A decisive failure below would confirm that we see the Dollar moving into a decline and not just a correction in a long-term uptrend. In this scenario, the Dollar Index heads into the 90-100 area, where it has been comfortable since 2015, with a potential pullback to the upper bound of this range in the first quarter of 2023.
History has other examples. In late 2008, two weeks of a significant sell-off in the dollar were followed by three months of gains, and the DXY rewrote local highs, finally reversing only in March 2009. However, it is essential to remember that in both March 2020 and March 2009, the EUR reversal was sustained when supported by the equity market surge we also witnessed last week.
📣Trade responsibly with fxpro.com
History has other examples. In late 2008, two weeks of a significant sell-off in the dollar were followed by three months of gains, and the DXY rewrote local highs, finally reversing only in March 2009. However, it is essential to remember that in both March 2020 and March 2009, the EUR reversal was sustained when supported by the equity market surge we also witnessed last week.
📣Trade responsibly with fxpro.com
#WaveAnalysis
#CADCHF reversed from support level 0.7100
• Likely to rise to resistance level 0.7200
CADCHF recently reversed up from the key support level 0.7100 (which stopped the sharp downtrend in September), standing near the lower daily Bollinger Band.
The upward reversal from the support level 0.7100 stopped the earlier short-term impulse wave 3.
Given the oversold reading on the daily Stochastic, CADCHF can be expected to rise further toward the next resistance level 0.7200.
📣Trade responsibly with fxpro.com
#CADCHF reversed from support level 0.7100
• Likely to rise to resistance level 0.7200
CADCHF recently reversed up from the key support level 0.7100 (which stopped the sharp downtrend in September), standing near the lower daily Bollinger Band.
The upward reversal from the support level 0.7100 stopped the earlier short-term impulse wave 3.
Given the oversold reading on the daily Stochastic, CADCHF can be expected to rise further toward the next resistance level 0.7200.
📣Trade responsibly with fxpro.com
#WaveAnalysis
#CADJPY reversed from support level 104.90
• Likely to rise to resistance level 107.25
CADJPY reversed up from the key support level 104.90 (which has been reversing the price from August), 50% Fibonacci correction of the upward impulse form May, standing near the lower daily Bollinger Band.
The upward reversal from the support level 104.90 stopped the earlier short-term impulse wave (iii).
Given the clear daily uptrend, CADJPY can be expected to rise further toward the next resistance level 107.25 (former support from the end of October).
📣Trade responsibly with fxpro.com
#CADJPY reversed from support level 104.90
• Likely to rise to resistance level 107.25
CADJPY reversed up from the key support level 104.90 (which has been reversing the price from August), 50% Fibonacci correction of the upward impulse form May, standing near the lower daily Bollinger Band.
The upward reversal from the support level 104.90 stopped the earlier short-term impulse wave (iii).
Given the clear daily uptrend, CADJPY can be expected to rise further toward the next resistance level 107.25 (former support from the end of October).
📣Trade responsibly with fxpro.com
Eurozone industrial production: a meaningful boost in September
According to the latest estimates, Eurozone industrial production added 0.9% for September and 4.9% y/y. The figures are much better than the expected +0.1% m/m and 2.8% y/y, showing that the euro-region economy is in no hurry to slip into recession despite high energy prices.
The seasonally adjusted index was at its highest level in almost five years, remaining within the framework of multi-year global stagnation. The apparent reason for the sector's resilience is the massive backlog of orders formed on the back of the easing of pandemic restrictions.
There are two sides to the solid industrial production figures in the Eurozone. The strong figures for September create a high base from which a further decline may seem particularly deep and painful. On the other side, they show the relative vitality of the European economy and its positive reaction to the collapse of the euro.
According to the latest estimates, Eurozone industrial production added 0.9% for September and 4.9% y/y. The figures are much better than the expected +0.1% m/m and 2.8% y/y, showing that the euro-region economy is in no hurry to slip into recession despite high energy prices.
The seasonally adjusted index was at its highest level in almost five years, remaining within the framework of multi-year global stagnation. The apparent reason for the sector's resilience is the massive backlog of orders formed on the back of the easing of pandemic restrictions.
There are two sides to the solid industrial production figures in the Eurozone. The strong figures for September create a high base from which a further decline may seem particularly deep and painful. On the other side, they show the relative vitality of the European economy and its positive reaction to the collapse of the euro.
In absolute terms, the Eurozone recession may not be as deep as feared a few months ago, despite high energy costs and a sharp rise in the ECB rate.
We note that commodity prices have fallen significantly in recent months. A relatively strong economy by the start of the extreme hike cycle forms more room for an ECB rate hike, which is suitable for the euro.
