At the support level, gold has formed a Hammer reversal pattern. The instrument is now going by the signal in an ascending wave. The goal of the growth might be 1866.00. Upon testing the resistance level, the pair may break through it and continue the uptrend. However, the quotes may drop to 1830.50 before growth.
NZDUSD, “New Zealand Dollar vs US Dollar”
On H4, at the support level, the pair has formed a Hammer reversal pattern. The instrument is now going by the signal in an ascending wave. The goal of the growth might be 0.6285. After this level is reached, the quotes might get a chance for continuing the uptrend. However, the price may pull back to 0.6200 before growing.
GBPUSD, “Great Britain Pound vs US Dollar”
On H4, at the support level, the pair has formed a Hammer reversal pattern. The instrument is now going by the signal in an ascending wave. The goal of the growth might be the resistance level of 1.2125. However, the price may pull back to 1.1980 and continue the uptrend after the correction.
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 market major starts this new week of February with an attempted correction. EUR/USD is balancing near 1.0690. After the lows of the previous week, this is good news though right now the bounce does not look really confident.
Investors are beginning to have more and more doubts that the Federal Reserve System will put aside its tightening monetary policy and include the expectations of further interest rate increases in the quotes. While previously traders used to expect a pause after two subsequent increases by 25 base points this year, now there are no such guarantees.
It is a day off in the US today, which means volatility will be smoothed out.
On the EUR/USD H4 chart, a consolidation range formed around 1.0720. The market extended it downwards to 1.0612. A link of correction to 1.0720 is not excluded (a test from below). Then a decline to 1.0577 should follow, from where the wave might extend to 1.0500. Technically, the scenario is confirmed by the MACD, whose signal line is under zero. Wait for the lows to be renewed.
On H1, the currency pair has completed a wave of decline to 1.0612 and a correction to 1.0690. A consolidation range is expected to form around this level. With an escape downwards, a new wave of decline to 1.0577 should start. Technically, this scenario is confirmed by the Stochastic oscillator. Its signal line is above 50, and a decline to 20 is to follow.
Disclaimer
Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.
Since the release of PPI inflation data on Thursday, fears of the US Federal Reserve returning to a more aggressive pace of rate hikes have returned to financial markets, especially given the strong labor market and GDP growth. All of this was fueled by relevant comments from Fed officials. Cleveland Fed Chair Loretta Mester said Thursday that US interest rates would have to rise above 5% and stay there for a long time to keep inflation down significantly. St. Louis Fed President James Bullard, often considered the most hawkish official at the central bank, also said Thursday that he supports further rate hikes. Bullard added that he would support a 50 basis point increase at the next Fed meeting on March 22. As a result, the US stock market came under pressure late last week. At the close of the stock market on Friday, the Dow Jones index (US30) increased by 0.39% (-0.18% week-to-date), while the S&P 500 Index (US500) fell by 0.28% (-0.43% week-to-date). NASDAQ Technology Index (US100) lost 0.58% on Friday (+0.24% for the week).
The Fed will release the minutes of its January meeting on Wednesday. The minutes may give investors some indication of the appetite for a bigger hike at the Fed’s upcoming March meeting after recent comments from some policymakers indicating support for such a move.
The disappointing fourth-quarter reporting season is coming to an end. The results from the major retailers will provide insight into the strength of consumer spending amid a surge in prices, which is an important topic for investors. Walmart (WMT), the world’s largest retailer by sales, along with home improvement giant Home Depot (HD), are due to report Tuesday. The retailers’ extraordinarily high earnings could raise fears of a tougher Fed response.
Stock markets in Europe were mostly down on Friday. German DAX (DE30) decreased by 0.33% (+1.04% for the week), French CAC 40 (FR40) lost 0.25% (+2.80% for the week), Spanish IBEX 35 (ES35) added 0.06% (+2.17% for the week), British FTSE 100 (UK100) closed Friday down by 0.10% (+1.55% for the week).
The war in Ukraine will cost Germany’s economy about 160 billion euros ($171 billion), or about 4% of its gross domestic product, the German Chamber chief said. An Allianz Trade study says the German industry will pay about 40% more for energy in 2023 than it did in 2022, before the crisis caused by Russia’s February 24 invasion of Ukraine. Germany, which has relied on relatively cheap Russian pipeline gas for decades, now has particularly high energy prices compared to the United States, which has its own natural gas reserves, while France has abundant nuclear energy.
