An unexpected slowdown in Canadian prices
Canada's producer price index fell 0.4% in November, sharply contrasting with the expected 2.2% m/m increase after jumping 2.4% m/m. An even more shocking contrast was in the commodity price index, where the decline was 0.8% m/m instead of the forecast 3.2% m/m increase.
The annual growth rate for commodity prices fell to 8% after peaking at 42.6% in March. The producer price index added 9.7%, almost twice as slowly as in March.
Substantially weaker inflation data is a cause for speculative selling. But this momentum was not sustained on Monday, as the USDCAD sold off on the approach to the 1.3700 area, where the pair has been turning down since early December.
Over the past six weeks, USDCAD has rallied as the Bank of Canada, like the Fed, signalled a slowdown in rate hikes. Weak inflation data will allow Canada to reach the terminal rate level even earlier. On the other hand, slowing inflation enables the currency to retain its purchasing power.
Canada's producer price index fell 0.4% in November, sharply contrasting with the expected 2.2% m/m increase after jumping 2.4% m/m. An even more shocking contrast was in the commodity price index, where the decline was 0.8% m/m instead of the forecast 3.2% m/m increase.
The annual growth rate for commodity prices fell to 8% after peaking at 42.6% in March. The producer price index added 9.7%, almost twice as slowly as in March.
Substantially weaker inflation data is a cause for speculative selling. But this momentum was not sustained on Monday, as the USDCAD sold off on the approach to the 1.3700 area, where the pair has been turning down since early December.
Over the past six weeks, USDCAD has rallied as the Bank of Canada, like the Fed, signalled a slowdown in rate hikes. Weak inflation data will allow Canada to reach the terminal rate level even earlier. On the other hand, slowing inflation enables the currency to retain its purchasing power.
👍1
US construction slump reminiscent of 2005
The number of US building permits issued collapsed by 11.2% in November to 1,342K after falling by 3.3% a month earlier. Barring a dip in the pandemic, this low number of permits was mid-2019 when the Fed turned to cut rates to support waning economic growth.
The biggest thing the Fed can do in the coming months is to slow the rate hikes and hope for a pause in the hike in a quarter or two.
The number of housing starts fell by 0.5% following declines of 2.1% and 2.9% in the previous two months. The decline is not so steep here, but a clear downward trend is still in place.
The number of US building permits issued collapsed by 11.2% in November to 1,342K after falling by 3.3% a month earlier. Barring a dip in the pandemic, this low number of permits was mid-2019 when the Fed turned to cut rates to support waning economic growth.
The biggest thing the Fed can do in the coming months is to slow the rate hikes and hope for a pause in the hike in a quarter or two.
The number of housing starts fell by 0.5% following declines of 2.1% and 2.9% in the previous two months. The decline is not so steep here, but a clear downward trend is still in place.
👍1
The rate of decline in construction is now comparable to what we have seen since 2005. On the other hand, overall construction volumes are near 2017-2019 levels, which can be considered an essential watershed between a desired economic slowdown and an uncontrolled collapse.
The chill in housing real estate could be confirmed or denied in tomorrow's secondary home sales publication, where a second consecutive decline of more than 5% and a tenth consecutive month of decline are expected. Housing market weakness is terrible news for the dollar as it revives speculation that the Fed will stop hiking or reverse to lower rates sooner than the FOMC is currently forecasting.
📣Trade responsibly with fxpro.com
The chill in housing real estate could be confirmed or denied in tomorrow's secondary home sales publication, where a second consecutive decline of more than 5% and a tenth consecutive month of decline are expected. Housing market weakness is terrible news for the dollar as it revives speculation that the Fed will stop hiking or reverse to lower rates sooner than the FOMC is currently forecasting.
📣Trade responsibly with fxpro.com
#WaveAnalysis
#NZDCAD reversed from major resistance level 0.8760
• Likely to fall to support level 0.8500
NZDCAD recently reversed down from the major resistance level 0.8760 (which has been reversing the pair from last December, as can be seen below).
The downward reversal from the resistance level 0.8760 started the active short-term correction 4.
