2024-02-05 12:30

WTI (US Oil) Talking Points: Crude prices look set for a third straight session of falls A stronger Dollar has added to the markets’ woes Keep an eye on Fed speakers this week Crude oil prices have been hammered again on Monday by the stronger United States Dollar spring on global markets by last week’s blockbuster jobs report from the world’s largest economy. January’s 353,000 increase in non-farm payrolls almost doubled economists’ expectations and has seen any prospect of lower interest rates from the Federal Reserve in March priced right out by futures markets. This has been to the Dollar’s benefit across the currency complex but has made life tough for commodities priced in it, of which crude is the star. It is of course arguable that an economy creating jobs at the US’ current pace is not likely to be such terrible news for energy demand. However we live in a monetarist world, the Fed is running the table so markets’ take on interest-rate paths will always dominate. The energy sphere also faces the prospect of quite plentiful supply from countries both within and outside the Organization of Petroleum Exporting Countries meeting uncertain global demand as the industrial economies battle inflation and the havoc wrought on supply chains by Covid. Leading crude importer China is a cause of particular anxiety here. Oil prices will remain vulnerable to geopolitics as knock-ons from conflict in Gaza and Ukraine both have the potential to spring supply disruptions at any time. However we now enter a relatively quiet couple of weeks for economic data, leaving any central bank speakers in the spotlight, especially those from the Fed. Atlanta Fed President Raphael Bostic will speak on Monday, with Cleveland’s Loretta Mester up on Tuesday. US Crude Oil Technical Analysis Daily West Texas Intermediate Chart Compiled Using TradingView Bulls seem to have abandoned all thought of retaking January 29’s two-month high of $79.16/barrel. Indeed, they are now attempting to defend the third Fibonacci retracement of the rise up to that point from the lows of December 13. That comes in at $72.27. If that level can’t survive on a daily close this week it may well mean further falls, perhaps putting psychological support at the $70 mark into focus. Prices have slipped below previous, well-respected uptrend channel support at $72.44. However it is possible that the market is overdoing the bearishness a little at this point, prices are now well below their 50-day moving average, which comes in at $73.13. IG’s own data finds traders overwhelmingly long at current levels, to the turn of some 87%. While that’s the sort of extreme which might argue for a contrarian, bearish play, given the recent scale of market falls it might rather suggest that this market is at least due some time for reflection if not a meaningful recovery. --By David Cottle for DailyFX https://www.dailyfx.com/news/crude-oil-prices-sink-on-strong-dollar-as-fed-cut-bets-are-off-20240205.html

2024-02-05 11:00

Major Indices Updates: FTSE 100 continues to be side-lined DAX 40 dips but tries to regain lost ground S&P 500 trades in new record highs FTSE 100 continues to be side-lined The FTSE 100 is stuck in its 7,690 to 7,600 sideways trading range, the break out of which may well determine the next minor trend. A fall through last week’s 7,600 low would lead to the 55-day simple moving average (SMA) at 7,592 being eyed, below which meanders the 200-day SMA at 7,550. Minor resistance can be found at last Tuesday’s 7,641 low above which lies last week’s high at 7,690. A rise above 7,690 and the 11 January high at 7,694 would likely target the mid-October high at 7,702. Further up the July and September highs can be seen at 7,723 to 7,747. As long as last week’s low at 7,600 underpins, the medium-term uptrend remains intact. FTSE 100 Daily Chart Source: IG ProRealTime, Prepared by Axel Rudolph DAX 40 dips but tries to regain lost ground The DAX 40 index dipped to its January-to-February uptrend line at 16,856 in overnight trading before recovering some lost ground and heading back up to its Monday 16,943 high. Above it beckon the mid-December and early February record highs at 17,003 to 17,020. Above 17,020 lies the 17,100 mark which may be reached next. This high will be eyed provided no bearish reversal to below last Thursday’s low at 16,782 is seen. Support above that low sits at Friday’s 16,889 low. DAX 40 Daily Chart Source: IG ProRealTime, Prepared by Axel Rudolph S&P 500 trades in new record highs The S&P 500 continues to steam ahead and is fast approaching its psychological 5,000 mark around which it is expected to at least short-term lose upside momentum. Slips should find support around last Monday and Tuesday’s 4,931 high ahead of Friday’s 4,905 low. Slightly further down sits solid support between Tuesday’s 4,899 low and the 4,903 late January high. S&P 500 Daily Chart Source: IG ProRealTime, Prepared by Axel Rudolph https://www.dailyfx.com/news/ftse-100-dax-40-side-lined-while-s-p-500-trades-in-record-highs-20240205.html

