets. Expect a massive drop in equities and cryptocurrencies with those headlines coming out, where XRP price will fall towards $0.7843 or even $0.7600. In the first case, the historic pivotal level will provide support and further down, the monthly pivot is set to intertwine with the 55-day SMA, which should be enough to catch any falling-knife action. https://youtu.be/ZWrKMd2CiL8
Russia's Active Production Cuts Could Be Grounds For A Bullish Shock

Oil Has Increased By 20%! How Have Crude Oil Price Fluctuated Since The Beginning Of The Russia-Ukraine War? It’s Over $112 Now…

Mikołaj Marcinowski Mikołaj Marcinowski 24.03.2022 15:45
While everybody was wondering about the end of the COVID-19 pandemy and Russia invaded Ukraine what started affecting the markets. Obviously natural gas and crude oil price are volatile recently. EU leaders accompanied by Joe Biden discuss outlooks and most probably next sanctions. As we wrote in the report about natural gas price the rise started to confuse the world few days after the invasion. It seems that all sanctions and fail of ceasefire negotiations made the crude oil price rise gain momentum. In the middle of March prices got back to the levels of the beginning of the month, but aggressive rhetoric of Russia made BRENT and WTI trading higher again. Let’s have a look at the Crude Oil Price monthly chart (courtesy of TradingView.com) 5-days chart (courtesy of TradingView.com) of Crude Oil Price shows a significant rise in recent days Data/Source: TradingView.com Charts: Courtesy of TradingView.com
Crude Oil Holds Its Breath Ahead of World Summits

Crude Oil Holds Its Breath Ahead of World Summits

Finance Press Release Finance Press Release 24.03.2022 16:46
Current levels of oil and petroleum products are high. Given that, what can explain such a surprising drop in US crude inventories?Energy Market UpdatesCommercial crude oil reserves in the United States fell much more than expected in the week ended March 18, according to figures released on Wednesday by the US Energy Information Administration (EIA).US crude inventories have shrunk by more than 2.5 million barrels, which implies greater demand and is obviously another bullish factor for crude oil prices. Such a decline in inventories is particularly remarkable as the American strategic reserves have also recorded a significant drop. This is the 25th consecutive week of falling strategic reserves since the Biden administration started to make those adjustments in an attempt to relieve the market.(Source: Investing.com)WTI Crude Oil (CLK22) Futures (May contract, daily chart)Furthermore, some additional figures extracted from the same EIA report were released and surprised the markets.These are US Gasoline Reserves, which plunged by about 2.95 million barrels over a week, while the market was not even forecasting a two-million decline.(Source: Investing.com)Thus, US exports jumped by more than 30% compared to the previous week, not only due to large flows to Europe to replace Russian barrels, but also marked by a significant rebound in Asian demand.RBOB Gasoline (RBJ22) Futures (April contract, daily chart)Beware that a NATO summit, a G7 summit, and a European Union summit are being held on Thursday, when the various countries could set a new round of sanctions against Moscow.So, how will black gold progress from now on? Do you think that the on-going negotiations with Iran and Venezuela could flood the market with additional barrels? Let us know in the comments!That’s all folks for today. Happy trading!Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Sebastien BischeriOil & Gas Trading Strategist* * * * *The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Is There Any Gold in Virtual Worlds Like Metaverse?

Is There Any Gold in Virtual Worlds Like Metaverse?

Finance Press Release Finance Press Release 25.03.2022 12:15
Imagine all the people… living life in the Metaverse. Once we immerse ourselves in the digital sphere, gold may go out of fashion. Or maybe not?Do you already have your avatar? If not, maybe you should consider creating one, as the Metaverse is coming! What is the Metaverse? It is a digital, three-dimensional world where people are represented by avatars, a network of 3D virtual worlds focused on social connection, the next evolution of the internet, “extended reality,” and the latest buzzword in the marketplace since Facebook changed its name to Meta. If you still have no idea what I’m talking about, you can watch this or just Spielberg’s Ready Player One.The idea of personalities being uploaded online is an intriguing concept, isn’t it? In this vision, people meet with others, play, and simply hang out in a digital world. Imagine friends turning group chats on Messenger or WhatsApp into group meetups in the Metaverse of family gatherings in virtual homes. Ultimately, people will probably be doing pretty much everything there, except eating, sleeping, and using the restroom.Sounds scary? For people in their 30s and older who were fascinated by The Matrix, it does. However, this is really happening. The augmented reality technology market is expected to grow from $47 billion in 2019 to $1.5 trillion in 2030, mainly thanks to the development of the Metaverse. China’s virtual goods and services market is expected to be worth almost $250 billion this year and $370 billion in the next four years.In a sense, it had to happen as the next phase of the digital revolution. You see, we now experience much of life on the two-dimensional screens of our laptops and smartphones. The Metaverse moves us from a flat and boring 2D to a 3D virtual universe, where we can visualize and experience things with a more natural user interface. Let’s take shopping as an example. Instead of purchasing items on Amazon, customers could enter a virtual shop, see and touch all products in 3D, and buy whatever they wanted (actually, Walmart launched its own 3D shopping experience in 2018).OK, we get the idea, but why does Metaverse matter, putting aside sociological or philosophical issues related to transferring our minds into the digital world? Well, it might strongly affect every aspect of business and life, just as the internet did earlier. Here are a couple of examples. Famous brands, like Dolce & Gabbana, are designing clothes and jewelry for the digital world. Some artists are giving concerts in virtual reality. You could also visit some museums virtually, and instead of taking a business trip, you can digitally teleport to remote locations to meet with your co-workers’ avatars.Finally, what does the Metaverse imply for the gold market? Well, it’s difficult to grasp all the possible implications right now. However, the main threat is clear: as people immerse deeper and deeper into the digital world, gold could become obsolete for many users. Please note that cryptocurrencies and non-fungible tokens (NFTs) are and will continue to be widely used as payment methods in the Metaverse.However, there are some caveats here. First, the invention and spread of the internet didn’t sink gold. Actually, the internet enabled gold to be widely traded by investors all over the world. Just take a look at the chart below. Although gold was in a bear market in the 1990s and struggled during the dot-com bubble, it rallied after the bubble burst.Second, the digital world didn’t kill the analog reality. Despite digital streaming of music, vinyl record sales soared last year, reaching a record high in a few decades. The development of the Metaverse could trigger a similar backlash and a return to tangible goods like gold.Third, some segments of the Metaverse look like bubbles. Maybe I’m just too old, but why the heck would anybody spend hundreds of thousands, or even millions of dollars to buy items in the virtual world? These items include virtual real estates (CNBC says that sales of real estate in the metaverse topped $500 million last year and could double this year), digital pieces of art or even tweets (yup, the founder of Twitter sold the first tweet ever for just under $3 million)! It does not make any sense to me, as I can right-click and download a copy of the same digital files (like a PNG file of a grey pet rock) for which people pay thousands and millions of dollars.Of course, certain items could increase the utility of the game or virtual experience, but my bet is that at least some buyers simply speculate on prices, expecting that they will be able to resell these items to greater fools. When this digital gold rush ends – and given the Fed’s tightening cycle, it may happen in the not-so-distant future – real gold could laugh last.Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care.
Operation in Ukraine leads to German Business climate collapse

Operation in Ukraine leads to German Business climate collapse

Alex Kuptsikevich Alex Kuptsikevich 25.03.2022 12:20
According to fresh Ifo estimates, business sentiment in Germany fell in March to its lowest level since January 2021. The business climate index fell from 98.5 to 90.8 following a collapse in business expectations amid war in Ukraine and the associated surge in energy and several other commodity prices.The drop in economic expectations was comparable to what we saw exactly two years ago at the start of the pandemic. New sentiment data may prove to be the first indication of the depth of the economic losses in the next quarter or two from ongoing events. They could wipe out as much as 1% of GDP in the outgoing quarter and another 2% in the next.However, the current scenario is already priced in the financial markets. The Eurozone stock indices, which often outperform the economic cycle, are now more than 15% above their lows of March 7th. The same can be said for the euro, which is firmly based around USD 1.10, which has been stable for the last three months against the pound and strengthened by more than 8% against the Japanese yen.
Tilray Stock Forecast: TLRY zooms 18% higher on US legislation hopes

Tilray Stock Forecast: TLRY zooms 18% higher on US legislation hopes

FXStreet News FXStreet News 26.03.2022 05:15
Tilray stock rose 21.8% on ThursdayHigh level of call contracts expire this Friday.US lower house will take up decriminalization legislation next week.Canadian cannabis powerhouse Tilray Brands (TLRY) is reaping the benefits of the US House of Representatives adding major legislation important to the industry to the calendar for next week. Tilray stock is up more than 18% at Friday's open to a momentary high of $8.35. In just a week the company has doubled its market cap, and other competitors like Sundial Growers (SNDL), Canopy Growth Corporation (CGC), Aurora Cannabis (ACB) also benefitting from the optimism.Tilray Brands Stock News: MORE Act has cannabis stocks rallyingThe Marijuana Opportunity Reinvestment & Expungement Act, or MORE Act, will receive focus from the House and taken up for discussion next week. This law would decriminalize cannabis at the federal level, which may allow cannabis companies to begin utilizing better financing through regular old banks. As of now, most banks will not work with cannabis growers, which forces them to seek out a much higher cost of capital. The law would also erase past federal criminal offenses involving the sale of cannabis. This would be a major step toward broader decriminalization of recreational use that more states may follow, which would eventually open up new markets and customers to existing licensed growers.Tilray call options are soaring in value on Friday morning, even those that expire at the end of the session. The $8 strike contract has soared more than 82% to $0.42, and at the time of writing 8,730 contracts have traded already. This is about 25% above open interest. Sundial Growers stock is up nearly 12%, and Cresco Labs has advanced more than 5%.Tilray announced earlier this month that it had acquired $211 million in convertible notes from Hexo, another major competitor in Canadian cannabis. If exercised, Tilray would own about 37% of Hexo. This is yet another move by Tilray to grow its global footprint. The corporation already has access to the Canadian, US and European markets. The current management strategy is to raise revenue, now at $600 million annually, to $4 billion by 2024. Tilray seems to be trying to achieve this mostly through acquisitions. The stock is down 65% over the past year, partly because Tilray has diluted its shareholders by more than 50% in order to pay for some of these acquisitions.Tilray Brands Forecast: Breaking through one year of resistanceOn Thursday Tilray stock resolutely broke through top line resistance that has been working on the daily chart for about one year. The descending top line has been in play since about March 17, 2021, and connects to highs on June 9, 2021, and November 14, 2021. By closing up nearly 22% on Thursday, TLRY broke that trend line with force. Resistance at $7.30 has now turned into support, with Friday's intraday high of $8.35. Although TLRY is selling off to $7.55 in mid-session, bulls will see regaining this $8.35 high as a significant goal. From there, the resistance target rises to $9.94 – the high from December 8, 2021.TLRY 1-day chart
Crypto trading volume exceeds $100 billion in 24 hours as bulls flock to the market

Crypto trading volume exceeds $100 billion in 24 hours as bulls flock to the market

FXStreet News FXStreet News 28.03.2022 16:34
Proponents noted a 63.07% spike in the total transaction volume of cryptocurrencies across exchanges. Coinmarketcap data reveals a month-on-month increase of 4.75% in crypto trading volume. Bitcoin price crossed $47,000, fueled by $200 million shorts liquidated across exchanges. Bitcoin price is rallying, fueled by a frenzy of massive short liquidations on crypto exchanges. Proponents believe bulls have flocked to the market, as transaction volume exceeded $100 billion. Bitcoin price pushes past $47,000 in recent rally Bitcoin price crossed key resistance to hit a high above $47,000 in a rally fueled by the liquidation of millions of short positions. Analysts at the crypto intelligence platform Santiment observed a massive liquidation of shorts across exchanges at 1 pm and 6 pm UTC across crypto exchanges on March 27, 2022. Analysts argue that Bitcoin’s recent price rally to $47,000 was a response to liquidation in large quantities over the weekend. The average funding rate entered the long zone, where uncertainty among market participants increased. Therefore, analysts conclude that Bitcoin shorts have fueled the asset’s ongoing rally. Bitcoin and altcoin shorts liquidatedColin Wu, a Chinese journalist, reported a spike in the total transaction volume of cryptocurrencies, exceeding $100 billion over the past 24 hours. Wu referred to data from Coinmarketcap and observed a 63.07% increase in crypto transaction volume compared to March 26, 2022. The total crypto market value now exceeds $2.12 trillion. Historically, analysts have witnessed high transaction activity when large wallet investors flock to the market or scoop up crypto. Bloomberg analysts argue that Bitcoin looks overbought, compared to its 50-day Moving Average. Bitcoin price crossed key resistance at $45,000 in the current rally, erasing its losses for the year. FXStreet analysts have evaluated Bitcoin price and predicted the start of a new uptrend in the asset, as it crossed the $45,000 level.
Tesla Stock News and Forecast: Shareholders to vote on TSLA stock split

Tesla Stock News and Forecast: Shareholders to vote on TSLA stock split

FXStreet News FXStreet News 28.03.2022 16:34
Tesla stock surges on news of a potential stock split dividend.TSLA is up at $1,066 of +5.6% in Monday premarket trading.Tesla stock has rallied sharply from early March lows.Tesla stock (TSLA) is back to the top of the social media chatter on Monday, usurping GameStop and AMC in the process. The stock is surging this morning on news of a potential stock split dividend. Tesla previously did a 5-for-1 stock split back in August 2020, and other companies have followed suit, notably Amazon. This makes it easier for retail investors to own the stock when it has a more affordable share price.Tesla Stock News: Stock split imminent?Tesla's board of directors has already approved the plan to split the shares for a stock dividend and will put it to a vote of the shareholders. The news was well-received by retail shareholders who tend to be more active in the premarket than other holders. A stock dividend is exactly what it sounds like. Instead of receiving cash, shareholders receive new shares in the company. This means companies do not use up cash to fund the dividend. Stock dividends are usually dilutive to earnings per share (EPS) as more shares are in issue after the event. Tesla is up nearly 6% before the open. It is not all plain sailing though for the EV giant as more Chinese covid lockdowns are announced. Tesla will close its Shanghai giga plant for at least a day on the back of lockdowns in the city. Tesla Stock ForecastA powerful rally with the next target now set at $1,210. This would set up Tesla's (TSLA) stock to break to all-time highs. Currently, on the longer-term time horizon, the narrative is still bearish with a series of lower highs and lower lows. So breaking $1,210 turns Tesla bullish on all time horizons. Naturally, it is already bullish in the short term after last week's strong rally. Holding above $945 is the key pivot for medium and long-term traders. TSLA 20-hour chartThere is a short-term pivot at $1,000, with high volume at this level. Below sees a volume gap to $945, the key as mentioned above. Tesla chart, 15-minute
Who Benefits Most From the Russia-Ukraine War?

Who Benefits Most From the Russia-Ukraine War?

Finance Press Release Finance Press Release 28.03.2022 17:25
With the unrest in the Black Sea basin, it appears that there are two more cross-trade wars in the world. These are about energy and currency.Crude oil prices, down most of Friday, finally ended the week higher after a huge fire broke out at oil facilities in Jeddah, Saudi Arabia, following attacks by Yemeni rebels.The great winner of the Russian-Ukrainian conflict is undoubtedly the United States, which now seems to be taking advantage of Europe’s moment of weakness.The latter is indeed currently switching its energy supplies from Russian natural gas (pipeline-transported) to the much more polluting and much more expensive US shale gas. The reasons are much higher extraction (fracking) and transportation costs since it requires additional processes such as liquefaction/degasification and the deployment of more port terminals that are able to provide such steps – also much more energy-consuming – linked to Liquefied Natural Gas (LNG) supplies.(Source: ResearchGate.net)By doing so, the European Union is going to increase its dependence on the US whilst a new and stronger block (including Asia) emerges on the east side.As a result, we have already started to witness dedollarisation in international trade, with the petroyuan set to dethrone the heavily-printed petrodollar.No wonder that the US dollar supply surge has ended up triggering uncontrollable and probably still underestimated inflation. As a result, this monetary virus is spreading through the global economy at a faster pace than any other variant! WTI Crude Oil (CLK22) Futures (May contract, daily chart) Henry Hub Natural Gas (NGK22) Futures (May contract, daily chart)“Inflation is like toothpaste. Once it's out, you can hardly get it back in again. So, the best thing is not to squeeze too hard on the tube.” – Dr Karl Otto PöhlThat’s all folks for today. Happy trading!Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Sebastien BischeriOil & Gas Trading Strategist* * * * *The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Volatility Retreats As Stocks & Commodities Rally

Volatility Retreats As Stocks & Commodities Rally

Chris Vermeulen Chris Vermeulen 28.03.2022 21:32
The CBOE Volatility Index (VIX) is a real-time index. It is derived from the prices of SPX index options with near-term expiration dates that are utilized to generate a 30-day forward projection of volatility. The VIX allows us to gauge market sentiment or the degree of fear among market participants. As the Volatility Index VIX goes up, fear increases, and as it goes down, fear dissipates.Commodities and equities are both showing renewed strength on the heels of global interest rate increases. Inflation shows no sign of abating as energy, metals, food products, and housing continues their upward bias.During the last 18-months, the VIX has been trading between its upper resistance of 36.00 and its lower support of 16.00. As the Volatility Index VIX falls, fear subsides, and money flows back into stocks.VIX – VOLATILITY S&P 500 INDEX – CBOE – DAILY CHARTSPY RALLIES +10%The SPY has enjoyed a sharp rally back up after touching its Fibonacci 1.618% support based on its 2020 Covid price drop. Money has been flowing back into stocks as investors seem to be adapting to the current geopolitical environment and the change in global central bank lending rate policy.Resistance on the SPY is the early January high near 475, while support remains solidly in place at 414. March marks the 2nd anniversary of the 2020 Covid low that SPY made at 218.26 on March 23, 2020.SPY – SPDR S&P 500 ETF TRUST - ARCA – DAILY CHARTBERKSHIRE HATHAWAY RECORD-HIGH $538,949!Berkshire Hathaway is up +20.01% year to date compared to the S&P 500 -4.68%. Berkshire’s Warren Buffet has also been on a shopping spree, and investors seem to be comforted that he is buying stocks again. Buffet reached a deal to buy insurer Alleghany (y) for $11.6 billion and purchased nearly a 15% stake in Occidental Petroleum (OXY), worth $8 billion.These acquisitions seem to be well-timed as insurers and banks tend to benefit from rising interest rates, and Occidental generates the bulk of its cash flow from the production of crude oil.As technical traders, we look exclusively at the price action to provide specific clues as to the current trend or a potential change in trend. With that said, Berkshire is a classic example of not fighting the market. As Berkshire continues to make new highs, its’ trend is up!BRK.A – BERKSHIRE HATHAWAY INC. - NYSE – DAILY CHARTCOMMODITY DEMAND REMAINS STRONGInflation continues to run at 40-year highs, and it appears that it will take more than one FED rate hike to subdue prices. Since price is King, we definitely want to ride this trend and not fight it. It is always nice to buy on a pullback, but the energy markets at this point appear to be rising exponentially. The XOP ETF gave us some nice buying opportunities earlier at the Fibonacci 0.618% $71.78 and the 0.93% $93.13 of the COVID 2020 range high-low.Remember, the trend is your friend, as many a trader has gone broke trying to pick or sell a top before its time! Well-established uptrends like the XOP are perfect examples of how utilizing a trailing stop can keep a trader from getting out of the market too soon but still offer protection in case of a sudden trend reversal.XOP – SPDR S&P OIL & GAS EXPLORE & PRODUCT – ARCA – DAILY CHARTKNOWLEDGE, WISDOM, AND APPLICATION ARE NEEDEDIt is important to understand that we are not saying the market has topped and is headed lower. This article is to shed light on some interesting analyses of which you should be aware. As technical traders, we follow price only, and when a new trend has been confirmed, we will change our positions accordingly. We provide our ETF trades to our subscribers, and somewhat surprisingly, we entered five new trades last week, four of which have now hit their first profit target levels. Our models continually track price action in a multitude of markets, asset classes, and global money flow. As our models generate new information about trends or a change in trends, we will communicate these signals expeditiously to our subscribers and to those on our trading newsletter email list.Sign up for my free trading newsletter so you don’t miss the next opportunity! Furthermore, successfully trading is not limited to when to buy or sell stocks or commodities. Money and risk management play a critical role in becoming a consistently profitable trader. Correct position sizing utilizing stop-loss orders helps preserve your investment capital and allows traders to manage their portfolios according to their desired risk parameters. Additionally, scaling out of positions by taking profits and moving stop-loss orders to breakeven can complement ones’ success.WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS? Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens.We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

Intraday Market Analysis – JPY Struggles For Bids

Jing Ren Jing Ren 29.03.2022 08:40
USDJPY seeks support The Japanese yen recouped some losses after a drop in February’s unemployment rate. The pair surged to August 2015’s high and the psychological level of 125.00. An overwhelmingly overbought RSI may cause a pullback if short-term buyers start to unwind their bets. As the market mood stays upbeat, trend followers could be waiting to jump in at a discount. 122.20 is the closest level if the greenback needs to gather support. A break above the current resistance would propel the pair to new highs above 127.00. AUDUSD hits major resistance The Australian dollar stalls as caution prevails ahead of major economic data. The rally slowed down at last October’s peak at 0.7550. A combination of profit-taking and fresh selling weighs on the Aussie. The bulls may see a pullback as an opportunity to accumulate in hope of a new round of rally. 0.7400 from the latest bullish breakout would be key support should this happen. On the upside, an extended rally could propel the pair to last June’s highs around 0.7770 and pave the way for a reversal in the medium-term. US 100 to test major resistance Growth stocks rose amid a sell-off in the bond market. Short-term sentiment remains bullish after a series of higher lows which indicates sustained buying interest. The Nasdaq 100 is heading to the daily resistance at 15050. A bearish RSI divergence suggests a deceleration in the rally, foreshadowing a potential retracement. 14600 is the support and its breach may trigger a sell-off towards 14200 which sits at the base of the recent breakout. A close above the said hurdle may put the index back on track in the weeks to come.
Bitcoin has become a leading indicator of investor sentiment

Bitcoin has become a leading indicator of investor sentiment

Alex Kuptsikevich Alex Kuptsikevich 29.03.2022 08:51
BTC is up 4% on Monday, ending the day around $48K, and corrected by about 1% to $47.5K on Tuesday morning. Ethereum was up 1.8% in the last 24 hours to $3.4K. Terra is a leader of the day According to CoinMarketCap, the total capitalization of the crypto market increased by 1% over the day, to $2.15 trillion. The Bitcoin dominance index fell by 0.1 points to 42.1%. The crypto-currency index of fear and greed rose by 11 points over the day, to 60, and moved from neutral level to the "greed" grade. On Tuesday, the index dropped to 56 points. Among the leading altcoins, Terra soared by 10%, Doge corrected by 2%. In most others, there is a slight correction in the growth of the last days, but they are in positive territory over the last day. Bitcoin continued to rise on Monday after it broke through the strong resistance of the February highs around $45K in the previous evening. By the end of the day, BTC has renewed the highs of early January above $48K, having won back the decline since the beginning of the year. Bitcoin is correlating with S&P500 The growth of the first cryptocurrency rested on the 200-day moving average ($48.2K). Confident consolidation above it promises to strengthen and expand the growth of the entire crypto market and breathe fresh impetus into the growth of bitcoin. In December, we saw a false break, but then the price levels were higher, and corrective sentiment intensified in the stock markets. Now Bitcoin is growing along with the rise of stock indices and often even acts as a leading indicator of investor sentiment. According to Arcane Research, BTC's correlation with the S&P 500 stock indicator recently hit a 17-month high. According to CoinShares, institutions invested $193 million in crypto funds last week, and it was the most significant amount in three months. Glassnode believes that the Bitcoin trend has already changed to bullish, as evidenced by the increase in the number of addresses accumulating BTC.
US ADP Employment March Preview: Private job creation slows while yield curve flattens

US ADP Employment March Preview: Private job creation slows while yield curve flattens

FXStreet News FXStreet News 29.03.2022 16:43
US ADP payrolls are foreseen at 438K in March, NFP at 475K.US yield curve is flattening, rings recession alarm amid 50-bps May Fed rate hike bets.Fed Chair Powell believes the labor market is strong enough, recession unlikely.The US private sector hiring is seen slowing in March after the American companies added more jobs than expected in February. The US ADP private employment report, due on Wednesday at 12.15 GMT, usually provides a good hint at Friday’s full jobs report, so investors will be looking for clues on any potential labor market slowdown.Pace of jobs creation slows in the USThe Automatic Data Processing (ADP) is forecast to show that US companies have created 438,00 new jobs in March, less than the previous month’s addition of 475,000. In February, business payrolls rose more than the expected 375,000 figure. ADP’s payroll data represent firms employing nearly 26 million workers in the US and its monthly release shows the employment change in the economy.Source: FXStreetOn Friday, the US Labor Department will release the Nonfarm Payrolls, which is expected to show that the economy has likely added 475,000 new jobs in March after a surprise increase of 678,000 reported in February.The Automatic Data Processing ADP jobs report is usually considered a proxy to the official Nonfarm Payrolls figures, which will be released on Friday, April 1.The disparity between the two indicators in recent months, however, makes the ADP result unreliable to gauge the NFP trend and, therefore, could have a limited market impact.US yield curve flattens, Fed remains hawkishHeading into the monthly payrolls data, the Russia-Ukraine conflict rages on while the odds of a 50-basis points (bps) Fed rate hike in May almost appears a done deal.Against this backdrop, the yields on the US Treasuries have rallied to three-year highs, although the increase in the longer-dated yields has failed to match the pace of the advance in the shorter ones. The spread between the two- and 10-year yields narrowed to its lowest since early 2020 on Tuesday. The flattening of the yield curve is usually indicative of a likely recession, as investors remain worried that the aggressive Fed’s tightening would damage the US economy over the longer term.At the March FOMC meeting, Fed Chair Jerome Powell said that the labor market is strong enough that a recession is unlikely. Although Powell remains optimistic about the economy and labor market, he said in his speech last week, “this is a labor market that is out of balance," adding "we need the labor market to be sustainably tight."To concludeMarkets are pricing in a roughly 60% chance of a 50-bps rate hike at the Fed’s May meeting.A slowdown in the hiring pace in the world’s biggest economy could likely feed the risks of a recession, especially in the face of soaring inflation. This could pour cold water on the recent Fed’s hawkishness.The ADP report, however, is unlikely to have any major impact on the US dollar and other related markets. Friday’s NFP release will hold the key to gauging the Fed’s policy action going forward.
The Bitcoin Market Is Now Developing The Corrective Cycle To The Downside

Bitcoin (BTC) Price Charts - Daily, Monthly, BTC/GOLD - 29/03/22

Korbinian Koller Korbinian Koller 29.03.2022 11:35
Bitcoin wins the race   While Russia accepts hard currencies like gold, a move like this shows that the efficient attributes of bitcoin come to the forefront in times of crisis and are accepted for large business transactions between nations. Bitcoin, daily chart, price breakout: Bitcoin in USD, daily chart as of March 29th, 2022. Shortly after, president Putin confirmed this new way of doing business. In addition, China and Russia agreed to a thirty-year contract in the gas sector, transacted in Euros. We can see that we find ourselves in times of currency warfare and that it is essential to pay close attention to where and in what form we store our values. The daily chart above reflects this recent news in a price advance of bitcoin from US$37,567 to US$47,701. A 28% advance in just two weeks. Bitcoin broke through the sideways range, and this week shall show whether this breakout will be a successful one or not. In this case, the bulls have their odds much in favor over the bears.     Bitcoin, weekly chart, price left the station: Bitcoin in USD, weekly chart as of March 29th, 2022. We have now left the entry zone (green box) compared to last week’s chart book and the published weekly chart. While the crowd now chases a trade, struggling with the typical inefficiencies of volatility breakouts (bad fills, slippage, being late), we are established in our positioning with the sum of 9 accumulated runners. The runners being the last 25% of each initial position. A fully de-risked or more precisely no-risk venture (see quad exit)! Looking at the weekly chart, we find the resistance distribution zones at around US$49,650 and US$52,430. We place additional entries if the price returns to the entry box top. Bitcoin, monthly chart, if March closes strong: Bitcoin in USD, monthly chart as of March 28th, 2022. The price has entered the confirmed buy zone from a monthly perspective. The dual chart shows the progression from last week’s anticipation to this week’s chart book release. Should prices within this week stay within the green box, all-time frames are in alignment. A picture of a confirmed bullish bitcoin trend. It is a rare occurrence and confirmation for larger time frame traders and a call to look for low-risk entries, if no sufficient exposure is at play yet. Bitcoin/Gold-Ratio, daily chart, Bitcoin wins the race: Bitcoin/Gold-Ratio, daily chart as of March 28th, 2022. Another split-screen view of a chart (a daily chart of the bitcoin/gold ratio) shows the progression of last week’s chart book publication and the situation right now. We had a triangle breakout last week and a substantial advance since then. The suggested rotation out of gold and into bitcoin was/is a successful one. The overall move was 30% in just two weeks. One can use this relationship as well to indicate bitcoins’ recent gain in strength and direction. Bitcoin wins the race: Change is never accepted lightly. We typically resist change and prefer an existing state of affairs as human beings. Nevertheless, we find ourselves in less than average circumstances with a worldwide pandemic, a never-ending war, and a general divide in opinions. Russia’s recent move towards approval of bitcoin shows that when the rubber meets the road, what works and is practical in times of crisis and need, wins the race. While governments around the globe feverishly try to get their electronic payment systems developed, bitcoin already finds its use spreading, and successfully so.    Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on precious metals and cryptocurrencies, you can also subscribe to our free newsletter. Disclosure: This article and the content are for informational purposes only and do not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|March 29th, 2022|Tags: Bitcoin, Bitcoin bounce, Bitcoin bullish, Bitcoin consolidation, bitcoin/gold-ratio, crypto analysis, crypto chartbook, DeFi, low risk, quad exit, technical analysis, trading education|0 Comments About the Author: Korbinian Koller Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
GBPUSD (British Pound To US Dollar) Has Decreased Amounting To Levels From The Middle Of March

GBPUSD (British Pound To US Dollar) Has Decreased Amounting To Levels From The Middle Of March

Alex Kuptsikevich Alex Kuptsikevich 29.03.2022 12:55
The British pound is often closely linked to risk demand in global markets due to London’s position as a significant financial hub. However, the UK and European stocks have performed well since last Wednesday, while the pound and the euro have been methodically losing ground. GBPUSD fell earlier on Tuesday to a 3-week low, briefly hovering under 1.3050, but soon returned to 1.3100 on data indicating increasing lending in February. Although the tightening of monetary policy is designed to cool the credit market, at the start of this process and against a background of accelerating inflation, it makes sense for households to spend to buy durable goods and borrow as long as rates remain low. Buoyant stock market performance and a robust macroeconomic backdrop make for an optimistic outlook for GBPUSD, making the pair an attractive buy on a downturn.
DYDX AT BREAKOUT POINT

DYDX AT BREAKOUT POINT

Peter Adepoju Peter Adepoju 29.03.2022 19:46
We have DYDX in a descending channel. We also have an inner trendline serving as support for the price movement. I expect the price to retrace back to this trendline before takeoff out of the trendline. But if price should break the inner trendline downward, then price will fall more. What do you think? Share your opinion in the comment section You can also demand for analysis of your preferred coin Happy Trading https://www.tradingview.com/chart/DYDXUSDT/4C2zwETr-DYDX-AT-BREAKOUT-POINT/ Join my FREE Telegram Channel for daily updates and signals https://t.me/Petrock_Signals
USDCHF - Swiss Franc Strengthens, XAUUSD Rebounces, Will UK100 Start To Gain Consequently?

USDCHF - Swiss Franc Strengthens, XAUUSD Rebounces, Will UK100 Start To Gain Consequently?

Jing Ren Jing Ren 30.03.2022 07:41
USDCHF tests support The US dollar edged lower as traders ditched its safe-haven appeal. The pair met strong support at 0.9260 over the 30-day moving average. A break above the immediate resistance at 0.9340 prompted short-term sellers to cover their positions, opening the door for potential bullish continuation. A break above 0.9370 could bring the greenback back to the 12-month high at 0.9470. 0.9260 is major support in case of hesitation and its breach could invalidate the current rebound. XAUUSD struggles for support Gold struggles as risk appetite returns amid ceasefire talks. A fall below 1940 forced those hoping for a swift rebound to bail out. On the daily chart, gold’s struggle to stay above the 30-day moving average suggests a lack of buying power. Sentiment grows cautious as the metal tentatively breaks the psychological level of 1900. A drop below 1880 could make bullion vulnerable to a broader sell-off to 1850. An oversold RSI attracted some bargain hunters, but buyers need to lift offers around 1940 before they could expect a rebound. UK 100 heads towards recent peak The FTSE 100 continues upward as Russia promises to de-escalate. A bullish close above the origin of the February sell-off at 7550 has put the index back on track. Sentiment has become increasingly upbeat over a series of higher highs. The lack of selling pressure would send the index back to this year’s high at 7690. A bullish breakout may resume the uptrend in the medium term. As the RSI shot into the overbought zone, profit-taking could drive the price down temporarily and 7460 would be the closest support.
USD/JPY: Japanese Authorities Signal Intervention Amid Rapid Currency Appreciation

Awaiting British GDP, German Unemployment Change And The US Initial Jobless Claims – Economic Calendar By FXMAG.COM – 31/03/22

Mikołaj Marcinowski Mikołaj Marcinowski 30.03.2022 16:05
Some of crucial releases are behind us, but there is more to come! Tomorrow China, Great Britain, the USA, Germany and Canada have their economic indicators released so don’t miss a thing! Night-morning – 31/03/22 The day begins with the release of Chinese Manufacturing PMI indicator which previously hit 50.2 This one is released at 2:30 a.m. Four and half hours later we move to Great Britain to follow the announcement of GDP (QoQ and YoY). The Quarter on Quarter one reached 1% previously and Year on Year hit 6.5% At 8:55 a.m. German Unemployment Change goes public (prev. -33K). Afternoon – 31/03/22 Shortly after midday (1:30 p.m.) the US Initial Jobless Claims and Canadian GDP are announced. The previous values amounted to 187K and 0% respectively. Source/Data: Investing.com Economic Calendar
What Moves GBPUSD? GDP, Inflation And BoE In Focus

What Moves GBPUSD? GDP, Inflation And BoE In Focus

Alex Kuptsikevich Alex Kuptsikevich 31.03.2022 09:28
On Thursday morning, another pack of upbeat statistics from the UK supports the British pound. Final GDP data for the fourth quarter showed a gain of 1.3%, revised up from the previous estimate of 1.0%. The balance of payments deficit at 7.3 bln was the lowest in 11 years. Separately, Nationwide reported that the price of houses rose 1.1% YoY in March and accelerated to 14.3% YoY, the fastest pace since 2004. This is another factor favouring the Bank of England’s stance on tightening monetary policy to prevent the credit bubble and curb inflation from spiralling further out of control. Such data suggests less outflow of currency from the country and points to solid fundamentals in the economy to withstand further monetary policy tightening to combat inflation, which is positive for GBP. Earlier, the Bank of England showed that it could implement policy tightening ahead of the US Fed, which is positive for the GBPUSD and suggests the potential for a sustained reversal of the pair to long-term growth. The technical picture is also on the bullish side. GBPUSD has corrected around 40% of the rally from the lows at the start of the pandemic from May 2021 to March 2022, which fits into the Fibonacci retracement. Resilience at current levels opens up the potential for further long-term strengthening to 1.6000.
India's RBI Keeps Repo Rate Unchanged Amid Tomato-Driven Inflation Surge

Exhange Rate GBP To INR And Crude Oil Price To Plunge This Week!? Bank Of England – Interest Rate Decision Ahead - Economic Calendar By FXMAG.COM

Mikołaj Marcinowski Mikołaj Marcinowski 01.04.2022 16:15
Another week is near and we focus on all major economic events in the week 04/04-8/04/22. There are some releases we should highlight and these are, among others, Australian Retail Sales (MoM) (1.6%), RBA Interest Rate Decision and US Crude Oil Inventories. There are also important events to follow on Friday as Reserve Bank Of India announces its interest rate decision. Monday – Chinese rest, Australians meets Retail Sales, Bank Of England’s Bailey Testifies On Monday there is Ching Ming Festival in China so there are no economic events in this country on April 4th. Countries which we should observe are Australia and Great Britain. In Australia, at 2:30 a.m. Retail Sales is released (prev. 1.6%). Heading to Great Britain, five past ten speaks BoE’s Bailey so expect some hints about incoming monetary policy statement. Tuesday – another day of Chinese Holiday, RBA decides on Interest Rate, Great Britain releases Composite and Services PMI In Australia, very early in the morning RBA Interest Rate Decision release and RBA Rate Statement go public. Current interest rate of this country amounts to 0.1% (!) Four hours later it’s time to visit Great Britain again this week as Composite PMI and Services PMI are announced. At 3 p.m. we move to USA to get acquainted with the ISM Non-Manufacturing PMI (56.5). Wednesday – US Crude Oil Inventories indicator is here The great day begins with GB Construction PMI released at 9:30 a.m. In the afternoon we travel to North America for the announcement of Canadian Ivey PMI Release planned for 3 p.m. Half an hour later the time comes – we get acquainted with Crude Oil Inventories (prev. -3.449M). In the evening a sneak peak of the next monetary policy statement goes public as FOMC Meeting Minutes are released. Friday – GBP To INR Might May Change! As mentioned - Reserve Bank of India releases its interest rate decision on Friday. The current one amounts to 4% and a change will affect GBP To INR exchange rate. In the afternoon it’s good to follow news from Canada. At 1:30 p.m. Employment Change of this country goes public (prev. 336.6K) Source/Data: Investing.com Economic Calendar
EUR: Range-bound Outlook Amid Tightened Swap Rate Gap

GBP Loses! EUR Gains! NFP (Non Farm Payrolls) Is Released And We Know How Have Forex Pairs Reacted To This Week's Events!

Mikołaj Marcinowski Mikołaj Marcinowski 01.04.2022 23:37
It was another week full of events, geopolitical news and economic indicators releases. As the Forex pairs charts show the fluctuation weren’t always slight and developed an interesting outlook ahead of April which has just begun. EUR/USD gained over 0.5% Let’s begin with EUR/USD. Of course this pair is significantly affected by the slowly ceasing (?) conflict between Russia and Ukraine. As we can see on the chart there was a huge rise on Tuesday as the tensions were reported to loose its momentum. Cease fire has been said to come shortly and this optimism seems to had remained till the end of the week. There’s no doubt today’s fluctuations were caused by the release of NFP. The following week’s FOMC Meeting Minutes will surely let us have a closer look of dollar’s rate future. EUR/GBP gained ca. 1.1% EUR has been fighting all the week to finally beat British pound. It seems that the single currency needs to be triggered, but only a little, to rise significantly. Naturally these supporters were positive news about cease fire in the eastern Europe. In the following week BoE’s Bailey speaks and we can expect that it will be an introduction to next monetary policy decisions. USD/CHF – Swiss franc strengthened… The beginning of the week wasn’t so optimistic for CHF. Before the news coming from Ukraine it was losing the fight with dollar. The situation got better after positive news about possible cease fire. USD/PLN – Zloty feels good Poland lies close to the area where the conflict takes place. Because of corelations and other factors Polish zloty was hit several times. After tightening of monetary policy (next decisions to come shortly) and optimistic signals from Ukraine zloty strenghthened again gaining 1.6% over the week. Source/Data: TradingView.com Charts: Courtesy of TradingView.com
BTC To GBP Chart Shows A Significant Drop! ETH To GBP Has Decreased As Well!

BTC To GBP Chart Shows A Significant Drop! ETH To GBP Has Decreased As Well!

Mikołaj Marcinowski Mikołaj Marcinowski 05.04.2022 18:50
Once again cryptocurrencies don’t want to make us sleepy and fluctuate significantly. Over last 24 hours the most popular ones have decreased by over 1%! BTCGBP is ca. £35.000 and ETHGBP is close to £2640. Express Analysis – how it’s going? BTC To GBP - Monthly chart shows that in the beginning of March there was a significant rise, which quickly converted to a gradual, slow rally to the current levels. It’s about £6.000, so there is no doubt the changes are noticeable. The 5-day chart shows a faster growth in the very first day of April. Since then the Bitcoin price (GBP) has been keeping £34.400-36.200 levels and even with the mentioned 1% loss, the price is still there. Bitcoin Price (GBP) – 24h Chart Bitcoin Price (GBP) – Monthly Chart Bitcoin Price (GBP) – 5-day Chart Source/Data: TradingView.com Charts: Courtesy of TradingView.com
US Close – A brutal week on Wall Street ends on a positive note, Fed reiterates commitment to restoring price stability, Oil plummets on outlook, Gold lower on strong USD, Bitcoin’s danger zone

April 6th Is Going To Be A Market-Shocker! Polish Interest Rate Decision, FOMC Meeting Minutes And Crude Oil Inventories Are Released Tomorrow

Mikołaj Marcinowski Mikołaj Marcinowski 05.04.2022 22:04
Wednesday, April 6th is a day which can’t ‘praise’ itself with loads of economic events, but those which take place in the following day are definitely crucial! There is only one news which can really wake us up tomorrow and it’s UK Construction PMI (Mar) which previously amounted to 59.1 Let’s watch it closely – data can affect GBP rate. Afternoon is much, much tempting. We begin with Canadian Ivey PMI (Mar). Previously this one hit 60.6 At 3:30 p.m. US Crude Oil inventories go public. It’s surely the most awaited indicator of the day as the price of crude is topping the headlines. There’s no doubt Polish readers are looking forward to tomorrow’s evening. At 6 p.m. interest rate decision is released by NBP. In times of Russia-Ukraine conflict the rate of zloty has been hit several times and national bank tries get it back in the game. Let’s go back to the USA. Tomorrow, at 7 p.m. FOMC Meeting Minutes is published and as we wrote last time, it can be the first ‘trailer’ of Fed’s rhetoric and next interest rate decision. The last one confirmed tightening of monetary policy. Data/Source: Investing.com Economic Calendar
Pairs With Dollar (USD) And Pound (GBP) To Be Shaken Shortly!? Let’s Follow EURUSD, USDCAD And GBPUSD!

Pairs With Dollar (USD) And Pound (GBP) To Be Shaken Shortly!? Let’s Follow EURUSD, USDCAD And GBPUSD!

Mikołaj Marcinowski Mikołaj Marcinowski 12.04.2022 12:40
Today US Core CPI and EIA Short-Term Energy Outlook are released, tomorrow it’s time to print UK CPI and the US PPI and crude oil inventories. What’s more, tomorrow’s afternoon Bank of Canada interest rate decision is released as well and many investors and economists await these announcement. It’s a very, very hot week as one day before holiday for many countries ECB interest rate decision goes public. It’s going to be a really tempting end of the working week! Firstly, let’s see how has EUR/USD fluctuated recently USD keeps going, yields are rising and the ECB decision is crucial considering next moves of the pair, as we have to wait longer for the next Fed’s announcement till the middle of May. EURUSD Chart USDCAD – Bank of Canada to raise the interest rate? As Investing.com predicts a rate hike, tightening of BoC’s monetary policy could help the Canadian dollar even if it’s quite strong right now even gaining in a long term. Monthly chart shows a noticeable strengthening of 1%. However, mentioned gain is a reduced value as a few days ago USD/CAD has been trading almost 3% lower. USDCAD Chart GBPUSD – A Storm Incoming? Daily chart shows a real volatility! GBP has strengthened and weakened few times already and the moves have become more dynamic recently as you see on the right hand side. The US CPI is released today and UK CPI and the US PPI go public on Wednesday so expect high volatility to persist and investors to change their minds really rapidly. GBPUSD Chart Data/Source: Investing.com, TradingView.com Charts: TradingView.com
Economic Calendar For July 21st. EUR/USD And GBP/USD - Trading Ideas

Forex: GBP To NZD - Weekly Trade Idea On British Pound To New Zealand Dollar (GBP/NZD)

Saul Lokier Saul Lokier 19.04.2022 09:32
Summary: NZD Consumer Price Index is due to be released on the 21st of April. Forecasters are predicting the data to be up about 0.6% from the previous Overall trend recently has been to the downside on the pair Week: 18-22.04.2022 NZD CPI - Consumer Price Index (Inflation Rate) NZD Consumer Price Index is due to be released on the 21st of April. Forecasters are predicting the data to be up about 0.6% from the previous, there are very bullish forecasts for the NZD which may see this chart and trading idea retrace perfectly   Read next: (UKOIL) Brent Crude Oil Spikes to Highest Price For April, (NGAS) Natural Gas Hitting Pre-2008 Prices, Cotton Planting Has Begun   Key Levels: Resistance 1.93500 Support 1.91000 Trend GBP/NZD. Bearish GBP To NZD Overall trend recently has been to the downside on the pair, but given the strength in the upside pushes recently I think we are going to witness a trend changing movement.   For you: Forex Rates: British Pound (GBP) Strengthening? Weak (EUR) Euro? GBP, NZD And AUD Supported By Monetary Policy?   Call to Action/Trade Idea Wait for price to retrace back down to the local demand area, watch for a confirmation on the lower time frames and then push higher to the 1.96 mark.
EM Index Inclusions and Exclusions: India Thrives, Egypt Faces Challenges

Japanese Yen (JPY) Weakens Against The Dollar, USD/CAD Stable And The Inevitable Strengthening Of The USD, IMF/World Bank Events

Rebecca Duthie Rebecca Duthie 19.04.2022 09:50
Summary: Analysis of; EUR/USD, EUR/GBP, USD/CAD, USD/JPY. Japanese Yen weakens as Bank of Japan fights against increasing Treasury Yields. USD Strengthening as the Fed remains hawkish. The EUR and GBP future prices awaiting the IMF and World Bank Events later this week. EUR/USD, Strengthening USD putting pressure on the EUR. EUR/USD market sentiment is currently reflected as bearish for this currency pair as the graph shows the declining price over the past week. In the past weeks, the Euro has been underperforming as a result of the Russia-Ukraine war causing fears of Eurozone stagflation. The ECB is stuck at the moment with increasing inflation and slow growth, the likelihood of the ECB’s capacity to match the aggressiveness of the Fed is low. Perhaps toward the end of the week we will see the EURO bounce against the USD inlight of the talks at the IMF/World bank events. EUR/USD Price Chart Read next: (UKOIL) Brent Crude Oil Spikes to Highest Price For April, (NGAS) Natural Gas Hitting Pre-2008 Prices, Cotton Planting Has Begun   The Value EUR/GBP Awaits Changes in Light of Major Appointments This Week The Euro seems to be strengthening against the GBP after it depreciated late last week. Since the market opened this morning, the investor sentiment for this currency pair has become bullish. There is suspicion that the sharp fall in the value of the EUR/GBP last Thursday may have come out of China in an attempt to stop any more strengthening in the Renminbi. The future value of this currency pair is important to watch in the coming days, with major appointments on talks about finances coming up, especially both the ECB and BoE governors talks at the IMF/World Bank events later this week. EUR/GBP Price Chart USD/CAD Currency Pair holding Stable amidst Current Market conditions The USD/CAD currency pair price is remaining relatively stable given the current risk-averse market sentiment. The USD/CAD currency pair is considered to be volatile, both the CAD and USD reacts quickly to the release of economic data and current market conditions. Despite investors being risk averse, the market sentiment seems to be bullish for the USD inlight of the Fed's hawkish attitude, growing concerns on inflation increases and US rising benchmark yields all leading to a strengthening USD. USD strengthening against the Japanese Yen The USD strengthened against the Yen this past week as a result of the increasing US Treasury yields and the expectation of positive economic data. The price of this currency pair reached the highest since March 2002. The Bank of Japan has been working hard to keep the Treasury yield below 0.25%, the opposite approach the Fed has taken in the fight against inflation, causing the yen to weaken. The Japanese finance minister raises concerns on the damaging effect the weakening yen could have on the weakening economy For you: Forex Rates: British Pound (GBP) Strengthening? Weak (EUR) Euro? GBP, NZD And AUD Supported By Monetary Policy?   USD/JPY Price Chart Sources: Finance.yahoo.com, Teletrade.eu.
What Direction Could Be Defined By US Data? (ECB) Christine Lagarde Speaks Today. Important Days Ahead Of Us

Euro To US Dollar (EUR To USD): That's An Amazing USD Performance, Will USDCAD (Canadian Dollar) Stay Close? USDJPY (Japanese Yen) Beats Records!

Jason Sen Jason Sen 20.04.2022 10:39
EURUSD retests 37 YEAR TREND LINE SUPPORT AT 1.0760/20. Longs need stops below 1.0670. Obviously there is nothing more important than this level this week. Longs at 1.0760/20 initially target 1.0820/50. Above here is more positive targeting 1.0900/20 then 1.0960/70. USDCAD strong resistance at 1.2650/70. Shorts need stops above 1.2690. A break higher is a medium term buy signal. Related article: Monetary Policy Drives EUR/USD, The Future of the EUR/GBP Awaits the Bank Of England's Speech - Good Morning Forex| FXMAG.COM Very minor support at 1.2610/1.2590 & again at 1.2525/05 today. If we continue lower look for 1.2480/70. We have another buying opportunity at 1.2440/10. Longs need stops below 1.2370. A break lower is an important medium term sell signal. USDJPY beat 14 year trend line resistance at 127.10/50 & rocketed another 200 pips!! The pair has 13 blue bodied daily & 7 weekly candles in a row. So sell signal yet despite severely overbought conditions. Above 129.50 look for 129.90/95 then 130.25/35, perhaps as far as 130.75/85. First support at 128.45/25. Further losses can target 127.80/70. Unlikely but if we continue lower look for strong support at 127.10/126.90. Read next: Gold Price Falls, Volatility in Wheat Futures and The Price Of Palladium| FXMAG.COM EURJPY higher as expected reaching 139.67 & no sell signal yet as we become overbought. Further gains can target 139.95/99 then 140.40/50 & 140.85/95. GBP To USD GBPUSD retests last week's low at 1.2990/70 after the bullish engulfing candle so now we just have to see if we get a double bottom buy signal or if the pair break lower for a sell signal. So far the bulls are winning as we bounce from 1.2977. A break below 1.2955 should be a medium term sell signal. Our longs target 1.3060/70 & 1.3100/10, perhaps as far as first resistance at 1.3150/70. Please email me if you need this report updated or Whatsapp: +66971910019 – To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk
Market Update: UK Inflation Softens, US Stocks Rally, Bank Earnings, and AI Dominate Headlines

Monetary Policy Drives EUR/USD, The Future of the EUR/GBP Awaits the Bank Of England's Speech - Good Morning Forex

Rebecca Duthie Rebecca Duthie 20.04.2022 10:17
Summary: EUR/USD and Monetary Policy. Bank Of England's Speech on Thursday effect on the GBP related currency pairs. AUD/CHF as a reflection of investor risk sentiment. Related article: Japanese Yen (JPY) Weakens Against The Dollar, USD/CAD Stable And The Inevitable Strengthening Of The USD, IMF/World Bank Events Monetary Policy driving the EUR/USD price action. Since the market opened this morning, the EUR has strengthened against the USD and the market sentiment is bullish, the rise in price is small but significant given the current economic conditions. With the differing monetary policy of the European Central Bank (ECB) and the US Federal Reserve (Fed) the EUR/USD currency pair price is low. In the coming weeks it is likely to see the dollar strengthening thanks to the expectations of the Fed to tighten monetary policy. Whereas, there is no certainty on when the ECB will begin rising interest rates. EUR/USD Price Chart Value of the GBP Awaits BOEs Speech Since the market opened this morning the price of the currency pair has increased, however, market sentiment for the EUR/GBP has changed from bullish yesterday to a mixed today. The strengthening EUR against GBP comes in light of the Bank of Englands (BOE) announcements tomorrow regarding the future monetary policy of the country, investors are expecting more hawkish actions. EUR/GBP Price Chart  Read next: Altcoins' Rally: Solana (SOL) Soars Even More, DOT and SHIBA INU Do The Same! | FXMAG.COM AUD/CHF Since the market opened this morning, the value of the AUD/CHF has increased, and has a bullish market sentiment. This currency pair can be used as a good reflection of risk sentiment, this is because the AUD is risk-on and the Swiss Franc is considered as a safe-haven currency. AUD/CHF Price Chart GBP loses some ground on the JPY The price of the GBP/JPY currency pair has (in general) been on the rise as a result of the rapidly depreciating value of the Yen. However, since the market opened this morning the price has decreased despite the bullish market sentiment, possibly due to the uncertainty regarding the future of the GBP and the upcoming BOE’s announcements. GBP/JPY Price Chart Sources: Finance.yahoo.com, teletrade.eu, dailyfx.com
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(USD) Dollar Index - Fed Floors It! Hawkish Rhetoric And Interest Rate Hike? British Pound In Crisis? GBP/USD Affected By Weak Retail Sales Data!

Conotoxia Comments Conotoxia Comments 22.04.2022 12:02
The Dollar Index appears to have risen on Friday to its highest level since July 2020 as expectations rise for a rapid tightening of monetary policy in the US both this spring and summer. Learn more on Conotoxia.com Speaking Thursday at a panel organized by the IMF, the Fed chairman said the central bank is committed to raising interest rates quickly to bring inflation down Investors may have heard hawkish comments from Federal Reserve Chairman Jerome Powell yesterday, who suggested more aggressive rate hikes in the future. Speaking Thursday at a panel organized by the IMF, the Fed chairman said the central bank is committed to raising interest rates quickly to bring inflation down, and added that a 50 basis point rate hike is still on the table for May. Powell pointed out that aside from damaging inflation, the U.S. economy is very strong and the labor market is in good shape. The dollar index seems to have gained for the third week in a row. Powell's speech was followed by opinions from various institutions on how further monetary policy in the US may shape up. Among them, Nomura points to the possibility of hikes of as much as 75 basis points both in June and July. This seems to be one of the bigger predictions for Fed action. Read Next: How To Hedge Against Inflation? Crypto? Is Bitcoin (BTC) The Answer?| FXMAG.COM UK consumer morale was the weakest since 2008 In addition to the strength of the US dollar, today on the currency market we may also observe the relative weakness of the British pound. Macroeconomic data from the UK may have contributed to the GBP depreciation. Retail sales in the UK fell by 1.4 percent in March 2022, which seems to be much worse than market forecasts of a 0.3 percent decline. The data suggests that consumers may be spending less due to rising prices. Additionally, UK consumer morale was the weakest since 2008. The GfK consumer confidence index in the UK fell to -38 points in April 2022, the lowest level since July 2008. As a consequence of the above events, the GBP/USD pair price could fall by almost 1% today, to the lowest level since the end of 2020. Yesterday the pair was quoted at the area of 1.3030, and fall today to the region of 1.2900. The market can still wait for the speeches of Bank of England Governor Andrew Bailey later today. Read Next: Record-Breaking US Dollar To Japanese Yen (USD/JPY): Turbo-accelerated Dollar Index (DXY) Makes Not So Strony JPY Plunge Against The Greenback | FXMAG.COM Since the beginning of the year, the yen seems to have lost about 10 percent against the US dollar Among the world's major currencies, it is also impossible not to pay attention to the recent weakness of the Japanese yen, which is trying to stabilize under the level of 130.00 on the USD/JPY pair. The talks between the Japanese and American sides on taking joint steps to slow down such rapid changes in the exchange rate could help in this process. A meeting was to be held between the Japanese Finance Minister and the US Treasury Secretary on this matter. Since the beginning of the year, the yen seems to have lost about 10 percent against the US dollar. Read Next: Fed Vs. ECB! Market Shocker Is Here! EUR/USD Plunged! (EUR) Shows Its Strength Amid ECB Rhetoric| FXMAG.COM Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Powell signals Fed needs to be nimble, Canada Inflation hits near 40-year high, bitcoin tries to hold USD20k

What Moves Forex Rates? Strong US Dollar Affects British Pound (GBP), Japanese Yen (JPY) And CNH

Alex Kuptsikevich Alex Kuptsikevich 22.04.2022 13:32
The world's major currencies continue to surrender to the dollar one after another. Since the start of March, the yen has lost 11.5% and fallen to a 20-year low. But just as we saw the third world economy currency stabilise, the currency of the second one went on the move. Chinese currency had previously successfully resisted the strengthening of the USD since the middle of last year, but The dollar has added over 2% to the renminbi since the start of the week, the most significant move since 2015. It is also noteworthy that the Chinese currency had previously successfully resisted the strengthening of the USD since the middle of last year, but in an abrupt move, entered the area of the extremes of the last 12 months. Read next (FxPro): Still Going Up The Price Of Crude Oil (WTI/BRENT) When Energy Stocks Will Start To Soar? | FXMAG.COM We see an equally impressive attack on the Pound. The GBPUSD broke the support at 1.3000 on Friday, and it is already losing more than 1% so far today. USDCHF reached its highest point since June 2020, exceeding 0.9550. Read next (FxPro): Want To Exchange 100 GBP To USD? GBP/USD Below 1.3000! (GBP) British Pound Weakens! GBP To USD - 17-Months-Low! | FXMAG.COM The New Zealand and Australian dollars have been declining steadily since early April, despite hawkish action and comments from respective central banks. Moreover, the export-oriented economies of these countries should benefit from the emerging commodity prices. EURUSD is trading below 1.0800, near 2020 reversal levels and maintaining a very moderate trading range The USDCAD went back to month highs in less than two days, reversing Wednesday's sharp rally and earlier gains from hawkish comments by the Bank of Canada. EURUSD is trading below 1.0800, near 2020 reversal levels and maintaining a very moderate trading range. However, the swing in GBPUSD today and USDCNH throughout the week and the USDJPY drama since early March suggests that EURUSD could be the next victim of dollar bulls.
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

US Dollar (USD) Continues To Trump Euro (EUR) And British Pound (GBP). EUR Fails To Get Boost Post Macron Election Victory - Good Morning Forex!

Rebecca Duthie Rebecca Duthie 25.04.2022 11:28
Summary: Macron's victory was supposedly expected to stabilize EUR. Fed further increase in yields strengthening USD. USD continues to strengthen against the EURO inlight of further US yield increases. Market sentiment for this currency pair is bearish as of market open today, the price is down almost 0,6%. On friday the Fed announced a further increase in the bond yields, this marks the seventh consecutive week that the Fed has increased the US yields. The European Central bank is still behind the Fed on their yield increases, the expectation for this change is increasing but the increased expectations are not helping the EUR to strengthen against the USD. EUR/USD Price Chart Read Next: ECB Announcements to Possibly Tighten Monetary Policy Strengthens the Euro. EUR/USD, EUR/GBP, AUD/NZD and EUR/CHF All Increased The EURO showed overall strengthening against the GBP over the past week. Since the market opened this morning the market sentiment for this currency pair is bullish. The EUR has strengthened against the GBP continuously over the last week. Today the increase has shown almost 0,3%. The EUR is strengthening as a result of the uncertainty with the Bank of England's future yields and the inflation causing personal spending to decrease, hampering the economy. In addition, the EUR strengthened against the GBP inlight of Macron taking the win in the French elections. EUR/GBP Price Chart   Read next: A Reward For A Transaction!? What Is Kishu Inu Coin? ($KISHU) Let's Take A Look At This New Altcoin | FXMAG.COM   EUR/JPY showing bullish signals. Since the market opened this morning the market sentiment is bullish for this currency pair. Despite the bullish sentiment, the price has still fallen by almost 0,8% since this morning. This currency pair is sensitive to trends in broad based market sentiment trends, therefore, inlight of Macron’s victory causing changes in market sentiment it is not surprising this price is seeing volatility. EUR/JPY Price Chart CHF Strengthening. Market sentiment for the currency pair is bullish at the moment. However, despite the bullish signals the price has still fallen almost 4% since the market opened this morning. The Swiss Franc has strengthened today causing this fall. EUR/CHF Price Chart Sources: finance.yahoo.com, dailyfx.com, poundsterlinglive.com Read next: Monetary Policy Drives EUR/USD, The Future of the EUR/GBP Awaits the Bank Of England's Speech - Good Morning Forex  
Tuesday's EUR/USD Analysis: Chaotic Movements on 30M Chart

Will US Dollar (USD) Beat British Pound (GBP), Japanese Yen (JPY) And All Other Currencies? Bank Of Japan To Tackle The Weaking Of JPY?

Marc Chandler Marc Chandler 27.04.2022 22:09
April 27, 2022  $USD, Australia, BOJ, Brazil, Currency Movement, Mexico, Russia Overview: Russia's decision to cut gas supplies to Poland and Bulgaria and the sharp sell-off in US equities yesterday casts a pall over the markets today.  But not the dollar. The euro punched through $1.06 for the first time in five years and the greenback turned higher against the yen after falling to a seven-day low.  The major bourses in the Asia Pacific region fell by more than 1% except China and Hong Kong.  The Hang Seng eked out a minor gain, but China's CSI 300 rose nearly 3%.  Europe's Stoxx 600 gapped lower but has recovered with the help of materials, consumer discretionary, and energy sectors.  US futures are firm.  Treasury yields have recovered part of yesterday’s decline, putting the 10-year near 2.77% and the 2-year close to 2.58%.  European yields are mostly firmer and the core-periphery spreads are widening.  In the foreign exchange market, the greenback is mixed.  The Antipodeans and Scandis are firm, especially the Australian dollar, after the higher-than-expected Q1 CPI.  The yen, euro, and Swiss franc are heavy.  Emerging market currencies are mostly lower.  Of note, the Philippine peso and the Mexican peso are among the most resilient today.  Hungary, the only EU country that has agreed to pay Russia in roubles, is among the weakest (~0.9%).  That dubious honor goes to the South Korean won today, off 1.1%, the largest loss since last June and the fifth consecutive decline. Gold was sold to fresh two-month lows near $1887 before steadying.  June WTI is firm but in a narrow range (~$101.50-$103) near yesterday's highs.  US natgas prices are almost 0.75% higher after gaining nearly 5% over the past two sessions.  Europe's benchmark rose about 8.2% yesterday on top of yesterday's nearly 6% gain.  It is back to early April levels.  Iron ore rose for a second consecutive session, while copper is trying to end a three-day fall.  July wheat is steady after rising 2% yesterday.  Asia Pacific Australia's Q1 CPI rose 2.1%, faster than the 1.7% anticipated by the median in Bloomberg's survey and well above the 1.3% increase in Q4 21.  The year-over-year pace accelerated to 5.1% from 3.5%.  The underlying measures also rose.  The central bank meets next week, and the market sees the inflation figures as boosting the chances of a rate hike, which previously was expected after the May 21 election.  Yesterday the market had about six basis points of tightening discounted for the May 3 meeting.  Now there are 18 bp increase priced into the cash rate futures.   The Bank of Japan's two-day meeting began today.  Officials have clearly signaled no intention to change course.  Its defense of the 0.25% cap on the 10-year yield continued to today but the softer global yields yesterday took some pressure off the JGB market and there were sellers of 10-year bonds to the BOJ under its fixed-rate operation.  The BOJ is well aware that energy and food prices are lifting measured inflation and the reduction in wireless charges drop out of the 12-month comparison.  It pushes back and says that those developments do not make the increase in CPI sustainable.  Note too that the new economic package is estimated to shave 0.5% off headline CPI in the May-September period.   Many observers still seem to put the cart before the horse.  They are concerned that the weaker yen reduces Japanese demand for Treasuries.  The recent price action lends support for the hypothesis that the causation arrow is running the other way.  The increase in US yields weakens the yen.  The US 10-year yield peaked on April 20.  So did the dollar against the yen.  They both recorded eight-day lows earlier today and have recovered.  Moreover, the indirect bids show that the recent US Treasury auctions have been strong, including yesterday's two-year note sale.  That is where foreign participation is often picked up.   The dollar found a bid after slipping a little below JPY127. A $540 mln option at JPY126.75 rolls off today.  The greenback has already resurfaced above JPY128.  A move above JPY128.25 would lift the tone, but it needs to get above JPY128.50 to sign another attempt on the JPY129.50-JPY130 area. The Australian dollar recovered from around $0.7120 to almost $0.7200, but the upside momentum faltered and it fell back to the $0.7140 area in late Asia Pacific turnover.  That said, the intraday momentum indicators suggest the potential to retest the highs in North America.  The Chinese yuan is trading in its narrowest range for a little more than a week.  The dollar is consolidating its recent gains and traded roughly between CNY6.5480 and CNY6.5615.  The cut in reserve requirements for foreign currency deposits appears to have succeeded not in pushing the yuan higher but in steadying the exchange rate.  The PBOC set the dollar's reference rate slightly higher than expected in the Bloomberg survey (CNY6.5598 vs. CNY6.5596). Europe In a bizarre turn of events, Russia is insisting on being paid roubles for its gas while Europe is insisting to adhering to contracts to pay in hard currency, euros.  Russia is making good on its threats and announced that its cutting off gas supplies to Poland and Bulgaria.  Poland's gas supplies are around three-quarters capacity so the cut of new supply will not pinch immediately.  Bulgaria has indicated it has taken steps to secure alternative supplies.  Russia's actions do raise the question of who is next and that will likely be seen next month.  That said, Europe's reluctance or inability to move quicker on gas reveals their vulnerability, which Russia is exploiting.  It is quitting Europe before being fired, in a way.  Meanwhile, the tensions are rising in Moldova's breakaway region.  Some argue that Russia ultimately will likely link up the parts of Ukraine that it appears to be trying to take with the Moldova region, which would pen-in Ukraine.   Musk's leveraged buyout of Twitter is spurring a debate about freedom of speech in the US.  The constitutional right protects US citizens from abridgement of that right by Congress not by the private sector.  Clearly newspapers do not have to print all the op-ed submissions it receives and its not denying the rejected authors their freedom of speech.  In Europe, the reaction is different.  Musk is reminded that Twitter, regardless of its ownership structure, must adhere to the Digital Services Act, approved last week.  It forces the platforms to moderate illegal and harmful content that their users post.   The 1.4 bln euro option at $1.06 that expires today appears to have been neutralized.  The euro fell to about $1.0585 in late Asia/early Europe.  Initial resistance is seen near $1.0630 and then $1.0660. On the downside, the 2015-2017 lows were in the $1.0340-$1.0530 area, but there is increasing talk of a move to parity which has not been seen since 2002.  Sterling's losses have also been extended.  It fell to about $1.2535 before recovering to around $1.2590 in the European morning.  The $1.25 area represents the (61.8%) retracement of sterling's rally off the March 2020 low near $1.14.  The next chart point below there is the June 2020 lows around $1.2250.  Over the last five sessions, sterling has shed more than a nickel.  The lower Bollinger Band is set two standard deviations below its 20-day moving average and sterling's losses are nearly three standard deviations below the 20-day average.   America The US reports mortgage applications, which have fallen every week since the end of January but one. March pending home sales are expected to have fallen for the fifth consecutive month. The March trade deficit, which remains near a record imbalance, and March (wholesale and retail) inventories will help economists put their final touches on Q1 GDP forecasts ahead of tomorrow's report.  Due to the revisions in retail sales reported earlier this week, the Atlanta Fed's GDP tracker fell to 0.4%. It will update it again after today's reports.   As noted, there was a strong reception at yesterday's US sale of $48 bln two-year notes.   Indirect bidders took down 2/3 and direct bidders took another 21.4%.  This left the dealers with slightly more than 12%, the least in almost two decades.  On tap today are a $30 bln two-year floater auction and $49 bln 5-year note sale.  Still, the angst in some corners of the market about the implications of a strong dollar on foreign demand is unlikely to dissipate.   Bank of Canada Governor Macklem laid out the logic of raising rates even though it will have little impact on the prices of internationally traded goods that are understood to be the main drivers of Canadian inflation. He argued that keeping inflation expectations anchored will help prices ease when the higher energy and disrupted supply chains ease.   Mexico reports its March trade figures.  The balance may have swung into a small deficit after a $1.29 bln surplus in February.  Tomorrow it reports unemployment figures ahead of Friday's preliminary Q1 GDP.  After a flat Q4 21, it is expected to have grown around 1% in Q2 quarter-over-quarter.  Brazil reports April's IPCA inflation measure today.  It is expected to have accelerated to 12.15% from 10.79% in March. This will further challenge the signals by the central bank that next month could be the peak in what has been an aggressive tightening cycle.     The risk-off mood, which unlike when Russia first invaded Ukraine, is now seen as negative for commodities and commodity currencies.  The Canadian dollar has suffered in this phase despite constructive macro considerations.  The US dollar bottomed last week near CAD1.2460 and today has approached CAD1.2850.  The year's high was set in early March slightly north of CAD1.29.  The greenback has closed above its upper Bollinger Band for the last three sessions and remains above it (~CAD1.2810) now.  The greenback remains within the range set on Monday against the Mexican peso (~MXN20.16-MXN20.4850).  A convincing break of MXN20.50 could spur a quick move toward MXN20.60-MXN20.65.  Note the upper Bollinger Band is found today slightly above MXN20.40. The Brazilian real is a market favorite this year, with high yields, monetary policy near a peak, and commodity exposure. However, alongside Latam in general and the setback for metals, market participants have raced to reduce exposure in both the options and forward markets.  The dollar has jumped from around BRL4.60 a week ago to nearly BRL5.00 yesterday.  A move above there today could target the BRL5.20 area.       Disclaimer
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

(GBP) British Pound And (EUR) Euro! Two Weak Currencies! Who's Going To Win? EUR/GBP – Purple War Zones!

Richard Nasr Richard Nasr 27.04.2022 13:05
EURGBP is overall bearish and approaching the upper brown trendline so we will be looking for Trend-Following Sell Setups As per my trading style/plan; Here are the two strong zones where I will be looking for high probability buy setups: I call them War Zones, (highlighted in Purple circles) Zone 1: (around 0.85) This highlighted purple circle is a strong area to look for sell setups as it is the intersection of the green resistance and upper red trendline. (acting as non-horizontal resistance) Zone 2: (around 0.83) This highlighted purple circle is a strong area to look for buy setups as it is the intersection of the blue support and lower red trendline. (acting as non-horizontal support) As per my trading style:As EURGBP approaches one of the purple circles, I will be looking for reversal setups (like a double bottom /top pattern, trendline break , and so on...) Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
Forex News: GBPUSD beats its range. Can buyers start a new leg higher?

Forex News: GBPUSD beats its range. Can buyers start a new leg higher?

8 eightcap 8 eightcap 05.05.2022 10:01
Today’s focus is on GBPUSD after its solid rally yesterday after markets surged to the USD after the FOMC statement suggested the Fed might not be as aggressive in its policy to combat inflation. The message also confirmed that the policy would do its best to help the US economy achieve a softish landing, and Powell did comment that inflation remains much too high. Let’s look at the GBPUSD. Price remains in a long-term downtrend. The last key leg we saw was a sharp down leg as the USD continued to fly higher over the previous week. Since the last low was put in on the 28th of April, we have seen a range develop, and that pattern was in place until yesterday, before buyers broke through it to the upside after the FMOC. This break has us thinking, can we see a new leg higher set up after this break? Price so far has been weaker today will sellers retracing over 50% of yesterday’s move. Buyers have been fighting back into today’s European session, and expectations are that the BOE may raise rates again today. Could this continue to give the Cable a boost and send price back up to yesterday’s high? A break and close above yesterday’s high could confirm a new up leg. A close back below the HL is a worry and could suggest that buyer momentum might now be that firm. If we do see a new close above yesterday’s highs and buyers can continue to hold momentum, we would be looking at the closest trend line as a possible higher target. Today’s BOE rates decision is at 9:00 pm AEST. Rates are expected to increase to 1%. GBPUSD D1 Chart The post Forex News: GBPUSD beats its range. Can buyers start a new leg higher? appeared first on Eightcap.
Germany's Economic Challenges: Waiting for 'Agenda 2030

Pound (GBP) takes a tumble after BoE hike

Kenny Fisher Kenny Fisher 06.05.2022 09:56
The British pound is fading badly on Thursday. GBP/USD has dropped a staggering 2.15% today and has fallen below the 1.24 line for the first time since July 2020. After the BoE decision, market focus has shifted to the elections in Northern Ireland later today. A Sinn Fein victory could weigh on the wobbly pound.   BoE hike fails to impress markets The BoE raised interest rates for a fourth straight time since December, bringing the Official Bank Rate to 1.00%, its highest since 2009. Yet the market reception to the BoE move was decidedly chilly, as the pound has plunged almost 2% today. Why the sour reaction from the markets? The 0.25% was a modest move and it’s questionable if it will have much impact on soaring inflation. In March, CPI rose to 7.0%, up from 6.2%, and the BoE has warned that inflation could surpass 10%. The modest rate hike passed by a vote of 6-3, surprising the markets which had expected an 8-1 vote. Two MPC members called for a 0.50% hike, which reveals a sharp split within the MPC. Governor Bailey admitted after the meeting that an uncertain economic outlook had led to a range of views in the MPC, and such a statement can hardly be expected to instill confidence amongst investors. The BoE cannot be blamed for not being aggressive – it is well into its rate-hike cycle and the policy summary noted that “some degree of further tightening in monetary policy may still be appropriate in the coming months”. In addition, the BoE dropped the word “modest” to describe upcoming rate hikes. Yet the markets appeared to focus on the split vote and the warning from the BoE that the country could face a sharp economic downturn, and the thumbs-down response has sent the pound sharply lower. As expected, the Federal Reserve raised rates at its meeting by a half-point, the largest increase in 20 years. The Fed signalled that it will deliver additional half-point hikes in June and July, with Fed Chair Powell stating that the FOMC was not “actively considering” a 0.75% increase. The Fed is also implementing quantitative tightening with a reduction in the balance sheet. Starting in June, the Fed will sell USD 45 billion/mth in assets, which will rise to USD 95 billion/mth in September. In sharp contrast to the BoE’s hike, the financial markets reacted positively, as investors believe that the Fed’s rate hikes can curb inflation while ensuring a soft landing for the economy and avoiding a recession.     GBP/USD Technical GBP/USD faces resistance at 1.2612 and 1.2719 There is support at 1.2272 and 1.2179           This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Australian CPI Expected to Rise to 5.2%: Impact on AUD/USD and RBA's Rate Hike Dilemma

(EUR/USD) US Dollar Continues To Trump the EUR, (EUR/GBP)(GBP/JPY) Pound Sterling Unlikely To Recover Anytime Soon.

Rebecca Duthie Rebecca Duthie 09.05.2022 09:54
Summary: Between the Russia Ukraine war and the hawkish Fed, the EUR is battling to recover. Negative global investor sentiment is causing the GBP to struggle even more. EUR continues to strengthen against the CHF. GBP/JPY currency pair. The possibility of a recession in the EU looms. Since the market opened on Monday, the US Dollar has strengthened almost a further 0.5% against the Euro. Investor confidence in the Euro has plummeted as some investors believe that the Euro will eventually end up level with the US Dollar, this comes as Russia's attack on Ukraine continues and the EU oil embargo on Russia. Investors are concerned over the possibility of a recession in the European Union. In addition the hawkish fed increasing interest rates in their attempt to fight inflation is causing investors to turn from the EUR, which is further driving the price down. EUR/USD Price Chart   Read next: (EUR/USD) All Eyes On The US Bureau Of Labour Statistics’ Results Due On Friday, (EUR/GBP) Bleak Economic Outlook For the UK Sends GBP Spiralling - Good Morning Forex!    EUR showing strength against the GBP Since the market opened on Monday, the EUR has strengthened against the GBP. The weakening of the pound sterling to the EUR comes after the Bank of Englands (BoEs) cautious interest rate hike in the midst of negative global investor sentiment. However, market sentiment for this currency pair is showing mixed signals. According to poundsterlinglive.com, any near future strengthening in the GBP is likely to be short lived. EUR/GBP Price Chart CHF losing more ground to the EUR On Monday the market sentiment for the EUR/CHF currency pair was reflecting a bullish signal. With the Swiss National Bank (SNB) refusing to tighten their monetary policy, the EUR has been strengthening against the CHF over the past month and will likely continue to do so. EUR/CHF Price Chart Pound Sterling attempts recovery against the JPY Despite the lack of investor confidence in the Pound Sterling, the GBP has still strengthened against the JPY on Monday, with market sentiment showing bullish signals for the future. The strengthening of the GBP has been very small. The positive price change comes in an attempted recovery after the Yen strengthened against the Pound Sterling last week amidst the BoEs announcements. GBP/JPY Price Chart   Read next: (EUR/USD) ECB Reveals The Possibility Of Interest Rate Increases In July, Negative Investor Sentiment Towards The GBP, Investor Sentiment Turns Bullish For The AUD/JPY Pair - Good Morning Forex!    Sources: poundsterlinglive.com, finance.yahoo.com, dailyfx.com
The EUR/JPY Pair Is Expected To Start A New Zig-Zag Correction

(EUR/USD) Wall Street Tanks, Allowing the Euro To Slightly Recover, (EUR/GBP) Goldman Sachs Betting Against GBP, JPY Gets The Better Of The US Dollar And EUR - Good Morning Forex!

Rebecca Duthie Rebecca Duthie 10.05.2022 11:58
Summary: Euro gained slightly against the USD after the poor performance of the US markets on Monday. Goldman Sachs placing their confidence in the value of the EURO. JPY gains slightly against the EUR and USD on Tuesday. Read next: (EUR/USD) US Dollar Continues To Trump the EUR, (EUR/GBP)(GBP/JPY) Pound Sterling Unlikely To Recover Anytime Soon.  EUR gains some ground against the USD. Markets turned around on Monday with the EUR/USD currency pair with market sentiment showing bullish signals. The Euro is gaining value despite the surging US Dollar, at the end of the trading day on Monday Wall Street has tanked with the Nasdaq down 4.29%. As investors turn away from risky assets such as forex, and move to safer investments such as treasuries, the value of the US Dollar is facing potential pressure. Investors are concerned around the Feds shrinking balance sheet as liquidity dries up. EUR/USD Price Chart Pound Sterling losing value against the Euro. On Tuesday, Goldman Sachs bet the EUR will continue to gain against the GBP, as the market for the EUR/GBP currency pair continues to reflect a bullish sentiment. The European Central Bank (ECB) seems intent on raising interest rates by the summer, showing a more hawkish attitude than the Bank of England (BoE) who believe that inflation will return to normal levels on its own. This BoE attitude is causing investors to lose confidence in the Pound Sterling and causing its value to decrease. EUR/GBP Price Chart JPY receives momentary relief from the USD Although the JPY has gained on the US Dollar on Tuesday, the USD/JPY currency pair is reflecting a bullish market sentiment. The strengthening against the USD comes after the carnage the US markets saw on Monday. Whether or not this strengthening will continue is unlikely as the Bank of Japan (BoJ) continues their monetary easing in their attempt to boost the economy. USD/JPY Price Chart JPY markets best performer on Monday The EUR is losing ground to the JPY during the trading day on Tuesday, the EUR/JPY currency pair is reflecting a mixed market sentiment. As risk averse investors fled to safety assets given the US markets performance, the Japanese Yen was the forex markets top performer on Monday, which gave it the chance to strengthen against the EUR and the USD. EUR/JPY Price Chart Read next: (EUR/USD) All Eyes On The US Bureau Of Labour Statistics’ Results Due On Friday, (EUR/GBP) Bleak Economic Outlook For the UK Sends GBP Spiralling - Good Morning Forex!  Sources: finance.yahoo.com, dailyfx.com, poundsterlinglive.com
Crucial Upcoming PMI Data and High-Stake Meetings Shape China's Economic Landscape

Is It The Time British Pound Unleashes Its Potential!? British Pound To US Dollar (GBP/USD) – Potential Bullish Reversal!

Richard Nasr Richard Nasr 10.05.2022 14:58
GBPUSD is sitting around a strong support in blue so we will be looking for buy setups. on M30: GBPUSD formed an inverse head and shoulders but it is not ready to go yet. Trigger => Waiting for a momentum candle close above the gray neckline to buy. Meanwhile, until the buy is activated, GBPUSD would be overall bearish can still trade lower inside the blue support zone . Good luck! All Strategies Are Good; If Managed Properly! ~Rich
Euro-dollar Support Tested Amidst Rate Concerns and Labor Strikes

FX Update: Bond rally supercharges JPY comeback rally. | Saxo Bank

John Hardy John Hardy 12.05.2022 16:01
Summary:  An extension of the rout in risky assets has continued to drive the US dollar higher against the smaller currencies and most G10 currencies as well, but the Japanese yen has not only taken on a new shine, but is even sharply stronger against the strong US dollar as global bonds have suddenly rediscovered their safe haven appeal. Elsewhere, HKD is worth watching as the HKMA intervened for the first time of this cycle to maintain the top of the USDHKD band. FX Trading focus: JPY woke up and smelled the coffee. Watching HKD as USD presses upper level of USDHKD band. The JPY upside potential has been more fully realized since yesterday on the heavy weight of falling yields in global sovereign bond, which are finally serving their function as a go-to safe haven in an environment of generally risk deleveraging. The JPY is even handily outpacing the ongoing strength in the US dollar as the yield focus dominates. And the technical damage in JPY crosses is spreading: NZDJPY and GBPJPY, the latter our focus yesterday, are already trading back into old ranges that preceded the JPY sell-off sparked by the commodity rally in the wake after Russia invaded Ukraine. Now watching AUDJPY and EURJPY for whether the feat is repeated there (key levels around 86.00 and 134.00, respectively), and CNHJPY has come down hard, with more to come. More thoughts on the most important USDJPY pair below in the chart discussion. The JPY can continue higher, but the price is far “fairer” now relative to long term bond yields. Yields must extend lower still, possibly with a helping hand from crude oi and LNG prices for a full reversal of the JPY sell-off since late February.  Chart: USDJPYYesterday, our focus in JPY crosses was on GBPJPY, which took out the 160.00 and 158.00 area supports yesterday. Today we have a look at the big one: USDJPY and what levels might trigger a more notably slide. Arguably, the first of these has already been under strain today in the 128.50 area. Regardless, the direction of the US 10-year benchmark yield is the key coincident indicator, with global energy prices a secondary indicator. The next support area below is the 127.03 pivot low followed perhaps by the 125.00 area, which was a stopping point on the way up. Source: Saxo Group Sterling suffered a sell-off to new lows in the wake of the Q1 GDP data, which showed a +8.7% growth rate, slightly below expectations, but a -0.1% month-on-month figure for March, with weak production figures to boot. The March Trade Balance data was also out and showed a toe-curling negative £23.8B trade balance, a staggering figure. Still, after a run to fresh lows against the G3 currencies, the EURGBP rally reversed rather sharply, in part as EURUSD tipped over to new lows after a couple of weeks of defending the 1.0500 support area. All traders should monitor the crypto situation as a possible aggravator of additional volatility risk across markets. The TerraUSD “stable coin” broke its parity level with the US dollar earlier this week and traded as much as 70% below par. Then yesterday, a key Bitcoin support level at 30,000 broke, possibly inspiring the instability of the Tether stable coin, which is a commonly used as a kind of parking space between going in and out of crypto trades and in and out of the crypo market itself. The Tether coin traded as much as 5% below par against the US dollar this morning before the whole crypto-complex recovered. More directly pertinent to FX, we have to watch the Hong Kong dollar (HKD), as the USD strength has taken the USDHKD exchange rate to the upper limit of its band at 7.85 and has seen the Hong Kong Monetary Authority out intervening for the first time of this cycle overnight. The HKMA will also need to copy Fed policy to avoid the worst of pressure on the HKD, even with Hong Kong’s economy in a funk. The HKD band is one of those legacy set-ups that makes little sense here almost forty years after its creation, but Hong Kong remains a key gateway into and out of the mainland Chinese economy, and China probably doesn’t want to add HKD instability to its long list of challenges. Note the Chinese demand concerns continuing to weigh on the copper price, which has punched to the lowest reaches of the range since early 2021. This in turn weighs on the Aussie, which itself has punched to new lows for the cycle. The CAD has gotten off easy so far by comparison, perhaps as oil prices remain in the higher range here – but after breaking above resistance, if USDCAD loses its tethering to the 1.3000 area it is in danger of a sharp extension higher. Table: FX Board of G10 and CNH trend evolution and strength.We have noted the euro resilience of late, but signs of this crumbling today as EURUSD, EURCHF and especially EURJPY come under pressure. But the development of note here is the strong revival of the JPY momentum and outright positive trend measurement in recent days. Elsewhere, CAD looks too strong with this backdrop, although there is quite a race to the bottom of late among the weakest horses in G10 FX. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Note EURJPY and CADJPY trying to join other JPY crosses in flipping to the negative side after the sharp JPY rally today. All G10 currency pairs save for a few GBP pairs (due to Brexit-related events) are in the highest 10% of their ATRs of the last 1000 trading days, as shown in the dark orange shading for the ATR readings. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1230 – US Apr. PPI 1230 – US Weekly Initial Jobless Claims 1800 – US 30-year T-Bond auction 1800 – Mexico Overnight Rate Announcement
Bitcoin's Volatility Continues: Failed Breakout and Accumulation Signal Positive Outlook

(BTC) Bitcoins Price Crashes, Could The Nasdaq Be In Recovery Mode?, (GBP/USD) Bullish Market Sentiment For The Pound Sterling Against The USD

Rebecca Duthie Rebecca Duthie 12.05.2022 17:31
Summary: Rising inflation and hawkish reserve banks left investors risk averse. No particular news driving the stock price turn around for the market. Read next: Stock Market Showing Signs Of Slight Recovery Amidst U.S CPI Report Release  Bitcoins prices crashing The price of Bitcoin crashed almost 7% during the trading day on Thursday. The reason for this seems to be the same as what is happening with investors on the wider financial market, investors are turning risk averse and selling off their Bitcoin holdings in the wake of economic insecurity. The current crash is dropped lower than the value during the crash in July 2021. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM The Fed’s increasing interest rates was an initial driver for investor sentiment to change bearish, the increasing interest rates made it more expensive to make bets on the financial markets. Investors are less confident in the ability of cryptocurrencies to hold their value as regulators battle rising inflation. Bitcoin USD Price Chart GBP likely to weaken further According to dailyfx.com, investors are betting on the Pound Sterling to strengthen against the US Dollar. The information the market has right now is that the UK economy is slowing, and likely to enter into a period of stagflation, this will likely cause the value of the GBP to weaken further. The future value of the GBP is not looking too bright. Nasdaq turns around. The Nasdaq has seen poor market performance during the trading week. However, during trading on Thursday, we have seen the stock price for the Nasdaq turn around. According to finance.yahoo.com, there does not seem to be any particular news driving this stock turn around. Nasdaq Price Chart Read next: Tech Stocks Plunging!? Trade Desk Earnings Announcement Pushes Tech Giant Stock Down, Russian Ruble Strengthening and Ford Motor Co.  Sources: slate.com, poundsterlinglive.com, finance.yahoo.com
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

Can British Pound To US Dollar (GBP/USD) Reach 2-year-low? NZD/USD Doesn't Seem To Be Improving And US 100 Sends A Small Recovery Signal

Jing Ren Jing Ren 13.05.2022 07:46
GBPUSD to reach 2-year lows The pound remained under pressure after a slowdown in the UK’s GDP growth in Q1. A break below the lower range (1.2260) of a brief consolidation signalled a bearish continuation. Sterling is heading towards its two-year low at 1.2100. Short-covering could be expected and in conjunction with dip-buying could drive the price up momentarily. 1.2400 is the first resistance and the bulls need to lift the recent high at 1.2640 before they could regain control. Otherwise, the psychological level of 1.2000 would be the next stop. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM NZDUSD grinds lower The New Zealand dollar tumbles as traders continue to pile into safe haven assets. The sell-off accelerated after the pair sank below June 2020’s lows near 0.6400. Downbeat sentiment may attract more trend followers after a faded rebound. 0.6100 near a two-year low would be the next target. 0.6370 is a fresh resistance and the bears may sell into strength at the next bounce. The support-turned-resistance at 0.6450 sits next to the 20-day moving average and is a major level to clear before a reversal could materialise. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM US 100 may see limited bounce The Nasdaq 100 struggles to find bottom as investors continue to flee risk assets. The index sees no sign of stabilisation yet as it approaches 11500. The price action has been capped by a falling trend line from last April. An oversold RSI may prompt sellers to take profit and possibly trigger a mean reversion trade to the upper band (13000) of the line. A break above 12400 may attract enough buying interest to make this happen, but the rebound could be limited unless the bulls succeed in pushing higher. Read next: Binance Academy: Crypto Fear And Greed Index Explained| FXMAG.COM
Crypto Crash Shocked Many, The Most Sensational Bit Was The Terra (LUNA) Plunge. Is (USD) US Dollar's Rally About To End? BP Has Decreased Slightly, So Does GBP/USD. This Week Has Been Full Of Events | Swissquote

Crypto Crash Shocked Many, The Most Sensational Bit Was The Terra (LUNA) Plunge. Is (USD) US Dollar's Rally About To End? BP Has Decreased Slightly, So Does GBP/USD. This Week Has Been Full Of Events | Swissquote

Swissquote Bank Swissquote Bank 13.05.2022 10:35
The dust seems to be settling in cryptocurrencies. Terra and Luna are now worth almost nothing but Bitcoin returned past the $30K, which is a sign that the confidence in the broader sector may have not been damaged as much as we first feared. European stocks opened in the green and US futures are pointing to the upside, yet volatility remains high, warnings that the wind could change direction rapidly, and the high volatility environment is more favourable for further losses than sustainable gains. European gas futures gained another 13% yesterday, and the pressure on energy prices remain clearly tilted to the upside   On the geopolitical front, the Europeans are going around their own sanctions against Russia by opening accounts with Gazprom bank to pay the Russian gas in exchange of rubles (!!), but the latest news suggest that Russia is now cutting the German gas as a retaliation to its sanctions. Of course, the Europeans have been quite bad in this poker game - they showed too openly how scared they were to lose the Russian gas that now, Russia is gaining the upper hand. European gas futures gained another 13% yesterday, and the pressure on energy prices remain clearly tilted to the upside. Saudi Aramco has surpassed Apple in terms of market capitalization this week, to become the world’s most valuable company, and the US dollar index extended gains to a fresh 20-year high. Everyone is now wondering when the dollar rally will end! Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM   Watch the full episode to find out more! 0:00 Intro 0:32 The dust settles in cryptocurrencies 2:22 Market update 3:13 Energy remains upbeat... 4:21 ... and Aramco is now the world's biggest compagny 5:00 High vol hints at further headache 6:34 Meme pop up 7:28 Dollar extends gains, raising bets that it's soon time for correction! Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.
Economic Calendar For July 21st. EUR/USD And GBP/USD - Trading Ideas

(GBP) British pound’s woes continue | Oanda

Kenny Fisher Kenny Fisher 13.05.2022 15:29
The British pound can’t seem to find its footing. GBP/USD hasn’t had a daily winning session since May 4th and closed on Thursday below the 1.22 line, for the first time since May 2020. In the European session, the pound is trading quietly at the 1.22 line. Recession fears, negative growth weighing on sterling The UK treated the markets to a data dump on Thursday, but the news was not positive. UK growth for Q2 showed a 0.8% gain, down sharply from 1.3% in Q4 of 2020 and missing the 1.0% estimate. In March, the economy contracted by 0.1%, compared to a 0.1% gain in February and shy of the estimate of 0.0%. Investors never like to hear the phrase ‘negative growth’ and the March GDP report pushed the pound lower on Thursday.  There was more bad news as Industrial Production, Manufacturing Production and Business Investment all slowed down and posted negative readings. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM The UK continues to grapple with spiralling inflation, and the BoE has warned that things could get even worse. CPI hit 7%  The BoE has raised rates to 1.0%, a 13-year high, but it will take time for higher interest rates to take a bite out of inflation. At last week’s policy meeting, the central bank warned that inflation could top 10% and there was the danger of a recession. The pound tumbled over 2% in response and has fallen another 125 points since then. Risk is tilted to the downside for the pound, which has tumbled about 7% since the beginning of April. Fed’s Powell confirmed by Senate Fed Chair Powell was overwhelmingly nominated for a second term on Thursday by the US Senate. Powell appears committed to delivering 0.50% rate hikes at the next two meetings, although there has been talk of a super-size 0.75% hike in order to curb soaring inflation. US inflation finally slowed in April, but the reading of 8.3% (8.5% prior) was hardly what the markets were looking for, and talk of an “inflation peak” proved to be premature. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM GBP/USD Technical 1.2199 remains under pressure in support. Below, there is support at 1.2056 GBP/USD faces resistance at 1.2272 and 1.2418 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
UK Budget: Short-term positives to be met with medium-term caution

COT Currency Speculators raised British Pound Sterling bearish bets for 10th week

Invest Macro Invest Macro 15.05.2022 14:26
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for this week’s Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday May 10th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar. Highlighting the COT currency data this week was the rise in bearish bets for the British pound sterling currency futures contracts. Pound speculators have raised their bearish bets for a tenth consecutive week this week and for the eleventh time out of the past twelve weeks. Over the past ten-week time-frame, pound bets have dropped by a total of -79,261 contracts, going from -337 net positions on March 1st to a total of -79,598 net positions this week. The deterioration in speculator sentiment has now pushed the pound net position to the most bearish standing of the past one hundred and thirty-seven weeks, dating back to September 24th of 2019. Pound sterling sentiment has been hit by a recent slowing economy as the UK GDP declined by 0.1 percent in March after flat growth in February. Also, weighing on the UK economy is the war in Ukraine that has sharply raised inflation in the country (and elsewhere) and which could see the UK economy with the lowest growth rate among G7 countries in 2023, according to the IMF. Overall, the currencies with higher speculator bets this week were the Euro (22,907 contracts), US Dollar Index (1,705 contracts), Bitcoin (315 contracts) and the Mexican peso (2,102 contracts). The currencies with declining bets were the Japanese yen (-9,660 contracts), Australian dollar (-13,198 contracts), Brazil real (-1,010 contracts), Swiss franc (-1,856 contracts), British pound sterling (-5,785 contracts), New Zealand dollar (-6,386 contracts), Canadian dollar (-14,436 contracts), Russian ruble (-263 contracts) and the Mexican peso (2,102 contracts). Speculator strength standings for each Commodity where strength index is current net position compared to past three years, above 80 is bullish extreme, below 20 is bearish extreme OI Strength = Current Open Interest level compared to last 3 years range Spec Strength = Current Net Speculator level compared to last 3 years range Strength Move = Six week change of Spec Strength Data Snapshot of Forex Market Traders | Columns Legend May-10-2022OIOI-IndexSpec-NetSpec-IndexCom-NetCOM-IndexSmalls-NetSmalls-Index USD Index 57,556 84 34,776 86 -37,174 13 2,398 43 EUR 705,046 84 16,529 40 -43,026 64 26,497 18 GBP 264,594 80 -79,598 17 95,245 86 -15,647 23 JPY 247,278 87 -110,454 1 124,927 97 -14,473 24 CHF 51,282 37 -15,763 40 29,819 69 -14,056 16 CAD 151,009 31 -5,407 38 2,939 67 2,468 35 AUD 153,209 47 -41,714 46 47,126 54 -5,412 39 NZD 56,235 56 -12,996 49 16,874 56 -3,878 7 MXN 153,858 28 16,725 34 -20,866 64 4,141 61 RUB 20,930 4 7,543 31 -7,150 69 -393 24 BRL 61,450 55 40,778 90 -42,031 10 1,253 79 Bitcoin 10,841 57 703 100 -789 0 86 15 Open Interest is the amount of contracts that were live in the marketplace at time of data. US Dollar Index Futures: The US Dollar Index large speculator standing this week came in at a net position of 34,776 contracts in the data reported through Tuesday. This was a weekly lift of 1,705 contracts from the previous week which had a total of 33,071 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 85.8 percent. The commercials are Bearish-Extreme with a score of 12.8 percent and the small traders (not shown in chart) are Bearish with a score of 42.8 percent. US DOLLAR INDEX Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 86.6 3.2 8.6 – Percent of Open Interest Shorts: 26.2 67.8 4.5 – Net Position: 34,776 -37,174 2,398 – Gross Longs: 49,864 1,837 4,970 – Gross Shorts: 15,088 39,011 2,572 – Long to Short Ratio: 3.3 to 1 0.0 to 1 1.9 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 85.8 12.8 42.8 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 6.6 -3.4 -19.3   Euro Currency Futures: The Euro Currency large speculator standing this week came in at a net position of 16,529 contracts in the data reported through Tuesday. This was a weekly increase of 22,907 contracts from the previous week which had a total of -6,378 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 40.1 percent. The commercials are Bullish with a score of 63.8 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 18.3 percent. EURO Currency Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 32.4 53.3 12.0 – Percent of Open Interest Shorts: 30.0 59.4 8.3 – Net Position: 16,529 -43,026 26,497 – Gross Longs: 228,230 376,043 84,921 – Gross Shorts: 211,701 419,069 58,424 – Long to Short Ratio: 1.1 to 1 0.9 to 1 1.5 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 40.1 63.8 18.3 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -1.5 1.2 0.9   British Pound Sterling Futures: The British Pound Sterling large speculator standing this week came in at a net position of -79,598 contracts in the data reported through Tuesday. This was a weekly fall of -5,785 contracts from the previous week which had a total of -73,813 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 16.6 percent. The commercials are Bullish-Extreme with a score of 86.0 percent and the small traders (not shown in chart) are Bearish with a score of 23.2 percent. BRITISH POUND Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 11.1 79.6 7.6 – Percent of Open Interest Shorts: 41.2 43.6 13.5 – Net Position: -79,598 95,245 -15,647 – Gross Longs: 29,469 210,627 20,157 – Gross Shorts: 109,067 115,382 35,804 – Long to Short Ratio: 0.3 to 1 1.8 to 1 0.6 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 16.6 86.0 23.2 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -28.5 25.6 -7.7   Japanese Yen Futures: The Japanese Yen large speculator standing this week came in at a net position of -110,454 contracts in the data reported through Tuesday. This was a weekly decline of -9,660 contracts from the previous week which had a total of -100,794 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.8 percent. The commercials are Bullish-Extreme with a score of 96.6 percent and the small traders (not shown in chart) are Bearish with a score of 24.0 percent. JAPANESE YEN Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 4.5 86.2 8.0 – Percent of Open Interest Shorts: 49.2 35.7 13.9 – Net Position: -110,454 124,927 -14,473 – Gross Longs: 11,196 213,084 19,811 – Gross Shorts: 121,650 88,157 34,284 – Long to Short Ratio: 0.1 to 1 2.4 to 1 0.6 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 0.8 96.6 24.0 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -5.1 0.0 16.7   Swiss Franc Futures: The Swiss Franc large speculator standing this week came in at a net position of -15,763 contracts in the data reported through Tuesday. This was a weekly fall of -1,856 contracts from the previous week which had a total of -13,907 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 39.8 percent. The commercials are Bullish with a score of 69.2 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 15.5 percent. SWISS FRANC Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 9.2 74.6 16.1 – Percent of Open Interest Shorts: 40.0 16.5 43.5 – Net Position: -15,763 29,819 -14,056 – Gross Longs: 4,727 38,258 8,271 – Gross Shorts: 20,490 8,439 22,327 – Long to Short Ratio: 0.2 to 1 4.5 to 1 0.4 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 39.8 69.2 15.5 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -7.7 8.0 -7.6   Canadian Dollar Futures: The Canadian Dollar large speculator standing this week came in at a net position of -5,407 contracts in the data reported through Tuesday. This was a weekly fall of -14,436 contracts from the previous week which had a total of 9,029 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 38.3 percent. The commercials are Bullish with a score of 66.9 percent and the small traders (not shown in chart) are Bearish with a score of 34.7 percent. CANADIAN DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 25.6 49.8 21.8 – Percent of Open Interest Shorts: 29.2 47.9 20.1 – Net Position: -5,407 2,939 2,468 – Gross Longs: 38,679 75,215 32,880 – Gross Shorts: 44,086 72,276 30,412 – Long to Short Ratio: 0.9 to 1 1.0 to 1 1.1 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 38.3 66.9 34.7 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -4.0 14.5 -29.0   Australian Dollar Futures: The Australian Dollar large speculator standing this week came in at a net position of -41,714 contracts in the data reported through Tuesday. This was a weekly decrease of -13,198 contracts from the previous week which had a total of -28,516 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 46.2 percent. The commercials are Bullish with a score of 54.0 percent and the small traders (not shown in chart) are Bearish with a score of 39.2 percent. AUSTRALIAN DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 24.1 59.9 13.1 – Percent of Open Interest Shorts: 51.3 29.1 16.7 – Net Position: -41,714 47,126 -5,412 – Gross Longs: 36,869 91,731 20,131 – Gross Shorts: 78,583 44,605 25,543 – Long to Short Ratio: 0.5 to 1 2.1 to 1 0.8 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 46.2 54.0 39.2 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 7.3 4.7 -34.4   New Zealand Dollar Futures: The New Zealand Dollar large speculator standing this week came in at a net position of -12,996 contracts in the data reported through Tuesday. This was a weekly fall of -6,386 contracts from the previous week which had a total of -6,610 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 49.5 percent. The commercials are Bullish with a score of 56.4 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 7.4 percent. NEW ZEALAND DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 27.0 68.5 3.9 – Percent of Open Interest Shorts: 50.1 38.5 10.8 – Net Position: -12,996 16,874 -3,878 – Gross Longs: 15,203 38,541 2,216 – Gross Shorts: 28,199 21,667 6,094 – Long to Short Ratio: 0.5 to 1 1.8 to 1 0.4 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 49.5 56.4 7.4 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -20.4 26.0 -54.4   Mexican Peso Futures: The Mexican Peso large speculator standing this week came in at a net position of 16,725 contracts in the data reported through Tuesday. This was a weekly advance of 2,102 contracts from the previous week which had a total of 14,623 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 34.5 percent. The commercials are Bullish with a score of 64.1 percent and the small traders (not shown in chart) are Bullish with a score of 60.6 percent. MEXICAN PESO Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 41.5 53.1 4.2 – Percent of Open Interest Shorts: 30.7 66.7 1.5 – Net Position: 16,725 -20,866 4,141 – Gross Longs: 63,921 81,735 6,467 – Gross Shorts: 47,196 102,601 2,326 – Long to Short Ratio: 1.4 to 1 0.8 to 1 2.8 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 34.5 64.1 60.6 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 10.6 -10.1 -3.5   Brazilian Real Futures: The Brazilian Real large speculator standing this week came in at a net position of 40,778 contracts in the data reported through Tuesday. This was a weekly lowering of -1,010 contracts from the previous week which had a total of 41,788 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 90.5 percent. The commercials are Bearish-Extreme with a score of 10.3 percent and the small traders (not shown in chart) are Bullish with a score of 79.4 percent. BRAZIL REAL Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 79.5 15.4 5.0 – Percent of Open Interest Shorts: 13.1 83.8 3.0 – Net Position: 40,778 -42,031 1,253 – Gross Longs: 48,835 9,454 3,070 – Gross Shorts: 8,057 51,485 1,817 – Long to Short Ratio: 6.1 to 1 0.2 to 1 1.7 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 90.5 10.3 79.4 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -1.8 3.5 -20.6   Russian Ruble Futures: The Russian Ruble large speculator standing this week came in at a net position of 7,543 contracts in the data reported through Tuesday. This was a weekly fall of -263 contracts from the previous week which had a total of 7,806 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 31.2 percent. The commercials are Bullish with a score of 69.1 percent and the small traders (not shown in chart) are Bearish with a score of 23.9 percent. RUSSIAN RUBLE Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 36.6 60.6 2.8 – Percent of Open Interest Shorts: 0.5 94.7 4.7 – Net Position: 7,543 -7,150 -393 – Gross Longs: 7,658 12,679 593 – Gross Shorts: 115 19,829 986 – Long to Short Ratio: 66.6 to 1 0.6 to 1 0.6 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 31.2 69.1 23.9 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -15.6 16.7 -18.8   Bitcoin Futures: The Bitcoin large speculator standing this week came in at a net position of 703 contracts in the data reported through Tuesday. This was a weekly gain of 315 contracts from the previous week which had a total of 388 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 100.0 percent. The commercials are Bearish-Extreme with a score of 0.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 14.9 percent. BITCOIN Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 81.1 2.1 9.1 – Percent of Open Interest Shorts: 74.6 9.4 8.3 – Net Position: 703 -789 86 – Gross Longs: 8,789 227 989 – Gross Shorts: 8,086 1,016 903 – Long to Short Ratio: 1.1 to 1 0.2 to 1 1.1 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 100.0 0.0 14.9 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 19.0 -24.9 -13.6   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
British Pound To Japanese Yen (GBP/JPY) Reaches Lower Levels! British Pound (GBP) has been producing some weaker data as of recently and I expect it to continue. | Saul Lokier

