#NTG (Natural gas) broke key resistance level 4.2000
• Likely to rise to resistance level 4.600
Natural gas continues to rise after the price broke above the key resistance level 4.2000 (which stopped the pervious sharp impulse wave 1 at the start of August).
The breakout of the resistance level 4.2000 accelerated the active medium-term impulse wave (3).
Given the predominant daily uptrend, Natural gas can be expected to rise further toward the next resistance level 4.600 (target for the completion of wave (3), intersecting with the daily up channel from May).
• Likely to rise to resistance level 4.600
Natural gas continues to rise after the price broke above the key resistance level 4.2000 (which stopped the pervious sharp impulse wave 1 at the start of August).
The breakout of the resistance level 4.2000 accelerated the active medium-term impulse wave (3).
Given the predominant daily uptrend, Natural gas can be expected to rise further toward the next resistance level 4.600 (target for the completion of wave (3), intersecting with the daily up channel from May).
#NZDJPY broke key resistance level 76.65
• Likely to rise to resistance level 77.80
NZDJPY Wave Analysis – 27 August, 2021 continues to rise after the price broke above the key resistance level 76.65 (which stopped the pervious impulse wave (a)).
The breakout of the resistance level 76.65 coincided with the breakout of the 61.8% Fibonacci correction of the previous wave 1 – which accelerated the active corrective wave 2.
Given strong yen outflows, NZDJPY can be expected to rise further toward the next resistance level 77.80 (target price for the completion of the active corrective wave 2, top of wave (B)).
• Likely to rise to resistance level 77.80
NZDJPY Wave Analysis – 27 August, 2021 continues to rise after the price broke above the key resistance level 76.65 (which stopped the pervious impulse wave (a)).
The breakout of the resistance level 76.65 coincided with the breakout of the 61.8% Fibonacci correction of the previous wave 1 – which accelerated the active corrective wave 2.
Given strong yen outflows, NZDJPY can be expected to rise further toward the next resistance level 77.80 (target price for the completion of the active corrective wave 2, top of wave (B)).
Powell causes dollar retreat but didn't cross the line
At the end of the week, Powell's speech removed fears of rapid stimulus cuts and interest rate hikes from the markets. The Fed Chairman reiterated that most of the conditions for starting QE cuts have been met, but the bar is higher for starting a rate hike. This bar has not yet been met, and these are not events that come one after the other.
The move was not particularly strong, taking 0.4% away from the DXY, returning the dollar to a critical support level in the form of the 50-day moving average and former converging trading range resistance.
Powell's comments delayed the acceleration of the dollar's rally, but as long as the DXY remains above 92.50, a bullish scenario for the dollar remains in play. The muted response from the US currency suggests that the dollar bears have not heard what is essential for them to move into action.
At the end of the week, Powell's speech removed fears of rapid stimulus cuts and interest rate hikes from the markets. The Fed Chairman reiterated that most of the conditions for starting QE cuts have been met, but the bar is higher for starting a rate hike. This bar has not yet been met, and these are not events that come one after the other.
The move was not particularly strong, taking 0.4% away from the DXY, returning the dollar to a critical support level in the form of the 50-day moving average and former converging trading range resistance.
Powell's comments delayed the acceleration of the dollar's rally, but as long as the DXY remains above 92.50, a bullish scenario for the dollar remains in play. The muted response from the US currency suggests that the dollar bears have not heard what is essential for them to move into action.
Indeed, Powell agreed that conditions are ripe for QE purchases to be cut, confirming the fundamentals behind the dollar's strength since June, such as high inflationary pressures and a strong labour market, as a reflection of the booming recovery in the economy.
Simply put, Powell's comments slowed the dollar's upward movement and maintained the status quo in stock markets, where investors continue to roll the rock uphill.
Those tuning in to the rising volatility in the currency and stock markets are now waiting with increased focus for Friday's US labour market data and other indicators of consumer activity to gauge the chances of a wind-down announcement in late September, or if it will be in November or December.
Strong data and optimism from companies and Americans could spur new trade ideas in the markets after the summer lull. And, as is often the case, if it is a rising dollar, it promises to be quite sharp. If it is a pessimistic scenario for the dollar, however, it will be a smooth slide.
Simply put, Powell's comments slowed the dollar's upward movement and maintained the status quo in stock markets, where investors continue to roll the rock uphill.
Those tuning in to the rising volatility in the currency and stock markets are now waiting with increased focus for Friday's US labour market data and other indicators of consumer activity to gauge the chances of a wind-down announcement in late September, or if it will be in November or December.
Strong data and optimism from companies and Americans could spur new trade ideas in the markets after the summer lull. And, as is often the case, if it is a rising dollar, it promises to be quite sharp. If it is a pessimistic scenario for the dollar, however, it will be a smooth slide.
