Tag: S&P500

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Forex Market Analysis

Weekly: Trade Tensions Continue; Italy “Crisis”; No Brexit Deal; FED to Raise Rates

 

NEWS COMMENTARY

US

Bets on Fed fund futures suggest that traders have already priced in the near-certainty of the next rate hike to occur this coming week. Yet the dollar reversed course, after last week posting the second trough in a descending peak-trough succession.

Also in the U.S., traders will get the opportunity to react to the latest data on consumer confidence, durable goods and gross domestic product.

OIL

A steady rise in U.S. oil output will gather pace in the next five years, OPEC said on Sunday, predicting that demand for the producer group’s crude will decline despite a growing appetite for energy fed by global economic expansion.

“Declining demand for OPEC crude is a result of strong non-OPEC supply in the 2017–2023 period, most notably from U.S. tight oil,” the Organization of the Petroleum Exporting Countries said in its long-term world oil outlook.

“The U.S. remains by far the most important source of medium-term supply growth, contributing … two-thirds of new supply, driven by surging tight oil output,” it said

 

EUR & GBP

The near term drag for the  single currency continues to be around the Italian debt. Recently, on August 31 to be more precise, the 2-year yield gilt on Italian bonds was as high as 1.465%, before plummeting to 0.63% after the presentation of the Italian budget prospect. It’s of no coincidence that the Euro rally in September coincided with a reduction of perceived short-term sovereign credit risk around Italy. If concerns around Italy are going to impact the Euro, it will be via another rise in short-term yields. We believe that there is no such a thing as a “crisis” surrounding Italian Credit’s situation; however, “news” do have the potential to print short-lived volatility to the markets.

The return of ‘hard Brexit’ fears resulting from the “surprisingly” fractious Salzburg summit obviously hit the British Pound hard at the end of the week. After Teresa May suggested that there would be a no deal Brexit, which of course causes a lot of fear. She stated that there are still a couple of points in the negotiation that divide the UK and the EU, but the spillover impact to the Euro was apparent as well. If odds of a disruptive exit from the EU increase, the uncertainty surrounding the impact to trade could be enough of a reason for the European Central Bank to eventually delay its monetary policy timeline for late next year.

 

AUD & NZD

While an easing of trade tensions between the United States and China may have been the catalysts behind last week’s rally in the Aussie and Kiwi, the possibility of renewed concerns could take the currencies lower early this week. This is because late Friday, China announced it was cancelling its meeting with the U.S., and wouldn’t resume negotiations until after the November U.S. mid-term elections.

The Australian Dollar, a proxy of China-related trades as well as gauge of risk sentiment, climbed to a three-week high last week. It also produced its biggest weekly advance in 14 months. Additionally, S&P Global Ratings revised its outlook on triple-A rated Australia to stable from negative on Friday, providing the Aussie with a further lift.

In its monetary policy minutes, the Reserve Bank of Australia (RBA) warned on risks to its outlook from U.S.-China trade tensions and weak wages, while reaffirming its next interest rate move would likely be a hike.

The RBA also said “Significant tensions” around trade policy are a “material risk” to the global outlook. Unemployment is expected to decline gradually toward 5 percent and wage growth is expected to increase gradually as spare capacity in the labor market is absorbed.

Although the Fed is widely expected to raise its benchmark interest rate on its next meeting, Australian and New Zealand Dollar traders will be primarily focused on the direction the Fed will chart ahead. Traders essentially want to know how aggressive the Fed will be in increasing rates in the future.

The 25-basis point increase to the federal funds rate is already priced into the market. The hike will push the funds target to 2 percent to 2.25 percent, where it last was more than 10 years ago.

Since the rate hike has already been factored into the dollar and the currencies, traders will be paying more attention to any information that shows how much more monetary tightening will be necessary to keep the economy (and inflation) healthy.

In New Zealand, the focus will be on business confidence and the interest rate and monetary policy decisions by the Reserve Bank of New Zealand (RBNZ). The Reserve Bank is widely expected to leave its benchmark interest rate at 1.75%.

 

 

CHART ANALYSIS

 

 

OIL

Last week price continued its ranging move between support at 66.2-64.15 and resistance at 74.45-72.45. After having breached the ascending trend, price turned back to the support zone with a bounce from an ascending trend as shown on the daily chart below. Price is now “pin bar” retesting this zone, as we expect bullish momentum to build up towards the 72.45-74.45 level.



 

S&P 500

On the daily chart, the price has broken the key resistance level at 2875.58 and stayed above it to reinforce the bullish bias.

