2023-10-13 04:15

S AND P 500 PRICE FORECAST: US CPI Weighs on Equities as the SP500 Grapples with a Death Cross Formation. US Long Term Yields Rise Supporting the Fed Narrative. US Bank Earning in Focus with JPMorgan Chase, Wells Fargo and Citigroup All Reporting Tomorrow. To Learn More About Price Action, Chart Patterns and Moving Averages, Check out the DailyFX Education Section. US Indices have run into trouble thanks to a combination of key resistance levels and a sticky Inflation print. The inflation data actually came in rather mixed in my opinion with the headline inflation number remaining at 3.7% but above estimates of 3.6%. Core inflation YoY however fell to a 24-month low of 4.1%. POST US CPI OUTLOOK AND BANK EARNINGS Despite the mixed nature of the US inflation data the US Dollar received a strong bid today as well as a sharp rise in long term US treasury yields. Now looking at the reaction and what I think has been the driving force of the rise in the US Dollar as well as the selloff in US equities comes back to Fed policymaker comments this week. A dovish tone was set for the majority of the week which kept the US Dollar on the back foot. Comments from Rafael Bostic yesterday however may explain some of the moves today. Bostic said the stalling inflation could force the Federal Reserve to “do more”. Today's print from a headline perspective can definitely be called sticky while with long term yield rates rising aggressively, even if the Fed do not hike rates again, today’s data still supports the narrative of “higher rates for longer”. US 2Y and 10Y Yield Chart Source: TradingView, Created by Zain Vawda Another explanation of the selloff in the S&P 500 could be down to some profit taking from the recent upside rally ahead of US bank earning due tomorrow. This however doesn’t seem likely as Bank earnings are expected to be positive owing to the higher rate environment which has allowed banks to rake in a substantial amount of revenue over the last 18 months. Either way markets will surely be keeping a close eye tomorrow on earnings season, with big banks including JPMorgan Chase, Wells Fargo and Citigroup reporting their quarterly numbers before the bell on Friday. We also have Michigan Consumer Sentiment data (Prel) due for release and we will hear more comments from Fed Policymaker Harker tomorrow as well. ECONOMIC CALENDAR For all market-moving economic releases and events, see theDailyFX Calendar S&P 500 TECHNICAL OUTLOOK Form a technical perspective, the S&P has bounced off a key area of support before rallying some 200 points toward the key resistance level resting at the 4400 mark. A further challenge for the S&P is the completion of a death cross pattern which would hint at further downside ahead as the 50-day MA crossed below the 100-day MA. The price remains compressed between the moving averages as they are spread within a 180-point range. At the time of writing the S&P has put in a slight bounce of the 20-day MA and remains on course for a bearish close with losses currently at 0.95% on the day. Key Levels to Keep an Eye On: Support levels: 4333 4280 4200 Resistance levels: 4400 4411 4459 S&P 500 October 12, 2023 Source: TradingView, Chart Prepared by Zain Vawda IG CLIENT SENTIMENT Taking a quick look at the IG Client Sentiment, Retail Traders have shifted to a more dovish stance with 50% of retail traders now holding long positions compared to 57% a day ago. https://www.dailyfx.com/news/s-p-500-slides-as-us-yields-rise-post-cpi-more-downside-ahead-20231012.html

2023-10-13 04:14

The U.S. dollar, as measured by the DXY, embarked on a furious rally on Thursday after hotter-than-expected U.S. September inflation data sent Treasury yields sharply higher and increased the likelihood that the Fed will deliver another quarter-point rate hike at its December meeting. In this context, the Loonie (CAD) and the Aussie (AUD) suffered a major setback and took a beating against the greenback, with both currencies nearing their weakest levels in several months. Detailed technical analyses for AUD/USD and USD/CAD are provided below in consideration of these developments. USD/CAD TECHNICAL ANALYSIS USD/CAD surged on Thursday, blasting past a key technical ceiling at 1.3640 and pushing towards the 1.3700 handle, another important level that could cap further advances. With a strong bullish momentum firmly in place for USD/CAD and prices following a well-defined uptrend, it may pose a considerable challenge for sellers to regain control of the market, suggesting that the path of least resistance may be higher. In terms of possible scenarios, if the pair manages to clear the 1.3700 mark decisively, the bears may throw in the towel, setting the stage to move towards the October’s swing high, which hovers just below the 1.3800 threshold. On further strength, the focus shifts to the 2023 peak. Conversely, if prices turn lower from their current position and begin to retreat unexpectedly, initial support is seen at 1.3640, but further losses could be in store on a push below this area, with the next downside target located at 1.3570. USD/CAD TECHNICAL CHART USD/CAD Chart Created Using TradingView AUD/USD TECHNICAL ANALYSIS Everything was going well for AUD/USD until earlier this week. The pair had bounced more than 2% from multi-month lows and was on a steady recovery trajectory, but then its rebound abruptly hit a roadblock when prices collided with trendline resistance and the 50-day simple moving average, situated just above the 0.6400 handle. Right after testing the 0.6400 area, sellers made a strong comeback, initiating a robust bearish reversal that pushed prices below support at 0.6350. With the market firmly in the grip of the bears, it may only be a matter of time before a move toward the 2023 lows unfolds. AUD/USD could find a foothold in this area on a retest, but in the event of a breakdown, we could see a pullback towards the 2022 lows. On the flip side, if sentiment improves and the Australian dollar accelerates higher, initial resistance is located at 0.6350. Clearing this hurdle may breathe fresh life into the upward impetus, potentially opening the path for an advance toward trendline resistance, currently positioned close to the psychological 0.6400 level. With continued strength, the prospect of reaching 0.6460 is worth considering. AUD/USD TECHNICAL CHART AUD/USD Technical Chart Prepared Using TradingView https://www.dailyfx.com/news/forex-usd-dollar-technical-setups-aud-usd-plummets-while-usd-cad-skyrockets-20231012.html