NZDCAD can be expected to fall further toward the next support level 0.8500 (forecast price for the completion of the active short-term correction 4).
📣Trade responsibly with fxpro.com
#NZDCAD reversed from major resistance level 0.8760
• Likely to fall to support level 0.8500
NZDCAD recently reversed down from the major resistance level 0.8760 (which has been reversing the pair from last December, as can be seen below).
The downward reversal from the resistance level 0.8760 started the active short-term correction 4.
NZDCAD can be expected to fall further toward the next support level 0.8500 (forecast price for the completion of the active short-term correction 4).
📣Trade responsibly with fxpro.com
#Bitcoin is trading near $16.8K on Wednesday morning, almost unchanged over 24 hours. The first cryptocurrency reaffirmed on Tuesday that it often acts as an indicator of financial market sentiment for the day. Its ability to halt the decline and record a slight rise was echoed later by crucial stock indices.
And that predictive ability is worrisome on Wednesday, as BTCUSD shows a slight downward bias, failing to build on Tuesday's gains. Taking a step back, we can see that the crypto market remains in a prolonged consolidation. Investors often pick up liquidity during such periods, and strong moves usually follow.
After a strong sell-off lasting more than a year, conditions are forming for a reversal to the upside, as the RSI on the weekly charts forms a bullish divergence. The 50-day MA, downtrend and 200-day average lines have dipped to 17350, 19350 and 20300, making it easier for the bulls to convince the world of a reversal.
And that predictive ability is worrisome on Wednesday, as BTCUSD shows a slight downward bias, failing to build on Tuesday's gains. Taking a step back, we can see that the crypto market remains in a prolonged consolidation. Investors often pick up liquidity during such periods, and strong moves usually follow.
After a strong sell-off lasting more than a year, conditions are forming for a reversal to the upside, as the RSI on the weekly charts forms a bullish divergence. The 50-day MA, downtrend and 200-day average lines have dipped to 17350, 19350 and 20300, making it easier for the bulls to convince the world of a reversal.
#WaveAnalysis
#NZDUSD reversed from key resistance level 0.6440
• Likely to fall to support level 0.6250
NZDUSD recently reversed down from the key resistance level 0.6440 (which has been reversing the pair from middle July, as can be seen below).
The resistance level 0.6440 was further strengthened by the nearby upper daily Bollinger Band and by the 61.8% Fibonacci correction of the downward impulse from last April.
NZDUSD can be expected to fall further toward the next support level 0.6250 (target price for the completion of the active short-term impulse wave (i)).
📣Trade responsibly with fxpro.com
#NZDUSD reversed from key resistance level 0.6440
• Likely to fall to support level 0.6250
NZDUSD recently reversed down from the key resistance level 0.6440 (which has been reversing the pair from middle July, as can be seen below).
The resistance level 0.6440 was further strengthened by the nearby upper daily Bollinger Band and by the 61.8% Fibonacci correction of the downward impulse from last April.
NZDUSD can be expected to fall further toward the next support level 0.6250 (target price for the completion of the active short-term impulse wave (i)).
📣Trade responsibly with fxpro.com
#WaveAnalysis
#GBPAUD reversed from resistance level 1.8200
• Likely to fall to support level 1.8000
GBPAUD earlier reversed down once again from the long-term resistance level 1.8200 (which has been reversing the pair from middle March, as can be seen from the daily GBPAUD chart below).
If the price closes today near the current levels it will form the daily candlesticks reversal pattern Bearish Engulfing.
Given the bearish divergence on the daily Stochastic indicator, GBPAUD can be expected to fall further toward the next support level 1.8000 (low of the previous correction 2).
📣Trade responsibly with fxpro.com
#GBPAUD reversed from resistance level 1.8200
• Likely to fall to support level 1.8000
GBPAUD earlier reversed down once again from the long-term resistance level 1.8200 (which has been reversing the pair from middle March, as can be seen from the daily GBPAUD chart below).
If the price closes today near the current levels it will form the daily candlesticks reversal pattern Bearish Engulfing.
Given the bearish divergence on the daily Stochastic indicator, GBPAUD can be expected to fall further toward the next support level 1.8000 (low of the previous correction 2).