The EURUSD will likely face a few obstacles for the upside up to the area of 1.0400-1.0430, where the 200-day MA and the support of the pair in May-June are concentrated. Here, the pair could face local profit-taking, and there will be a fierce tug-of-war between the dollar bulls and the bears in the markets.
📣Trade responsibly with fxpro.com
We note that commodity prices have fallen significantly in recent months. A relatively strong economy by the start of the extreme hike cycle forms more room for an ECB rate hike, which is suitable for the euro.
The EURUSD will likely face a few obstacles for the upside up to the area of 1.0400-1.0430, where the 200-day MA and the support of the pair in May-June are concentrated. Here, the pair could face local profit-taking, and there will be a fierce tug-of-war between the dollar bulls and the bears in the markets.
📣Trade responsibly with fxpro.com
❤3👍3
#Bitcoin is trading in the $16.7K area (+1.6% in 24 hours), a significant consolidation area of the past five days. It was helped back to these levels by the news of Binance launching a fund to help crypto companies experiencing temporary liquidity problems.
On the intraday charts of BTCUSD, there is a notable resistance area near the current price. In Ethereum, the situation is very similar, and the price fails to develop a growth above $1250 (+2.2% in 24 hours). The two most popular cryptocurrencies have the widest share of institutional investors, whose confidence in the sector has been eroded recently. It is their professional unloading into the market that we are now seeing on the charts.
The entire crypto market is more enthusiastic, adding 4.3% in capitalisation overnight to $841B, according to CoinMarketCap estimates.
CoinShares said crypto investments inflow was $42M last week, the highest in three months. Altcoin basket products attracted the highest since June by $8M.
On the intraday charts of BTCUSD, there is a notable resistance area near the current price. In Ethereum, the situation is very similar, and the price fails to develop a growth above $1250 (+2.2% in 24 hours). The two most popular cryptocurrencies have the widest share of institutional investors, whose confidence in the sector has been eroded recently. It is their professional unloading into the market that we are now seeing on the charts.
The entire crypto market is more enthusiastic, adding 4.3% in capitalisation overnight to $841B, according to CoinMarketCap estimates.
CoinShares said crypto investments inflow was $42M last week, the highest in three months. Altcoin basket products attracted the highest since June by $8M.
The Swiss Producer and Import Price Index was virtually unchanged in October, slowing down to 4.9% y/y against 5.4% a month earlier and a peak of 5.9% in June.
In contrast to its larger eurozone neighbours, the PIP index is at the same level as in June. The USA has the same result, while in the Eurozone they rose by 10.5%, Germany by 16%, and the UK by 2%. From this point of view, Switzerland’s inflation is the least problematic among almost developed economies with popular currencies.
However, it is noteworthy that members of the Swiss National Bank remain hawkish, warning yesterday of a willingness to intervene further in the market and noting that they continue to write inflation down as a threat.
Historically, Switzerland has been characterised by low inflation pressures for reasons from capital inflows into the domestic banking system to a chronically substantial trade surplus and a high standard of living. And we can see that the central bank has not abandoned its values.
In contrast to its larger eurozone neighbours, the PIP index is at the same level as in June. The USA has the same result, while in the Eurozone they rose by 10.5%, Germany by 16%, and the UK by 2%. From this point of view, Switzerland’s inflation is the least problematic among almost developed economies with popular currencies.
However, it is noteworthy that members of the Swiss National Bank remain hawkish, warning yesterday of a willingness to intervene further in the market and noting that they continue to write inflation down as a threat.
Historically, Switzerland has been characterised by low inflation pressures for reasons from capital inflows into the domestic banking system to a chronically substantial trade surplus and a high standard of living. And we can see that the central bank has not abandoned its values.
👍1
Asia slows more than expected
The statistics packages from China and Japan - the largest economies in the Asian region - came out below expectations, highlighting weak domestic demand and production.
Japan's economy lost 0.3% in the third quarter while it was expected to grow by the same amount. Meanwhile, real GDP added 1.8% y/y. A jump in imports was responsible for the decrease while private consumption showed a relatively moderate positive contribution.
Industrial production lost 1.9% in September, reversing a sharp turnaround after three months of growth, during which the index increased by 13.4%. A jump in energy prices prevents production from taking full advantage of the weaker yen. China's slowdown will likely constrain Japan's industry by not giving it enough orders.
The statistics packages from China and Japan - the largest economies in the Asian region - came out below expectations, highlighting weak domestic demand and production.
Japan's economy lost 0.3% in the third quarter while it was expected to grow by the same amount. Meanwhile, real GDP added 1.8% y/y. A jump in imports was responsible for the decrease while private consumption showed a relatively moderate positive contribution.