New concerns about inflation and rising rates have forced oil traders to close their long positions, especially after they became wary of an oversupply forming as a result of inventory accumulation. Analysts believe that the data on Chinese imports, which should support the oil rally, is likely to appear no earlier than two weeks.
Gold prices fell for the third week in a row after Fed officials expressed fears of further rate hikes. Gold and silver are inversely correlated to the dollar index and government bond yields. Rising rates tend to raise bond yields, so gold prices are always under pressure during a tightening cycle.
Asian markets were mostly down last week. Japan’s Nikkei 225 (JP225) decreased by 0.14% for the week, China’s FTSE China A50 (CHA50) fell by 1.56% for the week, Hong Kong’s Hang Seng (HK50) ended the week down by 0.91%, India’s NIFTY 50 (IND50) gained 0.62%, and Australia’s S&P/ASX 200 (AU200) ended the week 1.17% negative.
In China, personnel changes in government agencies and major financial regulators are approaching. The question of who will lead the People’s Bank of China is back in the spotlight. The new governor will have to lead the central bank in turbulent times, helping the economy get back on its feet after the disorderly reopening of the economy and dealing with the worst real estate slump in history to maintain financial stability. Another key task for the new leader will be to advocate the central bank’s views to the government since the PBoC is not an independent institution but is accountable to the State Council.
The Reserve Bank of New Zealand (RBNZ) will announce its interest rate decision on February 22. Some economists speculate that this will raise the cost of borrowing by 50 basis points to 4.75%.
In the commodities market, futures on cocoa (+6.6%), coffee (+6.47%), and copper (+2.75%) showed the biggest gains last week. Futures on natural gas (-9.98%), lumber (-8.58%), sugar (-8.11%), orange juice (-7.5%), cotton (-4.55%), WTI oil (-3.96%), gasoline (-3.9%), Brent oil (-3.75%) and platinum (-3.26%) showed the biggest drop.
S&P 500 (F) (US500) 4,079.09 −11.32 (−0.28%)
Dow Jones (US30)33,826.69 +129.84 (+0.39%)
DAX (DE40) 15,482.00 −51.64 (−0.33%)
FTSE 100 (UK100) 8,004.36 −8.17 (−0.10%)
USD Index 103.88 +0.03 (+0.02%)
Important events for today:
– China PBoC Prime Rate (m/m) at 03:15 (GMT+2).
– Eurozone Consumer Confidence (m/m) at 17:00 (GMT+2);
– New Zealand Producer Price Index (q/q) at 23:45 (GMT+2).
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.
Here’s when homes will likely sell for once-in-a-lifetime bargains
By Elliott Wave International
Just like the gold “in them thar hills” motivated people from all walks of life to become miners way back when, real estate booms have motivated people from far and wide to become agents.
In both cases, easy riches seemed to be there for the taking.
But easy riches can be hard to get sometimes, as this New York Times headline indicates:
As Housing Market Cools, Far Fewer Become Agents
You might think that was from the past few months. No, the date of the headline’s publication was Sept. 7, 2007.
This next one is recent — a New York Post headline from Jan. 31 of this year:
Real estate agents vanish en masse as market slows — even in once red-hot Miami
So, agents are closing shop again — just like 15 or 16 years ago — before the worst of the prior housing bust.
The question is: Will this latest weakness in the property market turn out to be as severe as the last time?
No one knows for sure, of course, but Elliott Wave International’s analysis strongly suggests that real estate agents, homeowners, would-be buyers and would-be sellers might want to prepare for a worst-case scenario.
As Robert Prechter noted in his book, Last Chance to Conquer the Crash:
At the bottom, buy the home, office building or business facility of your dreams for ten cents or less per dollar of its peak value.
Remember, financial changes can happen quickly and dramatically.
That was the case with the 2007-2009 financial crisis. And, as indicated, changes are already underway in real estate again. This chart and commentary from our February Elliott Wave Financial Forecast, a monthly publication which covers major U.S. financial markets, provide more insight:
The monthly chart of existing home prices shows that the June-to-November decline brought the first break of the 12-month moving average since the first quarter of 2020. This is not unusual; the chart shows a seasonal tendency for prices to decline in the second half of the year. What is highly unusual, however, is the seasonal decline’s refusal to break below the 12-month average in 2020 and 2021. The sharp decline in sales, the five wave rise from the 1960s in home prices and the ability for prices to stay above the 12-month average for two straight years suggest that the current move below the 12-month average is no ordinary decline.