📣Trade responsibly with fxpro.com
#WaveAnalysis
#GBPUSD falling inside minor correction 2
• Likely to fall to support level 1.1900
GBPUSD continues to fall inside the minor retracement 2, which started earlier from the key resistance level 1.2355 intersecting with the 61.8% Fibonacci correction of the weekly downward impulse from January.
The active wave 2 belongs to the intermediate impulse sequence (C) from the start of November.
Given the overriding weekly downtrend, GBPUSD can be expected to fall further toward the next support level 1.1900 (low of the earlier correction (b)).
📣Trade responsibly with fxpro.com
#GBPUSD falling inside minor correction 2
• Likely to fall to support level 1.1900
GBPUSD continues to fall inside the minor retracement 2, which started earlier from the key resistance level 1.2355 intersecting with the 61.8% Fibonacci correction of the weekly downward impulse from January.
The active wave 2 belongs to the intermediate impulse sequence (C) from the start of November.
Given the overriding weekly downtrend, GBPUSD can be expected to fall further toward the next support level 1.1900 (low of the earlier correction (b)).
📣Trade responsibly with fxpro.com
👍1
#WaveAnalysis
#Gold reversed from resistance level 1820.00
• Likely to fall to support level 1775.00
Gold today once again reversed down strongly from the resistance zone located between the resistance level 1820.00 (top of the previous impulse wave (1)) and the upper daily Bollinger Band.
Gold previously created the daily Evening Star candlesticks reversal pattern near the resistance level 1820.00 – highlighting the strength of this price level.
Given the multi-month downtrend, Gold can be expected to fall further toward the next support level 1775.00 (low of the earlier wave (ii)).
📣Trade responsibly with fxpro.com
#Gold reversed from resistance level 1820.00
• Likely to fall to support level 1775.00
Gold today once again reversed down strongly from the resistance zone located between the resistance level 1820.00 (top of the previous impulse wave (1)) and the upper daily Bollinger Band.
Gold previously created the daily Evening Star candlesticks reversal pattern near the resistance level 1820.00 – highlighting the strength of this price level.
Given the multi-month downtrend, Gold can be expected to fall further toward the next support level 1775.00 (low of the earlier wave (ii)).
📣Trade responsibly with fxpro.com
❤1
#WaveAnalysis
#Caterpillar reversed from major resistance zone
• Likely to fall to support level 230.00
Caterpillar earlier reversed down from the major resistance zone located between the resistance levels 240.00 (top of the previous impulse wave (1)) and the 245.00 (which stopped sharp uptrend at the start of 2021).
This resistance zone was further strengthened by the nearby upper daily and weekly Bollinger Bands.
Given the overbought weekly Stochastic, Caterpillar can be expected to fall further toward the next support level 230.00.
📣Trade responsibly with fxpro.com
#Caterpillar reversed from major resistance zone
• Likely to fall to support level 230.00
Caterpillar earlier reversed down from the major resistance zone located between the resistance levels 240.00 (top of the previous impulse wave (1)) and the 245.00 (which stopped sharp uptrend at the start of 2021).
This resistance zone was further strengthened by the nearby upper daily and weekly Bollinger Bands.
Given the overbought weekly Stochastic, Caterpillar can be expected to fall further toward the next support level 230.00.
📣Trade responsibly with fxpro.com
👍1
#Bitcoin's chart remains a horizontal straight line with several pulsations down and up over the past five weeks. The rate remains near $16.8K as the intraday dip of 1.6% to the $16.55K area was quickly redeemed at the close of trading in the US.
Total crypto market capitalisation remains near $810bn - one-third of levels one year ago. The market may need a real disaster, such as strict regulation for further declines. And without such news, current levels remain attractive for buying on Bitcoin declines. So many individual projects carry existential risks (which Bitcoin doesn't), and it takes building a broadly diversified portfolio of 100 or 500 coins to spread the risk across the portfolio.