However, we should highlight significant reversal signs, including:

1. Elliot’s Wave 5 has formed;
2. AB=CD harmonic pattern in play.
3. A Wedge reversal pattern remains active.
4. RSI Divergence.

Thus, if price breaks through support at 2875.58 we should witness a correction towards 2797.82.



 

AUD/USD

On the daily chart, the Aussie is clearly reflecting a bearish bias as it descends down a channel that started forming since the beginning of this year; reaching support at 0.71 where some clear sign of reversal showed up.

We expect reversal/consolidation to develop further as:

1. Price has bounced from the support zone between 0.71-0.716.
2. An AB=CD harmonic pattern is rather suggestive.
3. A Wedge reversal pattern.
4. RSI divergence.

the price manages to stay above 0.7225,then it has the potential of reaching 0.733 and 0.745



 

USD/CAD

On the daily chart, we observe the Loonie to follow a descending channel since June this year, with a false 2 weeks reversal before continuing its way down.

As we expected before that the price fell further to 1.289 and meet the ascending trend line from March’s Low, coupled with the 200 Exponential Moving Average (EMA)

Now the price located at the key support of 1.289 besides the ascending trend line from the low of 2017. so, any bounce here would expose the price back to 1.312. and any break beneath these levels would continue the bearish bias to 1.272



 

USD/JPY

On the daily chart, as expected, price is moving upwards to the 113 target, leaving 112 as near-term support. We expect an extension towards the 113 area before resumption of the downside towards at least 109,75.



Categories
Forex Market Analysis

Daily: Trade War Fears Fading; Strong Kiwi on NZ GDP Increase; U.K Retail Sales Printing Upward Momentum on the Pound

 

NEWS COMMENTARY

 

 

Markets extended their rally on Thursday as U.S.-China trade war fears were set aside and investors focused on bullish macroeconomic and corporate news.

Global markets appear to be shrugging off concerns over an escalating trade war between the U.S. and China

The British Pound got a strong boost following the surprisingly positive UK monthly retail sales figures, coming in to show 0.3% m/m growth in August as against a contraction of 0.2% anticipated. This coupled with some optimistic Brexit comments by the European Commission President Juncker and Irish Foreign Minister Simon Coveney remained supportive of the strong bid surrounding the cross.

In Europe, attention will be focused on an informal summit of European Union leaders in Austria on Thursday. Brexit and immigration are set to be the main points of discussion. U.K. Prime Minister Theresa May, under pressure at home and abroad to achieve a workable Brexit deal, has called for “goodwill” and flexibility from her EU counterparts. The future of the Irish/Northern Irish border remains a stumbling block in talks.

The New Zealand dollar jumped to three-week highs after strong domestic GDP data showed the country’s economy grew at the fastest pace in two years in the second quarter.

The Swiss National Bank (SNB) is maintaining its expansionary monetary policy, thereby stabilising price developments and supporting economic activity. Interest on sight deposits at the SNB remains at –0.75% and the target range for the three-month Libor is unchanged at between –1.25% and –0.25%. The SNB will remain active in the foreign exchange market as necessary, while taking the overall currency situation into consideration. Since the monetary policy assessment of June 2018, the Swiss franc has appreciated noticeably, against the major currencies as well as against emerging market currencies. The Swiss franc is highly valued, and the situation on the foreign exchange market is still fragile. The negative interest rate and the SNB’s willingness to intervene in the foreign exchange market as necessary remain essential in order to keep the attractiveness of Swiss franc investments low and thus ease pressure on the currency.

 

CHART ANALYSIS

 

OIL

Last week price continued its ranging move between support at 66.2-64.15 and resistance at 74.45-72.45. After having breached the ascending trend, price turned back to the support zone with a bounce from an ascending trend as shown on the daily chart below. Price is now “pin bar” retesting this zone, as we expect bullish momentum to build up towards the 72.45-74.45 level.



S&P 500

On the daily chart, the price has broken the key resistance level at 2875.58 and stayed above it to reinforce the bullish bias.

However, we should highlight significant reversal signs, including:

1. Elliot’s Wave 5 has formed;
2. AB=CD harmonic pattern in play.
3. A Wedge reversal pattern remains active.
4. RSI Divergence.

Thus, if price breaks through support at 2875.58 we should witness a correction towards 2797.82.



AUD/USD

On the daily chart, the Aussie is clearly reflecting a bearish bias as it descends down a channel that started forming since the beginning of this year; reaching support at 0.71 where some clear sign of reversal showed up.