British Pound To Japanese Yen (GBP/JPY) Reaches Lower Levels! British Pound (GBP) has been producing some weaker data as of recently and I expect it to continue. | Saul Lokier

Saul Lokier Saul Lokier 16.05.2022 08:02
The BoE have hiked their rates for a 4th time but have signalled there is less to come. A dovish hike and mixed data reports is giving a bearish tone for the currency.  Weekly trade idea on GBP/JPY. Week: 16-20.05.2022 Weaker PMIs and Retail Sales for the GBP. JPY on the other hand has had a recent re-evaluation after the steep runs. Potential profit taking moving the market. Rising rates and the central bank's level of hawkishness could drive stocks lower, therefore driving the JPY higher. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM Key Levels: Resistance 159.00 Support 156.400 Trend GBP/JPY. Bearish Overall trend recently has been to the downside on the pair, I think this trend will continue into the near future and breaking lower lows as it moves. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM Call to Action/Trade Idea Wait for a pullback and a fair value price to enter short on this pair for the short term future.
Risks in the US Banking System: Potential Impacts and Contagion Concerns

How Are USD (US Dollar), (Canadian Dollar) CAD, (Euro) EUR, (British Pound) GBP Doing? | FX Daily: Hold your horses | ING Economics

ING Economics ING Economics 18.05.2022 08:58
The rebound in global equities is fuelling a widespread recovery in G10 pro-cyclical FX against the USD. Still, yesterday's remarks by Jay Powell were a reminder of the very hawkish Fed policy. Ultimately, rate and growth differentials should curb the dollar's weakness against most peers - except for the CAD where today's CPI should endorse more hikes Learn on ING Economics USD: Don't forget the rate and growth factor The rebound in global equities has continued to fuel a recovery in pro-cyclical currencies, and a correction in the safe-haven US dollar and Japanese yen. Overnight, Asian equities were mixed, and the CSI300 failed to follow yesterday’s jump in US-traded Chinese tech stocks following some unusually supportive comments for China’s tech companies from one of Beijing’s top officials, which fuelled speculation of some easing in the current crackdown. Stock index futures suggest a flat open in major Western equity markets today. Clearly, the monetary policy story is playing a secondary role in the market narrative at the moment, but yesterday’s comments by Fed Chair Powell were quite relevant from a signalling perspective, as he firmly reiterated the Fed’s determination to bring inflation sustainably lower, even by hiking beyond the neutral rate if necessary. While the dollar momentum is set to remain weak as long as global assets stay in recovery mode, the notion of aggressive Fed tightening continues to argue against a sustained bearish dollar trend. Incidentally, this week’s moves have likely placed the dollar in a less overbought condition. With this in mind, DXY should find increasing support below the 103.00 area. The US economic calendar includes some housing data today, and Patrick Harker is the only Fed speaker scheduled for remarks. EUR: Upside room starting to shrink EUR/USD has risen in line with other pro-cyclical pairs this week, breaking back above the 1.0500 level and now being at a safe distance from the key 2017-low support of 1.0340, which if breached would probably pave the way for a move towards parity. Today, the eurozone calendar is not busy and only includes the final print of April’s CPI numbers. We’ll also hear from European Central Bank hawk Madis Muller today, although the recent re-pricing higher in ECB rate expectations (markets now fully price in a deposit rate at 1.0% in December) means that the bar for any hawkish surprise is set very high. Our view on the limited downside risk for the dollar beyond the very short term obviously implies that the room for appreciation in EUR/USD should also start to shrink soon. We also believe that markets are pricing in too much tightening by the ECB – though not by the Fed – and expect the theme of growth divergence (exacerbated by the EU-Russia standoff on commodities) to become more relevant into the summer. With this in mind, we suspect that any further rally in EUR/USD may start to lose steam around the 1.0650-1.0700 area, with risks of a return below 1.0500 in the near term being quite material. GBP: Inflation rises, but double digits aren't assured This morning’s inflation report in the UK was broadly in line with consensus expectations, as headline CPI rose to 9.0% (largely due to the increase in the electricity price cap) with the core rate rising to 6.2% year-on-year in April. This means inflation is largely where the Bank of England expects it to be. Still, the BoE projections embed a move to double-digit inflation by the end of the year, a prospect that we are still not convinced will materialise. There are no BoE speakers today. The oversold pound has faced a strong rebound this week, recouping some of its recent sharp losses as global risk appetite improved. While the good GBP momentum may continue as equities find some stability in the coming days, the pound still faces two major downside risks in the coming months: a) a further dovish repricing of BoE rate expectations (the implied rate for end-2022 is still 2.0%); b) Brexit-related risk, as the unilateral suspension by the UK of parts of the Northern Ireland agreement would likely trigger a trade war with the EU. We think cable will mostly trade below the 1.2500 mark during the summer. CAD: Inflation data unlikely to affect BoC policy expectations Inflation data will be released in Canada today, and the market is expecting some signs that the headline rate has peaked (at 6.7% YoY), which would imply a monthly increase of 0.5% in April. Core measures may however continue to inch marginally higher. Barring major surprises in the data today, we suspect that the impact on the Bank of Canada's rate expectations and on the Canadian dollar will be limited. The BoC remains on track to deliver 50bp of rate increases in tandem with the Fed, being able to count on a tight labour market, growing workforce and positive commodity story. In our view, the BoC will ultimately have to deliver more monetary tightening than the Fed in the next year. USD/CAD has broken below 1.2800 and should continue to weaken if we see further signs of stability in global sentiment today. Crucially, the rate and growth differential that may curb EUR/USD don't apply to CAD vs USD given a hawkish BoC and strong growth in Canada, which means that a rally in the loonie should prove more sustainable than the EUR/USD one. We continue to target sub-1.25 levels in USD/CAD by the second half of the year. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Record-breaking but near-peak inflation in Britain

Record-breaking but near-peak inflation in Britain

Alex Kuptsikevich Alex Kuptsikevich 19.05.2022 08:40
UK consumer prices rose by 2.5% in April, the second-biggest monthly gain in the indicator’s history since 1988. Annual inflation jumped from 7% to 9%, unseen in the indicator’s history. Metals, meanwhile, have withdrawn from the highs The longer-established retail price index last saw a high annual growth rate (11.1% y/y in April) in 1982, while such a big monthly jump (3.4% m/m) was last observed in 1980. However, despite the horror that these figures represent, there are still indications that the UK’s peak annual rate of inflation will be much lower than in the 1980s (22%) or 1970s (27%). While Output Producer Prices are showing an acceleration in the annual growth rate, rising to 14%, Input PPI has slowed from 19.2% to 18.6%. Although remaining volatile in recent weeks, oil and gas have regularly retreated from highs, limiting upward pressure on prices. Metals, meanwhile, have withdrawn from the highs. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM Early hints that UK inflation may be slowing in the coming months may allow the Bank of England to raise the rate by 25 points At the same time, there are growing questions about final global demand, which will constrain producers in shifting costs to consumers. Early hints that UK inflation may be slowing in the coming months may allow the Bank of England to raise the rate by 25 points at its next meeting in mid-June and not copy the Fed’s 50-point move. This is moderately negative news for the British currency, which started to retreat from the $1.25 area on the data after a 2.9% rally from last Friday’s lows. Short-term traders should pay particular attention to the 1.2350 area. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM Already, a dip lower this week would suggest that the brief period of recharging dollar bulls has ended. In this case, GBPUSD could quickly fall below 1.2000, making the 1.1500 area a potential ultimate target for this attack Follow FXMAG.COM on Google News
Agriculture: Russia's Exit from Black Sea Grain Deal Impacts Grain Prices

FX Daily: Dollar rally pauses for breath | ING Economics

ING Economics ING Economics 20.05.2022 10:57
Some support measures for the Chinese economy and some stability in the Chinese renminbi have helped usher in a period of consolidation in FX markets. This may well last into next week, although we would consider this a pause not a reversal in the dollar's bull trend. The stronger dollar is also exporting Fed hikes around the world Not until the Fed pours cold water on tightening expectations should the dollar build a top USD: Some consolidation is in order The dollar is now about 2% off its highs seen late last week. Driving that move has probably been some position liquidation and a preference for currencies like the Japanese yen (JPY) and the Swiss franc (CHF) during turbulent times in global equity markets. In fact, yesterday's FX activity looked like the big sell-off in EUR/CHF on Swiss National Bank (SNB) comments which triggered downside stops in USD/CHF and prompted a slightly broader dollar adjustment. Also helping this period of consolidation has been this week's stability in the Chinese renminbi (CNY). The overnight 15bp cut in the 5-year Loan Prime Rate – aimed at supporting the property sector – has instilled a little more confidence in Chinese assets markets. However, we cannot see USD/CNY heading straight back to 6.50. Instead, a 6.65-6.80 trading range may be developing after the recent CNY devaluation.  However, the emerging market environment still looks challenged given that the stronger dollar is effectively exporting tighter Fed policy around the world. Yesterday we saw rate hikes in Egypt, South Africa, and the Philippines. After devaluing the Egyptian pound by 15% in March, authorities there are very much struggling with the external environment. This has seen Egypt's 5-year Sovereign Credit Default swap rise to news highs of 940bp and is a reminder of the challenge North Africa faces from surging food prices. For today, the data calendar is relatively quiet and there may be some interest in what G7 finance ministers and central bank governors have to say after their meeting in Bonn. Reports suggest Japan would like some tweaks to the final G7 communique, but we very much doubt there will be any change in the core FX language that FX rates be market-determined and that excessive volatility and disorderly moves be avoided. DXY could correct a little lower to 102.30, but we see this as bull market consolidation, rather than top-building activity. Not until the Fed pours cold water on tightening expectations should the dollar build a top. And yesterday Fed hawk, Esther George, said that even this 'rough week' in equity markets would not blow the Fed off course.  EUR: ECB hawks in control Minutes of the April ECB meeting released yesterday show that the hawks are calling the shots. The market now prices a 31/32bp ECB rate hike at the 21 July ECB meeting – pricing which has plenty of scope to bounce between +25bp and +50bp over the next two months. This could drag EUR/USD back to the 1.0650/70 area over the coming days – helped by brief periods of calm in the external environment – but as above we would see this as a bear market bounce. Our core EUR/USD view for 2H22 is one of heightened volatility and probably EUR/USD getting close to parity in 3Q22 when expectations of the Fed tightening cycle could be at their zenith. Read next: Altcoins: What Is PancakeSwap (CAKE)? A Deeper Look Into The PancakeSwap Platform| FXMAG.COM GBP: April retail sales provide a reprieve UK retail sales have come in a little better than expected and break/suspend the narrative that the cost of living squeeze is large enough to derail the Bank of England tightening cycle. We would not get carried away with the sterling recovery, however. Sterling is showing a high correlation with risk assets – trading as a growth currency – and the outlook for risk assets will remain challenging for the next three to six months probably. Here's what our credit strategy team thinks of the European outlook.  Cable may struggle to breach the 1.2500/2550 area and 1.20 levels are very possible over the coming months. New-found hawkishness at the ECB means that EUR/GBP may struggle to sustain a move below 0.8450 before returning to 0.8600. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM CHF: SNB policy makes the case for EUR/CHF sub 1.00 next year As we discuss in an article released yesterday, it looks like the SNB is targeting a stable real exchange rate to fight inflation. Given that Switzerland's inflation is roughly 4% lower than key trading partners, a stable real exchange rate means that the nominal exchange rate needs to be 4% stronger. This will be an added factor supporting the CHF over the coming months and may start to generate interest in trades positioning for a lower GBP/CHF. 1.2080 is a big support level but 1.1860 looks like the near-term target. Read this article on THINK TagsGBP FX Daily ECB CHF Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Sustainability-Linked Products: Navigating Growth and Challenges for the Future

British Pound (GBP) yawns on mixed retail sales | Oanda

Kenny Fisher Kenny Fisher 20.05.2022 12:03
The British pound is drifting on Friday, after showing unusually strong volatility this week. The pound rebounded on Thursday, racking up gains of 1.06% and briefly breaking above the symbolic 1.25 line. UK retail sales showed a strong gain in April, with a gain of 1.4% MoM. This followed a decline of 1.2% in March. However, on a yearly basis, sales volumes were 4.9% lower, as the broader picture looks grim. The monthly gain for March may have been a blip, as consumers were hit with higher household energy costs as well as an increase in taxes. Add into the mix inflation at 9.0% and possibly heading into double-digits, and it’s difficult to envision retail sales moving higher. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM Consumer confidence hits record low The GfK consumer confidence index remains deep in negative territory. The index dropped to -40 in May, down from -38 in April. How pessimistic are consumers about the economy? The previous record of -39 was set in July 2008, at the height of the global financial crisis.  Consumer confidence is considered an early, reliable signal of economic activity, and these massively poor numbers could well indicate that the UK economy is falling into recession. A GfK note summed up the grim situation, saying that the BoE is pessimistic about inflation, consumer confidence is gloomy, and there aren’t any reasons for optimism anytime soon. This certainly does not bode well for the British pound, which has plunged over 7% since the start of the year. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM The BoE finds itself playing catch-up with the inflation curve. There have been voices calling for more aggressive rate hikes than the 25-bps increments we’ve seen over the past three meetings, especially with inflation hitting 9%. The central bank has a daunting challenge, as it must raise rates to curb inflation but also needs to be mindful that the economy is still recovering from Covid and could tip into a recession due to high interest rates. GBP/USD Technical 1.2393 has switched back to support. Below, there is support at 1.2275 There is resistance at 1.2525 and 1.2643   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Forex News: GBPUSD breakout watch.

Forex News: GBPUSD breakout watch.

8 eightcap 8 eightcap 23.05.2022 07:30
Risk majors followed up their fightback last Friday with more solid gains into Monday’s session. The AUD has seen solid gains after the weekend’s Federal election, which saw a change of government. The EUR hasn’t seen those two gains but has still beat last week’s high. The breakout above last week’s high drew our attention to the GBPUSD today. This, for now, looks like a new continuation higher and maintains the new fast uptrend that we have seen form since buyers broke the last fast downtrend. We can also see a V reversal pattern forming, which is good to see in new emerging fast trends. Looking forward, we can see price moving into a supply area, and a break of the upper range would be a solid sign to continue the bull’s case. Above that, if buyers can maintain the move, we will be looking to the orange box that lines up with the medium-term trend line and if buyers can beat that area. Later today, BOE Governor Baily will speak at 12:15 am AEST GBPUSD D1 chart The post Forex News: GBPUSD breakout watch. appeared first on Eightcap.
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

Will Pound (GBP) Strengthen? Ebury Weekly Analysis: British Pound (GBP) | Ebury

Matthew Ryan Matthew Ryan 23.05.2022 15:16
Last week saw some strange market action. Financial headlines were dominated by the relentless sell-off in world equity markets that left the S&P 500 index flirting with the semi-official bear market line of 20% below its record high. Among G10 currencies, the Swiss franc notched a rare win as the flight to safety bid combined with a hawkish central bank to send it soaring by over 2% against the US dollar. More surprising was the general weakness in the US dollar, which failed to benefit from its safe-haven role. In fact, the winners of the week were Latin American currencies, which is particularly impressive in the current risk averse environment. As long standing LatAm bulls, we are not complaining, however.  Learn more on Ebury This week the focus will be on any spillovers from the volatility in stock markets to the FX market, on one hand, and the PMIs of business activity on the other. The Eurozone and UK indices are all expected to print well above 55.nWe think that these levels belie the fears of recession that appear to be gripping asset markets. It is difficult to reconcile still massively negative real rates, huge government deficits and economies at full employment with any sustained economic pullback. Figure 1: G10 FX Performance Tracker [base: USD] (1 week) Source: Refinitiv Datastream Date: 23/05/2022 British Pound (GBP) Data out of the UK continued to suggest a dichotomy between sentiment and reality. Consumer sentiment was dismal, but jobs data came out very strong, as did retail sales. Inflation in April was sky high, as expected. Sterling bounced back in line with the general dollar selloff and managed some gains against the euro as well. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM We think there is little to suggest a recession is likely, and this week’s PMI data should be further evidence. It seems that the Bank of England’s apparent willingness to tolerate inflation due to the risks to growth is misplaced. In the short-term, Bank of England dovishness may weigh on the pound, but after the recent sell-off we think that the currency is quite cheap and offers a solid opportunity over the longer term. Figure 2: UK Inflation Rate (2017 – 2022) Source: Refinitiv Datastream Date: 23/05/2022
End Of US Dollar (USD) Rally!? How Is The Dollar Index? Is S&P 500 (SPX) Going To Recover? (EUR/USD) Euro Seems To Be Stronger Recently! EUR/GBP Keeps Fluctuating | Luke Suddards (Pepperstone)

End Of US Dollar (USD) Rally!? How Is The Dollar Index? Is S&P 500 (SPX) Going To Recover? (EUR/USD) Euro Seems To Be Stronger Recently! EUR/GBP Keeps Fluctuating | Luke Suddards (Pepperstone)

Luke Suddards Luke Suddards 24.05.2022 12:07
Every Tuesday our Global Macro Strategist Luke Suddards will be analysing the charts of key global asset classes such as FX, commodities and more. Catch him on Twitter - @lukesuddards Also, he produces The Weekly Close Out every Friday, which provides key insights into the main catalysts for all the major global macro assets throughout the week. The analysis takes a hybrid approach - combining fundamental and technical analysis with charts to enhance your trading experience. Sign up here to receive it directly in your inbox: https://cloud.go.pepperstone.com/week ➡️ Follow us on Telegram for daily market news and insights: https://t.me/s/PepperstoneFX Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM Follow FXMAG.COM on Google News
Week Ahead: US Dollar Falls As Growth Fears Rise on Fed Hawkishness

Week Ahead: US Dollar Falls As Growth Fears Rise on Fed Hawkishness

OneRoyal Market Updates OneRoyal Market Updates 23.05.2022 08:24
Weekly Recap The main story this week was the reversal lower in the US Dollar. The Dollar Index closed out its first losing week since the final week of March as recession fears took hold. The reversal was seemingly fuelled by comments from Fed chairman Powell midweek suggesting a more aggressive course of action from the Fed. Powell warned that the central bank is prepared to raise rates above the neutral level, if necessary, to bring inflation down and will not stop until inflation is back at target. With inflation still at elevated levels and with interest rates higher and expected to rise materially in coming months, traders are concerned over the impact on growth. These fears were well reflected this week in the sharp reversal lower in USD. UK inflation was seen hitting 40-year highs last month at 9%, putting BOE rate hike expectations back into focus. The SNB was seen making a U-turn on monetary policy with SNB chairman Jordan warning that the SNB is ready to act on inflation, which is travelling well above the SNB’s target. The release of the ECB meeting minutes this week highlighted the hawkish shift taking place among members, with the market now increasingly pricing in a July rate hike. It was a volatile week for equities with the FTSE ending the week roughly flat (as of writing) after plenty of two-way action. The ASX200, the DAX and the Nikkei ended the week higher while the S&P and the Nasdaq were firmly in the red as Fed rate-hike expectations overtook USD weakness. It was a better week for precious metals with both gold and silver rallying on USD weakness. Oil prices were unable to capitalise on USD weakness, however, as focus remains on the ongoing EU negotiations regarding potential sanctions on Russian oil. While many EU leaders are pushing for an EU-wide ban on Russian oil by year end, the chances of achieving this look unlikely given fierce opposition from Hungary and Greece among others. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM Coming Up Next Week US, Eurozone, UK PMIs Traders will get the latest insight into the performance of the factory and non-factory sectors in the US, eurozone and UK. With inflation surging in all three economies and with supply-chain issues remaining a real problem there is a very real threat that these readings highlight weakness. Given the recessionary concerns which have taken centre stage recently, if these readings underperform asset markets are likely to come under pressure over the week. RBNZ Rate decision The RBNZ meeting this week is expected to see the bank hike rates by a further .5%. 20 out of 21 economists polled by Reuters are calling for such a move. Given these hawkish expectations, if the bank hikes by less than .5% NZD will likely come under heavy selling pressure. If a .5% hike is announced, the focus will then be on forward guidance with NZD likely to rally if the RBNZ points to further hikes incoming. FOMC Meeting Minutes The May FOMC minutes this week are expected to highlight the uptick in Fed hawkishness recently. There’s potentially some reduced impact in the wake of recent comments from Fed’s Powell suggesting that the Fed has turned more aggressively hawkish since that meeting. Nonetheless, the details are likely to be firmly hawkish and market volatility can be expected in response to them. Forex Heat Map Coming up This Week Technical Analysis Our favourite chart this week is GBPCHF GBPCHF has been moving lower in a well-defined channel over the correction from 2021 highs. Recently price has been underpinned by support along the 1.2114 level. This has been a major support area since late last year. If price can breach below this level on a weekly closing basis, this would suggest a continuation of the downtrend towards the next big support at the 1.1687 level. Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM Economic Calendar – High Impact Another busy data week coming up, key highlights include: US, eurozone and UK PMI readings on Tuesday, US GDP on Thursday and US trade data on Friday. See the calendar below for full schedule.
Eurozone Bank Lending Under Strain as Higher Rates Bite

What's The Future Of British Pound (GBP)? Stocks: Snap Has Fallen! How Far Will New Zealand Dollar Go!? | Least worst choices | Oanda

Jeffrey Halley Jeffrey Halley 25.05.2022 11:05
RBNZ hikes by 50-bps The Reserve Bank of New Zealand has raised policy rates by 0.50% to 2.0% this morning, with Governor Orr setting a hawkish tone in the press conference afterwards. In the statement itself, the RBNZ’s “least worst choices” policy seemed to imply that although external risks remained, the domestic economy was strong and could tolerate tighter monetary conditions. Mr Orr seemed to be saying much the same, suggesting that terminal rates could go above 3.0% and would get there sooner, rather than later. We’ll see just how strong the New Zealand economy is in due course, but a hawkish RBNZ has seen the New Zealand dollar rally by 0.70% to 0.6505 today, making it the biggest currency gainer in Asia today. Elsewhere, Singapore’s GDP growth came in tight on expectations, rising by 3.70% YoY for Q1. With inflation data yesterday also less worse than expected, expectations for another unscheduled tightening by the Monetary Authority of Singapore have receded for now. That may bring some relief to the Malaysian ringgit, which has fallen to 3.20 against the Singapore dollar. Snap Has Fallen In Malaysia itself, Inflation data for April continues to remain benign as domestic demand stays subdued. Inflation YoY rose by just 2.30% and will leave Bank Negara, like Bank Indonesia yesterday, in no hurry to tighten monetary policy. Ominously though, the Malaysian ringgit has shown no strength versus the US dollar. USD/MYR remains at recent highs at 4.4000 even as the greenback is experiencing an extended bull market correction versus the G-10 and EMFX elsewhere. If the US dollar turns higher once again, and the MYR resumes its sell-off, Bank Negara’s hand might be forced. Overnight, the recession word weighed on stock markets once again. European PMI data was a mixed bag. Manufacturing PMIs held steady, while Services PMIs fell as consumer demand takes a hit from the rise in the cost of living. That wasn’t enough to stop the euro rally, powered by suddenly hawkish ECB heavyweights. Bank of England, has already signalled a white flag on bringing down inflation The picture was rather grimmer in the United Kingdom where the most honest central bank in the world, the Bank of England, has already signalled a white flag on bringing down inflation and pencilled in a recession next year. UK Manufacturing PMI held steady at 54.6, but Services PMIs plummeted to 51.8. The UK is facing a winter of discontent as the cost of living soars, with the railways RMT union voting to strike over pay negotiations. Expect more of this going forward. Additionally, the Chancellor is apparently preparing to widen the scope of the windfall tax on energy companies, probably to help pay for his cost of living mini-budget. UK stock markets didn’t like that. Finally, the “party gate” report on those lockdown wine frenzies in the No 10 garden is due for release today, potentially putting more pressure on PM Johnson’s leadership. ​ Little surprise that the sterling slumped versus the euro and the US dollar overnight. In the United States, the recession world hit particularly hard after the Snap Inc. induced meltdown by Nasdaq stocks overnight. US New Home Sales plummeted to 591,000 in April, while Richmond Fed Manufacturing slumped to -9 in May. The S&P Global Services Flash PMI for May fell to 53.5, with Flash Manufacturing easing to 57.5. It was the new home sales that really frightened the street, though, as house building, and its ancillary services and suppliers are a good chunk of US domestic GDP. Soaring mortgage interest rates and petrol prices appear to be doing a lot of the Fed’s work for it before it even gets started. Read next: (TRX) TRON USD Decentralised Blockchain Platform That Focuses On Entertainment And Content Sharing. Altcoins: A Deep Look Into The TRON Network | FXMAG.COM If there is one takeout from all of this for me, it is that rising inflation and borrowing rates are already crimping the demand side of the equation. Unfortunately, we are seeing very little sign of price pressures reducing due to a combination of factors, all of which have been thrashed to death here and in research everywhere. The uncomfortable reality is that central banks are going to be forced to continue the tightening path, even as growth slows around the world, because inflation has proven sticky and not transitory. That is the least worst choice central banks need to make in a stagflationary environment. I am asked every day if we have seen the low in the equity market sell-off. Hopefully, I have answered the question. US President Joe Biden’s trip around Asia continues Finally, US President Joe Biden’s trip around Asia continues. Unfortunately, with its emphasis on containing China and hawking a trade agreement empty of potential access to the US domestic market (Congress needs to approve that), the trip is not going to make much headway in re-establishing US leadership in the region. Asia really needs to see the colour of America’s money. Furthermore, the reliability of the US as a partner has taken a further hit today, with White House officials explicitly refusing to rule out the possibility that the US could enact crude oil export restrictions to help cap energy prices domestically. The US doesn’t have a crude oil problem, it has a refining and transportation problem, but let’s not let facts get in the way. I have warned about food nationalism previously, but if President Biden prioritises November’s mid-term elections over the economic war with Russia, and supporting Europe, it really is every man for himself globally. I can’t see that being positive for equities anywhere, or European asset markets full stop, or for Ukraine. Only the Kremlin is likely to be popping champagne as the US does Russia’s divide and conquer for them. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Follow FXMAG.COM on Google News
Steel majors invest in green steel, but change might be driven by contenders

EUR Falls To US Dollar (EUR/USD), Pound Sterling Due To Weaken As UK Recession Looms (EUR/GBP), Market Awaits Fed Meeting Minutes (USD/CHF, GBP/USD)

Rebecca Duthie Rebecca Duthie 25.05.2022 18:27
Summary: EU PPI inflation data caused the Euro to weaken on Wednesday. Investor sentiment looks poor towards the GBP going into summer. Pound Sterling recovers against the US Dollar. Read next: Hawkish ECB Bodes Well For The Euro, UK PMI Data Disappoints (EUR/GBP), Hawkish SNB Offers Swiss Franc Still Support (USD/CHF), AUD/JPY - Good Morning Forex!  A rise in PPI inflation data causes Euro weaken Market sentiment is reflecting mixed signals for this currency pair. Looking at the value of the Euro in terms of PPI and CPI data: the rise in PPI inflation in the euro area reduced the Euros fair value estimate, whereas the European CPI inflation data remains close to that of the US CPI inflation. Therefore, it is the release of PPI inflation data that has caused the Euro to lose more than 0.6% to the US Dollar on Wednesday. EUR/USD Price Chart GBP weakens as concerns of a recession looms The market is reflecting mixed market sentiment for this currency pair. Investors expect the Pound Sterling to have a tough summer period. The slowing UK economy and disappointing PMI data are both aspects that will likely cause the GBP to weaken not only against the Euro but against other currencies too. The market is defaulting to buying Euros and selling Great British Pounds in the wake of changing European Central Bank (ECB) policy. EUR/GBP Price Chart Swiss Franc The market sentiment for this currency pair is reflecting mixed market signals. During the trading week last week, the US Dollar weakened against the Swiss Franc due to the hawkish attitude shown by the Swiss National Bank (SNB) and investors desire for safe-haven assets. This sentiment has continued into the current trading week. USD/CHF Price Chart GBP recovers against the USD The GBP strengthened against the US Dollar on Wednesday as the market awaited the Federal Reserve’s latest meeting minutes. Investors are eager to see how aggressively the Fed will raise interest rates going forward in an attempt to tackle rising inflation. Investor sentiment is negative toward the US Dollar at the moment, which has given some currencies, such as the GBP, an opportunity to recover. The market sentiment for this currency pair is reflecting bullish signals. GBP/USD Price Chart Read next: ECB Offering The Euro Support (EUR/USD), Strengthening Of The Renminbi Supporting The EUR and GBP, SNB Turns Hawkish (EUR/CHF) - Good Morning Forex!  Sources: finance.yahoo.com, poundsterlinglive.com, dailyfx.com
GBP/USD Analysis: GBP Maintains Growth Momentum, Market Awaits US Inflation Report

FTSE 100 Index Rises Thanks To Shell and BP Stocks, British Pound (GBP) Weakens After Thursday Morning Strengthen

Rebecca Duthie Rebecca Duthie 26.05.2022 21:17
Summary: Oil Giants are required to pay more taxes on profits. The BoE is put under more pressure FTSE 100 rises with BP and Shell stocks On Thursday oil giants Shell and BP were informed they would be required to pay 25% extra taxes on their profits from the North Sea. Investors did not seem to lose interest in these stocks despite this news, the share prices of both these companies rose. The Chancellor also announced there would be an extra tax incentive to invest in pumping up more oil and gas. Therefore it is possible that the oil giants can avoid almost their entire tax bill. FTSE 100 Price Chart GBP Weakens after its rally on Thursday morning On Thursday Chancellor Rushi Sunak announced that more than 8 million households would receive a lump sum of GBP650.00 in an attempt to try to fend off the cost of living crisis. The Chancellor also announced there would be a GBP15 billion spending boost. The move will put the Bank of England (BoE) under more pressure going forward, possibly forcing the BoE to raise interest rates even more. The Pound Sterling faces negative market sentiment in the wake of this news as the likelihood of a recession looms closer. Read next: FOMC Meeting Minutes Offer Support To The US Dollar (EUR/USD), Improved Market Attitude Favoured The GBP On Thursday (EUR/GBP, GBP/USD), Market Awaits RBA Monetary Policy  Follow FXMAG.COM on Google News Sources: finance.yahoo.com, poundsterlinglive.com
The Japanese Yen Retreats as USD/JPY Gains Momentum

Dow Jones Enters The Weekend On A High, Pound Sterling Strengthens

Rebecca Duthie Rebecca Duthie 30.05.2022 12:00
Summary: Dow Jones industrial gains on Friday. GBP reacts well to Sunak’s stimulus package Read next: (COST) Costco Beats Market Expectations  DJIA sees relief on Friday The Dow 30 rose on Friday as signs of peaking inflation and consumer resilience instilled investor confidence entering the long weekend, backing positive attitudes towards tightening monetary policy. Investors may be leaning toward the Fed tightening monetary policy without tipping the US economy into a recession. The Dow Jones benefited from this market sentiment. Data released on Friday indicated that consumer spending exceeded market expectations and drove the DJIA upwards, which drove investor confidence higher. DJIA Price Chart Pound Sterling reacts well to Sunak’s announcement The GBP may have stabilised in the wake of Sunak´s announcement of a stimulus package, however, concerns that the UK economy is heading into a recession still looms. The stimulus to try and save the UK economy may be short lived, what the greater impact will be on the UK economy is still a concern going forward. Sources: finance.yahoo.com, poundsterlinglive.com
Unlocking the Future: Key UK Wage Data and September BoE Rate Hike Prospects

S&P 500 Sees Good Start To The Week, UK Economy Not Performing As Well As Its Major Economy Counter Parts

Rebecca Duthie Rebecca Duthie 30.05.2022 20:23
Summary: S&P 500 makes up for May losses. The Pound sterling hasn't had a great run lately especially because the UK economy isn't performing as well as its major economy counter-parts. Read next: Strong Investor Sentiment Toward The Euro Continues (EUR/USD), EUR/GBP Currency Pair, As China Ease Lockdowns The AUD Outlook Seems Positive (GBP/AUD, AUD/USD)  The S&P 500 gained almost 2.5% on Monday On Monday the S&P 500 gained back its May losses and broke its seven week losing streak, as institutional investors chose to balance their portfolios again to the end of the month. Luxury stocks seemed to be the top performers today in the wake of improved investor sentiment as China begins easing lockdowns. GSPC Price Chart Pound Sterling under pressure As the cost of borrowing increases, a cost-of-living crisis, the reality of lower productivity and inflation at 40 year highs, all of these factors mentioned are putting the Pound sterling under pressure. The reality of a looming recession keeping investors on their toes. A source on bloomberg predicts that the UK economy could shrink by 0.4% this quarter. The Pound sterling hasn't had a great run lately especially because the UK economy isn't performing as well as its major economy counter-parts. Sources: investors.com, bloomberg.com, finance.yahoo.com
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

Russian Oil Embargo Decision Weighs on The Euro (EUR/USD, EUR/GBP), Australian GDP Data Released On Wednesday Exceeds Market Expectations (AUD/USD), Pound Sterling Takes Advantage Of The Weaker USD (GBP/USD)

Rebecca Duthie Rebecca Duthie 01.06.2022 15:09
Summary: The Euro has lost slightly to the US Dollar on Wednesday. EUR/GBP reflecting bearish signals. AUD outperforms on Wednesday. Pound Sterling taking advantage of the weaker USD Expectations of a hawkish ECB remain Market sentiment for this currency pair is reflecting mixed signals. The Euro has lost slightly to the US Dollar on Wednesday in the wake of the European Union (EU) reaching a decision on the Russian oil embargo on Tuesday. The embargo has heightened investors' fears that there may be further downward growth in the eurozone. The EU PMI economic data released on Wednesday exceeded market expectations maintaining an expansionary stance. In addition, the expectation of a hawkish European Central Bank (ECB) turning hawkish in the third quarter of the year remains. EUR/USD Price Chart Investor sentiment towards the Euro has slipped The market sentiment for this currency pair is reflecting bearish signals. In the wake of the European Union reaching a decision regarding the Russian oil embargo, investor sentiment toward the euro has slipped. In conjunction, investor sentiment toward the pound sterling has strengthened. EUR/GBP Price Chart AUD is Wednesdays best performing currency Market sentiment is reflecting bullish signals for this currency pair. The Australian Dollar may have outperformed the US Dollar on Wednesday, but future policies from both the central banks could impact this currency pair. Reserve Bank of Australia (RBA) GDP data released on Wednesday exceeded market expectations, making it Wednesdays best performing currency. AUD/USD Price Chart Pound Sterling taking advantage of the weaker USD Market sentiment is reflecting bullish signals for this currency pair. The pound sterling has taken advantage of the weakening USD over the past couple weeks in the wake of recession concerns. GBP/USD Price Chart Sources: finance.yahoo.com, dailyfx.com, poundsterlinglive.com
Energy and Metals Decline, Wheat Rallies Amid Disappointing Chinese Growth

Supporting EUR, USD And Others - What Is Interest Rate? What Is A Negative Interest Rate | Binance Academy

Binance Academy Binance Academy 01.06.2022 16:55
TL;DR It doesn’t make much sense to lend money for free. If Alice wants to borrow $10,000 from Bob, Bob will need a financial incentive to loan it to her. That incentive comes in the form of interest – a kind of fee that gets added on top of the amount Alice borrows. Interest rates profoundly impact the broader economy, as raising or lowering them greatly affects people’s behavior. Broadly speaking: Higher interest rates make it attractive to save money because banks pay you more for storing your money with them. It’s less attractive to borrow money because you need to pay higher amounts on the credit you take out. Lower interest rates make it attractive to borrow and spend money – your money doesn’t make much by sitting idle. What’s more, you don’t need to pay huge amounts on top of what you borrow. Learn more on Binance.com Introduction As we’ve seen in How Does the Economy Work?, credit plays a vital role in the global economy. In essence, it’s a lubricant for financial transactions – individuals can leverage capital that they don’t have available and repay it at a later date. Businesses can use credit to purchase resources, use those resources to turn a profit, then pay the lender. A consumer can take out a loan to purchase goods, then return the loan in smaller increments over time. Of course, there needs to be a financial incentive for a lender to offer credit in the first place. Often, they’ll charge interest. In this article, we’ll take a dive into interest rates and how they work.   What is an interest rate? Interest is a payment owed to a lender by a borrower. If Alice borrows money from Bob, Bob might say you can have this $10,000, but it comes with 5% interest. What that means is that Alice will need to pay back the original $10,000 (the principal) plus 5% of that sum by the end of the period. Her total repayment to Bob is, therefore, $10,500. So, an interest rate is a percentage of interest owed per period. If it’s 5% per year, then Alice would owe $10,500 in the first year. From there, you might have: a simple interest rate – subsequent years incur 5% of the principal or  a compounded interest rate – 5% of the $10,500 in the first year, then 5% of $10,500 + $525 = $11,025 in the second year, and so on.   Why are interest rates important? Unless you transact exclusively in cryptocurrencies, cash, and gold coins, interest rates affect you, like most others. Even if you somehow found a way to pay for everything in Dogecoin, you’d still feel their effects because of their significance within the economy. Take a commercial bank – their whole business model (fractional reserve banking) revolves around borrowing and lending money. When you deposit money, you’re acting as a lender. You receive interest from the bank because they lend your funds to other people. In contrast, when you borrow money, you pay interest to the bank. Commercial banks don’t have much flexibility when it comes to setting the interest rates – that’s up to entities called central banks. Think of the US Federal Reserve, the People’s Bank of China, or the Bank of England. Their job is to tinker with the economy to keep it healthy. One function they perform to these ends is raising or lowering interest rates. Think about it: if interest rates are high, then you’ll receive more interest for loaning your money. On the flip side, it’ll be more expensive for you to borrow, since you’ll owe more. Conversely, it isn’t very profitable to lend when interest rates are low, but it becomes attractive to borrow. Ultimately, these measures control the behavior of consumers. Lowering interest rates is generally done to stimulate spending in times when it has slowed, as it encourages individuals and businesses to borrow. Then, with more credit available, they’ll hopefully go and spend it. Lowering interest rates might be a good short-term move to rejuvenate the economy, but it also causes inflation. There’s more credit available, but the amount of resources remains the same. In other words, the demand for goods increases, but the supply doesn’t. Naturally, prices begin to rise until an equilibrium is reached. At that point, high interest rates can serve as a countermeasure. Setting them high cuts the amount of circulating credit, since everyone begins to repay their debts. Because banks offer generous rates at this stage, individuals will instead save their money to earn interest. With less demand for goods, inflation decreases – but economic growth slows.   ➟ Looking to get started with cryptocurrency? Buy Bitcoin on Binance!   What is a negative interest rate? Often, economists and pundits speak of negative interest rates. As you can imagine, these are sub-zero rates that require you to pay to lend money – or even to store it at a bank. By extension, it makes it costly for banks to lend. Indeed, it even makes it costly to save. This may seem like an insane concept. After all, the lender is the one assuming the risk that the borrower may not repay the loan. Why should they pay?  This is perhaps why negative interest rates are something of a last resort to fix struggling economies. The idea comes from a fear that individuals may prefer to hold onto their money during an economic downturn, preferring to wait until it recovers to engage in any economic activity.  When rates are negative, this behavior doesn’t make sense – borrowing and spending appear to be the most sensible choices. This is why negative interest rates are considered to be a valid measure by some, under extraordinary economic conditions.   Closing thoughts On the surface, interest rates appear to be a relatively straightforward concept to grasp.  Nevertheless, they’re an integral part of modern economies – as we’ve seen, adjusting them can fundamentally alter the behavior of individuals and businesses. This is why central banks take such a proactive role in using them to keep nations’ economies on track. Do you have more questions about interest rates and the economy? Check out our Q&A platform, Ask Academy, where the Binance community will answer your questions.
Market Trends and Currency Positioning: USD Net Short Position, Euro and Pound Analysis - 22.08.2023

Saudi Arabia Indicates Plans To Increase Their Oil Output (EUR/USD), ECB Plans To Start Tightening Monetary Policy Still Set For July (EUR/GBP), (USD/JPY, USD/CHF)

Rebecca Duthie Rebecca Duthie 03.06.2022 13:37
Summary: OPECs plans to increase their oil output favours the Euro. ECBs window for tightening monetary policy seems to be narrowing. The market is reflecting mixed sentiment for the USD/CHF currency pair. Read next: The Euro Opened Strong On Wednesday Against The US Dollar (EUR/USD), Euro Could Continue Gaining On The GBP (EUR/GBP), Australia’s Trade Balance Beats Market Expectations (AUD/USD),   German PMI declined for the 3rd month in a row The market is reflecting bullish signals for this currency pair. The US Dollar weakened overnight in the wake of data that showed US payroll rose less than expected in May. The European Union finalised the ban on Russian seaborne oil, with the hope of reaching a 90% decline in imports by the end of 2022. Oil prices rose in the wake of this news, however OPEC indicated its plans to compensate their western allies for the oil lost through the embargo. In addition, the German PMI fell for the third consecutive month. EUR/USD Price Chart Post-lockdown growth is slowing in even the largest EU economy. The market is reflecting bullish signals for this currency pair. With German PMI declining for the third consecutive month, rising stagflation and a pessimistic economic outlook within the European Union. Hence, the European Central Banks (ECB) window for tightening monetary policy seems to be narrowing. Originally plans for increasing rates were to begin in the third quarter of this year, however, given the current circumstances, it could be justified to start earlier than originally planned. Although it may be justified, it is unlikely given the ECB president has tried to set out the EU monetary policy plan from the start, despite increased pressure. EUR/GBP Price Chart USD/CHF Reflecting mixed signals The market is reflecting mixed sentiment for this currency pair. The expectation for the month of June for this currency pair is bearish, the US Dollar may be weakening, however, this forecast is based on the trends of the past. With the Swiss National Bank (SNB) expected to turn hawkish and the fears of the US economy heading into a recession, perhaps the reality will be different from the forecast. USD/CHF Price Chart USD/JPY Pair As the US Dollar weakens, investors are turning to the Japanese Yen safe-haven asset. The market sentiment for this currency pair is reflecting bearish signals. USD/JPY Price Chart Sources: finance.yahoo.com, dailyfx.com
S&P 500 Rose And Then Pulled Back, Despite Boris Johnson's Vote Of No-Confidence, GBP Remained Strong

S&P 500 Rose And Then Pulled Back, Despite Boris Johnson's Vote Of No-Confidence, GBP Remained Strong

Rebecca Duthie Rebecca Duthie 06.06.2022 20:55
Summary: Is positive investor sentiment returning to the markets? GBP bullish against USD Read next: (TWTR) Twitter Shares Tumble On Monday  S&P 500 sees gains and losses as the index tries to recover U.S stocks rose in early Monday trading but have since dropped again amidst the current uncertain economic outlook and the prospect of tighter monetary conditions. The S&P 500 closed low on Friday in a general market sell-off. The decline last week came in the wake of a stronger-than-expected job report for May that showed that job hiring slowed but still kept a strong tempo. The showing of labor market strength aligned with expectations for policy makers on track with monetary policy tightening. Monday's drop in equities comes as the U.S treasury yields benchmark topped 3% during Monday's session. GSPC Price Chart Pound Sterling remains strong On Monday the pound sterling traded strong despite that Monday evening bringing with it a vote of no-confidence for Prime Minister Boris Johnsson. Despite the vote of no confidence, the pound sterling has remained strong, indicating to the market that it will remain strong despite politics. The pound sterling is bullish against the US Dollar and is showing mixed signals when it comes to its other major counterparts such as the Euro and CHF. Sources: finance.yahoo.com, poundsterlinglive.com
The Japanese Yen Retreats as USD/JPY Gains Momentum

ECB On Track To Hike Interest Rates In July (EUR/USD), (EUR/GBP), RBA Hikes Interest Rates (AUD/USD), EUR/CHF

Rebecca Duthie Rebecca Duthie 07.06.2022 15:19
Summary: Inflation reaches its highest level since the formation of the euro single currency. The pound sterling lost value to the Euro, US Dollar and other major currencies. RBA hikes interest rates. Read next: (XAUUSD) Gold Should Be Bullish, NGAS Reaches Highest Price Since August 2008, Cotton Crop Planting Is Ahead Of Schedule  ECB putting themselves under pressure The market is reflecting bearish signals for this currency pair. The European Central Bank (ECB) has repeated the message of ending their asset purchasing early in July, and will follow that with a 25 basis point hike in interest rates in the ECB meeting in July. By reiterating that they will stick to their timeline, the ECB has allowed themselves little flexibility to turn hawkish through tightening of monetary policy before July, despite inflation reaching its highest level since the euro was formed. The market awaits the ECB’s release of macroeconomic projections which will occur on Thursday. EUR/USD Price Chart Pound Sterling falls on Thursday The market is reflecting bullish sentiment for this currency pair. On Monday U.K Prime Minister Boris Johnsson won the vote of no confidence, inlight of this, the pound sterling lost value to the Euro, US Dollar and other major currencies. The pound sterling rallied on Monday in the wake of the news of Borris Johnssons vote of no confidence, some analysts drew the conclusion that the gain in the pound was linked to the prospects of a new leader whilst others said the outcome would not affect the market. EUR/GBP Price Chart AUD gains in the wake of RBA hikes The market is reflecting bearish signals for this currency pair. The Reserve Bank of Australia (RBA) showed the market that they are committed to the fight against inflation and turned hawkish by hiking interest rates by 0.5%. However, the gains felt in the wake of this decision for the AUD were short lived. AUD/USD Price Chart EUR/CHF The market is reflecting mixed signals for this currency pair. As risks for the Euro rise amidst rising inflation and the interest rate hikes from European Central Bank likely to only begin in July, the Euro has faced some mixed sentiment on Tuesday, making the safe-haven Swiss Franc more desirable. EUR/CHF Price Chart Sources: finance.yahoo.com, dailyfx.com, poundsterlinglive.com
ECB press conference brings more fog than clarity

Strong Expectations For ECB To Hike Interest Rates Is Offering The Euro Support (EUR/USD, EUR/GBP), Hawkish RBA is Offering AUD Support (AUD/JPY), US Dollar Benefitted From AUD Risk Sensitivity (AUD/USD)

Rebecca Duthie Rebecca Duthie 09.06.2022 12:26
Summary: ECB announcement due on Thursday, analysts expect hawkish moves. Dovish BoJ causing the safe-haven asset to weaken. The market is reflecting bearish signals for the AUD/USD currency pair. Read next: Alibaba (BABA) Amongst US Listed Chinese Stocks That Have Seen Major Gains  ECB expected hawkish attitude supporting EUR The market is reflecting bullish signals for this currency pair. The highlight of the Thursday trading day for the foreign exchange markets is the European Central Banks (ECB) announcement. Over the past few weeks, members of the ECB have been stressing the need for interest rate hikes in July with the bank's president, Christine Lagarde saying the July hioke would likely be followed by a September hike. The strong expectations are offering the Euro support against the US Dollar. EUR/USD Price Chart Euro strengthens against the GBP The market is reflecting bullish signals for this currency pair. The Euro could strengthen further against the pound sterling if the European Central Bank (ECB) ends up turning hawkish as analysts expect. Over the past few weeks, members of the ECB have been stressing the need for interest rate hikes in July with the bank's president, Christine Lagarde saying the July hioke would likely be followed by a September hike. EUR/GBP Price Chart RBA hawkish vs BoJ dovish The market is reflecting bullish signals for this currency pair. The AUD/JPY currency pair is one of the more volatile currency pairs. The Australian Dollar has gained on the safe-haven Japanese Yen over the past week due to the Reserve Bank of Australia (RBA) turning hawkish and the Bank of Japan (BoJ) choosing to continue with monetary easing. AUD/JPY Price Chart US Dollar benefitted from AUD risk sensitivity The market is reflecting bearish signals for this currency pair. Inflation worries resurfaced on Wall Street, which drove US stocks lower, this sentiment may have a domino effect on the Asia-Pacific markets. The fall in sentiment weighted on the risk-sensitive Australian Dollar, thus benefiting the US Dollar in this currency pair. AUD/USD Price Chart Sources: finance.yahoo.com, dailyfx.com, poundsterlinglive.com
Inflation Outlook: Energy Prices Drive Hospitality, Food Inflation Eases

FX: What Is Cable? British Pound To US Dollar (GBPUSD). Technical Analysis of GBP/USD for June 21, 2022

InstaForex Analysis InstaForex Analysis 21.06.2022 10:20
Relevance up to 09:00 2022-06-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical Market Outlook: The GBP/USD pair has been seen steadily moving towards the technical resistance located at the level of 1.2468, just where the main channel lower line is located. The bulls are temporary in change of the market, the momentum is strong and positive, so after the pull-back to the nearest technical support is done, the price keeps bouncing up. The nearest technical support is seen at the level of 1.2281 and 1.2207. Nevertheless, the supply zone located between the levels of 1.2618 - 1.2697 is still the main obstacle for bulls that needs to be broken if the rally is expected to be continued.     Weekly Pivot Points: WR3 - 1.2922 WR2 - 1.2665 WR1 - 1.2442 Weekly Pivot - 1.2193 WS1 - 1.1971 WS2 - 1.1712 WS3 - 1.1494 Trading Outlook: The price broke below the level of 1.3000 quite long time ago, so the bears enforced and confirmed their control over the market in the long term. The Cable is way below 100 and 200 WMA , so the bearish domination is clear and there is no indication of trend termination or reversal. The bulls are now trying to start the corrective cycle after a big Pin Bar candlestick pattern was made last week. The next long term target for bears is seen at the level of 1.1989. Please remember: trend is your friend.   Read more: https://www.instaforex.eu/forex_analysis/281021
Forex News: GBPUSD set to move lower?

Forex News: GBPUSD set to move lower?

8 eightcap 8 eightcap 11.07.2022 08:52
Happy Monday, traders. We are looking at the GBPUSD today as price has started to show signs that a new lower test could be building. Overall, prices remain in a downtrend, with plenty of LHs and LLs showing a normal pattern of trend. Looking at recent price action, we can see resistance remains in play at 1.2035. Since buyers made their last rally on the 7th, they have not been able to get past that level on the attempts. Today’s bar is mid-range, but sellers are now holding control after the USD set off a firm start to the new week. Looking lower, we see minor support at 1.1915. Buyers so far have defended this level well since the first break on the 5th. A lot will come down to continued USD strength; if this remains, we will look for sellers to get back down and test support. A break and we could see confirmation that a new leg lower is getting underway. A buyer move above resistance cancels out this idea. GBPUSD D1 Chart The post Forex News: GBPUSD set to move lower? appeared first on Eightcap.
EUR/USD Pair Has Potential For The Downside Movement Today

Podcast: Speaking Of EUR/USD And The Future Of Euro, COVID-19, British Pound And Bank Of England | Oanda

Jeffrey Halley Jeffrey Halley 12.07.2022 14:39
Senior Market Analyst Jeffrey Halley talks about news impacting the market and the week ahead. In this week’s podcast, the Euro is approaching parity with the US Dollar for the first time in decades. We discuss the move, the reasons behind it, and what lies ahead for the single currency. But first, it is a quick look at Asian markets where covid-19 concerns in China are weighing on sentiment. Then it is the British Pound and UK data and of course, British politics. From there it is the Bank of England before getting our teeth stuck into US inflation data due tomorrow. We ponder its implications for the market and why it matters to the Fed.   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Market Insights Podcast (Episode 351) - MarketPulseMarketPulse
GBP Inflation Surprise: Pound Faces Downward Pressure as Rate Hike Expectations Shift

ZEW Economic Index Economic Readings (EUR/USD, EUR/GBP), Many Currencies Have Come Under Pressure As The US Dollar Continues To Strengthen

Rebecca Duthie Rebecca Duthie 12.07.2022 17:02
Summary: The Euro expectedly reacted poorly to the ZEW indexes economic readings. EUR/GBP GBP/AUD came in softer on Tuesday. GBP/NZD Read next: EUR/USD Attempts Parity (EUR/USD), Noord Stream Maintenance Is Underway (EUR/GBP), BoC Policy Decision Due Wednesday (GBP/CAD), USD/JPY  US Inflation Data will be released on Wednesday The market is reflecting bearish signals for this currency pair. The Euro expectedly reacted poorly to the ZEW indexes economic readings and is now seeing the EUR/USD currency pair testing parity. The EU region print came in at -53.8, the lowest since November 2011, reiterating the already lowering optimism in the Eurozone. Further events that could negatively affect the Euro further include an increasingly hawkish Federal Reserve, the potential energy crisis lingering over the Eurozone and recessionary fears. Focus during Wednesday's trading day will be on the US Inflation data release which will give the market further guidance around the U.S economy. EUR/USD Price Chart Euro faces more risks The market is reflecting mixed signals for this currency pair. The Pound sterling continues to be weighed down by the market's woes around the Euro. The Euro/US Dollar currency pair is testing parity. The pound was supported by the news of Prime Minister Boris Johnson stepping down in the wake of many government officials resigning. The Euro still faces risks going forward. EUR/GBP Price Chart GBP/AUD Currency pair The pound sterling to Australian Dollar entered the trading week on its front foot with the AUD coming under pressure from numerous other currencies whilst the US Dollar strengthened even against China's Renminbi and risk aversion controlled both the stock and commodity markets. Although the GBP/AUD was softer on Tuesday, it closely resembles the USD pairing against both the GBP and AUD. GBP/AUD Price Chart GBP/NZD The GBP/NZD currency pair has had a volatile start to the trading week and could see the pound sterling strengthen even more in the coming days if the Reserve Bank of New Zealand (RBNZ) surprises the markets and encourages the NZD to outperform other currencies. GBP/NZD Price Chart Sources: finance.yahoo.com, poundsterlinglive.com, dailyfx.com
Inflation Outlook: Energy Prices Drive Hospitality, Food Inflation Eases

UK: Recession In The End Of 2022? Scary Projections Of Bank Of England!

Saxo Bank Saxo Bank 08.08.2022 09:36
Summary:  In today’s ‘Macro Chartmania’, we give an update on the British economy. A few months ago, we warned the UK economy is one of the developed countries most likely to enter into a recession. There is no debate about it anymore. Last week, the Bank of England updated its macroeconomic forecasts for the years until 2025. These are frightening. The United Kingdom is projected to enter into a recession in Q4 2022. This could last five quarters and cause GDP to fall about 2.1 % - as deep as the recession of the early 1990s. But this is not the worst. Very often, the economy rebounds quite sharply after a recession. This is unlikely to happen this time. The slump will last. The BoE sees GDP still 1.75 % below today’s levels in mid-2025. Click here to download this week's full edition of Macro Chartmania composed of more than 100 charts to track the latest macroeconomic and market developments. All the data are collected from Macrobond and updated each week. The United Kingdom is more and more looking like an emerging market country: Political instability (the new Prime Minister will be announced on 5 September after Boris Johnson’s resignation), trade disruptions (due to Brexit and Covid-related bottlenecks), energy crisis (the risk of a blackout this winter is real) and high inflation (the Bank of England forecasts that UK CPI will peak at 13 % in October but this is certainly a bit optimistic) are all hurting the UK economy. The only major difference : there is no currency crisis. The sterling pound exchange rate is rather stable. It only dropped 0.70 % against the euro and 1.50 % against the U.S. dollar over the past week. Our bet : after surviving Brexit uncertainty, we don’t see what could push the sterling pound into a free fall. All the leading indicators point in the same direction : The worst is yet to come for the British economy. There is a consensus among economists about that very fact. The OECD’s leading indicator for the United Kingdom, which is supposed to anticipate reversals in the economy six to nine months in advance, fell to 98.6 in June. The annual rate was 7.3 % in June 2021 (partially reflecting the post-lockdown rebound). It now stands at minus 2.9 %. The change is impressive over a year. This is not only linked to Covid data noise. This is a clear sign that a recession is coming. In addition, new car registrations, which are often considered as a leading indicator of the overall UK economy, continue to drop. This also reflects the deep collapse in consumer confidence (see chart below). In July 2021, after the peak of the pandemic, new car registrations stood at 1,835,000. They now stand at 1,528,000, a sharp drop of 14%. This is the lowest level since the end of the 1970s. The recession will be long and deep. There won’t be an easy escape. This is the most worrying, in our view. The Bank of England assesses the slump will last with GDP still 1.75 % below today’s levels in mid-2025. What Brexit has not done by itself, Brexit coupled with Covid and high inflation have succeeded in doing. The UK economy is crushed. The window for further rate hikes is closing :   Last week, the Bank of England hiked interest rates by 50 basis points, from 1.25 % to 1.75 %. We think the Bank of England’s next rate hike in September (probably of 50 basis points) could be the last. Outside of the jobs markets, there are signs that some of the key inflation drivers may be starting to ease. In addition, the prospect of a long recession (five negative quarters of GDP starting in Q4 2022 all the way through to Q4 2023) will certainly push the Bank of England into a wait-and-see position. On the topic of balance sheet reduction, we don’t expect any changes in the medium-term. Gilt sales will begin shortly after the September meeting. They will amount to £10bn per quarter the first year (this amount will be revised each year). We think the Bank of England has a rather traditional approach to deal with the current macroeconomic situation. Domestic demand must be slowed down by pushing GDP below its potential level, thus increasing unemployment and lowering inflation. A key rate of 2.25 % could already have a noticeable positive impact on the overall inflation dynamics, in our view. However, this is too early to know whether the current tightening cycle will definitely be over in September. The inflation dynamics have been a bit unpredictable in recent months. This is the least we can say. The social contract is broken : Imagine the graduate entering the workforce in 2009/10, who will have been told this was a once-in-a-lifetime crash. They are now in their early 30s and having yet another once-in-a-lifetime economic crisis. They faced an economy of suppressed wages, no housing prospects, two years of socializing lost to lockdown, obscene energy bills and rent and now a lengthy recession. This will lead to more poverty and despair. The Bank of England is now forecasting that real household post-tax disposable income will fall by 3.7 % over this year and next. This would be easily the weakest two years on record since 1963. The lowest income is hit the hardest. The International Monetary Fund found the poorest households in the United Kingdom are amongst the hardest hit by the cost of living in Europe. They found that living costs for the poorest 20 % of households are set to rise by about twice as much as those for the wealthiest, for instance. If this situation would happen in France, there would be a street revolution. Remember the Yellow Vest Movement in 2018. But this is the United Kingdom. It will unlikely lead to any major political shift. There will be more social distress, wealth inequality and poverty all around, however. The sixth largest economy in the world will look even more like an emerging market country, unfortunately.     Source: Chart of Week Emerging market Britain | Saxo Group (home.saxo)
Behind Closed Doors: The Multibillion-Dollar Deals Shaping Global Markets

US Jobless Claims: Even More Than The Previous Year. PBOC Hopes CPI To Stay At 3%

Saxo Strategy Team Saxo Strategy Team 12.08.2022 09:03
Summary:  Another downside surprise in US inflation in the wake of lower energy prices lifted the equity markets initially overnight. However, sustained hawkishness from Fed speakers brought the yields higher, weighing on equities which closed nearly flat in the US. Crude oil prices made a strong recovery with the IEA boosting the global growth forecast for this year. EURUSD stayed above 1.0300 and will be eying the University of Michigan report today along with UK’s Q2 GDP. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  After rising well over 1% in early trading amid the weaker-than-expected PPI prints, U.S. equities wiped out gains and closed lower, S&P 500 -0.07%, Nasdaq 100 -0.65%. Energy stocks were biggest gainers, benefiting from a 2.6% rally in the price of WTI crude, Devon Energy (DVN:xnys) +7.3%, Marathon Oil (MRO:xnys) +7%, Schlumberger (SLB:xnys) +5.7%.  Consumer discretionary and technology were the biggest decliners on Thursday. Chinese ADRs gained, Nasdaq Golden Dragon Index climbed 2.6%.  U.S. treasuries bear steepened In spite of weaker-than-expected PPI data, U.S. long-end treasury yields soared, 10-year yields +10bps to 2.99%, 30-year yields +14bps to 3.17%. The rise in long-end yields were initially driven by large blocks of selling in the T-bond and Ultra-long contracts and exacerbated in the afternoon after a poor 30-year auction. The yield of 2-year treasury notes was unchanged and the 2-10-year yield curve steepened 10bps to minus 23bps.  Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Hong Kong and mainland Chinese equities surged, Hang Seng Index +2.4%, CSI300 Index +2.0%. Northbound inflows into A shares jumped to a 2-month high of USD1.9 billion. In anticipation of a 15% rise in the average selling price of Apple’s iPhone 14 as conjectured by analysts, iPhone parts supplier stocks soared in both Hong Kong and mainland exchanges, Q Technology (01478:xhkg) +17.7%, Sunny Optical (02382:xhkg) +9%, Cowell E (01415:xhkg) +4%, Lingyi iTech (002600:xsec) +10%. China internet names rebounded, Alibaba (09988:xhkg) +4.3%, Tencent (00700:xhkg) +2.7%, Meituan (03690:xhkkg) +4.0%, Baidu (09888:xhkg) +5.2%. Power tool and floor care manufacturer, Techtronic Industries (00669:xhkg) soared nearly 11% after reporting  a 10% year-on-year growth in both revenues and net profits in 1H22. The company rolled out a new generation of drill drivers that have embedded with machine learning algorithm. After collapsing 16% in share price yesterday, Longfor (00960) managed to stabilize and recover 5.7% following the company’s refutation of market speculation that it had failed to repay commercial papers due. EURUSD re-tested resistance levels EURUSD reclaimed the key 1.0300 on Thursday amid a softer dollar, and printed highs of 1.0364. While weaker-than-expected inflation prints in the US this week have curtailed dollar strength, it is hard for EURUSD to sustain gains amid the energy crisis and European recession concerns. A break below 1.0250 would be needed for EURUSD to reverse the trend, however. AUDUSD, likewise, trades above 0.7100 amid the risk on tone, but a turn lower in equities could reverse the trend. GBPUSD has been more range-bound around 1.2200 ahead of the Q2 GDP data scheduled to be released today, and EURGBP may be ready to break above 0.8470 resistance if the numbers come out weaker-than-expected. Crude oil prices (CLU2 & LCOV2) Crude oil prices gained further on Thursday amid signs of softer inflation, weaker dollar and improving demand. The International Energy Agency (IEA) lifted its consumption estimate by 380 kb/d, saying soaring gas prices amid strong demand for electricity is driving utilities to switch to oil. This could be aided by lower gasoline prices, which have dented demand during the US driving season. Prices fell below USD4/gallon for the first time since March. Meanwhile, OPEC may struggle to raise output in coming months due to limited spare capacity. WTI futures touched $94/barrel while Brent futures rose towards the 100-mark.   What to consider? Another downside surprise in US inflation US July PPI dipped into negative territory to come in at -0.5% MoM, much cooler than 1% last month or the +0.2% expected. But on a YoY basis, PPI remains up a shocking 9.8%. Core PPI rose 0.4% MoM, which means on a YoY basis core producer prices are up 7.6% (lower than June's +8.2% but still near record highs). Goods PPI fell 1.8%, dominated by a 9.0% drop in energy. Meanwhile, services PPI was up 0.1% in July. Despite the slowdown in both PPI and CPI this week, PPI is still 1.3% points above CPI, suggesting margin pressures and a possible earnings recession. Fed’s Daly said she will be open to a 75bps rate hike at the September meeting. US jobless claims rise, University of Michigan ahead US initial jobless claims 262K vs 265K estimate, notably higher than the 248k the prior week and the highest since November 2021. The 4-week moving average of initial jobless claims increased to 252K vs 247.5K last week, but still below 350k levels that can cause an alarm. The modest pickup in claims suggests that turnover at weaker firms is increasing. Key data to watch today is the preliminary University of Michigan survey for August, where expectations are for a modest improvement given lower gasoline prices. China’s central bank expects CPI to hover around 3% In its 2nd quarter monetary policy report released on Wednesday, the People’s Bank of China (PBOC) expects the CPI being at around 3% for the full year of 2022 and at times exceeding 3%.  The release of pend-up demand from pandemic restrictions, the upturn of the hog-cycle, and imported inflation, in particular energy, are expected to drive consumer price inflation higher for the rest of the year in China but overall within the range acceptable by the central bank.  The PBOC expects the recent downtrend of the PPI to continue and the gap between the CPI and PPI growth rates to narrow. The PBOC reiterates that it will avoid excessive money printing to spur growth so as to safeguard against inflation.  China’s President Xi is said to be visiting Saudi Arabia next week The Guardian reports that President Xi Jinping is expected to visit Saudi Arabia on an invitation extended from Riyadh in March.  China has been eager to secure its oil supply and explore the possibility of getting its sellers to accept the renminbi to settle oil trade.   While relying on the United States for security in a volatile region and supplies of weapons, Saudi Arabia with Prince Mohammed being in charge is looking for leverage in the kingdom’s relationship with the United States.  UK Q2 GDP likely to show a contraction The Q2 GDP in the UK is likely to show a contraction after April was down 0.2% and May up 0.5%. June GDP is likely to have seen a larger contraction given less working days in the month, as well as constrained household spending as inflation surged to a fresh record high. While there may be a growth recovery in the near-term, the Bank of England clearly outlined a recession scenario from Q4 2022 and that would last for five quarters. Our Macro Strategist Chris Dembik has painted a rather pessimistic picture of the UK economy.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets and what to consider next – August 12, 2022
FX Market Update: Calm Before the Central Bank Storm

AUDUSD Is Sliding Down. AUDJPY Aims High!? GBPAUD Finally Have A Chance!

Kim Cramer Larsson Kim Cramer Larsson 12.08.2022 08:47
AUDUSD AUDUSD confirmed short-term uptrend yesterday breaking above 0.7069. RSI back above 60 indicating AUDUSD is likely to move higher towards resistance at 0.7283. AUDUSD could move higher from there after a likely correction. If closing above 0.76 AUDUSD could move toward peak at around 0.7660.To neutralise that scenario AUDUSD must move back below 0.7069. To reverse it AUDUSD must collapse to below 0.6865. Source: Saxo Group Weekly chart shows AUDUSD trading in a wide falling channel. A test of upper falling trendline is not unlikely, given that the above bullish scenario plays out. Source: Saxo Group AUDJPY AUDJPY is slowly crawling higher after the spike down below key support last week. AUDJPY is back above all Simple Moving averages and RSI is still showing positive sentiment indicating a test of the slightly falling upper trendline is likely. If AUDJPY breaks above the trendline and above resistance at 95.75 the pairs is likely to take out the peak in June at around 96.90. Source: Saxo Group GBPAUD GBPAUD is testing support at 1.7173 and seems likely to break bearish out of the range it has been trading in past 6 months. If AUDGBP closes below 1.7173 the pair is set for lower levels Source: Saxo Group Weekly chart shows that 01.7173 is a key support level rejecting GBPAUD several times. If GBPAUD finally breaks below the support a medium- to long-term move towards 1.60 area is in the cards.IF it fails to close below 1.7173 GBPAUD could resume its rangebound behaviour Source: Saxo Group Source: Technical Update - AUD pairs on the move testing or breaking resistance levels. AUDUSD , AUDJPY & GBPAUD
Thursday's Bank's of England decision may be record-breaking!

We're Going To Verify Bank's Of England Expectations. What Do We Expect From UK GDP Data?

Jing Ren Jing Ren 12.08.2022 10:05
After their last meeting, the BOE warned that 5 quarters of negative growth were coming. The consensus of expectations shows that there could be starting with data reports from tomorrow. There is an avalanche of data before the market opens, as is customary for the UK, but naturally GDP is likely to be the main focus, particularly given the context. The battle for leadership of the Tory party also continues, with whomever winning the vote in September becoming Prime Minister. The leader in the race so far, Liz Truss, has spoken repeatedly about intervening in the BOE to broaden its mandate. Many question whether this will hurt the bank's credibility. More importantly, a change in the mandate in the middle of an inflationary spiral could make things more difficult. On the other hand, one of the measures that Truss is proposing includes offering a rate outlook forecast, similar to the Fed's dot-plot matrix, which could help reassure markets. It's all about the trends Since many attributes are slowing economic growth, tightening monetary policy to fight inflation, how the BOE could react will also factor into the market's reaction to the data. If GDP is growing, then the BOE has more room to keep hiking. If GDP is starting to contract, then the presumption is that inflation will start to turn around, and the BOE will be less likely to tighten. In this context, the BOE's projection that inflation will peak at 13 sometime later in the year implies that policy will likely remain tight, even if there is a technical move to negative growth. Technical here usually means a couple of decimal points in the red, which, while not good, isn't the same as a full-blown recession such as 2020 or 2008. What to look out for There are three bits of data coming out, with different levels of importance to the market. In general, the "faster" the data, the more the market cares about it. By "faster" that means the most recent, shortest interval. So, in order of importance, we will likely have June, quarterly and annual GDP change figures. June monthly GDP is expected to show -1.3% growth compared to 0.5% prior. Monthly GDP is a lot more volatile thus it's easier to dismiss a large move. But for markets already sensitive to bad news, this could be interpreted as an acceleration to the downside in the near term. The other market moving points Quarterly GDP is likely to get the most attention, as it's expected to show -0.2% growth, compared to +0.8% in the prior quarter. If the forecast is met, that could be the first of negative growth of two needed to technically talk about a recession. But it's such a low margin, that a beat of just two decimals could have an important psychological impact on the markets as well. Annual GDP is projected to show 1.3% growth compared to 3.5% prior. While this on the surface appears to be a strong deceleration, this probably has more to do with comparables. Last year's spring was much better for the economy than the winter, which is why there is a bigger difference between Q1 and Q2. It's not as indicative of the move over the first half of this year, as of what happened last year.
GBP Performance Ahead Of UK GDP Release. US Dollar (USD) Is Supported By Pricing In Future Fed Decisions

GBP Performance Ahead Of UK GDP Release. US Dollar (USD) Is Supported By Pricing In Future Fed Decisions

Jing Ren Jing Ren 12.08.2022 09:41
USDJPY struggles for bids The US dollar consolidates as traders reassess future rate hike moves by the Fed. A bearish RSI divergence and MA cross on the daily chart suggest the start of a correction. A short-lived rebound came to a halt in the supply zone around 135.40 which coincides with the 20-day moving average. A follow-up break below 133.00 indicates that the path of least resistance could be down. 130.50 at the origin of a bullish breakout in June is a critical floor, its breach may extend losses to last May’s lows next to 126.90. EURGBP tests resistance Sterling treads water as the market expects a contraction in the UK’s Q2 GDP. The latest rebound came under pressure near the support-turned-resistance at 0.8470 which sits on the 30-day moving average. A bounce off 0.8410 showed solid interest in keeping the single currency afloat. A close above 0.8470 would send the pair to 0.8520 where a breakout could prompt more sellers to cover their bets, laying the groundwork for a rally to June’ highs next to 0.8580. 0.8410 is the first support in case of hesitation. SPX 500 pulls lower The S&P 500 falls back over concerns that inflation is yet to peak. Divergence between the 20 and 30-day moving averages indicates an acceleration to the upside. The current recovery may have gained traction after a break above June’s peak at 4200. Along with medium-term bears rushing to avoid a squeeze, momentum buying may continue to support the index. May’s high at 4300 would be the next target. An overbought RSI may cause a limited pullback, If this occurs, 4150 is a new support level.
"Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24"

Yesterday GBP/USD Went Up Because Of Weaker US Dollar. Today Pound Has Been Hit By GDP

Kenny Fisher Kenny Fisher 12.08.2022 14:02
The British pound is in negative territory today, after a contraction in UK GDP. In the European session, GBP/USD is trading at 1.2126, down 0.61% on the day. British economy declines in Q2 The British pound posted dazzling gains on Wednesday, surging 1.19%. The impressive climb was, however, a case of US dollar weakness, rather than any newfound strength in the pound. Inflation in the US was unexpectedly weaker than forecast, which raised market hopes that the Fed will ease policy. This led to the US dollar being less attractive and the currency took a nasty spill against all the majors. Sterling hasn’t fared as well after the UK posted the second-quarter GDP report. The economy fell in July by -0.1% QoQ, following a 0.8% gain in June (-0.2% exp). On an annualized basis, GDP growth slowed to 2.9%, within expectations but sharply down from 8.7% in Q1. The outlook does not look good as we head towards winter, with UK households about to be hit with sharp increases in energy prices. Consumers are already struggling with a nasty cost of living crisis, and as they tighten the purse strings, the spectre of a recession will become that much more likely. Another key indicator, Manufacturing Production, came in at -1.6% MoM, down from a 1.7% gain in May (-1.8% exp). This was the fourth decline in five months, pointing to a worrying downtrend in manufacturing. The week wraps up with UoM Consumer Sentiment, a key confidence indicator. With the cost of living crisis in the US, it’s no surprise that the index has tumbled – falling from 65.7 in March to just 51.5 in June. This points to weak expansion, just above the neutral 50.0 line. The July forecast calls for a slight improvement to 52.5 points. GBP/USD Technical GBP/USD continues to test resistance at 1.2241. Next, there is resistance at 1.2361  There is support at 1.2123 and 1.2061 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. GBP/USD slips on GDP, US confidence data next - MarketPulseMarketPulse
RBA Pauses Rates as Australian Dollar Slides; ISM Manufacturing PMI in Focus

Dollar (USD) Became Stronger, Not Enough Yet. Fed Better Meet Expectations!

John Hardy John Hardy 12.08.2022 14:23
Summary:  US treasury yields at the long end of the yield curve jumped higher yesterday to multi-week highs, a challenge to widespread complacency across global markets. The USD found a modicum of support on the development, though this was insufficient to reverse the recent weakening trend. It will likely take a more determined rise in US yields and a tightening of financial conditions, possibly on further Fed pushback against market policy expectations, to spark a more significant USD comeback. FX Trading focus: US yields jump, not yet enough to reverse recent USD dip A very interesting shift in the US yield curve yesterday as long yields jumped aggressively higher, with the 30-year yield getting the most focus on a heavy block sale of US “ultra” futures and a softer than expected 30-year T-bond auction from the US treasury. The 30-year benchmark yield jumped as much as 15 basis points from the prior close, with the 10-year move a few basis points smaller. We shouldn’t over-interpret a single day’s action, but it is a technical significant development and if it extends, could be a sign of tightening liquidity as the Fed ups its sales of treasuries and even a sign that market concern is growing that the Fed will fail to get ahead of inflation. As for the market reaction, the USD found some support, but it was modest stuff – somewhat surprisingly in the case of the normally very long-US-yield-sensitive USDJPY. Overnight, a minor shuffle in Japanese PMI Kishida’s cabinet has observers figuring that there is no real determined pushback yet against the Kuroda BoJ’s YCC policy, with focus more on bringing relief to lower income households struggling with price rises for essentials. Indeed, BoJ policy is only likely to come under significant pressure again if global yields pull to new cycle highs and the JPY finds itself under siege again. As for USDJPY, it has likely only peaked if long US yields have also peaked for the cycle. Chart: EURUSD EURUSD caught in limbo here, having pulled up through the resistance in the 1.0275+ area after a long bought of tight range trading, but not yet challenging through the next key layer of resistance into 1.0350+. It wouldn’t take much of a further reversal here to freshen up the bearish interest – perhaps a dip and close below 1.0250 today, together with a bit of follow through higher in US yields and a further correction in risk sentiment. Eventually, we look for the pair to challenge down well through parity if USD yields retest their highs and beyond. Source: Saxo Group Elsewhere – watching sterling here as broader sentiment may be at risk of rolling over and as we wind our way to the conclusion of the battle to replace outgoing Boris Johnson, with Liz Truss all but crowned. Her looser stance on fiscal prudence looks a sterling negative given the risks from UK external deficits. Her instincts seem pro-supply side on taxation, but the populist drag of cost-of-living issues has shown her to be quick to change her stripes – as she has often been, having reversed her position on many issues, including Brexit (was a former remainer). Today’s reminder of the yawning trade deficit (a current run rate of around 10% of GDP) and the energy/power situation together with dire supply side restraints on the UK economy have us looking for sterling weakness – a start would be a dip below 1.2100 in GBPUSD, which would reverse the reaction earlier this week to the US July CPI release. The week ahead features an RBNZ on Wednesday (market nearly fully priced for another two meetings of 50 basis points each). NZDUSD has looked too ambitious off the lows – there is no strong external surplus angle for the kiwi like there is for the Aussie – might be a place to get contrarian to the recent price action if global risk sentiment is set to roll over again finally now that the VIX has pushed all the way to 20 (!).  A Norges Bank meeting on Thursday may see the bank hiking another 50 basis points as it continues to catch up to inflationary outcomes. The US FOMC minutes are up next Wednesday and may be a bit of a fizzle, given that the bulk of the easing financial conditions that the Fed would like to push back against came after the meeting. Table: FX Board of G10 and CNH trend evolution and strength. The US dollar hasn’t gotten much from the latest development in yields – watching the next couple of sessions closely for direction there, while also watching for the risk of more sterling downside, while NZD looks overambitious on the upside. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs. The EURGBP turn higher could follow through here – on the lookout for that development while also watching GBPUSD status in coming sessions and whether the EURUSD move higher also follows through as per comments on the chart above. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1400 – US Fed’s Barkin (non-voter) to speak 1400 – US Aug. Preliminary University of Michigan sentiment Share Source: FX Update: US yield jump brings USD resilience if not a reversal.
The Pound (GBP) Will Probably Continue To Move Sideways

GBP/USD Today. Pay Attention! Sell Or Be Sold?

InstaForex Analysis InstaForex Analysis 11.08.2022 16:01
Relevance up to 13:00 2022-08-12 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical analysis: GBP/UISD has been trading flat today at the price of 1.2204 but I see potential for the second downside swing. Trading recommendation: Due to the strong growth yesterday and extreme condition, I see potential for the downside movement. Watch for potential selling opportunities with the downside objective at the price of 1.2135. Stochastic oscillator is showing overbought condition and bear cross, which is sign that sellers are taking control. Key resistance is set at the price of 1.2270 Source: Forex Analysis & Reviews: GBP/USD update for August 11, 2022 - Potential for the second downside swing to develop
"Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24"

Forex: (GBP) British Pound - What's Possibly Ahead GBP/USD?

InstaForex Analysis InstaForex Analysis 16.08.2022 08:44
Relevance up to 04:00 2022-08-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. As a result of Monday, the British pound fell by 79 points, passing under the indicator balance line, which empirically shifts the players' interest mainly in short positions.     The price is systematically approaching the nearest support at 1.1970 - the MACD line of the daily scale. The Marlin Oscillator has crossed the border with the territory of the downward trend, the downward movement continues. The second target is the level of 1.1800.     The price settled below the balance indicator line on the four-hour chart, Marlin is falling in negative territory. We are waiting for a further slow decline in the pound.   Read more: https://www.instaforex.eu/forex_analysis/318973
Saxo Bank Podcast: The Upcoming Bank Of Japan Meeting, A Look At Crude Oil, Copper And More

Japanese Yen (JPY) Rise. Energy Prices Are Finally Falling!?

John Hardy John Hardy 16.08.2022 10:05
Summary:  Weak data out of China overnight, together with a surprise rate cut from the PBOC and collapsing energy prices later on Monday saw the Japanese yen surging higher across the board. Indeed, the two key factors behind its descent to multi-decade lows earlier this year, rising yields and surging energy prices, have eased considerably since mid-June with only modest reaction from the yen thus far. Is that about to change? FX Trading focus: JPY finding sudden support on new disinflation narrative Weaker than expected Chinese data overnight brought a surprise rate cut from the Chinese central bank and seems to have sparked a broadening sell-off in commodities, which was boosted later by a crude oil drop of some five dollars per barrel on the news that Iran will decide by midnight tonight on whether to accept a new draft on the nuclear deal forward by the Euro zone. In response, the Chinese yuan has weakened toward the highs for the cycle in USDCNH, trading 6.78+ as of this writing and  (there was a spike high to 6.381 back in May but the exchange rate has been capped by 6.80 since then), but the Japanese yen is stealing the volatility and strength crown, surging sharply across the board and following up on the move lower inspired by the soft US CPI data point. US long yields easing considerably lower after an odd spike last Thursday are a further wind at the JPY’s back here. In the bigger picture, it has been rather remarkable that the firm retreat in global long-date yields since the mid-June peak and the oil price backing down a full 25% and more from the cycle highs didn’t do more to support the yen from the yield-spread angle (Bank of Japan’s YCC policy less toxic as yields fall) and from the current account angle for Japan. Interestingly, while the JPY has surged and taken USDJPY down several notches, the US dollar is rather firm elsewhere, with the focus more on selling pro-cyclical and commodity currencies on the possible implication that China may be content to export deflation by weakening its currency now that commodity prices have come down rather than on selling the US dollar due to any marking down of Fed expectations. Still, while the USD may remain a safe haven should JPY volatility be set to run amok across markets, the focus is far more on the latter as long as USDJPY is falling Chart: EURJPY As the JPY surges here, EURJPY is falling sharply again, largely tracking the trajectory of longer European sovereign yields, which never really rose much from their recent lows from a couple of weeks back, making it tough to understand the solid rally back above 138.00 of late. After peaking above 1.90% briefly in June, the German 10-year Bund, for example, is trading about 100 basis points lower and is not far from the cycle low daily close at 77 basis points. The EURJPY chart features a rather significant pivot area at 133.50, a prior major high back in late 2021 and the recent low and 200-day moving average back at the beginning of the month. After a brief JPY volatility scare in late July and into early August that faded, are we set for a second and bigger round here that takes USDJPY down through 130.00 and EURJPY likewise? A more significant rally in long US treasuries might be required to bring about a real JPY rampage. Source: Saxo Group The focus on weak Chinese data and key commodity prices like copper suddenly losing altitude after their recent rally has the Aussie shifting to the defensive just after it was showing strength late last week in sympathy with strong risk sentiment and those higher commodity prices. Is the AUDUSD break above 0.7000-25 set for a high octane reversal here? AUDJPY is worth a look as well after it managed to surge all the way back toward the top of the range before. The idea that a weak Chine might export deflation from here might be unsettling for Aussie bulls. The US macro data focus for the week is on today’s NAHB homebuilder’s survey, which plunged to a low since 2015 in June (not including the chaotic early 2020 pandemic breakout months), the July Housing Starts and Building Permits and then the July Retail Sales and FOMC minutes on Wednesday. With a massive relief in gasoline prices from the July spike high, it will be interesting to see whether the August US data picks up again on the services side. The preliminary August University of Michigan sentiment survey release on Friday showed expectations rising sharply by over 7 points from the lowest since-1980 lows of June, while the Present Situation measure dropped a few points back toward the cycle (and record) lows from May. Table: FX Board of G10 and CNH trend evolution and strength. The JPY is the real story today, but as our trending measures employ some averaging/smoothing, the move will need to stick what it has achieved today to show more. Watch out for a big shift in the commodity currencies in coming days as well if today’s move is the start of something. Elsewhere, the JPY comeback is merely taking CHF from strength to strength, although even the might franc has dropped against the JPY today. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs. Big momentum shift afoot today and watching whether this holds and the JPY pairs and pairs like AUDUSD and USDCAD to see if we are witnessing a major momentum shift in themes here. Also note NOK pairs like USDNOK and EURNOK here. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1400 – US Aug. NAHB Housing Market Index 0130 – Australia RBA Meeting Minutes Source: FX Update: JPY jumps on deflating energy prices, fresh retreat in yields.
Crypto Market Buzzes with Potential Launch of US Bitcoin ETFs

Watch Out Forex Traders! EUR/USD May See Parity, US Dollar Stays Strong Amid Energy Market Realities, Canadian Dollar May Be Affected By CPI Release

ING Economics ING Economics 16.08.2022 11:17
The rise in gas prices around the world and how policymakers handle them is very much back in focus as terms of trade indices for the big importers hit new lows. Combining this theme with both the weakness in the Chinese renminbi and what should be a positive set of US events over the next 48 hours favours continued dollar strength Germany continues to suffer both with low water levels on the Rhine and now a gas levy for German consumers USD: All systems are go We see three factors that can keep the dollar strong near term and probably send it a little stronger. The first is the ongoing energy shock primarily being felt through natural gas prices. These prices continue to rise as importers compete for cargoes ahead of the northern hemisphere winter and the very uncertain supply situation. In financial markets, the cost of higher gas prices is born out in terms of trade indices. Energy importers such as Europe and large parts of Asia are seeing their terms of trade indices (export versus import prices) continuing to dive. These effectively represent a large negative income shock. The energy independence of the US leaves the dollar relatively insulated on this score. The second factor is the one we highlighted yesterday – the uncertainty as to whether the People's Bank of China (PBoC) will engineer another mini-devaluation in the renminbi as it searches for growth. The PBoC overnight fixed USD/CNY in line with model-based estimates. This is being read rather equivocally by markets as the PBoC is not actively encouraging speculation of a weaker renminbi, nor delivering a stern warning against yesterday's renminbi sell-off. USD/CNH is now trading through 6.80 and a move through 6.82/84 will certainly raise speculation of something larger afoot akin to the April/May 6% renminbi devaluation. That period saw the DXY dollar index up around 6% too. The final factor is the US economy and the Fed story. Today sees the release of July industrial production and tomorrow the release of retail sales. Our team sees better figures for both – largely helped by lower gasoline prices. The figures should temporarily allay US recession fears and prepare the markets for what could be a hawkish set of FOMC minutes tomorrow night. We agree with Padhraic Garvey's opinion piece that the Fed probably wants tighter financial conditions now – which implicitly include a firmer dollar. In all, we continue to prefer north American currencies, where last week we picked out the Mexican peso for some carry. The Canadian dollar also should remain supported on dips and today sees some July CPI data. This can shed light on whether the Bank of Canada hikes 50bp or 75bp on 7 September (59bp currently priced). Of the three, we would probably prefer slightly overweight US dollar positions since the risk environment could easily deteriorate again. 106.95/107.00 looks like the near-term target for DXY. In addition, please find the August edition of FX talking here and also some thoughts on where ESG issues interact with the FX market.  Chris Turner EUR: Grim As Carsten Brzeski noted yesterday, Germany continues to suffer both with low water levels on the Rhine and now a gas levy for German consumers. The gas levy could keep German inflation higher for longer and cause more headaches for the European Central Bank (ECB). The trade-weighted euro is a whisker away from the lows of the year and a slightly stronger dollar over the next 48 hours could easily see EUR/USD retesting parity. 1.0200 should now prove short-term resistance. In terms of data today, look out for German and eurozone investor expectations for August. These should remain near the lows despite a decent last month for European equities. Chris Turner GBP: You are not alone News that Germany will impose a gas levy – confirming that the government cannot fully shield households from the spike in gas prices – leaves the UK less of an outlier in Europe. This will be one of the factors helping to limit EUR/GBP gains and could actually favour a drift back to the 0.8390/8400 area. Today's July UK employment data is somewhat of a mixed bag for sterling. This showed a slight slowing in hiring but strong average earnings – the latter pointing to hoarding of staff. We think the data supports a 50bp Bank of England hike on 15 September (45bp currently priced). In all, EUR/GBP can soften a little, but a stronger dollar means that Cable can go sub 1.20 again. Chris Turner   CEE: Another painful day under the reign of the US dollar The strong US dollar quickly took back almost all of the CEE region's recent currency gains. However, the invisible hand of the market intervened in a different order than we had anticipated yesterday. While the Polish zloty lost the least and narrowly avoided 4.700 EUR/PLN, the Hungarian forint came under heavy sell-off, hit by the rating outlook downgrade from S&P. And the koruna returned halfway to CNB's intervention levels. In all three cases, we can expect more losses today, in our view. The regional calendar is almost empty and global conditions for CEE currencies have deteriorated again, led by a stronger US dollar. We continue to believe the zloty should head above 4.700 EUR/PLN, while the forint has lost too much in our view. It can be expected to remain out of the market's favour for some time due to the rating decision, but market conditions remain most favourable for the forint. This is the only currency in the region that can rely on a rising interest rate differential. Once the jitters over the rating outlook change subside, the forint could return to 396 EUR/HUF. Frantisek Taborsky Read this article on THINK TagsFX Daily Dollar CEE region Bank of England Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The UK Markets Remain Volatile, Possible Contraction Of The Eurozone Economy

British Pound (GBP) And Australian Dollar (AUD) May Fluctuate Shortly! Bank Of England And RBA Are Expected To Hike Rates!