Meanwhile, the 50-day moving average in BTCUSD has fallen to $17.1K. The bulls' task of giving a broad trend signal to break the bearish trend is getting easier. But the market needs more liquidity and faith in long-term potential amid this year's problems with cryptocurrencies and fears of regulation.
Total crypto market capitalisation remains near $810bn - one-third of levels one year ago. The market may need a real disaster, such as strict regulation for further declines. And without such news, current levels remain attractive for buying on Bitcoin declines. So many individual projects carry existential risks (which Bitcoin doesn't), and it takes building a broadly diversified portfolio of 100 or 500 coins to spread the risk across the portfolio.
Meanwhile, the 50-day moving average in BTCUSD has fallen to $17.1K. The bulls' task of giving a broad trend signal to break the bearish trend is getting easier. But the market needs more liquidity and faith in long-term potential amid this year's problems with cryptocurrencies and fears of regulation.
Japan’s ongoing inflation acceleration demands more from the BoJ
Japan boasts one of the slowest consumer price rises in the developed world. Data published Friday morning showed a 3.8% increase in prices in November compared to a year earlier, excluding fresh food and energy prices, an increase of 2.8% y/y.
Inflation in Japan is so low that the consumer price index (now at 103.9) is only 5.4% above its peak in 1997, and prices have made most of this increase over the last twenty months. In Japan, cash has thus lost far less purchasing power than in other developed countries. And that's the good news.
The bad news is that Japan is losing this feature. Consumer inflation continues to accelerate, while a reversal is in sight in the USA and Europe. Not least, the more than 30% weakening of the yen against the dollar between March and October has played a role in this. This factor still needs to be fully reflected in consumer prices, and an acceleration in the coming months promises to continue.
Japan boasts one of the slowest consumer price rises in the developed world. Data published Friday morning showed a 3.8% increase in prices in November compared to a year earlier, excluding fresh food and energy prices, an increase of 2.8% y/y.
Inflation in Japan is so low that the consumer price index (now at 103.9) is only 5.4% above its peak in 1997, and prices have made most of this increase over the last twenty months. In Japan, cash has thus lost far less purchasing power than in other developed countries. And that's the good news.
The bad news is that Japan is losing this feature. Consumer inflation continues to accelerate, while a reversal is in sight in the USA and Europe. Not least, the more than 30% weakening of the yen against the dollar between March and October has played a role in this. This factor still needs to be fully reflected in consumer prices, and an acceleration in the coming months promises to continue.
From the action of the BoJ earlier in the week, the Bank of Japan realises that it is better to switch from fighting falling prices to containing them. It seems unlikely that the widening of the yield corridor on 10-year bonds carried out earlier in the week is sufficient. Accelerating inflation and higher-than-expected inflation values will almost certainly force the BoJ to move out of negative rate territory at the start of next year, although an important step is unlikely.
Without a further move on the part of monetary policy, the yen again risks coming under pressure due to the vast interest rate differential with other reserve currencies, starting with the dollar. This means that without further monetary policy tightening, the #USDJPY will slide again, erasing the appreciation made in the last two months.
Without a further move on the part of monetary policy, the yen again risks coming under pressure due to the vast interest rate differential with other reserve currencies, starting with the dollar. This means that without further monetary policy tightening, the #USDJPY will slide again, erasing the appreciation made in the last two months.
#WaveAnalysis
#EURCHF reversed from resistance level 0.9920
• Likely to fall to support level 0.9815
EURCHF today reversed down once again from the powerful resistance level 0.9920 (which has been reversing the price from the start of July), intersecting with the upper daily Bollinger Band and the 50% Fibonacci correction of the sharp downward impulse from June.
The downward reversal from the resistance level 0.9920 stopped the previous short-term ABC correction 2.
Given the predominant daily downtrend, EURCHF can be expected to fall further toward the next support level 0.9815 (which stopped the previous waves a and (ii)).
📣Trade responsibly with fxpro.com
#EURCHF reversed from resistance level 0.9920
• Likely to fall to support level 0.9815
EURCHF today reversed down once again from the powerful resistance level 0.9920 (which has been reversing the price from the start of July), intersecting with the upper daily Bollinger Band and the 50% Fibonacci correction of the sharp downward impulse from June.
