#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).
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#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).
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#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).
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#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).
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#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.
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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.
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The probable peak of UK Inflation
The UK Consumer Price Index delivered another "positive" surprise, adding 2% for October, above the average forecast of 1.7%.
Annual inflation accelerated to 11.1% against 10.1% previously and the forecast 10.7%. Inflationary pressures are much stronger here than in the USA and China, which reported a stronger-than-expected slowdown last month but are in line with continuing escalating price tensions in Europe.
The UK Consumer Price Index delivered another "positive" surprise, adding 2% for October, above the average forecast of 1.7%.
Annual inflation accelerated to 11.1% against 10.1% previously and the forecast 10.7%. Inflationary pressures are much stronger here than in the USA and China, which reported a stronger-than-expected slowdown last month but are in line with continuing escalating price tensions in Europe.
Producer prices are slowing their growth rate. PPI input prices added 0.6% m/m and 19.2% y/y against 20.7% a month earlier and peaked at 24.3% in June. From July to October, this index added 0.66%, suggesting an annulated increase of just under 2% - a decisive cooling, though not a price correction.
The PPI of producer price output slowed to 14.7% from 16.3% in September and a peak of 17.3% in July. For the three months, the index added 0.8%, reaching a trajectory of 3.3% in annulated terms.
Producer price development suggests that the following inflation report in November will show a deceleration of consumer price inflation. So, the current 11.1% y/y CPI could be the peak level for years.
Investors and traders are more concerned about how this will affect Bank of England policy and, thus, the British markets. It may not affect it because the BoE had earlier forecasted inflation beyond 11%, so inflation stays on the trajectory that the BoE envisages.
The PPI of producer price output slowed to 14.7% from 16.3% in September and a peak of 17.3% in July. For the three months, the index added 0.8%, reaching a trajectory of 3.3% in annulated terms.
Producer price development suggests that the following inflation report in November will show a deceleration of consumer price inflation. So, the current 11.1% y/y CPI could be the peak level for years.
Investors and traders are more concerned about how this will affect Bank of England policy and, thus, the British markets. It may not affect it because the BoE had earlier forecasted inflation beyond 11%, so inflation stays on the trajectory that the BoE envisages.
Anyway, the central bank's comments will not be long in coming as there will be a hearing of its members in a special parliamentary committee later today. As these hearings coincide with the release of the new inflation data, the focus will be on this issue.
The Bank of England will likely highlight the work on rate hikes that started in November 2021 and hint at further hikes in the foreseeable future in increased increments of 50-75 points. It also cannot be ruled out that hawkish comments will accelerate the strengthening of GBPUSD into the 1.2200 area, from where we saw the start of the last peak in August. A decisive move higher would signify the markets' belief that the UK is on the road to recovery, having avoided the worst-case scenario.
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The Bank of England will likely highlight the work on rate hikes that started in November 2021 and hint at further hikes in the foreseeable future in increased increments of 50-75 points. It also cannot be ruled out that hawkish comments will accelerate the strengthening of GBPUSD into the 1.2200 area, from where we saw the start of the last peak in August. A decisive move higher would signify the markets' belief that the UK is on the road to recovery, having avoided the worst-case scenario.
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#Silver is testing the $22 per ounce mark today and crossed it briefly yesterday. Although Gold marks the fifth consecutive session of back-to-back gains, Silver may have been one step ahead in this market cycle.
In early November, the price of Silver pushed up from the 50-day moving average, which had worked as a support for a week and a half before, as the metal was bought off intraday on dips under this line.
Further, while the S&P500 and stock markets, in general, were recovering from the not-so-dovish Fed comments, Silver rallied more than 7% on solid NFP data, leaving the other precious metals behind. This was a clear game-changer event for this market.
By rising in the following days, the price has reached its 200-day moving average, which Gold, S&P500 and EURUSD have yet to do. Since late last week, Silver has been gaining support on declines towards this line, confirming a change in the long-term trend.
Silver has already lingered near $22 in May and June, digesting the April collapse.
