Archive for Financial News

Ichimoku Cloud Analysis 27.09.2021 (EURUSD, AUDUSD, NZDUSD)

Article By RoboForex.com

EURUSD, “Euro vs US Dollar”

EURUSD is trading at 1.1718; the instrument is moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test the cloud’s downside border at 1.1730 and then resume moving downwards to reach 1.1595. Another signal in favor of a further downtrend will be a rebound from the descending channel’s upside border. However, the bearish scenario may no longer be valid if the price breaks the cloud’s upside border and fixes above 1.1805. In this case, the pair may continue growing towards 1.1905. To confirm further decline, the asset must break the downside border of the Triangle pattern and fix below 1.1680.

EURUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

AUDUSD, “Australian Dollar vs US Dollar”

AUDUSD is trading at 0.7280; the instrument is moving inside Ichimoku Cloud, thus indicating a sideways tendency. The markets could indicate that the price may test the cloud’s upside border at 0.7290 and then resume moving downwards to reach 0.7115. Another signal in favor of a further downtrend will be a rebound from the descending channel’s upside border. However, the bearish scenario may no longer be valid if the price breaks the cloud’s upside border and fixes above 0.7350. In this case, the pair may continue growing towards 0.7445.

AUDUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

NZDUSD, “New Zealand Dollar vs US Dollar”

NZDUSD is trading at 0.7016; the instrument is moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test the cloud’s downside border at 0.7040 and then resume moving downwards to reach 0.6905. Another signal in favor of a further downtrend will be a rebound from the descending channel’s upside border. However, the bearish scenario may no longer be valid if the price breaks the cloud’s upside border and fixes above 0.7095. In this case, the pair may continue growing towards 0.7185.

NZDUSD

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

German Consumer Confidence & Election Results

By Orbex

As anticipated, the German federal election results came in with a narrow plurality for the center-left SDP party.

This is the closest result in history, suggesting that it will be the most difficult coalition negotiation as well. Some estimate the government negotiations to last until even Christmas. This means that Merkel could remain Chancellor for several more months.

Markets, then again, might not be so happy with the uncertainty.

The narrow results have allowed for a wide range of interpretations. Some media headlines announced that Germans demanded change, while others proclaimed Germans voted for continuity.

Thankfully, the major concern for the markets has been averted. In fact, they avoided a hard-left coalition of SPD, Linke, and Greens, who would have taken the government reins, and pushed up taxes and increased regulations.

Where to now?

Although Schultz’s SPD gained the most votes, the left-leaning parties failed to obtain an overall majority.

This means the center-right, and Merkel’s successor, Laschet of the CDU will try to form a “Jamaica” coalition, of CDU, plus liberal FDP and the Greens. That had been attempted before, but talks broke down as the pro-business FDP and pro-environment Greens could not agree on a platform.

Last time, the “escape valve” was to return to an CDU-SPD “grand coalition”. However, that option is not on the table anymore, since the sum of votes from both parties does not equal a majority either. This allows for alternatives of a “grand coalition” with the FDP or the Greens.

Nonetheless, given the political costs that the “grand coalition” implies for both parties, this could generally be a very distant, and last resort alternative.

Out of the two options, however, an CDU-SPD-FDP alliance is the less impossible one. The FDP has been in government before and has a more pragmatic approach than the other “minor” parties.

What about the people?

The uncertainty in the government provides uncertainty in the market. This is particularly in terms of where regulatory pressures and tax increases will lie. That said, it might leave many businesses on hold in terms of investing, providing a slight drag on the economy for the next couple of months.

On the other hand, consumers generally won’t really change their habits because of the election. That doesn’t mean it’s good news though, as Germany heads into autumn and worries about covid still persist.

Tomorrow we have the release of GfK Consumer Confidence, which analysts expect to move further negative to -1.8 from -1.2 in August. Unfortunately, this measure of consumer sentiment never recovered from the pandemic.

Regulatory reaction

Later in the day, analysts anticipate ECB’s Lagarde to give a speech in the bank’s Central Banking Forum. In fact, they will be going over her remarks with a fine-tooth comb looking for hints about future rate policy.