The bottom line is that it’s best to prepare now for swift changes ahead — not only in housing, but in financial markets and the economy generally.
Begin your preparation by starting to read Last Chance to Conquer the Crash now — 100% free.
This article was syndicated by Elliott Wave International and was originally published under the headline How This Pattern from the Prior Housing Bust is Repeating. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
First Tellurium Corp. sees increased tellurium production in a bid to meet rising global demand in 2023.
First Tellurium Corp. (FTEL:CSE) is expecting global demand and prices of tellurium (Te) to increase this year, therefore also seeing bright prospects for its Te production from its Deer Horn property in British Columbia, Canada.
FTEL is a company engaging in the exploration and development of predominantly Te mines. The company has two high-grade mining jurisdictions, which are its Deer Horn property in British Columbia, Canada, and Klondike property in Colorado, U.S.
Why Tellurium? Looming Shortage Driving Demand and Price Increases
Te is essential for the generation of clean and sustainable energy. It is a raw material for manufacturing solar photovoltaic (PV) panels, new batteries, and other advancing technologies.
Te is incorporated in lithium-ion battery cathodes, and this improves the batteries’ energy density for longer-lasting charging; enhanced electrical conductivity for quicker charging time; and safety. For solar panels, Te provides better conductivity, making a thin film efficiently absorb sunlight and convert it into electricity.
Source: First Tellurium
FTEL President and CEO Tyrone Docherty said 90% of Te comes from refining copper, and only 10% comes from mines. The company said there is a looming shortage of Te as the demand is rapidly growing, but much of the supply is not mined on its own.
He said FTEL is well positioned to increase the share of mining in Te production and to meet the increasingly growing demand for Te, which mostly comes from the clean energy sector.
According to a report by Investing Whisperer, other than sourcing through copper processing, Te is a rare and brittle metalloid element found in small quantities in the Earth’s crust — about eight times rarer than gold itself. As the demand from solar panel manufacturers grows, Te production is seen to shoot up in the near future.
“It’s possible that the market for Te could be much larger in the near-to-mid term–due to the increased use of solar panels. Right now, it’s a very small market with just under 600,000 kg produced in 2021,” the report said.
China has 20% of the world’s Te resource and has produced most (61%) of the global Te output last year. Responding to the looming shortage fears and bright prospects in terms of demand, the U.S. wants to get a larger share of the pie — to see more domestic supply chains of Te which denotes an increase in delivery from U.S. suppliers like FTEL.
Chen Lin of What is Chen Buying? What is Chen Selling? recommended FTEL in a December posting. He mentioned that North America is too dependent on outside sources for the element and went on to say, “This metal can be in demand, this is a pure-play, and management just a lot of (its) own money in the stock.” Lin later reiterated his recommendation in a February newsletter. He said, “FTEL was very well received at both the Metals Investment Forum and Vancouver Resource Investment Conference. The management was surrounded by investors and talked for hours afterward. I think investors’ interests definitely picked up and there could be other newsletters recommending it.”
FTEL Answers Demand
FTEL answers the demand for critical metals such as Te, Au, Ag, Cu, and W, with a focus on Te. Major U.S.-based solar PV manufacturer First Solar has recognized their Deer Horn property as one of the four world-class Te projects, with the other three located in Sichuan, China; Sonora, Mexico; and Boliden Area, Sweden.
New Te supplies from the company will benefit as prices need to increase to meet Te demand. From a US$70 per kg price level a year ago, prices have already gone up to US$80 per kg as of January 2023. Its market price is expected to get a boost from First Solar as its annual Te demand could exceed last year’s Te global production by up to 70%.
The Deer Horn jurisdiction hosts the only Te, Au, and Ag resources in North America, and has also passed a positive PEA or Preliminary Economic Assessment, which is crucial for moving forward with any mining project.
Based on Investing Whisperer’s analysis, FTEL and its two mines with Te deposits close to the surface is the only Te play for investors.
The company adopts a phased expansion approach, where they start exploration and production with small mines, and then expand mining areas in the same territory over time.
The company benefits from this approach with lower exploration and development costs, lower capital spending, faster production and delivery of supplies, a faster-permitting process with small mine applications than larger mines, and many others.