#NZDCHF broke resistance zone
• Likely to rise to resistance level 0.6500
NZDCHF under the bullish pressure after previously breaking the resistance zone located between the minor resistance level 0.6400 (which reversed the price at the7 end of August) and the 61.8% Fibonacci correction of the downward impulse from the middle of August.
The breakout of this resistance zone accelerated the active short-term impulse wave 1, which begins to longer-term impulse wave (C).
Given the strong sales of the Swiss franc – NZDCHF can be expected to rise further toward the next round resistance level 0.6500.
• Likely to rise to resistance level 0.6500
NZDCHF under the bullish pressure after previously breaking the resistance zone located between the minor resistance level 0.6400 (which reversed the price at the7 end of August) and the 61.8% Fibonacci correction of the downward impulse from the middle of August.
The breakout of this resistance zone accelerated the active short-term impulse wave 1, which begins to longer-term impulse wave (C).
Given the strong sales of the Swiss franc – NZDCHF can be expected to rise further toward the next round resistance level 0.6500.
#GBPAUD reversed from support zone
• Likely to rise to resistance level 1.9000
GBPAUD recently reversed up from the support zone located between the support level 1.88 (which has been reversing the price from the start of August) and the 38.2% Fibonacci correction of the upward impulse form July.
The upward reversal from this support zone stopped the previous short-term corrective wave (ii).
Given the strong multi-month uptrend – GBPAUD can be expected to rise further toward the next round resistance level 1.9000.
• Likely to rise to resistance level 1.9000
GBPAUD recently reversed up from the support zone located between the support level 1.88 (which has been reversing the price from the start of August) and the 38.2% Fibonacci correction of the upward impulse form July.
The upward reversal from this support zone stopped the previous short-term corrective wave (ii).
Given the strong multi-month uptrend – GBPAUD can be expected to rise further toward the next round resistance level 1.9000.
The Chinese Indices are lagging behind Wall Street and European onces due to the ongoing regulatory pressure. Investor sentiment in the region is also under pressure from worsening macroeconomic indicators.
The manufacturing PMI fell in August from 50.4 to 50.1, and the non-manufacturing indicator collapsed from 53.3 to 47.5, reflecting a tight lockdown to quell the coronavirus outbreak.
Nevertheless, markets have managed to digest this negative sentiment during Asian trading. There are emerging signs that investors found Chinese equities attractive enough to buy, even given the risks involved.
It is worth cautioning against aggressive buying of these indices or individual stocks right now. So far, there are no signs that China intends to stop the overhaul of regulations for technology and online companies. The People's Bank of China has not yet gone for a loosening of monetary policy, although many market observers expect this move later this year.
The manufacturing PMI fell in August from 50.4 to 50.1, and the non-manufacturing indicator collapsed from 53.3 to 47.5, reflecting a tight lockdown to quell the coronavirus outbreak.
Nevertheless, markets have managed to digest this negative sentiment during Asian trading. There are emerging signs that investors found Chinese equities attractive enough to buy, even given the risks involved.
It is worth cautioning against aggressive buying of these indices or individual stocks right now. So far, there are no signs that China intends to stop the overhaul of regulations for technology and online companies. The People's Bank of China has not yet gone for a loosening of monetary policy, although many market observers expect this move later this year.
The Shanghai China A50 blue-chip index gained support on the decline to 14500, an area of highs set in 2015 and early 2017 and 2020. The former resistance area now acts as a major support line.
Technically, there is sufficient room on the bearish side for a decline into the area of 13300 by the end of the year, where the lower boundary of the long-term uptrend channel passes.
Similar potential remains in the Hang Seng, whose long-term uptrend channel support passes through about 22,000 by the end of the year against the current 25700.
The Hong Kong-listed mainland equity index, H-shares, is close to a long-term support level of around 9000.
In all three cases, on the weekly charts, we can see attempts to move out of the oversold area and signs of RSI and index level divergence, with new price lows corresponding to higher indicator levels.
Technically, there is sufficient room on the bearish side for a decline into the area of 13300 by the end of the year, where the lower boundary of the long-term uptrend channel passes.
Similar potential remains in the Hang Seng, whose long-term uptrend channel support passes through about 22,000 by the end of the year against the current 25700.
The Hong Kong-listed mainland equity index, H-shares, is close to a long-term support level of around 9000.
In all three cases, on the weekly charts, we can see attempts to move out of the oversold area and signs of RSI and index level divergence, with new price lows corresponding to higher indicator levels.
Inflation continues to accelerate in the eurozone. The latest estimates showed an acceleration to 3% y/y in August, well above the expected 2.7% and in line with the peak levels of a decade ago. In both cases, the price driver for inflation was soaring commodity prices because of massive liquidity injections in the world’s largest economies.
