In its latest statement today, ECB said that it will continue “with a moderately lower pace of net asset purchases” under PEPP, after two quarters of acceleration. At the same time, its volume (€1.85 trillion) as well as key interest rates remained unchanged.
Key European stock indices are strengthening after the press release as the ECB promised a flexible approach to the volume of monthly purchases based on market conditions. For the markets this means a stabilisation mechanism in case of deteriorating financial conditions.
The single currency, however, also strengthened gains, rewriting intraday highs at $1.1840. In the EURUSD, the tug of war continues at levels just above the 50-day moving average near 1.1800.
The same is true for the DXY dollar index as well as GBPUSD, where bull and bear forces are balanced near key levels. A strong move from current levels could form the basis for a trend right up to the end of the year.
Key European stock indices are strengthening after the press release as the ECB promised a flexible approach to the volume of monthly purchases based on market conditions. For the markets this means a stabilisation mechanism in case of deteriorating financial conditions.
The single currency, however, also strengthened gains, rewriting intraday highs at $1.1840. In the EURUSD, the tug of war continues at levels just above the 50-day moving average near 1.1800.
The same is true for the DXY dollar index as well as GBPUSD, where bull and bear forces are balanced near key levels. A strong move from current levels could form the basis for a trend right up to the end of the year.
🎮 Will the Game ever Stop?
GameStop is an American video games chain that was previously in a difficult situation due to competition from the digital distribution of computer games and the economic impact of the pandemic, causing the share price to fall and prompting many institutional investors to short the stock. At the same time, some investors suggested that GameStop shares were undervalued.
📈Everything changed in January 2021, when Reddit users initiated a historic short squeeze on GME on various stock exchanges. This led to serious financial losses for some of the big bearish players in the US stock market, particularly hedge funds.
In just two weeks, a coordinated buying by small investors boosted the share price from $20 to $500 per share! The volatility has now settled somewhat, with the stock currently trading around $197.
Yesterday, despite reporting rising sales in their quarterly earnings report, GME shares fell by more than 7% in after hours trading. How will the stock perform at today’s US market open?
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Trade Responsibly. 72.4% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
GameStop is an American video games chain that was previously in a difficult situation due to competition from the digital distribution of computer games and the economic impact of the pandemic, causing the share price to fall and prompting many institutional investors to short the stock. At the same time, some investors suggested that GameStop shares were undervalued.
📈Everything changed in January 2021, when Reddit users initiated a historic short squeeze on GME on various stock exchanges. This led to serious financial losses for some of the big bearish players in the US stock market, particularly hedge funds.
In just two weeks, a coordinated buying by small investors boosted the share price from $20 to $500 per share! The volatility has now settled somewhat, with the stock currently trading around $197.
Yesterday, despite reporting rising sales in their quarterly earnings report, GME shares fell by more than 7% in after hours trading. How will the stock perform at today’s US market open?
👉Register https://bit.ly/3n8rYtz & Trade CFDs on #Gamestop & more new hot stocks with FxPro.com
Trade Responsibly. 72.4% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
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#EURCAD reversed from thee resistance area
• Likely to fall to support level 1.4870
EURCAD currency pair recently reversed down with the daily Shooting Star from the resistance area located between the pivotal resistance level 1.5050 (which has been reversing the pair from July) and the upper daily Bollinger Band.
The downward reversal from this resistance area stopped the previous short-term impulse waves (iii) and C.
EURCAD can be expected to fall further toward the next support level 1.4870 (which has been reversing the price from the end of August).
• Likely to fall to support level 1.4870
EURCAD currency pair recently reversed down with the daily Shooting Star from the resistance area located between the pivotal resistance level 1.5050 (which has been reversing the pair from July) and the upper daily Bollinger Band.
The downward reversal from this resistance area stopped the previous short-term impulse waves (iii) and C.
EURCAD can be expected to fall further toward the next support level 1.4870 (which has been reversing the price from the end of August).