We expect reversal/consolidation to develop further as:

1. Price has bounced from the support zone between 0.71-0.716.
2. An AB=CD harmonic pattern is rather suggestive.
3. A Wedge reversal pattern.
4. RSI divergence.

the price manages to stay above 0.7225,then it has the potential of reaching 0.733 and 0.745



USD/CAD

On the daily chart, we observe the Loonie to follow a descending channel since June this year, with a false 2 weeks reversal before continuing its way down.

We expect price to fall further to 1.289 and meet the ascending trend line from March’s Low, coupled with the 200 Exponential Moving Average (EMA)



USD/CHF

On the 4H chart, price is moving in a broadening wedge while breaking through the continuous Rectangle pattern at 0.9652. A correction has been already made to this level at the descending trend of the wedge. so, any reverse will take the price back to 0.956



USD/JPY

On the daily chart, price is moving upwards to the 113 target, leaving 112 as near-term support. We expect an extension towards the 113 area before resumption of the downside towards at least 109,75.



 

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Forex Market Analysis

Daily -UK CPI Gives Sterling (short-lived?) Upward Momentum; NAFTA Talks Continues; European Summit Ahead

 

NEWS COMMENTARY

Trade war

Investors continue expectant on new developments over the U.S.-China trade war after the Trump administration said on Monday it will implement new tariffs of 10% on $200 billion of Chinese products on Sept. 24, with the tariffs to go up to 25% in January. China retaliated by threatening to implement duties on about $60 billion worth U.S. goods, as previously announced; which is lower than expected. Unless new information hits the wires, markets seem to have fully priced in the current status on the Trade War theme.

Housing Data Ahead

The focus on Wednesday’s economic calendar will be on home construction coming 12:30 GMT.

Housing starts are expected to  risen by 5.8% to an annual rate of 1.235 million in August.

OIL

Oil traded slightly lower on Wednesday as stockpile data from the American Petroleum Institute showed a 1.25 million barrels increase in weekly crude inventories.

Traders are waiting for the weekly government data from the Energy Information Administration with expectations for a draw of 2.741 million barrels.

UK CPI

Meanwhile sterling increased after the consumer price index came in 2.7% higher than expected 2.4%, with core CPI 2.1% v. 1.8% forecasted,  which is regarded by market participants as yet another reason for the BoE and its MPC peers to to expand their monetary policy normalization plan further with a new rate increase anytime soon.

Later on, according to Times, UK Prime Minister Theresa May is set to reject the improved offer by Chief EU Negotiator Michel Barnier for a solution on the Irish border.  Maintaining an open border between the Republic of Ireland and Northern Ireland (part of the UK) has been one of the thorniest issues in the Brexit negotiations. This could make the recent Sterling rally fade.

The report from the times comes a short time before European leaders including May convene for an unofficial summit in Salzburg, Austria, with Brexit being high on the agenda.

NAFTA

U.S. Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland will meet later today in Washington as the two countries remain at odds over some key details on a deal. President Donald Trump has warned he would impose tariffs on Canada in the event of no deal being reached, while Congress remains unwilling to approve a Mexico-only pact.

 

 

CHART ANALYSIS

OIL

Last week price continued its ranging move between support at 66.2-64.15 and resistance at 74.45-72.45. After having breached the ascending trend, price turned back to the support zone with a bounce from an ascending trend as shown on the daily chart below. Price is now “pin bar” retesting this zone, as we expect bullish momentum to build up towards the 72.45-74.45 level.



S&P 500

On the daily chart, the price has broken the key resistance level at 2875.58 and stayed above it to reinforce the bullish bias.

However, we should highlight significant reversal signs, including:

1. Elliot’s Wave 5 has formed;
2. AB=CD harmonic pattern in play.
3. A Wedge reversal pattern remains active.
4. RSI Divergence.

Thus, if price breaks through support at 2875.58 we should witness a correction towards 2797.82.



AUD/USD

On the daily chart, the Aussie is clearly reflecting a bearish bias as it descends down a channel that started forming since the beginning of this year; reaching support at 0.71 where some clear sign of reversal showed up.

We expect reversal/consolidation to develop further as:

1. Price has bounced from the support zone between 0.71-0.716.
2. An AB=CD harmonic pattern is rather suggestive.
3. A Wedge reversal pattern.
4. RSI divergence.

the price manages to stay above 0.7225,then it has the potential of reaching 0.733 and 0.745



USD/CAD

On the daily chart, we observe the Loonie to follow a descending channel since June this year, with a false 2 weeks reversal before continuing its way down.