However, with the largest economy in Europe in somewhat of a regulatory limbo until they decide on the coalition, the ECB is likely to have ample room to keep monetary policy easing in place.

In turn, this might make the regulators’ job easier because there is less inflation. The problem is that less inflation is because of lower growth.


Orbex-LogoArticle by Orbex

Orbex is a fully licensed broker that was established in 2011. Founded with a mission to serve its traders responsibly and provides traders with access to the world’s largest and most liquid financial markets. www.orbex.com

Forex Technical Analysis & Forecast 27.09.2021

Article By RoboForex.com

EURUSD, “Euro vs US Dollar”

EURUSD continues trading downwards; it has already completed the descending structure at 1.1700 along with the correction towards 1.1724. Possibly, today the pair may fall to reach 1.1698 and then start a new correction towards 1.1707. Later, the market may resume falling with the target at 1.1666.

EURUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

GBPUSD, “Great Britain Pound vs US Dollar”

GBPUSD is still falling; it has already finished the descending structure at 1.3660 along with the correction towards 1.3696. Today, the pair may fall to reach 1.3639 and then start another correction to return to 1.3696. After that, the instrument may form a new descending structure with the target at 1.3580.

GBPUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDRUB, “US Dollar vs Russian Ruble”

USDRUB has completed the correction at 73.00. Possibly, the pair may start a new decline to break 72.60 and then continue trading downwards with the target at 72.30.

USDRUB
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDJPY, “US Dollar vs Japanese Yen”

After finishing one more ascending structure at 110.78, USDJPY is expected to correct and reach 110.15. After that, the instrument may start another growth towards 110.40 and then resume falling with the target at 109.85.

USDJPY
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDCHF, “US Dollar vs Swiss Franc”

USDCHF is growing towards 0.9279. Later, the market may start a new correction to reach 0.9244 and then and resume trading within the uptrend with the target at 0.9330.

USDCHF
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

AUDUSD, “Australian Dollar vs US Dollar”

AUDUSD has completed the descending structure at 0.7235 along with the correction towards 0.7288. Possibly, today the pair may resume trading within the downtrend with the target at 0.7220.

AUDUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

BRENT

After completing the ascending wave at 79.02, Brent is consolidating there. Possibly, the asset may break the range to the downside and start a new correction towards 77.30. Later, the market may form one more ascending structure with the target at 81.25.

BRENT
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

XAUUSD, “Gold vs US Dollar”

Gold is still consolidating around 1750.00. Today, the metal may expand the range up to 1761.47 and then form a new descending structure to return to 1750.00. After that, the instrument resume trading upwards with the target at 1764.90 and then start another decline to reach 1726.40.

GOLD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

S&P 500

The S&P index has extended the correction towards 4486.0. Possibly, today the asset may start another decline to reach 4392.0 and then resume growing with the target at 4437.0.

S&P 500

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

The Analytical Overview of the Main Currency Pairs on 2021.09.27

by JustForex

The EUR/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.1738
  • Prev Close: 1.1720
  • % chg. over the last day: -0.15%

According to the IFO Munich Economic Institute, which estimated business sentiment in Germany, the German industry is in recession. It is noted that many companies that took part in the IFO survey stated that not only their current business situation but also their perspectives are worsening. Meanwhile, companies that operate in the tourism and hotel business, as well as in the construction business, noted the improvement of the situation.

Trading recommendations
  • Support levels: 1.1704, 1.1620
  • Resistance levels: 1.1772, 1.1802, 1.1835, 1.1894, 1.1934, 1.1969

From the technical point of view, the general trend of the EUR/USD currency pair is bullish. The price is trading near the priority change level. The MACD indicator shows a divergence. Under such market conditions, buy deals can be considered from the priority change level. It is best to look for sell trades from the resistance levels near the moving average or after the breakdown of priority change level.

Alternative scenario: if the price breaks down through the 1.1704 support level and fixes below, the mid-term uptrend will likely be broken.

EUR/USD
News feed for 2021.09.27:
  • – Eurozone ECB President Lagarde’s Speech at 14:45 (GMT+3);
  • – US FOMC Member Evans’s Speech at 15:00 (GMT+3);
  • – US Core Durable Goods Orders (m/m) at 15:30 (GMT+3);
  • – US FOMC Member Williams’s Speech at 19:00 (GMT+3);
  • – US FOMC Member Brainard’s Speech at 19:15 (GMT+3).