2023-10-13 04:12

EURO, EUR/USD, TECHNICAL ANALYSIS, RETAIL TRADER POSITIONING – IGCS UPDATE Euro plunges most since early October on US CPI data In response, retail traders boosted upside EUR/USD bets Prices also rejected the key falling trendline from July The Euro plunged over 0.8 percent against the US Dollar on Thursday after a higher-than-expected US CPI report boosted Treasury yields. That was the worst single-day drop since early October. EUR/USD’s drop pushed retail traders to boost upside exposure, which can be seen by taking a look at IG Client Sentiment (IGCS). The latter tends to function as a contrarian indicator. With that in mind, will the Euro continue lower from here? EUR/USD Sentiment Outlook – Bearish The IGCS gauge shows that about 69% of retail traders are net-long EUR/USD. Since most of them remain biased higher, this continues to hint that prices may fall down the road. This is as upside bets increased by 10.46% and 5.62% compared to yesterday and last week, respectively. With that in mind, the combination of overall exposure and recent changes offers a stronger bearish contrarian outlook. Euro Daily Chart Focusing on the daily chart below, EUR/USD has turned lower following a rejection of the falling trendline from July. This has reinstated the broader downside focus following cautious gains since the beginning of this month. Now, immediate support is the March low of 1.0516. Below that is the 100% Fibonacci extension level of 1.0436. Breaking lower opens the door to extending the broader downtrend, exposing the 123.6% Fibonacci extension level of 1.0315. On the other hand, a turn higher and push above the falling trendline would open the door to an increasingly bullish outlook. That exposes the 61.8% level of 1.0631. Chart Created in Trading View https://www.dailyfx.com/analysis/euro-plunges-after-us-cpi-data-leaving-eur-usd-at-risk-amid-more-bullish-retail-bets-20231012.html

2023-10-13 04:11

CRUDE OIL, WTI, NATURAL GAS, NG - OUTLOOK: Crude oil has retreated from stiff resistance area. Natural gas appears to be holding gains following the recent bullish break. What is the outlook for crude oil and natural gas and what are the key levels to watch? Crude Oil: Holds below crucial resistance Crude oil has pulled back from a stiff converged barrier, including the Ichimoku cloud on the weekly charts and the October high of 93.00. Oil needs to cross above this resistance to be able to capitalize on the bullish breakout in September above quite a few times tested resistance on a horizontal trendline since the end of 2022, as highlighted in the previous update. See “Crude Oil to Test $100? Natural Gas is not Out of the Woods Yet,” published September 17. Crude Oil Weekly Chart Chart Created by Manish Jaradi Using TradingView The breakout from the multi-month sideway zone triggered a double bottom (the March and May lows), pointing to a potential rise toward 103. The question then comes up – given the sharp retreat in the recent session, is the rebound over? Probably not. There is no doubt that the immediate upward pressure has faded somewhat (given the fall below the resistance-turned-support at about 84.00), it is too early to say that the bullish move is over. Crude Oil Daily Chart Chart Created by Manish Jaradi Using TradingView That’s because crude oil continues to trade above the vital cushion zone, including the 200-day moving average, the 89-day moving average, and the August low of 77.50. A break below 77.00-81.00 is needed to confirm the rebound was over. Natural gas: Stabilizes after breakout Natural gas is holding gains following the break earlier this month above crucial resistance at the March & August highs of 3.03. The cross above has triggered a significant break out from an eight-month-long sideways range, pointing to a rise to around 4.00-4.10, based on the price objective of the pattern. For the first time since the end of 2022, has risen above the 200-day moving average and a decisive break above the 89-day moving average, suggesting that the base building may have taken place. For more details see “Bullish Natural Gas: Base May Have Been Built,” published October 9. Natural Gas Daily Chart Chart Created by Manish Jaradi Using TradingView Natural gas faces immediate resistance at 3.25 (the 23.6% retracement of the November 2022-February 2023 fall, the stronger barrier at 4.20 (the 50% retracement. As highlighted in the previous update, natural gas needs to stay above the August low of 2.40 for the bullish bias to remain intact. Immediate support is at 3.03. https://www.dailyfx.com/news/is-the-rebound-in-crude-oil-over-natural-gas-holds-gains-after-bullish-break-20231013.html