FTEL’s exploration in 2022 extended their mineral zone potential in the Deer Horn property to an additional 1.1 km, expanding their total potential strike length to 3.5 km.
Based on Investing Whisperer’s analysis, FTEL and its two mines with Te deposits close to the surface is the only Te play for investors.
The report also factored in the prospect to expand these sites in the future, and that there are Au, Ag, Cu, and W deposits in the mines which can account for 50% of the company’s value.
The Catalyst: Drilling Set for the Summer
FTEL is set to start its drilling within its polymetallic Deer Horn site in the summer of 2023. This will yield new Te, Au, and Ag production for the company which will allow them to deliver supply this year.
The company will also greatly benefit from favorable market conditions such as the ongoing advances in battery technologies, and solar power demand, as well as the push for funding and focus on critical metals by the U.S. and Canadian governments.
EcoWatch mentioned that as the green energy technology sector grows, then so is the demand for Te and other critical metals which can have Te as a byproduct, given that 90% of global Te supply comes from refining copper mining. FTEL has two predominantly Te mines that can contribute to supporting the growth of green energy technologies.
Source: Clivemaund.com
On February 2, 2023, technical analyst Clive Maund touched on the outlook of the company, saying, “First Tellurium presents a positive picture and overall looks like a low-risk setup. We, therefore, stay long.”
According to the company, 11% of First Tellurium is owned by management and insiders. According to Reuters CEO, President, and Director Tyrone Docherty owns 10.50%m with 7.63 million shares. Director Josef Anthony Steve Fogarassy has 1.38%, with 1 million shares, and Director Lyle Allen Schwabe has 0.77%, with 0.56 million shares.
There are no institutional investors and the rest is retail.
FTEL has CA$1.5 million in the bank with a CA$35,000 to CA$40,000 monthly burn rate.
The company has a market cap of CA$23.37 million and 84.026 million outstanding shares. Their stock is trading between CA$0.085 and CA$0.710 based on its 52-week range.
Disclosures: 1) Nika Cataldo wrote this article for Streetwise Reports LLC as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with: First Tellurium Corp. Please click here for more information.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously publish First Tellurium Corp., a company mentioned in this article.
The 2023 outlook for this energy firm is positive, with production to come from the Williston basin and possibly the Paradox basin, too, noted an Auctus Advisors report.
Zephyr Energy Plc.’s (ZPHRF:OTCMKTS;ZPHR:LSE) full-year 2022 (FY22) production and income were in line with guidance and forecasts, reported Auctus Advisors analyst Stephane Foucaud in a Feb. 15 research note. The oil and gas company is about to start production testing a well in Utah’s Paradox basin.
Potential 228% Return
Auctus has a target price of £0.20 per share on England-based Zephyr. This implies a potential return for investors of 228%, given the energy firm’s current share price is £0.06, noted Foucaud.
“Success in [Cane Creek’s] C-9 reservoir around year-end 2023 could add a further £0.12 per share [to the target price], the analyst added. Cane Creek is in Utah’s Paradox basin.
Strong Production, Revenue
The analyst presented the operational and financial highlights of FY22, all pertaining to work in North Dakota’s Williston basin.
As for Q4/22, Zephyr sold an average of 1,192 barrels of oil equivalent per day (1,192 boe/d). The total average sales volume for FY22 was 1,490 boe/d, which was at the upper end of guidance and met Auctus’ expectations.
“This was achieved despite the fact that [a] number of Zephyr’s existing production wells were temporarily shut in during Q4/22 due to ‘frac-protect’ procedures while new nearby wells were stimulated and completed,” Foucaud explained.
In FY22, Zephyr generated an estimated US$42.9 million (US$42.9M), easily meeting the company’s guidance of US$40–45M. Full-year operating income was as Auctus expected, at US$35.7M.
Work Ahead in Paradox
Looking forward, Zephyr reiterated its guidance for net production in the Williston for 2023, which is 1,550–1,750 boe/d, noted Foucaud.
Also, Zephyr is about to begin production testing of and possibly complete the State 36-2 LNW-CC well in the fractured Cane Creek reservoir interval. The net contingent resource of the part of the reservoir on Zephyr property is 39,250,000 barrels of oil equivalent.
“This is a very important well for the company that could add production and reserves,” commented Foucaud.
Additionally, Auctus expects Cane Creek to generate significant cash flow starting in 2024. The amount will likely equal about 20–40% of Zephyr’s market cap next year and each year thereafter.