In early November, the price of Silver pushed up from the 50-day moving average, which had worked as a support for a week and a half before, as the metal was bought off intraday on dips under this line.
Further, while the S&P500 and stock markets, in general, were recovering from the not-so-dovish Fed comments, Silver rallied more than 7% on solid NFP data, leaving the other precious metals behind. This was a clear game-changer event for this market.
By rising in the following days, the price has reached its 200-day moving average, which Gold, S&P500 and EURUSD have yet to do. Since late last week, Silver has been gaining support on declines towards this line, confirming a change in the long-term trend.
Silver has already lingered near $22 in May and June, digesting the April collapse.
There have also been repeated reversals in this area late last year and early this year. There might likely be some shake-out of market participants and partial profit-taking again.
The strong price momentum at the start of November and an even more impressive 9% rise in early October point to a demand, which might turn the market around. This bullish reversal is probably happening in Gold, but it is a more liquid and thus "noisy" instrument.
If we are correct, and after the local shake-out, silver goes further up, it could immediately target levels above $25, near the local peaks of March and April. If the strengthening does not fail again, the price may rise to $30 by August 2023.
It will be premature to talk about the possibility of reaching the highs of 2012 ($35) or 2011 ($50), but targets near $25 by the end of the year and $30 eight months later look achievable.
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The strong price momentum at the start of November and an even more impressive 9% rise in early October point to a demand, which might turn the market around. This bullish reversal is probably happening in Gold, but it is a more liquid and thus "noisy" instrument.
If we are correct, and after the local shake-out, silver goes further up, it could immediately target levels above $25, near the local peaks of March and April. If the strengthening does not fail again, the price may rise to $30 by August 2023.
It will be premature to talk about the possibility of reaching the highs of 2012 ($35) or 2011 ($50), but targets near $25 by the end of the year and $30 eight months later look achievable.
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Strong US retail sales may support USD
According to the latest U.S. Census Bureau estimate, US retail sales rose 1.3% in October. Americans' purchases rose by 8.4% y/y, although an inflation adjustment (7.7% y/y last month) spoils the impression of a sales boom.
On the other hand, the Fed is making the most significant effort in the last 40 years to cool consumer demand, so the current result is hardly satisfactory.
Strong retail sales (or above expectations) boost the dollar and often spur demand in the stock market. This time we can only see the first part of this rule working, as solid retail activity feeds an inflationary spiral.
In response to a strong labour market and retail activity, the Fed may return to a tighter monetary policy line, returning market participants’ focus to a higher final rate - closer to 5.5% versus 5%.
According to the latest U.S. Census Bureau estimate, US retail sales rose 1.3% in October. Americans' purchases rose by 8.4% y/y, although an inflation adjustment (7.7% y/y last month) spoils the impression of a sales boom.
On the other hand, the Fed is making the most significant effort in the last 40 years to cool consumer demand, so the current result is hardly satisfactory.
Strong retail sales (or above expectations) boost the dollar and often spur demand in the stock market. This time we can only see the first part of this rule working, as solid retail activity feeds an inflationary spiral.
In response to a strong labour market and retail activity, the Fed may return to a tighter monetary policy line, returning market participants’ focus to a higher final rate - closer to 5.5% versus 5%.
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#WaveAnalysis
#Tesla reversed from resistance level 200.00
• Likely to fall to support level 180.00
Tesla recently reversed down from the round resistance level 200.00 (previous monthly low from the middle of October), intersecting with the 38.2% Fibonacci correction of the downward impulse from October.
The downward reversal from the resistance level 200.00 continues the active short-term impulse wave 3 of the intermediate impulse wave (3) from September.
Given the clear daily downtrend, Tesla can be expected to fall further toward the next support level 180.00
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#Tesla reversed from resistance level 200.00
• Likely to fall to support level 180.00
Tesla recently reversed down from the round resistance level 200.00 (previous monthly low from the middle of October), intersecting with the 38.2% Fibonacci correction of the downward impulse from October.