Hawks at the ECB have stepped up, Robert Holtzman, Oesterreichische Nationalbank Governor, said that the European Central Bank is “in position to think about reducing pandemic aid” and “needs to have inflation risks on its mind”.
The high CPI growth rate and continued inflationary pressures in producer and import prices make inflation a severe threat. However, what matters for the markets is not the rate of price increases but how the central bank treats them. Concerns over inflation could strengthen support for the euro.
Hawks at the ECB have stepped up, Robert Holtzman, Oesterreichische Nationalbank Governor, said that the European Central Bank is “in position to think about reducing pandemic aid” and “needs to have inflation risks on its mind”.
The high CPI growth rate and continued inflationary pressures in producer and import prices make inflation a severe threat. However, what matters for the markets is not the rate of price increases but how the central bank treats them. Concerns over inflation could strengthen support for the euro.
#NZDUSD broke resistance zone
• Likely to rise to resistance level 0.7085
NZDUSD recently broke the resistance zone located between the round resistance level 0.7000 and the resistance trendline of the daily down channel from May.
The breakout of this resistance zone accelerated the active short-term impulse wave 1 of the intermediate impulse wave (C) from the middle of August.
NZDUSD can be expected to rise further toward the next resistance level 0.7085 (which has been reversing the price from the end of June).
• Likely to rise to resistance level 0.7085
NZDUSD recently broke the resistance zone located between the round resistance level 0.7000 and the resistance trendline of the daily down channel from May.
The breakout of this resistance zone accelerated the active short-term impulse wave 1 of the intermediate impulse wave (C) from the middle of August.
NZDUSD can be expected to rise further toward the next resistance level 0.7085 (which has been reversing the price from the end of June).
#DAX reversed from resistance level 16000.00
• Likely to fall to support level 15635.00
DAX index recently reversed down from the resistance zone located between the round resistance level 16000.00 and the upper daily Bollinger Band.
The downward reversal from this resistance zone will most likely form the daily Shooting Star candlestick pattern if the index closes today near the current levels.
DAX can be expected to fall further toward the next support level 15635.00 (former resistance from July which reversed DAX with the 2 daily Hammers earlier this month).
• Likely to fall to support level 15635.00
DAX index recently reversed down from the resistance zone located between the round resistance level 16000.00 and the upper daily Bollinger Band.
The downward reversal from this resistance zone will most likely form the daily Shooting Star candlestick pattern if the index closes today near the current levels.
DAX can be expected to fall further toward the next support level 15635.00 (former resistance from July which reversed DAX with the 2 daily Hammers earlier this month).
Stock markets paused growth yesterday. Declines in Europe ranged from 0.1% in the CAC 40 to 0.3% in the DAX and 0.4% in the FTSE 100.
Pressure on the DAX was triggered by a wave of profit-taking that took away 1.5% from the index after touching the 16,000 level, a significant resistance from where the index rolled back earlier in August. Since Wednesday morning, there have been more buying, with an increase of 0.4%.
The DAX performance could prove to be the canary in the coal mine, reflecting the increased pull of investors to lock in profits from the impressive gains since the beginning of the year with 22% rise for S&P500, 20% for Nasdaq, 17% for Dow Jones, 15% for DAX 30 and 8% in the FTSE100.
It is likely that with the new month, investors will switch to Asian markets where more upside potential has accumulated after a 5% slump in the Hang Seng since the start of the year and a 2% rise in Shanghai Composite since the beginning of the year.
Pressure on the DAX was triggered by a wave of profit-taking that took away 1.5% from the index after touching the 16,000 level, a significant resistance from where the index rolled back earlier in August. Since Wednesday morning, there have been more buying, with an increase of 0.4%.
The DAX performance could prove to be the canary in the coal mine, reflecting the increased pull of investors to lock in profits from the impressive gains since the beginning of the year with 22% rise for S&P500, 20% for Nasdaq, 17% for Dow Jones, 15% for DAX 30 and 8% in the FTSE100.
It is likely that with the new month, investors will switch to Asian markets where more upside potential has accumulated after a 5% slump in the Hang Seng since the start of the year and a 2% rise in Shanghai Composite since the beginning of the year.
The USD index was supported again yesterday on the way down to the 50 SMA, which has been the significant support line of the uptrend of the last three months. The same is true for EURUSD, which the bears did not let the day close significantly above 1.1800, pushing the pair below that level early on Wednesday.
The GBPUSD rebound in previous weeks lost strength on the approach to 1.3800, the area where the 50- and 200-day moving averages crossed, indicating that the bears are in control of the pair.
There are several factors on the USD's side in the coming days.
Firstly, there is the nervousness of waiting for the NFP on Friday.