Disclosures: 1) Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.
Disclosures For Auctus Advisors, Zephyr Energy Plc., February 15, 2023
MiFID II Disclosures: This document, being paid for by a corporate issuer, is believed by Auctus to be an ‘acceptable minor non-monetary benefit’ as set out in Article 12 (3) of the Commission Delegated Act C(2016) 2031 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. It is produced solely in support of our corporate broking and corporate finance business. Auctus does not offer a secondary execution service in the UK. This note is a marketing communication and NOT independent research. As such, it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and this note is NOT subject to the prohibition on dealing ahead of the dissemination of investment research.
Author: The research analyst who prepared this research report was Stephane Foucaud, a partner of Auctus. Not an offer to buy or sell Under no circumstances is this note to be construed to be an offer to buy or sell or deal in any security and/or derivative instruments. It is not an initiation or an inducement to engage in investment activity under section 21 of the Financial Services and Markets Act 2000.
Note prepared in good faith and in reliance on publicly available information: Comments made in this note have been arrived at in good faith and are based, at least in part, on current public information that Auctus considers reliable, but which it does not represent to be accurate or complete, and it should not be relied on as such. The information, opinions, forecasts and estimates contained in this document are current as of the date of this document and are subject to change without prior notification. No representation or warranty either actual or implied is made as to the accuracy, precision, completeness or correctness of the statements, opinions and judgements contained in this document.
Auctus’ and related interests: The persons who produced this note may be partners, employees and/or associates of Auctus. Auctus and/or its employees and/or partners and associates may or may not hold shares, warrants, options, other derivative instruments or other financial interests in the Company and reserve the right to acquire, hold or dispose of such positions in the future and without prior notification to the Company or any other person. Information purposes only
This document is intended to be for background information purposes only and should be treated as such. This note is furnished on the basis and understanding that Auctus is under no responsibility or liability whatsoever in respect thereof, whether to the Company or any other person.
Investment Risk Warning: The value of any potential investment made in relation to companies mentioned in this document may rise or fall and sums realised may be less than those originally invested. Any reference to past performance should not be construed as being a guide to future performance. Investment in small companies, and especially upstream oil & gas companies, carries a high degree of risk and investment in the companies or commodities mentioned in this document may be affected by related currency variations. Changes in the pricing of related currencies and or commodities mentioned in this document may have an adverse effect on the value, price or income of the investment.
Disclaimer: This note has been forwarded to you solely for information purposes only and should not be considered as an offer or solicitation of an offer to sell, buy or subscribe to any securities or any derivative instrument or any other rights pertaining thereto (“financial instruments”). This note is intended for use by professional and business investors only. This note may not be reproduced without the prior written consent of Auctus.
The information and opinions expressed in this note have been compiled from sources believed to be reliable but, neither Auctus, nor any of its partners, officers, or employees accept liability from any loss arising from the use hereof or makes any representations as to its accuracy and completeness. Any opinions, forecasts or estimates herein constitute a judgement as at the date of this note. There can be no assurance that future results or events will be consistent with any such opinions, forecasts or estimates. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied is made regarding future performance. This information is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed and it may not contain all material information concerning the company and its subsidiaries. Auctus is not agreeing to nor is it required to update the opinions, forecasts or estimates contained herein.
The value of any securities or financial instruments mentioned in this note can fall as well as rise. Foreign currency denominated securities and financial instruments are subject to fluctuations in exchange rates that may have a positive or adverse effect on the value, price or income of such securities or financial instruments. Certain transactions, including those involving futures, options and other derivative instruments, can give rise to substantial risk and are not suitable for all investors. This note does not have regard to the specific instrument objectives, financial situation and the particular needs of any specific person who may receive this note.
Auctus (or its partners, officers or employees) may, to the extent permitted by law, own or have a position in the securities or financial instruments (including derivative instruments or any other rights pertaining thereto) of the Company or any related or other company referred to herein, and may add to or dispose of any such position or may make a market or act as principle in any transaction in such securities or financial instruments. Partners of Auctus may also be directors of the Company or any other of the companies mentioned in this note. Auctus may, from time to time, provide or solicit investment banking or other financial services to, for or from the Company or any other company referred to herein. Auctus (or its partners, officers or employees) may, to the extent permitted by law, act upon or use the information or opinions presented herein, or research or analysis on which they are based prior to the material being published.
