26 Jan

Week Ahead: USDInd braced for heavy hitters

By ForexTime 

  • High impact events could rock markets
  • Central bank decisions, earnings & data in focus
  • 4 key factors could move USDInd
  • USDInd waiting for potent catalyst
  • Keep eye on 50, 100 and 200-day SMA

A flurry of high impact events could rattle financial markets in the week ahead.

Rate decisions by major central banks, heavy hitting economic reports and corporate earnings from the largest companies in the world will be in focus.

Monday, 29th January  

  • NZD: New Zealand trade

Tuesday, 30th January

  • AUD: Australia retail sales
  • JPY: Japan unemployment
  • EUR: Eurozone/Germany GDP
  • NQ100_m: Microsoft, Alphabet earnings
  • SPX500_m: Starbucks, Pfizer earnings

Wednesday, 31st January  

  • CNH: China non-manufacturing & manufacturing PMI’s
  • EUR: Germany CPI, unemployment
  • USD: Fed rate decision, US Treasury quarterly refunding
  • WSt30_m: Boeing earnings
  • SPX500_m: Mastercard earnings

Thursday, 1st February

  • EUR: Eurozone S&P manufacturing PMI, CPI, unemployment
  • CHF: SNB rate decision
  • GBP: BoE rate decision
  • USD: ISM manufacturing, initial jobless claims
  • NQ100_m: Apple, Amazon, Meta earnings

Friday, 2nd February

  • USD: US jobs report
  • Wst30_m: Chevron earnings
  • SPX500_m: Exxon Mobil earnings

Markets may experience heightened levels of volatility due to the scheduled releases and high-risk events. Our focus falls on the USDInd which seems to be waiting for a potent fundamental spark.

The USD Index tracks how the dollar is performing against a basket of six different G10 currencies, including the Euro, British Pound, Japanese Yen, and Canadian dollar.

Interestingly, the dollar has appreciated against almost all G10 currencies year-to-date.

Dollar bulls has been supported by cooling bets around the Fed cutting rates in Q1 amid strong US economic data.

With all the above said, the USD Index could see a significant move due to these 4 key factors:

  1. Fed Decision

According to markets, the March meeting could be a close call with traders currently pricing in a 50% probability of a US rate cut – according to Fed Fund futures.

Note: The incoming PCE report this afternoon could impact these odds.

Initial expectations around the Fed cutting rates earlier than expected were cooled by stronger-than-expected US economic data over the past few weeks. With this said, much attention will be directed towards Powell’s press conference for any clues on future rate moves.

Even if the Fed holds back on cutting rates in March, this meeting may set the stage for a cut in May.

  • The USDInd could strengthen if the Fed pushes back on rate cut bets and offers little insight on future moves.
  • Should the central bank sound strike a dovish tone, decide to cut rates or signal a rate cut in May, this may weaken the USDInd.

  1. US Treasury quarterly refunding

This is when the US government announces its plans for debt auctions for the quarter ahead.

It is worth noting that this event has sparked volatility in the US bond markets in the past, impacting the dollar as a result.

Note: Falling Bond Prices –> Rising Yields –> Appreciating Dollar (vice versa)

In the last quarterly refinancing on the 1st of November, the Treasury announced a lower-than-expected refunding estimate. This along with other factors sparked a selloff on the benchmark 10-year Treasury yield, dragging yields below 4% by the end of 2023 – coinciding with the selloff on the USDInd.

Note: There were other forces at play weakening the dollar, primarily the Fed’s dovish pivot.

  • Should the announcement from the Treasury push US yields higher, this could provide the USDInd a boost.
  • An announcement that results in a selloff in US yields has the potential to stimulate dollar bears, hitting the USDInd as a result.

  1. US December nonfarm payrolls (NFP)

Markets expect the US economy to have created 185,000 jobs in December, compared with the 216,000 in the previous month. The unemployment rate is forecast to remain unchanged at 3.7% while average earnings are forecast to rise 0.3% MoM compared with 0.4% in the prior month.

  • A stronger-than-expected US jobs report could cool rate cut bets, pushing the USDInd higher as a result.
  • However, evidence of a cooling US jobs market could reinforce expectations around lower US rates – pulling the USDInd lower.

  1. Technical forces

The USDInd has been trapped within multiple ranges on the daily charts with prices entangled by the 200 and 50-day SMA. It looks like the index needs a potent fundamental or technical spark to get the engines running.