The GBP/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.3718
  • Prev Close: 1.3666
  • % chg. over the last day: -0.38%

One-third of BP’s gas stations are out of fuel. Car queues near gas stations have been observed for the third consecutive day. The shortage of drivers is causing problems transporting fuel from refineries to gas stations. Some operators were forced to limit deliveries and others even closed gas stations.

Trading recommendations
  • Support levels: 1.3629, 1.3614, 1.3525
  • Resistance levels: 1.3685, 1.3769, 1.3812, 1.3886, 1.3935, 1.4002

On the hourly time frame, the GBP/USD trend is bearish. The MACD indicator has become inactive. Under such market conditions, it is better to look for sell trades from the resistance levels near the moving average line. Buy deals should be considered only intraday and only with short targets from the support levels.

Alternative scenario: if the price breaks out through the 1.3812 resistance level and consolidates above, the bullish scenario will likely resume.

GBP/USD
News feed for 2021.09.27:
  • – UK BoE Gov Andrew Bailey’s Speech at 21:00 (GMT+3).

The USD/JPY currency pair

Technical indicators of the currency pair:
  • Prev Open: 110.25
  • Prev Close: 110.74
  • % chg. over the last day: +0.44%

Last week, the Japanese government announced that more than half of the population is fully vaccinated against COVID-19, with vaccination rates finally catching up with the US, UK, and other major countries. As for supply chain disruptions, new measures are needed to solve the problem of the lack of key products such as semiconductors and auto parts. And while the prime ministerial candidates plan to compile a package of measures to stimulate the economy, the Japanese yen is losing its positions against the dollar index.

Trading recommendations
  • Support levels: 110.40, 109.95, 109.63, 109.27
  • Resistance levels: 110.65, 110.95, 111.49

The main trend of the USD/JPY currency pair has changed to bullish. Against the background of the Japanese Yen weakness, the USD/JPY quotes sharply rushed up. The MACD indicator has become positive. There are signs of overbuying but no signs of reversal. Under such market conditions, it’s better to look for buy positions from the support levels after a small pullback, as the price has deviated strongly from the moving average. Sell positions should be considered only throughout the day from the resistance levels but only after the sellers’ initiative.

Alternative scenario: if the price falls below 109.63, the uptrend is likely to be broken.

USD/JPY
There is no news feed for today.

The USD/CAD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.2654
  • Prev Close: 1.2646
  • % chg. over the last day: -0.06%

The Canadian dollar is a commodity currency, so the USD/CAD currency pair is highly dependent on the dynamics of the dollar index and oil prices. The dollar index traded in a range on Friday, while oil prices continued to rise. As a result, the USD/CAD quotes are declining against the background of the strengthening Canadian dollar.

Trading recommendations
  • Support levels: 1.2583, 1.2518, 1.2425
  • Resistance levels: 1.2646, 1.2726, 1.2812, 1.2891, 1.2951

From the technical point of view, the trend has changed to bearish. The price fell below the moving average and broke through down the priority change level. The MACD indicator is negative, but there are signs of a reversal in the form of divergence. That means that a breakout of the priority change level might be false. Under such market conditions, it is better to buy only after the price returns above the level of priority change level, with a bullish initiative. It is best to look for sell trades from resistance levels near the moving average.

Alternative scenario: if the price breaks out through the 1.2646 support level and fixes above again, the uptrend will likely resume.

USD/CAD
There is no news feed for today.

by JustForex

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

BABA Will Primary Wave Ⓒ Be Bullish?

By Orbex

The current BABA structure suggests the construction of a large zigzag Ⓐ-Ⓑ-Ⓒ.

Apparently, the construction of the middle part of this zigzag, correction Ⓑ has come to an end. It consists of three main sub-waves (A)-(B)-(C) of the intermediate degree. The final part of the intermediate impulse wave (C) took the form of an ending diagonal.

Most likely, we are currently at the beginning of the development of a bullish wave Ⓒ, which can take the form of a simple impulse. Its growth may end above the level of 274.86, which was marked by the correction wave (B).