The British pound will receive a “significant bounce” if Britain and the EU reach a deal on post-Brexit trading arrangements in the coming days, affirms the CEO of one of the world’s largest independent financial advisory, asset management and fintech organizations.
The bullish observation from Nigel Green of deVere Group comes as UK Prime Minister Rishi Sunak flew to Northern Ireland on Thursday evening for a previously unannounced visit for talks with the region’s parties.
He says: “Sunak’s arrival in Belfast on Thursday night and the foreign secretary, James Cleverly’s trip to Brussels on Friday for talks with the European Commission vice-president, Maroš Šefčovič, signal that a deal on the Northern Ireland protocol could be imminent.
“After weeks of difficult back-and-forth discussions, it seems negotiators are close to finding solutions at a technical level on matters including customs.
“Hopes the UK and the European Union will strike a post-Brexit trading deal for Northern Ireland is bullish for the pound.
“A new agreement could pave the way for improved trading relations between the UK and the EU and bolster investor sentiment on Britain’s economic outlook.
“It could help traders move past ‘peak pessimism’ regarding the UK, as it would likely help encourage a broader and healthier relationship with the EU which would boost economic performance.
“We expect the pound will enjoy a significant bounce should a negotiated solution between the UK and EU be agreed – which could happen as early as Friday.”
An accord has been signalled for around the last four weeks and is likely to include a settlement on the elimination of some checks on goods going from Great Britain to Northern Ireland, and a new dispute resolution mechanism which does not involve the European Court of Justice in the first instance.
Nigel Green continues: “Since Brexit, the pound has been out of favour with FX traders, with the UK currency falling nearly 18% against a basket of currencies since the referendum.
“It has also been dragged down in recent months by fears over slowing economic growth and multi-decades high inflation.”
Earlier this week, the pound fell sharply, slipping to its lowest level in six weeks against the US dollar as a sharper-than-expected slowdown in UK inflation eased the pressure on the Bank of England to keep raising interest rates.
He concludes: Sterling was one of the worst-performing major currencies in 2022. A new post-Brexit deal on the Northern Ireland Protocol could herald the start of a reversal of fortunes for the beleaguered British pound.”
About:
deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.
AUDUSD is declining inside a bearish channel. The instrument is going below the Ichimoku Cloud, which suggests a downtrend. A test of the Kijun-Sen line of the Cloud at 0.6920 is expected, followed by falling to 0.6695. An additional signal confirming the decline will be a bounce off the upper border of the descending channel. The scenario can be cancelled by a breakaway of the upper border of the Cloud and securing above 0.7015, which will mean further growth to 0.7105.
USDCAD, “US Dollar vs Canadian Dollar”
USDCAD has secured above the resistance level. The instrument is going above the Ichimoku Cloud, which suggests an uptrend. A test of the Tenkan-Sen line of the Cloud at 1.3445 is expected, followed by growth to 1.3635. An additional signal confirming the decline will be a bounce off the lower border of the bullish channel. The scenario can be cancelled by a breakaway of the lower border of the Cloud and securing under 1.3325, which will mean further falling to 1.3235. The scenario can be confirmed by a breakaway of the upper border of the bullish channel and securing above 1.3555.
USDCHF, “US Dollar vs Swiss Franc”
USDCHF is getting ready for a breakaway of the resistance level. The instrument is going above the Ichimoku Cloud, which suggests an uptrend. A test of the Tenkan-Sen line of the Cloud at 0.9260 is expected, followed by growth to 0.9375. An additional signal confirming the decline will be a bounce off the lower border of the ascending channel. The scenario can be cancelled by a breakaway of the lower border of the Cloud and securing under 0.9145, which will mean further falling to 0.9055.
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 EU economy has not yet felt the full impact of an interest rate hike from the European Central Bank, two senior ECB officials said Thursday. Nevertheless, the Eurozone economy is holding up better than expected, and inflation indicators are trending downward. According to ECB policymakers, overall inflation in the Eurozone could fall below 3% by the end of the year if falling energy prices continue. Financial markets expect the ECB to raise the bank deposit rate to at least 3.5% by summer 2023.
The trend on the EUR/USD currency pair on the hourly time frame is bearish. The price forms a wide corridor, inside which there is a downward channel. The MACD indicator is negative again, but the divergence is becoming more pronounced on many timeframes. Under such market conditions, buy trades are best considered from the support level of 1.0597. Sell deals can be considered from the resistance level of 1.0695, but it is better with confirmation in the form of a reverse initiative on the lower time frames.