  • A solid breakout and daily close above 103.70 could trigger an incline towards the 100-day SMA at 104.40 and 105.00.
  • Should prices break below the 50-day SMA at 103.00, bears could be encouraged to target 102.10 and 101.35.

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Economics & Fundamentals Opinions
25 Jan

Corporative reporting supports US stock indices. The People Bank of China (PBoC) intends to stimulate the economy

By JustMarkets

As of Wednesday’s stock market close, the Dow Jones Index (US30) decreased by 0.26%, while the S&P 500 Index (US500) added 0.08%. The NASDAQ Technology Index (US100) closed positive by 0.36%. Optimism about the US economic outlook and strong corporate earnings results boosted stock prices on Wednesday.

Strong earnings from technology companies supported the broader market, as Netflix (NFLX) closed higher by more than 10% after reporting fourth-quarter streaming pay-per-view numbers well above consensus. Additionally, shares of ASML Holding NV rose more than 8% and led gains in chip stocks after reporting record Q4 orders, indicating the strength of the semiconductor industry.

S&P’s US manufacturing PMI for January unexpectedly rose by 2.4 to 50.3, beating expectations for a decline to 47.6 and showing the fastest pace of growth in 15 months.

On Wednesday, the Bank of Canada (BoC) left its key overnight rate at 5% and said that while core inflation is still a concern, the bank is focusing on when to lower borrowing costs rather than whether to raise rates again. Bank of Canada Governor Maclem said at a press conference that the Bank of Canada is not yet ready, willing, or able to go soft on interest rates but hinted that a rate cut is around the corner.

Equity markets in Europe were mostly up on Wednesday. Germany’s DAX (DE40) rose by 1.58%, France’s CAC 40 (FR40) gained 0.91% yesterday, Spain’s IBEX 35 (ES35) added 1.16%, and the UK’s FTSE 100 (UK100) closed positive by 0.56%.

The Eurozone Manufacturing PMI for January rose by 2.2 to a 10-month high of 46.6, which was stronger than expectations of 44.7.

Today, the ECB will hold its first monetary policy meeting of the year on Thursday. There is no chance of a policy change at this meeting, but ECB President Lagarde’s press conference at 15:45 will play an important role in shaping expectations going forward. The ECB now depends on incoming data on inflation, production, GDP, and the labor market. And Lagarde is likely to talk about it at the press conference. The currency market is unlikely to react strongly to the ECB statement unless Lagarde specifies the timing of the rate cut. If there are clear signals about the timing of the rate cut, it could lead to a strong price imbalance.

WTI crude oil prices strengthened above $75 a barrel on Thursday, hovering near one-month highs, as a significant drawdown in US crude inventories helped boost oil prices. Official data showed US crude inventories fell by 9.233 million barrels last week, the biggest decline since August and beating market expectations for a 2.15 million barrel drop. Fresh stimulus measures in China, the largest oil importer, also contributed to the bullish sentiment, with the People’s Bank of China announcing that it will lower the reserve requirement ratio for banks next month in an attempt to support the country’s struggling economy. In addition, geopolitical tensions persisted as a coalition led by the US and UK strikes Houthi militants in Yemen, who are responsible for numerous attacks on commercial ships in the Red Sea.

Asian markets traded mixed yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.80%, China’s FTSE China A50 (CHA50) jumped by 1.28%, Hong Kong’s Hang Seng (HK50) was up by 3.56% by Wednesday’s close, and Australia’s ASX 200 (AU200) was positive by 0.06%.

On Wednesday, the People’s Bank of China (PBOC) cut the reserve requirement ratio for banks by 50 bps to 10.00%, which will boost liquidity and help revive the Chinese economy, which is favorable for global growth prospects. PBOC also noted that more measures will be taken soon to stimulate economic growth. These signals helped Chinese markets bounce off multi-year lows.

Singapore’s central bank (MAS) is expected to leave its monetary policy unchanged this month on January 29 and refrain from easing sentiment until it has more evidence that inflation is falling consistently. Inflation in Asia’s financial center remains stable. It was 3.2% in November and 3.3% in December, down from a peak of 5.5% in early 2023.