We expect price to fall further to 1.289 and meet the ascending trend line from March’s Low, coupled with the 200 Exponential Moving Average (EMA)


USD/CHF

On the 4H chart, price is moving in a broadening wedge while breaking through the continuous Rectangle pattern at 0.9652. A correction has been already made to this level at the descending trend of the wedge. so, any reverse will take the price back to 0.956



USD/JPY

On the daily chart, price is moving upwards to the 113 target, leaving 112 as near-term support. We expect an extension towards the 113 area before resumption of the downside towards at least 109,75.



 

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Forex Market Analysis

Daily: Trade was Escalates; RBA Gives the Australian Dollar Upwards Momentum

NEWS COMMENTARY

 

 

U.S. President Donald Trump announced on Monday that the U.S. will put 10% tariffs on $200 billion in Chinese goods, which will go up to 25% at the end of the year.

Trump added that “if China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports.” “We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly,” he said in the statement. “But, so far, China has been unwilling to change its practices.”

 

China said on Tuesday that it had no choice but to retaliate against new U.S. trade tariffs, raising the risk that U.S. President Donald Trump could soon impose duties on virtually all of the Chinese goods that America buys. The Chinese commerce ministry’s statement came hours after Trump said he was imposing 10 percent tariffs on about $200 billion worth of imports from China, and threatened duties on about $267 billion more if China retaliated against the U.S. action.

The brief statement gave no details on China’s plans, but Foreign Ministry spokesman Geng Shuang told a news briefing later that the U.S. steps have brought “new uncertainty” to talks between the two countries. “China has always emphasized that the only correct way to resolve the China-U.S. trade issue is via talks and consultations held on an equal, sincere and mutually respectful basis. But at this time, everything the United States does not give the impression of sincerity or goodwill,” he added. Geng said he would not comment on “hypotheticals” such as what measures Beijing might consider apart from tariffs on U.S. products, saying only that details would be released at the appropriate time.

The Aussie rise in today’s session was caused by the upbeat approach used by the RBA in the Minutes published earlier today, i.e., while there was no strong case for near-term adjustment in policy, the next move in the lending rate is more likely to be an increase. Furthermore, despite of persistent risks related to abroad uncertainty and the slow recovery in labor wages, the bank explicitly vowed for a stronger AUD as supportive of domestic growth. However, upward momentum is likely to be temporary due to another key economic indicator, the CPI, which print was also released at -0.6% v.-0.7% and 2.0% prior; which lessens pressure on the RBA to push for a faster monetary policy normalization.

CHART ANALYSIS

 

OIL

Last week, price continued its ranging move between support at 66.2-64.15 and resistance at 74.45-72.45. After having breached the ascending trend, price turned back to the support zone with a bounce from an ascending trend as shown on the daily chart below. Price is now “pin bar” retesting this zone, as we expect bullish momentum to build up towards the 72.45-74.45 level.



 

S&P 500

On the daily chart, the price has broken the key resistance level at 2875.58 and stayed above it to reinforce the bullish bias.

However, we should highlight significant reversal signs, including:

1. Elliot’s Wave 5 has formed;
2. AB=CD harmonic pattern in play.
3. A Wedge reversal pattern remains active.
4. RSI Divergence.

Thus, if price breaks through support at 2875.58 we should witness a correction towards 2797.82.



 

AUD/USD

On the daily chart, the Aussie is clearly reflecting a bearish bias as it descends down a channel that started forming since the beginning of this year; reaching support at 0.71 where some clear sign of reversal showed up.

We expect reversal/consolidation to develop further as:

1. Price has bounced from the support zone between 0.71-0.716.
2. An AB=CD harmonic pattern is rather suggestive.
3. A Wedge reversal pattern.
4. RSI divergence.

Consequently, if the price manages to stay above 0.7225, it has the potential of reaching 0.733 and 0.745.



 

USD/CAD

On the daily chart, we observe the Loonie to follow a descending channel since June this year, with a false 2 weeks reversal before continuing its way down.

We expect price to fall further to 1.289 and meet the ascending trend line from March’s Low, coupled with the 200 Exponential Moving Average (EMA)



 

USD/CHF

On the 4H chart, price is moving in a broadening wedge while breaking through the continuous Rectangle pattern at 0.9652. A correction may occur at this level again before digging down to the next support 0.956



 

USD/JPY

On the daily chart, price is moving upwards to the 113 target, leaving 112 as near-term support. We expect an extension towards the 113 area before resumption of the downside towards at least 109,75.