The downward reversal from the resistance level 200.00 continues the active short-term impulse wave 3 of the intermediate impulse wave (3) from September.
Given the clear daily downtrend, Tesla can be expected to fall further toward the next support level 180.00
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#WaveAnalysis
#USDCAD reversed from support level 1.3215
• Likely to fall to resistance level 1.3400
USDCAD recently reversed up from the key support level 1.3215 (previous monthly high from the start of July), lower daily Bollinger Band, intersecting with the 38.2% Fibonacci correction of the downward impulse from October.
The upward reversal from the support level 1.3215 stopped the earlier short-term impulse wave (iii) of the higher impulse waves C and (B).
Given the clear daily uptrend and the oversold daily Stochastic, USDCAD can be expected to rise further toward the next resistance level 1.3400 (former low of wave (i) from the start of November).
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#USDCAD reversed from support level 1.3215
• Likely to fall to resistance level 1.3400
USDCAD recently reversed up from the key support level 1.3215 (previous monthly high from the start of July), lower daily Bollinger Band, intersecting with the 38.2% Fibonacci correction of the downward impulse from October.
The upward reversal from the support level 1.3215 stopped the earlier short-term impulse wave (iii) of the higher impulse waves C and (B).
Given the clear daily uptrend and the oversold daily Stochastic, USDCAD can be expected to rise further toward the next resistance level 1.3400 (former low of wave (i) from the start of November).
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#Bitcoin moved between $16.3K and $17.0K on Wednesday and is changing hands Thursday morning closer to the lower bound of yesterday's range. Some pressure on crypto comes from more wary financial markets, where major indices are down. The total capitalisation of the crypto market has fallen by 1.7% to $830bn in the last 24 hours.
On the technical analysis side, Bitcoin's failure to cross $17.0K looks like a corrective rebound to lock in profits before a new round of declines. This scenario will only become main after the price approaches local lows near $15.8K, opening the way to $12K.
#Ethereum is under more pressure, forming a sequence of declining intraday extremes. At the current price near $1200, we can see the dam-breaking effect at levels below $1100.
A similar pattern is seen in the overall cryptocurrency market capitalisation chart, where we see local reversals from lower levels.
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On the technical analysis side, Bitcoin's failure to cross $17.0K looks like a corrective rebound to lock in profits before a new round of declines. This scenario will only become main after the price approaches local lows near $15.8K, opening the way to $12K.
#Ethereum is under more pressure, forming a sequence of declining intraday extremes. At the current price near $1200, we can see the dam-breaking effect at levels below $1100.
A similar pattern is seen in the overall cryptocurrency market capitalisation chart, where we see local reversals from lower levels.
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#WTI oil is trading below $84, near last month's lows, having failed to experience a buying spurt following the week's inventory data.
While commercial inventories were down 5.4Mln Barrels compared to an expected 2MB decline, oil sales from the Strategic Reserve did not slow but slightly accelerated to 4.1MB last week compared to 3.6MB and 1.9MB in the prior two weeks. Commercial inventories are now 0.5% higher than in the same week a year earlier, while strategic reserves are down 35%.
Also, retail sales data released yesterday noted a 4% rise in fuel spending for October, with higher expenditure seen only from May to July at the height of the motor holiday season.
While commercial inventories were down 5.4Mln Barrels compared to an expected 2MB decline, oil sales from the Strategic Reserve did not slow but slightly accelerated to 4.1MB last week compared to 3.6MB and 1.9MB in the prior two weeks. Commercial inventories are now 0.5% higher than in the same week a year earlier, while strategic reserves are down 35%.
Also, retail sales data released yesterday noted a 4% rise in fuel spending for October, with higher expenditure seen only from May to July at the height of the motor holiday season.
Meanwhile, US oil producers are holding production at 12.1M BPD. While they are up and updating the number of wells in operation, drilling activity is still working more to replace retiring capacity rather than ramping up production.
We should also add the OPEC+ production cuts to wonder further why the oil price is not rising. Quite the opposite, WTI closed below its 50-day average on Wednesday and is now developing a decline, testing lows from late October as part of the downtrend of the last ten days.