S&P 500 (US500) 4,868.55 +3.95 (+0.08%)

Dow Jones (US30) 37,806.39 −99.06 (−0.26%)

DAX (DE40) 16,889.92 +262.83 (+1.58%)

FTSE 100 (UK100) 7,527.67 +41.94 (+0.56%)

USD Index  103.31 −0.31 (−0.30%)

News feed for 2024.01.25:
  • – German Ifo Business Climate (m/m) at 11:00 (GMT+2);
  • – Norwegian Norges Interest Rate Decision at 11:00 (GMT+2);
  • – Eurozone ECB Interest Rate Decision at 15:15 (GMT+2);
  • – Eurozone ECB Monetary Policy Statement at 15:15 (GMT+2);
  • – US Building Permits (m/m) at 15:30 (GMT+2);
  • – US Core Durable Goods Orders (m/m) at 15:30 (GMT+2);
  • – US GDP (q/q) at 15:30 (GMT+2);
  • – US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
  • – Eurozone ECB Press Conference at 15:45 (GMT+2);
  • – US New Home Sales (m/m) at 17:00 (GMT+2);
  • – Eurozone ECB President Lagarde Speaks at 17:15 (GMT+2);
  • – US Natural Gas Storage (w/w) at 17:30 (GMT+2).

By JustMarkets

 

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.

Economics & Fundamentals Financial News
25 Jan

Target Thursdays: SPX500_m, EURUSD & XAGUSD hit target prices

By ForexTime 

Check out these potential profits that you may have missed from our Daily Market Analysis.

  1. SPX500_m bulls deliver

Back on Monday, we covered the SPX500_m in our trade of the week. Prices were firmly bullish, especially after surging to record highs last Friday.

  • TP hit: YES, the SPX500_m hit the 4900 level
  • Why: Investor optimism for strong corporate earnings, rising tech stocks
  • Technicals: Intraday breakout above 4870 fuelled upside

  1. EURUSD hits resistance ahead of ECB

It has been a choppy week for the EURUSD as anticipation mounts ahead of the ECB meeting. Nevertheless, prices have hit some of our targets before this big event.

  • TP hit: YES, the EURUSD hit 21-Day EMA and 50% Fib level
  • Why: Mixed Eurozone data dampened ECB cut bets, weak US dollar
  • Technicals: Prices in a range waiting for significant breakout

  1. XAGUSD eyes 4th target level

Silver bulls have been busy this morning, cutting through the bullish price targets like a hot knife through butter.

  • TP hit: YES, 3 out of the 4 profit targets have been hit his morning.
  • Why: A weaker dollar could be offering support to the precious metal
  • Technicals: Prices are respecting an uptrend on the 15-minute timeframe

The above scenario (XAGUSD) is based on the FXTM Signals that are posted twice a day (before the London and New York sessions) for all FXTM clients to follow. This can found in the MyFXTM profile under Trading Services… FXTM Trading Signals.

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Opinions Stock Market News
24 Jan

Inflationary pressures are easing in New Zealand. Today, the focus of investors is directed to the BoC meeting

By JustMarkets

At Tuesday’s stock market close, the Dow Jones Index (US30) was down by 0.25%, while the S&P 500 Index (US500) added 0.29% yesterday. The NASDAQ Technology Index (US100) closed positive by 0.43%.

Economic news from the US on Tuesday was weaker than expected. The Richmond Fed’s January index of current conditions in the manufacturing sector unexpectedly fell by 4 to a 3-year low of negative 15, weaker than expectations of a rise to negative 8.

Markets are discounting the odds of a 25 bps rate cut at 3% at the next FOMC meeting on January 30-31 and 48% for the same 25 bps rate cut at the March 19-20 meeting. As recently as a week ago, the probability of a rate cut in March was 60%.

Verizon Communications (VZ) shares are up more than 6% after its 2024 adjusted EPS forecast beat consensus. The Dow Jones Industrials Index spent the day in negative territory as shares of 3M Co. (MMM) closed down more than 11% after its 2024 adjusted earnings forecast came in below consensus.

The Bank of Canada (BoC) will hold its first monetary policy meeting of the year today. Like other G10 central banks, the Bank of Canada is not yet ready to cut rates. The BoC is expected to keep rates at 5%. Policymakers continue to talk about their willingness to “raise rates further if necessary,” and inflation continues to rise faster than desired. But for the March meeting, the probability of keeping the rate on hold has fallen from 100% to 66% over the past week, so investors’ main focus will be on the monetary policy report, where the BoC’s new projections will be unveiled, and on Bank Governor Macklem’s remarks at the post-meeting press conference. The focus should be on the GDP and inflation forecasts. If the GDP forecast turns out to be positive and the inflation forecast is down, it could put pressure on the Canadian dollar, as it will increase the probability of a rate cut at the March meeting. But we should not forget that the Canadian dollar is a commodity currency and is highly correlated with oil prices. Taking into account the aggravation of the geopolitical situation in the Middle East, the growth of oil prices may further stimulate the growth of the Canadian dollar or keep the CAD from excessive decline.