Alternative scenario: if the price breaks down through the resistance level of 1.0839 and fixes above it, the uptrend will likely resume.
News feed for 2023.02.17:
– US FOMC Member Mester Speaks at 01:00 (GMT+2);
– German Producer Price Index (m/m) at 09:00 (GMT+2);
– French Consumer Price Index (m/m) at 09:45 (GMT+2);
– US FOMC Member Barkin Speaks at 15:30 (GMT+2).
The GBP/USD currency pair
Technical indicators of the currency pair:
Prev Open: 1.2021
Prev Close: 1.1986
% chg. over the last day: -0.29 %
The recent rise in the dollar has knocked the pound sterling’s confidence. St. Louis Federal Reserve Bank President James Bullard said yesterday that the prospect of the US Federal Reserve returning to larger hikes is not out of the table. Bullard’s comments echoed those of Cleveland Fed President Loretta Mester, who said she saw a compelling case for a 0.5% rate hike at the Fed’s last meeting. The dollar index has short-term fundamental support right now. In the medium term, the US Fed and the Bank of England are at the end of the rate hike cycle. Therefore, traders should not expect medium-term trends in the GBP/USD currency pair.
From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. At the moment, the price is trading below the moving averages, and sellers’ pressure remains intraday. The MACD indicator has become negative but with signs of divergence. Under such market conditions, it is better to look for buy trades on intraday time frames from the support level of 1.1930 but with a confirmation in the form of a false breakdown. Sell deals are best sought from the resistance level of 1.2055 or 1.2118, but also better with a confirmation in the form of a reverse initiative on the lower time frames.
Alternative scenario: if the price breaks out through the 1.2200 resistance level and fixes above it, the uptrend will likely resume.
News feed for 2023.02.17:
– UK Retail Sales (m/m) at 09:00 (GMT+2).
The USD/JPY currency pair
Technical indicators of the currency pair:
Prev Open: 134.09
Prev Close: 133.94
% chg. over the last day: -0.12 %
The appointment of former Bank of Japan policy council representative Kazuo Ueda as central bank governor has cooled rumors of an earlier interest rate normalization. In the past, Ueda has warned of the dangers of premature interest rate hikes, dispelling any fears of higher interest rates in the foreseeable future. However, a reassessment of the yield curve management policy cannot be ruled out, given that he has pointed out its potential shortcomings.
Trading recommendations
Support levels: 133.47, 132.95, 131.43, 129.68, 129.98, 129.19, 129.04, 128.16
Resistance levels: 134.65
From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is trading above the moving averages, but it has reached the daily resistance level. The MACD indicator is in the positive zone, and there are signs of divergence already on several timeframes. Buying pressure is present, but it is limited. It is best to look for buy deals from the support level of 133.47 or 132.95, but only with confirmation on the lower time frames. Sell deals can be sought from 134.65, but with additional confirmation.
Alternative scenario: if the price fixes below the 131.43 support level, the downtrend will be resumed with a high probability.
There is no news feed for today.
The USD/CAD currency pair
Technical indicators of the currency pair:
Prev Open: 1.3384
Prev Close: 1.3456
% chg. over the last day: +0.54 %
The US and Canada are closely linked economies. Their economic health and financial flows between them are fairly stable relative to external exchange rates. The US Fed and the Bank of Canada practically go hand in hand in terms of raising interest rates, so only energy prices, especially oil prices, will cause an imbalance in USD/CAD pricing. The OPEC+ countries do not intend to lose profits on the background of falling oil prices and will try by all means to keep the quotations from falling, up to a reduction of the production volume. A significant rise in oil prices is also undesirable as it might trigger a new wave of inflation while the rates are already at their highest levels.
Trading recommendations
Support levels: 1.3444, 1.3390, 1.3347, 1.3295, 1.3212
Resistance levels: 1.3497, 1.3520, 1.3554, 1.3595
From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The price is trading above the moving averages. The MACD indicator is in the positive zone, with no signs of divergence. Buy trades can be considered from the support of 1.3390, but with additional confirmation on the lower time frames. Sell deals should be considered from the resistance level of 1.3497 or 1.3520, but on the condition of a reverse reaction or false breakout, as the levels have already been tested.