Craig Erlam Craig Erlam 16.08.2022 13:17
European stock markets are a little positive on Tuesday following another mixed session in Asia while US futures are pointing marginally lower ahead of the open on Wall Street. It seems investors are gaining confidence amid a recovery in stock markets in recent weeks rather than feeling anxious about its sustainability against a worrying economic backdrop. I wonder how long that can last even if US inflation shows further signs of pulling back from the peak. Recessions around the world are coming and inflation is not falling fast enough. ​ Hard to see the positives in the UK data It’s no secret that the UK is facing a period of stagflation and recession and today’s jobs report highlighted just how grim the situation is becoming. Despite wages rising by 5.1% including bonuses in June, real wages when adjusted for inflation fell at their fastest pace on record while job vacancies fell for the first time in a couple of years. While the situation isn’t exactly dire yet, the path of travel is clear and the energy price cap increase in a couple of months is going to deliver another economic shock to the system. The jobs report today was oddly horrible in two ways. Falling real wages will make life much harder for many but headline wage growth (not adjusted for inflation) will force the BoE to continue hiking aggressively in order to prevent a wage-price spiral. Unemployment still remains extremely low but the BoE believes it will rise quite sharply over the next couple of years. The competitive nature of the labour market over the last couple of years may slow the process but for how long will depend on the severity of the downturn. I’m not sure the retail sales and inflation data over the next couple of days will make for easy reading either. Indian inflation eases but another 50 basis point hike is still possible Indian inflation fell a little faster than expected last month with a deceleration in food prices contributing to the decline. Other factors could continue to support a drop in inflation in the coming months such as declining oil prices and above-average inventories of finished goods. That said, there also remain significant upside risks into year-end and so the RBI will likely continue raising rates next month, it’s just a question of how aggressive it will be. The consensus appears to be 25 basis points but 50 will no doubt be on the table. RBA is not on a pre-set path The RBA minutes didn’t really contain any surprises, with the central bank reiterating its data-dependent stance, insisting that it is not on a pre-set path. Another 50 basis point hike is likely at the next meeting after similar moves at each of the last three meetings. With inflation expected to peak later this year, the central bank may consider moderating its hikes although that ultimately depends on how the data performs in the interim. Has rally run its course? Bitcoin is a little flat today after another failed run at $25,000 at the start of the week. It briefly broke above here but as has been the case for many days now, there was no momentum behind the rally so it quickly crumbled. Perhaps this is a sign that the two-month rally has run its course, at which point it’s just a question of whether we’re facing a correction or a test of the lows. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Too much optimism? - MarketPulseMarketPulse
Apple May Surprise Investors. Analysts Advise Caution

Apple Supplier In China Closing Its Factories! Big European Aluminium Plant Stops Its Production Due To Unfavorable Conditions

Saxo Strategy Team Saxo Strategy Team 17.08.2022 12:53
  Summary:  The US equity market rally extended modestly yesterday, but turned tail upon the cash S&P 500 Index touching the key 200-day moving average at 4,325. Market today will eye the latest US Retail Sales report from July, which saw peak gasoline prices in the US mid-month, while the FOMC Minutes may prove a bit stale, given they were created before three weeks of the market rallying sharply and financial conditions easing aggressively, likely not the Fed’s intention.   What is our trading focus?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures broke above the 200-day moving average yesterday and then got rejected. Momentum in US equities got a bit more fuel from two good earnings releases from Home Depot and Walmart rising 4% and 5% respectively. S&P 500 futures are pushing higher again this morning and will likely attempt once more to break above the 200-day moving average. Long-term US interest rates are still well-behaved trading around the 2.8% level and the VIX Index has stabilised just below the 20 level. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) Hang Seng Index rallied 1% today, reversing yesterday’s loss. Meituan (03690:xhkg) bounced nearly 5% after its 9% drop yesterday due to a Reuters story suggesting that Tencent (00700:xhkg) plans to divest its 17% stake (USD24 billion) in Meituan.  Tencent denied such a divesture plan last night.  Power drills and floor care equipment maker and a supplier to Home Depot (HD:xnys), Techtronic Industries (00669:xhkg) jumped more than 7% after better-than-expected results from Home Depot overnight.  On Tuesday, China’s Premier Li Keqiang held a video conference with provincial chiefs from Jiangsu, Zhejiang, Shandong, Henan, and Sichuan to reiterate the central government’s push for full use of policies to stabilize the economy.  CSI300 gained 0.6%. USD pairs, including GBPUSD, which bounced strongly off 1.2000 support  A mixed overnight session for FX as the US yields wobbled. Risk sentiment held up with the mixed US data accompanied by a less bad outcome in the US retailer earnings than expected. This made the safe-haven yen a clear underperformer, and USDJPY rose back above 134. But a clear trend in the pair is still missing and a break above 135 is needed to reverse the downtrend. Cable teased key psychological support at 1.2000 yesterday before rising later in the day above 1.2100 ahead of today’s UK CPI report, which may confirm the need for further BOE action after labor data showed wage pressures. EURUSD bounced from session lows at 1.0123 but has posted a recent bearish reversal that keeps the focus lower, particularly on any breakdown through 1.0100, the multi-week range low. USD traders will focus on today’s US Retail Sales and FOMC minutes. USDCNH – there was a brief spike higher in USDCNH earlier this week as China moved to stimulate with a small 10-basis point rate cut of the key lending rate – no drama yet, but traders should keep an eye on this very important exchange rate for larger volatility and significant break above 6.80, as Chines exchange rate policy shifts can provoke significant moves across markets. Crude oil (CLU2 & LCOV2) touched a fresh six-month low on Tuesday with Brent trading lower, in anticipation of the Iran nuclear deal being revived, before bouncing in response to the API reporting a draw in crude oil and especially gasoline stocks. While a deal with Iran could see it raise production by around one million barrels per day, Goldmans talks about a mutually beneficial stalemate for both sides with Iran wanting to avoid sanctions while the US wants to avoid higher oil prices but also the political backlash from a potential deal. EIA’s weekly crude and fuel stocks report on tap later with the market also focusing on gasoline demand and the levels of exports. Over in Europe meanwhile the Dutch TTF benchmark gas trades near an eye-popping $400 per barrel crude oil equivalent, a level that will continue to attract demand for oil-based products due to switching. Copper (COPPERUSSEP22) continues to trade within its established upward trending range after China’s Premier Li Keqiang asked local officials from six provinces to bolster pro-growth measures after weaker financing and activity data were reported earlier this week. In addition, copper is also enjoying some tailwind from rising zinc and aluminum prices after Europe's largest smelters said it would halt production and after producers in China were told to curb production in order to preserve electricity supply during the current heatwave. HG copper’s trading range has narrowed to between $3.585, the uptrend from the July low and $3.663 the 50-day moving average.   What is going on?   US housing scare broadens, industrial production upbeat US Housing starts fell 9.6% in July to an annualized 1,446k, well beneath the prior 1,599 and the expected 1,537k. Housing starts are now down for five consecutive months, and suggest a cooling housing market in the wake of higher borrowing costs and higher inflation. Meanwhile, building permits declined 1.3% in July to 1,674k from 1,696, but printed above the expected 1,650k. There will be potentially more scaling back in construction activity as demand weakens and inventory levels rise. On the other hand, industrial production was better than expected at 0.6% m/m (prev: -0.2%) in July, possibly underpinned by holiday demand but the outlook is still murky amid persistent inflation and supply chain issues. UK headline inflation hits 10.1% The highest in decades and above the 9.8% expected and for the month-on-month reading of +0.6%, higher than the +0.4% expected. Core inflation hit 6.2% vs. 5.9% expected and 5.8% in Jun. That matched the cycle high from back in April. Retail inflation rose +0.9% MoM and +12.3% YoY vs. +0.6%/+12.0% expected, respectively. The Bank of England has forecast that inflation will peak out this fall at above 13%. Reserve Bank of New Zealand hikes 50 basis points to 3.00%, forecasts 4% policy rate peak The RBNZ both increased and brought forward its peak rate forecast to 4.00%, a move that was actually interpreted rather neutrally – more hawkish for now, but suggesting that the RBNZ would like to pause after achieveing 4.00%. 2-year NZ rates were unchanged later in the session after a brife poke higher. RBNZ Governor warned in a press conference that New Zealand home prices will continue to fall. This is actually a desired outcome after a huge spike in housing speculation and prices due to low rates from the pandemic response and massive pressure from a Labor-led government that had promised lower housing costs were behind the RBNZ’s quick pivot and more aggressive hiking cycle in 2021. Walmart shares rally on improved outlook The largest US retailer surprised on both revenue and earnings in its Q2 report with most of the revenue growth coming from higher prices and not volume. The retailer now sees an EPS decline of 9-11% this fiscal year compared to previously 11-13% suggesting input cost pressures are easing somewhat. Walmart is seeing more middle and high-income customers and the retailer has also cancelled orders for billions of dollars to lower inventory levels suggesting global supply chains are improving. Walmart shares were up 5%. Home Depot still sees robust market The largest US home improvement retailer beat on revenue and earnings yesterday in its Q2 results with Q2 comparative sales up 5.8% vs est. 4.6% highlighting that volumes are falling as revenue growth is below inflation rates. The US housing market figures on housing starts and permits cemented that the US housing market is slowing down due to the recent rally in mortgage rates. Home Depot is taking a conservative approach to guidance, but the market nevertheless pushed shares 4% higher. Apple supplier Foxconn suspends its factory in Chengdu due to a power crunch Foxconn’s Chengdu factory is suspending operations for six days from August 15 to 20 due to a regional power shortage. The suspension is affecting Foxconn’s supply of iPad to Apple. The company says the impact “has been limited at the moment” but it may affect shipments if the power outage persists. The Chengdu government is imposing power curbs on industrial users to ensure electricity supply for the city’s residents. At the same time, Foxconn has started test production of the Apple watch in its factories in Vietnam. With the passage of CHIPS and Science Act earlier this month in the U.S., there have been speculations that Taiwanese and Korean chipmakers and their customers may be accelerating the building up of production capacity away from China. Big European aluminium plant to halt production Norsk Hydro’s aluminium plant in Slovakia is halting primary production by end of September due adverse conditions such as elevated electricity prices. The aluminium company would incur significant financial losses should it continue its operations.   What are we watching next?   Eyes on US retail sales today  US retail sales will be next test of the US consumer after less bad retailer earnings last night. Retail sales should have been more resilient given the lower prices at pump improved the spending power of the average American household, and Amazon Prime Day in the month possibly attracted bargain hunters as well. However, consensus expectations are modest at 0.1% m/m compared to last month’s 1.0%. FOMC minutes to be parsed for hints on future Fed moves The Federal Reserve had lifted rates by 75bps at the late July meeting to bring the Fed Funds rate to a level they have previously considered neutral, but stayed away from providing any forward guidance. The minutes of that July meeting are to be released later today, and member comments will be watched closely for any hints on the expectation for September rate hike or the terminal Fed rate. The hot July US jobs report and the cooling July inflation number, as well as a blistering three week rally in equity markets have further confused the markets since the Fed meeting, even as Fed speakers continue to push against any expectations of rate cuts as soon as ‘early’ 2023. The next chief focus for Fed guidance will remain on the Fed’s Jackson Hole, Wyoming symposium next week. Earnings to watch Today’s European earnings focus is Carlsberg and Coloplast with the former reporting strong first-half organic growth of 20.7% vs est. 15.5% suggesting breweries are seeing healthy volume and price gains. Tencent is the key focus in Asia and especially given the recent developments in China on anti-monopoly laws and its decision to divest its $24bn stake in Meituan. In the US the focus will be on Cisco which saw its growth grinding to a halt in the previous quarter. Wednesday: Tencent, Hong Kong Exchanges & Clearing, Analog Devices, Cisco Systems, Synopsys, Lowe’s, CSL, Target, TJX, Coloplast, Carlsberg, Wolfspeed Thursday: Applied Materials, Estee Lauder, NetEase, Adyen, Nibe Industrier, Geberit Friday: China Merchants Bank, CNOOC, Shenzhen Mindray, Xiaomi, Deere Economic calendar highlights for today (times GMT) 0900 – Eurozone Q2 GDP Estimate 1230 – US Jul. Retail Sales 1430 – US Weekly Crude Oil and Product Inventories 1800 – US FOMC Minutes 1820 – US Fed’s Bowman (Voter) to speak 2110 – New Zealand RBNZ Governor Orr before parliamentary committee 0130 – Australia Jul. Employment Change (Unemployment Rate)   Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Has The Best Main Interest Rate In 7 Years
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

GBP May Skyrocket In Autumn! September's Bank's Of England Decision - ING Economics Forecasts 50bp Rate Hike

ING Economics ING Economics 17.08.2022 14:33
Eyewatering increases in household energy bills between now and next April mean inflation is likely to head above 12% from October. But core inflation might have peaked - or is close to peaking - now that goods price pressures are easing. We expect another 50bp rate hike from the Bank of England in September   UK inflation has gone above 10% for the first time since 1980, and indeed both headline and core CPI measures came in above expectations. A lot of that surprise can be traced back to a huge 2.2% month-on-month increase in food prices (in the case of headline CPI) and a sizable increase in various housing costs (in the case of core). Next month, headline inflation looks set to dip back below 10% on a near-7% fall in average petrol/diesel prices, which came too late to affect the July figures. But as everyone knows, that’s only a temporary reprieve with a 75% increase in the household energy cap on its way in October. While it’s not totally clear yet how the Office for National Statistics will treat the government’s £400 discount for household bills, this increase in electricity/gas costs looks set to take inflation above 12% later this year. UK inflation set to head above 12% Source: Macrobond, ING   Plugging the latest wholesale gas and electricity costs into the regulator’s spreadsheet, we estimate that the average household bill will have risen from roughly £2000 currently, to £3500 in October, before heading to roughly £4500 in January and above £5000 in April next year. That latter figure is £1000 higher than it was when we ran these figures at the end of July and reflects a further abrupt rise in gas prices over recent weeks. Those sequential increases mean that inflation is likely to hover around (or a bit above) 12% from October through to about February. Thereafter the energy impact will gradually dissipate and in fact, by 2024, inflation is likely to be a bit below the Bank of England’s 2% target – assuming that energy prices do indeed begin to gradually edge lower from mid-2023. What matters more for policymakers are signs of persistence in the inflation numbers. And once food and energy costs are stripped out, core inflation looks like it might have peaked – or is close. Goods price pressures look set to ease over coming months now that commodity costs have fallen and the insatiable demand for ‘stuff’ seen through the pandemic has faded, and retailers are reporting they have more inventory. Used car prices, which were one of the most extreme examples of pandemic-related goods inflation, have fallen 7% since January. What matters more for policymakers are signs of persistence in the inflation numbers Instead, it is wage pressures that will heavily influence the Bank of England’s decision-making over coming months. As we discussed yesterday, wages (at least in nominal terms) have decent momentum right now, but there’s a lot of uncertainty over how far labour demand is falling, and how much labour supply is improving. In the near term, skill shortages remain a big issue for companies For now, we expect another 50bp rate hike in September. We wouldn’t rule out another hike in November, though this heavily depends on the fiscal response from the new prime minister in September. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Liquidity at Stake: Exploring the Risks and Challenges for Non-Bank Financial Intermediaries

Sterling (GBP) And Dollar (USD) Are At The Top Of The World!!! What To Consider Next?

John Hardy John Hardy 17.08.2022 17:04
Summary:  The stronger US dollar is beginning to dominate across FX, and we haven’t even seen risk sentiment roll over badly yet, although this time it could be the US dollar itself that defines and drives financial conditions across markets. Elsewhere, we have seen an interesting fundamental test of sterling over the last couple of sessions, as sterling has begun rolling over today, even as a ripping increase in rate tightening bets in the wake of another hot CPI print out of the UK this morning. FX Trading focus: USD dominating again, GBP rate spike impact fading fast and indicating danger ahead for sterling. RBNZ hawkishness fails to impress the kiwi. The US dollar rally is broadening and intensifying, and US long yields are threatening back higher, which is finally pushing back against the recent melt-up in financial conditions/risk sentiment. The US July Retail Sales report looks solid, given the +0.7% advance in “ex Autos and Gas” sales after the June spike in average nationwide gasoline price to the unprecedented 5 dollar/gallon level. Yes, July gasoline prices were lower than June’s, but there wasn’t a huge delta on the average price for the month, and the impact of lower gas prices will likely be more in the August full month of vastly lower prices – presumably averaging closer to 4/gallon, together with the psychological relief that the spike seems in the rear view mirror, even if we can’t know whether a fresh spike awaits in the fall, after the draw on strategic reserves is halted. A strong US dollar, higher US yields and a fresh unease in risk sentiment are a potential triple whammy in which the US dollar itself is the lead character, as USDJPY has reversed back above 135.00 even before the US data, suggesting a threat back toward the cycle highs. AUDUSD has entirely reversed its upside sprint above 0.7000, refreshing its bearish trend after a squeeze nearly to the 200-day moving average there. Elsewhere, EURUSD and GBPUSD are a bit stuck in the mud, watching 1.0100 and 1.2000 respectively. The most important additional aggravator of this USD volatility in coming sessions would be a significant break higher in USDCNH if China decides it is tiring again of allowing the CNH to track USD direction at these levels. The pressure has to be building there after the PBOC’s rate cut at the start of the week. The UK July CPI release this morning raised eyebrows with another beat of expectations across the board, the day after strong earnings data. The 10.1% headline figure represents a new cycle and the month-on-month figure failed to moderate much, showing +0.6% vs. +0.4% expected. Core inflation also rose more than expected, posting a gain of 6.2% YoY and thus matching the cycle high from  April. The Retail Price Index rose 12.3% vs. 12.1% expected. The market reaction was easily the most interesting, as we have seek UK yields flying higher but failing to impress sterling much after a bit of a surge yesterday and into this morning. Now, sterling is rolling over despite a 40 basis point advance(!) in the 2-year swap rate from yesterday’ open, much of that unfolding in the wake of the CPI release today. Chart: GBPUSD Not that much drama at the moment in the GBPUSD chart, but that is remarkable in and of itself, as the soaring UK yields of yesterday and particularly today in the wake of a higher than expected CPI release are not doing much to support sterling. When rate moves don’t support a currency, it is starting to behave somewhat like an emerging market currency, a dangerous signal for the sterling, where we watch for a break of 1.2000 to usher in a test of the cycle lows below 1.1800, but possibly even the pandemic panic lows closer to 1.1500. The Bank of England hikes will only a accelerate the erosion of demand and slowdown in the UK economy that will lead to a harsh recession that the Bank of England itself knows is coming, but may have to prove slow to react to due to still elevated inflation levels, in part on a weak currency. Source: Saxo Group The RBNZ hiked fifty basis points as expected overnight and raised forward guidance for the Official Cash Rate path to indicate the expectation that the OCR will peak near 4%, a raising and bringing forward of the expected rate peak for the cycle. In the press conference, RBNZ Governor Orr spelled out the specific guidance that he would like to get the rate to 4% and take a significant pause to see if that is enough. “Our view is that sitting around that 4% official cash rate level buys the monetary policy committee right now significant comfort that we would have done enough to see inflation back to our remit.” NZ short rates were volatile, but hardly changed by the end of the day, meaning that NZD direction defaulted to risk sentiment, with a fresh dip in AUDNZD erased despite a weak AUD, and NZDUSD confirming a bearish reversal. Table: FX Board of G10 and CNH trend evolution and strength. Note the big shift in USD momentum, the most notable on the chart, although the absolute value of the SEK negative shift has been even larger over the last few days as EU woes and the growth outlook weigh even more heavily on SEK, which is often leveraged to the EU outlook, also as EURSEK has now failed to progress lower after a notable break below the 200-day moving average. Note the AUD negative shift as well, with sluggish wage growth data overnight for Q2 offering no helping hand. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs. USDJPY looks to flip back to a positive trend on a higher close today or tomorrow, the recent flip negative in GBPUSD looks confirmed on a hold below 1.2000, and AUDUSD looks a matter of time before flipping negative as well, while USDCAD has beaten it to the punch – although a more forceful upside trend signal there would be a close above 1.3000 again. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1800 – US FOMC Minutes 1820 – US Fed’s Bowman (Voter) to speak 2110 – New Zealand RBNZ Governor Orr before parliamentary committee 0130 – Australia Jul. Employment Change (Unemployment Rate)   Source: FX Update: GBP in danger as rate spike fails to support. USD dominating.
US: Drivers Demand Of Oil The Highest This Year! Silver Lost Almost The Half Of Its Recent Gaines

US: Drivers Demand Of Oil The Highest This Year! Silver Lost Almost The Half Of Its Recent Gaines

Saxo Strategy Team Saxo Strategy Team 18.08.2022 10:50
Summary:  US equities traded a bit lower yesterday after the S&P 500 challenged the 200-day moving average from below the prior day for the first time since April in the steep comeback from the June lows. Sentiment was not buoyed by the FOMC minutes of the July meeting suggesting the Fed would like to slow the pace of tightening at some point. Crude oil rose from a six-month low on bullish news from the US and OPEC.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures rolled over yesterday wiping out the gains from the two previous sessions and the index futures are continuing lower this morning trading around the 4,270 level. US retail sales for July were weak and added to worries of the economic slowdown in real terms in the US. The 10-year yield is slowing crawling back towards the 3% level sitting at 2.87% this morning. A move to 3% and potentially beyond would be negative for equities. The next levels to watch on the downside in S&P 500 futures are 4,249 and then 4,200 Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) Shares in the Hong Kong and mainland China markets declined. China internet stocks were weak across the board with Tencent (00700:xhkg) +2.7% and Meituan (03690:xhkg) +1%, being the positive outliers. Tencent reported a revenue decline of 3% y/y in Q2, weak, but in line with market expectations. Non-GAAP operating profit was down 14% y/y to RMB 36.7bn, and EPS fell 17% y/y to RMB 2.90 but beating analyst estimates. Revenues from advertising at -18% y/y were better than expected. In the game segment, weaker mobile game revenues were offset by stronger PC game revenues. Beer makers outperformed China Resources Beer (00291:xhkg) +3.8%, Tsingtao Brewery (00168:xhkg) +1.7%. COSCO Shipping Energy Transportation (01138:xhkg) made a new high at the open on strong crude oil tanker freight rates before giving back some gains. USD pairs as the USD rally intensifies The US dollar rally broadened out yesterday, as USDJPY retook the 135.00 area, but needs to follow through above 135.50-136.00 to take the momentum back higher. Elsewhere, AUDUSD has broken down again on the move down through 0.7000 and USDCAD has posted a bullish reversal, needing 1.3000 for more upside confirmation. The GBPUSD pair looks heavy despite a massive reset higher in UK rates in the wake of recent UK inflation data, with a close below 1.2000 indicating a possible run on the sub-1.1800 lows, while EURUSD is rather stuck tactically, as price has remained bottled up above the 1.0100 range low. USDCNH, as discussed below, may be a key pair for whether the USD rally broadens out even more aggressively, and long US treasury yields and risk sentiment are other factors in the mix that could support the greenback, should the 10-year US treasury benchmark move higher toward 3.00% again or sentiment roll over for whatever reason. Certainly, tightening USD liquidity could prove a concern for sentiment as the Fed turns up the pace of quantitative tightening – something it seems behind schedule in doing if we look at the latest weekly Fed balance sheet data.  USDCNH The exchange rate edged higher again to above 6.80 overnight after a brief spike higher earlier this week as China’s PBOC moved to stimulate with a small 10-basis point rate cut of the key lending rate. There is no real drama in the exchange rate yet after the significant rally this spring from below 6.40 to 6.80+, but traders should keep an eye on this very important exchange rate for larger volatility and significant break above 6.83, as China’s exchange rate policy shifts can provoke significant volatility across markets. Crude oil Crude oil (CLU2 & LCOV2) bounced from a six-month low on Wednesday in response to a bullish US inventory report that saw big declines in gasoline and crude oil stocks as demand from US motorist climbed to the highest this year while crude exports reached a record $5 million barrels per day. The prospect for an Iran nuclear deal continues to weigh while OPEC’s new Secretary-General said spare capacity was becoming scarce. US strategic reserves are now at the lowest level since 1985 and the government has by now sold around 90% of what was initially offered in order to bring down prices. While demand concerns remain a key driver for macroeconomic focused funds selling crude oil as a hedge we notice a renewed surge in refinery margins, especially diesel, supported by increased demand from gas-to-fuel switching Gold and silver Gold has so far managed to find support at $1759, the 38.2% retracement of the July to August bounce, after trading weaker in response to a stronger dollar and rising yields. Silver (XAGUSD) meanwhile has almost retraced half of its recent strong gains with focus now on support at $19.50. The latest driver being the FOMC minutes which signaled ongoing interest-rate hikes and eventually at a slower pace than the current. The short-term direction has been driven by speculators reducing bullish bets following a two-week buying spree in the weeks to August 9 which lifted the net by 63k lots, the strongest pace of buying in six months. ETF holdings meanwhile have slumped to a six-month low, an indication investor, for now, trusts the FOMC’s ability to bring down inflation within a relatively short timeframe   What is going on? Financial conditions are tightening, if modestly. Recent days have brough a rise in short US treasury yields, but more importantly it looks as though some of the risk indicators like corporate credit spreads may have bottomed out here after a sharp retreat from early July highs – one Bloomberg high yield credit spreads to US treasuries peaked out above 5.75% and was as low as 4.08% earlier this week before rising to 4.19% yesterday, with high yield bond ETFs like HYG and JNK suffering a sharp mark-down yesterday of over a percent. Factors that could further aggravate financial conditions include a significant CNH weakening, higher US long treasury yields (10-year yield moving back toward 3.00%, for example) or further USD strength. Adyen sees margin squeeze. One of Europe’s largest payment companies reports first-half revenue of €609mn vs est. €615mn despite processed volume came significantly above estimates at €346bn suggesting the payments industry is experiencing pricing pressures. Cisco outlook surprises. The US manufacturer of networking equipment surprised to the upside on both revenue and earnings in its fiscal Q4 (ending 30 July), but more importantly, the company is guiding revenue growth in the current fiscal quarter of 2-4% vs est. -0.2% and revenue growth for the current fiscal year of 4-6% vs est. 3.3%. Cisco said that supply constraints are beginning to ease and that customer cancellations are running below pre-pandemic levels, and that the company’s growth will be a function of availability. Stale FOMC minutes hint at sustained restrictive policy, but caution on pace of tightening. Fed’s meeting minutes from the July meeting were released last night, and officials agreed to move to restrictive policy, with some noting that restrictive rates will have to be maintained for some time to bring inflation back to the 2% target. Still, there was also talk of slowing the pace of rate hikes ‘at some point’, despite pushing back against easing expectations for next year. The minutes were broadly in-line with the market’s thinking, and lacked fresh impetus needed to bring up the pricing of Fed’s rate hikes. Chairman Powell’s speech at the Jackson Hole Symposium next week will be keenly watched for further inputs. US retail sales were a mixed bag. July US retail sales were a little softer at the headline level than the market expected (0% growth versus the +0.1% consensus) but the ex-auto came in stronger at 0.4% (vs. -0.1% expected). June’s growth was revised down to 0.8% from 1%. The mixed data confirmed that the US consumers are feeling the pinch from higher prices, but have remained resilient so far and that could give the Fed more room to continue with its aggressive rate hikes. Lower pump prices and further improvements in supply chain could further lift up retail spending in August. The iron ore miners are resilient despite price pressures Despite China planning more fiscal stimulus to fund infrastructure investment, the iron ore (SCOA, SCOU2) price paired back 8% this week, retreating to its lowest equal level in five weeks at $101.65, a level the iron ore price was last at in December 2021. Since March, the iron ore price has retreated 37%, with the most recent pull back being fueled by concerns China’s Covid cases are surging again with cases at a three-month high, as the outbreak worsens in the tropical Hainan province. Despite iron ore pulling back, shares in iron ore majors like BHP, remain elevated, up off their lows, with BHP’s shares trading 14% up of its July low, and moving further above its 200-day moving average, on hopes of commodity demand picking up. What are we watching next? Norway’s central bank guidance on further tightening. The Norges Bank is expected to hike 50 basis points today to take the policy rate to 1.75% despite an indication from the bank in June that the bank would prefer to shift back to hiking rates by 25 basis points, as a tight labour market and soaring inflation weigh. The path of tightening for the central bank has been an odd one, as it was the first G10 bank to actually hike rates in 2021, but finds itself with a far lower policy rate than the US, for example, which started much later with a faster pace of hikes. But NOK may react more to the direction in risk sentiment rather than guidance from the Norges Bank from here, assuming no major surprises. The EURNOK downtrend has slowed of late – focusing on 10.00 if the price action continues to back up. Japan’s inflation will surge further. Japan’s nationwide CPI for July is due on Friday. July producer prices came in slightly above expectations at 8.6% y/y (vs. estimates of 8.4% y/y) while the m/m figure was as expected at 0.4%. The continued surge reflects that Japanese businesses are grappling with high input price pressures, and these are likely to get passed on to the consumers, suggesting further increases in CPI remain likely. More government relief measures are likely to be announced, while signs of any Bank of Japan pivot away from its low rates and yield-curve-control policy are lacking. Bloomberg consensus estimates are calling for Japan’s CPI to accelerate to 2.6% y/y from 2.4% previously, with the ex-fresh food number seen at 2.4% y/y vs. 2.2% earlier.   Earnings to watch In Europe this morning, the key earnings focus is Adyen which has already reported (see review above) and Estee Lauder which is deliver a significant slowdown in figures and increased margin pressure due to rising input costs. Today’s US earnings to watch are Applied Materials and NetEase, with the former potentially delivering an upside surprise like Cisco yesterday on improved supply chains. NetEase, one of China’s largest gaming companies, is expected to deliver Q2 revenue growth of 12% y/y as growth continues to slow down for companies in China. Today: Applied Materials, Estee Lauder, NetEase, Adyen, Nibe Industrier, Geberit Friday: China Merchants Bank, CNOOC, Shenzhen Mindray, Xiaomi, Deere Economic calendar highlights for today (times GMT) 0800 – Norway Deposit Rates 0900 – Eurozone Final Jul. CPI 1100 – Turkey Rate Announcement 1230 – US Weekly Initial Jobless Claims 1230 – Canada Jul. Teranet/National Bank Home Price Index 1230 – US Philadelphia Fed Survey 1400 – US Jul. Existing Home Sales 1430 – EIAs Weekly Natural Gas Storage Change 1720 – US Fed’s George (Voter) to speak 1745 – US Fed’s Kashkari (Non-voter) to speak 2301 – UK Aug. GfK Consumer Confidence 2330 – Japan Jul. National CPI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 18, 2022
West Texas Intermediate (WTI) Price Analysis: The Oil Price Has Corrected And Dropped

Crude Oil Price Probably Not Reach 100$(USD) Shortly

Swissquote Bank Swissquote Bank 18.08.2022 15:56
The equity rally in the US didn’t pick up momentum after the Federal Reserve (Fed) released its latest meeting minutes, which sounded more hawkish-than-expected, or more hawkish-than-what-was-needed-to-give-another-boost to the US stock markets. The biggest take was that the Fed will continue tightening its policy until it sees that inflation is ‘firmly on path back to 2%’. The S&P500 fell 0.72% as Nasdaq gave back 1.20%, although the jump in the US 2-year yield was relatively soft, and the Fed funds futures scaled back the expectation of a 75 bp hike in the next meeting. Crude price completed an ABCD pattern, and it is more likely than not we see the price rebound to the $100 level in the medium run. In China, Tencent announced its first ever revenue drop as government crackdown continued taking a toll on its sales, and the pound couldn’t gain even after the above 10% inflation data boosted the Bank of England (BoE) hawks and the call fall steeper rate hikes to tame inflation in the UK. Watch the full episode to find out more! 0:00 Intro 0:28 As expected, Fed minutes were more hawkish-than-expected 3:39 Crude oil has more chance to rebound than to fall 6:02 Tencent posts first-ever revenue drop 7:14 Apple extends gains, but technicals warn of correction 8:38 Pound unable to extend gains despite rising Fed hawks’ voices Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Fed #FOMC #minutes #USD #GBP #inflation #Tencent #Alibaba #earnings #crude #oil #natural #gas #coal #futures #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
Rates Surge: US Service Sector Strengthens Yields

Sterling (GBP) And Euro (EUR) Can Barely Stand On Their Feet. Strong Dollar (USD)

Kim Cramer Larsson Kim Cramer Larsson 19.08.2022 09:12
EURUSD was rejected at key resistance at around 1.0360 and the falling upper trendline and is now close to test key support at around 1.01. If EURUSD closes below the support, parity is likely to be tested shortly after.RSI is still showing negative sentiment after failing to break above 60 threshold supporting the bearish picture. If RSI closes below 40 threshold combined with a EURUSD close below 1.01 down trend is confirmed., At the time of writing Bollinger bands are expanding indicating the initial stage of a (down)trend. IF EURUSD closes outside of the lower Bollinger band it is further a strong indication of a down trend.   Source: Saxo Group GBPUSD has formed a Double Top like pattern on the very short term. If GBPUSD closes below 1.20 it is confirmed and GBPUSD is likely to test July lows at around 1.1760 . If GBPUSD is to move the same distance as the difference between the peak and low of the Double Top formation after breaking 1.20 it could reach 1.1729 illustrated by the two vertical arrows. However, there could be more downside in store for GBPUSD. If it takes out 1.1760 there is not support before around 1.14. See weekly chart Source: Saxo Group     Source: Saxo Group Source: Technical Update - EURUSD and GBPUSD testing key supports. Will they hold or will EURUSD test parity again and GBPUSD drop to 1.14?
Tokyo Issues Warning as Yen Depreciates, USD/JPY in Positive Territory

Dollar (USD) Rules!!! Natural Gas Prices Collapse

Saxo Bank Saxo Bank 19.08.2022 13:00
Summary:  Today we note the strengthening headwinds against the melt-up in financial conditions as the US dollar continues to rise, having now broken higher against the Euro, sterling and yen, and as a new surge in US 10-year yields threatens. Elsewhere, US Natural Gas prices ease despite a weak storage build yesterday and wheat prices are retreating rapidly. In equities, focus on Applied Materials after their earning report, Canadian Solar and a look ahead at Deere. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: USD and treasury yields pushing back against the melt-up
USD/JPY Eyes Psychological Level of 150.00 Amidst BoJ's Monetary Policy and Fed's Rate Hike Expectations

The Bank Of England (BoE) Chasing The Inflation. Forex: GBPUSD, CNHJPY, EURUSD And Others

John Hardy John Hardy 19.08.2022 13:41
Summary:  The USD is breaking higher still, with important levels falling versus the Euro and yen yesterday. But the pain in sterling is most intense as presaged by the lack of a response to surging UK rates. Can the Bank of England do anything but continue to chase inflation from behind, caught between the Scylla of inflation and the Charybdis of a vicious recession? Also, USDCNH lurks at the top of the range ahead of another PBOC rate announcement on Monday. FX Trading focus: USD wrecking ball swinging again. UK faced with classic ugly choice between taking the pain via inflation or a severe recession The US dollar strength has picked up further after yesterday saw the breakdown in EURUSD below 1.0100 and a shot through 135.50 in USDJPY as longer US yields pushed to local highs. GBPUSD has been a bigger move on sterling weakness as discussed below.  A bit of resilient US data (especially the lower jobless claims than expected and a sharp revision lower of the prior week’s data taking the momentum out of the rising trend) has helped support the USD higher as longer US yields rose a bit further, taking the 10-year US treasury yield benchmark to new local highs, although we really need to see 3.00% achieved there after a few recent teases higher with no follow through higher. Looking forward to next week, the market will have to mull whether it has been too aggressive in pricing the Fed to pivot policy next year on disinflation and an easy-landing for the economy. The steady drumbeat of Fed pushback against the market’s complacency, together with a few of the recent data points (ISM Services, nonfarm payrolls, yesterday’s claims, etc.) has seen some of the conviction easing. But the key test will come next Friday, when Fed Chair Powell is set to speak on the same day we get the July PCE inflation data. Keep USDCNH on the radar through the end of today on the risk of an upside break above the range and Monday as the PBOC is set for a rate announcement (consensus expectations or another 10 bps of easing).   Chart: GBPUSD Lots at stake for sterling as discussed below, as it is a bit scary to see a currency weaken sharply despite a massive ratcheting higher in rate expectations from the central bank. The fall of 1.2000 has set in motion a focus on the 1.1760 cycle low, with an aggravated USD rise here and tightening of global financial conditions possibly quickly bringing the spike low toward 1.1500 from the early 2020 pandemic outbreak panic into focus. It is worth noting that the lowest monthly closing level for GBPUSD since the mid-1980’s is 1.2156. Without something dramatic to push back against USD strength next week from Jackson Hole, it is hard to see how this month may set the new low water mark for monthly closes. Source: Saxo Group GBPUSD slipped below 1.1900 this morning after breaking below the psychologically important 1.2000 level yesterday. As noted in the prior update, it’s remarkable to see the marked weakness in sterling despite the marking taking UK short rates sharply higher – with 2-year UK swaps over 100 basis points higher from the lows early this month. The Bank of England has expressed a determination to get ahead of the inflation spike and the market has priced in a bit more than a 50-basis-points-per-meeting pace for the three remaining BoE meetings of 2022. But is that sufficient given the UK’s structural short-comings and external deficits? Currency weakness risks adding further to spike in inflation this year. The BoE can take a couple of approaches in response: continue with the 50 bps hikes while bemoaning the backdrop and trotting out the expectation that eventually, economic weakness and easing commodity prices will feed through to drop inflation back into the range. Or, the BoE can actually get serious and super-size hikes even beyond the acceleration the market has priced, at the risk of bringing forward and increasing the severity of the coming recession. Until this week, the BoE’s anticipated tightening trajectory had prevented an aggravated weakness in sterling in broader terms, but the currency’s weakness despite a massive mark-up of BoE expectations has ratcheted the pressure on sterling and the BoE’s response to an entirely new level. Turkey shocked with a fresh rate cut yesterday of 100 basis points to take the policy rate to 13.00%. This with year-on-year inflation in Turkey at 79.6% and PPI at 144.6%, and housing measured at 160.6%. The move took USDTRY above 18.00, though it was a modest move relative to the size of the surprise. Turkish central bank chief Kavcioglu said that the bank would also look to “further strengthen macroprudential policy” by addressing the yawning difference between the policy rate and the rate commercial banks are charging for loans (more than double the official policy rate), as the push is to continue a credit-stimulated approach, inflation-be-darned.   Table: FX Board of G10 and CNH trend evolution and strength Note: a new color scheme for the FX Board! Besides changing the green for positive readings to a more pleasant blue, I have altered the settings such that trend readings don’t receive a more intense red or blue coloring until they have reached more significant levels – starting at an absolute value of 4 or higher. So far, most of the drama in sterling is the lack of a response to shifts in the UK yield curve, the broad negative momentum has only shifted a bit here, but watching for the risk of more. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs AUDNZD is crossing back higher, AUDCAD back lower, so NZDCAD….yep. Note the CNHJPY – if CNH is to make more waves, need to see more CNH weakness in an isolated sense, not just v. a strong USD. And speaking of a strong USD, the last holdouts in reversing, USDNOK and USDCHF, are on the cusp of a reversal. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1230 – Canada Jun. Retail Sales 1300 – US Fed’s Barkin (Non-voter) to speak   Source: FX Update: USD surging again, GBP spinning into abyss
"Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24"

FTSE on verge of crash as institutional interest in UK equities fades

InstaForex Analysis InstaForex Analysis 19.08.2022 17:43
Relevance up to 15:00 2022-08-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   The UK is now facing multiple problems: the cost-of-living crisis, political chaos, and labor strikes. Now, the country's blue-chip index and the only bright spot in the economy, the FTSE 100, is under threat as well. The index gained about 1.6% since the beginning of 2022, beating a 13% drop for the Euro Stoxx 50 thanks to its big exposure to value segments such as energy, miners, and banks. These segments of the economy have advanced as the economy began to broadly move away from growth. The FTSE 100 is also under threat from dimming prospects for commodities. The index rose by about 7% from its mid-July low, compared to gains of about 9% for the Euro Stoxx 50, 16% for the S&P 500 and 20% for the Nasdaq 100.     "We are beginning to see institutional interest in UK equities fade," said Daniel Gerard, senior multi asset strategist at State Street Global Markets. Gerard stated that the outlook for energy would likely fall, and that the tailwinds from rates to currency weakness from the first half of 2022 were unlikely to propel the index further. The latest survey of fund managers by Bank of America Corp. shows a similar trend. Even though the UK stock market is the market of choice for European investors, allocation to British stocks among global fund managers dropped to a net 15% underweight in August from 4% in July. For comparison, investors in the eurozone are a net 34% underweight. At the same time, fund managers have a net 10% overweight for US stocks. Even though the index is still considered to be "attractively valued" Alan Dobbie, co-manager of the Rathbone Income Fund, said he sees a "clear market consensus expecting central banks to be forced into a pivot away from their aggressive tightening programmes." As a result, investors could shift to more longer-duration growth sectors such as technology. The FTSE 100 has very few such companies.   On the other hand, the UK market still enjoys support from several positive fundamental factors: market participants get more than two-thirds of sales from outside the UK. This shields them from the country's economic and political headwinds. "Companies that are not exposed to the domestic UK economy – that have global presence – are good places to hide out from the storm," Swetha Ramachandran, an equities investment manager at GAM, said. The UK's domestic stocks remain under pressure, however. The FTSE 250, the UK's midcap stocks index, could lose 14% in 2022. The weaker pound has added to surging costs, while spiraling inflation has fueled concerns that consumers will limit spending. "While so far earnings have held up better than expected, the market is concerned this will get a lot worse," Tineke Frikkee, head of UK research at Waverton Investment Management, noted.   Read more: https://www.instaforex.eu/forex_analysis/319431
Credit squeezing into central banks – what next?

Everyone Is Dissapointed In Euro (EUR). Japanese Officials Have To Face Discontests From Yields Rise

Marc Chandler Marc Chandler 21.08.2022 23:14
For many, this will be the last week of the summer. However, in an unusual twist of the calendar, the US August employment report will be released on September 2, the end of the following week, rather than after the US Labor Day holiday (September 5).   The main economic report of the week ahead will be the preliminary estimate of the August PMI  The policy implications are not as obvious as they may seem. For example, in July, the eurozone composite PMI slipped below the 50 boom/bust level for the first time since February 2021. It was the third consecutive decline. Bloomberg's monthly survey of economists picked up a cut in Q3 GDP forecasts to 0.1% from 0.2% and a contraction of 0.2% in Q4 (previously 0.2% growth). Over the past week, the swaps market has moved from around 80% sure of a 50 bp hike next month to a nearly 20% chance it will lift the deposit rate by 75 bp.  The UK's composite PMI fell in three of the four months through July  However, at 52.1, it remains above the boom/bust level, though it is the weakest since February 2021. The Bank of England's latest forecasts are more pessimistic than the market. It projects the economy will contract by 1.5% next year and another 0.3% in 2024. It has CPI peaking later this year at around 13% before falling to 5.5% in 2023 and 1.5% in 2024. Market expectations have turned more hawkish for the BOE too. A week ago, the swap market was pricing in a nearly 90% chance of another 50 bp hike. After the CPI jump reported in the middle of last week, the market fully priced in the 50 bp move and a nearly 30% chance of a 75 bp hike.   Japanese officials have successfully turned back market pressure that had driven the benchmark three-month implied volatility to 14% in mid-June, more than twice as high as it was at the start of the year  It slipped below 10% in recent days. The BOJ was forced to vigorously defend its 0.25% cap on the 10-year bond. It has spent the better part of the past three weeks below 0.20%. The BOJ has not had to spend a single yen on its defense since the end of June. However, with the jump in global yields (US 10-year yield rose 20 bp last week, the German Bund 33 bp, and the 10-year UK Gilt nearly 40 bp) and the weakness of the yen, the BOJ is likely to be challenged again.   The economy remains challenging  The composite PMI fell to 50.2 in July from 53.2 in June. It is the weakest reading since February. It has averaged 50.4 through July this year. The average for the first seven months last year was 49.0. The government is working on some support measures aimed at extending the efforts to cushion the blow of higher energy and food prices. Japan's Q2 GDP deflator was minus 0.4%, which was half of the median forecast in Bloomberg's survey, but it shows the tough bind of policy. Consider that the July CPI rose to 2.6%, and the core measure, which the BOJ targets, excludes fresh food, rose to 2.4% from 2.2%. The target is 2%, and it was the third month above it. Tokyo will report its August CPI figures at the end of the week.   Australia's flash PMI may be more influential as the futures market is nearly evenly split between a 25 bp hike and a 50 bp move at the September 6 central bank meeting  The minutes from the RBA's meeting earlier this month underscored its data dependency. However, this is about the pace of the move. The target rate is currently at 1.85%, and the futures market is near 3.15% for the end of the year, well beyond the 2.5% that the central bank sees as neutral. The weakness of China's economy may dent the positive terms-of-trade shock. The Melbourne Institute measure of consumer inflation expectations fell in August for the second month but at 5.9%, is still too high.  Through the statistical quirkiness of GDP-math, the US economy contracted in the first two quarters of the year  A larger trade deficit did not help, but the real problem was inventories. In fairness, more of the nominal growth resulted from higher prices than economists expected rather than underlying activity. Still, it does appear that the US economy is expanding this quarter, and the high-frequency data will help investors and economists assess the magnitude. While surveys are helpful, the upcoming real sector data include durable goods orders (and shipments, which feed into GDP models), July personal income and consumption figures, the July goods trade balance, and wholesale and retail inventories.   Consumption still drives more than 2/3 of the economy, and like retail sales, personal consumption expenditures are reported in nominal terms, which means that they are inflated by rising prices  However, the PCE deflator is expected to slow dramatically. After jumping 1% in June, the headline deflator is expected to increase by 0.1%. This will allow the year-over-year rate to slow slightly (~6.5% from 6.8%). The core deflator is forecast (median, Bloomberg's survey) to rise by 0.4%, which given the base effect, could see the smallest of declines in the year-over-year rate that stood at 4.8% in June. Given the Fed's revealed preferences when it cited the CPI rise in the decision in June to hike by 75 bp instead of 50 bp, the CPI has stolen the PCE deflator's thunder, even though the Fed targets the PCE deflator. Real consumption was flat in Q2, and Q3 is likely to have begun on firmer footing.   The softer than expected CPI, PPI, and import/export prices spurred the market into downgrading the chances of a 75 bp hike by the Fed next month  After the stronger than expected jobs growth, the Fed funds futures priced in a little better than a 75% chance of a 75 bp hike. It has been mostly hovering in the 40%-45% range most of last week but finished near 55%. It is becoming a habit for the market to read the Fed dovishly even though it is engaged in a more aggressive course than the markets anticipated. This market bias warns of the risk of a market reversal after Powell speaks on August 26.   At the end of last year, the Fed funds futures anticipated a target rate of about 0.80% at the end of this year. Now it says 3.50%. The pace of quantitative tightening is more than expected and will double starting next month. There is also the tightening provided by the dollar's appreciation. For example, at the end of 2021, the median forecast in Bloomberg's survey saw the euro finishing this year at $1.15. Now the median sees the euro at $1.04 at the end of December. And even this may prove too high.    The FOMC minutes from last month's meeting recognized two risks. The first was that the Fed would tighten too much. Monetary policy impacts with a lag, which also acknowledges that soft-landing is difficult to achieve. The market initially focused on this risk as is its wont. However, the Fed also recognized the risk of inflation becoming entrenched and characterized this risk as "significant." The Jackson Hole confab (August 25-27) will allow the Fed to help steer investors and businesses between Scylla and Charybdis.  Critics jumped all over Fed Chair Powell's claim that the Fed funds target is now in the area the officials regard as neutral. This was not a forecast by the Chair, but merely a description of the long-term target rate understood as neither stimulating nor restricting the economy. In June, all but three Fed officials saw the long-term rate between 2.25% and 2.50%. To put that in perspective, recall that in December 2019, the median view of the long-term target was 2.50%. Eleven of the 18 Fed officials put their "dot" between 2.25% and 2.50%. The FOMC minutes were clear that a restrictive stance is necessary, and the Fed clearly signaled additional rate hikes are required. The discussions at Jackson Hole may clarify what the neutral rate means.  Barring a significant downside surprise, we expect the Fed will deliver its third consecutive 75 bp increase next month. The strength and breadth of the jobs growth while price pressures remain too high and financial conditions have eased encourages the Fed to move as fast as the market allows. However, before it meets, several important high-frequency data points will be revealed, including a few employment measures, the August nonfarm payroll report, and CPI.   The market is also having second thoughts about a rate cut next year  At the end of July, the implied yield of the December 2023 Fed funds futures was 50 bp below the implied yield of the December 2022 contract. It settled last week at near an 8 bp discount. This reflects a growing belief that the Fed will hike rates in Q1 23. The March 2023 contract's implied yield has risen from less than five basis points more than the December 2022 contract to more than  20 bp above it at the end of last week.   Let's turn to the individual currency pairs, put last week's price action into the larger context, and assess the dollar's technical condition  We correctly anticipated the end of the dollar's pullback that began in mid-July, but the power for the bounce surprises. Key technical levels have been surpassed, warning that the greenback will likely retest the July highs.   Dollar Index: DXY surged by more than 2.3% last week, its biggest weekly advance since March 2020. The momentum indicators are constructive and not over-extended. However, it closed well above the upper Bollinger Band (two standard deviations above the 20-day moving average), found near 107.70. Little stands in the way of a test on the mid-July high set around 109.30. Above there, the 110-111.30 area beckons. While the 107.50 area may offer some support now, a stronger floor may be found closer to 107.00.   Euro:  The euro was turned back from the $1.0365-70 area on August 10-11 and put in a low near $1.0030 ahead of the weekend. The five-day moving average slipped below the 20-day moving average for the first time in around 3.5 weeks. The MACD is trending lower, while the Slow Stochastic did not confirm the recent high, leaving a bearish divergence in its wake. The only caution comes from the euro's push through the lower Bollinger Band (~$1.0070). Initially, parity may hold, but the risk is a retest on the mid-July $0.9950 low. A convincing break could target the $0.96-$0.97 area. As the euro has retreated, the US two-year premium over Germany has trended lower. It has fallen more than 30 bp since peaking on August 5. We find that the rate differential often peaks before the dollar.   Japanese Yen: The dollar will begin the new week with a four-day advance against the yen in tow. It has surpassed the (61.8%) retracement objective of the pullback since the mid-July high (~JPY139.40) found near JPY136.00. The momentum indicators are constructive, and the five-day moving average has crossed above the 20-day for the first time since late July. It tested the lower band of the next resistance bans seen in the JPY137.25-50 area at the end of last week. But it appears poised to re-challenge the highs. As volatility increases and yields rise, Japanese officials return to their first line of defense: verbal intervention.  British Pound: Sterling took out the neckline of a possible double top we have been monitoring that came in at $1.20. It projects toward the two-year lows set in mid-July near $1.1760, dipping below $1.18 ahead of the weekend. As one would expect, the momentum indicators are headed lower, and the five-day moving average has fallen below the 20-day moving average for the first time in four weeks. It has closed below its lower Bollinger Band (~$1.1910) in the last two sessions. A convincing break of the $1.1760 low clears the way to the March 2020 low, about 3.5-cents lower. Initial resistance is now seen around $1.1860 and, if paid, could signal scope for another 3/4 to a full-cent squeeze.  Canadian Dollar:  The Canadian dollar was no match for the greenback, which moved above CAD1.30 ahead of the weekend for the first time in a month. The momentum indicators suggest the US dollar has more scope to advance, and the next target is the CAD1.3035 area. Above there, the CAD1.3100-35 band is next. The high since November 2020 was recorded in the middle of July around CAD1.3225. After whipsawing in Q1, the five- and 20-day moving averages have caught the big moves. The shorter average crossed above the longer moving average last week for the first time since July 21. Initial support will likely be encountered near CAD1.2935.   Australian Dollar:  The Aussie was sold every day last week. It is the first time in a year, and its 3.4% drop is the largest since September 2020.   The rally from the mid-July low (~$0.6680) to the recent high (~$0.7135) looks corrective in nature. Before the weekend, it tested the rally's (61.8%) retracement objective. The momentum indicators are falling, and the Slow Stochastic did not confirm this month's high, creating a bearish divergence. A break of the $0.6850-60 area may signal follow-through selling into the $0.6790-$0.6800 band, but a retest on the July low is looking increasingly likely. Initial resistance is now seen near $0.6920.   Mexican Peso:  The peso's four-day slide ended a six-day run. The peso lost about 1.6% last week, slightly better than the 2.25% slide of the JP Morgan Emerging Market Currency Index. This month, the US dollar peaked around MXN20.8335 and proceeded to fall and forged a base near MXN19.81. It has met the (38.2%) retracement objective around MXN20.20 before the weekend. The next (50%) retracement is near MXN20.3230. The 200-day moving average is closer to MXN20.41. The dollar is probing the 20-day moving average seen a little below MXN20.24. The momentum indicators have only just turned up for the greenback. We suspect there may be potential to around MXN20.50 in the coming days.   Chinese Yuan:  The yuan was tagged with more than a 1% loss against the dollar last week, its biggest decline in three months. A combination of poor Chinese data, its small rate cut, and a resurgent US dollar spurred the exchange rate adjustment. At the end of July, China's 10-year yield was about 11 bp on top of the US. However, it switched to a discount after the US jobs data (August 5), and the discount grew every day last week, reaching 35 bp, the most since late June. After gapping higher before the weekend, the greenback reached nearly CNY6.8190, its highest level since September 2020. The next target is around CNY6.85, but given the divergence of policy, a move back toward CNY7.00, last seen in July 2020, maybe a reasonable medium-term target. The PBOC's dollar fix ahead of the weekend showed no protest of the weaker exchange rate.     Disclaimer   Source: Flash PMI, Jackson Hole, and the Price Action
Euro (EUR) And British Pound (GBP) Losing The Race Against U.S. Dollar (USD)! 1 Year Statistics

Euro (EUR) And British Pound (GBP) Losing The Race Against U.S. Dollar (USD)! 1 Year Statistics

Conotoxia Comments Conotoxia Comments 22.08.2022 16:44
The recent behavior of the euro and the British pound and their potential weakness against the rest of the world's major currencies is beginning to bring concerns about a sustained deterioration in the prospects for these currencies. As Bloomberg commentators note, the behavior of the pound and the euro are worrisome. We have recently seen large shifts in the euro and pound's short-term market interest rates against the U.S. dollar, with a simultaneous weakening of the GBP/USD and EUR/USD exchange rates. Last week was the worst week for the pound in nearly two years, and at the same time, the yield on the UK's 2-year bond rose by 50 basis points. Typically, the opposite happens in developed markets. Expectations of a central bank rate hike and thus an increase in short-term market yields generally strengthen the currency. The collapse in the correlation between the exchange rate and interest rates is usually associated with emerging markets, which may have lost the battle for the credibility of keeping inflation within the inflation target. The energy dependence of the UK and Europe as a whole means that their balance sheets could deteriorate in the near future, while energy commodity inflation shows no signs of abating. Rate hikes in such a situation may not stem the tide of depreciation of the aforementioned currencies, Bloomberg reports. Thus, it seems that the winter months for the EUR and GBP may be a kind of test of the credibility of the economies in the eyes of investors. Their abandonment of investments in the EUR and GBP despite rising interest rates could be potentially worrying. Moreover, it could change the entire scene of the foreign exchange market. In the dollar index, the euro has a weighting of more than 57 percent, while the pound has a weighting of more than 11 percent. Together, these two currencies alone have a weighting of almost 70 percent. Since the beginning of the year, the euro against the U.S. dollar has lost almost 12 percent, and the British pound almost 13 percent. In contrast, since August 2021, the euro has lost almost 15 percent to the dollar, and the British pound less than 14 percent. Of the major currencies, only the Japanese yen has fared worse and has weakened by almost 20 percent against the U.S. dollar over the year. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.   Source: Pound and euro similar to currencies of emerging markets?
Bullish Dollar Sentiment Prevails Amid CFTC Report and Rate Hike Expectations

Shocking Forecast! Bank Of England (BoE) Is Expected To Hike The Rate By Over 2%!

ING Economics ING Economics 26.08.2022 13:16
UK households may collectively need up to £65bn extra in government support to offset the forthcoming rise in energy bills this winter. That would reduce the risk of a deep recession but would lead to extra Bank of England rate hikes. Markets are right to be thinking about more tightening  even if investor expectations are wildly overestimating its scale Demands for more government help with energy bills are rising UK markets now expect Bank Rate to exceed 4% next year Even by the standards of 2022, it’s been a crazy week in sterling interest rate markets. Swap rates now suggest that the Bank of England will need to hike rates as high as 4.2% (from 1.75% currently). Not only that, it implies the Bank will need to take rates even higher than the US Federal Reserve; it's the first time investors have taken that view since early this year. This trend has undoubtedly been exaggerated by very poor liquidity which means it's hard to gauge exactly how realistic investors think a 4%+ Bank Rate really is. Nevertheless, we think some of this recent reappraisal can be traced back to the eyewatering surge in gas prices and increased focus on how the government may be forced to react. The chain of logic goes something like this: higher energy costs increase the chances of a big support package from the government. And given it will hit households hard right across the income spectrum, blanket support measures (in addition to targeted payments to those on low incomes) may well be required. That, coupled with possible tax cuts depending on which candidate becomes Prime Minister in September, would materially reduce the risk of a deep economic downturn. But the Bank of England would also view it as inflationary, and may well be forced to increase interest rates even further in the autumn. Markets expect the Bank of England to hike beyond 4% next year Source: Refinitiv, ING, Macrobond   We tend to agree with this assessment – even if the scale of the rate hikes required will probably fall well short of what markets expect. We think a 50bp hike in September, coupled with another 25-50bp in November looks more likely at this stage. Let's break it down in more detail: So far, the government has announced £37bn worth of support, through a combination of direct payments to low-income households, coupled with a £400 discount for all households on their energy bills from October. When that support was announced in late May, energy bills were expected to peak at a little under £3000 in the autumn. Using that figure, a quick back-of-the-envelope calculation suggests that households would have paid roughly £65bn in aggregate on their energy bills in the period between October 2022-October 2023. For context that compares to roughly £30bn in the fiscal year 2020-21, which came before energy prices began increasing. In other words, the support measures announced to date looked, at the time anyway, like they would go some way to offsetting the energy bill increases coming down the track. Gas prices have reached dizzying levels Source: Macrobond, ING Consumers may need up to £65bn extra in government support Fast forward a couple of months, and the picture looks much more extreme. The energy regulator Ofgem has announced the average household bill will surpass £3,500 from October, and further sharp rises look inevitable. Indeed, our own estimates based on gas and electricity futures contracts this week point to an average annual household energy bill of around £5,300 across that same 12-month period from October (peaking at roughly £6,500 on an annualised basis in the three-month period between April-June 2023). That takes our aggregate household cost estimate up to around £130bn – a £65bn increase on May's projection - and this estimate is rising on an almost daily basis. Admittedly that figure is a bit of a simplification – it relies on a number of assumptions, not least that those wholesale futures contracts provide an accurate gauge of where prices will land this winter. Many of those contracts are trading fairly illiquid right now. But it gives a sense of what the new Prime Minister will be faced with when they take office in early September. Roughly speaking, the average household would see need almost £2,700 extra, were the government to match the level of support offered in June. One option would be to increase the value of payments being given to those on income support/benefits, and that seems quite likely. But in practice, a much broader response will also be needed. We’ve run a rough calculation in the chart below, and what’s striking is that across large parts of the income distribution, households may have to devote more than 10% of their disposable incomes to energy bills on average (between Oct 2022 and 2023), even accounting for existing support available. Some of these households will be able to tap savings accrued during the pandemic. That 'excess savings' level still stands at roughly 8% of GDP.  But it's hard for the government to target support on this basis, and it may find that the most practical option would be to dramatically increase the £400 energy bill discount being offered to all households. Households in most income deciles will be spending more than 10% of disposable incomes on energy Government support based on estimates produced by the UK Treasury as part of the 26 May Cost of Living package. For simplicity, we've used 2020/21 equivalised disposable income data, which in practice will have increased. Assumes energy prices increase by same percentage for all income deciles. Disposable income = after income tax/national insurance etc (but before accounting for housing and other costs) Source: ING analysis of ONS Living Costs and Food Survey, Effects of Tax and Benefits, Ofgem, UK Treasury Extra government stimulus would likely prompt additional rate hikes Whatever happens, the Bank of England will be looking at all of this through the lens of inflation. Broad-based government support would considerably reduce the chances of a recession - or at least of a deep downturn - especially given it may also be coupled with a cut to national insurance (a form of income tax) if Foreign Secretary Liz Truss becomes Prime Minister in September. The assessment also depends on what support is offered to businesses, something we've not discussed here. But broadly speaking, we agree with markets that the Bank of England would view reduced recession odds as raising medium-term inflation forecasts, and thus would likely feel obliged to hike rates further. To be clear, all of this is guesswork at this stage. Neither candidate, Rishi Sunak nor Liz Truss, have said in detail yet what level of support they’d implement this autumn. It’s not clear whether we'll get an emergency budget before the Bank of England's meeting on 15 September, but assuming we don't, we expect the Bank to opt for another 50bp then. We’ve recently argued that the Bank is reaching the latter stages of its tightening cycle. The BoE’s own August forecasts suggest inflation will be below target in a couple of years' time, regardless of whether it increases interest rates further. Inflationary pressures associated with 'core' goods are easing, given lower commodity costs, higher inventory levels and reduced consumer demand - even if wage growth will keep pressure on services inflation. But the arrival of fresh government support would provide the BoE with further impetus to hike rates aggressively in the near term, and probably into late autumn. We expect the Bank Rate to peak at roughly 2.5-2.75% in November, albeit far less than current market pricing is suggesting. Gilts are skidding off-road The jump in energy futures, as well as the surprise UK inflation report, are still being digested by the gilt market. These have brought about a rise in BoE hike expectations, an aggressive flattening of the gilt curve, and a sharp underperformance of gilts relative to US and European peers. In light of greater hike expectations, curve inversion is no surprise, and indeed the US curve has been there recently too. Worse inflation dynamics, as well as more immediate recession fears, should lead to a further flattening of the gilt curve compared to its US counterpart. With US inflation expectations looking more under control than in Europe, the spread between US and UK rates seems more directional to short-term European energy developments. The spread to EUR rates on the other hand is harder to explain. The UK is by no means the only country contemplating shielding its consumers from higher energy bills. Indeed, the measures floated so far in the UK pale in comparison to some continental alternatives. Similarly, energy inflation is a problem faced by all European countries. In short, the spread that has opened between GBP and EUR short rates has to narrow, and we think it will most likely be with lower GBP rates. The underperformance of 2Y gilts relative to Germany is overdone Source: Refinitiv, ING   The magnitude of these moves raises financial stability questions. We’ll refrain from drawing broader conclusions about the effect on the valuation of other assets beyond bonds but will simply stress that manageable rates volatility tends to be a pre-condition in many investment decisions. Closer to home, the latest moves will dash hopes of a return to more functional gilt markets. Gilt liquidity conditions continue to deteriorate Source: Refinitiv, ING   Bid-ask spreads have been propelled to new wides, and implied volatility continues to climb. These developments cast a long shadow on the Bank of England's plan to sell gilts out of its Asset Purchase Facility portfolio, even in small sizes. We don't argue that the plan should be shelved but a clearer circuit-breaker, which helps avoid adding to market stress, would make sense in our view. One could of course argue that the current episode is a one-off and that the BoE plans the sale of only £10bn per quarter in the first year. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Solid Wage Growth in Poland Signals Improving Labor Market Conditions

British Pound (GBP) Is Affected By The Prospect Of British Economy

Kenny Fisher Kenny Fisher 30.08.2022 21:43
Sterling falls to 2.5 year low The British pound is down sharply today as the downward trend continues. In the North American session, GBP/USD is trading at 1.1629, down 0.65%. We haven’t seen the pound at such low levels since March 2020. A gloomy outlook for the UK economy continues to weigh on the pound. The Bank of England has projected that inflation will hit 13%, and some forecasts expect inflation to rise even higher. On Monday, Goldman Sachs said it expected the UK to tip into a recession in the fourth quarter of 2022 and projected that the economy would decline by 0.6% in 2023. The US dollar flexed some muscles on Friday, after a hawkish speech from Fed Chair Powell at the Jackson Hill Symposium. Powell’s brief speech went straight to the point, stating that the Fed would continue raising rates until inflation was brought under control. Powell pointedly said that one or two weak inflation reports would not cause the Fed to pivot on its aggressive policy, a veiled reference to the market euphoria which followed after July’s inflation rate dropped unexpectedly, as speculation rose that the Fed would make a U-turn on policy. Powell’s speech removed any doubts about the Fed’s plans to continue raising rates, but the size of the increases will depend on key economic data, not just inflation. Overshadowed by Jackson Hole, US Personal Income and Spending data was weaker than expected. As well, the Core PCE index, the Fed’s preferred inflation indicator, fell to 6.3%, down from 6.8% and below the forecast of 7.4%. The US economy is showing signs of slowing down, and the markets will be keeping a close eye on Friday’s non-farm payroll report. If NFP is weaker than expected, we could see the likelihood for a 50 basis point increase. Currently, the markets have priced in a 66.5% likelihood of a 75bp hike, versus 33.5% for a 50bp increase, according to CME’s FedWatch. GBP/USD Technical  GBP/USD is testing support at 1.1672. Below, there is support at 1.1604 There is resistance at 1.1786 and 1.1854     This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. British pound can't find its footing - MarketPulseMarketPulse
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

GBP/USD Is Under Strong Bearish Pressure. Trading Suggestions: Sharp Break Above The Symmetrical Triangles Pattern

InstaForex Analysis InstaForex Analysis 01.09.2022 09:19
The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Early in the European session, the British Pound (GBP/USD) is trading at around 1.1574. We can see the formation of a symmetrical triangle on the 4-hour chart. If the pound manages to break above this pattern, we could expect a bullish acceleration towards the 21 SMA located at 1.1670. The British pound is under downward pressure due to the gloomy outlook for the British economy. Earlier this month, the Bank of England forecast that the British economy would enter a prolonged recession from the fourth quarter of 2022. This suggests that in the medium term the pound could reach the psychological level of 1.15 and even the low of 2020 at 1.1410. The GBP/USD pair is trading below the 21 SMA located at 1.1670 and below the 200 EMA located at 1.1957. Any technical bounce towards these levels will be seen as an opportunity to sell. On the 4-hour chart, we can see the formation of a downtrend channel since August 8. In case the downside pressure continues, a technical bounce around the bottom of the downtrend channel is expected around 1.1542. Technically, GBP/USD is under strong bearish pressure and is trading around -1/8 of Murray at 1.1598. This Murray level represents a technical reversal zone. In the event that the pound resumes its bullish cycle, we should expect it to trade above 1.1596 (-1/8 Murray), which could set the stage for a recovery in GBP and it could reach the top of the downtrend channel at around 1.1780. On the other hand, if the pound continues its downward acceleration, it is expected to fall towards the area of around 1.1542. There is daily support and it could even reach -2/8 of Murray located at 1.1475. Our trading plan for the next few hours suggests a sharp break above the symmetrical triangles pattern at around 1.1596 to buy with targets at 1.1670 and 1.1780.   Relevance up to 06:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/290925
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

Serious Pressure On The GBP/USD Pair. What Happens When The Pair Goes Down Or Up?

InstaForex Analysis InstaForex Analysis 01.09.2022 09:58
Only one signal to sell the pound was formed yesterday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 1.1654 level in my morning forecast and advised making decisions on entering the market from it. A breakthrough and reverse test from the bottom up of this range gave a sell signal, which eventually resulted in a move down by more than 50 points. Before the test and false breakout of the level of 1.1654 in the afternoon, I lacked literally one point, so I couldn't get a point from there to open new short positions. When to go long on GBP/USD: Obviously, the pressure on the pound continues to increase, including due to the large spread in the interest rates of central banks. The cost of living crisis, high inflation and the British economy rapidly sliding into recession leave no chance for bulls on the pound. Against this background, it is time to talk about updating the low that was reached for the pair during the beginning of the coronavirus pandemic in 2020 - this is, for a minute, 1.1409. Today we expect the release of the index of business activity in the manufacturing sector in the UK for August this year. It is unlikely that it will be revised for the better, so there is no need to have much hope for the restoration of the pair. In case GBP/USD falls further, forming a false breakout in the area of the nearest support at 1.1540 will lead to the first signal to open long positions in anticipation of a correction to the area of 1.1595. A lot also depends on this level, since its breakthrough can pull stop orders from speculative bears. A test of 1.1595 from top to bottom will testify to a return of demand for the pound and creates a buy signal with growth to a more distant level of 1.1650, where moving averages are passing, playing on the bears' side. The farthest target will be the area of 1.1714, where I recommend taking profits. If the GBP/USD falls further, which is more likely, and there are no bulls at 1.1540, the pressure on the pair will increase. A breakthrough of this range will lead to the renewal of the next annual low. In this case, I advise you to postpone long positions until the next support at 1.1479, but you can act there only on a false breakout. I recommend opening long positions on GBP/USD immediately for a rebound from 1.1409, or even lower - around 1.1360, counting on correcting 30-35 points within the day. When to go short on GBP/USD: Bears continue to push the pound downward. The only problem for them now is the beginning of a new month, which may lead to a small upward correction in the pound, which many have been expecting for a long time. Therefore, selling on the breakdown of annual lows is a rather risky strategy. It is much better to act on the basis of an upward correction and weak fundamental statistics, which is expected today in the UK. In this case, you can put a short stop with a fairly extensive potential for the pound's decline. The optimal scenario for selling GBP/USD would be forming a false breakout at the level of 1.1595, which was formed at the end of yesterday. This will make it possible to achieve a new fall and renewal of annual lows around 1.1540. A breakdown and reverse test of this range will give a new entry point for selling with a fall to 1.1479, and the area of 1.1409 will be a further target, where I recommend taking profits. In case GBP/USD grows and there are no bears at 1.1595, there will be ghostly chances for an upward correction, and bulls will get an excellent opportunity to return to 1.1650, where the moving averages play on the bears' side. Only a false breakout there will provide an entry point into short positions based on the pair moving downward. If there is no activity there, I advise you to sell GBP/USD immediately for a rebound from 1.1714, counting on the pair's rebound down by 30-35 points within the day. COT report: The Commitment of Traders (COT) report for August 23 logged an increase in both short positions and long positions. And although the latter turned out to be a bit more, these changes did not affect the real current picture. Serious pressure on the pair remains, and recent statements by Federal Reserve Chairman Jerome Powell that the committee will continue to aggressively raise interest rates further have only increased pressure on the British pound, which has been experiencing quite a lot of problems lately. Expected high inflation and a looming cost-of-living crisis in the UK does not give traders room to take long positions, as a fairly large range of weak fundamentals is expected ahead, likely to push the pound even further below the levels at which it is currently trading. This week, it is important to pay attention to data on the US labor market, which, among other things, determine the Fed's decision on monetary policy. Continued resilience with low unemployment will lead to higher inflationary pressures going forward, forcing the Fed to further raise interest rates, putting pressure on risky assets, including the British pound. The latest COT report indicated that long non-commercial positions rose 14,699 to 58,783, while short non-commercial positions rose 9,556 to 86,749, leading to a slight rise in the negative non-commercial net position to -27 966 against - 33,109. The weekly closing price fell off from 1.1822 against 1.2096. Indicator signals: Trading is below the 30 and 50-day moving averages, which indicates further decline in the pair. Moving averages Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case the pair goes down, the lower border of the indicator around 1.1570 will act as support. In case of growth, the upper border of the indicator around 1.1650 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.     Relevance up to 08:00 2022-09-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320520
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

GBP/USD: Sell Or Buy? Trading Suggestion

InstaForex Analysis InstaForex Analysis 01.09.2022 11:32
Analysis of transactions in the GBP / USD pair Pound tested 1.1669 when the MACD line was just starting to move below from zero, which was a good signal to sell. Resultantly, the quote fell by 40 pips, updating the yearly low. As for long positions around 1.1628, they did not bring much result because the pair traded downwards in the afternoon. Also, no other signals appeared for the rest of the day. Pound continues to update yearly lows, so there are not many people who want to buy it. Even weak employment data in the US non-farm sector did not lead to its sharp increase yesterday afternoon. A report on business activity in the UK manufacturing sector is coming today, but it is unlikely to trigger a sharp jerk in pound. The only thing that could stop the bear market temporarily is a strong oversold for all indicators. In the afternoon, the focus will shift to the data on US jobless claims, ISM manufacturing index and speech by FOMC member Raphael Bostic. For long positions: Buy pound when the quote reaches 1.1622 (green line on the chart) and take profit at the price of 1.1683 (thicker green line on the chart). Although there is little chance for a rally today, an upward correction could still happen. Take note that when buying, the MACD line should be above zero or is starting to rise from it. It is also possible to buy at 1.1572, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1622 and 1.1683. For short positions: Sell pound when the quote reaches 1.1572 (red line on the chart) and take profit at the price of 1.1525. Pressure could return at any moment, especially after weak statistics in the UK. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1622, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1572 and 1.1525. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 09:00 2022-09-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320534
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

How U.S. Unemployment Data Will Affect The Dollar And The GBP/USD Pair?

InstaForex Analysis InstaForex Analysis 02.09.2022 09:39
Yesterday, the British pound closed down 75 points. The lower shadow of the daily candle has broken through the target level of 1.1525. Consolidation below the level will open the next target – 1.1385. The Marlin Oscillator is close to the oversold zone, but still has room for decline. The price is consolidating above the support at 1.1525 on the four-hour chart, the decrease is taking place exactly, under the balance and MACD indicator lines. The Marlin Oscillator is declining in waves in downward trend territory. We are waiting for further development of the downward local trend. The US employment data for August is due out tonight, including nonfarm payrolls and the overall unemployment rate. The forecast for Nonfarm payrolls is 295-300,000, the unemployment rate is expected to remain unchanged at 3.5%. But the business media is raising fears about the data setback, as ADP Private Sector Employment Data came in at just 132,000 on Wednesday, versus an expectation of 300,000. And here we note two things: ADP Non-Farm Employment Change expectations were clearly too high, and , the second point is that ADP changed the data collection and analysis model in August, which led to a "weak" indicator. The most accurate predictive indicator of Nonfarm payrolls is still not ADP Non-Farm, but weekly claims for unemployment benefits - Unemployment Claims. And this indicator shows a decline from month to month; Thus, the sum of the latest applications for four weeks amounted to 987,000, and for the other previous four months in June and August - 1,011,000. At the same time, the employment index in the manufacturing sector (ISM Manufacturing PMI sub-index) showed an increase from 49.9 to 54, 2, and the ISM Manufacturing PMI itself for August remained at the previous 52.8 against expectations of a fall to 52.0. Thus, general market expectations for today's weak employment data in light of the looming global recession are likely to be disappointing. We are waiting for strong non-farms and the strengthening of the US dollar.       Relevance up to 05:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320621
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

Will The GBP/USD Pair Indicate A Down Trend Or a Reversal Today?

InstaForex Analysis InstaForex Analysis 02.09.2022 10:53
Technical Market Outlook: The GBP/USD pair has made another fresh low at the level of 1.1498 and continues to move away from the trend line resistance. The nearest horizontal technical resistance is seen at the level of 1.1622 and this level is the next target for bulls in a case of a local pull-back. The next target for bears is located at the level of 1.1410 (2020 low). The momentum remains weak and negative on the H4 time frame chart, so the larger time frame trend (daily and weekly) remains down until further notice. Weekly Pivot Points: WR3 - 1.18043 WR2 - 1.17392 WR1 - 1.17002 Weekly Pivot - 1.16741 WS1 - 1.16351 WS2 - 1.16090 WS3 - 1.15439 Trading Outlook: The Cable is way below 100 and 200 DMA , so the bearish domination is clear and there is no indication of down trend termination or reversal. The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame chart last week. The next long term target for bears is seen at the level of 1.1410. Please remember: trend is your friend.     Relevance up to 08:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291131
The GBP/USD Pair's Traders Still Use Every Opportunity To Buy

What To Expect From The GBP/USD In Short And Long Positions?

InstaForex Analysis InstaForex Analysis 02.09.2022 11:43
Several market entry signals were formed yesterday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 1.1595 level in my morning forecast and advised making decisions on entering the market from it. A breakthrough and reverse test from the top down of this range gave a great buy signal, which, unfortunately, did not materialize due to rather weak statistics on activity in the UK manufacturing sector, which continued to decline in August this year. This was enough for the pound to fall to another annual low. In the afternoon, after the breakdown of the next support at 1.1540, a reverse test from the bottom up of this range took place with a sell signal, which resulted in the pound's decline by more than 40 points. When to go long on GBP/USD: Today there is nothing in the UK and it is obvious that the focus will be on data on the US labor market, which, with all the bears' hopes, can push the pound to rise by the end of the week, since whatever indicators come out, they are already taken into account in current quotes. Since the opening of the week, the pound has already lost more than 200 points, and it is unlikely that there will be those who want to continue selling the pair without a more or less upward correction. For this reason, I will bet on forming the lower boundary of the new rising channel around 1.1516 and on protecting this level after the release of US labor market reports. In case GBP/USD falls, forming a false breakout at 1.1516 will lead to the first signal to open long positions in anticipation of a correction to the 1.1562 area, where the moving averages pass, limiting the pair's upward potential. However, trading is now being carried out so close to this indicator, which indicates a clear lack of bearish desire to sell the pound further and an imminent correction. A lot depends on 1.1562, as its breakthrough may pull stop orders from speculative bears. A test of 1.1562 from top to bottom will testify to a return of demand for GBP/USD and creates a buy signal with growth to a more distant level of 1.1604. The farthest target will be the area of 1.1650, where I recommend taking profits. If the GBP/USD falls further and there are no bulls at 1.1516, the pressure on the pair will increase. A breakthrough of this range will lead to the renewal of the next annual low. In this case, I advise you to postpone long positions until the next support at 1.1473, but you can act there only on a false breakout. I recommend opening long positions on GBP/USD immediately for a rebound from 1.1409, or even lower - around 1.1360, counting on correcting 30-35 points within the day. When to go short on GBP/USD: Bears continue to push the pound down, making new daily lows every day, which indicates that they are still in control of the market. The only problem they may have now is the weak statistics on the US labor market, which, despite its strength, may begin to deflate after a series of fairly large interest rate hikes that took place this summer. Therefore, selling on the breakdown of annual lows is a rather risky strategy for today. It is much better to act based on an upward correction. The optimal scenario for selling GBP/USD would be forming a false breakout at the level of 1.1562, which was formed at the end of yesterday. This will make it possible to achieve a new fall and renewal of annual lows around 1.1516. A breakdown and reverse test of this range will give a new entry point for selling with a fall to 1.1473, and a longer target will be the area of 1.1409 – the low of 2020, when the coronavirus pandemic began, where I recommend taking profits. In case GBP/USD grows and there are no bears at 1.1562, there will be ghostly chances for an upward correction, and bulls will have an excellent opportunity to return to 1.1604, where the moving averages play on the bears' side. Only a false breakout there will provide an entry point into short positions based on the pair moving down. If there is no activity there, I advise you to sell GBP/USD immediately for a rebound from 1.1650, counting on the pair's rebound to the downside by 30-35 points within the day. COT report: The Commitment of Traders (COT) report for August 23 logged an increase in both short positions and long positions. And although the latter turned out to be a bit more, these changes did not affect the real current picture. Serious pressure on the pair remains, and recent statements by Federal Reserve Chairman Jerome Powell that the committee will continue to aggressively raise interest rates further have only increased pressure on the British pound, which has been experiencing quite a lot of problems lately. Expected high inflation and a looming cost-of-living crisis in the UK does not give traders room to take long positions, as a fairly large range of weak fundamentals is expected ahead, likely to push the pound even further below the levels at which it is currently trading. This week, it is important to pay attention to data on the US labor market, which, among other things, determine the Fed's decision on monetary policy. Continued resilience with low unemployment will lead to higher inflationary pressures going forward, forcing the Fed to further raise interest rates, putting pressure on risky assets, including the British pound. The latest COT report indicated that long non-commercial positions rose 14,699 to 58,783, while short non-commercial positions rose 9,556 to 86,749, leading to a slight rise in the negative non-commercial net position to -27,966 against - 33,109. The weekly closing price fell off from 1.1822 against 1.2096. Indicator signals: Trading is below the 30 and 50-day moving averages, which indicates the pair's succeeding decline. Moving averages Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case the pair falls, the lower border of the indicator around 1.1516 will act as support. In case of growth, the upper border of the indicator around 1.1562 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.       Relevance up to 08:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320639
Agriculture: Russia's Exit from Black Sea Grain Deal Impacts Grain Prices

The Dollar Is At Highs And The Euro Is Retreating

InstaForex Analysis InstaForex Analysis 02.09.2022 11:51
The US currency is closing the week strongly higher, having confirmed its leading position once again. Its European rival is rapidly losing ground. According to analysts, EUR/USD will be retesting the parity level from time to time, which is not good for the euro. The greenback, which has reached its peak in the past 20 years, started its rally late on Thursday, September 1. On the first day of autumn, the US dollar posted the third week of continuous gains. So, on Friday, it recorded the highest value in the past two decades trading against the euro and the yen. The US dollar hit 20-year highs following the release of the manufacturing index in the US. The data showed that the ISM Manufacturing PMI stayed at the same level of 52.8 in August. Some analysts expected a drop to 52 points. Yet, as the data shows, activity in the US manufacturing sector has notably increased. The indicator has been showing strength for a long time already. In this light, the European currency is noticeably retreating against its American counterpart. The euro opened this week below the parity level but managed to win back some losses later on. In the middle of the trading week, EUR/USD recovered to 1.0078 amid lower gas and oil prices and hawkish comments from the ECB. For your reference, the euro first tested the party level in early July and then slumped to the critical level of 0.9903. The situation only worsened as EUR was struggling to leave the parity level and withstand the downward pressure. On Friday morning, September 2, the EUR/USD pair was trading near 0.9970. There is a possibility that the pair may slightly advance to 0.9980. Its breakout will open the way for sellers towards the area of 0.9800–0.9820. Monetary policy tightening of the US Federal Reserve provides significant support to the greenback. The dollar is getting stronger as the Fed's September meeting is approaching. At the same time, the European currency is in a much less favorable position as it is pressured by a protracted energy crisis in Europe. Market participants expect the Fed to maintain its tight monetary policy as this measure is necessary to tackle accelerated inflation. The rate is projected to increase by 75 basis points to 3-3.25%. On Friday, the employment data in the US will be released. Estimates suggest that the unemployment rate in August stayed close to 3.5% recorded in July. The nonfarm payroll employment has increased by 300K. The Federal Reserve will consider this data to evaluate the state of the labor market and make a decision on the key rate. Experts assume that strong macroeconomic data will greenlight the rate hike through 2023. Markets are sure that the Fed will raise the rate for the third time in September by 75 basis points. For a different scenario, the Fed will need to see a deep decline in the labor market. Yet, there are currently no signs that it is cooling down. This summer, the US economy performed relatively well despite the threat of a recession. However, analysts at Danske Bank are skeptical about the current policy of the Fed. They point out that headline inflation in the country has reached its peak while the labor market and inflationary pressure remain strong. This makes it harder for the regulator to avoid recession as this is where the US economy is headed in 2023, Danske Bank concludes.     Relevance up to 08:00 2022-09-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/320649
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

The United States And The United Kingdom Are In Different Positions

InstaForex Analysis InstaForex Analysis 02.09.2022 13:15
Despite being oversold, GBP broke through 1.1530 on Thursday. The currency is likely to remain bearish although it is now retracing up. Meanwhile, USD could strengthen against the basket of major currencies should the jobs market report for August come in strong. Yesterday, GBP/USD fell below 1.1580, briefly touched 1.1499, rebounded, and consolidated at 1.1530. In the upcoming days, the pound is expected to fall below 1.1500 due to being oversold. Support is seen at 1.1460. The price is unlikely to show strong growth. However, should bulls gain control over the market and hit 1.1605, the pound could stabilize for a while. In the long term, GBP/USD is projected to remain bearish as well. A gloomy forecast has recently come from Capital Economics.In the coming months and next year, the pound is likely to hit its lowest level versus the greenback. Meanwhile, the euro is expected to show a modest fall. If the British economy contracts by 1% and inflation is at a record rate, the Bank of England will hardly provide any support, so the pound will probably extend the downtrend. We see GBP down by 5% by the end of 2022, experts at Capital Economics wrote. The current steep drop in the pound is due to the stronger US dollar. Still, there is also an internal factor, the sterling is weaker against other currencies, including the euro, being under pressure from sales. The United States and the United Kingdom are in completely different positions. The UK has already slipped into a recession, while the US has a chance to avoid it. The recent spike in UK wholesale gas prices indicates that the country is now dealing with a deep and prolonged recession. The greenback is also strong due to decreased risk appetite as investors fear a global economic downturn. It is commonly known that the greenback gains and the pound suffers losses during turmoil. The pound is acting more like a risk asset due to a massive current account deficit in the UK. The Bank of England's stance on interest rates is also weighing on the pound. The regulator can't afford to act even more aggressively. So, the pound is likely to lose even more. The Bank of England is planning a 50 basis-point rate hike, but markets hope for a bigger increase. They anticipate the Bank of England to be more decisive that any other central bank due to record inflation in the country. In order to raise interest rates by 180 basis points by the end of the year, the regulator should make at least one 75 basis-point move. However, there have been no signs of such a likelihood so far. In light of the continuing downtrend, the forex market seems to have long realized that the Bank of England will not live up to these expectations. According to Capital Economics, interest rates will be raised at a slower pace than investors hope. Meanwhile, the ECB's and the Fed's actions will satisfy market expectations. GBP/USD is seen falling to the all-time low of 1.0500 by the middle of 2023. EUR/USD could sink as low as 0.9000 by that time, Capital Economics said. Meanwhile, EUR/GBP could reach 1.1700.   Relevance up to 10:00 2022-09-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/320671
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

More Information About Liz Truss' Plan May Make Markets Become Calmer

ING Economics ING Economics 06.09.2022 11:00
European curves react to higher energy prices and to news of fiscal support in the same way, by bear-flattening. More yield upside is to be expected when more spending is announced but at least a lot of the bad news is out already for gas supply When fiscal gets involved Even if it doesn’t require further borrowing, rates markets immediately saw the hawkish implications to Germany’s third relief package. In keeping with ever rising European Central Bank (ECB) hike expectations, the prevailing view seems to be that any measure that limits growth downside would also free the central banks’ hand in tightening policy further. There are actually few on the record comments to that effect in the eurozone but, in a period of hyper sensitivity to inflation, we wouldn’t be surprised to see more yield upside as other governments unveil their own support packages. Remember that this cycle's high in 10Y Bund yields is only 20bp away around 1.77%. Details on Truss' fiscal plans could amount to a reduction of uncertainty for markets One potential exception to that rule may be the UK. The run-up to Liz Truss being announced as Prime Minister has been a very difficult period for gilts. We’ve written already of the deadly combination of fiscal spending, monetary tightening, and foreign outflows for sterling bonds. The lack of clarity about the extent, funding, and inflationary impact of fiscal support during the leadership campaign may have exacerbated the sell-off in gilts. Actual details on her fiscal plans are starting to emerge,with Bloomberg reporting a potential cost of £130bn over 18 months to cap energy bills at £2,000 per houshold. In time, this could amount to a reduction of uncertainty for markets, and could be greeted with more stable performance for gilts. 10Y gilts have lagged international peers during the leadership campaign Source: Refinitiv, ING Central banks waiting in the wings Of course, central banks have played a role in the market’s sensitivity to fiscal headlines. The Bank of England (BoE) for instance has explicitly said more fiscal spending may force it into more aggressive tightening… but it could also be responsible for a further reduction in market uncertainty soon. Our, admittedly optimistic, take is that in addition to more details about fiscal measures in the coming days, next week’s BoE meeting should also clarify its reaction. Paradoxically, the more hawkish the BoE, the more likely it is to regain a Fed-like degree of control on its domestic rate market. The more hawkish the BoE, the more likely it is to regain a Fed-like degree of control on its domestic rate market The market reaction to a full cut-off of Nord Stream gas flow from Russian is another place where central banks’ hand can be clearly seen. The ECB for instance has encouraged market participants to think that it will react to realised inflation, most of which is energy-driven, rather than rely on its forecast. Fears of second-round effects also participate in this overreliance on energy price developments in rates markets. Even if we do think this may be an overreaction, this reinforces our view that the EUR swap and German curves will invert this winter. The whole EUR swap curve will soon be inverted, and the German curve is set to follow suit Source: Refinitiv, ING Today's events and market view Germany is scheduled to sell inflation-linked bonds and Austria will carry out auctions in the 3Y and 10Y sectors, but this will be eclipsed by syndicated sales from France (new 20Y) and Italy (new 13Y green bond) ,which we expect the price today. The duration impact should be non-negligible in illiquid markets but we surmise that this has been largely played out in the run-up to the deals. We wouldn’t be surprised to see the curve flatten after pricing. The Italian sale comes in a context of a shrinking greenium across sovereign, sub-sovereign, supranational, and agency bond markets. Data is on the light side in Europe with mostly construction PMIs from Germany and the UK to look out for. US PMI and ISM services should gather more attention. In particular, a decline in the price components would be greeted as further evidence that the Fed is on its way to meeting its inflation target. An improvement in the growth-relevant indicators might overshadow this however, with markets currently minded to take a hawkish implication to most releases and events. Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The UK Markets Remain Volatile, Possible Contraction Of The Eurozone Economy

Would Liz Truss (UK Prime Minister-Elect) Freeze Energy Bills? Bitcoin Jumped Above $20K, But Seems Not To Feel Strong.

Craig Erlam Craig Erlam 06.09.2022 11:50
It’s been a mixed start to trade on Tuesday, similar to what we saw in Asia overnight, and as we await the return of the US after the long bank holiday weekend. Europe in particular was rattled on Monday by the Gazprom announcement that came after the close on Friday in relation to Nord Stream 1. The latest move in the apparent weaponisation of energy supplies has once more created huge uncertainty ahead of the winter. Conveniently the announcement came hours after the G7 agreed to a Russian price cap and as Europe was boasting about being ahead of schedule on filling gas stores. RBA signals more hikes ahead The Reserve Bank of Australia raised the cash target rate by 50 basis points to 2.35% on Tuesday, in line with expectations, as it continues to aggressively push back against soaring inflation. The central bank reiterated that it is not on a pre-set path but will continue hiking interest rates with markets of the belief that there’s still plenty more to come including another 50bps next month and 25 at each of the following three. Read next: Russia Suspends Flow Through The Nord Stream 1 Pipeline, Cotton Futures, Gold Prices Increase For The First Time In 3-weeks| FXMAG.COM Of course, forecasting even that far ahead has become far more challenging in such an uncertain global environment but it’s clear that central banks around the world still have a massive job on their hands and the coming months will be tough. That said, the RBA is of the belief that inflation will peak later this year before returning to 3% in 2024. PBOC desperate to support CNY The PBOC once again set a stronger yuan fix today as it continues to push back against its decline. Controlling the decline in the yuan has clearly become a huge priority, with the 2% cut in the FX reserve requirement ratio intended to support that initiative. Rather than stop a decline in the yuan, these efforts may simply slow it with a move above 7 against the dollar looking like a matter of when rather than if, given the relentless rally in the greenback. Hit the ground running Liz Truss will be sworn in as Prime Minister today and will have to hit the ground running as the UK prepares for a brutal winter. Reports claim the new PM intends to freeze energy bills this winter at a cost of up to £130 billion, a move that would certainly fall into the bold category. The question is what impact it will have on inflation and gas demand. This will be a core part of what will need to be a much greater package to shield the economy from the grim forecasts we’ve seen in recent weeks. Struggling for rally momentum Bitcoin pushed briefly back above $20,000 today but is struggling to build on that. Broadly speaking, it’s trading in a range between $19,500 and $20,500 as it has for a little over a week now but rallies do appear to be increasingly struggling which may be a slightly bearish signal. A break of $19,500 would confirm that although with trading currently so choppy, it’s tough to read too heavily into today’s moves so far. The broader market environment also remains quite risk averse which could work against cryptos. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Steady after a rocky start - MarketPulseMarketPulse
A Bright Spot Amidst Economic Challenges

Real Wages Will Falling. Expected Actions Of The European Central Bank

ING Economics ING Economics 04.09.2022 09:21
The expanding negative energy shock is likely to initiate a recession from the third quarter and we're likely to see a GDP contraction. Rising natural gas prices are also keeping inflation higher for longer. A more hawkish ECB is likely to raise rates again in September and October, but the recession should put a - temporary - end to the tightening cycle In this article Recession is coming Energy shock erodes real incomes Inflation to come down only very gradually A more hawkish ECB Recession is coming After a relatively strong second quarter (+0.6% quarter-on-quarter) after Covid lockdowns were largely stripped away, the eurozone has now probably fallen into recession. The Composite PMI indicator fell in August to 49.2, the second month in a row below the 'boom-or-bust' level. With the forward-looking new orders component also declining again, it looks as if it is only going to be downhill in the coming months. And the strong inventory build-up will add to production cutbacks.  Survey indicators are at recession levels Source: Refinitiv Datastream Energy shock erodes real incomes The headwinds facing the eurozone are only increasing. The summer drought will not only hurt the agricultural sector, but the low level of the Rhine River is also distorting supply lines for German manufacturing, while in France the lack of cooling water is impacting nuclear power generation. This, however, is small fry compared to the breadth of the negative energy shock Europe is experiencing. Natural gas prices have more than tripled since June, pushing more energy-intensive companies to cut production or idle plants. The hit to household purchasing power is massive; real wages are falling more than 5% year-on-year. With consumer confidence hovering at very low levels, chances are slim that households will delve into their savings to uphold their consumption expenditures. And as companies are equally hit by the energy shock, final demand is faltering and financial conditions are tightening and we see business investment falling back in the coming quarters. As we expect the energy market to remain very tight (and prices therefore high) we pencil in three consecutive quarters of negative growth, starting in the third quarter of this year. This still results in 2.6% growth in 2022, mainly on the back of a strong carry-over effect, while for 2023 we now expect a 0.6% GDP contraction. Inflation to come down only very gradually As for inflation, the higher cost of natural gas is only partially compensated by slightly lower oil prices. On top of that, a natural gas levy in Germany will add to inflation from October onwards. This will keep headline inflation close to double-digit levels in the next three months. At the same time, underlying inflationary pressures are bound to soften on the back of the economic slowdown. In the business surveys, selling prices' expectations have now been moderating for a few months in a row, while supply chain tensions and shipping prices have also eased. And the second-round effects, popping up through higher wages, remain muted for now. As a matter of fact, negotiated wages only rose 2.1% year-on-year in the second quarter, according to the ECB. Putting it all together, inflation will only come down very gradually, although we see a return to the 2% level towards the end of 2023 as still feasible provided, of course, that energy prices don’t increase much further. Selling prices' expectations are moderating   A more hawkish ECB The European Central Bank has become somewhat more hawkish. In Jackson Hole, ECB Board Member, Isabel Schnabel, said that the uncertainty about inflation persistence requires a forceful policy response, a statement that was echoed by several members of the Governing Council. We therefore now expect a 50-basis point rate increase in September and another 25bp rise in October. Thereafter we still expect to see a long pause. Let’s be clear about this: if the ECB is consistent with the risk scenarios it published in June, it should already forecast a recession in its September staff forecasts. While the bank might still pull off a rate hike in October, the necessity of tightening further after that, in the midst of a worsening recession, will probably not appeal to the majority of the Governing Council members.   Inflation GDP Eurozone ECB   Source: https://think.ing.com/articles/monthly-eurozone-economy-set-to-shrink-in-2023/?utm_campaign=September-01_monthly-eurozone-economy-set-to-shrink-in-2023&utm_medium=email&utm_source=emailing_article&M_BT=1124162492   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The UK Markets Remain Volatile, Possible Contraction Of The Eurozone Economy

British Pound (GBP) And UK Economy: Next Week Is Full Of Vital Releases - Inflation, GDP And Labour Market Data

ING Economics ING Economics 09.09.2022 15:38
Next week's US inflation numbers will need to be quite surprising for the Fed to deviate from a 75bp hike at its September meeting. The Bank of England's scheduled meeting has been postponed, and instead the focus will be on several pieces of key UK data In this article US: Core inflation likely to rise to 6.1% UK: Bank of England to stick to 50bp rate hike despite energy package Source: Shutterstock Article updated on 9 September to reflect the postponement of the Bank of England's scheduled meeting US: Core inflation likely to rise to 6.1% We have the last full week of economic data ahead of the September Federal Open Market Committee (FOMC) meeting, but it will take some surprising numbers to make the Fed deviate from a third consecutive 75bp rate hike. After all, the economy is posting decent growth, creating jobs in significant numbers, and Fed Chair Jerome Powell is arguing that “we need to act now, forthrightly, strongly as we have been doing and we have to keep at it until the job is done”. The data includes CPI, which should show headline inflation being depressed by lower gasoline prices, but core inflation is likely to rise to 6.1% from 5.9%. Retail sales should post flat growth, but remember this is a nominal figure and those falling gasoline prices will be a major drag. Real consumption is likely to be up in the third quarter. We also expect manufacturing output to grow further. The deteriorating global outlook and weakening domestic housing market combined with the cumulative impact of policy tightening and the strong dollar means we think the Fed will moderate its hiking to 50bp in November and 25bp in December. Weaker wage pressure and more limited month-on-month increases in CPI thanks to lower import and other input costs would certainly help this argument. UK: Bank of England to stick to 50bp rate hike despite energy package The United Kingdom will observe a period of mourning following Queen Elizabeth II’s death on Thursday, and Parliament will be adjourned during this time. The Bank of England's scheduled meeting has also now been postponed to the following week, but the ONS has confirmed that several pieces of important data will still be released. Here's what we expect: July GDP (Monday): Expect a large bounce-back from June, where the addition of an extra bank holiday artificially distorted the monthly GDP numbers. Depending on the arrangements during the period of mourning, the addition of an extra bank holiday in September is possible, and this would factor into the GDP numbers for the current month. We’ll therefore have to wait until the fourth quarter to get a clearer idea of how the economy is faring in GDP terms, and we suspect there’s still a risk of a negative growth figure. However, the announcement of an energy price guarantee by the government considerably reduces the risk of a deep downturn, and potentially also a technical recession. Jobs (Tuesday): Hiring demand is falling, though recent data and surveys have suggested that the worker shortages plaguing the jobs market have only improved slightly over recent months. The announcement of an energy price cap for businesses should help limit what otherwise could have been a more immediate rise in redundancies as firms’ costs increased. We expect the unemployment rate to remain stable next week, but we’ll also be watching closely for signs of a more pronounced return of inactive workers to the jobs market. Inflation (Wednesday): A 6% fall in petrol/diesel prices through August will drag headline inflation slightly lower. That doesn’t mean we’re past the peak, though the introduction of the energy price cap means inflation is less likely to materially surpass 11% in the autumn. Without the cap, we’d forecast inflation would go to 16% or above in January. This is a double-edged sword for the BoE. On one hand, the reduced the peak in headline inflation should ease concerns about consumer inflation expectations becoming even less anchored. That points to another 50bp rate hike when the BoE meets later in September, despite the Fed and ECB going more aggressively. The BoE has shown in past meetings that it isn’t pressured to follow those other central banks, albeit the hawks will be worried about the recent slide in sterling. They will also argue that the government’s action increases the risk of inflation staying elevated in the medium-term, given the reduced risk of recession, Some members are therefore likely to vote for a 75bp hike at the next meeting. But ultimately with a lot already priced into markets for the BoE, policymakers will be wary about adding fuel to the fire. As we saw with the ECB on Thursday, the decision to go with a 75bp hike saw markets price that as the default move at the next meeting. Key events in developed markets next week Source: Refinitiv, ING This article is part of Our view on next week’s key events View 3 articles   TagsUS Bank of England   Read this article on ING Economics   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more    
Solid Wage Growth in Poland Signals Improving Labor Market Conditions

UK GDP Grew Only 0.2%! British Pound May Expect A 50bp Rate Hike. Would Labor Market Get Better Thanks To The Energy Price Cap?

ING Economics ING Economics 12.09.2022 10:00
The absence of a post-bank holiday rebound means July's GDP grew by only 0.2%, and we should expect further volatility over the next few months. But big picture, the announcement of an energy price guarantee should materially reduce the depth of a downturn this winter, even if it doesn't totally rule out the risk of a technical recession UK growth should be volatile in the months ahead July's GDP figures are disappointing The UK economy expanded by 0.2% in July, which was less than might have been expected. June had featured an extra bank holiday in recognition of the Queen’s Jubilee, and that had triggered an artificial drop in activity in some key sectors – albeit less pronounced than during the equivalent holidays in 2002 and 2012. However, July’s figures are largely absent of the mechanical rebound one might have expected, not least because that's what we saw after those previous jubilee holidays. For instance, manufacturing output grew only 0.1% in July, having fallen by 1.6% in June. It was a similar story in wholesale/retail and construction. We’re reluctant to pin any particular economic narrative to that, and instead, we think we’ll need to take this and indeed the next few months’ figures with a slight pinch of salt. The extra bank holiday this month, which coincides with Queen Elizabeth II’s funeral on Monday, means we’re likely to see similar volatility in the data during September and October. That means we’ll most likely need to wait until later in the fourth quarter to get a clearer sense of where the economy is headed, at least looking through the lens of the GDP numbers. For now, it looks like third-quarter growth will be largely flat, and the fourth quarter slightly negative. Government energy price guarantee should reduce the depth of a downturn Bigger picture, the announcement of an energy price cap by the government last week should make a material difference to the outlook this winter. The average household will see their energy costs capped at £2500 for the next two years, which when you factor in some existing support, should mean bills stay roughly the same as they are now for the time being. Businesses will also receive similar support for an initial six-month period. While we’d caution about automatically assuming this means the economy avoids a technical recession, it should help limit the depth of any downturn over winter to a few tenths of a percent. We’re also hopeful that the announcement of business support can help insure against a material rise in unemployment. Hiring demand has been slowing, and the clear risk was that the sharp rise in energy bills would see redundancies (which are currently at their lows) begin to rise. Incidentally, with the GDP figures looking volatile, we suspect the Bank of England will put slightly more emphasis on other data, including tomorrow’s jobs figures. We expect a 50bp rate hike when the Bank meets next week, and we’re pencilling another such move in November. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Forex: What to expect from British pound against US dollar - January 17th

UK Job Market Means More To Bank Of England (BoE) Than You May Think

ING Economics ING Economics 13.09.2022 11:24
The number of workers classified as long-term sick has jumped dramatically in the past couple of months, and that's one reason why firms are still struggling to source the staff they need. While worker demand has cooled, Bank of England hawks will be worried that these shortages will continue to push up wage growth   At a headline level, the latest UK jobs numbers don’t look too bad. Unemployment fell by two-tenths of a per cent to 3.6%, the lowest level since 1974. But this is driven not by an increase in the number of people in employment, but primarily by another dramatic rise in those classified as inactive – that is neither in work nor actively seeking it. Alarmingly, the number of people classifying as not working due to long-term sickness is up by almost 400,000 since late 2019, and almost 150,000 in the last two months' worth of data alone. It’s hard to escape the conclusion that this is linked to the pressures in the NHS (National Health Service). The Bank of England will view all of this through the lens of the worker shortages that have plagued the jobs market for the past year or so. While some causes of that shortage appear to be abating – e.g. inward migration of non-EU workers has increased noticeably this year – other factors are, if anything, getting worse. A look at the survey evidence suggests firms are finding it no easier to find staff than they were a few months ago either. Both the BoE’s Agent’s survey and the ONS’ bi-weekly business survey have shown no improvement in the number of firms saying they are struggling to source workers. UK jobs market dashboard Worker shortages is taken from a question in the ONS bi-weekly business survey Source: Macrobond, ONS, ING   At the same time, demand for employees does appear to be cooling, though not necessarily very quickly. The level of job vacancies has fallen from its high, but the number of redundancies is low and stable (even if the level increased slightly in this latest data). The question now is whether the pressure from energy prices will force companies to revisit these plans and make more material changes to their workforce. We would expect a more visible impact on the jobs market over the next few months, but the government’s newly-announced pledge to cap corporate energy bills as well as households’ should help avoid a sharp rise in unemployment this winter. Persistent worker supply constraints coupled with so far only modest signs of reduced hiring demand will provide further ammunition for Bank of England hawks to push ahead with further tightening. We expect a 50 basis-point rate hike next week, and another in November. While markets may be overestimating how far the Bank will take interest rates over the coming months, we think the BoE is less likely to be cutting rates early into 2023 than some other global central banks. Read this article on THINK TagsUK jobs Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
UK Economy: Mixed Data. British Pound (GBP) Amid Foreign Trade Slippage

UK Economy: Mixed Data. British Pound (GBP) Amid Foreign Trade Slippage

Alex Kuptsikevich Alex Kuptsikevich 13.09.2022 10:53
Monthly estimates showed that the UK economy added 2.5% over the three months to July vs the same period a year earlier. The negative surprise was a 0.3% decline in Industrial Production in July compared to expectations of a 0.4% gain after a 0.9% slip in June. Production added a modest 1.1% compared to July last year. Construction and industrial production indices are back in the 2019 range after a quick dip and subsequent recovery due to the pandemic. And they are stagnating for some time around these levels. Manufacturing and construction are at the forefront of the economic cycle, and their message is not optimistic at all. Foreign trade is much more dynamic. Import values have fallen for two months after ballooning during the first five months of the year, while exports have remained close to the highs. These local dynamics have reduced the foreign trade deficit to its lowest level since December 2021. What does the current status of foreign trade mean to Sterling? The narrowing of the foreign trade deficit is positive for the Sterling as it reduces capital outflows from the country. On the other hand, if the weakness in imports is linked to stagnant domestic demand and production, it does not carry anything good in the medium term. GBPUSD seems to have pushed back from the bottom in the middle of last week, but this dynamic is more attributed to the USD profit-taking after the rally rather than investments in the pound.
The UK Markets Remain Volatile, Possible Contraction Of The Eurozone Economy

United Kingdom: Inflation Is Expected To Hit 11% As Energy Price Cap Is Set To Be Applied

ING Economics ING Economics 14.09.2022 13:37
Headline inflation will rise a little further having eased back below 10% in August, and it's likely to stay around 11% into early next year before falling back more dramatically. However, the Bank of England is watching wage growth more closely, as the hawks worry that worker shortages could lead to core inflation staying more persistently above target The introduction of a government cap on household energy prices means that we should now be fairly close to the peak in these headline figures The absence of another upside surprise to UK inflation this month takes a bit of pressure off the Bank of England to move even more aggressively when it meets next week. Headline CPI came in a touch lower than both consensus and last month’s level, at 9.9%, and that’s largely because of a near-7% fall in petrol/diesel prices during August. We expect another 2% decline in next month’s figures. The introduction of a government cap on household energy prices means that we should now be fairly close to the peak in these headline figures. The fact that electricity/gas bills won’t be rising by around 80% in October and a further 30-40% in January means that the peak in CPI should be around 5 percentage points lower. With the government due to cap the average household energy bill at £2500, up from around £2000 now, we expect a peak in the region of 11% in October. That's compared to 16% in January which is what we’d forecasted before the support was announced. UK inflation now set to peak at around 11% after energy price support Source: Macrobond, ING forecasts   We’d expect inflation to stay around there until early next year, before cooling more quickly as energy base effects kick-in. We think it could be more-or-less back to the Bank of England’s 2% target by the end of next year, crazy as that currently seems. But what policymakers are more interested in is core inflation – or to put it more accurately, the more persistent parts of the inflation basket. Here the news is mixed. On a month-on-month price basis, the increases we saw in August do seem fairly broad-based. However, there are signs that ‘core goods’ inflation is easing off, linked perhaps to the rise in retailer inventory levels relative to sales. That’s a function of supply chains beginning to improve, and in some cases commodity prices having fallen, which is coinciding with reduced demand for goods. Higher inventories and lower sales reducing pressure on goods prices Source: Macrobond, ING   However, the Bank is more focused on wage growth, and as we noted yesterday, the worker shortages that have plagued the jobs market for several months now don’t appear to be resolving themselves very quickly. The BoE’s hawks are concerned that this will translate into persistent pressure on wage growth. We aren’t totally convinced this will be enough to swing the pendulum in favour of a 75 basis-point rate hike next week, despite both the ECB and Federal Reserve going down this path. It’s a pretty close call, not least because the hawks will be worried about the recent slide in sterling, and markets are closer to pricing a 75bp move than a 50. But for now, we think another 50bp move next week is the most likely outcome, followed by another such move in November. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

It's Going To Be A Thrilling Week For Euro, Dollar And British Pound (GBP)! Bank Of England And Fed Decide On Interest Rates!