Equity markets in Europe were mostly down on Tuesday. Germany’s DAX (DE40) fell by 0.03%, France’s CAC 40 (FR40) lost 0.34% yesterday, Spain’s IBEX 35 (ES35) decreased by 1.09%, and the UK’s FTSE 100 (UK100) closed negative by 0.03%.

The Eurozone Consumer Confidence Index for January unexpectedly fell by 1.0 to negative 16.1, which was weaker than expectations of a rise to negative 14.3. Today, manufacturing PMI and service PMI statistics for many European countries will be released. These data will show how business activity, which was in contractionary territory in most countries at the beginning of the year, is progressing. A slight improvement in the business activity indicators is forecast.

On Wednesday, Germany’s Ifo Institute downgraded its economic growth forecast for 2024 again, citing uncertainty caused by changes to the federal budget triggered by a constitutional court ruling. The institute now expects Europe’s largest economy to grow by 0.7% this year instead of 0.9%.

Asian markets traded mixed yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.08%, China’s FTSE China A50 (CHA50) was down by 0.78%, Hong Kong’s Hang Seng (HK50) jumped by 2.63% by Tuesday’s close, and Australia’s ASX 200 (AU200) was positive by 0.51%.

Alibaba Group (BABA) led the Hang Seng gains, rising by 5% following reports that co-founders Jack Ma and Joe Tsai purchased shares of the largest e-commerce company totaling $200 million in the fourth quarter.

Japan’s exports rose at the fastest pace in a year last month, raising the likelihood that the economy will resume growth in October-December. Exports rose by 9.8% in December from a year earlier, the biggest jump in a year and reversing a 0.2% drop in the previous month. Imports fell by 6.8% compared to economists’ forecast of a 5.4% decline. The data suggests that external demand will have less of an impact on the economy in the fourth quarter, contributing to the recovery.

Consumer inflation in New Zealand in the fourth quarter was in line with expectations. Annual inflation was 4.7% in the fourth quarter, slower than the 5.6% in the third quarter. Inflation is now at its lowest level since mid-2021. However, some closely watched indicators of underlying inflationary pressures were stronger than the Reserve Bank of New Zealand (RBNZ) had forecast. Non-traded inflation was 5.9% rather than 5.7%, and the core reading, which excludes the most significant ups and downs, was around 5%. Therefore, despite the obvious weakness in the New Zealand economy, most analysts expect the Reserve Bank to maintain its hawkish stance.

S&P 500 (US500) 4,864.60 +14.17 (+0.29%)

Dow Jones (US30) 37,905.45 −96.36 (−0.25%)

DAX (DE40) 16,627.09 −56.27 (−0.34%)

FTSE 100 (UK100) 7,485.73 −1.98 (−0.03%)

USD Index  103.53 +0.16 (+0.20%)

News feed for 2024.01.24:
  • – Australia Manufacturing PMI (m/m) at 00:00 (GMT+2);
  • – Australia Services PMI (m/m) at 00:00 (GMT+2);
  • – Japan Trade Balance (m/m) at 01:50 (GMT+2);
  • – Japan Manufacturing PMI (m/m) at 02:30 (GMT+2);
  • – Japan Services PMI (m/m) at 02:30 (GMT+2);
  • – Germany Manufacturing PMI (m/m) at 10:30 (GMT+2);
  • – Germany Services PMI (m/m) at 10:30 (GMT+2);
  • – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+2);
  • – Eurozone Services PMI (m/m) at 11:00 (GMT+2);
  • – UK Manufacturing PMI (m/m) at 11:30 (GMT+2);
  • – UK Services PMI (m/m) at 11:30 (GMT+2);
  • – US Manufacturing PMI (m/m) at 16:45 (GMT+2);
  • – US Services PMI (m/m) at 16:45 (GMT+2);
  • – Canada BoC Interest Rate Decision at 17:00 (GMT+2);
  • – Canada BoC Monetary Policy Report at 17:00 (GMT+2);
  • – US Crude Oil Reserves (w/w) at 17:30 (GMT+2);
  • – Canada BoC Press Conference at 18:00 (GMT+2).