Industrial production lost 1.9% in September, reversing a sharp turnaround after three months of growth, during which the index increased by 13.4%. A jump in energy prices prevents production from taking full advantage of the weaker yen. China's slowdown will likely constrain Japan's industry by not giving it enough orders.
China noted a 0.5% y/y fall in retail sales thanks to 0-covid restrictions. These are gradually easing but remain much more restrained than in other major economies worldwide. Industrial Production growth slowed to 5% y/y last month versus 6.3% in September.
Weighing retail sales and manufacturing numbers would be enough of a signal for the government to step up support to the economy.
Considering the weak data from Japan and China, their currencies have particularly strengthened this month by 6.5% and 4%, respectively. Currency volatility risks hurting exporters for whom exchange rate stability might be a better option after a slump since the start of the year.
Weighing retail sales and manufacturing numbers would be enough of a signal for the government to step up support to the economy.
Considering the weak data from Japan and China, their currencies have particularly strengthened this month by 6.5% and 4%, respectively. Currency volatility risks hurting exporters for whom exchange rate stability might be a better option after a slump since the start of the year.
The British pound is on the offensive, having risen to a three-month high against the dollar thanks to a developing correction in the latter, market stabilisation following the change of government and pro-inflationary news.
Jobless claims rose by 3.3K in October after a 3.9K increase in September. September's data was an impressive revision from the initially reported 25.5K jump. Statistics now point to stabilisation in the number of unemployed near 1.5m - 2009-2013 levels. A month ago, the UK labour market was losing jobs rather briskly.
More positivity comes from the wage dynamics. Taking bonuses into account, they are up 6% in the three months to August, better than the 5.5% a month earlier. In addition, rumours are circulating about the Prime Minister's intention to raise the minimum wage, which could further push wages.
A more substantial than previously estimated labour market and new signs of rising wages create more incentive for the Bank of England to raise interest rates actively.
Jobless claims rose by 3.3K in October after a 3.9K increase in September. September's data was an impressive revision from the initially reported 25.5K jump. Statistics now point to stabilisation in the number of unemployed near 1.5m - 2009-2013 levels. A month ago, the UK labour market was losing jobs rather briskly.
More positivity comes from the wage dynamics. Taking bonuses into account, they are up 6% in the three months to August, better than the 5.5% a month earlier. In addition, rumours are circulating about the Prime Minister's intention to raise the minimum wage, which could further push wages.
A more substantial than previously estimated labour market and new signs of rising wages create more incentive for the Bank of England to raise interest rates actively.
GBPUSD surpassed 1.19 on Tuesday, adding more than 15% to the lows at 1.0330 set on September 26th. The Cable overcame a pullback of more than 38.2% of the amplitude of the decline from the highs of 2021 to the lows of September, a significant Fibonacci retracement level. Breaking this mark indicates that we see more than a corrective bounce in the Pound before a new round of decline.
However, despite the impressive size of the rally of the last almost two months, the Pound still has the potential to rally further due to the extreme previous oversold condition. The nearest local bullish target looks to be the 1.2200 area, where the pair received support on declines in 2016, 2019 and 2020.
There are chances that this area will now turn into an equally significant resistance. This area is also close to the 50% mark of the decline, a move above which could clear the way further up.
📣Trade responsibly with fxpro.com
However, despite the impressive size of the rally of the last almost two months, the Pound still has the potential to rally further due to the extreme previous oversold condition. The nearest local bullish target looks to be the 1.2200 area, where the pair received support on declines in 2016, 2019 and 2020.
There are chances that this area will now turn into an equally significant resistance. This area is also close to the 50% mark of the decline, a move above which could clear the way further up.
📣Trade responsibly with fxpro.com
US PPI gives more encouraging signals, but markets may have a break
Inflation in the USA continues to slow faster than expected. In October, PPI showed a gain of 0.2% m/m and 8.0% y/y against expectations of 0.4% and 8.3%. Producer prices often leads consumer inflation trends. For example, CPI peaked in June, three months after the PPI.
The core producer price index slowed to 6.7% y/y last month against a peak of 9.7% in June. This is a significant indirect sign that inflation is not spreading as dangerously through the economy as feared.
The slowdown in US inflation caused an impressive boost to risk-sensitive assets as it reassured markets that the Fed would slow the rate hikes in a 50-point move instead of 75 in December.
Inflation in the USA continues to slow faster than expected. In October, PPI showed a gain of 0.2% m/m and 8.0% y/y against expectations of 0.4% and 8.3%. Producer prices often leads consumer inflation trends. For example, CPI peaked in June, three months after the PPI.
The core producer price index slowed to 6.7% y/y last month against a peak of 9.7% in June. This is a significant indirect sign that inflation is not spreading as dangerously through the economy as feared.