ING Economics ING Economics 16.09.2022 11:54
The prospect of lower near-term inflation takes some of the pressure off the Bank of England to move even more aggressively on Thursday. We expect a second consecutive 50 basis point rate hike, although it's a close call between that and a 75bp move Our Bank of England call We narrowly favour a 50bp hike on Thursday, taking the Bank Rate to 2.25%, although 75bp is clearly on the table and we would expect at least a couple of policymakers to vote for it. It's even possible we get a rare three-way vote – the first since 2008 – if dovish committee member Silvana Tenreyro votes for a 25bp hike as she did in August. If our call is correct, then we expect another 50bp move in November and at least another 25bp in December. That would take Bank Rate to the 3% area. It's a tough meeting to call... Next week’s Bank of England meeting is crucial. It will tell us not only how worried policymakers are about the slide in sterling and other UK markets, but also how the government’s decision to cap household/business energy prices will translate into monetary policy. It has also, undeniably, become a close meeting to call. Hawks at the Bank of England will undoubtedly be concerned about the independent sterling weakness we've seen recently (down 4% in trade-weighted terms), even if in practice it’s unlikely to make a huge difference to the big-picture inflation outlook. Both the Fed and ECB will have also done (at least) 75bp hikes by Thursday, and markets are increasingly concluding the BoE will do the same. But we’d caution against assuming UK policymakers will ramp up the pace of rate hikes simply because that’s what everyone else is doing – or indeed because that’s what markets are pricing. As recently as June, the BoE hiked by ‘only’ 25bp, despite the Fed having done 75bp the night before, and defying market expectations for more. Indeed, there are good reasons to think the Bank will ‘stick to its guns’ and simply repeat the 50bp hike it executed in August. Government energy price guarantee means inflation unlikely to go much higher Source: Macrobond, ING forecasts   One immediate consequence of the government’s decision to cap household electricity/gas bills this winter is that headline inflation should be dramatically lower. We now expect CPI to peak at 11% in October, only slightly above where it is now, compared to 16% in January had the government not intervened. It also means headline inflation should be back around the BoE’s 2% target at the end of next year, crazy as that sounds. All of that should help keep consumer inflation expectations in check, and in fact, we’ve already seen a noticeable pullback in long-term price expectations according to the latest BoE survey. Admittedly there appears to be a wide range of views at the BoE about how much all of this actually matters. But we know from recent comments, notably from hawk Catherine Mann, that some policymakers have had a keen eye on consumer expectations over recent months. By the BoE's own measure, consumer inflation expectations have dipped Source: Macrobond   The flip side, of course, is that extra government support potentially means higher medium-term inflation, even if headline rates are lower in the very near term. We think this is ultimately what most committee members will be more interested in. The hit to GDP this winter is likely to be more moderate than the 2% cumulative decline the BoE forecast in August, while the sharp rise in unemployment it projected is less likely to materialise too. With worker shortages proving to be a long-running issue in the jobs market, the risk is that higher wage growth could become a persistent feature that requires more central bank tightening. That doesn't necessarily have to manifest itself as a radically higher policy rate, and we still believe investors are overestimating the tightening to come. The swaps market is pricing a terminal rate in the region of 4.5% next year. Hiking by 75bp risks adding even more fuel to the fire, something we suspect the committee will be wary of doing, even if there are advantages in front-loading hikes. But even if the Bank doesn’t hike as far as markets expect, we do think the arrival of government stimulus means the BoE won’t be racing towards rate cuts next year, unlike some of its developed market counterparts. Gilts, looking for some clarity Gilts are looking for a much-needed reduction in uncertainty next week. Clearly, a 50bp hike would be a dovish surprise and help reverse some of the front-end’s weakness but even in the case of a 75bp move, the BoE clarifying its reaction function with regards to the energy package would be helpful. Fiscal and monetary policy competing with each other is an unnerving thought for bondholders. The Treasury’s fiscal event next week should also help answer any lingering questions about the size and financing of the energy support measures. Gilts should widen to 200bp against Bund on a generous fiscal package Source: Refinitiv, ING   Even if the gilt ‘fear factor’ eases next week, it doesn’t answer the key question: who will buy all these gilts? A deficit-financed energy package will add to supply and to the BoE reducing the size of its portfolio. Private investors will have to make up the shortfall. This is not impossible but they will likely be some reluctance initially given the amount of new debt released into the market. The BoE’s plan to start outright sales of gilts, albeit in small amounts initially, is an additional source of concern. On Thursday, the Bank is expected to vote in favour of starting this process, despite concerns about stress in the UK bond market. Divergence in the size and financing of energy packages in the UK and the eurozone means the spread between 10Y gilts and bund should widen to 200bp. Read this article on THINK TagsUK fiscal policy Inflation Central banks Bank of England Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Forex: What to expect from British pound against US dollar - January 17th

UK Sales: British Pound (GBP) Most Probably Doesn't Like August Prints

Alex Kuptsikevich Alex Kuptsikevich 16.09.2022 12:30
A package of retail sales statistics in Britain appears to have removed the last layer of support for the Pound, sending it into a dive. GBPUSD earlier today renewed its lows since 1985, dropping to 1.1350. Sales Drop Fresh data showed a 1.6% m/m and 5.4% y/y drop in sales, which was noticeably weaker than the expected 0.5% m/m and 4.2% y/y decline. This upsetting surprise has added to the pressure on Pound, which has been losing 0.9% against the dollar and yen and 0.6% against the euro after the report. Where Can GBP/USD Go? There has been an almost non-stop, albeit very measured, sell-off in the Pound since August 11, with a brief pause for a shake-out of the dollar bulls' positions. In turn, this momentum looks to be part of a downward wave since March. In that case, the GBPUSD can fall to 1.06, where the 161.8% Fibonacci mark passes from the February peaks to the July lows. It is also worth noting that this technical target is very close to the historical lows of the GBPUSD at 1.0520, which only adds to its attractiveness for the rest of the year. Bank Of England Due to inflation being off the charts by historical standards, the Bank of England has much more motive to make currency or verbal interventions to buy the collapse of the Pound. This is especially true given the recent one-way movement in the British currency. As such, traders and investors should be prepared for a rate hike of more than 50 points next week, as previously done and expected. A tightening of monetary authority rhetoric is also likely.
Sustainability-Linked Products: Navigating Growth and Challenges for the Future

British Pound (GBP) Has Decreased By 15 Percent So Far!

Conotoxia Comments Conotoxia Comments 16.09.2022 15:19
The UK economy, including the British pound's quotations, has had a very turbulent year. The authority of the British currency may have first been undermined by the exit from the European Union, and then the British economy suffered a blow from a pandemic. The British Isles' severe energy crisis and high inflation may be adding to this. Read next: China Positive Reports,Drop In Retail Sales, Waiting For European CPI| FXMAG.COM Since the beginning of this year, the British pound has lost more than 15 percent of its value against the U.S. dollar. This makes the GBP the second weakest of the world's major currencies, just after the Japanese yen, losing more than 19 percent. In addition, if someone was taking the 2014’s peak as a reference point, the GBP's loss against the USD could reach more than 30 percent. As a result, the market has reached levels last seen in 1985. Source: Conotoxia MT5, GBP/USD, MN The British pound after a rough ride Observed in the chart above, the two significant lows in the region of $1.1400 were first the impact of brexit on GBP quotes, and the second was the impact of the pandemic. Currently, this level seems to be tested for the third time. Today, further disappointing data from the British economy may have contributed to the pound's weakness.  The volume of UK retail sales in August fell 1.6 percent from the previous month, the Office for National Statistics reported on Friday. The regression was larger than analysts had expected. Sales fell on a monthly basis for the first time since July 2021.  Non-food store sales slid 1.9 percent month-on-month, auto fuel sales fell 1.7 percent and grocery store sales were 0.8 percent lower, according to the data, which is summarized by BBN's website. As a result of weakening consumer demand and thus possibly the overall British economy, investors seem abandoning the GBP, which this morning is at its weakest since the 1980s against the USD. Rate hikes are not helping the GBP Expectations of interest rate hikes in the UK at this point also do not seem to be helping the pound. Some analysts note that even the GBP is moving like an emerging market currency. These could be characterized by the fact that the higher the investment risk, the lower the exchange rate, despite interest rate hikes. While interest rates in the UK may be higher than in the US over time, investors seem to be turning away from the pound anyway. It seems that under these circumstances, the British currency might have a hard time regaining investor confidence.   Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. Read article on Conotoxia.com
Chinese Stocks: Attractive Valuations Amidst Challenges and a Cyclical Recovery - 12.09.2023

Fed Decides On Interest Rate, So Does BoE - The Coming Week Is Simply Action-Packed

Craig Erlam Craig Erlam 16.09.2022 23:35
US Many on Wall Street are watching the Fed’s rate hiking cycle and are getting nervous they will tip the economy into a recession.  With scorching inflation, the FOMC may consider a full-point rate hike but will likely settle on delivering its third consecutive 75 basis-point increase. At Wednesday’s policy meeting, Fed Chair Jerome Powell will likely acknowledge downside risks to growth are here and unrelenting inflation is forcing them to maintain an aggressive pace of tightening.  Inflation risks are still tilted to the upside and will likely keep the Fed from providing any hints that a “Fed put” is coming. EU  The ECB appears to be one of the few major central banks not holding a monetary policy meeting next week but that won’t keep them out of the headlines. Policymakers are scheduled to make regular appearances including Philip Lane on Saturday which may present some weekend risk. On Friday, the flash PMIs could give an idea of how the economy is coping and whether it is heading for a recession in the fourth quarter, as some fear. UK Monday is a bank holiday in the UK as the country pays its respects to Queen Elizabeth II on the day of her funeral. After being pushed back a week due to the 10-day period of national mourning, the BoE will meet on Thursday and it has a big decision to make. Inflation is running extremely hot – although it did drop back below 10% last month – and while it has likely not yet peaked, the high should be much lower now that the new government has announced a cap on energy bills.  That may come as a relief to many but it could mean higher core inflation and interest rates further down the road. How the BoE responds to all of this without the aid of new economic projections is what will interest investors. The week draws to a close with PMIs on Friday. Russia Markets continue to monitor the situation in Ukraine amid a strong counteroffensive that saw Russia concede a lot of ground while raising the prospect of defeat and waning support for Vladimir Putin. The only economic release next week is PPI inflation on Wednesday.  South Africa The SARB is expected to hike rates by another 75 basis points to 6.25% on Thursday as inflation continues to rise. The CPI is currently well above the 3-6% target range at 7.8% and the central bank will get an update on this the day before their decision, which could play a role in just how aggressive they’ll be this month.  Turkey One central bank that almost certainly won’t be raising interest rates next week is the CBRT. Last month, it unexpectedly cut rates by another 100 basis points to 13% despite inflation running at almost 80%. That has risen further since but the central bank will not be deterred. No change is expected from the CBRT next week but clearly, another rate cut should not be ruled out. Switzerland Inflation continues to run hot which makes a large rate hike on Thursday from the SNB highly likely. Markets are pricing in at least 75 basis points, maybe even 100, taking the policy rate out of negative territory for the first time since early 2015. The central bank loves to spring a surprise though, the biggest recently perhaps being that it’s waited until a scheduled meeting to act. We’ll see how bold it’s prepared to be on Thursday.  China China is expected to keep rates unchanged at 3.65%, as the 1-year LPR (Loan Prime Rate) was just recently adjusted down from 3.7%. If the Chinese central bank unexpectedly adjusts rates to a lower level again, it may be detrimental to the yuan. The PBOC’s fixings are must-watch events now that the yuan has weakened beyond the key 7 against the dollar.   India Traders will pay close attention to the second quarter current account data.  Expectations are for the current account deficit to widen from $13.4 billion to $30.36 billion.  India has been weakening as trade balances balloon and foreign investment takes a big hit.   Australia & New Zealand Traders are awaiting the release of the minutes of the RBA meeting next Tuesday and upcoming speeches by RBA’s Kearns and Bullock. The RBA seems poised to move forward with smaller rate hike moves, but traders will look to see if the latest round of RBA speak confirms the downward shift discussed by central bank chief Lowe.  It will be a busy week in New Zealand as a steady flow of economic data is accompanied by a couple of RBNZ speeches by Governor Orr and Deputy Governor Hawkesby.  The big economic releases of the week are Wednesday’s credit card spending data and Thursday’s trade data.     Japan The FX world is closely watching everything out of Japan. Traders are waiting to see if policymakers will intervene to provide some relief for the Japanese yen. What could complicate their decision is that Japan has a holiday on Monday.   The divergence between the Fed’s tightening cycle and the Bank of Japan’s steady approach continues to support the dollar against the yen. The BOJ is widely expected to keep rates on hold even as core inflation extends above the BOJ’s 2% target.    Singapore The focus for Singapore will be the August inflation report that should show pricing pressures remain intense.  The year-over-year reading is expected to rise from 7.0% to 7.2%.  Economic Calendar Saturday, Sept. 17 Economic Data/Events Thousands pay their respects to Queen Elizabeth II at Westminster  European Central Bank chief economist Lane speaks at the Dublin Economics Workshop in Wexford, Ireland Monday, Sept. 19 Economic Data/Events World leaders attend Queen Elizabeth II’s funeral in Westminster Abbey in London UK Bank Holiday Japan Bank Holiday New Zealand performance services index RBA’s head of domestic markets Kearns delivers the keynote address at the Australian Financial Review Property Summit in Sydney ECB’s de Guindos speaks at the annual Consejos Consultivos meeting   Tuesday, Sept. 20 Economic Data/Events US housing Starts Canada CPI China loan prime rates Japan CPI Mexico international reserves Spain trade Sweden rate decision: Expected to raise rates by 75bp to 1.500% UK Parliament in session Annual UN General Assembly in New York Dockworkers at the UK’s Port of Liverpool are expected to begin a two-week strike Norges deputy central bank Governor Borsum speaks German Economy Minister Habeck speaks at the congress of municipal energy suppliers RBA releases minutes from its September policy meeting. BOC Deputy Governor Beaudry delivers a lecture on “pandemic macroeconomics” at the University of Waterloo in Ontario Wednesday, Sept. 21 Economic Data/Events FOMC Policy Decision: Fed expected to raise rates by 75bps US existing home sales Argentina unemployment, trade Australia leading index New Zealand credit-card spending South Africa CPI Big-bank CEOs testify before the US House Financial Services Committee at a hearing titled, “Holding Megabanks Accountable.” RBA Deputy Governor Michele Bullock speaks at a Bloomberg event in Sydney ECB’s de Guindos to speak at Insurance Summit 2022 organized by Altamar CAM in Cologne, Germany EIA crude oil inventory report Thursday, Sept. 22 Economic Data/Events US Conference Board leading index, initial jobless claims China Swift global payments Eurozone consumer confidence BOJ rate decision: No changes expected with rates and 10-year yield target Japan department store sales New Zealand trade, consumer confidence Norway rate decision: Expected to raise rates by 50bps to 2.25% South Africa rate decision: Expected to raise rates by 75bps to 6.25% Switzerland rate decision: Expected to raise rates by 75bps to 0.50% Taiwan jobless rate, rate decision, money supply Thailand trade Turkey rate decision: Expected to cut rates by 100bps to 12.00% UK BOE rate decision: Markets remain split between expectations for a half-point or a three-quarter-point hike. US Treasury Secretary Janet Yellen addresses the Atlantic Festival in Washington. The UN Security Council holds a meeting on Ukraine   BOE’s Tenreyro speaks at a seminar at the San Francisco Fed on “climate-change pledges, actions and outcomes.” Friday, Sept. 23 Economic Data/Events US Flash PMIs Australia prelim PMI Canada retail sales European Flash PMIs: Eurozone, Germany, France, and the UK Singapore CPI Spain GDP Taiwan industrial production Thailand foreign reserves, forward contracts Norway Central Bank Governor Wolden speaks Sovereign Rating Updates Germany (S&P) Hungary (Moody’s) Sweden (Moody’s) European Union (DBRS) Finland (DBRS) This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Week Ahead - Aggressive tightening - MarketPulseMarketPulse
Forex: What to expect from British pound against US dollar - January 17th

Let's Look At Euro To British Pound, AUD/JPY And GER 40

Jing Ren Jing Ren 19.09.2022 08:22
EURGBP breaks key resistance The pound tumbles as the UK’s August retail data disappoint. The buying pressure has been building up under June’s peak at 0.8720. The breakout prompted the last sellers to cover. As the euro’s rally gains momentum, this could open the door for a sustained climb towards 0.8900, which is a supply area from January 2021’s sell-off. 0.8800 is the intermediate resistance ahead. The RSI’s overbought situation could temporarily trim the buying and 0.8700 would be the first support in case the euro takes a breather. Read next: How High Will The Bank Of England Raise Rates?| FXMAG.COM AUDJPY seeks support The Australian dollar softens as investors shun risk assets. The pair is looking to hold onto its recent gains after rallying above June’s high at 96.60. However, short-term price action may struggle as there is no sign of committed buying yet. A break below 96.70 has forced leveraged buyers to bail out. The daily support and psychological level of 95.00 is a major area to gauge buying interest. A bounce will need to lift 96.40 before it could take hold. Failing that, a bearish breakout would deepen the correction below 94.00. GER 40 tests critical floor The Dax 40 slips as high interest rates prompt investors to take refuge in cash. After hitting the supply zone around 13500, the index has given up all gains from this month’s rally. This is a strong indication of the prevailing bearish bias. 12610 is the next support and its breach would bring the index back to the critical level of 12420. Then a bearish breakout may cause the remaining bulls to abandon the ship, resuming the downtrend towards 11900 in the medium-term. 12900 is a fresh resistance in case of a bounce.
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

The EUR/GBP Pair Has Broken Above The Neckline Resistance

InstaForex Analysis InstaForex Analysis 26.09.2022 08:19
It has been a while since we last looked at EUR/GBP. Since July, EUR/GBP has broken clearly above the neckline resistance of the S/H/S bottom and is now testing resistance at 0.9270 which we expect will be broken too for a continuation towards our long-term target at 1.0592. In the short term, we could see a temporary consolidation either just below or just above resistance at 0.9270 before the next rally higher to 1.0592. Relevance up to 06:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294116
Oil Prices Soar on Prospect of Soft Landing, Eyes Set on $80 Breakout

Very Dramatic Moves In Forex Markets With The Euro (EUR) And The Pound (GBP)

Swissquote Bank Swissquote Bank 26.09.2022 11:13
The FX markets kick off the week on an extremely chaotic note. Both the pound and the euro are being severely punished for the political decisions that are taken in the UK and in Italy respectively. Elections in Italy As expected, the far-right candidate Giorgia Meloni won a clear majority in Italy at yesterday’s election, with Brothers of Italy gaining more than 25% of the votes. And Meloni’s right-wing alliance with Salvini’s League and Berlusconi’s Forza Italia got around 43% of the votes: the terrible consequence of the pandemic, the war and the energy crisis. Situation the major currency  The EURUSD has been shattered this morning. The pair dived to 0.9550. But it’s almost worst across the Channel, if that’s any consolation. Investors really hated the ‘mini budget’ announced in UK last Friday. Investors were expecting to hear about a huge spending package from Liz Truss government, but the package has been even HUGER than the market expectations. UK’s 10-year yield jumped more than 20% since last week, the FTSE dived near 2% and Cable tanked below 1.0350 in Asia this morning. Elsewhere, the US dollar index took a lift, and the dollar index is just crossing above the 114 mark at the time of talking. Stock market Outlook Gold dived to $1626 on the back of soaring US dollar. US crude oil plunged below $80 per barrel. The S&P500 fell to the lowest levels since this summer, whereas the Dow Jones fell below the summer dip. Happily, the European equities are better bid this morning, but investors remain tense and worried. Watch the full episode to find out more! 0:00 Intro 0:24 Italy turns right, euro gets smashed 4:15 UK assets treated like EM after the ‘MINI’ budget 7:45 USD rallies, XAU, oil under pressure 8:49 US stocks dive to, or below summer lows on Fed fear Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Italy #election #Meloni #UK #mini #budget #EUR #GBP #selloff #USD #rally #crude #oil #XAU #BP #APA #XOM #recession #energy #crisis #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
Bank of England survey highlights easing price pressures

The Collapse Of The Pound (GBP) And Lack Of Market Confidence In The New UK Government

InstaForex Analysis InstaForex Analysis 26.09.2022 14:20
Pound has already lost nearly 400 pips on Friday, then this morning sank further by 5%. The reason was the new Chancellor of the Exchequer Kwasi Kwarteng's vow to continue cutting taxes, which raised fears of another sharp increase in inflation and public debt. The decline was the biggest intraday drop since March 2020, when investors panicked over the emerging Covid-19 pandemic. A number of economists have urged the Bank of England to take actions, but this will only exacerbate the fears in global financial markets and put the administration of Liz Truss at risk as the UK continues to grapple with the cost-of-living crisis. Nevertheless, the collapse of the pound indicates that markets do not trust the new UK government, especially since the national currency is rapidly moving towards parity and there is a huge chance that the situation will only worsen further. Kwarteng laid out the UK's most drastic tax relief package since 1972 yesterday, cutting fees on both workers' and companies' wages in an effort to boost the long-term potential of the economy. He also lowered stamp duty on property purchases, lifted a cap on bank bonuses and reaffirmed support for households and businesses on rising electricity bills over the next six months. Although pound bounced up earlier, traders are set to further decline as the options market is currently showing a 60% chance of it weakening to parity against dollar this year. A massive sell-off is sure to force the Bank of England to act more aggressively, and if the situation continues to go downhill, there will be an extraordinary increase in interest rates between meetings. Pound has so far collapsed to an unprecedented level - 1.0360, which creates quite a few problems. A correction will occur only when buyers become more active this week. It will surely open a direct path to the highs of 1.0700, 1.0760 and even 1.0805. But if pressure continues, GBP/USD will fall to 1.0500 and 1.0430. In terms of EUR/USD, a lot depends on 0.9605 because a drop below it will push quotes lower to 0.9560, 0.9510 and 0.9455. Price will increase only when buyers manage to bring the pair to 0.9710, then push it to 0.9770, 0.9810 and 0.9860.   Relevance up to 09:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322632
The Grains Sector Saw Continued Demand| Acceleration In The Sale Of Gold

The Grains Sector Saw Continued Demand| Acceleration In The Sale Of Gold

Saxo Bank Saxo Bank 26.09.2022 14:41
Summary:  Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to Tuesday, September 20, a week leading up to the FOMC meeting, Bank of Japan intervention, a Sterling crisis and the dollar surging to levels not seen in decades. Ahead of these events speculators chose to cut their dollar long by one-third, increasing their gold short to a four year high while adding exposure in grains and crude oil Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial. Link to latest report This summary highlights futures positions and changes made by hedge funds across commodities and forex during the week to Tuesday, September 20. A week that saw financial market adjust positions ahead of the FOMC meeting on September 21. In anticipation of another 75 basis point rate hike, the market sold stocks, bonds and commodities while the dollar was bought. As it turned out, the FOMC was the starting shot to a very volatile end of week that saw heightened recession worries, Bank of Japan intervention to support the yen for the first time in 24 years, and an unfolding crisis in the UK sending the Sterling towards an all-time low.   Commodities The Bloomberg Commodity Index dropped 2.3% during the week to last Tuesday with losses seen across most sectors, the exception being grains and livestock. Selling was particularly felt across the energy sector and in precious metals. Money managers responded to these heightened growth and strong dollar concerns by cutting length in energy and softs while adding to already short positions in precious metals. The only sector continuing to see demand were grains where the speculators have now been net buyers in all but one of the last eight reporting weeks. Energy Money managers raised their combined crude oil net long to a seven-week high despite the recessionary clouds growing ever darker and the dollar continued to strengthen. During the reporting week when oil dropped around 3% the total net long in WTI and Brent was raised by 13.5k contracts to 355k lots. The ICE gas long meanwhile slumped by 30% to a 22-month low while in New York the ULSD (diesel) length was cut by 17% to 15.7k contracts. Despite falling by around 7% only small changes were seen in natural gas. Metals Gold selling accelerated last week with the net short jumping by 225% to 33k contracts to near a four-year low. This the culmination of six consecutive weeks of selling driven by a stronger dollar and rising Treasury yields as well a firm belief the FOMC will successfully manage to bring inflation under control next year. Silver saw no major net change with reductions in both long and short positions offsetting each other. The copper net short was unchanged at 4k contacts, the weakest belief in lower prices since June while platinum’s 3.5% rally supported an 82% reduction in the net short to just 2k contracts, again weakest short bet since June. Agriculture The grains sector saw continued demand with speculators having been net buyers in all but one of the past eight weeks. The increase last week was led by a 16% increase in the soymeal long to 102k contracts, a seasonal high while corn buying extended to an eight week. The wheat market which found support from renewed threats to the Ukraine grain corridor saw net buying of both Chicago and Kansas wheat. Overall however the net exposure remains close to zero with a 16k contracts CBT net short partly offsetting a 19k contracts long in KCB wheat. Renewed selling of sugar cut the net long by 72% to 8.6k contracts, the cocoa net short extended to a fresh 3-1/2 year high while long liquidation continued in both coffee and cotton.   Forex Ahead of the post-FOMC dollar surge to a fresh multi-year high against several major currencies, and the first intervention from the Bank of Japan to support the yen in 24 years, speculators had reduced bullish dollar bets by 35% to $13.9 billion, a six month low. The bulk of the change was driven by the biggest amount of short covering in the euro since March 2020, a change that flipped the position back to a long of 33k lots or €4.2 billion equivalent, up from a €6 billion short three weeks ago.The net short in sterling was reduced by 13k lots to 55k lots just days before tumbling to a 37-year low following the announcement of a historic debt financed tax cuts. The yen meanwhile saw no major changes ahead of Thursday’s USDJPY surge and subsequent    What is the Commitments of Traders report? The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class. Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and otherFinancials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and otherForex: A broad breakdown between commercial and non-commercial (speculators) The reasons why we focus primarily on the behavior of the highlighted groups are: They are likely to have tight stops and no underlying exposure that is being hedged This makes them most reactive to changes in fundamental or technical price developments It provides views about major trends but also helps to decipher when a reversal is looming   Source: https://www.home.saxo/content/articles/commodities/cot-specs-sold-dollar-and-gold-ahead-of-fomc-26092022
UK Monetary Policy Outlook: A September Hike Likely, but November Uncertain

Intervention In The Yen (JPY) Still Remains A Far Cry| The Pound (GBP) Is The Weakest Against The Dollar (USD)

InstaForex Analysis InstaForex Analysis 27.09.2022 11:04
Summary:  Havoc has spread to the markets, not just with the Fed staying the hawkish course, but with the collapse in confidence in the UK economy after a fiscal policy and lack of monetary policy response adding into the mix with a massive bond selloff. Meanwhile, the surge in the US dollar continued taking its toll on several currencies, and the effect of Japan’s intervention from last week has also faded. Earnings pressure may be the next shoe to drop, and recession concerns also still need to be priced in more broadly. Fed’s high-for-longer message is now being taken seriously The September FOMC meeting was not precisely a pivot point for the Fed, but more so for the markets which finally understood the Fed’s message on inflation. The dot plot, particularly, conveyed two key messages as listed below. Even though the accuracy of the dot plot remains in doubt, given a very weak correlation with what actually transpired previously, it is a great signalling tool to understand the intentions of the FOMC members. Terminal rate is seen at ~4.6%, which was above what Fed funds futures were pricing in before the meeting. Even slower growth and higher unemployment levels, as conveyed by the Fed’s projections, would not deter the central bank from hiking rates There was some pushback on premature easing, with the dot plot showing a 4.5-5.0% rate even at the end of December 2023. Alongside that commitment to tighten, the Fed is now at the full pace of its quantitative tightening program, which is sucking liquidity out of financial markets at a rapid pace. The aim is to shrink the Fed’s balance sheet by $95bn a month — double the August pace. While quantitative tightening strongly influences liquidity conditions and asset markets, it is less useful in directly impacting inflation. While systemic risks from QT may remain contained, it ramps up the rise in Treasury yields as the Fed’s balance sheet shrinks and the amount of Treasuries in private hands increases. Trussonomics pushing UK to an emerging market status Sterling has fallen close to 10% on a trade-weighted basis in a little under two months, and has surpassed the Japanese yen to be the weakest against the US dollar year-to-date. An immediate response from the Bank of England may have saved some face, but remember that last week’s BOE decision was a pretty split vote as well with two members voting for 75bps rate hike and one calling for a smaller 25bps rate hike as well. So, it remains hard to expect a prudent policy response from the BOE, and a parity for GBPUSD in that case may not prove to be the floor. UK’s net forex reserves of $100bn are also enough to only cover two months of imports, or roughly equal to 3% of GDP as compared to Japan’s 20% and Switzerland’s 115%. But it’s not just about the sterling crisis in the UK, but more generally a crisis of confidence. Not to forget, inflation forecasts for end of the year are already at 10%+ levels and the market is now pricing in over 200bps of rate hikes by the end of the year, with two meetings left. The central bank will need to deliver this massive tightening simply to keep the sterling where it currently is and that won’t reverse the impact of the government’s decisions on UK markets. The scale and speed of the hikes could also do significant damage to the economy. The iShares MSCI United Kingdom ETF (EWU:arcx) traded lower by another 1.8% on Monday and is now down 7.3% over the last one week. Bank of Japan’s patience will keep getting tested We wrote earlier about what will need to change to call it a top in the US dollar, and nothing seems to be in order yet except some of the non-US officials starting to get concerned about currency weakness. Still, the intervention from Bank of Japan didn’t have long lasting effects on USDJPY, even as it helped to strengthen the yen against some of the other currencies such as the EUR, GBP or AUD. It may have also helped to stop some speculative shorts. But a coordinated intervention in the yen still remains a far cry, with the weakness in the Japanese yen being BoJ's own-doing due to the yield curve control policy. Japanese government bonds will likely continue to test the patience of Bank of Japan with its yield curve control policy. Downside for Japanese government bonds (JGB1c1) will potentially spike exponentially if the BOJ pivots at some point. Earnings pressure may be next While the Q2 earnings season proved to be more resilient than expectations, intensifying inflation concerns have turned corporates more cautious on the outlook and less optimistic for the near-term earnings performances. We have seen some downward revision of EPS estimates for the third quarter in July and August, and we still cannot rule out further grim outlook and margin pressures. Estimates for S&P 500 earnings in 2022 stood at $226.15 per share as of August 31, according to FactSet. This is down 1.5% from the $229.60 per share estimate as of June 30. For 2023, analysts now expect EPS of $243.68, down 2.8% from the June estimate of $250.61. So far, companies dealt with rising inflation by passing on increased costs to consumers, given the pandemic-era fiscal support measures underpinned strength in the consumer side. These increased pass-through was also visible in higher CPI prints. But with the economic outlook getting duller by the day, there is bound to be some pushback from the consumers and that will likely show up in the earnings report card. From a sectoral perspective, tech stocks will likely be battered as tight corporate budgets weigh and the US 10-year yields are in close sights of 4%. Semiconductors, a barometer of global economic health, could also face further pressure. Meanwhile, the oil and gas sector was the saviour of the Q2 earnings season, but would also likely see some pressure in Q3, unless the outlook starts to look slightly more upbeat with improving capex plans. Dollar pivot is the next key catalyst to watch The majority of the market downfall we have seen so far has come from a rapid shift in cost of capital and correcting peak valuation. The next leg, as discussed above could be the earnings recession. Still, economic recession risks remain and history suggests that the market lows do not come until after the recession begins (see chart below). Still, with the US 10-year yields approaching 4% - which maybe a likely ceiling – the focus turns to a reversal in the US dollar as the next pivot, not the Fed. Testing those key levels could mean a short-term bounce in equities which may be favourable for building new short positions as the trend still remains down. Alternatively, for investors, it would rather be optimal to look for signs of selling exhaustion to accumulate long positions, such as VIX above 40. Historically, a decline in stocks of the order of 20% makes it buying stocks after they have been down 20% from record highs has been a good risk/reward proposition for longer-term investors.     Source: https://www.home.saxo/content/articles/macro/macro-insights-approaching-a-breaking-point-but-not-without-more-pain-first-27092022
The UK Markets Remain Volatile, Possible Contraction Of The Eurozone Economy

GBP/USD Is Expected To Trade Between 1.07 And 1.09 Today. Could British Pound Touch 1.0350 In Next Month? Fed And ECB Members Speak Today

ING Economics ING Economics 27.09.2022 11:08
September has proved an exceptional month for the dollar. In the G10 space, the dollar has rallied anywhere from 1% against the Swiss franc to as much as 7% against sterling. Events in the UK highlight the pressure-cooker conditions facing non-USD currencies. Expect a day of consolidation today and a focus on central bank speakers in the US, UK, and Europe USD: An array of Fed speakers today Monday was a wild day in FX markets. Sterling was falling heavily and the dollar was firmer across the board as both bond and, to a much lesser degree, equity markets were under pressure. G7 FX volatility is now back to levels last seen in March 2020. Interestingly EMFX volatility is higher too, but still below the highs of this year. Sterling is clearly making a difference here. The narrative remains the same. Central bankers remain wholly focused on taming inflation – even at the expense of recession. We think last week's economic's projections from the Fed will still take some time to sink into the market's consciousness. The Fed projects that the US unemployment rate will rise to 4.4% by the end of next year from 3.7% today - but will still be raising rates to 4.50/4.75% in the process. Overnight the Fed's Loretta Mester reiterated that a more restrictive policy was needed for longer. Mester was also asked about the strong dollar and understandably replied that the Fed does take it into account when setting policy and also looks at the dollar's impact on financial market volatility. On the latter subject we suspect the 12 October meeting of G20 central bankers and finance ministers will garner more attention than usual – e.g. does the FX language in the Communique get tweaked to express concern over disorderly FX moves? For today's session, the focus will be on Fed speakers and second-tier data. On the roster, we have Evans (0930, 1115CET), Powell (1330) and Bullard (1555). We also have durable goods orders, new home sales, and consumer confidence. Any upside surprise in US consumer confidence only makes matters worse for the rest of the world, in that the Fed will have to tighten harder to bring aggregate demand lower. DXY may hold support at 113.00 since we look to be in a powerful phase of a dollar bull trend. Chris Turner EUR: One way traffic EUR/USD touched a new low for the year near 0.9550. Looking at a EUR/USD chart it has been pretty much one-way traffic since the summer of 2021. Question: what changed then? Answer: The Fed, which shifted from its super-dovish experiment with average inflation targeting to more conventional tightening. Events in Ukraine have only managed to cement the Fed's inflationary concern while hitting Europe's growth prospects. In short, do not expect a turn in EUR/USD until the Fed's work is done – and that doesn't look like it's happening until 1Q23 at the earliest. Separately, European growth prospects remain challenged as clearly demonstrated in some very concerning German IFO data released yesterday.   Expect intra-day EUR/USD rallies to stall in the 0.9700 region again and we doubt much hawkish ECB speak makes much difference here.  Elsewhere, we still like EUR/CHF lower. The dollar is the second-largest weight in the Swiss National Bank's (SNB's) Swiss franc trade-weighted index. A higher USD/CHF means the SNB will tolerate a lower EUR/CHF as it seeks to guide the nominal Swiss franc stronger. 0.93 is the direction of travel for EUR/CHF. Chris Turner  GBP: Buying time for the pound For a major reserve currency, it is typically hard to maintain these high levels of volatility for prolonged periods – but sterling may well try to defy that. We say that because UK policymakers have tried to buy time for the pound by: a) the UK Treasury promising a proper budget assessment on 23 November from the Office for Budget Responsibility (OBR) alongside a medium-term fiscal plan and b) the BoE promising to take all market moves into account when it decides on monetary policy on 3 November. But six-to-nine weeks is a long time in FX markets and on Monday investors were disappointed about the lack of an emergency rate hike from the BoE. We had felt that the BoE would prefer to avoid getting sucked into defending the pound with rate hikes. The delay in a policy response until November, therefore, leaves sterling vulnerable – though we would prefer to describe it as sterling finding the right level such that the Gilt markets clear. We are not sure we are there yet, however. FX markets feel like the dollar is going into early 1980s over-drive territory and barring a stark reversal in hawkish Fed expectations or slowing growth dynamics, we would say Cable could retest 1.0350 over the next month. UK markets will now be hyper-sensitive to any communication from UK policymakers. Today at 13:00CET sees BoE chief economist, Huw Pill, speak on the well-timed subject of 'Economic and Monetary Policy challenges ahead'. We doubt he will offer more than what was in yesterday's BoE statement, but on a day in which the dollar is consolidating, GBP/USD could trace out something like a 1.07-1.09 range. Chris Turner  HUF: Is the hiking cycle coming to a peak? The National Bank of Hungary's (NBH) monetary policy meeting takes place today and we expect another strong 75bp rate hike to 12.50%. Surveys are leaning more towards a 100bp step but market pricing is a bit more complicated. Short-term expectations in the one-month horizon (1x4 FRA) are pricing in just over 150bp, however they do include the October meeting as well. On the other hand, market expectations have cooled in recent weeks and while the terminal rate was still priced in at around 14.50% in early September, at the moment markets are expecting the peak of the hiking cycle to be just over 13.50%. Thus, it should not be a problem for NBH to support hawkish expectations. On the other hand, since the publication of our preview, we have heard several statements from NBH officials that the hiking cycle is coming to an end. From this perspective, this would make our 75bp hike call look hawkish. However, the forint is once again approaching the 410 EUR/HUF level and a dovish surprise would not be good news for the forint. Moreover, markets are increasingly questioning whether Hungary will get an injection of EU money, which Fitch highlighted as a risk to the sovereign rating on Friday, and more headlines should emerge in the coming days. So overall the picture is very mixed and it is hard to find a clear path on what to do next. However, our call for today's NBH decision should mean positive support for the forint. Frantisek Taborsky Read this article on THINK TagsFX Daily FX Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
"Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24"

Could GBP/USD Hit 1.00? There Are Several Solutions To Fight GBP (British Pound's) Weakness (26/09/22)

ING Economics ING Economics 27.09.2022 11:29
Sterling has fallen close to 10% on a trade-weighted basis in a little under two months. That's a lot for a major reserve currency. And traded volatility levels for the pound are those you would expect during an emerging market currency crisis. We take a look at the (unpalatable) policy options available to stabilise sterling British pound hits all time low against US Dollar, London, United Kingdom - 26 Sep 2022 Source: Shutterstock Defining a crisis Unlike equity markets where in excess of a 20% fall from a peak is called a bear market, definitions in FX markets are a little looser. Suffice to say that GBP/USD is the worst performing G10 currency this year at -20% year-to-date, just pipping the Japanese yen to that position. (Japan intervened last week to support its currency for the first time since 1998). Typical emerging market currency crises since the early 1990s have seen exchange rates fall anywhere near 50-80%. The large size of these adjustments has typically been a function of the breaking of an exchange rate regime/peg. The UK has learned from its experiences in ERM II in 1992 and has operated a free-floating FX regime ever since – arguing against sterling following some of the outsized EM FX adjustments outlined above. However, the 3.5% decline in Asia overnight and the now 28% levels for one week traded GBP/USD volatility (close to the highs in March 2020) certainly marks trading out as ‘disorderly’. Disorderly markets normally prompt a response from policymakers. As we go to press, headlines suggest that the Bank Of England (BoE) is considering making a statement later today. Below we take a look at the possible policy responses and their likelihood. GBP/USD sinks towards parity - one week volatility surges Source: ING, Refinitiv Sterling stabilisation measures – a look at the policy options Fiscal U-turn. Comments from the UK government over the weekend that the Treasury is mulling further tax breaks in coming months, would suggest ministers are unlikely to change course imminently. But mounting pressure, perhaps coupled with comments from rating agencies over coming weeks, means investors will be looking for signs of at least a partial policy U-turn. Ministers may emphasise that tax measures will be coupled with spending cuts, and there are hints at that in today’s papers. We also wouldn’t rule out the government looking more closely at a wider windfall tax on energy producers, something which the prime minister has signalled she is against. Such a policy would materially reduce the amount of gilt issuance required over the coming year. BoE to suspend QT. First inflation, then fiscal concerns, and finally a broader run on sterling and sterling-denominated assets. In all three cases, gilts have been at the wrong end of the stick. One particular concern for gilts is policy cooperation between the Bank of England and the Treasury. Be it on inflation, fiscal, or on confidence in the currency, markets have the distinct, and unnerving, impression that the two institutions in charge of economic management in the country are working at cross purposes. Gilts are caught in the crossfire. Despite this list of legitimate macro concerns, we also suspect that the magnitude of the move in gilts these past days (adding up to roughly 100bp moves at the front-end of the curve in two days) has been magnified by worsening liquidity. We have been highlighting the deterioration in gilt trading conditions all year. The BoE has added fuel to the fire by seeking to reduce its gilt holdings. In an environment where private investors are justifiably nervous about greater gilt issuance, and also greater gilt riskiness, the BoE is adding to gilt supply, and will soon engage in outright sales. A low-hanging fruit, in our view, would be to suspend quantitative tightening until market conditions improve.  Emergency BoE rate hike. The collapse in sterling over recent days has unsurprisingly sparked expectations of an inter-meeting rate hike. That should not be ruled out, though we suspect the committee will be reluctant. Thursday’s BoE decision suggests the BoE is – rightly or wrongly - less concerned about sterling than a lot of market commentary is suggesting they should be. As a rough guide, the 7-8% fall in trade-weighted sterling since the start of August, if persistent, would add somewhere between 0.6-0.8ppt to inflation at its peak. That’s not insignificant, but is it enough in itself to necessitate an inter-meeting hike? Probably not. But the key question is whether an emergency rate hike would do all that much. Certainly, it would need to be bold, and likely in excess of 75bp. A bold rate hike would prompt further complications, too. Rate hikes of the magnitude now being priced by investors would start to be highly problematic for mortgage holders and corporate borrowers. While the vast majority of UK mortgages are fixed, around a third of those are locked in for less than two years. For corporates, the BoE estimated last year that 400bps worth of rate hikes (from near-zero) would take the proportion of firms with low-interest coverage ratios to a record high. In the first instance, we’re more likely to see BoE hawkishness channelled through speeches this week, emphasising that it can move more forcefully if needed in November. Indeed, the pendulum is increasingly swinging towards a 75bp hike (or perhaps more) at that meeting. We would also say that the BoE may be psychologically scarred from the events in 1992, where defensive rate hikes failed to keep sterling in the ERM II mechanism. FX Intervention. Last week Japan intervened to support their currency for the first time since 1998. We do not think FX intervention is a credible option for the UK. The UK only has net FX reserves of $80bn, less than two months’ worth of import cover. The adage in FX markets is that no intervention is better than failed intervention. Instead, we may see building interest in the G20 central bankers and finance ministers meeting on 12 October. Will the FX language in the Communique get tweaked to show concern over disorderly dollar strength and hint at joint FX intervention?   Dollar swap lines. Typically in a currency crisis, we hear about the need for additional access to dollar funding through dollar swap lines. For reference, the BoE already has a permanent and unlimited dollar swap with the Federal Reserve. However, these lines are designed to provide support for dollar funding challenges and not for Balance of Payments needs. Dollar funding does not seem to be a problem for UK banks, but the BoE could make a pre-emptive move here by re-introducing an 84-day dollar auction in addition to the current 7-day facility.    IMF Flexible Credit Line. Given many references to Friday’s UK budget being the most generous since the Barber budget of the early 1970s, there will, unfortunately, be comparisons drawn to the UK seeking an IMF bailout in 1976. We assume the stigma of going to the IMF would prompt some aggressive UK policy adjustments beforehand, but just for reference, a good quality credit, Chile, (sovereign-rated A/A-) recently received an $18bn ‘precautionary’ Flexible Credit Line (FCL) from the IMF, joining the likes of Colombia, Mexico, Peru and Poland. Chile’s FCL was eight times its IMF quota. The UK receiving eight times its IMF quota ($200bn) would seem unlikely in that the IMF already has a total of $144bn lent out according to some estimates and the lack of conditionality of an FCL may not be a good signal given the nature of the sterling crisis. Capital controls. Highly unlikely. Capital controls have been used by Russia this year to support the rouble. But Margaret Thatcher dismantled capital controls in the UK in 1979. A reversal of such measures would be a complete anathema to the new Truss government’s agenda of deregulation and liberalisation. GBP/USD May Reach Parity, EUR/GBP To Near 0.95? At this stage, we think UK authorities will probably just have to let sterling find its right level. The UK has a reserve currency so it can always issue debt – it’s just a question of the right price. We are still bullish on the dollar this year as Fed leads the deflationary charge and global growth slows. That means GBP/USD is now vulnerable to a break of parity later this year, while - quite unexpectedly - EUR/GBP can make a run towards the March 2020 high of 0.95, with outside risk to the 2008 high of 0.98.  Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Thursday's Bank's of England decision may be record-breaking!

British Pound (GBP) May Be Helped With Forex Intervention, But It May Take A While. Bank Of Japan Supported Yen This Way, Swiss National Bank May Do The Same

Alex Kuptsikevich Alex Kuptsikevich 27.09.2022 12:01
The US dollar is under some pressure on Tuesday morning, which can be attributed to the dollar's local profit-taking after substantial gains on previous days. European equities and US index futures are also getting some relief, pulling back from lows. Read next: GBP/USD Is Expected To Trade Between 1.07 And 1.09 Today. Could British Pound Touch 1.0350 In Next Month? Fed And ECB Members Speak Today| FXMAG.COM The dollar has been in increasing demand in recent months, as comments from the Fed are methodically pushing higher the expected interest rate ceiling and for longer However, until we see a change in the fundamentals, bounces like today's are likely to be nothing more than local retracements of established trends - bullish for the dollar and bearish for equities. There is little doubt in the markets now that the main driving force behind the markets is the continuing tightening of current and, most notably, expected conditions. The dollar has been in increasing demand in recent months, as comments from the Fed are methodically pushing higher the expected interest rate ceiling and for longer. Not all major central banks have the ability or the courage to maintain the same pace, which is taking the dollar's main competitors out of the game. But these same conditions require regulators to act more aggressively. Last week, Japan began its interventions to defend the yen exchange rate. The Swiss National Bank has repeatedly warned that it is ready to intervene. Observers have also demanded action from the Bank of England. But the latter has yet to budge, taking a week to assess the situation. In the words of the ECB officials, there is more and more evident dissatisfaction with the ongoing weakening of the euro. Because a sharp rise in interest rates in over-leveraged economies may come as a shock, the central bank may intervene to stop the unilateral weakening of national currencies. Right now, it seems unlikely that the major central banks would be willing to press on the dollar in a coordinated way as they did in 1985 with the secretly prepared so-called Plaza Accord. It hardly fits with US priorities to lower inflation and weaker commodity prices. At the same time, there are increasing risks that the major central banks, one by one and acting on the situation, may use this almost forgotten instrument to stop unilateral speculation against their currencies. Among the other majors, the GBP has the highest currency intervention risks right now, with EUR and CHF slightly less so In our view, since last week and for the foreseeable future, Japan has already included interventions in its active policy, potentially limiting the USDJPY from rising above 145. It is unlikely to be an easy ride for Japan's Ministry of Finance, but it has the strength to fight back. Among the other majors, the GBP has the highest currency intervention risks right now, with EUR and CHF slightly less so. In Canada and China, the monetary authorities are not concerned about the exchange rate, as inflation is slowing down there. Hence, it is unlikely that we will see interventions in the CAD and the CNY. Although the Australian dollar has lost 6% since the beginning of the month, it is now 18% above the 2020 'bottom', so in our view, monetary authorities can use traditional rate hikes and quantitative tightening for now.
Singapore's non-oil domestic exports shrank 20.6% year-on-year

Singapore’s Industrial Production (IP) Came In Above Expectations

TeleTrade Comments TeleTrade Comments 27.09.2022 13:51
Senior Economist at UOB Group Alvin Liew assesses the latest Industrial Production figures in Singapore. Key Takeaways “Singapore’s industrial production (IP) came in above expectations as it rose by 2.0% m/m SA, which translated to a growth of 0.5% y/y in Aug, (from the upwardly revised Jul readings of -2.1% m/m, 0.8% y/y). Excluding the volatile biomedical manufacturing, IP actually contracted by -2.9% m/m, 1.2% y/y% y/y in Aug (from an upwardly revised -0.9% m/m, 3.1% y/y in Jul).” “While the Aug IP beat expectations, it was due to a rebound in pharmaceutical production (6.4% y/y). Other main sources of IP growth were from the continued expansions in transport engineering (32.8% y/y), general manufacturing (18.8% y/y), and precision engineering (2.9% y/y), offsetting the declines in electronics output (-7.8% y/y) and chemicals (-11.2% y/y).” “Accounting for the Aug’s increase, Singapore’s IP expanded 4.4% in the first eight months of 2022. The latest dip in Aug electronics PMI (to 49.6, first contraction after two years of continuous expansion, and the lowest reading since Jul 2020) painted a consistent picture from what we saw in the latest NODX and manufacturing data, a start of the electronics downcycle. We continue to be cautiously positive on the outlook for transport engineering, general manufacturing, and precision engineering, to support overall IP growth but we see a weaker electronics performance and slowing demand from North Asian and key developed economies that could increasingly weigh on NODX momentum and manufacturing demand. We keep our Singapore manufacturing growth forecast at 4.5% in 2022 (from 13.2% in 2021) but we expect the sector to contract by 3.7% in 2023 due to the faltering outlook for electronics and weaker external demand. In the same vein, our 2022 GDP growth forecasts are also unchanged at 3.5% but the faltering 2023 manufacturing outlook indicates the downside risk to our GDP growth projection next year.’
UK GDP Already Falling And Continuing To Do So For This Calendar Year, Copper Is Still Within A Tightening Range

British Pound (GBP) Hasn't Been Significantly Supported So Far, What Do We Know About The Potential Move Of BoE?

Craig Erlam Craig Erlam 27.09.2022 14:37
Bank Of England "Ready To Act" Stock markets have steadied in Asia and early European trade on Tuesday but that is not reflective of the mood in the markets at the moment so it may struggle to hold. The volatility in FX markets at the start of the week has been extreme but it’s also been building for weeks as authorities desperately try to arrest the decline in their currencies, particularly against the US dollar. On Monday it was the UK that was front and centre following the mini-budget on Friday that showed total disregard for the environment in which it was being implemented. Promising much higher borrowing to fund huge tax cuts at a time of double-digit inflation that hasn’t even peaked is beyond bold and the backlash is well underway. There’s nothing wrong with being ambitious on the economy but timing is everything and when the cost is much higher interest rates, there won’t be many winners and the economy simply won’t see the benefit. The question now is whether the pressure both externally and from within will force a rethink in order to settle things down. Read next: The Weakening Real Estate Market In The USA And More Speeches| FXMAG.COM The Bank of England did little to help. After speculation all day of an impending announcement, the central bank only sought to reassure markets that they stand ready to act but probably not until the next meeting in early November when it is armed with new macroeconomic projections. Needless to say, that reassured no one and sterling plummeted again after recovering amid the rumours of the announcement. BoJ intervenes amid rising yields It’s not just the UK that’s contending with a haemorrhaging currency, the Japanese Ministry of Finance was forced to intervene last week for the first time in 24 years in order to support the yen. Of course, while the UK’s problems appear largely self-inflicted, Japan is suffering as a result of a growing rate divergence that is worsening month to month. So much so that the Bank of Japan was forced to intervene itself overnight with another bond-buying operation to the tune of 250 billion yen. The problem with yield curve control is that when yields are rising everywhere, pulling those in Japan with them, the upper limit is frequently tested necessitating intervention which in turn weakens the currency. It seems Japan is now stuck in an intervention doom loop until central banks elsewhere see peak inflation and therefore rates, or the BoJ loosens its grip and allows yields to move a little higher. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. More turmoil to come? - MarketPulseMarketPulse
Inflation Outlook: Energy Prices Drive Hospitality, Food Inflation Eases

Morgan Stanley Expects GBP/USD To Reach 1.00 In 2022 And EUR/GBP To Hit 0.95

Conotoxia Comments Conotoxia Comments 27.09.2022 15:27
The end of last week and the beginning of this week have been a veritable rollercoaster in the financial markets. The volatility experienced by the currencies of developed countries during this time, especially the British pound, could be compared to the period of the Great Financial Crisis, the Brexit referendum or the pandemic hitting the financial markets. Current overview of financial markets Today, financial markets seem to be trying to catch their breath after the recent turmoil. The U.S. dollar seems to be slightly losing value in the broad market, which may also be caused by the phenomenon of profit realization from sudden dollar trends. As of 09:300 GMT+3 on the Conotoxia MT5 platform, the EUR/USD was up 0.57 percent to $0.9663 today. The GBP/USD rallied 1.3 percent to $1.0821, while bitcoin returned above the $20000 level, rising just under 6 percent. Stock index contracts also rebounded. The DAX rose less than 1.5 percent to 1,377 points, and the S&P500 rose 1.48 percent to 3704 points. The dollar index, on the other hand, retreated 0.65 percent to 113.57 points. It had earlier set a new peak in a multi-month trend above 114.60 points. Source: Conotoxia MT5, USDIndex, H4 Financial markets race to peak interest rates The market at present, seems to be outdoing itself in betting on which level and country would peak in interest rates. The British pound may come out on top due to the fact that the Bank of England might be forced to counter the British government's fiscal easing and may raise interest rates faster and more than previously expected. Currently, the market is assuming that interest rates in the UK could rise as much as 175 bps and only until November, while the market sees the peak of the cycle in the region of 6%. Meanwhile, in the US, the interest rate market is assuming that the Fed funds rate range could reach its peak in February 2023. This could be between 4.5 and 4.75 percent. Thus, the U.S. bond market may also be close to the full discount of hikes, as yields on 2-year bonds reached 4.3 percent yesterday. In the Eurozone, on the other hand, the EUR could be above 3 percent in six months. Thus, lower than the pound and the dollar, while higher than the Japanese yen. For the JPY, interest rates are expected to remain unchanged over the year, according to the market's valuation of interest rate levels. Source: Conotoxia MT5, GBP/USD, m30 What's next for the British pound? According to Citigroup, parity on GBP/USD looks "quite likely," as there are no clear valuation thresholds for the pound, but "I still wouldn't go so far as to say it's inevitable," Ebrahim Rahbari, global head of FX analysis at Citigroup, said on Bloomberg TV. "We are looking at parity as the next big level," he added. While conventional valuation suggests that sterling doesn't need to get much weaker, "it's really that risk premium that comes with some of the policy measures that makes it so likely that we'll drift, perhaps beyond parity." Currency troubles are unlikely to escalate into a crisis, he said, because the UK doesn't have much debt denominated in foreign currencies. He added that: "The threat of default is much less significant." Meanwhile, Morgan Stanley has revised its forecast for the pound and now sees it reaching parity with the dollar by the end of the year, as neither currency interventions nor emergency rate hikes by the Bank of England will stop the sterling's weakening. "Recent price action suggests that the GBP is under pressure," - Morgan Stanley analysts wrote in a Monday note. The bank's previous forecast for GBP/USD was 1.02. It is now 1.00. The analysts also revised their forecast for EUR/GBP to 0.9500 by year-end from 0.9100 previously. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. Read article on Conotoxia: Stock market news: The financial market tries to take a breather. What's happening to the pound? (conotoxia.com)
Why India Leads the Way in Economic Growth Amid Global Slowdown

Bank Of England Intervention Boosts Risk Appetite And The Possible End Of The iPhone Era

Swissquote Bank Swissquote Bank 29.09.2022 10:39
The Bank of England (BoE) jumped in the UK’s shattered sovereign market to buy long-term UK bonds yesterday, because apparently, they have been warned that collateral calls on Wednesday afternoon could force investors to further dump their UK sovereign holdings. And the UK could no longer afford another heavy selloff wave on its sovereigns. Will the enthusiasm last?  The British 10-year yield fell 10% yesterday, and the pound jumped past the 1.08 mark against the US dollar and consolidated below 0.90 against the euro. The FTSE recovered early losses and closed the session 0.30% higher, gold recovered to $1662 an ounce, American crude rallied past the $80 per barrel, also boosted by the Hurricane Ian’s negative impact on supply. Around 11% of the Gulf of Mexico production was halted due to the storm.The S&P500 gained almost 2% yesterday to above 3700 level, while Nasdaq jumped more than 2%. Will the enthusiasm last? Not so sure. Yesterday’s price action was a sugar rush, triggered by the BoE intervention. Enthusiasm will likely fall as the level of blood sugar falls across the financial markets. Amazon is on the rise Amazon jumped 3% as investors liked the new devices at Wednesday’s annual device event, and Apple slipped on announcement that it will, finally, not produce more iPhones compared to last years.In Europe, all eyes are on Porsche that starts flying with its own wings today! Watch the full episode to find out more! 0:00 Intro 0:27 BoE finally jumps in 3:24 BoE intervention boosts risk appetite, but for how long? 5:30 Amazon convinces, Apple disappoints 8:54 Porsche is now up for grab! Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #BoE #intervention #UK #gilt #GBP #Hurricane #Ian #crude #oil #energy #crisis #XAU #FTSE #sovereign #bonds #rally #Apple #Amazon #Porsche #IPO #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
Oil Prices Soar on Prospect of Soft Landing, Eyes Set on $80 Breakout

On Thursday S&P 500 (SPX) Lost 2.11%, Nasdaq Went Down By 2.84%

ING Economics ING Economics 30.09.2022 08:27
Equities and FX decouple as we end the quarter Source: shutterstock Macro outlook Global markets: The bounce didn’t last long. Both S&P500 and NASDAQ fell sharply again on Thursday, the S&P by 2.11% and the NASDAQ by 2.84%. That puts year-to-date losses at respectively 23.62% and 31.37%. And we’d be inclined to argue that we haven’t yet seen the bottom. The S&P500, for example, is sitting just around its June lows, so any break below this level sets the scene for some substantial further declines. On the positive side, equity futures are pricing in small gains at today’s open, but that's a long way from saying that stocks will rally into the weekend and the end of the quarter. UK Gilts gave back some of their gains yesterday on the Truss government’s insistence on sticking to its mini-budget, and yields have risen across the UK curve, though this doesn’t seem to have the market’s eye in the same way it did earlier this week. 2Y US Treasury yields headed up 5.8bp to 4.192% and the yield on the 10Y bond rose a similar amount to 3.786%. 10Y Bunds rose 5.8bp to 2.14%, hurt by a 10% YoY September inflation print (10.9% for the harmonized index). And while this is cementing thoughts of a 0.75% rate increase at the next ECB meeting, that seems like a lame response in a month where the price index rose by 2 percentage points. For now, currency markets seem to disagree, and the EURUSD has risen to 0.982, though this seems a little incongruous against the data backdrop. Other G-10 currencies also did better against the USD. The AUD is now back up above 65 cents, while the GBP has risen to 1.1145 – a long way from the 1.035 low of the week (and approx. last 4 decades!). Can this last? It seems a long shot as there’s plenty more bad news to be priced in. The JPY has also had a reprieve, and is back to 144.42, while the CNY led APAC’s FX gains, gaining by more than a per cent to 7.1249 onshore. G-7 Macro: Besides the unpleasant German inflation data, the macro picture was quite thin, with some marginal upward revisions to 2Q22 US GDP, and a lower than expected initial claims figure suggesting that the Fed still has its work cut out to slow the economy enough to bring inflation down. Today, we see the full European inflation picture for September, which is likely to exceed the 9.7%YoY consensus estimate. This won’t have been adjusted yet for the German figures. US Personal income and spending data will show how consumer spending held up in August together with the latest PCE inflation figures.  And we round off the week with the University of Michigan consumer sentiment (and inflation expectations) figures. China: We expect the manufacturing PMI to be under 50 as manufacturing for real estate construction will still be in monthly contraction. Furthermore, export demand is waning and that could affect manufacturing activity for holiday-season exports. However, services should continue to pick up as Covid measures become more localised. India: The Reserve Bank of India (RBI) meets today to decide on rate policy and the following three factors are relevant to that decision: 1) Inflation is 7.0%, a full per cent above the top of the RBI's target range 2) it is heading in the wrong way. 3) RBI commentary has been clear about the need to focus on fighting inflation. Put that all together and it looks likely that the RBI will deliver a further 50bp of tightening today, taking the repo rate to 5.9%. Later this evening, we will also get India’s fiscal deficit figures for August. Although all major rating agencies have India’s long-term foreign credit rating at "stable', and the deficit data year-to-date seem on track to meet the government’s 6.4% (GDP) target, it wasn’t that long ago that Fitch raised their outlook from negative. The deficit numbers have been whipped around by government subsidies and attempts to limit the pass-through of high energy prices to the consumer, so these are still worth a quick look. South Korea: Industrial production dropped more than expected in August, recording a -1.8%MoM decline (vs -1.3% in July and -0.8% market consensus). Automobile production rebounded (8.8%) but the declines in semiconductors (-14.2%) and petrochemicals (-5.0%) were bigger. We believe that re-opening will support 3QGDP, but thereafter, there should be a sharp deceleration. We also now expect only a 0.1% QoQ gain in 3Q22 (vs 0.7% in 2Q). Yesterday’s business survey outcomes were also quite weak, with manufacturing sentiment rapidly deteriorating to the lowest level since October 2020. Also, today’s forward-looking construction orders data were soft, suggesting more recessionary signals in the coming quarters. Japan: Japan’s data releases surprised the market on the positive side. The jobless rate edged down to 2.5% (vs 2.6% in July), in line with the market consensus. The Jobs-to-applications ratio continued to rise (has risen for several months in a row). And industrial production in August not only recorded a third monthly rise (2.7% MoM sa), but also beat the market expectation significantly (0.2%). We will revise up third quarter GDP soon based on today’s releases. The stronger jobs market is also a good sign for wage growth together with solid production gains. However, we think it is still too early to tell because Japan is reopening at a slower pace than other Asian countries and the reopening effects are just kicking in. With growing global recession headwinds, the BoJ will likely take its time to see whether Japan can still produce solid outcomes in a sustainable way. What to look out for: US core PCE, personal spending and Michigan sentiment South Korea industrial production (30 September) Japan labor market data (30 September) China official and Caixin PMI manufacturing (30 September) India RBI meeting (30 September) Hong Kong retail sales (30 September US personal income, personal spending and core PCE (30 September) US University of Michigan sentiment (30 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Energy and Metals Decline, Wheat Rallies Amid Disappointing Chinese Growth

The Euro Will Strengthen, But Questions Remain About What To Do Next

InstaForex Analysis InstaForex Analysis 30.09.2022 09:00
The euro has strengthened its position against the dollar and continues to grow amid repeated statements by European politicians this week that the European Central Bank should raise interest rates by another 75 basis points at the next meeting, which is scheduled for October this year. Data on inflation in the eurozone will be released today, which will surely confirm the correct attitude of European politicians to the current situation, it was just necessary to act a little earlier – the Federal Reserve went too far, which led to such a gap in interest rates and a strong weakening of the euro against the US dollar. In his recent speech, member of the Board of Governors Martins Kazaks stated: "In the current situation, we can still do much more. The next step still needs to be quite large, because we are far from the rates corresponding to 2% inflation. I would support a 75 basis point increase — let's take a bigger step and raise rates." European Central Bank and rate The Latvian official said that this does not mean that 75 basis points are now the "golden mean", and that, probably, as soon as rates will be more in line with the inflation target, future steps need to be done more carefully. His calls for decisive action are supported by other officials from the Baltic region. European Central Bank President Christine Lagarde and other officials from the board of governors told us about something similar this week. The surge in prices caused by Russia's military special operation in Ukraine and the resulting energy crisis prompted ECB officials to start raising rates for the first time in more than a decade — this month rates were raised immediately by a historic three-quarters of a point. Now they are weighing how to proceed, as the price increase is accompanied by ever-increasing forecasts of a recession. Lagarde told European Union lawmakers this week that officials will start considering cutting trillions of euros worth of bonds it accumulated during recent crises only after rates reach that point. Traders estimate the probability of another 75 basis point move next month at 40%. An increase in this amount will double the deposit rate to 1.5% — the highest level since 2009. The opinion of a Latvian politician As for Kazaks' speech, in his opinion, the cost of borrowing will reach a "neutral" level, which does not stimulate or limit the economy by the end of the year. "Of course, we should discuss all the tools so that when it is necessary to make a tough decision, we are ready," Kazaks said. "The ECB should delay its balance sheet reduction program, or quantitative tightening, until next year." According to the Latvian politician, this will prevent the European crisis from flowing into recession. Given that the main source of inflation is the crisis in the energy market, which is of a geopolitical and structural nature, an extremely rapid tightening of monetary policy will simply push the economy into recession. The Technical Outlook  As for the technical picture of EURUSD, the bulls have regained their advantage and the market under their control, which they lost at the beginning of the week, and are now aiming to break through the nearest resistance of 0.9840. It is necessary to do this if they expect the upward correction to continue at the end of this month. A breakdown of 0.9840 will take the trading instrument even higher to the area of 0.9890 and 0.9950. But despite the good upward prospects, protecting the nearest support of 0.9780 is still an important task for the bulls. Its breakthrough will push the euro to a low of 0.9730, but there will be nothing critical in this situation either, since there is the lower boundary of the new ascending channel. Only after missing 0.9730 will it be possible to start getting nervous, as the pair will easily fall into the area of 0.9680 and 0.9640. The Pound (GBP) The pound continues to win back positions one by one thanks to the support of the Bank of England. Now bulls are focused on the 1.1200 resistance, the breakthrough of which will open up prospects for further recovery in the area of 1.1260 and 1.1320. It will be possible to talk about the return of pressure on the trading instrument only after the bears take control of 1.1070, but this will not cause serious damage to the bull market observed since the middle of the week. Only a breakthrough of 1.1070 will push GBPUSD back to 1.1010 and 1.0950.   Relevance up to 08:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323100
Bank of England survey highlights easing price pressures

The UK Assets Will Be Pressured| Japan And Its A Huge Foreign Debt

Saxo Bank Saxo Bank 30.09.2022 09:54
Summary:  While the Bank of England’s emergency bond-buying has propped up the sterling recently, there are hardly any reasons to turn positive on UK assets in general unless the government changes course on its fiscal policy roadmap. In fact, Japanese authorities remain better placed to defend their currency than the UK, given their better reserves position. While UK’s pain is self-inflicted, the overarching theme of tighter global liquidity conditions continues to pose threats of wider market disruptions. The Fed’s aggressive monetary policy tightening and the unrelenting surge in the US dollar this year is now tightening global financial conditions, with effects reverberating through global financial markets. Still, the degree to which this can be blamed for what is happening in the UK remains under the scanner. Despite the Fed tightening remaining an overarching theme, UK’s pain is largely self-inflicted. While bond buying by the Bank of England (BOE) is somewhat on the lines of what the Bank of Japan (BOJ) has been, the motives are completely different and the impact is likely to vary as well from here. The motives BoJ’s wider bond-buying operations are a reflection of its desire to stoke inflation. Japan’s headline inflation has averaged under 1% in the last two decades with the core print being in negative territory. The latest print for August was 3%, above the BOJ’s 2% goal, but wage pressures still remain subdued. UK’s inflation, on the contrary, is running at nearly three times that, and the BOE’s plan to begin purchasing long-dated gilts was a forced emergency measure to support pension funds that may be on the verge of a default due to the jump in gilt yields stemming from fiscal concerns after the announcement of the new government’s mini-budget. The vulnerabilities Japan’s fiscal and current account are also not in great shape, and it has a huge foreign debt. But it has huge FX reserves of the order of over $1.2 trillion as of end-August. This equates to 20% of GDP and over 18 months of import cover. Of this, about $136bn is deposits with foreign central banks that can be used immediately to intervene. So, while the Japanese yen remains vulnerable due to its twin deficits and high debt levels, the huge FX war chest still gives Japanese authorities some ammunition to intervene against excessive pace of yen decline. Meanwhile, UK’s problem is not just in its high inflation but also its twin deficits and weak FX reserves position. Foreign currency debt levels in the UK are more contained, however, and that may be one of the reasons why FX reserves are low. As we noted in a previous piece, UK’s net forex reserves of $100bn are also enough to only cover two months of imports, or roughly equal to 3% of GDP as compared to Japan’s 20% and Switzerland’s 115%. This gives the UK policymakers less room to prop up the sterling. Threats to Sterling and UK assets Sterling has undoubtedly regained some strength since the massive selloff on the fiscal plan announcement. It has been ‘temporarily’ supported by the BOE’s bond purchase program, which has led to the global reprieve in yields. Also, the month-end/quarter-end rebalancing has possibly helped cap dollar gains after massive USD strength seen in the quarter. To be clear, BOE didn’t ‘pivot’, rather it acted as the lender of last resort for the domestic pension funds, and there is hardly anything to be bullish about, or turn positive on UK assets. The UK assets will likely continue to be pressured until the UK government remains in denial. Even an emergency rate hike, at this point, seems unlikely to be able to support the sterling or gilts, as it would signify panic and a divergence in fiscal and monetary policies, further weighing on general confidence in the economy and its policies. Meanwhile, markets are currently pricing in a close to 150bps rate hike from the BOE at the November 3 meeting. That’s massive, and will mean significant pain to the UK economy. Threat of global contagion The UK is becoming a major credit risk not only for GBP assets but also for the rest of the world, primarily the eurozone as my colleague Chris Dembik noted in his piece. We see some kind of contagion effect in the eurozone credit market. There’s also risk of more markets succumbing to evaporating liquidity, and it is inevitable to ponder over who could be next? The Chinese currency has also weakened dramatically lately, but the PBoC has numerous tools available and credit impulse in China is also turning positive. South Korea has already intervened to prop up its currency, and more economies are likely to follow that path if things continue like this. The G20 meetings on November 15-16 will be particularly important to watch not just for geopolitical updates, but also for possible collective concerns on the impact of global tightening and the strong dollar. Atleast until then, if not longer, there is not enough reason for the US Treasury to intervene to buoy the battered pound or yen or another faltering currency. Most US officials, including Treasury secretary Yellen, expressed no urgency to act. Wider market disruptions and increasing risks to global financial stability, beyond the financial turmoil emanating from Britain and Japan, therefore remain likely.   Source: https://www.home.saxo/content/articles/macro/macro-insights-bank-of-england-bank-of-japan-and-the-risks-of-wider-market-disruptions-30092022
Thursday's Bank's of England decision may be record-breaking!

British Pound: Oanda Expects That If Liz Truss Doesn't Change The Plan, The UK Inflation May Go Up!

Kenny Fisher Kenny Fisher 30.09.2022 15:54
British pound calm after tumultous week The British pound has posted slight gains, after a spectacular showing on Thursday. In the European session, GBP/USD is trading at 1.1145, up 0.26%. For anyone looking for lots of volatility, look no further. The pound has taken riders on a wild ride, with GBP/USD surging 2.1% on Thursday. On Monday, the pound traded in a stunning 500-point range, which saw GBP/USD touch a record low of 1.0359. Since then, the pound has padded on 800 points, in what has been a truly remarkable week. The driver behind the pound’s volatility was Chancellor Kwarteng’s mini-budget, which included tax cuts and increased borrowing. The package was roundly criticized, with even the IMF and US officials panning the plan. This led to a near-crash in the UK bond market, forcing the Bank of England to take emergency measures and pledge unlimited purchases of securities. The bailout will continue for over two weeks and could cost up to 60 billion pounds. The BoE’s intervention has reassured investors and stabilized the bond market. The pound continued to swing wildly, but it has recovered almost all of the losses triggered by the mini-budget. What happens now? The government clearly was not expecting a financial tsunami after a mini-budget, which are usually tame affairs that don’t affect the financial markets. Prime Minister Truss is under pressure to shelve or at least make changes to the mini-budget, but so far Truss is holding firm and insisting that she will stick with the plan. If she does, we can expect inflation, which is running at a 9.9% clip, to climb even higher. GBP/USD Technical GBP/USD has support at 1.1144 and 1.1052 There is resistance at 1.1265 and 1.1384 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Pound takes a breather after wild ride - MarketPulseMarketPulse
ECB's Knot: July Rate Hike Necessary, Beyond July Uncertain; Canadian CPI Supports Rates on Hold; Global Crypto Market at $1.2 Trillion; Oil Market Tightens with Russian Shipments Drop and China's Support Measures

Situation In The UK And Japan And OPEC+ Commented In The Latest Episode Of Oanda's Market Insights Podcast

Craig Erlam Craig Erlam 05.10.2022 22:50
OANDA Senior Market Analyst Craig Erlam reviews the latest market news with Jonny Hart. They discuss the UK fiscal situation, Japanese intervention, OPEC+ and the week ahead. http://www.subscribeonandroid.com/audioboom.com/channels/4947364.rss This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Market Insights Podcast (Episode 382) - MarketPulseMarketPulse
The Outlook Of EUR/USD Pair For Long And Short Position

Today ECB Meeting Minutes Are Released. UK: Jonathan Haskel (Bank Of England) Speaks

ING Economics ING Economics 06.10.2022 12:13
Central banks are still far from bailing markets out. There is no evidence that financial stability concerns are distracting them from their inflation fight. Their inflexibility is why we see more upside for rates and spreads Risks remain to the upside for rates BoE and ECB let markets fly on their own If financial stability no doubt registers on central banks’ consciousness, it is doubtful that they see policy implications. The Bank of England (BoE) balking at buying long-end gilts for the second day in a row clearly confirmed that it sees its operation as a temporary backstop, and not something that should dilute its monetary policy stance. Along the same lines, the European Central Bank’s (ECB) reluctance to support peripheral bond markets in August and September 2022 by using PEPP reinvestment flexibility sends a similar message. In the BoE’s case, the gilt long-end received the message loud and clear. 10s30s is racing back towards the levels prevailing before the mini budget and subsequent BoE intervention. If the shape of the curve is the best sign that markets are pricing out BoE intervention, it is the speed of the sell-off that should keep investors up at night. 30Y yields are up almost 40bp this week. Let us hope that pension funds and other structural swap receivers managed to reduce their exposure, or found funding sources for inevitable collateral calls. Markets are forward-looking, and there are no ECB purchases for them to look forward to The glass half full take on European Central Bank (ECB) intervention, or lack thereof, is that spreads remained contained without its help. This is particularly notable in a context of rising core rates and rates volatility. The problem with this take is that markets are forward-looking, and that there are no ECB purchases for them to look forward to. It seems, the bar for purchases is higher than previously thought and could get even higher as hawks seem intent on pushing discussions on quantitative tightening (QT). Read next: RBNZ “Hawkish” Move Offers NZD Support, Australian Retail Sales Rose 0.6% During August| FXMAG.COM Gilt 10s30s is steepening back to its pre-BoE intervention level Source: Refinitiv, ING Central banks can't afford to be complacent on financial stability A look at wider market stress indicators in rates and credit yields a similar conclusion. For the most part, peripheral and core rates are already at crisis levels, but not yet at a breaking point. This is hardly encouraging. A bright spot so far has been short-term funding and money markets but, each time, it is clear that the ECB’s heavy hand is responsible. This is all well and good but the expiration of TLTRO loans, tiering, and the looming QT discussion means markets cannot count on ECB support going forward. Expect to see new highs in yields and spreads as a result of central bank intransigence We think it would be wrong to take comfort in still (barely) functioning markets and that central banks should pay greater attention to financial stability. Balance sheet reduction programmes are adding to financial instability and could ultimately make their fight against inflation harder, not easier, if they are forced to choose between rescuing financial institutions and cooling the economy. Despite the BoE’s intervention last week, we keep a cautious outlook on bond markets. We expect to see new highs in yields and spreads as a result of central bank intransigence. The ECB barely intervened to support spreads in August/September 2022 Source: ECB, ING Today's events and market view European data releases today comprise German and UK construction PMIs and eurozone retail sales, but the minutes of September ECB meeting are likely to steal the limelight. We’re unlikely to get much discussion on QT but we might see some on reserve tiering. Even if this isn’t the case, it is possible that officials discuss in the press the content of yesterday’s ‘non-policy’ meeting discussions on either topics. In the minutes proper, the extent of the ECB’s inflation worries and reasons for a change in reaction function should be the main focus. Jonathan Haskel, of the BoE, is on today’s list of speakers. Bond markets have to absorb supply from Spain (7Y/8Y/10Y/30Y) and France (10Y/30Y/44Y). Today’s US job data menu includes jobless claims and Challenger Job Cuts but this will merely be an appetiser to tomorrow’s employment report. Charles Evans, Lisa Cook, Neel Kashkari, Christopher Waller, and Loretta Mester are all lined up to give their spin on the latest economic, and perhaps financial, developments. Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Data May Keep The British Pound (GBP) From Rising

Kenny Fisher (Oanda) Comments On GBP/USD And Its Realties

Kenny Fisher Kenny Fisher 06.10.2022 23:11
GBP/USD is down sharply today. In the North American session, GBP/USD is trading at 1.1150 down a massive 1.58%. The pound continues to exhibit sharp volatility, with swings of over 1% every day this week. Fitch downgrades UK debt outlook The fallout surrounding Chancellor Kwarteng’s ill-fated mini-budget just won’t go away. After immense pressure, Kwarteng abolished the tax breaks for the top 1% earners in a humiliating U-turn that has badly damaged the credibility of the new government. The fiasco sent the pound to a record low and forced the Bank of England to step in after the bond market was close to crashing. On Wednesday, the Fitch ratings agency lowered its outlook for UK debt from “stable” to “negative”, following a similar move by Standard & Poor’s after the mini-budget. Fitch did maintain the UK’s credit rating of AA-, but the lower outlook will not help Prime Minister Truss’ beleaguered government. The pound was pummelled in September, losing 3.9%. The outlook for the pound does not look good, with soaring inflation and the new government’s serious missteps after only a few weeks in office. Manufacturing PMI remained below 50, which indicates contraction. Today’s Construction PMI rose to 52.3, up from 49.2, but much of the improvement was due to an easing in supply shortages, and new orders fell to their lowest level since May 2020. In the US, the spotlight will be on Friday’s nonfarm payroll report. The reading is an important bellwether of the health of the US economy and can provide insights into the Federal Reserve’s future rate policy. On Wednesday, the ADP employment report showed a slight improvement at 208,000, up from 185,000 (200,000 est.) The ADP release is not a reliable forecaster of the official NFP release, but ADP is now using a new methodology, which hopefully will improve its reliability. Non-farm payrolls are expected to decline to 250,000 in September, down from 315,000 in August. A reading that is well off the estimate could trigger volatility from the US dollar – a strong reading will raise expectations that the Fed will stay very aggressive, while a soft release could mean the Fed has to pivot earlier than it expected. GBP/USD Technical GBP/USD is testing support at 1.1206. The next support line is at 1.1085 There is resistance at 1.1350 and 1.1486 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. GBP/USD slides after Fitch's downgrade - MarketPulseMarketPulse
The UK Economy Looks Worse Than The Rest Of The G7 Countries

UK: Spending Cuts Are likely, But Also Challenging

ING Economics ING Economics 09.10.2022 09:55
The UK government has U-turned on part of its controversial tax plan but markets are looking for further measures to reduce borrowing requirements over the next couple of years. The prospect of further Bank of England tightening means higher mortgage rates, which coupled with expensive (though capped) energy bills likely means recession In this article The UK's fiscal event has prompted a wave of volatility in markets Markets want further reassurances on tax cuts and the BoE's QT plans Higher mortgage and energy costs point to a mild recession Source: Shutterstock The UK's fiscal event has prompted a wave of volatility in markets The British government’s not-so-mini Budget a couple of weeks ago sparked chaos in UK financial markets. Investors are worried both about the amount of extra borrowing markets will need to absorb as a result of the government’s energy price guarantee and unfunded tax cuts, and the inflationary impact and resulting Bank of England reaction. Any resolution to the current crisis needs to be seen through that lens. The government has since rowed back on a plan to cut the top rate of income tax, and will also bring forward the publication of its ‘medium-term fiscal plan’. The latter likely involves spending cuts to offset the tax rises, and it’ll also be coupled with a forecast from the Office for Budget Responsibility. Investors are reading this both as a sign that the government is prepared to compromise in the face of market (and political) pressure, and that it is seeking to restore the role of the UK’s independent OBR in the process. The lack of an independent forecast with the mini-Budget had added to investor concerns. The cost of fixing household energy bills has tumbled - but that could change if gas prices surge once more Source: Ofgem Methodology, Refinitiv, ING calculations Without the government's guarantee, the unit prices for energy bills are set by the regulator Ofgem. We have estimated what these unit prices would have been based on wholesale gas and electricity futures now, and as of 26 August when gas prices peaked. The cost to the government is calculated as the difference between these unit prices, and the government's price guarantee (£2500) over a period of two years Markets want further reassurances on tax cuts and the BoE's QT plans These are first steps, however, and neither U-turn addresses the central issue for investors described earlier. Scrapping the 45% tax bracket made up only £2bn out of the total £45bn tax cuts package. Spending cuts are likely, but these may prove both politically and practically challenging. Many government departments are already set to face real-terms cuts in budgets while reducing public-sector investment goals looks inconsistent with ambitions to improve the supply side of the economy. Fortunately, gas futures prices have fallen sharply since August, and the aggregate cost of fixing household energy bills has more than halved. The 'energy price guarantee' will fix the average household energy bill at £2500, which is roughly where it has been since April once additional discounts are added in. Still, the government may find it needs to look again at a broader windfall tax covering certain types of energy producers – something that is politically popular, would likely raise tens of billions, and would provide a natural hedge should energy prices surge once again (raising the government's bill for capping consumer/business costs). Our base case for the economy is still recession For now, some limited order has been restored to both the pound and the government bond (gilt) market – though the latter heavily relies on the Bank of England’s verdict on whether to plough ahead with active bond sales later this month, as part of its quantitative tightening process. Together with a decision earlier this year to stop reinvesting the proceeds of maturing bonds in its portfolio, selling gilts would add roughly £80bn of extra supply for the market to absorb over 12 months. In such a volatile environment that’s a hard sell – and we suspect the BoE will put its plans to sell gilts on ice for a little while longer. Higher mortgage and energy costs point to a mild recession Our base case for the economy is still recession – albeit perhaps a mild one by historical comparison. Despite the mounting fiscal concerns, we shouldn’t underestimate the difference the government’s energy price cap will make to the outlook. It will save £1500 on average over the next 12 months. Still, households will still be paying more than twice as much for energy as they were two years ago, and it’s a similar story for mortgages. The average monthly payment on a two-year fix looks set to top £1600, up from around £900 in 2020, looking at the current rates available. Households inevitably need to cut back on non-essential spending, and that likely means negative GDP growth rates through the winter. TagsUK Housing Bank of England Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Bank Of England Will Be Under Pressure To Continue Hiking Aggressively

Great Britain Expects Positive Results For Its Economy

Kamila Szypuła Kamila Szypuła 09.10.2022 14:34
The coming week is full of important reports. There will be economic results from Great Britain. U.K. Average Earnings Index +Bonus At the beginning of the new week, the first important report will be the report on earnings, including bonuses. The Average Earnings figure gives us a good indication of personal income growth during the given month. The change from month to month is expected to be 0.4 times higher than the last reading. The last reading was also positive, rising from 5.1% to 5.5% This may mean that the earnings of the British have increased or they will receive more bonus. Claimant Count Change The jobless report will appear on the same day as your earnings report. The most recent reading was above 0 and this time this number is expected to drop from 6.3K to 4.2K. It is expected that with the reduction of unemployed persons, the salary increased in the last period. The first reports are expected to be positive for the British economy. Bank of England Governor Bailey Speaks October 11 is full of important events and the next is Governor's speech Andrew Bailey, Bank of England (BOE). As head of the BOE's Monetary Policy Committee (MPC) which controls short term interest rates, Bailey has more influence over sterling's value than any other person. He will wind twice this week. The next speech is on October 15th. Traders will be watching these two speeches as they can have a significant impact on the currency (GBP) position and outline future monetary policy action which also affects the pound. U.K. Gross Domestic Product (GDP) MoM The next day, ie October 12, we are awaiting the results of the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy's health. Over the last few months, the level of gross domestic product has been very diversified, once it was negative, and then it increased above zero. The current reading is projected to be 0.0%, down from the previous period (0.2%). This means a decline, but from an economic point of view, the monthly GDP reading suggests that the economy was not stagnating or growing. Source: investing.com There are no forecasts as to how the gross domestic product will change in a given month year on year. U.K. Manufacturing Production MoM The change in the total inflation-adjusted value of output produced by manufacturers report will published on October 12. Manufacturing accounts for approximately 80% of overall Industrial Production. The last reading was positive as the indicator rose to 0.4%. Although it did not meet the expectations of forecasts, it was read above zero, which is a good sign for this sector, as the reading for June was the lowest in the year, at -1.6%. The expectations for the current result are up, with an increase of 0.1% expected. If the result meets the expectations (0.2%) or is higher, it may mean that the production sector has once again improved and increased. Source: investing.com Summary 11.10.22 U.K. Average Earnings Index +Bonus 11.10.22 U.K. Claimant Count Change 11.10.22 Bank of England Governor Bailey Speaks 12.10.22 U.K. Gross Domestic Product (GDP) MoM 12.10.22 U.K. Manufacturing Production MoM 15.10.22 Bank of England Governor Bailey Speaks Source: investing.com
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

Critical Week For British Pound (GBP) - UK GDP And Employment Data

Jing Ren Jing Ren 10.10.2022 15:22
Markets are still digesting the repercussions of the Chancellor's "mini-budget". In the latest move, the BOE increased the amount of authorized buybacks through TECRF facility. That's the intervention launched to shore up the pound in the wake of the announcement of financial reforms. Despite a rebound in the later part of September, cable has resumed its longer-term downward trend against the dollar. However, that has been aided in large part by the unexpected drop in the US unemployment rate, which increased the bets that the Fed would raise rates by 75bps at its next meeting. Now, the main concern surrounding the budget appears to be the uncertainty. In that situation, the market often assumes the worst. As presented, the budget appears to increase spending (which is pro-inflationary), while reducing taxes (which questions the financial stability of the government). The combined response is to expect the BOE to hike rates more aggressively to fend off the expected increase in inflation. Bringing things back to reality Depending on how the "mini-budget" is financed, however, it could allay many of those concerns. The problem is that the key "detail" won't be available until the end of November, and the BOE will have to decide at their next meeting before that. It also opens questions of just how well planned this plan was, since the long wait is ostensibly to figure out where to get the financing for the spending. It doesn't inspire confidence that the government is issuing a plan to increase spending and cut taxes without having first ironed out where the financing for that will come from. In the meantime, there is rampant speculation that the government will cut government expenditures on a wide range of services, from pensions to government employment. That makes investors nervous, and likely would lead to even less popularity of an already unpopular government. The Labour Party, already leading in the polls, would be expected to radically change the financial situation. Getting the data in hand Government spending is included in GDP measures, meaning that if one of the ways to balance the budget is to reduce government outlays, it would put downward pressure on the leading measure of economic growth. Last quarter GDP was revised in the final reading to be barely positive at 0.2%, from a flash reading of -0.1%. On Wednesday, the UK reports August GDP, which is expected to come in at -0.1% compared to +0.2% in July. The BOE has warned that a recession is coming, and now traders are focused on the September data to see if Q3 will be the start of that. Employment figures On Tuesday, the UK will release September Claimant Count numbers, which are expected to show a relatively modest increase to 10K from 6.6K. Remember that the higher the number, the more negative it is for the markets, since it accounts for the number of people seeing unemployment assistance. The total employed figure from the rolling three months to July is also released at the same time, but is unlikely to move the markets despite a surprising forecast. The expected significant drop in employment is due to a technicality, of the unusually high number in April rolling off.
Beyonce Bounce and Soaring UK Inflation: A Challenge for Bank of England

Bank Of England (BoE) And Its Gilts, European Central Bank's Balance Sheet

ING Economics ING Economics 11.10.2022 21:27
The approaching end to the Bank of England’s purchases has sent gilts into a tailspin, a repo facility would help deal with margin financing but won’t solve the underlying problem. Joint EU debt issuance could compound fears of a more hawkish European Central Bank The Bank of England The end of BoE gilt buying looms large The Bank of England (BoE) tried – and failed – to reassure markets about the end of its gilt-buying program on 14 October. Despite a greater buying capacity of £10bn at each of the remaining operations, offers were limited and the BoE only managed to buy less than £1bn on Monday. The underlying concern is that even as its intervention draws to a close, not enough deleveraging has been achieved by pension funds, and that another wave of forced selling will emerge into next week. Volatility could well force the BoE back to the gilt market, maybe as early as today As the BoE itself has said, the aim of the buying facility was to buy pension funds time to shore up their liquidity position. Concerns remain about whether the last week-and-a-half was enough to achieve this in distressed market conditions. Eventually, the gilt sell-off could force the BoE back into the market. As we wrote at the time, we think a longer period of support for gilts will be necessary to restore market confidence. 30Y gilts traded at 4.7% yesterday, just 30bp below their pre-intervention peak, and their weakness dragged the pound lower. Volatility could well force the BoE back to the gilt market, maybe as early as today. And indeed, the Bank just announced that it will extend its purchases to inflation-linked gilts, adding one buying operation of up to £5bn each day this week to the already scheduled conventional gilt purchases. Helpfully, the announcement came alongside the launch of a repo facility accepting a broader range of assets as collateral. The idea is that instead of being forced sellers of, say, corporate bonds due to growing margin requirements, pension funds could instead pledge them as collateral to obtain financing. The facility will be in place for one month. In our view, this should be viewed as a complement to support the gilt market, not as a replacement, as a gilt sell-off (30Y yields have risen 110bp since their post-intervention through, for 30Y inflation-linked gilts, that figure is over 150bp) could still generate margin calls that exceed the fund’s funding capacity. In a further sign of its concern for market stability, the BoE also temporarily suspended its corporate bonds' quantitative tightening (QT) sales for two days. Long-end gilts are back in the danger zone Source: Refinitiv, ING The multi-headed fiscal hydra is back Of course, the difficulties facing the UK are not unique. The Fed’s tightening cycle and the rising dollar are thorns in the side of many central banks already grappling with inflation, including the ECB. In that context, Bloomberg reporting that Germany is dropping its opposition to joint EU borrowing to finance the energy support package is unlikely to be greeted kindly by bond investors. If confirmed, it would mean more issuance in already nervous markets (have a look at today’s supply slate in the last section), but investors would also worry about the inflationary impact and the ECB’s reaction. Markets can find solace from the contradictory sources cited by Reuters late yesterday. The concern however is that the reports come after Germany unveiled an up to €200bn package, drawing criticism from other countries with insufficient bond market liquidity to finance a commensurate package. Joint issuance would be bad news for core bonds which would nervously await the ECB’s reaction. For sovereign spreads, however, this is good news, as EU loans would lower pressure on peripheral bond markets. The prospect of ECB balance sheet reduction also casts a long shadow on bond markets. Klass Knot suggested that QT could begin at the earliest in early 2023. We still doubt QT could start in such a short timeframe but, if it does, we could see phased-out asset purchase programme (APP) redemptions in 2023, followed by pandemic emergency purchase programme (PEPP) redemptions in 2025. The strongest impact should be felt in peripheral debt markets, while it could also compound the tightening of money market spreads (eg rising Euribor vs Estr or Estr vs ECB deposit rate) due to targeted longer-term refinancing operations (TLTROs) repayments. The reduction in ECB purchases has already sent bond yields up Source: ECB, ING Today's events and market view Italian industrial production is the main item on today’s economic calendar but it is fair to say that the attention will be on the heavy bond supply slate after yesterday's gilt-led, long-end sell-off. The EU and Germany have both mandated banks for the sales of 7Y/20Y and 30Y bonds, respectively, via syndication. This will come on top of 2Y and 7Y auctions already scheduled by Germany and the Netherlands. The aftermath of the sales could see relief in the sector provided the gilt sell-off doesn’t accelerate. In that respect, the results of the sale of £0.9bn of 30Y inflation-linked gilts, the epicentre of yesterday's market rout, and the focus of newly announced purchases operations, will be key. In the afternoon, the main flashpoint will be US small business optimism. Our economics team flagged the pricing intention component as an important indicator to watch for declining inflation. The US Treasury kicks off this week's supply slate with a 3Y T-note auction for $40bn. Central bank speakers will also be plentiful. From the ECB, Philip Lane and François Villeroy are on the schedule. We’ll look closely for comments on QT or on the risk of more fiscal spending (see above). Andrew Bailey, of the BoE, will also be closely watched as the Bank’s response to the jitter in the gilt market is coming under greater scrutiny. Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

Bank Of England Helped GBP/USD, But Purchasing Period Ends On Friday

Alex Kuptsikevich Alex Kuptsikevich 12.10.2022 11:27
The Bank of England's frenzy of emergency bond market support is rocking the currency market boat, leaving GBPUSD as one of the protagonists on FX. The Bank of England extended emergency support to the debt market yesterday to include inflation-linked bonds in its buying list, triggering GBPUSD to rise from 1.10 to 1.1180 intraday. But in the evening, Governor Bailey reminded that the emergency measure remains temporary and these extended purchases will end on October 14 as planned. These statements triggered mini-chaos in the debt market and took more than 2.3% off the pound from its peak to bottom on Wednesday morning at 1.0923. This bipolar policy is perplexing, although it makes a certain sense. The Bank of England insists on leaving emergency market support temporary, while the market wants an extension of the support programmes, although it makes little use of it. The Bank of England issued bids for £40bn over the two weeks of the program but bought £5bn. Distressed pension funds are in no hurry to sell bonds, simply hoping that the very presence of a "buyer of last resort" will drive up prices — a habit developed in the markets over the past decades. Remarkably, the FX market is greeted by news of an extension of the QE programme or a "flexible approach" to bond purchases with GBP buying. Conventional logic suggests that buying assets on the balance sheet is a net issue for the pound, increasing its supply, which is harmful to the exchange rate. But now bond purchases are lowering the heat on the UK debt market, bringing buyers back into the pound. Locally GBPUSD is gaining support on declines in the 1.0900 area, reassuring that the exchange rate has already passed its low point in September. It is worth being prepared for the Bank of England to accelerate short-term interest rate hikes to support the attractiveness of the short-term debt market. But in the meantime, periodic interventions at the far end of the curve are not ruled out. Overall, this is a positive strategy for the pound, although frequent shifts between support and constraint regimes create volatility in the pound and increase risk premiums in the markets.
Positive Shift in Inflation Structure: Core Inflation Falls in Hungary

The German CPI Reached The Forecast Level, The Inflation Report From America Ahead

Kamila Szypuła Kamila Szypuła 13.10.2022 09:26
Today, mainly important reports from the United States will appear. The report on inflation and the number of requests for unemployment insurance may significantly affect traders and give a picture of the condition of the US economy. On the old continent, we will mainly focus on the result of the German CPI. German CPI The monthly change and the annual consumer price index met expectations. The monthly change in the German CPI reached 1.9% and rose from 0.3%. Similarly, there was an increase in the annual change of the CPI from the level of 7.9% to the level of 10.0%. Switzerland Producer Price Index There were no forecasts for the Switzerland Producer Price Index. The monthly price of the change in the price of goods sold by manufacturers rose from -0.1% to 0.2%. After weak readings in July and August, this is a positive signal for this sector. On the other hand, the PPI YoY fell by 0.1%, thus reaching the level of 5.4%. BOE Credit Conditions Survey The Bank of England (BoE) will published the results of their Credit Conditions Survey for Q3, 2022. The bank conducts such research every quarter. As part of the Bank of England mission to maintain monetary and financial stability, the bank conducts research to understand credit trends and changes. Today's quarterly survey of construction banks and lenders contributes to this work. The survey covers: Secured and unsecured loans to households. Loans for non-financial corporations, small businesses and non-bank financial companies. Speeches of the day At 8:00 CET the first speech of the day was the speech from Germany. The speaker was President Nagel. He is also voting member of the ECB Governing Council. He's believed to be one of the most influential members of the council. For this reason, his speech may significantly affect the monetary situation of the euro zone. The next speech will be from the Bank of England which is set at 13:00 CET. Dr Catherine L Mann serves as a member of the Monetary Policy Committee (MPC) of the Bank of England. Her public engagements are often used to drop subtle clues regarding future monetary policy. US Core CPI The Core Consumer Price Index (CPI) measures the changes in the price of goods and services, excluding food and energy. The current reading of the indicator is expected to decline by 0.1% to 0.5%. The previous reading was at 0.6% and it was an increase from the July drop (0.3%). On the other hand, the annual change in the index is forecasted at 6.5%. And it may mean an increase from the level of 6.3%. US CPI Today the US inflation report will be published. This report can significantly impact the foreign exchange market. Read more about forecasts for the current level: https://www.fxmag.com/forex/inflation-report-ahead-what-might-it-look-like-in-the-united-states-u-s-cpi US Initial Jobless Claims There will also be a weekly report on the number of unemployment insurance applications today. The previous reading was negative as it rose to a higher level than expected. Current forecasts show a further increase in this number from 219K to 225K. The expected further negative results in a row may translate into deterioration of the economy in this sector. Crude Oil Inventories The weekly report about change in the number of barrels of commercial crude oil held by US firms will be published at 17:00 CET. Forecasts for this period show an increase from -1.356M to 1.750M. The increase in crude inventories is more than expected, it implies weaker demand and is bearish for crude prices. Summary 8:00 CET German Buba President Nagel Speaks 8:00 CET German CPI (YoY) (Sep) 8:00 CET German CPI (MoM) (Sep) 8:30 CET Switzerland PPI (MoM) (Sep) 10:30 CET BOE Credit Conditions Survey 13:00 CET BoE MPC Member Mann 14:30 CET US Core CPI (MoM) (Sep) 14:30 CET US Core CPI (YoY) (Sep) 14:30 CET US CPI (MoM) (Sep) 14:30 CET US CPI (YoY) (Sep) 14:30 CET US Initial Jobless Claims 17:00 CET Crude Oil Inventories Source: https://www.investing.com/economic-calendar/
The EUR/USD Price May Fall Under 1.0660

"The ECB is also seeing the risk of fiscal policies pushing it towards more aggressive tightening"

ING Economics ING Economics 13.10.2022 11:06
It's been helpful to see core US inflation easing off the highs through the summer. However, the past month or so has seen a re-elevation. And today, the market expects US core inflation to get back up to the 6.5% peak that was seen in March. Market rates remain well below this, as is the Fed funds rate. Based off this alone, rising rates pressure is the upshot Rises in core US inflation can only pressure market rates higher When the Federal Reserve delivered its first 25bp hike in March, core consumer price inflation (CPI) was running at 6.5%. That in fact proved to be a peak, as it wandered to below below 6% in subsequent months. But, it rose last month, and the market is expecting it to have risen again for September (today's report), back up to 6.5%. That’s discouraging against a backdrop where the Federal Open Market Committee minutes paint a clear picture of an intention to keep rate hike pressure elevated until inflation has been tamed. A wider problem for the Treasury market has been the tendency for core measures of inflation to edge higher again in the past couple of months. We saw that from the US PPI report yesterday, with similar expected from the US CPI report today.  The Fed's target of 2% inflation remains quite deviant from the 6% handle that core inflation continues to cling to. And even though we expect inflation to fall in a precipitous manner in the quarters ahead on base effects, a recent tendency for core to remain quite elevated and sticky does not help. This maintains upward pressure on Treasury yields. The 10yr yield has popped above 4% twice in the past few weeks (for the second time yesterday), and seems reluctant to push on above. But in all probability should we see a 6.5% core CPI inflation reading confirmed today, it should provide enough ammunition for it to make the break above. Yes, it’s what is discounted. But confirmation still has real meaning. It’s these inflation numbers that continue to drive market rates, and even though real rates have moved solidly positive and breakeven inflation resolutely lower, the fact remains that market rates remain well below printed inflation rates, as does the funds rate (and the Fed knows it). 30Y GBP swap indicates gilt yields will soon rise above their pre-intervention peak again Source: Refinitiv, ING The BoE is trying to hold the line In the wake of the Fed pressing ahead on its aggressive tightening trajectory, tensions in other markets become more apparent. The UK rates market continues to be a large contributor to volatility as the Bank of England tackles the ongoing fallout from monetary and fiscal policy working at cross purposes. The BoE’s chief economist had signalled the need to raise rates significantly in November, also citing the likely inflationary impact of the government's budget plans as they currently stand. But the announcement of the medium-term fiscal strategy has been brought forward to 31 October, just days before the BoE is set decide on interest rates. Gilt yields only dropped back after the BoE accepted all bids in its daily buying operation Until then the BoE may well continue to play hard ball, at least to the extent that financial stability allows. For now the intervention in the long-end sector of gilts is set to expire by the end of this week, as much was confirmed by a Bank statement after mixed signals in the press. On that prospect the 30Y gilt yield had indeed briefly climbed above 5%, the level reached before the BoE first started long-end gilt purchases, and only dropped back after the BoE accepted all bids in its daily buying operation. The question remains whether two more days of BoE purchases will be enough to calm markets.       ECB quantitative tightening talk is becoming more concrete The European Central Bank is watching the BoE’s struggles closely. It is also seeing the potential risk of fiscal policies pushing it towards more aggressive tightening than otherwise. ECB President Lagarde urged cooperation between central banks and their governments. The remarks of the Dutch Central Bank’s Klaas Knot reflected some unease when he said that he was not sure whether all fiscal measures were targeted enough. Against that backdrop the pricing of rate hikes had already become more aggressive with the market pricing more than 125bp of hikes still this year and the 1y1y ESTR OIS forward close to 3%. The ECB is also seeing the risk of fiscal policies pushing it towards more aggressive tightening And looking beyond rate hikes, the talk of quantitative tightening is already becoming more concrete. President Lagarde confirmed yesterday that the Council had started deliberations on the topic. Other members have already been more specific about the ECB’s plans for its balance sheet. France's Villeroy reiterated that the balance sheet reduction should commence after the normalisation of rates, first with the repayments of the targeted longer-term refinancing operations, where a good part expires in the middle of next year, and then by a gradual reduction of the asset purchase programme portfolio as reinvestments are phased out. This could start before 2024. ECB QT will widen money market spreads, starting in 2023 Source: ECB, ING   Wary of the impact that already the communication surrounding quantitative tightening may have on markets, the ECB’s current messaging does appear more streamlined than we have experienced in the past. It was also Klaas Knot who remarked that bond markets had become more sensitive to debt sustainability issues, and thus “a process like QT – it should be predictable, it should be gradual, it should be even a little bit boring”. The key risk gauge is the 10Y spread between Italian and German government bonds, which temporarily rose some 8bp yesterday, though also amid greater market volatility spilling over from the UK. For eurozone bond markets the ECB's bond purchases have been instrumental in bringing down bond spreads, and with the excess liquidity injected also in the compression of money market. A reversal of the purchases is therefore all but boring. While the emerging outlines of the ECB's quantitative tightening plans are consistent with the assumptions we have made so far, we think there could still be a considerable effect on sovereign and money market spreads.   Today's events and market view Markets will continue to have one eye on the UK's and the BoE's buying operations – and any hint that the intervention could be prolonged. Gilt markets remain a major source of volatility, though today should also see US data taking the spotlight with the CPI data for September. It is the one release where a large surprise could potentially still swing the Fed away from another 75bp jumbo hike, which markets by now are fully discounting. The consensus is looking for the headline rate to be 8.1% year-on-year. In the core rate the focus should be on the anticipated decline in the monthly rate from 0.6% to 0.4%. In the eurozone primary market Italy will sell a new 3-year bond alongside reopenings of 7-, 15- and 30-year bonds for a total of up to €8.75bn. The US Treasury will reopen the 30Y for US$18bn.  Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Central Bank Policies: Hawkish Fed vs. Dovish Others"

Bank Of England, The UK Economy Indicators, FOMC Minutes And More Discussed In the Latest Episode Of Oanda Market Insights Podcast

Craig Erlam Craig Erlam 13.10.2022 11:33
OANDA Senior Market Analyst Craig Erlam reviews the latest market news with Jonny Hart. They discuss the Bank of England, UK GDP, Bank of Korea rate decision and preview the Fed minutes. http://www.subscribeonandroid.com/audioboom.com/channels/4947364.rss This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
UK Budget: Short-term positives to be met with medium-term caution

The British Stocks And The British Pound (GBP) Remain In Decline

TeleTrade Comments TeleTrade Comments 14.10.2022 12:08
Economists at HSBC analyze the outlook for UK stocks, gilt yield and the British pound. The UK economy remains in a challenging environment. A challenging outlook for the UK assets “We now see the risk to UK equities more firmly to the downside. We, therefore, move our tactical weighting to an underweight. We have a preference for more defensive sectors and energy within the globally focused FTSE 100 index.” “For gilts, in the long-run, we expect that slowing UK growth next year will eventually lead to falling yields. But in the near-term, the market is too volatile to take a strong directional position so we stay on the sidelines for now.” “The risks to GBP remain to the downside as it will take time for confidence to return, and some of the current weakness is also a consequence of the continued strength of the USD. Against a broader basket of currencies, GBP hasn’t yet reached previous lows, which it could test as the economic climate becomes more strained.”
The Market May Continue To Buy The Pound (GBP) This Week

British Pound Faces Lot Of Headwinds. Failed Kwarteng's Ideas Are Still Casting A Shadow

Kenny Fisher Kenny Fisher 14.10.2022 14:13
GBP/USD has reversed directions today and is in negative territory. In the North European session, GBP/USD is trading at 1.1274, down 0.34%. Pound jumps on tax cut U-turn The pound continues to show strong volatility and jumped 2% on Thursday. The sharp swings over the past few weeks were triggered by Chancellor Kwarteng’s mini-budget in late September. Normally tame affairs, the mini-budget contained sweeping tax cuts to stimulate economic growth. Perhaps a solid idea in normal times, but with soaring inflation, high interest rates and the spectre of a recession, the markets absolutely savaged the plan. Even the IMF gave the plan a thumbs-down. The pound plunged to a 37-year low after the tax cuts were announced, and the Bank of England had to intervene due to a near-crash in the UK bond market. The new Truss government has had to make a humiliating about-face, and reports on Thursday that the government would abolish the planned tax cuts sent the pound sharply higher. The BoE was forced to step in with an emergency gilt-buying program, which is expected to end today. There is some concern that the bond market could show further volatility, in which case the BoE will have to again intervene. The government’s clumsy attempt to slash taxes could cost Prime Minister Truss and Chancellor Kwarteng their jobs, and the political uncertainty and instability surrounding the new Truss government will only add to the pound’s problems. The US wraps up the week with the September retail sales report. This will be a report card on how consumer spending is holding up, given red-hot inflation and high interest rates. Headline retail sales is expected to nudge lower to 0.2% MoM (0.3% prior), while core retail sales is projected to come in at -0.1% (-0.3% prior). GBP/USD Technical GBP/USD faces resistance at 1.1373 and 1.1455 There is support at 1.1214 and 1.1085 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. GBP/USD dips, US retail sales next - MarketPulseMarketPulse
Bank Of England Will Probably Be Unable To Avoid A Significant Easing Of Policy

What CPI Reading In Great Britain Can We Expect This Time?