By JustMarkets

 

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.

Economics & Fundamentals Financial News
24 Jan

Gold seeks fresh momentum

By ForexTime 

  • Gold trading between key weekly levels
  • Incoming US data could move precious metal
  • H4 charts show possible bullish presence
  • Four potential targets identified
  • H4 bullish scenario invalidated below 2001.68

Gold struggled for direction on Wednesday as markets remained cautious ahead of key US data that may impact bets on Fed rate cuts.

After swinging within a wide range since the start of the year, a significant move could be in the works due to fresh fundamental forces. It would be wise to keep an eye on the final quarter US GDP report on Thursday and PCE report on Friday which could rock the precious metal ahead of next week’s Fed meeting.

Redirecting our focus back to the technicals…

Gold has been oscillating between a weekly support level around 2005.49 and a weekly resistance level around 2060.49. The price is approaching the middle band again and although the current market structure shows a down trend, the momentum can easily shift to the upside. If the price goes higher than the last top, this will result in an early stage of a new uptrend in process.    

A look at the 4-hour time frame can provide more precision.

On the 4-hour chart the price has been oscillating around the 50 Linear Weighted Moving Average with the Momentum and the Moving Average Convergence Divergence (MACD) oscillators both confirming a possible build up to the demand side.

If the price reaches the 2039.50 level, a long opportunity becomes feasible.

Attaching a modified Fibonacci tool to the trigger level at 2039.50 and dragging it to the last bottom at 2001.68, four possible targets can be determined:

  • The first target is possible at 2054.63 (Target 1).

  • The second price target is probable at 2062.19 (Target 2).

  • The third price target is likely at 2077.32 (Target 2).

  • The fourth and last price target is feasible at 2096.23 (Target 4).

If the price breaks past the 2001.68 level, this scenario is no longer applicable, and a short option becomes viable.

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Metals Opinions
23 Jan

The US stock indices have once again hit all-time highs. Tensions are growing in the Middle East

By JustMarkets

At Monday’s stock market close, the Dow Jones Index (US30) increased by 0.36%, while the S&P 500 Index (US500) gained 0.22% yesterday. The NASDAQ Technology Index (US100) closed positive by 0.32%. All three indices once again set new record highs. Stocks rose on Monday amid optimism about the US economic outlook and expectations of strong quarterly corporate earnings results. In addition, a decline in government bond yields on Monday supported stocks. Companies such as Netflix (NFLX), Tesla (TSLA), and Intel (INTC) will also report this week.

FOMC officials have traditionally kept quiet this week ahead of next week’s Fed meeting. Markets are discounting the odds of a 25 bps rate cut at 3% for the January 30-31 FOMC meeting and 42% for the same 25 bps rate cut at the March 19-20 meeting.

Equity markets in Europe were mostly up on Monday. Germany’s DAX (DE40) rose by 0.77%, France’s CAC 40 (FR40) gained 0.56% yesterday, Spain’s IBEX 35 (ES35) added 1.11%, and the UK’s FTSE 100 (UK100) closed positive by 0.35%.

European equity markets opened higher on Tuesday, likely extending gains from the previous session amid improving risk sentiment. However, investors remained cautious ahead of the European Central Bank’s decision later this week. The ECB is expected to keep interest rates unchanged, but policymakers have disagreed with predictions of an imminent rate cut.

WTI crude oil prices held just below $75 a barrel on Tuesday, near their highest levels in four weeks, as fresh strikes by US and British troops on Houthi targets in Yemen heightened fears of a wider conflict in the region that could disrupt supplies. Meanwhile, the resumption of production from Libya’s largest field and signs of rising output, especially from non-OPEC countries, continued to weigh on the oil market. On the demand side, the IEA revised its forecast for oil demand growth in 2024 to 1.24 million bpd, up 180,000 bpd, citing improved economic growth and lower oil prices in Q4. OPEC also maintained its forecast for oil demand growth of 2.25 million bpd in 2024, with 1.85 million bpd growth expected in 2025.

Asian markets traded mixed on Monday. Japan’s Nikkei 225 (JP225) gained 0.72% yesterday, China’s FTSE China A50 (CHA50) was down by 0.72%, Hong Kong’s Hang Seng (HK50) fell by 2.25% on Monday, and Australia’s ASX 200 (AU200) was positive by 0.51%.