#EUR50 reversed from the support area
• Likely to rise to resistance level 4240.5
EUR50 index recently reversed up from the support area located between the support level 4150.00 (former multi-month resistance from June), lower daily Bollinger Band and the 38.2% Fibonacci correction of the upward impulse from July.
The upward reversal from this support area stopped the previous short-term correction (ii).
EUR50 index can be expected to rise further toward the next resistance level 4240.5 (which has been reversing the price from the start of August).
• Likely to rise to resistance level 4240.5
EUR50 index recently reversed up from the support area located between the support level 4150.00 (former multi-month resistance from June), lower daily Bollinger Band and the 38.2% Fibonacci correction of the upward impulse from July.
The upward reversal from this support area stopped the previous short-term correction (ii).
EUR50 index can be expected to rise further toward the next resistance level 4240.5 (which has been reversing the price from the start of August).
Thursday started with a new boom in altcoins, but bitcoin decided to stay in place, and other cryptocurrencies also slowed down by the evening.
BTC is currently trading around $45.9K.
Many are interested in the fact that the price has dropped sharply by 20% earlier this week, and how this could affect the global movement of Bitcoin.
According to the technical analysis, intermediate significant levels when going down: $44-44.7K (200- & 50-day MAs) and $37.3K (August lows).
If we see an uptrend, it will clearly stumble upon a strong resistance level of $56K, which will not be easy to break, but possible. As we said earlier, then the road will open to the psychologically key level of $60K, which is even stronger.
BTC is currently trading around $45.9K.
Many are interested in the fact that the price has dropped sharply by 20% earlier this week, and how this could affect the global movement of Bitcoin.
According to the technical analysis, intermediate significant levels when going down: $44-44.7K (200- & 50-day MAs) and $37.3K (August lows).
If we see an uptrend, it will clearly stumble upon a strong resistance level of $56K, which will not be easy to break, but possible. As we said earlier, then the road will open to the psychologically key level of $60K, which is even stronger.
Japan stocks instead of Chinese, cash instead of shares
On Friday morning, we see moderately positive dynamics again, supported by a rise in Chinese stocks.
China’s regulators agreed to a request to reschedule payments to creditors of troubled real estate development giant Evergrande, which is on the brink of bankruptcy. Some commentators have pointed out that a default by this company could potentially turn out to be China’s Lehman Brothers. The very fact that the regulator made concessions created positive vibes in the markets during the Asian session.
The Japanese market has become the centre of attraction for investors in Asia. The Nikkei225 has surpassed 30,000 marks and is trading near 32-year highs.
Since late August, the main driver of the 10% rally has been news of the imminent resignation of Japanese Prime Minister Suga, creating hopes of stepping up economic reforms. China’s regulatory problems have also contributed to this rally, potentially holding back the potential of the Middle Kingdom.
On Friday morning, we see moderately positive dynamics again, supported by a rise in Chinese stocks.
China’s regulators agreed to a request to reschedule payments to creditors of troubled real estate development giant Evergrande, which is on the brink of bankruptcy. Some commentators have pointed out that a default by this company could potentially turn out to be China’s Lehman Brothers. The very fact that the regulator made concessions created positive vibes in the markets during the Asian session.
The Japanese market has become the centre of attraction for investors in Asia. The Nikkei225 has surpassed 30,000 marks and is trading near 32-year highs.
Since late August, the main driver of the 10% rally has been news of the imminent resignation of Japanese Prime Minister Suga, creating hopes of stepping up economic reforms. China’s regulatory problems have also contributed to this rally, potentially holding back the potential of the Middle Kingdom.
One should not ignore the slide in the US indices for 3rd consecutive trading session, which might point to the prevailing “sell on rise” pattern, taking away 1.5% in three days from the S&P500.
It seems that Fed policymakers are precisely pursuing this tactic. FOMC members Rosengren and Kaplan stated that “to avoid apparent conflict of interest”, they will sell stocks and other assets from their brokerage accounts in September, moving into diversified index funds and cash savings. Both noted that they had come under public pressure because of the active management of their portfolios in 2020 when the Fed was involved in the economic bailout.