Alternative scenario: if the price breaks down and consolidates below the support level of 1.3263, the downtrend will likely resume.
News feed for 2023.02.17:
– Canada Producer Price Index (m/m) at 15:30 (GMT+2).
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.
In the US, the Producer Price Index (PPI), which shows the rate of inflation between factories and plants, rose by 0.7% over the past month. Meanwhile, initial jobless claims fell again, indicating a strong and resilient labor market. Fed officials are once again scaring investors into returning to more rate hikes as demand does not decline. St. Louis Federal Reserve Bank President James Bullard said yesterday that the prospect of the Fed returning to more rate hikes is not out of the table. Bullard’s comments echoed those of Cleveland Fed President Loretta Mester, who said she saw a compelling case for a 0.5% rate hike at the last Fed meeting. Treasury yields jumped on these statements, which led to a decline in rising sectors of the market, including consumer and technology. As the stock market closed, the Dow Jones Index (US30) decreased by 1.26%, and the S&P 500 Index (US500) fell by 1.38%. The NASDAQ Technology Index (US100) lost 1.78%.
Tesla (TSLA) recalled 362,000 electric cars equipped with its “Full Self Driving” software, which can cause cars to “act unsafely at intersections.” The company’s stock was down by 5%. Roku (ROKU) reported outstanding quarterly results. The streaming device maker reported an optimistic outlook. The company’s stock jumped by 11% on the report. Cisco Systems Inc (CSCO) reported better-than-expected quarterly results. The company’s stock rose by 5% after the report was released.
The Congressional Budget Office (CBO) in the US issued a warning yesterday regarding the debt ceiling, which continues to be a contentious issue. The CBO stated that Congress has 5-8 months (depending on IRS revenues) to prevent a default, which could have widespread consequences for the United States.
Stock markets in Europe were mostly up yesterday. Germany’s DAX (DE30) gained 0.18%, France’s CAC 40 (FR40) added 0.89%, Spain’s IBEX 35 (ES35) increased by 0.35%, and the British FTSE 100 (UK100) closed up by 0.18% on Thursday.
European Central Bank President Christine Lagarde said that they would raise rates by 50 basis points at the next meeting. And this is despite a slowdown in inflation over the past few months.
Huw Pill, a chief economist at the Bank of England, made it clear that policymakers are prepared to slow the pace of interest rate hikes, saying there is a risk of “over-tightening.” The Bank of England may approve a quarter-point hike at its March meeting — or even suspend the hike cycle itself. Officials expect the UK to slide into recession with no sustainable growth until 2025.
Gold prices continued to fall as stronger-than-expected US inflation data, and hawkish comments from Federal Reserve officials raised fears of further interest rate hikes, while optimism about China’s economic recovery boosted demand for copper. The prospect of higher US interest rates is not good for the precious metals as it increases their opportunity cost. Rising rates also lead investors to prefer the dollar as a safe-haven asset, given that it offers higher yields.
Asian markets were mostly up yesterday. Japan’s Nikkei 225 (JP225) gained 0.71%, China’s FTSE China A50 (CHA50) decreased by 0.20% yesterday, Hong Kong’s Hang Seng (HK50) added 0.84%, India’s NIFTY 50 (IND50) gained 0.11%, and Australia’s S&P/ASX 200 (AU200) ended the day up by 0.79%.
RBA head Philip Lowe said today that an interest rate cut could come next year if inflation declines steadily. Whether the RBA will raise rates at its next meeting depends on another labor market report. Strong labor market data will encourage further rate hikes and vice versa.
S&P 500 (F) (US500) 4,090.41 −57.19 (−1.38%)
Dow Jones (US30)33,696.85 −431.20 (−1.26%)
DAX (DE40) 15,533.64 +27.30 (+0.18%)
FTSE 100 (UK100) 8,012.53 +14.70 (+0.18%)
USD Index 104.05 +0.12 (+0.12%)
Important events for today:
– Australia RBA Governor Lowe Speaks at 00:30 (GMT+2);
– US FOMC Member Mester Speaks at 01:00 (GMT+2);
– UK Retail Sales (m/m) at 09:00 (GMT+2);
– German Producer Price Index (m/m) at 09:00 (GMT+2);
– French Consumer Price Index (m/m) at 09:45 (GMT+2);
– Canada Producer Price Index (m/m) at 15:30 (GMT+2);
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.