The Bank of Japan (BoJ) unanimously kept its key short-term interest rate unchanged at negative 0.1% and the 10-year bond yield at around 0% at its January meeting, as expected. The Central Bank also kept the upper limit on long-term government bond yields unchanged at 1.0%. Meanwhile, in its quarterly outlook report, the BoJ lowered its CPI target for fiscal 2024 to 2.4% from October’s forecast of 2.8%, reflecting the recent decline in oil prices. For 2025, the BoJ said it expects core inflation at 1.8%, up slightly from previous estimates of 1.7%. On economic growth, policymakers lowered their GDP growth forecast for 2023 to 1.8% from 2.0% in previous projections. For FY 2024, the bank revised its GDP forecast upward to 1.2% from 1.0%, helped by pent-up demand. BoJ Governor Kazuo Ueda recently stated that he sees no need for an immediate change in the BoJ’s dovish stance.

Singapore’s annual inflation rate unexpectedly rose to 3.7% in December 2023 from November’s 25-month low of 3.6%, exceeding market forecasts of 3.5%. Annual core inflation (excluding food and energy prices) rose to 3.3% in December from 3.2% in November, beating forecasts for a  3.1% rise.

The offshore yuan rose to 7.18 per dollar, hitting its highest level in nearly two weeks after China’s cabinet pledged again to stabilize capital markets. China’s premier of the State Council held a cabinet meeting on Monday, where officials said they intend to take stronger and more effective measures to stabilize market confidence. Policymakers are reportedly seeking to channel about 2 trillion yuan, mostly from the offshore accounts of Chinese state-owned enterprises, into a fund to buy mainland stocks.

S&P 500 (US500) 4,850.43 +10.62 (+0.22%)

Dow Jones (US30) 38,001.81 +138.01 (+0.36%)

DAX (DE40) 16,683.36 +128.23 (+0.77%)

FTSE 100 (UK100) 7,487.71 +25.78 (+0.35%)

USD Index  103.17 −0.16 (−0.15%)

News feed for 2024.01.23:
  • – Japan BoJ Interest Rate Decision at 04:30 (GMT+2);
  • – Japan BoJ Monetary Policy Statement at 04:30 (GMT+2);
  • – Singapore Consumer Price Index (m/m) at 07:00 (GMT+2);
  • – Japan BoJ Press Conference at 08:30 (GMT+2);
  • – US Richmond Manufacturing Index (m/m) at 17:00 (GMT+2);
  • – New Zealand Consumer Price Index (q/q) at 23:45 (GMT+2).

By JustMarkets

 

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.

Economics & Fundamentals Financial News
23 Jan

EURUSD waits on ECB meeting

By ForexTime 

  • EURUSD in bearish flag pattern
  • ECB meeting looms large
  • Prices wedged between 21 & 50 EMA
  • Significant move could be on horizon
  • Selloff expected if bearish flag breaks

The past few days have been a choppy affair for the EURUSD.

Prices remain trapped within a range on the daily charts as bulls and bears wait for a fresh fundamental spark.

This could come in the form of the European Central Bank (ECB) meeting on Thursday. Although the central bank is widely expected to leave rates unchanged, much focus will be on President Christine Lagarde’s press conference for fresh clues on the outlook for rate cuts. It is worth keeping in mind that it was only last week Lagarde said that the ECB is likely to cut rates in Summer. Should she reiterate this message and push back on rate-cut bets, euro bears could enter the building.

Traders are currently pricing in a 64% probability of a 25-basis point ECB cut by April, with a cut by June fully priced in.

Beyond the ECB meeting, it will be wise to keep an eye on key US economic data which could also influence the currency pair.

Focusing on the technical picture, the EURUSD could be gearing up for a significant move.

A bearish flag pattern can be observed on the daily timeframe.

Note: A bearish flag is a short-term bearish continuation pattern.

A proper flag should have a flagpole (where price nearly goes vertical), leading to price action bounded by two parallel lines, and often tilting against the existing trend.

With the flagpole often used as an estimated target after a breakout out from the flag, this current flag has a target of about 138 pips.

The location of this flag however may point towards a potential failed flag/ “false flag”.

The flag sits right on the upward-sloping trend line (a demand zone where bulls look to initiate new buys) drawn from October 3rd, 2023, and has been tested a few times after.