The sell-off in company shares and real estate funds, after the dizzying rally of the past year and a half, from the outside looks like an equally active bet on a potential market correction. After all, the Fed’s official announcement of the QE tapering is only weeks away. Such statements could further increase pressure on sellers to lock in profits.
It seems that Fed policymakers are precisely pursuing this tactic. FOMC members Rosengren and Kaplan stated that “to avoid apparent conflict of interest”, they will sell stocks and other assets from their brokerage accounts in September, moving into diversified index funds and cash savings. Both noted that they had come under public pressure because of the active management of their portfolios in 2020 when the Fed was involved in the economic bailout.
The sell-off in company shares and real estate funds, after the dizzying rally of the past year and a half, from the outside looks like an equally active bet on a potential market correction. After all, the Fed’s official announcement of the QE tapering is only weeks away. Such statements could further increase pressure on sellers to lock in profits.
#Nikkei225 index broke round resistance level 30000.00
• Likely to test resistance level 30700
Nikkei 225 index continues to rise after recently breaking the round resistance level 30000.00, which was preceded by the breakout of the multiple resistance levels – 29500.00, 28800 and 28270.
The breakout of these resistance levels accelerated the active medium-term upward impulse wave (3).
Nikkei 225 index can be expected to rise further toward the next resistance level 30700 (previous multi-month high from February and the target for the completion of the active wave (3)).
• Likely to test resistance level 30700
Nikkei 225 index continues to rise after recently breaking the round resistance level 30000.00, which was preceded by the breakout of the multiple resistance levels – 29500.00, 28800 and 28270.
The breakout of these resistance levels accelerated the active medium-term upward impulse wave (3).
Nikkei 225 index can be expected to rise further toward the next resistance level 30700 (previous multi-month high from February and the target for the completion of the active wave (3)).
#Wheat broke round support level 700.00
• Likely to fall to support level 664.50
Wheat continues to fall after recently breaking the round support level 700.00, which is the lower boundary of the narrow sideways price range the price has been trading in from the end of August.
The breakout of the support level 700.00 accelerated the active short-term ABC correction 2.
Wheat can be expected to fall further toward the next support level 664.50 (low of wave (v) from July and the target for the completion of the active wave 4).
• Likely to fall to support level 664.50
Wheat continues to fall after recently breaking the round support level 700.00, which is the lower boundary of the narrow sideways price range the price has been trading in from the end of August.
The breakout of the support level 700.00 accelerated the active short-term ABC correction 2.
Wheat can be expected to fall further toward the next support level 664.50 (low of wave (v) from July and the target for the completion of the active wave 4).
#NZDUSD reversed from support level 0.7085
• Likely to test resistance level 0.7170
NZDUSD recently reversed up from the key support level 0.7085 (former key resistance level which has been reversing the price from the end of June).
The upward reversal from the support level 0.7085 stopped the earlier short-term downward ABC correction 2.
NZDUSD can be expected to rise further toward the next resistance level 0.7170 (top of the previous sharp upward impulse wave 1).
• Likely to test resistance level 0.7170
NZDUSD recently reversed up from the key support level 0.7085 (former key resistance level which has been reversing the price from the end of June).
The upward reversal from the support level 0.7085 stopped the earlier short-term downward ABC correction 2.
NZDUSD can be expected to rise further toward the next resistance level 0.7170 (top of the previous sharp upward impulse wave 1).
Demand for risk assets in financial markets continues to shrink with two significant drivers.
The US S&P500 came under pressure during the New York session on Friday, with pressure intensifying towards the close of trading, reflecting the wariness of professional managers. The index is again a couple of steps away from its 50-day moving average.
The index has fallen to this line around the middle of each month since May, and each time it finds support on dips there.
However, it is dangerous to rely on correlations in the markets as they break too frequently. It is worth paying attention to the performance of the American stocks near the 50-day average and not deciding for a short-term move before it tests these levels.
Consolidation under 4430 could launch a deeper correction towards the 200 SMA at 4100. A pullback from 4430 would focus on returning to the historical highs above 4550 within just a week or two.