2024-02-05 09:16

AUD/USD, ASX 200 Minimal expectations from the RBA tomorrow as inflation stabilises AUD/USD under pressure post-NFP ASX pulls back from all-time high after China rout The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library Minimal Expectations from the RBA Tomorrow as Inflation Stabilises The RBA is expected to keep the benchmark lending rate unchanged at 4.35% in the early hours of tomorrow. The need to keep raising interest rates has eased massively as incoming inflation data shows positive signs. The Bank was forced into hiking rates as recently as November after inflation data headed in the wrong direction. Markets anticipate the RBA will have cut interest rates by September but this could happen as early as June (49% chance) according to the market implied probability. AUD/USD Under Pressure Post-NFP The Aussie dollar appears to have made further strides to the downside after the US job market surprised to the upside with momentum too. Not only did the January numbers surprise to the upside but the December figure saw a substantial upward revision too, suggesting that the January built on existing momentum in employment. At DailyFX, we have been tracking AUD/USD in the leadup to the trendline breakdown. Since then, a bear flag has emerged around the 200-day simple moving average (SMA) and has subsequently witnessed confirmation with Friday’s large move to the downside. Price action currently tests a narrow range of support, prior resistance between August and November last year, before 0.6460 may come into view. This week, apart from the RBA decision tomorrow, provides very little scheduled event risk. Therefore, be cognicent of the possibility of further USD upside as markets will have time to dwell on NFP data. ISM services PMI in the US poses a potential boost for USD if the final data print confirms the sector remains in expansion – which can weigh on AUD/USD. AUD/USD Daily Chart Source: TradingView, prepared by Richard Snow ASX Pulls Back From All-Time High After China Rout The local Australian index (ASX 200) retreated from Friday’s new all-time high but remains above the prior high of 7641. Negative sentiment from neighbouring China witnessed a daily selloff in Australian stocks which reached an all-time high on Friday after extremely robust jobs data in the US strengthened the US dollar, weighing on the Aussie dollar. Over the weekend the Chinese securities regulator vowed to prevent abnormal market fluctuations without any further details. Ill-intentioned short selling is something that continues to be monitored as the regulator has banned short selling previously. Nearly two weeks ago, the regulator restricted security lending - a decision with the purpose of reducing short selling, hoping to halt the decline in the local stock market. However, the uptrend has been consistent up until recently, rising with momentum since the swing low last month. Signs of fatigue have appears around the new all-time high, evidenced by the extended upper wicks on the daily candles. A daily close below 7645 is the first challenge for bears to overcome. Thereafter, an approach all the way down to the January swing low would be the next major level of interest for index traders. Keep in mind, bulls may not roll over that easily. Should a close below 7641 materialise, it will be important to remain nimble as there could still be a retest of the new high before bulls potentially throw in the towel. In the absence of further selling, the uptrend remains intact, meaning the all-time high remains a key level of interest for ASX 200 bull.s ASX 200 Daily Chart Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/aud-asx-200-weighed-down-by-worsening-chinese-sentiment-20240205.html