 

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Forex Market Analysis

July 2 – Daily Update on S&P500 & Gold – NFP Week Begins

On the first day of the 3rd quarter, the financial markets remained heavily volatile in the wake of trade war sentiments. For instance, gold slid more than 1% to its

On the first day of the 3rd quarter, the financial markets remained heavily volatile in the wake of trade war sentiments. For instance, gold slid more than 1% to its

On the first day of the 3rd quarter, the financial markets remained heavily volatile in the wake of trade war sentiments. For instance, gold slid more than 1% to its lowest ahead of the U.S. holiday, as the dollar recovered. Whereas, the indices inducing SPX, DAX and Nikkei plunged due to ongoing U.S.-European Union trade war. In addition to this, the July 6 trade war tensions have helped the risk sentiment to stay off.  

 

Later this week, we have another series of high impact economic events coming out of the market. Let’s take a quick look.

 

Top Economic Events to Trade

AUD – Building Approvals m/m – 1:30 (GMT)

AUD – RBA Rate Statement – 4:30 (GMT)

AUD – Cash Rate – 4:30 (GMT)

GBP – Construction PMI – 8:30 (GMT)

 

Gold – XAU/USD – Daily Outlook

The precious metal gold is trading at 1242, down 11.60 points and 0.92% on Monday. One of the main reasons behind the bearish trend is the stronger dollar.

 

The greenback continued its ascent as traders boosted their bets that the U.S. administration would prove better in a trade war as compared to some of its trading rivals. The U.S. tariffs on $34 billion worth of Chinese imported goods are due for July 6.


 

Support     Resistance 

1240.83    1247.17

1238.87    1249.13

1235.7    1252.3

Key Trading Level:    1244

         

SPX  – S&P500-  Technical Outlook

SPX is trading bullish at 2727, up 5.75 points and 0.21%. On the 4- hour chart, the bullish trendline is extending a support near 2679. While the resistance predominates at 2732 and 2745 today. The main trend is up as per the daily swing chart. But, momentum is trending lower. A trade through 2679.25 will convert the main trend (bullish) into the bearish bias.

 

Overall, the main trading range of SPX is 2595 to 2796. The index is currently testing the upper or 50% level of this range at 2795.75.



 

Support     Resistance 

2705.72    2719.32

2701.52    2723.52

2694.72    2730.32

Key Trading Level:    2712.52
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Forex Market Analysis

June 29 – Technical Update on S&P500 & Gold – U.S. GDP Disappoints

The financial markets remained heavily volatile due to a series of market-moving economic events like the German CPI and U.S. Final GDP.  Well, the game isn’t over yet. We have

The financial markets remained heavily volatile due to a series of market-moving economic events like the German CPI and U.S. Final GDP.  Well, the game isn’t over yet. We have

The financial markets remained heavily volatile due to a series of market-moving economic events like the German CPI and U.S. Final GDP.  Well, the game isn’t over yet. We have another series of high impact economic events coming out of the market on Friday. Let’s take a quick look.

 

Top Economic Events to Trade

  • EUR – German Retail Sales m/m – 6:00 (GMT)
  • GBP – Current Account – 8:30 (GMT)
  • GBP – Final GDP q/q – 8:30 (GMT)
  • EUR – CPI Flash Estimate y/y – 9:00 (GMT)    
  • CAD – GDP m/m – 12:30 (GMT)
  • USD –  Chicago PMI – 13:45 (GMT)

 

Although there are lot more economic events due to be released, these are the most important ones and may help you capture a nice amount of pips.     

 

Gold – XAU/USD – Daily Outlook

On Thursday, gold plunged to its weakest level in six months to trade at $1,247. Most of the selling came in response to escalating pressure from the trade war and the sentiments of higher U.S. interest rates which continues to weigh on gold. Nevertheless, we can expect a modest reversal in the near term. Price action is expected to retrace the decays back to 1263, the same level which earlier served as support.



 

Support     Resistance 

1252.5    1259.76

1250.26    1262

1246.63    1265.63

Key Trading Level:    1256.13

              

 

SPX – S&P 500 – Technical Outlook

SPX is trading bullish near 2718 after gaining support above 2694. On the 4- hour chart, the upward trendline is also extending support near 2679. While the resistance prevails at 2732 and 2745 today, the main trend is up as per the daily swing chart, but, momentum is trending lower. A trade through 2679.25 will convert the main trend (bullish) into the bearish bias.



 

Overall, the main trading range of SPX is 2595 to 2796. The index is currently testing the upper or 50% level of this range at 2795.75.