A close above the flag’s resistance may encourage bulls (those looking to see this pair rally) to push EURUSD higher.

As bulls join the rally in fiber to a possible new high above the December 28th high at 1.11396, attention should be given to the following potential resistance levels

1.09214: The 21-day exponential moving average

1.09321: The 50 Fibonacci retracement level

1.09813: The 38.2 Fibonacci retracement level level

1.10421: The 23.6 Fibonacci retracement level.

However, if the bearish flag breaks, below the support zone of the flag, its target objective maybe 1.04659  which is the 100.0 Fibonacci level

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Economics & Fundamentals Financial News
22 Jan

Brent Crude Oil Prices Inch Upwards Amid Demand Speculations

By RoboForex Analytical Department

Brent crude oil prices are witnessing a moderate rise as the week begins, with the cost per barrel currently near $78.40. This upward trend is primarily influenced by the evolving outlook on energy demand. Recent macroeconomic data have cast some doubts on future demand, somewhat offsetting factors previously buoying prices, such as tensions in the Middle East.

Currently, Brent crude seems poised for a phase of consolidation within a specific price range. Despite some existing downward pressures, the ongoing geopolitical tensions in the Red Sea and the Gulf of Aden are maintaining a significant risk premium in crude oil prices. Market dynamics are also reflected in the backwardation between the current Brent price and its six-month futures, suggesting an anticipation of potential future oil supply limitations.

Brent Crude Oil Technical Analysis

The H4 chart for Brent indicates a recent rise to $79.74, followed by a correction to $78.06. It’s likely that a tight consolidation range will form above this level today. A break above this range could signal a growth trajectory towards $80.00, and potentially higher to $81.84 as a local target. The MACD indicator, with its signal line positioned above zero, supports the likelihood of continued growth.

On the H1 chart, a correction phase appears to have concluded. The price may start ascending towards $79.79. Following this, a new consolidation phase around this level is anticipated. An upward breakout from this range could propel the price further to $81.84. This outlook is reinforced by the Stochastic oscillator, indicating a signal line trajectory from above 20, aiming towards 80.

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.

Energy Financial News
22 Jan

US stock indices hit all-time highs. PBoC left key lending rates unchanged

By JustMarkets

At Friday’s close, the Dow Jones Index (US30) was up by 1.05% (+0.12% for the week), while the S&P 500 Index (US500) added 1.23% (+1.01% for the week) on Friday. The NASDAQ Technology Index (US100) closed positive by 1.70% on Friday (up +2.07% for the week). At the same time, all three indices updated their all-time highs.

Stocks rose to record highs on Friday on optimism about the US economic outlook. According to the University of Michigan, inflation expectations in the US fell this month, bolstering hopes that the Fed could provide a soft landing for the economy. In addition, Friday’s rally in chip stocks is also boosting tech stocks and the broader market after Taiwan Semiconductor Manufacturing Co gave an upbeat outlook for this year, bolstering hopes for a rebound in chip sales.

Weakening political risks supported stocks after Congress passed a resolution late Thursday night to keep the government running through March and avoid a shutdown on Saturday. The temporary measure would fund some US agencies through March 1 and others through March 8.

Shares of iRobot fell by more than 25% after Bloomberg reported that the European Union’s antitrust authority intends to block the company’s planned acquisition of Amazon.com.

Equity markets in Europe were mostly down on Friday. Germany’s DAX (DE40) decreased by 0.07% (-1.01% for the week), France’s CAC 40 (FR 40) fell by 0.40% (-1.29% for the week), Spain’s IBEX 35 (ES35) lost 0.22% (-2.58% for the week), and the UK’s FTSE 100 (UK100) closed positive by 0.04% (2.14% for the week).

Over the past week, expectations of an ECB interest rate cut have weakened. In the swap market, the probability of an ECB rate cut at the March meeting has fallen to 16% from over 50% at the beginning of the month. Swaps currently estimate the odds of a 25 bps ECB rate cut at 3% at the next meeting on January 25 and 16% at the next meeting on March 7. The first-rate cut is now expected in April. Germany’s producer price index for December fell more than expected, which is dovish for ECB policy.

In December, UK retailers suffered their biggest drop in sales in nearly three years, raising the risk that the economy slipped into recession late last year. UK retail sales in December 2023 fell by 2.4% compared to the same month in 2022, driven by a marked decline in sales. This was the largest monthly fall since January 2021.