BABA

However, the development of the primary correction wave Ⓑ could continue. It may take the form of an intermediate triple zigzag (W)-(X)-(Y)-(X)-(Z).

The actionary wave (W) is a minor double zigzag, and the second actionary wave (Y) is a triple zigzag.

If our assumption is correct, then in the coming week, the price could continue declining in the actionary intermediate wave (Z) to the level of 118.48, at which, primary correction Ⓑ will be at 76.4% of wave Ⓐ.

And only after the full completion of this correction the price could rise to 274.37.


Orbex-LogoArticle by Orbex

Orbex is a fully licensed broker that was established in 2011. Founded with a mission to serve its traders responsibly and provides traders with access to the world’s largest and most liquid financial markets. www.orbex.com

The US stock market sees the biggest outflow of capital

by JustForex

The US stock market closed in the green zone on Friday. The Dow Jones Industrial Average increased by 0.10% (+0.98% for the week), the S&P 500 added 0.15% (+1.19% for the week) and the Nasdaq Technology Index added 0.11% (+1.96% for the week). Despite all of the major indices rising by the end of the week, US stocks experienced their biggest weekly outflow in more than three years, with traders withdrawing $28.6 billion from US equity funds during the week. With the QE program cuts set to begin in a little over a month, there is no reason to expect further significant growth in the indices.

US House Speaker Nancy Pelosi urged her Democratic colleagues to pass the Biden administration’s $3.5 trillion spending package. The House of Representatives is scheduled to vote on the infrastructure package this Thursday. US President Joe Biden indicated in his speech that the administration was going to make historic tax cuts for the middle class and increase taxes on large corporations and wealthy citizens.

Stock markets in Western Europe ended Friday trading with a decline. British FTSE 100 index decreased by 0.4% (+1.26% for the week), German DAX decreased by 0.7% (+1.78% for the week), French CAC 40 lost 1% (+2.92% for the week), Spanish IBEX 35 decreased by 0.4% (+2.71% for the week). Stocks of sports goods producers fell on Friday. Adidas AG dropped 2.5%, Puma SE dropped 3% and JD Sports decreased by 2.4%. The UK consumer confidence index fell five points in September compared to the previous month. The UK is facing several crises at once: an international gas price hike that is forcing energy companies out of business, which threatens to undermine meat production; a truck driver shortage that brings chaos on the retail trade and leaving not only empty store shelves but also empty gasoline stations. In Germany, the Chancellor held elections, which will succeed Angela Merkel, who served as the head of the German office for 16 years. The first data of exit polls were published in Germany. The German Social Democrats led by Olaf Scholz are leading the Bundestag elections with 26%.

Energy shortages around the world continue. Natural gas prices in Europe are at record highs. The gas crisis in Europe is already bigger than the oil shock of the 1970s in the United States. Oil prices increased for the fifth straight day on Monday, with Brent crude hitting $80 amid concerns about tight supply as some parts of the world see demand rise with pandemic conditions easing. Goldman Sachs raised its year-end forecast for Brent crude oil from $80 to $90 per barrel.

The 10-year Treasury yield jumped from 1.30% to 1.45% last week after the Fed signaled a reduction in its QE program. Rising yields and a rising dollar index are always negative for gold and silver prices, as these instruments are inversely correlated.

Coal prices in China also reached an all-time high. The National Energy Administration of China (NEA) has ordered coal and gas companies to increase production to ensure the country has enough energy to keep homes warm in winter. Car sales in China could rise in 2021, breaking a three-year slump. Vietnam plans to ease coronavirus measures and allow businesses to resume production from next week to support an economy hit by prolonged lockdowns.

Adding to the semiconductor shortages plaguing many industries appears to be a shortage of passive components such as capacitors. Chemi-Con, Nichicon, and Rubycon plants in Malaysia and Indonesia, where most of the well-known aluminum electrolytic capacitors are made, were closed in July and August. Meanwhile, the three listed companies together control about 50% of the market for these products. The current restrictions are expected to reduce capacitor shipments by 30-60%.

Evergrande’s foreign investors have not received an interest payment. Evergrande Payment was to be made on Thursday. The missed payment opens Evergrande’s grace period, which could lead to the largest default. It would also raise questions about the financial solvency of investors and could lead them to start selling their other assets to cover the losses.