 

Support     Resistance 

2697.19    2732.87

2686.16    2743.9

2668.32    2761.74

Key Trading Level:    2715.03

 

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Forex Market Analysis

June 28 – Technical Update on S&P500 & Gold – Trade War Tension Eased

It was quite a busy day with series of economic events from global economies. The greenback advanced as trade-related tensions eased after the U.S. administration relaxed its approach to Chinese

It was quite a busy day with series of economic events from global economies. The greenback advanced as trade-related tensions eased after the U.S. administration relaxed its approach to Chinese

It was quite a busy day with series of economic events from global economies. The greenback advanced as trade-related tensions eased after the U.S. administration relaxed its approach to Chinese investment. Most of its buying came on the Euro and the Swiss Franc. Whereas, gold prices hovered on top of 6 months lows as traders continuing to shun the yellow-metal despite signs of a reversal in risk sentiment. The robust greenback continues to keep a lid on the precious metals bullish trend.

 

S&P 500 – Daily Outlook

The New York stock market index  SPX is trading at 2706, down -22.75 points and -0.82%. S&P500 is facing a strong support near 2700, a double bottom level. The violation of 2700 can lead SPX towards 2679. The moving averages are suggesting a bearish bias of investors. The RSI and Stochastics have entered the oversold zone. Let’s see if SPX gets a chance to pull back above 2700.



 

Support     Resistance 

2706        2735.56

2696.86     2744.7

2682.08     2759.48

Key Trading Level:    2720.78

 

Gold – XAU/USD – Daily Outlook

 

Gold traded in a tight range of 1252 – 1261, troubled to manoeuvre off session lows because the greenback remained supported despite a small reversal in intraday risk sentiment, helping safe-haven currencies trim their losses against the dollar.

 

Technical indicators signal gold will continue to drop. For instance, gold has already violated the 1252 support level which is likely to work as a resistance now. Moreover, the moving averages also suggest a bearish bias of traders.



Support     Resistance 

1256.9    1266.84

1253.84    1269.9

1248.87    1274.87

Key Trading Level:    1261.87

 

Investors are advised to monitor the U.S. Final GDP q/q in order to capture further movements in the dollar index, gold, and the U.S. stocks.

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Forex Market Analysis

June 25 – Quick Technical Update on S&P500 & Gold

The U.S. stocks sank during a broad sell-off on Monday, with the S&P 500 dropping over 1.5 %. In particular, the technology companies bearing the strength of an escalating

The U.S. stocks sank during a broad sell-off on Monday, with the S&P 500 dropping over 1.5 %. In particular, the technology companies bearing the strength of an escalating

The U.S. stocks sank during a broad sell-off on Monday, with the S&P 500 dropping over 1.5 %. In particular, the technology companies bearing the strength of an escalating trade dispute between the U.S.  and different leading economies.

 

The U.S. Treasury was drafting curbs that may block companies with a minimum of 25% Chinese possession from purchasing  U.S. technology companies. In response, the dollar plunged to a two-week low against the yen as a rise in the global trade worries depressed investor risk appetites and turned down U.S. yields.

 

S&P 500 – Daily Outlook

The U.S. stock market index SPX is trading at 2709.02, down 45.25 points and 1.67%. S&P500 is facing a strong support near 2700 after falling 1.59% today. We can expect a pullback above 2700, whereas the violation of this level will lead SPX -1.66% towards 2685.



S&P500- Intraday Support & Resistance Levels 

Support     Resistance 

2745.54      2769.84

2738.04      2777.34

2725.89      2789.49

Key Trading Level:    2757.69

 

Gold – XAU/USD – Daily Outlook

The precious metal gold is trading bearish at 1267.57, down -0.17% on Monday. Technically, Gold is trading sideways with a lower range of 1264 – 1271. The breakout of this range will define the further trend of gold. The breakout above 1271 can lead gold prices towards 1275 while a breakout below 1265 will open further room for buying until 1261.



Gold- Intraday Support & Resistance Levels 

Support     Resistance 

1271.5     1273.64

1270.84    1274.3

1269.77    1275.37

Key Trading Level:    1272.57

That’s pretty much it for now. Investors are advised to monitor the U.S. CB Consumer Confidence in order to capture further movements in the dollar index, gold, and the U.S. stocks.

 

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Forex Market Analysis

June 11 – U.S. Indices Soars As Risk-on Sentiment Heads Up

On the first trading day of the fresh week, most of the markets opened with huge gaps on the back of the uncertainty driven by the G7 meeting. However, the

On the first trading day of the fresh week, most of the markets opened with huge gaps on the back of the uncertainty driven by the G7 meeting. However, the

On the first trading day of the fresh week, most of the markets opened with huge gaps on the back of the uncertainty driven by the G7 meeting. However, the markets soon recovered despite unease after U.S. President Donald Trump inflated the threat of higher import tariffs at a rough G7 meeting. Did you miss an opportunity? No worries the game has just begun…

S&P 500 – Daily Outlook

The U.S. stock market index is trading bullish at 2,791.25, up +8.75 points and +0.31%. The S&P500 has come out of the asymmetric triangle pattern at $2,712, indicating the bull bias of investors. At the moment, the SPX is likely to face resistance near the $2,795 level.