Crude oil and gasoline prices declined moderately on Friday. Expectations that global oil supplies will remain ample despite geopolitical risks in the Middle East are weighing on crude oil prices. But against the backdrop of OPEC+ production cuts, as well as periodic escalation of the conflict in the Red Sea, traders should not expect a significant decline in prices for black gold in the coming weeks.

Asian markets traded mixed last week. Japanese Nikkei 225 (JP225) jumped by 0.92%, Chinese FTSE China A50 (CHA50) remained unchanged in price for five trading days, Hong Kong Hang Seng (HK50) fell by 0.54% for the week, and Australian ASX 200 (AU200) gained 1.02%.

On Monday, the People’s Bank of China (PBoC) kept key lending rates unchanged amid downward pressure on the yuan, disappointing investors expecting stimulus measures. Last week, the People’s Bank of China surprised markets by leaving the medium-term lending rate unchanged. Chinese markets continued to decline amid lingering concerns about a slowing economic recovery.

S&P 500 (US500) 4,839.81 +58.87 (+1.23%)

Dow Jones (US30) 37,863.80 +395.19 (+1.05%)

DAX (DE40)  16,555.13 −12.22 (−0.07%)

FTSE 100 (UK100) 7,461.93 +2.84 (+0.04%)

USD Index  103.24 −0.30 (−0.29%)

News feed for 2024.01.22:
  • – China PBoC Loan Prime Rate (m/m) at 03:15 (GMT+2).

By JustMarkets

 

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.

Financial News Stock Market News
22 Jan

Trade Of The Week: SPX500_m bulls charge to record highs

By ForexTime 

  • S&P500 hits all-time high
  • US earnings + key data in focus
  • Prices bullish for RSI overbought
  • Key level of interest at 4798
  • Can bulls maintain hunger for gains?

US equity bulls were back in action last Friday as optimism over expected Fed rate cuts and surging tech stocks pushed the SPX500_m to all-time highs!

Note: The SPX500_m tracks the underlying S&P 500 index

The index has not only topped the previous record set in January 2022 but also confirmed that it has been in a bull market since the October 2022 low. When considering the shaky start to the new year, it looks like SPX500_m bulls have regained their mojo.

Taking a quick look at the technical picture, prices are firmly bullish on the daily charts. However, the Relative Strength Index (RSI) has hit 70, signalling that prices are heavily overbought.

With all the above said, this could be a wild week for the SPX500_m due to technical and fundamental forces. Given how prices are trading at record highs, the key question is whether bulls can maintain their hunger for more gains.

Here are 3 key factors that could influence the index:

  1. US earnings season

US earnings season is in full swing with some of the largest companies in the world publishing their quarterly results.

The likes of Netflix, Tesla, Intel, and Visa among other companies listed in the S&P500 will be under the spotlight over the next few days. Both Netflix and Tesla are expected to report record quarterly revenues which could provide fresh support to the index. Intel is forecast to post its first revenue and profit growth in almost two years while Visa’s revenue could be supported by a better-than-expected holiday season.

  • The SPX500_m could push higher if overall earnings exceed market expectations.
  • If earnings disappoint, the SPX500_m could trade lower.

  1. Key US data

The string of incoming key US data may influence expectations around Fed rate cuts – ultimately impacting the SPX500_m which has a handful of tech stocks.

All eyes will be on the Q4 GDP figures, PMIs, and latest PCE report for fresh insight into the health of the largest economy in the world. The US economy is expected to have expanded by 1.9% in Q4 while the Core Personal Consumption Expenditure is forecast to cool 3% in December vs 3.2% in the prior month. Given the market sensitivity to Fed cut expectations, the US data could translate to increased market volatility this week.

  • Should overall US economic data fuel speculation around Fed rate cuts, this could push the SPX500_m higher.
  • A set of strong reports and hotter-than-expected inflation figures may dampen hopes on early Fed rate cuts, dragging the SPX500_m lower.

  1. Technical forces

The SPX500_m is firmly bullish on the daily charts as there have been consistently higher highs and higher lows. Prices are trading above the 50, 100, and 200-day SMA while the MACD trades above zero. Although bulls are in a position of power, the RSI signals that prices are heavily overbought – suggesting a potential throwback down the road.

  • The current upside momentum could take prices towards the next round psychological level at 4900.
  • Should prices slip back below the 4798 dynamic support, this could open a path back towards 4700.

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Financial News Stock Market News
← Previous Page
Next Page →