Kamila Szypuła Kamila Szypuła 15.10.2022 08:07
Throughout all the months of this year, inflation remains in the candlestick. Every month we notice a change in the consumer price index (CPI), which informs about the annual or monthly change the price of a weighted average market basket of consumer goods and services purchased by households. Why are prices rising so fast? Once again our eyes will be on the UK reports. Other countries are also experiencing a cost of living squeeze. Many of the reasons are the same: increased energy costs, shortages of goods and materials and the fallout from Covid. According to the Governor of the Bank of England Andrew Bailey, the cause of inflation in the UK is "a shock in Russia" After all, as stated by the Governor of the Bank of England, there are many other factors, such as: energy bills that have risen sharply due to high oil and gas prices. gasoline and diesel prices, partly because the war in Ukraine has increased the price of crude oil. food prices as the war in Ukraine reduces grain production and costs increased drastically Not all prices behave the same way. The cost of some other goods and services have increased only slightly or stayed the same. What inflation looked like and what can it look like in the UK? As we can see from the horse of last year, inflation in Great Britain continues the upward trend. There was a sharp increase in April as it rose from 2%, from 7.0% to 9.0%. In the collections it grew slowly, only by a tenth of a percent. In July, it exceeded the 10% threshold, amounting to 10.1%. Then it unexpectedly fell to 9.9% in August. It is projected to rise from this level to 10.0% in September. Investment bank Goldman Sachs now says inflation could peak at 10.8% in October, and slow to 2.4% by December 2023. Lower inflation does not mean prices will go down. It just means they will stop rising at their recent faster pace. Source: investing.com Inflation in the last reading depending on the sector The annual inflation rate for transport was 12.4% in August 2022, down from 15.1% in July. Food and non-alcoholic beverage prices rose by 13.1% in the 12 months to August 2022, up from 12.7% in July. The annual rate for the miscellaneous goods and services category was 4.6% in August 2022, up from 4.0% in July. The rate is the highest recorded since September 2005. The annual rate for clothing and footwear was 7.6% in the year to August 2022, up from 6.6% in July. And this time, in the September post office, we can expect growth in these sectors. The actions of the British central bank in the fight against inflation The Bank is under pressure to put rates up because it has a target to keep inflation at 2%, but prices are currently rising at about five times that level. The Bank of England's traditional response, as other cental banks, to rising inflation is to raise interest rates. On 22 September, the Bank of England raised rates by 0.5 percentage points to 2.25% - the highest level for 14 years. This can encourage people to save, but means some people with mortgages see their monthly payments go up. How it affects ? When interest rates rise, about two million people on tracker and variable rate deals see an immediate increase in their monthly payments. Their monthly payments may not change immediately, but with lenders now anticipating higher rates, any new deals will be more expensive. That means new house buyers - or anyone seeking to remortgage - will also have to pay more. Raising interest rates also makes borrowing more expensive and - it is hoped - people have less money to spend. As a result, they will buy fewer things and prices will stop rising as fast. Bank of England interest rates also influence the interest charged on things like credit cards, bank loans and car loans It also has negative effects on savings because the value of cash savings is falling in real terms. Source: investing.com, ons.gov.uk
Belgian housing market to see weaker demand and price correction

Another Bad Mood In The US Housing Market| Data That Will Affect The Decision Of The Bank Of England

ING Economics ING Economics 17.10.2022 11:02
US house prices fell for the first time in more than 10 years in July – we expect the market will slow further with declines in both existing home sales and house starts. For the UK, we see headline and core inflation rates edging higher. However, we believe we are now very close to the peak, given the government's decision to cap household energy bills In this article US: Housing market showing weakness UK: Fiscal U-turn in focus as Bank of England intervention ends Source: Shutterstock US: Housing market showing weakness The latest job and inflation readings have cemented expectations of a 75bp hike from the Federal Reserve on 2 November and heightened the chances of a fifth consecutive 75bp hike in December. However, we still favour the Fed slowing the pace of hikes to 50bp on 14 December given the intensifying economic headwinds that should allow inflation to fall quickly through 2023. The housing market is going to be a key factor in this. House prices fell for the first time in over 10 years in July as the surge in mortgage rates prompted a collapse in housing demand. Things have got much worse since then with mortgage applications for home purchases at the lowest level since the housing bear market of 2010-13. With more supply coming on the market the challenge to sell homes is going to increase, which will weigh further on prices and lead to another sharp fall in home builder sentiment this week. Homebuilding looks set to slow further with existing home sales declining too. This is bad news for construction, confidence, job creation and retail sales tied to housing transactions such as building supplies, furniture, home furnishings and household appliances. However, it may well help to get inflation lower more quickly and allow the Fed to reverse course on its aggressive interest rate increases next year. Shelter accounts for a third of the inflation basket by weight and historically the shelter series lags behind movements in house prices by around 12-14 months. Over the past couple of weeks rent.com, apartments.com and CoStar Group have all been reporting rent price falls in major cities so this could imply a quicker transmission. We will see how this develops, but with surveys suggesting that corporate pricing and vehicle prices are showing signs of softening, we think the risks are skewed towards inflation falling more quickly through 2023 than the consensus. UK: Fiscal U-turn in focus as Bank of England intervention ends Markets have been buoyed by reports that the UK government is preparing a major U-turn on its tax cut plans, which were announced in September and brought widespread disruption to UK bond markets. On paper, the resumption of the planned hike in corporation tax – if done in full – coupled with a revenue cap/windfall tax on renewable and perhaps nuclear energy producers, could materially reduce the government’s borrowing requirement over the next couple of years. But with the Bank of England ending its temporary bond buying scheme, investors will need to see these press reports crystalise into concrete and far-reaching plans this weekend to avoid a renewed sell-off in gilts next week. Further volatility is likely in either case, and we still think there’s a fair chance the BoE will at the very least need to further postpone its plans to start selling bonds later this month – not least because of the challenging environment created by ongoing Fed tightening. Further bond buying also shouldn’t be ruled out. All of this will also help determine just how aggressively the BoE will need to hike rates in early November. By that point we’ll have had the government’s Medium-Term Fiscal Plan (ie the full extent of any U-turns) and depending on whether we see a renewed period of sterling weakness between now and then, there’s a chance the BoE may be able to get away with a 75bp hike rather than the 100bp move we’ve been pencilling in. Next week’s CPI data is unlikely to be the main decider here, but for what it’s worth we see both the headline and core rates edging higher. However, we think we are now very close to the peak, given the government’s decision to cap household energy bills. Key events in developed markets next week TagsUS UK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Pound Is Now Openly Enjoying A Favorable Moment

The New UK Chancellor Jeremy Hunt Has A Lot Of Options To Choose

ING Economics ING Economics 17.10.2022 12:44
Investors want to see bold changes from new Chancellor Jeremy Hunt later today. Further wholesale changes to the "mini" Budget are likely, and so is a fall in 10-year government bond yields to 4%. But closing the fiscal hole entirely will be challenging, and without the Bank of England's bond buying, sustaining the rally in gilts could prove challenging New UK Chancellor poised to announce fresh U-turn The story is once again moving pretty fast in the UK. New UK Chancellor Jeremy Hunt will unveil further U-turns on the government’s "mini" Budget later today (11am UK time), in effect bringing forward large parts of the ‘Medium-Term Fiscal Plan’ from 31 October. With Prime Minister Liz Truss under heavy political pressure, there’s a sense that Hunt now has the latitude to make sweeping changes. The goal is to meet a fiscal rule that says debt should fall as a percentage of GDP in the medium term. Friday’s lukewarm market reaction to reinstated plans to increase corporation tax showed that a piecemeal/incremental approach to policy change is unlikely to be sufficient to reassure investors. According to reports in the Sunday Times, the Office for Budget Responsibility (OBR) forecasts that including the measures in the Growth Plan a few weeks ago, the government faces a shortfall of £72bn. That’s now closer to £50bn as a result of the most recent U-turns. So what options does the Chancellor have?  Seven possible options for the Chancellor Delay (or cancel entirely) the planned cut to the basic rate of income tax and abandon smaller plans. This looks like it’s essentially a done deal, judging by press reports. Abandoning plans for a 1p cut to income tax would save roughly £5bn, and a further £5-8bn could be saved by getting rid of smaller measures in the growth plan, including on tax-free shopping for visitors. Reverse the planned cut in national insurance (a tax on workers/their employers). Previous Chancellor Rishi Sunak had increased this tax last year, and new PM Truss committed over the summer to reverse it. Treasury costings suggest this decision would cost £18bn per year by 2026-27. The government will be highly reluctant to do a U-turn here, partly because a bill repealing Sunak’s NI change passed through the House of Commons last week. Cut day-to-day public spending. Chancellor Hunt hinted in TV interviews over the weekend that spending is unlikely to rise as quickly as previously planned. But promising spending cuts is often much easier than delivering them. Partly that’s because many departmental budgets have already been cut heavily in recent years, but also because many were already set to see their funding fall sharply in real terms over the next couple of fiscal years. As a result, we think investors will treat any pledges to cut spending with some caution. Cut public sector net investment plans. Before Covid, government capital spending was typically 2% of GDP in each fiscal year, but under former PM Boris Johnson, this was projected to increase to 3%. Cutting back these plans could potentially save £25bn a year, though in practice this could take time. Needless to say, this is inconsistent with plans to grow the supply side of the economy. But we think cuts here are likely given the challenges involved with reducing current (day-to-day) spending. Look at other tax rises. Given challenges elsewhere of closing the fiscal hole entirely, the government may find it needs to look at more wide-ranging tax increases. An increase in the rate of VAT for instance would raise upwards of £10bn depending on the scale. Revenue cap on renewable energy producers. The FT reported last week that this is effectively a done deal, subject to the finer details. It would work in a similar way to the EU’s proposals, which would heavily tax any revenues made by renewable energy producers above a certain level of wholesale electricity prices. Depending on its construction this could potentially raise tens of billions of pounds. But perhaps more importantly, it would act as a natural hedge against the cost of the government’s energy price guarantee. Make the energy price guarantee less generous. The government’s decision to cap household electricity/gas prices for two years went further than many expected when it was announced in early September. The fact that it applies equally to all households does suggest some room to make the policy more targeted, though in practice that’s complicated. Without the cap, households in most income deciles were set to see energy costs top 10% of disposable incomes. With few ways to target support beyond the income tax and benefits system, the practicalities of adjusting support based on economic need could be challenging. Nevertheless, there are potentially big savings to be made if a mechanism can be found to target the policy more accurately. Increasing income tax rates temporarily is the most obvious way of achieving this, though clearly would be hugely politically challenging. The BoE has pushed back against expectations of more gilt purchases Source: Refinitiv, ING A rally in gilts is likely - but can it be sustained? The latest reports suggest that we should expect most of the "mini" Budget to be scrapped today, with the exception of the stamp duty cut (that has already come through) and the national insurance cut. But the lesson from the menu of options presented above is that the government will likely find it needs to go further than that to balance the budget - and indeed may find it needs to lean more heavily on tax rises than spending cuts in order to make the biggest impression on financial markets. The chancellor will also be acutely aware that wherever borrowing costs settle over the coming days will have a bearing on OBR forecasts due on 31 October. A fall in gilt yields would translate into a fall in projected interest costs and in turn, reduce the fiscal hole a little bit further. OBR ready-reckoners suggest a 1 percentage point fall in gilt yields and short-term rates would see a £16bn fall in annual spending requirements by 2026/27. So far, gilt markets have reacted positively this morning to the latest fiscal press reports. But ultimately, the monetary value of the deficit reduction measures to be announced today matters, and so does the message sent about the importance of fiscal sustainability. A rally to 4% for 10Y gilts is a likely outcome but a more difficult question is whether these gains will be sustained. The BoE confirmed this morning its reluctance to engage in more gilt purchases, after buying £19.3 in recent weeks. effectively leaving the chancellor to deal with market turmoil on his own. Meanwhile, market functioning is and will likely remain impaired for a while. Investors will understandably fret about the prospect of BoE gilt sales resuming at the end of the month. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Bank of Japan to welcome Kazuo Ueda as its new governor

Forex: Japanese Yen (JPY) Gathers Interest Again

Craig Erlam Craig Erlam 17.10.2022 22:33
A humiliating blow Another turbulent start to the week, albeit a positive one broadly speaking with equity markets around 1% higher in Europe after a decent start to the week in Asia. Since Liz Truss became UK Prime Minister, uneventful days have eluded us and this week has also got off to another hectic start. While the Prime Minister had every intention of making waves in her first weeks in charge, she clearly didn’t anticipate the storm that was brewing and I’m sure she more than anyone at this point would do just about anything for a more peaceful few weeks. Read next: Netflix Stock Price May Tumble Tomorrow! What Can We Expect From NFLX Earnings? | FXMAG.COM Assuming she lasts that long, of course. The u-turn this morning was even more historic than the initial mini-budget. A humiliating moment after a chaotic period for Truss in which confidence in her in the markets, the public and her own party, it seems, has been decimated. That said, we are seeing some improvement from a market perspective. It just took reversing almost all of the unfunded tax cuts to achieve it. Who’d have thought? The job isn’t done yet though, the new Chancellor has done what was necessary now but the harder decisions arguably come later this month in the budget. How low can it go? The yen is continuing to slide against the US dollar, hitting 148.89 this morning and trading beyond the level the country intervened at in 1998 and, of course, last month. We’ve had the usual plethora of commentary from various officials overnight; “high sense of urgency”, “ready to act” etc. It does seem only a matter of time until we get another powerful intervention in the FX markets, it’s just a question of what they’ll do differently this time as doing the same again every few weeks simply isn’t sustainable. The question is whether the yen will surpass 150 against the dollar first. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. The mother of all U-turns - MarketPulseMarketPulse
Bank of England survey highlights easing price pressures

Bank of England Have A Problem With Fight Against Inflation And The British Pound (GBP) Will Stay Under Pressure

TeleTrade Comments TeleTrade Comments 18.10.2022 09:01
The Bank of England (BoE) might struggle to get inflation under control. Therefore, economists at Commerzbank expect sterling to remain under pressure. BoE still wants to show consideration for the bond markets “Doubts might soon arise as to whether the BoE will actually stick to its restrictive monetary policy if the economy were to fall into a significantly deeper recession than so far assumed. In addition, the BoE apparently still wants to show consideration for the bond markets and thus the treasury by wanting to delay its QT plans.”  “We remain sceptical whether the central bank will hike rates sufficiently to get inflation under control, and as a result, we also remain rather pessimistic as far as sterling is concerned.”
Mexico’s Central Bank Surprised Markets With A 50bps Rate Hike Once Again

Mexican Peso (MXN) Positions May Fall Further | The GBP/USD Pair Is Struggling To Gain Confidence In The Market

ING Economics ING Economics 18.10.2022 11:11
A reversal in UK fiscal policies, some stability in equity markets, and a dip in European energy prices point to a further corrective period in FX markets. The dollar could weaken a little further, but the core bull trend should remain intact In this article USD: Corrective forces may dominate short term EUR: Terms of trade go into reverse GBP: Don’t chase sterling higher MXN: Interesting carry USD: Corrective forces may dominate short term Measures of the trade-weighted dollar index are around 2.5% off their highs of the year. The correction has nothing to do with any softening of Federal Reserve tightening expectations. Here the market firmly expects the Fed to hike 75bp on 2 November and prices a terminal rate as high as 4.90% next spring. Instead, we would say three factors are behind this current dollar correction. The first is the reversal in UK fiscal policy. The much-maligned policy that garnered criticism at the IMF meetings has been largely reversed. This has brought some calm to global bond markets (Gilt instability had been dragging US Treasuries lower). Our rates strategy team does not see UK 10-year Gilt yields racing a lot further under 4.00%, though reports of the Bank of England delaying the start of its quantitative tightening Gilt sales programme should be helpful. Equally, it may be too early to expect US 10-year Treasury yields to drop back to the 3.75% or 3.50% area if the market is still searching for the top in Fed funds near 5%. The second factor is global equity markets. It is very early days, but the MSCI world equity index is now 5% above last week's lows, with the S&P 500 rallying another 2.6% yesterday. Global asset managers, positioned very underweight equities and overweight cash, could be putting money to work and are wary of the seasonal factors, where the S&P 500 index has rallied in nine of the last ten Novembers. How far the equity rally continues remains to be seen - but so far 3Q US earnings have been encouraging (only 29% of those reporting so far have missed on expected sales numbers, with only 24% missing on earnings). And the third factor is energy. European gas prices continue to sink on warmer weather and European gas storage facilities being largely full. Lower gas prices are allowing a drop in electricity prices, where German one-month forward power prices are just 50% above early June levels, compared to being three times higher in late August. The drop in energy prices is reversing the negative income shock that hit energy importers over the summer and reduces the dollar's advantage. A quiet week for US data could see the dollar correction extend a little. High beta currencies which trade on higher implied volatilities, eg AUD, NZD, NOK, SEK and possibly GBP may outperform during this period. And the case could be made for DXY heading back to 110 (another 2% drop). But a core view of not just the Fed, but other central banks hiking into a looming recession should mean that the core dollar bull trend remains intact. Chris Turner  EUR: Terms of trade go into reverse EUR/USD went under parity in late August largely driven by the negative terms of trade shock of higher energy prices. That energy shock is temporarily going into reverse as European gas prices drop sharply on the warmer weather and European governments having largely achieved their gas storage targets. It would thus be churlish of us to suggest that EUR/USD does not need to rally. A quiet week for US data (just soft US housing) and the conditions we outlined above, therefore, create a corrective window for EUR/USD, where an obvious target is the top of this year's bear channel at around the 0.9980/1.0000 area. We would assume that this continues to hold the correction.  Elsewhere today we have the German ZEW investor survey, which should continue to decline.  And we also have some ECB speakers in Gabriel Makhlouf (1540CET) and Isabel Schnabel (1900CET). The core ECB message at the moment seems to be the need to get the policy rate (deposit rate now 0.75%) as quickly as possible to 2% and then take stock from there. Chris Turner GBP: Don’t chase sterling higher As new UK Chancellor Jeremy Hunt carefully claws back all the fiscal giveaways offered in late September, the question is how far should sterling now rally? Taking the UK sovereign credit default swap as a benchmark for levels of UK fiscal anxiety, one could mark out dates around mid-September (GBP/USD at 1.15) and the third week in August (1.18) as possible targets – representing brief periods of stability before Trussonomics hits home. While there may be some more fiscal positives to come were the Conservatives to look at a windfall tax on the energy companies, we suspect cable will struggle to sustain gains over 1.15 this month. News that the UK government is shortening the period of the Energy Price Guarantee to six months from two years may not be greeted well by the consumer and also raises the prospect of UK inflation staying higher for longer. Equally, the Fed terminal rate has been priced close to 100bp higher over the last month. We think higher US real rates have contributed to the size of the sell-off in UK asset markets. There are no signs that the Fed wants to reverse this rise in real interest rates anytime soon. And one month GBP/USD implied volatility (now at 16% versus a peak near 22% in late September) may struggle to return to pre-crisis levels of 12% - confirming that trust is hard won and easily lost. Chris Turner MXN: Interesting carry Given the prospects of a brief corrective period in the dollar, interest may return to the carry trade. The highest available carry in the FX space can be found in Eastern Europe (Hungarian forint one month implied yields pay a staggering 16.5% per annum) and also the Latam currencies. However, we think Central and Eastern European FX still carries a lot of risks currently. The Mexican peso also has an attractive carry, with one-month implied yields are 10.2%. Banxico continues to move in lock-step with the Fed. Whilst investors could miss out on some larger nominal appreciation elsewhere, Mexican peso positions may have lower draw-downs if things went wrong. Spot USD/MXN could even make a run to 19.80 as well. Chris Turner Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Bank Of England Will Probably Be Unable To Avoid A Significant Easing Of Policy

Bank Of England Is Facing A Difficult Decision |UK Government Energy Price Guarantee Will Change From Next April

ING Economics ING Economics 18.10.2022 13:12
The UK government has announced it will make its energy price cap less generous from April next year. That could add 3pp to inflation for much of 2023, and depending on how the changes are made, could deepen the recession we're forecasting this winter. We now expect a 'smaller' 75bp rate hike from the Bank of England in November In this article The UK Chancellor has reversed much of the ill-fated growth plan Fiscal U-turns give Bank of England a route to less aggressive tightening The UK Chancellor has reversed much of the ill-fated growth plan UK bond markets reacted well to new Chancellor Jeremy Hunt’s announcement that large parts of the so-called "mini" Budget will be reversed. That said, there is undoubtedly further work to be done. For debt to fall as a share of GDP, the government needs to find £72bn a year by 2026/27, according to leaked reports from the Office for Budget Responsibility over the weekend. Recent U-turns have roughly halved that shortfall. That inevitably leaves more to be announced by the time of the 31 October Medium-Term Fiscal Plan. We expect a revenue cap on renewable energy generators, and cuts to public sector investment, to do some of the leg work (we wrote more on the different options yesterday). The Chancellor will also hope the fall in Gilt yields will enable the OBR to lower its estimate of future debt-servicing costs. But by far the most consequential announcement for the UK economy on Monday was that the government’s energy price guarantee will change from next April. At present, this guarantee has fixed consumer gas/electric unit prices such that the average household’s annual bill is capped at £2500 for the next two years. The Chancellor has signalled that will no longer be the case from April, and instead will become more targeted. The government is getting a helping hand from a plunge in gas prices   Source: Macrobond, ING   The fact that the energy guarantee currently applies equally to all households does suggest some room to make the policy more targeted, though in practice that’s complicated. Any policy needs to recognise a) that energy usage doesn’t vary hugely across the income spectrum, but b) it does vary considerably within different income brackets (owing to varying household sizes). At present, the government only really has two ways to means-test its energy price cap. The most obvious option is to offer all households the same energy price but to temporarily raise higher rates of income tax to make the system fairer. That would probably be the most accurate and therefore cost-effective option, but would most likely be politically untenable. The alternative would simply differentiate between those on Universal Credit (welfare benefits) - around 15-20% of energy-using households - and those that aren’t. This is effectively what former Chancellor Rishi Sunak did before the summer. Barring the Treasury finding a more innovative solution, this option could conceivably see most households move back onto the price set quarterly by the regulator Ofgem from April 2023. Using current gas/electricity futures prices, we estimate that the average household electricity bill would total £3700 in fiscal year 2023, peaking at £4250 on an annualised basis between April and June next year. The cost of the energy price guarantee has more than halved   Source: Refinitiv, ING estimates Cost calculation takes the difference between the £2500 cap and our projected estimates of where household bills would be without government support. This is then multiplied by the number of households using electricity/gas (for simplicity we're using the price paid by those on duel-fuel direct debit payment)   This could save the Treasury roughly £25bn in FY2023 and a further £6bn in FY2024, if we make the simple assumption that those on Universal Credit continue to have their bills fixed for the full two years. If that doesn’t sound like that much, it’s because gas prices have fallen considerably in recent weeks. By our estimates, the cost of the household energy cap has more than halved since its inception. Of course, this sort of policy would inevitably come at a cost to both growth and inflation. The chart below shows that inflation would be roughly 3 percentage points higher through much of 2023 if energy prices revert to those set by the regulator Ofgem. Households across the income spectrum would in most cases be spending close to, or in excess of, 10% of their disposable incomes on energy bills in FY2023. That would be 15%+ if energy prices were to return to their August high – and it’s worth saying that our Commodities team forecasts gas prices to end up higher next winter than during the coming one. Inflation could be 3pp higher through much of 2023 if most households revert back to the Ofgem price Source: Macrobond, ING   That kind of hit to disposable incomes would inevitably deepen what would otherwise hopefully be a reasonably mild recession this winter. The Chancellor will be hoping that energy prices continue to fall, lessening the blow to households. Indeed for now his focus is on reducing the OBR’s borrowing estimates as much as possible in its forecast due on 31 October. He’ll also be hoping a scaled-back support package will reduce the need for the Bank of England to tighten aggressively. But in practice – and especially if gas prices start rising again – we think the Treasury may well need to offer extra support in one form or another before April next year. Households could spend around 10% of disposable income on energy without the government guarantee Source: ING analysis of ONS Living Costs and Food Survey, Effects of Tax and Benefits, Ofgem, UK Treasury For simplicity we've used most recent 2020/21 equivalised disposable income data (in practice this will have increased but doesn't materially change the end result). Assumes all households move back to the Ofgem price cap system and that energy prices increase by same percentage for all income deciles. Disposable income = after income tax/national insurance etc but before accounting for housing and other costs Fiscal U-turns give Bank of England a route to less aggressive tightening For the time being though, the moves by the Chancellor will reduce the need for the Bank of England to act as aggressively. Having pencilled in a 100 basis-point rate hike in November, we now think that’s more likely to be 75bp. Markets are still expecting Bank Rate to peak at 5.2% next summer, albeit this pricing has been pared back since the fiscal U-turns. This leaves the Bank with a difficult decision: meet those expectations, and bake in what are now very uncomfortable mortgage and corporate borrowing rates. Undershoot investor expectations, and the pound could fall materially. But in practice a weaker pound – and the extra imported inflation that might bring – is probably more desirable than the current strains that are starting to emerge as a result of ultra-high borrowing costs. The challenge for policymakers will be to gradually talk down market rate expectations without causing abrupt pressure on the currency. Ultimately, we think a 75bp hike in November will be followed by another 50-75bp hike in December. We think Bank Rate will peak somewhere between 3.5-4%.   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Beyonce Bounce and Soaring UK Inflation: A Challenge for Bank of England

Bank Of England May Hike The Rate By 75bp As The Energy Price Cap Can Lead To Higher Inflation And Longer Recession

ING Economics ING Economics 19.10.2022 10:12
There is growing speculation that the UK government will need to cut budget spending further after the fiscal U-turn. We already estimate that the change in the energy price guarantee will cause higher inflation, a deeper recession and may cause the BoE to hike by 75bp rather than 100bp. GBP downside risks persist. Elsewhere, US housing data will be in focus USD: Housing data becoming more relevant The rally in global equities yesterday pushed some high-beta currencies higher: in G10, the New Zealand dollar and Swedish krona had a good day. However, currency-specific stories overshadowed the risk-on environment. GBP fell as markets slowly digest the fiscal U-turn, Norway's krone and Canada's dollar suffered from their elevated exposure to oil prices, where the post-OPEC cuts rally seems to have run out of steam and sub-$90 levels are being explored again. The trade-weighted dollar remains close to its highs, likely being shielded from the equity rally thanks to market expectations of a 75bp Federal Reserve rate hike in November, and a terminal rate priced at 4.90-4.95%. As long as the Fed retains its hawkish stance (we suspect well into 2023), dollar corrections should continue to prove short-lived. Today’s US calendar includes housing starts and building permits data, which will provide hints of how much strain is being put on the housing market from sharply rising mortgage rates. As discussed earlier this week, it appears that most developed central bankers are accepting a contraction in house prices as a necessary evil in the process of fighting inflation. Given the elevated weighting of shelter in the US inflation basket, a (controlled) downturn in house prices would likely mean a faster slowdown in inflation in 2023, and this is good news for the Fed. It’s probably too early anyway to see a material impact on Fed rate expectations from the housing data. The Fed will publish the Beige Book today, and there are a few speakers to keep an eye on: Neel Kashkari, Charles Evans and the arch-hawk James Bullard. We expect a consolidation in the dollar around current levels, and retain a bullish view on the greenback into year-end. Francesco Pesole EUR: Domestic picture remains grim EUR/USD has been stabilising in the 0.98-0.99 area after the rally from 0.9700, likely reflecting some positioning adjustments more than any change in the key drivers. Dollar strength remains the main hindrance to recovery in the pair, but the domestic picture is still far from looking appealing to investors. Despite a smaller-than-expected slump in the ZEW expectations index, the current situation survey plunged dramatically to -72.2 in October. These are levels last seen only in 2020 and 2009. The easing in gas prices is likely preventing a return to the 0.9540 lows, but we think the next round of dollar appreciation will heavily test that support. Today, the eurozone calendar includes the final CPI reading for September, as well as speeches by the ECB’s Francois Villeroy, Mario Centeno and Ignazio Visco. Francesco Pesole GBP: Austerity times? In a matter of days, the UK government has shifted from a large and unfunded expansionary fiscal policy to measures clearly in the direction of fiscal rigour. Chancellor Jeremy Hunt’s policy U-turn earlier this week has paved the way for a radically different policy agenda, and many are now speculating on widespread budget cuts after government offices suggested further savings worth 15% of the budget may need to be found by the government. A key Conservative policy, the hike in state pensions in line with inflation, may be scrapped in what could be the start of a new period of austerity. Just looking at what the government has already changed from the "mini" Budget, the implications for markets are very significant. Our UK economist argues that the U-turn in energy bills cap can add 3pp to inflation next year and should increase the size/length of the recession. We think the Bank of England will need to take this into account and will hike by 75bp rather than the 100bp expected by investors at the November meeting. To be sure, inflation hitting double-digits today (10.1%), with the core rate at 6.5%, makes any dovish surprise a harder sell. Today, Prime Minister Liz Truss will face questions by MPs. There is growing speculation that she will be forced to leave soon due to the loss of credibility and opinion polls currently suggesting the main opposition party (Labour) holding a 35-point lead. GBP/USD has found some tentative stability around 1.13-1.14 as 10-year Gilt yields edged back below 4.0% for the first time in nearly a month. Our rates team remains doubtful that sub-4% levels are sustainable and continues to see elevated risks of Gilt market fragility. A key question is whether the Bank of England will go ahead with planned Gilt sales from the start of November. Yesterday, a media report suggesting another delay in quantitative tightening was dismissed as “inaccurate” by the BoE. We still struggle to see a return to 1.15+ levels in cable, as a combination of political instability, risks of a deeper recession and smaller rate hikes by the BoE along the path of fiscal rigour – along with a strong dollar - may more than offset the benefits of quieter debt-related concerns. It’s too early to dismiss a return to sub-1.10 levels. Francesco Pesole CAD: Inflation to stir rate expectations The Canadian dollar suffered from a contraction in oil prices yesterday, as global demand fears appear to be overshadowing the tighter supply picture following the OPEC+ output cuts. Our commodities team still expects Brent to close the year in the $95-100/bbl range on the back of tighter supply, but downside risks are clearly mounting with global recession fears. We still want to highlight how the Canadian dollar is in a good position to benefit from any recovery in risk sentiment (although that may only materialise from 1Q23 onwards), thanks to Canada’s limited exposure to the two major poles of geopolitical and economic risk: Russia and China. But growing uncertainty about global demand dynamics may further postpone any strong rebound in the loonie. The Bank of Canada will announce policy next week, and we expect a moderation in the tightening pace to 50bp as the economy starts to show signs of slowing and inflation recently came in below expectations. Today, September CPI numbers will be published, and the consensus is centred around a slowdown in headline inflation from 7.0% to 6.7%. With markets currently pricing in 60bp ahead of next week’s meeting, any upside or downside surprise can definitely direct rate expectations towards 50bp or 75bp, and generate CAD volatility in both directions. In our view, the balance of risks appears slightly skewed to the upside for CAD today, but there is still room for USD/CAD appreciation (1.38-1.40) into year-end. Francesco Pesole Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The UK Economy Looks Worse Than The Rest Of The G7 Countries

UK Inflation Rate: The UK CPI Came At 10.1%, Input PPI Hit 20%, Almost A Percent Less Than In August

ING Economics ING Economics 19.10.2022 12:57
The portion of the UK inflation data showed that the problem is in no hurry to recede. The consumer price index returned to 10.1% y/y, changing hopes that the trend had already reversed. The retail price index is climbing further upwards, reaching 12.6%. The contribution of food to inflation has already exceeded the impact of transport costs. Excluding these volatile components, the acceleration continues, with the core CPI rising to 6.5% compared to 6.3% the previous month. Britain's retail price index at 12.6% y/y was last seen in March 1981. However, producer prices signal an easing of inflationary pressures, albeit not as quickly as previously hoped. Input PPI has slowed to 20% from 20.9% a month earlier and peaked at 24.2% in June. Output PPI inflation slowed to 15.9% after peaking at 17% in July. The persistent downward trend in exchange prices for agricultural and energy products has reinforced disinflationary trends all these months. The higher inflation trajectory is creating pressure on the Bank of England to take even more steps to raise rates. The Bank of England's recent statements about its willingness to move to quantitative tightening from November and its reluctance to stretch out its emergency government bond-buying programme show that the central bank is indeed concerned about inflationary pressures.
The EUR/USD Pair Is Showing A Potential For Bearish Drop

Eurozone Inflation Hits 9.9%, It's The Highest Level In More Than 25 Years!

Conotoxia Comments Conotoxia Comments 19.10.2022 15:26
While consumer inflation seems to be slowing down in the United States, looking at the CPI measure, the opposite is true in the Eurozone or the United Kingdom. Price growth continues to accelerate, according to data released today. What is the inflation rate in Europe? The annual inflation rate in the eurozone rose to 9.9 percent in September 2022, up from 9.1 percent a month earlier. This is the highest inflation rate since measurements began in 1991. Inflation has thus moved further away from the European Central Bank's 2 percent target, which may cause policymakers to continue tightening monetary policy despite the risk of recession. The main upward pressure for eurozone prices came from the energy sector (40.7 percent versus 38.6 percent in August), followed by food (11.8 percent versus 10.6 percent), services (4.3 percent versus 3.8 percent) and non-energy industrial goods (5.5 percent versus 5.1 percent). Annual core inflation, which excludes volatile energy, food, alcohol and tobacco prices, rose to 4.8 percent in September. On a monthly basis, consumer prices rose 1.2 percent, Eurostat reported. Source: Conotoxia MT5, EUR/USD, H4 Prices in the UK are also rising The UK's annual inflation rate rose to 10.1 percent in September 2022 from 9.9 percent in August, returning to the 40-year high reached in July and beating market expectations of 10 percent, trading economics reported. The biggest contributor to the increase was food, which became more expensive by 14.8 percent. Costs also rose sharply for housing and utilities, as they rose by as much as 20.2 percent, mainly, due to soaring electricity or gas prices. In contrast, core inflation on an annualized basis, which excludes energy, food, alcohol and tobacco, rose to a record 6.5 percent, compared to expectations of 6.4 percent, according to data from the Office for National Statistics. Source: Conotoxia MT5, GBP/USD, H4 High inflation in Europe - central banks with no way out? High inflation may not give much room for further action by central banks in the context of executing the so-called pivot, i.e. a turnaround in the current monetary policy, which consists mainly of interest rate hikes. Further price increases could seal further interest rate hikes in the Eurozone or the UK, which in turn could affect household budgets, but also company valuations. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
Bank of England survey highlights easing price pressures

There Is Nothing Stopping The Bank Of England From Hitting The Rate Sharply

InstaForex Analysis InstaForex Analysis 20.10.2022 11:34
Deputies quarrel, ministers are leaving, Truss' chair is shaking, inflation is rising. The pound has started a black streak again, although the presence of a white one can be questioned. The burden of problems hangs over the British currency and it does not get better, on the contrary, there are new reasons to think about the potential achievement of parity for the GBP/USD pair. The dollar gaining strength, the equally rapidly growing inflation in the UK, which the Bank of England continues to ignore, the specter of a recession. All this is happening during a possible change of power in Britain. The new prime minister has not had time to settle in the chair, as MPs want to send her after Boris Johnson. The government's twists and turns are not at the right time, but apparently there is no other way out. Inflation The pound fell for a moment after the release of inflation data. The new indicator turned out to be disappointing, the price index in the UK continued to accelerate, reflecting, among other things, the passivity of the local central bank. In September, inflation moved to double digits, increasing from 9.9% to 10.1% against the consensus of economists of 10%. More importantly, the core inflation rate rose just as quickly, amounting to 6.5% compared to 6.3% in the previous month. The highest figure in four decades, but succeeding figures are expected to be higher. "The overall inflation rate will rise to almost 11% in October, primarily due to a 27% increase in energy prices. But in the first quarter, the overall figure should decrease to 9%, since the peak of growth in food and motor fuel prices has probably been reached," Pantheon Macroeconomics economists comment. High inflation could be made an argument for strengthening the pound due to the aggressive rhetoric of the BoE, which, in theory, should have followed after another record price increase. Now nothing is keeping the central bank from raising the rate sharply at the November meeting, which was raised to 2.25% in September and is expected to rise to about 4% by the first months of the new year. In practice, things may be different. However, some economists say this may now be less likely after recent scenes in the government. Most of the September budget plan was canceled this week in favor of a return to "austerity." This leaves the economy on the path to a barely mitigated recession, which, according to the August monetary policy report, could last for about a quarter. Everything is too complicated, and the authors of this confusion are British politicians. Downing Street The inflationary picture in the UK has been erased by reports of new layoffs in the ranks of high-ranking political officials. Following the sudden departure of former Chancellor Kwasi Kwarteng, who was forced to resign on October 14, Interior Minister Sewelluella Braverman left her post. The pound tried to grow amid large-scale losses on Wednesday. This movement, apparently, was a reaction to the departure of another high-ranking member of the government, followed by a decline in the yield of UK government bonds, which did not correspond to the internal inflationary picture. Braverman was replaced by Grant Shapps, whom the prime minister had previously pushed to the back of the government. Who's next? What other reshuffles are waiting for Britain and will this save the country from collapse? Anyway, the pound likes what is happening with the change of the main characters. The drop in yields on Wednesday did not correspond to the global background against which US bond yields were pushing other countries higher. Dollar Government reshuffles have a short-term impact on the pound. The reality is that the British currency lags behind not only the strong dollar, but also the weak euro. The pound continued its downward trend, despite extremely high inflation and the rates of the financial markets on the increase in US bond yields after even more hawkish comments from the Federal Reserve representatives. The pound's illogical reaction to the consumer price index data highlights that the currency is "trading in a structural, not cyclical way. In a cyclical world, higher inflation will be accompanied by higher yields and a stronger currency," HSBC noted. When markets are most concerned about structural risks, "higher inflation and higher yields are seen as symptoms of a broader problem," the economists explain. The pound is likely to continue trading structurally until the country's authorities make more efforts to contain the domestic budget deficit or until inflation reaches a peak. In this case, stabilization of the bond market and the pound is possible. In the meantime, the downward trend is the main one. Sterling is waiting for a difficult few months, during which the GBP/USD exchange rate risks falling to 1.0800 and below. The dollar rally, fueled by even more aggressive Fed rhetoric, will put more pressure on the lifeless pound. Traders are revisiting US interest rate hikes closer to 5%. In November, the rate can be raised immediately by 100 bps. The dollar rally in the middle of the week followed statements from Minneapolis Fed chief Neel Kashkari. The official signaled that he had "very little confidence in what inflation will be in six months" and argued that the central bank should keep raising rates until there was "convincing evidence" that the inflationary peak had passed. As for rates, September forecasts suggested an upper limit of 4.5% by the end of the year. Concerns were also raised about a rise to 4.75% early next year. Core inflation rose from 6.3% to 6.6% y/y in September, while the official or headline inflation rate remained stubbornly elevated at 8.2%. After the reversal of the dollar index, expectations about reaching new highs again became more active. The current range is 112.00-114.00. These notes will remain relevant until the next FOMC meeting. If bulls manage to break above 114.00, gains will accelerate to a 2022 peak at 114.80.   Relevance up to 09:00 2022-10-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/324821
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

Chinese Yuan And Japanese Yen (JPY) In Trouble, Gold Price Broke A Record

Marc Chandler Marc Chandler 20.10.2022 15:50
October 20, 2022  $USD, Australia, Canada, Currency Movement, Current Account, Japan, Turkey, UK, US Overview: China and Japan continue to struggle to stabilize their currencies, while global interest rates rise. The offshore yuan has fallen to new lows but in late dealings the onshore and offshore yuan have recovered. The dollar also traded above JPY150 for the first time since 1990 and the market knows it is on thin ice as with the threat of official intervention. A risk-off mood permeates. Equity markets have retreated in the Asia Pacific region and Europe. US futures are also trading lower. Benchmark 10-yields are 1-3 bp higher in Europe, and 10-year US Treasury yields reached a new high around 4.17% before steadying. The greenback is mixed. Among the G10 currencies, the Australian and Canadian dollars are firmer, while sterling, the Swiss franc, and Swedish krona are nursing small losses. Emerging market currencies are also mixed. Central Europe is outperforming East Asia. Gold recorded a new low for the month near $1622.50 before catching a bid. Initial resistance is seen near $1640. December WTI extended yesterday’s recovery and reached a new four-day high near $86.30. The nearby cap is seen in front of $88.00. Natural gas is snapping a four-day drop in both the US and Europe’s benchmark. Iron ore tumbled 2.4% to new lows below $90. However, copper is jumping back 1.4% in what could be its first gain in five sessions. December wheat, which has lost 2.3% over the past two sessions is recouping a little more than 1% today.  Asia Pacific The dollar rose above JPY150 for the first time since 1990 and there has been no sign of intervention. Ironically, the weaker yen is one of the factors pushing up Japanese yields, which in turn spurs BOJ purchases, which in turn underscore the monetary divergence that weighs on the yen. In regularly scheduled and unannounced purchases, the BOJ bought about JPY1.3 trillion today (~$8.5 bln). The yen's weakness aggravates the terms-of-trade shock in the first instance. Japan reported a slight narrowing of the September trade deficit to JPY2.09 trillion from JPY2.8 trillion. Export growth accelerated to 29% year-over-year from 22%, while import growth slowed to 45.9% from 49.9%. Tomorrow, Japan reports September CPI. The core rate, which excludes fresh food, is seen rising to 3%, while the measure that excludes both fresh food and energy may tick up to 1.8% from 1.6%. The BOJ meets next week. Its forecasts may change, but policy is a different story. Employment in Australia ground to a near halt in September, gaining less than 1000 jobs. This may overstate the case, a little. The loss of part-time positions more than offset the 13.3k increase in full-time posts. Still, the loss of momentum is clear. The three-month moving average of full-time posts is slightly negative the lowest this year. The other metric held in better. The participation rate was unchanged at 66.6%, and the unemployment was steady at 3.5%. The Reserve Bank of Australia meets on November 1 and is expected to hike the target rate 25 bp to 2.85%. The dollar poked above JPY150 in early European turnover and quickly fell back to about JPY149.70. It just as abruptly snapped back to the JPY149.90 area. The market knows it is tempting official action and is skittish. Indeed, the entire session range was set in a little more than 30 minutes. Without international cooperation, we see BOJ intervention most likely confined to Tokyo hours and that the second operation will not yield the same results as the first. Late September's record intervention immediately knocked the dollar back about 5.5 yen. Follow-through selling initially saw the Australian dollar fall to a three-day low near $0.6230 before bouncing back to new session highs in the European morning near $0.6280. The intraday momentum indicators are getting stretched, suggesting a run to yesterday's highs around $0.6325 may be too much. The dollar traded to CNY7.2480 today, its highest level since late September. It pulled back a little away from the CNY7.25 level and is trading near CNY7.2360 in late turnover. The prime lending rates were left unchanged today. Even without the latest weakness of the yuan, a cut was not expected. The PBOC lifted the dollar's reference rate to CNY7.1188. That puts the upper end of the 2% band a little above CNY7.26. The greenback reached CNH7.2790 against the offshore yuan, a new high. It has pulled back to below the CNH7.2550 area. Europe Out of the frying pan, into the fire. So goes the UK Prime Minister whose honeymoon may be measured in hours. Her tenure is still be debated. It is not about economic policy so much anymore, as Truss has accepted the reversal of her fiscal experiment. She did not win the leadership challenge among the Tory parliamentary members, but their job was to narrow the field to two candidate and let the rank-and-file decide. And chose they did. Now, a new effort by the MPs to force her out short of an election, which polls say the Conservatives are sure to lose. Meanwhile, Home Secretary Braverman was forced to resign after violating cabinet confidentiality. Braverman was a candidate herself party leader but was knocked out early. Her resignation letter was also a biting criticism of Truss. Ironically less than 24 hours earlier, in a rhetorical flourish, Braverman called the Labour Party and the Lib Dems, a "coalition of chaos, it's the Guardian-reading, tofu-eating wokerati."  Truss tried tightening the screws on a vote on fracking, Tory MPS were threatened with expulsion from the party if they voted against the beleaguered government and controversial issue even in some strong Tory districts. The Chief whip, the parliamentary enforcer resigned as did her deputy. And then in a dramatic reversal, it appears Truss persuaded them to retract their resignations to end a dramatic day. The eurozone reported a 26.3 bln euro August current account deficit. Like, Japan, the eurozone has experienced a significant terms-of-trade shock and a marked deterioration of its external balance. Consider that last August, the EMU recorded a 17.1 bln surplus, or that this year it has recorded an average monthly deficit of 9.2 bln euros compared with an average surplus of 28.3 bln euros in the first eight months of last year. The euro initially extended yesterday's losses to about $0.9755 before recovering to almost $0.9800, where options for nearly 2 bln euros expire today. We suspect that they have largely been neutralized, but today's high is about $0.9795. The intraday momentum indicators suggest there may be a little more upside potential, but the $0.9820 area looks like the best that can be hoped for today, barring new developments. Sterling has sulked to almost $1.1170 in the European morning. On the downside, there are options for GBP480 mln at $1.1145 that roll off today. If Truss does step down, we suspect sterling can bounce initially. While we suspect a major low is in place, a move above $1.15 would add credence to this view. More immediately, the $1.1250 area looks to offer the initial cap. Lastly, Turkey's experiment is set to continue. Despite CPI above 84%, the central bank is expected to cut its one-week repo rate by 100 bp (to 11%) for the third consecutive move. The lira is off about 28.5% this year, of which about 5% has been recorded in the past three months. America The Beige Book was unexpectedly dour. However, it did not deter the surge in US interest rates. The anecdotal report prepared for the November 1-2 FOMC meeting gave an overall sense of slowing activity and easing of some price pressures. Businesses were worried about demand. Several districts reported easing of labor market conditions. In broad strokes, here is a scenario, which seems to be gaining credence:  Q3 growth is a bit of catch-up the first half and most of the payback will be from trade. The US economy may nearly stagnate or worse over the next few quarters. Monetary and fiscal brakes are being slammed. Inflation is high but the year-over-year comparison has too long of a memory, as it were. US headline CPI rose at an annualized rate of around 10% in Q1 and Q2. It slowed to 2.0% in Q3. The Fed, as Bullard suggests, may front load more hikes this year and ratify market expectations (that he helped shape), meaning 75 bp moves in November and December. Frontloading takes on new meaning if one is in a hurry to get inflation down, so it is in a better position to act if when the economy warrants. The implied yield of the December 2023 Fed funds futures is about 17 bp below the implied yield of the September 2023 contract.  September housing starts reported yesterday were weaker than expected, slowing after jumping almost 14% in August. Existing home sales are on tap for today and they are expected to have continued to fall. January was the last month-over-month increase. Mortgage demand has cratered as one would expect. Also, the drying up of the refinance market also cuts into a source of income (consumption?) as previously, owners were often tempted to take out equity. Also, weekly initial jobless claims are rising again but the levels are modest. Still, looking ahead, it seems reasonable to assume the labor market conditions are likely to weaken. The October Philadelphia Fed survey may confirm the weak sentiment seen in the Empire State survey last week. The price sub-indices draw attention given the market's sensitivity to inflation. Four Fed officials have scheduled appearances, but only Hacker (around midday ET) may address the economic issues. Canada's CPI was stronger than expected and this sparked a new appreciation for the risks that the Bank of Canada delivers another three-quarter point hike next week. The headline rose slightly, and the market had expected a small decline. The year-over-year rate eased to 6.9% from 7.0%., not quite as much as expected. That said, the pace of inflation stopped cold in Q3. Consider, and CPI rose at an annualized pace of more than 13% in Q1 and almost 12% in Q2. Q3? Minus 0.4%. The average of the core rates was little changed because of the upward revision to the August series. In the swaps market the odds of a 75 bp move surged from almost 25% to 85%. That failed to give the Canadian dollar traction as the risk-off (proxy S&P 500) was the flavor of the day. For the third session, the US dollar has found offers above CAD1.38 that caps the greenback. A close below CAD1.3720, where the 20-day moving average is found, would be a cautionary note for the greenback. This moving average has not been violated on a closing basis for over a month. Without new US dollar strength, the 5-day moving average can fall below the 20-day moving average early next week. It would be the first time in two months. The greenback firmed to a marginal new high for the month yesterday against the Mexican peso near MXN20.1760. With a few exceptions, the MXN20.20 area has capped the dollar since mid-August. For those needing to buy peso, this area may be attractive. Initial support today is seen near MXN20.05-MXN20.10.    Disclaimer
"Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24"

Yesterday Liz Truss resigned, today UK retail sales print was released

Alex Kuptsikevich Alex Kuptsikevich 21.10.2022 15:03
As if the political storm hitting the UK was not enough, macroeconomic data is also not encouraging markets, adding pressure to the country's assets. GBPUSD is losing more than 1.4% since the start of the day on Friday, back below 1.1060, losing 2.4% from Thursday's peak on news of Liz Truss stepping down as prime minister. Great Britain retail sales for September were down 1.4%, and down 1.5% excluding fuel, after falling 1.7% a month earlier. Sales were down 10% from their April 2021 peak and 10.7% ex-fuel, having lost for almost the whole of the last year and a half. Falling consumer activity makes it harder for the Bank of England to find a balance sheet. Today's disappointing sales data is a strong case for the monetary dove camp. The weakness in the economy, as seen through the prism of falling sales and industrial production, can deter the Bank of England from raising its key rate more decisively, which is harmful to the Pound. Should GBPUSD fall below 1.09 in the coming days, a retest of the 1.03-1.05 historic low area will be an issue, even though recently it seemed that the worst for the Pound is over.
British Prime Minister Rishi Sunak Sees No Chance Of Reducing Inflation, Despite Promises To Halve It

Craig Erlam And Jonny Hart Discuss The Resignation Of Liz Truss (UK PM), FX Intervention And More

Craig Erlam Craig Erlam 23.10.2022 09:29
OANDA Senior Market Analyst Craig Erlam reviews the latest market news with Jonny Hart. They discuss the UK PM resignation and what will come next, FX intervention, Snap earnings, and the week ahead. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The release of Chinese GDP, Bank of Canada interest rate decision and more - InstaForex talks the following week (part I)

Broad China Selloff Drags Down Alibaba, European Gas Prices Down, Goldman Sachs Aim To Increase Investment In China, Race For Next U.K PM

Rebecca Duthie Rebecca Duthie 24.10.2022 13:40
Summary: Alibaba stock tanks on Monday. Warmer weather prospects driving NGAS down. Goldman Sachs has established a new joint venture in China. Rishi Sunak on track to become the next U.K Prime Minister. Markets reacted to President Xi Jinping’s re-election As markets reacted to President Xi Jinping consolidating power following his historic confirmation to a third term as head of the second-largest economy in the world, shares of Chinese corporations were falling on Monday. Alibaba (ticker: BABA) lost 12% in premarket trade in the United States. Investors are spooked by President Xi Jinping's increasing control over China's ruling party as he begins a record-setting third term with no apparent successor. In addition, the 14th edition of the 11.11 Global Shopping Festival ("11.11" or "Festival"), which will feature more than 290,000 brands, was formally launched today by Alibaba Group Holding Limited. ⚠️BREAKING:*ALIBABA STOCK PLUNGES 11% IN HONG KONG AMID BROAD CHINA SELLOFF$BABA 🇨🇳🇭🇰 pic.twitter.com/qd0XErYE4B — Investing.com (@Investingcom) October 24, 2022 European gas prices fall as supply prospects improve Following predictions of warmer-than-usual weather for the majority of the continent over the coming week, European natural gas futures fell once again during the opening hours of trading on Monday. Weather predictions that continental Europe will see temperatures this week that are between 4 and 8 degrees Celsius warmer than the seasonal norm, predicting reduced demand and enabling importers to continue injecting excess gas into storage, served as the primary impetus for the decision. ​​In order to relieve the pressure brought on by Russia's effective supply suspension, Europe has been able to fill its storage facilities ahead of schedule thanks to a mild start to the winter heating season and aggressive buying of liquefied natural gas on spot markets. EU storage facilities were 93.4% full as of Sunday, with the two largest markets on the continent, Germany and Italy, posting even higher levels. ⚠️BREAKING:*EUROPEAN GAS PRICES TUMBLE TO LOWEST SINCE JULY ON EASING SUPPLY FEARS 🇪🇺🇪🇺 pic.twitter.com/nGg49xSG1T — Investing.com (@Investingcom) October 24, 2022 Goldman Sachs’ new joint venture In an effort to increase investment in Chinese logistics and infrastructure real estate assets, Goldman Sachs has established a joint venture in China with local logistics firm Sunjade, the U.S. bank announced on Monday. According to a company release, the bank is creating the new subsidiary through its investment arm Goldman Sachs Asset Management, which has made more than $50 billion in real estate-related investments worldwide. The stock structure or the amount of money committed to the platform were not disclosed. The joint venture has invested in a 240,000 square meter project with four institutional-grade warehouse assets in Shanghai and the surrounding region. The joint venture focuses on projects in China's first-tier cities and neighboring areas. The new platform, according to the U.S. bank, will profit from China's growing demand for brand-new, high-quality infrastructure assets, particularly institutional-quality storage space driven by e-commerce and the diversification of industrial requirements supported by government policies. Goldman Sachs launches Chinese infrastructure real estate joint venture https://t.co/HdGJm9ExlH pic.twitter.com/mmj53hkACz — Reuters Business (@ReutersBiz) October 24, 2022 Rishi Sunak on track to be next U.K PM After Boris Johnson withdrew from the race on Sunday night and the markets breathed a sigh of relief, Rishi Sunak, a former chancellor, was on track to become the new prime minister of Britain on Monday. After the likelihood of further imminent political and economic unrest decreased, the value of the pound increased on Monday. Johnson, who was having trouble gaining support, acknowledged that due to divisions among Tory MPs, even if he had won, he could not have governed "effectively." If Penny Mordaunt, the leader of the Commons and his sole remaining competitor, is unable to secure the necessary 100 nominations from Tory MPs, Sunak will take over as the party's leader at 2 p.m. on Monday. Rishi Sunak’s priority should be to restore stability and the UK’s reputation https://t.co/WLKJCGg49X — Financial Times (@FT) October 24, 2022 Sources: finance.yahoo.com, ft.com, twitter.com
Forex: British pound against US dollar - technical analysis - January 2nd

New UK PM, Rushi Sunak, is going to face a lot of headwinds. Bank of England may hike the rate by 75bp or even a 100bp rate hike, Kenny Fisher says

Kenny Fisher Kenny Fisher 24.10.2022 18:27
The pound pushed higher at the start earlier today but has given up all of these gains. GBP/USD is trading at 1.1293, down 0.03%.   Sunak takes over as PM Rushi Sunak has become the new UK Prime Minister after Penny Mordaunt dropped out of the Conservative leadership race. Liz Tross beat Sunak for the leadership last month but her short tenure as Prime Minister was an unmitigated political disaster. Elizabeth Truss’s record of a mere 44 days in office caused financial damage as well, as her financial plan with unfunded tax cuts roiled the markets, with the pound taking a beating and the Bank of England intervening in an emergency move to stabilize the bond market. Sunak, a former finance minister, will have his work cut out. The Conservative party remains deeply divided and will have to coalesce quickly or face a general election that it would likely lose. Sunak inherits a weak economy, high inflation and uncertainty over the UK’s direction in the post-Brexit era. Last week ended on a sour note, as retail sales for September declined by 6.9% YoY, down from -5.6% in August and below the consensus of -5.6%. Core retail sales also dropped sharply to -6.2%, down from -5.3% and well below the consensus of -4.1%. The Bank of England can hopefully concentrate on more routine matters, such as its policy meeting on November 3rd. Inflation has climbed back into double digits and the Bank will have to deliver an oversize interest rate in order to curb inflation. This will slow the economy which may already be in recession. A 0.75% hike is most likely, although a full-point increase is a slight possibility.   GBP/USD Technical 1.1388 and 1.1471 are the next resistance lines 1.1266 is a weak support level. This is followed by 1.1093     This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Pound drifting, Sunak takes over as PM - MarketPulseMarketPulse
"Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24"

Political Events In UK Have Positive Effect On The British Pound (GBP)

InstaForex Analysis InstaForex Analysis 25.10.2022 12:09
The pound has been evaluating political news in a positive light since the morning. How will the mood of traders of the British currency develop in the near future and is it worth counting on the growth of the exchange rate in the future? Political twists  Today, investors are assessing the news about the appearance of a new British prime minister. Rishi Sunak was elected head of the ruling Conservative Party of Great Britain, and will also take the post of prime minister of the country. England has surpassed itself in political twists and turns. Sunak will be Britain's third prime minister this year. In July, Boris Johnson announced his intention to resign. Liz Truss, who was elected in his place, was able to stay in the prime minister's chair for 44 days and also resigned due to an avalanche of criticism against her. Many see the new prime minister as a source of stability. Perhaps there really is some truth in this, when compared with the chaotic rule of the Truss, during which serious volatility was observed in the markets. Time will tell what kind of ruler Rishi Sunak will be, but for now market players are breathing a sigh of relief and are in a cautiously positive frame of mind. GBP/USD Today, the GBP/USD pair rose to 1.1293 from the previous closing level of 1.1275. As expected, the pound may continue to rise in the short term, but it risks failing during the week. Economic data is ahead, and they are likely to show an even greater divergence from the US economy for the worse.  Britain's economic prospects While the market has welcomed the recent developments surrounding the election of a new prime minister, they alone can do little to improve Britain's economic prospects. The GBP/USD pair may continue to rise, but estimates regarding the extent of the rate hike are already declining. If the 1.1500-1.1700 range becomes a reality in the very near future, this does not mean that the quote will fly further and higher. Such a scenario is more like a decent short entry point. The target range for the end of the year is still 1.0800-1.1200. Britain released a disappointing PMI on Monday. Indices of activity in the manufacturing sector and the service sector collapsed, falling below market expectations. The composite index in October was 47.2, which is two points lower than in September. Its value has become the lowest in the last two years. In addition, the business activity indicator has been below 50 points for three consecutive months. The reason for the sharp decline in the index in October is called political instability in the country, which caused turmoil in the financial markets. The current situation  Anyway, the current situation points to the recession that has formed in the country. A reduction in economic growth may occur as early as the third quarter, and in the fourth negative trends will only intensify. The Fed's hawkish attitude The prospects of the pound, among other things, depend on the positioning of the US dollar and its further strength. Will the decline in the dollar index last until the end of the week? Much will depend on how traders react to the upcoming economic reports in connection with the forecast of the Federal Reserve's policy. The focus is on the GDP report for the third quarter and the employment cost index for the same period. Data on wages and inflation will strengthen the hawkish attitude of the Fed. One of the most significant risks for the pound this week will be the US GDP report. It can show that America is emerging from a technical recession, while the UK is entering an active phase of recession. Divergence in economic prospects will undermine the pound's recovery. A serious obstacle is the core PCE price index's release this Friday, the Fed's preferred inflation indicator. The inflation rate is expected to increase from 4.9% year-on-year to 5.2%. If so, it will be more than enough to guarantee the Fed's hawkish attitude, which has helped the dollar reach new heights against many currencies in the weeks since the bank set course to raise the benchmark interest rate to 4.5% by the end of the year and 4.75% at the beginning of the next. In general, the dollar index is forecast to rise to 114.00 this week.     Relevance up to 10:00 2022-10-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/325237
Forex: What to expect from British pound against US dollar - January 17th

ING expects that Bank of England will hike the interest rate by 50bp

ING Economics ING Economics 28.10.2022 18:12
Markets and most economists are expecting a 75 basis-point rate hike from the Bank of England on 3 November. But we think a 50bp increase is narrowly more likely. More importantly, we think the Bank Rate is unlikely to go above 4% next year. And that suggests that markets are overestimating the amount of tightening still to come   Shift in UK leadership reduces pressure on the Bank of England   Investors have pared back rate hike expectations, but perhaps not far enough It’s been a wild ride for Bank of England (BoE) expectations since September’s fateful ‘mini budget’. The resulting chaos in financial markets had prompted investors to, at one point, price in more than 150bp worth of tightening by the time of the November meeting. BoE chief economist Huw Pill spoke of the need for a ‘significant’ response. Since then, UK markets have calmed, buoyed by the appointment of Rishi Sunak as prime minister and the steadier backdrop for public finances that is perceived to have ushered in. Markets have drastically scaled back expectations for November’s rate hike and are now pricing less than 75bp. Having previously been among those looking for a 75bp hike, we now think 50bp has become narrowly more likely – though either way the committee is likely to be heavily divided. Consensus expects a 75bp move. 50bp ING's BoE rate hike forecast (vs. 75bp priced) The Bank of England is becoming more vocal about excessive hike expectations It’s becoming increasingly clear that the Bank of England is uncomfortable with the amount of tightening markets are pricing. Investors still expect Bank Rate to peak around 5% next year. In a recent speech, BoE deputy governor Ben Broadbent suggested that GDP would take a near-5% hit over coming years if the Bank were to deliver that sort of tightening. The Bank’s August forecasts – which themselves already pointed to a five-quarter recession – were based on a much lower terminal rate of roughly 3%. Citing a simple model, Broadbent suggests recent fiscal announcements warrant ‘only’ an extra 75bp of tightening on top of that. It’s important not to take this too literally, but it’s nevertheless compatible with our long-standing view that Bank Rate is unlikely to go above 4%. Even Catherine Mann, one of the most hawkish committee members, was quoted saying recently that markets are “too aggressively priced”. That frames the messaging we can expect from Thursday’s meeting. The new set of forecasts due, which crucially are based on market interest rate expectations, are likely to be dismal – showing both a deep recession and inflation falling below target in the medium-term. That should be read as a not-so-subtle hint that market pricing is inconsistent with achieving its inflation goal. Markets still expect Bank Rate to peak close to 5% next year Source: Macrobond, ING Sky-high mortgage rates likely to outweigh concerns about a weaker pound The obvious counter-point here is that the Bank’s forecasts have been sending this signal for much of this year – and the Bank hasn’t made much of an effort to otherwise talk down market expectations. Partly that's been because of mounting concerns about a weaker pound, and partly because of growing caution about the accuracy of forecasts as inflation has consistently outpaced expectations. But this calculation is now changing. Not only does it look like inflation is close to peaking, but the risk of overdoing it with rate hikes is growing. Two-year mortgage rates hit 6.5% this month, and despite a fall in swap rates since the abolition of the 'mini budget', we suspect they’ll stay pretty high. Especially for high loan-to-value, lenders will either keep mortgage products off the market or build in more of a premium given the mounting risk of a house price correction. On a similar note, the Bank of England’s financial policy arm has also warned that small and medium-sized businesses are vulnerable given their heavier reliance on floating-rate borrowing. Given the choice of hiking aggressively and baking in – or even pushing up – these borrowing costs, or tightening more cautiously and risking a weaker pound, we suspect most policymakers will lean towards the latter. Inflation is close to a peak, though could stay 2-3pp higher from April 2023 if energy support becomes less generous Source: Macrobond, ING Five reasons for a 50bp rate hike Admittedly none of what we’ve said so far necessarily precludes the central bank from hiking by 75bp on Thursday. Policymakers may feel the bank needs to reassert its authority after a chaotic few weeks. But here are five reasons why we think the committee will lean towards a smaller move: 1   First, the fact that we’re essentially back to square one on the mini-budget also reduces the pressure for a jumbo hike. Admittedly the Bank finds itself in the awkward position of not knowing the full details of PM Sunak’s rewrite of the Medium-term Fiscal Plan. But the most consequential government action for the economic outlook has always been the Energy Price Guarantee, the cap the government has placed on consumer and business energy costs. This had already been announced well before the Bank of England’s September meeting, where the committee resisted pressure to hike by 75bp. Indeed, we have since learned that the government has committed to making its energy support less generous (albeit we don't yet know how this will work). In short, and with the notable exception of the cut in National Insurance, the expected boost from fiscal policy is similar to what was expected before September’s meeting.  2   Second, the economic dataflow doesn't provide a clear enough justification for more aggressive tightening. It's certainly true that the Bank's own surveys continue to point to chronic staff shortages and wage pressures, and this remains a key concern for the BoE. But the most recent inflation data was mostly as expected, while activity data has clearly deteriorated.  3   Third, trade-weighted sterling is actually now stronger than it was at the time of the September meeting. Concerns about depreciation we'd been seeing through the summer will have been a factor in the decision of three committee members to vote for 75bp at the last meeting. The latest market moves should alleviate some of these concerns at the margin. 4   Fourth, the Bank will be acutely aware that hiking by 75bp sets a precedent – it risks becoming viewed as the default move by investors, having only hiked in 50bp increments until now. At a time when the Bank is trying to talk down market rate expectations, that’s not ideal. With economic risks growing, the BoE will want to retain some optionality for future meetings. Policymakers have also shown on more than one occasion now that they don’t feel pressured into a big move by what other central banks are doing. We’d therefore caution against assuming the BoE will hike by 75bp, just because that’s what the Fed and more recently the ECB have opted to do. 5   Finally, the committee is divided. While three members voted for a 75bp hike in September, one rate-setter – Swati Dhingra – voted for just 25bp. We think other committee members will remain reluctant to step up the pace of rate rises this late into its hiking cycle. That potentially heralds another three-way-vote-split on the committee on Thursday. Read this article on THINK TagsBank of England Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Pound Is Now Openly Enjoying A Favorable Moment

Forex market opens tomorrow! British pound to US Dollar - 30/10/22

InstaForex Analysis InstaForex Analysis 30.10.2022 19:14
Analysis of Friday's deals: 30M chart of the GBP/USD pair     The GBP/USD pair tried to continue its downward movement on Friday after settling below the trend line, however, the upward movement resumed in the afternoon, so at the moment it is not at all obvious that the pound will start to fall. We have repeatedly said before that the British currency has a greater chance of growth than the euro. In reality, this is exactly what happens. The euro was flat on Friday, and the pound rose by the end of the day. The pound moved away from its annual lows by 1,300 points, and the euro - by only 550. There were no important events and reports in the UK on Friday, just like last week. Thus, there was practically nothing for traders to react to, except for several reports in the US, which turned out to be as neutral as possible. However, during the day the volatility was about 120 points, which is neither too much nor too little. The pound has accustomed us to high volatility in recent weeks, so 120 points now looks undignified. In general, even considering that the pound and the euro are unlikely to move radically differently, we believe that the British currency is more likely to continue to grow. 5M chart of the GBP/USD pair     You can clearly see on the 5-minute timeframe that there was no pronounced flat on Friday. Quotes, of course, for quite a long time were near the level of 1.1550, but still moved in a more trendy manner. The first sell signal was formed at the beginning of the European trading session, when the price settled below 1.1550. After that, it passed about 30 points down, which allowed beginners to set Stop Loss to breakeven, at which the position was closed. The second buy signal also turned out to be false, and the price could not even go up 20 points. Therefore, there was a small loss here. Since the first two signals turned out to be false, all the subsequent signals around the same level of 1.1550 should not have been worked out. As a result, the day ended with a minimal loss. It's okay. How to trade on Monday: The pound/dollar pair has overcome the ascending trend line on the 30-minute time frame, but has not yet been able to continue moving down. It is possible that the upward trend will continue, and the trend line will again have to be rebuilt. Next week the meetings of the Bank of England and the Federal Reserve will take place, so the pair can "fly" from side to side and show the highest volatility. On the 5-minute TF tomorrow it is recommended to trade at the levels 1.1356, 1.1443, 1.1479, 1.1550, 1.1608, 1.1648, 1.1716, 1.1755, 1.1793, 1.1863- 1.1877. When the price passes after opening a position in the right direction for 20 points, Stop Loss should be set to breakeven. There are no important events scheduled for Monday in the UK, and the calendar of events in the US is also empty. However, a little later in the week there will be very important events that the market can start working out in advance. Basic rules of the trading system: 1) The signal strength is calculated by the time it took to form the signal (bounce or overcome the level). The less time it took, the stronger the signal. 2) If two or more positions were opened near a certain level based on false signals (which did not trigger Take Profit or the nearest target level), then all subsequent signals from this level should be ignored. 3) In a flat, any pair can form a lot of false signals or not form them at all. But in any case, at the first signs of a flat, it is better to stop trading. 4) Trade positions are opened in the time period between the beginning of the European session and until the middle of the US one, when all positions must be closed manually. 5) On the 30-minute TF, using signals from the MACD indicator, you can trade only if there is good volatility and a trend, which is confirmed by a trend line or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 points), then they should be considered as an area of support or resistance. On the chart: Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now. The MACD indicator (14,22,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines). Important speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time. Relevance up to 07:00 2022-10-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325704
The Data May Keep The British Pound (GBP) From Rising

Australian trade balance, Bank's of England interest rate decision and more - Thursday, November 3rd commented by InstaForex

InstaForex Analysis InstaForex Analysis 30.10.2022 20:01
Thursday 03 November A public holiday in Japan. Japanese banks and exchanges will be closed, and trading volumes during the Asian trading session will be reduced. Australia. Trade balance This indicator evaluates the difference in the volume of exports and imports. The excess of exports over imports leads to a trade surplus, which has a positive impact on the national currency quotes. A decrease in the trade balance surplus may have a negative impact on the quotes of the national currency. Conversely, the growth of the trade surplus is a positive factor. Previous values (in billion Australian dollars): 8.324 (August), 8.733 (July), 17.670 (June), 15.016 (May), 13.248 (April), 9.738 (March), 7.437 (February), 11.786 (January). The level of influence on the markets is from low to medium. UK. Composite PMI and Services PMI (final release) The UK Composite PMI (from S&P Global) is an important indicator of the health of the UK economy. If the data turns out to be worse than the forecast and the previous value, then the pound is likely to fall sharply in the short term. Data better than the forecast and the previous value will have a positive impact on the pound. At the same time, a result above 50 is considered positive and strengthens the GBP, below 50 is considered negative for the GBP. Previous values: 49.1, 49.6, 52.1, 53.7, 53.1, 58.2, 60.9, 59.9, 54.2 (in January 2022). The preliminary score was 47.2. The level of influence on the markets (final release) is from low to medium. The PMI in the UK services sector (S&P Global) is an important indicator of the state of the British economy. The service sector employs the majority of the UK's working-age population and contributes approximately 75% of GDP. The most important part of the service industry is still financial services. If the data turns out to be worse than the forecast and the previous value, then the pound is likely to fall sharply in the short term. Data better than the forecast and the previous value will have a positive impact on the pound. At the same time, a result above 50 is considered positive and strengthens the GBP, below 50 is considered negative for the GBP. Previous values: 50.0, 50.9, 52.6, 54.3, 53.4, 58.9, 62.6, 60.5, 54.1 (in January 2022). The preliminary score was 47.5. The level of influence on the markets (final release) is from low to medium. UK. BoE interest rate decision. Minutes of the BoE meeting. The planned volume of asset purchases by the BoE. Monetary Policy Report The level of interest rates is the most important factor in assessing the value of a currency. Most other economic indicators are only looked at by investors to predict how rates will move in the future. It is possible that at this meeting the BoE will again raise the interest rate (up to 2.75% - 3.00%). However, despite the positive macro data coming out of the UK, the interest rate may remain at the same level of 2.25%, which could cause the pound to weaken. The minutes of the Monetary Policy Committee (MPC) of the BoE contain information on the distribution of votes "for" and "against" the increase/decrease in the interest rate. The report of the BoE on monetary policy, which will also be published at the same time, contains an assessment of the economic situation, the outlook for the economy and inflation. The soft tone of the report will help weaken the pound. Conversely, the tough rhetoric of the report regarding inflation, which implies a further increase in the interest rate, will cause the pound to strengthen. The level of influence on the markets is high. USA. Unemployment claims The US Department of Labor will publish a weekly report on the state of the US labor market with data on the number of primary and secondary claims for unemployment benefits. The state of the labor market (together with data on GDP and inflation) is a key indicator for the Fed in determining the parameters of its monetary policy. The result is higher than expected and the growth of the indicator indicates the weakness of the labor market, which negatively affects the US dollar. The drop in the indicator and its low value is a sign of the recovery of the labor market and may have a short-term positive impact on the USD. Initial and re-claims are expected to remain at pre-coronavirus lows, which is also positive for the dollar, indicating the stability of the US labor market. Previous (weekly) figures for initial jobless claims: 217,000, 222,000, 228,000, 237,000, 245,000, 252,000, 248,000, 254,000, 261,000, 244,000, 235,000, 231,000, 232,000, 202,000, 211,000 Previous (weekly) values for repeated claims for unemployment benefits: 1,438,000, 1,473,000, 1,437,000, 1,412,000, 1,434,000, 1,430,000, 1,420,000, 1,368,000, 1,384,000, 1,333,000, 1,372,000, 1,324,000, 1,331,000, 1,309,000, 1,309,000 The level of influence on the markets is medium to high. UK. Speech by BoE Governor Andrew Bailey As head of the central bank, Bailey has more influence on the British pound than any other person in the UK government. Market participants will closely follow the progress of his speech to better understand the prospects for the monetary policy of the BoE. Volatility during a speech by the head of the BoE usually rises sharply in the quotes of the pound and the FTSE London Stock Exchange index if it gives any hints of tightening or easing monetary policy of the BoE. If Bailey does not touch upon the topic of monetary policy, then the market reaction to his speech will be weak. The level of influence on the markets is from low to high. USA. Indices (from S&P Global) business activity (PMI): composite and in the service sector of the economy (final release) The monthly S&P Global report publishes (among other data) a composite PMI index and PMI indices in the manufacturing sector and in the services sector of the US economy, which are an important indicator of the state of these sectors and the US economy as a whole. A result above 50 is considered positive and strengthens the USD, below 50 is considered negative for the US dollar. The data above the value of 50 indicate an acceleration of activity, which has a positive effect on the quotes of the national currency. If the indicator falls below the forecast and, especially, below the value of 50, the dollar may sharply weaken in the short term. Previous values of the PMI indicator: -composite 49.5, 44.6, 47.7, 52.3, 53.6, 56.0; - in the service sector 49.3, 43.7, 47.3, 52.7, 53.4, 55.6. The level of influence on the markets (final release) is medium. It is also lower than the similar report from ISM (American Institute of Supply Management) USA. PMI in the services sector of the economy (from ISM, Institute of Supply Management) The ISM Index is the result of a monthly survey of the largest US companies from 62 segments of the service sector, which accounts for almost 90% of US GDP and about 80% of the country's working citizens. Previous values: 56.7 in September, 56.9 in August, 56.7 in July, 55.3 in June, 55.9 in May, 57.1 in April, 58.3 in March, 56.5 in February , 59.9 in January. Forecast for October: 56.0. This is a high figure. A result above 50 indicates an increase in activity and is seen as a positive factor for the USD. However, a stronger relative decline in the index could negatively impact the dollar in the short term. The level of influence on the markets is medium to high. Relevance up to 10:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325632
UK GDP Already Falling And Continuing To Do So For This Calendar Year, Copper Is Still Within A Tightening Range

ING Economics presents four possible variants of Bank of England decision and their possible consequences for i.a. GBP/USD

ING Economics ING Economics 31.10.2022 12:51
Thursday's Bank of England meeting has become a close call, and we now narrowly favour a 50bp rate hike. That would be a surprise for markets, sending gilt yields lower and driving GBP/USD back towards 1.14   Shift in UK leadership reduces pressure on the Bank of England   Four scenarios for the Bank of England meeting Forecasts based on spot rates as of 31 October. GBP/USD at 1.1560 and 10Y yields at 3.50 Source: ING We narrowly expect a 50bp rate hike this week Judging by recent comments, it’s increasingly clear that the Bank of England is uncomfortable with the amount of tightening priced into financial markets over coming months. Investors expect Bank Rate to peak just shy of 5% next year (from 2.25% currently). That leaves two potential options for Thursday’s meeting. Firstly, the BoE could validate market expectations and hike by 75bp for the first time in this tightening cycle, but signal clearly that it’s likely to be a one-off. That’s the consensus view among economists. Alternatively, the Bank could hike by 50bp, as it did in September, but continue to signal that it is prepared to hike forcefully if required. We now narrowly think this is the more likely outcome, though in either scenario the committee is likely to be highly divided. Read our preview for more detail on our thinking. The central message though, be it via the vote split, the new forecasts or the language in the policy statement, is that markets are overestimating the scope for future rate hikes. Our own view is that Bank Rate is unlikely to go above 4%. Regardless of whether we get a 50bp or 75bp hike this week, we think we’ll get a 50bp hike in December and another 25 (or perhaps 50bp) move in February before the Bank pauses. Six reasons why the BoE could hike by 50bp this week Source: ING Gilts: re-steepening on a 50bp hike For gilts, and by extension sterling-denominated rates, all of the good fiscal news is already in the price. Granted, larger windfall taxes could help close the ‘political risk premium’ that opened against euro and dollar rates in September. This is likely to be balanced by the reduced sense of urgency that the government potentially feels in implementing unpopular fiscal tightening, now that markets have calmed down somewhat. In short, we think fiscal risks are now reduced, and roughly balanced. The focus is instead squarely on the BoE meeting, especially since the 31 October budget has been delayed. A 50bp call by the BoE would be a powerful signal that it doesn’t intend to bow to market pressure for aggressive tightening. There is a risk to this strategy, however. Markets have consistently priced a more hawkish path than the BoE has signalled ever since the start of this tightening cycle last year, so the BoE faces an uphill battle to convince them that smaller increments are the correct approach. A 50bp call by the BoE would be a powerful signal that it doesn’t intend to bow to market pressure Despite this risk, we expect a bullish reaction in gilts. The move would be a hint of a less hawkish BoE reaction function but this is likely to be balanced by greater term and inflation premia baked into longer-dated yields. The gilt rally into this meeting already incorporates decent dovish expectations so a 50bp hike would allow gilts to consolidate their gains below 3.5%, though they will struggle to make more headway towards lower yields. A more noticeable reaction would be a re-steepening of the curve on the lower BoE path at the short end and greater inflation premia at the long end. GBP: A 50bp rate hike would weigh on the currency Sterling continues to trade with high volatility in the FX options market, which prices a 150 pip GBP/USD range for Thursday. As per the scenario analysis table, we believe the disappointment of a 50bp rate hike would send GBP/USD back down to the 1.1400 region this week. Providing some backing to this view is the external environment, where we think the balance of risks favour a stronger dollar. Plus, tighter liquidity conditions around the world will typically weigh on currencies like sterling, with large external funding needs. A GBP/USD rally from here requires a soft dollar environment, the Sunak government credibly filling the £35bn funding gap at the 17 November Autumn statement, and the BoE pushing ahead with a more aggressive tightening cycle. We think the combination of all three is unlikely.   Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Downside Of The US Dollar Index Remains Limited

Bank of Englad went for a 75bp hike, in Norway and Australia hikes were less hawkish. US dollar may be supported by NFP released today

ING Economics ING Economics 04.11.2022 10:25
There is a growing (USD-positive) divergence between the Fed – which delivered only a 'timid' dovish pivot – and other major central banks. Yesterday, the Bank of England pushed back against market pricing as it hiked by 75bp, following dovish turns in Norway, Canada and Australia. Today's US payrolls may come in above 200k, adding fuel to the USD rally Today's US payroll figures may add fuel to the dollar rally USD: Payrolls can keep Fed away from pivot The dollar has retained very good momentum in the aftermath of the FOMC announcement on Wednesday, with markets continuing to push their Fed peak rate expectations higher. Fed Funds futures for the March 2023 meeting are currently trading in the 5.10/5.20% region, a clear testament to how markets have not bought into any dovish pivot narrative.  This is particularly relevant for FX given the growing divergence between the Fed and other major central banks. Yesterday, the Bank of England and Norges Bank both surprised on the dovish side, and so did the Bank of Canada and the RBA a few days ago. There's a growing perceived chance that the Fed will be the last major central bank to throw in the towel and arrest its tightening cycle, and we think this notion can provide quite sustainable support to the dollar into the new year.  Today, the focus will shift back to data as US October payrolls are released. Our US economist sees room for a slightly above-consensus headline read (220k vs a conservative 195k), which should overshadow the widely expected 0.1% increase in the unemployment rate and marginal slowdown in wage growth. We expect today's release to leave markets still searching for a higher Fed terminal rate, ultimately keeping the dollar bid. A decisive break above 113.00 in DXY appears on the cards: if not today, probably in the coming days.  Francesco Pesole  EUR: Caught in the crossfire EUR/USD remains primarily a function of dollar moves, and today's US payrolls release should continue to put pressure on the pair in our view. Having now moved back to the trading ranges seen before the late-October correction (which has proven exceptionally short-lived), we think markets have switched back to a more structurally bearish tone on EUR/USD, and a return to 0.9500 is our base case in the near term. Domestically, markets will keep an eye on ECB president Christine Lagarde's comments this morning. With the OIS curve currently embedding 60bp of tightening at the ECB December meeting, there is surely room for speculation in either direction on the size of the next hike. From an FX perspective, the implications for the euro have been quite limited, and we doubt this will change drastically in the very near term.  Francesco Pesole  GBP: A very dovish hike We had highlighted downside risks for sterling as we approached yesterday's Bank of England (BoE) announcement. Our call was for a 50bp dovish surprise, and while the BoE hiked by 75bp, it seemed to tweak the policy message to the dovish side as much as reasonably possible, ultimately triggering a GBP reaction (-1.5% vs USD) quite similar to what we would have seen if it only hiked by 50bp.  As discussed in our BoE review note, the Bank pushed back quite firmly against what markets were previously pricing in terms of tightening (i.e. a 5% peak rate), adding in its forecasts that following the market-implied rate path could cause a three percentage point economic contraction over several quarters and inflation at zero in 2025. The bottom line is that the BoE is essentially shutting the door to another 75bp, and we expect a 50bp hike in December.  The negative reaction in the pound was – in our view – not just due to the dovish repricing in rate expectations, but also a re-connection of FX dynamics with the rather concerning domestic economic outlook, which was flagged quite clearly by the BoE. The fiscal rigour brought by the new UK government may have already had a beneficial effect on the pound, and now the size of the current UK recession may become a primary currency driver. Indeed, the downside risks are still quite significant, and next week's GDP numbers will surely be watched quite closely: consensus is currently around a 0.4% quarter-on-quarter contraction.  Today, BoE chief economist Huw Pill will deliver some remarks, but there are no other key events to monitor in the UK. Risks are skewed towards a re-test of 1.1000 in cable over the next few days, with today's US payrolls possibly adding pressure on the pair. Francesco Pesole  CEE: Speaking of selloffs... As expected, the Czech National Bank (CNB) left interest rates unchanged at 7.00% today, in line with surveys and market expectations. In a statement, the phrase "...the CNB will continue to prevent excessive fluctuations of the koruna exchange rate" returned after a hiatus in September. If we are looking for a surprise at this meeting we can find it in the new forecast, which has undergone a significant transformation. Overall, the CNB forecasts slower economic growth, including a recession next year and lower inflation, alongside a massive tightening of monetary conditions. However, despite the big changes in the CNB's forecast, nothing has changed in our view of the main story yesterday. The board considers interest rates high enough and FX interventions are doing their job well with no end in sight for now. Thus, we continue to see the risk of additional rate hikes as low and consider the hiking cycle to be closed, the only one in the CEE region. On the FX side, the situation remains unchanged. CNB interventions will continue and the line in the sand is clearly drawn at 24.60-70 EUR/CZK. Given the low central bank costs, we do not expect any changes in the CNB's approach anytime soon. This setup coupled with relatively high carry may serve as a good base against the Polish zloty or Hungarian forint, which are much more vulnerable in global emerging market selloffs especially ahead of the upcoming winter. And speaking of selloffs, the CEE region, surprisingly for us, remains stable despite global conditions deteriorating further. EUR/USD passed another milestone on the way lower again yesterday, the selloff in equity markets clearly indicates a risk-off mood and gas prices also cannot deliver much optimism. Thus, despite the resilience in the region, we continue to believe that the current strong levels are not sustainable. Next week we have a heavy calendar including a National Bank of Poland meeting and CPI prints across the region which we believe can easily serve as a selloff trigger. At the moment, we see room for a move higher in the Polish zloty towards 4.75 EUR/PLN and the Hungarian forint towards 415 EUR/HUF. Frantisek Taborsky Read this article on THINK TagsUS dollar Payrolls FX Federal Reserve Bank of England Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
FX Daily: Hawkish Powell lends his wings to the dollar

The inflation print and mid-term elections make the line-up of events which could influence greenback

ING Economics ING Economics 07.11.2022 09:38
The dollar long squeeze on Friday was likely triggered by optimism on China's Covid rules. We suspect this is too premature, and macro factors continue to point to dollar strength. But there are two key risk events for the dollar this week: US CPI (we expect a 0.5% MoM core reading) and mid-term elections (Biden losing control of Congress may be a USD negative) USD: Room for recovery, but watch for the mid-terms Last week was a hectic one in FX. Fed Chair Jerome Powell’s hawkish press conference left markets searching for an even higher peak rate (currently at 5.1%) and highlighted the divergence between the still hawkish Fed and the growing list of developed central banks that are turning more cautious on tightening (Bank of England, Bank of Canada, Reserve Bank of Australia, Norges Bank). This was a clear bullish narrative for the dollar, which was well supported until Friday when optimism in risk assets triggered some heavy position-squaring on dollar longs. A key risk-on driver on Friday was the apparent loosening of Covid restrictions in China. Indeed, China’s economic woes have been a major factor weighing on global sentiment in recent months. However, a larger relief rally appears a bit premature. First, because the course of Beijing’s health policy has been very hard to interpret, and Chinese officials have already pushed back against any speculation they will drop the zero-Covid policy. Second, this morning’s drop in Chinese exports is yet another signal that slowing global demand is a major drag on Chinese growth. Third, China has been only one factor in the negative risk equation: the search for a higher Fed peak rate and elevated uncertainty around the medium-term economic outlook and energy crisis should keep a cap on risk assets for longer – and ultimately may still favour defensive trades like long dollar positions. The dollar correction that started in late October was fully unwound in about a week, and this indicated – in our view – how macro factors continue to favour dollar strength and the corrections are mostly related to position-squeezing events. We, therefore, expect a re-appreciation of the dollar in the near term, although there are two major risk events to watch this week in the US: the CPI report and mid-term elections. Our US economist expects inflation numbers this week to be important, but not critical for future policy action by the Fed. Most of the focus will be on the monthly change in core CPI, which we expect to come in at 0.5%, in line with consensus. That would indicate further resilience in underlying price pressures and may prevent markets from completely discarding another 75bp hike in December, ultimately offering the dollar a floor. Below-consensus readings may force a dovish re-pricing in rate expectations though. When it comes to the US mid-term elections, we discussed the scenarios and market implications in this article. The bigger downside risk for the dollar is that the Republicans secure control of both the House and the Senate, which would imply a hamstrung administration unable to deliver fiscal support in a downturn. A split Congress (House control going to the Republicans) may be mostly priced in, and the implications for the dollar could be relatively limited. We expect more FX volatility this week, but retain a near-term bullish USD bias and expect DXY to climb back above 113.00 in the coming weeks. Today’s calendar in the US only includes speeches by Fed’s Loretta Mester and Tom Barkin. Francesco Pesole EUR: China's push looks premature Europe’s elevated exposure to the China growth story means that the euro should benefit from speculation that Beijing will loosen Covid restrictions. As discussed in the USD section above, this appears premature speculation, and Chinese growth is still facing the grim prospect of slowing global demand. In line with our view that the dollar should recover in the near term, we don’t think EUR/USD will be able to climb back above parity on a sustainable basis – even though the two risk events this week (US CPI and mid-term elections) could trigger another USD long squeeze. There are not many key data releases in the eurozone this week, and most focus will be on European Central Bank speakers. A pre-registered video of Christine Lagarde on the digital euro will be released this morning, and we’ll hear from Fabio Panetta later today. There are a plethora of other speakers during the week, but the direct impact of expected ECB policy on the euro looks set to remain rather contained. Francesco Pesole GBP: In an uneasy position Despite the dollar’s correction on Friday, the pound still has to fully recover from the post-Bank of England blow. Indeed, the combination of a highly concerning economic outlook and a forced dovish repricing in rate expectations look set to keep the pound rather unattractive. This week, 3Q growth figures are the highlight in the UK calendar, and our economist forecasts a 0.5% quarter-on-quarter contraction, which should all but endorse the BoE’s more cautious approach. There are a few MPC members speaking this week, including Chief Economist Huw Pill and Silvana Tenreyro, the latter having voted for a 25bp hike last Thursday. Cable may be primarily driven by dollar moves this week, but EUR/GBP could extend gains to the 0.8850/70 area. Francesco Pesole CEE: Local story replaces global factors We have another heavy week ahead in the Central and Eastern European region. Today, we start with industrial production in the Czech Republic, where PMIs show a steep decline in production at the end of the year. Tomorrow, in addition to retail sales and industrial production in Hungary, we will see the Romanian central bank's last meeting of the year. We expect a slowdown in the tightening pace to 50bp to 6.75%, in line with market expectations, which could be the last hike in this cycle. But an additional 25bp hike cannot be ruled out in January. Hungarian inflation for October will be published on Wednesday. We expect another jump from 20.1% to 21.0% YoY. Also, on Wednesday we will see the Polish central bank meeting. Our call is for a 25bp hike to 7.00%, but no change will also be on the table, in our view. Thursday will see the release of October inflation in the Czech Republic. We expect only a slight increase from 18.0% to 18.2% YoY, slightly above market expectations, but the risk is new government measures and the approach of the statistical office. Then on Friday, we will finish the series of October inflation prints in Romania, where we expect a slowdown from 15.9% to 15.2% YoY, slightly below market expectations. In the FX market, surprisingly for us, CEE has survived tough weeks which have seen ECB and Fed rate hikes, a stronger dollar and gas prices at higher levels. This week, the local story will come into play. EUR/USD and gas prices are back to more CEE FX-friendly levels, which should be positive for the region in the first half of the week. On the other hand, interest rate differentials are still pointing to weaker FX in the region, and central bank decisions and CPI readings (except in Hungary) support a rather dovish mood, which is negative for FX. From this perspective, we see the Polish zloty as most vulnerable at the moment, which should suffer from the central bank's dovish decision. Moreover, the cost of funding has fallen from its peak in recent days, making shorting less expensive. Thus, we see the zloty closer to 4.750 EUR/PLN in the second half of the week. The Hungarian forint shows the biggest gap in our models at the moment against a weaker interest rate differential. However, higher inflation should again support market expectations and hold the forint slightly above 400 EUR/HUF. The Czech koruna reached its strongest levels since August after the Czech National Bank meeting and is benefiting from temporary short position liquidation. However, we see its value rather closer to 24.50 EUR/CZK. The Romanian leu is down from NBR intervention levels and is closely following global sentiment. Therefore, we expect it to remain below 4.90 EUR/RON for longer. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
UK Budget: Short-term positives to be met with medium-term caution