The downward reversal from the resistance level 0.9920 stopped the previous short-term ABC correction 2.
Given the predominant daily downtrend, EURCHF can be expected to fall further toward the next support level 0.9815 (which stopped the previous waves a and (ii)).
📣Trade responsibly with fxpro.com
❤2
#WaveAnalysis
#USDJPY reversed from key support level 131.60
• Likely to rise to resistance level 135.00
USDJPY recently reversed up from the key support level 131.60 (former monthly high from May), intersecting with the lower daily Bollinger Band and the 50% Fibonacci retracement of the upward trend from last year.
The support level 131.60 has been repeatedly reversing the price from the middle of June.
Given the clear daily uptrend, USDJPY can be expected to rise further toward the next resistance level 135.00 (former support which stopped the previous waves (A) and B).
📣Trade responsibly with fxpro.com
#USDJPY reversed from key support level 131.60
• Likely to rise to resistance level 135.00
USDJPY recently reversed up from the key support level 131.60 (former monthly high from May), intersecting with the lower daily Bollinger Band and the 50% Fibonacci retracement of the upward trend from last year.
The support level 131.60 has been repeatedly reversing the price from the middle of June.
Given the clear daily uptrend, USDJPY can be expected to rise further toward the next resistance level 135.00 (former support which stopped the previous waves (A) and B).
📣Trade responsibly with fxpro.com
❤2
#WaveAnalysis
#GBPCAD reversed from resistance level 1.6655
• Likely to fall to support level 1.6000
GBPCAD continues to fall inside the weekly downward retracement which started earlier from the key resistance level 1.6655 (former multi-year support level which has been reversing the price from the end of 2019).
The downward reversal from the resistance level 1.6655 previously formed the weekly Evening Star candlesticks reversal pattern.
Given the still overbought weekly Stochastic, GBPCAD can be expected to fall further toward the next round support level 1.6000.
📣Trade responsibly with fxpro.com
#GBPCAD reversed from resistance level 1.6655
• Likely to fall to support level 1.6000
GBPCAD continues to fall inside the weekly downward retracement which started earlier from the key resistance level 1.6655 (former multi-year support level which has been reversing the price from the end of 2019).
The downward reversal from the resistance level 1.6655 previously formed the weekly Evening Star candlesticks reversal pattern.
Given the still overbought weekly Stochastic, GBPCAD can be expected to fall further toward the next round support level 1.6000.
📣Trade responsibly with fxpro.com
👍3
#WaveAnalysis
#Brent Crude oil rising inside impulse wave C
• Likely to test resistance level 88.95
Brent Crude oil continues to rise inside the C-wave of the intermediate ABC correction (2) which previously broke the resistance level 83.30 intersecting with the daily down channel from November.
The breakout of the resistance level 83.30 added to the bullish pressure on Brent Crude oil –accelerating the active impulse wave C.
Brent Crude oil can be expected to rise further toward the next round resistance level 88.95 (top of wave 4 from the end of last year).
📣Trade responsibly with fxpro.com
#Brent Crude oil rising inside impulse wave C
• Likely to test resistance level 88.95
Brent Crude oil continues to rise inside the C-wave of the intermediate ABC correction (2) which previously broke the resistance level 83.30 intersecting with the daily down channel from November.
The breakout of the resistance level 83.30 added to the bullish pressure on Brent Crude oil –accelerating the active impulse wave C.
Brent Crude oil can be expected to rise further toward the next round resistance level 88.95 (top of wave 4 from the end of last year).
📣Trade responsibly with fxpro.com
👍1
#WaveAnalysis
#EURCHF reversed from support level 0.9825
• Likely to rise to resistance level 0.9920
EURCHF recently reversed up from the pivotal support level 0.9825 (lower boundary of the narrow sideways price range inside which the pair has been moving from the start of December).
The support level 0.9825 was further strengthened by the lower daily Bollinger band.
EURCHF can be expected to rise further toward the next resistance level 0.9920 (upper boundary of the active sideways price range).