2024-02-04 18:00

Markets Week Ahead: S&P 500, Dow Hits Fresh Highs, Gold Fades, US Dollar Rallies Fed Holds Steady, Ditches Tightening Bias, Gold and US Dollar on the Move Fed chair Jerome Powell pushed back against aggressive rate cut expectations again mid-week after the FOMC left US rates unchanged. A March rate cut is currently being priced out, leaving the May meeting a live event, with six rate cuts seen in 2024, down from seven last week. The blockbuster US NFP report on Friday gave Chair Powell’s stance some validation as the US jobs market continues to forge ahead. US Dollar Jumps After NFPs Smash Estimates, Gold Slumps US Dollar Index Daily Chart Learn how to trade the US dollar using our Q1 US Dollar Technical and Fundamental Reports Despite US dollar strength, the US equity markets continue to power ahead, driven in part by some big moves in the big tech stocks, including Amazon and Meta. Amazon (AMZN) Daily Chart Meta Daily Chart The world’s largest company, Microsoft fell post-earnings but regained nearly all losses by the close on Friday, while Apple fell mid-week but also regained some losses. The US earnings calendar is not as busy next week although Ford, MicroStrategy, Uber Technologies, Alibaba, and PayPal will all be opening their books in the coming days and are worth noting. For all earnings releases, see the DailyFX Earnings Calendar After last week’s data and events-heavy week, the next few days are light of potential market-moving releases and events. Traders should note that after the pre-FOMC blackout, Federal Reserve members will now be allowed to give their latest opinions next week and these comments should be carefully noted, especially any talk of a rate cut timetable. US regional banks were back in the headlines last week after the New York Community Bancorp release that sent their shares sprawling over 40% lower. Chart of the Week – New York Community Bancorp Technical and Fundamental Forecasts – w/c February 5th British Pound Weekly Forecast: Rare BoE Vote Split will Continue to Provide Support The British Pound was boosted last week by the widest split for sixteen years. on the Bank of England’s interest-rate-setting committee. The key bank rate was held at 5.25%, as more or less everyone had expected on February 1. Euro Weekly Forecast: Stagnant EU Growth Exposes Euro Vulnerabilities Euro pessimism drags on as the EU narrowly avoided a recession. ‘US excellence’ is very much alive after NFP, while the pound and yen could aid euro performance. Gold Weekly Forecast: XAU/USD Testing Support After US NFPs Hammer Rate Expectations Gold is likely to struggle to push higher over the coming week after the latest US Jobs Report smashed expectations, paring Fed rate cut expectations. US Dollar Forecast: Bulls Return as Bears Bail, Setups on EUR/USD, USD/JPY, AUD/USD This article provides a comprehensive analysis of the U.S. dollar's fundamental and technical outlook, with a specific focus on EUR/USD, USD/JPY, and AUD/USD. The piece also offers insights into critical price levels for the week ahead. https://www.dailyfx.com/news/markets-week-ahead-s-p-500-dow-hit-fresh-highs-gold-fades-us-dollar-rallies-20240204.html

2024-02-04 06:00

US DOLLAR OUTLOOK – EUR/USD, USD/JPY, AUD/USD The U.S. dollar, as measures by the DXY index, rallies following strong U.S. labor market numbers Solid job creation could delay the start of the Fed's easing cycle and reduce the likelihood of deep rate cuts This article examines the technical outlook for three major currency pairs: EUR/USD, USD/JPY and AUD/USD. Most Read: US Dollar Forecast - Bulls Mount Comeback; Setups on EUR/USD, USD/JPY, GBP/USD The US dollar, as measured by the DXY index, blasted higher on Friday after the U.S. jobs report revealed that U.S. employers added 353,000 workers in January, nearly double Wall Street consensus estimates. Average hourly earnings also surprised to the upside, with the year-over-year reading clocking in at 4.5% versus 4.1% expected - a sign that wages are reaccelerating (a possible headache for the FOMC). US DOLLAR AND YIELDS PERFORMANCE Source: TradingView US LABOR MARKET DATA Solid job creation, coupled with red-hot pay growth, indicates that the American economy is holding up remarkably well and may even have picked up momentum at the outset of the new year, a situation that could delay the start of the Fed's easing cycle and limit the number of rate cuts once the process gets underway. The chart below shows FOMC interest rate probabilities following the latest NFP report. Source: CME Group With the U.S. labor market still firing on all cylinders, policymakers will be reluctant to move off their restrictive stance anytime soon for fear that a premature rate cut could complicate their fight against inflation. Against this backdrop, we could see U.S. Treasury yields push higher in the coming days and weeks, creating a constructive environment for the U.S. dollar. In the following section, we will set fundamentals aside and examine the technical outlook for three major U.S. dollar pairs: EUR/USD, USD/JPY and AUD/USD. In the analysis, we will dissect important price thresholds that could act as support or resistance, information that every forex trader should have on their radar for the upcoming trading sessions. EUR/USD TECHNICAL ANALYSIS EUR/USD nearly broke the upper boundary of a falling wedge but reversed lower heading into the weekend following strong U.S. data, with prices tumbling towards cluster support at 1.0780. This area must hold at all costs; failure to do so could result in a drop towards 1.0730, followed by 1.0650. In the event of a bullish turnaround from current levels, overhead resistance stretches from 1.0840 to 1.0860. Moving beyond this range, FX traders are likely to shift their attention towards the 50-day simple moving average at 1.0915 and 1.0950 thereafter. EUR/USD TECHNICAL ANALYSIS CHART Interested in learning how retail positioning can offer clues about USD/JPY’s short-term direction? Our sentiment guide has all the answers you seek. Get the complimentary guide now! USD/JPY TECHNICAL ANALYSIS USD/JPY broke above key tech levels on Friday, but stopped short of clearing trendline resistance at 148.35. With the bulls back in control of the market, however, this ceiling could be breached any day now. When that happens, we could see a move towards 148.90 and 150.00 in case of further strength. On the other hand, if sellers regain the upper hand and manage to spark a bearish reversal, traders should keep an eye on the 100-day simple moving average at 147.40. Below this area, the next support zone to watch appears at 146.00 ahead of 145.30, which corresponds to the 50-day simple moving average. USD/JPY TECHNICAL CHART USD/JPY Chart Created Using TradingView AUD/USD TECHNICAL ANALYSIS AUD/USD plummeted on Friday, piercing an important support region at 0.6525 and closing the week below it – a negative technical signal for the pair. If the downward momentum persists in the coming trading sessions, the next line of defense against a bearish attack emerges at 0.6460, followed by 0.6395. Conversely, if market sentiment improves and the Australian dollar stages a turnaround, resistance looms at 0.6525, followed by 0.6575/0.6600. The bulls will have a hard time pushing prices above this barrier, but if they manage to do it successfully, we can’t rule out a revisit of the 0.6625 region. AUD/USD TECHNICAL CHART AUD/USD Chart Created Using TradingView https://www.dailyfx.com/news/forex-usd-dollar-forecast-bulls-return-as-bears-bail-setups-on-eur-usd-usd-jpy-aud-usd-20240204.html