Main market quotes:

S&P 500 (F) 4,455.48 +6.50 (+0.15%)

Dow Jones 34,798.00 +33.18 (+0.095%)

DAX 15,531.75 −112.22 (−0.72%)

FTSE 100 7,051.48 −26.87 (−0.38%)

USD Index 93.28 −0.19 (−0.20%)

Important events for today:
  • – Eurozone ECB President Lagarde’s Speech at 14:45 (GMT+3);
  • – US FOMC Member Evans’s Speech at 15:00 (GMT+3);
  • – US Core Durable Goods Orders (m/m) at 15:30 (GMT+3);
  • – US FOMC Member Williams’s Speech at 19:00 (GMT+3);
  • – US FOMC Member Brainard’s Speech at 19:15 (GMT+3);
  • – UK BoE Gov Andrew Bailey’s Speech at 21:00 (GMT+3).

by JustForex

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

The economic slowdown affects the indices in September

By Admiral Markets

Technical Analysis 27 September

Many of us will have heard the famous phrase “sell in May and go away” in relation to the financial markets. This phrase refers to the theory that, during the period between the months of November and April, the growth in the stock market is higher than the average growth of the months between May and November. Therefore, the phrase recommends closing our positions and waiting for the summer period to pass before resuming our activity.

So far, in 2021, this premise is not being entirely fulfilled. Whilst it is true that the upward trend seems to have slowed down, if we look at the main stock market indices from June onwards, we can see that – with the exception of the IBEX35, generally speaking – the trend has remained positive, thus continuing the trend from the first half of the year.

European indices: 

  • IBEX35 has lost 2.37% since May.
  • DAX40 is up 1.58% since May.
  • CAC40 is up 3.57% since May.
  • FTSE100 is up 0.67% since May.

US indices: 

  • DJI30 is up 0.78% since May
  • SP500 is up 5.98% since May
  • Nasdaq up is 9.4% since May

As we have noted in recent analyses, during the last few weeks we have observed a deterioration in the global economy. As a consequence of this, September has been generally negative, erasing part of the gains obtained up to August – with declines in September of 1.04%, 1.39% and 1.49% in the DAX40, NQ100 and SP500 respectively.

To this slowdown in macro data, we must add the uncertainty regarding the impact of the start of tapering in the United States and the formation of the new government in Germany following yesterday’s elections, in which the replacement for Chancellor Angela Merkel was to be decided after she announced her departure several months ago, having led the country for the last 16 years.

These elections have resulted in uncertainty with regard to the new government, as Olaf Sholz’s social democratic party (SPD) has not achieved a clear majority. Therefore, an intense period of negotiations is now underway to achieve power.

After the last meeting of the Federal Reserve, it seems that tapering will begin in November and could end in mid-2022, so we will have to be very attentive to how the market digests this situation, as a hasty withdrawal of stimulus could cause corrections in the main stock market indices.

DAX40 Analysis

If we focus on the German DAX40, we can see that, over the last few months, it has maintained a clear upward trend that led it to set new all-time highs in mid-August. These highs came after the price overcame the sideways movement it had been following since last June after successive support on its uptrend line. Although, after finally setting its current all-time highs (green band), the price began a consolidation that led it to break its important long-term uptrend line.

This break led the price to look for its important support zone in the area where its 200-session moving average in red meets the lower red band near 15,000 points. Here, the price found a point of support to make a new impulse, which has led it to once again overcome its important support/resistance level (represented by the orange band) on which it has been pivoting for several months.

This support/resistance level is crucial for the DAX40, because, if it is able to hold this level, we could witness a new impulse in search of its historical highs. In contrast, if the price loses this level, it should face again its main support and the subsequent loss of this level would open the doors to a change of trend and an even bigger correction.

DAX40 Daily ChartDepicted: Admirals MetaTrader 5 – DAX40 Daily Chart. Date Range: 12 August 2020 – 27 September 2021. Date Captured: 27 September 2021. Past performance is not a reliable indicator of future results.