📣Trade responsibly with fxpro.com
#EURCHF reversed from support level 0.9825
• Likely to rise to resistance level 0.9920
EURCHF recently reversed up from the pivotal support level 0.9825 (lower boundary of the narrow sideways price range inside which the pair has been moving from the start of December).
The support level 0.9825 was further strengthened by the lower daily Bollinger band.
EURCHF can be expected to rise further toward the next resistance level 0.9920 (upper boundary of the active sideways price range).
📣Trade responsibly with fxpro.com
👍1
#WaveAnalysis
#Tesla reversed from support level 114.00
• Likely to rise to resistance level 150.00
Tesla recently reversed up from the major long-term support level 114.00 (which has been repeatedly reversing the price from the start of 2020, as can be seen from the weekly Tesla chart below).
The support area near the support level 114.00 was further strengthened by the lower weekly Bollinger band.
Given the oversold reading on both the weekly Stochastic and RSI indicators, Tesla can be expected to rise further toward the next resistance level 150.00.
📣Trade responsibly with fxpro.com
#Tesla reversed from support level 114.00
• Likely to rise to resistance level 150.00
Tesla recently reversed up from the major long-term support level 114.00 (which has been repeatedly reversing the price from the start of 2020, as can be seen from the weekly Tesla chart below).
The support area near the support level 114.00 was further strengthened by the lower weekly Bollinger band.
Given the oversold reading on both the weekly Stochastic and RSI indicators, Tesla can be expected to rise further toward the next resistance level 150.00.
📣Trade responsibly with fxpro.com
❤1👍1
Crypto bulls try to encourage buyers
Bitcoin has added 1.4% in the last 24 hours, reaching the 16.7K level. It is a new attempt to test the 50-day moving average on a general lull and an effort by the bulls to paint a more optimistic technical picture with less strength while liquidity remains depressed.
The current dynamic looks like an attempt to draw a line under a bearish 2022. We also note that the December lows were higher than the November lows. But to argue for a reversal, it is more prudent to wait for a renewal of the local highs rather than relying only on the waning declines.
Closing the day above the 50-day average (around 16750) might give new momentum to the upside, and consolidation above 17K might be notable news in the quiet information flow and serve as a decoy for the bulls.
At the same time, we recall that since July 2022, overcoming the 50-day average served as a trigger for selling on impressive volumes, and bitcoin soon renewed lows.
Bitcoin has added 1.4% in the last 24 hours, reaching the 16.7K level. It is a new attempt to test the 50-day moving average on a general lull and an effort by the bulls to paint a more optimistic technical picture with less strength while liquidity remains depressed.
The current dynamic looks like an attempt to draw a line under a bearish 2022. We also note that the December lows were higher than the November lows. But to argue for a reversal, it is more prudent to wait for a renewal of the local highs rather than relying only on the waning declines.
Closing the day above the 50-day average (around 16750) might give new momentum to the upside, and consolidation above 17K might be notable news in the quiet information flow and serve as a decoy for the bulls.
At the same time, we recall that since July 2022, overcoming the 50-day average served as a trigger for selling on impressive volumes, and bitcoin soon renewed lows.
👍1
#WaveAnalysis
#CADCHF reversed from support level 0.6790
• Likely to rise to resistance level 0.6850
CADCHF recently reversed up from the key long-term support level 0.6790 (which has been reversing the price from the middle of 2020, as can be seen from the weekly CADCHF chart below).
The support area near the support level 0.6790 was strengthened by the lower weekly Bollinger band.
Given the oversold reading on the weekly Stochastic indicator, CADCHF can be expected to rise further toward the next resistance level 0.6850.
📣Trade responsibly with fxpro.com
#CADCHF reversed from support level 0.6790
• Likely to rise to resistance level 0.6850
CADCHF recently reversed up from the key long-term support level 0.6790 (which has been reversing the price from the middle of 2020, as can be seen from the weekly CADCHF chart below).
The support area near the support level 0.6790 was strengthened by the lower weekly Bollinger band.
Given the oversold reading on the weekly Stochastic indicator, CADCHF can be expected to rise further toward the next resistance level 0.6850.
📣Trade responsibly with fxpro.com