2024-02-02 16:05

Most Read: US Dollar Jumps After NFPs Smash Estimates, Gold Slumps The U.S. dollar surged on Friday after economic data revealed that U.S. employers added 353,000 workers in January, nearly double market expectations. The exceptionally robust job creation, along with red-hot average hourly earnings, signals that the economy is holding up remarkably well and may even be reaccelerating, a situation that could deter the Fed from moving off its restrictive stance imminently. US DOLLAR (DXY INDEX) & US YIELDS Source: TradingView Putting fundamentals aside, this article will focus on the technical outlook for three U.S. dollar pairs: EUR/USD. USD/JPY and GBP/USD, dissecting important price thresholds that should be on every trader's radar in the coming days following the U.S. employment report – a release that brought significant volatility to FX markets. EUR/USD TECHNICAL ANALYSIS EUR/USD was on track to break the upper boundary of a falling wedge but took a sharp turn to the downside following the U.S. jobs report, dropping towards cluster support at 1.0780. The bulls need to defend this level vigorously; failure to do so could push prices towards 1.0730, followed by 1.0650. In the event that EUR/USD manages to reverse higher from its current position, technical resistance extends from 1.0840 to 1.0860. Above this key range, the market focus will likely be on the 50-day simple moving average at 1.0915, followed by 1.0950. EUR/USD TECHNICAL ANALYSIS CHART For a complete overview of the yen's prospects, request your complimentary Q1 trading forecast now! USD/JPY TECHNICAL ANALYSIS USD/JPY blasted higher on Friday, breaking past key levels, and pressing against trendline resistance at 148.35. With bullish momentum on the U.S. dollar’s side, the pair may soon overcome this barrier, potentially initiating a move towards 148.90. Further strength could lead to a rally towards 150.00. Conversely, if sellers reappear and trigger a pullback, initial support can be found near the 100-day simple moving average around 147.40. If prices dip below this level, a retracement towards 146.00 and possibly even 145.30 cannot be ruled out. USD/JPY TECHNICAL CHART USD/JPY Chart Created Using TradingView Want to know more about the British pound's outlook? Find all the insights in our Q1 trading forecast. Request a free copy now! GBP/USD TECHNICAL ANALYSIS GBP/USD has spent recent weeks consolidating within a symmetrical triangle, a continuation pattern characterized by two converging trendlines: a rising one linking a series of higher lows and a falling one connecting a series of lower highs. Symmetrical triangles are validated when prices push beyond the boundaries of geometric shape, with a stronger confirmation signal if the breakout aligns with broader trend in play. For GBP/USD, traders should monitor two critical levels: resistance at 1.2750 and support at 1.2630. A breach of support may lead the bearish camp to target levels such as 1.2600, 1.2560, and 1.2455. Meanwhile, a breach of resistance could bring into focus 1.2830 and potentially 1.3000. GBP/USD TECHNICAL CHART GBP/USD Chart Created Using TradingView https://www.dailyfx.com/news/forex-usd-dollar-forecast-bulls-mount-comeback-setups-on-eur-usd-usd-jpy-gbp-usd-20240202.html