The US S&P500 came under pressure during the New York session on Friday, with pressure intensifying towards the close of trading, reflecting the wariness of professional managers. The index is again a couple of steps away from its 50-day moving average.
The index has fallen to this line around the middle of each month since May, and each time it finds support on dips there.
However, it is dangerous to rely on correlations in the markets as they break too frequently. It is worth paying attention to the performance of the American stocks near the 50-day average and not deciding for a short-term move before it tests these levels.
Consolidation under 4430 could launch a deeper correction towards the 200 SMA at 4100. A pullback from 4430 would focus on returning to the historical highs above 4550 within just a week or two.
Two of the world's largest economies are in sync with pressure on their fintech giants.
Access to user data and the growth of ecosystems have effectively created new monopolists that have lately been profiting lavishly from this information themselves and preventing others from doing so.
In 2007, the phrase "too big to fail" became widespread as the government bailed out big banks and manufacturing companies. Now we are witnessing a U-turn, with governments intent on raising taxes on corporations and limiting their monopoly in certain sectors or crushing companies that have become frighteningly large for even the US and Chinese governments, the world's two largest economies by a wide margin.
China presses Alibaba to spin off its financial arm, Ant Group, into a separate company with state ownership. Restrictions on the use of user data and the need to share it with the government deprive fintech of an essential competitive advantage, causing a reassessment of the sector.
Access to user data and the growth of ecosystems have effectively created new monopolists that have lately been profiting lavishly from this information themselves and preventing others from doing so.
In 2007, the phrase "too big to fail" became widespread as the government bailed out big banks and manufacturing companies. Now we are witnessing a U-turn, with governments intent on raising taxes on corporations and limiting their monopoly in certain sectors or crushing companies that have become frighteningly large for even the US and Chinese governments, the world's two largest economies by a wide margin.
China presses Alibaba to spin off its financial arm, Ant Group, into a separate company with state ownership. Restrictions on the use of user data and the need to share it with the government deprive fintech of an essential competitive advantage, causing a reassessment of the sector.
At the same time, fintech is also under pressure in the US. On Friday, Apple lost a lawsuit with Epic Games and must now allow companies to use payment services to bypass those approved on the Appstore.
This will result in a loss of billions of dollars a year in revenue. Investors fear that this could be the start of a big wave of pressure on fintech, which has concentrated control first over user data, then over financial flows, and has already started profiting from this information.
Like Alibaba for China and Apple and Google for the US, those companies may just be too big to be.
This will result in a loss of billions of dollars a year in revenue. Investors fear that this could be the start of a big wave of pressure on fintech, which has concentrated control first over user data, then over financial flows, and has already started profiting from this information.
Like Alibaba for China and Apple and Google for the US, those companies may just be too big to be.
#CHFJPY reversed from support zone
• Likely to rise to resistance level 120.00
CHFJPY currency pair recently reversed up from the support zone lying between the key support level 119.25 (which has been reversing the price from the start of May), 50% Fibonacci correction of the upward impulse from March and the lower daily Bollinger Band.
The upward reversal from the support zone stopped the previous medium-term ABC correction (2).
CHFJPY can be expected to rise further toward the next resistance level 120.00 (top of the previous minor correction (ii) from the start of September).
• Likely to rise to resistance level 120.00
CHFJPY currency pair recently reversed up from the support zone lying between the key support level 119.25 (which has been reversing the price from the start of May), 50% Fibonacci correction of the upward impulse from March and the lower daily Bollinger Band.
The upward reversal from the support zone stopped the previous medium-term ABC correction (2).
CHFJPY can be expected to rise further toward the next resistance level 120.00 (top of the previous minor correction (ii) from the start of September).
#Gold reversed from support zone
• Likely to rise to resistance level 1820.00
Gold recently reversed up from the support zone lying between the support level 1780.00 (which has been reversing the price from the middle of August), 38.2% Fibonacci correction of the upward wave (D) from last month and the lower daily Bollinger Band.
The upward reversal from the support zone started the active short-term correction B.
Gold can be expected to rise further toward the next resistance level 1820.00 (target price for the completion of the active wave B).