Sunak (UK Prime Minister) May Have Won Back Investor Confidence

ING Economics ING Economics 06.11.2022 11:34
Prospects of fiscal tightening, limited energy support, and sky-high mortgage rates look set to reduce the size of the UK economy by roughly 2% over several quarters In this article The new prime minister has succeeded in calming markets Energy support to become less generous A recession looks inevitable Source: Shutterstock The new prime minister has succeeded in calming markets The appointment of Rishi Sunak as the new UK prime minister heralds a very different fiscal approach to his predecessor. Promises of debt sustainability have succeeded in stabilising financial markets, and both the pound and gilt yields have gone full circle since the mid-September ‘mini budget’. The political risk premium, as measured by the spread between German and UK 10-year yields, has narrowed back, although it is still wider than it was before the Conservative leadership contest started in July. Unfortunately, that’s where the good news stops. Sunak may have tentatively won back investor confidence, but he’ll need to find savings worth roughly £30-40bn/year to convince the independent Office for Budget Responsibility that debt won’t rise across the medium-term as a percentage of GDP. With very limited scope to cut day-to-day spending, we suspect he’ll have to chop back public investment plans and potentially also look at increases to personal taxes. Energy support to become less generous None of this will be good for growth, though the impact will be dominated by a decision to make the government’s flagship energy support programme less generous from April 2023. Under existing plans, the average household energy bill is capped at £2,500 for two years, but the government has signalled this will become more targeted. Aside from adjusting income tax rates, the only obvious way of doing this would be to make a distinction between those on welfare support and those that aren’t. One scenario could see most consumers move back to paying the Ofgem-regulated price from April. The cost of fixing household energy bills has collapsed Source: Refinitiv, Ofgem, ING calculations   Under that sort of policy, we'd expect most households to pay on average £3,300 in FY2023 for energy, without any government support. As the chart shows, the sharp fall in gas prices means that estimate has halved since August. But that would still leave the average household paying close to 10% of their disposable income on energy. Alongside that, mortgage rates look set to fall fairly gradually, against a backdrop of stubbornly high Bank of England expectations and a greater premium from lenders for high loan-to-value products. With roughly a third of mortgages fixed for two years, millions of homeowners look set to lock-in these higher rates. The two-year fixed rate recently peaked at 6.5%. A recession looks inevitable All of this suggests a recession is now inevitable, and we’ve once again downgraded our GDP forecasts. We now expect the size of the economy to shrink by roughly 2% over four quarters, concentrated in the first half of 2023. Admittedly these forecasts are still heavily contingent on how the government adjusts its energy support. If gas prices begin to rise, particularly for winter 2023/24 contracts, then the government will be under heavy pressure to once again extend its energy support to all households beyond April next year. TagsUK fiscal policy Energy crisis
Apple Q3 2023 Results – Surpassing Expectations and Aiming for New Heights

Enrique Díaz-Álvarez talks Forex market highlighting euro, pound, Japanese yen and more

Enrique Díaz-Álvarez Enrique Díaz-Álvarez 07.11.2022 14:48
Currency market volatility continues to rise, and signs are emerging that the dollar rally is running out of steam. The Federal Reserve delivered a massive hike and a more hawkish than expected message, while other central banks begin to fret about the impact of higher rates on their respective economies. However, the dollar failed to rally and in fact fell against most G10 currencies, with the notable exception of sterling, which was hobbled by an uber-dovish Bank of England. The star of the week, and also the year so far, was undoubtedly the Brazilian real, a favourite of ours, which put in another scorching rally on the back of the peaceful transfer of power to what looks to be a moderate Lula administration.   All eyes turn now to the critical October CPI inflation report out of the US (Thursday). Headline prices will probably drop further as energy prices continue to moderate, but the key will be once again the more persistent core rate. UK third-quarter GDP growth (Friday) may be important for sterling. Beyond economic news, it will be important to see whether signs of China easing its COVID policies are confirmed. As this is written, signs are emerging that last week’s rally in Chineses assets may have been premature. Figure 1: G10 FX Performance Tracker [base: USD] (1 week) Source: Refinitiv Datastream Date: 07/11/2022 British pound The Bank of England hiked rates by 75 basis points last Thursday as expected, but then surprised markets with one of its periodic pivots, this time a dovish one. The Bank of England appears to be taking a blasé view of inflation and focusing on recessionary risks instead. The reference to markets overestimating the terminal rate was unusually blunt, and sterling did not like it one bit, losing significant ground against every major currency worldwide. Third-quarter GDP growth data will be in focus this week. The MPC warned last week that the UK economy may already be in a recession, and this week data is indeed expected to show that contraction on a quarterly basis. This is, however, a backward looking number, and we expect sterling to react as much or more to the US inflation data out this week. Euro Another month, another blow out inflation report out of the Eurozone. This one came just a few days after the muddled attempt at a dovish pivot from the ECB at its meeting the previous week, thereby contributing to the developing credibility gap at the institution. In addition to double digit headline inflation, sticky core inflation continues to march higher. Figure 2: Euro Area Inflation Rate (2013 – 2022) Source: Refinitiv Datastream Date: 07/11/2022 On the plus side, the worst fears about a winter energy crisis continue to fade. On the negative side, early Monday morning reports from Asia suggest that hopes for an easing of Chinese lockdowns may have been premature, and hence the recovery of European exports to China may be further delayed. This week’s main event in the Eurozone will be a number of ECB official speeches, including President Lagarde. US dollar The hopes for a Federal Reserve pivot to a more dovish stance failed to materialise last week, and in fact Chair Powell indicated that rates may have to go even higher than markets were pricing in before the meeting. Bonds fell, as did stocks, but the dollar failed to follow the script and actually ended the week slightly down in trade-weighted terms following Friday’s nonfarm payrolls data. The labour market report was mixed, but still consistent with a very tight market that is yet to feel the impact of monetary tightening in any significant way. Figure 3: US Nonfarm Payrolls (2021 – 2022) Source: Refinitiv Datastream Date: 07/11/2022 The inflation report this week is expected to show another easing of headline annual price pressures on the back of lower energy costs. However, the key will be the core index that strips out the volatile food and energy components. The Fed needs to see a downward trend in these numbers before it can think of pausing hikes in interest rates, and is unlikely to see that in this report. Japanese yen The yen was one of the better performers in the G10 last week, ending modestly higher on the US dollar. The currency remains by far the worst performing major this year, though recent intervention efforts by the Bank of Japan appear to have put a temporary floor under the yen. According to Japan’s Ministry of Finance, intervention totalled more than ¥6 trillion last month, by far the largest ever. The 150 mark on the dollar seems to be a line in the sand for the BoJ, so we would expect fresh intervention to prop up the currency should the yen make another move towards this level. Tentative signs that the Bank of Japan is open to tweaking its monetary policy stance also provided a bit of assistance to JPY. During a speech mid-week, Governor Kuroda noted that changing the bank’s yield curve control policy could be an option should inflation pick-up. Japanese inflation remains far more contained than in most other countries, though it is expected to test three decade highs in the coming months, which could force the BoJ’s hand. Swiss franc EUR/CHF ended last week little changed, and the pair continues to hover below parity. The abundance of domestic economic data had little impact on the franc. Soft prints, for the most part, continue to point to a slowdown ahead. An indicator of consumer confidence, for instance, plunged to its lowest level since its inception in 1972. Retail sales, however, continue to show healthy consumer activity, expanding by another 0.9% in September. This resembles the situation in many other economies, where sentiment indicators and hard data are at odds. There’s not much on tap from Switzerland this week. Speeches by SNB chairman Thomas Jordan and fellow member Andrea Maechler could prove the most noteworthy. Last week, chairman Jordan suggested that further rate hikes may be needed in Switzerland, confirming our view that another rate increase is on the way in December. Australian dollar The Reserve Bank of Australia mostly met expectations during its meeting last week. Interest rates were raised by another 25 basis points to 2.85%, the second in consecutive meetings, having become the first major central bank to revert back to ‘standard’ sized hike in October. Governor Lowe struck a balanced tone in his presser, keeping the door open to additional hikes of a larger magnitude, as it waits to gauge the impact of its tightening cycle on domestic activity. The growth forecast for next year was downgraded, though there was an upward revision to its inflation forecast. All in all, there were no real surprises of note, and AUD largely tracked global risk sentiment and news out of the US. Meanwhile, news out of the Australian economy last week was mixed, with surprises to the upside in business activity and housing data offset by Friday’s soft retail sales print. This week is set to be a relatively quiet one in Australia, so we expect the dollar to be driven largely by goings on elsewhere. New Zealand dollar A stronger-than-expected labour report helped propel the New Zealand dollar to the top of the FX performance tracker last week. Employment rose strongly in the third quarter (+1.3%), following three quarters of essentially flat net employment gains, with the participation rate also up more than anticipated. News that China plans to stick by its zero-covid policy led a bit of a retracement in the dollar during Asian trading this morning, although a general improvement in market risk sentiment has kept the currency well bid. Developments out of China may be the main driver of NZD this week, as the domestic economic calendar is relatively light. We also think that expectations for the RBNZ’s next meeting in a couple of weeks time will remain key. Markets are torn between a 50bp and 75bp hike, though surprises to the upside in this week’s PMI and/or inflation expectations data could tip the balance in favour of the latter. Canadian dollar Friday’s stellar employment report out of Canada helped trigger one of the most violent rallies in CAD witnessed since the extreme volatility of the global financial crisis in ‘08-’09. The employment change number blew all expectations out of the water, as 108k net jobs were created last month, above the 21k consensus and the fastest pace of job creation since February 2020. Investors reacted by immediately raising expectations for Bank of Canada policy tightening, with markets now seeing a two-in-three chance of another 50bp rate hike in December. Figure 4: Canada Employment Change (2021 – 2022) Source: Refinitiv Datastream Date: 07/11/2022 A speech by BoC governor Macklem (Thursday) could be key in shaping the aforementioned rate expectations, and confirm whether this is indeed enough to delay a dovish pivot. Should the Bank of Canada follow in the footsteps of the Fed in prolonging its hiking cycle, then CAD would likely be dragged higher along with the US currency against most majors. Swedish krona The Swedish krona appreciated against the euro last week, extending the rally in SEK to almost 2% against the common currency since the recent peak in mid-October. The latest data out of Sweden continues to be mixed. The manufacturing PMI released last week decreased to 46.8 in October, pointing to the most significant contraction in factory activity since May 2020. However, the services PMI increased to 56.9 from a more than two-year low of 55.1 in the previous month. eptember industrial production data, which will be released this Wednesday, will complete the picture of the economy’s performance, although it has to be said that this data point runs on somewhat of a lag, and is not expected to have too much impact on the currency. Norwegian krone Norges Bank has become the latest G10 central bank to begin slowing its tightening cycle. At its meeting last week, interest rates were raised by only 25 basis points, below the 50bps expected by markets. This weighed on the Norwegian krone, which fell to its lowest level in two years against the euro, although it has since recovered some of these losses. According to its communications, Norges Bank anticipates further hikes ahead, but at a slower pace due to cooling in some areas of the economy and expectations of lower inflationary pressures. This decision is at odds with core inflation, at an all-time high 5.3%, and a labour market that is almost at full employment. In the words of Norges Bank, a larger rate hike would have been needed had only these two variables been taken into account, but the board has put more weight on risks to growth and a tightening in financial conditions. The October inflation rate, to be released on Thursday, is expected to continue its upward trend. This could cause the terminal base rate to be revised upwards, which would likely support the krone. CNY Traders certainly couldn’t complain about a lack of volatility last week. The yuan ended the week higher against the broadly weaker dollar, and the drop in the USD/CNY pair on Friday was among the biggest on record. Looking beyond the FX market, last week was extraordinarily positive for equities, with the key indices rallying sharply on rumour-fuelled hopes that China may soon embark on a path to exit its controversial zero-Covid policy. On Saturday, however, officials quashed speculation, stressing that China would ‘unswervingly’ stick to zero-Covid. Chinese equities have extended their gains today, but this could tell more about their relative cheapness than the validity of reopening hopes. Just before the weekend, China’s new Covid cases surged to six-month highs. Rising infection numbers don’t bode well for the economic outlook, and domestic consumption has already taken a hit, as shown by last week’s soft PMI numbers. Looking ahead, news on the covid front and October’s inflation data (Wednesday) could prove market moving this week. Economic Calendar (07/11/2022 – 11/11/2022) To stay up to date with our publications, please choose one of the below: 📩 Click here to receive the latest market updates👉 Our LinkedIn page for the latest news✍️ Our Blog page for other FX market reports 🔊 Stay up to date with our podcast FXTalk Source: US dollar rally stalls in spite of hawkish Federal Reserve | Ebury UK
The Pound Is Now Openly Enjoying A Favorable Moment

Needless to say - greenback plunged after the inflation release, so Sterling gained. If released next week GDP come at less than -0.5%, pound may recede

Kenny Fisher Kenny Fisher 10.11.2022 20:41
The British pound has soared today, following the US inflation report. GBP/USD is trading at 1.1661, up a massive 2.7%. US dollar retreats as inflation falls The October inflation report was lower than what everyone had expected, which has triggered strong volatility in the currency markets. The US dollar is sharply lower against the majors, as the markets are expecting the Fed to ease up on interest rates after today’s favourable inflation data. Headline CPI dropped to 7.7%, down from 8.2% in September and below the consensus of 8.0%. Core inflation slowed to 6.3%, down from 6.6% and lower than the forecast of 6.5%. The surprisingly low numbers have turned rate pricing on its head. Prior to the inflation release, the markets had priced in 55% for a 50 bp increase and 45% for a 75 bp hike. This has changed to 80-20 in favor of a 50 bp hike, which has sent the US dollar into a broad retreat. The Fed may end up delivering a 50 bp move in December, but investors should remind themselves that this doesn’t mean the Fed is going soft. It wasn’t too long ago that a 0.50% hike was considered ‘supersize’; it’s only in comparison to 0.75% or full-point moves that a 0.50% increase can be considered dovish. Secondly, Fed Chair Powell said at last month’s meeting that the terminal rate would be higher than previously expected, a clear sign that the Fed remains hawkish. The UK releases key data on Friday, and the markets are braced for soft readings. GDP for the third quarter is expected to slow to -0.5% QoQ, down from 0.2% in the second quarter. Manufacturing Production for September is expected at -0.4%, which would mark the third decline in four months. If these releases are weaker than expected, the pound could give back some of today’s huge gains. GBP/USD Technical There is resistance at 1.1767 and 1.1844 1.1609 and 1.1505 and providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. GBP/USD rockets as US inflation dips - MarketPulseMarketPulse
Bank of England survey highlights easing price pressures

September’s GDP In UK Hit Was Unrelated To The Funeral Of Queen

ING Economics ING Economics 12.11.2022 08:08
UK recession coming as economy begins to contract Not all of the latest weakness in UK GDP is explained away by September's extra bank holiday, and we're expecting further declines in output over the coming quarters. As the cost of living squeeze continues, we expect a 2% hit to GDP by next summer, though much depends on how the government's energy support evolves between now and then. Queen's funeral added to September's GDP hit The UK economy shrank by 0.2% in the third quarter of the year, marking the start of what’s likely to morph into a recession spanning several quarters. Admittedly that’s less bad than expected, partly because August’s data was revised more favourably. Unsurprisingly these latest figures are also somewhat skewed by the extra bank holiday in September, which marked the Queen’s funeral. Workplaces – including many that would typically be open on a bank holiday – were reported to be temporarily closed. GDP fell by 0.6% during September as a result. That muddies the water when it comes to assessing the underlying strength of the economy, and probably also means the fourth quarter figures will be a little higher than they otherwise would be, assuming the lost activity returns in October. Further weakness is coming Nevertheless, there are unmistakable signs that the economy is slowing. The ONS hints that at least some of September’s GDP hit was unrelated to the funeral, while retail sales have now fallen for two consecutive months. We expect a further decrease in data released next week. We also expect to see a similar trend in hospitality over the coming months, which has been operating well above pre-pandemic levels for some time on the back of renewed consumer interest. Lower consumer spending appetite is likely to help push GDP into a second-straight contraction during the fourth quarter. We’re pencilling in a 0.3% hit to economic activity, the same as the Bank of England. As the winter wears on, we also expect to see more strain emerge in manufacturing and construction – both of these sectors suffered noticeably during the 1990s and 2008 recession. The fall in manufacturing new orders, linked to falling global consumer demand for goods and rising inventory levels, as well as higher energy costs, point to lower production by early 2023. Likewise, the sharp rise in mortgage rates, and the very early signs of house price declines, point to weaker building activity through next year. A winter recession looks highly likely Wrapping that all together, we currently expect a cumulative hit to GDP of roughly 2% by the middle of 2023. That would be a comparable hit to the 1990s recession, and is somewhere between the Bank of England’s two forecasts released last week – one that was premised on no further rate hikes (rates constant at 3%), and one which assumed a terminal Bank Rate of 5%. We expect Bank Rate to peak at around 4%. Ultimately a lot will depend on next week’s budget announcements. A lot of the focus understandably will be on how the Chancellor closes the forecasted fiscal deficit in 2026/27. But above all, we’ll be looking for details on how the government will make its energy support less generous from April, something which has the greatest scope to reshape the 2023 outlook. The Chancellor has signalled support for households will become more targeted in a bid to make the policy less costly. The challenge here is that there’s no easy way of targeting support efficiently, and it may be that the Chancellor simply differentiates households by whether they receive means-tested income support. The upshot is that we could see the majority of households shift back to paying the Ofgem-regulated price, which is updated quarterly. The sharp fall in wholesale gas prices could see most households paying £3,300 on average during FY2023, compared to £2,500 annually under the government guarantee. That would equate to roughly 9% of household disposable income and would add a further drag to overall economic activity next summer. TagsGBP Energy crisis   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Craig Erlam and Jonny Hart talk UK Autumn Statement and more

The cable's performance is outstanding indeed. XTB's Walid Koudmani highlights huge, 6% percent gain

Walid Koudmani Walid Koudmani 14.11.2022 13:37
Crypto markets attempt to recover despite widespread panic   The panic surrounding the crypto market continues this week after further developments regarding the FTX situation led to a widespread uncertainty involving the whole sector with many now questioning the safety of other major exchanges and defi protocols. Many large institutions rushed to reassure their customers, investors and market as a whole of their financial positions after major doubts emerged following the FTX collapse. Understandably, the Crypto fear and greed index is signaling levels of extreme fear as a large outflux of coins and cash from exchanges is threatening the stability of the ecosystem even further. Major price swings, spiky volatility and projects approaching collapse are all factors causing an outflow of capital from the ecosystem as the overall market cap hovers around $844 billion while major crypto currencies like Bitcoin and Ethereum attempt to hold above their key supports. While there is a high potential for unexpected developments and high volatility, some investors may take the fact that BTC and ETH stabilized slightly as a reassuring sign, at least in the short term. On the other hand, confidence in the crypto industry is likely hovering around historic lows as many who may have been supporters have begun to doubt their conviction as they see companies that may have seemed too big to fail crumble almost overnight leaving investors and customers to deal with the aftermath.    Pound pulls back from highest level since August   The pound has managed to pull off an impressive recovery since the beginning of November with the GBPUSD pair rising over 6% and reaching a high of 1.185, a level not seen since the end of August. This came as the USD started to retreat following macroeconomic reports supporting a slightly less hawkish approach by the FED and as the recently appointed British PM attempted to calm investor sentiment after his predecessor. Today we can see a fairly balanced situation in the FX market with both USD and GBP performing strongly and with the pair pulling back slightly as it trades around 1.177. Many will be focused on the G20 taking place this week as progress on the geopolitical front may also help with improving sentiment while Sunak remains under pressure with regards to taxes, cuts and migrants. From a technical perspective, the GBPUSD pair is trading at an interesting price reaction area after encountering resistance and pulling back almost 1% and breaking below the 21SMA on the hourly chart. As the sentiment surrounding the pound remains uncertain, any major developments may cause large volatility spikes that could cause a breakout from the short term trading range.
Solid Wage Growth in Poland Signals Improving Labor Market Conditions

UK inflation accelerated in October, remote disabled workers could assist in bringing down unemployment, Asian stocks fell in the wake of missile strike in Poland

Rebecca Duthie Rebecca Duthie 16.11.2022 11:51
Summary: The UK's inflation rate accelerated to 11.1 percent in October. Due to COVID, more disabled employees are now employed. Reports that two individuals were killed by a Russian-made rocket in eastern Poland caused risk-sensitive markets to fall. UK inflation surpassed expectations On the basis of rising energy and food prices, the UK's inflation rate accelerated to 11.1 percent in October, reaching a new 41-year high. The rate increased from 10.1% in September, according to the Office for National Statistics, bringing inflation to its highest point since October 1981. In a Reuters poll, economists predicted a rate of 10.7%. The government's energy price guarantee, which set a maximum on gas and electricity bills at £2,500 for a household using both fuels on average, did not prevent the significant increase in living expenses. One encouraging aspect of the data was that core inflation, which excludes food and energy, remained constant in October at 6.5%, matching its level from the previous month. In his Autumn Statement on Thursday, Chancellor Jeremy Hunt blamed Russia's invasion of Ukraine for the rising cost of living crisis and promised to make "difficult but necessary decisions on tax and spending" to assist lower inflation. “We cannot have long-term, sustainable growth with high inflation. Tomorrow I will set out a plan to get debt falling, deliver stability, and drive down inflation while protecting the most vulnerable,” Hunt said. UK inflation accelerates to 41-year high of 11.1% https://t.co/N0fRWxcK9o — Financial Times (@FT) November 16, 2022 Hiring remote disabled workers could assist in Americas labor crisis Although the end of America's widespread labor crisis is still not in sight, some economists contend that having a workforce with a wider range of abilities in today's hybrid workplace could assist. Due to COVID, more disabled employees are now employed thanks to the shift to working from home or using a hybrid approach. Disability-related adults between the ages of 25 and 54 "are 3.5 percentage points more likely to be employed in Q2 2022 than they were pre-pandemic," according to the Economic Innovation Group (EIG). In comparison, non-disabled people continued to have a 1.1 percentage point lower likelihood of being employed. The coronavirus epidemic, which eliminated 500,000 jobs from the American workforce, and the Great Resignation, which began following the outbreak, are both factors in the current labor crisis. According to the U.S. Chamber of Commerce, there would still be around 4 million unfilled positions even if every unemployed person found employment. Prior to COVID, 6.3% of people with disabilities and 5.9% of people without disabilities worked from home. Because it removes obstacles like driving to work and other locations that can be challenging to manage, working remotely boosts productivity for employees with impairments. She pointed out that perks like closed captioning, flexible working hours, medical breaks, and the use of one's own assistive equipment help employees produce the highest-quality work, boosting a company's financial success. Due to their unique perspectives and environments, these people really have an advantage over their non-disabled coworkers who aren't disabled. Hiring remote disabled workers could help close the labor gap, economist says https://t.co/GkQxnaRg1D by @tanyakaushal00 pic.twitter.com/91zBf47AGI — Yahoo Finance (@YahooFinance) November 16, 2022 Missile that hit poland weighing on Asian stocks As investors sought more information on a potential Russian missile assault on Poland, Asian stock markets declined on Wednesday. However, anticipation that the Federal Reserve will hike interest rates more slowly helped to limit losses. As investors locked in a stellar three-day gain streak, Hong Kong stocks had the worst day, with the Hang Seng index down 1.1%. With recent increases, the Hang Seng has come very close to confirming a bull market rally from recent lows. Following reports that two individuals were killed by a Russian-made rocket in eastern Poland on Wednesday, risk-sensitive markets fell. If the attack was carried out by Russia, it would be the first time since Moscow invaded Ukraine that a NATO member had been attacked by Moscow (NATO). The action might also herald an escalation in the confrontation between Russia and Ukraine, especially in light of NATO involvement. However, early remarks from Moscow and Washington imply that such an outcome might not occur. *GLOBAL STOCKS SLIP IN CAUTIOUS TRADE AS MARKETS WEIGH POLAND MISSILE STRIKE https://t.co/IZatRFKYp3 — Investing.com (@Investingcom) November 16, 2022 Sources: finance.yahoo.com, twitter.com, ft.com, investing.com
Beyonce Bounce and Soaring UK Inflation: A Challenge for Bank of England

ING Economics predicts Bank of England may go for a 50bp rate hike during the December meeting

ING Economics ING Economics 17.11.2022 15:55
Markets have calmed in recent weeks which has allowed the Chancellor to push back some of the fiscal pain, particularly on public spending. The result is elevated borrowing in the near term, but the impact on UK growth isn't necessarily huge. Still, with energy support becoming less generous, the Bank of England can afford to hike more gradually Chancellor Jeremy Hunt leaves 11 Downing Street to present the Autumn Statement Has the government done enough to calm markets? This is a much less pertinent question than it was a few weeks ago. The change in political management, relentless leaks of possible austerity measures, and an end to the liability-driven investment (LDI) pension crisis have all contributed to calmer markets and a narrower risk premium in UK assets. Investors have also bet that a tighter budget will lessen pressure on the Bank of England to increase rates. That is perhaps an exaggeration, but the combination of these factors helped 10-year government bond yields fall from 4.5% to 3.25% in the run-up to today's Budget. But this logic was still contingent on Chancellor Jeremy Hunt presenting a plan which saw debt stabilise as a percentage of GDP in the medium-term – and the Office for Budget Responsibility has confirmed this will be the case by the fiscal year 2027/28. But the story is a little more complex than that, and the reality is the Chancellor faced a trade-off between boosting credibility by presenting immediate plans to reduce borrowing and avoiding amplifying the forthcoming recession. If anything, the Chancellor is leaning more towards the second of those priorities, in that much of the pain – particularly in terms of tighter government spending – won’t kick in for a couple of years. Public sector net investment rises to 3% of GDP next year but then falls back to 2.2% in five years’ time. The result is that borrowing is still elevated over the next couple of years, to the extent that gilt issuance plans have actually increased for the next fiscal year. Taking the Debt Management Office’s forecast 2023-24 remit of £305bn, and the BoE’s quantitative tightening programme, we estimate that private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24. The previous peak was £107bn in FY2020-21. Gilt markets may be calmer, but there’s still plenty of supply for private investors to absorb – and a lot rests on delayed pain coming through in the public finances later this decade. For now, though, sterling has taken the Autumn Statement in its stride, barely changing against the euro and slightly softening against today’s modest dollar recovery. The lack of reaction will be down to the well-flagged measures from the new government, although the currency market might once again be keeping one eye on the slight softness in the gilt market today. Our baseline view sees GBP/USD dipping below 1.15 after the current bout of position adjustment has run its course, while we also favour some modest underperformance against the euro. EUR/GBP could be trading back to 0.89 by year-end. Energy support is becoming less generous Source: Ofgem, Refinitiv, ING calculations The impact on the economy and inflation The fact that a fair chunk of the pain has been delayed means that the economic impact of the Autumn Statement on next year’s growth isn’t necessarily huge – or at least not compared to expectations. A lot of the near-term tax rises are also either concentrated on higher-income earners or energy companies – and remember that the national insurance cut implemented under former Prime Minister Liz Truss hasn't been reversed. That said, the major change is that the average household will see energy bills fixed at £3,000 a year from April, up from £2,500 previously promised. That’s still slightly more generous than would otherwise be implied by wholesale gas/electricity futures, but not by much. We estimate that, without government intervention, the average energy bill would be £3,200 in FY2023, and that reflects the big fall in prices we’ve seen since August. Interestingly, even though the Chancellor has committed to supporting households for another 12 months beyond April, we estimate that energy bills will actually fall below £3,000 on an annualised basis by the first quarter of 2024 if wholesale prices stay where they are. Admittedly that's a big "if", and the risk for the Treasury is that they increase once more, particularly for futures covering the winter of 2023/24, pushing up the cost of support – albeit this is somewhat mitigated by a widened windfall tax that will now cover renewable electricity generators. For the economy, the important point is that households will be paying a little over 8% of disposable incomes for energy in FY2023, from 7% under the original guarantee, by our estimates. However, this is before considering new payments for low-income households, which will help cushion the blow. We’re forecasting a recession with a cumulative hit to GDP of roughly 2% by the middle of next year, and expect overall 2023 GDP to fall by 1.2%. The decision on energy prices lifts our inflation forecasts by roughly one percentage point from April next year. UK inflation will be roughly 1pp higher after April Source: Macrobond, ING The impact on the Bank of England The reality is there’s not much in the Autumn Statement to cause any earthshattering changes to the Bank of England’s view that it unveiled at the November meeting. The BoE's forecasts, which envisaged recession with or without further rate hikes, were premised on some withdrawal of energy support. The assumptions it made at the time are not wildly different from what has been announced today. As a result, we think the November 75bp rate hike will probably prove to be a one-off. Admittedly, some hawkish surprises in this week’s inflation data, and signs of ongoing worker shortages, suggest the Bank’s work isn’t finished yet. But we think the committee will pivot back to a 50bp hike in December and either 25bp or 50bp in February, seeing the Bank Rate peak around 4%. Read this article on THINK TagsUK fiscal policy Inflation Bank of England Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Japanese Yen Retreats as USD/JPY Gains Momentum

Elon Musk seems to be determined in applying his ideas

Walid Koudmani Walid Koudmani 18.11.2022 08:55
UK Retail sales show signs of improvement Retail sales in the UK rose by 0.6% in October compared to the expected 0.5% increase and previous 1.5% decline as British consumers managed to recover slightly despite rising inflation and the ongoing cost of living crisis. While this may appear to be a positive sign, there is still a long way to go before the economic picture begins to look brighter, particularly after yesterday's statement from Chancellor Jeremy Hunt referring to a recession. The pound is starting Friday's session attempting to hold onto some gains with GBPUSD pair testing the 1.19 area after pulling back to 1.175 yesterday. Meanwhile, the FTSE100 remains in the 7370 points area and it remains to be seen if it will be able to extend the upward move or fall further as investors continue to be uncertain. Read next: NVIDIA (NVDA) Q3 earnings results outperformed part of the markets forecasts| FXMAG.COM Twitter saga continues as offices close  Twitter's turbulent story continues after Elon Musk's company just announced the closing of its offices effective immediately until next week. The decision came as a surprise to many, including the employees who were told to comply with company policy. This adds further uncertainty and skepticism as to how the new owner intends to transform the business that took months to acquire while continuing to be a controversial figure. While Twitter stock is no longer available on the market, this is certainly an interesting situation as it could have ramifications and effects on the market as a whole with many holding varying opinions on the matter. In either case, it seems that Elon Musk is willing to take chances and act in unexpected ways if it means achieving his vision for Twitter even if it costs him employees.
"Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24"

"Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24"

ING Economics ING Economics 18.11.2022 09:40
The rates rally has run into resistance as central bankers signal that their job is far from being done. In Europe the first TLTRO repayment will kick off the European Central Bank's balance sheet reduction, though the impact should at first be marginal. Over in the UK the prospect of substantial net supply has limited the downside in gilt yields First TLTRO repayment kicks off ECB balance sheet reduction The ECB’s outstanding targeted liquidity operations (TLTRO) and the quantitative easing portfolio currently still bloat the central bank’s balance sheet, a situation not deemed compatible with the ECB’s overarching goal of reining in policy accommodation to tackle high inflation. To that end the ECB had revised the terms of the TLTROs at the last meeting in October. Today the central bank will announce how much of the currently still €2.1tn outstanding banks will repay at the first additional repayment date on 23 November, the day that the new less attractive borrowing terms come into force. Some ECB officials have said they expected a sizeable repayment, though a Bloomberg survey sees estimates in a wide range anywhere from €200bn to €1500bn with a median at €600bn. At this early stage we think the risk is skewed towards a smaller repayment – we have pencilled in €400bn.    The Euribor-Estr basis will become more correlated to credit spreads after TLTRO repayments Source: Refinitiv, ING   Given total excess reserves of €4.7tn today’s repayment by itself will have a marginal impact Officials have hope that the repayments can ease the collateral scarcity. We would caution that the collateral pledged in these operations will unlikely be of the high quality liquid type so dearly in demand. For the system as an aggregate, the repayments will imply a lower amount of excess reserves chasing this quality collateral. Considering that the overall excess reserves are still at a staggering €4.7tn, today’s repayment is likely to have only a marginal impact. Over time with further repayments and at the latest with the bulk of the TLTROs maturing by mid next year the impact should increase, however. The suppression of money market rates that was achieved by high levels of excess reserves should start to fade. The overnight rates ESTR could see fading downward pressure, allowing it to gradually return to the deposit facility rate. Credit sensitive money market rates like the Euribor fixings could become more sensitive to growing systemic risks and the looming recession. Gilt investors will have plenty of supply to absorb The UK Chancellor has presented a plan that will stabilise the country’s debt over the medium term – as much has been confirmed by the independent OBR’s new projections, if only towards 2027/28. But faced with the trade-off between boosting credibility by presenting immediate plans to reduce borrowing and avoiding amplifying the forthcoming recession, the Chancellor is leaning more towards the second of those priorities – much of the fiscal tightening has been deferred to the later years.  Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24 The result is that borrowing is still elevated over the next couple of years, to the extent that gilt issuance plans have actually increased for the next fiscal year. Taking the Debt Management Office’s forecast 2023-24 remit of £305bn, and the BoE’s quantitative tightening programme, we estimate that private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24. The previous peak was £107bn during the pandemic of FY2020-21.  The size of the gilt market will increase by a record amount next year Source: Refinitiv, ING Today's events and market view The rally in rates has finally run into some resistance. With a look to the UK the higher gilt remit will have helped, but it also seems that Fed officials saw more pushback was in order, warning not to read too much into one CPI reading. Standing out was the Fed’s Bullard, who signalled that he saw the terminal rate at least at 5-5.25%. There is little on the data calendars worth mentioning apart from US existing home sales. The attention should remain on central bank speakers. In the US only the Fed's Collins is scheduled to speak on the labour market, but over in Europe we will see President Lagarde, the Bundesbank’s Nagel and the Dutch central bank’s Knot speaking at the European Banking Congress. Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Craig Erlam and Jonny Hart talk UK Autumn Statement and more

Craig Erlam and Jonny Hart talk UK Autumn Statement and more

Craig Erlam Craig Erlam 18.11.2022 13:25
OANDA Senior Market Analyst Craig Erlam reviews the latest market news with Jonny Hart. They discuss the UK Autumn Statement and US economic data. Subscribe on Android This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Market Insights Podcast (Episode 399) - MarketPulseMarketPulse
United Kingdom: Money supply increased by 4.8% year-on-year

United Kingdom: Money supply increased by 4.8% year-on-year

Alex Kuptsikevich Alex Kuptsikevich 29.11.2022 14:34
The UK's money supply and credit data showed a much stronger-than-expected slowdown - an important signal of a slowing economy. Broad money supply (M4) was unchanged in October and added 4.8% y/y, significantly below inflation at 11.1% y/y. The money supply growth rate has been falling since last February following the covid stimulus boom. But in recent months, a downward trend in lending considering rising interest rates has also become prominent. The number of approved mortgage applications in October was 15% lower than a year earlier. Excluding the collapse in the early months of the coronavirus, these are the lowest levels in nine years. The net increase in personal loans for October was 4.74bn, compared with a monthly average of 7bn since the start of the year. The fading here is like what we saw in the mortgage lending crisis. However, the difference is that between 2007 and 2009, the Central Bank fought the credit crunch by bringing the rate down to the floor and launching QE, while now the slowdown in the circulation of money is the policy objective. In the UK, the decline in mortgage lending is explained by the fact that loans are mainly made at floating rates, and warnings from the Bank of England about further policy tightening may deter home purchases, especially given the prospect of rising daily and utility costs. This explains the more rapid transmission of monetary policy against the US, where mortgages are mainly issued at a fixed rate. This provoked a surge in new lending in the early stages of its rise, only to cause a downturn months later. For the pound, the fall in money supply growth and the downturn in lending is relatively bearish news as it raises the question of whether the Bank of England can significantly narrow the rate gap with the US. Since 1985 the Bank of England’s key rate has almost always been higher than the US rate. This difference was significant in 2002-2007, supporting the rise in GBPUSD. The latest data suggests that this will not recover in the foreseeable future, making it difficult for the pair to rise near 1.2200 without help from fundamentals.
In December, the Fed maintained a tougher rhetoric than the market consensus, playing on the bears' side

In December, the Fed maintained a tougher rhetoric than the market consensus, playing on the bears' side

Alex Kuptsikevich Alex Kuptsikevich 15.12.2022 15:12
BoE is expected to hike the rate by 50bp on Thursday, but the day before CPI inflation data is published - would you expect a hawkish pivot if CPI bounces back above November print? The annual price growth rate in the UK fell slightly in November to 10.7% from a peak of 11.1% a month earlier. This reversal coincides with earlier trajectory estimates from the Bank of England, so it should not cause a meaningful change in the commentary. On the other hand, the Fed continues to surprise markets with more hawkish rhetoric, even with five months of slowing consumer prices under its belt. Key central bankers are pushing the idea of a more protracted and decisive fight against inflation into the markets at this stage. In contrast, markets are set to repeat post-2008 history, when the central banks' primary concern was stimulus but not suppression of inflation. Read next: The BoE And The ECB Raised Rate By 0.50% To 3.50% Today, Australian Dollar Falls After Disappointing Data From China| FXMAG.COM Santa Rally: Would Santa skip coming to town amid turbulent times and uncertain beginning of the next year? Turbulent times do not rule out periodic and strong rallies against the trend. However, the Fed could now be the Grinch who wants to steal the holiday in the markets. Since the second half of November, the broad stock indices (S&P 500, Russell 2000) have been struggling with resistance against the downtrend. In August, the Fed decided the fate of this battle by siding with the bulls. In December, the Fed maintained a tougher rhetoric than the market consensus, playing on the bears' side. However, market dynamics show that there are fewer sellers anymore.  ECB decides on interest rate this week - what do you expect from the Bank this time? When could the cycle come to an end? The ECB will raise the rate by 50 points, not wanting to surprise the markets. In addition, we should expect indications of further policy tightening via a plan for asset sales from the balance sheet and rate hikes. Currently we expect the ECB to raise rates up to Q3 2023. From the second quarter, it could be a rate hike of 25 points. At the same time, there are many surprises along the way as de-globalisation will contribute to higher inflation in the region and force the ECB to take a more hawkish approach in contrast with zero rates after 2016.
Forex: British pound against US dollar - technical analysis - January 2nd

British pound may plunge further, headline CPI expectations lowered

FXStreet News FXStreet News 15.12.2022 16:10
The BOE has raised rates by 50 bps but has refrained from committing to more action. Two members have voted against raising rates at all. The MPC has noted that government action reduces the inflation path. Two 50 bps rate hikes – a different outcome, and it is due to promises about the future. While the Fed wants to continue raising rates, the Bank of England has its doubts. GBP/USD has reacted negatively to the decision, but here is why there may be more in store. 1) Conditional hikes: The BOE stated that the "majority of the Monetary Policy Committee judges that further increases in the bank rate may be required. The critical word here is the word "may." Has the "Old Lady" reached its limit at 3.50%? That would a shallow rate hike cycle. 2) Two wanted to stop right now: Two out of nine MPC members voted against raising rates at all – not even 25 bps. While one member took the hawkish stance of a 75 bps hike, the two dovish members noted weakness in the labor market. This sentiment comes just after the UK reported an increase in wages. What do they know that others do not? Such pessimism is detrimental for the Pound. Read next: In December, the Fed maintained a tougher rhetoric than the market consensus, playing on the bears' side| FXMAG.COM 3) Inflation will not be that high: According to the BOE, the government's new Autumn Statement, the fiscal cuts will cause headline CPI to drop by 0.75% compared to previous forecasts. That means fewer rate hikes. The BOE and its Governor, Andrew Bailey are pessimistic, adding to the gloom Britain is suffering from soaring energy bills, cold weather, and an "advent calendar of strikes." There is more room for the Pound to fall.
UK GDP Already Falling And Continuing To Do So For This Calendar Year, Copper Is Still Within A Tightening Range

Bank of England decision wasn't unanimous as one member voted for a 75bp hike with two other opting for inaction

Enrique Díaz-Álvarez Enrique Díaz-Álvarez 19.12.2022 16:35
We’d been warning for some time about the large gap between market expectations for future ECB rates and the inflationary reality. The central bank swung clearly to our view at its meeting last week, warning of 50bp hikes for as long as is necessary and forcing European rates higher across the curve. The Federal Reserve was also hawkish, and the Bank of England maintained its unblemished track record of muddled messaging and general confusion. The euro benefited the most, while sterling, emerging market currencies and risk assets generally reacted badly to the news that the two most important central banks continue to focus exclusively on reining in inflation back to targets.   The week before Christmas tends to be on the dull side in financial markets, as traders wind down for the year. In fact, little news of note will come out next week, beyond the PCE inflation report in the US on Friday. However, the market is still digesting the hawkish surprises from last week’s central bank meetings so we still expect an interesting week in currency markets. Figure 1: G10 FX Performance Tracker [base: USD] (1 week) Source: Refinitiv Datastream Date: 19/12/2022 GBP While rates in the UK were hiked by 50bps as markets expected, there was a three-way split among Monetary Policy Committee members, with one member voting for a 75bp hike and two more voting for no change in rates. This was, at the margin, a dovish split, but on the other hand there seemed to be yet another swing in Bank of England communications, this time towards hawkishness and acceptance of higher market expectations of future hikes. Read next: EUR/USD Pair Looks Reasonably Well Supported | The Japanese Yen Galloped Higher In The Morning| FXMAG.COM Overall a muddle message that resulted in an underperforming currency as sterling finished the week right near the bottom of the G10 currency rankings. No major news will be released this week, so expect the pound to move off events elsewhere. EUR The ECB sent markets an unmistakably hawkish message last week, validating our view that there was a massive gap between expectations of future hikes and the inflationary realities in the Eurozone. President Lagarde warned of 50bp hikes, harsher and earlier quantitative tightening, and a higher terminal rate for the ECB. Another positive factor for the euro were the December PMIs of business activity, all of which improved measurably from the previous month. The worst-case scenarios for an energy crisis look increasingly remote, and China’s pivot away from zero-COVID policies only adds to the bullishness (relatively speaking) on the Eurozone economy. However, the common currency has already had a blistering rally of over 10% since its late-September low and perhaps a pause is to be expected in the lead up to the Christmas holiday. Figure 2: G3 PMIs (2020 – 2022) Source: Refinitiv Datastream Date: 19/12/2022 Aside from China, Japan has been one of the few countries in the world to adopt an easing bias in the current cycle, so a move away from this at a time when most central banks are delivering dovish pivots would be unambiguously bullish news for JPY. The BoJ will be announcing its latest policy decision on Tuesday, though we see very little chance of any policy changes, or tweak to the bank’s forward guidance. CHF The Swiss franc outperformed most G10 currencies last week, although it ended slightly lower against the euro. Last week’s Swiss National Bank meeting largely followed the script, and had little impact on the franc. As expected, the SNB raised its policy rate by 50 basis points to 1% and reiterated its pledge to intervene in the FX market as necessary. President Jordan confirmed that the bank has indeed sold foreign currency in the past few months and that it may intervene on both sides of the market. The bank’s conditional inflation forecast was little changed from September and the SNB continues to pencil in inflation of 2.4% in 2023. Moreover, the bank expects growth to decelerate from around 2% this year to 0.5% in 2023. Even though price pressures in Switzerland have moderated of late, the fight against inflation is not over and the bank signalled that it may hike rates again. We expect the SNB to maintain its hawkish stance in the near-term, but also think that it won’t be long until the bank considers ending the hiking process. With barely any news from Switzerland on tap this week, the franc may trade off events elsewhere, though volatility may be limited. AUD The Australian dollar was one of the underperformers in the G10 last week, with heightened uncertainty surrounding the covid situation in China keeping gains for AUD in check. While news of a possible move away from zero-covid should be keeping the currency well bid, reports of jumps in caseloads have soured optimism. Economic news out of Australia last week was mixed, with a strong jobs report offset by another drop in the composite PMI, which remains in contractionary territory. Most economists, ourselves included, expect Australia to avoid recession in the coming months, though a slowdown appears inevitable, particularly in light of the acute uncertainty abroad. The latest RBA meeting minutes will be released on Tuesday. Markets see a relatively low possibility of another rate hike at the next meeting in February, so we could see a bout of AUD strength if one were to be alluded to in tomorrow’s minutes. NZD Strong third quarter GDP data perhaps contributed to an outperformance in the New Zealand dollar relative to its antipodean counterpart last week. The New Zealand economy expanded by 2% on the previous quarter, more than double expectations, and by 6.4% year-on-year (5.5% consensus). The reaction in markets to the news was, however, rather limited, as economists believe that this jump in activity was driven largely by one-off factors, notably the reopening of borders in August. We suspect that volatility in NZD will be low this week as we approach the typically subdued Christmas period. Focus in the New Year will revert back to RBNZ monetary policy. The bank is expected to be the most active in the G10 next year, which may provide some scope for a dovish surprise. Figure 4: New Zealand GDP Growth Rate (2015 – 2022) Source: Refinitiv Datastream Date: 19/12/2022 CAD A lack of major domestic news caused CAD to put in a middling performance last week. The modest uptick in global oil prices should be supporting the Canadian dollar, although the Bank of Canada’s dovish policy stance has made gains hard to come in recent months. Inflation and GDP data out on Thursday and Friday respectively could receive some attention this week, though the BoC has indicated that it may have already ended its tightening cycle, which could mean that these data points become slightly less relevant. That said, economists are pencilling in a four-month high in the headline inflation numbers that, if confirmed, could raise the possibility of another 25bp hike in the first quarter of next year, even if we think this is doubtful. SEK The ECB’s hawkishness sent the krona to its lowest level in almost two months against the euro last week, although Sweden’s November inflation data perhaps prevented a more aggressive move lower in the currency. The annual inflation rate increased to 11.5% in November, its highest level since February 1991, following a 10.9% surge in October, while core inflation increased to 9.5%. The continued rise in inflation supports our view that the Riksbank will likely need to raise interest rates further during the next few meetings. This could support the krona, as most other major central banks appear to be nearing the end of their tightening cycles. November retail sales will be released this Thursday. Apart from that, there are no events that are expected to move the currency, and as we approach the festive period we expect market movements to abate. NOK The slight rebound in Brent crude oil prices, and last week’s rate hike by Norges Bank, allowed the Norwegian krone to post modest gains against the euro last week. As expected, Norges Bank raised rates by 25bps last week, lifting its key rate to 2.75%. The bank announced that it expects to continue hiking rates further at the next meeting, and that it expects rates to be close to 3% in 2023. As for the macroeconomic outlook, the bank expects inflation to remain higher than expected for a longer period of time, with the economy set to slow down more than initially expected. As inflation remains well above target, we now expect Norges bank to carry out two additional rate hikes of 25 basis points at the January and March meetings. However, this will depend entirely on the data available until then. The December unemployment rate will be released this Friday, although there are no other events that are expected to move the currency aside from that. CNY The Chinese yuan ended last week roughly in the middle of the emerging market currency dashboard, and just a touch lower against the US dollar. Initial optimism about China inching away from zero-COVID appears to be turning into caution as the country is battling through its first winter wave of covid. China’s chief epidemiologist Wu Zunyou expects two more to come, with the latter ending in mid-March. This casts a shadow on the near-term economic outlook – data in the last few days has certainly not helped allay this pessimism. Hard data published last week was overall weaker-than-expected. Perhaps the most disappointing was retail sales, which showed a slight contraction year-to-date. Following discussions at the Central Economic Work Conference last week, authorities telegraphed that economic stability is their top priority for next year, and also stressed a pursuit of steady progress. The messaging was in line with recent signals from authorities, and confirms they’ll be focused on reviving poor domestic demand and encouraging an expansion of the private sector. This week we’ll continue to focus on covid news, albeit we will also keep an eye on monetary policy. China’s medium-term lending facility rate was kept unchanged last week, albeit the PBoC injected a net 150 billion yuan into the banking system via the facility (after we consider maturing loans). On Tuesday, we await the decision on 1- and 5-year loan prime rates, albeit no change is expected there. Economic Calendar (19/11/2022 – 23/12/2022) To stay up to date with our publications, please choose one of the below: 📩 Click here to receive the latest market updates👉 Our LinkedIn page for the latest news✍️ Our Blog page for other FX market reports 🔊 Stay up to date with our podcast FXTalk Read the article on Ebury
John Hardy to FXMAG: The UK economy faces significant head-winds from supply side limitations

John Hardy to FXMAG: The UK economy faces significant head-winds from supply side limitations

John Hardy John Hardy 19.12.2022 17:22
Christmas is near and the economic calendar looks quite unattractive, however, Bank of Japan decides on interest rate and in the UK, GDP is released. Naturally, in Japan an unchanged rate seems to be cemented, but it's still not sure what's ahead. In the UK market consensus points to a slight shrink of the economy and again it's about the near future. Today, we're happy to share John Hardy's (Saxo Bank) thoughts. Bank of Japan is bound to keep the rate unchanged this week, but it is said policy shift is near. Are you of the opinion doves may go away in the first quarter? John Hardy, Head of FX Strategy at Saxo Bank: The Bank of Japan will want to move very cautiously next year as it, and the government, hate when "excess" JPY volatility shakes markets and the outlook for Japan's large exporters. Current BoJ Governor Kuroda's term will end in April, just after the end of Japan's financial year on March 31, and he will not likely preside over any notable shift in policy. There is less pressure at the moment for the Bank of Japan to do anything at all, now that global yields have eased back significantly and the market is ignoring the Fed's latest hawkish forecasts for next year. If inflationary pressures are seen persisting after Kuroda's exit, the new leadership will inevitably have to move to tighten policy, but will try to do so in a slow controlled fashion, with as much pre-announcement of the steps it will take as possible to avoid significant volatility. JPY volatility risks will prove most significant if inflation remains higher than many expect next year, a scenario we think has a high risk, if probably beyond Q1. Read next: Ole Hansen: a scenario of much lower oil prices remain remote given the support from OPEC+ production cuts and the US beginning to buy back| FXMAG.COM UK economy is expected to decrease significantly, as we approach the end of the year how do you see the near future of the UK economy and what would BoE consider as a gauge ahead of next interest rate decision? John Hardy, Head of FX Strategy at Saxo Bank: The UK economy faces significant head-winds from supply side limitations (shortage of labor and high cost-of-living increases from Europe's energy crisis) and the outlook is made worse by the fiscal austerity from Sunak-Hunt after the chaos triggered by the Truss-Kwarteng "mini-budget". The Bank of England wants to slow down its hiking regime as it sees incoming economic weakness that will be made worse by government pulling spending. Generally, fiscal austerity and a slowdown in BoE tightening may lead to a weaker pound sterling.
BoE hawkishness didn't help pound sterling. Judging from experts' opinions the bank may get rid of hiking next year or slow down the process

BoE hawkishness didn't help pound sterling. Judging from experts' opinions the bank may get rid of hiking next year or slow down the process

InstaForex Analysis InstaForex Analysis 22.12.2022 20:58
The pound against the dollar follows the U.S. currency, while ignoring "own" fundamental factors. In general, the volatility in the currency market has noticeably decreased—even the USD/JPY pair, which fell 700 points at the beginning of the week, is now drifting in a relatively narrow price range. The pound sterling also does not show much activity, although last week, GBP/USD first updated the semi-annual high (1.2444) and then fell sharply, ending the five-day period at around 1.2119. Such a rapid 300-point price spurt occurred after the announcement of the results of the last meeting of the Bank of England this year. Even though the British regulator made hawkish decisions from the formal point of view (raising the interest rate by 50 points and indicating its further course for rate hike), the pound was not the beneficiary of the December meeting. Moreover, traders were skeptical about the declared course of the British regulator—according to some experts, the BoE will either slow down the pace of tightening monetary policy or take a break next year.     Such assumptions of a "dovish" nature did not appear out of nowhere. Analyzing the results of the December meeting, we can conclude that the emphasis in the rhetoric of the central bank members is gradually shifting towards the assessment of the side effects of monetary tightening. At the same time, the regulator made a separate note of the slowdown in inflation growth: inflation indicators are expected to continue gradually slowing down in the first quarter of next year. Overall, the tone of the BoE's final communique was less forceful than the rhetoric of the accompanying statements of the Fed, the European Central Bank and even the Swiss National Bank. However, these are subtle signals of a verbal nature. And quite probably, the scale at the December meeting would have tipped in favor of the pound, if not for one "but": two (of nine) members of the Monetary Policy Committee of the Bank of England voted against rate hike. Newly appointed (to replace Michael Saunders) Swati Dhingra, as well as Silvana Tenreyro, were in favor of keeping the interest rate at 3%. That, they said, is "more than enough" to bring inflation back to the target level. Also, representatives of the Committee's dovish wing stressed that there is currently no compelling reason to further increase the rate "for risk management reasons." Read next: Bitcoin enters the list of the most popular tickers on Yahoo Finance, report finds| FXMAG.COM And although the rest of their colleagues supported the next round of tightening monetary policy, the manifestation of "dissidence" alerted market participants. Previously, members of the Committee took unanimous decisions, so the lack of solidity (even in such a minimal manifestation) put pressure on the pound. At the same time, the actual split in the Committee was supplemented by rather cautious wording of the accompanying statement. That is why there was a stalemate situation on the GBP/USD pair. The Bank of England did not become an ally of the British currency, thus extinguishing the upward trend. But the bears need the strong dollar to increase the pressure on the pair. Meanwhile, the U.S. dollar index is fluctuating in a narrow range, waiting for the next information impulse. Friday's release of the PCE Core Index growth data may be that impulse. On the weekly chart, the GBP/USD pair updated a multi-year low at the end of September, reaching 1.0345. After that, the price turned 180 degrees and "walked" more than 2,000 points since then, marking the high of the year at 1.2444. According to a number of currency strategists, for buyers of GBP/USD this is a kind of ceiling that will not be overcome in the medium term. The Bank of England was the "last hope" for the pair's bulls, at least in the context of the current year. Today, the pound came under additional pressure after the release of data on the growth of the British economy for the third quarter. The final estimate was released today, which was unexpectedly revised downward. Thus, the UK economy shrank by 0.3% on a quarterly basis (initial estimate of -0.2%, as in the previous month). The market expected a decline of 0.2% in the reporting period. On an annualized basis, UK GDP grew by 1.9% in the third quarter. This component has been substantially revised downwards from an initial estimate of 2.4%. At the moment, it is advisable to take a wait-and-see attitude for the GBP/USD pair, given tomorrow's inflation release. Obviously, the pound is currently following the greenback, so the price dynamics in the medium term will be determined by this report. According to most analysts, the PCE index will fall to 4.6% in November. In this case, the indicator will update a multi-month low, reflecting the weakest growth rate since October 2021. In such a fundamental scenario, the dollar will be under pressure throughout the market, including in pair with the pound. But if the release comes out in the green zone, the back reaction of dollar bulls will follow: GBP/USD will consolidate under the 1.2000 key level, having determined for itself the next "round" and psychologically important target at 1.1900. Relevance up to 13:00 2022-12-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330556
The Cable Market (GBP/USD) Is Likely To Show Signs Of A Bullish Trend

GBP/USD - Lack of US data and US Redbook didn't support US dollar

FXStreet News FXStreet News 28.12.2022 16:34
GBP/USD is back above the 1.2100 figure, courtesy of the US Dollar weakness. China’s relaxing Covid-19 restrictions keep sentiment positive. GBP/USD> Testing the 20 and 200-DMAs, on its way toward 1.2200. The Pound Sterling advances sharply following a European choppy trading session, bouncing off the day’s lows around 1.2000, posing a challenge to the 1.2100 figure in the New York session. At the time of writing, the GBP/USD is trading at 1.2108. Improvement in sentiment weighs on the USD Investors’ mood is mixed amidst the North American session. The lack of US economic data, with the US Redbook released around 13:55 GMT, coming at 9.6% YoY, compared to the previous reading of 7.6%, failed to underpin the US Dollar (USD). Later at 15:00 GMT, US Pending Home Sales for November and the Richmond Fed Indices are expected to improve slightly compared to its previous readings. Another factor that improved traders’ sentiment is that China is removing Covid-19 restrictions on visitors while beginning to issue travel permits to Hong kong residents. Additionally, authorities started to issue passports and would officially reopen its borders on January 8. Even though the mood shifted positively, fears that inflationary pressures would rise keep traders wary. In the meantime, the US Dollar Index (DXY), a gauge of the buck’s value against a basket of peers, losses 0.28%, down at 103.984, undermined by falling US Treasury bond yields. Ahead into the week, the UK economic docket is empty, while the US calendar will feature Initial Jobless Claims for the week ending on December 23, ahead of the release of the Chicago PMI on Friday. GBP/USD Price Analysis: Technical outlook From the daily chart perspective, the GBP/USD is testing the 20 and 200-day Exponential Moving Average (EMA) at 1.2113 after bouncing from weekly lows around 1.2000. If the former is cleared, the nest resistance would be an upslope trendline previous support-shifted- resistance around 1.2180, followed by the 1.2200 figure. On the flip side, failure to stay above 1.2100 could pave the way toward weekly lows at 1.2000 and the 50-day EMA at 1.1935.
Banks intensify the squeeze on US growth prospects

West Texas Intermediate crude oil treads water. Gold goes up and down amid greenback's efforts to recover

Jing Ren Jing Ren 29.12.2022 08:40
GBPUSD seeks support The pound struggles as market sentiment remains cautious with thin liquidity. The pair is still looking to hold onto its gains after clearing last August’s high of 1.2280. Even though short-term buyers have bailed out, the psychological level of 1.2000 has seen an inflow of buying interests. But only a close above 1.2140 would signal confidence in Sterling and help turn the market mood around. 1.1190 is a critical level to keep the directional bias upward in the weeks to come, and its break could trigger a deeper correction. XAUUSD grinds rising trend line Bullion remains sideways as the US dollar attempts to claw back losses near year’s end. On the daily chart, the price has been inching up along the 20-day moving average. A rising trend line from early November also offers support to the price action on the hourly time frame. A pop above the recent double top (1823) indicates a strong bullish pressure, but a bounce off the congestion area (1795) formed by the trend line and the base of the bullish breakout is key in keeping the rally going, with 1850 as the next target. USOIL tests key resistance WTI crude steadies as Russia bans countries that abide by the Western price cap. On the daily chart, the commodity would remain in a downtrend unless it manages to break free of 82.00. A bearish RSI divergence suggests slowing momentum as the price tests this major supply area. The resistance-turned-support at 77.00 is the level to assess the strength of follow-through. Its break would make the price vulnerable to a new round of sell-off, possibly towards the recent low and psychological level of 70.00. Read next: The US Will Require PCR Testing For Travelers From China, BRF Agree To Pay $111 Million To The Government| FXMAG.COM
USDX Will Try To Test And Break Below The 103.50 Level

Forex: Trading British pound to US dollar pair during American session

InstaForex Analysis InstaForex Analysis 29.12.2022 16:28
I focused on the 1.2050 level in my morning forecast and suggested making decisions about entering the market there. Let's analyze the 5-minute chart to determine what transpired there. A false breakdown that developed at 1.2050 grew and formed, producing a strong sell signal. The downward movement, as a result, was about 25 points, and the pressure on the pair is still present. Technically speaking, the second half of the day has not seen any changes.     You require the following to open long positions on the GBP/USD: Data on unemployment benefit applications in the US are released during the US session, which could cause a brief increase in market volatility - particularly if the data come in worse than expected, which would weaken the US dollar's position, but only temporarily. With favorable news, it is best to watch for a decline in the pair and a potential false breakdown in the 1.1994 support level, which corresponds to the December low. This will result in a buy signal and enable you to return above 1.2050 because it will show that there are significant buyers in the market. We can anticipate a sharper upward jerk and an update to the level of 1.2111, from where the pound was actively sold yesterday, if there is a breakthrough and consolidation above this range. The growth prospects at 1.2183, where I advise fixing profits, will be opened up by an exit above 1.2111 with a comparable test. The bulls' pressure on the pair will increase significantly if they are unable to complete the tasks assigned to them and miss 1.1994 in the afternoon. This will cause the demolition of the stop orders placed below by buyers. Because of this, I suggest that you hold off on making any purchases and instead open long positions on a decline and a false breakdown close to the minimum of 1.1949. I advise purchasing GBP/USD right away in anticipation of a recovery from 1.1904 to gain 30-35 points in a single day. For opening short positions on the GBP/USD, you will need: The bears clearly stated that they are nearby at 1.2050 and that they expect to continue guarding this area. While trading will take place below this range, the main objective is to keep the pair below 1.2050. However, sellers have a good chance of breaking through the December lows. In the present scenario, it would be best to hold off on making any new sales until a false breakdown forms in the region of 1.2050, which will be another strong sell signal in anticipation of a resumption of the bear market and a sustained decline to a minimum of 1.1994. Only a breakout and a reverse test of this range from the bottom up will provide an entry point to sell with a move to 1.1949 and the potential for updating 1.1904, where I advise fixing profits. Nothing terrible will occur, but the pressure on the pound will lessen due to the possibility of GBP/USD growth and the lack of bears at 1.2050. In this case, the only entry point into short positions to move down is a false breakout in the vicinity of 1.2111. If there is no activity there, I advise you to sell GBP/USD right away at the highest price of 1.2183, but only if you are counting on the pair to fall back by 30-35 points during the day.     There were more long positions and fewer short ones in the COT report (Commitment of Traders) for December 20. It was made clear after important central bank meetings that regulators would keep raising interest rates and tightening monetary policy, which by all logic should increase demand for national currencies, including the British pound. The report makes it clear exactly how things stand. However, traders are unlikely to continue buying the pound with the same zeal in January, given that GDP data for the UK's third quarter were revised in the direction of a larger decrease, and the start of the recession is not an expectation for next year, but rather a reality this year. According to the most recent COT report, long non-commercial positions increased by 3,276 to a level of 35,284 while short non-commercial positions decreased by 16,860 to a level of 40,887. As a result, the non-commercial net position's negative value decreased to -5,603 from -25,739 the previous week. In comparison with 1.2377, the weekly closing price dropped to 1.2177.     Signals from indicators Moveable Averages The fact that trading occurs around the 30 and 50-day moving averages suggests that the market is lateral. Notably, the author considers the period and prices of moving averages on the hourly chart H1 and departs from the standard definition of the traditional daily moving averages on the daily chart D1. Bands by Bollinger The indicator's lower limit, which is located around 1.010, will serve as support in the event of a decline. Description of indicators Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow. Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green. MACD indicator (Moving Average Convergence / Divergence - moving average convergence/divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-profit speculative traders, such as individual traders, hedge funds, and large institutions use the futures market for speculative purposes and to meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between the short and long positions of non-commercial traders. Relevance up to 13:00 2022-12-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331116
The Pound Is Now Openly Enjoying A Favorable Moment

Technical analysis - British pound to US dollar - December 29th

InstaForex Analysis InstaForex Analysis 29.12.2022 23:18
  Pound price prediction : Remember that the GBP/USD pair is in donwtrend since a week! so, the GBP/USD pai is really a great fortune. Hence, our target 1.1991 in the next two days. Today, the GBP/USD pair is trading below the weekly pivot point 1.2099. Because the GBP/USD pair broke support which turned to a minor resistance at the price of 1.2099 last week in 2022. The price of 1.2099 is expected to act as major resistance in the first week of December 2022. As long as there is no daily close below 1.2099, there are no chances of a fresh increase below 1.2099 (R1) in the H1 time frame. The support levels will be placed at the prices of 1.2099 and 1.1950. As long as there is no daily close below 1.2099, there are chances of breaking the bottom of 1.1950. The volatility is very high for that the the GBP/USD pair is still moving between 1.2099 and 1.1950 in coming hours. As a result, the market is likely to show signs of a bullish trend again. Hence, it will be good to sell below the level of 1.2099 with the first target at 1.1950 and further to 1.1900 in order to test the weekly last bearish wave. However, if the GBP/USD is able to break out the daily resistance at 1.2099, the market will rise further to 1.2164 to approach resistance 2 in coming days. Daily Forecast : Pivot Point : $22,462. Forecast : According to the previous events the price is expected to remain between 1.2099 and 1.1991 levels. Sell-deals are recommended below 1.2099 with the first target seen at 1.1950. The movement is likely to resume to the point 1.1950 and further to the point 1.1950. Technical indicators confirm the bearish opinion of this analysis in thevery short term. However, be careful of excessive bearish movements. It is appropriate to continue watching any excessive bearish movements or scanner detections which might lead to a small bullish correction. From this point, the pair is likely to begin a descending movement to the point of 1.1991 and further to the level of 1.1950. The level of 1.1900 will act as strong support and the double bottom is already set at the point of 1.1950. This would suggest a bearish market because the RSI indicator is still in a negative area and does not show any trend-reversal signs. The pair is expected to drop lower towards at least 1.1950 in order to test the second support (1.1900). On the other hand, if the EUR/USD pair fails to break through the first support of 1.1950 today, the market will move upwards continuing the development of the bullish trend to the level 1.2218 (double top). Relevance up to 20:00 2022-12-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306791
Eurozone inflation may reach less than 10% for the first time since Summer

Japanese yen feels better amid raised Japan's inflation prediction, Euro gains on the back of Lagarde's suggestion

Jing Ren Jing Ren 02.01.2023 08:29
USDJPY tests critical floor The Japanese yen rallies as the BOJ considers raising its inflation forecast. The dollar’s rebound came to a halt at a previous low (134.50) from early December, which has turned into resistance. Sentiment remains downbeat after the greenback gave up all the gains. 130.50 is a major level to see whether the buy side will be strong enough to contain the fall. A bearish breakout would pave the way for a slide to 127.00. The RSI’s oversold condition may attract some bargain hunters and 133.00 would be the first hurdle to test. EURGBP breaks higher The euro strengthened after ECB President Lagarde hinted at more tightening to cap wage growth. A bullish MA cross on the daily chart confirms the pair's recovery. A break above October’s high of 0.8860 might have put the euro on a fast track towards this year’s high above 0.9100. 0.8900 is the next resistance and 0.8970 at the start of a sell-off in September the last obstacle. An overbought RSI may trigger a limited pullback which could attract bids from trend-followers. Between 0.8820 and 0.8790 lies an important demand zone. Read next: Croatia introduces Euro – what are experts' approaches?| FXMAG.COM GER 40 remains under pressure The Dax 40 drifts lower as investors dread more aggressive moves from central banks. On the daily chart, after hitting last June’s peak of 14700, a bearish MA cross could foreshadow a deeper correction. Zooming into the hourly chart, the horizontal consolidation is a sign of momentary hesitation. 14150 at the top of the latest bounce coincides with the 20-day moving average and a failure to break higher by the bulls would mean that the path of least resistance would be down. 13850 is the immediate support.
Euro's Rally Stalls as Focus Turns to Inflation and Data Disappointments

What can we expect from GBP/USD in January? Technical analysis by Stefan Doll

InstaForex Analysis InstaForex Analysis 02.01.2023 15:01
trend analysis: This January, GBP/USD will probably attempt to pull back first from 1.2092 (closing of December monthly candlestick) to the 23.6% retracement level at 1.1946 (yellow dashed line), then continue its upward movement towards the 61.8% retracement level at 1.2748 ( red dotted line). Another rebound may occur after the latter is tested.     Fig. 1 (monthly chart) Comprehensive analysis: Indicator analysis - downrend Fibonacci levels - downtrend Volumes - uptrend Candlestick analysis - downrend Trend analysis - uptrend Bollinger bands - uptrend All this points to an upward movement in GBP/USD. Conclusion: The pair will have a bearish trend with no first upper shadow on the monthly black candle (the first week of the month is black) and a second lower shadow (the last week is white). Throughout the month, pound will go down from 1.2092 (closing of December monthly candlestick) to the 23.6% retracement level at 1.1946 (yellow dashed line), then continue its upward movement towards the 61.8% retracement level at 1.2748 (red dotted line). Another rebound may occur after the level is tested. Alternatively, the pair could immediately rise from 1.2092 (closing of December monthly candlestick) to the 61.8% retracement level at 1.2748 (red dotted line), followed by a decline. Relevance up to 13:00 2023-01-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331305
British pound against US dollar on January 2nd, Stefan Doll takes a technical look

British pound against US dollar on January 2nd, Stefan Doll takes a technical look

InstaForex Analysis InstaForex Analysis 02.01.2023 15:17
Trend analysis (Fig. 1) GBP/USD may start moving down on Monday, starting from the closing of Friday's daily candle at 1.2092 to the lower fractal at 1.2008 (daily candle from 12/30/2022). If this level is tested, the pair will resume rising towards the historical resistance level of 1.2213 (blue dotted line), then fall down again.     Fig. 1 (daily chart) Comprehensive analysis: Indicator analysis - downtrend Fibonacci levels - downtrend Volumes - uptrend Candlestick analysis - uptrend Trend analysis - uptrend Bollinger bands - uptrend Weekly chart - uptrend Conclusion: GBP/USD will fall from 1.2092 (closing of Friday's daily candle) to the lower fractal at 1.2008 (daily candle from 12/30/2022), rebound to the historical resistance level of 1.2213 (blue dotted line), then move down again. Alternatively, the pair could rise from 1.2092 (closing of Friday's daily candle) to the upper fractal at 1.2124 (daily candle from 12/28/2022), then bounce down to the support line at 1.2065 (thick white line). Upward movement may resume after testing the level. Relevance up to 07:00 2023-01-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331263
British pound to US dollar - trend analysis and what can we expect this week

British pound to US dollar - trend analysis and what can we expect this week

InstaForex Analysis InstaForex Analysis 02.01.2023 22:20
Trend analysis This week, the price may continue to rise with a target of 1.2445 (the upper fractal) from the level of 1.2092 (the close of the last weekly candle). When testing this level, it is possible to advance with 1.2600 as the target, a 76.6% retreat level. Fig. 1 (weekly chart). A comprehensive analysis - Indicator analysis – up; - Fibonacci levels – up; - Volumes – up; - Candle analysis – up; - Trend analysis – up; - Bollinger lines –up; - Monthly chart – up. The sophisticated analysis has an upward movement as its conclusion. The first lower shadow of the weekly white candle (Monday - down) and the existence of the second upper shadow indicate that the price for the next weeks is likely to have an upward trend. This is the overall result of calculating the candle of the GBP/USD currency pair on a weekly chart. Price may continue to rise from the level of 1.2092 (close to the previous weekly candle), with the upper fractal objective of 1.2445 as the endpoint. When testing this level, it is possible to advance with 1.2600 as the target - a 76.6% retreat level. Alternative scenario: The price may continue to rise with a target of 1.2445, the upper fractal, from the level of 1.2092 (close of the last weekly candle). When the price tests this level, a pullback movement downward with a target of 1.2138 - a pullback level of 14.6% - is possible. Relevance up to 10:00 2023-01-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331291
Forex: British pound against US dollar - technical analysis - January 2nd

Forex: British pound against US dollar - technical analysis - January 2nd

InstaForex Analysis InstaForex Analysis 02.01.2023 22:39
Overview : The GBP/USD pair broke resistance, which turned into strong support at 1.1991. Right now, the pair is trading above this level. It is likely to trade in a higher range as long as it remains above the support (1.1991), which is expected to act as a major support today. Therefore, there is a possibility that the GBP/USD pair will move upwards and the structure does not look corrective. The trend is still below the 100 EMA for that the bullish outlook remains the same as long as the 100 EMA is headed to the upside. From this point of view, the first resistance level is seen at 1.2077 followed by 1.2163, while daily support 1 is seen at 1.1991 (last bearish wave - 00% Fibonacci retracement). According to the previous events, the GBP/USD pair is still moving between the levels of 1.1991 and 1.2163; so we expect a range of 172 pips. Consequently, buy above the level of 1.1991 with the first target at 1.2077 so as to test the daily resistance 1 and further to 1.2100. Besides, the level of 1.2163 is a good place to take profit because it will form a double top. On the contrary, in case a reversal takes place and the GBP/USD pair breaks through the support level of 1.1991, a further decline to 1.1949 can occur, which would indicate a bearish market. Overall, we still prefer the bullish scenario, which suggests that the pair will stay above the zone of 1.1991 - 1.1949 in coming three days. In the same time frame, resistance is seen at the levels of 1.1991 - 1.1949. The stop loss should always be taken into account for that it will be reasonable to set your stop loss at the level of 1.1949 (below the support 2). Forecast: - The market opens above the daily pivot point. It continues to move downwards to hit the daily pivot point. Consequently, buy at the daily pivot point (1.2040). - Take profit: It should set take profit at R1 (1.2077), R2 (1.2100) and R3 (1.2163) .The previous range was large (185pips). - Stop loss: Stop loss should set depending on the money management. In this case, we prefer setting the stop loss depending this formula <=> Take profit = 3/2 x Stop loss. Thus, if a breakout happens at the support level of 1.1949, then this scenario may be invalidated. Relevance up to 21:00 2023-01-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307071
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

British pound against US dollar - technical analysis for January 3rd. What can we expect from GBP/USD?

InstaForex Analysis InstaForex Analysis 03.01.2023 21:07
Overview : The EUR/USD pair faced resistance at the level of 1.2077, while minor resistance is seen at 1.1991. Support is found at the levels of 1.1904 and 1.1841. Pivot point has already been set at the level of 1.2077. Equally important, the EUR/USD pair is still moving around the key level at 1.2077, which represents a daily pivot in the H1 time frame at the moment. Yesterday, the EUR/USD pair continued moving upwards from the level of 1.2077. The pair rose to the top around 1.2077 from the level of 1.1904 (coincides with the last bearish wave at the same time frame). Right now, the pair is trading above this level. It is likely to trade in a higher range as long as it remains above the support (1.1904), which is expected to act as a major support today. Therefore, there is a possibility that the EUR/USD pair will move upwards and the structure does not look corrective. Read next: Eurodollar: dominance of hawkishness in tomorrow's Fed minutes may support greenback| FXMAG.COM The trend is still below the 100 EMA for that the bullish outlook remains the same as long as the 100 EMA is headed to the upside. In consequence, the EUR/USD pair broke resistance, which turned into strong support at the level of 1.1904. The level of 0.6695 is expected to act as the major support today. We expect the EUR/USD pair to continue moving in the bullish trend towards the target level of 1.2163. On the downtrend: If the pair fails to pass through the level of 1.1904, the market will indicate a bearish opportunity below the level of 1.1904. So, the market will decline further to 1.1840 and 1.1904 to return to the daily support. Moreover, a breakout of that target will move the pair further downwards to 1.1840. On the other hand, if a breakout happens at the support level of 1.1803, then this scenario may be invalidated. Relevance up to 20:00 2023-01-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Read more: https://www.instaforex.eu/forex_analysis/307232
The Data May Keep The British Pound (GBP) From Rising

According to Samir Klishi, US dollar may be rising this week

InstaForex Analysis InstaForex Analysis 04.01.2023 16:19
According to the hourly chart, the GBP/USD pair performed a reversal in favor of the US dollar on Tuesday and a powerful fall toward the level of 1.1883. Within a few hours, the British pound had already seen a reversal and had returned to the 1.2007 level. The pair is currently attempting to regain control of 1.2007. If this occurs, the growth process may continue in the direction of the corrective level of 127.2% (1.2111). The increase in quotes since 1.2007 will help to restart the decline in the direction of 1.1883. The first aspect of yesterday to consider is the motion in various directions. The British pound fluctuated throughout the day, rising and falling, and at the time of writing, it is only 20 points away from its opening position from the previous day. Trading was therefore highly active yesterday, but neither the dollar nor the pound gained significantly. Although yesterday's information background was quite thin, traders have already started practicing trading during the Friday release of significant numbers. The two wavered, emerged from the side passage, and are now only able to move vertically but in a specific direction. Read next: Bitcoin: As for the price levels, one should pay attention to the level of $18,000 that has been recently hit. Probably, this level may well serve a starting point for buyers in case the price holds above it on a daily chart | FXMAG.COM Another point I'd like to bring up is the FOMC protocol, which may provide some insight into how high US interest rates will eventually be. Numerous economists now anticipate that the likelihood of a sharper tightening of monetary policy will rise to 5.50–5.75% during the coming weeks. This, in my opinion, is what supports the US dollar. The dollar may restart growth if the Fed minutes confirm the "hawkish" assumptions. Everything on Friday will depend on information about the US labor market and unemployment. Bear traders will be helped by strong reports. I'd think there's a good probability the dollar will keep rising this week. The pair closed under the upward trend corridor and consolidated under the 1.2008 level on the 4-hour chart. Since traders' sentiment is currently turning "bearish," I believe the consolidation of quotes under the upward trend corridor to be the most crucial phase. Now, it is possible to continue the price decline in the direction of the Fibo level of 161.8% (1.1709). Divergences that are maturing are not seen in any indication. Report on Commitments of Traders (COT): The sentiment among traders in the "non-commercial" category over the last week has shifted more "bearish" than it did the week before. The number of short contracts increased by 10,585 units, while the number of long contracts held by investors increased by 5,301 units. However, the major players' overall outlook is still "bearish," and there are still more short-term contracts than long-term contracts. However, during the past few months, a significant change has taken place, and presently there is not a significant disparity between the amount of long and short positions held by speculators. There was a threefold change a few months ago. As a result, the pound's chances have greatly improved recently. However, given that the 4-hour chart crossed above the three-month ascending corridor, the British pound may soon continue to decline. The following is the UK and US news calendar: United States - ISM manufacturing sector business activity index United States - FOMC protocol There are no noteworthy events scheduled for Wednesday in the UK or the US. The background information's impact on today's traders' attitudes will be minimal. GBP/USD forecast and trading suggestions: In the event of a new close at the 1.2007 level with a target of 1.1883, I advise selling the pound. When the British pound is locked above the 1.2007 level on the hourly chart, it will be possible to buy it with a target of 1.2111. Relevance up to 11:00 2023-01-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331445
Beyonce Bounce and Soaring UK Inflation: A Challenge for Bank of England

Great Britain: According to BRC, food inflation reached 13.3% in December

Kenny Fisher Kenny Fisher 04.01.2023 22:54
The British pound has bounced back on Wednesday and recorded sharp gains. In the European session, GBP/USD is trading at 1.2055, up 0.74%. Food inflation jumps Ask any British consumer, and they’ll tell you that food prices have been going through the roof. The BRC provided data in that regard, stating that food inflation hit a record 13.3% in December, up from 12.4% in November. The BRC put the blame on the Ukraine war, which has resulted in higher prices for energy and raw materials. With the war dragging on and no end in sight, we’re unlikely to see a drop in food prices anytime soon. High inflation and more expensive mortgage payments have squeezed British households, which have been hit by the worst cost-of-living crisis the UK has experienced in years. The OBR projected in November that real household disposable income would fall by 4.3% in 2022-2023. The rise in inflation has been accompanied by weak growth, and the UK is likely already in a recession. Goldman Sachs has forecasted the GDP will contract by 1.2% in 2023, the worst among the G-10 major economies. This is only marginally better than the forecast for Russia, with GDP expected to decline by 1.3%. The Bank of England has been focussed on inflation and raised rates by 50 basis points to 3.5% in December. Inflation eased to 10.7% in December, down from 11.1% in November, which marked a 41-year high. The BoE would prefer not to tighten in such a weak economic environment but has argued that it would be worse to allow inflation to remain at high levels. All signs indicate that the BoE will continue to raise rates in early 2023, starting at the February 2nd meeting. Read next: Exxon And Chevron Abandon The Global Market And Focus On The Americas| FXMAG.COM In the US, investors will have two key events to digest later today. ISM Manufacturing PMI fell into contraction territory in November for the first time since May 2020, with a reading of 49.0 points. Another weak reading is expected for December, with a forecast of 48.5 points. The 50.0 threshold separates contraction from expansion. The Federal Reserve will release the minutes from its December meeting. At the meeting, Fed Chair Powell sent a hawkish message that interest rates could continue to rise and poured cold water on a dovish pivot. Investors will be looking for clues as to interest rate policy in 2023 and its outlook for the US economy. GBP/USD Technical GBP/USD has support at 1.1949 and 1.1846 There is resistance at 1.2095 and 1.2198 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. GBP/USD pushes above 1.20 - MarketPulseMarketPulse
The Pound Is Now Openly Enjoying A Favorable Moment

Forex: According to InstaForex's Irina Manzenko, greenback will be in charge of shaping the GBP/USD pair

InstaForex Analysis InstaForex Analysis 05.01.2023 23:52
The pound and the dollar fluctuate gently in a range of 100 points, starting alternatively from the price corridor's edges. Sellers and buyers of GBP/USD are engaged in a heated battle within this level; the former is attempting to keep the price within the 20th figure, while the latter is attempting to push the price down to the base of the 19th price level. And it is clear from the outcomes of the conflict, which lasted almost three weeks, that no one has emerged victorious. The price of the pair is still fluctuating between 1.1945 and 1.2050, occasionally going above its limits depending on the circumstances. However, sellers cannot fall to the goal of 1.1900 and purchasers cannot achieve the mark of 1.2100 at the same moment.   The pre-vacation season is not the sole cause of the slowdown among GBP/USD traders. Since the buyers of the pair gave up their goals in the middle of December, following the publication of the outcomes of the Bank of England's final meeting in 2022, the "dead season" only indirectly affected this situation. It is important to highlight that the English regulator carried out the fundamental scenario by taking a hawkish stance. The Central Bank increased the interest rate by 50 basis points while also signaling a future increase in the rate. However, most market participants expressed skepticism over the rate announced by the British Central Bank; several analysts predict that the Bank of England would either lower the pace of tightening monetary policy in 2023 or stop completely. Many currency strategists concluded after analyzing the minutes of the December meeting that the regulator had moved the focus of its speech to evaluate the dangers and negative effects of tightening the PEPP. Also brought to light is the fact that the Central Bank mentioned the slowing in inflationary increase in a "different line." The first quarter of 2023 will see a slowdown in inflation indices, according to economists at the Central Bank. The fact that two (out of nine) members of the Monetary Policy Committee voted against hiking the rate further put additional pressure on the pound. They demanded that it be kept at three percent because, in their words, it would be "more than enough" to bring inflation back to the desired level. In other words, while publicly implementing a fundamental, hawkish scenario at the December meeting, the British regulator did not turn into a supporter of the pound. The GBP/USD pair reached the six-month price limit on the night of the December meeting, reaching 1.2444. Since September 2022, specifically, when the pound fell to the 1.0345 level due to the budget crisis and political unrest, the price has been steadily rising for several months. The pound has gained more than 2000 points in just 3.5 months, demonstrating its aspirations to reach the 25th position. However, the paradoxical outcomes of the British Central Bank's most recent meeting in 2022 confounded everything: the GBP/USD pair initially dropped by about 400 points, but then became trapped on the cusp of 19 and 20 figures. I believe that the dollar, whose "well-being" will depend on the dynamics of important US macroeconomic data, will determine the future course of the pair in the medium run. Such a disposition puts Non-farm, which will be released tomorrow, January 6, front and center. Preliminary predictions state that the overall trend of the December indicators should be similar to that of the November ones. The unemployment rate should stay at 3.7%, and 210 thousand more individuals should find work in non-agricultural sectors (an increase of 263 thousand was recorded in November). Salary indicators should follow the release's trajectory (+5.0% y/y, 5.1% in November) as well. The GBP/USD bears may attempt to penetrate the defense near the 1.1950 level and move to the base of the 19th figure if the report is released in the green zone. In all other scenarios, the pair is likely to keep drifting along the corridor stated above as it gets closer to its upper border (a temporary breakthrough to the 1.2070 mark is not excluded). The British pound currently lacks "own" justifications for continuing the northern movement. The GBP/USD northern trend was halted by the actual split in the Central Bank Committee and the statement's cautious phrasing. The dollar, which is currently in standby mode, is now in charge of the initiative. Technically speaking, the pair is situated above the Kumo cloud on the daily chart, between the middle and lower lines of the Bollinger Bands indicator, and simultaneously between the Tenkan-sen and Kijun-sen lines. In other words, the method lacks any obvious cues, necessitating a wait-and-see attitude. The 1.1950 level (the actual boundary of the three-week price range) is the closest level of support, and the 1.1900 goal is the key price barrier (the upper border of the Kumo cloud coinciding with the lower line of the Bollinger Bands indicator on D1). The number 1.2100 serves as the resistance level (the average line of the Bollinger Bands on the same timeframe). However, 1.2070 has been the actual price ceiling for the past approximately three weeks. Relevance up to 14:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331563
FX Daily: Euro’s attractiveness on the rise

2023 Predictions: Euro could trade back below parity at some point during the first half versus the USD, but may firm up later in the year once the Fed is eventually seen as beginning to soften its own stance

John Hardy John Hardy 03.01.2023 13:49
We're pleased to deliver our readers with 2023 predictions for currencies and Forex prepared by John J. Hardy, Head of FX Strategy at Saxo Bank. Let's take a look at his views on euro, pound and more. What do you expect from euro and pound in 2023? We ended 2022 with the euro riding high on the ECB's late-to-the-game hawkishness at the December 15 ECB meeting. But 2023 will see the ECB having a hard time delivering as much as the market is now expecting without getting aggravating peripheral spreads and bringing into question the degree to which the ECB can really achieve meaningful quantitative tightening, much less hiking the rate beyond perhaps 3.00%. Euro could trade back below parity at some point during the first half versus the US dollar, but may firm up later in the year once the Fed is eventually seen as beginning to soften its own stance as a recession is likely on the way in late 2023 or early 2024 (later than the market expects - data could prove far more resilient from the US than the market expects for much of this year). The outlook for the UK is far weaker due to the austerity programme of the new Sunak-Hunt government, so a meaningful weakening in sterling is a risk for the first half of the year in particular. One huge uncertainty in general and in particular for Europe is the price of oil and especially natural gas and the availability heading into next winter as the Russia-Ukraine war grinds on and with Chinese demand returning as it will fully open up its economy after the Chinese New Year, after which the Covid outbreak there will have hopefully largely run its course. What can we expect from EUR/USD, CHF/USD, USD/JPY, CNY/USD? What macroeconomic and geopolitical factors will be crucial for currencies in 2023? Some of these are mentioned above: the return of Chinese demand post Lunar New Year (early this year on January 23) and post-Covid impacts, the energy situation and war in Europe, and in the US, whether we see a more resilient US economy and stickier inflation from a tight jobs market than the market expects, with recession there coming far later than currently anticipated (as late as early 2024). This could mean far higher yields and another round of US dollar strength before  the Fed can afford to ease up on its tightening regime. So while the US dollar may end the year a bit lower, there may be room for another significant rally in the first half of the year and plenty of volatility. Read next: 2023 Predictions: Peter Garnry - Our target for S&P 500 is still around the 3,200 level sometime during the year leading to an overall drawdown of around 33% from the peak in early 2022 | FXMAG.COM What macroeconomic and geopolitical factors will be crucial for the dollar in 2023? US-China relations, Another random issue that will presumably be resolved before too much damage is done, but needs watching, is the "debt ceiling" issue in the US, which will be reached sometime in the spring/early summer time frame and must be raised to allow orderly functioning of US treasury markets and even the US economy ultimately.
Bank of England raised the interest rate for the 12th meeting in a row

Euro could perform better-than-expected thanks to less severe energy crisis

Matthew Ryan Matthew Ryan 09.01.2023 20:59
Last week brought some relief on the inflation front on both sides of the Atlantic. In Europe, energy prices fell more than expected in December. In the US, wage increases appeared to moderate. In response, interest rates fell, and risk assets started the year on the right foot, rallying across the board. G10 currencies were mixed, but emerging market ones took their cue from investor’s optimism and rallied hard, led by Asian and Latin American ones. The Thai baht topped the charts last week, as its tourism sector is expected to be a strong beneficiary of the end of zero-COVID policies in China.   Attention this week turns to the all important CPI inflation report in the US, out on Thursday. Market optimism that the peak of inflation is behind us leaves little room for error here. Strategists and economists are mostly revising upwards their forecasts for the euro on the back of a sense that the impact of the energy crisis will be less than expected and that any recession there will be short and shallow – which has been our view throughout. UK monthly GDP figures for November and a slate of major central bank speakers, led by Fed chair Powell on Tuesday, will round out the week’s events. Figure 1: G10 FX Performance Tracker [base: USD] (1 week) Source: Refinitiv Datastream Date: 09/01/2023 GBP Sterling had an unremarkable start of the year, but still managed to put in a decent performance near the top of the G10 performance rankings. The pound is now viewed as a risk asset and was buoyed modestly by strong markets. This week, the November GDP data stands out as we look for confirmation that the UK is in a mild recession. Consensus expectations are for a 0.3% shrinkage in economic output, but these economist forecasts have tended to be overly pessimistic in the past few months. Sentiment around the UK economy is quite bearish and a positive surprise here could lead to a significant sterling rally, in our view.   EUR Sentiment surrounding the Eurozone economy has improved remarkably over the past few weeks, on the back of a mild winter, lower energy prices and what looks to be a meaningful improvement in headline inflation. We caution against reading too much into last week’s inflation surprise. It was caused by direct state intervention on electricity prices, particularly in Germany and Spain, rather than a meaningful rebalancing between supply and demand. The more persistent core inflation number continues to increase and there is no sign that it has reached a peak yet. ECB officials seem to agree with us, and the tone of their communications is much more hawkish than is suggested by current market pricing of future rate increases. We maintain a positive view of the common currency based on our expectations of higher terminal rates from the ECB. Figure 2: Euro Area Inflation Rate (2013 – 2022) Source: Refinitiv Datastream Date: 09/01/2023 USD The US labour market report for December must have been pleasing to the Federal Reserve, as it was neither too hot nor too cold. Jobs continue to be created at a steady though moderating pace, and while unemployment remained near its lows, wage increases seemed to cool. Overall, the numbers are consistent with moderating inflation as well as a growing economy. In other words, a soft landing. The signs that inflation may have peaked for the short-term are more convincing in the US than in Europe, but the Fed shares the ECB’s healthy scepticism and commentary from FOMC officials remains hawkish. The dollar seems unsure of where to go, weighed down by optimism on inflation but supported by the tone of the Fed’s communications. The upcoming inflation report should provide some clarity. Figure 3: US Average Hourly Earnings [% MoM] (2021 – 2022) Source: Refinitiv Datastream Date: 09/01/2023 JPY The yen put in a middling performance during the first trading week of 2023. The Japanese currency was actually one of the better performers in the world in the final couple of weeks of last year, as the Bank of Japan delivered a dramatic U-turn on its monetary policy stance. The BoJ, which was undoubtedly the most dovish central bank in the G10 in 2022, unexpectedly lifted the upper limit of its cap on 10-year government bonds from 0.25% to 0.50% during its 20th December meeting, triggering the largest upward move in Japanese bonds since 2003. CHF The Swiss franc traded within a narrow range against the euro last week, ending it around the middle of the G10 currency performance dashboard. Mirroring the Eurozone, Swiss inflation fell in December, surprising to the downside. A decline to 2.8% from 3% is a welcome sign, but the inflation fight in Switzerland is not yet over. Core inflation remains uncomfortably high and, surprisingly, trended in the opposite direction to the headline number, increasing back to 2% from 1.9% in the previous month. Moreover, January may see an increase in the headline rate itself, as utility providers adjust prices. We are pencilling in another interest rate hike from the SNB in March, albeit the size of the move and possibility that this could be the end of the hike cycle are not yet set in stone. In this context, we’ll keep an eye on upcoming data from Switzerland, especially inflation prints for January and February. This week’s calendar, however, is largely empty, therefore, the attention should be on outside news. AUD The Australian dollar was the best performer in the G10 last week, largely a consequence of the growing optimism surrounding the Chinese economy. China effectively ended its zero-covid strategy in December, which has been a clear bullish signal for the economic areas heavily reliant on trade or tourism flows from Asia’s largest economy. After a two year ban, reports that China is considering resuming imports of Australian coal have also buyed AUD, which opened trading this morning above the $0.69 level and its strongest position since August. A number of data releases are on the docket in Australia this week, which may lead to a rather volatile few days for the dollar. We will be paying closest attention to the November inflation and retail sales data (both on Wednesday). Stronger prints here should support AUD, and would support our view of an outperformance in the Australian economy relative to expectations. Figure 4: Canada Net Employment Change (2022) NZD We witnessed another underperformance in NZD relative to its Australian counterpart last week, which has been a theme since mid-December. News of China’s reopening is a highly positive development for the New Zealand economy, which relies on the country for more than one-quarter of its overall export revenue, though the New Zealand dollar has struggled to post any meaningful gains since zero-covid was abandoned. While a previous outperformance may partly be to blame, we are somewhat surprised we’ve not seen a more significant rally. This week is light on data in New Zealand, with consumer confidence data on Tuesday the only real data release of any note. With that in mind, we suspect that NZD will be driven by events elsewhere. CAD Aside from the Japanese yen, CAD has been the best performing currency in the G10 in the past month. This may partly be due to valuation, as the Canadian currency underperformed most of its peers in the second half of last year. Global oil prices have also stabilised in the past few weeks, while economic data has held up reasonably well in Canada, opening the door to an additional rate hike from the Bank of Canada at either its January or March meetings. Last week’s strong labour report supported the view that further tightening may be on the way. A further 104k net jobs were added in December, well above the 8k expected, while the unemployment rate also dropped to 5% from 5.1%. This is a scorchingly hot report, and we now think that another hike at some point in Q1 is more likely than not. Figure 4: Canada Net Employment Change (2022) Source: Refinitiv Datastream Date: 09/01/2023 SEK In a shorter-than-usual trading week in Sweden, with no major economic data releases, the krona ended the week lower against the euro, with the EUR/SEK pair trading around the 11.2 level. Better-than-expected eurozone data pushed EUR/SEK to trade at its highest level since 2020 at the end of last week, although the krona has since recovered some of its losses. Inflation data for December will be released this Friday. The inflation rate is expected to fall back slightly from the previous month, but a higher than expected number could boost the krona, as it would support our argument that the Riksbank will likely need to keep raising interest rates in the coming meetings in order to bring down high inflation. NOK With no major economic news out in Norway last week, NOK was driven largely by events elsewhere. In line with the Swedish krona, the Norwegian krone ended the week lower against the euro, with the pair EUR/NOK trading around the 10.6 level. We were slightly surprised by the underperformance of NOK last week, which ended at the bottom of the G10 performance tracker. News of China’s reopening should be supporting global oil prices, and the krona, though this doesn’t yet appear to be fully reflected in the value of the commodity. Norwegian inflation data for December will be released on Tuesday. The headline print is expected to increase from the previous month, which may support the view that Norges bank still has some way to go in its fight against inflation. In addition, the recent slight rebound in oil prices may also offer some support to the Norwegian currency. CNY The Chinese yuan rallied by approximately 1% against the US dollar last week and jumped even more in trade-weighted terms. While this can partly be attributed to improving risk sentiment, we have little doubt that China’s reopening is leading to a change in investors’ approach toward the currency. The latest PMI data from China confirmed that business activity was muted in December. With the country expected to deal with additional waves of covid in the first quarter of 2023, we’ll likely need to wait sometime until the economy picks up again. Yesterday’s easing in travel rules is, however, supporting optimism as it appears to be a final nail in the coffin of the zero-covid policy. Looking ahead, we’ll keep an eye on the CPI and PPI data for December, out on Thursday. Early next week, the PBoC will set the rate on the one-year medium-term lending facility (MLF). A change there would be a surprise and instead the market focus will likely be on the rollover. Economic Calendar (09/01/2023 – 13/01/2023) To stay up to date with our publications, please choose one of the below: 📩 Click here to receive the latest market updates👉 Our LinkedIn page for the latest news✍️ Our Blog page for other FX market reports 🔊 Stay up to date with our podcast FXTalk Source: Optimism on inflation buoyes financial markets, emerging markets | Ebury UK
Euro against US dollar and British pound - Technical Analysis - May 17th

Pound sterling affected by BoE's speaker hinting at persistent recession. DAX gains on the back of industrial production edges higher

Jing Ren Jing Ren 10.01.2023 10:14
USDJPY seeks support The Japanese yen rallied over better-than-expected Tokyo CPI in December. On the daily chart, a break below August’s low (130.50) has put the buy side under pressure. The latest bounce hit resistance in the supply zone 134.70-135.00 which coincides with the 30-day moving average. The bulls will need to clear the support-turned-resistance of 133.30 before they could turn short-term sentiment around. The psychological level of 130.00 at the bottom of the bounce is a critical floor to keep the dollar steady. EURGBP attempts to recover The pound softens as the BoE's chief economist warns of persistent inflation. On the daily chart, the euro is in a consolidation after it lifted last October’s high of 0.8860. A slide below 0.8780 may have prompted intraday traders to take profit, which could cause a choppy price action in the near term. 0.8770 is a fresh support and 0.8720 at the base of the bullish breakout is confluent with the 30-day moving average. Selling pressure could be expected between 0.8830 then 0.8870, but a breakout may trigger a bullish continuation. GER 40 breaks daily resistance The Dax 40 climbs as upbeat industrial output in Germany eases fears of a deep recession. A close above December’s high of 14660, a major daily resistance may have put the index back on track. Zooming into the hourly chart, momentum from 14400 is a sign of strong conviction, prompting sellers to cover. In case of a pullback, the fresh support is a key level to keep the bullish bias intact. A brief consolidation could be in play after the RSI went overbought. The psychological level of 15000 might be next when volatility returns.
Eightcap analyst after UK CPI: It is an interesting position now for the Bank of England., do they need to go back to a few 50-point hikes to cut into the CPI rate?