Evolution of the last five years:

  • 2020: 3.6%
  • 2019: 25.48%
  • 2018: -18.26%
  • 2017: 12.51%
  • 2016: 6.87%

SP500 Analysis

If we focus on the daily chart of the SP500, we can see that – after the declines of this month, due to the slowdown in the economy caused by the energy crisis and the delta variant of the coronavirus – the price has lost the important bullish channel which it had been following after forming a double bottom between September and October last year represented by the red band.

This break of the lower band of the channel is important because, if the price fails to recover these levels and the pullback is confirmed, the SP500 could suffer a major correction, the main target of which would be the width of this important channel around the orange band which acts as the main support/resistance level.

The loss of this level would jeopardise the current bullish structure and open the door to a possible change of trend from bullish to bearish. Although to confirm this change in trend, the price would first have to face its important 200-session moving average in red.

SP500 Daily ChartDepicted: Admirals MetaTrader 5 – SP500 Daily Chart. Date Range: 17 August 2020 – 27 September 2021. Date Captured: 27 September 2021. Past performance is not a reliable indicator of future results.

Evolution of the last five years:

  • 2020: 15.05%
  • 2019: 29.09%
  • 2018: -5.96%
  • 2017: 19.08%
  • 2016: 8.80%

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INFORMATION ABOUT ANALYTICAL MATERIALS: 

The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admirals investment firms operating under the Admirals trademark (hereinafter “Admirals”) Before making any investment decisions please pay close attention to the following: 

  1. This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
  2. Any investment decision is made by each client alone whereas Admirals shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
  3. With view to protecting the interests of our clients and the objectivity of the Analysis, Admirals has established relevant internal procedures for prevention and management of conflicts of interest.
  4. The Analysis is prepared by an independent analyst Roberto Rojas, Freelance Contributor (hereinafter “Author”) based on personal estimations.
  5. Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admirals does not guarantee the accuracy or completeness of any information contained within the Analysis.
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Roberto Rojas
Roberto Rojas Financial Analyst, Admirals SpainRoberto is a Financial Analyst with a European Financial Advisor certificate and a Double Degree in Business Administration and in Actuarial and Financial Sciences. In 2013 was graduated as an Expert Manager in Equities

By Admiral Markets

The world’s reserve currency continued its consolidation

By Admiral Markets

Last week the US dollar was in a consolidative mood and did not show a consistent direction, although the stock markets started the week with a rather material correction and then the US central bank finally signalled a tapering of its stimulus programme in the coming months.

USD

Data in the world’s largest economy remained good and pointed to a high level of activity among people and businesses. Preliminary data on the purchasing managers’ indices pointed to a moderate slowdown in the pace of growth, with manufacturing at 60.5 points and services at 54.4, both remaining in positive territory, although the results were weaker than in the previous month. In the secondary real estate market, annual existing home sales stood at 5.88 million in August and were stable in the perspective of the last six months, while sales of new homes reached 740 thousand per year and rose gradually for the second month in a row. The number of new jobless claims continued to rise marginally from 0.332 to 0.351 million on a weekly basis.

Also last week, the minutes of the US central bank’s last meeting were released, with the main message being that the bank’s members are prepared to reduce the size of the stimulus programme and buy smaller amounts of bonds on the market. The market’s expectation is that the next meeting will already announce amounts and dates for when and how this process will start. The forecasts for 2022 were also updated, with 3.8% annual economic growth and 2.2% inflation expected.

The spread of the virus continued to show a slowing trend, with the global average of new cases dropping from 533 to 482 thousand per day. North America recorded a decline of around -15% in cases per week, while Europe saw a slight increase of a few percent. In the US alone, the figures moved in a positive direction, with the weekly average dropping from 148 to 122 thousand cases per day. The number of vaccines administered increased from 383 million to 389 million, with a change of 6 million, as the third dose of the vaccine intensified. Overall in the US, the number of people vaccinated with at least one dose rose from 63.5% to 64.1% of the population, with a weekly increase of 0.6%. In Lithuania, the number of people vaccinated with at least one dose rose from 61.5% to 62.0%, a difference of 0.5%. In England, the number of cases remains stable at 33,000 per day.