Support    Resistance

2767.96    2780.04
2764.24    2783.76
2758.2      2789.8
Key Trading Level: 2774

 

Nikkei – Daily Outlook

Japan’s Nikkei soared more than 375 points to trade at 22,975 on Monday. Most of the bullish trend began in response to the rise in risk appetite. The risk on sentiment kicked in as the investors are very optimistic about the U.S.- North Korea meeting tomorrow.

Technically, the bearish trendline is extending a solid resistance to Nikkei at $22850. At the same time, the RSI has entered the oversold zone which is signifying the chances of a bearish reversal.



 

Support    Resistance
22184.88   22303.38
22148.28   22339.98
22089.03  22399.23
Key Trading Level: 22244.13

That’s pretty much it for now. I hope you are ready for some action tomorrow. We’ve got to deal with the U.S.-North Korea updates and the markets can remain volatile throughout the session.

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Forex Market Analysis

April 23 – S&P500 & Nikkei Dips on Rising U.S Treasury Yields

 

 
S&P 500 – Technical Outlook
At the moment, the US stock market index SPX is trading right above a strong support level of 2,660, and a

 

 
S&P 500 – Technical Outlook
At the moment, the US stock market index SPX is trading right above a strong support level of 2,660, and a

 

 

S&P 500 – Technical Outlook

At the moment, the US stock market index SPX is trading right above a strong support level of 2,660, and a break below this level can drive more bearish in the market until 2,640. Whereas, on the upper side, the index is likely to face a resistance near 2,717.

Speaking of leading indicators, the RSI and Stochastics are holding below 20, signifying a potential for a retracement. However, the SPX seems to continue trading bearish below 2674 today.

Nikkei – Technical Outlook

During the Asian session, the Japanese stock market index Nikkei fell after the heavyweight stocks such as SoftBank and Terumo lost ground, compensating gains in financials, which roused after U.S. yields rose. Moreover, the financial stocks, that trades in the foreign bonds, soared dramatically following a rise in the U.S. yields.

Technically speaking, the NKY is trading in an upward channel which is supporting it near 21,975. The 50- periods EMA is suggesting a bullish trend whereas, the RSI is massively oversold. Nikkei is likely to stay bullish above 22,166 for a target of 22,240 and 22,351.

Good luck & have an awesome day!

©Forex.Academy

Categories
Forex Market Analysis

market overview for US index & pairs

News

No need to say that that the hour talk now is about hitting Syria by US, France, & Great Britain

Of course, there’s a lot of action going on as U.S. tells UN it’s ready to hit Assad again, if necessary.

Also U.S. Eyes Russia Sanctions for Syria, U.K. Sees One-Time Hit.

UN Ambassador Nikki Haley, speaking Sunday on CBS’s “Face the Nation,” said U.S. Treasury Secretary Steven Mnuchin will announce new sanctions Monday that “go directly to any sort of companies that were dealing with equipment” related to Syrian leader Bashar al-Assad and his chemical weapons.

Oil prices, which already are above their three-year highs, may be about to jump further.

As Brent oil could spike to $80 a barrel if the U.S. and European Union reimpose sanctions on Iran, and as Western powers expand the scope of the Syrian civil war.

 

US Index

S&P500 behaviour has been intensively bearish on Daily frame, with a sideways movement during the last ten weeks.

There are perfectly well-noticed signs indicating that prices will be up active again.

Reversing from the support level at 88.35, bouncing from the uptrend’s  2018 low, and forming a double bottom, which is a reversal pattern, to give shape to a harmonic pattern (crab).

The price is facing a strong resistance test at the down trend lin from the high of May 2017, also with the red resistance zone (90.45-91.65).

If the price successfully breaks these levels, we can see it climbing up to its next zone (92.55-93.9). as it’s 61.8% & 78.6% Fibonacci, B harmonic level, and turn down from the high of 2017.

 EUR/USD

On 1H frame, we can see that the price broke the uptrend line provided by reversing from resistance zone (1.239-1.2425). The most important issue is that it approached the downtrend line traced from 2008 high.

The price draws a triangle that, if broken down, we can easily test the levels 1.23 then 1.226

 

 

GBP/USD

On 1H frame, the pair touched the resistance 1.428, with a megaphone pattern.