We should also add the OPEC+ production cuts to wonder further why the oil price is not rising. Quite the opposite, WTI closed below its 50-day average on Wednesday and is now developing a decline, testing lows from late October as part of the downtrend of the last ten days.
If we take a broader perspective, the decline since November 7 was a second failed attempt to break above $93, the 61.8% Fibonacci level of the June-September decline. The new slide down to the 50-day average is another argument favouring bearish dominance.
Fundamentally oil is weak because more and more countries are moving from slowing growth to a contractionary phase. And many are predicting more of them early next year when the effects of the rate hikes that have already taken place will begin to show their full force.
Because oil is so sensitive to the economic cycle, it may continue to fall to the lows of September ($75) even if the dollar does not return to where it was in late September. If an economic recession hits most of the eurozone and the US, China, and India slow sharply, oil risks plunging as low as $50, heading towards the 161.8% level of the original slump.
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Fundamentally oil is weak because more and more countries are moving from slowing growth to a contractionary phase. And many are predicting more of them early next year when the effects of the rate hikes that have already taken place will begin to show their full force.
Because oil is so sensitive to the economic cycle, it may continue to fall to the lows of September ($75) even if the dollar does not return to where it was in late September. If an economic recession hits most of the eurozone and the US, China, and India slow sharply, oil risks plunging as low as $50, heading towards the 161.8% level of the original slump.
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Cooling US housing market
The number of building permits in the US fell by 2.4% to 1,526K, the lowest since June 2020, and is almost 20% below the peak a year ago. Housing starts fell by 4.2% to 1,425k.
During the pandemic, the housing market first collapsed due to lockdowns but then took flight, inflated by monetary and fiscal stimulus. This year, in addition to the halting of financial support programmes and another budgetary stimulus, Americans are dealing with the fastest rate of monetary tightening in 40 years, returning mortgage rates close to their 2007 peaks.
The number of building permits in the US fell by 2.4% to 1,526K, the lowest since June 2020, and is almost 20% below the peak a year ago. Housing starts fell by 4.2% to 1,425k.
During the pandemic, the housing market first collapsed due to lockdowns but then took flight, inflated by monetary and fiscal stimulus. This year, in addition to the halting of financial support programmes and another budgetary stimulus, Americans are dealing with the fastest rate of monetary tightening in 40 years, returning mortgage rates close to their 2007 peaks.
The market is pretty good, considering such meaningful fundamental shifts. But we note that the market is deflating at a pace comparable to the mortgage crisis, which began in 2006 and continued through 2009. Then it took about a year and a half of declines before the banking industry collapsed, and the Fed went from raising rates to lowering them.
October's reading looks slightly better than expected and has briefly boosted demand for the dollar and renewed the momentum of the declining stock markets. It slightly increases the chances that the Fed, although slowing the rate hike, is still far from stopping.
October's reading looks slightly better than expected and has briefly boosted demand for the dollar and renewed the momentum of the declining stock markets. It slightly increases the chances that the Fed, although slowing the rate hike, is still far from stopping.
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#WaveAnalysis
#Platinum reversed from resistance level 1030.00
• Likely to fall to support level 960.00
Platinum recently reversed down from the key resistance level 1030.00 (previous multi-month high from June) intersecting with the upper daily Bollinger Band and the resistance trendline of the daily up channel from September.
The downward reversal from the resistance level 1030.00 started the active short-term corrective wave 4.
Platinum can be expected to fall further toward the next support level 960.00 (target price for the completion of the active wave 4).
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#Platinum reversed from resistance level 1030.00
• Likely to fall to support level 960.00
Platinum recently reversed down from the key resistance level 1030.00 (previous multi-month high from June) intersecting with the upper daily Bollinger Band and the resistance trendline of the daily up channel from September.
The downward reversal from the resistance level 1030.00 started the active short-term corrective wave 4.
Platinum can be expected to fall further toward the next support level 960.00 (target price for the completion of the active wave 4).
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