Euro

The major currency pair EUR/USD depreciated to the level of 1.169 at the beginning of the week, but recovered its losses and ended the trading session marginally changed. Economic data on the Old Continent included the German producer price index, which rose by 12% in August compared to the same period a year earlier, the fastest rise since 1974, suggesting that upward pressure on prices still remains in the economy. Preliminary purchasing managers’ indices were also released: European manufacturing fell to 58.7 and services slipped to 56.3 points, suggesting slower growth expectations in the coming months. The EUR/USD pair ended the week down -0.1%.

JPY

The most important Asian pair USD/JPY moved in the trading channel formed at the beginning of July. After starting the week with a correction to the bottom at 109.2, it started to appreciate significantly on Wednesday and ended the week at 110.7 points. Among the data was the August annual inflation rate, which remained negative at -0.4%. Preliminary purchasing managers’ indices showed mixed results, with industrial falling to 51.7 points and services rising to 47.4. USD/JPY ended the week trading up 0.7%.

GBP

The British pound/US dollar pair reflected the general sentiment on the currency markets and depreciated at the beginning of the week before appreciating in the second half. Data included preliminary purchasing managers’ indices: industrial at 56.3 and services at 54.6 points. The central bankers unanimously decided to keep the monetary policy and the amount of stimulus unchanged. GBP/USD ended the week down -0.5%.

Economic Events

This week will start quietly and on Monday only the US industrial orders will be monitored. On Tuesday, the US consumer confidence index will be due, and on Wednesday the German retail sales and the US pending home sales will be released. On Thursday, Japanese industrial production data and German labour market results will be monitored, while on Friday European preliminary inflation and actual purchasing managers’ indices will be seen.

According to Admiral Markets market sentiment data, 70% of investors have long positions in EUR/USD (down -15 percentage points compared to last week). In the main Asian pair USD/JPY, 9% of investors have long positions (down -15 percentage points). In the GBP/USD pair, 68% of participants expect a rise (down -15 percentage points). Such market data is interpreted as a contrarian indicator, and therefore EUR/USD and GBP/USD are expected to fall, while USD/JPY is expected to appreciate. The analysis of positioning data should be combined with fundamental projections and technical analysis.

Source: bloomberg.com, reuters.com, Admiral Markets MT4 Supreme Edition, investing.com 

 

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By Admiral Markets

Can You Survive a Protracted Bear Market?

There are rumblings within the investment community that the markets may be set to decline in the near future and this has newer investors a bit concerned. Everyone has heard horror stories of losing everything when the markets suddenly take a downturn and unless you’ve ever experienced a true market crash, you may be in for the ride of your life. This is not to say that the markets will crash or that we are about to enter a bear market phase. The question is, can you survive a prolonged bear market if you had to live through one? It pays to know what to expect and how to handle your finances and investments if the worst should come to pass.

What Exactly Is a Bear Market?

It is common knowledge that a bull market is when stocks are soaring and gaining on a continual upward curve but bear markets are a little more challenging to understand. A brief definition would be that during a bear market, asset prices decline by at least 20% from recently trending highs. While no one is eager to have a portfolio of investments during a bear market, there are a few strategies that can help you survive, and maybe even profit a bit if used wisely.

Recognize Fear for What It Is

If there is one thing you should avoid at all costs it would be trading on fear alone! Never buy or sell just because stocks suddenly take a turn toward a bear market as history has shown us that there will be occasional dips where today’s bear market could suddenly soar to a bull market next week. Fear is an emotion and as you have always been advised, never buy or sell based on emotion.

Making money in the market requires calm, well thought out investment strategies and that is impossible to do if you are letting fear rule your investment strategies. In fact, it might be to your advantage to roll over and play dead at this time. Isn’t that exactly what a bear might do if suddenly confronted with danger? Many instinctively know that to charge a hunter with a loaded .375 Ruger means certain death so they choose the better option. They roll over and play dead until it is safe enough to run toward safety.

Beware of Overinvesting

When those asset prices begin to tumble you may be tempted to buy as much as you can as quickly as you can. This can be a grave error in judgment. It could be that some of those stocks would have been on the downturn even in a bull market and you could lose your proverbial shirt in the process. Having said that, on the other hand, careful market analysis should give you a fairly accurate idea of those stocks, which will very likely begin gaining value again in the short term.