The price is expected to visit the 1.42 level to retest it. In case it breaks it, we can see it touching 1.415 and then 1.409

 

NZD/USD

The pair has faced its resistance level at 0.939 by breaking the uptrend line and rising reversal wedge. It’s supposed to retest the uptrend from the low of April at 0.732 then 0.727

Categories
Forex Market Analysis

Tit-for-tat weighs heavy on the markets

A difficult week
It has been another difficult week in the markets, and this has been primarily down to the difficulty in assessing what the trade standoff between the US

A difficult week
It has been another difficult week in the markets, and this has been primarily down to the difficulty in assessing what the trade standoff between the US

A difficult week

It has been another difficult week in the markets, and this has been primarily down to the difficulty in assessing what the trade standoff between the US and China mean for the markets. The week started off with the market taking fright as additional tariff threats were voiced by the US, leading to a sharp sell-off in equity markets. However, much of that rhetoric was rowed back on leading to a significant bounce back actually making pre-fright highs before the SP500 started to sell off again.  This simply means that there is no overriding directional bias in either direction making this market very choppy and difficult to trade.

 

Gold

As a result, the Gold market responded by initially strengthening due to the fear related to the equity story but then reversed those initial gains and now trades right in the middle of significant support and resistance levels which can be clearly seen from the chart below, these significant levels are $1,357 and $1,310, so all eyes will be on these levels over the coming days and weeks to see what is next for the yellow metal.

Oil

The Crude-Oil market responded to these major global developments by initially selling off but then after seeing a bit of erratic price action we continued to see a continuation to the down side, closing the week below the $62 level.  However, from a technical perspective, the situation regarding the crude oil market is an interesting one.  We can see from the chart below that we have been in a consistent up trend since mid-June 2017, reaching a high of $66 towards the end of Jan 2018.  Since this time, this market has clearly struggled to break the $66, creating a double top end of March.  So over the last two weeks, this market has bounced back to its lower trend line.  The next few days will be interesting to see whether the support level holds and we see another attack at the $66 level or will this support level break, and we see prices pushing down to a potential structural failure below the $60 level which would put major pressure on this market to the downside.  At this crucial point, it’s hard to see whether buyers or sellers will win out.

 

So just to recap, over the course of the last 5 trading days, US officials made very strong statements about the need for trade tariffs to be introduced only for US officials to then row back on some of its rhetoric, as a result, market nerves were calmed, and Monday’s fear related move was subsequently reversed. The S&P rallied and then retraced, and the gold and crude oil markets came off.

US Dollar

The USD, however, has been impacted by recent events but to a lesser degree. As you can see, from the chart below, the dollar index has been in a period of consolidation since mid-Jan.  These, unfortunately, for the time being, are the market conditions in which we are trading the USD. The two major prices to keep an eye out for over the coming days and weeks is the 99.880 to the up side and 88.416 to the down side.  A move in either direction would be significant for this market.

 

EURUSD

EURUSD continues to trade within a range. Today’s weaker NFP numbers perhaps suggest that the pair might move higher next week given the fact too that from a technical perspective, the pair is trading closer to the lower end of its range as can be seen from the chart below.

 

USDJPY

USDJPY has been firmer this week, however, watch the key pivotal resistance area next week around 108.20. This was the breach that confirmed a bearish range breakout back in February.

 

 

The US Dollar paired earlier gains during Friday’s London session after data showed the US economy adding new jobs at less than half the pace economists had expected for the March month. The important Non-Farm Payrolls figure grew by just 103,000 during the recent month, which is down from 313,000 in February and far below the economist consensus for a reading of 188,000.

Separately, the unemployment rate held steady at 4.1% for the month when markets had been looking for a 10-basis point fall to 4.0%. Household incomes grew by 0.3% during the recent month, which is up from the 0.1% seen in February and in line with the consensus forecast of economists.

 

Price action largely noted limited volume in the week leading up the non-farm payroll figure but saw initial volatile swings before the USD began to weaken over the course of Friday afternoon and evening.

Trade of the week – Long GBP/USD

With the US caught up with trade issues with China causing confusion among other countries and added uncertainty across the US Dollar Forex Pairs, perhaps the best technical trade may look GBP support with better than forecast UK economic data.

With the GBP showing strength over the USD in April for the last 13 consecutive years running, speculators are now looking at this trend for the best potential buying opportunity. With good news for the pound with UK PMI slightly higher than expectations, Friday trading is seeing the pound trade up with a touch and bounce from the greater bullish trendline of 2017. The discussion now seems to favour the pound is seemingly defying the expectations of Brexit doom.