FTSE 100 is doing better today, pound sterling had quite a good day yesterday reaching 3-weeks high

Walid Koudmani Walid Koudmani 10.01.2023 12:08
BRC report shows boost in sales over holiday season Today's BRC report showed an increase in total sales for the month of December by 6.9% compared with a year earlier as the economy still contends with the cost of living crisis. While this marked a noticeable improvement from November's 4.2% growth rate, it is important to note that some of this could be a result of high inflation driving prices and compensating for lower volumes. In addition, while sales were boosted by events like the world cup and holiday season, it remains to be seen if this trend will persist in the coming months while some economists believe inflation may have peaked or may at least be approaching its peak. In either case, this could be considered a positive sign and bring some optimism in a difficult economic context. The FTSE100 started the day trading higher after yesterday's pullback and with several central bank speeches today, could attempt to break through yesterday's highs. Meanwhile, the Pound managed to reach a 3 week high yesterday against the USD which has been experiencing significant weakness and today's events could bring some additional volatility to the currency market.  Read next: Damage to the crypto industry increased by almost a half in 2022 | FXMAG.COM Oil prices may be on the verge of breaking through the consolidation area Oil prices have managed to remain in the recent consolidation area after the prospects of an increase in demand from china supported higher valuations following a difficult start to 2023 which saw Brent drop over 10% from a high of $87 while WTI fell around 11% to reach a low of $72,44 before rebounding. In both cases it appears that the overall sentiment has improved and while traders await today's API inventory report from the US, it is possible that a surprise could cause a breakout from the recent sideways trading area. From a technical point of view, Oil.WTI is trading just below $75 and testing the 21SMA after breaking above the 8EMA on the hourly chart and while RSI still hovers around the 60 level, it appears that there might be still room for upside. On the other hand, a negative turn of events could swing sentiment in the other direction and cause an extension of the downward move.
Bank of England hikes rates and keeps options open for further increases

Forex: British pound up, Australian dollar helped by November retail sales

Jing Ren Jing Ren 11.01.2023 08:36
GBPUSD seeks support The high beta pound edges higher on improved market sentiment. A surge above 1.2080 has prompted short-term sellers to cover their positions. This could be the signal the bulls have been waiting for after the pair drifted lower in search of support. As the RSI returns to the neutrality area, the supply-turned-demand zone around 1.2050 is the first level to expect follow-up bids. 1.1900 is a critical support in case of a deeper pullback. On the upside, a close above 1.2300 could pave the way for a bullish reversal in the medium-term. AUDUSD breaks resistance The Australian dollar strengthened over better-than-expected retail sales in November. On the daily chart, the price has been grinding along the 30-day average (0.6720). A close above the double top (0.6890) is a sign that the bulls are strongly committed. The psychological level of 0.7000 coincides with the origin of a late August high, making it a key hurdle before the aussie could extend higher. On the downside, 0.6820 is the immediate support and 0.6720 the bulls’ second line of defence in case of hesitation. Read next: Euro: ECB's Schabel talks further rate hikes. Australian inflation hits 7.3% - Australian dollar can be supported by a 25bp rate hike| FXMAG.COM SPX 500 attempts to rebound The S&P 500 rallied after Fed Chair Powell avoided appearing hawkish in his latest remarks. The rally hit a bump in the former demand zone (3950) from December. Selling by previously trapped bulls weighs on the near term price action. If renewed buying could overpower this resistance, the index may progress towards 4050 which is just a springboard to the recent peak at 4120. In the meantime, the upper band (3850) of the previous consolidation range is the closest support, and 3800 a critical level to keep the recovery bias intact.
Euro against US dollar and British pound - Technical Analysis - May 17th

UK economy shrank 0.3% quarter-on-quarter. Services boosted by World Cup, tours and reservation services gaining 3.7%

Michael Hewson Michael Hewson 13.01.2023 09:13
Today's economic numbers for the UK economy pointed to a weaker performance after the October rebound, which came about as a result of the slowdown seen in September due to Queen Elizabeth 2 funeral. A rebound in October car sales, as well as construction helped see UK monthly GDP rise by 0.5% in October, however on a 3-month rolling basis we remained in contraction at -0.3%. The November numbers released this morning have evened out this down and up effect as economic activity slowed to 0.1%, which was slightly better than expected. On the broader 3 month measure the economy still contracted by -0.3%. Industrial and manufacturing production fell sharply into contraction territory on a monthly basis, dragged down by the manufacture of pharmaceuticals, chemicals and chemical products, however car production rose for the 3rd month in a row. Services performed better, helped by pubs and bars as people watched the World Cup. Tour operators and reservation services were also positive contributors with gains of 3.7% as people booked holidays for next year.   One of the biggest drags on services was transportation with the post and rail strikes, but as we saw in some of the recent trading updates from retailers, this translated into consumer activity being displaced into other areas, as people collected their items rather than having them delivered. Read next: US dollar: Fed's James Bullard, Thomas Barkin and Patrick Harker talk interest rates and inflation| FXMAG.COM The World Cup also continued until 18th December so the November boost is likely to have continued into mid-month, or at least until England's exit on 10th December. The continued wind down of NHS Test and Trace and the vaccine program also weighed on economic activity. Does this mean that we might see a quarterly contraction in Q4 when we see the December numbers in a months' time? According to the OBR the UK economy is already in recession, however as is often the case, could they be wrong? It's likely to be a close-run thing, but with the September decline of -0.8% set to drop out of the rolling 3-month numbers when the December numbers are released in a months' time the UK might avoid a technical recession, if this week's positive retail updates are any indication, but any growth is likely to be pretty anaemic, and 2023 is still likely to be very challenging. Nonetheless today's numbers do offer some hope the UK economy may be more resilient than first feared, and may give the Bank of England slightly more flexibility when it comes to rate policy. For further comment from Michael Hewson, please call 0203 003 8905 or 07824 660632 Email: marketcomment@cmcmarkets.com Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC To stop receiving market commentary emails from Michael Hewson, please reply to this email with 'Unsubscribe' in the subject line. CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
Euro's Rally Stalls as Focus Turns to Inflation and Data Disappointments

US dollar decreased, British pound recovered, DAX gains on the back of risk-on

Jing Ren Jing Ren 16.01.2023 08:37
USDCHF hits resistance The US dollar softened after Fed policymakers cheered the news of easing inflation. On the daily chart, the pair has remained under pressure after a tentative break below last April’s low of 0.9200. The current rebound from this critical level has led to a consolidation. Though the greenback must clear the recent swing high and daily resistance at 0.9400 before it would attract buyers. A bullish reversal could take shape should this happen. Otherwise, renewed selling pressure would send the pair towards 0.9100. EURGBP tests support The pound recouped losses as the UK’s economy avoided a contraction in November. However, overall sentiment still favours the single currency. A break above the higher band (0.8870) of the consolidation range means that the bulls are still in charge of the price action. A pullback would be seen as an opportunity to stake in and join the trend. The previous low of 0.8830 is the first support and further down 0.8770 on the 20-day moving average is a critical floor. 0.8930 from last September’s sell-off is the target. GER 40 grinds higher The Dax 40 extends gains as markets go risk-on post-US inflation. A bullish MA cross on the daily chart confirms increased risk appetite after a rally above last June’s high of 14650. As the RSI repeatedly flirts with overbought territory, a pullback may catch the eye of bullish followers. Another sign of exhaustion comes from the hourly chart where a bearish RSI divergence shows a loss of momentum. 14960 is the immediate support in case the index takes a breather. 15400 at the start of a sharp sell-off in February is the target. Read next: McDonald's Will Be Replaced In Kazakhstan By The Russian Vkusno & Tochka| FXMAG.COM
Technical Outlook Of The Main EUR/USD Currency Pair

Ebury's Matthew Ryan talks Forex market - Euro, British pound and more - 16/01/23

Matthew Ryan Matthew Ryan 16.01.2023 21:43
The US inflation report confirmed the downward trend in price pressures and sent financial markets worldwide soaring on the hope that Fed hikes will soon stop. 2023 has gotten off to a very optimistic start, as the good news on inflation are added to fading fears of an European recession and the Chinese post-COVID reopening. Stocks worldwide soared, bonds rallied and the dollar suffered as traders sold-off safe-havens, ending the week down against every major currency except the Swiss franc. The 2023 party in emerging market currencies rolled on, fuelled by rising commodity prices and increased risk appetite.   This week is relatively light in data. A critical Bank of Japan meeting looms on Wednesday, given hints that the Bank of Japan is ready to ditch its position as a dovish outlier among the major central banks. The key question will be whether the trends in place so far for 2023, i.e. rallying risk assets, diminishing worries about the inflation outlook and a falling dollar, stay in place as markets digest the positive inflation news from last week. Traders’ attention will be focused on the numerous speeches by the world’s central bankers at the Davos economic forum later in the week. We expect diverging content and tone from ECB and Fed speakers, given the developing gap between the trends in core inflation in the Eurozone (still rising) and the US (slowly falling). Figure 1: G10 FX Performance Tracker [base: USD] (1 week) Source: Refinitiv Datastream Date: 16/01/2023 GBP The UK economy continues to outperform gloomy expectations. It managed to eke out 0.1% growth in the month of November, defying expectations for a mild contraction and casting doubt on calls that the UK is already in recession. Sterling did not react much to the news, and it largely tracked the euro in its rally against the dollar. Figure 2: UK GDP [% MoM] (2021 – 2022) Source: Refinitiv Datastream Date: 16/01/2023 The UK will provide a couple of the few major data points in the coming week, with the publication of the latest labour report on Tuesday, and the December inflation data on Wednesday. We will be paying particularly close attention to the core index. So far, as is the case in Europe, we have not seen this key indicator exhibit the kind of welcome downward trend we are witnessing in the US. EUR The main news of the week out of the Eurozone was the large upward surprise in industrial production for November. While the number is old by now, it makes it quite unlikely that the Eurozone entered recession in the winter of 2022, in line with our views and contrary to the gloomy sentiment. The continued fall in energy prices is further buoying sentiment on the Eurozone economy, and the common currency outperformed every G10 currency last week, save the yen. We will pay close attention to ECB President Lagarde’s speech at the Davos forum in the coming days. The need for Eurozone rates to catch up with those in the US, and the further upside to the bloc’s economy from China’s reopening, remain the pillars of the bullish case for the euro. USD Last week’s US inflation report came in almost exactly as expected, and that was good news for markets. The monthly headline number fell for the first time since May 2020, while the key core inflation index, more persistent and a better predictor of future inflation than the headline, rose by only 0.3%. The latter has been on a clear, albeit gentle, downward path since last summer, though it is still at levels far above the Fed targets. It now seems likely that overnight rates in the US will not rise above 5% before the Fed adopts a wait and see attitude, with financial markets eyeing two additional 25bp hikes in February and March before the FOMC ends its tightening cycle. That said, we still think that the prospect of rate cuts lies far into the future, certainly not before 2024. Figure 3: US Inflation Rate (2012 – 2022) Source: Refinitiv Datastream Date: 16/01/2023 JPY The yen was by far the best performer in the G10 last week, extending its recent rally and advancing to its strongest position on the US dollar since May. Investors are continuing to favour the yen in light of the hawkish policy shift from the Bank of Japan, which tweaked its yield curve control strategy in December. Speculation is rife that the BoJ could further adjust its YCC policy at its meeting this coming Wednesday. With indicators of both consumer and producer inflation on the rise, we think there is a possibility that it could scap it altogether, which would be a significant bullish signal for the yen. While we don’t expect the BoJ to open the door to raising its base rate just yet, we still see further room to run in the currency from current levels, and go into Wednesday’s meetings seeing risks to the yen as skewed firmly to the upside. CHF Last week marked a milestone for the EUR/CHF pair, as it rallied back above the parity level for the first time since July. This can be attributed to an improvement in market optimism, with risk sentiment supported by a further easing in US inflation. Indeed, the Swiss franc was one of the worst performers in the G10 last week. The recent move in the pair is in line with our view and we expect a continued, albeit gradual, depreciation of the franc against the euro in the coming quarters. Similar to the previous one, this week’s domestic economic calendar is rather light. Instead, we’ll be focusing on central bank communications, notably from Swiss National Bank governor Jordan, who will be speaking at the Davos conference on Friday. AUD Once again, the Australian dollar was one of the outperformers last week, with the currency continuing to take advantage of China’s reopening – a key stimulus to the Australian economy. Macroeconomic news out last week was also rather encouraging, raising the possibility of additional tightening from the Reserve Bank of Australia, potentially at its next meeting in early-February. November retail sales beat expectations, the trade balance swelled greater into surplus, while inflation data continued to trend higher, with the monthly print rising to 7.3% in November. Figure 4: Australia Trade Balance (2015 – 2022) Source: Refinitiv Datastream Date: 16/01/2023 As things stand, markets are torn as to whether the RBA will stand pat or deliver another 25bp hike next month. Upcoming data will be critical in guiding these expectations, starting with Thursday’s labour report for December. An easing in the pace of net job creation is expected, though this number has tended to surprise to the upside in the past few months. NZD The New Zealand dollar extended its recent underperformance against its Australian counterpart last week, perhaps partly a consequence of a previous strong rally and the lack of any major domestic developments. The Reserve Bank of New Zealand is expected to be one of, the not the most, active central bank in the G10 this year, but this already appears largely priced into NZD, which is limiting further upside in the currency. Activity should pick up modestly this week, with business confidence (Monday) and PMI data (Thursday) to be closely watched by market participants. We think that the latter may be particularly important – this key indicator has been on a downward trend for the past few months and a drop below 50 in the composite index isn’t out of the question. CAD CAD was one of the underperformers last week, which can perhaps be linked to the currency’s close tie with the US dollar more than anything else. This week looks set to be a far more eventful one. The December inflation report (Tuesday) could be a highly important one for the Canadian dollar. So far, we’ve seen signs of a very gradual downward trend in the headline inflation number, but economists are pencilling in a sharp drop to 6.3%, which would be the lowest level since February. Of greater importance for CAD will be the core inflation print. The lack of any clear signs that this has peaked could ramp up expectations for another 25bp rate hike from the Bank of Canada at its policy meeting next week (currently 70% priced in). Retail sales on Friday could also be a market mover, although this data is for November so will likely have a limited impact on the USD/CAD exchange rate. SEK Inflation data released in Sweden last week confirmed our view that the Riksbank still has some way to go in its fight against inflation. Even off the back of the data, and the general improvement in risk sentiment, the krona failed to benefit and ended the week lower against a broadly stronger euro. In contrast to other major economic areas, particularly the US, price pressure continues to rise in Sweden. Sweden’s inflation rate increased more than expected to 12.3% in December, its highest rate since 1991. The CPIF, the measure of inflation tracked by the Riksbank, also increased to 10.2%, reaching double digits for the first time in more than thirty years. In our view, an additional 50 basis point rate hike by the Riksbank is warranted in February. This could provide some support for the krona, particularly as most other central banks are slowing their tightening cycles. NOK In line with its Swedish counterpart, the Norwegian krone ended the week lower against the euro, with the EUR/NOK pair trading around the 10.7 level. We attribute this modest underperformance to the downward surprise in the Norwegian inflation data for December, released last week. Norway’s inflation rate decreased more than expected to 5.9% in December, its lowest level in seven months. However, the core inflation rate, more important for future monetary policy in our view given it strips out volatile components, increased slightly to 5.8%. Norges Bank will meet this coming Thursday, and looks likely to again raise rates by another 25 basis points, in its attempt to curb inflation. Markets are pricing a total of only 25bps of hikes for the next two meetings though, in our view, another 25bps rate hike in March cannot be ruled out, given high inflation and the resilience of the domestic economy. CNY The Chinese yuan continued rallying last week, rising to its strongest position against the US dollar since July this morning. The move in USD/CNY does, however, appear to be largely a consequence of the weaker US dollar, as the CFETS RMB index ended last week only a tad higher. Last week’s inflation data from China did not rock the boat. As expected, the headline rate ticked up slightly in December, although at 1.8% it remains far below the 3% target and is not expected to reach this level anytime soon. The inflation numbers, including PPI printing in negative territory, continue to point to weak demand. This week’s economic calendar is packed with data. Tuesday is set to be especially busy as we’ll receive key hard data prints for December and the GDP data for the fourth quarter. Moreover, loan prime rates are set to be announced on Friday. The PBoC kept the rate on its one-year medium-term lending facility (MLF) unchanged today. It also injected 79 billion yuan in fresh loans on top of the 700 billion yuan rollover. The base case is for no change in the loan prime rates (LPRs), albeit a change in the 5-year rate, which serves as a reference for mortgage rates, would not be a major surprise. Economic Calendar (16/01/2023 – 20/01/2023) Source: Dollar retreat continues amid inflation optimism | Ebury UK
Forex: What to expect from British pound against US dollar - January 17th

Forex: What to expect from British pound against US dollar - January 17th

InstaForex Analysis InstaForex Analysis 17.01.2023 08:22
Yesterday the price formed a black candlestick with the upper long shadow. The pound's hopes to climb to the target level of 1.2410 is undermined, though it is possible to speak about it more confidently once the price has settled below 1.2155 (low of May 13).     The mood of the Marlin oscillator is neutral - the signal line is moving along the zero line. GBP will rise once it crosses yesterday's high at 1.2288. In this case, the 1.2410 target will become relevant again.     There is a double divergence on the four-hour chart. This is an additional argument in representing the trend as a fading local growth with a reversal to a short-term decline, to the nearest target at 1.1933. Relevance up to 04:00 2023-01-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332439
Bank of Japan to welcome Kazuo Ueda as its new governor

The Bank Of Japan Kept Its Below-Zero Interest Rate, S&P 500 Failed To Extend Gains

Swissquote Bank Swissquote Bank 18.01.2023 10:47
The Bank of Japan (BoJ) kept its below-zero interest rate and its faltering yield curve control policy unchanged. No-action sent the Japanese 10-year yield tumbling by up to 14 bp – that’s almost a 30% plunge. The dollar-yen spiked above the 131.50 level, losing more than 2.50% against the greenback. Equities In equities, confusion and lack of direction best described yesterday’s sentiment in the US. US futures US futures were pointing at a negative start, then turned higher in early trading as we heard a lot of talk about "green shoots" and "bright spots" in the economy when Chinese Vice Premier talked in Davos yesterday saying that he expects China's economy to return to normal this year. S&P 500  The S&P 500 shortly traded above the 4000 level, but reality soon hit the fan with mixed earnings from Goldman and Morgan Stanley, and brought the top sellers in. earnings And the top sellers kept selling into the 4000 level to the end of the session. Finally, the index closed the session 0.20% lower, spot on the 2022’s down-trending channel top and above the critical 200-DMA. The first set of earnings doesn’t support a sustainable move above that 200-DMA level. Read next: Alibaba And Its Share Buyback Program Which Is Supported By Ryan Cohen, Microsoft Corp. Plans To Incorporate AI Tools| FXMAG.COM Watch the full episode to find out more! 0:00 Intro 0:45 BoJ fights the hawks 3:00 FX update 5:29 S&P500 offered at 4000… 6:59 …as mixed earnings hammer optimism 7:59 Tesla better bid despite Jefferies PT cut 8:36 Meme traders refuse to buy Alibaba Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #BoJ #YCC #JPY #JGB #USD #EUR #GBP #inflation #bank #earnings #Alibaba #Tesla #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH      
Euro against US dollar and British pound - Technical Analysis - May 17th

United Kingdom: citizens spend less, wages up, but inflation level flees

Craig Erlam Craig Erlam 20.01.2023 22:45
It’s been another eventful week and one that serves to remind us that while there may be more sources of optimism this year, compared with last, it’s going to be a very bumpy ride. There’s no doubt that there’s been plenty more cause for optimism so far this year, especially compared with what we became accustomed to in 2022. The US could achieve the soft landing that many have doubted is possible, China could bounce back strongly from the dropping of Covid restrictions and the euro area may avoid a recession. That’s not a bad shift in expectations at all. But just as quickly as they turned more favourable, they could switch again. Economic data from the US this week has been far less promising. Rather than focus on disinflation and the labour market, it’s been other economic indicators and earnings that have taken the spotlight and it hasn’t been great. What’s more, it seems we’re seeing more regular warnings of imminent layoffs, the latest coming from Alphabet which plans to cut 12,000 staff globally. For so long companies have been reluctant to lay staff off following the post-pandemic re-hiring struggles but the tide appears to be turning and it could accelerate from here, at which point the economic data may become much more downbeat. UK retail sales slump again It’s been a busy week for UK economic data and many may be just as confused about the outlook as they were before. Data has previously indicated that the country may have managed to avoid a recession in the fourth quarter but at the same time, retail sales strongly suggest that households are feeling the strain which begs the question, did the World Cup just delay the inevitable? Read next: $1 Million In Sanctions Against Former President Donald Trump, Netflix Co-Founder Reed Hastings Has Stepped Down As CEO| FXMAG.COM Meanwhile, labour market figures remain strong, so much so that wages are continuing to accelerate higher while still failing to keep up with inflation. While that explains why households are spending less, it doesn’t alleviate fears within the BoE that getting inflation sustainably back to 2% could necessitate inflicting more pain on households. An unenviable dilemma, but policymakers are in agreement that inflation must take priority. And when that is still above 10%, it’s clear that means the rate hikes will keep coming. Volatility is back It’s been a very choppy week for bitcoin after the cryptocurrency surged back to life, buoyed by a much-improved risk environment. A period of relative calm in the crypto space has allowed for such a rebound, time clearly being a great healer and all that. Still, as we’ve seen in crypto, the volatility works both ways and what we’ve seen this past week suggests there’s plenty more to come. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. It's going to be a bumpy ride - MarketPulseMarketPulse
Bank of England raised the interest rate for the 12th meeting in a row

A week full of macroeconomic events ahead of us. Let's have a look at Craig Erlam's (Oanda) view

Craig Erlam Craig Erlam 20.01.2023 22:49
US It will be a busy week filled with the first look at Q4 GDP, corporate earnings, and US debt ceiling gridlock. There is a lot of risk on the table and a key focal point for many will be the modest growth we will see alongside a plethora of data points that are signalling recession warnings. Traders will want to see if the contraction manufacturing and service PMI readings we saw in December show any improvement this month.   Wall Street is also fixating on what will happen with debt ceiling talks. Special measures are being used and that should stave off default until June 5th, but flare-ups will most likely happen along the way.    Earnings season shifts away from the banks and now focuses on broader parts of the economy.  Key earnings include results from Tesla, Chevron, the airlines, Lockheed Martin, Visa, American Express, 3m Abbott Labs, JNJ, GE, IBM, and Colgate-Palmolive.   EU The flash PMIs early in the week will be of keen interest as investors continue to assess how much trouble the economy is in. A relatively mild winter to date has boosted the bloc’s economic prospects as gas prices have fallen considerably. This isn’t expected to be reflected in the PMIs though, with the prospect of much higher interest rates and a tougher global economic environment continuing to weigh. It will be interesting to see if there is any improvement as a result of this and China’s growth prospects. Read next: $1 Million In Sanctions Against Former President Donald Trump, Netflix Co-Founder Reed Hastings Has Stepped Down As CEO| FXMAG.COM Regardless, markets expect the ECB to hike by another 150 basis points over the coming meetings and officials have been keen to ensure investors don’t become complacent on that. I expect more commentary along those lines next week. UK  While the PMIs would typically be the standout release next week, investors may have more of an eye on the PPI inflation data for signs of inflationary pressures subsiding. The CPI data in December declined for a second month but remains far too high, above 10%. We’ll need to see much greater signs of those pressures abating before the Bank of England can become more comfortable. Russia The only economic release of note is the PPI data. That aside, the focus will remain on the war in Ukraine.  South Africa The SARB is expected to raise interest rates by another 50 basis points on Thursday, taking the repo rate to 7.5%, although they could opt for only 25. Inflation has been heading in the right direction since peaking in the summer and could be back within the 3-6% target range before long. Investors will be looking for signs on whether the tightening cycle is now at or near an end.  Turkey The CBRT left the repo rate unchanged at 9% in January after opting to pause the easing cycle late last year. The quarterly inflation report may offer insight into whether rates will fall again and when but that aside, I’m not sure it will contain much of note given the logic adopted to justify cutting interest rates over the last couple of years. Switzerland Trade data is the only notable release next week.  China This Saturday is Chinese New Year’s Eve, followed by the Spring Festival. The New Year atmosphere which generally extends until at least the end of January may further stimulate domestic consumption and investment in China. The billions of trips made during the Chinese New Year could bring the second wave of Covid-19 to largely unaffected rural areas and smaller cities. Given that the general population will have a higher level of immunity, the economic impact of a second outbreak should be less in areas that have already withstood the main wave of evacuations. India No major data or central bank appearances are expected.  Australia & New Zealand China’s full reopening since the beginning of January this year and its renewed focus on ‘economic development’ will benefit economic growth in Australia and New Zealand. The largest potential upside from reopening itself sits within the services sector given China is the largest consumer of Australian tourism and education exports.   Australia recently released its CPI for November at an annual rate of 7.3%, in line with expectations but higher than the previous value of 6.9%, indicating that Australia’s inflation level may still not have peaked.  The RBA’s CPI for December will be released on Thursday, as well as its revised CPI average quarterly rate for the fourth quarter. New Zealand’s CPI for the fourth quarter will offer clues on whether sustainable disinflation is underway.  Japan The Bank of Japan monetary policy decision saw them defer any major decisions until at least Governor Kuroda’s last meeting in March, barring any surprises in the interim. Following that, the summary of opinions on Wednesday could be of interest, as will the December minutes, released Monday. Despite being outdated now, it will provide perspective on the decision to unexpectedly tweak its yield curve control band.   Next week also focuses on the Japan PMI readings, leading index, and Tokyo’s CPI.  Singapore The release of the December inflation will be followed closely.  MAS sees core inflation averaging 3.5%–4.5% this year.  Economic Calendar Saturday, Jan. 21 Economic Events US Treasury Secretary Janet Yellen visits Senegal, Zambia, and South Africa Sunday, Jan. 22 Economic Events Germany Chancellor Scholz and French President Macron hold a joint news conference after a Franco-German cabinet meeting in Paris Italian PM Meloni visits Algiers Monday, Jan. 23 Economic Data/Events US Conference Board leading index Euro area consumer confidence EU foreign ministers meeting in Brussels Russian Foreign Minister Lavrov is expected to travel to South Africa’s Pandor ECB’s Panetta speaks in the European Parliament ECB President Lagarde makes a speech at the Deutsche Boerse annual reception Bank of Japan releases minutes of its December meeting Tuesday, Jan. 24 Economic Data/Events US flash PMIs; Richmond Fed Manufacturing Australia Judo Bank PMI, business confidence Chile PPI European flash PMIs: Eurozone, Germany, UK, and France Japan PMIs, department store sales Mexico international reserves, bi-weekly CPI New Zealand performance services index Thailand trade South Africa leading indicator ECB’s Knot speaks at the Future of the Financial Sector conference in Frankfurt German Foreign Minister Baerbock addresses the Council of Europe in Strasbourg SNB’s Vice Chairman Schlegel speaks in Zurich Earnings from Danaher, General Electric, Intuitive Surgical, Johnson & Johnson, Lockheed Martin, Microsoft, Raytheon Technologies, Texas Instruments, 3M, Union Pacific, and Verizon   Wednesday, Jan. 25 Economic Data/Events US MBA mortgage applications, Philadelphia Fed non-manufacturing activity Australia CPI, leading index Canada rate decision: Expected to raise rates by 25bps to 4.50% Germany IFO business climate Japan leading index Mexico economic activity IGAE   New Zealand CPI, credit card spending Russia PPI, weekly CPI Singapore CPI Thailand rate decision: Expected to raise rates by 25bps to 1.50% The Republican National Committee winter meeting is held Nordic economic outlook published by Finland’s Nordea Bank Germany’s Economy Ministry publishes its annual report with updated forecasts BOJ announces the outright purchase amount of government securities Earnings from Abbott Laboratories, ASML Holding, AT&T, Boeing, IBM, and Tesla Thursday, Jan. 26 Economic Data/Events US Q4 GDP, new home sales, initial jobless claims, goods trade balance, US durable goods, wholesale inventories, retail inventories Canada CFIB business barometer Japan PPI services, machine tool orders Mexico unemployment rate Russia gold, forex reserves Singapore industrial production South Africa rate decision: Expected to raise rates by 50bps to 7.50% New Zealand releases financial statements for the five months to Nov. 30 BOJ releases summary of opinions from January meeting Earnings from American Airlines, Blackstone, Comcast, Intel, LVMH Moet Hennessy Louis Vuitton, Mastercard, SAP, Southwest Airlines, and Visa Friday, Jan. 27 Economic Data/Events US personal income/spending, University of Michigan consumer sentiment, pending home sales Australia PPI, export/import price index Japan Tokyo CPI Mexico trade balance New Zealand business confidence Singapore home prices South Korea business survey Thailand foreign reserves, forward contracts Spain GDP Earnings from American Express, Chevron, and HCA Healthcare Sovereign Rating Updates Denmark (Fitch) Greece (Fitch) Hungary (S&P) Netherlands (Moody’s) Portugal (DBRS) This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Week Ahead - Earnings season a highlight - MarketPulseMarketPulse
GBP's Strong Start: Outpacing G10 Currencies Amid Elevated Risk Sentiment

John Hardy (Saxo Bank): I don’t think any single inflation print will unsettle the BoE here, just look at the huge recovery in sterling from the lows

John Hardy John Hardy 13.12.2022 14:44
Stocks go up as the US inflation print surprises market participants, but we cannot forget about other important events this week, which are three key decision of three key central banks. Even if today's US infation print seems to cement the 50bp rate hike, UK economy is still ahead of CPI inflation print. In the same time it's still not sure which variant European Central Bank is going to choose on Thursday and, what's event more important, what's beyond. Today, we're delighted to hear from John Hardy, Head of FX Strategy at Saxo Bank. BoE is expected to hike the rate by 50bp on Thursday, but the day before CPI inflation data is published - would you expect a hawkich pivot if CPI bounces back above November print? John Hardy, Head of FX Strategy at Saxo Bank: BoE: I don’t think any single inflation print will unsettle the BoE here, just look at the huge recovery in sterling from the lows, which will help stabilize inflation relative to other countries just as sterling weakness was making the situation worse until recently. Already in early November, the BoE were saying that they were unlikely to take the rate as high as the market expects next year, so given the further encouragement from a strongly recovering sterling and lower natural gas and petrol prices, I don’t expect fireworks in the guidance even if inflation proves a bit hotter then expected. Read next: An incoming cold spell in the US has seen the cost of US gas surge 27% during the past three trading session while (...) Dutch TTF gas contracts remain below €150| FXMAG.COM December Fed decision seems to be sealed, but on Friday UMich and PPI data gloomed the picture of the US Economy a little bit. Are you of the opinion Fed will permanently shift to 50bp hikes until the end of cycle? Fed: The Fed will hike by 50 basis points on Wednesday and would likely hike in smaller 25-basis point increments thereafter unless inflationary pressures re-emerge (something the market is not at all anticipating and would take considerable time to develop anyway – a “slower fall” in inflation than expected is the worst case scenario barring new shocks).  For the FOMC meeting, the market is more looking at where the Fed forecasts its policy rate will be at the end of 2023 than at the size of the hikes, as well as where the Fed expects growth/inflation/employment data will be next year for a sense of how much economic weakness would be required for the Fed to stop hiking and eventually cut. Still, the market has a strong forward view on steeply falling inflation and growth and will react the most to incoming data. That view on incoming data has the already expecting rate cuts from the Fed starting as early as Q4 of next year, which suggests it is willing to ignore much of what the Fed says if the guidance is intended for anything beyond the next two or three meetings. Read next: The handling and demise of FTX have ultimately set the ecosystem's facilitative regulatory agenda and adoption efforts back | FXMAG.COM ECB decides on interest rate this week - what do you expect from the Bank this time? When could the cycle come to an end? ECB: The ECB is set to hike 50 basis points, which will take the deposit rate to 2.00%. Whether they hike another 50 basis points or step down to 25 basis point hikes thereafter is the question. Europe is already in recession and expected to be in recession next year. I don’t expect much above 2.50% for this cycle from the ECB for the peak policy rate – getting higher would likely require a reacceleration of inflationary pressures and its too early for that to unfold in the near future, when a drop-off in inflation is on course.
Issue on the US debt ceiling persists, Joe Biden goes back to the US

Jerome Powell and Company appear to have already settled on a 25bps hike for next week's meeting, so any impact on monetary policy is likely to be minimal

Matt Weller CFA Matt Weller CFA 23.01.2023 16:41
Let's find out what Matt Weller (FOREX.com, City Index) told FXMAG.COM team about Australian inflation and RBA decision, British pound and the US GDP. This week Australian CPI goes public, what do you expect from the print and the RBA decision on February 7th? The market is currently split between expecting the RBA to stand pat or raise interest rates 25bps when it meets in early February, so every economic report that hits the wires over the next couple of weeks will take on additional significance. The monthly AU CPI report showed headline price pressures remained sticky at 7.3% in November, the same as in Q3, and if inflation doesn't show signs of abating, it may tip the RBA in favor of a rate hike at its February meeting. Do you expect GBP may be somehow boosted by PMIs on Tuesday? After last week's disappointing December UK sales report, traders are keen for an update on how the UK economy has been performing in the new year, so the PMI release could absolutely have a big impact on the pound. With GBP/USD testing key longer-term resistance around 1.2450 as of writing, the odds may favor a pullback in sterling unless the PMI report shows unexpected strength. Read next: The price of Tesla has gained over the past week as we approach its earnings release. The price of the stock climbed 12.50% over a 5-day period | FXMAG.COM USA GDP is the big one this week, what asset could benefit the most from the lower/higher-than-expected print? Are you of the opinion GDP will be seriously taken into consideration by FED? GDP is, by definition, a lagging indicator of the performance of the underlying economy, so I wouldn't expect it to have a particularly big impact on many markets. For its part, the Fed is focused on more timely data, including the monthly jobs and inflation reports, and in any event, Jerome Powell and Company appear to have already settled on a 25bps hike for next week's meeting, so any impact on monetary policy is likely to be minimal.
Kenny Fisher talks British pound against US dollar. UK economy declined 0.3% in March, Bank of England chose the 25bp variant

It seems that British pound against US dollar has the potential to reach 1.37-1.38

Alex Kuptsikevich Alex Kuptsikevich 26.01.2023 14:16
The British Pound is testing the $1.2400 level this week, above which it failed to consolidate in the middle of last month. The GBPUSD has yet to trade consistently higher since last June. Looking at the entire rally from September's historic lows at 1.0327, the retreat from December's highs to 1.19 is a fairly common Fibonacci retracement to the 76.4% area of the original move, though not the classic 61.8%. Technically, two important moving averages, the 50- and 200-day moving averages, acted as support in early January, preventing the pair from falling any further while allowing it to take some profits from the initial rally. Read next: McDonald's earnings: Currently, it is anticipated by several analysts that the EPS forecast for the quarter ending December 2022 is $2.44 | FXMAG.COM The pattern now suggests that GBPUSD has the potential to rise to 1.37-1.38, where the highs of last January and the 161.8% level of the first wave of the rally are concentrated. A move in this direction has every chance of becoming the main trend this year, although we expect a very significant battle for 1.300 over the next few quarters. However, the tactical stance is more cautious. The pound has been hitting a glass ceiling just above 1.2430 for over a week now. The inability to rewrite the previous highs is not a formal signal for further growth. At the same time, a divergence with the Relative Strength Index is forming on the daily timeframe, as the price's repeated highs are coming from the index's lower local peaks, which is a bearish signal. Without a strong rally above 1.2430, we should be prepared for a deeper local correction. The area of the January lows, also crossed by the 200 SMA, looks like a good target for another pullback. A deeper correction towards 1.1630, where 61.8% of the recent rally and last October's local peak are located, cannot be ruled out. Such a full-blown correction would fully recharge the pound bulls and pave the way for further growth.
Eightcap analyst after UK CPI: It is an interesting position now for the Bank of England., do they need to go back to a few 50-point hikes to cut into the CPI rate?

At the moment, the Federal Reserve is expected to hike 25 basis points, but the Bank of England’s decision is less certain. Previously, 2 members voted to keep rates unchanged

Michalis Efthymiou Michalis Efthymiou 01.02.2023 11:47
Bitcoin has been performing really, really well recently, but the question is how will it react to all of crucial central banks' decisions this week. Bank of England is expected to choose 50bp variant, but it's not that sure as the Fed decision. FXMAG.COM: Bitcoin has been gaining for 4 weeks straight, but it's a tough week ahead. How high could the price of Bitcoin be on Friday evening? Michalis Efthymiou: Yes, the price of Bitcoin has gained momentum over the past 4 weeks, and this has largely been linked to specific influential factors. The bullish trend has been fueled by the weakening monetary policy as well as a strong economic outlook. Most economists and institutions, such as the IMF, have advised that the risks of a recession are fading. Both factors have resulted in a higher risk appetite and investor confidence throughout the market. This tends to be positive for assets such as cryptocurrencies and stocks. Investors were also keen to invest in the discounted price which was triggered by the FTX crisis. Bitcoin continues to show recovery signs with the total market capitalization increasing above $445 Million. Additionally, Bitcoin has also managed to hold a market share of more than 40%. However, investors should be cautious that the total cryptocurrency market volume this week has declined by 12%. Read next: Shell has been an exception to the rule of energy companies generally doing better last year, particularly in the final quarter| FXMAG.COM This could be related to investors holding off until further clarification is obtained from the Fed, ECB, and BoE. So could change after Thursday. In regard to how high the price can go, unfortunately this cannot be known for sure. However, it is clear the price is in a better position this month but has slowed potentially due to the monetary policy decisions ahead. FXMAG.COM: The Bank of England hikes the rate this Thursday. This decision seems to be crucial, as GBP is strikingly weak. Is it only about lagging monetary policy or something else? Michalis Efthymiou: Yes, the Bank of England’s base rate is 1% lower than the Fed’s Fund Rate. However, it should be noted that the pricing is not solely dependent on this element. The difference has already been priced into the exchange rate and is likely to have a minimal effect. Investors will now largely be concentrating on how much the 2 institutions will choose to hike this month. At the moment, the Federal Reserve is expected to hike 25 basis points, but the Bank of England’s decision is less certain. The Bank of England previously had 2 out of their 9 members vote to keep interest rates unchanged. In addition to this, investors are eager to gain further insights regarding the bank’s intentions for 2023. For example, whether they can foresee a cut in interest rates towards the end of the year.
Bank of England expects inflation to to fall to 3% within 12 months. US inflation decreases a little

Michael Hewson ahead of the UK GDP release: What we do know is that any growth is likely to be anaemic, and 2023 is still likely to be very challenging

Michael Hewson Michael Hewson 03.02.2023 13:02
GBP/USD has been trading near 1.22 for some time now. After Bank of England decision, it's time to examine health of the UK economy. FXMAG.COM: After a 50bp rate hike, could promising GDP print provide further support for GBP? Michael Hewson (CMC Markets): Possibly as there a lot of bad news priced into the UK economy, and both OBR and Bank of England have said the economy is in recession given the 0.3% contraction in Q3. In truth they could well be wrong given some of the recent data from October and November which was better than expected. Read next: No matter what the outcome of the RBA I see AUDUSD failing and going lower| FXMAG.COM If the economy does grow in Q4 a technical recession is avoided but ultimately it still amounts to semantics. Whichever way you look at it the outcome of the GDP numbers the nuance is likely to be lost on a lot of people given how finances are coming under strain. What we do know is that any growth is likely to be anaemic, and 2023 is still likely to be very challenging.
Bank of England hikes rates and keeps options open for further increases

FX Daily: Caught between inflation and a recovery

ING Economics ING Economics 02.03.2023 09:01
After - and perhaps because of - the positives of the strong February China PMI numbers yesterday, today sees the hangover of higher core rates around the world as investors re-price terminal policy rates. The US 2-year Treasury yield is closing in on a staggering 5%. Expect more of the same today with the focus on February core eurozone CPI  Source: Pexels USD: Trapped by opposing forces Trade-weighted measures of the dollar are consolidating near recent highs and we suspect further volatility - rather than a clean trend - will be the story for coming weeks. Weighing on the dollar has been the pick-up in global activity as represented by yesterday's February PMI release from China. We will hear more on the China growth story this weekend as political leaders meet for their Two Sessions. Also weighing on the dollar has been some aggressive re-pricing of central bank curves overseas - e.g. in the eurozone. For reference, since last Friday two year swap rates have risen 17bp for EUR, 10bp for USD and just 2bp for GBP.  Yet US rates have powered ahead too, with the US 10-year Treasury yield back above 4.00% and the 2-year at 4.92%. Expect to hear more about the equity risk premium where investors will increasingly have to weigh up their incentives for holding equities if a two-year, risk-free investment in US Treasuries pays close to 5%. Higher rates around the world will clearly increase headwinds for risk assets - which is dollar bullish. How will this story break? We have some important US data releases over the next week and key testimony from Federal Reserve Chair Jerome Powell next week which should shed a little light on how aggressive the Fed needs to be. Recall that Chair Powell did say on 1 February that the broad disinflation process has started. Key data releases will include tomorrow's ISM Services for February. Was the January rebound here weather related? And again the question of weather will be asked when the February US jobs numbers are released on 10 March. Unless we get clearer signs that the January data bounce was weather-related, the dollar will hold onto gains made in February. For today, the dollar will probably take a back seat to events in Europe (core eurozone CPI) and we doubt US initial claims are a market mover. This could see DXY edge towards the lower end of a 104.00-105.00 range today. Chris Turner EUR: Look for a new cycle high in core eurozone CPI As above, the re-pricing of central bank cycles has been more keenly felt in the eurozone than the US this week. That trend should be supported today with the release of February's core eurozone CPI which looks likely to exceed the 5.3% year-on-year consensus. We have had little push-back from the European Central Bank against the repricing of the cycle, which now seems to price the deposit rate above 4.00% early next year. That seems excessive, but let's see what today's release of the ECB minutes has to say. Also important today will be comments from consistent hawk, Isabel Schnabel, speaking at the Money Market Contact Group in Frankfurt at 1330CET today. Will she push back against this aggressive pricing of the ECB cycle?  EUR/USD may well be trapped in a 1.0600-1.0700 range today. Chris Turner CEE FX made a giant leap yesterday, as did the entire EM space, driven by positive news from China and the EUR/USD move higher. However, we do not think the US dollar has had the last word. So the CEE region may still benefit a bit today from yesterday's move but we do not expect a significant extension of recent gains. This should have been limited by the already very heavy positioning and in the case of the Czech koruna, near-historically strong levels. Read next: Stock market has been calm thanks to a belief that peak rates are near. The US jobless claims are forecast to hit 196K| FXMAG.COM Today's calendar in the region is almost empty, so the global story will be a decisive driver again. However, it is hard to see a significant trigger for a correction in the CEE region at the moment and thus we prefer to be rather bullish for potential further positive surprises for the EM space and persistent carry trades. From this perspective, it seems the Polish zloty could start to catch up with its CEE peers given its position as the only underperformer this year. In our view, everything negative on the table has been priced in and thus has room to get back on track supported by global momentum. Frantisek Taborsky GBP: Decision Maker Panel survey is key today As above, we note that short-dated GBP rates have not moved as much as EUR and USD rates this week. This trend was helped yesterday by very equivocal comments from Bank of England Governor, Andrew Bailey, who would not commit to further tightening. This has weighed on sterling and has unwound any gains from the Windsor Framework agreement.  We have a down arrow on GBP today, because of the 1030CET release of the BoE's Decision Maker Panel survey. The BoE takes a lot of notice of this and what it says about tight labour markets. This has pointed to an easing in tight labour conditions including marginally weaker wage growth and less difficulty in recruitment. Assuming those trends continue, GBP interest rates can continue to fall behind those of the eurozone and the US and see some modest sterling downside. EUR/GBP could make a run at the 0.8930 area. Also today we have BoE speakers in the form of Silvana Tenreyro (super dove, not market moving) and Chief Economist, Huw Pill (16CET). He should follow Andrew Bailey's line and again probably presents a slightly negative event risk to sterling. Chris Turner BRL: When politics and central banking collide The Brazilian real has been steady against the dollar, but weaker against our favourite currency in the world - the Mexican peso. We feel that political headwinds are growing for the real. Because of fiscal pressure, the new Lula administration is not rolling over fuel subsidies - these fuel subsidies had allowed Brazilian headline inflation to take a sharp turn lower last year. But having been elected on a mandate on supporting the less well-off, politicians are now pressuring Petrobras to cut its margin on fuel sales such that the removal of subsidies does not see fuel prices rise as much. At the same time, politicians are keen for the central bank to start cutting interest rates - where the policy rate currently stands at 13.75%. However, in its most recent update, the central bank has warned about long-run inflation expectations increasingly moving away from target - clearly at odds with calls for rate cuts. With core rates so high, we doubt investors will have too much patience for this kind of friction and we would favour further under-performance of the real. Were the politicians to increase their pressure on BACEN - the Brazilian central bank - then USD/BRL could trade up to 5.40. Chris Turner Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
US core inflation hits 5.5% and it's the second lowest reading since November 2021

Judging from Ebury analyst comment, the difference between BoE rate hikes expectations and probable variants could help British pound

Enrique Díaz-Álvarez Enrique Díaz-Álvarez 06.03.2023 15:48
G10 currency trading was fairly uneventful last week, as the dollar had a mixed reaction to the relentless march higher in interest rates, as risk assets took it in stride. Emerging market currencies were the stars last week, led by the Latin American ones. The reopening of the Chinese economy after the end of COVID lockdowns is going better than expected, boosting sentiment on commodity exporting countries. The Chilean and Mexican pesos topped the charts, rallying by over 2% against the US dollar. In Europe, yet another upward surprise in inflation, with the core climbing to yet another record high, meant higher European rates and a stronger euro. The trend is now that strong economic and inflation data in the US is being matched elsewhere, and rates are rising in parallel across most economic areas, so that the dollar fails to benefit much. This trend will be tested in the coming days by Fed Chair Powell’s semi-annual testimony to Congress on Tuesday, and the US payrolls report on Friday. Markets are expecting a slowdown in job creation from the monster levels reported in January, but to a level still consistent with an extremely tight labour market. We will be focusing mostly on the wage numbers, where an upward surprise may provide further fuel for the increase in interest rates. GBP News out of the UK last week was in line with what we have come to expect: stronger than expected economic data and confusing Bank of England communications. BoE governor Bailey provided very little clarity on future policy, warning that rates may have peaked, while failing to rule out additional hikes. In our view, another hike at the 23rd March meeting is all but guaranteed, and with limited fresh data out between now and then, markets may be slightly underpricing the possibility of another 50bp hike. January monthly GDP is the main data point on tap this week, but we continue to think that the gap between market expectations of Bank of England hikes and likely outcomes should be a tailwind for sterling in the coming weeks. EUR The factors supporting higher interest rates in the Eurozone, and consequently a stronger euro, remain firmly in place. On the one hand, inflation continues to surprise the upside. There is no sign as yet that core inflation has peaked, unlike the US, and indeed this key print rose to a fresh record high in February. Read next: In crude oil, we are increasingly likely to see a year of two distinctive halves| FXMAG.COM On the other hand, growth numbers continue to surprise on the upside and the impact from the fast Chinese rebound has yet to be felt. Rates in Europe are rising even faster than in the US and this is putting a floor under the common currency. Retail sales for January will be in focus Monday, but the euro may largely trade off news elsewhere this week. USD Strong business activity PMI and weekly jobless numbers confirmed that the US economy is so far shrugging off the impact of rate increases and is, if anything, picking up speed. This brings up the possibility of a 6% peak in Federal Reserve rates, although the US dollar is not benefitting as much as rate expectations elsewhere are rising even faster. The key now is whether the Fed switches back to 50bp hikes at every meeting until a clear downward trend is evident in the monthly inflation numbers. Powell’s testimony to Congress this week will be as critical (if not more) as the payrolls report on Friday. Given the recent string of upside surprises in US data, we think that another hawkish turn is all but guaranteed. To stay up to date with our publications, please choose one of the below: 📩 Click here to receive the latest market updates👉 Our LinkedIn page for the latest news✍️ Our Blog page for other FX market reports 🔊 Stay up to date with our podcast FXTalk Source: Emerging market currencies celebrate Chinese optimism | Ebury UK
Euro's Rally Stalls as Focus Turns to Inflation and Data Disappointments

FX Daily: Dollar can hold gains on limited Powell pushback

ING Economics ING Economics 07.03.2023 10:44
The highlight of today's FX session will be Fed Chair Powell's first leg of his monetary policy testimony to Congress. He speaks in the Senate at 16CET today. While welcoming the start of a broad disinflation process in early February, we doubt Powell will push back much against expectations of another 75bp+ of Fed hikes. This should see the $ hold gains Federal Reserve Chair Jerome Powell USD: Little incentive for Powell to push back Monday's overnight FX session was another quiet one. The highlight was a dovish 25bp hike from the Reserve Bank of Australia (RBA). It still promised more monetary tightening ahead, but the language softened on the immediacy and magnitude of further rate increases and prompted yields at the short end of the Australian curve to drop 13bp and AUD/USD to drop 0.5/0.7%. Elsewhere, what was seen as encouraging Chinese net trade figures failed to budge USD/CNH from the 6.94 area. On to today and the highlight will be Fed Chair Jerome Powell's testimony on monetary policy. This comes at a time when the market has priced in 25bp hikes at the March, May, and June meetings plus is half thinking about another 25bp hike in the third quarter. The big, hawkish adjustment in Fed tightening expectations was driven by the data last month, not Fed speak. Having said that, however, there were a few FOMC non-voters pushing the view that the Fed should have hiked 50bp on 1 February rather than 25bp. Interesting for markets today will be whether Powell does say the Fed would be open to 50bp hikes in the future – presumably, he cannot rule that out. He may also now be drawn out on what the Fed considers the terminal rate (5.40/5.50% is priced at the moment). He may try to elaborate on remarks made on 1 February that the broad disinflation process has started, but with inflation proving sticky (not just in the US, but around the world), consumption and employment trends staying firm and risk assets supported, it would seem unlikely he chooses to push the 'all-clear' inflation narrative today. His remarks can probably see the dollar gently bid. A better chance of the dollar and US yields reversing February strength probably comes with Friday's US February jobs release, where ING's US economist, James Knightley, looks for a softer number.  It does not look like we have any hawkish ECB members due to speak today (hawkish ECB comments having helped European currencies and weakened the dollar yesterday), which suggests DXY might nudge back to the top of a short-term 104.00-105.00 range. In the medium term, we retain the view that the dollar will break lower later this year – please see our latest FX talking update. Chris Turner EUR: European hawks in focus Helping EUR/USD yesterday were comments from ECB ultra hawk, Robert Holzmann, that the ECB should deliver four more 50bp rate hikes. That would take the deposit rate to 4.50% versus the already aggressive 4.00% currently priced. ECB Chief Economist Philip Lane tried to calm things down by suggesting the ECB should not go onto autopilot after what should be a 50bp hike this month. But the market is more sensitive to the hawks given the sticky inflation data. We do not see any ECB speakers scheduled today. Data today will be the ECB consumer expectations survey released at 10CET, though January retail sales data released yesterday mildly disappointed. As above, Powell's testimony should dominate today and might nudge EUR/USD back to the lower end of the 1.0600-1.0700 range. Elsewhere today we have a rare speech on monetary policy from Swiss National Bank (SNB) president Thomas Jordan. He speaks at 19CET today. He will probably have had to tweak his speech after yesterday's release of Swiss February CPI data, which rose 0.7% month-on-month, matching the highs from last summer. The SNB takes its inflation-targeting mandate very literally and this inflation data should prompt some sharply hawkish rhetoric. We and the market look for a 50bp SNB hike on 23 March. And the market looks for a further 50-75bp of tightening after that. Anyone in need of securing CHF balances or CHF funding in the near term should probably do so before tonight's speech. Chris Turner   GBP: Strong second-tier data fail to lift sterling Following on from stronger service sector confidence data, yesterday saw a very positive PMI release for the UK construction sector. And this morning's BRC Like-For-Like Retail sales data has also come in at a strong 4.9% year-on-year for February. This strong second-tier data have not had much impact on sterling, however, where hawkish ECB remarks have dominated and EUR/GBP has pushed back to the top of its 0.88-0.89 range. We suspect that will be the direction of travel this year – helped later in the year when the Bank of England shifts into a formal pause with its tightening cycle. Cable is trading well inside last week's 1.1925-1.2145 range and we would have a slight downside bias given Powell's testimony today. Chris Turner ILS: Shekel searches for stability As we discuss in this month’s FX Talking publication, the normally stable shekel has been hit hard over the last month. USD/ILS has risen 10% – seemingly on the Israeli government’s desire to push through very contentious judicial reform. Opponents of this proposed policy in Israel's lucrative tech sector have even suggested that IPO proceeds would not be brought back to Israel unless this policy proposal was altered. The Israeli foreign minister criticising the Bank of Israel’s (BoI's) recent 50bp hike has not helped the shekel either. Yesterday, however, the shekel got a lift from the Israeli president suggesting that an agreement on judicial reform was ‘closer than ever’. Details to back those comments were scant. At the same time, we noted that the February release of BoI FX reserve data suggests there had been no FX intervention to support the shekel last month. That may come as a disappointment to some looking for the very interventionist BoI to step into the market. Perhaps the criticism over the rate hike made FX intervention too political? We do like the shekel multi-quarter and it had been one of our top picks for the year assuming the dollar bear trend does re-assert itself in the second half. But investors will very probably want to see some concrete political agreement on these judicial reforms before rebuilding long positions in the shekel. Chris Turner Read this article on THINK TagsFX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Gold Trading Analysis: Technical Signals and Price Movements

FX Daily: What to expect from another day of market mayhem

ING Economics ING Economics 14.03.2023 10:02
As markets continue to address the fallout of the SVB and Signature collapse and monitor US regional banks, a big question is emerging: will the Fed stop early? Markets are betting heavily it will, and this can mean a much weaker USD, but it’s not worth looking any further than the very short term for now. US CPI today will obviously have a much smaller impact HSBC has bought the embattled UK arm of Silicon Valley Bank USD: Risks of another leg lower The fallout of the collapse of Silicon Valley Bank and Signature Bank is still unfolding. Let’s start by taking stock of what's happened since markets reopened after the weekend: Depositors at SVB and Signature could access their funds on Monday thanks to intervention by US regulators, which aimed at preventing contagion. The Fed’s $25bn Bank Term Funding Programme came into action, offering advantageous conditions for banks that can get loans with collaterals valued at par – therefore avoiding incurring losses when selling securities that have lost in value. It remains to be seen to what degree this will ultimately be leveraged. The repricing in rate expectations has been titanic. In the US, markets now see only a 50% chance of a 25bp hike in March, and fully price in 67bp of cuts by year-end. US 2-year yields edged below 2.0%, more than 100bp below Thursday’s levels. US equities have steadied but failed to rebound despite the Fed’s moves to calm investors. In FX, the dollar drop has been quite contained: in this article, we explain why EUR/USD hasn’t spiked on the huge Fed repricing. So, what can we expect today? Volatility is likely to remain the name of the game. US stock futures point at a marginally positive open this morning, but markets are constantly monitoring incoming news on the health of other financial institutions, in particular US regional banks. It’s worth keeping an eye on the share price of First Republic Bank (another Californian institution) today, after a 62% drop in yesterday’s trading session. Inflation data will be released in the US today: consensus is for a 0.4% month-on-month, 5.5% year-on-year read. Should we see some “orthodox” reaction in rates to a potential data surprise, this could be a signal that some degree of confidence has returned to the market. In FX, we think the balance of risks is tilted towards another leg lower in the dollar. The Fed and US regulators have taken decisive steps to restore market confidence and may be ready to do more (on the monetary side, when it comes to Fed) should financial risks fail to abate. While it is true that the move in rates appears overblown, there is ample room for a bounce in risk sentiment, and FX is currently much more sensitive to equities than rates. AUD and NZD still look attractive in a risk recovery. Should equities fail to rebound, CHF and JPY may emerge as outperformers. It will be interesting to follow where the political discussion goes when it comes to banking regulation. Clearly, this has now become a very central topic in Washington. Francesco Pesole EUR: Capped, for how long? EUR/USD is holding up at 1.07 despite the huge move in US rates. Admittedly, eurozone rates have also followed with a mammoth repricing, and markets are now even doubting the 50bp hike which was “promised” by Christine Lagarde for the March meeting. We teamed up with our rates colleagues and tried to give some clarity about the market impact of Thursday’s ECB announcement in our ECB cheat sheet. Despite markets only pricing in 38bp of tightening this week, our economics team only expect the recent financial turmoil to impact the discussion on the rate path beyond the March meeting, and we therefore stick to our original 50bp call as the ECB remains – on paper – focused on fighting inflation. Read next: The softening in some of the metrics in the February jobs report is easing fears of a more hawkish Fed, especially in light of the failure of SVB| FXMAG.COM From an FX perspective, this would be good news for the euro, but: a) a repricing higher in rate expectations would still require President Lagarde to convince markets at the press conference (which will prove exponentially more challenging given recent developments); b) rate differentials remain an absolute secondary driver of EUR/USD, and the direction for the pair is set to be determined almost solely by how the Fed reacts – or “overreacts” – to the SVB fallout. For now, we target 1.08-1.09 by the end of this week. Francesco Pesole GBP: Upside despite potential hold by the Bank of England Market focus in the UK has been centred around HSBC’s purchase of SVB UK, an operation which was championed by the UK government. It is hard to draw any obvious conclusions from an FX perspective, especially in the current market environment where we could see large daily swings in equities driving a pro-cyclical currency like the pound. On the data front, data released this morning show clear signs that wage growth might have finally peaked, as recent BoE surveys previously hinted. The 3M/3M annualised rate of growth – one of the better measures of momentum in the pay numbers – has slowed noticeably over recent months. This will be welcome news for the BoE and does question whether the Bank will indeed hike by 25bp next week amid the SVB fallout. Even if the BoE decides to hold, this should not prevent Cable from testing the January 1.2450 highs if the Fed pivots to the dovish side and risk sentiment bounces back. Francesco Pesole CEE: This market leaders remain most sensitive Today's regional calendar does not have much to offer. This morning, we saw industrial production data from Romania, which posted a decline of 6.1% YoY for January. Later, retail sales for January in the Czech Republic will be released, which should confirm the sharp year-on-year decline. In the FX market, the Hungarian forint and the Czech koruna remain the main focus again, failing to reverse further losses yesterday. On the other hand, the Polish zloty and Romanian leu have maintained admirable resilience to global turbulence. The Hungarian forint seems to be the most sensitive to market sentiment and energy prices in the region at the moment, with the koruna a close second. Both factors have pushed the forint and the koruna higher in recent days, but yesterday's US trading and the reversal in gas prices indicate that the sell-off should end today and both currencies should at least stabilise at current levels, supported by a higher EUR/USD. Frantisek Taborsky Read this article on THINK TagsFX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Rolls-Royce share price has increased by over 60% since the start of the year

Michael Hewson from CMC Markets draws attention to the UK inflation, which increases quickly, but shrinks slowly and it's still 5 times higher than the BoE target

Michael Hewson Michael Hewson 17.03.2023 20:21
UK CPI (Feb) – 22/03 – falling energy prices have offered some respite to hard-pressed consumers in recent months, most notably at the petrol pumps. The onset of spring and warmer weather could also offer some relief, however, at the last set of CPI numbers in January, headline inflation fell to 10.1%, while core prices also fell back from 6.3% to 5.8%.   Read next: Fed to hike 25bp should conditions allow| FXMAG.COM While this is welcome it is little comfort given that food prices have continued to rise sharply, rising 16.7% in January. One other thing that we also know about inflation in the UK is that it goes up quickly and comes down slowly, and with wage inflation also rising it is likely to remain sticky. It's also important to remember that it is still 5 times higher than the Bank of England's 2% target, even if we are seeing some predictions that it could fall back to 2% by the end of this year. Expectations are for headline inflation to fall to 9.8% and core prices to 5.7%.
UK Gfk Consumer Confidence index got better fourth month in a row

According to Michael Hewson from CMC Markets, Bank of England decision may be split, and British pound may drift lower

Michael Hewson Michael Hewson 17.03.2023 21:00
  Bank of England rate decision – 23/03 – the big question facing UK markets right now is how close the Bank of England is to its terminal rate, with a base rate currently at 4%, and whether recent events across the banking sector will temper its decision to raise rates this week. Over the past few days, we've seen market estimates of the terminal rate fall from 4.8%, closer to 4.25%, due to concerns over the stability of the banking sector, as a result of the Credit Suisse and SVB inspired volatility of the last few days. Recent comments from Governor Andrew Bailey have helped to give the MPC some wriggle room this week, when he said that nothing had been decided when it came to further hikes in rates. Bailey did go on to say that more rate rises would likely be needed and that the lessons of the 1970s ought not to be forgotten. His recent comments that the economy was evolving in line with expectations were particularly laughable given that a few months ago the central bank was saying that the UK economy was already in recession, and now it looks like it may avoid one. The MPC continues to remain split with Tenreyro and Dhingra both opposed to further rate hikes even with headline CPI still above 10% and core prices at 5.8%, and wages at 6.5%. Hawkish MPC member Catherine Mann has continued to insist that more hikes are warranted given stickier inflation dismissing the idea of a pivot to a looser policy, although recent events could temper her outlook here. She did go on to insist that rates would have to stay higher for longer in order for inflation to return to target. This stance seems entirely more credible than the dovish stance of Tenreyro and Dhingra given how stickier UK inflation has always tended to be historically. This is mainly down to the transmission mechanism of a weaker pound, which tends to put a floor under prices. Markets are currently looking for 25bps this week, however, it wouldn't be beyond the realms of possibility if we got no change at all given the recent volatility inspired by events in the US, around the collapse of Silicon Valley Bank, and the events surrounding Swiss bank Credit Suisse, which is creating huge ripples through the European banking sector. What we do know is it's likely to be another split decision and the pound will probably drift lower once Bailey opens his mouth.    
How investors can best position themselves amid unclear Federal Reserve rate outlook?

FX Daily: Hiking confidence

ING Economics ING Economics 22.03.2023 13:21
It’s a close call, but we expect a 25bp hike by the Fed today. Ultimately, Powell’s primary goal is to restore investor confidence and a hold might signal a lack of trust in the financial system. The dot plots may also be revised slightly higher, and the dollar could recover a bit. Still, the gradual improvement in sentiment points to another USD decline ahead   Federal Reserve Chair Jerome Powell USD: Fed to hike by 25bp Late last week, we published our FOMC meeting preview and discussed how our base case was for a 25bp rate hike if market conditions didn't deteriorate further. Since then, the US regional banking crisis has remained broadly unresolved, but the Treasury is now examining an extension of the FDIC deposit guarantee (Secretary Janet Yellen pledged intervention if needed) and the Federal Reserve itself boosted money market liquidity via higher-frequency USD swap line operations. In Europe, sentiment appears to be stabilising after markets digested the fallout of the UBS-Credit Suisse deal for some categories of bondholders (AT1, in particular). We recommend reading this note from our credit colleagues on the topic “Credit chaos: is the worst behind us?”. Ultimately, two straight days of gains in global equities tell us that investors have indeed turned tentatively more optimistic about the financial turmoil. In other words, even if it is still a close call, market conditions have – if anything – become slightly more favourable and a 25bp hike is our base case for today’s FOMC announcement. We think such a move is not purely motivated by the inflation battle, but probably fits the need to send a message of confidence to the financial system. Pausing rates after having opened the door to a 50bp hike only a few weeks ago might be read as an emergency move and risks exacerbating market concerns about financial stability. Markets have also moved closer to pricing in such a scenario as sentiment recovered and currently factor in around 20bp (or an 80% implied probability). If a 25bp hike is now a more widely expected outcome, markets will zoom their lenses on: a) financial stability assessment and tools; b) forward guidance, especially the dot plots. On this first point, a lot of focus will be on details about the new Term Funding Facility, fundamentally because this will re-build bond holdings into the Fed balance sheet, which may appear inconsistent with the Fed’s quantitative tightening policy. When it comes to the dot plot, our economics team expects the FOMC median projections to signal a 5.4% policy rate for 2023, up from 5.1% from the December update. This could also have a symbolic value: signalling that the Committee is confident the banking crisis will be resolved and the inflation battle can return as the priority. Finally, it will be important to see how much Fed Chair Jerome Powell stresses how the current financial turmoil is by itself a tightening of financial conditions and can accelerate the disinflationary process. In terms of the FX impact, we think there is room for the dollar to recover some ground on the back of a moderate hawkish surprise by the Fed. However, we are observing a gradual improvement in investor sentiment on the global financial situation – and especially in Europe – which makes us tilt to a bearish short-term bias in the dollar. That is, naturally, highly conditional on no further setbacks in the ongoing banking crisis – which is a big caveat. Francesco Pesole EUR: Equities behind the euro rally A soft ZEW print yesterday was not enough to halt the good EUR/USD momentum, which boils down to European equities’ outperformance versus US stocks as well as the general improvement in risk sentiment. We are observing how markets are returning to some pro-cyclical European currencies to the detriment of those Asian G10 currencies (JPY, AUD, NZD) that appeared as safe havens last week. We think that today’s FOMC announcement can trigger some recovery in the dollar, and therefore see mostly downside risks for EUR/USD. At the same time, regulators’ efforts to contain the adverse side-effects of the UBS-CS deal for some bondholder categories appear to be yielding some positive effects for European sentiment, and possibly means that the balance of market concern is now tilted to the US given the still unresolved regional banking crisis. Beyond the FOMC impact, we think there is room for a break above 1.0800 in the near term as long as sentiment continues to stabilise. The European Central Bank is playing a role in this, by staying rather hawkish on monetary policy while opening the door to deploying financial stability tools. There are a lot of speakers today, as the ECB holds a conference in Frankfurt: President Lagarde, Chief Economist Philip Lane, and then members from all parts of the dove-hawk spectrum. Still, the impact on the euro may ultimately be small given the proximity to the FOMC announcement. There are no market-moving data releases to flag in the eurozone calendar today. Francesco Pesole GBP: Surprise acceleration in inflation On Monday, we had called for a break higher in EUR/GBP as we deemed the recent resilience in the pound versus the euro as hardly sustainable. The pair traded close to 0.8850 yesterday but dropped back below 0.8800 this morning after a surprise acceleration in UK inflation. Headline CPI year-on-year rose from 10.1% to 10.4%, defying expectations for a drop below 10.0%. Core inflation also accelerated, from 5.8% to 6.2%. This morning’s data – along with the tentative recovery in market sentiment - reinforces the prospect of a Bank of England rate hike tomorrow (which is also our base case). Still, our economics team still deems a May pause as highly likely, and we continue to see the direction for EUR/GBP as bullish over the coming weeks.  Francesco Pesole CEE: US dollar will slow recovery Yesterday's prints from Poland finished the monthly set of data confirming the weak economy. Today we will see only consumer confidence in Poland while in the Czech Republic, the Ministry of Finance will test the primary bond market for the first time since the recent rally to see whether Czech bonds are still attractive with yields well below 5%. The FX market in the region yesterday confirmed the positive sentiment coming from the core market, supported by a higher EUR/USD. The rally led by the Hungarian forint and the Czech koruna will follow a further decline in risk aversion, in our view. However, the Fed and a stronger US dollar may be a drag on the EM recovery in the days ahead. Even so, we should see further gains in the CEE region. In our view, the Hungarian forint should settle below 390 EUR/HUF and the Czech koruna below 23.75 EUR/CZK. The Polish zloty and Romanian leu are likely to continue to stagnate at current levels and as we mentioned earlier, this part of the region will have to wait for a stronger move higher in EUR/USD. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Euro against US dollar and British pound - Technical Analysis - May 17th

FX Daily: A spoonful of sugar

ING Economics ING Economics 23.03.2023 13:36
Whether it’s a song or a slightly ominous bank run scene, the Fed brought back memories of a famous 1964 film this morning. In essence, Powell’s attempt to sweeten the pill for markets came at the cost of unclear communication, so the market’s pricing and the dollar will remain a function of banking stress. Today, expect hikes in the UK, Switzerland and Norway Mary Poppins statue at Leicester Square USD: Compromise comes at a price The well-known verse “a spoonful of sugar helps the medicine go down” might have inspired Jerome Powell yesterday as he and his FOMC colleagues offered markets a few dovish hints while delivering a potentially painful 25bp rate hike. As discussed in our meeting review note, those hints primarily consisted of the view that “some additional policy firming may be appropriate" - not  “will be appropriate” as before - and on keeping the median dot plot estimate for 2023 unchanged at 5.1%. The statement was paired with a well-telegraphed message of trust in the solidity of the US banking system, and Powell did offer modest pushback against rate cut expectations during the press conference. However, we doubt the dovish market reaction was either a surprise or an unwanted development for the Fed.   Many had argued that one objective of the Fed yesterday was to avert a major setback in financial market sentiment, the market reaction would suggest this was achieved, and the drop in equities might actually be mostly a function of Secretary Janet Yellen dismissing speculation that the Treasury is planning to provide “blanket” deposit insurance to banks. However, that came at a price: a considerably less clear Fed communication. No trade-off between price and financial stability is essentially possible only if financial conditions tighten (due to banking stress) enough to bring down inflation, or if regulators and other institutions effectively manage to restore market confidence without anything more than the financial stability tools offered by the Fed. This second scenario requires indeed that, as Powell stated, the US banking system is very solid. Markets are, so far, not trusting the ability of the Fed to treat inflation and financial stability independently. This looks unlikely to change soon, which means that rate expectations should remain strictly tied to developments in the banking crisis. And this brings us to the FX implications. The dollar weakened on the back of the moderate dovish surprise by the Fed yesterday, and reluctance from the Treasury to consider an extension to the deposit insurance. At the same time, a new regional lender, PacWest is facing increasing turmoil on deposit outflows and First Republic’s rating was cut from BB to B by Fitch. So, with a market not trusting the more ambiguous Fed communication and the US regional banking crisis far from resolved, it looks like investor bias on the Fed may stay on the dovish side. This should translate into a continued bearish bias for the dollar, primarily against European currencies should the stabilisation in European sentiment continue. Still, we see a high chance of seeing small USD upside corrections on the way, rather than a straight-line USD depreciation.  Francesco Pesole EUR: Central bank meetings in Switzerland and Norway EUR/USD is now officially eyeing the 1.1000 level. We discussed yesterday how that is a key benchmark level for the pair, and we think a break higher would likely mark a rather strong conviction call from the market that the Credit Suisse shock has been successfully absorbed by European markets. That may be a bit premature, and we flagged in the USD section above how the USD bearish bias surely doesn’t prevent EUR/USD corrections on the way. In the current elevated volatility environment, those corrections can be quite pronounced, even if short-lived. Today’s eurozone calendar includes consumer confidence data for March as well as a few European Central Bank speakers, although our focus in Europe today will mostly be on central bank meetings in Switzerland and Norway. The Swiss National Bank faces a monetary policy decision in a very turbulent time, as it faces the challenging aftermath of the Credit Suisse rescue deal. Originally, this had appeared to be a no-brainer for the SNB – a 50bp rate hike – and consensus expectations are still pointing at such a move. Despite admitting this has become a much closer call recently, we think the past few days of tentative calm in markets will allow the SNB to deliver the half-point increase today. We must remember that policy meetings in Switzerland occur only once a quarter and that the latest inflation readings surprised on the upside. Read next: Singapore: Core inflation steady while headline inflation decelerates further| FXMAG.COM We expect a hike in Norway as well, but by 25bp, as previously announced and widely expected. Norges Bank will also publish the updated rate projections, which currently embed only another 10bp worth of tightening. We think NB could revise the peak rate higher on the back of higher inflation and despite the recent turmoil, if nothing else to counter the recent NOK weakness. We expect gains in both the Swiss franc and krone today. Francesco Pesole GBP: BoE to hike The ECB and Fed rate hikes mean that the chances of the Bank of England following suit with a 25bp move today are quite high, even more so following the surprisingly high inflation readings published yesterday. Here is our full market guide to today’s BoE meeting. Markets are now fully pricing in a 25bp scenario and will therefore look for some indications that the further 40bp currently embedded in the GBP OIS curve is warranted. The division within the BoE’s MPC may be nothing but exacerbated by the recent market turmoil, the risk is that markets may receive very little guidance on future policy paths. Ultimately, the pound may rapidly default to being driven by external factors: primarily the banking situation and global risk sentiment. A test of 1.25 in cable in the coming days is looking quite likely. Francesco Pesole CEE: Strong euro a welcome boost for region Today's calendar in the region is basically empty and hence the main focus will be on the reaction to yesterday's Fed decision. Higher EUR/USD is good news for FX and the CEE region should thus continue to rally. On the other hand, the negative sentiment left by the Fed could put a bit of a damper on the positive push coming from EUR/USD. However, today should not be all about the Hungarian forint and the Czech koruna as in the last few days. As we mentioned earlier this week, the Polish zloty and the Romanian leu just needed a stronger euro to strengthen, in our view. Unless negative market sentiment prevails today, the entire region could see decent gains. Still, the previous leaders, the forint and the koruna, should remain at the forefront of the region and move towards 385 EUR/HUF and 23.60 EUR/CZK. The Polish zloty could finally trade out of the March range of 4.680-4.720 EUR/PLN and test lower levels. The Romanian leu could look lower below 4.91 EUR/RON for the first time since the middle of February. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Deciphering the Economic Puzzle: Unraveling Britain's Mixed Signals

FxPro Analyst says Bank of England commentary sounds "relatively dovish" as the CB raises the rate by 25bp

Alex Kuptsikevich Alex Kuptsikevich 23.03.2023 14:34
The Bank of England raised its interest rate by 25 points to 4.25%, in line with market expectations. Two hawkish members voted to keep rates on hold for the third meeting, while seven others voted against it. Commenting on the decision, the BA noted the improved global growth outlook and now expects UK GDP to grow in the second quarter, up from a 0.4% contraction previously. Separately, the fall in gas and oil futures prices is noted. The Bank of England has described the recent unexpected rise in inflation as temporary and continues to see a significant slowdown over the year. This is in no small part due to the current budget changes. The Bank of England said further policy tightening might be needed if there is evidence of additional inflationary pressures in wages and services costs. This sounds like relatively dovish commentary, expressing more hope than confidence in a sustained return of inflation to the 2% target and the financial sector's resilience. Indirectly, the regulator's rhetoric suggests that the baseline scenario remains for rates to stay on hold. Read next: Swiss National Bank hiked the rate by 50bp lifting it to 1.5% | FXMAG.COM British pound against US dollar GBPUSD initially reacted positively to the rate decision, returning to the day's high of 1.2340, but at the time of writing has pulled back below 1.2300. At the same time, the Pound's momentum against the Dollar is primarily driven by the Dollar. In our view, the GBPUSD completed an almost three-month correction in early March, with the next target near the upper end of the trading range since December at 1.2430. Likely, the strengthening will not stop there, and the pair will have further strength to reach a new level, targeting 1.30.
Bank of England expects inflation to to fall to 3% within 12 months. US inflation decreases a little

UK economy: inflation exceeded expectations, Nasdaq 100 finished higher yesterday

Michael Hewson Michael Hewson 24.03.2023 13:54
European markets had a disappointing day yesterday with the FTSE100 getting hit particularly hard as some of its big-cap companies got clobbered, on the back of some ex-dividends and weakness in banks and energy stocks. US markets on the other hand finished the day higher led by the Nasdaq 100, as a sharp slide in US 2-year yields helped to underpin a strong session in a reversal of the declines the day before. Equity markets on both sides of the Atlantic have experienced a great deal of chop this past few days as investors look for clues as to where we go next when it comes to an overall sense of direction. Over the past week, we've seen central banks raise rates again, however, there appears to be a sense that we may well have seen or be close to the peaks when it comes to the rate hiking cycle. This is being reflected in sharp declines in short-term yields, however, markets also appear to be pricing in the prospect of rate cuts this year. This seems somewhat premature and something that stock markets have yet to price. Despite the positive finish on Wall Street, European markets look set to lose out with a negative open, as US markets start to come back into favour. Earlier this week UK inflation in February unexpectedly jumped higher, driven by big increases in food prices, as well as sharp rises in restaurant and other hospitality bills. With food price inflation jumping to over 18%, today's February retail sales numbers could well get a similar Valentine's Day boost, albeit in fairly selective areas. One thing that has been notable so far this year is that while consumers have shown a willingness to spend money, they've been particularly selective when it comes to the types of items they choose to allocate their cash to. Read next: US dollar and CHF could be safe havens in the event the turmoil in banks intensify globally| FXMAG.COM In January retail sales posted a surprise increase of 0.5%, which confounded expectations of a -0.3% decline. Today's February numbers could well benefit from a Valentine's Day pick-up as well as increased demand for holiday bookings. In recent company updates airlines have indicated there has been decent demand for seats as well as holiday packages which could also help on the margin. Market expectations are for a gain of 0.2%, however, bearing in mind that January missed expectations by so much it wouldn't surprise if February came with a surprise miss as well. We'll also be getting the latest insight into economic activity for March in France, Germany, and the UK in the form of the latest manufacturing and services flash PMIs. Over the past few months, there has been increasing evidence of divergence between France and Germany when it comes to economic activity in that the French economy appears to be slowing, while German economic activity is picking up slowly albeit from a low base. Economic unrest in France could well make itself felt in the latest manufacturing and services PMIs with expectations of 48 and 52.5 respectively. In Germany, expectations are for modest improvements to 47 for manufacturing and 51 for services. In the UK the services sector underwent a big rebound in January to 53.5, from 48.7 in December, with the bigger question being whether that recovery can be sustained. Initial estimates suggest yes with a forecast of 53. Manufacturing is expected to improve modestly to 49.7 from 49.3.    Forex EUR/USD – moved through the 1.0800 area earlier this week and has the potential to retest the recent range highs at 1.1030. Support should now come in at the 1.0760 area, with stronger support at the March lows at 1.0520. GBP/USD – has struggled to maintain a foothold above 1.2300 pushing up to 1.2343 yesterday. The pound continues to feel vulnerable to slipping back while below the highs for this year at 1.2447. We currently have support at the 1.2170 area, and below that at 1.2020. EUR/GBP – ran out of steam at 0.8865 yesterday, but still have trend line resistance at the 0.8900 level. Also have strong trend line support at 0.8720, from the lows last August. Support also at 0.8780. USD/JPY – slipped back towards support at the 130.20 area, with a break below the 130.00 potentially targeting a move towards 128.20. Currently has resistance at 131.20.   FTSE100 is expected to open 40 points lower at 7,459 DAX is expected to open 70 points lower at 15,140 CAC40 is expected to open 50 points lower at 7,089
The UK's economic output remains 0.6% below its late 2019 level, making it the only G7 nation yet to recover from the pandemic

The UK's economic output remains 0.6% below its late 2019 level, making it the only G7 nation yet to recover from the pandemic

Matt Weller CFA Matt Weller CFA 03.04.2023 16:18
We asked Matt Weller (FOREX.com) for a comment on the UK GDP print released last Thursday. Let's have a look what the analyst said. Matt Weller (FOREX.com): The UK economy narrowly avoided a recession as it registered 0.1% growth in Q4 2022, up from the initial estimate of zero growth. The Q3 GDP contraction was revised to -0.1%, smaller than initially reported, according to the Office for National Statistics (ONS). Despite a cost of living crisis, high inflation, and concerns over weak growth prospects, the UK has thus far managed to stay out of recession Matt Weller (FOREX.com): However, the UK's economic output remains 0.6% below its late 2019 level, making it the only G7 nation yet to recover from the pandemic. Despite a cost of living crisis, high inflation, and concerns over weak growth prospects, the UK has thus far managed to stay out of recession. The IMF had predicted in January that the UK would be the only G7 country to contract in 2023, largely due to an inflation rate exceeding 10%. The dominant services sector grew by 0.1%, with travel agents experiencing an 11% increase, indicative of rising demand for holidays. Manufacturing expanded by 0.5%, and construction grew by 1.3%. Read next: Unexpected drop in Swiss inflation may complicate SNB decision| FXMAG.COM The market implications of this report are limited, given it is a revision to a revision of a report summarizing economic growth from 90-180 days ago, but at the margin, it points to slightly stronger-than-feared growth in the UK.
What are the possible scenarios for EUR/USD? Euro against US dollar - inidicator analysis

FX Daily: Bank of England still averse to the dovish pivot?

ING Economics ING Economics 11.05.2023 11:00
We expect a 25bp hike (7-2 vote split) by the BoE today, in line with market pricing and consensus. Focus will be on new forecasts (especially 2-year CPI) and forward guidance. Despite a lot more tightening priced into the Sonia curve, the MPC may resist the temptation to push back against hawkish bets, and sterling may hold on to recent gains for a bit longer Governor of the Bank of England, Andrew Bailey USD: Glimmers of hope from April inflation report Our economics team dissects yesterday’s US inflation report in this article, highlighting how price pressures remain elevated (another 0.4% month-on-month core print, in line with expectations), but also how there are some signs that service sector inflation is moderating, with used cars doing the heavy lifting in keeping prices sticky. With the Fed having focused on the ex-energy and ex-housing service inflation developments, markets probably read those encouraging signs and took the opportunity to increase their easing bets in the latter part of the year. Now, three full 25bp rate cuts are priced into the USD OIS curve by December. Such a benign move in swaps and FX would have normally coincided with an improved environment for equities, but stocks have struggled to recover, with stalling debt-limit negotiations in the US still weighing on sentiment. The market’s sensitivity to this topic is growing each day and there may be growing fears that an adverse market event might be ultimately needed to break the political stalemate. Such a scenario would see a material upward correction in the dollar in the near term, even though the long-term outlook for the greenback would not really turn any less negative – in our view – given the prospect of large cuts by the Fed starting from late this year. Today, PPI and jobless claims data, as well as speeches by FOMC members Neel Kashkari and Chris Waller will be in focus in the US. Still unstable risk sentiment suggests that any drops in the dollar may not have legs until there are positive developments on the debt-ceiling negotiations. Francesco Pesole EUR: Contained impact from ECB speakers European Central Bank speakers are the only highlight in an otherwise empty calendar in the eurozone in the second half of the week. The most prominent hawkish member, Isabel Schnabel is due to speak today, along with Pablo De Cos and Luis de Guindos. However, the latest ECB remarks have not had a huge impact on the euro. After all, a 25bp hike in June is highly likely after President Christine Lagarde explicitly said the ECB is not pausing, and it is almost fully priced in; beyond that, there is around 22bp of additional tightening embedded into the EUR curve. The hawks are openly suggesting more hikes are possible beyond June, and the data-dependent approach (as well as common sense given still elevated inflation) is preventing the doves from explicitly calling for an end to the tightening cycle in June. Markets probably feel quite comfortable with the current pricing, and the euro’s sensitivity to the September/October pricing has not been very high anyway. Ultimately, EUR/USD remains a dollar – and primarily a US debt ceiling – story for now. There are downside risks that extend below the 1.0900 mark in our view in the coming days, and well below such level should money market liquidity start to dry up. That is not our base case, but a resolution to the debt-ceiling chaos may still follow a bumpy road and this does not appear to be the ideal time for a big rally above 1.1000 for the overbought EUR/USD. Francesco Pesole GBP: Pound may hold on to gains after BoE hike Markets approach the Bank of England decision day with rather aggressive pricing on future rate hikes. A 25bp move is fully priced in today, although the Sonia curve includes nearly two more 25bp increases before reaching the peak around September/November. As discussed in our BoE meeting preview, we think markets have got ahead of themselves, and today’s 25bp hike (7-2 vote split, two members voting for no change) may well be the last one in this cycle. The main reasoning behind our conclusion is that the drivers of higher-than-projected inflation have primarily been food prices and some surprising stickiness in core goods inflation: neither of those trends look likely to be long-lasting, and we still forecast a fast deceleration in CPI later this year. Some MPC members may definitely agree with us and expect this to be the last rate hike, but the question is whether they are ready to push back against market pricing and offer dovish hints to the market just yet. Our suspicion is that they are not, and we think the BoE should keep the door open to more tightening if inflation proves “persistent”, essentially retaining a data-dependent approach. The new forecasts will also play a role in driving the market reaction: growth should be revised up, but inflation may be projected to fall below target in two years. From an FX perspective, we do not expect this meeting to be a game-changer for sterling. We acknowledge that part of GBP’s recent strength has been due to the market’s aggressive expectations about BoE tightening, and therefore recognise there are downside risks as those (excessive, in our view) hawkish expectations are scaled back. However, we suspect the BoE will neither offer enough dovish hints today to trigger that dovish repricing, nor enough of a hawkish narrative to match the amount of tightening already priced into the GBP curve. If anything, the balance of risks is skewed to the downside, but our call is for this meeting to have a relatively contained directional impact on the pound today. Cable may stabilise around 1.26 and EUR/GBP around 0.8700 for now. Francesco Pesole Read next: Rates unchanged in Poland; balance of risks skewed to earlier cuts| FXMAG.COM CEE: Doves and hawks In Poland, as expected, the National Bank of Poland left interest rates unchanged yesterday, but the main event is scheduled for today; a press conference by Governor Adam Glapinski at 3pm local time. The commentary following the May meeting hardly changed. It underlined the deterioration of the domestic economic situation, including declines in retail sales, industrial production and construction output on an annual basis in March. The main changes in the post-meeting statement concern the update on new data regarding the external and Polish economy, while the summary with policy guidance remained unchanged. In recent weeks, some of the Council, including its chairman, have again begun to suggest interest rate cuts before the end of 2023. This may be a harbinger of a slightly more dovish tone from Glapinski, although still with some caution. Yesterday, the Polish zloty moved to its strongest level since March last year. From a long-term perspective, the zloty still has a lot of room to catch up with the region in our view, but for today the dovish press conference should halt the current rally and return to 4.540 EUR/PLN.  In the Czech Republic, April inflation will be released today. We expect a jump from 15.0% to 13.5% year-on-year with risks seen to the downside. The Czech National Bank expects a decline to 13.2% in its new forecast. Later today we will see a government press conference at 11.55am local time where the austerity package for next year's state budget is expected to be unveiled. Local media is talking about a CZK120bn (1.6% of GDP) deficit reduction, which is more than expected. Of this, 70bn is expected to be on the expenditure side and 50bn on the revenue side. From the Czech National Bank's perspective, it will be interesting to see if the government wants to increase VAT, which was previously discussed. Meanwhile, the CNB deputy governor mentioned that such a move would be inflationary and would be a reason to hike interest rates. The 2y market rate differential reached its highest levels this week yesterday and the prospect of fiscal policy consolidation and a potential interest rate hike should be positive for the koruna, in our view. We expect the koruna to move into a 23.30-40 EUR/CZK range today.  Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Australian dollar against US dollar decreased amid weak China CPI data

Australian dollar against US dollar decreased amid weak China CPI data

John Hardy John Hardy 11.05.2023 14:08
Summary:  Tomorrow’s CPI number is the most significant US data release this week. A survey of the last four US CPI releases shows that there have been very few surprises of note in the data series, with last month’s March CPI report surprising slightly to the downside at the headline. With the market searching for catalysts here, any data surprise could trigger significant intraday volatility, and today’s article looks at the scale of market volatility to the last four releases across asset classes. Today's Saxo Market Call podcastToday's Global Market Quick Take: Europe from the Saxo Strategy Team FX Trading focus: Mean reversion the name of the game recently – sterling set to join in? Bias notes today: AUD and CAD: recently have been on watch for bullish breakouts, but these never materialized, and given the copper breakdown overnight, if that holds, looking for AUDUSD downside as long as price action stays south of 0.6800 for at least a range trade. JPY: the long JPY bias worked a bit yesterday in USDJPY and EURJPY on the dip in yields, but the lack of momentum building today is a slight concern very tactically, even if a chart top is in place for now based on the recent reversal. With EURUSD suffering, more interested in EURJPY downside break potential. EURUSD: leaning negative for a try toward 1.0800 if we stay below perhaps 1.0980. Conviction not strong, but supported by positioning. US jobless claims the data risk in a rather flaky market. GBP: Have a bias that Bank of England will be sterling negative tactically, but we have already seen a solid move lower ahead of the event risk today. Will update tomorrow. Yesterday once again demonstrated a market that doesn’t want to sustain directional moves for long after the US CPI triggered a slide in US treasury yields and the US dollar. While yields stay lower, the greenback entirely failed to hold and has even reversed quite aggressively higher into the early European trading today. The euro continues its weakness, while the JPY rally attempt yesterday on the dip in yields has also failed to sustain as the wily USDJPY has bobbed back above 134.75 after testing below 134.00 overnight. AUDUSD ran lower on weak China CPI data and especially as copper tests below its 200-day moving average this morning – a critical coincident indicator for the Aussies, and likely the reason that AUDNZD is testing the last shreds of support. Read next: Expect the ECB to keep increasing rates at the short-term, at least until the summer| FXMAG.COM Bank of England: another mean reversion setup? Given nearly every direction move of late has failed to find fuel as this market scratches around for a narrative, one wonders whether the last couple of weeks of extensive sterling strength will also mean revert/consolidate on the Bank of England event risk today. (The struggle to get momentum going almost anywhere is reflected in the two months of bottled up range trading in US treasury yields – arguably we should all wait for a break of the 2-year or 10-year yields out of the range as the next big macro signal). The BoE is expected to hike the policy rate 25 basis points, and the forward curve looks a bit aggressive at over 40 additional basis points of tightening through the November meeting, by which time the Fed will supposedly be cutting for the second time by 25 basis points. One half of that scenario feels unlikely, unless the US is making an own goal by taking the debt ceiling issue beyond the brink (some sort of spending limitations seem more likely to me than any technical defaults on treasuries, in my view.) Will the BoE be willing to signal as much further tightening here as the market has priced? The bar feels higher for a hawkish than dovish surprise today, especially as BoE Governor Bailey seems ever reluctant to favour a clear hawkish message. Any suggestion that the BoE is revisiting its aggressive disinflation forecasts could help justify market expectations. Chart: GBPUSDGBPUSD closed almost unchanged for three consecutive days after getting capped yesterday on the failure of the greenback to stay lower in the wake of the CPI release. If the BoE surprises dovish, the first focus will be the psychological 1.2500 rea, but the 1.2450-00 area looks far more important here for whether cable will remain in this uptrend. To the upside, the next focus is the 61.8% retracement of the entire sell-off from the 2021 highs of 1.4248 (can you believe it) to the panic lows of Truss-Kwarteng near 1.0350 (can you believe it).   Source: Saxo Group Table: FX Board of G10 and CNH trend evolution and strength.The Euro weakness is only exceeded by CNH weakness, but note the huge momentum shift lower after its former strength. Elsewhere, JPY has a long way to go to prove itself – needing a more significant yield melt-down to confirm the recent reversal in some JPY crosses. The NZD outperformance is looking stretched – NZ inflation expectations up tonight possibly key there.   Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.The EURNOK uptrend looks set to end unless we see a huge rally into the close today (after over 110 days in positive) Note that USDJPY is close to a downtrend, but needs another solid sell-off bar to confirm that it is developing momentum. It looks about the same for EURJPY. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights 1100 – UK Bank of England Bank Rate Announcement 1130 – Bank of England press conference 1230 – US Weekly Initial Jobless Claims 1230 – US Apr. PPI 1245 – US Fed’s Kashkari (Voter 2023) speaking 1415 – US Fed’s Waller (Voter) to discuss financial stability and climate. 1700 – US Treasury to auction 30-year T-bonds 0300 – New Zealand Q2 Inflation Expectations Source: FX Update: Sterling latest to play mean reversion game? | Saxo Group (home.saxo)
UK Gfk Consumer Confidence index got better fourth month in a row

What are the possible scenarios for GBP/USD? British pound against US dollar - inidicator analysis

InstaForex Analysis InstaForex Analysis 19.05.2023 11:20
Trend analysis (Fig. 1). The market may move upward from the level of 1.2404 (closing of yesterday's daily candle) with the target of 1.2460, the historical resistance level (blue dotted line). Upon reaching this level, a downward movement is possible with the target of 1.2422, the 76.4% pullback level (blue dotted line). Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis - up; Fibonacci levels - up; Volumes - up; Candlestick analysis - up; Trend analysis - up; Bollinger bands - up; Weekly chart - up. General conclusion : Today, the price may move upward from the level of 1.2404 (closing of yesterday's daily candle) with the target of 1.2460, the historical resistance level (blue dotted line). Upon reaching this level, a downward movement is possible with the target of 1.2422, the 76.4% pullback level (blue dotted line). Read next: What are the possible scenarios for EUR/USD? Euro against US dollar - inidicator analysis| FXMAG.COM Alternatively, the price may move downward from the level of 1.2404 (closing of yesterday's daily candle) with the target of 1.2343, the lower fractal (blue dotted line). Upon reaching this level, an upward movement is possible with the target of 1.2432, the 14.6% pullback level (red dotted line). Relevance up to 09:00 2023-05-20 UTC+2 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/343650
UK Gfk Consumer Confidence index got better fourth month in a row

UK Gfk Consumer Confidence index got better fourth month in a row

Kenny Fisher Kenny Fisher 19.05.2023 16:14
UK Consumer Confidence hits 15-month high BoE’s Bailey warns of wage-price spiral The British pound has pushed higher on Friday. GBP/USD is trading at 1.2449 in North America, up 0.32% on the day. The week is wrapping up on a positive note, as UK GfK Consumer Confidence index improved for a fourth straight month. That’s not to say that the UK consumer is in a cheery mood. The index improved from -30 to -27 and has been stuck in negative territory since 2016. Still, there has been steady movement upward in recent months and today’s reading marked a 15-month high. Energy prices have come down and consumers are feeling better about their personal finances. An improvement in consumer confidence often translates into stronger consumer spending, which would be good news for the UK economy. BoE Bailey’s warns of wage-price spiral  Bank of England Governor Bailey warned the markets this week that rate hikes were on the table and he would tighten policy if inflation remained persistent. The central bank has been unable to curb inflation, which remains in double-digits, despite an aggressive rate-tightening campaign which has raised the cash rate to 4.50%. The BoE has been content with small hikes of 25 basis points and has insisted that inflation will fall rapidly, but there is pressure on the Bank to deliver larger hikes in order to curb red-hot inflation. Bailey acknowledged this week that the UK was in the midst of a wage-price spiral, which will make the battle against inflation that much more difficult. Public sector employees continue to strike, in an effort to secure higher wages in response to the cost-of-living crisis. The government will likely have to cough up more money for the workers, which will lead to higher inflation. The US debt ceiling crisis is weighing on the financial markets, but it seems likely that lawmakers will reach an 11th-hour agreement. Lawmakers don’t want to be blamed for the US defaulting on its debt for the first time ever, and Republican House Speaker McCarthy says there could be a vote on a debt ceiling agreement next week. GBP/USD Technical There is support at 1.2366 and 1.2289 1.2474 and 1.2604 are the next resistance levels Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. British pound rises as consumer confidence improves - MarketPulseMarketPulse
GBP/USD Technical Analysis: Bullish Momentum Building Up - Get Ready for Potential Upside!

GBP/USD Technical Analysis: Bullish Momentum Building Up - Get Ready for Potential Upside!

InstaForex Analysis InstaForex Analysis 30.05.2023 08:27
Early in the American session, the British pound is trading around 1.2346 below the 21 SMA and within a downtrend channel formed since May 8.   On the 4-hour chart, we can see that the GBP/USD pair is under bearish pressure. We expect that in the next few hours, a break of the small symmetrical triangle could occur, which could give us a bearish direction and the instrument could reach the weekly support zone of 1.2281, the level that coincides with the bottom of the bearish channel.   On the other hand, a break of this symmetrical triangle and a consolidation above the 21 SMA around 1.2357 could offer a recovery move for the British pound and it could reach the 200 EMA located at 1.2437. If this scenario comes true, it could be the beginning of a new bullish sequence and GBP/USD could reach 7/8 Murray in the short term, located at 1.2573.   Additionally, since May 22, the Eagle indicator has been giving a positive signal. It means that if the British pound consolidates above 6/8 Murray located at 1.2451, this could encourage a bullish acceleration so that the price could reach 8/8 Murray located at 1.2695.   Our trading plan for the next few hours is to buy the British pound above 1.2357 with targets at 1.2437 and 1.2573. The Eagle indicator is giving a positive signal which supports our bullish strategy.  
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GBP: Battling the Overwhelming BoE Rate Hike Expectations! What's next for EUR/GBP?

ING Economics ING Economics 30.05.2023 08:51
GBP: Hard to fight the aggressive BoE pricing   Money markets now price 100bp of Bank of England tightening by November.   This would put the Bank Rate at 5.50%. Our team's view is that such an amount of tightening is highly unlikely and that the usually reticent Bank of England may try and verbally push back against it.   However, UK data is doing the most of the talking and it will probably be the jobs/wages data (13 June) or the May CPI data (21 June) which will be the key determinant on whether the market reins in aggressive tightening expectations.   Until then, EUR/GBP can probably press support at 0.8650, below which 0.8600/8610 is the next target. GBP/USD can better resist the stronger dollar. Support around the 1.2275/2300 area may hold temporarily.
Inflation Dynamics and Market Pricing: Assessing the UK's Monetary Outlook. Job Openings Decline Continues in the US

Inflation Dynamics and Market Pricing: Assessing the UK's Monetary Outlook. Job Openings Decline Continues in the US

ING Economics ING Economics 31.05.2023 08:39
It is in the UK that the local swap curve is diverging most from the central bank’s message. Swap currently imply another 100bp of tightening will be implemented before year-end. We do not disagree that core inflation has been disappointingly slow to decline in the UK but betting on another four 25bp hikes this year requires a strong opinion on inflation dynamics which we think few in the market actually have.   This means current pricing is unlikely to be maintained. Markets should also be on alert for a pushback by Bank of England (BoE) officials against market pricing. Only Catherine Mann is due to speak today. As the more hawkish member, she is the least likely to disagree with elevated rates but her pushback would be all the more potent.   Forward EUR rates have been relatively immune to the recent re-pricing higher in USD and GBP rates   Today's events and market view Chinese PMIs released today missed expectations on both manufacturing and services, although the latter remains at a healthy level above the 50 expansion/contraction line.   French, Germany, and Italian CPIs for the month of May will be released today. In addition to yesterday’s Spanish prints, this means over 70% of the eurozone-wide print, which is only published tomorrow, will be available to markets today. As is increasingly the case, focus will be squarely on service inflation.   After the sharp re-pricing in BoE hike expectations Catherine Mann’s speech will be closely watched, although, as the most hawkish member on the MPC, we don’t see her as the most likely member to push back against the nearly 100bp of further hikes priced by the curve.   In the US, the decline in job openings is expected to continue, albeit at a more modest pace than last month. Details of the report, such as a worsening of the quits rate, will be closely watched for hints of a further softening of the labour market into Friday’s non-farm payroll release.
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GBP: Steady Sterling Awaits Jobs Data Amidst Narrow Trading Range

ING Economics ING Economics 09.06.2023 08:43
GBP: Sterling steady into jobs data next Tuesday EUR/GBP volatility remains near recent lows and spot trades well within a tight 0.8570-0.8640 range. Second or third-tier UK data has been quite mixed recently, but the main event on the data front will be next Tuesday's release of jobs and wages data. We see that as a negative event risk for sterling, where wage growth could continue to slow and take some of the steam out of the 100bp+ Bank of England tightening expectations still priced in by money markets. GBP/USD to trade well within a 1.2400-1.2500 range.  
EUR/USD Stabilizes as Eurozone Recession Takes Backseat, GBP Undervalued Against EUR/GBP

EUR/USD Stabilizes as Eurozone Recession Takes Backseat, GBP Undervalued Against EUR/GBP

ING Economics ING Economics 09.06.2023 10:06
EUR: Shrugging off the recession EUR/USD is back around the 1.0800 handle, with the moves once again coming entirely from the USD leg. Domestically, the news of the eurozone entering a technical recession after the 1Q GDP revision was understandably overlooked by the market, and may well be overlooked too by an inflation-focused ECB next week (here is our economist’s meeting preview).   There are no domestic drivers for the euro today, and in line with what we highlighted in the USD section above, we expect some consolidation around current levels in core dollar pairs. EUR/USD could stabilise marginally below 1.0800.   Elsewhere in Europe, we saw EUR/CHF come under pressure yesterday following hawkish comments from the Swiss National Bank Governor Thomas Jordan, where he highlighted how current rates are low and “it’s not really a good idea to wait then have higher inflation later”. The SNB will announce policy on 22 June, and we expect a 25bp hike following a similar move by the ECB. It appears however, that the market is pricing in more beyond that hike, which is not part of our baseline scenario at the moment.   GBP: EUR/GBP is undervalued EUR/GBP has moved back below 0.8600 after a very small rebound and we estimate the pair to be trading at around a 2.0% short-term undervaluation at the current levels, which falls beyond the 1.4% 1.5 standard-deviation lower-bound.   We remain of the view that EUR/GBP will increasingly struggle to find more bearish momentum now that markets are already pricing in 100bp of Bank of England tightening and the pair is already in undervaluation territory. On the cable side, we expect some stabilisation around 1.2550-1.2600. The UK calendar is empty today.
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UK Jobs Market Heats Up: Low Chance of BOE Rate Cuts Amidst Strong Wage Inflation User

ING Economics ING Economics 13.06.2023 13:15
GBP: UK jobs markets stays hot Data out of the UK this morning point to ultra-tight conditions in the jobs market, as unemployment unexpectedly fell again to 3.8% and average weekly earnings jumped from 5.8% to 6.5%. Our UK economist discusses in this article why sticky UK wage inflation means very low chances of Bank of England rate cuts before 2024. We are less convinced this will lead to several more rate hikes by the BoE: markets are currently pricing in 100bp of tightening to the peak, but we struggle to see more than two 25bp increases (in June and August). We keep highlighting the risks for sterling of a dovish repricing in the BoE rate expectations down the road, but with data pointing consistently to more tightening recently, it’s hard to buck the bullish GBP trend in the near term. Still, GBP/USD may well default to being driven by the dollar leg as soon as the US CPI risk event kicks in.
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GBP: Riding the Sterling Bullish Wave Despite Industrial Production Decline

ING Economics ING Economics 14.06.2023 14:02
GBP: Hard to buck the sterling bullish trend EUR/GBP pressing lower again this morning: a move below the 0.8540 support would set the pair back to pre-Mini-Budget crisis levels (August 2022). UK GDP figures for April matched expectations, showing 0.2% MoM growth, while industrial production declined by more than expected (1.9% YoY).   Still, the latest evidence from employment and wage growth has prompted yet another repricing higher in BoE rate expectations, with 132bp of tightening priced in by year-end. With short-dated gilts reaching their highest levels since 2008 yesterday, it remains hard to buck the EUR/GBP bearish trend, especially ahead of the ECB risk event, but our medium-term view remains bullish on the pair.
GBP: Finding Support Ahead of Bank of England Meeting

GBP: Finding Support Ahead of Bank of England Meeting

ING Economics ING Economics 15.06.2023 13:17
GBP: Staying supported into the BoE meeting We are entering a few days of calm in the UK calendar after a slew of key data releases. Yesterday’s GDP data endorsed the recent re-rating of the UK’s growth outlook but hardly mattered for the Bank of England as much as the inflationary signals sent from the jobs and wage growth figures earlier this week.   Bank of England rate expectations were marginally scaled back after the Fed meeting, but still imply five 25bp rate increases from current levels before the end of the year. It’s important to note how the higher gilt rates are by themselves starting to have their tightening effect on the economy. Mortgage market distress is the most direct example, with major lenders hiking rates and some pulling mortgage offers following the recent repricing of tightening expectations.   It is, still, too early to factor that – or any implications for the housing market – into sterling, which will probably continue to find support into next week’s CPI and Bank of England meeting. EUR/GBP could move closer to the 0.8500 key support after today’s ECB decision.
Sterling Holds Firm Ahead of UK CPI Data: Will the Rally Continue?