Also, when you take every available dollar to buy up stocks when prices are low you are likely to take from funds otherwise needed. Many new investors beg a little here, borrow a little there and before they know it, they are late on mortgage, automobile, and credit card payments.

If you have fallen into this trap, it is good to know that there are ways to avoid penalties. For example, this guide will give you step-by-step details on how to get a late fee waived if you’ve missed a credit card payment. While it isn’t advisable to miss even a single payment, an app like Tally can help you pay down your credit card debt and grow your credit score. This is also important for a serious, albeit new, investor. The app could help you save a lot of money in fees and interest, money that could be put to better use.

Better Safe Than Sorry

One bit of advice you aren’t likely to hear often is that when it comes to making money in the market, it is better to be safe than sorry. No, this doesn’t mean you shouldn’t buy stocks you are interested in as they appear to be rising substantially, but rather to temper that with the purchase of defensive stocks that do well in literally any market. The key is knowing when to buy them. Many seasoned investors always keep a portfolio of defensive stocks purchased before a downturn so that they have stable earnings during a bear market.

Unfortunately, the term ‘defensive stocks’ is often confused with the term ‘defense stocks’, which are totally different entities. A defensive stock is one that will offer steady earnings and consistent dividends because those products are needed in any market at all times. Examples of defensive stocks might be such things as personal hygiene products, utilities, pharmaceuticals, and literally anything that is needed in good times or bad. No matter which way the market trends, these underlying assets will still be in demand. A defense stock, on the other hand, is just that. They are stocks you can buy in companies that manufacture weapons and ammunition, for example.

Key Takeaways for Survival in a Bear Market

By now, you get the point. Just because there is a rather sudden drop in asset prices of 20% or more, it doesn’t mean that you are about to enter a protracted bear market. Short dips can be managed if they are just that, short in duration. The key is to watch the markets consistently, read forecasts released by successful investors or brokers, and take enough time to analyze the current trend. It doesn’t pay to make rash trades out of fear but rather to approach investing from a position of strength.

Also, just because prices drop lower than you’ve ever seen them doesn’t mean you should sink your entire life savings or household expense money into buying up as many as you can. Here again, those stocks may have been perched on the ledge waiting to fall anyway. It is always wiser to be safe than sorry and if it means rolling over and playing dead until you see which way the wind is blowing, so be it. Just because it looks like a bear market doesn’t mean it will be a protracted one. You can survive a bear market if you are well prepared, and that is your key takeaway for today.

By Taylor Wilman

 

Intraday Market Analysis – DAX 40 Struggles To Rally

By Orbex

GER 40 hits tough resistance

DE40

European markets struggle as embattled property giant Evergrande faces more coupon payments this week.

The Dax 40’s tentative break below the major support at 15050 weighs on traders’ risk appetite. Unless the bulls can push back and absorb offers at 15780, the index could be vulnerable to a deeper correction.

An overbought RSI has caused a stall in the recovery. A bearish MA cross may attract selling interest. 15400 is an important gatekeeper and a breach could trigger a sharp sell-off to 14900.

NZDUSD retraces to major support

NZDUSD

The US dollar continues to creep up after the Fed’s hawkish tilt. The RSI’s overbought situation suggests that the kiwi’s initial breakout has over-stretched itself.

Buying interest could lie between 0.6980 and the psychological level of 0.7000. The bulls will need to clear the origin of the September sell-off (0.7110), and then they could seal the continuation of the rally towards 0.7210.

However, if this turns out to be a false rebound, a bearish breakout would dent the hope of recovery and send the pair to 0.6880.

XAGUSD tests critical support

XAGUSD

The rising Treasury yields and US dollar weigh on precious metals. Some bargain hunters were eager to buy silver at the psychological level of 22.00, which is also critical support from the daily timeframe.

However, the rebound has seen strong selling interest at 23.10. Should buyers gather enough momentum to break free, 23.80 would be the next target.

On the downside, a bearish breakout would shake the last buyers out and conclude an eleven-month-long consolidation with a bearish reversal.


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Orbex is a fully licensed broker that was established in 2011. Founded with a mission to serve its traders responsibly and provides traders with access to the world’s largest and most liquid financial markets. www.orbex.com