Secondly, the US Treasury intends to restore its liquidity supply to $800 billion in the coming months from $262 billion now.
Third, although the Fed is moving slowly to reduce its crisis-era support, it is several steps ahead of the BoJ, the ECB and the BoE.
The GBPUSD rebound in previous weeks lost strength on the approach to 1.3800, the area where the 50- and 200-day moving averages crossed, indicating that the bears are in control of the pair.
There are several factors on the USD's side in the coming days.
Firstly, there is the nervousness of waiting for the NFP on Friday.
Secondly, the US Treasury intends to restore its liquidity supply to $800 billion in the coming months from $262 billion now.
Third, although the Fed is moving slowly to reduce its crisis-era support, it is several steps ahead of the BoJ, the ECB and the BoE.
The private sector in the US slowed down sharply in new hiring. According to ADP calculations, companies created 374k new jobs in August after 326k in July, markedly weaker than the forecast 640k.
We, and probably markets too, are already used to the fact that the current report risks being a darker picture than the official data. Nevertheless, some knee-jerk market reaction has persisted.
The markets are now operating in a pattern: the worse the US economy is, the worse for the dollar as the chances of an imminent monetary policy tightening are falling.
In theory, weak US statistics could support equities. However, this time, investors seem to see weak data as a negative for the US market.
We, and probably markets too, are already used to the fact that the current report risks being a darker picture than the official data. Nevertheless, some knee-jerk market reaction has persisted.
The markets are now operating in a pattern: the worse the US economy is, the worse for the dollar as the chances of an imminent monetary policy tightening are falling.
In theory, weak US statistics could support equities. However, this time, investors seem to see weak data as a negative for the US market.
#AUDUSD broke resistance zone
• Likely to rise to resistance level 0.7400
AUDUSD currency pair recently broke the resistance zone located between the pivotal resistance level 0.7300 (former support from the middle of July) and the 38.2% Fibonacci correction of the downward impulse from July.
The breakout of this resistance zone accelerated the active medium-term impulse wave (1).
AUDUSD can be expected to rise further toward the next resistance level 0.7400 (top of wave (4) from the start of August).
• Likely to rise to resistance level 0.7400
AUDUSD currency pair recently broke the resistance zone located between the pivotal resistance level 0.7300 (former support from the middle of July) and the 38.2% Fibonacci correction of the downward impulse from July.
The breakout of this resistance zone accelerated the active medium-term impulse wave (1).
AUDUSD can be expected to rise further toward the next resistance level 0.7400 (top of wave (4) from the start of August).
#Apple broke the resistance level 151.00
• Likely to rise to resistance level 157.50
Apple recently broke the resistance level 151.00 (upper boundary of the sideways price range inside which the price has been trading from the start of July).
The breakout of this resistance level 151.00 accelerated the active short-term impulse wave 5, which belongs to the intermediate impulse wave (C) from last year.
Given the prevailing uptrend, Apple can be expected to rise further toward the next resistance level 157,50 (target price for the completion of the active impulse wave (C)).
• Likely to rise to resistance level 157.50
Apple recently broke the resistance level 151.00 (upper boundary of the sideways price range inside which the price has been trading from the start of July).
The breakout of this resistance level 151.00 accelerated the active short-term impulse wave 5, which belongs to the intermediate impulse wave (C) from last year.
Given the prevailing uptrend, Apple can be expected to rise further toward the next resistance level 157,50 (target price for the completion of the active impulse wave (C)).
US oil inventories declined more than expected last week. The EIA report noted a 7.2M barrel drop in commercial inventories, vs -2.5M expected. Often in August-September, with the end of the summer travel season, there is a turning point in the decline of stocks, and they begin to rise. But that point has not yet been reached.
Interestingly, at the same time, the US has brought production to 11.5m BPD, a new high since May 2020, and the strategic oil reserve has fallen slightly. All of this reflects rising consumption in the states, which would be good for the price if not for two factors.
Earlier on Wednesday, OPEC+ confirmed a further 400 BPD supply increase from September. On top of this, Russia indicated that it can increase production above the quota, causing a 2% drop in Brent prices to $70.30.
The 2nd factor is the planned sale in September of 20m barrels from the US government's 621m strategic reserves. This is unlikely to be the last such sale in the coming months.
Interestingly, at the same time, the US has brought production to 11.5m BPD, a new high since May 2020, and the strategic oil reserve has fallen slightly. All of this reflects rising consumption in the states, which would be good for the price if not for two factors.
Earlier on Wednesday, OPEC+ confirmed a further 400 BPD supply increase from September. On top of this, Russia indicated that it can increase production above the quota, causing a 2% drop in Brent prices to $70.30.
The 2nd factor is the planned sale in September of 20m barrels from the US government's 621m strategic reserves. This is unlikely to be the last such sale in the coming months.