Sterling Holds Firm Ahead of UK CPI Data: Will the Rally Continue?

ING Economics ING Economics 16.06.2023 09:59
GBP: Sterling to hold gains into next week's CPI data Sterling continues to hold gains as the market rigidly holds onto aggressive Bank of England tightening expectations. This year sterling's correlation with risk assets had fallen, suggesting perhaps that it should not be at the forefront of a risk rally. However, as above, we think the dollar environment is softening and we do not want to stand in the way of a GBP/USD rally.  Looking at the charts it seems there is 'fresh air' between current levels (1.2750/1.2800) and 1.3000 – suggesting the latter beckons. For EUR/GBP, the hawkish ECB helps strengthen the support at 0.8550, although next week's release of the UK June CPI will probably be the next big driver here, ahead of an expected 25bp BoE rate hike next Thursday.
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GBP Holds Steady Ahead of May CPI Release: BoE's Ammunition Questioned, GBP/USD Eyes 1.30, EUR/GBP Trades Offered

ING Economics ING Economics 19.06.2023 09:52
GBP: Steady into Wednesday's May CPI release Sterling is holding onto recent gains and as our UK economist James Smith outlines in our Bank of England preview, we doubt the BoE has sufficient ammunition (yet) to push back against the nearly five 25bp hikes expected before year-end. That suggests sterling can stay supported for the time being.   Technically, GBP/USD does look as though it can advance to the 1.30 area - though the macro catalyst for further gains appears unclear. Indeed, the UK press is really pushing the 'mortgage timebomb' story at present, but sterling probably does not correct lower until we see some softer price data - which may take a few months to come through.   EUR/GBP continues to trade offered. At least a hawkish ECB provides some pushback to the BoE pricing and we continue to forecast a higher EUR/GBP later this year - once the hot UK inflation story cools. EUR/GBP may find support here at 0.8500/8550.
Rates Spark: Easing Inflation, Firm Labour Market, and Market Expectations

Cracks in GBP: Inverted Gilt Curve and Economic Pressure

ING Economics ING Economics 20.06.2023 09:31
GBP: Cracks starting to show? UK headlines were grabbed yesterday by two-year Gilt yields blasting through 5% and raining more misery on those UK mortgage holders needing to refinance. The UK 2-10 year Gilt curve is now the most inverted since 2000. It's true that a heavily inverted Gilt curve makes it more expensive for foreigners to hedge UK Gilt holdings – i.e. a sterling positive – but this heavily inverted curve will be heaping a lot of pressure on the UK economy. We are probably reading too much into one day's price action, but it could be noticeable that sterling did not follow Gilt yields higher yesterday. Expect EUR/GBP to consolidate into tomorrow's big release of May UK CPI. And again we would see current levels in EUR/GBP as a good area to increase FX hedge ratios on GBP receivables.
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Asia Morning Bites: Korean Trade Data, Powell's Testimony, and Global Market Trends"

ING Economics ING Economics 21.06.2023 08:29
Asia Morning Bites Early Korean Trade data showed a surprise gain in June, and a separate release also shows pipeline price pressures diminishing. Jerome Powell starts his 2-day testimony to the US Congress.   Global Macro and Markets Global markets: US stocks returned from vacation to resume their decline, though didn’t fall much and firmed up a bit after opening lower. The NASDAQ fell just 0.16% and the S&P 500 lost 0.47% on the day. Equity futures remain negative though, so more declines beckon today. Chinese stocks also fell. The CSI 300 was also only slightly down but the Hang Seng index fell 1.54%. US Treasury yields declined slightly too. The yield on the 2Y note fell 2.9bp to 4.685%, while 10Y yields fell 4.1bp to 3.721%.   EURUSD is almost unchanged from this time yesterday at about 1.0922, after testing both higher and lower. The AUD is lower though, falling to 0.6788. GBP is also a bit weaker ahead of this week’s Bank of England rate hike. But the JPY has rallied a bit, moving to 141.308, down from a high of 142.251 yesterday. The PHP also made some gains yesterday, though most of the Asian pack made slight losses against the USD yesterday. The TWD and CNY were both down about 0.25-0.3%. USDCNY is now 7.1809. G-7 macro: US housing starts and permits jumped strongly in May. The annualized rate of starts jumped from 1340 thousand to 1631 thousand. And permits were also stronger, suggesting more gains in the pipeline.   There isn’t much else on the macro calendar today, apart from Jerome Powell who will testify in front of Congress today for the start of his 2-day grilling. So expect plenty of headlines from that, although we doubt he will stray too far from the June FOMC comments. There’s also a fairly packed ECB schedule of speakers today to provide a variety of views on how high terminal rates for the Eurozone will be, and just as importantly, when they will reach that point. South Korea: Early June exports (1-20 days) rebounded 5.3%YoY – the first gain in ten months. As expected, chip exports (-23.5%) and exports to China (-12.5%) were particularly weak while exports to the US rose firmly (18.4%), probably due to robust auto exports. Korea’s exports have bottomed out from the fourth quarter of last year, but the recovery has been pretty shallow. Imports dropped -11.2% during the period on the back of falling global commodity prices. We believe that the trade balance will return to a surplus by the end of the third quarter. Meanwhile, price pressures continue to diminish as producer price inflation decelerated to 0.6%YoY in May from 1.6% in April. PPI declined 0.3% MoM (nsa) after a 0.1% drop in April. This morning, the government announced that there would be no electricity fee hike for the third quarter. As we argued earlier, ahead of the national election in April next year, it is likely that electricity rates will be held steady. As global commodity prices have fallen sharply, this would also support the freezing of electricity fees.   We look for consumer price inflation to reach the 2%-3% range from June We forecast a 2.7% YoY rate for inflation in June (vs 3.3% in May) and for inflation to stay in this range until the end of this year. Pipeline prices suggest price declines continue due to falling global commodity prices and recent KRW appreciation. Import prices have already dropped for three months in a row and producer prices are expected to fall in YoY terms from June. Thus, we believe that the Bank of Korea will take a pause on hiking in 3Q24. Currently, we have marked a rate cut in 4Q23, but depending on the Fed’s rate cut timing, the BoK’s cut may come later, perhaps in the first quarter of next year. But, for now, we are keeping our current BoK forecast as it is.   What to look out for: Powell's testimony before US congress South Korea PPI (21 June) Australia Westpac leading index (21 June) US MBA mortgage applications (21 June) Fed’s Powell speaks (21 June) Fed’s Goolsbee speaks (21 June) Philippines BSP policy meeting (22 June) Indonesia BI policy meeting (22 June) US initial jobless claims (22 June) Fed’s Waller, Bowman and Mester speak (22 June) Japan CPI inflation and Jibun PMI (23 June) Singapore CPI inflation (23 June) Thailand trade balance (23 June) Fed’s Barkin and Bullard speak (23 June)
Driving Growth: The Resilience of Green Bonds and Shifting Trends in Sustainable Finance

The Bank of England’s expected surprise

Alex Kuptsikevich Alex Kuptsikevich 22.06.2023 15:33
The Bank of England raised its key rate by 50bp to 5.00% - a sharper move than analysts who had made their forecasts earlier in the week had expected. However, it's a logical move, given that the latest inflation data from the previous day exceeded both market expectations and the Bank's forecasts. We should have expected a tougher stance from the central bank, given the persistently high inflation in the UK.     In a companion commentary, the Bank of England acknowledged the secondary inflationary effects, from external shocks to rising service prices, solid consumer demand and a tight labour market. The forced cooling of the economy is a classic monetary policy response to the last two problems: developed country central banks are tightening policy to fight inflation until they get enough evidence of cooling final demand. The market reaction to the rate surprise deserves a separate mention. GBPUSD jumped 60 pips up to 1.2840 and fell 100 pips down to 1.2740 within 10 minutes of the decision being published. This was obviously due to the trading robots working off the news headlines but ran into resistance from the sellers near the highs at last week's close. However, the pound soon stabilised near the day’s opening levels, as markets saw the latest decision consistent with the available economic data.      
Market Reaction to Eurozone Inflation Report: Euro Steady as Data Leaves Impact Limited

Asia Morning Bites: Japanese Inflation Rises, Anticipation of BOJ Policy Adjustment

ING Economics ING Economics 23.06.2023 12:00
Asia Morning Bites Japanese core inflation excluding food and energy edges higher in May - tees up the Bank of Japan for a July tweak to policy.   Global Macro and Markets Global markets:  After several days of decline, US stocks turned around on Thursday, and equity futures indicate that they may have a little further to go today. The S&P 500 rose 0.37%, while the NASDAQ rose 0.95%. China was out for Dragon Boat Day and will be out today too.  US Treasury yields went higher again. The Yield on both the 2Y note and the 10Y bond rose 7.6bp, taking 10Y yields to 3.795%. 10Y UK Gilt yields fell 3.8bp after the larger-than-expected Bank of England hike. EURUSD pushed above 1.10 yesterday, despite the rise in US yields, but it could not hold on to its gains and has retreated back to 1.0956 – not much changed from 24 hours ago.  G-10 currencies including the AUD and JPY lost ground to the USD, but GBP was steadier, helped by higher rates. Most Asian currencies weakened against the USD yesterday. The THB rose to 35.075, and the SGD rose to 1.3447. USDCNH has risen to 7.1957 and topped 7.20 overnight.   G-7 macro: There were further hawkish comments from Jerome Powell overnight, who said that the US may need one or two more rate hikes. Barkin also indicated that he was happy to see rates go higher. The main macro release from the US for the day was existing home sales. Lack of supply seems to be helping house prices to remain supported, as James Knightley writes here. Initial jobless claims held on to the recent highs at 264K, though continuing claims drifted a little lower. Not quite a smoking gun for the labour market, but it is becoming a little more interesting. The Bank of England’s 50bp hike took markets by surprise. James Smith and Chris Turner write about it here. James notes, “We’re tempted to say that today’s 50bp move won’t become a new trend, but two further 25bp hikes seem like the most likely route after today’s meeting”. Today is another quiet day for macro releases, with nothing of note from the US and only retail sales from the UK to look at.   Japan:  May inflation data came out slightly higher than expected. The headline inflation rate was 3.2% YoY in May (vs 3.5% in April, 3.2% market consensus) but core (3.2%) and "core-core" (4.3%) inflation beat market expectations. Inflation excluding food and energy even rose from 4.1% in April. The headline CPI index was unchanged month-on-month, but goods prices fell 0.1% MoM sa, while service prices rose 0.1%. Housing, transportation, telecommunications, and entertainment prices continued to rise, while utilities fell again. We think there are signs of inflationary pressure building up on the supply side, but it is certainly not strong enough for the BoJ to bring about immediate tightening.Looking ahead, the current energy subsidy program will end in September and some power companies will begin to raise electricity fees again. Thus, we see headline inflation staying above 2% for a considerable time. We expect June Tokyo inflation, released next week, will also pick up again.  We think that the BoJ will upgrade its inflation outlook in July and a yield curve control (YCC) tweak is still possible despite the dovish comments from several board members. They will probably justify their action by saying that a YCC tweak is not a tightening, but instead, that it is done to improve market functionality. Another reason that we think a July tweak is possible is that a shift in YCC may need to come as a surprise to avoid a large bond selloff. Singapore:  May inflation is set for release today.  The market consensus points to a slight softening in inflation with core and headline inflation slipping to 4.7%YoY and 5.4%YoY, respectively.  Continued robust domestic demand is preventing price pressures from dissipating quickly.  Despite the dip in inflation, the MAS will likely be on notice monitoring price developments with core inflation still well above target.  
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

The Pound and the Inverted Yield Curve: Implications for GBP as a Reserve Currency

ING Economics ING Economics 23.06.2023 11:48
GBP: A sharply inverted yield curve can come in handy The pound’s neutral reaction to the Bank of England’s 50bp hike yesterday would suggest that was a well-telegraphed outcome. Instead, markets were only pricing in 35bp before the meeting. The market impact of the BoE’s surprise move must therefore be seen in the context of the pricing across the Sonia curve. 150bp of tightening was already priced in before the meeting, and investors are now looking at a 6.0%+ peak rate after the hike. The attempt by the BoE to get ahead of the curve with more aggressive tightening is being accompanied by rising speculation that this will trigger monetary easing starting in the summer of 2024. Still, that price development is not enough to impact the highly inverted shape of the GBP yield curve. From a currency perspective – as we note in the BoE review note – a sharply inverted yield curve can work as a positive factor for a reserve currency like the pound (as opposed to growth-sensitive currencies). We suspect that a rebound to 0.88 in EUR/GBP will need to be delayed on the back of that. The data calendar includes PMI releases in the UK today, with consensus expecting a marginal deterioration for both manufacturing and services. This morning, retail sales for the month of May declined less than expected.
GBP: BoE Stands Firm on Bank Rate and Mortgage Interest Relief, EUR/GBP Drifts Lower

GBP: BoE Stands Firm on Bank Rate and Mortgage Interest Relief, EUR/GBP Drifts Lower

ING Economics ING Economics 26.06.2023 10:40
GBP: No push back against 6%+ Bank Rate this week There is much discussion in the financial press about central bankers having seen the 'easy', base effect-driven decline in headline inflation. But now they are into the hard yards of getting core inflation down from around 5% – or in the Bank of England's case 7%. In this environment, we should expect no pushback from BoE officials on the pricing of the Bank Rate above 6% early next year. Equally, we expect the government to yield no ground on mortgage interest relief, which would only make the BoE's job harder. EUR/GBP fell on the back of the Eurozone PMI dip last Friday. Despite UK hard landing fears, we are sticking with the initial views we put out in our latest BoE reaction piece. Namely, that a very inverted yield curve probably trumps hard landing fears and that sterling holds onto recent gains for the time being.  On this week's UK calendar is primarily BoE speakers, where Wednesday looks to be the main Sintra event for BoE Governor Andrew Bailey. EUR/GBP can drift back to 0.8520 this week, while GBP/USD should find demand under 1.27.
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GBP: Dovish MPC Voices and Aggressive Expectations in Focus

ING Economics ING Economics 27.06.2023 10:58
GBP: No pushback against aggressive expectations Sintra is an important event for sterling as well. While tomorrow’s speech by Bank of England Governor Andrew Bailey is the most awaited event, today’s speech is by the two most dovish voices in the MPC: Silvana Tenreyro and Swati Dhingra. The former will be replaced in the committee by Megan Greene on 5 July and her remarks should have reduced market impact, while any hawkish comments by Dhingra may be read as a de-facto endorsement of the market’s aggressive tightening expectations. The Sonia curve is pricing in a 6.15-6.20% peak rate as of this morning around the turn of the year, and keeping the option of a 50bp hike in August very much on the table (44bp priced in). Data may argue against such aggressive action down the road, but the majority of Bank of England officials look unlikely to vehemently push back against tightening expectations for now. EUR/GBP does not have huge downside room, but a rebound to 0.88 will likely be very gradual.
GBP: Modest Performance Amidst Rate Hike, Equities Lag Behind Eurozone Peers

GBP: Modest Performance Amidst Rate Hike, Equities Lag Behind Eurozone Peers

ING Economics ING Economics 29.06.2023 09:40
GBP: Some underperformance The Bank of England's broad trade-weighted index for sterling has barely budged since last Thursday's 50bp BoE rate hike, where sterling strength against some currencies presumably makes up for some modest weakness against the dollar and the euro. 10-year UK gilt yields - which had briefly fallen on the large hike - equally have barely budged. Where sterling bears may find some solace is that UK large and mid-cap equities have only rallied 0.7% this month - compared to 3% gains for their European peer group. In short, we think it is too soon to start selling sterling on hard landing fears. We think sterling only sells off when the data - both inflation and labour market data - suggest the BoE can ease up in its hawkishness. Until then GBP/USD might find some support near 1.2600 and EUR/GBP could easily drift back under 0.8600.
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

GBP: Volatile Pricing and Limited Data Ahead

ING Economics ING Economics 03.07.2023 09:38
GBP: Pricing remains volatile Pricing for Bank of England tightening remains quite volatile. Markets are pricing in 130bp of BoE hikes to the peak at the moment, which clearly sets the bar quite hike for hawkish surprises for the MPC's communication, but also shows how hawkish-prone markets are given the UK inflation situation. This week will offer little input from the data side in the UK, and the list of BoE speakers is also quite short. Cable may be primarily driven by the dollar leg, and faces some risk of a correction. EUR/GBP may struggle to find very sustainable support beyond current levels.
GBP: Monitoring Data Outliers Amid Hawkish BoE Expectations

GBP: Monitoring Data Outliers Amid Hawkish BoE Expectations

ING Economics ING Economics 06.07.2023 09:30
GBP: Watch for data outliers Today’s focus will be on the Bank of England’s Decision Maker survey, which has pointed to easing pay and price expectations over the coming months. Hard data has pointed in the opposite direction, and this might emerge again as an outlier in a very “hawkish” set of data for the BoE and markets today. Markets remain highly sensitive to any incoming developments on the price side and the still quite aggressive BoE tightening expectations (140bp by January 2024) do point to some risk of recalibration (and GBP downside risks) around any release. EUR/GBP has been weakening in the past two sessions, but may find some support around current levels and even converge back to 0.8600 as the overbought pound faces some BoE repricing threat.  
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Navigating Domestic Tightening: G10 Currency Outlook and Key Central Bank Stories

ING Economics ING Economics 06.07.2023 13:40
Domestic tightening stories remain key across the G10 Since the dollar is overvalued against all G10 currencies except for CHF, according to our BEER model, the same reasoning can be applied to the more general spectrum of USD crosses. Incidentally, we could see domestic stories – especially on the central bank side – dominate before a clearer dollar trend emerges later in the year. In the UK, the Bank of England’s aggressive fight against ultra-sticky inflation should keep the GBP curve highly inverted, which can ultimately keep a reserve currency like the pound supported for longer. Japanese authorities look once again on the brink of FX interventions, as USD/JPY trades close to the 145.00 mark, but some help for the yen might actually come from a hawkish tweak to the yield-curve-control policy by the Bank of Japan this summer. In Europe, Scandinavian central banks are deploying FX-supportive tightening packages. We favour NOK over SEK thanks to a more hawkish Norges Bank stance and elevated domestic risks in Sweden.    
Market Analysis: EUR/USD Signals and Trends

Asia Morning Bites: Korean Authorities Limit Fallout as MGCCC Branches Close, US Non-Farm Payrolls in Focus

Michael Hewson Michael Hewson 07.07.2023 08:48
Asia Morning Bites Korean authorities give a strong deposit protection message to limit fallout as it closes some branches of MGCCC. US non-farm payrolls later - and a big number is expected following the ADP release.   Global Macro and Markets Global markets:  Strong US labour data ahead of today’s payrolls release caused US Treasury yields to move higher again yesterday. US 2Y yields rose a further 3.6bp while those on 10Y USTs rose 9.8bp taking them to 4.029% for the first time since early March. Equities didn’t respond well to the stronger-than-expected data. The S&P 500 fell 0.79%, while the NASDAQ dropped by 0.82%. Chinese stocks were also down. The Hang Seng fell 3.03%, while the CSI 300 fell a more modest 0.67%. In spite of the rise in yields, the USD lost a little ground to the EUR, and EURUSD moved up to 1.0894. The AUD was weaker though, falling back to 0.6630, while the GBP moved a little higher to 1.2743, and the JPY also made some gains, moving to just below 144. Most of the Asian FX pack was weaker against the USD yesterday G-7 macro: Yesterday’s market-moving release was the US ADP survey, which showed a 497 thousand increase in private employment in June. This was more than twice what had been expected and could set the market up for an upside surprise to the 230 thousand payrolls median forecast today. There was also a stronger-than-expected reading from the service sector ISM index, with both headline and employment indices rising a lot. It is going to be quite hard for the Fed to ignore these numbers at its 27 July meeting. As well as payrolls today, we also get hourly earnings data, which is expected to show a slight moderation from the 4.3% rate of annual growth in May. The unemployment rate, however, is thought likely to go down, not up. Korea: The risk of a bank run emerged suddenly as the delinquency rates of MGCCC rose sharply and a couple of branches decided to close. The government has issued a strong message that deposits will be protected. The BoK will keep rates on hold as financial market stress is expected to continue for a while. Please see details. Taiwan: Trade figures for June could show rates of decline moderating in year-on-year terms, though they are likely to remain in a double-digit descent. In USD terms, Taiwan’s exports have been steadily declining since August 2022, and today’s reading may simply signal that the rate of decline has eased slightly. This would be in line with what we see in other regional peers like South Korea.   What to look out for: US jobs report South Korea BOP balance (7 July) Taiwan trade (7 July) US non-farm payrolls (7 July)
US Non-Farm Payrolls Disappoint: What's Next for EUR/USD?

GBP: Focus on Tomorrow's Wage Data as Bank of England Meeting Approaches

ING Economics ING Economics 10.07.2023 10:59
GBP: Tomorrow's wage data are key With a month to go until the next Bank of England meeting, policymakers will be watching regular pay growth (average earnings excluding bonuses) tomorrow, which has picked up again lately. The question is whether that’s solely down to firms implementing the 10% increase in the National Living Wage, or a genuine increase in pay pressures. Assuming it’s at least partly the former, we think we could get a fractional fall in the annual rate of pay growth in the May reading. Unless the CPI shocks on the upside again on July 19, then the Bank of England could be happy with a 25bp hike in August. Markets are pricing in 44bp for August and 145bp in total, which leaves ample room for a dovish repricing to hit sterling should data surprise on the downside. EUR/GBP is trading around recent lows and may be facing some upside risks to 0.8600+ this week.
Risk of Deflationary Spiral in China Impacts Confidence in Equities, while USD Holds Steady Against Yuan

Risk of Deflationary Spiral in China Impacts Confidence in Equities, while USD Holds Steady Against Yuan

Craig Erlam Craig Erlam 10.07.2023 12:28
Deflationary spiral risk has negated confidence in China equities. US dollar has continued to hold steady against the yuan despite a broad-based sell-off against other major currencies ex-post US non-farm payrolls. The key intermediate support to watch on the USD/CNH will be at 7.2160. Weak China inflation data offset positive China Big Tech news flow The dreaded fear of a deflationary spiral in China has reached “code red” where the latest consumer inflation rate for June has flattened to 0% year-on-year from a gain of 0.2% year-on-year in May and came in below expectations of an increase of 0.2%. This latest reading in CPI is the weakest rate since February 2021. In addition, producers’ prices (factory gate prices) continued to deteriorate further into contraction mode; it dropped -5.4% year-on-year, faster than a 4.6% fall in May, and worse than expectations of a -5.0% decline. Overall, it has marked the ninth consecutive month of producer deflation and its steepest fall since December 2015. Time is running out for Chinese policymakers to negate the steepening rout in the internal demand environment that can potentially lead to further loss in consumer and business confidence if the deflationary spiral starts to be persistent. It may lead to a liquidity trap scenario in China where monetary policy tools will be less effective to stimulate real economic growth. The forward pricing mechanisms of the stock market seem to have started to take into account some aspects of the negative feedback loop triggered by the liquidity trap scenario, earlier intraday gains of between 1% to 3.2% seen in today’s Asian session on the Hang Seng indices as well as China’s benchmark CSI 300 driven by China Big Tech equities as Chinese regulators have signalled on last Friday after the close of the Asian session to end a two-year plus of crackdown on the technology sector have been reduced by slightly more than half, CSI 300 (0.5%), Hang Seng Index (0.8%), Hang Seng TECH Index (1.25%), and Hang Seng China Enterprises Index (0.7%) at this time of the writing.     China’s yuan remained soft despite the broader USD sell-off       Fig 1:  US dollar rolling 1-month performance as  of 10 Jul 2023 (Source: TradingView, click to enlarge chart) The US dollar sold off last Friday, 7 July reinforced by technical factors after the US Dollar Index cracked below its 50-day moving average that had been acting as a prior minor support since 28 June 2023, also ex-post US non-farm payrolls for June that came in below expectations (209K added vs. 225K consensus). Based on the rolling one-month performances as of today, the USD is weakest against the EUR (-1.89%), GBP (1.81%), and CHF (-1.35%) while holding steady against the offshore yuan, CNH (+1.44%). In addition, the US Treasury 2-year yield premium over an average of key developed nations’ 2-year sovereign yields (Germany, UK, Japan, Canada, Switzerland, Australia, China) has narrowed as well.     USD/CNH short and medium-term uptrend phases remain intact     Fig 2:  USD/CNH short & medium-term trends as of 10 Jul 2023 (Source: TradingView, click to enlarge chart) Since the start of its upside acceleration on 4 May 2023, the USD/CNH has managed to evolve above its 20-day moving average and today’s price action has managed to stage a rebound after a retest on it. If the 20-day moving average now acting as a key intermediate support at 7.2160 is not broken down, the USD/CNH is likely to remain in its short-term bullish trend trajectory which in turn may see further potential weakness in the CSI 300 and Hang Seng indices. The only catalyst for a potential revival of bullish animal spirits in China equities is a clear signal from China’s State Council on the implementation of new fiscal stimulus measures in terms of scope and timing.  
Sterling Slides as Market Anticipates Possible Final BOE Rate Hike Amidst Weakening Consumer and Housing Market Concerns

Chinese Authorities Extend Support for Property Development Companies, Global Markets Show Modest Gains

ING Economics ING Economics 11.07.2023 08:27
Asia Morning Bites Chinese authorities extend support for property development conpanies.    Global macro and markets Global markets: Small gains in US stocks yesterday were in line with the early steer from equity futures, but those are not providing much direction today.  Chinese stocks also rallied slightly, helped along by an extension of relief measures for property development companies. Two of China’s financial regulators put pressure on financial institutions to extend outstanding loans to these companies. The measures also specify that project-based loans from commercial banks would not be classified as higher risk, and there was added encouragement for support to enable construction projects to be completed. Treasury yields dropped yesterday. The yield on the 2Y note came down by 8.8bp, while that on the 10Y UST fell 6.8bp to bring it back below 4%. The USD weakened further on Monday and has now pushed above the 1.10 level. The JPY has rallied down to 141.25. The AUD and GBP were more mixed. Both rallied in late trading, which brought the GBP up on the day but left the AUD lower than where it started. The rest of the Asia FX pack was very mixed. But with the exception of the IDR, which weakened by 0.39%, moves were muted.   G-7 macro: There were quite a few Fed speakers doing the rounds yesterday, and the key message was that rates needed to be raised further, probably twice more and then held at those levels to be sure inflation was on the path towards its target. That doesn’t match what we saw happening in bond or currency markets, where you would have expected such comments to be supportive of higher yields and the USD.  ECB comments from Nagel and Herodotou were similarly hawkish, though Nagel believed that a hard landing could be avoided in the Eurozone. Today’s macro calendar has only the German ZEW survey and US NFIB surveys to watch for.   Philippines: May trade data will be out today. Both exports and imports should post double-digit falls with the overall trade deficit likely settling at around $4.8bn. Exports will fall due to soft demand for electronics while imports are expected to contract due to relatively less expensive imported energy.   What to look out for: Philippines trade Australia Westpac consumer confidence and NAB business confidence (11 July) Philippine trade (11 July) South Korea unemployment (12 July) Japan PPI inflation (12 July) New Zealand RBNZ policy (12 July) India CPI inflation (12 July) US MBA mortgage application, CPI inflation (12 July) South Korea trade and BoK policy (13 July) China trade (13 July) US PPI inflation (13 July) Singapore GDP (14 July) Japan industrial production (14 July) India trade (14 July) US import prices and University of Michigan sentiment (14 July)
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GBP: Challenging the 1.30 Mark for Cable

ING Economics ING Economics 12.07.2023 09:23
GBP: 1.30 will be tough for cable Sterling and UK interest rate markets did eventually respond to the higher wage data yesterday. Today, the Bank of England has just released its Financial Policy Summary and Record. Headlines suggest large banks have passed stress tests while smaller lenders and shadow banks remain a concern though UK households with high debt will remain below their peak of 2007. At first glance, there seems nothing here to urgently constrain the BoE's monetary tightening plans. US CPI will determine whether GBP/USD dramatically trades through 1.3000 - there is an outside risk to 1.33 should we see a November 22-style move in the dollar. But it is probably better to stay cautious here and after a good rally so far this month, 1.30 could be difficult to break. EUR/GBP has broken to a new low - but again 0.8500 might provide some psychological support.
Euro's Rally Stalls as Focus Turns to Inflation and Data Disappointments

GBP Gains in Cable, EUR/GBP Remains Sideways

ING Economics ING Economics 13.07.2023 08:53
GBP: Cable up, EUR/GBP sideways We are seeing a lot of correlation in short-dated yields around the world, where yesterday's soft US CPI data saw 22bp taken out of the Bank of England tightening cycle for early next year. The main takeaway from yesterday's Bank of England financial stability and subsequent communication appeared to be that consumers and businesses could withstand higher interest rates - were they to materialise. In addition, today's release of May UK GDP data has emerged marginally better than expected.  In some ways, sterling has already enjoyed its re-rating on the very hawkish BoE and thus may not outperform in this current dollar bear phase. However, many investors will now be targeting a move to 1.3300 in GBP/USD - assuming we can close the week above 1.30.  EUR/GBP has reversed off a low near 0.8500 - which now may mark the lower end of the trading range for this quarter
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GBP: CPI Print Holds Key Risks for Sterling Amid Ultra-Hawkish BoE Expectations

ING Economics ING Economics 17.07.2023 10:44
GBP: CPI is a big risk event Our team discussed here how the latest UK wage growth figures likely paved the way to a repeat 50bp hike by the Bank of England in August. The faster-than-expected inflation deceleration in the US hit the pound in some non-dollar crosses, largely because of the vulnerability of the ultra-hawkish BoE market rate expectations. Such vulnerability of the pound remains very much present now as markets continue to factor in 130bp of tightening to a peak in the UK, leaving ample room for dovish repricings. This week’s UK CPI print is thus a major risk event for sterling since signs of deceleration in price pressure would likely nudge the dial in favour of 25bp over a half-point hike in August. Markets currently price in 45bp for August, so the downside risks likely exceed the upside for the pound.  
GBP: Softer Ahead of CPI Risk Event

GBP: Softer Ahead of CPI Risk Event

ING Economics ING Economics 18.07.2023 12:00
GBP: Softer into the CPI risk event The pound has continued to show more vulnerability than most of its G10 peers at the start of this week. EUR/GBP has crept higher in the past few sessions, back to the 0.8600 gauge as volatility in global central bank tightening expectations after the US CPI slowdown seems to have asymmetrically hit those curves that had more room for a dovish repricing, like the GBP one. We are also observing some positioning ahead of tomorrow’s key release of the UK inflation numbers. As discussed by our colleague James Smith here, CPI data will make or break a 50bp August rate hike by the Bank of England. Markets continue to lean on the hawkish side with their pricing: 44bp for August, 116bp in total. Still, peak rate expectations have remained volatile and were scaled back by nearly 15bp yesterday. Today, the UK calendar is empty. We suspect EUR/GBP can remain broadly supported into tomorrow’s CPI.
GBP Inflation Surprise: Pound Faces Downward Pressure as Rate Hike Expectations Shift

GBP Inflation Surprise: Pound Faces Downward Pressure as Rate Hike Expectations Shift

ING Economics ING Economics 19.07.2023 10:08
GBP: Good news on inflation, bad news for the pound Lately, we have been pointing at the pound’s vulnerable position. Markets' aggressive tightening expectations required data to offer no hints of abating price pressures and an overstretched positioning (on the long-end). It appeared that some long positions had been scaled back already ahead of this morning’s key CPI release, with the pound underperforming in the G10 space yesterday. Looking at the June figures released this morning, there is finally some encouraging news for the Bank of England. Headline inflation slid back below 7.9% (below consensus), illustrating a 0.4% MoM increase which has been the slowest seen since early 2022. We know that the BoE is mostly focused on service inflation, and there was good news here too – a decline from 7.4% to 7.2%, contrary to the BoE’s expectations. The question now is whether this is enough to tilt the balance to a 25bp hike in August. We are inclined to think so, even though it remains a close call. The post-CPI Sonia curve looks significantly changed, with 36bp priced in for August and 90bp to the peak, which marks a huge 55bp shift since last week. In FX, the pound is under pressure, down around 0.70% against the dollar. We suspect there is more room to fall in GBP/USD, especially if our expectations for some dollar support into the FOMC prove to be correct. A move to the 1.2800 area in Cable looks possible even before the BoE meeting. EUR/GBP has spiked, but we suspect markets may like some bullish narrative on the euro side beyond the 0.8700 level, and that may not come just yet if the ECB turns fully data-dependent and the eurozone outlook remains lacklustre at best.
GBP: Strong June Retail Sales Spark Sterling Rally

GBP: Strong June Retail Sales Spark Sterling Rally

ING Economics ING Economics 24.07.2023 09:37
GBP: Strong June retail sales provide a brief lift Sterling is rallying this morning on the back of strong UK retail sales data for June. Unseasonably warm weather for the UK last month was seen to be behind the bounce. The data will also feed into the Bank of England's narrative that the consumer can handle higher interest rates. The release has triggered a 20 pip drop in EUR/GBP. However, we think EUR/GBP probably put in an important low near 0.8500 earlier this month and that corporates will now use any EUR/GBP dip below 0.8600 to increase hedges on sterling receivables.  As an aside, reports are suggesting that Prime Minister Rishi Sunak will be opting for a UK general election in November 2024, i.e. as late as possible to allow more chance for the UK economy to recover.
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GBP Faces Re-pricing Pressure amid BoE Rate Cycle Shift and Fed Meeting Expectations

ING Economics ING Economics 24.07.2023 10:23
GBP: BoE re-pricing might have come far enough for the time being Sterling has been under pressure over the last week on the back of the re-pricing of the Bank of England (BoE) rate cycle. Here, expectations for the Bank Rate at the end of this year have dropped from a 6.35% peak to now 'just' 5.88%. Given the lack of top-tier UK data this week and what could be a slightly hawkish Fed meeting on Wednesday, it may well be that the repricing of the BoE rate cycle and sterling softness have come far enough for the time being. This could see EUR/GBP correct back towards the 0.8600 area. GBP/USD could correct to the 1.2670/2700 area this week if the dollar correction does run a little further on the Fed story.
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Asia Morning Bites: Australian Inflation Preview and Global Market Updates

ING Economics ING Economics 26.07.2023 08:05
Asia Morning Bites Australian inflation this morning is an appetizer ahead of tonight's FOMC main course.   Global Macro and Markets Global markets:  US stocks crept higher on Monday, though without much conviction. The S&P rose 0.28%, while the NASDAQ rose a further 0.61%. That leaves the NASDAQ up 35.14% ytd… Chinese stocks responded well to the supportive comments coming out of the Politburo yesterday. The Hang Seng index rose 4.1% and the CSI 300 rose 2.89%. However, we remain cautious about the economic outlook as the recent comments continue to lack detail despite the various “pledges” and “vows” to boost spending.  Ahead of today’s FOMC, which we in Asia will wake up to tomorrow morning, Treasuries were relatively quiet. 2Y yields rose 1.5bp to 4.874%, while 10Y UST yields rose just 1.2bp to 3.884%. EURUSD has drifted back down to 1.1051 on expectations of a hawkish Fed tonight. But the AUD gained ground yesterday, rising to 0.6788.  The GBP and JPY also strengthened against the USD ahead of Friday’s Bank of Japan meeting (see our latest note on this). The positive sentiment in China has enabled the CNY to strengthen to 7.1363 and the yuan was Asia’s best performing currency yesterday. Most other Asian currencies also gained against the USD. G-7 macro:  House prices in the US gained further ground in May, with both the FHFA and S&P CoreLogic measures of house prices rising more than expected.  There were also gains in the Conference Board’s consumer confidence indices. None of which plays into the “one and done” view that the market currently holds for the FOMC. Elsewhere, Germany’s Ifo survey presented more bad news, falling more than expected, though the UK’s CBI business survey was a little brighter. Today is quiet ahead of the Fed (02:00 SGT/HKT) with just US home sales and mortgage applications.   Australia:  CPI inflation for June should show further declines in inflation, with the headline rate declining to around 5.4% YoY from 5.6% currently. That would be a 3 percentage point decline from the December 2022 peak. Inflation should decline again next month. Thereafter, we will need to see month-on-month changes in inflation slow considerably to stop inflation from stabilizing at high levels or even backing higher again, as all the helpful base effects will have been used up until we get nearer to the end of the year. Singapore: Singapore reports industrial production figures for June.  We expect another month of contraction, extending the slump to 9 months of decline, tracking the downturn in non-oil domestic exports.  Industrial production should slip by 6%YoY and we can expect the slide to continue for as long as global demand stays subdued. 
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GBP: Sterling Benefits from Euro Weakness, EUR/GBP to Face Further Downside

ING Economics ING Economics 26.07.2023 08:40
GBP: Sterling enjoys the travails of the euro Having traded as high as 0.87 last week on the back of the softer UK CPI data, EUR/GBP is now back at 0.8570. This is entirely a euro-driven move and does not represent some bullish re-appraisal of sterling's prospects. Indeed, the UK calendar looks very light until the Bank of England (BoE) rate meeting on August 3rd. Here, the market is now pricing 33bp of tightening in the policy rate, down sharply from the 50bp of tightening that was priced in mid-June. Given that we are mildly negative on the euro going into tomorrow's ECB meeting and that UK rates might be dragged higher by US rates later today, we would say EUR/GBP could have a little more downside to the 0.8520 area over the next couple of sessions.
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Asia Morning Bites: Fed's Impact on Global Markets, Focus on ECB and BoJ Decisions

ING Economics ING Economics 28.07.2023 08:24
Asia Morning Bites After the Fed, attention now shifts to the BoJ tomorrow and ECB later today.   Global Macro and Markets Global markets:  US equities didn’t hate Jerome Powell’s message last night at the FOMC following the latest 25bp rate hike. But they didn’t love it either. That probably suggests Powell got it about right in terms of the overall tone. (see our detailed note here). The door is left wide open for more hikes, the question is, will they actually deliver?   The S&P 500 was down just 0.02%, while the NASDAQ fell only 0.12%. Practically flat on the day. Chinese stocks were a bit more subdued also, maybe figuring that the earlier Politburo comments were more hot air than cold cash, and the CSI 300 drifted 0.21% lower, while the Hang Seng index fell 0.36%. US Treasury markets clearly felt that they were appropriately priced for the FOMC message, and 2Y yields came off just 2.3bp, while the 10Y dropped just 1.8bp to 3.867%. These slight yield reductions enabled the EUR to claw a little ground back against the USD, and EURUSD rose to 1.1083. Other G-10 currencies – GBP and  JPY made gains against the USD, though the AUD lost some ground after their June inflation figures, which on the whole, could have been better even though they did show inflation still dropping (see our note here for more detail). Asian FX had a mixed day. The CNY has begun to drift weaker again after its Politburo-induced strengthening earlier. But there were some positive outcomes from the THB and MYR. G-7 macro:  After the FOMC excitement, which turned out not to be so exciting after all, it’s the turn of the ECB today. Here’s a cheat sheet from our European economists, rates and FX strategists, who think that they may veer towards a more data-dependent strategy after this meeting, which could be viewed as a slightly dovish tilt and lead to a weaker EUR. On top of that, we also get Advance 2Q GDP from the US, with a consensus view of 1.8%QoQ annualized growth – only slightly down from 2.0% in 1Q23. Any upside surprise is likely to see bond yields pushing higher again. China: Industrial profits data for June will not likely buck the trend of other weak data. Industrial production growth remained weak in June, while producer price inflation turned more negative. So a  further dip from May’s -12.6%YoY outcome seems possible. What to look out for: ECB and BoJ China industrial profits (27 July) ECB policy decision (27 July) US personal consumption, durable goods orders initial jobless claims (27 July) South Korea industrial production (28 July) Japan Tokyo CPI and BoJ policy (28 July) Australia PPI (28 July) US personal spending, core PCE, University of Michigan sentiment (28 July)
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GBP Faces Downside Risks Amid Bank of England's Interest Rate Decision

ING Economics ING Economics 03.08.2023 10:20
GBP: Some downside risks to sterling The Bank of England announces its interest rate decision and releases a new Monetary Policy Report (MPR) at 1300CET today. Most analysts expect a 25bp hike in the Bank Rate to 5.25%, but a significant minority are looking for a 50bp rate hike. Money markets price around 32bp of tightening today. Despite the welcome UK June CPI figures, no one expects the BoE to let its guard down on inflation and its statement will likely retain words to the effect that rates could be raised further were there evidence of more persistent price pressures in the economy. The market will also be looking out for the CPI forecasts in the monetary policy report and also whether the BoE has anything to say about Quantitative Tightening (QT), currently running at a pace of £80bn per annum. Some are arguing that QT could be accelerated to well over £100bn p.a. A slightly risk-off environment and our baseline call of the BoE only hiking 25bp could be a mild negative for sterling – especially were the BoE to go further than the Fed in acknowledging the process of disinflation. For cable that means an outside risk of a drop to the 1.2580/2600 area (depending on the dollar environment), while EUR/GBP could be correcting back to the 0.8640 area.
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Bank of England's Bold Move: Implications for the British Economy and GBP

Alex Kuptsikevich Alex Kuptsikevich 03.08.2023 10:54
In our conversation with Alex Kuptsikevich, an analyst from FXPro, we delve into the Bank of England's recent decision on interest rates and its implications for the British economy and the GBP. The central bank's move to raise its key interest rate by 25 basis points to 5.25% is a significant step, marking the highest rate since 2008. This decision comes as Britain grapples with one of the highest inflation rates among developed nations, leaving little room for inaction. Unlike the Federal Reserve and the European Central Bank, the Bank of England cannot afford to take a wait-and-see approach. The soaring inflation necessitates swift action, and indications suggest that the central bank may not stop raising interest rates until it reaches 5.75%, matching the peak of monetary tightening seen in 2007.   FXMAG: What is your assessment of the Bank of England's decision on interest rates? Should we still expect a hike in the Isles? And what's next for the GBP in the context of the BoE's decision? The Bank of England is expected to raise its key interest rate by 25 points to 5.25%, the highest since 2008. Britain's inflation rate, one of the highest in the developed world, makes it impossible to pause and look around - a privilege the Fed has used and the ECB may do in September. It is worth bracing for indications that the BoE will not stop raising interest rates before the end of the year, taking the rate to 5.75% - the peak of monetary tightening in 2007.   The Bank of England's hawkish stance is also likely to attract buyers to the Pound, which has weakened over the past three weeks. An appreciating currency will suppress imported inflation and dampen consumer demand, helping to bring CPI back to the 2% target. With explicit hawkish comments from the central bank, GBP can avoid breaking the upward trend of recent months and accelerating its decline.  
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GBP: Sterling's Subdued Reaction Post BoE Rate Hike

ING Economics ING Economics 07.08.2023 08:54
GBP: Sterling has not moved much since BoE The sterling trade-weighted index is only marginally weaker since the Bank of England 'only' hiked by 25bp last Thursday. Market interest rates are slightly lower, but investors have not given up pricing two further 25bp hikes by early next year. At present, we look for one more hike to 5.50% in the Bank Rate (probably at the September meeting) before the BoE is prepared to go into a formal pause. This all points to a range-bound sterling over the next couple of months, but we retain an upside bias in EUR/GBP into year-end. On the UK calendar, this week will be BoE Chief Economist, Huw Pill, speaking at 1815CET today and then not much data until Friday's release of 2Q GDP numbers. For Cable, we see 1.2590/2620 as important support and what should be the lower boundary of this week's range.
GBP's Strong Start: Outpacing G10 Currencies Amid Elevated Risk Sentiment

GBP's Strong Start: Outpacing G10 Currencies Amid Elevated Risk Sentiment

ING Economics ING Economics 08.08.2023 09:12
GBP: Starting on the right foot The pound has had a good start to the week, outpacing other G10 currencies: EUR/GBP was pressing the 0.8600 support yesterday. Interestingly, this was not driven by a rebound in the Bank of England rate expectations (peak rate still seen around 5.70-5.75% in January): it appeared, instead, a mirror of supported sentiment in FX, and the pound showing its ever-increasing sensitivity to risk. There will be very little on the domestic side for GBP until Friday when GDP figures are released. Expect the pound’s beta-to-risk sentiment to remain elevated for now: in the longer run, we still think markets are overestimating BoE tightening, will have to scale down expectations and EUR/GBP can climb back to 0.87-0.88
Steady BoE Rate Expectations Amid Empty Event Calendar in the UK

Steady BoE Rate Expectations Amid Empty Event Calendar in the UK

ING Economics ING Economics 10.08.2023 08:46
GBP: Unusually stable BoE rate expectations The data and Bank of England event calendars are empty today and tomorrow in the UK, and will only pick up again on Friday with the release of GDP and industrial production. The lack of domestic events in the UK has helped an unusual period of very stable BoE rate expectations: markets appear rather anchored to the prospect of a peak rate around 5.70-5.75% for now. EUR/GBP has faced some downward pressure, likely due to the negative impact of the Italian bank windfall tax announcement on the euro, but looks unlikely to break out of recent ranges. 0.8600 should continue to be the gravity level for now.      
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Asia Morning Bites: Chinese Stocks Navigate US Investment Ban, Philippines GDP Data Ahead

ING Economics ING Economics 10.08.2023 09:03
Asia Morning Bites Chinese stocks weather the latest US investment ban. Chinese lending data today and 2Q23 GDP from the Philippines.   Global Macro and Markets Global markets:  It was another day of slight falls for US stocks on Wednesday, though things could have gone either way until late trading when there was a final dip lower. The S&P 500 fell 0.7% while the NASDAQ fell 1.17%. Chinese stocks were mixed, which isn’t a bad result considering the inflation data which turned negative, and the new US ban on investment in Chinese technology. The Hang Seng fell 0.32%, while the CSI 300 fell 0.31%. US treasury bond yields were also mixed on Wednesday, the 2Y yield rose 5.7bp to 4.808%, though the 10Y yield fell 1.4bp to 4.008% after a good auction.  EURUSD recovered a little ground, rising to 1.0976, but failed to make it above 1.10. The AUD and GBP were both fairly flat relative to the previous day, though the JPY saw further losses, rising to 143.657. Asian FX was fairly rangebound yesterday too, with most registering small gains of less than a quarter of a percent. G-7 macro:  US CPI inflation data for July is due today, and we are likely to see something we haven’t seen for some time, namely, annual inflation rising. The good news is that this is mainly due to base effects, and the month-on-month gain in the CPI index is expected to be modest at 0.2%, which is broadly in line with the Fed’s target. The bad news is that this indicates that the going will be a lot heavier for inflation from now on, without those nice helpful base effects that dominated the second quarter. Core inflation is expected to drop only 0.1pp to 4.7%. China: Aggregate finance data is released today. New CNY loans are forecast to rise by CNY780bn, which puts it slightly ahead of last year’s CNY678bn figure. Given the recent disappointing macro data, there might be some downward surprises here, though loans have been one of the stronger parts of China’s data in recent months.   Philippines:  2Q GDP is set for release today.  Market consensus is at 6.0%YoY, a slowdown from the 6.4% reported in 1Q.  Elevated prices likely capped household spending while capital formation also probably slowed due to the lagged impact of previous monetary tightening. Government officials are targeting full-year growth of 6-7%YoY, although given various headwinds, we feel that growth may be headed for a slowdown for the rest of the year.  What to look out for: US inflation Philippines GDP (10 August) RBI policy meeting (10 August) US initial jobless claims and CPI inflation (10 August) Singapore CPI inflation (11 August) Hong Kong GDP (11 August) US PPI inflation, University of Michigan sentiment (11 August)
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GBP: Solid GDP Figures Fail to Alter BoE's Perspective

ING Economics ING Economics 11.08.2023 10:47
GBP: Good GDP numbers no game-changer for the BoE June’s growth numbers in the UK beat expectations, helping to cement a 0.2% quarter-on-quarter figure for the second quarter. Digging into the details of the release, it appears that the surprise is entirely explained by a substantial jump in manufacturing production (up 2.4%), apparently related to pharma and car production. Anyway, the rest of the economy clearly showed signs of resilience too. Our UK economist believes that the implications for the Bank of England are probably quite limited, given the numbers are not far from its forecasts and the focus is firmly on services inflation and wage growth, which are both out next week. The pound is stronger this morning, shrugging off some recent softish momentum possibly related to news that the UK housing market was slowing more rapidly. Next week is a key one for the pound, expect some pre-CPI positioning to dominate in GBP trading and volatility to pick up.
Challenges to USD Dominance: BRICS, Emerging Markets, and Geopolitical Dynamics

Challenges to USD Dominance: BRICS, Emerging Markets, and Geopolitical Dynamics

ING Economics ING Economics 17.08.2023 09:29
Despite some pressure, the USD remains the preferential currency for trade. A greater role of BRICS and other emerging markets in global trade may create more natural demand for alternatives to USD, but this has not happened so far. The higher share of CNY in trade invoicing doesn’t seem to be dethroning USD, but rather pushing out second tier developed market FX, such as GBP. One direction in which USD could be challenged given the geopolitical confrontation is the higher focus of BRICS trade on other emerging market economies. Another area of focus might be the oil market, however BRICS’ share of this market so far is not overwhelming, and the fuel trade overall accounts for a small fraction of the global trade.   One strategy to wean the world off the dollar has been to challenge its international role in trade invoicing. China is the flagship example of this strategy. Since 2009, the People’s Bank of China has been promoting CNY through establishing bilateral swap lines with various central banks (Figure 3). By 2023, the number of those agreements reached almost 40, the total sums available at RMB 4tr (only 2% of it is currently tapped) with around 50% of the sums with China’s Asian partners and neighbours. Amid those measures, the role of CNY in global international reserves increased from virtually zero to 2.6% in 2022, while the share of CNY transactions in SWIFT (an indirect measure of invoicing) doubled to 2.3%.   In parallel, China has been developing its own RMBbased payment system CIPS, its alternative to SWIFT (Figure 4), which has been steadily growing since its inception in 2015 and currently has 91 direct and over a thousand indirect participants worldwide. Meanwhile, one should note that as of March 2022, the Western financial messaging/clearing systems SWIFT/CHIPS had 10X the participants of CIPS and 40X the transactions, likely making the SWIFT picture more representative of the global reality.     It is also worth considering the structure of global trade and the role of dominant currencies per bloc. Based on the structure of global imports (exports would look similar), the geography seems sticky, with roughly one third attributable to the US and EU, another third to China and the rest of Asia, and another third represented by emerging America, Middle East, Central Asia, and Africa (Figure 5). The recent developments include a slight 1pp increase in the share of emerging market countries at the expense of the EU, likely reflecting near-shoring.  
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Global Invoicing and FX Structure: Dollar Dominance and Emerging Trends

ING Economics ING Economics 17.08.2023 09:31
Meanwhile, looking at the structure of global invoicing (Figure 6) it appears that the euro is dominant only in the European region, while the rest of the world is a heavy user of the US dollar. As of 2019, non-USD and EUR currencies had a relatively high share of 21% in the Asia-Pacific, a region represented by China and its close partners. With the lack of fresh panel data on the FX breakdown of invoicing, the more recent trends could only be inferred through indirect data.   SWIFT is one of the possible indirect sources of data on the FX structure of trade. As can be seen (Figure 7) USD seems to be holding ground with a 42% share in 1H23, only slightly lower than the 44% seen in 2015 and higher than 2022’s 41%, with EUR, the second most popular FX, losing share in 2022-23. Among other FX (Figure 8), Asian currencies, CNY and JPY, seem to be gaining ground in SWIFT, and not at the expense of USD or EUR but rather of GBP.     Interestingly, the monthly data from SWIFT is also pointing to the implications of the new geopolitical and military realities of the post Feb-2022 world through the more than doubling of the share of CNY to 4.5% of the trade finance market (Figure 9) at the expense of USD, as the latter became toxic in Russia. Unsurprisingly, Russia also emerged in 2022 as a noticeable offshore CNY market with 3-4% share (Figure 10). There are more details on the Russian de-dollarisation case in the annex.    
GBP Strength and EUR/GBP Testing Lows Amid Economic Data

GBP Strength and EUR/GBP Testing Lows Amid Economic Data

ING Economics ING Economics 17.08.2023 10:10
GBP: EUR/GBP ready to test the lows Higher than expected wage and inflation numbers pushed the Sonia curve to pricing-in 6.0% rates for the first time in a month. On the inflation side, our UK economist notes in this article how the surprise pick-up in service inflation was primarily due to rents, a factor that should not meet the Bank of England’s definition of “persistent”. While a 25bp September hike should be a done deal, we still think a November move is an open question, given indications of abating price pressures in other parts of the economy. Still, the pound is now enjoying a post-repricing strength that looks unlikely to abate rapidly, given the lack of market-moving data and BoE speakers. EUR/GBP looks on track to retest the 0.8505 July lows, also given the lack of strong idiosyncratic defence for the euro.  
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GBP: Disappointing Retail Sales Amidst Supportive Data

ING Economics ING Economics 18.08.2023 09:55
GBP: Retail sales disappoint The UK released retail sales data for July this morning, and the numbers came in quite markedly below expectations. Retail sales including fuel dropped 1.2% month-on-month, and the ex-auto fuel gauge was down 1.4%. The release is in contradiction with a slew of quite supportive data releases for the pound. However, the FX impact has been quite contained given the very little weight that retail sales are given in the Bank of England’s monetary policy decision equation compared to wage and inflation figures, which instead surprised on the upside this week. The Sonia curve is fully pricing in a 6.0% peak rate in the UK, while markets are not convinced the ECB will hike rates at all. Incidentally, the euro is more exposed to China than the UK. That would suggest the 0.8500 support in EUR/GBP is under threat, and we definitely don’t exclude it will be tested or broken temporarily in the coming days. However, the short-term swap differential when the pair last traded at 0.8500 (mid-July) was around 20-25bp wider in favour of GBP, meaning that a further widening of the monetary policy divergence may well be needed to keep EUR/GBP sustainably depressed.
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GBP Outlook: Short-Term Gains Maintained

ING Economics ING Economics 21.08.2023 10:05
GBP: Holding onto gains, short term The Bank of England's trade-weighted sterling index continues to trade near the highs of the year, no doubt propped up by high short-term interest rates. 3m GBP implied yields of 5.40% make it very expensive to FX hedge positions on UK bond markets, for example. It may well be that this sterling strength endures to the next set of releases on UK wages and CPI (September 12th and 20th respectively), with more mileage to be had against the euro than the dollar given headwinds to the external investment environment. For this week, the UK calendar is light until Wednesday's release of PMI data. EUR/GBP can stay offered in a 0.8500-0.8550 range, while GBP/USD remains trapped well inside last week's narrow range of 1.2615-1.2785.
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GBP: Fluctuating Rates Ahead of PMI Data Release

ING Economics ING Economics 23.08.2023 10:21
GBP: Volatile pricing ahead of PMIs Bank of England rate expectations have been quite volatile since the upside surprise in wages and CPI last week. The miss in retail sales on Friday saw peak Bank rate expectations as measured in the Sonia rate drop more than 10bp. Markets are currently looking at 5.95-6.0%, but today’s PMI release in the UK may well move pricing again. Consensus is expecting some slowdown in both manufacturing (already in contraction territory) and services (to 51.0). The Bank of England will also look at the details of the survey searching for evidence that price pressures are abating. EUR/GBP can make another attempt at breaking 0.8500 today, although the sustainability of sub-0.8500 levels is questionable unless markets price in more rate hikes in the UK or price out tightening in the eurozone.
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New Inflation Methodology Sparks Hope for BoE as GBPUSD Faces Resistance

Craig Erlam Craig Erlam 23.08.2023 10:33
New inflation methodology offers hope for BoE 1.28 could be major resistance point for GBPUSD A break of 1.26 could be bearish signal   Recent UK economic data has been a mixed bag, with wages rising at a much-accelerated rate but inflation decelerating as expected. While the Bank of England will be relieved at the latter, the former will remain a concern as wage growth even near those levels is not consistent with inflation returning sustainably to target over the medium term. The ONS released new figures overnight that appeared to suggest core inflation is not rising as fast as the CPI data suggests. The reportedly more sophisticated methodology concluded that core prices rose 6.8% last month, down from 7% the previous month and 7.3% the month before. The official reading for July was slightly higher at 6.9% but down from only 7.1% in May. So not only is the new methodology showing core inflation lower last month but the pace of decline is much faster. That will give the BoE hope that price pressures are easing and they’re expected to do so much more over the rest of the year.     GBPUSD Daily     It’s not clear whether this will prove to be a resumption of the uptrend or merely a bearish consolidation. It is currently nearing 1.28, the area around which it has previously run into resistance this month and around the 38.2% Fibonacci retracement level. Another rebound off here could be viewed as another bearish signal, which may suggest we’re currently seeing a bearish consolidation, while a move above could be more promising for the pound. If the pair does rebound lower then the area just above 1.26 will be key, given this is where it has recently seen strong support. It is also where the 55/89-day simple moving average band has continued to support the price in recent months.
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GBP's Path Amidst Soft PMIs and BoE Tightening Expectations

ING Economics ING Economics 24.08.2023 11:30
GBP: Short term rates remain the key driver Yesterday's price action in EUR/GBP was telling. EUR/GBP briefly dipped under 0.8500 on the soft eurozone PMI releases only to surge to 0.8565 on the soft UK services PMI release. The soft UK data took a large 15bp out of pricing for the Bank of England (BoE) tightening cycle. We still think that the BoE will not deliver on the 60bp of tightening still priced by the markets and that EUR/GBP can later this year move back to the 0.87 area. The only UK data of note today is the August CBI retail sales numbers and we suspect EUR/GBP continues to trade a 0.8500-0.8550 range, while Cable is quite steady near 1.2700 too.
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UK Services and Manufacturing PMI Show Sharp Decline, Raising Recession Concerns and Impacting GBP

Kenny Fisher Kenny Fisher 24.08.2023 12:19
UK Services PMI falls to 48.7 (50.8 expected, 51.5 in July) UK Manufacturing PMI falls to 42.5 (45 expected, 45.3 in July) Cable tests support but rebounds for the third time The UK services and manufacturing PMI surveys fell well short of forecasts this morning, the former deep into contraction territory. What’s more, the weakness was widespread from new orders to hiring and prices paid, which suggests we’re not just talking about a blip in the data, but rather the prospect of a recession in the second half of the year. From the Bank of England’s perspective, there’s a lot within the data that will be viewed as encouraging, with slower employment resulting in less tightness in the labor market and lower prices paid across manufacturing and services sectors indicating easing inflationary pressures, in theory at least. The surveys alone won’t be enough to convince the MPC and another rate hike in September looks a near-certainty but beyond that, traders have been paring back expectations on the back of these releases, with only one more then priced in this year.   A bearish or bullish signal for cable? The pound headed lower after the report having drifted higher over the last week or so but once again it ran into trouble around a previous support level.       That level is just above 1.26 where it also rebounded off a little over a week ago and a little over a week before that. This is clearly now a very notable support level, one which if broken could send a strong bearish signal. What’s interesting is that it’s now rebounded back into the 55/89-day simple moving average band and a close within this would further suggest there’s still plenty of support around this important support zone too. This was a crucial support zone a few months ago and it’s proving so again. To the upside, 1.28 continues to look significant, having provided plenty of resistance over the last few weeks and it also roughly coincides with the 38.2% Fibonacci retracement level.  
GBP Outlook: Moderate Strength Amid Light Calendar

GBP Outlook: Moderate Strength Amid Light Calendar

ING Economics ING Economics 29.08.2023 10:20
GBP: Light calendar this week The pound has started the week modestly stronger, partly helped by some hawkish comments over the week at Jackson Hole by Bank of England Deputy Governor Ben Broadbent, who stressed that inflation is unlikely to slow down as fast as it emerged and that monetary policy will need to remain in restrictive territory for some time. Aside from that, the pound is being helped by a tentative risk-on/dollar-off as London markets re-open after yesterday’s UK national holiday. This week’s calendar in the UK is quite light, meaning that GBP will likely continue to be driven primarily by external factors. One event to keep an eye on is a speech by BoE Chief Economist Huw Pill on Thursday. Cable could find support if we are right to think markets may scale back some bullish dollar positions before having confirmations from US payrolls. When it comes to EUR/GBP, it will be all about the EUR leg and the eurozone’s inflation numbers this week. In line with our bullish euro call, we see a break above 0.8600 as very feasible.
Strong August Labour Report Poses Dilemma for RBA: Will Rates Peak or Continue to Rise?

Sidelined Sterling: GBP Reacts to Global Trends

ING Economics ING Economics 30.08.2023 09:52
GBP: Unlucky bystander The lack of domestic data releases has left the pound moving merely in line with global dynamics. Yesterday’s drop in the dollar sent Cable above 1.2650, a smaller rally compared to other peers. This morning, GBP/USD is inching lower along with other dollar crosses, although it appears that the pound’s sensitivity to risk sentiment is a bit more limited at this moment. EUR/GBP is the pair to watch today as inflation data in the eurozone are released. The pair broke above 0.8600 yesterday, and signs of resilient inflation in Spain and Germany could see the rally extend to test the 0.8640 100-day MA.   On the UK side, it will be worth watching mortgage approval figures for July along with other credit statistics. Surging rates and declining demand for loans have already triggered a house price correction in the country.
CHF/JPY Hits Fresh All-Time High in Strong Bullish Uptrend

GBP Rate Curve Softens as Bank of England Talks 'Table Mountain' Approach

ING Economics ING Economics 01.09.2023 10:52
GBP: Table top mountain The UK rates curve softened by 9-10bp yesterday on comments by Bank of England Chief Economist Huw Pill, that the policy rate profile would look more like a "table mountain" – the inference here is that high rates would be kept for longer than the need to take rates much higher per se. However, the market still prices another 50bp of tightening into next year, which is 25bp too much in our opinion. The risk of re-pricing looks greater for the BoE than the ECB curve and keeps us positive on EUR/GBP. Levels in the 0.8500/8550 area should be good for corporates to hedge GBP receivables or EUR payables.  
Ukraine's Grain Harvest Surges, Export Challenges Persist Amid Black Sea Grain Initiative Suspension

GBP at Crossroads: BoE Governor Andrew Bailey's Upcoming Address

ING Economics ING Economics 06.09.2023 12:22
GBP: Look out for BoE Governor Andrew Bailey at 3:15 pm CET Sterling is coming under pressure against the strong dollar and marginally outperforming the pressured euro. High wage growth looks to be the primary reason for the market retaining expectations of a further 57bp of Bank of England (BoE) tightening in this cycle – making pivotal next Wednesday's release of the average earnings figures for July. Our base case is one more 25bp hike from the Bank on 21 September and then a prolonged pause. The manufacturing slump in the eurozone and these high energy prices suggest EUR/GBP can trade at the lower end of that 0.8500-0.8600 range into that BoE rate meeting on 21 September. GBP/USD looks more vulnerable to a firm test of 1.2500 psychological support.  
Positive Shift in Inflation Structure: Core Inflation Falls in Hungary

Dovish BoE Comments Drive EUR/GBP Rally

ING Economics ING Economics 08.09.2023 11:00
GBP: BoE dovish comments hit the pound EUR/GBP has experienced a good rally in the past two sessions, now trading at around 0.8580 on the back of dovish comments by Bank of England members. Yesterday, BoE Governor Andrew Bailey stressed the downside potential of UK inflation and said that rates were likely near the top of the cycle. He was joined by two other MPC members at the Parliament testimony, Jon Cunliffe and Swati Dhingra, who also stressed inflation is at a turning point and gave few reasons to suggest multiple more hikes are on their way. It appears that the BoE may be transitioning to a higher-for-longer narrative. Markets are now for the first time starting to cast some doubts about whether the BoE will hike rates at all at the 21 September meeting, with pricing having dropped below 20bp after yesterday’s Parliament testimony. For now, our base case is that they will go ahead with a hike but that it will be the last one, meaning markets will have to price out the additional hike still priced for later this year. EUR/GBP upside potential remains decent in our view. Today, keep an eye on the BoE decision-making panel survey and on any evidence of abating inflationary pressure.
AUD Faces Dual Challenges: US CPI Data and Australian Labor Market Statistics

UK Home Prices Drop 4.6% in Year to August, Weakest Since 2009, Adding Pressure on GBP

Kenny Fisher Kenny Fisher 08.09.2023 13:43
UK home prices plunge 4.6% in the year up to August, worst y/y drop since 2009 UK businesses expected to deliver smallest price rise since February 2022 GBP underperforms as BOE rate hike expectations shrink; implied rate peak at 5.699%  vs 5.671% on Sept 1st GBP/USD (a daily chart of which is show) has steadily weakened this month, now falling below the 1.25000 level.  This occurs within the context of a strong accelerated downtrend extending originally from the 1.3140 area highs in July.  The UK inflation outlook is for pricing pressures to continue to ease as business prepare to raise prices at the slowest pace since 2021.  The latest report from the BOE’s Decision Maker Panel (DMP) survey showed one-year ahead inflation expectations improved from 5.4% in July to 4.8% in August.  The three-year outlook improved a tick to 3.2%. With BOE rate hike expectations starting to come down, the focus is shifting to how weak is the economy.  Britain’s residential property market woes are not getting any better as a couple of the top lenders signal prices are falling at the worst pace since 2009.  Questions are growing about how strong the consumer is and if the debt situation will significantly worsen.     Inflation is still too high and that seems to have markets convinced that the BOE will deliver one more rate hike.  Divide is brewing amongst policymakers, but it should easily be justified to deliver one more rate hike in this cycle.  If the softer trend emerges with inflation, the BOE might be done hiking and that could pave the way for pound weakness towards the 1.2350 region.  Major support resides at the 1.2000 and 1.2090 zone.    
Euro-dollar Support Tested Amidst Rate Concerns and Labor Strikes

GBP Data Check: Evaluating Dovish Trends and Bank of England Expectations

ING Economics ING Economics 11.09.2023 11:03
GBP: Data check this week The pound emerges from a difficult week where the dovish rhetoric ahead of future Bank of England decisions consolidated and markets continued to scale back tightening expectations. It must be noted that the largest contributor to the dovish re-pricing in the GBP curve has been the BoE’s own communication, which seemed to shift more in favour of a higher-for-longer rather than a higher peak. One bit of data that endorsed the dovish narrative came from the BoE’s Decision Maker Panel survey, which showed a widespread decline in inflationary pressure. But the BoE has made clear that it’s hard data that matters, and this week’s UK calendar will be quite helpful in that sense. Wage and jobs data will be the key release tomorrow. Private sector wage growth currently stands at 8.2% and looks likely to remain unchanged, but there’s an outside risk that we see this nudge slightly lower. The unemployment rate may also nudge a bit higher. All that may fail to invert the dovish trend on UK rate expectations ahead of next week’s Bank of England’s policy meeting, although the pricing has already dropped quite substantially (16bp priced in for September, 35bp to a peak). Our economics team still thinks the BoE will go ahead with a hike this month. Inflation figures are out one day before the meeting, so while more GBP weakness is possible around this week’s data releases, next week could see some recovery. EUR/GBP may be trading well above 0.8600 once we get to the BoE meeting.
GBP: Dovish Wage Developments Lead to Lower Sterling Prices

GBP: Dovish Wage Developments Lead to Lower Sterling Prices

ING Economics ING Economics 13.09.2023 08:56
GBP: Rolling lower As we discussed in yesterday's FX Daily, the market did read the latest wage developments slightly dovishly and re-priced both the Bank of England tightening cycle and sterling lower. It is quite incredible to see the Bank Rate now priced just above 5.50% next February. This terminal rate had been priced close to 6.50% just a few months ago. If we are right with our call for an ECB rate hike tomorrow, EUR/GBP could edge up towards the 0.8670 area. And given that we like a continued strong dollar in the short term, expect GBP/USD to press the 200-day moving average at 1.2430. Recall that based on speculative positioning data, both the euro and sterling look the most vulnerable to further dollar strength.
Pound Slides as Market Reacts Dovishly to Wage Developments

Pound Slides as Market Reacts Dovishly to Wage Developments

ING Economics ING Economics 14.09.2023 08:42
GBP Rolling lower As we discussed in yesterday's FX Daily, the market did read the latest wage developments slightly dovishly and re-priced both the Bank of England tightening cycle and sterling lower. It is quite incredible to see the Bank Rate now priced just above 5.50% next February. This terminal rate had been priced close to 6.50% just a few months ago. If we are right with our call for an ECB rate hike tomorrow, EUR/GBP could edge up towards the 0.8670 area. And given that we like a continued strong dollar in the short term, expect GBP/USD to press the 200-day moving average at 1.2430. Recall that based on speculative positioning data, both the euro and sterling look the most vulnerable to further dollar strength. Chris Turner    
Assessing the Path: Goods and Shelter Inflation and the Fed's Pause Decision

Risk Sentiment Shifts: Key Indicators and Impact on G10 Currencies

FXMAG Team FXMAG Team 14.09.2023 08:55
At -0.78 (vs -0.83 last week) our Risk Index has pulled back a little from elevated levels indicating significant risk-seeking behaviour by investors. The downward trend in the Index is decelerating. The pillars of the recent improvement in risk sentiment are (1) slowing US inflation and (2) investors’ hope that the Fed is likely finished hiking rates or very close to the end of its tightening cycle. Some recent events have dented this hope, including rising food prices on the back of El Nino and higher oil prices on the back of Saudi Arabia & Russia deciding to extend their voluntary production cuts. Higher food & energy prices threaten a re-acceleration in inflation and at the very least high rates for longer or worse a return to Fed rate hikes. Today’s US headline inflation data will be supported by higher energy prices, which will leave investors focusing on the core inflation data for evidence of further deceleration in inflation. Investors are understandably nervous ahead of this data release. The largest contributors to the rise in our Risk Index were rising Sovereign-EM spreads as well as the outperformance of cyclical stocks by defensive stocks. Rising FX market volatility also contributed to the rise in the Index. Falling credit spreads and gold prices restrained the rise in our Risk Index. The CAD is the G10 currency most sensitive to our Risk Index, followed by the GBP and EUR. These currencies are negatively correlated with the Index. The JPY & SEK are the most positively correlated currencies with the Index.      
Market Risk Sentiment Adjusts as Investors Eye US Inflation Data

Market Risk Sentiment Adjusts as Investors Eye US Inflation Data

FXMAG Team FXMAG Team 14.09.2023 09:01
At -0.78 (vs -0.83 last week) our Risk Index has pulled back a little from elevated levels indicating significant risk-seeking behaviour by investors. The downward trend in the Index is decelerating. The pillars of the recent improvement in risk sentiment are (1) slowing US inflation and (2) investors’ hope that the Fed is likely finished hiking rates or very close to the end of its tightening cycle. Some recent events have dented this hope, including rising food prices on the back of El Nino and higher oil prices on the back of Saudi Arabia & Russia deciding to extend their voluntary production cuts. Higher food & energy prices threaten a re-acceleration in inflation and at the very least high rates for longer or worse a return to Fed rate hikes. Today’s US headline inflation data will be supported by higher energy prices, which will leave investors focusing on the core inflation data for evidence of further deceleration in inflation. Investors are understandably nervous ahead of this data release. The largest contributors to the rise in our Risk Index were rising Sovereign-EM spreads as well as the outperformance of cyclical stocks by defensive stocks. Rising FX market volatility also contributed to the rise in the Index. Falling credit spreads and gold prices restrained the rise in our Risk Index. The CAD is the G10 currency most sensitive to our Risk Index, followed by the GBP and EUR. These currencies are negatively correlated with the Index. The JPY & SEK are the most positively correlated currencies with the Index.        
EU Investigates Chinese Electric Vehicle Subsidies, Impact on the EV Market

Paring Back of BoE Hike Expectations Weakens GBP Gains

FXMAG Team FXMAG Team 14.09.2023 10:01
GBP: Paring back of BoE hike expectations encouraging reversal of GBP gains The pound has continued to trade at weaker levels overnight after selling off yesterday following the release of the latest labour market report from the UK. It has resulted in EUR/GBP rising back above the 0.8600-level while cable is continuing to hold just above support from the 200-day moving average that comes in at around 1.2430. The pound has been undermined recently by the paring back of BoE rate hike expectations as we highlighted in our latest FX Weekly report (click here). The UK rate market has become less confident that the BoE will deliver multiple further rate hikes in the current tightening cycle. There are 19bps of hikes priced in for next week’s MPC meeting and 39bps of hikes by February of next year. It implies that the UK rate market is currently attaching around a 50:50 probability to the BoE delivering one final hike after next week’s 25bp hike which is viewed as almost a one deal. The main trigger for the paring back of BoE rate hike expectations have been comments from BoE officials including Governor Bailey and Chief Economist Pill who have signalled that the rate hike cycle is close to an end and that keeping rates higher for longer is preferred to the alternative of hiking rates further towards 6.00%. Next week’s updated forward guidance from the MPC meeting will be important in determining whether the BoE plans to deliver one final hike or is becoming more confident that it has raised rates enough   At the same time the recent data flow from the UK is helping to dampen BoE rate hike expectations as well. While yesterday’s labour market report did show average weekly earnings hitting a new high of 8.5% in July, the details of the report provided more encouragement that labour demand continues to weaken and wage growth is beginning to slow. Employment dropped by 207k and the unemployment rate ticked up further to 4.3% as it moved further above the cycle low of 3.5% from las August. Back in the August MPR the BoE had forecast the unemployment rate would rise to only 4.4% by the end of next year. Job vacancies also continued to fall and moved below 1 million. After stripping out more volatile bonuses, regular pay growth in the private sector has slowed in recent months coming. The HMRC’s median pay measure even declined by -0.5%M/M suggesting the peak has been reached for pay growth.   Furthermore, it has just been revealed that services sector growth was much weaker than expected at the start of Q3. After expanding by 0.5%M/M in June, service sector output contracted by -0.5% in July. It has reinforced the pound’s downward momentum  
Australian Employment Surges in August Amid Part-Time Gains, While US Retail Sales and PPI Beat Expectations

GBP Remains Vulnerable Amidst Mixed Data and Economic Uncertainty

FXMAG Team FXMAG Team 14.09.2023 10:04
GBP: treading water The GBP remains among the G10 FX underperformers MTD, as mixed UK jobs data could not offer the GBP any sort of relief yesterday with GBP rates falling somewhat. Today the focus shifts onto the latest UK GDP and external trade figures for July, although they may not be of a greater help either. A month ago, UK activity for June surprised massively to the upside (0.5% MoM vs 0.2% expected) thanks to positive base effects stemming from the extra bank holiday, but the ebb & flow in activity from one month to another may have had longer legs. The economists surveyed by Bloomberg indeed look for a -0.2% MoM contraction in July UK GDP, as other data sets already suggest that poor weather conditions in the month somewhat deterred UK consumers, on top of tighter monetary conditions more broadly speaking. Ultimately, today’s data is unlikely to change the prospects that the UK economy will likely just continue to stagnate, as per the latest scenario outlined by the BoE in its August MPR and reiterated yesterday by upcoming Deputy Governor Sarah Breeden. Against this not-so-rosy backdrop, the GBP may just muddle through as well, while being possibly more vulnerable to stagflation threats than other FX majors.   JPY: watching the US CPI data Following BoJ Governor Kazuo Ueda’s hawkish words in the Japanese press over the weekend, investors have continued to increase their bets that the BoJ will end its NIRP sometime in early 2024. The 5Y JGB yield has jumped to its highest level since January 2023, when there was last speculation of a shift in the BoJ’s ultraloose monetary policy stance. This was the time ahead of PM Fumio Kishida nominating Ueda to be BoJ Governor and Ueda affirming he would be sticking to the current monetary policy regime. The 10Y JGB yield is also clinging to its recent 5bp gain to around 0.70%. While this speculation and higher JGB yields initially helped the JPY, its rally has faded and the currency is now only modestly less weak than it was before Ueda’s remarks. The culprit of this renewed weakness in the JPY is investors positioning for a potential upside surprise in US inflation when CPI data is released later today. The main driver of the JPY remains UST yields rather than JGB yields given that the latter remain tied down by the BoJ. An upside surprise in US CPI would place further pressure on Japan’s policymakers to verbally intervene in FX markets to support the JPY to potentially be followed by actual intervention. The BoJ meeting next week will be a big litmus test on this front. What is clear from the recent rhetoric of policymakers is that both MoF and BoJ officials now acknowledge a weak JPY is bringing about more cost-push inflation, which is hurting households, than the desirable demand-pull inflation required to bring about a sustainable end to deflation. This is a significant shift in rhetoric given that previously officials constantly said the benefits of a weak JPY for the economy more than offset its drawbacks.
Asia Morning Bites: China's Data Deluge, ECB Rate Hike, and US Retail Sales Surprise

Asia Morning Bites: China's Data Deluge, ECB Rate Hike, and US Retail Sales Surprise

ING Economics ING Economics 15.09.2023 08:23
Asia Morning Bites China's data deluge draws near. ECB hikes rates while US retail sales surprise on the upside.   Global Macro and Markets Global markets:  We will start today with FX, given the ECB meeting yesterday, and the response of the market to what our Head of Global Macro is describing as a dovish hike. EURUSD has dropped sharply to 1.0640, and this has taken the GBP lower too, now trading at just over 1.24. The BoE meets next week and is also expected to hike  - also perhaps its last. The AUD has not been much impacted by this move, though despite the stronger-than-expected labour data yesterday, markets seem relaxed and are expecting no further tightening. We are not so relaxed. The JPY was also a little softer, rising to 147.50 . Other Asian FX was fairly quiet yesterday. The CNY is still hovering below 7.28 ahead of today’s big data release. European bond yields dropped after the ECB decision. The yield on the 10Y bond fell 5.8bp to 2.588%. US Treasury yields were not affected by the European news and had to contend with another stronger-than-expected macro release in the form of retail sales. The US 10Y Treasury yield rose 3.8bp to 4.286%, while yields on 2Y USTs rose 4.2bp to 5.011%. Equity markets seemed to like the sense that rates aren’t going any higher (if you believe the central bankers, and it's not like they have a great track record!). The S&P 500 rose 0.84% while the NASDAQ rose 0.81%. The NASDAQ is up 33.05% year-to-date, just in case you’d lost track. Triple witching today, so it may be volatile. Chinese stocks didn’t do a lot yesterday. The Hang Seng rose 0.21%, while the CSI 300 fell 0.08%. Volumes were fairly low.   G-7 macro:  The US economy is still refusing to roll over. August retail sales rose 0.6% MoM, much higher than the 0.1% expected. The control group growth rate was slower at 0.1%, but this was still more than had been expected. Markets are still not even 50% expecting another Fed rate hike. But you have to wonder how long they can keep this up after the recent upside inflation miss. US August PPI data also came in above expectations. It’s a quieter day today, except for US existing home sales and the University of Michigan consumer confidence figures.   China:  The data deluge kicks off at 09:20 this morning (HKT/SGT) with the 1Y medium-term lending facility rate, which given the PBoC’s struggles to support the CNY, and yesterday's RRR cut, seems likely to be left unchanged at 2.5%. New home prices come out at 09:30, and will likely show further month-on-month decline. Other property-related data today is unlikely to offer much sign of life. But at 10:00, the activity data emerges, and here, we think there may be some slightly less negative news. Recent export data and new CNY loan figures could indicate that production and retail sales numbers may increase slightly in year-on-year terms from last month. To be sure, we aren’t expecting them to look strong, but a positive direction of travel could provide some support for markets. We will know soon enough.     India:  August trade figures come out later this afternoon. The slide in exports has been fairly consistent, but we are now reaching a point where year-on-year declines may start to shrink from double digits to low single digits. That is also likely on the import side, and the trade deficit is likely to remain close to last month’s -USD20.67bn.   Indonesia:  Indonesia reports trade numbers today.  The market consensus suggests that we'll have another month of contraction for both exports and imports as global trade remains subdued.  The trade balance is forecast to settle in surplus but at a less substantial level of roughly $1.5bn.  Fading support from the trade surplus could be one reason for the IDR's struggles recently, and we could see the currency stay under pressure until we see this trend reversed.     What to look out for: China data deluge China medium term lending rate (15 September) Indonesia trade balance (15 September) China retail sales, industrial production (15 September) US University of Michigan sentiment and existing home sales (15 September)
GBP: ECB's Dovish Stance Keeps BoE Expectations in Check

GBP: ECB's Dovish Stance Keeps BoE Expectations in Check

ING Economics ING Economics 18.09.2023 09:06
GBP: ECB helped BoE expectations stay low Sterling followed the euro lower against a backdrop of broad-based dollar strengthening yesterday, and Cable has heavily tested the 1.2400 support in the past 24 hours. The dovish tilt by the ECB likely added fuel to the ongoing dovish re-pricing of Bank of England rate expectations, and markets now price in only 34bp to a peak, a 40bp correction over the past month.   EUR/GBP moved back below the 0.8600 level after the ECB dovish hike, and may stay under some mild pressure into the BoE, but looks more likely to struggle finding much direction in the near term. This morning, the BoE will release a 12-month-ahead inflation expectation survey, which came in at 3.5% last month, although it is not likely to move the market substantially. Both investors and policymakers will still get the chance to look at a CPI print (on Wednesday) before the BoE announcement (on Thursday), which has a good chance of tilting market pricing.
Sterling Underperformance: Anticipation Builds Ahead of BoE Announcement

Sterling Underperformance: Anticipation Builds Ahead of BoE Announcement

ING Economics ING Economics 19.09.2023 13:54
GBP: Underperforming into the BoE The pound has been the worst-performing G10 currency in the past 30 days, and Bank of England members’ dovish comments are surely to blame. We are not surprised to see investors staying broadly defensive in FX ahead of tomorrow’s CPI figures and Thursday’s BoE announcement. The data has not pointed clearly in the dovish direction, but BoE communication has (compared to previous expectations), so even evidence of lingering price pressures tomorrow does not guarantee a hike on Thursday. We discuss why the BoE might keep rates on hold and what would be the impact on sterling in this note. Our base case remains a rate hike, although the upside for sterling would entirely depend on whether the BoE will convince markets they can do more (a similar situation to last week’s ECB meeting) since the Sonia curve prices in 38bp of tightening in total, even if they attach only an 80% implied probability of a hike on Thursday.
Pound Sterling: Short-Term Repricing Complete, But Further Uncertainty Looms

Pound Sterling: Short-Term Repricing Complete, But Further Uncertainty Looms

ING Economics ING Economics 25.09.2023 11:09
GBP: Most of the short-term repricing is done It was not our baseline view, but we did warn that EUR/GBP could hit 0.8700 yesterday if the Bank of England paused, and that is what happened. As our UK economist, James Smith, discusses in his BoE review comment, we think the terminal rate has been reached now at 5.25%. However, given that it was such a close vote yesterday (5-4) there is still a chance of one final hike at the 2 November BoE meeting. This means that the market pricing of around a 50% chance of one last hike may largely stay with us until that meeting. Pricing of the BoE curve has been a big driver of sterling this year and we suspect EUR/GBP can now drift in a 0.86-0.87 range into that meeting. A leg higher to 0.88/89 probably requires some news of a serious UK slowdown and the market moving on to pricing the 2024 easing cycle. GBP/USD is another matter, however. If EUR/USD trades down to 1.05, GBP/USD could be trading near 1.21.
Asia Morning Bites: Singapore Inflation and Global Market Insights - 25 September 2023

Asia Morning Bites: Singapore Inflation and Global Market Insights - 25 September 2023

ING Economics ING Economics 25.09.2023 11:23
Asia Morning Bites 25 September 2023 Singapore inflation to ease slightly lower on a quiet day for macro.   Global Macro and Markets Global Markets: Friday was a choppy day for US stocks, and though they ended marginally down, futures suggest that they will open positively today. Chinese stocks had a rare positive day. The CSI 300 rose 1.81%, while the Hang Seng index climbed 2.28%. US Treasury yields declined across the curve on Friday. 2Y UST yields fell 3.4bp to 5.11%, while yields on the 10Y bond fell 6bp to 4.434%. That didn’t have much impact on the USD. EURUSD. remained almost unchanged at around 1.0650. The AUD gained a little, rising to 0.6440, and the GBP slid further to 1.2243. James Smith has made a video which describes how markets are now eyeing rate cuts following the recent Bank of England pause. The JPY weakened on Friday after the disappointing lack of anything new from Governor Ueda at Friday’s BoJ meeting. Here’s a note by Min Joo Kang on the meeting and her thoughts about what comes next. Apart from the JPY, most Asian currencies made modest gains on Friday, with the THB and KRW out in front. The THB is sitting just above 36 currently, the KRW at 1336.75.   G-7 macro: There was very little on the macro calendar on Friday apart from the Bank of Japan meeting, and it is a quiet start to the week too, with Germany’s September Ifo survey the only notable data point.  Singapore:  Singapore reports inflation today on a quiet day in what will be a quiet week, with much of Asia off for mid-Autimn holidays later this week.  The market consensus suggests a slight dip for both headline and core inflation as favourable base effects and softer retail sales kick in. Headline inflation could dip to 4%YoY (from 4.1%YoY), while core inflation should slip to 3.5%YoY from 3.8%.  This alongside slowing growth will be factored into the upcoming MAS decision next month with no likely adjustments to policy settings just yet.      What to look out for: US sentiment data Singapore inflation (25 September) Japan department store sales (25 September) US Dallas and Chicago Fed national activity (25 September) Fed Kashkari speaks (25 September) South Korea consumer confidence (26 September) Singapore industrial production (26 September) US Conference board consumer confidence, new home sales, FHFA house price index (26 September) Australia CPI inflation (27 September) China industrial profits (27 September) Japan machine tool orders (27 September) US durable goods orders and MBA mortgage applications (27 September) Australia retail sales (28 September) US initial jobless claims, personal consumption, pending home sales (28 September) Fed's Powell, Goolsbee and Barkin speak (29 September) Japan Tokyo CPI inflation and labor report (29 September) Thailand trade (29 September) US University of Michigan sentiment, personal spending (29 September)
GBP: Approaching 1.2000 Level Amid Rate Dynamics

GBP: Approaching 1.2000 Level Amid Rate Dynamics

ING Economics ING Economics 05.10.2023 08:39
GBP: 1.2000 in sight The sterling market is now bracing for the 1.2000 level to be tested in Cable. Unlike the euro, sterling is not suffering from a big rate disadvantage to the dollar, but the GBP/USD 2-year swap rate gap has shrunk to only 17bp – from a 135bp peak in July – after the combined effect of a hawkish Fed and dovish Bank of England repricing. That swap rate gap is consistent with GBP/USD trading around current levels and a break below 1.2000 would not be an aberration compared to recent history. Should we see the 1.2000 support collapse, the 1.1830 March low is the next support level to watch. The UK data and central bank calendar is very quiet today.
National Bank of Romania Maintains Rates, Eyes Inflation Outlook

GBP: Forward Guidance Revival - Analyzing Market Responsiveness to BoE's Monetary Policy Outlook

ING Economics ING Economics 03.11.2023 14:54
GBP: Forward guidance returns. Is the market listening? Yesterday's Bank of England (BoE) 6-3 vote for unchanged rates came as no surprise. What was a surprise was the re-introduction of forward guidance – i.e., that 'monetary policy is likely to need to be restrictive for an extended period of time'. Clearly, the BoE is trying to prevent the premature easing of financial conditions which would be inconsistent with policy still threatening a further hike. Arguably, their intervention here did have some impact on markets where the Sonia Dec 25 futures contract – which was briefly up 16 ticks on the day – only ended up 11 ticks. This is in an environment of softer money market rates globally. Investors know that forward guidance is used as a tool by central bankers (remember the Fed in 2021 saying that rates would stay at zero until 2024?) and it looks like the next nine months will be a game of cat and mouse as investors push for rate cuts and the BoE fights back. We think data will probably support investors and see upside risks to our year-end EUR/GBP forecast of 0.8700. GBP/USD should do a little better today in the risk-positive environment. Favour a test of 1.2250 above which 1.2335 opens up.
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GBP: BoE Chief Economist Fuels Rate Cut Expectations, Sterling Faces Headwinds

ING Economics ING Economics 07.11.2023 15:52
GBP: Not quite the BoE pushback we were expecting Having re-introduced forward guidance last week, we thought the Bank of England (BoE) might have pushed back against market pricing for rate cuts in the second half of 2024. Instead, BoE Chief Economist Huw Pill yesterday said that expectations for rate cuts from next summer looked reasonable. We think these comments are a mild sterling negative and given the risk that Fed-speak puts equities on the back foot again, risk-sensitive sterling could hand back some of its recent gains. For example, EUR/GBP could trade back up to 0.8710/20 and GBP/USD could drop back to 1.2290 perhaps 1.2250. Additionally, Pill's warnings of soft UK CPI releases coming through over the coming months could hold sterling back.
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Asia Morning Bites: US-China Talks Show Progress, Treasury Yields Rise, and Global Markets React

ING Economics ING Economics 16.11.2023 12:15
Asia Morning Bites High-level communication to resume between the US and China as Biden hails meetings with Xi as making "real progress". Taiwan's main opposition parties are reported to be combining forces for the upcoming Presidential Election.   Global Macro and Markets Global markets:   A mixed run of US data yesterday resulted in Treasury yields pushing higher again. 2Y yields rose 7.6bp to 4.912%, while yields on 10Y US Treasuries rose 8.4bp taking them back above the 4.50% level to 4.531%. EURUSD has dropped slightly following this yield reversal but remains at 1.0849 for now. The AUD is reasonably stable at just over 0.65, but the GBP and JPY have both lost more ground. USDJPY is now 151.29. Most of the Asian FX pack made decent gains yesterday, but will probably revert to a weakening bias today. US stocks made only very small gains yesterday. Chinese stocks did far better. The Hang Seng rose 3.92% while the CSI 300 rose 0.7% on the slight improvement in activity data. On the political front, a resumption of high-level dialogue as President Biden hails talks with President Xi as making “real progress”, is probably the main win from the Pre-APEC session. Elsewhere, the Financial Times reports that the two main opposition parties in Taiwan will join forces against the DPP for January’s Presidential elections. It remains to be seen which party’s candidate will stand for the Presidential role. This, it is reported, will be determined by a third-party analysis of how the parties are polling. These parties are viewed as being more open to dialogue with Mainland China, so they could usher in a less tense election period than has historically been the case. G-7 macro: Yesterday’s US data stuck with the theme of price pressures waning, but activity remaining more resilient (see here for a more detailed note from JK). PPI inflation dropped to 1.3% YoY following a 0.5% MoM decline, and core PPI inflation also slowed to 2.4% YoY from 2.7%. Retail sales, however, were expected to fall 0.3% MoM in October, but only fell 0.1%. The control group of sales which strips out volatile items, rose 0.2%MoM – in line with expectations. UK inflation released yesterday showed a larger-than-expected fall. The CPI inflation rate tumbled to 4.6% from 6.7%. The news flow today won’t be quite as interesting. US export and import price data is rarely a market mover. Although we do also get industrial production, which is forecast to decline by 0.4% MoM, as well as the Philly Fed business survey and usual weekly jobs figures. Japan:  Exports for October rose 1.6%YoY – beating the forecast 1.0% gain, while imports were also a little less negative than expected at -12.5% YoY, though not enough to dent the trade balance. In adjusted terms, the deficit shrank to -JPY462bn. Alongside the trade figures, core machine orders data for September showed a decent 1.4% increase, beating expectations, though still leaving the annual rate down 2.2% YoY Australia: October employment was fairly strong. The total employment change from the previous month was +55,000, up from +7,800 in September. Most of the gain was due to a 37,900 rise in part-time jobs, so the total figure flatters the positive impact this will have on domestic demand. Full-time employment rose 17,000. There was a much bigger than usual increase in unemployment, which helped lift the unemployment rate to 3.7% from 3.6%.   Philippines:  The Bangko Sentral ng Pilipinas (BSP) is expected to keep rates unchanged today at 6.5%.  BSP hiked policy rates by 25bp two weeks ago in an off-cycle move so they are expected to hold today.  BSP Governor Remolona however could retain his hawkish rhetoric should inflation projections for 2024 point to another year of above-target inflation.    What to look out for: Australia jobs data and BSP meeting Japan trade balance (16 November) Australia labour report (16 November) Philippines BSP policy (16 November) US initial jobless claims and industrial production (16 November) Singapore NODX (17 November)
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GBP: Anticipating Tax Cuts in Autumn Statement for a Balanced Fiscal Approach

ING Economics ING Economics 22.11.2023 14:42
GBP: Focus on the autumn statement A year is a long time in politics. Just over a year ago, erstwhile UK Prime Minister Liz Truss blew up the UK gilt market with her plans for unfunded tax cuts. Today, the more fiscally responsible Chancellor, Jeremy Hunt, is also looking to deliver tax cuts – but cuts which do not derail plans to stabilise the UK debt trajectory over a five-year horizon. We think some looser fiscal policy will be welcomed by sterling at this juncture and continue to favour EUR/GBP trading back below 0.8700.
GBP Outlook: EUR/GBP Nearing Critical Support at 0.8700 Amid UK Tax Cuts and Robust PMIs

GBP Outlook: EUR/GBP Nearing Critical Support at 0.8700 Amid UK Tax Cuts and Robust PMIs

ING Economics ING Economics 27.11.2023 14:24
GBP: More downside room for EUR/GBP EUR/GBP continues to press the 0.8700 support after what has been a very eventful week in the UK. The tax cuts announced by the Treasury are, on paper, a sterling-positive. They are both pro-growth and pro-inflation and do not seem to have excessively unnerved the bond market – especially when compared to those announced previously under former prime minister Liz Truss. PMIs also came in stronger than expected yesterday, with the services and composite indices moving back above the 50.0 mark. Markets have priced out around 20bp of cuts in the September 2024 contract in the past week. We expect GBP to keep its decent momentum, especially in EUR/GBP, which we expect to make a decisive break below 0.8700 in the coming days. We are still expecting some USD resilience and see a capped upside for Cable.
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Fiscal Boost Propels Sterling Amid Fiscal Divergence: Weekly Outlook for GBP

ING Economics ING Economics 27.11.2023 15:19
GBP: Fiscal divergence Sterling has been performing a little better of late, no doubt buoyed by the better global risk environment. We do also think that the fiscal story has helped, where the UK government plans to put £20bn to work in the economy, while countries like Germany remain hamstrung by its constitutional court. At the same time, the slightly better November PMI readings have supported sterling too.  These developments have left investors looking for just 40-50bp of Bank of England (BoE) easing next year – clearly less than what is expected of the Fed or of the ECB. The UK data calendar is light this week, but we do have several BoE speakers. Governor Andrew Bailey already seems to be playing around with language on forward guidance, where restrictive monetary policy will be retained for an 'extended period'  or, most recently, 'for quite some time'. All in all, we feel that EUR/GBP could correct a little further and a close under 0.8660 could unlock 0.8630 or even 0.8600 this week.
GBP: Services Inflation Expected to Persist Above 6%, BoE's Dovish Stance Unlikely to Shift

GBP: Services Inflation Expected to Persist Above 6%, BoE's Dovish Stance Unlikely to Shift

ING Economics ING Economics 16.01.2024 12:22
GBP: Services inflation to stay above 6% The data flow picks up this week in the UK, with labour (Tuesday), CPI (Wednesday) and retail sales (Friday) statistics for the month of December being released. Services inflation is what matters the most for the Bank of England at the current stage and we expect to see it at 6.1% this week, considerably below the Bank of England's estimates. Despite the improvement in services disinflation, 6%+ remains too high and is unlikely to make the BoE endorse dovish rate expectations just yet. EUR/GBP can retest the 0.8573 lows, but we expect it to find a bit more support this week as the euro may benefit from some hawkish comments by Lagarde in Davos. Our medium-term view on the pair remains bullish.
Unraveling the Dollar Rally: Assessing the Factors Behind the Surprising Rebound and Market Dynamics

Unraveling the Dollar Rally: Assessing the Factors Behind the Surprising Rebound and Market Dynamics

ING Economics ING Economics 25.01.2024 15:02
FX Daily: Unwinding the spurious dollar rally The dollar strengthened across the board yesterday with no clear catalyst. We suspect that in an environment that keeps pricing large Fed cuts, USD rallies aren’t very sustainable. We’ll be awaiting the next leap higher in short-term USD rates to endorse a dollar rebound. Today, the focus is on PMIs and the Bank of Canada, which may disappoint dovish bets.   USD: Sticky Fed cut bets hinder USD rebound The dollar rebounded sharply yesterday as the risk-on mood generated by Beijing’s reported stock support package evaporated during London trading hours. The Hang Seng is having another good day today, even though Beijing’s measures appear an emergency and temporary solution, more a symptomatic treatment rather than addressing fundamental economic concerns. European and US equities failed to follow the Hang Seng's gains yesterday but also showed broad resilience. The rise in US rates did not look large enough to justify the rotation from European FX (EUR and GBP) back into the dollar. In all, we admit the dollar jump was quite surprising, and without a clear catalyst, and therefore see room for the dollar correction initiated overnight to extend today. One dynamic to keep an eye on – however – is the impact on markets of US Republican Primaries. The underperformance of the Mexican peso since the start of the week may be indicating markets are pricing in a larger chance of Donald Trump winning the presidency after Ron DeSantis endorsed him. Trump won the New Hampshire primary yesterday, securing 55% of votes and casting serious doubt on the future of Nikki Haley’s campaign. It all seems rather premature, but Banxico is also on the brink of a rate cutting cycle – as discussed here by our rates team – which can compound to keeping the peso soft. This should not translate into a one-way direction for the peso though, we still expect to see high demand in the dips, not least due to the preserved carry attractiveness and our view of a US dollar decline. Today, the focus will be on S&P Global PMIs across developed countries. Markets have become gradually more sensitive to this US survey, even though the ISM remains the main reference. Expectations are for a tiny decline in manufacturing PMIs (already in contraction area) and a stabilisation in services. We don’t have a strong bearish view on the dollar in the short-term, but yesterday’s moves did appear overdone in an environment where Fed funds futures still price in 130/140bp of cuts this year. We’ll be more convinced of the sustainability of a near-term dollar rebound once short-term Treasury yields take another leap higher (two-year rates are down nearly 10bp since yesterday). Revamped rate hike bets in Japan are pushing USD/JPY lower this morning, favouring a broader dollar correction which could have legs today. Francesco

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