The slowdown in US inflation caused an impressive boost to risk-sensitive assets as it reassured markets that the Fed would slow the rate hikes in a 50-point move instead of 75 in December.
The Nasdaq100 index was above 12,000, gaining over 2.5% since the start of the day; EURUSD was a step up from 1.0450. Nevertheless, don't expect a repeat of last week's rally after the CPI release: much of it is already priced in. In addition, the markets are close to sensitive trend levels. The EURUSD and the Dollar Index are testing the 200 SMAs, which are essential trend lines.
Crossing at high rates often proves to be a strong signal of a long-term trend change. The S&P500 tries to get a foothold above the significant round level of 4000 and trades around its 200 SMA. Since the second half of April, its approach has intensified the sell-off in the index, taking 10% off in seven sessions at the end of April and in ten sessions in August.
Short-term traders should be prepared that such significant levels in these global market benchmarks will prove to be a tough nut to crack, and the buoyant growth of the markets will be put on hold for a while.
📣Trade responsibly with fxpro.com
Crossing at high rates often proves to be a strong signal of a long-term trend change. The S&P500 tries to get a foothold above the significant round level of 4000 and trades around its 200 SMA. Since the second half of April, its approach has intensified the sell-off in the index, taking 10% off in seven sessions at the end of April and in ten sessions in August.
Short-term traders should be prepared that such significant levels in these global market benchmarks will prove to be a tough nut to crack, and the buoyant growth of the markets will be put on hold for a while.
📣Trade responsibly with fxpro.com
👍2
#WaveAnalysis
#Moderna broke resistance level 180.00
• Likely to rise to resistance level 197.15
Moderna recently broke the resistance level 180.00 (top of the previous minor correction 2 from the middle of August).
The breakout of the resistance level 180.00 accelerated the active short-term impulse wave C of the ABC correction (2) from the end of September.
Moderna can be expected to rise further toward the next resistance level 197.15 (former monthly high from the start of August).
📣Trade responsibly with fxpro.com
#Moderna broke resistance level 180.00
• Likely to rise to resistance level 197.15
Moderna recently broke the resistance level 180.00 (top of the previous minor correction 2 from the middle of August).
The breakout of the resistance level 180.00 accelerated the active short-term impulse wave C of the ABC correction (2) from the end of September.
Moderna can be expected to rise further toward the next resistance level 197.15 (former monthly high from the start of August).
📣Trade responsibly with fxpro.com
#WaveAnalysis
#USDCHF reversed up from support level 0.9380
• Likely to rise to resistance level 0.9485
USDCHF recently reversed up from the support level 0.9380 (former multi-month low from the start of August) standing below the lower daily Bollinger Band.
The upward reversal from the support level 0.9380 stopped the earlier short-term impulse wave (iii) of the sharp C-sequence from the middle of October.
Given the oversold daily Stochastic, USDCHF can be expected to rise further toward the next resistance level 0.9485 (former monthly low from September).
📣Trade responsibly with fxpro.com
#USDCHF reversed up from support level 0.9380
• Likely to rise to resistance level 0.9485
USDCHF recently reversed up from the support level 0.9380 (former multi-month low from the start of August) standing below the lower daily Bollinger Band.
The upward reversal from the support level 0.9380 stopped the earlier short-term impulse wave (iii) of the sharp C-sequence from the middle of October.
Given the oversold daily Stochastic, USDCHF can be expected to rise further toward the next resistance level 0.9485 (former monthly low from September).
📣Trade responsibly with fxpro.com
#Bitcoin is trading at around $16.8K with no significant changes overnight and in the consolidation area of the last five days.
The panic sell-off appears to be over, with key stablecoins regaining their pegs. The market capitalisation stands at $847 billion (+0.2% overnight).
Bitcoin is consolidating near the 23.6% retracement of the 5-10 November collapse. Failure to go higher indicates heavy selling pressure, suggesting a higher chance of losing 1k in value than going up by the same amount.
This pattern suggests that if it fails under $15.6K (the low of the drop), the next target for the bears will be the 12K area. This is also where the 2019 cyclical highs and the August 2020 pivot area are located.
📣Trade responsibly with fxpro.com
The panic sell-off appears to be over, with key stablecoins regaining their pegs. The market capitalisation stands at $847 billion (+0.2% overnight).
Bitcoin is consolidating near the 23.6% retracement of the 5-10 November collapse. Failure to go higher indicates heavy selling pressure, suggesting a higher chance of losing 1k in value than going up by the same amount.
This pattern suggests that if it fails under $15.6K (the low of the drop), the next target for the bears will be the 12K area. This is also where the 2019 cyclical highs and the August 2020 pivot area are located.
📣Trade responsibly with fxpro.com