2023-10-11 03:44

NUMBER OF TRADERS NET-SHORT HAS INCREASED BY 31.75% FROM LAST WEEK. Wall Street: Retail trader data shows 48.45% of traders are net-long with the ratio of traders short to long at 1.06 to 1. In fact, traders have remained net-short since Sep 21 when Wall Street traded near 34,068.90, price has moved 0.93% lower since then. The number of traders net-long is 9.95% lower than yesterday and 32.88% lower from last week, while the number of traders net-short is 13.96% higher than yesterday and 31.75% higher from last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests Wall Street prices may continue to rise. Our data shows traders are now net-short Wall Street for the first time since Sep 21, 2023 when Wall Street traded near 34,068.90. Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Wall Street-bullish contrarian trading bias. https://www.dailyfx.com/analysis/WALL-IG-Client-Sentiment-202310101823.html

2023-10-11 03:42

BITCOIN, RIPPLE KEY POINTS: Bitcoin Prices Struggle at 28k Hurdle Once More as Death Cross Pattern Adds to Uncertainty. Ripple Receives Positive News on Multiple Fronts but Still Fell Over 3% on Monday. Further Downside Ahead? Rumours Are that the SEC May Drop the Case Against Ripple Following the Recent Ruling, While the BIS has Added Ripple to its Taskforce for Cross Border Payments. Bitcoin and Ripple have not enjoyed the best of weeks and for once this hasn’t had a lot to do with the Geopolitical situation in the middle east. There have been some developments particularly around ripple which are interesting but not really reflected in the price of XRPUSD as yet. Ripple also has had to deal with the resignation of CFO Kristina Campbell who joined Maven Clinic as its CFO. The move however seems to be a cordial one with as Campbell took to Linkedin to thank the Ripple team for making the past few years memorable. FEDERAL COURT DENIES INTERLOCUTORY APPEAL BY SEC XRP had enjoyed a decent enough Q3 even if it failed to hold onto the gains made post the decision by Judge Torres. A lot of this was down to news that the SEC was to launch an interlocutory appeal, which seemed to have dampened the spirits of XRP bulls. On Monday, October 3 the Federal Court denied the SEC request to certify its interlocutory appeal. Judge Torres stated that to grant the SEC’s request for a certification, she would have to find, among other matters, a controlling question of law for which there was a “substantial ground” for a difference of view. However, this was not the case here, she claimed. However, the decision by Judge Torres has failed to capitalize on the decision with Ripple falling around 3.2% yesterday. This also could have been down to the broader risk-off sentiment which drove markets early on Monday. Another reason why the drop off in XRP is particularly interesting is down to the recent decision by the Bank of International Settlement to add Ripple to its interoperability taskforce. This means that Ripple is now a part of the taskforce established for cross border payments. This should have been a huge positive for the payment service provider but has not yet materialized in the price of XRPUSD. Looking at the crypto fear and greed index and we have seen a recovery over the past month from fear to neutral which is a slight positive for crypto markets as a whole. There is a belief among many in the crypto space that with the ruling last week by Judge Torres the SEC could choose to drop their case. Given the disdain showed toward the crypto industry by the SEC i wouldn’t hold my breath and will rather wait for an official announcement on the matter. TECHNICAL OUTLOOK ON RIPPLE XRP has been on a steady decline since the spike in July after the initial ruling by Judge Torres. This week however has seen break the ascending trendline which had been in play since September 11. A retest of the 0.45 mark appears to be on the cards in the near term while a visit to the key support area around the 0.41 mark also gains traction. A really interesting couple of weeks ahead for Ripple and definitely one I will be keeping a close eye on. XRPUSD Daily Chart, October 10, 2023. Source: TradingView, chart prepared by Zain Vawda TECHNICAL OUTLOOK ON BTCUSD From a technical standpoint BTCUSD has once again failed at the 28k mark which remains a key area of resistance further strengthened by the presence of the 100 and 200-day MA. Price is currently stuck between the MAs with 20 and 50-day MAs resting just below the current price providing a modicum of support. What is more worrying for me personally is that we have just had a death cross pattern with the 100-day MA crossing below the 200-day MA hinting at the potential for further downside. BTCUSD does remain vulnerable below the 28k and more importantly the psychological 30k mark. As long as we fail to see a sustainable move above these levels a retest of the 25k mark or lower remains a real possibility. BTCUSD Daily Chart, October 10, 2023. Source: TradingView, chart prepared by Zain Vawda https://www.dailyfx.com/news/bitcoin-faces-death-cross-as-xrp-fails-to-capitalize-on-appeal-ruling-20231010.html