• Likely to rise to resistance level 1820.00
Gold recently reversed up from the support zone lying between the support level 1780.00 (which has been reversing the price from the middle of August), 38.2% Fibonacci correction of the upward wave (D) from last month and the lower daily Bollinger Band.
The upward reversal from the support zone started the active short-term correction B.
Gold can be expected to rise further toward the next resistance level 1820.00 (target price for the completion of the active wave B).
US CPI is in the spotlight today. Investors expect a slowdown in the year-over-year growth rate from the current 5.4% (it’s a high of the last 30 years).
The wait-and-see attitude of the markets probably reduced the degree of pressure on the US stock prices, where indices managed to turn higher intraday and close in the green zone after four sessions of decline.
Inflation data can add to market volatility by triggering a reassessment of Fed policy expectations, affecting currencies, equities, and gold prices.
The PPI data showed a decline in the monthly price growth rate, but was enough to push the annual inflation rate further upwards.
Furthermore, the overall price growth rate remains distinctly above the Fed's target, exceeds the average inflation rate of the last 20 years (2.2% for PPI and 2.1% for CPI) and removes the anchor of inflation expectations.
The wait-and-see attitude of the markets probably reduced the degree of pressure on the US stock prices, where indices managed to turn higher intraday and close in the green zone after four sessions of decline.
Inflation data can add to market volatility by triggering a reassessment of Fed policy expectations, affecting currencies, equities, and gold prices.
The PPI data showed a decline in the monthly price growth rate, but was enough to push the annual inflation rate further upwards.
Furthermore, the overall price growth rate remains distinctly above the Fed's target, exceeds the average inflation rate of the last 20 years (2.2% for PPI and 2.1% for CPI) and removes the anchor of inflation expectations.
Higher inflation figures would raise again a question of accelerating the withdrawal of stimulus. If data is firmly above forecasts it will revive speculation that the Fed is supposed to announce the start of a QE rollback as soon as the next week. These expectations have fallen sharply after the disappointingly weak labour market figures at the beginning of the month. Several other indicators also demonstrated a loss of economic growth momentum.
High inflation figures have the potential to bring back correction sentiment in equity markets after a brief pause. Annual inflation above 5.5% might be a strong reason for the S&P500 to break support at its 50-day moving average (now at 4430), sending the index to test the August lows at 4353 and even trigger a deeper correction towards 4100.
High inflation figures have the potential to bring back correction sentiment in equity markets after a brief pause. Annual inflation above 5.5% might be a strong reason for the S&P500 to break support at its 50-day moving average (now at 4430), sending the index to test the August lows at 4353 and even trigger a deeper correction towards 4100.
Gold, hovering around $1790 since last Thursday, might take an even harder hit. The bears are waiting for a good signal to launch an attack. It is now holding it below significant levels, a major round level of $1800 and under the 200 and 50-day moving averages. The first of these averages have been in place for the last two and a half months.
Gold stocks have continued to fall in recent days, losing 3-4% over the last month, although gold prices have been little changed over the same time, reflecting disbelief in the sector's prospects.
Meanwhile, uncertainty over the Fed's future moves and inflation is now relatively high. The closest similar period in history was in 2011-2012 when gold prices fluctuated between $1530 and 1800. Now a similar sideways movement is in the range of $1690-1900.
The inability to steadily overcome $1800 in previous weeks and weak interest in gold stocks suggest that in the coming days, we will see a move towards the lower boundary of the range to the area of $1690.
Gold stocks have continued to fall in recent days, losing 3-4% over the last month, although gold prices have been little changed over the same time, reflecting disbelief in the sector's prospects.
Meanwhile, uncertainty over the Fed's future moves and inflation is now relatively high. The closest similar period in history was in 2011-2012 when gold prices fluctuated between $1530 and 1800. Now a similar sideways movement is in the range of $1690-1900.
The inability to steadily overcome $1800 in previous weeks and weak interest in gold stocks suggest that in the coming days, we will see a move towards the lower boundary of the range to the area of $1690.